Text

Response to Request for Additional Information Related to Financial Qualification
	ML023600490
Person / Time
Site:	Peach Bottom
Issue date:	12/11/2002
From:	Gallagher M; Exelon Nuclear
To:	; Document Control Desk, Office of Nuclear Reactor Regulation
References
	Download: ML023600490 (66)
	v • d • e

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Exelon Nuclear wwwexeloncorp corn Nuclear 200 Exelon Way Kennett Square, PA 19348 10CFR54 10CFR50 December 11, 2002 U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, DC 20555 Peach Bottom Atomic Power Station, Units 2 and 3 Facility Operating License Nos. DPR-44 and DPR-56 NRC Docket Nos, 50-277 and 50-278

Subject:

Response to Request for Additional Information Related to Financial Qualification

Reference:

Letter from David L. Solorio (USNRC) to M. P. Gallagher (Exelon), dated August 16, 2002

Dear Sir/Madam:

Exelon Generation Company, LLC (Exelon) hereby submits the enclosed responses to the request for additional information transmitted in the reference letter. For your convenience, restates the questions from the reference letter and provides our responses. P is a separately bound proprietary addendum to this letter. Exelon is requesting that Attachment 1 P be withheld from public disclosure, as described in the attached Affidavit of Ronald J. DeGregorio, under 10CFR2.790 and 10CFR9.17. A redacted version, suitable for public disclosure, is provided with the responses to the request for additional information in . Attachment 2 provides a copy of the Owners Agreement for Peach Bottom No. 2 and 3 Nuclear Units that you requested.

If you have any questions or require additional information, please do not hesitate to call.

I declare under penalty of perjury that the foregoing is true and correct.

Respectfully, Executed on 2/ [a -'02-Michael P. Gallagher Director, Licensing & Regulatory Affairs Mid-Atlantic Regional Operating Group

Enclosures:

Attachment 1, 1P, 2 cc: H. J. Miller, Administrator, Region I, USNRC A. C. McMurtray, USNRC Senior Resident Inspector, PBAPS Aoo(

MboO

ATTACHMENT 1 Response to RAI Related to Financial Qualification Attachment 1 Page 1 of 3 Exelon Generation Company, LLC (Exelon)

License Renewal Application (LRA)

Peach Bottom Atomic Power Station (PBAPS), Units 2 and 3 Request for Additional Information Exelon is requested to provide the following financial qualification information, pursuant to 10 CFR 54.19(a) and 50.33:

1. Annual cost and revenue information for Exelon Generation Company, LLC for 2007 and 2008, in accordance with 50.33(f)(2). The licensee previously submitted the requisite information for the years 2001 thru 2006. The staff has determined that, until such time as the proposed rule to eliminate these financial requirements for license renewal becomes final, applicants should submit five years of annual cost and revenue information for the full five-year period (July 2003 to July 2008) immediately following the expected date of issuance of the renewed licenses, if approved (July 2003).

Response

Exelon has updated the financial qualification information to extend the financial projections from January 1, 2003 through December 31, 2008 in response to 'your request. A redacted version of the financial qualification information is provided below. A proprietary version of the financial qualification information is provided in Attachment 1P. The updated financial qualification information continues to demonstrate that Exelon possesses the financial qualifications to meet the applicable requirements of 10CFR50.33(f), "Contents-of Applications; General Information," for non-electric utility businesses. Specifically, Exelon possesses, or has reasonable assurance of obtaining,'the funds necessary to cover the estimated operating costs for the period of the facility operating licenses, including the period of operation under renewed licenses, in accordance with 10CFR50.33(f)(2).

Response to RAI Related to Financial Qualification Attachment 1 Page 2 of 3 EXELON GENERATION, LLC Projected Income Statement

($ Millions) 2003 2004 2005 2006 2007 2008 Operating Revenue $ $ $ $ $ $

Operating Expenses Fuel & Purchased Power Operation & Maintenance Depreciation & Amortization Administrative & Other Decommissioning Expense Decommissioning Recoveries Total Operating Expenses Operating Income (Loss)

Other Income (Deductions)

Net Interest Expense Income before Indoeib Taxes Income Taxes Extraordinary Item Minority Interest Net Income

Response to RAI Related to Financial Qualification Attachment 1 Page 3 of 3

2. Annual cost and revenue information for the co-owners, PSEG Nuclear, LLC and Atlantic City Electric Company, for the years 2003 thru 2008 (per discussion in 1 above).

Response

On October 18, 2001, the NRC issued PBAPS license amendments to transfer Facility Operating Licenses Nos. DPR-44 and DPR-56 to the extent held by Atlantic City Electric Company to Exelon Generation Company, LLC and PSEG NuclearLLC. As a result of these amendments, Exelon Generation Company, LLC and PSEG Nuclear LLC are the joint owners of PBAPS.

PSEG Nuclear, LLC has agreed to provide the requested information directly under separate cover letter.

3. A summary of the portions of the operating agreement(s) dealing with each co-owner's share of operating costs and costs incurred during an extended shutdown. 'The applicant should state each co-owner's share and how that share is to be paid to the operator.

Further, the applicant should submit a copy of the operating agreement(s).

f

Response

Exelon Generation Company, LLC and PSEG Nuclear LLC are equal financial partners in PBAPS, as shown on page 3 of the Amendment to Owners Agreement dated October 18, 2001. Please refer to Article 3 for information dealing with each co-owner's share of operating costs. Please refer to Articles 17 and 25 for information regarding expenses incurred in dealing with regulatory commissions and povwer replacement costs incurred during an extended shutdown. Article 19 describes the monthly settlement provisions for all expenses and charges.

A copy of the Owners Agreement for PBAPS dated December 4, 1967, the Amended Owners Agreement for PBAPS dated November 24, 1971, the Supplemental Agreement to the Owners Agreement for PBAPS dated September 1, 1975, the Supplemental Agreement to the Owners Agreement for PBAPS dated January 26, 1977, the Amendment to Owners Agreement dated December 29, 2000, and the Amendment to Owners Agreement dated October 18, 2001, are provided in Attachment 2.

4. Decommissioning funding assurance information, in accordance with 50.33(k)(1), for all three co-owners. No decommissioning funding assurance information was submitted with the licensee's application. Here, the licensee should briefly describe its decommissioning funding program. If there will be no change in the licensee's decommissioning funding program during the renewal period, the licensee should state that the costs of decommissioning the facilities will continue to be funded by the mechanism(s) the owners previously established for each licensed reactor unit in accordance with 10 CFR 50.75.

Response

10CFR54.19(a) requires that each license renewal application provide the information specified in 10CFR50.33(a) through (e), (h), and (i). Therefore, information in accordance with 10CFR50.33(k)(1) was not provided with the license renewal application. After conference calls held on September 4, 2002, and on October 2, 2002, agreement was reached that a response to this request for additional information was no longer required to'comply with the requirements of 10CFR54.19(a).

ATTACHMENT 2 12/09/02 MON 15:29 FAX 092158414474 PECO LEGAL 22FL U015 AMENDMENT TO OWNERS AGREEMENT (Peach Bottom)

THIS AMENDMENT TO OWNERS AGREEMENT, dated as of October 18, 2001 (this "Amendment"), is by and among Atlantic City Electric Company, a New Jersey corporation

("ACE"), Exelon Generation Company, LLC, a Pennsylvania limited liability company

("Exelon"), and PSEG Nuclear, LLC, a Delaware limited liability company ("PSEG Nuclear").

ACE, Exelon and PSEG Nuclear are referred to individually as a '__ary_' and collectively as the "Parties". Public Service Electric & Gas Company, a New Jersey corporation ('TSE&G Utili), PSEG Power LLC, a Delaware limited liability company ("PSEG Power"), PECO Energy Company (formerly Philadelphia Electric Company), a Pennsylvania corporation

("PECO"), and Delnarva Power & Light Company, a Delaware and Virginia corporation

("DP&L'), have executed this Amendment solely for the purposes of agreeing to Section 4 hereof.

WITNESSETH WHEREAS, ACE, Exelon (as transferee of PECO) and PSEG Nuclear (as transferee of PSE&G Utility) collectively own all of the ownership interests in the Station (as defined in the hereinafter described Owners Agreement) and have entered intothe Owners Agreement for Peach Bottom No. 2 and 3 Nuclear Units, dated as of November 24, 1971, as amended heretofore (the "Owners Agrecmcntu);

WHEREAS, pursuant to the Owners Agreement, ACE, Exelon (as transferee of PECO) and PSEG Nuclear (as transferee of PSE&G Utility) have agreed to certain terms and conditions in connection with or relating to the Station, as set forth therein; WHEREAS, pursuant to the Purchase Agreement, dated as of September 27, 1999, as amended as of October 3, 2000 and as of September 26, 2001 (the "ACE Purchasc Agrcment"),

made by and among ACE, Exelon (as transferee ofPECO) and PSEG Nuclear (as transferee of PSEG Power), ACE has agreed to sell to each of Exelon and PSEG Nuclear, and each of Exelon and PSEG Nuclear has agreed to purchase, one-half of the Purchased Assets (as defined in the ACE Purchase Agreement), and each of Exclon and PSEG Nuclear has agreed to assume the Assumed Liabilities (as defined in the ACE Purchase Agreement), in each case. to the extent, and subject to and upon the terms and conditions, set forth in the ACE Purchase Agreement; WHEREAS, pursuant to the Purchase Agreement, dated as of September 27, 1999, as amended as of October 3, 2000 (the "DP&L Purchase Agreement" and, together with the ACE Purchase Agreement, the "Purchase Agreements"), made by and among DP&L, PECO and PSEG Nuclear, as transferee of PSEG Power, on December 29, 2000, DP&L sold to each of PECO and PSEG Nuclear, and each of PECO and PSEG Nuclear purchased, one-half of the Purchased Assets (as defined in the DP&L Purchase Agreement), and each of PECO and PSEG Nuclear assumed the Assumed Liabilities (as defined in the DP&L Purchase Agreement), in each "4236,o2-zstonSIA

12/09/02 MON 15:30 FAX 092158414474 PECO LEGAL 22FL [j016 case, to the extent, and subject to and upon the terms and conditions, sct forth in the DP&L Purchase Agreement; WHEREAS, the Parties executed a Wholesale Transaction Confirmation, dated as of October 3, 2000, as amended as of September 26, 2001 (the "WTC"), pursuant to which each of Exelon (as transferee ofPECO) and PSEG Energy Resources & Trade LLC ("PSER&T"), a Delaware limited liability company and an affiliate of PSEG Nuclear, agreed to purchase energy and unforced capacity produced at the Station from each of ACE and DP&L, and each of ACE and DP&L agreed to sell such energy and unforced capacity to each of Exelon (as transferee of PECO) and PSER&T in exchange for the consideration set forth in the WTC; WHEREAS, pursuant to New Jersey Board of Public Utilities order dated August 24, 1999, in Docket No. 2097070461, E097070462 and E97070463, and to the Assignment and Assumption Agreement dated as of August 21, 2000, PSE&G Utility assigned to PSEG Nuclear, and PSEG Nuclear assumed, certain assets and liabilities, including, without limitation, all of PSE&G Utility's right, title and interest in and to the Owners Agreement; WHEREAS, pursuant to Assignments of Right to Purchase, dated as of May 12, 2000 and Assignment and Assumption Agreements, dated as of December 29, 2000 and as of October 17, 2001, PSEG Power has assigned to PSEG Nuclear, and PSEG Nuclear has agreed to assume, all ofPSEG Power's right, title and interest in and to the Purchase Agreements; WHEREAS, pursuant to the Assignment and Assumption Agreement, made as of January 1, 2001, PECO has assigned to Exelon, and Exelon has assumed, c'ertain assets and liabilities, including, without limitation, all of PECO's right, title and interestin and to the Owners Agreement, the Purchase Agreements and the WTC; WHEREAS, pursuant to the Purchase Agreements, the Parties have agreed to execute and deliver this Amendment at the Closing; and WHEREAS, in connection with the transactions contemplated by the Purchase Agreements, the Parties desire to enter into, effective from and after the Closing Date, this Amendment.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants, representations, warranties and agreements set forth herein, and intending to be legally bound hereby, the Parties hereby agree as follows: "

1. Defined Terms. Capitalized terms used but not defined in this Amendment shall have their respective meanings specified in the Purchase Agreements.

2. Amendment. Except as set forth in this Amendment, effective as of 12:01 a.m. on the Closing Date:

4236.2O-Rewor,nSIA 2

12/09/02 MON 15:30 FAX 092158414474 'TECO LEGAL 22FL e017 (a) This Amendment terminates all rights of ACE under the Owners Agreement to station output and ACE shall not have any further right or entitlement thereto.

(b) The ownership interests set forth in Section 2.1 of the Owners Agreement shall be deemed deleted and replaced with the following:

Exelon: 50.0%

PSEG Nuclear: 50.0%

(C) All references to "signatories" in the Owners Agreement shall mean Exelon and PSEG Nuclear, and all references to '"ACE" in the Owners Agreement shall be deemed deleted

3. Reconciliation.

3.1 Within ninety (90) days following the Closing Date, Exelon shall deliver to ACE a statement setting forth, with a reasonable amount of supporting detail, (a) the amount of ACE's proportionate share (determined in accordance with the Owners Agreement, and reduced by the amount of the Defined Expenses Excess, as calculated in accordance with Section 7.1(b) of the ACE Purchase Agreement) of all capital expenditures and operations and maintenance expenses (whether in the ordinary course or otherwise) for the Station, relating to periods prior to the Closing Date and not previously paid by ACE, and (b) the sum of (i) the amount of any unused portion of any prepayments and advances made by ACE to Exelon, including, but not limited to prepayments and advances for stores, Inventories, insurance, emergency preparedness fees, and working capital advances plus (ii) the amounts required to be reimbursed to Seller by PSEG Nuclear and Exelon in accordance with Section 7.1(a) of the ACE Purchase Agreement, if any. The calculation of amounts payable under this Section 3.1 shall be made in accordance with accounting mcthods and practices historically used by Exelon under the Owners Agreement.

3.2 No later than thirty (30) days after ACE's receipt of the statement described in Section 3.1, subject to Section 5 hereof, (a) ACE shall pay to Exelon the amount, if any, by which the amount described in Section 3.1(a) exceeds the amount described in Section 3.1(b), or (b) Exelon shall pay to ACE the amount, if any, by which the amount described in Section 3.1(b) exceeds the amount described in Section 3.1 (a).

- 3.3 - In the cvcnt that any amount under Section 3.1 shall not be finally known or determined as of the date when the statements described in Section 3.1 are delivered, Exelon shall deliver to ACE statements setting forth, with a reasonable amount of supporting detail, ACE's share of such amount when it is finally known or determined,' and, subject to Section 5 hereof, ACE shall pay the amount due from it to Exelon within thirty (30) days after its receipt of such statement. ACE's obligations under this Section 3.3 shall terminate on October 31 in the year following the year in which the Closing Date occurs (other than obligations for payments due on statements received by ACE prior to such October 31).

4236 02-Reman SIA 3

12/09/02 MON 15:30 FAX 092158414474 PECO LEGAL 22FL Z018 3.4 Within the-thirty (30) day payment periods described in Sections 3.2 and 3.3, Exelon shall afford ACE and its Representatives the opportunity, as reasonably requested, to review the work papers and other records and documentation used by Exelon in preparing the statements described in Sections 3.1 and 3.3.

4. Special Release.

4.1 PECO, Exelon, PSE&G Utility, PSEG Power, PSEG Nuclear and DP&L each hereby unconditionally and irrevocably releases, acquits and forever discharges ACE and its Affiliates (other than DP&L), shareholders, officers, directors,' employees, agents, representatives, successors and assigns (collectively, the "Seller Parties"), effective as of the date hereof, of and from any and all claims, demands, debts, losses, costs, expenses, proceedings, judgments, damages, actions, causes of action, suits, contracts, agreements, obligations, accounts and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract or in tort, at law or in equity, that PECO, Exelon, PSE&G Utility, PSEG Power, PSEG Nuclear or DP&L alone or with any other Person had, now has, or might hereafter have against the Seller Parties or any of them jointly and/or severally, for or by reason of any mattcrs, circumstance, event, action, omission, cause or thing whatsoever occurring or existing before, on or after the date hereof, arising under or relating to the Owners Agreement, or any matters that could be raised in any litigation in connection with the Owners Agreement, other than (a) the obligations set forth in-Section 3 of this Amendment, (b) ACE's representations, warranties, covenants, agreements and other obligations under the ACE Purchase Agreement, subject to the terms and conditions set forth therein, including without limitation, those related to the Excluded Liabilities, and (c) the covenants, agreements and other obligations under the WTC of ACE.

4.2 ACE hereby unconditionally and irrevocably releases, acquits and forever discharges PECO, Exelon, PSE&G Utility, PSEG Power, PSEG Nuclear and DP&L and their respective Affiliates, shareholders, officers, directors, employees, agcnts, representatives, succcssors and assigns (collectively, the "Remaining Parties"), effective as of the date hereof, of and from any and all claims, demands, debts, losses, costs, expenses, proceedings, judgments, damages, actions, causes of action, suits, contracts, agreements, obligations, accounts and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract or in tort, at law or in equity, that ACE alone or with any other Person had, now has, or might hereafter have against the Remaining Parties or any of them jointly and/or scverally, for or by Teason of any matters, circumstance, event, action, omission, cause or thing whatsoever occurring or existing before, on or after the date hereof, arising uider or relating to the Owners Agreement, or any matters that could be raised in any litigation in connection with the Owners Agreement, other than (a) the obligations set forth in Section 3 of this Amendment, (b) PECO's, Exelon's, PSEG Power's and PSEG Nuclear's respective representations, warranties, covenants, agreements and other obligations'under the ACE Purchase Agreement, subject to the terms and conditions set forth therein, including without limitation, those related to the Assumed 4236 02.Rntwn $IA .4

12/09/02 MON 15:31 FAX 092158414474 PECO LEGAL 22FL j019 Liabilities, and (c) the respective covenants, agreements and other obligations under the WTC of PECO, Exelon, PSEG Power and PSER&T.

5. Arbitration.

5.1 Notwithstanding any provision hereof to the contrary, in the event of any dispute between or among any of the Parties relating to or arising'out of any provision of this Amendment, the sole remedy available to any Party is the dispute resolution procedure set forth in this Section 5; provided, however, that any Party may seek a preliminary injunction or other provisional judicial remedy if such action is necessary to prevent irreparable harm or preserve the status quo, in which case the Proties shall nonetheless continue to pursue resolution of the dispute by means of this procedure. The Party asserting such dispute (the "Asserting Party")

shall give written notice to the other Party to the dispute (the "Other Party") of the fact that a dispute has arisen pursuant hereto. Such notice shall include (i) a statement setting forth in reasonable detail the facts, events, circumstances, evidence and arguments underlying such dispute and (ii) proposed arrangements for a meeting to attempt to resolve the dispute to be held within sixty (60) days after such notice is given. Within thirty (30) days after such notice is given, the Other Party hereto shall submit to the Asserting Party a written summary responding to such statement of facts, events, circumstances, evidence and arguments contained in the noticc and an acceptance of or proposed alternative to the meeting arrangements set forth in the initial notice.

5.2 The chief executive officers (or any other executive officer or officers directly reporting to, and duly designated by, such chief executive officers) of the Asserting Party and the Other Party shall meet at a mutually acceptable time and place to attempt to settle any dispute in good faith; provided, however, that such meeting shall be held at the principal offices of the Other Party unless otherwise agreed; and provided furthcr,'that'any such meeting shall be held no later than sixty (60) days after the written notice of dispute is given pursuant to Section 5.1 hereof. Each Party shall bear its own costs and expenses with respect to preparation for, attendance at and participation in such meeting.

5.3 In the event that (i) a meeting has been held in accordance with Section 5.2, and (ii) the dispute shall have not been resolved at such meeting, then, upon request by either the Asserting Party or the Other Party, the Asserting Party and the Other Party shall submit such dispute to binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association (the "Commercial Arbitration Rules"). In the event that such

---dispute is submitted to arbitration pursuant to the Commercial Arbitration Rules, then the .

arbitration tribunal shall be composed of three arbitrators (one such arbitrator to be selected by the Asserting Party, the second such arbitrator to be selected by the Other Party, in each case, within thirty (30) days after the meeting is held in accordance with Section 5.2, with the third such arbitrator, who shall be a former U.S. District Court or U.S. Circuit Court of Appeals judge and shall serve as chairperson of such tribunal, selected by the other two arbitrators or, in the absence of their agreement, by the American Arbitration Association). The venue of the arbitration shall be Wilmington, Delaware, the language of the arbitration shall be English and 4236,02-Rcstcn SI A 5

12/09/02 MON 15:31 FAX 092158414474 PECO LEGAL 22FL 0020 the arbitration shall commence no later than sixty (60) days after the meeting held in accordance with Section 5.2. The decision, judgrnent and order of the arbitration tribunal shall be final, binding and conclusive as to the Parties involved in such dispute, and their respective Representatives, and may be entered in court of competent jurisdiction. Other than the fees and expenses of the arbitrators, which shall be shared equally by the Parties involved in the dispute, each Party to the dispute shall bear its own costs and expenses (including attorneys' fees and expenses) relating to the arbitration.

6. Miscellaneous.

.- 6.1 Amendment and Modification. Subject to applicable Laws, this Amendment may be amended, supplemented or otherwise modified only by written agreement entered into by the Parties.

6.2 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania (without giving effect to conflicts of law principles) as to all matters, including validity, construction, effect, performance and remedies.

6.3 Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

6.4 Severability. If any term or other provision of this Amendment is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Amendment shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being cnforced, the Parties shall negotiate in good faith to modify this Amendment so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

6.5 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given on the day when delivered personally or by facsimile transmission (with confirmation), on the next Business Day when delivered to a nationally recognized overnight courier or five (5) Business Days after deposited as registered or certified

-mail (reitin receipt requested), in eich case; postage prepaid,:addressed to the recipient Party at - -

its address set forth below (or at such other address or facsimile number for a Party as shall be specified by like notice; provided, however, that any notice of a change of address or facsimile number shall be effective only upon receipt thereof):

(a) If to ACE or DP&L, to:

In care of Concctiv 423 6,02-ReStnu SIA 6

12/09/02 MON 15:32 FAX 092158414474 PECO LEGAL 22FL 0021 800 King Street P.O. Box 231 Wilmington, Delaware 19899 Attention: Chairman Facsimile: (302) 429-3367 with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP One Rodney Square Wilmington, Delaware 19801 . ..

Attention: Steven J. Rothschild, Esquire Facsimile: (302) 651-3001 (b) If to Exclon or PECO, to:

Exelon Generation Company, LLC 300 Exelon Way Kennett Square, Pennsylvania 19348 Attention: Charles P. Lewis, Vice President Facsimile: (610) 765-5724 with a copy to:

Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, Pennsylvania 19103-2921 Attention: Howard L. Meyers, Esquire Facsimile: (215) 963-5299 (c) If to PSE&G Utility, PSEG Nuclear or PSEG Power, to:

c/o PSEG Nuclear LLC 80 Park Plaza

--- -. ---- .. ": . ..---T-5A P.O.-Box 570 --: - - .. -

Newark, New Jersey 07101 Attention: Harold W. Borden, I Vice President and General Counsel Facsimile:- (973) 639-0741 with a copy to:

423s.o2-Rcston SIA 7

12/09/02 MON 15:32 FAX 092158414474 PECO LEGAL 22FL 0022 Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC 20036 Attention: Filiberto Agusti, Esquire Facsimile: (202) 429-3902 6.6 Construction. The Article and Section headings contained in this are not part of the agreement of the Parties Amendment are solely for the purpose of reference,Amendment. The words "hereof', "herein" of this and shall not in any way affect the meaning to this and "hereunder" and words of similar import when used in this Amendment shall refer References to a Amendment as a whole and not to any particular provision of this Amendment.

Section shall mean a Section of this Amendment.

6.7 Scveral Liability. Notwithstanding anything herein to the contrary, all Nuclear hereunder shall agreements of PECO, Exelon, PSE&G Utility, PSEG Power and PSEG several and not joint.

be several and not joint and all agreements of ACE and DP&L shall be 6.8 No Other Modifications. Except as herein modified, as between Exelon shall remain unmodified and PSEG Nuclear, the terms and provisions of the Owners Agreement and shall remain in full force and effect.

6.9 Assignment. This Amendment shall inure to the benefit of, and be binding upon, the Parties and their respective successors and permitted assigns.

6.10 Representation of PSEG Nuclear. PSEG Nuclear hereby represents and Public Utilities order warrants to PECO, ACE and DP&L that pursuant to New Jersey Board of and to the dated August 24, 1999, in Docket No. E097070461, E097070462 and E97070463,- assigned Utility Assignment and Assumption Agreement dated as of August 21,2000, PSE&G right, title and interest in to PSEG Nuclear, and PSEG Nuclear assumed, all of PSE&G Utility's and to the Owners Agreement and the obligations of PSE&G Utility thereunder.

to 6.11 Representation of Exelon. Exelon hereby represents and warrants and Assumption Agreement PSEG Nuclear, ACE and DP&L that pursuant to the Assignment all of PECO's assumed, made as of January 1, 2001, PECO assigned to Exelon, and Exclon of PECO thereunder.

right, title and interest in and to the Owners Agreement and the obligations

[SIGNATURE PAGES FOLLOW]

4236.02-RC"T1 SIA 8

12/09/02 MON 15:32 FAX 092158414474 PECO LEGAL 22FL IN WITNESS WHEREOF, the Parties have caused this Amendment to Owners officers as of Agreement to be duly executcd and delivercd by their respective duly authorized the date first written above.

ATLANTIC CITY ELECTRIC COMPANY EXELON GENERATION COMPANY, LLC Na m e:C WLjt U-U"

Title:

Vp: .'yv . ! '

PSEG NUCLEAR LLC By:

Name:

Tiftle:

423602 -Resum S IA 9

12/09/02 H!ON 15:32 FAX 092158414474 PECO LEGAL 22FL 0024 IN WITNESS WHBREOF, the Parties have caused this Amendment to Owners Agreement to be duly executed and delivered by their respectivc duly authorized officers as of the date first written above.

ATLANTIC CITY ELECTRIC COMPANY By:

Name:

Title:

EXELON GENERATION COMPANY, LLC By Name:___________________ __

Title:

PSEG NUCLEAR LLC B~yr Name: -F:I-6d i.*,SIM t

Title:

gcI,' CAO

MON 15:33 FAX 092158414474 PECO LEGAL 22FL Z025 12/09/02 Public Service Electric & Gas Company, PSEG Power LLC, PECO Energy Company and Delmarva Power & Light Company execute and deliver this Amendment to evidence their agreement to be bound by Section 4 hereof:

PUBLIC SERVICE ELECTRIC & GAS COMPANY By: '

Name: (_-_'e

Title:

- .h- te,"

PSEG POWER LLC

-By:

Name:

Title:

PECO ENERGY COMPANY By:

Name:

Title:

DELMARVA POWER & LIGHT COMPANY By:

Name:

Title:

4236 02-Reston SI A

12/09/02 MON 15:33 FAX 092158414474 PECO LEGAL 22FL 0]026 Public Service Electric & Gas Company, PSEG Power LLC, PECO Energy Company and Delmarva Power & Light Company execute and deliver this Amendment to evidence their agreement to be bound by Section 4 hereof:

PUBLIC SERVICE ELECTRIC & GAS COMPANY By:

Name:

Title:

PSEG POWER LLC PECO ENERGY COMPANY By:

Name:

Title:

DELMARVA POWER & LIGHT COMPANY By:

Name:

Title:

4236 02-ROcM- S1A

12/09/02 MON 15:33 FAX 092158414474 PECO LEGAL 22FL 0027

..,*-.vl

'. 7x..- .v;a,-.

LLC, PECO Energy Company and Public Service Electric & Gas Company, PSEG Power this Amendment to evidcnce their Delmarva Power & Light Company execute and dcliver agreement 1o be bound by Section 4 hereof PUBLIC SERVICE ELECTRIC & GAS COMPANY By:

Name:

Title:

PSEG POWER LLC By:

Name:

Title:

PECO ENERGY COMPANY DELMARVA POWER & LIGHT COMPANY By:

Name:

Title:

4236.02-Remon S1 A

MON 15:33 FAX 092158414474 PEC0 LEGAL 22FL 0028 12/09/02 LLC, PECO Encrgy Company and Public Service Electric & Gas Company, PSEG Power deliver this Amendment to evidence their Delmarva Power & Light Company execute and agreement to be bound by Section 4 hereof:

PUBLIC SERVICE ELECTRIC & GAS COMPANY By:

Name:

Title:

PSEG POWER LLC By:

Name:

Title:

PECO ENERGY COMPANY By:

Name:

Title:

DELMARVA POWER & LIGHT COMPANY d236 02-Rebmu SIA 10

AMENDMENT TO OWNERS AGREEMENT (Peach Bottom)

THIS AMENDMENT TO OWNERS AGREEMENT, dated as of December 29,2000 (this "Am"ndm "), is by and among Atlantic City Electric Company, a New Jersey corporation ("AME"), Delmarva Power & Light Company, a Delaware and Virginia corporation ("DP&L"), PECO Energy Company (formerly Philadelphia Electric Company), a Pennsylvania corporation ("PECO") and PSEG Nuclear, LLC, a Delaware limited liability company ("PSENucl")e ACE, DP&L, PECO and PSEG Nuclear are referred to individually as a "flrW" and collectively as the "Partie". Public Service Electric & Gas Company, a New Jersey corporation

("C") and PSEG Power LLC, a Delaware limited liability company

("EPS.E.G.x*P"), have executed this Amendment solely for the purposes of agreeing to Section 4 hereof.

WHEREAS, ACE, DP&L, PECO and PSEG Nuclear (as transferee of PSE&G Utility) collectively own all of the ownership interests in the Station (as defined in the hereinafter described Owners Agreement) and have entered into the Owners Agreement for Peach Bottom No. 2 and 3 Nuclear Units, dated as of November 24, 1971, as amended heretofore (the "OwnersA memn");

WHEREAS, pursuant to the Owners Agreement, ACE, DP&L, PECO and PSEG Nuclear (as transferec of PSE&G Utility) have agreed to certain terms and conditions in connection with or relating to the Station, as 'set forth therein; WHEREAS, pursuant to the Purchase Agreement, dated as of September 27, 1999, as amended as of October 3,2000 (the "ACE Purchase Agreemn"), made by and among ACE, PECO and PSEG Nuclear, as transferee of PSEG Power, ACE has agreed to sell to each of PECO and PSEG Nuclear, and each of PECO and PSEG Nuclear has agreed to purchase, one-half of the Purchased Assets (as defined in the ACE Purchase Agreement), and each of PECO and PSEG Nuclear has agreed to assume the Assumed Liabilities (as defined in the ACE Putrchase Agreement), in each case, to the extent, and subject to and upon the terms and conditions, set forth in the ACE Purchase Agreement; WHEREAS, pursuant to the Purchase Agreement, dated as of September 27, 1999, as amended as of October 3, 2000 (the "DP&L Purchase Aeement" and, together with the ACE Purchase Agreement, the "Purchase Ageement "), made by and among DP&L, PECO and PSEG Nuclear, as transferee of PSEG Power, DP&L

MAIN TOC agreed to sell to each of PECO and PSEG Nuclear, and each of PECO and PSEG Nuclear has agreed to purchase, one-half of the Purchased Assets (as defined in the DP&L Purchase Agreement), and each of PECO and PSEG Nuclear agreed to assume the Assumed Liabilities (as defined in the DP&L Purchase Agreement), in each case, to the extent, and subject to and upon the terms and conditions, set forth in the DP&L Purchase Agreement; WHEREAS, as the result of unanticipated delays in completing the transactions contemplated by the Purchase Agreements, the Parties executed a Wholesale Transaction Confirmation (the "WTC"), dated as of October 3, 2000, pursuant to which each of PECO and PSEG Energy Resources & Trade LLC (T'SER&T"), a Delaware limited liability company and an affiliate of PSEG Nuclear, agreed to purchase energy and unforced capacity produced at the Station from each of ACE and DP&L, and each of ACE and DP&L agreed to sell such energy and unforced capacity to each of PECO and PSER&T in exchange for the consideration set forth in the WTC; WHEREAS, pursuant to New Jersey Board of Public Utilities order dated August 24, 1999, in Docket No. E097070461, E097070462 and E97070463, and to the Assignment and Assumption Agreement dated as of August 21, 2000, PSE&G Utility assigned to PSEG Nuclear, and PSEG Nuclear assumed, certain assets and liabilities including, without limitation, all ofPSE&G Utility's right, title and interest in and to the Owners Agreement; WHEREAS, pursuant to Assignments of Right to Purchase, dated as of May 12, 2000 and Assignment and Assumption Agreements, dated as of December 29, 2000, PSEG Power has assigned to PSEG Nuclear, and PSEG Nuclear has agreed to assume, all of PSEG Power's right, title and interest in and to the Purchase Agreements; WHEREAS, pursuant to the Purchase Agreements, the Parties have agreed to execute and deliver this Amendment at the Closing; and WHEREAS, in connection with the transactions contemplated by the Purchase Agreements, the Parties desire to enter into, effective from and after the Closing Date, this Amendment. -

2

MAIN76OC NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants, representations, warranties and agreements set forth herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

1. Define.Terms. Capitalized terms used but not defined in this Amendment shall have their respective meanings specified in the Purchase Agreements.

2. Amendmen . Except as set forth in this Amendment, effective as of 12:01 a.m. on the Closing Date:

(a) This Amendment terminates all rights of DP&L under the Owners Agreement to station output and DP&L shall not have any further right or entitlement thereto.

(b) The ownership interests set forth in Section 2.1 of the Owners Agreement shall be deemed deleted and replaced with the following:

ACE: 7.51%

PECO: 46.245%

PSEG Nuclear: 46.245%

(c) All references to "signatories" in the Owners Agreement shall mean ACE, PECO and PSEG Nuclear, and all references to "DPL" in the Owners Agreement shall be deemed deleted.

3. Reoc .it 3.1 Within ninety (90) days following the Closing Date, PECO shall deliver to DP&L a statement setting forth, with a reasonable amount of supporting detail, (a) the amount of DP&L's proportionate share (determined in accordance with the Owners Agreement, and reduced by the amount of the Defined Expenses Excess, as calculated in acc6rdance with Section 7.1(b) of the DP&L Purchase Agreement) of all capital expenditures and operations and maintenance expenses (whether in the ordinary course or otherwise) for the Station, relating to periods prior to the Closing Date and not previously paid by DP&L, and (b) the sum of (i) the amount of any unused portion of any prepayments and advances made by DP&L to PECO, including, but not limited to prepayments and advances for stores, Inventories, insurance, emergency preparedness fees, and working capital advances 3

plus (ii) the amounts required to be reimbursed to Seller by PSEG Nuclear and PECO in accordance with Section 7.1(a) of the DP&L Purchase Agreement, if any.

The calculation of amounts payable under this Section 3.1 shall be made in accordance with accounting methods and practices historically used by PECO under the Owners Agreement.

3.2 No later than thirty (30) days after DP&L's receipt of the statement described in Section 3.1, subject to Section 5 hereof, (a) DP&L shall pay to PECO the amount, if any, by which the amount described in Section 3.1(a) exceeds the amount described in Section 3.1(b), or (b) PECO shall pay to DP&L the amount, if any, by which the amount described in Section 3.1(b) exceeds the amount described in Section 3.1(a).

3.3 In the event that any amount under Section 3.1 shall not be finally known or determined as of the date when the statements described in Section 3.1 are delivered, PECO shall deliver to DP&L statements setting forth, with a reasonable amount of supporting detail, DP&L's share of such amount when it is finally known or determined, and, subject to Section 5 hereof, DP&L shall pay the amount due from it to PECO within thirty (30) days after its receipt of such statement. DP&L's obligations under this Section 3.3 shall terminate on December 31 in the year following the year in which the Closing Date occurs (other than obligations for payments due on statements received by DP&L prior to such December 3 1).

3.4 Within the thirty (30) day payment periods described in Sections 3.2 and 3.3, PECO shall afford DP&L and its Representatives the opportunity, as reasonably requested, to review the work papers and other records and documentation used by PECO in preparing the statements described in Sections 3.1 and 3.3.

4. SpecialReas* .

4.1 PECO, PSE&G Utility, PSEG Power, PSEG Nuclear and ACE each hereby unconditionally and irrevocably releases, acquits and forever discharges DP&L and its Affiliates (other than ACE), shareholders, officers, directors, employees, agents, representatives, successors and assigns (collectively, the "Sell Parties"), effective as of the date hereof, of and from any and all claims, demands, debts, losses, costs, expenses, proceedings, judgments, damages, actions, causes of action, suits, contracts, agreements, obligations, accounts and liabilities of any kind 4

or character whatsoever, known or unknown, suspected or unsuspected, in contract or in tort, at law or in equity, that PECO, PSE&G Utility, PSEG Power, PSEG Nuclear or ACE alone or with any other Person had, now has, or might hereafter have against the Seller Parties or any of them jointly and/or severally, for or by reason of any matters, circumstance, event, action, omission, cause or thing whatsoever occurring or existing before, on or after the date hereof, arising under or relating to the Owners Agreement, or any matters that could be raised in any litigation in connection with the Owners Agreement, other than (a) the obligations set forth in Section 3 of this Amendment, (b) DP&L's representations, warranties, covenants, agreements and other obligations under the DP .LPurchase Agreement, subject to the terms and conditions set forth therein, including without limitation, those related to the Excluded Liabilities and (c) the covenants, agreements and other obligations under the WTC of DP&L.

4.2 DP&L hereby unconditionally and irrevocably releases, acquits and forever discharges PECO, PSE&G Utility, PSEG Power, PSEG Nuclear and ACE and their respective Affiliates, shareholders, officers, directors, employees, agents, representatives, successors and assigns (collectively, the "Remaining Parties"), effective as of the date hereof, of and from any and all claims, demands, debts, losses, costs, expenses, proceedings, judgments, damages, actions, causes of action, suits, contracts, agreements, obligations, accounts and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract or in tort, at law or in equity, that DP&L alone or with any other Person had, now has, or might hereafter have against the Remaining Parties or any of them jointly and/or severally, for or by reason of any matters, circumstance, event, action, omission, cause or thing whatsoever occurring or existing before, on or after the date hereof, arising under or relating to the Owners Agreement, or any matters that could be raised in any litigation in connection with the Owners Agreement, other than (a) the obligations set forth in Section 3 of this Amendment 1 (b) PECO's, PSEG Power's and PSEG Nuclear's respective representations, warranties, covenants, agreements and other obligations under the DP&L Purchase Agreement, subject to the terms and conditions set forth therein, including without limitation, those related to the Assumed Liabilities, and (c) the respective covenants, agreements and other obligations under the WTC ofPECO, PSEG Power and PSER&T.

5. Arbitration.

5.1 , Notwithstanding any provision hereof to the contrary, in the event of any dispute between or among any of the Parties relating to or arising out of 5

MAIN OC any provision of this Amendment, the sole remedy available to any Party is the dispute resolution procedure set forth in this Section 5; provided, however, that any Party may seek a preliminary injunction or other provisional judicial remedy if such action is necessary to prevent irreparable harm or preserve'the status quo, in which case the Parties shall nonetheless continue to pursue resolution of the dispute by means of this procedure. The Party asserting such dispute (the "Asserting aty")

shall give written notice to the other Party to the dispute (the "Other Paty") of the fact that a dispute has arisen pursuant hereto. Such notice shall include (i) a statement setting forth in reasonable detail the facts, events, circumstances, evidence and arguments underlying such dispute and (ii) proposed arrangements for a meeting to attempt to resolve the dispute to be held within sixty (60) days after such notice is given. Within thirty (30) days after such notice is given, the Other Party hereto shall submit to the Asserting Party a written summary responding to such statement of facts, events, circumstances, evidence and arguments contained in the notice and an acceptance of or proposed alternative to the meeting arrangements set forth in the initial notice.

5.2 The chief executive officers (or any other executive officer or officers directly reporting to, and duly designated by, such chief executive officers) of the Asserting Party and the Other Party shall meet at a mutually acceptable time and place to attempt to settle any dispute in good faith; provided, however, that such meeting shall be held at the principal offices of the Other Party unless otherwise agreed; and provided firther, that any such meeting shall be held no later than sixty (60) days after the written notice of dispute is given pursuant to Section 5.1 hereof.

Each Party shall bear its own costs and expenses with respect to preparation for, attendance at and participation in such meeting.

5.3 In the event that (i) a meeting has been held in accordance with Section 5.2, and (ii) the dispute shall have not been resolved at such meeting, then, upon request by either the Asserting Party or the Other Party, the Asserting Party and the Other Party shall submit such dispute to binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association (the "Commercial Arbitration Rules"). In the event that such dispute is submitted to arbitration pursuant to the Commercial Arbitration Rules, then the arbitration tribunal shall be composed of three arbitrators (one such arbitrator to be selected by the Asserting Party, the second such arbitrator to be selected by the Other Party, in each case, within thirty (30) days after the meeting is held in accordance with Section 5.2, with the third such arbitrator, who shall be a former U.S. District Court or U.S. Circuit Court of Appeals judge and shall serve as chairperson of such 6

MAIN TOQ tribunal, selected by the other two arbitrators or, in the absence of their agreement, by the American Arbitration Association). The venue of the arbitration shall be Wilmington, Delaware, the language of the arbitration shall be English and the arbitration shall commence no later than sixty (60) days after the meeting held in accordance with Section 5.2. The decision, judgment and order of the arbitration tribunal shall be final, binding and conclusive as to the Parties involved in such dispute, and their respective Representatives, and may be entered in court of competent jurisdiction. Other than the fees and expenses of the arbitrators, which shall be shared equally by the Parties involved in the dispute, each Party to the dispute shall bear its own costs and expenses (including attorneys' fees and expenses) relating to the arbitration.

6. Miscellaneous.

6.1 Amendment and Modification. Subject to applicable Laws, this Amendment may be amended, supplemented or otherwise modified only by written agreement entered into by the Parties.

6.2 Governing.La. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania (without giving effect to conflicts of law principles) as to all matters, including validity, construction, effect, performance and remedies.

6.3 Comunteparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

6.4 SvLertbility. If any term or other provision of this Amendment is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Amendment shall nevertheless remain in full force and effect.

Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Amendment so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by Law in an acceptable mann er to the end that the transactions contemplated hereby are fulfilled to the extent possible.

6.5 Noties. All notices and other communications hereunder shall be in writing and shall be deemed given on the day when delivered personally or by 7

MAI-NjTC facsimile transmission (with confirmation), on the next Business Day when delivered to a nationally recognized overnight courier or five (5) Business Days after deposited as registered or certified mail (return receipt requested), in each case, postage prepaid, addressed to the recipient Party at its address set forth below (or at such other address or facsimile number for a Party as shall be specified by like notice; provided, however, that any notice of a change of address or facsimile number shall be effective only upon receipt thereof):

(a) If to ACE or DP&L, to such Party:

In care of Conectiv 800 King Street P.O. Box 231 Wilmington, Delaware 19899 Attention: Chairman Facsimile: (302) 429-3367 with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP One Rodney Square Wilmington, Delaware 19801 Attention: Steven J. Rothschild, Esquire Facsimile: (302) 651-3001 (b) If to PECO, to:

PECO Energy Company - Nuclear 300 Exelon Way Kennett Square, Pennsylvania 19348 Attention: Charles P. Lewis, Vice President Facsimile: (610) 765-5724 with a copy to:

Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, Pennsylvania 19103-2921 8

Attention: Howard L. Meyers, Esquire Facsimile: (215) 963-5299 (c) If to PSE&G Utility, PSEG Nuclear or PSEG Power, to:

c/o PSEG Nuclear LLC 80 Park Plaza T-5A P.O. Box 570 Newark, New Jersey 07101 Attention: Harold W. Borden, Vice President and General Counsel Facsimile: (973) 639-0741 with a copy to:

Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC 20036

"-Attention:Filiberto Agusti, Esquire Facsimile: (202) 429-3902 6.6 Construction. The Article and Section headings contained in this Amendment are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning of this Amendment. The words "hereof', "herein" and "hereunder" and words of similar import when used in this Amendment shall refer to this Amendment as a whole and not to any particular provision of this Amendment. References to a Section shall mean a Section of this Amendment.

6.7 Several Liability. Notwithstanding anything herein to the contrary, all agreements of PECO, PSE&G Utility, PSEG Power and PSEG Nuclear hereunder shall be several and not joint and all agreements of ACE and DP&L shall be several and not joint.

6.8 No Other Modifications. Except as herein modified, as between ACE, PECO and PSEG Nuclear, the terms and provisions of the Owners Agreement shall remain unmodified and shall remain in full force and effect.

9

Title:

rMAIN TOC Public Service Electric & Gas Company and PSEG Power LLC execute this Amendment to evidence their agreement to be bound by Section 4 hereof:

PUBLIC SERVICE ELECTRIC & GAS COMPANY By:

Name:

Title:

PSEG POWER LLC By:

Name: Frank Cassidy

Title:

President

SUPPLEMENTAL AGREEMENT L^,,, ,flJ "to the OWNERS AGREEMENT for PEACH BOTTOM NO. 2 AND 3 NUCLEAR UNITS 0 This SUPPLEMENTAL AGREEMENT made as of January 26, 1977, by and between ATLANTIC CITY ELECTRIC COMPANY, a New Jersey corporation, DELMARVA POWER-& LIGHT COMPANY, a Delaware corporation, PHILADELPHIA ELECTRIC COMPANY, a Pennsylvania corporation, and PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a New Jersey corporation, (hereinafter referred to individually as ACE, DPL, PE, and PS respectively, and referred to collectively as the signatories).

WITNESSETH:

WHEREAS, the signatories have entered into an Owners Agreement" dated November 24, 1971 (AGREEMENT), as amended and supplemented; and WHEREAS, the signatories desire to amend and supplement the AGREEMENT to further define and clarify the responsibility for loss or damage and the liability therefor, arising out of ownership or operation of Peach Bottom No. 2 and 3 Nuclear Units (hereinafter referred to as the Station);

NOW, THEREFORE, the signatories, each in consideration of the agreements of the other, herein set forth, hereby mutually agree as follows:

Section I The AGREEMENT shall be and is hereby amended:

a. By adding a new Section 25.2 as follows:

"All power replacement costs incurred by each signatory as a result of the total or partial unavailability of its ownership share of the Station shall not be con sidered as a shared liability and shall be borne

entirely by each signatory."

25.3.

b. By renumbering the existing Section 25.2 as Section Section II This SUPPLEMENTAL AGREEMENT shall become effective as of November 24, 1971.

Section III Except as hereinabove provided, the terms and shall conditions of the AGREEMENT as amended and supplemented remain in full force and effect.

IN WITNESS WHEREOF, the signatories hereto have duly executed first above this SUPPLEMENTAL AGREEMENT as of the day and year written.

PHILADELPHIA ELECTRIC COMPANY ATLANTIC CITY ELECTRIC COMPANY By _ý 4ý a4g By -. "/ * " /

ViBie Presiden 6ce President PUBLIC SERVICE ELECTRIC AND GAS COMP?

DELMARVA POWER & LIGHT COMPANY By By viePres!n vice President

SUPPL**4M-TAL AGRERUENT to the O0ANERS AGREEI.NT for PEA.CH BOTTOM NO. 2 AND 3 NUCLEAR UNITS of September 1, 1975 by and between This SUPPL2C-rTAL AGREEIENT made as

& LIGHT Jersey corporation, DETI4ARVA POWER ATLANTIC CITY ELECTRIC COMPANY, a New Pennsylvania PHILADELPHIA ELECTRIC COMPANY, a cOMPANY, a Delaware corporation, AND GAS COMPANY, a New Jersey corporation, corporation, and PUBLIC SERVICE ELECTRIC and as ACE, DPL, PE and PS respectively, (hereinafter referred to individually signatories).

referred to collectively as the WITNESSETH:

into an Owners Agreement dated WHEREAS, the signatories have entered and November 24, 1971, (AGREE4ENT);

supplement the AGREEMENT to WHEREAS, the signatories desire to amend and for authorization of and accounting further define and clarify the procedures for expenditures; in consideration of the agreements NOW, THEREFORE, the signatories, each mutually agree as follows:

of the others, herein set forth, hereby amended:

Section I. The AfRE14ENT shall be and is hereby in lieu thereof:

A. By striking out Section 5.2 and substituting in commercial operation, all capital 5.2 After each unit is placed associated with said unit, additions and operating expenditures, for in 12.1 (e) shall covered by annual budgets as provided having a collective owner require the approval of signatories that individual capital ship interest in excess of 50%, except

shall require projects expected to cost in excess of $1,000,000 the ",Lnanimous approval of the signatories.

substituting in lieu thereof:

B. By striking out Section 5.3 and from In the course of operation, whenever significant deviations 5.3 in 12.1 (e) are expected to the approved budgets as provided for as defined in occur, PE will promptly advise the Owners Committee 16.1 as follows:

when the current year's total capital expenditures will i) deviate from budget by 101% or more; or expenses, ii) when the current year's aggregate operating from budget by exclusive of nuclear fuel, will deviate 10% or more; or expenses iii) when the current year's aggregate maintenance will deviate from budget by 10% or more.

In such cases, PE will furnish an explanation of the deviation the remainder of the budget and an estimate of expenditures for 5.4, if any such deviation year. Except as provided for in such expenditures in excess of exceeds budget by 10% or more, signatories having a budget shall require the approval of collective ownership interest in excess of 501a, except that projects expected to cost in excess of $1,000,000 individual capital of the signatories.

shall require the unanimous approval C. By adding a new Section 5.4 as follows:

need arises for 5.4 When, in the course of operation, unforeseen retirement, renewal, repair, or replacement of any facilities, ll.l, shall make such PE, as operating agent designated in renewal, repair, or replacement if prompt decision retirement, is required to prevent hazardous conditions or substantial reduction in service.

D. By striking out Section 12.1 (e) and substituting in lieu thereof:

12.1 (e) Prepare annual budgets as required for operating expenses, maintenance, capital expenditures and retirements to be submitted to the Owners Committee as defined in 16.1 for approval. Said annual budgets shall be as follows:

i) a ten year Capital Budget, by months for the first year and by years thereafter; and ii) a five year Operating and Maintenance Budget, by months for the first year and by years thereafter; and iii) projected net generation for five years with the first a

year by months; iv) revisions to any of the above items will be submitted to the owners Committee whenever new computations are made.

Section II. This SUPPLEMENTAL AGREDE shall become effective on September 1, 1975.

Section III. Except as hereinabove provided, the terms and conditions of the AGREEMENT shall remain in full force and effect.

IN WITNESS W11EREOF, the signatories hereto have duly executed this SUPPLEMENTAL' AGREEMENT as of the day and year first above written.

ATIANTIC CITY ELECTRIC COMPANY PHILADELPHIA ELECTRIC COMPANY BY -7 Ce BY-// ellf ePes ident AlVice Preside~pt DEI4ARVA POWER & LIGHT COMPANY PUBLIC SERVICE ELECTRIC AND GAS COMPANY BY PresidentVice__rBY vice President vc ýrdl~

Amended Agreement:

OWNERS AGREEMENT FOR PEACH BOTTOM NO. 2 AND 3 NUCLEAR UNITS THIS AGREEMENT, made and entered into as of this 24th day of November 1971, by and between ATLANTIC CITY ELECTRIC COMPANY, a New Jersey corporation, DELMARVA POWER & LIGHT COMPANY, a Delaware corporation, PHILADELPIA ELECTRIC COMPANY, a Pennsylvania corporation, and PUBLIC SERVICE ELECTRIC AND GAS COMPANY, New Jersey corporation, (hereinafter referred to individually as ACE, DPL, PE and PS respectively, and referred to collectively as the signatories).

WITNESSETH THAT:

WHEREAS, the signatories have agreed to undertake construction of Peach Bottom No. 2 and No. 3 Nuclear Units (hereinafter referred to as the Station) in order to obtain the advantages of a large nuclear generating station, including resultant low cost of installation and operation; and WHEREAS, various contracts and arrangements have been made in connection with the design and construction of the Station, the purchase of equipment, and the purchase or lease of nuclear fuel; and WHEREAS, it is contemplated that other contracts will be made in connection with transmission of the Station output; NOW, THEREFORE, the parties hereto, each in consideration of the covenants of the others, herein set forth, hereby mutually agree as follow:

Section I - Ownership of Station Description of Facilities and Property 1.1 The Station shall consist primarily of:

Two 1065 mw turbine-generator units complete with accessories and auxiliaries; two 13,500,000 lb/hr boiling water reactors and auxiliaries; general plant; main power transformers; emergency on-site power; nuclear fuel, unless such nulcear fuel shall be leased, and all other items required for the complete installation and fueling-of the Station.

1.2 The following parcel of land shall be used for the Station:

That area required for the main buildings and auxiliaries occupying approximately 24 acres, 500°feet north of Peach Bottom Unit No. 1 together with certain rights in adjacent land necessary for the construction and operation of the Station.

Article 2 Ownership Participation 2.1 The signatories shall own the Station as described in 1.1 and land described in 1.2 as tenants in common without the right of partition with undivided interests as follows:

Atlantic City Electric Company 7.51%

Delmarva Power & Light Company 7.51%

Philadelphia Electric Company 42.49%

Public Service Electric and Gas Company 42.49%

2.2 Any change in the form of ownership shall require the unanimous approval of the signatories.

Article 3 Responsibility for Costs 3.1 The signatories shall share in the cost of site preparation, in the cost of land described in 1.2, in the cost of engineering and design and construction of the Station described in 1.1, in the cost of purchasing or leasing nuclear fuel, in the cost of normal construction period training, in rentals for land and other facilities and in the cost of its operation and maintenance in proportion to their ownership listed in 2.1. After each generating unit is placed in operation, capital and operating expenditures shall be authorized as provided in 5.2. Costs of additions, renewals, be replacements, retirements and abandonments, including removal costs, shall allocated among the signatories in proportion to their ownership listed in 2.1.

3.2 Funds received from the rental to others or disposal of any facilities or 5.3, described in 1.1, or of any additional facilities provided for in 5.2 shall be distributed to the signatories in proportion to their ownership listed in 2.1.

Article 4 Entitlements to Station Output 4.1 The signatories shall be entitled to shares of the installed capacity, the avail"!.-- ijvuitx, operating capacity and hourly energy generation of Station in proportion to their ownership listed in 2.1.

Article 5 Authorization of and Accounting for Expenditures with 5.1 Direct expenditures for the Station shall be classified in accordance A set of the requirements of the appropriate regulatory authorities.

PE continuing property records shall be established for the Station by utilizing retirement units similarly in accord. Such continuing property from time records shall reflect additions, retirements and replacements made to time in accordance with 5.2 and 5.3.

5.2 After each unit is placed in commercial operation, all capital by additions and operating expenditures, associated with said unit, covered the approval of annual budgets as provided for in 12.1 (e) shall require 50%, except signatories having a collective ownership interest in excess of excess of $1,000,000 that individual capital projects expected to cost in shall require the unanimous approval of the signatories.

from the 5.3 In the course of operation, whenever significant deviations to occur, PE will approved budgets as provided for in 12.1 (e) are expected as follows:

promptly advise the Owners Committee as defined in 16.1 i) when the current year's total capital expenditures will deviate from budget by 10% or more; or of ii) when the current year's aggregate operating expenses, exclusive nuclear fuel, will deviate from budget by 10% or more; or iii) when the current year's aggregate maintenance expenses will deviate from budget by 10% or more.

and an In such cases, PE will furnish an explanation of the deviation as estimate of expenditures for the remainder of the budget year. Except exceeds budget by 10% or more, such provided for in 5.4, if any such deviation shall require the approval of signatories expenditures in excess of budget

having a collectiveownership interest in excess of 50%, except that individual capital projects expected to cost in excess of $1,000,000 shall require the unanimous approval of the signatories.

5.4 When, in the course of operation, unforeseen need arises for retirement, renewal, repair, or replacement of any facilities, PE, as operating agent designated in 11.1, shall make such retirement, renewal, repair, or replacement if prompt decision is required to prevent hazardous conditions or substantial reduction in service.

Article 6 Disposal of Property or Equipment 6.1 Disposal by sale or otherwise of any major facilities described in 1.1 or any additional major facilities provided for in 5.2 or 5.3 shall require the unanimous approval of the signatories.

6.2 When the Station ceases to be used and useful and is retired or abandoned, ACE, DPL and PS shall forthwith transfer to PE their respective interests in the land and rights described in 1.2 for a consideration equal to the then fair market value of their respective ownership of such land.

Section II - Construction of Station Article 7 Responsibility for Engineering and Design 7.1 PE shall be responsible ror aerailea engineering design of the Station.

Article 8

Responsibility for Construction 8.1 PE shall be responsible for the construction of a complete, operable station.

Article 9 Progress Payments During Construction Period 9.1 The signatories shall advance construction funds to PE in proportion to their ownership listed in 2.1. PE, as Billing Agent as designated in 18.1, shall call for advances as needed to provide for the payment of current bills while maintaining a minimum working balance of idle cash.

9.2 PE shall make payments on behalf of all the signatories, as required, to vendors and contractors for the design and construction of a complete, operable staion.

9.3 PE shall prepare annually an estimate of monthly construction expenditures.

Article 10 Accounting and Reports During Construction Period 10.1 PE shall keep accurate accounts of the cost of construction of the Station and shall furnish monthly copies summarizing such accounts to ACE, DPL and PS. Detailed records and accounts of construction costs shall be available for inspection by ACE, DPL and PS.

10.2 PE shall furnish to ACE, DPL and PS monthly reports of progress of construction.

Section III - Operation of Station Article 11 Responsibility for operation Station 11.1 PE on behalf of the signatories shall operate and maintain the as if it were its for the mutual benefit of th signatories in the same manner operation such own generating station as provided hereinafter. In performing for the and maintenance, PE shall act as an independent contractor responsible as energy at the Station, result to be obtained, i.e., generation of power and to the adjacent economically and reliably as is practicable, and delivery for the Peach Bottom Switching Station, PE itself having sole responsibility of 5.2 and specific manner of attaining that result, subject to the provisions 5.3.

Article 12 Services to Be Provided 12.1 As operator of the Station, PE will:

in a (a) Assign sufficient trained personnel to operate the Station of PE.

soley reliable and economical manner, such personnel to be employees Station.

(b) Schedule deliveries of and handle fuel supplies to the supplies and (c) Purchase operating and ordinary maintenance materials, services.

(d) Perform or contract for maintenance, renewals, and replacements and to condition required to keep the Station in safe and efficient operating protect the property, as provided in 5.2 and 5.3.

(e) Prepare annual budgets as-required for operar2ng expenses, be submitted to the maintenance, capital expenditures and retirements to budgets shall be Owners Committee as defined in 16.1 for approval. Said annual as follows:

and by years i) a ten year Capital Budget, by months for the first year thereafter; and for the first ii) a five year operating and Maintenance Budget, by months year and by years thereafter; and by months; iii) projected net 'generation for five years with the first 'year to the Owners iv) revisions to any of the-above items will be submitted Committee whenever new computations are made. necessary (f) Perform accounting required for the Station and furnish and reports to the signatories to enable each to meet its accounting body any regulatory statistical requirements including the requirements of having jurisdiction.

bills to the (g) Prepare bills in reasonable detail and render said an apppropriate signatories for cost of services performed, including t6 operation allowance for PE's overheads, as mutually agreed to, applicable of the Station as provided in 14.1.

Article 13 Scheduling of Operations (operating period hourly 13.1 PE shall schedule the operation of the Station the practices of the generation and maintenance outages) in accordance with shall keep ACE, DPL and Pennsylvania-New Jersey-Maryland Interconnection and shall be scheduled PS fully informed of the status of the Station. Operation the signatories from the so as to result in the maximum practicable benefit'tO utilization of the Station output.

Article 14 Payments for Operation

placed in operation, PE 14.1 Prior to the date the first generating unit is promptly to PE, shall request from the other signatories and they shall remit funds to amount of working in proportion to their ownership listed in 2.1, an PE shall cover their share of estimated current operating disbursements.

in order to maintain a adjust the aggregate amount of such working funds payment of bills.

minimum balance necessary to provide for the orderly signatories, as required, to 14.2 PE shall make payments on behalf of all the a complete, operable station.

v'endors and contractors for the continuance of as designated in 18.1, shall 14.3 At the end of each month, PE, Billing Agent and maintenance of the Station prepare a statement of actual cost of operation PS for reimbursement of its and shall submit said statement to ACE, DPL and operating funds..

monthly costs of operating the 14.4 PE shall prepare annually an estimate of said estimate to ACE, DPL Station during the ensuing budget year and submit all estimated costs of operation and PS. Such estimate of payments shall cover applicable fringe benefits and and maintenance, including labor, supervision, and other expenses.

overheads, fuel, supplies, rentals, taxes, insurance Article 15 Training of Operating Personnel training PE personnel who will be 15.1 ACE, DPL and PS shall share in cost of to their ownership listed in assigned to operate the Station, in proportion in connection with general 2.1. The signatories shall each bear the costs Lt."i-,II*y Lb.%Azilify their personnel for nuclear operations.

assign personnel to the 15.2 ACE, DPL and PS shall have the right to and to the Station operating construction force during Station construction shall remain as employees of, force for training purposes. Those so assinged making the assignment.

and their wages and expenses paid by the signatory Section IV - General Article 16 Owners Committee by an officer legally authorized 16.1 Each signatory, by written notice signed other signatories, shall appoint one to commit such signatory, and served upon on an Owners Committee to coordinate representative and an alternate to serve to the'design, construction, the administration of all matters pertaining of the Station under this'Agreement. Any ownership, operation and maintenance similar written notice change its time, by signatory many, at any or representative or alternate on the Owners Committee. All decisions made shall be by unanimous approval of its directions given by the Owners Committee members except where specified in 5.2.

Article 17 Other Expenses incurred in dealing with 17.1 Legal expenses, audit expenses, expenses and supplies and other storeroom expense on materials regulatory commissions, allocated among the shall be expenses reasonably chargeable to the station in 2.1.

to their ownerhsip listed signatories in proportion Article 18 Designation of Billing Agent

for 18.1 PE is hereby designated as Billing Agent under this Agreement and shall render bills for net charges and receiving and disbursing payments issue statements for net credits.

Article 19 Monthly Settlement 19.1 PE shall bill ACE, DPL and PS monthly for their portions of all expenses within 10 and charges under this Agreement. ACE, DPL and PS shall make payment days of receipt of said bill.

Article 20 PE Ownership in Future Nuclear Plants that ACE will 20.1 It is the intent, when conditions make it feasible, station and, at such time, shall offer undertake to construct a nuclear-power of such a station in an amount PE the opportunity to share in the ownership of the kilowatt capacity in Peach Bottom equivalent to the total ACE share to offer such opportunity to PE only Units No. 2 and 3. ACE shall be obligated as to the first nuclear power station constructed by ACE.

that DPL will 20.2 It is the intent, when conditions make it feasible, and, at such time, shall offer undertake to construct a nuclear power station of such a station in an amount PE the opportunity to share in the ownership the kilowatt capacity in Peach Bottom equivalent to the total DPL share of to offer such opportunity to PE only Units No. 2 and 3. DPL shall be obligated as to the first nuclear power station constructed by DPL.

Article 21 Insurance and Indemnity from the compensation 21.1 PE shall have sole responsibility for withholding the services under this Agreement any of its employees engaged in performing required by law to be withheld, and, sole taxes or contributions which are amount and taxes applicable to the responsibility for paying such withheld by law upon PE to the proper compensation of such employees imposed the other governmental authority, and shall indemnify and save harmless signatories from and against any liability on account thereof.

of workmen's 21.2 PE shall have sole responsibility for the payment engaged in performing the services under this compensation to its employees laws of the Commonwealth of Pennsylvania. PE Agreement in accordance with the Compensation Act may, at its option satisfy its liability under the Workmen's or by annual by providing primary Workmen's Compensation insurance of Pennsylvania as a self-insurer qualification from the Commonwealth insurance. Any such insurance augmented by excess Workmen's Compensation or excess, shall contain a subrogation policy provided by PE, either primary and agreed that the Company shall not waiver as follows: "It is understood Power Station, Units proceed against any of the Owners of Peach Bottom Atomic under this policy."

No. 2 and 3 for recovery of any loss or losses paid insurance provided is to be Evidence of any such Workmen's Compensation furnished to the other signatories.

21.3 PE, for itself and as agent of the other signatories, shall provide comprehensive public liability insurance in amounts to be detemined from time (other than to time by the signatories. Such insurance shall cover liability of the Station and nuclear) arising out of the ownership and operation and shall name as associated activities, including the use of automobiles, of this policy is to insureds PE and the other signatories. A certified copy be furnished to the other signatories.

a "nuclear 21.4 For the protection against liability arising out of or from incident" (as defined in the Atomic Energy Act of 1954, as amended) PE, for itself and as agent of the other signatories, shall provide (a) nuclear the liability insurance in such amount and in such form as shall meet 170(b) of financial protection requirements of the AEC pursuant to Subsection the Atomic Energy Act of 1954, as amended, and (b) a Government Indemnity Energy Act Agreement with the AEC pursuant to Subsection 170(c) of the Atomic policies of 1954, as amended. Certified copies of nuclear liability insurance and Government Indemnity Agreement are to be furnished to the other signatories.

provide 21.5 PE, for itself and as agent of the other signatories, shall in such amount and in such form as deemed necessary property damage insurance Such policy or policies shall name as and appropriate by the signatories. are insureds PE and the other signatories. Certified copies of such policies to be furnished to the other signatories.

21.6 PE shall provide employees' fidelity insurance in the amount of $500,000.

ownership and 21.7 Costs of all insurances provided specifically for the in PE's operation of Peach Bottom Atomic Power Station shall be included expenses reimbursable by the other signatories under this Agreement.

Article 22 Audit kept by PE 22.1 An audit shall be made each year of the accounts and records to verify under this Agreement by an independent certified public accountant The report the accuracy of the expenses and costs charged to the signatories. who shall of said certified public accountant shall be sent to each signatory of any exception advise PE, within three months of the receipt of said report, period covered by said or objection to any item of expenses and costs in the report.

Article 23 Effective Data and Termination of Agreement first above written 23.1 This Agreement shall become effective as of the date Station continues and shall continue in full force and effect as long as the terminated by to be used and useful for electric generation unless sooner unanimous agreement.

Article 24 Waiver of Rights signatory or 24.1 Any waiver of the rights of any signatory as to any other a waiver as to any any other matter arising hereunder shall not be deemed default or other matter subsequently occurring.

Article 25 Liability liability therefor, 25.1 The signatories shall bear all loss or damage and of bodily arising out of ownership or operation of the Station, by reason in proportion to their ownership interests injury, death or damage to property other however, to any rights against any listed in 2.1, without prejudice, party, causing such loss, damage or liability.

as a result of the 25.2 All power replacement costs incurred by each signatory

total or partial unavailability of its ownership share of the Station shall not be considered as a shared liability and shall be borne entirely by each signatory.

25.3 No signatory shall be liable for the failure of any other signatory to perform any of its obligations under this Agreement.

Article 26 Governing Law 26.1 It is agreed by the signatories that this Agreement shall be construed, interpreted and controlled by the laws of the Commonwealth of Pennsylvania.

Article 27 Successors and Assigns 27.1 This Agreement shall enure to the benefit of and be binding upon the successors of the respective signatories.

27.2 A signatory may, upon agreement between the parties, transfer part or all of its interest fn the Station to another signatory and correspondingly assign its rights and obligations under this Agreement.

27.3 A signatory may transfer part or all of its interest in the Station to a transferee not a signatory hereto and correspondingly assign its rights and obligations under this Agreement to such transferee, provided that the same offer of transfer shall first have been made in writing sent by registered LUtiLi * .he other signatories and shall have been rejected by them.

IN WITNESS WHEREOF, the signatories have caused these presents to be signed in their respective names, each by duly authorized officers as of the day and first above written.

ATLANTIC CITY ELECTRIC COMPANY BY F.J. FICADENTI DELMARVA POWER & LIGHT COMPANY BY E.R. STREED PHILADELPHIA ELECTRIC COMPANY BY C. WATSON PUBLIC SERVICE ELECTRIC AND GAS COMPANY BY C.H. HOFFMAN

OWNERS AGREEMENT FOR PEACH BOTTOM NO. 2 AND 3 NUCLEAR UNITS THIS AGREEMENT, made and entered into as of this 24th day of November 1971, by and between ATLANTIC CITY ELECTRIC COMPANY, a New Jersey corporation, DELMARVA POWER & LIGHT COMPANY, a Delaware cor poration, PHILADELPHIA ELECTRIC COMPANY, a Pennsylvania corporation, and PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a New Jersey corporation, (hereinafter referred to individually as ACE, DPL, PE and PS respec tively, and referred to collectively as the signatories).

WITNESSETH THAT:

WHEREAS, the signatories have agreed to undertake construc tion of Peach Bottom No. 2 and No. 3 Nuclear Units (hereinafter re ferred to as the Station) in order to obtain the advantages of a large nuclear generating station, including the resultant low cost of installation and operation; and WHEREAS, various contracts and arrangements have been made connection with the design and construction of the Station, the in purchase of equipment, and the purchase or lease of nuclear fuel; and WHEREAS, it is contemplated that other contracts will be made in connection with transmission of the Station output; NOW, THEREFORE, the parties hereto, each in consideration of the covenants of the others, herein set forth, hereby mutually agree as follows;

Section I - Ownership of Station Article I Description of Facilities and Property Station shall consist principally of:

1.1 The Two 1065 mw turbine-generator units complete with accessories lb/hr boiling water reactors and and auxiliaries; two 13,500,000 main power transformers; emergency auxiliaries; general plant; unless such nuclear fuel shall be on-site power; nuclear fuel, leased, and all other items required for the complete installation and fueling of the Station.

be used for the Station:

1.2 The following parcel of land shall and auxiliaries That area required for the main buildings occupying approximately 24 acres, 500 feet north of Peach Bottom in adjacent land necessary Unit No. 1 together with certain rights of the Station.

for the construction and operation Article 2 Ownership Participation own the Station as described in 1.1 2.1 The signatories shall 1.2 as tenants in common without the right and land described in with undivided interests as follows:

of partition Company - 7.51%

Atlantic City Electric

- 7.51%

Delmarva Power & Light Company Company - 42.49%

Philadelphia Electric and Gas Company - 42.49%

Public Service Electric shall require the unanimous 2.2 Any change in the form of ownership approval of the signatories.

Article 3 Responsibility for Costs 3.1 The signatories shall share in the cost of site preparation, in the cost of land described in 1.2, in the cost of engineering design and construction of the Station described in 1.1, in the cost of purchasing or leasing nuclear fuel, in the cost of normal construction period training, in rentals for land and other facilities and in the cost of its operation and maintenance in proportion to their ownership listed in 2.1. After each generating unit is placed in operation, capital and operating expenditures shall be authorized as provided in 5.2. Costs of additions, re newals, replacements, retirements and abandonments, including removal costs, shall be allocated among the signatories in pro portion to their ownership listed in 2.1.

3.2 Funds received from the rental to others or disposal of any facili ties described in 1.1, or of any additional facilities provided for in 5.2 or 5.3, shall be distributed to the signatories in propor tion to their ownership listed in 2.1.

Article 4 Entitlements to Station Output 4.1 The signatories shall be entitled to shares of the installed capacity, available capacity, operating capacity and hourly energy generation of the Station in proportion to their ownership listed in 2.1.

Article 5 Authorization of and Accounting for Expenditures be classified in accordance 5.1 Direct expenditures for the Station shall regulatory authorities. A with the requirements of the appropriate shall be established for the set of continuing property records units similarly in accord. Such Station by PE utilizing retirement shall reflect additions, retirements and continuing property records in accordance with 5.2 and 5.3.

replacements made from time to time commercial operation, all capital 5.2 After each unit is placed in associated with said unit, additions and operating expenditures, expenditures not covered covered by annual budgets and unbudgeted of signatories having a collec by 5.3 shall require the approval in excess of 50%, except that individual tive ownership interest of $500,000 shall require the projects expected to cost in excess unanimous approval of the signatories.

unforeseen need arises for 5.3 When, in the course of operation, of any facilities, PE, retirement, renewal, repair or replacement in 11.1, shall make such retirement, as operating agent designated repair, or replacement if:

renewal,

i. The necessary material is on hand or obtainable promptly for intended use; and ii. Prompt decision is required to prevent hazardous reduction in service; and conditions or substantial expenditure is expected not to exceed $100,000.

iii. The net

Article 6 Disposal of Property or Equipment described in 6.1 Disposal by sale or otherwise of any major facilities 1.1 or any additional major facilities provided for in 5.2 or 5.3 shall require the unanimous approval of the signatories.

and is retired or 6.2 When the Station ceases to be used and useful abandoned, ACE, DPL and PS shall forthwith transfer to PE their the land and rights described in 1.2 for respective interests in value of their a consideration equal to the then fair market respective ownership of such land.

Section II - Construction of Station Article 7 Responsibility for Engineering and Design engineering design of the 7.1 PE. shall be responsible for detailed Station.

Article 8 Responsibility for Construction of a complete, operable 8.1 PE shall be responsible for the construction station.

Article 9 Progress Payments During Construction Period construction funds to PE in proportion

.1 The signatories shall advance to their ownership listed in 2.1. PE, as Billing Agent as designated

18.1, shall call for advances as needed to provide for the pay in balance ment of current bills while maintaining a minimum working of idle cash.

the signatories, as re 9.2 PE shall make payments on behalf of all to vendors and contractors for the design and construction quired, of a complete, operable station.

of monthly construction 9.3 PE shall prepare annually an estimate expenditures.

Article 10 Period Accounting and Reports During Construction of the cost of construction of PE shall keep accurate accounts 10.1 such the Station and shall furnish monthly copies summarizing of accounts to ACE, DPL and PS. Detailed records and accounts for inspection by ACE, DPL construction costs shall be available and PS.

DPL and PS monthly reports of progress 10.2 PE shall furnish to ACE, of construction.

Section III - Operation of Station Article 11 Responsibility for Operation signatories shall operate and maintain the 11.1 PE on behalf of the of the signatories in the same Station for the mutual benefit herein-manner as if it were its own generating station as provided

PE shall after. In performing such operation and maintenance, for the result to act as an independent contractor responsible at the Station, be obtained, i.e., generation of power and energy as is practicable, and delivery to as economically and reliably PE itself having Switching Station, the adjacent Peach Bottom attaining that sole responsibility for the specific manner of and 5-3.

result, subject to the provisions of 5.2 Article 12 Services to Be Provided of the Station, PE will:

12.1 As operator the Station (a) Assign sufficient trained personnel to operate and economical manner, such personnel to be in a reliable employees solely of PE.

to the Station.

Schedule deliveries of and handle fuel supplies (b) materials, supplies (c) Purchase operating and ordinary maintenance and services.

renewals, and replace (d) Perform or contract for maintenance, Station in safe and efficient ments required to keep the as provided operating condition and to protect the property, in 5.2 and 5.3 for operating expenses, (e) Prepare annual budgets as required and retirments to be maintenance, capital expenditures as defined in 16.1 for submitted to the Owners Committee approval.

(f) Perform accounting required for the Station and furnish necessary reports to the signatories to enable each to meet its accounting and statistical requirements including the requirements of any regulatory body having jurisdiction.

(g) Prepare-bills in reasonable detail and render said bills to the signatories for.cost of services performed, including an appropriate allowance for PE's overheads, as mutually agreed to, applicable to operation of the Station as pro vided in 14.1.

Article 13 Scheduling of Operations PE shall schedule the operation of the Station (operating periods, 0 1 hourly generation and maintenance outages) in accordance with the practices of the Pennsylvania-New Jersey-Maryland Interconnection and shall keep ACE, I)PL and PS fully informed of the status of the Station. Operation shall be scheduled so as to result in the maxi mum practicable benefit to the signatories from the utilization of the Station output.

Article 14 Payments for Operation 11.1 Prior to the date the first generating unit is placed in operation, PE shall request from the other signatories and they shall remit promptly to PE, in proportion to their owner-

their ship listed in 2.1, an amount of working funds to cover disbursements. PE shall share of estimated current operating funds in order to adjust the aggregate amount of such working to provide for the orderly maintain a minimum balance necessary payment of.bills.

all the signatories, as re 14.2 PE shall make payments on behalf of of a quired, to vendors and contractors for the continuance complete, operable station.

18.1, PE, Billing Agent as designated in 14.3 At the end of each month, cost of operation and main shall prepare a statement of actual submit said statement to ACE, tenance of the Station and shall operating funds.

DPL and PS for reimbursement of its of monthly costs of operating 4.4 PE shall prepare annually an estimate year and submit said estimate the Station during the ensuing budget cover all to ACE, DPL and PS. Such estimate of payments shall maintenance, including labor, estimated costs of operation and and overheads, fuel, supervision, applicable fringe benefits and other expenses.

supplies, rentals, taxes, insurance Article 15 Training of Operating Personnel who DPL and PS shall share in cost of training PE personnel 15.1 ACE, Station, in proportion to their will be assigned to operate the

in 2.1. The signatories shall each bear the ownership listed costs in connection with general training to qualify their personnel for nuclear operations.

personnel to the 15.-2 ACE, DPL and PS shall have the right to assign and to the construction force during Station construction Those so assigned Station ope.rating force for training purposes.

wages and expenses paid shall remain as employees of, and their by the signatory making the assignment.

Section IV - General Article 16 Owners Committee legally

";.l Each signatory, by written notice signed by an officer and served upon other authorized to commit such signatory, shall appoint one representative and an alternate signatories, the administration to serve on an Owners Committee to coordinate ownership, of all matters pertaining to the design, construction, under this Agreement.

operation and maintenance of the Station written notice change Any signatory may, at any time, by similar Committee. All its representative or alternate on the Owners by the Owners Committee shall.

decisions made or directions given be by unanimous approval of its members except where specified in 5.2.

Article 17 Other Expenses audit expenses, expenses incurred in dealings 17.1 Legal expenses, with regulatory commissions, storeroom expense on materials to the and supplies and other expenses reasonably chargeable in proportion Station shall be allocated among the signatories to their ownership listed in 2.1.

Article 18 Designation of Billing Agent this Agreement for..

18.1 PE is hereby designated as Billing Agent under render bills for net receiving and disbursing payments and shall charges and issue statements for net credits.

Article 19 Monthly Settlement of all 19.1 PE shall bill ACE, DPL and PS monthly for their portions ACE, DPL and PS shall expenses and charges under this Agreement.

of said bill.

make payment within 10 days of receipt Article 20 PE Ownership in Future Nuclear Plants when conditions make it feasible, that ACE will 20.1 It is the intent, station and, at such time, undertake to construct a nuclear power in the ownership of such shall offer PE the opportunity to share total ACE share of the a station in an amount equivalent to the No. 2 and 3. ACE shall kilowatt capacity in Peach Bottom Units

to PE only as to the be obligated to offer such opportunity nuclear power station-constructed by ACE.

first when conditions make it reasible, that DPL will 20.2 It is the intent, station and, at such time, undertake to construct a nuclear power in the ownership of such shall offer PE the opportunity to share the total DPL share of the a station in an amount equivalent to Units No. 2 and 3. DPL shall kilowatt capacity in Peach Bottom to PE only as to the.first be obligated to offer such opportunity by DPL.

nuclear power station constructed Article 21 Insurance and Indemnity for withholding from the compen 1.1 PE shall have sole responsibility the services under sation of its employees engaged in performing which are required by this Agreement any taxes or contributions for paying such law to be withheld, and, sole responsibility to the compensation of such withheld amount and taxes applicable the proper governmental employees imposed by law upon PE to save harmless the other signa authority, and shall indemnify and on account thereof.

tories from and against any liability for the payment of workmen's 21.2 PE shall have sole responsibility the services compensation to its employees engaged in performing with the laws of the Common under this Agreement in accordance option satisfy its liability wealth of Pennsylvania. PE may, at its Act by providing primary Workmen's under the Workmen's Compensation qualification from the Common Compensation insurance or by annual augmented by excess wealth of Pennsylvania as a self-insurer

Workmen's Compensation insurance. Any such insurance policy provided by PE, either primary or excess, shall contain a sub rogation waiver as follows: "It is understood and agreed that of the Owners of the Company shall not proceed against any No. 2 and 3 for recovery Peach Bottom Atomic Power Station, Units Evidence of any of any loss or losses paid under this policy."

provided is to be furnished such Workmen's Compensation insurance to the other signatories.

shall provide 21.3 PE, for itself and as agent of the other signatories, public liability insurance in amounts to be determined comprehensive Such insurance shall cover..

from time to time by the signatories.

ownership and liability (other than nuclear) arising out of the activities, including the operation of the Station and associated insureds PE and the other use of automobiles, and shall name as be furnished signatories. A certified copy of this policy is to to the other signatories.

arising out of or from a 21.4 For the protection against liability "nuclear incident" (as defined in the Atomic Energy Act of 1954, as amended) PE, for itself and as agent of the other signatories, nuclear liability insurance in such amount and shall provide (a) protection requirements in such form as shall meet the financial of the Atomic Energy Act of the AEC pursuant to Subsection 170(b) with Government Indemnity Agreement of 1954, as amended, and (b) a of the Atomic Energy Act of the AEC pursuant to Subsection 170(c) insurance 1954, as amended. Certified copies of nuclear liability Agreement are to be furnished to policies and Government Indemnity the other signatories.

shall pro PE, for itself and as agent of the other signatories, 21.5 insurance in such amount and in such form vide property damage by the ! +/- e Such as deemed necessary and appropriate as insureds PE and the other policy or policies shall name copies of such policies are to be furnished signatories. Certified to the other signatories.

fidelity insurance in the amount of 21.6 PE shall provide employees'

$500,000.

for the ownership 21.7 Costs of all insurances provided specifically Power Station shall be in and operation of Peach Bottom Atomic by the other signatories cluded in PE's expenses reimbursable under this Agreement.

Article 22 Audit and records kept 22.1 An audit shall be made each year of the accounts certified public by PE under this Agreement by an independent of the expenses and costs charged accountant to verify the accuracy public accountant to the signatories. The report of said certified shall advise PE, within three shall be sent to each signatory who

-15 of said report, of any exception or objection months of the receipt and costs in the period covered by said to any item of expenses report, Article 23 of Agreement E'ffective Data and Termination as of the date first above This Agreement shall become effective 23.1 in full force and effect as long as written and shall continue generation the Station continues to be used and useful for electric agreement.

unless sooner terminated by unanimous Article 24 Waiver of Rights of any signatory as to any other signatory

.4.1 Any waiver of the rights hereunder shall not be deemed a waiver or any other matter arising subsequently occurring.

as to any default or other matter Article 25 Liability therefor, shall bear all loss or damage and liability 25.1 The signatories of the Station, by reason of arising out of ownership or operation to property in proportion to their bodily injury, death or damage to ownership interests listed in 2.1, without prejudice, however, causing such loss, damage or any rights against any other party, liability.

be liable for the failure of any other signatory

,5.2 No signatory shall to perform any of its obligations under this Agreement.

Article 26 Governing Law shall be con 26.1 It is agreed by the signatories that this Agreement of the Commonwealth strued, interpreted and controlled by the laws of Pennsylvania.

Art..cle 27 Successors and Assigns and be binding upon 27.1 This Agreement shall enure to the benefit of the successors of the respective signatories.

upon agreement between the parties, transfer part 27.2 A signatory may, or all of its interest in the Station to another signatory and correspondingly assign its rights and obligations under this Agreement.

of its interest in the Station 27.3 A signatory may transfer part or all to a transferee not a signatory hereto and correspondingly assign its rights and obligations under this Agreement to such transferee, shall first have been provided that the same offer of transfer to the other signatories made in writing sent by registered mail

and shall have been rejected by them.

the signatories have caused these presents IN WITNESS WHEREOF, their respective names, each by duly authorized officers to be signed in day and year first above written.

as of the ATLANTIC CITY ELECTRIC COMPANY

--

Vice President DELMARVA POWER & LIGHT COMPANY vice President PHILADELPHIA ELECTRIC COMPANY Vice President GAS COMPANY PUBLIC SERVICE ELECTRIC AND Vice P s dent

Memorandum of Ownerst Avreement I "each Bottom Atomic Power Station Units No. 2 and 3 The purpose of this memorandum is to record our agreement (1) as to our respective bwnerships, as tenants in common, without right of partition, in Peach Bottom Atomic Power Station Units No. 2 and 3 (hereinafter referred to as the Units), two nominally 1065 mw boiling water nuclear generating units and appurtenant facilities, to be located on the Susquehanna River, in Peach Bottom Township, York County, Pennsylvania, in the following percentages:

Atlantic City Electric Company 7.515 Delmarva Power & Light Company 7.515 Philadelphia Electric Company 42.49*

Public Service Electric and Gas Company 42.49%

and (2) that our entitlements to capacity and energy from the Units will be in those same percentages at all times.

The Units are to be located at the Peach Bottom Atomic Power Station and Philadelphia Electric Company is responsible for their construction, and operation. The detailed engineering design, design and construction of the Units is in process, and contracts with the architect engineer and some of the equipment sdppliers are being negotiated. The financial contributions of the parties to be in hereto for the design and construction of the Units are the foregoing respective percentages.

The -Parties hereto will bear all loss or damage and liability therefor arising out of the o..nership or operation of the Units by reason of bodily injury, death or 'daanage to property in the same proportions as their respective percentages of ownership in tho Units, without prejudice, however, to any rights against any party or parties hereto, or third parties, causing such loss, damage or liability.

As soon as practicable hereafter, this memorandum will be implemented by several more formal documents providing for all necessary matters related to the ownership and operation of the Units.

Atlantic City Electric Company Philadelphia Electric Company Delmarva Power & Light Company Public Service 'lectric and Gas Cot BD _ By_

Dated:o-* / 7 2

ML023600490

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