FULL REQUIREMENTS SERVICE AGREEMENT
CONSTELLATION POWER SOURCE, INC.
BALTIMORE GAS AND ELECTRIC COMPANY
DATED JUNE 14, 2000
*** The asterisks on pages 5, 13, 23 and
portions of this exhibit have been omitted in reliance on Rule 24 b-2 of the
Securities Exchange Act of 1934. The confidential portions have been submitted
separately to the Securities and Exchange Commission.
TABLE OF CONTENTS
ARTICLE 1. Definitions 2
ARTICLE 2. Conditions Precedent; Effective Date; Term 6
ARTICLE 3. Supplier Responsibilities; Full Requirements Service 7
ARTICLE 4. Delivery Point; Transmission Service 9
ARTICLE 5. BGE Responsibilities 10
ARTICLE 6. Billing and Payment 11
ARTICLE 7. Price 13
ARTICLE 8. Events of Default; Remedies 14
ARTICLE 9. Credit Support 17
ARTICLE 10. Indemnification 19
ARTICLE 11. Limitation of Liability 19
ARTICLE 12. Force Majeure 20
ARTICLE 13. Representations and Warranties 21
ARTICLE 14. Miscellaneous 21
APPENDIX A SAMPLE PJM BILL
APPENDIX B PRICE FREEZE SERVICE PRICES
APPENDIX C LITIGATION DISCLOSURE
FULL REQUIREMENTS SERVICE AGREEMENT
THIS FULL REQUIREMENTS SERVICE AGREEMENT ("Agreement"), made and
entered into as of this 14th day of June, 2000 by and between Constellation
Power Source, Inc., a Delaware corporation ("Supplier" or "CPS") and Baltimore
Gas and Electric Company, a Maryland Corporation ("BGE") (each individually a
"Party", or collectively, the "Parties").
W I T N E S S E T H
WHEREAS, on April 8, 1999, Maryland enacted the Electric Choice and
Competition Act authorizing customer choice and competition among electric
WHEREAS, on November 10, 1999 the Maryland Public Service Commission
issued an order approving the terms of a settlement providing for retail choice
within BGE's service territory;
WHEREAS, the Maryland PSC Order directs BGE to supply electric service
for a period of up to six years to those retail customers within BGE's
traditional retail service territory that choose not to purchase their power
supply from alternative competitive suppliers;
WHEREAS, the Maryland PSC Order provides that, in order to ensure the
reliability of supply for electric service provided by BGE and to further
ensure that BGE can meet its obligations, BGE may enter into a full
requirements contract with an Affiliate for energy, capacity, losses and
ancillary services needed by BGE for such specified retail load until June 30,
WHEREAS, Supplier is authorized to makes sales of energy, capacity and
ancillary services at market based rates pursuant to Constellation Power Source,
Inc., 79 FERCP. 61,167 (1997) and its market based rates tariff, Constellation
Power Source, Inc. Rate Schedule FERC No. 11, Revision No. 2 in accordance with
FERC Delegated Letter Order of March 29, 2000 in FERC Docket No. ER00-1598-000
(the "Supplier Tariff");
WHEREAS, this Agreement is entered into pursuant to and in accordance with
the Supplier Tariff; and
WHEREAS, Supplier and BGE are entering into this Agreement for the purpose
of establishing the terms and conditions under which Supplier will supply such
full requirements service to BGE.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, the Parties hereto agree as follows:
1.1 Definitions. For all purposes of this Agreement, the following terms as
used in this Agreement shall have the following meanings. Except where the
context otherwise requires, definitions and terms expressed in the singular will
include the plural and vice versa.
"Affiliate" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such first Person. The
term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Aggregate Retail Load" means the load obligation as reported to PJM
for Price Freeze Service, Default Service and Special Contract Service
retail load of BGE during the Delivery Term.
"Agreement" means this Full Requirements Service Agreement, including
the Appendices, as amended, modified or supplemented from time to time.
"BGE" means Baltimore Gas and Electric Company, a Maryland corporation
and its successors and permitted assigns hereunder.
"Business Day" means a day on which Federal Reserve member banks in
Baltimore Maryland are open for business; and a Business Day shall open
at 8:00 a.m. and close at 5:00 p.m. Eastern Standard (or Daylight
"CCNPP" means Calvert Cliffs Nuclear Power Plant, Inc. and any
"CGI" means Constellation Power Source Generation, Inc. and any
"Creditworthiness Criteria" with respect to a Party or its guarantor
means (i) a rating of "Baa3" or better from Moody's, "BBB-" or better
from S&P or investment grade as determined by another nationally
recognized rating service reasonably acceptable to the other Party and
(ii) a Net Worth of at least Two Hundred Million Dollars
"Default Service" means the retail electric generation default service
provided by BGE to its customers in Maryland in accordance with the
settlement, the Maryland PSC Order, and BGE's tariffs on file with the
"Delivery Point" means any point on the PJM Transmission System as
elected by Supplier.
"Delivery Term" means the period commencing on the Effective Date and
ending on June 30, 2003, unless this Agreement is earlier terminated in
accordance with its terms.
"Effective Date" means 12:01 a.m. on the later of: (a) July 1, 2000; or
(b) the first day of the month following the month in which all of the
conditions specified in Article 2 are satisfied or waived by the Party
for whose benefit such condition exists, or if such date is less than
five Business Days prior to the first day of the next succeeding month,
then the first day of the second month thereafter, or as may be
mutually agreed upon by the Parties.
"Electricity Supplier Coordination Tariff" means the BGE Electricity
Supplier Coordination Tariff approved by the Maryland PSC, as amended,
modified or supplemented from time to time.
"FERC" means the Federal Energy Regulatory Commission and any successor
"Full Requirements Service" means all-requirements electric service
(minute by minute, hour by hour, day by day) including, but not limited
to, the following products: energy, capacity, ancillary services,
Unaccounted For Energy and associated losses necessary to fulfill all
PJM obligations as they may change from time to time associated with
providing all-requirements electric service to BGE's Aggregate Retail
Load, as further defined or limited pursuant to Article 3. Such Full
Requirements Service shall include changes in customer demand for any
reason, including, but not limited to, seasonal factors, daily load
fluctuations, increased or decreased usage, demand side management
activities, extremes in weather, and other similar events.
"Governmental Authority" means the government of any federal, state,
municipal or other political subdivision, including all agencies and
instrumentalities of such governments and political subdivisions.
"Interest Rate" means, for any date, the lesser of (a) two (2) percent
over the per annum rate of interest equal to the prime lending rate as
may from time to time be published in The Wall Street Journal under
"Money Rates" and (b) the maximum rate permitted by applicable law.
"Load Serving Entity (LSE)" means an entity, including a load
aggregator or power marketer, that: (i) is serving end-users within the
PJM Control Area, and (ii) has been granted the authority, or has an
obligation pursuant to state or local law, regulation or franchise, to
sell electric energy to end-users within the PJM Control Area, or the
duly designated agent of such an entity.
"Maryland PSC" means the Maryland Public Service Commission and any
"Maryland PSC Order" means the November 10, 1999 Order issued by the
Maryland PSC allowing, among other things, retail choice for
electricity consumers, requiring that BGE provide electricity supply to
retail consumers who do not chose an alternate supplier, and further
allowing BGE to enter into a full requirements service agreement with
an Affiliate for Full Requirements Service for BGE's Aggregate Retail
"Moody's" means Moody's Investors Service, Inc. and any successor
"Net Worth" means total assets (exclusive of intangible assets) less
total liabilities as reflected on a balance sheet prepared in
accordance with generally accepted accounting principles consistently
"Operating Committee" means a committee formed by one representative of
Supplier and one representative of BGE for the purposes described in
this Agreement and as otherwise directed by the Parties.
"Person" means any individual, sole proprietorship, corporation,
partnership, joint venture, limited liability partnership, limited