<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-Q
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO _____________
COMMISSION FILE NO. 33-7591
---------------------
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION CORPORATION)
(Exact name of registrant as specified in its charter)
GEORGIA 58-1211925
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
POST OFFICE BOX 1349
2100 EAST EXCHANGE PLACE
TUCKER, GEORGIA 30085-1349
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 270-7600
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 of
such filing requirements for the past 90 days. YES _X_ NO ___
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. THE REGISTRANT
IS A MEMBERSHIP CORPORATION AND HAS NO AUTHORIZED OR OUTSTANDING EQUITY
SECURITIES.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
OGLETHORPE POWER CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
PAGE NO.
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of September 30, 1996 (Unaudited)
and December 31, 1995 3
Condensed Statements of Revenues and Expenses (Unaudited)
for the Three Months and Nine Months Ended September 30,
1996 and 1995 5
Condensed Statements of Cash Flows (Unaudited)
for the Nine Months Ended September 30, 1996 and 1995 6
Notes to the Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OGLETHORPE POWER CORPORATION
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
- -------------------------------------------------------------------------------
(dollars in thousands)
<TABLE>
<CAPTION>
1996 1995
ASSETS (Unaudited)
--------------------------
<S> <C> <C>
ELECTRIC PLANT, AT ORIGINAL COST:
In service $5,719,078 $5,699,213
Less: Accumulated provision for depreciation (1,458,271) (1,362,431)
---------- ----------
4,260,807 4,336,782
Nuclear fuel, at amortized cost 95,437 94,013
Plant acquisition adjustments, at amortized cost 4,419 5,214
Construction work in progress 40,658 35,753
---------- ----------
4,401,321 4,471,762
---------- ----------
INVESTMENTS AND FUNDS:
Decommissioning fund, at market 77,886 74,492
Bond, reserve and construction funds, at market 53,024 56,511
Investment in associated organizations, at cost 15,424 15,853
---------- ----------
146,334 146,856
---------- ----------
CURRENT ASSETS:
Cash and temporary cash investments, at cost 95,864 201,151
Other short-term investments, at market 90,375 79,165
Receivables 107,572 99,559
Inventories, at average cost 92,807 82,949
Prepayments and other current assets 14,288 14,325
---------- ----------
400,906 477,149
---------- ----------
DEFERRED CHARGES:
Premium and loss on reacquired debt, being amortized 202,737 200,794
Deferred amortization of Scherer leasehold 89,715 87,134
Discontinued projects, being amortized 22,776 24,305
Deferred debt expense, being amortized 20,900 21,135
Other 22,632 9,361
---------- ----------
358,760 342,729
---------- ----------
$5,307,321 $5,438,496
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these condensed statements.
3
<PAGE>
OGLETHORPE POWER CORPORATION
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
- --------------------------------------------------------------------------------
(dollars in thousands)
<TABLE>
<CAPTION>
1996 1995
EQUITIES AND LIABILITIES (Unaudited)
-------------------------
<S> <C> <C>
CAPITALIZATION:
Patronage capital and membership fees (including unrealized
loss of ($276) at September 30, 1996 and gain of $3,570 at
December 31, 1995 on available-for-sale securities) $361,273 $338,891
Long-term debt 4,122,458 4,207,320
Obligations under capital leases 294,381 296,478
---------- ----------
4,778,112 4,842,689
---------- ----------
CURRENT LIABILITIES:
Long-term debt and capital leases due within one year 109,545 89,675
Deferred margins to be refunded within one year 7,927 32,047
Accounts payable 43,958 48,855
Accrued interest 20,806 91,096
Accrued and withheld taxes 22,486 1,785
Other current liabilities 11,708 18,007
---------- ----------
216,430 281,465
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Decommissioning reserve 118,970 114,049
Accumulated deferred income taxes 65,510 65,510
Gain on sale of plant, being amortized 59,113 60,868
Sale of income tax benefits, being amortized 44,170 50,194
Other 25,016 23,721
---------- ----------
312,779 314,342
---------- ----------
$5,307,321 $5,438,496
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these condensed statements.
4
<PAGE>
OGLETHORPE POWER CORPORATION
CONDENSED STATEMENTS OF REVENUES AND EXPENSES (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
- --------------------------------------------------------------------------------
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
----------------------- ------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Sales to Members $268,939 $284,476 $771,378 $764,793
Sales to non-Members 17,709 33,060 61,187 91,519
-------- -------- -------- --------
TOTAL OPERATING REVENUES 286,648 317,536 832,565 856,312
-------- -------- -------- --------
OPERATING EXPENSES:
Fuel 54,807 62,813 158,465 164,484
Production 31,296 30,578 93,293 92,443
Purchased power 67,217 85,706 189,443 207,220
Power delivery 4,110 3,817 11,974 11,885
Depreciation and amortization 36,684 35,820 109,774 102,959
Taxes other than income taxes 7,035 7,181 21,761 19,601
Other operating expenses 10,490 8,672 26,764 24,039
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 211,639 234,587 611,474 622,631
-------- -------- -------- --------
OPERATING MARGIN 75,009 82,949 221,091 233,681
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 8,698 4,806 17,438 12,717
Amortization of deferred margins 6,966 5,229 24,120 16,649
Allowance for equity funds used during construction 47 68 137 1,635
Other 2,769 3,242 7,805 9,505
-------- -------- -------- --------
TOTAL OTHER INCOME 18,480 13,345 49,500 40,506
-------- -------- -------- --------
INTEREST CHARGES:
Interest on long-term-debt and other obligations 81,488 86,429 245,848 254,961
Allowance for debt funds used during construction (507) (791) (1,485) (20,186)
-------- -------- -------- --------
NET INTEREST CHARGES 80,981 85,638 244,363 234,775
-------- -------- -------- --------
NET MARGIN $12,508 $10,656 $26,228 $39,412
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these condensed statements.
5
<PAGE>
OGLETHORPE POWER CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
- --------------------------------------------------------------------------------
(dollars in thousands)
<TABLE>
<CAPTION>
1996 1995
------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net margin $ 26,228 $ 39,412
--------- ---------
ADJUSTMENTS TO RECONCILE NET MARGIN TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 132,565 149,588
Amortization of deferred margins (24,120) (16,649)
Allowance for equity funds used during construction (137) (1,635)
Other (2,998) (416)
CHANGE IN NET CURRENT ASSETS, EXCLUDING
LONG-TERM DEBT DUE WITHIN ONE YEAR AND DEFERRED MARGINS
TO BE REFUNDED WITHIN ONE YEAR:
Receivables (8,013) 6,524
Inventories (9,858) 8,736
Prepayments and other current assets 37 (1,915)
Accounts payable (4,897) (19,757)
Accrued interest (70,290) (19,735)
Accrued and withheld taxes 20,701 21,121
Other current liabilities (6,299) (5,885)
--------- ---------
TOTAL ADJUSTMENTS 26,691 119,977
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 52,919 159,389
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (69,211) (107,989)
Net proceeds from bond, reserve and construction funds 3,060 13,397
Decrease in investment in associated organizations 429 1,210
Increase in other short-term investments (14,629) (69,239)
Increase in decommissioning fund (4,970) (5,254)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (85,321) (167,875)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt proceeds, net 3,092 142,341
Debt payments (75,809) (139,730)
Other (168) (1,193)
--------- ---------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (72,885) 1,418
--------- ---------
NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS (105,287) (7,068)
CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF PERIOD 201,151 190,642
--------- ---------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $ 95,864 $ 183,574
--------- ---------
--------- ---------
CASH PAID FOR:
Interest (net of amounts capitalized) $ 301,675 $ 239,485
Income taxes - -
</TABLE>
The accompanying notes are an integral part of these condensed statements.
6
<PAGE>
OGLETHORPE POWER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
(A) The condensed financial statements included herein have been prepared by
Oglethorpe Power Corporation (Oglethorpe), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission (SEC). In
the opinion of management, the information furnished herein reflects all
adjustments (which included only normal recurring adjustments) necessary to
present fairly, in all material respects, the results for the periods ended
September 30, 1996 and 1995. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such SEC rules and regulations, although Oglethorpe believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed financial statements be
read in conjunction with the financial statements and the notes thereto
included in Oglethorpe's latest Annual Report on Form 10-K, as filed with
the SEC.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
PROPOSED RESTRUCTURING
As reported in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 and in its Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1996, Oglethorpe is planning to divide itself into
three specialized companies to respond to increasing competition and
deregulation in the electric industry. In June and July of 1996, the Boards
of Directors of Oglethorpe, Georgia Transmission Corporation (GTC) and
Georgia System Operations Corporation (GSOC) unanimously approved a First
Amended and Restated Restructuring Agreement (the Restructuring Agreement)
which sets forth the terms and conditions on which the restructuring and
related changes will occur. The current target date for full implementation
of the restructuring is January 1, 1997; however, such effective date may, by
the terms of the Restructuring Agreement, be extended by the three companies.
On October 1, 1996, Oglethorpe transferred its system operations assets,
consisting of its control center and related energy control and revenue
metering systems equipment to GSOC, a newly formed wholly owned subsidiary of
Oglethorpe. The purchase price of these assets totaled approximately $9.4
million and was funded by GSOC's assumption of Oglethorpe's obligations under
an existing Rural Utilities Service (RUS) note and by delivery of a purchase
money note payable to Oglethorpe. GSOC will not become fully operational
until the effective date of the restructuring. At that time, it is expected
that the Members will also become members of GSOC. GSOC will then operate
the control center as a separate entity and provide system operations
services to the Members, Oglethorpe, GTC and third parties.
Under the Restructuring Agreement, Oglethorpe will transfer its transmission
business and assets to GTC, a newly formed electric membership corporation,
which will thereafter own and operate the transmission system and provide
transmission services to the Members, Oglethorpe and third parties. In
preparation for the restructuring, Oglethorpe's Members have become members
of GTC. Oglethorpe's investment in transmission and distribution plant less
accumulated depreciation as of December 31, 1995 was approximately $650
million. The purchase price for the transmission business will be based on an
appraisal of the fair market value of such business as of the closing date as
determined by an independent appraiser. The purchase price will be paid by
GTC's assumption of a portion of Oglethorpe's long-term secured debt and by
cash obtained through third-party borrowing. Oglethorpe also will make a
special patronage capital distribution to the Members which can be used by
the Members to establish equity in and to provide initial working capital to
GTC.
In June and July of 1996, the Boards of Directors of Oglethorpe, GTC and GSOC
unanimously approved an agreement (the Member Agreement) which sets forth
those matters contemplated in the Restructuring Agreement that directly
involve the Member corporations. The Member Agreement specifies the form of
the new wholesale power contracts, transmission contracts and
8
<PAGE>
system operations contracts to be signed by the Members. The Member
Agreement and related contracts and documents were distributed to the Members
for consideration and approval by their own Boards of Directors. All of the
Member Boards have approved these documents; however, some Members have
conditioned their approvals on implementation of a long-term power supply
swap transaction. See POWER SUPPLY ARRANGEMENTS below for the status of
implementation of a long-term power supply swap transaction.
In addition to delivery of the Member Agreement by the Members and delivery
of new wholesale power contracts, transmission contracts and system
operations contracts, the restructuring remains subject to a number of
additional conditions specified in the Restructuring Agreement, including (1)
receiving a favorable ruling from the Internal Revenue Service that
implementation of the new governance structure would not affect Oglethorpe's
status as a cooperative for federal income tax purposes, (2) RUS approval of
the restructuring, (3) governmental, lender and other third party consents,
authorizations, waivers, orders and approvals, (4) receipt by GTC of certain
capital contributions by the Members and (5) assurances from rating agencies
that the ratings on Oglethorpe's outstanding fixed rate pollution control
revenue bonds (PCBs) would not be lowered as a result of the restructuring
and that such rating agencies would assign to any comparable bonds issued by
GTC the same or better credit rating as assigned to Oglethorpe's fixed rate
PCBs. Most of these conditions can be waived by Oglethorpe's Board, subject
to RUS approval in certain instances.
Three rating agencies have recently issued new indicative ratings for secured
debt issued by or on behalf of Oglethorpe and have issued indicative credit
ratings for GTC (both to be effective subsequent to the restructuring).
Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., rated
Oglethorpe's debt A and rated GTC AA; Fitch Investors Service, Inc. rated
Oglethorpe's debt A and rated GTC A+; and Moody's Investors Service rated
Oglethorpe's debt A3 and rated GTC A3. From the rating agency reports, it is
not clear if these ratings meet the ratings condition of the Restructuring
Agreement; however, if necessary, it is expected that Oglethorpe's Board will
waive this condition. As part of the restructuring, Oglethorpe also expects
to replace the RUS Mortgage under which its existing secured debt is secured
with a new Indenture providing for a lien on substantially all of the real
and tangible personal property of Oglethorpe. A draft of the Indenture was
made available to the rating agencies before they issued the ratings stated
above. It is expected that GTC will enter into a similar Indenture. Under
Oglethorpe's existing RUS Mortgage, an indenture may be substituted for the
RUS Mortgage with the consent of RUS and certain other secured parties, but
without the consent of the trustees for certain outstanding PCB indebtedness
of Oglethorpe, so long as two rating agencies advise Oglethorpe that the
ratings on such PCB indebtedness will not be withdrawn or reduced as a result
of the substitution of the Indenture for the RUS Mortgage. Oglethorpe
expects to be able to satisfy this condition.
The Oglethorpe Board of Directors recently approved a contingent rate
mechanism that would be implemented in lieu of the rate schedules included in
the new wholesale power contract, transmission contract and system operations
contract in the event that Oglethorpe, GTC and GSOC decide to extend the
effective date of the restructuring beyond January 1, 1997. This rate would
remain in effect until such time as the restructuring becomes effective and
essentially utilizes the
9
<PAGE>
same rate structure that is in place for 1996 applied to the approved and
somewhat lower budgeted costs for 1997.
In light of the significant conditions that remain to be satisfied, including
RUS and other governmental and third-party approvals and implementation of a
long-term power supply swap transaction, Oglethorpe cannot now predict the
actual timing of or the ultimate likelihood of full implementation of the
restructuring or the governance changes previously described in Oglethorpe's
1995 Annual Report on Form 10-K. Until the restructuring is implemented,
Oglethorpe currently anticipates that it will continue its current
operations, and until the conditions applicable to the new governance
structure have been satisfied, Oglethorpe will continue under its existing
governance structure.
POWER SUPPLY SWAP ARRANGEMENTS
As a means of reducing the cost of power provided to the Members, Oglethorpe
is continuing to utilize short-term power supply swap agreements. The
initial agreement was with Enron Power Marketing, Inc. (EPMI) and was in
place from January 4, 1996 through August 31, 1996. Effective September 1,
Oglethorpe selected Duke/Louis Dreyfus L.L.C. (DLD) for a short-term power
supply swap transaction that will supply Oglethorpe's requirements for the
remainder of 1996. Under both of the swap agreements, the power marketer was
required to sell to Oglethorpe at a favorable fixed rate all the energy
necessary to meet the Members' requirements and Oglethorpe was required to
sell to the power marketer at cost, subject to certain limitations, upon
request all energy available from Oglethorpe's total power resources. Under
both agreements, Oglethorpe continued to operate the power supply system and
continued to dispatch the generating resources to ensure system reliability.
See "OPERATING REVENUES" and "OPERATING EXPENSES" below for a discussion of
the impact of the power supply swap agreements on the results of operations
for the first nine months of 1996.
Oglethorpe has negotiated and obtained Board approval to sign a long-term
power supply swap agreement for approximately 50% of its Members' load
requirements with LG&E Power Marketing Inc. (LPM). This agreement is
structured to commence on January 1, 1997, initially on a short-term basis
if RUS approval of the agreement has not been received. This agreement will
convert into a long-term agreement at the time of RUS approval, if received
on or before June 1, 1997. Oglethorpe now expects to focus its negotiations
on completing a long-term contract with either EPMI or DLD for the remaining
approximately 50% of its load. Oglethorpe may enter into an additional
short-term power supply swap arrangement for the remaining approximately 50%
of its load while it finalizes and obtains RUS approval of the long-term
arrangements.
STRATEGIC ALLIANCE WITH INTELLISOURCE
In conjunction with the restructuring and as a part of its continuing efforts
to reduce costs, Oglethorpe has signed a letter of intent to form a business
alliance between its support services division and Intellisource, Inc., a
nationally known service corporation. Under the agreement, approximately 130
employees of Oglethorpe's support services division, which provides
accounting, auditing, communications, human resources, facility management,
purchasing, telecommunications and information technology services, will be
transferred to Intellisource,
10
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effective in early 1997. Oglethorpe, GTC and GSOC will be key customers and
will be served on-site by the same managers and employees.
PLANT WANSLEY AMENDMENTS
As discussed in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, RUS has now approved the amendments to the Plant Wansley
Operating Agreement which give Oglethorpe the right to dispatch separately
its ownership share of Wansley Units No. 1 and No. 2. Oglethorpe expects to
begin separately dispatching Wansley Units No. 1 and No. 2 within the next
six months.
ROCKY MOUNTAIN LEASE TRANSACTION
Oglethorpe is in the process of negotiating a lease transaction, which will
be characterized as a sale for income tax purposes and as a lease for state
law purposes, for Oglethorpe's 74.61% ownership interest in the Rocky
Mountain pumped storage hydroelectric facility (Rocky Mountain). This
transaction will provide a substantial up-front cash payment to Oglethorpe
which will be amortized over the term of the lease to reduce revenue
requirements from the Members. Substantially all of the net cash benefit is
expected to be used by Oglethorpe to reduce long-term debt. Oglethorpe
expects to close at least a portion of this transaction in late 1996 and to
close any remaining portion in early 1997.
RESULTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Oglethorpe's net margin for the three months and nine months ended September
30, 1996 was $12.5 million and $26.2 million compared to $10.7 million and
$39.4 million for the same periods of 1995. Net margin was higher for the
nine month period of 1995 compared to 1996 primarily due to unbudgeted
savings in 1995 from the continued capitalization of costs of Rocky Mountain
due to the delay in commercial operation of the initial unit from April 1995
to June 1995.
OPERATING REVENUES
Member revenues for the three months ended September 30, 1996 were lower
compared to the same period of 1995 due to lower energy revenues (discussed
below). The increase in Member revenues for the nine months ended September
30, 1996 compared to the same period of 1995 was due to the recovery of
additional fixed costs of Rocky Mountain and the increased fixed cost
responsibility resulting from the scheduled end of Sell-back revenues from
Georgia Power Company (GPC) under the plant operating agreements (discussed
below). Energy revenues from sales to Members for the three months and nine
months ended September 30, 1996 were 16.3% and 6.5% lower then same periods
of the prior year despite the fact that megawatt-hour (MWh) sales were
virtually unchanged for the current quarter and increased 7.7% year-to-date.
Under the DLD and EPMI power supply swap agreements, the power marketers sold
to Oglethorpe at a favorable fixed rate all of the energy necessary to meet
the Members' requirements, which resulted in savings in energy costs of
approximately $28.6 million in the first nine months of 1996. These savings
were immediately passed through to the Members. Oglethorpe's average Member
energy
11
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revenue per MWh for the three months and nine months ended September 30, 1996
was 16.3% and 13.1% less than the same periods of 1995, respectively.
Sales to non-Members were primarily made pursuant to three different types of
contractual arrangements with GPC and from energy sales to other non-Member
utilities. The following table summarizes the amounts of non-Member revenues
from these sources for the three months and nine months ended September 30,
1996 and 1995:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
(dollars in thousands)
<S> <C> <C> <C> <C>
GPC- Plant operating agreements $ - $ 89 $ - $10,096
GPC- Power supply arrangements 2,959 12,139 11,054 30,712
ITS transmission agreements 1,817 3,770 6,874 9,377
Sales to power marketers 1,150 - 8,846 -
Sales to other utilities 11,783 17,062 34,413 41,334
------- ------- ------- -------
Total $17,709 $33,060 $61,187 $91,519
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
The first two types of non-Member revenues were derived from contractual
agreements with GPC. Under the plant operating agreements, GPC purchased
capacity and energy from Oglethorpe on a declining scale in the early years
of operation of certain co-owned generating units. As scheduled, effective
June 1, 1995, revenues from GPC pursuant to all of the plant operating
agreements ended. The second source of non-Member revenues is derived
pursuant to power supply arrangements with GPC. These revenues are derived
from energy sales arising from dispatch situations whereby GPC causes Plant
Wansley to be operated when Oglethorpe's system does not require all of its
contractual entitlement to the generation. These revenues compensate
Oglethorpe for its costs since, under the operating agreements, Oglethorpe is
responsible for its share of fuel costs any time a unit operates. Such sales
were significantly lower in 1996 compared to the same period of 1995.
The third source of non-Member revenues was primarily payments from GPC for
use of the Integrated Transmission System (ITS) and related transmission
interfaces. GPC compensates Oglethorpe to the extent that Oglethorpe's
percentage of investment in the ITS exceeds its percentage use of the system.
In such case, Oglethorpe is entitled to income as compensation for the use
of its investment by the other ITS participants. The decline in these
revenues for the three month and nine month periods of 1996 compared to 1995
was the result of relatively greater usage by Oglethorpe compared to its
relative investment.
Under the DLD, and previously, the EPMI power supply swap agreement, sales to
the power marketers represented the net energy transmitted on behalf of DLD
and EPMI off-system on a daily basis from Oglethorpe's total resources. Such
energy was sold to DLD and EPMI at Oglethorpe's cost, subject to certain
limitations. Sales to other non-Member utilities were initiated by DLD and
EPMI in 1996 while in 1995 these sales were made by Oglethorpe directly with
the non-Member
12
<PAGE>
utilities. While Oglethorpe maintains the contractual relationship with
these other utilities and administers the transactions, all profits on these
sales to other utilities from Oglethorpe's total resources accrued to DLD and
EPMI.
OPERATING EXPENSES
The decrease in operating expenses for the three months and nine months ended
September 30, 1996 compared to the same periods of 1995 was primarily
attributable to decreases in fuel and purchased power costs. The decrease in
fuel costs resulted partly from an unplanned outage during the month of July
1996 at Scherer Unit No. 1 which resulted in a 10% decrease in generation
during the third quarter of 1996 compared to the same period of 1995 and
partly due to the utilization of lower price spot market coal at Plant
Wansley. The decrease in purchased power energy costs from 1995 to 1996
reflected offsetting cost savings and additional amounts of power purchased.
As noted under "OPERATING REVENUES" above, energy cost savings of $28.6
million were realized in the first nine months of 1996 from the DLD and EPMI
power supply swap agreements. In addition, the power marketers utilized
11.7% greater MWhs of purchased power in the first nine months of 1996
compared to 1995 to provide for Oglethorpe's Member load and for sales to
other utilities.
OTHER INCOME
Other income for the three months and nine months ended September 30, 1996
increased compared to the same period of 1995 primarily as a result of higher
income from amortization of deferred margins and higher interest income.
Oglethorpe's Board of Directors authorizes the amount of deferred margins to
be returned to the Members each year. For 1996, the remaining annual amount
of $32 million was authorized as compared to $16 million for 1995. Interest
income was higher in 1996 compared to 1995 partly due to higher average cash
balances and partly due to higher interest rates.
INTEREST CHARGES
The decrease in net interest charges for the three months ended September 30,
1996 compared to the same period of 1995 are a result of savings from the
most recent refinancings. The increase in net interest charges for the nine
months ended September 30, 1996 compared to 1995 resulted from Rocky Mountain
becoming commercially operable in June 1995 (interest was capitalized for the
first six months).
FINANCIAL CONDITION
Total assets and total equity plus liabilities as of September 30, 1996 were
$5.3 billion which was $131 million less than the total at December 31, 1995
due to depreciation of plant and due to the decrease in cash and temporary
cash investments.
13
<PAGE>
ASSETS
Property additions for the nine months ended September 30, 1996 totaled $69.2
million and included additions, replacements and improvements to transmission
and distribution facilities and existing generation facilities.
The decrease in cash and temporary cash investments was partly due to
property additions funded from cash and scheduled debt service payments.
Other short-term investments is composed of those investments whose maturity
periods exceed three months. During the first quarter of 1996, an additional
$10 million was transferred into investments with maturities of more than
three months.
The increase in inventories primarily resulted from higher coal inventories
at Plant Scherer due to an unplanned outage at Scherer Unit No. 1. In
addition, coal inventories at Plant Scherer were lower than normal at
year-end.
The increase in other deferred charges primarily resulted from the deferral
of $14.7 million of nuclear refueling outage costs related to Vogtle Units
No. 1 and No. 2 and Hatch Unit No. 1 which are being recovered through rates
over a period of eighteen months starting in May and November 1996.
EQUITY AND LIABILITIES
Deferred margins to be refunded within one year decreased by $24.1 million
which is the amount that was refunded to the Members for the first nine
months of 1996.
Accounts payable declined as of June 30, 1996 as a result of normal
variations in the timing of payables activity.
Accrued interest decreased primarily due to normal payments and accruals of
interest.
Accrued and withheld taxes increased as a result of the normal monthly
accruals of property taxes, which are generally paid in the fourth quarter of
the year.
Other current liabilities decreased partly due to the year-end accrual for
employee incentive pay (subsequently paid in March 1996) and partly due to
normal activity.
LIQUIDITY AND REFINANCING TRANSACTIONS
In anticipation of the proposed restructuring and Oglethorpe's ongoing
liquidity needs, Oglethorpe is evaluating its unsecured credit facilities.
Oglethorpe does not anticipate renewing its $70 million uncommitted line of
credit with CoBank, ACB, which expires on December 1, 1996. Prior to
year-end, Oglethorpe may defease up to $309 million of PCBs and may issue
commercial paper, on an interim basis, or refunding PCBs to finance the
defeasance.
14
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Number Description
- ---------- -----------
2.1(1) First Amended and Restated Restructuring Agreement, dated
August 1, 1996, by and among Oglethorpe, Georgia
Transmission Corporation (An Electric Membership
Corporation) and Georgia System Operations Corporation.
3(ii) Bylaws of Oglethorpe as amended September 9, 1996.
10.5.2(a) Amendment, dated as of January 15, 1995, to the Plant Hal
Wansley Operating Agreements by and among Georgia Power
Company, Oglethorpe, Municipal Electric Authority of Georgia
and City of Dalton, Georgia.
10.29(2) Master Power Purchase and Sale Agreement between Duke/Louis
Dreyfus L.L.C. and Oglethorpe, dated as of August 31, 1996.
27.1 Financial Data Schedule (for SEC use only).
- ----------------
(1) Pursuant to 17 C.F.R. 229.601(b)(2), the schedules and exhibits to
this document are identified on a list of schedules and exhibits included within
this document and are not filed herewith; however, the registrant hereby agrees
that such schedules and exhibits will be provided to the Commission upon
request.
(2) Certain portions of this document have been omitted as confidential
and filed separately with the Commission.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by Oglethorpe for the quarter ended September
30, 1996.
15
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
Oglethorpe Power Corporation
(An Electric Membership
Generation & Transmission
Corporation)
Date: August 14, 1996 By: /s/ T. D. Kilgore
--------------------------
T. D. Kilgore
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 14, 1996 /s/ Gary M. Bullock
--------------------------
Gary M. Bullock
Secretary-Treasurer
(Principal Financial Officer)
Date: August 14, 1996 /s/ Larry N. Brownlee
--------------------------
Larry N. Brownlee
Controller
(Principal Accounting Officer)
16
<PAGE>
EXHIBIT 2.1
FIRST AMENDED AND RESTATED RESTRUCTURING AGREEMENT
BY AND AMONG
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION
CORPORATION),
GEORGIA TRANSMISSION CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION)
AND
GEORGIA SYSTEM OPERATIONS CORPORATION
AUGUST 1, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) "Business Day" . . . . . . . . . . . . . . . . . . . . . 2
(b) "Closing". . . . . . . . . . . . . . . . . . . . . . . . 2
(c) "Closing Conditions" . . . . . . . . . . . . . . . . . . 2
(d) "Closing Date" . . . . . . . . . . . . . . . . . . . . . 2
(e) "Effective Date" . . . . . . . . . . . . . . . . . . . . 2
(f) "Existing Wholesale Power Contracts" . . . . . . . . . . 2
(g) "FERC" . . . . . . . . . . . . . . . . . . . . . . . . . 2
(h) "FFB". . . . . . . . . . . . . . . . . . . . . . . . . . 2
(i) "GSOC Asset Transfer Date" . . . . . . . . . . . . . . . 2
(j) "GTC Assumed OPC Debt" . . . . . . . . . . . . . . . . . 3
(k) "GTC CoBank Note". . . . . . . . . . . . . . . . . . . . 3
(l) "GTC Credit Suisse Note" . . . . . . . . . . . . . . . . 3
(m) "GTC FFB Note(s)". . . . . . . . . . . . . . . . . . . . 3
(n) "GTC Indenture". . . . . . . . . . . . . . . . . . . . . 3
(o) "GTC PCB Assumption Agreements". . . . . . . . . . . . . 3
(p) "GTC RUS Note(s)". . . . . . . . . . . . . . . . . . . . 3
(q) "ITSA" . . . . . . . . . . . . . . . . . . . . . . . . . 4
(r) "ITSA O&M Agreement" . . . . . . . . . . . . . . . . . . 4
(s) "Joint Committee Agreement". . . . . . . . . . . . . . . 4
(t) "Member Agreement" . . . . . . . . . . . . . . . . . . . 4
(u) "New Wholesale Power Contracts". . . . . . . . . . . . . 4
(v) "Net Book Value" . . . . . . . . . . . . . . . . . . . . 4
(w) "OPC Bylaw Amendments" . . . . . . . . . . . . . . . . . 4
(x) "OPC Closing Date Distribution". . . . . . . . . . . . . 4
(y) "OPC Indenture". . . . . . . . . . . . . . . . . . . . . 4
(z) "OPC Mortgage" . . . . . . . . . . . . . . . . . . . . . 4
(aa) "PCB Trustees" . . . . . . . . . . . . . . . . . . . . . 5
(ab) "Purchase Price Adjustment". . . . . . . . . . . . . . . 5
(ac) "Purchase Price Adjustment Event". . . . . . . . . . . . 5
(ad) "RUS". . . . . . . . . . . . . . . . . . . . . . . . . . 5
(ae) "SEC". . . . . . . . . . . . . . . . . . . . . . . . . . 5
(af) "System Operations Assets" . . . . . . . . . . . . . . . 5
(ag) "System Operations Business" . . . . . . . . . . . . . . 6
(ah) "System Operations Contracts". . . . . . . . . . . . . . 6
(ai) "System Operations Employees". . . . . . . . . . . . . . 6
i
<PAGE>
(aj) "System Operations Liabilities". . . . . . . . . . . . . 6
(ak) "Transmission Assets". . . . . . . . . . . . . . . . . . 6
(al) "Transmission Business". . . . . . . . . . . . . . . . . 7
(am) "Transmission Contracts" . . . . . . . . . . . . . . . . 7
(an) "Transmission Employees" . . . . . . . . . . . . . . . . 7
(ao) "Transmission Liabilities" . . . . . . . . . . . . . . . 7
1.2 Other Definitions . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2
THE RESTRUCTURING . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 The Restructuring and Division of Functions . . . . . . . . . 8
(a) Systems Operations Business. . . . . . . . . . . . . . . 8
(b) OPC Closing Date Distribution. . . . . . . . . . . . . . 8
(c) Transmission Business. . . . . . . . . . . . . . . . . . 8
2.2 New Wholesale Power Contracts . . . . . . . . . . . . . . . . 8
2.3 OPC Closing Date Distribution . . . . . . . . . . . . . . . . 8
(a) Allocation Among Members . . . . . . . . . . . . . . . . 9
(b) Methodology for Charging Each Member's Patronage
Account. . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Acquisition of Transmission Business. . . . . . . . . . . . . 9
(a) Purchase and Sale of Transmission Assets . . . . . . . . 9
(b) Assumption of Transmission Liabilities . . . . . . . . . 10
(c) Purchase Price . . . . . . . . . . . . . . . . . . . . . 10
(d) Payment of Purchase Price. . . . . . . . . . . . . . . . 10
(e) Transfer of Employees. . . . . . . . . . . . . . . . . . 11
(f) Adjustment to Purchase Price Resulting from
Certain Events Subsequent to the Closing Date. . . . . . 11
(g) Assets Owned in Common . . . . . . . . . . . . . . . . . 11
2.5 Transmission Contracts. . . . . . . . . . . . . . . . . . . . 11
2.6 Transfer of System Operations Business. . . . . . . . . . . . 12
(a) Purchase and Sale of System Operations Assets. . . . . . 12
(b) Assumption of System Operations Liabilities. . . . . . . 12
(c) Purchase Price . . . . . . . . . . . . . . . . . . . . . 12
(d) Transfer of Employees. . . . . . . . . . . . . . . . . . 13
2.7 System Operations Contracts . . . . . . . . . . . . . . . . . 13
2.8 Change of OPC Name. . . . . . . . . . . . . . . . . . . . . . 13
2.9 Provision of Administrative Services. . . . . . . . . . . . . 13
2.10 Office Space Leases . . . . . . . . . . . . . . . . . . . . . 13
ii
<PAGE>
2.11 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 14
(a) Amendments To Be Adopted . . . . . . . . . . . . . . . . 14
(b) Allocation of Costs. . . . . . . . . . . . . . . . . . . 14
(c) Plans Covered. . . . . . . . . . . . . . . . . . . . . . 14
(d) Right to Terminate Sponsorship . . . . . . . . . . . . . 14
2.12 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 3
OPC GOVERNANCE MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1 New OPC Governance. . . . . . . . . . . . . . . . . . . . . . 15
(a) Conditions to Full Implementation of Governance
Changes. . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Possible Modifications . . . . . . . . . . . . . . . . . 15
3.2 Interim Governance. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OPC . . . . . . . . . . . . . . . . . 16
4.1 Organization and Qualification, Etc.. . . . . . . . . . . . . 16
4.2 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . 16
4.3 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Governmental Consents, Etc. . . . . . . . . . . . . . . . . . 17
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GTC AND GSOC. . . . . . . . . . . . . 17
5.1 Organization and Qualification, Etc.. . . . . . . . . . . . . 17
5.2 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . 17
5.3 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Governmental Consents, Etc. . . . . . . . . . . . . . . . . . 18
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . 19
6.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . 19
6.2 Interim Cost Allocations. . . . . . . . . . . . . . . . . . . 19
6.3 HSR Act Filings . . . . . . . . . . . . . . . . . . . . . . . 19
iii
<PAGE>
6.4 Consents, Authorizations, Etc.. . . . . . . . . . . . . . . . 19
(a) OPC Closing Date Distribution. . . . . . . . . . . . . . 19
(b) New Wholesale Power Contracts. . . . . . . . . . . . . . 20
(c) Release from OPC Mortgage. . . . . . . . . . . . . . . . 20
(d) GTC Assumption Documents . . . . . . . . . . . . . . . . 20
(e) OPC Indenture. . . . . . . . . . . . . . . . . . . . . . 20
(f) Transmission Contracts . . . . . . . . . . . . . . . . . 20
(g) GSOC Matters . . . . . . . . . . . . . . . . . . . . . . 20
(h) System Operations Contracts. . . . . . . . . . . . . . . 20
(i) Other Matters Contemplated Hereby. . . . . . . . . . . . 20
6.5 IRS Ruling. . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Access; Confidentiality . . . . . . . . . . . . . . . . . . . 20
(a) Access . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Confidentiality. . . . . . . . . . . . . . . . . . . . . 20
6.7 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Actions to Avoid and Notices of, Breaches of
Representations and Warranties. . . . . . . . . . . . . . . . 21
6.10 Additional Agreements . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 7
CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Closing Conditions. . . . . . . . . . . . . . . . . . . . . . 22
(a) Governance Changes . . . . . . . . . . . . . . . . . . . 22
(b) Member Agreement . . . . . . . . . . . . . . . . . . . . 22
(c) RUS Approvals. . . . . . . . . . . . . . . . . . . . . . 22
(d) Hart-Scott-Rodino. . . . . . . . . . . . . . . . . . . . 23
(e) PUHCA Matters. . . . . . . . . . . . . . . . . . . . . . 23
(f) Federal Power Act Matters. . . . . . . . . . . . . . . . 23
(g) No Injunction, Etc.. . . . . . . . . . . . . . . . . . . 23
(h) Other Consents, Authorizations, Etc. . . . . . . . . . . 23
(i) Representations and Warranties; Compliance With
Covenants and Obligations. . . . . . . . . . . . . . . . 23
(j) Confirmation of Ratings. . . . . . . . . . . . . . . . . 24
(k) New Wholesale Power Contracts. . . . . . . . . . . . . . 24
(l) Membership In GTC. . . . . . . . . . . . . . . . . . . . 24
(m) Transmission Contracts . . . . . . . . . . . . . . . . . 24
(n) Membership In GSOC . . . . . . . . . . . . . . . . . . . 24
iv
<PAGE>
(o) System Operations Contracts. . . . . . . . . . . . . . . 24
(p) State Tax Matters. . . . . . . . . . . . . . . . . . . . 24
(q) Opinions of Counsel and Certified Resolutions. . . . . . 24
7.2 Waiver of Conditions. . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 8
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Pre-Closing . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Deliveries at or prior to GSOC Asset Transfer Date. . . . . . 25
ARTICLE 9
TERMINATION AND ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Termination and Abandonment . . . . . . . . . . . . . . . . . 26
(a) By Mutual Action . . . . . . . . . . . . . . . . . . . . 26
(b) By OPC . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Procedure for Termination . . . . . . . . . . . . . . . . . . 26
9.3 Effect of Termination . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 10
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 Dispute Resolution and Arbitration. . . . . . . . . . . . . . 26
(a) Arbitration Procedures . . . . . . . . . . . . . . . . . 27
(b) Arbitration Decision . . . . . . . . . . . . . . . . . . 27
10.3 Specific Performance, Etc.. . . . . . . . . . . . . . . . . . 27
10.4 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.6 Counterparts; Facsimile Delivery. . . . . . . . . . . . . . . 28
10.7 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.8 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 29
10.10 Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 29
v
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.1(af) System Operations Assets
Schedule 1.1(aj) Certain System Operations Liabilities
Schedule 1.1(ao) Certain Transmission Liabilities
Schedule 2.3 Methodology for Determining OPC Closing Date
Distribution and Members' Capital Contribution to GTC
Schedule 2.4(d)(i) Debt Allocation Methodology
EXHIBITS
Exhibit A Draft of Indemnity Agreement between OPC and GTC
Exhibit B Draft of Assumption Agreement between GTC and the PCB
Trustees
vi
<PAGE>
LIST OF CERTAIN DEFINED TERMS
DEFINED IN SECTIONS OTHER THAN SECTION 1.1
Term Section
- ---- -------
Additional OPC Contract 4.2
Additional GSOC Contract 5.2
Additional GTC Contract 5.2
Agreement Preamble
Applicable Additional Contract 6.4
Closing 8.1
Confidential Material 6.6(b)
Employee Benefit Plan 2.11(c)
Final Appraisal 2.4(c)
GSOC Preamble
GSOC Assumed OPC Debt 2.6(c)
GSOC Assumption Agreement 2.6(c)
GSOC Purchase Money Note 2.6(c)
GTC Preamble
GTC Assumed OPC Deferred Charges 2.4(c)
HSR Act 4.4
IRS Ruling 3.1(a)
Members Preamble
OPC Preamble
OPC Closing Date Distribution 2.3
Pre-Closing 8.2
Purchase Price Premium 2.4(c)
Representatives 6.6(b)
vii
<PAGE>
FIRST AMENDED AND RESTATED RESTRUCTURING AGREEMENT
This First Amended and Restated Restructuring Agreement (this "Agreement")
is dated as of August 1, 1996, by and among Oglethorpe Power Corporation (An
Electric Membership Generation & Transmission Corporation) ("OPC"), Georgia
Transmission Corporation (An Electric Membership Corporation) ("GTC") and
Georgia System Operations Corporation ("GSOC").
BACKGROUND STATEMENT
Since its formation, OPC has provided generation, transmission and
ancillary and other related services for the 39 electric membership cooperatives
that are members of OPC (the "Members") in order to satisfy the Members'
requirements for power. Because of the increasing competition occurring in the
electric industry and related changes in law and regulation, OPC and the Members
have determined that it is in their mutual best interests to restructure OPC to
provide greater flexibility for the future and to settle certain issues and
controversies confronting OPC and the Members, as contemplated by a Statement of
Agreement, dated November 21, 1995, among representatives of OPC and certain
Members named therein, as approved by the OPC Board of Directors on December 4,
1995.
On March 29, 1996, the Boards of Directors of OPC, GTC and GSOC approved
the Restructuring Agreement, dated as of March 29, 1996 (the "Original
Agreement"), by and among OPC, GTC and GSOC and the restructuring and other
transactions and matters contemplated thereby. Also on March 29, 1996, the
Boards of Directors of OPC, GTC and GSOC approved the "Member Agreement" (as
defined in Section 1.1) for the purpose of submitting the Member Agreement to
the Members for their consideration. The Board of Directors of OPC also has
recommended to the Members that they join OPC, GTC and GSOC in executing the
Member Agreement and thereby agree among themselves and with OPC, GSOC and GTC
as to those matters contemplated hereby and thereby that directly involve the
Members in their capacities as separate corporations.
This Agreement amends and restates the Original Agreement and, as of the
date of this Agreement, replaces and supersedes the Original Agreement in its
entirety to set forth the terms on which the restructuring and related changes
will occur. Among other things, the restructuring will separate OPC's
"Transmission Business" substantially as an entirety and its "System Operations
Business" substantially as an entirety (as such terms are defined in Section
1.1) from OPC's generation business and any other retained business. OPC will
transfer the Transmission Business to GTC and the System Operations Business to
GSOC.
<PAGE>
AGREEMENT
In consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. For the purposes of this Agreement, the following
terms, whether singular or plural, shall have the meanings set forth below:
(a) "BUSINESS DAY" shall mean any day on which both: (i) OPC is open
for business, and (ii) commercial banks in the City of Atlanta or in the City of
New York are not authorized or required to close.
(b) "CLOSING" shall have the meaning specified in Section 8.1.
(c) "CLOSING CONDITIONS" shall mean all of the conditions set forth
in Article 7 of this Agreement.
(d) "CLOSING DATE" shall mean the date on which the Closing occurs
pursuant to Article 8 of this Agreement.
(e) "EFFECTIVE DATE" shall mean (i) January 1, 1997 or (ii) such
other date as the parties to this Agreement may mutually agree.
(f) "EXISTING WHOLESALE POWER CONTRACTS" shall mean the Amended and
Consolidated Wholesale Power Contracts, dated as of December 1, 1988, between
OPC and each of OPC's 39 Members pursuant to which the Members currently
purchase electric power and transmission services from OPC.
(g) "FERC" shall mean the Federal Energy Regulatory Commission.
(h) "FFB" shall mean the Federal Financing Bank, which is an
instrumentality and wholly owned corporation of the United States of America.
(i) "GSOC ASSET TRANSFER DATE" shall mean the date on which the
System Operations Assets are sold and transferred to GSOC and GSOC assumes
certain System Operations Liabilities, as provided in Section 2.6.
2
<PAGE>
(j) "GTC ASSUMED OPC DEBT" shall mean that portion of OPC's
indebtedness that GTC assumes pursuant to the GTC CoBank Note, the GTC Credit
Suisse Note, the GTC FFB Note(s), the GTC RUS Note(s) and the GTC PCB Assumption
Agreements.
(k) "GTC COBANK NOTE" shall mean a note or other agreement or
instrument in the form required by CoBank pursuant to which GTC will assume, and
replace OPC as an obligor with respect to, that portion of OPC's indebtedness to
CoBank outstanding as of the Effective Date that OPC and GTC have agreed will be
assumed as part of the payment of the purchase price pursuant to Section
2.4(d)(i).
(l) "GTC CREDIT SUISSE NOTE" shall mean a note or other agreement or
instrument in the form required by Credit Suisse pursuant to which GTC will
assume, and replace OPC as an obligor with respect to, that portion of OPC's
indebtedness to Credit Suisse as of the Effective Date that OPC and GTC have
agreed will be assumed as part of the payment of the purchase price pursuant to
Section 2.4(d)(i).
(m) "GTC FFB NOTE(S)" shall mean the note(s) in the form required by
FFB pursuant to which GTC will assume, and replace OPC as an obligor with
respect to, that portion of OPC's indebtedness to the FFB outstanding as of the
Effective Date that OPC and GTC have agreed will be assumed as part of the
payment of the purchase price pursuant to Section 2.4(d)(i).
(n) "GTC INDENTURE" shall mean an indenture to be agreed to by GTC
and RUS prior to the Closing, or any other form of real and personal property
security document(s) that GTC and RUS shall mutually agree upon, pursuant to
which GTC will pledge, and grant security title to and a security interest in,
substantially all of the Transmission Assets to secure the GTC FFB Note(s), the
GTC RUS Note(s), the GTC CoBank Note, the GTC Credit Suisse Note and the GTC PCB
Assumption Agreements.
(o) "GTC PCB ASSUMPTION AGREEMENTS" shall mean collectively the
Indemnity Agreement between GTC and OPC and the Assumption Agreements between
GTC and the PCB Trustees based on the drafts attached hereto as EXHIBITS A and
B, respectively, as such drafts may be revised from time to time and, when they
become available, the final forms of such agreements as they may be agreed upon
by OPC and GTC prior to Closing, pursuant to which GTC will agree to assume the
obligation to pay that portion of OPC's pollution control debt secured under the
OPC Mortgage (and related obligations under swap agreements) that OPC and GTC
have agreed will be assumed as part of the payment of the purchase price
pursuant to Section 2.4(d)(i).
(p) "GTC RUS NOTE(S)" shall mean the note(s) in the form required by
RUS pursuant to which GTC will assume, and replace OPC as an obligor with
respect to, that portion of OPC's indebtedness to RUS outstanding as of the
Effective Date that OPC and GTC have agreed will be assumed as part of the
payment of the purchase price pursuant to Section 2.4(d)(i).
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(q) "ITSA" shall mean the Revised and Restated Integrated
Transmission System Agreement, dated as of November 12, 1990, between OPC and
Georgia Power Company.
(r) "ITSA O&M AGREEMENT" shall mean the Transmission Facilities
Operation and Maintenance Contract between Georgia Power Company and OPC, dated
as of June 9, 1986.
(s) "JOINT COMMITTEE AGREEMENT" shall mean the Joint Committee
Agreement, dated as of August 27, 1976, among Georgia Power Company, OPC,
Municipal Electric Authority of Georgia and the City of Dalton, Georgia, as
amended by the First Amendment thereto, dated as of June 19, 1978.
(t) "MEMBER AGREEMENT" shall mean the Member Agreement based on the
draft presented to and approved by the OPC Board of Directors at their July 8,
1996 meeting, as such draft may be revised from time to time and, when it
becomes available, such Member Agreement in final form as executed and delivered
by and among the Members that become parties thereto, OPC, GTC and GSOC (as it
may be amended and supplemented thereafter).
(u) "NEW WHOLESALE POWER CONTRACTS" shall have the meaning specified
in the Member Agreement.
(v) "NET BOOK VALUE" of any asset shall mean at any given time the
amount, net of depreciation, at which such asset is recorded on the books of the
owner of such asset.
(w) "OPC BYLAW AMENDMENTS" shall mean the amendments to OPC's Bylaws
relating to the election of directors in the form adopted by the OPC member
representatives at their March 29, 1996 annual meeting, subject to the
conditions set forth in Section 3.1(a), as such Bylaw amendments may be amended
pursuant to Section 3.1(b).
(x) "OPC CLOSING DATE DISTRIBUTION" shall mean the distribution to be
made by OPC on the Closing Date, as contemplated by Section 2.3.
(y) "OPC INDENTURE" shall mean an indenture to be agreed to by OPC
and RUS prior to the Closing, or any other form of real and personal property
security document(s) that OPC and RUS shall mutually agree upon, pursuant to
which OPC will pledge, and grant security title to and a security interest in,
substantially all of the real and tangible personal property of OPC to secure
the obligations currently secured under OPC Mortgage as to which OPC is not
released from liability in connection with the assumption by GTC of the GTC
Assumed OPC Debt.
(z) "OPC MORTGAGE" shall mean the Consolidated Mortgage and Security
Agreement, dated as September 1, 1994, by and among OPC, the United States of
America, acting through the Administrator of the RUS, CoBank, ACB, as successor
in interest to National Bank for Cooperatives, Credit Suisse, acting by and
through its New York Branch, and SunTrust Bank, Atlanta, as successor to Trust
Company Bank (as trustee under certain pollution control
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bond indentures), as mortgagees, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended
or consolidated, or any alternate mortgage, deed to secure debt, deed of
trust, trust indenture or other security instrument entered into by OPC as a
substitute or replacement for such mortgage, which secures equally and
ratably the payment of principal of and interest on the obligations
thereunder and creates a lien on substantially all of the real and tangible
personal property of OPC in favor of such mortgagees and/or additional and/or
substitute mortgagees or secured parties.
(aa) "PCB TRUSTEES" shall mean SunTrust Bank, Atlanta, acting as
trustee under the several pollution control bond indentures identified in the
OPC Mortgage.
(ab) "PURCHASE PRICE ADJUSTMENT" shall mean: (A) 75% of that amount,
if any, by which (i) the consideration received by GTC for any sale, lease or
exchange of any part or all of the Transmission Assets constituting a Purchase
Price Adjustment Event exceeds the amount paid to OPC for such Transmission
Assets, or (ii) the value of the Transmission Assets reflected in the
consideration received by GTC or its members in any merger or consolidation of
GTC or any other disposition or reduction of the GTC members' capital interests
constituting a Purchase Price Adjustment Event exceeds the amount paid to OPC
for such Transmission Assets, in each of the cases (i) and (ii) net of taxes and
other expenses attributable to the transaction, MINUS (B) any Purchase Price
Adjustment previously paid with respect to such Transmission Assets.
(ac) "PURCHASE PRICE ADJUSTMENT EVENT" shall mean the consummation by
GTC or one or more members of GTC of any one or more transactions after the
Closing Date and prior to the fifth anniversary of the Effective Date (or
thereafter if consummated pursuant to a binding contract entered into after the
Closing Date and prior to the fifth anniversary of the Effective Date) pursuant
to which: (i) GTC sells, leases or exchanges 20% or more, in the aggregate
(measured based on Net Book Value at the time of the transaction or during the
time of any series of related transactions), of the Transmission Assets, or
merges or consolidates with another entity, or (ii) any member or members of
GTC, in a transaction or series of transactions involving any party which is not
one of the 39 Members of OPC as of the Effective Date, dispose of or in any
other manner reduce the capital interests in GTC of those entities constituting
the members of GTC as of the Effective Date (tested separately based on both the
dollar value of such members' capital interests and the percentage such members'
capital interests represent of the total GTC capital interests, in each case at
the time of the transaction or during any series of related transactions).
(ad) "RUS" shall mean the Rural Utilities Service, as successor to the
Rural Electrification Administration, which is an agency of the United States
Department of Agriculture, or any governmental agency succeeding to its powers
and functions.
(ae) "SEC" shall mean the Securities and Exchange Commission.
(af) "SYSTEM OPERATIONS ASSETS" shall mean the computers, other
equipment, equipment leases, and other property of OPC identified on SCHEDULE
1.1(af) as constituting the
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System Operations Assets, as such Schedule may be amended by OPC and GSOC
from time to time, all of which assets are used to perform system operations
services.
(ag) "SYSTEM OPERATIONS BUSINESS" shall mean the performance of system
operations services and the use and ownership of and rights to the System
Operations Assets and shall include the System Operations Liabilities.
(ah) "SYSTEM OPERATIONS CONTRACTS" shall mean the contracts (i)
relating to system operations services to be agreed to between GSOC and OPC and
between GSOC and GTC, respectively, as such contracts are executed and delivered
by the parties thereto, (ii) the "Member System Operations Contracts" between
GSOC and each Member, as defined in the Member Agreement, and (iii) the
generation services contract to be agreed to between GSOC and OPC, as such
contract is executed and delivered by the parties thereto.
(ai) "SYSTEM OPERATIONS EMPLOYEES" shall mean those individuals so
designated by the President and Chief Executive Officer of OPC.
(aj) "SYSTEM OPERATIONS LIABILITIES" shall mean (i) the obligations
assumed by GSOC from OPC under the leases and other contractual undertakings
identified on SCHEDULE 1.1(aj) as such obligations exist as of the GSOC Asset
Transfer Date; (ii) OPC's obligations relating to the System Operations
Employees as such obligations exist as of the Effective Date; and (iii) such
other obligations relating to the performance of system operations services as
OPC and GSOC shall agree upon from time to time.
(ak) "TRANSMISSION ASSETS" shall mean all assets of OPC of every kind
and description and wherever located, which, as of the Effective Date, (A) are
properly classified as transmission assets under accounts 350 to 397 of the
System of Accounts as prescribed by RUS in effect on the Effective Date, or (B)
qualify for treatment as "Transmission Facilities" under the ITSA or (C) are
shown on OPC's books as of the Effective Date as transmission assets, plus the
warehouse facility located in Conyers, Georgia, and all inventories relating to
the transmission assets contained therein, all claims and rights under work in
progress, contracts (including the right to provide transmission services to the
Members in the manner contemplated by the Transmission Contracts), leases,
licenses or other agreements (whether governmental or private) and rights in
condemnation proceedings and other litigation matters (including by way of
counterclaim), in each case, used in or otherwise relating to its Transmission
Business; provided, however, that the Transmission Assets shall not include: (i)
any accounts receivable of OPC; (ii) any of the real property, buildings and
fixtures constituting OPC's headquarters facility or, except as OPC and GTC may
mutually agree, any equipment (except the types expressly specified above),
furniture and other personal property located at OPC's headquarters facility
(subject to OPC's obligations under Section 2.10 to enter into certain office
space leases); (iii) any books or records (subject to OPC's obligations to
provide access and copies pursuant to Section 6.6); (iv) any assets which OPC
owns as a tenant in common with others (except to the extent otherwise provided
by the third sentence of Section 2.4(g)); or (v) any step-up substation
transformers
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located at generation facilities. For all purposes of this Agreement,
including all provisions relating to the Purchase Price Adjustment,
"Transmission Assets" shall be limited to the assets acquired or to be
acquired by GTC from OPC effective as of the Effective Date.
(al) "TRANSMISSION BUSINESS" shall mean the performance of the
Transmission Functions and the use and ownership of and rights to the
Transmission Assets and shall include the Transmission Liabilities.
(am) "TRANSMISSION CONTRACTS" shall mean the "Member Transmission
Contracts" as defined in the Member Agreement and the contract(s) to be executed
and delivered between GTC and OPC relating to Transmission Functions in
substantially the form of the Member Transmission Contracts (the "OPC
Transmission Contract").
(an) "TRANSMISSION EMPLOYEES" shall mean those individuals so
designated by the President and Chief Executive Officer of OPC.
(ao) "TRANSMISSION LIABILITIES" shall mean (i) all obligations, taxes
and liabilities of every kind and nature, known or unknown, contingent or
otherwise, that exist as of the Effective Date and are primarily related to the
Transmission Business or the Transmission Employees; and (ii) that portion of
OPC's costs, expenses and other liabilities (except for the OPC Closing Date
Distribution) incurred in effecting the transactions and actions contemplated
hereby that corresponds to the portion of OPC's debt assumed pursuant to Section
2.4(d)(i); provided, however, that any obligations or liabilities otherwise
covered by clause (i) above shall not be included as Transmission Liabilities to
the extent OPC's President and Chief Executive Officer determines that it would
not be in the best interests of OPC and GTC to so include them and so notifies
GTC at least 10 Business Days prior to Closing. Without in any way limiting the
foregoing, but subject to the foregoing proviso, the Transmission Liabilities
shall include any and all costs, expenses, obligations and liabilities incurred
in connection with or otherwise relating to any litigation described on SCHEDULE
1.1(ao) and not paid prior to the Effective Date. Notwithstanding the
foregoing, Transmission Liabilities shall not include: (A) the GTC Assumed OPC
Debt; (B) any taxes or accounts payable to the extent they arise from the
conduct of the Transmission Business prior to the Effective Date; (C) any taxes
of any kind imposed on OPC by reason of the consummation of the transactions
contemplated by this Agreement; (D) or any taxes imposed on any Members of OPC.
1.2 OTHER DEFINITIONS. Certain other terms are defined elsewhere in this
Agreement and have the meanings so indicated. A List of Certain Defined Terms
immediately following the Table of Contents has been included for the
convenience of the parties to assist in locating such definitions, but such list
shall not affect the interpretation of this Agreement.
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ARTICLE 2
THE RESTRUCTURING
2.1 THE RESTRUCTURING AND DIVISION OF FUNCTIONS. On the terms and
conditions set forth herein, the Transmission Business and the System Operations
Business shall be separated from OPC's other business functions, assets and
liabilities (including those relating to the generation of power). OPC shall
retain all of its business functions, assets and liabilities that are not being
sold to and assumed by GTC or GSOC.
(a) SYSTEMS OPERATIONS BUSINESS.
(i) As soon as all required approvals have been obtained and the
conditions contained in Section 7.1(e) and (f), to the extent they relate to the
sale and transfer of the System Operations Assets, have been satisfied or
waived, and without waiting for the Closing of the other transactions
contemplated hereby, the System Operations Assets and the System Operations
Liabilities shall be transferred and sold to and assumed by GSOC, as
contemplated by and subject to the provisions contained in Section 2.6.
(ii) At the Closing, OPC shall transfer to GSOC the System
Operations Employees to the extent contemplated by Section 2.6(d), and GSOC
shall begin providing system operations and related services pursuant to the
System Operations Contracts, as contemplated by Section 2.7.
(b) OPC CLOSING DATE DISTRIBUTION. At the Closing, OPC shall effect
the OPC Closing Date Distribution contemplated by Section 2.3.
(c) TRANSMISSION BUSINESS. At the Closing, the Transmission Business
shall be transferred and sold to and assumed by GTC, as contemplated by Section
2.4. Also at the Closing, OPC shall transfer to GTC the Transmission Employees
to the extent contemplated by Section 2.4(e), and GTC shall begin providing
transmission and related services pursuant to the Transmission Contracts, as
contemplated by Section 2.5.
2.2 NEW WHOLESALE POWER CONTRACTS. To facilitate the restructuring,
including the transfer of the Transmission Business to GTC, OPC shall seek to
execute and deliver at or before Closing a New Wholesale Power Contract with
each Member pursuant to the terms of the Member Agreement. Commencing as of the
Effective Date, provided RUS approval has been obtained, each New Wholesale
Power Contract shall govern the purchase and sale of power between OPC and each
respective Member that is a party to such a New Wholesale Power Contract.
2.3 OPC CLOSING DATE DISTRIBUTION. On the Closing Date, OPC shall make a
special patronage capital distribution to (or at the direction of) its Members
in an aggregate amount
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determined using the methodology set forth on SCHEDULE 2.3 (the "OPC Closing
Date Distribution").
(a) ALLOCATION AMONG MEMBERS. The OPC Closing Date Distribution
shall be made to (or at the direction of) the Members based on allocation
percentages determined by dividing each Member's patronage capital in OPC as of
December 31, 1995, by the total of all Members' patronage capital in OPC as of
December 31, 1995.
(b) METHODOLOGY FOR CHARGING EACH MEMBER'S PATRONAGE ACCOUNT. For
purposes of charging each Member's patronage account, such distribution shall be
allocated on a proportional basis to each annual period through December 31,
1995, for which any portion of such Member's total patronage capital has been
allocated.
2.4 ACQUISITION OF TRANSMISSION BUSINESS. At the Closing, the
Transmission Business shall be transferred by OPC to GTC in a complete and bona
fide liquidation of OPC's Transmission Business. The parties shall cooperate
with one another in taking such actions and making such adjustments as shall be
appropriate to cause the economic consequences of such actions and changes to be
effective, to the maximum extent feasible and reasonable, as of the Effective
Date. The parties acknowledge and agree that the precise identity of certain of
the Transmission Assets and the Transmission Liabilities, as well as the amount
of the purchase price, initially and preliminarily will be based on OPC's
projected financial statements and records as of December 31, 1996, and shall be
subject to adjustment when OPC's actual financial statements and records as of
December 31, 1996 become available in final form. The parties shall cooperate
with each other in taking such actions as shall be appropriate to effect and
reflect such adjustments.
(a) PURCHASE AND SALE OF TRANSMISSION ASSETS. At the Closing,
effective as of the Effective Date, OPC shall sell, convey, transfer, assign and
deliver to GTC, and GTC will receive, accept and pay for all of the Transmission
Assets. At the Closing, OPC shall deliver to GTC limited warranty deeds
conveying to GTC all of OPC's right, title and interest in and to the real
property included in the Transmission Assets, subject to the reservation by OPC
of nonexclusive easements to use such property in any way that does not
interfere with GTC's use of such property to conduct the Transmission Business,
and bills of sale, endorsements, assignments and other good and sufficient
instruments of conveyance and transfer as shall be effective to vest in GTC all
of OPC's right, title and interest in and to all other Transmission Assets. At
the Closing, OPC will take such other steps as may be reasonably required to put
GTC in actual possession and operating control of the Transmission Assets and
Transmission Business. From time to time after the Closing, at GTC's request
and expense but without further consideration, OPC will execute and deliver such
other instruments of conveyance and transfer and take such other actions as GTC
reasonably may require to vest more effectively in GTC, and to put GTC in
possession of, the Transmission Assets, subject to the above mentioned easement
reserved by OPC.
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(b) ASSUMPTION OF TRANSMISSION LIABILITIES. At the Closing,
effective as of the Effective Date, GTC shall execute and deliver to OPC and to
such other persons and entities as may be appropriate all such assumptions of
liability, endorsements, acknowledgments of assignment, and such other
instruments as shall be effective to evidence and effect GTC's assumption and
agreement to pay, perform and discharge all Transmission Liabilities.
(c) PURCHASE PRICE. The purchase price for the Transmission Business
shall be the sum of:
(i) OPC's Net Book Value of the Transmission Assets as of the
Effective Date; plus
(ii) That portion of OPC's deferred charges relating to OPC's
debt secured under the OPC Mortgage as of the Effective Date which is determined
in accordance with the allocation formula set forth on Schedule 2.4(d)(i) (the
"GTC Assumed OPC Deferred Charges"); plus
(iii) An amount, if any, by which the Purchase Price Premium
exceeds the GTC Assumed OPC Deferred Charges.
As of the date of this Agreement, a preliminary appraisal has
been completed. The appraisal shall be updated by the appraiser at a date
selected by OPC nearer the closing (the "Final Appraisal"). For purposes of the
provisions of this Section 2.4, the term "Purchase Price Premium" shall be the
amount identified as such in the Final Appraisal. If the Purchase Price Premium
is greater than an amount equal to 6% of OPC's Net Book Value for the
Transmission Assets used in preparing the Final Appraisal, then GTC's payment of
the amount called for by this Section 2.4(c) must be approved by GTC's Board of
Directors. If the appraisal names a range of values and a most likely value
within the range, the Purchase Price Premium shall be deemed to be the Purchase
Price Premium named by the appraisal as the one most likely to be paid.
For purposes of determining the amount of the purchase price to
be paid at Closing, the amount set forth in subsection (i) and the GTC Assumed
OPC Deferred Charges shall be determined on a preliminary basis based on OPC's
projected financial statements and records as of December 31, 1996. Not later
than March 15, 1997, for purposes of determining the final purchase price, the
amount set forth in subsection (i) and the GTC Assumed OPC Deferred Charges
shall be determined based on OPC's actual financial statements and records as of
December 31, 1996.
(d) PAYMENT OF PURCHASE PRICE. GTC shall pay the purchase price as
follows:
(i) GTC shall assume, effective as of the Effective Date (as
evidenced and effected by delivery of the GTC Indenture, the GTC FFB Note(s),
the GTC RUS Note(s), the GTC CoBank Note, the GTC Credit Suisse Note and the GTC
PCB Assumption Agreements),
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that portion of OPC's debt secured under the OPC Mortgage which is determined
by the allocation formula set forth on SCHEDULE 2.4(d)(i), along with certain
related obligations under swap agreements; and
(ii) The balance due (based on OPC's projected financial
statements as of December 31, 1996) shall be paid in cash by wire transfer on
the Closing Date, net of the booked value of the Transmission Liabilities
assumed (based upon such projected financial statements). Any additional
payment due from GTC (or any refund by OPC of a portion of the initial payment
made by GTC) based on OPC's actual financial statements as of December 31, 1996,
shall be paid by the party owing such amount in cash by wire transfer within 10
Business Days after such actual financial statements become available in final
form.
(e) TRANSFER OF EMPLOYEES. As of the Effective Date, OPC will
terminate the employment of all Transmission Employees of OPC. GTC immediately
thereupon shall have the right to employ such employees upon such terms and
conditions as GTC shall determine. For any such employees so hired, the
provision of any benefits under the "Employee Benefit Plans" (as hereinafter
defined) shall be pursuant to Section 2.11. This paragraph (e) does not and
shall not be construed to create any rights (of continued employment or
otherwise) in any employee or any other third party.
(f) ADJUSTMENT TO PURCHASE PRICE RESULTING FROM CERTAIN EVENTS
SUBSEQUENT TO THE CLOSING DATE. Upon the occurrence of any Purchase Price
Adjustment Event, the purchase price for the Transmission Assets purchased from
OPC pursuant to this Agreement, as determined pursuant to Section 2.4(c), shall
be increased by an amount equal to the Purchase Price Adjustment, if any. The
Purchase Price Adjustment, if any, shall be paid to OPC by GTC (or any successor
entity) in cash within 90 days after the occurrence of the applicable Purchase
Price Adjustment Event.
(g) ASSETS OWNED IN COMMON. Any asset that would be a Transmission
Asset but for the exclusion of assets owned in common under clause (iv) of the
definition of Transmission Assets in Section 1.1 shall be the subject of a lease
or other agreement between OPC and GTC pursuant to which, from and after the
Effective Date and for mutually agreed consideration from GTC to OPC, GTC shall
have the right to use, possess and operate such assets as fully as may be
permitted by the terms of any agreements relating to the common ownership of
such assets. Any such lease or other agreement shall be upon such terms as OPC
and GTC shall agree. If OPC is permitted by the terms of any agreements
relating to the common ownership of such assets and by any necessary consents,
waivers or other actions of the other co-owner(s) of such assets to transfer
OPC's interest in the title to such assets, then such assets, to the extent of
OPC's interest therein, shall be treated as part of the Transmission Assets.
Nothing in this Section 2.4(g) shall affect the exclusion from Transmission
Assets of step-up substation transformers located at generation facilities.
2.5 TRANSMISSION CONTRACTS. At or before the Closing, GTC shall seek
to execute and deliver Member Transmission Contract(s) with each Member
pursuant to the Member Agreement,
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and GTC and OPC shall execute and deliver OPC Transmission Contract(s),
pursuant to which GTC shall provide transmission and related services to the
Members and to OPC.
2.6 TRANSFER OF SYSTEM OPERATIONS BUSINESS. As soon as all required
approvals have been obtained and the conditions contained in Sections 7.1(e) and
(f), to the extent they relate to the sale and transfer of the System Operations
Business, have been satisfied or waived (which may be earlier, but no later,
than the Closing), OPC and GSOC shall mutually determine the GSOC Asset Transfer
Date which shall be the date on which the System Operations Assets shall be
transferred and sold to GSOC and GSOC shall assume the System Operations
Liabilities.
(a) PURCHASE AND SALE OF SYSTEM OPERATIONS ASSETS. On the GSOC Asset
Transfer Date, OPC shall sell, convey, transfer, assign and deliver to GSOC, and
GSOC will receive, accept and pay for, all of the System Operations Assets,
subject to the continuing lien of the OPC Mortgage. On the GSOC Asset Transfer
Date, OPC shall deliver to GSOC such bills of sale, endorsements, assignments
and other good and sufficient instruments of conveyance and transfer as shall be
effective to vest in GSOC all of OPC's title to and interest in the System
Operations Assets, subject to the continuing lien of the OPC Mortgage. On the
GSOC Asset Transfer Date, OPC will take such other steps as may be reasonably
required to put GSOC in actual possession and operating control of the System
Operations Assets and System Operations Business. From time to time thereafter,
at GSOC's request and expense but without further consideration, OPC will
execute and deliver such other instruments of conveyance and transfer and take
such other actions as GSOC reasonably may require to vest more effectively in
GSOC, and to put GSOC in possession of, the System Operations Assets, subject to
the continuing lien of the OPC Mortgage. OPC and GSOC will enter into
appropriate agreements to permit OPC such use of the System Operations Assets as
it may require prior to the Closing Date.
(b) ASSUMPTION OF SYSTEM OPERATIONS LIABILITIES. On the GSOC Asset
Transfer Date, GSOC shall execute and deliver to OPC all such assumptions of
liability, endorsements, acknowledgments of assignment, and such other
instruments as shall be effective to evidence and effect GSOC's assumption and
agreement to pay, perform and discharge all System Operations Liabilities.
(c) PURCHASE PRICE. The purchase price for the System Operations
Assets shall be the Net Book Value of such assets on the GSOC Asset Transfer
Date. Such purchase price shall be paid on the GSOC Asset Transfer Date:
(i) By GSOC's assumption of OPC's obligations under that certain
Note from OPC, dated June 1, 1984, in the original principal amount of
$5,543,000, payable to the United States of America with a final maturity of May
31, 2019, as such obligations of OPC exist from time to time (the "GSOC Assumed
OPC Debt"), which assumption shall be evidenced by GSOC's execution and delivery
of an assumption document in the form required by RUS (the "GSOC Assumption
Agreement"); and
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(ii) By GSOC's execution and delivery to OPC of a purchase money
note (the "GSOC Purchase Money Note") for the portion of the purchase price in
excess of: (A) the balance assumed by GSOC under the RUS Note identified in
clause (i) above and (B) the booked value of any (I) capital lease or (II)
obligation relating to the System Operations Employees assumed as part of the
System Operations Liabilities.
The GSOC Assumption Agreement and the GSOC Purchase Money Note shall contain
such terms and conditions as RUS shall approve (with the concurrence of OPC in
the case of the GSOC Purchase Money Note).
(d) TRANSFER OF EMPLOYEES. On or before the Closing, OPC will
terminate the employment of all System Operations Employees of OPC. GSOC shall
immediately thereupon have the right to employ such employees upon such terms
and conditions as GSOC shall determine. For any such employees so hired, the
provision of any benefits under the Employee Benefit Plans shall be pursuant to
Section 2.11. This paragraph (d) does not and shall not be construed to create
any rights (of continued employment or otherwise) in any employee or any other
third party.
2.7 SYSTEM OPERATIONS CONTRACTS. On or before the Closing Date, GSOC and
the other parties identified in this Section shall execute and deliver the
following contracts; (a) a System Operations Contract to be agreed to with OPC,
(b) a System Operations Contract to be agreed to with GTC, (c) a Member System
Operations Contract as required by the Member Agreement with each Member, and
(d) a generation services contract to be agreed to with OPC.
2.8 CHANGE OF OPC NAME. Before or promptly after the Closing Date, OPC's
name shall be changed to "Oglethorpe Power Corporation (An Electric Membership
Corporation)." OPC shall execute and file the appropriate documents with the
Georgia Secretary of State to effect such name change.
2.9 PROVISION OF ADMINISTRATIVE SERVICES. At or before the Closing,
OPC and GTC shall execute and deliver an administrative services contract,
and OPC and GSOC shall execute and deliver an administrative services
contract, both substantially in the form recommended by OPC's President and
Chief Executive Officer, subject to such changes as the parties thereto may
mutually agree upon. Effective as of the Effective Date, OPC shall begin
providing to GTC and GSOC pursuant to the administrative services contracts
the administrative services specified therein.
2.10 OFFICE SPACE LEASES. At or before the Closing, OPC and GTC shall
execute and deliver an office space lease, and OPC and GSOC shall execute and
deliver an office space lease, both substantially in the form recommended by
OPC's President and Chief Executive Officer, subject to such changes as the
parties thereto may mutually agree upon. Effective as of the Effective Date,
OPC shall begin leasing office space to GTC and GSOC pursuant to the office
space leases.
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2.11 EMPLOYEE BENEFIT PLANS. As soon as practical after the Closing Date,
OPC shall amend its "Employee Benefit Plans," as hereinafter defined, to permit
the Employee Benefit Plans to be jointly sponsored by OPC, GTC, GSOC and any
other employer acceptable to OPC. Each such Employee Benefit Plan shall be a
single plan, with all plan assets available to pay benefits to participating
employees of any sponsoring employer.
(a) AMENDMENTS TO BE ADOPTED. Each such Employee Benefit Plan shall
be amended: (i) to credit employees of OPC, GTC, GSOC and any other sponsoring
employer with service with, and compensation paid by, OPC, GTC, GSOC or any
other sponsoring employer; (ii) to authorize the Board of Directors of OPC to
appoint the plan administrator of such plan; and (iii) to authorize the Board of
Directors of OPC to amend such plans, provided that any amendment that
materially increases the benefit cost to GTC, GSOC or any other sponsoring
employer shall be subject to the approval of the Board of Directors of GTC, the
Board of Directors of GSOC or the governing body of such other sponsoring
employers, which approval may not be unreasonably withheld by such Board of
Directors or other governing body.
(b) ALLOCATION OF COSTS. The benefit and administrative cost of each
such Employee Benefit Plan shall be allocated among OPC, GTC, GSOC and every
other sponsoring employer, in a manner determined by the actuary or contract
administrator then engaged by OPC on behalf of the plan, so as to most equitably
allocate such costs, including extraordinary one time costs, to the employer
whose employees are covered by the Plan; provided, however, in the case of
employee health care costs, such costs shall be allocated among OPC, GTC, GSOC
and every other sponsoring employer so as to most equitably spread the risk of
adverse claim experience among all such sponsoring employers in proportion to
the number of participating employees employed by such sponsoring employers.
(c) PLANS COVERED. For purposes of this Section 2.11, "Employee
Benefit Plan" shall include the following plans currently sponsored by OPC: (i)
the Retirement Income Plan; (ii) the Retirement Savings Plan; (iii) the Health
Insurance Plan; (iv) the Flexible Spending Account Plan; (v) the Long Term
Disability Plan; (vi) the Group Life Insurance Plan; (vii) the Deferred
Compensation Plan for Key Employees; and (viii) the Business Travel Accident
Insurance Plan.
(d) RIGHT TO TERMINATE SPONSORSHIP. OPC, GTC or GSOC may terminate
its sponsorship of any Employee Benefit Plan upon 90 days advance written notice
to the other parties.
2.12 FURTHER ASSURANCES. If at any time after the Closing Date for GTC
or after the GSOC Asset Transfer Date for GSOC, any further assignments or
assurances are necessary or desirable to vest or to perfect or confirm of
record in GTC or GSOC the title to any property or right included in the
Transmission Assets or the System Operations Assets, respectively (subject to
the easement reserved by OPC pursuant to Section 2.4(a)), or to evidence and
effect the assumption by GTC or GSOC of the Transmission Liabilities or the
System Operations Liabilities, respectively, or otherwise to carry out the
provisions of this Agreement, the officers of OPC,
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GTC and GSOC are hereby authorized and empowered on behalf of such respective
corporations, in the name of and on behalf of the appropriate corporation, to
execute and deliver any and all things necessary or proper to vest or to
perfect or confirm title to such property or rights in GTC or GSOC (subject
to the aforementioned easement) or to evidence and effect such assumption by
GTC or GSOC, and otherwise to carry out the purposes and provisions of this
Agreement.
ARTICLE 3
OPC GOVERNANCE MATTERS
3.1 NEW OPC GOVERNANCE. Subject to satisfaction of the conditions
specified below prior to the full implementation of the governance changes
contemplated by the OPC Bylaw Amendments, OPC shall take appropriate steps on a
timely basis to elect a new Board of Directors in accordance with the OPC Bylaw
Amendments and to implement the new governance structure contemplated by the OPC
Bylaw Amendments.
(a) CONDITIONS TO FULL IMPLEMENTATION OF GOVERNANCE CHANGES. The
terms of the individuals elected as the new Board of Directors of OPC pursuant
to the OPC Bylaw Amendments shall commence, and the other governance changes
contemplated by the OPC Bylaw Amendments shall be fully and unconditionally
implemented, only on the Effective Date (or if earlier, on the fifth Business
Day following satisfaction or waiver of the following conditions) and shall be
conditioned upon satisfaction of all of the following conditions (or waiver by
the existing OPC Board of Directors of either or both of the conditions
contained in paragraphs (i) and (ii), provided that any waiver of the condition
in paragraph (ii) is also approved by RUS):
(i) A ruling from the Internal Revenue Service (the "IRS
Ruling") shall have been received to the effect that the adoption and
implementation of the OPC Bylaw Amendments and the New Wholesale Power Contracts
will not affect OPC's status for federal income tax purposes as a corporation
operating on a cooperative basis; and
(ii) Either a New Wholesale Power Contract, including RATE
SCHEDULE A, shall have become effective for each Member or an OPC rate schedule
which allocates to each Member responsibility for the fixed percentage of all
costs of OPC's existing resources as provided in Exhibit 1 to Appendix 1 of RATE
SCHEDULE A to the New Wholesale Power Contracts shall have otherwise become
legally binding and effective as to each Member.
(b) POSSIBLE MODIFICATIONS. If any changes in the governance
provisions contemplated by the OPC Bylaw Amendments are required in order to
obtain the IRS Ruling, OPC and the Members may develop changes that are mutually
acceptable to OPC, the Members and the IRS. Any such modification to the OPC
Bylaw Amendments may be adopted only by the requisite vote of the Members
prescribed by applicable law and by OPC's Bylaws.
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3.2 INTERIM GOVERNANCE. Until the terms of the individuals elected as the
new OPC Board of Directors commence and the other governance changes
contemplated by the OPC Bylaw Amendments are fully implemented in accordance
with Section 3.1(a), the existing Board of Directors of OPC shall continue to
serve as the directors of OPC.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OPC
OPC represents and warrants to GTC and GSOC as follows:
4.1 ORGANIZATION AND QUALIFICATION, ETC. OPC is an electric membership
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia and has the corporate power and authority to own its
properties and assets and to carry on its business as it is now being conducted.
4.2 AUTHORIZATION, ETC. OPC has the corporate power and authority to
execute and deliver this Agreement and each additional contract which this
Agreement contemplates will be executed and delivered by OPC (each such contract
being referred to as an "Additional OPC Contract") and to consummate the
transactions and actions contemplated hereby and thereby on the part of OPC.
The execution and delivery by OPC of this Agreement and each Additional OPC
Contract and the consummation by OPC of the transactions and actions
contemplated on its part hereby and thereby have been duly authorized by the
Board of Directors of OPC, and the Members of OPC have adopted the OPC Bylaw
Amendments. This Agreement has been duly executed and delivered by OPC and is a
valid agreement of OPC, enforceable against OPC in accordance with its terms,
subject to (a) bankruptcy, insolvency and other laws of similar import, (b)
principles of equity and (c) applicable public policy.
4.3 NON-CONTRAVENTION. Except as may be contemplated by this Agreement,
the execution and delivery by OPC of this Agreement and each Additional OPC
Contract and the consummation of the transactions and actions contemplated
hereby and thereby, do not and will not: (a) violate any provision of the
Articles of Incorporation or Bylaws of OPC; (b) violate, or result (with the
giving of notice or the lapse of time or both) in a violation of any provision
of, or result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or lapse of time or both) any obligation under, or
result in the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any of the property of OPC pursuant to any
provision of, any mortgage, lien, lease, agreement, license, instrument, law,
ordinance, regulation, order, arbitration award, judgment or decree to which OPC
is a party or by which OPC is bound; (c) violate or conflict with any other
restriction of any kind or character to which OPC is subject or by which any
assets of OPC may be bound; or (d) constitute an event permitting termination of
any mortgage, lien, lease, agreement, license or instrument to which OPC is a
party, in each case, if such violation, acceleration, entitlement to accelerate,
creation or imposition of a lien, charge, pledge, security interest or other
encumbrance, conflict, or event would, when
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taken together with all such other violations, accelerations, entitlements to
accelerate, creations and impositions of liens, charges, pledges, security
interests and other encumbrances, conflicts, and events, affect materially
and adversely the business of OPC or OPC's ability to consummate the
transactions and actions contemplated by this Agreement.
4.4 GOVERNMENTAL CONSENTS, ETC. Except for the RUS approvals contemplated
by Section 7.1(c), the IRS Ruling contemplated by Section 3.1(a), any filings
and other coordination with the SEC and FERC contemplated by Sections 7.1(e) and
(f), and any filings that may be required with the Federal Trade Commission and
the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), no consent, authorization, order or
approval, or filing or registration with, any governmental commission, board or
other regulatory body is required to be made or obtained by OPC for or in
connection with the execution and delivery by OPC of this Agreement and each
Additional OPC Contract and the consummation by OPC of the transactions and
actions contemplated hereby and thereby, other than such as have been or, prior
to the Closing Date, will be made or obtained.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GTC AND GSOC
Each of GTC and GSOC represents and warrants to OPC and each other as
follows, each such corporation making each representation and warranty severally
as to itself only:
5.1 ORGANIZATION AND QUALIFICATION, ETC. GTC is an electric membership
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia. GSOC is a non-profit corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia.
Each such corporation has the corporate power and authority to own the
properties and assets it will own following the Closing Date (or following the
GSOC Asset Transfer Date in the case of GSOC) and to carry on its business as it
will be conducted following the Closing Date.
5.2 AUTHORIZATION, ETC. Such corporation has the corporate power and
authority to execute and deliver this Agreement and each additional contract
which this Agreement contemplates will be executed and delivered by GTC or GSOC,
as the case may be (each such contract being referred to as an "Additional GTC
Contract" or an "Additional GSOC Contract," respectively) and to consummate the
transactions and actions contemplated hereby and thereby on the part of such
corporation. The execution and delivery by such corporation of this Agreement
and each Additional GTC Contract or each Additional GSOC Contract, as the case
may be, and the consummation by such corporation of the transactions and actions
contemplated on its part hereby and thereby have been duly authorized by the
Board of Directors of such corporation. This Agreement has been duly executed
and delivered by such corporation and is a valid agreement of such corporation,
enforceable against such corporation in accordance with its terms, subject to
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(a) bankruptcy, insolvency and other laws of similar import, (b) principles of
equity and (c) applicable public policy.
5.3 NON-CONTRAVENTION. Except as may be contemplated by this Agreement,
the execution and delivery by such corporation of this Agreement and each
Additional GTC Contract or Additional GSOC Contract, as the case may be, and the
consummation of the transactions and actions contemplated hereby and thereby, do
not and will not: (a) violate any provision of the Articles of Incorporation or
Bylaws of such corporation; (b) violate, or result (with the giving of notice or
the lapse of time or both) in a violation of any provision of, or result in the
acceleration of or entitle any party to accelerate (whether after the giving of
notice or lapse of time or both) any obligation under, or result in the creation
or imposition of any lien, charge, pledge, security interest or other
encumbrance upon any of the property of such corporation pursuant to any
provision of, any mortgage, lien, lease, agreement, license, instrument, law,
ordinance, regulation, order, arbitration award, judgment or decree to which
such corporation is a party or by which such corporation is bound; (c) violate
or conflict with any other restriction of any kind or character to which such
corporation is subject or by which any assets of such corporation may be bound;
or (d) constitute an event permitting termination of any mortgage, lien, lease,
agreement, license or instrument to which such corporation is a party, in each
case, if such violation, acceleration, entitlement to accelerate, creation or
imposition of a lien, charge, pledge, security interest or other encumbrance,
conflict, or event would, when taken together with all such other violations,
accelerations, entitlements to accelerate, creations and impositions of liens,
charges, pledges, security interests and other encumbrances, conflicts, and
events, affect materially and adversely the business of such corporation or such
corporation's ability to consummate the transactions and actions contemplated by
this Agreement.
5.4 GOVERNMENTAL CONSENTS, ETC. Except for the RUS approvals contemplated
by Section 7.1(c), the IRS Ruling contemplated by Section 3.1(a), any filings
and other coordination with the SEC and FERC contemplated by Sections 7.1(e) and
(f), and any filings that may be required with the Federal Trade Commission and
the Department of Justice under the HSR Act, no consent, authorization, order or
approval, or filing or registration with, any governmental commission, board or
other regulatory body is required to be made or obtained by such corporation for
or in connection with the execution and delivery by such corporation of this
Agreement and each Additional GTC Contract or Additional GSOC Contract, as the
case may be, and the consummation by such corporation of the transactions and
actions contemplated hereby, other than such as have been or, prior to the
Closing Date, will be made or obtained.
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ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 CONDUCT OF BUSINESS. OPC covenants that during the period from the
date hereof to the Closing Date, it shall conduct its operations in the ordinary
and usual course of business, except as otherwise provided in or contemplated by
this Agreement.
6.2 INTERIM COST ALLOCATIONS. Subject to any subsequent amendments or
other changes by OPC's Board of Directors (and all necessary approvals thereof),
the interim rate, OPC-15ir, approved and adopted by OPC's Board of Directors at
its meeting on December 4, 1995 and currently applicable under the Existing
Wholesale Power Contracts, shall continue in effect in accordance with its terms
until the earlier of the Effective Date or December 31, 1996.
6.3 HSR ACT FILINGS. Following the execution of this Agreement, each
party shall make appropriate filings as may be required, if any, with the
Federal Trade Commission and the Department of Justice under the HSR Act, with
respect to the transactions contemplated by this Agreement. In connection with
any such filings, each party shall, in cooperation with each other, and from
time to time thereafter, make all such further filings and submissions, and take
such further actions, as may be required in connection therewith. Each party
shall furnish the other all information in its possession necessary for
compliance by the other with the provisions of this Section. No party shall
withdraw any such filing or submission prior to the termination of this
Agreement without the written consent of each other party required to file under
the HSR Act.
6.4 CONSENTS, AUTHORIZATIONS, ETC. Each party hereto will use its
reasonable efforts to obtain all consents, authorizations, waivers, orders and
approvals from any governmental commission, board or other regulatory body, and
to make all related filings and registrations, which may be necessary or
desirable in connection with the consummation of any of the transactions and
actions contemplated by this Agreement and by each additional contract which
this Agreement contemplates will be executed by such party (each such contract
applicable to a respective party being referred to as an "Applicable Additional
Contract"). Each party also will use its reasonable efforts to obtain all
consents, authorizations, waivers and approvals from any non-governmental third
party which may be necessary or desirable in connection with the consummation of
the transactions and actions contemplated by this Agreement and by each
Applicable Additional Contract. Each party will cooperate fully with the other
parties in assisting them to obtain such consents, authorizations, waivers,
orders and approvals that the other parties are required to obtain or make.
Without in any way limiting the foregoing, the parties shall use reasonable
efforts to obtain the approval of RUS of all of the following (as well as the
approvals and related actions by FFB, CoBank, Credit Suisse and the PCB Trustees
necessary to implement the matters referenced in subsections (c) and (d)):
(a) OPC CLOSING DATE DISTRIBUTION. The OPC Closing Date Distribution
contemplated by Section 2.3;
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(b) NEW WHOLESALE POWER CONTRACTS. The New Wholesale Power Contracts;
(c) RELEASE FROM OPC MORTGAGE. Appropriate instruments to release
from the OPC Mortgage and to permit the transfer by OPC to GTC of the
Transmission Business;
(d) GTC ASSUMPTION DOCUMENTS. The GTC PCB Assumption Agreements, the
GTC Indenture, the GTC FFB Note(s), the GTC RUS Note(s), the GTC CoBank Note and
the GTC Credit Suisse Note;
(e) OPC INDENTURE. The OPC Indenture;
(f) TRANSMISSION CONTRACTS. The Transmission Contracts between GTC
and the Members and GTC and OPC;
(g) GSOC MATTERS. The transfer to GSOC of the System Operations
Business and the assumption by GSOC of the GSOC Assumed OPC Debt;
(h) SYSTEM OPERATIONS CONTRACTS. The System Operations Contracts
between GSOC and GTC, GSOC and OPC, and GSOC and the Members; and
(i) OTHER MATTERS CONTEMPLATED HEREBY. Such other transactions,
actions and contracts contemplated by this Agreement to the extent OPC
determines that approval by the RUS of such matters is necessary.
6.5 IRS RULING. OPC shall use its reasonable efforts to obtain a
favorable tax ruling of the Internal Revenue Service meeting the requirements of
Section 3.1(a).
6.6 ACCESS; CONFIDENTIALITY.
(a) ACCESS. Prior to and following the Closing Date, GTC and GSOC
shall continue to have access to the premises, books and records, officers and
employees of OPC at reasonable hours and the right to copy all books and records
relating to the Transmission Business and the System Operations Business,
respectively, as may be necessary or desirable for the conduct of the
Transmission Business and the System Operations Business, respectively. The
officers of OPC will furnish GTC and GSOC with such financial and operating data
and other information with respect to the Transmission Business and the System
Operations Business as GTC and GSOC may request from time to time.
(b) CONFIDENTIALITY. Except as otherwise required in filings which
any party makes with regulatory entities, any information which any party
provides to the other or to the other's Representatives, whether written or
oral, which is confidential or identified as confidential shall be treated as
confidential material (the "Confidential Material"), except that this shall not
apply to information that is generally available to the public or becomes
generally available to the public other than as a result of a disclosure by the
receiving party or its Representatives. For
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purposes of this Agreement, the term "Representatives" shall mean a party's
directors, officers, employees, attorneys, accountants, investment bankers,
brokers, bankers and others engaged by such party or intended to be engaged
by such party to advise it regarding the Confidential Material or the
transactions contemplated hereby or to assist in financing the transactions
contemplated hereby and who receive Confidential Material. It is hereby
agreed that the Confidential Material will be used by the receiving party
and/or its Representatives only for purposes of evaluating and facilitating
the transactions contemplated hereby, and that the Confidential Material will
be kept confidential by the receiving party and its Representatives;
provided, however, that (i) any of such information may be disclosed to the
receiving party's Representatives who need to know such information for
purposes relating to the transactions contemplated hereby (it being
understood that such Representatives shall be informed by the receiving party
of the confidential nature of such information and shall be directed by the
receiving party to treat such information confidentially), and (ii) any other
disclosure of such information may be made to which the party providing the
information consents in writing. The provisions of this Section 6.6(b) shall
remain in effect for a period of three years after the date hereof; provided,
however, that following the Effective Date, GTC and GSOC and their respective
Representatives shall not be restricted hereunder with respect to any
information regarding the Transmission Business and the System Operations
Business, respectively.
6.7 EXPENSES. Whether or not the transactions and actions contemplated by
this Agreement are consummated, all costs and expenses (including reasonable
attorneys' and accountants' fees) incurred in connection with this Agreement and
the transactions and actions contemplated hereby shall be allocated by agreement
among the parties hereto, subject to the obligation of GTC to assume that
portion of OPC's expenses included in the definition of Transmission
Liabilities.
6.8 PUBLICITY. Except as otherwise required by law, OPC shall coordinate
any press releases or other public announcements through the Closing Date with
respect to this Agreement and the transactions contemplated hereby, and neither
GTC nor GSOC shall act unilaterally in this regard without prior consultation
with OPC.
6.9 ACTIONS TO AVOID AND NOTICES OF, BREACHES OF REPRESENTATIONS AND
WARRANTIES. Each party: (a) shall take such actions so that such party's
representations and warranties in this Agreement remain true and correct and
shall not take any action that would cause such representations and warranties
to cease to be true and correct; and (b) shall inform the other parties hereto
promptly of any facts or circumstances that could be reasonably expected to
constitute or result in a breach of any such party's representations and
warranties in this Agreement.
6.10 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective, as soon
as reasonably practicable, the transactions and actions contemplated by this
Agreement.
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ARTICLE 7
CLOSING CONDITIONS
7.1 CLOSING CONDITIONS. Subject in each case to the rights of OPC (with
the approval of RUS when applicable) to waive (in whole or in part) any
condition pursuant to Section 7.2, each party's obligation to consummate the
transactions and actions contemplated by this Agreement is subject to the
fulfillment, to the reasonable satisfaction of such party, of each of the
following conditions, prior to or contemporaneously with the Closing; provided,
however, that the full implementation of the OPC Bylaw Amendments and related
governance changes are subject only to the fulfillment (or waiver) of the
conditions contained in Section 3.1(a), and provided further that the transfer
of the System Operations Assets and Liabilities to GSOC is subject only to the
fulfillment (or waiver) prior to or contemporaneously with the GSOC Asset
Transfer Date of the condition that the parties receive such approvals and
consents described below that are specifically applicable to such transfer of
the System Operation Assets and Liabilities and of the conditions contained in
Sections 7.1(e) and (f) to the extent they relate to the sale and transfer of
the System Operations Assets.
(a) GOVERNANCE CHANGES. The conditions set forth in Section 3.1(a)
shall have been satisfied or waived in accordance with the provisions of Section
3.1(a), the OPC Bylaw Amendments shall have been implemented on a full and
unconditional basis, and the terms of the individuals elected as the new Board
of Directors of OPC pursuant to the OPC Bylaw Amendments shall have commenced.
(b) MEMBER AGREEMENT. The Member Agreement shall have been executed
and delivered by and among all Members, OPC, GTC and GSOC.
(c) RUS APPROVALS. RUS shall have approved:
(i) The OPC Closing Date Distribution;
(ii) The New Wholesale Power Contracts;
(iii) The transfer of the Transmission Business to GTC, the
related release from the OPC Mortgage contemplated by Section 6.4(c) (which
release shall be joined in by the other secured parties under the OPC Mortgage),
the GTC PCB Assumption Agreements, the GTC Indenture, the GTC FFB Note(s), the
GTC RUS Note(s), the GTC CoBank Note, the GTC Credit Suisse Note, the
Transmission Contracts, the transfer of the System Operations Business to GSOC,
the assumption by GSOC of the GSOC Assumed OPC Debt, and the System Operations
Contracts;
(iv) The OPC Indenture; and
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(v) The other transactions, actions and contracts contemplated
by this Agreement to the extent OPC determines that approval by the RUS of such
matters is necessary.
(d) HART-SCOTT-RODINO. Any applicable waiting period under the HSR
Act shall have expired or been terminated, and no proceeding by the Department
of Justice or the Federal Trade Commission shall be pending or threatened with
respect to the transactions contemplated by this Agreement, which, if determined
adversely, would have a material adverse effect on the financial condition or
results of operations of OPC, GTC or GSOC.
(e) PUHCA MATTERS. A no-action letter shall have been obtained from
the SEC to the effect that none of the members of GTC or GSOC shall be deemed a
public utility holding company within the meaning of the Public Utility Holding
Company Act of 1935, or there shall have otherwise been obtained assurance
satisfactory to OPC that the parties will be exempt from compliance or in
compliance with such Act and related regulations of the SEC.
(f) FEDERAL POWER ACT MATTERS. There shall have been obtained
assurance satisfactory to OPC that the parties will be exempt from compliance or
in compliance with the Federal Power Act and related regulations of FERC.
(g) NO INJUNCTION, ETC. There shall be no judgment, decree,
injunction, ruling or order of any court, governmental department, commission,
agency or instrumentality outstanding against OPC, GTC or GSOC which prohibits,
restricts or delays consummation of the transactions and other actions
contemplated hereby or limits the right of GTC to control in any material
respect the Transmission Business after the Closing or the right of GSOC to
control in any material respect the System Operations Business after the
transfer of such business to GSOC.
(h) OTHER CONSENTS, AUTHORIZATIONS, ETC. In addition to the
approvals described under any of the foregoing provisions of this Section 7.1,
all other consents, authorizations, waivers, orders and approvals of, and
filings and registrations with, any governmental commission, board or other
regulatory body or any non-governmental third party which are required for or in
connection with the execution and delivery by OPC, GTC and GSOC of this
Agreement and each Applicable Additional Contract and the consummation by OPC,
GTC and GSOC of the transactions and actions contemplated hereby shall have been
obtained or made.
(i) REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH COVENANTS AND
OBLIGATIONS. In the case of each party: (A) the representations and warranties
of each of the other parties contained in this Agreement shall have been true
and correct at the date hereof and also shall be true and correct in all
material respects at and as of the Closing (and, to the extent applicable, at
and as of the GSOC Asset Transfer Date), except for changes contemplated by this
Agreement, with the same force and effect as if made at and as of the Closing
(and, to the extent applicable, at and as of the GSOC Asset Transfer Date); (B)
each of the other parties shall have performed and complied with in all material
respects all agreements and covenants required by this Agreement to be performed
or complied with by it at or prior to the Closing (and, to the extent
applicable, at or prior to the GSOC Asset Transfer Date); and (C) each party
shall have
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received one or more certificates of the President or other senior executive
officer of each of the other parties certifying, to the best of his or her
knowledge, all of the foregoing effects.
(j) CONFIRMATION OF RATINGS. OPC shall have received confirmation
from two rating agencies then rating OPC's outstanding fixed rate uninsured
pollution control bonds that the ratings assigned by such rating agencies to
such bonds shall not be lowered as a result of the consummation of the
transactions and actions contemplated hereby. Such rating agencies also shall
have provided satisfactory assurance that they would assign to any comparable
bonds issued directly by GTC the same or higher ratings as those assigned to
OPC's fixed rate uninsured pollution control bonds on the Effective Date.
(k) NEW WHOLESALE POWER CONTRACTS. A New Wholesale Power Contract
shall have been executed, delivered and approved by RUS for each Member.
(l) MEMBERSHIP IN GTC. The Members shall have completed the actions
necessary to become Members of GTC.
(m) TRANSMISSION CONTRACTS. A Transmission Contract between GTC and
each Member and between GTC and OPC shall have been executed, delivered and
approved by RUS.
(n) MEMBERSHIP IN GSOC. The Members shall have completed the actions
necessary to become Members of GSOC.
(o) SYSTEM OPERATIONS CONTRACTS. The System Operations Contracts
between GSOC and OPC, GSOC and GTC, and GSOC and each Member shall have been
executed, delivered and approved by RUS.
(p) STATE TAX MATTERS. Satisfactory assurance shall have been
obtained from the Georgia Department of Revenue (or otherwise) with respect to
Georgia sales tax associated with the transfer of the Transmission Assets from
OPC to GTC.
(q) OPINIONS OF COUNSEL AND CERTIFIED RESOLUTIONS. All opinions of
counsel to each Member and all certificates from each Member as to such legal
matters as RUS shall require to be covered by any opinions or certificates and
all certified resolutions evidencing approval of the Member Agreement and each
Additional Member Contract (as defined in the Member Agreement), in the form
required by RUS, shall have been delivered.
7.2 WAIVER OF CONDITIONS. At its option, the Board of Directors of OPC
may waive any or all of the conditions (in whole or in part) contained herein,
except for those contained in Sections 7.1(c) and 7.1(d).
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ARTICLE 8
CLOSING
8.1 CLOSING. Provided that all of the conditions set forth in Article 7
shall have been satisfied or waived, evidence of the fulfillment or waiver of
such conditions shall be provided, and all documents and payments required to be
delivered or made or otherwise necessary or desirable to consummate the
transactions contemplated hereby (other than those consummated on the GSOC Asset
Transfer Date) shall be executed and delivered and paid, by the parties hereto
to each other at a closing (the "Closing") to be held at the offices of
Sutherland, Asbill & Brennan, 999 Peachtree Street, N.E., Atlanta, Georgia 30309
at 10:00 a.m. Eastern time, on January 3, 1997 (or at such other date, time and
place as OPC, GTC and GSOC may mutually agree). If the parties mutually agree
to reschedule the Closing from January 3, 1997 to another date, the parties also
shall cooperate with each other to make and appropriately document all
adjustments as may be necessary or desirable in other dates contained in this
Agreement which relate to the timing of the Closing.
8.2 PRE-CLOSING. The parties hereto shall cooperate with one another and
shall seek the cooperation of the Members so that: (a) a pre-Closing (the "Pre-
Closing") can occur at the Atlanta offices of Sutherland, Asbill & Brennan on a
date and at a time to be set by the OPC Board (on or before December 2, 1996, if
possible); and (b) all documents that are a condition to Closing can be executed
and delivered at or before such Pre-Closing, with such delivery being either to
each other or to Sutherland, Asbill & Brennan to be held in escrow until the
Closing Date and then delivered. The parties hereto agree, and the parties
shall seek to obtain each Member's agreement in the Member Agreement, that any
document delivered in escrow to Sutherland, Asbill & Brennan may be delivered on
the Closing Date to the appropriate recipient(s) without further authorization,
unless Barrett K. Hawks or Cada T. Kilgore, III of Sutherland, Asbill & Brennan
actually receives a written notice from the party or Member that executed such
document: indicating that a representation, warranty, certification, opinion or
similar matter in such document is no longer true; setting forth the specific
reason why such document cannot be delivered; and providing a substitute
document which conforms as nearly as possible to the requirements applicable to
the original document.
8.3 DELIVERIES AT OR PRIOR TO GSOC ASSET TRANSFER DATE. Provided that all
applicable conditions to the sale and transfer of the System Operations Assets
and Liabilities have been satisfied or waived, at or prior to the GSOC Asset
Transfer Date (or any mutually agreed date for pre-closing such transaction),
OPC and GSOC shall execute and deliver all documents necessary or desirable to
consummate such transaction and evidence the satisfaction or waiver of
applicable conditions.
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ARTICLE 9
TERMINATION AND ABANDONMENT
9.1 TERMINATION AND ABANDONMENT. This Agreement and all transactions and
actions contemplated hereby may be terminated and abandoned in either manner set
forth below at any time prior to the Closing Date, subject to any earlier
implementation of the effectiveness of the OPC governance changes contemplated
by, and effected pursuant to, Article 3 and subject to any earlier completion of
the transfer of the System Operations Assets and Liabilities to GSOC on the GSOC
Asset Transfer Date:
(a) BY MUTUAL ACTION. By mutual action of the Boards of Directors of
OPC, GTC and GSOC.
(b) BY OPC. By OPC if any condition set forth in Section 7.1 shall
not have been complied with or performed in any material respect and such non-
compliance or non-performance shall not have been cured or eliminated (or by its
nature cannot be cured or eliminated other than by waiver) on or before March
15, 1997.
9.2 PROCEDURE FOR TERMINATION. The termination and abandonment of this
Agreement and/or any of the transactions and actions contemplated hereby other
than pursuant to mutual action under Section 9.1(a) shall be effective only when
OPC gives written notice, signed by OPC, stating the grounds for such
termination and abandonment, to the other parties.
9.3 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement and/or any of the transactions and actions
contemplated hereby, no party shall have any liability (regardless of fault or
control) if such termination and abandonment is by mutual action pursuant to
Section 9.1(a), and no party hereto shall have any liability if this Agreement
and/or any of the transactions and actions contemplated hereby are otherwise
terminated or abandoned in accordance with Section 9.1, unless the failure to
consummate or fulfill a condition is within the reasonable control of such
party, in which case the party or parties having such reasonable control shall
continue to be liable hereunder.
ARTICLE 10
MISCELLANEOUS
10.1 SURVIVAL. The representations and warranties of the parties contained
in Articles 4 and 5 hereof shall not survive the Closing. The covenants and
other agreements contained in Sections 2.4(c), 2.4(d), 2.4(f), 2.8, 2.11, 2.12,
6.6, 6.7 and 10.2 shall survive the Closing.
10.2 DISPUTE RESOLUTION AND ARBITRATION. In the event of any disputes
under this Agreement, the parties agree to try in good faith to settle the
dispute by mediation under the
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Commercial Mediation Rules of the American Arbitration Association, before
resorting to arbitration or some other dispute resolution procedure; provided
that a party may not invoke mediation unless it has provided the other with
written notice of the dispute and has attempted in good faith to resolve such
dispute through negotiation. If the parties involved in such dispute shall
not have reached agreement by negotiation or mediation within 120 days as to
the matter in question, then the matter in dispute shall be submitted to and
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (subject to the provisions stated
below). Notwithstanding the foregoing, any party may seek immediate
equitable relief, without attempting to settle a dispute through mediation,
in any case where such party is entitled to equitable relief by the terms of
this Agreement or otherwise.
(a) ARBITRATION PROCEDURES. The arbitrators shall have the right to
employ experts to assist them in any arbitration proceeding under this Section
and shall have the right to render equitable, as well as other, awards and
relief. Before submitting a list of potential arbitrators to the parties for
their consideration, the American Arbitration Association shall consult with
each party to discuss the applicable qualifications for the proposed
arbitrators. Upon request by the parties involved in the dispute, the American
Arbitration Association shall select a panel of at least three arbitrators, but
if no such request is made by the time the parties comment on any proposed list
of arbitrators, the American Arbitration Association may select a single
arbitrator unless the American Arbitration Association determines that a greater
number of arbitrators is appropriate.
(b) ARBITRATION DECISION. Any decision of the arbitrator(s) shall be
satisfied as provided in the order of the arbitrator(s). If necessary, any such
decision and satisfaction procedure may be enforced by the prevailing party in
any court of record having jurisdiction over the subject matter or over any of
the parties.
10.3 SPECIFIC PERFORMANCE, ETC. The parties hereto acknowledge that the
rights of the other parties to consummate the transactions contemplated hereby
are special, unique, and of extraordinary character, and that, in the event that
any party violates or threatens to violate or fails and refuses to perform any
covenant made by it herein, then the other parties hereto will be without
adequate remedy at law. Therefore, each party agrees, that, in the event it
violates, breaches, threatens to violate or breach, or fails and refuses to
perform any covenant made by it herein, then the other applicable party or
parties hereto, so long as it or they are not in breach hereof, may, in addition
to any remedies at law, institute and prosecute an action in a court of
competent jurisdiction to enforce specific performance of such covenant or seek
any other equitable relief against the defaulting party.
10.4 WAIVER. The failure of any party hereto at any time or times to
require performance of any provisions hereof shall in no manner affect the right
to enforce the same. No waiver by any party of any condition, or the breach of
any term, provision, warranty, representation, agreement or covenant contained
in this Agreement or the other contracts contemplated hereby, whether by conduct
or otherwise, in any one or more instances shall be deemed or construed as a
further or continuing waiver of any such condition or breach or a waiver
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of any other condition or of the breach of any other term, provision,
warranty, representation, agreement or covenant herein or therein contained.
10.5 NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if either (a) delivered personally, by
courier or nationally recognized next business day delivery service or Express
Mail, (b) transmitted by telecopy mechanism, provided that any notice so given
is also sent for delivery as provided in clause (a) or mailed as provided in
clause (c), or (c) sent by registered or certified mail, postage prepaid,
addressed to each applicable party at the address shown below (or to such other
address or person as any party shall have designated by notice to the other
party):
If to OPC: Oglethorpe Power Corporation
2100 East Exchange Place
Tucker, Georgia 30085-1349
Attention: President and
Chief Executive Officer
Fax: (770) 270-7977
If to GTC: Georgia Transmission Corporation
2100 East Exchange Place
Tucker, Georgia 30085-1349
Attention: President
Fax: (770) 270-7977
If to GSOC: Georgia System Operations Corporation
2100 East Exchange Place
Tucker, Georgia 30085-1349
Attention: President
Fax: (770) 270-7977
Each such notice or other communication shall be effective (i) if given by
telecopy, when transmitted to the applicable number so specified in (or pursuant
to) this Section and an appropriate answer back is received, or (ii) if given by
any other means, when actually received at such address.
10.6 COUNTERPARTS; FACSIMILE DELIVERY. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Any party may
deliver an executed copy of this Agreement and an executed copy of any documents
contemplated hereby by facsimile transmission to another party except when the
law expressly requires physical delivery with respect to stock certificates or
other special types of documents, and such delivery shall have the same force
and effect as any other delivery of a manually signed copy of this Agreement or
such other document.
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10.7 HEADINGS. The headings herein are for convenience of reference only,
do not constitute a part of this Agreement, and shall not be deemed to limit or
affect any of the provisions hereof.
10.8 AMENDMENT. This Agreement may be amended at any time by OPC, GTC and
GSOC by written instrument executed by the parties affected by such amendment.
10.9 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions and other actions contemplated hereby is not affected in any
manner adverse to any party hereto. Upon any such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto will negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions and other actions
contemplated by this Agreement are consummated to the extent possible.
10.10 MISCELLANEOUS. This Agreement (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties, with respect to the subject matter hereof; (b) is
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder; (c) shall not be assigned, by operation of law or
otherwise; and (d) shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Georgia except that the
Federal Arbitration Act shall govern any arbitration proceedings.
[Signatures are on the following page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, and their seals affixed, on the date first above written.
OPC:
[CORPORATE SEAL] OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION
& TRANSMISSION CORPORATION)
By: /s/ J. Calvin Earwood
----------------------------------------------
J. Calvin Earwood, Chairman of the Board
Attest:
/s/ Gary M. Bullock
- -----------------------------------------
Gary M. Bullock, Secretary-Treasurer
GTC:
[CORPORATE SEAL] GEORGIA TRANSMISSION CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION)
By: /s/ Charles R. Fendley
----------------------------------------------
Charles R. Fendley, Chairman of the Board
Attest:
/s/ Roy Tollerson, Jr.
- -----------------------------------------
Roy Tollerson, Jr., Secretary
GSOC:
[CORPORATE SEAL] GEORGIA SYSTEM OPERATIONS
CORPORATION
By: /s/ James E. Estes
----------------------------------------------
James E. Estes, Chairman of the Board
Attest:
/s/ Jarnett W. Wigington
- -----------------------------------------
Jarnett W. Wigington, Secretary-Treasurer
30
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EXHIBIT 3(ii)
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION
& TRANSMISSION CORPORATION)
BYLAWS
AS AMENDED BY THE MEMBERS
SEPTEMBER 9, 1996
<PAGE>
TABLE OF CONTENTS
Article I. Membership . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Qualifications for Membership. . . . . . . . . . . . . . 1
Section 2. Membership Fee . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Purchase of Capacity and Energy by Members . . . . . . . 1
Section 4. Payment by Members of Obligations to the Corporation . . 1
Section 5. Non-liability of Members for Debts of the Corporation. . 1
Section 6. Expulsion of Member. . . . . . . . . . . . . . . . . . . 1
Section 7. Withdrawal of Member . . . . . . . . . . . . . . . . . . 2
Section 8. Transfer of Membership . . . . . . . . . . . . . . . . . 2
Article II. Meetings of Members. . . . . . . . . . . . . . . . . . . 2
Section 1. Annual Meeting of Members. . . . . . . . . . . . . . . . 2
Section 2. Special Meetings of Members. . . . . . . . . . . . . . . 2
Section 3. Notice of Meetings of Members. . . . . . . . . . . . . . 2
Section 4. Quorum for Meetings of Members; Adjournment. . . . . . . 3
Section 5. Voting; Member Action. . . . . . . . . . . . . . . . . . 3
Section 6. Member Representative. . . . . . . . . . . . . . . . . . 3
Section 7. Notification of Corporation of Identity of Member
Representative and Alternate Representative. . . . . . . 4
Section 8. Written Consent of Members . . . . . . . . . . . . . . . 4
Article III. Directors. . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1. General Powers of Board of Directors . . . . . . . . . . 4
Section 2. Number of Directors and Alternate Directors. . . . . . . 4
Section 3. Qualifications of Directors and Alternate Directors. . . 5
Section 4. Powers and Duties of Alternate Directors . . . . . . . . 5
Section 5. Nomination and Election of Directors and
Alternate Directors . . . . . . . . . . . . . . . . . . 5
Section 6. Term of Directors . . . . . . . . . . . . . . . . . . . 5
Section 7. Filling Vacancies on Board of Directors . . . . . . . . 6
Section 8. Removal of Directors. . . . . . . . . . . . . . . . . . 6
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Section 9. Compensation of Directors . . . . . . . . . . . . . . . 7
Section 10. Power of Directors to Adopt Rules,
Regulations and Policies. . . . . . . . . . . . . . . . 7
Section 11. Power of Board of Directors or Chairman of the Board
to Appoint Committees . . . . . . . . . . . . . . . . . 7
Article IV. Meetings of Directors . . . . . . . . . . . . . . . . . 7
Section 1. Regular Meetings of Directors . . . . . . . . . . . . . 7
Section 2. Special Meetings of Directors . . . . . . . . . . . . . 7
Section 3. Notice of Special Meetings of Directors . . . . . . . . 7
Section 4. Quorum for Meeting of Directors . . . . . . . . . . . . 8
Section 5. Action of Board of Directors. . . . . . . . . . . . . . 8
Section 6. Written Consent of Directors. . . . . . . . . . . . . . 8
Article V. Officers. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1. Officers; Qualifications. . . . . . . . . . . . . . . . 9
Section 2. Election and Term of Office of Officers . . . . . . . . 9
Section 3. Removal of Officers . . . . . . . . . . . . . . . . . . 9
Section 4. Vacancies of Offices. . . . . . . . . . . . . . . . . . 9
Section 5. Chairman of the Board . . . . . . . . . . . . . . . . . 9
Section 6. Vice Chairman of the Board. . . . . . . . . . . . . . . 9
Section 7. Secretary . . . . . . . . . . . . . . . . . . . . . . . 10
Section 8. Treasurer . . . . . . . . . . . . . . . . . . . . . . . 10
Section 9. President and Chief Executive Officer . . . . . . . . . 10
Section 10 Appointment of Officers and Agents. . . . . . . . . . . 10
Section 11 Bonds of Officers . . . . . . . . . . . . . . . . . . . 10
Section 12 Compensation of Officers. . . . . . . . . . . . . . . . 10
Article VI. Cooperative Operation . . . . . . . . . . . . . . . . . 11
Section 1. Interest or Dividends on Capital Prohibited . . . . . . 11
Section 2. Patronage Capital in Connection with Furnishing
Electric Energy . . . . . . . . . . . . . . . . . . . . 11
Section 3. Accounting System and Reports . . . . . . . . . . . . . 12
Article VII. Indemnification and Insurance . . . . . . . . . . . . . 12
Section 1. Indemnification . . . . . . . . . . . . . . . . . . . . 12
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Section 2. Insurance . . . . . . . . . . . . . . . . . . . . . . . 12
Article VIII. Seal. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Article IX. Amendment . . . . . . . . . . . . . . . . . . . . . . . 13
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ARTICLE I
MEMBERSHIP
SECTION 1. QUALIFICATIONS FOR MEMBERSHIP.
Any "EMC" (as defined in Section 46-3-171(3) of the Georgia Electric Membership
Corporation Act) shall be eligible to become a Member. An EMC desiring to
become a Member shall submit to the Secretary of the Corporation an application
for membership in writing. The application shall be presented to the Board of
Directors at the next meeting of the Board held ninety days or more after the
date of submission of the application. The applicant shall become a Member at
such time as the Board of Directors has approved its application and the EMC
has:
(a) Paid the membership fee established pursuant to Section 2 of this
Article I;
(b) Executed an agreement to purchase capacity and energy at wholesale
from the Corporation on terms and conditions satisfactory to the Board
of Directors;
(c) Agreed to comply with and be bound by the Articles of Incorporation
and Bylaws of the Corporation, as amended from time to time, and such
policies, rules and regulations as may from time to time be adopted by
the Board of Directors; and
(d) Satisfied all other conditions established for membership by the
Board of Directors.
SECTION 2. MEMBERSHIP FEE.
The amount of the fee for admission to membership shall be established from
time to time by the Board of Directors.
SECTION 3. PURCHASE OF CAPACITY AND ENERGY BY MEMBERS.
Each Member shall purchase capacity and energy from the Corporation on such
terms and conditions as are provided in the Wholesale Power Contract between
the Corporation and the Member as the same may exist from time to time.
SECTION 4. PAYMENT BY MEMBERS OF OBLIGATIONS TO THE CORPORATION.
Each Member shall pay any and all amounts which may from time to time become
due and payable by the Member to the Corporation as and when the same shall
become due and payable.
SECTION 5. NON-LIABILITY OF MEMBERS FOR DEBTS OF THE CORPORATION.
A Member shall not, solely by virtue of its status as such, be liable for the
debts of the Corporation; and the property of a Member shall not, solely by
virtue of its status as such, be subject to attachment, garnishment,
execution or other procedure for the collection of such debts.
SECTION 6. EXPULSION OF MEMBER.
Any Member which shall have violated or refused to comply with any of the
provisions of the Articles of Incorporation of the Corporation, these Bylaws,
or any policy, rule or regulation adopted from time to time by the Board of
Directors may be expelled from membership by the affirmative vote of not less
than two-thirds of all of the Directors. Any Member so expelled may be
reinstated as a Member by a majority vote of all of the Directors.
Termination of membership shall not release the Member from its debts,
liabilities or obligations to the Corporation, including, without limitation,
its obligations under the Wholesale Power Contract between the Member and the
Corporation.
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SECTION 7. WITHDRAWAL OF MEMBER.
Any Member may withdraw from membership upon payment in full, or making
adequate provisions for the payment in full, of all its debts to the
Corporation and upon satisfying or making adequate provisions for the
satisfaction of all its liabilities and obligations to the Corporation,
including, without limitation, its obligations under the Wholesale Power
Contract between the Member and the Corporation, and upon compliance with
such other terms and conditions as the Board of Directors may prescribe.
SECTION 8. TRANSFER OF MEMBERSHIP.
Upon consolidation, merger or sale of substantially all its assets, a Member
may transfer its membership to its corporate successor or the purchaser of
such assets if such successor or purchaser is otherwise eligible for
membership and has met the requirements for membership set forth in this
Article I, upon satisfying or making adequate provisions for the satisfaction
of all its liabilities and obligations to the Corporation including, without
limitation, its obligations under the Wholesale Power Contract between the
Member and the Corporation, and upon satisfying any additional terms and
conditions the Board of Directors may establish for such transfer, including,
without limitation, the payment of a reasonable fee for the transfer. A
membership in the Corporation shall not otherwise be transferable.
ARTICLE II
MEETINGS OF MEMBERS
SECTION 1. ANNUAL MEETING OF MEMBERS.
The annual meeting of Members shall be held during the month of March each
year at a time and place within the service area of the Corporation
designated by the Board of Directors; provided that failure to hold the
annual meeting shall not work a forfeiture nor shall such failure affect
otherwise valid corporate acts.
SECTION 2. SPECIAL MEETINGS OF MEMBERS.
Special meetings of Members may be called by the Chairman of the Board, twenty-
five percent of the directors, or upon written request of at least ten percent
of all the Members. Members shall request the call of a special meeting of
Members by presenting to the Secretary of the Corporation resolutions of their
Boards of Directors authorizing such action. Special meetings of the Members
shall be held at the time specified by the person or persons calling the
meeting, and at such place within the service area of the Corporation as the
Board of Directors shall designate from time to time. In the case of any
special meeting of Members called upon the request of less than twenty-five
percent of the Members, a majority of the Members present at such meeting may by
vote assess all of the expenses of such meeting against the Members requesting
the call of the meeting.
SECTION 3. NOTICE OF MEETINGS OF MEMBERS.
Written notice stating the place, the day and the hour of a meeting of Members
and, in case of a special meeting, the purpose or purposes for which the meeting
is called, shall be provided not less than five nor more than ninety days before
the date of the meeting by any reasonable means, by or at the direction of the
Chairman of the Board, the Secretary or the persons calling the meeting.
Reasonable means for providing such notice shall include, but not be limited to,
United States mail
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<PAGE>
and personal delivery. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail with adequate prepaid
first class postage thereon addressed to the Member at its address as it
appears on the record books of the Corporation. The notice of any special
meeting of Members shall state the purpose or purposes for which the meeting
is called. Notice of any meeting of Members need not be given to any Member
who signs a waiver of notice, either before or after the meeting. Attendance
of a Member at a meeting shall of itself constitute waiver of notice of such
meeting and waiver of any and all objections to the place of the meeting, the
time of the meeting, or the manner in which it has been called or convened,
except when a Member attends the meeting solely for the purpose of stating,
at the beginning of the meeting, any such objection or objections to the
transaction of business.
SECTION 4. QUORUM FOR MEETINGS OF MEMBERS; ADJOURNMENT.
A majority of the Members shall constitute a quorum for any meeting of Members.
A majority of those present may adjourn the meeting from time to time, whether
or not a quorum is present. When a meeting is adjourned to another time or
place, it shall not be necessary to give any notice of the adjourned meeting if
the time and place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken; and at the adjourned meeting, any
business may be transacted that might have been transacted on the original date
of the meeting. If, however, after the adjournment, the Members fix a new
record date for the adjourned meeting, a notice of the adjourned meeting shall
be given to each Member in compliance with Section 3 of this Article II.
SECTION 5. VOTING; MEMBER ACTION.
(a) Each Member shall be entitled to one vote upon each matter submitted to a
vote at a meeting of Members. If a quorum is present at a meeting, the
affirmative vote of a majority of the Members represented at the meeting
shall be the act of the membership unless the vote of a greater number is
required by law, the Articles of Incorporation or these Bylaws.
(b) The Corporation shall not, without the affirmative vote of three-fourths of
the Members, study, finance or participate in any transfer of assets,
Corporate reorganization or other transaction the result of which would be
to allow the Corporation or another corporation which controls or is
controlled by the corporation to own or control in any manner all or a
substantial portion of the assets of one or more of the Members.
Notwithstanding the provisions of Article IX hereof, the provisions of this
Subsection (b) may not be altered, amended or repealed except by the
affirmative vote or three-fourths of the Members.
SECTION 6. MEMBER REPRESENTATIVE
The Board of Directors of each Member shall appoint a member of such Board to
represent and cast the vote of the Member at all meetings of Members and shall
appoint as an Alternate Representative the General Manager or a person having
the duties of a General Manager of the Member. Each Member shall be entitled to
have a representative and alternate representative present at each meeting of
Members. If the Representative is absent from a meeting of Members, the
Alternate Representative may represent and cast the vote of the Member at such
meeting. If the Representative shall die, resign or be removed, then the
Alternate Representative may represent and cast the vote of the Member until a
new Representative is appointed. If a Member has no Representative and no
Alternate Representative, an officer of the Member may represent and cast the
vote of the Member.
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In case of conflicting representation by the officers of a Member, the Member
shall be deemed to be represented by its senior officer in the order
specified in Section 46-3-266(c) of the Georgia Electric Membership
Corporation Act. The person authorized to cast the vote of a Member in
accordance with this Section 6 shall be conclusively presumed to be
authorized to vote as he sees fit on all matters submitted to a vote of the
Members unless such Member shall specifically limit the voting power of its
Representative, Alternate Representative or officers, as the case may be, by
a written statement executed by the President or Vice President and the
Secretary under its corporate seal pursuant to a resolution duly adopted by
its Board of Directors, and delivered to the Secretary of the Corporation.
SECTION 7. NOTIFICATION OF CORPORATION OF IDENTITY OF MEMBER REPRESENTATIVE AND
ALTERNATE REPRESENTATIVE.
Each Member shall file with the Secretary of the Corporation a written statement
executed by the President or Vice President and the Secretary of the Member
under its corporate seal, stating the name of its Representative and Alternate
Representative and, in the case of the representative, the date of expiration of
his respective term as a director of the Member. The statement shall contain a
certification that the Member Representative and Alternate Representative have
been appointed in accordance with a resolution duly adopted by the Board of
Directors of the Member. A Member may, at any time by resolution of its Board
of Directors and notice to the Corporation, terminate the appointment of its
Representative or Alternate Representative. Notice to the Corporation of such
action shall be by a written statement executed by the President or Vice
President and the Secretary of such Member under its corporate seal.
SECTION 8. WRITTEN CONSENT OF MEMBERS.
Any action required to be taken at a meeting of the Members, or any action which
may be taken at a meeting of the Members, may be taken without a meeting if a
written consent setting forth the action so taken shall be signed by persons
duly authorized to cast the vote of each Member.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS OF BOARD OF DIRECTORS.
The business and affairs of the Corporation shall be managed by a Board of
Directors which shall be elected by the Members.
SECTION 2. NUMBER OF DIRECTORS AND ALTERNATE DIRECTORS.
The Board of Directors of the Corporation shall consists of as many directors as
there are Members. There shall be an Alternate Director for each Director.
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SECTION 3. QUALIFICATIONS OF DIRECTORS AND ALTERNATE DIRECTORS.
A Director must be a director of the Member which has the right to nominate him
and his Alternate Director must be the General Manager, or the person who has
the duties of a general manager, of such Member. Any Director who ceases to be
a director of the Member which nominated him and any Alternate Director who
ceases to be the General Manager or person having the duties of a general
manager of the Member which nominated him shall simultaneously cease to be a
Director or Alternate Director, as the case may be, of the Corporation, and the
vacancy so created shall be filled in the manner set forth in Section 7 of this
Article III.
SECTION 4. POWERS AND DUTIES OF ALTERNATE DIRECTORS.
Each Alternate Director may attend all meetings of the Board of Directors and
may advise with Directors at such meetings. An Alternate Director may vote and
be counted for quorum purposes and shall have all other powers and duties of a
Director only during the period when the directorship is vacant or at any
meeting of the Board of Directors from which the Director is absent. Any
notices required by law or these Bylaws to be given to the Director shall also
be given to the Alternate Director.
SECTION 5. NOMINATION AND ELECTION OF DIRECTORS AND ALTERNATE DIRECTORS.
At least forty-five days prior to the annual meeting of Members, the Secretary
of the Corporation shall give written notice by first class United States mail
to each Member which has a director serving on the Board of Directors of the
Corporation and a general manager or a person having the duties of a general
manager serving as Alternate Director whose terms will expire on or prior to the
date of such annual meeting, that it is the duty of the Board of Directors of
the Member to nominate by resolution a person to serve as a Director of the
Corporation and a person to serve as an Alternate Director for such Director,
for the ensuing term. Each such Member shall deliver a certified copy of its
nominating resolution to the Secretary of the Corporation.
In the event, and only in the event, any Member fails to submit to the Secretary
a resolution nominating a Director and Alternate Director, nominations for such
positions may be made from the floor during the annual meeting of Members.
The nominations shall be submitted to the annual meeting of Members held on the
date of expiration of the Director and Alternate Director terms.
SECTION 6. TERM OF DIRECTORS.
The terms of a Director and his Alternate Director shall be the same and shall
be arranged by the Members so that approximately one-third expire each year on
the date of the annual meeting of Members. Notwithstanding the foregoing, the
term of each Director and Alternate Director shall expire contemporaneously with
the commencement of the term of Directors elected pursuant to any amendment to
these Bylaws adopted by the Members which reduces the number of Directors that
constitute the Board of Directors. Any Director or Alternate Director may
succeed himself in office. Notwithstanding the provisions of Article IX hereof,
the provisions of this Section 6 may not be altered, amended or repealed by the
Directors.
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<PAGE>
SECTION 7. FILLING VACANCIES ON BOARD OF DIRECTORS.
Vacancies occurring among the Directors or Alternate Directors shall be
filled by the Board of Directors at its next meeting held sixty days or more
after the occurrence of the vacancy unless:
(a) the Member which has the right to nominate the successor to such
Director or Alternate Director requests by notice to the Secretary of
the Corporation that the vacancy be filled at the next meeting of the
Board of Directors following the date of such request,
(b) the Member which has the right to nominate the successor to such
Director or Alternate Director requests by notice to the Secretary of
the Corporation within thirty days after the occurrence of the vacancy
that the vacancy be filled by the Members. If such a notice is
received by the Secretary, the vacancy shall be filled at the next
annual meeting of Members held after such request or, if the next
annual meeting of Members is or may be scheduled more than ninety days
after the occurrence of the vacancy, and if such Member so requests in
its notice to the Secretary of the Corporation, the vacancy shall be
filled at a special meeting of Members called for such purpose within
sixty days after the occurrence of the vacancy.
The Member which had the right to nominate the Director or Alternate Director
who created the vacancy shall have the right to nominate his successor, by
delivering to the Secretary of the Corporation a resolution of its Board of
Directors making the nomination prior to the date of the meeting of the Board of
Directors, the annual meeting or specially called meeting, as the case may be,
at which the vacancy is to be filled. In the event the vacancy is created by an
increase in the number of Directors upon the admission of a new Member, the new
Member shall deliver the resolution making nominations for the new Director and
Alternate Director.
The nominations shall be submitted to the next meeting of the Board of Directors
held sixty days or more after the occurrence of the vacancy, or, according to
the request of the Member, at the next meeting of the Board of Directors
following the date of such request, or at the next annual meeting of Members
following the occurrence of the vacancy, or at the special meeting of Members
called for the purpose of filling the vacancy. In the event, and only in the
event, a nomination for a vacant position is not delivered by the appropriate
Member, nominations for such position may be made from the floor.
SECTION 8. REMOVAL OF DIRECTORS.
Any Member or Director may bring charges against a Director for neglect or
breach of duty or other action or inaction which is or may be injurious to the
Corporation by filing them in writing with the Secretary, together with a
petition signed by twenty-five percent of the Members, requesting that the
matter be brought before a meeting of Members. The removal shall be voted upon
at the next regular or special meeting of the Members. A majority vote of the
Members present at the meeting shall determine such removal. The Director
against whom such charges have been brought shall be informed in writing of the
charges at least fifteen days prior to the meeting and shall have an opportunity
at the meeting to be heard in person or by counsel and to present evidence; and
the person or persons bringing the charges against him shall have the same
opportunity. A vacancy
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<PAGE>
created by such removal shall be filled as provided in Section 7 of this
Article III. Any Director removed pursuant to this Section 8 shall be
eligible to again be nominated to serve as a Director of the Corporation only
with the consent of a majority of the Members present and voting at a meeting
at which the question is presented.
SECTION 9. COMPENSATION OF DIRECTORS.
The compensation, if any, of Directors and Alternate Directors for their
services as such shall be on a per diem basis, and shall be fixed by the
Board of Directors. Directors and Alternate Directors also shall be
reimbursed for expenses actually and necessarily incurred by them in the
performance of their duties.
SECTION 10. POWER OF DIRECTORS TO ADOPT RULES AND REGULATIONS AND POLICIES.
The Board of Directors shall have the power to adopt policies, rules and
regulations, not inconsistent with law, the Articles of Incorporation and these
Bylaws, for the management, administration and regulation of the business and
affairs of the Corporation.
SECTION 11. POWER OF BOARD OF DIRECTORS OR CHAIRMAN OF THE BOARD TO APPOINT
COMMITTEES.
The Board of Directors may establish (and abolish) committees comprised of
Directors, Alternate Directors and others which shall not have any of the powers
of the Board of Directors and which shall perform such functions as are
designated from time to time by the Board of Directors. The members of any such
committees shall be appointed in accordance with such policies, rules and
regulations as may from time to time be adopted by the Board of Directors. A
majority of the full Board of Directors may also appoint committees of the Board
pursuant to the Georgia Electric Membership Corporation Act Section 46-3-297.
ARTICLE IV
MEETINGS OF DIRECTORS
SECTION 1. REGULAR MEETINGS OF DIRECTORS.
A meeting of the Board of Directors shall be held without notice immediately
after, and at the same place as, the annual meeting of the Members. A regular
meeting of the Board of Directors shall also be held quarterly or more often at
such time and place as the Board of Directors may provide by resolution. Such
regular meetings may be held without notice.
SECTION 2. SPECIAL MEETINGS OF DIRECTORS.
Special meetings of the Board of Directors may be called by the Chairman of the
Board or by twenty-five percent of the Directors then in office. The persons
calling a special meeting may fix the time and place for the holding of the
meeting.
SECTION 3. NOTICE OF SPECIAL MEETINGS OF DIRECTORS.
Notice of the time, place and purpose of any special meeting of the Board of
Directors shall be given by or at the direction of the Chairman of the Board,
the Secretary or the person or persons calling the meeting.
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The notice shall be given to each Director and each Alternate Director, at least
five days prior to the meeting, by written notice delivered personally or mailed
to each Director and Alternate Director at their respective last known
addresses. If mailed, such notice shall be deemed delivered when deposited in
the United States mail so addressed, with first-class postage thereon prepaid.
Notice of a meeting of the Board of Directors need not be given to any Director
or Alternate Director who signs a waiver of notice either before or after the
meeting. Attendance of a Director or his Alternate Director at a meeting shall
constitute a waiver of notice of such meeting and waiver of any and all
objections to the place of the meeting, the time of the meeting or the manner in
which it has been called or convened, except when the Director or his Alternate
Director states, at the beginning of the meeting, any such objection or
objections to the transaction of business.
SECTION 4. QUORUM FOR MEETING OF DIRECTORS.
A majority of the Board of Directors (with Alternates representing absent
Directors) shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors. A majority of the Directors present may
adjourn the meeting to another time and place without further notice, whether or
not a quorum is present.
SECTION 5. ACTION OF BOARD OF DIRECTORS.
(a) The vote of a majority of Directors present and voting at the time of
the vote, if a quorum is present at such time, shall be the act of the
Board of Directors unless the vote of a greater number is required by
law, the Articles of Incorporation, or these Bylaws.
(b) Notwithstanding the provisions of Subsection (a) of this Section 5.,
the affirmative vote of two-thirds of the Directors shall be required
to (i) modify, amend or rescind any Member Rate Policy then in effect,
or, (ii) revise any rate for electric power and energy furnished under
the Wholesale Power Contracts between each Member and the Corporation.
Notwithstanding the provisions of Article IX hereof, the provisions of
this Subsection (b) may not be altered, amended or repealed by the
Directors except by the affirmative vote of two-thirds of the
Directors.
SECTION 6. WRITTEN CONSENT OF DIRECTORS.
Any action required to be taken at a meeting of the Board of Directors or any
action that may be taken at a meeting of the Board of Directors may be taken
without a meeting if a written consent, setting forth the action so taken, is
signed by all the Directors and filed with the minutes of the proceedings of the
Board of Directors.
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<PAGE>
ARTICLE V
OFFICERS
SECTION 1. OFFICERS; QUALIFICATIONS.
The officers of the Corporation shall be a Chairman of the Board, a Vice
Chairman of the Board, a Secretary, a Treasurer, and a President and Chief
Executive Officer. The Chairman of the Board and Vice Chairman of the Board
shall be Directors. The Secretary and Treasurer shall be Directors or Alternate
Directors. Any two or more offices may be held by the same person, except the
offices of Chairman of the Board, President and Chief Executive Officer and
Secretary.
SECTION 2. ELECTION AND TERM OF OFFICE OF OFFICERS.
The Chairman of the Board, Vice Chairman of the Board, Secretary and Treasurer
shall be elected annually at the first meeting of the Board of Directors held
after the annual meeting of the Members or as soon thereafter as practicable.
Each such officer shall hold office until the first meeting of the Board of
Directors following the next succeeding annual meeting of the Members and until
his successor shall have been elected or appointed and shall have qualified, or
until his earlier resignation, removal from office, or death. The President and
Chief Executive Officer shall be appointed by the Board of Directors and shall
hold office until his successor shall have been appointed and shall have
qualified, or until his earlier resignation, removal from office or death.
SECTION 3. REMOVAL OF OFFICERS.
Any officer or agent elected or appointed by the Board of Directors may be
removed by the Board of Directors whenever in its judgment the best interest of
the Corporation will be served thereby.
SECTION 4. VACANCIES OF OFFICES.
A vacancy in any office may be filled by the Board of Directors for the
unexpired portion of the term.
SECTION 5. CHAIRMAN OF THE BOARD.
The Chairman of the Board shall:
(a) preside at meetings of the Members and of the Board of Directors and
oversee the management of the Corporation by the President and
Chief Executive Officer;
(b) have the power to enter into and execute contracts on behalf of the
Corporation and to sign certificates, contracts or other instruments
on behalf of the Corporation; and
(c) have such other duties and powers as are incident to his office and
such other duties and powers as may be prescribed by the Board of
Directors from time to time.
SECTION 6. VICE CHAIRMAN OF THE BOARD.
In the absence of the Chairman of the Board or in the event of his inability or
refusal to act, the Vice Chairman of the Board shall perform the duties of the
Chairman of the Board, and when so acting, shall have all the powers and duties
of the Chairman of the Board. The Vice Chairman of the Board shall perform
such other duties as may from time to time be assigned to him by the Board of
Directors.
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<PAGE>
SECTION 7. SECRETARY.
The Secretary shall be responsible for seeing that minutes of all meetings of
the Members and the Board of Directors are kept and shall have authority to
certify as to the corporate books and records, and shall keep a register of the
address of each Member, Director and Alternate Director. The Secretary shall
perform such other duties and have such other powers as may from time to time be
delegated to him by the Chairman of the Board or the Board of Directors.
SECTION 8. TREASURER.
The Treasurer shall oversee the management of the financial affairs of the
Corporation by the staff, and shall perform the other duties incident to the
office of Treasurer and have such other duties as from time to time may be
assigned to him by the Chairman of the Board or the Board of Directors.
SECTION 9. PRESIDENT AND CHIEF EXECUTIVE OFFICER.
The President and Chief Executive Officer shall:
(a) manage the day-to-day operations and activities of the Corporation;
(b) subject to such Corporate Policies as are established by the Board of
Directors from time to time, have the power to enter into and execute
contracts on behalf of the Corporation and to sign certificates,
contracts or other instruments on behalf of the Corporation; and
(c) have such other duties and powers as are incident to his office and
such other duties and powers as may be prescribed by the Board of
Directors from time to time.
SECTION 10. APPOINTMENT OF OFFICERS AND AGENTS.
The Board of Directors may appoint from time to time one or more additional
officers and assistant officers and agents as the Board of Directors may
determine. Each such officer, assistant officer and agent shall perform such
duties as the action appointing him provides and, unless the action otherwise
provides, shall perform the duties which are generally performed by the elected
officers or assistant officers having the same title.
SECTION 11. BONDS OF OFFICERS.
The Board of Directors shall require all officers and employees of the
Corporation to give bond in such sum and with such surety as the Board of
Directors shall determine.
SECTION 12. COMPENSATION OF OFFICERS.
The compensation, if any, of any officer who is also a Director or Alternate
Director shall be determined by the Board of Directors. The compensation of any
other officers, agents, and employees shall be fixed by the Board of Directors
or by a person or persons designated by the Board of Directors.
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<PAGE>
ARTICLE VI
COOPERATIVE OPERATION
SECTION 1. INTEREST OR DIVIDENDS ON CAPITAL PROHIBITED.
The Corporation shall at all times be operated on a cooperative basis for the
mutual benefit of its Members. No interest or dividends shall be paid or
payable by the Corporation on any capital furnished by Members.
SECTION 2. PATRONAGE CAPITAL IN CONNECTION WITH FURNISHING ELECTRIC ENERGY.
In the furnishing of electric energy the Corporation's operation shall be so
conducted that all Members will through their patronage furnish capital for the
Corporation. The Corporation is obligated to account on a patronage basis to
all Members for all amounts received and receivable from the furnishing of
electric energy in excess of operating costs and expenses properly chargeable
against the furnishing of electric energy. All such amounts in excess of
operating costs and expenses at the moment of receipt by the Corporation are
received with the understanding that they are furnished by Members as capital.
The Corporation is obligated to credit to one or more capital accounts for each
Member all such amounts in excess of operating costs and expenses. The books
and records of the Corporation shall be set up and kept in such a manner that at
the end of each fiscal year the amount of capital, if any, so furnished by each
Member is clearly reflected and credited in an appropriate record to one or more
capital accounts for each Member, and the Corporation shall within a reasonable
time after the close of the fiscal year notify each Member of the amount of
capital so credited to its account or accounts. All such amounts credited to a
capital account of any Member shall have the same status as though they had been
paid to the Member in cash in pursuance of a legal obligation to do so and the
Member had then furnished the Corporation corresponding amounts for capital.
All other amounts received by the Corporation from its operations in excess of
costs and expenses shall, insofar as permitted by law, be (a) used to offset any
losses incurred during the current or any prior fiscal year and (b) to the
extent not needed for that purpose, allocated to the Members on a patronage
basis and any amounts so allocated shall be a part of the capital credited to an
appropriate account for each Member.
In the event of dissolution or liquidation of the Corporation, after all its
outstanding indebtedness shall have been paid, outstanding capital credits shall
be retired without priority on a pro rata basis before any payments are made on
account of property rights of Members. If, at any time prior to dissolution or
liquidation, the Board of Directors shall determine that the financial condition
of the Corporation will not be impaired thereby, capital then credited to
Members' accounts and the accounts of former Members may be retired in full or
in part. Any such retirements of capital from a particular type account shall
be made in order of priority according to the year in which the capital was
furnished and credited, the capital first received by the Corporation being
first retired. Notwithstanding the preceding sentence, retirements of each
Member's capital credits made pursuant to the First Amended and Restated
Restructuring Agreement, dated as of August 1, 1996, by and among the
Corporation, Georgia Transmission Corporation and Georgia System Operations
Corporation, as such agreement may be amended, shall be allocated among and
charged to the
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Members' capital accounts as provided therein.
Capital credited to the accounts of Members shall be assignable only on the
books of the Corporation to a transferee of a Member's membership, pursuant to
written instruction from the Member and then only upon satisfaction of all
requirements for a transfer of membership established by or pursuant to these
Bylaws.
SECTION 3. ACCOUNTING SYSTEM AND REPORTS.
The Board of Directors shall cause to be established and maintained a complete
accounting system which shall conform to applicable law and to the requirements
of the Corporation's lenders. After the close of each fiscal year, the Board of
Directors shall also cause to be made a full and complete audit of the accounts,
books and financial condition of the Corporation as of the end of such fiscal
year. A report on the audit for the fiscal year immediately preceding each
annual meeting of Members shall be submitted to the Members at such annual
meeting.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
SECTION 1. INDEMNIFICATION.
The Corporation shall indemnify each person who is or was a Director, officer,
employee or agent of the Corporation (including the heirs, executors,
administrators or estate of such person) or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise to the full
extent permitted under Sections 46-3-306(b), (c) and (d) of the Georgia Electric
Membership Corporation Act or any successor provisions of the laws of the State
of Georgia. If any such indemnification is requested pursuant to Sections 46-3-
306(b) or (c) of said Act or laws, the Board of Directors shall cause a
determination to be made (unless a court has ordered the indemnification) in one
of the manners prescribed in Section 46-3-306(e) of said Act or laws as to
whether indemnification of the party requesting indemnification is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 46-3-306(b) or (c) of said Act or laws. Upon any such determination
that such indemnification is proper, the Corporation shall make indemnification
payments of liability, cost, payment or expense asserted against, or paid or
incurred by, him in his capacity as such a director, officer, employee or agent
to the maximum extent permitted by said Sections of said Act or laws. The
indemnification obligation of the Corporation set forth herein shall not be
deemed exclusive of any other rights, in respect of indemnification or
otherwise, to which any party may be entitled under any other bylaw provision or
resolution approved by the Members pursuant to Section 46-3-306(g) of said Act
or laws.
SECTION 2. INSURANCE.
The Corporation may purchase and maintain insurance at its expense, to protect
itself and any Director, officer, employee or agent of the Corporation
(including the heirs, executors, administrators or estate of any such person)
against any liability, cost, payment or expense described in Section 1 of this
Article VII, whether or not the Corporation would have the power to indemnify
such person against such liability.
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ARTICLE VIII
SEAL
The seal of the Corporation shall be in such form as the Board of Directors may
from time to time determine. In the event it is inconvenient to use such a seal
at any time, the words "Corporate Seal" or the word "Seal" accompanying the
signature of an officer signing for and on behalf of the Corporation shall be
the seal of the Corporation.
ARTICLE IX
AMENDMENT
These Bylaws may be amended at any meeting of the Board of Directors by the
affirmative vote of not less than a majority of the Directors present at a
meeting at which a quorum is present provided notice of such meeting containing
a copy of the proposed amendment shall have been given not less than five nor
more than ninety days prior thereto; provided, however, that the Board of
Directors shall not have the power to alter, amend or repeal provisions of these
Bylaws or adopt new bylaw provisions directly relating to the election of the
Board of Directors.
Any bylaw provision adopted by the Board of Directors may be altered, amended or
repealed and new provisions adopted by the Members by the affirmative vote of
not less than a majority of the Members present at a meeting at which a quorum
is present, provided notice of such meeting containing a copy of the proposed
amendment shall have been given. The Members may prescribe that any bylaw
provisions adopted by them shall not be altered, amended or repealed by the
Board of Directors
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EXHIBIT 10.5.2(a)
AMENDMENT, DATED AS OF JANUARY 15, 1995,
TO THE PLANT HAL WANSLEY
OPERATING AGREEMENTS
by and among
GEORGIA POWER COMPANY
and
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION CORPORATION)
and
MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA
(A PUBLIC CORPORATION AND INSTRUMENTALITY OF
THE STATE OF GEORGIA)
and
CITY OF DALTON
(AN INCORPORATED MUNICIPALITY IN THE STATE OF GEORGIA)
<PAGE>
AMENDMENT
TO THE PLANT HAL WANSLEY
OPERATING AGREEMENT
TABLE OF CONTENTS
Section No.
1. Certain Definitions. . . . . . . . . . . . . . . . . .2
2. Amendment to Create Section 9. . . . . . . . . . . . .2
3. Amendment to Section 1(b). . . . . . . . . . . . . . 10
4. Amendment to Section 1 (d) . . . . . . . . . . . . . 10
5. Amendment to Create Section 1(e) . . . . . . . . . . 10
6. Amendment to Create Section 1(f) . . . . . . . . . . 14
7. Amendment to Create Section 1(g) . . . . . . . . . . 25
8. Amendment to Create Section 1(h) . . . . . . . . . . 34
9. Amendment to Section 2(a). . . . . . . . . . . . . . 41
10. Amendment to Section 2(b). . . . . . . . . . . . . . 44
11. Amendment to Create Section 2(c) . . . . . . . . . . 46
12. Amendment to Section 3(b). . . . . . . . . . . . . . 47
13. Amendment to Section 3(d). . . . . . . . . . . . . . 56
14. Amendment to Create Section 10 . . . . . . . . . . . 56
15. Effectiveness of this Amendment. . . . . . . . . . . 57
16. Miscellaneous. . . . . . . . . . . . . . . . . . . . 58
APPENDICES
A. Captital Budgets, Operating Budgets, Scheduling and
Dispatch Budget, Maintenance Schedules and Fuel Plan
B. Plant Wansley Operations and Maintenance Expenses
<PAGE>
THIS AGREEMENT, dated as of January 15, 1995, is by and
among GEORGIA POWER CORPORATION ("GPC"), a corporation organized
and existing under the laws of the State of Georgia, OGLETHORPE
POWER CORPORATION (AN ELECTRIC MEMBERSHIP GENERATION &
TRANSMISSION CORPORATION), an electric membership corporation
organized and existing under the laws of the State of Georgia and
formerly known as Oglethorpe Electric Membership Corporation
("OPC"), MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA, a public
corporation and an instrumentality of the State of Georgia
("MEAG"), and the CITY OF DALTON, an incorporated municipality in
the State of Georgia ("Dalton") and is the Amendment to those
certain Plant Hall Wansley Operating Agreements, dated as of
March 26, 1976, August 27, 1976 and April 19, 1977 (the
"Operating Agreements"), between GPC and Oglethorpe Electric
Membership Corporation, GPC and MEAG, and GPC and Dalton,
respectively.
W I T N E S S E T H:
A. The Participants have previously entered into the
Operating Agreements providing, among other things, for the
management, control, maintenance and operation of Plant Hal
Wansley.
B. The Participants mutually desire to alter and
modify in this Agreement certain provisions of their respective
Operating Agreements relating to fuel procurement and accounting
<PAGE>
and relating to scheduling and dispatching of the Units such that
the Participants' prior agreements and understandings shall be
superseded hereby.
NOW, THEREFORE, in consideration of the premises and the
mutual promises and agreements herein set forth, the Participants
amend each of their respective Operating Agreements and mutually
agree among themselves as follows:
1. Certain Definitions. Capitalized terms and
phrases used and not otherwise defined in this Agreement shall
have the respective meanings assigned to them by the Operating
Agreements, unless the context or use clearly indicates
otherwise. All rules of interpretation, construction, or both,
set forth in the Operating Agreements shall apply with equal
force and effect to this Amendment.
2. Amendment to Create Section 9 of the Operating
Agreements. Section 9 of each of the Operating Agreements hereby
reads as follows:
"9. Certain Definitions.
(a) APPLICABLE ACCOUNTING PERIOD. "Applicable Accounting
Period" shall mean that period of operation which occasioned the
need to incur the particular Operating Cost incurred. Depending
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on the particular Operating Cost involved, such period may be a
month, a calendar year or a longer period. For example, for
planned, periodic maintenance of the Units, the Applicable
Accounting Period shall be the time since the last planned
maintenance outage during which the same or similar maintenance
was last conducted. If such a period cannot be readily
determined for a particular Operating Cost, then the Applicable
Accounting Period shall be the most recent 12 calendar months.
(b) COMMON COAL STOCKPILE. "Common Coal Stockpile" shall
refer to that portion of the Plant Wansley Coal Stockpile
attributable to the ownership interests of the Common Coal
Stockpile Participants from time to time pursuant to Section 1(g)
of this Agreement.
(c) COMMON COAL STOCKPILE COSTS. "Common Coal Stockpile
Costs" shall mean all costs incurred by GPC on its own behalf and
as agent for the other Common Coal Stockpile Participants that
are allocable to the acquisition, processing, transportation,
delivering, handling, storage, accounting, analysis, measurement
and disposal of coal for the Common Coal Stockpile, including,
without limitation, any advance payments in connection therewith,
less credits related to such costs applied as appropriate, and
including, without limitation, that portion of administrative and
general expenses which is properly and reasonably allocable to
acquisition and management of coal for the Common Coal Stockpile
and for which the incurring party has not been otherwise
reimbursed by the other Common Coal Stockpile Participants.
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Common Coal Stockpile Costs shall not include Other Fuel Costs,
Separate Coal Stockpile Costs and amortization of the Plant
Wansley initial fossil fuel supply (including, without
limitation, unrecoverable base coal).
(d) COMMON COAL STOCKPILE PARTICIPANTS. "Common Coal
Stockpile Participants" shall mean such Participants as are
participating in the Common Coal Stockpile from time to time.
(e) COMMON DISPATCH PARTICIPANT. "Common Dispatch
Participant" shall mean those Participants which are not Separate
Dispatch Participants.
(f) COMMITTING PARTICIPANTS. "Committing Participants"
shall have the meaning assigned in Section 3(b)(iii) of this
Agreement.
(g) COMMON PROCUREMENT. "Common Procurement" shall have
the meaning assigned in Section 1(f)(i) of this Agreement.
(h) COMMON PROCUREMENT PARTICIPANT. "Common Procurement
Participant" shall mean, initially, the Common Coal Stockpile
Participants and each Separate Coal Stockpile Participant (i)
which has not exercised its rights under Section 1(e)(i) of this
Agreement, (ii) which has not otherwise been found by a vote of
the Common Procurement Participants owning at least a majority
percentage undivided ownership interest in Plant Wansley of the
aggregate undivided ownership interests in Plant Wansley of the
then Common Procurement Participants (excluding the percentage
ownership interest in Plant Wansley of the Common Procurement
Participant under consideration), to have violated the policies
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and rules for Common Procurement Participants established from
time to time by GPC or (iii) which has been reestablished as a
Common Procurement Participant pursuant to Section 1(f) of this
Agreement.
(i) FERC. The "FERC" shall mean the Federal Energy
Regulatory Commission or any entity succeeding to the powers and
functions thereof.
(j) GEORGIA INTEGRATED TRANSMISSION SYSTEM. "Georgia
Integrated Transmission System" shall mean the integrated
transmission system owned by GPC, OPC, MEAG and Dalton pursuant
to those certain Agreements between GPC and OPC dated as of
January 6, 1975 and June 9, 1986, those certain Agreements
between GPC and MEAG dated as of August 27, 1976, and those
certain Agreements between GPC and Dalton dated as of August 27,
1976, as any one or more of those Agreements may be amended,
modified, revised, restated or superseded from time to time, or
any successor transmission system thereto.
(k) NONCOMMITTING PARTICIPANTS. "Noncommitting
Participants" shall mean as of any particular time, those
Participants which at such time are not Committing Participants
pursuant to Section 3(b)(iii) of this Agreement.
(l) OPERATING AGREEMENTS. "Operating Agreements" shall
refer to the Plant Hal Wansley Operating Agreements between (i)
GPC and OPC, dated as of March 26, 1976, (ii) GPC and MEAG, dated
as of August 27, 1976, and (iii) GPC and the City of Dalton,
Georgia, dated as of April 19, 1977.
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(m) OPERATING COSTS. "Operating Costs" shall mean all
expenses incurred by GPC in respect to Plant Wansley and properly
recordable in accordance with the Operating Expense Instructions
and in appropriate accounts as set forth in the Uniform System of
Accounts, but shall not include Common Coal Stockpile Costs,
Separate Coal Stockpile Costs, or Other Fuel Costs.
(n) OTHER FUEL COSTS. "Other Fuel Costs" shall mean all
costs and expenses, other than Common Coal Stockpile Costs and
Separate Coal Stockpile Costs, incurred by GPC on its own behalf
and as agent for the other Participants that are allocable to the
acquisition, processing, transportation, delivering, handling,
storage, accounting, analysis, measurement and disposal of fossil
materials required for Plant Wansley, including, without
limitation, any advance payments in connection therewith, less
credits related to such costs applied as appropriate, and
including, without limitation, that portion of administrative and
general expenses which is properly and reasonably allocable to
acquisition and management of fossil fuel (other than coal for
the Common Coal Stockpile and the Separate Coal Stockpiles) for
Plant Wansley. Other Fuel Costs shall not include Common Coal
Stockpile Costs, Separate Coal Stockpile Costs and amortization
of the Plant Wansley initial fossil fuel supply (including,
without limitation, unrecoverable base coal).
(o) OWNERSHIP AGREEMENTS. "Ownership Agreements" shall
refer to the Plant Hal Wansley Purchase and Ownership
Participation Agreement between (i) GPC and OPC, dated as of
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March 26, 1976, (ii) GPC and MEAG, dated as of August 27, 1976
and (iii) GPC and the City of Dalton, dated as of April 19, 1977.
(p) PARTICIPANT. "Participant" and "Participants" shall
refer, individually or collectively, as the case may be, to GPC,
OPC, MEAG, and Dalton and to any transferee or assignee of any of
them pursuant to Section 5(f) of the Ownership Agreement.
(q) PLANT WANSLEY. "Plant Wansley" shall have the meaning
set forth in Section 1(a) each of the respective Ownership
Agreements.
(r) PLANT WANSLEY COAL STOCKPILE. The "Plant Wansley Coal
Stockpile" shall mean the coal stockpile maintained from time to
time for the Units.
(s) PLANT WANSLEY PARTICIPATION AGREEMENTS. "Plant Wansley
Participation Agreements" shall mean the Ownership Agreements,
and Operating Agreements, collectively.
(t) SEPARATE COAL PROCUREMENT. "Separate Coal Procurement"
shall mean the procurement of coal pursuant to the standards and
procedures set forth under Section 1(e)(i) of this Operating
Agreement.
(u) SEPARATE COAL STOCKPILE. "Separate Coal Stockpile"
shall have the meaning assigned in Section 1(g) of this
Agreement.
(v) SEPARATE COAL STOCKPILE COSTS. "Separate Coal
Stockpile Costs" shall mean with respect to each Separate Coal
Stockpile Participant all costs incurred by GPC as agent for such
Separate Coal Stockpile Participant that are allocable to the
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acquisition, processing, transportation, delivering, handling,
storage, accounting, analysis, measurement and disposal of coal
for such Separate Coal Stockpile Participant, including, without
limitation, all costs incurred by GPC in administering fuel and
transportation contracts entered into by such Separate Coal
Stockpile Participant pursuant to any one or more of Sections
1(e)(i), 1(f) or 1(g) of this Agreement, and including any
advance payments in connection therewith, less credits related to
such costs applied as appropriate, and including that portion of
administrative and general expenses which is properly and
reasonably allocable to acquisition and management of coal for
such Separate Coal Stockpile Participant's Separate Coal
Stockpile and for which the incurring party has not otherwise
been reimbursed. Separate Coal Stockpile Costs shall not include
Common Coal Stockpile Costs, Other Fuel Costs and amortization of
the Plant Wansley initial fossil fuel supply, including, without
limitation, unrecoverable base coal.
(w) SEPARATE COAL STOCKPILE PARTICIPANT. "Separate Coal
Stockpile Participant" shall mean the Participants making an
election to discontinue participation in the Common Coal
Stockpile pursuant to 1(g)(iii) of this Agreement, or which has
otherwise entered into an agreement with GPC to become a Separate
Coal Stockpile Participant pursuant to subsection (vi) of
Section 1(g) of this Agreement. Such Participants are referred
to individually as a "Separate Coal Stockpile Participant" and
collectively as "Separate Coal Stockpile Participants."
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(x) SEPARATE DISPATCH PARTICIPANT. "Separate Dispatch
Participant" shall mean those Participants which have become
Separate Coal Stockpile Participants pursuant to the provisions
of 1(g) of this Agreement and which exercise separate dispatch
rights under Section 3(b)(iii) of this Agreement.
(y) SEPARATE PROCUREMENT PARTICIPANT. "Separate
Procurement Participant" shall mean each Separate Coal Stockpile
Participant (i) which has exercised its rights under Section
1(e)(i) of this Agreement, or (ii) which has been found by a vote
of the Common Procurement Participants owning at least a majority
percentage undivided ownership interest in Plant Wansley of the
aggregate undivided ownership interests in Plant Wansley of the
then Common Procurement Participants (excluding the percentage
ownership interest in Plant Wansley of the Common Procurement
Participant under consideration) to have violated the policies
and rules for Common Procurement Participants established from
time to time by GPC and which has not been reestablished as a
Common Procurement Participant pursuant to Section 1(f) of this
Agreement.
(z) SPOT COAL. "Spot Coal" shall mean all coal purchased
for the Common Coal Stockpile or any Separate Coal Stockpile
under an arrangement of acquisition for a period of less than one
year.
(aa) UNIFORM SYSTEM OF ACCOUNTS. The "Uniform System of
Accounts" shall mean the FERC Uniform System of Accounts
prescribed for Public Utilities and Licensees subject to the
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provisions of the Federal Power Act, as the same now exist or may
be hereafter amended by the FERC.
(bb) UNITS. The "Units" shall refer to Wansley Unit No. 1
and Wansley Unit No. 2 collectively."
3. Amendment to Section 1(b) of the Operating Agreements.
The first and second sentences of Section 1(b), AUTHORITY FOR
OPERATION AND MANAGEMENT, of each of the Operating Agreements,
are hereby amended to add the phrase "(e), (f), (g) and (h)"
after the words "provisions of Section 1(d)."
4. Amendment to Section 1(d) of the Operating Agreements.
The second paragraph of Section 1(d), OPERATION, of each of the
Operating Agreements, is hereby amended to add the following
sentence to the end thereto.
"Notwithstanding the foregoing, in no event shall the
provisions of this second paragraph of Section 1(d) apply to
a Separate Dispatch Participant."
5. Amendment to Create Section 1(e) of the Operating
Agreements. Section 1, GENERAL OBLIGATIONS AND RIGHTS OF
PARTIES, of each of the Operating Agreements, is hereby amended
to add the following subsection (e) thereto.
"(e) Fuel Procurement by Participants other than GPC.
(i) Separate Procurement by Separate Procurement
Participants - Generally. Any Separate Coal Stockpile
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Participant shall be permitted to supply, solely for its own
account and solely for its Separate Coal Stockpile, its coal
requirements for its undivided ownership interests in the Units
upon the following conditions:
(A) Prior to entering into each coal supply
arrangement, such Separate Coal Stockpile Participant must
demonstrate that such arrangement complies with the
provisions of this Section 1(e)(i) and must demonstrate (1)
that the proposed coal to be procured meets or exceeds the
quality and compatibility standards set by GPC and will
enable the Units to operate at their normal operational
levels in compliance with all governmental regulations
applying thereto; (2) that transportation for such coal can
be arranged by such Separate Coal Stockpile Participant
which is compatible with the transportation and fuel
delivery facilities at Plant Wansley; and (3) all parties
associated with the supply of such coal, including, without
limitation, the vendor, broker, mine operator and
transporter are reliable and technically and financially
qualified. Within six months following the date of the
first election by a Separate Coal Stockpile Participant to
discontinue participation in the Common Coal Stockpile, GPC
shall develop written guidelines setting forth standards and
procedures for compliance by a Separate Coal Stockpile
Participant with the provisions of this Section 1(e)(i)(A),
including, without limitation, standards relating to the
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operational characteristics of the Units and setting forth
the standard contract terms and provisions referred to in
Section 1(e)(i)(B).
(B) At least 90 days prior to the first scheduled
delivery of coal from any such arrangement, the Separate
Coal Stockpile Participant proposing to participate in the
arrangement shall give GPC written notice of its intent to
enter into such coal supply arrangement, shall make the
demonstrations set forth in (A) above to the reasonable
satisfaction of GPC, as agent, and, thereafter shall enter
into a valid, binding and enforceable contract for such coal
containing such standard terms and conditions as are
required by the guidelines established by GPC (other than
price, quantity, and duration), which contract shall be
consistent with the demonstrations provided for in (A) above
and providing by its terms for GPC (or any successor agent
hereunder) to have sole authority for all administration
with respect thereto, including, without limitation,
coordination with the mine operator, scheduling of
deliveries, transportation arrangements and testing;
provided, however, that except as otherwise set forth
herein, the Separate Coal Stockpile Participant shall have
sole authority, subject to the policies and procedures
adopted or revised from time to time by GPC, to make or
direct major economic decisions which are not administrative
in nature, including, without limitation, to extend,
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terminate or renegotiate the contract or exercise options
thereunder and to sue the supplier.
Except as set forth in Section 1(f) of this Agreement, GPC
shall have no obligation to purchase, arrange for or contract for
the purchase of coal for any Separate Coal Stockpile Participant.
If, at any time, any one or more deliveries of coal from any
such coal supply arrangement fail in any respect to satisfy the
requirements as to quality and characteristics specified in
clause (A) above, fail to comply with any material provision of a
contract governing such coal supply arrangements or are
incompatible with the Units or any governmental regulations
applying thereto, then, GPC may decline to use the coal from any
such delivery, may order a suspension of any further deliveries
from such coal supply arrangement until receipt of adequate
assurances satisfactory to it that all future deliveries of coal
will conform to the delivery schedules and to all of the other
requirements of the Plant Wansley Coal Stockpile and the Units,
as the case may be, and may take any other action and exercise
any other rights which may be permitted by law or by the
provisions of any contracts with respect to such coal supply
arrangement.
GPC shall not be liable to any other Participant for any
actions taken by it under this Section 1(e)(i), and the Separate
Procurement Participant participating in any such coal supply
arrangement shall indemnify and hold GPC and the other
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Participants harmless from and against any and all costs,
expenses, claims, judgments and fines, including, without
limitation, legal fees incurred in defense of any lawsuit or
other proceeding, as a result of any such action taken by GPC,
except that GPC shall not be so indemnified and held harmless
from the payment of legal fees incurred in defense of any lawsuit
brought by a Separate Procurement Participant proposing to
participate in such arrangement seeking specific performance or
injunctive relief against GPC to reverse GPC's determination that
such a proposed arrangement does not comply with the terms and
conditions of this Section 1(e)(i)."
6. Amendment to Create Section 1(f) of the Operating
Agreements. Section 1, GENERAL OBLIGATIONS AND RIGHTS OF
PARTIES, of each of the Operating Agreements, is hereby amended
to add the following subsection (f) thereto.
"(f) Fossil Fuel.
(i) (A) Coal and Transportation Procurement by
GPC - Initiation Until Receipt of Offers. Subject to
the provisions of Section 1(d) and 1(e) of this
Agreement, GPC, on its own behalf and as agent for the
other Participants, shall have sole authority to and
shall arrange for and acquire all fossil fuel and fuel
transportation for the Units consistent with such
policies and procedures with respect thereto as may be
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adopted from time to time by GPC and shall have sole
authority to administer all fuel and fuel
transportation standards for fossil fuel for the Units
consistent with such standards with respect thereto as
may be adopted from time to time by GPC. GPC, on its
own behalf and as agent for the other Participants,
shall procure coal and transportation from time to time
for the Common Coal Stockpile and for each of the
Separate Coal Stockpile Participants which is at such
time a Common Procurement Participant. At such times as
GPC deems it appropriate to procure coal or
transportation for the Common Coal Stockpile, GPC shall
consult with each of the Separate Coal Stockpile
Participants which are then Common Procurement
Participants to determine their procurement
requirements for their Separate Coal Stockpiles and to
determine the procurement strategy desired by each of
the Common Procurement Participants. At any other time
a Separate Coal Stockpile Participant which at such
time is also a Common Procurement Participant may
request that GPC commence a coal or transportation
procurement for the requirements of such Separate Coal
Stockpile Participant's Separate Coal Stockpile, and
GPC likewise shall consult with the other Separate Coal
Stockpile Participants which are then Common
Procurement Participants to determine their procurement
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requirements for their Separate Coal Stockpiles and to
determine the procurement strategy desired by each of
the other Common Procurement Participants. In each
case, GPC, on its own behalf and as agent for the other
Common Coal Stockpile Participants which are then
Common Procurement Participants and for the Separate
Coal Stockpile Participants expressing a desire to
participate in such Common Procurement, shall use its
reasonable best efforts to develop a procurement
strategy to accommodate the requirements and
procurement strategies of GPC for the Common Coal
Stockpile and of the Separate Coal Stockpile
Participants which are then Common Procurement
Participants expressing a desire to participate in such
Common Procurement; provided, however, that GPC shall
not be required to accommodate the requirements or
procurement strategy of any Separate Coal Stockpile
Participant which is a Common Procurement Participant
that is incompatible with the guidelines with respect
to Common Procurement adopted from time to time by the
Plant Wansley Operating Committee or which is
incompatible with the requirements or procurement
strategy desired by the Common Procurement Participants
initiating the Common Procurement. GPC, on its own
behalf and as agent for the other Common Coal Stockpile
Participants and for each of the Separate Coal
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Stockpile Participants which are then Common
Procurement Participants electing to participate in
such Common Procurement, shall then initiate a Common
Procurement in an effort to obtain offers from coal
vendors to sell coal, offers from transporters to
provide transportation, or both (individually, an
"Offer" and collectively, "Offers") to meet the
requirements and procurement strategy of GPC for the
Common Coal Stockpile and of each of the Separate Coal
Stockpile Participants which are Common Procurement
Participants electing to participate in such Common
Procurement for its Separate Coal Stockpile.
(B) Coal and Transportation Procurement by GPC -
After Receipt of Offers. Upon receipt of one or more
Offers, GPC, on its own behalf and as agent for the
other Participants, shall offer the Separate Coal
Stockpile Participants which are Common Procurement
Participants electing to participate in such Common
Procurement the opportunity to participate in each such
Offer. If two or more of such Common Procurement
Participants (including, without limitation, GPC on
behalf of the Common Coal Stockpile) elect to
participate in any particular Offer, GPC, as agent for
the Common Coal Stockpile and each Separate Coal
Stockpile Participant which is a Common Procurement
Participant shall have the right to participate in such
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Offer up to the proportion that such Common Procurement
Participant's percentage undivided ownership interest
in Plant Wansley bears to the aggregate of the
percentage undivided ownership interests in Plant
Wansley of all Common Procurement Participants electing
to participate in such Offer, and for such purpose, in
computing GPC's percentage undivided ownership interest
in Plant Wansley there shall be added to GPC's
percentage undivided ownership interest in Plant
Wansley the percentage undivided ownership interest in
Plant Wansley of the other Participants which are then
Common Coal Stockpile Participants. If GPC, as agent
for the Common Coal Stockpile, or any of the Separate
Coal Stockpile Participants which are Common
Procurement Participants elect to participate in any
such Offer on a timely basis, GPC will negotiate with
the supplier of such Offer in an effort to develop
final contract terms and conditions satisfactory to
GPC, as agent for the Common Coal Stockpile, and the
Separate Coal Stockpile Participants which are Common
Procurement Participants electing to participate in
such Offer, and GPC, as agent for the Common Coal
Stockpile, and each participating Separate Coal
Stockpile Participant which is a Common Procurement
Participant shall enter into a separate contract with
such supplier, which contract for such Separate Coal
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Stockpile Participant shall provide that GPC shall be
the exclusive agent on behalf of such Separate Coal
Stockpile Participant for the administration of such
contract upon such terms and conditions as are
satisfactory to GPC; provided, however, that except as
otherwise set forth herein, such Separate Coal
Stockpile Participant shall have sole authority,
subject to the policies and procedures adopted or
revised from time to time by the Plant Wansley
Operating Committee, to make or direct major economic
decisions which are not administrative in nature,
including, without limitation, to extend, terminate or
renegotiate the contract or exercise options thereunder
and to sue the supplier. GPC makes no representation
or warranty that any Common Procurement effort will
satisfy either the requirements or the procurement
strategy of any Participant, and GPC shall have no
liability to any Participant in these regards.
(C) Separate Procurement. Upon (i) exercise by
any Separate Coal Stockpile Participant of a Separate
Procurement under Section 1(e)(i) of this Operating
Agreement or (ii) violation by any Separate Coal
Stockpile Participant, which has been found by a vote
of the Common Procurement Participants owning at least
a majority percentage undivided ownership interest in
Plant Wansley of the aggregate undivided ownership
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interest in Plant Wansley of the then Common
Procurement Participants (excluding the percentage
undivided ownership interest in Plant Wansley of the
Common Procurement Participant under consideration), of
any policy or rule for Common Procurement Participants
established from time to time by the Plant Wansley
Operating Committee, such Separate Coal Stockpile
Participant shall immediately cease to be a Common
Procurement Participant, and GPC shall have no
obligation to procure coal or transportation on behalf
of such Separate Coal Stockpile Participant other than
for Spot Coal. The remaining Common Procurement
Participants owning in the aggregate more than 50%
undivided ownership interest in Plant Wansley out of
the total percentage undivided ownership interest in
Plant Wansley of the then remaining Common Procurement
Participants may vote to reestablish such Separate Coal
Stockpile Participant's status as a Common Procurement
Participant. Otherwise, GPC shall have no obligation
to procure coal or transportation on behalf of any
Separate Coal Stockpile Participant which has ceased to
be a Common Procurement Participant, other than for
Spot Coal. A Separate Procurement Participant shall
have no right to receive or review any information
relating to any Common Procurement effort or any Offers
or contracts resulting from a Common Procurement effort
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except as may otherwise be provided in subsection
(i)(E) of this Section 1(f) relating to Spot Coal.
(D) Review of Offers. Any Common Procurement
Participant that initiates a Common Procurement and any
Common Procurement Participant (other than GPC as
agent) that elects to review information relating to
any Offer shall pay that portion of the costs of the
Common Procurement resulting in such Offer in the
proportion that such Common Procurement Participant's
percentage undivided ownership interest in Plant
Wansley bears to the aggregate of the percentage
undivided ownership interests in Plant Wansley of the
Common Procurement Participants participating in such
Common Procurement or reviewing any information
relating to any Offer, whether or not such Common
Procurement Participant elects to participate in any
such Offer and all other Common Procurement
Participants electing to participate in any such Offer
(which shall include the Common Coal Stockpile
Participants if GPC, as agent for the Common Coal
Stockpile, elects to participate in such Offer) shall
each pay a portion of such costs computed on the same
basis. Upon request, GPC shall inform a Separate Coal
Stockpile Participant which is a Common Procurement
Participant that did not initiate the subject Common
Procurement of the approximate cost to review the
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information pertaining to the Offer. No Participant
shall use any information furnished to it by or on
behalf of GPC, or any other Common Procurement
Participant concerning any such Offers in a manner to
prejudice the efforts of GPC and the other Common
Procurement Participants in any Common Procurement
effort. As to any particular information such
prohibition shall terminate two years following the
date such information was received by such Participant.
(E) Spot Coal Procurement. Notwithstanding the
foregoing provisions of Sections 1(e), 1(f) and 1(g) of
this Agreement, GPC shall be the exclusive agent to act
on behalf of itself and all other Participants for the
procurement, transportation and delivery of Spot Coal.
All Offers to sell Spot Coal shall be made available to
GPC on its own behalf and on behalf of the other then
Common Coal Stockpile Participants, and to each
Separate Coal Stockpile Participant (whether or not
such Separate Coal Stockpile Participant is then a
Common Procurement Participant) on the same basis that
an Offer under a Common Procurement is made available
to the Common Procurement Participants. GPC shall
remain a Common Procurement Participant (both as buyer
and seller) so long as there remains one or more other
Common Procurement Participants.
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(ii) Each Participant shall have the right to make
whatever financial arrangements it may desire, whether by
lease, security transaction or otherwise, for the discharge
of its fossil fuel payment obligations so long as such
arrangements do not adversely affect the rights of the other
Participants.
(iii) Except as otherwise agreed by the Common Coal
Stockpile Participants or as otherwise provided in Sections
2(c) and 3(b) of this Agreement, the Common Coal Stockpile
Participants shall pay Common Coal Stockpile Costs and shall
own coal in the Common Coal Stockpile in proportion to their
respective undivided ownership interests in the Common Coal
Stockpile.
(iv) Except as otherwise agreed to by the Participants
or as otherwise provided in Sections 2(c) and 3(b) of this
Agreement, each Separate Coal Stockpile Participant shall
pay all Separate Coal Stockpile Costs which are properly and
reasonably allocable to such Separate Coal Stockpile
Participant's Separate Coal Stockpile, determined in
accordance with GPC's standard accounting practices, which
shall comply with the Uniform System of Accounts in effect
from time to time except as provided in subsection (vii) of
Section 1(g) hereof.
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(v) Except as otherwise agreed to by the Participants
or as otherwise provided in Sections 2(c) and 3(b) of this
Agreement, the Participants shall pay Other Fuel Costs and
shall own fossil fuel (other than coal allocated to the
Common Coal Stockpile and to the Separate Coal Stockpiles)
in proportion to their respective percentage undivided
ownership interests in Plant Wansley.
(vi) If on or prior to 30 days following OPC's receipt
of approval of this Amendment from the Administrator of the
Rural Electrification Administration, any Participant
exercises its election to become a Separate Coal Stockpile
Participant, then within six months following the date of
the first election by a Separate Coal Stockpile Participant,
GPC shall develop written procedures for Separate Coal
Procurement and Common Procurement and shall submit such
procedures to the other Participants which shall adopt such
procedures by vote of Participants owning at least an
aggregate 85% undivided ownership interest in Plant Wansley
within two months of submission or which shall revise such
procedures, such revisions to be approved by Participants
owning at least an aggregate 85% undivided ownership
interest in Plant Wansley. In the absence of such adoption
or approval of revisions within two months of submission,
the procedures submitted by GPC shall go into effect as the
procedures adopted by the Participants. The procedures may
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be revised thereafter only by approval of such Participants
owning at least an aggregate 85% undivided ownership
interest in Plant Wansley. In the absence of the approval
of any revisions to the procedures by such 85% vote, the
revisions to the procedures shall go into effect as
submitted by GPC."
7. Amendment to Create Section 1(g) of the Operating
Agreements. Section 1, GENERAL OBLIGATIONS AND RIGHTS OF
PARTIES, of each of the Operating Agreements, is hereby amended
to add the following subsection (g) thereto.
"(g) Common Coal Stockpile and Separate Coal
Stockpiles.
(i) In order to provide for the ownership by the
Participants of interests in a Common Coal Stockpile
and to provide for the sharing among the Participants
of Common Coal Stockpile Costs, the Participants agree
that initially, all Participants shall participate in
the Common Coal Stockpile.
GPC shall cause an adjustment to be made to the
account of each Common Coal Stockpile Participant (A)
so that the quantity of coal in the Common Coal
Stockpile shall thereafter be allocated to the Common
Coal Stockpile Participants according to such Common
Coal Stockpile Participant's percentage undivided
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ownership interest in the Common Coal Stockpile as set
forth in the following sentence, and (B) so that the
average cost per ton or, following a division of the
Plant Wansley Coal Stockpile into the Common Coal
Stockpile and one or more Separate Coal Stockpiles
pursuant to Section 1(g)(iii) of this Agreement, the
average cost per British Thermal Unit ("Btu") of the
coal in the Common Coal Stockpile is the same for each
Common Coal Stockpile Participant, with appropriate
charges and credits to be made to the accounts of such
Common Coal Stockpile Participants, all in accordance
with GPC's standard accounting practices which shall
comply with the Uniform System of Accounts in effect
from time to time except as provided in subsection
(vii) of Section 1(g) hereof. Following each such
allocation, each Common Coal Stockpile Participant
shall own a percentage undivided ownership interest in
the Common Coal Stockpile in the proportion that such
Common Coal Stockpile Participant's percentage
undivided ownership interest in Plant Wansley bears to
the aggregate of all Common Coal Stockpile
Participants' percentage undivided ownership interest
in Plant Wansley.
(ii) All Common Coal Stockpile Costs incurred in
connection with the Common Coal Stockpile shall be
allocated among the Common Coal Stockpile Participants
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at the time such Common Coal Stockpile Costs are
incurred in the same respective percentages of each
Common Coal Stockpile Participant's undivided ownership
interest from time to time in the Common Coal Stockpile
at that particular time and, subject to the provisions
of Sections 2(c) and 3(b) of this Agreement, the Common
Coal Stockpile Costs shall be paid as provided in
Sections 1(f), 2(b) and 2(c) of this Agreement;
provided, however, that at the end of each calendar
month, GPC shall cause an adjustment to be made among
the Common Coal Stockpile Participants in accordance
with the amount of coal (or, following a division of
the Plant Wansley Coal Stockpile into the Common Coal
Stockpile and one or more Separate Coal Stockpiles
pursuant to Section 1(g)(iii) of this Agreement, the
amount of Btus) actually consumed by each of the Common
Coal Stockpile Participant's undivided ownership
interest in each of the Units, all in accordance with
GPC's standard accounting practices which shall comply
with the Uniform System of Accounts in effect from time
to time except as provided in subsection (vii) of
Section 1(g) hereof.
All Other Fuel Costs incurred in connection with
the Units shall be allocated among the Participants at
the time such Other Fuel Costs are incurred in the same
respective percentages of each Participant's percentage
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undivided ownership interest in Plant Wansley at that
particular time, and the Other Fuel Costs shall be paid
as provided in Sections 1(f), 2(b) and 2(c) of this
Agreement; provided, however, that at the end of each
calendar month, GPC shall cause an adjustment to be
made among the Participants in accordance with the
amount of fuel (other than coal) actually consumed by
each of the Participants all in accordance with GPC's
standard accounting practices which shall comply with
the Uniform System of Accounts in effect from time to
time except as provided in subsection (vii) of Section
1(g) hereof.
(iii) Each Participant (other than GPC) may elect
to discontinue participation in the Common Coal
Stockpile by delivery of written notice to GPC of such
election not later than 30 days following OPC's receipt
of approval of this Amendment from the Administrator of
the Rural Electrification Administration. Within six
months following the date of the first election by a
Separate Coal Stockpile Participant, GPC, as agent for
the other Participants, shall cause an adjustment to be
made to the Common Coal Stockpile and to the account of
each Separate Coal Stockpile Participant so that (A)
the quantity of coal allocated to the Common Coal
Stockpile will equal the percentage undivided ownership
interests of the remaining Common Coal Stockpile
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Participants and so that the quantity of coal allocated
to each Separate Coal Stockpile Participant's account
will equal its percentage undivided ownership interest
in the Common Coal Stockpile at the time such
adjustment is made, and (B) the average cost per ton
and average cost per Btu for the Common Coal Stockpile
and for each Separate Coal Stockpile are the same. GPC
shall notify each of the Participants immediately after
such an adjustment has been made of (l) the quantity of
coal in the Common Coal Stockpile and in each Separate
Coal Stockpile and (2) the average cost per ton and
average cost per Btu for the Common Coal Stockpile and
for each Separate Coal Stockpile. Thereafter, each
Separate Coal Stockpile Participant shall be entitled
only to use coal available in its Separate Coal
Stockpile account for the operation of its undivided
ownership interests in the Units, and the remaining
Common Coal Stockpile Participants shall be entitled to
use only coal available in the account of the Common
Coal Stockpile for the operation of their undivided
ownership interests in the Units. Except as otherwise
provided in subsection (ii) of this Section 1(g), no
Participant shall be required to sell or otherwise
supply coal to any other Participant; however, GPC, on
its own behalf and as agent for the other Common Coal
Stockpile Participants, and each Separate Coal
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Stockpile Participant may buy, sell, trade or otherwise
supply coal in the Plant Wansley Coal Stockpile from
their respective accounts to one another upon such
terms as they may agree and upon prior written notice
to GPC; provided, however, that all offers to sell coal
by a Common Procurement Participant must be offered to
all of the Common Procurement Participants on the same
basis as an Offer under a Common Procurement. There
shall be allocated to each Separate Coal Stockpile
Participant's account and each Separate Coal Stockpile
Participant shall take and pay for a portion of
subsequent deliveries of coal and associated costs
(including, without limitation, "buy-out" costs, if
any) through December 1997 from that certain agreement
entered into on December 6, 1972, as amended, between
Georgia Power Company and Arch Mineral Corporation in
an amount equal to such Separate Coal Stockpile
Participant's percentage undivided ownership interest
in the Units. In addition, there shall be allocated to
each Separate Coal Stockpile Participant's account all
coal procured on behalf of such Separate Coal Stockpile
Participant by GPC pursuant to Section 1(f) of this
Agreement or procured by such Separate Coal Stockpile
Participant pursuant to Section 1(e)(i) of this
Agreement. GPC shall account for all coal allocated to
the account of each Separate Coal Stockpile Participant
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and for coal consumed by such Separate Coal Stockpile
Participant's undivided ownership interests in the
Units, all in accordance with GPC's standard accounting
practices which shall comply with the Uniform System of
Accounts in effect from time to time except as provided
in subsection (vii) of Section 1(g) hereof. No
Separate Coal Stockpile Participant nor any purchaser
of an undivided ownership interest in the Units from a
Separate Coal Stockpile Participant may elect to become
a Common Coal Stockpile Participant without the written
consent of a majority of the percentage undivided
ownership interest in Plant Wansley of the then
remaining Common Coal Stockpile Participants,
including, without limitation, GPC so long as GPC is a
Participant.
(iv) Except as otherwise provided in subsection
(vi) of this Section 1(g), unless otherwise agreed to
by Participants owning in the aggregate at least an 85%
undivided ownership interest in Plant Wansley, the
Participants recognize and agree, that the division of
the Common Coal Stockpile and each Separate Coal
Stockpile is for the purposes only of accounting,
payment and settlement of costs and entitlement to use;
that there will be no physical separation of coal at
Plant Wansley among the Common Coal Stockpile and the
Separate Coal Stockpiles and that the Common Coal
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Stockpile and the Separate Coal Stockpiles will be
physically combined and commingled into one common coal
stockpile at Plant Wansley; and that existing coal and
future deliveries of coal at Plant Wansley allocated
among the Common Coal Stockpile and the Separate Coal
Stockpiles will all be physically commingled and may be
used for the operation of the undivided ownership
interests of any Participant so long as the account of
such Participant demonstrates that there is sufficient
coal credited to its account for such operation.
Nothing in this Section 1(g)(iv) shall preclude
Participants owning in the aggregate at least an 85%
undivided ownership interest in Plant Wansley from
agreeing, upon such terms and conditions as they may
agree to, to physically separate the Plant Wansley Coal
Stockpile in the future.
(v) All discrepancies between the book inventory
and the physical inventory of the Plant Wansley Coal
Stockpile shall be charged or credited, as appropriate,
among the Common Coal Stockpile and the Separate Coal
Stockpiles and to the respective accounts of each
Participant in accordance with the amount of coal
actually consumed by the undivided ownership interests
of each Participant during the physical inventory
period to which such discrepancy relates, all as
determined in accordance with GPC's standard accounting
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practices which shall comply with the Uniform System of
Accounts in effect from time to time except as provided
in subsection (vii) of Section 1(g) hereof.
(vi) GPC and each of the other Common Coal
Stockpile Participants or any purchaser of an undivided
ownership interest in the Units may enter into whatever
other arrangements GPC and such other Common Coal
Stockpile Participant (or purchaser) may agree to with
respect to such Common Coal Stockpile Participant's (or
purchaser's) ownership interest in the Common Coal
Stockpile, including, without limitation, the creation
of further Separate Coal Stockpiles without requiring
the consent of any other Participant, so long as such
arrangement provides for Common Coal Stockpile Costs to
be paid as contemplated by this Agreement.
(vii) If on or prior to 30 days following OPC's
receipt of approval of this Amendment from the
Administrator of the Rural Electrification
Administration, any Participant exercises its election
to become a Separate Coal Stockpile Participant, then
within six months following the date of the first
election by a Separate Coal Stockpile Participant, GPC
shall develop written procedures for Separate Coal
Stockpile accounting and Common Coal Stockpile
accounting and shall submit such procedures to the
other Participants which shall adopt such procedures by
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vote of Participants owning at least an aggregate 85%
undivided ownership interest in Plant Wansley within
two months of submission or which shall revise such
procedures, such revisions to be approved by
Participants owning at least an aggregate 85% undivided
ownership interest in Plant Wansley. In the absence of
such adoption or approval of revisions within two
months of submission, the procedures submitted by GPC
shall go into effect as the procedures adopted by the
Participants. The procedures may be revised thereafter
only by approval of such Participants owning at least
an aggregate 85% undivided ownership interest in Plant
Wansley. In the absence of the approval of any
revisions to the procedures by such 85% vote, the
revisions to the procedures shall go into effect as
submitted by GPC."
8. Amendment to Create Section 1(h) of the Operating
Agreements. Section 1, GENERAL OBLIGATIONS AND RIGHTS OF
PARTIES, of each of the Operating Agreements, is hereby amended
to add the following subsection (h) thereto.
"(h) Budgets, Schedules and Plans to be Provided by
GPC to the Participants.
(i) Capital Budgets. By the date set forth in
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Appendix A, GPC shall use its reasonable best efforts to
provide to each Participant a written budget estimate of
capital costs anticipated to be incurred for a five-year
budget period for Wansley Unit No. 1 and Wansley Unit No. 2.
Each capital budget estimate shall be based on information
reasonably available. Also to be included in the capital
budget are any projects which may be charged to a
Participant on the basis of its ownership pursuant to the
Ownership Agreement. This budget estimate is to consist of
project estimate sheets for each project. For the five-year
budget period, a summary of estimates of capital
expenditures and retirements will be provided, the first
year by month and the remaining four years by annual total.
GPC may from time to time propose changes in the
capital budget estimates and revised capital budget
estimates as necessary to reflect any changes in
construction, purchasing or payment schedules, plans,
specifications or costs related to completions, renewals,
additions, replacements, modifications and disposal in
connection with the Units and GPC shall similarly submit
such proposed changes to all Participants.
Each capital budget estimate and revised capital budget
estimate shall be in a format such that for the next
calendar year each month's estimated costs are listed by
reference to the applicable Uniform System of Accounts
account number. In addition, each capital budget estimate
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and revised capital budget estimate shall be in a format
showing expected amounts that the Participant will be
billed.
GPC shall attempt to make all such completions,
renewals, additions, replacements, modifications and
disposals in connection with the Units in accordance with
the then current capital budget estimate, but GPC makes no
representation, warranty or promise of any kind as to the
accuracy of any of such capital budget estimates or that
such attempt to make all such completions, renewals,
additions, replacements, modifications and disposals in
accordance with the then current capital budget estimate
will be successful, and in no event shall GPC have any
liability to any other Participant in these regards.
Notwithstanding the foregoing provisions of this
Section 1(h)(i) with respect to the information to be
provided by GPC and applicable times and dates, the matters
set forth in Appendix A attached hereto relating to capital
budgets, as the same may be revised from time to time by
agreement among all of the Participants and GPC as agent for
the Participants, shall govern and control any such
conflicting or contrary provisions of this Section 1(h)(i).
(ii) Operating Budgets. By the date set forth in
Appendix A, GPC shall use its reasonable best efforts to
provide to each Participant a written budget estimate of
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Operating Costs including, without limitation, scheduled
outage costs (by month for the following year and in summary
fashion for the succeeding four years) anticipated to be
incurred for a five-year budget period for Wansley Unit
No. 1 and Wansley Unit No. 2. Each operating budget
estimate shall be based on information reasonably available.
Each operating budget estimate and revised operating
budget estimate shall be in a format such that for the next
calendar year each month's estimated costs are listed by
reference to the applicable Uniform System of Accounts
account number. In addition, each operating budget estimate
and revised operating budget estimate shall be in a format
showing expected amounts that the Participant will be
billed.
The operating budget for each calendar year shall be
revised as deemed necessary by GPC to reflect changed
operating conditions in such calendar year, and promptly
upon any such revision GPC shall provide to each of the
other Participants a revised operating budget. Each revised
operating budget shall include Operating Costs incurred by
GPC in the operation and maintenance of the Units prior to
the time such revised operating budget becomes effective but
not included in prior operating budgets, and shall be
supported by detail reasonably adequate for the purpose of
each Participant's reasonable review thereof.
GPC shall attempt to manage, control, operate and
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maintain the Units in accordance with the then current
operating budget so that payments to be made by the
Participants for the costs contained therein shall be, as
nearly as practicable, within the then current operating
budget and the schedules of expenditures contained therein.
Notwithstanding the foregoing, GPC makes no representation,
warranty or promise of any kind as to the accuracy of any
estimate contained in an operating budget or revised
operating budget or that any such attempt referred to in the
preceding sentence will be successful, and in no event shall
GPC have any liability to any of the other Participants in
these regards.
Notwithstanding the foregoing provisions of this
Section 1(h)(ii) with respect to the information to be
provided by GPC and applicable times and dates, the matters
set forth in Appendix A attached hereto relating to
operating budgets, as the same may be revised from time to
time by agreement among all of the Participants and GPC as
agent for the Participants, shall govern and control any
such conflicting or contrary provisions of this Section
1(h)(ii).
(iii) Maintenance Schedule. GPC agrees to submit
to the other Participants on or before the date set forth in
Appendix A, a scheduled maintenance plan for the ensuing
five calendar years. Each such plan shall describe in
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reasonable detail the contemplated time and duration of each
outage and maintenance work to be done and the estimated
cost thereof. In formulating the plan to be submitted to
the Participants, GPC shall consider any comments submitted
by the Participants to GPC prior to the date set forth in
Appendix A, and GPC shall use its reasonable best efforts to
minimize any period during which the Units are scheduled to
be out of service for maintenance at the same time.
Scheduled maintenance plans may be changed by GPC from time
to time as deemed appropriate by GPC and when so changed
shall be delivered to the other Participants. Should any
major changes be made to the maintenance schedule within a
calendar year, GPC shall use its reasonable best efforts to
provide each Participant with a revised schedule. GPC makes
no representation, warranty or promise of any kind as to the
accuracy of any estimate or other information contained in
any scheduled maintenance plan and in no event shall GPC
have any liability to any of the other Participants in these
regards. A Common Dispatch Participant shall receive
maintenance schedules for the territory.
Notwithstanding the foregoing provisions of this
Section 1(h)(iii) with respect to the information to be
provided by GPC and applicable times and dates, the matters
set forth in Appendix A attached hereto relating to
maintenance schedules, as the same may be revised from time
to time by agreement among all of the Participants and GPC
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as agent for the Participants, shall govern and control any
such conflicting or contrary provisions of this Section
1(h)(iii).
(iv) Fuel Plan. By the date set forth in Appendix
A, GPC shall prepare and submit to the other Participants
for their approval a fuel supply plan covering at least a
five-year period for the Units (the "Fuel Plan"). Each Fuel
Plan shall describe in reasonable detail each action or
contemplated action and payment and the estimated dates
thereof relating to the acquisition, transportation,
delivery and storage of fossil fuel for the Units, the
entitlement (or estimates thereof) of each Participant to
the energy generated by each of the Units for each calendar
year of the Fuel Plan pursuant to Sections 3(b) hereof, a
cash flow analysis of forecasted expenditures and credits
for each Participant for each major cost component of the
Fuel Plan by year for the period covered by the Fuel Plan,
and cash flow by months (or such other period as agreed to
by the Participants) for the first three years of each such
period. GPC may amend the Fuel Plan from time to time as it
deems appropriate and shall deliver to the other
Participants such amended Fuel Plan. GPC shall attempt to
acquire, transport, deliver and store fuel for the Units in
accordance with the Fuel Plan to the extent reasonably
practicable; provided, however, that GPC makes no
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representation, warranty or promise of any kind as to the
accuracy of any estimate or forecast or other information
contained in any Fuel Plan or that any attempt to acquire,
transport, deliver and store fuel for the Units in
accordance with the Fuel Plan will be successful, and in no
event shall GPC have any liability to any of the other
Participants in these regards.
Notwithstanding the foregoing provisions of this
Section 1(h)(iv) with respect to the information to be
provided by GPC and applicable times and dates, the matters
set forth in Appendix A attached hereto relating to Fuel
Plans, as the same may be revised from time to time by
agreement among all of the Participants and GPC as agent for
the Participants, shall govern and control any such
conflicting or contrary provisions of this Section
1(h)(iv)."
9. Amendment to Section 2(a) of the Operating Agreements.
Section 2(a), SHARING OF COSTS - GENERAL, of each of the
Operating Agreements is hereby amended by deleting such Section
2(a) in its entirety and by substituting, in lieu thereof, the
following:
"(a) Sharing of Costs - General. The Participants
shall be responsible for payment of Cost of Construction in
accordance with the provisions of the Ownership Agreement
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and shall be responsible for the payment of Separate Coal
Stockpile Costs, Common Coal Stockpile Costs and Other Fuel
Costs in accordance with the provisions of Sections 1(f),
1(g), 2(b), and 3(d) of this Agreement.
Except as otherwise provided in this Section 2, each
Participant shall be responsible for the payment of its
respective share of all Operating Costs. Each Participant's
respective share of such Operating Costs, to the extent
feasible, shall be equivalent to the proportion that the
output of energy from its undivided ownership interest in
the Units bears to the total output of energy from the Units
during the Applicable Accounting Period; provided, however,
that if there is no output of energy from the Units during
the Applicable Accounting Period, each Participant's
respective share of such Operating Costs shall be equivalent
to its respective percentage undivided ownership interest
during such accounting period in the Units, and, for those
Operating Costs which cannot be feasibly allocated based on
the Participant's output of energy from their respective
undivided ownership interests in the Units, each
Participant's respective share of such Operating Costs shall
be equivalent to its respective percentage undivided
ownership interest in the Units during such accounting
period. Operating Costs incurred in connection with Plant
Wansley shall be allocated as provided in Appendix "B"
attached hereto and incorporated herein by reference as the
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same may be revised from time to time by approval of all of
the Participants.
It is the absolute intent of the Participants to share
all items of cost, obligation and liability incurred in
connection with the Units and Plant Wansley (other than the
financing of each Participant's respective undivided
ownership interest in the Units), and not otherwise
expressly provided for, in the proportion equivalent to each
Participant's undivided ownership interest in the Units.
Notwithstanding the foregoing provisions of this
Section 2(a) or any other provision of this Agreement, in
the event any Participant sells to any other person
(including, without limitation, a Participant) any undivided
ownership interest in the Units or any portion thereof in
accordance with the provisions of Section 5(f) of the
Ownership Agreement (other than a sale or conveyance as
security for an indebtedness or in connection with the
financing of pollution control facilities), such selling
Participant's rights and obligations hereunder as a
Participant and co-owner of the Units, including the
obligation to make payments of the Operating Costs, Common
Coal Stockpile Costs, Separate Coal Stockpile Costs, Other
Fuel Costs and any other costs to be shared by the
Participants hereunder, shall be reduced to the extent of
such costs attributable to the undivided ownership interest
so sold, and all Participants shall look solely to such
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purchaser for payment of the corresponding portion of the
Operating Costs, Common Coal Stockpile Costs, Separate Coal
Stockpile Costs, Other Fuel Costs and other costs to be
shared by the Participants hereunder; provided, however,
that no such sale shall relieve any Participant from its
obligations under Section 3(d) hereof."
10. Amendment to Section 2(b) of the Operating Agreements.
Section 2(b), PAYMENT AND SETTLEMENT OF COSTS, of the Operating
Agreements is hereby amended as follows:
(i) Section 2(b)(i) of each of the Operating
Agreements is hereby amended to delete the words
"and acquisition of fuel" therefrom.
(ii) The second sentence of Section 2(b)(iii) is hereby
amended to delete the words:
In the OPC Operating Agreement: "of its 30%
share of such Operating Costs of Plant
Wansley"
In the MEAG Operating Agreement: "of its
15.1% share of such Operating Costs of Plant
Wansley"
In the Dalton Operating Agreement: "of its
1.4% share of such Operating Costs of Plant
Wansley,"
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and to substitute in each instance in lieu
thereof, the words "of its share of Operating
Costs as provided in Section 2(a), SHARING OF
COSTS-GENERAL."
(iii) Section 2(b) of each of the Operating Agreements
is hereby amended to add the following section
(vi) to the end thereof.
"(vi) Notwithstanding the foregoing provisions of
this Section 2(b), GPC agrees to establish depository
reconcilement accounts for use in billing and payment
of costs at Plant Wansley and to develop, after
consultation with the other Participants, procedures
for the implementation of such accounts. The
establishment of such accounts and the development of
such procedures shall be consistent, to the extent
practicable, with the methodologies used by GPC for the
billing and payment of costs at GPC's other jointly
owned generating facilities which implement depository
reconcilement accounting."
11. Amendment to Create Section 2(c) of the Operating
Agreements. Section 2, GENERAL FINANCIAL OBLIGATIONS, of each of
the Operating Agreements is hereby amended to add the following
subsection (c) thereto.
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"(c) Common Coal Stockpile Costs, Separate Coal Stockpile
Costs, and Other Fuel Costs.
(i) Each Participant which is at any given time a
Common Coal Stockpile Participant shall own an
undivided ownership interest in the Common Coal
Stockpile, and shall be responsible for the payment of
Common Coal Stockpile Costs in the proportions set
forth in Sections 1(f)(iii) and 1(g) of this Agreement.
Each Participant which is at any given time a Separate
Coal Stockpile Participant shall own the coal allocated
to its account and shall be responsible for payment of
Separate Coal Stockpile Costs pursuant to Sections
1(f)(iv) and 1(g) of this Agreement. Each Participant
shall own other fossil fuel and shall be responsible
for payment of Other Fuel Costs for the Units in
proportion to its percentage undivided ownership
interest from time to time in the Units. Not later
than 120 days prior to the beginning of each calendar
year, GPC shall deliver to the other Participants an
estimate of the Common Coal Stockpile Costs or Separate
Coal Stockpile Costs, as the case may be, and Other
Fuel Costs to be paid by each Participant for such
calendar year;
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(ii) For each calendar year, GPC shall keep an
hourly record of the kilowatt-hours of energy delivered
to each Participant from each of Wansley Unit No. 1 and
Wansley Unit No. 2 and shall report such amounts each
month along with the cumulative amount of energy
delivered to each Participant since the beginning of
that calendar year."
12. Amendment to Section 3(b) of the Operating Agreements.
Section 3(b), SCHEDULING AND DISPATCHING, of each of the
Operating Agreements is hereby amended by deleting such Section
3(b) in its entirety and by substituting, in lieu thereof, the
following:
"(b) Scheduling and Dispatching.
(i) Subject to the further provisions of this
Section 3(b), GPC, on its own behalf and as agent for
the other Participants shall have sole authority for
the scheduling and dispatching of the output of each of
Wansley Unit No. 1 and Wansley Unit No. 2 and shall
schedule and dispatch such outputs on a continuous
economic dispatch basis, to the extent each such unit
is capable of such dispatch, in accordance with GPC's
standard scheduling and dispatching procedures to
serve, in part, the electric capacity and energy load
within the State of Georgia. By the date set forth in
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Appendix A, as the same may be revised from time to
time with respect to such information by agreement
among all of the Common Dispatch Participants and GPC
as agent for the Common Dispatch Participants, GPC
shall use its reasonable best efforts to provide to
each Common Dispatch Participant a written budget
estimate of the estimated operating levels of Wansley
Unit No. 1 and Wansley Unit No. 2 based upon the
anticipated economic dispatch of such Units for the
five-year budget period. Each budget estimate shall be
based on information reasonably available.
(ii) Any Common Dispatch Participant having an
undivided ownership interest in Wansley Unit No. 1,
Wansley Unit No. 2, or both, shall have the right to
request and receive during such calendar year energy on
an hourly basis from either of Wansley Unit No. 1 or
Wansley Unit No. 2 or both in excess of its
proportionate share of the energy generated by such
unit operating on an economic dispatch basis, up to a
maximum of such Participant's proportionate share of
the energy which could be generated by such unit
operating at its maximum practicable capability at any
given time, if (1) such Participant, gives GPC such
advance notice as is reasonably acceptable to GPC of
its desire to receive such additional energy from such
unit and the amount of such additional energy and such
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increased generation can be reasonably accommodated
within GPC's scheduling and dispatching procedures; and
(2) such Participant agrees to be responsible, as of
the date of such notice, for any and all additional
costs resulting from such increased generation of
energy, including all prepayments in connection with
the acquisition of coal and other fuel, whether or not
it requires or takes the additional energy during such
calendar year and whether or not any additional energy
is generated.
(iii) Subject to the provisions of Section
3(b)(iv) of this Agreement, commencing within six
months following the date of the first election by a
Separate Coal Stockpile Participant to discontinue
participation in the Common Coal Stockpile, GPC shall
use its reasonable best efforts to dispatch the
undivided ownership interests of each Separate Dispatch
Participant in Wansley Unit No. 1 and Wansley Unit No.
2 to match the schedules provided by such Separate
Dispatch Participant. Except as provided for in
Section 3(b)(iv) or in the third paragraph of this
Section 3(b)(iii), GPC shall have no right to dispatch
the undivided ownership interests in Wansley Unit No.
1, Wansley Unit No. 2, or both, of the Separate
Dispatch Participants on any basis or for any purpose
other than to match the schedules provided by such
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Separate Dispatch Participants. The Separate Dispatch
Participants having undivided ownership interests in
Wansley Unit No. 1, Wansley Unit No. 2, or both, and
GPC agree to develop software and to install any
equipment at Wansley Unit No. 1 and Wansley Unit No. 2
which GPC and such Separate Dispatch Participants deem
reasonable and necessary for the separate scheduling
and dispatching of the undivided ownership interests of
the Separate Dispatch Participants in Wansley Unit No.
1 and Wansley Unit No. 2. The costs associated with
procuring, developing, installing and operating such
equipment and software shall be borne solely by the
Separate Dispatch Participants having undivided
ownership interests in the Units, and each such
Separate Dispatch Participant shall pay that portion of
such costs in the proportion that its undivided
ownership interest in the Units bears to the aggregate
of undivided ownership interests of Separate Dispatch
Participants in the Units.
GPC and the Separate Dispatch Participants having
undivided ownership interests in Wansley Unit No. 1,
Wansley Unit No. 2, or both, shall establish mutually
agreeable notification procedures for the startup and
shutdown of Wansley Unit No. 1 and Wansley Unit No. 2
which shall be subject to approval by the Participants
by vote of Participants owning at least an aggregate
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85% undivided ownership interest in the Units and upon
failure to secure such approval, such notification
procedures shall be those proposed by GPC. Such
procedures shall consider, among other things,
operational characteristics of Wansley Unit No. 1 and
Wansley Unit No. 2 as well as factors affecting the
operation of Wansley Unit No. 1 and Wansley Unit No. 2
as a component of Plant Wansley integrated with the
Georgia Integrated Transmission System.
Either GPC, on its own behalf and as agent for the
other Common Dispatch Participants, or any Separate
Dispatch Participant having undivided ownership
interests in Wansley Unit No. 1, Wansley Unit No. 2, or
both, may commit such of Wansley Unit No. 1, Wansley
Unit No. 2, or both, in which it has an undivided
ownership interest, when available, for start-up. The
Participant or Participants committing a Unit for
start-up shall pay and be solely responsible for all
costs associated with the start-up of the Unit,
including, without limitation, start-up fuel and
personnel costs, with each such Committing Participant
being responsible for a portion of such costs in the
proportion that its undivided ownership interest in the
committed Unit bears to the aggregate of the undivided
ownership interests of the Committing Participants in
the committed Unit. For this purpose, if GPC commits
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Wansley Unit No. 1, Wansley Unit No. 2, or both, for
start-up, all Common Dispatch Participants having an
undivided ownership interest in Wansley Unit No. 1 or
Wansley Unit No. 2 shall be deemed Committing
Participants. If one or more of the Committing
Participants desire to shutdown Wansley Unit No. 1 or
Wansley Unit No. 2 and one or more Committing
Participant desires to maintain the commitment of such
Unit, then the Committing Participant or Participants
desiring to maintain the commitment may do so and shall
be responsible for all costs associated therewith.
During any period of commitment of Wansley Unit
No. 1, Wansley Unit No. 2, or both, by Committing
Participants, if another Participant or Participants
having the right to schedule or dispatch output from
the committed Unit or Units does so, then such
Participant or Participants shall become Committing
Participants and shall pay or reimburse the preexisting
Committing Participants for that portion of the costs
associated with start-up of the Unit for which the
preexisting Committing Participants were liable
pursuant to the third paragraph of this Section
3(b)(iii), which is properly and reasonably allocable
to each new Committing Participant, all in accordance
with GPC's standard operating and accounting procedures
which shall be submitted for approval by the
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Participants by vote of Participants owning at least an
aggregate 85% undivided ownership interest in the Units
and upon failure to secure such approval, such
operating and accounting procedures shall be those
proposed by GPC. Each Separate Dispatch Participant
shall be responsible for any and all costs resulting
from its operation of Wansley Unit No. 1, Wansley Unit
No. 2, or both.
(iv) It is recognized by the Participants that
the operation of the Georgia Integrated Transmission
System under both normal and abnormal conditions can be
impacted by the operation of Wansley Unit No. 1 and
Wansley Unit No. 2, and it is further recognized that
the operation of Wansley Unit No. 1, Wansley Unit No. 2
and the remainder of Plant Wansley, including, without
limitation, maintenance of voltage regulation and
electrical and mechanical stability, can be impacted by
the operation of the Georgia Integrated Transmission
System. The Participants agree that GPC, as agent,
shall have the right to take such actions relating to
the operation or shutdown of the Participants'
undivided ownership interests in the Units as are
reasonable for the safe and reliable operation of
Wansley Unit No. 1, Wansley Unit No. 2, the remainder
of Plant Wansley and the Georgia Integrated
Transmission System.
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<PAGE>
The Participants recognize and agree that (1) GPC
shall have sole authority to control the reactive power
output of Wansley Unit No. 1 and Wansley Unit No. 2 in
order to control voltage at the Plant Wansley step-up
substation and auxiliary electric systems, maintain
reasonable voltage profiles on the Georgia Integrated
Transmission System, and provide reactive power to the
system, and (2) GPC may take actions to override the
dispatch of the Participants' undivided ownership
interests in Wansley Unit No. 1, Wansley Unit No. 2, or
both, including, without limitation, startup or
shutdown of Wansley Unit No. 1, Wansley Unit No. 2, or
both, in the event GPC reasonably determines that such
action is necessary or appropriate to maintain
reliability and integrity of Wansley Unit No. 1,
Wansley Unit No. 2, the remainder of Plant Wansley, the
Georgia Integrated Transmission System or any
combination of them. GPC shall notify each Participant
having an undivided ownership interest in Wansley Unit
No. 1, Wansley Unit No. 2, or both, as soon as
reasonably practicable when such actions or similar
actions are necessary. Procedures for such
notification shall be included in the dispatch
procedures to be developed by GPC and submitted to the
Participants for approval by the Participants by vote
of Participants owning at least an aggregate 85%
-54-
<PAGE>
undivided ownership interest in the Units and upon
failure to secure such approval, such notification
procedures shall be those proposed by GPC.
All costs for any additional energy produced by
operation of the Participants' undivided ownership
interests in Wansley Unit No. 1, Wansley Unit No. 2, or
both, pursuant to the foregoing provisions of this
Section 3(b)(iv), shall be borne by the Participants in
proportion to their undivided ownership interests in
the Units and the Participants will be entitled to such
additional energy in the same proportions whether or
not any such Participant requires or can utilize such
additional energy.
The rights granted GPC pursuant to this Section
3(b)(iv) shall remain in full force and effect even if
GPC is removed as agent for the Units and Plant Wansley
Coal Stockpile, or any combination thereof.
(v) The Participants agree that GPC shall have no
obligation to generate energy which cannot be
transmitted either due to transmission restrictions or
lack of necessary transmission arrangements.
(vi) For the purpose of this Section 3(b), the
capacity associated with a Participant's undivided
ownership interest in the Units shall include, in the
-55-
<PAGE>
case of GPC, the capacity purchased by GPC from time to
time pursuant to Section 3(d) of this Agreement.
13. Amendment to Section 3(d) of the OPC Operating
Agreement. Section 3(d), GPC ENTITLEMENT OF OEMC CAPACITY AND
ENERGY, of the OPC Operating Agreements is hereby amended to
delete subsection (iv) in its entirety therefrom and to renumber
the remaining subsections 3(d)(v) and 3(d)(vi) as 3(d)(iv) and
3(d)(v).
14. Amendment to Create Section 10 of the Operating
Agreements. Section 10 of each of the Operating Agreements hereby
reads as follows:
"10. Plant Wansley Operating Committee.
(a) Establishment of Plant Wansley Operating Committee.
There is hereby established by the Participants a "Plant Wansley
Operating Committee" which shall be comprised of one
representative and one alternate of each Participant. The Plant
Wansley Operating Committee shall establish its own rules of
procedure which shall be agreed to by all of the Participants to
become effective.
(b) Responsibilities of the Plant Wansley Operating
Committee. The Plant Wansley Operating Committee shall supersede
the role of the Joint Committee with respect to Plant Wansley and
shall administer the rights and obligations of the Participants
-56-
<PAGE>
under the Plant Wansley Participation Agreements. The procedures
approved by the Joint Committee and Joint Subcommittee relating
to Plant Wansley currently in effect shall continue in full force
and effect and shall be implemented by the Plant Wansley
Operating Committee. In addition, the Plant Wansley Operating
Committee shall be responsible for the following:
(i) The development of coal procurement procedures as
contemplated by Section 1(f)(vi) hereof.
(ii) The development of Separate Coal Stockpile and
Common Coal Stockpile accounting procedures as contemplated
by Section 1(g)(vii) hereof.
(iii) The development of dispatch procedures as
contemplated by Sections 3(b)(iii) and (iv) hereof.
(iv) Such other duties as may be conferred upon it by
mutual agreement of the Participants."
15. Effectiveness of this Amendment. Neither this
Amendment nor any of the obligations of the parties hereto shall
be effective until the receipt of all requisite approvals,
including, without limitation, the approval of the Securities and
Exchange Commission ("SEC") under the Public Utility Holding
Company Act of 1935, the written approval of the Administrator of
the Rural Electrification Administration and the approval of all
other persons, entities and regulatory bodies having a right or
the jurisdiction to approve or consent to an amendment to the
Operating Agreements, but upon receipt of such approvals this
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<PAGE>
Amendment and the obligations of the parties hereto shall be
effective. The parties hereby agree to use their respective best
efforts to expeditiously obtain all such requisite approvals.
16. Miscellaneous. Any and all notices, requests,
certificates and other instruments executed and delivered after
the execution and delivery of this Amendment may refer to the
Operating Agreements without making specific reference to this
Amendment, but nevertheless all such references shall be deemed
to include this Amendment unless the context shall otherwise
require.
This Amendment shall be construed in connection with and as
a part of the Operating Agreements, and all terms, conditions and
covenants contained in the Operating Agreements, except as herein
modified, shall be and remain in full force and effect, and the
parties hereto agree that they are bound by the terms and
conditions of the Operating Agreements as amended hereby.
This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original
but altogether one and the same instrument.
[Remainder of Page Intentionally Left Blank.]
-58-
<PAGE>
IN WITNESS WHEREOF, the undersigned Parties hereto have duly
executed this Amendment under seal as of the date first above
written.
Signed, sealed and delivered GEORGIA POWER COMPANY
in the presence of:
/s/ Scott A. Hudson By: /s/ Fred D. Williams
- ------------------------------ --------------------------------------
/s/ Judith D. Gesa Name: Fred D. Williams
- ------------------------------ --------------------------------------
Notary Public Title: Senior Vice President
Attest: /s/ Cherry C. Hudgins
-------------------------------
Name: Cherry C. Hudgins
---------------------------------
Title: Assistant Corporate
--------------------------------
Secretary
--------------------------------
(CORPORATE SEAL)
Signed, sealed and delivered OGLETHORPE POWER CORPORATION
in the presence of: (AN ELECTRIC MEMBERSHIP
GENERATION & TRANSMISSION
/s/ Charles E. Roundtree CORPORATION)
- ------------------------------
/s/ Joann Smith By: /s/ T.D. Kilgore
- ------------------------------ --------------------------------------
Notary Public
Name: T.D. Kilgore
---------------------------------
Title: President & CEO
--------------------------------
Attest: /s/ Patricia N. Nash
-------------------------------
Name: Patricia N. Nash
---------------------------------
Title: Assistant Secretary
--------------------------------
(CORPORATE SEAL)
[Signatures continued on next page]<PAGE>
-59-
<PAGE>
[Signatures continued from previous page]
Signed, sealed and delivered MUNICIPAL ELECTRIC AUTHORITY
in the presence of: OF GEORGIA
By: /s/ Frank L. Olson
- ------------------------------ -----------------------------------
/s/ E. Michail Samford Name: Frank L. Olson
- ------------------------------ ---------------------------------
Notary Public Its: President
----------------------------------
Attest: /s/ Robert P. Johnston
-------------------------------
Name: Robert P. Johnston
---------------------------------
Its: Assistant Secretary-
----------------------------------
Treasurer
----------------------------------
(OFFICIAL SEAL)
Signed, sealed and delivered CITY OF DALTON, GEORGIA
in the presence of:
/s/ Faye M. Kenenear By: /s/ James A. Middleton
- ------------------------------ -----------------------------------
Name: James A. Middleton
- ------------------------------ ---------------------------------
Notary Public Its: Mayor
----------------------------------
Attest: /s/ Faye L. Martin
-------------------------------
Name: Faye L. Martin
---------------------------------
Its: Clerk
----------------------------------
(OFFICIAL SEAL)
Signed, sealed and delivered BOARD OF WATER, LIGHT AND
in the presence of: SINKING FUND COMMISSIONERS
By: /s/ DeForrest Parrott
- ------------------------------ -----------------------------------
/s/ Linda K. Carlisle Name: DeForrest Parrott
- ------------------------------ ---------------------------------
Notary Public Its: Secretary
----------------------------------
Attest: /s/ W.R. Seaton, Jr.
-------------------------------
Name: W.R. Seaton, Jr.
---------------------------------
Its: Assistant to General
----------------------------------
Manager
----------------------------------
(OFFICIAL SEAL)
-60-
<PAGE>
APPENDIX A TO OPERATING AGREEMENT
CAPITAL BUDGET, OPERATING BUDGET, SCHEDULING AND
DISPATCH BUDGET, MAINTENANCE SCHEDULES AND FUEL PLANS
Capital Budget. By August 15 of each calendar year, GPC
shall use its reasonable best efforts to provide to each
Participant a written budget estimate of capital costs
anticipated to be incurred for the five-year budget period for
Wansley Unit No. 1 and Wansley Unit No. 2. Each budget estimate
shall be based on information reasonably available. Also to be
included in the capital budget are any projects which may be
charged to a Participant on the basis of its ownership pursuant
to the Ownership Agreement. This budget estimate is to consist
of project estimate sheets for each project. For the five-year
budget period, a summary of estimates of capital expenditures and
retirements will be provided, the first year by month and the
remaining four years by annual total.
Each capital budget estimate and revised capital budget
estimate shall be in a format such that for the next calendar
year each month's estimated costs are listed by reference to the
applicable Uniform System of Accounts account number. In
addition, each capital budget estimate and revised capital budget
estimate shall be in a format showing expected amounts that the
Participant will be billed.
Operating Budget. By August 15 of each calendar year, GPC
shall use its reasonable best efforts to provide each Participant
a written budget estimate of Operating Costs including, without
<PAGE>
limitation, scheduled outage costs (by month for the following
year and in summary fashion for the succeeding four years)
anticipated to be incurred for the five-year budget period for
Wansley Unit No. 1 and Wansley Unit No. 2. Each operating budget
estimate shall be based on information reasonably available.
Each operating budget estimate and revised operating budget
estimate shall be in a format such that each month's estimated
costs are listed by reference to the applicable Uniform System of
Accounts account number. In addition, each operating budget
estimate and revised operating budget estimate shall be in a
format showing expected amounts that the Participant will be
billed. Finally, a report on materials and supplies purchased
during the preceding calendar year shall be provided along with
the operating budget estimate.
Scheduling and Dispatching Budget. By August 15 of each
year, GPC shall provide each Common Dispatch Participant with a
budget estimate of the estimated operating levels of Wansley Unit
No. 1 and Wansley Unit No. 2.
Maintenance Schedules. In formulating the maintenance
schedule to be submitted to the Participants, GPC shall consider
any comments submitted by the Participants prior to August 1 of
each year. On or before August 15 of each calendar year, GPC
shall use its reasonable best efforts to provide each Participant
with a written scheduled outage plan for Wansley Unit No. 1 and
-2-
<PAGE>
Wansley Unit No. 2. Should any major changes be made to the
maintenance schedule within a calendar year, GPC shall use its
reasonable best efforts to provide each Participant with a
revised schedule. A Common Dispatch Participant shall receive
maintenance schedules for the territory.
Fuel Plans. By September 1 of each year, GPC shall provide
each Participant with a Fuel Plan.
-3-
<PAGE>
APPENDIX B TO OPERATING AGREEMENTS
PLANT WANSLEY OPERATIONS AND MAINTENANCE EXPENSES
For the purposes of allocating costs, all FERC accounts
other than Operations and Maintenance on the Boiler and Turbine
(FERC's 502, 505, 512, and 513) are designated as fixed costs to
be allocated based upon the respective undivided ownership
interests in Wansley Units 1 and 2. The Operations and
Maintenance on Boiler and Turbine costs shall be divided between
labor and nonlabor. All labor, both straight time and overtime,
shall be designated as fixed costs. All other costs charged to
these FERC Accounts (502, 505, 512, 513) shall be considered
variable, and allocated to owner based on relative generation
during the "applicable accounting period." A flow chart of this
information is attached thereto.
B-1
<PAGE>
APPENDIX B
PLANT WANSLEY
O & M COST ALLOCATION METHODOLOGY
I. FERC Accounts Non-Labor in 502, 505, 512, 513
A. Costs Related to Output
1. Applicable Accounting Period
a.) Output
i.) Shared by Generation
b.) No Output
i.) Shared by Ownership
II. FERC Accounts 500, 501, 506, 507, 510, 511, 514
Labor in 502, 505, 512, 513
A. Costs not Related to Output
1. Applicable Accounting Period
a.) Shared by Ownership
III. Cost Method Not Described
B-2
<PAGE>
EXHIBIT 10.29
MASTER POWER PURCHASE AND SALE AGREEMENT
BETWEEN
DUKE/LOUIS DREYFUS L.L.C., A NEVADA LIMITED LIABILITY COMPANY
AND
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION
& TRANSMISSION CORPORATION)
Dated as of August 31, 1996
ACKNOWLEDGMENT REGARDING CONFIDENTIAL INFORMATION:
Oglethorpe Power Corporation (An Electric Membership Generation &
Transmission Corporation ) (the "Company") acknowledges that certain
confidential information is contained throughout the Master Power Purchase and
Sale Agreement and the Exhibits attached thereto and therefore such confidential
information has been omitted from the copy filed with this Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996, and an asterisk (*) has been
inserted indicating such omission at the exact place in the Agreement and the
Exhibits where such confidential information has been omitted. A copy of this
Agreement without any omission of confidential information has been filed
separately with the Secretary of the Commission as an attachment to a request
for confidentiality with respect to the omitted information.
<PAGE>
MASTER POWER PURCHASE AND SALE AGREEMENT
BETWEEN
DUKE/LOUIS DREYFUS L.L.C., A NEVADA LIMITED LIABILITY COMPANY
AND
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION
& TRANSMISSION CORPORATION)
TABLE OF CONTENTS PAGE
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 SCOPE OF AGREEMENT AND TERM. . . . . . . . . . . . . . . . . . 2
2.1 Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Confirmations. . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3 TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 General Obligations of Seller and Buyer. . . . . . . . . . . . 3
3.2 Transmission and Scheduling. . . . . . . . . . . . . . . . . . 3
3.3 Title and Risk of Loss . . . . . . . . . . . . . . . . . . . . 4
3.4 Failure to Deliver or Receive. . . . . . . . . . . . . . . . . 4
3.5 Sales by OPC . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.6 Sales by Power Marketer. . . . . . . . . . . . . . . . . . . . 8
3.7 Transformer and Transmission Loss Adjustments. . . . . . . . . 9
3.8 SEPA Energy. . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.9 Imbalances and Regulation Deviation Errors . . . . . . . . . . 10
3.10 Non-Territorial Contractual Delivery Obligations . . . . . . . 11
ARTICLE 4 PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 OPC's Contract Price . . . . . . . . . . . . . . . . . . . . . 11
4.2 Power Marketer's Contract Price. . . . . . . . . . . . . . . . 11
4.3 Amounts Due to OPC and Power Marketer. . . . . . . . . . . . . 11
4.4 Netting of Payment Obligations . . . . . . . . . . . . . . . . 14
4.5 Amendments, Modifications of OPC Contracts . . . . . . . . . . 14
ARTICLE 5 CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . 14
5.1 Prior Confidentiality Agreement Superseded; Authorization
to Use Information. . . . . . . . . . . . . . . . . . . . . . 14
5.2 Authorized Disclosure. . . . . . . . . . . . . . . . . . . . . 15
5.3 Return of Confidential Information . . . . . . . . . . . . . . 15
5.4 Right to Remedies. . . . . . . . . . . . . . . . . . . . . . . 15
5.5 Georgia Trade Secrets Act. . . . . . . . . . . . . . . . . . . 15
-i-
<PAGE>
ARTICLE 6 RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1 Records of Transactions. . . . . . . . . . . . . . . . . . . . 16
ARTICLE 7 BILLING AND PAYMENT. . . . . . . . . . . . . . . . . . . . . . 16
7.1 Billing Statements . . . . . . . . . . . . . . . . . . . . . . 16
7.2 Offset of Payment Obligations. . . . . . . . . . . . . . . . . 16
7.3 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.4 Audit Rights . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.5 Subsequent Payment Adjustments . . . . . . . . . . . . . . . . 17
ARTICLE 8 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Seller's Obligation. . . . . . . . . . . . . . . . . . . . . . 17
8.2 Buyer's Obligation . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Exemption Certificates . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 9 INDEMNIFICATION AND REMEDIES . . . . . . . . . . . . . . . . . 18
9.1 General Indemnity. . . . . . . . . . . . . . . . . . . . . . . 18
9.2 Limitation on Remedies . . . . . . . . . . . . . . . . . . . . 18
9.3 Duty to Mitigate . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 DISCLAIMER . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.5 Credit Support from Power Marketer . . . . . . . . . . . . . . 19
9.6 OPC Limitation on Liability. . . . . . . . . . . . . . . . . . 19
ARTICLE 10 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 19
10.1 Mutual Representations . . . . . . . . . . . . . . . . . . . . 19
10.2 Additional OPC Representations . . . . . . . . . . . . . . . . 20
10.3 Additional Power Marketer Representations. . . . . . . . . . . 20
10.4 Good Title . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.5 Continuing Representations and Warranties. . . . . . . . . . . 20
ARTICLE 11 DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . 20
11.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 20
11.2 Early Termination; Remedies. . . . . . . . . . . . . . . . . . 21
11.3 Special Early Termination Right. . . . . . . . . . . . . . . . 21
11.4 Failure to Pay . . . . . . . . . . . . . . . . . . . . . . . . 22
11.5 Effect of Regulation . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 12 FORCE MAJEURE. . . . . . . . . . . . . . . . . . . . . . . . . 22
12.1 Effect of Force Majeure. . . . . . . . . . . . . . . . . . . . 22
ARTICLE 13 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 22
13.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 22
13.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.3 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . 23
-ii-
<PAGE>
13.4 Survival of Obligations. . . . . . . . . . . . . . . . . . . . 23
13.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 23
13.6 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . 23
13.7 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.8 Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . 23
13.9 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.10 Character of Transactions. . . . . . . . . . . . . . . . . . . 24
13.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 24
13.12 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 24
13.13 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 24
EXHIBITS
-iii-
<PAGE>
MASTER POWER PURCHASE AND SALE AGREEMENT
BETWEEN
DUKE/LOUIS DREYFUS L.L.C., A NEVADA LIMITED LIABILITY COMPANY
AND
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION
& TRANSMISSION CORPORATION)
This Master Power Purchase and Sale Agreement dated as of August
31, 1996 ("Master Agreement," and together with all Transactions, collectively,
this "Agreement"), is entered into by and between Oglethorpe Power Corporation
(An Electric Membership Generation & Transmission Corporation), a corporation
organized and existing under Title 46 of the Official Code of Georgia Annotated
("OPC"), and Duke/Louis Dreyfus L.L.C., a Nevada limited liability company
("Power Marketer").
WITNESSETH
WHEREAS, OPC is an electric generation and transmission corporation
which operates on a cooperative basis and which supplies the electric
requirements of the EMCs for the operation of their respective electric
distribution systems pursuant to the EMC Contracts;
WHEREAS, OPC also has entered into OPC Off-System Sales Contracts listed
on Exhibit 3.5.2 and may, subject to the terms of this Agreement, enter into
additional OPC Off-System Sales Contracts with third parties from time to time;
WHEREAS, Power Marketer is a power marketer authorized by the Federal
Energy Regulatory Commission to purchase and sell electric energy for resale at
negotiated rates;
WHEREAS, OPC desires to purchase Electric Energy in order to supply the
electric requirements of the EMCs pursuant to the terms of the EMC Contracts and
to satisfy its obligations under the OPC Off-System Sales Contracts and has
selected Power Marketer for such purpose during the Term of this Agreement;
WHEREAS, Power Marketer desires to purchase Electric Energy from OPC for
resale (i) to OPC at prices consistent with this Agreement and (ii) to third
parties at negotiated prices;
WHEREAS, the Parties believe that their respective objectives can be
achieved if OPC sells to Power Marketer all of the Electric Energy OPC is
obligated to take or purchase from Must Run Resources and offers to sell to
Power Marketer all of the other Electric Energy which OPC is entitled to take or
purchase, as more specifically set forth herein, and if Power
<PAGE>
Marketer agrees to supply OPC with Electric Energy it has purchased from OPC
or from other sources;
WHEREAS, the Parties understand and acknowledge that Power Marketer
shall have and shall use Confidential Information in the course of satisfying
its obligations under, and in implementing the terms and conditions of, this
Agreement and the Parties desire to protect the Confidential Information in
accordance with the provisions of this Master Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, and for other good and valuable consideration, OPC and Power
Marketer hereby agree as follows:
ARTICLE 1
DEFINITIONS
All capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in Appendix A hereto.
ARTICLE 2
SCOPE OF AGREEMENT AND TERM
2.1 TRANSACTIONS. The Parties shall enter into Transactions for the
purchase or sale of Electric Energy hereunder. Each Transaction shall be
effectuated and evidenced in accordance with this Master Agreement and shall
constitute a part of this Agreement. The Parties are relying upon the fact that
all Transactions, together with this Master Agreement, shall constitute a single
integrated agreement, and that the Parties would not otherwise enter into any
Transactions. Any conflict between this Master Agreement and a Transaction
shall be resolved in favor of this Master Agreement. This Master Agreement
shall govern all Transactions between the Parties from and after the Effective
Date unless expressly stated otherwise.
2.2 CONFIRMATIONS. Each Transaction shall be effectuated and
evidenced by (i) a recorded telephone conversation between the Parties
whereby an offer and acceptance shall constitute the agreement of the Parties
or (ii) a Transaction Agreement executed by the Parties (including by
facsimile or counterparts). The specific terms to be established and agreed
upon by the Parties shall include the Period of Delivery, the Contract Price,
the Delivery Point(s), the Contract Quantity and such other terms as the
Parties shall agree that are not in conflict with this Master Agreement;
PROVIDED, HOWEVER, that the Parties may modify the Contract Price, Contract
Quantity and Delivery Points with respect to the purchase and sale of
Electric Energy pursuant to the terms of this Master Agreement. Power
Marketer may confirm a
-2-
<PAGE>
Transaction by forwarding to OPC a Confirmation which shall be executed by
OPC (with any objections noted thereon) and returned to Power Marketer within
two Business Days or else be deemed correct as sent; PROVIDED, HOWEVER, that
failure to send a Confirmation shall not invalidate any Transaction agreed to
by the Parties. The Parties agree not to contest or assert any defense to the
validity or enforceability of telephonic Transactions entered into in
accordance with this Master Agreement under Laws relating to whether certain
agreements are to be in writing or signed by the Party to be thereby bound,
or the authority of any employee of such Party to enter into a Transaction.
Each Party consents to the recording of its representatives' telephone
conversations without any further notice. All recordings may be introduced
into evidence to prove oral agreements between the Parties.
2.3 EFFECTIVE DATE. This Master Agreement shall become effective on the
date first written above (the "Effective Date"), provided that the delivery of
Electric Energy pursuant to this Master Agreement shall commence at one minute
and one second prior to 12:01 a.m. EPT on September 1, 1996 ("Commencement
Date"), and shall remain in effect until one minute and one second prior to
12:01 a.m. EPT on January 1, 1997 (the "Termination Date") unless earlier
terminated pursuant to this Master Agreement (the "Term"); PROVIDED, HOWEVER,
that all Transactions shall terminate no later than the Termination Date. The
applicable provisions of this Master Agreement shall continue in effect after
the Termination Date in accordance with Section 13.4 hereof.
ARTICLE 3
TRANSACTIONS
3.1 GENERAL OBLIGATIONS OF SELLER AND BUYER. With respect to each
Transaction, Seller shall sell and deliver, or cause to be delivered, and Buyer
shall receive, or cause to be received, at the Delivery Point(s) the Contract
Quantity, and Buyer shall pay Seller the Contract Price, as adjusted in
accordance with Article 4 hereof. Except as otherwise specifically addressed in
Section 3.7 hereof, Seller shall be responsible for any costs or charges imposed
on or associated with the delivery of the Contract Quantity (including control
area services, transmission losses and loss charges relating to the transmission
of the Contract Quantity) up to the Delivery Point. Except as otherwise
specifically addressed in Section 3.7 hereof, Buyer shall be responsible for any
costs or charges imposed on or associated with the Contract Quantity (including
control area services, transmission losses and loss charges relating to the
transmission of the Contract Quantity) at and from the Delivery Point.
3.2 TRANSMISSION AND SCHEDULING.
(a) Seller shall provide, pay for, and be responsible for
transmission service to the Delivery Point and shall Schedule or arrange for
Scheduling services with its Transmission Providers to deliver the Contract
Quantity to the Delivery Point. Buyer shall provide, pay for, and be
responsible for transmission service at and from the Delivery Point
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and shall Schedule or arrange for Scheduling services with its Transmission
Providers to receive the Contract Quantity at the Delivery Point. Each Party
shall designate authorized representatives to effect the Scheduling of the
Contract Quantity required to be delivered and received pursuant to a
Transaction. Each Party shall promptly notify the other of any differences
between Scheduled quantities and actual quantities delivered and received.
(b) Notwithstanding the foregoing, with respect to Transactions
involving or relating to transmission service on the ITS, OPC shall be
responsible for transmission service and shall arrange for any Scheduling with
Georgia Power Company in accordance with Power Marketer's requests. For
Delivery Points which are Points of Interconnection, at Power Marketer's request
OPC shall Schedule up to the full transfer capability of OPC's allocation
entitlement at each interface set forth on Exhibit 3.2.
(c) The parties recognize that third persons, not parties to this
Agreement, may obtain rights to utilize OPC's transmission resources, including
OPC's allocation entitlement at each interface set forth in Exhibit 3.2,
pursuant to the requirements of applicable Law, including FERC Order 888.
Notwithstanding anything to the contrary contained in this Agreement, OPC's sale
of transmission services to a third party pursuant to the requirements of
applicable Law, including FERC Order 888, shall not constitute a breach of
OPC's obligations hereunder, and Power Marketer's obligation to provide Electric
Energy to OPC in the quantities and at the times required by this Agreement
shall not be diminished by any such sale of OPC's transmission resources. OPC's
obligations to Power Marketer shall not be affected by such utilization of OPC's
transmission resources by such third persons; PROVIDED HOWEVER, that OPC's
obligation to deliver Electric Energy as Properly Requested by Power Marketer
shall be limited by the availability of sufficient interface capacity to effect
Power Marketer's requests. Notwithstanding the foregoing, if OPC provides
transmission service to third parties pursuant to this Section 3.2(c), and OPC's
revenues from providing such service exceed OPC's incremental costs of providing
such service, such excess shall be paid to Power Marketer.
3.3 TITLE AND RISK OF LOSS. As between the Parties, Seller shall be
deemed to be in exclusive control (and responsible for any damages or injury
caused thereby) of the Contract Quantity prior to the Delivery Point and Buyer
shall be deemed to be in exclusive control (and responsible for any damages or
injury caused thereby) of the Contract Quantity at and from the Delivery Point.
Title to and risk of loss of the Contract Quantity shall transfer from Seller to
Buyer at the Delivery Point.
3.4 FAILURE TO DELIVER OR RECEIVE.
(a) Unless excused by Force Majeure or the failure of Buyer's
performance, if Seller fails to deliver, or cause to be delivered, the
Contract Quantity, Seller shall pay Buyer, on the date payment would
otherwise be due, an amount for each MWh of such deficiency equal to the
positive difference, if any, obtained by subtracting (i) the Contract
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Price for that portion of the Contract Quantity which was not delivered from
(ii) the Replacement Price. "Replacement Price" means the price at which
Buyer, acting in a commercially reasonable manner, purchases substitute
Electric Energy not delivered by Seller (plus any additional transmission
charges incurred by Buyer, if any, to the Delivery Point), including, for
example, charges incurred by the Buyer in respect of purchases of Electric
Energy pursuant to Section 3.4(c) hereof, or absent a purchase, the market
price for such quantity at the Delivery Point as determined by Buyer in a
commercially reasonable manner.
(b) Unless excused by Force Majeure or the failure of Seller's
performance, if Buyer fails to receive, or cause to be received, the Contract
Quantity, Buyer shall pay Seller, on the date payment would otherwise be due,
an amount for each MWh of such deficiency equal to the positive difference,
if any, obtained by subtracting (i) the Sales Price from (ii) the Contract
Price for that portion of the Contract Quantity which was not received.
"Sales Price" means the price at which Seller, acting in a commercially
reasonable manner, resells the Electric Energy not received by Buyer (less
any additional transmission charges incurred by Seller, if any, from the
Delivery Point to the point of sale), including, for example, charges
incurred by Seller in respect of sales of Electric Energy pursuant to the
CSA, or, absent a resale, the market price for such quantity at the Delivery
Point, as determined by Seller in a commercially reasonable manner.
(c) If the Electric Energy supplied by Power Marketer in any
hour is less than OPC Load or if the Electric Energy supplied by OPC in any
hour is less than the amount of OPC Energy Properly Requested by Power
Marketer, the deficiency may be corrected by a purchase by OPC from Georgia
Power Company pursuant to the applicable schedule of the CSA. Unless excused
by Force Majeure, the charge for such purchase shall be borne by OPC if the
deficiency is caused by OPC's failure to make available the OPC Energy that
Power Marketer Properly Requested, or by Power Marketer if the deficiency is
caused by Power Marketer's failure to make available from sources other than
OPC Resources the difference between the OPC Load and OPC Energy that Power
Marketer Properly Requested to be delivered to OPC.
3.5 SALES BY OPC. For each hour of the Term, OPC shall promptly
inform Power Marketer of the OPC Resources that are available for the
delivery of OPC Energy, including nuclear OPC Resources and other "must run"
resources which are listed on Exhibit 3.5 hereto ("Must Run Resources") and
dispatchable resources.
3.5.1 MUST RUN RESOURCES. OPC shall sell and Power Marketer
shall purchase all of the OPC Energy associated with Must Run Resources
that are available during each hour of the Term. OPC shall use
commercially reasonable efforts to make Must Run Resources available for
the production and sale of OPC Energy to Power Marketer during the Term,
subject to the terms, conditions and limitations, if any, contained in
the OPC Contracts.
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3.5.2 DISPATCHABLE OPC RESOURCES. With respect to OPC Resources
other than Must Run Resources, OPC shall and hereby does offer to enter
into Transactions to sell to Power Marketer on an exclusive basis and
Power Marketer is hereby given the exclusive right, but not the
obligation, to purchase from OPC any OPC Energy that is available during
each hour of the Term; PROVIDED, HOWEVER, that OPC shall be permitted to
make OPC Off-System Sales pursuant to the OPC Off-System Sales
Contracts, which Electric Energy shall be provided to OPC by Power
Marketer pursuant to Section 3.6 and at the prices set forth in
Section 4.2 hereof. OPC shall use commercially reasonable efforts to
make such dispatchable OPC Resources available for the production and
sale of OPC Energy to Power Marketer during the Term, subject to the
terms, conditions and limitations, if any, contained in the OPC
Contracts. Power Marketer shall effect the acceptance of OPC's offer
pursuant to the first sentence of this Section 3.5.2 by complying with
the procedures set forth in Section 2.2 and 3.5.4 hereof. Except with
respect to the power purchasers under the OPC Off-System Sales Contracts
listed on Exhibit 3.5.2, OPC shall not be permitted to make off-system
sales of Electric Energy during the Term to parties other than Power
Marketer without the prior consent of Power Marketer.
3.5.3 OPC CONTRACTS, RESOURCES AND COSTS. OPC shall be
responsible for compliance with the OPC Contracts and shall take such
rights and obligations into consideration when entering into
Transactions to sell Electric Energy to Power Marketer. Nothing in this
Agreement shall be construed to assign, impose or otherwise transfer any
rights or obligations under such agreements to Power Marketer and OPC
shall retain all of its rights and obligations, including but not
limited to its obligation to maintain generation and transmission system
stability and reliability. Notwithstanding any other provision of this
Agreement, OPC shall not be required to take any action inconsistent
with its rights and obligations under the OPC Contracts, the NERC or
SERC guidelines, or applicable Laws. Nothing in this Agreement shall
affect the rights or obligations of the parties to the EMC Contracts.
OPC acknowledges and agrees that Power Marketer requires information
concerning OPC Contracts, OPC Resources, OPC Load and Energy Cost in
order to satisfy Power Marketer's obligations hereunder. OPC has
delivered to Power Marketer the following information: (i) a list of
all OPC Resources and OPC Contracts and any proposed or pending
amendments to the OPC Contracts, which list is attached as
Exhibit 3.5.3(i) hereto; (ii) a statement of the expected availability
and the transformer loss factor of each OPC Resource, including nuclear
generating units, which statement is attached as Exhibit 3.5.3(ii)
hereto; and (iii) a schedule of the Energy Costs expected to apply to
Electric Energy produced by each OPC Resource during the Term ("Forecast
Energy Costs"), which schedule is attached as Exhibit 3.5.3(iii) hereto.
OPC hereby agrees to update such information promptly as new information
becomes available
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to OPC during the Term and to promptly provide such updated information
to Power Marketer.
3.5.4 SCHEDULING. The Parties agree to adopt procedures to
facilitate Power Marketer's ability on an hourly basis (or more
frequently if permissible) to purchase and Properly Request OPC Energy.
The Parties shall also establish procedures whereby OPC shall
communicate to Power Marketer on an hourly basis the projected OPC Load
and the availability of, and estimated Energy Cost for, each OPC
Resource, as such availability and Energy Cost may change from time to
time. Upon communication of such information, Power Marketer shall
notify OPC of its desire to enter into a Transaction pursuant to Section
2.2 and, upon confirmation of the Transaction pursuant to Section 2.2,
Properly Request the amounts of Electric Energy that Power Marketer
desires to purchase from each such OPC Resource in excess of its
obligation to purchase OPC Energy from Must Run Resources. To the
extent reasonably possible, OPC shall, if so requested by Power
Marketer, make real time changes to Schedules of Properly Requested
Electric Energy. In each hour of the Term, OPC shall sell, Schedule and
deliver, or cause to be delivered, and Power Marketer shall purchase and
receive, or cause to be received, the sum of (i) OPC Energy that is
attributable to Must Run Resources and (ii) other OPC Energy that Power
Marketer Properly Requests for purchase during that hour. The Period of
Delivery for OPC Energy purchased by Power Marketer from OPC Resources
other than Must Run Resources shall be as specified by Power Marketer
pursuant to the applicable Transaction.
3.5.5 DELIVERY POINTS. Power Marketer, in its reasonable
discretion, shall specify one or more Delivery Points for the OPC Energy
for each Transaction in which Power Marketer is Buyer. OPC shall use
commercially reasonable efforts to accommodate Delivery Point
designations by Power Marketer consistent with OPC's interests and
rights in the ITS, the terms, conditions and limitations, if any, under
the OPC Contracts, and the requirements of applicable Laws, including
FERC Order 888. OPC shall promptly inform Power Marketer of any
transmission constraints or other impediments to satisfying Power
Marketer's Delivery Point designations so that Power Marketer may notify
OPC of appropriate changes to, or the amount of OPC Energy to be
delivered at, such Delivery Points.
3.5.6 DEEMED ENERGY COST IN THE EVENT OF OPC FAILURE TO DELIVER
FROM CERTAIN OPC RESOURCES. In the event that an OPC Resource is
available for the production of OPC Energy during an hour, Power
Marketer Properly Requests OPC Energy therefrom and, contrary to Power
Marketer's Proper Request, OPC delivers OPC Energy to Power Marketer
from another OPC Resource, then the Energy Cost for the OPC Energy made
available shall be deemed to be the lower of (i) the Forecast Energy
Cost for the OPC Energy that Power Marketer Properly Requested or
(ii) the actual Energy Cost of the Electric Energy that OPC made
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available if such Electric Energy is produced from or attributable to an
OPC Resource or, if not, the actual cost of the Electric Energy acquired
by OPC for delivery to Power Marketer. The foregoing provision shall
not apply in the event that OPC shall demonstrate (either before or
after the fact) that its failure to deliver OPC Energy from the OPC
Resource Properly Requested by Power Marketer is or was a direct result
of a reasonable determination made by OPC, acting in good faith after
consultation with Power Marketer to the extent reasonably practicable,
that failure to comply with Power Marketer's request was reasonably
required to assure the stability and reliability of OPC's generation and
transmission system; PROVIDED, HOWEVER, that in such circumstances the
Energy Cost of the OPC Energy delivered to Power Marketer shall be the
Energy Cost of the OPC Resource Scheduled by OPC; and PROVIDED, FURTHER,
that in such circumstances OPC shall endeavor to dispatch the OPC
Resource having the lowest Energy Cost consistent with maintaining the
stability and reliability of OPC's generation and transmission system.
OPC shall use commercially reasonable efforts to provide Power Marketer
with advance notice of possible transmission constraints, voltage
deterioration or similar system events or occurrences that might result
in a prospective failure by, or inability of, OPC to Schedule or deliver
OPC Energy Properly Requested by Power Marketer, either as a result of
Power Marketer's request for OPC Energy or otherwise, such that Power
Marketer, to the extent practicable, shall be able to select whether to
purchase and Properly Request OPC energy from another OPC Resource
consistent with the good-faith and reasonable stability or reliability
concerns of OPC (in which case the original Transaction shall be
replaced by such new purchase) or, alternatively, to bear the risk of
Properly Requesting OPC Energy from the OPC Resource from which it made
its original purchase; PROVIDED, HOWEVER, that it is specifically agreed
by the Parties that in the event Power Marketer affirms its original
purchase and Proper Request for OPC Energy from a specific OPC Resource
or does not purchase and Properly Request OPC Energy from a specific OPC
Resource consistent with the good-faith and reasonable recommendation of
OPC, and as a result thereof, OPC incurs additional incremental costs
that would not have been incurred in the absence of OPC complying with
Power Marketer's request, such amounts (including charges under the CSA)
shall be reimbursed by Power Marketer to OPC; and provided further that
(i) such affirmation by Power Marketer shall not preclude OPC from
taking such actions as may be necessary to maintain generation and
transmission system stability and reliability and (ii) any failure by
OPC to deliver or receive Electric Energy or capacity to or from Power
Marketer, which failure results from OPC's acting in accordance with
Power Marketer's decision to affirm its original purchase and Proper
Request, shall not be a breach by OPC of this Agreement or any
Transaction Agreement.
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3.5.7 EMISSION ALLOWANCES. At no cost to Power Marketer, OPC
shall surrender or cause to be surrendered all emission allowances
necessary for the utilization, to the full extent Properly Requested by
Power Marketer in accordance with this Master Agreement, of the Hal B.
Wansley Plant (Units 1 and 2) and other jointly-owned OPC generating
resources and to effect the purchase of energy under the block power
purchase and sale agreement between OPC and Georgia Power Company.
Power Marketer shall not be deemed to have acquired any sulfur-free
generation for use in a reduced utilization plan by reason of entering
into this Agreement.
3.6 SALES BY POWER MARKETER. In each hour of the Term, Power Marketer
shall Schedule, deliver and sell, or cause to be delivered, and OPC shall
purchase and receive, or cause to be received, an amount of Electric Energy
equal to the sum of the OPC Load and the OPC Off-System Sales in that hour.
Power Marketer's obligation to supply OPC with Electric Energy for the purpose
of serving OPC Load shall be treated as a single Transaction under this Master
Agreement for which no further authorization or request by OPC other than this
Master Agreement shall be required; PROVIDED, HOWEVER, that OPC shall be
responsible for providing certain ongoing load following, Scheduling and related
ancillary services necessary to effect the sales of Electric Energy by Power
Marketer to OPC.
3.6.1 DELIVERY POINTS. Power Marketer, in its reasonable
discretion, shall specify one or more Delivery Points for the Electric
Energy for each Transaction in which Power Marketer is Seller. OPC
shall use commercially reasonable efforts to accommodate Delivery Point
designations by Power Marketer consistent with OPC's interests and
rights in the ITS, the terms, conditions and limitations, if any, under
the OPC Contracts, and the requirements of applicable Laws, including
FERC Order 888. OPC shall promptly inform Power Marketer of any
transmission constraints or other impediments to satisfying Power
Marketer's Delivery Point designations so that Power Marketer may notify
OPC of appropriate changes to, or the amount of Electric Energy to be
delivered at, such Delivery Points.
3.7 TRANSFORMER AND TRANSMISSION LOSS ADJUSTMENTS.
(a) With respect to Transactions in which Power Marketer
purchases OPC Energy from an OPC Resource that is a generating plant which
interconnects directly into the ITS, Power Marketer shall provide for the
transformer losses from the generator to Level B-1. This shall be effected by
Power Marketer's purchase of an amount of MWh equal to the MWh that OPC delivers
to Level B-1 divided by the loss factor stated on Exhibit 3.5.3(ii) for that
particular OPC Resource.
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(b) For purposes of supplying OPC with Electric Energy to serve
OPC Load, Power Marketer shall provide for transmission losses which shall be
effected by Power Marketer delivering, or causing to be delivered, to OPC at one
or more Delivery Points an amount of MWh equal to OPC Load divided by 1 minus
the ITS Loss Factor, as determined pursuant to the ITSA, in effect at the time
of each delivery. Power Marketer shall not be responsible for any other costs
or charges imposed or associated with the delivery of Electric Energy pursuant
to this Section 3.7(b).
(c) For purposes of supplying OPC with Electric Energy to satisfy
OPC's Off-System Sales obligations, Power Marketer shall provide for
transmission losses which shall be effected by Power Marketer delivering, or
causing to be delivered, to OPC at one or more Delivery Points an amount of MWh
equal to OPC Off-System Sales divided by 0.97.
(d) For purposes of supplying Electric Energy to satisfy Power
Marketer's sales obligations to third parties that accept delivery on the ITS or
for delivery at Points of Interconnection, Power Marketer shall provide for
transmission losses which shall be effected by Power Marketer delivering, or
causing to be delivered, to OPC at one or more
Delivery Points on the ITS an amount of MWh equal to the amount Power Marketer
desires to receive at the Delivery Point divided by 0.97.
(e) For purposes of supplying Electric Energy to permit OPC to
pump water to the upper reservoir at the Rocky Mountain Pumped Storage
Hydroelectric Generating Facility ("Rocky Mountain"), Power Marketer shall
provide for transmission losses which shall be effected by Power Marketer
delivering, or causing to be delivered, to OPC at one or more Delivery Points an
amount of MWh equal to the amount delivered to Rocky Mountain divided by 0.97.
3.8 SEPA ENERGY. Each of the EMCs is entitled to an allocation of
hydroelectric power from SEPA, the cost of which is billed directly by SEPA to
each EMC. OPC and Power Marketer agree that Power Marketer's obligation to
serve the power supply requirements of OPC pursuant to this Agreement shall be
reduced by the SEPA Energy Scheduled for delivery to the EMCs pursuant to the
SEPA Contracts; PROVIDED, HOWEVER, that OPC shall Schedule delivery of SEPA
Energy to the EMCs as requested by Power Marketer consistent with the CSA.
3.9 IMBALANCES AND REGULATION DEVIATION ERRORS. (a) The Parties
recognize that the actual OPC Load may vary in any hour even when the OPC Load
has been reasonably forecast by Power Marketer and Electric Energy has been
Scheduled as Properly Requested by Power Marketer. Such variances are expected
to be accounted for pursuant to the CSA (which accounts for various types of
imbalances and regulation deviation errors). If such imbalances and regulation
deviation errors occur, Power Marketer shall pay the additional charges for
which OPC is responsible pursuant to the CSA as a result thereof, and Power
Marketer shall
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receive the benefit, if any, of any revenue or credit received by OPC
pursuant to the CSA; PROVIDED, HOWEVER, that OPC shall be solely responsible
for, and shall pay for charges, credits and revenues, if any, resulting from
imbalances and regulation deviation errors resulting from a failure to supply
Electric Energy as Properly Requested from Power Marketer.
(b) In the event that OPC determines that there are material imbalances
and regulation deviation errors which are causing problems in relationships
between OPC and Georgia Power Company, OPC shall so notify Power Marketer, and
the chief executive officers of OPC and Power Marketer shall meet to establish
procedures to correct such problems.
3.10 NON-TERRITORIAL CONTRACTUAL DELIVERY OBLIGATIONS. For purposes of
supplying Electric Energy to satisfy Power Marketer's sales obligations to third
parties that accept delivery on the ITS or delivery at Points of
Interconnection, Power Marketer shall be responsible for and shall pay charges
arising from any Non-Territorial Contractual Delivery Obligations in the event
and to the extent such charges are imposed on and paid by OPC pursuant to the
ITSA.
ARTICLE 4
PRICE
4.1 OPC'S CONTRACT PRICE. Subject to Section 4.3 hereof, the Contract
Price for Electric Energy sold by OPC to Power Marketer shall be the Energy Cost
for OPC Energy that Power Marketer Properly Requests.
4.2 POWER MARKETER'S CONTRACT PRICE. Subject to Section 4.3 hereof,
(i) with respect to sales of Electric Energy by Power Marketer to OPC relating
to OPC Load, the Contract Price shall be equal to the $/MWh charges as reflected
on Exhibit 4.2 ("Power Marketer Sales Price"), and (ii) with respect to sales of
Electric Energy by Power Marketer to OPC relating to OPC Off-System Sales, the
Contract Price shall be as agreed to by the Parties (the "Power Marketer Off-
System Sales Price"); PROVIDED, HOWEVER, that with respect to the OPC Off-System
Sales Contracts listed on Exhibit 3.5.2 hereto, Power Marketer and OPC have
agreed that the Contract Price shall be equal to the price charged by OPC under
such OPC Off-System Sales Contracts.
4.3 AMOUNTS DUE TO OPC AND POWER MARKETER. Each month OPC shall charge
Power Marketer an amount equal to the aggregate Energy Costs attributable to the
OPC Energy that is Properly Requested by Power Marketer, including amounts, if
any, owing under the CSA pursuant to Section 3.4(c) and 3.9 above. Each month
Power Marketer shall charge OPC an amount equal to the product of (i) the OPC
Load purchased by OPC during the month and (ii) the Power Marketer Sales Price,
PLUS an amount equal to the product of (i) each OPC Off-System Sales quantity
purchased by OPC from Power Marketer during the month and
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(ii) the Power Marketer Off-System Sales Price applicable to each such OPC
Off-System Sale; PROVIDED, HOWEVER, that the amounts so determined shall be
subject to the following adjustments:
4.3.1 AVAILABILITY OF NUCLEAR OPC RESOURCES.
(a) The Power Marketer Sales Price has been computed based upon
certain assumptions relating to the expected availability of the nuclear
OPC Resources during the four-month period commencing September 1, 1996
and ending on the Termination Date. Such price assumes (i) expected
cumulative availability (measured in MWh) of [ ]* MWh for Plant Hatch
(Units 1 and 2 combined) and [ ]* MWh for Plant Vogtle (Units 1 and 2
combined) for such period, as reflected on Exhibit 4.3.1 hereto.
Adjustments to the amounts otherwise due to Power Marketer or OPC shall
be made to reflect and take into account any deviation between the
expected availability of Plant Hatch and Plant Vogtle, respectively, and
the actual availability of such nuclear OPC Resources. If Plant Hatch
or Plant Vogtle generates Electric Energy in excess of the assumed MWh
availability, additional amounts (as described below) shall be payable
by Power Marketer to OPC; alternatively, if Plant Hatch or Plant Vogtle
generates Electric Energy less than the expected MWh availability, then
OPC shall owe additional amounts (as described below) to Power Marketer.
(b) If the total actual OPC nuclear generation (in MWh) ("Total
Actual OPC Nuclear Generation") for Plant Hatch or Plant Vogtle,
respectively, shall exceed the total expected OPC nuclear generation
(in MWh) as determined pursuant to paragraph (a) above ("Total
Expected OPC Nuclear Generation") for the respective generation
facilities ("Excess Generation"), then Power Marketer shall pay to
OPC an amount equal to the product of: (i) the amount of such Excess
Generation and (ii) [ ]*/MWh if the nuclear OPC Resource that shall
have experienced Excess Generation is Plant Hatch and [ ]*/MWh if
the nuclear OPC Resource that shall have experienced Excess
Generation is Plant Vogtle. If the Total Actual OPC Nuclear
Generation for Plant Hatch or Plant Vogtle is less than the Total
Expected OPC Nuclear Generation for the respective plants
("Generation Shortfall"), regardless of whether the Generation
Shortfall results from or is the result of a scheduled or forced
outage, a limited load operating condition or other event or
condition that adversely affects the availability of such nuclear OPC
Resource, then OPC shall
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* Indicates information that has been filed separately with the Secretary
of the Commission as an attachment to a request for Confidentiallyity with
respect to the ommitted information.
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pay to Power Marketer an amount equal to the product of: (i) the
Generation Shortfall and (ii) [ ]*/MWh if the nuclear OPC Resource
that shall have suffered a Generation Shortfall is Plant Hatch and
[ ]*/Mwh if the nuclear OPC Resource that shall have suffered a
Generation Shortfall is Plant Vogtle.
(c) The Total Actual OPC Nuclear Generation for Plant
Hatch and Plant Vogtle shall be compared to Total Expected OPC
Nuclear Generation for Plant Hatch and Plant Vogtle,
respectively, computed on a cumulative basis from the
Commencement Date; PROVIDED, HOWEVER, that as set forth on
Exhibit 4.3.1 hereto, the differences between the Total Actual
OPC Nuclear Generation and the Total Expected Nuclear Generation
at the end of each month during the Term shall be settled
financially between OPC and Power Marketer on a monthly basis.
(d) Exhibit 4.3.1 sets forth the intended operation of
this Section 4.3.1, reflecting possible variances in
availability (in MWh) on a month-to-month basis, resulting in
payments between the Parties on account of Excess Generation in
certain months and Generation Shortfalls in others.
4.3.2 DEVIATION FROM FORECAST ENERGY COSTS. As soon as
reasonably practicable after the end of each month, OPC shall compare
the actual average monthly Energy Cost for each of the OPC Resources
with the Forecast Energy Cost for each such OPC Resource as shown on
Exhibit 3.5.3(iii) hereto. If the actual average monthly Energy Cost
exceeds [ ]*% of the Forecast Energy Cost for any of the OPC
Resources during the month, then the amount otherwise due Power Marketer
pursuant to this Section 4.3 shall be increased by an amount equal to
the product of (i) the amount of the actual average monthly Energy Cost
of any OPC Resource in excess of [ ]*% of the Forecast Energy Cost of
such OPC Resource for such month and (ii) the Electric Energy Properly
Requested by Power Marketer from such OPC Resource during such month.
No adjustment shall be made to the extent that the actual average
monthly Energy Cost does not exceed [ ]*% of the Forecast Energy
Cost for an OPC Resource during any month. Power Marketer may, from
time to time, provide for the cost of fuel for the account of OPC in
order to permit the owner of Hartwell Units 1 and 2 ("Hartwell") to
produce Electric Energy and, consequently, no adjustment shall be made
to Energy Cost under this Section 4.3.2 for Hartwell.
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* Indicates information that has been filed separately with the Secretary
of the Commission as an attachment to a request for Confidentiallyity with
respect to the ommitted information.
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4.3.3 ROCKY MOUNTAIN "TRUE-UP" ADJUSTMENT. On the Commencement
Date and at the end of the Term, OPC shall determine the water level in
the upper reservoir of Rocky Mountain to determine the estimated
megawatt hours of generation in storage in accordance with Exhibit
4.3.4, column 1 (Upper Reservoir Level Ft.) and column 4 (estimated MWh
in Storage Generating). In the event that the beginning megawatt hours
minus the ending megawatt hours is positive, then Power Marketer shall
pay OPC this difference (in MWh) times the Power Marketer Sales Price in
effect for the last month of the Term. In the event that the beginning
megawatt hours minus the ending megawatt hours is negative, then OPC
shall pay Power Marketer an amount equal to this difference (in MWh)
times the Power Marketer Sale Price in effect for the last month of the
Term.
4.3.4 CERTAIN SALES FOR RESALE. The Parties understand and agree
that the Power Marketer Sales Price applies to all Electric Energy
required to enable OPC to satisfy its obligations under the EMC
Contracts to meet the requirements of each of the EMCs for the operation
of their electric distribution systems, including serving the "customer
choice" customers which are not situated within the territorial service
area of any such EMC; PROVIDED, HOWEVER, that if, on or after the
Effective Date, an EMC enters into a contract with a customer for the
sale of Electric Energy for resale, the Power Marketer Sales Price for
Electric Energy sold to OPC to serve such wholesale sale by such EMC
shall be adjusted to cover the actual cost of such Electric Energy. OPC
and Power Marketer shall negotiate to determine the actual cost of
providing such Electric Energy.
4.4 NETTING OF PAYMENT OBLIGATIONS. The Parties shall satisfy their
respective financial obligations to each other by netting the amounts due to OPC
from Power Marketer against amounts due to Power Marketer from OPC hereunder,
subject to the provisions of Section 7.2, and such netting shall be a condition
to each Party's duty of payment hereunder.
4.5 AMENDMENTS, MODIFICATIONS OF OPC CONTRACTS. The Parties agree and
understand that the Power Marketer Sales Price is based upon and reflects the
OPC Contracts in effect on the Effective Date and the pending or proposed
amendments thereto, if any, which are listed on Exhibit 3.5.3(i). In the event
that additional amendments or modifications to the OPC Contracts become
effective and, as a result thereof, the economic benefit anticipated to be
derived by Power Marketer pursuant to this Agreement would reasonably be
expected to be materially and adversely affected, Power Marketer and OPC agree
to negotiate in good faith modifications to this Agreement in order to
substantially preserve the economic return that would have been derived by Power
Marketer in the absence of such amendments or modifications.
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ARTICLE 5
CONFIDENTIAL INFORMATION
5.1 CONFIDENTIAL INFORMATION. Each Party agrees that any Confidential
Information which has been disclosed or will be disclosed directly or indirectly
to it by or on behalf of the other Party shall, indefinitely in the case of
trade secrets as defined under the Georgia Trade Secrets Act of 1990, and for
three (3) years in the case of Confidential Information that is not a trade
secret: (i) not be disclosed by it to any other person who is not an employee,
officer, director, advisor, lender, representative, or Affiliate of such Party,
and their respective employees, officers, directors advisors, lenders,
representatives, or Affiliates (collectively "Representatives"), who need to
know and agree to maintain the confidentiality of such Confidential Information
in accordance with the terms hereof; (ii) be maintained by it in confidence in a
manner so as to ensure that it will not be viewed or taken by any unauthorized
person or further disclosed in a manner not authorized by this Agreement; and
(iii) not be used except for the purposes of performing this Agreement. OPC
expressly authorizes and grants its consent to Power Marketer to use
Confidential Information, whether acquired before or after the Effective Date,
pertaining to OPC Contracts, OPC Resources, OPC Load, and OPC Off-System Sales
for the purpose of exercising Power Marketer's rights under this Agreement,
including Power Marketer's right to buy Electric Energy from OPC or any other
person and to sell Electric Energy to OPC or any other person, whether Electric
Energy is produced by or attributable to OPC Resources or other resources.
5.2 AUTHORIZED DISCLOSURE. Notwithstanding anything contained in this
Article 5, Confidential Information may be disclosed to any governmental,
judicial or regulatory authority requiring such Confidential Information,
provided that: (i) such Confidential Information is submitted under applicable
provisions, if any, for confidential treatment by such governmental, judicial or
regulatory authority; (ii) prior to such disclosure, the Party who supplied the
Confidential Information is given notice of the disclosure requirement so that
it may take whatever action it deems appropriate, including intervention in any
proceeding and the seeking of an injunction to prohibit such disclosure; and
(iii) the Party subject to the governmental, judicial or regulatory authority
endeavors to protect the confidentiality of any Confidential Information to the
extent reasonable under the circumstances and uses its good faith efforts to
prevent the further disclosure of any Confidential Information provided to any
governmental judicial or regulatory authority.
5.3 RETURN OF CONFIDENTIAL INFORMATION. Upon (i) the termination of
this Agreement and (ii) the request of a Party, the other Party shall return all
written Confidential Information (including written confirmation of oral
communications) provided by the requesting Party which was stamped
"confidential" and shall not retain any copies of such written Confidential
Information. In the event of such request, all documents, analyses,
compilations, studies or other materials prepared by the returning Party or its
Representatives that contain or reflect Confidential Information (other than
computer archival and backup tapes or archival and backup files (collectively
"Computer Tapes") and billing and trading records
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(collectively, "Other Records")) shall be destroyed and no copy thereof shall
be retained (such destruction to be confirmed in writing by a duly authorized
officer of the returning Party). Computer Tapes and Other Records shall be
kept confidential in accordance with the terms of this Agreement.
5.4 RIGHT TO REMEDIES. In the event of an unauthorized disclosure to a
third party, the limitations on remedies contained in Section 9.6 shall not
apply, but the limitations on liability of Section 9.2 shall apply, and in the
event of a breach neither Party will have an adequate remedy at law and
accordingly shall, in addition to any other available legal or equitable
remedies, be entitled to an injunction against such breach without any
requirement to post a bond as a condition of such relief. Each Party shall be
responsible for any breach by its Representatives of the obligations of
confidentiality contained in this Agreement and shall hold harmless and
indemnify the damaged Party from any damages caused by any unauthorized
disclosure by such persons.
5.5 GEORGIA TRADE SECRETS ACT. Except as expressly provided in
Article 5 of this Agreement, including OPC's consent to the use by Power
Marketer of Confidential Information in its trading operations pursuant to this
Agreement, the rights of the Parties under this Agreement are in addition to and
not in lieu of their rights under Georgia law, including but not limited to the
Georgia Trade Secrets Act of 1990. Nothing in this Article 5 shall be construed
as a waiver on the part of any Party of any privilege or objection of any kind
to the disclosure or use of Confidential Information.
ARTICLE 6
RECORDS
6.1 RECORDS OF TRANSACTIONS. Each Party shall keep such records as may
be needed to afford a clear history of the Scheduled deliveries and Transactions
hereunder. In maintaining such records, OPC and Power Marketer may rely upon
the logs and other meter information routinely recorded by Transmission
Providers or utilities responsible for coordination of the Transactions.
ARTICLE 7
BILLING AND PAYMENT
7.1 BILLING STATEMENTS. OPC shall deliver to Power Marketer no later
than on the tenth (10th) day of each month, a statement (the "Statement")
setting forth the amounts of Electric Energy purchased by OPC from Power
Marketer at the applicable Power Marketer Sales Price and the respective
Power Marketer Off-System Sales Prices as adjusted pursuant to Section 4.3,
and the amounts of Electric Energy purchased by Power Marketer from OPC at
the applicable Energy Cost and any amounts owed to Power Marketer pursuant to
Section
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3.2(c). To the extent that OPC has not yet received or been able to
compile the applicable Energy Cost figures as of such date, OPC may set forth on
such Statement its good-faith estimate of the Energy Cost of an OPC Resource,
PROVIDED that in no event shall such estimate exceed [ ]*% of the
corresponding Forecast Energy Cost for such OPC Resource; and PROVIDED, FURTHER,
that OPC shall compile the actual Energy Costs and "true-up" such estimates as
promptly as practicable pursuant to Section 7.5 hereof.
7.2 OFFSET OF PAYMENT OBLIGATIONS. The Parties shall discharge their
obligations to pay through netting, in which case the Party, if any, owing the
greater aggregate amount shall pay to the other Party the difference between the
amounts owed. Each Party reserves to itself all rights, setoffs, counterclaims
and other remedies and defenses, consistent with Article 9, which such Party has
or may be entitled to arising from or out of this Agreement. All outstanding
Transactions and obligations to make payment in connection therewith or under
this Agreement or any other agreement between the Parties may be offset against
each other, set-off or recouped therefrom.
7.3 PAYMENTS. Payments shall be due on or before the later of the
following: (i) the tenth (10th) Business Day after receipt of the Statement or
(ii) the twentieth (20th) day of the month in which the Statement is received.
The Party owing to the other shall render by wire transfer payments of the
amount due for Transactions during the preceding month. Payment shall be made
to the payment address provided in Exhibit 13.2 hereto. If either Party, in
good faith, disputes any part of any statement, it shall provide a written
explanation of the basis for the dispute and pay the portion of such statement
conceded to be correct no later than the due date as calculated in accordance
with the preceding sentence. If any amount disputed is determined to be due to
the other Party, it shall be paid within ten days of such determination, along
with interest calculated at the Interest Rate from the original due date until
the date paid. Absent such a good faith dispute, overdue payments shall bear
interest from, and including, the due date to, but excluding, the date of
payment at a rate equal to the Interest Rate.
7.4 AUDIT RIGHTS. Each Party or any third party representative of a
Party shall have the right, at its sole expense and during normal working hours,
to examine the records of the other Party to the extent reasonably necessary to
verify the accuracy of any statement, charge or computation made pursuant to
this Agreement. If requested, a Party shall provide to the other Party
statements evidencing the quantities of Electric Energy delivered at the
Delivery Point. If any such examination reveals any inaccuracy in any
statement, the necessary adjustments in such statement and the payments thereof
will be promptly made and shall bear interest calculated at the Interest Rate
from the date the overpayment or underpayment was made; PROVIDED, HOWEVER, that
no adjustment for any statement or payment will be made unless objection to the
accuracy thereof was made prior to the lapse of two
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* Indicates information that has been filed separately with the Secretary
of the Commission as an attachment to a request for Confidentiality with
respect to the ommitted information.
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(2) years from the rendition thereof; and PROVIDED, FURTHER, that this
provision of this Agreement will survive any termination of this Agreement
for a period of two (2) years from the date of such termination for the
purpose of such statement and payment objections.
7.5 SUBSEQUENT PAYMENT ADJUSTMENTS. The Parties understand that in
certain cases monthly billings will need to be made on an estimated basis,
including with respect to the calculation of Energy Cost for each of the OPC
Resources. Each Party shall cooperate in good-faith with the other Party to
obtain the requisite information and perform the necessary computations so as to
"true-up" any estimated billings promptly.
ARTICLE 8
TAXES
8.1 SELLER'S OBLIGATION. Seller is liable for and shall pay, or cause
to be paid, or reimburse Buyer if Buyer has paid, all Taxes applicable to a
Transaction arising prior to the Delivery Point(s). If Buyer is required to
remit any such Tax, the amount shall be deducted from any sums becoming due to
Seller. Seller shall indemnify, defend and hold harmless Buyer from any Claims
for such Taxes.
8.2 BUYER'S OBLIGATION. Buyer is liable for and shall pay, cause to be
paid, or reimburse Seller if Seller has paid, all Taxes applicable to a
Transaction arising at and from the Delivery Point(s), including any Taxes
imposed or collected by a taxing authority with jurisdiction over Buyer. Buyer
shall indemnify, defend and hold harmless Seller from any Claims for such Taxes.
8.3 EXEMPTION CERTIFICATES. Either party, upon written request of the
other, shall provide a certificate of exemption or other reasonably satisfactory
evidence of exemption if either Party or a Transaction is exempt from Taxes, and
shall use reasonable efforts to obtain and cooperate with obtaining any
exemption from or reduction of any Taxes. Each Party shall use reasonable
efforts to administer this Agreement and implement the provisions in accordance
with the intent to minimize Taxes.
ARTICLE 9
INDEMNIFICATION AND REMEDIES
9.1 GENERAL INDEMNITY. Subject to Section 9.2 hereof, Seller and Buyer
shall each indemnify, defend and hold harmless the other Party from any Claims
or other losses arising from any act or incident occurring when title to the
Contract Quantity is vested in the indemnifying Party pursuant to Section 3.3
hereof.
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9.2 LIMITATION ON REMEDIES. THE PARTIES CONFIRM THAT THE EXPRESS
REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE
ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR'S LIABILITY SHALL BE
LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW
OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN
PROVIDED, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES
ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL
OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY
HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR IN CONTRACT UNDER ANY INDEMNITY
PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS
HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE
CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER
SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE
EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES
ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OTHERWISE
OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE LIQUIDATED DAMAGES
CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.
9.3 DUTY TO MITIGATE. Each Party agrees that it has a duty to mitigate
damages and covenants that it will use commercially reasonable efforts to
minimize any damages it may incur as a result of the other Party's performance
or non-performance of this Agreement.
9.4 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH HEREIN, OPC, WITH RESPECT
TO THE SALE OF ELECTRIC ENERGY TO POWER MARKETER, AND POWER MARKETER, WITH
RESPECT TO THE SALE OF ELECTRIC ENERGY TO OPC, EXPRESSLY NEGATES ANY OTHER
REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO CONFORMITY TO
MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE.
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9.5 SATISFACTORY CREDIT SUPPORT FROM POWER MARKETER. A condition to the
effectiveness of this Agreement shall be the delivery by Power Marketer of a
corporate guaranty in an amount not less than [ ]* and in a form and from a
person, which may include Power Marketer's parent corporation, satisfactory to
OPC in its sole discretion. OPC may, in its sole discretion, accept other forms
of credit support in lieu of such guaranty.
9.6 OPC LIMITATION ON LIABILITY. In no event shall either Party be
liable to the other for damages under this Agreement in an amount greater
than [ ]*; PROVIDED that the foregoing limitation shall not apply to
payments on account of or attributable to Electric Energy purchased by either
Party from the other.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 MUTUAL REPRESENTATIONS. On the date hereof, the Effective Date and
the date of entering into each Transaction, each Party represents and warrants
to the other Party: (i) it is duly organized, validly existing and in good
standing under the laws of the state of its incorporation and, in the case of
Power Marketer, is doing business as a foreign corporation in the State of
Georgia; (ii) it has all requisite corporate power to own, operate and lease its
properties and carry on its business as now conducted; (iii) it has all
regulatory authorizations, including any required authorization from the Rural
Utilities Service of the United States Department of Agriculture ("RUS"),
necessary for it to legally perform its obligations under this Agreement and
each Transaction; (iv) the execution, delivery and performance of this Agreement
and each Transaction are within its powers, have been duly authorized by all
necessary action and do not violate any of the terms or conditions in its
governing documents, any contract or other agreement to which it is a party or
any Law applicable to it; (v) each of this Master Agreement and each Transaction
when entered into in accordance with this Agreement constitutes its legally
valid and binding obligation enforceable against it in accordance with its
terms, subject to any Equitable Defenses; (vi) there are no Bankruptcy
Proceedings pending or being contemplated by it or, to its knowledge, threatened
against it; (vii) there are no Legal Proceedings that would be reasonably likely
to materially adversely affect its ability to perform this Agreement and each
Transaction; and (viii) it has knowledge and experience in financial matters and
in the electric industry that enable it to evaluate the merits and risks of this
Agreement and each Transaction.
10.2 ADDITIONAL OPC REPRESENTATIONS. OPC further represents and
warrants that on the date hereof, the Effective Date and the date of entering
into each Transaction: (i) the EMC Contracts are and will be in full force and
effect throughout the Term and will not be
- ---------------------------
* Indicates information that has been filed separately with the Secretary
of the Commission as an attachment to a request for Confidentiality with
respect to the ommitted information.
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amended so as to affect OPC's ability to perform its obligations under this
Agreement; (ii) except as set forth on Exhibit 3.5.3(ii) hereto, there are no
planned outages or other limitations on the availability of any of the OPC
Resources during the Term; (iii) Exhibit 3.5.3(i) hereto sets forth a true
and complete list of each OPC Resource and each material written OPC
Contract; (iv) correct and complete copies of the OPC Contracts listed on
Exhibit 3.5.3(i) hereto have previously been delivered to Power Marketer by
OPC; (v) except as stated on Exhibit 3.5.3(i) hereto, no amendments to the
OPC Contracts are proposed or pending as of the Effective Date that would
affect this Agreement; (vi) each OPC Contract is valid, binding and in full
force and effect and enforceable by or against the respective parties thereto
in accordance with its terms; (vii) OPC has fulfilled, and will continue to
fulfill during the Term, all of its obligations under each OPC Contract;
(viii) there has not occurred any default by OPC or any event which, with the
lapse of time or the giving of notice or both will become a default of OPC
under any of the OPC Contracts; and (ix) OPC is not in arrears in respect of
the performance or satisfaction of the terms or conditions to be performed or
satisfied by it under any of the OPC Contracts, and, to the best knowledge of
OPC, no waiver of any of such terms or conditions has been granted thereunder
by any of the parties thereto.
10.3 ADDITIONAL POWER MARKETER REPRESENTATIONS. Power Marketer further
represents and warrants that it is a power marketer authorized by the FERC to
purchase and sell Electric Energy at negotiated rates and in accordance with the
terms of this Agreement.
10.4 GOOD TITLE. Each Party represents and warrants that it will
deliver to the other good title to Electric Energy delivered hereunder, free and
clear of all liens, claims and encumbrances arising prior to transfer of title
at the Delivery Point.
10.5 CONTINUING REPRESENTATIONS AND WARRANTIES. Each Party covenants
that it will cause these representations and warranties to be true and correct
throughout the term of this Agreement.
ARTICLE 11
DEFAULTS AND REMEDIES
11.1 EVENTS OF DEFAULT. An "Event of Default" shall mean with respect
to a Party ("Defaulting Party"):
11.1.1 The failure by the Defaulting Party to make, when due, any
payment required if such failure is not remedied within five Business
Days after written notice of such failure is given to the Defaulting
Party by the other Party ("Notifying Party"); PROVIDED, that the payment
is not the subject of a good faith dispute as described in Section 7.3
hereof; or
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11.1.2 Any material representation or warranty made by the
Defaulting Party herein shall prove to have been false or misleading in
any material respect when made or deemed to be repeated; or
11.1.3 The failure by the Defaulting Party to perform any
covenant set forth in this Agreement (other than its obligations to make
any payment or obligations which are otherwise specifically covered in
this Section 11.1 as a separate Event of Default or its obligations to
deliver or receive Electric Energy, a remedy for which is provided in
Section 3.4 hereof) and such failure is not excused by Force Majeure or
cured within five Business Days after written notice thereof to the
Defaulting Party; or
11.1.4 The Defaulting Party shall be subject to a Bankruptcy
Proceeding.
11.2 EARLY TERMINATION; REMEDIES. If an Event of Default occurs with
respect to a Defaulting Party at any time during the Term, the other party
("Non-Defaulting Party") may, for so long as the Event of Default is continuing,
(i) establish a date (which date shall be between five and ten Business Days
after the Non-Defaulting Party delivers notice to the Defaulting Party) ("Early
Termination Date") on which any or all Transactions selected by it shall
terminate (individually, a "Terminated Transaction" and collectively the
"Terminated Transactions") and (ii) withhold any payments due to the Defaulting
Party under this Agreement; PROVIDED, HOWEVER, that if the Event of Default is
that the Defaulting Party becomes subject to a Bankruptcy Proceeding, then all
Transactions and this Agreement shall automatically terminate without notice and
without any other action by either Party as if an Early Termination Date had
been immediately declared prior to such Event of Default. Regardless of whether
an Early Termination Date is declared, if an Event of Default shall have
occurred, the Non-Defaulting Party shall be entitled to exercise any remedy
available at law or equity consistent with Article 9 hereof to recover its
damages, including attorneys' fees, resulting from any Event of Default.
11.3 SPECIAL EARLY TERMINATION RIGHT. OPC shall have the right to
terminate this Agreement prior to the end of the Term in the event that Power
Marketer's failure to supply OPC with Electric Energy sufficient for OPC to
service the OPC Load results in the interruption by Georgia Power Company of the
flow of Electric Energy to the EMCs pursuant to Section 16.3 of the CSA,
regardless of whether and when such condition is subsequently cured; PROVIDED,
HOWEVER, that under no circumstances shall this provision apply if Power
Marketer's failure to supply Electric Energy or the interruption caused by
Georgia Power Company is the result of Force Majeure or the imposition of a
rolling "brownout" or "blackout" or other similar demand-side management
controls or practices employed in the geographical area. Neither OPC nor Power
Marketer shall have any liability for damages in the event OPC exercises this
early termination right. Notwithstanding the foregoing, OPC and Power Marketer
each shall remain liable for any amounts on account of Electric Energy
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furnished to the other Party prior to the effective date of such early
termination and for any other amounts accrued as of such date. Power
Marketer and OPC shall agree to a final accounting and settlement of their
obligations to each other as soon as practicable as provided in Section 13.4
hereof.
11.4 FAILURE TO PAY. Notwithstanding any other provision of this
Agreement, if either Party fails to pay the other any amounts when due, the
other Party shall have the right to (i) suspend performance under this Agreement
until such amounts plus interest have been paid and/or (ii) exercise any remedy
available at law or in equity to enforce payment of such amount plus interest;
PROVIDED, HOWEVER, that if the Defaulting Party, in good faith, shall dispute
the amount of any such billing or part thereof and shall pay such amounts as it
concedes to be correct, no suspension shall be permitted.
11.5 EFFECT OF REGULATION. In the event OPC is or becomes regulated by
a federal, state or local regulatory body, and such body shall disallow all or
any portion of any costs incurred or yet to be incurred by OPC under any
provision of this Agreement, such action shall not operate to excuse OPC from
performance of any obligation nor shall such action give rise to any right of
OPC to any refund or retroactive adjustment of any amounts payable hereunder.
ARTICLE 12
FORCE MAJEURE
12.1 EFFECT OF FORCE MAJEURE. If either Party is rendered unable by a
Force Majeure to carry out, in whole or part, its obligations hereunder and such
Party gives notice and full details of the event to the other Party as soon as
practicable after the occurrence of the event, then during the pendency of such
Force Majeure but for no longer period, the obligations of the Party affected by
the event (other than the obligation to make payments then due or becoming due
with respect to performance prior to the event) shall be suspended to the extent
required. The Party affected by the Force Majeure shall remedy the Force
Majeure with all reasonable dispatch.
ARTICLE 13
MISCELLANEOUS
13.1 ASSIGNMENT. Neither Party shall assign this Agreement or its
rights hereunder without the prior written consent of the other Party; PROVIDED,
HOWEVER, either Party may, without the consent of the other Party (and without
relieving itself from liability hereunder), (i) transfer, pledge, encumber or
assign this Agreement or the accounts, revenues, or proceeds hereof in
connection with any financing or other financial arrangements, (ii) transfer or
assign this Agreement to an Affiliate of such party, or (iii) transfer or assign
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this Agreement to any person or entity succeeding to all or substantially all
of the assets of such Party; PROVIDED, HOWEVER, that in each such case, this
Agreement shall be binding upon any such assignee, such assignee shall agree
in writing to be bound by the terms and conditions hereof and each of the
representations of a Party shall be true with respect to such Party's
assignee as of the effective date of such assignment.
13.2 NOTICES. All notices, requests, statements or payments shall be
made as specified in Exhibit 13.2 hereto. Notices required to be in writing
shall be delivered by letter, facsimile or other documentary form. Notice by
facsimile or hand delivery shall be deemed to have been received by the close of
the Business Day on which it was transmitted or hand delivered (unless
transmitted or hand delivered after close, in which case it shall be deemed
received at the close of the next Business Day). Notice by overnight mail or
courier shall be deemed to have been received two Business Days after it was
sent. A Party may change its address by providing notice of same in accordance
herewith.
13.3 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED,
ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
13.4 SURVIVAL OF OBLIGATIONS. Upon the expiration of the Parties' sale
and purchase obligations under this Agreement, any monies, penalties or other
charges due and owing Seller shall be paid, any corrections or adjustments to
payments previously made shall be determined, and any refunds due Buyer made, as
soon as practicable. All indemnity and confidentiality obligations and audit
rights shall survive the termination of this Agreement. The Parties'
obligations provided in this Agreement shall remain in effect for the purpose of
complying with the provisions of this Section.
13.5 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties relating to the subject matter contemplated by this
Agreement and supersedes all prior agreements, whether oral or written.
13.6 NO PARTNERSHIP. Nothing in this Agreement shall ever be deemed to
create or constitute a partnership, joint venture or association between the
Parties, or to impose a trust or partnership duty, obligation or liability on or
with regard to the Parties.
13.7 AMENDMENT. No amendment or modification to this Master Agreement
shall be enforceable unless reduced to writing and executed by both Parties.
13.8 THIRD PARTIES. The provisions of this Agreement shall not impart
rights enforceable by any person or entity not a Party or not a permitted
successor or assignee of a Party bound by this Agreement.
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13.9 WAIVER. No waiver by either Party hereto of any one or more
defaults by the other in the performance of any of the provisions of this
Agreement or terms of any Transaction shall be construed as a waiver of any
other default or defaults, whether of a like kind or different nature.
13.10 CHARACTER OF TRANSACTIONS. The sale by OPC to Power Marketer of
OPC Energy under this Agreement does not constitute either a sale, lease, or the
dedication of ownership of any OPC Resource.
13.11 SEVERABILITY. Any provision declared or rendered unlawful by a
court of law or regulatory agency with jurisdiction over the Parties or deemed
unlawful because of a statutory change will not otherwise affect the lawful
obligations that arise under this Agreement.
13.12 INTERPRETATION. The term "including" when used in this Agreement
shall not be considered in any way to be in limitation.
13.13 HEADINGS. The headings used for the Articles herein are for
convenience and reference purposes only.
13.14 COUNTERPARTS. This Master Agreement may be executed in multiple
counterparts to be construed as one effective as of the Effective Date.
IN WITNESS WHEREOF, the Parties hereto have caused this Master
Agreement to be executed by their duly authorized officers and copies delivered
to each Party.
OGLETHORPE POWER CORPORATION
By: /s/ T. D. Kilgore Attest: /s/ Patricia Nash
------------------------------ ------------------------------
Title: President and Chief Executive Title: Assistant Secretary
Officer
DUKE/LOUIS DREYFUS L.L.C.
By: /s/ Steven E. Eckert Attest: /s/ Ruby H. Melton
------------------------------ ------------------------------
Title: Senior Vice President Title: Assistant Secretary
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APPENDIX A
All capitalized terms used in this Agreement and not otherwise defined
shall have the respective meanings set forth below, whether singular or
plural.
"Affiliate" means, with respect to any person, any other person (other
than an individual) that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control
with, such person. For this purpose, "control" means the direct or indirect
ownership interest of more than fifty (50) percent of the outstanding capital
stock or other equity interests having ordinary voting power.
"Bankruptcy Proceeding" means, with respect to a Party, that such Party
(i) makes any general assignment or any general arrangement for the benefit
of creditors, (ii) files a petition or otherwise commences, authorizes or
acquiesces in the commencement of a proceeding or cause of action under any
bankruptcy or similar law for the protection of creditors, or has such a
petition involuntarily filed against it and such petition is not withdrawn or
dismissed within 30 days after such filing, (iii) otherwise becomes bankrupt
or insolvent (however evidenced), or (iv) is unable to pay its debts as they
fall due.
"Business Day" means a day on which the Federal Reserve Member Banks in
New York City are open for business; and a Business Day shall open at 8:00
a.m. and close at 5:00 p.m. local time for each Party's principal place of
business.
"Buyer" means the Party to a Transaction who is obligated to purchase
and receive, or cause to be received, Electric Energy during a Period of
Delivery.
"Claims" means all claims or actions, threatened or filed and whether
groundless, false or fraudulent, that directly or indirectly relate to the
subject matter of an indemnity, and the resulting losses, damages, expenses,
attorneys' fees and court costs, whether incurred by settlement or otherwise,
and whether such claims or actions are threatened or filed prior to or after
the termination of this Agreement.
"Commencement Date" has the meaning specified in Section 2.3 hereof.
"Computer Tapes" has the meaning specified in Section 5.3 hereof.
"Confidential Information" means written data or information (or an oral
communication if the party requesting confidentiality for such oral
communication promptly confirms such communication in writing) which is
privileged, confidential or proprietary or which constitutes a trade secret
under the Georgia Trade Secrets Act of 1990, except information which (i) is
a matter of public knowledge at the time of its disclosure or is thereafter
published in or otherwise ascertainable from any source available to the
public without breach of this Agreement, (ii) constitutes information which
is obtained from a third
A-1
<PAGE>
party (who or which is not an Affiliate of one of the Parties hereto) other
than by or as a result of unauthorized disclosure, or (iii) prior to the time
of disclosure had been independently developed by the receiving Party or its
Affiliates not utilizing improper means. Confidential Information shall
remain Confidential and protected under this Agreement when and as such
Confidential Information is incorporated into information, data, notes, or
analyses prepared with or from such Confidential Information.
"Confirmation" means a written notice confirming the specific terms of a
Transaction which confirmation may be substantially in the form set forth on
Exhibit 2.2 hereto.
"Contract Price" means the price in United States dollars (per MWh) to
be paid by Buyer to Seller for the purchase of Electric Energy that is
Scheduled or Properly Requested pursuant to a Transaction.
"Contract Quantity" means the amount of Electric Energy that Seller
agrees to sell and deliver, or cause to be delivered, to Buyer and Buyer
agrees to purchase and receive, or cause to be received, from Seller pursuant
to the terms of a Transaction.
"CSA" means that certain Coordination Services Agreement between Georgia
Power Company and Oglethorpe Power Corporation (An Electric Membership
Generation & Transmission Corporation), dated as of November 12, 1990, as
amended from time to time.
"Defaulting Party" has the meaning specified in Section 11.1 hereof.
"Delivery Point" means any point on the Integrated Transmission System
at which title to Electric Energy passes from Seller to Buyer, including at
any Point of Interconnection as shown on Exhibit 3.2.
"Early Termination Date" has the meaning specified in Section 11.2
hereof.
"Effective Date" has the meaning specified in Section 2.3 hereof.
"Electric Energy" means energy in the form of electricity expressed in
megawatt-hours (MWh) (or in kilowatt-hours when energy is measured at the
points of delivery to the EMCs).
"EMC" means an electric membership corporation as defined in Section
46-3-171(3) of the Georgia Electric Membership Corporation Act, which is a
member of OPC on the Effective Date, as shown on Exhibit 1.1 hereto.
"EMC Contract" means one of those certain Amended and Consolidated
Wholesale Power Contracts between OPC and an EMC, which contract is dated as
of December 1, 1988,
A-2
<PAGE>
as amended from time to time, pursuant to which OPC sells and such EMC
purchases all Electric Energy required to meet the energy requirements of its
customers for the operation of its system.
"EMC Metering Point" means that certain point at which deliveries of
Electric Energy to each EMC, respectively, are measured and received pursuant
to the EMC Contracts.
"Energy Cost" means the (i) actual cost of fuel (and not any other
costs), in United States Dollars (per MWh), incurred by OPC with respect to
Electric Energy produced by OPC Resources (other than the power contracts
described below in this definition), as determined pursuant to the applicable
OPC Contracts; (ii) the actual cost of fuel and variable operations and
maintenance expenses under the block power purchase and sale agreements with
Georgia Power Company; (iii) the costs described on Exhibit 3.5.3(iii) hereto
with respect to the power purchase agreements with Big Rivers Electric
Corporation and Entergy Power, Incorporated; PROVIDED, HOWEVER, that the
Energy Cost with respect to Hartwell shall be deemed to be zero to the extent
Power Marketer arranges for the delivery of gas at its expense to such plant.
The energy cost associated with pumping water at Rocky Mountain is deemed to
be at Power Marketer's expense pursuant to Section 4.3.4 of this Agreement.
"EPT" means Eastern Prevailing Time and refers to the time in effect in
the Eastern Time Zone of the United States, whether Eastern Standard Time or
Eastern Daylight Savings Time.
"Equitable Defenses" means bankruptcy, insolvency, reorganization and
other laws affecting creditors' rights generally, and with regard to
equitable remedies, the discretion of the court before which proceedings to
obtain the same may be pending.
"Event of Default" has the meaning specified in Section 11.1 hereof.
"Excess Generation" has the meaning set forth in Section 4.3.1 hereof.
"FERC" means the Federal Energy Regulatory Commission or any successor
agency which enforces the Federal Power Act.
"Force Majeure" means an event not anticipated as of the Effective Date,
which is not within the reasonable control of the Party (or, in the case of
third party obligations or facilities, the third party) claiming suspension
(the "Claiming Party"), and which by the exercise of due diligence the
Claiming Party is unable to overcome or obtain or cause to be obtained a
commercially reasonable substitute performance therefor. Force Majeure
includes, but is not restricted to: failure of transmission facilities; acts
of God; fire; civil disturbance; labor dispute; labor or material shortage;
sabotage; action or restraint by court order or public or governmental
authority (so long as the Claiming Party has not applied for or assisted in
the application for, and has opposed where and to the extent reasonable, such
government action);
A-3
<PAGE>
PROVIDED, HOWEVER, that neither (i) the loss of Buyer's markets nor Buyer's
inability economically to use or resell Electric Energy purchased hereunder,
nor (ii) the loss or failure of Seller's Electric Energy supply, nor (iii)
Seller's ability to sell Electric Energy to a market at a more advantageous
price, shall constitute an event of Force Majeure. Interruption by a
Transmission Provider shall not be deemed to be Force Majeure unless (i) the
Party contracting with such Transmission Provider shall have made arrangement
with such Transmission Provider for the firm transmission, as defined under
the Transmission Provider's tariff, of the Electric Energy to be delivered or
received hereunder and (ii) such interruption is due to a force majeure as
defined under the Transmission Provider's tariff.
"Forecast Energy Cost" has the meaning specified in Section 3.5.3
hereof, as reflected on Exhibit 3.5.3(iii) hereto.
"Generation Shortfall" has the meaning set forth in Section 4.3.1 hereof.
"Hartwell" has the meaning specified in Section 4.3.2 hereof.
"Integrated Transmission System" or "ITS" means the Transmission
Facilities as defined in the Revised and Restated Integrated Transmission
System Agreement between Oglethorpe Power Corporation (An Electric Membership
Generation & Transmission Corporation) and Georgia Power Company, dated as of
November 12, 1990, as amended from time to time.
"Interest Rate" means the Prime Rate plus two percent, or the maximum
lawful rate permitted by applicable Law, whichever is less.
"ITS Loss Factor" means the EMC transmission loss factor determined
pursuant to the ITSA applicable to deliveries of Electric Energy from any
point on the ITS to any EMC Metering Point, which loss factor is currently
3.7271%.
"ITSA" means the Revised and Restated Integrated Transmission System
Agreement between Oglethorpe Power Corporation (An Electric Membership
Generation & Transmission Corporation) and Georgia Power Company, dated as of
November 12, 1980, as amended from time to time.
"Law" means any law, rule, regulation, order, writ, judgment, decree or
other legal or regulatory determination by a court, regulatory agency or
governmental authority of competent jurisdiction.
"Legal Proceeding" means any suit, proceeding, judgment, ruling or order
by or before any court or any governmental authority.
A-4
<PAGE>
"Level B-1" means the high side of the step-up transformer of a
generating plant that is an OPC Resource which interconnects directly into
the ITS.
"MWh" means megawatt-hour.
"Must Run Resources" has the meaning specified in Section 3.5 hereof.
"Non-Defaulting Party" has the meaning specified in Section 11.2 hereof.
"NERC" means the North American Electric Reliability Council.
"Notifying Party" has the meaning specified in Section 11.1.1 hereof.
"Non-Territorial Contractual Delivery Obligations" means an obligation,
based on a quantity of capacity, energy, or both, which an ITS participant is
contractually committed to deliver or make available from or through the ITS
to a non-territorial entity, as further defined in the ITSA.
"OPC Contracts" means, as of a particular date, all contracts, operating
procedures and understandings (whether written or oral, and if oral, written
statements of the terms thereof) in effect on such date affecting OPC's
rights and obligations with respect to OPC Resources and to the ITS.
"OPC Energy" means all of the available Electric Energy which OPC owns,
purchases or otherwise has a right to take from OPC Resources.
"OPC Load" means, as of a particular hour, the entire Electric Energy
requirements of the EMCs measured at each EMC Metering Point, after reducing
such requirements to reflect the EMCs' aggregate allocation of SEPA Energy
Scheduled for delivery to the EMCs.
"OPC Off-System Sales" means transactions undertaken by OPC pursuant to
the OPC Off-System Sales Contracts.
"OPC Off-System Sales Contracts" means the contracts listed on Exhibit
3.5.2 and, subject to the consent of Power Marketer, contracts entered into
between OPC and third parties pursuant to which OPC sells Electric Energy to
such third parties.
"OPC Resource" means the capacity entitlement or other rights with
respect to generating facilities from which, or power purchase contracts,
interchange agreements or other contracts or agreements under which, OPC is
required or has the right to take, purchase or otherwise acquire Electric
Energy during the Term.
A-5
<PAGE>
"Other Records" has the meaning specified in Section 5.3 hereof.
"Party" and "Parties" mean a party or the parties, respectively, to this
Agreement, including permitted assignees of each pursuant to this Agreement.
"Period of Delivery" means the period from the date physical delivery of
the Electric Energy is to commence to the date physical delivery is to
terminate pursuant to a Transaction.
"Plant Hatch" means those two nuclear generating facilities (and
associated common facilities) having a rated capacity of 810 MW for Unit 1
and 820 MW for Unit 2.
"Plant Vogtle" means those two nuclear generating facilities (and
associated common facilities) having a rated capacity of 1160 MW for Unit 1
and 1160 MW for Unit 2.
"Point of Interconnection" means any point of interconnection between
the ITS and the transmission facilities of an interconnected utility,
electric cooperative or other transmission owner or operator, as set forth on
Exhibit 3.2.
"Power Marketer Off-System Sales Price" has the meaning specified in
Section 4.2 hereof.
"Power Marketer Sales Price" has the meaning specified in Section 4.2
hereof.
"Prime Rate" means for any date, the per annum rate of interest
announced from time to time by Citibank, N.A., as its "prime" rate for
commercial loans, effective for such date as established from time to time by
such bank.
"Properly Requested" or "Properly Requests" means that Power Marketer
has, subject to provisions of the OPC Contracts, NERC and SERC guidelines,
and applicable Laws, Scheduled OPC Resources in accordance with a Transaction
entered into in accordance with Section 2.2 hereof; PROVIDED, that all
Electric Energy attributable to Must Run Resources (which Power Marketer is
obligated to purchase pursuant to Section 3.5.1 hereof) shall be deemed to be
Properly Requested for purposes of this Agreement.
"Regulatory Approvals" means all current and future valid and applicable
Laws, orders, statutes, and regulations of courts or regulatory bodies (state
or federal) having jurisdiction over a Party or any Transaction.
"Replacement Price" has the meaning specified in Section 3.4(a) hereof.
"Representatives" has the meaning specified in Section 5.1 hereof.
A-6
<PAGE>
"Rocky Mountain" has the meaning specified in Section 3.7(e) hereof.
"RUS" has the meaning specified in Section 10.1(iii) hereof.
"Sales Price" has the meaning specified in Section 3.4(b) hereof.
"Scheduling," "Scheduled" or "Schedule" means or relates to the acts of
Seller, Buyer and their designated representatives, including each Party's
Transmission Providers, if applicable, of notifying, requesting and
confirming to each other the quantity of Electric Energy to be delivered
hourly on any given day or days during a Delivery Period at a specified
Delivery Point.
"Seller" means the Party to a Transaction who is obligated to sell and
deliver, or cause to be delivered, Electric Energy during a Period of
Delivery.
"SEPA" means the Southeastern Power Administration, a federal agency of
the United States Government.
"SEPA Energy" means the aggregate amount of Electric Energy Scheduled
for delivery to the EMCs pursuant to the SEPA Contracts.
"SEPA Contracts" means those certain power purchase and sale agreements
between each EMC and SEPA pursuant to which each EMC purchases Electric
Energy from SEPA.
"SERC" means the Southeastern Electric Reliability Council.
"Statement" has the meaning specified in Section 7.1 hereof.
"Taxes" means any or all ad valorem, property, occupation, severance,
generation, first use, conservation, Btu or energy, transmission, utility,
gross receipts, privilege, sales, use, consumption, excise, lease,
transaction, and other or new Taxes, governmental charges, licenses, fees,
permits and assessments, or increases therein, other than taxes based on net
income or net worth.
"Term" has the meaning specified in Section 2.3 hereof.
"Terminated Transaction" has the meaning specified in Section 11.2
hereof.
"Termination Date" has the meaning specified in Section 2.3 hereof.
"Total Actual Nuclear Generation" shall have the meaning set forth in
Section 4.3.1 hereof.
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<PAGE>
"Total Expected Nuclear Generation" shall have the meaning set forth in
Section 4.3.1 hereof.
"Transaction" means a particular transaction agreed to by the Parties
relating to the purchase and sale of Electric Energy pursuant to this Master
Agreement, including sales by OPC pursuant to Section 3.5 and sales by Power
Marketer pursuant to Section 3.6.
"Transaction Agreement" means a written agreement executed by the
Parties to form and effectuate a Transaction which agreement may be in
substantially the form set forth on Exhibit 1.2 hereto.
"Transmission Provider" means the entity or entities transmitting
Electric Energy on behalf of Seller or Buyer to or from the Delivery Point(s)
in a particular Transaction.
A-8
<PAGE>
EXHIBIT 1.1
Electric Membership Corporations of
Oglethorpe Power Corporation
ALTAMAHA EMC
AMICALOLA EMC
CANOOCHEE EMC
CARROLL EMC
CENTRAL GEORGIA EMC
COASTAL EMC
COBB EMC
COLQUITT EMC
COWETA-FAYETTE EMC
EXCELSIOR EMC
FLINT EMC
GRADY EMC
GREYSTONE POWER CORPORATION, AN EMC
HABERSHAM EMC
HART EMC
IRWIN EMC
JACKSON EMC
JEFFERSON EMC
LAMAR EMC
LITTLE OCMULGEE EMC
MIDDLE GEORGIA EMC
MITCHELL EMC
OCMULGEE EMC
OCONEE EMC
OKEFENOKE RURAL EMC
PATAULA EMC
PLANTERS EMC
RAYLE EMC
SATILLA RURAL EMC
SAWNEE EMC
SLASH PINE EMC
SNAPPING SHOALS EMC
SUMTER EMC
THREE NOTCH EMC
TRI-COUNTY EMC
TROUP EMC
UPSON COUNTY EMC
WALTON EMC
WASHINGTON EMC
<PAGE>
EXHIBIT 1.2
FORM OF TRANSACTION AGREEMENT
To Be Agreed Upon
<PAGE>
EXHIBIT 2.2
FORM OF CONFIRMATION
To Be Agreed Upon
<PAGE>
EXHIBIT 3.2
INTERCONNECTION POINTS WITH THE GEORGIA ITS
Alabama Electric Cooperative
Florida Power Corporation
Florida Power & Light Company
Duke Power Company
Jacksonville Electric Authority
South Carolina Electric & Gas Company
South Carolina Public Service Authority
Southern Companies
Tallahassee Electric Department
Tennessee Valley Authority
<PAGE>
EXHIBIT 3.2 (CONTINUED)
OPC ALLOCATION OF
FIRST CONTINGENCY TOTAL TRANSFER CAPABILITY (FCTTC)
UNDER NORMAL OPERATING CONDITIONS
(EFFECTIVE JUNE 1, 1996)
FCTTC (MVA)
INTERFACE WITH GEORGIA ITS To Georgia ITS From Georgia ITS
- -------------------------- -------------- ----------------
Florida [ ]* [ ]*
Sale to GPC [ ]*
Sale to GPC [ ]*
Sale to Entergy (3/1/96) [ ]*
----------------
[ ]*
Alabama Power [ ]* [ ]*
Duke Power [ ]* [ ]*
SC Public Service Authority [ ]* [ ]*
SC Electric and Gas [ ]* [ ]*
Savannah Power [ ]* [ ]*
Gulf Power [ ]* [ ]*
Tennessee Valley Authority [ ]* [ ]*
Purchase from GPC [ ]*
---------
[ ]*
Alabama Electric Cooperative [ ]* [ ]*
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 3.5
OPC RESOURCES(1)
TYPE OF RESOURCE OPC Resources
That Are NOT
Must Run Minimum Maximum
Resources (MW) (MW)
Generating Units Rocky Mountain 1 [ ]* [ ]*
Rocky Mountain 2 [ ]* [ ]*
Rocky Mountain 3 [ ]* [ ]*
Scherer 1(2) [ ]* [ ]*
Scherer 2(2) [ ]* [ ]*
Tallassee [ ]* [ ]*
Wansley 1 [ ]* [ ]*
Wansley 2 [ ]* [ ]*
Wansley CT [ ]* [ ]*
OPC Resources
That Are
Must Run Minimum Maximum
Resources (MW) (MW)
Generating Units Hatch 1 [ ]* [ ]*
Hatch 2 [ ]* [ ]*
Vogtle 1 [ ]* [ ]*
Vogtle 2 [ ]* [ ]*
QF [ ]* [ ]*
- ---------------------
(1) The figures contained in this Exhibit shall not serve to limit the actual
output available from any OPC Resource.
(2) Scherer minimum could be [ ]* if Georgia Power is not taking electric
energy from its ownership share of the generating facility.
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 3.5 (CONTINUED)
Other OPC Resources Minimum Maximum
(MW) (MW)
Purchased Power GPC Block 1(3) [ ]* [ ]*
GPC Block 2(3) [ ]* [ ]*
GPC Block 3(3) [ ]* [ ]*
GPC Block 4(3) [ ]* [ ]*
GPC Block 5(3) [ ]* [ ]*
GPC Block 6(3) [ ]* [ ]*
Big Rivers [ ]* [ ]*
Entergy [ ]* [ ]*
Hartwell 1 [ ]* [ ]*
Hartwell 2 [ ]* [ ]*
- ---------------------
(3) [ ]* availability - minimum applies when energy is being
scheduled under the particular block.
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 3.5.2
POWER PURCHASE AND SALE AGREEMENTS
UNDER WHICH OPC IS OBLIGATED TO SELL ELECTRIC ENERGY
Letter of Commitment to sell power to Alabama Electric Cooperative
beginning January 1, 1996, and extending through December 31, 1996, dated as
of December 15, 1995.
<PAGE>
EXHIBIT 3.5.3(i)
OPC RESOURCES AND OPC CONTRACTS
OPC RESOURCE OPERATIONS GOVERNED BY
- ------------ ----------------------
Georgia Power Blocks Block Power Sale Agreement between
Georgia Power Company and OPC, dated
as of November 12, 1990. Letters
dated as of December 30, 1992 and
December 8, 1993, extending term of
Block Power Sale Agreement. Letter
dated as of August 30, 1994, electing
to reduce capacity OPC is obligated
to purchase under Block Power Sale
Agreement.
Vogtle, Units 1 & 2 Alvin W. Vogtle Nuclear Units Numbers
One and Two Purchase and Ownership
Participation Agreement among Georgia
Power Company, OPC, Municipal
Electric Authority of Georgia and
City of Dalton, Georgia, dated as of
August 27, 1976; Amendment, dated as
of January 18, 1977; Amendment Number
Two, dated as of February 24, 1977.
Alvin W. Vogtle Nuclear Units One and
Two Operating Agreement among Georgia
Power Company, OPC, Municipal
Electric Authority of Georgia and
City of Dalton, Georgia, dated as of
August 27, 1976.
Hatch, Units 1 & 2 Edwin I. Hatch Nuclear Plant Purchase
and Ownership Participation Agreement
between Georgia Power Company and
OPC, dated as of January 6, 1975.
Hatch Operating Agreement between
Georgia Power Company and OPC, dated
as of January 6, 1975.
Scherer, Units 1 & 2 Plant Robert W. Scherer Units Numbers
One and Two Purchase and Ownership
Participation Agreement among Georgia
Power Company, OPC, Municipal
Electric Authority of Georgia and
City of Dalton, Georgia, dated as of
May 15, 1980; Amendment, dated as of
December 30, 1985; Amendment Number
Two, dated as of July 1, 1986;
Amendment Number Three, dated as of
August 1, 1988; Amendment Number
Four, dated as of December 31, 1990.
Plant Robert W. Scherer Units Numbers
One and Two Operating Agreement among
Georgia Power Company, OPC, Municipal
Electric Authority of Georgia and
City of Dalton, Georgia, dated as of
May 15, 1980; Amendment, dated as of
December 30, 1985; Amendment Number
Two, dated as of December 31, 1990.
Plant Scherer Managing Board
Agreement among Georgia Power
Company, OPC, Municipal Electric
Authority of Georgia
<PAGE>
EXHIBIT 3.5.3(i) (CONTINUED)
and City of Dalton, Georgia, dated as
of December 31, 1990. Letter of
Intent re: Use of Eastern and Western
Coal at Scherer, dated as of January
16, 1992; Letter Agreement re:
Capital Modifications and
Expenditures for the use of Western
Coal at Plant Scherer, dated as of
July 7, 1992 (partially executed).
Letter Agreement re: Additional
Amendments to the Scherer and Wansley
Agreements, dated as of December 31,
1990.
Wansley, Units 1, 2, & CT Plant Hal B. Wansley Purchase and
Ownership Participation Agreement
between Georgia Power Company and
OPC, dated as of March 26, 1976;
Plant Hal Wansley Operating Agreement
between Georgia Power Company and
OPC, dated as of March 26, 1976.
Plant Hal Wansley Combustion Turbine
Agreement between Georgia Power
Company and OPC, dated as of August
2, 1982; Amendment dated as of
October 20, 1982. Definitive
Agreement Concerning Transfer Units
Under Phase I of the Clean Air Act
Amendments, dated as of October 30,
1992.
Tallassee, Units 1 & 2 No Operative Documents.
Big Rivers Purchase Long Term Firm Power Purchase
Agreement between Big Rivers Electric
Corporation and OPC, dated as of
December 17, 1990. Letter dated
March 12, 1992. Long Term Firm Power
Purchase Agreement, dated as of July
19, 1989, by and between OPC and Big
Rivers Electric Corporation.
Entergy Purchase Unit Capacity and Energy Purchase
Agreement between OPC and Entergy
Power, Incorporated, dated as of
October 11, 1990; Amendment, dated as
of September 29, 1992. Letter
Agreement Regarding Offer to Sell
Energy, dated as of April 23, 1992;
Amendment, dated as of February 25,
1993.
Hartwell Energy Limited
Partnership Purchase Power Purchase Agreement between OPC
and Hartwell Energy Limited
Partnership, dated as of June 12,
1992. Agreement for Purchase of
230KVS Switchyard and ITS
Interconnection Facilities Agreement,
dated as of August 31, 1992.
<PAGE>
EXHIBIT 3.5.3(i) (CONTINUED)
Rocky Mountain Pumped
Storage Resource Rocky Mountain Pumped Storage
Hydroelectric Project Ownership
Participation Agreement, dated as of
November 18, 1988, by and between OPC
and Georgia Power Company. Rocky
Mountain Pumped Storage Hydroelectric
Project Operating Agreement by and
between OPC and Georgia Power
Company, dated as of November 18,
1988. Pumped Storage Hydroelectric
Project Option Agreement, dated as of
November 18, 1988. Reciprocity
Letter Agreement, dated as of
November 18, 1988. Letters Relating
to Rocky Mountain (Title Defects
Letter; Floyd County Prepayment
Letter; Letter Re: Other Commitments;
Letter Re: Cost of Construction).
QF Agreements Interconnection Policy of OPC and
Members for Cogeneration and Small
Power Producers, dated as of January
1994. Agreement for Purchase of
Power between Habersham Electric
Membership Corporation and Herschel
Webster, dated as of July 26, 1981;
Amendment, dated as of July 8, 1985;
Second Amendment, dated as of June
1993. Agreement for Purchase of
Power from Georgia Waste Systems,
Inc., dated January 1993. Agreement
for Purchase of Power from Southeast
Paper Manufacturing Co., dated as of
February 29, 1988; Amendment, dated
as of November 11, 1991. Agreement
for Purchase of Power from Spartan
Mills, dated as of April 6, 1992.
Proposed Amendments Amendment No. 1 to the CSA between
GPC and OPC dated Draft as of
November 7, 1995. Proposed sale of
FLA ITS Interface capability to GPC
from OPC dated December 21, 1995.
Proposed sale of FLA ITS Interface
capability to Entergy Power Inc. from
OPC dated December 29, 1995.
Proposed Amendment to Plant Hal B.
Wansley Operating Agreement among
GPC, OPC, MEAG, and the City of
Dalton.
<PAGE>
EXHIBIT 3.5.3(i) (CONTINUED)
OTHER AGREEMENTS
Integrated Transmission
System Agreement Revised and Restated Integrated
Transmission System Agreement between
OPC and Georgia Power Company, dated
as of November 12, 1990. ITSA, Power
Sale and Coordination Umbrella
Agreement between OPC and Georgia
Power Company, dated as of November
12, 1990.
Coordination Services Coordination Services Agreement
between Georgia Power Company and
OPC, dated as of November 12, 1990.
Transmission O&M Transmission Facilities Operation and
Maintenance Contract between Georgia
Power Company and OPC, dated as of
June 9, 1986.
ITS Transfer Capability Purchase of TVA ITS Interface
capability from Municipal Electric
Authority of Georgia to OPC dated
December 17, 1990. Purchase of TVA
ITS Interface capability from GPC to
OPC dated November 12, 1990. Sale of
FLA ITS Interface capability to GPC
and from OPC dated May 30, 1995.
SEPA SEPA Contract No. 89-00-1501-912
between SEPA and OPC dated May 28,
1991 and amended in Supplemental
Agreement No. 1 dated November 26,
1991, Supplemental Agreement No. 2
dated May 23, 1994, Supplemental
Agreement No. 3 dated January 30,
1995. SEPA Contract No.
89-00-1501-916 between SEPA and OPC
dated December 29, 1993 and amended
in Supplemental Agreement No. 1 dated
June 17, 1994, Supplemental Agreement
No. 2 dated July 28, 1995,
Supplemental Agreement No. 3 dated
November 24, 1995.
Operating Procedures Rocky Mountain Pumped Storage
Hydroelectric Plant Coordination
Procedures Agreement between
Oglethorpe Power Corporation and
Georgia Power Company effective June
1, 1995. Plant Scherer Units #1 and
#2 Dispatch Procedures Rev. 6..
Hartwell Energy Facility Operation
and Maintenance Procedure for Unit
Dispatch effective June 6, 1994.
Operating Procedures for use between
System Control Center and Rocky
Mountain Plant effective November 18,
1994.
<PAGE>
EXHIBIT 3.5.3(ii)
EXPECTED AVAILABILITY OF EACH OPC RESOURCE
OPC RESOURCE PLANNED OUTAGES DUE TO FORCED LOSS FACTOR
SCHEDULED MAINTENANCE OUTAGE
AFFECTING THE TERM RATE
1996 SCHEDULED OUTAGES
(Latest Version of Schedule)
FROM TO
Hatch 1(4) [ ]* [ ]* [ ]*
Hatch 2(4) [ ]* [ ]* [ ]*
Rocky Mountain [ ]* [ ]* [ ]*
- Unit 1 [ ]* [ ]* [ ]*
- Unit 2 [ ]* [ ]* [ ]*
- Unit 3 [ ]* [ ]* [ ]*
Scherer 1 [ ]* [ ]* [ ]*
Scherer 2 [ ]* [ ]* [ ]*
Tallassee 1& 2 [ ]* [ ]* [ ]*
Vogtle 1(4) [ ]* [ ]* [ ]*
Vogtle 2(4) [ ]* [ ]* [ ]*
Wansley 1 [ ]* [ ]* [ ]*
Wansley 2 [ ]* [ ]* [ ]*
Wansley CT [ ]* [ ]* [ ]*
Hartwell [ ]* [ ]* [ ]*
- ---------------------
* Nuclear planned outages exclude ramp down period prior to full
expected planned outages above.
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 3.5.3(iii)
FORECAST ENERGY COST OF EACH OPC RESOURCE
($/MWH)
TYPE OF RESOURCE OPC RESOURCE FORECAST ENERGY COST
Sept. Oct. Nov. Dec.
Purchased Power GPC Block 1(5) [ ]* [ ]* [ ]* [ ]*
GPC Block 2(5) [ ]* [ ]* [ ]* [ ]*
GPC Block 3(5) [ ]* [ ]* [ ]* [ ]*
GPC Block 4(5) [ ]* [ ]* [ ]* [ ]*
GPC Block 5(5) [ ]* [ ]* [ ]* [ ]*
GPC Block 6(5) [ ]* [ ]* [ ]* [ ]*
Big Rivers(6) [ ]* [ ]* [ ]* [ ]*
Big Rivers(7) [ ]* [ ]* [ ]* [ ]*
QF [ ]* [ ]* [ ]* [ ]*
- ---------------------
*The Forecast Energy Costs for the Georgia Power Company
block purchases are comprised of fuel and variable O&M,
as calculated pursuant to the BPSA.
*Historical rate plus [ ]* per MWh for transmission
on TVA [ ]* TVA losses. Rate is comprised of
fuel, variable O&M and emission costs. Price is based
on blended on-peak and off-peak price.
*Includes transmission costs plus [ ]* energy losses.
Reflects average of prices from TVA/Georgia
ITS interface and the APC/Georgia ITS interface.
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 3.5.3(iii) (CONTINUED)
Sept. Oct. Nov. Dec.
Generating Units(8) Hatch 1 [ ]* [ ]* [ ]* [ ]*
Hatch 2 [ ]* [ ]* [ ]* [ ]*
Scherer 1 [ ]* [ ]* [ ]* [ ]*
Scherer 2 [ ]* [ ]* [ ]* [ ]*
Vogtle 1 [ ]* [ ]* [ ]* [ ]*
Vogtle 2 [ ]* [ ]* [ ]* [ ]*
Wansley 1 [ ]* [ ]* [ ]* [ ]*
Wansley 2 [ ]* [ ]* [ ]* [ ]*
Wansley CT [ ]* [ ]* [ ]* [ ]*
Hartwell 1 & 2 [ ]* [ ]* [ ]* [ ]*
Rocky Mountain [ ]* [ ]* [ ]* [ ]*
1, 2 & 3
- ---------------------
(8) Fuel prices only - does not include variable O&M or emission allowances.
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 4.2
1. D/LD will provide energy required (exclusive of energy provided by SEPA) up
to the maximum quantities indicated below at the following Contract Price:
MONTH MAXIMUM QUANTITY CONTRACT PRICE
September 1996 [ ]* [ ]*
October 1996 [ ]* [ ]*
November 1996 [ ]* [ ]*
December 1996 [ ]* [ ]*
2. D/LD will provide energy required in excess of the maximum quantities
indicated in (1) above at the following Contract Price:
MONTH CONTRACT PRICE
September 1996 [ ]*
October 1996 [ ]*
November 1996 [ ]*
December 1996 [ ]*
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 4.3.1
[ ]*
- ---------------------
* Indicates information that has been filed separately with the
Secretary of the Commission as an attachment to a request for confidentiality
with respect to the omitted information.
<PAGE>
EXHIBIT 4.3.4
ROCKY MOUNTAIN
MEGAWATT HOUR STORAGE TABLE
<TABLE>
<CAPTION>
Upper
Lower Reservoir Estimated Estimated
Upper Reservoir Volume MW hrs MW hrs Accumulated Estimated MW hrs MW hrs per
Reservoir Level Ft. change in in storage change Generation MW hrs Pumping Acre ft
Level Ft. (optimum) Acre Ft. Generating Generating Tool Pumping to fill pool
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1392 690.5 5992.0 7652.3
1391 691.0 218 5861.4 130.5 130.6 7485.5 166.8 0.599 Generating
1390 691.6 216 5732.0 129.4 260.0 7320.3 332.0 0.765 Pumping
1389 692.0 216 5602.6 129.4 389.4 7155.0 497.3
1388 692.6 216 5473.2 129.4 518.8 6989.8 662.5
1387 693.1 215 5344.5 128.8 647.5 6825.3 827.0 Conversion Factors
1386 693.6 214 5216.3 128.2 775.7 6661.6 990.7 43,560 cu. ft.
= 1 acre ft.
1385 694.1 214 5088.1 128.2 903.9 6497.9 1154.4
1384 694.6 213 4960.5 127.6 1031.5 6335.0 1317.3 CFS - flow =
zone ft. per
hr.
1383 695.1 212 4833.5 127.0 1158.5 6172.8 1479.5
1382 695.6 212 4706.5 127.0 1285.5 6010.6 1641.7 4000 330.6
1381 696.0 212 4579.5 127.0 1412.5 5848.4 1803.9 4100 338.8
1380 696.5 210 4453.7 125.8 1538.3 5687.8 1964.5 4200 347.1
1379 697.0 210 4327.9 125.8 1664.1 5527.1 2125.2 4300 355.4
1378 697.4 210 4202.1 125.9 1789.9 5366.5 2285.8 4400 363.6
1377 697.9 209 4076.9 125.2 1915.1 5206.6 2445.7 4500 371.9
1376 698.3 208 3952.3 124.6 2039.7 5047.5 2604.8 4600 380.2
1375 698.8 208 3827.7 124.6 2164.3 4888.4 2763.9 4700 388.4
1374 699.2 208 3703.1 124.6 2288.9 4729.2 2923.1 4800 396.7
1373 699.6 206 3579.7 123.4 2412.3 4571.6 3080.7 4900 405.0
1372 700.1 206 3456.3 123.4 2535.7 4414.1 3238.2 5000 413.2
1371 700.5 206 3332.9 123.4 2659.1 4256.5 3385.8 5100 421.5
1370 700.9 205 3210.1 122.8 2781.9 4099.6 3552.7 5200 429.8
1369 701.4 204 3087.9 122.2 2904.1 3943.6 3708.7 5300 438.0
1368 701.8 204 2965.7 122.2 3026.3 3787.5 3864.8 5400 446.3
1367 702.2 204 2843.5 122.2 3148.5 3631.5 4020.8 5500 454.5
1366 702.5 202 2722.5 121.0 3269.5 3478.9 4175.4 5600 462.8
1365 703.0 202 2501.5 121.0 3390.5 3322.4 4329.9 5700 471.1
1364 703.4 202 2480.5 121.0 3511.5 3167.9 4484.4 5800 479.3
1363 703.8 201 2360.1 120.4 3631.9 3014.1 4638.2 5900 487.6
1362 704.1 200 2240.3 119.8 3751.7 2861.1 4791.2 6000 496.9
1361 704.5 200 2120.5 119.8 3871.5 2708.1 4944.2 6100 504.1
1360 704.9 200 2000.7 119.8 3991.3 2555.1 5097.2 6200 512.4
1359 705.2 184 1890.5 110.2 4101.5 2414.3 5238.0 6300 520.7
1358 705.6 184 1780.3 110.2 4211.7 2273.6 5378.7 6400 528.9
1357 705.9 183 1670.7 109.8 4321.3 2133.6 5518.7 6500 537.2
1356 706.3 182 1561.6 109.0 4430.4 1994.4 5657.9
1355 706.6 182 1452.6 109.0 4539.4 1855.1 5797.2
1354 706.9 180 1344.8 107.8 4647.2 1717.4 5934.9
1353 707.3 180 1237.0 107.8 4755.0 1579.7 6072.6
1352 707.6 180 1129.2 107.8 4862.8 1442.0 6210.3
1351 707.9 178 1022.5 106.6 4969.5 1305.9 6346.4
1350 708.2 178 915.9 106.6 5076.1 1169.7 6482.6
1349 708.5 177 809.9 106.0 5182.1 1034.3 6818.0
1348 708.8 176 704.4 105.4 5287.6 899.6 6752.7
1347 709.1 176 599.0 105.4 5393.0 765.0 6887.3
1346 709.4 174 494.8 104.2 5497.2 631.9 7020.4
1345 709.8 174 390.6 104.2 5601.4 498.8 7153.5
1344 710.0 164 292.3 98.2 5699.7 373.3 7279.0
1343 710.3 164 194.1 98.2 5797.9 247.9 7404.4
1342 710.6 162 97.0 97.0 5895.0 123.9 7526.4
1341 710.9 162 0.0 97.0 5992.0 7652.3
.51 20.4 10003 5992.0
</TABLE>
<PAGE>
EXHIBIT 13.2
NOTICES AND PAYMENT
ENRON POWER MARKETING, INC.:
NOTICES AND CORRESPONDENCE PAYMENTS
Duke/Louis Dreyfus L.L.C. Duke/Louis Dreyfus L.L.C.
10 Westport Road Chase Manhattan
Wilton, CT 06897 Acct. No. 9102740744
Attn: Vice President Operations ABA No. 021000021
Facsimile No. (203) 761-8378
Telephone No. (203) 761-8258
INVOICES
Duke/Louis Dreyfus L.L.C.
10 Westport Road
Wilton, CT 06897
Attn: Helen Lovely
OGLETHORPE POWER CORPORATION:
NOTICES AND CORRESPONDENCE PAYMENTS
2100 East Exchange Place SunTrust Bank, Atlanta
P.O. Box 1349 ABA Routing No. 061-0001-04
Tucker, Georgia 30085-1349 Oglethorpe Power Corporation
Attn: Manager, System Control Account No. 670108800599634
FAX# (404) 270-7663 Confirmation: Oglethorpe Power
Corporation
Samatha Cofield
(770) 270-7191
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OGLETHORPE
POWER CORPORATION'S CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1996 AND RELATED
STATEMENTS OF REVENUES AND EXPENSES AND CASH FLOWS FOR THE PERIOD ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<BOOK-VALUE> PER-BOOK<F1>
<TOTAL-NET-UTILITY-PLANT> 4,401,321
<OTHER-PROPERTY-AND-INVEST> 146,334
<TOTAL-CURRENT-ASSETS> 400,906
<TOTAL-DEFERRED-CHARGES> 358,760
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,307,321
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 361,273
<TOTAL-COMMON-STOCKHOLDERS-EQ> 0
0
0
<LONG-TERM-DEBT-NET> 4,122,458
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 105,088
0
<CAPITAL-LEASE-OBLIGATIONS> 294,381
<LEASES-CURRENT> 4,457
<OTHER-ITEMS-CAPITAL-AND-LIAB> 419,664
<TOT-CAPITALIZATION-AND-LIAB> 5,307,321
<GROSS-OPERATING-REVENUE> 832,565
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 611,474
<TOTAL-OPERATING-EXPENSES> 611,474
<OPERATING-INCOME-LOSS> 221,091
<OTHER-INCOME-NET> 49,500
<INCOME-BEFORE-INTEREST-EXPEN> 270,591
<TOTAL-INTEREST-EXPENSE> 244,363
<NET-INCOME> 26,228
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 53,595
<CASH-FLOW-OPERATIONS> 52,919
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>$361,273 REPRESENTS TOTAL RETAINED PATRONAGE CAPITAL. THE REGISTRANT IS A
MEMBERSHIP CORPORATION AND HAS NO AUTHORIZED OR OUTSTANDING EQUITY SECURITIES.
</FN>
</TABLE>
