<PAGE>
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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 March 31, 1997
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 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.
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<PAGE>
OGLETHORPE POWER CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1997
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of March 31, 1997 (Unaudited)
and December 31, 1996 3
Condensed Statements of Revenues and Expenses (Unaudited)
for the Three Months Ended March 31, 1997 and 1996 5
Condensed Statements of Cash Flows (Unaudited)
for the Three Months Ended March 31, 1997 and 1996 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 14
SIGNATURES 15
2
<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
Oglethorpe Power Corporation
Condensed Balance Sheets
March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
(dollars in thousands)
1997 1996
ASSETS (Unaudited)
------------------------------------------
<S> <C> <C>
Electric plant, at original cost:
In service $4,921,498 $5,742,597
Less: Accumulated provision for depreciation (1,333,820) (1,488,272)
------------- --------------
3,587,678 4,254,325
Nuclear fuel, at amortized cost 81,883 86,722
Plant acquisition adjustments, at amortized cost -- 4,153
Construction work in progress 9,494 31,181
------------- --------------
3,679,055 4,376,381
------------- --------------
Investments and funds:
Bond, reserve and construction funds, at market 31,663 53,955
Decommissioning fund, at market 86,654 86,269
Investment in associated organizations, at cost 15,430 15,379
Deposit on Rocky Mountain transactions, at cost 58,466 41,685
Other 4,168 --
------------- --------------
196,381 197,288
------------- --------------
Current assets:
Cash and temporary cash investments, at cost 52,401 132,783
Other short-term investments, at market 92,816 91,499
Receivables 99,198 113,289
Inventories, at average cost 85,547 89,825
Prepayments and other current assets 16,676 14,625
------------- --------------
346,638 442,021
------------- --------------
Deferred charges:
Premium and loss on reacquired debt, being amortized 193,700 201,007
Deferred amortization of Scherer leasehold 92,089 90,717
Deferred debt expense, being amortized 9,511 21,703
Other 33,142 33,058
------------- --------------
328,442 346,485
------------- --------------
$4,550,516 $ 5,362,175
------------- --------------
</TABLE>
The accompanying notes are an integral part of these condensed statements.
3
<PAGE>
Oglethorpe Power Corporation
Condensed Balance Sheets
March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
(dollars in thousands)
1997 1996
EQUITIES AND LIABILITIES (Unaudited)
---------------------------
<S> <C> <C>
Capitalization:
Patronage capital and membership fees (including unrealized loss of
($1,791) at March 31, 1997 and $(844) at December 31, 1996 on
available-for-sale securities) $315,855 $356,229
Long-term debt 3,314,890 4,052,470
Obligations under capital leases 292,397 293,682
Obligation under Rocky Mountain transactions 58,466 41,685
------------ -------------
3,981,608 4,744,066
------------ -------------
Current liabilities:
Long-term debt and capital leases due within one year 88,875 159,622
Accounts payable 40,308 42,891
Accrued interest 14,243 15,931
Accrued and withheld taxes 8,982 4,940
Other current liabilities 9,442 14,022
------------ -------------
161,850 237,406
------------ -------------
Deferred credits and other liabilities:
Gain on sale of plant, being amortized 62,699 58,527
Net benefit of sale of income tax benefits, being amortized 40,046 42,049
Net benefit of Rocky Mountain transactions, being amortized 94,764 70,701
Accumulated deferred income taxes 60,623 61,985
Decommissioning reserve 125,298 124,468
Other 23,628 22,973
------------ -------------
407,058 380,703
------------ -------------
$ 4,550,516 $ 5,362,175
------------ -------------
------------ -------------
</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 Month ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
(dollars in thousands)
1997 1996
------------------------------
<S> <C> <C>
Operating revenues:
Sales to Members $ 257,031 $ 243,952
Sales to non-Members 14,454 24,231
----------- -------------
Total operating revenues 271,485 268,183
----------- -------------
Operating expenses:
Fuel 44,889 48,240
Production 35,595 30,369
Purchased power 57,991 64,064
Power delivery 3,878 3,658
Depreciation and amortization 36,239 36,526
Taxes other than income taxes 7,620 7,384
Other operating expenses 7,455 4,374
----------- -------------
Total operating expenses 193,667 194,615
----------- -------------
Operating margin 77,818 73,568
----------- -------------
Other income (expense):
Interest income 7,434 4,060
Amortization of net benefit of sale of income tax benefits 2,798 2,008
Amortization of deferred margins -- 10,188
Allowance for equity funds used during construction 84 47
Other 1,507 634
----------- -------------
Total other income 11,823 16,937
----------- -------------
Interest charges:
Interest on long-term debt and other obligations 80,557 82,031
Allowance for debt funds used during construction (352) (514)
----------- -------------
Net interest charges 80,205 81,517
----------- -------------
Net margin $ 9,436 $ 8,988
----------- -------------
----------- -------------
</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 Three Months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
(dollars in thousands)
1997 1996
------------------------
<S> <C> <C>
Cash flows from operating activities:
Net margin $ 9,436 $ 8,988
----------- -----------
Adjustments to reconcile net margin to net cash provided
by operating activities:
Depreciation and amortization 56,911 39,425
Net benefit of Rocky Mountain transactions 24,859 --
Deferred gain from Corporate Restructuring 4,757 --
Allowance for equity funds used during construction (84) (47)
Amortization of deferred margins -- (10,188)
Amortization of net benefit of sale of income tax benefits (2,798) (2,008)
Other 280 1,149
Change in net current assets, excluding
long-term debt due within one year and
deferred margins to be refunded within one year:
Receivables 14,092 (1,368)
Inventories (1,530) (3,137)
Prepayments and other current assets (2,413) (3,000)
Accounts payable (1,930) (9,096)
Accrued interest (1,568) 6,380
Accrued and withheld taxes 4,042 (18,663)
Other current liabilities (3,356) (5,232)
----------- -----------
Total adjustments 91,262 (5,785)
----------- -----------
Net cash provided by operating activities 100,698 3,203
----------- -----------
Cash flows from investing activities:
Property additions (24,962) (24,824)
Net proceeds from bond, reserve and construction funds 21,793 2,397
Decrease (increase) in investment in associated organizations (51) 351
Increase in other short-term investments (1,766) (10,000)
Decrease (increase) in decommissioning fund (2,423) 729
Net assets sold in Corporate Restructuring 716,365 --
Net liabilities extinguished in Corporate Restructuring (696,190) --
Other (4,168) --
----------- -----------
Net cash provided by (used in) investing activities 8,598 (31,347)
----------- -----------
Cash flows from financing activities:
Debt proceeds, net 101,149 --
Debt payments, net (239,805) (25,366)
Retirement of patronage capital (48,863) --
Other (2,159) 505
----------- -----------
Net cash used in financing activities (189,678) (24,861)
----------- -----------
Net decrease in cash and temporary cash investments (80,382) (53,005)
Cash and temporary cash investments at beginning of period 132,783 201,151
----------- -----------
Cash and temporary cash investments at end of period $ 52,401 $ 148,146
----------- -----------
----------- -----------
Cash paid for:
Interest (net of amounts capitalized) $ 76,871 $ 96,769
Income taxes 3,525 --
</TABLE>
The accompanying notes are an integral part of these condensed statements.
6
<PAGE>
Oglethorpe Power Corporation
Notes to Condensed Financial Statements
March 31, 1997 and 1996
(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 March 31, 1997 and 1996. 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. Certain amounts for 1996 have
been reclassified to conform with the current period presentation.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
CORPORATE RESTRUCTURING
As reported in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, Oglethorpe and the Members completed a corporate
restructuring (the Corporate Restructuring) on March 11, 1997. Pursuant to
the Corporate Restructuring, Oglethorpe divided itself into three specialized
operating companies to respond to increasing competition and regulatory
changes in the electric industry. As part of the Corporate Restructuring, the
transmission business is now owned and operated by a newly formed Georgia
electric membership corporation, Georgia Transmission Corporation (An
Electric Membership Corporation) (GTC), and the system operations business is
now owned and operated by a newly formed Georgia nonprofit corporation,
Georgia System Operations Corporation (GSOC). Oglethorpe continues to operate
the power supply business. Oglethorpe retained all of its owned and leased
generation assets. Oglethorpe also continues to administer its power purchase
contracts and provide marketing support functions to the Members.
POWER SUPPLY SWAP ARRANGEMENTS
Oglethorpe has entered into a power marketer agreement with Morgan Stanley
Capital Group Inc. (Morgan Stanley) to cover 50% of the Members' load
requirements. The agreement was effective May 1, 1997. The agreement
obligates Oglethorpe to purchase fixed quantities of energy at fixed prices,
initially averaging 50% of the Members' forecasted requirements. Each Member
selected a term for its obligation, as well as the portion of its forecasted
requirements to be purchased as a fixed quantity. Oglethorpe is obligated to
sell and Morgan Stanley is obligated to buy 50% of the output of each
Member's percentage capacity responsibility (PCR) share (for the term and
portion selected) of the "must run" units (primarily nuclear units).
Oglethorpe is also obligated to make available the same share of all other
resources, which Morgan Stanley may schedule for each 24-hour day. This
schedule is set the day prior based on availability limitations in the
contract. After the schedule is set, Oglethorpe must make available the
scheduled energy without regard to the actual availability of the units.
Morgan Stanley does not have the right to the output of upgrades to these
resources. Morgan Stanley must pay a contractually fixed amount each month
and an amount for the scheduled energy based on contractually fixed prices.
The agreement has an initial term extending to March 31, 2000. Upon the
approval of the Rural Utilities Service (RUS), which is pending, the
agreement will be extended to March 31, 2005, with the purchase for certain
Members declining to zero prior to that date. Initially, Oglethorpe will
manage the system through purchases and/or sales to balance the fixed
purchase obligation against the actual requirements.
SEPARATE DISPATCH OF PLANT WANSLEY
As discussed in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, the Plant Wansley ownership and operating agreements were
amended in 1996 to allow each co-owner to dispatch separately its respective
ownership interest. Pursuant to the amendments, Oglethorpe
8
<PAGE>
began separately dispatching Wansley Units No. 1 and No. 2 on May 1, 1997.
Oglethorpe continues to use Georgia Power Company (GPC) as its agent for fuel
procurement.
RESULTS OF OPERATIONS
CORPORATE RESTRUCTURING
Oglethorpe and the Members completed the Corporate Restructuring on March 11,
1997. As of that date, Oglethorpe transferred its transmission business and
assets to a separate entity, GTC, and reflected the transfer of its system
operations assets to a separate entity, GSOC. However, the Boards of
Directors of Oglethorpe, GTC and GSOC determined that for ratemaking purposes
all revenues and expenses related to operations of GTC and GSOC would remain
with Oglethorpe until April 1, 1997. Pursuant to this approach, all
transmission-related and systems operations-related revenues were assigned to
Oglethorpe, and all transmission-related and systems operations-related costs
were paid or reimbursed by Oglethorpe during the period March 11, 1997
through March 31, 1997. As a result, the Condensed Statements of Revenues and
Expenses for the three months ended March 31, 1997 includes fully the
revenues and expenses of the undivided, pre-restructuring Oglethorpe. See
Oglethorpe's Annual Report on Form 10-K for the fiscal year ended December
31, 1996 for a pro-forma presentation of the Statement of Revenues and
Expenses of the post-restructuring Oglethorpe for the year ended December 31,
1996 (Note 11 of Notes to Financial Statements).
For the Three Months Ended March 31, 1997 and 1996
Oglethorpe's net margin for the three months ended March 31, 1997 was $9.4
million compared to $9.0 million for the same period of 1996.
OPERATING REVENUES
Member revenues for the three months ended March 31, 1997 were 5.4% higher
compared to the same period of 1996. While capacity revenues were slightly
lower in the three months ended March 31, 1997 compared to 1996, energy
revenues from sales to Members for the three months of 1997 were 20.0% higher
than same period of the prior year. Megawatt-hour (MWh) sales to the Members
were virtually unchanged for the current quarter versus the same period of
1996. However, Oglethorpe's average energy revenue per MWh from sales to
Members was 20.8% higher in 1997 compared to 1996 primarily due to the
passthrough of significant savings derived from the transaction with Enron
Power Marketing Inc. (EPMI) in the first quarter of 1996. During the first
eight months of 1996, Oglethorpe had a power supply arrangement with EPMI to
supply 100% of the load requirements of the Members. As reported in its
Annual Report on Form 10-K for the fiscal year ended December 31, 1996,
effective January 1, 1997, Oglethorpe entered into a power supply arrangement
with LG&E Power Marketing Inc. (LPM) for 50% of the load requirements of the
Members.
Sales to non-Members were primarily made pursuant to two 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 ended March 31, 1997 and 1996:
9
<PAGE>
THREE MONTHS
ENDED MARCH 31,
-------------------
1997 1996
--------- ---------
(DOLLARS IN THOUSANDS)
GPC- Power supply arrangements...................... $ 7,802 $ 4,717
Sales to other utilities............................ 4,040 12,282
ITS transmission agreements......................... 2,180 3,372
Sales to power marketers............................ 432 3,860
------- -------
Total............................................... $14,454 $24,231
------- -------
------- -------
For the three months ended March 31, 1997, the largest source of non-Member
revenues was 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 to GPC were higher in 1997 compared to the same
period of 1996. As noted above under "General", with the commencement of the
separate dispatch of Plant Wansley as of May 1, 1997, this type of sales to
GPC will cease.
Another source of non-Member revenues was payments received 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 period of 1997 compared to 1996 was the result of
relatively greater usage by Oglethorpe compared to its relative investment.
As a result of the Corporate Restructuring, all of the revenues in this
category will accrue to GTC effective April 1, 1997.
Under the current LPM power supply arrangement, and previously, under the
EPMI power supply arrangement, sales to the power marketers represented the
net energy transmitted on behalf of LPM and EPMI off-system on a daily basis
from Oglethorpe's total resources. Such energy was sold to LPM and EPMI at
Oglethorpe's cost, subject to certain limitations. The volume of sales to
power marketers depends primarily on the power marketers' decisions for
servicing their load requirements.
Sales to other non-Member utilities in 1997 represent sales made directly by
Oglethorpe only from the 50% of the power supply resources not sold to LPM.
LPM now administers all third-party transactions directly with such parties
for its 50% portion of the resources. Such sales in the first three months of
1996 were initiated by EPMI while Oglethorpe maintained the contractual
relationship with these other utilities and reflected the sales transactions
in its revenues.
10
<PAGE>
OPERATING EXPENSES
Operating expenses decreased slightly for the three months ended March 31,
1997 compared to the same period of 1996. The decrease was attributable to
decreases in fuel and purchased power costs, offset by higher production
operations and maintenance (O&M) costs. Fuel costs decreased 6.9% in 1997
compared to 1996 even though total generation decreased only 2.1%. Such
savings resulted from the difference in the mix of generation, with more
nuclear and less fossil generation. The decrease in fossil generation
resulted primarily from a maintenance outage during February and March 1997
at Plant Scherer Unit No. 1. The higher nuclear generation during the first
quarter of 1997 compared to 1996 was achieved as a result of having two
refueling outages in the first quarter 1996 compared to none in 1997.
Conversely, the increase in production O&M costs was primarily attributable
to the maintenance outage at Plant Scherer Unit No. 1. Effective January 1,
1996, the costs of nuclear refueling outages are deferred and amortized over
the 18-month period following the outage.
The 9.5% decrease in purchased power costs in the first three months of 1997
compared to the same period of 1996 resulted from the savings in capacity
costs under the Block Power Sale Agreement (BPSA) with GPC. Effective
September 1, 1996, Oglethorpe reduced its purchase commitment by a 250 MW
Component Block. Purchased power energy costs were virtually unchanged. A
total of 22.2% fewer MWhs were purchased power in the first three months of
1997 compared to the same period of 1996; however, the average purchased
power cost per MWh was significantly higher. As discussed under "Operating
Revenues" above, significant energy cost savings were realized in the first
three months of 1996 from the EPMI power supply arrangement; such average
purchased power cost per MWh was 16.4% higher in the first three months of
1997 compared to the same period of 1996.
The increase in other operating expenses for the three months ended March 31,
1997 was due to costs of the Corporate Restructuring.
OTHER INCOME
Other income for the three months ended March 31, 1997 decreased compared to
the same period of 1996 primarily as a result of Oglethorpe utilizing, as
planned, all remaining amounts available under its deferred margin rate
mechanism during 1996. (For a discussion of deferred margins, see Note 1 of
Notes to Financial Statements in Oglethorpe's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.) Interest income was higher in the
first three months of 1997 compared to the same period of 1996 partly due to
higher average investment balances and partly due to higher interest rates.
FINANCIAL CONDITION
CORPORATE RESTRUCTURING
As of March 11, 1997, Oglethorpe transferred its transmission business and
assets to GTC. Thereafter, the assets, liabilities and equity of GTC are no
longer a part of Oglethorpe. The purchase price for the transmission business
was based on an appraisal of the fair market value of such business, as
determined by an independent appraiser, and was approximately $708 million.
11
<PAGE>
The purchase price was paid primarily by GTC's assumption of a portion
(approximately 16.86%) of Oglethorpe's long-term secured debt in an amount
equal to approximately $686 million. Approximately $541 million of this debt
(payable to RUS, Federal Financing Bank (FFB) and CoBank, ABC (CoBank))
became the sole obligation of GTC, and Oglethorpe was released from all
liability with regard to this indebtedness. The remaining debt assumed by GTC
in connection with the Corporate Restructuring, approximately $145 million,
relates to Oglethorpe's pollution control revenue bonds (PCBs). While GTC
assumed and agreed to pay this $145 million of debt, Oglethorpe is not
legally released from its liability for this debt. The remainder of the
purchase price was paid by GTC from cash obtained through a borrowing from
National Rural Utilities Cooperative Finance Corporation (CFC) and the
assumption of approximately $1 million of other Oglethorpe liabilities.
Oglethorpe also made a special patronage capital distribution of
approximately $49 million to the Members which was used by the Members to
establish equity in and to provide initial working capital to GTC.
On October 1, 1996, Oglethorpe transferred to GSOC its system operations
assets, consisting of its system control center and related energy control
and revenue metering systems equipment. 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 note held by the Rural Utilities
Service (RUS), by delivery of a purchase money note payable to Oglethorpe and
by the assumption of certain other liabilities of Oglethorpe. From October 1,
1996 to March 11, 1997, Oglethorpe was the sole member of GSOC; therefore,
the assets transferred to GSOC remained in the consolidated balance sheet of
Oglethorpe. The Members and GTC became members of GSOC on March 11, 1997; and
thereafter the assets, liabilities and equity of GSOC are no longer a part of
Oglethorpe.
Most of the remaining comparisons of the balance sheets as of March 31, 1997
and December 31, 1996 exclude the effects of the Corporate Restructuring
described above. See Oglethorpe's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 for a pro-forma presentation of the Balance
Sheet of the post-restructuring Oglethorpe as of December 31, 1996 (Note 11
of Notes to Financial Statements).
Total assets and total equity plus liabilities as of March 31, 1997 were $4.6
billion which was $127 million less than the comparable total at December 31,
1996 due to depreciation of plant and due to the decrease in cash and
temporary cash investments.
ASSETS
Property additions for the three months ended March 31, 1997 totaled $25.0
million and included additions, replacements and improvements to transmission
and distribution facilities (subsequently sold to GTC) and existing
generation facilities.
All plant acquisition adjustments were related to transmission plant. As a
result of the Corporate Restructuring discussed above, Oglethorpe no longer
has any plant acquisition adjustments.
The decrease in construction work in progress resulted from the projects sold
to GTC and GSOC in the Corporate Restructuring.
12
<PAGE>
The increase in the deposit on, the obligation under and net benefit of Rocky
Mountain transactions resulted from the completion of the lease transactions
for the remainder of Oglethorpe's interest in Rocky Mountain in January 1997.
For a discussion of the Rocky Mountain transactions, see Notes 1 and 2 of
Notes to Financial Statements in Oglethorpe's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.
The decrease in the bond, reserve and construction funds was attributable to
the utilization of a portion of the debt service reserve funds for debt
service payments. The available funds resulted from Pollution Control Revenue
Bond (PCB) refinancing projects in March 1997 for which the refunded PCBs did
not require debt service reserve funds.
The decrease in cash and temporary cash investments was partly due to the
payment of the $48.9 million special patronage capital distribution made in
connection with the Corporate Restructuring discussed above and partly due to
a prepayment of Federal Financing Bank (FFB) debt made from the proceeds of
the Rocky Mountain transactions.
The change in premium and loss on reacquired debt resulted partly from
premiums paid in connection with FFB debt prepayment and the PCB refunding,
excluding the effect of the portion of these costs assumed by GTC in the
Corporate Restructuring.
The decrease in deferred debt expense resulted partly from unamortized
issuance cost related to the PCB refunding being converted to premium and
loss on reacquired debt and partly from the portion of these costs assumed by
GTC in the Corporate Restructuring transaction.
EQUITY AND LIABILITIES
The decrease in patronage capital and membership fees is the result of the
$48.9 million special patronage capital distribution made in connection with
the Corporate Restructuring, discussed above.
The decrease in long-term debt due within one year resulted primarily from
the prepayment of FFB debt, discussed above. In addition, the balance
reflects the impact of the Corporate Restructuring transaction.
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 1997) and partly due to
the Corporate Restructuring transaction.
13
<PAGE>
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
NUMBER DESCRIPTION
- -------------- -----------
*10.34 Power Purchase and Sale Agreement between
Morgan Stanley Capital Group Inc. and Oglethorpe,
dated as of April 7, 1997.
27.1 Financial Data Schedule (for SEC use only).
------------------------
* 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 March
31, 1997.
14
<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 Corporation)
Date: May 14, 1997 By: /s/ T. D. Kilgore
--------------------------------------------
T. D. Kilgore
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 14, 1997 /s/ Mac F. Oglesby
---------------------------------------------
Mac F. Oglesby
Treasurer and Director
(Principal Financial Officer)
Date: May 14, 1997 /s/ Robert D. Steele
---------------------------------------------
Robert D. Steele
Controller
(Principal Accounting Officer)
15
<PAGE>
EXHIBIT 10.34
POWER PURCHASE AND SALE AGREEMENT
BETWEEN
MORGAN STANLEY CAPITAL GROUP INC.
AND
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION)
Dated as of April 7, 1997
ACKNOWLEDGMENT REGARDING CONFIDENTIAL INFORMATION:
Oglethorpe Power Corporation (An Electric Membership Corporation) (the
"Company") acknowledges that certain confidential information is contained
throughout the 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
March 31, 1997, 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 filed separately with the Secretary of the
Commission as an attachment to a request for confidentiality with respect to
the omitted information.
<PAGE>
Article 1
Definitions
..........................................................................2
1.1 Definitions..........................................................2
1.2 Construction.........................................................3
Article 2
Purchases and Sales
..........................................................................3
2.1 Supply by MS.........................................................3
2.2 Firm Option of MS; Sales by OPC......................................5
2.2.1 Must Run Contract Resources................................5
2.2.2 Dispatchable Contract Resources............................5
2.3 Contract Resource Nominations; Scheduling............................5
2.4 Effect of Contract Resource Unavailability...........................7
2.5 Customer Choice Load.................................................7
2.6 Failure to Deliver or Receive........................................8
2.7 Special Early Termination Right......................................9
2.8 Stranded Costs......................................................10
Article 3
Contract Resources
.........................................................................11
3.1 Contract Resources..................................................11
3.2 OPC Contracts.......................................................11
3.3 Dispersed Generation................................................12
3.4 Load Management.....................................................12
3.5 Hartwell Fuel.......................................................12
3.6 Coal................................................................13
3.7 Block Power Sale Agreements.........................................13
3.8 New Contract Resources..............................................13
3.9 Emission Allowances.................................................13
3.10 SEPA Energy Allocation Schedule.....................................13
3.11 Intraday Trading Management.........................................14
Article 4
Transmission
.........................................................................15
4.1 Transmission and Scheduling.........................................15
4.2 Title and Risk of Loss..............................................17
4.3 Scheduling..........................................................17
4.4 Delivery Points.....................................................17
4.5 Transformer and Transmission Loss Adjustments.......................18
4.6 Other Transmission Related Uses.....................................19
4.7 Control Area........................................................19
i
<PAGE>
4.8 Risk of Intraday Transmission Constraint............................19
4.9 Other OPC Responsibilities..........................................20
4.10 Other Obligations of MS.............................................21
4.11 Adjustment to MS's Allocated Interface Capability...................21
Article 5
Price
.........................................................................22
5.1 OPC's Contract Price................................................22
5.2 MS's Contract Price.................................................22
5.3 Amounts Due to OPC and MS...........................................22
5.4 Netting of Payment Obligations......................................22
Article 6
Term
.........................................................................23
6.1 Start-up Term.......................................................23
6.2 Initial Term........................................................23
6.3 Long Term Extension.................................................23
6.4 EMC Customer Term Selections........................................23
Article 7
Confidential Information
.........................................................................24
7.1 Prior Confidentiality Agreement Superseded; Authorization to Use
Information
.........................................................................24
7.2 Authorized Disclosure...............................................24
7.3 Return of Confidential Information..................................24
7.4 Right to Remedies...................................................25
7.5 Georgia Trade Secrets Act...........................................25
Article 8
Billing, Payment and Records
.........................................................................25
8.1 Billing Statements..................................................25
8.2 Offset of Payment Obligations.......................................25
8.3 Payments............................................................25
8.4 Audit Rights........................................................26
8.5 Subsequent Payment Adjustments......................................26
8.6 Records.............................................................26
Article 9
Taxes
.........................................................................27
9.1 Seller's Obligation.................................................27
9.2 Buyer's Obligation..................................................27
9.3 Exemption Certificates..............................................27
ii
<PAGE>
Article 10
Indemnification and Remedies
.........................................................................27
10.1 General Indemnity...................................................27
10.2 Limitation on Remedies..............................................27
10.3 Duty to Mitigate....................................................28
10.4 DISCLAIMER..........................................................28
Article 11
Conditions Precedent
.........................................................................28
11.1 Regulatory Authorizations...........................................28
11.2 Guaranty Agreement..................................................28
11.3 Failure of Certain Conditions Precedent.............................28
Article 12
Representations and Warranties
.........................................................................29
12.1 Mutual Representations..............................................29
12.2 Additional Representations..........................................29
12.3 Mutual Assistance...................................................30
12.4 Good Title..........................................................30
12.5 Power Quality.......................................................30
12.6 Other Contracts.....................................................30
12.7 Continuing Representations and Warranties...........................31
12.8 Certain OPC Representations.........................................31
Article 13
Defaults and Remedies
.........................................................................31
13.1 Events of Default...................................................31
13.2 Early Termination; Remedies.........................................31
13.3 Failure to Pay......................................................33
13.4 Notice..............................................................33
Article 14
Arbitration
.........................................................................33
14.1 Applicability; Selection of Arbitrators.............................33
14.2 Discovery, Hearing..................................................35
14.3 Decision............................................................35
14.4 Expenses............................................................35
iii
<PAGE>
Article 15
Force Majeure
.........................................................................35
15.1 Effect of Force Majeure.............................................35
Article 16
Material Changes.........................................................36
16.1 [ ]*..........................................................36
16.2 [ ]*..........................................................36
16.3 [ ]*..........................................................37
16.4 Effect of Certain Regulation........................................37
Article 17
Miscellaneous
.........................................................................38
17.1 Assignment..........................................................38
17.1.1 General.............................................38
17.1.2 Assignment for Security.............................38
17.2 Notices............................................................38
17.3 Applicable Law.....................................................38
17.4 Survival of Obligations............................................39
17.5 Entire Agreement...................................................39
17.6 No Partnership.....................................................39
17.7 Amendment..........................................................39
17.8 Third Parties......................................................39
17.9 Waiver.............................................................39
17.10 Character of Sales by OPC..........................................39
17.11 Severability.......................................................39
17.12 Headings...........................................................39
17.13 Counterparts.......................................................40
17.14 Non-Participating Members..........................................40
17.15 Further Assurances.................................................40
17.16 RUS Approval.......................................................40
17.17 Other..............................................................40
- ------------------------
* 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.
iv
<PAGE>
Schedule A
Exhibits
1.43 Level B-1 Diagram
1.62 EMC Customers
2.1(a) Minimum OPC Obligations and Intervals (Prior to Deduction of SEPA
Energy Allocation)
2.1(b) SEPA Allocation by EMC
2.1(c) Minimum OPC Obligations and Intervals
2.2 Dispatchable and Must Run Contract Resources
2.5(c) Cooperative Advertising
3.1 Contract Resources and Constraints
3.6 [ ]*
3.11 Intraday Settlement Example
4.1 Points of Interconnection
4.1(c) Interface Delivery Points
4.11(a) [ ]*
4.11(b) [ ]*
5.3 MS Sales Price
11.3 Form of Guaranty Agreement
16.2(a) Collateral Amounts for Relevant Assurance Request Dates
17.2 Notices
17.14 Non-Participating Members
- ------------------------
* 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.
v
<PAGE>
POWER PURCHASE AND SALE AGREEMENT
BETWEEN
MORGAN STANLEY CAPITAL GROUP INC.
AND
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION)
This Power Purchase and Sale Agreement dated as of April 7, 1997, together
with permitted amendments ("Agreement") is entered into by and between
Oglethorpe Power Corporation (An Electric Membership Corporation), a corporation
organized and existing under Title 46 of the Official Code of Georgia Annotated,
together with any permitted successor or assign ("OPC"), and Morgan Stanley
Capital Group Inc., a corporation organized and existing under the laws of
Delaware, together with any permitted successor or assign ("MS").
WITNESSETH
WHEREAS, OPC is an electric generation corporation which operates on a
cooperative basis and which supplies certain electric requirements of its member
cooperatives for electric power and energy supplied to their wholesale and
retail customers;
WHEREAS, MS is a power marketer authorized by the FERC to purchase and sell
electric energy for resale at negotiated, market-based rates;
WHEREAS, OPC's existing supply resources are demonstrably insufficient to
supply the anticipated peak electric requirements of OPC and its member
cooperatives beginning in 1998, in light of the 1996 Official Load Forecast, and
the termination of uneconomic existing power purchase resources;
WHEREAS, OPC has determined that it is not economically efficient at this
time for OPC to plan for the construction or acquisition of additional
generating facilities to supply the electric requirements of OPC and its member
cooperatives, and that the native load electric requirements of its cooperative
members can economically and efficiently be supplied through the purchase from a
power marketer(s) of such requirements for electric energy;
WHEREAS, in accordance with its strategic plan for serving its member
cooperatives, OPC has requested proposals from various power marketers, and MS
has been selected as a successful proposer to supply certain electric
requirements of OPC and its member cooperatives;
WHEREAS, MS is willing to purchase, sell and economically manage Electric
Energy from certain Contract Resources and OPC is willing to work with MS,
including to sell to and to purchase from MS, certain quantities of Electric
Energy at the prices and under the terms set forth in this Agreement;
WHEREAS, in conjunction with MS's commitment to Supply a portion of the
electric requirements of OPC and OPC's commitment to purchase such requirements,
MS desires to secure
1
<PAGE>
the firm options (i) to sell Electric Energy associated with specified Contract
Resources in full or partial satisfaction of MS's obligation to sell Electric
Energy to OPC; (ii) to sell Electric Energy to OPC from sources other than those
Contract Resources; and (iii) to purchase Electric Energy from OPC for resale to
third parties at such prices as MS shall determine;
WHEREAS, the Parties believe that their respective objectives can be
achieved through the combination of arrangements set forth in this Agreement;
WHEREAS, the Parties recognize that Non-Participating Members may enter
into purchase and sale agreements with power marketers;
WHEREAS, the Parties recognize that OPC has entered into agreements with
the Other Power Marketer to supply fifty percent of the Members' Requirements
for Electric Energy;
WHEREAS, the Parties recognize that OPC may at times in the future, subject
to the terms of this Agreement, enter into additional agreements with other
Power Marketers to supply the electric requirements of Customer Choice Load or
other load growth not served under this Agreement;
WHEREAS, OPC recently undertook a legal and functional disaggregation of
its formerly vertically integrated utility businesses which was effected in part
by the conveyance and assignment by OPC to GTC and GSOC of certain ongoing
businesses and certain non-generating plant, equipment and associated
liabilities, including transmission and control room facilities and functions
related to such businesses and an allocable portion of its indebtedness as of
the date of such conveyance and assignment;
WHEREAS, OPC has contracted with GTC and GSOC for the provision of certain
transmission, scheduling and other ancillary services necessary to operate its
generation and related businesses which formerly had been performed by OPC; and,
WHEREAS, OPC is relying on the Guaranty Agreement of Morgan Stanley Group
Inc. in entering into this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, and for other good and valuable consideration, OPC and the MS
hereby agree as follows:
Article 1
Definitions
1.1 Definitions. All capitalized terms used herein and not otherwise
defined, whether singular or plural, shall have the respective meanings set
forth in Schedule A. Defined terms in this Agreement shall include in the
singular number the plural and in the plural number the singular. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. Any reference in this Agreement to "Section,"
"Article," "Exhibit" or "Schedule" shall be references to this Agreement.
Unless the context requires otherwise, any reference in this Agreement to any
document shall mean such document and all schedules, exhibits, and attachments
thereto as amended and in effect from time to time. Unless otherwise stated,
any reference in this
2
<PAGE>
Agreement to any person shall include its permitted successors and assigns and,
in the case of any governmental authority, any person succeeding to its
functions and capacities. The words "hereof," "herein," "hereto" and
"hereunder" and words of similar import when used in this Agreement shall,
unless otherwise expressly specified, refer to this Agreement as a whole and not
to any particular provision of this Agreement. Whenever the term "including" is
used herein in connection with a listing of items included within a prior
reference, such listing shall be interpreted to be illustrative only, and shall
not be interpreted as a limitation on or exclusive listing of the items included
within the prior reference.
1.2 Construction. In the event of a conflict between the text of this
Agreement and any Exhibit or Schedule, the terms of the Agreement shall prevail.
The Parties acknowledge that each Party and its counsel have reviewed and
revised this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
Article 2
Purchases and Sales
2.1 Supply by MS. (a) Minimum OPC Obligation. Subject to the provisions
of this Agreement, MS shall sell and deliver or cause to be sold and delivered
("Supply") and OPC shall take and pay for, or pay for if Nominated, whether
taken or not, a quantity of Electric Energy [ ]* equal to the Minimum
OPC Obligation established [ ]*. [ ]* The Intervals and Minimum
OPC Obligations are set forth in Exhibit 2.1, subject to adjustment from time to
time pursuant to Section 3.10. This Agreement shall constitute the single
agreement under which MS is obligated to Supply and OPC is obligated to purchase
at wholesale Electric Energy to satisfy the Minimum OPC Obligation.
(b) Incremental OPC Purchases. If an EMC Customer's actual load in any
Interval exceeds the applicable Minimum OPC Obligation for such EMC Customer,
then OPC shall have the right to (i) purchase from MS and MS shall Supply, at
prices to be negotiated by the Parties, an Incremental Quantity of Electric
Energy to satisfy OPC's additional requirements for such Interval; or
(ii) obtain its additional energy requirements from another supplier; or (iii)
conduct an energy settlement among such EMC Customers in accordance with
Exhibit 3.11. To the extent OPC purchases Electric Energy pursuant to this
Section 2.1(b), MS shall sell and OPC shall purchase the agreed Incremental
Quantities of Electric Energy [ ]*.
(c) The Parties recognize and agree that (i) the Electric Energy
available from Contract Resources may not be deemed sufficient, economical,
or otherwise appropriate, in MS's sole judgment, to satisfy MS's obligations
to Supply the sum of the Minimum OPC Obligation and any Incremental Quantity
under this Agreement ("Aggregate OPC Load") throughout the Term; (ii) MS may
therefore desire or be required to obtain additional Electric Energy from
such other arrangements as MS shall determine to be appropriate in order to
perform hereunder; and (iii) neither of the foregoing shall entitle MS to
avoid its obligations hereunder or to adjust the MS Sales Price, except as
expressly permitted under the provisions of this Agreement; provided, that MS
shall have no
- ------------------------
* 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.
3
<PAGE>
obligation to Supply any quantity of Electric Energy in excess of the Aggregate
OPC Load. The Parties further recognize and agree that OPC and the
EMC Customers have the right and the obligation to purchase outside the terms of
this Agreement their requirements for Electric Energy in excess of the Aggregate
OPC Load.
(d) MS may satisfy its obligations on a given day to Supply Electric
Energy to serve the Aggregate OPC Load by either or both of the following means:
(i) by Nominating in accordance with Section 2.3 that OPC sell to MS and
purchase from MS at Level B-1 a specified quantity of Electric Energy from
Contract Resources designated by MS during each of the Intervals of such day
and/or (ii) by Supplying to OPC at any Delivery Point a specified quantity of
Electric Energy from sources other than Contract Resources. As between MS and
OPC, and subject to the provisions of Sections 4.6 and 4.8, each Party shall
bear any and all financial and delivery consequences associated with Electric
Energy prior to the Delivery Point where title to Electric Energy sold hereunder
transfers to the other Party and from the Delivery Point where it receives title
to Electric Energy sold hereunder.
(e) It is understood that OPC is not obligated to generate or sell
Electric Energy from the specific facilities or contracts underlying Contract
Resources Nominated by MS and that OPC or its designee(s) shall have the
authority, in its sole discretion, to manage, control, and operate its
generating and contractual assets to meet its obligations under this Agreement.
[ ]* After MS Nominates Electric Energy from specified Contract Resources
and Schedules Electric Energy for delivery from other sources for any Interval
of a given day, OPC's obligations to deliver, receive and pay for Electric
Energy shall not be affected either by OPC's failure to generate or purchase
Electric Energy from generating units or suppliers that correspond to MS's
Nominated Contract Resources or by OPC's failure to purchase and receive
Electric Energy Scheduled for delivery to it at Delivery Points. As between MS
and OPC, OPC shall bear any and all financial and delivery consequences
associated with its decisions to generate Electric Energy from specific
generating units or to purchase from specific sources without regard to the
Contract Resources Nominated by MS.
(f) On or before November 1 of each Contract Year, either OPC, acting at
the request of one or more EMC Customers, or one or more EMC Customers may
request one or more proposals from MS for prices and terms for the purchase of
additional Electric Energy from MS [ ]* or the sale to MS of the Electric
Energy available to such EMC Customer in excess of such EMC Customer's load
requirements. MS shall be obligated, [ ]*, to provide a proposal on a
case by case basis to supply or purchase such Electric Energy, as applicable, on
such price and other terms (including credit requirements) as may be acceptable
to MS. Subject to the purchase and sale obligations set forth in
Sections 2.1(a) and (b), and Section 2.2, OPC or an EMC Customer shall also have
the right to seek and accept proposals from third parties to supply or purchase
such Electric Energy. To the extent that OPC or such EMC Customer accepts MS's
proposal, then MS shall be obligated to supply or purchase such Electric Energy,
as applicable, in accordance with the terms of such proposal. Such proposals
when accepted shall be separate agreements and not sales or purchases under this
Agreement, unless otherwise agreed.
(g) [ ]*
- ------------------------
* 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.
4
<PAGE>
(h) [ ]*
(i) With respect to the [ ]* described in Exhibit 3.1 [ ]*, OPC
may request to purchase and MS shall sell Electric Energy up to the maximum
quantities and in accordance with the prices, resource characteristics and
resource constraints set forth in Exhibit 3.1.
2.2 Firm Option of MS; Sales by OPC.
2.2.1 Must Run Contract Resources. For each Interval during the
Term, MS shall Nominate and pay for, at the prices set forth in
Exhibit 3.1, all of the OPC Energy from Available Contract Resources that
are Must Run Contract Resources to be sold by OPC to MS under this
Agreement for resale to OPC or third parties.
2.2.2 Dispatchable Contract Resources. (a) OPC offers to MS on
an exclusive basis during the Term the firm options to Nominate and
purchase from OPC at the prices set forth in Exhibit 3.1, during any
Interval, Electric Energy up to the limits of Available Contract Resources
that are Dispatchable Contract Resources.
(b) MS shall effect the acceptance of an OPC offer made pursuant to
paragraph (a) of this Section 2.2.2 by complying with the Nomination
provisions of Section 2.3 and, as appropriate, the Scheduling procedures
set forth in Article 4. Subject to the provisions of Section 2.3, OPC
shall sell and MS shall purchase and pay for all such Electric Energy
Nominated by MS for resale to OPC or third parties.
2.3 Contract Resource Nominations; Scheduling. (a) Available Contract
Resources. Any Contract Resource that is not an Unavailable Contract Resource
shall be an Available Contract Resource regardless of whether OPC chooses or is
able to use the generating or contract assets underlying the Contract Resource.
As soon as reasonably practicable after it becomes available to OPC during the
normal course of business, but in no event later than October 31 of any calendar
year during the Term, OPC shall deliver to MS a schedule of planned unit
maintenance periods for the following calendar year during which periods OPC
anticipates one or more Contract Resources may be an Unavailable Contract
Resource; [ ]* OPC shall provide MS an updated planned maintenance
schedule each month during the Term, on or before the fifteenth (15th) day of a
calendar month, with the updated schedule providing (i) the periods in the
following calendar month in which OPC expects that one or more Contract
Resources may be an Unavailable Contract Resource subject to the provisions of
Section 2.4 and (ii) the identity of each of the Contract Resources expected to
be so designated for each such period. [ ]*
(b) Nominations; Daily MS Schedules. MS may Nominate delivery by OPC
during any Intervals, Electric Energy associated with Available Contract
Resources. On or before [ ]* EPT on each Business Day during the Term, MS
shall provide to OPC an indicative non-binding schedule of expected Nominations,
which shall describe the Available Contract Resources, third party resources and
Delivery Points that MS plans to use to Supply Electric Energy to meet the
Aggregate OPC Load for each Interval or portion thereof falling within the next
calendar day, commencing at
- ------------------------
* 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.
5
<PAGE>
[ ]* EPT of the current Business Day. MS shall Nominate by providing to
OPC a firm schedule ("MS Schedule") by [ ]* EPT on each Business Day.
Such MS Schedule shall also describe the quantity of Electric Energy associated
with Available Contract Resources that MS plans to purchase during each Interval
of such day for resale to third parties. If the next day is not a Business Day,
then the MS Schedule shall cover each day through and including the next
Business Day. Such MS Schedule shall be Nominated by MS in accordance with the
provisions of Section 2.3(c). MS may not include in the MS Schedule (or
otherwise Nominate) for any Interval Electric Energy from any Unavailable
Contract Resource for the Interval in question. After MS Nominates by
submitting or adjusting a MS Schedule, each Party shall be responsible for
Scheduling transmission to or from the Delivery Points as specified in
Section 4.1. [ ]*
(c) Manner of Request. A Party shall Schedule or Nominate Electric Energy
through (i) a recorded telephone conversation between the Parties, (ii) a
facsimile transmission, or (iii) such other method of communication, including
electronic communication, as the Parties may mutually agree is appropriate.
Such requests shall be confirmed in the manner, if any, established by the
Parties' agreement for the type of communication in question. The Parties agree
not to contest or assert any defense to the validity or enforceability of
telephonic requests 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 make such communication. Each Party consents to the
recording of its representatives' telephone conversations without any further
notice. All recordings or electronic communications may be introduced into
evidence to prove oral agreements between the Parties. MS shall accommodate any
reasonable request by OPC to communicate the MS Schedule electronically or in
such other manner as may benefit efficiency in OPC's Scheduling and dispatch
operations.
2.4 Effect of Contract Resource Unavailability. Exhibit 3.1 describes
the Contract Resources generally available to MS under this Agreement,
including all of the Contract Resource Constraints associated with each
Contract Resource. [ ]*
2.5 Customer Choice Load. [ ]*
(a) [ ]*
(b) [ ]*
(c) [ ]*
2.6 Failure to Deliver or Receive. (a) Seller's Failure to Deliver.
Unless excused by Force Majeure or the unexcused failure of Buyer's performance,
if Seller fails to deliver, or cause to be delivered, the Contract Quantity,
[ ]*
(b) Buyer's Failure to Receive. Unless excused by Force Majeure or the
unexcused failure of Seller's performance, if Buyer fails to receive, or cause
to be received, the Contract Quantity, [ ]*
- ------------------------
* 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.
6
<PAGE>
(c) Variances and Imbalances. [ ]*
(d) [ ]*
2.7 Special Early Termination Right. (a) [ ]*
(b) [ ]*
(c) [ ]*
(d) [ ]*
2.8 Stranded Costs. In the event OPC, GTC, GSOC, the EMCs or any
affiliate or subsidiary of such companies becomes entitled to receive
compensation associated with stranded generation, transmission, distribution or
other assets or costs, MS shall have no claim or entitlement to any such
compensation; nor shall MS have any obligation or liability for the payment of
any amounts attributable to or in any way arising from stranded costs or
stranded investments associated with or otherwise relating to the (a) Contract
Resources or any liability associated therewith or any other assets or
liabilities of OPC or (b) assets or liabilities of GTC or GSOC, as the case may
be, in each such case under clauses (a) or (b) whether such amounts are
characterized as competitive transition charges, wire charges or other costs or
charges. However, neither the institution of retail wheeling in Georgia nor
other market loss with or without the recovery of stranded costs, shall in any
way excuse OPC or the EMC Customers from their obligations under this Agreement,
including their obligations to take and pay for Electric Energy in the
quantities and at the prices agreed upon herein.
Article 13
Contract Resources
3.1 Contract Resources. (a) The Contract Resources subject to this
Agreement are set forth in Exhibit 3.1. Such Exhibit also includes operating
characteristics and Contract Resource Constraints applicable to each Contract
Resource. The characteristics and Contract Resource Constraints applicable to
Contract Resources as set forth in Exhibit 3.1 shall, for purposes of this
Agreement, determine the pricing, limitations, and conditions on availability
for MS's use of such Contract Resources [ ]*. MS shall not be entitled
under this Agreement to Nominate in the MS Schedule or purchase Electric Energy
in amounts in excess of the quantities available in accordance with the
characteristics and Contract Resource Constraints set forth in Exhibit 3.1.
3.2 OPC Contracts. (a) OPC shall be responsible for compliance with the
OPC Contracts. OPC shall have the right during the Term to enter into new
contracts or other agreements to make sales, purchases or exchanges of Electric
Energy, without the prior consent of MS, including new contracts for (i) sales
of capacity and Electric Energy from resources not included within Contract
Resources, (ii) sales of capacity and Electric Energy from resources that are
included within Contract Resources, provided that OPC replaces at its sole cost
and expense any such Electric Energy Nominated in the MS Schedule and makes such
Electric Energy available to MS at the
- ------------------------
* 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.
7
<PAGE>
applicable Contract Price, (iii) purchases and sales of capacity and Electric
Energy to serve Customer Choice Customers, (iv) sales of capacity and Electric
Energy under the EMC Contracts, and (v) purchases and sales of capacity and
Electric Energy as required to serve OPC Load in excess of the applicable
Aggregate OPC Load, or to serve the applicable Aggregate OPC Load after the
Term, and (vi) as expressly set forth elsewhere in this Agreement; provided,
that such contracts or agreements shall not materially adversely affect or
otherwise materially interfere with OPC's ability to perform its obligation to
sell Electric Energy to or to purchase Electric Energy from MS hereunder; and
provided, further, that no changes in such contracts or agreements by OPC shall
alter MS's right to Nominate or Schedule Contract Resources pursuant to this
Agreement.
(b) Nothing in this Agreement shall be construed to assign, impose or
otherwise transfer any rights or obligations under the OPC Contracts to MS, and
OPC or its designee shall retain all of its rights and obligations, including
the right to dispatch, operate, and maintain the power purchase and generating
supplies available to it under the OPC Contracts, and 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, nor
shall any Party be required to take any action inconsistent with its rights and
obligations under the NERC or SERC guidelines. Nothing in this Agreement shall
affect the rights or obligations of the parties to the EMC Contracts. OPC shall
have the right to terminate, amend, or otherwise modify the OPC Contracts,
subject to the provisions of Section 16.1.
(c) OPC shall have the right to expand, retrofit, upgrade, or otherwise
modify the generating units or contracts on which the Contract Resources are
modeled, and shall have the right to expand, upgrade, or otherwise modify the
transmission facilities comprising the ITS; provided, that such expansion,
retrofit, upgrade, or other modification shall not materially adversely affect
or otherwise materially interfere with MS's ability to Supply or purchase
Electric Energy hereunder or OPC's ability to perform its obligations to sell
and deliver or purchase and receive Electric Energy. OPC shall bear the costs
of any such expansion, retrofit, upgrade, or other modification, including any
contract modifications, and any incremental or expanded capacity and Electric
Energy associated with such activity, shall not be made available to MS as a
Contract Resource, but may be used, at OPC's discretion, to satisfy its
obligations to MS arising under the MS Schedule.
3.3 Dispersed Generation. Generating facilities currently owned by
individual EMCs will not be a Contract Resource, but will remain the property of
each such EMC which may use such generating facilities as it shall determine
from time to time. [ ]*
3.4 Load Management. Load management switching equipment and any other
demand side management of individual EMCs will not be a Contract Resource, but
will remain the property of such EMCs which may use, or direct OPC on such EMC's
behalf to coordinate the use of such load management switching equipment or any
other demand side management as it shall determine from time to time. [ ]*
3.5 Hartwell Fuel. MS shall be entitled, at its expense, to cause fuel to
be provided to generate at Plant Hartwell Electric Energy that corresponds to
Electric Energy that MS Nominates
- ------------------------
* 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.
8
<PAGE>
with respect to the Hartwell Resource. To the extent that MS causes fuel to be
so provided for use at Plant Hartwell, the Energy Cost attributable to the
Electric Energy purchased by MS from OPC with respect to the Hartwell Resource
shall not include the cost or expense associated with fuel listed for the
Hartwell Resource in Exhibit 3.1. [ ]* Any such gas supplied for OPC's
use at Hartwell shall be provided in a manner that does not violate the fuel
procurement requirements, if any, of that certain agreement between OPC and
Hartwell Energy Limited Partnership, dated June 12, 1992; provided, however,
that MS shall provide sufficient notice of its intent to cause such fuel to be
provided to permit compliance with all applicable provisions of the
OPC Contracts pertaining to Plant Hartwell and shall comply with mutually
agreeable allocation procedures developed among OPC, MS and the Other Power
Marketer. [ ]*
3.6 [ ]*
3.7 Block Power Sale Agreements. OPC has canceled Block 3 of the GPC
Block Power Sale Agreement, and OPC has given timely notice to GPC to cancel
Block 4 of the Block Power Sale Agreement as of August 31, 1997 and Block 2 of
the Block Power Sale Agreement as of August 31, 1998. [ ]*
3.8 New Contract Resources. OPC and MS each shall have the right during
the Term to construct, purchase, lease, or otherwise acquire at no cost to the
other Party additional generating or purchased power resources, including
entering into agreements with Qualifying Facilities, which resources, in the
case of OPC, shall not be Contract Resources and in the case of MS, shall not be
subject to any claim by OPC; provided, that such construction, purchase, lease
or other arrangement shall not materially adversely affect or otherwise
materially interfere with OPC or MS's ability to perform their obligations to
sell or deliver Electric Energy to or to purchase Electric Energy in accordance
with the terms of this Agreement.
3.9 Emission Allowances. [ ]*
3.10 SEPA Energy Allocation Schedule. Exhibit 2.1(b) reflects the
allocation to each EMC Customer of SEPA Energy based on full participation by
each EMC Customer in the initial Contract Year. MS shall provide to OPC, no
later than close of business on the last Business Day of November each calendar
year, a schedule of energy allocations with respect to the SEPA Contracts for
the following calendar year ("SEPA Energy Allocation Schedule"). [ ]*
Exhibit 2.1(c) reflects the initial estimate of the SEPA Energy Allocation
Schedule for the term of this Agreement, based on participation by each EMC
Customer by year, as reflected in Exhibit 1.62. [ ]*
3.11 Intraday Trading Management. (a) [ ]* OPC and GSOC shall
protect MS's Confidential Information acquired in connection with this Intraday
management function in accordance with the provisions of Article 7. For this
purpose, the MS Schedules are designated by MS as Confidential Information.
[ ]* (i) [ ]*
(b) [ ]*
*------------------------
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.
9
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(c) [ ]*
Article 4
Transmission
4.1 Transmission and Scheduling. (a) [ ]*
(b) [ ]*
(i) [ ]*
(ii) [ ]*
(iii) [ ]*
(c) [ ]*
(d) [ ]*
4.2 Title and Risk of Loss. As between the Parties, Seller shall be
deemed to be in exclusive possession and control (and responsible for any Claims
relating thereto) of the Contract Quantity prior to the Delivery Point. As
between the Parties, Buyer shall be deemed to be in exclusive control (and
responsible for any Claims relating thereto) of the Contract Quantity at and
from the Delivery Point. Title to Electric Energy shall transfer from Seller to
Buyer at the Delivery Point.
4.3 Scheduling. Sales by MS to OPC to supply Aggregate OPC Load shall be
Nominated and Scheduled in accordance with the provisions of Sections 2.3 and
4.1 above. The Parties shall also establish procedures whereby OPC shall
communicate to MS, or cause to be communicated to MS the availability of ITS
capability and Interface Capability for effecting purchase and sale transactions
pursuant to this Agreement.
4.4 Delivery Points. Except as otherwise provided in this Article 4, MS,
in its reasonable discretion, shall specify one or more Delivery Points for the
sale and delivery of the OPC Energy which is Nominated in the MS Schedule. OPC
shall use commercially reasonable efforts to accommodate designations by MS of
Delivery Points which are Points of Interconnection consistent with: OPC's
and/or GTC's interests and rights in the ITS under the ITSA; [ ]*, and the
terms, conditions and limitations, if any, under the OPC Contracts. OPC shall
promptly inform MS, or cause MS to be informed, of any transmission constraints
or other impediments to satisfying such Delivery Point designations so that MS
may notify OPC of appropriate changes to the source or amount of OPC Energy to
be delivered at such Delivery Points. Nominations of Contract Resources shall
be limited only by Contract Resource Constraints.
(a) Delivery Points for OPC Energy Used to Serve MS's Share of OPC
Load. [ ]*
- ------------------------
* 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.
10
<PAGE>
(b) Transmission of Electric Energy to EMCs. [ ]*
(c) Transmission of Electric Energy from Off-System Resources. [ ]*
(d) Transmission of Electric Energy from Contract Resources to Serve
Non-OPC Load. [ ]*
(e) MS's Purchase of Transmission. [ ]*
4.5 Transformer and Transmission Loss Adjustments. (a) Transformer Loss
Adjustments. [ ]*
(b) Transmission Loss Adjustments:
(i) For purposes of Supplying OPC with Electric Energy to serve
Aggregate OPC Load, [ ]*
(ii) For purposes of supplying Electric Energy to satisfy MS's sales
to third parties that accept delivery on the ITS or for delivery at Points of
Interconnection, [ ]*
(iii) For purposes of supplying Electric Energy to permit OPC to
pump water to the upper reservoir at Rocky Mountain, [ ]*
4.6 Other Transmission Related Uses. MS shall be responsible for all
transmission, ancillary services and related costs incurred in or out of the
State of Georgia for purchase, sale or purchase/resale transactions that are not
related to MS satisfying its obligations or exercising its options under this
Agreement, including, but not limited to, (a) transmission of power through the
ITS from resources outside the State of Georgia to Interface Delivery Points for
customers located outside the State of Georgia and (b) transmission of Electric
Energy from any resource located in the State of Georgia other than a Contract
Resource to Interface Delivery Points for delivery to customers outside the
State of Georgia. To the extent MS requires such transmission service from GTC,
such service will be pursuant to the rates, terms and conditions of GTC's Open
Access Transmission Tariff. MS shall also be responsible for any network or
point to point transmission services for transmission of power from resources
outside the State of Georgia to third party customers in the State of Georgia
(other than OPC, the EMCs or the purchasers under OPC Off-Systems Sales
Contracts) and utilization of transmission services to effect such transactions
shall not have an adverse effect on the right or ability of OPC or MS to satisfy
fully their respective obligations under this Agreement or on the costs
attributable to the satisfaction of such obligations.
4.7 Control Area. OPC reserves the right, at any time during the Term, to
establish and operate a Control Area or to become an independent system operator
("ISO"), or to contract with others to establish and operate a Control Area or
ISO, provided that any of such events shall not limit, restrict or reduce OPC's
obligations to MS, or adversely affect MS's rights or obligations, under this
Agreement. Such a Control Area would be utilized pursuant to 18 C.F.R. Part 35
to match
- ------------------------
* 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.
11
<PAGE>
Electric Energy input and output within the electric system, maintain scheduled
interchange with other Control Areas, maintain the frequency of the Electric
Energy system within reasonable limits and provide sufficient generating
capacity to maintain operating services. OPC shall also have the right, at its
own expense, to use any available capacity and to produce Electric Energy from
any OPC plant or contract, including a plant or contract upon which a Contract
Resource is modeled, without impacting MS's rights or obligations to Nominate or
Schedule Electric Energy from any Contract Resources, for the purpose of
providing or supplementing Control Area services or an ISO.
4.8 Risk of Intraday Transmission Constraint. The risk of an Intraday
transmission interruption under an MS Schedule, and which is not defined as a
Force Majeure event, will be allocated as follows:
(a) If Scheduled MS delivery of Electric Energy to OPC or another party is
disrupted because of an interruption in transmission outside the ITS or at an
ITS interface with another utility, and not an interruption within the ITS, then
the cost of replacement energy shall be borne by MS in accordance with the
provisions of Section 2.6, except that OPC shall bear the risk as to the
Offsystem Contract Resources which are delivered to the ITS under OPC's
agreements with other entities. In the event of such interruption, as soon as
practicable after taking appropriate measures to ensure continuity of service in
a commercially reasonable manner, as required by Section 2.6, OPC must inform MS
of such event and subsequent OPC actions. MS may at its option after being so
informed, choose to allow the measures OPC has taken to continue for the
duration of the disruption or to adjust the applicable MS Schedule for all or
part of the remaining period of disruption by promptly Nominating Available
Contract Resources to be purchased and resold pursuant to Section 2.3(c).
(b) If a Scheduled MS delivery of Electric Energy to OPC is disrupted
because of an interruption in transmission within the ITS and not because of
transmission interruption outside the ITS nor at an ITS interface with another
utility, the responsibility for locating replacement energy and liability as
calculated under Section 2.6 or 2.7, as applicable, shall be borne by OPC.
(c) OPC agrees to operate in accordance with Prudent Utility Practice to
minimize the likelihood of transmission or supply interruptions or curtailments.
In the event that OPC chooses to modify the MS Schedule as provided for in this
Agreement, OPC agrees to do so in accordance with Prudent Utility Practice to
minimize the likelihood of any transmission interruption insofar as this does
not interfere with service to the OPC EMC Customers.
4.9 Other OPC Responsibilities. In addition to the above, OPC shall, at
its cost, also be responsible (or shall cause GTC to be responsible) for the
following:
(i) Communicating with other owners of the ITS and discharging all
obligations for the OPC generation system and the GTC transmission system
pursuant to and in accordance with the ITSA, except for ITS related costs
otherwise expressly addressed herein.
(ii) Responding to any transmission requests filed under GTC's Open
Access Transmission Tariff or pursuant to Section 211 of the Federal Power Act
or other applicable legal requirements and representing such interest before
FERC or any other regulatory agency or court.
12
<PAGE>
(iii) [ ]*
(iv) [ ]*
(v) Ensuring that all actions undertaken by OPC or GTC will comply
with Law and GTC's Open Access Transmission Tariff.
(vi) [ ]*
4.10 Other Obligations of MS. In addition to the above, MS shall also be
responsible for the following:
(a) Providing all necessary Scheduling information such that OPC can
arrange with GTC for necessary transmission services to import and utilize the
Electric Energy provided by MS pursuant to this Agreement. Such information
shall include, but not be limited to, the size, ramping characteristics and
duration of proposed transactions and the proposed Interface Delivery Points.
(b) To the extent required by Order 889, GTC may limit MS's access to the
GSOC control room and GTC may cause its personnel to be separated from the
personnel of MS, OPC and GSOC that are engaged in the performance of
transmission services. If MS receives information from GTC regarding available
transmission capability, it shall do so in compliance with FERC Order 889 and
shall not receive such information on a preferential basis as defined in such
order.
4.11 Adjustment to MS's Allocated Interface Capability. (a) [ ]*
(b) [ ]*
Article 5
Price
5.1 OPC's Contract Price. The Contract Price for Electric Energy sold by
OPC to MS shall be determined for each Contract Resource as the sum of (i) the
fixed payment for such Contract Resource, as set forth in Exhibit 3.1 (whether
or not MS Nominates Electric Energy from such Contract Resource); plus
(ii) unless otherwise provided in Section 3.5 pertaining to fuel supplied by MS
to Plant Hartwell, the variable payment, and [ ]*, if any ("Energy Cost"),
applicable to the Contract Resource, as set forth in Exhibit 3.1, for Electric
Energy that MS Nominates from that Contract Resource in the applicable MS
Schedule, regardless of the actual generating or contractual source of the
Electric Energy actually delivered or sold by OPC.
5.2 MS's Contract Price. (a) Minimum OPC Obligation. With respect to
sales of Electric Energy by MS to OPC relating to the Minimum OPC Obligation
applicable to an EMC Customer, the Contract Price shall be, during each Contract
Year of the Term, the MS Sales Price for such EMC Customer pertaining to such
year, as set forth in Exhibit 5.3.
- ------------------------
* 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.
13
<PAGE>
(b) Incremental Quantity. With respect to sales under this Agreement of
Electric Energy by MS to OPC relating to the Incremental Quantity, the Contract
Price shall be a price to be negotiated.
(c) Customer Choice. With respect to sales under this Agreement of
Electric Energy by MS to OPC relating to a particular Customer Choice Load, the
Contract Price shall be the price established pursuant to Section 2.5 of this
Agreement.
(d) AEC Resource. With respect to sales of Electric Energy by MS to OPC
relating to the AEC Resource, the Contract Price shall be the price established
for such resource as set forth in Exhibit 3.1.
5.3 Amounts Due to OPC and MS. Each month, OPC shall charge MS an amount
equal to (i) the aggregate fixed payments for the Contract Resources as set
forth in Exhibit 3.1, regardless of whether MS actually Nominates Electric
Energy from such resources, plus (ii) the aggregate Energy Costs attributable to
the Electric Energy that is Nominated in the MS Schedules, minus (iii) any
credits against OPC's charges provided by this Agreement. Each month, MS shall
charge OPC an amount equal to the sum of the following: (i) the product of the
applicable portion of the Minimum OPC Obligation attributable to an EMC Customer
for such month, times the MS Sales Price applicable to such EMC Customer;
(ii) the product of the applicable price set forth in Section 5.2(b) times the
Incremental Quantity attributable to such EMC Customer; (iii) the product of
Customer Choice Load served by MS and purchased by and delivered to OPC during
the month, times the applicable Customer Choice Price, and (iv) the product of
Electric Energy relating to the AEC Resource sold by MS and purchased by and
delivered to OPC during the month, times the price set forth in Section 5.2(d).
5.4 Netting of Payment Obligations. Notwithstanding the foregoing, if
amounts are due on the same day with respect to the amounts described in
Section 5.3, the Parties shall satisfy their respective financial obligations to
each other by netting the amounts due to OPC from MS against amounts due to MS
from OPC hereunder, subject to the provisions of Section 8.2.
Article 6
Term
6.1 Start-up Term. This Agreement shall become effective on the date
first written above (the "Effective Date"), provided that the delivery of
Electric Energy pursuant to this Agreement shall commence at 00:00:01 CPT on
May 1, 1997 ("Commencement Date"), and, unless extended as provided in Section
6.2, shall remain in effect until 24:00 CPT on the eleventh (11th) Business Day
after May 8, 1997, unless earlier terminated pursuant to this Agreement (the
"Term"); provided that the Parties' obligations to purchase and sell Electric
Energy as provided in this Agreement during the Term set forth in this Section
6.1, shall terminate as of the end of the last Interval for which Nominations
were made prior to 24:00 CPT on May 8, 1997. The last day of the Term
(including in the case of an early termination) shall be referred to as the
Termination Date. Certain provisions of this Agreement shall continue in effect
after the Termination Date in accordance with the provisions of Section 17.4.
OPC shall use commercially reasonable efforts prior May 8, 1997, to
14
<PAGE>
obtain all requisite approvals from the EMC Customers to extend the Term of this
Agreement for the maximum Term contemplated by the Parties, as provided in
Sections 6.2 and 6.3. [ ]*
6.2 Initial Term. If OPC notifies MS by May 8, 1997 that it has obtained
the requisite approvals referred to in Section 6.1, then the Agreement shall be
extended through March 31, 2000, unless earlier terminated pursuant to this
Agreement, and the Term shall be deemed to include any such extension.
6.3 Long Term Extension. In the event the condition precedent requiring
RUS approval of this Agreement, as set forth in Section 11.1, is satisfied on or
before June 13, 1997, then the Term shall be extended until 24:00 CPT on
March 31, 2005, unless earlier terminated pursuant to this Agreement, and the
Term shall be deemed to include any such extension. OPC shall provide MS with
written notice promptly following the satisfaction of the such condition
precedent, which notice shall specify the date ("Long Term Commencement Date")
on which such condition precedent was satisfied. In the event RUS approval has
not been received on or before June 13, 1997 (or by such later date as may be
designated by MS), then the extension provision in this Section 6.3 shall be of
no further force and effect, and the Term shall be as set forth in Section 6.2.
6.4 EMC Customer Term Selections. Each EMC Customer has been given a
choice concerning the number of years it seeks to have a portion of its
requirements served by OPC through purchases from MS under this Agreement;
provided that the minimum selection is three Contract Years. Those selections
are reflected in Exhibits 1.62 and 2.1, which set out the individual
EMC Customer terms and initial quantities that comprise the OPC Minimum
Obligation and the Term.
Article 7
Confidential Information
7.1 Prior Confidentiality Agreement Superseded; Authorization to Use
Information. The Parties expressly agree that the Confidentiality Agreement
entered into by OPC, MS and Cooperative Power, Inc. ("CPI") dated as of
February 6, 1996, as amended, automatically and immediately and with no further
action by the Parties shall terminate as of the Effective Date of this
Agreement. OPC represents that in connection with such termination it is duly
authorized to act on behalf of and to bind CPI. OPC expressly authorizes and
grants its consent to MS to use Confidential Information, whether acquired
before or after the Effective Date, pertaining to, without limitation, OPC,
Contract Resources, OPC Load, OPC's off-system sales contracts and the
EMC Customers, for the purpose of exercising MS's rights under this Agreement,
including MS'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 Contract Resources or other resources. Each
Party agrees that it shall not disclose Confidential Information whether
acquired before or after the Effective Date, to any third party other than each
Party's officers, directors, employees, advisors or representatives, or each
Party's Affiliates (or as to OPC, the EMCs), their officers, directors,
employees, advisors or representatives who need to know and agree to maintain
the confidentiality of the Confidential Information (collectively,
"Representatives") during the Term and for a period ending three (3) years
- ------------------------
* 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.
15
<PAGE>
after the Termination Date. Each Party shall be responsible for any breach of
this Agreement by its Representatives.
7.2 Authorized Disclosure. Notwithstanding anything contained in this
Article 7, 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
information is given notice of the disclosure requirement (if in the opinion of
the other Party's counsel such notice is permitted by law) 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 to use its good faith efforts to prevent
the further disclosure of any Confidential Information provided to any
governmental, judicial or regulatory authority. The Parties recognize that MS
is required to file quarterly reports with the FERC which disclose certain
price, quantity, and related data.
7.3 Return of Confidential Information. Upon (i) the termination of this
Agreement and (ii) the request of a Party, the other Party shall return or
destroy all written Confidential Information (including written confirmation of
oral communications other than communications relating to purchases and sales of
Electric Energy) provided by the requesting Party which was stamped
"Confidential." In the event of such request, 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 (collectively, "Other
Records") shall be destroyed and only one copy thereof shall be retained (such
destruction to be confirmed in writing by a duly authorized officer of the
returning Party), provided that the Party or its Representative makes a
reasonable effort to locate and return the covered documents. Computer Tapes
and Other Records shall be kept confidential in accordance with the terms of
this Agreement. Notwithstanding the foregoing, neither Party shall be required
to destroy or return documents covered by this provision prior to the later of
the expiration of applicable statutes of limitations for actions that might
arise with respect to the subject matter of such documents or final action with
respect to any legal action or arbitration involving such documents.
7.4 Right to Remedies. In the event of an unauthorized disclosure to a
third party, the limitations on remedies contained in Section 10.2 shall not
apply, and in the event of a breach no 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.
7.5 Georgia Trade Secrets Act. Except as expressly provided in this
Article 7, including OPC's consent to the use by MS 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 the Georgia Trade Secrets Act of 1990. Nothing in this
Article 7 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.
16
<PAGE>
Article 8
Billing, Payment and Records
8.1 Billing Statements. OPC shall deliver to MS no later than on the
tenth (10th) day of each month (or the first Business Day thereafter), a
statement (the "Statement") setting forth for the immediately prior month
(i) the Minimum OPC Obligation purchased at the applicable MS Sales Price,
(ii) the amounts of Electric Energy purchased by OPC from MS at the applicable
prices associated with any Incremental Quantity, (iii) the respective Customer
Choice Loads and applicable prices, (iv) the amounts of Electric Energy
purchased by OPC from MS relating to the AEC Resource and applicable prices, and
(v) any credits provided by this Agreement. Such statement shall also show the
amounts of Electric Energy purchased by MS from OPC at the applicable
OPC Contract Price.
8.2 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, as set forth in Section 8.3. Each Party reserves to itself all
rights, setoffs, counterclaims and other remedies and defenses, consistent with
Article 10, which such Party has or may be entitled to arising from or out of
this Agreement. All outstanding obligations to make payments under this
Agreement may be offset against each other, set-off or recouped therefrom.
8.3 Payments. The Party owing the other shall pay the amount owing under
the Statement, which payment shall be due on or before the later of the
following: (i) the fifth (5th) day after receipt of the Statement or (ii) the
fifteenth (15th) day of the month in which the Statement is received (or the
first Business Day thereafter). Payment shall be made by wire transfer to the
payment address provided in Exhibit 17.2. 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 (10) 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.
8.4 Audit Rights. (a) 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, or copies of 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. With respect to records (i) held in the
custody of a third party, (ii) held by OPC but which cannot be disclosed to MS,
or (iii) held by MS, but which cannot be disclosed to OPC, in each case pursuant
to a confidentiality provision of the applicable contract, if an audit is
requested by a Party, the Parties shall select an independent auditor to perform
the audit consistent with the rights of OPC or MS, as the case may be, under the
contract and such confidentiality arrangements as may be required by the
contract in question. Subject to any additional limitations that may be imposed
under the OPC or MS contract in question, such examinations by an independent
auditor shall not
17
<PAGE>
be performed more frequently than once each calendar year. The Party requesting
the audit shall pay all costs, including those of the independent auditor,
associated with the audit.
(b) If any such examination reveals any inaccuracy in any Statement,
(i) the necessary adjustments in such Statement will be promptly made and
included in a revised Statement submitted by OPC, and (ii) 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 (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.
8.5 Subsequent Payment Adjustments. The Parties understand that in
certain cases monthly billings will need to be made on an estimated basis. In
addition, the Parties understand that after the fact adjustments to amounts owed
or revenues received may be made pursuant to the CSA or other OPC Contracts,
which adjustments may affect the Energy Cost and associated amounts payable by
MS to OPC under this Agreement. 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" or otherwise adjust any estimated or adjusted
billings promptly.
8.6 Records. Each Party shall keep such records as may be needed to
afford a clear history of the Nominated or Scheduled purchases and sales
hereunder. In maintaining such records, OPC and MS may rely upon the logs and
other meter information routinely recorded by Transmission Providers or
utilities responsible for coordination of the purchases and sales.
Article 9
Taxes
9.1 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 the sale
of Electric Energy 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.
9.2 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 purchase
of Electric Energy 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.
9.3 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 purchase or sale 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.
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Article 10
Indemnification and Remedies
10.1 General Indemnity. Subject to Section 10.2, Seller and Buyer shall
each indemnify, defend and hold harmless the other Party from any injury,
damage, 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 4.2, provided that OPC shall indemnify and hold MS harmless with respect
to any damage, injury or other Claims arising with respect to OPC's facilities,
including the ITS.
10.2 Limitation on Remedies. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES
AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT AND IN THE GUARANTY 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 RESPONSIBLE PARTY'S
LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES
OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED REGARDLESS OF THE FAULT, NEGLIGENCE OR
STRICT LIABILITY OF THE PARTY WHOSE LIABILITY IS RELEASED OR LIMITED THEREBY.
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, THE RESPONSIBLE
PARTY'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES (INCLUDING INTEREST
AS PERMITTED BY APPLICABLE LAW) 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, NO PARTY SHALL BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, MULTIPLE, 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, INCLUDING DAMAGES PROVIDED IN SECTION 2.6 or 2.7, 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. THE PARTIES AGREE TO
RESOLVE THEIR DISPUTES THROUGH ARBITRATION PURSUANT TO ARTICLE 14, BUT IF FOR
ANY REASON ARBITRATION IS UNAVAILABLE, THE PARTIES AGREE TO SEEK TO RESOLVE
THEIR DISPUTES IN A UNITED STATES DISTRICT COURT WITHOUT A JURY TRIAL, THE RIGHT
TO WHICH IS IRREVOCABLY WAIVED BY EACH PARTY.
10.3 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 nonperformance of this Agreement.
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10.4 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH HEREIN, OPC, WITH RESPECT
TO THE SALE OF ELECTRIC ENERGY TO MS, AND MS, 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.
Article 11
Conditions Precedent
11.1 Regulatory Authorizations. The Parties' obligations to commence
delivery of Electric Energy under this Agreement shall be subject to receipt of
any governmental consents or approvals required to perform this Agreement;
provided, that approval by the RUS without modification of this Agreement shall
only be a condition precedent to the Long Term Commencement Date and extension
of the Term as set forth in Section 6.3.
11.2 Guaranty Agreement. A condition precedent to OPC's obligations under
this Agreement shall be the delivery of a guaranty by Morgan Stanley Group Inc.
of MS's obligations arising under this Agreement in the form attached as
Exhibit 11.2.
11.3 Failure of Certain Conditions Precedent. Each Party shall provide the
other with written notice promptly following the satisfaction of the conditions
precedent to such notifying Party's obligations, as described in this
Article 11. In the event a condition precedent set forth in this Article (other
than the receipt of RUS approval) has not been satisfied or waived in writing by
the Party entitled to rely on such condition precedent by April 16, 1997, then
this Agreement shall terminate automatically. Failure to obtain RUS approval as
set forth in Section 6.3 shall cause the Term to be established as set forth in
Section 6.1 and/or Section 6.2.
Article 12
Representations and Warranties
12.1 Mutual Representations. On the Effective Date, the Commencement Date,
the Long Term Commencement Date, and the date of entering into each purchase or
sale of Electric Energy, 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 MS, 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 RUS, necessary for it to legally perform its obligations
under this Agreement; (iv) the execution, delivery and performance of this
Agreement and any other documentation it is required to deliver under this
Agreement 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) the individual(s) executing and delivering this Agreement
and any other documentation required to be delivered under this Agreement are
duly empowered and authorized to do so; (vi) this Agreement constitutes each
Party's legally valid and binding obligation enforceable
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against it in accordance with the terms thereof, subject to any Equitable
Defenses; (vii) no Event of Default with respect to it has occurred and is
continuing, and no such event or circumstance would occur as a result of its
entering into this Agreement; (viii) there are no Bankruptcy Proceedings pending
or being contemplated by it or, to its knowledge, threatened against it;
(ix) there are no Legal Proceedings that would be reasonably likely to
materially adversely affect its ability to perform this Agreement; (x) 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 it is capable
of assuming such risks; (xi) it is acting as principal for its own account, and
it has made its own independent decisions to enter into this Agreement and each
Transaction hereunder and as to whether this Agreement and each Transaction
hereunder is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary; (xii) it is not relying on
any communication (written or oral) of the other Party as investment advice or
as a recommendation to enter into this Agreement and any Transaction hereunder;
(xiii) the other Party is not acting as a fiduciary for or an adviser to it in
respect to this Agreement and any Transaction hereunder; and (xiv) it engages in
producing, using commercially, and/or handling as a merchant Electric Energy.
12.2 Additional Representations. (a) MS further represents and warrants
that on the Effective Date, the Commencement Date, the Long Term Commencement
Date, and the date of entering into each purchase or sale of Electric Energy
hereunder (i) MS is a power marketer authorized by the FERC to purchase and sell
Electric Energy at negotiated, market-based rates pursuant to its Rate Schedule
on file with and approved by the FERC; (ii) neither MS nor any of its Affiliates
or subsidiaries will, during the Term, take any action that could reasonably be
anticipated to cause OPC, if applicable, or MS to lose its authority as a power
marketer under the Federal Power Act to make wholesale sales of power at
market-based, negotiated rates; and (iii) MS will, at all times during the Term,
act in accordance with Prudent Utility Practice and will comply with all
applicable regulatory requirements including SERC/NERC guidelines and the
Administrative Procedures.
(b) MS represents and warrants that it will cooperate with the Other Power
Marketer regarding administrative matters during the Term, and OPC represents
and warrants that it has obtained a comparable warranty by the Other Power
Marketer to cooperate with MS regarding administrative matters during the Term.
(c) OPC further represents and warrants that on the Effective Date, the
Commencement Date, the Long Term Commencement Date, and the date of entering
into each purchase or sale of Electric Energy hereunder (i) OPC is authorized by
the RUS to purchase and sell Electric Energy at rates and under terms
contemplated by this Agreement; (ii) neither OPC nor any of its Members will,
during the Term, take any action that could reasonably be anticipated to cause
OPC or MS to lose its authority to sell power as contemplated under this
Agreement; (iii) OPC will, at all times during the Term, act in accordance with
Prudent Utility Practice and will comply with all applicable regulatory
requirements including SERC/NERC guidelines and the Administrative Procedures;
(iv) if any OPC Member ceases to be a Member of OPC, defaults on payments due to
OPC under an EMC Contract, or becomes bankrupt or insolvent however evidenced,
OPC's other Members shall remain liable to OPC for all of its obligations under
this Agreement; (v) nothing in OPC's restructuring or its contracts with others
prevent it from fully performing its obligations under this Agreement.
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(d) Each Party represents and warrants that it shall not seek to modify
this Agreement under Sections 205 or 206 of the Federal Power Act or any other
provision of law except with the consent of both Parties or as needed to
implement a final decision of an arbitration panel duly constituted under this
Agreement. The Parties shall oppose requests by others to modify this
Agreement.
12.3 Mutual Assistance. Each Party represents and warrants that it will
assist the other to the extent practicable with (i) obtaining all required
Regulatory Approvals associated with this Agreement; (ii) defending transmission
capacity reservations; and (iii) defending Qualifying Facility avoided cost
calculations.
12.4 Good Title. Each of OPC and MS represents and warrants that it will
deliver to the other good title to Electric Energy sold hereunder, free and
clear of all liens, claims and encumbrances arising prior to transfer of title
at the Delivery Point.
12.5 Power Quality. Each of OPC and MS represents and warrants that it
will deliver, or cause to be delivered, to the other Party Electric Energy at
the Delivery Point that is three phase, sixty hertz, and at system nominal
voltages.
12.6 Other Contracts. Neither OPC nor its Members, nor MS nor any of its
Affiliates or subsidiaries will, during the Term, take any action, enter into
any contracts or otherwise incur obligations that could reasonably be
anticipated to interfere with or adversely affect its ability to perform its
obligations under this Agreement.
12.7 Continuing Representations and Warranties. Each Party covenants that
it will cause these representations and warranties to be materially true and
correct throughout the Term.
12.8 Certain OPC Representations. Notwithstanding the foregoing, during the
Term described in Section 6.1 and until all requisite approvals from the EMC
Customers have been received as required to extend the Term pursuant to Section
6.2, OPC shall not be deemed to make with respect to the Members the
representations and warranties contained in Sections 12.2(c)(ii) and 12.6.
Article 13
Defaults and Remedies
13.1 Events of Default. An "Event of Default" shall mean with respect to a
Party ("Defaulting Party"):
13.1.1 The failure by the Defaulting Party to make, when due, any
payment required if such failure is not remedied within three (3) 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 8.3; or
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13.1.2 Any 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
13.1.3 The failure by the Defaulting Party to perform any
obligation or covenant set forth in this Agreement (other than its
obligations to make any payment or obligations which are otherwise
specifically covered in this Section 13.1 as a separate Event of Default
and excluding failures of receipt or delivery which are the subject of
timely payments consistent with Section 2.6) and such failure is not
excused by Force Majeure or cured within ten (10) Business Days after
written notice thereof to the Defaulting Party;
13.1.4 The Defaulting Party shall be subject to a Bankruptcy
Proceeding; or
13.1.5 MS's loss of FERC authorization to charge the prices for the
sale of Electric Energy included in this Agreement or otherwise to perform
its obligations hereunder in accordance with the terms of this Agreement.
13.1.6 With respect only to MS, Morgan Stanley Group's failure to
perform any covenant set forth in the Guaranty Agreement delivered in
respect of this Agreement, any representation or warranty made by Morgan
Stanley Group in said Guaranty Agreement shall prove to have been false or
misleading in any material respect when made or deemed to be repeated or
Morgan Stanley Group shall take or suffer any actions set forth in Section
13.1.1 or 13.1.4 as applied to it.
13.2 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,
establish a date (which date shall be at least three (3) Business Days after the
Non-Defaulting Party delivers notice to the Defaulting Party) ("Early
Termination Date") on which this Agreement shall terminate (or, if later, on the
earliest date as permitted by law after the Defaulting Party's receipt of such
notice); provided, however, that if the Event of Default is that the Defaulting
Party becomes subject to a Bankruptcy Proceeding, then 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. Upon the Early Termination Date, the Parties'
obligations to sell, purchase, deliver receive, incur or pay obligations under
this Agreement, other than with respect to payment of all obligations under this
Article 13 of this Agreement, shall terminate, and the Parties shall be liable
for the obligations contained in Sections 13.2.1 and 13.2.2 below. 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 10 and Article 14 to recover
its damages, including attorneys' fees, resulting from any Event of Default.
13.2.1 Upon the Early Termination Date, the Non-Defaulting Party
shall have the right to liquidate all purchases and sales of Electric
Energy, including options and emissions trading agreements with respect
thereto ("Transactions") (including any portion of a Transaction not yet
fully delivered), then outstanding by:
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(1) Closing out each Transaction being liquidated at its Market
Value, as defined below, so that each such Transaction is
canceled and a settlement payment in an amount equal to the
difference between such Market Value and the Contract Value,
as defined below, of such Transaction shall be due to the
Buyer under the Transaction if such Market Value exceeds the
Contract Value and to the Seller if the opposite is the
case; and
(2) Discounting each amount then due under clause 13.2.1(1)
above to present value using a rate of interest determined
in the manner set forth in the last sentence of
Section 13.2.2 (to take account of the period between the
date of liquidation and the date on which such amount would
have otherwise been due pursuant to the relevant
Transaction); and
(3) Setting off or aggregating, as appropriate, all such
settlement payments (discounted as appropriate) and (at the
election of the Non-Defaulting Party) any or all other
amounts owing between the Parties under this Agreement so
that all such amounts are aggregated and/or netted to a
single liquidated amount payable by one party to the other.
Such net amount due shall be paid by the close of business
on the Business Day following the Early Termination Date.
13.2.2 For purposes of this Article 13, "Contract Value" means the
quantities of Electric Energy remaining to be purchased under each
Transaction multiplied by the applicable contract price(s). "Market Value"
means the quantities of Electric Energy remaining to be delivered under each
Transaction multiplied by the market prices per unit remaining to be
purchased. Notwithstanding the foregoing, the Contract Value of a
Transaction in the nature of an option may be determined by reference to the
option premium under the contract, and the Market Value of an option may be
determined as the market price a Party would pay or receive, at the time of
valuation, to purchase or sell an equivalent option. For purposes of these
provisions, determination of the quantity remaining to be purchased or sold
shall take into account options likely to be exercised in light of the
foreseeable difference between the Contract Price and the market price for
such sales or purchases. The market price for Electric Energy to be
purchased or sold and the market price for an option shall be established
by taking the average of proposals solicited in a commercially reasonable
manner from three (3) bona fide power suppliers, brokers or market makers
which are not affiliated with either Party, provided that if quotes cannot
be obtained from three (3) such entities, the market price of a replacement
Transaction shall be determined in a commercially reasonable manner.
The rate of interest used in calculating net present value shall be the
yield (for a comparable time period) on bonds of a utility or industrial,
as the case may be, with ratings similar to the ratings of the Non-
Defaulting Party as set forth in the most recent edition of Standard &
Poor's monthly rating quote.
13.2.3 The Non-Defaulting Party shall give notice that a
liquidation pursuant to this Article 13 has occurred to the Defaulting Party
no later than the Business Day following such
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liquidation, provided that failure to give such notice shall not affect the
validity or enforceability of the liquidation or give rise to any claim by
the Defaulting Party against the Non-Defaulting Party. Nothing in this
Section 13.2.3 shall be construed to relieve the Non-Defaulting Party of its
obligation to give prior notice of the designation of an Early Termination
Date under Section 13.2 above.
13.2.4 The Parties agree that, for the purpose of this Agreement, a
Transaction shall constitute a "forward contract" within the meaning of
the United States Bankruptcy Code.
13.3 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 at the Interest Rate 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.
13.4 Notice. Each Party agrees promptly to notify the other upon becoming
aware of any event or circumstance that constitutes an Event of Default.
Article 14
Arbitration
14.1 Applicability; Selection of Arbitrators. (a) Except as otherwise
expressly provided in Section 7.4 and Article 13 of this Agreement, any dispute
arising out of or in connection with this Agreement, or its performance
including the existence and validity of this Agreement, which cannot be resolved
after discussion between the Parties as set forth herein shall be submitted to
binding arbitration; provided that where this Agreement provides a specific
remedy the arbitrators' authority shall be limited to enforcing the specific
remedies. The foregoing shall not limit a Party's rights to elect remedies in
accordance with Section 7.4.
(b) Prior to initiating arbitration hereunder, a Party shall provide the
other Party with a written notice of the dispute, a proposed means for resolving
the same, and the support for such position. Thereafter, representatives of the
Parties shall meet to discuss the matter and attempt in good faith to reach a
negotiated resolution of the dispute. If the Parties have not agreed upon a
resolution of the dispute within ninety (90) days after the date of the original
notice provided under this paragraph, or such other time period as the Parties
may agree in writing to allow for discussions ("Negotiation Period"), then at
any time after the end of the Negotiation Period, a Party may provide written
notice to the other declaring an impasse ("Impasse Notice") and initiating
binding arbitration in accordance with the further provisions of this
Article 14.
(c) Arbitration will be deemed to be initiated when an Impasse Notice,
properly addressed and stamped, is deposited with the United States Postal
Service. The Party initiating arbitration shall nominate one (1) arbitrator at
the same time it initiates arbitration. This nominee shall not be a
representative or agent of such Party but may or may not be a CPR panel member
and, in any case, shall be reasonably believed by such Party to possess the
requisite experience, education and expertise
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in respect of the matters to which the claim relates to enable such person to
perform arbitral duties competently. The other Party shall nominate one (1)
arbitrator within ten (10) calendar days of receiving the notice of arbitration.
This nominee shall not be a representative or agent of such Party but may or may
not be a CPR panel member and, in any case, shall be reasonably believed by such
Party to possess the requisite experience, education and expertise in respect of
the matters to which the claim relates to enable such person to perform arbitral
duties competently. The two arbitrators shall appoint a third, neutral
arbitrator. The third, neutral arbitrator shall be competent and experienced in
matters involving the energy business in the United States, with at least
fifteen (15) years of electric industry experience as a practicing attorney, and
shall be unaffiliated and without prior financial alliances with any Party, or
either of the other arbitrators.
(d) If the two arbitrators are unable to agree on a third arbitrator
within thirty (30) calendar days from initiation of arbitration, then a third
arbitrator shall be selected by the CPR Institute for Dispute Resolution ("CPR")
with due regard given to the selection criteria above and input from the Parties
and other arbitrators. Parties shall undertake to request CPR to complete
selection of the third arbitrator no later than sixty (60) calendar days from
initiation of arbitration. Costs charged by CPR for this service shall be borne
equally by OPC and the MS.
(e) In the event CPR should fail to select the third arbitrator within
sixty (60) calendar days from initiation of arbitration, then any Party may
petition a court of competent jurisdiction in Georgia to select the third
arbitrator. Due regard shall be given to the selection criteria above and input
from the Parties and other arbitrators.
(f) If prior to the conclusion of the arbitration any arbitrator becomes
incapacitated or otherwise unable to serve, then a replacement arbitrator shall
be appointed in the manner described above and applicable to the original
arbitrator being replaced.
14.2 Discovery, Hearing. Discovery and other pre-hearing procedures shall
be conducted as agreed by the parties, or if they cannot agree, as determined by
a majority of the arbitrators. Within fifteen (15) days after completion of
discovery, the Party submitting the Impasse Notice initiating arbitration shall
submit by overnight delivery to the other Party and the arbitrators a precise
statement of the dispute, means of resolving the dispute, and the factual and/or
legal support therefor. Within ten (10) days after receiving such statement,
the other Party shall submit by overnight mail to the first Party and the
arbitrators a precise statement of the alternative means of resolving the
dispute and the factual and/or legal support therefor. The Parties shall
conduct a hearing no later than sixty (60) days following selection of the third
arbitrator, or thirty (30) days after all prehearing discovery has been
completed, whichever is later, at which the Parties shall present such evidence
and witnesses as they may choose. Hearings for the first arbitration under this
Agreement shall be conducted in Atlanta, Georgia; hearings for the second shall
be conducted in New York City, New York; and, thereafter, the site of
arbitrations shall alternate between the two cities. Arbitration shall be
conducted in accordance with the non-administered arbitration rules and
procedures of the CPR, except where specifically modified by this Agreement.
14.3 Decision. The arbitrators shall consider the terms and conditions of
this Agreement, and any relevant evidence and testimony, and shall render their
decision within thirty (30) calendar days following conclusion of the hearing.
The arbitrators' decision will be limited to selecting one
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of the alternatives specified in the statements of the Parties referred to in
Section 14.2. The decision rendered by a majority of the arbitrators, made in
writing, shall be final and binding upon the Parties. Any such decision may be
filed in a court of competent jurisdiction and may be enforced by any Party as a
final judgment in such court. The arbitrators shall have no authority to award
special, exemplary, or consequential damages.
14.4 Expenses. The expenses of arbitration shall be borne equally by OPC
and the MS, except that each Party shall bear the compensation and expenses of
its nominated arbitrator, own counsel, witnesses and employees; provided
further, that any costs incurred by a Party in seeking judicial enforcement of
any decision rendered in writing by the arbitrators, or a majority of the
arbitrators, shall be chargeable to and borne exclusively by the Party against
whom such court order is obtained.
Article 15
Force Majeure
15.1 Effect of Force Majeure. If either OPC or MS is rendered unable by an
event of 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 canceled
to the extent required. The Party affected by the Force Majeure shall remedy
the Force Majeure with all reasonable dispatch.
Article 1
Material Changes
16.1 Settlements; Modifications of Certain OPC Contracts. [ ]*
16.2 Creditworthiness. (a) [ ]*
(b) [ ]*
(c) [ ]*
16.3 Material Changes in Law. (a) [ ]*
(b) [ ]*
(c) If OPC and MS are not able to agree upon the appropriate amendment
within ninety (90) days after a Party first receives notice of the change from
the affected Party, then the terms of the appropriate amendment or, if no
amendment can reasonably restore the Parties to their previous position, the
appropriate terms of termination including a settlement payment by one Party to
the other determined in the manner of Section 13.2 based on the Parties'
positions under this
- ------------------------
* 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.
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Contract prior to the change in law triggering this Section, shall be determined
by arbitration pursuant to Article 14.
16.4 Effect of Certain 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 17
Miscellaneous
17.1 Assignment.
17.1.1 General. (a) This Agreement shall be binding upon and
inure to the benefit of the permitted successors and permitted assigns of
the Parties, except that this Agreement may not be assigned by any Party
unless prior consent to such assignment is given in writing by the other
Party and, if OPC is then a RUS borrower, the Administrator. Any assignment
made without a consent required hereunder shall be void and of no force or
effect as against the non-consenting party.
(b) No sale, assignment, transfer or other disposition permitted by
this Agreement shall affect, release or discharge any Party from its rights
or obligations under this Agreement, except as may be expressly provided by
this Agreement.
17.1.2 Assignment for Security. (a) Notwithstanding any other
provision of this Agreement, a Party, without the other Parties' consent
but, if such assigning Party is then a borrower of the RUS, only with the
consent of the Administrator, may assign, transfer, mortgage or pledge its
interest in this Agreement as security (an "Assignment for Security") for
any obligation secured by any indenture, mortgage or similar lien on its
system assets without limitation on the right of the secured party to
further assign this Agreement, including the assignment to create a security
interest for the benefit of the Government, acting through the
Administrator, or for the benefit of any third party.
(b) After any Assignment for Security to the Administrator or other
secured party (including any indenture trustee under any indenture securing
the obligations of the Party), the Administrator or other secured party,
without the approval of the other Parties to this Agreement, may (i) cause
this Agreement to be sold, assigned, transferred or otherwise disposed of
to a third party pursuant to the terms governing such Assignment for
Security, or (ii) if the Administrator or other secured party first
acquires this Agreement, sell, assign, transfer or otherwise dispose of
this Agreement to a third party; provided, however, that in either case the
Party who made the Assignment for Security is in default of its obligations
to the Administrator or other secured party that are secured by such
security interest.
17.2 Notices. All notices, requests, statements or payments shall be made
as specified in Exhibit 17.2. Notices required to be in writing shall be
delivered by letter, facsimile or other
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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 the 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 (2)
Business Days after it was sent. A Party may change its address by providing
notice of same in accordance herewith.
17.3 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.
17.4 Survival of Obligations. Upon the expiration of the Parties'
delivery, 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 in
accordance with their respective terms. The Parties' obligations provided in
this Agreement shall remain in effect for the purpose of complying with the
provisions of this Section.
17.5 Entire Agreement. This Agreement, together with the attached
Exhibits, 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.
17.6 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.
17.7 Amendment. No amendment or modification to this Agreement shall be
enforceable unless reduced to writing and executed by both Parties.
17.8 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, including OPC's
Members or their customers.
17.9 Waiver. No waiver by any Party of any one or more defaults by the
other in the performance of any of the provisions of this Agreement shall be
construed as a waiver of any other default or defaults, whether of a like kind
or different nature.
17.10 Character of Sales by OPC. The sale by OPC to MS of OPC Energy
under this Agreement does not constitute either a sale, lease, or the dedication
of ownership of any Contract Resource.
17.11 Severability. Subject to the provisions of Article 16, should
any provision of this Agreement for any reason be declared invalid or
unenforceable by a final, non-appealable order of any court or regulatory body
having jurisdiction, such decision shall not affect the validity of the
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remaining portions of the Agreement, and such portions shall remain in full
force and effect as if this Agreement had been executed without the invalid
portion. In the event any provision of this Agreement is declared invalid, the
Parties shall promptly renegotiate to restore this Agreement as near as possible
to its original intent and effect.
17.12 Headings. The headings used for the Articles and Sections are
for convenience and reference purposes only, and shall not be construed to
modify, expand, or restrict the provisions of this Agreement.
17.13 Counterparts. This Agreement may be executed in multiple
counterparts to be construed as one effective as of the Effective Date.
17.14 Non-Participating Members. (a) Exhibit 17.14 lists the EMCs
that are Non-Participating Members. Non-Participating Members shall be
allocated a portion of Contract Resources and shall have such scheduling and
other rights pertaining thereto as are provided in the EMC Contracts.
(b) In the event during the Term MS or any Affiliate agrees to sell or
otherwise furnish Electric Energy to a Non-Participating Member at a cost or
price to the Non-Participating Member that is less than the MS Sales Price
applicable to such member as identified on Exhibit 5.3, under a full
requirements contract for a period of at least one calendar year, and containing
material terms that are comparable to this Agreement, then, for the period of
time applicable under the Non-Participating Member's contract, the MS Sales
Price reflected on Exhibit 5.3 for each EMC Customer shall be adjusted downward
to reflect a price per MWh for that EMC Customer which equals the product of
(i) such EMC Customer's original price, as listed on Exhibit 5.3, multiplied by
(ii) a fraction, the numerator of which is the price per MWh offered to the
Non-Participating Member, and the denominator of which is the original price for
such Non-Participating Member as listed on Exhibit 5.3.
17.15 Further Assurances. If any Party reasonably determines or is
reasonably advised that any further instruments or any other things are
necessary or desirable to carry out the terms of the Agreement, the other
Parties shall execute and deliver all such instruments and assurances and do all
things reasonably necessary and proper to carry out the terms of this Agreement.
17.16 RUS Approval. OPC shall use its best reasonable efforts to
obtain RUS approval of this Agreement.
17.17 Other. MS agrees that if at any time during the Term it is asked
to supply Electric Energy to any OPC member cooperative (other than indirectly
as contemplated herein, including supplies to Customer Choice Customers under
Section 2.5) then MS shall either (i) decline to supply such Electric Energy or
(ii) offer to supply such Electric Energy through OPC or its designee.
30
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this 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 L. Nash
------------------------------------------ --------------------------
T. D. Kilgore Patricia L. Nash
Title: President and Chief Executive Officer Title: Assistant Secretary
MORGAN STANLEY CAPITAL GROUP INC.
By: /s/ Neal A. Shear Attest: /s/ Simon T. W. Greenshields
---------------------------------------- ---------------------------
Neal A. Shear Simon T. W. Greenshields
Title: President Title: Vice President
31
<PAGE>
SCHEDULE A
Definitions
"Administrator" means the Administrator of RUS.
"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.
"Aggregate OPC Load" shall mean the sum of the Minimum OPC Obligation and
the Incremental Quantity, if any.
"Assignment for Security" has the meaning specified in Section 17.1.2.
"Available Contract Resource" means any Contract Resource that OPC has not
designated in accordance with the provisions of Sections 2.3 and 2.4 to be an
Unavailable Contract Resource.
"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 thirty (30) days after such filing, (iii) otherwise becomes
bankrupt or insolvent (however evidenced), (iv) is unable (or admits in writing
its inability) generally to pay its debts as they fall due, (v) is dissolved
(other than pursuant to a consolidation, acquisition, amalgamation or merger),
(vi) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, acquisition, amalgamation
or merger), (vii) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for all or substantially all of its assets, (viii) has
a secured party take possession of all or substantially all of its assets or has
a distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all of its assets and such
secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within thirty (30) days
thereafter, (ix) causes or is subject to any event with respect to which, under
the applicable laws of any jurisdiction, has an analogous effect to any of the
events specified in clauses (i) to (viii) (inclusive); or (x) takes any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the foregoing acts.
"Big Rivers" means the Contract Resource of that name having the pricing
characteristics and constraints set forth in Exhibit 3.1, which is generally
modeled on power purchase agreements between OPC and Big Rivers Electric
Corporation, dated as of July 19, 1989, December 17, 1990, and March 12, 1992.
32
<PAGE>
"Block Power Sale Agreement" means Power Sale Agreement dated as of
November 11, 1990, between Georgia Power Company and OPC.
"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 either MS or OPC, as the case may be, when it is the Party
who is obligated to purchase and receive, or cause to be received, Electric
Energy in connection with a sale hereunder.
"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" shall have the meaning set forth in Section 6.1.
"Computer Tapes" has the meaning specified in Section 7.3.
"Confidential Information" means this Agreement and any other 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 party (who or which is not an Affiliate of one of the
Parties) 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.
"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 Nominated or
Scheduled pursuant to this Agreement.
"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 this Agreement.
"Contract Resource" means the capacity entitlement or other rights as
defined in Exhibit 3.1 under which MS (or, with respect to the AEC Resource,
OPC) has the right to Nominate Electric Energy during the Term, [ ]*
- ------------------------
* 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.
33
<PAGE>
"Contract Resource Constraint" means, with respect to a particular Contract
Resource, a specified operating characteristic, requirement, or constraint,
including heat rate, capacity, minimum down time, or scheduled maintenance,
[ ]*. All the Resource Constraints applicable to each Contract Resource
are set forth in Exhibit 3.1.
"Contract Year" means the twelve month period beginning April 1 of the
Contract Year, except that Contract Year 1997 shall extend for eleven months
beginning May 1, 1997 (with appropriate adjustments during 1997 of quantities
stated in this Agreement as yearly (twelve-month) numbers to reflect eleven
months for the first Contract Year).
"Control Area" means an electric power system or combination of electric
power systems to which a common automatic generation control scheme is applied.
"CPR" has the meaning specified in Section 14.1(d).
"CPT" means Central Prevailing Time and refers to the time in effect in the
Central Time Zone of the United States, whether Central Standard Time or Central
Daylight Savings Time.
"Credit Assurances" means a letter of credit, third-party guarantee,
collateral or other form of credit support which the Party entitled to request
such financial assurances determines to be satisfactory in its sole discretion;
provided, that the amount of Credit Assurances that may be required shall be
commercially reasonable and shall not exceed the amount that would be due to the
Unaffected Party under Section 13.2.1 in the event of a default, as reasonably
determined by the Unaffected Party.
"CSA" means that certain Coordination Services Agreement between Georgia
Power Company and Oglethorpe Power Corporation (An Electric Membership
Generation and Transmission Corporation), dated as of November 12, 1990, as
amended from time to time.
"Customer Choice Customer" means a retail customer or prospective customer
of an EMC Customer which has a choice of supplier under Georgia law as defined
under the Georgia Territorial Electric Services Act, as in effect on the
Effective Date and exclusive of any subsequent changes or amendments, but shall
not include any such retail customer whose requirements are served by an EMC
Customer as a part of homogenous load.
"Customer Choice Load" means the Electric Energy requirements of Customer
Choice Customers.
"Customer Choice Price" means the price applicable to a particular Customer
Choice Load, as established by the Parties pursuant to Section 2.5.
"Defaulting Party" has the meaning specified Section 13.1.
"Delivery Point" means, as specified by MS, either Level B-1 or a Point of
Interconnection.
- -----------------------
* 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.
34
<PAGE>
"Dispatchable Contract Resources" means the Contract Resources that are so
designated in Exhibit 2.2.
"Early Termination Date" has the meaning specified in Section 13.2.
"Effective Date" has the meaning specified in Section 6.1.
"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.
"EMC Contract" means one of those certain Amended and Restated Wholesale
Power Contracts between OPC and an EMC, which contract is dated as of August 1,
1996, as restated and/or amended from time to time.
"EMC Customer" means an electric corporation that is a member of OPC and
which is not a Non-Participating Member. EMC Customers are listed in
Exhibit 1.62.
"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" with respect to the OPC Energy in question shall be as
defined in Section 5.1.
"Entergy" means the Contract Resource of that name having the pricing
characteristics and constraints set forth in Exhibit 3.1, which is generally
modeled on a power purchase agreement between OPC and Entergy Corporation, dated
as of October 11, 1990, and April 23, 1992, as amended September 29, 1992 and
February 25, 1993, respectively.
"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 13.1.
"FERC" means the Federal Energy Regulatory Commission or any successor
agency which enforces the Federal Power Act, as amended from time to time.
"Force Majeure" means an event 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 in a
35
<PAGE>
commercially reasonable manner or obtain or cause to be obtained a commercially
reasonable substitute performance therefor. Force Majeure includes, but is not
restricted to: [ ]*
"FPC" means the Contract Resource of that name having the pricing
characteristics and constraints set forth in Exhibit 3.1, which is generally
modeled on a power purchase agreement between OPC and Florida Power Corporation,
dated January 26, 1994.
"Government" means the United States Government.
"GPC" means Georgia Power Company.
"GSOC" means Georgia System Operations Corporation, a non-profit
corporation organized under the laws of the State of Georgia, or any successor
thereto.
"GTC" means Georgia Transmission Corporation, an electric membership
corporation organized and existing under Title 46 of the Official Code of
Georgia Annotated, or any successor thereto.
"Hartwell Resource" means the Contract Resource of that name having the
pricing characteristics and constraints set forth in Exhibit 3.1, which is
generally modeled upon Plant Hartwell.
"Impasse Notice" has the meaning specified in Section 14.1(b).
"Incremental Quantity" means the quantity of Electric Energy supplied by MS
under this Agreement (excluding Customer Choice Load), which is in excess of the
Minimum OPC Obligation.
"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.
"Interface Capability" means, with respect to any Interface Delivery Point
at any time, the amount of Electric Energy that GTC has the right to cause to be
transferred from the ITS to the transmission system of an interconnected utility
or transferred from the transmission system of an interconnected utility to the
ITS, in each case as determined in accordance with the ITSA.
"Interface Delivery Point" means a Delivery Point that is a Point of
Interconnection listed on Exhibit 4.1(c).
"Interruptible Load" means any load that can be interrupted in a power
control center.
- ------------------------
* 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.
36
<PAGE>
"Interval" has the meaning set forth in Section 2.1(a).
"Intraday" means occurring within the 24-hour period beginning with the
start of the first Interval of a Day, which begins at 11:00 p.m. EPT of the
prior calendar day, as set forth in Section 2.1(a).
"ITS" means the Integrated Transmission System as described more fully in
the ITSA.
"ITS Loss Factor" means the EMC transmission loss factor determined from
time to time 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% with respect to Electric Energy delivered for OPC Load or
3.00% with respect to all other Electric Energy.
"ITSA" means the Revised and Restated Integrated Transmission System
Agreement between Oglethorpe Power Corporation (An Electric Membership
Generation and 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.
"Level B-1" means the high side of the step-up transformer of a generating
plant that is an Contract Resource, or other input to the transmission system
(other than Points of Interconnection), either of which interconnects directly
into the ITS. Exhibit 1.43 illustrates Level B-1.
"LPM" means LG&E Power Marketing Inc.
"Members" means all the EMC members of OPC.
"Minimum OPC Obligation" for any particular Interval, shall be the amount
of Electric Energy, as set forth for such Interval in Exhibit 2.1(a) [ ]*,
which OPC is obligated to take and pay for, or pay for if available whether
taken or not.
"MS" means Morgan Stanley Capital Group Inc., or any successor thereto.
"MS Sales Price" means, with respect to each EMC Customer, the price for
Electric Energy set forth for the applicable period in Exhibit 5.3.
"MS Schedule" means the complete schedule of supply sources Nominated by MS
from Contract Resources or other sources available to MS for each of the
Intervals in a succeeding day [ ]* on the day such schedule is submitted.
- ------------------------
* 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.
37
<PAGE>
"MS's Share of OPC Load" means the portion of OPC Load that MS is entitled
to serve under this Agreement and any agreement to serve Customer Choice Load.
"Must Run Contract Resources" means the Contract Resources that are so
designated in Exhibit 2.2.
"MWh" means megawatt-hour.
"Negotiation Period" has the meaning specified in Section 14.1(b).
"NERC" means the North American Electric Reliability Council.
"Nominate" or "Nominated" means that MS has notified or notifies OPC of
specified amounts of Electric Energy that MS desires to purchase, sell or both
based on designated Contract Resources during specified Intervals during the
Term in accordance with Section 2.3; provided, that any such Nomination must be
consistent with the terms of this Agreement, the characteristics of the Contract
Resources as specified in Exhibit 3.1, and the Administrative Procedures.
"Non-Defaulting Party" has the meaning specified in Section 13.2.
"Non-Participating Member" means any of the EMCs listed in Exhibit 17.17.
"Non-Peak Season" means, for any calendar year, the remaining period of the
calendar year not included within the Peak Season.
"NTCDO" or "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 nonterritorial entity, as further defined in the ITSA.
"Notifying Party" has the meaning specified in Section 13.1.1.
"OASIS" means Open Access Same-Time Information System, the information
system and standards of conduct contained in Part 37 of the FERC's regulations
(18 C.F.R. Part 37), as amended from time to time.
"Offsystem Contract Resources" means one or more of Big Rivers, Entergy and
FPC.
"OPC Contracts" means, as of a particular date, all EMC Contracts, the CSA,
the ITSA, other 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 Contract
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 plants or contracts on which
Contract Resources are modeled.
38
<PAGE>
"OPC Load" means, as of a particular Interval, the entire Electric Energy
requirements (including the requirements of any retail customer with a choice of
supplier under applicable Law, which customer is being served by an EMC Customer
as of the Effective Date) of OPC (including requirements for its offices,
station service, and off-system sales to third parties) and the EMC Customers
listed in Exhibit 1.62, measured at each EMC Metering Point [ ]*
"OPC Restructuring" means the transaction by which OPC restructured to
divide its business and assets into three specialized companies and, among other
things, place its transmission assets into GTC.
"Operational Deficiency Penalty" shall have the meaning specified in
Section 2.7(c).
"Other Power Marketer" means the Power Marketer other than MS, i.e., LPM or
its successor(s).
"Other Records" has the meaning specified in Section 7.3.
"Party" means OPC or MS, as applicable, including permitted assignees of
each pursuant to this Agreement.
[ ]*
"Plant Hartwell" means simple cycle gas turbine Units 1 and 2, as described
in the power purchase agreement between OPC and Hartwell Energy Limited
Partnership, which is the generating unit underlying the Hartwell Contract
Resource.
"Plant Hatch" means the Edwin I. Hatch Nuclear Plant, consisting of two
nuclear generating facilities (and associated common facilities) having a
current name plate capacity of 810 MW for Unit 1 and 820 MW for Unit 2, but
shall not include the planned uprate as approved by OPC on November 11, 1996.
"Plant Scherer" means the Robert W. Scherer Plant, consisting of two coal
generating facilities (and associated common facilities) having a current total
name plate capacity (including interests of all owners) of 818 MW for Unit 1 and
818 MW for Unit 2.
"Plant Vogtle" means the Alvin W. Vogtle Nuclear Plant, consisting of two
nuclear generating facilities (and associated common facilities) having a
current total name plate capacity (including interests of all owners) of 1160 MW
for Unit 1 and 1160 MW for Unit 2.
"Plant Wansley" means the Hal B. Wansley Plant, consisting of two coal
generating facilities (and associated common facilities) having a current total
name plate capacity (including interests of all owners) of 865 MW for Unit 1 and
865 MW for Unit 2.
- ------------------------
* 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.
39
<PAGE>
"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 4.1. In the case of imports to the ITS, the Point of Interconnection
will be to and through the interface; in the case of exports from the ITS, the
Point of Interconnection will be to and through the interface.
"Power Marketer" means a third party who is authorized by the FERC to sell
Electric Energy at market-based, negotiated rates, and with whom OPC has
contracted as of the Effective Date on a long-term basis for the purchase of
Electric Energy required to supply all or a portion of OPC Load not supplied
under this Agreement.
"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.
"Prudent Utility Practice" means any of the practices, methods and acts
engaged in or approved by a significant portion of the electric industry during
the relevant time period, or any of the practices, methods and acts that, in the
exercise of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired result at
lowest reasonable cost consistent with good business practices, reliability,
safety, and expedition. Prudent Utility Practice is not intended to be limited
to the optimum practice, method or act, to the exclusion of all others, but
rather to include a spectrum of possible practices, methods, or acts generally
acceptable in the region in light of the circumstances.
"Qualifying Facility" means a facility as defined in Section 210 of the
Public Utilities Regulatory Policy Act of 1978, as amended, and applicable FERC
regulations promulgated thereunder.
"Regulatory Approvals" means all current and future valid and applicable
orders, approvals, consents, authorizations, permits or certificates issued by
any courts or regulatory bodies (state or federal) having jurisdiction over a
Party, this Agreement, or the performance hereof.
"Replacement Price" has the meaning specified in Section 2.6(a).
"Representatives" has the meaning specified in Section 7.1.
"Rocky Mountain" means the Rocky Mountain Pumped Storage Hydroelectric
Generating Facility.
"RUS" means the Rural Utilities Service of the United States Department of
Agriculture.
"Sales Price" has the meaning specified in Section 2.6(b).
"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
40
<PAGE>
notifying, requesting and confirming to each other the quantity of Electric
Energy to be delivered in each Interval on any given day or days at a specified
Delivery Point.
"Seller" means either MS or OPC, as the case may be, when it is the Party
who is obligated to sell and deliver, or cause to be delivered, Electric Energy.
"SEPA" means the Southeastern Power Administration, a federal agency of the
United States Government, or any successor.
"SEPA Contracts" means those certain power purchase and sale agreements
between each EMC and SEPA pursuant to which each EMC Customer purchases Electric
Energy from SEPA.
"SEPA Energy" means the aggregate amount of Electric Energy Scheduled for
delivery to the EMC Customers pursuant to the SEPA Contracts.
"SEPA Energy Allocation Schedule" shall have the meaning specified in
Section 3.10.
"SERC" means the Southeastern Electric Reliability Council or any
successor.
"Statement" has the meaning specified in Section 8.1.
"Supply" has the meaning specified in Section 2.1(a).
"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 Article 6.
"Termination Date" has the meaning specified in Article 6.
"Transaction" has the meaning specified in Section 13.2.1.
"Transmission Provider" means the entity or entities transmitting Electric
Energy on behalf of Seller or Buyer to or from the Delivery Point(s) in
connection with a particular purchase or sale.
"Unavailable Contract Resource" means any Contract Resource that OPC has
designated in accordance with the provisions of Sections 2.3 and 2.4 as not
available to MS during a particular Interval for the purchase or delivery of
Electric Energy under this Agreement.
"Wansley Coal" means the two coal generating facilities located at Plant
Wansley.
"Wansley CT" means the gas-fired combustion turbine located at Plant
Wansley.
41
<PAGE>
EXHIBIT 1.43
Exhibit 1.43
Page 1 of 1
Level B-1 Diagram
[Chart]
<PAGE>
EXHIBIT 1.62
Exhibit 1.62
Page 1 of 1
Electric Membership Corporations
EMC Customer Participants
<TABLE>
<CAPTION>
EMC NAME PARTICIPANT TERM
- ----------------------------------------------- ------------- --------------------------------
<S> <C> <C>
ALTAMAHA EMC................................... Yes 8 years
AMICALOLA EMC.................................. Yes 8 years
CANOOCHEE EMC.................................. Yes 8 years
CARROLL EMC.................................... Yes 8 years
CENTRAL GEORGIA EMC............................ Yes 50% years (1-5) 25% years (6-8)
COASTAL EMC.................................... Yes 8 years
COBB EMC....................................... Yes 8 years
COLQUITT EMC................................... Yes 8years
COWETA-FAYETTE EMC............................. Yes 7 years
EXCELSIOR EMC.................................. Yes 8 years
FLINT EMC...................................... Yes 8 years
GRADY EMC...................................... Yes 50% years (1-4) 25% years (5-6)
GREYSTONE POWER CORPORATION, AN EMC............ Yes 8 years
HABERSHAM EMC.................................. Yes 8 years
HART EMC....................................... Yes 8 years
IRWIN EMC...................................... Yes 8 years
JACKSON EMC.................................... Yes 8 years
JEFFERSON EMC.................................. Yes 8 years
LAMAR EMC...................................... Yes 8 years
LITTLE OCMULGEE EMC............................ Yes 8 years
MIDDLE GEORGIA EMC............................. Yes 8 years
MITCHELL EMC................................... Yes 50% years (1-4) 25% years (5-6)
OCMULGEE EMC................................... Yes 8 years
OCONEE EMC..................................... Yes 8 years
OKEFENOKE RURAL EMC............................ Yes 8 years
PATAULA EMC.................................... Yes 8 years
PLANTERS EMC................................... Yes 8 years
RAYLE EMC...................................... Yes 8 years
SATILLA RURAL EMC.............................. Yes 8 years
SAWNEE EMC..................................... Yes 6 years
SLASH PINE EMC................................. Yes 8 years
SNAPPING SHOALS EMC............................ Yes 8 years
SUMTER EMC..................................... Yes 8 years
THREE NOTCH EMC................................ Yes 50% years (1-4) 25% years (5-6)
TRI-COUNTY EMC................................. Yes 8 years
TROUP EMC...................................... Yes 8 years
UPSON COUNTY EMC............................... Yes 8 years
WALTON EMC..................................... Yes 8 years
WASHINGTON EMC................................. Yes 8 years
STERLING....................................... Yes 3 years
</TABLE>
Percentages are based on Total Member System Load
Percentages are 50% unless otherwise noted
Note that years indicated refer to Contract Year, not calendar years
<PAGE>
Exhibit 2.1(a) Exhibit 2.1(a)
1 of 1
TOTAL OPC
Minimum OPC Obligations and Intervals
(Prior to Deduction of SEPA Energy Allocation)
<TABLE>
<CAPTION>
MINIMUM ENERGY TAKE PER BLOCK (MWH)
----------------------------------------------------------------
MONTH BLOCK 1 BLOCK 2 BLOCK 3 BLOCK 4 BLOCK 5 BLOCK 6
- ------------ --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Start....... he00h00 he04h00 he08h00 he12h00 he16h00 he20h00
End......... he00300 he07h00 he11h00 he15h00 he19h00 he2300
<CAPTION>
RATE OF DELIVERY (MWH PER HOUR)
----------------------------------------------------------------
MONTH BLOCK 1 BLOCK 2 BLOCK 3 BLOCK 4 BLOCK 5 BLOCK 6
- ----------- --------- --------- -------- --------- --------- ---------
<C> <C> <C> <C> <C> <C> <C>
Start...... he00h00 he04h00 he08h00 he12h00 he16h00 he20h00
End........ he00300 he07h00 he11h00 he15h00 he19h00 he2300
</TABLE>
[ 1 full page of omitted text ]*
- -----------------------
* 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 2.1b
Exhibit 2.1b
Page 1 of 1
SEPA Allocation by EMC
<TABLE>
<S> <C>
ALTAMAHA EMC........................................................ 1.7751%
AMICALOLA EMC....................................................... 1.8830%
CANOOCHEE EMC....................................................... 1.5114%
CARROLL EMC......................................................... 2.7764%
CENTRAL GEORGIA EMC................................................. 2.1481%
COASTAL EMC......................................................... 0.5013%
COBB EMC............................................................ 6.1940%
COLQUITT EMC........................................................ 6.3032%
COWETA-FAYETTE EMC.................................................. 2.1214%
EXCELSIOR EMC....................................................... 1.4484%
FLINT EMC........................................................... 9.1362%
GRADY EMC........................................................... 1.7130%
GREYSTONE POWER CORPORATION, AN EMC................................. 5.0254%
HABERSHAM EMC....................................................... 1.6654%
HART EMC............................................................ 3.0815%
IRWIN EMC........................................................... 1.3618%
JACKSON EMC......................................................... 7.8149%
JEFFERSON EMC....................................................... 2.2603%
LAMAR EMC........................................................... 1.1017%
LITTLE OCMULGEE EMC................................................. 1.2876%
MIDDLE GEORGIA EMC.................................................. 0.9900%
MITCHELL EMC........................................................ 2.9555%
OCMULGEE EMC........................................................ 1.3503%
OCONEE EMC.......................................................... 1.2995%
OKEFENOKE RURAL EMC................................................. 1.5477%
PATAULA EMC......................................................... 0.5312%
PLANTERS EMC........................................................ 1.6832%
RAYLE EMC........................................................... 1.7021%
SATILLA RURAL EMC................................................... 4.9836%
SAWNEE EMC.......................................................... 3.1356%
SLASH PINE EMC...................................................... 0.7851%
SNAPPING SHOALS EMC................................................. 3.1806%
SUMTER EMC.......................................................... 1.8488%
THREE NOTCH EMC..................................................... 1.9896%
TRI-COUNTY EMC...................................................... 1.0197%
TROUP EMC........................................................... 1.9222%
UPSON COUNTY EMC.................................................... 0.7476%
WALTON EMC.......................................................... 4.8946%
WASHINGTON EMC...................................................... 2.3232%
</TABLE>
<PAGE>
Exhibit 2.1(c) Exhibit 2.1(c)
[ ] 1 of 41
Minimum OPC Obligations and Intervals
(Net of Morgan Stanley's Initial Forecast SEPA Energy Allocation)
<TABLE>
<CAPTION>
MINIMUM ENERGY TAKE PER BLOCK (MWH)
----------------------------------------------------------------
MONTH BLOCK 1 BLOCK 2 BLOCK 3 BLOCK 4 BLOCK 5 BLOCK 6
- ------------ --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Start....... he00h00 he04h00 he08h00 he12h00 he16h00 he20h00
End......... he00300 he07h00 he11h00 he15h00 he19h00 he2300
<CAPTION>
RATE OF DELIVERY (MWH PER HOUR)
---------------------------------------------------------------
MONTH BLOCK 1 BLOCK 2 BLOCK 3 BLOCK 4 BLOCK 5 BLOCK 6
- ------------ --------- --------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Start....... he00h00 he04h00 he08h00 he12h00 he16h00 he20h00
End......... he00300 he07h00 he11h00 he15h00 he19h00 he2300
</TABLE>
[ 41 pages of omitted text ]*
- ---------------------
*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 2.2
Exhibit 2.2
Page 1 of 1
Dispatchable and Must Run
Contract Resources
DISPATCHABLE RESOURCES
- ----------------------
Rocky Mountain Unit #1
Rocky Mountain Unit #2
Rocky Mountain Unit #3
Scherer Unit #1
Scherer Unit #2
Wansley Unit #1
Wansley Unit #2
Wansley CT
GPC Block #1
GPC Block #2
GPC Block #4
GPC Block #5
GPC Block #6
Big Rivers LT Power Purchase Agreement
Entergy LT Power Purchase Agreement
Hartwell Unit #1
Hartwell Unit #2
Florida Power Corporation Power Purchase Agreement
MUST RUN RESOURCES
- ------------------
Hatch Unit #1
Hatch Unit #2
Vogtle Unit #1
Vogtle Unit #2
Harrison Unite #1
Harrison Unit #2
QF's (Southwire, Herschel Webster, Georgia Waste Systems, Inc., Southeast
Paper Manufacturing Co., Spartan Mills)
<PAGE>
Exhibit 2.5(c)
[ ]*
- ------------------------
* 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 3.1
Exhibit 3.1
Page 1 of 23
Contract Resources and Constraints
[ ]*
Characteristics & Constrants
[ 23 pages of omitted text ]*
- ---------------------------
* 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 3.6
Exhibit 3.6
Page 1 of 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>
2 pages
EXHIBIT 3.11
INTRADAY SETTLEMENT EXAMPLE
The intraday settlement process involves settlement of individual EMC
purchases above and below their respective shares of the aggregate quantities
sold and delivered by OPC for each hour and interval. It is anticipated that
the process should follow these steps:
[ 1.5 pages of omitted text ]*
- -----------------------
* 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 4.1
Exhibit 4.1
Page 1 of 1
POINTS OF INTERCONNECTION
Alabama Electric Cooperative
Florida Power Corporation
Florida Power and Light Company
Duke Power Company
Georgia ITS Members
Jacksonville Electric Authority
South Carolina Electric and Gas Company
South Carolina Public Service Authority
Southern Companies
Tallahassee Electric Department
Tennessee Valley Authority
<PAGE>
Exhibit 4.1(c)
Exhibit 4.1(c)
Page 1 of 1
INTERFACE DELIVERY POINTS
Alabama Electric Cooperative
Florida Power Corporation
Florida Power and Light Company
Duke Power Company
Jacksonville Electric Authority
South Carolina Electric and Gas Company
South Carolina Public Service Authority
Southern Companies
Tallahassee Electric Department
Tennessee Valley Authority
<PAGE>
Exhibit 4.11(a)
Exhibit 4.11(a)
Page 1 of 4
OPC Allocation of
First Contingency Total Transfer Capability (FCTTC)
Under Normal Operating Conditions
1997 Planning Values for Imports
Effective January 1997
FCTTC (MW)
INTERFACE WITH GEORGIA ITS TO GEORGIA ITS
<TABLE>
<CAPTION>
JAN-FEB MAR-MAY JUN-SEP OCT-NOV DEC
----------- ------------- ----------- ----------- ---
<S> <C> <C> <C> <C> <C>
Florida.................................................... 581 442 442 442 581
Alabama Power.............................................. 690 690 *690 *690 *690
Duke Power................................................. 444 517 346 517 463
SC Public Service Authority................................ 44 67 61 67 58
SC Electric and Gas........................................ 133 133 133 133 133
Savannah Power............................................. 49 49 *49 *49 *49
Gulf Power................................................. 163 163 *163 *163 *163
Tennessee Valley Authority................................. 304 194 250 194 223
Purchase from GPC......................................... 70 70 70 70 70
--- --- --- --- ---
Total..................................................... 374 264 320 264 293
Alabama Electric Cooperative............................... 20 20 20 20 20
</TABLE>
This exhibit only reflects the current allocation of FCTTC and does not
reflect future sales, purchases, construction of future or retirement of
existing facilities. Additionally, this exhibit does not reflect firm
transactions, Transmission Reliability Margins, or operational constraints,
which can be significant at times.
*These values have not been calculated for these time periods and are subject
to change.
All values are subject to change due to VAST and VST study results.
<PAGE>
Exhibit 4.11(a)
Exhibit 4.11(a)
Page 2 of 4
OPC Allocation of
First Contingency Total Transfer Capability (FCTTC)
Under Normal Operating Conditions
1997 Planning Values for Exports
Effective January 1997
FCTTC (MW)
Interface with Georgia ITS From Georgia ITS
<TABLE>
<CAPTION>
JAN-FEB MAR-MAY JUN-SEP OCT-NOV DEC
----------- ------------- ----------- ----------- ---
<S> <C> <C> <C> <C> <C>
Florida........................................................... 837 837 837 837 837
Sale to GPC...................................................... 61 61 61 61 61
--- --- --- --- ---
Total............................................................ 776 776 776 776 776
Alabama Power..................................................... 282 282 *282 *282 *282
Duke Power........................................................ 678 154 263 154 410
SC Public Service Authority....................................... 35 23 50 23 60
SC Electric and Gas............................................... 228 0 228 0 190
Savannah Power.................................................... 4 4 *4 *4 *4
Gulf Power........................................................ 30 30 *30 *30 *30
Tennessee Valley Authority........................................ 298 314 302 314 310
Alabama Electric Cooperative...................................... 48 48 48 48 48
</TABLE>
This exhibit only reflects the current allocation of FCTTC and does not
reflect future sales, purchases, construction of future or retirement of
existing facilities. Additionally, this exhibit does not reflect firm
transactions, Transmission Reliability Margins, or operational constraints,
which can be significant at times.
*These values have not been calculated for these time periods and are subject
to change.
All values are subject to change due to VAST and VST study results.
<PAGE>
Exhibit 4.11(a)
Exhibit 4.11(a)
Page 3 of 4
GTC's Current Interface Capability
Under Normal Operating Conditions
1997 Planning Values for Imports
Effective January 1997
Capability (MW)
Interface with Georgia ITS To Georgia ITS
<TABLE>
<CAPTION>
JAN-FEB MAR-MAY JUN-SEP OCT-NOV DEC
----------- ------------- ----------- ----------- ---
<S> <C> <C> <C> <C> <C>
Florida........................................................... 546 407 357 357 496
Alabama Power..................................................... 640 640 *640 *640 *640
Duke Power........................................................ 373 446 276 446 393
SC Public Service Authority....................................... 44 67 61 67 58
SC Electric and Gas............................................... 133 133 133 133 133
Savannah Power.................................................... 49 49 *49 *49 *49
Gulf Power........................................................ 163 163 *163 *163 *163
Tennessee Valley Authority........................................ 195 85 142 85 114
Alabama Electric Cooperative...................................... 20 20 20 20 20
</TABLE>
This exhibit only reflects the current allocation of FCTTC and does not
reflect future sales, purchases, construction of future or retirement of
existing facilities. Additionally, this exhibit does not reflect operational
constraints which can be significant at times.
*These values have not been calculated for these time periods and are subject
to change.
All values are subject to change due to VAST and VST study results.
<PAGE>
Exhibit 4.11(a)
Exhibit 4.11(a)
Page 4 of 4
GTC's Current Interface Capability
Under Normal Operating Conditions
1997 Planning Values for Exports
Effective January 1997
Capability (MW)
Interface with Georgia ITS From Georgia ITS
<TABLE>
<CAPTION>
JAN-FEB MAR-MAY JUN-SEP OCT-NOV DEC
----------- ------------- ----------- ----------- ---
<S> <C> <C> <C> <C> <C>
Florida........................................................... 751 751 751 751 751
Alabama Power..................................................... 282 282 *282 *282 *282
Duke Power........................................................ 678 154 263 154 410
SC Public Service Authority....................................... 35 23 50 23 60
SC Electric and Gas............................................... 228 0 228 0 190
Savannah Power.................................................... 4 4 *4 *4 *4
Gulf Power........................................................ 30 30 *30 *30 *30
Tennessee Valley Authority........................................ 298 314 302 314 310
Alabama Electric Cooperative...................................... 48 48 48 48 48
</TABLE>
This exhibit only reflects the current allocation of FCTTC and does not
reflect future sales, purchases, construction of future or retirement of
existing facilities. Additionally, this exhibit does not reflect operational
constraints which can be significant at times.
*These values have not been calculated for these time periods and are subject
to change.
All values are subject to change due to VAST and VST study results.
<PAGE>
EXHIBIT 4.11(b)
Exhibit 4.11(b)
Page 1 of 1
Morgan Stanley
Interface Percentage Limits
1997 [ ]*
1998 [ ]*
1999 [ ]*
2000 [ ]*
2001 [ ]*
2002 [ ]*
2003 [ ]*
2004 [ ]*
NOTE THAT YEARS INDICATED REFER TO CONTRACT YEAR, NOT CALENDAR YEARS
- ------------------------
* 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 5.3
Exhibit 5.3
Page 1 of 1
MS Sales Price
($/MWh)
<TABLE>
<CAPTION>
YEAR BEGINNING
-------------------------------------------------------------------------------------------
MAY 97
MAR-98 APR-98 APR-99 APR-00 APR-01 APR-03 APR-04
------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
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 EMC [ ]*
Walton EMC [ ]*
Washington EMC [ ]*
Sterling [ ]*
</TABLE>
- ---------------------------
* 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 11.3
FORM OF GUARANTEE
[DATE]
To: Oglethorpe Power Corporation
2100 East Exchange Place
Tucker, Georgia 30085-1349
Ladies and Gentlemen:
In consideration of that certain POWER PURCHASE AND SALE AGREEMENT BETWEEN
MORGAN STANLEY CAPITAL GROUP INC. AND OGLETHORPE POWER CORPORATION (AN
ELECTRIC MEMBERSHIP CORPORATION) dated as of April , 1997 by and
between Morgan Stanley Capital Group Inc. (Hereinafter "MSCGI") and
OGLETHORPE POWER CORPORATION (hereinafter "OPC" or "Counterparty")
(hereinafter the "Agreement"), Morgan Stanley Group Inc., a Delaware
corporation (together with its permitted successors, assignees and delegees,
including Surviving Entities of Permitted mergers (as such terms are defined
below), "GUARANTOR"), hereby irrevocably and unconditionally guarantees to
Counterparty, with effect from the date of the Agreement, the due and
punctual payment of all amounts payable by MSCGI under the Agreement when the
same shall become due and payable, whether on scheduled payment dates, upon
demand, upon declaration of termination or otherwise, in accordance with the
terms of the Agreement and giving effect to any applicable grace period. Upon
failure of MSCGI punctually to pay any such amounts, and upon written demand
by Counterparty to GUARANTOR at its address set forth in the signature block
of this Guarantee (or to such other address as GUARANTOR may specify in
writing), GUARANTOR agrees to pay or cause to be paid such amounts; provided
that delay by Counterparty in giving such demand shall in no event affect
GUARANTOR's obligations under this Guarantee.
GUARANTOR hereby agrees that its obligations hereunder shall be unconditional
and will not be discharged except by complete payment of the amounts payable
under the Agreement, irrespective of any claim as to the Agreement's
validity, regularity or enforceability or the lack of authority of MSCGI to
execute or deliver the Agreement; or any change in or amendment to the
Agreement; or any waiver or consent by Counterparty with respect to any
provisions thereof; or the absence of any action to enforce the Agreement, or
the recovery of any judgment against MSCGI or of any action to enforce a
judgment against MSCGI under the Agreement; any similar circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor generally.
GUARANTOR hereby waives diligence, presentment, demand on MSCGI for payment
or otherwise (except as provided hereinabove), filing of claims, requirement
of a prior proceeding against MSCGI and protest or notice, except as provided
for in the Agreement with respect to
1
<PAGE>
amounts payable to MSCGI. If at any time payment under the Agreement is
rescinded or must be otherwise restored or returned by Counterparty upon the
insolvency, bankruptcy or reorganization of MSCGI or GUARANTOR or otherwise,
GUARANTOR's obligations hereunder with respect to such payment shall be
reinstated upon such restoration or return being made by Counterparty.
GUARANTOR represents to Counterparty as of the date hereof which
representations will be deemed to be repeated by GUARANTOR on each date on
which a Transaction is entered into, that:
1. it is duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has full power and legal right to
execute and deliver this Guarantee and to perform the provisions of this
Guarantee on its part to be performed;
2. its execution, delivery and performance of this Guarantee have been and
remain duly authorized by all necessary corporate action and do not
contravene any provision of its certificate of incorporation or bylaws or any
law, regulation or contractual restriction binding on it or its assets;
3. all consents, authorizations, approvals and clearances (including, without
limitation, any necessary exchange control approval) and notifications,
reports and registrations requisite for its due execution, delivery and
performance of this Guarantee have been obtained from or, as the case may be,
filed with the relevant governmental authorities having jurisdiction and
remain in full force and effect and all conditions thereof have been duly
complied with and no other action by, and no notice to or filing with, any
governmental authority having jurisdiction is required for such execution,
delivery or performance; and
4. this Guarantee is its legal, valid and binding obligation enforceable
against it in accordance with its terms except as enforcement hereof may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' right or by general equity
principles.
By accepting this Guarantee, and entering into this Agreement, Counterparty
agrees that GUARANTOR shall be subrogated to all rights of Counterparty
against MSCGI in respect of any amounts paid by GUARANTOR pursuant to this
Guarantee, provided that GUARANTOR shall be entitled to enforce or to receive
any payment arising out of or based upon such right of subrogation only to
the extent that it has paid all amounts payable by MSCGI under the Agreement.
This Guarantee shall terminate upon termination of the Agreement. Such
expiration or termination shall not, however, affect or reduce GUARANTOR's
obligation hereunder for any liability by MSCGI incurred under the Agreement.
2
<PAGE>
GUARANTOR and OPC agree as follows:
(a) This Guarantee shall be binding on, and shall inure to the
benefit of, GUARANTOR, OPC, MSCGI and their respective successors, assigns
and delegees (including Surviving Entities).
(b) Upon the occurrence of a Permitted Merger, then, automatically
(without any consent, notice or other act, all of which are expressly waived
hereby), (i) if the Original Entity (as defined below) at the time of such
Permitted Merger is not the Surviving Entity, the Agreement shall be amended
so as to substitute the Surviving Entity for the Original Entity and to
reflect accurately, in all provisions where such substitution shall occur,
the identity and characteristics of the Surviving Entity in its capacity as
GUARANTOR; and (ii) as so amended, this Guarantee shall continue in full
force and effect and shall be deemed in all respects ratified and confirmed,
with the Surviving Entity as the GUARANTOR hereunder.
(c) Anything in the Agreement to the contrary notwithstanding, no
Permitted Merger shall be deemed to breach, contravene or conflict with, or
to cause or require (or to permit, whether with notice, lapse of time or
both) the declaration of, a default, event of default, event of termination
or other similar condition or event (however described and whether or not
resulting in any amount becoming, or becoming capable at such time of being
declared, due and payable) in respect of the GUARANTOR, MSCGI or their
subsidiaries or affiliates under, or the termination or invalidation of, the
Agreement.
(d) To the extent that any provision in the Agreement is in any way
inconsistent with these subparagraphs (a) through (e), the provisions of
these subparagraphs (a) through (e) shall govern.
(e) As used herein, "Permitted Merger" means, at any time, any
consolidation or amalgamation of the entity that is then the GUARANTOR
hereunder (the "Original Entity") with, or any merger of the Original Entity
with or into, or any transfer by the Original Entity of all or substantially
all its assets to, another entity (the "Surviving Entity") at such time, but
in each case, only if (i) the Original Entity shall be the Surviving Entity
or (ii) the Surviving Entity shall assume (or shall have assumed) all the
obligations of the Original Entity under this Guarantee, whether by operation
of law, pursuant to an agreement or undertaking in favor of OPC or otherwise.
This Guarantee shall be governed by and construed in accordance with the laws
of the State of New York. All capitalized terms not otherwise defined herein
shall have the respective meanings assigned to them in the Agreement.
3
<PAGE>
MORGAN STANLEY GROUP INC.
By:
--------------------------------
Name:
Title:
Address:
Acknowledged and Agreed:
OGLETHORPE POWER CORPORATION
By:
--------------------------------
Name:
Title:
Address:
4
<PAGE>
EXHIBIT 16.2(a)
Assurance Request Date Amount
[ ]*
- -------------------------
* 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 17.2
Exhibit 17.2
Page 1 of 2
NOTICES, PAYMENT ADDRESSES AND WIRE TRANSFERS
Morgan Stanley Capital Group Inc.:
NOTICES AND CORRESPONDENCE
- --------------------------
Morgan Stanley & Company Incorporated
1585 Broadway
New York, New York 10036
Attn: John Woodley
Facsimile No.: 212-761-0292
Telephone No.: 212-761-5936
PAYMENTS
- --------
Morgan Stanley Capital Group Inc.
Bank: Northern Trust International, New York
Acct. No.: [ ]*
ABA No.: [ ]*
INVOICES
- --------
Morgan Stanley & Company Incorporated
1585 Broadway
New York, New York 10036
Attn: Dean Brier
- -------------------------
* 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 17.2
Exhibit 17.2
Page 2 of 2
NOTICES, PAYMENT ADDRESSES AND WIRE TRANSFERS
Oglethorpe Power Corporation:
NOTICES AND CORRESPONDENCE
- --------------------------
2100 East Exchange Place
P.O. Box 1349
Tucker, Georgia 30085-1349
Attn: Manager, System Control
Facsimile No.: 770-270-7663
Telephone No.: 770-270-7740
PAYMENTS
- --------
SunTrust Bank, Atlanta
ABA Routing No. [ ]*
Oglethorpe Power Corporation
Acct. No.: [ ]*
Confirmation: Oglethorpe Power Corporation
Samatha Cofield
770-270-7191
INVOICES
- --------
2100 East Exchange Place
P.O. Box 1349
Tucker, Georgia 30085-1349
Attn: John Sweeney
- -----------------------
* 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 17.14
Exhibit 17.14
Page 1 of 1
Electric Membership Corporations
Non-Participating Members
<TABLE>
<CAPTION>
EMC NAME NON-PARTICIPANT
- ------------------------------------------------------------------------------ -------------------
<S> <C>
ALTAMAHA EMC.................................................................. NO
AMICALOLA EMC................................................................. NO
CANOOCHEE EMC................................................................. NO
CARROLL EMC................................................................... NO
CENTRAL GEORGIA EMC........................................................... NO
COASTAL EMC................................................................... NO
COBB EMC...................................................................... NO
COLQUITT EMC.................................................................. NO
COWETA-FAYETTE EMC............................................................ NO
EXCELSIOR EMC................................................................. NO
FLINT EMC..................................................................... NO
GRADY EMC..................................................................... NO
GREYSTONE POWER CORPORATION, AN EMC........................................... NO
HABERSHAM EMC................................................................. NO
HART EMC...................................................................... NO
IRWIN EMC..................................................................... NO
JACKSON EMC................................................................... NO
JEFFERSON EMC................................................................. NO
LAMAR EMC..................................................................... NO
LITTLE OCMULGEE EMC........................................................... NO
MIDDLE GEORGIA EMC............................................................ NO
MITCHELL EMC.................................................................. NO
OCMULGEE EMC.................................................................. NO
OCONEE EMC.................................................................... NO
OKEFENOKE RURAL EMC........................................................... NO
PATAULA EMC................................................................... NO
PLANTERS EMC.................................................................. NO
RAYLE EMC..................................................................... NO
SATILLA RURAL EMC............................................................. NO
SAWNEE EMC.................................................................... NO
SLASH PINE EMC................................................................ NO
SNAPPING SHOALS EMC........................................................... NO
SUMTER EMC.................................................................... NO
THREE NOTCH EMC............................................................... NO
TRI-COUNTY EMC................................................................ NO
TROUP EMC..................................................................... NO
UPSON COUNTY EMC.............................................................. NO
WALTON EMC.................................................................... NO
WASHINGTON EMC................................................................ NO
</TABLE>
<PAGE>
Oglethorpe Power Corporation
2100 East Exchange Place
P.O. Box 1349
Tucker, GA 30085-1349
phone: 770-270-7600
fax: 770-270-7872
An Electric Membership Corporation
April 8, 1997
Morgan Stanley Capital Group Inc.
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
[
]*
Very truly yours,
Oglethorpe Power Corporation
By:
-----------------------
T. D. Kilgore
Title: President and Chief Executive
Officer
Accepted and Agreed this 8th day of April, 1997:
Morgan Stanley Capital Group Inc.
By:
-------------------------------
Neal A. Shear
Title: President
- -------------------
* 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>
Attachment 1
Member Minimum Obligation Pricing
($/MWh)
<TABLE>
<CAPTION>
YEAR BEGINNING
MAY-97- ---------------------------------------------------------------------------------
MAR-98 APR-98 APR-99 APR-00 APR-01 APR-02 APR-03 APR-04
--------------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cobb EMC [ ]*
Snapping Shoals EMC [ ]*
</TABLE>
- -------------------
* 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.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OGLETHOLPE
POWER CORPORATION'S CONDENSED BALANCE SHEET AS OF MARCH 31, 1997 AND RELATED
STATEMENTS OF REVENUES AND EXPENSES AND CASH FLOWS FOR THE PERIOD ENDED MARCH
31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK<F1>
<TOTAL-NET-UTILITY-PLANT> 3,679,055
<OTHER-PROPERTY-AND-INVEST> 196,381
<TOTAL-CURRENT-ASSETS> 346,638
<TOTAL-DEFERRED-CHARGES> 328,442
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,550,516
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 315,855
<TOTAL-COMMON-STOCKHOLDERS-EQ> 0
0
0
<LONG-TERM-DEBT-NET> 3,314,890
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 84,200
0
<CAPITAL-LEASE-OBLIGATIONS> 292,397
<LEASES-CURRENT> 4,674
<OTHER-ITEMS-CAPITAL-AND-LIAB> 538,500
<TOT-CAPITALIZATION-AND-LIAB> 4,550,516
<GROSS-OPERATING-REVENUE> 271,485
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 193,667
<TOTAL-OPERATING-EXPENSES> 193,667
<OPERATING-INCOME-LOSS> 77,818
<OTHER-INCOME-NET> 11,823
<INCOME-BEFORE-INTEREST-EXPEN> 89,641
<TOTAL-INTEREST-EXPENSE> 80,205
<NET-INCOME> 9,436
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 42,949
<CASH-FLOW-OPERATIONS> 100,698
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>$315,855 represents total retained patronage capital. The registrant
is a membership corporation and has no authorized or outstanding equity
securities.
</FN>
</TABLE>
