FORM 10-K
SECURlTlES AND EXCHANGE COMMlSSlON
WASHINGTON, D. C. 20549
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended
December 31, 1995 Commission File Number 1-3132-2
INDIANAPOLIS POWER & LIGHT COMPANY
(Exact name of Registrant as specified in its charter)
Indiana 35-0413620
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Monument Circle
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317-261-8261
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
518,985 Shares of Cumulative Preferred Stock
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to the filing requirements for at least the
past 90 days. Yes X No
--------- ---------
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. (X)
As of January 31, 1996, there were 17,206,630 shares of the
registrant's common stock (without par value) issued and outstanding.
_____________________________________
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Indianapolis Power & Light Company definitive
Information Statement for the Annual Meeting of Shareholders to be
held on April 17, 1996 are incorporated by reference into Part III of
this Report.
PART I
Item 1. BUSINESS
ORGANIZATION
Indianapolis Power & Light Company (IPL) is an operating public utility
incorporated under the laws of the state of Indiana on October 27, 1926.
IPL is a subsidiary of IPALCO Enterprises, Inc. (IPALCO). IPALCO is a
holding company incorporated under the laws of the state of Indiana on
September 14, 1983. All common stock of IPL is owned by IPALCO.
GENERAL
IPL is engaged primarily in generating, transmitting, distributing and
selling electric energy in the city of Indianapolis and neighboring cities,
towns, communities, and adjacent rural areas, all within the state of
Indiana, the most distant point being about forty miles from Indianapolis.
It also produces, distributes and sells steam within a limited area in such
city. There have been no significant changes in the services rendered, or
in the markets or methods of distribution, since the beginning of the
fiscal year. IPL intends to do business of the same general character as
that in which it is now engaged. No private or municipally-owned electric
public utility companies are competing with IPL in the territory it serves.
IPL operates under indeterminate permits subject to the jurisdiction of
the Indiana Utility Regulatory Commission (IURC). Such permits are subject
to revocation by the IURC for cause. The Public Service Commission Act of
Indiana (the PSC Act), which provides for the issuance of such permits,
also provides that if the PSC Act is repealed, indeterminate permits will
cease and a utility will again come into possession of such franchises as
were surrendered at the time of the issue of the permit, but in no event
shall such reinstated franchise be terminated within less than five years
from the date of repeal of the PSC Act.
IPL's business is not dependent on any single customer or group of
customers. During 1995, IPL's sales, according to the Standard Industrial
Classification, were 33%, 42% and 25% for residential, commercial and
industrial customers, respectively.
The electric utility business is affected by the various seasonal
weather patterns throughout the year and, therefore, the operating revenues
and associated operating expenses are not generated evenly by months during
the year.
IPL's electric system is directly interconnected with the electric
systems of Indiana Michigan Power Company, PSI Energy, Inc., Southern
Indiana Gas and Electric Company, Wabash Valley Power Association, Hoosier
Energy Rural Electric Cooperative, Inc. and the Indiana Municipal Power
Agency.
Also, IPL and 29 other electric utilities, known as the East Central
Area Reliability Group (ECAR), are cooperating under an agreement which
provides for coordinated planning of generating and transmission facilities
and the operation of such facilities to provide maximum reliability of bulk
power supply in the nine-state region served by ECAR. Smaller electric
utility systems, independent power producers and power marketers
participate as associate members.
In 1995, approximately 99.5% of the total kilowatt-hours sold by IPL
were generated from coal, 0.2% from middle distillate fuel oil, 0.2% from
gas and 0.1% from secondary steam purchased from the Indianapolis Resource
Recovery Project. In addition to use in oil-fired generating units, fuel
oil is used for start up and flame stabilization in coal-fired generating
units as well as for coal thawing and coal handling. Gas fuel is used in
IPL's newer combustion turbines.
IPL's long-term coal contracts provide for the supply of the major
portion of its burn requirements through the year 1999, assuming
environmental regulations can be met. The long-term coal agreements are
with three suppliers and the coal is produced entirely in the state of
Indiana. These three suppliers are not affiliates of IPL; see Exhibits
listed under Part IV Item 14(a)3(10.1 to 10.5) for a list of coal
contracts. It is presently believed that all coal used by IPL will be
mined by others. IPL normally carries fuel oil and a 70-day supply of coal
to offset unforeseen occurrences such as labor disputes, equipment
breakdowns and power sales to other utilities. When strikes are
anticipated in the coal industry, IPL increases its stockpile to an
approximate 92-day supply.
The combined cost of coal, fuel oil and gas used in the generation of
electric energy for 1995 averaged 1.129 cents per kilowatt-hour or $24.04
per equivalent ton of coal, compared with the 1994 average fuel cost for
electric generation of 1.162 cents per kilowatt-hour or $24.95 per
equivalent ton of coal.
IPL has a long-term contract to purchase steam for use in its steam
distribution system with Ogden Martin Systems of Indianapolis, Inc. (Ogden
Martin). Ogden Martin owns and operates the Indianapolis Resource Recovery
Project which is a waste-to-energy facility located in Marion County,
Indiana. During 1995, IPL's steam system purchased 47.2% of its total
therm requirement from Ogden Martin. Additionally, 35.5% of its 1995 one-
hour peak load was met with steam purchased from Ogden Martin. IPL also
purchased 4.2 million secondary therms which represent Ogden Martin send-
out in excess of the IPL steam system requirements. Such secondary steam
is used to produce electricity at the IPL Perry K and Perry W facilities.
CONSTRUCTION
The cost of IPL's construction program during 1995, 1994 and 1993 was
$175.6 million, $185.6 million and $149.3 million, respectively, including
Allowances for Funds Used During Construction (AFUDC) of $8.7 million, $7.3
million and $3.6 million, respectively.
IPL's construction program is reviewed periodically and is updated to
reflect among other things the changes in economic conditions, revised load
forecasts and cost escalations under construction contracts. Current
projections indicate that IPL will need about 400 megawatts (MW) of new
capacity resources by the summer of 2000 to replace the 200 MW purchase
discussed below and to provide for growth. These resource requirements can
be met in a variety of ways including, but not limited to, a combination of
power purchases and peaking turbines.
During 1992, IPL entered into a five-year firm power purchase agreement
with Indiana Michigan Power Company (IMP), for 200 MW of additional
capacity for the near-term requirements. See Item 7, "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS"
under "Capital Requirements" for additional information regarding the IMP
agreement.
IPL's construction program for the five-year period 1996-2000, is
estimated to cost $528.4 million including AFUDC. The estimated cost of
the program by year (in millions) is $103.6 in 1996; $100.9 in 1997; $106.7
in 1998; $111.9 in 1999 and $105.3 in 2000. It includes $271.2 million for
additions, improvements and extensions to transmission and distribution
lines, substations, power factor and voltage regulating equipment,
distribution transformers and street lighting distribution. The forecast
also includes $107.3 million for combustion turbines with in-service dates
of 1999, 2000 and 2001, and $149.9 million in environmental costs of which
approximately $35 million pertains to the Clean Air Act. With respect to
the expenditures for pollution control facilities to comply with the Clean
Air Act and with respect to the regulatory authority of the IURC as it
relates to the integrated resource plan, see "REGULATORY MATTERS" and Item
7, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS."
FINANCING
Long-term debt, cash flows from operations and temporary short-term
borrowings are forecasted to provide the funds required for the five-year
construction program. Uncertainties which could affect this forecast
include the impact of inflation on operating expenses, the actual degree of
growth in KWH sales and the level of interchange sales with other
utilities. Additionally, IPL has authority from the IURC to redeem and
replace certain of its existing securities.
EMPLOYEE RELATIONS
As of December 31, 1995, IPL had 2,194 employees of whom 1,110 were
represented by the International Brotherhood of Electrical Workers, AFL-CIO
(IBEW) and 395 were represented by the Electric Utility Workers Union
(EUWU), an independent labor organization. In December 1993, the
membership of the IBEW ratified a new labor agreement which remains in
effect until December 16, 1996. The agreement provided for general pay
adjustments of 4% in 1993 and 3.5% in both 1994 and 1995, and changes in
pension and health care coverage. In March 1995, the membership of the
EUWU ratified a new labor agreement which remains in effect until February
23, 1998. The agreement provided for general pay adjustments of 2% in
1995, 1996 and 1997; lump sum payments of $500 in both 1995 and 1996; and
changes in pension and health care coverage.
REGULATORY MATTERS
IPL is subject to regulation by the IURC as to its services and
facilities, valuation of property, the construction, purchase or lease of
electric generating facilities, classification of accounts, rates of
depreciation, rates and charges, issuance of securities (other than
evidences of indebtedness payable less than twelve months after the date of
issue), the acquisition and sale of public utility properties or securities
and certain other matters. See Note 9 in the Notes to Financial
Statements.
In addition, IPL is subject to the jurisdiction of the Federal Energy
Regulatory Commission (FERC), in respect of short-term borrowings not
regulated by the IURC, the sale and transmission of electric energy in
interstate commerce, the classification of its accounts and the acquisition
and sale of utility property in certain circumstances as provided by the
Federal Power Act.
IPL is also subject to federal, state and local environmental laws and
regulations, particularly as to generating station discharges affecting air
and water quality. The impact of compliance with such regulations on the
capital and operating costs of IPL has been and will continue to be
substantial. See Item 7, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" under "Capital
Requirements." Accordingly, IPL has developed a plan to reduce sulfur
dioxide and nitrogen oxide emissions from several generating units. This
plan has been approved by the IURC and the Environmental Protection Agency
(EPA). Estimated annual costs for all air, solid waste and water
environmental compliance measures are $116 million and $17 million in 1996
and 1997, respectively.
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
STATISTICAL INFORMATION - ELECTRIC
The following table of statistical information presents additional data on IPL's operation.
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------------
1995 1994 1993 1992 1991
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Operating Revenues (In Thousands):
Residential $ 243,055 $ 230,805 $ 225,138 $ 212,757 $ 224,039
Small industrial and commercial 130,780 129,346 127,551 126,588 135,456
Large industrial and commercial 275,803 266,703 255,945 243,446 237,200
Public lighting 7,598 6,949 7,186 7,133 7,106
Miscellaneous 8,289 7,186 7,373 6,018 6,960
-------------- -------------- -------------- -------------- --------------
Revenues - ultimate consumers 665,525 640,989 623,193 595,942 610,761
Sales for resale - REMC 1,105 1,098 897 861 900
Sales for resale - other 6,758 7,680 5,237 2,400 4,197
-------------- -------------- -------------- -------------- --------------
Total electric revenues $ 673,388 $ 649,767 $ 629,327 $ 599,203 $ 615,858
============== ============== ============== ============== ==============
Kilowatt-hour Sales (In Millions):
Residential 4,277 4,077 4,014 3,675 3,960
Small industrial and commercial 2,209 2,207 2,202 2,171 2,331
Large industrial and commercial 6,509 6,306 6,169 5,843 5,612
Public lighting 61 64 62 64 64
-------------- -------------- -------------- -------------- --------------
Sales - ultimate consumers 13,056 12,654 12,447 11,753 11,967
Sales for resale - REMC 28 26 24 23 23
Sales for resale - other 394 456 321 169 256
-------------- -------------- -------------- -------------- --------------
Total kilowatt-hours sold 13,478 13,136 12,792 11,945 12,246
============== ============== ============== ============== ==============
Customers at End of Year:
Residential 365,163 360,347 356,015 352,139 347,718
Small industrial and commercial 39,781 38,849 38,359 38,171 38,011
Large industrial and commercial 3,557 3,525 3,342 3,163 2,952
Public lighting 281 266 252 239 229
-------------- -------------- -------------- -------------- --------------
Total ultimate consumers 408,782 402,987 397,968 393,712 388,910
Sales for resale - REMC 1 1 1 1 1
-------------- -------------- -------------- -------------- --------------
Total electric customers 408,783 402,988 397,969 393,713 388,911
============== ============== ============== ============== ==============
Miscellaneous Statistics:
Kilowatt-hour output (In Millions):
Generated (net after station use) 14,032 13,580 13,254 12,525 12,851
Purchased 257 206 325 126 160
-------------- -------------- -------------- -------------- --------------
Total generated and purchased 14,289 13,786 13,579 12,651 13,011
Company use, line loss, etc. 811 650 787 706 765
-------------- -------------- -------------- -------------- --------------
Energy sold 13,478 13,136 12,792 11,945 12,246
============== ============== ============== ============== ==============
Load factor (percent) 56.94 57.64 57.44 56.72 56.37
Average BTU per net kilowatt-hour 10,490 10,445 10,503 10,385 10,455
Cost of fuel per million BTU $ 1.076 $ 1.112 $ 1.096 $ 1.103 $ 1.113
Cost of fuel per ton (includes oil and gas
stated in equivalent tons of coal) $ 24.041 $ 24.946 $ 24.488 $ 24.547 $ 24.804
Summer plant capability (megawatts)* 2,986 2,907 2,829 2,829 2,829
Maximum demand on IPL system (megawatts)* 2,786 2,640 2,635 2,505 2,583
Average use per residential
customer (kilowatt-hours) 11,796 11,393 11,345 10,515 11,460
Average revenue per residential customer $ 670.33 $ 645.02 $ 636.28 $ 608.68 $ 648.36
Average revenue per small industrial and
commercial customer $ 3,311.99 $ 3,327.04 $ 3,310.59 $ 3,305.94 $ 3,552.03
Average revenue per large industrial and
commercial customer $ 76,526.98 $ 77,960.62 $ 78,055.83 $ 79,324.43 $ 83,816.09
Average residential revenue per
kilowatt-hour (cents) 5.683 5.662 5.609 5.789 5.658
* All figures are net of station use.
</TABLE>
Item 2. PROPERTIES
IPL's executive offices are located at One Monument Circle,
Indianapolis, Indiana. This facility contains approximately 201,300 square
feet of space and contains certain administrative operations of IPALCO's
subsidiaries.
IPL also owns two service centers located at 1230 West Morris Street and
3600 North Arlington Avenue, both in Indianapolis, Indiana. IPL's customer
service center is located at 2102 North Illinois Street in Indianapolis.
IPL owns and operates five primarily coal-fired generating plants, three
of which are used for total electric generation and two of which are used
for a combination of electric and steam generation. In relation to
electric generation, there exists a total gross nameplate rating of 3,035
MW, a winter capability of 3,064 MW and a summer capability of 2,986 MW.
All figures are net of station use. In relation to steam generation, there
exists a gross capacity of 2,290 Mlbs. (thousands of pounds) per hour.
Total Electric Stations:
H. T. Pritchard plant (Pritchard), 25 miles southwest of
Indianapolis (seven units in service - one in 1949, 1950, 1951, 1956
and 1967 and two in 1953) with 367 MW nameplate rating and net
winter and summer capabilities of 344 MW and 341 MW, respectively.
E. W. Stout plant (Stout) located in southwest part of Marion County
(eleven units in service - one each in 1941, 1947, 1958, 1961, 1967,
1994 and 1995 and four in 1973) with 921 MW nameplate rating and net
winter and summer capabilities of 1,000 MW and 924 MW, respectively.
Petersburg plant (Petersburg), located in Pike County, Indiana
(seven units in service - four in 1967 and one each in 1969, 1977
and 1986) with 1,716 MW nameplate rating and net winter and summer
capabilities of 1,690 MW and 1,690 MW, respectively.
Combination Electric and Steam Stations:
C.C. Perry Section K plant (Perry K), in the city of Indianapolis
with 20 MW nameplate rating (net winter capability 20 MW, summer 19
MW) for electric and a gross capacity of 1,990 Mlbs. per hour for
steam.
C.C. Perry Section W plant (Perry W), in the city of Indianapolis
with 11 MW nameplate rating (net winter capability 10 MW, summer 12
MW) for electric and a gross capacity of 300 Mlbs. per hour for
steam.
Net electrical generation during 1995, at the Petersburg, Stout and
Pritchard stations accounted for about 75.0%, 20.1% and 4.9%, respectively,
of IPL's total net generation. All steam generation by IPL for the steam
system was produced by the Perry K and Perry W stations.
Included in the above totals are three gas turbine units at the Stout
station added in 1973, one gas turbine added in 1994 and one gas turbine
added in 1995 with a combined nameplate rating of 214 MW, one diesel unit
each at Pritchard and Stout stations and three diesel units at Petersburg
station, all added in 1967. Each diesel unit has a nameplate rating of 3
MW.
IPL's transmission system includes 457 circuit miles of 345,000 volt
lines, 361 circuit miles of 138,000 volt lines and 271 miles of 34,500 volt
lines. Distribution facilities include 4,693 pole miles and 19,826 wire
miles of overhead lines. Underground distribution and service facilities
include 465 miles of conduit and 5,148 wire miles of conductor.
Underground street lighting facilities include 107 miles of conduit and 670
wire miles of conductor. Also included in the system are 74 bulk power
substations and 80 distribution substations.
Steam distribution properties include 23 miles of mains with 259
services. Other properties include coal and other minerals, underlying 798
acres in Sullivan County and coal underlying about 6,215 acres in Pike and
Gibson Counties, Indiana. Additional land, approximately 4,722 acres in
Morgan County, Indiana and approximately 884 acres in Switzerland County,
Indiana has been purchased for future plant sites.
All of the facilities owned by IPL are well-maintained, in good
condition and adequate to meet the present needs of IPL.
The Mortgage and Deed of Trust of IPL, together with the Supplemental
Indentures thereto (the "Mortgage"), secure first mortgage bonds issued by
IPL. Pursuant to the terms of the Mortgage, substantially all property
owned by IPL is subject to a direct first mortgage lien.
Item 3. LEGAL PROCEEDINGS
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
EXECUTIVE OFFICERS OF THE REGISTRANT AT FEBRUARY 27, 1996
Name, age (at December 31, 1995), and positions and offices held for the
past five years:
From To
John R. Hodowal (50) ---- --
Chairman of the Board February, 1990
Chief Executive Officer May, 1989
Ramon L. Humke (63)
President and Chief Operating
Officer February, 1990
John R. Brehm (42)
Senior Vice President - Finance
and Information Services May, 1991
Senior Vice President -
Financial Services May, 1989 May, 1991
Robert W. Rawlings (54)
Senior Vice President -
Electric Production May, 1991
Vice President - Electric
Production May, 1989 May, 1991
Bryan G. Tabler (52)
Senior Vice President -
Secretary and General Counsel January, 1995
Partner, Barnes & Thornburg January, 1979 October, 1994
Gerald D. Waltz (56)
Senior Vice President -
Business Development May, 1991
Senior Vice President -
Engineering and Operations April, 1986 May, 1991
Max Califar (42)
Vice President - Human
Resources December, 1992
Treasurer May, 1989 December, 1992
Steven L. Meyer (37)
Treasurer December, 1992
Stephen J. Plunkett (47)
Controller May, 1991
Assistant Controller May, 1989 May, 1991
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS
All common stock of IPL is owned by IPALCO and is not publicly
traded on any stock exchange.
Aggregate quarterly dividends paid on the common stock during
1995 and 1994 were as follows (in thousands):
1995 1994
---- ----
First Quarter $20,011 $19,223
Second Quarter 20,420 19,995
Third Quarter 20,423 20,011
Fourth Quarter 20,436 20,011
At its meeting on February 27, 1996, IPL's Board of Directors
declared a regular quarterly dividend on common stock of $21,052,909.72
in total, payable April 15, 1996.
Dividend Restrictions
- ---------------------
So long as any of the several series of bonds of IPL issued under
the Mortgage and Deed of Trust, dated as of May 1, 1940, as
supplemented and modified, executed by IPL to American National Bank
and Trust Company of Chicago, as Trustee, remain outstanding, IPL is
restricted in the declaration and payment of dividends, or other
distribution on shares of its capital stock of any class, or in the
purchase or redemption of such shares, to the aggregate of its net
income, as defined in Section 47 of such Mortgage, after
December 31, 1939. The amount which these Mortgage provisions would
have permitted IPL to declare and pay as dividends at December 31,
1995, exceeded retained earnings at that date. Such restrictions do
not apply to the declaration or payment of dividends upon any shares
of capital stock of any class to an amount in the aggregate not in
excess of $1,107,155, or to the application to the purchase or
redemption of any shares of capital stock of any class of amounts
not to exceed in the aggregate the net proceeds received by IPL from
the sale of any shares of its capital stock of any class subsequent
to December 31, 1939. The management of IPL believes these
restrictions will not materially restrict anticipated dividends.
Item 6. SELECTED FINANCIAL DATA
-----------------------
<TABLE>
<CAPTION>
(In Thousands) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total operating revenues $ 709,206 $ 686,076 $ 664,303 $ 633,203 $ 647,873
Operating income 148,112 143,310 142,368 134,240 149,876
Allowance for funds used
during construction 11,370 9,381 5,527 5,081 2,611
Income applicable to
common stock 103,091 100,641 99,584 89,876 100,684
Utility plant - net 1,792,007 1,711,772 1,608,871 1,532,964 1,488,940
Total assets 2,108,816 2,000,380 1,870,306 1,763,246 1,686,439
Construction expenditures 166,874 178,295 145,765 112,037 94,633
Common shareholder's equity 747,129 725,762 705,149 682,413 666,223
Nonredeemable cumulative
preferred stock 51,898 51,898 51,898 51,898 51,898
Long-term debt (less current
maturities and sinking
fund requirements) 669,000 654,121 532,260 540,641 537,718
See financial statements.
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Nature of Operations and Competition
- ------------------------------------
IPL is a regulated public utility and is principally engaged in
providing electric and steam service to the Indianapolis
metropolitan area. As a regulated entity, IPL is required to use
certain accounting methods prescribed by regulatory bodies which may
differ from those accounting methods required to be used by
nonregulated entities. See Note 1 in the Notes to Financial
Statements.
On a national basis, competition for wholesale and retail sales
within the electric utility industry has been increasing. In
Indiana, competition has been primarily focused on the wholesale
power markets, that is, the sale of bulk power to other public and
municipal utilities. Existing Indiana law provides for public
utilities to have an exclusive permit at the retail level; however,
several other states are currently examining competition at the
retail level. During 1995, the FERC issued a Notice of Proposed
Rulemaking (NOPR) which seeks to increase competition at the
wholesale level by ensuring fair and equal access to the national
transmission grid for any potential power supplier. The FERC in
this NOPR also has proposed new rules dealing with many related
transmission access issues, including access fees and the recovery
of stranded costs. IPL and many other affected parties have
submitted comments and responses to the FERC regarding this NOPR.
The FERC is not expected to take any further action on the NOPR
before mid-1996.
Management of IPL believes it can be competitive in the wholesale
market due to its low cost, available capacity and reliability. In
order to remain competitive in the face of increasing competition,
IPL will need to maintain its low cost through controlling costs and
expenses. IPL has formed three Strategic Business Units; Electric
Production, Electric Delivery and Steam, to better evaluate costs
and to prepare for the transition to a more competitive environment.
The impact of continuing competitive pressures, including the
impact of any final order on the FERC NOPR on IPL's wholesale and
retail electric and steam markets, cannot be determined at this
time.
Regulatory Matters
- ------------------
Electric Rate Settlement Agreement
----------------------------------
On August 24, 1995, the IURC issued an order approving without
amendment a Stipulation and Settlement Agreement (Settlement
Agreement) resolving all issues in IPL's pending electric general
rate proceeding. The Settlement Agreement authorized IPL to
increase its basic rates and charges for electric service in two
steps, to begin the amortization of regulatory assets and approved
IPL's plan to expense and to fund its annual postretirement
benefits. These issues are discussed further in Note 1, Note 9 and
Note 11 in the Notes to Financial Statements.
Environmental Compliance Plan
-----------------------------
IPL is subject to the air quality provisions specified in the
federal Clean Air Act Amendments of 1990 and related regulations
(the Act). IPL has obtained IURC and EPA approval of its
Environmental Compliance Plan, together with the costs and expenses
associated therewith, which provides for the installation of sulfur
dioxide and nitrogen oxide emissions abatement equipment and the
installation of continuous emission monitoring systems to meet the
requirements of both Phase I and Phase II of the Act. See "Capital
Requirements."
Effective January 1, 1995, IPL began receiving annual emission
"allowances" for certain of its generating units. Each allowance
permits the emission of one ton of sulfur dioxide. IPL presently
expects that annual sulfur dioxide emissions will not exceed annual
allowances provided to IPL under the Act. Allowances not required
in the operation of IPL facilities may be reserved for future
periods or sold. The value of such unused allowances that may be
available to IPL for use in future periods or for sale is subject to
a developing market and is unknown at this time.
Capital Requirements
- --------------------
The capital requirements of IPL are primarily driven by the need
for facilities to ensure customer service reliability and
environmental compliance and by the maturing of long-term debt.
Forecasted Demand and Energy
----------------------------
From 1995 to 2000, annual peak demand is forecasted to experience
a compound 1.4% increase, while retail kilowatt-hour (KWH) sales are
anticipated to increase at a 1.6% compound growth rate. Both
compound growth rates are computed assuming normal weather
conditions.
Integrated Resource Plan
------------------------
Current projections indicate a need for about 400 MW of new
capacity resources by the summer of 2000 to replace the 200 MW
purchase discussed below and to provide for growth. These resource
requirements can be met in a variety of ways including, but not
limited to, a combination of power purchases and peaking turbines.
IPL continues to review its resource plan to consider the
appropriateness of all reasonable resource options to meet capacity
requirements over the decade of the 1990s and beyond. The following
discussion makes certain assumptions regarding IPL's plans to meet
these requirements.
IPL is receiving 200 MW of firm capacity under an existing power
purchase agreement. The 200 MW purchase agreement provides for
monthly capacity payments by IPL of $1.2 million and expires March
31, 1997. IPL is presently evaluating available options to purchase
firm power in 1997 and beyond. The exact timing, MW capacity and
cost of any such purchase cannot be ascertained at this time.
IPL placed in service an 80 MW combustion turbine on January 13,
1995. IPL's near-term supply plan through the year 2000 includes
two additional 100 MW combustion turbines with in-service dates in
1999 and 2000; however, the availability of purchased power due to a
more robust competitive wholesale market may enable IPL to postpone
or avoid such additional combustion turbines.
Cost of Construction Program
----------------------------
The cost of IPL's construction program during 1995, 1994 and 1993
was $175.6 million, $185.6 million and $149.3 million, including
AFUDC of $8.7 million, $7.3 million and $3.6 million, respectively.
IPL estimates the cost of the construction program for the five
years, 1996-2000, to be approximately $528.4 million, including
AFUDC of $15.1 million. This program is subject to continuing
review and is revised from time to time in light of changes in the
actual customer demand for electric energy, IPL's financial
condition and construction cost escalations. The five-year
construction program includes $107.3 million for combustion turbines
with in-service dates of 1999, 2000 and 2001, and $34.6 million, in
1996, to comply with the Clean Air Act. IPL estimates that no
additional significant capital expenditures will be required to
bring generating units into compliance with the Clean Air Act until
the year 2010 and beyond. Expenditures for the new capacity are
contingent upon the review of power market conditions and other
factors.
Retirement of Long-term Debt Securities
---------------------------------------
During 1995, 1994 and 1993, IPL retired long-term debt, including
sinking fund payments, of $80.4 million, $85.9 million and $97.9
million, respectively, which required replacement in part with other
debt securities at a lower cost.
IPL will retire $15.2 million and $11.3 million of maturing long-
term debt during 1996 and 1997, respectively, which may require
replacement in whole or in part with other debt or equity
securities. In addition, other existing higher rate debt may be
refinanced depending upon market conditions.
Liquidity and Financing Requirements
- ------------------------------------
Liquidity is the ability of an entity to generate adequate
amounts of cash to meet its short-term and long-term needs. IPL's
liquidity is a function of its construction program, its debt
service requirements, its ability to generate internal funds and its
access to external capital markets.
During the three-year period ended December 31, 1995, IPL's
permanent financing totaled $406.5 million in long-term debt. The
net proceeds of these securities were used to retire existing long-
term debt of $264.1 million, including premiums, and to partially
fund IPL's construction expenditures. The remaining cash
requirements during this three-year period were funded with cash
flows from operations and short-term debt.
During the next five years, IPL is forecasted to meet its
liquidity requirements without additional permanent financing. Cash
flows from operations and temporary short-term borrowings are
forecasted to provide the funds required for IPL's construction
program and the retirement of maturing long-term debt.
Additionally, a reasonable debt capitalization ratio, favorable debt
ratings and a low construction forecast (see "Capital Requirements")
are expected to improve IPL's ability to access external capital
markets during this period, if necessary. IPL's debt capitalization
ratio was 46.1% at December 31, 1995. IPL's senior secured debt is
rated AA- by Standard & Poor's, Aa2 by Moody's Investor Services and
AA by Duff & Phelps. IPL's commercial paper is rated A-1+ by
Standard & Poor's and P-1 by Moody's Investor Services.
Uncertainties which could affect this forecast include the impact
of inflation on operating expenses, the actual degree of growth in
KWH sales and the level of interchange sales with other utilities.
Financial Flexibility
---------------------
At December 31, 1995, IPL had unused lines of credit of $100
million and an uncommitted line of credit of $25 million of which
$16 million was unused. See Note 7 in the Notes to Financial
Statements. As of the same date and considering all existing
restrictions, IPL had the capacity to issue approximately $952
million of additional long-term debt. IPL also has authority from
the IURC to redeem and replace certain of its existing securities.
IPL is limited in its ability to issue certain securities by
restrictions under its Mortgage and Deed of Trust (Mortgage) and its
Amended Articles of Incorporation (Articles). The restriction under
the Articles requires that the net income of IPL, as specified
therein, shall be at least one and one-half times the total interest
on the funded debt and the proforma dividend requirements on the
outstanding preferred stock and on any preferred stock proposed to
be issued, before any additional preferred stock can be issued. The
Mortgage restriction requires that net earnings as calculated
thereunder be two and one-half times the annual interest
requirements before additional bonds can be authenticated on the
basis of property additions. Based on IPL's net earnings for the
twelve months ended December 31, 1995, the ratios under the Articles
and the Mortgage are 3.24 and 7.94, respectively. IPL believes
these requirements will not restrict any anticipated future
financings.
RESULTS OF OPERATIONS
Income applicable to common stock increased by $2.5 million in
1995 compared to 1994. Income applicable to common stock increased
by $1.1 million in 1994 compared to 1993. The following discussion
highlights the factors contributing to these increases.
Operating Revenues
- ------------------
Operating revenues in 1995 and 1994 increased from the prior year
by $23.1 million and by $21.8 million, respectively. The increases
in revenues resulted from the following:
Increase (Decrease)
1995 over 1994 1994 over 1993
-------------------------------
(Millions of Dollars)
Electric:
Increase in base rates $ 12.2 $ 0.0
Additional KWH sales - net of fuel 14.1 8.2
Fuel revenues (2.9) 9.8
Steam revenues (0.5) 1.3
Sales for resale (0.9) 2.7
Other revenues 1.1 (0.2)
------ ------
Total change in operating revenues $ 23.1 $ 21.8
====== ======
The increase in base rate electric revenues is the result of new
tariffs, effective September 1, 1995, designed to produce $35-
million additional annual revenues. The increase in retail KWH
sales during 1995, as compared to 1994, reflects customer growth and
increased sales resulting primarily from warmer and colder weather
in the third and fourth quarters of 1995, respectively. The 1995
cooling and heating degree days were higher by 7.4% and 14.9%,
respectively, as compared to 1994. The increased retail KWH sales
in 1994, as compared to 1993, reflects increased residential and
industrial sales resulting from an improved economy, partially
offset by slightly milder heating season weather. The changes in
fuel revenues in 1995 and 1994 from the prior year reflect changes
in total fuel costs billed customers. The decreased wholesale sales
during 1995 and the increased wholesale sales during 1994 reflect
energy requirements of other utilities in those years.
Operating Expenses
- ------------------
Fuel costs decreased by $0.6 million and increased by $11.4
million from the prior year during 1995 and 1994, respectively. The
decrease in 1995 was due to decreased unit costs of coal and oil of
$6.5 million and decreased deferred fuel costs of $1.2 million,
partially offset by increased fuel consumption of $7.1 million. The
increase in fuel costs during 1994 was due to increased deferred
fuel costs of $6.7 million, increased unit costs of coal and oil of
$2.7 million and increased fuel consumption of $2.0 million.
Other operating expenses in 1995 and 1994 increased from the
prior year by $12.2 million and by $3.4 million, respectively. The
increase for 1995 was primarily due to an increase in administrative
and general expenses of $8.5 million which mainly resulted from the
recording of postretirement benefit expense in connection with the
rate case, an increase in distribution expenses of $1.5 million,
miscellaneous steam power operating expenses at the Petersburg plant
of $1.2 million, an increase in customer accounts expense of $0.5
million and an increase in other production expenses of $0.5
million. Other operating expenses for 1994 increased primarily due
to an increase in administrative and general expenses of $1.7
million, an increase in miscellaneous power station operating
expenses at the Petersburg plant of $1.2 million and an increase in
other production expenses of $0.5 million.
Purchased steam in 1995 and 1994 decreased in both years due to
lower prices and decreased therms purchased from an independent
resource recovery system located within the city of Indianapolis.
Maintenance expenses decreased by $5.5 million and increased by
$1.2 million from the prior year during 1995 and 1994, respectively.
The decrease for 1995 reflected decreased unit overhaul expenses of
$4.2 million and decreased distribution and transmission expenses of
$1.3 million. The increase in maintenance expenses in 1994 was due
to increased overhead distribution expenses of $3.1 million and
increased transmission and other distribution expenses of $0.7
million, partially offset by decreased unit overhaul expenses in
1994, compared to 1993.
Depreciation and amortization expense in 1995 and 1994 increased
from the prior year by $14.0 million and by $8.7 million,
respectively. These increases resulted primarily from adjustments
to property held for future use, increases in the depreciable
utility plant balances and from the amortization of property-related
regulatory deferrals effective with the September 1, 1995, electric
rate increase. The adjustments to property held for future use were
$12.3 million in 1995 and $3.9 million in 1994. These adjustments
reflect expired regulatory permits and specific design and
engineering costs of a future generating station in Patriot,
Indiana.
Income taxes - net, in 1995 and 1994 decreased from the prior
year by $1.6 million and by $4.3 million, respectively. The
decrease in 1995 reflects an adjustment to deferred taxes on removal
costs of $2.0 million partially offset by an increase in pretax
utility operating income. The decrease for 1994 resulted from a
decrease in pretax utility operating income.
Other Income And Deductions
- ---------------------------
Allowance for equity funds used during construction in 1995 and
1994 increased from the prior year by $1.3 million and by $2.7
million, respectively. The increases were the result of an
increased construction base in both years primarily due to the
construction of new environmental facilities and, in 1995, from
carrying charges on regulatory assets of $1.4 million resulting from
the 1995 Settlement Agreement.
Interest Charges
- ----------------
Interest on long-term debt increased slightly during 1995 from
the prior year and increased by $4.2 million during 1994 from the
prior year. The increase during 1994 was due to the issuance of
$180 million long-term debt on February 3, 1994, (6.05% Series,
First Mortgage Bonds and 7.05% Series, First Mortgage Bonds). The
interest on long-term debt was partially offset by the refinancing
of three series of IPL's First Mortgage Bonds in March 1994 as
follows: the 7.4% Series, First Mortgage Bonds; the 7 1/8% Series,
First Mortgage Bonds and the 7.65% Series, First Mortgage Bonds; all
of which were replaced with the 6.05% Series, First Mortgage Bonds.
Other interest charges increased by $3.2 million during 1995 from
the prior year and decreased by $0.8 million during 1994 from the
prior year. The increase during 1995 was primarily due to increased
short-term debt borrowings, whereas, the decrease during 1994 was
due to decreased short-term debt borrowings.
The allowance for borrowed funds used during construction in 1995
and 1994 increased from the prior year by $0.7 million and by $1.2
million, respectively, primarily due to an increased construction
base for both years and also for 1995, compared to 1994, partially
offset by decreased carrying charges on regulatory assets.
1996
----
Factors having a bearing on 1996 earnings compared to 1995 will
include the impact of economic conditions, weather conditions, the
level of construction expenditures and the implementation in mid-
1996 of new electric system tariffs.
The overall effect these factors will have on 1996 earnings
cannot be accurately determined at this time.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors of Indianapolis Power & Light Company:
We have audited the accompanying balance sheets and statements of
capitalization of Indianapolis Power & Light Company as of December
31, 1995 and 1994, and the related statements of income, retained
earnings and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements and financial
statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of Indianapolis Power &
Light Company as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Indianapolis, Indiana
January 26, 1996
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Income
For the Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
--------------- --------------- ---------------
(In Thousands)
<S> <C> <C> <C>
OPERATING REVENUES (Note 9):
Electric $ 673,388 $ 649,767 $ 629,327
Steam 35,818 36,309 34,976
--------------- --------------- ---------------
Total operating revenues 709,206 686,076 664,303
--------------- --------------- ---------------
OPERATING EXPENSES:
Operation:
Fuel 169,206 169,756 158,390
Other 116,428 104,273 100,890
Power purchased 19,102 19,060 19,407
Purchased steam 6,680 7,653 8,051
Maintenance 63,013 68,562 67,326
Depreciation and amortization 100,984 87,028 78,372
Taxes other than income taxes 31,706 30,891 29,627
Income taxes - net (Note 8) 53,975 55,543 59,872
--------------- --------------- ---------------
Total operating expenses 561,094 542,766 521,935
--------------- --------------- ---------------
OPERATING INCOME 148,112 143,310 142,368
--------------- --------------- ---------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 6,003 4,672 2,010
Other - net (2,020) (1,527) (1,237)
Income taxes - net (Note 8) 407 823 599
--------------- --------------- ---------------
Total other income - net 4,390 3,968 1,372
--------------- --------------- ---------------
INCOME BEFORE INTEREST CHARGES 152,502 147,278 143,740
--------------- --------------- ---------------
INTEREST CHARGES:
Interest on long-term debt 45,656 45,566 41,399
Other interest 4,728 1,497 2,305
Allowance for borrowed funds used during construction (5,367) (4,709) (3,517)
Amortization of redemption premiums and expenses on
debt - net 1,212 1,101 787
--------------- --------------- ---------------
Total interest charges 46,229 43,455 40,974
--------------- --------------- ---------------
NET INCOME 106,273 103,823 102,766
PREFERRED DIVIDEND REQUIREMENTS 3,182 3,182 3,182
--------------- --------------- ---------------
INCOME APPLICABLE TO COMMON STOCK $ 103,091 $ 100,641 $ 99,584
=============== =============== ===============
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Balance Sheets
December 31, 1995 and 1994
<CAPTION>
- ----------------------------------------------------------------------------------------------------
ASSETS 1995 1994
- ----------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C>
UTILITY PLANT:
Utility plant in service (Note 2) $ 2,517,790 $ 2,415,531
Less accumulated depreciation 984,910 916,943
----------------- -----------------
Utility plant in service - net 1,532,880 1,498,588
Construction work in progress 249,249 191,010
Property held for future use 9,878 22,174
----------------- -----------------
Utility plant - net 1,792,007 1,711,772
----------------- -----------------
OTHER PROPERTY -
At cost, less accumulated depreciation 4,454 2,898
----------------- -----------------
CURRENT ASSETS:
Cash and cash equivalents 9,985 7,835
Accounts receivable (less allowance for doubtful
accounts - 1995, $786,000 and 1994, $743,000) 55,459 46,097
Receivable from parent 1,693 1,881
Fuel - at average cost 29,894 37,161
Materials and supplies - at average cost 56,547 55,642
Prepayments and other current assets 4,095 8,176
----------------- -----------------
Total current assets 157,673 156,792
----------------- -----------------
DEFERRED DEBITS:
Regulatory assets (Note 4) 142,711 115,865
Miscellaneous 11,971 13,053
----------------- -----------------
Total deferred debits 154,682 128,918
----------------- -----------------
TOTAL $ 2,108,816 $ 2,000,380
================= =================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES 1995 1994
- ----------------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C>
CAPITALIZATION (See Statements of Capitalization):
Common shareholder's equity $ 747,129 $ 725,762
Cumulative preferred stock 51,898 51,898
Long-term debt 669,000 654,121
----------------- -----------------
Total capitalization 1,468,027 1,431,781
----------------- -----------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper (Note 7) 65,022 26,400
Current maturities and sinking fund requirements (Note 6) 15,150 350
Accounts payable and accrued expenses 73,053 68,854
Dividends payable 21,263 20,834
Taxes accrued 19,023 16,787
Interest accrued 14,324 14,859
Other current liabilities 16,092 13,298
----------------- -----------------
Total current liabilities 223,927 161,382
----------------- -----------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
Accumulated deferred income taxes - net (Note 8) 293,748 282,062
Unamortized investment tax credit 50,636 53,762
Accrued postretirement benefits (Note 11) 30,517 34,517
Accrued pension benefits (Note 10) 31,834 27,103
Miscellaneous 10,127 9,773
----------------- -----------------
Total deferred credits and other long-term liabilities 416,862 407,217
----------------- -----------------
COMMITMENTS AND CONTINGENCIES (Note 13)
TOTAL $ 2,108,816 $ 2,000,380
================= =================
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Cash Flows
For the Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
--------------- --------------- ---------------
(In Thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income $ 106,273 $ 103,823 $ 102,766
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 106,048 88,371 79,412
Deferred income taxes and investment tax credit adjustments - net (4,564) 2,650 (430)
Allowance for funds used during construction (11,370) (9,381) (5,476)
Premiums on redemptions of debt (2,506) (1,363) (1,122)
Change in certain assets and liabilities:
Accounts receivable (9,174) 4,869 (3,462)
Fuel, materials and supplies 6,362 (2,743) 10,633
Accounts payable 4,199 17,207 2,518
Taxes accrued 2,236 (4,590) (2,195)
Accrued pension benefits 4,731 4,563 4,711
Other - net 3,978 19,778 14,130
--------------- --------------- ---------------
Net cash provided by operating activities 206,213 223,184 201,485
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING:
Construction expenditures (166,874) (178,295) (145,765)
Other (20,307) (11,002) (26,115)
--------------- --------------- ---------------
Net cash used in investing activities (187,181) (189,297) (171,880)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING:
Issuance of long-term debt 110,000 200,000 96,500
Retirement of long-term debt (80,350) (85,928) (97,856)
Short-term debt - net 38,622 (63,600) 50,000
Dividends paid (84,471) (82,421) (79,253)
Other (683) (2,452) (1,228)
--------------- --------------- ---------------
Net cash used in financing activities (16,882) (34,401) (31,837)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,150 (514) (2,232)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,835 8,349 10,581
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,985 $ 7,835 $ 8,349
=============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $ 46,792 $ 40,747 $ 42,489
=============== =============== ===============
Income taxes $ 53,049 $ 59,129 $ 61,806
=============== =============== ===============
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Capitalization
December 31, 1995 and 1994
<CAPTION>
1995 1994
----------------- -----------------
(In Thousands)
<S> <C> <C>
COMMON SHAREHOLDER'S EQUITY:
Common stock, no par, authorized - 20,000,000 shares,
issued and outstanding - 17,206,630 shares (Note 5) $ 324,537 $ 324,537
Premium on 4% cumulative preferred stock 1,363 1,363
Retained earnings 421,229 399,862
----------------- -----------------
Total common shareholder's equity $ 747,129 $ 725,762
================= =================
CUMULATIVE PREFERRED STOCK (Note 5):
Nonredeemable - $100 par value, authorized
2,000,000 shares Call Price at
December 31, 1995
-----------------
4% Series, 100,000 shares $118.00 $ 10,000 $ 10,000
4.20% Series, 39,000 shares 103.00 3,900 3,900
4.60% Series, 30,000 shares 103.00 3,000 3,000
4.80% Series, 50,000 shares 101.00 5,000 5,000
6% Series, 100,000 shares 102.00 10,000 10,000
8.20% Series, 199,985 shares 101.00 19,998 19,998
----------------- -----------------
Total cumulative preferred stock $ 51,898 $ 51,898
================= =================
VARIABLE CLASS PREFERRED STOCK:
Par value undetermined, authorized
3,000,000 shares, none issued
LONG-TERM DEBT (Notes 2 and 6):
First mortgage bonds:
5 1/8% Series, due April 1996 $ 15,000 $ 15,200
5 5/8% Series, due May 1997 11,400 11,550
6.05% Series, due February 2004 (issued 2/94) 80,000 80,000
8% Series, due October 2006 58,800 58,800
7 3/8% Series, due August 2007 80,000 80,000
9 5/8% Series, due September 2012 (redeemed 12/95) - 40,000
10 5/8% Series, due December 2014 (redeemed 3/95) - 40,000
6.10% Series, due January 2016 (issued 4/93) 41,850 41,850
5.40% Series, due August 2017 (issued 10/93) 24,650 24,650
9 5/8% Series, due June 2019 50,000 50,000
7.45% Series, due August 2019 23,500 23,500
5.50% Series, due October 2023 (issued 10/93) 30,000 30,000
7.05% Series, due February 2024 (issued 2/94) 100,000 100,000
6 5/8% Series, due December 2024 (issued 2/95) 40,000 -
Unamortized discount - net (1,050) (1,079)
----------------- -----------------
Total first mortgage bonds 554,150 594,471
Variable rate, Series 1991, Note, due August 2021 40,000 40,000
Variable rate, Series 1995B, Note, due January 2023 (issued 10/95) 40,000 -
Variable rate, Series 1994A, Note, due December 2024 (issued 12/94) 20,000 20,000
Variable rate, Series 1995C, Note, due December 2029 (issued 12/95) 30,000 -
Current maturities and sinking fund requirements (15,150) (350)
----------------- -----------------
Total long-term debt $ 669,000 $ 654,121
================= =================
TOTAL CAPITALIZATION $ 1,468,027 $ 1,431,781
================= =================
See notes to financial statements.
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
Statements of Retained Earnings
For the Years Ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
--------------- --------------- ---------------
(In Thousands)
<S> <C> <C> <C>
RETAINED EARNINGS AT BEGINNING OF YEAR $ 399,862 $ 379,249 $ 356,513
NET INCOME 106,273 103,823 102,766
--------------- --------------- ---------------
Total 506,135 483,072 459,279
DEDUCT:
Cash dividends declared:
Cumulative preferred stock - at prescribed
rate of each series (See Statements of
Capitalization) 3,182 3,182 3,182
Common stock 81,724 80,028 76,848
--------------- --------------- ---------------
Total 84,906 83,210 80,030
--------------- --------------- ---------------
RETAINED EARNINGS AT END OF YEAR $ 421,229 $ 399,862 $ 379,249
=============== =============== ===============
See notes to financial statements.
</TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY
==================================
Notes to Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
- ----------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
All the outstanding common stock of Indianapolis Power & Light Company
(IPL) is owned by IPALCO Enterprises, Inc. At December 31, 1995 and 1994,
IPL had a receivable, which is due on demand, for advances made to IPALCO.
Nature of Operations: IPL is engaged principally in providing electric
and steam service to the Indianapolis metropolitan area.
Regulation: The retail utility operations of IPL are subject to the
jurisdiction of the Indiana Utility Regulatory Commission (IURC). IPL's
wholesale power transactions are subject to the jurisdiction of the Federal
Energy Regulatory Commission. These agencies regulate IPL's utility
business operations, tariffs, accounting, depreciation allowances,
services, security issues and the sale and acquisition of utility
properties. The financial statements of IPL are based on generally
accepted accounting principles including the provisions of Statement of
Financial Accounting Standards No. 71, "Accounting for the Effects of
Certain Types of Regulation," which gives recognition to the ratemaking and
accounting practices of these agencies.
Revenues: Revenues are recorded as billed to customers on a monthly
cycle billing basis. Revenue is not accrued for energy delivered but
unbilled at the end of the year. A fuel adjustment charge provision, which
is established after public hearing, is applicable to substantially all the
rate schedules of IPL, and permits the billing or crediting of estimated
fuel costs above or below the levels included in such rate schedules.
Actual fuel costs in excess of, or under, estimated fuel costs billed are
deferred or accrued, respectively.
Authorized Annual Operating Income: In an IURC order dated August 24,
1995, IPL's maximum authorized annual electric operating income, for
purposes of quarterly earnings tests, was established at $150 million
through June 29, 1996, or such date upon scrubber completion, if later, at
which time it increases to $163 million effective with the implementation
of new tariffs in mid-1996. This level will be maintained until changed by
an IURC order in a future IPL general electric rate proceeding.
Additionally, through the date of IPL's next general electric rate order,
IPL is required to file upward and downward adjustments in fuel cost
credits and charges on a quarterly basis.
Pursuant to an order of the IURC, IPL's authorized annual steam net
operating income is $6.2 million, plus any cumulative annual underearnings
occurring during the five-year period subsequent to the implementation of
the new rate tariffs.
Allowance For Funds Used During Construction: In accordance with the
prescribed uniform system of accounts, IPL capitalizes an allowance for the
net cost of funds (interest on borrowed funds and a reasonable rate on
equity funds) used for construction purposes during the period of
construction with a corresponding credit to income. IPL capitalized
amounts using pretax composite rates of 8.5%, 9.5% and 8.0% during 1995,
1994 and 1993, respectively.
Utility Plant and Depreciation: Utility plant is stated at original
cost as defined for regulatory purposes. The cost of additions to utility
plant and replacements of retirement units of property, as distinct from
renewals of minor items which are charged to maintenance, are charged to
plant accounts. Units of property replaced or abandoned in the ordinary
course of business are retired from the plant accounts at cost; such
amounts plus removal costs, less salvage, are charged to accumulated
depreciation. Depreciation is computed by the straight-line method based
on functional rates approved by the IURC and averaged 3.5% during 1995 and
1994 and 3.4% during 1993. Depreciation expense for 1995 and 1994 includes
adjustments to property held for future use of approximately $12.3 million
and $3.9 million, respectively. These adjustments reflect expired
regulatory permits and specific design and engineering costs of a future
generating station in Patriot, Indiana. IPL's most recent long-term load
and construction forecasts have deferred the need for base load capacity to
beyond the year 2000. The specific timing and design of this future
capacity cannot be determined at this time.
Regulatory Assets: Regulatory assets represent deferred costs that have
been, or that are expected to be, included as allowable costs for
ratemaking purposes. IPL has recorded regulatory assets relating to
certain costs as authorized by the IURC. As of December 31, 1995, all
nontax related regulatory assets have been included as allowable costs in
orders of the IURC authorizing IPL to increase customer tariffs except for
approximately $6 million in costs for demand side management (DSM) incurred
subsequent to January 1995. See Note 9. IPL is amortizing such regulatory
assets to expense over periods authorized by these orders. Specific
regulatory assets are disclosed in Note 4.
Through August 31, 1995, IPL had deferred as regulatory assets $40.9
million of certain post in-service date costs and carrying charges of its
investment in Petersburg Unit 4, including $8.2 million of allowance for
earnings on shareholders' investment previously recognized for ratemaking
purposes but not for financial reporting purposes. As authorized in the
1995 Electric Rate Settlement Agreement discussed in Note 9, IPL, effective
September 1, 1995, is amortizing to expense $32.7 million and $8.2 million
of such costs over a 31-year and 2-year period, respectively.
Additionally, IPL has recorded as deferred income the $8.2 million of
allowance on shareholders' investment which is being amortized to OTHER
INCOME AND DEDUCTIONS, "Allowance for equity funds used during
construction," over a 2-year period beginning September 1, 1995.
In accordance with regulatory treatment, IPL defers as regulatory assets
nonsinking fund debt redemption premiums, and amortizes such costs over the
life of the original debt, or, in the case of preferred stock redemption
premiums, over 20 years.
Derivatives: IPL has limited involvement with derivative financial
instruments, and these financial instruments are not used for trading
purposes. They are used to manage well-defined interest rate risks as more
fully discussed in Note 6.
Income Taxes: Deferred taxes are provided for all significant temporary
differences between book and taxable income. The effects of income taxes
are measured based on enacted laws and rates. Such differences include the
use of accelerated depreciation methods for tax purposes, the use of
different book and tax depreciable lives, rates and in-service dates and
the accelerated tax amortization of pollution control facilities. Deferred
tax assets and liabilities are recognized for the expected future tax
consequences of existing differences between the financial reporting and
tax reporting basis of assets and liabilities.
IPL has recorded as regulatory assets and net deferred tax liabilities,
income taxes payable and includable in allowable costs for ratemaking
purposes in future years.
Investment tax credits which reduced federal income taxes in the years
they arose have been deferred and are being amortized to income over the
useful lives of the properties in accordance with regulatory treatment.
Statements of Cash Flows - Cash Equivalents: IPL considers all highly
liquid investments purchased with original maturities of 90 days or less to
be cash equivalents.
Employee Benefit Plans: Substantially all employees of IPL are covered
by a defined benefit pension plan, a defined contribution plan and by a
postretirement benefit plan.
The defined benefit pension plan (the Plan) is noncontributory and is
funded through two trusts. Additionally, a select group of management
employees of IPL are covered under a funded supplemental retirement plan.
Collectively, these two plans are referred to as Plans. Benefits are based
on each individual employee's years of service and compensation. IPL's
funding policy is to contribute annually not less than the minimum required
by applicable law, nor more than the maximum amount which can be deducted
for federal income tax purposes.
The defined contribution plan is sponsored by IPL as the Employees'
Thrift Plan of Indianapolis Power & Light Company (Thrift Plan). Employees
elect to make contributions to the Thrift Plan based on a percentage of
their annual base compensation. IPL matches each employee's contributions
in amounts up to, but not exceeding, 4% of the employee's annual base
compensation.
The postretirement benefit plan is sponsored by IPL and provides certain
health care and life insurance benefits to employees who retire from active
service on or after obtaining age 55 and have rendered at least 10 years of
service. This plan is funded through a Voluntary Employee Beneficiary
Association (VEBA) Trust. IPL's policy is to fund the annual actuarially
determined postretirement benefit cost.
Long-Lived Assets: The Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121 (SFAS 121), "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," in March 1995. This statement is effective for years
beginning after December 15, 1995. IPL anticipates adopting this standard
on January 1, 1996, and does not expect that it will have a material impact
on its financial position or results of operations based on the current
regulatory structure in which it operates. As competitive factors
influence pricing in the utility industry, this opinion may change in the
future. The general requirements of SFAS 121 apply to property, plant and
equipment of IPL and require impairment to be considered whenever evidence
suggests that it is no longer probable that future cash flows are at least
equal to the carrying amount of the asset.
Stock-Based Compensation: In October 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 123
(SFAS 123), "Accounting for Stock-Based Compensation," which requires
adoption in 1996. The new standard defines a fair value method of
accounting for stock options and similar equity instruments. Under the
fair value method, compensation cost is measured at the grant date based on
the fair value of the award and is recognized over the service period,
which is usually the vesting period. Pursuant to the new standard,
companies are encouraged, but not required, to adopt the fair value method
of accounting for employee stock-based transactions. Companies are also
permitted to continue to account for such transactions under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," but would be required to disclose in a note to the financial
statements pro forma net income and, if presented, earnings per share as if
the company had applied the new method of accounting. The accounting
requirements of the new method are effective for all employee awards
granted after the beginning of the fiscal year of adoption. IPL has not
yet determined if it will elect to change to the fair value method,
however, it does not anticipate that the new standard will have a material
impact on net income or earnings per share. Adoption of the new standard
will have no effect on IPL's cash flows.
Use of Management Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires that
management make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. The reported amounts
of revenues and expenses during the reporting period may also be affected
by the estimates and assumptions management is required to make. Actual
results may differ from those estimates.
Reclassification: Certain amounts from prior years' financial
statements have been reclassified to conform to the current year
presentation.
2. UTILITY PLANT IN SERVICE
The original cost of utility plant in service at December 31, segregated
by functional classifications, follows:
1995 1994
- ---------------------------------------------------------------
(In Thousands)
Production $1,490,958 $1,434,041
Transmission 231,410 227,988
Distribution:
Electric 630,991 600,288
Steam 45,249 44,492
General 119,182 108,722
---------- ----------
Total utility plant in service $2,517,790 $2,415,531
========== ==========
Substantially all of IPL's property is subject to the lien of the indentures
securing IPL's First Mortgage Bonds.
3. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value amounts of financial instruments have been
determined by IPL, using available market information and appropriate
valuation methodologies. However, considerable judgment is required in
interpreting market data to develop the estimates of fair value.
Accordingly, the estimates presented herein are not necessarily indicative
of the amounts that IPL could realize in a current market exchange. The
use of different market assumptions and/or estimation methodologies may
have an effect on the estimated fair value amounts.
Cash, cash equivalents and notes payable: The carrying amount
approximates fair value due to the short maturity of these instruments.
Long-term debt, including current maturities and sinking fund
requirements: Interest rates that are currently available to IPL for
issuance of debt with similar terms and remaining maturities are used to
estimate fair value. The variable rate debt has been included at the face
amount for both carrying amount and fair value. The $3.6 million fair
value of the interest rate swap agreement has been estimated based on the
amount that IPL would have to pay to enter into an equivalent agreement at
December 31, 1995, with the swap counter party. The fair value of the debt
outstanding has been determined on the basis of the specific securities
issued and outstanding. Accordingly, the purpose of this disclosure is not
to approximate the value on the basis of how the debt might be refinanced.
At December 31, 1995 and 1994, the carrying amount of IPL's long-term debt,
including current maturities and sinking fund requirements, and the
approximate fair value are as follows:
1995 1994
---------------------------------------------------
(In Thousands)
Carrying amount $684,150 $654,471
Approximate fair value $718,229 $612,274
4. REGULATORY ASSETS
The amounts of regulatory assets at December 31, 1995 and 1994, are as
follows:
1995 1994
- -----------------------------------------------------------------------------
(In Thousands)
Postretirement Benefit Costs in Excess of Cash Payments
and Amounts Capitalized (Note 11) $ 30,016 $ 25,182
Unamortized Reacquisition Premium on Debt (Note 1) 22,600 20,047
Related to Deferred Taxes (Note 1) 34,178 21,054
Unamortized Petersburg Unit 4 Carrying Charges (Note 1) 39,143 40,595
Demand Side Management Costs (Note 9) 10,853 4,713
Other 5,921 4,274
-------- --------
Total Regulatory Assets $142,711 $115,865
======== ========
Amortization of nontax regulatory assets amounted to $6.1 million,
$1.0 million and $0.7 million for 1995, 1994 and 1993, respectively.
5. CAPITAL STOCK
Common Stock: There were no changes in IPL common stock during 1995,
1994 and 1993.
Restrictions on the payment of cash dividends or other distributions on
common stock and on the purchase or redemption of such shares are contained
in the indenture securing IPL's First Mortgage Bonds. All of the retained
earnings at December 31, 1995, were free of such restrictions.
Cumulative Preferred Stock: Preferred stock shareholders are entitled
to two votes per share, and if four full quarterly dividends are in
default on all shares of the preferred stock then outstanding, they are
entitled to elect the smallest number of IPL Directors to constitute a
majority.
6. LONG-TERM DEBT
The 6.10% Series due 2016, 5.40% Series due 2017, 5.50% Series due 2023,
6 5/8% Series due 2024 and the variable rate Series 1991, 1994A, 1995B and
1995C notes (all referred to as "notes") are issued to the city of
Petersburg, Indiana (City), by IPL to secure the loan of proceeds from
various tax-exempt instruments issued by the City. The Series 1991 note
provides for an interest rate which varies with the tax-exempt commercial
paper rate. The 1994A, 1995B and 1995C notes provide for an interest rate
which varies with the tax-exempt weekly rate. The IPL variable rate notes
can be converted into long-term fixed interest rate instruments by the
issuance of IPL's First Mortgage Bond. The notes are classified as long-
term liabilities because IPL maintains long-term credit facilities
supporting these agreements which were unused at December 31, 1995.
The average interest rates and the year-end interest rates for the
variable rate notes are as follows:
Average Interest Rate for Interest Rate at
the Year Ended December 31, December 31,
1995 1994 1995 1994
- ----------------------------------------------------------------------
Series 1991 3.91% 2.98% 3.72% 3.85%
Series 1994A 3.94% 5.50% 5.10% 5.50%
Series 1995B 5.14% - 5.21% -
Series 1995C 4.41% - 5.10% -
In conjunction with the issuance of the 1995B notes, IPL entered into an
interest rate swap agreement. Pursuant to the swap agreement, IPL will pay
interest at a fixed rate of 5.21% to a swap counter party and will receive
a variable rate of interest in return, which is identical to the variable
rate payment made on the 1995B notes. The result is to effectively
establish a fixed rate of interest on the 1995B notes of 5.21%.
Maturities and sinking fund requirements on long-term debt for the five
years subsequent to December 31, 1995, are as follows:
Net Sinking Fund
Maturities Requirements Total
- -------------------------------------------------------------------------
(In Thousands)
1996 $15,000 $ 150 $15,150
1997 11,250 - 11,250
1998 - 2000 - - -
IPL redeemed the $19.65 million, 6.9% Series and the $22.2 million, 6.6%
Series First Mortgage Bonds in June 1993; the $24.65 million, 5.8% Series
and the $30.0 million, 10 1/4% Series First Mortgage Bonds in November 1993
and the $33.2 million, 7.4% Series, the $19.75 million, 7 1/8% Series and
the $25.2 million, 7.65% Series First Mortgage Bonds in March 1994.
7. LINES OF CREDIT
IPL has lines of credit with banks of $100 million at December 31, 1995,
to provide loans for interim financing. These lines of credit, based on
separate formal and informal agreements, have expiration dates ranging from
January 31, 1996, to November 30, 1996, and require the payment of
commitment fees. At December 31, 1995, these credit lines were unused.
Lines of credit supporting commercial paper were $56 million at December
31, 1995. IPL has an uncommitted line of credit with a bank in the amount
of $25 million. At December 31, 1995, $16 million was unused. The
weighted average interest rate on notes payable and commercial paper
outstanding was 5.80% and 6.17% at December 31, 1995 and 1994,
respectively.
8. INCOME TAXES
Federal and state income taxes charged to income are as follows:
1995 1994 1993
- ---------------------------------------------------------------------------
(In Thousands)
Operating Expenses:
Current income taxes:
Federal $50,869 $45,919 $52,321
State 7,670 6,919 7,761
------- ------- -------
Total current taxes 58,539 52,838 60,082
------- ------- -------
Total deferred taxes (1,439) 5,973 3,058
------- ------- -------
Net amortization of investment credit (3,125) (3,268) (3,268)
------- ------- -------
Total charge to operating expenses 53,975 55,543 59,872
Net credit to other income and deductions (407) (823) (599)
------- ------- -------
Total federal and state income tax provisions $53,568 $54,720 $59,273
======= ======= =======
The provision for federal income taxes (including net investment tax
credit adjustments) is less than the amount computed by applying the
statutory tax rate to pretax income. The reasons for the difference,
stated as a percentage of pretax income, are as follows:
1995 1994 1993
- -----------------------------------------------------------------
Federal statutory tax rate 35.0% 35.0% 35.0%
Effect of state income taxes (1.8) (1.8) (1.8)
Amortization of investment tax credits (2.0) (2.1) (2.0)
Removal cost adjustments (1.7) (0.8) 0.0
Other - net (1.0) (0.8) 0.1
---- ---- ----
Effective tax rate 28.5% 29.5% 31.3%
==== ==== ====
The significant items comprising IPL's net deferred tax liability
recognized in the balance sheets as of December 31, 1995 and 1994, are as
follows:
1995 1994
- ------------------------------------------------------------------
(In Thousands)
Deferred tax liabilities:
Relating to utility property $366,801 $349,461
Early retirement of bonds 8,028 7,697
Other 6,638 4,414
-------- --------
Total deferred tax liabilities 381,467 361,572
-------- --------
Deferred tax assets:
Unbilled revenue 11,157 9,538
Pension 12,059 10,865
Investment tax credit 30,936 32,846
Other 33,567 26,261
-------- --------
Total deferred tax assets 87,719 79,510
-------- --------
Net deferred tax liability $293,748 $282,062
======== ========
9. RATE MATTERS
Electric Rate Settlement Agreement: On August 24, 1995, the IURC issued
an order approving without amendment a Stipulation and Settlement Agreement
(Settlement Agreement) resolving all issues in IPL's pending electric
general rate proceeding. The Settlement Agreement was entered into by IPL
and all parties to the proceeding, including the Office of Utility Consumer
Counselor, the IPL Industrial Group, the Citizens Action Coalition of
Indiana, Inc. and the city of Indianapolis.
The Settlement Agreement authorized IPL to increase its basic rates and
charges for retail electric service in two steps, as follows:
Step 1 - $35,000,000 on September 1, 1995
Step 2 - $25,000,000 on or after June 30, 1996, conditioned only
upon the filing of a "Certificate of In-service Date" showing
completion and operation of IPL's Petersburg Units 1 and 2 sulfur
dioxide removal facilities (scrubbers).
IPL anticipates the in-service date of these scrubbers to occur on or
before June 30, 1996.
The Settlement Agreement provides for the inclusion in rate base of
$42.8 million of the scrubber construction costs during Step 1 and an
additional $160.9 million during Step 2. IPL also is authorized to begin
amortization of its regulatory assets including amounts deferred for
electric service postretirement benefits expenses and relating to its
Petersburg Unit 4 carrying charges. Additionally, IPL's existing
depreciation rates were reapproved.
Under terms of the agreement, IPL will not seek another general increase
in its basic rates and charges until after July 1, 1997, except in the
event of an emergency. IPL also has agreed not to file a request to build
any large, base-load generating capacity before January 1, 2000. This
provision can be waived in extreme circumstances. In addition, the parties
agreed to, and subsequently resolved, pending litigation involving IPL's
Clean Air Act compliance plan.
Environmental Compliance Plan: On August 18, 1993, IPL obtained an
Order from the IURC approving its Environmental Compliance Plan, together
with the costs and expenses associated therewith, which provides for the
installation of sulfur dioxide and nitrogen oxide emissions abatement
equipment and the installation of continuous emission monitoring systems to
meet the requirements of both Phase I and Phase II of the Federal Clean Air
Act Amendments of 1990 (the Act).
Steam Rate Order: By an order dated January 13, 1993, the IURC
authorized IPL to increase its steam system rates and charges over a six-
year period. Accordingly, IPL will implement new steam tariffs designed to
produce estimated additional annual steam operating revenues as follows:
Additional Cumulative
Annual Annual
Year Revenues Revenues
---- ------------ ------------
January 13, 1996 $ 1,625,000 $ 7,160,000
January 13, 1997 2,384,000 9,544,000
January 13, 1998 370,000 9,914,000
Demand Side Management Program: In compliance with an order dated
September 8, 1993, IPL is deferring certain approved DSM costs and carrying
charges. In the 1995 Electric Rate Settlement Agreement approved by the
IURC on August 24, 1995, IPL was authorized to amortize $5.3 million of
such costs deferred prior to February 1995, over a four-year period
beginning September 1, 1995.
10. EMPLOYEE PENSION BENEFIT PLAN
Net pension cost is comprised of the following components:
1995 1994 1993
- ------------------------------------------------------------------------------
(In Thousands)
Service cost--benefits earned during the period $ 6,375 $ 7,832 $ 6,355
Interest cost on projected benefit obligation 15,348 15,358 14,192
Actual return on plan assets (29,529) 10,366 (40,045)
Net amortization and deferral 13,499 (27,297) 25,689
------- ------- -------
Net periodic pension cost 5,693 6,259 6,191
Less amount allocated to related parties 98 79 87
------- ------- -------
IPL net periodic pension cost $ 5,595 $ 6,180 $ 6,104
======= ======= =======
The accounting distribution of the net periodic pension costs for
1995, 1994 and 1993, follows:
1995 1994 1993
- ---------------------------------------------------------------------
(In Thousands)
Expense $ 4,396 $ 4,815 $ 4,764
Capitalized 1,199 1,365 1,329
------- ------- -------
Net periodic pension cost $ 5,595 $ 6,180 $ 6,093
======= ======= =======
A summary of the Plans' funding status at its October 31, 1995,
evaluation date and the amount recognized in the balance sheets at December
31, 1995 and 1994, follows:
1995 1994
- -------------------------------------------------------------------------------
(In Thousands)
Actuarial present value of benefit obligations:
Vested benefit obligation $(148,124) $(123,306)
Nonvested benefit obligation (27,883) (26,394)
--------- ---------
Accumulated benefit obligation $(176,007) $(149,700)
========= =========
Projected benefit obligation $(223,137) $(201,345)
Plan assets at fair value 220,978 199,522
--------- ---------
Funded status--plan assets less than projected
benefit obligation (2,159) (1,823)
Unrecognized net gain from past experience different
from that assumed (30,174) (31,058)
Unrecognized past service costs 14,495 21,188
Unrecognized net asset at January 1, 1987 being
amortized over an original life of 18.9 years (13,996) (15,410)
--------- ---------
Net accrued pension benefits included in other long-term
liabilities at December 31 $ (31,834) $ (27,103)
========= =========
Approximately 30% of the Plans' assets were in equity securities, with
the remainder in fixed income securities.
Assumptions used in determining the information above were:
1995 1994 1993
- -----------------------------------------------------------------------
Discount rate 7.50% 8.00% 7.00%
Rate of increase in future compensation levels 5.10% 6.10% 6.10%
Expected long-term rate of return on assets 8.00% 8.00% 8.00%
11. EMPLOYEE POSTRETIREMENT BENEFIT PLAN
<TABLE>
Net postretirement benefit cost is comprised of the following
components:
<CAPTION>
1995 1994 1993
- ------------------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Service cost -- benefits earned during the period $ 3,855 $ 5,051 $ 4,760
Interest cost on accumulated postretirement benefit obligation 10,796 11,052 10,792
Actual return on plan assets (319) (435) (297)
Net amortization and deferral 4,661 5,740 5,732
------- ------- -------
Net periodic postretirement benefit cost $18,993 $21,408 $20,987
======= ======= =======
</TABLE>
The accounting distribution of the net postretirement benefit costs
for 1995, 1994 and 1993, follows:
1995 1994 1993
- ------------------------------------------------------------------------------
(In Thousands)
Expense $ 8,124 $ 4,655 $ 4,368
Capitalized 3,891 4,464 3,726
Regulatory asset deferral 6,978 12,289 12,893
-------- -------- --------
Net periodic postretirement benefit cost $ 18,993 $ 21,408 $ 20,987
======== ======== ========
During 1995, IPL expensed $2.1 million of postretirement regulatory
asset amortization.
<TABLE>
A summary of the retiree health care and life insurance plan's funding
status, and the amount recognized in the balance sheets at December 31,
1995 and 1994, follows:
<CAPTION>
1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of accumulated postretirement (In Thousands)
benefit obligation:
Retirees $ (60,442) $ (55,462)
Fully eligible active plan participants (20,645) (19,531)
Other active plan participants (61,055) (58,573)
--------- ---------
Total (142,142) (133,566)
Plan assets at fair value 29,800 10,570
--------- ---------
Funded status--accumulated postretirement benefit obligation in excess
of plan assets (112,342) (122,996)
Unrecognized net gain from past experience different from that assumed (21,761) (21,606)
Unrecognized net obligation at January 1, 1993 being amortized over
an original life of 20 years 103,586 110,085
--------- ---------
Net accrued postretirement benefit cost included in deferred liabilities at
December 31 $ (30,517) $ (34,517)
========= =========
</TABLE>
IPL has expensed its nonconstruction related postretirement benefits
costs associated with its regulated steam business and, subsequent to
August 1995, with its regulated electric business. IPL's electric business
postretirement benefits costs incurred prior to September 1, 1995, net of
amounts paid and capitalized for construction, were deferred as a
regulatory asset on the balance sheets. The 1995 Settlement Agreement
approved the amortization to operating expense of this regulatory asset
over five years beginning September 1, 1995. The annual amortization is
$6.4 million. The 1995 Settlement Agreement also approved IPL's plan to
fund annual postretirement benefits costs to an irrevocable Voluntary
Employee Beneficiary Association (VEBA) Trust. Annual funding is
discretionary and is based on the projected cost over time of benefits to
be provided to covered persons consistent with acceptable actuarial
methods. The VEBA Trust provides for full funding of IPL's accumulated
postretirement benefit obligation in the event of certain change of control
transactions. During 1995 IPL funded $18.5 million of these costs.
Plan assets consist of the cash surrender value of life insurance
policies on certain active and retired employees.
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefit obligation is 9.5% for 1996, gradually
declining to 4.5% in 2003. A 1% increase in the assumed health care cost
trend rate for each year would increase the accumulated postretirement
benefit obligation, as of December 31, 1995, by approximately $20.3 million
and the combined service cost and interest cost for 1995 by approximately
$2.7 million.
Assumptions used in determining the information above were:
1995 1994 1993
- --------------------------------------------------------------------------
Discount rate 7.25% 8.00% 7.00%
Rate of increase in future compensation levels 5.10% 6.10% 6.10%
Expected long-term rate of return on assets 8.00% 8.00% 8.00%
12. OTHER EMPLOYEE BENEFIT PLANS
IPL's contributions to the Thrift Plan, net of amounts allocated to
related parties were $3.2 million, $3.3 million and $3.1 million in 1995,
1994 and 1993, respectively.
13. COMMITMENTS AND CONTINGENCIES
In 1996, IPL anticipates the cost of its construction program to be
approximately $104 million.
IPL will comply with the provisions of the Federal Clean Air Act
Amendments of 1990 (the Act) through the installation of SO2 scrubbers and
NOx facilities. The cost of complying with the Act in 1996, including
AFUDC, is estimated to be approximately $35 million. During 1995, 1994 and
1993, expenditures for compliance with the Act were $101.9 million, $59.4
million and $13.7 million, respectively.
IPL has a five-year firm power purchase agreement with Indiana Michigan
Power Company (IMP) for 100 megawatts (MW) of capacity which was effective
April 1992, with the purchase of an additional 100 MW (for a total of 200
MW) which began in April 1993. IPL is committed to providing monthly
capacity payments of $1.2 million through March 31, 1997. Capacity
payments during 1995, 1994 and 1993 under this agreement totaled $14.4
million, $14.4 million and $12.6 million, respectively.
IPL is involved in litigation arising in the normal course of business.
While the results of such litigation cannot be predicted with certainty,
management, based upon advice of counsel, believes that the final outcome
will not have a material adverse effect on the financial position and
results of operations. With respect to environmental issues, IPL has
ongoing discussions with various regulatory authorities and continues to
believe that IPL is in compliance with its various permits.
14. QUARTERLY RESULTS (UNAUDITED)
Operating results for the years ended December 31, 1995 and 1994 by
quarter, are as follows (in thousands):
1995
-------------------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
Operating revenues $175,518 $159,652 $199,873 $174,166
Operating income 38,278 30,598 50,706 28,530
Net income 27,612 20,111 40,598 17,952
1994
-------------------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
Operating revenues $181,178 $161,137 $183,666 $160,095
Operating income 41,520 29,440 42,832 29,518
Net income 31,563 19,202 32,640 20,418
The quarterly figures reflect seasonal and weather-related fluctuations
which are normal to IPL's operations. Milder weather was experienced in
the first quarter of 1995 while warmer weather was experienced in the third
quarter of 1995. In addition, during the fourth quarter of 1995 and the
third quarter of 1994, IPL expensed approximately $12.3 million and $3.1
million, respectively, of property held for future use. See Note 9
regarding rate increases.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors of the registrant, set
forth in the Information Statement of Indianapolis Power & Light
Company dated March 8, 1996 (the registrant's Information
Statement), under "Directors and Nominees" at pages 2-5 is
incorporated herein by reference. Information relating to the
registrant's executive officers is set forth at page I-8 of this
Form 10-K under "Executive Officers of the Registrant at February
27, 1996."
Item 11. EXECUTIVE COMPENSATION
Information relating to executive compensation, set forth in the
registrant's Information Statement under "Compensation of
Executive Officers" at pages 6-8, "Compensation of Directors" at
page 9, "Compensation Committee Interlocks and Insider
Participation" at page 12, "Pensions Plans" at page 14, and
"Employment Contracts and Termination of Employment and Change in
Control Arrangements" at page 15, is incorporated herein by
reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information relating to ownership of the registrant's common
stock by persons known by the registrant to be the beneficial
owners of more than 5% of the outstanding shares of common stock
and by management, set forth in the registrant's Information
Statement under "Voting Securities and Beneficial Owners" at page
2 is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain relationships and related
transactions, set forth in the registrant's Information Statement
under "Directors and Nominees - Certain Business Relationships"
at page 6, is incorporated herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The Financial Statements and Supplemental Schedule under this
Item 14 (a) 1 and 2 filed in this Form 10-K are those of
Indianapolis Power & Light Company.
1. Financial Statements
Included in Part II of this report:
Independent Auditors' Report
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993
Statements of Income for the Years Ended
December 31, 1995, 1994 and 1993
Balance Sheets, December 31, 1995 and 1994
Statements of Capitalization
December 31, 1995 and 1994
Statements of Retained Earnings for the Years
Ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
2. Financial Statement Schedules
Included in Part IV of this report:
For each of the years ended December 31, 1995, 1994
and 1993
Schedule II - Valuation and Qualifying Accounts
Exhibit 12.1 - Ratio of Earnings to Fixed Charges
3. Exhibits
The Exhibit Index beginning on page IV-8 of this
Annual Report on Form 10-K lists the exhibits that are
filed as part of this report.
(b) Reports on Form 8-K
None
INDEPENDENT AUDITORS' REPORT
============================
To the Board of Directors of Indianapolis Power & Light Company:
We have audited the financial statements of Indianapolis Power & Light
Company as of December 31, 1995 and 1994, and for each of the three years
in the period ended December 31, 1995, and have issued our report thereon
dated January 26, 1996; such financial statements and report are included
elsewhere in this Form 10-K. Our audits also included the financial statement
schedules of Indianapolis Power & Light Company, listed in Item 14(a)2. These
financial statement schedules are the responsibility of the Corporation's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
Deloitte & Touche LLP
Indianapolis, Indiana
January 26, 1996
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY SCHEDULE II
Valuation and Qualifying Accounts
For the Years Ended December 31, 1995, 1994 and 1993
(In Thousands)
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS DEDUCTIONS
--------------------- FOR PURPOSES
CHARGED TO CHARGED FOR WHICH
BALANCE AT COSTS AND TO OTHER RESERVES BALANCE AT
DESCRIPTION JANUARY 1 EXPENSES ACCOUNTS WERE CREATED DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995:
RESERVES DEDUCTED IN BALANCE SHEET
FROM ASSETS TO WHICH THEY APPLY:
Reserve for depreciation of utility property $ 916,943 $ 99,075 $ 0 $ 31,108 $ 984,910
Reserve for depreciation of nonutility property $ 37 $ 11 $ 0 $ 0 $ 48
Reserve for receivables $ 743 $ 1,939 $ 0 $ 1,896 $ 786
YEAR ENDED DECEMBER 31, 1994:
RESERVES DEDUCTED IN BALANCE SHEET
FROM ASSETS TO WHICH THEY APPLY:
Reserve for depreciation of utility property $ 876,054 $ 87,028 $ 0 $ 46,139 $ 916,943
Reserve for depreciation of nonutility property $ 27 $ 10 $ 0 $ 0 $ 37
Reserve for receivables $ 626 $ 1,824 $ 0 $ 1,707 $ 743
YEAR ENDED DECEMBER 31, 1993:
RESERVES DEDUCTED IN BALANCE SHEET
FROM ASSETS TO WHICH THEY APPLY:
Reserve for depreciation of utility property $ 818,319 $ 78,372 $ 0 $ 20,637 $ 876,054
Reserve for depreciation of nonutility property $ 19 $ 8 $ 0 $ 0 $ 27
Reserve for receivables $ 647 $ 1,845 $ 0 $ 1,866 $ 626
</TABLE>
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY EXHIBIT 12.1
Ratio of Earnings to Fixed Charges
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1995 1994 1993
--------- --------- ---------
(Thousands of Dollars)
<S> <C> <C> <C>
Earnings, as defined:
Net income $106,273 $103,823 $102,766
Income taxes 53,568 54,720 59,273
Fixed charges, as below 51,778 48,302 44,655
--------- --------- ---------
Total earnings, as defined $211,619 $206,845 $206,694
========= ========= =========
Fixed charges, as defined:
Interest charges $ 51,596 $ 48,164 $ 44,491
Rental interest factor 182 138 164
--------- --------- ---------
Total fixed charges, as defined $ 51,778 $ 48,302 $ 44,655
========= ========= =========
Ratio of earnings to fixed charges 4.09 4.28 4.63
========= ========= =========
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ John R. Hodowal
---------------------------------------
(John R. Hodowal, Chairman of the Board
and Chief Executive Officer)
Date: February 27, 1996
-----------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
(i) Principal Executive Officer:
/s/ John R. Hodowal Chairman of the Board and February 27, 1996
---------------------- Chief Executive Officer
(John R. Hodowal)
(ii) Principal Financial Officer:
/s/ John R. Brehm Senior Vice President - February 27, 1996
--------------------- Finance and Information
(John R. Brehm) Services
(iii) Principal Accounting Officer:
/s/ Stephen J. Plunkett Controller February 27, 1996
-----------------------
(Stephen J. Plunkett)
(iv) A majority of the Board of Directors of Indianapolis Power & Light
Company:
/s/ Joseph D. Barnette, Jr. Director February 27, 1996
---------------------------
(Joseph D. Barnette, Jr.)
/s/ Robert A. Borns Director February 27, 1996
---------------------------
(Robert A. Borns)
/s/ Mitchell E. Daniels, Jr. Director February 27, 1996
----------------------------
(Mitchell E. Daniels, Jr.)
/s/ Rexford C. Early Director February 27, 1996
---------------------------
(Rexford C. Early)
/s/ Otto N. Frenzel III Director February 27, 1996
---------------------------
(Otto N. Frenzel III)
/s/ Max L. Gibson Director February 27, 1996
---------------------------
(Max L. Gibson)
/s/ Edwin J. Goss Director February 27, 1996
---------------------------
(Edwin J. Goss)
/s/ Dr. Earl B. Herr, Jr. Director February 27, 1996
---------------------------
(Dr. Earl B. Herr, Jr.)
/s/ John R. Hodowal Director February 27, 1996
---------------------------
(John R. Hodowal)
/s/ Ramon L. Humke Director February 27, 1996
---------------------------
(Ramon L. Humke)
/s/ Sam H. Jones Director February 27, 1996
---------------------------
(Sam H. Jones)
/s/ Andre B. Lacy Director February 27, 1996
---------------------------
(Andre B. Lacy)
/s/ L. Ben Lytle Director February 27, 1996
---------------------------
(L. Ben Lytle)
/s/ Thomas M. Miller Director February 27, 1996
---------------------------
(Thomas M. Miller)
/s/ Sallie W. Rowland Director February 27, 1996
---------------------------
(Sallie W. Rowland)
/s/ Thomas H. Sams Director February 27, 1996
---------------------------
(Thomas H. Sams)
EXHIBIT INDEX
-------------
Copies of documents listed below which are identified with an asterisk
(*) are incorporated herein by reference and made a part hereof. The
management contracts or compensatory plans are marked with a double
asterisk (**) after the description of the contract or plan.
Exhibit
No. Description
- ------- -------------------------------------------------------------------
3.1* Articles of Incorporation of Indianapolis Power & Light Company,
as amended. (Form 10-Q for quarter ended March 31, 1991.)
3.2* Bylaws of Indianapolis Power & Light Company dated January 25,
1994. (Form 10-Q for the quarter ended March 31, 1994.)
4.1* Mortgage and Deed of Trust, dated as of May 1, 1940, between
Indianapolis Power & Light Company and American National Bank and
Trust Company of Chicago, Trustee, as supplemented and modified
by 30 Supplemental Indentures.
Exhibits D in File No. 2-4396; B-1 in File No. 2-6210; 7-C
File No. 2-7944; 7-D in File No. 2-72944; 7-E in File No. 2-8106;
7-F in File No. 2-8749; 7-G in File No. 2-8749; 4-Q in File No. 2-
10052; 2-I in File No. 2-12488; 2-J in File No. 2-13903; 2-K in
File No. 2-22553; 2-L in File No. 2-24581; 2-M in File No. 2-
26156; 4-D in File No. 2-26884; 2-D in File No. 2-38332; Exhibit
A to Form 8-K for October 1970; Exhibit 2-F in File No. 2-47162;
2-F in File No. 2-50260; 2-G in File No. 2-50260; 2-F in File
No. 2-53541; 2E in File No. 2-55154; 2E in File no. 2-60819; 2F
in File No. 2-60819; 2-G in File No. 2-60819; Exhibit A to Form
10-Q for the quarter ended 9-30-78 File No. 1-3132; 13-4 in File
No. 2-73213; Exhibit 4 in File No. 2-93092. Twenty-eighth,
Twenty-ninth and Thirtieth Supplemental Indentures. (Form 10-K
dated for year ended 12-31-85.)
4.2* Thirty-Second Supplemental Indenture dated as of June 1, 1989.
(Form 10-K for year ended 12-31-89.)
4.3* Thirty-Third Supplemental Indenture dated as of August 1, 1989.
(Form 10-K for year ended 12-31-89.)
4.4* Thirty-Fourth Supplemental Indenture dated as of October 15,
1991. (Form 10-K for year ended 12-31-91.)
4.5* Thirty-Fifth Supplemental Indenture dated as of August 1, 1992.
(Form 10-K for year ended 12-31-92.)
4.6* Thirty-Sixth Supplemental Indenture dated as of April 1, 1993.
(Form 10-Q for quarter ended 9-30-93.)
4.7* Thirty-Seventh Supplemental Indenture dated as of October 1,
1993. (Form 10-Q for quarter ended 9-30-93.)
4.8* Thirty-Eighth Supplemental Indenture dated as of October 1, 1993.
(Form 10-Q for quarter ended 9-30-93.)
4.9* Thirty-Ninth Supplemental Indenture dated as of February 1, 1994.
(Form 8-K, dated 1-25-94.)
4.10* Fortieth Supplemental Indenture dated as of February 1, 1994.
(Form 8-K, dated 1-25-94.)
4.11* Forty-First Supplemental Indenture dated as of January 15, 1995.
(Exhibit 4.12 to the Form 10-K dated 12-31-94.)
4.12 Forty-Second Supplemental Indenture dated as of October 1, 1995.
10.1* Coal Supply Agreement between Indianapolis Power & Light Company
and Peabody Coal Company effective as of January 1, 1992 and
dated April 7, 1993. Confidential portions of this Contract have
been omitted and filed separately with the SEC pursuant to 17 CFR
240.24b-2. (Form 10-Q for quarter ended 3-31-93.)
10.2* Amendment to Coal Supply Agreement dated July 5, 1985, between
Indianapolis Power & Light Company and Black Beauty Coal Company,
Inc. (Form 10-K for year ended 12-31-86.)
10.3* Amendment to Coal Supply Agreement dated February 27, 1987,
between Indianapolis Power & Light Company and Black Beauty Coal
Company, Inc. (Form 10-K for year ended 12-31-87.)
10.4 Transportation Contract dated September 28, 1987, between
Indianapolis Power & Light Company and Consolidated Rail
Corporation, together with Amendment Number 1, 2, 3 and 4.
10.5* Coal Supply Agreement between Indianapolis Power & Light Company
and Triad Mining of Indiana, Inc. and Marine Coal Sales Company
dated December 7, 1994. Confidential portions of this Contract
have been omitted and filed separately with the SEC pursuant to
17 CFR 240.24b-2. (Exhibit 10.2 to the Form 10-Q dated 3-31-95.)
10.6 Interconnection Agreement, dated December 30, 1960, between IPL
and Indiana & Michigan Electric Company (nka Indiana Michigan Power
Company) as modified through Modification 17 and Addendum IV.
10.7 Third Amendment to the Interconnection Agreement dated May 1,
1992, among Indianapolis Power & Light Company, PSI Energy, Inc.
and CINERGY Services, Inc. (The Third Amendment amends and
restates the complete agreement between the parties.)
10.8* Facilities Agreement effective in 1968 among Indianapolis Power &
Light Company, Public Service Company of Indiana, Inc. and
Indiana & Michigan Electric Company. (Exhibit 5-G in File No. 2-
28756.)
10.9 Facilities Agreement dated August 16, 1977, between Indianapolis
Power & Light Company and Public Service Company of Indiana,
Inc., together with Amendment Number 1 and 2.
10.10* East Central Area Reliability Agreement dated August 1, 1967,
between Indianapolis Power & Light Company and 23 other electric
utility companies as supplemented. (Exhibits 5-I in File No. 2-
38332 and 5-J in File No. 2-38332.)
10.11 Interconnection Agreement dated December 2, 1969, between
Indianapolis Power & Light Company and Southern Indiana Gas and
Electric Company as modified through Modification Number 9.
10.12 Interconnection Agreement dated December 1, 1981, between
Indianapolis Power & Light Company and Hoosier Energy Rural
Electric Cooperative, Inc., as modified through Modification 4.
10.13 Interconnection Agreement, dated October 7, 1987, between
Indianapolis Power & Light Company and Wabash Valley Power
Association, as modified through Modification 1.
10.14 Interchange Agreement between Indianapolis Power & Light Company
and ENRON Power Marketing, Inc. dated August 1, 1995.
10.15 Interconnection Agreement between Indianapolis Power & Light
Company and Indiana Municipal Power Agency as modified through
Modification 1.
10.16* Employment Agreement between Indianapolis Power & Light Company
and Ramon L. Humke dated February 1, 1990. (Exhibit 10.31 to the
Form 10-K dated 12-31-94.) **
10.17* Employment Agreement by and among IPALCO Enterprises, Inc.,
Indianapolis Power & Light Company and John R. Hodowal dated July
29, 1986. (Exhibit 10.32 to the Form 10-K dated 12-31-94.) **
10.18 Directors' and Officers' Liability Insurance Policy No.
DO392B1A95 effective June 1, 1995 to June 1, 1996. **
10.19* Unfunded Deferred Compensation Plan for Indianapolis Power &
Light Company Directors dated February 22, 1983, as amended.
(Exhibit 10.34 to the Form 10-K dated 12-31-94.) **
10.20* Unfunded Deferred Compensation Plan for Indianapolis Power &
Light Company Officers effective January 1, 1994. (Exhibit 10.35
to the Form 10-K dated 12-31-94.) **
10.21 Indianapolis Power & Light Company Supplemental Retirement Plan
and Trust Agreement For a Select Group of Management Employees
(As Amended and Restated Effective March 1, 1996.) **
10.22 1995 Management Incentive Program. **
10.23 Form of Termination Benefits Agreement together with schedule of
parties to, and dates of, the Termination Benefits Agreements. **
12.1 Ratio of Earnings to Fixed Charges.
21.1 Subsidiaries of the Registrant.
23.1 Independent Auditors' Consent.
27.1 Financial Data Schedule.
99.1* Agreement, dated as of October 27, 1993, by and among IPALCO
Enterprises, Inc., Indianapolis Power & Light Company, PSI
Resources, Inc., PSI Energy, Inc., The Cincinnati Gas & Electric
Company, CINergy Corp., James E. Rogers, John R. Hodowal and
Ramon L. Humke. (Form 10-Q for quarterly period ended 9-30-93.)
99.2* Amendment to Agreement dated October 27, 1994, by and among
IPALCO Enterprises, Inc., Indianapolis Power & Light Company, PSI
Resources, Inc., PSI Energy, Inc., The Cincinnati Gas & Electric
Company, CINergy Corp., James E. Rogers, John R. Hodowal and
Ramon L. Humke. (Exhibit 99.2 to the Form 10-K dated 12-31-94.)
EXHIBIT 4.12
[CONFORMED COPY]
INDIANAPOLIS POWER & LIGHT COMPANY
TO
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
Trustee
Forty-Second Supplemental Indenture
Dated as of October 1, 1995
ESTABLISHING FIRST MORTGAGE BONDS,
5.21% Series, Due 2023
<PAGE>
TABLE OF CONTENTS*
of
FORTY-SECOND SUPPLEMENTAL INDENTURE
of
INDIANAPOLIS POWER & LIGHT COMPANY
Page
Parties 1
Recitals 1
Section 1 Granting clauses 4
Part I Electric Distributing Systems 5
Part II Steam and Hot Water Distributing Systems 5
Part III Indeterminate Permits and Franchises 6
Part IV Other Property 6
General and after-acquired title 6
Section 2 Designation of Fortieth series of bonds and kind and
denominations thereof 7
Designation of Company or American National Bank and Trust
Company of Chicago as paying agent 8
Purpose of bonds 8
Redemption of bonds 8
Exchange of bonds 9
Transfer of bonds 9
Series limited to $40,000,000 9
Section 3 Form of fully registered bond 10
Form of Trustee's certificate on bonds 12
Section 4 Temporary bonds 14
Section 5 Payments made hereunder; discharge of obligation; 14
credits
Section 6 Annual Payments for Maintenance and Improvement Fund 15
Section 7 Compliance with Section 47 of Original Mortgage with
respect to dividend restrictions 15
Section 8 Acceptance of trusts by Trustee and conditions of
acceptance 15
*Table of Contents is not part of the Forty-Second Supplemental Indenture
and should not be considered such. It is included herein only for purposes of
convenient reference.
<PAGE>
Page
Section 9 Successors and assigns 16
Section 10 Limitation of rights hereunder 16
Section 11 Compliance with terms, provisions and conditions of
Mortgage 16
Section 12 Execution in counterparts 16
Testimonium 17
Signatures and Seals 17
Acknowledgements 18
THIS FORTY-SECOND SUPPLEMENTAL INDENTURE, dated as of October 1,
1995, between Indianapolis Power & Light Company, a corporation of the
State of Indiana, hereinafter sometimes called the ''Company,'' party
of the first part, and American National Bank and Trust Company of
Chicago, a national banking association, as Trustee, hereinafter
sometimes called the ''Trustee,'' party of the second part;
Whereas, the Company by a Mortgage and Deed of Trust (hereinafter
sometimes called the ''Original Mortgage'' when referred to as existing
prior to any supplement thereto or modification thereof, and the
''Mortgage'' when referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American National Bank
and Trust Company of Chicago, as Trustee, to secure the payment of the
bonds issued from time to time under the Mortgage for the purposes of
and subject to the limitations specified in the Mortgage, and to secure
the performance of the covenants therein contained, conveyed to the
Trustee thereunder upon certain trusts, terms and conditions, and with
and subject to certain provisos and covenants therein contained, all
and singular the property, rights and franchises which the Company then
owned or should thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any indenture
supplemental thereto, to which Mortgage reference is hereby made for
greater certainty; and
Whereas, the Original Mortgage has been supplemented and modified by
supplemental indentures dated as of May 1, 1942, as of February 1,
1948, as of April 1, 1949, as of October 1, 1949, as of February 1,
1951, as of March 1, 1953, as of June 1, 1956, as of March 1, 1958, as
of October 1, 1960, as of August 1, 1964, as of April 1, 1966, as of
May 1, 1967, as of May 1, 1968, as of October 1, 1970, as of March 1,
1972, as of March 15, 1973, as of February 15, 1974, as of August 15,
1974, as of September 15, 1975, as of June 1, 1976, as of July 1, 1976,
as of August 1, 1977, as of September 1, 1978, as of August 1, 1981, as
of November 1, 1983, as of November 1, 1984, as of December 1, 1984, as
of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989, as of October 15, 1991, as of August 1, 1992, as of
April 1, 1993, as of October 1, 1993, as of February 1, 1994 and as of
January 15, 1995.
Whereas, Section 8 of the Original Mortgage provides, among other
things, that the form of each series of bonds (other than the initial
issue of bonds) issued thereunder shall be established by an indenture
supplemental thereto authorized by resolution of the Board of Directors
of the Company, and that the form of each series, as established by the
Board of Directors, shall specify the descriptive title of the bonds
and various other terms thereof, and may also contain such other
provisions as the Board of Directors may, in its discretion, cause to
be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured under the Original
Mortgage or any indenture supplemental thereto or in modification
thereof; and
Whereas, the Company has entered into a Loan Agreement, dated as of
<PAGE>
October 1, 1995 (hereinafter called the ''Loan Agreement'') with the
City of Petersburg, Indiana (the ''City''), in order to obtain funds
for the refunding of the aggregate principal amount of Forty Million
Dollars ($40,000,000) of the City's Pollution Control Refunding Revenue
Bonds, Series 1985 (Indianapolis Power & Light Company Project) issued
by the City pursuant to related loan agreements to pay a portion of the
cost of acquisition, construction, installation and equipping by the
Company of certain pollution control facilities (the ''Facilities'');
and
Whereas, the Company has secured a Municipal Bond Insurance Policy
issued by AMBAC Indemnity Corporation (''AMBAC'') to secure the timely
payment of principal and interest on the City of Petersburg Pollution
Control Refunding Revenue Bonds, Adjustable Rate Tender Securities
(ARTS)SM, Series 1995B (Indianapolis Power & Light Company Project),
due January 1, 2023 (the ''Series 1995B Bonds''); and
Whereas, the Company will enter into an Insurance Agreement dated as
of October 18, 1995 with AMBAC (the ''Insurance Agreement'') to
evidence the reimbursement obligations of the Company to AMBAC for the
payment by AMBAC of the principal of and interest on the Series 1995B
Bonds pursuant to the Municipal Bond Insurance Policy issued by AMBAC
(the ''Bond Obligations''); and
Whereas, the Company has entered into an Interest Rate Swap
Agreement, dated as of October 11, 1995 with AMBAC Financial Services
Limited Partnership (hereinafter ''AFSLP''), (the ''Swap Agreement'')
under which AFSLP will have an obligation to make payments to the
Company equal to the variable rate interest payments on the Series
1995B Bonds, subject to adjustment in accordance with the terms of the
Swap Agreement, and the Company will have an obligation to make
payments to AFSLP equal to the fixed rate interest payment on the
Company's 2023 PC Bond, as defined below, and such payments subject to
a netting of those obligations in accordance with the terms of the Swap
Agreement (to the extent amounts are owing by the Company after such
netting, the ''Swap Obligations''); and
Whereas, the Company has secured a Financial Guaranty Insurance
Policy pursuant to which AMBAC insures the payment obligations of the
Company pursuant to the Swap Agreement (the ''Swap Policy''); and
Whereas, the Insurance Agreement also evidences the reimbursement
obligations of the Company to AMBAC for any payments made pursuant to
the Swap Policy; and
Whereas, pursuant to the terms of the Swap Agreement and the
Insurance Agreement the Company has agreed to issue a series of its
bonds under the Mortgage and this Forty-Second Supplemental Indenture
in order to evidence and secure amounts owing under the terms of the
Swap Agreement and the Insurance Agreement; and
Whereas, the Company now desires to provide for the establishment,
execution, authentication and delivery under the Mortgage of bonds of a
<PAGE>
series to be known as its ''First Mortgage Bonds, 5.21% Series, due
2023'' (the bonds of said series being hereinafter sometimes referred
to as the ''2023 PC Bond''), limited to the aggregate principal amount
of Forty Million Dollars ($40,000,000); and
Whereas, all things necessary to make the 2023 PC Bond hereinafter
described, when duly executed by the Company and authenticated and
delivered by the Trustee, a valid, binding and legal obligation of the
Company, and to make this Forty-Second Supplemental Indenture a valid
and binding agreement supplemental to the Original Mortgage, have been
done and performed; and
Whereas, the execution and delivery by the Company of this
Forty-Second Supplemental Indenture, and the terms of the 2023 PC Bond,
have been duly authorized by the Board of Directors of the Company by
appropriate resolutions of said Board; and
Whereas, it is provided in and by the Original Mortgage that the
Company will execute and deliver such further instruments and do such
further acts as may be necessary or proper to carry out more
effectually the purposes of the Mortgage, and to make subject to the
lien thereof any property thereafter acquired and intended to be
subject to the lien thereof; and
Whereas, the Company has, since the date of execution and delivery
of the Original Mortgage, purchased and acquired property and desires
by this Forty-Second Supplemental Indenture specifically to convey to
the Trustee such property for the better protection and security of the
bonds issued and to be issued under the Original Mortgage, or any
indenture supplemental thereto;
Now, Therefore, This Indenture Witnesseth that, in consideration of
the premises and of the acceptance or purchase of the 2023 PC Bond by
the registered owners thereof, and of the sum of one dollar, lawful
money of the United States of America, to the Company duly paid by the
Trustee at or before the execution and delivery of this Forty-Second
Supplemental Indenture, the receipt whereof is hereby acknowledged, the
Company and the Trustee, respectively, have entered into, executed and
delivered this Forty-Second Supplemental Indenture, for the uses and
purposes hereinafter expressed, that is to say:
Section 1. The Company has granted, bargained, sold, released,
conveyed, assigned, transferred, mortgaged, pledged, set over and
confirmed, and by these presents does grant, bargain, sell, release,
convey, assign, transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined in the Original
Mortgage), unto said American National Bank and Trust Company of
Chicago, as Trustee, as herein provided, and its successors in the
trusts declared in the Original Mortgage and herein, all of the
property, real, personal and mixed, tangible and intangible, of every
kind, character and description which the Company has acquired since
the execution and delivery of the Original Mortgage and now owns
(except property, rights and assets of a character similar to that
<PAGE>
excluded from the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights and assets are
excluded from the lien and operation of the Mortgage only to the extent
provided therein), including, but without otherwise limiting the
generality of the foregoing, the following described property situated
within the State of Indiana:
PART I.
ELECTRIC DISTRIBUTING SYSTEMS.
All electric distributing systems of the Company acquired by it
after May 1, 1940, the date of the Original Mortgage, and located in
the Counties of Bartholomew, Boone, Daviess, Gibson, Greene, Hamilton,
Hancock, Hendricks, Johnson, Knox, Madison, Marion, Monroe, Morgan,
Owen, Pike, Putnam, Shelby and Sullivan, State of Indiana; and any
additions to or extensions of any such systems, together with the
buildings, erections, structures, transmission lines, power stations,
sub-stations, engines, boilers, condensers, pumps, turbines, machinery,
tools, conduits, manholes, insulators, dynamos, motors, lamps, cables,
wires, poles, towers, cross-arms, piers, abutments, switchboard
equipment, meters, appliances, instruments, apparatus, appurtenances,
maps, records, ledgers, contracts, facilities and other property or
equipment used or provided for use in connection with the construction,
maintenance, repair and operation thereof; together also with all of
the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company
in respect of the construction, maintenance, repair and operation of
said systems.
PART II.
STEAM AND HOT WATER DISTRIBUTING SYSTEMS.
All the steam and hot water distributing systems acquired by the
Company after May 1, 1940, the date of the Original Mortgage, and
located in the City of Indianapolis, Marion County, Indiana, and any
additions to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters, engines, tanks,
pipe lines, mains, connections, service pipes, meters, tools,
instruments, appliances, apparatus, facilities, machinery and other
property and equipment used or provided for use in the construction,
maintenance, repair and operation thereof; and together also with all
of the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company
in respect of the construction, maintenance, repair and operation of
said systems.
PART III.
<PAGE>
INDETERMINATE PERMITS AND FRANCHISES.
All indeterminate permits, franchises, ordinances, licenses, and
other authorizations by or from any state, county, municipality, or
other governmental authority, acquired by the Company after May 1,
1940, the date of the Original Mortgage, including particularly, but
not limited to, any indeterminate permits under the Public Service
Commission Act of the State of Indiana, and all Acts amendatory thereof
and supplemental thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and modifications of
said indeterminate permits, franchises, ordinances, licenses, and other
authorizations, and of the indeterminate permits, franchises,
ordinances, licenses, and other authorizations referred to in Part VII
of the Granting Clauses of the Original Mortgage.
PART IV.
OTHER PROPERTY.
All other property, whether real, personal or mixed (except any in
the Mortgage expressly excepted), now owned by the Company and
wheresoever situated, including (without in anywise limiting or
impairing by the enumeration of the same the scope and intent of the
foregoing or of any general description contained in the Mortgage) all
lands, flowage rights, water rights, flumes, raceways, dams,
rights-of-way and roads; all plants for the generation of electricity
by water, steam and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water plants,
sub-stations, transmission lines, distribution systems, bridges,
culverts and tracts; all offices, buildings and structures and the
equipment thereof; all machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors; all appliances
whether electrical, gas or mechanical, conduits, cables and lines; all
pipes whether for water, steam heat and power, or other purposes; all
mains and pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and chattels; all
municipal franchises, indeterminate permits, and other permits; all
lines for the transportation, transmission and/or distribution of
electric current, steam heat and power or water for any purpose,
including towers, poles, wires, cables, pipes, conduits and all
apparatus for use in connection therewith; all real estate, lands,
leases, leaseholds; all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes, licenses,
permits, rights, powers, franchises, privileges, rights-of-way and
other rights in or relating to real estate or the occupancy of the same
and (except as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to all other
property of any kind or nature appertaining to and/or used and/or
occupied and/or enjoyed in connection with any property hereinbefore
described or referred to;
Together with all and singular the tenements, hereditaments and
<PAGE>
appurtenances belonging or in anywise appertaining to the aforesaid
property or any part thereof, with the reversion and reversions,
remainder and remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tolls, rents, revenues, issues,
earnings, income, product and profits thereof, and all the estate,
right, title and interest and claim whatsoever, at law as well as in
equity, which the Company now has or may hereafter acquire in and to
the aforesaid property, indeterminate permits, franchises, ordinances,
licenses and other authorizations and every part and parcel thereof.
Section 2. There shall be and is hereby established a series of
bonds, limited in aggregate principal amount to Forty Million Dollars
($40,000,000) to be issued under and secured by the Mortgage, to be
designated ''5.21% Series, due 2023'', each of which shall also bear
the descriptive title ''First Mortgage Bonds''; said bonds shall mature
on January 1, 2023, and shall be issued only as fully registered bonds
without coupons in the denomination of five thousand dollars and any
larger denomination which is a whole multiple of five thousand dollars;
they shall be payable on the dates, at the times and in the amounts
required by the Swap Agreement and the Insurance Agreement; provided,
however, that the amount payable hereunder shall not exceed the
principal amount of $40,000,000 plus interest at the per annum rate of
5.21% and shall be payable in lawful money of the United States of
America at the office of the Company in the City of Indianapolis,
Indiana, or, if no such office is maintained, at American National Bank
and Trust Company of Chicago, which is hereby designated and appointed
the office and agency of the Company in the City of Chicago, Illinois,
for the payment of amounts due hereunder, if necessary, and for the
registration, transfer and exchange of such bond as hereinafter
provided; all reference herein to the office or agency of the Company
in the City of Chicago, Illinois, being to American National Bank and
Trust Company of Chicago. In event of the resignation or inability to
act of American National Bank and Trust Company of Chicago, then a
successor agent for all such purposes in the City of Chicago, Illinois,
shall be appointed by the Board of Directors of the Company.
The 2023 PC Bond shall be dated as of the date of authentication
thereof, except as otherwise provided in Section 10 of the Original
Mortgage.
The 2023 PC Bond will be issued to evidence and secure the
reimbursement obligations of the Company to AMBAC under the Insurance
Agreement for the payment by AMBAC of the principal of and interest on
the Series 1995B Bonds pursuant to the Municipal Bond Insurance Policy,
and to secure payments made by the Company to AFSLP under the Swap
Agreement.
Upon the notice and in the manner and with the effect provided in
this Section 2, the 2023 PC Bond shall be redeemable prior to the
maturity thereof in whole or in part at the times, and in the amounts
that corresponding redemptions are made on the Series 1995B Bonds and
to the extent that a corresponding reduction occurs in the notional
amount under the Swap Agreement.
<PAGE>
The Company shall provide notice to the Trustee of a reduction, in
whole or in part, in the notional amounts owing under the Swap
Agreement and a corresponding reduction, in whole or in part, in the
outstanding principal amount of the Series 1995B Bonds, and the Trustee
shall thereafter notify the holders of such event and request the
holders to surrender their 2023 PC Bonds for cancellation; or, in the
case of a partial reduction, surrender of the bonds in connection with
the issuance of replacement bonds in denominations equal to the
remaining notional amount owing under the Swap Agreement and the
outstanding principal amount of the Series 1995B Bonds.
At the option of the holder, the 2023 PC Bond, upon surrender
thereof at the office or agency of the Company in Chicago, Illinois,
together with a written instrument of transfer in form approved by the
Company duly executed by the holder or by his duly authorized attorney,
shall be exchangeable for a like aggregate principal amount of fully
registered bonds of the same series of other authorized denominations.
The 2023 PC Bond will be nontransferable except with the prior
written consent of the Company and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2023 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in this Forty-Second
Supplemental Indenture.
Except as set forth herein, no charge shall be made upon any
transfer or exchange of any of the 2023 PC Bond other than for any tax
or taxes or other governmental charge required to be paid by the
Company.
The 2023 PC Bond shall be limited to an aggregate principal amount
of Forty Million Dollars ($40,000,000), together with interest at the
per annum rate of 5.21% from the date of authentication to maturity,
(such total obligation hereinafter referred to as the ''Stated
Amount'') and shall be issued under the provisions of Article VII of
the Original Mortgage.
Section 3. The 2023 PC Bond, and the Trustee's Certificate to be
endorsed thereon, shall be in the following forms, respectively:
[form of face of 2023 pc bond]
This First Mortgage Bond, 5.21% Series, due 2023 (hereinafter called
<PAGE>
the ''2023 PC Bond'') is not transferable except with the prior written
consent of the Company, or to Indianapolis Power & Light Company.
INDIANAPOLIS POWER & LIGHT COMPANY
First Mortgage Bond, 5.21% Series, Due 2023
Due January 1, 2023
No. 1
$40,000,000
INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the State of
Indiana (hereinafter called the ''Company''), for value received,
hereby promises to pay to AMBAC Indemnity Corporation the Bond
Obligations (as defined in the hereinafter defined Indenture) and to
AMBAC Financial Services, Limited Partnership the Swap Obligations (as
defined in the hereinafter defined Indenture) payable on the dates and
at the times required by the Insurance Agreement and the Swap Agreement
(both as defined in the hereinafter defined Indenture) in lawful money
of the United States of America; provided, however, that the amount
payable hereunder shall not exceed the principal amount of $40,000,000
plus interest at the per annum rate of 5.21%. The amounts payable
hereunder are subject to reduction in the manner described in the
Indenture in the event of reductions in the Bond Obligations and the
Swap Obligations. The amounts payable hereunder will be paid to the
registered owner of this 2023 PC Bond at or before the close of
business on such dates, or if such date shall be a Saturday, Sunday,
holiday or a day on which banking institutions in the City of
Indianapolis or the city of any paying agents are authorized by law to
close, on or before the close of business on the next succeeding
business day on which such banking institutions are open for business.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2023 PC BOND SET
FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL
PURPOSES, HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
No recourse shall be had for any amounts payable on this 2023 PC
Bond against any incorporator or any past, present or future subscriber
to the capital stock, stockholder, officer or director of the Company
or of any predecessor or successor corporation, as such, either
directly or through the Company or any predecessor or successor
corporation, under any rule of law, statute, or constitution or by the
enforcement of any assessment or otherwise, all such liability of
incorporators, subscribers, stockholders, officers and directors, as
such, being waived and released by the terms of the Mortgage, as herein
defined.
This 2023 PC Bond shall not become obligatory until American
National Bank and Trust Company of Chicago, the Trustee under the
Mortgage, as herein defined, or its successor thereunder, shall have
<PAGE>
signed the form of certificate endorsed hereon.
In Witness Whereof, Indianapolis Power & Light Company has caused
this 2023 PC Bond to be signed in its name by its President or its
Treasurer, by his signature or a facsimile thereof, and its corporate
seal to be affixed hereon, attested by its Secretary or one of its
Assistant Secretaries, by his signature or a facsimile thereof.
Indianapolis Power & Light Company
Dated
By
Treasurer
Attest:
By
Secretary
[form of trustee's certificate on 2023 pc bond]
Trustee's Certificate
This 2023 PC Bond is one of the bonds, of the series herein
designated, provided for in the within-mentioned Mortgage and
Forty-Second Supplemental Indenture thereto.
American National Bank and Trust Company of
Chicago
Trustee
By
Authorized Signature
[form of reverse side of 2023 pc bond]
INDIANAPOLIS POWER & LIGHT COMPANY
First Mortgage Bond, 5.21% Series, due 2023
Due January 1, 2023
This 2023 PC Bond is one of an issue of bonds of the Company,
issuable in series, and is one of a series known as its First Mortgage
Bonds, 5.21% Series, due 2023 (herein called the ''2023 PC Bond'')
limited in aggregate principal amount to Forty Million Dollars
($40,000,000) and established by a Forty-Second Supplemental Indenture
dated as of October 1, 1995 (the ''Indenture''), all bonds of all
<PAGE>
series issued and to be issued under and equally secured (except
insofar as any sinking or other fund, established in accordance with
the provisions of the Mortgage hereinafter mentioned, may afford
additional security for the bonds of any particular series) by a
Mortgage and Deed of Trust, dated as of May 1, 1940, executed by the
Company to American National Bank and Trust Company of Chicago, as the
Trustee (which Mortgage and Deed of Trust as supplemented and modified
by all supplemental indentures thereto is hereinafter referred to as
the ''Mortgage''), to which Mortgage reference is made for a
description of the property mortgaged and pledged, the nature and
extent of the security, the rights of the bearers or registered owners
of the bonds in respect of such security, the duties and immunities of
the Trustee and the terms and conditions upon which the bonds are
secured.
This 2023 PC Bond evidences and secures the reimbursement
obligations of the Company to AMBAC under the Insurance Agreement for
the payment by AMBAC of the principal of and interest on the Series
1995B Bonds pursuant to the Municipal Bond Insurance Policy, and to
secure certain payments made by the Company to AFSLP under the Swap
Agreement. Anything herein to the contrary notwithstanding, all amounts
constituting Settlement Amounts, as defined in the Swap Agreement,
shall not be payable hereunder or secured hereby.
This 2023 PC Bond is subject to redemption in whole or in part at
the times and in the amounts that corresponding redemptions are made on
the Series 1995B Bonds and to the extent that a corresponding reduction
occurs in the notional amount under the Swap Agreement.
With the consent of the Company and to the extent permitted by and
as provided in the Mortgage, the rights and obligations of the Company
and/or of the holders of the bonds and/or coupons and/or the terms and
provisions of the Mortgage and/or any instruments supplemental thereto
may be modified or altered by affirmative vote of the holders of at
least sixty-six and two-thirds per centum (662/3%) in principal amount
of the bonds affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds disqualified from
voting by reason of the Company's interest therein as provided in the
Mortgage); provided that no such modification or alteration shall
permit the extension of the maturity of the principal of this 2023 PC
Bond or the reduction in the rate of interest hereon or any other
modification in the terms of payment of amounts owing hereunder without
the consent of the holder hereof. The principal hereof may be declared
or may become due and payable prior to the stated date of maturity
hereof, on the conditions, in the manner and at the time set forth in
the Mortgage, upon the occurrence of a completed default as in the
Mortgage provided.
No reference herein to the Mortgage, and no provision of this 2023
PC Bond or of the Mortgage, shall alter or impair the obligation of the
Company, to pay, subject to the provisions of the Forty-Second
Supplemental Indenture, all amounts owing under the Swap Agreement and
the Insurance Agreement at the place, at the respective times and in
<PAGE>
the manner herein prescribed.
This 2023 PC Bond is issuable only in full registered form without
coupons in denominations of Five Thousand Dollars and any larger
denomination which is a whole multiple of Five Thousand Dollars.
This 2023 PC Bond will be nontransferable except with the prior
written consent of the Company and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2023 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in the Forty-Second
Supplemental Indenture.
[end of 2023 pc bond form]
Section 4. Until the 2023 PC Bond in definitive form is ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver, in lieu thereof, a fully
registered 2023 PC Bond in temporary form, as provided in Section 15 of
the Original Mortgage. Such bond may, in lieu of the statement of the
specific redemption prices required to be set forth in such bond in
definitive form, include a reference to this Forty-Second Supplemental
Indenture for a statement of such redemption prices.
Section 5. The Company covenants and agrees that it will duly and
punctually pay to the holder of the 2023 PC Bond all amounts due and
owing under the Swap Agreement or the Insurance Agreement up to the
Stated Amount, at the dates and place and in the manner mentioned
therein; provided, however, that:
(a) the obligation of the Company hereunder to AFSLP shall be
discharged upon termination of the Swap Agreement and payment of all
amount owing thereunder; and
(b) the obligation of the Company hereunder to AMBAC shall be
discharged upon termination of the Swap Agreement together with the
delivery to the Trustee under the Indenture of Trust dated as of
October 1, 1995 between the City and Bank One, Indianapolis, NA, as
Trustee, of a new First Mortgage Bond in the principal amount of the
Series 1995B Bonds then outstanding.
Upon payment of all amounts owing hereunder, the 2023 PC Bond is paid
or deemed paid in full, and upon its receipt by the Company, such bond
shall be delivered to the Trustee for cancellation. The Company shall
promptly inform the Trustee of all payments made and credits availed of
with respect to its obligations on the 2023 PC Bond. The Trustee shall
not be required to recognize any payment made or credit availed of with
<PAGE>
respect to any 2023 PC Bond unless it has received (a) the bond for
cancellation by it, or (b) certificates signed by duly authorized
officers of AMBAC Indemnity or AFSLP specifying the amount of such
payment or credit. In the absence of receipt by the Trustee of any 2023
PC Bond, any such certificates shall be controlling and conclusive.
Section 6. The covenant of the Company to make annual payments to
the Trustee for a Maintenance and Improvement Fund as contained in
Section 41 of the Original Mortgage and in the first twenty-four
Supplemental Indentures to the Original Mortgage creating the several
series of First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to nor be for the benefit of
the 2023 PC Bond, and the Company reserves the right, without any
consent of, or other action by, the holder of the 2023 PC Bond, to
amend, modify or delete the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the 2023 PC Bond
the holder thereof waives any right or privilege so to consent or take
any other action with respect thereto.
Section 7. The Company covenants that, so long as the 2023 PC Bond
shall remain outstanding, it will comply with all of the provisions of
Section 47 of the Original Mortgage, including the provisions with
respect to limitations on dividends and distributions and the purchase
and redemption of stock.
Section 8. The Trustee hereby accepts the trusts herein declared,
provided and created and agrees to perform the same upon the terms and
conditions herein and in the Mortgage set forth and upon the following
terms and conditions:
The recitals contained herein and in the bonds shall be taken as the
statements of the Company and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to
the validity or adequacy of the security afforded hereby, or as to the
validity of this Forty-Second Supplemental Indenture or of the 2023 PC
Bond issued hereunder.
Section 9. Whenever in this Forty-Second Supplemental Indenture
either of the parties hereto is named or referred to, this shall,
subject to the provisions of Article XVII of the Original Mortgage, be
deemed to include the successors or assigns of such party, and all the
covenants and agreements in this Forty-Second Supplemental Indenture
contained by or on behalf of the Company, or by or on behalf of the
Trustee, shall, subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties, whether so
expressed or not.
Section 10. Nothing in this Forty-Second Supplemental Indenture
expressed or implied, is intended or shall be construed to confer upon,
or to give to, any person, co-partnership or corporation, other than
the parties hereto and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or by reason of
this Forty-Second Supplemental Indenture or any covenant, condition or
<PAGE>
stipulation hereof; and all the covenants, conditions, stipulations,
promises and agreements in this Forty-Second Supplemental Indenture
contained by or on behalf of the Company shall be for the sole and
exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.
Section 11. The Company covenants that all of the terms, provisions
and conditions of the Mortgage shall be applicable to the 2023 PC Bond
issued hereunder, except as herein otherwise provided and except
insofar as the same may be inconsistent with the provisions of this
Forty-Second Supplemental Indenture.
Section 12. This Forty-Second Supplemental Indenture is dated as of
October 1, 1995, although executed and delivered on the date of the
acknowledgement hereof by the Trustee; and shall be simultaneously
executed and delivered in several counterparts, and all such
counterparts executed and delivered, each as an original, shall
constitute but one and the same instrument.
<PAGE>
In Witness Whereof, Indianapolis Power & Light Company, party of the
first part, has caused its corporate name to be hereunto affixed and
this instrument to be signed and acknowledged by its Vice-President or
Treasurer, and its corporate seal to be hereto affixed and attested by
its Secretary or an Assistant Secretary, for and in its behalf, and
American National Bank And Trust Company Of Chicago, party of the
second part, as Trustee, has caused its corporate name to be hereunto
affixed and this instrument to be signed and acknowledged by one of its
Vice-Presidents, and its corporate seal to be hereto affixed and
attested by one of its Assistant Secretaries, all as of the day, month
and year first above written.
Indianapolis Power & Light Company,
/s/ Steven L. Meyer
By
Steven L. Meyer,
Treasurer
Attest:
/s/ Wendy V. Yerkes
Wendy V. Yerkes,
Assistant Secretary
American National Bank And Trust Company of
Chicago
/s/ Ronald B. Bremen
By
Ronald B. Bremen,
Vice-President
Attest:
(Seal)
/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary
<PAGE>
State of Indiana
County of Marion
(
)
ss:
On this 12th day of October, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came
Steven L. Meyer, Treasurer, and Wendy V. Yerkes, Assistant Secretary, of
Indianapolis Power & Light Company, one of the corporations described
in and which executed the foregoing instrument, to me personally known
and known to me personally to be such Treasurer and Assistant
Secretary, respectively. Said Steven L. Meyer and Wendy V. Yerkes being
by me severally duly sworn did depose and say that the said Steven L.
Meyer resides in Marion County, Indiana and the said Wendy V. Yerkes
resides in Marion County, Indiana; that said Steven L. Meyer is
Treasurer and said Wendy V. Yerkes is Assistant Secretary of said
Indianapolis Power & Light Company; that each of them knows the
corporate seal of said corporation; that the seal affixed to said
instrument and bearing the name of said corporation is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that each of them signed his name thereto by like
order; and each of them acknowledged the execution of said instrument
on behalf of said corporation to be his free and voluntary act and deed
and the free and voluntary act and deed of said corporation, for the
uses and purposes therein set forth.
In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 12th day of October, 1995.
/s/ Sandra L. Stewart
Sandra L. Stewart
Notary Public
My Commission Expires:
July 24, 1998
My County of Residence is:
Johnson
(Notarial Seal)
State of Illinois
County of Cook
(
)
ss:
<PAGE>
On this 12th day of October, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came Ronald B.
Bremen, Vice-President, and Robert M. Selangowski, Assistant
Secretary, of American National Bank and Trust Company of Chicago, one
of the corporations described in and which executed the foregoing
instrument, to me personally known and known to me personally to be
such Senior Vice-President and Assistant Secretary, respectively. Said
Ronald B. Bremen and Robert M. Selangowski, being by me severally sworn
did depose and say that the said Ronald B. Bremen resides in Glencoe,
Illinois, and that the said Robert M. Selangowski resides in Lansing,
Illinois; that said Ronald B. Bremen is Vice-President and said Robert M.
Selangowski is Assistant Secretary of said American National Bank and Trust
Company of Chicago; that each of them knows the corporate seal of said
corporation; that the seal affixed to said instrument and bearing the
name of said corporation is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation; that each
of them signed his name thereto by like authority; and each of them
acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and
voluntary act and deed of said corporation, for the uses and purposes
therein set forth.
In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 12th day of October, 1995.
/s/ Bernadette G. Janairo
Bernadette G. Janairo
Notary Public
My Commission Expires:
May 22, 1998
My County of Residence is:
Cook
(Notarial Seal)
This instrument was prepared by
Bryan G. Tabler
<PAGE>
RECORDING DATA
Forty-Second Supplemental Indenture Dated As of October 1, 1995
County Record Page Instr. No. Recording
Date
Bartholomew - - 95-010203 10/13/95
Boone Mtg. Rec. 350 38 9072 10/13/95
Daviess Drawer No. 2 - 95-3816 10/13/95
Card No. 3912
Gibson - - 95-5122 10/13/95
Greene Mtg. Rec. X-12 1061-1082 5010 10/13/95
Hamilton - - 9556076 10/13/95
Hancock - - 9508516 10/13/95
Hendricks Mtg. Rec. 661 513-534 17622 10/13/95
Johnson - - 95018826 10/13/95
Knox Mtg. Rec. 427 51 006500 10/13/95
Madison - - 9518718 10/13/95
Marion - - 1995-0130535 10/13/95
Monroe Mtg. Rec. A789 142 514935 10/13/95
Morgan Mtg. Rec. 621 418 9512402 10/13/95
Owen Mtg. Rec. ER 320 107415 10/13/95
Pike Mtg. Rec. 181 275-296 95-1927 10/13/95
Putnam Mtg. Rec. 341 277 6294 10/13/95
Shelby Mtg. Rec. 353 382-403 06177 10/13/95
Sullivan Mtg. Rec. 252 976 953195 10/13/95
Switzerland Mtg. Rec. 94 191 4699 10/13/95
EXHIBIT 10.4
TRANSPORTATION CONTRACT
ICC-CR-C-4553
THIS TRANSPORTATION CONTRACT (hereinafter "Contract") is made this
28th day of September, 1987 by and between CONSOLIDATED RAIL CORPORATION,
a Pennsylvania corporation, (hereinafter "CR", "CONRAIL" or "RAILROAD"),
ALGERS, WINSLOW & WESTERN RAILWAY COMPANY, an Indiana corporation
(hereinafter "AWW" or "RAILROAD"), and INDIANAPOLIS POWER & LIGHT
COMPANY, an Indiana corporation (hereinafter "IPL" or "CONSIGNEE").
WHEREAS, the Staggers Act of 1980 specifically authorized one or
more rail carriers to "enter into a contract with one or more purchasers
of rail services to provide specified services under specified rates and
conditions" (49 USC Section 10713); and
WHEREAS, IPL operates electric generating facilities that consume
steam coal, and desires reliable and efficient transportation services
for such coal; and
WHEREAS, IPL and CR are currently involved, as the complainant and
defendant respectively, in certain litigation before the Interstate
Commerce Commission under Section 229 of the Staggers Rail Act, which IPL
and CR desire to resolve.
WHEREAS, CR and AWW are willing and able to provide transportation
services of such coal;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
1. TERM OF AGREEMENT: Performance under this Contract shall
begin with the date of filing with Interstate Commerce Commission
("ICC"), subject to the conditions of 49 CFR 1313.2. Unless terminated
earlier in accordance with the provisions herein, this Contract shall
remain in effect through January 31, 1998.
2. APPLICABLE LAW: Performance under this Contract shall be
governed by the laws of the State of Indiana, except as otherwise
provided herein. The parties shall comply with all applicable laws,
statutes, ordinances, regulations and rules with respect to their
performance under this Contract.
3. GENERAL TERMS AND CONDITIONS:
A. Rates named in this Contract apply to the exclusion of
rates published elsewhere, except as otherwise provided in this Contract.
The waybill date will govern as the date on which a shipment has been
made. Rates named herein apply only from the origins to the destinations
named via routes shown herein and do not apply from or to intermediate
points. Except as otherwise provided herein, these rates involve only
line-haul transportation and may not be used in combination with other
rates for the purpose of shipping from or to points not specifically
named in this Contract.
B. Except as modified in this Contract, all
classifications, tariffs, exempt circulars, government, AAR and Railroad
rules, regulations, and provisions, including, but not limited to,
loading, Uniform Straight Bill of Lading provisions and its terms, and
amendments thereto, will apply. The Uniform Freight Classification Rules
10, 13, 24, 29 and 34, or exceptions thereto, will not apply. Conrail
will absorb switching charges of terminal or connecting lines to the
extent such absorption is shown in tariffs lawfully filed with the ICC.
Provisions governing detention, demurrage, and weighing are as stated in
Sections 11 and 12. In the event of a conflict of inconsistency between
the terms, provisions and conditions of any classifications tariffs and
other documents specified above, and this Contract, the terms, provisions
and conditions of this Contract will govern.
C. The term "Contract Year" shall be defined as a calendar
year from January 1 through December 31, except for the first Contract
Year which will begin with the effective date of the Contract and end
December 31, 1987, and the last Contract Year which shall begin with
January 1, 1997 and end January 31, 1998.
D. The terms customer-owned or leased equipment or private
equipment shall mean any cars used in shipments moving under this
Contract carrying IPL reporting marks or any reporting marks which are
not those of a common carrier.
E. The term "ton" or "net ton" shall mean a ton of 2000
pounds of avoirdupois weight.
4. ADJUSTMENTS: During the term of this Contract, rates named
herein will be adjusted only in the following manner:
A. Commencing with October 1, 1987 and continuing during
the term of this Contract, on each January 1, April 1, July 1, and
October 1 thereafter, the rates shall be adjusted (increased or
decreased) based on changes in the Rail Cost Adjustment Factor
(hereinafter RCAF) filed under the procedures of Ex Parte 290 (Sub. No.
2), Railroad Cost Recovery Procedures, including all amendments to said
procedures, as adopted and approved by the ICC. However, in no event
shall rates be any less than those offered on the effective date of this
Contract.
On the first day of each calendar quarter, the RCAF for
the coming quarter will be divided by the RCAF for the immediately
preceding quarter. Rates of the immediately preceding quarter will be
multiplied by the resulting factor to produce rates and charges for the
new quarter.
B. In the event the RCAF is discontinued, adjustments to
rates shall be made in accordance with the provisions of Section 4.A on
the basis of an index or indices using comparable factors and formulae.
Railroads will provide in writing to IPL a notice of anticipated index
discontinuance and a recommended basis for application of comparable
factors and formulae.
C. In the event parties do not agree on a basis for a
substitute index or indices as provided in Section 4.5, the matter will
be settled by binding arbitration as described in Section 19. Any change
in effective rates and charges agreed to by the parties or determined by
arbitration shall be retroactively applied to the commencement of such
substitute index or indices, but not prior to the first quarter after
discontinuance of, or change to the RCAF. The paying party or parties
shall pay the other party or parties within ninety (90) days of the date
the parties amend the Contract reflecting such change in rates and
charges.
D. It is the intent of the parties that, for purposes of
this Contract, rate increases when the RCAF increases and rate reductions
when the RCAF declines, shall not be subject to the procedures for a
"floor" or a "bank" adopted by the ICC in its decision served October 17,
1986 in Ex Parte 290 (Sub. No. 2), Railroad Cost Recovery Procedures.
Should the ICC rule that productivity adjustments shall
be made to the RCAF in Ex Parte 290 (Sub. No. 4), such adjustments must
be incorporated when rates are calculated thereby.
5. LOSS AND DAMAGE: Loss and damage claims shall be handled in
accordance with the terms of the Uniform Straight Bill of Lading, 49 CFR
Part 1005, and 49 USC 11707. Notwithstanding the foregoing, loss and
damage liability shall be limited to IPL's full and actual loss on the
coal shipped, and shall not include special, consequential, indirect, or
punitive damages.
6. ASSIGNMENT: This Contract shall be binding upon and inure to
the benefit of the parties, their successors and permitted assigns. No
party may assign this Contract, or any rights hereunder, without the
prior written consent of the other party, but such consent shall not be
unreasonably withheld.
7. SERVICE, EQUIPMENT AND MINIMUM WEIGHTS:
A. Conrail and AWW agree to transport bituminous coal
provided for IPL by its coal suppliers from origins named herein to
destinations named herein in accordance with the terms of Attachment A
and B, respectively, and to provide related transportation services with
reasonable dispatch. Conrail or its successors, or permitted assigns
shall provide such transportation service between points shown in
Attachment A to this Contract through January 31, 1998 or the termination
of this Contract, whichever occurs earlier.
B. Railroads shall provide railroad-owned or leased
equipment, and service under this Contract on the same basis that they
provide such equipment and service to other customers who do not have
contracts with Railroads.
C. Movements of consignments under this Contract will be
scheduled by Conrail. IPL shall provide Conrail's Division
Superintendent, Southwest Division, 31 E. Georgia Street, Indianapolis,
IN 46204, or such other office as Conrail may designate, at least seven
(7) days before the end of each calendar month, sufficient information in
writing to enable Conrail to schedule movement of such consignments for
the next calendar month. Information shall include origin, destination,
loading date and equipment ownership, tonnage, and number of cars
required for each consignment. By Wednesday of each week IPL shall
provide telephone confirmation of the above information with any changes
necessary to facilitate movement of consignments for the following week.
Conrail may change its notification requirements during the term of this
Contract, but may not do so if such change adversely affects IPL.
Conrail and AWW shall exercise their best efforts to move consignments as
requested by IPL but cannot guarantee that scheduled dates and times will
be observed. Conrail shall inform IPL of inability to comply with IPL's
request as far in advance as practicable. If a cancellation order is
received less than eight (8) hours before scheduled time and date of
placement of empty cars at origin mine or after actual placement of empty
cars at origin mine a charge of five hundred dollars ($500.00) per
consignment cancellation subject to adjustment pursuant to Section 4,
will be assessed.
D. Loaded cars from any given loading point must be
tendered to the carrier blocked by the consignor in accordance with the
trainload consignment in which they are to be transported. If this is
not done and it is necessary for the railroad to block the loaded cars, a
charge of two hundred and fifty-one dollars ($251.00) subject to
adjustment under Section 4 of this Contract will be assessed against the
consignor or his agent by the railroad which performs the blocking
service.
E. When rates in this Contract apply to privately-owned or
leased equipment, Conrail or AWW have no obligation to supply the
equipment specified to be privately-owned or leased for such rates. This
Contract is not subject to the provisions of Tariff ICC PHJ 6007 Series
or Tariff ICC CR 9337 Series.
F. If cars furnished by IPL, or the consignor, are
unserviceable because of damage or destruction caused by Conrail or AWW
performing service under this Contract, Conrail or AWW must furnish
written notification to IPL, or consignor, that its cars (designating
them by car initial and number) were damaged or destroyed on (month-day-
year) and will upon written request by IPL, or consignor, furnish
standard railroad-owned cars of like capacity, if available, until such
time as the damaged car or cars are repaired or replaced, but only for a
period not exceeding 150 days after damage or destruction occurred, after
which time the railroad-owned car or cars shall be returned to Conrail or
AWW and the provisions of this Paragraph will no longer apply to such car
or cars. Railroad-owned cars furnished to IPL, or consignor, under
provisions of this Paragraph will be furnished without charge.
For the purpose of this Contract each substitute car or
cars will be considered as being furnished by IPL, or the consignor.
IPL, or consignor, shall confirm request for the
substitution of railroad-owned, or consignor-owned, cars within 30 days
of the date damaged or destruction occurred to IPL-owned cars and shall
furnish a certificate stating:
"This is to certify that on (month-day-year) the
following cars (list car numbers) were destroyed
or damaged and are being taken out of service to
be either repaired or replaced."
G. Rates named in this Contract will apply only on cars
with a marked capacity of 197,000 pounds or more, except that rates
applicable in cars of railroad ownership will also apply when railroad
furnishes cars having a lower marked capacity.
H. Minimum weight per car on cars with marked capacity
less than 197,000 pounds shall be the marked capacity of each car, except
when cars are loaded to full visible or cubical capacity actual or
estimated weights will apply. Minimum weight per car on cars with marked
capacity of 197,000 pounds or more shall be the marked capacity of each
car, except when cars are loaded to full visible or cubical capacity
actual or estimated weights will apply but not less than 95% of marked
capacity. Actual or estimated weights will be determined as provided in
Section 12 of this Contract.
I. For all movements of bituminous coal named in this
Contract, except from Lynnville Mine, IN to Petersburg, IN, minimum
trainload consignment is 5000 tons, except when consignment consists of
50 or more cars with marked capacity of 197,000 pounds or more loaded to
full visible or cubical capacity then minimum trainload consignment shall
be the actual or estimated weight of lading in the consignment but not
less than 95% of marked capacity of all cars in the consignment.
J. All tonnage for inclusion in a trainload consignment
shall be tendered to Conrail or AWW on one bill of lading on one day, at
one time from one consignor at one origin, to one IPL destination at
Campbells, Indianapolis, or Petersburg, IN. Oakland City Junction, IN on
the AWW will be the designated assembly point for shipments originating
at all stations on the AWW.
If less than the minimum trainload consignment required
in connection with rates named in this Contract is tendered for shipment,
charges will be based on the minimum consignment applicable in connection
with such rates, or on actual rates published in tariffs on file with the
Interstate Commerce Commission, whichever is lower.
8. FORCE MAJEURE: In the event that any party is unable to
perform as stated in this Contract due to or as a result of one or more
of the following causes: Act of God, including, but not limited to
floods, storms, earthquakes, hurricanes, tornadoes, or other severe
weather or climatic conditions; destruction or breakdown of loading or
unloading facilities, mining equipment or plant facilities vital to coal
loading or unloading operations or the mining, transportation or plant
operations of a coal producer, CR, AWW or IPL not reasonably preventable
by routine or periodic maintenance; act of public enemy, war, blockade,
insurrection, riot, vandalism or sabotage; fire, accident, wreck,
derailment, washout or explosion; strike, lockout or labor dispute,
embargoes or AAR service orders; or governmental laws, orders or
regulations, including orders or regulations of environmental agencies,
this Contract shall be suspended at the affected origin and/or
destination only insofar as said origin and/or destination is affected by
described disability and only for the duration of such disability. Any
absolute amount of volume commitment which is included in this Contract
shall be reduced proportionately for each day or portion thereof, of
disability under this Section.
The term Force Majeure shall mean any such cause which is not
reasonably within the control of the party asserting the Force Majeure,
or its employees or agents, including coal producers, affecting its
performance under this Contract and the adverse effects of which are not
due to the fault or negligence of said party, employee, agent or persons
with whom it has such contracts.
The party experiencing the Force Majeure shall use due
diligence to remove such cause of Force Majeure as may occur and its
performance shall be resumed hereunder.
The party experiencing the disability will send written
notice to the other parties to this Contract, stating the Contract Number
and location and nature of such disability, and will act to cure the
disability as quickly as possible. This notice shall be sent within ten
(10) days of the beginning of the disability. Written notice shall also
be sent within ten (10) days of the end of such disability.
9. SHIPPING INSTRUCTIONS AND PAYMENT: IPL shall place, or cause
to be placed, the following notation on all shipping instructions
prepared for shipments under this Contract: "Shipped under Contract
Number ICC-CR-C-4553". Freight bills will be presented based on shipping
instructions as provided by IPL. Charges prescribed herein apply in
addition to all other transportation, accessorial and/or demurrage
charges which lawfully apply at or between points named herein. Payment
of such charges shall be made in accordance with ICC Credit Regulations,
49 CFR 1320, which are in effect at the time the particular
transportation service is performed.
Railroads' acceptance of a partial payment containing a
restricted endorsement does not limit the obligation of IPL for payment
to Railroads of the full amount of charges due under this Contract and/or
otherwise applicable tariff charges for traffic covered hereby.
When a party other than IPL is to be billed for
transportation provided hereunder, IPL agrees to reimburse Railroads for
such payment where said party fails to make payment.
10. RATES: Conrail shall transport bituminous coal from origins
named in Attachment A to this Contract to destinations named in
Attachment A of this Contract. Conrail and AWW shall transport
bituminous coal from origins named in Attachment B to this Contract to
destinations named in Attachment B to this Contract. IPL agrees to pay
rates and/or charges named in Attachments A and B. (AWW does not
participate in the provision of service covered by rates named in
Attachment A; thus disclosure to such rates shall not be made to AWW).
11. LOADING, UNLOADING, PLACEMENT AND DETENTION:
A. Origin: Governed by provisions of Tariff ICC CR-
9109 when on Conrail.
Governed by provisions of Tariff ICC PHJ
6008-Q, Item 646, Part A, or successive
issues thereof, when on AWW.
B. Destination:
(1) Does not Apply on Shipments Consigned from
Lynnville Mine, IN to Petersburg, IN.
(a) No detention charge will be assessed on
private cars held at destination on private tracks owned or leased by
IPL.
(b) Except as otherwise provided in this
Subsection, two (2) days (forty-eight [48] hours) free time will be
allowed at destination for unloading each consignment, time to be
computed from the first 12:01 AM after placement of loaded cars on
unloading tracks of IPL.
(c) When delivery of cars cannot be made
because of any condition attributable to IPL, such cars will be
constructively placed on railroad-owned tracks at destination or at an
available hold point if they cannot reasonably be accommodated at
destination. Except as otherwise provided in this Section, no free time
will be allowed on cars held under constructive placement.
(d) All cars, private or railroad-owned, held
under constructive placement for delivery upon the tracks of IPL will be
subject to a charge of twenty dollars ($20.00) per car per day or
fraction thereof time to be computed from the first 12:01 AM after
constructive placement of the first loaded car.
(e) When at the time of actual placement on
IPL's rail siding, lading is frozen or congealed so as to require
heating, thawing or loosening to unload, the two (2) days (forty-eight
[48] hours) free unloading time shall be extended an additional twenty-
four (24) hours provided that IPL shall notify Conrail's agent at
destination of the congealed or frozen condition of the lading within
twenty-four (24) hours after the cars are released.
(f) If as a result of Force Majeure conditions,
other than frozen lading, described in Section 8, IPL cannot unload and
release cars in accordance with the provisions of this Subsection, no
detention charges will be assessed.
(g) On all railroad-owned cars in a consignment
held on IPL's tracks beyond the free time specified herein, IPL will be
assessed detention charges as shown below for all cars in a consignment
until the entire consignment is released:
Detention Charge
$20.00 per car per day or fraction thereof
(2) Applies Only on Shipments Consigned from
Lynnville Mine, IN to Petersburg, IN.
(a) Except as otherwise provided in this
Subsection, five (5) hours free time will be allowed at destination for
unloading each consignment, time to be computed from actual placement of
loaded cars on the receiving tracks of IPL.
(b) After the expiration of free time as
provided in this Subsection, charges per consignment as shown below will
be assessed:
Excess Time Detention Charge
1st hour or fraction thereof $ 30.00
2nd hour or fraction thereof 100.00
3rd hour and each subsequent
hour or fraction thereof 200.00
(c) When at the time of actual placement on
IPL's rail siding, lading is frozen or congealed so as to require
heating, thawing or loosening to unload, the five (5) hours free
unloading time shall be extended an additional four (4) hours, provided
that IPL shall notify Conrail's agent at destination of the frozen or
congealed condition of the lading within four (4) hours of placement.
(d) If as a result of Force Majeure conditions,
other than frozen lading, described in Section 8, IPL cannot unload and
release cars in accordance with the provisions of this Subsection, no
detention charges will be assessed.
12. WEIGHING:
A. Weights for billing purposes will be based upon weights
determined by IPL or consignor from Conrail or AWW approved scales.
B. In the event of an emergency, where weights as
described in Section 12.A are not available, an average cubical weight
factor will be established through use of historical actual weights on
coal from the specific origin, using the last three most recent
shipments.
C. Rates in this Contract do not include weighing service
by Conrail or AWW except as provided in Section 12.D herein. If weighing
service is requested by IPL or consignor, an entire shipment must be
weighed at a charge of 38 cents per net ton (subject to adjustment under
Section 4 of this Contract) and the party making the request will be
charged for weighing of the entire shipment.
D. Conrail or AWW, at their sole option and convenience,
may weigh shipments in lieu of calculating average or estimated weights
under Section 12.B.
13. NOTICE PROVISION: Except as otherwise provided in this
Contract, notices, statements, etc., which are required or permitted to
be given under this Contract shall be sent to the parties identified
below, or to such parties as Conrail, AWW or IPL may later identify:
If to Conrail: If to IPL:
Manager, Transportation Contracts Vice President-Fuel Supply
Consolidated Rail Corporation Indianapolis Power & Light
Room 945, One Liberty Place Company
1650 Market Street P. O. Box 1595B
Philadelphia, PA 19103-7399 Indianapolis, IN 46206
and
If AWW:
Manager, Coal Marketing-Utility General Manager
Consolidated Rail Corporation Algers, Winslow and Western
Room 1126, One Liberty Place Railroad Company
1650 Market Street Route 2, P. O. Box 188
Philadelphia, PA 19103-7399 Oakland City, IN 47660
14. CONFIDENTIALITY: The parties agree that all terms and
conditions of this Contract shall remain confidential and shall not be
disclosed to any other party, except to the extent necessary to obtain
regulatory approval and/or to perform according to the term and
conditions of coal supply contracts or this Contract.
15. ABANDONMENT OR SALE OF LINES OF RAILROAD:
A. For a period extending for five (5) years from the
effective date of this Contract, CR may not abandon the following lines
of railroad: the Petersburg Secondary track between Kraft, IN and
Daylight, IN; the Lynnville Secondary track between Buckskin, IN and
Lynnville, IN; and the Bicknell Industrial Track between Rincon, IN and
Sandborn, IN, needed to effect transportation service under this
Contract. On or after a period extending for five (5) years from the
effective date of this Contract, Conrail may, pursuant to appropriate
regulatory authority, abandon any of the aforementioned lines provided
that CR gives at least three (3) years prior written notice to IPL of
such abandonment and such other notice or notices as required by law. In
agreeing to the foregoing, IPL does not waive its right to oppose any
attempt by Conrail to abandon any such line.
In the event that such abandonment affects service to
some but not all of the origins or destinations named in this Contract,
the remainder of the contract shall continue in full force and effect,
and Conrail and IPL shall, in good faith, negotiate a revised minimum
tonnage commitment in light of such abandonment.
B. In the event that CR, pursuant to appropriate
regulatory authority, sells a line of railroad serving any origin or
destination named in this Contract, CR or purchaser will provide
transportation service as outlined in Section 7 of this Contract. If a
line serving an origin or destination named in this Contract is sold,
Conrail may assign this Contract, in whole or in part, to purchaser to
the extent necessary to continue transportation service between points
named in this Contract. In agreeing to the foregoing, IPL does not waive
its right to oppose any attempt by Conrail to sell any lien of the
railroad that may be necessary for service under this Contract.
16. GROSS INEQUITY: It is the intent of the parties hereto that
each shall mutually benefit from the terms, conditions and provisions of
the Contract. In the event that any party hereto shall suffer a gross
inequity resulting from an unforeseen substantial change in circumstances
or conditions, the parties shall negotiate in good faith to resolve or
remove such gross inequity; provided, however, that nothing herein shall
be construed to relieve any party of any of its obligations under this
Contract.
A "Gross Inequity" shall specifically include rulings from
the ICC, or successor agency, which would have a significant adverse
effect upon the profitability of the transportation service rendered by
the Railroad.
17. MODIFICATION: The parties agree that no change or
modification to this Contract shall be of any force or effect unless it
is incorporated in a written amendment executed by the parties. All the
terms and conditions of this contract are contained herein and any prior
understandings and representations are superseded by this Contract.
18. IPL COMPLAINTS UNDER SECTION 229 OF STAGGERS RAIL ACT: IPL
shall within thirty (30) days following the effective date of this
Contract, voluntarily dismiss with prejudice its complaint brought at the
ICC docketed at 38056.
19. ARBITRATION: Any disputes arising under this contract,
except for those involving loss and damage claims, shall be resolved by
arbitration, following the procedures of the American Arbitration
Association and each shall be deemed bound by the award. Each party
consents to the entry of judgment by any court having jurisdiction in the
matter in accordance with the decision of the arbitrator.
20. WAIVERS AND REMEDIES: The failure of any party to insist
upon strict performance of any of the obligations of any other party
under this Contract or to take advantage of any of its rights shall not
be construed as a waiver of the performance of any such obligation or the
relinquishment of any such rights for the future, but the same will
continue and remain in full force and effect.
21. TARIFF PUBLICATION: Unless the parties agree to extend the
term of this Contract or enter into a new Contract, at the end of the
term of this Contract or the earlier termination of this Contract, CR and
AWW shall upon sixty (60) days written notice from IPL file and publish a
tariff to meet the then existing transportation requirements of IPL at
the then existing rates covering all movements specified in Attachment A
and B, which tariff shall become effective January 31, 1998 or upon the
termination of this Contract, whichever date occurs earlier, and shall be
applicable for a minimum of ninety (90) days following the termination or
expiration of this Contract.
22. BANKRUPTCY: Upon written notice and at the option of either
party, this Contract may be cancelled in the event a petition is filed by
or against the other party, its parent company or principal owner, under
bankruptcy, receivership or insolvency laws. Such cancellation shall not
prejudice the rights of that party to recover any amounts due under this
Contract.
23. HEADINGS: The headings to the respective Sections and
Paragraphs of this Contract are inserted for convenience of reference,
and are neither to be taken to be any part of the provisions thereof nor
to control or affect the meaning, construction or effect of the same.
IN WITNESS WHEREOF, and intending to be legally bound, the parties
hereto have caused this Contract to be executed by their duly authorized
representatives on the day and year first written above.
INDIANAPOLIS POWER & LIGHT CONSOLIDATED RAIL CORPORATION
COMPANY
By: /s/ Robert W. Hill By: /s/ not legible
Title: President Title: Vice President-Marketing
<PAGE>
ALGERS, WINSLOW AND WESTERN RAILWAY COMPANY
(Not a party to ATTACHMENT A, hereto)
By: /s/ Robert A. Shaw
Title: General Manager
<PAGE>
TRANSPORTATION CONTRACT ICC-CR-C-4553
ATTACHMENT A - RATES FROM CONRAIL ORIGINS
(This will not be furnished to AWW, as AWW does not participate in the
provision of service covered by rates named herein.)
CUSTOMER NAME: Indianapolis Power & Light Company
CUSTOMER STATUS: Receiver
ADJUSTMENT OF RATES: Rates are subject to quarterly adjustment as
provided in Section 4 of this Contract effective
with October 1, 1987.
VOLUME: Three million (3,000,000) tons per year as
further described in this attachment.
Minimum Minimum
Commodity Equipment Weight Trainload
STCC Route Type Per Car Consignment
Bituminous CR Direct Open Top As Provided 5000 Tons as
Coal 112 Hopper Cars in Section 7 further
as Provided of Contract described in
in Section 7 Section 7 of
of this Contract
Contract (except from
Lynnville
Mine, IN to
Petersburg,
IN)
Origin (See Note 1) Destination Rate Car Ownership
(in cents Per Net Ton
except as noted)
Hawthorne Mine, IN Campbells, IN 360 Railroad
" " 325 Private
" *Indianapolis, IN 470 Railroad
" * " 420 Private
" Petersburg, IN 350 Railroad
" " 315 Private
Lynnville Mine, IN Campbells, IN 530 Railroad
" " 470 Private
" *Indianapolis, IN 660 Railroad
" * " 560 Private
" **Petersburg, IN $155 per Private
car (See
Notes
2 and 3)
Origin (See Note 1) Destination Rate Car Ownership
(in cents Per Net Ton
except as noted)
Miller Creek Mine, IN Campbells, IN 310 Railroad
" " 260 Private
" *Indianapolis, IN 420 Railroad
" * " 365 Private
" Petersburg, IN 300 Railroad
" " 250 Private
* Conrail will absorb not to exceed fifty ($50) dollars per car of
switching charge assessed by the Indiana Rail Road Company (INRD)
or successors on traffic to the E.W. Stout generating station of
IPL, Indianapolis, IN.
** Rate is in dollars per car regardless of weight of lading. Minimum
trainload consignment is 50 cars. Minimum charge per consignment
is $7,750 subject to adjustment under Section 4 of this Contract.
A maximum of sixty (60) railroad furnished cars may be used in this
service in addition to the minimum required to be shipped in
private cars furnished by the consignor or IPL under this rate.
VOLUME:
A. IPL agrees that in each Contract Year, except the first and
last Contract Years, it will ship or cause to be shipped, subject to the
provisions of this contract, not less than three million (3,000,000) tons
of bituminous coal. For purposes of volume calculation each carload of
bituminous coal shipped from Lynnville Mine, IN to Petersburg, IN on a
"per car" rate shall be considered as containing 100 tons. During the
first contract year IPL agrees that it will ship or cause to be shipped
not less than five hundred thousand (500,000) tons of bituminous coal.
During the last Contract Year IPL agrees that it will ship or cause to be
shipped not less than 3,250,000 tons of bituminous coal. All bituminous
coal tonnage consigned to IPL at destinations named in this Contract from
any origin, whether or not named in this Contract, on which Conrail
receives a line haul movement will be counted toward the yearly volume
commitments named in this Contract.
B. If IPL fails to ship or cause to be shipped during any
contract year the volume specified in paragraph A, above, subject to
adjustment pursuant to Section 8, IPL shall pay Conrail $1.55 per net ton
for each ton of shortfall, subject to adjustment under Section 4 of this
Contract.
C. Within thirty (30) days of the conclusion of each contract
year, IPL shall furnish a written statement showing the contract number,
the contract year for which the statement is applicable, and the total
number of tons shipped from each origin to each destination under this
Contract.
D. IPL shall maintain records sufficient to document IPL's
performance under this Contract during each Contract Year thereof, and
shall make such records available for inspection by Conrail or its agent
on reasonable notice and during normal business hours.
<PAGE>
EXPLANATION OF NOTES:
Note 1 - Stations shown below under Column A do not have facilities for
loading bituminous coal as of the effective date of this Contract. In
the event that such facilities should become available and comply with
the provisions of this Contract, rates from stations shown opposite
thereto in Column B will apply.
Column A Column B
Daylight, IN Lynnville Mine, IN
Lyons, IN Hawthorne Mine, IN
Newberry, IN Miller Creek Mine, IN
Sandborn, IN Hawthorne Mine, IN
Worthington, IN Miller Creek Mine, IN
Note 2 - In the event that IPL ships or causes to be shipped more than
30,000 carloads, but not more than 35,000 carloads, on this rate during
any Contract Year (or more than 32,500 carloads, but not more than 37,900
carloads, during the last Contract Year), a refund of eight dollars
($8.00) per car will be made by Conrail to IPL for all cars shipped under
this rate during that Contract Year.
Note 3 - In the event that IPL ships, or causes to be shipped, more than
35,000 carloads on this rate during any Contract Year (or more than
37,900 carloads during the last Contract Year), a refund of twelve
dollars ($12.00) per car will be made by Conrail to IPL for all cars
shipped under this rate during that Contract Year.
<PAGE>
TRANSPORTATION CONTRACT ICC-CR-C-4553
ATTACHMENT B - RATES FROM AWW ORIGINS
CUSTOMER NAME: Indianapolis Power & Light Company
CUSTOMER STATUS: Receiver
ADJUSTMENT OF RATES: Rates are subject to quarterly adjustment as
provided in Section 4 of this Contract effective
with October 1, 1987.
Minimum Minimum
Commodity Equipment Weight Trainload
STCC Route Type Per Car Consignment
Bituminous AWW-Oakland Open Top As Provided in 5000 Tons as
Coal 112 City Jct., Hopper Cars Section 7 of further
IN-Conrail as Provided of Contract described in
in Section Section 7 of
7 of Contract Contract
Origin Destination Rate Car Ownership
(in cents Per Net Ton)
Algers, IN Campbells, IN 530 Railroad
Ayrcoe, IN " 470 Private
Enosville, IN *Indianapolis, IN 660 Railroad
Oakland City
Jct., IN * " 560 Private
Winslow, IN Petersburg, IN 185 Railroad
" 141 Private
* Conrail will absorb not to exceed fifty ($50.00) dollars per car of
switching charge assessed by the Indiana Rail Road Company (INRD)
or its successors on traffic to the E. W. Stout generating station
of IPL, Indianapolis, IN.
<PAGE>
AMENDMENT NO. 1 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
This Amendment to Conrail Contract ICC-CR-C-4553 made and entered
into the 1st day of November, 1988 is by and between CONSOLIDATED RAIL
CORPORATION (hereinafter "CR" or "Conrail"), a Pennsylvania corporation,
and INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter "IPL" or
"Consignee"), an Indiana corporation.
I. The parties hereby agree to revise Sections as shown herein
to read as follows:
4. ADJUSTMENTS: During the term of this Contract, rates named
herein will be adjusted only in the following manner:
A. Commencing with October 1, 1987 and continuing during
the term of this Contract, on each January 1, April 1, July 1, October 1
thereafter, the rates shall be adjusted (increased or decreased) based on
changes in the Rail Cost Adjustment Factor (hereinafter RCAF) filed under
the procedures of Ex Parte 290 (Sub. No. 2), Railroad Cost Recovery
Procedures, including all amendments to said procedures, as adopted and
approved by the ICC. However, in no event shall rates be any less than
those offered on the effective date of this Contract. If rates are
subsequently established by amendment to this Contract, in no event shall
rates be less than those offered on the effective date of such amendment.
On the first day of each calendar quarter, the RCAF for
the coming quarter will be divided by the RCAF for the immediately
preceding quarter. Rates of the immediately preceding quarter will be
multiplied by the resulting factor to produce rates and charges for the
new quarter.
B. No. change from original Contract.
C. No. change from original Contract.
D. No. change from original Contract.
7. SERVICE, EQUIPMENT AND MINIMUM WEIGHTS:
A. Conrail and AWW agree to transport bituminous coal
provided for IPL by its coal suppliers from origins named herein to
destinations named herein in accordance with the terms of Attachment A as
may be amended, and Attachment B, respectively, and to provide related
transportation services with reasonable dispatch. Conrail or its
successors, or permitted assigns shall provide such transportation
service between points shown in Attachment A to this Contract, as may be
amended, through January 31, 1998, or the termination of this Contract,
whichever occurs earlier.
B. No change from original Contract.
C. No change from original Contract.
D. No change from original Contract.
E. No change from original Contract.
F. No change from original Contract.
G. No change from original Contract.
H. No change from original Contract.
I. No change from original Contract.
J. No change from original Contract.
II. The parties, by their signature of this Contract Amendment,
and intending to be legally bound, hereby expressly indicate that all of
the provisions of the original Contract, except as otherwise provided
herein, remain in full force and effect and that such provisions,
together with this Amendment, constitute the entire agreement between the
parties. (AWW does not participate in the provision of service covered
by this Amendment and shall not be furnished a copy hereof.)
IN WITNESS WHEREOF, and intending to be legally bound, the parties
hereto have caused this Amendment to be executed by their duly authorized
representatives on the date first written above.
INDIANAPOLIS POWER & LIGHT CONSOLIDATED RAIL CORPORATION
COMPANY
BY: /s/ Robert W. Hill By: /s/ Charlie Marshall
TITLE: President TITLE: Sr. Vice President -
Marketing & Sales
<PAGE>
AMENDMENT NO. 1 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
AMENDMENT TO ATTACHMENT A - RATES FROM CONRAIL ORIGINS
(This will not be furnished to AWW, as AWW does not participate
in the provision of service covered by rates named herein.)
All of the provisions of Attachment A to original Contract, except
as expressly provided herein, remain in full force and effect, and such
provisions, together with this Amendment, constitute the entire agreement
between the parties concerning rates from Conrail origins.
ADJUSTMENT OF RATES: Rates in original Contract are subject to
quarterly adjustment as provided in Section 4 of
this Contract, effective with October 1, 1987.
Rates in this Amendment (Amendment No. 1 -
Attachment A) are subject to quarterly adjustment
as provided in Section 4 of this Contract
effective with October 1, 1988.
Origin Origin Rates Car Ownership
(In Cents/NT)
ADD:
Rio Grande Campbells, IN 440 Railroad
Mine, IN " 340 Private
" *Indianapolis, IN 435 Railroad
" 295 Private
* See explanation of "*" in Attachment A to original Contract
<PAGE>
The provisions published herein will, if effective, not result in an
effect on the quality of the human environment.
_________________________________________________________________
AMENDMENT 2
TO
ICC CR-C-4553
_________________________________________________________________
CONSOLIDATED RAIL CORPORATION
______________________
AMENDED CONTRACT SUMMARY
_____________________
_________________________________________________________________
ISSUED AUGUST 4, 1989 EFFECTIVE AUGUST 5, 1989
THE ONLY CHANGE IS TO THE CONFIDENTIAL MATTER OF THE CONTRACT.
_________________________________________________________________
ISSUED BY:
H. A. TRAUTMANN, JR.
Manager - Tariff Publications
SIX PENN CENTER
PHILADELPHIA, PA. 19103
_________________________________________________________________
Filed with ICC
(C-2118-2-MJ) (32) (PRINTED IN USA)
_________________________________________________________________
<PAGE>
_________________________________________________________________
AMENDMENT 2 TO ICC CR-C-4553
_________________________________________________________________
SUBJECT APPLICATION
_________________________________________________________________
PARTICIPATING
CARRIER. . . . . Consolidated Rail Corporation.
_________________________________________________________________
COMMODITY. . . . Bituminous Coal (STC 11 212), for other than
Metallurgical or Coking purposes.
_________________________________________________________________
ORIGIN/DES-
TINATION
STATIONS. . . . Not Applicable.
_________________________________________________________________
PORT NAME. . . . Not Applicable.
_________________________________________________________________
Application Date (EX-387): January 20, 1989.
Date Service Began October 5, 1987.
DURATION OF Effective August 5, 1989.
CONTRACT. . . . Expires with January 31, 1998, except
Amendment No. 2 which expires with
August 20, 1989.
_________________________________________________________________
ROUTE
MILEAGES. . . . Not Applicable.
_________________________________________________________________
EQUIPMENT
COVERED. . . . No Dedicated Equipment.
_________________________________________________________________
BASE RATE. . . Not Applicable.
_________________________________________________________________
SPECIAL
FEATURES. . . . Not Applicable.
_________________________________________________________________
- 2 -
(THE END)
_________________________________________________________________
<PAGE>
AMENDMENT NO. 2 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
This Amendment to Conrail Contract ICC-CR-C-4553 made and entered
into the 2nd day of August, 1989 is by and between CONSOLIDATED RAIL
CORPORATION (hereinafter "CR" or "Conrail"), a Pennsylvania corporation,
and INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter "IPL" or
"Consignee"), an Indiana corporation.
I. The parties hereby agree to revise Sections as shown herein
to read as follows:
1. TERM OF AGREEMENT: Performance under this Contract shall
begin with the date of filing with the Interstate Commerce Commission
(ICC), subject to the conditions of 49 CFR 1313.2 and 1313.3. Unless
terminated earlier in accordance with the provisions herein, this
Contract shall remain in effect through January 31, 1998.
The parties agree that, once this Amendment is approved by
the ICC, the terms and conditions contained herein shall apply to
shipments made pursuant to this agreement as of January 20, 1989. If
this Amendment is not approved by the ICC, the parties agree that rates
absent this agreement will apply. This Amendment shall remain in effect
through August 20, 1989, or upon notification by Conrail to IPL that
consignor or consignee scales have been approved by Conrail, whichever
occurs first. Rates effective with this Amendment are shown in
"AMENDMENT TO ATTACHMENT A", attached hereto.
II. The parties, by their signature of this Contract Amendment,
and intending to be legally bound, hereby expressly indicate that all of
the provisions of the original Contract and Amendment No. 1 thereto,
except as otherwise provided herein, remain in full force and effect and
that such provisions, together with this Amendment, constitute the entire
agreement between the parties. (AWW does not participate in the
provision of service covered by this Amendment and shall not be furnished
a copy hereof.)
IN WITNESS WHEREOF, and intending to be legally bound, the parties
hereto have caused this Amendment to be executed by their duly authorized
representatives on the date first written above.
INDIANAPOLIS POWER & LIGHT CONSOLIDATED RAIL CORPORATION
COMPANY
BY: /s/ R. W. Hill BY: /s/ W. G. Barber
TITLE: Chairman and President TITLE: Assistant Vice
President
Coal, Coke &
Iron Ore Sales
and Marketing
<PAGE>
AMENDMENT NO. 2 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
AMENDMENT TO ATTACHMENT A - RATES FROM CONRAIL ORIGINS
(This will not be furnished to AWW, as AWW does not participate in the
provision of service covered by rates named herein.)
All of the provisions of Attachment A to original Contract and
Amendment No. 1 thereto, except as expressly provided herein, remain in
full force and effect, and such provisions, together with this Amendment,
constitute the entire agreement between the parties concerning rates from
Conrail origins.
TERM: Effective January 20, 1989. Expires with August 20, 1989, or upon
notification by Conrail to IPL that consignor or consignee has
railroad-approved scale, whichever occurs first.
ADJUSTMENT OF RATES: Rates in original Contract are subject to
quarterly adjustment as provided in Section 4 of
this Contract, effective with October 1, 1987.
Rates in Amendment No. 1 are subject to quarterly
adjustment as provided in Section 4 of this
Contract effective with October 1, 1988. Rates
in this Amendment (Amendment No. 2) are not
subject to any quarterly adjustment.
Origin Destination Rates Car Ownership
(In $ Per Car)
ADD:
Rio Grande Campbells, IN 444 Railroad
Mine, IN " 343 Private
" *Indianapolis, IN 439 Railroad
" " 297 Private
(1) Section 12 of original Contract, "WEIGHING:" will not apply.
ROUTE: Conrail Direct
<PAGE>
The provisions published herein will, if effective, not result in an
effect on the quality of the human environment.
_________________________________________________________________
AMENDMENT 3
TO
ICC CR-C-4553
_________________________________________________________________
CONSOLIDATED RAIL CORPORATION
______________________
AMENDED CONTRACT SUMMARY
_____________________
_________________________________________________________________
ISSUED AUGUST 4, 1989 EFFECTIVE AUGUST 5, 1989
THE ONLY CHANGE IS TO THE CONFIDENTIAL MATTER OF THE CONTRACT.
_________________________________________________________________
ISSUED BY:
H. A. TRAUTMANN, JR.
Manager - Tariff Publications
SIX PENN CENTER
PHILADELPHIA, PA. 19103
_________________________________________________________________
Filed with ICC
(C-2117-2-MJ) (32) (PRINTED IN USA)
_________________________________________________________________
<PAGE>
_________________________________________________________________
AMENDMENT 3 TO ICC CR-C-4553
_________________________________________________________________
SUBJECT APPLICATION
_________________________________________________________________
PARTICIPATING Algers, Winslow and Western Railway Company;
CARRIER. . . . . Consolidated Rail Corporation;
The Indiana Rail Road Company.
_________________________________________________________________
COMMODITY. . . . Bituminous Coal (STC 11 212), for other than
Metallurgical or Coking purposes.
_________________________________________________________________
ORIGIN/DES-
TINATION
STATIONS. . . . Not Applicable.
_________________________________________________________________
PORT NAME. . . . Not Applicable.
_________________________________________________________________
Date Service Began October 5, 1987.
DURATION OF Effective August 5, 1989.
CONTRACT. . . . Expires with January 31, 1998.
_________________________________________________________________
ROUTE
MILEAGES. . . . Not Applicable.
_________________________________________________________________
EQUIPMENT
COVERED. . . . No Dedicated Equipment.
_________________________________________________________________
BASE RATE. . . Not Applicable.
_________________________________________________________________
SPECIAL
FEATURES. . . . Not Applicable.
_________________________________________________________________
- 2 -
(THE END)
_________________________________________________________________
<PAGE>
AMENDMENT NO. 3 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
This Amendment to Conrail Contract ICC-CR-C-4553 made and entered
into the 1st day of August, 1989 is by and between CONSOLIDATED RAIL
CORPORATION (hereinafter "CR", "Conrail" or "Railroad"), a Pennsylvania
corporation, ALGERS, WINSLOW AND WESTERN RAILWAY COMPANY (hereinafter
"AWW" or "Railroad"), an Indiana corporation, THE INDIANA RAIL ROAD
COMPANY (hereinafter "INRD" or "Railroad"), an Indiana corporation and
INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter "IPL" or "Consignee"), an
Indiana corporation. CR, AWW and INRD are hereinafter collectively
referred to as "Carriers" or "Railroads".
I. The parties hereby agree that INRD, upon the effective date
of this Amendment, shall become a party to this Contract the same as if
INRD had been a party to the original Contract, except for provisions
contained in Attachments A and B to Contract as may be amended.
II. The parties hereby agree that INRD shall be furnished a copy
of original Contract, except for Attachments A and B.
III. The parties hereby agree to revise the fourth (4th) "WHEREAS"
clause on Page 1 of original Contract to read as follows:
WHEREAS, CR, AWW and INRD are willing and able to provide
transportation services of such coal;
IV. The parties hereby agree to revise Sections as shown herein
to read as follows:
4. ADJUSTMENTS: During the term of this Contract, rates named
herein will be adjusted only in the following manner:
A. Commencing with October 1, 1987, except as shown in
ATTACHMENTS A and C, as amended, and continuing during the term of this
Contract, on each January 1, April 1, July 1, October 1 thereafter, the
rates shall be adjusted (increased or decreased) based on changes in the
Rail Cost Adjustment Factor (hereinafter RCAF) filed under the procedures
of Ex Parte 290 (Sub. No. 2), Railroad Cost Recovery Procedures,
including all amendments to said procedures, as adopted and approved by
the ICC. However, in no event shall rates be any less than those offered
on the effective date of this Contract. If rates are subsequently
established by amendment to this Contract, in no event shall rates be
less than those offered on the effective date of such amendment.
On the first day of each calendar quarter, the RCAF for
the coming quarter will be divided by the RCAF for the immediately
preceding quarter, rounded to three decimal places. Rates of the
immediately preceding quarter will be multiplied by the resulting factor
and rounded to the nearest whole cent, to produce rates and charges for
the new quarter.
B. (No change from original Contract.)
C. (No change from original Contract.)
D. (No change from original Contract.)
7. SERVICE, EQUIPMENT AND MINIMUM WEIGHTS:
A. Conrail, AWW and INRD agree to transport bituminous
coal provided for IPL by its coal suppliers from origins named herein to
destinations named herein in accordance with the terms of Attachments A,
B and C, as may be amended, and to provide related transportation
services with reasonable dispatch. Conrail or its successors, or
permitted assigns shall provide such transportation service between
points shown in Attachment A to this Contract, as may be amended, through
January 31, 1998, or the termination of this Contract, whichever occurs
earlier.
B. (No change from original Contract.)
C. Movements of consignments under this Contract will be
scheduled by Conrail when from Conrail and AWW origins, and by Conrail
and INRD when from Conrail and INRD origins. IPL shall provide Conrail's
General Manager, Indianapolis Division, 31 E. Georgia Street,
Indianapolis, IN 46204, and INRD's Vice President/General Manager, P. O.
Box 2464, Indianapolis, IN 46206-2464, or such other office as Conrail or
INRD may designate, at least seven (7) days before the end of each
calendar month, sufficient information in writing to enable Conrail and
INRD to schedule movement of such consignments for the next calendar
month. Information shall include origin, destination, loading date and
equipment ownership, tonnage, and number of cars required for each
consignment. By Wednesday of each week IPL shall provide telephone
confirmation of the above information to Railroads with any changes
necessary to facilitate movement of consignment for the following week.
Conrail or INRD may change their notification requirements during the
term of this Contract, but may not do so if such change adversely affects
IPL. Conrail, AWW, and INRD shall exercise their best efforts to move
consignments as requested by IPL but cannot guarantee that scheduled
dates and times will be observed. Conrail, AWW and INRD shall inform IPL
of inability to comply with IPL's request as far in advance as
practicable. If a cancellation order is received less than eight (8)
hours before scheduled time and date of placement of empty cars at origin
mine, or after actual placement of empty cars at origin mine, a charge of
five hundred dollars ($500.00) per consignment cancellation subject to
adjustment pursuant to Section 4, will be assessed.
D. (No change from original Contract.)
E. When rates in this Contract apply to privately-owned or
leased equipment, Conrail, AWW or INRD have no obligation to supply the
equipment specified to be privately-owned or leased for such rates. This
Contract is not subject to the provisions of Tariff ICC PHJ 6007 Series
or Tariff ICC CR 9337 Series.
F. If cars furnished by IPL, or the consignor, are unserviceable
because of damage or destruction caused by Conrail, AWW or INRD
performing service under this Contract, Conrail, AWW or INRD must furnish
written notification to IPL, or consignor, that its cars (designating
them by car initial and number) were damaged or destroyed on (month-day-
year) and will upon written request by IPL, or consignor, furnish
standard railroad-owned cars of like capacity, if available, until such
time as the damaged car or cars are repaired or replaced, but only for a
period not exceeding 150 days after damage or destruction occurred, after
which time the railroad-owned car or cars shall be returned to Conrail,
AWW or INRD and the provisions of this Paragraph will no longer apply to
such car or cars. Railroad-owned cars furnished to IPL, or consignor,
under provisions of this Paragraph will be furnished without charge.
For the purpose of this Contract each substitute car or cars
will be considered as being furnished by IPL, or the consignor.
IPL, or consignor, shall confirm request for the substitution
of railroad-owned, or consignor-owned, cars within thirty (30) days of
the date damage or destruction occurred to IPL-owned cars and shall
furnish a certificate stating:
"This is to certify that on (month-day-year) the following
cars (list car numbers) were destroyed or damaged and are
being taken out of service to be either repaired or
replaced."
G. Rates named in this Contract will apply only on cars with an
official capacity of 196,000 pounds or more, except that rates applicable
in cars of railroad ownership will also apply when railroad furnishes
cars having a lower official capacity. Official capacity is that shown
in the Universal Machine Language Equipment Register (UMLER) File
maintained by the Association of American Railroads.
H. Minimum weight per car shall be ninety (90%) percent of the
official capacity of each car. Weights will be determined as provided in
Section 12 of this Contract.
I. For all movements of bituminous coal named in this Contract,
except from Lynnville Mine, IN to Petersburg, IN, minimum trainload
consignment is 5,000 tons, except when consignment consists of 50 or more
cars with official capacity of 196,000 pounds or more, then minimum
trainload consignment shall be 90% of official capacity of all cars in
the consignment.
J. All tonnage for inclusion in a trainload consignment shall be
tendered to Conrail, AWW or INRD on one bill of lading on one day, at one
time from one consignor at one origin, to one IPL destination at
Campbells, Indianapolis, or Petersburg, IN. Oakland City Junction, IN on
the AWW will be the designated assembly point for shipments originating
at all stations on the AWW.
If less than the minimum trainload consignment required in
connection with rates named in this Contract is tendered for shipment,
charges will be based on the minimum consignment applicable in connection
with such rates, or on actual rates published in tariffs on file with the
Interstate Commerce Commission, whichever is lower.
8. FORCE MAJEURE: In the event that any part is unable to
perform as stated in this Contract due to or as a result of one or more
of the following causes: Act of God, including, but not limited to
floods, storms, earthquakes, hurricanes, tornadoes, or other severe
weather or climatic conditions; destruction or breakdown of loading or
unloading facilities, mining equipment or plant facilities vital to coal
loading or unloading operations or the mining, transportation or plant
operations of a coal producer, CR, AWW, INRD or IPL not reasonably
preventable by routine or periodic maintenance; act of public enemy, war,
blockade, insurrection riot, vandalism or sabotage; fire, accident,
wreck, derailment, washout or explosion; strike, lockout or labor
dispute, embargoes or AAR service orders; or governmental laws, orders or
regulations, including orders or regulations of environmental agencies,
this Contract shall be suspended at the affected origin and/or
destination only insofar as said origin and/or destination is affected by
described disability and only for the duration of such disability. Any
absolute amount of volume commitment which is included in this Contract
shall be reduced proportionately for each day or portion thereof, or
disability under this Section.
The term Force Majeure shall mean any such cause which is not
reasonably within the control of the party asserting the Force Majeure,
or its employees or agents, including coal producers, affecting its
performance under this Contract and the adverse effects of which are not
due to the fault of negligence of said party, employee, agent or persons
with whom it has such contracts.
The party experiencing the Force Majeure shall use due
diligence to remove such cause of Force Majeure as may occur and its
performance shall be resumed hereunder.
The party experiencing the disability will send written
notice to the other parties to this Contract, stating the Contract Number
and the location and nature of such disability, and will act to cure the
disability as quickly as possible. This notice shall be sent within ten
(10) days of the beginning of the disability. Written notice shall also
be sent within ten (10) days of the end of such disability.
10. RATES: Conrail shall transport bituminous coal from origins
named in Attachment A to this Contract to destinations named in
Attachment A of this Contract. Conrail and AWW shall transport
bituminous coal from origins named in Attachment B to this Contract to
destinations named in Attachment B to this Contract. Conrail and INRD
shall transport bituminous coal from origins in Attachment C to this
Contract to destinations named in Attachment C to this Contract. IPL
agrees to pay rates and/or charges named in Attachments A, B and C. (AWW
does not participate in the provisions of service covered by rates named
in Attachments A or C; thus disclosure of such rates shall not be made to
AWW. INRD does not participate in the provisions of service covered by
rates named in Attachments A or B; thus disclosure of such rates shall
not be made to INRD.)
11. LOADING, UNLOADING, PLACEMENT AND DETENTION:
A. Origin: Governed by provisions of Tariff ICC CR-9109,
or successive issues thereof, when on Conrail.
Governed by provisions of Tariff ICC PHJ 6008-Q, Item
646, Part A, or successive issues thereof, when on AWW.
Governed by provisions of Tariff ICC INRD 4000-A, or
successive issues thereof, when on the INRD.
B. Destination: (No change from original Contract.)
12. WEIGHING:
A. Weights for billing purposes will be based upon weights
determined by IPL or consignor, from Conrail, AWW or INRD approved
scales.
B. In the event of an emergency, where weights as
described in Section 12.A are not available, an average cubical weight
factor will be established through use of historical actual weights of
coal from the specific origin, using the last three most recent
shipments.
C. Rates in this Contract do not include weighing service
by Conrail, AWW or INRD, except as provided in Section 12.D herein. If
weighing service is requested by IPL or consignor, an entire shipment
must be weighed at a charge of 38 cents per net ton (subject to
adjustment under Section 4 of this Contract) and the party making the
request will be charged for weighing of the entire shipment.
D. Conrail, AWW or INRD, at their sole option and
convenience, may weigh shipments in lieu of calculating average or
estimated weights under Section 12.B.
13. NOTICE PROVISION: Except as otherwise provided in this
Contract, notices, statements, etc., which are required or permitted to
be given under this Contract shall be sent to the parties identified
below, or to such parties as Conrail, AWW, INRD or IPL may later
identify:
If to Conrail: If to IPL:
Manager, Transportation Contracts Vice President-Fuel Supply
Consolidated Rail Corporation Indianapolis Power & Light
Room 945, One Liberty Place Company
1650 Market Street P. O. Box 1595B
Philadelphia, PA 19103-7399 Indianapolis, IN 46206
and If to AWW:
Manager, Coal Marketing-Utility General Manager
Consolidated Rail Corporation Algers, Winslow and Western
Room 1126, One Liberty Place Railroad Company
1650 Market Street Route 2, P. O. Box 188
Philadelphia, PA 19103-7399 Oakland City, IN 47660
If to INRD:
The Indiana Rail Road Company
Senate Avenue Terminal
Box 2464
Indianapolis, IN 46206-2464
Attn: General Manager
21. TARIFF PUBLICATION: Unless the parties agree to extend the
term of this Contract or enter into a new Contract, at the end of the
term of this Contract or the earlier termination of this Contract, CR,
AWW and INRD shall upon sixty (60) days written notice from IPL file and
publish a tariff or tariffs to meet the then existing transportation
requirements of IPL at the then existing rates covering all movements
specified in Attachments A, B and C, which tariff(s) shall become
effective January 31, 1998 or upon the termination of this Contract,
whichever date occurs earlier, and shall be applicable for a minimum of
ninety (90) days following the termination or expiration of this
Contract.
V. The parties, by their signature of this Contract Amendment,
and intending to be legally bound, hereby expressly indicate that all of
the provisions of the original Contract, as amended, except as otherwise
provided herein, remain in full force and effect and that such
provisions, together with this Amendment, constitute the entire agreement
between the parties. (AWW and INRD do not participate in the provision
of service covered by Amendment No. 1 and Amendment No. 2; thus Amendment
No. 1 and Amendment No. 2 shall not be furnished to AWW or INRD.)
IN WITNESS WHEREOF, and intending to be legally bound, the parties
hereto have caused this Amendment to be executed by their duly authorized
representatives on the date first written above.
INDIANAPOLIS POWER & LIGHT CONSOLIDATED RAIL CORPORATION
COMPANY
BY: /s/ R. W. Hill BY: /s/ Charlie Marshall
TITLE: Chairman and President TITLE: Sr. Vice President -
Marketing & Sales
ALGERS, WINSLOW AND WESTERN THE INDIANA RAIL ROAD COMPANY
RAILWAY COMPANY (Not a party to Attachments A
(Not a party to Attachments or B, hereto)
A or C, hereto)
BY: /s/ Robert A. Shaw BY: /s/ Thomas G. Hoback
TITLE: Gen. Mgr. TITLE: President & C.E.O.
<PAGE>
AMEND THE HEADINGS OF ATTACHMENT A, AMENDMENT TO ATTACHMENT A,
AND ATTACHMENT B, TO READ AS SHOWN BELOW:
TRANSPORTATION CONTRACT ICC-CR-C-4553
ATTACHMENT A - RATES FROM CONRAIL ORIGINS
(This will not be furnished to AWW or INRD, as AWW and INRD do not
participate in the provision of service covered by rates named herein)
- -----------------------------------------------------------------
AMENDMENT NO. 1 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
AMENDMENT TO ATTACHMENT A - RATES FROM CONRAIL ORIGINS
(This will not be furnished to AWW or INRD, as AWW and INRD do not
participate in the provision of service covered by rates named herein)
- -----------------------------------------------------------------
TRANSPORTATION CONTRACT ICC-CR-C-4553
ATTACHMENT B - RATES FROM AWW ORIGINS
(This will not be furnished to INRD, as INRD does not participate in the
provision of service covered by rates named herein.
- -----------------------------------------------------------------
<PAGE>
AMENDMENT NO. 3 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
ATTACHMENT C - RATES FROM INRD ORIGINS
(This will not be furnished to AWW, as AWW does not participate in the
provision of service covered by rates named herein.)
Customer Name: Indianapolis Power & Light Company
Customer Status: Receiver
Adjustment of Rates: Rates are subject to quarterly adjustment as
provided in Section 4 of this Contract, effective
with October 1, 1989.
Volume: One hundred thousand (100,000) tons per year as
further described in Notes 1, 2 and 3.
Commodity
STCC Route Equipment Type Min. Wt. Per Car
Bituminous INRD-Switz Open Top Hopper As provided in
Coal City, IN- Cars as provided Section 7 of
112 Conrail in Section 7 of Contract
Contract
Origin Destination Rates Car Ownership
(In cents/NT)
Dugger, IN ) Campbells, IN 474 Railroad
) " 370 Private
) Indianapolis, IN 556 Railroad
) " 491 Private
) Petersburg, IN 427 Railroad
" 373 Private
Explanation of Notes:
Note 1: IPL agrees that in each contract year, except as shown in
Note 2, it will ship or cause to be shipped, subject to the
provisions of this Contract, not less than one hundred
thousand (100,000) tons of bituminous coal between origins
and destinations described in Attachment C.
Note 2: The provisions of Note 1 will not apply until the first
contract year following the first shipment made under this
Attachment. During the first calendar year in which a
shipment is made under this Attachment the volume requirement
shall be determined by multiplying 274 tons by the number of
days remaining in that calendar year commencing with the date
of the first shipment. During the last contract year, IPL
agrees that it will ship or cause to be shipped not less than
one hundred eight thousand (108,000) tons of bituminous coal.
Note 3: If IPL fails to ship, or causes to be shipped, during any
contract year or calendar year as specified in Notes 1 and 2,
the volume specified in Notes 1 and 2 (whichever is
applicable), subject to adjustment pursuant to Section 8 of
this Contract, as amended. IPL shall pay Conrail $2.04 per
net ton for each ton of shortfall, subject to adjustment
under Section 4 of this Contract effective with October 1,
1989.
<PAGE>
The provisions published herein will, if effective, not result in an
effect on the quality of the human environment.
_________________________________________________________________
AMENDMENT 4
TO
ICC CR-C-4553
_________________________________________________________________
CONSOLIDATED RAIL CORPORATION
______________________
AMENDED CONTRACT SUMMARY
_____________________
_________________________________________________________________
ISSUED JULY 31, 1990 EFFECTIVE AUGUST 1, 1990
THE ONLY CHANGE IS TO THE CONFIDENTIAL MATTER OF THE CONTRACT.
_________________________________________________________________
ISSUED BY:
A. J. McGEE, JR.
Manager - Tariff Publications
SIX PENN CENTER
PHILADELPHIA, PA. 19103
_________________________________________________________________
Filed with ICC
(C-1998-2-JEC) (22) (PRINTED IN USA)
_________________________________________________________________
<PAGE>
_________________________________________________________________
AMENDMENT 4 TO ICC CR-C-4553
_________________________________________________________________
SUBJECT APPLICATION
_________________________________________________________________
PARTICIPATING
CARRIER. . . . . Consolidated Rail Corporation.
The Indiana Rail Road Company.
_________________________________________________________________
COMMODITY. . . . Bituminous Coal (STC 11 212), for other than
Metallurgical or Coking purposes.
_________________________________________________________________
ORIGIN/DES-
TINATION
STATIONS. . . . Not Applicable.
_________________________________________________________________
PORT NAME. . . . Not Applicable.
_________________________________________________________________
Application Date (EX-387); August 7,
DURATION OF 1989 and April 1, 1990. Date Service
CONTRACT. . . . Began October 5, 1987. Effective
August 1, 1990. Expires with
January 31, 1998.
_________________________________________________________________
ROUTE
MILEAGES. . . . Not Applicable.
_________________________________________________________________
EQUIPMENT
COVERED. . . . No Dedicated Equipment.
_________________________________________________________________
BASE RATE. . . Not Applicable.
_________________________________________________________________
SPECIAL
FEATURES. . . . Not Applicable.
_________________________________________________________________
- 2 -
(THE END)
_________________________________________________________________
<PAGE>
AMENDMENT NO. 4 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
This Amendment to Conrail Contract ICC-CR-C-4553 made and entered
into the 30th day of July, 1990 is by and between CONSOLIDATED RAIL
CORPORATION (hereinafter "CR", "Conrail" or "Railroad"), a Pennsylvania
corporation, THE INDIANA RAIL ROAD COMPANY (hereinafter "INRD" or
"Railroad"), and INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter "IPL" or
"Consignee"), an Indiana corporation.
I. The parties hereby agree to revise Sections as shown herein
to read as follows:
1. TERM OF AGREEMENT: Performance under this Contract shall
begin with the date of filing with the Interstate Commerce Commission
(ICC), subject to the conditions of 49 CFR 1313.2 and 1313.3. Unless
terminated earlier in accordance with the provisions herein, this
Contract shall remain in effect through January 31, 1998.
The parties agree that, once this Amendment is approved by
the ICC, the terms and conditions contained herein shall apply to
shipments made pursuant to this agreement as of August 7, 1989 and April
1, 1990. If this Amendment is not approved by the ICC, the parties agree
that rates absent this agreement will apply. This Amendment shall remain
in effect through July 31, 1992. Rates effective with this Amendment are
shown in "ATTACHMENT C (AMENDED)," attached hereto.
II. The parties, by their signature of this Contract Amendment,
and intending to be legally bound, hereby expressly indicate that all of
the provisions of the original Contract, Amendment No. 1 and Amendment
No. 3 thereto, except as otherwise provided herein, remain in full force
and effect and that such provisions, together with this Amendment,
constitute the entire agreement between the parties. (AWW does not
participate in the provision of service covered by this Amendment and
shall not be furnished a copy hereof.)
IN WITNESS WHEREOF, and intending to be legally bound, the parties
hereto have caused this Amendment to be executed by their duly authorized
representatives on the date first written above.
INDIANAPOLIS POWER & LIGHT CONSOLIDATED RAIL CORPORATION
COMPANY
BY: /s/ R. L. Humke BY: /s/ R. A. Listwak
Ramon L. Humke
TITLE: President and Chief TITLE: Director - Coal
Operating Officer Marketing
THE INDIANA RAIL ROAD COMPANY
BY: /s/ Thomas G. Hoback
TITLE: President & C.E.O.
<PAGE>
AMENDMENT NO. 4 TO
TRANSPORTATION CONTRACT ICC-CR-C-4553
CHANGE ATTACHMENT C (AMENDMENT NO. 3) - TO READ AS FOLLOWS:
ATTACHMENT C (AMENDED) - RATES FROM INRD ORIGINS
(This will not be furnished to AWW, as AWW does not participate in the
provision of service covered by rates named herein.)
Customer Name: Indianapolis Power & Light Company
Customer Status: Receiver
Adjustment of Rates: Rates are subject to quarterly adjustment as
provided in Section 4 of this Contract, effective
as shown below.
Commodity
STCC Route Equipment Type Min. Wt. Per Car
Bituminous INRD-Switz Open Top Hopper As provided in
Coal City, IN- Cars as provided Section 7 of
112 Conrail in Section 7 of Contract
Contract
Per Car
Origin Destination Rates Unit Ownership
(In Dollars)
Dugger, IN Campbells, IN $4.74 (1)(5) Net Ton Railroad
" " 455.00 (2) Car "
" " 431.00 (3) Car "
" " 3.79 (1)(5) Net Ton Private
" " 369.00 (2) Car "
" " 363.00 (3) Car "
" Indianapolis, IN 5.56 (1)(5) Net Ton Railroad
" " 532.00 (4) Car "
" " 505.00 (3) Car "
Dugger, IN Indianapolis, IN 4.91 (1)(5) Net Ton Private
" " 488.00 (4) Car "
" " 482.00 (3) Car "
" Petersburg, IN 4.27 (1) Net Ton Railroad
" " 3.73 (1) Net Ton Private
<PAGE>
Explanation of References:
Rate Subject to Quarterly
Adjustment As Provided in
Section 4 of This Contract
(RCAF), With First Adjust- Rate
Ref. Rate Effective ment Effective on: Expires
(1) August 5, 1989 October 1, 1989 January 31, 1998
(2) August 7, 1989 October 1, 1989 July 31, 1990
(3) August 1, 1990 October 1, 1990 July 31, 1992
(4) April 1, 1990 July 1, 1990 July 31, 1990
(5) Rates subject to this reference (rates expressed in dollars per net
ton) will not apply while rates subject to references (2) and (3)
(rates expressed in dollars per car) are in effect.
Volume: One hundred thousand (100,000) tons per year as further
described in Notes 1, 2 and 3.
Explanation of Notes:
Note 1: IPL agrees that in each contract year, except as shown in
Note 2, it will ship or cause to be shipped, subject to the
provisions of this Contract, not less than one hundred
thousand (100,000) tons of bituminous coal between origins
and destinations described in Attachment C. For purposes of
volume calculation, each carload of bituminous coal shipped
from Dugger, IN to Campbells and Indianapolis, IN on a "per
car" rate shall be considered as containing 92.2 tons when in
railroad cars and 99.6 tons when in private cars.
Note 2: The provisions of Note 1 will not apply until the first
contract year following the first shipment made under this
Attachment. During the first calendar year in which a
shipment is made under this Attachment the volume requirement
shall be determined by multiplying 274 tons by the number of
days remaining in that calendar year commencing with the date
of the first shipment. During the last contract year, IPL
agrees that it will ship or cause to be shipped not less than
one hundred eight thousand (108,000) tons of bituminous coal.
Note 3: If IPL fails to ship, or causes to be shipped, during any
contract year or calendar year as specified in Notes 1 and 2,
the volume specified in Notes 1 and 2 (whichever is
applicable), subject to adjustment pursuant to Section 8 of
this Contract, as amended. IPL shall pay Conrail $2.04 per
net ton for each ton of shortfall, subject to adjustment
under Section 4 of this Contract effective with October 1,
1989.
EXHIBIT 10.6
Interconnection Agreement
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
INDIANA & MICHIGAN ELECTRIC COMPANY
Dated December 30, 1960
<PAGE>
CONTENTS
Article Page
Preamble.............................................. 1
1. Facilities to be Provided............................. 1
2. Provisions for, and Continuity of Interconnected...... 3
Operation
3. Services to be Rendered............................... 3
4. Service Conditions.................................... 4
5. Delivery Points, Metering Points and Metering......... 5
6. Records and Statements................................ 6
7. Billings and Payments................................. 6
8. Operating Committee................................... 6
9. Continuity of Service................................. 7
10. Duration of Agreement................................. 7
11. Arbitration........................................... 7
12. Regulatory Authorities................................ 8
13. Waivers............................................... 8
14. Assignment............................................ 8
Service Schedule
A Firm Power to Indianapolis Company........................ 9
B Emergency Service......................................... 13
C Coordination of Scheduled Maintenance of Generating....... 15
Facilities
D Energy Transfer........................................... 17
E Interchange Power......................................... 19
F Short Term Power.......................................... 21
<PAGE>
0.01 THIS AGREEMENT, dated this 30th day of December, 1960, between
INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an Indiana
corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana Company), also
an Indiana corporation,
W I T N E S S E T H,
T H A T:
0.02 WHEREAS, Indianapolis Company owns electric facilities and is
engaged in the generation, transmission, distribution, and sale of electric
power and energy in Indiana; and
0.03 WHEREAS, Indiana Company owns electric facilities and is engaged
in the generation, transmission, distribution, and sale of electric power
and energy in Indiana and Michigan; and
0.04 WHEREAS, Indianapolis Company and Indiana Company desire that
certain 345,000-volt transmission line facilities be provided and built so
as to establish a high capacity 345,000-volt interconnection between the
Indianapolis Company system and the Indiana Company system; and
0.05 WHEREAS, Indianapolis Company and Indiana Company desire to
avail themselves of the mutual benefits and advantages to be realized by
interconnected systems operation through such 345,000-volt interconnection;
and
0.06 WHEREAS, the parties desire to fix the terms and conditions upon
which such interconnection shall be provided and built and upon which the
furnishing of interconnection services shall be effected;
0.07 NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein set forth, the parties agree as follows:
ARTICLE 1
FACILITIES TO BE PROVIDED
Indiana Company
1.01 Indiana Company shall provide, own, and install, or cause to be
installed, at its own expense, the following described facilities; viz.:
1.011 A 345,000-volt single circuit steel tower transmission
line (hereby designated and herein called Tanners Creek-Hanna-De Soto
Line), approximately 138 miles in length, constructed with two 954,000
cm ACSR conductors per phase or with conductors of at least equivalent
conductivity and suitable ground wires, to extend in a generally
northerly direction from Indiana Company's Tanners Creek Station via
Indianapolis Company's proposed Hanna Substation, to be located in or
near Indianapolis, to Indiana Company's proposed De Soto Substation,
to be located near Muncie.
1.012 On the existing 345,000-volt double circuit steel tower
transmission line that extends from Tanners Creek Station to Indiana
Company's Sorenson Substation, a second 345,000-volt circuit to extend
from the proposed De Soto Substation to Sorenson Substation,
approximately 48 miles in length, with main conductors of not less
than 1.75 inches diameter 1,414,000 cm ACSR expanded conductor or of
equivalent conductivity and diameter.
1.013 At Tanners Creek Station, the necessary terminal
equipment, including facilities suitable for the three-terminal
control of the Tanners Creek-Hanna-De Soto Line described in
subsection 1.011 above and essential to the protection of line and
station equipment; such terminal equipment shall include one
345,000-volt ultra-high speed automatic reclosing circuit breaker,
appurtenant disconnecting and associated equipment, carrier current
relays and associated carrier current equipment and every item
required and suitable for the three-terminal control of said line and
for the coordination of such control with terminal equipment to be
provided by Indianapolis Company pursuant to subsection 1.021 below.
1.014 At Tanners Creek Station and other suitable locations,
such communication, telemetering, and load control facilities as shall
hereafter be determined by the parties as necessary for the proper and
efficient interconnected operation of the parties' systems.
Indianapolis Company
1.02 Indianapolis Company shall provide, own, and install, or cause
to be installed, at its own expense, the following described facilities;
viz.:
1.021 At Hanna Substation, the necessary terminal equipment,
including facilities suitable for the three-terminal control of the
Tanners Creek-Hanna-De Soto Line and essential to the protection of
line and station equipment; such terminal equipment shall include one
345,000/138,000-volt, three-phase auto-transformer having a nominal
rating of not less than 200,000 kilovolt-amperes, one 138,000-volt
ultra-high speed automatic reclosing circuit breaker, appurtenant
disconnecting and associated equipment, carrier current relays and
associated carrier current equipment, and every item required and
suitable for the three-terminal control of said line and for the
coordination of such control with terminal equipment to be provided by
Indiana Company pursuant to subsection 1.013 above.
1.022 At Hanna Substation, such suitable 138,000-volt metering
equipment as described in Section 5.03 below.
1.023 At Hanna Substation and other suitable locations, such
communication, telemetering, and load control facilities as shall
hereafter be determined by the parties as necessary for the proper and
efficient interconnected operation of the parties' systems.
Interconnection Point
1.03 The Interconnection Point shall be that point at Hanna
Substation where the terminal facilities provided therefor by Indianapolis
Company shall be connected to the Tanners Creek-Hanna-De Soto Line.
Facilities Obligations Common To The Parties
1.04 Subject to accidents, strikes, litigations, delays in securing
delivery of equipment or other similar or dissimilar causes beyond the
reasonable control of the parties, including the procuring of the necessary
materials and labor and the obtaining of all the necessary governmental
authorizations and permits approving the use of such labor and materials,
the installation of the facilities to be provided by the parties, as
hereinabove described, shall be completed and in service on or before May
31, 1963, and should the installation of said facilities be delayed beyond
said date due to the aforesaid causes it shall nevertheless be completed as
soon thereafter as practicable.
1.05 The parties shall cooperate with one another so as to assure the
maximum practicable coordination of design of the facilities to be installed
by each of them with new and existing facilities of the other.
Maintenance of Equipment
1.06 The parties shall each keep, or shall cause to be kept, the
lines, together with all associated equipment and appurtenances, described
in Article 1 that are located on their respective sides of the
Interconnection Point in a suitable condition of repair at all times, each
at its own expense, in order that said lines will operate in a reliable and
satisfactory manner and in order that reduction in the capacity of said
lines will be avoided to the extent practicable.
ARTICLE 2
PROVISIONS FOR, AND CONTINUITY OF INTERCONNECTED OPERATION
2.01 When the installation of the facilities as provided for under
Article 1 is completed, the systems of the parties shall be connected at the
Interconnection Point and thereafter throughout the duration of this
agreement, subject to the provisions of this Section 2.01, such systems
shall be operated in continuous synchronism through such line.
If
synchronous operation of the systems through such line becomes interrupted
either manually or automatically because of reasons beyond the control of
either party or because of scheduled maintenance that has been agreed to by
both parties, the parties shall cooperate so as to remove the cause of such
interruption as soon as practicable and restore such line to normal
operating condition. Neither party shall be responsible to the other party
for any damage or loss of revenue caused by any such interruption.
ARTICLE 3
SERVICES TO BE RENDERED
3.01 It is the purpose in general of the parties to seek and realize
all benefits practicable to be effected through coordination in the
operation and development of their respective systems. It is understood by
the parties that such benefits may be realized by them by carrying out under
stated terms and conditions various interconnection services and transactions
that may include among others:
the sale and purchase of firm power and associated energy,
the furnishing of mutual emergency and standby assistance,
the interchange, sale, and purchase of energy to effect
operating economies,
the coordination of maintenance schedules of generating and
transmission facilities,
the transfer of electric energy through the transmission system
of one party for the benefit of the other, and
the sale and purchase of short-term electric power and energy
available on the system of one party and needed on the system of the
other.
In furtherance of such purpose the parties shall appoint an Operating
Committee as provided under Article 8.
3.02 Inasmuch as the specific services to be rendered in furtherance
of such purpose will vary from time to time during the duration of this
agreement, and the terms and conditions applicable to such services may
require modification from time to time, it is intended that such specific
services and the terms and conditions applicable thereto will be set forth
in service schedules from time to time arranged between the parties. Such
service schedules upon agreement of the parties, initially by Section 3.03
below or subsequently by separate execution, shall become parts of this
agreement during the periods fixed by their respective duration.
3.03 The following service schedules are agreed to initially and
hereby made a part of this agreement:
Service Schedule A - Firm Power to Indianapolis Company
Service Schedule B - Emergency Service
Service Schedule C - Coordination of Scheduled Maintenance of
Generating Facilities
Service Schedule D - Energy Transfer
Service Schedule E - Interchange Power
Service Schedule F - Short Term Power
ARTICLE 4
SERVICE CONDITIONS
Control of System Disturbance
4.01 The parties shall maintain and operate their respective systems
so as to minimize, in accordance with sound operating practice, the
likelihood of disturbance originating in either system which might cause
impairment to the service of the system of the other party or of any system
interconnected with the system of the other party.
Control of Kilovar Exchange
4.02 It is the intent that neither party shall be obligated to
deliver kilovars for the benefit of the other party; also that neither party
shall be obligated to receive kilovars when to do so may introduce
objectionable operating conditions on its system. The Operating Committee
shall be responsible for the establishment from time to time of operating
procedures and schedules, in respect of carrying kilovar loads by one system
for the other in order to secure adequate service and economical use of the
facilities of both systems and in respect of proper charges, if any, for the
use of facilities carrying kilovar loads. In discharging such duties the
Operating Committee shall recognize that in the transmission and delivery of
power and energy hereunder the carrying of kilovar loads by either of the
parties, in harmony with sound engineering principles of transmission
operation with their systems interconnected, is subject to numerous
variables contingent upon loading and operating conditions existing
simultaneously on both of their systems. The operating procedures and
schedules so set up by the Operating Committee shall be in accord with such
principles and shall require each of the parties to carry kilovar loads at
such times and in such amounts as will be equitable to both parties.
Control of Unscheduled Power Deliveries
4.03 The parties shall exercise due diligence and foresight in
carrying out all matters related to the providing and operating of their
respective electric power resources so as to minimize to the extent
practicable deviations between actual and scheduled deliveries of electric
power and energy between their systems. The parties shall provide and
install on their respective systems such communication and telemetering
facilities as are essential to so minimizing such deviations; and, in
developing and executing operating procedures that will enable the parties
to avoid to the extent practicable deviations from scheduled deliveries,
shall fully cooperate with each other and with third parties whose systems
are either directly or indirectly interconnected with the systems of the
parties and who of necessity together with the parties must unify their
efforts cooperatively to achieve effective and efficient interconnected
operation. The parties recognize, however, that, despite their best efforts
to prevent the same, unscheduled deliveries of electric energy from one
party to the other may occur. Electric energy delivered hereunder in such
event shall be settled for either by the return of equivalent energy or by
payment of the out-of-pocket cost--such cost being as of the delivery point
or points, as provided for in Section 5.01 of this agreement, taking into
account electrical losses incurred from the source or sources of such energy
to said delivery point or points--to the supplying party of generating or
acquiring such energy plus ten per cent of such cost. If equivalent energy
is returned, it shall be returned at times when the load conditions of the
party receiving it are equivalent to the load conditions of such party at
the time the energy for which it is returned was delivered or, if such party
elects to have equivalent energy returned under different conditions, it
shall be returned in such amounts, to be agreed upon by the Operating
Committee, as will compensate for the difference in conditions.
ARTICLE 5
DELIVERY POINTS, METERING POINTS, AND METERING
Delivery Points
5.01 All electric energy delivered under this agreement shall be of
the character commonly known as three-phase sixty-cycle energy, and shall be
delivered at the Interconnection Point, as defined under Section 1.03 above,
at a nominal voltage of 345,000 volts and at such other points and voltages
as may be agreed upon by the parties.
Metering Points
5.02 Electric power and energy supplied and delivered under this
agreement shall be measured by suitable metering equipment provided, owned,
and maintained by Indianapolis Company at the metering point at hereinbelow
set forth; and at such other points, voltages, and ownership as may be
agreed upon by the parties; viz.:
5.021 In respect of the Interconnection Point by 138,000-volt
metering equipment installed at Hanna Substation.
Metering
5.03 Suitable metering equipment at the metering points as provided
in Section 5.02 above shall include electric meters, potential and current
transformers, and such other appurtenances as shall be necessary to give for
each direction of flow the following quantities: (1) a continuous
automatic graphic record of both kilowatts and kilovars, (2) an automatic
record of the kilowatt-hours for each clock hour, and (3) a continuous
integrating record of the kilowatt-hours.
5.04 Measurements of electric energy for the purpose of effecting
settlements under this agreement shall be made by standard types of electric
meters installed and maintained, unless otherwise provided for in this
agreement, by the owner at the metering points as provided under Section
5.02 above. The timing devices of all meters having such devices shall be
maintained in time synchronism as closely as practicable. The meters shall
be sealed and the seals shall be broken only upon occasions when the meters
are to be tested or adjusted. For the purpose of checking the records of
the metering equipment installed by one of the parties as hereinabove
provided, the other party shall have the right to install check metering
equipment at the aforesaid metering points. Metering equipment so installed
by one party on the premises of another party, unless otherwise provided for
in this agreement, shall be owned and maintained by the party installing
such equipment. Upon termination of this agreement the party owning such
metering equipment shall remove it from the premises of the other party.
Authorized representatives of both parties shall have access at all
reasonable hours to the premises where the meters are located and to the
records made by the meters.
5.05 The aforesaid metering equipment shall be tested by the owner at
suitable intervals and its accuracy of registration maintained in accordance
with good practice. On request of either party, a special test may be made
at the expense of the party requesting such special test. Representatives
of both parties shall be afforded opportunity to be present at all routine
or special tests and upon occasions when any readings, for purposes of
settlements hereunder, are taken from meters not bearing an automatic
record.
5.06 If at any test of metering equipment an inaccuracy shall be
disclosed exceeding two percent, the account between the parties for service
theretofore delivered shall be adjusted to correct for the inaccuracy
disclosed over the shorter of the following two periods: (1) for the
thirty-day period immediately preceding the day of the test or (2) for the
period that such inaccuracy may be determined to have existed. Should the
metering equipment as provided for under Section 5.03 above at any time fail
to register, the electric power and energy delivered shall be determined
from the check meters, if installed, or otherwise shall be determined from
the best available data.
ARTICLE 6
RECORDS AND STATEMENTS
Records
6.01 In addition to records of the metering provided for in Article 5
above, the parties shall keep in duplicate such other records as may be
needed to afford a clear history of the various deliveries of electric
energy made by one party to the other and of the clock-hour integrated
demands in kilowatt-hours delivered by one party to the other. In
maintaining such records, the parties shall effect such segregations and
allocations of demands and electric energy delivered into classes
representing the various services and conditions as may be needed in
connection with settlements under this agreement. The originals of all such
records shall be retained by the party keeping the records and the
duplicates shall be delivered monthly to the other party except as the
parties may agree upon a different time interval for such delivery.
Statements
6.02 As promptly as practicable after the end of each calendar month,
the parties shall cause to be prepared a statement setting forth the
electric power and energy transactions between the parties during such month
in such detail and with such segregations as may be needed for operating
records or for settlements under the provisions of this agreement.
ARTICLE 7
BILLINGS AND PAYMENTS
7.01 All bills for amounts owed by one party to the other shall be
due and payable on the fifteenth day of the month next following the monthly
or other period to which such bills are applicable, or on the tenth day
following receipt of bill, whichever date be later. Interest on unpaid
amounts shall accrue at the rate of six per cent per annum from the date due
until the date upon which payment is made. Unless otherwise agreed upon a
calendar month shall be the standard monthly period for the purposes of
settlements under this agreement.
ARTICLE 8
OPERATING COMMITTEE
8.01 To coordinate the operation of their respective generating,
transmission, and substation facilities, in order that the advantages to be
derived hereunder may be realized by the parties to the fullest practicable
extent, the parties shall establish a committee of authorized
representatives to be known as the Operating Committee. Each of the parties
shall designate in writing delivered to the other party, the person who is
to act as its representative on said committee (and the person or persons
who may serve as alternate whenever such representative is unable to act).
Such representative and alternate or alternates shall each be persons
familiar with the generating, transmission, and substation facilities of the
system of the party by which he has been so designated, and each shall be
fully authorized (1) to cooperate with the other representative (or
alternates) and (2) from time to time as the need arises, subject to the
declared intentions of the parties herein set forth and to the terms hereof
and the terms of any other agreements then in effect between the parties, to
determine and agree upon the following:
8.011 All matter pertaining to the coordination of maintenance
of the generating and transmission facilities of the parties.
8.012 All matters pertaining to the control of time, frequency,
energy flow, kilovar exchange, power factor, voltage, and other
similar matters bearing upon the satisfactory synchronous operation of
the systems of the parties.
8.013 Such other matters not specifically provided for herein
upon which cooperation, coordination, and agreement as to quantity,
time, method, terms and conditions are necessary in order that the
operation of the systems of the parties may be coordinated to the end
that the potential savings will be realized to the fullest practicable
extent that is agreed upon by the parties.
8.02 For the purpose of inspection and reading of meters, checking of
records, and all other pertinent matters, said representatives and their
alternates shall have the right of entry to all property of the parties used
in connection with the performance of this agreement.
ARTICLE 9
CONTINUITY OF SERVICE
9.01 Each party shall exercise due diligence and reasonable care and
foresight to maintain continuity of service in the delivery and receipt of
energy as provided under this agreement, but neither party shall be
considered to be in default in respect of any obligation hereunder if
prevented from fulfilling such obligation by reason of uncontrollable
forces. The term uncontrollable forces shall be deemed for the purposes of
this agreement to mean earthquake, storm, lightning, flood, backwater caused
by flood, fire, epidemic, accident, failure of facilities, war, riot, civil
disturbances, strike, labor disturbances, restraint by court or public
authority, or other similar or dissimilar causes beyond the control of the
party affected which causes such party could not have avoided by exercise of
due diligence and reasonable care. Any party unable to fulfill any
obligation by reason of uncontrollable forces shall exercise due diligence
to remove such disability with reasonable dispatch.
ARTICLE 10
DURATION OF AGREEMENT
10.01 This agreement shall continue from the date hereof to the
expiration of a period of thirty consecutive years commencing upon the
Interconnection Date, as defined in this Section 10.01, and thereafter for
successive periods of one year unless and until terminated as provided for
in Section 10.02 below. The Interconnection Date for purposes of this
agreement shall be the first day of the calendar month next following the
day, or on such day if it should be the first day of a calendar month, upon
which the systems of the parties are connected at the Interconnection Point
as provided for in Article 2 above. As soon as practicable following the
establishment of such date in conformance with the foregoing, the parties,
as a matter of record, shall exchange letters setting forth their acceptance
thereof as said Interconnection Date.
10.02 Either party upon at least thirty months' prior written notice
to the other may terminate this agreement at the expiration of said period
of thirty consecutive years or at the expiration of any successive period of
one year.
ARTICLE 11
ARBITRATION
11.01 In the event of disagreement between the parties with respect
to (1) any matter herein specifically made subject to arbitration, (2) any
question of operating practice involved in the deliveries of power and
energy herein provided for, (3) any question of fact involved in the
application of the provisions of this agreement, or (4) the interpretation
of any provision of this agreement, the matter involved in the disagreement
shall, upon demand of either party, be submitted to arbitration in the
manner hereinafter provided. An offer of such submission to arbitration
shall be a condition precedent to any right to institute proceedings at law
or in equity concerning such matter.
11.02 The party calling for arbitration shall serve notice in writing
upon the other party, setting forth in detail the subject or subjects to be
arbitrated, and the parties thereupon shall endeavor to agree upon and
appoint one person to act as sole arbitrator. If the parties fail so to
agree within a period of fifteen days from the receipt of the original
notice, the party calling for the arbitration shall, by written notice to
the other party, call for appointment of a board of arbitrators skilled with
respect to matters of the character involved in the disagreement, naming one
arbitrator in such notice. The other party shall, within ten days after the
receipt of such call, appoint a second arbitrator, and the two so appointed
shall choose and appoint a third. In case such other party fails to appoint
an arbitrator within said ten days, or in case the two so appointed fail for
ten days to agreed upon and appoint a third, the party calling for the
arbitration, upon five days' written notice delivered to the other party,
shall apply to the person who at the time shall be the senior Judge, in
point of service, of the United States District Court having jurisdiction at
Indianapolis, Indiana, for appointment of the second or third arbitrator, as
the case may be.
11.03 The sole arbitrator, or the board of arbitrators, shall afford
adequate opportunity to the parties to present information with respect to
the question or questions submitted for arbitration and may request further
information from either or both parties. The findings and award of the sole
arbitrator or of a majority of the board of arbitrators shall be final and
conclusive with respect to the question or questions submitted for
arbitration and shall be binding upon the parties, provided, that such
findings and award shall not in any way vary the expressed terms of this
agreement or in any way extend the expressed scope and intent hereof. Each
party shall pay for the services and expenses of the arbitrator appointed by
or for it, if there be a board of arbitrators, and all other costs incurred
in connection with the arbitration shall be paid in equal parts by the
parties hereto, unless the award shall specify a different division of the
costs.
ARTICLE 12
REGULATORY AUTHORITIES
12.01 This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
ARTICLE 13
WAIVERS
13.01 Any waiver at any time by either party of its rights with
respect to a default under this agreement, or with respect to any other
matter arising in connection with this agreement, shall not be deemed a
waiver with respect to any subsequent default or matter. Any delay, short
of the statutory period of limitation, in asserting or enforcing any right
under this agreement, shall not be deemed a waiver of such right.
ARTICLE 14
ASSIGNMENT
14.01 This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.
14.02 In Witness Whereof, the parties hereto have caused this
agreement to be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By: /s/ O.T. Fitzwater
O.T. Fitzwater, President
ATTEST:
/s/ Ralph W. Husted
Ralph W. Husted, Secretary
INDIANA & MICHIGAN ELECTRIC COMPANY
By: /s/ Philip Sporn
Philip Sporn, President
ATTEST:
/s/ M.P. McGlone
M.P. McGlone, Asst. Secretary
<PAGE>
SERVICE SCHEDULE A
Firm Power to Indianapolis Company
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company), and Indiana & Michigan Electric Company (Indiana Company) shall
become effective June 1, 1963 and shall continue in effect until May 31,
1973 and thereafter for successive periods of one year unless and until
terminated as provided for in this subsection 1.1. Either party upon at
least thirty months' prior written notice may terminate this Service
Schedule on May 31, 1973 or at the expiration of any successive period of
one year thereafter.
SECTION 2 - FIRM POWER
2.1 Indiana Company shall sell and deliver and Indianapolis Company
shall take and pay for, on the terms and conditions provided for under this
agreement, electric power (Firm Power ) and associated electric energy (Firm
Energy). Throughout the duration of this Service Schedule, Indiana Company
shall stand ready at all times, subject to the provisions of this agreement,
to deliver to Indianapolis Company Firm Power and Firm Energy in any amount
desired by Indianapolis Company up to a maximum rate of delivery equal to
the Firm Contract Demand as defined in subsection 3.1 of this Service
Schedule.
SECTION 3 - DEFINITION OF BILLING FACTORS
Firm Power Demand
3.1 The following terms, wherever used in this Service Schedule,
shall have the following meanings:
3.11 "Month" means Calendar Month.
3.12 "Contract Year" means the period of twelve consecutive
months beginning on June 1, 1963, or any succeeding anniversary date
thereof and terminating the last day of any such period.
3.13 "Firm Contract Demand" for any month means the figure in
effect for such month as set forth below in this subsection 3.13:
Firm Contract Demand
Contract Year Kilowatts
June 1, 1963 to May 31, 1964................... 50,000
June 1, 1964 to May 31, 1965................... 100,000
June 1, 1965 to May 31, 1966................... 150,000
For each contract year following May 31, 1966, the firm contract
demand will be the same as that of the preceding contract year,
subject, however, to the following conditions:
Indianapolis Company may, by giving Indiana Company notice in
writing not less than thirty months prior to the fourth contract year
or any succeeding contract year thereafter, establish the amount of
the Firm Contract Demand for such year provided, however, that such
Firm Contract Demand will in no event be less than 100,000 kilowatts
nor more than 150,000 kilowatts.
Firm Energy
3.2 The number of kilowatt-hours of Firm Energy to be delivered to
Indianapolis Company and the time of delivery thereof, subject to the rate
of delivery limit specified in subsection 2.1 of this Service Schedule,
shall be scheduled by Indianapolis Company, and the number of kilowatt-hours
of such Firm Energy so scheduled during each clock-hour shall be recorded as
provided for in Article 6 of this agreement. The aggregate number of
kilowatt-hours of Firm Energy so recorded for any month shall be used for
the purpose of effecting billings and payments under this Service Schedule
for such month. Each of the parties shall exercise due diligence and
reasonable care and foresight in arranging for and operating their
respective power sources so that amounts of Firm Energy shall be delivered
and taken in accordance with such delivery schedules.
SECTION 4 - COMPENSATION
4.1 Indianapolis Company shall pay Indiana Company each month for
services provided for under this Service Schedule upon the bases of the
billing factors determined for such month and as hereinbelow provided:
Minimum Charge
For services provided for under this Service Schedule, Indianapolis
Company shall pay Indiana Company a Minimum Charge each calendar month of
$3.48 per kilowatt of Firm Contract Demand. Such additional charges to be
paid any month by Indianapolis Company to Indiana Company as provided for in
Section 5 of this Service Schedule are to be paid in addition to any charge
for such month as provided for in this Section 4. In the event the bill
rendered to Indianapolis Company for any calendar month is subject to
decrease by an amount as provided for in said Section 5, any charge,
including the minimum charge, for such month determined as provided for in
this Section 4 shall be decreased by such amount.
Energy Charges
The charge for the total kilowatt-hours taken up to a
quantity equal to 450 times the Firm Contract Demand is
included in the Minimum Charge specified above.
For the remaining kilowatt-hours taken, the
charge per kilowatt-hour shall be............. 1.90 mills
The charges provided for in this Section 4 shall be subject to adjustment in
accordance with the provisions of Section 5 of this Service Schedule.
Firm Energy Account
4.2 If, during any calendar month, the kilowatt-hours of Firm Energy
delivered by Indiana Company to Indianapolis Company under this Service
Schedule are less than the product of 450 hours and the Firm Contract
Demand, the number of kilowatt-hours of Firm Energy paid for by Indianapolis
Company for such month pursuant to subsection 4.1 above that were not
actually delivered to Indianapolis Company shall be set up in an account
(herein called Firm Energy Account) to the credit of Indianapolis Company.
During any subsequent month that there is a balance of kilowatt-hours
remaining to the credit of Indianapolis Company in such Firm Energy Account
and the kilowatt-hours of Firm Energy delivered to Indianapolis Company for
such month are in excess of the product of 450 hours and the Firm Contract
Demand for such month, a quantity of kilowatt-hours equal to (1) such excess
kilowatt-hours or (2) the balance of kilowatt-hours remaining to the credit
of Indianapolis Company in the Firm Energy Account, whichever amount is the
smaller, shall be billed to Indianapolis Company at no charge therefor,
excepting such charges as are applicable thereto in accordance with Section
5 of this Service Schedule, and the Firm Energy Account shall be charged
with such number of kilowatt-hours so billed to Indianapolis Company.
SECTION 5 - ADDITIONAL CHARGES AND CREDITS
5.1 The following terms, wherever used in this Service Schedule,
shall have the following meanings:
5.11 Principal Stations - The steam-electric generating stations of
Indiana Company known as Breed, Tanners Creek, and Twin
Branch and any new principal steam-electric generating
stations (exclusive of nuclear power stations) that may be
placed in service by Indiana Company.
5.12 Account No. 501. Fuel - The production expense account of the
Uniform System of Accounts prescribed for Public Utilities
and Licensees by the Federal Power Commission as
prevailing during January, 1961.
5.13 Weighted average Fuel Cost - The total of all the components of
cost at all the Principal Stations chargeable to Account
No. 501 Fuel during a specified period divided by the
total millions of Btu in fuel charged to said account at
all the Principal Stations during such period, expressed
in cents per million Btu.
5.14 Weighted average Fuel Consumption - The total Btu in fuel
charged to Account No. 501 Fuel, at the Principal Stations
during a specified period divided by the total kilowatt-hour
net generation at all the Principal Stations during such
period, expressed in Btu per kilowatthour.
5.15 Accounts other than Fuel - All of the operating production
expense accounts for Electric Generation-Steam Power of said
Uniform System of Accounts other than Account No. 501 Fuel
as prevailing during January 1961.
5.16 Capability of Breed Station - The aggregate kilowatt-hours of
net generation during a clock-hour period that the Breed
Station is capable of generating at the time of the annual
peak load of the Indiana Company system with all equipment
operating at such station.
5.17 Weighted average cost other than Fuel at Breed Station - The
total of all the components of cost chargeable to the accounts
other than Fuel specified in subsection 5.15 above at the
Breed Station during a specified period divided by the
product of (1) the Capability of the Breed Station during
such period and (2) the number of months during such
period, expressed in cents per kilowatt-month.
5.2 The charges provided for in Section 4 of this Service Schedule
are based upon a weighted average fuel cost of twenty and one-half cents
($0.205) per million Btu at the Principal Stations. In the event such
weighted average fuel cost for any month is above twenty and one-half cents
($0.205) per million Btu by at least one mill, an additional charge during
the next succeeding month shall be made on the kilowatt-hours of Firm Energy
actually delivered during such succeeding month at a rate of 0.0105 mills
per kilowatt-hour for each full mill increase in such weighted average fuel
cost above twenty and one-half cents ($0.205) per million Btu. In the event
such weighted average fuel cost for any month is less than twenty and
one-half cents ($0.205) per million Btu by at least one mill, the bill
rendered to Indianapolis Company for the next succeeding month shall be
decreased by an amount equal to the kilowatt-hours of Firm Energy actually
delivered during such succeeding month at a rate of 0.0105 mills per
kilowatt-hour for each full mill decrease in such weighted average fuel cost
below twenty and one-half cents ($0.205) per million Btu. The said
adjustment factor of 0.0105 mills shall be subject to adjustment as provided
for in subsection 5.3 of this Service Schedule.
5.3 The said adjustment factor of 0.0105 mills is based upon a
weighted average fuel consumption of 10,500 Btu per kilowatthour of net
generation. In the event that improvements in the thermal efficiency of the
presently existing Principal Stations or the addition of any new Principal
Station bring about a reduction in the weighted average fuel consumption for
a period of twelve (12) consecutive months of at least 200 Btu below 10,500
Btu per kilowatthour, the adjustment factor of 0.0105 mills for the next
succeeding month shall be decreased 0.00019 mills for each full 200 Btu that
the weighted average fuel consumption so becomes lower than 10,500 Btu per
kilowatthour.
5.4 If the weighted average cost other than fuel at Breed Station for
a period of twelve consecutive elapsed months is above 16.7 cents per
kilowatt-month by at least 0.5 cent, for each full 0.5 cent that such cost
is above 16.7 cents, the next succeeding month Indianapolis Company shall
pay 0.625 cent per kilowatt of Firm Contract Demand. If the weighted
average cost other than fuel at Breed Station for a period of twelve
consecutive elapsed months is below 16.7 cents per kilowatt-month by at
least 0.5 cent, for each full 0.5 cent that such cost is below 16.7 cents,
the bill rendered to Indianapolis Company for the next succeeding month
shall be decreased by 0.625 cent per kilowatt of Firm Contract Demand.
SECTION 6 - BILLINGS AND PAYMENTS
6.1 Billings and payments for the purposes of effecting settlements
under this Service Schedule shall be made in accordance with and subject to
the terms and conditions of Article 7 of this agreement.
SECTION 7 - TAXES
7.1 It is expressly agreed and made a provision of this Service
Schedule that if at any time during the term hereof there should be levied
and/or assessed against Indiana Company any direct tax by any taxing
authority on the Firm Power and/or Firm Energy manufactured, generated,
produced, converted, sold, purchased, transmitted, interchanged, exchanged,
exported or imported by Indiana Company, in addition to or different from
the forms of such direct taxes now being levied and/or assessed against
Indiana Company, or any increase in the rate of such existing or future
direct taxes, which Indiana Company could demonstrate to be unduly
burdensome to it in the performance of the obligations herein provided, then
in such event, the parties shall endeavor to make such an agreement in
regard to sharing the burden created by such tax as appears to be equitable
and proper under the circumstances.
SECTION 8 - DEFERRAL OF EFFECTIVE DATE
8.1 Notwithstanding any of the foregoing provisions of this Service
Schedule, in the event Indiana Company as of June 1, 1963, is unable to
provide 345,000-volt transmission line facilities suitable for connection to
Indianapolis Company's terminal facilities as Hanna Substation, as described
in Section 1.02 of Article 1 of this agreement, and sufficiently completed
to enable Indiana Company to supply over such facilities Firm Power service
as provided for in this Service Schedule, this Service Schedule shall not
become effective until June 1 next following the day, or on such day if it
should be June 1, that Indiana Company is so able to provide such
345,000-volt transmission line facilities. In the event that this Service
Schedule becomes effective after June 1, 1963, as provided for in this
subsection 8.1, it shall continue in effect from the date that it so becomes
effective to the expiration of a period of ten consecutive years and
thereafter for successive periods of one year unless and until terminated as
provided for in this subsection 8.1. Either party upon at least thirty
months' prior written notice to the other may terminate this Service
Schedule at the expiration of said period of ten consecutive years or at the
expiration of any successive period of one year.
<PAGE>
SERVICE SCHEDULE B
EMERGENCY SERVICE
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Subject to the provisions of subsection 2.2 of this Section 2, in
the event of a breakdown or other emergency in or on the system of either
party involving either sources of power or transmission facilities, or both,
impairing or jeopardizing the ability of the party suffering the emergency
to meet the loads of its system, the other party shall deliver to such party
electric energy in amounts up to and including 50,000 kilowatts which 50,000
kilowatts is hereby designated and herein called Emergency Capacity, and
shall also deliver any additional electric energy in excess of said amount
that it is requested to deliver; provided, however, that neither party shall
be obligated to deliver any part of such additional energy which, in its
sole judgment, it cannot deliver without interposing a hazard to or economic
burden upon its operations or without impairing or jeopardizing the other
load requirements of its system; and provided further, that neither party
shall be obligated to deliver electric energy in amounts up to and including
or in excess of said Emergency Capacity to the other for a period in excess
of forty-eight consecutive hours during any single emergency.
2.2 The parties recognize that the delivery of electric energy up to
and including the Emergency Capacity as provided for in subsection 2.1 of
this Section 2 is subject to two conditions which may preclude the delivery
of such energy as so provided: (a) the system of a party may be suffering
an emergency in or on its own system as described in said subsection 2.1, or
(b) the system of a party may be delivering electric energy, under a mutual
emergency interchange agreement, to the system of another interconnected
company which is suffering an emergency in or on its system. Under
conditions as cited under (a) above, neither party shall be considered to be
in default hereunder if unable to comply with the provisions of said
subsection 2.1. Under conditions as cited under (b) above, neither party
shall be considered to be in default hereunder if it is unable to comply
with the provisions of said subsection 2.1 provided that the aforesaid
interconnected company has suffered said emergency in or on its system prior
to and within forty-eight hours of that of the other party hereto and that,
if requested by said other party, such delivery of electric energy to said
interconnected company shall be discontinued within forty-eight hours
following the start of such delivery, and a subsequent delivery shall be
made for a full forty-eight hour period to said other party in accordance
with the provisions of said subsection 2.1.
2.3 If at any time the record over a reasonable prior period shows
clearly that either of the parties has failed to deliver energy in
accordance with and subject to the provisions of subsection 2.1 and
subsection 2.2 of this Section 2, either party, by written notice given to
the other party, may call for a joint study by the parties of the reserve
generating capacity in and provided for their respective systems and of
their respective system transmission facilities affecting the supply and
delivery of power and energy under this agreement. It shall be the purpose
of such study to determine the adequacy or inadequacy of reserve generating
capacity and transmission facilities being provided to meet the requirements
of the parties' respective systems, reflecting obligations under this
agreement, and, if inadequate, the extent of the burden that one party may
be placing upon the other. If it should be found that one party is placing
an unreasonable burden upon the other, the party causing such burden shall
take such measures as are necessary to remove the burden from the other
party, or the parties shall enter into such arrangements as shall provide
for equitable compensation to the party being burdened.
SECTION 3 - COMPENSATION
3.1 Electric energy delivered under Section 2 above shall be settled
for either by the return of equivalent energy or, at the option of the party
that supplied such energy, by payment of the out-of-pocket cost--such cost
being as of the delivery point or points, as provided for in Section 5.01 of
Article 5 of this agreement, taking into account electric losses incurred
from the source or sources of such energy to said delivery point or
points--to the supplying party of generating or supplying such energy plus
ten per cent of such cost. If equivalent energy is returned, it shall be
returned at times when the load conditions of the party receiving it are
equivalent to the load conditions of such party at the time the energy for
which it is returned was delivered or, if such party elects to have
equivalent energy returned under different conditions, it shall be returned
in such amounts, to be agreed upon by the Operating Committee, as will
compensate for the difference in conditions.
<PAGE>
SERVICE SCHEDULE C
COORDINATION OF SCHEDULED MAINTENANCE
OF GENERATING FACILITIES
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
2.1 In furtherance of the benefits to be realized by the parties by
coordinating to the extent practicable the scheduled maintenance, repair,
and overhaul of generating facilities in their respective systems and in
connection with such scheduled maintenance, repair, and overhaul of
generating facilities the parties shall arrange for, deliver, and take
electric power and energy in amounts and under conditions as follows; viz.:
2.11 For purposes of this Service Schedule the full
twelve months' period commencing on the Interconnection Date
shall be the first Maintenance Period and each succeeding full
twelve months' period that this Service Schedule is in effect
shall be a Maintenance Period. During each Maintenance Period,
at different intervals determined as provided for under
subsection 2.12 below, each party shall have the right to call
for and take delivery of not more than the total of 10,000,000
kilowatt-hours from the other under this Service Schedule.
Delivery of such energy, subject to the provisions of this
subsection 2.1, may be taken at such times and at such rates of
take as the receiving party may elect up to a maximum rate of
take of 25,000 kilowatts.
2.12 The Operating Committee shall determine and agree
upon the dates of the intervals referred to under subsection
2.11 above during which Indianapolis Company shall deliver any
such energy desired by or returnable to Indiana Company and,
conversely, the dates of such intervals during which Indiana
Company shall deliver any such energy desired by or returnable
to Indianapolis Company. Subject to the understanding
hereinbelow cited, such intervals shall each consist of single
periods of not less than seven consecutive calendar days, and
the receiving party's right to call for and take not more than
the aforesaid total of 10,000,000 kilowatt-hours during any
Maintenance Period shall be restricted to not more than eight
such intervals so agreed upon by the Operating Committee during
such Maintenance Period. It is understood that during any
Maintenance Period each party shall have a total of sixty days
during which it shall have the right to call for and take not
more than said 10,000,000 kilowatt-hours from the other under
this Service Schedule.
2.13 On the day next preceding the first day of an
interval as described under 2.12 above and on each day of such
interval excepting the last day, at a time determined to be
practicable by the Operating Committee, the receiving party
shall furnish the other a load schedule for the next calendar
day, or for such other twenty-four hour period or periods as may
be agreed upon by the Operating Committee. Such load schedules
shall show for each clock hour the quantity of energy that the
receiving party expects to take from the other at the delivery
point or points, as provided for in Section 5.01 of this
agreement.
SECTION 3 - ANNUAL SETTLEMENT
3.1 It is expected that during a full Maintenance Period one party
shall, to the extent practicable, take from the other party the same number
of kilowatt-hours, up to the aforesaid 10,000,000 kilowatt-hours specified
in Section 2 of this Service Schedule, that such other party has delivered
pursuant to said Section 2. If, however, the total kilowatt-hours received
by one party during a full Maintenance Period, pursuant to said Section 2,
is greater than the total kilowatt-hours delivered by such party during such
period and pursuant to said Section 2, the parties shall (1), subject to
their mutual agreement, effect the arrangements provided for in subsection
3.11 below or (2), subject to their mutual agreement, effect a combination
of the arrangements provided for in subsection 3.11 below and a cash
settlement as provided for in subsection 3.12 below or (3) effect a cash
settlement as provided for in subsection 3.12 below.
3.11 The Operating Committee shall arrange, if the parties
mutually agree that it shall be so arranged, for the delivery of all
or any part of the kilowatt-hour difference between the total
kilowatt-hours received and delivered by one party during a full
Maintenance Period, pursuant to Section 2 of this Service Schedule.
Such delivery, to be made by the party receiving such kilowatt-hour
difference to the other party, shall be made during the next following
Maintenance Period at intervals thereof and in amounts and at rates of
delivery to be determined and agreed upon by the Operating Committee,
but such delivery shall be excluded from all accounting under this
Service Schedule with respect to such following Maintenance Period.
3.12 For the kilowatt-hour difference, or any part thereof if
the parties mutually agree to effect a cash settlement for only such
part, between the total kilowatt-hours received and delivered by one
party during a full Maintenance Period, pursuant to Section 2 of this
Service Schedule, the party receiving such kilowatt-hour difference
shall pay the other party at a rate per kilowatt-hour determined by
dividing (1), one hundred and ten per cent of the aggregate
out-of-pocket cost--such cost being as of the delivery point or
points, as provided for in Section 5.01 of Article 5 of this
agreement, taking into account electrical losses incurred from the
source or sources of such energy to said delivery point or
points--experienced by the systems of both parties in generating or
supplying the aggregate kilowatt-hours delivered during and applicable
to such Maintenance Period, pursuant to Section 2 of this Service
Schedule, by (2), the number of such aggregate kilowatt-hours.
SECTION 4 - MODIFICATION
4.1 Each party, by written notice given to the other party not less
than ninety days prior to the end of the second or any subsequent
Maintenance Period, may call for a reconsideration of the terms and
conditions of this Service Schedule, provided that there shall be no such
reconsideration during the first Maintenance Period and no more than one
such reconsideration during the second Maintenance Period, and that no
subsequent reconsideration shall be made sooner than two years following any
previous reconsideration. If such reconsideration is called for, there
shall be taken into account any changed conditions, any results from the
application of said terms and conditions not foreseen or reasonably
foreseeable as of the day first above written or as of the day of conclusion
of the next previous reconsideration, if any, and any other factors which
might cause said terms and conditions to result in any inequitable division
of the benefits of interconnected operation or in an inadequate realization
of such benefits. Any modification in terms and conditions agreed to
between the parties following such reconsideration shall become effective at
the beginning of the Maintenance Period next following the aforesaid
ninety-day notice period.
<PAGE>
SERVICE SCHEDULE D
ENERGY TRANSFER
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.
SECTION 2 - TRANSFER ARRANGEMENT
2.1 In carrying out the interconnected operation of their respective
systems as provided for under this agreement, energy being received by a
portion of one party's system from another portion of its system or from the
system of another interconnected company, or energy being delivered by a
portion of one party's system to another portion of its system or to the
system of another interconnected company, may flow over the transmission
facilities of the other party as a natural result of the physical and
electrical characteristics of the interconnected network of transmission
lines of which the transmission systems of the parties are a part. Such
flow of energy may occur during periods when conditions of system operation
are normal or may occur during periods of emergency caused by the failure of
either sources of power or transmission facilities, or both. In respect to
such flow of energy (hereinafter called "energy transfer") the parties
agreed as follows; viz.:
2.11 Such energy transfer over their respective facilities
shall be permitted when such transfer occurs; subject, however, to the
understanding that such energy transfer shall not be of such magnitude
or duration as to affect adversely or jeopardize the ability of the
party over whose system such energy transfer occurs to render proper
service to its customers, and to render or accept service to or from
companies with which it now has or at any time hereafter it may have
contractual arrangements to furnish, take, or interchange power or
energy, or both.
2.12 The parties recognize that in carrying out the provisions
of this Service Schedule, the above described energy transfer, either
during periods when conditions of system operation are normal or
during periods of emergency, or both, may eventually require the
installation of additional transmission facilities in order that such
energy transfer may be properly controlled to the end that the ability
of the party over whose system such energy transfer occurs is not
affected adversely or jeopardized in meeting its own requirements as
described under 2.11 above. In the event the need for such additional
transmission facilities become apparent to either of the parties
during the duration of this Service Schedule, upon written notice
given by either party to the other party and as soon as practicable
following such notice, the parties shall jointly re-examine conditions
relating to energy transfer. In such re-examination, if called for,
the parties shall agree upon such additional transmission facilities
as may be required to be installed, if any, and upon an equitable
basis for bearing the cost of installing, maintaining and operating
such facilities, if installed.
SECTION 3 - POWER AND ENERGY ACCOUNTING
3.1 The parties recognize that energy transfer as described under
Section 2 of this Service Schedule, except for such amounts of electrical
losses as may be incurred because of such energy transfer, is the
simultaneous acceptance and delivery of like amounts of power and energy by
and from the system of the party over whose system such energy transfer
occurs. Power and energy associated with energy transfer, including
electrical losses associated therewith, shall be accounted for each
clock-hour as provided for under Article 6 of this agreement. Proper
consideration to such electrical losses will be in accordance with the
manner agreed upon by the Operating Committee. It is understood by the
parties, however, that such electrical losses resulting from energy
transfer, to be taken as losses over and above the losses prevailing under
basic conditions agreed upon by the parties, shall be supplied
simultaneously by the party for whom such energy transfer is being made.
The parties have agreed that initially such basic conditions will be
established as those that exist when the scheduled net delivery between the
systems of the parties, and between their respective systems and the systems
of other interconnected companies, is zero kilowatts. It is further
understood that, from time to time, conditions may require the establishment
of different basic conditions for such purpose. Either party by written
notice given to the other party may call for a prompt re-examination and
reconsideration of matters pertinent to the establishment of said basic
conditions, whenever such re-examination appears to be warranted, and the
parties will thereupon agree to effect such changes in the basic conditions,
if any, that will equitably compensate the parties for such losses. A
statement to be prepared by the parties at the end of each calendar month
shall include in detail the amounts of energy delivered and received by the
parties that are associated with energy transfer and the amounts of
electrical losses associated therewith.
<PAGE>
SERVICE SCHEDULE E
INTERCHANGE POWER
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 It is recognized that from time to time each of the parties may
have electric energy (herein called Economy Energy) available from surplus
capacity either on its own system or from sources outside its own system, or
both, and that Economy Energy could be supplied to the other party at a cost
that would result in operating savings to such other party. Such operating
savings would result from the displacement of electric energy that otherwise
would be supplied from capacity either on such other party's system or from
sources outside its own system, or both. To promote the economy of electric
power supply and to achieve efficient utilization of production capacity,
either party, whenever it in its own judgment determines Economy Energy is
available, may, but shall not be obligated to, offer Economy Energy to the
other party. Promptly upon receipt of any such offer said other party shall
notify the offering party of the extent to which it desires to use such
Economy Energy, and schedules providing the periods and extent of use shall
be agreed upon.
Non-Displacement Energy
2.2 It is further recognized that from time to time occasions will
arise when the effecting of transactions as provided under subsection 2.1
next above will be impracticable, but at the same time one of the parties
may have electric energy (herein called Non-Displacement Energy) which it is
willing to make available from surplus capacity either on its own system or
from sources outside its own system, or both, that can be utilized
advantageously for short intervals by the other party. It shall be the
responsibility of the party desiring the receipt of Non-Displacement Energy
to initiate the receipt and delivery of such energy. The party desiring
such receipt of energy shall inform the other party of the extent to which
it desires to use Non-Displacement Energy, and, when ever in its own
judgment such other party determines that it has Non-Displacement Energy
available, schedules providing the periods and extent of use shall be
mutually agreed upon. Neither party shall be obligated to make any
Non-Displacement Energy available to the other.
SECTION 3 - COMPENSATION
Economy Energy
3.1 Economy Energy supplied hereunder shall be considered as
displacing electric energy that otherwise would have been generated by the
receiving party at its own steam-electric generating stations or any
electric energy from third parties mutually agreed to be subject to
displacement hereunder. Economy Energy shall be settled for at rates which
shall be predicated upon the principle that savings in operating costs to
the systems of the parties resulting from the use of Economy Energy shall be
divided between the parties as equally as is practicable. Prior to any
transaction involving the delivery and receipt of Economy Energy, authorized
representatives of the parties shall determine and agree upon the
compensation applicable to such transaction. Compensation so agreed upon
shall not be subject to later review or adjustment.
Non-Displacement Energy
3.2 Non-Displacement Energy delivered hereunder shall be settled for
either by the return of equivalent energy or, at the option of the party
that supplied such energy, by payment of the out-of-pocket cost--such cost
being as of the delivery point or points, as provided for in Section 5.01 of
Article 5 of this agreement, taking into account electrical losses incurred
from the source or sources of such energy to said delivery point or
points--to the supplying party of generating or supplying such energy plus
ten per cent of such cost. If equivalent energy is returned, it shall be
returned at times when the load conditions of the party receiving it are
equivalent to the load conditions of such party at the time the energy for
which it is returned was delivered or, if such party elects to have
equivalent energy returned under different conditions, it shall be returned
in such amounts, to be agreed upon by the Operating Committee, as will
compensate for the difference in conditions.
<PAGE>
SERVICE SCHEDULE F
SHORT TERM POWER
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of not less than one week, i.e., any specified period of seven
consecutive days, such electric power (herein called Short Term Power) as
the other party may at such time have and is willing to make available as
Short Term Power. The party asked to supply Short Term Power shall be the
sole judge as to the amounts and periods that its has electric power
available that may be reserved by the other party as Short Term Power.
2.11 To reserve Short Term Power, the party desiring such power
shall specify in its notice to the other party the number of kilowatts
and the period for which it desires to so reserve such power and the
desired schedule of delivery of the power so reserved. The party
receiving such notice, in a prompt acknowledgment shall signify the
extent of its ability and willingness to comply with the provisions of
such notice. Any notice or any acknowledgment of such notice that may
be given orally initially, if requested by either party, shall be
confirmed in writing and such confirmation shall be forwarded not
later than the third day following the day such oral notice is given.
2.12 During the period that Short Term Power has been reserved
as above provided, the party having agreed to supply such power shall
deliver electric energy (herein called Short Term Energy) to the other
party at the delivery point or points, as provided for in Section 5.01
of Article 5 of this agreement, upon call and in amounts up to the
number of kilowatts reserved. However, in the event conditions arise
during such period which could not have been reasonably foreseen at
the time said power was reserved and such conditions would cause the
delivery of Short Term Energy to be burdensome to the supplying party,
said party has the right to request the other party to reduce its take
of such energy to any amount specified and for any portion of such
period. The party so requested shall promptly comply with the request
of the other party.
2.13 The Short Term Power billing demand for any week shall be
taken as equal to the number of kilowatts reserved for such week as
Short Term Power.
SECTION 3 - COMPENSATION
3.1 Payments for the supply of Short Term Power and Short Term Energy
shall be predicated upon the following rates:
3.11 Demand Charge
For the billing demand for each week at the rate of $0.30 per
kilowatt for such week. In the event the amount of Short Term Energy
taken is reduced upon request of the supplying party, the demand
charge for the week during which such reduction is made shall be
reduced by $0.06 per kilowatt of reduction for each day during which
any reduction is in effect.
3.12 Energy Charge
For the kilowatt-hours of Short Term Energy taken, at a rate per
kilowatt-hour equal to the out-of-pocket cost--such cost being as of
the delivery point or points, as provided for in Section 5.01 of
Article 5 of this agreement, taking into account electrical losses
incurred from the source or sources of such energy to said delivery
point or points--to the supplying party of generating or supplying
such energy plus ten per cent of such cost.
<PAGE>
Modification No. 1
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
_____________
Dated November 14, 1963
<PAGE>
THIS AGREEMENT, made and entered into as of the 14th day of November,
1963, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana
Company) also an Indiana corporation,
WITNESSETH,
THAT,
WHEREAS, Indianapolis Company and Indiana Company entered into an
interconnection agreement, dated December 30, 1960, (herein called 1960
Agreement); and
WHEREAS, the parties desire to modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agreed as follows:
SECTION 1. Section 3.03 of Article 3 of the 1960 Agreement is hereby
modified to read:
"3.03 The following service schedules are agreed to and hereby
made a part of this agreement:
Service Schedule A - Firm Power to Indianapolis Company
Service Schedule B - Emergency Service
Service Schedule C - Coordination of Scheduled Maintenance of
Generating Facilities
Service Schedule D - Energy Transfer
Service Schedule E - Interchange Power
Service Schedule F - Short Term Power
Service Schedule G - Interim Power to Indianapolis Company"
Service Schedule G is attached hereto as the Appendix.
SECTION 2. This agreement shall be effective as of the day and year
first above written and shall remain in effect until the termination of the
1960 Agreement.
SECTION 3. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
SECTION 4. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 5. This agreement shall inure to the benefit of and be
binding upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Ottis T. Fitzwater
Ottis F. Fitzwater, President
Attest:
/s/ Ralph W. Husted
Ralph W. Husted, Secretary
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ Donald C. Cook
Donald C. Cook, President
Attest:
/s/ M.P. McGloone
M.P. McGloone, Assistant Secretary
<PAGE>
APPENDIX
SERVICE SCHEDULE G
INTERIM POWER TO INDIANAPOLIS COMPANY
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company), and Indiana & Michigan Electric Company (Indiana Company), made
and entered into as of the 14th day of November, 1963, shall continue in
effect throughout the duration of the agreement of which it is a part.
SECTION 2 - INTERIM POWER
2.1 Indiana Company shall sell and deliver and Indianapolis Company
shall take and pay for, on the terms and conditions provided for under this
agreement, electric power (Interim Power) and associated electric energy
(Interim Energy). Throughout the duration of this Service Schedule, Indiana
Company shall stand ready at any time, subject to the provisions of this
agreement, to deliver to Indianapolis Company Interim Power and Interim
Energy in any amount desired by Indianapolis Company up to a maximum rate of
delivery equal to the Interim Contract Demand, as defined in subsection 3.1
of this Service Schedule, in effect at such time.
SECTION 3 - DEFINITION OF BILLING FACTORS
Interim Power Demand
3.1 The following terms, wherever used in this Service Schedule,
shall have the following meanings:
3.11 "Month" means calendar month.
3.12 "Contract Period" means any period of consecutive months
so designated and agreed upon by the parties for the purposes of this
Service Schedule. The initial period so designated and agreed upon
shall begin June 1, 1966 and terminate October 31, 1966.
3.13 "Interim Contract Demand" for any month means the kilowatt
demand figure in effect for such month which has been so designated
and agreed upon by the parties for the purposes of this Service
Schedule. The initial demand figure so designated and agreed upon
shall be 80,000 kilowatts and shall be in effect from June 1, 1966
until October 31, 1966.
Interim Energy
3.2 The number of kilowatt-hours of Interim Energy to be delivered to
Indianapolis Company and the time of delivery thereof, subject to the rate
of delivery limit specified in subsection 2.1 of this Service Schedule,
shall be scheduled by Indianapolis Company, and the number of kilowatt-hours
of such Interim Energy so scheduled during each clock-hour shall be recorded
as provided for in Article 6 of this Agreement. The aggregate number of
kilowatt-hours of Interim Energy so recorded for any month shall be used for
the purpose of effecting billings and payments under this Service Schedule
for such month. Each of the parties shall exercise due diligence and
reasonable care and foresight in arranging for and operating their
respective power sources so that amounts of Interim Energy shall be
delivered and taken in accordance with such delivery schedules.
SECTION 4 - COMPENSATION
4.1 Indianapolis Company shall pay Indiana Company each month for
services provided for under this Service Schedule upon the bases of the
billing factors determined for such month and as hereinbelow provided:
Minimum Charge
For services provided for under this Service Schedule, Indianapolis
Company shall pay Indiana Company a Minimum Charge each calendar month of
$1.56 per kilowatt of Interim Contract Demand.
Energy Charges
The charge for the total kilowatt-hours taken up to a
quantity equal to 100 times the Interim Contract
Demand is included in the Minimum Charge specified above.
For the remaining kilowatt-hours taken, the charge per
kilowatt-hour shall be ...........................2.00 mills
Interim Energy Account
4.2 If, during any calendar month, the kilowatt-hours ofInterim
Energy delivered by Indiana Company to Indianapolis Company under this
Service Schedule are less than the product of 100 hours and the Interim
Contract Demand, the number of kilowatt-hours of Interim Energy paid for by
Indianapolis Company for such month pursuant to subsection 4.1 above that
were not actually delivered to Indianapolis Company shall be set up in an
account (herein called Interim Energy Account) to the credit of Indianapolis
Company. During any subsequent month that there is a balance of
kilowatt-hours remaining to the credit of Indianapolis Company in such
Interim Energy Account and the kilowatt-hours of Interim Energy delivered to
Indianapolis Company for such month are in excess of the product of 100
hours and the Interim Contract Demand for such month, a quantity of
kilowatt-hours equal to (1) such excess kilowatt-hours or (2) the balance of
kilowatt-hours remaining to the credit of Indianapolis Company in the
Interim Energy Account, whichever amount is the smaller, shall be billed to
Indianapolis Company at no charge therefor, and the Interim Energy Account
shall be charged with such number of kilowatt-hours so billed to
Indianapolis Company.
SECTION 5 - MODIFICATION
5.1 The following terms wherever used in this Service Schedule shall
have the following meanings:
5.11 Principal Stations - The steam-electric generating
stations of Indiana Company known as Breed, Tanners Creek, and Twin
Branch and any new principal steam-electric generating stations
(exclusive of nuclear power stations) that may be placed in service by
Indiana Company.
5.12 Account No. 501 Fuel - The production expense account of
the Uniform System of Accounts prescribed for Public Utilities and
Licensees by the Federal Power Commission as prevailing during
January, 1961.
5.13 Weighted average Fuel Cost - The total of all the
components of cost at all the Principal Stations chargeable to Account
No. 501 Fuel during a specified period divided by the total millions
of Btu in fuel charged to said account at all the Principal Stations
during such period, expressed in cents per million Btu.
5.14 Weighted average Fuel Consumption - The total Btu in fuel
charged to Account No. 501 Fuel, at the Principal Stations during a
specified period divided by the total kilowatt-hour net generation at
all the Principal Stations during such period, expressed in Btu per
kilowatt-hour.
5.2 If, at any time during the term hereof, should the weighted
average fuel cost exceed twenty-two and one-half cents ($0.225) per million
Btu, then in such event the charges provided for in Section 4 of this
Service Schedule shall be appropriately modified so as to compensate Indiana
Company for such weighted average fuel cost in excess of twenty and one-half
cents ($0.205) per million Btu. Determination of the appropriate
modification in charges shall take into account changes in weighted average
fuel consumption.
SECTION 6 - BILLINGS AND PAYMENTS
6.1 Billings and payments for the purposes of effecting settlements
under this Service Schedule shall be made in accordance with and subject to
the terms and conditions of Article 7 of this agreement.
<PAGE>
Modification No. 2
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
___________
Dated August 1, 1967
<PAGE>
CONTENTS
SECTION
PAGE
Preamble------------------------------------------------- 1
1. Interconnections----------------------------------------- 1
2. Interconnected Operation--------------------------------- 2
3. Services------------------------------------------------- 2
4. Delivery Points------------------------------------------ 3
5. Metering------------------------------------------------- 3
6. Other Terms and Conditions------------------------------- 3
7. Regulatory Authorities----------------------------------- 3
8. Assignment----------------------------------------------- 3
APPENDIX
I. Service Schedule H - Petersburg-------------------------- 5
Power to Indiana Company
II. Facilities Schedule - Description------------------------ 9
of Transmission Line and Station
Facilities Provided and to be
Provided by Indiana Company and
Indianapolis Company
<PAGE>
THIS AGREEMENT, made and entered into as of the 1st day of August,
1967, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana
Company) also an Indiana corporation,
WITNESSETH,
THAT:
WHEREAS, Indianapolis Company and Indiana Company entered into an
interconnection agreement, dated December 30, 1960, (herein called 1960
Agreement); and
WHEREAS, by agreement dated November 14, 1963, the parties entered
into Modification No. 1 to the 1960 Agreement (Modification No. 1); and
WHEREAS, the parties have studied their respective load and generating
capacity situations and so as to more effectively adapt the provisions of
the 1960 Agreement to future load and capacity situations have reached
certain understandings with respect to further modification of the 1960
Agreement; and
WHEREAS, in view of such understandings, the parties desire that the
1960 Agreement as modified by Modification No. 1 be further modified as
hereinafter set forth;
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants herein set forth, the parties agree as follows:
SECTION 1. Interconnections. Article 1 of the 1960 Agreement is
hereby modified to read:
"ARTICLE 1
INTERCONNECTIONS
1.01 The respective systems of the parties shall be interconnected at
the interconnection points hereinbelow defined and as hereinafter provided
for in this Article 1. In furtherance thereof, the parties shall own and
provide the transmission facilities in their systems, i.e., transmission
lines and essential terminal equipment, as described in the Facilities
Schedule attached hereto as Appendix II and made a part of this agreement.
The interconnections to be so provided shall be at the points hereinbelow
set forth; viz.: (Reference to any line, station, or substation in this
Article 1 is consistent with the designation for any such line, station, or
substation set forth in the Facilities Schedule.)
1.011 Hanna Interconnection Point, the point at Indianapolis
Company's Hanna Substation where the terminal facilities provided
therefor by Indianapolis Company shall connect to Indiana Company's
Tanner's Creek-Hanna-De Soto Line.
1.012 Breed Interconnection Point, the point at Indiana
Company's Breed Station where the terminal facilities provided
therefor by Indiana Company shall connect to Indianapolis Company's
Petersburg-Breed Line.
SECTION 2. Interconnected Operation. Section 2.01 of Article 2 of
the 1960 Agreement is hereby modified to read:
"2.01 The systems of the parties, subject to the provisions of
this Section 2.01, shall be operated in continuous synchronism through the
interconnected facilities used to establish the Hanna and Breed
Interconnection Points. If synchronous operation of the systems through a
particular line becomes interrupted either manually or automatically because
of reasons beyond the control of either party or because of scheduled
maintenance that has been agreed to by both parties, the parties shall
cooperate so as to remove the cause of such interruption as soon as
practicable and restore such line to normal operating condition. Neither
party shall be responsible to the other party for any damage or loss of
revenue caused by any such interruption."
SECTION 3. Services. Section 3.03 of Article 3 of the 1960 Agreement
is hereby modified to read:
"3.03 The following service schedules are agreed to and hereby
made a part of this agreement:
Service Schedule A - Firm Power to Indianapolis Company
Service Schedule B - Emergency Service
Service Schedule C - Coordination of Scheduled Maintenance of
Generating Facilities
Service Schedule D - Energy Transfer
Service Schedule E - Interchange Power
Service Schedule F - Short Term Power
Service Schedule G - Interim Power to Indianapolis Company
Service Schedule H - Petersburg Power to Indiana Company."
Service Schedule H is attached hereto as Appendix I.
SECTION 4. Delivery Points. Section 5.01 of Article 5 of the 1960
Agreement is hereby modified to read:
"5.01 All electric energy delivered under this agreement shall
be of the character commonly known as three-phase sixty-cycle energy,
and shall be delivered at the nominal unregulated voltage designated
for the interconnection points as defined under Article 1 above and at
such other points and voltages as may be agreed upon by the parties."
SECTION 5. Metering. Section 5.02 of Article 5 of the 1960 Agreement
is hereby modified to read:
"5.02 Electric power and energy supplied and delivered under
this agreement shall be measured by suitable metering equipment
provided, owned, and, maintained by the owner at the metering points
as hereinbelow set forth and at such other points as may be agreed
upon by the parties; viz.:
5.021 In respect of the Hanna Interconnection Point by
138,000-volt metering equipment owned by Indianapolis Company
and installed at Indianapolis Company's Hanna Substation,
provided, however, that such metering equipment will be replaced
by 345,000-volt metering equipment on and after the date
provided for in subsection 5.1 of Appendix II.
5.022 In respect of the Breed Interconnection Point by
345,000-volt metering equipment owned by Indiana Company and
installed at Indiana Company's Breed Station.
SECTION 6. Other Terms and Conditions. Except as hereinabove
modified and amended, the terms and conditions of the 1960 Agreement and
Modification No. 1 shall remain in full force and effect.
SECTION 7. Regulatory Authorities. This agreement is made subject to
the jurisdiction of any governmental authority or authorities having
jurisdiction in the premises.
SECTION 8. Assignment. This agreement shall inure to the benefit of
and be binding upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ O.T. Fitzwater
O.T. Fitzwater
Chairman of the Board
Attest:
/s/ Ralph W. Husted
Ralph W. Husted
Secretary
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ Donald C. Cook
Donald C. Cook, President
Attest:
/s/ M.P. McGlone
M.P. McGlone
Assistant Secretary
<PAGE>
Appendix I
SERVICE SCHEDULE H
PETERSBURG POWER TO INDIANA COMPANY
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company), and Indiana & Michigan Electric Company (Indiana Company), made
and entered into as of the 1st day of August, 1967, shall become effective
on the day herein defined as Petersburg Unit No. 2 Commercial Date, and
shall continue in effect until April 30, 1971.
SECTION 2 - PETERSBURG POWER
2.1 Indianapolis Company shall sell and deliver and Indiana Company
shall take and pay for, on the terms and conditions provided for under this
agreement, electric power (Petersburg Power) and associated electric energy
(Petersburg Energy). Throughout the duration of this Service Schedule,
Indianapolis Company shall stand ready, subject to the provisions of this
agreement, to deliver to Indiana Company Petersburg Power and Petersburg
Energy in any amount desired by Indiana Company up to a maximum rate of
delivery equal to the Petersburg Entitlement as defined in subsection 3.16
of this Service Schedule.
SECTION 3 - DEFINITIONS
3.1 The following terms when used herein shall have the meanings
specified:
3.11 "Petersburg Unit No. 2" means the second steam-electric
generating unit which is to be placed in service at Petersburg
Station.
3.12 "Petersburg Unit No. 2 Nominal Rating" means the net
capability designated for such unit by the manufacturer, i.e., 450,000
kilowatts.
3.13 "Petersburg Unit No. 2 Predicted Capability" at any time
means the net capability of such unit determined by such methods and
procedures as may be mutually agreed upon.
3.14 "Petersburg Unit No. 2 Capability Ratio" at any time means
the ratio of Petersburg Unit No. 2 Predicted Capability at such time
to Petersburg Unit No. 2 Nominal Rating.
3.15 "Petersburg Contract Demand" means 200,000 kilowatts.
3.16 "Petersburg Entitlement" at any time means the lesser of
either 200,000 kilowatts or the product of the Petersburg Unit No. 2
Capability Ratio at such time and 200,000 kilowatts. The term defined
in this subsection 3.16 and the conditions for the supply of
Petersburg Power as set forth in subsection 2.1 shall be understood to
mean that Indianapolis Company is obligated to supply Petersburg Power
in amounts up to and including 200,000 kilowatts and associated energy
upon request of Indiana Company at any time that the Petersburg Unit
No. 2 net capability is not less than 450,000 kilowatts. Whenever the
capability of such unit is reduced by forced or scheduled outages of
components, or some other bonafide reason, the obligation of
Indianapolis Company to supply and of Indiana Company to take
Petersburg Power will be reduced in the same percentage as the
percentage reduction in capability. Accordingly, whenever such unit
is not in operation due to forced or scheduled outages there will be
no obligation to supply or to take Petersburg Power.
3.17 "Month" means calendar month.
3.18 "Petersburg Unit No. 2 Commercial Date" means the first
day of the following month, or on such day if it should be the first
day of a month, that both Petersburg Unit No. 2 and the transmission
facilities described in subsections 4.11, 4.13 and 4.15 of the
Facilities Schedule (Appendix II) are available for commercial
operation.
3.19 "Contract Period" means the period from Petersburg Unit
No. 2 Commercial Date to April 30, 1971 inclusive.
SECTION 4 - PETERSBURG STATION OPERATION AND MAINTENANCE
4.1 Indianapolis Company shall operate and maintain Petersburg
Station in a manner consistent with safe, prudent, and efficient operating
practice so that the availability to Indiana Company of power and associated
energy from Petersburg Unit No. 2 will be at the highest practicable level
attainable throughout the Contract Period. Also, throughout such period,
Indianapolis Company and Indiana Company shall coordinate the scheduled
maintenance of their respective generating facilities and will develop
specific plans for the coordination of maintenance covering units at the
Petersburg, Breed, and Tanners Creek Stations. Schedule maintenance outage
time of Petersburg Unit No. 2 will be held to a reasonable minimum
consistent with standards of sound and efficient practice. In the event of
a forced outage of Petersburg Unit No. 2, Indianapolis Company shall return
the unit to service as soon as possible.
4.2 During the Contract Period, maintenance outages shall be
scheduled for Petersburg Unit No. 2, consistent with obligations to the
Indiana Pool (Public Service Company of Indiana, Inc. and Indianapolis
Company), after consultation with Indiana company, so that such outages will
interfere least with operations of Indianapolis Company and Indiana Company.
SECTION 5 - PETERSBURG ENERGY
5.1 The provisions of Sections 2 and 3 of this Service Schedule
notwithstanding Indiana Company shall schedule and take Petersburg Energy at
a rate of not less than 100,000 kilowatt-hours per hour at any time that
Petersburg Unit No. 2 is in operation with a Predicted Capability at or
above 225,000 kilowatts.
5.2 The number of kilowatt-hours of Petersburg Energy to be delivered
to Indiana Company and the time of delivery thereof, subject to the rate of
delivery limit specified in subsection 2.1 of this Service Schedule, shall
be scheduled by Indiana Company, and the number of kilowatt-hours of such
Petersburg Energy so scheduled during each clock-hour shall be recorded as
provided for in Article 6 of this agreement. The aggregate number of
kilowatt-hours of Petersburg Energy so recorded for any month shall be used
for the purpose of effecting billings and payments under this Service
Schedule for such month. Each of the parties shall exercise due diligence
and reasonable care and foresight in arranging for and operating their
respective power sources so that amounts of Petersburg Energy shall be
delivered and taken in accordance with such delivery schedules.
SECTION 6 - COMPENSATION
6.1 Indiana Company shall pay to Indianapolis Company each month for
services provided for under this Service Schedule upon the following terms
and conditions:
Minimum Charge
For services provided for under this Service Schedule, Indiana
Company shall pay to Indianapolis Company a minimum charge each month
of $378,000.
Energy Charges
The charge for the total kilowatt-hours taken up to a quantity
equal to 330 times the Petersburg Contract Demand is included in the
Minimum Charge specified above.
For the remaining kilowatt-hours taken, the charge per kilowatt-
hour shall be.......................................... 1.70 mills
The charges provided for in this Section 6 shall be subject to adjustment in
accordance with the provisions of Section 7 of this Service Schedule.
Petersburg Energy Account
6.2 If, during any calendar month, the kilowatt-hours of Petersburg
Energy delivered by Indianapolis Company to Indiana Company under this
Service Schedule are less than the product of 330 hours and the Petersburg
Contract Demand, the number of kilowatt-hours of Petersburg Energy paid for
by Indiana Company for such month pursuant to subsection 6.1 above that were
not actually delivered to Indiana Company shall be set up in an account
(herein called Petersburg Energy Account) to the credit of Indiana Company.
During any subsequent month that there is a balance of kilowatt-hours
remaining to the credit of Indiana Company in such Petersburg Energy Account
and the kilowatt-hours of Petersburg Energy delivered to Indiana Company for
such month are in excess of the product of 330 hours and the Petersburg
Contract Demand for such month, a quantity of kilowatt-hours equal to (1)
such excess kilowatt-hours or (2) the balance of kilowatt-hours remaining to
the credit of Indiana Company in the Petersburg Energy Account, whichever
amount is the smaller, shall be billed to Indiana Company at no charge
therefor, excepting such charges as are applicable thereto in accordance
with Section 7 of this Service Schedule, and the Petersburg Energy Account
shall be charged with such number of kilowatt-hours so billed to Indiana
Company.
SECTION 7 - FUEL COST ADJUSTMENT
7.1 The following terms when used herein shall have the meanings
specified:
7.11 Account No. 501 Fuel -- The production expense account of
the Uniform System of Accounts prescribed for Public Utilities and
Licensees by the Federal Power Commission as prevailing during
January, 1961.
7.12 Fuel Cost -- The total cost of all the components of cost
at the Petersburg Station chargeable to Account No. 501 Fuel during a
specified period divided by the total millions of Btu in fuel charged
to said account at the Petersburg Station during such period,
expressed in cents per million Btu.
7.2 The charges provided for in Section 6 of this Service Schedule
are based upon a fuel cost of sixteen and one-half cents ($0.165) per
million Btu at the Petersburg Station. In the event such fuel cost for any
month is above sixteen and one-half cents ($0.165) per million Btu by at
least one mill, an additional charge during the next succeeding month shall
be made on the kilowatt-hours of Petersburg Energy actually delivered during
such succeeding month at a rate of 0.009 mills per kilowatt-hour for each
full mill increase in such fuel cost above sixteen and one-half cents
($0.165) per million Btu. In the event such fuel cost for any month is less
than sixteen and one-half cents ($0.165) per million Btu by at least one
mill, the bill rendered to Indiana Company for the next succeeding month
shall be decreased by an amount equal to the kilowatt-hours of Petersburg
Energy actually delivered during such succeeding month at a rate of 0.009
mills per kilowatt-hour for each full mill decrease in such fuel cost below
sixteen and one-half cents ($0.165) per million Btu.
SECTION 8 -- BILLINGS AND PAYMENTS
8.1 Billings and payments for the purposes of effecting settlements
under this Service Schedule shall be made in accordance with and subject to
the terms and conditions of Article 7.
SECTION 9 -- TAXES
9.1 It is expressly agreed and made a provision of this Service
Schedule that if at any time during the term hereof there should be levied
and/or assessed against Indianapolis Company any direct tax by any taxing
authority on the Petersburg Power and/or Petersburg Energy manufactured,
generated, produced, converted, sold, purchased, transmitted, interchanged,
exchanged, exported or imported by Indianapolis Company, in addition to or
different from the forms of such direct taxes now being levied and/or
assessed against Indianapolis Company or any increase in the rate of such
existing or future direct taxes, which Indianapolis Company could
demonstrate to be unduly burdensome to it in the performance of the
obligations herein provided, then in such event, the parties shall endeavor
to make such an agreement in regard to sharing the burden created by such
tax as appears to be equitable and proper under the circumstances.
<PAGE>
Appendix II
FACILITIES SCHEDULE
Description of Transmission Line and Station Facilities Provided and
To Be Provided by Indiana Company and Indianapolis Company
Under Agreement, dated December 30, 1990, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Facilities Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company), made and
entered into as of the 1st day of August, 1967, shall continue in effect
throughout the duration of the agreement of which it is a part.
SECTION 2 - GENERAL
2.1 This Facilities Schedule is included in this agreement for the
purpose of identifying the transmission line and station facilities provided
and to be provided by Indiana Company and Indianapolis Company pursuant to
Article 1 of the 1960 Agreement.
SECTION 3 - HANNA INTERCONNECTION POINT
3.1 Indiana Company shall continue to own and provide at its own
expense the following described facilities; viz.:
3.11 A 345,000-volt single circuit steel tower transmission
line (hereby designated and herein called Tanners Creek-Hanna-De Soto
Line), approximately 138 miles in length, constructed with two 954,000
cm ACSR conductors per phase, and suitable ground wires, extending in
a generally northerly direction from Indiana Company's Tanners Creek
Station via Indianapolis Company's Hanna Substation, located near
Indianapolis, to Indiana Company's De Soto Substation, located near
Muncie.
3.12 On the 345,000-volt double circuit steel tower
transmission line that extends from Tanners Creek Station to Indiana
Company's Sorenson Substation, a second 345,000-volt circuit extending
from De Soto Substation to Sorenson Substation, approximately 48 miles
in length, with main conductors of 1.75 inches diameter 1,414,000 cm
ACSR expanded conductor.
3.13 At Tanners Creek Station, the necessary terminal
equipment, including facilities suitable for the control of the
Tanners Creek-Hanna-De Soto Line described in subsection 3.11 above
and essential to the protection of line and station equipment; such
terminal equipment includes one 345,000-volt ultra-high speed
automatic reclosing circuit breaker, appurtenant disconnecting and
associated equipment, carrier current relays and associated carrier
current equipment, and every item required and suitable for the
control of said line and for the coordination of such control with
terminal equipment provided and to be provided by Indianapolis Company
pursuant to subsections 3.21 and 3.31 below.
3.14 At Tanners Creek Station and other suitable locations,
such communication, telemetering, and load control facilities
determined by the parties as necessary for the proper and efficient
interconnected operation of the parties' systems.
3.2 Indianapolis Company shall continue to own and provide at its own
expense the following described facilities until modified as provided in
subsection 3.3 below; viz.:
3.21 At Hanna Substation, the necessary terminal equipment,
including facilities suitable for the control of the Tanners
Creek-Hanna-De Soto Line and essential to the protection of line and
station equipment; such terminal equipment includes one
345,000/138,000-volt, three-phase auto-transformer having a nominal
rating of 250,000 kilovolt-amperes, two 138,000-volt ultra-high speed
automatic reclosing circuit breakers, appurtenant disconnecting and
associated equipment, carrier current relays and associated carrier
current equipment, and every item required and suitable for the
control of said line and for the coordination of such control with
terminal equipment provided by Indiana Company pursuant to subsection
3.13 above.
3.22 At Hanna Substation, such suitable 138,000-volt metering
equipment as described in Section 5.03 of Article 5 of the 1960
Agreement.
3.23 At Hanna Substation and other suitable locations, such
communication, telemetering, and load control facilities determined by
the parties as necessary for the proper and efficient interconnected
operation of the parties' systems.
3.3 Indianapolis Company shall install, or cause to be installed, own and
provide at its own expense the following described facilities on and after
the date provided for in subsection 5.1 of this Appendix II; viz.:
3.31 At Hanna Substation, the necessary terminal equipment
including facilities suitable for the independent control of the
Hanna-Desoto and Hanna-Tanners Creek sections of the Tanners
Creek-Hanna-Desoto Line, for the control of the Thompson-Hanna Line
described in subsection 4.12 below and essential to the protection of
line and station equipment. Such terminal equipment shall include two
345,000/138,000-volt, three-phase auto-transformers having an
aggregate nominal rating of not less than 525,000 kilovolt-amperes and
not less than three 345,000-volt ultra-high-speed automatic reclosing
circuit breakers, appurtenant disconnecting and associated equipment,
carrier current relays and associated carrier current equipment, and
every item required and suitable for the control of the Hanna-Desoto,
Hanna-Tanners Creek and Thompson-Hanna Lines, for the coordination of
such control with terminal equipment provided by Indiana Company at
the Tanners Creek and Desoto Substations and for coordination of
controls to assure satisfactory and reliable operation of the
Breed-Petersburg-Thompson-Hanna 345,000-volt transmission link
described in subsections 4.11 and 4.12 below.
3.32 At Hanna Substation, such suitable 345,000-volt metering
equipment as described in Section 5.03 of Article 5 of the 1960
Agreement.
3.33 AT Hanna Substation and other suitable locations, such
communication, telemetering, and load control facilities determined by
the parties as necessary for the proper and efficient operation of the
parties' systems.
3.4 The Hanna Interconnection Point shall be that point at Hanna
Substation where the terminal facilities provided therefor by Indianapolis
Company shall be connected to the Tanners Creek-Hanna-De Soto Line.
SECTION 4 -- BREED INTERCONNECTION POINT
4.1 Indianapolis Company shall install, or cause to be installed, own
and provide at its own expense the following described facilities; viz.:
4.11 A 345,000-volt single circuit steel tower transmission
line (hereby designated and herein called Petersburg-Breed Line),
approximately 55 miles in length, constructed with two 954,000 cm ACSR
conductors per phase or with conductors of at least equivalent
conductivity and suitable ground wires, to extend in a generally
northerly direction from Indianapolis Company's Petersburg Station to
Indiana Company's Breed Station.
4.12 A 345,000-volt single circuit steel tower transmission
line (hereby designated and herein called Thompson-Hanna Line),
approximately 19 miles in length, constructed with two 954,000 cm ACSR
conductors per phase or with conductors of at least equivalent
conductivity, and suitable ground wires, to extend in a generally
easterly direction from Indianapolis Company's Thompson Substation,
located near Indianapolis at the intersection of Thompson Road with
the Marion-Hendricks County line, to Hanna Substation. Said Thompson
Substation shall be installed in the Indianapolis Company's
345,000-volt line extending from its Petersburg Station to
Indianapolis Company's Guion Substation located near Indianapolis at
4000 West 56th Street.
4.13 At Petersburg Station, the necessary terminal equipment
including facilities suitable for the control of the Petersburg-Breed
Line and essential to the protection line and station equipment. Such
terminal equipment shall include not less than one 345,000-volt
ultra-high-speed automatic reclosing circuit breaker, appurtenant
disconnecting and associated equipment, carrier current relays and
associated carrier current equipment, and every item required and
suitable for the control of said line and for the coordination of such
control with terminal equipment to be provided by Indiana Company
pursuant to subsection 4.21 below.
4.14 Necessary and appropriate terminal facilities including
345,000-volt ultra-high-speed automatic reclosing circuit breakers and
protective equipment at Hanna and Thompson Substations and Petersburg
Station in order to assure satisfactory and reliable operation of the
Breed-Petersburg-Thompson-Hanna 345,000-volt transmission link.
4.15 At Petersburg Station and other suitable locations, such
communication, telemetering, and load control facilities determined by
the parties as necessary for the proper and efficient interconnected
operation of the parties' system.
4.2 Indiana Company shall install, or cause to be installed, own and
provide at its own expense the following described facilities, viz.:
4.21 At Breed Station, the necessary terminal equipment
including facilities suitable for the control of the Petersburg-Breed
Line and essential to the protection of line and station equipment.
Such terminal equipment shall include not less than one 345,000-volt
ultra-high-speed automatic reclosing circuit breaker, appurtenant
disconnecting and associated equipment, carrier current relays and
associated carrier current equipment, and every item required and
suitable for the control of said line and for the coordination of such
control with terminal equipment to be provided by Indianapolis Company
pursuant to subsection 4.13 above.
4.22 The Breed Interconnection Point shall be that point at
Breed Station where the terminal facilities provided therefor by
Indiana Company shall be connected to the Petersburg-Breed Line.
SECTION 5 --COMMON FACILITIES OBLIGATIONS
5.1 Subject to accidents, strikes, litigation, delays in securing
delivery of equipment or other similar or dissimilar causes beyond the
reasonable control of the parties, including the procuring of the necessary
materials and labor and the obtaining of all the necessary governmental
authorizations and permits approving the use of such labor and materials and
the installation of the facilities to be provided by the parties, as
hereinabove described in subsection 3.3 and Section 4, the installation of
such facilities shall be completed and in service on or before July 1, 1968.
Should the installation of a particular portion of said facilities be
delayed beyond the date so designated due to the aforesaid causes it shall
nevertheless be completed as soon thereafter as practicable.
5.2 The parties shall cooperate with one another so as to assure the
maximum practicable coordination of design of the facilities to be installed
by each of them with new and existing facilities of the other.
5.3 The parties shall each keep, or shall cause to be kept, the
lines, together with all associated equipment and appurtenances, described
in this Facilities Schedule that are located on their respective sides of
the interconnection points in a suitable condition of repair at all times,
each at its own expense, in order that said lines will operate in a reliable
and satisfactory manner and in order that reduction in the capacity of said
lines will be avoided to the extent practicable.
SECTION 6--FUTURE TRANSMISSION FACILITIES
6.1 The provision of facilities by each party as set forth above is
governed by (1) the desired interconnection capacity as it relates to
services to be furnished under this agreement and (2) the correlated overall
transmission requirements of each party that may be reasonably foreseen as
of the day first above written. The expansion of the parties respective
transmission systems during the duration of this agreement consistent with
sound engineering and economic practices, may dictate that a party add to,
replace, relocate, or remove portions of facilities so provided by it.
Either party shall have the right to so add to, replace, relocate, or remove
portions of facilities so provided by it; subject, however, to the
understanding that in so doing such party does not reduce the transmission
capacity of the interconnections hereinabove described or interfere with the
performance of this agreement in complete accord with its terms and
conditions.
<PAGE>
Modification No. 3
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of February 1, 1971
<PAGE>
THIS AGREEMENT, made and entered into as of the first day of February,
1971, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana
Company), also an Indiana corporation;
WITNESSETH,
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, and modifications
thereto, dated November 14, 1963 and August 1, 1967, (said Interconnection
Agreement, as so modified, being herein called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
SECTION 1. Subsection 3.11 of Service Schedule F of the 1960
Agreement is hereby modified to read:
"3.11 Demand Charge
For the billing demand for each week, at the rate of $0.40 per
kilowatt for such week. In the event the amount of Short Term Energy
taken is reduced upon request of the supplying party, the demand
charge for the week during which such reduction is made shall be
reduced by one-sixth (1/6) of the aforesaid weekly demand charge per
kilowatt of reduction for each day (other than any Sunday) during
which any reduction is in effect."
SECTION 2. This Modification No. 3 shall be effective from the date
hereinabove first written to the expiration of Service Schedule F of the
1960 Agreement.
SECTION 3. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
SECTION 4. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 5. This agreement shall inure to the benefit of and be
binding upon the successor and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ O.T. Fitzwater
O.T. Fitzwater
Chairman of the Board
ATTEST:
/s/ Ralph W. Husted
Ralph W. Husted, Secretary
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ G.V. Paterson
Vice President
ATTEST:
/s/ signature illegible
Assistant Secretary
<PAGE>
Modification No. 4
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of September 1, 1972
<PAGE>
THIS AGREEMENT, made and entered into as of the first day of
September, 1972, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;
WITNESSETH,
WHEREAS, Indianapolis Company entered into an Interconnection
Agreement, dated December 30, 1960, and modifications thereto, dated
November 14, 1963, August 1, 1967 and February 1, 1971 (said Interconnection
Agreement, as so modified, being herein called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agreed as follows:
SECTION 1. Service Schedule B--Emergency Service, Service Schedule F-
- -Short Term Power, and Service Schedule G--Interim Power to Indianapolis
Company are hereby cancelled and a new Service Schedule B--Emergency Service
and a new Service Schedule F--Short Term Power are substituted for said
Service Schedule B and F, respectively. A new Service Schedule I--Limited
Term Power (Firm) is hereby agreed to. The new Service Schedules B, F and I
are attached hereto as Appendix I, Appendix II, and Appendix III,
respectively.
SECTION 2. Section 3.03 of Article 3 of the 1960 Agreement is hereby
modified to read:
"3.03 The following service schedules are agreed to and hereby
made a part of this agreement:
Service Schedule A--Firm Power to Indianapolis
Service Schedule B--Emergency Service
Service Schedule C--Coordination of Schedule Maintenance of
Generating Facilities
Service Schedule D--Energy Transfer
Service Schedule E--Interchange Power
Service Schedule F--Short Term Power
Service Schedule I--Limited Term Power (Firm)
SECTION 3. Article 3 of the 1960 Agreement is further modified by the
addition thereto of the following Section 3.04:
"3.04 As used in the Schedules of this Agreement the
out-of-pocket cost of providing energy means all operating,
maintenance, tax, and other expenses incurred, as of the Delivery
Points and taking into account transmission losses, if any, that would
not have been incurred if the energy had not been supplied."
SECTION 4. The 1960 Agreement, as hereinbefore modified is made
subject to the jurisdiction of any governmental authority or authorities
having jurisdiction in the premises and either party may, at any time or
from time to time, unilaterally take any action before or with such
authorities with respect to any terms or conditions of this Agreement that
it deems desirable and in such event the terms and conditions under which
service shall be rendered hereunder shall be the terms and conditions
authorized by such authority provided, however, that no such action shall be
taken by such party except after 60 days prior written notice to the other
party of its intention to do so.
SECTION 5. This Modification No. 4 shall be effective from the date
hereinbefore first written to the expiration of the 1960 Agreement.
SECTION 6. Except as hereinbefore modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
SECTION 7. This agreement shall insure to the benefit of and be
binding upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Edwin L. Cassidy
President
ATTEST:
/s/ Ralph W. Husted
Secretary
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ G.V. Patterson
Vice President
ATTEST:
/s/ William E. Olson
Assistant Secretary
<PAGE>
APPENDIX I
SERVICE SCHEDULE B
EMERGENCY SERVICE
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on September 1, 1972 and shall continue throughout the
duration of the agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Subject to the provisions of subsection 2.2 of this Section 2, in
the event of an emergency on the system of either party jeopardizing its
ability to meet its native load and other firm commitments, the other party
shall, upon request, deliver during a period of not exceeding 48 consecutive
hours to the requesting party electric energy ("Emergency Energy") in
amounts up to a rate of 50,000 kilowatthours per hour and such additional
amounts as in its sole judgement can be delivered without imposing burdens
on its system's operations. Either party may, upon request, deliver energy
hereunder in the event of an emergency jeopardizing the ability of a system
interconnected with the system of the requesting party to meet its native
load and other firm commitments. Every request hereunder shall identify the
emergency that gave rise to it.
2.2 Neither party shall be obligated to deliver energy hereunder
during the first 48 hours following a prior emergency during which it is
delivering electric energy under another mutual emergency interchange
agreement or at any time that delivery of such energy will impair its own
system's ability to meet its native load and other firm commitments.
SECTION 3 --COMPENSATION
3.1 Emergency Energy shall be settled for, at the option of the party
supplying it, either by the return of equivalent energy upon request of such
party or by payment of the greater of (a) 110% of the out-of-pocket cost of
supplying it, and (b) 17.5 mills per kilowatt-hour thereof.
<PAGE>
APPENDIX II
SERVICE SCHEDULE F
SHORT TERM POWER
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective September 1, 1972 and shall continue in effect throughout
the duration of the agreement of which it is a part subject to the
provisions of Section 4 hereof.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party may reserve from the other party, for periods of one
or more weeks or for periods less than one week, electric power ("Short Term
Power") whenever, in the sole judgment of the party requested to reserve the
same, such power is available. As used herein the term "week" shall mean
any seven consecutive days.
2.11 Prior to each reservation of Short Term Power, the number
of kilowatts to be reserved, the period of the reservation, and the
source of the power if the supplying party is in turn reserving them
from another system, shall be determined by the parties. Such
determination shall be confirmed in writing. If during such period
conditions arise that could not have been reasonably foreseen at the
time of the reservation and cause the reservation to be burdensome to
the supplying party, such party may by written notice to the reserving
party, or oral notice later confirmed in writing, reduce the number of
kilowatts reserved by such amount and for such time as it shall
specify in such notice, but kilowatts reserved hereunder that the
supplying party is in turn reserving from another system may be
reduced only to the extent they are reduced by such other system.
2.12 During each period that Short Term Power has been
reserved, the party that has agreed to supply such power shall upon
call provide Short Term Power up to and including the number of
kilowatts then reserved and deliver electric energy ("Short Term
Energy") to the reserving party at a rate during each hour of up to
and including such number.
SECTION 3--COMPENSATION
3.1 The reserving party shall pay the supplying party:
3.11 for any week that Short Term Power is reserved, $0.40 per
kilowatt reserved less, for each day during any part of which the
amount of such Short Term Power is reduced (other than Sunday) by the
supplying party, one-sixth of said $0.40 per kilowatt of the
reduction. (Except that in no event shall the total of such
deductions in any week exceed $0.40 per kilowatt.) For each period
less than one week that Short Term Power is reserved, $0.10 per
kilowatt reserved per day less, for any day during any part of which
the amount of Short Term Power is reduced by the supplying party,
$0.10 per kilowatt of the reduction; plus
3.12 for each kilowatt of the reserved Short Term Power that is
purchased by the supplying party from another system, prearranged in
accordance with subsection 2.11 of this schedule (a) the excess, if
any, of the amount paid therefor by the supplying party over the
charge therefor under Section 3.11 of this Schedule (or if such amount
is less than such charge, minus the deficiency) plus (b) for each week
such Short Term Power is reserved, $0.125 per kilowatt less, for each
day (other than Sunday) during any part of which any of such Short
Term Power is not received from such other system, $0.021 per kilowatt
not received. (Except that in no event shall the total of such
deductions in any week exceed $0.125 per kilowatt.); plus
3.13 110% of the out-of-pocket cost of supplying Short Term
Energy called for during such periods under subsection 2.12 of this
Schedule that comes from the supplying party's own system and 115% of
the out-of-pocket cost of supplying all other such Short Term Energy.
SECTION 4 -- TERMINATION
4.1 Either party upon one year prior written notice to the other may
terminate this Schedule.
<PAGE>
APPENDIX III
SERVICE SCHEDULE I
LIMITED TERM POWER (FIRM)
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on September 1, 1972 and shall continue throughout the
duration of the agreement of which it is a part subject to the provisions of
Section 4 hereof.
SECTION 2 -- SERVICES TO BE RENDERED
2.1 Either party may arrange to reserve from the other party, for
periods of not less than one or more than 12 months, such electric power
("Limited Term Power (Firm)") whenever, in the sole judgment of the party
requested to reserve the same, such power is available.
2.11 Prior to each reservation of Limited Term Power (Firm) the
number of kilowatts to be reserved, the period of the reservation, and
the source of the power if the supplying party is in turn reserving
them from another system, shall be determined by the parties. Such
determination shall be confirmed in writing.
2.12 During each period that Limited Term Power (Firm) has been
reserved, the party that has agreed to supply power shall upon call
provide Limited Term Power (Firm) up to and including the number of
kilowatts then reserved and deliver electric energy ("Limited Term
Energy (Firm)") to the reserving party at a rate during each hour of
up to and including such number, except when such deliveries would in
the judgment of the supplying party have to be interrupted or reduced
to preserve the integrity of or to prevent or limit any instability on
its system.
SECTION 3--COMPENSATION
3.1 The reserving party shall pay the supplying party
3.11 for any month that Limited Term Power (Firm) is reserved,
$2.15 per kilowatt reserved; plus
3.12 for each kilowatt of the reserved Limited Term Power
(Firm) purchased by the supplying party from another system,
prearranged in accordance with subsection 2.11 of this Schedule, (a)
the excess, if any, of the amount paid therefor by the supplying party
over the charge therefor under Section 3.11 of this Schedule (or, if
such amount is less than such charge, minus the deficiency) plus (b)
for each month such Limited Term Power (Firm) is reserved $0.55 per
kilowatt; plus
3.13 110% of the out-of-pocket cost of supplying Limited Term
Energy (Firm) called for during such period under subsection 2.2 of
this Schedule that comes from the supplying party's own system and
115% of the out-of-pocket cost of supplying all other such Limited
Term Energy (Firm), prearranged in accordance with subsection 2.11 of
this Schedule.
SECTION 4--TERMINATION
4.1 Either party upon one year prior written notice to the other may
terminate this Schedule; however, all prior commitments covered by this
Schedule must be fulfilled.
<PAGE>
Modification No. 6
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960,
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of May 1, 1974
<PAGE>
THIS MODIFICATION NO. 6, made and entered into as of the first day of
May, 1974, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;
WITNESSETH,
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971 and
September 1, 1972, (said Interconnection Agreement, as so modified, being
herein called the 1960 Agreement); and
WHEREAS, another proposed modification, being Modification No. 5
providing for a Fuel Conservation Power and Energy Rate, was tentatively
filed with the Federal Power Commission by Indianapolis Company on April 4,
1974 and subsequently withdrawn by letter dated May 22, 1974, Indiana
Company never having executed such modification or concurred in such filing;
and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.40 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.45, and is also hereby
modified by the deletion therefrom of the dollar quantity $0.10 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.11.
Section 2. Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $2.15 and by the substitution
therefor of the dollar quantity $2.50.
Section 3. The 1960 Agreement, as amended hereby, is made subject to
the jurisdiction of any governmental authority or authorities having
jurisdiction in the premises and either party may, at any time or from time
to time, unilaterally take any action before or with such authorities with
respect to any terms or conditions of the 1960 Agreement, as amended hereby,
that it deems desirable, and in such event the terms and conditions
authorized by such authority; provided, that no such action shall be taken
by such party except after 60 days prior written notice to the other party
of its intention to do so.
Section 4. This Modification No. 6 shall be effective from the date
first above-written to the expiration date of the 1960 Agreement.
Section 5. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
Section 6. This Modification No. 6 shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Edwin L. Cassidy
President
Attest:
/s/ Marcus E. Woods
Secretary
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ G.V. Patterson
Vice President
Attest:
/s/ W.E. Olson
Assistant Secretary
<PAGE>
MODIFICATION NO. 7
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
AND
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of April 1, 1976
<PAGE>
THIS MODIFICATION NO. 7, made and entered into as of the first day of
April, 1976, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;
W I T N E S S E T H ,
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, and May 1, 1974, (said Interconnection Agreement, as so
modified, being herein called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.45 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.50, and is also hereby
modified by the deletion therefrom of the dollar quantity $0.11 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.125.
Section 2. Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $2.50 and by the substitution
therefor of the dollar quantity $2.75.
Section 3. The 1960 Agreement as hereinabove modified and
supplemented by the parties, is made subject to the jurisdiction of any
governmental authorities having jurisdiction in the premises, and any party
may, at any time or from time to time, unilaterally take any action before
or with such authorities with respect to any terms or conditions of the 1960
Agreement as hereinabove modified or supplemented, and as it may at any time
hereafter be modified and supplemented, and as it may at any time hereafter
be modified and supplemented by the parties, that it deems desirable, and in
such event the terms and conditions under which service shall be rendered
hereunder shall be the terms and conditions authorized by such authority.
Section 4. This Modification No. 7 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.
Section 5. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
Section 6. This Modification No. 7 shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Ralph W. Husted, Chairman and
Chief Executive Officer
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ G.V. Patterson
Vice President
<PAGE>
Modification No. 8
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960,
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of March 1, 1977
<PAGE>
THIS MODIFICATION NO. 8, made and entered into as of the first day of
March, 1977, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;
WITNESSETH,
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971 and
September 1, 1972, May 1, 1974 and April 1, 1976 (said Interconnection
Agreement, as so modified, being herein called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth, the parties agree as follows:
Section 1. Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.50 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.60 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.125 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.15.
Section 2. Subsection 3.12 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified and supplemented by the
deletion therefrom of the dollar quantities $0.125 and $0.021 wherever they
appear therein and by the substitution therefor of the dollar quantities
$0.15 and $0.025, respectively.
Section 3. Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $2.75 and by the substitution
therefor of the dollar quantity $3.25.
Section 4. Subsection 3.12 of Section 3 of Service Schedule I -
Limited Term Power of the 1960 Agreement is hereby modified and supplemented
by the deletion therefrom of the dollar quantity $0.55 wherever it appears
therein and by the substitution therefor of the dollar quantity $0.65.
Section 5. The 1960 Agreement as hereinabove modified and
supplemented and as it may at any time hereafter be modified and supplied by
the parties, is made subject to the jurisdiction of any governmental
authority or authorities having jurisdiction in the premises. Nothing
contained in the 1960 Agreement shall be construed as affecting in any way
the right of either party to the 1960 Agreement to unilaterally make
application to the Federal Power Commission for a change in rates, charges,
classification or service, or any rule, regulation or contract relating
thereto, under Section 205 of the Federal Power Act and pursuant to the
Commission's Rules and Regulations promulgated thereunder.
Section 6. This Modification No. 8 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.
Section 7. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
Section 8. This Modification No. 8 shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane G. Todd
Zane G. Todd, Chairman of
the Board and President
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ G.V. Patterson
G.V. Patterson, Vice President
<PAGE>
March 1, 1977
Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595B
Indianapolis, Indiana 46206
Gentlemen:
This letter is confirmation of the understandings which have been
reached upon a review of the Emergency Service Schedule between our
companies.
Subsection 3.1 of Service Schedule B of the Interconnection Agreement
between our companies, dated December 30, 1960 as heretofore modified (1960
Agreement), is hereby modified by the deletion therefrom of the dollar
quantity "seventeen and one-half (17.5) mills" and the substitution therefor
of the dollar quantity "three ($.03) cents".
This modification shall be effective on and after March 1, 1977 and
until the earlier of either the expiration of the term of the 1960
Agreement, or until further amended or modified under the terms of the 1960
Agreement.
If the foregoing correctly states our understanding please so indicate
by signing and returning the enclosed copy of this letter.
Very truly yours,
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ G.V. Patterson
Vice President
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane G. Todd
<PAGE>
Modification No. 10
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of March 15, 1977
<PAGE>
THIS MODIFICATION NO. 10, made and entered into as of the fifteenth
day of February, 1977, between INDIANAPOLIS POWER & LIGHT COMPANY
(Indianapolis Company), an Indiana corporation, and INDIANA & MICHIGAN
ELECTRIC COMPANY (Indiana Company), also an Indiana corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, May 1, 1974 and April 1, 1976 and March 1, 1977 (said
Interconnection Agreement, as so modified, being herein called the 1960
Agreement); and
WHEREAS, the parties desire to further modify the 1960 Interconnection
Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Effective as of February 15, 1977 Service Schedule E -
Interchange Power in the form attached hereto as Appendix I, shall be
substituted for Service Schedule E in the form heretofore made a part of the
1960 Agreement.
Section 2. Except as hereinabove modified and supplemented, all the
terms and conditions of the 1960 Agreement shall remain in full force and
effect.
Section 3. This Modification No. 10 shall insure to the benefit of
and be binding upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this Modification
No. 10 to be executed by their duly authorized officers as of the day and
year first above written.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane G. Todd
Chairman of the Board and President
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ Frank N. Rien
Vice President
<PAGE>
APPENDIX I
SERVICE SCHEDULE E
INTERCHANGE POWER
Under Agreement, dated December 30, 1960, between
Indianapolis Power & Light Company and
Indiana & Michigan Electric Company
Section 1 - DURATION
1.1 This Service Schedule, a part of and under the Interconnection
Agreement, dated as of the 30th day of December, 1960 between Indianapolis
Power & Light Company (Indianapolis Company) and Indiana and Michigan
Electric Company (Indiana Company), shall become effective as of March 15,
1977, and shall continue in effect throughout the duration of said
Interconnection Agreement of which it is a part.
Section 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 Either party may arrange to purchase from any party of the
other system electric energy ("Economy Energy") whenever it is
possible to effect a saving thereby and, in the sole judgment of the
party requested to supply the same, such energy is available. Economy
Energy may also be arranged to be obtained from or delivered to
systems interconnected with the parties, but not a party to this
Agreement. Prior to each delivery of Economy Energy, the amount and
time of delivery and the charge therefore shall be determined by the
parties.
Non-Displacement Energy
2.2 It is further recognized that from time to time occasions
will arise when the effecting of transactions as provided under
subsection 2.1 next above will be impracticable but that at the same
time one of the parties may have electric energy (herein called
"Non-Displacement Energy") which it is willing to make available from
surplus capacity either on its own system or from sources outside its
own system or both, that can be utilized advantageously for short
intervals by the other party. It shall be the responsibility of the
party desiring Non-Displacement Energy to initiate the receipt and
delivery of such energy. The party desiring such receipt of energy
shall notify the other party of the extent to which it desires to use
Non-Displacement Energy, and whenever in its sole judgment such other
party determines that it has Non-Displacement Energy available,
schedules providing the periods and extent of use shall be mutually
agreed upon. Neither party shall be obligated to make any
Non-Displacement Energy available to the other.
Section 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by either party
from the other shall be based on the principle that the party
purchasing it shall pay the out-of-pocket cost of the party supplying
such energy and that the resulting savings to the receiving party
shall be equally shared by the supplying and receiving parties.
3.2 When Economy Energy is obtained from or delivered to other
systems interconnected with the parties, but not signatories to this
Agreement, payments shall be based on the out-of-pocket cost of the
supplying party or system providing the energy and an allocation of
the gross savings which are defined as the difference between (1) what
the out-of-pocket cost of the receiving party or system would have
been to generate such energy, and (2) the out-of-pocket cost of the
supplying party or system providing the energy such allocation shall
be made as provided in subsections 3.21 and 3.22 hereinbelow.
3.21 Each party or system participating in the
transaction other than the supplying and receiving parties or
systems, shall be paid (a) its cost of purchasing the energy
supplied, plus (b) its cost of additional transmission losses
incurred, plus (c) fifteen per cent of the gross savings
remaining after deducting all such payments for transmission
losses.
3.22 The supplying party or system shall be paid its
out-of-pocket costs of providing the energy, plus one-half of
the gross savings remaining after deducting all (b) and (c)
payments made under subsection 3.21. The receiving party or
system shall be entitled to the other one-half of the gross
savings remaining after deducting all (b) and (c) payments made
under subsection 3.21.
Non-Displacement Energy
3.3 Non-Displacement Energy delivered hereunder shall be
settled for either by the return of equivalent energy or, at the
option of the party that supplied such energy, by payment of the
out-of-pocket cost - such cost being as of the delivery point or
points, as provided for in Section 5.01 of said Interconnection
Agreement, taking into account electrical losses incurred from the
source or sources of such energy to said delivery point or points - of
the supplying party in generating or supplying such energy plus ten
per cent of such cost. If equivalent energy is returned, it shall be
returned at times when the load conditions of the party receiving it
are equivalent to the load conditions of such party at the time the
energy for which it is returned was delivered or, if such party elects
to have equivalent energy returned under different conditions, it
shall be returned in such amounts, to be agreed upon by the Operating
Committee, as will compensate for the difference in conditions.
<PAGE>
Modification No. 11
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of January 1, 1979
<PAGE>
THIS MODIFICATION NO. 11, made and entered into as of the first day of
January, 1979, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;
WITNESSETH,
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, May 1, 1974 and April 1, 1976 and March 1, 1977 and March
15, 1977 (said Interconnection Agreement, as so modified, being herein
called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity of $0.60 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.70 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.15 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.175.
Section 2. Subsection 3.12 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified and supplemented by the
deletion therefrom of the dollar quantities $0.15 and $0.025 wherever they
appear therein and by the substitution therefor of the dollar quantities
$0.175 and $0.029 respectively.
Section 3. Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $3.25 and by the substitution
therefor of the dollar quantity $3.75.
Section 4. Subsection 3.12 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified and
supplemented by the deletion therefrom of the dollar quantity $0.65 wherever
it appears therein and by the substitution therefor of the dollar quantity
$0.75.
Section 5. This Modification No. 11 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.
Section 6. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
Section 7. This Modification No. 11 shall inure to the benefit of,
and be binding upon, the successors and assigns of the respective parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Carl B. Vance
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ Frank N. Rien
<PAGE>
Modification No. 13
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of January 1, 1980
<PAGE>
THIS MODIFICATION NO. 13, made and entered into as of the first day of
January, 1980, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, May 1, 1974 and April 1, 1976, March 1, 1977, March 15,
1977, January 1, 1979 and March 1, 1979 (said Interconnection Agreement, as
so modified, being herein called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth,
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity of $0.70 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.85 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.175 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.24.
Section 2. Subsection 3.12 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified and supplemented by the
deletion therefrom of the dollar quantities $0.175 and $0.029 wherever they
appear therein and by the substitution therefor of the dollar quantities
$0.24 and $0.040 respectively.
Section 3. Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $3.75 and by the substitution
therefor of the dollar quantity $4.50.
Section 4. Subsection 3.12 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified and
supplemented by the deletion therefrom of the dollar quantity $0.75 wherever
it appears therein and by the substitution therefor of the dollar quantity
$1.00.
Section 5. This Modification No. 13 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.
Section 6. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
Section 7. This Modification No. 13 shall inure to the benefit of,
and be binding upon, the successors and assigns of the respective parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane G. Todd
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ Frank N. Rien
<PAGE>
Modification No. 14
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of April 5, 1982
<PAGE>
THIS MODIFICATION NO. 14, made and entered into as of the fifth day of
April, 1982 between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation.
WITNESSETH:
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, which Agreement was
modified hereafter (said Interconnection Agreement, as so modified, being
herein called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Section 3--Compensation of Service Schedule F - Short Term
Power of the 1960 Agreement shall be modified and amended to read as
follows:
"Section 3 -- Compensation
3.1 When Indianapolis Company is the supplying party and Indiana
Company is the reserving party, the reserving party shall pay the supplying
party:
3.11 For any week that Short Term Power is reserved, $1.05 per
kilowatt reserved; less, for each day during any part of which the
amount of such Short Term Power is reduced (other than Sunday) by the
supplying party, one-sixth of said $1.05 per kilowatt of the reduction
(except that in no event shall the total of such deductions in any
week exceed $1.05 per kilowatt). For each period less than one week
that Short Term Power is reserved, one-fifth of the weekly rate per
kilowatt reserved per day; less, for any day during any part of which
the amount of Short Term Power is reduced by the supplying party,
one-fifth of the weekly rate per kilowatt of the reduction, plus;
3.12 For each kilowatt of the reserved Short Term Power that is
purchased by the supplying party from another system, pre-arranged in
accordance with Subsection 2.11 of this Schedule, the excess, if any,
of the amount paid therefor by the supplying party over the charge
therefor under Subsection 3.11 of this Schedule (or if such amount is
less than such charge minus the deficiency), plus;
3.13 110% of the out-of-pocket cost of supplying Short Term
Energy called for during such periods under Subsection 2.12 of this
Schedule that comes from the supplying party's own system; plus for
energy purchased by the supplying party from another system to supply
any part of the Short Term Energy called for during such periods under
Subsection 2.12 of this Schedule, 100% of the amount paid therefor by
the supplying party plus 10% thereof not to exceed 1.6 mills per
kilowatthour.
3.2 When Indiana Company is the supplying party and Indianapolis
Company is the reserving party, the reserving party shall pay the supplying
party the following demand rate:
3.21 Weekly Short Term Power - For any week that Short Term
Power is reserved the weekly demand rate shall be equal to $1.25 per
kilowatt reserved for such week. In the event the amount of Weekly
Short Term Power taken is reduced upon request of the supplying party,
the demand charge for each day (other than Sunday) during which such
reduction is in effect shall be reduced by one-sixth (1/6) of the
supplying party's weekly demand rate per kilowatt of reduction.
3.22 Daily Short Term Power - For any day that Short Term Power
is reserved the daily demand rate shall be equal to the rate of
one-fifth (1/5) of the supplying party's Weekly Short Term Power
demand rate. In the event the amount of Daily Short Term Power taken
is reduced upon request of the supplying party, the demand charge for
each day during which such reduction is in effect shall be reduced by
one-fifth (1/5) of the above Weekly Short Term Power demand rate per
kilowatt of reduction.
3.23 Third Party Weekly Short Term Power - Whenever the
supplying party is in turn reserving power from another interconnected
system such interconnected system shall be designated "Third Party".
For any week that Weekly Short Term Power is reserved from a Third
Party the Third Party Weekly Short Term Power demand rate to
Indianapolis Company shall be equal to $0.24 per kilowatt reserved per
week plus the demand charge paid therefor by the supplying party to
the Third Party. In the event the amount of Third Party Weekly Short
Term Power taken is reduced upon the request of the Third Party, the
demand charge for each day (other than Sunday) during which such
reduction is in effect shall be reduced by one-sixth (1/6) of the
Third Party Weekly Short Term Power rate per kilowatt of the reduction.
3.24 Third Party Daily Short Term Power - For any day that
Short Term Power is reserved from a Third Party the Third Party Daily
Short Term Power demand rate to Indianapolis Company shall be equal to
$0.048 per kilowatt reserved per day plus the demand charge paid
therefor by the supplying party to the Third Party.
3.25 When Indiana Company is the supplying party and
Indianapolis Company is the reserving party, the reserving party shall
pay the supplying party energy charges at the following rates:
(a) for each kilowatthour that is generated by the supplying
party's system 110% of the out-of-pocket costs (including all
operating, maintenance, tax, transmission losses and other
expenses incurred that would not have been incurred if the
energy had not been supplied) of supplying Short Term Energy
called for during such period, plus;
(b) for each kilowatthour purchased by the supplying party from
a third party to supply the Short Term Energy called for during
such period, 100% of the amount of the energy charge paid
therefor by the supplying party plus 1 mill plus any
transmission losses, taxes and other expenses incurred that
would not have been incurred if such purchase had not been
made."
Section 2. This Modification No. 14 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.
Section 3. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
Section 4. This Modification No. 14 shall inure to the benefit of and
be binding upon the successors and assigns of the respective parties hereto.
IN WITNESS WHEREOF, the parties herein have caused this Agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill, President
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ John E. Dolan
<PAGE>
Modification No. 15
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA & MICHIGAN ELECTRIC COMPANY
__________
Dated as of September 1, 1985
<PAGE>
THIS MODIFICATION NO. 15, made and entered into as of the 1st day of
September, 1985, between INDIANAPOLIS POWER & LIGHT COMPANY ("Indianapolis
Company"), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
("Indiana Company"), also an Indiana corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, which Agreement was
modified thereafter (said Interconnection Agreement, as so modified, being
herein called the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
Section 1. Section 3 - COMPENSATION of Service Schedule B - Emergency
Service of the 1960 Agreement shall be modified and amended to read as
follows:
"Section 3 -- COMPENSATION
3.1 Emergency Energy delivered under Section 2 above that is
generated by the supplying party's system shall be settled for, at the
option of the supplying party, either by the return of equivalent
energy upon request of such party or by payment of the greater of (a)
110% of the out-of-pocket cost of supplying such energy, and (b) 30.0
mills per kilowatthour thereof;
3.2 Emergency Energy delivered under Section 2 above that is
purchased by the supplying party from another system at the request of
the receiving party shall be settled for as follows:
3.21 When Indiana Company is the supplying party, a
demand charge of 2.75 mills per kilowatthour of such
purchased energy and an energy charge of 100% of the
amount paid therefor by the supplying party plus one mill
per kilowatthour of such purchased energy plus any
transmission losses and taxes incurred.
3.22 When Indianapolis Company is the supplying party,
the greater of (a) 100% of the amount paid for such energy
plus, 1.6 mills per kilowatthour, and (b) 30 mills per
kilowatthour."
Section 2. Subsection 3.21 of Section 3 - COMPENSATION of Service
Schedule E - Interchange Power of the 1960 Agreement is hereby modified and
amended by deleting the phrase "plus (c) fifteen per cent of the gross
savings remaining after deducting all such payments for transmission
losses," wherever it appears therein and substituting therefor the
following:
"plus (c) the following:
3.211 When Indiana Company is the supplying party: The
greater of (i) fifteen percent of the gross savings
remaining after deducting all such payments for
transmission losses or (ii) 3.75 mills per kilowatthour of
energy received for transmission plus revenue taxes
incurred that would not otherwise have been incurred;
3.212 When Indianapolis Company is the supplying party:
Fifteen percent of the gross savings remaining after
deducting all such payments for transmission losses."
Section 3. Subsection 3.3 of Section 3 - COMPENSATION of Service
Schedule E - Interchange Power of the 1960 Agreement is hereby modified and
amended by deleting the words "delivered hereunder" wherever they appear
therein and substituting therefor the phase "delivered under Subsection 2.2
above that is generated by the supplying party's system".
Section 4. Section 3 - COMPENSATION of Service Schedule E -
Interchange Power of the 1960 Agreement is hereby modified and amended by
adding a new Subsection 3.4 to read as follows:
"3.4 Non-Displacement Energy delivered under Subsection 2.2
above that is purchased by the supplying party's system from another
interconnected system at the request of the receiving party shall be
settled for as follows:
3.41 When Indiana Company is the supplying party; by a
demand charge of 2.75 mills per kilowatthour of such
purchased energy and an energy charge of 100% of the
amount paid therefor by the supplying party, plus one mill
per kilowatthour of such purchased energy, plus any
transmission losses and revenue taxes incurred that would
not otherwise have been incurred.
3.42 When Indianapolis Company is the supplying party,
100% of the amount paid for such energy plus 10% of that
amount, not exceeding, however, 1.6 mills per kilowatthour."
Section 5. Section 3 - Compensation of Service Schedule F - Short
Term Power of the 1960 Agreement shall be modified and amended to read as
follows:
"Section 3 - Compensation
3.1 When Indianapolis Company is the supplying party and
Indiana Company is the reserving party, the reserving party shall pay
the supplying party:
3.11 For any week that Short Term Power is reserved, a
rate not to exceed $1.05 per kilowatt reserved; less, for
each day during any part of which the amount of such Short
Term Power is reduced (other than Sunday) by the supplying
party, one-sixth of the weekly rate per kilowatt of the
reduction (except that in no event shall the total of such
deductions in any week exceed the weekly rate). For each
period less than one week that Short Term Power is
reserved, one-fifth the weekly rate per kilowatt reserved
per day (not to exceed $0.21 per kilowatt reserved per
day), less; for any day during any part of which the
amount of Short Term Power is reduced by the supplying
party, one-fifth of the weekly rate per kilowatt of the
reduction (not to exceed $0.21 per kilowatt reserved per
day); plus or minus,
3.12 For each kilowatt of Short Term Power prearranged in
accordance with Subsection 2.11 above, that is purchased
by the supplying party from another system, the
difference, if any, between the amount paid therefor and
the amount charged by the supplying party under Subsection
3.11 above; plus,
3.13 For Short Term Energy called for under Subsection
2.12 above that is furnished from the supplying party's
system, 110% of the out-of-pocket cost of supplying such
energy; plus, for Short Term Energy furnished by the
supplying party from another system, 100% of the amount
paid therefor plus 10% of such amount or 1.6 mills per
kilowatthour, whichever is less.
3.2 When Indiana Company is the supplying party and
Indianapolis Company is the reserving party, the reserving party shall
pay the supplying party the following demand rate:
3.21 Weekly Short Term Power - For any week that Short
Term Power is reserved, the weekly demand rate of up to
$1.25 per kilowatt. If the amount of Weekly Short Term
Power taken is reduced upon request of the supplying
party, the demand charge for each day (other than Sunday)
such reduction is in effect shall be reduced by one-sixty
(1/6) of the supplying party's weekly demand rate per
kilowatt of reduction.
3.22 Daily Short Term Power - For any day that Short Term
Power is reserved, the daily demand rate shall be equal to
the rate of one-fifth (1/5) of the supplying party's
Weekly Short Term Power demand rate. If the amount of
Daily Short Term Power taken is reduced upon request of
the supplying party, the demand charge for each day such
reduction is in effect shall be reduced by one-fifty (1/5)
of the above Weekly Short Term Power demand rate per
kilowatt of reduction.
3.23 Third Party Weekly Short Term Power - For any week
that Weekly Short Term Power is reserved by the supplying
party from another system (hereinafter called a "Third
Party"), the Third Party Weekly Short Term Power demand
rate to Indianapolis Company shall be equal to $0.46 per
kilowatt reserved per week plus the demand charge paid
therefor by the supplying party to the Third Party. In
the event the amount of Third Party Weekly Short Term
Power taken is reduced upon the request of the Third
Party, the demand charge for each day (other than Sunday)
such reduction is in effect shall be reduced by one-sixth
(1/6) of the Third Party Weekly Short Term Power rate per
kilowatt of the reduction.
3.24 Third Party Daily Short Term Power - For any day
that Short Term Power is reserved from a Third Party, the
Third Party Daily Short Term Power demand rate to
Indianapolis Company shall be equal to $0.092 per kilowatt
reserved per day, plus the demand charge paid therefor by
the supplying party to the Third Party.
3.3 When Indiana Company is the supplying party and
Indianapolis Company is the reserving party, the reserving party shall
pay the supplying party energy charges at the following rates:
3.31 For each kilowatthour that is generated by the
supplying party's system, up to 110% of the out-of-pocket
costs of supplying Short Term Energy called for under
Subsection 2.12 above (including all operating,
maintenance, tax, transmission losses and other expenses
incurred that would not have been incurred if the energy
had not been supplied); plus,
3.32 For each such kilowatthour purchased by the
supplying party from a Third Party, 100% of the amount of
the energy charge paid therefor by the supplying party
plus 1 mill plus any transmission losses, taxes and other
expenses incurred that would not have been incurred if
such purchase had not been made.
3.4 Notwithstanding the rates stated in subsections 3.21 and
3.31 above; when Indiana company is the supplying party, the sum of
the above demand charges and the above energy charges for each
specific reservation made pursuant to Section 2 above of Service
Schedule F shall not be less than 110% of the total out-of-pocket cost
of supplying the Short Term Energy for such reservation."
Section 6. Section 3 - Compensation of Service Schedule I - Limited
Term Power (Firm) shall be modified and amended to read as follows:
"Section 3 - Compensation
3.1 When Indianapolis Company is the supplying party and
Indiana Company is the reserving party, the reserving party shall pay
the supplying party:
3.11 For any month that Limited Term Power (Firm) is
reserved in accordance with Section 2 above, a rate not to
exceed $5.50 per kilowatt so reserved; plus or minus,
3.12 For each kilowatt of Limited Term Power (Firm)
prearranged in accordance with Subsection 2.11 above, that
is furnished by the supplying party from another system,
the difference, if any, between the amount paid therefor
and the amount charged by the supplying party under
Subsection 3.11 above; plus,
3.13 For Limited Term Energy (Firm) called for under
Subsection 2.12 above that is furnished from the supplying
party's system, 110% of the out-of-pocket cost of
supplying such energy; plus, for Limited Term Energy
(Firm) furnished by the supplying party from another
system, 100% of the amount paid therefor plus 10% of such
amount or 1.6 mills per kilowatthour, whichever is less.
3.2 When Indiana Company is the supplying party and
Indianapolis Company is the reserving party, the reserving party shall
pay the supplying party:
3.21 For any month such Limited Term Power (Firm) is
reserved in accordance with Section 2 above, a rate of up
to $6.50 per kilowatt so reserved; plus
3.22 110% of the out-of-pocket cost (including all
operating, maintenance, tax, transmission losses and other
expenses incurred that would not have been incurred if the
energy had not been supplied) of supplying Limited Term
Energy (Firm) called for during such period that is
generated by the supplying party's system; plus
3.23 For each kilowatt of the reserved Limited Term Power
(Firm) that is purchased by the supplying party from a
Third Party, the excess, if any, of the amount paid
therefor by the supplying party over the charge therefor
under subsection 2.11 of this Service Schedule (or, if
such amount is less than such charge, minus the
deficiency); plus
3.24 For each month such Limited Term Power (Firm) is
reserved, $2.00 per kilowatt, plus 1 mill per kilowatt-
hour."
Section 7. This Modification No. 15 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.
Section 8. Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
Section 9. This Modification No. 15 shall inure to the benefit of and
be binding upon the respective successors and assigns of the parties hereto.
IN WITNESS WHEREOF, the parties herein have caused this Agreement to
be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill, President
and Chief Operating Officer
INDIANA & MICHIGAN ELECTRIC COMPANY
By signature illegible
<PAGE>
Modification No. 16
to
INTERCONNECTION AGREEMENT
Dated December 30, 1960
as amended,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
INDIANA MICHIGAN POWER COMPANY
(Formerly Indiana & Michigan Electric Company)
__________
Dated as of September 4, 1991
<PAGE>
THIS MODIFICATION NO. 16, made and entered into as of the fourth day
of September, 1991, between INDIANAPOLIS POWER & LIGHT COMPANY ("IPL"), an
Indiana corporation, and INDIANA MICHIGAN POWER COMPANY ("I&M"), also an
Indiana corporation;
WITNESSETH,
WHEREAS, IPL and I&M entered into an Interconnection Agreement, dated
December 30, 1960, with 15 modifications and 4 unilateral rate filings
thereto (said Interconnection Agreement, as so modified, being herein called
the 1960 Agreement); and
WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
SECTION 1. It is hereby agreed that a new Service Schedule L --
Peaking Power and Energy and Seasonal Exchange and Energy be made a part of
the 1960 Agreement in the form attached hereto as Appendix I.
SECTION 2. It is hereby further agreed that Section 3.03 of Article 3
of the 1960 Agreement be modified to read:
"3.03 The following service schedules are agreed to and hereby
made a part of this agreement:
Service Schedule A--Firm Power to Indianapolis
Service Schedule B--Emergency Service
Service Schedule C--Coordination of Scheduled Maintenance of
Generating Facilities
Service Schedule D--Energy Transfer
Service Schedule E--Interchange Power
Service Schedule F--Short Term Power
Service Schedule I--Limited Term Power (Firm)
Service Schedule K--Conservation Energy
Service Schedule L--Peaking Power and Energy and Seasonal
Exchange Power and Energy"
SECTION 3. Except as hereinbefore modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.
SECTION 4. This Modification No. 16 shall inure to the benefit of,
and be binding upon, the successors and assigns of the respective parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their respective duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Ramon L. Humke
Ramon L. Humke
President and Chief Operating
Officer
ATTEST:
/s/ Clark L. Snyder
Clark L. Snyder
Assistant Secretary
INDIANA MICHIGAN POWER COMPANY
By /s/ illegible
Vice Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ John D. Loujo, Jr.
Secretary
<PAGE>
SERVICE SCHEDULE L
PEAKING POWER AND ENERGY
AND SEASONAL EXCHANGE POWER AND ENERGY
Under Agreement dated December 30, 1960
between
Indianapolis Power & Light Company
and
Indiana Michigan Power Company
(Formerly Indiana & Michigan Electric Company)
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under the above referenced
agreement between Indianapolis Power & Light Company ("IPL") and Indiana
Michigan Power Company ("I&M"), shall become effective on April 1, 1992, and
shall continue in effect through March 31, 1997 or thereafter as provided in
Section 2.6 and/or Section 2.7(a) below ("Contract Period").
SECTION 2 - SERVICES TO BE RENDERED
2.1 Throughout the Contract Period and subject to the terms of this
Service Schedule L:
a) I&M shall, upon call, make arrangements for and shall stand
ready to deliver power ("Peaking Power") and associated energy
("Peaking Energy"), and IPL shall stand ready to receive and
shall pay for such Peaking Power and Energy in accordance with
the rates specified in Section 3 below, and
b) both Parties shall, upon call, stand ready to deliver power
("Seasonal Energy Power") and associated energy ("Seasonal
Exchange Energy"), and both Parties shall stand ready to receive
such power and energy in the manner described in Section 2.7
below, and to pay for Seasonal Exchange Energy in accordance
with the rates specified in Section 3 below.
2.2 The Peaking Power delivered hereunder, in any hour, shall not exceed
the megawatthours ("MWH") per hour during the periods specified below:
a) 100 MWH per hour from April 1, 1992 - March 31, 1993;
b) 200 MWH per hour from April 1, 1993 - March 31, 1997;
c) 200 MWH per hour from April 1, 1997 - December 31, 1997, if IPL
chooses to continue service under Service Schedule L pursuant to
subsection 2.67 below; and
d) 200 MWH per hour from January 1, 1998 - November 30, 1999, if
IPL chooses to continue service under Service Schedule L
pursuant to subsection 2.6 below.
2.3 The Peaking Energy delivered hereunder, shall not exceed the amount of
MWH during the periods as specified below:
a) 66,000 MWH during April 1, 1992 - December 31, 1992;
b) 87,600 MWH during April 1, 1993 - December 31, 1993, plus 66,000
MWH during April 1, 1993 - December 31, 1993;
175,200 MWH during January 1, 1994 - December 31, 1994;
175,200 MWH during January 1, 1995 - December 31, 1995;
175,700 MWH during January 1, 1996 - December 31, 1996;
43,200 MWH during January 1, 1997 - March 31, 1997;
c) or 175,200 MWH during January 1, 1997 - December 31, 1997 if IPL
chooses to continue service under Service Schedule L pursuant to
subsection 2.6 below; and
d) 175,200 MWH during January 1, 1998 - December 31, 1998,
160,300 MWH during January 1, 1999 - November 30, 1999,
if IPL chooses to continue service under Service Schedule L
pursuant to subsection 2.6 below.
2.4 IPL shall inform I&M by 2 p.m. Eastern Standard Time each day of its
expected hourly schedule for Peaking Energy in whole megawatthours per hour
for the next day. IPL shall schedule Peaking Power and Energy in
incremental blocks of 100 MWH per hour. Thereafter, IPL may, due to
unforeseen circumstances, make changes to this schedule by giving reasonable
notice thereof.
2.5 The availability of Peaking Power and Energy, and I&M's obligation to
deliver same to IPL in any hour, is contingent upon the ability of the
American Electric Power ("AEP") System to first meet its internal load and
its firm load commitments as of the effective date of this Service Schedule
L, plus any base load capacity sales up to 1500 MW. The present AEP System
firm load commitments are: 31 MW (not to exceed 75 MW over the term of this
Agreement) for Richmond Power and Light Company; 50 MW for Wabash Valley
Power Association, Inc., through December 31, 1997; 500 MW for Virginia
Power Company, through December 31, 1999, subject to Rockport Unit 1
availability; 250 MW for Carolina Power & Light Company, subject to Rockport
Unit 2 availability, through December 31, 2009; 100 MW for American
Municipal Power-Ohio, Inc. through December 31, 1997 with options to extend
through November 30, 2001; and the Backup Power requirements of Buckeye
Power, as described in the Station Agreement between the Ohio Power company,
Buckeye Power, Inc. and Cardinal Operating Company, dated January 1, 1968.
If, after satisfying its internal and firm load commitments, the AEP
System's resources are not sufficient for I&M to meet its obligation to
delivery Peaking Power and Energy to IPL, I&M shall arrange for the purchase
of hourly or daily power from non-AEP sources, to the extent such power is
available, deliverable, and required, in order to deliver Peaking Power and
Energy scheduled by IPL pursuant to this Service Schedule L.
2.6 By March 31, 1995, IPL will provide written notice to I&M with respect
to IPL's desire to extend the Contract Period and continue service under
Service Schedule L through December 31, 1997. If the Contract Period has
been extended through December 31, 1997, then by January 1, 1996, IPL will
provide written notice to I&M, with respect to IPL's desire to further
extend the Contract Period and continue service under Service Schedule L
through November 30, 1999.
2.7 a) By December 31, 1993, IPL will provide written notice to I&M,
with respect to IPL's desire to exchange Seasonal Exchange Power
and Energy during a portion of the Contract Period, from June,
1995 through February, 1999.
b) The maximum rate of delivery of Seasonal Exchange Power and
Energy supplied hereunder, in any hour, shall not exceed 50 MWH
per hour.
c) A purchasing Party shall inform the supplying Party by 2 p.m.
Eastern Standard Time each day of its expected hourly schedule
for Seasonal Exchange Power and Energy in whole megawatt hours
per hour for the next day. Thereafter, the purchasing party
may, due to unforeseen circumstances, make changes to this
schedule by giving reasonable notice.
d) The availability of Seasonal Exchange Power and Energy and a
supplying Party's obligation to deliver same to the purchasing
Party in any hour is contingent upon the ability of the
supplying Party to first meeting its internal load and its firm
load commitments as of the effective date of this Service
Schedule L. The present firm load commitments of the AEP System
are as enumerated in Section 2.5 above.
e) For the period defined in Section 2.7(a) during which Seasonal
Exchange Power and Energy is agreed to be exchanged, I&M shall
supply 50 MWH per hour to IPL during the months of June through
August in the summer seasons of 1995, 1996, and 1997 and IPL
shall supply 50 MWH per hour to I&M during the months of
December through February in the winter seasons of 1995/1996,
1996/1997, 1997/1998 and 1998/1999.
f) Seasonal Exchange of Power and Energy may be extended from time
to time after the period defined in Section 2.7(a) in such
amount and for such periods as may be mutually agreed upon by
the parties.
2.8 I&M and IPL shall at all times operate and maintain their respective
generation and transmission systems in a manner consistent with safe,
prudent and efficient operating practices that are generally considered by
the electric utility industry as being prudent utility practice.
SECTION 3 - COMPENSATION
3.1 Demand Charges - IPL shall make monthly payments to I&M for Peaking
Power during the term of this Service Schedule L as follows:
a) $600,000 from April 1, 1992 through March 31, 1993;
b) $1,200,000 from April 1, 1993 through March 31, 1997;
c) $1,200,000 from April 1, 1997 through December 31, 1997 if IPL
chooses to continue service under Service Schedule L pursuant to
subsection 2.6 above; and
d) $1,550,000 from January 1, 1998 through November 30, 1999, if
IPL chooses to continue service under Service Schedule L
pursuant to subsection 2.6 above.
3.2 Energy Charges - IPL shall make monthly payments to I&M for Peaking
Energy delivered during the term of this Service Schedule L. The monthly
charges will equal the out-of-pocket cost of supplying Peaking Energy
delivered during the month, pursuant to subsection 2.4 above, including all
operating, variable maintenance, tax, transmission losses, the cost as
agreed to by the Operating Committee or replacement of consumed SO2 and
other atmospheric emission allowances, if any, when such allowance programs
become effective, and other expenses incurred which would not have been
incurred if the energy had not been supplied. Energy charges are subject to
review by the Operating Committee. However, the out-of-pocket cost for any
hour during which AEP generates or purchases power to meet its obligation to
deliver Peaking Power and Energy to IPL shall not exceed the calculated out-
of-pocket cost of operating a gas turbine plant with a Heat Rate of 11,121
/BUT/KWH during the same month. The calculation of the out-of-pocket cost
of operating a gas turbine plant shall be made as agreed upon by the
Operating Committee. The gas cost for this maximum rate calculation will be
equal to the cost experienced by IPL the previous month for its own gas
fired peaking capacity or the cost of natural gas for Indiana as listed in
the table "Average Price of Natural Gas Delivered to Electric Utility
Consumers by State" (current Table 31) in the "Energy Information
Administration/Natural Gas Monthly" for the previous month, if IPL shall not
have operated such generating capacity in the month. IPL shall inform I&M
of such costs in a timely manner.
3.3 Charges for Seasonal Exchange Power. There shall be no demand Charge
for Seasonal Exchange Power. IPL shall make monthly payments to I&M during
the summer seasons and I&M shall make monthly payments to IPL during the
winter seasons, pursuant to Section 2.7(e), for Seasonal Exchange Energy
delivered. The monthly charges will equal the delivering company's out-of-
pocket cost of supplying such Energy as defined in subsection 3.2 above,
plus the lesser of a) 10% of such out-of-pocket cost or b) 3 mills/KWH.
SECTION 4 -- REGULATORY APPROVAL
4.1 If the Federal Energy Regulatory Commission ("FERC") does not accept
this Service Schedule L for filing within ninety (90) days of its
submission, either Party may terminate this Service Schedule. If the FERC
requires modification to the rates, terms, or conditions of this Service
Schedule L as a condition of accepting it for filing, either Party may
terminate this Service Schedule. In the event the Indiana Utility
Regulatory Commission ("IURC") does not authorize IPL to sue one of the
purchase power cost recovery mechanisms requested by IPL, or in IPL's first
general retail electric rate proceeding ("Rate Case") following the
effective date of this Service Schedule L, the IURC disallows recovery of
past Demand Charges paid by IPL hereunder and/or disallows future Demand
Charges hereunder which are fixed, known and measurable for such rate
proceeding, then in any such event, IPL may terminate this Service Schedule
L.
4.2 Notice of any termination under this Section 4 shall be given in
writing by either Party to the other Party within thirty (30) days after
final action (final action being limited to relief available solely from
such regulatory authority without the necessity of filing any petition for
rehearing or reconsideration) of the regulatory authority involved which
imposes such modification, as hereinabove described, or which fails to
provide recovery by IPL of the Demand Charges payable by it under this
Service Schedule L. This Service Schedule L shall automatically terminate
thirty (30) days after the date of such notice.
<PAGE>
MODIFICATION NO. 17
TO THE
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
INDIANA MICHIGAN POWER COMPANY
THIS AMENDMENT made and entered into as of the 1st day of January, 1995 by
Indianapolis Power & Light Company ("IPL"), being an Amendment to the
Interconnection Agreement between Indiana Michigan Power Company ("Buyer")
and IPL dated December 30, 1960, as amended (the "Agreement").
WITNESSETH:
WHEREAS, IPL and Indiana Michigan Power Company entered into the Agreement
on December 30, 1960, which Agreement has been amended from time to time;
WHEREAS, the Agreement provides for the sale of power and energy by IPL
under Service Schedules described as:
Service Schedule B Emergency Service
Service Schedule E Interchange Power
Service Schedule F Short Term Power
Service Schedule I Limited Term Power
(Firm)
Service Schedule L Peaking Power and
Energy and Seasonal
Exchange Power and
Energy
WHEREAS, the Agreement provides for the recovery of incremental costs or
"out-of-pocket" costs occasioned by the sale by IPL of electric energy;
WHEREAS, IPL has implemented its Emissions Constrained Dispatch Plan,
attached hereto;
WHEREAS, the rates for Emergency Service, Interchange Power, Short Term
Power, Limited Term Power (Firm), and Peaking Power and Energy and Seasonal
Exchange Power and Energy, do not expressly include the cost of replacing
sulfur dioxide ("SO2") emission allowances expended in order to provide such
energy in compliance with Federal laws governing SO2 emission;
WHEREAS, IPL desires to amend the Agreement to clarify recovery of out-of-
pocket costs occasioned by the sale of said energy as including the recovery
of the incremental cost of SO2 emission allowances;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions set forth herein; IPL desires to amend the Agreement as follows:
Section 1. Compensation for SO2 Emission Allowances.
The Buyer shall compensate IPL for the consumption of Sulfur Dioxide
Emissions Allowances ("SO2 Allowances") directly attributed to electric
energy sales by IPL to Buyer under the Service Schedules. Such compensation
shall, at Buyer's option, be made by either supplying IPL with the number of
SO2 Allowances directly attributed to such energy sales, or by reimbursing
IPL for the incremental cost of such number of SO2 Allowances, rounded to
the nearest whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2 Allowances associated with
Buyer's energy purchases for the month, the cash amount due at billing will
be determined by multiplying the number of SO2 Allowances attributed to the
sale by the incremental cost of the SO2 Allowances, as determined in Section
2.2, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will record or
transfer to IPL's account, the number of SO2 Allowances calculated below, at
the time cash settlement for the energy is due. In all cases, Buyer will
transfer to IPL's account the number of SO2 Allowances due IPL for calendar
year no later than January 15 of the following year. "Transfer to IPL's
account" shall mean, for purposes of the Amendment, the transfer by the
USEPA of the requisite number of SO2 Allowances to IPL's Allowance Tracking
System account and the receipt by IPL of the Allowance Transfer Confirmation.
Section 2. Determination of SO2 Emission Allowances Due IPL.
Section 2.1. Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy sale
made by IPL shall be determined for each hour, by determining the
contribution from each of the unit(s) from which the energy sale is
being made for that hour. For each unit, the emission rate in pounds
of SO2 per million Btu will be determined each month, from fuel sulfur
content, control equipment performance, and continuous emissions
monitoring data. The emission rate and the unit heat rate will be
used to determine the SO2 Allowances used per megawatt-hour ("MWH").
The energy from each unit attributable to the sale, and the SO2
Allowances per MWH for each unit, will be used to determine the number
of SO2 Allowances attributable to the sale.
Section 2.2 . Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic dispatch
of IPL's generating units in any month, will also be the basis used to
determine compensation for IPL's energy sales. The incremental SO2
Allowances cost, in dollars per ton of SO2, shall be determined each
month and will be based on the Cantor Fitzgerald offer price for SO2
Allowances, or if such is not available, then another nationally
recognized SO2 Allowance trading market price or market price index,
at the beginning of the month. The SO2 Allowance value may be changed
at any time during the month to reflect the more current incremental
cost, or market price, for SO2 Allowances. Buyer will be notified of
the new SO2 Allowance value prior to dispatch of IPL energy to Buyer.
Section 3. Effective Date.
This Amendment to the Agreement shall be made effective as of January 1,
1995.
IN WITNESS WHEREOF, IPL has caused the foregoing Amendment to be signed by
its duly authorized officer, effective as of the date set forth above.
INDIANAPOLIS POWER & LIGHT COMPANY
By: /s/ John C. Berlier, Jr.
John C. Berlier, Jr.
Vice President
Resource Planning and Rates
<PAGE>
ADDENDUM I
Page 5 of 40
ADDENDUM I
to
Interconnection Agreement
between
INDIANA & MICHIGAN ELECTRIC COMPANY (I&ME)
and
INDIANAPOLIS POWER & LIGHT COMPANY (IP&L)
(I&ME's Rate Schedule FERC No. 21)
SECTION 1. Subsection 3.3 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the first sentence of such subsection 3.3 and by the
substitution therefor of the following sentence. "Non-
Displacement Energy delivered under subsection 2.2 above that is
generated by the supplying party's system shall be settled for
either by the return of equivalent energy or, at the option of
the party that supplied such energy, by payment of the out-of-
pocket cost (OPC)--such cost being as of the delivery point or
points, as provided for in Section 5.01 of said Interconnection
Agreement, taking into account electrical losses incurred from
the source or sources of such energy to said delivery point or
points--of the supplying party in generating or supplying such
energy plus ten per cent of such cost when Indianapolis Company
is the generating party and by payment of a demand charge of up
to 25 mills per kilowatthour plus an energy charge of up to 110%
of OPC when Indiana Company is the generating party."
SECTION 2. Section 3 of Service Schedule E - Interchange Power
of the 1960 Interconnection Agreement between I&ME and IP&L is
hereby amended and supplemented by the addition of the following
new subsection numbered 3.5 at the end of Section 3:
"3.5 Notwithstanding Indiana Company's rates stated in
subsection 3.3 above, the sum of the above demand
charges and the above energy charges for each specific
reservation made pursuant to subsection 2.2 of this
Service Schedule shall not be less than 100% of the
out-of-pocket cost of supplying the Non-Displacement
Energy for such reservation."
SECTION 3. Subsection 3.21 of Section 3 of Service Schedule F -
Short Term Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the quantity "$1.25" wherever it appears therein and
by the substitution therefor of the quantity "$2.00".
In WITNESS WHEREOF, Indiana & Michigan Electric Company hereto
has caused this Agreement to be executed by a duly authorized
officer.
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ signature illegible
Vice President
<PAGE>
ADDENDUM II
Page 3 of 12
ADDENDUM II
to
Interconnection Agreement
between
INDIANA & MICHIGAN ELECTRIC COMPANY (I&ME)
and
INDIANAPOLIS POWER & LIGHT COMPANY (IP&L)
(I&ME's Rate Schedule FERC No. 21)
SECTION 1. Subsection 3.21 of Section 3 of Service Schedule B -
Emergency Service of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words "2.75 mills per kilowatthour of such
purchased energy" wherever they appear therein and by the
substitution therefor of the words "5.75 mills per kilowatt
reserved per hour".
SECTION 2. Subsection 3.211 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words "3.75 mills per kilowatthour of energy
received for transmission" wherever they appear therein and by
the substitution therefor of the words "the sum of a demand
charge of 5.75 mills per kilowatt reserved per hour from a third
party and an energy charge of one mill per kilowatthour of energy
received from the third party."
SECTION 3. Subsection 3.41 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words "2.75 mills per kilowatthour of such
purchased energy" wherever they appear therein and by the
substitution therefor of the words "5.75 mills per kilowatt
reserved per hour".
In WITNESS WHEREOF, Indiana & Michigan Electric Company hereto
has caused this Agreement to be executed by a duly authorized
officer.
INDIANA & MICHIGAN ELECTRIC COMPANY
By /s/ signature illegible
Vice President<PAGE>
COMPLIANCE FILING
The Interconnection Agreement dated December 30, 1960 between
Indiana & Michigan Electric Company (I&ME) and Indianapolis Power
& Light Company (IP&L), I&ME's rate schedule FERC No. 21 is
hereby amended in accordance with Order Accepting Proposed Rates
for Filing, Noting Intervention, Granting Waiver of Notice
Requirements in Part, and Terminating Dockets, of the Federal
Energy Regulatory Commission, in Dockets Nos. ER87-280-000, ER87-
281-000, and ER87-355-000, issued June 16, 1987.
SECTION 1. Subsection 3.21 of Section 3 of Service Schedule B -
Emergency Service of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of 5.75 mills per
kilowatt reserved per hour and" and by the substitution therefor
of the following words "a demand charge of 5.75 mills per
kilowatt reserved per hour but the total demand charge in any one
day shall be no more than the product of $0.092 times the highest
amount in kilowatts reserved in any hour during the day and".
SECTION 2. Subsection 3.211 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of 5.75 mills per
kilowatt reserved per hour from a third party and" and by the
substitution therefor of the words, "a demand charge of 5.75
mills per kilowatt reserved per hour but the total demand charge
in any one day shall be no more than the product of $0.092 times
the highest amount in kilowatts reserved in any hour during the
day and".
SECTION 3. Subsection 3.3 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of up to 25 mills per
kilowatthour plus" and by the substitution therefor of the
following words, "a demand charge of up to 25 mills per
kilowatthour but the total demand charge in any one day shall be
no more than the product of $0.40 times the highest amount in
kilowatts reserved in any hour during the day plus".
SECTION 4. Subsection 3.41 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of 5.75 mills per
kilowatt reserved per hour and" and by the substitution therefor
of the following words" a demand charge of 5.75 mills per
kilowatt reserved per hour from a third party, but the total
demand charge in any one day shall be no more than the product of
$0.092 times the highest amount in kilowatts reserved in any hour
during the day and".
<PAGE>
ADDENDUM III
Page 5 of 42
ADDENDUM III
Dated: July 1, 1988
to
Interconnection Agreement
Dated: December 30, 1960
between
Indianapolis Power & Light Company
and
Indiana Michigan Power Company
SECTION 1. Subsection 2.1 of Section 2 of Service Schedule B -
Emergency Service of this 1960 Interconnection Agreement between
Indiana Company and Indianapolis Company is hereby amended and
supplemented by the deletion therefrom of the sentence "Either
party may, upon request, deliver energy hereunder in the event of
an emergency jeopardizing the ability of a system interconnected
with the system of the requesting party to meet its native load
and other firm commitments."
SECTION 2. Section 3 of Service Schedule B - Emergency Service
of this 1960 Interconnection Agreement between Indiana Company
and Indianapolis Company is deleted and replaced by the following
new Section 3:
"Section 3 - COMPENSATION
3.1 The supplying party shall pay the receiving party:
3.11 When Indiana Company is the supplying party, electric
energy delivered under Section 2 above shall be settled for by
the payment of the greater of (a) 110% of the out-of-pocket cost
(including all operating, maintenance, tax, the cost of
transmission losses and other expenses incurred that would not
have been incurred if the energy had not been supplied) of
supplying such energy or (b) 10 cents per kilowatthour thereof.
3.12 When Indianapolis Company is the supplying party,
Emergency Energy delivered under Section 2 above that is
generated by the supplying party's system shall be settled for,
at the option of the supplying party, either by the return of
equivalent energy upon request of such party or by payment of the
greater of (a) 110% of the out-of-pocket cost of supplying such
energy and (b) 30.0 mills per kilowatthour thereof;
3.2 Emergency Energy delivered under Section 2 above that is
purchased by the supplying party from another system at the
request of the receiving party shall be settled for as follows:
3.21 When Indianapolis Company is the supplying party, the
greater of (a) 100% of the amount paid for such energy plus, 1.6
mills per kilowatthour, and (b) 30 mills per kilowatthour."
SECTION 3. Subsection 3.23 of Section 3 of Service Schedule F -
Short Term Power of this 1960 Interconnection Agreement between
Indiana Company and Indianapolis Company is hereby amended and
supplemented by the deletion of the last sentence of subsection
3.23 and by the addition of the following sentence:
"In the event the amount of Weekly Third Party Short Term Power
taken by Indianapolis Company is reduced by Indiana Company
because of a transmission burden on its system, the rate in
subsection 3.23 shall be reduced by a) $0.0766 per kilowatt of
the reduction for each day (other than Sunday) during which such
reduction is in effect, plus (b) the reduction, if any, in the
demand charge paid by Indiana Company to the Third Party."
Indiana Michigan Power Company
By /s/ signature illegible
<PAGE>
ADDENDUM IV
Page 10 of 65
ADDENDUM IV
to
Interconnection Agreement
Dated: December 30, 1960
between
Indianapolis Power & Light Company
and
Indiana Michigan Power Company
Amended as of August 21, 1989
SECTION 1. Subsection 3.21 of Section 3 of Service Schedule
F - Short Term Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
amended and supplemented by the deletion therefrom of the words
"up to $2.00" and by the substitution therefor of the words "up
to $3.70".
SECTION 2. Subsection 3.22 of Section 3 of Service Schedule
F - Short Term Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
replaced with the following subsection 3.22
"3.22 Daily Short Term Power - For any day that Short Term Power
is reserved, at the rate of up to $.74 per kilowatt reserved per
such day. In the event the amount of Daily Short Term Power
taken is reduced upon request of the supplying party, the demand
charge shall be reduced to zero per kilowatt of reduction for
each day during which such reduction is made."
SECTION 3. Subsection 3.4 of Section 3 of Service Schedule
F - Short Term Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
replaced with the following subsection 3.4.
"3.4 When Indiana Company is the supplying party the sum of the
demand and energy charges for each specific reservation made
pursuant to Section 2 of this Service Schedule shall not exceed
the total of:
(1) the product of the number of kilowatts reserved for such
reservation times the maximum weekly and Daily demand charges
specified above in subsections 3.21 and 3.22 as appropriate, and
(2) the product of the number of kilowatthours supplied for such
reservation times 110% of the average cost per kilowatthour of
energy generated by Indiana Company's Rockport Unit No. 1 for the
second next preceding month; but however in no case shall such
total be less than 110% of the out-of-pocket cost of supplying
the Short Term Energy for such reservation."
SECTION 4. Subsection 3.21 of Section 3 of Service Schedule
I - Limited Term Power (Firm) of the 1960 Interconnection
Agreement between Indiana Company and Indianapolis Company is
hereby amended and supplemented by the deletion therefrom of the
words "up to $6.50" and by the substitution therefor of the words
up to $18.75".
SECTION 5. Subsection 3.22 of Section 3 of Service Schedule
I - Limited Term Power (Firm) of the 1960 Interconnection
Agreement between Indiana Company and Indianapolis Company is
hereby amended and supplemented by the deletion therefrom of the
words "110% of the" and by the substitution therefor of the words
"up to 110% of the".
SECTION 6. Section 3 of Service Schedule I - Limited Term
Power (Firm) of the 1960 Interconnection Agreement between
Indiana Company and Indianapolis Company is hereby amended by the
addition of the following new subsection 3.25.
"3.25 When Indiana Company is the supplying party the sum of the
demand and energy charges for each specific reservation made
pursuant to Section 2 of this Service Schedule shall not exceed
the total of:
(1) the product of the number of kilowatts reserved for such
reservation times the maximum monthly demand charge specified
above in subsection 3.21, and (2) the produce of the number of
kilowatthours supplied for such reservation times 110% of the
average cost per kilowatthour of energy generated by Indiana
Company's Rockport Unit No. 1 for the second next preceding
month; but however in no case shall such total be less than 110%
of the out-of-pocket cost of supplying the Limited Term Energy
for such reservation."
SECTION 7. Subsection 3.3 of Section 3 of Service Schedule
E - Interchange Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
amended and supplemented by the deletion therefrom of the words
"25 mills" and by the substitution therefor of the words "46
mills".
SECTION 8. Subsection 3.3 of Section 3 of Service Schedule
E - Interchange Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
amended and supplemented by the deletion therefrom of the
quantity "$0.40" and by the substitution therefor of the quantity
"$0.74".
SECTION 9. Subsection 3.5 of Section 3 of Service Schedule
E - Interchange Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
replaced with the following subsection 3.5.
"3.5 When Indiana Company is the supplying party the sum of the
demand and energy charges for each specific reservation made
pursuant to subsection 2.2 of this Service Schedule shall not
exceed the total of:
(1) the product of the number of kilowatts reserved for such
reservation times the maximum hourly demand charge specified
above in subsection 3.3, and (2) the product of the number of
kilowatthours supplied for such reservation times 110% of the
average cost per kilowatthour of energy generated by Indiana
Company's Rockport Unit No. 1 of the second next preceding month;
but however in no case shall such total be less than 100% of the
out-of-pocket cost of supplying the energy for such reservation."
EXHIBIT 10.7
THIRD AMENDMENT
to the
INTERCONNECTION AGREEMENT
,dated May 1, 1992,
among
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
and
CINERGY SERVICES, INC.
Dated June 30, 1995
INDIANAPOLIS POWER & LIGHT COMPANY
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 23
CINERGY COMPANIES
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 10
<PAGE>
INDEX
SECTION ONE: Agreement As Amended
Interconnection Agreement Between
Indianapolis Power & Light Company, and
The Cincinnati Gas & Electric Company,
PSI Energy, Inc., and CINergy Services, Inc.,
dated June 30, 1995
SECTION TWO: Agreement As Signed
Interconnection Agreement Between
Indianapolis Power & Light Company, and
The Cincinnati Gas & Electric Company,
PSI Energy, Inc., and CINergy Services, Inc.,
dated June 30, 1995
<PAGE>
THIRD AMENDMENT
TO THE
INTERCONNECTION AGREEMENT
AMONG
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
AND CINERGY SERVICES, INC.
0.01 THIS THIRD AMENDMENT, dated on the 30th day of June
1995, among INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter referred to as
"IPL"), a corporation organized and existing under the laws of the State of
Indiana and PSI ENERGY, INC. (hereinafter referred to as "PSI"), a
corporation organized and existing under the laws of the State of Indiana,
and CINERGY SERVICES, INC. (hereinafter referred to as "CINergy Services"), a
corporation organized and existing under the laws of the State of
Delaware. IPL, PSI and CINergy Services are sometimes hereinafter referred
to individually as "Party" and collectively as "Parties" where
appropriate.
W I T N E S S E T H:
0.02 WHEREAS, There is now in force and effect between IPL
and PSI an Interconnection Agreement, dated as of May 1, 1992, (said
Interconnection Agreement being the Ninth Supplement to the 1962
Interconnection Agreement between IPL and PSI, herein called the
"1992 Agreement"); and
0.03 WHEREAS, The Cincinnati Gas & Electric Company ("CG&E")
and PSI merged on October 24, 1994, and formed CINergy Corp. with CG&E
and PSI now being called the "CINergy Operating Companies"; and
0.04 WHEREAS, CG&E, PSI and CINergy Services are parties to
a Service Agreement, dated March 2, 1994, which has been approved by the
Securities and Exchange Commission and the Indiana Utility Regulatory
Commission (IURC), under which CINergy Services will act as PSI s agent in
administering PSI s interconnection agreements and the three companies are
also parties to an Operating Agreement, dated March 2, 1994, on file with
and accepted by the FERC and approved by the IURC under which CINergy
Services will dispatch the generating units of CG&E, PSI and CINergy
Services; and
0.05 WHEREAS, the Parties desire to modify the 1992 Agreement, as
hereinafter set forth; and
0.06 NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements of the Parties, as herein set forth, the Parties
hereby agree as follows:
ARTICLE 1
PROVISIONS FOR, AND CONTINUITY OF
INTERCONNECTED OPERATION
1.01. Interconnection Points. The respective 138,00 volt and
345,000 volt transmission systems of IPL and PSI are presently interconnected
at the following points:
(i) The 138kV Five Points Interconnection Point
(ii) The 345kV Whitestown Interconnection Point
<PAGE>
(iii) The 345kV Gwynneville Interconnection Point
(iv) The 138kV Petersburg Interconnection Point
(v) The 345kV Petersburg Interconnection Point
(vi) The 138kV Centerton Interconnection Point
(vii) The 138kV Carmel Tap Point
1.02. Future Interconnection Points. The services provided for
by the 1992 Agreement may also be rendered through such other points of
interconnection as the Parties may later agree upon by amending the 1992
Agreement.
1.03. Synchronous Operation. The Parties mutually agree that,
except as provided in Service Schedule D hereof, their respective systems
will be continuously operated in parallel (except in cases of interruption
of such parallel operation due to mutually agreed upon maintenance or due
to causes beyond the control of either Party, or due to the necessity of an
interruption of parallel operation in order that the native load directly
served by either Party may continue to receive adequate service from such
Party). If synchronous operation of the systems through a particular line
or lines become interrupted either manually or automatically because of any
of the above-stated reasons, the Parties shall cooperate so as to remove the
cause of such interruption as soon as practicable and restore such line or
lines to normal operating condition.
1.03.1. Inadvertent Flow. It is recognized that in
interconnected system operation, power and reactive flow
will exist on an interconnection due to scheduled power flow from
either Party to third parties or between third parties. This
inadvertent power flow depends mainly on the design of the internal
systems of the Parties and the interconnected system, and the
schedules of power flows on the interconnections.
1.03.2. Interruption of Operation. If, in the sole judgment
of either Party, the power or reactive flow over the interconnection
facilities of either Party is excessive to the extent that it
jeopardizes the reliability of either Party's service to its
customers, the Parties shall attempt to agree upon adequate corrective
measures to eliminate or control such excessive power or reactive
flow; provided, however, that in the event such a situation exists,
the Party so burdened shall have the right, with notice when possible
to the other Party, to open and leave open one or all of the
interconnections between the respective systems of the Parties until
corrective action has been taken. The Parties further agree to study
and negotiate the installation, ownership, and cost of any additional
equipment necessary to effect a long-term solution to any such
excessive loading as herein described in the event either Party
determines that this interconnection contributes to the excessive
loading and requests such negotiation.
1.04. Maintenance of Equipment. Each of the Parties shall
keep, or shall cause to be kept, the transmission lines together with all
associated equipment and appurtenances that are located on their respective
sides of the Interconnection Points specified in Section 1.01 hereof, or
agreed upon pursuant to Section 1.02 hereof, in a suitable condition of
repair at all times, each at its own expense, in order that said
transmission lines will operate in a reliable and satisfactory manner and
in order that reduction in the effective capacity of said transmission lines
will be avoided to the extent practicable.
ARTICLE 2
SERVICES TO BE RENDERED
2.01. Interconnection Services Schedules. It is the purpose
of the Parties to seek and realize, on an equitable basis, all benefits
which may be practicably effected through coordination in the operation and
development of their respective systems. It is understood by the Parties
that such benefits may be realized by each of them by carrying out under
stated terms and conditions various interconnection services and transactions
that may from time to time include among others:
(i) The furnishing of emergency service,
(ii) The interchange, sale, and purchase of energy to effect
operating economies,
(iii) The sale and purchase of short term electric power and energy
available on the system of one Party and needed on the system
of the other, and
(iv) The transmission of power and energy on the basis of simultaneous
transfers.
In furtherance of such purpose, the Parties shall create, and continue the
functioning of, an Operating Committee, as provided in Article 7 hereof.
2.02. Specific Terms and Conditions. Since the specific
services to be rendered in furtherance of such purpose will vary during the
term of the 1992 Agreement, and the terms and conditions applicable to such
services may require modification from time to time, it is intended that
such specific services and the terms and conditions applicable thereto will
be set forth in Service Schedules mutually agreed upon between the parties.
Such Service Schedules, unless and until changed, terminated, or
supplemented, shall be those specified in Section 2.03 hereof. If a Service
Schedule under the 1992 Agreement is changed or supplemented, such Service
Schedule shall be fully restated in order to reflect such change or
supplement.
2.03. Service Schedules. The respective Service Schedules
designated
Service Schedule A - Emergency Service
Service Schedule B - Interchange Energy
Service Schedule C - Short Term Power and Energy
Service Schedule D - Carmel Southeast Tap Power & Energy Transfer
have been agreed upon between the Parties, are identified as Exhibits I, II,
III, and IV, respectively, to the 1992 Agreement and are attached hereto and
made a part hereof the same as if incorporated herein. It is contemplated
by the Parties that all additional mutually agreed upon Service Schedules
will be made a part of the 1992 Agreement upon presentation and acceptance
thereof.
2.04. Out-Of-Pocket Costs. The term "Out-of-Pocket Cost" of
energy from generating units on the system of a Party shall consist of any
costs that are directly incurred by IPL or PSI by reason of its generation
of such energy and which otherwise would not have been incurred by such
system including, but not limited to, fuel, labor, operation, maintenance,
start-up, fuel handling, taxes, regulatory commission charges, and emission
allowances.
"Out-of-Pocket Cost" of energy purchased from a third party by the supplying
Party shall consist of the total amount paid therefore by the supplying
Party which otherwise would not have been paid by such Party, plus any cost
which otherwise would not have been incurred, including, but not limited to,
regulatory commission charges, emission allowances, transmission losses and
taxes related to such transaction.
Tax expenses will be the expenses that are incurred as taxes either in
connection with the sale or production of such energy.
2.05. Emission Allowances. The federal Clean Air Act, as amended,
42 U.S.C. Section 7401 et seq. (hereinafter referred to as "Clean Air Act"),
establishes certain annual maximum sulfur dioxide ("SO2") levels, stated in
terms of required emission allowances, for flue gases emitted by electric
generating units, including units operated by IPL, PSI and other electric
utilities who may supply electric energy for transactions under this 1992
Agreement. The generator of the electric energy supplied and delivered
under this 1992 Agreement is required by the Clean Air Act to have adequate
"allowances" (as defined by Section 402(3) of the Clean Air Act in
conjunction with Section 403(f) of the Clean Air Act) in order to generate
such electric energy. To the extent that either IPL or PSI are required by
the Clean Air Act to have additional allowances by reason of its generation
of electric energy to be supplied by it under this 1992 Agreement, which
allowances would otherwise not have been required by such supplying Party,
then, unless the supplying Party otherwise agrees in advance in writing, at
the discretion of the supplying Party, the Party receiving such energy shall
be responsible for the cost or the actual furnishing (without cost to the
supplying Party) of adequate allowances to the supplying Party in order for
such Party to supply such energy under this Agreement. The Parties shall
establish, by mutual agreement, appropriate procedures in order to carry out
the provisions of this Section 2.05, including a statement of costs before
any transactions under the Service Schedules attached hereto are started.
Also, prior to implementation of every transaction under the Service
Schedules attached hereto, the purchasing Party must declare whether they
will pay in cash or return SO2 Allowances in-kind for any consumption of SO2
Allowances directly attributed to such transaction, if any.
It shall be the responsibility of the supplying Party to provide the
receiving Party, before the transaction begins, with a statement of the
estimated emission allowance charges associated with the transaction which
the supplying Party is seeking to add to the rates to be charged under the
applicable Service Schedule. Failure of the supplying Party to provide a
statement of such charges before the transaction begins shall constitute a
waiver of the recovery of any such costs. In establishing such procedures,
the Parties shall recognize that the determination of the additional
allowances required in order to generate the electric energy to be supplied
hereunder is subject to variables contingent upon the loading and operating
conditions on the system where the actual generation occurs. The procedures
so established by the Parties shall be in accord with sound engineering
principles of power plant and system operation, and shall require the
furnishing of such additional allowances at such times and in such amounts
as will be equitable to the supplying Party.
When IPL is the supplier of energy and emission allowances, the recovery of
the applicable costs for the actual furnishing of adequate allowances in
order for IPL to generate and supply such energy will be implemented in the
following manner:
(1) The Buyer shall compensate IPL for the consumption of Sulfur
Dioxide Emissions Allowances ("SO2 Allowances") directly attributed to
electric energy sales by IPL to Buyer under the Service Schedules. Such
compensation shall, at Buyer s option, be made by either supplying IPL with
the number of SO2 Allowances directly attributed to such energy sales, or
by reimbursing IPL for the incremental cost of such number of SO2
Allowances, rounded to the nearest whole SO2 Allowance.
(1) If Buyer opts to reimburse IPL in cash for SO2 Allowances associated
with Buyer s energy purchases for the month, the cash amount due
at billing will be determined by multiplying the number of SO2
Allowances attributed to the sale by the incremental cost of the
SO2 Allowances, as determined in Subsection 2(b) of this Section
2.05, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will record
or transfer to IPL s account, the number of SO2 Allowances calculated
below, at the time cash settlement for the energy is due. In all
cases, Buyer will transfer to IPL s account the number of SO2
Allowances due IPL for calendar year no later than January 15
of the following year. "Transfer to IPL s account" shall mean, for
purposes of the Amendment, the transfer by the USEPA of the requisite
number of SO2 Allowances to IPL s Allowance Tracking System account
and the receipt by IPL of the Allowance Transfer Confirmation.
(2) Determination of SO2 Emission Allowances Due IPL
(a) Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy
sale made by IPL shall be determined for each hour, by
determining the contribution from each of the unit(s) from
which the energy sale is being made for that hour. For each
unit, the emission rate in pounds of SO2 per million Btu will
be determined each month, from fuel sulfur content, control
equipment performance, and continuous emissions monitoring
data. The emission rate and the unit heat rate will be used to
determine the SO2 Allowances used per megawatt-hour ("MWH").
The energy from each unit attributable to the sale, and the SO2
Allowances per MWH for each unit, will be used to determine the
number of SO2 Allowances attributable to the sale.
(b) Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic
dispatch of IPL s generating units in any month, will also be
the basis used to determine compensation for IPL s energy
sales. The incremental SO2 Allowances cost, in dollars per ton
of SO2, shall be determined each month and will be based on the
Cantor Fitzgerald offer price for SO2 Allowances, or if such is
not available, then another nationally recognized SO2 Allowance
trading market price or market price index, at the beginning of
the month. The SO2 Allowance value may be changed at any time
during the month to reflect the more current incremental cost,
or market price, for SO2 Allowances. Buyer will be notified of
the new SO2 Allowance value prior to dispatch of IPL energy to
Buyer.
When PSI is the supplier of energy and emission allowances, the
recovery of the applicable costs for the actual furnishing of adequate
allowances in order for PSI to generate and supply such energy will
be implemented in the following manner:
(1) The current Environmental Protection Agency ("EPA") auction price to
value emission allowances will be used for energy sales transactions.
The dispatch criteria may be revised from time to time if the
emission allowance purchases on the average are determined to be
significantly different than the EPA auction price.
(2) For each hour in which there is a transaction for energy services
using an Out-of-Pocket Cost rate under this 1992 Agreement, PSI will:
(a) identify the generation sources used to provide the
transaction s energy by identifying the energy that would not
have been used had the transaction not been in effect that hour
by using the same after-the-fact incrementing costing model
that is used to calculate the incremental cost of fuel under
this 1992 Agreement;
(b) determine, using the following formula, the quantity of
emission allowances related to the energy transaction:
(i) by calculating an incremental heat rate for the appropriate
generating unit and the corresponding incremental SO2 emission
levels, as determined by the computer based tools, for the
identified units dispatched to serve the transaction; (ii)
applying the following formula for each such unit; (iii) adding
together the total number of tons of SO2 produced per million
BTU (i.e., British Thermal Unit) of fuel burned by each such
unit for the transaction; and (iv) letting one (1) emission
allowance equal one (1) ton of SO2 so produced.
# OF UNITS
The sum of [MBTU SALE - MBTU NO SALE] * [SO2] * [100%-SE]
100%
MBTU SALE = Million BTU consumed on unit n with sale.
MBTU NO SALE = Million BTU consumed on unit n without sale.
SO2 = Tons of SO2 produced per million BTU of fuel burned.
SE = Scrubber Efficiency in %.
PSI will perform periodic tests to maintain the accuracy and
validity of such emission rate information. Because some
generating sources may not be subject to the Clean Air Act
during Phase I or Phase II thereunder, there will be no
emission allowance charges included for the utilization of such
an energy source while it is not subject to such requirements.
One (1) emission allowance shall be assigned to each ton of SO2
emitted to serve the transaction. Fractions of emission
allowance tons will be rounded up to the next whole number when
the fraction is equal to or greater than .5 and rounded down
when the fraction is less than .5.
(3) The purchasing Party of energy shall have the option of purchasing
or providing emission allowances for each transaction. The
purchasing Party shall notify PSI of its election to purchase or
provide emission allowances prior to the start of the transaction.
The running quantity of emission allowances charged or furnished
will be shown on the monthly invoices to the purchasing Party.
(4) When the purchasing Party of energy elects to purchase the
emission allowances from PSI, then the quantity of emission
allowances used will be included as part of the charges on the
monthly invoices to the purchasing Party.
(5) By January 15th of the year following the calendar year in
which the transaction occurred, the purchasing Party of energy
shall transfer the appropriate emission allowances to PSI for
the emission allowances used when the allowances are provided
in kind.
(6) PSI has adopted the same incremental cost calculation to value
emission allowances for dispatch criteria as for billing energy
transactions.
ARTICLE 3
SERVICE CONDITIONS
3.01. Control of System Disturbance. Each Party shall maintain and
operate its system so as to minimize, in accordance with sound operating
practice, the likelihood of disturbance originating in either Party s system
which might cause impairment to the service of the system of the other Party
or of any system interconnected with the system of the other Party.
3.02. Control of Kilovar Exchange. It is the intent that neither
Party shall be obligated to deliver kilovars for the benefit of the other
Party; also that neither Party shall be obligated to receive kilovars when
to do so may introduce objectionable operating conditions on its system.
The Operating Committee shall be responsible for the establishment of
operating procedures and schedules in respect of carrying kilovar loads by
one Party's system for the other Party's system in order to secure adequate
service and economical use of facilities of both Parties' systems and in
respect of proper charges, if any, for the use of facilities carrying
kilovar loads. In discharging such duties, the Operating Committee shall
recognize that in the transmission and delivery of power and energy
hereunder the carrying of kilovar loads by either Party, in harmony with
sound engineering principles of transmission operation with their systems
interconnected, is subject to numerous variables contingent upon loading and
operating conditions existing simultaneously on the systems of both Parties.
The operating procedures and schedules so established by the Operating
Committee shall be in accord with such principles and shall require each
Party to carry kilovar loads at such times and in such amounts as will be
equitable to both Parties.
3.03. Control of Unscheduled Power Deliveries. The Parties shall
exercise due diligence and foresight in carrying out all matters related to
the providing and operating of their respective electric power resources so
as to minimize to the extent practicable deviations between actual and
scheduled deliveries of electric power and energy between their systems.
The Parties shall provide and install on their respective systems such
communication and telemetering facilities as are essential to so minimize
such deviations and, in developing and executing operating procedures that
will enable the Parties to avoid to the extent practicable deviation from
scheduled deliveries, shall fully cooperate with each other and with third
parties whose systems are either directly or indirectly interconnected with
the systems of the Parties and who of necessity, together with the Parties,
must unify their efforts cooperatively to achieve effective and efficient
interconnected operation. The Parties recognize, however, that, despite
their best efforts to prevent the same, unscheduled deliveries of electric
energy from one Party to the other may occur. In such event, electric
energy delivered hereunder shall be settled for by the return of equivalent
energy. Equivalent energy shall be returned at times when the load
conditions of the Party receiving it are equivalent to the load conditions
of such Party at the time the energy for which it is returned was delivered
or, if such Party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon by the
Operating Committee, as will compensate for the difference in conditions.
ARTICLE 4
DELIVERY POINTS, MEETING POINTS,
AND METERING
4.01. Delivery Points. All electric energy delivered under the 1992
Agreement shall be of the character commonly known as three-phase sixty
Hertz energy, and shall be delivered at the Interconnection Points specified
under Section 1.01 hereof, at a nominal voltage of 138,000 volts at the Five
Points and Centerton Interconnection Points, at the 138KV Petersburg
Interconnection Point, and at the Carmel Tap Point; and at a nominal voltage
of 345,000 volts at the Whitestown and Gwynneville Interconnection Points,
and at the 345KV Petersburg Interconnection Point; and at such other points
and voltages as hereafter may be agreed upon by the parties pursuant to
Section 1.02 hereof.
4.02. Billing Based on Scheduled Transaction. As IPL and PSI systems
are interconnected with other systems forming a network, it is recognized
that, because of the physical and electrical characteristics of the
facilities involved, a part or all of the energy being transferred from one
Party to the other may flow through such other systems rather than through
the point or points of connection between the systems of the Parties. A
part or all of the power being transferred between other systems in the
network may flow through the point or points of connection between the
systems of the Parties, and as a result be included in the demand and energy
meter readings at the point or points of interconnection. Therefore, all
billings shall be based on scheduled transactions or upon methods determined
by the Operating Committee which may result from development of arrangements
with other interconnected systems and which provide a basis for accounting
for the power and energy transfers actually contracted for between the
Parties.
4.03. Metering Points. Electric power and energy supplied and
delivered under the 1992 Agreement shall be measured by suitable metering
equipment which shall be provided, owned and maintained by PSI or ILP as
designated below at the following metering points:
(i) 138,000 volt metering equipment installed by PSI at the Five
Points Substation; 138,000 volt metering equipment installed by
PSI at the Centerton Substation; 138,000 and 345,000 volt
metering equipment installed by IPL at the Petersburg Station;
345,000 volt metering equipment installed by IPL at its
Sunnyside Substation and at PSI s Gwynneville and Whitestown
Substations; and 12.47kV metering equipment installed by PSI at
its Carmel Southeast Substation, and
(ii) At such other locations as hereafter may be agreed upon by the
Parties pursuant to Section 1.02 hereof.
4.04. Metering Equipment. Suitable metering equipment at the metering
points as described in Section 4.03 above shall include electric meters,
potential and current transformers, and such other appurtenances as shall
be necessary to give for each direction of flow the following quantities:
(i) an automatic record of the kilowatt-hours for each clock-hour, and (ii)
a continuous integration record of the kilowatt-hours.
4.05. Measurement of Electric Energy. Measurements of electric energy
for the purpose of effecting settlements under the 1992 Agreement shall be
made by standard types of electric meters installed and maintained (unless
otherwise provided for in the Agreement) by the owner at the metering points
described in Section 4.03 above. The timing devices of all meters having
such devices shall be maintained in time synchronism as closely as
practicable.
The meters shall be sealed and the seals shall be broken only upon
occasions when the meters are to be tested or adjusted. for the purpose of
checking the records of the metering equipment installed by one of the
Parties as hereinabove provided, the other Party shall have the right to
install check metering equipment at the aforesaid metering points. Metering
equipment so installed by one Party on the premises of the other Party,
unless otherwise provided for in the 1992 Agreement, shall be owned and
maintained by the Party installing such equipment. Upon termination of the
1992 Agreement, the Party owning such metering equipment shall remove it
from the premises of the other Party. Authorized representatives of both
Parties shall have access at all reasonable hours to the premises where the
meters are located and to the records made by the meters.
4.06. Testing and Access to Meters and Records. The aforesaid
metering equipment shall be tested by the owner at suitable intervals and
its accuracy of registration maintained in accordance with good practice.
On request of either Party, a special test may be made at the expense of the
Party requesting such special test. Representatives of both Parties shall
be afforded the opportunity to be present at all routine or special tests
and upon occasions when any readings, for purposes of settlements hereunder,
are taken from meters not bearing an automatic record.
4.07. Adjustments Due to Inaccuracies. If at any test of metering
equipment an inaccuracy shall be disclosed exceeding two percent, the
account between the Parties for service theretofore delivered shall be
adjusted to correct for the inaccuracy disclosed over the shorter of the
following two periods: (i) for the thirty (30) day period immediately
preceding the day of the test, or (ii) for the period that such inaccuracy
may be determined to have existed. Should the metering equipment described
in Section 4.04 above at any time fail to register, the electric power and
energy delivered shall be determined from the check meters, if installed,
or otherwise shall be determined from the best available data.
ARTICLE 5
RECORDS AND STATEMENTS
5.01. Records. In addition to records of the metering provided for
in Article 4 hereof, the Parties shall keep in duplicate such other records
as may be needed to afford a clear history of the various deliveries of
electric energy made by one Party to the other and of the clock-hour
integrated demands in kilowatt-hours delivered by one Party to the other.
In maintaining such records, the Parties shall effect such segregations and
allocations of demands and electric energy delivered into classes
representing the various services and conditions as may be needed in
connection with settlements under the 1992 Agreement. The originals of all
such records shall be retained by the Party keeping the records and the
duplicates shall be delivered monthly to the other Party, except that the
Parties may agree upon a different time interval for such delivery.
5.02. Statements. As promptly as practicable after the end of each
calendar month, the Parties shall prepare a statement setting forth the
electric power and energy transactions between the Parties during such month
in such detail and with such segregations as may be needed for operating
records or for settlements under the provisions of the 1992 Agreement.
ARTICLE 6
BILLINGS AND PAYMENTS
6.01. Billing Period. Unless otherwise agreed upon by the Parties, the
calendar month shall be the standard billing period for all settlements
under the 1992 Agreement.
6.02. Billing Scheduled Transactions. All billing shall be based on
scheduled transactions unless otherwise determined as provided in Section
4.02 hereof.
6.03. Billing Payments. All bills for amounts owed by one Party to
the other Party shall be due on the first business day following the
twentieth (20th) day after the end of the calendar month or period service
was rendered, or on the fifteenth (15th) business day following receipt of
a bill, whichever is later. Payments shall be made by electronic transfer
or by such other mutually agreeable method as shall cause such payment to
be available for the account of the payee on or before the due date.
Interest on unpaid amounts, both principal and interest, shall accrue daily
at the then current prime interest rate per annum of The Chase Manhattan
Bank, N.A., New York, New York, plus two percent (2%) per annum, or the
maximum rate permitted by law, whichever is less, from the date due until
the date upon which payment is made.
6.04. Estimated Billing Factors. In order that bills may be rendered
promptly after the end of the each month, it may be necessary, from time to
time, to estimate certain factors involved in calculating the monthly
billing. Adjustments for errors in such estimates shall be included in the
bill for the month following the time when information becomes available to
make such corrections or adjustments in the billing for the preceding month
or months.
6.05. Billing Disputes. If a Party disputes the correctness of a
bill, such Party will, nevertheless, pay the undisputed portion of such
bill, plus a minimum of one-half (1/2) of the disputed amount, and shall
submit to the other Party a written statement detailing the items disputed.
If the Parties are unable to agree upon the disputed items, such items shall
be submitted to the Operating Committee for further action consistent with
the 1992 Agreement.
ARTICLE 7
OPERATING COMMITTEE
7.01. Operating Committee Organization and Duties. To coordinate the
operation of their respective generation, transmission, and substation
facilities in order that the benefits of the 1992 Agreement may be realized
by the Parties to the fullest practicable extent, the Parties shall
establish a committee of authorized representatives to be known as the
Operating Committee. Each of the Parties shall designate in writing
delivered to the other Party, the person who is to act as its authorized
representative (the "OC Representative") on said committee (and the person
or persons who may serve as Alternate whenever the OC Representative is
unable to act). The OC Representative and Alternate or Alternates shall
each be persons familiar with the generation, transmission, and substation
facilitates of the system of the Party he represents, and each shall be
fully authorized (i) to cooperate with the other OC Representative (or
Alternates) and (ii) as the need arises and subject to the declared
intentions of the Parties as herein set forth and to the terms hereof and
the terms of any other agreements then in effect between the Parties, to
determine and agree from time to time upon the following:
(i) All matters pertaining to the coordination of maintenance of
the generation and transmission facilities of the Parties.
(ii) All matters pertaining to the control of time, frequency,
energy flow, kilovar exchange, power factor, voltage, and other
similar matters bearing upon the satisfactory synchronous
operation of the systems of the Parties.
(iii) Such other matters not specifically provided for herein upon
which cooperation, coordination and agreement as to quantity,
time, method, terms and conditions are necessary, in order that
the operation of the respective systems of the Parties may be
coordinated to the end that the potential benefits anticipated
by the Parties will be realized to the fullest extent practicable.
7.02. Operating Committee Access. For the purpose of inspection and
reading of meters, checking of records, and all other pertinent matters, the
OC Representative and their Alternates shall have the right of entry at any
reasonable time to all property of the Parties used in connection with the
performance of the 1992 Agreement.
7.03. Unanimous Action. All actions taken by said Operating Committee
must be by unanimous vote or consent of all OC Representatives (including
Alternates acting during OC Representatives' absence).
7.04. Expenses. The expenses for establishing and maintaining the
Operating Committee shall be the responsibility of each individual Party as
regards to its respective personnel. Any expenses jointly incurred by said
Operating Committee in carrying out its duties, other than for the Parties
personnel, shall be shared equally by the Parties.
7.05. Authority to Amend or Supplement. The Operating Committee may
recommend changes to the 1992 Agreement, but said Operating Committee shall
not have authority to amend or supplement the 1992 Agreement.
ARTICLE 8
CONTINUITY AND SUSPENSION OF SERVICE
RELATIVE RESPONSIBILITIES AND
LIABILITY LIMITS
8.01. Continuity and Suspension of Service. Each Party shall exercise
reasonable care and foresight to maintain continuity of service as provided
in the 1992 Agreement. In no event shall one Party be liable to the other
Party or its customers for loss or damage arising from failure to provide
or for the interruption or suspension of any service provided for herein.
Each Party reserves the right to suspend service without liability at such
times and for such periods and in such manner as it deems advisable,
including, without limitation, suspensions for the purpose of making
necessary adjustments to, changes in, or repairs on, its facilities and to
suspend service in cases where, in its sole opinion, the continuance of
service to the other Party would endanger persons or property. Both Parties
shall use their best efforts to provide each other with reasonable notice
in the event of suspension of service.
8.02. Relative Responsibilities. Each Party assumes all
responsibility for receipt and delivery of electricity on its system to and
from the Points of Interconnection specified in Section 1.01 hereof or
agreed upon pursuant to Section 1.02 hereof. Neither Party assumes any
responsibility with respect to the construction, installation, maintenance
or operation of the system of the other Party or of the systems of third
parties, in whole or in part. In no event shall one Party be liable to the
other Party for damage or injury to any person or property, whatsoever,
arising, accruing or resulting from, in any manner, the receiving,
transmission, control, use, application or distribution of said electric
power and energy. Each Party shall use reasonable diligence to maintain its
facilities in proper and serviceable condition, and shall take reasonable
steps and precautions for maintaining the services agreed to be provided and
received under the 1992 Agreement. Each Party shall be responsible for its
own compliance with all applicable environmental regulations and shall bear
all costs arising from its failure to comply with such environmental
regulations.
8.03. Limitation of Liability. In no event shall one Party be liable
to the other Party for any indirect, special, incidental or consequential
damages with respect to any claim arising out of the 1992 Agreement.
ARTICLE 9
TERM OF AGREEMENT
9.01. The term of the 1992 Agreement and of the annexed Service
Schedules shall begin as of May 1, 1992 and (except for Service Schedule D)
shall continue through April 30, 2022 (the "Initial Term"); thereafter, the
Agreement and Service Schedules (except Service Schedule D) shall continue
for successive terms of three (3) years each unless and until terminated by
either Party by giving notice to the other Party of its intention to
terminate the 1992 Agreement at least two (2) years prior to the end of the
Initial Term or any successive term; provided, that the 1992 Agreement shall
not be deemed to have terminated until all prior commitments for sales or
purchases of power and energy hereunder shall have been fulfilled and all
payments shall have been made. The term of Service Schedule D shall be as
provided therein. Any notice of termination hereunder shall be given to the
President or Chief Operations Officer of a Party with a copy to the OC
Representative of such Party.
ARTICLE 10
WAIVERS
10.01. Any waiver at any time by either party of their rights
with respect to a default under the 1992 Agreement, or with respect to any
other matter arising in connection with the 1992 Agreement shall not be
deemed a waiver with respect to any subsequent default or matter. Any
delay, short of the statutory period of limitation, in asserting or
enforcing any right under the 1992 Agreement shall not be deemed a waiver
of such right.
ARTICLE 11
TAXES
11.01. If at any time during the term hereof there should be
levied or assessed against either Party any direct tax by any taxing
authority on the capacity or energy (or both) generated, purchased, sold,
transmitted, interchanged or exchanged by it, which tax is in addition to
or different from the forms of such direct tax as are being levied or
assessed as of the date hereof and such direct tax results in increasing the
cost of either or both the Parties in carrying out the provisions of the
1992 Agreement, then such increase shall be reflected in the charges for
capacity or energy (or both) furnished by one Party to the other hereunder
as is necessary in order to make adequate and equitable allowances for such
tax.
ARTICLE 12
NOTICES
12.01. Notices Relating to Provisions of the 1992 Agreement.
Except as herein otherwise provided, any notice which may be given to or
made upon either Party by the other Party, under any of the provisions of
the 1992 Agreement, shall be in writing unless it is otherwise specifically
provided herein, and shall be treated as duly delivered when the same is
either (a) personally delivered to the President or Chief Operations Officer
of the other Party or (b) deposited in the United States mail, postage
prepaid and properly addressed to the President or Chief Operations Officer
of the other Party; provided, however, that either Party may alter its
recipient for notice hereunder by written notice to the other Party in
accordance with the provisions of this Section 12.01.
12.02. Notices of An Operating Nature. Any notice, request or
demand pertaining to matters of an operating nature may be served in person
or by United States mail, messenger, telephone, or telegraph, facsimile
transmission or orally, as circumstances dictate, from the OC Representative
of one Party to the OC Representative of the other Party; provided, that
should the same not be written, confirmation thereof shall be made in
writing as soon as practicable thereafter, upon request of the Party being
served.
ARTICLE 13
REGULATORY AUTHORITIES
13.01. Regulatory Authority. The 1992 Agreement is made subject
to the authority of the Federal Energy Regulatory Commission or any other
governmental regulatory agency having jurisdiction in the premises and, if
any of the terms and conditions hereof are altered or made impossible of
performance by order, rule, or regulation of any such regulatory agency, and
the Parties hereto are unable to agree upon a modification of such terms and
conditions that will satisfy such order, rule, or regulation, then neither
Party shall be liable to the other for failure thereafter to comply with
such terms and conditions; provided, that if either Party deems that the
failure of such performance results in a substantial breach of the 1992
Agreement, then the 1992 Agreement may be terminated forthwith upon thirty
(30) days advance written notice.
13.02. Amendments. The 1992 Agreement and the annexed Service
Schedules may be amended by mutual agreement of the Parties, which amendment
shall be in writing and shall become effective in accordance with Section
13.01 hereof. The rates and charges set forth in the annexed Service
Schedules are subject to amendment and change, and each party reserves the
right from time to time to seek unilaterally, from any regulatory agency
having jurisdiction, amendments or changes in its rates and charges set
forth therein in accordance with the applicable law. Nothing contained in
the 1992 Agreement, any annexed Service Schedule or any supplements thereto
shall be construed as affecting in any way the right of either Party
unilaterally to make application to the Federal Energy Regulatory Commission
(or any successor regulatory agency having jurisdiction) for a change in
rates under Section 205 of the Federal Power Act and pursuant to the
Commission s Rules and Regulation promulgated thereunder (or under
comparable statutes and regulations of a successor regulatory agency having
jurisdiction).
ARTICLE 14
MISCELLANEOUS
14.01. No Partnerships; Tax Matters. Notwithstanding any
provision of the 1992 Agreement to the contrary, the Parties do not intend
to create hereby any joint venture, partnership, association taxable as a
corporation, or other entity for the conduct of any business for profit, and
any construction of the 1992 Agreement to the contrary which has an adverse
tax effect on either Party shall render the 1992 Agreement null and void
from its inception.
14.02. Computation of Time. In computing any period of time
prescribed or allowed by the 1992 Agreement, the day of the act, event, or
default from which the designated period of time begins to run shall be
excluded but the last day of such period shall be included, unless it is a
Saturday, Sunday, or legal holiday, in which event the period shall run
until the end of the next business day which is not a Saturday, Sunday, or
legal holiday.
14.03. Section Headings Not to Affect Meaning. The descriptive
headings of the Articles, Sections, Subsections and paragraphs of the 1992
Agreement have been inserted for convenience only and shall not modify or
restrict any of the terms and provisions thereof.
ARTICLE 15
ASSIGNMENT
15.01. The 1992 Agreement shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the Parties, but the
assignment thereof by a Party shall not relieve such Party, without the
written consent of the other Party, of any obligation to supply, or to take
and pay for, as the case may be, the services hereunder.
ARTICLE 16
ENTIRE AGREEMENT CONTAINED HEREIN
16.01. The 1992 Agreement contains the entire agreement between
the Parties in respect of the subject matter hereof, and there are no other
understanding or agreements between the Parties in respect thereof;
provided, however, that nothing contained in the 1992 Agreement shall be
deemed to affect in any manner whatsoever any rights or claims either Party
may have against the other Party pursuant to any other agreement in effect
before the effective date of the 1992 Agreement with respect to any matter,
including any right or claim to payments after the effective date of the
1992 Agreement pursuant to other preexisting agreements.
ARTICLE 17
1962 AGREEMENT SUPERSEDED
17.01. The 1992 Agreement constitutes an amendment to and
complete restatement of the 1962 Agreement and, as such, supersedes the 1962
Agreement from and after the date the 1992 Agreement becomes effective.
ARTICLE 18
AGENCY OF CINERGY SERVICES, INC.
18.01. CINergy Services joins in the execution of this Agreement
for the sole purpose of serving and acting as agent for PSI.
<PAGE>
IN WITNESS WHEREOF the Parties have caused the 1992 Agreement to be executed
by their respectable duly authorized officers and their respective corporate
seal to be hereunder affixed as of the date first above mentioned.
INDIANAPOLIS POWER & LIGHT
(IPL)
By: /s/ John R. Brehm
John R. Brehm
Senior Vice President
Finance and Information Services
Attest:
By: /s/ Bryan G. Tabler
Bryan G. Tabler
Senior Vice President
Secretary and General Counsel
CINERGY SERVICES, INC.
(CINergy Services)
By: /s/ Terry E. Bruck
Terry E. Bruck
Group Vice President
PSI ENERGY, INC.
(PSI)
By: /s/ John M. Mutz
John M. Mutz
President
<PAGE>
EXHIBIT I
(First Revision)
SERVICE SCHEDULE A
EMERGENCY SERVICE
SECTION 1 - DURATION
1.1 This Service Schedule A, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement"), dated as of May 1,
1992, among Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana, Inc.
(hereinafter called "PSI") and CINergy Services, Inc. (hereinafter called
"CINergy Services"), shall become effective as of the effective date of the
Third Amendment, dated June 30, 1995, to the 1992 Agreement and shall
continue in effect throughout the duration of the 1992 Agreement. IPL, PSI
and CINergy Services are sometimes hereinafter referred to individually as
"Party" or collectively as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Conditional Service. Subject to the provisions of Subsection 2.2 of
this Section 2, in the event of a breakdown or other emergency in or on the
system of any Party involving either sources of power or transmission
facilities, or both, impairing or jeopardizing the ability of the Party
suffering the emergency to meet the loads of its system, another Party shall
deliver to such Party electric energy that it is requested to deliver;
provided, however, that a Party shall not be obligated to deliver such
energy which, in its sole judgment, it cannot deliver without interposing
a hazard to or economic burden upon its operations or without impairing or
jeopardizing the other load requirements of its system and provided further,
that a Party shall be obligated to deliver electric energy to another Party
for a period in excess of forty-eight (48) consecutive hours during any
single emergency.
2.2 Non-performance. The Parties recognize that the delivery of electric
energy as provided in Subsection 2.1 of this Section 2 is subject to two
conditions which may preclude the delivery of such energy as so provided:
(a) the Party requested to deliver electric energy may be suffering an
emergency in or on its own system as described in said Subsection 2.1, or
(b) the system of a Party may be delivering electric energy, under a mutual
emergency interchange agreement, to the system of another interconnected
company which is suffering any emergency in or on its system. Under
conditions as cited under (a) above, a Party shall not be considered to be
in default hereunder if it is unable to comply with the provisions of said
Subsection 2.1. Under conditions as cited under (b) above, a Party shall
not be considered to be in default hereunder if it is unable to comply with
the provisions of said Subsection 2.1; provided, however, that such Party
shall make every effort consistent with the terms of its contract with said
other interconnected company to make the electric energy as provided in
Subsection 2.1 available to another Party hereto as soon as possible.
2.3 Reserve Generating Capacity Review. If at any time the record over a
reasonable prior period shows clearly that one of the Parties has failed to
deliver energy in accordance with and subject to the provisions of
Subsection 2.1 and Subsection 2.2 of this Section 2, a Party, by written
notice given to another Party, may call for a joint study by the Parties of
the reserve generating capacity in and provided for their respective systems
and of their respective system transmission facilities affecting the supply
and delivery of power and energy under the 1992 Agreement. It shall be the
purpose of such study to determine the adequacy or inadequacy of reserve
generating capacity and transmission facilities being provided to meet the
requirements of the Parties respective systems, reflecting obligations under
the 1992 Agreement, and, if inadequate, the extent of the burden that a
Party may be placing upon another Party. If it should be found that a Party
is placing an unreasonable burden upon another Party, the Party causing such
burden shall take such measures as are necessary to remove the burden from
another Party, or the Parties shall enter into such arrangements as shall
provide for equitable compensation to the Party being burdened.
SECTION 3 - COMPENSATION
3.1 When IPL is the Supplying Party:
3.11 Emergency Energy delivered that is generated by IPL shall be
settled for, at the option of IPL, either by the return of equivalent energy
at a mutually acceptable time upon request of IPL or by payment of the
greater of (a) 110% of the Out-Of-Pocket Cost (such cost being as of the
delivery point or points, as referred to in Section 4.01 of the 1992
Agreement, taking into account electrical losses incurred from the source
or sources of such energy to the delivery point or points) of supplying such
energy, or (b) $0.10 per kilowatt-hour.
3.12 Emergency Energy delivered that is purchased by IPL from a third
party shall be settled for by payment of an energy charge of 100% of the
Out-Of-Pocket Cost paid therefor by IPL, plus an amount to be agreed upon
by the Parties at the time of the transactions of up to 4.6 mills per
kilowatt-hour (consisting of up to 3.6 mills per kilowatt-hour for bulk
transmission charge plus 1 mill per kilowatt-hour for difficult to quantify
energy-related costs), plus any transmission losses resulting on IPL's
system on account of the transaction, and plus any taxes incurred by IPL on
account of the transaction.
3.2 When PSI is the Supplying Party:
3.21 Emergency Energy delivered that is generated by PSI shall be
settled for by payment of the greater of (a) 110% of the Out-Of-Pocket
Cost (such cost being as of the interconnection point or points, as
referred to in Section 4.01 or the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such energy
to the interconnection point or points) of supplying such energy.
Non-firm transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm
Point-to-Point Transmission Service Standard Tariff - NFT (or any
successor transmission tariff of similar service) must be obtained,
or (b) $100 per megawatt-hour.
3.22 Emergency Energy delivered that is purchased by PSI from a third
party shall be settled for by payment of the greater of (a) of an
energy charge of 100% of the Out-Of-Pocket Cost paid therefor by PSI
plus $1.00 per megawatt-hour (for difficult to quantify energy-related
costs), plus any transmission losses resulting on the system of the
CINergy Operating Companies on account of the transaction. Non-firm
transmission service per the provisions of the CINergy Services, Inc.,
FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-to-Point
Transmission Service Standard Tariff - NFT (or any successor
transmission tariff of similar service) must be obtained, and
plus any regulatory commission charges and taxes incurred by PSI on
account of the transaction, or (b) $100 per megawatt-hour.
3.3 If the option of returning electric energy under Subsection 3.11 is
exercised, then it shall be returned at times when the load conditions of
the Party receiving it are equivalent to the load conditions of such Party
at the time the energy for which it is returned was delivered or, if such
Party elects to have equivalent energy returned under different conditions,
it shall be returned in such amounts, to be agreed upon by the Operating
Committee under the Agreement, as will compensate the Party for the
difference in conditions.
<PAGE>
EXHIBIT II
(First Revision)
SERVICE SCHEDULE B
INTERCHANGE ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule B, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement"), dated as of May 1,
1992, among Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana, Inc.
(hereinafter called "PSI") and CINergy Services, Inc. (hereinafter called
"CINergy Services"), shall become effective as of the effective date of the
Third Amendment, dated June 30, 1995 to the 1992 Agreement and shall
continue in effect throughout the duration of the 1992 Agreement. IPL, PSI
and CINergy Services are sometimes hereinafter referred to individually as
"Party" or collectively as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 It is recognized that from time to time that any of the Parties may
have electric energy (herein called "Economy Energy") available from surplus
capacity either on its own system or from sources outside its own system,
or both, and that Economy Energy could be supplied to another Party at a
cost that would result in operating savings to such another Party. Such
operating savings would result from the displacement of electric energy that
otherwise would be supplied from capacity either on such other Party's
system or from sources outside its own system, or both. To promote the
economy of electric power supply and to achieve efficient utilization of
production capacity, any Party, whenever it in its sole judgment determines
Economy Energy is available, may, but shall not be obligated to, offer
Economy Energy to another Party. Promptly upon receipt of any such offer
said Party shall notify the offering Party of the extent to which it desires
to use such Economy Energy, and schedules providing the periods and extent
of use shall be mutually agreed upon by the Parties. Such energy is non-
firm and may be withdrawn by the supplying Party with a ten (10) minute
notification. A transaction made by PSI and CINergy Services under this
Service Schedule B shall not extend beyond twelve (12) months.
Non-Displacement Energy
2.2 It is further recognized that from time to time occasions will arise
when the effecting of transactions, as provided in Subsection 2.1 of this
Section 2, will be impracticable, but at the same time one of the Parties
may have electric energy (herein called "Non-Displacement Energy") which it
is willing to make available from surplus capacity either on its own system
or from sources outside its own system, or both, that can be utilized
advantageously for short intervals by another Party. It shall be the
responsibility of the Party desiring the receipt of Non-Displacement Energy
to initiate the receipt and delivery of such energy. Any Party desiring
such receipt of energy shall inform another Party of the extent to which it
desires to use Non-Displacement Energy, and whenever in its sole judgment
such another Party determines that it has Non-Displacement Energy available,
schedules providing the periods and extent of use shall be mutually agreed
upon by the Parties. Any Party shall not be obligated to make any Non-
Displacement Energy available to another Party.
2.3 PSI may reduce or discontinue the supply of Hourly Non-Displacement
Energy at any time. To the extent possible, however, PSI shall advise IPL
of its intention to reduce materially or discontinue the supply of Hourly
Non-Displacement Energy.
2.4 PSI shall supply Daily and Weekly Non-Displacement Energy for three (3)
hours after they have notified IPL of its intention to discontinue such
supply of energy; however, PSI shall be under no obligation to continue the
supply of said energy for more than three (3) hours after said notification.
2.5 A transaction made by PSI under Subsection 2.2 above shall not extend
beyond twelve (12) months.
SECTION 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by a Party from another Party
shall be based on the principle that the Party purchasing it shall pay the
Out-Of-Pocket Cost (including all operating, maintenance, tax, regulatory
commission charges, transmission losses and other expenses incurred that
would not have been incurred if the energy had not been supplied) being at
the interconnection points (as defined in Article 4 of the 1992 Agreement),
of the Party supplying such energy and that the resulting savings to the
receiving Party shall be equally shared by the supplying and receiving
Parties. Prior to any transaction involving the delivery and receipt of
Economy Energy, authorized representatives of the Parties shall determine
and agree upon the compensation applicable to such transaction.
Compensation so agreed upon shall not be subject to later review or
adjustment. PSI shall dedicate an amount at the time of the transactions
for non-firm transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or any successor
transmission tariff of similar service) from its portion of the resulting
savings.
3.2 When Economy Energy is obtained from or delivered to other systems
interconnected with the Parties, but not signatories to the 1992 Agreement,
payments shall be based on the Out-Of-Pocket Cost of the supplying Party or
system providing the energy and an allocation of the gross savings which are
defined as the difference between (1) what such Out-Of-Pocket Costs of the
receiving Party or system would have been to generate such energy, and (2)
such Out-Of-Pocket Costs of the supplying Party or system providing the
energy. Such allocation shall be made as provided in Subsections 3.21 and
3.22 hereinbelow:
<PAGE>
3.21 The transmitting Party shall be paid (a) its costs of purchasing
the energy supplied, plus (b) its costs of
additional transmission losses plus (c) the following:
(1) When IPL is such transmitting Party: Fifteen percent
(15%) of the gross savings remaining after deducting all
such payments for transmission losses.
(2) When PSI is the transmitting Party, they shall receive
the greater of (a) 15% (such charge pertains to the
reservation of transmission) of the gross savings
remaining after deducting all such payments for
transmission losses or (b) the sum of a demand charge
rate per megawatt reserved per hour at the time such
Economy Energy is reserved for non-firm transmission
service per the provisions of the CINergy Services, Inc.,
FERC Electric Tariff, Original Volume No. 3, Non-Firm
Point-to-Point Transmission Service Standard Tariff - NFT
(or any successor transmission tariff of similar
service), plus $1.00 per megawatt-hour (for difficult to
quantify energy-related costs), plus any transmission
losses resulting on the system of the CINergy Operating
Companies on account of the transaction and plus any
regulatory commission charges and taxes incurred by PSI
on account of the transaction.
3.22 The supplying Party or system shall be paid its Out-Of-Pocket
Cost of providing the energy, plus one-half of the gross
savings remaining after deducting all (b) and (c) payments made
under Subsection 3.21. The receiving Party or system shall be
entitled to the other one-half of the gross savings remaining
after deducting all (b) and (c) payments made under Subsection
3.21.
Non-Displacement Energy
3.3 Non-Displacement Energy delivered hereunder shall be settled for either
by the return of equivalent energy (only in the case where IPL is the
supplying Party) or, at the option of the Party that supplied such energy,
by payment of an energy charge of up to 110% of the Out-Of-Pocket Cost (such
cost being as of the delivery point or points, as provided in Section 4.01
of Article 4 of the 1992 Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said delivery point
or points) to the supplying Party generating such energy plus (the
applicable demand charge rates per this Subsection are limited by
Subsections 3.7 and 3.8):
3.31 When IPL is the supplying Party:
3.31.1 IPL, at its option, may impose a demand charge of up to
48.6 mills per kilowatt reserved per hour, but the total demand
charge in any one day shall be no more than the product of
$0.778 times the highest amount in kilowatts reserved in any
hour during the day. Or,
3.31.2 IPL, at its option, may choose to supply such energy
without imposing a demand charge in which case no additional
payment is included. However, if this option is chosen, the
cost of such energy will be calculated as 110% of the actual
Out-Of-Pocket Cost (such cost being as of the delivery point or
points, as provided in Section 4.01 of Article 4 of the 1992
Agreement, taking into account electrical losses incurred from
the source or sources of such energy to said delivery point or
points) to the supplying Party generating such energy.
3.32 When PSI is the supplying Party by payment of the following:
(1) For energy generated, the agreed upon demand charge rate of up
to $50 per megawatt-hour (such charge pertains to the production
component only), the total demand charge in any one
day shall be no more than the product of $797 and the greatest
amount of megawatts reserved in any hour during said day and
the total charge in any one week shall be no more than the
product of $4,781 and the greatest number of megawatts reserved
in any hour during said week. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm Point-to-Point
Transmission Service Standard Tariff - NFT (or any successor
transmission tariff of similar service) must be obtained;
(2) For daily energy which is purchased by PSI from a third party
for economic reasons to meet system needs but in subsequent
system resources accounting calculations is determined to have
been used to supply a Daily Non-Displacement Energy transaction
and for which PSI stands by to supply from its own resources:
(a) the amount paid by PSI to the third party for such energy,
plus (b) the cost of transmission losses, regulatory commission
charges and taxes incurred which would not otherwise have been
incurred, plus (c) $1.00 per megawatt-hour for difficult-to-
quantify energy related costs, and, plus (d) up to $50 per
megawatt-hour (such charge pertains to the production component
only), the total charge in any one day shall be no more than
the product of $797 and the greatest number of megawatts
reserved in any hour during said day and the total charge in
any one week shall be no more than the product of $4,781 and
the greatest number of megawatts reserved in any hour during
said week. Non-firm transmission service per the provisions of
the CINergy Services, Inc., FERC Electric Tariff, Original
Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of
similar service) must be obtained.
3.33 If equivalent energy is returned to IPL, it shall be returned
at times when the load conditions of the Party receiving it are
equivalent to the load conditions of such Party at the time the
energy for which it is returned was delivered or, if such Party
elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed
upon by the Operating Committee, as will compensate for the
difference in conditions.
3.4 Non-Displacement Energy delivered under Subsection 2.2 above that is
purchased by the supplying Party from another interconnected system which
is not a signatory to the 1992 Agreement ("Third Party") at the request of
the receiving Party shall be settled for as follows:
3.41 When IPL is the supplying Party, by a payment of 100 percent of the
amount paid to such Third Party, plus a demand charge in an amount to
be agreed upon by the Parties at the time of the reservation of up to
3.6 mills per kilowatt reserved per hour, but the total demand charge
in any one day shall be no more than the product of $0.058 times the
highest amount in kilowatts reserved in any hour during the day, plus
1 mill per kilowatt-hour (for difficult to quantify energy-related
costs), plus the cost of any quantifiable transmission losses, taxes,
and other expenses incurred that would not have been incurred if such
transaction had not been made.
3.42 When PSI is the supplying Party: by (a) non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm Point-to-Point Transmission
Service Standard Tariff - NFT (or any successor transmission tariff
of similar service) must be obtained and (b) an energy charge of 100%
of the Out-of-Pocket Cost paid therefor by PSI, plus $1.00 per
megawatt-hour (for difficult to quantify energy-related costs), plus
any transmission losses resulting on the system of the CINergy
Operating Companies on account of the transaction, and plus any
regulatory commission charges and taxes incurred by PSI on account of
the transaction.
3.5 Notwithstanding the rates stated in Subsection 3.3 above, when IPL is
the supplying Party, if the "demand charge" option of Section 3.31.1 is
chosen, the sum of the demand and energy charges for each specific
reservation made pursuant to Section 2.2 of this Service Schedule B which
includes a demand charge shall not:
(1) exceed the total of:
(i) The product of the number of kilowatts reserved for such
reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and
(ii) The product of the number of kilowatt-hours supplied for
such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg
Unit No. 4 for the last preceding month during which it
was run; or
(2) be less than 100% of the total Out-Of-Pocket Cost of supplying
the Non-Displacement Energy for such reservation.
3.6 Notwithstanding the rates stated in Subsection 3.3 above, when PSI and
CINergy Services are the supplying Party, the sum of the demand and energy
charges for each specific reservation made pursuant to Section 2.2 of this
Service Schedule B shall not:
(1) exceed the total of:
(i) The product of the number of megawatts reserved for such
reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and plus
(ii) The product of the number of megawatt-hours supplied for
such reservation times 110% of the average cost per
megawatt-hour of energy generated by the CINergy
Operating Companies Zimmer Unit No. 1 and Gibson Unit
No. 5 for the preceding month; nor
(2) be less than 100% of the total Out-Of-Pocket Cost of supplying
the Non-Displacement Energy for such reservation.
3.7 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Petersburg Unit No. 4, is limited to
515 MW.
3.8 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge is
determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is limited to
925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net Demonstrated
Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated Capability of
313 MWs) on an hourly basis. For sales in excess of the capacity limitation
of 925 MWs noted above, the rate shall consist of an energy charge of up to
110% of Out-of-Pocket Cost and a demand charge of up to $ 13 per megawatt
per hour (such charge pertains to the production component only), the total
charge in any one day shall be no more than the product of $209 and the
greatest number of megawatts reserved in any hour during said day and the
total charge in any one week shall be no more than the product of $1,252 and
the greatest number of megawatts reserved in any hour during said week.
Non-firm transmission service per the provisions of the CINergy Services,
Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-to-Point
Transmission Service Standard Tariff - NFT (or any successor transmission
tariff of similar service) must be obtained; but in no event shall the total
revenue (energy charge and demand charge combined) be less than 100% of the
Out-of-Pocket Costs for supplying the Non-Displacement Energy for such
reservation. Notwithstanding all previous Subsections, when power is sold
under both this Subsection and Subsection 3.3 in any month, the total demand
charge will be the applicable weighted average demand charges in this
Subsection and Subsection 3.3. Such weighting will be developed by adding
the number of hours that power was provided under this Subsection times the
applicable demand charge under this Subsection and the number of hours that
power was provided under Subsection 3.3 times the applicable demand charge
in Subsection 3.3, with the sum being divided by the applicable number of
hours of the transaction (month, week, day or hours).
<PAGE>
EXHIBIT III
(First Revision)
SERVICE SCHEDULE C
SHORT TERM POWER AND ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule C, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement"), dated as of May 1,
1992, among Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana, Inc.
(hereinafter called "PSI") and CINergy Services, Inc. (hereinafter called
"CINergy Services"), shall become effective as of the effective date of the
Third Amendment, dated June 30, 1995, to the 1992 Agreement and shall
continue in effect throughout the duration of the 1992 Agreement. IPL, PSI
and CINergy Services are sometimes hereinafter referred to individually as
"Party" or collectively as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Any Party, by giving the other Parties notice, may reserve from the
other Parties (a) electric power ("Weekly Short Term Power") for periods of
one or more weeks or (b) electric power ("Daily Short Term Power") for
periods of one or more days whenever the Party requested to reserve the same
is willing to make such power available. Under ordinary circumstances such
reservation shall extend for not less than a calendar week if it begins with
Sunday or for the balance of the calendar week if it begins with any day
subsequent to Sunday; however, under unusual circumstances, the Parties may
mutually agree upon a reservation of Daily or Weekly Short Term Power for
a lesser number of days. In all cases the Party asked to supply Daily or
Weekly Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by another
Party as Short Term Power. A transaction made by any Party under this
Service Schedule C shall not extend beyond twelve (12) months.
2.11 Prior to each reservation of Weekly or Daily Short Term Power,
the number of megawatts to be reserved, the period of the reservation, the
terms of such reservation, and the source of such power if the supplying
Party is in turn reserving such power from another interconnected system
which is not a signatory to the 1992 Agreement ("Third Party"), shall be
determined by the Parties. Such reservation shall be confirmed in writing
at the request of any Party. If during such period the conditions arise
that could not have been reasonably foreseen at the time of the reservation
and cause the reservation to be burdensome to the supplying Party, such
Party may by oral notice to the reserving Party, such oral notice to be
later confirmed in writing if requested by any Party, reduce the number of
megawatts reserved by such amount and for such time as it shall specify in
such notice, but kilowatts reserved hereunder that the supplying Party is
in turn reserving from a Third Party may be reduced only to the extent they
are reduced by such Third Party.
2.12 During each period that Weekly or Daily Short Term Power has
been reserved, the Party that has agreed to supply such power shall
upon call by the reserving Party deliver associated electric energy
("Weekly or Daily Short Term Energy") to the reserving Party as of the
interconnection point or points, as provided in Section 4.01 of
Article 4 of the 1992 Agreement at a rate during each hour of up to
and including the number of megawatts reserved.
SECTION 3 - COMPENSATION
3.1 Weekly Short-Term Power and Energy
3.1.1 Except as otherwise provided in Subsection 3.1.3 below, when
IPL is the supplying Party, PSI shall pay all of the following which
are applicable (the applicable demand charge rate per this Subsection
is limited by Subsection 3.5):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved, at a rate of up to $3.89 per kilowatt
reserved, except, for each day (other than Sunday) during
any part of which the amount of such Weekly Short-Term
Power and Energy is reduced by IPL, the total demand
charge shall be reduced by one-sixth (1/6) of said agreed
upon demand charge rate for each megawatt of the reduction;
(b) for Weekly Short-Term Energy delivered that is generated
by IPL, an energy charge to be agreed upon by the Parties
at the time of the transaction of up to 110% of the Out-
Of-Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses incurred
from the source or sources of such energy to the
interconnection point or points) of supplying such
energy;
(c) for Weekly Short-Term Energy delivered that is purchased
by IPL from a Third Party, an energy charge of 100% of
the Out-Of-Pocket Cost paid therefor by IPL, plus one (1)
mill per kilowatt-hour of such purchased energy (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on IPL s system on account
of the transaction, and plus any taxes incurred by IPL on
account of the transaction.
3.1.2 Except as otherwise provided in Subsection 3.1.3 below, when
PSI is the supplying Party, IPL shall pay all of the following which
are applicable (the applicable demand charge rate per this Subsection
is limited by Subsection 3.6):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved. Said demand charge rate shall be at
a rate of up to $4,781 per megawatt reserved (such charge
pertains to the production component only), except for
each day (other than Sunday) during any part of which the
amount of such Weekly Short-Term Power and Energy is
reduced by PSI, the total demand charge shall be reduced
by one-sixth (1/6) of said agreed upon demand charge rate
(rounded to the nearest $0.10 per megawatt) for each
megawatt of the reduction. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC
Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service)
must be obtained;
(b) for Weekly Short-Term Energy delivered that is generated
by PSI, an energy charge to be agreed upon by the Parties
at the time of the transaction of up to 110% of the Out-
Of-Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses incurred
from the source or sources of such energy to the
interconnection point or points) of supplying such
energy;
(c) for Weekly Short-Term Energy delivered that is purchased
by PSI from a Third Party, an energy charge of 100% of
the Out-Of-Pocket Cost paid therefor by PSI, plus $1.00
per megawatt-hour of such purchased energy (for difficult
to quantify energy-related costs), plus any transmission
losses resulting on the system of the CINergy Operating
Companies on account of the transaction, and plus any
regulatory commission charges and taxes incurred by PSI
on account of the transaction.
3.1.3 When Weekly Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party tothe
Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any week such Weekly Short-Term Power and Energy is
reserved, a demand charge rate per kilowatt to be agreed
upon by the Parties at the time such Weekly Short-Term
Power and Energy is reserved, at a rate of up to $0.29
per kilowatt reserved (such charge pertains to the
reservation of transmission). In the event the amount of
such Weekly Short-Term Power and Energy is reduced by
IPL, said demand charge shall be reduced by the sum of
(i) one-sixth (1/6) of the said agreed upon weekly rate
per kilowatt of the reduction for each day (other than
Sunday) during which such reduction is in effect, and
(ii) the reduction, if any, in the demand charge paid by
IPL to the Third Party;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions of the
CINergy Services, Inc., FERC Electric Tariff, Original
Volume No. 3, Non-Firm Transmission Service Standard
Tariff - NFT (or any successor transmission tariff of
similar service) must be obtained. In the event the
amount of such Weekly Short-Term Power and Energy is
reduced by PSI, said demand charge shall be reduced by
the sum of (i) one-sixth (1/6) of the said agreed upon
weekly rate per megawatt of the reduction for each day
(other than Sunday) during which such reduction is in
effect, and (ii) the reduction, if any, in the demand
charge paid by PSI to the Third Party;
(2) for each megawatt-hour purchased by PSI from a Third
Party to supply Weekly Short-Term Energy delivered during
such period, an energy charge of 100% of the Out-Of-
Pocket Cost paid therefor by PSI, plus $1.00 per
megawatt-hour (for difficult to quantify energy-related
costs), plus any transmission losses resulting on the
system of the CINergy Operating Companies on account of
the transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of the
transaction.
3.2 Daily Short-Term Power and Energy
3.2.1 Except as otherwise provided in Subsection 3.2.3 below, when
IPL is the supplying Party, PSI shall pay all of the following which
are applicable (the applicable demand charge rate per this Subsection
is limited by Subsection 3.5):
(a) for any day that Daily Short-Term Power and Energy is reserved,
a demand charge rate to be agreed upon by the Parties at the
time such Daily Short-Term Power and Energy is reserved, at a
rate of up to $0.778 per kilowatt reserved, except, for any day
during any part of which the amount of such Daily Short-Term
Power and Energy is reduced by IPL, the agreed upon demand
charge will only be paid for the power still available;
(b) for Daily Short-Term Energy delivered that is generated by IPL,
an energy charge of up to 110% of the Out-of-Pocket Cost (such
cost being as of the interconnection point or points, as
defined in Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such
energy to the interconnection point or points) of supplying
such energy;
(c) for Daily Short-Term Energy delivered that is purchased by IPL
from a Third Party, an energy charge of 100% of the Out-of-
Pocket Cost paid therefor by IPL, plus one (1) mill per
kilowatt-hour of such purchased energy (for difficult to
quantify energy-related costs), plus any transmission losses
resulting on IPL s system on account of the transaction, and
plus any taxes incurred by IPL on account of the transaction.
3.2.2 Except as otherwise provided in Subsection 3.2.3 below, when PSI is
the supplying Party, IPL shall pay all of the following which are applicable
(the applicable demand charge rates per this Subsection are limited by
Subsection 3.6):
(a) for any day that Daily Short-Term Power and Energy is reserved,
a demand charge rate to be agreed upon by the Parties at the
time such Daily Short-Term Power and Energy is reserved. Said
demand charge rate shall be at a rate of up to $797 per
megawatt reserved (such charge pertains to the production
component only), the total charge in any week shall be no more
than the product of $4,781 and the greatest number of megawatts
reserved in any day during said week, except for any day during
any part of which the amount of such Daily Short-Term Power and
Energy is reduced by PSI, the agreed upon demand charge will
only be paid for the power still available. Non-firm
transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume No. 3,
Non-Firm Point-to-Point Transmission Service Standard Tariff -
NFT (or any successor transmission tariff of similar service)
must be obtained;
(b) for Daily Short-Term Energy delivered that is generated by PSI,
an energy charge of up to 110% of the Out-of-Pocket Cost (such
cost being as of the interconnection point or points, as
defined in Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such
energy to the interconnection point or points) of supplying
such energy;
(c) for Daily Short-Term Energy delivered that is purchased by PSI
from a Third Party, an energy charge of 100% of the Out-of-
Pocket Cost paid therefor by PSI, plus $1.00 per megawatt-hour
of such purchased energy (for difficult to quantify energy-
related costs), plus any transmission losses resulting on the
system of the CINergy Operating Companies on account of the
transaction, and plus any regulatory commission charges and
taxes incurred by PSI on account of the transaction.
3.2.3 When Daily Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party to the
Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any day such Daily Short-Term Power and Energy is
reserved, a demand charge per kilowatt to be agreed upon by the
Parties at the time such Daily Short-Term Power and Energy is
reserved, at a rate of up to $0.058 per kilowatt reserved (such
charge pertains to the reservation of transmission). In the
event the amount of such Daily Short-Term Power and Energy is
reduced by IPL, said demand charge shall be reduced by the sum
of (i) one-sixteenth (1/16) of the said agreed upon daily rate
per kilowatt of the reduction for each hour in any day during
which such reduction is in effect, such reduction not to exceed
the agreed upon demand charge for such day, and (ii) the
reduction, if any, in the demand charge paid by IPL to the
Third Party;
(2) for each kilowatt-hour purchased by IPL from a Third Party
to supply Daily Short-Term Energy delivered during such period,
an energy charge of 100% of the Out-of-Pocket Cost paid
therefor by IPL, plus one (1) mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on IPL's system on account of the
transaction, and plus any taxes incurred by IPL on account of
the transaction;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions of the
CINergy Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service) must be
obtained. In the event the amount of such Daily Short-Term
Power and Energy is reduced by PSI, said demand charge shall be
reduced by the sum of (i) one-sixteenth (1/16) of the said
agreed upon daily rate per megawatt of the reduction for each
hour in any day during which any such reduction is in effect,
such reduction not to exceed the agreed upon demand charge for
such day, and (ii) the reduction, if any in the demand charge
paid by PSI to the Third Party;
(2) for each megawatt-hour purchased by PSI from a Third Party
to supply Daily Short-Term Energy delivered during such period,
an energy charge of 100% of the Out-of-Pocket Cost paid
therefor by PSI, plus $1.00 per megawatt-hour (for difficult to
quantify energy-related costs), plus any transmission losses
resulting on the system of the CINergy Operating Companies on
account of the transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of the transaction.
3.3 Notwithstanding the rates stated in the Subsections 3.1.1, 3.1.3, 3.2.1
and 3.2.3 above, when IPL is the supplying Party, the sum of the demand and
energy charges for each specific reservation made pursuant to Section 2 of
this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of kilowatts reserved for such
reservation times the maximum Weekly or Daily demand charge,
whichever is applicable, specified above in Subsections 3.1.1,
3.1.3, 3.2.1 and 3.2.3, as appropriate; and
(ii) the product of the number of kilowatt-hours supplied for
such reservation times 110% of the average cost per kilowatt-
hour of energy generated by IPL's Petersburg Unit No. 4 for the
last preceding month during which it was run; or
(2) be less than 110% of the total Out-Of-Pocket Cost of supplying
the Short Term Energy for such reservation.
3.4 Notwithstanding the rates stated in Subsections 3.1.2, 3.1.3, 3.2.2 and
3.2.3 above, when PSI and CINergy Services are the supplying Party, the sum
of the demand and energy charges for each specific reservation made pursuant
to Section 2 of this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of megawatts reserved for such
reservation times the maximum Weekly or Daily demand charge,
whichever is applicable, specified above in Subsections 3.1.2,
3.1.3, 3.2.2 and 3.2.3, as appropriate, and plus
(ii) the product of the number of megawatt-hours supplied for
such reservation times 110% of the average cost per megawatt-
hour of energy generated by the CINergy Operating Companies
Zimmer Unit No. 1 and Gibson Unit No. 5 for the preceding
month; nor
(2) be less than 100% of the Out-Of-Pocket Costs of supplying the
Short Term Energy for such reservation.
3.5 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Petersburg Unit No. 4, is limited to
515MW.
3.6 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge is
determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is limited to
925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net Demonstrated
Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated Capability of
313 MWs) on an hourly basis. For sales in excess of the power limitation
of 925 MWs noted above, the rate shall consist of an energy charge of up to
110% of Out-of-Pocket Cost and a demand charge of up to $1,252 per megawatt
per week or a demand charge of up to $209 per megawatt per day, the total
charge in any one week shall be no more than the product of $1,252 and the
greatest number of megawatts reserved in any hour during said week (such
charge pertains to the production component only). Non-firm transmission
service per the provisions of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of similar
service) must be obtained; but in no event shall the total revenue (energy
charge and demand charge combined) be less than 100% of the Out-of-Pocket
Costs of supplying the Short-Term Energy for such reservation.
Notwithstanding all previous Subsections, when power is sold under both this
Subsection and Subsection 3.1.2 in any week, the total demand charge will
be the weighted average demand charges in this Subsection and Subsection
3.1.2. Such weighting will be developed by adding the number of hours that
power was provided under this Subsection times the demand charge under this
Subsection and the number of hours that power was provided under Subsection
3.1.2 times the demand charge in Subsection 3.1.2, with such sum being
divided by the total number of hours in the week. Also, when power is sold
under both this Subsection and Subsection 3.2.2 in any day, the total demand
charge will be the weighted average demand charges in this Subsection and
Subsection 3.2.2. Such weighting will be developed by adding the number of
hours that power was provided under this Subsection times the demand charge
under this Subsection and the number of hours that power was provided under
Subsection 3.2.2 times the demand charge in Subsection 3.2.2, with such sum
being divided by the total number of hours in the day.
<PAGE>
EXHIBIT IV
(SECOND REVISION)
SERVICE SCHEDULE D
CARMEL SOUTHEAST TAP NETWORK POWER AND ENERGY TRANSFER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement") dated as of May 1,
1992 between Indianapolis Power & Light Company (hereinafter called "IPL")
and PSI Energy, Inc., formerly named Public Service Company of Indiana,
Inc., (hereinafter called "PSI") and CINergy Services, Inc. (hereinafter
called "CINergy Services"), shall become effective as of the earlier date
of either September 1, 1995 or the effective date of the Third Amendment,
dated June 30, 1995, and shall continue in effect through August 31, 1996,
unless extended as provided in Section 6 hereof. IPL, PSI and CINergy
Services are sometimes hereinafter referred to individually as "Party" or
collectively as "Parties" where appropriate.
SECTION 2 - FACILITIES TO BE PROVIDED
2.1 PSI shall provide, install, operate and maintain, at its own expense,
during the term of this Service Schedule D as defined in Section 6 hereof,
the following facilities:
(i) At its Carmel Southeast Substation - a 138,000 volt three-phase
interrupting device, a 24/40 MVA transformer, 12,470 volt metering
equipment, relaying, switching, a supervisory control remote terminal unit,
a communication circuit from the supervisory unit to IPL s Load Dispatch
Office and appurtenant equipment, all of which shall be subject to the prior
approval of IPL. PSI shall be responsible for installing, owning and
maintaining all necessary protection equipment required by IPL to protect
IPL s facilities associated with Carmel Tap. PSI s remote terminal unit
shall provide data acquisition, remote status and control of the load and
allow PSI to provide real time dispatch of their generation to their load
as well as load control while IPL will be provided real time breaker status
and load data.
(ii) A 138,000 volt transmission line extending from Carmel
Southeast Substation to Transmission Tower Number 7 (Map
Section 173A) on IPL's 138,000 volt North-River Road (132-57)
transmission line, together with a 138,000 volt tap at such
tower, to be known as the Carmel Tap Point.
2.2 IPL shall provide, install, operate and maintain, as direct assignment
facilities at the sole benefit and expense of PSI, during the term of the
Carmel Tap Point as defined in Section 6 hereof, a 138,000 volt two-way
switching point with supervisory controlled 138,000 volt line interrupting
disconnect switches and associated facilities such as a switch tower,
supervisory terminal unit and communication circuit at the Carmel Tap Point.
SECTION 3 - SERVICES TO BE RENDERED
3.1 The Parties hereto mutually agree that their respective radial
distribution systems will not be operated in parallel through the Carmel Tap
Point. Electric energy supplied by IPL to PSI at the Carmel Tap Point will
be treated as capacity and energy simultaneously transferred into IPL's
system by PSI through the other interconnection points of the Parties and
will be used only to supply the ultimate consumers of PSI who are or may be
served from PSI's Carmel Southeast Substation. Any capacity or energy
delivered by IPL to PSI through the Carmel Tap Point shall be simultaneously
supplied by PSI to IPL through any of the interconnection points of the
Parties. PSI s supplied energy shall include an adder of approximately 3%-
5% to the capacity and energy delivered to the Carmel Tap by IPL to
compensate IPL for capacity and energy losses occurring on IPL's system and
PSI s tapped transmission line and transformer bank (metered at secondary
voltage) due to the transfer of energy to the Carmel Tap Point.
3.2 IPL shall provide PSI with the following services:
1) Firm, network transmission service including a capacity
reservation (34,500 volt, 138,000 volt and above) of up to and
including 20 MW s (measured at the other IPL/PSI
interconnection points as defined in the 1992 Agreement). Said
service and reservation shall be planned for and provided on
the same basis as IPL s firm native load customers only during
the term of this service schedule as set forth in Section 6
herein of this Agreement.
2) Non-firm transmission service (34,500 volt, 138,000 volt and
above) up to and including 30 MW s (measured at the other
IPL/PSI interconnection points in the 1992 Agreement) in
addition to the firm transmission listed in Point 1 above.
Said non-firm service shall be on an as available,
interruptible basis when requested by PSI.
Upon IPL s request, PSI shall immediately curtail and/or interrupt its firm
load served by the 20 MW firm network transmission and reservation service
on the same basis as IPL s firm native load customers. If PSI's demand
exceeds their reservation (herein called "excess loading") PSI shall
demonstrate that all such demand exceeding their reservation is 1)
immediately interruptible by contract or 2) that such excess loading
occurred due to emergency switching lasting less than a total of two (2)
weeks within any six-month period. Otherwise such excess loading shall be
treated as having automatically increased PSI's reservation, for billing
purposes only, until IPL is satisfied PSI has taken actions to permanently
eliminate such excess loading. IPL shall coordinate non-emergency
maintenance outages with PSI and provide a minimum notification by 12:00
noon of the day before the scheduled outage.
3.3 IPL and PSI shall periodically conduct independent and/or joint studies
of their future systems to serve the Indianapolis northeast metropolitan
area. PSI shall annually update and provide IPL with their ten year demand
projections for the Carmel Tap Point. If such studies indicate problems due
to PSI's 20 MW reservation or projected increase in reservation, then IPL
and PSI shall jointly or independently, as soon as practicable, develop
plans and estimates of cost for the installation of any additional equipment
or facilities necessary to effect a long term solution to such problem so
that transmission services hereunder may be reliably continued in accordance
with IPL standards.
IPL's studies of this service cover the first five years and identified
facilities during that period which may need to be upgraded if area demand
grows faster than presently projected. If facility upgrades are required,
PSI shall pay annual carrying costs on a monthly basis during the time
period from the in-service date of the facilities until IPL's area load
increases by the amount of PSI s 20 MW reservation plus actual and projected
increases in reservation (herein called "period of advancement") after which
the remaining costs shall be rolled into IPL s rate analysis. Any time
PSI s reservation, as determined under 3.2 above, requires IPL to install
facilities in advance of its need, PSI shall pay annual carrying cost on
such facilities during the period of advancement. Increased reservations
beyond 20 MWs shall be treated as interruptible until all necessary
facilities to reliably accommodate these loads are placed in service. IPL
will not increase or upgrade the capacity of its existing or planned
transmission facilities in order to provide service under this Agreement if
doing so would unduly 1) impair IPL s system reliability or 2) jeopardize
the benefits of service or 3) increase the cost of service to IPL's Native
Load Customers and other customers to whom IPL has a pre-existing contractual
obligation.
In the event PSI does not elect to continue its reservation after the term
of this Service Schedule, PSI shall pay 1) the stranded cost of all IPL's
facilities directly assignable to providing firm service for PSI's
reservation and 2) the remaining annual cost on a monthly basis of all
system improvements from the termination date until IPL's area load increase
equals the amount of PSI's reservation. In the event IPL can obtain
regulatory approvals for facility modifications needed to increases PSI's
reservation, then firm service shall not be provided for the amount of the
increased service reservation.
3.4 PSI shall provide for ancillary services such as dynamic reactive
var/voltage support, all generation reserves, real time generation dispatch,
load following and dispatch control services needed to support the operation
of the Carmel Tap Point.
3.5 IPL shall file with the FERC an amendment to Service Schedule D for all
direct assignment facilities (not covered in Section 2.2) to be provided for
PSI by IPL under this Service Schedule and for all costs for advanced system
improvements during the "period of advancement" due to the PSI transmission
reservation provided under Service Schedule D. FERC s failure to accept the
cost assignments for either direct assignment facilities and/or advanced
system improvements due to the PSI network load service provided in this
Service Schedule D shall result in 1) IPL terminating its obligation to
provide and plan for PSI s transmission reservation as covered in Section
3.2 and Section 3.3 above or 2) PSI may elect to reduce the level and/or
firmness of PSI s transmission reservation so that additional direct
assignment facilities and/or system improvement facility advancements won t
be needed or 3) PSI may elect to terminate service provided hereunder
provided that upon termination of this Service Schedule D by PSI, PSI shall
remain responsible for paying IPL all costs remaining for all direct
assignment facilities provided by IPL and all remaining costs for all
advanced system improvements attributed to PSI during the period of
advancement where said facilities have been filed with and accepted by the
FERC including the direct assignment facilities provided initially under
Section 2.2. The stranded cost of the direct assignment facilities provided
under Section 2.2 shall be calculated and marked up for tax effects as shown
in Attachment 1 and shall be paid by PSI within 30 days of receipt of the
bill from IPL.
SECTION 4 - DEVIATIONS IN DELIVERIES AT CARMEL TAP POINT
4.1 The Parties agree that with respect to the Carmel Tap Point, PSI shall
simultaneously supply (including adjustments for losses) to IPL from PSI s
other interconnection points with IPL the capacity and energy delivered to
PSI by IPL. The Parties recognize, however, that despite their best efforts
to simultaneously supply and deliver capacity and energy (including
adjustments for losses) deviations between actual and scheduled energy
transfers may occur. Electric energy resulting from such deviations shall,
at the option of IPL, be settled for either by return of equivalent energy
or by payment of Out-Of-Pocket Costs. If equivalent energy is returned, it
shall be returned at times when the generating costs of IPL are equivalent
to the generating costs of IPL at the time of the deviations or, if IPL
elects to have equivalent energy returned under different conditions, it
shall be returned in such amounts, to be mutually agreed upon, as will
compensate IPL for the difference in conditions.
IPL, at its option, may elect to bill for such Out-Of-Pocket Costs, plus ten
percent of such cost, for any energy supplied over and above that scheduled
by PSI for any hour or hours during the billing period. Such costs shall
be determined at the Carmel Tap Point by taking into account electrical
losses incurred from the source or sources of such energy to said Tap Point.
4.2 If IPL elects to bill for any energy supplied over and above that
scheduled by PSI for any hour or hours during the billing period where the
energy was supplied by a Third Party then in accordance with the FERC Order
84 the maximum amount to be billed by IPL to PSI shall be 100% of the Third
Party demand and energy charge plus 1 mill/kwhr (the 1 mill/kwhr adder is
applicable only to transactions with a duration of less than one year) plus
IPL's network transmission rate as accepted by the FERC under this Service
Schedule D.
SECTION 5 - COMPENSATION
5.1 FIRM SERVICE - Electric power measured in kilowatts supplied by PSI and
delivered at the Carmel Tap Point under the 1992 Agreement by IPL to PSI
shall be billed on a monthly basis the annual cost of IPL's transmission
system multiplied by the ratio of the sum of PSI s twelve 20 MW reservations
divided by IPL s annual system peak demand which equals $283,200 annually
as calculated in the cost support Appendix A. The loss factors consisting
of a 3-5% adder, as noted in Section 3.1 hereof, shall include PSI's radial
transmission line and transformer bank associated with the Carmel Tap Point
and IPL s 34,500 volt and above transmission system. The loss factors shall
include PSI s radial transmission line and transformer bank associated with
the Carmel Tap Point and IPL s transmission system. The loss factors shall
be determined by the annual transmission system loss studies performed by
IPL and PSI. Also, increases in PSI s reservation shall be billed by using
the same methodology.
5.2 NON-FIRM SERVICE - Electric power measured in kilowatts supplied by PSI
and delivered at the Carmel Tap Point under the 1992 Agreement by IPL to PSI
shall be billed at $1.18 per kilowatt-month plus $0.01 per kilowatt-month
for IPL dispatch control. This demand charge for non-firm service applies
to usage above PSI s firm service reservation and shall be based upon the
difference in maximum hourly demand in kilowatts measured and the amount of
PSI's reservation in the calendar month of billing. The loss factors
consisting of a 3-5% adder, as noted in Section 3.1 hereof, shall include
PSI s radial transmission line and transformer bank associated with the
Carmel Tap Point and IPL s 34,500 volt and above transmission system. The
loss factors shall be determined by the annual transmission system loss
studies performed by IPL and PSI.
5.3 DIRECT ASSIGNMENT FACILITIES - PSI shall pay IPL on a monthly basis
IPL's annual charges on the total installed cost of the facilities provided
in Section 2.2 above multiplied by IPL's annual carrying charges as
calculated in Attachment 1 and revisions will be filed with the FERC.
SECTION 6 - TERM OF AGREEMENT
6.1 This Service Schedule shall terminate August 31, 1996 unless PSI
notifies IPL at least six (6) months prior to such termination date that it
desires to continue service to the Carmel Tap Point; provided however, that
any continued service is subject to such terms and conditions as are
mutually agreed to by the Parties.
<PAGE>
THIRD AMENDMENT
to the
INTERCONNECTION AGREEMENT
,dated May 1, 1992,
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
_____________________________________
Dated June 30, 1995
INDIANAPOLIS POWER & LIGHT COMPANY
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 23
PSI ENERGY, INC.
FEDERAL ENERGY REGULATORY COMMISSION
Rate Schedule FERC No. 247
THIRD AMENDMENT
to the
INTERCONNECTION AGREEMENT
among
INDIANAPOLIS POWER & LIGHT COMPANY
and
PSI ENERGY, INC.
AND CINERGY SERVICES, INC.
0.01 THIS THIRD AMENDMENT, dated on the 30th day of June 1995,
among INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter referred to as
"IPL"), a corporation organized and existing under the laws of the State
of Indiana and PSI ENERGY, INC. (hereinafter referred to as "PSI"), a
corporation organized and existing under the laws of the State of
Indiana, and CINERGY SERVICES, INC. (hereinafter referred to as "CINergy
Services"), a corporation organized and existing under the laws of the
State of Delaware. IPL, PSI and CINergy Services are sometimes
hereinafter referred to individually as "Party" and collectively as
"Parties" where appropriate.
W I T N E S S E T H:
0.02 WHEREAS, There is now in force and effect between IPL and PSI
an Interconnection Agreement, dated as of May 1, 1992, (said
Interconnection Agreement being the Ninth Supplement to the 1962
Interconnection Agreement between IPL and PSI, herein called the "1992
Agreement"); and
0.03 WHEREAS, The Cincinnati Gas & Electric Company ("CG&E") and
PSI merged on October 24, 1994, and formed CINergy Corp. with CG&E and
PSI now being called the "CINergy Operating Companies"; and
0.04 WHEREAS, CG&E, PSI and CINergy Services are parties to a
Service Agreement, dated March 2, 1994, which has been approved by the
Securities and Exchange Commission and the Indiana Utility Regulatory
Commission (IURC), under which CINergy Services will act as PSI s agent
in administering PSI s interconnection agreements and the three companies
are also parties to an Operating Agreement, dated March 2, 1994, on file
with and accepted by the FERC and approved by the IURC under which
CINergy Services will dispatch the generating units of CG&E, PSI and
CINergy Services; and
0.05 WHEREAS, the Parties desire to modify the 1992 Agreement, as
hereinafter set forth; and
0.06 NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements of the Parties, as herein set forth, the Parties
hereby agree as follows:
SECTION 1 Section 2.04 of the 1992 Agreement shall be amended by
deleting the current language in its entirety and inserting in lieu
thereof replacement language, thereby amending Section 2.04 to read as
follows:
"2.04. Out-Of-Pocket Costs. The term "Out-of-Pocket Cost"
of energy from generating units on the system of a Party shall
consist of any costs that are directly incurred by IPL or PSI by
reason of its generation of such energy and which otherwise would
not have been incurred by such system including, but not limited
to, fuel, labor, operation, maintenance, start-up, fuel handling,
taxes, regulatory commission charges, and emission allowances.
"Out-of-Pocket Cost" of energy purchased from a third party by the
supplying Party shall consist of the total amount paid therefore by
the supplying Party which otherwise would not have been paid by
such Party, plus any cost which otherwise would not have been
incurred, including, but not limited to, regulatory commission
charges, emission allowances, transmission losses and taxes related
to such transaction.
Tax expenses will be the expenses that are incurred as taxes either
in connection with the sale or production of such energy."
SECTION 2 Section 2.05 of the 1992 Agreement shall be amended by
deleting the current language in its entirety and inserting in lieu
thereof replacement language, thereby amending Section 2.05 to read as
follows:
"2.05. Emission Allowances. The federal Clean Air Act, as
amended, 42 U.S.C. Section 7401 et seq. (hereinafter referred to as
"Clean Air Act"), establishes certain annual maximum sulfur dioxide
("SO2") levels, stated in terms of required emission allowances,
for flue gases emitted by electric generating units, including
units operated by IPL, PSI and other electric utilities who may
supply electric energy for transactions under this 1992 Agreement.
The generator of the electric energy supplied and delivered under
this 1992 Agreement is required by the Clean Air Act to have
adequate "allowances" (as defined by Section 402(3) of the Clean
Air Act in conjunction with Section 403(f) of the Clean Air Act) in
order to generate such electric energy. To the extent that either
IPL or PSI are required by the Clean Air Act to have additional
allowances by reason of its generation of electric energy to be
supplied by it under this 1992 Agreement, which allowances would
otherwise not have been required by such supplying Party, then,
unless the supplying Party otherwise agrees in advance in writing,
at the discretion of the supplying Party, the Party receiving such
energy shall be responsible for the cost or the actual furnishing
(without cost to the supplying Party) of adequate allowances to the
supplying Party in order for such Party to supply such energy under
this Agreement. The Parties shall establish, by mutual agreement,
appropriate procedures in order to carry out the provisions of this
Section 2.05, including a statement of costs before any
transactions under the Service Schedules attached hereto are
started. Also, prior to implementation of every transaction under
the Service Schedules attached hereto, the purchasing Party must
declare whether they will pay in cash or return SO2 Allowances in-
kind for any consumption of SO2 Allowances directly attributed to
such transaction, if any.
It shall be the responsibility of the supplying Party to provide
the receiving Party, before the transaction begins, with a
statement of the estimated emission allowance charges associated
with the transaction which the supplying Party is seeking to add to
the rates to be charged under the applicable Service Schedule.
Failure of the supplying Party to provide a statement of such
charges before the transaction begins shall constitute a waiver of
the recovery of any such costs. In establishing such procedures,
the Parties shall recognize that the determination of the
additional allowances required in order to generate the electric
energy to be supplied hereunder is subject to variables contingent
upon the loading and operating conditions on the system where the
actual generation occurs.
The procedures so established by the Parties shall be in accord with
sound engineering principles of power plant and system operation, and
shall require the furnishing of such additional allowances at such times
and in such amounts as will be equitable to the supplying Party.
When IPL is the supplier of energy and emission allowances, the
recovery of the applicable costs for the actual furnishing of
adequate allowances in order for IPL to generate and supply such
energy will be implemented in the following manner:
(1) The Buyer shall compensate IPL for the
consumption of Sulfur Dioxide Emissions
Allowances ("SO2 Allowances") directly attributed
to electric energy sales by IPL to Buyer under
the Service Schedules. Such compensation shall,
at Buyer s option, be made by either supplying
IPL with the number of SO2 Allowances directly
attributed to such energy sales, or by
reimbursing IPL for the incremental cost of such
number of SO2 Allowances, rounded to the nearest
whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2
Allowances associated with Buyer s energy
purchases for the month, the cash amount due at
billing will be determined by multiplying the
number of SO2 Allowances attributed to the sale
by the incremental cost of the SO2 Allowances, as
determined in Subsection 2(b) of this Section
2.05, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances,
Buyer will record or transfer to IPL s account,
the number of SO2 Allowances calculated below, at
the time cash settlement for the energy is due.
In all cases, Buyer will transfer to IPL s
account the number of SO2 Allowances due IPL for
calendar year no later than January 15 of the
following year. "Transfer to IPL s account"
shall mean, for purposes of the Amendment, the
transfer by the USEPA of the requisite number of
SO2 Allowances to IPL s Allowance Tracking System
account and the receipt by IPL of the Allowance
Transfer Confirmation.
(2) Determination of SO2 Emission Allowances Due IPL
(a) Number of SO2 Allowances
The number of SO2 Allowances directly attributed
to an energy sale made by IPL shall be determined
for each hour, by determining the contribution
from each of the unit(s) from which the energy
sale is being made for that hour. For each unit,
the emission rate in pounds of SO2 per million
Btu will be determined each month, from fuel
sulfur content, control equipment performance,
and continuous emissions monitoring data. The
emission rate and the unit heat rate will be used
to determine the SO2 Allowances used per
megawatt-hour ("MWH"). The energy from each unit
attributable to the sale, and the SO2 Allowances
per MWH for each unit, will be used to determine
the number of SO2 Allowances attributable to the
sale.
(b) Cost of SO2 Allowances
The incremental SO2 Allowance cost used to
determine economic dispatch of IPL s generating
units in any month, will also be the basis used
to determine compensation for IPL s energy sales.
The incremental SO2 Allowances cost, in dollars
per ton of SO2, shall be determined each month
and will be based on the Cantor Fitzgerald offer
price for SO2 Allowances, or if such is not
available, then another nationally recognized SO2
Allowance trading market price or market price
index, at the beginning of the month. The SO2
Allowance value may be changed at any time during
the month to reflect the more current incremental
cost, or market price, for SO2 Allowances. Buyer
will be notified of the new SO2 Allowance value
prior to dispatch of IPL energy to Buyer.
When PSI is the supplier of energy and emission allowances, the
recovery of the applicable costs for the actual furnishing of
adequate allowances in order for PSI to generate and supply such
energy will be implemented in the following manner:
(1) The current Environmental Protection Agency
("EPA") auction price to value emission
allowances will be used for energy sales
transactions. The dispatch criteria may be
revised from time to time if the emission
allowance purchases on the average are determined
to be significantly different than the EPA
auction price.
(2) For each hour in which there is a transaction for
energy services using an Out-of-Pocket Cost rate under
this 1992 Agreement, PSI will:
(a) identify the generation sources used to provide
the transaction s energy by identifying the
energy that would not have been used had the
transaction not been in effect that hour by using
the same after-the-fact incrementing costing
model that is used to calculate the incremental
cost of fuel under this 1992 Agreement;
(b) determine, using the following formula, the
quantity of emission allowances related to the
energy transaction: (i) by calculating an
incremental heat rate for the appropriate
generating unit and the corresponding incremental
SO2 emission levels, as determined by the
computer based tools, for the identified units
dispatched to serve the transaction; (ii)
applying the following formula for each such
unit; (iii) adding together the total number of
tons of SO2 produced per million BTU (i.e.,
British Thermal Unit) of fuel burned by each such
unit for the transaction; and (iv) letting one
(1) emission allowance equal one (1) ton of SO2
so produced.
# OF UNITS
The sum of [MBTU SALE - MBTU NO SALE] * [SO2] * [100%-SE]
100%
MBTU SALE = Million BTU consumed on unit n with sale.
MBTU NO SALE = Million BTU consumed on unit n without
sale.
SO2 = Tons of SO2 produced per million BTU of fuel
burned.
SE = Scrubber Efficiency in %.
PSI will perform periodic tests to maintain the
accuracy and validity of such emission rate
information. Because some generating sources may
not be subject to the Clean Air Act during Phase
I or Phase II thereunder, there will be no
emission allowance charges included for the
utilization of such an energy source while it is
not subject to such requirements. One (1)
emission allowance shall be assigned to each ton
of SO2 emitted to serve the transaction.
Fractions of emission allowance tons will be
rounded up to the next whole number when the
fraction is equal to or greater than .5 and
rounded down when the fraction is less than .5.
(3) The purchasing Party of energy shall have the option of
purchasing or providing emission allowances for each
transaction. The purchasing Party shall notify PSI of
its election to purchase or provide emission allowances
prior to the start of the transaction. The running
quantity of emission allowances charged or furnished
will be shown on the monthly invoices to the purchasing
Party.
(4) When the purchasing Party of energy elects to purchase
the emission allowances from PSI, then the quantity of
emission allowances used will be included as part of
the charges on the monthly invoices to the purchasing
Party.
(5) By January 15th of the year following the calendar year
in which the transaction occurred, the purchasing Party
of energy shall transfer the appropriate emission
allowances to PSI for the emission allowances used when
the allowances are provided in kind.
(6) PSI has adopted the same incremental cost calculation
to value emission allowances for dispatch criteria as
for billing energy transactions."
SECTION 3 A new Article 18 is hereby inserted in the 1992
Agreement as follows:
"ARTICLE 18
AGENCY OF CINERGY SERVICES, INC.
18.01. CINergy Services joins in the execution of this
Agreement for the sole purpose of serving and acting as agent for
PSI."
SECTION 4 The following Service Schedules, attached to and made a
part of the 1992 Agreement and designated as Exhibits I, II and III, are
hereby cancelled and terminated:
Description Exhibit
A: Emergency Service I
B: Interchange Energy II
C: Short Term Power and Energy III
SECTION 5 The following Service Schedules, attached hereto and
designated as Appendices I, II and III to this Third Amendment, are
hereby made a part of the 1992 Agreement:
Exhibit
Description (First Revision)
A: Emergency Service I
B: Interchange Energy II
C: Short Term Power and Energy III
SECTION 6 Service Schedule D - Carmel Southeast Tap Network Power
and Energy Transfer, which is presently Exhibit IV (First Revision) to
the 1992 Agreement, is hereby replaced in its entirety by a new Exhibit
IV (Second Revision) which is attached hereto and designated as Appendix
IV to this Third Amendment.
SECTION 7 The Emission Allowance guidelines filed by the Parties
with the FERC in Docket No. PL95-1-000 (IPL - Second Amendment and PSI -
Appendix EA) are hereby cancelled and withdrawn with respect to the
Parties. The guidelines are replaced with the new language contained in
Section 2.05 of the 1992 Agreement.
SECTION 8 The Third Amendment shall be effective from the time it
is accepted for filing by the Federal Energy Regulatory Commission, or as
otherwise specified by such Commission in accordance with its Rules and
Regulations, to the expiration date of the 1992 Amendment.
SECTION 9 Except as hereinabove modified and amended, all of the
terms and conditions of the 1992 Agreement shall remain in full force and
effect.
SECTION 10 This Third Amendment shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective Parties
hereto.
IN WITNESS WHEREOF, the Parties have caused this Third Amendment to
be executed by their duly authorized officers and attested (as
necessary), as of the date first above mentioned.
INDIANAPOLIS POWER & LIGHT CINERGY SERVICES, INC.
(IPL) (CINergy Services)
By: /s/ John R. Brehm By: /s/ Terry E. Bruck
John R. Brehm Terry E. Bruck
Senior Vice President Group Vice President
Finance and
Information Services
Attest: PSI ENERGY, INC.
(PSI)
By: /s/ Bryan G. Tabler By: /s/ John M. Mutz
Bryan G. Tabler John M. Mutz
Senior Vice President President
Secretary and
General Counsel
<PAGE>
EXHIBIT I
(First Revision)
SERVICE SCHEDULE A
EMERGENCY SERVICE
SECTION 1 - DURATION
1.1 This Service Schedule A, being a part of and under the
Interconnection Agreement (referred to herein as the "1992 Agreement"),
dated as of May 1, 1992, among Indianapolis Power & Light Company
(hereinafter called "IPL") and PSI Energy, Inc., formerly named Public
Service Company of Indiana, Inc. (hereinafter called "PSI") and CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall become
effective as of the effective date of the Third Amendment, dated June 30,
1995, to the 1992 Agreement and shall continue in effect throughout the
duration of the 1992 Agreement. IPL, PSI and CINergy Services are
sometimes hereinafter referred to individually as "Party" or collectively
as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Conditional Service. Subject to the provisions of Subsection 2.2 of
this Section 2, in the event of a breakdown or other emergency in or on
the system of any Party involving either sources of power or transmission
facilities, or both, impairing or jeopardizing the ability of the Party
suffering the emergency to meet the loads of its system, another Party
shall deliver to such Party electric energy that it is requested to
deliver; provided, however, that a Party shall not be obligated to
deliver such energy which, in its sole judgment, it cannot deliver
without interposing a hazard to or economic burden upon its operations or
without impairing or jeopardizing the other load requirements of its
system and provided further, that a Party shall be obligated to deliver
electric energy to another Party for a period in excess of forty-eight
(48) consecutive hours during any single emergency.
2.2 Non-performance. The Parties recognize that the delivery of
electric energy as provided in Subsection 2.1 of this Section 2 is
subject to two conditions which may preclude the delivery of such energy
as so provided: (a) the Party requested to deliver electric energy may
be suffering an emergency in or on its own system as described in said
Subsection 2.1, or (b) the system of a Party may be delivering electric
energy, under a mutual emergency interchange agreement, to the system of
another interconnected company which is suffering any emergency in or on
its system. Under conditions as cited under (a) above, a Party shall not
be considered to be in default hereunder if it is unable to comply with
the provisions of said Subsection 2.1. Under conditions as cited under
(b) above, a Party shall not be considered to be in default hereunder if
it is unable to comply with the provisions of said Subsection 2.1;
provided, however, that such Party shall make every effort consistent
with the terms of its contract with said other interconnected company to
make the electric energy as provided in Subsection 2.1 available to
another Party hereto as soon as possible.
2.3 Reserve Generating Capacity Review. If at any time the record over
a reasonable prior period shows clearly that one of the Parties has
failed to deliver energy in accordance with and subject to the provisions
of Subsection 2.1 and Subsection 2.2 of this Section 2, a Party, by
written notice given to another Party, may call for a joint study by the
Parties of the reserve generating capacity in and provided for their
respective systems and of their respective system transmission facilities
affecting the supply and delivery of power and energy under the 1992
Agreement. It shall be the purpose of such study to determine the
adequacy or inadequacy of reserve generating capacity and transmission
facilities being provided to meet the requirements of the Parties
respective systems, reflecting obligations under the 1992 Agreement, and,
if inadequate, the extent of the burden that a Party may be placing upon
another Party. If it should be found that a Party is placing an
unreasonable burden upon another Party, the Party causing such burden
shall take such measures as are necessary to remove the burden from
another Party, or the Parties shall enter into such arrangements as shall
provide for equitable compensation to the Party being burdened.
SECTION 3 - COMPENSATION
3.1 When IPL is the Supplying Party:
3.11 Emergency Energy delivered that is generated by IPL shall be
settled for, at the option of IPL, either by the return of
equivalent energy at a mutually acceptable time upon request of IPL
or by payment of the greater of (a) 110% of the Out-Of-Pocket Cost
(such cost being as of the delivery point or points, as referred to
in Section 4.01 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such
energy to the delivery point or points) of supplying such energy,
or (b) $0.10 per kilowatt-hour.
3.12 Emergency Energy delivered that is purchased by IPL from a
third party shall be settled for by payment of an energy charge of
100% of the Out-Of-Pocket Cost paid therefor by IPL, plus an amount
to be agreed upon by the Parties at the time of the transactions of
up to 4.6 mills per kilowatt-hour (consisting of up to 3.6 mills
per kilowatt-hour for bulk transmission charge plus 1 mill per
kilowatt-hour for difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL's system on account of the
transaction, and plus any taxes incurred by IPL on account of the
transaction.
3.2 When PSI is the Supplying Party:
3.21 Emergency Energy delivered that is generated by PSI shall be
settled for by payment of the greater of (a) 110% of the Out-Of-
Pocket Cost (such cost being as of the interconnection point or
points, as referred to in Section 4.01 or the 1992 Agreement,
taking into account electrical losses incurred from the source or
sources of such energy to the interconnection point or points) of
supplying such energy. Non-firm transmission service per the
provisions of the CINergy Services, Inc., FERC Electric Tariff,
Original Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of
similar service) must be obtained, or (b) $100 per megawatt-hour.
3.22 Emergency Energy delivered that is purchased by PSI from a
third party shall be settled for by payment of the greater of (a)
of an energy charge of 100% of the Out-Of-Pocket Cost paid therefor
by PSI plus $1.00 per megawatt-hour (for difficult to quantify
energy-related costs), plus any transmission losses resulting on
the system of the CINergy Operating Companies on account of the
transaction. Non-firm transmission service per the provisions of
the CINergy Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Point-to-Point Transmission Service Standard Tariff
- NFT (or any successor transmission tariff of similar service)
must be obtained, and plus any regulatory commission charges and
taxes incurred by PSI on account of the transaction, or (b) $100
per megawatt-hour.
3.3 If the option of returning electric energy under Subsection 3.11 is
exercised, then it shall be returned at times when the load conditions of
the Party receiving it are equivalent to the load conditions of such
Party at the time the energy for which it is returned was delivered or,
if such Party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon by
the Operating Committee under the Agreement, as will compensate the Party
for the difference in conditions.
<PAGE>
EXHIBIT II
(First Revision)
SERVICE SCHEDULE B
INTERCHANGE ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule B, being a part of and under the
Interconnection Agreement (referred to herein as the "1992 Agreement"),
dated as of May 1, 1992, among Indianapolis Power & Light Company
(hereinafter called "IPL") and PSI Energy, Inc., formerly named Public
Service Company of Indiana, Inc. (hereinafter called "PSI") and CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall become
effective as of the effective date of the Third Amendment, dated June 30,
1995 to the 1992 Agreement and shall continue in effect throughout the
duration of the 1992 Agreement. IPL, PSI and CINergy Services are
sometimes hereinafter referred to individually as "Party" or collectively
as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 It is recognized that from time to time that any of the Parties may
have electric energy (herein called "Economy Energy") available from
surplus capacity either on its own system or from sources outside its own
system, or both, and that Economy Energy could be supplied to another
Party at a cost that would result in operating savings to such another
Party. Such operating savings would result from the displacement of
electric energy that otherwise would be supplied from capacity either on
such other Party's system or from sources outside its own system, or
both. To promote the economy of electric power supply and to achieve
efficient utilization of production capacity, any Party, whenever it in
its sole judgment determines Economy Energy is available, may, but shall
not be obligated to, offer Economy Energy to another Party. Promptly
upon receipt of any such offer said Party shall notify the offering Party
of the extent to which it desires to use such Economy Energy, and
schedules providing the periods and extent of use shall be mutually
agreed upon by the Parties. Such energy is non-firm and may be withdrawn
by the supplying Party with a ten (10) minute notification. A
transaction made by PSI and CINergy Services under this Service Schedule
B shall not extend beyond twelve (12) months.
Non-Displacement Energy
2.2 It is further recognized that from time to time occasions will arise
when the effecting of transactions, as provided in Subsection 2.1 of this
Section 2, will be impracticable, but at the same time one of the Parties
may have electric energy (herein called "Non-Displacement Energy") which
it is willing to make available from surplus capacity either on its own
system or from sources outside its own system, or both, that can be
utilized advantageously for short intervals by another Party. It shall
be the responsibility of the Party desiring the receipt of Non-
Displacement Energy to initiate the receipt and delivery of such energy.
Any Party desiring such receipt of energy shall inform another Party of
the extent to which it desires to use Non-Displacement Energy, and
whenever in its sole judgment such another Party determines that it has
Non-Displacement Energy available, schedules providing the periods and
extent of use shall be mutually agreed upon by the Parties. Any Party
shall not be obligated to make any Non-Displacement Energy available to
another Party.
2.3 PSI may reduce or discontinue the supply of Hourly Non-Displacement
Energy at any time. To the extent possible, however, PSI shall advise
IPL of its intention to reduce materially or discontinue the supply of
Hourly Non-Displacement Energy.
2.4 PSI shall supply Daily and Weekly Non-Displacement Energy for three
(3) hours after they have notified IPL of its intention to discontinue
such supply of energy; however, PSI shall be under no obligation to
continue the supply of said energy for more than three (3) hours after
said notification.
2.5 A transaction made by PSI under Subsection 2.2 above shall not
extend beyond twelve (12) months.
SECTION 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by a Party from another
Party shall be based on the principle that the Party purchasing it shall
pay the Out-Of-Pocket Cost (including all operating, maintenance, tax,
regulatory commission charges, transmission losses and other expenses
incurred that would not have been incurred if the energy had not been
supplied) being at the interconnection points (as defined in Article 4 of
the 1992 Agreement), of the Party supplying such energy and that the
resulting savings to the receiving Party shall be equally shared by the
supplying and receiving Parties. Prior to any transaction involving the
delivery and receipt of Economy Energy, authorized representatives of the
Parties shall determine and agree upon the compensation applicable to
such transaction. Compensation so agreed upon shall not be subject to
later review or adjustment. PSI shall dedicate an amount at the time of
the transactions for non-firm transmission service per the provisions of
the CINergy Services, Inc., FERC Electric Tariff, Original Volume No. 3,
Non-Firm Point-to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service) from its portion of
the resulting savings.
3.2 When Economy Energy is obtained from or delivered to other systems
interconnected with the Parties, but not signatories to the 1992
Agreement, payments shall be based on the Out-Of-Pocket Cost of the
supplying Party or system providing the energy and an allocation of the
gross savings which are defined as the difference between (1) what such
Out-Of-Pocket Costs of the receiving Party or system would have been to
generate such energy, and (2) such Out-Of-Pocket Costs of the supplying
Party or system providing the energy. Such allocation shall be made as
provided in Subsections 3.21 and 3.22 hereinbelow:
3.21 The transmitting Party shall be paid (a) its costs of
purchasing the energy supplied, plus (b) its costs of additional
transmission losses plus (c) the following:
(1) When IPL is such transmitting Party: Fifteen percent
(15%) of the gross savings remaining after deducting
all such payments for transmission losses.
(2) When PSI is the transmitting Party, they shall receive
the greater of (a) 15% (such charge pertains to the
reservation of transmission) of the gross savings
remaining after deducting all such payments for
transmission losses or (b) the sum of a demand charge
rate per megawatt reserved per hour at the time such
Economy Energy is reserved for non-firm transmission
service per the provisions of the CINergy Services,
Inc., FERC Electric Tariff, Original Volume No. 3, Non-
Firm Point-to-Point Transmission Service Standard
Tariff - NFT (or any successor transmission tariff of
similar service), plus $1.00 per megawatt-hour (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on the system of the
CINergy Operating Companies on account of the
transaction and plus any regulatory commission charges
and taxes incurred by PSI on account of the
transaction.
3.22 The supplying Party or system shall be paid its Out-Of-Pocket
Cost of providing the energy, plus one-half of the gross savings
remaining after deducting all (b) and (c) payments made under
Subsection 3.21. The receiving Party or system shall be entitled
to the other one-half of the gross savings remaining after
deducting all (b) and (c) payments made under Subsection 3.21.
Non-Displacement Energy
3.3 Non-Displacement Energy delivered hereunder shall be settled for
either by the return of equivalent energy (only in the case where IPL is
the supplying Party) or, at the option of the Party that supplied such
energy, by payment of an energy charge of up to 110% of the Out-Of-Pocket
Cost (such cost being as of the delivery point or points, as provided in
Section 4.01 of Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources of such energy to
said delivery point or points) to the supplying Party generating such
energy plus (the applicable demand charge rates per this Subsection are
limited by Subsections 3.7 and 3.8):
3.31 When IPL is the supplying Party:
3.31.1 IPL, at its option, may impose a demand charge of up
to 48.6 mills per kilowatt reserved per hour, but the total
demand charge in any one day shall be no more than the
product of $0.778 times the highest amount in kilowatts
reserved in any hour during the day. Or,
3.31.2 IPL, at its option, may choose to supply such energy
without imposing a demand charge in which case no additional
payment is included. However, if this option is chosen, the
cost of such energy will be calculated as 110% of the actual
Out-Of-Pocket Cost (such cost being as of the delivery point
or points, as provided in Section 4.01 of Article 4 of the
1992 Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said
delivery point or points) to the supplying Party generating
such energy.
3.32 When PSI is the supplying Party by payment of the following:
(1) For energy generated, the agreed upon demand charge rate
of up to $50 per megawatt-hour (such charge pertains to
the production component only), the total demand charge
in any one day shall be no more than the product of
$797 and the greatest amount of megawatts reserved in
any hour during said day and the total charge in any
one week shall be no more than the product of $4,781
and the greatest number of megawatts reserved in any
hour during said week. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC
Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service)
must be obtained;
(2) For daily energy which is purchased by PSI from a third
party for economic reasons to meet system needs but in
subsequent system resources accounting calculations is
determined to have been used to supply a Daily Non-
Displacement Energy transaction and for which PSI
stands by to supply from its own resources: (a) the
amount paid by PSI to the third party for such energy,
plus (b) the cost of transmission losses, regulatory
commission charges and taxes incurred which would not
otherwise have been incurred, plus (c) $1.00 per
megawatt-hour for difficult-to-quantify energy related
costs, and, plus (d) up to $50 per megawatt-hour (such
charge pertains to the production component only), the
total charge in any one day shall be no more than the
product of $797 and the greatest number of megawatts
reserved in any hour during said day and the total
charge in any one week shall be no more than the
product of $4,781 and the greatest number of megawatts
reserved in any hour during said week. Non-firm
transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission
tariff of similar service) must be obtained.
3.33 If equivalent energy is returned to IPL, it shall be returned
at times when the load conditions of the Party receiving it are
equivalent to the load conditions of such Party at the time the
energy for which it is returned was delivered or, if such Party
elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon
by the Operating Committee, as will compensate for the difference
in conditions.
3.4 Non-Displacement Energy delivered under Subsection 2.2 above that is
purchased by the supplying Party from another interconnected system which
is not a signatory to the 1992 Agreement ("Third Party") at the request
of the receiving Party shall be settled for as follows:
3.41 When IPL is the supplying Party, by a payment of 100 percent
of the amount paid to such Third Party, plus a demand charge in an
amount to be agreed upon by the Parties at the time of the
reservation of up to 3.6 mills per kilowatt reserved per hour, but
the total demand charge in any one day shall be no more than the
product of $0.058 times the highest amount in kilowatts reserved in
any hour during the day, plus 1 mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus the cost of any
quantifiable transmission losses, taxes, and other expenses
incurred that would not have been incurred if such transaction had
not been made.
3.42 When PSI is the supplying Party: by (a) non-firm
transmission service per the provisions of the CINergy Services,
Inc., FERC Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or any
successor transmission tariff of similar service) must be obtained
and (b) an energy charge of 100% of the Out-of-Pocket Cost paid
therefor by PSI, plus $1.00 per megawatt-hour (for difficult to
quantify energy-related costs), plus any transmission losses
resulting on the system of the CINergy Operating Companies on
account of the transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of the transaction.
3.5 Notwithstanding the rates stated in Subsection 3.3 above, when IPL
is the supplying Party, if the "demand charge" option of Section 3.31.1
is chosen, the sum of the demand and energy charges for each specific
reservation made pursuant to Section 2.2 of this Service Schedule B which
includes a demand charge shall not:
(1) exceed the total of:
(i) The product of the number of kilowatts reserved for
such reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and
(ii) The product of the number of kilowatt-hours sup-plied
for such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg
Unit No. 4 for the last preceding month during which it
was run; or
(2) be less than 100% of the total Out-Of-Pocket Cost of
supplying the Non-Displacement Energy for such reservation.
3.6 Notwithstanding the rates stated in Subsection 3.3 above, when PSI
and CINergy Services are the supplying Party, the sum of the demand and
energy charges for each specific reservation made pursuant to Section 2.2
of this Service Schedule B shall not:
(1) exceed the total of:
(i) The product of the number of megawatts reserved for
such reservation times the maximum hourly demand charge
specified above in Subsection 3.3; and plus
(ii) The product of the number of megawatt-hours supplied
for such reservation times 110% of the average cost per
megawatt-hour of energy generated by the CINergy
Operating Companies Zimmer Unit No. 1 and Gibson Unit
No. 5 for the preceding month; nor
(2) be less than 100% of the total Out-Of-Pocket Cost of
supplying the Non-Displacement Energy for such reservation.
3.7 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL
Agreements, for which the rates charged have been supported on the basis
that total revenues will not exceed the costs of Petersburg Unit No. 4,
is limited to 515 MW.
3.8 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge
is determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is
limited to 925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net
Demonstrated Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated
Capability of 313 MWs) on an hourly basis. For sales in excess of the
capacity limitation of 925 MWs noted above, the rate shall consist of an
energy charge of up to 110% of Out-of-Pocket Cost and a demand charge of
up to $ 13 per megawatt per hour (such charge pertains to the production
component only), the total charge in any one day shall be no more than
the product of $209 and the greatest number of megawatts reserved in any
hour during said day and the total charge in any one week shall be no
more than the product of $1,252 and the greatest number of megawatts
reserved in any hour during said week. Non-firm transmission service per
the provisions of the CINergy Services, Inc., FERC Electric Tariff,
Original Volume No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission tariff of similar
service) must be obtained; but in no event shall the total revenue
(energy charge and demand charge combined) be less than 100% of the Out-
of-Pocket Costs for supplying the Non-Displacement Energy for such
reservation. Notwithstanding all previous Subsections, when power is
sold under both this Subsection and Subsection 3.3 in any month, the
total demand charge will be the applicable weighted average demand
charges in this Subsection and Subsection 3.3. Such weighting will be
developed by adding the number of hours that power was provided under
this Subsection times the applicable demand charge under this Subsection
and the number of hours that power was provided under Subsection 3.3
times the applicable demand charge in Subsection 3.3, with the sum being
divided by the applicable number of hours of the transaction (month,
week, day or hours).
<PAGE>
EXHIBIT III
(First Revision)
SERVICE SCHEDULE C
SHORT TERM POWER AND ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule C, being a part of and under the
Interconnection Agreement (referred to herein as the "1992 Agreement"),
dated as of May 1, 1992, among Indianapolis Power & Light Company
(hereinafter called "IPL") and PSI Energy, Inc., formerly named Public
Service Company of Indiana, Inc. (hereinafter called "PSI") and CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall become
effective as of the effective date of the Third Amendment, dated June 30,
1995, to the 1992 Agreement and shall continue in effect throughout the
duration of the 1992 Agreement. IPL, PSI and CINergy Services are
sometimes hereinafter referred to individually as "Party" or collectively
as "Parties" where appropriate.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Any Party, by giving the other Parties notice, may reserve from the
other Parties (a) electric power ("Weekly Short Term Power") for periods
of one or more weeks or (b) electric power ("Daily Short Term Power") for
periods of one or more days whenever the Party requested to reserve the
same is willing to make such power available. Under ordinary
circumstances such reservation shall extend for not less than a calendar
week if it begins with Sunday or for the balance of the calendar week if
it begins with any day subsequent to Sunday; however, under unusual
circumstances, the Parties may mutually agree upon a reservation of Daily
or Weekly Short Term Power for a lesser number of days. In all cases the
Party asked to supply Daily or Weekly Short Term Power shall be the sole
judge as to the amounts and periods that it has electric power available
that may be reserved by another Party as Short Term Power. A transaction
made by any Party under this Service Schedule C shall not extend beyond
twelve (12) months.
2.11 Prior to each reservation of Weekly or Daily Short Term
Power, the number of megawatts to be reserved, the period of the
reservation, the terms of such reservation, and the source of such
power if the supplying Party is in turn reserving such power from
another interconnected system which is not a signatory to the 1992
Agreement ("Third Party"), shall be determined by the Parties.
Such reservation shall be confirmed in writing at the request of
any Party. If during such period the conditions arise that could
not have been reasonably foreseen at the time of the reservation
and cause the reservation to be burdensome to the supplying Party,
such Party may by oral notice to the reserving Party, such oral
notice to be later confirmed in writing if requested by any Party,
reduce the number of megawatts reserved by such amount and for such
time as it shall specify in such notice, but kilowatts reserved
hereunder that the supplying Party is in turn reserving from a
Third Party may be reduced only to the extent they are reduced by
such Third Party.
2.12 During each period that Weekly or Daily Short Term Power has
been reserved, the Party that has agreed to supply such power shall
upon call by the reserving Party deliver associated electric energy
("Weekly or Daily Short Term Energy") to the reserving Party as of
the interconnection point or points, as provided in Section 4.01 of
Article 4 of the 1992 Agreement at a rate during each hour of up to
and including the number of megawatts reserved.
SECTION 3 - COMPENSATION
3.1 Weekly Short-Term Power and Energy
3.1.1 Except as otherwise provided in Subsection 3.1.3 below, when
IPL is the supplying Party, PSI shall pay all of the following
which are applicable (the applicable demand charge rate per this
Subsection is limited by Subsection 3.5):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved, at a rate of up to $3.89 per
kilowatt reserved, except, for each day (other than
Sunday) during any part of which the amount of such
Weekly Short-Term Power and Energy is reduced by IPL,
the total demand charge shall be reduced by one-sixth
(1/6) of said agreed upon demand charge rate for each
megawatt of the reduction;
(b) for Weekly Short-Term Energy delivered that is
generated by IPL, an energy charge to be agreed upon by
the Parties at the time of the transaction of up to
110% of the Out-Of-Pocket Cost (such cost being as of
the interconnection point or points, as defined in
Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources
of such energy to the interconnection point or points)
of supplying such energy;
(c) for Weekly Short-Term Energy delivered that is
purchased by IPL from a Third Party, an energy charge
of 100% of the Out-Of-Pocket Cost paid therefor by IPL,
plus one (1) mill per kilowatt-hour of such purchased
energy (for difficult to quantify energy-related
costs), plus any transmission losses resulting on IPL s
system on account of the transaction, and plus any
taxes incurred by IPL on account of the transaction.
3.1.2 Except as otherwise provided in Subsection 3.1.3 below, when
PSI is the supplying Party, IPL shall pay all of the following
which are applicable (the applicable demand charge rate per this
Subsection is limited by Subsection 3.6):
(a) for any week that Weekly Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Weekly Short-Term Power and
Energy is reserved. Said demand charge rate shall be
at a rate of up to $4,781 per megawatt reserved (such
charge pertains to the production component only),
except for each day (other than Sunday) during any part
of which the amount of such Weekly Short-Term Power and
Energy is reduced by PSI, the total demand charge shall
be reduced by one-sixth (1/6) of said agreed upon
demand charge rate (rounded to the nearest $0.10 per
megawatt) for each megawatt of the reduction. Non-firm
transmission service per the provisions of the CINergy
Services, Inc., FERC Electric Tariff, Original Volume
No. 3, Non-Firm Point-to-Point Transmission Service
Standard Tariff - NFT (or any successor transmission
tariff of similar service) must be obtained;
(b) for Weekly Short-Term Energy delivered that is
generated by PSI, an energy charge to be agreed upon by
the Parties at the time of the transaction of up to
110% of the Out-Of-Pocket Cost (such cost being as of
the interconnection point or points, as defined in
Article 4 of the 1992 Agreement, taking into account
electrical losses incurred from the source or sources
of such energy to the interconnection point or points)
of supplying such energy;
(c) for Weekly Short-Term Energy delivered that is
purchased by PSI from a Third Party, an energy charge
of 100% of the Out-Of-Pocket Cost paid therefor by PSI,
plus $1.00 per megawatt-hour of such purchased energy
(for difficult to quantify energy-related costs), plus
any transmission losses resulting on the system of the
CINergy Operating Companies on account of the
transaction, and plus any regulatory commission charges
and taxes incurred by PSI on account of the
transaction.
3.1.3 When Weekly Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party
to the Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any week such Weekly Short-Term Power and
Energy is reserved, a demand charge rate per
kilowatt to be agreed upon by the Parties at the
time such Weekly Short-Term Power and Energy is
reserved, at a rate of up to $0.29 per kilowatt
reserved (such charge pertains to the reservation
of transmission). In the event the amount of
such Weekly Short-Term Power and Energy is
reduced by IPL, said demand charge shall be
reduced by the sum of (i) one-sixth (1/6) of the
said agreed upon weekly rate per kilowatt of the
reduction for each day (other than Sunday) during
which such reduction is in effect, and (ii) the
reduction, if any, in the demand charge paid by
IPL to the Third Party;
(2) for each kilowatt-hour purchased by IPL from a
Third Party to supply Weekly Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-of-Pocket Cost paid therefor by
IPL, plus one (1) mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL s system
on account of the transaction, and plus any taxes
incurred by IPL on account of the transaction;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions
of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm
Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar
service) must be obtained. In the event the
amount of such Weekly Short-Term Power and Energy
is reduced by PSI, said demand charge shall be
reduced by the sum of (i) one-sixth (1/6) of the
said agreed upon weekly rate per megawatt of the
reduction for each day (other than Sunday) during
which such reduction is in effect, and (ii) the
reduction, if any, in the demand charge paid by
PSI to the Third Party;
(2) for each megawatt-hour purchased by PSI from a
Third Party to supply Weekly Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-Of-Pocket Cost paid therefor by
PSI, plus $1.00 per megawatt-hour (for difficult
to quantify energy-related costs), plus any
transmission losses resulting on the system of
the CINergy Operating Companies on account of the
transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of
the transaction.
3.2 Daily Short-Term Power and Energy
3.2.1 Except as otherwise provided in Subsection 3.2.3 below, when
IPL is the supplying Party, PSI shall pay all of the following
which are applicable (the applicable demand charge rate per this
Subsection is limited by Subsection 3.5):
(a) for any day that Daily Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Daily Short-Term Power and
Energy is reserved, at a rate of up to $0.778 per
kilowatt reserved, except, for any day during any part
of which the amount of such Daily Short-Term Power and
Energy is reduced by IPL, the agreed upon demand charge
will only be paid for the power still available;
(b) for Daily Short-Term Energy delivered that is generated
by IPL, an energy charge of up to 110% of the Out-of-
Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses
incurred from the source or sources of such energy to
the interconnection point or points) of supplying such
energy;
(c) for Daily Short-Term Energy delivered that is purchased
by IPL from a Third Party, an energy charge of 100% of
the Out-of-Pocket Cost paid therefor by IPL, plus one
(1) mill per kilowatt-hour of such purchased energy
(for difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL s system on
account of the transaction, and plus any taxes incurred
by IPL on account of the transaction.
3.2.2 Except as otherwise provided in Subsection 3.2.3 below, when
PSI is the supplying Party, IPL shall pay all of the following
which are applicable (the applicable demand charge rates per this
Subsection are limited by Subsection 3.6):
(a) for any day that Daily Short-Term Power and Energy is
reserved, a demand charge rate to be agreed upon by the
Parties at the time such Daily Short-Term Power and
Energy is reserved. Said demand charge rate shall be
at a rate of up to $797 per megawatt reserved (such
charge pertains to the production component only), the
total charge in any week shall be no more than the
product of $4,781 and the greatest number of megawatts
reserved in any day during said week, except for any
day during any part of which the amount of such Daily
Short-Term Power and Energy is reduced by PSI, the
agreed upon demand charge will only be paid for the
power still available. Non-firm transmission service
per the provisions of the CINergy Services, Inc., FERC
Electric Tariff, Original Volume No. 3, Non-Firm Point-
to-Point Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar service)
must be obtained;
(b) for Daily Short-Term Energy delivered that is generated
by PSI, an energy charge of up to 110% of the Out-of-
Pocket Cost (such cost being as of the interconnection
point or points, as defined in Article 4 of the 1992
Agreement, taking into account electrical losses
incurred from the source or sources of such energy to
the interconnection point or points) of supplying such
energy;
(c) for Daily Short-Term Energy delivered that is purchased
by PSI from a Third Party, an energy charge of 100% of
the Out-of-Pocket Cost paid therefor by PSI, plus $1.00
per megawatt-hour of such purchased energy (for
difficult to quantify energy-related costs), plus any
transmission losses resulting on the system of the
CINergy Operating Companies on account of the
transaction, and plus any regulatory commission charges
and taxes incurred by PSI on account of the
transaction.
3.2.3 When Daily Short-Term Power and Energy is purchased by the
supplying Party from a Third Party specifically for the reserving
Party, the reserving Party shall pay the supplying Party all of the
following which are applicable:
(a) the demand charge paid therefor by the supplying Party
to the Third Party for such electric power and energy;
(b) when IPL is the supplying Party:
(1) for any day such Daily Short-Term Power and
Energy is reserved, a demand charge per kilowatt
to be agreed upon by the Parties at the time such
Daily Short-Term Power and Energy is reserved, at
a rate of up to $0.058 per kilowatt reserved
(such charge pertains to the reservation of
transmission). In the event the amount of such
Daily Short-Term Power and Energy is reduced by
IPL, said demand charge shall be reduced by the
sum of (i) one-sixteenth (1/16) of the said
agreed upon daily rate per kilowatt of the
reduction for each hour in any day during which
such reduction is in effect, such reduction not
to exceed the agreed upon demand charge for such
day, and (ii) the reduction, if any, in the
demand charge paid by IPL to the Third Party;
(2) for each kilowatt-hour purchased by IPL from a
Third Party to supply Daily Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-of-Pocket Cost paid therefor by
IPL, plus one (1) mill per kilowatt-hour (for
difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL s system
on account of the transaction, and plus any taxes
incurred by IPL on account of the transaction;
(c) when PSI is the supplying Party:
(1) Non-firm transmission service per the provisions
of the CINergy Services, Inc., FERC Electric
Tariff, Original Volume No. 3, Non-Firm
Transmission Service Standard Tariff - NFT (or
any successor transmission tariff of similar
service) must be obtained. In the event the
amount of such Daily Short-Term Power and Energy
is reduced by PSI, said demand charge shall be
reduced by the sum of (i) one-sixteenth (1/16) of
the said agreed upon daily rate per megawatt of
the reduction for each hour in any day during
which any such reduction is in effect, such
reduction not to exceed the agreed upon demand
charge for such day, and (ii) the reduction, if
any in the demand charge paid by PSI to the Third
Party;
(2) for each megawatt-hour purchased by PSI from a
Third Party to supply Daily Short-Term Energy
delivered during such period, an energy charge of
100% of the Out-of-Pocket Cost paid therefor by
PSI, plus $1.00 per megawatt-hour (for difficult
to quantify energy-related costs), plus any
transmission losses resulting on the system of
the CINergy Operating Companies on account of the
transaction, and plus any regulatory commission
charges and taxes incurred by PSI on account of
the transaction.
3.3 Notwithstanding the rates stated in the Subsections 3.1.1, 3.1.3,
3.2.1 and 3.2.3 above, when IPL is the supplying Party, the sum of the
demand and energy charges for each specific reservation made pursuant to
Section 2 of this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of kilowatts reserved for
such reservation times the maximum Weekly or Daily
demand charge, whichever is applicable, specified above
in Subsections 3.1.1, 3.1.3, 3.2.1 and 3.2.3, as
appropriate; and
(ii) the product of the number of kilowatt-hours supplied
for such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg
Unit No. 4 for the last preceding month during which it
was run; or
(2) be less than 110% of the total Out-Of-Pocket Cost of
supplying the Short Term Energy for such reservation.
3.4 Notwithstanding the rates stated in Subsections 3.1.2, 3.1.3, 3.2.2
and 3.2.3 above, when PSI and CINergy Services are the supplying Party,
the sum of the demand and energy charges for each specific reservation
made pursuant to Section 2 of this Service Schedule C shall not:
(1) exceed the total of:
(i) the product of the number of megawatts reserved for
such reservation times the maximum Weekly or Daily
demand charge, whichever is applicable, specified above
in Subsections 3.1.2, 3.1.3, 3.2.2 and 3.2.3, as
appropriate, and plus
(ii) the product of the number of megawatt-hours supplied
for such reservation times 110% of the average cost per
megawatt-hour of energy generated by the CINergy
Operating Companies Zimmer Unit No. 1 and Gibson Unit
No. 5 for the preceding month; nor
(2) be less than 100% of the Out-Of-Pocket Costs of supplying the
Short Term Energy for such reservation.
3.5 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL
Agreements, for which the rates charged have been supported on the basis
that total revenues will not exceed the costs of Petersburg Unit No. 4,
is limited to 515MW.
3.6 The total power of all sales by the CINergy Operating Companies and
CINergy Services under this and other agreements of the CINergy Operating
Companies and CINergy Services, for which the agreed upon demand charge
is determined based on Zimmer Unit No. 1 and Gibson Unit No. 5, is
limited to 925 MWs (CINergy Operating Companies Zimmer Unit No. 1 Net
Demonstrated Capability of 612 MWs and Gibson Unit No. 5 Net Demonstrated
Capability of 313 MWs) on an hourly basis. For sales in excess of the
power limitation of 925 MWs noted above, the rate shall consist of an
energy charge of up to 110% of Out-of-Pocket Cost and a demand charge of
up to $1,252 per megawatt per week or a demand charge of up to $209 per
megawatt per day, the total charge in any one week shall be no more than
the product of $1,252 and the greatest number of megawatts reserved in
any hour during said week (such charge pertains to the production
component only). Non-firm transmission service per the provisions of the
CINergy Services, Inc., FERC Electric Tariff, Original Volume No. 3, Non-
Firm Point-to-Point Transmission Service Standard Tariff - NFT (or any
successor transmission tariff of similar service) must be obtained; but
in no event shall the total revenue (energy charge and demand charge
combined) be less than 100% of the Out-of-Pocket Costs of supplying the
Short-Term Energy for such reservation. Notwithstanding all previous
Subsections, when power is sold under both this Subsection and Subsection
3.1.2 in any week, the total demand charge will be the weighted average
demand charges in this Subsection and Subsection 3.1.2. Such weighting
will be developed by adding the number of hours that power was provided
under this Subsection times the demand charge under this Subsection and
the number of hours that power was provided under Subsection 3.1.2 times
the demand charge in Subsection 3.1.2, with such sum being divided by the
total number of hours in the week. Also, when power is sold under both
this Subsection and Subsection 3.2.2 in any day, the total demand charge
will be the weighted average demand charges in this Subsection and
Subsection 3.2.2. Such weighting will be developed by adding the number
of hours that power was provided under this Subsection times the demand
charge under this Subsection and the number of hours that power was
provided under Subsection 3.2.2 times the demand charge in Subsection
3.2.2, with such sum being divided by the total number of hours in the
day.
<PAGE>
EXHIBIT IV
(SECOND REVISION)
SERVICE SCHEDULE D
CARMEL SOUTHEAST TAP NETWORK POWER AND ENERGY TRANSFER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of and under the Interconnection
Agreement (referred to herein as the "1992 Agreement") dated as of May 1,
1992 between Indianapolis Power & Light Company (hereinafter called
"IPL") and PSI Energy, Inc., formerly named Public Service Company of
Indiana, Inc., (hereinafter called "PSI") and CINergy Services, Inc.
(hereinafter called "CINergy Services"), shall become effective as of the
earlier date of either September 1, 1995 or the effective date of the
Third Amendment, dated June 30, 1995, and shall continue in effect
through August 31, 1996, unless extended as provided in Section 6 hereof.
IPL, PSI and CINergy Services are sometimes hereinafter referred to
individually as "Party" or collectively as "Parties" where appropriate.
SECTION 2 - FACILITIES TO BE PROVIDED
2.1 PSI shall provide, install, operate and maintain, at its own
expense, during the term of this Service Schedule D as defined in Section
6 hereof, the following facilities:
(i) At its Carmel Southeast Substation - a 138,000 volt three-
phase interrupting device, a 24/40 MVA transformer, 12,470
volt metering equipment, relaying, switching, a supervisory
control remote terminal unit, a communication circuit from
the supervisory unit to IPL s Load Dispatch Office and
appurtenant equipment, all of which shall be subject to the
prior approval of IPL. PSI shall be responsible for
installing, owning and maintaining all necessary protection
equipment required by IPL to protect IPL s facilities
associated with Carmel Tap. PSI s remote terminal unit shall
provide data acquisition, remote status and control of the
load and allow PSI to provide real time dispatch of their
generation to their load as well as load control while IPL
will be provided real time breaker status and load data.
(ii) A 138,000 volt transmission line extending from Carmel
Southeast Substation to Transmission Tower Number 7 (Map
Section 173A) on IPL's 138,000 volt North-River Road (132-57)
transmission line, together with a 138,000 volt tap at such
tower, to be known as the Carmel Tap Point.
2.2 IPL shall provide, install, operate and maintain, as direct
assignment facilities at the sole benefit and expense of PSI, during the
term of the Carmel Tap Point as defined in Section 6 hereof, a 138,000
volt two-way switching point with supervisory controlled 138,000 volt
line interrupting disconnect switches and associated facilities such as a
switch tower, supervisory terminal unit and communication circuit at the
Carmel Tap Point.
SECTION 3 - SERVICES TO BE RENDERED
3.1 The Parties hereto mutually agree that their respective radial
distribution systems will not be operated in parallel through the Carmel
Tap Point. Electric energy supplied by IPL to PSI at the Carmel Tap
Point will be treated as capacity and energy simultaneously transferred
into IPL's system by PSI through the other interconnection points of the
Parties and will be used only to supply the ultimate consumers of PSI who
are or may be served from PSI's Carmel Southeast Substation. Any
capacity or energy delivered by IPL to PSI through the Carmel Tap Point
shall be simultaneously supplied by PSI to IPL through any of the
interconnection points of the Parties. PSI s supplied energy shall
include an adder of approximately 3%-5% to the capacity and energy
delivered to the Carmel Tap by IPL to compensate IPL for capacity and
energy losses occurring on IPL s system and PSI s tapped transmission
line and transformer bank (metered at secondary voltage) due to the
transfer of energy to the Carmel Tap Point.
3.2 IPL shall provide PSI with the following services:
1) Firm, network transmission service including a capacity
reservation (34,500 volt, 138,000 volt and above) of up to
and including 20 MW s (measured at the other IPL/PSI
interconnection points as defined in the 1992 Agreement).
Said service and reservation shall be planned for and
provided on the same basis as IPL s firm native load
customers only during the term of this service schedule as
set forth in Section 6 herein of this Agreement.
2) Non-firm transmission service (34,500 volt, 138,000 volt and
above) up to and including 30 MW s (measured at the other
IPL/PSI interconnection points in the 1992 Agreement) in
addition to the firm transmission listed in Point 1 above.
Said non-firm service shall be on an as available,
interruptible basis when requested by PSI.
Upon IPL s request, PSI shall immediately curtail and/or interrupt its
firm load served by the 20 MW firm network transmission and reservation
service on the same basis as IPL s firm native load customers. If PSI s
demand exceeds their reservation (herein called "excess loading") PSI
shall demonstrate that all such demand exceeding their reservation is 1)
immediately interruptible by contract or 2) that such excess loading
occurred due to emergency switching lasting less than a total of two (2)
weeks within any six-month period. Otherwise such excess loading shall
be treated as having automatically increased PSI s reservation, for
billing purposes only, until IPL is satisfied PSI has taken actions to
permanently eliminate such excess loading. IPL shall coordinate non-
emergency maintenance outages with PSI and provide a minimum notification
by 12:00 noon of the day before the scheduled outage.
3.3 IPL and PSI shall periodically conduct independent and/or joint
studies of their future systems to serve the Indianapolis northeast
metropolitan area. PSI shall annually update and provide IPL with their
ten year demand projections for the Carmel Tap Point. If such studies
indicate problems due to PSI s 20 MW reservation or projected increase in
reservation, then IPL and PSI shall jointly or independently, as soon as
practicable, develop plans and estimates of cost for the installation of
any additional equipment or facilities necessary to effect a long term
solution to such problem so that transmission services hereunder may be
reliably continued in accordance with IPL standards.
IPL s studies of this service cover the first five years and identified
facilities during that period which may need to be upgraded if area
demand grows faster than presently projected. If facility upgrades are
required, PSI shall pay annual carrying costs on a monthly basis during
the time period from the in-service date of the facilities until IPL s
area load increases by the amount of PSI s 20 MW reservation plus actual
and projected increases in reservation (herein called "period of
advancement") after which the remaining costs shall be rolled into IPL s
rate analysis. Any time PSI s reservation, as determined under 3.2
above, requires IPL to install facilities in advance of its need, PSI
shall pay annual carrying cost on such facilities during the period of
advancement. Increased reservations beyond 20 MWs shall be treated as
interruptible until all necessary facilities to reliably accommodate
these loads are placed in service. IPL will not increase or upgrade the
capacity of its existing or planned transmission facilities in order to
provide service under this Agreement if doing so would unduly 1) impair
IPL s system reliability or 2) jeopardize the benefits of service or 3)
increase the cost of service to IPL s Native Load Customers and other
customers to whom IPL has a pre-existing contractual obligation.
In the event PSI does not elect to continue its reservation after the
term of this Service Schedule, PSI shall pay 1) the stranded cost of all
IPL s facilities directly assignable to providing firm service for PSI s
reservation and 2) the remaining annual cost on a monthly basis of all
system improvements from the termination date until IPL s area load
increase equals the amount of PSI s reservation. In the event IPL can t
obtain regulatory approvals for facility modifications needed to
increases PSI s reservation, then firm service shall not be provided for
the amount of the increased service reservation.
3.4 PSI shall provide for ancillary services such as dynamic reactive
var/voltage support, all generation reserves, real time generation
dispatch, load following and dispatch control services needed to support
the operation of the Carmel Tap Point.
3.5 IPL shall file with the FERC an amendment to Service Schedule D for
all direct assignment facilities (not covered in Section 2.2) to be
provided for PSI by IPL under this Service Schedule and for all costs for
advanced system improvements during the "period of advancement" due to
the PSI transmission reservation provided under Service Schedule D.
FERC s failure to accept the cost assignments for either direct
assignment facilities and/or advanced system improvements due to the PSI
network load service provided in this Service Schedule D shall result in
1) IPL terminating its obligation to provide and plan for PSI s
transmission reservation as covered in Section 3.2 and Section 3.3 above
or 2) PSI may elect to reduce the level and/or firmness of PSI s
transmission reservation so that additional direct assignment facilities
and/or system improvement facility advancements won t be needed or 3) PSI
may elect to terminate service provided hereunder provided that upon
termination of this Service Schedule D by PSI, PSI shall remain
responsible for paying IPL all costs remaining for all direct assignment
facilities provided by IPL and all remaining costs for all advanced
system improvements attributed to PSI during the period of advancement
where said facilities have been filed with and accepted by the FERC
including the direct assignment facilities provided initially under
Section 2.2. The stranded cost of the direct assignment facilities
provided under Section 2.2 shall be calculated and marked up for tax
effects as shown in Attachment 1 and shall be paid by PSI within 30 days
of receipt of the bill from IPL.
SECTION 4 - DEVIATIONS IN DELIVERIES AT CARMEL TAP POINT
4.1 The Parties agree that with respect to the Carmel Tap Point, PSI
shall simultaneously supply (including adjustments for losses) to IPL
from PSI s other interconnection points with IPL the capacity and energy
delivered to PSI by IPL. The Parties recognize, however, that despite
their best efforts to simultaneously supply and deliver capacity and
energy (including adjustments for losses) deviations between actual and
scheduled energy transfers may occur. Electric energy resulting from
such deviations shall, at the option of IPL, be settled for either by
return of equivalent energy or by payment of Out-Of-Pocket Costs. If
equivalent energy is returned, it shall be returned at times when the
generating costs of IPL are equivalent to the generating costs of IPL at
the time of the deviations or, if IPL elects to have equivalent energy
returned under different conditions, it shall be returned in such
amounts, to be mutually agreed upon, as will compensate IPL for the
difference in conditions.
IPL, at its option, may elect to bill for such Out-Of-Pocket Costs, plus
ten percent of such cost, for any energy supplied over and above that
scheduled by PSI for any hour or hours during the billing period. Such
costs shall be determined at the Carmel Tap Point by taking into account
electrical losses incurred from the source or sources of such energy to
said Tap Point.
4.2 If IPL elects to bill for any energy supplied over and above that
scheduled by PSI for any hour or hours during the billing period where
the energy was supplied by a Third Party then in accordance with the FERC
Order 84 the maximum amount to be billed by IPL to PSI shall be 100% of
the Third Party demand and energy charge plus 1 mill/kwhr (the 1
mill/kwhr adder is applicable only to transactions with a duration of
less than one year) plus IPL s network transmission rate as accepted by
the FERC under this Service Schedule D.
SECTION 5 - COMPENSATION
5.1 FIRM SERVICE - Electric power measured in kilowatts supplied by PSI
and delivered at the Carmel Tap Point under the 1992 Agreement by IPL to
PSI shall be billed on a monthly basis the annual cost of IPL s
transmission system multiplied by the ratio of the sum of PSI s twelve 20
MW reservations divided by IPL s annual system peak demand which equals
$283,200 annually as calculated in the cost support Appendix A. The loss
factors consisting of a 3-5% adder, as noted in Section 3.1 hereof, shall
include PSI s radial transmission line and transformer bank associated
with the Carmel Tap Point and IPL s 34,500 volt and above transmission
system. The loss factors shall include PSI s radial transmission line
and transformer bank associated with the Carmel Tap Point and IPL s
transmission system. The loss factors shall be determined by the annual
transmission system loss studies performed by IPL and PSI. Also,
increases in PSI s reservation shall be billed by using the same
methodology.
5.2 NON-FIRM SERVICE - Electric power measured in kilowatts supplied by
PSI and delivered at the Carmel Tap Point under the 1992 Agreement by IPL
to PSI shall be billed at $1.18 per kilowatt-month plus $0.01 per
kilowatt-month for IPL dispatch control. This demand charge for non-firm
service applies to usage above PSI s firm service reservation and shall
be based upon the difference in maximum hourly demand in kilowatts
measured and the amount of PSI s reservation in the calendar month of
billing. The loss factors consisting of a 3-5% adder, as noted in
Section 3.1 hereof, shall include PSI s radial transmission line and
transformer bank associated with the Carmel Tap Point and IPL s 34,500
volt and above transmission system. The loss factors shall be determined
by the annual transmission system loss studies performed by IPL and PSI.
5.3 DIRECT ASSIGNMENT FACILITIES - PSI shall pay IPL on a monthly basis
IPL s annual charges on the total installed cost of the facilities
provided in Section 2.2 above multiplied by IPL s annual carrying charges
as calculated in Attachment 1 and revisions will be filed with the FERC.
SECTION 6 - TERM OF AGREEMENT
6.1 This Service Schedule shall terminate August 31, 1996 unless PSI
notifies IPL at least six (6) months prior to such termination date that
it desires to continue service to the Carmel Tap Point; provided however,
that any continued service is subject to such terms and conditions as are
mutually agreed to by the Parties.
<PAGE>
APPENDIX I
SERVICE SCHEDULE A
EMERGENCY SERVICE
EXHIBIT I
(First Revision)
<PAGE>
APPENDIX II
SERVICE SCHEDULE B
INTERCHANGE ENERGY
EXHIBIT II
(First Revision)
<PAGE>
APPENDIX III
SERVICE SCHEDULE C
SHORT TERM POWER AND ENERGY
EXHIBIT III
(First Revision)
<PAGE>
APPENDIX IV
SERVICE SCHEDULE D
CARMEL SOUTHEAST TAP
NETWORK POWER AND ENERGY
EXHIBIT IV
(Second Revision)
EXHIBIT 10.9
FACILITIES AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
PUBLIC SERVICE COMPANY OF INDIANA, INC.
---------
Dated: August 16, 1977
<PAGE>
CONTENTS
Article Page
Preamble . . . . . . . 1
1 Construction and
Ownership of Transmission
Facilities . . . . . . 1
2 Operation of Facilities 5
3 Metering Points and 6
Metering
4 Term . . . . . . . . . 7
5 Regulatory Authorities 7
6 Notices. . . . . . . . 8
7 Waivers. . . . . . . . 8
8 Assignment . . . . . . 8
9 Arbitration. . . . . . 8
10 Additional Rights and
Responsibilities . . . 8
Appendix A - Map of Transmission
Line Facilities including Facilities to be
Constructed and Provided Pursuant to Article 1 and
Article 10
<PAGE>
0.01 Agreement, dated August 16, 1977, between
Indianapolis Power & Light Company (Indianapolis Company)
and Public Service Company of Indiana, Inc. (Service
Company), both of whom are Indiana corporations,
WITNESSETH:
0.02 WHEREAS, Indianapolis Company and Service
Company, severally, own electric facilities and are
engaged in the generation, transmission, distribution,
and sale of electric power and energy in Indiana; and
0.03 WHEREAS, the systems of the parties are
directly interconnected through certain transmission line
facilities and in order to further strengthen the
respective transmission systems of the parties and the
interconnections between such systems, the parties now
desire that certain 345,000-volt transmission line
facilities be construed as herein provided;
0.04 NOW, THEREFORE, in consideration of the
premises and of the mutual covenants set forth, the
parties agree as follows:
ARTICLE 1
CONSTRUCTION AND OWNERSHIP OF
TRANSMISSION FACILITIES
General
1.01 The parties shall each construct a part of, as
hereinafter provided in this Article 1 and Article 10,
certain 345,000-volt transmission line facilities and
associated appurtenances, including switching, control,
metering, telemetering, and protective equipment,
connecting the following:
Service Company's Columbus Substation located
in Columbus, Indiana, to Indianapolis Company's
Sunnyside Substation located in Indianapolis,
Indiana.
Indianapolis Company's Petersburg Station, near
Petersburg, Indiana, to Service Company's Gibson-
Bedford (southmost) 345,000-volt transmission line.
The approximate routes of such transmission lines (herein
called "Line" or collectively called "Lines") to be so
constructed and provided are shown on the map attached
hereto and made a part hereof as Appendix A. All Lines,
except where otherwise specified, shall be single-circuit
and shall be constructed with two 954,000 cm ACSR
conductors per phase, or equivalent, and suitable ground
wires. Where a company is required to build a single-
circuit line, it may elect to place such circuit on one-
half of a double-circuit tower and reserve the vacant
one-half of the double-circuit tower for its future use.
Definitions
1.02 The following terms, wherever used in this
agreement, shall have the following meanings:
1.021 "Sunnyside-Columbus Line" means the Line
to be constructed hereunder, which is to extend from
Indianapolis Company's Sunnyside Substation to
Service Company's Columbus Substation.
1.022 "Petersburg-Cato Line" means the Line to
be constructed hereunder, which is to extend from
Indianapolis Company's Petersburg Station to the W
Interconnection Point defined in subsection 1.052
hereof.
1.023 "Carthage Substation" means the 345,000-
volt portion of Service Company's proposed
substation to be located near Carthage, Indiana, or
at such other location as Service Company may
specify to Indianapolis Company; provided, that on
or before April 1, 1978, Indianapolis Company and
Service Company shall reach an agreement in writing
as to the general location of Carthage Substation,
for the sole purpose of determining the point "Z"
past which the Sunnyside-Columbus Line must pass;
otherwise, the Carthage Substation and
Interconnection Point Z shall no longer be deemed a
part of this agreement and any provision of this
agreement referring to or which is affected by the
Carthage Substation or Interconnection Point Z shall
be deemed amended to exclude any such reference or
affect.
1.024 "Shelbyville Substation" means the
345,000-volt substation which Service Company plans
to install at the site of their existing 138 kV
"Northeast" Shelbyville Substation.
The parties shall cooperate to assure the maximum
coordination practicable in the design of the facilities
to be installed hereunder with each of the party's
existing facilities.
Coordination of Construction Programs
1.03 The parties shall coordinate their
construction programs and otherwise cooperate to achieve
to the fullest extent practicable, the simultaneous
completion of all portions of a particular Line.
Further, the parties shall coordinate such construction
programs so as to achieve simultaneous completion of all
facilities designated in this agreement. Each party will
use its best efforts to insure that the facilities to be
provided are completed and in service by April 1, 1982;
provided that Service Company reserves the right to
construct Carthage Substation at its convenience.
Indianapolis Company
1.04 Indianapolis Company shall provide, own, and
construct, or cause to be constructed, at its own
expense, the following described facilities:
1.041 A 345,000-volt Line (Sunnyside-Columbus
Line), approximately seventy miles in length, to
extend in a generally southeasterly direction from
Sunnyside Substation to an undetermined point near
Carthage, Indiana (herein called Z Interconnection
Point), thence continuing in a generally
southwesterly direction past Shelbyville Substation
to existing Service Company's Columbus Substation,
where it shall be connected to Service Company's
terminal equipment described in subsection 1.051.
1.042 At Sunnyside Substation, the necessary
terminal equipment, including facilities suitable
for the control of the Sunnyside-Columbus Line and
essential to the protection of line and station
equipment. Such terminal equipment shall include
not less than two 345,000-volt ultra-high-speed
automatic reclosing circuit breakers, appurtenant
disconnecting switches and associated equipment,
protective relays and associated equipment, and such
other items as may be required and suitable for the
control of such Line and for the coordination of
such control with terminal equipment to be provided
by Service Company pursuant to subsection 1.051.
1.043 At said Sunnyside Substation, the
necessary 345,000-volt metering equipment which,
subject to subsection 1.023 and in accordance with
section 10.01, shall be moved to and installed at
Carthage Substation at Indianapolis Company's
expense, for the purpose of monitoring flows on the
Sunnyside-Carthage Line, as described in Article 3.
1.044 At Indianapolis Company's Petersburg
Station, the necessary terminal equipment, including
facilities suitable for the control of the Gibson-
Petersburg and Petersburg-Bedford Lines and
essential to the protection of line and station
equipment. Such terminal equipment shall include
not less than two 345,000-volt ultra-high-speed
automatic reclosing circuit breakers, appurtenant
disconnecting switches and associated equipment,
protective relays and associated equipment, and such
other items as may be required and suitable for the
control of such Lines for the coordination of such
control with terminal equipment now existing and
operational at Service Company's Gibson Station and
Bedford Substation.
1.045 At said Petersburg Station, the
necessary 345,000-volt metering equipment for
metering the flows on the Gibson-Petersburg and
Petersburg-Bedford Lines, as described in Article 3.
Service Company
1.05 Service Company shall provide, own, and
construct, or cause to be constructed, at its own
expense, the following described facilities:
1.051 At Service Company's Columbus
Substation, the necessary terminal equipment
including facilities suitable for the control of the
Sunnyside-Columbus Line and essential to the
protection of line and station equipment. Such
terminal equipment shall include not less than one
345,000-volt ultra-high-speed automatic reclosing
circuit breaker and appurtenant disconnecting and
associated equipment, protective relays and
associated equipment, and such other items as may be
required and suitable for the control of such Line
and for the coordination of such control with
terminal equipment to be provided at said Sunnyside
Substation by Indianapolis Company pursuant to
subsections 1.042 through 1.045.
1.052 A 345,000-volt double-circuit Line
[Petersburg to Gibson-Bedford (southmost) Line],
approximately five miles in length, to extend in a
generally southerly direction from Indianapolis
Company's Petersburg Station to an undetermined
point near Cato, Indiana (herein call Point "W"), on
Service Company's Gibson-Bedford (southmost) Line.
The said Line shall be connected to the Gibson-
Bedford Line in the manner hereinafter described.
The Gibson-Bedford Line shall be opened at Point W
and one circuit of the Petersburg-Cato Line
connected to the Gibson-Cato section of the Gibson-
Bedford (southmost) Line. The other circuit of the
Petersburg-Cato Line shall be connected to the Cato-
Bedford section of the Gibson-Bedford (southmost)
Line. At Indianapolis Company's Petersburg Station,
the newly formed Petersburg-Gibson and Petersburg-
Bedford Lines shall be connected to Indianapolis
Company's terminal equipment as described in
subsections 1.044 and 1.045.
Communication, Telemetering, and Load Control Facilities
1.06 Each party shall provide, own, and construct
or cause to be constructed at its own expense the
facilities described under its name in this Section:
1.061 By Indianapolis Company, at its
Petersburg Station and at the Carthage Substation or
in the event Carthage Substation is not operational,
at its Sunnyside Substation and at other suitable
locations as it may determine, such communication,
telemetering and load control facilities as shall
hereafter be determined by the parties to be
necessary for the proper interconnected operation of
their respective systems.
1.062 By Service Company, at its Columbus
Substation, Carthage Substation, and at other
suitable locations as it may determine, such
communication, telemetering and load control
facilities as shall hereafter be determined by the
parties to be necessary for the proper
interconnected operation of their respective
systems.
Maintenance of Facilities
1.07 Each party shall keep, or shall cause to be
kept, the Line or Lines, together with all associated
facilities and appurtenances described in this Article 1
that is to be provided and owned by each, in a suitable
condition of repair at all times, at each party's own
expense, in order that any such Line will operate in a
reliable and satisfactory manner and in order that
reduction in the capacity of any such Line will be
avoided. If at any time any party is not satisfied that
the facilities of another are being maintained in a
suitable condition of repair, it may, by written notice
given to the other party, call for a special study by the
parties to determine what, if anything, should be done to
place such facilities in a suitable condition of repair.
If the parties are unable to mutually agree upon a
decision within a reasonable time, the matter shall be
settled by arbitration in accordance with Article 9
hereof.
Future Transmission Facilities
1.08 The facilities to be provided by each party as
set forth above are governed by (1) the economies of
mutual transmission facilities and (2) the aggregate
interconnection capacity as it relates to the services
being furnished under the several agreements entered into
between the parties hereto. The expansion of the
parties' respective transmission systems during the term
of this agreement may make it necessary or desirable that
a party add-to, replace, relocate, or remove portions of
facilities now or hereafter provided by it. Either party
shall have the right to so add-to, replace, relocate, or
remove portions of facilities now or hereafter provided
by it, subject, however, to the understanding that in so
doing such party does not interfere with the purposes and
benefits desired under this Facilities Agreement as
herein above expressed, or with the performance of (1)
the agreement between Indianapolis Company and Service
Company, dated May 1, 1962, as amended; (2) agreements
between Indianapolis Company and its other interconnected
companies; (3) agreements between Service Company and its
other interconnected companies; (4) the agreement among
Indianapolis Company, Service Company, and Indiana &
Michigan Electric Company dated April 24, 1968; and (5)
the agreement among East Kentucky Power Cooperative,
Incorporated, Indianapolis Company, Kentucky Utilities
Company, and Service Company, dated July 9, 1971, as
amended.
ARTICLE 2
OPERATION OF FACILITIES
2.01 When a Line provided for herein is completed,
it shall be appropriately connected, physically and
electrically, to the systems of the appropriate parties,
and thereafter, during the term of this agreement, such
systems shall be operated in continuous synchronism
through such Line. If synchronous operation through any
line becomes interrupted either manually or automatically
for any reason, including scheduled maintenance that has
been agreed to by the parties, the parties shall
cooperate to remove the cause of the interruption and
restore the Line to normal operating condition as soon as
practicable. No party shall be liable to any other party
for any damage or loss of revenue caused by any such
interruption. All circuit breakers and associated
terminal facilities shall be operated by the party that
owns such facilities.
ARTICLE 3
METERING POINTS AND METERING
Metering Points
3.01 Suitable metering equipment shall be provided,
owned, and maintained by the owners thereof at the
metering points and voltages as hereinbelow set forth,
and at such other points and voltages and with such
ownership as may be agreed upon by the parties:
3.011 Should Gibson Unit #5 or other
generation which would affect losses be installed,
located of the metering shall be reviewed.
3.012 In respect of the X Interconnection
Point, 345,000-volt metering equipment owned by
Indianapolis Company and installed at Indianapolis
Company's Sunnyside Substation, subject to being
moved pursuant to Section 10.01 to Interconnection
Point Z, at Indianapolis Company's expense and to be
installed in Service Company's Carthage Substation
for the purpose of monitoring the flows in the
Sunnyside-Carthage Line.
3.013 In respect of the Y Interconnection
Point, 345,000-volt metering equipment owned by
Indianapolis Company and installed at Indianapolis
Company's Petersburg Station.
Metering.
3.02 Suitable metering equipment at the metering
points as provided in Section 3.01 above shall include
standard types of electric meters, and acceptable
appurtenances as shall be necessary to give for each
direction of flow the following quantities: (1) a
continuous automatic graphic record of both kilowatts and
kilovars, (2) an automatic record of the kilowatt-hours
for each clock hour, and (3) a continuous integrating
record of the kilowatt-hours. Additions or deletions to
the above three items shall be at the mutual consent of
the parties involved.
3.03 Measurements of electric energy for the
purpose of effecting settlements shall be made by
standard types of electric meters installed and
maintained by the owners at the metering points as
provided under Section 3.01 above. The timing devices of
all meters having such devices shall be maintained in
time synchronism as closely as practicable. The meters
shall be sealed and the seals shall be broken only
occasions when the meters are to be tested or adjusted.
3.04 The aforesaid standard metering equipment
shall be tested by the owners at suitable intervals and
its accuracy of registration maintained in accordance
with good practice. On request of any party, a special
test may be made at the expense of the party requesting
such special test. Representatives of all parties shall
be afforded opportunity to be present at all routine or
special tests and upon occasions when any readings, for
purposes of settlements, are taken from meters not
bearing an automatic record.
3.05 If any test of metering equipment shall
disclose an inaccuracy exceeding two percent, the
accounts among the parties for service theretofore
delivered shall be adjusted to correct for the inaccuracy
disclosed over the shorter of the following two periods:
(1) for the thirty-day period immediately preceding the
day of the test or (2) for the period that such
inaccuracy may be determined to have existed. Should the
metering equipment as provided for under Section 3.02
above at any time fail to register, the electric power
and energy delivered shall be determined from the best
available data.
3.06 The parties hereto understand and agree that
the establishment of the metering points as set forth in
Section 3.01 hereof, determines each party's
responsibility for the line losses incurred between such
metering points.
ARTICLE 4
TERM
4.01 This agreement shall become effective on the
date first above-written, shall continue until December
31, 2012, and shall remain in full force and effect
thereafter unless terminated under Section 4.02 hereof.
4.02 Either party upon at least 5-years prior
written notice to the other may terminate this agreement
on December 31, 2012, or on any anniversary of said date.
ARTICLE 5
REGULATORY AUTHORITIES
5.01 This agreement is subject to any governmental
authority having jurisdiction in the premises.
ARTICLE 6
NOTICES
6.01 All notices and requests under this agreement
shall be in writing and shall be delivered in person or
sent by registered or certified mail addressed to the
Chief Executive Officer of the party to be served at such
party's general office or at such other address as such
party may from time to time designate in writing.
ARTICLE 7
WAIVERS
7.01 Any waiver at any time of any rights as to any
default or other matter arising hereunder, shall not be
deemed a waiver as to any other default or matter. Any
delay, short of the statutory period of limitation, in
asserting any right hereunder shall not be deemed a
waiver of such right.
ARTICLE 8
ASSIGNMENT
8.01 Either party may assign this agreement by way
of pledge to a trustee under a mortgage securing its
indebtedness or to a successor corporation acquiring its
electric utility property and business substantially as
an entirety, provided such successor corporation assumes
all obligations of the assignor hereunder. Such
successor shall be substituted for the assignor under
this agreement, but the assignor shall not be released
from any obligations set forth herein. Except as
aforesaid, neither party shall assign this agreement
without the prior written consent of the other.
ARTICLE 9
ARBITRATION
9.01 Any controversy or claim arising out of, or
relating to, this agreement or the breach of it shall be
settled by arbitration in Indianapolis, Indiana, in
accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered, may be
had in any court having jurisdiction thereof.
ARTICLE 10
ADDITIONAL RIGHTS AND
RESPONSIBILITIES
10.01 At the time of construction of the Carthage
Substation, or such other substation as may be specified
pursuant to subsection 1.023 hereof, Service Company
shall provide, own, and construct, or cause to be
constructed, at its own expense, the following described
facilities:
10.011 All facilities incident and appropriate
to the establishment of a Sunnyside-Carthage Line
and a Carthage-Columbus Line out of the Sunnyside-
Columbus Line, including, without limitation, the
breaking of the Sunnyside-Columbus Line;
constructing such new 345,000-volt transmission line
as may be required to connect the two portions of
the Sunnyside-Columbus Line to Carthage Substation
at Interconnection Point Z; 345,000-volt ultra-high-
speed automatic reclosing circuit breakers to
average at least one per termination unless
otherwise agreed to; appurtenant disconnecting and
associated equipment; protective relays and
associated equipment and such other items as may be
required and suitable for the control of such Lines
and for the coordination of such control with
terminal equipment at Indianapolis Company's
Sunnyside Substation; provided that Indianapolis
Company (1) shall pay Service Company for the cost
and Indianapolis Company will assume ownership of
one of the 345,000-volt ultra-high-speed automatic
reclosing circuit breakers and associated equipment
appertaining thereto upon receipt and approval of an
itemized statement therefore, and (2) shall, at its
expense, move the metering equipment from Point "X"
to Point "Z".
10.02 Service Company reserves the right to install
a 345,000/138,000-volt transformer at their Shelbyville
Substation, tapped on the Sunnyside-Columbus Line through
a 345,000-volt circuit switcher, and including such other
appurtenant disconnecting and associated equipment;
protective relays and associated equipment and such other
items as may be required and suitable for the control of
such substation and for the coordination of such control
with terminal equipment at the remote ends of the
connecting Lines; provided, that Service Company shall
pay the costs of such substation and provided, that
Service Company shall pay the costs of bringing the
Sunnyside-Columbus Line into the Shelbyville Substation.
10.03 Should it appear to be advantageous from an
engineering and economic standpoint at a future date to
further coordinate or add-to the transmission system
additions covered by this agreement, Indianapolis Company
and Service Company agree to mutually conduct such
studies as necessary of the proposed system at that time
to ascertain the mutual benefits.
IN WITNESS WHEREOF, the parties have caused this
agreement to be duly executed as of the date first above-
written.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane G. Todd
PUBLIC SERVICE COMPANY OF INDIANA, INC.
By /s/ Hugh A. Barker
<PAGE>
APPENDIX A
Map of Transmission line facilities including facilities
to be constructed and provided pursuant to Article 1 and
Article 10.
<PAGE>
AMENDMENT NO. 1
To
FACILITIES AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
And
PUBLIC SERVICE COMPANY OF
INDIANA, INC.
This amendment, dated as of June 1, 1981 between
Indianapolis Power & Light Company (Indianapolis Company)
and Public Service Company of Indiana, Inc. (Service
Company), both of whom are Indiana corporations,
WITNESSETH:
WHEREAS, there is now in effect between Indianapolis
Company and Service Company a Facilities Agreement dated
August 16, 1977 (the "Facilities Agreement"); and
WHEREAS, said parties wish to amend the Facilities
Agreement to provide for a delay in the construction and
completion of certain facilities specified therein, as a
result of delays in the expected in-service dates of
associated generating facilities; and
WHEREAS, said parties wish to amend the Facilities
Agreement to provide for a revision in the location of
metering specified therein, as a result of changes in
generation and transmission plans not foreseen at the
time of that Agreement; and
WHEREAS, said parties wish to amend the Facilities
Agreement to allow for the installation of substation
facilities not contemplated at the time of that
Agreement;
NOW, THEREFORE, in consideration of the premises and
of the mutual covenants herein set forth, the parties
agree as follows:
Section 1. The Facilities Agreement is hereby
amended by substituting the word "Gwynneville" for the
word "Carthage" whenever and wherever it appears in the
Facilities Agreement.
Section 2. The Facilities Agreement is hereby
further amended by amending Section 1.03 thereof to read:
"1.03 The parties shall coordinate their
respective construction programs and otherwise
cooperate, to the fullest extent practicable, toward
the achievement of the completion of all lines and
facilities covered by this agreement. Each party
shall use it best efforts to insure that such lines
and facilities are completed by the in-service dates
specified in the following Subsections 1.031 through
1.034, unless later dates are mutually agreed upon
by the parties hereto:
"1.031 That portion of the Sunnyside-
Columbus Line from Columbus to Point Z, known
as the Columbus-Gwynneville Line, shall be in
service by April 1, 1982. Completion of this
line shall be coordinated with the completion
of a line (not involved in this agreement) to
be built by Service Company from Gwynneville to
New Castle.
"1.032 The Petersburg-Cato Line shall be
in service by August 1, 1982.
"1.033 That portion of the Sunnyside-
Columbus Line extending from Point Z to
Sunnyside, known as the Gwynneville-Sunnyside
Line, shall be in service by August 1, 1985.
"1.034 That portion of the Gwynneville
Substation required for the operation of the
Gwynneville-Sunnyside Line, and that portion of
the Sunnyside Substation required for the
operation of that line shall both be in service
by August 1, 1985."
Section 3. The Facilities Agreement is hereby
further amended by amending Subsection 1.043 of Section
1.04 to read:
"1.043 At Service Company's Gwynneville
Substation, the necessary 345,000-volt metering
equipment for the purpose of monitoring flows
on the Sunnyside-Gwynneville Line, as described
in Article 3 hereof."
Section 4. The Facilities Agreement is hereby
further amended by modifying Subsection 3.012 of Section
3.01 to read:
"3.012 In respect of the Z
Interconnection Point, 345,000-volt metering
equipment owned by Indianapolis Company and
installed by Service Company at its Gwynneville
Substation at Indianapolis Company's expense,
for the purpose of monitoring the flows in the
Sunnyside-Gwynneville Line. Such metering
equipment shall include compensation as
provided in Section 3.06 hereof."
Section 5. The Facilities Agreement is hereby
further amended by amending Section 3.06 to read:
"3.06 The parties hereto understand and
agree that the establishment of metering point
Y as set forth in Subsection 3.013 hereof,
determines each party's responsibility for the
line losses incurred. With respect to metering
point Z, metering equipment shall be
compensated to fully compensate Indianapolis
Company for losses incurred on the Sunnyside-
Gwynneville Line. Such compensation shall
cease and Sunnyside-Gwynneville Line losses
shall become the responsibility of Indianapolis
Company at such time as Service Company has
fulfilled all of the following three
conditions: (i) 765,000-volt lines and
associated substations between Marble Hill and
Columbus, Marble Hill and Jefferson, and
Columbus and Gwynneville are placed in service;
(ii) the Jefferson-Greentown 765,000-volt line
covered by an agreement between Service Company
and Indiana and Michigan Electric Company, is
looped into Gwynneville and placed in service;
and (iii) the 765,000/345,000-volt
autotransformers at Gwynneville and a
765,000/230,000-volt autotransformer at
Columbus are placed in service."
Section 6. The Facilities Agreement is hereby
further amended by amending Subsection 10.011 of Section
10.01 to read:
"10.011 All facilities incident and
appropriate to the establishment of a
Sunnyside-Gwynneville Line and a Gwynneville-
Columbus Line including, without limitation:
345,000-volt ultra-high-speed automatic
reclosing circuit breakers to average at least
one per termination unless otherwise agreed to;
appurtenant disconnecting and associated
equipment; protective relays and associated
equipment and such other items as may be
required and suitable for the control of such
Lines and for the coordination of such control
with terminal equipment at Indianapolis
Company's Sunnyside Substation; provided, that
Indianapolis Company shall provide Service
Company with one of the 345,000-volt ultra-
high-speed automatic reclosing circuit breakers
and equipment appertaining thereto; and shall
pay the cost of installing the same upon
receipt and approval of an itemized statement
therefore."
Section 7. The Facilities Agreement is hereby
further amended by adding a new Section 10.04 to read:
"10.04 Service Company shall have the
right to install at its cost a 345,000/69,000-
volt transformer at the Gwynneville Substation,
tapped on Indianapolis Company's Gwynneville-
Columbus 345,000-volt line through a 345,000-
volt circuit switcher, together with such other
equipment as may be required and suitable for
the control of such substation and for the
coordination of such control with terminal
equipment at the remote ends of the connecting
lines; provided, that Indianapolis Company
shall have the right to approve the design of
such installation to determine that it will not
adversely affect the reliability and operation
of its Gwynneville-Columbus 345,000-volt line,
which approval shall not be unreasonably
withheld."
Section 8. Except as specifically amended by this
Amendment No. 1, the Facilities Agreement shall remain
the same and in full force and effect.
IN WITNESS WHEREOF, the parties have caused this
agreement to be duly executed as of the date first above
written.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane G. Todd
Zane G. Todd, Chairman of the
Board
PUBLIC SERVICE COMPANY OF INDIANA, INC.
By /s/ Hugh A. Barker
Hugh A. Barker, Chairman
<PAGE>
AMENDMENT NO. 2
TO
FACILITIES AGREEMENT
Dated as of August 16, 1977
Between
PUBLIC SERVICE COMPANY OF
INDIANA, INC.
and
INDIANAPOLIS POWER & LIGHT COMPANY
Dated as of October 1, 1984
<PAGE>
This AMENDMENT NO. 2, dated as of the 1st day of October,
1984 between Public Service Company of Indiana, Inc.
(Service Company), an Indiana Corporation, and
Indianapolis Power & Light Company (Indianapolis
Company), an Indiana Corporation, and hereafter called
"the parties",
WITNESSETH THAT:
WHEREAS the parties entered into a Facilities Agreement
dated as of August 16, 1977 which Agreement was last
modified on June 1, 1981 (said Facilities Agreement, as
so modified, being herein called the "1977 Agreement");
and
WHEREAS the parties desire to modify the 1977 Agreement,
as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein set forth, the parties hereto
agree as follows:
SECTION 1 Article 1, Subsection 1.033 of Section 1.03 of
the 1977 Agreement is amended to read:
1.033 That portion of the Sunnyside-Columbus
Line extending from Point Z to Sunnyside, known as
the Sunnyside-Gwynneville Line, shall be in service
by February 1, 1986.
SECTION 2. Article 1, Subsection 1.043 of Section 1.04
of the 1977 Agreement is amended to read:
1.043 At said Sunnyside Substation, the
necessary 345,000-volt metering equipment for the
purpose of monitoring flows in the Sunnyside-
Gwynneville Line, as described in Article 3 hereof.
SECTION 3. Article 3, Subsection 3.011 of Section 3.01
of the 1977 Agreement is amended to read:
3.011 Should generation and/or transmission
developments of the parties affect losses, location
of the metering shall be reviewed.
SECTION 4. Article 3, Subsection 3.012 of Section 3.01
of the 1977 Agreement is amended to read:
3.012 In respect of the X Interconnection
Point, 345,000-volt metering equipment owned and
installed by Indianapolis Company at Indianapolis
Company's Sunnyside Substation for the purpose of
monitoring the flows in the Sunnyside-Gwynneville
Line. Such metering equipment shall be capable of
being compensated.
SECTION 5. Article 3, Section 3.06 of the 1977 Agreement
is amended to read:
3.06 The parties hereto understand and agree
that the establishment of the metering points as set
forth in Section 3.01 hereof determines each party's
initial responsibility for the line losses incurred
between such metering points.
SECTION 6. Except as hereinabove modified and amended,
all the terms and conditions of the 1977 Agreement shall
remain in full force and effect.
SECTION 7. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the
respective parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed by their duly authorized
officers.
PUBLIC SERVICE COMPANY OF INDIANA, INC.
By /s/ Darrell V. Menscer
Darrell V. Menscer, President
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill
EXHIBIT 10.11
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
Dated: December 2, 1968
<PAGE>
CONTENTS
Article Page
Preamble ------------------------------------------------------- 1
1. Provisions for, and Continuity of Interconnected
Operation ------------------------------------------------------ 2
2. Services to be Rendered ---------------------------------------- 5
3. Service Conditions --------------------------------------------- 7
4. Delivery Points, Metering Points, and Metering ----------------- 10
5. Records and Statements ----------------------------------------- 12
6. Billings and Payments ------------------------------------------ 13
7. Operating Committee -------------------------------------------- 14
8. Continuity of Service ------------------------------------------ 15
9. Duration of Agreement ------------------------------------------ 16
10. Liability ------------------------------------------------------ 18
11. Taxes ---------------------------------------------------------- 18
12. Notices -------------------------------------------------------- 18
13. Regulatory Authorities ----------------------------------------- 19
14. Waivers -------------------------------------------------------- 20
15. Entire Agreement Contained Herein ------------------------------ 20
16. Construction of Agreement -------------------------------------- 20
17. Assignment ----------------------------------------------------- 21
(i)
<PAGE>
Service Schedule Page
A Emergency Service ---------------------------------------------- 22
B Energy Transfer ------------------------------------------------ 26
C Interchange Power ---------------------------------------------- 30
D Short Term Power ----------------------------------------------- 34
E Coordination of Scheduled Maintenance of
Generating Facilities ------------------------------------------ 38
(ii)
<PAGE>
0.01 THIS AGREEMENT, dated as of the 2nd day of December, 1968,
between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana corporation, and SOUTHERN INDIANA GAS AND ELECTRIC COMPANY (Southern
Indiana Company), also an Indiana corporation,
WITNESSETH:
0.02 WHEREAS, Indianapolis Company and Southern Indiana Company each
owns electric facilities and is engaged in generation, transmission,
distribution, and sale of electric power and energy within the State of
Indiana; and
0.03 WHEREAS, Indianapolis Company and Southern Indiana Company desire
that certain 138,000-volt transmission line facilities be provided and built
so as to establish a 138,000-volt interconnection between the Indianapolis
Company system and the Southern Indiana Company system; and
0.04 WHEREAS, Indianapolis Company and Southern Indiana Company desire
to avail themselves of the mutual benefits and advantages to be realized by
interconnected systems operation through such 138,000-volt interconnection;
and
0.05 WHEREAS, the parties desire to fix the terms and conditions upon
which such interconnection shall be provided and built and upon which the
furnishing of interconnection services shall be effected;
0.06 NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein set forth, the parties agree as follows:
ARTICLE 1
PROVISIONS FOR, AND CONTINUITY
OF INTERCONNECTED OPERATION
Facilities To Be Provided By Southern Indiana Company
1.01 Southern Indiana Company shall provide, own, and install, or
cause to be installed, at its own expense, the following described
facilities, viz.:
1.011 A 138,000-volt single circuit transmission line (hereby
designated and herein called Culley-Petersburg Line), approximately 55
miles in length, constructed with conductors not smaller than 795 MCM
in size and with suitable ground wires, to extend in a generally
northerly direction from Southern Indiana Company's Culley 138 KV
Substation to Indianapolis Company's Petersburg Station.
1.012 At Culley 138 KV Substation, the necessary terminal
equipment, including facilities essential to the protection of line and
station equipment.
1.013 At Culley 138 KV Substation and other suitable locations,
such communication, telemetering, and load control facilities as shall
hereafter be determined by the parties as necessary for the proper and
efficient interconnected operation of the parties' systems.
Facilities To Be Provided By Indianapolis Company
1.02 Indianapolis Company shall provide, own, and install, or cause to
be installed at its own expense, the following described facilities; viz.:
1.021 At Petersburg Station, the necessary terminal equipment,
including facilities essential to the protection of line and station
equipment; such terminal equipment shall include one 138,000-volt
automatic circuit breaker, appurtenant disconnecting and associated
equipment.
1.022 At Petersburg Station, transformer capacity, rated at
300,000 KVA, for conversion of the power at the 345,000-volt bus to
power at 138,000 volts.
1.023 At Petersburg Station, suitable 138,000-volt metering
equipment as described in Section 4.03 below.
1.024 At Petersburg Station and other suitable locations, such
communication, telemetering, and load control facilities as shall
hereafter be determined by the parties as necessary for the proper and
efficient interconnected operation of the parties' systems.
Interconnection Point
1.03 The Interconnection Point shall be that point at Petersburg
Station where the terminal facilities provided therefor by Indianapolis
Company shall be connected to the Culley-Petersburg Line.
Facilities Obligations Common To The Parties
1.04 Subject to accidents, strikes, litigation, delays in securing
delivery of equipment or other similar or dissimilar causes beyond the
reasonable control of the parties, including the procuring of the necessary
materials and labor and the obtaining of all the necessary governmental
authorizations and permits approving the use of such labor and materials,
the installation of the facilities to be provided by the parties, as
hereinabove described, shall be completed and in service on or before
January 1, 1970, and should the installation of said facilities be delayed
beyond said date due to any of the aforesaid causes it shall nevertheless be
completed as soon thereafter as practicable.
1.05 The parties shall cooperate to assure the maximum practicable
coordination of design of the facilities to be installed by each of them
with new and existing facilities of the other.
Synchronous Operation
1.06 When the installation of the facilities as provided for under
this Article 1 is completed, the systems of the parties shall be connected
at the Interconnection Point and thereafter throughout the duration of this
agreement, subject to the provisions of this Section 1.06, such systems
shall be operated in continuous synchronism through such line. If
synchronous operation of the systems through such line becomes interrupted
either manually or automatically because of reasons beyond the control of
either party or because of scheduled maintenance that has been agreed to by
both parties, the parties shall cooperate to remove the cause of such
interruption as soon as practicable and restore such line to normal
operating condition. Neither party shall be responsible to the other party
for any damage or loss of revenue caused by any such interruption.
Maintenance of Equipment
1.07 The parties hereto shall each keep the lines, together with all
associated equipment and appurtenances, described in Article 1 hereof that
are located on their respective sides of the Interconnection Point in a
suitable condition of repair at all times, each at its own expense, in order
that said lines will operate in a reliable and satisfactory manner and in
order that reduction in the capacity of said lines will be avoided to the
extent practicable.
ARTICLE 2
SERVICES TO BE RENDERED
2.01 It is the purpose of the parties hereto to realize on an
equitable basis, all benefits practicable to be effected through
coordination in the operation and development of their respective systems.
It is understood by the parties that such benefits may be realized by them
by supplying from time to time, each to the other, under stated terms and
conditions, various interconnection services including:
(I) the furnishing of mutual emergency and standby
assistance,
(II) the transfer of electric energy through the transmission
system of one party for the benefit of the other,
(III) the interchange, sale, and purchase of energy to effect
operating economies,
(IV) the sale and purchase of short-term electric power and
energy available on the system of one party and needed on
the system of the other, and
(V) the coordination of maintenance schedules of generating
and transmission facilities
In furtherance of such purpose the parties hereto shall create an Operating
Committee as provided under Article 7.
2.02 Inasmuch as the specific services to be rendered in furtherance
of such purpose will vary from time to time while this agreement is in
effect, and the terms and conditions applicable to such services may require
modification from time to time, it is intended that such specific services
and the terms and conditions applicable thereto will be set forth in service
schedules mutually agreed upon from time to time between the parties. Such
service schedules, until and unless changed by such mutual agreement, shall
be those provided by Section 2.03 hereof. Each such service schedule, while
in effect, shall be deemed a part of this agreement.
2.03 The respective service schedules designated:
1. Service Schedule A - Emergency Service
2. Service Schedule B - Energy Transfer
3. Service Schedule C - Interchange Power
4. Service Schedule D - Short Term Power
5. Service Schedule E - Coordination of Scheduled Maintenance of
Generating Facilities
which have been agreed upon between the parties hereto, are identified as
Exhibits I, II, III, IV, and V, respectively, to this agreement, are
attached hereto and are hereby made a part of the same as if incorporated
herein.
ARTICLE 3
SERVICE CONDITIONS
Control of System Disturbance
3.01 The parties hereto shall maintain and operate their respective
systems so as to minimize, in accordance with sound operating practice, the
likelihood of disturbance originating in either system which might cause
impairment to the service of the system of the other party or of any system
interconnected with the system of the other party.
Control of Kilovar Exchange
3.02 It is intended that neither party hereto shall be obligated to
deliver kilovars for the benefit of the other party; also that neither party
shall be obligated to receive kilovars when to do so may introduce
objectionable operating conditions on its system. The Operating Committee
shall be responsible for the establishment from time to time of operating
procedures and schedules, in respect of carrying kilovar loads by one system
for the other in order to secure adequate service and economical use of the
facilities of both systems and in respect of proper charges, if any, for the
use of facilities carrying kilovar loads. In discharging such duties the
Operating Committee shall recognize that in the transmission and delivery of
power and energy hereunder the carrying of kilovar loads by either of the
parties, in harmony with sound engineering principles of transmission
operation with their systems interconnected, is subject to numerous
variables contingent upon loading and operating conditions existing
simultaneously on both of their systems. The operating procedures and
schedules so set up by the Operating Committee shall be in accord with such
principles and shall require each of the parties to carry kilovar loads at
such times and in such amounts as will be equitable to both parties.
Control of Unscheduled Power Deliveries
3.03 The parties hereto shall exercise reasonable foresight in
carrying out all matters related to the providing and operating of their
respective electric power resources so as to minimize to the extent
practicable deviations between actual and scheduled deliveries of electric
power and energy between their systems. The parties shall provide and
install on their respective systems such communication and telemetering
facilities as are essential to so minimizing such deviations; and, in
developing and executing operating procedures that will enable the parties
to avoid, to the extent practicable, deviations from scheduled deliveries,
shall fully cooperate with each other and with third parties whose systems
are either directly or indirectly interconnected with the systems of the
parties and who of necessity, together with the parties, must unify their
efforts cooperatively to achieve effective and efficient interconnected
operation. The parties recognize, however, that, despite their best efforts
to prevent the same, unscheduled deliveries of electric energy from one
party to the other may occur. Electric energy delivered hereunder in such
event shall be settled for either by the return of equivalent energy or by
payment of the out-of-pocket cost (such cost being as of the delivery point
or points, as provided for in Section 4.01 of this agreement, taking into
account electrical losses incurred from the source or sources of such energy
to said delivery point or points) to the supplying party of generating or
acquiring such energy plus ten per cent of such cost. If equivalent energy
is returned, it shall be returned at times when the load conditions of the
party receiving it are equivalent to the load conditions of such party at
the time the energy for which it is returned was delivered or, if such party
elects to have equivalent energy returned under different conditions, it
shall be returned in such amounts, to be agreed upon by the Operating
Committee, as will compensate for the difference in conditions.
ARTICLE 4
DELIVERY POINTS, METERING
POINTS AND METERING
Delivery Points
4.01 All electric energy delivered under this agreement shall be of
the character commonly known as three-phase sixty-cycle energy, and shall be
delivered at the Interconnection Point, as defined under Section 1.03
hereof, at a nominal voltage of 138,000 volts and at such other points and
voltages as may be agreed upon by the parties hereto.
Metering Points
4.02 Electric Power and energy supplied under this agreement shall be
measured by suitable metering equipment, having appropriate voltage rating,
to be installed, owned and maintained at the metering point or points by the
party in each case, as provided below:
4.021 At the Interconnection Point specified in Section 1.03
above, by 138,000 volt metering equipment to be installed, owned and
maintained by Indianapolis Company; and
4.022 At such other points as may be hereafter agreed upon, such
equipment at each such other metering point to have such voltage rating
and to be installed under such arrangement with respect to ownership
and maintenance thereof as the parties mutually determine.
Metering
4.03 Suitable metering equipment at the metering points as provided in
Section 4.02 above shall include electric meters, potential and current
transformers, and such other appurtenances as shall be necessary to give for
each direction of flow the following quantities: (1) a continuous automatic
graphic record of both kilowatts and kilovars, (2) an automatic record of
the kilowatt-hours for each clock hour, and (3) a continuous integrating
record of the kilowatt-hours.
4.04 Measurements of electric energy for the purpose of effecting
settlements under this agreement shall be made by standard types of electric
meters installed and maintained, unless otherwise provided for in this
agreement, by the owner at the metering points as provided under Section
4.02 above. The timing devices of all meters having such devices shall be
maintained in time synchronism as closely as practicable. The meters shall
be sealed and the seals shall be broken only upon occasions when the meters
are to be tested or adjusted. For the purpose of checking the records of
the metering equipment installed by one of the parties hereto as hereinabove
provided, the other party hereto shall have the right to install check
metering equipment at the aforesaid metering points. Check metering
equipment so installed by one party on the premises of another party, unless
otherwise provided for in this agreement, shall be owned and maintained by
the party installing such equipment. Upon termination of this agreement the
party owning such check metering equipment shall remove it from the premises
of the other party. Authorized representatives of both parties shall have
access at all reasonable hours to the premises where the meters are located
and to the records made by the meters.
4.05 The aforesaid metering equipment shall be tested by the owner at
suitable intervals and its accuracy of registration maintained in accordance
with good practice. On request of either party hereto, a special test may
be made at the expense of the party requesting such special test.
Representatives of both parties shall be afforded opportunity to be present
at all routine or special tests and upon occasions when any readings for
purposes of settlements hereunder are taken from meters not bearing an
automatic record.
4.06 If, at any test of metering equipment an inaccuracy shall be
disclosed exceeding two percent, the account between the parties hereto for
service theretofore delivered shall be adjusted to correct for the
inaccuracy over the shorter of the following two periods: (1) for the
thirty-day period immediately preceding the day of the test or (2) for the
period that such inaccuracy may be determined to have existed. Should the
metering equipment as provided for under Section 4.03 hereof at any time
fail to register, the electric power and energy delivered shall be
determined from the check meters, if installed, or otherwise shall be
determined from the best available data.
ARTICLE 5
RECORDS AND STATEMENTS
Records
5.01 In addition to records of the metering provided for in Article 4
hereof, the parties hereto shall keep in duplicate such other records as may
be needed to afford a clear history of the various deliveries of electric
energy made by one party to the other, and of the clock-hour integrated
demands in kilowatt-hours delivered by one party to the other. In
maintaining such records, the parties shall effect such segregations and
allocations of demands and electric energy delivered into classes
representing the various services and conditions as may be needed in
connection with settlements under this agreement. The originals of all such
records shall be retained by the party keeping the records and the
duplicates shall be delivered monthly to the other party except as the
parties may agree upon a different time interval for such delivery.
Statements
5.02 As promptly as practicable after the end of each calendar month,
the parties hereto shall cause to be prepared a statement setting forth the
electric power and energy transactions between them during such month in
such detail and with such segregations as may be needed for operating
records or for settlements under the provision of this agreement.
ARTICLE 6
BILLINGS AND PAYMENTS
6.01 All bills for amounts owed by one party hereto to the other shall
be due and payable on the fifteenth day of the month next following the
month to which such bills are applicable, or on the tenth day following
receipt of bill, whichever date be later. Interest on unpaid amounts shall
accrue at the rate of six per cent per annum from the date due until the
date upon which payment is made. The term "month" shall mean a calendar
month for the purpose of settlements under this agreement.
ARTICLE 7
OPERATING COMMITTEE
7.01 To coordinate the operation of their respective generating,
transmission and substation facilities, in order that the advantages to be
derived hereunder may be realized by the parties hereto to the fullest
practicable extent, the parties shall establish a committee of authorized
representatives to be known as the Operating Committee. Each of the parties
shall designate in writing delivered to the other party, the person who is
to act as its representative on said committee (and the person or persons
who may serve as alternate whenever such representative is unable to act).
Such representative and alternate or alternates shall each be persons
familiar with the generating, transmission, and substation facilities of the
system of the party by which he has been so designated, and each shall be
fully authorized (1) to cooperate with the other representative (or
alternates) and (2) from time to time as the need arises, subject to the
declared intentions of the parties herein set forth and to the terms hereof
and the terms of any other agreements then in effect between the parties, to
determine and agree upon the following:
7.011 All matters pertaining to the coordination of maintenance of
the generating and transmission facilities of the parties.
7.012 All matters pertaining to the control of time, frequency,
energy flow, kilovar exchange, power factor, voltage, and other similar
matters bearing upon the satisfactory synchronous operation of the
systems of the parties.
7.013 Such other matters not specifically provided for herein upon
which cooperation, coordination, and agreement as to quantity, time,
method, terms and conditions are necessary in order that the operation
of the systems of the parties may be coordinated to the end that
savings will be realized by the parties to the fullest practicable
extent.
7.02 For the purpose of inspection and reading of meters, checking of
records, and all other pertinent matters, said representatives and their
alternates shall have the right of entry to all property of the parties
hereto used in connection with the performance of this agreement.
ARTICLE 8
CONTINUITY OF SERVICE
8.01 Each party hereto shall exercise reasonable care and foresight to
maintain continuity of service as provided under this agreement, but neither
party shall be considered to be in default in respect of any obligation
hereunder if prevented from fulfilling such obligation by reason of
uncontrollable forces. The term "uncontrollable forces" shall be deemed for
the purposes of this agreement to mean earthquake, storm, lightning, flood,
backwater caused by flood, fire, epidemic, accident, failure of facilities,
war, riot, civil disturbances, strike, labor disturbances, restraint by
court or public authority, or other similar or dissimilar causes beyond the
control of the party affected, which causes such party could not have
avoided by exercise of reasonable care. Any party unable to fulfill any
obligation by reason of uncontrollable forces shall remove such disability
with reasonable dispatch.
ARTICLE 9
DURATION OF AGREEMENT
9.01 This agreement shall become effective at the date hereof, subject
to the filing requirements of any other regulatory authority or authorities
having jurisdiction herein and to approval of any such authority, if
required, and shall continue in effect the expiration of a period of ten
consecutive years commencing upon the Interconnection Date, as defined in
this Section 9.01, and thereafter for successive periods of one year unless
and until terminated as provided in Section 9.02 below. The Interconnection
Date shall be the first day of the calendar month next following the day, or
on such day if it should be the first day of a calendar month, upon which
the systems of the parties are connected at the Interconnection Point as
provided for in Article 1 above. As soon as practicable following the
establishment of such date, the parties, as a matter of record, shall
exchange letters setting forth their acceptance thereof as said
Interconnection Date.
9.02 On July 10, 1953, Southern Indiana Company entered into a certain
agreement designated "Inter-Company Power Agreement" with Ohio Valley
Electric Corporation and certain other public utility companies. It is
mutually agreed that if because Southern Indiana Company is or may become a
Sponsor A or a Sponsor B as defined in said Inter-Company Power Agreement
and should a condition arise at any time under which the performance by
Southern Indiana Company of any of its obligations under this agreement
conflict in any manner with the performance by it of any of its obligations
under said Inter-Company Power Agreement, then Southern Indiana Company
shall promptly advise Indianapolis Company in writing of such fact, and
thereafter at any time either Indianapolis Company or Southern Indiana
Company may terminate this agreement by giving at least thirty-days written
notice to that effect to the other.
9.03 Either party upon at least thirty months' prior written notice to
the other may terminate this agreement at the expiration of said initial
period of ten consecutive years or at the expiration of any succeeding
period of one year.
ARTICLE 10
LIABILITY
10.01 Each party hereto shall save and hold the other party hereto free
and harmless from and against liability, loss, damage and expense arising
from or incident to injury or damage to persons or property occasioned by or
in connection with its own facilities or the production or flow of electric
energy by or through such facilities except when such injury or damage is
due to the negligence of such other party.
ARTICLE 11
TAXES
11.01 If at any time during the term hereof there should be levied or
assessed against either of the parties hereto any direct tax by any taxing
authority on the capacity or energy (or both) generated, purchased, sold,
transmitted, interchanged, or exchanged by it, (there being no such tax at
the date hereof) and such direct tax results in increasing the cost to
either or both parties hereto in carrying out the provisions of this
agreement, then such increase shall be made in the charges for capacity or
energy (or both) furnished hereunder as is necessary to make adequate and
equitable allowance for such tax.
ARTICLE 12
NOTICES
12.01 Except as herein otherwise provided, any notice which may be
given to or made upon either party hereto by the other under any of the
provisions of this agreement, shall be in writing unless it is otherwise
specifically provided herein, and shall be treated as duly delivered when
the same is either (a) personally delivered to the Chief Executive Officer
of Indianapolis Company, in the case of a notice to be given Indianapolis
Company, or personally delivered to the Chief Executive Officer of Southern
Indiana Company, in the case of a notice to be given Southern Indiana
Company, or (b) deposited in the United States mail, postage prepaid and
properly addressed to the above parties.
12.02 Any notice, request or demand pertaining to matters of an
operating nature may be delivered, by ordinary mail, messenger, telephone,
telegraph, or orally as may be appropriate, to an Operating Committee
representative and, if oral, shall be confirmed in writing as soon as
practicable thereafter if either party hereto so requests in any particular
instance.
ARTICLE 13
REGULATORY AUTHORITIES
13.01 This agreement is made subject to the jurisdiction of any
regulatory authority or authorities having jurisdiction in the premises and
if any of the terms and conditions hereof are altered or made impossible of
performance by order or rule of any such authority, and the parties hereto
are unable to agree upon a modification of such terms and conditions, then
in such event neither party shall be liable to the other for failure
thereafter to comply with such terms and conditions.
ARTICLE 14
WAIVERS
14.01 Any waiver at any time by either party hereto of its rights with
respect to a default under this agreement, or with respect to any other
matter arising in connection with this agreement, shall not be deemed a
waiver with respect to any subsequent default or matter. Any delay, short
of the statutory period of limitation, in asserting or enforcing any right
under this agreement, shall not be deemed a waiver of such right.
ARTICLE 15
ENTIRE AGREEMENT CONTAINED HEREIN
15.01 This agreement contains the entire agreement between the parties
hereto in respect of the subject matter hereof, and there are no other
understandings or agreements between the parties hereto in respect thereof.
ARTICLE 16
CONSTRUCTION OF AGREEMENT
16.01 This agreement shall be governed by and construed according to
the laws of the State of Indiana.
ARTICLE 17
ASSIGNMENT
17.01 This agreement shall inure to and bind the respective successors
and assigns of the parties hereto, but the assignment hereof by either party
shall not relieve such party, without the written consent of the other
party, of any obligation to supply, or to take and pay for, as the case may
be, the services herein contracted for.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers and their respective corporate
seals to be hereunto affixed as of the date first mentioned above.
INDIANAPOLIS POWER & LIGHT COMPANY
an Indiana corporation.
By /s/ O.T.Fitzwater
O.T. Fitzwater, Chairman of the Board
ATTEST:
/s/ Ralph W. Husted
Ralph W. Husted, Secretary
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
an Indiana corporation.
By /s/ D.W. Vaugh
President
ATTEST:
/s/ L.H. Meyer
, Secretary
<PAGE>
Exhibit I
SERVICE SCHEDULE A
EMERGENCY SERVICE
Under Agreement, dated as of
December 2, 1968 between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement) dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective on the Interconnection Date as defined in Section 9.01 of Article
9 of the Agreement and shall continue in effect until termination of the
Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Subject to the provisions of subsection 2.2 of this Section 2, in
the event of a breakdown or other emergency in or on the system of either
party involving either sources of power or transmission facilities, or both,
impairing or jeopardizing the ability of the party suffering the emergency
to meet the loads of its system, the other party shall deliver to such party
such electric energy as it is requested to deliver; provided, however, that
neither party shall be obligated to deliver such energy which, in its sole
judgment, it cannot deliver without interposing a hazard to or economic
burden upon its operations or without impairing or jeopardizing the other
load requirements of its system; and provided further, that neither party
shall be obligated to deliver electric energy for a period in excess of
forty-eight consecutive hours during any single emergency.
2.2 The parties recognize that the delivery of electric energy as
provided for in subsection 2.1 of this Section 2 is subject to two
conditions which may preclude the delivery of such energy as so provided:
(a) the party requested to deliver electric energy may be suffering an
emergency in or on its own system as described in said subsection 2.1, or
(b) the system of the party of whom such request is made may be delivering
electric energy, under a mutual emergency interchange agreement, to the
system of another interconnected company which is suffering an emergency in
or on its system. Under conditions as cited under (a) above, neither party
shall be considered to be in default hereunder if unable to comply with the
provisions of said subsection 2.1. Under conditions as cited under (b)
above, neither party shall be considered to be in default hereunder if it is
unable to comply with the provisions of said subsection 2.1 provided that
the aforesaid interconnected company has suffered said emergency in or on
its system prior to and within forty-eight hours of that of the other party
hereto and that, if requested by said other party, such delivery of electric
energy to said interconnected company shall be discontinued within forty-
eight hours following the start of such delivery, and a subsequent delivery
shall be made for a full forty-eight hour period to said other party in
accordance with the provisions of said subsection 2.1.
2.3 If at any time the record over a reasonable prior period shows
clearly that either of the parties has failed to deliver energy in
accordance with and subject to the provisions of subsection 2.1 and
subsection 2.2 of this Section 2, either party, by written notice given to
the other party, may call for a joint study by the parties of the reserve
generating capacity in and provided for their respective systems and of
their respective system transmission facilities affecting the supply and
delivery of power and energy under the Agreement. It shall be the purpose
of such study to determine the adequacy or inadequacy of reserve generating
capacity and transmission facilities being provided to meet the requirements
of the parties' respective systems, reflecting obligations under the
Agreement, and, if inadequate, the extent of the burden that one party may
be placing upon the other. If it should be found that one party is placing
an unreasonable burden upon the other, the party causing such burden shall
take such measures as are necessary to remove the burden from the other
party, or the parties shall enter into such arrangements as shall provide
for equitable compensation to the party being burdened.
SECTION 3 - COMPENSATION
3.1 Electric energy delivered under Section 2 above shall be settled
for either by the return of equivalent energy or, at the option of the party
that supplied such energy, by payment of the out-of-pocket cost (such cost
being as of the delivery point or points, as provided in Section 4.01 of
Article 4 of the Agreement, taking into account electrical losses incurred
from the source or sources of such energy to said delivery point or points)
to the supplying party of generating or supplying such energy plus ten
percent of such cost. If equivalent energy is returned, it shall be
returned at times when the load conditions of the party receiving it are
equivalent to the load conditions of such party at the time the energy for
which it is returned was delivered or, if such party elects to have
equivalent energy returned under different conditions, it shall be returned
in such amounts, to be agreed upon by the Operating Committee, as will
compensate for the difference in conditions.
<PAGE>
Exhibit II
SERVICE SCHEDULE B
ENERGY TRANSFER
Under Agreement, dated as of
December 2, 1968 between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement) dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective on the Interconnection Date as defined in Section 9.01 of Article
9 of the Agreement and shall continue in effect until termination of the
Agreement.
SECTION 2 - TRANSFER ARRANGEMENT
2.1 In carrying out the interconnected operation of their respective
systems as provided for under the Agreement, energy being received by a
portion of one party's system from another portion of its system or from the
system of another interconnected company, or energy being delivered by a
portion of one party's system to another portion of its system or to the
system of another interconnected company, may flow over the transmission
facilities of the other party as a natural result of the physical and
electrical characteristics of the interconnected network of transmission
lines of which the transmission systems of the parties are a part. Such
flow of energy may occur during periods when conditions of system operation
are normal or may occur during periods of emergency caused by the failure of
either sources of power or transmission facilities, or both. In respect to
such flow of energy (hereinafter called "energy transfer") the parties agree
as follows; viz.:
2.11 Such energy transfer over their respective transmission
facilities shall be permitted when such transfer occurs; subject,
however, to the understanding that such energy transfer shall not be of
such magnitude or duration as to affect adversely or jeopardize the
ability of the party over whose system such energy transfer occurs to
render proper service to its customers, and to render or accept service
to or from companies with which it now has or at any time hereafter it
may have contractual arrangements to furnish, take, or interchange
power or energy, or both.
2.12 The parties recognize that in carrying out the provisions of
this Service Schedule, the above described energy transfer, either
during periods when conditions of system operation are normal or during
periods of emergency, or both, may eventually require the installation
of additional transmission facilities in order that such energy
transfer may be properly controlled to the end that the ability of the
party over whose system such energy transfer occurs to meet its own
requirements, as described under 2.11 above, is not affected adversely
or jeopardized. In the event the need for such additional transmission
facilities becomes apparent to either of the parties during the
duration of this Service Schedule, upon written notice given by either
party to the other party and as soon as practicable following such
notice, the parties shall jointly re-examine conditions relating to
energy transfer. In such re-examination, if called for, the parties
shall agree upon such additional transmission facilities as may be
required to be installed, if any, and upon an equitable basis for
bearing the cost of installing, maintaining and operating such
facilities, if installed.
SECTION 3 - POWER AND ENERGY ACCOUNTING
3.1 The parties recognize that energy transfer as described under
Section 2 of this Service Schedule, except for such amounts of electrical
losses as may be incurred because of such energy transfer, is the
simultaneous acceptance and delivery of like amounts of power and energy by
and from the system of the party over whose system such energy transfer
occurs. Power and energy associated with energy transfer, including
electrical losses associated therewith, shall be accounted for each
clock-hour as provided for under Article 5 of the Agreement. Proper
consideration to such electrical losses will be in accordance with the
manner agreed upon by the Operating Committee. It is understood by the
parties, however, that such electrical losses resulting from energy
transfer, to be taken as losses over and above the losses prevailing under
basic conditions agreed upon by the parties, shall be supplied
simultaneously by the party for whom such energy transfer is being made.
The parties have agreed that initially such basic conditions will be
established as those that exist when the scheduled net delivery between the
systems of the parties, and between their respective systems and the systems
of other interconnected companies, is zero kilowatts. It is further
understood that, from time to time, conditions may require the establishment
of different basic conditions for such purpose. Either party by written
notice given to the other party may call for a prompt re-examination and
reconsideration of matters pertinent to the establishment of said basic
conditions, whenever such re-examination appears to be warranted, and the
parties will thereupon agree to effect such changes in the basic conditions,
if any, that will equitably compensate the parties for such losses. A
statement to be prepared by the parties at the end of each calendar month
shall include in detail the amounts of energy delivered and received by the
parties that are associated with energy transfer and the amounts of
electrical losses associated therewith.
<PAGE>
Exhibit III
SERVICE SCHEDULE C
INTERCHANGE POWER
Under Agreement, dated as of
December 2, 1968 between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement) dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company, Inc. (Southern Indiana Company) shall
become effective on the Interconnection Date as defined in Section 9.01 of
Article 9 of the Agreement and shall continue in effect until termination of
the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 It is recognized that from time to time each of the parties may
have electric energy (herein called Economy Energy) available from surplus
capacity either on its own system or from sources outside its own system, or
both, and that Economy Energy could be supplied to the other party at a cost
that would result in operating savings to such other party. Such operating
savings would result from the displacement of electric energy that otherwise
would be supplied from capacity either on such other party's system or from
sources outside its own system, or both. To promote the economy of electric
power supply and to achieve efficient utilization of production capacity,
either party, whenever it, in its own judgment determines Economy Energy is
available, may, but shall not be obligated to, offer Economy Energy to the
other party. Promptly upon receipt of any such offer said other party shall
notify the offering party of the extent to which it desires to use such
Economy Energy, and schedules providing the periods and extent of use shall
be agreed upon.
Compensation - Economy Energy
2.2 Economy Energy supplied hereunder shall be considered as
displacing electric energy that otherwise would have been generated by the
receiving party at its own steam-electric generating stations or any
electric energy from third parties mutually agreed to be subject to
displacement hereunder. Economy Energy shall be settled for at rates which
shall be predicated upon the principle that savings in operating costs to
the systems of the parties resulting from the use of Economy Energy shall be
divided between the parties as equally as is practicable. Prior to any
transaction involving the delivery and receipt of Economy Energy, authorized
representatives of the parties shall determine and agree upon the
compensation applicable to such transaction. Compensation so agreed upon
shall not be subject to later review or adjustment.
Non-Displacement Energy
2.3 It is further recognized that from time to time occasions will
arise when the effecting of transactions as provided in subsection 2.1 next
above will be impracticable, but at the same time one of the parties may
have electric energy (herein called Non-Displacement Energy) which it is
willing to make available from surplus capacity either on its own system or
from sources outside its own system, or both, that can be utilized
advantageously for short intervals by the other party. It shall be the
responsibility of the party desiring the receipt of Non-Displacement Energy
to initiate the receipt and delivery of such energy. The party desiring
such receipt of energy shall inform the other party of the extent to which
it desires to use Non-Displacement Energy, and, whenever in its sole
judgment such other party determines that it has Non-Displacement Energy
available, schedules providing the periods and extent of use shall be
mutually agreed upon. Neither party shall be obligated to make any
Non-Displacement Energy available to the other.
Compensation - Non-Displacement Energy
2.4 Non-Displacement Energy delivered hereunder shall be settled for
either by the return of equivalent energy or, at the option of the party
that supplied such energy, by payment of the out-of-pocket cost (such cost
being as of the delivery point or points, as provided for in Section 4.01 of
Article 4 of the Agreement, taking into account electrical losses incurred
from the source or sources of such energy to said delivery point or points)
to the supplying party of generating or supplying such energy plus ten per
cent of such cost. If equivalent energy is returned, it shall be returned
at times when the load conditions of the party receiving it are equivalent
to the load conditions of such party at the time the energy for which it is
returned was delivered or, if such party elects to have equivalent energy
returned under different conditions, it shall be returned in such amounts,
to be agreed upon by the Operating Committee, as will compensate for the
difference in conditions.
<PAGE>
Exhibit IV
SERVICE SCHEDULE D
SHORT TERM POWER
Under Agreement, dated as of
December 2, 1968 between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement), dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective on the Interconnection Date as defined in Section 9.01 of Article
9 of the Agreement and shall continue in effect until termination of the
Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of not less than one calendar week if the reservation begins with
Sunday or Monday or for the balance of the calendar week if the reservation
begins with any day subsequent to Monday, such electric power (herein called
Short Term Power) as the other party may at such time have and is willing to
make available as Short Term Power. The party asked to supply Short Term
Power shall be the sole judge as to the amounts and periods that it has
electric power available that may be reserved by the other party as Short
Term Power:
2.11 To reserve Short Term Power, the party desiring such power
shall specify in its notice to the other party the number of kilowatts
and the period for which it desires to so reserve such power and the
desired schedule of delivery of the power so reserved. The party
receiving such notice, in a prompt acknowledgement, shall signify the
extent of its ability and willingness to comply with the provision of
such notice. Any notice or any acknowledgement of such notice that may
be given orally initially, if requested by either party, shall be
confirmed in writing and such confirmation shall be forwarded not later
than the third day, excluding a Saturday, Sunday and holidays,
following the day such oral notice is given.
2.12 During the period that Short Term Power has been reserved as
above provided, the party having agreed to supply such power shall
deliver electric energy (herein called Short Term Energy) to the other
party at the delivery point or points, as provided for in Section 4.01
of Article 4 of the Agreement, upon call and in amounts up to the
number of kilowatts reserved. However, in the event conditions arise
during such period which could not have been reasonably foreseen at the
time said power was reserved and such conditions would cause the
delivery of Short Term Energy to be burdensome to the supplying party,
said party shall have the right to request the other party to reduce
its take of such energy to any amount specified and for any portion of
such period. The party so requested shall promptly comply with the
request of the other party.
2.13 The Short Term Power billing demand for any period shall be
taken as equal to the number of kilowatts reserved for such period as
Short Term Power.
SECTION 3 - COMPENSATION
3.1 Payments for the supply of Short Term Power and Short Term Energy
shall be predicated upon the following rates:
3.11 Demand Charge
For the billing demand for each week at the rate of $0.30 per
kilowatt for such week or if the period is less than a week at the rate
of $0.06 per kilowatt per day. In the event the amount of Short Term
Energy taken is reduced upon request of the supplying party, the demand
charge for the period during which such reduction for each day during
which any reduction is in effect.
3.12 Energy Charge
For the kilowatt-hours of Short Term Energy taken, at a rate per
kilowatt-hour equal to the out-of-pocket cost (such cost being as of
the delivery point or points, as provided for in Section 4.01 of
Article 4 of the Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said delivery
point or points) to the supplying party of generating or supplying such
energy plus ten per cent of such cost.
<PAGE>
Exhibit V
SERVICE SCHEDULE E
COORDINATION OF SCHEDULED MAINTENANCE
OF GENERATING FACILITIES
Under Agreement, dated as of
December 2, 1968 between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement), dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective on the Interconnection Date as defined in Section 9.01 of Article
9 of the Agreement and shall continue in effect until termination of the
Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 In the furtherance of the benefits to be realized by the parties,
by coordinating to the extent practicable the scheduled maintenance, repair,
and overhaul of generating facilities in their respective systems, the
parties shall arrange for, deliver, and take electric power and energy in
amounts and under conditions as follows; viz.:
2.11 Either party, to the extent that it has capacity available
and is willing to do so, may supply to the other electric energy in an
amount up to, but not limited to, 25,000 kilowatts to provide for and
coordinate the scheduled maintenance, repair, and overhauling of
generating facilities in the system of the other party. The party
desiring a supply of maintenance energy shall initiate the delivery and
receipt thereof by informing the other party of such desire. A
schedule setting forth the intervals and extent of the use to be made
of maintenance energy shall be agreed upon by both parties. For the
purposes of this Service Schedule the full twelve months period
commencing with the January 1st after the effective date of this
Service Schedule shall be the first Maintenance Period and each
succeeding full twelve months period that this Service Schedule is in
effect shall be a Maintenance Period. Maintenance energy shall be
settled for by the return of maintenance energy equivalent to that
supplied, except that if, at the end of a Maintenance Period there is a
balance of maintenance energy owed by one party to the other, the party
to whom such balance is owed may, at its option, require that the owing
party pay 110% of the out-of-pocket cost to the supplying party of
supplying such balance. Such out-of-pocket cost computations shall be
based on the assumption the kilowatt-hour balance being settled for
consists of the kilowatt-hours most recently delivered to the owing
party under this schedule. Equivalent energy shall be energy returned
at times when the load conditions of the party receiving it are
substantially equivalent to the load conditions of such party at the
time the electric energy for which it is returned was delivered or, if
such party elects to have energy returned under different conditions,
it shall be returned in such amounts to be agreed upon by the parties
hereto, as will compensate for the difference in conditions.
2.12 The Operating Committee shall determine and agree upon the
dates of the intervals referred to under subsection 2.11 above during
which Indianapolis Company shall deliver any such energy desired by or
returnable to Southern Indiana Company and, conversely, the dates of
such intervals during which Southern Indiana Company shall deliver any
such energy desired by or returnable to Indianapolis Company. Subject
to the understanding hereinbelow cited, such intervals shall each
consist of single periods of not less than seven consecutive calendar
days, and the receiving party's right to call for and take not more
than the aforesaid quantities agreed upon during any Maintenance Period
shall be restricted to not more than eight such intervals so agreed
upon by the Operating Committee during such Maintenance Period. It is
understood that during any Maintenance Period each party shall have a
total of sixty days during which it shall have the right to call for
and take not more than said quantities agreed upon from the other under
this Service Schedule.
2.13 On the day next preceding the first day of an interval as
described in 2.12 above and on each day of such interval excepting the
last day, at a time determined to be practicable by the Operating
Committee, the receiving party shall furnish the other a load schedule
for the next calendar day, or for such other twenty-four hour period or
periods as may be agreed upon by the Operating Committee. Such load
schedules shall show for each clock hour the quantity of energy that
the receiving party expects to take from the other at the delivery
point or points, as provided for in Section 4.01 of the Agreement.
SECTION 3 - MODIFICATION
3.1 Either party, by written notice given to the other party not less
than ninety days prior to the end of the first or any subsequent Maintenance
Period, may call for a reconsideration of the terms and conditions of this
Service Schedule, provided that no subsequent reconsideration shall be made
earlier than one year following any previous reconsideration. If such
reconsideration is called for, there shall be taken into account any changed
conditions, any results from the application of said terms and conditions
not foreseen or reasonably foreseeable as of the date of this Service
Schedule or as of the day of conclusion of the next previous
reconsideration, if any, and any other factors which might cause said terms
and conditions to result in any inequitable division of the benefits of
interconnected operation or in an inadequate realization of such benefits.
Any modification in terms and conditions agreed to between the parties
following such reconsideration shall become effective at the beginning of
the Maintenance Period next following the aforesaid ninety-day notice
period.
<PAGE>
Modification No. 1
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of February 1, 1971
<PAGE>
THIS AGREEMENT, made and entered into as of the first day of February,
1971, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana Corporation, and SOUTHERN INDIANA GAS AND ELECTRIC COMPANY (Southern
Indiana Company), also an Indiana corporation;
WITNESSETH,
WHEREAS, Indianapolis Company and Southern Indiana Company entered into
an Interconnection Agreement, dated December 2, 1968, (said Interconnection
Agreement being herein called the 1968 Agreement); and
WHEREAS, the parties desire to modify the 1968 Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
SECTION 1. Subsection 3.11 of Service Schedule D of the 1968 Agreement
is hereby modified to read:
"3.11 Demand Charge
For the billing demand for each week, at the rate of $0.40
per kilowatt for such week, or if the period is less than a week at
the rate of 1/6 of the aforesaid weekly demand charge per day. In
the event the amount of Short Term Energy taken is reduced upon
request of the supplying party, the demand charge for the period
during which such reduction is made shall be reduced by one-sixth
(1/6) of the aforesaid weekly demand charge per kilowatt of
reduction for each day (other than any Sunday) during which any
reduction is in effect."
SECTION 2. This Modification No. 1 shall be effective from the date
hereinabove first written to the expiration of Service Schedule D of the
1968 Agreement.
SECTION 3. Except as hereinabove modified and amended, all the terms
and conditions of the 1968 Agreement shall remain in full force and effect.
SECTION 4. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 5. This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ O.T. Fitzwater
O.T. Fitzwater, Chairman of the Board
ATTEST:
/s/ Ralph W. Husted
Ralph W. Husted, Secretary
<PAGE>
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ D.W. Vaughn
D.W. Vaugh, President
ATTEST:
/s/ Leonard H. Meyer
Leonard H. Meyer, Secretary
<PAGE>
Modification No. 2
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968
As Modified February 1, 1971
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of October 1, 1975
<PAGE>
THIS MODIFICATION NO. 2, made and entered into as of the first day of
October, 1975, between Indianapolis Power & Light Company (Indianapolis
Company), an Indiana Corporation, and Southern Indiana Gas & Electric
Company (Southern Indiana Company), also an Indiana Corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Southern Indiana Company have
heretofore entered into an interconnection agreement dated as of December 2,
1968 and a Modification No. 1 thereto dated as of February 1, 1971 (said
interconnection agreement as so modified being herein called the 1968
Agreement); and,
WHEREAS, the parties desire to further modify the 1968 Agreement, as
hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties agree as follows:
SECTION 1. On the earliest date this Modification can become effective
under the applicable rules, regulations or orders of the Federal Power
Commission, Subsection 3.11 of Service Schedule D - Short Term Power of the
1968 Agreement is hereby modified to read:
"3.11 Demand Charge
For the billing demand for each week, at the rate of $0.45
per kilowatt for such week, or if the period is less than a week,
at the rate of $0.075 per day. In the event the amount of Short
Term Energy taken is reduced upon request of the supplying party,
the demand charge for the period during which such reduction is
made shall be reduced by $0.075 for each day (other than any
Sunday) during which any such reduction is in effect."
SECTION 2. Nothing in the 1968 Agreement or in this Modification No. 2
shall require a party hereto to purchase power or energy from a third party
and resell it to another party hereto at a price less than the total cost of
supplying such purchased power or energy.
SECTION 3. Except as hereinabove modified, all the terms and
conditions of the 1968 Agreement shall remain in full force and effect.
SECTION 4. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 5. This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane T. Todd
Zane G. Todd, President
ATTEST:
/s/ Marcus E. Woods
Marcus E. Woods, Secretary
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ D.W. Vaughn
, President
ATTEST:
/s/ Leonard H. Meyer
, Secretary
<PAGE>
Modification No. 3
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968
As Modified February 1, 1971 and
As Modified October 1, 1975
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of March 1, 1977
<PAGE>
THIS MODIFICATION NO. 3, made and entered into as of the first day of
March, 1977, between Indianapolis Power & Light Company (Indianapolis
Company), an Indiana Corporation, and Southern Indiana Gas & Electric
Company (Southern Indiana Company), also an Indiana Corporation;
WITNESSETH,
WHEREAS, Indianapolis Company and Southern Indiana Company have
heretofore entered into an interconnection agreement dated as of December 2,
1968 and a Modification No. 1 thereto dated as of February 1, 1971 and a
Modification No. 2 thereto dated as of October 1, 1975 (said interconnection
agreement as so modified being herein called the 1968 Agreement); and
WHEREAS, the parties desire to further modify the 1968 Agreement as
hereinafter set forth, the parties hereto agree as follows:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties agree as follows:
SECTION 1. Service Schedule D - Short Term Power as set forth in the
1968 Agreement is hereby cancelled and Service Schedule D - Short Term Power
attached to this Modification No. 3, made a part hereof and marked "Appendix
I" is substituted in its entirety therefor. A new Service Schedule F -
Limited Term Power (Firm) is hereby agreed upon and is attached hereto, made
a part hereof and marked "Appendix II".
SECTION 2. Section 2.03 of Article 2 of the 1968 Agreement is hereby
modified to read:
"2.03 The respective service schedules designated
1. Service Schedule A - Emergency Service
2. Service Schedule B - Energy Transfer
3. Service Schedule C - Interchange Power
4. Service Schedule D - Short Term Power
5. Service Schedule E - Coordination of Scheduled
Maintenance of Generation
Facilities
6. Service Schedule F - Limited Term Power (Firm)
which have been agreed upon between the parties hereto, are
identified as Exhibits I, II, III, IV, V and VI, respectively, to
this agreement, are attached hereto and are made a part hereof the
same as if incorporated herein."
SECTION 3. Nothing in the 1968 Agreement or in this Modification No. 3
shall require a party hereto to purchase power or energy from a third party
and resell it to another party hereto at a price less than the total cost of
supplying such purchased power or energy.
SECTION 4. Except as hereinbefore modified, all the terms and
conditions of the 1968 Agreement shall remain in full force and effect.
SECTION 5. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 6. This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane T. Todd
Zane G. Todd, Chairman of the Board
and President
ATTEST:
/s/ Marcus E. Woods
Marcus E. Woods, Secretary and
General Counsel
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ D.W. Vaughn
, Chairman
ATTEST:
/s/ Leonard H. Meyer
, Secretary
<PAGE>
Appendix I to Modification No. 3
Exhibit IV
SERVICE SCHEDULE D
SHORT TERM POWER
Under Agreement, dated as of
December 2, 1968, as modified, between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement), dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective March 1, 1977 or at such later date as is practicable under
applicable regulations or orders of the Federal Power Commission, and shall
continue in effect until termination of the Agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of one or more calendar weeks or for periods of less than one week,
such electric power (herein called Short Term Power) as the other party may
at such time have and is willing to make available as Short Term Power. The
party asked to supply Short Term Power shall be the sole judge as to the
amounts and periods that it has electric power available that may be
reserved by the other party as Short Term Power:
2.11 To reserve Short Term Power, the party desiring such power
shall specify in its notice to the other party the number of kilowatts
and the period for which it desires to so reserve such power and the
desired schedule of delivery of the power so reserved. The party
receiving such notice, in a prompt acknowledgement, shall signify the
extent of its ability and willingness to comply with the provisions of
such notice. Any notice or any acknowledgement of such notice that may
be given orally initially, if requested by either party, shall be
confirmed in writing and such confirmation shall be forwarded not later
than the third day, excluding a Saturday, Sunday and holidays,
following the day such oral notice is given.
2.12 During the period that Short Term Power has been reserved as
above provided, the party having agreed to supply such power shall
deliver electric energy (herein called Short Term Energy) to the other
party at the delivery point or points set forth in Section 4.01 of
Article 4 of the Agreement, upon call and in amounts up to the number
of kilowatts reserved. However, in the event conditions arise during
such period which could not have been reasonably foreseen at the time
said power was reserved and such conditions would cause the delivery of
Short Term Energy to be burdensome to the supplying party, said party
shall have the right to request the other party to reduce its take of
such energy to any amount specified and for any portion of such period.
The party so requested shall promptly comply with the request of the
other party.
2.13 The Short Term Power billing demand for any period shall be
taken as equal to the number of kilowatts reserved for such period as
Short Term Power.
SECTION 3 - COMPENSATION
3.1 Payments for the supply of Short Term Power and Short Term Energy
shall be predicated upon the following rates:
3.11 Demand Charge
For the billing demand for each week at the rate of $0.55 per
kilowatt for such week or if the period is less than a calendar week,
at the rate of $0.095 per kilowatt per day. In the event the amount of
Short Term Energy taken is reduced upon the request of the supplying
party, the demand charge for the period during which such reduction is
made shall be reduced $0.095 per kilowatt of reduction for each day
during which any reduction is in effect. However, such reduction shall
not exceed $0.55 per kilowatt for a calendar week.
3.12 Energy Charge
For the kilowatt-hours of Short Term Energy taken, at a rate per
kilowatt-hour equal to the out-of-pocket cost (such cost being as of
the delivery point or points set forth in Section 4.01 of Article 4 of
the Agreement, taking into account electrical losses incurred from the
source or sources of such energy to said delivery point or points) to
the supplying party of generating or supplying such energy plus ten per
cent of such cost.
<PAGE>
Appendix II to Modification No. 3
Exhibit VI
SERVICE SCHEDULE F
LIMITED TERM POWER (FIRM)
Under Agreement, dated as of
December 2, 1968, as modified, between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement), dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective March 1, 1977 or at such later date as is practicable under
applicable regulations or orders of the Federal Power Commission, and shall
continue in effect until termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either Party by giving the other party notice may reserve for
periods of not less than one month or more than twelve months, such electric
power (herein called Limited Term Power (Firm)) as the other party may be
willing to make available as Limited Term Power (Firm). The party asked to
supply Limited Term Power (Firm) shall be the sole judge as to the amounts
and periods that it has electric power available that may be reserved by the
other party as Limited Term Power (Firm).
2.11 To reserve Limited Term Power (Firm), the party desiring such
power shall specify in its notice to the other party the number of
kilowatts and the period for which it desires to so reserve such power.
The party receiving such notice shall signify the extent of its ability
and willingness to comply with the provisions of such notice. Any
notice or any acknowledgement of such notice that initially may be
given orally shall be confirmed thereafter in writing.
2.12 During each period that Limited Term Power (Firm) has been
reserved as above provided, the party having agreed to supply such
power shall deliver upon call electric energy (herein called Limited
Term Energy (Firm)) to the other party at the delivery point or points
set forth in Section 4.01 of Article 4 of the Agreement in any amount
up to and including the number of kilowatts reserved. However, in the
event conditions arise during such period which could not have been
reasonably foreseen at the time said power was reserved and such
conditions would cause the delivery of Limited Term Energy (Firm) to be
burdensome to the supplying party, the supplying party may reduce or
interrupt the delivery of such energy to preserve the integrity of, or
to prevent or limit any instability on, its system.
2.13 The Limited Term Power (Firm) billing demand for any period shall
be taken as equal to the number of kilowatts reserved as Limited Term
Power (Firm) for such period.
SECTION 3 - COMPENSATION
3.1 Payments for the supply of Limited Term Power (Firm) and Limited
Term Energy (Firm) shall be predicated on the following rates:
3.11 Demand Charge
For any month that Limited Term Power (Firm) is reserved, $3.00 per
kilowatt reserved. However, in the event the Limited Term Power (Firm)
reserved is reduced upon the request of the supplying party, the demand
charge for the period during which such reduction is made shall be
reduced $0.10 per kilowatt of reduction for each day during which any
reduction is in effect. However, such reduction shall not exceed $3.00
per kilowatt month.
3.12 Energy Charge
For the kilowatt-hours of Limited Term Power (Firm) taken, at a
rate per kilowatt-hour equal to the out-of-pocket cost (such cost being
as of the delivery point or points set forth in Section 4.01 of Article
4 of the Agreement, taking into account electrical losses incurred from
the source or sources of such energy to said delivery point or points)
of the supplying party in generating or supplying such energy, plus ten
percent of such cost.
<PAGE>
Modification No. 4
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968
As Modified February 1, 1971
As Modified October 1, 1975 and
As Modified March 1, 1977
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of November 1, 1977
<PAGE>
THIS MODIFICATION NO. 4, made and entered into as of the first day of
November, 1977, between Indianapolis Power & Light Company (Indianapolis
Company), an Indiana Corporation, and Southern Indiana Gas & Electric
Company (Southern Indiana Company), also an Indiana Corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Southern Indiana Company have
heretofore entered into an interconnection agreement dated as of December 2,
1968 and a Modification No. 1 thereto dated as of February 1, 1971 and a
Modification No. 2 thereto dated as of October 1, 1975 and a Modification
No. 3 thereto dated as of March 1, 1977 (said interconnection agreement as
so modified being herein called the 1968 Agreement); and
WHEREAS, the parties desire to further modify the 1968 Agreement as
hereinafter set forth, the parties hereto agree as follows:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties agree as follows:
SECTION 1. Subsection 3.11 of Section 3 of Service Schedule D - Short
Term Power of the 1968 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.55 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.60 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.095 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.10.
SECTION 2. Subsection 3.11 of Section 3 of Service Schedule F -
Limited Term Power (Firm) of the 1968 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $3.00 wherever it appears therein
and by the substitution therefor of the dollar quantity $3.25.
SECTION 3. Nothing in the 1968 Agreement or in this Modification No. 4
shall require a party hereto to purchase power or energy from a third party
and resell it to another party hereto at a price less than total cost of
supplying such purchased power or energy.
SECTION 4. Except as hereinbefore modified, all the terms and
conditions of the 1968 Agreement shall remain in full force and effect.
SECTION 5. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 6. This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane T. Todd
Zane G. Todd, Chairman of the Board
and President
ATTEST:
/s/ Marcus E. Woods
Marcus E. Woods, Secretary and
General Counsel
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ D.W. Vaughn
, Chairman
ATTEST:
/s/ Leonard H. Meyer
, Secretary
<PAGE>
Modification No. 5
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968 and
Modified as of February 1, 1971,
October 1, 1975,
March 1, 1977 and
November 1, 1977
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of May 1, 1979
<PAGE>
THIS MODIFICATION NO. 5, made and entered into as of the first day of
May, 1979, between Indianapolis Power & Light Company (Indianapolis
Company), an Indiana Corporation, and Southern Indiana Gas & Electric
Company (Southern Indiana Company), also an Indiana Corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Southern Indiana Company have
heretofore entered into an interconnection agreement dated as of December 2,
1968 and Modification No. 1 thereto dated as of February 1, 1971,
Modification No. 2 thereto dated as of October 1, 1975, Modification No. 3
thereto dated as of March 1, 1977 and Modification No. 4 thereto dated as of
November 1, 1977 (said interconnection agreement as so modified being herein
called the 1968 Agreement); and,
WHEREAS, the parties desire to further modify the 1968 Agreement as
hereinafter set forth, the parties hereto agree as follows:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
SECTION 1. Subsection 3.11 of Section 3 of Service Schedule D - Short
Term Power of the 1968 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.60 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.70 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.10 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.12.
Section 2. Subsection 3.11 of Section 3 of Service Schedule F -
Limited Term Power (Firm) of the 1968 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $3.25 wherever it appears therein
and by the substitution therefor of the dollar quantity $3.75 and is also
hereby modified by the deletion therefrom of the dollar quantity $0.10
wherever it appears therein and by the substitution therefor of the dollar
quantity $0.125.
SECTION 3. Nothing in the 1968 Agreement or in this Modification No. 5
shall require either party hereto to purchase power or energy from a third
party and resell it to the other party hereto at a price less than the total
cost of supplying such purchased power or energy.
SECTION 4. Except as hereinbefore modified, all the terms and
conditions of the 1968 Agreement shall remain in full force and effect.
SECTION 5. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 6. This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane T. Todd
Zane G. Todd, Chairman of the Board
and President
ATTEST:
/s/ Marcus E. Woods
Marcus E. Woods, Secretary
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ D.W. Vaughn
, Chairman
ATTEST:
/s/ Leonard H. Meyer
, Secretary
<PAGE>
Modification No. 6
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968 and
Modified as of February 1, 1971,
October 1, 1975,
March 1, 1977,
November 1, 1977 and
May 1, 1979
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of June 1, 1980
<PAGE>
THIS MODIFICATION NO. 6, made and entered into as of the first day of
June, 1980, between Indianapolis Power & Light Company (Indianapolis
Company), an Indiana Corporation, and Southern Indiana Gas & Electric
Company (Southern Indiana Company), also an Indiana Corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Southern Indiana Company have
heretofore entered into an interconnection agreement dated as of December 2,
1968 and Modification No. 1 thereto dated as of February 1, 1971,
Modification No. 2 thereto dated as of October 1, 1975, Modification No. 3
thereto dated as of March 1, 1977 and Modification No. 4 thereto dated as of
November 1, 1977 and Modification No. 5 thereto dated as of May 1, 1979
(said interconnection agreement as so modified being herein called the 1968
Agreement); and,
WHEREAS, the parties desire to further modify the 1968 Agreement as
hereinafter set forth, the parties hereto agree as follows:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
SECTION 1. Service Schedule D - Short Term Power as set forth in the
1968 Agreement and as modified is hereby cancelled and Service Schedule D -
Short Term Power attached to this Modification No. 6, made a part hereof and
marked "Appendix I" is substituted in its entirety therefor.
SECTION 2. Service Schedule F - Limited Term Power (Firm) as set forth
in the 1968 Agreement and as modified is hereby cancelled and Service
Schedule F - Limited Term (Firm) attached to this Modification No. 6, made a
part hereof and marked "Appendix II" is substituted in its entirety
therefor.
SECTION 3. Nothing in the 1968 Agreement or in this Modification No. 6
shall require either party hereto to purchase power or energy from a third
party and resell it to the other party hereto at a price less than the total
cost of supplying such purchased power or energy.
SECTION 4. Except as hereinbefore modified, all the terms and
conditions of the 1968 Agreement shall remain in full force and effect.
SECTION 5. This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.
SECTION 6. This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Zane T. Todd
Zane G. Todd, Chairman of the Board
and President
ATTEST:
/s/ Marcus E. Woods
Marcus E. Woods, Secretary
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ D.W. Vaughn
, President
ATTEST:
/s/ Leonard H. Meyer
, Secretary
<PAGE>
Appendix I to Modification No. 6
Exhibit IV
SERVICE SCHEDULE D
SHORT TERM POWER
Under Agreement, dated as of
December 2, 1968, as modified, between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement), dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective June 1, 1980 or at such later date as is practicable under
applicable regulations or orders of the Federal Power Commission, and shall
continue in effect until termination of the Agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of one or more calendar weeks or for periods of less than one week,
such electric power (herein called Short Term Power) as the other party may
at such time have and is willing to make available as Short Term Power. The
party asked to supply Short Term Power shall be the sole judge as to the
amounts and periods that it has electric power available that may be
reserved by the other party as Short Term Power:
2.11 To reserve Short Term Power, the party desiring such power
shall specify in its notice to the other party the number of kilowatts
and the period for which it desires to so reserve such power and the
desired schedule of delivery of the power so reserved. The party
receiving such notice, in a prompt acknowledgement, shall signify the
extent of its ability and willingness to comply with the provisions of
such notice. Any notice or any acknowledgement of such notice that may
be given orally initially, if requested by either party, shall be
confirmed in writing and such confirmation shall be forwarded not later
than the third day, excluding a Saturday, Sunday, and holidays,
following the day such oral notice is given.
2.12 During the period that Short Term Power has been reserved as
above provided, the party having agreed to supply such power shall
deliver electric energy (herein called Short Term Energy) to the other
party at the delivery point or points set forth in Section 4.01 of
Article 4 of the Agreement, upon call and in amounts up to the number
of kilowatts reserved. However, in the event conditions arise during
such period which could not have been reasonably foreseen at the time
said power was reserved and such conditions would cause the delivery of
Short Term Energy to be burdensome to the supplying party, said party
shall have the right to request the other party to reduce its take of
such energy to any amount specified and for any portion of such period.
The party so requested shall promptly comply with the request of the
other party.
2.13 The Short Term Power billing demand for any period shall be
taken as equal to the number of kilowatts reserved for such period as
Short Term Power.
SECTION 3 - COMPENSATION
3.1 Payments for the supply of Short Term Power and Short Term Energy
shall be predicated upon the following rates:
3.11 Demand Charge
For the billing demand for each calendar week at the rate of
$0.85 per kilowatt for such week or if the period is less than a
calendar week, at the rate of $0.14 per kilowatt per day. In the event
the amount of Short Term Energy taken is reduced upon the request of
the supplying party, the demand charge for the period during which such
reduction is made shall be reduced $0.14 per kilowatt of reduction for
each day during which any reduction is in effect. However, such
reduction shall not exceed $0.85 per kilowatt for a calendar week.
3.12 Energy Charge
For the kilowatt-hours of Short Term Energy taken, at a rate per
kilowatt-hour equal to the out-of-pocket cost (such cost being as of
the delivery point or points set forth in Section 4.01 of Article 4 of
the Agreement, taking into account electrical losses incurred from the
source or sources of such energy to said delivery point or points) to
the supplying party of generating or supplying such energy plus ten per
cent of such cost.
<PAGE>
Appendix II to Modification No. 6
Exhibit VI
SERVICE SCHEDULE F
LIMITED TERM POWER (FIRM)
Under Agreement, dated as of
December 2, 1968, as modified, between
Indianapolis Power & Light Company and
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under agreement (referred to
in this Schedule as the Agreement), dated as of December 2, 1968, between
Indianapolis Power & Light Company (Indianapolis Company) and Southern
Indiana Gas and Electric Company (Southern Indiana Company) shall become
effective June 1, 1980 or at such later date as is practicable under
applicable regulations or orders of the Federal Energy Regulatory
Commission, and shall continue in effect until termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of not less than one month or more than twelve months, such electric
power (herein called Limited Term Power (Firm)) as the other party may be
willing to make available as Limited Term Power (Firm). The party asked to
supply Limited Term Power (Firm) shall be the sole judge as to the amounts
and periods that it has electric power available that may be reserved by the
other party as Limited Term Power (Firm).
2.11 To reserve Limited Term Power (Firm), the party desiring such
power shall specify in its notice to the other party the number of
kilowatts and the period for which it desires to so reserve such power.
The party receiving such notice shall signify the extent of its ability
and willingness to comply with the provisions of such notice. Any
notice or any acknowledgement of such notice that initially may be
given orally shall be confirmed thereafter in writing.
2.12 During each period that Limited Term Power (Firm) has been
reserved as above provided, the party having agreed to supply such
power shall deliver upon call electric energy (herein called Limited
Term Energy (Firm)) to the other party at the delivery point or points
set forth in Section 4.01 of Article 4 of the Agreement in any amount
up to and including the number of kilowatts reserved. However, in the
event conditions arise during such period which could not have been
reasonably foreseen at the time said power was reserved and such
conditions would cause the delivery of Limited Term Energy (Firm) to be
burdensome to the supplying party, the supplying party may reduce or
interrupt the delivery of such energy to preserve the integrity of, or
to prevent or limit any instability on, its system.
2.13 The Limited Term Power (Firm) billing demand for any period shall
be taken as equal to the number of kilowatts reserved as Limited Term
Power (Firm) for such period.
SECTION 3 - COMPENSATION
3.1 Payments for the supply of Limited Term Power (Firm) and Limited
Term Energy (Firm) shall be predicated on the following rates:
3.11 Demand Charge
For any month that Limited Term Power (Firm) is reserved, $4.50 per
kilowatt reserved. However, in the event the Limited Term Power (Firm)
reserved is reduced upon the request of the supplying party, the demand
charge for the period during which such reduction is made shall be
reduced $0.15 per kilowatt of reduction for each day during which any
reduction is in effect. However, such reduction shall not exceed $4.50
per kilowatt month.
3.12 Energy Charge
For the kilowatt-hours of Limited Term Power (Firm) taken, at a
rate per kilowatt-hour equal to the out-of-pocket cost (such cost being
as of the delivery point or points set forth in Section 4.01 of Article
4 of the Agreement, taking into account electrical losses incurred from
the source or sources of such energy to said delivery point or points)
of the supplying party in generating or supplying such energy, plus ten
percent of such cost.
<PAGE>
Modification No. 7
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968
As Amended
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of June 1, 1982
<PAGE>
THIS MODIFICATION NO. 7, made and entered into as of the first day of
June, 1982, between Indianapolis Power & Light Company ("Indianapolis
Company"), an Indiana corporation, and Southern Indiana Gas & Electric
Company ("Southern Indiana Company"), also an Indiana corporation;
WITNESSETH:
WHEREAS, Indianapolis Company and Southern Indiana Company have
heretofore entered into an Interconnection Agreement dated as of December 2,
1968, which Agreement contains six previous modifications (said
Interconnection Agreement as so modified being herein called the "1968
Agreement"); and
WHEREAS, the parties desire to further modify the 1968 Agreement as
hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
SECTION 1. Service Schedule D - Short Term Power of the 1968 Agreement
is hereby cancelled and the Service Schedule D - Short Term Power attached
to this Modification No. 7, which is made a part hereof and marked "Appendix
I", is substituted in its entirety therefor.
SECTION 2. Service Schedule F - Limited Term Power (Firm) of the 1968
Agreement is hereby cancelled and the Service Schedule F - Limited Term
Power (Firm) attached to this Modification No. 7, which is made a part
hereof and marked "Appendix II", is substituted in its entirety therefor.
SECTION 3. Nothing in the 1968 Agreement or in this Modification No. 7
shall require either party hereto to purchase power or energy from a third
party and resell it to the other party hereto at a price less than the total
cost of supplying such purchased power or energy.
SECTION 4. Except as hereinbefore modified, all the terms and
conditions of the 1968 Agreement shall remain in full force and effect.
SECTION 5. This Modification No. 7 is made subject to the jurisdiction
of any governmental authority or authorities having jurisdiction in the
premises.
SECTION 6. This Modification No. 7 shall inure to the benefit of and
be binding upon the successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties hereto have caused this Modification
No. 7 to be executed by their duly authorized officers as of the date first
above written.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill, President and
Chief Operating Officer
ATTEST:
/s/ Marcus E. Woods
Marcus E. Woods, Vice President,
Secretary and General Counsel
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ N.P. Wagner
N.P. Wagner, President and Chief
Executive Officer
ATTEST:
/s/ Leonard H. Meyer
, Secretary
<PAGE>
APPENDIX I
Exhibit IV
SERVICE SCHEDULE D
SHORT TERM POWER
Under Agreement Between
Indianapolis Power & Light Company
And
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under Agreement (herein
called the "Agreement"), dated as of December 2, 1968, between Indianapolis
Power & Light Company ("Indianapolis Company") and Southern Indiana Gas and
Electric Company ("Southern Indiana Company"), shall become effective June
1, 1982 or at such later date as is practicable under applicable regulations
or orders of the Federal Energy Regulatory Commission, and shall continue in
effect until termination of the Agreement of which it is a part.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of one or more days or weeks, such electric power (herein called
"Short Term Power") as the other party may at such time have and is willing
to make available as Short Term Power. The party asked to supply Short Term
Power shall be the sole judge as to the amounts and periods that it has
electric power available that may be reserved by the other party as Short
Term Power. As used herein, the term "week" shall mean any seven
consecutive days.
2.11 To reserve Short Term Power, the party desiring such power
shall specify in its notice to the other party the number of kilowatts
and the period for which it desires to so reserve such power and the
desired schedule of delivery of the power so reserved. The party
receiving such notice, in a prompt acknowledgement, shall signify the
extent of its ability and willingness to comply with the provisions of
such notice. Any notice or any acknowledgement of such notice that
initially may be given orally shall be confirmed in writing, if
requested by either party, and such confirmation shall be forwarded not
later than the third day, excluding Saturdays, Sundays, and holidays,
following the day such oral notice is given.
2.12 During the period that Short Term Power has been reserved as
above provided, the party having agreed to supply such power shall
deliver, upon call, electric energy (herein called "Short Term Energy")
to the other party at the delivery point or points set forth in Section
4.01 of Article 4 of the Agreement in amounts up to the number of
kilowatts reserved. However, in the event conditions arise during such
period which could not have been reasonably foreseen at the time said
power was reserved and such conditions would cause the delivery of
Short Term Energy to be burdensome to the supplying party, said party
shall have the right to request that the other party reduce its take of
such energy to the lesser amount specified for any portion of such
period. The party so requested shall promptly comply with the request
of the other party.
2.13 The Short Term Power billing demand for any period shall be
taken as equal to the number of kilowatts reserved for such period as
Short Term Power.
SECTION 3 - COMPENSATION
3.1 The reserving party shall pay the supplying party:
3.11 For any week that Short Term Power is reserved, $1.05 per
kilowatt reserved; less, for each day during any part of which the
amount of such Short Term Power is reduced by the supplying party,
$0.18 per kilowatt of the reduction (except that in no event shall
the total of such reductions in any week exceed $1.05 per
kilowatt). For each period less than one week that Short Term
Power is reserved, $0.18 per kilowatt reserved per day; less, for any
day during any party of which the amount of Short Term Power is reduced
by the supplying party, $0.18 per kilowatt of the reduction; plus
3.12 110% of the out-of-pocket costs of supplying the Short Term
Energy taken during such reservation periods that comes from the
supplying party's own system; plus, for energy purchased by the
supplying party from another system to supply any part of the Short
Term Energy taken during such reservation periods, 100% of the amount
paid therefor by the supplying party plus 10% thereof, but not to
exceed (a) 1.6 mills per kilowatt-hour if Indianapolis Company is the
supplying party, or (b) 2.1 mills per kilowatt-hour if Southern Indiana
Company is the supplying party.
<PAGE>
Appendix II
Exhibit VI
SERVICE SCHEDULE F
LIMITED TERM POWER (FIRM)
Under Agreement Between
Indianapolis Power & Light Company
And
Southern Indiana Gas and Electric Company
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under Agreement (herein
called the "Agreement"), dated as of December 2, 1968, between Indianapolis
Power & Light Company ("Indianapolis Company') and Southern Indiana Gas and
Electric Company ("Southern Indiana Company"), shall become effective June
1, 1982 or at such later date as is practicable under applicable regulations
or orders of the Federal Energy Regulatory Commission, and shall continue in
effect until termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of not less than one month or more than twelve months, such electric
powers herein called "Limited Term Power (Firm)", as the other party may be
willing to make available as Limited Term Power (Firm). The party asked to
supply Limited Term Power (Firm) shall be the sole judge as to the amounts
and periods that it will make electric power available for reservation by
the other party as Limited Term Power (Firm).
2.11 To reserve Limited Term Power (Firm), the party desiring such
power shall specify in its notice to the other party the number of
kilowatts and the period for which it desires to so reserve such power.
The party receiving such notice shall signify the extent of its ability
and willingness to comply with the provisions of such notice. Any
notice or any acknowledgement of such notice that initially may be
given orally shall be confirmed thereafter in writing.
2.12 During each period that Limited Term Power (Firm) has been
reserved as above provided, the party having agreed to supply such
power shall deliver, upon call, electric energy, herein called "Limited
Term Energy (Firm)", to the other party at the delivery point or points
set forth in Section 4.01 of Article 4 of the Agreement in any amount
up to and including the number of kilowatts reserved. However, in the
event conditions arise during such period which could not have been
reasonably foreseen at the time said power was reserved and such
conditions would cause the delivery of Limited Term Energy (Firm) to be
burdensome to the supplying party, the supplying party may reduce or
interrupt the delivery of such energy to preserve the integrity of, or
to prevent or limit any instability on, its system.
2.13 The Limited Term Power (Firm) billing demand for any period shall
be taken as equal to the number of kilowatts reserved as Limited Term
Power (Firm) for such period.
SECTION 3 - COMPENSATION
3.1 The reserving party shall pay the supplying party:
3.11 For any month that Limited Term Power (Firm) is reserved, $5.50
per kilowatt reserved. However, in the event the Limited Term Power
(Firm) reserved is reduced upon the request of the supplying party, the
demand charge for the period during which such reduction is made shall
be reduced $0.185 per kilowatt of reduction for each day during which
any reduction is in effect. However, such reduction shall not exceed
$5.50 per kilowatt-month; plus
3.12 110% of the out-of-pocket costs of supplying the Limited Term
Energy (Firm) taken during such reservation periods that comes from the
supplying party's own system; plus, for energy purchased by the
supplying party from another system to supply any part of the Limited
Term Energy (Firm) taken during such reservation periods, 100% of the
amount paid therefor by the supplying party plus 10% thereof, but not
to exceed (a) 1.6 mills per kilowatt-hour if Indianapolis Company is
the supplying party, or (b) 2.1 mills per kilowatt-hour if Southern
Indiana Company is the supplying party.
<PAGE>
Modification No. 8
to
INTERCONNECTION AGREEMENT
Dated December 2, 1968
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
___________
Dated as of September 1, 1989
<PAGE>
MODIFICATION NO. 8
To
INTERCONNECTION AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
And
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
THIS MODIFICATION NO. 8, dated as of this 1st day of September, 1989,
between INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter called "IPL") an
Indiana corporation, and SOUTHERN INDIANA GAS & ELECTRIC COMPANY, INC.
(hereinafter called "SIGECO"), an Indiana corporation,
WITNESSETH:
0.01 WHEREAS, there is now in force and effect between IPL and SIGECO
an interconnection agreement dated as of December 2, 1968, as amended since
by seven modifications (such agreement as so amended being hereinafter
referred to as the "1968 Agreement"); and
0.02 WHEREAS, IPL desires to utilize, when and as requested, certain
electric transmission facilities of SIGECO to transmit up to 100 MW of power
and associated energy from Big Rivers Electric Corporation (hereinafter
called "Big Rivers" located in Kentucky to IPL over a 20-year period
beginning January 1, 1991; and
0.03 WHEREAS, SIGECO is willing to transmit such power and associated
energy from Big Rivers to IPL when and as requested over such 20-year period
in accordance with the terms and conditions of this Modification No. 8 and
Service Schedule G annexed thereto; and
0.04 WHEREAS, both parties also desire to revise Service Schedule A,
C, D and F and file new Service Schedules A, C, D and F as part of this
Modification No. 8.
ARTICLE 1
1.01 Article 2 of the 1968 Agreement is hereby amended by revising
Section 2.01 to read as follows:
"2.01 It is the purpose of the parties hereto to realize on an
equitable basis, all reciprocal benefits practicable to be effected
through coordination in the operation and development of their
respective systems. It is understood by the parties that such benefits
may be realized under the stated terms and conditions of the following
interconnection services:
1. the furnishing of mutual emergency and standby assistance,
in accordance with Service Schedule A annexed hereto;
2. the transfer of electric energy through the transmission
system of one party for the benefit of the other, in
accordance with Service Schedule B annexed hereto;
3. the interchange, sale and purchase of energy to effect
operating economies, in accordance with Service Schedule C
annexed hereto;
4. the sale and purchase of short-term electric power and
energy available on the system of one party and needed on
the system of the other, in accordance with Service Schedule
D annexed hereto;
5. the coordination of maintenance schedules of generating and
transmission facilities, in accordance with Service Schedule
E annexed hereto;
6. the sale and purchase of limited term power and energy
available on the system of one party and needed on the
system of the other, in accordance with Service Schedule F
annexed hereto;
7. the transfer of up to 100 MW of electric power and
associated energy from Big Rivers to IPL when and as
requested in accordance with Service Schedule G annexed
hereto.
In furtherance of such purpose the parties hereto shall create an
Operating Committee as provided in Article 7 hereof."
and by revising Section 2.03 to read as follows:
"2.03 The respective service schedules shall be designated:
1. Service Schedule A - Emergency Service
2. Service Schedule B - Energy Transfer
3. Service Schedule C - Interchange Power
4. Service Schedule D - Short Term Power
5. Service Schedule E - Coordination of Scheduled Maintenance
of Generating Facilities
6. Service Schedule F - Limited Term Power (Firm)
7. Service Schedule G - Specific Transmission Service
such service schedules having been agreed upon between the Parties
hereto, are attached hereto, made a part hereof, and marked Exhibits I,
II, III, IV, V, VI and VII respectively."
1.02 Article 9 of the 1968 Agreement is hereby amended by revising
Section 9.01 to read as follows:
"9.01 This agreement shall become effective at the date hereof,
subject to the filing requirements of FERC, or any other regulatory
authority having jurisdiction and to approval of any such
authority, if required, and except as otherwise provided in Service
Schedule G, shall continue in effect through December 31, 2010,
(the "Initial Term"), and thereafter for successive terms of three
(3) years each unless and until terminated as provided in Section
9.02 hereof."
by revising Section 9.02 to read as follows:
"9.02 Either party upon at least thirty months' prior written
notice to the other, may terminate this agreement after the
expiration of the initial term or any successive term hereof;
provided, that this agreement shall not be deemed to have
terminated until all prior commitments for the sale or purchase of
power under this agreement have been fulfilled.
and by deleting Section 9.03 in its entirety.
1.03 Article 18 is hereby added to the 1968 Agreement to read as
follows:
"ARTICLE 18
"DEFAULT
"18.01 Default Defined. As used herein, "Default" shall
mean the failure of a party to make any payment or perform any
obligation at the time and in the manner required by this
agreement, except where such failure to discharge obligations
(other than the payment of money) is the result of uncontrollable
forces. Failure to make any payment in the time and manner
required by this agreement shall not be excused as a Default by
payment of late charges in accordance with the provisions of
Section 18.02 below:
"18.02 Remedies For Default. Upon failure of a party to
make a payment or perform an obligation, required hereunder, the
other party shall give written notice of Default to the defaulting
party. The defaulting party shall have 30 days within which to
cure the Default. If a Default is not cured within such period,
the party not in Default, at its option, may, in addition to all
other rights and remedies available at law, in equity or under any
other provision of this agreement suspend this agreement until the
Default is cured. The party not in Default may also maintain such
other actions for damages as may be provided by law or in equity."
ARTICLE 2
2.01 Except as hereinabove specifically amended, all other terms and
conditions of the 1968 Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Modification
No. 8 to be executed by their respective duly authorized officers as of the
day, month and year first written above.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill, Chairman and
President
SOUTHERN INDIANA GAS AND ELECTRIC
COMPANY
By /s/ N.P. Wagner
N.P. Wagner, Chairman and CEO
<PAGE>
Exhibit I
SERVICE SCHEDULE A
EMERGENCY SERVICE
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of and under Modification No. 8 to
the Interconnection Agreement (referred to herein as the "1968 Agreement")
dated as of December 2, 1968 between Indianapolis Power & Light Company
(hereinafter called "IPL" or a "Party") and Southern Indiana Gas and
Electric Company, Inc. (hereinafter called "SIGECO" or a "Party") shall
become effective as of the date of the Eighth Modification and shall
continue in effective throughout the duration of the 1968 Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Conditional Service. Subject to the provisions of subsection 2.2 of
this Section 2, in the event of a breakdown or other emergency in or on the
system of either Party involving either sources of power or transmission
facilities, or both, impairing or jeopardizing the ability of the Party
suffering the emergency to meet the loads of its system, the other Party
shall deliver to such Party electric energy that it is requested to deliver;
provided, however, that neither Party shall be obligated to deliver such
energy which, in its sole judgment, it cannot deliver without interposing a
hazard to or economic burden upon its operations or without impairing or
jeopardizing the other load requirements of its system; and provided
further, that neither Party shall be obligated to deliver electric energy to
the other for a period in excess of forty-eight (48) consecutive hours
during any single emergency.
2.2 Non-Performance. The Parties recognize that the delivery of
electric energy as provided in subsection 2.1 of this Section 2 is subject
to two conditions which may preclude the delivery of such energy as so
provided: (a) the Party requested to deliver electric energy may be
suffering an emergency in or on its own system as described in said
subsection 2.1, or (b) the system of a Party may be delivering electric
energy, under a mutual emergency interchange agreement, to the system of
another interconnected company which is suffering an emergency in or on its
system. Under conditions as cited under (a) above, neither Party shall be
considered to be in default hereunder if it is unable to comply with the
provisions of said subsection 2.1. Under conditions as cited under (b)
above, neither party shall be considered to be in default hereunder if it is
unable to comply with the provisions of said subsection 2.1; provided,
however, that such Party shall make every effort consistent with the terms
of its contract with said other interconnected company to make the electric
energy as provided in subsection 2.1 available to the other Party hereto as
soon as possible.
2.3 Reserve Generating Capacity Review. If at any time the record
over a reasonable prior period shows clearly that either of the Parties has
failed to deliver energy in accordance with and subject to the provisions of
subsection 2.1 and subsection 2.2 of this Section 2, either Party, by
written notice given to the other Party, may call for a joint study by the
Parties of the reserve generating capacity in and provided for their
respective systems and of their respective system transmission facilities
affecting the supply and delivery of power and energy under the 1989
Agreement. It shall be the purpose of such study to determine the adequacy
or inadequacy of reserve generating capacity and transmission facilities
being provided to meet the requirements of the Parties' respective systems,
reflecting obligations under the Agreement, and, if inadequate, the extent
of the burden that one Party may be placing upon the other. If it should be
found that one Party is placing an unreasonable burden upon the other, the
Party causing such burden shall take such measures as are necessary to
remove the burden from the other Party, or the Parties shall enter into such
arrangements as shall provide for equitable compensation to the Party being
burdened.
SECTION 3 - COMPENSATION
3.1 Electric energy delivered under Section 2 above shall be settled
for either by the return of equivalent energy or, at the option of the Party
that supplied such energy, by payment of the out-of-pocket cost (such cost
being as of the delivery point or points, as provided in Section 4.01 and
4.02 of Article 4 of the Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said delivery point or
points) to the supplying Party generating such energy plus ten percent of
such cost. If equivalent energy is returned, it shall be returned at times
when the load conditions of the Party electing to receive it are equivalent
to the load conditions of such Party at the time the energy for which it is
returned was delivered or, if such Party elects to have equivalent energy
returned under different conditions, it shall be returned in such amounts,
to be agreed upon by the Operating Committee, as will compensate for the
difference in conditions.
3.2 Electric energy delivered under Section 2 above that is purchased by
the supplying Party's system from another interconnected system shall be
settled for by the payment of 100% of the amount paid therefore by the
supplying Party plus the following:
3.21 Where IPL is the supplying Party, up to 3.46 mills per kilowatt-
hour (2.46 mills/KWH for bulk transmission charges plus 1.0 mill/KWH
for difficult to quantify energy related costs) plus the cost of any
transmission losses, taxes, and other expenses incurred that would not
have been incurred if such transaction had not been made.
3.22 Where SIGECO is the supplying Party, up to 3.19 mills per
kilowatt-hour (2.19 mills/KWH for bulk transmission charge plus 1.0
mill/KWH for difficult to quantify energy-related costs) plus the cost
of any transmission losses, taxes, and other expenses incurred that
would not have been incurred if such transaction had not been made.
<PAGE>
Exhibit III
SERVICE SCHEDULE C
INTERCHANGE ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule, a part of and under Modification No. 8 to the
Interconnection Agreement (referred to herein as the "1968 Agreement") dated
as of December 2, 1968 between Indianapolis Power & Light Company
(hereinafter called "IPL" or a "Party") and Southern Indiana Gas and
Electric Company, Inc. (hereinafter called "SIGECO" or a "Party") shall
become effective as of the date of the Eighth Modification and shall
continue in effective throughout the duration of the 1968 Agreement.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 It is recognized that from time to time each of the Parties may have
electric energy (herein called "Economy Energy") available from surplus
capacity either on its own system or from sources outside its own system, or
both, and that Economy Energy could be supplied to the other Party at a cost
that would result in operating savings to such other Party. Such operating
savings would result from the displacement of electric energy that otherwise
would be supplied from capacity either on such other Party's system or from
sources outside its own system, or both. To promote the economy of electric
power supply and to achieve efficient utilization of production capacity,
either Party, whenever it in its own judgment determines Economy Energy is
available, may, but shall not be obligated to, offer Economy Energy to the
other Party. Promptly upon receipt of any such offer other Party shall
notify the offering Party of the extent to which it desires to use such
Economy Energy, and schedules providing the periods and extent of use shall
be agreed upon.
Non-Displacement Energy
2.2 It is further recognized that from time to time occasions will arise
when the effecting of transactions, as provided in subsection 2.1 of this
Section 2 will be impracticable, but at the same time one of the Parties may
have electric energy (herein called "Non-Displacement Energy") which it is
willing to make available from surplus capacity either on its own system or
from sources outside its own system, or both, that can be utilized
advantageously for short intervals by the other Party. It shall be the
responsibility of the Party desiring the receipt of Non-Displacement Energy
to initiate the receipt and delivery of such energy. The Party desiring
such receipt of energy shall inform the other Party of the extent to which
it desires to use Non-Displacement Energy, and, whenever in its sole
judgment such other Party determines that it has Non-Displacement Energy
available, schedules providing the periods and extent of use shall be
mutually agreed upon. Neither Party shall be obligated to make any
Non-Displacement Energy available to the other.
SECTION 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by either Party from the other
Party shall be based on the principle that the Party purchasing it shall pay
the out-of-pocket cost (including all operating, maintenance, tax,
transmission losses and other expenses incurred that would not have been
incurred if the energy had not been supplied) of the Party supplying such
energy and that the resulting savings to the receiving Party shall be
equally shared by the supplying and receiving Parties.
3.2 When Economy Energy is obtained from or delivered to other systems
interconnected with the Parties, but not signatories to the 1968 Agreement,
payments shall be based on the out-of-pocket cost of the supplying Party or
system providing the energy and an allocation of the gross savings which are
defined as the difference between (1) what the out-of-pocket costs of the
receiving Party or system would have been to generate such energy, and (2)
the out-of-pocket costs of the supplying Party or system providing the
energy. Such allocation shall be made as provided in subsection 3.21 and
3.22 hereinbelow:
3.21 The transmitting Party shall be paid (a) its cost of purchasing
the Energy supplied, plus (b) its costs of additional transmission
losses plus (c) the following:
(1) When IPL is such transmitting Party:
The greater of (i) fifteen percent of the gross savings
remaining after deducting all such payments for transmission
losses or (ii) an amount not to exceed 3.46 mills per
kilowatt-hour of Energy received for transmission.
(2) When SIGECO is such transmitting Party:
The greater of (i) fifteen percent of the gross savings
remaining after deducting all such payments for transmission
losses or (ii) an amount not to exceed 3.19 mills per
kilowatt-hour of Energy received for transmission.
3.22 The supplying Party or system shall be paid its out-of-pocket
cost of providing the energy, plus one-half of the gross savings
remaining after deducting all (b) and (c) payments made under
subsection 3.21. The receiving Party or system shall be entitled to
the other one-half of the gross savings remaining after deducting all
(b) and (c) payments made under subsection 3.21.
3.3 Prior to any transaction involving the delivery and receipt of Economy
Energy, as provided in subsection 3.1 and 3.2 authorized representatives of
the Parties shall determine and agree upon the compensation applicable to
such transaction. Compensation so agreed upon shall not be subject to later
review or adjustment.
Non-Displacement Energy
3.4 Non-Displacement Energy delivered hereunder shall be settled for either
by the return of equivalent energy or, at the option of the Party that
supplied such energy, by payment of the out-of-pocket cost (such cost being
as of the delivery point or points, as provided in Sections 4.01 and 4.02 of
Article 4 of the 1968 Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said delivery point or
points) to the supplying Party generating such energy plus ten percent of
such cost. If equivalent energy is returned, it shall be returned at times
when the load conditions of the Party receiving it are equivalent to the
load conditions of such Party at the time the energy for which it is
returned was delivered or, if such Party elects to have equivalent energy
returned under different conditions, it shall be returned in such amounts,
to be agreed upon by the Operating Committee, as will compensate for the
difference in conditions.
3.5 Non-Displacement Energy delivered under Subsection 2.2 above that is
purchased by the supplying Party from another interconnected system which is
not a signatory to the 1989 Agreement ("Third Party") at the request of the
receiving Party shall be settled for as follows:
3.51 When IPL is the supplying Party, a payment of 100 percent of the
amount paid to such Third Party, plus up to 3.46 mills per
kilowatt-hour (consisting of up to 2.46 mills per kilowatt-hour for a
transmission charge and 1 mill per kilowatt-hour for difficult to
quantify energy related costs) plus any transmission losses.
3.52 When SIGECO is the supplying Party, a payment of 100 percent of
the amount paid to such Third Party, plus up to 3.19 mills per
kilowatt-hour (consisting of up to 2.19 mills per kilowatt-hour for a
transmission charge and 1 mill per kilowatt-hour for difficult to
quantify energy related costs) plus any transmission losses.
<PAGE>
Exhibit IV
SERVICE SCHEDULE D
SHORT TERM POWER AND ENERGY
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of and under Modification No. 8 to
the Interconnection Agreement (referred to herein as the "1968 Agreement")
dated as of December 2, 1968 between Indianapolis Power & Light Company
(hereinafter called "IPL" or a "Party") and Southern Indiana Gas and
Electric Company, Inc. (hereinafter called "SIGECO" or a "Party") shall
become effective as of the date of the Eighth Modification and shall
continue in effect throughout the duration of the 1968 Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either Party by giving the other Party notice may reserve from the
other, (a) electric power ("Weekly Short Term Power") for periods of one or
more weeks or (b) electric power ("Daily Short Term Power") for periods of
one or more days whenever, the Party requested to reserve the same, is
willing to make such power available. Under ordinary circumstances such
reservation shall extend for not less than a calendar week if it begins with
Sunday or for the balance of the calendar week if it begins with any day
subsequent to the Sunday; however, under unusual circumstances, the Parties
may mutually agree upon a reservation of Daily or Weekly Short Term Power
for a lesser number of days. In all cases the Party asked to supply Daily
or Weekly Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by the
other Party as Short Term Power.
2.11 Prior to each reservation of Weekly or Daily Short Term
Power, the number of kilowatts to be reserved, the period of the
reservation, the terms of such reservation, and the source of such
power if the supplying Party is in turn reserving such power from
another interconnected system ("Third Party"), shall be determined by
the Parties. Such determination shall be confirmed in writing at the
request of either Party. If during such period conditions arise that
could not have been reasonably foreseen at the time of the reservation
and cause the reservation to be burdensome to the supplying Party or
its system, such Party may by oral notice to the reserving Party, such
oral notice to be later confirmed in writing if requested by either
Party, reduce the number of kilowatts reserved by such amount and for
such time as it shall specify in such notice, but kilowatts reserved
hereunder that the supplying Party is in turn reserving from another
system may be reduced only to the extent they are reduced by such other
system.
2.12 During the period that Weekly or Daily Short Term Power has
been reserved, the Party that has agreed to supply such power shall
upon call by the reserving Party deliver associated electric energy
("Weekly or Daily Short Term Energy") to the reserving Party as of the
delivery point or points, as provided in Section 4.01 and 4.02 of
Article 4 of the 1968 Agreement at a rate during each hour of up to and
including the number of kilowatts reserved.
SECTION 3 - COMPENSATION
3.1 Demand Charges: The reserving Party of Weekly or Daily Short Term
Power shall pay the supplying Party Demand Charges for such Short Term Power
at the following rates:
3.11 Weekly Short Term Power
3.11.1 When IPL is the supplying Party: at the rate of up to
$1.05 per kilowatt reserved per such week.
3.11.2 When SIGECO is the supplying Party: at the rate of up to
$1.05 per kilowatt reserved per such week.
3.11.3 In the event the amount of Weekly Short Term Power taken
is reduced upon request of the supplying Party, the demand charge for
each day (other than Sunday) during which any reduction is in effect
shall be reduced by one-sixth (1/6) of the aforesaid supplying Party's
weekly demand rate per kilowatt of reduction.
3.12 Daily Short Term Power
3.12.1 For any day that Daily Short Term Power is reserved by
either Party, the daily demand rate shall be equal to the rate of up to
one-sixth (1/6) of the supplying Party's Weekly Short Term Power demand
rate.
3.12.2 In the event the amount of Daily Short Term Power taken
is reduced upon request of the supplying Party, the demand charge for
each day during which such reduction is made shall be reduced by one-
sixth (1/6) of the above weekly demand rate per kilowatt of reduction.
3.13 Third Party Weekly or Daily Short Term Power
3.13.1 For any period that Short Term Power is reserved by
SIGECO for IPL from a Third Party, such Short Term Power shall be
supplied at the rate up to $.265 per kilowatt reserved per week or up
to $.053 per kilowatt reserved per day plus the demand charge paid
therefor by SIGECO to the Third Party.
3.13.2 For any period that Short Term Power is reserved by IPL
for and at the request of SIGECO from a Third Party, such Short Term
Power shall be supplied at the rate of up to $.295 per kilowatt
reserved per week or at the rate of up to $.059 per kilowatt reserved
per day plus the demand charge paid therefor by IPL to the Third Party.
3.13.3 In the event the amount of Weekly Short Term Power
reserved from a Third Party is reduced upon the request of the Third
Party, the demand charge for each day during which such reduction is in
effect shall be reduced by the amount by which the demand charge
payable by the supplying Party is reduced under its Agreement with such
Third Party plus, in the case of Power reserved by IPL, one-sixth of
the rate per kilowatt agreed to under Section 3.13.2 for each kilowatt
or reduction each day; but not more than the rate agreed upon for each
kilowatt per week; and, in the case of Power reserved by SIGECO, one-
sixth of the rate per kilowatt stated in Section 3.13.1 for each
kilowatt of reduction each day; but not more than the rate agreed upon
for each kilowatt per week.
3.13.4 In the event that the amount of Daily Short Term Power
reserved from a Third Party is reduced upon the request of the Third
Party, the demand charge for such Power shall be reduced by the amount
by which the demand charge payable by the supplying Party is reduced by
the Third Party.
3.2 Energy Charges: The reserving Party shall pay the supplying Party
Energy Charges for all Short Term Energy delivered pursuant to subsection
2.12 above at the following rates:
3.21 For each kilowatt-hour that is generated by the supplying
Party's system 110% of the out-of-pocket costs (including all
operating, maintenance, tax, transmission losses and other expenses
incurred that would not have been incurred if the energy had not been
supplied) of supplying Short Term Energy called for during such period.
3.22 For each kilowatt-hour purchased by the supplying Party's
system from a Third Party to supply the Short Term Energy called for
during each period, 100% of the amount paid therefore by the supplying
Party plus the following:
3.22.1 Where IPL is the supplying Party, 1.0 mill per kilowatt-
hour for difficult to quantify energy-related costs plus the cost of
any transmission losses, taxes, and other expenses incurred that would
not have been incurred if such transaction had not been made.
3.22.2 Where SIGECO is the supplying Party, 1.0 mill/KWH for
difficult to quantify energy-related costs plus the cost of any
transmission losses, taxes, and other expenses incurred that would not
have been incurred if such transaction had not been made.
<PAGE>
Exhibit VI
SERVICE SCHEDULE F
LIMITED TERM POWER (FIRM)
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of and under Modification No. 8 to
the Interconnection Agreement (referred to herein as the "1968 Agreement")
dated as of December 2, 1968 between Indianapolis Power & Light Company
(hereinafter called "IPL"' or a "Party") and Southern Indiana Gas and
Electric Company, Inc. ("hereinafter called "SIGECO" or a "Party"), shall
become effective as of the date of the Eighth Modification and shall
continue in effect throughout the duration of the 1968 Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either Party by giving the other Party notice may reserve for periods
of not less than one (1) or more than twelve (12) months, such electric
power (herein called "Limited Term Power (Firm)") as the other Party may be
willing to make available as Limited Term Power (Firm). The Party asked to
supply Limited Term Power (Firm) shall be the sole judge as to the amounts
and periods that it has electric power available that may be reserved by the
other Party as Limited Term Power (Firm).
2.11 To reserve Limited Term Power (Firm), the Party desiring such
power shall specify in its notice to the supplying Party the number of
kilowatts and the period for which it desires to so reserve such power.
The supplying Party shall signify the extent of its ability and
willingness to comply with the provisions of such notice. Any notice
or any acknowledgement of such notice that initially may be given or
all shall be confirmed thereafter in writing.
2.12 During each period that Limited Term Power (Firm) has been
reserved as above provided, the supplying Party shall deliver upon call
electric energy (herein called "Limited Term Energy (Firm)") to the
other Party at the delivery point or points set forth in Section 4.01
of Article 4 of the Agreement in any amount up to and including the
number of kilowatts reserved. However, in the event conditions arise
during such period which could not have been reasonably foreseen at the
time said power was reserved and such conditions would cause the
delivery of Limited Term Energy (Firm) to be burdensome to the
supplying Party, the supplying Party may, upon notice to the reserving
Party reduce or interrupt the delivery of such energy to preserve the
integrity of, or to prevent or limit any instability on, its system.
2.13 The Limited Term Power (Firm) billing demand for any period shall
be taken as equal to the number of kilowatts reserved as Limited Term
Power (Firm) for such period.
SECTION 3 - COMPENSATION
3.1 The Party reserving Limited Term Power (Firm) shall pay the supplying
Party the following Demand Charges:
3.11 Monthly Limited Term Power (Firm) - For any month that Limited
Term Power (Firm) is reserved up to $5.50 per kilowatt reserved; less,
for each day during any part of which the amount of Monthly Limited
Term Power (Firm) is reduced upon notice from the supplying Party, one-
twentieth (1/20) of the supplying Party's monthly demand rate per
kilowatt for each kilowatt of reduction but not more than the rate
agreed upon for each kilowatt per month.
3.12 Third Party Monthly Limited Term Power (Firm)
3.12.1 For any month that Monthly Limited Term Power (Firm) is
reserved by SIGECO for and at the request of IPL from a Third Party,
such Monthly Limited Term Power (Firm) shall be supplied at the rate of
up to $1.15 per kilowatt reserved per month plus the demand charge paid
therefor by SIGECO to the Third Party.
3.12.2 For any month that Monthly Limited Term Power (Firm) is
reserved by IPL for and at the request of SIGECO from a Third Party,
such Monthly Limited Term Power (Firm) shall be supplied at the rate of
up to $1.28 per kilowatt reserved per month plus the demand charge paid
therefor by IPL to the Third Party.
3.12.3 In the event the amount of Monthly Limited Term Power
(Firm) reserved from a Third Party is reduced upon the request of the
Third Party, the demand charge for each day during which reduction is
in effect shall be reduced by the amount by which the demand charge
payable by the supplying Party is reduced under its Agreement with such
Third Party plus, in the case of Power reserved by IPL one-thirtieth
(1/30) of the rate per kilowatt agreed to under Paragraph 3.12.1 of
this Section 3.12 for each kilowatt of reduction each day; but not more
than the rate agreed upon for each kilowatt per month; and, in the case
of Power reserved by SIGECO, one-thirtieth (1/30) of the rate per
kilowatt agreed to under Paragraph 3.12.2 of this Section 3.12 for each
kilowatt of reduction each day; but not more than the rate agreed upon
for each kilowatt per week.
3.2 The reserving Party shall pay the supplying Party for all Limited Term
Energy (Firm) delivered at the following rates:
3.21 For each kilowatthour that is generated by the supplying Party's
system, 100 percent of the Out-of-Pocket Costs of supplying Limited
Term Energy (Firm) called for during such period, plus 10 percent of
such costs.
3.22 For each kilowatthour purchased by IPL from a Third Party in
order to supply the Limited Term Energy called for during such period,
100 percent of the amount of the Energy charge paid therefor by IPL
plus 1 mill per kilowtthour plus any transmission losses.
3.23 For each kilowatthour purchased by SIGECO from a Third Party in
order to supply the Limited Term Energy (Firm) called for during such
period, 100 percent of the amount of the Energy charge paid therefor by
SIGECO plus 1 mill per kilowatthour plus any transmission losses.
<PAGE>
EXHIBIT VII
SERVICE SCHEDULE G
SPECIFIC TRANSMISSION SERVICE
SECTION 1 - DURATION AND TERMINATION
1.1 This Service Schedule G, being part of Modification No. 8 dated as of
September 1, 1989 to the Agreement dated as of December 2, 1968 between
Indianapolis Power & Light Company (hereinafter called "IPL" or a "Party")
and Southern Indiana Gas and Electric Company, Inc. (hereinafter called
"SIGECO" or a "Party") as amended by seven previous modifications (said
Interconnection Agreement as so modified being herein called the "1968
Agreement"), shall become effective on the effective date of Modification
No. 8 and shall continue in effect until terminated in accordance with this
Section 1.
1.2 The term of this Service Schedule G shall commence January 1, 1991 and
shall extend through December 31, 2010, unless it is otherwise terminated in
accordance with Subsections 1.3, 1.4, 1.5, 1.6 or 1.7 of this Section 1.
1.3 If any regulatory authority having jurisdiction over Modification No. 8
does not accept it for filing within ninety (90) days after its submission,
or requires any modification to its rates, terms, or conditions as a
condition of accepting Modification No. 8 for filing, either Party may
terminate Modification No. 8, if in such Party's good faith judgment such
modification materially changes the benefits or burdens to the Party
desiring to terminate; provided, the terminating Party has used its best
efforts to obtain regulatory acceptance. In that event, such Party may
terminate Modification No. 8 and this Service Schedule G by notifying the
other Party in writing of its intention to so terminate not more than thirty
(30) days after final action is taken not to accept Modification No. 8 for
filing or which requires such modification as a condition of such
acceptance. Modification No. 8 and this Service Schedule G shall terminate
thirty (30) days after receipt of such notice by the other Party.
1.4 If at any time after the acceptance of Modification No. 8, any
regulatory authority having jurisdiction over it modifies its rates, terms
or conditions, either Party may terminate Modification No. 8 if in such
Party's good faith judgment such modification materially changes the
benefits or burdens of Modification No. 8 to the Party desiring to
terminate; provided, the terminating Party has used its best efforts to
obtain acceptable rates, terms and conditions. In that event, such Party
may terminate Modification No. 8 and this Service Schedule G by notifying
the other Party in writing of its intention to so terminate not more than
thirty (30) days after the effective date of such change. Modification No.
8 and this Service Schedule G shall terminate one hundred twenty (120) days
after receipt of such notice by the other Party.
1.5 IPL may elect to terminate Service Schedule G at any time during its
term if IPL's power purchase from Big Rivers is terminated or, with three
years' advance notice, if IPL executes an interconnection agreement with Big
Rivers.
1.6 After January 1, 1993, SIGECO may elect to terminate Service Schedule G
at any time upon three (3) years' advance written notice to IPL stating that
SIGECO has received a written offer from a third party for the transmission
capacity provided by SIGECO to IPL which results in greater compensation to
SIGECO than the compensation provided under this Service Schedule G;
provided, that IPL shall have the right of first refusal to match any such
offer by agreeing, within 90 days after receiving a copy of any such offer,
to pay such additional compensation as will equal such offer; and provided
further, that if IPL declines to exercise its right of first refusal and
SIGECO declines to accept the Third Party offer within 90 days after IPL's
refusal, Service Schedule G shall remain in effect and any further
consideration of such offer shall require a new three-year notice.
1.7 SIGECO may elect to restrict Service Schedule G at any time if, due to
system or operational occurrences, SIGECO cannot, in its sole judgment,
continue to provide unrestricted service under Service Schedule G and at the
same time adequately provide service to SIGECO's other customers without
altering or adding to its equipment and facilities. Upon the occurrence of
such an event and upon development of a remedial plan by SIGECO, IPL shall
have the option either (a) to agree to pay the mutually agreed upon
reasonable costs of such remedial plan in proportion to IPL's contribution
to the system or operational occurrences that necessitated such plan and in
proportion to the remaining term of Service Schedule G or (b) decline to
participate in the remedial plan and continue receiving service under
Service Schedule G on a restricted basis when necessary and on an
unrestricted basis at all other times.
SECTION 2 - SPECIFIC TRANSMISSION SERVICE TO BE RENDERED AND CONDITIONS
THEREOF
2.1 SIGECO shall provide transmission service to IPL for an amount up to 50
MW from January 1, 1991 through December 31, 1992 and 100 MW thereafter
through December 31, 2010 for power and associated energy over SIGECO's
electrical transmission facilities from its interconnections with Big Rivers
Electric Corporation to SIGECO's interconnection with IPL. Such
transmission service shall be available at all times during the term of this
Service Schedule G, except during system emergencies. Notification by IPL
to SIGECO shall be the only condition for the use of such transmission
service.
2.2 The Parties shall maintain and operate their respective systems so as
to minimize, in accordance with sound engineering and operating practice,
the likelihood of disturbance(s) originating in either Party's system which
might cause impairment of the transmission service provided hereunder.
2.3 Either Party may interrupt synchronous operation through the
Interconnection Point if either determines that its facilities may be
damaged due to excessive loadings caused by the transmission service
provided hereunder. Should such interruption occur, the parties shall
cooperate to remove the cause of such excessive loadings as soon as
practicable and restore such interconnection to normal operating condition.
Neither Party shall be responsible to the other Party for damage or loss of
revenue caused by such interruption.
2.4 The Parties agree to study and negotiate the installation, ownership,
cost and maintenance of any additional equipment or facilities necessary to
effect a long term solution to any such excessive loading herein described
if either Party reasonably determines that the transmission service provided
for herein contributes to excessive loading and requests such negotiation.
SECTION 3 - COMPENSATION AND BILLING
3.1 From the commencement date of this Agreement to December 31, 1995 the
following firm transmission rates shall apply:
3.11 Demand Charge of $40,000/month for a 50 MW of transmission
capacity from January 1, 1991 through December 31, 1992 and a demand
charge of $80,000/month for a 100 MW of transmission capacity from
January 1, 1993 through December 31, 1995.
3.12 Energy Charge of 1 mill/KWH delivered.
3.2 From January 1, 1996 to December 31, 2010 the following transmission
rates shall apply:
3.21 A fixed monthly demand charge for 100 MW of transmission capacity
demand charge beginning January 1 of each of the following years:
Year Monthly Demand Charge
1996 $101,600
1997 $105,200
1998 $108,800
1999 $112,400
2000 $116,000
2001 $119,600
2002 $123,200
2003 $126,800
2004 $130,400
2005 $134,000
2006 $137,600
2007 $141,200
2008 $144,800
2009 $148,400
2010 $152,000
3.22 The energy charge shall be the energy charge allowed in SIGECO's
Federal Energy Regulatory Commission Supplement No. 11 to Rate Schedule
FPC No. 25 pertaining to IPL, effective April 1, 1987, to recover
unquantified transmission costs, currently $.001/KWH, or the FERC
approved revisions thereof as are in effect thereafter.
3.3 In the event SIGECO's transmission capacity currently in effect is
reduced upon notice from SIGECO, the demand charge for each day during which
any such reduction is in effect (excluding Saturdays and Sundays) shall be
reduced by one-twentieth (1/20) of SIGECO's monthly demand charge currently
in effect per kilowatt of reduction, but not more than the demand charge for
the month.
<PAGE>
MODIFICATION NO. 9
TO THE
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
SOUTHERN INDIANA GAS & ELECTRIC COMPANY
THIS AMENDMENT made and entered into as of the 1st day of January, 1995 by
Indianapolis Power & Light Company ("IPL"), being an Amendment to the
Interconnection Agreement between Southern Indiana Gas & Electric Company
("Buyer") and IPL dated December 2, 1968, as amended (the "Agreement").
WITNESSETH:
WHEREAS, IPL and Southern Indiana Gas & Electric Company entered into the
Agreement on December 2, 1968, which Agreement has been amended from time to
time;
WHEREAS, the Agreement provides for the sale of power and energy by IPL
under Service Schedules described as:
Service Schedule A Emergency Service
Service Schedule C Interchange Energy
Service Schedule D Short Term Power and Energy
Service Schedule F Limited Term Power (Firm)
WHEREAS, the Agreement provides for the recovery of incremental costs or
"out-of-pocket" costs occasioned by the sale by IPL of electric energy;
WHEREAS, IPL has implemented its Emissions Constrained Dispatch Plan,
attached hereto;
WHEREAS, the rates for Emergency Service, Interchange Energy, Short Term
Power and Energy, and Limited Term Power (Firm), do not expressly include
the cost of replacing sulfur dioxide ("SO2") emission allowances expended in
order to provide such energy in compliance with Federal laws governing SO2
emission;
WHEREAS, IPL desires to amend the Agreement to clarify recovery of out-of-
pocket costs occasioned by the sale of said energy as including the recovery
of the incremental cost of SO2 emission allowances;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions set forth herein; IPL desires to amend the Agreement as follows:
Section 1. Compensation for SO2 Emission Allowances.
The Buyer shall compensate IPL for the consumption of Sulfur Dioxide
Emissions Allowances ("SO2 Allowances") directly attributed to electric
energy sales by IPL to Buyer under the Service Schedules. Such compensation
shall, at Buyer's option, be made by either supplying IPL with the number of
SO2 Allowances directly attributed to such energy sales, or by reimbursing
IPL for the incremental cost of such number of SO2 Allowances, rounded to
the nearest whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2 Allowances associated with
Buyer's energy purchases for the month, the cash amount due at billing will
be determined by multiplying the number of SO2 Allowances attributed to the
sale by the incremental cost of the SO2 Allowances, as determined in Section
2.2, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will record or
transfer to IPL's account, the number of SO2 Allowances calculated below, at
the time cash settlement for the energy is due. In all cases, Buyer will
transfer to IPL's account the number of SO2 Allowances due IPL for calendar
year no later than January 15 of the following year. "Transfer to IPL's
account" shall mean, for purposes of the Amendment, the transfer by the
USEPA of the requisite number of SO2 Allowances to IPL's Allowance Tracking
System account and the receipt by IPL of the Allowance Transfer
Confirmation.
Section 2. Determination of SO2 Emission Allowances Due IPL.
Section 2.1. Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy sale made
by IPL shall be determined for each hour, by determining the
contribution from each of the unit(s) from which the energy sale is
being made for that hour. For each unit, the emission rate in pounds
of SO2 per million Btu will be determined each month, from fuel sulfur
content, control equipment performance, and continuous emissions
monitoring data. The emission rate and the unit heat rate will be used
to determine the SO2 Allowances used per megawatt-hour ("MWH"). The
energy from each unit attributable to the sale, and the SO2 Allowances
per MWH for each unit, will be used to determine the number of SO2
Allowances attributable to the sale.
Section 2.2 . Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic dispatch
of IPL's generating units in any month, will also be the basis used to
determine compensation for IPL's energy sales. The incremental SO2
Allowances cost, in dollars per ton of SO2, shall be determined each
month and will be based on the Cantor Fitzgerald offer price for SO2
Allowances, or if such is not available, then another nationally
recognized SO2 Allowance trading market price or market price index, at
the beginning of the month. The SO2 Allowance value may be changed at
any time during the month to reflect the more current incremental cost,
or market price, for SO2 Allowances. Buyer will be notified of the new
SO2 Allowance value prior to dispatch of IPL energy to Buyer.
Section 3. Effective Date.
This Amendment to the Agreement shall be made effective as of January 1,
1995.
IN WITNESS WHEREOF, IPL has caused the foregoing Amendment to be signed by
its duly authorized officer, effective as of the date set forth above.
INDIANAPOLIS POWER & LIGHT COMPANY
By: /s/ John C. Berlier, Jr.
John C. Berlier, Jr.
Vice President
Resource Planning and Rates
EXHIBIT 10.12
INTERCONNECTION AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
And
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
For
Interchange Wholesale Sales and Purchases under
Emergency Service, Energy Transfer, Interchange Power,
Short Term Power, Limited Term Power (Firm), and
Diversity Power Schedules
Dated as of December 1, 1981
<PAGE>
0.01 THIS AGREEMENT, dated as of the 1st day of December, 1981, between
INDIANAPOLIS POWER & LIGHT COMPANY ("IPL"), and HOOSIER ENERGY RURAL
ELECTRIC COOPERATIVE, INC. ("Hoosier"), both Indiana corporations:
WITNESSETH:
0.02 WHEREAS, IPL and Hoosier each owns electrical facilities and is
engaged in the generation, transmission, distribution, and sale of
electric power and energy in Indiana; and
0.03 WHEREAS, IPL and Hoosier desire that certain 161,000-volt and
138,000-volt transmission line facilities be provided and built so as to
establish a 138,000-volt interconnection between the IPL system and the
Hoosier system; and
0.04 WHEREAS, IPL and Hoosier desire to avail themselves of the mutual
benefits and advantages to be realized by interconnected systems
operation through such 138,000-volt interconnection; and
0.05 WHEREAS, the parties desire to fix the terms and conditions upon
which such interconnection shall be provided and built and upon which the
furnishing of interconnection services shall be effected;
0.06 NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
ARTICLE 1
PROVISIONS FOR AND CONTINUITY OF INTERCONNECTION OPERATION
Facilities To Be Provided By Hoosier
1.01 Hoosier shall provide, own, and install, or cause to be installed,
the following described facilities:
1.011 A 138,000-volt single circuit transmission line
approximately one mile in length, constructed with aluminum
conductors not less than 795 MCM in size, to extend in a generally
northeasterly direction from the existing switchyard, located at
Hoosier's Ratts Generating Station ("Ratts"), to IPL's Petersburg
Station (the "Ratts-Petersburg Line")
1.012 At Ratts, a 161,000-138,000-volt autotransformer, including
facilities essential to the protection of line and station
equipment, and such equipment on the autotransformer necessary to
attain a 200 MVA rating.
1.013 At Ratts, the necessary terminal equipment, including
facilities essential to the protection of line and station
equipment.
1.014 At Ratts and other suitable locations, such communication,
telemetering, and load control facilities as shall hereafter be
determined by the parties as necessary for the proper and efficient
interconnected operation of the parties' systems.
Facilities To Be Provided By IPL
1.02 IPL shall provide, own, and install, or cause to be installed, the
following described facilities:
1.021 At IPL's Petersburg Station ("Petersburg"), the necessary
terminal equipment, including facilities essential to the
protection of line and station equipment.
1.022 At Petersburg, replacement of certain 138,000-volt equipment
necessary to provide proper coordination and protection of line and
station equipment consistent with sound engineering practices.
1.023 At Petersburg, a new terminal for the existing line to
Southern Indiana Gas and Electric Company's Dubois line, together
with necessary protection, communication, metering, and load
control facilities essential to the protection of line and station
facilities.
1.024 At Petersburg and other suitable locations, such
communication, telemetering, and load control facilities as shall
hereafter be determined by the parties as necessary for the proper
and efficient interconnected operation of the parties' systems.
1.025 At Petersburg, suitable 138,000-volt metering equipment as
described in Section 4.02 below.
1.03 IPL shall arrange with Southern Indiana Gas and Electric Company
for the relocation and retermination of a portion of the
Petersburg-Dubois 138,000-volt line owned by Southern Indiana Gas and
Electric Company to a new line terminal at Petersburg as described in
Section 1.023 hereof.
1.04 In consideration of the provisions of this agreement, the parties
agree that within six (6) calendar months after the Interconnection Date
as defined in Article 9, payments will be made as follows:
1.041 IPL will keep an accurate accounting of its cost of
establishing the facilities specified in Article 1.02 herein, and
the cost of, or payments to Southern Indiana Gas and Electric
Company for, the relocation of facilities in Article 1.03 hereof
("IPL Investment"). Such costs shall include:
A. The cost of material and labor for installing the facilities
specified in Subsections 1.021, 1.023, 1.024 and 1.025
herein, including all transportation, stores, interest, and
engineering expenses and proper apportionments.
B. The cost of material and labor for removing and replacing
three line breakers and associated equipment specified in
Subsection 1.022 herein, including all transportation,
stores, interest, and engineering expenses, and proper
apportionments.
1.042 Hoosier will keep an accurate accounting of its cost of
establishing the facilities specified in Article 1.01 hereof
("Hoosier Investment"). Such costs shall include:
A. The material and labor cost of all new equipment required for
the establishment of facilities herein specified, including
all transportation, stores expenses, and proper
apportionments.
B. The installation labor and original purchase cost of the
autotransformer specified in Subsection 1.012 including
engineering and proper apportionments.
1.043 If the IPL Investment exceeds one-third (1/3) of the sum of
IPL Investment and Hoosier Investment ("Total Investment"), Hoosier
agrees to pay IPL the amount by which IPL Investment exceeds
one-third (1/3) of the Total Investment.
If the Hoosier Investment exceeds two-thirds (2/3) of the Total
Investment, IPL agrees to pay Hoosier the amount by which Hoosier
Investment exceeds two-thirds (2/3) of the Total Investment.
Interconnection Point
1.05 The Interconnection Point shall be that point at Petersburg where
the terminal facilities provided therefor by IPL shall be connected to
the Petersburg-Ratts Line.
Facilities Obligations Common To The Parties
1.06 Subject to accidents, strikes, litigation, delays in securing
delivery of equipment or other similar or dissimilar causes beyond the
reasonable control of the parties, including the procuring of the
necessary materials and labor and the obtaining of all the necessary
governmental authorizations and permits approving the use of such labor
and materials, the installation of the facilities to be provided by the
parties, as hereinabove described, shall be completed and in service on
or before June 1, 1982, (the "In-Service Date"). Should said facilities
be delayed beyond said date due to any of the aforesaid causes, it shall
nevertheless be completed as soon thereafter as practicable.
1.07 The parties shall cooperate to assure the maximum practicable
coordination of design and installation of the facilities to be installed
by each of them with new and existing facilities of the other. Each
party agrees to promptly notify the other party of any potential delay in
the In-Service Date.
Synchronous Operation
1.08 When the installation of the facilities as provided for under this
Article 1 is completed, the systems of the parties shall be connected at
the Interconnection Point and thereafter throughout the duration of this
agreement, subject to the provisions of this Section 1.08 and Section
1.09, such systems shall be operated in continuous synchronism through
such line. If synchronous operation of the systems through such line
becomes interrupted either manually or automatically because of reasons
beyond the control of either party or because of scheduled maintenance
that has been agreed to by both parties, the parties shall cooperate to
remove the cause of such interruption as soon as practicable and restore
such line to normal operating condition. Neither party shall be
responsible to the other party for any damage or loss of revenue caused
by any such interruption.
1.09 The parties hereto agree that either party may interrupt
synchronous operation through this interconnection if either determines
that its facilities may be damaged due to excessive loadings, and such
loadings may be reduced or alleviated by such interruption. If such
interruption occurs, the parties shall cooperate to remove the cause of
such loadings as soon as practicable and restore such interconnection to
normal operating condition. Neither party shall be responsible to the
other party for damage or loss of revenue caused by such interruption.
The parties hereto further agree to study and negotiate the installation,
ownership, and cost of any additional equipment necessary to effect a
long term solution to any such excessive loading herein described in the
event either party determines that this interconnection contributes to
the excess loading and requests such negotiation.
Maintenance of Equipment
1.10 The parties hereto shall each keep the lines, together with all
associated equipment and appurtenances, described in Article 1 hereof
that are located on their respective sides of the Interconnection Point
in a suitable condition of repair at all times, each at its own expense,
in order that said lines will operate in a reliable and satisfactory
manner and in order that reduction in the capacity of said lines will be
avoided to the extent practicable.
1.11 The parties hereto understand that IPL and Hoosier each now has its
transmission system interconnected with the electric transmission systems
of other electric utility companies and each has contracted for other
such interconnections and may hereafter during the term of this agreement
desire to make additional interconnections with such companies or with
other electric utility companies. Each such additional interconnection
with another electric utility system shall be discussed between the
parties and if, in the opinion of either party, the establishment of such
interconnection will cause transfer of power or reactive power through
the system of either party during normal parallel operation to or from
the systems with which either party proposes to add an interconnection to
its system, then before any such additional interconnection is made,
joint load studies shall be carried on to determine the effect which such
interconnection will have on the transmission systems of the parties. If
as the results of such studies it is the reasonable opinion of one of the
parties that the proposed additional interconnection would cause
unreasonable transfers of power or reactive power through the electric
transmission system of such party or otherwise impair the ability of such
party to carry out its own obligations, then the party proposing such
additional interconnection shall, before such proposed interconnection is
placed in service:
1.111 agree to compensate the other party for the use of that
portion of its facilities determined to be dedicated to the new
situation caused by the establishment of the proposed
interconnection; and/or
1.112 install and/or remove such equipment as may be reasonably
necessary to avoid such unreasonable transfers of power or reactive
power; or
1.113 abandon the establishment of such additional interconnection.
ARTICLE 2
SERVICES TO BE RENDERED
2.01 It is the purpose of the parties hereto to realize on an equitable
basis, all benefits practicable to be effected through coordination in
the operation and development of their respective systems. It is
understood by the parties that such benefits may be realized under the
stated terms and conditions of the following interconnection services:
A. the furnishing of mutual emergency and standby assistance, in
accordance with Service Schedule A annexed hereto;
B. the transfer of electric energy through the transmission system of
one party for the benefit of the other, in accordance with Service
Schedule B annexed hereto;
C. the interchange, sale, and purchase of energy to effect operating
economies, in accordance with Service Schedule C annexed hereto;
D. the sale and purchase of short-term electric power and energy
available on the system of one party and needed on the system of
the other, in accordance with Service Schedule D annexed hereto;
E. the sale and purchase of limited term power and energy available on
the system of one party and needed on the system of the other, in
accordance with Service Schedule E annexed hereto;
F. the sale and purchase of diversity power and energy, in accordance
with Service Schedule F annexed hereto.
In furtherance of such purpose the parties hereto shall create an
Operating Committee as provided in Article 7 hereof.
2.02 Inasmuch as the specific services to be rendered in furtherance of
such purpose will vary, and the terms and conditions applicable to such
services may require modification from time to time while this Agreement
is in effect, it is intended that such specific services and the terms
and conditions applicable thereto be set forth in service schedules
mutually agreed upon from time to time between the parties. Such service
schedules, until and unless changed by such mutual agreement, shall be
those provided by Section 2.03 hereof, each of which, while in effect,
shall be deemed to be a part of this agreement. Nothing contained herein
shall be construed as affecting in any way the right of IPL in furnishing
service under these rate schedules to unilaterally make application to
the Federal Energy Regulatory Commission ("FERC") for a change in rates
under Section 205 of the Federal Power Act and pursuant to the FERC's
Rules and Regulations promulgated thereunder. Nothing contained herein
shall be construed as affecting in any way the right of Hoosier in
furnishing service under these rate schedules to unilaterally make
application to the Public Service Commission of Indiana for a change in
rates in accordance with the Public Service Commission Act and pursuant
to such Commission's Rules and Regulations promulgated thereunder.
2.03 The respective service schedules shall be designated:
I. Service Schedule A - Emergency Service
II. Service Schedule B - Energy Transfer
III. Service Schedule C - Interchange Power
IV. Service Schedule D - Short Term Power
V. Service Schedule E - Limited Term Power (Firm)
VI. Service Schedule F - Diversity Power
such service schedules having been agreed upon between the Parties
hereto, are attached hereto, made a part hereof, and marked Exhibits I,
II, III, IV, V, and VI, respectively.
2.04 Nothing in this Agreement shall require either party hereto to
purchase power or energy from a third party and resell it to the other
party hereto at a price less than the total cost of supplying such
purchased power or energy.
ARTICLE 3
SERVICE CONDITIONS
Control of System Disturbance
3.01 The parties hereto shall maintain and operate their respective
systems in accordance with sound operating practice so as to minimize the
likelihood of disturbance originating in either system which might cause
impairment to the service of the system of the other party or of any
system interconnected with the system of the other party.
Control of Kilovar Exchange
3.02 It is intended that neither party hereto shall be obligated to
deliver kilovars for the benefit of the other party; also that neither
party shall be obligated to receive kilovars when to do so may introduce
objectionable operating conditions on its system. The Operating
Committee shall be responsible for the establishment from time to time of
operating procedures and schedules, in respect of carrying kilovar loads
by one system for the other in order to secure adequate service and
economical use of the facilities of both systems and in respect of proper
charges, if any, for the use of facilities carrying kilovar loads. In
discharging such duties the Operating Committee shall recognize that in
the transmission and delivery of power and energy hereunder the carrying
of kilovar loads by either of the parties, in harmony with sound
engineering principles of transmission operation with their systems
interconnected, is subject to numerous variables contingent upon loading
and operating conditions existing simultaneously on both of their
systems. The operating procedures and schedules so set up by the
Operating Committee shall be in accord with such principles and shall
require each of the parties to carry kilovar loads at such times and in
such amounts as will be equitable to both parties.
Control of Unscheduled Power Deliveries
3.03 The parties hereto shall exercise reasonable foresight in carrying
out all matters related to the providing and operating of their
respective electric power resources so as to minimize to the extent
practicable deviations between actual and scheduled deliveries of
electric power and energy between their systems. The parties shall
provide and install on their respective systems such communication and
telemetering facilities as are essential to so minimize such deviations;
and, in developing and executing operating procedures that will enable
the parties to avoid, to the extent practicable, deviations from
scheduled deliveries, shall fully cooperate with each other and with
third parties whose systems are either directly or indirectly
interconnected with the systems of the parties and who of necessity,
together with the parties, must unify their efforts cooperatively to
achieve effective and efficient interconnected operation. The parties
recognize, however, that, despite their best efforts to prevent the same,
unscheduled deliveries of electric energy from one party to the other may
occur. In such events, electric energy delivered hereunder shall be
settled for either by the return of equivalent energy or by payment of
the out-of-pocket cost (such cost being at the delivery point or points,
set forth in Section 4.01 of this agreement, taking into account
electrical losses incurred from the source or sources of such energy to
said delivery point or points) of electric energy delivered hereunder to
the supplying party plus ten percent of such cost. If equivalent energy
is returned, it shall be returned at times when the load conditions of
the party receiving it are substantially equivalent to the load
conditions of such party at the time the energy for which it is returned
was delivered or, if such party elects to have equivalent energy returned
under different conditions, it shall be returned in such amounts, to be
agreed upon by the Operating Committee, as will compensate for the
difference in conditions.
<PAGE>
ARTICLE 4
DELIVERY POINTS, METERING POINTS, AND METERING
Delivery Points
4.01 All electric energy delivered under this agreement shall be of the
character commonly known as three-phase sixty-cycle energy, and shall be
delivered at the Interconnection Point, as defined under Section 1.05
hereof, at a nominal voltage of 138,000-volts and at such other points
and voltages as may be agreed upon by the parties in a written amendment
hereto.
Metering Points
4.02 Electric Power and energy supplied under this agreement shall be
measured by suitable metering equipment, having appropriate voltage
rating, to be installed, owned and maintained at the Metering Point as
hereinafter defined; and at such other points, voltages, and ownership as
may be agreed upon by the parties in a written amendment hereto:
4.021 At the Interconnection Point specified in Section 1.025
above, by 138,000 volt metering equipment to be installed, owned
and maintained by IPL. ("Metering Point")
Metering
4.03 Suitable metering equipment at the metering point provided in
Section 4.02 above shall include electric meters, potential and current
transformers, and such other appurtenances as shall be necessary to give
for each direction of flow the following quantities:
A. a continuous automatic graphic record of both kilowatts and
kilovars,
B. an automatic record of the kilowatthours for each clock hour, and
C. a continuous integrating record of the kilowatthours.
4.04 Unless otherwise provided for in this agreement, measurements of
electric energy for the purpose of effecting settlements under this
agreement shall be made by standard types of electric meters installed
and maintained, by the owner at the metering point provided for in
Section 4.02 hereof. The timing devices of all meters having such
devices shall be maintained in time synchronism as closely as
practicable. The meters shall be sealed and the seals shall be broken
only upon occasions when the meters are to be tested or adjusted. For
the purpose of checking the records of the metering equipment installed
by one of the parties hereto as hereinabove provided, the other party
hereto shall have the right to install check metering equipment at the
aforesaid metering points. Check metering equipment so installed by one
party on the premises of another party, unless otherwise provided for in
this agreement, shall be owned and maintained by the party installing
such equipment. Upon termination of this agreement, the party owning
such check metering equipment shall remove it from the premises of the
other party. Authorized representatives of both parties shall have
access at all reasonable hours to the premises where the meters are
located and to the records made by the meters.
4.05 The aforesaid metering equipment shall be tested by the owner at
suitable intervals and its accuracy of registration maintained in
accordance with good practice. On request of either party hereto, a
special test may be made at the expense of the party requesting such
special test. Representatives of both parties shall be afforded the
opportunity to be present at all routine or special tests and upon
occasions when any readings for purposes of settlements hereunder are
taken from meters not bearing an automatic record.
4.06 If, at any test of metering equipment an inaccuracy shall be
disclosed exceeding two percent, the account between the parties hereto
for service theretofore delivered shall be adjusted to correct for the
inaccuracy over the shorter of the following two periods: (1) for the
thirty-day period immediately preceding the day of the test or (2) for
the period that such inaccuracy may be determined to have existed.
Should the metering equipment provided for in Section 4.03 hereof at any
time fail to register, the electric power and energy delivered during
such failure shall be determined from the check meters, if installed, or
otherwise shall be determined from the best available data.
ARTICLE 5
RECORDS AND STATEMENTS
Records
5.01 In addition to records of the metering provided for in Article 4
hereof, the parties hereto shall keep, in duplicate, such other records
as may be needed to afford a clear history of the various deliveries of
electric energy made, and of the clock-hour integrated demands in
kilowatthours delivered, by one party to the other. In maintaining such
records, the parties shall effect such segregations and allocations of
demands and electric energy delivered into classes representing the
various services and conditions as may be needed to effect settlements
under this agreement. The originals of all such records shall be
retained by the party keeping the records and the duplicates shall be
delivered monthly to the other party, unless the parties agree in writing
upon a different time interval for such delivery.
Statements
5.02 As promptly as practicable after the end of each calendar month,
the parties hereto shall cause to be prepared a statement setting forth
the electric power and energy transactions between them during such month
in such detail and with such segregations as may be needed for operating
records or for settlements under this agreement.
ARTICLE 6
BILLINGS AND PAYMENTS
6.01 All bills for amounts owed by one party hereto to the other shall
be due and payable on the fifteenth day of the month next following the
month in which the service was provided, or on the tenth day following
receipt of a bill therefor, whichever is later. Interest on unpaid
amounts shall accrue at the annual rate of 1/2 percent above the prime
commercial lending rate established from time to time by Indiana National
Bank at Indianapolis, Indiana and is chargeable from the due date of the
bill to the date of payment. The term "month" shall mean a calendar
month for the purpose of settlements under this agreement.
ARTICLE 7
OPERATING COMMITTEE
7.01 To coordinate the operation of their respective generating,
transmission and substation facilities, in order that the advantages to
be derived hereunder may be realized by the parties hereto to the fullest
practicable extent, the parties shall establish a committee of authorized
representatives to be known as the Operating Committee. Each of the
parties shall designate in writing delivered to the other party, the
person who is to act as its representative on said committee (and the
person or persons who may serve as alternates whenever such
representative is unable to act). Each of such representatives and
alternates shall be persons familiar with the generating, transmission,
and substation facilities of the system of the party he represents, and
each shall be fully authorized (1) to cooperate with the other
representative (or alternates) and (2) to determine and agree from time
to time, in accordance with this agreement and with any other relevant
agreements then in effect between the parties, upon the following:
7.011 All matters pertaining to the coordination of the maintenance
of generating and transmission facilities of the parties hereto.
7.012 All matters pertaining to the control of time, frequency,
energy flow, kilovar exchange, power factor, voltage, and other
similar matters bearing upon the satisfactory synchronous operation
of the systems of the parties.
7.013 Such other matters not specified herein in respect of which
cooperation, coordination, and agreement as to quantity, time,
method, terms and conditions are necessary to the efficient
operation of the respective systems of the parties to the end that
the intent and purpose of this agreement shall be realized by the
parties to the fullest extent practicable.
7.02 For the purpose of inspection and reading of meters, checking of
records, and all other pertinent matters, said representatives or their
alternates shall have the right of access at any reasonable time to all
facilities and equipment of the parties hereto used or to be used in the
performance of this agreement.
ARTICLE 8
CONTINUITY OF SERVICE
8.01 Each party hereto shall exercise reasonable care and foresight to
maintain continuity of service as provided under this agreement, but
neither party shall be considered in default in respect of any obligation
hereunder if prevented from fulfilling such obligation by reason of
uncontrollable forces. The term "uncontrollable forces" shall be deemed
for the purposes of this agreement to mean earthquake, storm, lightning,
flood, backwater caused by flood, fire, epidemic, accident, failure of
facilities, war, riot, civil disturbances, strike, labor disturbances,
restraint by court or public authority, or other similar or dissimilar
causes beyond the control of the party affected thereby, which causes
such party could not have avoided by exercise of reasonable care. A
party unable to fulfill any obligation by reason of uncontrollable forces
shall immediately notify the other party of such disability and shall use
its best efforts to remove such disability with reasonable dispatch.
ARTICLE 9
DURATION OF AGREEMENT
9.01 This agreement shall become effective at the date hereof, subject
to the filing requirements of FERC, or any other regulatory authority
having jurisdiction and to approval of any such authority, if required,
and shall continue in effect for a period of ten (10) consecutive years
commencing upon the Interconnection Date, as hereinafter defined, (the
"Initial Term"), and thereafter for successive terms of three (3) years
each unless and until terminated as provided in Section 9.02 hereof; the
Interconnection Date shall be the first day of the calendar month next
following the day, or on such day if it should be the first day of a
calendar month, upon which the systems of the parties are connected at
the Interconnection Point set forth in Article 1 hereof. As soon as
practicable following the Interconnection Date, the parties, as a matter
of record, shall exchange letters confirming such date as the
Interconnection Date.
9.02 This agreement and any amendments pertaining thereto shall not
become effective until approved by the Rural Electrification
Administration.
9.03 Either party upon at least thirty months' prior written notice to
the other, may terminate this agreement after the expiration of the
Initial Term or any successive term hereof; provided, that this agreement
shall not be deemed to have terminated until all prior commitments for
sale or purchase of power under this agreement have been fulfilled.
ARTICLE 10
ARBITRATION
10.01 In the event a disagreement between the parties hereto has reached
an impasse between the parties hereto with respect to (A) any matter
herein specifically made subject to arbitration, (B) any question of
operating practice involved in the deliveries of power and energy herein
provided for, (C) any question of fact involved in the application of the
provisions of this agreement, or (D) the interpretation of any provision
of this agreement, the disputed matter upon demand of either party, shall
be submitted to arbitration in the manner hereinafter provided. An offer
of such submission to arbitration shall be a condition precedent to any
right to institute proceedings at law or in equity concerning such
matter.
10.02 The party hereto calling for arbitration shall serve notice in
writing upon the other party hereto, setting forth in detail the subject
or subjects to be arbitrated, and the parties thereupon shall endeavor to
agree upon and appoint one person to act as sole arbitrator. If the
parties fail so to agree within a period of fifteen days from the receipt
of the original notice, the party calling for the arbitration shall, by
written notice to the other party, give notice for appointment of a board
of arbitrators skilled with respect to matters of the character involved
in the disagreement, naming one arbitrator in such notice. The other
party shall, within ten days after the receipt of such notice, appoint a
second arbitrator, and the two arbitrators so appointed shall choose and
appoint a third arbitrator. In case such other party fails to appoint an
arbitrator within said ten days, or in case the two so appointed fail for
ten days to agree upon and appoint a third, the party calling for the
arbitration, upon five days' written notice delivered to the other party,
shall apply to the senior Judge, in point of service, of the United
States District Court for the Southern District of Indiana, for
appointment of the second or third arbitrator, as the case may be.
10.03 The sole arbitrator, or the board of arbitrators, shall afford
adequate opportunity to the parties to present information with respect
to the matters submitted for arbitration and may request further
information from either or both parties. The findings and award of the
sole arbitrator or of a majority of the board of arbitrators shall be
final and conclusive with respect to the question or questions submitted
for arbitration and shall be binding upon the parties; provided, that
such findings and award shall not in any way vary the expressed terms of
this agreement or in any way extend the expressed scope and intent
hereof. Each party shall pay for the services and expenses of the
arbitrator appointed by or for it, if there is a board of arbitrators.
All other costs incurred in connection with the arbitration shall be
divided in equal parts and paid by the parties accordingly, unless the
award shall specify a different division of such costs.
ARTICLE 11
LIABILITY
11.01 Each party hereto shall hold harmless the other party hereto from
and against any liability, loss, cost, damage and expense because of
injury or damage to persons or property resulting from, or arising out of
the use of its own facilities or the production or flow of electric
energy by or through such facilities, except when such injury or damage
is due to the negligence of the other party.
ARTICLE 12
TAXES
12.01 If at any time during the term hereof there should be levied or
assessed against either of the parties hereto any direct tax by any
taxing authority on the capacity or energy (or both) generated,
purchased, sold, transmitted, interchanged, or exchanged under this
agreement, which tax is in addition to or different from the forms of
direct taxes being levied or assessed on the date of this agreement, and
such direct tax results in increasing the cost to either or both parties
hereto of carrying out the provisions of this agreement, then the rate
and charges for capacity and energy (or both) furnished hereunder shall
be increased automatically to the extent necessary to make adequate and
equitable allowance for such tax.
ARTICLE 13
NOTICES
13.01 Except as otherwise provided herein, any notice given to either
party hereto by the other under any of the provisions of this agreement,
shall be in writing unless otherwise specifically provided, and shall be
deemed to be duly delivered when the same is either personally delivered
or deposited in the United States mail, postage prepaid and properly
addressed to the Chief Executive Officer of IPL, in the case of a notice
to be given IPL, or to the General Manager of Hoosier, in the case of a
notice to Hoosier.
13.02 Any notice, request or demand pertaining to matters of an
operating nature may be served in person or, by ordinary mail, messenger,
telephone, or telegraph, as circumstances dictate, to an Operating
Committee representative or alternate; provided, that should the same not
be written then confirmation thereof shall be made in writing as soon as
practicable thereafter upon request of the party being served.
ARTICLE 14
REGULATORY AUTHORITIES
14.01 This agreement is made subject to the authority of FERC or any
other governmental regulatory agency having jurisdiction in the premises
and if any of the terms and conditions hereof are altered or made
impossible of performance by order, rule, or regulation of any such
regulatory agency, and the parties hereto are unable to agree upon a
modification of such terms and conditions that will satisfy such order,
rule, or regulation, then neither party shall be liable to the other for
failure thereafter to comply with such terms and conditions; provided,
that if either party deems that the failure of such performance results
in a substantial breach of this agreement, this agreement may be
terminated forthwith upon notice.
ARTICLE 15
WAIVERS
15.01 Any waiver by either party hereto of its rights under this
agreement, shall not be deemed a waiver with respect to any subsequent
default or other matter. Any delay, less than the statutory period
limitation, in asserting or enforcing any right under this agreement,
shall not be deemed a waiver of such rights.
ARTICLE 16
CONFLICTS WITH OTHER AGREEMENTS
16.01 Hoosier hereby represents to IPL that it has absolute authority to
enter into this agreement; that Hoosier's agreement with Public Service
Company of Indiana, Inc. and Southern Indiana Gas and Electric Company,
dated as of April 15, 1977, as amended, (the "Statewide Agreement") and
Hoosier's agreement with Big Rivers Electric Corporation, the City of
Henderson, Kentucky, and Southern Illinois Power Cooperative, dated as of
April 1, 1968, as amended, (the "KII Agreement") is not in conflict with,
and will not prevent Hoosier from performing its obligations under, this
agreement; and that Hoosier has done all things required of it under the
Statewide and KII Agreements as a condition to Hoosier's entry into this
agreement with IPL.
16.02 IPL hereby represents to Hoosier that it has absolute authority to
enter into this agreement; that IPL's agreement with Public Service
Company of Indiana, Inc., Kentucky Utilities Company and East Kentucky
Power Cooperative Inc., dated as of July 9, 1971, as amended, (the "KIP
Agreement") is not in conflict with, and will not prevent IPL from
performing its obligations under this agreement; and that IPL has done
all things required of it under, the KIP Agreement as a condition to
IPL's entry into this agreement with Hoosier.
ARTICLE 17
ENTIRE AGREEMENT CONTAINED HEREIN
17.01 This agreement contains the entire agreement between the parties
hereto in respect of the subject matter hereof.
ARTICLE 18
CONSTRUCTION OF AGREEMENT
18.01 This agreement shall be governed by and construed according to the
laws of the State of Indiana.
ARTICLE 19
ASSIGNMENT
19.01 This agreement shall inure to and bind upon the respective
successors and assigns of the parties hereto, but the assignment hereof
by either such party, shall not relieve the assigning party, without the
written consent of the other party, of any obligation to supply, or to
take and pay for, as the case may be, the services contracted for herein.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their respective duly authorized officers and their
respective corporate seals to be hereunto affixed as of the date first
above written.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill, President and Chief
Operating Officer
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
By /s/ Virgil E. Peterson
Virgil E. Peterson, Executive Vice President
and General Manager
<PAGE>
EXHIBIT I
SERVICE SCHEDULE A
EMERGENCY SERVICE
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Subject to the provisions of subsection 2.2 of this Section 2, in
the event of a breakdown or other emergency in or on the system of either
party involving either sources of power or transmission facilities, or
both, impairing or jeopardizing the ability of the party suffering the
emergency to meet the loads of its system, the other party shall supply
to the party having the emergency such electric energy as the supplying
party is requested to deliver; provided, that neither party shall be
obligated to supply such emergency energy which, in the supplying party's
sole judgment, cannot be delivered without creating a hazard to or
economic burden upon its operations or without impairing or jeopardizing
the total load requirements of its system; and provided further, that
neither party shall be obligated to supply such emergency energy for a
period in excess of forty-eight consecutive hours during any single
emergency.
2.2 The parties recognize that the supply of electric energy as
provided for in subsection 2.1 of this Section 2 is subject to two
conditions which may preclude the delivery of such energy as so provided:
(a) the party requested to deliver electric energy may be suffering an
emergency in or on its own system as described in said subsection 2.1, or
(b) the system of the party of whom such request is made may be
delivering electric energy, under a mutual emergency interchange
agreement, to the system of another interconnected company which is
suffering an emergency in or on its system. Under conditions as cited
under (a) above, neither party shall be considered to be in default
hereunder if unable to comply with the provisions of said subsection 2.1.
Under conditions as cited under (b) above, neither party shall be
considered to be in default hereunder if it is unable to comply with the
provisions of said subsection 2.1 provided that the aforesaid
interconnected company has suffered said emergency in or on its system
prior to and within forty-eight hours of that of the other party hereto
and that, if requested by said other party, such delivery of electric
energy to said interconnected company shall be discontinued within
forty-eight hours following the start of such delivery, and a subsequent
delivery shall be made for a full forty-eight hour period to said other
party in accordance with the provisions of said subsection 2.1.
2.3 If at any time the record over a reasonably prior period shows
clearly that either of the parties has failed to deliver energy in
accordance with and subject to the provisions of subsection 2.1 and
subsection 2.2 of this Section 2, either party, by written notice given
to the other party, may call for a joint study by the parties of the
reserve generating capacity in and provided for their respective systems
and of their respective system transmission facilities affecting the
supply and delivery of power and energy under the Agreement. It shall be
the purpose of such study to determine the adequacy or inadequacy of
reserve generating capacity and transmission facilities being provided to
meet the requirements of the parties' respective systems, reflecting
obligations under the Agreement, and, if inadequate, the extent of the
burden that one party may be placing upon the other. If it should be
found that one party is placing an unreasonable burden upon the other,
the party causing such burden shall take such measures as are necessary
to remove the burden from the other party, or the parties shall enter
into such arrangements as shall provide for equitable compensation to the
party being burdened.
SECTION 3 - COMPENSATION
3.1 Emergency Energy shall be settled for, at the option of the
supplying party, either by payment or by return of equivalent energy.
3.2 If the supplying party opts to receive payment for Emergency Energy
delivered, the receiving party shall pay the supplying party the greater
of:
3.21 110% of the out-of-pocket cost of supplying such Emergency
Energy that is generated from the supplying party's own
system, and, for energy purchased by the supplying party from
another system to supply any part of such Emergency Energy,
100% of the amount paid by the supplying party therefor plus
10% of that amount, not exceeding, however, 1.6 mills per
kilowatthour; or
3.22 30 mills per kilowatthour of such Emergency Energy
3.3 If the supplying party opts to receive equivalent energy for
Emergency Energy delivered, such equivalent energy shall be returned at
times when the load conditions of the party originally supplying
Emergency Energy are substantially equivalent to the load conditions of
such party that existed when the Emergency Energy was delivered or, if
such party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts and at such times as,
the Operating Committee agrees will compensate the original supplying
party, for the difference in conditions.
<PAGE>
EXHIBIT II
SERVICE SCHEDULE B
ENERGY TRANSFER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - TRANSFER ARRANGEMENT
2.1 In carrying out the interconnected operation of their respective
systems as provided for under the Agreement, energy being received by a
portion of one party's system from another portion of its system or to
the system of another interconnected company, may flow over the
transmission facilities of the other party as a natural result of the
physical and electrical characteristics of the interconnected network of
transmission lines to which the parties are connected. Such flow of
energy may occur during periods when conditions of system operation are
normal or may occur during periods of emergency caused by the failure of
either sources of power or transmission facilities, or both. In respect
to such flow of energy (hereinafter called "energy transfer") the parties
agree as follows:
2.11 Such energy transfer over their respective transmission
facilities shall be permitted whenever such transfer occurs;
provided, that such energy transfer shall not be of such
magnitude or duration as to affect adversely, or jeopardize
the ability of, the party over whose system such energy
transfers occur to render or accept service to or from
companies with which it now has, or at any time hereafter may
have contractual arrangements for the interchange of power or
energy.
2.12 The parties recognize that in carrying out the provisions of
this Service Schedule, the above described energy transfer,
either during periods when conditions of system operation are
normal or during periods of emergency, or both, may
eventually require the installation of additional
transmission facilities in order that such energy transfer
may be properly controlled to the end that the ability of the
party over whose system such energy transfers occur to meet
its own requirements, as described under 2.11 above, is not
affected adversely or jeopardized. In the event the need for
such additional transmission facilities becomes apparent to
either of the parties during any term of this Service
Schedule, upon written notice given by either party to the
other party and as soon as practicable following such notice,
the parties shall jointly reexamine conditions relating to
energy transfer. In such reexamination, if called for, the
parties shall agree upon such additional transmission
facilities as may be required to be installed, if any, and
upon an equitable basis for bearing the cost of installing,
maintaining and operating such facilities, if installed.
SECTION 3 - POWER AND ENERGY ACCOUNTING
3.1 The parties recognize that energy transfers as described under
Section 2 of this Service Schedule, except for such amounts of electrical
losses as may be incurred because of such energy transfers, are the
simultaneous acceptance and delivery of like amounts of power and energy
by and from the system of the party over whose system such energy
transfers occur. Power and energy associated with energy transfers,
including electrical losses associated therewith, shall be accounted for
each clock-hour as provided for under Article 5 of the Agreement. Proper
consideration to such electrical losses will be in accordance with the
manner agreed upon by the Operating Committee. It is understood by the
parties, however, that such electrical losses resulting from energy
transfers, to be taken as losses over and above the losses prevailing
under basic conditions agreed upon by the parties, shall be supplied
simultaneously by the party for whom such energy transfers are being
made. The parties agree that initially such basic conditions will be
established as those that exist when the scheduled net delivery between
the systems of the parties, and between their respective systems and the
systems of other interconnected companies, is zero kilowatts. It is
further understood that, from time to time, conditions may require the
establishment of different basic conditions for such purpose. Either
party by written notice given to the other party may call for a prompt
reexamination and reconsideration of matters pertinent to the
establishment of said basic conditions, whenever such reexamination
appears to be warranted, and the parties will thereupon agree to effect
such changes in the basic conditions, if any, that will equitably
compensate the parties for such losses. Should such reexamination be
required, a statement will be prepared by the parties which shall include
in detail the amounts of energy delivered and received by the parties
that are associated with energy transfer and the amounts of electrical
losses associated therewith.
<PAGE>
EXHIBIT III
SERVICE SCHEDULE C
INTERCHANGE POWER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 Either party may arrange to purchase from the other party electric
energy ("Economy Energy") when it is possible to effect a saving thereby
and, when, in the sole judgment of the supplying party, such energy is
available. Prior to each Economy Energy transaction, the amount of
energy, the time of its delivery, and the charge therefore shall be
determined by the parties. Receipt or delivery of Economy Energy may
also be arranged with other interconnected systems not parties to this
Agreement.
Non-Displacement Energy
2.2 It is recognized that occasions will arise when transactions under
subsection 2.1 above will be impracticable although a party may have
electric energy (herein called "Non-Displacement Energy") which it is
willing to make available from surplus capacity from its own system or
from outside sources, or both and which can be utilized advantageously
for short intervals by the other party. In such event, the party
desiring such receipt of energy shall notify the other party of the
extent to which it desires to obtain Non-Displacement Energy, and if the
other party, in its sole judgment, determines that Non-Displacement
Energy is available, schedules providing the periods and extent of use
shall be mutually agreed upon. Neither party shall be obligated to make
any Non-Displacement Energy available to the other.
SECTION 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by either party from the
other shall be based on the principle that the purchasing party shall pay
the out-of-pocket cost of the supplying party such energy and that the
resulting savings to the purchasing party shall be equally shared by both
parties.
3.2 When Economy Energy is obtained from or delivered to other
interconnected systems not signatories to this Agreement, payments shall
be based on the out-of-pocket cost of the supplying party or system
providing the energy and an allocation of the gross savings to be
realized. For such purpose, gross savings is defined as the difference
between the out-of-pocket cost of the purchasing party or system to
generate such energy, and the out-of-pocket cost of the supplying party
or system to provide such energy. Such allocation shall be made as
provided in subsections 3.21 and 3.22 of this section.
3.21 Each party or system participating in the transaction other
than the supplying and purchasing parties or systems, shall
be paid (a) its cost of purchasing the energy supplied, plus
(b) its cost of any additional transmission losses incurred,
plus (c) fifteen percent of the savings remaining after
deducting all such costs for transmission losses.
3.22 The supplying party or system shall be paid out-of-pocket
costs of providing the energy, plus one-half of the gross
savings remaining after deducting all (b) and (c) costs
enumerated in section 3.21 above. The receiving party or
system shall be entitled to the other one-half of the such
savings.
Non-Displacement Energy
3.3 Non-Displacement Energy delivered hereunder shall be settled for
either by return of equivalent energy or, at the option of the supplying
party, by payment of the out-of-cost of the supplying party in generating
or supplying such energy plus ten percent of such cost. Such cost shall
be as of the delivery point or points, as provided for in Section 4.01 of
said Interconnection Agreement, and shall take into account the
electrical losses incurred from the source or sources of such energy to
said delivery point or points. If equivalent energy is returned, it
shall be returned at times when the load conditions of the receiving
party are equivalent to the load conditions of such party at the time the
energy was delivered. If such party elects to have equivalent energy
returned under different conditions, such energy shall be returned in
such amounts as will compensate the supplying party for the difference in
conditions as agreed by the Operating Committee.
<PAGE>
EXHIBIT IV
SERVICE SCHEDULE D
SHORT TERM POWER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party, by giving the other party sufficient notice, may
reserve for periods of one or more days or weeks, such electric power
(herein called "Short Term Power") as the supplying party at that time
may have and is willing to supply as Short Term Power. The party asked
to supply Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by the
other party as Short Term Power. As used herein, the term "week" shall
mean any seven consecutive days.
2.2 The party desiring to reserve Short Term Power shall specify in a
notice to the other party the number of kilowatts and the period for
which it desires to reserve such power and the desired delivery schedule
for such power. The supplying party shall promptly acknowledge receipt
of such notice and, shall signify the extent of its ability and
willingness to supply power in accordance with the provisions of such
notice. Any such notice or acknowledgement thereof initially may be
given orally; however if requested by either party, it shall be confirmed
in writing and such confirmation shall be forwarded not later than the
third day following the day such oral notice is given, excluding
Saturdays, Sundays and holidays.
2.3 During the period the Short Term Power has been reserved as
provided in Section 2.2 above, the supplying party shall deliver upon
call electric energy (herein called "Short Term Energy") to the other
party at the delivery point or points set forth in Section 4.01 of the
Agreement in amounts not to exceed the number of kilowatts reserved.
However, in the event conditions arise during such period which could not
have been reasonably foreseen at the time Short Term Energy was reserved
and such conditions would cause the delivery of said power to be
burdensome to the supplying party, said party shall have the right to
require the purchasing party to reduce for any portion of such period the
amount of such energy being taken to the amount specified by the
supplying party. The purchasing party shall promptly comply with such
requirement of the supplying party.
SECTION 3 - COMPENSATION
3.1 The purchasing party shall pay the supplying party;
3.11 For any week that Short Term Power is reserved, $1.05 per
kilowatt reserved; less, for each day during any part of which the
amount of such Short Term Power is reduced by the supplying party,
$0.18 per kilowatt of the reduction (except that in no event shall
the total of such deductions in any week exceed $1.05 per
kilowatt). For each period less than one week that Short Term
Power is reserved, $0.18 per kilowatt reserved per day; less, for
any day during any part of which the amount of Short Term Power is
reduced by the supplying party, $0.18 per kilowatt of the
reduction; plus
3.12 110% of the out-of-pocket cost of supplying the Short Term
Energy taken during such reservation periods that comes from the
supplying party's own system; plus, for energy purchased by the
supplying party from another system to supply any part of the Short
Term Energy taken during such reservation periods, 100% of the
amount paid therefore by the supplying party plus 10% thereof not
to exceed 1.6 mills per kilowatthour.
<PAGE>
EXHIBIT V
SERVICE SCHEDULE E
LIMITED TERM POWER (FIRM)
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of not less than one (1) or more than twelve (12) months, such
electric power (herein called "Limited Term Power (Firm)") as the other
party may be willing to make available as Limited Term Power (Firm). The
party asked to supply Limited Term Power (Firm) shall be the sole judge
as to the amounts and periods that it has electric power available that
may be reserved by the other party as Limited Term Power (Firm).
2.11 To reserve Limited Term Power (Firm), the party desiring such
power shall specify in its notice to the supplying party the
number of kilowatts and the period for which it desires to so
reserve such power. The supplying party shall signify the
extent of its ability and willingness to comply with the
provisions of such notice. Any notice or any acknowledgement
of such notice that initially may be given orally shall be
confirmed thereafter in writing.
2.12 During each period that Limited Term Power (Firm) has been
reserved as above provided, the supplying party shall deliver
upon call electric energy (herein called "Limited Term Energy
(Firm)") to the other party at the delivery point or points
set forth in Section 4.01 of Article 4 of the Agreement in
any amount up to and including the number of kilowatts
reserved. However, in the event conditions arise during such
period which could not have been reasonably foreseen at the
time said power was reserved and such conditions would cause
the delivery of Limited Term Energy (Firm) to be burdensome
to the supplying party, the supplying party may, upon notice
to the reserving party reduce or interrupt the delivery of
such energy to preserve the integrity of, or to prevent or
limit any instability on, its system.
2.13 The Limited Term Power (Firm) billing demand for any period
shall be taken as equal to the number of kilowatts reserved
as Limited Term Power (Firm) for such period.
SECTION 3 - COMPENSATION
3.1 The reserving party shall pay the supplying party:
3.1 For any month that Limited Term Power (Firm) is reserved,
$5.50 per kilowatt reserved; plus,
3.12 110% of the out-of-pocket costs of supplying the Limited Term
Energy (Firm) taken during such reserved periods that is generated
by the supplying party, plus, for energy purchased by the supplying
party from another system to supply any part of the Limited Term
Energy (Firm), 100% of the amount paid therefore by the supplying
party, plus 10% thereof not to exceed 1.6 mills per kilowatthour.
<PAGE>
EXHIBIT VI
SERVICE SCHEDULE F
DIVERSITY POWER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - DIVERSITY POWER
2.1 From time to time, because of differences in load patterns one of
the parties hereto may have excess capacity during one seasonal load
period at the same time the other party is experiencing its peak load
season. At such time it may be to the parties' mutual advantage to
schedule exchange of certain portions of any such excess capacity. Such
capacity shall be termed and is herein called "Diversity Power."
2.015 Seasonal Load Period shall mean for the Summer Season Load
Period, the months of April thru September and for the Winter
Seasonal Load Period, the months of October thru March.
2.2 At any time Diversity Power transactions are agreed upon between
the parties, the party which purchases Diversity Power during one
seasonal load period shall be obligated to have available a like amount
of Diversity Power for the other party during the other seasonal load
period.
2.3 The party supplying Diversity Power shall provide reserve capacity
for the committed amount, equivalent to that provided for its own
customers, exclusive of customers with interruptible service contracts.
2.4 Energy associated with the reservation of Diversity Power shall be
scheduled by the purchasing party no less than 18 hours in advance of
receiving such energy. Energy receipts for a Monday shall be scheduled
no later than noon of the preceding Friday.
SECTION 3 - COMPENSATION
3.1 Demand Charges - There shall be no demand charge for Diversity
Power.
3.2 Energy Charges - Energy shall be billed at out-of-pocket cost plus
ten percent of such cost. In the event that any part of the
out-of-pocket cost includes energy purchased by the supplying Party, only
the energy portion of such purchase cost shall be included. Any
associated charges for demand, transmission, or other burden shall be
excluded.
<PAGE>
Modification No. 1
to
INTERCONNECTION AGREEMENT
Dated December 1, 1981
between
INDIANAPOLIS POWER & LIGHT COMPANY
and
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
Dated as of June 1, 1982
<PAGE>
THIS MODIFICATION No. 1, made and entered into as of the first day
of June, 1982 between INDIANAPOLIS POWER & LIGHT COMPANY (IPL), an
Indiana corporation, and HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
(Hoosier), also an Indiana corporation.
W I T N E S S E T H:
WHEREAS, IPL and Hoosier entered into an Interconnection Agreement,
dated December 1, 1981; (said Interconnection Agreement, being herein
called the 1981 Agreement); and
WHEREAS, the parties desire to further modify the 1981 Agreement,
as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:
SECTION 1 - Section 3--Compensation of Service Schedule D - Short
Term Power of the 1981 Agreement shall be modified and amended to read as
follows:
"SECTION 3 - COMPENSATION
3.1 The purchasing party shall pay the supplying party;
3.11 DEMAND CHARGE - For any week that Short Term Power is
reserved, (a) $1.05 per kilowatt reserved if IPL is the supplying
party or (b) a rate not to exceed $1.05 per kilowatt reserved if
Hoosier is the supplying party; less, for each day during any part
of which the amount of such Short Term Power is reduced by the
supplying party, one sixth of the weekly rate per kilowatt of the
reduction (except that in no event shall the total of such
deductions in any week exceed the weekly rate). For each period
less than one week that Short Term Power is reserved, one sixth of
the weekly rate per kilowatt reserved per day (not to exceed $0.175
per kilowatt reserved per day); less, for any day during any part
of which the amount of Short Term Power is reduced by the supplying
party, one sixth of the weekly rate per kilowatt (not to exceed
$0.175 per kilowatt) of the reduction. In the event the supplying
party, at the request of the purchasing party, obtains capacity
from a third party specifically for the purpose of supplying any
portion of the Short Term Power pre-arranged in accordance with
Section 2.2 of this Service Schedule, the Demand Charge for such
Short Term Power supplied shall be equal to all associated Demand
Charges which the supplying party must pay therefore.
3.12 ENERGY CHARGES - 110% of the out-of-pocket cost of supplying
the Short Term Energy taken during such reservation periods that
comes from the supplying party's own system; plus, for energy
purchased by the supplying party from another system to supply any
part of the Short Term Energy taken during such reservation
periods, 100% of the amount paid therefore by the supplying party
plus 10% thereof not to exceed 1.6 mills per kilowatthour."
SECTION 2. This Modification No. 1 shall be effective from the
date first above written to the expiration date of the 1981 Agreement.
SECTION 3. Except as hereinabove modified and amended, all the
terms and conditions of the 1981 Agreement shall remain in full force and
effect.
SECTION 4. This Modification No. 1 shall inure to the benefit of
and be binding upon the successors and assigns of the respective parties
hereto.
IN WITNESS WHEREOF, the parties herein have caused this Agreement
to be executed by their duly authorized officers.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill, President
HOOSIER ENERGY RURAL ELECTRIC
COOPERATIVE, INC.
By /s/ Virgil E. Peterson
<PAGE>
Modification No. 2
To
INTERCONNECTION AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
And
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
Dated as of October 1, 1983
<PAGE>
MODIFICATION NO. 2
To
INTERCONNECTION AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
And
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
THIS MODIFICATION NO. 2, dated as of this 1st day of October, 1983,
between INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter called "IPL"), an
Indiana corporation, and HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
(hereinafter called "Hoosier"), an Indiana corporation,
WITNESSETH:
0.01 WHEREAS, there is not in force and effect between IPL and
Hoosier an interconnection agreement dated as of December 1, 1981, as
amended by a Modification No. 1 dated June 1, 1982 (such agreement as so
amended being hereinafter referred to as the "1981 Interconnection
Agreement"); and
0.02 WHEREAS, in order to meet customer loads in the area, Hoosier
is required to establish as soon as practicable an electric substation
near the intersection of 800 North Road and 500 West Road in Johnson
County, Indiana (hereinafter referred to as the "Honey Creek
Substation"); and
0.03 WHEREAS, Hoosier is presently unable to supply electric power
to the Honey Creek Substation because it has no transmission lines in the
area thereof and it has been unable to work out a permanent arrangement
for the transmission of electric power to the Honey Creek Substation
either through the construction of its own transmission facilities or
through the utilization of the transmission facilities of another
utility; and
0.04 WHEREAS, Hoosier represents to IPL that it is using, and will
continue to use, its best efforts either to construct adequate
transmission facilities, or to otherwise make arrangements, for the
transmission of electric power to the Honey Creek Substation within the
next five years, but that in the interim, Hoosier desires to provide
electric power to the Honey Creek Substation through the temporary
establishment of a tap point on IPL's 138KV transmission line running
from its Pritchard Generating Station to its Southport Substation
(hereinafter referred to as the "Honey Creek Tap Point"); and
0.05 WHEREAS, IPL in reliance upon the foregoing representations
of Hoosier is willing to provide, but only on a temporary basis, the
Honey Creek Tap Point upon the terms and conditions herein provided;
0.06 NOW, THEREFORE, in consideration of the premises and of the
mutual covenants set forth herein, the parties agree as follows:
ARTICLE 1
1.01 The 1981 Interconnection Agreement shall be, and the same
hereby is, amended as follows:
A. Article 1 thereof is hereby amended by inserting immediately
following the present subsection 1.014 thereof, a new subsection,
designated "1.015" to read as follows:
"1.015 At its Honey Creek Substation, 138,000 volt
three-phase interrupting device, three motor operated
supervisory controlled 138,000 volt switches, a 10/12.5 MVA
transformer, 12,470 volt metering equipment, supervisory and
communication equipment including bank differential
indication to IPL's control center, relaying, switching, and
appurtenant equipment, all of which equipment shall be
subject to the approval of IPL."
and inserting immediately following the present subsection 1.025
thereof, a new subsection, designated "1.026" to read as follows:
"1.026 At Honey Creek Tap Point, IPL agrees to make such
modifications to its transmission facilities as are necessary
to effect a connection at such Tap Point."
and by inserting immediately following the present subsection 1.043
thereof, a new subsection, designated "1.044" to read as follows:
"1.044 Hoosier agrees to pay IPL within 15 calendar days of
receipt of invoice, all IPL costs associated with
establishing the Honey Creek Tap Point."
and by amending subsection 1.05 thereof to read as follows:
"1.05 The Interconnection Points shall be:
"1.051 The Petersburg Interconnection Point - that point at
Petersburg where the terminal facilities provided therefor by
IPL shall be connected to the Petersburg-Ratts line.
"1.052 The Honey Creek Tap Point - that point at which the
facilities provided therefor by Hoosier shall be connected to
modified facilities of IPL."
and by inserting immediately following the present subsection 1.08
thereof, a new subsection, designated "1.08A" to read as follows:
"1.08A The parties hereto mutually agree that their respective
systems will not be operated in parallel through the Honey Creek
Tap Point. Electric energy supplied by IPL to Hoosier at the Honey
Creek Tap Point will be used only to temporarily supply the
ultimate customers of Johnson County REMC. Any power (demand) or
energy supplied through the Honey Creek Tap Point shall be
accounted and settled for as if supplied through any of the
interconnection points which exist between the two companies. This
accounting shall include any power (demand) and energy losses
occurring on the IPL system due to the transfer of the energy to
the Honey Creek Tap Point."
B. Article 2 thereof is hereby amended by amending Section 2.01 to
read as follows:
"2.01 It is the purpose of the parties hereto to realize on an
equitable basis, all reciprocal benefits practicable to be effected
through coordination in the operation and development of their
respective systems. It is understood by the parties that such
benefits may be realized under the stated terms and conditions of
the following interconnection services:
A. the furnishing of mutual emergency and standby assistance, in
accordance with Service Schedule A annexed hereto;
B. the transfer of electric energy through the transmission
system of one party for the benefit of the other, in
accordance with Service Schedule B annexed hereto;
C. the interchange, sale and purchase of energy to effect
operating economies, in accordance with Service Schedule C
annexed hereto;
D. the sale and purchase of short-term electric power and energy
available on the system of one party and needed on the system
of the other, in accordance with Service Schedule D annexed
hereto;
E. the sale and purchase of limited term power and energy
available on the system of one party and needed on the system
of the other, in accordance with Service Schedule E annexed
hereto;
F. the sale and purchase of diversity power and energy, in
accordance with Service Schedule F annexed hereto;
G. the temporary use of IPL transmission facilities to provide
service to Hoosier's Honey Creek Substation which is not
directly connected to its transmission system, in accordance
with Service Schedule G annexed hereto.
In furtherance of such purpose the parties hereto shall create an
Operating Committee as provided in Article 7 hereof."
and by amending Section 2.03 to read as follows:
"2.03 The respective service schedules shall be designated:
I. Service Schedule A - Emergency Service
II. Service Schedule B - Energy Transfer
III. Service Schedule C - Interchange Power
IV. Service Schedule D - Short Term Power
V. Service Schedule E - Limited Term Power (Firm)
VI. Service Schedule F - Diversity Power
VII. Service Schedule G - Temporary Transmission Use
such service schedules having been agreed upon between the parties
hereto, are attached hereto, made a part hereof, and marked
Exhibits I, II, III, IV, V, VI and VII, respectively."
and by adding Section 2.05 to read as follows:
"2.05 Notwithstanding anything herein to the contrary, Hoosier
hereby covenants and agrees that it will proceed diligently with
the planning and construction of the transmission facilities
necessary to supply electric power and energy to the Honey Creek
Substation and/or will enter into arrangements with such electric
utilities (other than IPL) as it deems appropriate in order to
provide electric power and energy to the Honey Creek Substation on
or before the termination of Modification No. 2 to this agreement
and Service Schedule G, toward the end that the temporary electric
transmission service being provided by IPL to Hoosier at the Honey
Creek Tap Point may be replaced with electric transmission
facilities of Hoosier or another electric utility within the five
year term of said Modification No. 2 and Service Schedule G."
C. Article 4 thereof is hereby amended by amending subsection
4.021 to read as follows:
"4.021 At the Petersburg Interconnection specified in
Section 1.05 above, by 138,000 volt metering equipment to be
installed, owned and maintained by IPL ('Petersburg Metering
Point')"
and by inserting immediately following subsection 4.021 thereof, a
new subsection, designated "4.022" to read as follows:
"4.022 At the Honey Creek Tap Point specified in Section
1.05 above, by 12,470 volt metering equipment to be installed
and maintained by Hoosier ('Honey Creek Metering Point')"
and by amending Section 4.03 to read as follows:
"4.03 Suitable metering equipment at the metering point provided
in Section 4.02 above shall include electric meters, potential and
current transformers, and such other appurtenances as shall be
necessary to give for each direction of flow the following
quantities:
A. a continuous automatic graphic record of both kilowatts and
kilovars,
B. an automatic record of the kilowatthours for each clock hour,
and
C. a continuous integrating record of the kilowatthours.
Meter readings taken at the Honey Creek Substation shall be
adjusted by adding such amount as may be necessary to fully
compensate IPL for losses in the Honey Creek transformer and on
IPL's system."
D. Article 7 thereof is hereby amended by inserting immediately
following the present subsection 7.013 thereof, a new subsection
designated "7.014" to read as follows:
"7.014 All matters pertaining to rights of access, and
rights to operate equipment installed as a part of this
agreement."
and by adding a new Section 7.03 to read as follows:
"7.03 With respect to Hoosier's representations that it will use
its best efforts to replace IPL's transmission facilities at the
Honey Creek Tap Point with other transmission facilities, IPL
representatives on the Operating Committee shall have the right of
access at any reasonable time to any information relating to such
representations and to Hoosier's progress in accomplishing the
replacement of the temporary electric transmission service provided
by IPL under Modification No. 2 to this agreement and Service
Schedule G."
E. Article 8 thereof is hereby amended by adding a new Section
8.02 to read as follows:
"8.02 With respect to the Honey Creek Tap Point, Hoosier hereby
agrees that IPL shall not be responsible for disruption of service
or loss of continuity in providing service to the Honey Creek
Substation and Hoosier hereby indemnifies and saves harmless IPL
against any claim for injury to persons and damage to property in
any way resulting from or growing out of any such service
disruption or loss of continuity."
F. Article 9 thereof is hereby amended by correcting the reference
to "Section 9.02" contained in Section 9.01 thereof to read
"Section 9.03"; and by adding a new Section 9.04 to read as
follows:
"9.04 Notwithstanding anything herein to the contrary,
Modification No. 2 to this agreement and Service Schedule G will
terminate on the earlier of the following dates: (i) on the date
Hoosier has replaced the service provided by IPL under said
Modification No. 2 and Service Schedule G with transmission
facilities of Hoosier or with transmission facilities of another
utility, or (ii) on the date that is five years after the effective
date of said Modification No. 2 and Service Schedule G as
established by the Federal Energy Regulatory Commission (FERC);
provided, that in the event Hoosier is in the process of replacing
IPL's transmission service under said Modification No. 2 and
Service Schedule G, but, through no fault of its own, Hoosier is
unable to consummate such replacement within the five-year term of
said Modification No. 2 and Service Schedule G, then the term
thereof may be extended for an additional period of not more than
three years, upon adequate assurances being given to IPL by Hoosier
that replacement of such transmission service by IPL to Hoosier
will be accomplished within such additional period. If Hoosier
fails to make such assurances, or IPL deems them inadequate, such
term shall not be extended. Hoosier agrees, in connection with any
such termination, that IPL may unilaterally file an appropriate
notice of termination with FERC, in which filing Hoosier shall
concur. Hoosier hereby releases IPL from all obligations,
contractual or otherwise, to provide electric transmission service
to the Honey Creek Substation through the Honey Creek Tap Point
beyond the date of termination of said Modification No. 2 and
Service Schedule G as hereinabove provided, and Hoosier agrees that
after such termination it shall be required to rely exclusively
upon its own electric transmission facilities or the electric
transmission facilities of a utility other than IPL to supply
electric power and energy to the Honey Creek Substation."
G. Article 10 thereof is hereby amended by adding a new Section
10.04 to read as follows:
"10.04 This Article 10 shall not apply to Modification No. 2 to
this agreement or to Service Schedule G."
H. Article 14 thereof is hereby amended by adding a new Section
14.02 to read as follows:
"14.02 Hoosier hereby covenants and agrees to support, by
concurrence or otherwise, at such reasonable time as IPL deems
appropriate, any filing with FERC that IPL considers necessary and
expedient to terminate and cancel Modification No. 2 to this
agreement and Service Schedule G in accordance with the terms and
conditions of Section 9.04 hereof."
I. Article 16 thereof is hereby amended by adding a new Section
16.03 to read as follows:
"16.03 Upon termination of the Honey Creek Tap Point, Modification
No. 2 to this agreement and Service Schedule G (except for the
reference correction in Section 9.01 which shall remain effective)
shall be of no further force and affect and shall no longer be a
part of this agreement."
ARTICLE 2
2.01 Except as otherwise specifically provided by this
Modification No. 2 or subsequent modifications, the terms
"Interconnection Point", "Metering Point", and "Delivery Point", shall
include all points at which the parties thereto are interconnected.
ARTICLE 3
Except as hereinabove specifically amended, all other terms and
conditions of the 1981 Interconnection Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Modification No. 2 to be executed by their respective duly authorized
officers as of the day, month and year first written above.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
HOOSIER ENERGY RURAL ELECTRIC
COOPERATIVE, INC.
By /s/ Virgil E. Peterson
Virgil E. Peterson
Executive Vice President
and General Manager
<PAGE>
Exhibit VII
(to the 1981 Agreement)
SERVICE SCHEDULE G
TEMPORARY TRANSMISSION USE
SECTION 1 - DURATION
1.1 This Service Schedule, being part of Modification No. 2 to
the Agreement dated December 1, 1981 between Indianapolis Power &
Light Company ("IPL") and Hoosier Energy Rural Electric
Cooperative, Inc. ("Hoosier") as amended by Modification No. 1
dated June 1, 1982 (the "1981 Agreement"), shall become effective
on the effective date of Modification No. 2 and shall continue in
effect until terminated in accordance with that Modification.
SECTION 2.1 - SERVICES TO BE RENDERED
2.1 IPL agrees to provide temporary transmission services for the
purpose of delivering power (demand) and energy from any of the
interconnection points between IPL and Hoosier to the tap point
described and referred to in said Modification No. 2 as the Honey
Creek Tap Point.
2.2 Any power (demand) and energy delivered by IPL to the Honey
Creek Tap Point shall be simultaneously supplied to IPL from
Hoosier at any other interconnection point or points provided for
in the 1981 Agreement. The power and energy shall be adjusted to
compensate IPL for electrical losses incurred in the delivery of
such power. Any difference in power or energy delivered to Hoosier
through said tap point and that supplied by Hoosier to IPL shall be
settled for in accordance with Section 3.03 of the 1981 Agreement.
2.3 Hoosier agrees that the power (demand) delivered shall not
exceed fifteen (15) MW at the Honey Creek Tap Point.
SECTION 3 - COMPENSATION
3.1 Electric power measured in kilowatts delivered at the Honey
Creek Tap Point under this Service Schedule shall be billed at
$0.92 per kilowatt month. This demand charge for use of IPL's
transmission facilities shall be on the maximum hourly demand in
kilowatts, measured in the calendar month of billing, and shall be
adjusted to compensate IPL for losses in the IPL system and in the
transformer bank used at the Honey Creek Tap Point.
<PAGE>
Modification No. 3
To
INTERCONNECTION AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
And
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
Dated as of September 1, 1989
<PAGE>
MODIFICATION NO. 3
To
INTERCONNECTION AGREEMENT
Between
INDIANAPOLIS POWER & LIGHT COMPANY
And
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
THIS MODIFICATION NO. 3, dated as of this 1st day of September,
1989, between INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter called
"IPL"), an Indiana corporation, and HOOSIER ENERGY RURAL ELECTRIC
COOPERATIVE, INC. (hereinafter called "Hoosier"), an Indiana corporation,
WITNESSETH:
0.01 WHEREAS, there is now in force and effect between IPL and
Hoosier an interconnection agreement dated as of December 1, 1981, as
amended by a Modification No. 1 dated as of June 1, 1982 and Modification
No. 2 dated as of October 1, 1983 (such agreement as so amended being
hereinafter referred to as the "1981 Agreement"); and
0.02 WHEREAS, IPL desires to utilize, when and as requested,
certain electric transmission facilities of Hoosier to transmit power and
associated energy from Big Rivers Electric Corporation (hereinafter
called "Big Rivers") located in Kentucky to IPL over a 20-year period
beginning January 1, 1991; and
0.03 WHEREAS, Hoosier is willing to transmit such power and
associated energy from Big Rivers to IPL when and as requested over such
20 year period in accordance with the terms and conditions of this
Modification No. 3 and Service Schedule H annexed thereto, and
0.04 WHEREAS, Hoosier desires to extend Service Schedule G and IPL
is willing to extend Service Schedule G through December 31, 2010, in
accordance with the terms and conditions of this Modification No. 3 and
Service Schedule G annexed thereto, and
0.05 WHEREAS, both parties desire to revise and/or refile Service
Schedules A, B, C, D, E and F and file New Service Schedules A, B, C, D,
E, and F as part of this Modification No. 3.
ARTICLE 1
1.01 The 1981 Agreement shall be, and the same hereby is, amended
as follows:
I. Article 2 thereof is hereby amended by revising Section 2.01
to read as follows:
"2.01 It is the purpose of the parties hereto to realize on an
equitable basis, all reciprocal benefits practicable to be effected
through coordination in the operation and development of their
respective systems. It is understood by the parties that such
benefits may be realized under the stated terms and conditions of
the following interconnection services:
A. the furnishing of mutual emergency and standby
assistance, in accordance with Service Schedule A
annexed hereto;
B. the transfer of electric energy through the
transmission system of one party for the benefit of the
other, in accordance with Service Schedule B annexed
hereto;
C. the interchange, sale and purchase of energy to effect
operation economies, in accordance with Service
Schedule C annexed hereto;
D. the sale and purchase of short-term electric power and
energy available on the system of one party and needed
on the system of the other, in accordance with Service
Schedule D annexed hereto;
E. the sale and purchase of limited term power and energy
available on the system of one party and needed on the
system of the other, in accordance with Service
Schedule E annexed hereto;
F. the sale and purchase of diversity power and energy, in
accordance with Service Schedule F annexed hereto;
G. the temporary use of IPL transmission facilities to
provide service to Hoosier's Honey Creek Substation
which is not directly connected to its transmission
system, in accordance with Service Schedule G annexed
hereto;
H. the transfer of electric power and associated energy
from Big Rivers to IPL when and as requested in
accordance with Service Schedule H annexed hereto.
In furtherance of such purpose the parties hereto shall
create an Operating Committee as provided in Article 7
hereof."
and by amending Section 2.03 to read as follows:
"2.03 The respective service schedules shall be designated:
I. Service Schedule A - Emergency Service
II. Service Schedule B - Energy Transfer
III. Service Schedule C - Interchange Power
IV. Service Schedule D - Short Term Power
V. Service Schedule E - Limited Term Power (Firm)
VI. Service Schedule F - Diversity Power
VII. Service Schedule G - Temporary Transmission Service
VIII. Service Schedule H - Specific Transmission Service
such service schedules having been agreed upon between the Parties
hereto, are attached hereto, and made a part hereof, and marked
Exhibits I, II, III, IV, V, VI, VII and VIII respectively."
and by deleting Section 2.05 (as added by Modification No. 2) in its
entirety.
II. Article 7 thereof is amended by deleting there from Section
7.03 (as added by modification No. 2) in its entirety.
III. Article 9 thereof is hereby amended by revising Section 9.01
to read as follows:
"9.01 This agreement shall become effective at the date hereof,
subject to the filing requirements of FERC, or any other regulatory
authority having jurisdiction and to approval of any such
authority, if required, and except as otherwise provided in Service
Schedules G and H shall continue in effect through December 31,
2010, (the "Initial Term"), and thereafter for successive terms of
three (3) years each unless and until terminated as provided in
Section 9.03 thereof."
and by deleting Section 9.04 (as added by Modification No. 2) in its
entirety and by adding new Sections 9.04 and 9.05 to read as follows:
"9.04 If any regulatory authority having jurisdiction over
Modification No. 3 does not accept it for filing within ninety (90)
days after its submission, or requires any modification to its
rates, terms or conditions as a condition of accepting Modification
No. 3 for filing, either party may terminate Modification No. 3, if
in such party's good faith judgment such modification materially
changes the benefits or burdens to the party desiring to terminate.
In that event, such party may terminate Modification No. 3 by
notifying the other party in writing of its intention to so
terminate not more than thirty (30) days after final action is
taken not to accept Modification No. 3 for filing or which requires
such modification as a condition of such acceptance. Modification
No. 3 shall terminate thirty (30) days after receipt of such notice
by the other party.
"9.05 If at any time after acceptance of Modification No. 3 any
regulatory authority having jurisdiction over it modifies its
rates, terms or conditions, either party may terminate Modification
No. 3 if in such party's good faith judgment such modification
materially changes the benefits or burdens of Modification No. 3 to
the party desiring to terminate. In that event, such party may
terminate Modification No. 3 by notifying the other party in
writing within 90 days after the notice of its intention to so
terminate as well as the desired termination date."
IV. Article 10 shall be amended in its entirety to read as
follows:
"ARTICLE 10
"ARBITRATION
"10.01 Any controversy or claim arising out of or relating to
this agreement or any breach thereof, shall first be submitted in
writing as soon as practicable to the authorized representatives
and one of their respective alternates designated under Subsection
7.01 hereof, the 4 of whom shall constitute a Review Committee for
the purpose of reviewing the controversy or claim and reaching a
majority opinion as to the appropriate resolution thereof. In the
event a majority opinion of the Review Committee cannot be reached
within 30 days of submission, the matter shall be submitted to the
President of IPL and the General Manager of Hoosier who shall use
their best efforts to resolve such controversy or claim. If the
controversy or claim cannot be resolved within 30 days after
submission to the President and General Manager, the same shall be
settled by arbitration in accordance with the Commercial
Arbitration Rules of The American Arbitration Association and
judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. Arbitration proceedings
shall be conducted at Indianapolis, Indiana and arbitrators shall
make awards within 90 days of the date proceedings begin unless
otherwise agreed to in writing by the parties."
V. Article 11 shall be amended in its entirety to read as
follows:
"ARTICLE 11
"INDEMNIFICATION AND LIMITATION OF LIABILITY
"11.01 Limitation of Liability. In no event shall one party
be liable to the other party for any indirect, special, incidental
or consequential damages with respect to any claim arising out of
this agreement.
"11.02 Indemnification Clause. Each party shall indemnify, defend
and hold harmless the other party from and against any liability,
loss, cost, damage and expense because of injury or damage to
persons or property resulting from, or arising out of the use of
its own facilities or the production or flow of electric energy by
and through its own facilities, except when such injury or damage
is due to the sole negligence of the other party. In addition,
each party shall hold the other party harmless for any taxes,
licenses, permits, fees, penalties, or fines assessed against one
party upon any of the property of such party located on the
premises of the other party.
"11.03 Environmental Liability. Each party shall be responsible
for its own compliance with all applicable environmental
regulations, and each party shall hold the other party harmless
from any liability, loss, cost or expense arising out of, and shall
bear all costs arising from, its failure to comply with such
environmental regulations."
VI. Article 14 thereof is hereby amended by deleting Section
14.02 (as added by Modification No. 2) in its entirety.
VII. Article 16 thereof is hereby amended by deleting Section
16.03 (as added by Modification No. 2) in its entirety.
VIII. Article 20 and Article 21 are hereby added to the 1981
Agreement to read as follows:
"ARTICLE 20
"DEFAULT
"20.01 Default Defined. As used herein, "Default" shall mean the
failure of a party to make any payment or perform any obligation at
the time and in the manner required by this agreement, except where
such failure to discharge obligations (other than the payment of
money) is the result of Force Majeure. Failure to make any payment
in the time and manner required by this agreement shall not be
excused as a Default by payment of late charges in accordance with
the provisions in Section 20.02 below.
"20.02 Remedies For Default. Upon failure of a party to make a
payment or perform an obligation required hereunder, the other
party shall give written notice of Default to the defaulting party.
The defaulting party shall have thirty (30) days within which to
cure the Default. If a Default is not cured within such period,
the party not in Default, at its option, may, in addition to all
other rights and remedies available at law, in equity or under any
other provision of this agreement: (i) give notice to the
defaulting party of its intention to cure the Default and to take
such steps as such party deems necessary to cure the Default, or
(ii) suspend this agreement for a period of 6 months, after which
this agreement shall automatically terminate. The defaulting party
shall, in any event, pay to the other party the total of all
additional costs reasonably incurred by such other party as a
result of such Default and/or the curing of such Default,
including, reasonable attorneys' fees, money reasonably paid to
others, the reasonable equivalent in money for services of property
obtained, and any other costs reasonably incurred by such other
party in attempting to remedy such Default, together with interest
on the total of such costs at the per annum rate of two (2) percent
above the commercial lending rate as determined in Article 6
hereof. This provision is not intended as a liquidated damages
provision or to limit liability in any way, and the party not in
Default may also maintain such other actions for damages as may be
provided by law, in equity or under this agreement."
"ARTICLE 21
"FORCE MAJEURE
"21.02 Force Majeure. The term "Force Majeure" shall mean any
cause beyond the control of the party invoking the Force Majeure,
including, but not limited to, failure or threat of failure of
facilities, equipment or fuel supply, ice, act of God, flood,
earthquake, storm, fire, lightning, explosion, epidemic, war, civil
war, invasion, insurrection, military or usurped power, act of the
public enemy, riot, civil disturbance or disobedience, strike,
lockout, work stoppage, other industrial disturbance or dispute,
labor or material shortage, national emergency, sabotage, failure
of contractors or suppliers of materials; inability to obtain or
ship materials or equipment because of the effect of similar causes
on suppliers or carriers; restraint by court order or other public
authority or governmental agency, or action or non-action by, or
failure to obtain the necessary authorizations or approvals from,
or obtaining the necessary authorizations or approvals only subject
to unreasonable restrictions from, any governmental agency or
authority, which by the exercise of due diligence such party could
not reasonably have been expected to avoid. Nothing contained
herein shall be construed to require a party to settle any strike,
lockout, work stoppage or other industrial disturbance or dispute
in which it may be involved or to take an appeal from any judicial,
regulatory or administrative action. Any party rendered unable to
fulfill any of its obligations under this agreement by reason of
Force Majeure shall exercise due diligence to remove such inability
with all reasonable dispatch. In the event either party is unable,
in whole or in part, to perform any of its obligations by reason of
Force Majeure the obligations of the party relying thereon, insofar
as such obligations are affected by such Force Majeure, shall be
suspended during the continuance thereof but no longer. The party
invoking the Force Majeure shall specifically state the full
particulars of the Force Majeure and the time and date when the
Force Majeure occurred. Notices given by telephone under the
provisions of this Article shall be confirmed in writing as soon as
reasonably possible. When the Force Majeure ceases, the party
relying thereon shall give immediate notice thereof to the other
party. This agreement shall not be terminated by reason of Force
Majeure but shall remain in full force and effect."
ARTICLE 2
2.01 Except as hereinabove specifically amended, all other terms
and conditions of the 1981 Agreement and Modification No. 2 shall remain
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Modification No. 3 to be executed by their respective duly authorized
officers as of the day, month and year first written above.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill
Chairman and President
HOOSIER ENERGY RURAL ELECTRIC
COOPERATIVE, INC.
By /s/ J. Steven Smith for
Virgil E. Peterson
Executive Vice President
and General Manager
EXHIBIT I
<PAGE>
SERVICE SCHEDULE A
EMERGENCY SERVICE
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Subject to the provisions of subsection 2.2 of this Section 2, in
the event of a breakdown or other emergency in or on the system of either
party involving either sources of power or transmission facilities, or
both, impairing or jeopardizing the ability of the party suffering the
emergency to meet the loads of its system, the other party shall supply
to the party having the emergency such electric energy as the supplying
party is requested to deliver; provided, that neither party shall be
obligated to supply such emergency energy which, in the supplying party's
sole judgment, cannot be delivered without creating a hazard to or
economic burden upon its operations or without impairing or jeopardizing
the total load requirements of its system; and provided further, that
neither party shall be obligated to supply such emergency energy for a
period in excess of forty-eight consecutive hours during any single
emergency.
2.2 The parties recognize that the supply of electric energy as
provided for in subsection 2.1 of this Section 2 is subject to two
conditions which may preclude the delivery of such energy as so provided:
(a) the party requested to deliver electric energy may be suffering an
emergency in or on its own system as described in said subsection 2.1, or
(b) the system of the party of whom such request is made may be
delivering electric energy under a mutual emergency interchange
agreement, to the system of another interconnected company which is
suffering an emergency in or on its system. Under conditions as cited
under (a) above, neither party shall be considered to be in default
hereunder if unable to comply with the provisions of said subsection 2.1.
Under conditions as cited under (b) above, neither party shall be
considered to be in default hereunder if it is unable to comply with the
provisions of said subsection 2.1 provided that the aforesaid
interconnected company has suffered said emergency in or on its system
prior to and within forty-eight hours of that of the other party hereto
and that, if requested by said other party, such delivery of electric
energy to said interconnected company shall be discontinued within
forty-eight hours following the start of such delivery, and a subsequent
delivery shall be made for a full forty-eight hour period to said other
party in accordance with the provisions of said subsection 2.1.
2.3 If at any time the record over a reasonably prior period shows
clearly that either of the parties has failed to deliver energy in
accordance with and subject to the provisions of subsection 2.1 and
subsection 2.2 of this Section 2, either party, by written notice given
to the other party, may call for a joint study by the parties of the
reserve generating capacity in and provided for their respective systems
and of their respective system transmission facilities affecting the
supply and delivery of power and energy under the Agreement. It shall be
the purpose of such study to determine the adequacy or inadequacy of
reserve generating capacity and transmission facilities being provided to
meet the requirements of the parties' respective systems, reflecting
obligations under the Agreement, and, if inadequate, the extent of the
burden that one party may be placing upon the other. If it should be
found that one party is placing an unreasonable burden upon the other,
the party causing such burden shall take such measures as are necessary
to remove the burden from the other party, or the parties shall enter
into such arrangements as shall provide for equitable compensation to the
party being burdened.
SECTION 3 - COMPENSATION
3.1 Emergency Energy shall be settled for, at the option of the
supplying party, either by payment or by return of equivalent energy.
3.2 If the supplying party opts to receive payment for Emergency Energy
delivered, the receiving party shall pay the supplying party the greater
of:
3.21 110% of the out-of-pocket cost of supplying such Emergency
Energy that is generated from the supplying party's own
system, and, for energy purchased by the supplying party from
another interconnected system which is not a signatory to
this Agreement ("Third Party") at the request of the
receiving party, 100% of the amount paid to such Third Party
plus up to 3.46 mills per kilowatthour (consisting of up to
2.46 mills per kilowatthour for a transmission charge and 1
mill per kilowatthour for difficult to quantify energy
related costs) plus any transmission losses.
3.22 30 mills per kilowatthour of such Emergency Energy
3.3 If the supplying party opts to receive equivalent energy for
Emergency Energy delivered; such equivalent energy shall be returned at
times when the load conditions of the party originally supplying
Emergency Energy are substantially equivalent to the load conditions of
such party that existed when the Emergency Energy was delivered or, if
such party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts and at such times as,
the Operating Committee agrees will compensate the original supplying
party, for the difference in conditions.
<PAGE>
EXHIBIT II
AMENDED
SERVICE SCHEDULE B
ENERGY TRANSFER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - TRANSFER ARRANGEMENT
2.1 In carrying out the interconnected operation of their respective
systems as provided for under the Agreement, energy being received by a
portion of one party's system from another portion of its system or to
the system of another interconnected company, may flow over the
transmission facilities of the other party as a natural result of the
physical and electrical characteristics of the interconnected network of
transmission lines to which the parties are connected. Such flow of
energy may occur during periods when conditions of system operation are
normal or may occur during periods of emergency caused by the failure of
either sources of power or transmission facilities, or both. In respect
to such flow of energy (hereinafter called "energy transfer") the parties
agree as follows:
2.11 Such energy transfer over their respective transmission
facilities shall be permitted whenever such transfer occurs;
provided, that such energy transfer shall not be of such
magnitude or duration as to affect adversely, or jeopardize
the ability of, the party over whose system such energy
transfers occur to render or accept service to or from
companies with which it now has, or at any time hereafter may
have contractual arrangements for the interchange of power or
energy.
2.12 The parties recognize that in carrying out the provisions of
this Service Schedule, the above-described energy transfer,
either during periods when conditions of system operation are
normal or during periods of emergency, or both, may
eventually require the installation of additional
transmission facilities in order that such energy transfer
may be properly controlled to the end that the ability of the
party over whose system such energy transfers occur to meet
its own requirements, as described under 2.11 above, is not
affected adversely or jeopardized. In the event the need for
such additional transmission facilities becomes apparent to
either of the parties during any term of this Service
Schedule, upon written notice given by either party to the
other party and as soon as practicable following such notice,
the parties shall jointly reexamine conditions relating to
Energy Transfer. In such reexamination, if called for, the
parties shall agree upon such additional transmission
facilities as may be required to be installed, if any, and
upon an equitable basis for bearing the cost of installing,
maintaining and operating such facilities, if installed.
SECTION 3 - POWER AND ENERGY ACCOUNTING
3.1 The parties recognize that energy transfers as described under
Section 2 of this Service Schedule, except for such amounts of electrical
losses as may be incurred because of such energy transfers, are the
simultaneous acceptance and delivery of like amounts of power and energy
by and from the system of the party over whose system such energy
transfers occur. Power and energy associated with energy transfers,
including electrical losses associated therewith, shall be accounted for
each clock-hour as provided for under Article 5 of the Agreement. Proper
consideration to such electrical losses will be in accordance with the
manner agreed upon by the Operating Committee. It is understood by the
parties, however, that such electrical losses resulting from energy
transfers, to be taken as losses over and above the losses prevailing
under basic conditions agreed upon by the parties, shall be supplied
simultaneously by the party for whom such energy transfers are being
made. The parties agree that initially such basic conditions will be
established as those that exist when the scheduled net delivery between
the systems of the parties, and between their respective systems and the
systems of other interconnected companies, is zero kilowatts. It is
further understood that, from time to time, conditions may require the
establishment of different basic conditions for such purpose. Either
party by written notice given to the other party may call for a prompt
reexamination and reconsideration of matters pertinent to the
establishment of said basic conditions, whenever such reexamination
appears to be warranted, and the parties will thereupon agree to effect
such changes in the basic conditions, if any, that will equitably
compensate the parties for such losses. Should such reexamination be
required, a statement will be prepared by the parties which shall include
in detail the amounts of energy delivered and received by the parties
that are associated with energy transfer and the amounts of electrical
losses associated therewith.
Accepted and approved this 8th day of December, 1989.
HOOSIER ENERGY RURAL ELECTRIC INDIANAPOLIS POWER & LIGHT COMPANY
COOPERATIVE, INC.
By /s/ R.E. Jones /s/ J.C. Berlier
R.E. Jones, Division Manager J.C. Berlier, Vice President
Power Supply Supply Planning and Rates
<PAGE>
EXHIBIT III
SERVICE SCHEDULE C
INTERCHANGE POWER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
Economy Energy
2.1 Either party may arrange to purchase from the other party electric
energy ("Economy Energy") when it is possible to effect a saving thereby
and, when in the sole judgment of the supplying party, such energy is
available. Prior to each Economy Energy transaction, the amount of
energy, the time of its delivery, and the charge therefore shall be
determined by the parties. Receipt or delivery of Economy Energy may
also be arranged with other interconnected systems not parties to this
Agreement.
Non-Displacement Energy
2.2 It is recognized that occasions will arise when transactions under
subsection 2.1 above will be impracticable although a party may have
electric energy (herein called "Non-Displacement Energy") which it is
willing to make available from surplus capacity from its own system or
from outside sources, or both and which can be utilized advantageously
for short intervals by the other party. In such event, the party
desiring such receipt of energy shall notify the other party of the
extent to which it desires to obtain Non-Displacement Energy, and if the
other party, in its sole judgment, determines that Non-Displacement
Energy is available, schedules providing the period and extent of use
shall be mutually agreed upon. Neither party shall be obligated to make
any Non-Displacement Energy available to the other.
SECTION 3 - COMPENSATION
Economy Energy
3.1 The charge for Economy Energy purchased by either party from the
other shall be based on the principle that the purchasing party shall pay
the out-of-pocket cost of the supplying party such energy and that the
resulting savings to the purchasing party shall be equally shared by both
parties.
3.2 When Economy Energy is obtained from or delivered to a system
interconnected with either of the Parties which is not a signatory in the
Agreement ("Third Party"), payments among the participants in such a
transaction shall be based on the out-of-pocket costs of the supplying
party or Third Party providing the Energy and an allocation of the gross
savings, which are defined as the difference between (1) what the out-of-
pocket costs of the receiving party or Third Party would have been to
generate such Energy, and (2) the out-of-pocket costs of the supplying
party or Third Party providing the Energy. Such allocation shall be made
as provided in subsection 3.21 and 3.22 hereinbelow.
3.21 The transmitting party shall be paid (A) its cost of
purchasing the Energy supplied, plus (B) its costs of any
additional transmission losses incurred, plus (C) the greater
of fifteen percent of the gross savings remaining after
deducting all such payments for transmission losses or an
amount up to 3.46 mills per kilowatthour of Energy received
for transmission.
3.22 The supplying party or Third Party shall be paid its out-
of-pocket costs of providing the Energy, plus one-half of the
gross savings remaining after deducting all payments made
under subsection 3.21.
Non-Displacement Energy
3.3 Non-Displacement Energy delivered hereunder that is generated by
the supplying party's system shall be settled for either by return of
equivalent Energy or, at the option of the supplying party, by the
payment of the out-of-pocket costs of the supplying party generating such
Energy plus ten percent of such cost. If equivalent Energy is returned,
it shall be returned at times when load conditions of the receiving party
are equivalent to the load condition of such party at the time the energy
was delivered or, different conditions, such energy shall be returned in
such amounts, to be agreed upon by the operating committee, as will
compensate for the difference in conditions.
3.4 Non-Displacement Energy delivered under subsection 2.2 above that is
purchased by the supplying party from another interconnected system at
the request of the receiving party shall be settled for by the payment of
100 percent of the amount paid to such Third Party, plus up to 3.46 mills
per kilowatthour (consisting of up to 2.46 mills per kilowatthour for a
transmission charge plus 1 mill per kilowatthour for difficult to
quantify energy related costs) plus any transmission losses.
<PAGE>
EXHIBIT IV
SERVICE SCHEDULE D
SHORT TERM POWER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party, by giving the other party sufficient notice, may
reserve for periods of one or more days or weeks, such electric power
(herein called "Short Term Power") as the supplying party at that time
may have and is willing to supply as Short Term Power. The party asked
to supply Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by the
other party as Short Term Power. As used herein, the term "week" shall
mean any seven consecutive days.
2.2 The party desiring to reserve Short Term Power shall specify in a
notice to the other party the number of kilowatts and the period for
which it desires to reserve such power and the desired delivery schedule
for such power. The supplying party shall promptly acknowledge receipt
of such notice and, shall signify the extent of its ability and
willingness to supply power in accordance with the provisions of such
notice. Any such notice or acknowledgement thereof initially may be
given orally; however if requested by either party, it shall be confirmed
in writing and such confirmation shall be forwarded not later than the
third day following the date such oral notice is given, excluding
Saturdays, Sundays and holidays.
2.3 During the period the Short Term Power has been reserved as
provided in Section 2.2 above, the supplying party shall deliver upon
call electric energy (hereincalled "Short Term Energy") to the other
party at the delivery point or points set forth in Section 4.01 of the
Agreement in amounts not to exceed the number of kilowatts reserved.
However, in the event conditions arise during such period which could not
have been reasonably foreseen at the time Short Term Energy was reserved
and such conditions would cause the delivery of said power to be
burdensome to the supplying party, said party shall have the right to
require the purchasing party to reduce for any portion of such period the
amount of such energy being taken to the amount specified by the
supplying party. The purchasing party shall promptly comply with such
requirement of the supplying party.
SECTION 3 - COMPENSATION
3.1 The Party reserving Weekly or Daily Short Term Power shall pay the
supplying party the following Demand Charges:
3.11 WEEKLY SHORT TERM POWER -- For any week that Short Term
Power is reserved, up to $1.05 per kilowatt reserved;
less, for each day during any part of which the amount
of Weekly Short Term Power is reduced upon notice from
the supplying party, one-sixth (1/6) of the supplying
party's weekly demand rate per kilowatt for each
kilowatt reduction but not more than the rate agreed
upon for each kilowatt per month.
3.12 DAILY SHORT TERM POWER -- For any day that Short Term Power
is reserved, up to $0.21 per kilowatt reserved; less, for
each day during which the amount of Daily Short Term Power is
reduced upon notice by the supplying party, the demand charge
per kilowatt for each day during which any such reduction is
in effect shall be waived for each kilowatt of reduction.
3.13 THIRD PARTY WEEKLY SHORT TERM POWER -- For any week that
Weekly Short Term Power is reserved from a Third Party by the
supplying party for and at the request of the receiving
party, such Short Term Power shall be supplied at the rate of
up to $0.295 per kilowatt reserved per week plus the demand
charge paid therefore by the supplying party to the Third
Party in the event the amount of Weekly Short Term Power
reserved from a Third Party is reduced upon the request of
the Third Party, the demand charge for each day during which
such reduction is in effect shall be reduced by the amount of
which the demand charge payable by the supplying party is
reduced under its Agreement with such Third Party plus,
one-sixth (1/6) of the rate per kilowatt agreement upon under
this paragraph for each kilowatt of reduction per day, but
not more than the rate agreed upon for each kilowatt per
week.
3.14 THIRD PARTY DAILY SHORT TERM POWER -- For any day that Daily
Short Term Power is reserved from a Third Party by the
supplying party for and at the request of the receiving
party, such Short Term Power shall be supplied at the rate of
up to $0.059 per kilowatt reserved per day plus the demand
charge paid therefore by the supplying party to the Third
Party. In the event the amount of Daily Short Term Power
reserved from a Third Party is reduced upon the request of
the Third Party, the demand charge for each day during which
such reduction is in effect shall be reduced by the amount by
which the demand charge payable by the supplying party is
reduced under its Agreement with such Third Party plus, the
rate per kilowatt agreed upon under this paragraph for each
kilowatt of said reduction.
3.2 The reserving party shall pay the supplying party for all Weekly or
Daily Short Term Energy delivered at the following rates:
3.21 For each kilowatthour that is generated by the supplying
party's system, 100 percent of the out-of-pocket costs of
supplying Short Term Energy called for during such period,
plus 10 percent of such costs.
3.22 For each kilowatthour purchased by the supplying party from a
Third Party in order to supply the Short Term Energy called
for during such period, 100 percent of the amount of the
Energy charge paid therefore by the supplying party plus 1
mill per kilowatthour plus any transmission losses.
<PAGE>
EXHIBIT V
SERVICE SCHEDULE E
LIMITED TERM POWER (FIRM)
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - SERVICES TO BE RENDERED
2.1 Either party by giving the other party notice may reserve for
periods of not less than one (1) or more than twelve (12) months, such
electric power (hereincalled "Limited Term Power (Firm)") as the other
party may be willing to make available as Limited Term Power (Firm). The
party asked to supply Limited Term Power (Firm) shall be the sole judge
as to the amounts and periods that it has electric power available that
may be reserved by the other party as Limited Term Power (Firm).
2.11 To reserve Limited Term Power (Firm), the party desiring such
power shall specify in its notice to the supplying party the
number of kilowatts and the period for which it desires to so
reserve such power. The supplying party shall signify the
extent of its ability and willingness to comply with the
provisions of such notice. Any notice or any acknowledgement
of such notice that initially may be given orally shall be
confirmed thereafter in writing.
2.12 During each period that Limited Term Power (Firm) has been
reserved as above provided, the supplying party shall deliver
upon call electric energy (herein called "Limited Term Energy
(Firm)") to the other party at the delivery point or points
set forth in Section 4.01 of Article 4 of the Agreement in
any amount up to and including the number of kilowatts
reserved. However, in the event conditions arise during such
period which could not have been reasonably foreseen at the
time said power was reserved and such conditions would cause
the delivery of Limited Term Energy (Firm) to be burdensome
to the supplying party, the supplying party may, upon notice
to the reserving party reduce or interrupt the delivery of
such energy to preserve the integrity of, or to prevent or
limit any instability on, its system.
2.13 The Limited Term Power (Firm) billing demand for any period
shall be taken as equal to the number of kilowatts reserved
as Limited Term Power (Firm) for such period.
SECTION 3 - COMPENSATION
3.1 The party reserving Limited Term Power (Firm) shall pay the
supplying party the following Demand Charges:
3.11 MONTHLY LIMITED TERM POWER (FIRM) -- For any month that
Limited Term Power (Firm) is reserved, up to $5.50 per
kilowatt reserved; less, for each day during any part of
which the amount of Monthly Limited Term Power (Firm) is
reduced upon notice from the supplying party, one-twentieth
(1/20) of the supplying party's monthly demand rate per
kilowatt for each kilowatt of reduction but not more than the
rate agreed upon for each kilowatt per month.
3.12 THIRD PARTY MONTHLY LIMITED TERM POWER (FIRM) -- For any
month that Monthly Limited Term Power (Firm) is reserved from
a Third Party by the supplying party for and at the request
of the receiving party, such Monthly Limited Term Power
(Firm) shall be supplied at the rate of up to $1.28 per
kilowatt reserved per month plus the demand charge paid
therefore by the supplying party to the Third Party. In the
event the amount of Monthly Limited Term Power (Firm)
reserved from a Third Party is reduced upon the request of
the Third Party, the demand charge for each day during which
such reduction is in effect shall be reduced by the amount by
which the demand charge payable by the supplying party is
reduced under its Agreement with such Third Party plus,
one-thirtieth (1/30) of the rate per kilowatt agreed upon
under this paragraph for each kilowatt of reduction per day,
but not more than the rate agreed upon for each kilowatt per
month.
3.2 The reserving party shall pay the supplying party for all Monthly
Limited Term Energy (Firm) delivered at the following rates:
3.21 For each kilowatthour that is generated by the supplying
party's system, 100 percent of the out-of-pocket costs for
supplying Limited Term Energy (Firm) called for during such
period, plus 10 percent of such costs.
3.22 For each kilowatthour purchased by the supplying party from a
Third Party in order to supply the Limited Term Energy (Firm)
called for during such period, 100 percent of the amount of
the Energy charge paid therefore by the supplying party plus
1 mill per kilowatthour plus any transmission losses.
<PAGE>
EXHIBIT VI
SERVICE SCHEDULE F
DIVERSITY POWER
SECTION 1 - DURATION
1.1 This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.
SECTION 2 - DIVERSITY POWER
2.1 From time to time, because of differences in load patterns one of
the parties hereto may have excess capacity during one seasonal load
period at the same time the other party is experiencing its peak load
season. At such time it may be to the parties' mutual advantage to
schedule exchange of certain portions of any such excess capacity. Such
capacity shall be termed and is herein called "Diversity Power".
2.2 At any time Diversity Power transactions are agreed upon between
the parties, the party which purchases Diversity Power during one
seasonal load period shall be obligated to have available a like amount
of Diversity Power for the other party during the other seasonal load
period. Seasonal load period shall mean for the Summer seasonal load
Period, the months of April thru September and for the Winter seasonal
load period, the months of October thru March.
2.3 The party supplying Diversity Power shall provide reserve capacity
for the committed amount, equivalent to that provided for its own
customers, exclusive of customers with interruptible service contracts.
2.4 Energy associated with the reservation of Diversity Power shall be
scheduled by the purchasing party no less than 18 hours in advance of
receiving such energy. Energy receipts for a Monday shall be scheduled
no later than noon of the preceding Friday.
SECTION 3 - COMPENSATION
3.1 Demand Charges - There shall be no demand charge for Diversity
Power.
3.2 Energy Charges - Energy shall be billed at out-of-pocket cost plus
ten percent of such cost. In the event that any part of the
out-of-pocket costs includes energy purchased by the supplying Party,
only the energy portion of such purchase cost shall be included. Any
associated charges for demand, transmission, or other burden shall be
excluded.
<PAGE>
EXHIBIT VII
SERVICE SCHEDULE G
TEMPORARY TRANSMISSION USE
SECTION 1 - DURATION AND TERMINATION
1.1 This Service Schedule G, being part of Modification No. 3 to the
Agreement dated December 1, 1981 between Indianapolis Power & Light
Company ("IPL") and Hoosier Energy Rural Electric Cooperative, Inc.
("Hoosier") as amended by Modification No. 1 dated June 1, 1982 and
Modification No. 2 dated October 1, 1983 (the "1981 Agreement"), shall
become effective on January 1, 1991 and shall continue in effect unless
it is otherwise terminated in accordance with this Service Schedule G or
Modification No. 3.
1.2 Hoosier may elect to terminate Service Schedule G at any time
during its term. If such election is made prior to December 31, 1995,
Hoosier shall notify IPL at least 30 days in advance of the desired
termination date. If such election is made after December 31, 1995,
Hoosier shall notify IPL at least 1 year in advance of the desired
termination date.
SECTION 2 - SERVICES TO BE RENDERED
2.1 IPL hereby represents that it has, and currently projects that it
will have, sufficient capacity in its transmission system to provide
Hoosier with the transmission service contemplated by this Service
Schedule G. IPL hereby reserves and agrees to make available to Hoosier,
except as otherwise provided in Section 2.5 below, sufficient capacity in
said transmission system to provide for such transmission service
subject, however, to the capacity of such transmission system required to
serve the actual load of IPL's customers now and in the future.
2.2 IPL agrees to provide temporary transmission services to Hoosier
for the purpose of delivering up to 15 MW of power (demand) and energy
from any of the interconnection points between IPL and Hoosier to the tap
point described and referred to in Modification No. 2 as the Honey Creek
Tap Point. This temporary transmission service shall be available at all
times during the term of this Service Schedule G except as stated in
Section 2.5 of this Service Schedule.
2.3 Any power (demand) and energy delivered by IPL to the Honey Creek
Tap Point shall be simultaneously supplied to IPL from Hoosier at any
other interconnection point or points provided for in the 1981 Agreement.
The power and energy shall be adjusted to compensate IPL for electrical
losses incurred in the delivery of such power. Any difference in power
and energy delivered to Hoosier through said tap point and that supplied
by Hoosier to IPL shall be settled for in accordance with Section 3.03 of
the 1981 Agreement.
2.4 The parties shall plan, maintain and operate their respective
systems in accordance with sound engineering and operating practice, so
as to minimize the likelihood of disturbance(s) originating in either
party's system which might cause impairment of the transmission service
provided hereunder.
2.5 The Parties shall plan for continuous unrestricted operation to the
tap point at all times; provided, that either party may interrupt or
restrict service for necessary maintenance, system emergency, or if
either determines that its facilities may be damaged due to excessive
loadings caused by the transmission service provided hereunder. Should
such interruptions or restrictions occur, the parties shall cooperate to
restore such service to normal as soon as practicable. Excessive loads
are current flows exceeding the normal facility ratings with all
facilities in service, or current flows exceeding emergency facility
ratings under contingency conditions. Neither party shall be responsible
to the other party for damage or loss of revenue caused by such
restrictions or interruptions. Excessive loadings shall be verified by
either metering records or mutually agreed upon load flows. Maintenance
outages shall be coordinated between the parties whenever possible.
2.6 IPL shall periodically conduct studies of its future system, and if
such studies indicate problems due to IPL's load growth which may arise
in the future due to the transmission service provided hereunder, shall
as soon as practicable, develop plans and estimates of cost for the
installation of any additional equipment or facilities necessary to
effect a long term solution to such problem so that transmission services
hereunder may be reliably continued, and shall notify Hoosier of such
studies and plans. IPL shall use its best efforts to provide Hoosier
with a three year advance notice of any impending problems.
Upon approval of long term remedial plans by Hoosier, IPL shall proceed
to install required facilities, and upon completion thereof, Hoosier
shall commence reimbursement to IPL of Hoosier's proportionate share of
costs involved in designing and installing such facilities which shall be
calculated as a function of variables such as:
a) Share of existing facilities utilized by each party, and;
b) Timing of required capacity with and without Hoosier's 15 MW power
transfer; and
c) Useful life of new facilities, and;
d) Remaining term of Service Schedule, and;
e) Other consequential variables determined at the time when excessive
loadings are observed or mutually projected.
In the event Hoosier does not elect to participate in the remedial plans
prescribed above Hoosier may elect to continue service on a restricted
basis when necessary and on an unrestricted basis at all other times.
SECTION 3 - COMPENSATION
3.1 Electric power measured in kilowatts delivered at the Honey Creek
Tap Point under this Service Schedule shall be billed at $0.92 per
kilowatt month. This demand charge for use of IPL's transmission
facilities shall be on the maximum hourly demand in kilowatts, measured
in the calendar month of billing, and shall be adjusted to compensate IPL
for losses in the IPL system and in the transformer bank used at the
Honey Creek Tap Point.
<PAGE>
EXHIBIT VIII
SERVICE SCHEDULE H
SPECIFIC TRANSMISSION SERVICE
SECTION 1 - DURATION AND TERMINATION
1.1 This Service Schedule H, being part of Modification No. 3 to the
Agreement dated December 1, 1981 between Indianapolis Power & Light
Company ("IPL") and Hoosier Energy Rural Electric Cooperative, Inc.
("Hoosier") as amended by Modification No. 1 dated June 1, 1982 and
Modification No. 2 dated October 1, 1983 (the "1981 Agreement"), shall
become effective on January 1, 1991 and shall continue in effect through
December 31, 2010, unless terminated in accordance with this Service
Schedule H or Modification No. 3.
1.2 IPL may elect to terminate Service Schedule H at any time during
its term. If such election is made prior to December 31, 1995, IPL shall
notify Hoosier at least 30 days in advance of the desired termination
date. If such election is made after December 31, 1995, IPL shall notify
Hoosier at least 1 year in advance of the desired termination date.
SECTION 2 - SPECIFIC TRANSMISSION SERVICES TO BE RENDERED AND CONDITIONS
THEREOF
2.1 Hoosier shall provide Transmission Service to IPL for an amount up
to 50 MW from January 1, 1991 through December 31, 1992 and 100 MW
thereafter through December 31, 2010 for power and associated energy over
Hoosier's electrical transmission facilities from its interconnection
with Big Rivers (i.e., the 161 kV interconnection located in Hancock
County, Kentucky at the border with Spencer County, Indiana) to Hoosier's
interconnection with IPL (i.e., the 138 kV interconnection at IPL's
Petersburg Plant in Pike County, Indiana). Such transmission service
shall be available at all times during the term of this Service Schedule
H except as stated in Section 2.4 of this Service Schedule.
2.2 Hoosier hereby represents that it has, and currently projects that
it will have, sufficient capacity in its transmission system to provide
IPL with the transmission service contemplated by this Service Schedule
H. Hoosier hereby reserves and agrees to make available to IPL, except
as otherwise provided in Section 2.4 below, sufficient capacity in said
transmission system to provide for such transmission service subject,
however, to the capacity of such transmission system required to serve
the actual load of Hoosier's members now and in the future and to serve
Wabash Power Association, Inc. and Virginia Power Company under contracts
existing prior to the date of this Service Schedule H.
2.3 The parties shall plan, maintain and operate their respective
systems in accordance with sound engineering and operating practice, so
as to minimize the likelihood of disturbance(s) originating in either
party's system which might cause impairment of the transmission service
provided hereunder.
2.4 The parties shall plan for the continuous, unrestricted operation
of their Interconnection at all times; provided, that either party may
interrupt or restrict service for necessary maintenance, for system
emergencies or if either party determines that its facilities may be
damaged due to excessive loads caused by the transmission service
provided hereunder. Should such interruptions or restrictions occur, the
parties shall cooperate to restore such service to normal as soon as
practicable. Excessive loads are current flows exceeding the normal
facility ratings with all facilities in service, or current flows
exceeding emergency facility ratings under contingency conditions.
Neither party shall be responsible to the other party for damage or loss
of revenue caused by such restrictions or interruptions. Excessive
loadings shall be verified by either metering records or mutually agreed
upon load flows. Maintenance outages shall be coordinated between the
parties whenever possible.
2.5 Hoosier shall periodically conduct studies of its future system.
If such studies indicate problems due to the load growth of Hoosier's
members combined with sales to Wabash Power Association, Inc. and
Virginia Power Company under Contracts existing prior to the effective
date of this Service Schedule H which may arise in the future as the
result of the transmission service provided hereunder, Hoosier shall, as
soon as practicable, develop plans and estimates of cost for the
installation of any additional equipment or facilities necessary to
effect a long-term solution to such problem so that transmission services
hereunder may be reliably continued and shall notify IPL of such studies
and plans. Hoosier shall use its best efforts to provide IPL with a
3-year advance notice of any such impending problems.
Upon approval of long-term remedial plans by IPL, Hoosier shall proceed
to install required facilities, and upon completion thereof, IPL shall
commence reimbursement to Hoosier of IPL's proportionate mutually agreed
upon share of costs involved in designing and installing said facilities
which shall be calculated as a function of the following variables:
a) Share of existing facilities utilized by each party; and
b) Timing of required capacity with and without IPL's 100 MW power
transfer; and
c) Useful life of new facilities; and
d) Remaining term of Service Schedule; and
e) Other consequential variables determined as of when excessive loads
are observed or mutually projected.
In the event IPL does not elect to participate in the remedial plans
prescribed above, IPL may continue service on a restricted basis when
necessary and on an unrestricted basis all other times.
SECTION 3 - COMPENSATION AND BILLING
3.1 Throughout the term of this Service Schedule H the following firm
rates shall apply:
3.11 Demand Charge of $50,000/month for 50 MW transmission
capacity from January 1, 1991 through December 31, 1992 and a
demand charge of $100,000/month for 100 MW of transmission
capacity from January 1, 1993 through December 31, 2010.
3.12 Energy Charge of 1 mill/kWhr used up to a usage rate of 50 MW
per hour from January 1, 1991 through December 31, 1992 and a
usage rate of 100 MW per hour from January 1, 1993 through
December 31, 2010.
3.13 In the event the transmission capacity currently in effect is
reduced upon notice from Hoosier, the demand charge for each
day during which any such reduction is in effect (excluding
Saturdays and Sundays) shall be reduced by one-twentieth
(1/20) of Hoosier's monthly demand rate currently in effect
per kilowatt of reduction, but not more than the demand
charge for that month.
<PAGE>
MODIFICATION NO. 4
TO THE
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
THIS AMENDMENT made and entered into as of the 1st day of January, 1995
by Indianapolis Power & Light Company ("IPL"), being an Amendment to the
Interconnection Agreement between Hoosier Energy Rural Electric
Cooperative, Inc. ("Buyer") and IPL dated December 1, 1981 (the
"Agreement").
WITNESSETH:
WHEREAS, IPL and Hoosier Energy Rural Electric Cooperative, Inc., entered
into the Agreement on December 1, 1981, which Agreement has been amended
from time to time;
WHEREAS, the Agreement provides for the sale of power and energy by IPL
under Service Schedules described as:
Service Schedule A Emergency Service
Service Schedule C Interchange Power
Service Schedule D Short Term Power
Service Schedule E Limited Term Power
(Firm)
Service Schedule F Diversity Power
WHEREAS, the Agreement provides for the recovery of incremental costs or
"out-of-pocket" costs occasioned by the sale by IPL of electric energy;
WHEREAS, IPL has implemented its Emissions Constrained Dispatch Plan,
attached hereto;
WHEREAS, the rates for Emergency Service, Interchange Power, Short Term
Power, Limited Term Power (Firm), and Diversity Power, do not expressly
include the cost of replacing sulfur dioxide ("SO2") emission allowances
expended in order to provide such energy in compliance with Federal laws
governing SO2 emission;
WHEREAS, IPL desires to amend the Agreement to clarify recovery of out-
of-pocket costs occasioned by the sale of said energy as including the
recovery of the incremental cost of SO2 emission allowances;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions set forth herein; IPL desires to amend the Agreement as
follows:
Section 1. Compensation for SO2 Emission Allowances.
The Buyer shall compensate IPL for the consumption of Sulfur Dioxide
Emissions Allowances ("SO2 Allowances") directly attributed to electric
energy sales by IPL to Buyer under the Service Schedules. Such
compensation shall, at Buyer's option, be made by either supplying IPL
with the number of SO2 Allowances directly attributed to such energy
sales, or by reimbursing IPL for the incremental cost of such number of
SO2 Allowances, rounded to the nearest whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2 Allowances associated with
Buyer's energy purchases for the month, the cash amount due at billing
will be determined by multiplying the number of SO2 Allowances attributed
to the sale by the incremental cost of the SO2 Allowances, as determined
in Section 2.2, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will record or
transfer to IPL's account, the number of SO2 Allowances calculated below,
at the time cash settlement for the energy is due. In all cases, Buyer
will transfer to IPL's account the number of SO2 Allowances due IPL for
calendar year no later than January 15 of the following year. "Transfer
to IPL's account" shall mean, for purposes of the Amendment, the transfer
by the USEPA of the requisite number of SO2 Allowances to IPL's Allowance
Tracking System account and the receipt by IPL of the Allowance Transfer
Confirmation.
Section 2. Determination of SO2 Emission Allowances Due IPL.
Section 2.1. Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy sale
made by IPL shall be determined for each hour, by determining the
contribution from each of the unit(s) from which the energy sale is
being made for that hour. For each unit, the emission rate in
pounds of SO2 per million Btu will be determined each month, from
fuel sulfur content, control equipment performance, and continuous
emissions monitoring data. The emission rate and the unit heat
rate will be used to determine the SO2 Allowances used per
megawatt-hour ("MWH"). The energy from each unit attributable to
the sale, and the SO2 Allowances per MWH for each unit, will be
used to determine the number of SO2 Allowances attributable to the
sale.
Section 2.2 . Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic
dispatch of IPL's generating units in any month, will also be the
basis used to determine compensation for IPL's energy sales. The
incremental SO2 Allowances cost, in dollars per ton of SO2, shall
be determined each month and will be based on the Cantor Fitzgerald
offer price for SO2 Allowances, or if such is not available, the
another nationally recognized SO2 Allowance trading market price or
market price index, at the beginning of the month. The SO2
Allowance value may be changed at any time during the month to
reflect the more current incremental cost, or market price, for SO2
Allowances. Buyer will be notified of the new SO2 Allowance value
prior to dispatch of IPL energy to Buyer.
Section 3. Effective Date.
This Amendment to the Agreement shall be made effective as of January 1,
1995.
IN WITNESS WHEREOF, IPL has caused the foregoing Amendment to be signed
by its duly authorized officer, effective as of the date set forth above.
INDIANAPOLIS POWER & LIGHT COMPANY
By: /s/ John C. Berlier, Jr.
John C. Berlier, Jr.
Vice President
Resource Planning and Rates
EMISSIONS CONSTRAINED DISPATCH PLAN
Effective January 1, 1995
Economic Dispatch is loading each generating unit so the lowest cost
generation is called upon first to generate the power needed, thereby
minimizing total electric energy generation cost. Emissions Constrained
Dispatch is simply Economic Dispatch where the estimated value of the
SO2 allowances being consumed by a unit is included as a part of the
unit's cost of generation. A lower emitting unit will reflect a
relatively lower emissions cost because it requires fewer sulfur dioxide
(SO2) allowances.
IPL's plan to implement Emissions Constrained Dispatch is to incorporate
SO2 allowance values into the existing Energy Management System (load
dispatching system), which economically dispatches IPL's generation. As
the generation required (load) increases, the available unit with the
lowest incremental cost is dispatched to meet the increase. As the
generation demanded decreases, the unit with the highest incremental cost
is dispatched to reduce its generation, thereby minimizing cost.1
Currently, the Energy Management System uses incremental heat rates, along
with fuel and variable operation costs to determine the incremental cost of
generation on each unit in service. Effective January 1, 1995, SO2
emissions related costs will be included in each unit's incremental cost
prior to the incremental costs being compared to make the unit dispatch.
The incremental SO2 value will be in units of dollars per million British
Thermal Units ($/MMBTU) and computed by the following guidelines:
IPL plans to use EPA (Environmental Protection Agency)
certifiable data for SO2 emission rates in conjunction with
the incremental value of emission allowances to form the
emissions dispatch cost in units of $/MMBTU. Each
generating unit affected by the Clean Air Act will have its
own specific SO2 emissions data input into the Energy
Management System at the beginning of each month. That data
will remain for the month unless projected coal deliveries
for the month have an SO2 value that will change the current
dispatch. The Fuel Supply Organization will notify the System
Operation Office of the projected coal delivery SO2 emission
rate in #SO2/MMBTU, so that a correct So2 emission rate can
be input into the Energy Management System.
1 Optimization of unit loadings in the Energy Management System is
constrained by equipment physical limitations such as maximum rate of load
pickup or maximum load reduction rate on a unit as well as contrained by the
maximum and minimum capability of the units.
IPL's Treasury Organization will not less often than the 10th day
of each month supply the IPL System Operation Office the incremental
value of an emission allowance in units of dollars per ton of SO2
based upon the Cantor Fitzgerald asking price for allowances, or
other nationally recognized allowance trading market price, for use
in IPL's emission constrained dispatch on a forward going basis.
Beginning January 1, 1995, the allowance price that will be used
for purposes of IPL's emissions constrained dispatch will be the
asking price for allowances obtained from Cantor Fitzgerald on
December 30, 1994. The Treasury Organization will track the
emission allowance market and if a significant change in
allowance prices occurs within a given month, the Treasury
Organization may provide an updated allowance price value to the
IPL System Operation Office. The updated allowance price will
be entered into the Energy Management System and the economic
dispatch algorithm will be updated accordingly.
The emissions cost will be added with the fuel and variable operating cost
to produce a total dispatch cost. The total dispatch cost will be combined
with the incremental unit heat rate data to produce the total incremental
dispatch cost as calculated by the following formula:
INCREMENTAL COST = (Fuel Cost + Emissions Value Divided By
Variable Operating Cost) X Incremental
Heat Rate
The dimensions for each of the variables is as follows:
Emissions Value, $/MMBTU; Fuel Cost, $/MMBTU; Variable Operating
Cost $/MMBTU; Incremental Heat Rate, MMBTU/MWH; Allowance Value,
$/Allowance; Incremental Cost, $/MWH
The dispatch made using the total incremental cost, including SO2 emissions
related costs, will constitute IPL's Emissions Constrained Dispatch.
EXHIBIT 10.13
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
WABASH VALLEY POWER ASSOCIATION, INC.
FOR
INTERCHANGE WHOLESALE SALES AND PURCHASES UNDER
EMERGENCY SERVICE, ENERGY TRANSFER,
INTERCHANGE POWER, SHORT-TERM POWER,
LIMITED TERM POWER (FIRM) AND
DIVERSITY POWER SCHEDULES
<PAGE>
0.01 This Agreement, dated as of the 7th day of October, 1987, between
Indianapolis Power & Light Company ("IPL" or a "Party"), and Wabash
Valley Power Association, Inc. ("Wabash Valley" or a "Party"), both
Indiana corporations (the "Parties"):
WITNESSETH:
0.02 WHEREAS, IPL is a public utility engaged in the generation,
transmission, distribution and sale of electric power and energy in
Indiana; and
0.03 WHEREAS, IPL is interconnected with the Joint Transmission System
(hereinafter defined) that is jointly owned by Wabash Valley, Public
Service Company of Indiana, Inc. ("PSI") and the Indiana Municipal Power
Agency ("IMPA"); and
0.04 WHEREAS, Wabash Valley is a Not-For-Profit Corporation which
jointly owns the Joint Transmission System in the State of Indiana and is
engaged, among other things, in the generation, transmission and sale of
electric power and energy to Rural Electric Membership Corporations
serving customers in northern Indiana and southern Michigan; and
0.05 WHEREAS, the Parties believe mutual benefits can be realized from
conducting coordinated interconnected operation, such as the interchange,
sale and purchase of electric power and energy; and
0.06 WHEREAS, the Parties desire to fix the terms and conditions upon
which such interconnected operations may be conducted and upon which the
furnishing of interconnection services shall be effected;
0.07 NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.01 Joint Transmission System. The Joint Transmission System shall be
the transmission facilities jointly owned by PSI, Wabash Valley, and IMPA
consisting of PSI facilities functionally serving as transmission
facilities and facilities of Wabash Valley and IMPA connected to the
transmission facilities of PSI, all having an operating voltage of 69 KV
or higher, as defined in the Uniform System of Accounts prescribed by the
Federal Energy Regulatory Commission ("FERC").
1.02 Out-of-Pocket Cost. Out-of-Pocket Cost shall mean those costs of
generating electric energy in the generating stations of the system of
either Party which are incurred by the supplying system directly by
reason of its generating of such energy and which, otherwise, would not
have been incurred by such system. Out-of-Pocket Cost of electric energy
purchased from a source outside of the system of the supplying Party will
be the total amount paid therefor by the supplying Party which,
otherwise, would not have been paid by such Party.
ARTICLE 2
PROVISIONS REGARDING CONTINUITY OR
INTERRUPTION OF INTERCONNECTION OPERATIONS
2.01 Representations as to Facilities and Equipment. IPL hereby
represents that it owns and controls all the transmission, substation and
metering facilities and equipment necessary to implement and carry out
fully all the provisions, terms and conditions of this Agreement. Wabash
Valley hereby represents that it jointly owns the transmission,
substation and metering facilities and equipment necessary to this
Agreement and has obtained all right, power and authority from PSI and/or
IMPA that is necessary and proper for the implementation and carrying out
of all transactions of the Parties contemplated by this Agreement.
Wabash Valley hereby agrees that, notwithstanding anything in this
Agreement to the contrary, its implementation of and compliance with the
provisions, terms and conditions of this Agreement and its resultant
obligations and responsibilities hereunder shall not be excused because
of the nature or extent of Wabash Valley's ownership and control over the
transmission, substation and metering facilities and equipment it jointly
owns with PSI and IMPA.
2.02 Synchronous Operation. At the Points of Interconnection
(hereinafter defined) throughout the duration of this Agreement, subject
to the provisions of this Paragraph 2.02 and of Paragraph 2.03 below, IPL
and Wabash Valley systems shall be operated in continuous synchronism.
If synchronous operation of the systems at the Points of Interconnection
becomes interrupted either manually or automatically due to reasons
beyond the control of either Party or due to scheduled maintenance that
has been agreed to by both Parties, the Parties shall cooperate to remove
the cause of such interruption as soon as practicable and restore the
Points of Interconnection to normal operating conditions. Neither Party
shall be responsible to the other for any damage or loss of revenue
caused by such interruption.
2.03 Interruption of Operation. The Parties agree that either of them
may interrupt synchronous operation through the Points of Interconnection
if either determines that its facilities may be damaged due to excessive
loadings, and such loadings may be reduced or alleviated by such
interruption. If such interruption occurs, the Parties shall cooperate
to remove the cause of such loadings as soon as practicable and restore
the Points of Interconnection to normal operating condition. Neither
Party shall be responsible to the other for damage or loss of revenue
caused by such interruption.
The Parties further agree to study and negotiate the installation,
ownership, and cost of any additional equipment necessary to effect a
long-term solution to any such excessive loading herein described in the
event either Party determines that this interconnection contributes to
the excessive loading and requests such negotiation.
2.04 Maintenance of Equipment. The Parties shall each keep the lines,
together with all associated equipment and appurtenances that are located
on their respective sides of the Points of Interconnection, in a suitable
condition of repair at all times, each at its own expense, in order that
said lines will operate in a reliable and satisfactory manner and in
order that reduction in the capacity of said lines will be avoided to the
extent practicable.
2.05 New Interconnections. The Parties understand that each of their
transmission systems is interconnected with the electric transmission
systems of other electric utility companies and each has contracted for
other such interconnections and may hereafter during the term of this
Agreement desire to make additional interconnections with such companies
or with other electric utility companies. Each such additional
interconnection with another electric utility system shall be discussed
between the Parties and if, in the opinion of either Party, the
establishment of such interconnection will cause unreasonable transfers
of real power or reactive power through either system during normal
parallel operations as a result of the proposed additional
interconnection, before such additional interconnection is made, joint
load studies shall be conducted to determine the effect such
interconnection will have on the transmission systems of the Parties.
If, as the result of such studies it is the reasonable opinion of a Party
that the proposed additional interconnection would cause unreasonable
transfers of real power or reactive power through the electric
transmission system of such Party or otherwise impair the ability of such
Party to carry out its own obligations, then the Party proposing such
additional interconnection shall, before such proposed interconnection is
placed in service:
2.051 agree to compensate the other Party for the use of that
portion of its facilities determined to be dedicated to the
proposed additional interconnection; and/or
2.052 install and/or remove such equipment as reasonably may be
necessary to avoid such unreasonable transfers of power or reactive
power; or
2.053 abandon the establishment of such additional
interconnection.
<PAGE>
ARTICLE 3
SERVICES TO BE RENDERED
3.01 Interconnection Service Schedules. It is the purpose of the
Parties to realize on an equitable basis, all benefits practicable to be
effected through coordination in the operation and development of their
respective systems. It is understood by the Parties that such benefits
may be realized under the stated terms and conditions of the following
interconnection services:
3.011 Emergency Service. The furnishing of mutual emergency and
standby assistance, in accordance with Service Schedule A annexed
hereto.
3.012 Energy Transfer. The transfer of electric energy through
the transmission system of one Party for the benefit of the other,
in accordance with Service Schedule B annexed hereto.
3.013 Interchange Power. The interchange, sale, and purchase of
energy to effect operating economies, in accordance with Service
Schedule C annexed hereto.
3.014 Short-Term Power. The sale and purchase of short-term
electric power and energy available on the system of one Party and
desired by the other Party, in accordance with Service Schedule D
annexed hereto.
3.015 Limited Term Power (Firm). The sale and purchase of limited
term power and energy available on the system of one Party and
desired by the other Party, in accordance with Service Schedule E
annexed hereto;
3.016 Diversity Power. The sale and purchase of diversity power
and energy, in accordance with Service Schedule F annexed hereto.
3.02 Inasmuch as the specific services to be rendered in furtherance of
such purpose will vary, and the terms and conditions applicable to such
services may require modification from time to time while this Agreement
is in effect, it is intended that, except as provided in Paragraph 3.05
below, such specific services and the terms and conditions applicable
thereto be set forth in service schedules mutually agreed upon from time
to time between the Parties. Such service schedules, until and unless
changed by such mutual agreement, shall be those provided by Paragraph
3.03 below, each of which, while in effect, shall be deemed to be a part
of this Agreement.
3.03 The respective service schedules shall be designated as follows:
I. Service Schedule A - Emergency Service
II. Service Schedule B - Energy Transfer
III. Service Schedule C - Interchange Power
IV. Service Schedule D - Short-Term Power
V. Service Schedule E - Limited Term Power (Firm)
VI. Service Schedule F - Diversity Power
Such service schedules as agreed upon between the Parties are attached
hereto, made a part hereof, and marked Exhibits I, II, III, IV, V, and
VI, respectively.
3.04 Price Protection. Except as provided in Section 4.2 of Service
Schedule F, nothing in this Agreement shall require either Party to
purchase power or energy from a third party and resell it to the other
Party at a price less than the total cost of supplying such purchased
power or energy.
3.05 Specific Short-Term Power Purchase. Wabash Valley hereby agrees to
purchase from IPL and IPL agrees to provide to Wabash Valley, 100
megawatts of short-term power and energy beginning January 1, 1988
through December 31, 1988 at a demand rate of 47 cents/KW/week and an energy
rate of IPL's Out-of-Pocket Costs plus 10%. In all other respects, such
purchase and sale shall be in accordance with and subject to the terms
and conditions of this Agreement and of Service Schedule D hereof.
3.06 Energy Scheduling. As a general practice, the receiving Party
shall schedule energy deliveries on an hourly basis with the supplying
Party by 12:00 o'clock Noon, E.S.T., of the day before such energy is to
be delivered; thereafter, the supplying Party shall not be obligated to
schedule energy deliveries until the next day; provided, however, that
the Parties may schedule energy at such other times and upon such other
conditions and/or make such changes in existing energy schedules as both
Parties may agree upon in writing.
ARTICLE 4
SERVICE CONDITIONS
4.01 Control of System Disturbance. Each Party shall maintain and
operate its system in accordance with sound operating practice so as to
minimize the likelihood of disturbance originating in one system which
might cause impairment to the service of the other system or of any
system interconnected with the other system.
4.02 Control of Kilovar Exchange. It is intended that neither Party
shall be obligated to deliver kilovars for the benefit of the other
Party; also that neither Party shall be obligated to receive kilovars
when to do so may introduce objectionable operating conditions on their
respective systems. The Operating Committee shall be responsible for the
establishment from time to time of operating procedures and schedules, in
respect of carrying kilovar loads by one system for the other in order to
secure adequate service and economical use of the facilities of both
systems and in respect of proper charges, if any, for the use of
facilities carrying kilovar loads. In discharging such duties the
Operating Committee shall recognize that in the transmission and delivery
of power and energy hereunder the carrying of kilovar loads by either
Party, in harmony with sound engineering principles of transmission
operation with interconnected systems, is subject to numerous variables
contingent upon loading and operating conditions that my exist
simultaneously on both systems. The operating procedures and schedules
so set up by the Operating Committee shall be in accord with such
principles and shall require each Party to carry kilovar loads at such
times and in such amounts as will be equitable to both Parties.
4.03 Control of Unscheduled Power and Energy Deliveries. The Paries
shall exercise reasonable foresight in carrying out all matters related
to the providing and operating of their respective electric power
resources so as to minimize, to the extent practicable, deviations
between actual and scheduled deliveries of electric power and energy
between their systems. The Parties shall provide and install on their
respective systems such communication and telemetering facilities as are
essential to so minimize such deviations and, to avoid, to the extent
practicable, deviations from scheduled deliveries, shall fully cooperate
with each other and with third parties whose systems are directly or
indirectly interconnected with the systems of the Parties and who of
necessity, together with the Parties, must unify their efforts
cooperatively to achieve effective and efficient interconnected
operation. The Parties recognize, however, that, despite their best
efforts to prevent it, unscheduled deliveries of electric energy from one
Party to the other may occur. In such events, electric energy delivered
hereunder shall be settled for either by the return of equivalent energy
or by payment of the Out-of-Pocket Cost (such cost being at the Point or
Points of Interconnection set forth in Paragraph 5.01 below, taking into
account electrical losses incurred from the source or sources of such
energy to said Point or Points) of electric energy delivered hereunder to
the supplying Party plus ten percent of such cost. If equivalent energy
is returned, it shall be returned at times when the load conditions of
the Party receiving it are substantially equivalent to the load
conditions of such party at the time the energy for which it is returned
was delivered or, if such Party elects to have equivalent energy returned
under different conditions, it shall be returned in such amounts, to be
agreed upon by the Operating Committee, as will compensate such Party for
the difference in conditions.
<PAGE>
ARTICLE 5
DELIVERY POINTS, METERING POINTS, AND METERING
5.01 Points of Interconnection.
5.011 All electric energy delivered under this Agreement shall be
of the character commonly known as three-phase sixty hertz energy
and, except as otherwise provided in Paragraph 5.012 below, shall
be delivered at the IPL established points of interconnection
listed below ("Points of Interconnection"):
Petersburg substation of IPL near Petersburg, Indiana
Sunnyside substation of IPL near Oaklandon, Indiana
Five Points substation of PSI in Five Points, Indiana
Whitestown substation of PSI in Whitestown, Indiana
5.012 In addition to the Points of Interconnection, IPL has
interconnections with Indiana & Michigan Electric Company, Southern
Indiana Gas and Electric Company and Hoosier Energy Rural Electric
Cooperative, Inc. (each such utility being hereinafter referred to
as a "Third Party"). If Wabash Valley requests IPL to deliver
energy under this Agreement to a Third Party, Wabash Valley shall
be responsible for obtaining transmission agreements with such
Third Party for the transmission and delivery of energy to a
designated Third Party interconnection point for and on behalf of
Wabash Valley; provided, that IPL shall not be responsible to
Wabash Valley or such Third Party for such energy beyond such Third
Party interconnection point. Wabash Valley shall provide in
advance to IPL an information copy of each such transmission
agreement and a copy of each PSI, IMPA and Third Party letters
concurring with each of such transactions. In addition, Wabash
Valley shall obtain IPL's consent in writing to such Third Party
transaction, which consent shall not be unreasonably withheld.
5.02 Metering Points. Electric power and energy supplied under this
Agreement shall be measured by suitable metering equipment, at the
voltages and metering points specified below ("Metering Points") and at
such other points, voltages, and ownership as may be agreed upon by the
parties in a written amendment hereto:
345 KV meters owned by IPL at the Petersburg substation of
IPL.
138 KV meters owned by IPL at the Petersburg substation of
IPL.
345 KV meters owned by IPL at the Sunnyside substation of
IPL.
138 KV meters owned by IPL at the Five Points substation of
PSI.
345 KV meters owned by IPL at the Whitestown substation of
PSI.
5.03 Metering Equipment. Suitable metering equipment at the metering
points provided in Paragraph 5.01 above shall include electric meters,
potential and current transformers, and such other appurtenances as shall
be necessary to give for each direction of flow the following quantities:
a continuous automatic graphic record of both kilowatts and kilovars; an
automatic record of the kilowatthours for each clock hour; and a
continuous integrating record of the kilowatthours.
5.04 Measurement of Electric Energy. Measurement of electric energy
under this Agreement shall be made by standard types of electric meters
installed and maintained at the Metering Points. The timing devices of
meters shall be synchronized as closely as practical. All meters shall
be sealed, and the seals shall be broken only when the meters are to be
tested or adjusted.
5.05 Access to Meters and Records. Authorized Representatives
(hereinafter defined) of both Parties shall have reasonable access to the
premises where the meters are located and to the records made by the
meters.
5.06 Meter Testing. Each Party shall routinely test or have tested the
above-referenced meters and shall maintain records of meter accuracy all
in accordance with prudent utility practices. Each Party shall have the
right, at its expense, to require that the other Party conduct a special
test of its meters as soon as practicable; provided, that if such test
shows the meter to be more than two percent (2%) inaccurate, the Party
owning the meter shall bear the cost of such test. Representatives of
both Parties shall be notified and afforded the opportunity to be present
at all routine or special tests and whenever any readings are taken from
meters not providing an automatic record. Both Parties shall be provided
with a schedule of routine testing dates for metering equipment which
measures transactions entered into pursuant to this Agreement.
5.07 Adjustments Due to Inaccuracies. If any metering equipment test
discloses an inaccuracy exceeding two percent (2%), the energy account
between the Parties shall be adjusted to correct for the inaccuracy
disclosed over the shortest of the following periods; (i) for the six (6)
month period immediately preceding the day of the test, or (ii) for the
period that such inaccuracy may be determined to have existed, or (iii)
if the last test took place within the immediately preceding six month
period and the period of inaccuracy cannot be determined, for the period
since the last test. Should the metering equipment fail to register, the
amount of electric power and energy delivered shall be determined from
the best available data.
5.08 Communication, Telemetering And Load Control Facilities. Each
Party shall provide such communication, telemetering and load control
facilities as are now or may hereafter be determined and agreed upon by
the Parties as necessary for the proper and efficient interconnection
operation of the Parties' systems.
ARTICLE 6
RECORDS AND STATEMENTS
6.01 Records. In addition to records of the metering provided for in
Article 5 hereof, the Parties shall keep complete records as may be
needed to substantiate a clear history of the various deliveries of
electric energy made, and of the clock-hour integrated demands in
kilowatthours delivered, by one Party to the other. In maintaining such
records, the Parties shall effect such segregations and allocations of
demands and electric energy delivered into classes representing the
various services and conditions as may be needed to effect settlements
under this Agreement. All such records shall be retained by the Party
keeping the records. A Party's records shall be available at all
reasonable times for inspection by the other Party's Representative and
may be copied at such other Party's expense.
6.02 Statements. As promptly as practicable after the end of each
calendar month, the Parties shall cause to be prepared a statement
setting forth the electric power and energy transactions between the
Parties during such month in such detail and with such segregations as
may be needed for operating records or for settlements under this
Agreement.
ARTICLE 7
BILLINGS, PAYMENTS AND BILLING DISPUTES
7.01 All bills for amounts owed by one Party to the other shall be due
and payable on the fifteenth (15th) day of the month next following the
month in which the service was provided, or on the tenth (10th) day after
receipt of a bill therefor, whichever is later. Interest on unpaid
amounts shall accrue at the annual rate of five percent (5%) above the
prime commercial lending rate established from time to time by Merchants
National Bank and Trust Company of Indianapolis, Indiana (the "Prime
Lending Rate") and is payable from the date the bill is due to the date
of payment. The term "month" shall mean a calendar month for the purpose
of settlements under this Agreement.
7.02 Billing Disputes. If either Party disputes the correctness of a
bill, it will, nevertheless, pay the undisputed portion of such bill plus
a minimum of one-half (1/2) of the disputed amount and shall submit to
the other Party a written statement detailing the items disputed. If the
Parties are unable to agree upon the disputed items, such items shall be
submitted to the Operating Committee for decision. Should the Operating
Committee be unable to reach a decision, the matter shall be submitted to
the President of IPL and the General Manager of Wabash Valley for
decision. Any refund or additional payment ordered by the Operating
Committee or by the President of IPL and General Manager of Wabash Valley
shall be subject to interest computed at the Prime Lending Rate existing
at the time of the refund or additional payment plus five percent (5%),
said interest to be calculated, in the case of a refund, from the date
the amount to be refunded was paid to the date of the refund and, in the
case of an additional amount ordered to be paid, from the original due
date to the payment date.
ARTICLE 8
OPERATING COMMITTEE
8.01 Operating Committee Organization And Duties. To coordinate the
operation of their respective generation, transmission and substation
facilities in order that the advantages to be derived under this
Agreement may be realized by the Parties hereto to the fullest extent
practicable, the Parties shall establish a committee of authorized
representatives to be known as the Operating Committee. Each Party shall
designate in a writing delivered to the other Party, the person who is to
act as its representative on the Operating Committee and each person who
may serve as alternates whenever such representative is unable to act
("Representatives"). Each of such Representatives shall be persons
familiar with the generation, transmission, and substation facilities of
the system of the Party he or she represents, and each shall be fully
authorized (i) to cooperate with the other Representatives and (ii) to
determine and agree from time to time, in accordance with this Agreement
and with any other relevant agreements then in effect between the
Parties, upon the following:
8.011 All matters pertaining to the coordination of the
maintenance of generation and transmission facilities of the
Parties.
8.012 All matters pertaining to the control of time, frequency,
energy flow, kilovar exchange, power factor, voltage, and other
similar matters bearing upon the satisfactory synchronous operation
of the systems of the Parties.
8.013 Such other matters not specified herein in respect of which
cooperation, coordination, and agreement as to quantity, time,
method, terms and conditions are necessary to the efficient
operation of the respective systems of the Parties, to the end that
the intent and purpose of this Agreement shall be realized by the
Parties to the fullest extent practicable.
8.02 Operating Committee Access. For the purpose of inspection and
reading of meters, checking of pertinent records and related matters, the
Representatives shall have the right of access at any reasonable time to
all facilities and equipment of the Parties used or to be used in the
performance of this Agreement.
8.03 Operating Committee Expenses. Each Party shall be responsible for
the expenses of its members; provided that any expense jointly incurred
by the Operating Committee in performing its duties shall be shared
equally by the Parties.
8.04 Operating Committee Meetings. The Operating Committee shall meet
at least annually at a time and place mutually agreed to by the
Representatives. On request of any Representative, a special meeting
shall be arranged not more than five working days after the request
unless the Party requesting the meeting agrees to a later date.
Attendance at the meetings shall not be limited to Representatives;
however, the Parties recognize the practical necessity of limiting
attendance of non-Representatives to those who are expected to take an
active part on the agenda for a given meeting.
8.05 Agreement Not To Be Modified By Committee. The Operating Committee
shall not have authority to modify any of the terms or conditions of this
Agreement.
8.06 Change of Representatives. Each Party shall give prompt written
notice to the other Party of any change in designation of its primary or
alternate Representative on the Operating Committee.
8.07 Unresolved Disputes. If the Operating Committee shall be unable to
take action on any matter to be acted upon by it under this Agreement
because of a dispute between the Representatives as to such matter, then
the matter shall be referred to the President of IPL and the General
Manager of Wabash Valley.
ARTICLE 9
CONTINUITY AND SUSPENSION OF SERVICE,
RELATIVE RESPONSIBILITIES
9.01 Continuity and Suspension of Service. Each Party shall exercise
reasonable care and foresight to maintain continuity of service as
provided in this Agreement, but neither Party shall be considered in
Default (hereinafter defined) in respect of any obligation hereunder if
prevented from fulfilling such obligation by reason of Force Majeure as
defined in Article 11 below. In no event shall either Party be liable to
the other Party for loss or damage arising from failure, interruption or
suspension of service. Each Party reserves the right to suspend service
without liability at such times and for such periods and in such manner
as it deems advisable, including, without limitation, suspensions for the
purpose of making necessary adjustments to, changes in, or repairs on,
its facilities, and suspensions in cases where, in its sole opinion, the
continuance of service to the other Party would endanger persons or
property. Both Parties shall use their best efforts to provide each
other with reasonable notice in the event of suspension of service.
9.02 Relative Responsibilities. Each Party assumes all responsibility
for receipt and delivery of electricity on its system to and from its
Points of Interconnection. Neither Party assumes any responsibility with
respect to the construction, installation, maintenance or operation of
the system of the other Party or of the systems of third parties, in
whole or in part. Neither Party shall, in any event, be liable for
damage or injury to any persons or property, whatsoever, arising,
accruing or resulting from, in any manner, the receiving, transmission,
control, use, application or distribution by the other Party of said
electricity. Each Party shall use reasonable diligence to maintain its
facilities in proper and serviceable condition, and shall take reasonable
steps and precautions for maintaining the services agreed to be provided
and received under this Agreement.
ARTICLE 10
TERM OF AGREEMENT
10.01 Effective Date. The effective date of this Agreement (the
"Effective Date") shall be the date as of which all conditions precedent
set forth in Paragraph 13.01 below have been satisfied. Such Effective
Date shall be specified in a writing executed by both Parties. The
Parties agree to use their best efforts to support and cooperate with
each other to satisfy said conditions precedent.
10.02 Term. The term of this Agreement and of the annexed Service
Schedules shall begin on the Effective Date and continue through December
31, 1997 (the "Initial Term"); thereafter, the Agreement and Service
Schedules shall continue for successive terms of three (3) years each
until terminated pursuant to notice given by either Party to the other or
otherwise terminated under Paragraphs 18.01 or 19.03 below. Any notice
of termination given hereunder shall be given in writing, at least two
(2) years prior to the end of the Initial Term or any successive term,
and may be delivered at any time after the Effective Date of this
Agreement; provided, that this Agreement shall not be deemed to have
terminated until all prior commitments for sales or purchases of power
and energy under this Agreement have been fulfilled and all payments
therefor have been made.
ARTICLE 11
FORCE MAJEURE
11.01 Force Majeure. The term "Force Majeure" shall mean any cause
beyond the control of the Party invoking the Force Majeure, including,
but not limited to, failure or threat of failure of facilities, equipment
or fuel supply, ice, act of God, flood, earthquake, storm, fire,
lightning, explosion, epidemic, war, civil war, invasion, insurrection,
military or usurped power, act of the public enemy, riot, civil
disturbance or disobedience, strike, lockout, work stoppage, other
industrial disturbance or dispute, labor or material shortage, national
emergency, sabotage, failure of contractors or suppliers of materials,
inability to obtain or ship materials or equipment because of the effect
of similar causes on suppliers or carriers, restraining by court order or
other public authority or governmental agency, or action or non-action
by, or failure to obtain the necessary authorizations or approvals from,
or obtaining of the necessary authorizations or approvals only subject to
unreasonable restrictions from, any governmental agency or authority,
which by the exercise of due diligence such Party could not reasonably
have been expected to avoid. Nothing contained herein shall be construed
to require a Party to settle any strike, lockout, work stoppage or other
industrial disturbance or dispute in which it may be involved or to take
an appeal from any judicial, regulatory or administrative action. Any
Party rendered unable to fulfill any of its obligations under this
Agreement by reason of Force Majeure shall exercise due diligence to
remove such inability with all reasonable dispatch. In the event either
Party is unable, in whole or in part, to perform any of its obligations
by reason of Force Majeure the obligations of the Party relying thereon,
insofar as such obligations are affected by such Force Majeure, shall be
suspended during the continuance thereof but no longer. The Party
invoking the Force Majeure shall specifically state the full particulars
of the Force Majeure and the time and date when the Force Majeure
occurred. Notices given by telephone under the provisions of this
Article shall be confirmed in writing as soon as reasonably possible.
When the Force Majeure ceases, the Party relying thereon shall give
immediate notice thereof to the other Party. This agreement shall not be
terminated by reason of Force Majeure but shall remain in full force and
effect.
ARTICLE 12
DEFAULT
12.01 Default Defined. As used herein, "Default" shall mean the failure
of a Party to make any payment or perform any obligation at the time and
in the manner required by this Agreement, except where such failure to
discharge obligations (other than the payment of money) is the result of
Force Majeure. Failure to make any payment in the time and manner
required by this Agreement shall not be excused as a Default by payment
of late charges except with respect to a Default cured in accordance with
the provisions in Paragraph 12.02 below.
12.02 Remedies for Default. Upon failure of a Party to make a payment or
perform an obligation required hereunder, the other Party shall give
written notice of Default to the Defaulting Party. The Defaulting Party
shall have thirty (30) days within which to cure the Default. If a
Default is not cured within such period, the Party not in Default, at its
option, may, in addition to all other rights and remedies available at
law, in equity or under any other provision of this Agreement: (i) give
notice to the Defaulting Party of its intention to cure the Default and
to take such steps as such Party deems necessary to cure the Default, or
(ii) suspend this Agreement for a period of 6 months, after which this
Agreement shall automatically terminate. The Defaulting Party shall, in
any event, pay to the other Party the total of all additional costs
reasonably incurred by the Party as a result of such Default and/or the
curing of such Default, including reasonable attorneys' fees, money
reasonably paid to others, the reasonable equivalent in money for
services or property obtained, and any other costs reasonably incurred by
such non-Defaulting Party in attempting to remedy such Default, together
with interest on the total of such costs at the per annum rate of five
(5) percent above the Prime Lending Rate. This provision is not intended
as a liquidated damages provision or to limit liability in any way, and
the Party not in Default may also maintain such other actions for damages
as may be provided by law, in equity or under this Agreement.
ARTICLE 13
CONDITIONS PRECEDENT TO EFFECTIVENESS
OF AGREEMENT AND AMENDMENTS
13.01 Conditions Precedent. The Effective Date of this Agreement is
conditional upon the approval by the United States Bankruptcy Court
having jurisdiction over the property and operations of Wabash Valley and
the approval or acceptance of this Agreement by FERC and any other
regulatory authority or other governmental agency having jurisdiction.
If any of the terms and conditions of this Agreement are altered or made
impossible of performance by order, rule, or regulation of said Court or
of any such regulatory agency and, as a result, the Parties hereto are
unable to agree upon a modification of such terms and conditions that
will satisfy such order, rule or regulation, then neither Party shall be
liable to the other for failure thereafter to comply with such terms and
conditions; provided, that if either Party deems that the impossibility
of such performance results in a substantial loss of the benefits to be
derived from this Agreement, this Agreement may be terminated forthwith
upon notice.
13.02 Cooperation With FERC Filing. Both Parties recognize and agree
that this Agreement must be filed with the FERC, and both Parties agree
to jointly request acceptance for filing of this Agreement without
suspension by the FERC. In this connection, both Parties agree that each
of them will execute any and all documents, duly authorize all officers
or agents as necessary, and do all other things necessary and appropriate
to secure acceptance for filing of this Agreement, including the terms
and conditions and the initial rates and charges hereof, by the FERC
without suspension, or change or modification in the terms hereof.
13.03 Amendments. Except as otherwise provided in Paragraph 19.02 below
or in the provisions of the Service Schedules, this Agreement may be
amended only by mutual agreement of the Parties, which amendment shall be
in writing and shall become effective upon satisfaction of the above
Conditions Precedent applicable thereto.
ARTICLE 14
INDEMNIFICATION AND LIMITATION OF LIABILITY
14.01 Limitation of Liability. In no event shall one Party be liable to
the other Party for any indirect, special, incidental or consequential
damages with respect to any claim arising out of this Agreement.
14.02 Indemnification Clause. Each Party shall indemnify, defend and
hold harmless the other Party from and against any liability, loss, cost,
damage and expense because of injury or damage to persons or property
resulting from, or arising out of the use of its own facilities or the
production or flow of electric energy by and through its own facilities,
except when such injury or damage is due to the sole negligence of the
other Party. In addition, each Party shall hold the other Party harmless
for any taxes, licenses, permits, fees, penalties, or fines assessed
against one Party upon any of the property of such Party located on the
premises of the other Party.
14.03 Each Party shall be responsible for its own compliance with all
applicable environmental regulations, and each Party shall hold the other
Party harmless from any liability, loss, cost or expense arising out of,
and shall bear all costs arising from, its failure to comply with such
environmental regulations.
<PAGE>
ARTICLE 15
TAXES
15.01 If at any time during the term of this Agreement there should be
levied or assessed against either of the Parties any direct taxes by any
taxing authority on the power and/or energy generated, purchased, sold,
transmitted, interchanged, or exchanged under this Agreement, which taxes
are in addition to or different from the forms of direct taxes being
levied or assessed on the date of this Agreement and such direct taxes
results in increasing the cost to either or both Parties of carrying out
the provisions of this Agreement, then the rates and charges for such
power and/or energy furnished hereunder shall be increased automatically
to the extent necessary to make adequate and equitable allowance for such
taxes.
ARTICLE 16
WAIVERS
16.01 Any waiver by either Party of its rights under this Agreement,
shall not be deemed a waiver with respect to any rights that subsequently
accrue. Any delay, less than the statutory period of limitations, in
asserting or enforcing any rights under this Agreement, shall not be
deemed a waiver of such rights.
ARTICLE 17
INSURANCE
17.01 Insurance. Each Party shall be responsible for the procurement and
maintenance of its own property, casualty and third-party liability
insurance to adequately protect its personnel and property and to cover
its liabilities and responsibilities under this Agreement.
ARTICLE 18
ASSIGNMENT
18.01 Assignment of Agreement. This Agreement shall inure to the benefit
of, and be binding upon, the respective successors and assigns of the
Parties and, insofar as permitted by law, on any trustee appointed for a
Party under the United States Bankruptcy Code; and this Agreement may not
be assigned by either Party, without the written consent of the other
Party. In the event either Party is liquidated or dissolved as a
corporation or otherwise terminates its business operations, this
Agreement shall become null and void and all obligations under this
Agreement and the Service Schedules, except financial obligations
incurred prior to such event shall cease upon the date of such event.
ARTICLE 19
MISCELLANEOUS
19.01 Prudent Utility Practices. The Parties shall discharge all
obligations under this Agreement in accordance with prudent utility
practices.
19.02 Change in Rates. Nothing herein shall be construed as affecting in
any way the right of Wabash Valley to unilaterally make a change in rates
or charges applicable to the furnishing of service by Wabash Valley under
this Agreement provided such change is approved by appropriate state
and/or federal regulatory authority. Nothing contained herein shall be
construed as affecting in any way the right of IPL in furnishing service
under these rate schedules to unilaterally make application to the FERC
for a change in rates under Section 205 of the Federal Power Act and
pursuant to the FERC's Rules and Regulations promulgated thereunder.
19.03 No Partnerships; Tax Matters. Notwithstanding any provision of
this Agreement to the contrary, the Parties do not intend to create
hereby any joint venture, partnership, association taxable as a
corporation, or other entity for the conduct of any business for profit,
and any construction of this Agreement to the contrary which has an
adverse tax effect on either Party shall render this Agreement null and
void from its inception.
19.04 Survivorship Of Certain Obligations. Notwithstanding Paragraph
19.03 above, the voidance of this Agreement shall not discharge any Party
from any obligation it owes to the other Party under this Agreement by
reason of any transaction, loss, cost, damage, expense or liability which
shall have occurred or arisen after the Effective Date of this Agreement,
but prior to such voidance. It is the intent of the Parties that should
this Agreement be voided under Paragraph 19.03 above, the satisfaction of
any such obligation and the provisions for indemnification and limited
liability of Article 14 above shall constitute a separate agreement
between the Parties that is severable from this Agreement and, as such,
shall remain in full force and effect for actions that occurred prior to
the voidance of this Agreement.
19.05 Computation of Time. In computing any period of time prescribed or
allowed by this Agreement, the day of the act, event, or default from
which the designated period of time begins to run shall be excluded but
the last day of such period shall be included, unless it is a Saturday,
Sunday, or legal holiday, in which event the period shall run until the
end of the next business day which is not a Saturday, Sunday, or legal
holiday.
19.06 Section Headings Not To Affect Meaning. The descriptive headings
of the Articles and paragraphs of this Agreement have been inserted for
convenience only and shall not modify or restrict any of the terms and
provisions thereof.
ARTICLE 20
NOTICES
20.01 Notices Relating to Provisions of this Agreement. Any notice,
demand or request made by a Party to the other Party pursuant to any
provision of this Agreement shall be made in writing and shall be
delivered in person, by prepaid telegram or by registered or certified
mail to the named officer of the Party at the address listed below;
provided, that either Party may, from time to time, change such
designated officer or the address thereof by giving written notice of
such change to the other Party.
TO IPL:
President
Indianapolis Power & Light Company
P. O. Box 1595B
Indianapolis, IN 46206
TO Wabash Valley:
General Manager
Wabash Valley Power Association, Inc.
722 North High School Road
P. O. Box 24700
Indianapolis, IN 46224
20.02 Notices Of An Operating Nature. Any notice, request or demand
pertaining to matters of an operating nature may be served in person or
by United States mail, messenger, telephone, or telegraph, as
circumstances dictate, to a Representative; provided, that should the
same not be written, confirmation thereof shall be made in writing as
soon as practicable thereafter, upon request of the Party being served.
<PAGE>
ARTICLE 21
GOVERNING LAW AND CONSTRUCTION OF AGREEMENT
21.01 This Agreement shall be governed by and construed according to the
laws of the State of Indiana.
ARTICLE 22
ENTIRE AGREEMENT CONTAINED HEREIN
22.01 This is the entire agreement between the Parties and no oral or
other written representations shall have the affect of amending or
modifying this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective duly authorized officers and their respective
corporate seals to be hereunto affixed as of the date first above
written.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Robert W. Hill
Robert W. Hill, President and
Chief Operating Officer
ATTEST:
By /s/ Marcus E. Woods
Marcus E. Woods, Vice President,
Secretary and General Counsel
WABASH VALLEY POWER ASSOCIATION,
INC.
By /s/ Edwin G. Beucler
Edwin G. Beucler, President
ATTEST:
By: /s/ Joe R. Clem
Joe R. Clem, Secretary
<PAGE>
EXHIBIT I
SERVICE SCHEDULE A
EMERGENCY SERVICE
Under Interconnection Agreement dated October 7, 1987 between
Indianapolis Power & Light Company and
Wabash Valley Power Association, Inc. (the "Agreement")
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those
used in the Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective
Date of the Agreement and shall continue in effect throughout the
duration of the Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 In the event of a breakdown or other emergency in or on the system
of either Party involving either sources of power or transmission
facilities, or both, which impair or jeopardize the ability of a Party
suffering the emergency to meet the loads of its system, the other Party
shall deliver the electric energy ("Emergency Energy") that such Party
requests; provided, however, that a Party shall not be obligated to
deliver such energy which it, in its sole judgment, cannot deliver
without interposing a hazard to or economic burden upon its operations or
without impairing or jeopardizing the other load requirements of its
system; and provided further, that neither Party shall be obligated to
deliver electric energy to the other Party: (a) for a period in excess
of forty-eight consecutive hours during any single emergency, or (b) when
it is delivering electric energy under another (other) mutual emergency
interchange agreement(s), or (c) at any time that delivery of emergency
energy will impair its own system's ability to meet its load.
SECTION 4 - COMPENSATION
4.1 Emergency Energy delivered under Section 3 above that is generated
by the supplying Party shall be settled for either by the return of
equivalent Energy or, at the option of the Party that supplied such
Energy, by payment of the greater of 110 percent of the Out-of-Pocket
Costs of supplying such Energy or 30 mills per kilowatthour thereof.
4.2 Emergency Energy delivered under Section 3 above that is purchased
by the supplying party from another interconnected system which is not a
signatory to this Agreement ("Third Party") at the request of the
receiving party shall be settled for as follows:
4.21 When IPL is the supplying party, a payment of 100 percent of
the amount paid to such Third Party plus up to 3.46 mills per
kilowatthour (consisting of up to 2.46 mills per kilowatthour for a
transmission charge and 1 mill per kilowatthour for difficult to
quantify energy related costs) plus any transmission losses.
4.22 When Wabash Valley is the supplying party, a payment of 100
percent of the amount paid to such third party plus 2.0 mills per
kilowatthour plus any transmission losses.
4.3 If the supplying Party opts to receive equivalent energy for
Emergency Energy delivered, such equivalent energy shall be returned at
times when the load conditions of the Party originally supplying
Emergency Energy are substantially equivalent to the load conditions of
such Party existing at the time the Emergency Energy was delivered or, if
such Party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts and at such times as the
Operating Committee agrees will compensate the original supplying Party
for the difference in conditions.<PAGE>
EXHIBIT II
SERVICE SCHEDULE B
ENERGY TRANSFER
Under Interconnection Agreement dated October 7, 1987 between
Indianapolis Power & Light Company and
Wabash Valley Power Association, Inc. (the "Agreement")
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those
used in the Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective
Date of the Agreement and shall continue in effect throughout the
duration of the Agreement.
SECTION 3 - TRANSFER ARRANGEMENT
3.1 In carrying out the interconnected operation of their respective
systems as provided for under the Agreement, energy being received by a
portion of one Party's system from another portion of its system or from
the system of another interconnected company, or energy being delivered
by a portion of one Party's system to another portion of its system or to
the system of another interconnected company, may flow over the
transmission facilities of the other Party as a natural result of the
physical and electrical characteristics of the interconnected network of
transmission lines to which the Parties are connected. Such flow of
energy may occur during periods of emergency caused by the failure of
either sources of power or transmission facilities, or both. In respect
to such flow of energy (hereinafter called "Energy Transfer") the Parties
agree as follows:
3.11 Such Energy Transfer over their respective transmission
facilities shall be permitted whenever such transfer occurs;
provided, that such Energy Transfer shall not be of such magnitude
or duration as to affect adversely, or jeopardize the ability of,
the Party over whose system such Energy Transfers occur, to render
proper service to its customers, and to render or accept service to
or from companies with which it now has, or at any time hereafter
may have, contractual arrangements for the interchange of power or
energy.
3.12 The Parties recognize that in carrying out the provisions of
this Service Schedule, the Energy Transfer either during periods
when conditions of system operation are normal or during periods of
emergency, or both, may eventually require the installation of
additional transmission facilities in order that such Energy
Transfer may be properly controlled to the end that the ability of
the Party over whose system such Energy Transfer occurs to
meet its own requirements, as described under 3.11 above, is not
affected adversely or jeopardized. In the event the need for such
additional transmission facilities becomes apparent to either of
the Parties during the duration of this Service Schedule, upon
written notice given by either Party to the other Party and as soon
as practicable following such notice, the Parties shall jointly
reexamine conditions relating to Energy Transfer. In such
reexamination, if called for, the Parties shall agree upon such
additional transmission facilities as may be required to be
installed, if any, and upon an equitable basis for bearing the cost
of installing, maintaining and operating such facilities, if
installed.
SECTION 4 - POWER AND ENERGY ACCOUNTING
4.1 The Parties recognize that Energy Transfer as described under
Section 3 above, except for such amounts of electrical losses as may be
incurred because of such Energy Transfer, is the simultaneous acceptance
and delivery of like amounts of power and energy by and from the system
of the Party over whose system such transfer occurs. Power and energy
associated with Energy Transfer, including electrical losses associated
therewith, shall be accounted for each clock-hour as provided for under
Article 6 of the Agreement. Proper consideration to such electrical
losses will be in accordance with the manner agreed upon by the Operating
Committee. It is understood by the Parties, however, that such
electrical losses resulting from Energy Transfer, to be taken as losses
over and above the losses prevailing under basic conditions agreed upon
by the Parties, shall be supplied simultaneously by the Party for whom
the Energy Transfer is being made. The Parties agree that initially such
basic conditions will be established as those that exist when the
scheduled net delivery between the systems of the Parties and between
their respective systems and the systems of other interconnected
companies, is zero kilowatts. It is further understood that, from time
to time, conditions may require the establishment of different basic
conditions for such purpose. Either Party by written notice given to the
other Party may call for a prompt reexamination and reconsideration of
matters pertinent to the establishment of said basic conditions, whenever
such reexamination appears to be warranted, and the Parties will
thereupon agree to effect such changes in the basic conditions, if any,
that will equitably compensate the Parties for such losses. Should such
reexamination be required, a statement will be prepared by the Parties
which shall include in detail the amounts of energy delivered and
received by the Parties that are associated with Energy Transfer and the
amounts of electrical losses associated therewith.<PAGE>
EXHIBIT III
SERVICE SCHEDULE C
INTERCHANGE POWER
Under Interconnection Agreement dated October 7, 1987 between
Indianapolis Power & Light Company and
Wabash Valley Power Association, Inc. (the "Agreement")
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those
used in the Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective
Date of the Agreement and shall continue in effect throughout the
duration of the Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 Economy Energy. Either Party may arrange to purchase from the
other Party electrical energy ("Economy Energy") when it is possible to
effect a saving thereby and, when, in the sole judgment of the supplying
Party, such energy is available. Prior to each Economy Energy
transaction, the amount of energy, the time of its delivery, and the
compensation therefore shall be determined by the Parties. Compensation
so determined by the Parties shall not be subject to later review or
adjustment. In the event conditions arise during such scheduled period
which cause the delivery of Economy Energy to become burdensome to the
supplying Party, said Party has the right to request the receiving Party
to reduce the amount of such energy to any quantity specified. Receipt
or delivery of Economy Energy may also be arranged with other
interconnected systems not Parties to this Agreement.
3.2 Non-Displacement Energy. It is recognized that occasions will
arise when transactions under subsection 3.1 above will be impracticable
although a Party may have electric energy (herein called "Non-
Displacement Energy") which it is willing to make available from surplus
capacity from its own system or from outside sources, or both and which
can be utilized advantageously for short intervals by the other Party.
In such event, the Party desiring such receipt of energy shall notify the
other Party of the extent to which it desires to obtain Non-Displacement
Energy, and if the other Party, in its sole judgment, determines that
Non-Displacement Energy is available, schedules providing the periods and
extent of use shall be mutually agreed upon. Neither Party shall be
obligated to make any Non-Displacement Energy available to the other.
<PAGE>
SECTION 4 - COMPENSATION
ECONOMY ENERGY
4.1 The charge for Economy Energy purchased by either Party from the
other Party shall be based on the principle that the Party purchasing it
shall pay the Out-of-Pocket Cost of the Party supplying such Energy and
that the resulting savings to the receiving Party shall be equally shared
by the supplying and receiving Parties.
4.2 When Economy Energy is obtained from or delivered to a system
interconnected with either of the Parties which is not a signatory to the
Agreement ("Third Party"), payments among the participants in such a
transaction shall be based on the Out-of-Pocket Costs of the supplying
Party or Third Party providing the Energy and an allocation of the gross
savings, which are defined as the difference between (1) what the Out-of-
Pocket Costs of the receiving Party or Third Party would have been to
generate such Energy, and (2) the Out-of-Pocket Costs of the supplying
Party or Third Party providing the Energy. Such allocation shall be made
as provided in Subsections 4.21 and 4.22 herein below.
4.21 The transmitting party shall be paid (A) its cost of
purchasing the Energy supplied, plus (B) its costs of additional
transmission losses plus (C) the following:
(1) When IPL is such transmitting party:
The greater of (i) fifteen percent of the gross savings
remaining after deducting all such payments for
transmission losses or (ii) an amount not to exceed
3.46 mills per kilowatthour of Energy received for
transmission.
(2) When Wabash Valley is such transmitting party:
The greater of (i) fifteen percent of the gross savings
remaining after deducting all such payments for
transmission losses or (ii) an amount not to exceed 2.0
mills per kilowatthour of Energy received for
transmission.
4.22 The supplying Party or Third Party shall be paid its Out-of-
Pocket Costs of providing the Energy, plus one-half of the gross
savings remaining after deducting all payments made under
Subsection 4.21 (B) and (C). The receiving Party or Third Party
shall pay an amount which will provide it with the other one-half
of the gross savings remaining after deducting all payments made
under Subsection 4.21 (B) and (C).
NON-DISPLACEMENT ENERGY
4.3 Non-Displacement Energy delivered hereunder that is generated by
the supplying Party's system shall be settled for either by the return of
equivalent Energy or, at the option of the supplying Party, by payment of
the Out-of-Pocket Costs of the supplying Party in generating such Energy
plus ten percent of such cost. If equivalent Energy is returned, it
shall be returned at times when the load conditions of the Party
receiving it are equivalent to the load conditions of such Party at the
time the energy in exchange for which it is returned was delivered or, if
such Party elects to have equivalent Energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon by
the Operating Committee, as will compensate for the difference in
conditions.
4.4 Non-Displacement Energy delivered under Subsection 3.2 above that
is purchased by the supplying party from another interconnected system
which is not a signatory to this Agreement ("Third Party") at the request
of the receiving party shall be settled for as follows:
4.41 When IPL is the supplying party, a payment of 100 percent of
the amount paid to such Third Party, plus up to 3.46 mills per
kilowatthour (consisting of up to 2.46 mills per kilowatthour for a
transmission charge and 1 mill per kilowatthour for difficult to
quantify energy related costs) plus any transmission losses.
4.42 When Wabash Valley is the supplying party, a payment of 100
percent of the amount paid to such Third Party plus 2.0 mills per
kilowatthour plus any transmission losses.<PAGE>
EXHIBIT IV
SERVICE SCHEDULE D
SHORT TERM POWER
Under Interconnection Agreement dated October 7, 1987 between
Indianapolis Power & Light Company and
Wabash Valley Power Association, Inc. (the "Agreement")
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those
used in the Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective
Date of the Agreement and shall continue in effect until termination of
the Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 Either Party, by giving the other Party sufficient notice, may
reserve for periods of one or more days or weeks, such electric power
(herein called "Short Term Power") as the supplying Party at that time
may have and is willing to supply as Short Term Power. The Party asked
to supply Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by the
other Party as Short Term Power. As used herein, the term "week" shall
mean any seven consecutive days.
3.2 The Party desiring to reserve Short Term Power shall specify in a
notice to the other Party the number of kilowatts and the period for
which it desires to reserve such power and the desired delivery schedule
for such power. The supplying Party shall promptly acknowledge receipt
of such notice and, shall signify the extent of its ability and
willingness to supply power in accordance with the provisions of such
notice. Any such notice or acknowledgement thereof initially may be
given orally; however if requested by either Party, it shall be confirmed
in writing and such confirmation shall be forwarded not later than the
third day following the day such oral notice is given, excluding
Saturdays, Sundays and holidays.
3.3 During the period that Short Term Power has been reserved as
provided in Section 3.2 above, the supplying Party shall deliver upon
call electric energy (herein called "Short Term Energy") to the other
Party at the Point or Points of Interconnection set forth in Section 5.01
of the Agreement in the amounts not to exceed the number of kilowatts
reserved. However, in the event conditions arise during such period
which could not have been reasonably foreseen and such conditions would
cause the delivery of said power to be burdensome to the supplying Party,
such Party shall have the right to request the other Party to reduce for
any portion of such period the amount of Short Term Energy being taken to
that amount specified by the supplying Party. The purchasing Party shall
promptly comply with such requirements of the supplying Party.
SECTION 4 - COMPENSATION
4.1 The Party reserving Weekly or Daily Short Term Power shall pay the
supplying Party the following demand charges:
4.11 WEEKLY SHORT TERM POWER
(a) When IPL is the supplying Party, Wabash Valley shall pay IPL
for Weekly Short Term Power at the rate of up to $1.05 per kilowatt
reserved per week.
(b) When Wabash Valley is the supplying Party, IPL shall pay
Wabash Valley for Weekly Short Term Power at the rate of up to
$1.05 per kilowatt reserved per week.
(c) In the event the amount of Weekly Short Term Power reserved
is reduced upon notice from the supplying Party, the demand charge
for each day during which any such reduction is in effect shall be
reduced by one-sixth (1/6) of the supplying Party's weekly demand
rate per kilowatt for each kilowatt of reduction but not more than
the rate agreed upon for each kilowatt per week.
4.12 DAILY SHORT TERM POWER
(a) When IPL is the supplying Party, Wabash Valley shall pay IPL
for Daily Short Term Power at the rate of up to $.21 per kilowatt
reserved per day.
(b) When Wabash Valley is the supplying Party, IPL shall pay
Wabash Valley for Daily Short Term Power at the rate of up to $.21
per kilowatt reserved per day.
(c) In the event the amount of Daily Short Term Power reserved is
reduced upon notice from the supplying Party, the demand charge per
kilowatt for each day during which any such reduction is in effect
shall be waived for each kilowatt of reduction.
4.13 THIRD PARTY WEEKLY SHORT TERM POWER
(a) For any week that Weekly Short Term Power is reserved by IPL
for and at the request of Wabash Valley from a Third Party, such
Short Term Power shall be supplied at the rate of up to $.295 per
kilowatt reserved per week plus the demand charge paid therefor by
IPL to the Third Party.
(b) For any week that Weekly Short Term Power is reserved by
Wabash Valley for and at the request of IPL from a Third Party,
such Short Term Power shall be supplied at the rate of $.12 per
kilowatt reserved per week plus the demand charge paid therefor by
Wabash Valley to the Third Party.
(c) In the event the amount of Weekly Short Term Power reserved
from a Third Party is reduced upon the request of the Third Party,
the demand charge for each day during which such reduction is in
effect shall be reduced by the amount by which the demand charge
payable by the supplying Party is reduced under its Agreement with
such Third Party plus, in the case of Power reserved by IPL, one-
sixth of the rate per kilowatt agreed to under Paragraph (a) of
this Section 4.13 for each kilowatt of reduction each day; but not
more than the rate agreed upon for each kilowatt per week; and, in
the case of Power reserved by Wabash Valley, one-sixth of the rate
per kilowatt stated in Paragraph (b) of this Section 4.13 for each
kilowatt of reduction each day; but not more than the rate agreed
upon for each kilowatt per week.
4.14 THIRD PARTY DAILY SHORT TERM POWER
(a) For any day that Short Term Power is reserved by IPL for and
at the request of Wabash Valley from a Third Party, such Short Term
Power shall be supplied at the rate of up to $.059 per kilowatt
reserved per day plus the demand charge paid therefor by IPL to the
Third Party.
(b) For any day that Short Term Power is reserved by Wabash
Valley for and at the request of IPL from a Third Party, such Short
Term Power shall be supplied at the rate of $.02 per kilowatt
reserved per day plus the demand charge paid therefor by Wabash
Valley to the Third Party.
(c) In the event that the amount of Daily Short Term Power
reserved from a Third Party is reduced upon the request of the
Third Party, the demand charge for such Power shall be reduced by
the amount by which the demand charge payable by the supplying
Party is reduced by the Third Party.
4.2 The reserving Party shall pay the supplying Party for all Weekly or
Daily Short Term Energy delivered at the following rates:
(a) For each kilowatthour that is generated by the supplying
Party's system, 100 percent of the Out-of-Pocket Costs of supplying
Short Term Energy called for during such period, plus 10 percent of
such costs.
(b) For each kilowatthour purchased by IPL from a Third Party in
order to supply the Short Term Energy called for during such
period, 100 percent of the amount of the Energy charge paid
therefor by IPL plus 1 mill per kilowatthour plus any transmission
losses.
(c) For each kilowatthour purchased by Wabash Valley from a Third
Party in order to supply the Short Term Energy called for during
such period, 100 percent of the amount of Energy charge paid
therefor by Wabash Valley plus 1 mill per kilowatthour plus any
transmission losses.<PAGE>
EXHIBIT V
SERVICE SCHEDULE E
LIMITED TERM POWER (FIRM)
Under Interconnection Agreement dated October 7, 1987 between
Indianapolis Power & Light Company and
Wabash Valley Power Association, Inc. (the "Agreement")
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those
used in the Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective
Date of the Agreement and shall continue in effect until termination of
the Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 Either Party, by giving the other Party notice, may reserve for
periods of not less than one (1) nor more than twelve (12) months, such
electric power [herein called "Limited Term Power (Firm)"] as the other
Party may be willing to make available as Limited Term Power (Firm). The
Party asked to supply Limited Term Power (Firm) shall be the sole judge
as to the amounts and periods that it has electric power available that
may be reserved by the other Party as Limited Term Power (Firm).
3.11 To reserve Limited Term Power (Firm) the Party desiring such
power shall specify in its notice to the supplying Party the number
of kilowatts and the period for which it desires to so reserve such
power. The supplying Party shall signify the extent of its ability
and willingness to comply with the provisions of such notice. Any
notice or any acknowledgement of such notice that initially may be
given orally shall be confirmed thereafter in writing.
3.12 During each period that Limited Term Power (Firm) has been
reserved as provided, the supplying Party shall deliver upon call
electric energy [herein called Limited Term Energy (Firm)] to the
other Party at the Point or Points of Interconnection set forth in
Section 5.01 of Article 5 of the Agreement in any amount up to and
including the number of kilowatts reserved. However, in the event
conditions arise during such period which could not have been
reasonably foreseen at the time said power was reserved and such
conditions would cause the delivery of Limited Term Energy (Firm)
to be burdensome to the supplying Party, the supplying Party may,
upon notice to the reserving Party, reduce or interrupt the
delivery of such energy to preserve the integrity of, or to prevent
or limit any instability on, its system.
3.13 The Limited Term Power (Firm) billing demand for any period
shall be taken as equal to the number of kilowatts reserved as
Limited Term Power (Firm) for such period.
SECTION 4 - COMPENSATION
4.1 The Party reserving Limited Term Power (Firm) shall pay the
supplying Party the following demand charges:
4.11 MONTHLY LIMITED TERM POWER (FIRM)
(a) When IPL is the supplying Party, Wabash Valley shall pay IPL
for Monthly Limited Term Power (Firm) at the rate of up to $5.50
per kilowatt reserved per month.
(b) When Wabash Valley is the supplying Party, IPL shall pay
Wabash Valley for Monthly Limited Term Power (Firm) at the rate of
up to $9.43 per kilowatt reserved per month.
(c) In the event the amount of Monthly Limited Term Power (Firm)
taken is reduced upon notice from the supplying Party, the demand
charge for each day during which any such reduction is in effect
shall be reduced by one-twentieth (1/20) of the supplying Party's
monthly demand rate per kilowatt for each kilowatt of reduction but
not more than the rate agreed upon for each kilowatt per month.
4.12 THIRD PARTY LIMITED TERM POWER (FIRM)
(a) For any month that Monthly Limited Term Power (Firm) is
reserved by IPL for and at the request of Wabash Valley from a
Third Party, such Monthly Limited Term Power (Firm) shall be
supplied at the rate of up to $1.28 per kilowatt reserved per month
plus the demand charge paid therefor by IPL to the Third Party.
(b) For any month that Monthly Limited Term Power (Firm) is
reserved by Wabash Valley for and at the request of IPL from a
Third Party, such Monthly Limited Term Power (Firm) shall be
supplied at the rate of up to $1.20 per kilowatt reserved per month
plus the demand charge paid therefor by Wabash Valley to the Third
Party.
(c) In the event the amount of Monthly Limited Term Power (Firm)
reserved from a Third Party is reduced upon the request of the
Third Party, the demand charge for each day during which reduction
is in effect shall be reduced by the amount by which the demand
charge payable by the supplying Party is reduced under its
Agreement with such Third Party plus, in the case of Power reserved
by IPL one-thirtieth (1/30) of the rate per kilowatt agreed to
under Paragraph (a) of this Section 4.12 for each kilowatt of
reduction each day; but not more than the rate agreed upon for each
kilowatt per month; and, in the case of Power reserved by Wabash
Valley, one-thirtieth (1/30) of the rate per kilowatt agreed to
under Paragraph (b) of this Section 4.12 for each kilowatt of
reduction each day; but not more than the rate agreed upon for each
kilowatt per week.
4.2 The reserving Party shall pay the supplying Party for all Limited
Term Energy (Firm) delivered at the following rates:
(a) For each kilowatthour that is generated by the supplying
Party's system, 100 percent of the Out-of-Pocket Costs of supplying
Limited Term Energy (Firm) called for during such period, plus 10
percent of such costs.
(b) For each kilowatthour purchased by IPL from a third Party in
order to supply the Limited Term Energy called for during such
period, 100 percent of the amount of the Energy charge paid
therefor by IPL plus 1 mill per kilowatthour plus any transmission
losses.
(c) For each kilowatthour purchased by Wabash Valley from a Third
Party in order to supply the Limited Term Energy (Firm) called for
during such period, 100 percent of the amount of the Energy charge
paid therefor by Wabash Valley plus 1 mill per kilowatthour plus
any transmission losses.<PAGE>
EXHIBIT VI
SERVICE SCHEDULE F
DIVERSITY POWER
Under Interconnection Agreement dated October 7, 1987 between
Indianapolis Power & Light Company and
Wabash Valley Power Association, Inc. (the "Agreement")
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those
used in the Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective
Date of the Agreement and shall continue in effect until termination of
the Agreement.
SECTION 3 - DIVERSITY POWER
3.1 From time to time, because of differences in load patterns a Party
may have excess capacity during one Seasonal Load Period at the same time
the other Party is experiencing its peak load season. At such time it
may be to the Parties' mutual advantage to schedule an exchange of
certain portions of any such excess capacity. Such capacity shall be
termed and is herein called "Diversity Power".
3.11 Seasonal Load Period shall mean for the Summer Seasonal Load
Period, the months of April thru September and for the Winter
Seasonal Load Period, the months of October thru March.
3.2 At any time Diversity Power transactions are agreed upon between
the Parties, the Party which purchases Diversity Power during one
Seasonal Load Period shall be obligated to have available a like amount
of Diversity Power for the other Party during the other Seasonal Load
Period.
3.3 The Party supplying Diversity Power shall provide reserve capacity
for the committed amount, equivalent to that provided for its own
customers, exclusive of customers with interruptible service contracts.
SECTION 4 - COMPENSATION
4.1 Demand Charges - There shall be no demand charge for Diversity
Power.
4.2 Energy Charges - Energy shall be billed at Out-of-Pocket Cost of
the supplying Party plus ten percent of such cost. In the event that any
part of the Out-of-Pocket Cost includes energy purchased by the supplying
Party, only the energy related portion of such purchase cost shall be
included. Any associated charges for demand related costs shall be
excluded.
<PAGE>
MODIFICATION NO. 1
TO THE
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
WABASH VALLEY POWER ASSOCIATION, INC.
THIS AMENDMENT made and entered into as of the 1st day of January, 1995
by Indianapolis Power & Light Company ("IPL"), being an Amendment to the
Interconnection Agreement between Wabash Valley Power Association, Inc.
("Buyer") and IPL dated October 7, 1987 (the "Agreement").
WITNESSETH:
WHEREAS, IPL and Wabash Valley Power Association, Inc., entered into the
Agreement on October 7, 1987, which Agreement has been amended from time
to time;
WHEREAS, the Agreement provides for the sale of power and energy by IPL
under Service Schedules described as:
Service Schedule A Emergency Service
Service Schedule C Interchange Power
Service Schedule D Short-Term Power
Service Schedule E Limited-Term Power
Service Schedule F Diversity Power
WHEREAS, the Agreement provides for the recovery of incremental costs or
"out-of-pocket" costs occasioned by the sale by IPL of electric energy;
WHEREAS, IPL has implemented its Emissions Constrained Dispatch Plan,
attached hereto;
WHEREAS, the rates for Emergency Service, Interchange Power, Short-Term
Power, Limited-Term Power, and Diversity Power, do not expressly include
the cost of replacing sulfur dioxide ("SO2") emission allowances expended
in order to provide such energy in compliance with Federal laws governing
SO2 emission;
WHEREAS, IPL desires to amend the Agreement to clarify recovery of out-
of-pocket costs occasioned by the sale of said energy as including the
recovery of the incremental cost of SO2 emission allowances;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions set forth herein; IPL desires to amend the Agreement as
follows:
Section 1. Compensation for SO2 Emission Allowances.
The Buyer shall compensate IPL for the consumption of Sulfur Dioxide
Emissions Allowances ("SO2 Allowances") directly attributed to electric
energy sales by IPL to Buyer under the Service Schedules. Such
compensation shall, at Buyer's option, be made by either supplying IPL
with the number of SO2 Allowances directly attributed to such energy
sales, or by reimbursing IPL for the incremental cost of such number of
SO2 Allowances, rounded to the nearest whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2 Allowances associated with
Buyer's energy purchases for the month, the cash amount due at billing
will be determined by multiplying the number of SO2 Allowances attributed
to the sale by the incremental cost of the SO2 Allowances, as determined
in Section 2.2, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will record or
transfer to IPL's account, the number of SO2 Allowances calculated below,
at the time cash settlement for the energy is due. In all cases, Buyer
will transfer to IPL's account the number of SO2 Allowances due IPL for
calendar year no later than January 15 of the following year. "Transfer
to IPL's account" shall mean, for purposes of the Amendment, the transfer
by the USEPA of the requisite number of SO2 Allowances to IPL's Allowance
Tracking System account and the receipt by IPL of the Allowance Transfer
Confirmation.
Section 2. Determination of SO2 Emission Allowances Due IPL.
Section 2.1. Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy sale
made by IPL shall be determined for each hour, by determining the
contribution from each of the unit(s) from which the energy sale is
being made for that hour. For each unit, the emission rate in
pounds of SO2 per million Btu will be determined each month, from
fuel sulfur content, control equipment performance, and continuous
emissions monitoring data. The emission rate and the unit heat
rate will be used to determine the SO2 Allowances used per
megawatt-hour ("MWH"). The energy from each unit attributable to
the sale, and the SO2 Allowances per MWH for each unit, will be
used to determine the number of SO2 Allowances attributable to the
sale.
<PAGE>
Section 2.2 . Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic
dispatch of IPL's generating units in any month, will also be the
basis used to determine compensation for IPL's energy sales. The
incremental SO2 Allowances cost, in dollars per ton of SO2, shall
be determined each month and will be based on the Cantor Fitzgerald
offer price for SO2 Allowances, or if such is not available, then
another nationally recognized SO2 Allowance trading market price or
market price index, at the beginning of the month. The SO2
Allowance value may be changed at any time during the month to
reflect the more current incremental cost, or market price, for SO2
Allowances. Buyer will be notified of the new SO2 Allowance value
prior to dispatch of IPL energy to Buyer.
Section 3. Effective Date.
This Amendment to the Agreement shall be made effective as of January 1,
1995.
IN WITNESS WHEREOF, IPL has caused the foregoing Amendment to be signed
by its duly authorized officer, effective as of the date set forth above.
INDIANAPOLIS POWER & LIGHT COMPANY
By: /s/ John C. Berlier, Jr.
John C. Berlier, Jr.
Vice President
Resource Planning and Rates
EXHIBIT 10.14
INTERCHANGE AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING, INC.
DATED AS OF: AUGUST 1, 1995
<PAGE>
INTERCHANGE AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING, INC.
THIS AGREEMENT, dated the 1st day of August, 1995, between
Indianapolis Power & Light Company, an Indiana corporation, hereinafter
called "IPL" and ENRON Power Marketing, Inc., a Delaware corporation,
hereinafter called "EPMI", such Parties being hereinafter referred to
independently as "Party" or collectively as "Parties,"
WITNESSETH:
WHEREAS, IPL owns and operates electric generation and transmission
facilities and is engaged in the business of generating, transmitting and
distributing electric power and energy at retail to consumers and at
wholesale for resale; and
WHEREAS, EPMI is in the business of marketing electric power and
energy at wholesale for resale in interstate commerce; and
WHEREAS, IPL is directly interconnected by transmission facilities
operating in parallel with a number of other electric utilities pursuant
to various Interconnection Agreements; and
WHEREAS, EPMI has been granted authority to purchase and sell
electricity for resale in interstate commerce by the
Federal Energy Regulatory Commission (FERC) according to the terms of a
FERC order dated December 2, 1993; and
WHEREAS, the Parties may from time to time wish to sell to, and/or
purchase electric power and energy from, each other to reduce the cost to
their customers by more efficient use of available resources;
NOW, THEREFORE, the Parties agree as follows:
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I Deliveries and Definitions 3
ARTICLE II General Purpose Energy Transactions 4
ARTICLE III Negotiated Capacity Transactions 6
ARTICLE IV General Service Conditions 8
ARTICLE V Billing 10
ARTICLE VI General 11
EXHIBIT A IPL Rates-Section 1-General
Purpose Energy 13
EXHIBIT A IPL Rates-Section 2-Negotiated
Capacity 14
EXHIBIT B IPL Recovery of SO2 Allowance Costs 16
EXHIBIT C EPMI Rates as filed with the FERC 18
<PAGE>
ARTICLE I
Deliveries and Definitions
1.01 Deliveries. Electric energy exchanges between the
Parties shall be three-phase, sixty-hertz energy, delivered at
nominal voltages and Points of Delivery, utilizing facilities
which each Party may furnish, own, contract for, operate and
maintain as may be agreed upon from time to time. Such energy
exchanges shall be in accordance with the terms of this
Agreement. All power and energy deliveries between the Parties
shall be made at Points of Delivery defined herein.
1.02 Out-of-Pocket Cost (OPC), shall include the cost of
fuel, operation and maintenance, environmental (including, but
not limited to, the cost of SO2 Emission Allowances as identified
in the Clean Air Act Amendments of 1990), unit start-up, taxes,
losses and other expenses incurred that would not have been
incurred if the energy had not been supplied.
1.03 General Purpose Energy is surplus non-firm energy that
is available subject to the supplying Party's discretion at the
time an energy schedule is contemplated by the Parties. Daily
General Purpose Energy is General Purpose Energy that may be
arranged to provide the supply of electricity for one or more
days. Hourly General Purpose Energy may be arranged to provide
the supply of electricity scheduled hour-to-hour.
1.04 Negotiated Capacity is capacity and associated energy
which one Party may purchase from the other Party for the purpose
of obtaining a supply of power during the period covered by a
commitment. It is intended to provide both Parties with a wide
range of flexibility in structuring transactions which are
mutually beneficial, including negotiable degrees of firmness,
variable capacity charges and variable time durations.
1.05 Points of Delivery are the points of interconnection
between IPL and an interconnected electric system at which IPL
will receive from and/or deliver energy to, or on behalf of, EPMI
under the terms of this Agreement and as specified at the time of
each transaction.<PAGE>
ARTICLE II
General Purpose Energy Transactions
2.01 Availability and Compensation. Each Party may make
General Purpose Energy available at times and in quantities
agreed upon by the Parties when it is economical and practical to
do so under the terms and conditions set forth in this Agreement.
Compensation for the supply of such General Purpose Energy
transactions shall be made at rates described in Exhibit A (IPL
Rates for Sale of General Purpose Energy and Negotiated Capacity
to EPMI) and Exhibit C (EPMI Rates for Sale of General Purpose
Energy and Negotiated Capacity to IPL) attached hereto and made a
part hereof. Prior to implementation of a transaction, the
purchasing Party must declare whether it will pay in cash or
return SO2 Allowances in-kind for the consumption of SO2
Allowances directly attributed to such Transaction, if any.
2.02 Transmission Arrangements. All arrangements for
third party transmission service required to deliver or receive
energy at the delivery points defined in Section 1.05 will be
made by EPMI. Compensation for such third-party transmission
service, if any, and compensation for line losses related to such
service shall be paid for by the purchasing Party, unless
otherwise agreed.
2.03 Implementation. The purchasing Party may propose a
General Purpose Energy transaction by requesting the other Party
to indicate the amounts of energy available, duration of the
transaction, minimum time before cancellation, price of such
energy. The Parties will then determine the economics of such
transaction, including all transmission charges and loss
compensation prior to mutual implementation.
In the event of an emergency or change in the operating
condition of the supplying Party's source of power which makes
the continued provisions of the General Purpose Energy
transaction uneconomical for the supplying Party, the supplying
Party shall be under no obligation to continue the supply of
General Purpose Energy for more than three (3) hours after it has
notified the purchasing Party of its intention to discontinue
such supply unless otherwise mutually agreed upon by both Parties
at the start of the scheduled delivery of General Purpose Energy.
Upon notice from the supplying Party of its intent to discontinue
service, the purchasing Party will use its best efforts to
release the supplying Party from any obligation of continuing the
supply of General Purpose Energy as soon as possible within the
three (3) hour, or previously agreed to, notification period.
2.04 Reliability. General Purpose Energy shall not be
scheduled in amounts which will overload any transmission
facilities or endanger the operation of the interconnected
systems.
2.05 Scheduling. Prior to scheduling of deliveries, the
Parties, or their designated agent, and all entities providing
transmission services, if any, shall mutually agree upon the
hour-by-hour amounts of to be delivered.
ARTICLE III
Negotiated Capacity Transactions
3.01 Availability and Compensation. Each Party may make
Negotiated Capacity available at times and in quantities agreed
upon by the Parties. Compensation for supply of such Negotiated
Capacity shall be made at the rates described in Exhibit A (IPL
Rates for Sale of General Purpose Energy and Negotiated Capacity
to EPMI) and Exhibit C (EPMI Rates for Sale of General Purpose
Energy and Negotiated capacity to IPL). The Negotiated Capacity
billing demand for any period shall be taken as equal to the
number of megawatts reserved for such period of Negotiated
Capacity, regardless of whether any associated energy is
scheduled or taken by the purchasing Party. Also, prior to
implementation of a transaction, the purchasing Party must
declare whether it will pay in cash or return SO2 Allowances in-
kind for the consumption of SO2 Allowances directly attributed to
such Transaction, if any.
3.02 Transmission Arrangements and Compensation. All
arrangements for third party transmission service required to
deliver or receive energy at the delivery points defined in
Section 1.05 will be made by EPMI. Compensation for such third-
party transmission service, if any, and compensation for line
losses related to such service shall be paid for by the
purchasing Party, unless otherwise agreed.
3.03 Reliability. The degree of firmness of the Negotiated
Capacity shall be mutually agreed upon by both Parties at the
time the power is reserved.
3.04 Scheduling. During the period that Negotiated
Capacity has been reserved, it shall be the responsibility of the
purchasing Party to schedule in advance the deliveries of energy
associated therewith in accordance with the agreement of the
Parties at the time the capacity is reserved. Subject to the
provisions of Section 3.01 and 3.02 the supplying Party shall
deliver such energy in amounts up to and including the number of
megawatts reserved. EPMI, all entities providing transmission
service, if any, and IPL shall confirm and agree upon all
schedules of energy prior to the initiation of service.
3.05 Reduction of Demand. Subject to the provisions
established in Section 3.02, the supplying Party may, upon notice
reduce or discontinue the supply of power and energy. In the
event the power taken is reduced upon the request of the
supplying Party, the demand charge shall be reduced to reflect
such reduction. If the reservation is daily, the demand charge
per kilowatt for each day during which any such reduction is in
effect shall be reduced by the daily demand rate per kilowatt of
the reduction. For a weekly transaction, the demand charge for
each day (other that Sunday) shall be reduced by one-sixth (1/6)
of the Supplying Party's weekly demand rate per kilowatt for each
kilowatt of reduction up to a maximum reduction of the total
demand charge for the week. For transactions that are longer
than weekly, the Reduction of Demand will be mutually agreed upon
by the Parties at the time of the reservation.
ARTICLE IV
General Service Conditions
4.01 Continuity of Service. Each party shall exercise
reasonable care, in accordance with sound operating practice, so
as to fulfill its obligations under this Agreement and to
maintain continuity of service consistent with its obligations
under this Agreement. Neither Party shall be liable to the other
by reason of failure to maintain continuity of service, or any
disturbance caused, by reason of an Uncontrollable Circumstance.
The term "Uncontrollable Circumstance" means any circumstance or
cause beyond the control of the Party affected, including but not
limited to such causes as failure of facilities, inability to
obtain fuel or other material supplies, flood, earthquake, storm,
lightning, fire, epidemic, war, riot, civil disturbance, labor
disturbance, sabotage, collision, restraint or order of court or
public authority having jurisdiction, whether or not caused or
contributed to, or alleged to have been caused or contributed to,
by negligence of the Party affected, or intentionally caused, if
in a good faith effort to preserve the operating integrity of its
own system or of the interconnected systems. If continuity of
service becomes interrupted for any reason, the cause of such
interruption shall be removed and normal operating conditions
restored as soon as practicable, except that any labor
disturbance or other difference with any entity not a party to
this Agreement shall be settled at the sole discretion of the
Party directly affected. Neither Party shall be responsible to
the other Party for any damage or loss of revenue caused by any
such interruption or for any incidental, consequential, punitive,
or other special damages for any claim arising out of this
Agreement.
4.02 Losses. The purchasing Party shall be responsible for
all losses associated with the energy scheduled between the
Parties and delivered by the supplying Party to the Point of
Delivery. Compensation for the losses shall be established at
the time of reservation.
4.03 Taxes. Should any tax be levied or assessed against
either Party by any taxing authority, in addition to such taxes
as may exist, on any capacity and/or energy transaction under
this Agreement, or on the revenue derived therefrom, such tax
shall be added to the net bill under the appropriate rates and
shall be the responsibility of the purchasing Party and any
notice required by the FERC shall be filed with the FERC by the
supplying Party.
4.04 Third Party Impacts. The purchasing Party shall be
responsible for losses or other impacts on third-party systems
which are caused by an energy schedule, and/or energy delivered
at and after the Point of Delivery.
4.05 Unilateral Rate Changes. Nothing contained herein
shall be construed as affecting in any way the right of either
Party unilaterally to file with the FERC, or to make application
to the Commission, or any successor agency, for a change in this
Agreement, rates, charges, classification of service, or any rule
or regulation relating thereto, under Section 205 or 206 of the
Federal Power Act and the Commission Rules and Regulations
promulgated thereunder. The non-filing Party shall retain its
right to intervene and/or oppose any unilateral filing of the
other Party.
ARTICLE V
Billing
5.01 Billing Period. The billing period, unless mutually
agreed upon by the Parties, shall be the calendar month.
5.02 Payment of Bills. Bills for the net amount shall be
rendered monthly and shall be due fifteen (15) days from last day
of the billing month or ten (days) after receipt of the bill
thereof, whichever is later. The bill shall set forth the
electric capacity and energy transactions between the Parties
during the month in such detail and in such segregation as may be
needed for operating records and/or for settlement under this
Agreement.
5.03 Late Payment. If the bill is not paid on the due date
defined above, the amount due shall be subject to an interest
charge computed at the current prime commercial rate established
by The Chase Manhattan Bank, N.A., New York, New York, plus two
percent (2%), but in no event to exceed the maximum interest
permitted by law, said interest to be calculated from the due
date of the bill to the date of payment.
ARTICLE VI
General
6.01 Term. This Agreement shall have an initial term of
one (1) year starting on the date that it is allowed to become
effective by the FERC. This Agreement shall continue in effect
until terminated by not less than ninety (90) days' prior written
notice given by one Party to the other.
6.02 Regulatory Approval. This Agreement is subject to the
regulation of any governmental regulatory body or bodies having
jurisdiction thereof. EPMI shall be responsible for any filings
and/or fees to the FERC and/or other regulatory authorities which
have jurisdiction over EPMI in connection with this Agreement.
6.03 Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of
the respective Parties. Unless mutually agreed upon by the
Parties, this agreement may not be assigned by either Party
except to a successor to all or substantially all of the property
and assets of such Party or to a corporation resulting from a
reorganization, merger or consolidation of a Party or to a
corporation resulting from a reorganization, merger or
consolidation of a Party with another corporation or association.
6.04 Notices. Any notices, demands or requests required or
authorized by this Agreement, shall be deemed properly given if
mailed, postage prepaid, to ENRON Power Marketing, Inc., 1400
Smith Street, Houston, Texas 77002-7361, attention Vice
President, on behalf of EPMI; and to Indianapolis Power & Light
Company, P.O. Box 1595, Indianapolis, IN 46206-1595, attention
President, on behalf of IPL.
<PAGE>
In Witness Whereof, the Parties have caused this Agreement to be
duly executed as of the day and year first above written.
INDIANAPOLIS POWER & LIGHT COMPANY
BY /s/ Ramon L. Humke
President and Chief Operating
Officer
ATTEST:
/s/ Bryan G. Tabler
Senior Vice President,
Secretary and General Counsel
ENRON Power Marketing, Inc.
BY /s/ Eric van der Walde
Vice President
ATTEST:
/s/ Leslie K. Reeves
<PAGE>
9/19/95
EXHIBIT A
INTERCHANGE AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING, INC.
IPL Rates for Sale of General Purpose Energy
and Negotiated Capacity to EPMI
Section 1 - General Purpose Energy
1.01 Compensation for General Purpose Energy delivered by IPL shall be
at the following rates for each reservation of General Purpose
Energy:
For energy supplied by IPL:
(1) Up to 110% of IPL's Out-of-Pocket Cost, or if
power purchased by IPL is used to provide a
portion such energy, the charge shall be not
greater than the cost to IPL of such purchased
power plus one mill per kwh, plus
(2) At IPL's option, a demand charge of up to 48.2 mills
per kilowatthour, provided that this element of the
charge for any one day shall be no more than the
product of $0.771 times the highest number of
kilowatts delivered in any hour during the day and
that the charge for any week shall not exceed $3.86
times the highest number of kilowatts delivered in
any hour during the week.
If IPL opts to add this demand charge, the sum of the
demand and energy charges for each reservation of
General Purpose Energy shall not exceed the total of
the product of the number of kilowatts reserved for
such reservation times the maximum hourly demand
charge specified for such reservation and the
product of the number of kilowatt-hours supplied for
such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg
Unit No. 4 for the last preceding month during which
it was run.
(3) The aggregate instant total capacity of all IPL sales
under this and other IPL Agreements for which the
rates charged have been supported on the basis that
total revenues will not exceed the costs of
Petersburg No. 4, is limited to 515 MW.
1.02 In no event shall charges for General Purpose Energy be less than
100% of IPL's OPC.
1.03 Third party purchase resale transactions are not anticipated.
<PAGE>
9/19/95
EXHIBIT A
INTERCHANGE AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING, INC.
IPL Rates for Sale of General Purpose Energy
and Negotiated Capacity to EPMI
Section 2 - Negotiated Capacity
2.01 Compensation for Negotiated Capacity service from IPL shall be as
follows for each specific reservation of Negotiated Capacity
service:
(a) The Negotiated Capacity billing demand for any period shall
be taken as equal to the number of kilowatts reserved for
such period as Negotiated Capacity, regardless of whether
any associated energy is scheduled or taken by EPMI. The
demand charge per kilowatt reserved shall be:
(1) Up to $200.57/kw/year for periods of 1 or more years;
or
(2) Up to $16.71/kw/month for periods of 1 through 12
months; or
(3) Up to $3.86/kw/week for periods of 1 through 12
weeks; or,
(4) Up to $0.771/kw/day for periods of 1 through 6 days,
but not more than $3.86/kw for any one week.
(b) The charge per kilowatthour of associated energy scheduled
and delivered to the Points of Delivery for service to EPMI
specified in Section 1.06 of the Interchange Agreement
shall be up to 110% of IPL's Out-of-Pocket Cost, or if
power purchased by IPL is used to provide a portion such
energy, the charge shall be not greater than the cost to
IPL of such purchased power plus one mill per kwh.
(c) Notwithstanding the rates stated above, the sum of the
demand and energy charges for each specific Negotiated
Capacity service reservation made shall not exceed the
total of the product of the number of kilowatts reserved
times the maximum demand charges specified above and the
product of the number of kilowatt-hours supplied for such
reservation times 110% of the average cost per kilowatt-
hour generated by IPL's Petersburg Unit No. 4 for the last
preceding month during which it was run.
<PAGE>
9/19/95
EXHIBIT A
INTERCHANGE AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING, INC.
IPL Rates for Sale of General Purpose Energy
and Negotiated Capacity to EPMI
(d) The aggregate instant total capacity of all IPL sales under
this and other IPL Agreements for which the rates charged
have been supported on the basis that total revenues will
not exceed the costs of Petersburg No. 4, is limited to 515
MW.
(e) In no event shall charges for Negotiated Capacity and
associated energy be less that 100% of IPL's OPC.
2.02 Upon request by EPMI, an estimate of energy charges will be given
prior to the scheduling of energy, and EPMI will be notified of
any significant changes to that price. Further, by mutual
agreement and for specified time durations, energy prices may be
agreed upon in advance.
2.03 Third party purchase resale transactions are not anticipated.
<PAGE>
9/19/95
EXHIBIT B
INTERCHANGE AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING, INC.
IPL Recovery of the Incremental Cost of SO2 Emission Allowances
as Included in Section 1.02 of Article I, Deliveries and Definitions
of this Interchange Agreement
Section 1. - Compensation for SO2 Allowances
The Buyer shall compensate IPL for the consumption of Sulfur
Dioxide Emissions Allowances (SO2 Allowances) directly attributed
to electric energy sales by IPL to Buyer under this Agreement.
Such compensation shall, at Buyer's option, be made by either
supplying IPL with the number of SO2 Allowances directly
attributed to such energy sales, or by reimbursing IPL for the
incremental cost of such number of SO2 Allowances, rounded to the
nearest whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2 Allowances
associated with Buyer's energy purchases for the month, the cash
amount due at billing will be determined by multiplying the
number of SO2 Allowances attributed to the sale by the
incremental cost of the SO2 Allowances, as determined in Section
2.2, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will
record or transfer to IPL's account, the number of SO2 Allowances
calculated below, at the time cash settlement for the energy is
due. In all cases, Buyer will transfer to IPL's account the
number of SO2 Allowances due IPL for the calendar year no later
than January 15 of the following year. "Transfer to IPL's
account" shall mean, for the purposes of this section, the
transfer by the USEPA of the requisite number of SO2 Allowances
to IPL's Allowance Tracking System account and the receipt by IPL
of the Allowance Transfer Confirmation.
<PAGE>
Section 2. - Determination of SO2 Allowances Due IPL
2.1 - Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy
sale made by IPL shall be determined for each hour, by
determining the contribution from each of the unit(s) from which
the energy sale is being made for that hour. For each unit, the
emission rate in pounds of SO2 per million BTU will be determined
each month, from fuel sulfur content, control equipment
performance, and continuous emissions monitoring data. The
emission rate and the unit heat rate will be used to determine
the SO2 Allowances used per megawatt-hour (MWH). The energy from
each unit attributable to the sale, and the SO2 Allowances per
MWH for each unit, will be used to determine the number of SO2
Allowances attributable to the sale.
<PAGE>
9/19/95
EXHIBIT B
INTERCHANGE AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING,INC.
Recovery of the Incremental Cost of SO2 Emission Allowances
as Included in Section 1.02 of Article I, Deliveries and Definitions
of this Interchange Agreement
2.2 - Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic
dispatch of IPL's generating units in any month, will also be the
basis used to determine compensation for IPL's energy sales. The
incremental SO2 Allowances cost, in dollars per ton of SO2, shall
be determined each month and will be based on the Cantor
Fitzgerald offer price for SO2 Allowances, or if such is not
available, then another nationally recognized SO2 Allowance
trading market price index, at the beginning of the month. The
SO2 Allowance value may be changed at any time during the month
to reflect the more current incremental cost, or market price,
for SO2 Allowances. Buyer will be notified of the new SO2
Allowance value prior to dispatch of IPL energy to Buyer.
<PAGE>
9/19/95
EXHIBIT C
INTERCHANGE AGREEMENT BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
ENRON POWER MARKETING, INC.
EPMI Rates for Sale of General Purpose Energy
and Negotiated Capacity to IPL
ENRON POWER MARKETING, INC.
F.E.R.C. ELECTRIC RATE SCHEDULE NO. 1
1. Availability: Enron Power Marketing, Inc. makes electric energy
and capacity available under this Rate Schedule for wholesale sales to
purchasers with whom Enron Power Marketing, Inc. has contracted.
2. Applicability: This Rate Schedule is applicable to all sales
of electric energy or capacity by Enron Power Marketing, Inc. not
otherwise subject to a particular Rate Schedule of Enron Power
Marketing, Inc.
3. Rates:: All sales shall be made at rates established by
agreement between the purchaser and Enron Power Marketing, Inc.
4. Other Terms and Condiditons: All other terms and conditions of
sale shall be established by agreement between purchaser and Enron
Power Marketing, Inc.
5. Effective Date: This Rate Schedule is effective on and after
December 2, 1993.
EXHIBIT 10.15
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
INDIANA MUNICIPAL POWER AGENCY
0.01 This Agreement, dated as of the 19 day of August, 1994 (the
"Agreement"), between Indianapolis Power & Light Company ("IPL"
or a "Party) an Indiana corporation, and Indiana Municipal Power
Agency ("IMPA" or a "Party") a political subdivision of the State
of Indiana, collectively (the "Parties"):
WITNESSETH:
0.02 WHEREAS, IPL is a public utility engaged in the
generation, transmission, distribution and sale of electric power
and energy in central Indiana; and
0.03 WHEREAS, IMPA is a body corporate and politic and a
political subdivision of the State of Indiana which owns in
common tenancy and jointly operates the Joint Transmission System
and is engaged among other things, in the generation,
transmission and sale of electric power and energy in Indiana;
and,
0.04 WHEREAS, the Parties believe mutual benefits can be
realized from coordinated interconnected operation, such as the
interchange, sale, and purchase of electric power and energy;
and,
0.05 WHEREAS, IMPA is an owner and operator of transmission
facilities in Indiana, jointly operated by PSI Energy Inc., IMPA
and Wabash Valley Power Association, all having an operating
voltage of 69,000 volts or higher; and,
0.06 WHEREAS, IPL owns and operates 138,000 and 345,000 volt
transmission facilities in central and southern Indiana.
0.07 NOW, THEREFORE, in consideration of the premises and of
the mutual covenants herein set forth, the Parties agree as
follows:
ARTICLE 1
DEFINITIONS
1.01 Out-of-Pocket Cost. Out-of-Pocket Cost shall mean those costs of
generating electric energy in the generating stations of the system of
either Party which are incurred by the supplying system directly by reason
of its generating of such energy and which, otherwise, would not have been
incurred by such system. Out-of-Pocket Cost of electric energy purchased
from a source outside of the system of the supplying Party will be the total
amount paid therefor by the supplying Party which, otherwise, would not have
been paid by such Party.
1.02 Joint Transmission System. The Joint Transmission System shall be the
transmission facilities owned in common tenancy and jointly operated by PSI
Energy, Inc., IMPA, and Wabash Valley Power Association functionally serving
as transmission facilities and having an operating voltage of 69 kV or higher.
1.03 Joint Transmission System Agreement. The Joint Transmission System
Agreement is the Transmission And Local Facilities Ownership, Operation
And Maintenance Agreement between Public Service Company Of Indiana, Inc.
and Wabash Valley Power Association, Inc. and Indiana Municipal Power Agency
dated as of November 5, 1985 as amended.
ARTICLE 2
PROVISIONS REGARDING CONTINUITY AND
INTERRUPTION OF INTERCONNECTION OPERATIONS
2.01 Representations as to Facilities and Equipment.
2.01.1 IPL Representation. IPL hereby represents that it
owns and controls all the transmission, substation and metering
facilities and equipment necessary to implement and carry out fully
all the provisions, terms and conditions of this Agreement.
2.01.2 IMPA Representation. IMPA hereby represents
that it owns or has the right to use the transmission, substation and
metering facilities and equipment necessary to implement and carry out
fully all the provisions, terms and conditions of this Agreement.
2.02 Synchronous Operation. At the Point(s) of Interconnection (hereinafter
defined) throughout the duration of this Agreement, subject to the provisions
of this Paragraph 2.02 and of Paragraph 2.03 hereinbelow, IPL and IMPA
systems shall be operated in continuous synchronism. If synchronous
operation of the systems at the Point(s) of Interconnection becomes
interrupted either manually or automatically due to reasons beyond the
control of either Party or due to scheduled maintenance that has been agreed
to by both Parties, the Parties shall cooperate to remove the cause of such
interruption as soon as practicable and restore the Point(s) of
Interconnection to normal operating conditions. Neither Party shall be
responsible to the other for any damage or loss of revenue caused by such
interruption.
2.03 Interruption of Operation. The Parties agree that either of them may
interrupt synchronous operation through the Point(s) of Interconnection if
either Party determines that its facilities may be damaged due to excessive
loading, and such excess loading may be reduced or alleviated by such
interruption. If such interruption occurs, the Parties shall cooperate to
remove the cause of such excess loading as soon as practicable and restore
the Point(s) of Interconnection to normal operating condition. Neither Party
shall be responsible to the other for damage or loss of revenue caused by
such interruption.
The Parties further agree to study and negotiate the installation, ownership,
and cost of any additional equipment necessary to effect a long-term
solution to any such excessive loading herein described in the event either
Party determines that this interconnection contributes to excessive loading
and requests such negotiation.
2.04 Maintenance of Equipment. The Parties (In accordance with Paragraphs
2.01 and 19.07) shall each keep the lines, together with all associated
equipment and appurtenances that are located on their respective sides of
the Points of Interconnection (as delineated in Article 5 hereinbelow), in
a suitable condition of repair at all times, each at its own expense, in
order that said lines will operate in a reliable and satisfactory manner
and in order that reduction in the capacity of said lines will be avoided
to the extent practicable.
2.05 New Interconnections. The Parties understand that each of their
transmission systems is interconnected with the electric transmission
systems of other electric utility companies and each has contracted for
other such interconnections and may hereafter during the term of this
Agreement desire to make additional physical interconnections with such
companies or with other electric utility companies. Each such additional
physical interconnection with another electric utility system will be
discussed between the Parties and if, in the opinion of either Party,
the establishment of such interconnection will cause unreasonable transfers
of real power or reactive power through either system during normal
parallel operations as a result of the proposed additional interconnection,
before such additional interconnection is made, joint load studies
shall be conducted to determine the effect such interconnection will have
on the transmission systems of the Parties. If the study results in a
determination that the proposed additional interconnection would cause
unreasonable transfers of real power or reactive power through the electric
transmission system of such Party or otherwise impair the ability of such
Party to carry out its own obligations, then the Party proposing such
additional interconnection shall, before such proposed interconnection is
placed in service:
2.05.1 Compensation for Use. Compensate the other
Party for the use of that portion of its facilities determined to be
dedicated to the proposed additional interconnection; and/or
2.05.2 Remedies. Install and/or remove such equipment
as reasonably may be necessary to avoid such unreasonable transfers of
power or reactive power; or
2.05.3 Abandonment. Abandon the establishment of such
additional interconnection.
2.06 Anderson and Richmond Interconnection Points. The Parties agree
that, upon completion of construction by IMPA of facilities at its Anderson
and Richmond combustion turbines, such points shall become new
interconnections with Third Parties without the need for such further
studies as provided in Paragraph 2.05.
<PAGE>
ARTICLE 3
SERVICES TO BE RENDERED
3.01 Interconnection Service Schedules. It is the purpose of the Parties to
realize on an equitable basis, all benefits practicable to be effected
through coordination in the operation and development of their respective
systems. It is understood by the Parties that such benefits may be realized
under the stated terms and conditions of the interconnection service
schedules below:
3.01.1 Emergency Service. The furnishing of mutual
emergency and standby assistance, in accordance with Service Schedule A
annexed hereto.
3.01.2 Interchange Energy. The interchange, sale, and
purchase of energy to effect operating economies, in accordance with
Service Schedule B annexed hereto.
3.01.3 Short Term Power. The sale and purchase of
short-term electric power and energy available on the system of one
Party and desired by the other Party, in accordance with Service
Schedule C annexed hereto.
3.01.4 Limited Term Power. The sale and purchase of
limited term power and energy available on the system of one Party and
desired by the other Party, in accordance with Service Schedule D
annexed hereto;
3.02 Services Provided in Service Schedules. Inasmuch as the specific
services to be rendered in furtherance of such purpose will vary, and the
terms and conditions applicable to such services may require modification
from time to time while this Agreement is in effect, it is intended that,
except as provided in Paragraph 3.05 below, such specific services and the
terms and conditions applicable thereto be set forth in service schedules
mutually agreed upon from time to time between the Parties. Such services
schedules, until and unless changed by such mutual agreement, shall be those
provided by Paragraph 3.03 below, each of which, while in effect, shall be
deemed to be a part of this Agreement.
3.03 Service Schedule Designations. The respective service schedules shall
be designated as follows:
I. Service Schedule A - Emergency Service
II. Service Schedule B - Interchange Energy
III. Service Schedule C - Short Term Power
IV. Service Schedule D - Limited Term Power
Such service schedules as agreed upon between the the Parties are attached
hereto, made a part hereof, and marked Exhibits I, II, III, and IV
respectively.
3.04 Price Protection. Nothing in this Agreement shall require either Party
to purchase power or energy from a Third Party and resell it to the other
Party at a price less than the total cost of supplying such purchased power
or energy.
3.05 Energy Scheduling. The receiving Party shall schedule energy deliveries
on an hourly basis with the supplying Party by 12:00 o clock Noon, E.S.T., of
the day before such energy is to be delivered; thereafter, the supplying
Party shall not be obligated to schedule energy deliveries until the next
day; provided, however, that the Parties may schedule energy at such other
times and upon such other conditions and/or make such changes in existing
energy schedules as both Parties may agree upon.
3.06 Emissions Allowances. The Federal Clean Air Act, as amended, 42
U.S.C. 7401 et seq. (hereinafter referred to as "Clean Air Act"),
establishes certain annual maximum sulfur dioxide levels for flue gases
emitted by electric generating units, including units operated by IPL, IMPA
and other electric utilities who may supply electric energy for transactions
under this Agreement. The Clean Air Act also created an emissions allowance
system to permit emissions of regulated pollutants. The obligation of
obtaining and the cost of supplying and/or replacing consumed sulfur
dioxide and other atmospheric emission allowances, if any, when allowance
programs become effective shall be the responsibility of the Party
purchasing the power and energy unless as otherwise mutually agreed by the
Parties. The Parties shall establish, by mutual agreement, appropriate
procedures to carry out the provisions of this Paragraph 3.06. Such
procedures shall be amended as necessary to remain in compliance with all
Federal Energy Regulatory Commission ("FERC") and Indiana Utility
Regulatory Commission ("IURC") rules and regulations.
ARTICLE 4
SERVICE CONDITIONS
4.01 Control of System Disturbance. Each Party shall maintain and operate
its system in accordance with sound operating practice so as to minimize the
likelihood of disturbance originating in one system which might cause
impairment to the service of the other system or of any system
interconnected with the other system.
4.02 Control of Reactive Power Exchange. It is intended that neither Party
shall be obligated to deliver reactive power for the benefit of the other
Party; also that neither Party shall be obligated to receive reactive power
when to do so may introduce objectionable operating conditions on their
respective systems. The Operating Committee shall be responsible for the
establishment from time to time of operating procedures and schedules, in
respect of carrying reactive power loads by one system for the other in
order to secure adequate service and economical use of the facilities of
both systems and in respect of proper charges, if any, for the use of
facilities carrying reactive power loads. In discharging such duties the
Operating Committee shall recognize that in the transmission and delivery of
power and energy hereunder the carrying of reactive power loads by either
Party, in harmony with sound engineering principles of transmission
operation with interconnected systems, is subject to numerous variables
contingent upon loading and operating conditions that may exist
simultaneously on both systems. The operating procedures and schedules so
set up by the Operating Committee shall be in accord with such principles
and shall require each Party to carry reactive power loads at such times
and in such amounts as will be equitable to both Parties.
4.03 Control of Unscheduled Power and Energy Deliveries. The Parties
shall exercise reasonable foresight in carrying out all matters related to
the providing and operating of their respective electric power resources so
as to minimize, to the extent practicable, deviations between actual and
scheduled deliveries of electric power and energy between their systems.
The Parties shall provide and install on their respective systems such
communication and telemetering facilities as are essential to so minimize
such deviations and, in developing and executing operating procedures that
will enable the Parties to avoid, to the extent practicable, deviations from
scheduled deliveries, shall fully cooperate with each other and with third
parties whose sytems are directly or indirectly interconnected with the
systems of the Parties and who of necessity, together with the Parties,
must unify their efforts cooperatively to achieve effective and efficient
interconnected operation. The Parties recognize, however, that,
despite their best efforts to prevent it, unscheduled deliveries of electric
energy from one Party to the other may occur. In such events, electric
energy delivered hereunder shall be settled for either by the return of
equivalent energy or by payment of the Out-of-Pocket Cost (such cost being
at the Point or Points of Interconnection set forth in Paragraph 5.01 below,
taking into account electrical losses incurred from the source or sources of
such energy to said Point or Points) of electric energy delivered hereunder
to the supplying Party plus ten percent of such cost. If equivalent energy
is returned, it shall be returned at times when the load conditions of the
Party receiving it are substantially equivalent to the load conditions of
such Party at the time the energy for which it is returned was delivered or,
if such Party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon by the
Operating Committee, as will compensate such Party for the difference in
conditions.
ARTICLE 5
DELIVERY POINTS, METERING POINTS, AND METERING
5.01 Points of Interconnection.
5.01.1 Delivery Points. All electric energy delivered under this
Agreement shall be of the character commonly known as three-phase sixty
hertz energy and shall be delivered at the established point(s) of
interconnection listed below ("Points of Interconnection"):
The Petersburg Substation of IPL, the Sunnyside Substation of IPL,
the Five Points Substation of PSI Energy Inc., the Centerton Substation
of PSI Energy Inc., and the Whitestown Substation of PSI Energy Inc.
5.01.2 Third Party Delivery Points. In addition to the Point(s) of
Interconnection, IPL and IMPA have interconnections with several
utilities, each such utility being hereinafter referred to as a "Third
Party". The Parties shall provide in advance to one another an
information copy of each Third Party transmission agreement(s)
5.02 Billing Based on Scheduled Transactions. As IPL and IMPA systems are
interconnected with other systems forming a network, it is recognized that,
because of the physical and electrical characteristics of facilities
involved, a part or all the energy being transferred from one Party to the
other may flow through the Point or Points of Interconnection between the
systems of the Parties. A part or all of the energy being transferred
between other systems in the network may flow through the point or points
of connection between the systems of the Parties, and as a result be
included in the demand and energy meter readings at the Point or
Points of Interconnection. Therefore, all billings shall be based on
scheduled transactions or upon methods determined by the Operating Committee
which may result from development of arrangements with other interconnected
systems and which provide a basis for accounting for the power and energy
transfers actually contracted for between the Parties.
5.03 Metering Points. Electric power and energy supplied under this
Agreement shall be measured by suitable metering equipment, at the
voltages and metering points specified below ("Metering Points") and at
such other points, voltages, and ownership as may be agreed upon by the
Parties in a written amendment hereto:
5.03.1 Petersburg 345kV Meters. 345 kV meters owned by IPL
at the Petersburg Substation of IPL.
5.03.2 Petersburg 138 kV Meters. 138 kV meters owned by IPL
at the Petersburg Substation of IPL.
5.03.3 Whitestown 345 kV Meters. 345 kV meters owned by
IPL at the Whitestown Substation of PSI. Energy Inc.
5.03.4 Five Points 138 kV Meters. 138 kV meters owned by
PSI at the Five Points Substation of PSI Energy Inc.
5.03.5 Centerton 138 kV Meters. 138 kV meters owned by PSI
at the Centerton Substation of PSI Energy Inc.
5.03.6 Sunnyside 345 kV Meters. 345 kV meters owned by IPL
at the Sunnyside Substation of IPL.
5.04 Metering Equipment. Suitable metering equipment at the metering points
provided in Paragraph 5.03 above shall include electric meters, potential
and current transformers, and such other appurtenances as shall be necessary
to give for each direction of flow the following quantities: a continuous
automatic graphic record of both kilowatts and kilovars; an automatic record
of the kilowatthours for each clock hour; and a continuous integrating
record of the kilowatthours.
5.05 Measurement of Electric Energy. Measurement of electric energy under
this Agreement shall be made by standard types of electric meters installed
and maintained by the owner of the devices at the Metering Points. The
timing devices of meters shall be synchronized as closely as practical. All
meters shall be sealed, and the seals shall be broken only when the meters
are to be tested or adjusted.
5.06 Access to Meters and Records. Authorized Representatives (hereinafter
defined) of both Parties shall have reasonable access to the premises where
their meters are located and to the records made by the meters.
5.07 Meter Testing. The owner of the respective metering facilities shall
routinely test or have tested the above-referenced meters and shall maintain
records of meter accuracy all in accordance with prudent utility practices.
Each Party shall have the right, at its expense, to require that the other
Party conduct a special test of its meters as soon as practicable; provided,
that if such test shows the meter to be more than two percent (2%)
inaccurate, the Party owning the meter shall bear the cost of such test.
Representatives of both Parties shall be notified and afforded the
opportunity to be present at all routine or special tests and whenever any
readings are taken from meters not providing an automatic record. Both
Parties shall be provided with a schedule of routine testing dates for
metering equipment which measures transactions entered into pursuant to this
Agreement.
5.08 Adjustments Due to Inaccuracies. If any metering equipment test
discloses an inaccuracy exceeding two percent (2%), the energy account
between the Parties shall be adjusted to correct for the inaccuracy
disclosed over the shortest of the following periods; (i) for the six (6)
month period immediately preceding the day of the test, or (ii) for the
period that such inaccuracy may be determined to have existed, or (iii) if
the last test took place within the immediately preceding six month period
and the period of inaccuracy cannot be determined, for the period since the
last test. Should the metering equipment fail to register, the amount of
electric power and energy delivered shall be determined from the best
available data.
5.09 Metering Limitations. Notwithstanding the metering terms and conditions
as provided in Article 5 the Parties rights are no greater than those terms
and conditions as provided in the various Third Party agreements which
provided those facilities not provided by this Agreement.
ARTICLE 6
RECORDS AND STATEMENTS
6.01 Records. In addition to records of the metering provided for in
Article 5 hereof, the Parties shall keep complete records as may be needed
to substantiate a clear history of the various deliveries of electric energy
made, and of the clock-hour integrated demands in kilowatthours delivered,
by one Party to the other. In maintaining such records, the Parties shall
effect such segregation and allocation of demands and electric energy
delivered into classes representing the various services and conditions as
may be needed to effect settlements under this Agreement. All such records
shall be retained by the Party keeping the records. A Party's records shall
be available at all reasonable times for inspection by the other
Party's Representative and may be copied at such other Party's expense.
6.02 Statements. As promptly as practicable after the end of each calendar
month, the Parties shall cause to be prepared a statement setting forth the
electric power and energy transactions between the Parties during such month
in such detail and with such segregation as may be needed for operating
records or for settlements under this Agreement.
ARTICLE 7
BILLINGS, PAYMENTS AND BILLING DISPUTES
7.01 Billing Period. Unless otherwise agreed upon by the Parties, the
calendar month shall be the standard billing period for all settlements
under this Agreement.
7.02 Billing Scheduled Transactions. All billing shall be based on
scheduled transactions unless otherwise determined as provided in Paragraph
5.02 hereof.
7.03 Billing Payments. All bills for amounts owed by one Party to the other
shall be due and payable on the fifteenth (15th) day of the month next
following the month in which the service was provided, or on the tenth (10th)
day after receipt of a bill therefor, whichever is later. Interest on
unpaid amounts shall accrue at the annual rate of two percent (2%) above the
prime commercial lending rate established from time to time by The Chase
Manhattan Bank, N.A., New York, New York (the "Prime Lending Rate") and is
payable from the date the bill is due to the date of payment. The term
"month" shall mean a calendar month for the purpose of settlements under
this Agreement.
7.04 Estimated Billing Factors. In order that bills may be rendered promptly
after the end of each month , it may be necessary, from time to time, to
estimate certain factors involved in calculating the monthly billing.
Adjustments for errors in such estimates shall be included in the bill for
the month following the time when information becomes available to make
such corrections or adjustments in the billing for the preceding month or
months.
7.05 Billing Disputes. If either Party disputes the correctness of a bill,
it will, nevertheless, pay the undisputed portion of such bill plus a
minimum of one-half (1/2) of the disputed amount and shall submit to the
other Party a written statement detailing the items disputed. If the
Parties are unable to agree upon the disputed items, such items shall be
submitted to the Operating Committee for decision. Should the Operating
Committee be unable to reach a decision, the matter shall be submitted to
the President of IPL and the President of IMPA for decision. Any refund or
additional payment ordered by the Operating Committee or by the President of
IPL and the President of IMPA shall be subject to interest computed at the
Prime Lending Rate existing at the time of the refund or additional
payment plus two percent (2%), said interest to be calculated, in the case
of a refund, from the date the amount to be refunded was paid to the date of
the refund and, in the case of an additional amount ordered to be paid, from
the original due date to the payment date. Unresolved billing disputes
shall be resolved in accordance with Paragraph 8.07 herein.
<PAGE>
ARTICLE 8
OPERATING COMMITTEE
8.01 Operating Committee Organization And Duties. To coordinate the
operation of the Parties' respective generation, transmission and substation
facilities in order that the advantages to be derived under this Agreement
may be realized by the Parties hereto to the fullest extent practicable,
the Parties shall establish a committee of authorized representatives to be
known as the Operating Committee. Each Party shall designate in writing
delivered to the other Party, the person who is to act as its representative
on the Operating Committee and each person who may serve as alternates
whenever such representative is unable to act ("Representatives"). Each of
such Representatives shall be persons familiar with the generation,
transmission and substation facilities of the system of the Party
represented, and each shall be fully authorized (i) to cooperate with the
other Representatives and (ii) to determine and agree from time to time, in
accordance with this Agreement and with any other relevant agreements then
in effect between the Parties, upon the following:
8.01.1 Coordination of Maintenance. All matters
pertaining to the coordination of the maintenance of generation and
transmission facilities of the Parties.
8.01.2 Control of Operations. All matters pertaining to
the control of time, frequency, energy flow, reactive power exchange,
power factor, voltage, and other similar matters bearing upon the
satisfactory synchronous operation of the systems of the Parties.
8.01.3 Other Matters. Such other matters not specified
herein, with respect to which cooperation, coordination, and agreement
as to quantity, time, method, terms and conditions are necessary to
the efficient operation of the respective systems of the Parties, to
the end that the intent and purpose of this Agreement shall be
realized by the Parties to the fullest extent practicable.
8.02 Operating Committee Access. For the purpose of inspection and reading
of meters, checking of pertinent records and related matters (Subject to
Paragraphs 2.01 and 19.07), the Representatives shall have the right of
access at any reasonable time to all facilities and equipment of the Parties
used or to be used in the performance of this Agreement.
8.03 Operating Committee Expenses. Each Party shall be responsible for the
expenses of its members; provided that any expense jointly incurred by the
Operating Committee in performing its duties shall be shared equally by the
Parties.
8.04 Operating Committee Meetings. The Operating Committee shall meet at
a time and place mutually agreed upon by the Representatives. On request of
any Representative, a meeting shall be arranged not more than five working
days after the request unless the Party requesting the meeting agrees to a
later date. Attendance at the meetings shall not be limited to
Representatives; however, the Parties agree to limit attendance of non-
Representatives to those who are expected to take an active part on the
agenda for a given meeting.
8.05 Agreement Not To Be Modified by Committee. The Operating Committee
shall not have authority to modify any of the terms or conditions of this
Agreement.
8.06 Change of Representatives. Each Party shall give prompt written notice
to the other Party of any change in designation of its primary or alternate
Representative on the Operating Committee.
8.07 Unresolved Disputes. If the Operating Committee is unable to take
action on any matter to be acted upon by it under this Agreement because of
a dispute between the Representatives as to such matter, then the matter
shall be resolved by the following Procedure:
8.07.1 Consultation. In accordance with the provisions of Article
8 hereinabove, the members of the Operating Committee are authorized to
consult in connection with respect to any matter arising under this
Agreement.
8.07.2 Disagreement. If a disagreement arises under this
Agreement, pertaining to this Agreement, such matters shall be
discussed by the Operating Committee and timely mutual agreement
sought in regard thereto. If all members of the Operating Committee
agree to the resolution of any matter, such agreement shall be reported
in writing and, within the scope of its power set forth in Article 8
hereinabove, shall be binding upon the Parties. In the event that all
members of the Operating Committee are unable to reach agreement within
a reasonable time on any matter being considered, the Presidents of
either of the Parties may, by written notice to the members of the
Operating Committee, withdraw such matter from further consideration
by the Operating Committee and submit the same to the Chief Executive
Officers of the Parties for resolution. If the Chief Executive
Officers of the Parties agree to a resolution of the matter, such
agreement shall be reported in writing to, and shall be binding upon,
the Parties; but if the Chief Executive Officers of the Parties fail to
resolve the matter within forty five (45) days after being submitted to
them, then the matter shall proceed to arbitration as provided in this
Article 8; provided that other dispute resolution procedures may be
utilized by the Parties before arbitration, upon agreement of the
Parties.
8.07.3 Arbitration. Disagreements which are not resolved by the
Operating Committee or the Chief Executive Officers of the Parties as
provided in Article 8.07.02 may be settled by an Arbitration Board, (or
by such other form of dispute resolution as agreed upon by the Parties)
consisting of three arbitrators as hereinafter provided, in accordance
with the provision of this Article 8.07.03. A Party desiring
arbitration, shall serve written notice upon the other Party setting
forth in detail the disagreement with respect to which arbitration is
desired. Such disagreement shall be settled by arbitration if, after
receipt of such written notice, each of the Parties shall agree in
writing that such disagreement shall be so settled. Within a period of
fifteen (15) days from the date of such agreement to settle such
disagreement by arbitration, each Party shall select one arbitrator
and the chosen arbitrators shall pick the third arbitrator.
The arbitration proceedings shall be conducted in Indianapolis, Indiana
unless otherwise mutually agreed. The Arbitration Board shall afford
adequate opportunity to each of the Parties to present information with
respect to the disagreement submitted to arbitration and may request
further information from the Parties. Except as provided in the
preceding sentence, the Parties may, by mutual agreement, specify the
rules which are to govern any proceeding before the Arbitration Board
and limit the matters to be considered by the Arbitration Board, in
which event the Arbitration Board shall be governed by the terms and
conditions of such agreement. In the absence of any such agreement
respecting the rules which are to govern any proceeding, the then
current rules of the American Arbitration Association for the conduct
of commercial arbitration shall govern the proceedings unless in
conflict with Indiana Law, which shall control.
Procedural matters pertaining to the conduct of the arbitration and the
award of the Arbitration Board shall be made upon a determination of a
majority of the arbitrators. The Parties shall, however, be entitled to
all discovery provided for by the Indiana Rules of Civil Procedure.
The findings and award of the Arbitration Board, so made upon a
determination of a majority of the arbitrators, shall be final and
conclusive with respect to the disagreement submitted for arbitration
and shall be binding upon the Parties, except as otherwise provided by
law. Each Party shall pay the fee and expenses of the arbitrator
selected by it, together with the costs and expenses incurred by it in
the preparation of its case to the arbitrators and the Parties shall
split the costs of the third arbitrator equally. Judgment
upon the award may be entered in any court having jurisdiction. In the
event the Parties do not agree to arbitrate, each shall have the right
to take appropriate judicial action.
8.08 Unanimous Action. All actions taken by said Operating Committee must
be by unanimous vote or consent of all Operating Committee Representatives.
ARTICLE 9
CONTINUITY AND SUSPENSION OF SERVICE,
RELATIVE RESPONSIBILITIES
9.01 Continuity and Suspension of Service. Each Party shall exercise
reasonable care and foresight to maintain continuity of service as provided
in this Agreement, but neither Party shall be considered in Default
(hereinafter defined) in respect of any obligation hereunder if prevented
from fulfilling such obligation by reason of Force Majeure as defined in
Article 11 below. In no event shall either Party be liable to the other
Party for loss or damage arising from failure, interruption or suspension
of service. Each Party reserves the right to suspend service without
liability at such times and for such periods and in such manner as it
deems advisable, including, without limitation, suspensions for the purpose
of making necessary adjustments to, changes in, or repairs on, its
facilities, and suspensions in cases where, in its sole opinion, the
continuance of service to the other Party would endanger person or property.
Both Parties shall use their best efforts to provide each other with
reasonable notice in the event of suspension of service.
9.02 Relative Responsibilities. Each Party assumes all responsibility for
receipt and delivery of electricity on its system to and from its Points of
Interconnection. Neither Party assumes any responsibility with respect to
the construction, installation, maintenance or operation of the system of
the other Party or of the systems of Third Parties, in whole or in part.
Neither Party shall, in any event, be liable for damage or injury to any
person or property, whatsoever, arising, accruing or resulting from,
in any manner, the receiving, transmission, control, use, application or
distribution by the other Party of said electricity. Each Party shall
use reasonable diligence to maintain its facilities in proper and
serviceable condition, and shall take reasonable steps and precautions for
maintaining the services agreed to be provided and received under this
Agreement.
ARTICLE 10
TERM OF AGREEMENT
10.01 Effective Date. The effective date of this Agreement (the
"Effective Date") shall be the date as of which all conditions precedent
set forth in Article 13 hereinbelow have been satisfied. Such Effective Date
shall be specified in a writing executed by both Parties. The Parties agree
to use their best efforts to support and cooperate with each other to
satisfy said conditions precedent.
10.02 Term. The term of this Agreement and of the annexed Service
Schedules shall begin on the Effective Date and continue through December 31,
2010 ("Initial Term"). The Agreement and Service Schedules shall continue in
effect for successive terms of three (3) years each until terminated pursuant
to notice given by either Party to the other or otherwise terminated under
Paragraphs 12.02, 13.01, 18.01 or 19.03 hereof. Any notice of termination
given hereunder shall be given in writing, at least two (2) years prior to
the end of the Initial Term or any successive term, and may be delivered at
any time after the Effective Date of this Agreement; provided, that this
Agreement shall not be deemed to have terminated until all prior commitments
for sales or purchases of power and energy under this Agreement have been
fullfilled and all payments therefor have been made.
ARTICLE 11
FORCE MAJEURE
11.01 Force Majeure. The term "Force Majeure" shall mean any cause
beyond the control of the Party invoking the Force Majeure which by the
exercise of ordinary care could not have been prevented by that Party,
including, but not limited to, failure or threat of failure of facilities,
equipment or fuel supply, ice, act of God, flood, earthquake, storm, fire,
lightning, explosion, epidemic, war, civil war, invasion, insurrection,
military or usurped power, act of the public enemy, riot, civil disturbance
or disobedience, strike, lockout, work stoppage, other industrial
disturbance or dispute, labor or material shortage, national emergency,
sabotage, failure of contractors or suppliers of materials, inability to
obtain or ship materials or equipment because of the effect of similar
causes on suppliers or carriers, restraint by court order or other public
authority or governmental agency, or action or non-action by, or failure to
obtain the necessary authorizations or approvals from, or obtaining of the
necessary authorizations or approvals only subject to unreasonable
restrictions from, any governmental agency or authority, which by the
exercise of due diligence such Party could not reasonably have been
expected to avoid. Nothing contained herein shall be construed to require
a Party to settle any strike, lockout, work stoppage or other industrial
disturbance or dispute in which it may be involved or to take an appeal from
any judicial, regulatory or administrative action. Any Party rendered
unable to fulfill any of its obligations under this Agreement by reasons of
Force Majeure shall exercise due diligence to remove such inability with all
reasonable dispatch. In the event either Party is unable, in whole or in
part, to perform any of its obligations by reasons of Force Majeure,
obligations of the Party relying thereon, insofar as such obligations
are affected by such Force Majeure, shall be suspended during the
continuance thereof but no longer. The Party invoking the Force Majeure
shall specifically state the full particulars of the Force Majeure and the
time and date when the Force Majeure occurred. Notices given by telephone
under the provisions of this Article shall be confirmed in writing as soon
as reasonably possible. When the Force Majeure ceases, the Party relying
thereon shall give immediate notice thereof to the other Party. This
Agreement shall not be terminated by reason of Force Majeure
but shall remain in full force and effect.
ARTICLE 12
DEFAULT
12.01 Default Defined. As used herein, "Default" shall mean the failure
of a Party to make any payment or perform any obligation at the time and in
the manner required by this Agreement, except where such failure to
discharge obligations (other than the payment of money) is the result of
Force Majeure. Failure to make any payment in the time and manner required
by this Agreement shall not be excused as a Default by payment of late
charges except with respect to a Default cured in accordance with the
provisions in Paragraph 12.02 below. It shall not be a default for a Party
to make a partial payment pursuant to invoking the billing dispute
procedures in Paragraph 7.05.
12.02. Remedies for Default. Upon failure of a Party to make a payment
or perform an obligation required hereunder, the other Party shall give
written notice of Default to the Defaulting Party. The Defaulting Party
shall have thirty (30) days within which to cure the Default. If a Default
is not cured within such period, the Party not in Default, at its option,
may, in addition to all other rights and remedies available at law, in
equity or under any other provision of this Agreement: (i) give notice to
the Defaulting Party of its intention to cure the Default and to take
such steps as such Party deems necessary to cure the Default, or (ii)
provide written notice of termination. The Defaulting Party shall, in any
event, pay to the other Party the total of all additional costs reasonably
incurred by the Party as a result of such Default and/or the curing of such
Default, including reasonable attorneys' fees, money reasonably paid to
others, the reasonable equivalent in money for services or property
obtained, and any other costs reasonably incurred by such non-Defaulting
Party in attempting to remedy such Default, together with interest on the
total of such costs at the per annum rate of two (2) percent above
the Prime Lending Rate. This provision is not intended as a liquidated
damages provision or to limit liability in any way, and the Party not in
Default may also maintain such other actions for damages as may be provided
by law, in equity or under this Agreement.
ARTICLE 13
CONDITIONS PRECEDENT TO EFFECTIVENESS
OF AGREEMENT AND AMENDMENTS
13.01 Conditions Precedent. The effective Date of this Agreement is
conditional upon the approval or acceptance of this Agreement by the FERC and
any other regulatory authority or other governmental agency having
jurisdiction. If any of the terms and conditions of this Agreement are
altered or made impossible of performance by order, rule, or regulation of
any such regulatory agency and, as a result, the Parties are unable to agree
upon a modification of such terms and conditions that will satisfy such
order, rule, or regulation, then neither Party shall be liable to the other
Party for failure thereafter to comply with such terms and conditions;
provided, that if either Party deems that the loss of benefits to be
derived from this Agreement are unduly burdensome, then this Agreement may be
terminated forthwith upon 30 days advance notice.
13.02 Cooperation with the FERC (Federal Energy Regulatory Commission)
Filing. Both Parties recognize and agree that this Agreement must be filed
with the FERC by IPL, and both Parties agree to cooperate with IPL's request
for acceptance for filing of this Agreement without suspension by the FERC.
In this connection, both Parties agree that each of them will execute any
and all documents, duly authorize all officers or agents as necessary, and
do all other things necessary and appropriate to secure acceptance for
filing of this Agreement, including the terms and conditions and the
initial rates and charges hereof, by the FERC without suspension, or
change or modification in the terms hereof.
13.03 Cooperation with IURC (Indiana Utility Regulatory Commission)
Filing. Both Parties recognize and agree that this Agreement must be filed
with the IURC by IMPA, and both Parties agree to cooperate with IMPA's
request for acceptance for filing of this Agreement without suspension by
the IURC. In this connection, both Parties agree that each of them will
execute any and all documents, duly authorize all officers or agents as
necessary, and do all other things necessary and appropriate to secure
acceptance for filing of this Agreement, including the terms and conditions
and the initial rates and charges hereof, by the IURC without suspension,
or change or modification in the terms hereof.
13.04 Amendments. Except as otherwise provided in Article 19.02 below
or in the provisions of the Service Schedules, this Agreement may be amended
only by mutual agreement of the Parties, which amendment shall be in writing
and shall become effective upon satisfaction of the Conditions Precedent in
Article 13 applicable thereto.
ARTICLE 14
INDEMNIFICATION AND LIMITATION OF LIABILITY
14.01 Limitation of Liability. In no event shall one Party be liable to
the other Party for any indirect, special, incidental or consequential
damages with respect to any claim arising out of this Agreement.
14.02 Indemnification Clause. Each Party shall indemnify, defend and
hold harmless the other Party from and against any liability, loss, cost,
damage and expense because of injury or damage to persons or property
resulting from, or arising out of the use of its own facilities (including
the Joint Transmission System) or the production or flow of electric energy
by and through its own facilities (including the Joint Transmission System),
except when such injury or damage is due to the sole negligence of the other
Party. In addition, each Party shall hold the other Party harmless for any
taxes, licenses, permits, fees, penalties, or fines assessed against one
Party upon any of the property of such Party (including the Joint
Transmission System) located on the premises of the other Party.
14.03 Environmental Compliance. Each Party shall be responsible for its
own compliance with all applicable environmental regulations, and each Party
shall hold the other Party harmless from any liability, loss, cost or
expense arising out of, and shall bear all costs arising from, its
failure to comply with such environmental regulations.
ARTICLE 15
TAXES
15.01 Compensation For Taxes. If at any time during the term of this
Agreement there should be levied or assessed against either of the Parties
any direct taxes by any taxing authority on the power and/or energy
generated, purchased, sold, transmitted, interchanged, or exchanged under
this Agreement, which taxes are in addition to or different from the forms
of direct taxes being levied or assessed on the date of this Agreement and
such direct taxes results in increasing the cost to either or both Parties
of carrying out the provisions of this Agreement, then the rates and charges
for such power and/or energy furnished hereunder shall be increased
automatically to the extent necessary to make adequate and equitable
allowance for such taxes.
ARTICLE 16
WAIVERS
16.01 Waiver Rights. Any waiver by either Party of its rights under this
Agreement, shall not be deemed a waiver with respect to any rights that
subsequently accrue. Any delay, less than the statutory period of
limitations, in asserting or enforcing any rights under this Agreement,
shall not be deemed a waiver of such rights.
ARTICLE 17
INSURANCE
17.01 Insurance Responsibilities. Each Party shall be responsible for
the procurement and maintenance of its own property, casualty and
third-party liability insurance to adequately protect its personnel and
property and to cover its liabilities and responsibilities under this
Agreement.
ARTICLE 18
ASSIGNMENT
18.01 Assignment of Agreement. This Agreement shall inure to the benefit
of, and be binding upon, the respective successors and assigns of the Parties
and, insofar as permitted by law, on any trustee appointed for a Party under
the United States Bankruptcy Code; and this Agreement may not be assigned by
either Party, without the written consent of the other Party, which consent
shall not be unreasonably withheld. In the event either Party is liquidated
or dissolved as a corporation or otherwise terminates its business
operations, this Agreement shall become null and void and all obligations
under this Agreement and the Service Schedules, except financial obligations
incurred prior to the receipt of notice of such event, shall cease upon the
date of such notice.
ARTICLE 19
MISCELLANEOUS
19.01 Prudent Utility Practices. The Parties shall discharge all
obligations under this Agreement in accordance with prudent utility practices.
19.02 Change in Rates. Nothing herein shall be construed as affecting,
in any way, the right of IMPA or IPL to unilaterally make a change in its
rates or charges applicable to the furnishing of service by IMPA or IPL
under this Agreement, under Section 205 of the Federal Power Act and
pursuant to the FERC's Rules and Regulations promulgated thereunder, or
under Indiana Code 8-1-2.2-1 et seq. pursuant to the IURC's Rules and
Regulations as respectively applicable to the Parties; provided, that
either Party may intervene and fully participate in any such proceeding
instituted by the other Party pursuant to this paragraph in the manner
and to the extent permitted by the FERC or the IURC, as respectively
applicable.
19.03 No Partnerships; Tax Matters. Notwithstanding any provision of
this Agreement to the contrary, the Parties do not intend to create hereby
any joint venture, partnership, association taxable as a corporation, or
other entity for the conduct of any business for profit, and any construction
of this Agreement to the contrary which has an adverse tax effect on either
Party shall render this Agreement null and void from its inception.
19.04 Survivorship Of Certain Obligations. Notwithstanding Paragraph
19.03 above, the termination or voidance of this Agreement shall not
discharge any Party from any obligation it owes to the other Party under
this Agreement by reason of any transaction, loss, cost, damage, expense or
liability which shall have occurred or arisen after the Effective Date of
this Agreement, but prior to such termination or voidance. It is the intent
of the Parties that should this Agreement be terminated or voided under
Paragraph 19.03 above or any other paragraph hereof, the satisfaction of
any such obligation and the provisions for indemnification and limited
liability of Article 14 above shall constitute a separate agreement between
the Parties that is severable from this Agreement and, as such, shall remain
in full force and effect for actions that occurred prior to the notice of
termination or voidance of this Agreement.
19.05 Computation of Time. In computing any period of time prescribed or
allowed by this Agreement, the day of the act, event, or default from which
the designated period of time begins to run shall be excluded but the last
day of such period shall be included, unless it is a Saturday, Sunday, or
legal holiday, in which event the period shall run until the end of the next
business day which is not a Saturday, Sunday, or legal holiday.
19.06 Paragraph Headings Not to Affect Meaning. The descriptive headings
of the Articles and paragraphs of this Agreement have been inserted for
convenience only and shall not modify or restrict any of the terms and
provisions thereof.
19.07 IMPA s Rights under the Joint Transmission System Agreement.
IMPA through its rights in the Joint Transmission System, shall be
responsible for taking all steps to pursue in good faith, its rights under
the Joint Transmission System Agreement, to satisfy IMPA's responsibilities
under this Agreement.
ARTICLE 20
NOTICES
20.01 Notices Relating to Provisions of this Agreement. Any notice,
demand or request made by a Party to the other Party pursuant to any
provision of this Agreement shall be made in writing and shall be delivered
in person, by registered or certified mail to the named officer of the Party
at the address listed below; provided, that either Party may, from time to
time, change such designated officer or the address thereof by giving
written notice of such change to the other Party.
TO IPL:
President
Indianapolis Power & Light Company
P. O. Box 1595
Indianapolis, Indiana 46206-1595
TO IMPA:
President
Indiana Municipal Power Agency
11610 North College Avenue
Carmel, Indiana 46032
20.02 Notices Of An Operating Nature. Any notice, request or demand
pertaining to matters of an operating nature may be served in person or by
United States mail, messenger, telephone, or FAX as circumstances dictate,
to a Representative; provided, that should the same not be written,
confirmation thereof shall be made in writing as soon as practicable
thereafter, upon request of the Party being served.
ARTICLE 21
GOVERNING LAW AND CONSTRUCTION OF AGREEMENT
21.01 This Agreement shall be governed by and construed according to the
laws of the State of Indiana.
ARTICLE 22
ENTIRE AGREEMENT CONTAINED HEREIN
22.01 This is the entire agreement between the Parties and no oral or
other written representations shall have the affect of amending or modifying
this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective duly authorized officers and their respective corporate
seals to be hereunto affixed as of the date first above written.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ R. L. Humke
President and Chief Operating Officer
ATTEST:
By /s/ M. E. Woods _
Marcus E. Woods, Vice President,
Secretary and General Counsel
INDIANA MUNICIPAL POWER AGENCY
By /s/ Raj G. Rao
President
ATTEST:
By /s/ Robert J. Clifford
Robert J. Clifford
Vice President and Assistant Secretary
<PAGE>
EXHIBIT I
SERVICE SCHEDULE A
EMERGENCY SERVICE
Under Interconnection Agreement dated August 19, 1994 between Indianapolis
Power & Light Company and Indiana Municipal Power Agency (the "Agreement").
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those used
in this Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective
Date of this Agreement and shall continue in effect throughout the duration
of this Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 Conditional Service. Subject to the provisions of Subsection 3.2 of
this Section 3, in the event of a breakdown or other emergency in or on the
system of either Party involving either sources of power or transmission
facilities, or both, impairing or jeopardizing the ability of the Party
suffering the emergency to meet the loads of its system, the other Party
shall deliver to such Party electric energy that it is requested to deliver;
provided, however, that neither Party shall be obligated to deliver such
energy which, in its sole judgment, it cannot deliver without interposing a
hazard to or economic burden upon its operations or without impairing or
jeopardizing the other load requirements of its system and provided
further, that neither Party shall be obligated to deliver electric energy
to the other for a period in excess of forty-eight (48) consecutive hours
during any single emergency.
3.2 Non-performance. The Parties recognize that the delivery of electric
energy as provided in Subsection 3.1 of this Section 3 is subject to two
conditions which may preclude the delivery of such energy as so provided:
(a) the Party requested to deliver electric energy may be suffering an
emergency in or on its own system as described in said Subsection 3.1, or
(b) the system of a Party may be delivering electric energy, under a mutual
emergency interchange agreement, to the system of another interconnected
company which is suffering an emergency in or on its system. Under
conditions as cited under (a) above, neither Party shall be considered to be
in default hereunder if it is unable to comply with the provisions of said
Subsection 3.1. Under conditions as cited under (b) above, neither Party
shall be considered to be in default hereunder if it is unable to comply with
the provisions of said Subsection 3.1; provided, however, that such Party shall
make every effort consistent with the terms of its contract with said other
interconnected company to make the electric energy as provided in Subsection
3.1 available to the other Party hereto as soon as possible.
<PAGE>
3.3 Reserve Generating Capacity Review. If at any time the record over a
reasonable prior period shows clearly that either of the Parties has failed
to deliver energy in accordance with and subject to the provisions of
Subsection 3.1, either Party by written notice given to the other Party, may
call for a joint study by the Parties of the reserve generating capacity in
and provided for their respective systems and of their respective
transmission facilities affecting the supply and delivery of power and
energy under this Agreement. It shall be the purpose of such study to
determine the adequacy or inadequacy of reserve generating capacity and
transmission facilities being provided to meet the requirements of the
Parties' respective systems, reflecting obligations under this Agreement,
and, if inadequate, the extent of the burden that one Party may be placing
upon the other Party. If it should be found that one Party is placing an
unreasonable burden upon the other, the Party causing such burden shall take
such measures as are necessary to remove the burden from the other Party, or
the Parties shall enter into such arrangements as shall provide for
equitable compensation to the Party being burdened.
SECTION 4 - COMPENSATION
4.1 When IPL is the Supplying Party:
4.11 Emergency Energy delivered that is generated by IPL shall be
settled for, at the option of IPL, either by the return of equivalent
energy at a mutually acceptable time upon request of IPL or by
payment of the greater of (a) 110% of the Out-Of-Pocket Cost (such
cost being as of the delivery point or points, as referred to in
Article 5.0 of this Agreement, taking into account electrical losses
incurred from the source or sources of such energy to the delivery
point or points) of supplying such energy, or (b) $0.10 per
kilowatt-hour.
4.12 Emergency Energy delivered that is purchased by IPL from a
third party shall be settled for by payment of an energy charge of
100% of the Out-Of-Pocket Cost paid therefor by IPL, plus an amount
to be agreed upon by the Parties at the time of the transactions of
up to 4.6 mills per kilowatt-hour (consisting of up to 3.6 mills
per kilowatt-hour for bulk transmission charge plus 1 mill per
kilowatt-hour for difficult to quantify energy-related costs), plus
any transmission losses resulting on IPL's system on account of the
transaction, and plus any taxes incurred by IPL on account of the
transaction.
4.2 When IMPA is the Supplying Party:
4.21 Emergency Energy delivered that is generated by IMPA shall be
settled for, at the option of IMPA, either by the return of
equivalent energy at a mutually acceptable time upon request of IMPA
or by payment of the great of (a) 110% of the Out-Of-Pocket Cost
(such cost being as of the delivery point or points, as referred to
in Article 5.0 of this Agreement, taking into account electrical
losses incurred from the source or sources of such energy to the
delivery point or points) of supplying such energy, or (b) $0.10
per kilowatt-hour.
<PAGE>
4.22 Emergency Energy delivered that is purchased by IMPA from a
third party shall be settled for by payment of an energy charge of
100% of the Out-Of-Pocket Cost paid therefor by IMPA, plus an amount
to be agreed upon by the Parties at the time of the transactions of
up to 4.5 mills per kilowatt-hour (consisting of up to 3.5 mills per
kilowatt-hour for bulk transmission charge plus 1 mill per kilowatt-
hour for difficult to quantify energy-related costs), plus any
transmission losses resulting on IMPA's system on account of the
transaction, and plus any taxes incurred by IMPA on account of the
transaction.
4.3 If the option of returning electric energy under Subsection 4.11 or
4.21 is exercised, then it shall be returned at times when the load
conditions of the Party receiving it are equivalent to the load conditions
of such Party at the time the energy for which it is returned was delivered
or, if such Party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be agreed upon by the
Operating Committee under this Agreement, as will compensate either Party
for the difference in conditions.
EXHIBIT II
SERVICE SCHEDULE B
INTERCHANGE ENERGY
Under Interconnection Agreement dated August 19, 1994 between Indianapolis
Power & Light Company and Indiana Municipal Power Agency (the "Agreement").
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those used in
this Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective Date of
this Agreement and shall continue in effect throughout the duration of this
Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 Economy Energy. Either Party may arrange to purchase from the other
Party electrical energy ("Economy Energy") when it is possible to effect a
savings thereby and, when, in the sole judgment of the supplying Party,
such energy is available. Prior to each Economy energy transaction, the
amount of energy, the time of its delivery, and the compensation therefore
shall be determined by the Parties. Compensation so determined by the
Parties shall not be subject to later review or adjustment. In the event
conditions arise during such scheduled period which cause the delivery of
Economy Energy to become burdensome to the supplying Party, said Party has
the right to request the receiving Party to reduce the amount of such energy
to any quantity specified. Receipt or delivery of Economy Energy may also
be arranged with other interconnected systems not Parties to this Agreement.
3.2 Non-Displacement Energy. It is recognized that occasions will arise
when transactions under subsection 3.1 above will be impracticable although
a Party may have electric energy (herein called "Non-Displacement Energy")
which it is willing to make available from surplus capacity from its own
system or from outside sources, or both and which can be utilized
advantageously for short intervals by the other Party. In such event, the
Party desiring receipt of such energy shall notify the other Party of the
extent to which it desires to obtain Non-Displacement Energy, and if the
other Party, in its sole judgment, determines that Non-Displacement Energy is
available, schedules providing the periods and extent of use shall be
mutually agreed upon. Neither Party shall be obligated to make any Non-
Displacement Energy available to the other.
SECTION 4 - COMPENSATION
ECONOMY ENERGY
4.1 The charge for Economy Energy purchased by either Party from the other
Party shall be based on the principle that the Party purchasing it shall pay
the Out-of-Pocket Cost (including all operating, maintenance, tax,
transmission losses and other expenses incurred that would not have been
incurred if the energy had not been supplied) of the Party supplying such
Energy and that the resulting savings to the receiving Party shall be
equally shared by the supplying and receiving Parties. Prior to any
transaction involving the delivery and receipt of Economy Energy, authorized
representataives of the Parties shall determine and agree upon the
compensation applicable to such transaction. Compensation so agreed upon
shall not be subject to later review or adjustment.
4.2 When Economy Energy is obtained from or delivered to a system
interconnected with either of the Parties which is not a signatory to this
Agreement ("Third Party"), payment among the participants in such a
transaction shall be based on the Out-of-Pocket Costs of the supplying
Party or Third Party providing the Energy and an allocated of the gross
savings, which are defined as the difference between (1) what the Out-of-
Pocket Costs of the receiving Party or Third Party would have been to
generate such Energy, and (2) the Out-of-Pocket Costs of the supplying
Party or Third Party providing the Energy. Such allocation shall be made
as provided in Subsections 4.21 and 4.22 herein below.
4.21 The transmitting party shall be paid (A) its cost of
purchasing the Energy supplied, plus (B) its costs of additional
transmission losses plus the following:
(1) When IPL is such transmitting Party: Fifteen
percent of the gross savings remaining after
deducting all such payments for transmission losses.
(2) When IMPA is such transmitting Party: Fifteen
percent of the gross savings remaining after deducting
all such payments for transmission losses.
4.22 The supplying Party or Third Party shall be paid its Out-of
Pocket Costs of providing the Energy, plus one-half of the gross
savings remaining after deducting all payments made under Subsection
4.21 (B) and (C). The receiving Party or Third Party shall pay an
amount which will provide it with the other one-half of the gross
savings remaining after deducting all payments made under Subsection
4.21 (B) and (C).
NON-DISPLACEMENT ENERGY
4.3 Non-Displacement Energy delivered hereunder shall be settled for either
by the return of equivalent Energy or, at the option of the supplying Party,
by payment of an energy charge of up to 110% of the Out-of-Pocket Costs
(such cost being as of the delivery point or points, as provided in Article
5 of this Agreement, taking account the electrical losses incurred from the
source or sources of such energy to said delivery point or points) to the
supplying Party generating such energy plus:
4.31 When IPL is the supplying Party:
4.31.1 IPL at its option, may impose a demand charge of up
to 48.6 mills per kilowatthour reserved per hour, but the
total charge in any one day shall be no more than the
product of $0.778 times the highest amount in kilowatts
reserved in any hour during the day or,
4.31.2 IPL, at its option, may choose to supply such energy
without imposing a demand charge in which case no additional
payment is included. However, if this option is picked, the
cost of such energy will be calculated as 110% of the actual
Out-of-Pocket Cost (such cost being as of the delivery point
or points, as provided in Paragraph 5.01.1 of Article 5 of
this Agreement, taking into account electrical losses
incurred from the source or sources of such energy to said
delivery point or points) to the supplying Party generating
such energy.
4.31.3 If equivalent energy is returned by IMPA, it shall be
returned at times when the load conditions of IPL are
equivalent to the load conditions of IPL at the time the
energy for which it is returned was delivered or, if IPL
elects to have equivalent energy returned under different
conditions, it shall be returned in such amount, to be
agreed upon by the operating Committee, as will compensate
for the difference in conditions.
4.32 When IMPA is the supplying Party:
4.32.1 IMPA at its option may impose a demand charge of up
to 43.5 mills per kilowatthour reserved per hour, but the
total charge in any one day shall be no more than the
product of $0.696 times the highest amount in kilowatts
reserved in any hour during the day, or
4.32.2 IMPA, at its option, may choose to supply such
energy without imposing a demand charge in which case no
additional payment is included. However, if this option
is picked, the cost of such energy will be calculated as
110% of the actual Out-of-Pocket Cost (such cost being as
of the delivery point or points, as provided in Paragraph
5.01.1 of Article 5 of this Agreement, taking into account
electrical losses incurred from the source or sources of such
energy to said delivery point or points) to the supplying
Partyh generating such energy.
4.32.3 If equivalent energy is returned by IPL, it shall be
returned at times when the load conditions of IMPA are
equivalent to the load conditions of IMPA at the time the
energy for which it is returned was delivered or, if IMPA
elects to have equivalent energy returned under different
conditions, it shall be returned in such amount, to be agreed
upon by the Operating Committee, as will compensate for the
difference in conditions.
4.4 Non-Displacmeent Energy delivered under Section 3.2 above that is
purchased by the supplying party from another interconnected system which is
not a signatory to this Agreement ("Third Party") at the request of the
receiving party shall be settled for as follows:
4.41 When IPL is the supplying Party, by a payment of 100% of the
amount paid such Third Party, plus a demand charge in an amount to
be agreed upon by the Parties at the time of the reservation of up
to 3.6 mills per kilowatt reserved per hour, but the total demand
charge in any one day shall be no more than the product of $0.058
times the highest amount in kilowatts reserved in any hour during
the day, plus 1 mill per kilowatthour (for difficult to quantify
energy-related costs), plus the cost of any quantifiable
transmission losses, taxes, and other expenses incurred that
would not have been incurred if such transaction had not been made.
4.42 When IMPA is the supplying Party, by a payment of 100% of
the amount paid such Third Party, plus a demand charge in an amount
to be agreed upon by the Parties at the time of the resrevation of
up to 3.5 mills per kilowatt reserved per hour, but the total demand
charge in any one day shall be no more than the product of $0.055
times the highest amount in kilowatts reserved in any hour during
the day, plus 1 mill per kilowatthour (for difficult to quantify
energy-related costs), plus the cost of any quantiable transmission
losses, taxes, and other expenses incurred that would not have been
incurred if such transaction had not been made.
4.5 Notwithstanding the rates stated in Subsection 4.3 above when IPL is the
supplying Party, if the "demand charge" option of Subsection 4.31.1 is
chosen, the sum of demand and energy charges for each specific reservation
made pursuant to Subsection 3.2 of this Service Schedule shall not:
4.51 exceed the total of:
4.51.1 The product of the number of kilowatts reserved for
such reservation times the maximum hourly demand charge
specified above in Subsection 4.3; and
4.51.2 The product of the number of kilowatt-hours supplied
for such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg Unit
No. 4 for the last preceding month during which it was run;
or
4.52 be less than 100% of the total Out-of-Pocket Cost of
supplying the Non-Displacement Energy for each reservation.
4.6 Notwithstanding the rates stated in Subsection 4.3 above when IMPA is
the supplying Party, if the "demand charge" option of Subsection 4.31.1 is
picked, the sum of the demand and energy charges for each specific
reservation made pursuant to Subsection 4.3 of this Service Schedule shall
not:
4.61 exceed the total of:
4.61.1 The product of the number of kilowatts reserved
for such reservation times the maximum hourly demand
charge specified above in subsection 4.3; and
4.61.2 The product of the number of kilowatt-hours
supplied for such reservation times 110% of the average
cost per kilowatt-hour of energy generated by IMPA's
Trimble County Unit #1 for the last preceding month
during which it was run; or
4.62 be less than 100% of the total Out-of-Pocket Cost of supplying
the Non-Displacement Energy for such reservation.
4.7 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Petersburg Unit No. 4, is limited to
515 MW.
4.8 The aggregate instant total capacity of all IMPA sales under this and
other Service Schedules which are a part of this and other IMPA Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Trimble County Unit #1, is limited to
64 MW. For sales in excess of the capacity limitation of 64 MWs noted
above, the rate shall consist of an energy charge of up to 110% of the
average cost per kilowatt-hour of the energy generated and a demand charge
of up to 27.0 mills per kilowatt per hour, but in no event shall the total
revenue (energy charge and demand charge combined) be less than 100% of the
Out-of-Pocket Costs of supplying the short term energy for such reservation.
EXHIBIT III
SERVICE SCHEDULE C
SHORT TERM POWER
Under Interconnection Agreement dated August 19, 1994 between Indianapolis
Power & Light Company and Indiana Municipal Power Agency (the "Agreement").
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those used
in this Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective Date
of this Agreement and shall continue in effect throughout the duration of
this Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 Either Party, by giving the other Party notice, may reserve from the
other (a) electric power ("Weekly Short Term Power") for period of one or
more weeks or (b) electric power ("Daily Short Term Power") for periods of
one or more days whenever the Party requested to reserve the same is
willing to make such power available. Under ordinary circumstances such
reservation shall extend for not less than a claendar week if it begins with
Sunday or for the balance of the calendar week if it begins with any day
subsequent to Sunday; however, under unusual circumstances, the Parties may
mutually agreed upon a reservation of Daily or Weekly Short Term Power for
a lesser number of days. In all cases the Party asked to supply Daily or
Weekly Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by the
other Party as Short Term Power.
3.11 Prior to each reservation of Weekly or Daily Short Term Power,
the number of kilowatts to be reserved, the period of the
reservation, the terms of such reservation, and the source of such
power if the supplying Party is in turn reserving such power from
another interconnected system which is not a signatory to this
Agreement ("Third party"), shall be determined by the Parties.
Such reservation shall be confirmed in writing at the request of
either Party. If during such period conditions arise that could
not have been reasonably foreseen at the time of the reservation
and cause the reservation to be burdensome to the supplying Party,
such Party may by oral notice to the reserving Party, such oral
notice to be later confirmed in writing if requested by either
Party and such confirmation shall be forwarded not later than the
third day following the day such oral notice is given, excluding
Saturdays, Sundays and holidays, reduce the number of kilowatts
reserved by such amount and for such time as it shall specify in
such notice, but kilowatts reserved hereunder that the supplying
Party is in turn reserving from a Third Party may be reduced only
to the extent they are reduced by such Third Party.
3.12 During each period that Weekly or Daily Short Term Power has
been reserved, the Party that has agreed to supply such power shall
upon call by the reserving Party deliver associated electric energy
("Weekly or Daily Short Term Energy") to the reserving Party as of
the delivery point or points, as provided in Paragraph 5.01 of
Article 5 of this Agreement at a rate during each hour of up to and
including the number of kilowatts reserved.
SECTION 4 - COMPENSATION
4.1 DEMAND CHARGES
The Party reserving Weekly or Daily Short Term Power shall pay the supplying
Party the following demand charges:
4.11 WEEKLY SHORT TERM POWER
4.11.1 When IPL is the supplying Party, IMPA shall pay
IPL for Weekly Short Term Power at the rate of up to $3.89
per kilowatt reserved per week.
4.11.2 When IMPA is the supplying Party, IPL shall pay
IMPA for Weekly Short Term Power at the rate of up to $3.48
per kilowatt reserved per week.
4.11.3 In the event the amount of Weekly Short Term Power
reserved is reduced upon notice from the supplying party,
the demand charge for each day (other than Sunday) during
which any such reduction is in effect shall be reduced by
one-sixth (1/6) of the supplying Party's weekly demand rate
per kilowatt for each kilowatt of reduction; however, the
total of such reductions shall not exceed the weekly demand
charge (in effect for this transaction) per kilowatt for that
particular weekly period.
4.12 DAILY SHORT TERM POWER
4.12.1 For any day that Daily Short Term Power is reserved
by either Party, the daily demand rate shall be equal to a
rate to be agreed upon by the Parties at the time of the
reservation of up to one-fifth (1/5) of the supplying Party's
maximum Weekly Short Term Power demand rate. The total
demand charge revenues in any consecutive seven day period
shall not exceed the product of the Weekly rate and the
highest demand experienced on any day in the seven day
period.
4.12.2 In the event the amount of Daily Short Term Power
reserved is reduced upon notice from the supplying Party,
the demand charge per kilowatt for each day during which
any such reduction is in effect shall be reduced by the
daily aforesaid demand rate (in effect for this transaction)
per kilowatt of reduction.
4.13 THIRD PARTY WEEKLY OR DAILY SHORT TERM POWER
4.13.1 For any period that Short Term Power is reserved by
IMPA for and at the request of IPL from a Third Party, such
Short Term Power shall be supplied at the rate of up to
$0.28 per kilowatt reserved per week or at the rate of up to
$0.055 per kilowatt reserved per day, both charges pertaining
to the reservation of transmission, plus the demand charge
paid therefor by IMPA to the Third Party. The total demand
charge revenues for the reservation of transmission in any
consecutive seven day period shall not exceed the product of
the Weekly rate for the reservation of transmission and the
highest demand experienced on any day in the seven day
period.
4.13.2 For any period that Weekly Short Term Power is
reserved by IPL for and at the request of IMPA from a Third
Party, such Short Term Power shall be supplied at the rate
of up to $0.29 per kilowatt reserved per week or at the rate
of up to $0.058 per kilowatt reserved per day, both charges
pertaining to the reservation of transmission, plus the
demand charge paid therefor by IPL to the Third Party. The
total demand charge revenues for the reservation of
transmission in any consecutive seven day period shall not
exceed the product of the Weekly rate for the reservation
of transmission and the highest demand experienced on any
day in the seven day period.
4.13.3 In the event the amount of Weekly Short Term Power
reserved from a Third Party is reduced upon the request of
the Third Party, the demand charge for each day during
which such reduction is in effect shall be reduced by the
amount by which such reduction is in effect shall be
reduced by the amount by which the demande charge payable
by the supplying Party is reduced under its agreement with
such Third Party. The transmission reservation charge
shall remain payable to the supplying Party at the option
of the supplying Party.
4.13.4 In the event the amount of Weekly Short Term Power
reserved from a Third Party is reduced by the supplying
Party because of a transmission burden on its system, the
demand charge for each day during which such reduction is
in effect shall be reduced by the amount by which the
demand charge chargeable to the supplying Party is reduced
under its agreement with such Third Party plus one-sixth
of the Weekly rate per kilowatt agreed to under Subsection
4.13.1 or 4.13.2 for each kilowatt of reduction each day,
but not more than the rate agreed upon for each kilowatt
per week.
4.13.5 In the event the amount of Daily Short Term Power
reserved from a Third Party is reduced upon the request of
the Third Party, the demand charge for such power shall be
reduced by the amount by which the demand charge payable by
the supplying Party is reduced under its agreement with such
Third Party. The transmission reservation charge shall
remain payable to the supplying Party at the option of the
supplying Party.
4.13.6 In the event the amount of Daily Short Term Power
reserved from a Third Party is reduced by the supplying
Party because of a transmission burden on its system, the
demand charge for such power shall be reduced by the amount
by which the demand charge payable by the supplying Party
is reduced under its agreement with such Third Party plus
the Daily rate per kilowatt agreed to under Subsection
4.13.1 or 4.13.2 for each kilowatt of reduction.
4.2 Energy Charges
The reserving Party shall pay the supplying Party for all Short Term Energy
delivered pursuant to Subsection 3.12 above at the following rates:
4.21 For each kilowatthour that is generated by the supplying
Party's system, in an amount of up to 100% of the Out-of-Pocket
Costs (such cost being as of the delivery point or points, as
provided in Article 5 of this Agreement, including all operating,
maintenance, tax, transmission losses and other expenses incurred
that would not have been incurred if the energy had not been
supplied), of supplying Short Term Energy called for during such
period.
4.22 For each kilowatt-hour purchased by the supplying Party's
system from a Third Party to supply the Short Term Energy called
for during such period, 100 percent of the amount of the Energy
charge paid therefor by IPL plus 1 mill per kilowatt-hour for
difficult to quantify energy-related costs plus any transmission
losses, taxes, and other expenses incurred that would not have
been incurred if such transactions had not been made.
4.3 Notwithstanding the rates stated in Subsection 4.1 and 4.2 above when
IPL is the supplying Party, the sum of the demand and energy charges for
each specific reservation made pursuant to Section 3 of this service
schedule shall not:
4.31 exceed the total of:
4.31.1 The product of the number of kilowatts reserved
for such reservation times the maximum Weekly or Daily
demand charge, whichever is applicable, specified above
in Subsection 4.11 and 4.12, as appropriate; and
4.31.2 The product of the number of kilowatt-hours
supplied for such reservation times 110% of the average
cost per kilowatt-hour of energy generated by IPL's
Petersburg Unit No. 4 for the last preceding month during
which it was run; or
4.32 be less than 100% of the total Out-of-Pocket Cost of
supplying the Short Term Energy for such reservation.
4.4 Notwithstanding the rates stated in Subsection 4.11 and 4.12 above
when IMPA is the supplying Party, the sum of the demand and energy charges
for each specific reservation made pursuant to Section 3 of this service
schedule shall not:
4.41 exceed the total of:
4.41.1 the product of the number of kilowatts reserved
for such reservation times the maximum Weekly or Daily
demand charge, whichever is applicable, specified above
in Subsection 4.11 and 4.12, as appropriate; and
4.41.2 the product of the number of kilowatts-hours
supplied for such reservation times 110% of the average
cost per kilowatt-hour of energy generated by IMPA's
Trimble County Unit #1 for the last preceding month
during which it was run; or
4.42 be less than 100% of the total Out-of-Pocket Cost of supplying
the Short Term Energy for such reservation.
4.5 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Petersburg Unit No. 4, is limited to
515 MW.
4.6 The aggregate instant total capacity of all IMPA sales under this and
other Service Schedules which are a part of this and other IMPA Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Trimble County Unit #1 is limited to
64 MW. For sales in excess of the capacity limitation of 64 MWs noted above,
the rate shall consist of an energy charge of up to 110% of the average cost
per kilowatt-hour of the energy generated and a demand charge of up to $2.16
per kilowatt per week, but in not event shall the total revenue (energy
charge and demand charge combined) be less than 100% of the Out-of-Pocket
Costs of supplying the short term energy for such reservation.
EXHIBIT IV
SERVICE SCHEDULE D
LIMITED TERM POWER
Under Interconnection Agreement dated August 19, 1994 between Indianapolis
Power & LIght Company and Indiana Municipal Power Agency (the "Agreement").
SECTION 1 - DEFINITIONS
1.1 The meaning of the terms used herein shall be the same as those used
in this Agreement.
SECTION 2 - DURATION
2.1 This Service Schedule shall become effective as of the Effective Date
of this Agreement and shall continue in effect until termination of this
Agreement.
SECTION 3 - SERVICES TO BE RENDERED
3.1 Either Party, by giving the other Party notice, may reserve for periods
of not less than one month (1), such electric power (herein called "Limited
Term Power") as the other Party may be willing to make available as Limited
Term Power. The Party asked to supply Limited Term Power shall be the sole
judge as to the amounts and periods that it has electric power available that
may be reserved by the other Party as Limited Term Power.
3.11 To reserve Limited Term Power the Party desiring such power
shall specify in its notice to the supplying Party the number of
kilowatts, the period of the reservation, the terms of such
reservation, and the source of such power if the supplying Party is
in turn reserving such power from another interconnected system
which is not a signatory to this Agreement ("Third Party"), shall
be determined by the Parties. Such reservation shall be confirmed
in writing at the request of either Party. The supplying Party
shall signify the extent of its ability and willingness to comply
with the provisions of such notice. Any notice or any
acknowledgment of such notice that initially may be given orally
shall be confirmed thereafter in writing. If during such period
the conditions arise that could not have been reasonably foreseen
at the time of the reservation and cause the reservation to be
electrically burdensome (reduced only prior to reductions in native
load, and prior firm commitments) to the electrical system of the
supplying Party, such Party may by oral notice to the reserving
Party, such oral notice to be later confirmed in writing if requested
by either Party and such confirmation shall be forwarded not later
than the third day following the day such oral notice is given,
excluding Saturdays, Sundays and holidays, reduce the number of
kilowatts reserved by such amount and for such time as it shall
specify in such notice, but kilowatts reserved hereunder that the
supplying Party is in turn reserving from a Third Party may be
reduced only to the extent they are reduced by such Third Party.
However, as soon as conditions allow resumption of delivery of
Limited Term Energy the supplying Party shall immediately make the
Limited Term Energy available to the receiving Party.
3.12 During each period that Limited Term Power has been reserved
as provided, the supplying Party shall delivery upon call electric
energy (herein called Limited Term Energy) to the other Party at the
Point or Points of Interconnection set forth in Article 5 of this
Agreement at a rate during each hour of up to and including the
number of kilowatts reserved.
3.13 The Limited Term Power billing demand for any period shall be
taken as equal to the number of kilowatts reserved as Limited Term
Power for such period.
SECTION 4 - COMPENSATION
4.1 DEMAND CHARGES
The Party reserving Monthly Limited Term Power shall pay the supplying
Party the following demand charges:
4.11 MONTHLY LIMITED TERM POWER
4.11.1 When IPL is the supplying Party, IMPA shall pay
IPL for Monthly Limited Term Power at the rate of up to
$18.00 per kilowatt reserved per month.
4.11.2 When IMPA is the supplying Party, IPL shall pay
IMPA for Monthly Limited Term Power at the rate of up to
$18.10 per kilowatt reserved per month.
4.11.3 In the event the amount of Monthly Limited Term
Power taken is reduced upon notice from the supplying
Party, the demand charge for each day during which any
such reduction is in effect shall be reduced by one-twentieth
(1/20) of the supplying Party's monthly demand rate (in
effect for this transaction) per kilowatt for each kilowatt
of reduction; however, the total of such reduction shall not
exceed the monthly demand charge (in effect for this
transaction) per kilowatt for that particular monthly
period.
4.12 THIRD PARTY LIMITED TERM POWER
4.12.1 For any month that Monthly Limited Term Power is
reserved by IMPA for and at the request of IPL from a
Third Party, such Monthly Limited Term Power shall be
supplied at a rate to be agreed upon by the Parties at the
time of the reservation of up to $1.20 per kilowatt
reserved per month said charges pertaining to the
reservation of transmission, plus the demand charge paid
therefor by IMPA to the Third Party. The total demand
charge revenues for the reservation of transmission in any
consecutive 30 day period shall not exceed the product of
the Monthly rate for the reservation of transmission and
the highest demand reserved on any day in the 30 day
period.
4.12.2 For any month that Monthly Limited Term Power is
reserved by IPL for and at the request of IMPA from a
Third Party, such Monthly Limited Term Power shall be
supplied at a rate to be agreed upon by the Parties at the
time of the reservation of up to $1.27 per kilowatt
reserved per month said charges pertaining to the
reservation of transmission, plus the demand charge paid
therefor by IPL to the Third Party. The total demand
charge revenues for the reservation of transmission in any
consecutive 30 day period shall not exceed the product of
the Monthly rate for the reservation of transmission and
the highest demand reserved on any day in the 30 day period.
4.12.3 In the event the amount of Monthly Limited Term
Power reserved from a Third Party is reduced upon the
request of the Third Party, the demand charge for each
day during which reduction is in effect shall be reduced
by the amount by which the demand charge payable by the
supplying Party is reduced under its agreement with such
Third Party. The transmission reservation charge shall
remain payable to the supplying Party at the option of
the supplying Party.
4.12.4 In the event the amount of Monthly Limited Term
Power reserved from a Third Party is reduced by the
supplying Party because of a transmission burden on its
system, the demand charge for each day during which such
reduction is in effect shall be reduced by the amount by
which the demand charge payable by the supplying Party is
reduced under its agreement with such Third Party plus in
the case of Power reserved by IMPA, one-thirtieth (1/30) of
the reservation of transmission rate agreed to under
Subsection 4.12.1 for each kilowatt of reduction each
day; but not more than the rate agreed upon for each
kilowatt per month; and, in the case of Power reserved by
IPL, one-thirtieth (1/30) of the reservation of transmission
rate per kilowatt agreed to under Subsection 4.12.2 for each
kilowatt of reduction each day; but not more than the rate
agreed upon for each kilowatt per month.
4.2 ENERGY CHARGES
The reserving Party shall pay the supplying Party for all Limited Term
Energy delivered pursuant to Subsection 3.12 above at the following rates:
4.21 For each kilowatthour that is generated by the supplying
Party's system, in an amount of up to 110 percent of the Out-of-
Pocket Costs (such cost being as of the delivery point or points,
as provided in Article 5 of this Agreement, including all
operating, maintenance, tax, transmission losses and other expenses
incurred that would not have been incurred if the energy had not
been supplied), of supplying Limited Term Energy called for during
such period.
4.22 For each kilowatt-hour purchased by the supplying Party's
system from a Third Party in order to supply the Limited Term
Energy called for during such period, 100 percent of the amount
paid therefor by the supplying Party plus 1 mill per kilowatt-hour
for difficult to quantify energy-related costs plus the cost of
any transmission losses, taxes, and other expenses incurred that
would not have been incurred if such transaction had not been made.
4.3 Notwithstanding the rates stated in Subsection 4.1 and 4.2 above when
IPL is the supplying Party, the sum of the demand and energy charges for
each specific reservation made pursuant to Subsection 3 of this service
schedule shall not:
4.31 exceed the total of:
4.31.1 The product of the number of kilowatts reserved for
such reservation times the maximum Monthly demand charge
specified above in Subsection 4.11 and 4.12, as appropriate;
and
4.31.2 The product of the number of kilowatt-hours supplied
for such reservation times 110% of the average cost per
kilowatt-hour of energy generated by IPL's Petersburg Unit
No. 4 for the last preceding month during which it was run;
or
4.32 be less than 100% of the total Out-of-Pocket Cost of supplying
the Limited Term Energy for such reservation.
4.4 Notwithstanding the rates stated in Subsection 4.1 and 4.2 above when
IMPA is the supplying Party, the sum of the demand and energy charges for
each specific reservation made pursuant to Section 3 of this service
schedule shall not:
4.41 exceed the total of:
4.41.1 The product of the number of kilowatts reserved
for such reservation times the maximum Monthly demand
charge specified above in Subsection 4.11 and 4.12, as
appropriate; and
4.41.2 The product of the number of kilowatt-hours
supplied for such reservation times 110% of the average
cost per kilowatt-hour of energy generated by IMPA
Trimble County Unit #1 for the last preceding month
during which it was run; or
4.42 be less than 100% of the total Out-of-Pocket Cost of
supplying the Limited Term Energy for such reservation.
4.5 The aggregate instant total capacity of all IPL sales under this and
other Service Schedules which are a part of this and other IPL Agreements,
for which the rates charged have been supported on the basis that total
revenues will not exceed the costs of Petersburg Unit No. 4, is limtied to
515 MW.
4.6 The aggregate instant total capacity of all IMPA sales under this and
other Service Schedules which are a part of this and other IMPA Agreements,
for which the rates charged have been supported are based on Trimble County
Unit #1 is limited to 64 MWs on an hourly basis. For sales in excess of the
capacity limitation of 64 MWs noted above, the rate shall consist of an
energy charge of up to 110% of the average cost per kilowatt-hour of the
energy generated and a demand charge of up to $11.22 per kilowatt per month,
but in no event shall the total revenue (energy charge and demand charge
combined) be less than 100% of the Out-of-Pocket Costs of supplying the
short term energy for such reservation.
MODIFICATION NO. 1
TO THE
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
INDIANA MUNICIPAL POWER AGENCY
THIS AMENDMENT made and entered into as of the 1st day of January, 1995 by
Indianapolis Power & Light Company ("IPL"), being an Amendment to the
Interconnection Agreement between Indiana Municipal Power Agency ("Buyer")
and IPL dated August 19, 1994 (the "Agreement").
WITNESSETH:
WHEREAS, IPL and Indiana Municipal Power Agency entered into the Agreement
on August 19, 1994;
WHEREAS, the Agreement provides for the sale of power and energy by IPL under
Service Schedules described as:
Service Schedule A Emergency Service
Service Schedule B Interchange Energy
Service Schedule C Short Term Power
Service Schedule D Limited Term Power
WHEREAS, the Agreement provides for the recovery of incremental costs or
"out-of-pocket" costs occasioned by the sale by IPL of electric energy;
WHEREAS, IPL has implemented its Emissions Constrained Dispatch Plan,
attached hereto;
WHEREAS, the rates for Emergency Service, Interchange Energy, Short Term
Power and Energy, and Limited Term Power, do not expressly include the
cost of replacing sulfur dioxide ("SO2") emission allowances expended in
order to provide such energy in compliance with Federal laws governing
SO2 emission;
WHEREAS, IPL desires to amend the Agreement to clarify recovery of out-of-
pocket costs occasioned by the sale of said energy as including the
recovery of the incremental cost of SO2 emission allowances;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions set forth herein; IPL desires to amend the Agreement as follows:
Section 1. Compensation for SO2 Emission Allowances
The Buyer shall compensate IPL for the consumption of Sulfur Dioxide
Emission Allowances ("SO2 Allowances") directly attributed to electric
energy sales by IPL to Buyer under the Service Schedules. Such
compensation shall, at Buyer's option, be made by either supplying IPL
with the number of SO2 Allowances directly attributed to such energy
sales, or by reimbursing IPL for the incremental cost of such number of
SO2 Allowances, rounded to the nearest whole SO2 Allowance.
If Buyer opts to reimburse IPL in cash for SO2 Allowances associated with
Buyer's energy purchases for the month, the cash amount due at billing will
be determined by multiplying the number of SO2 Allowances attributed to the
sale by the incremental cost of the SO2 Allowances, as determined in Section
2.2, at the time of the sale.
If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will record or
transfer to IPL's account, the number of SO2 Allowances calculated below,
at the time cash settlement for the energy is due. In all cases, Buyer
will transfer to IPL's account the number of SO2 Allowances due IPL for
calendar year no later than January 15 of the following year. "Transfer
to IPL's account" shall mean, for purposes of the Amendment, the transfer
by the USEPA of the requisite number of SO2 Allowances to IPL's Allowance
Tracking System account and the receipt by IPL of the Allowance Transfer
Confirmation.
Section 2. Determination of SO2 Emission Allowances Due IPL
Section 2.1. Number of SO2 Allowances
The number of SO2 Allowances directly attributed to an energy sale
made by IPL shall be determined for each hour, by determining the
contribution from each of the unit(s) from which the energy sale is
being made for that hour. For each unit, the emission rate in
pounds in SO2 per million Btu will be determined each month, from
fuel sulfur content, control equipment performance, and continuous
emissions monitoring data. The emission rate and the unit heat
rate will be used to determine the SO2 Allowances used per
megawatt-hour ("MWH"). The energy from each unit attributable to
the sale, and the SO2 Allowances per MWH for each unit, will be
used to determine the number of SO2 Allowances attributable to the
sale.
Section 2.2. Cost of SO2 Allowances
The incremental SO2 Allowance cost used to determine economic
dispatch of IPL's generating units in any month, will also be
the basis used to determine compensation for IPL's energy sales.
The incremental SO2 Allowances cost, in dollars per ton of SO2,
shall be determined each month and will be based on the Cantor
Fitzgerald offer price for SO2 Allowances, or if such is not
available, then another nationally recognized SO2 Allowance trading
market price or market price index, at the beginning of the month.
The SO2 Allowance value may be changed at any time during the
month to reflect the more current incremental cost, or market
price, for SO2 Allowances. Buyer will be notified of the new
SO2 Allowance value prior to dispatch of IPL energy to Buyer.
Section 3. Effective Date.
This Amendment to the Agreement shall be made effective as of January 1,
1995.
IN WITNESS WHEREOF, IPL has caused the foregoing Amendment to be signed by
its duly authorized officer, effective as of the date set forth above.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ John C. Berlier, Jr.
John C. Berlier,Jr.
Vice President
Resource Planning and Rates
EMISSIONS CONSTRAINED DISPATCH PLAN
Effective January 1, 1995
Economic Dispatch is loading each generating unit so the lowest cost
generation is called upon first to generate the power needed, thereby
minimizing total electric energy generation cost. Emissions Constrained
Dispatch is simply Economic Dispatch where the estimated value of the
SO2 allowances being consumed by a unit is included as a part of the
unit's cost of generation. A lower emitting unit will reflect a
relatively lower emissions cost because it requires fewer sulfur dioxide
(SO2) allowances.
IPL's plan to implement Emissions Constrained Dispatch is to incorporate
SO2 allowance values into the existing Energy Management System (load
dispatching system), which economically dispatches IPL's generation. As
the generation required (load) increases, the available unit with the
lowest incremental cost is dispatched to meet the increase. As the
generation demanded decreases, the unit with the highest incremental cost
is dispatched to reduce its generation, thereby minimizing cost.1
Currently, the Energy Management System uses incremental heat rates, along
with fuel and variable operation costs to determine the incremental cost of
generation on each unit in service. Effective January 1, 1995, SO2
emissions related costs will be included in each unit's incremental cost
prior to the incremental costs being compared to make the unit dispatch.
The incremental SO2 value will be in units of dollars per million British
Thermal Units ($/MMBTU) and computed by the following guidelines:
IPL plans to use EPA (Environmental Protection Agency)
certifiable data for SO2 emission rates in conjunction with
the incremental value of emission allowances to form the
emissions dispatch cost in units of $/MMBTU. Each
generating unit affected by the Clean Air Act will have its
own specific SO2 emissions data input into the Energy
Management System at the beginning of each month. That data
will remain for the month unless projected coal deliveries
for the month have an SO2 value that will change the current
dispatch. The Fuel Supply Organization will notify the System
Operation Office of the projected coal delivery SO2 emission
rate in #SO2/MMBTU, so that a correct SO2 emission rate can
be input into the Energy Management System.
1 Optimization of unit loadings in the Energy Management System is
constrained by equipment physical limitations such as maximum rate of load
pickup or maximum load reduction rate on a unit as well as contrained by the
maximum and minimum capacility of the units.
IPL's Treasury Organization will not less often than the 10th day
of each month supply the IPL System Operation Office the incremental
value of an emission allowance in units of dollars per ton of SO2
based upon the Cantor Fitzgerald asking price for allowances, or
other nationally recognized allowance trading market price, for use
in IPL's emission constrained dispatch on a forward going basis.
Beginning January 1, 1995, the allowance price that will be used
for purposes of IPL's emissions constrained dispatch will be the
asking price for allowances obtained from Cantor Fitzgerald on
December 30, 1994. The Treasury Organization will track the
emission allowance market and if a significant change in
allowance prices occurs within a given month, the Treasury
Organization may provide an updated allowance price value to the
IPL System Operation Office. The updated allowance price will
be entered into the Energy Management System and the economic
dispatch algorithm will be updated accordingly.
The emissions cost will be added with the fuel and variable operating cost
to produce a total dispatch cost. The total dispatch cost will be combined
with the incremental unit heat rate data to produce the total incremental
dispatch cost as calculated by the following formula:
INCREMENTAL COST = (Fuel Cost + Emissions Value Divided By
Variable Operating Cost) X Incremental
Heat Rate
The dimensions for each of the variables is as follows:
Emissions Value, $/MMBTU; Fuel Cost, $/MMBTU; Variable Operating
Cost $/MMBTU; Incremental Heat Rate, MMBTU/MWH; Allowance Value,
$/Allownace; Incremental Cost, $/MWH
The dispatch made using the total incremental cost, including SO2 emissions
related costs, will constitute IPL's Emissions Constrained Dispatch.
EXHIBIT 10.18
DIRECTORS AND OFFICERS LIABILITY
INSURANCE POLICY
THIS IS A "CLAIMS-FIRST-MADE"
INSURANCE POLICY. PLEASE READ IT CAREFULLY.
Words and phrases which appear in all capital letters have the special
meanings set forth in
Section II - Definitions
AEGIS
ASSOCIATED ELECTRIC & GAS
INSURANCE SERVICES LIMITED
HAMILTON, BERMUDA
DECLARATIONS
POLICY NO. D0392B1A95
DECLARATIONS NO. 1
Item 1: This POLICY provides indemnification with respect to the
DIRECTORS and OFFICERS of:
IPALCO Enterprises, Inc.
25 Monument Circle
Indianapolis, IN 46204
Item 2: POLICY PERIOD: from the 1st day of June, 1995, to the 1st
day of June, 1996 both days at 12:01 A.M. Standard Time at
the address of the COMPANY.
Item 3: RETROACTIVE DATE: the 4th day of December, 1970 at 12:01
A.M. Standard Time at the address of the COMPANY.
Item 4: A. POLICY PREMIUM: $215,226.
B. MINIMUM PREMIUM: $ 86,090.
Item 5: Limits of Liability:
A. $ 35,000,000 Each WRONGFUL ACT
B. $ 35,000,000 Aggregate Limit of Liability for the POLICY
PERIOD
Item 6: UNDERLYING LIMITS:
This POLICY is written as primary insurance
A. If this POLICY is written as Primary Insurance with
respect to Insuring Agreement I(A)(2) only:
(1) $ 200,000 Each WRONGFUL ACT not arising from
NUCLEAR OPERATIONS
(2) $ 200,000 Each WRONGFUL ACT arising from
NUCLEAR OPERATIONS
B. If this POLICY is written as EXCESS Insurance:
(1) (a) $ ________ Each WRONGFUL ACT
(b) $ ________ In the Aggregate for all
WRONGFUL ACTS
(2) $ ________ Each WRONGFUL ACT not covered
under Underlying Insurance
(3) In the Event of Exhaustion of the UNDERLYING
LIMIT stated in Item 6(B)(1)(b) above with
respect to Insuring Agreement I(A)(2) only:
(a) $ ________ Each WRONGFUL ACT not arising
from NUCLEAR OPERATIONS
DECLARATIONS continued
POLICY NO. D0392B1A95
DECLARATIONS NO. 1
(b) $ ________ Each WRONGFUL ACT arising from
NUCLEAR OPERATIONS
Item 7: Any notice to be provided or any payment to be made hereunder
to the COMPANY shall be made to:
NAME Mr. Bruce H. Smith
TITLE Administrator, Risk Management
ADDRESS Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595 (Zip 46206-1595)
Indianapolis, IN 46204
Item 8: Any notice to be provided or any payment to be made hereunder
to the INSURER shall be made to:
NAME Aegis Insurance Services, Inc.
ADDRESS Harborside Financial Center
700 Plaza Two
Jersey City, New Jersey 07311-3994
ENDORSEMENTS ATTACHED AT POLICY ISSUANCE: 1-2
Countersigned at Jersey City, New Jersey
On May 30, 1995
Aegis Insurance Services, Inc.
By /s/ Karen Larson
Authorized Representative
<PAGE>
POLICY OF DIRECTORS AND OFFICERS LIABILITY INSURANCE EFFECTED
WITH ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
HAMILTON, BERMUDA
(hereinafter referred to the "POLICY")
THIS IS A "CLAIMS-FIRST-MADE" INSURANCE POLICY.
PLEASE READ IT CAREFULLY.
Words and phrases which appear in all capital letters
have the special meanings set forth in
Section II - Definitions.
In consideration of the payment of premium, and in reliance upon all
statements made and information furnished to Associated Electric & Gas
Insurance Services Limited (hereinafter referred to as the "INSURER") by
the Application attached hereto which is hereby made a part hereof, and
subject to all the terms hereinafter provided, the INSURER agrees as
follows:
I. INSURING AGREEMENT
(A) Indemnity
(1) The INSURER shall pay on behalf of the DIRECTORS and
OFFICERS any and all sums which they shall become
legally obligated to pay as ULTIMATE NET LOSS for which
the COMPANY has not provided reimbursement, by reason
of any WRONGFUL ACT which takes place during the
COVERAGE PERIOD and is actually or allegedly caused,
committed or attempted by the DIRECTORS or OFFICERS
while acting in their respective capacities as
DIRECTORS or OFFICERS, provided such ULTIMATE NET LOSS
arises from a CLAIM first made against the DIRECTORS or
OFFICERS during the POLICY PERIOD or during the
DISCOVERY PERIOD, if purchased.
(2) The INSURER shall indemnify the COMPANY for any and all
sums required to reimburse it for ULTIMATE NET LOSS it
has occurred, as required or permitted by applicable
common or statutory law or under provisions of the
COMPANY'S Charter or Bylaws effected pursuant to such
law, to indemnify DIRECTORS or OFFICERS for ULTIMATE
NET LOSS which they are legally obligated to pay by
reason of any WRONGFUL ACT which takes place during the
COVERAGE PERIOD and is actually or allegedly caused,
committed or attempted by such DIRECTORS or OFFICERS
while acting in their respective capacities as
DIRECTORS or OFFICERS, provided the ULTIMATE NET LOSS
arises from a CLAIM first made against the DIRECTORS or
OFFICERS during the POLICY PERIOD or during the
DISCOVERY PERIOD, if purchased.
(B) Limits of Liability
(1) The INSURER shall only be liable hereunder for the
amount of ULTIMATE NET LOSS in excess of the UNDERLYING
LIMITS as stated in Item 6 of the Declarations as a
result of each WRONGFUL ACT covered under Insuring
Agreement I(A)(1) or I(A)(2) or both, and then only up
to the Limit of Liability stated in Item 5A of the
Declarations and further subject to the aggregate Limit
of Liability stated in Item 5B of the Declarations as
the maximum amount payable hereunder in the aggregate
for all CLAIMS first made against the DIRECTORS or
OFFICERS during both:
<PAGE>
(a) the POLICY PERIOD and
(b) the DISCOVERY PERIOD, if purchased.
Notwithstanding the foregoing, in the event that the
INSURER cancels or refuses to renew this POLICY, and a
DISCOVERY PERIOD extension is purchased by the COMPANY,
then the aggregate Limit of Liability stated in Item 5B
of the Declarations shall be reinstated but only with
respect to CLAIMS first made against the DIRECTORS or
OFFICERS during such DISCOVERY PERIOD.
(2) Multiple CLAIMS arising out of the same WRONGFUL ACT,
even if made against different DIRECTORS or OFFICERS,
shall be deemed to be a single CLAIM arising from a
single WRONGFUL ACT and to have been reported during
the POLICY PERIOD or, if purchased, during the
DISCOVERY PERIOD in which the first of such multiple
CLAIMS is made against any of the DIRECTORS or
OFFICERS. The Limits of Liability and UNDERLYING
LIMITS, stated in Items 5 and 6 of the Declarations
respectively, shall apply only once regardless of the
number of CLAIMS arising out of the same WRONGFUL ACT.
All interrelated acts shall be deemed to be a single
WRONGFUL ACT.
(3) The inclusion herein of more than one DIRECTOR or
OFFICER, or the application of both Insuring Agreements
I(A)(1) and I(A)(2), shall not operate to increase the
INSURER'S Limits of Liability as stated in Item 5 of
the Declarations.
(4) With respect to ULTIMATE NET LOSS arising out of any
WRONGFUL ACT in connection with service for a NOT-FOR-
PROFIT ORGANIZATION as provided in Section II(E)(2),
if:
(a) such WRONGFUL ACT results in liability being
imposed upon one or more DIRECTORS and OFFICERS
under this POLICY and also upon directors and
officers and general partners under any other
directors and officers or general partner
liability insurance policies issued by the
INSURER to any organization; and
(b) the total of the ULTIMATE NET LOSS under this
POLICY and the ultimate net loss under such other
policies issued by the INSURER equals or exceeds
$35,000,000;
the maximum amount payable by the INSURER under this
POLICY in the aggregate for all ULTIMATE NET LOSS
resulting from such WRONGFUL ACT shall be the lesser of
the applicable Limit of Liability provided by this
POLICY or the product of:
(i) the applicable Limit of Liability provided
by this POLICY divided by the total limits
of liability per wrongful act applicable to
such wrongful act under all policies issued
by the INSURER; and
(ii) $35,000,000.
If the amount paid under this POLICY with respect to
such WRONGFUL ACT exceeds the COMPANY'S proportionate
share of the $35,000,000 as determined above, the
COMPANY shall refund such excess to the INSURER
promptly.
(C) UNDERLYING LIMITS
(1) If this POLICY is written as Primary Insurance with
respect to Insuring Agreement I(A)(2), the UNDERLYING
LIMIT for the COMPANY for each WRONGFUL ACT shall be as
stated in Item 6A(1) of the Declarations, unless it is
based upon, arises out of or is attributable to NUCLEAR
OPERATIONS, in which event it shall be as stated in
Item 6A(2) of the Declarations;
(2) If this POLICY is written as Excess Insurance:
(a) with respect to Insuring Agreements I(A)(1) and
I(A)(2), the UNDERLYING LIMIT for each WRONGFUL
ACT shall be as stated in Item 6B(1)(a) of the
Declarations and the maximum UNDERLYING LIMIT for
all WRONGFUL ACTS shall be as stated in Item
6B(1)(b) of the Declarations;
(b) with respect to ULTIMATE NET LOSS covered
hereunder:
(i) in the event of reduction of the underlying
aggregate limit as stated in Item 6B(1)(b),
the UNDERLYING LIMIT shall be such reduced
underlying aggregate limit; or
(ii) in the event of exhaustion of the
underlying aggregate limit as stated in
Item 6B(1)(b), the UNDERLYING LIMIT shall
be as stated in Item 6B(3) of the
Declarations;
(c) with respect to any WRONGFUL ACT covered
hereunder but not covered under such Underlying
Insurance, the UNDERLYING LIMIT shall be as
stated in Item 6B(2) of the Declarations; and
(d) nothing herein shall make this POLICY subject to
the terms and conditions of any Underlying
Insurance.
(3) Only payment of indemnity or defense expenses which,
except for the amount thereof, would have been
indemnifiable under this POLICY, may reduce or exhaust
an UNDERLYING LIMIT.
(4) In the event that both Insuring Agreement I(A)(1) and
I(A)(2) are applicable to INDEMNITY and DEFENSE COST
resulting from a WRONGFUL ACT then:
(a) if this POLICY is written as Primary Insurance,
the UNDERLYING LIMIT applicable to such WRONGFUL
ACT shall be the UNDERLYING LIMIT stated in Item
6A of the Declarations; and
(b) if this POLICY is written as Excess Insurance and
the UNDERLYING LIMIT has been exhausted, the
UNDERLYING LIMIT applicable to such WRONGFUL ACT
shall be the UNDERLYING LIMIT stated in Item
6B(3);
and there shall be no UNDERLYING LIMIT applicable with
respect to coverage provided under Insuring Agreement
I(A)(1).
(5) The UNDERLYING LIMITS stated in Item 6 of the
Declarations applicable to Insuring Agreement I(A)(2)
shall apply to all INDEMNITY and/or DEFENSE COST for
which indemnification of the DIRECTORS and/or OFFICERS
by the COMPANY is legally permissible, whether or not
such indemnification is granted by the COMPANY.
II. DEFINITIONS
A. CLAIM: The term "CLAIM" shall mean:
(1) any demand, suit or proceeding against any DIRECTORS
and/or OFFICERS during the POLICY PERIOD or during the
DISCOVERY PERIOD, if purchased, which seeks actual
monetary damages or other relief and which may result
in any DIRECTORS and/or OFFICERS becoming legally
obligated to pay ULTIMATE NET LOSS by reason of any
WRONGFUL ACT actually or allegedly caused, committed or
attempted during the COVERAGE PERIOD by the DIRECTORS
and/or OFFICERS while acting in their capacity as such;
or
(2) written notice to the INSURER during the POLICY PERIOD
or during the DISCOVERY PERIOD, if purchased, by the
DIRECTORS, OFFICERS and/or the COMPANY, describing with
the specificity set forth in Condition (C) hereof,
circumstances of which they are aware involving an
identifiable WRONGFUL ACT actually or allegedly caused,
committed or attempted during the COVERAGE PERIOD by
the DIRECTORS and/or OFFICERS while acting in their
capacity as such, which circumstances are likely to
give rise to a demand, suit or proceeding being made
against such DIRECTORS and/or OFFICERS.
A CLAIM shall be deemed to be first made against a
DIRECTOR or OFFICER at the earlier of the time at which
a demand, suit or proceeding is first made against the
DIRECTOR or OFFICER, as set forth in section (1) of
this Definition or the time at which written notice is
given to the INSURER, as set forth in section (2) of
this Definition.
Multiple demands or suits arising out of the same
WRONGFUL ACT or interrelated acts shall be deemed to be
a single "CLAIM".
(B) COMPANY: The term "COMPANY" shall mean the organization(s)
named in Item 1 of the Declarations and, subject to Condition
(A) hereof, any SUBSIDIARIES of such organization(s).
(C) COVERAGE PERIOD: The term "COVERAGE PERIOD" shall mean the
period of time from the RETROACTIVE DATE to the termination
of the POLICY PERIOD.
(D) DEFENSE COST: The term "DEFENSE COST" shall mean all
expenses incurred by or on behalf of the DIRECTORS, OFFICERS
or, where reimbursable under I(A)(2), the COMPANY in the
investigation, negotiation, settlement and defense of any
CLAIM except all salaries, wages and benefit expenses of
DIRECTORS, OFFICERS, or the COMPANY.
(E) DIRECTOR and OFFICER: The terms "DIRECTOR" and "OFFICER" as
used herein, either in the singular or plural, shall mean:
<PAGE>
(1) any person who was, is now, or shall be a director,
officer or trustee of the COMPANY and any other
employee of the COMPANY who may be acting in the
capacity of a director, officer or trustee of the
COMPANY with the express authorization of a director,
officer or trustee of the COMPANY;
(2) any director, officer or trustee of the COMPANY who is
serving or has served at the specific request of the
COMPANY as a director, officer or trustee of any
outside NOT-FOR-PROFIT ORGANIZATION; or
(3) the estates, heirs, legal representatives or assigns of
deceased persons who were directors, officers or
trustees of the COMPANY at the time the WRONGFUL ACTS
upon which such CLAIMS were based were committed, and
the legal representatives or assigns of directors,
officers or trustees of the COMPANY in the event of
their incompetency, insolvency or bankruptcy;
provided, however, that the terms "DIRECTOR" and "OFFICER"
shall not include a trustee appointed pursuant to Title 11,
United States Code, or pursuant to the Securities Investor
Protection Act, a receiver appointed for the benefit of
creditors by Federal or State courts, an assignee for the
benefit of creditors or similar fiduciary appointed under
Federal or State laws for the protection of creditors or the
relief of debtors.
In the event that a CLAIM which is within the coverage
afforded under this POLICY is made against any DIRECTOR or
OFFICER and such CLAIM includes a claim against the lawful
spouse of such DIRECTOR or OFFICER solely by reason of (a)
such spousal status or (b) such spouse's ownership interest
in property or assets which are sought as recovery for
WRONGFUL ACTS of a DIRECTOR or OFFICER, such spouse shall be
deemed to be a DIRECTOR or OFFICER hereunder, but solely with
respect to such claim. In no event, however, shall the
lawful spouse of a DIRECTOR or OFFICER be deemed to be a
DIRECTOR or OFFICER as regards any CLAIM in respect of which
there is a breach of duty, neglect, error, misstatement,
misleading statement or omission actually or allegedly
caused, committed or attempted by or claimed against such
spouse, acting individually or in his or her capacity as the
spouse of a DIRECTOR or OFFICER.
(F) DISCOVERY PERIOD: The term "DISCOVERY PERIOD" shall mean the
period of time set forth in Condition (L).
(G) INDEMNITY: The term "INDEMNITY" shall mean all sums which
the DIRECTORS, OFFICERS, where reimbursable under I(A)(2),
the COMPANY shall become legally obligated to pay as damages
either by adjudication or compromise with the consent of the
INSURER, after making proper deduction for the UNDERLYING
LIMITS and all recoveries, salvages and other valid and
collectible insurance.
(H) INSURER: The term "INSURER" shall mean Associated Electric &
Gas Insurance Services Limited, Hamilton, Bermuda, a non-
assessable mutual insurance company.
(I) NOT-FOR-PROFIT ORGANIZATION: The term "NOT-FOR-PROFIT
ORGANIZATION" shall mean:
(1) an organization, no part of the income or assets of
which is distributable to its owners, stockholders or
members and which is formed and operated for a purpose
other than the pecuniary profit or financial gain of
its owners, stockholders or members; or
(2) a political action committee which is defined for these
purposes as a separate segregated fund to be utilized
for political purposes as described in the United
States Federal Election Campaign Act (2 U.S.C.
441b(2)(C)).
(J) NUCLEAR OPERATIONS: The term "NUCLEAR OPERATIONS" shall mean
the design, engineering, financing, construction, operation,
maintenance, use, ownership, conversion or decommissioning of
any "nuclear facility".
(K) POLICY: The term "POLICY" shall mean this insurance policy,
including the Application, the Declarations and any
endorsements issued by the INSURER to the organization first
named in Item 1 of the Declarations for the POLICY PERIOD
listed in Item 2 of the Declarations.
(L) POLICY PERIOD: The term "POLICY PERIOD" shall mean the
period of time stated in Item 2 of the Declarations.
(M) RETROACTIVE DATE: The term "RETROACTIVE DATE" shall mean the
date stated in Item 3 of the Declarations; provided, however,
with respect to any WRONGFUL ACT actually or allegedly
caused, committed or attempted by the DIRECTORS or OFFICERS
of any SUBSIDIARY formed or acquired by the COMPANY or any of
its SUBSIDIARIES after inception of the POLICY PERIOD of this
POLICY, or after inception of any other policy issued by the
INSURER to the COMPANY for a prior policy period, the term
"RETROACTIVE DATE" shall mean the date of such formation or
acquisition.
(N) SUBSIDIARIES: The term "SUBSIDIARY" shall mean any entity
more than fifty (50) percent of whose outstanding securities
representing the present right to vote for election of
directors are owned by the COMPANY and/or one or more of its
"SUBSIDIARIES".
(O) ULTIMATE NET LOSS: The term "ULTIMATE NET LOSS" shall mean
the total INDEMNITY and DEFENSE COST with respect to each
WRONGFUL ACT to which this POLICY applies.
(P) UNDERLYING LIMITS: The term "UNDERLYING LIMITS" shall mean
the amounts stated in Item 6 of the Declarations.
(Q) WRONGFUL ACT: The term "WRONGFUL ACT" shall mean any actual
or alleged breach of duty, neglect, error, misstatement,
misleading statement or omission actually or allegedly
caused, committed or attempted by any DIRECTOR or OFFICER
while acting individually or collectively in their capacity
as such, or claimed against them solely by reason of their
being DIRECTORS or OFFICERS.
All such interrelated breaches of duty, neglects, errors,
misstatements, misleading statements or omissions actually or
allegedly caused, committed or attempted by or claimed
against one or more of the DIRECTORS or OFFICERS shall be
deemed to be a single "WRONGFUL ACT".
III. EXCLUSIONS
The INSURER shall not be liable to make any payment for ULTIMATE
NET LOSS arising from any CLAIM(S) made against any DIRECTOR or
OFFICER:
(A) (1) for any fines or penalties imposed in a criminal suit,
action or proceeding;
(2) for any fines or penalties imposed in conjunction with
political contributions, payments, commissions or
gratuities; or
(3) for any other fines or penalties imposed by final
adjudication of a court of competent jurisdiction or
any agency or commission possessing quasi-judicial
authority; or
(4) where, at inception of the POLICY PERIOD, such DIRECTOR
or OFFICER had knowledge of a fact or circumstance
which was likely to give rise to such CLAIM(S) and
which such DIRECTOR or OFFICER failed to disclose or
misrepresented in the Application or in the process of
preparation of the Application, other than in a Renewal
Application; provided, however, that this exclusion
shall not apply to such CLAIM(S) made against any
DIRECTOR or OFFICER other than such DIRECTOR or OFFICER
who failed to disclose or misrepresented such fact or
circumstance; provided further that this exclusion
shall not limit the INSURER'S right to exercise any
remedy available to it with respect to such failure to
disclose or misrepresentation other than the remedy
provided for in this Exclusion.
(B) with respect to Insuring Agreement I(A)(1) only:
(1) based upon, arising out of or attributable to such
DIRECTOR or OFFICER having gained any personal profit,
advantage or remuneration to which such DIRECTOR or
OFFICER was not legally entitled if:
(a) a judgment or other final adjudication adverse to
such DIRECTOR or OFFICER establishes that he in
fact gained such personal profit, advantage or
remuneration; or
(b) such DIRECTOR or OFFICER has entered into a
settlement agreement to repay such personal
profit, advantage or remuneration to the COMPANY;
(2) for an accounting of profits made from the purchase or
sale by such DIRECTOR or OFFICER of securities of the
COMPANY within the meaning of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any other federal or state
statutory or common law;
(3) brought about or contributed to by the dishonest,
fraudulent, criminal or malicious act or omission of
such DIRECTOR or OFFICER if a final adjudication
establishes that acts of active and deliberate
dishonesty were committed or attempted with actual
dishonest purpose and intent and were material to the
cause of action so adjudicated; or
(4) where such payment would be contrary to applicable law.
(C) for bodily injury, mental anguish, mental illness, emotional
upset, sickness or disease sustained by any person, death of
any person or for physical injury to or destruction of
tangible property or the loss of use thereof.
(D) for injury based upon, arising out of or attributable to:
(1) false arrest, wrongful detention or wrongful
imprisonment or malicious prosecution;
(2) wrongful entry, wrongful eviction or other invasion of
the right of private occupancy;
(3) discrimination or sexual harassment;
(4) publication or utterance:
(a) of a libel or slander or other defamatory or
disparaging material; and
(b) in violation of an individual's right of privacy;
or
(5) with respect to the COMPANY'S advertising activities:
piracy, plagiarism, unfair competition, idea
misappropriation under implied contract, or
infringement of copyright, title, slogan, registered
trademark, service mark, or trade name.
(E) based upon, arising out of or attributable to the violation
of any responsibility, obligation or duty imposed upon
fiduciaries by the Employee Retirement Income Security Act of
1974 or amendments thereto or by similar common or statutory
law of the United States of America or any state or other
jurisdiction therein.
(F) based upon, arising out of or attributable to:
(1) the rendering of advice with respect to;
(2) the interpreting of; or
(3) the handling of records in connection with the
enrollment, termination or cancellation of employees
under the COMPANY'S group life insurance, group
accident or health insurance, pension plans, employee
stock subscription plans, workers' compensation,
unemployment insurance, social security, disability
benefits and any other employee benefit programs.
(G) based upon, arising out of or attributable to any failure or
omission on the part of the DIRECTORS, OFFICERS and/or the
COMPANY to effect and maintain insurance(s) of the type and
amount which is customary with companies in the same or
similar business.
(H) (1) arising from any circumstances, written notice of which
has been given under any policy or any DISCOVERY PERIOD
thereof, which policy expired prior to or upon the
inception of this POLICY; or
(2) which is one of the number of CLAIMS arising out of the
same WRONGFUL ACT, if any CLAIM of such multiple CLAIMS
was made against the DIRECTORS or OFFICERS during any
policy or any DISCOVERY PERIOD thereof, which policy
expired prior to or upon the inception of this POLICY.
(I) if any other policy or policies also afford(s) coverage in
whole or in part for such CLAIM(S); except, this exclusion
shall not apply:
(1) to the amount of ULTIMATE NET LOSS with respect to such
CLAIM(S) which is in excess of the limit of liability
of such other policy or policies and any applicable
deductible or retention thereunder; or
(2) with respect to coverage afforded such CLAIM(S) by any
other policy or policies purchased or issued
specifically as insurance underlying or in excess of
the coverage afforded under this POLICY;
provided always that nothing herein shall be construed to
cause this POLICY to contribute with any other policy or
policies or to make this POLICY subject to any of the terms
of any other policy or policies.
(J) for any WRONGFUL ACT which took place in whole or in part
prior to the RETROACTIVE DATE.
(K) by, on behalf of, in the right of, at the request of, or for
the benefit of, any security holder of the COMPANY, any
DIRECTOR or OFFICER, or the COMPANY, unless such CLAIM is:
(1) made derivatively by any shareholder of the COMPANY for
the benefit of the COMPANY and such shareholder is:
(a) acting totally independent of, and totally
without the suggestion, solicitation, direction,
assistance, participation or intervention of, any
DIRECTOR or OFFICER, the COMPANY, or any
affiliate of the COMPANY; and
(b) not an affiliate of the COMPANY nor any entity
within the definition of the term "COMPANY"; or
(2) made non-derivatively by a security holder who is not:
(a) a DIRECTOR or OFFICER; or
(b) an affiliate of the COMPANY or any entity within
the definition of the term "COMPANY"; or
(3) made non-derivatively by an OFFICER acting totally
independent of, and totally without the suggestion,
solicitation, direction, assistance, participation or
intervention of, any other DIRECTOR or OFFICER, the
COMPANY, or any affiliate of the COMPANY and (subject
to all the other exclusions and POLICY provisions)
arising from the wrongful termination of that OFFICER.
(L) where such CLAIM(S) arise out of such DIRECTOR'S or
OFFICER'S activities as a director, officer or trustee of any
entity other than:
(1) the COMPANY; or
(2) any outside NOT-FOR-PROFIT ORGANIZATION as provided in
Section II(E)(2).
IV. CONDITIONS
(A) Acquisition, Merger and Dissolution
(1) (a) If, after inception of the POLICY PERIOD,
(i) the COMPANY or any of its SUBSIDIARIES
forms or acquires any SUBSIDIARY or
acquires any entity by merger into or
consolidation with the COMPANY or any
SUBSIDIARY, and
(ii) the operations of such formed or acquired
entity are related to, arising from or
associated with the production,
transmission, delivery or furnishing of
electricity, gas, water, or sewer service
to the public or the conveyance of
telephone messages for the public; and
(iii) the total assets of such formed or acquired
entity are not greater than the lesser of
$50,000,000 or five (5) percent of the
COMPANY'S total assets,
coverage shall be provided for the DIRECTORS and
OFFICERS of such entity from the date of
formation, acquisition, merger or consolidation,
respectively, but only with respect to WRONGFUL
ACTS actually or allegedly caused, committed or
attempted during that part of the POLICY PERIOD
which is subsequent to the formation,
acquisition, merger or consolidation.
(b) In respect of any SUBSIDIARY formed or acquired
after the inception of the POLICY PERIOD and not
subject to paragraph (a) above, or of any entity
acquired by merger into or consolidation with the
COMPANY or any SUBSIDIARY shall after the
inception of the POLICY PERIOD and not subject to
paragraph (a) above, the COMPANY shall report
such formation or acquisition within ninety (90)
days thereafter and, if so reported, upon payment
of an additional premium and upon terms as may be
required by the INSURER, such coverage shall be
provided for the DIRECTORS and OFFICERS of such
newly formed or acquired SUBSIDIARY or merged or
consolidated entity, but only with respect to
WRONGFUL ACTS actually or allegedly caused,
committed, or attempted during that part of the
COVERAGE PERIOD which is subsequent to such
acquisition, merger or consolidation.
(2) If, prior to or after inception of the POLICY PERIOD,
the COMPANY or any of its SUBSIDIARIES is or has been
acquired by or merged into any other entity, or is or
has been dissolved, coverage under this POLICY shall
continue for the POLICY PERIOD but only for DIRECTORS
and OFFICERS of the COMPANY or its SUBSIDIARIES who
were serving as such prior to such acquisition, merger
or dissolution and only with respect to WRONGFUL ACTS
actually or allegedly caused, committed or attempted
during that part of the COVERAGE PERIOD which is prior
to such acquisition, merger or dissolution.
(B) Non-Duplication of Limits
To avoid the duplication of the INSURER'S Limits of Liability
stated in Item 5 of the Declarations, the DIRECTORS, OFFICERS
and COMPANY agree that:
(1) in the event the INSURER provides INDEMNITY or DEFENSE
COSTS for any WRONGFUL ACT under this POLICY, neither
the DIRECTORS, OFFICERS nor the COMPANY shall have any
right to additional INDEMNITY or DEFENSE COSTS for such
WRONGFUL ACT under any other policy issued by the
INSURER to the DIRECTORS, OFFICERS or COMPANY that
otherwise would apply to such WRONGFUL ACT; and
(2) in the event the INSURER provides INDEMNITY or DEFENSE
COSTS for any WRONGFUL ACT under any other policy
issued by the INSURER to the DIRECTORS, OFFICERS, or
COMPANY, neither the DIRECTORS, OFFICERS nor the
COMPANY shall have any right to additional INDEMNITY or
DEFENSE COSTS for such WRONGFUL ACT under this POLICY.
(C) Notice of Claim
As a condition precedent to any rights under this POLICY, the
DIRECTORS, OFFICERS and/or the COMPANY, shall give written
notice to the INSURER as soon as practicable of any CLAIM,
which notice shall include the nature of the WRONGFUL ACT,
the alleged injury, the names of the claimants, and the
manner in which the DIRECTOR, OFFICER or COMPANY first became
aware of the CLAIM, and shall cooperate with the INSURER and
give such additional information as the INSURER may
reasonably require.
The Application or any information contained therein for this
POLICY shall not constitute a notice of CLAIM.
(D) Cooperation and Settlements
In the event of any WRONGFUL ACT which may involve this
POLICY, the DIRECTORS, OFFICERS or COMPANY without prejudice
as to liability, may proceed immediately with settlements
which in their aggregate do not exceed the UNDERLYING LIMITS.
The COMPANY shall notify the INSURER of any such settlements
made.
The INSURER shall not be called upon to assume charge of the
investigation, settlement or defense of any demand, suit or
proceeding, but the INSURER shall have the right and shall be
given the opportunity to associate with the DIRECTORS,
OFFICERS and COMPANY or any underlying insurer, or both, in
the investigation, settlement, defense and control of any
demand, suit or proceeding relative to any WRONGFUL ACT where
the demand, suit or proceeding involves or may involve the
INSURER. At all times, the DIRECTORS, OFFICERS and COMPANY
and the INSURER shall cooperate in the investigation,
settlement and defense of such demand, suit or proceeding.
The DIRECTORS, OFFICERS and COMPANY and their underlying
insurer(s) shall, at all times, use diligence and prudence in
the investigation, settlement and defense of demands, suits
or other proceedings.
(E) Appeals
In the event that the DIRECTORS, OFFICERS, COMPANY or any
underlying insurer elects not to appeal a judgment in excess
of the UNDERLYING LIMITS, the INSURER may elect to conduct
such appeal at its own cost and expense and shall be liable
for any taxable court costs and interest incidental thereto,
but in no event shall the total liability of the INSURER,
exclusive of the cost and expense of appeal, exceed its
Limits of Liability stated in Item 5 of the Declarations.
(F) Subrogation
In the event of any payment under this POLICY, the INSURER
shall be subrogated to the extent of such payment to all
rights of recovery thereof, and the DIRECTORS, OFFICERS and
COMPANY shall execute all papers required and shall do
everything that may be necessary to enable the INSURER to
bring suit in the name of the DIRECTORS, OFFICERS or COMPANY.
(G) Bankruptcy or Insolvency
Bankruptcy or insolvency of the COMPANY shall not relieve the
INSURER of any of its obligations hereunder.
In the event of bankruptcy or insolvency of the COMPANY,
subject to all the terms of this POLICY, the INSURER shall
indemnify the DIRECTORS and OFFICERS under Insuring Agreement
I(A)(1) (in excess of the UNDERLYING LIMITS, if any,
applicable to Insuring Agreement I(A)(1) for ULTIMATE NET
LOSS they shall become legally obligated to pay which would
have been indemnified by the COMPANY and reimbursable by the
INSURER under Insuring Agreement I(A)(2) but for such
bankruptcy or insolvency; provided, however, that the INSURER
shall be subrogated, to the extent of any payment, to the
rights of the DIRECTORS and OFFICERS to receive
indemnification from the COMPANY but only up to the amount of
the UNDERLYING LIMITS applicable to Insuring Agreement
I(A)(2) less the amount of the UNDERLYING LIMITS, if any,
applicable to Insuring Agreement I(A)(1).
(H) Uncollectibility of Underlying Insurance
Notwithstanding any of the terms of this POLICY which might
be construed otherwise, if this POLICY is written as excess
over any Underlying Insurance, it shall drop down only in the
event of reduction or exhaustion of any aggregate limits
contained in such Underlying Insurance and shall not drop
down for any other reason including, but not limited to,
uncollectibility (in whole or in part) because of the
financial impairment or insolvency of an underlying insurer.
The risk of uncollectibility of such Underlying Insurance (in
whole or in part) whether because of financial impairment or
insolvency of an underlying insurer or for any other reason,
is expressly retained by the DIRECTORS, OFFICERS and the
COMPANY and is not in any way or under any circumstances
insured or assumed by the INSURER.
(I) Maintenance of UNDERLYING LIMITS
If this POLICY is written as Excess Insurance, it is a
condition of this POLICY that any UNDERLYING LIMITS stated in
Item 6 of the Declarations shall be maintained in full force
and effect, except for reduction or exhaustion of any
underlying aggregate limits of liability, during the currency
of this POLICY. Failure of the COMPANY to comply with the
foregoing shall not invalidate this POLICY but in the event
of such failure, without the agreement of the INSURER, the
INSURER shall only be liable to the same extent as it would
have been had the COMPANY complied with this Condition.
(J) Changes and Assignment
The terms of this POLICY shall not be waived or changed, nor
shall an assignment of interest be binding, except by an
endorsement to this POLICY issued by the INSURER.
(K) Outside NOT-FOR-PROFIT ORGANIZATION
If any DIRECTOR or OFFICER is serving or has served at the
specific request of the COMPANY as a DIRECTOR or OFFICER of
an outside NOT-FOR-PROFIT ORGANIZATION, the coverage afforded
by this POLICY:
(1) shall be specifically excess of any other indemnity or
insurance available to such DIRECTOR or OFFICER by
reason of such service; and
(2) shall not be construed to extend to the outside NOT-
FOR-PROFIT ORGANIZATION in which the DIRECTOR or
OFFICER is serving or has served, nor to any other
director, officer or employee of such outside NOT-FOR-
PROFIT ORGANIZATION.
(L) DISCOVERY PERIOD
(1) In the event of cancellation or nonrenewal of this
POLICY by the INSURER, the COMPANY shall have the
right, upon execution of a warranty that all known
CLAIMS and facts or circumstances likely to give rise
to a CLAIM have been reported to the INSURER and
payment of an additional premium to be determined by
the INSURER which shall not exceed two hundred (200)
percent of the Policy Premium stated in Item 4 of the
Declarations, to an extension of the coverage afforded
by this POLICY with respect to any CLAIM first made
against any DIRECTOR or OFFICER during the period of
twelve (12) months after the effective date of such
cancellation or nonrenewal, but only with respect to
any WRONGFUL ACT committed during the COVERAGE PERIOD.
This right of extension shall terminate unless written
notice of such election is received by the INSURER
within thirty (30) days after the effective date of
cancellation or nonrenewal.
The offer by the INSURER of renewal on terms,
conditions or premiums different from those in effect
during the POLICY PERIOD shall not constitute
cancellation or refusal to renew this POLICY.
(2) In the event of cancellation or nonrenewal of this
POLICY by the COMPANY, the COMPANY shall have the right
upon payment of an additional premium, which shall not
exceed one hundred (100) percent of the Policy Premium
stated in Item 4 of the Declarations, to an extension
of coverage afforded by this POLICY with respect to any
CLAIM first made against any DIRECTOR or OFFICER during
the period of twelve (12) months after the effective
date of such cancellation or nonrenewal, but only with
respect to any WRONGFUL ACT during the COVERAGE PERIOD.
This right of extension shall terminate unless written
notice of such election is received by the INSURER
within thirty (30) days after the effective date of
cancellation or nonrenewal.
(3) In the event of renewal on terms and conditions
different from those in effect during the POLICY
PERIOD, the COMPANY shall have the right, upon
execution of a warranty that all known CLAIMS and facts
or circumstances likely to give rise to a CLAIM have
been reported to the INSURER and payment of an
additional premium to be determined by the INSURER
which shall not exceed two hundred (200) percent of the
Policy Premium stated in Item 4 of the Declarations, to
an extension of the original terms and conditions with
respect to any CLAIM first made against any DIRECTOR or
OFFICER during the period of twelve (12) months after
the effective date of renewal, but only with respect to
any WRONGFUL ACT committed during the COVERAGE PERIOD
and not covered by the renewal terms and conditions.
This right of extension shall terminate unless written
notice of such election is received by the INSURER
within thirty (30) days after the effective date of
renewal.
(M) Cancellation
This POLICY may be cancelled:
(1) at any time by the COMPANY by mailing written notice to
the INSURER stating when thereafter cancellation shall
be effective; or
(2) at any time by the INSURER by mailing written notice to
the COMPANY stating when, not less than ninety (90)
days from the date such notice was mailed, cancellation
shall be effective, except in the event of cancellation
for nonpayment of premiums, such cancellation shall be
effective ten (10) days after the date notice thereof
is mailed.
The proof of mailing of notice to the address of the COMPANY
stated in Item 7 of the Declarations or the address of the
INSURER stated in Item 8 of the Declarations shall be
sufficient proof of notice and the insurance under this
POLICY shall end on the effective date and hour of
cancellation stated in the notice. Delivery of such notice
either by the COMPANY or by the INSURER shall be equivalent
to mailing.
With respect to all cancellations, the premium earned and
retained by the INSURER shall be the sum of (a) the Minimum
Premium stated in Item 4B of the Declarations plus (b) the
pro-rata proportion, for the period this POLICY has been in
force, of the difference between (i) the Policy Premium
stated in Item 4A of the Declarations and (ii) the Minimum
Premium stated in Item 4B of the Declarations.
The offer by the INSURER of renewal on terms, conditions or
premiums different from those in effect during the POLICY
PERIOD shall not constitute cancellation or refusal to renew
this POLICY.
(N) Currency
All amounts stated herein are expressed in United States
Dollars and all amounts payable hereunder are payable in
United States Dollars.
(O) Sole Agent
The COMPANY first named in Item 1 of the Declarations shall
be deemed the sole agent of each DIRECTOR and OFFICER for the
purpose of requesting any endorsement to this POLICY, making
premium payments and adjustments, receipting for payments of
INDEMNITY and receiving notifications, including notice of
cancellation from the INSURER.
(P) Acts, Omissions or Warranties
The acts, omissions or warranties of any DIRECTOR or OFFICER
shall not be imputed to any other DIRECTOR or OFFICER with
respect to the coverages applicable under this POLICY.
(Q) Dispute Resolution and Service of Suit
Any controversy or dispute arising out of or relating to this
POLICY, or the breach, termination or validity thereof, shall
be resolved in accordance with the procedures specified in
this Section IV (Q), which shall be the sole and exclusive
procedures for the resolution of any such controversy or
dispute.
(1) Negotiation. The COMPANY and the INSURER shall attempt
in good faith to resolve any controversy or dispute
arising out of or relating to this POLICY promptly by
negotiations between executives who have authority to
settle the controversy. Any party may give the other
party written notice of any dispute not resolved in the
normal course of business. With fifteen (15) days the
receiving party shall submit to the other a written
response. The notice and the response shall include
(a) a statement of each party's position and a summary
of arguments supporting that position, and (b) the name
and title of the executive who will represent that
party and of any other person who will accompany the
executive. Within thirty (30) days after delivery of
the disputing party's notice, the executives of both
parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All
reasonable requests for information made by one party
to the other will be honored. If the matter has not
been resolved within sixty (60) days of the disputing
party's notice, or if the parties fail to meet within
thirty (30) days, either party may initiate mediation
of the controversy or claim as provided hereinafter.
All negotiations pursuant to this clause will be kept
confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal
Rules of Evidence and state rules of evidence.
(2) Mediation. If the dispute has not been resolved by
negotiation as provided herein, the parties shall
endeavor to settle the dispute by mediation under the
then current Center for Public Resources Model
Procedure for Mediation of Business Disputes. The
neutral third party will be selected from the Center
for Public Resources Panels of Neutrals, with the
assistance of the Center for Public Resources.
(3) Arbitration. Any controversy or dispute arising out of
or relating to this POLICY, or the breach, termination
or validity thereof, which has not been resolved by
non-binding means as provided herein within ninety (90)
days of the initiation of such procedure, shall be
settled by binding arbitration in accordance with the
Center for Public Resources for Non-Administered
Arbitration of Business Disputes (the "CPR Rules") by
three (3) independent and impartial arbitrators. The
COMPANY and the INSURER each shall appoint one
arbitrator; the third arbitrator, who shall serve as
the chair of the arbitration panel, shall be appointed
in accordance with CPR Rules. If either the COMPANY or
the INSURER has requested the other to participate in a
non-binding procedure and the other has failed to
participate, the requesting party may initiate
arbitration before expiration of the above period. The
arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Subsection 1 et seq., and
judgment upon the award rendered by the arbitrators may
be entered by any court having jurisdiction thereof.
The terms of this POLICY are to be construed in an
evenhanded fashion as between the COMPANY and the
INSURER in accordance with the laws of the jurisdiction
in which the situation forming the basis for the
controversy arose. Where the language of this POLICY
is deemed to be ambiguous or otherwise unclear, the
issue shall be resolved in a manner most consistent
with the relevant terms of this POLICY without regard
to authorship of the language and without any
presumption or arbitrary interpretation or construction
in favor of either the COMPANY or the INSURER. In
reaching any decision the arbitrators shall give due
consideration for the customs and usages of the
insurance industry. The arbitrators are not empowered
to award damages in excess of compensatory damages and
each party hereby irrevocably waives any such damages.
In the event of a judgment being entered against the
INSURER on an arbitration award, the INSURER at the
request of the COMPANY, shall submit to the
jurisdiction of any court of competent jurisdiction
within the United States of America, and shall comply
with all requirements necessary to give such court
jurisdiction and all matters relating to such judgment
and its enforcement shall be determined in accordance
with the law and practice of such court.
(4) Service of Suit. Service of process in such suit or
any other suit instituted against the INSURER under
this POLICY may be made upon Messrs. LeBoeuf, Lamb,
Greene, & MacRae, L.L.P., 125 West 55th Street, New
York, New York 10019. The INSURER will abide by the
final decision of the court in such suit or of any
appellate court in the event of any appeal. Messrs.
LeBoeuf, Lamb, Greene & MacRae, L.L.P. are authorized
and directed to accept service of process on behalf of
the INSURER in any such suit and, upon the COMPANY's
request, to give a written undertaking to the COMPANY's
that they will enter a general appearance upon the
INSURER's behalf in the event such suit is instituted.
Nothing in this clause constitutes or should be
understood to constitute a waiver of the INSURER's
right to commence an action in any court of competent
jurisdiction in the United States, to remove an action
to a United States District Court, or to seek to
transfer a case to another court as permitted by the
laws of the United States or of any state in the United
States.
(R) Severability
In the event that any provision of this POLICY shall be
declared or deemed to be invalid or unenforceable under any
applicable law, such invalidity or unenforceability shall not
affect the validity or enforceability of the remaining
portion of this POLICY.
(S) Non-assessability
The COMPANY (and, accordingly, any DIRECTOR or OFFICER for
whom the COMPANY acts as agent) shall only be liable under
this POLICY for the premium stated in Item 4 of the
Declarations. Neither the COMPANY nor any DIRECTOR or
OFFICER for whom the COMPANY acts as agent shall be subject
to any contingent liability or be required to pay any dues or
assessments in addition to the premium described above.
IN WITNESS WHEREOF, Associated Electric & Gas Insurance Services Limited
has caused this POLICY to be signed by its Chairman at Hamilton, Bermuda.
However, this POLICY shall not be binding upon the INSURER unless
countersigned on the Declaration Page by a duly authorized representative
of the INSURER.
/s/ Bernard J. Kennedy /s/ J.E. Bachman
Bernard J. Kennedy, Chairman J.E. Bachman, President
and Chief Executive Officer
<PAGE>
ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
Endorsement No. 1 Effective Date of Endorsement June 1, 1995
Attached to and forming part of POLICY No. D0392B1A95
COMPANY IPALCO Enterprises, Inc.
It is understood and agreed that this POLICY is hereby amended as
indicated. All other terms and conditions of this POLICY remain
unchanged.
OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATIONS
I. Definition (E) DIRECTOR and OFFICER is amended to include the
following:
(4) (a) any director, officer or trustee of the COMPANY who is
named in attachment OPC-FP1 and who is serving at the
specific written request of the COMPANY in the position
of a director, officer or trustee of the outside FOR-
PROFIT ORGANIZATION, which position and FOR-PROFIT
ORGANIZATION are named in attachment OPC-FP1, while
such director, officer or trustee is acting in such
capacity; and
(b) any present or former director, officer or trustee of
the COMPANY who has served at the specific written
request of the COMPANY in the position of a director,
officer or trustee of an outside FOR-PROFIT
ORGANIZATION in respect to WRONGFUL ACTS committed
while such director, officer or trustee was acting in
such capacity; provided, however, that such director,
officer or trustee, such outside FOR-PROFIT
ORGANIZATION and such position were named in an
endorsement (similar to this Endorsement) to the
Directors' and Officers' Policy of the INSURER in force
at the time at which such director, officer or trustee
was acting in such capacity.
II. The following Definition is added to the POLICY:
(R) FOR-PROFIT ORGANIZATION: The term "FOR-PROFIT ORGANIZATION"
shall mean an organization other than a NOT-FOR-PROFIT
ORGANIZATION.
III. Exclusion (L) is hereby deleted in its entirety and replaced with
the following:
(L) where such CLAIM(S) arises out of such DIRECTOR'S or
OFFICER'S activities as a director, officer or trustee of any
entity other than:
(1) the COMPANY; or
(2) any outside NOT-FOR-PROFIT ORGANIZATION as provided in
Section II(E)(2); or
(3) any outside FOR-PROFIT ORGANIZATION as provided in an
OUTSIDE POSITION COVERAGE - FOR-PROFIT ORGANIZATIONS
Endorsement.
<PAGE>
ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED
Attachment OPC-FP1 to Endorsement No. 1 Effective Date of Endorsement
June 1, 1995
Attached to and forming part of POLICY No. D0392B1A95
COMPANY IPALCO Enterprises, Inc.
Name, FOR-PROFIT ORGANIZATION and position of each director, officer or
trustee of the COMPANY covered under Endorsement No. 1
NAME FOR-PROFIT ORGANIZATION POSITION
J.R. Hodowal Tecumseh Coal Corporation Director
R.L. Humke Techumseh Coal Corporation Director
EXHIBIT 10.21
INDIANAPOLIS POWER & LIGHT COMPANY
SUPPLEMENTAL RETIREMENT PLAN AND TRUST AGREEMENT
FOR A SELECT GROUP OF MANAGEMENT EMPLOYEES
(AS AMENDED AND RESTATED EFFECTIVE MARCH 1, 1996)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . 3
Section 1.01. Accrued Benefit. . . . . . . . . . . . 3
Section 1.02. Actuarial Equivalent . . . . . . . . . 3
Section 1.03. Adjusted Accrued Benefit . . . . . . . 4
Section 1.04. Adjusted Preretirement Surviving Spouse
Death Benefit. . . . . . . . . . . . . 4
Section 1.05. Administrator. . . . . . . . . . . . . 4
Section 1.06. Board. . . . . . . . . . . . . . . . . 4
Section 1.07. Break In Service . . . . . . . . . . . 5
Section 1.08. Company. . . . . . . . . . . . . . . . 5
Section 1.09. Company Retirement Plan. . . . . . . . 5
Section 1.10. Compensation . . . . . . . . . . . . . 5
Section 1.11. Effective Date . . . . . . . . . . . . 6
Section 1.12. Employer . . . . . . . . . . . . . . . 6
Section 1.13. ERISA. . . . . . . . . . . . . . . . . 6
Section 1.14. Hour of Service. . . . . . . . . . . . 6
Section 1.15. Maximum Benefit Liability. . . . . . . 7
Section 1.16. Normal Retirement Age. . . . . . . . . 9
Section 1.17. Participant. . . . . . . . . . . . . .10
Section 1.18. Participant Account. . . . . . . . . .10
Section 1.19. Plan . . . . . . . . . . . . . . . . .10
Section 1.20. Plan Year. . . . . . . . . . . . . . .10
Section 1.21. Post-Tax Adjusted Benefit. . . . . . .10
Section 1.22. Preretirement Surviving Spouse Death
Benefit. . . . . . . . . . . . . . . .12
Section 1.23. Prior Plan . . . . . . . . . . . . . .13
Section 1.24. Service. . . . . . . . . . . . . . . .13
Section 1.25. Tax Distributions. . . . . . . . . . .13
Section 1.26. Total Disability . . . . . . . . . . .13
Section 1.27. Trust Fund . . . . . . . . . . . . . .14
Section 1.28. Trustee. . . . . . . . . . . . . . . .14
Section 1.29. Valuation Date . . . . . . . . . . . .14
Section 1.30. Vested Portion . . . . . . . . . . . .14
Section 1.31. Participating Employers. . . . . . . .15
Section 1.32. Available Net Income . . . . . . . . .15
Section 1.33. Compensation Committee . . . . . . . .16
ARTICLE II PARTICIPATION . . . . . . . . . . . . . . .16
Section 2.01. Participants . . . . . . . . . . . . .16
Section 2.02. Reemployment . . . . . . . . . . . . .20
ARTICLE III MONTHLY SUPPLEMENTAL PENSION BENEFITS . . .21
Section 3.01. Senior Executive Officer's Monthly
Supplemental Pension Benefits. . . . .21
Section 3.02. Other Executive Officer's Monthly
Supplemental Pension Benefits. . . . .22
Section 3.03. Special Monthly Supplemental Pension
Benefits . . . . . . . . . . . . . . .23
ARTICLE IV PAYMENT OF RETIREMENT BENEFITS. . . . . . .24
Section 4.01. Entitlement to Retirement Benefits . .24
Section 4.02. Non-Vested Benefits. . . . . . . . . .26
Section 4.03. Tax Distribution Payments. . . . . . .27
Section 4.04. Reduction in Accrued Benefit and
Preretirement Surviving Spouse Death
Benefit. . . . . . . . . . . . . . . .31
Section 4.05. Distribution and Recontribution of
Income . . . . . . . . . . . . . . . .35
ARTICLE V MONTHLY DEATH BENEFITS. . . . . . . . . . .37
ARTICLE VI CONTRIBUTIONS TO THE TRUST FUND . . . . . .38
Section 6.01. Initial Company Contribution . . . . .38
Section 6.02. Annual Company Contribution. . . . . .38
Section 6.03. Additional Company Contributions . . .39
Section 6.04. Form of Contribution . . . . . . . . .39
ARTICLE VII ESTABLISHMENT OF TRUST FUND . . . . . . . .39
Section 7.01. Trust Fund . . . . . . . . . . . . . .39
Section 7.02. Establishment of Participant Accounts.40
Section 7.03. Allocation of Contributions. . . . . .40
Section 7.04. Valuations . . . . . . . . . . . . . .41
Section 7.05. Reallocation of Excess Participant
Account Balances . . . . . . . . . . .42
Section 7.06. Payment of Expenses. . . . . . . . . .42
Section 7.07. Accounting and Record Keeping. . . . .43
Section 7.08. Limitation on Liability. . . . . . . .44
Section 7.09. Consultation and Indemnification . . .44
Section 7.10. Litigation . . . . . . . . . . . . . .44
Section 7.11. Waiver of Bond . . . . . . . . . . . .45
ARTICLE VIII INVESTMENT OF TRUST FUND. . . . . . . . . .45
Section 8.01. Management of Trust Fund and Appointment
of Investment Manager. . . . . . . . .45
Section 8.02. Powers of Trustee. . . . . . . . . . .46
ARTICLE IX RESIGNATION, REMOVAL, AND APPOINTMENT
OF SUCCESSOR TRUSTEE. . . . . . . . . . . .51
Section 9.01. Resignation. . . . . . . . . . . . . .51
Section 9.02. Removal. . . . . . . . . . . . . . . .51
Section 9.03. Successor Trustee. . . . . . . . . . .51
Section 9.04. Accounting by Trustee. . . . . . . . .52
Section 9.05. Merger or Consolidation of Trustee . .52
ARTICLE X NON-DIVERSION OF TRUST FUND . . . . . . . .52
ARTICLE XI ADMINISTRATION. . . . . . . . . . . . . . .53
Section 11.01. Delegation of Responsibility. . . . .53
Section 11.02. Construction of Plan. . . . . . . . .53
Section 11.03. Tax Information to Participants . . .54
Section 11.04. Determinations. . . . . . . . . . . .54
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . .55
Section 12.01. Amendment or Termination of Plan. . .55
Section 12.02. Right to Merge Plan . . . . . . . . .56
Section 12.03. Successors and Assigns. . . . . . . .56
Section 12.04. Choice of Law . . . . . . . . . . . .56
Section 12.05. No Employment Contract. . . . . . . .56
Section 12.06. Non-Alienation. . . . . . . . . . . .57
Section 12.07. Gender and Number . . . . . . . . . .57
Section 12.08. Headings. . . . . . . . . . . . . . .57
Section 12.09. Payment to Incompetents . . . . . . .57
Section 12.10. Illegal or Invalid Provisions . . . .58
<PAGE>
INDIANAPOLIS POWER & LIGHT COMPANY
SUPPLEMENTAL RETIREMENT PLAN AND TRUST
AGREEMENT FOR A SELECT GROUP OF MANAGEMENT EMPLOYEES
(AS AMENDED AND RESTATED EFFECTIVE MARCH 1, 1996)
Pursuant to Section 12.01 of the Indianapolis Power & Light
Company Supplemental Retirement Plan and Trust Agreement for a Select
Group of Management Employees (the "Plan") which was originally
executed on November 1, 1988 by and between Indianapolis Power & Light
Company, Inc. (the "Company") and National City Bank, Indiana (the
"Trustee") and last amended effective May 1, 1993, the Company hereby
amends and completely restates the Plan, effective as of March 1, 1996,
as follows:
WITNESSETH:
WHEREAS, effective May 1, 1983, the Company established the
Unfunded Supplemental Retirement Plan for a Select Group of Management
Employees (the "Prior Plan") which was designed to meet applicable
exemptions under Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6)
of ERISA (as hereinafter defined) and under Department of Labor
Regulation Section 2520.104-23; and
WHEREAS, in order to provide the active participants in the Prior
Plan with greater assurance that the benefits provided under such Prior
Plan will be duly made, the Company desires to establish a successor
plan and trust (the "Plan") for the active participants in the Prior
Plan (and has contemporaneously limited their participation in the
Prior Plan to preclude a duplication of benefits) and to transfer
thereto sufficient assets to be held therein and applied against the
benefit obligations of the Company under the terms of the Plan, until
paid or returned in accordance with the terms of this Agreement; and
WHEREAS, in recognition of the management services and other
benefits provided to the Employer (as hereinafter defined) by the key
employees who are Participants (as hereinafter defined) under the Plan,
it is the intention of the Company to make contributions to the Plan
in accordance with the terms of this Agreement; and
WHEREAS, the Plan is not intended to be a tax qualified plan
under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), but is intended to meet and comply with the
requirements of ERISA and shall be interpreted accordingly to effect
the intent of the parties;
NOW, THEREFORE, in consideration of the services which have been
and shall be performed by such Plan Participants, of the premises and
of the mutual covenants herein contained, the receipt and sufficiency
of which are hereby expressly acknowledged, the parties do hereby
covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Accrued Benefit. The term "Accrued Benefit" means
the monthly amount payable to a Participant at age sixty-five (65),
based on such Participant's average Compensation at the date of
determination, under Section 3.01 or Section 3.02, whichever is
applicable, multiplied by a fraction (not to exceed one (1)), the
numerator of which is such Participant's Service at the date of
determination and the denominator of which is the lesser of thirty (30)
or the total Service such Participant would have completed if his
employment by the Employer had continued until his attainment of the
Normal Retirement Age; provided, however, that if the Participant's
employment with the Employer is terminated by reason of his incurring
a Total Disability, the fraction described above shall be one (1),
regardless of his Service at the date he incurs a Total Disability.
Section 1.02. Actuarial Equivalent. The term "Actuarial
Equivalent" means the equivalent in value of the aggregate amounts
expected to be paid under different forms of payment under this Plan,
on the basis of an assumed rate of interest of seven percent (7%) and
mortality rates under the Unisex Pension 1984 Mortality Table (UP-84)
with no age set back for the Participant and a three (3) year age set
back for the Participant's spouse.
Section 1.03. Adjusted Accrued Benefit. The term "Adjusted
Accrued Benefit" means the Accrued Benefit of each Participant after
it is adjusted in accordance with Section 4.04(a) to reflect any Tax
Distributions made to such Participant and in accordance with Section
4.04(b) to reflect any distributions made under Section 4.05 and not
recontributed to the Plan.
Section 1.04. Adjusted Preretirement Surviving Spouse Death
Benefit. The term "Adjusted Preretirement Surviving Spouse Death
Benefit" means the Preretirement Surviving Spouse Death Benefit of a
surviving spouse of a deceased Participant after it is adjusted in
accordance with Section 4.04(a) to reflect any Tax Distributions made
to such deceased Participant or to such surviving spouse and in
accordance with Section 4.04(b) to reflect any distributions made under
Section 4.05 and not recontributed to the Plan.
Section 1.05. Administrator. The term "Administrator" means the
Company, which shall have the sole authority to manage and to control
the operation and administration of this Plan.
Section 1.06. Board. The term "Board" means the Board of
Directors of the Company. Whenever the provisions of this Plan require
action by the Board, it may be taken by the Executive Committee of the
Board with the same force and effect as though taken by the entire
Board.
Section 1.07. Break In Service. The term "Break in Service"
means the last calendar day of any consecutive twelve (12) month
computation period as provided in Section 1.24 during which a person
completes fewer than five hundred and one (501) Hours of Service.
Section 1.08. Company. The term "Company" means Indianapolis
Power & Light Company and any successor thereto or predecessor thereof.
Section 1.09. Company Retirement Plan. The term "Company
Retirement Plan" means the Employees' Retirement Plan of Indianapolis
Power & Light Company as now in effect or hereafter amended. The
Company Retirement Plan is not amended or modified in any manner by
this Plan, and any benefits payable to Participants or to their
surviving spouses under this Plan shall have no effect on the benefits
payable to Participants or to their surviving spouses under the Company
Retirement Plan.
Section 1.10. Compensation. The term "Compensation" means the
remuneration received by a Participant from the Employer for services
rendered to the Employer, including incentive and length-of-service pay
but specifically excluding bonus payments, prizes or reimbursements and
any payments made pursuant to the Executive Incentive Compensation Plan
of IPALCO Enterprises, Inc. and the IPALCO Enterprises, Inc. Annual
Incentive Plan and 1990 Long-Term Performance Incentive Plan; provided,
however, that the term "Compensation" shall also include any current
compensation deferred by a Participant under any qualified or
nonqualified plan sponsored or maintained by the Employer or under any
agreement entered into between a Participant and the Employer other
than the Executive Incentive Compensation Plan of IPALCO Enterprises,
Inc.
Section 1.11. Effective Date. The term "Effective Date" means
November 1, 1988.
Section 1.12. Employer. The term "Employer" means the Company,
any entity which is affiliated with the Company within the meaning of
Sections 210(b) and 210(c) of ERISA, and any successor thereto or
predecessor thereof.
Section 1.13. ERISA. The term "ERISA" means the Employee
Retirement Income Security Act of 1974, as now in effect or hereinafter
amended and shall also include any regulations promulgated thereunder.
Section 1.14. Hour of Service. The term "Hour of Service" means
the hours which are recognized as such under the Company Retirement
Plan.
Section 1.15. Maximum Benefit Liability. The term "Maximum
Benefit Liability" means with respect to each Participant Account
established hereunder the lesser of:
(a) The greater of:
(i) the present value (as of the date of
determination) of the Vested Portion of a Participant's
Adjusted Accrued Benefit (or, if the payment of monthly
benefits has already commenced, the remaining payments)
due under Article IV to the Participant for whom such
Participant Account is established or, if applicable, his
surviving spouse, and
(ii) with respect to a married Participant or the
surviving spouse of a deceased Participant, the present
value (as of the date of determination) of the Adjusted
Preretirement Surviving Spouse Death Benefit (or, if the
payment of death benefits has already commenced, the
remaining payments) due under Article V to the surviving
spouse of the Participant for whom such Participant
Account is established.
(b) The present value (as of the date of determination)
of the Vested Portion of a Participant's or, if applicable, his
surviving spouse's Post-Tax Adjusted Benefit (or, if the payment
of monthly benefits has already commenced, the remaining
payments) due under Article IV to the Participant or, if
applicable, his surviving spouse for whom such Participant
Account is established.
In calculating the Maximum Benefit Liability as of a determination
date, the following rules are applicable:
(c) Any reductions in the Accrued Benefits and
Preretirement Surviving Spouse Death Benefits of Participants or
their surviving spouses, where applicable, which are to be made
as of the date of determination under Section 4.04 shall be
given effect, whether or not the Tax Distribution payments (or
distributions of Available Net Income not recontributed under
Section 4.05) attributable to such reduction have been made as
of the date of calculation; provided, however, that if such Tax
Distribution payment is not ultimately made by the Company under
Section 4.03 (or such distribution of Available Net Income is
not ultimately made under Section 4.05), the reduction shall not
be given effect in any calculations of the Maximum Benefit
Liability of a Participant's Accrued Benefit or Preretirement
Surviving Spouse Death Benefit which are made after the due date
of the Tax Distribution payment (or distribution of Available
Net Income); and
(d) The Participant's Adjusted Accrued Benefit and
Adjusted Preretirement Surviving Spouse Death Benefits shall be
calculated based on the Participant's Compensation and Service
at the date of determination and, if the Participant is less
than age sixty-five (65) at the date of determination, shall be
calculated based on the Company Retirement Plan benefit, payable
at age sixty-five (65), accrued on the date of determination.
(e) Once a Participant reaches age sixty-five (65) or he
or, if applicable, his surviving spouse commences pay status
under the Plan, the Maximum Benefit Liability shall be
determined based on Subsection (b) of this Section and without
regard to Subsection (a) of this Section even if it results in
a greater amount than the amount determined under Subsection (a)
of this Section.
For purposes of making the calculation of present value, the present
value discount rate shall be eight percent (8%), and the mortality
assumption shall be computed in accordance with the 1983 Group Annuity
Mortality Table. The Maximum Benefit Liability shall be calculated and
certified by an actuary designated by the Company who is acceptable to
the Trustee and who is enrolled by the Joint Board for the Enrollment
of Actuaries.
Section 1.16. Normal Retirement Age. The term "Normal
Retirement Age" means for each Participant age sixty-five (65).
Section 1.17. Participant. The term "Participant" means any
individual designated in Article II of this Plan who is eligible for
benefits under this Plan.
Section 1.18. Participant Account. The term "Participant
Account" means the separate account maintained by the Trustee for each
Participant.
Section 1.19. Plan. The term "Plan" means the Indianapolis
Power & Light Company Supplemental Retirement Plan and Trust Agreement
for a Select Group of Management Employees, which is intended to be a
continuation of the Prior Plan with respect to the active participants
in the Prior Plan at the Effective Date.
Section 1.20. Plan Year. The term "Plan Year" means a
consecutive twelve (12) month period beginning on November 1 and ending
on October 31.
Section 1.21. Post-Tax Adjusted Benefit. The term "Post-Tax
Adjusted Benefit" means with respect to each Participant or, if
applicable, his surviving spouse the monthly amount that would be
needed to be paid to a Participant or, if applicable, his surviving
spouse in any calendar year for which payments are due under this Plan
so that the net amount (without regard to any applicable withholding)
available to the Participant or, if applicable, his surviving spouse
after taking into account applicable federal, state and local income
taxes would be equal to what the net amount would be if this Plan was
a tax-qualified retirement plan under Section 401(a) of the Code and
the amount payable to the Participant or, if applicable, his surviving
spouse would be fully taxable and equal to the amounts determined under
Article III or Article V, whichever is applicable, without regard to
the Section 4.04 reductions (other than the reductions described in
Subsection (c) below). A Participant's or, if applicable, his
surviving spouse's Post-Tax Adjusted Benefit shall be redetermined each
January 1 in accordance with the following rules:
(a) For purposes of determining the amount of federal,
state and local income taxes applicable on the amounts payable
under this Plan, it shall be assumed that the Participant or, if
applicable, his surviving spouse
(i) will receive no additional income from any
source during such calendar year and,
(ii) has no personal exemptions and no deductions
available, and
(iii) if married, will be filing a joint return.
(b) For purposes of determining state and local taxes,
the Participant or, if applicable, his surviving spouse shall be
deemed to be a resident of Marion County, Indiana.
(c) If a Participant or his surviving spouse fails to
recontribute to the Plan the entire amount of Available Net
Income distributed to him under Section 4.05 with respect to a
calendar year, the Post-Tax Adjusted Benefit shall be adjusted
in accordance with Subsection (b) of Section 4.04.
(d) If tax rates are modified in a calendar year after
the January 1 determination date, the change in tax rates will
not be reflected in the determination of a Participant's or, if
applicable, his surviving spouse's Post-Tax Adjusted Benefit
until the next following January 1; provided, however, that if
on an applicable January 1 determination date tax rate changes
for future calendar years are already established in the Code,
rate changes shall be taken into account for purposes of Section
1.15.
Section 1.22. Preretirement Surviving Spouse Death Benefit. The
term "Preretirement Surviving Spouse Death Benefit" means the monthly
amount payable to a surviving spouse of a deceased Participant under
Article V.
Section 1.23. Prior Plan. The term "Prior Plan" means the
Indianapolis Power & Light Company Unfunded Supplemental Retirement
Plan for a Select Group of Management Employees, as amended through
October 31, 1988. The retired participants or, if applicable, the
surviving spouses of deceased participants in the Prior Plan shall
continue to receive their benefits in accordance with the Prior Plan.
Section 1.24. Service. The term "Service" means the period of
employment of an individual by the Employer and, for purposes of
vesting and benefit accrual, shall be measured in consecutive twelve
(12) month computation periods (hereinafter sometimes referred to as
"years") beginning on the first (1st) calendar day of an individual's
employment by the Employer and anniversaries thereof and disregarding
any such periods in which such individual completes fewer than one
thousand (1,000) Hours of Service. Notwithstanding the above, upon
termination of his employment with the Employer, an individual shall
receive credit for a fractional year of Service for the period from the
last such anniversary date.
Section 1.25. Tax Distributions. The term "Tax Distributions"
means the cash payments made by the Company under Section 4.03.
Section 1.26. Total Disability. The term "Total Disability"
means a physical or mental condition which prevents a Participant from
performing his duties for the Employer; provided, however, that a
Participant shall not be deemed to have incurred a Total Disability
unless such Participant is eligible for Disability Retirement under the
Company Retirement Plan.
Section 1.27. Trust Fund. The term "Trust Fund" means the trust
fund created hereunder.
Section 1.28. Trustee. The term "Trustee" means the initial
Trustee of the Trust Fund, and any successor acting as Trustee of the
Trust Fund.
Section 1.29. Valuation Date. The term "Valuation Date" means
each and every October 31 and December 31.
Section 1.30. Vested Portion. The term "Vested Portion" means
the portion of a Participant's Accrued Benefit, Adjusted Accrued
Benefit or Post-Tax Adjusted Benefit, whichever is applicable, which
is vested and nonforfeitable as determined based on that Participant's
Service in accordance with the following schedule:
Years of Service
Completed by Participant Vested Portion
Less than one (1) year 0%
One (1) year 20%
Two (2) years 40%
Three (3) years 60%
Four (4) years 80%
Five (5) years or more 100%
provided, however, that notwithstanding the above, the Accrued Benefit
or, if applicable, Adjusted Accrued Benefit or Post-Tax Adjusted
Benefit of a Participant shall become one hundred percent (100%) vested
and nonforfeitable upon the Participant's attainment of age sixty-five
(65) or upon his incurring a Total Disability.
Section 1.31. Participating Employers. The term "Participating
Employers" means the Company, IPALCO Enterprises, Inc., Mid-America
Capital Resources, Inc. and any other Employer who has adopted this
Plan, whose participation has been approved by the Company and who has
agreed to reimburse the Company for their pro-rata costs of the
benefits provided under the Plan to their respective employees.
Section 1.32. Available Net Income. The term "Available Net
Income" means, with respect to a Participant for a calendar year, the
taxable income (including all items of ordinary income and capital
gains recognized for federal income tax purposes in that calendar year
and reduced by all ordinary and capital losses recognized for federal
income tax purposes in that calendar year) of the Trust Fund for that
calendar year multiplied by a fraction, the numerator of which is the
value of that Participant's Participant Account at the Valuation Date
immediately preceding that calendar year and the denominator of which
is the value of all Participant Accounts at the Valuation Date
immediately preceding that calendar year; provided, however, that for
purposes of these allocations, the value of each Participant Account
shall be decreased by fifty percent (50%) of any distributions from
such Participant Account under Article V and under Section 4.01 since
the applicable Valuation Date. The term "Available Net Income" shall
not include income or loss attributable to any portion of the Trust
Fund that is treated as being owned by a Participant under Sections
671-678 of the Code.
Section 1.33. Compensation Committee. The term "Compensation
Committee" means the Compensation Committee of the Board of Directors
of IPALCO Enterprises, Inc.
ARTICLE II
PARTICIPATION
Section 2.01. Participants. The individuals eligible to
participate in this Plan on the Effective Date shall include only the
Senior Executive Officers and the Other Executive Officers of the
Company who are designated in this Section. Effective March 1, 1996,
the Senior Executive Officers selected to participate in this Plan are
as follows:
Name
Current Title
John R. Hodowal
Indianapolis Power & Light Company -
Chairman of the Board and Chief Executive
Officer; IPALCO Enterprises, Inc. -
Chairman of the Board and President
Ramon L. Humke
Indianapolis Power & Light Company -
President and Chief Operating Officer;
IPALCO Enterprises, Inc. - Vice Chairman
Gerald D. Waltz
Indianapolis Power & Light Company - Senior
Vice President, Business Development
John R. Brehm
Indianapolis Power & Light Company - Senior
Vice President, Finance and Information
Services; IPALCO Enterprises, Inc. - Vice
President and Treasurer
Robert W. Rawlings
Indianapolis Power & Light Company - Senior
Vice President, Electric Production
Bryan G. Tabler
Indianapolis Power & Light Company - Senior
Vice President, Secretary and General
Counsel; IPALCO Enterprises, Inc. - Vice
President, Secretary and General Counsel
Maurice O. Edmonds
IPALCO Enterprises, Inc. - Vice President,
Corporate Affairs
N. Stuart Grauel
IPALCO Enterprises, Inc. - Vice President,
Public Affairs
Joseph A. Gustin
Mid-America Capital Resources, Inc. -
President; Mid-America Energy Resources,
Inc. - President
Zane G. Todd
Former IPALCO Enterprises, Inc. and
Indianapolis Power & Light Company -
Chairman of the Board and Chief Executive
Officer (Retired 5-01-89)
Robert W. Hill
Former IPALCO Enterprises, Inc. - Vice
Chairman (Retired 5-01-91)
Gylith J. Cooper
Surviving Spouse of Richard Q. Cooper -
Former Indianapolis Power & Light Company -
Senior Vice President, Steam System
(Retired 5-01-89 and Deceased 4-19-94)
Beverly A. Minter
Surviving Spouse of Michael M. Minter -
Former Indianapolis Power & Light Company -
Senior Vice President, Planning and
Engineering (Deceased 12-05-93)
Thomas A. King
Former IPALCO Enterprises, Inc. - Vice
President, Corporate Affairs (Terminated
8/31/92)
Effective March 1, 1996, the Other Executive Officers selected to
participate in this Plan are as follows:
Name
Current Title
Michael G. Banta
Indianapolis Power & Light Company - Vice
President and Assistant General Counsel
John C. Berlier, Jr.
Indianapolis Power & Light Company - Vice
President, Resource Planning and Rates
Max Califar
Indianapolis Power & Light Company - Vice
President, Human Resources
Ralph E. Canter
Indianapolis Power & Light Company - Vice
President, Steam Operations
Michael J. Farmer
Store Heat and Produce Energy, Inc. -
President
Susan Hanafee
IPALCO Enterprises, Inc. - Assistant Vice
President, Corporate Affairs
Donald W. Knight
Indianapolis Power & Light Company - Vice
President, Fuel Supply
Robert A. McKnight, Jr.
Indianapolis Power & Light Company - Vice
President, Major Project Management
Steven L. Meyer
Indianapolis Power & Light Company -
Treasurer; IPALCO Enterprises, Inc. -
Assistant Treasurer
Stephen J. Plunkett
Indianapolis Power & Light Company -
Controller; IPALCO Enterprises, Inc. -
Controller
Joseph A. Slash
Indianapolis Power & Light Company - Vice
President, Community and Corporate
Effectiveness
Clark L. Snyder
IPALCO Enterprises, Inc. - Assistant
Secretary; Mid-America Capital Resources,
Inc. - Vice President, Secretary and
General Counsel
Thomas A. Steiner
Indianapolis Power & Light Company - Vice
President, Transmission and Distribution
John D. Wilson
Indianapolis Power & Light Company - Vice
President, Information Services
Wendy V. Yerkes
Indianapolis Power & Light Company -
Assistant Secretary
David J. McCarthy
Indianapolis Power & Light Company -
Assistant General Counsel, Washington, D.C.
Office
Arthur G. Haan
Former Indianapolis Power & Light Company -
Vice President, General Services (Retired
2-01-96)
Michael E. Shriner
Former Indianapolis Power & Light Company -
Vice President, Marketing (Terminated
4-30-95)
Marcus E. Woods
Former Indianapolis Power & Light Company -
Vice President, Secretary and General
Counsel; IPALCO Enterprises, Inc. -
Secretary and General Counsel (Retired
1-01-95)
Arnold A. Gordus
Former Indianapolis Power & Light Company -
Assistant Vice President, Environmental
Affairs (Retired 4-30-94)
Donald E. Blue
Former Indianapolis Power & Light Company -
Vice President, Power Production (Retired
5-01-89)
Joseph E. Butler
Former Indianapolis Power & Light Company -
Vice President, Community Affairs and
Residential Sales (Terminated 2/1/91)
Jan E. Lower
Former Indianapolis Power & Light Company -
Vice President, Community Affairs
(Terminated 4/30/93)
An Other Executive Officer who is listed above and who
subsequently becomes a Senior Vice President, an Executive Vice
President, the President, Chief Operating Officer, Chief Executive
Officer or Chairman of the Board of the Company or who subsequently
becomes a Vice President or Vice Chairman of the Board of IPALCO
Enterprises, Inc. shall be deemed to be a Senior Officer under this
Plan without the necessity of a Plan amendment.
Additional management employees of the Company or officers and
management employees of any other Participating Employer may be added
as Participants to this Plan by action of the Compensation Committee,
provided such corporations have adopted this Plan and each has agreed
to reimburse the Company for their pro-rata costs of the benefits
provided under the Plan to their respective employees. The Committee
shall specify whether such officers or management employees are to be
considered Senior Officers or Other Executive Officers under this
Section 2.01.
Section 2.02. Reemployment. Any former Participant whose
employment with the Employer is terminated and who subsequently returns
to work for the Employer after he has a Break in Service shall be
reinstated as a Participant and shall have his prior Service restored
in determining his vested rights and his Accrued Benefits under this
Plan; provided, however, that if a reemployed Participant is receiving
monthly benefits under Section 4.01 at the time of his reemployment,
such monthly benefits shall cease for such period as he shall remain
employed by the Employer and complete at least forty (40) Hours of
Service per month, and any monthly benefits payable to him or to his
surviving spouse thereafter under Article IV or V, whichever is
applicable, shall be adjusted to reflect any payments previously made
to such Participant before the date he returned to work for the
Employer and any payments made subsequent to the date he returned to
work for the Employer with respect to months in which he fails to
complete at least forty (40) Hours of Service; provided, further, that
suspension of benefit payments to any such reemployed Participant shall
be made only after written notice has been given to him by the Company
by personal delivery or certified mail, and such benefit suspensions
shall comply with all requirements imposed pursuant to Section
2530.203-3 of the Department of Labor regulations which are
incorporated herein by reference.
ARTICLE III
MONTHLY SUPPLEMENTAL PENSION BENEFITS
Section 3.01. Senior Executive Officer's Monthly
Supplemental Pension Benefits. Except as provided by Section 3.03, the
monthly supplemental pension benefits for any Senior Executive Officer
shall be equal to sixty-five percent (65%) of the average monthly
Compensation paid to that Senior Executive Officer with respect to the
last thirty-six (36) consecutive months (or, if lesser, his entire
period of employment with the Employer) ending on or before the date
his employment with the Employer is terminated, less the benefits that
would be payable to him for the month he attains age fifty-five (55)
or, if later, the first (1st) month following the date his employment
with the Employer is terminated under the Company Retirement Plan on
a single-life basis regardless of the form in which such benefits are
actually paid; provided, however, that if the Senior Executive
Officer's benefits under the Company Retirement Plan are not payable
until his attainment of age sixty-five (65) because of his not meeting
the requirements for early retirement under the Company Retirement Plan
and his employment with the Employers is terminated before his
attainment of age sixty-five (65), his Company Retirement Plan benefit
offset under this Section shall be equal to the monthly amount payable
at the later of his attainment of age fifty-five (55) or the date on
which his employment with the Employers is terminated on a single life
basis which is the Actuarial Equivalent to the monthly amount payable
to him at age sixty-five (65) on a single life basis under the Company
Retirement Plan.
Section 3.02. Other Executive Officer's Monthly Supplemental
Pension Benefits. Except as provided by Section 3.03, the monthly
supplemental pension benefits for any Other Executive Officer shall be
equal to sixty percent (60%) of the average monthly Compensation paid
to that Other Executive Officer with respect to the last thirty-six
(36) consecutive months (or, if lesser, his entire period of employment
with the Employer) ending on or before the date his employment with the
Employer is terminated, less the benefits that would be payable to him
for the month he attains age fifty-five (55) or, if later, the first
(1st) month following the date his employment with the Employer is
terminated under the Company Retirement Plan on a single-life basis
regardless of the form in which such benefits are actually paid;
provided, however, that if the Other Executive Officer's benefits under
the Company Retirement Plan are not payable until his attainment of age
sixty-five (65) because of his not meeting the requirements for early
retirement under the Company Retirement Plan and his employment with
the Employers is terminated before his attainment of age sixty-five
(65), his Company Retirement Plan benefit offset under this Section
shall be equal to the monthly amount payable at the later of his
attainment of age fifty-five (55) or the date on which his employment
with the Employers is terminated on a single life basis which is the
Actuarial Equivalent to the monthly amount payable to him at age
sixty-five (65) on a single life basis under the Company Retirement
Plan.
Section 3.03. Special Monthly Supplemental Pension Benefits.
From time to time the Board, in its sole discretion, may provide for
alternative supplemental pension benefits under this Section 3.03 for
any Senior Executive Officer or Other Executive Officer in lieu of, and
not in addition to, the benefits described in Section 3.01 or Section
3.02, whichever Section is applicable, because of special circumstances
relating to such Executive's employment with the Employer. If the
Board takes action to add new Participants or to modify the benefits
of current Participants, the action shall designate the name of the
individual and the applicable benefit to be provided for such
individual. If the benefits provided under this Section are offset by
the Company Retirement Plan benefit, the offsets shall be calculated
consistent with and in accordance with the manner the offsets are
determined under Sections 3.01 and 3.02.
ARTICLE IV
PAYMENT OF RETIREMENT BENEFITS
Section 4.01. Entitlement to Retirement Benefits. A
Participant who retires or otherwise terminates his employment with the
Employer for reasons other than his death shall be entitled to receive
monthly supplemental pension benefits under this Plan only if:
(a) his employment with the Employer terminates on or
after his attainment of the Normal Retirement Age,
(b) his employment with the Employer terminates by
reason of his incurring a Total Disability, or
(c) his employment with the Employer terminates after
his completion of at least one (1) Year of Service.
The amount of the monthly supplemental pension benefits to which an
eligible Participant is entitled upon his retirement or other
termination of employment shall be equal to the Vested Portion of his
Post-Tax Adjusted Benefit; provided, however, that the amount of a
Participant's Post-Tax Adjusted Benefit shall be redetermined each
January 1; provided, further, that under no circumstances may the
Post-Tax Adjusted Benefit payable to a Participant be less than the
Vested Portion of his Adjusted Accrued Benefit as determined on
February 29, 1996. The non-Vested Portion of a Participant's Post-Tax
Adjusted Benefit shall be governed by Section 4.02. The monthly
payments shall begin on the first (1st) calendar day of the month
coinciding with or next following the date on which a Participant
attains his Normal Retirement Age or, if later, the date his employment
with the Employer is terminated and shall continue through the month
in which his death occurs; provided, however, that if a Participant's
employment with the Employer is terminated before his attainment of the
Normal Retirement Age, he may elect with the consent of the Company to
have his benefits begin on the first (1st) calendar day of the month
following the date on which his employment with the Employer is
terminated or, if later, the first (1st) day of the calendar month
immediately following his attainment of age fifty-five (55); provided,
further, that if benefit payments to a Participant begin before his
attainment of the Normal Retirement Age, the amount of such
Participant's monthly supplemental pension benefits shall be reduced
to the extent and in the same manner as such payments would be reduced
if made from the Company Retirement Plan. If a Participant is married
at the date his benefit payments are to commence and notwithstanding
anything contained in this Plan to the contrary, his monthly benefits
shall be paid in the form of an actuarially equivalent joint and
survivor annuity determined in the same manner as the Joint and
Survivor Annuity Option under Section 205.50 of the Company Retirement
Plan, unless such Participant, with the written consent of his spouse
witnessed by a Notary Public, elects not to have his benefits paid in
such form.
Payment of benefits under this Section 4.01 shall be made in
accordance with and consistent with the requirements set forth in
Section 205 of ERISA; provided, however, that subject to the applicable
spousal consent requirements contained in Section 205 of ERISA, a
Participant may elect for his benefits to be paid in any actuarially
equivalent form of payment which is available under the Company
Retirement Plan (other than a single lump sum payment).
Section 4.02. Non-Vested Benefits. If a Participant's
employment with the Employer is terminated before his completion of at
least five (5) years of Service, before his attainment of his Normal
Retirement Age and not by reason of his incurring a Total Disability,
such Participant shall only be entitled to the Vested Portion of his
Post-Tax Adjusted Benefit, the non-Vested Portion of his Post-Tax
Adjusted Benefit shall be forfeited and the portion of his Participant
Account attributable to the non-Vested Portion of his Post-Tax Adjusted
Benefit shall be reallocated as provided in Section 7.05; provided,
however, that if such Participant subsequently returns to work for the
Employer, the non-Vested Portion of his Post-Tax Adjusted Benefit shall
be immediately reinstated, his Participant Account shall be
reestablished and funded in accordance with Section 6.02 and he shall
be entitled to receive monthly supplemental pension benefits upon his
subsequent termination of employment with the Employer to the extent
otherwise provided under this Plan, less any benefits already paid to
him under this Plan before his reemployment with the Employer.
Section 4.03. Tax Distribution Payments. On or before
December 20 of each calendar year in which a Participant or, if
applicable, his surviving spouse is required to take amounts into
income for Federal income tax purposes by reason of his participation
in, or eligibility for benefits (including benefits received under an
annuity contract purchased in accordance with Article X) under this
Plan, the Company shall make a Tax Distribution payment to each
Participant or, if applicable, to the surviving spouse of each deceased
Participant equal to the product of:
(a) the amount (excluding amounts paid by the Company
under this Section) which such Participant or, if applicable,
his surviving spouse is required to recognize as income for
Federal income tax purposes by reason of his participation in,
or eligibility for benefits under, this Plan in such calendar
year; and
(b) the Participant's marginal individual composite
Federal, Indiana and Marion County income tax rate (based on
the Participant's estimated aggregate Compensation from the
Employer during the calendar year and taking into account the
deductibility for Federal income tax purposes of state and
local income taxes, if then allowable, and, except as
otherwise provided below, without regard to Section 1(g) of
the Code) in effect for the calendar year during which the
amount described in (a) above is required to be recognized as
income by such Participant; and
(c) one hundred percent (100%) divided by the amount
by which one hundred percent (100%) exceeds the rate in (b)
above expressed as a percent.
The amount of the required Tax Distribution payments shall be certified
to the Company on or before December 10 of each calendar year by the
actuary designated by the Company to calculate the Maximum Benefit
Liability under Section 1.15. For purposes of determining the amount
of each Tax Distribution payment, the amount described in (a) above
shall be estimated by assuming that each Participant, if applicable,
shall continue his employment with the Employer for the remainder of
the calendar year, each Participant's rate of Compensation shall remain
unchanged for the remainder of such calendar year and, if applicable,
that the Trust Fund (including the portion of the Trust Fund
attributable to Company contribution made in such calendar year) shall
earn investment income, both realized and unrealized, for the period
of October 31 to December 31 (or, with respect to Company contributions
made after October 31 but before December 31, for the remainder of
period beginning on the date of contribution and ending on such
December 31) of such calendar year at the same rate of return earned
by the Trust Fund for the Plan Year ending on October 31 of such
calendar year; provided, however, that the assumed rate of interest to
be applied against the initial Company contribution made under Section
6.01 shall be ten percent (10%). Notwithstanding anything contained
herein to the contrary, if before November 1 of a calendar year a
Participant or, if applicable, his surviving spouse files a statement
with the Company certifying that to the best of his or her knowledge
all or a portion of his or her taxable income by reason or his or
participation in this Plan shall be subject to the additional Federal
income tax under Section 1(g) of the Code and provides the Company with
information which will enable the actuary designated by the Company to
calculate the additional Federal income tax under Section 1(g) of the
Code resulting from his participation in this Plan, including his or
her estimated taxable income for such calendar year, the table in
Section 1 of the Code to be used by the Participant or, if applicable,
his surviving spouse for his Federal income tax return for such
calendar year and the number of personal exemptions that the
Participant or, if applicable, his surviving spouse intends to claim
on his or her Federal income tax return for such calendar year, the
Company shall have its actuary recalculate the amount of the Tax
Distribution payment required under this Section based on the
information provided by the Participant or, if applicable, his
surviving spouse, so that the amount of the Tax Distribution payment
made to the Participant or, if applicable, his surviving spouse shall
equal the estimated tax liability of the Participant or, if applicable,
his surviving spouse for such calendar year by reason of his
participation in this Plan; provided, however, that any adjustments in
the Tax Distribution payments under this sentence shall be limited to
adjustments reflecting the applicability of Section 1(g) of the Code.
If the amount described in (a) above which was estimated for purposes
of calculating the amount of any Tax Distribution payment to a
Participant or, if applicable, his surviving spouse is less than the
actual (a) amount, the Company shall pay to such Participant or, if
applicable, his surviving spouse as soon as practicable after the end
of such calendar year and in no event later than the March 15
immediately following such calendar year during which such amount was
recognized as income an amount equal to the product of:
(d) the amount by which the actual (a) amount exceeded
the estimated (a) amount; and
(e) the rate described in (b) above; and
(f) one hundred percent (100%) divided by the amount
by which one hundred percent (100%) exceeds the marginal
individual composite Federal, Indiana and Marion County income
tax rate expressed as a percent (based on the Participant's
estimated aggregate Compensation from the Employer during the
calendar year and taking into account the deductibility for
Federal income tax purposes of state and local income taxes,
if then allowable) in effect for the calendar year during
which such additional Tax Distribution payment is to be made.
If the amount described in (a) above which was estimated for purpose
of calculating the amount of any Tax Distribution payment to a
Participant or, if applicable, his surviving spouse is greater than the
actual (a) amount, the amount of the Tax Distribution payment shall be
recalculated by substituting for the estimated (a) amount the actual
(a) amount, and the amount by which the Tax Distribution payment
exceeds the recalculated amount shall be offset against future Tax
Distribution payments due until exhausted. Notwithstanding anything
contained herein to the contrary, Tax Distribution payments shall not
be made by the Company to a married Participant without the written
consent of his spouse witnessed by a Notary Public.
Section 4.04. Reduction in Accrued Benefit and Preretirement
Surviving Spouse Death Benefit. Each Participant's Accrued Benefit and
Preretirement Surviving Spouse Death Benefit shall be adjusted as
follows:
(a) As of the Effective Date and as of each Valuation
Date, a Participant's Accrued Benefit and the Preretirement
Surviving Spouse Death Benefit payable to the surviving spouse
of a deceased Participant who dies while still employed by the
Employer shall be reduced to the extent provided below to
reflect the value of each Tax Distribution payment made under
Section 4.03 attributable to his initial Accrued Benefit and
the initial Preretirement Surviving Spouse Death Benefit at
the Effective Date and attributable to increases in the amount
of his vested Accrued Benefit or Preretirement Surviving
Spouse Death Benefit. The amount of the Accrued Benefit and
Preretirement Surviving Spouse Death Benefit reduction to be
effected as of the Effective Date shall be determined by
multiplying the Accrued Benefit of a Participant or, if
applicable, Preretirement Surviving Spouse Death Benefit as of
the Effective Date which such Participant or, if applicable,
his surviving spouse is required to recognize as income for
Federal income tax purposes in 1988 by a percentage equal to
the rate described in Section 4.03(b) or, if the amount of the
1988 Tax Distribution payment for the Participant or, if
applicable, his surviving spouse was recalculated in
accordance with Section 4.03 based on tax information provided
by the Participant or, if applicable, his surviving spouse, a
percentage equal to the individual composite Federal, Indiana
and Marion County income tax rate used in recalculating the
amount of the Tax Distribution payment under Section 4.03 in
1988 in effect on the Effective Date. The amount of each
Accrued Benefit and Preretirement Surviving Spouse Death
Benefit reduction for each Valuation Date shall be determined
by multiplying any increase in the Adjusted Accrued Benefit of
a Participant or, if applicable, Preretirement Surviving
Spouse Death Benefit which as of the preceding Valuation Date
has not yet been recognized as income for Federal income tax
purposes and which such Participant or, if applicable, his
surviving spouse is required to recognize as income for
Federal income tax purposes in the calendar year during which
such Valuation Date falls by a percentage equal to the rate
described in Section 4.03(b) in effect on the Valuation Date
as of which the adjustment under this Section is made or, if
the amount of the Tax Distribution payment made in the
calendar year during which the Valuation Date occurs for the
Participant or, if applicable, his surviving spouse was
recalculated in accordance with Section 4.03 based on tax
information provided by the Participant or, if applicable, his
surviving spouse, a percentage equal to the individual
composite Federal, Indiana and Marion County income tax rate
used in recalculating the amount of the Tax Distribution
payment under Section 4.03 for such calendar year. No
reduction in the Accrued Benefits and Preretirement Surviving
Spouse Death Benefits of a Participant or, if applicable, his
surviving spouse shall be made under this Section with respect
to Tax Distribution payments which are not attributable to
increases in the Accrued Benefits or Preretirement Surviving
Spouse Death Benefits. Notwithstanding anything contained
herein to the contrary, if the Tax Distribution payments
required under Section 4.03 attributable to such Participant's
Accrued Benefit or Preretirement Surviving Spouse Death
Benefit, or increase therein, are not timely paid by the
Company, the amount of the reduction in such Participant's
Accrued Benefit or Preretirement Surviving Spouse Death
Benefit shall be retroactively reinstated as of the date on
which the reduction was made.
(b) In the event a Participant fails to recontribute
to the Plan the entire amount of Available Net Income
distributed to him under Section 4.05 with respect to a
calendar year, his Accrued Benefit and Preretirement Surviving
Spouse Death Benefit shall be reduced as of the date such
distribution is treated under Section 4.05 as having been made
to him by an amount equal to the product of:
(i) his Accrued Benefit (or Preretirement
Surviving Spouse Death Benefit, as the case may be) as
of the December 31 Valuation Date of the calendar year
to which the distribution of Available Net Income
relates, but before any adjustment has been made under
Section 4.04(a) with respect to such calendar year;
times
(ii) a fraction, the numerator of which is the
amount of Available Net Income distributed to the
Participant (and not recontributed by him to the Plan)
and the denominator of which is the amount of his
Participant Account that has, as of the date of
distribution, been taxed to the Participant for federal
income tax purposes;
provided, however, that a Participant's Accrued Benefit and
Preretirement Surviving Spouse Death Benefit shall not be
reduced under this Section 4.04(b) below the Adjusted Accrued
Benefit and Adjusted Preretirement Surviving Spouse Death
Benefit accrued by that Participant as of October 31, 1992
without regard to this Section 4.04(b).
Section 4.05. Distribution and Recontribution of Income. The
Administrator shall, as of each January 1 (or the first business day
thereafter if January 1 falls on a weekend), distribute to each
Participant the entire amount of that Participant's Available Net
Income for the immediately preceding calendar year; provided, however,
that the amount of distribution to which a Participant shall be
entitled under this Section 4.05 shall be reduced (but not below zero
(0)) by the amount of monthly pension benefits paid to that Participant
under this Plan during that immediately preceding calendar year. Each
Participant to whom a distribution is made under the preceding sentence
shall be deemed to have immediately recontributed such distribution to
his Participant Account unless such Participant elects (by completing,
signing and delivering the appropriate form to the Administrator on the
date such distribution is made) to receive such distribution in a
single lump sum cash payment. A Participant who elects to receive the
entire amount of his Available Net Income in a single lump sum cash
payment shall receive a distribution of such amount as soon after the
Administrator receives his election as is administratively feasible
(but no later than sixty-five (65) days after the end of the
immediately preceding calendar year) and shall have his Adjusted
Accrued Benefit and Preretirement Surviving Spouse Death Benefit and
his Post-Tax Adjusted Benefit reduced in accordance with Section
4.04(b). For all purposes of this Plan, any distribution under the
preceding sentence shall be treated as having been made on January 1
(or the first business day thereafter if January 1 falls on a weekend)
regardless of when the Participant actually receives a lump sum payment
of such distribution. The Trustee may, in its sole discretion, elect
each year on the appropriate Internal Revenue Service form to have each
distribution under this Section 4.05 treated as having been made in the
taxable year of the Trust Fund that ends within sixty-five (65) days
prior to the date on which such distribution is actually made.
ARTICLE V
MONTHLY DEATH BENEFITS
If any Participant shall die while still employed by the
Employer, such deceased Participant's surviving spouse, if any, shall
be entitled to receive monthly death benefits ("Preretirement Surviving
Spouse Death Benefits") under this Plan equal to fifty percent (50%)
of such deceased Participant's average monthly Compensation with
respect to the last thirty-six (36) consecutive months (or, if lesser,
the deceased Participant's entire period of employment with the
Employer) ending on or before his death, less the monthly benefits
payable to such deceased Participant's surviving spouse for that month
under the Company Retirement Plan; provided, however, that the monthly
Preretirement Surviving Spouse Death Benefits shall be reduced, where
applicable, so that they are actuarially equivalent to the monthly
death benefits that would be payable for the life of an individual who
is the same age and sex as the Participant at the date of his death;
provided, further, that the amount of the monthly Preretirement
Surviving Spouse Death Benefits shall be adjusted to a Post-Tax
Adjusted Benefit (as determined in accordance with Section 1.21). For
purposes of determining actuarial equivalency under this Article V, a
seven percent (7%) interest assumption and the 1971 Group Annuity
Mortality Table shall be used. The monthly payments shall begin on the
first (1st) calendar day of the month coinciding with or next following
a Participant's death and shall continue through the month in which the
surviving spouse's death occurs. Notwithstanding anything contained in
this Article V to the contrary, the surviving spouse of a deceased
Participant who immediately before his death met the requirements for
benefits under Section 4.01 shall be entitled to a qualified
preretirement survivor annuity (as such term is defined in Section
205(e) of ERISA) with respect to such deceased Participant's Adjusted
Accrued Benefit in lieu of the monthly death benefits otherwise
provided under this Article if payment in such form would result in a
greater monthly benefit to such surviving spouse.
ARTICLE VI
CONTRIBUTIONS TO THE TRUST FUND
Section 6.01. Initial Company Contribution. On or before
December 10, 1988, the Company contributed to the Trust Fund with
respect to each Participant Account established hereunder as of the
Effective Date an amount equal to the Maximum Benefit Liability of such
Participant Account (determined as of the Effective Date).
Section 6.02. Annual Company Contributions. The Maximum
Benefit Liability for each Participant Account established hereunder
shall be re-computed as of each October 31. If the balance credited
to a Participant Account as of any October 31 is less than the Maximum
Benefit Liability of such Participant Account as of such date after the
allocation of income and the reallocation of excess Participant Account
balances are completed for such Valuation Date under Sections 7.04 and
7.05 respectively, the Company shall within forty (40) calendar days
after such October 31 contribute to the Trust Fund the amount of the
deficiency.
Section 6.03. Additional Company Contributions. The Company
may at any time or from time to time make additional contributions of
cash or other property to the Trust Fund.
Section 6.04. Form of Contribution. The Company's
contributions under Sections 6.01, 6.02 and 6.03 shall be paid directly
by the Company to the Trustee in cash or, at the option of the Company,
in any other form permissible under ERISA and acceptable to the
Trustee; provided, however, that the Company shall be permitted to meet
all or any portion of its funding requirements by transferring to the
Trust Fund insurance policies insuring the life of one (1) or more
Participants in which case the value of the insurance policies shall
be determined based on their respective cash surrender values.
ARTICLE VII
ESTABLISHMENT OF TRUST FUND
Section 7.01. Trust Fund. The Trustee shall hold all assets
contributed to, or earned by it, under the terms and conditions of this
Plan and subject to applicable requirements under ERISA.
Section 7.02. Establishment of Participant Accounts. The
Trustee shall establish and maintain a Participant Account for each
Participant. The Participant Accounts as established hereunder shall
be adjusted as provided in this Plan. Payment of benefits under
Article V and Section 4.01 shall be charged against the Participant
Account of the Participant for whom the payments are attributable. The
maintenance of the Participant Accounts is for accounting purposes
only, and a segregation of Trust Fund assets shall not be required.
Any insurance policies held by the Trust Fund in accordance with this
Plan shall be commingled with the other assets of the Trust Fund and
shall not be credited to the Participant Account of the Participant on
whose life the policy is based.
Section 7.03. Allocation of Contributions. Any contributions
made pursuant to Sections 6.01 and 6.02 of this Plan shall be credited
to the Participants Accounts upon which the contribution was based;
provided, however, that if the amount of the Company contribution is
less than the aggregate required contribution for the Participant
Accounts for which the contribution relates, the amount of the
contribution to be allocated to each Participant Account shall be
determined by multiplying the amount of the contribution by a fraction,
the numerator of which is the required contribution for such
Participant Account at the date of contribution and the denominator of
which is the aggregate required contributions for all Participants
Accounts (for which the contribution relates) at the date of
contribution; provided, further, that if the amount of Company
contribution is greater than the aggregate required contributions for
all Participant Accounts, the amount of the excess shall be allocated
proportionately among all Participant Accounts in accordance with the
respective Maximum Benefit Liabilities of such Participant Accounts as
of the Valuation Date for which the contribution relates.
Section 7.04. Valuations. As of each Valuation Date, the
Trustee shall adjust the Participant Accounts to reflect contributions,
distributions, income earned, expenses not paid by the Company,
increases or decreases in the value of the Trust Fund assets and all
other transactions since the last preceding Valuation Date. Any income
or losses with respect to the Trust Fund and appreciation or
depreciation in Trust Fund assets shall be allocated proportionally
among all Participant Accounts in accordance with the value of such
Participant Accounts at the last preceding Valuation Date; provided,
however, that for purposes of these allocations, each Participant
Account shall be decreased by fifty percent (50%) of any distributions
from such Participant Account under Article V and under Section 4.01
since the last preceding Valuation Date; provided, further, that gains
or losses from the sale or exchange of capital assets shall be treated
as items of income or loss and shall be allocated to Participant
Accounts accordingly.
Section 7.05. Reallocation of Excess Participant Account
Balances. If any Participant Account is liquidated because payments
from such Participant Account have been made in full or because the
Participant on whose behalf the Participant Account was established has
terminated his employment with the Employer before meeting the vesting
requirements described in Section 4.01, the entire remaining balance
in the liquidated Participant Account shall be re-allocated as of such
Valuation Date as follows:
(a) first, to the extent that other Participant
Accounts on such Valuation Date have balances less than their
Maximum Benefit Liabilities, the amount available for
reallocation under this Section shall be re-allocated
proportionally among the Participant Accounts not fully funded
based on the respective amount of the deficiency of each such
Participant Account at such Valuation Date; and
(b) second, any remaining amount to be re-allocated
under this Section shall be allocated proportionally among all
outstanding Participant Accounts based on their Maximum
Benefit Liabilities at such Valuation Date.
Section 7.06. Payment of Expenses. The Trustee shall be
entitled to receive such reasonable annual compensation for its
services as shall be agreed upon between the Company and the Trustee.
The Trustee shall also be entitled to receive payment of all reasonable
and necessary expenses in administering the affairs of the Trust Fund
including, without limitation, all expenses which may be incurred in
connection with the establishment and administration of the Trust Fund,
the employment of such administrative, legal, accounting, actuarial or
other expert and clerical assistance as the Trustee, in its sole
discretion, deems necessary or appropriate in the performance of its
duties, unless the Company elects to pay such compensation or expenses.
Any compensation or expenses for which the Trustee is entitled to
payment or reimbursement under this Section shall be paid out of the
Trust Fund to the fullest extent then permitted under ERISA, unless the
Company elects to pay such compensation or expenses.
Section 7.07. Accounting and Record Keeping. The Trustee
shall keep accurate and detailed accounts of all investments, receipts,
disbursements and other transactions relating to each Participant
Account, and all such records shall be open to inspection and audit at
all reasonable times by any person designated by the Company. As soon
as practicable after each Valuation Date, the Trustee shall file with
the Company a written report for each Participant Account setting forth
all gains or losses (both realized and unrealized) and other
transactions relating to the Trust Fund since the last preceding
Valuation Date. As soon as practicable after each Valuation Date, the
Trustee shall provide each Participant with a statement of the balance
credited to his Participant Account at such Valuation Date.
Section 7.08. Limitation on Liability. As long as the
Trustee has performed its duties and met its obligations pursuant to
the terms and conditions of this Plan, it shall have no liability
whatsoever to pay any claims for benefits or expenses or other payments
authorized hereunder from any Participant Accounts, if the assets of
such Participant Account shall at any time be depleted. Except as
otherwise provided by ERISA, the duties and responsibilities of the
Trustee shall be governed solely by the terms and conditions of this
Plan, and any amendments thereto.
Section 7.09. Consultation and Indemnification. The Trustee
may consult with counsel, who may, but need not, be counsel to the
Company, and the Trustee shall not be deemed imprudent by taking or
refraining from taking any action in accordance with the opinion of
such counsel. The Company agrees, to the fullest extent then permitted
by law, to indemnify and hold the Trustee harmless from and against any
liability which the Trustee may incur in the administration of the
Trust Fund, unless such liability arises from the Trustee's willful
breach of the provisions of this Plan.
Section 7.10. Litigation. The Trustee shall not be required
to commence or defend any litigation or dispute arising in connection
with this Plan, unless the Trustee is first indemnified by the Company
against its prospective costs, expenses and liability, and the Company
hereby agrees to indemnify the Trustee for any such costs, expenses and
liability.
Section 7.11. Waiver of Bond. The Trustee shall not be
required to give bond or any other security for the faithful
performance of its duties under this Plan, except such as may be
required by a law which prohibits the waiver thereof.
ARTICLE VIII
INVESTMENT OF TRUST FUND
Section 8.01. Management of Trust Fund and Appointment of
Investment Manager. The Trust Fund shall be managed, invested, and
reinvested by the Trustee, subject, however, to the right of the
Company to designate in writing an investment manager in accordance
with Section 402(c)(3) of ERISA to manage or invest or reinvest the
Trust Fund or any part thereof, in which event the Trustee shall not
be liable for the acts or omissions of such investment manager or have
any authority to manage or invest the assets of the Trust Fund which
are subject to management by such investment manager until said
investment manager is dismissed by the Company. Any such investment
manager so designated shall have the same powers and duties with
respect to the management and investment of that portion of the Trust
Fund managed by such investment manager as those granted to the Trustee
hereunder, except to the extent otherwise provided in the instrument
designating such investment manager. Notwithstanding anything contained
in this Plan to the contrary, the Company shall have the right to
direct the Trustee to take the following action with respect to
insurance policies:
(a) to maintain or hold insurance policies which are
transferred to the Trust Fund by the Company;
(b) to apply Company contributions to the Trust Fund
towards the purchase of insurance policies or the payment of
premiums with respect to insurance policies transferred to, or
purchased by, the Trust Fund; or
(c) to convert to paid-up form, to surrender for the
cash value thereof or to terminate any insurance policies held
by the Trust Fund.
Section 8.02. Powers of Trustee. Except as otherwise
provided by ERISA, the Trustee shall have the following powers in
investing the Trust Fund:
(a) To invest or reinvest all or any part of the Trust
Fund in any real or personal property as the Trustee may deem
advisable, including but not limited to:
(i) any securities normally traded by and
obtainable through a stockbroker or "over the counter"
dealer or on a recognized exchange;
(ii) any shares of an investment company
registered under the Investment Company Act of 1940, as
amended;
(iii) any insurance contracts or annuities;
(iv) the deposit of all or any part of the Trust
Fund with an insurer for the payment of interest
thereon;
(v) any securities issued or guaranteed by the
United States of America or any of the instrumentalities
or states thereof or of any county, city, town, village,
school district or other political subdivision of any of
said states;
(vi) certificates of deposit, time deposits or
savings accounts including, but not limited to, those
issued by its own departments or divisions or related
financial institutions;
(vii) commercial paper, money market funds,
treasury bills and similar investments; and
(viii) any combination of (i) through (vii) above
and, except as otherwise provided by ERISA, without
being restricted by any statute or rule of law governing
the investments in which a trustee may invest funds held
by it.
(b) To sell or exchange any part of the assets of the
Trust Fund.
(c) To vote in person or by proxy the securities and
investment company shares which its holds as Trustee and to
delegate such power.
(d) To consent to or participate in dissolutions,
reorganizations, consolidations, mergers, sales, transfers, or
other changes in securities and investment company shares
which it holds as Trustee, and, in such connection, to
delegate its powers and to pay all assessments, subscriptions,
and other charges relating thereto.
(e) To exercise all rights, privileges, options and
elections with respect to any insurance policies and to pay
the premiums thereon; provided, however, that any action taken
by the Trustee with respect to any such insurance contracts,
including the payment of premiums, shall be subject to the
approval of the Company.
(f) To retain in cash and keep unproductive of income
such amount as the Trustee may deem advisable in its sole
discretion, and the Trustee shall not be required to pay
interest on such cash balances or on cash in its hands pending
investment.
(g) To sell, exchange, convey or transfer any property
at any time held by the Trustee upon such terms as it may deem
advisable, and no person dealing with the Trustee shall be
bound to see to the application of the purchase money or to
inquire into the propriety of any such transaction.
(h) To enter into, compromise, compound and settle any
debt or obligation due to or from the Trustee and to reduce
the rate of interest on, to extend or otherwise modify or to
foreclose upon, default or otherwise enforce any such
obligation.
(i) To cause any bonds, stocks or other securities
held by the Trustee to be registered in or transferred into
its name as Trustee or the name of its nominee or nominees or
to hold them unregistered or in form permitting
transferability by delivery, but at all times with full
responsibility therefor as Trustee.
(j) To manage, administer, operate, repair, improve
and mortgage or lease for any number of years, regardless of
any restrictions on leases made by trustees, or otherwise to
deal with any real property or interest therein; to renew or
extend or to participate in the renewal or extension of any
mortgage, and to agree to the reduction in the interest on any
mortgage or other modification or change in terms of any
mortgage or guarantee thereof in any manner and upon such
terms as may be deemed advisable; to waive any defaults
whether in performance of any covenant or condition of any
mortgage or in the performance of any guarantee or to enforce
any such default in such manner as may be deemed advisable,
including the exercise and enforcement of any and all rights
of foreclosure.
(k) To make, execute and deliver as Trustee any and
all deeds, leases, mortgages, advances, contracts, waivers,
releases or other instruments in writing necessary or proper
in the employment of any of the foregoing powers.
(l) To settle, compromise or abandon all claims and
demands in favor of or against the Trust Fund.
(m) To exercise, generally, any of the powers which an
individual owner might exercise in connection with any
property, either real, personal or mixed, held by the Trust
Fund, and to do all other acts which the Trustee may deem
necessary or proper to carry out any of the powers set forth
in this Article or otherwise in the best interests of the
Trust Fund and the Participants.
ARTICLE IX
RESIGNATION, REMOVAL, AND APPOINTMENT
OF SUCCESSOR TRUSTEE
Section 9.01. Resignation. The Trustee may resign upon sixty
(60) calendar days' prior notice in writing to the Company. Such prior
written notice may be waived by the Company.
Section 9.02. Removal. The Company may remove the Trustee,
with or without cause, upon sixty (60) calendar days' prior written
notice to the Trustee. Such prior written notice may be waived by the
Trustee.
Section 9.03. Successor Trustee. Upon the resignation or
removal of the Trustee or inability of the Trustee for any reason to
perform its duties hereunder, the Company shall promptly appoint a
successor Trustee, which shall be a national bank or a state bank
having its deposits insured by the Federal Deposit Insurance
Corporation, having capital and surplus of at least fifty million
dollars ($50,000,000). Any such successor Trustee shall have the same
powers and duties as those conferred upon the initial Trustee hereunder
and shall evidence its acceptance of such appointment by written
instrument addressed to the Company. Upon written notice from the
Company of the acceptance of such appointment by the successor Trustee,
the Trustee shall promptly assign, transfer and pay over the Trust Fund
to such successor Trustee; provided, however, that the Trustee may
reserve such sum of money as it shall deem advisable for payment of its
fees and expenses in connection with the settlement of its account or
otherwise.
Section 9.04. Accounting by Trustee. Within sixty (60)
calendar days after the date or resignation or removal of the Trustee,
the Trustee shall furnish a written accounting of the Trust Fund with
respect to the period since the last Valuation Date to the Company, and
to the successor Trustee, which report shall set forth all investments,
receipts, disbursements, and other transactions during such period.
Section 9.05. Merger or Consolidation of Trustee. If the
Trustee shall at any time merge or consolidate with or shall sell or
transfer all or substantially all of its assets and business to another
corporation, state or federal, the corporation resulting therefrom
shall be Trustee hereof in lieu of its predecessor in interest without
the execution of any instrument and without action on the part of the
Company; provided, however, that such successor corporation shall be
qualified under the laws of the State of Indiana to undertake the
duties of the Trustee hereunder.
ARTICLE X
NON-DIVERSION OF TRUST FUND
Except as otherwise expressly provided in this Plan and then
permitted by ERISA, the Company shall not have the right or power to
direct the Trustee to return all or any part of the Trust Fund to the
Company or to divert to others any of the assets held in the Trust Fund
until all Accrued Benefits or Preretirement Surviving Spouse Death
Benefits under this Plan have been paid in full or satisfied by the
purchase and delivery of single premium non-transferable deferred
annuity contracts.
ARTICLE XI
ADMINISTRATION
Section 11.01. Delegation of Responsibility. The
Administrator may delegate duties involved in the administration of
this Plan to the Compensation Committee or to the Executive Committee
of the Board or to such other person or persons whose services are
deemed necessary or convenient. However, the ultimate responsibility
for the administration of this Plan shall remain with the
Administrator.
Section 11.02. Construction of Plan. The Compensation
Committee shall have the power to construe this Plan and to determine
all questions of fact or law arising under it. It may correct any
defect, supply any omission or reconcile any inconsistency in this Plan
in such manner and to such extent as it may deem expedient. Except as
otherwise permitted by ERISA, all acts and determinations of the
Compensation Committee shall be final and conclusive on the
Participants and on the surviving spouses of any deceased Participants
and shall not be subject to appeal or review except in those instances
where the Compensation Committee, in its sole discretion, refers such
matter to the Board.
Section 11.03. Tax Information to Participants. The
Administrator shall timely provide necessary tax information to the
Plan Participants relating to their participation in this Plan to
enable the Participants to report properly any income required to be
recognized by the Participants.
Section 11.04. Determinations. The Company shall make all
determinations as to the right of any person to a benefit. Any denial
by the Company of a claim for benefits under this Plan by a Participant
or by any deceased Participant's surviving spouse shall be stated in
writing by the Company and delivered or mailed within ninety (90)
calendar days to the Participant or to such deceased Participant's
surviving spouse; and such notice shall comply with all requirements
imposed by ERISA and shall set forth the specific reasons for the
denial, written to the best of the Company's ability in a manner that
may be understood without legal or actuarial counsel. In addition, the
Company shall afford a reasonable opportunity to any Participant or to
such deceased Participant's surviving spouse whose claim for benefits
has been denied for a review of its decision denying the claim in
accordance with Section 503 of ERISA.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Amendment or Termination of Plan. This Plan
may be amended, modified, supplemented in any respect or terminated by
Board action if the continued operation of this Plan is deemed
imprudent by the Board as a result of changes in the law or other
circumstances outside of the control of the Company; provided, however,
that no amendment, modification, supplement or termination of this Plan
shall have the effect of:
(a) discontinuing, reducing or eliminating:
(1) the Post-Tax Adjusted Benefit of a
Participant or, if applicable, his surviving spouse, or
(2) any optional form of distribution permitted
under this Plan;
(b) substantially increasing the duties of the Trustee
without its prior written consent;
(c) permitting a reversion of Trust Fund assets to the
Company before the benefits provided under this Plan have been
paid in full or otherwise satisfied as provided in Article X;
or
(d) discharging the Company from its obligation to
make the Tax Distribution payments provided under Section
4.03.
Section 12.02. Right to Merge Plan. The Company reserves the
right, by action of its Board, to merge or to consolidate this Plan
with, or to transfer the assets or liabilities of this Plan to, any
other similar retirement plan at any time, except that no such merger,
consolidation or transfer shall be authorized unless each Participant
would receive a benefit immediately after the merger, consolidation or
transfer (if the merged, consolidated or transferred plan then
terminated) equal to or greater than the benefit to which he would have
been entitled immediately before the merger, consolidation or transfer
(if this Plan then terminated).
Section 12.03. Successors and Assigns. This Plan shall be
binding upon the successors and assigns of the Company.
Section 12.04. Choice of Law. Except as otherwise required
by ERISA, this Plan shall be construed and interpreted pursuant to, and
in accordance with, the laws of the State of Indiana.
Section 12.05. No Employment Contract. This Plan shall not
be construed as an agreement, consideration or inducement of employment
or as affecting in any manner the rights or obligations of the Employer
or of any Participant to continue or to terminate the employment
relationship any time.
Section 12.06. Non-Alienation. Neither a Participant nor his
spouse shall have any right to anticipate, to pledge, to alienate or
to assign any rights under this Plan, and any effort to do so shall be
null and void. The monthly benefits payable under this Plan shall be
exempt from the claims of creditors or other claimants and from all
orders, decrees, levies and executions and any other legal process to
the fullest extent then permitted by law. The preceding sentences
shall also apply to the creation, assignment or recognition of a right
to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a
qualified domestic relations order as defined in Section 206(d) of
ERISA.
Section 12.07. Gender and Number. Words in the masculine
gender shall be construed to include the feminine gender in all cases
where appropriate; words in the singular or plural shall be construed
as being in the plural or singular in all cases where appropriate.
Section 12.08. Headings. The headings in this Plan are
solely for convenience of reference and shall not affect its
interpretation.
Section 12.09. Payment to Incompetents. If any Participant
or surviving spouse of a deceased Participant, entitled to benefits
under this Plan is, in the judgment of the Company, legally, physically
or mentally incapable of personally receiving and receipting for any
payment due hereunder, payment may be made to the guardian or other
legal representative of such Participant or such surviving spouse.
Section 12.10. Illegal or Invalid Provisions. If any
provision of this Plan or the application of any such provision to any
person or circumstance shall be invalid under any law of the United
States of America or of any State or any political subdivision thereof,
neither the application of such provision to persons or circumstances
other than those as to which such provision is invalid nor any other
provisions of this Plan shall be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment and Restatement of the Plan to be signed on this 2nd day
of February, 1996 and to be effective as of March 1, 1996.
The terms of this Amendment and Restatement only apply to Employees who
have completed at least one (1) Hour of Service on or after March 1,
1996.
INDIANAPOLIS POWER & LIGHT
COMPANY
By: /s/ John R. Hodowal
John R. Hodowal, Chairman
of the Board and Chief
Executive Officer
ATTEST:
By: /s/ Bryan G. Tabler
Bryan G. Tabler
Secretary
EXHIBIT 10.22
Indianapolis Power & Light Company
DATE: May 31, 1995
TO: See Distribution Below AT: Various
Locations
FROM: Mr. Ramon L. Humke AT: Electric
Building
SUBJECT: 1995 MANAGEMENT INCENTIVE PROGRAM
DISTRIBUTION:
Officers Superintendents
Managers Assistant Superintendents
Directors Division Supervisors
The 1995 Management Incentive Program (MIP) is
established to provide additional incentive and
recognition to individuals who make above average
contributions to the achievement of organization
and corporate objectives.
Awards will be based on a year-end evaluation of
the Company's performance and of each
participant's performance during the year,
directly keyed to organization and department
objectives through specifically documented
Performance Management "Expectations" and
"Objectives" for that participant. The threshold
standard is:
IPL Net Income $83.6 Million
This threshold performance standard must be met
for bonus qualification.
The Senior Vice Presidents, and Vice Presidents of
Human Resources and Corporate Affairs, will ensure
that individual awards are commensurate with
performance and that the total of awards does not
exceed their organization's allocation of the
budget for this program. The Company's
compensation philosophy is to establish base
salaries at market value; therefore participant
awards under this program are for demonstrable and
measurable contributions to organization and
corporate objectives and performance. Guidelines
for individual awards, granted in $500 increments,
are as follows:
Award Range
Participant's Contribution if Threshold is met
Above Expected Up to $7,500
At Expected Up to $5,000
Below Expected 0%
The evaluator should be able to identify
demonstrable and measurable results as the
criteria for recommending an award for the
participant. Awards are not automatic and not all
participants may receive an award.
The Management Incentive Program participants for
1995 include supervisors from the division head
level to the manager level. Special requests for
inclusion in the program need to be submitted for
approval to the Vice President of Human Resources.
Documentation supporting inclusion in the program
is required. In addition, at year-end,
Organizational Heads may recommend other
associates who have specific work assignments that
significantly affect the Corporate Objectives.
If a participant retires, becomes disabled, or
dies during 1995, or if a person becomes eligible
after the year begins, any award payable to such
person shall be prorated.
Additionally, the Big Dollar Award Program for
other associates who deserve special recognition
for making an extraordinary contribution to
Corporate Objectives or organizational assignments
is being continued. A formal Big Dollar Award
Program description is attached.
/s/ R.L. Humke
RLH:dlr
Attachment
<PAGE>
Program Name: Big Dollar Award Program
Purpose: The program exists to provide an
immediate cash reward to an
associate who makes significant
contribution which will have a
substantial positive impact on the
Company.
Eligibility: Any non-officer associate who is
not part of the Management
Incentive Program is potentially
eligible to receive a reward under
this program.
Award Basis: Associates whose recommendations,
acts, or achievements are outside
their normal work requirements
should be considered for awards.
Extraordinary contributions to
Corporate Objectives and
organization assignments are the
principal criteria for these
awards. Superior work on normal
work assignments alone does not
qualify an individual for an award.
More efficient operations, greater
productivity, better customer
service, reduced costs, higher
earnings, and enhanced public image
are examples of results which would
warrant consideration for an award.
Award Amount: The amount of the award will depend
upon the significance and long-term
benefit to the Company. As a
general rule, awards should be no
less than $200, after taxes.
Process: All associates and supervisors are
asked to identify recommendations,
acts, or achievements of other
associates which should be
considered for an award.
Descriptions of such acts should be
directed to the organization
officer who will assess the
achievement and, if warranted,
forward a recommendation through
the appropriate senior officer to
the President. Recommendations
should include suggested award
amounts. The President will
approve and present these special
awards as these extraordinary
contributions are identified and
evaluated throughout the year. The
intent is that an award follow
these acts or achievements as
closely as practical. Therefore,
recommendations for awards should
be expedited. When possible, Mr.
Humke will present the award to the
associate personally.
Administration: The Vice President, Human
Resources, will administer
this program, with the
assistance of the Controller.
All checks will represent the
award, less necessary tax
withholding. The organization
officer should contact
Corporate Communications to
arrange appropriate publicity.
<PAGE>
1995 MANAGEMENT INCENTIVE PROGRAM
The purposes of the program are to focus attention
on key IPL performance standards, to improve
productivity and to control costs by attaining the
goals set out in the Corporate Objectives while
maintaining operating costs within or less than
those budgeted for 1995. The program cost is
estimated to be $560,000.
The Program also includes a separate fund for the
payment of bonuses to persons not within the group
identified above who deserve recognition for
extraordinary contributions to the Company. An
additional $48,500 is estimated for this separate
fund.
Bonus awards will depend upon the performance of
the participants in meeting specific objectives
and assignments. Awards are not automatic; some
participants may not receive an award. No bonus
payments will be made unless the 1995 IPL Net
Income thresholds is met.
Performance Bonus
Above Expected $500 to $7,500
At Expected $500 to $5,000
Below Expected 0
If a participant dies, retires or becomes disabled
during the Program Year, or if a person becomes
eligible to participate in the Program after the
Program Year begins, any bonus shall be prorated
based on the number of months such person was
eligible to participate in the Program.
Bonus awards will be approved by Mr. Humke and Mr.
Hodowal, based upon the recommendations of the
Senior Officers for their respective
organizational participants. Progress in meeting
objectives will be reviewed with each participant
periodically throughout the year.
EXHIBIT 10.23
FORM OF
TERMINATION BENEFITS AGREEMENT
AS AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 1993
[See Schedule A attached hereto for a list of parties to,
and dates of, the Termination Benefits Agreements]
This Agreement, dated as of January 1, 1993, by and among IPALCO
ENTERPRISES, INC., an Indiana corporation having its principal
executive offices at 25 Monument Circle, Indianapolis, Indiana 46204
("IPALCO"), INDIANAPOLIS POWER & LIGHT COMPANY, an Indiana corporation
having its principal executive offices at 25 Monument Circle,
Indianapolis, Indiana 46204 ("IPL") (both IPALCO and IPL being
collectively referred to herein as the "Company"), and , an Indiana
resident whose mailing address is (the "Executive").
R E C I T A L S
The following facts are true:
A. The Executive is serving the Company as a key executive
officer, and is expected to continue to make a major contribution to
the profitability, growth, and financial strength of the Company.
B. The Company considers the continued services of the Executive
to be in the best interests of the Company and its shareholders, and
desires to assure itself of the availability of such continued services
in the future on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt to
obtain control of the Company.
C. The Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him with
income security upon the terms and subject to the conditions contained
herein if his employment is terminated by the Company without cause or
if he voluntarily terminates his employment for good reason.
D. If the Company and Executive entered into one or more
Termination Benefits Agreements prior to this Agreement (the "Prior
Termination Benefits Agreements"), this Agreement is intended to
supersede and replace the Prior Termination Benefits Agreements.
A G R E E M E N T
In consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Company and the Executive agree
as follows:
1. Undertaking. The Company agrees to pay to the Executive the
termination benefits specified in paragraph 2 hereof if (a) control of
IPALCO is acquired (as defined in paragraph 3(a) hereof) during the
term of this Agreement (as described in paragraph 5 hereof) and (b)
within three (3) years after the acquisition of control occurs (i) the
Company terminates the employment of the Executive for any reason other
than Cause (as defined in paragraph 3(b) hereof), death, the
Executive's attainment of age sixty-five (65) or total and permanent
disability, or (ii) the Executive voluntarily terminates his employment
for Good Reason (as defined in paragraph 3(c) hereof).
2. Termination Benefits. If the Executive is entitled to
termination benefits pursuant to paragraph 1 hereof, the Company agrees
to pay to the Executive as termination benefits in a lump-sum payment
within five (5) calendar days of the termination of the Executive's
employment an amount to be computed by multiplying (i) the Executive's
average annual compensation (as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code")) payable by the Company
which was includable in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or immediately
before the date on which control of the Company is acquired (or such
portion of such period during which the Executive was an employee of
the Company), by (ii) two hundred ninety-nine and ninety-nine one
hundredths percent (299.99%). For purposes of this Agreement,
employment and compensation paid by any direct or indirect subsidiary
of the Company will be deemed to be employment and compensation paid
by the Company.
3. Definitions.
(a) As used in this Agreement, the "acquisition of
control" means:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares
of common stock of IPALCO (the "Outstanding IPALCO
Common Stock") or (B) the combined voting power of the
then outstanding voting securities of IPALCO entitled
to vote generally in the election of directors (the
"Outstanding IPALCO Voting Securities"); provided,
however, that the following acquisitions shall not
constitute an acquisition of control: (A) any
acquisition directly from IPALCO (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any acquisition by IPALCO, (C) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by IPALCO, IPL or any
corporation controlled by IPALCO or (D) any acquisition
by any corporation pursuant to a reorganization, merger
or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in
clauses (A), (B) and (C) of subsection (iii) of this
paragraph 3(a) are satisfied;
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of IPALCO (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of IPALCO
(the "Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose
election, or nomination for election by IPALCO's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial
assumption of office occurs as a result of either an
actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(iii) Approval by the shareholders of IPALCO of a
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (A) more than sixty percent (60%) of,
respectively, the then outstanding shares of common
stock of the corporation resulting from such
reorganization, merger or consolidation and the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Outstanding IPALCO Common Stock and Outstanding IPALCO
Voting Securities immediately prior to such
reorganization, merger or consolidation in
substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding IPALCO Stock and
Outstanding IPALCO Voting Securities, as the case may
be, (B) no Person (excluding IPALCO, any employee
benefit plan or related trust of IPALCO, IPL or such
corporation resulting from such reorganization, merger
or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty percent
(20%) or more of the Outstanding IPALCO Common Stock or
Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty
percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
and (C) at least a majority of the members of the board
of directors of the corporation resulting from such
reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization,
merger or consolidation;
(iv) Approval by the shareholders of IPALCO of (A)
a complete liquidation or dissolution of IPALCO or (B)
the sale or other disposition of all or substantially
all of the assets of IPALCO, other than to a
corporation, with respect to which following such sale
or other disposition (1) more than sixty percent (60%)
of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding IPALCO Common
Stock and Outstanding IPALCO Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of
the Outstanding IPALCO Common Stock and Outstanding
IPALCO Voting Securities, as the case may be, (2) no
Person (excluding IPALCO and any employee benefit plan
or related trust of IPALCO, IPL or such corporation and
any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding IPALCO
Common Stock or Outstanding IPALCO Voting Securities,
as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors and (3) at least a majority of the members
of the board of directors of such corporation were
members of the Incumbent Board at the time of the
execution of the initial agreement or action of the
Board providing for such sale or other disposition of
assets of IPALCO; or
(v) The closing, as defined in the documents
relating to, or as evidenced by a certificate of any
state or federal governmental authority in connection
with, a transaction approval of which by the
shareholders of IPALCO would constitute an "acquisition
of control" under subsection (iii) or (iv) of this
section 3(a) of this Agreement.
Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated
before an "acquisition of control" as defined in this section
3(a) and the Executive reasonably demonstrates that such
termination (i) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated
to effect an "acquisition of control" and who effectuates an
"acquisition of control" (a "Third Party") or (ii) otherwise
occurred in connection with, or in anticipation of, an
"acquisition of control" which actually occurs, then for all
purposes of this Agreement, the date of an "acquisition of
control" with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
(b) As used in this Agreement, the term "Cause" means
fraud, dishonesty, theft of corporate assets, or other gross
misconduct by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to him
a copy of a resolution duly adopted by the affirmative vote
of not less than a majority of the entire membership of the
Board at a meeting of the Board called and held for the
purpose (after reasonable notice to him and an opportunity
for him, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board
the Executive was guilty of conduct set forth above in the
first sentence of the subsection and specifying the
particulars thereof in detail.
(c) As used in this Agreement, the term "Good Reason"
means, without the Executive's written consent, (i) a
demotion in the Executive's status, position or
responsibilities which, in his reasonable judgment, does not
represent a promotion from his status, position or
responsibilities as in effect immediately prior to the change
in control; (ii) the assignment to the Executive of any
duties or responsibilities which, in his reasonable judgment,
are inconsistent with such status, position or
responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such positions,
except in connection with the termination of his employment
for total and permanent disability, death or Cause or by him
other than for Good Reason; (iii) a reduction by the Company
in the Executive's base salary as in effect on the date
hereof or as the same may be increased from time to time
during the term of this Agreement or the Company's failure to
increase (within twelve (12) months of the Executive's last
increase in base salary) the Executive's base salary after a
change in control in an amount which at least equals, on a
percentage basis, the average percentage increase in base
salary for all executive and senior officers of the Company
effected in the preceding twelve (12) months; (iv) the
relocation of the principal executive offices of IPALCO or
IPL, whichever entity on behalf of which the Executive
performs a principal function of that entity as part of his
employment services, to a location outside the Indianapolis,
Indiana metropolitan area or the Company's requiring him to
be based at any place other than the location at which he
performed his duties prior to a change in control, except for
required travel on the Company's business to an extent
substantially consistent with his business travel obligations
at the time of a change in control; (v) the failure by the
Company to continue in effect any incentive, bonus or other
compensation plan in which the Executive participates,
including but not limited to the Company's stock option and
restricted stock plans, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan), with
which he has consented, has been made with respect to such
plan in connection with the change in control, or the failure
by the Company to continue his participation therein, or any
action by the Company which would directly or indirectly
materially reduce his participation therein; (vi) the failure
by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by him or to
which he was entitled under any of the Company's pension,
profit sharing, life insurance, medical, dental, health and
accident, or disability plans in which he was participating
at the time of a change in control, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him or to which he was entitled at
the time of the change in control, or the failure by the
Company to provide him with the number of paid vacation and
sick leave days to which he is entitled on the basis of years
of service with the Company in accordance with the Company's
normal vacation policy in effect on the date hereof; (vii)
the failure of the Company to obtain a satisfactory agreement
from any successor or assign of the Company to assume and
agree to perform this Agreement; (viii) any purported
termination of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of paragraph 4(c) hereof (and, if applicable,
paragraph 3(b) hereof); and for purposes of this Agreement,
no such purported termination shall be effective; or (ix) any
request by the Company that the Executive participate in an
unlawful act or take any action constituting a breach of the
Executive's professional standard of conduct.
Notwithstanding anything in this paragraph 3(c) to the
contrary, the Executive's right to terminate his employment
pursuant to this paragraph 3(c) shall not be affected by his
incapacity due to physical or mental illness.
4. Additional Provisions.
(a) Enforcement of Agreement. The Company is aware
that upon the occurrence of a change in control the Board of
Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to
cause the Company to institute, or may institute, litigation
seeking to have this Agreement declared unenforceable, or may
take or attempt to take other action to deny the Executive
the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the
Executive not be required to incur the expenses associated
with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and
expense of such legal action or settlement would
substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if
following a change in control it should appear to the
Executive that the Company has failed to comply with any of
its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation
or other legal action designed to deny, diminish or to
recover from the Executive the benefits entitled to be
provided to the Executive hereunder and that the Executive
has complied with all of his obligations under this
Agreement, the Company irrevocably authorizes the Executive
from time to time to retain counsel of his choice, at the
expense of the Company as provided in this paragraph 4(a), to
represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether such
action is by or against the Company or any director, officer,
shareholder, or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to the Executive
entering into an attorney-client relationship with such
counsel, and in that connection the Company and the Executive
agree that a confidential relationship shall exist between
the Executive and such counsel. The reasonable fees and
expenses of counsel selected from time to time by the
Executive as hereinabove provided shall be paid or reimbursed
to the Executive by the Company on a regular, periodic basis
upon presentation by the Executive of a statement or
statements prepared by such counsel in accordance with its
customary practices, up to a maximum aggregate amount of
$500,000. Any legal expenses incurred by the Company by
reason of any dispute between the parties as to
enforceability of or the terms contained in this Agreement,
notwithstanding the outcome of any such dispute, shall be the
sole responsibility of the Company, and the Company shall not
take any action to seek reimbursement from the Executive for
such expenses.
(b) Severance Pay; No Duty to Mitigate. The amounts
payable to the Executive under this Agreement shall not be
treated as damages but as severance compensation to which the
Executive is entitled by reason of termination of his
employment in the circumstances contemplated by this
Agreement. The Company shall not be entitled to set off
against the amounts payable to the Executive any amounts
earned by the Executive in other employment after termination
of his employment with the Company, or any amounts which
might have been earned by the Executive in other employment
had he sought such other employment.
(c) Notice of Termination. Any purported termination
by the Company or by the Executive shall be communicated by
written Notice of Termination to the other party hereto in
accordance with paragraph 4(k) hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis
for termination of his employment under the provision so
indicated. For purposes of this Agreement, no such purported
termination shall be effective without such Notice of
Termination.
(d) Internal Revenue Code. Anything in this Agreement
to the contrary notwithstanding, in the event that Deloitte
& Touche determines that any payment by the Company to or for
the benefit of the Executive pursuant to the terms of this
Agreement would be nondeductible by the Company for federal
income tax purposes because of Section 280G of the Code, then
the amount payable to or for the benefit of the Executive
pursuant to this Agreement shall be reduced (but not below
zero) to the maximum amount payable without causing the
payment to be nondeductible by the Company because of Section
280G of the Code. Such determination by Deloitte & Touche
shall be conclusive and binding upon the parties.
(e) Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective executors, administrators, heirs, personal
representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or
transferred by either party hereto, any beneficiary, or any
other person, nor be subject to alienation, anticipation,
sale, pledge, encumbrance, execution, levy, or other legal
process of any kind against the Executive, his beneficiary or
any other person. Notwithstanding the foregoing, the Company
will assign this Agreement to any corporation or other
business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation,
sale of assets, or otherwise and shall obtain the assumption
of this Agreement by such successor.
<PAGE>
(f) Entire Agreement. This Agreement contains the
entire agreement between the parties with respect to the
subject matter hereof. All representations, promises, and
prior or contemporaneous understandings among the parties
with respect to the subject matter hereof, including any
Prior Termination Benefits Agreements, are merged into and
expressed in this Agreement, and any and all prior agreements
between the parties with respect to the subject matter hereof
are hereby cancelled.
(g) Amendment. This Agreement shall not be amended,
modified, or supplemented without the written agreement of
the parties at the time of such amendment, modification, or
supplement.
(h) Governing Law. This Agreement shall be governed
by and subject to the laws of the State of Indiana.
(i) Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not
affect the other provisions, and this Agreement shall be
construed in all respects as if such invalid or unenforceable
provision had not been contained herein.
(j) Captions. The captions in this Agreement are for
convenience and identification purposes only, are not an
integral part of this Agreement, and are not to be considered
in the interpretation of any part hereof.
(k) Notices. Except as otherwise specifically
provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or sent
by registered or certified mail, postage prepaid, addressed
as set forth above, or to such other address as shall be
furnished in writing by any party to the others.
(l) Waivers. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto
of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other
party shall be deemed to be a valid waiver unless such waiver
is in writing or, even if in writing, shall be deemed to be
a waiver of a subsequent breach of such condition or
provision or a waiver of a similar or dissimilar provision or
condition at the same or at any prior or subsequent time.
(m) Gender. The use of the masculine gender
throughout this Agreement is solely for convenience; thus, in
cases where the Executive is female, the feminine gender
shall be deemed to be used in place of the masculine gender.
5. Term of this Agreement. This Agreement shall remain in effect
until January 1, 1998 or until the expiration of any extension thereof.
The term of this Agreement shall be automatically extended for one (1)
year periods without further action of the parties as of January 1,
1994 and each succeeding January 1 thereafter, unless IPALCO shall have
served written notice to the Executive prior to January 1, 1994 or
prior to January 1 of each succeeding year, as the case may be, of its
intention that the Agreement shall terminate at the end of the five (5)
year period that begins with the January 1 following the date of such
written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
IPALCO ENTERPRISES, INC.
By:
Attest:
INDIANAPOLIS POWER & LIGHT COMPANY
By:
Attest:
<PAGE>
SCHEDULE A
TO
TERMINATION BENEFITS AGREEMENT
As Amended and Restated, Effective January 1, 1993
By and among IPALCO Enterprises, Inc., Mid-America Capital Resources,
Inc. and the following individuals:
Joseph A. Gustin
David C. Kiesel
Daniel L. Short
William A. Tracy
Kevin P. Greisl (effective December 25, 1995)
Edward J. Ryan (effective May 1, 1995)
By and among IPALCO Enterprises, Inc., Indianapolis Power & Light
Company and the following individuals:
Michael G. Banta (effective July 1, 1995)
John C. Berlier, Jr.
John R. Brehm
Max Califar
Ralph E. Canter (effective May 1, 1995)
John R. Hodowal
Ramon L. Humke
Donald W. Knight
David J. McCarthy (effective January 1, 1996)
Robert A. McKnight, Jr.
Steven L. Meyer
Stephen J. Plunkett
Robert W. Rawlings
Joseph A. Slash
Clark L. Snyder
Thomas A. Steiner
Bryan G. Tabler (effective as of October 1, 1994)
Gerald D. Waltz
John D. Wilson
Wendy V. Yerkes (effective May 1, 1995)
By and between IPALCO Enterprises, Inc. and the following individuals:
Maurice O. Edmonds
N. Stuart Grauel
Susan Hanafee (effective May 1, 1995)
By and among IPALCO Enterprises, Inc. and Store Heat and Produce
Energy, Inc. and the following individual:
Michael J. Farmer (effective as of February 6, 1995)
<TABLE>
INDIANAPOLIS POWER & LIGHT COMPANY EXHIBIT 12.1
Ratio of Earnings to Fixed Charges
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1995 1994 1993
--------- --------- ---------
(Thousands of Dollars)
<S> <C> <C> <C>
Earnings, as defined:
Net income $106,273 $103,823 $102,766
Income taxes 53,568 54,720 59,273
Fixed charges, as below 51,778 48,302 44,655
--------- --------- ---------
Total earnings, as defined $211,619 $206,845 $206,694
========= ========= =========
Fixed charges, as defined:
Interest charges $ 51,596 $ 48,164 $ 44,491
Rental interest factor 182 138 164
--------- --------- ---------
Total fixed charges, as defined $ 51,778 $ 48,302 $ 44,655
========= ========= =========
Ratio of earnings to fixed charges 4.09 4.28 4.63
========= ========= =========
</TABLE>
Exhibit 21.1 List of Subsidiaries
--------------------
State in
Which
Subsidiary of Indianapolis Power & Light Company (IPL) Organized
Property and Land Company, Inc. Indiana
IPL is wholly owned by IPALCO Enterprises, Inc. as of December 31,
1995. The subsidiary listed for IPL is wholly owned.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-51737 and 33-52489 both on Form S-3 of Indianapolis Power & Light Company
and Registration Statement No. 2-88352 on Form S-8 of IPALCO Enterprises, Inc.
of our report dated January 26, 1996, appearing in this Annual Report on
Form 10-K of Indianapolis Power & Light Company for the year ended
December 31, 1995.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Indianapolis, Indiana
March 15, 1996
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000050217
<NAME> INDIANAPOLIS POWER & LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,792,007
<OTHER-PROPERTY-AND-INVEST> 4,454
<TOTAL-CURRENT-ASSETS> 157,673
<TOTAL-DEFERRED-CHARGES> 154,682
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,108,816
<COMMON> 324,537
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 421,229
<TOTAL-COMMON-STOCKHOLDERS-EQ> 747,129
0
51,898
<LONG-TERM-DEBT-NET> 669,000
<SHORT-TERM-NOTES> 65,022
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 15,150
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 560,617
<TOT-CAPITALIZATION-AND-LIAB> 2,108,816
<GROSS-OPERATING-REVENUE> 709,206
<INCOME-TAX-EXPENSE> 53,975
<OTHER-OPERATING-EXPENSES> 507,119
<TOTAL-OPERATING-EXPENSES> 561,094
<OPERATING-INCOME-LOSS> 148,112
<OTHER-INCOME-NET> 4,390
<INCOME-BEFORE-INTEREST-EXPEN> 152,502
<TOTAL-INTEREST-EXPENSE> 46,229
<NET-INCOME> 106,273
3,182
<EARNINGS-AVAILABLE-FOR-COMM> 103,091
<COMMON-STOCK-DIVIDENDS> 81,289
<TOTAL-INTEREST-ON-BONDS> 45,656
<CASH-FLOW-OPERATIONS> 206,213
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
