Nuclear Sale/Leaseback Power Supply Agreement (2006)Full Document 

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NUCLEAR SALE/LEASEBACK
POWER SUPPLY AGREEMENT

Between Ohio Edison Company and The Toledo Edison Company, Sellers
and
FirstEnergy Nuclear Generation Corp., Buyer

This Nuclear Sale/Leaseback Power Supply Agreement ("Agreement") dated October 14, 2005 is made by and between Ohio Edison Company and The Toledo Edison Company ("Sellers") and FirstEnergy Nuclear Generation Corp., ("FENGenco" or "Buyer"). The Sellers and FENGenco may be identified collectively as "Parties" or individually as a "Party." This Agreement is entered into in connection with the transfer of the ownership interest of The Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, and The Toledo Edison Company in the Beaver Valley Power Station, Davis-Besse Nuclear Power Station, and Perry Nuclear Power Plant (“Nuclear Generating Plants”) to FENGenco.

WHEREAS, Buyer is a newly formed, nuclear generation only company that intends to acquire the Nuclear Generating Plants owned by The Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, and The Toledo Edison Company (collectively "the FirstEnergy Operating Companies"); and

WHEREAS, Buyer will be a wholly owned subsidiary of FirstEnergy Corp; and

WHEREAS, Sellers lease portions of Beaver Valley Power Station Unit 2 and Perry Nuclear Power Plant (hereinafter “Leased Nuclear Generation Facilities”) from owner trustees under the Sale/Leaseback Arrangements; and

WHEREAS, FirstEnergy Nuclear Operating Company, an Affiliate of the Parties, operates the Leased Nuclear Generation Facilities; and

WHEREAS, Sellers wish to sell to Buyer the electrical output of the Leased Nuclear Generation Facilities; and

WHEREAS, Buyer is engaged exclusively in the business of owning and purchasing generation and selling Power at wholesale; and

WHEREAS, Buyer desires to obtain the entire electric output of the Leased Nuclear Generation Facilities pursuant to the rates, terms and conditions set forth herein.
 

Issued by: David M. Blank, Vice President
Effective Date:
Issued on: October 14, 2005
December 1, 2005
                                             
                                                       

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It is agreed as follows:

I.          TERM

A.
The sale and purchase of Power pursuant to this Agreement shall begin on December
1,2005, or such later effective date authorized by the FERC, for an initial term ending December 31, 2010. This Agreement shall remain in effect from year to year thereafter unless terminated by either Party upon at least sixty days written notice prior to the end of the calendar year.

B.     
Notwithstanding I.A, this Agreement will terminate if all of the Sale/Leaseback Arrangements for the Leased Nuclear Generation Facilities are terminated or assigned to FENGenco. Termination of the Agreement under this Section will be effective no sooner than the effective date of the termination or assignment of the Sale/Leaseback Arrangements. Buyer will give Sellers no less than sixty days written notice of the termination of this Agreement under this Section I.B. In the event of a partial termination or assignment of the Sale/Leaseback Arrangements, the Parties will amend this Agreement to reflect the revised rates, terms, and conditions for the sale of Power from the remaining Leased Nuclear Generation Facilities.

II.        SALE AND PURCHASE OF CAPACITY AND ENERGY

A.
Sellers shall provide to Buyer all of the Capacity, Energy, and Ancillary Services available from the Leased Nuclear Generation Facilities identified in Exhibit C to this Agreement, and Buyer shall purchase and pay for such Capacity, Energy, and Ancillary Services in accordance with the terms of this Agreement. Sellers shall make Capacity, Energy, and Ancillary Services available at the Delivery Points. Buyer shall arrange and will be responsible for all transmission, congestion costs, losses, and related services at and from the Delivery Points. The Capacity, Energy, and Ancillary Services supplied by Seller are collectively referred to as Buyer's "Power Supply Requirements". Capacity and Energy supplied shall be sixty-hertz, three phase alternating current. The Power Supply Requirements will be provided in accordance with Good Utility Practice, and where applicable, the provisions of the applicable Transmission Provider OATT, and the requirements of the NRC.

B.
Sellers shall cause the Leased Nuclear Generation Facilities to be operated and maintained in accordance with Good Utility Practice, the applicable requirements of the FERC, NRC and NERC, or successor Electric Reliability Organization, as well as the requirements of the regional reliability councils or Regional Entity, and Regional Transmission Organizations where the Leased Nuclear Generation Facilities are located. Sellers will enter into agreements with FirstEnergy Nuclear Operating Company, other FirstEnergy Affiliates, Transmission Provider, or Government Authority to ensure compliance with this Section II.B.

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III.       SCHEDULING AND SYSTEM PLANNING

A.
Sellers shall notify Buyer on or before November 1 of each year during the term of this Agreement of the amount of Capacity, Energy, and Ancillary Services it expects to have available from the Leased Nuclear Generation Facilities for each day in each month of the next calendar year. The information provided in this notification shall include, but not be limited to, the time and expected duration of any planned outage of the Leased Nuclear Generation Facilities.
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