ML18151A585

Forwards Rept on Status of Decommissioning Funding for Each of Four Nuclear Power Reactors,Per 10CFR50.75(f)(1)

ML18151A585
Person / Time
Site:	Surry, North Anna
Issue date:	03/31/1999
From:	Ohanlon J VIRGINIA POWER (VIRGINIA ELECTRIC & POWER CO.)
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
99-160, NUDOCS 9904070347
Download: ML18151A585 (59)

Text

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VIRGINIA ELECTRIC AND POWER COMPANY e

RICHMOND, VIRGINIA 23261 March 31, 1999 United States Nuclear Regulatory Commission Serial No.99-160 Attention: Document Control Desk NL&OS/SLW RO' Washington, D. C. 20555-0001 Docket Nos. 50-280, 281 50-338, 339 License Nos. DPR-32, 37 NPF-4, 7 Gentlemen:

VIRGINIA ELECTRIC AND POWER COMPANY SURRY AND NORTH ANNA POWER STATIONS UNITS 1 AND 2

• DECOMMISSIONING FINANCIAL ASSURANCE In compliance with 10 CFR 50.75(f)(1), Virginia Electric and Power Company (Virginia Power) is providing this report on the status of its decommissioning funding for each of the four nuclear power reactors as referenced above. Attachment 1 provides the following information:

Table I - 1999 NRC Minimum Financial Assurance Amount Table II - Funds Held in External Trusts at December 31, 1998 Table Ill - 1999 NRC Minimum Financial Assurance Amount Minus Funds Held in External Trusts Table IV - Current Annual Funding Levels Table V - Annual Funding Levels Necessary to Meet 1999 NRC Minimum Financial Assurance Amounts (including relevant assumptions)

By a November 23, 1998 letter (Serial No.98-695), Virginia Power notified the NRC that a parent company guaranty had been established for -the portion of the decommissioning obligation attributable to our customers whose rates are approved by the Federal Energy Regulatory Commission and a small unallocated portion. We have replaced that guaranty with surety bonds.Jn .the.pena~sum-indicated.inTable Ill, .These bonds are included as Attachment 2.

( 9904070347 990331 PDR ADOCK 05000280 I PDR

On July 26, 1990, Virginia Power submitted its Decommissioning Financial Assurance Certification Report, which included a copy of* the trust agreements. established for nuclear decommissioning. Since that submittal, the Company has replaced the trustee and executed some minor amendments. Attachment 3 contains copies of the latest agreements.

Please contact us if you have any questions or require additional information.

Very truly yours,

~()~~

James P. O'Hanlon Senior Vice President - Nuclear Attachments Commitments made in this letter: None.

cc: US Nuclear Regulatory Commission Region II Atlanta Federal Center 61 Forsyth Street, S.W., Suite 23T85 Atlanta, Georgia 30303 Mr. R. A. Musser NRC Senior Resident Inspector Surry Power Station Mr. M. J. Morgan NRC Senior Resident Inspector North Anna Power Station

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e Attachment 1 VIRGINIA ELECTRIC AND POWER COMPANY SURRY AND NORTH ANNA POWER STATIONS UNITS 1 AND 2 DECOMMISSIONING FINANCIAL ASSURANCE 1999 Nuclear Decommissioning Financial Assurance

Serial No.99-160 Attachment 1 page 1 of 3 VIRGINIA POWER 1999 Nuclear Decommissioning Financial Assurance Table I: 1999 NRC Minimum Financial Assurance Amount Surry Surry North Anna t North Anna t Unit 1 Unit2 Unit 1 Unit 2 Total Customer DPR-32 DPR-37 NPF-4 NPF-7 All Units Classification (Millions of Dollars)

Virginia State Corporation Commission (VSCC) $199.0 $199.0 $192.7 $192.7 $ 783.4 North Carolina Utilities Commission 12.2 12.2 11.6 11.6 47.6 Federal Energy Regulatory Commission 19.8 19.8 11.9 11.9 63.4 Virginia Retail Not Under VSCC Jurisdiction 28.8 28.8 27.7 27.7 113.0 Unallocated 2.1 2.1 -1.8 __ -1_.8 0.6 Total $ 261.9 $ 261.9 $ 242.1 $ 242.1 $1,008.0 Table II: Funds Held in External Trusts at December 31, 1998

• Surry Surry North Anna t North Anna t Total Unit 1 Linit 2 Unit 1 Unit 2 All Customer DPR-32 DPR-37 NPF-4 NPF-7 Units Classification (Millions of Dollars)

Virginia State Corporation Commission (VSCC) $150.0 $142.5 $130.0 $ 122.6 $ 545.1 North Carolina Utilities Commission 8.8 9.6 9.2 8.7 36.3 Federal Energy Regulatory Commission 7.8 8.3 2.9 2.8 21.8 Virginia Retail Not Under VSCC Jurisdiction 18.9 19.5 17.7 16.6 72.7 Total $185.5 $ 179.9 $159.8 $150.7 $ 675.9

\

Serial No.99-160 Attachment 1 page 2 of 3 Table Ill: 1999 NRC Minimum Financial Assurance Amount Minus Funds Held in External Trusts Surry Surry North Anna t North Anna t Total Method for Unit 1 Unit2 Unit 1 Unit2 All Providing Customer DPR-32 DPR-37 NPF-4 NPF-7 Units Financial Classification (Millions of Dollars) Assurance Virginia State Corporation Commission External (VSCC) $49.0 $56.5 $62.8 $ 70.1 $ 238.4 Sinking Fund North Carolina Utilities External Commission 3.4 2.6 2.3 2.8 11.1 Sinking Fund Federal Energy Surety Bond Regulatory w/ External Commission 12.0 11.5 8.9 9.1 41.5 Sinking Fund Virginia Retail Not UnderVSCC External Jurisdiction 9.9 9.3 10.1 11.2 40.5 Sinking Fund Unallocated 2.1 2.1 -1.8 -1.8 0.6 Surety Bond Total $ 76.4 $ 82.0 $ 82.3 $ 91.4 $ 332.1 Table IV: Current Annual Funding Levels

• Surry Surry North Anna t North Anna t Total Unit 1 Unit2 Unit 1 Unit2 All Customer DPR-32 DPR-37 NPF-4 NPF-7 Units Classification !Millions of Dollars}

Virginia State Corporation $ 8.4 $ 8.3 ,$ 5.9 $ 5.7 $ 28.3 Commission (VSCC)

North Carolina Utilities 0.4 0.5 0.4 0.4: . 1.7 Commission Federal Energy Regulatory 0.3 0.3 0.1 0.1 0.8 Commission Virginia Retail Not Under VSCC Jurisdiction 1.0 ----1.J. 0.9 0.8 3.8 Total $ 10.1 $ 10.2 s____u $ 7.0 $ 34.6

e Serial No.99-160 Attachment 1 page 3 of 3 Table V: Annual Funding Levels Necessary to Meet 1999 NRC Minimum Financial Assurance Amounts Surry Surry North Anna t North Anna t Unit 1 Unit2 Unit 1 Unit 2 Total DPR-32 DPR-37 NPF-4 NPF-7 All Units (Millions of Dollars, except percentages and years) 1999 NRC Minimum Financial Assurance Amounts (Table I) $261.9 $ 261.9 $242.1 $242.1 $1,008.0 Projected Annual Escalation Factors 4.8246% 4.7800% 4.6294% 4.5819%

Year Operating License Expires 2012 2013 2018 2020 1999 NRC Minimum Financial Assurance Amounts Stated in Future Dollars $483.3 $503.6 $571.9 $620.1 Levelized Effective After-Tax and Fee Earnings Rates ** 6.38% 6.43% 6.53% 6.59%

Annual Funding Levels Necessary to Meet 1999 NRC Minimum Financial Assurance Amounts $ 9.1

• Excludes amounts designated for the future decommissioning of the ISFSl's.

• • Annual rate adjusted for asset class mix and turnover over remaining operating life of respective nuclear unit.

t The North Anna Power Station is jointly owned by Virginia Electric and Power Company (88.4%) and Old Dominion Electric Cooperative (11.6%). However, Virginia Electric and Power Company is responsible for 89.6% of the decommissioning obligation. The amounts stated in the above tables reflect only that portion of the decommissioning obligation attributable to Virginia Electric and Power Company.

e Attachment 2 VIRGINIA ELECTRIC AND POWER COMPANY SURRY AND NORTH ANNA POWER STATIONS UNITS 1 AND 2 DECOMMISSIONING FINANCIAL ASSURANCE Surety Bonds

Payment Surety Bond Date bond executed: March 31, 1999 Effective date: March 31, 1999 Principal: Virginia Electric and Power Company, One James River Plaza, 701 E. Cary Street, Richmond, VA 23219 Type of organization: Corporation State of Incorporation: Virginia NRC License Number, name and address of facility and amount for decommissioning activity guaranteed by this bond: DPR-32; Surry Power Station, 5570 Hog Island Road, Surry, VA 23883-0315 Surety and business address: St. Paul Fire and Marine Insurance Company, 5801 Smith Avenue, Baltimore, Maryland 21209 Type of organization: Corporation State of Incorporation: Minnesota Surety's qualification in jurisdiction where licensed facility is located: Licensed to do business in the State of Virginia Surety's bond number: 400 KA 6664 Total penal sum of bond: $14,140,623.00

• Know all persons by these presents, That we, the Principal and Surety(ies) hereto, are firmly bound to the U.S ..Nuclear.Regulatory Commission.(hereinafter-called.NRC)-in.the. above penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and severally; provided that, where the Sureties are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum jointly and severally" only for the purpose of allowing joint action or actions against any or all of us, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sum only as is set forth opposite the name of such Surety; but ifno limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.

• jt-99/A36.I

e Bon~o. 400 KA 6664 WHEREAS, the U.S. Nuclear Regulatory Commission, an agency of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, applicable to the Principal, which require that a license holder or applicant for license provide financial assurance that funds will be available when needed for facility decommissioning; NOW, THEREFORE, the conditions of the obligation are such that if the Principal shall faithfully, before the beginning of decoiilmissioning of each facility identified above, fund the standby trust fund in the amount(s) identified above for the facility; Or, if the Principal shall fund the standby trust fund in such amount(s) after an order to begin facility decommissioning is issued by the NRC or a U.S. district court or other court of competent

• jurisdiction; Or, if the Principal shall provide alternative financial assurance and obtain the written approval of such assurance, within 30 days after the .date a notice of cancellation from the Surety(ies) is received by both the Principal and the NRC, then this obligation shall be null and void; otherwise it is to remain in full force and effect.

The Surety(ies) shall become liable on this bond obligation only when the Principal has failed to fulfill the conditions described above. Upon notification by the NRC that the Principal has failed to

.perform as guaranteed by this bond, the Surety(ies) shall place funds in the amount guaranteed for the facility(ies) into the standby trust fund.

The liability of the Surety(ies) shall not be discharged by any payment or succession of payments.

hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but in no event shall the obligation of the Surety(ies) hereunder exceed the amount of said penal sum.

The Surety(ies) may cancel the bond by sending notice of cancellation by certified mail to the Principal and to the NRC provided, however, that cancellation shall not occur during the 90 days beginning on the date of receipt of the notice of cancellation by both the Principal and the NRC,. as evidenced by the return receipts.

The Principal may terminate this bond by sending written notice to the NRC and the Surety(ies) 90 days prior.to tb~.propos.e.d .date .oftennination provided,.howev.er,.that no such notice shall _become effective until the Surety(ies)receive(s) written authorization for termination of the bond from the NRC.

The Principal and Surety(ies) hereby agree to adjust the penal sum of the bond yearly so that it guarantees a new amount, provided that the penal sum does not increase by more than 20 percent in any one year.

jt-99/A36.2

• c, L e Bontltio. 400 KA 6664 In Witness Whereof, the Principal and Surety(ies) have executed this financial guarantee bond and have affixed their seals on the date set forth above.

Principal:

Virginia Elec..,.,"'--"'"d Power Company John A. saw

• Corporate Seal $r~ Vtce P~esident, CFO and Treasurer Name and Title Corporate Surety:

St. Paul Fire and Marine Insurance Company Corporate S_~al By: ~tJ-7~

Mark W. Edwards, II. Attorney-In-Fact Name and Title Bond Premium: $ 26,869.00

_)

jt-99/A36.3

ST. PAUL FIRE AND MARINE INSURANCE COMPANY CERTIFICATE OF Suret)' - Washington Street, St. Paul, Minnesota s9 AUTHORITY NO.

POWER OF For verification of the authenticity of this Power of Attorney, you may telephone toll free 1-800-421-3880 and ask for ATTORNEY NO. . the Power of Attorney Clerk. Please refer to the Power of Attorney No. and the named individual(s).

F-16170 GENERAL POWER OF ATTORNEY - CERTIFIED COPY (Original on File at Home Office of Company. See Certification.)

2110524 KNOW ALL MEN BY THESE PRESENTS: That St. Paul Fire and Marine Insurance Company, a corporation organized and existing under the laws of the State of Minnesota, having its principal office in the City of St. Paul, Minnesota, does hereby constitute and appoint:

Lee McGriffIII, Mark W. Edwards II, Jeffrey M. Wilson, Birmingham, Alabama; RE. Daniels, Anita Rosenau, Pensacola, Florida; individually its true and lawful attorney(s)-in-fact to execute, seal and deliver for and on its behalf as surety, any and all bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, which are or may be allowed, required or permitted by law, statute, rule, regulation, contract or otherwise,

• NOT TO EXCEED IN PENALTY TIIE SUM OF FIFfY MILLION DOLLARS($50,000,000)EACH and the execution of all such instrument(s) in pursuance of these presents, shall be as binding upon said St. Paul Fire and Marine Insurance Company, as fully and amply, to all intents and purposes, as if the same had been duly executed and acknowledged by its regularly elected officers at its principal office.

This Power of Attorney is executed, and may be certified to and may be revoked, pursuant to and by authority of Article V,-Section 6(C), of the By-Laws adopted by the Shareholders of ST. PAUL FIRE AND MARINE INSURANCE COMPANY at a meeting called and held on the 28th day of April, 1978, of which the following is a true transcript of said Section 6 (C):

"The President or any Vice President, Assistant Vice President, Secretary or Service Center General Manager shall have power and authority (1) To appoint Attorneys-in-fact, and to authorize them to execute on behalf of the Company, and attach the Seal of the Company thereto, bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, and (2) To appoint special Attorneys-in-fact, who are hereby authorized to certify to copies of any power-of-attorney issued in pursuance of this section and/or any of the By-Laws of the Company, and (3) To remove, at any time, any such Attorney-in-fact or Special Attorney-in-fact and revoke the authority given him."

Further, this Power of Attorney is signed and sealed by facsimile pursuant to resolution of the Board of Directors of said Company adopted at a meeting duly called and held on the 5th day of May, 1959, of which the following is a true excerpt:

"Now therefore the signatures of such officers and the seal of the Company may be affixed to any such power of attorney or any certificate relating thereto by facsimile, and any such power of attorney or certificate bearing such facsimile signatures or facsimile seal shall be valid and binding upon the Company and any such power so executed and certified by facsimile signatures and facsimile seal shall be valid and binding upon the Company in the future with respect to any bond or undertaking to which it is attached."

IN TESTIMONY WHEREOF, St. Paul Fire and Marine Insurance Company has caused this instrument to be signed and its corporate seal to be affixed by its authorized officer, this 2nd day of September, A.D. 1998.

ST. PAUL FIRE AND MARINE INSURANCE COMPANY STATE OF MARYLAND} ss.

City of Baltimore MICHAEL B. KEEGAN, Vice President On this 2nd day of September, A.D. 1998, before me came the individual who executed the preceding instrument, to me personally known, and, being by*me duly sworn, said that he/she is the therein described and authorized officer of St. Paul Fire and Marine Insurance Company; that the seal affixed to said instrument is the Corporate Seal of said Company; that the said Corporate Seal and his/her signature were duly affixed by order of the Board of Directors of said Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal, at the City of Baltimore, Maryland, the day and year first above written.

REBECCA EASLEY-ONOKALA, Notary Public My Commission Expires July 13, 2002 CERTIFICATION I, the undersigned officer of St. Paul Fire and Marine Insurance Company, do hereby certify that I have compared the foregoing copy of the Power of Attorney and affidavit, and the copy of the Section of the By-Laws of said Company as set forth in said Power of Attorney, with the ORIGINALS ON FILE IN THE HOME OFFICE OF SAID COMPANY, and that the same are correct transcripts thereof, and of the whole of the said originals, and that the said Power of Attorney has not been revoked and is now in full force and effect.

IN TESTIMONY WHEREOF, I have hereunto set my hand this

_ _ _ _3_l_s_t_ _day of _ _ _M_a_r_c_h_____ , 19 ___22__. MICHAEL R. MCKIBBEN, Assistant Secretary Only a certified copy of Power of Attorney bearing the Certificate of Authority No. printed in red on the upper right corner is binding. Photocopies, carbon copies or other reproductions of this document are invalid and not binding upon the Company.

ANY INSTRUMENT ISSUED IN EXCESS OF THE PENALTY AMOUNT STATED ABOVE IS TOTALLY VOID AND WITHOUT ANY VALIDITY.

29550 Rev. 11-98 Printed in U.S.A.

e Payment Surety Bond Date bond executed: March 31, 1999 Effective date: March 31, 1999 Principal: Virginia Electric and Power Company, One James River Plaza, 701 E. Cary Street, Richmond, VA 23219 Type of organization: Corporation State of Incorporation: Virginia NRC License Number, name and address of facility and amount for decommissioning activity guaranteed by this bond: DPR-37; Surry Power Station, 5570 Hog Island Road, Surry, VA 23883-0315 /

Surety and business address: St. Paul Fire and Marine Insurance Company, 5801 Smith Avenue, Baltimore, Maryland 21209 Type of organization: Corporation State of Incorporation: Minnesota Surety's qualification in jurisdiction where licensed facility is located: Licensed to do business in the State of Virginia.

Surety's bond number: 400 KA 6665 Total penal sum of bond: $13,611,038. oo Know all persons by these presents, That we, the Principal and Surety(ies) hereto, are firmly bound to the U.S. Nuclear Regulatory.Commission.(hereinafter.calledNRC) .in.the.above.penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and severally; provided that, where the Sureties are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum jointly and severally" only for the purpose of allowing joint action or actions against any or all of us, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sum only as is set forth opposite the name of such Surety; but ifno limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.

jt-99/A36. I

e Bon~o. 400 KA 6665 WHEREAS, the U.S. Nuclear Regulatory Commission, an agency of the U.S. Government, pursuant to the' Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, applicable to the Principal, which require that a license holder or applicant for license provide financial assurance that fund*s will be available when needed for facility decommissioning; NOW, THEREFORE, the conditions of the obligation are such that if the Principal shall faithfully, before the beginning of decommissioning of each facility identified above, fund the standby trust fund in the amount(s) identified above for the facility; Or, if the Principal shall fund the standby trust fund in such amount(s) after an order to begin facility decommissioning is issued by the NRC or a U.S. district court or other court of competent jurisdiction; Or, if the Principal shall provide alternative financial assurance and obtain the written approval of such assurance, within 30 days after the date a notice of cancellation from the Surety(ies) is

.received by both the Principal and the NRC, then this obligation shall be null and void; otherwise it is to remain in full force and effect.

The Surety(ies) shall become liable on this bond obligation only when the Principal has failed to fulfill the conditions described above. Upon notification by the NRC that the Principal has failed to perform as guaranteed by this bond, the Surety(ies) shall place funds in the amount guaranteed for the facility(ies) into the standby trust fund.

The liability of the Surety(ies) shall not be discharged by any.payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but in no event shall the obligation of the Surety(ies) hereunder exceed the amount of said penal sum.

The Surety(ies) may cancel the bond by sending notice of cancellation by certified mail to the Principal and to the NRC provided, however, that cancellation shall not occur during the 90 days beginning on the date ofreceipt of the notice of cancellation by both the Principal and the NRC, as evidenced by the return receipts.

The Principal may terminate this bond by sending written notice to the NRC and the Surety(ies) 90 days prior. to Jhe propos.ed. date. oftermination .pro.vided, howeY.er, that no. such .notice. shall become effective until the Surety(ies) receive(s) written authorization for termination of the bond from the NRC.

The Principal and Surety(ies) hereby agree to adjust the penal sum of the bond yearly so that it guarantees a new amount, provided that the penal sum does not increase by more than 20 percent in any one year.

jt-99/A36.2

e Bon~. 400 KA 6665 In Witness Whereof, the Principal and Surety(ies) have executed this financial guarantee bond and have affixed their seals on the date set forth above.

Principal:

Virginia Electric John Corporate Seal Sr. Vice President, CFO and Treasurer Name and Title Corporate Surety:

St. Paul Fire and Marine Insurance Company Corporate Seal By:

Mark W. Edwards, IL Attorney-In-Fact Name and Title 1 .......o Bond Premium: ..._$_2__5......,"'"""8......6..... __o________

., ., ', ' ' *~ . *, *' *. -** . . ;

jt-99/A36.3

.._,.,lheSfRlul Surety POWER OF ST. PAUL FIRE AND MARINE INSURANCE COMPANY

- Washington Street, St. Paul, Minnesota se For verification of the authenticity of this Power of Attorney, you may telephone toll free 1-800-421-3880 and ask for CERTIFICATE OF AUTHORITY NO .

4TTORN~Y NO. the Power of Attorney Clerk. Please refer to the Power of Attorney No. and the named individual(s).

F- 16170 GENERAL POWER OF ATTORNEY - CERTIFIED COPY (Original on File at Home Office of Company. See Certification.)

2110525 KNOW ALL MEN BY THESE PRESENTS: That St. Paul Fire and Marine Insurance Company, a corporation organized and existing under the laws of the State of Minnesota, having its principal office in the City of St. Paul, Minnesota, does hereby constitute and appoint:

Lee McGriff ill, Mark W. Edwards II, Jeffrey M. Wilson, Birmingham, Alabama; RE. Daniels, Anita Rosenau, Pensacola, Florida; individually its true and lawful attomey(s)-in-fact to execute, seal and deliver for and on its behalf as surety, any and all bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, which are or may be allowed, required or permitted by law, statute, rule, regulation, contract or otherwise, NOT TO EXCEED IN PENALTY THE SUM OF FIFIY MILLION DOLLARS($50,000,000)EACH and the execution of all such instrument(s) in pursuance of these presents, shall be as binding upon said St. Paul Fire and Marine Insurance Company, as fully and amply, to all intents and purposes, as if the same had been duly executed and acknowledged by its regularly elected officers at its principal office.

This Power of Attorney is executed, and may be certified to and may be revoked, pursuant to and by authority of Article V,-Section 6(C), of the By-Laws adopted by the Shareholders of ST. PAUL FIRE AND MARINE INSURANCE COMPANY at a meeting called and held on the 28th day of April, 1978, of which the following is a true transcript of said Section 6 (C):

"The President or any Vice President, Assistant Vice President, Secretary or Service Center General Manager shall have power and authority (I) To appoint Attorneys-in-fact, and to authorize them to execute on behalf of the Company, and attach the Seal of the Company thereto, bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, and (2) To appoint special Attorneys-in-fact, who are hereby authorized to certify to copies of any power-of-attorney issued in pursuance of this section and/or any of the By-Laws of the Company, and (3) To remove, at any time, any such Attorney-in-fact or Special Attorney-in-fact and revoke the authority given him."

Further, this Power of Attorney is signed and sealed by facsimile pursuant to resolution of the Board of Directors of said Company adopted at a meeting duly called and held on the 5th day of May, 1959, of which the following is a true exce;Pt:

"Now therefore the signatures of such officers and the seal of the Company may be affixed to any such power of attorney or any certificate relating thereto by facsimile, and any such power of attorney or certificate bearing such facsimile signatures or facsimile seal shall be valid and binding upon the Company and any such power so executed and certified by facsimile signatures and facsimile seal shall be valid and binding upon the Company in the future with respect to any bond or undertaking to which it is attached."

IN TESTIMONY WHEREOF, St. Paul Fire and Marine Insurance Company has caused this instrument to be signed and its corporate seal to be affixed by its authorized officer, this 2nd day of September, A.D. 1998.

ST. PAUL FIRE AND MARINE INSURANCE COMPANY STATE OF MARYLAND} ss.

City of Baltimore MICHAEL B. KEEGAN, Vice President On this 2nd day of September, A.D. 1998, before me came the individual who executed the preceding instrument, to me personally known, and, being by me duly sworn, said that he/she is the therein described and authorized officer of St. Paul Fire and Marine Insurance Company; that the seal affixed to said instrument is the Corporate Seal of said Company; that the said Corporate Seal and his/her signature were duly affixed by order of the Board of Directors of said Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal, at the City of Baltimore, Maryland, the day and year first above written.

REBECCA EASLEY-ONOKALA, Notary Public My Commission Expires July 13, 2002 CERTIFICATION I, the undersigned officer of St. Paul Fire and Marine Insurance Company, do hereby certify that I have compared the foregoing copy of the Power of Attorney and affidavit, and the copy of the Section of the By-Laws of said Company as set forth in said Power of Attorney, with the ORIGINALS ON FILE IN THE HOME OFFICE OF SAID COMPANY, and that the same are correct transcripts thereof, and of the whole of the said originals, and that the said Power of Attorney has not peen revoked and is now in full force and effect.

IN TESTIMONY WHEREOF, I have hereunto set my hand this

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3~l=s~t~_day of ---~M=a=r~c=h~---' 19 --2..2._. MICHAEL R. MCKIBBEN, Assistant Secretary Only a certified copy of Power of Attorney bearing the Certificate of Authority No. printed in red on the upper right comer is binding. Photocopies, carbon copies or other reproductions of_this document are invalid and not binding upon the Company.

ANY INSTRUMENT ISSUED IN EXCESS OF THE PENALTY AMOUNT STATED ABOVE IS TOTALLY VOID AND WITHOUT ANY VALIDITY.

29550 Rev. 11-98 Printed in U.S.A.

e Payment Surety Bond Date bond executed: March 31, 1999 Effective date: March 31, 1999 Principal: Virginia Electric I

and Power Company, One James River Plaza, .

701 E. Cary Street, .

Richmond, VA 23219 Type of organization: Corporation State of Incorporation: Virginia NRC License Number, name and address of facility and amount for decommissioning activity guaranteed by this bond: NPF-4; North Anna Power Station, 1022 Haley Drive, Mineral, VA 23117 Surety and business address: St. Paul Fire and Marine Insurance Company, 5801 Smith Avenue, Baltimore, Maryland 21209 Type of organization: Corporation State of Incorporation: Minnesota Surety's qualification in jurisdiction where licensed facility is located: Licensed to do business in the State of Virginia Surety_'s bond number: 400 KA 6666 Total penal sum of bond: $7,063,818.00 Know all persons by these presents, That we, the Principal and Surety(ies) hereto, are firmly bound to the U.S,NuclearRegulatmy--Cornmission (hereinafter-called NRG}in-the..above penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and severally; provided that, where the Sureties are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum jointly and severally" only for the purpose of allowing joint action or actions against any or all ofus, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sum only as is set forth opposite the name of such Surety; but ifno limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.

jt-99/A36. I

e B o n . . .400 KA 6666 WHEREAS, the U.S. Nuclear Regulatory Commission, an agency of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, applicable to the Principal, which require that a license holder or applicant for license provide financial assurance that funds will be available when needed for facility decommissioning; NOW, THEREFORE, the conditions of the obligation are such that if the Principal shall faithfully, before the beginning of decommissioning of each facility identified above, fund the standby trust fund in the amount(s) identified above for the facility; Or, if the Principal shall fund the standby trust fund in such amount(s) after an order to begin facility decommissioning is issued by the NRC or a U.S. district court or other court of competent jurisdiction; Or, if the Principal shall provide alternative financial assurance and obtain the written approval of such assurance, within 30 days after the date a notice of cancellation from the Surety(ies) is received by both the Principal and the NRC, then this obligation shall be null and void; otherwise it is to remain in full force and effect.

The Surety(ies) shall become liable on this bond obligation only when the Principal has failed to fulfill the conditions described above. Upon notification by the NRC that the Principal has failed to perform as guaranteed by this bond, the Surety(ies) shall place funds in the amount guaranteed for the facility(ies) into the standby trust fund.

The liability of the Surety(ies) shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but in no event shall the obligation of the Surety(ies) hereunder exceed the amount of said penal sum.

The Surety(ies) may cancel the bond by sending notice of cancellation by certified mail to the Principal and to the NRC provided, however, that cancellation shall not occur during the 90 days beginning on the date ofreceipt of the notice of cancellation by both the Principal and the NRC, as evidenced by the return receipts.

The Principal may terminate this bond by sending written notice to the NRC and the Surety(ies) 90 days prior to. the. proposed date. of.termination provided,.however,-that no ,such-notice .shall become effective until the Surety(ies) receive(s) written authorization for termination of the bond from the NRC. .

The Principal and Surety(ies) hereby agree to adjust the penal sum of the bond yearly so that it guarantees a new amount, provided that the penal sum does not increase by more than 20 percent in any one year.

jt-99/A36.2

• Bon"'o. 400 KA 6666 In Witness Whereof, the Principal and Surety(ies) have executed this financial guarantee bond and have affixed their seals on the date set forth above.

Principal:

Virginia Elec John A. S w Corporate Seal Sr. Vice President, CFO and Treasurer Name and Title Corporate Surety:

St. Paul Fire and Marine Insurance Company Corporate Seal By:

Mark W. Edwards, II, Attorney-In-Fact Name and Title Bond Premium:$ 13,421.00 jt-99/A36.3

-lh~~RIUI POWER OF Surety ST. PAUL FIRE AND MARINE INSURANCE COMPANY

- Washington Street, St. Paul, Minnesota se For verification of the authenticity of this Power of Attorney, you may telephone toll free 1-800-421-3880 and ask for CERTIFICATE OF AUTHORITY NO.

ATTORNEY NO. the Power of Attorney Clerk. Please refer to the Power of Attorney No. and the named individual(s).

F-16170 GENERAL POWER OF ATTORNEY - CERTIFIED COPY (Original on File at Home Office of Company. See Certification.)

2110526 KNOW ALL MEN BY THESE PRESENTS: That St. Paul Fire and Marine Insurance Company, a corporation organized and existing under the laws of the State of Minnesota, having its principal office in the City of St. Paul, Minnesota, does hereby constitute and appoint:

Lee McGri.ffIII, Mark W. Edwards II, Jeffrey M. Wilson, Birmingham, Alabama; RE. Daniels, Anita Rosenau, Pensacola, Florida; individually its true and lawful attorney(s)-in-fact to execute, seal and deliver for and on its behalf as surety, any and all bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, which are or may be allowed, required or permitted by law, statute, rule, regulation, contract or otherwise, NOT TO EXCEED IN PENALTY THE SUM OF FIFTY MILLION DOLLARS($50,000,000)EACH and the execution of all such instrument(s) in pursuance of these presents, shall be as binding upon said St. Paul Fire and Marine Insurance Company, as fully and amply, to all intents and purposes, as if the same had been duly executed and acknowledged by its regularly elected officers at its principal office.

This Power of Attorney is executed, and may be certified to and may be revoked, pursuant to and by authority of Article V,-Section 6(C), of the By-Laws adopted by the Shareholders of ST. PAUL FIRE AND MARINE INSURANCE COMPANY at a meeting called and held on the 28th day of April, 1978, of which the following is a true transcript of said Section 6 (C):

"The President or any Vice President, Assistant Vice President, Secretary or Service Center General Manager shall have power and authority (1) To appoint Attorneys-in-fact, and to authorize them to execute on behalf of the Company, and attach the Seal of the Company thereto, bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, and (2) To appoint special Attorneys-in-fact, who are hereby authorized to certify to copies of any power-of-attorney issued in pursuance of this section and/or any of the By-Laws of the Company, and (3) To remove, at any time, any such Attorney-in-fact or Special Attorney-in-fact and revoke the authority given him."

Further, this Power of Attorney is signed and sealed by facsimile pursuant to resolution of the Board of Directors of said Company adopted at a meeting duly called and held on the 5th day of May, 1959, of which the following is a true excerpt:

"Now therefore the signatures of such officers and the seal of the Company may be affixed to any such power of attorney or any certificate relating thereto by facsimile, and any such power of attorney or certificate bearing such facsimile signatures or facsimile seal shall be valid and binding upon the Company and any such power so executed and certified by facsimile signatures and facsimile seal shall be valid and binding upon the Company in the future with respect to any bond or undertaking to which it is attached."

IN TESTIMONY WHEREOF, St. Paul Fire and Marine Insurance Company has caused this instrument to be signed and its corporate seal to be affixed by its authorized officer, this 2nd day of September, A.D. 1998.

ST. PAUL FIRE AND MARINE INSURANCE COMPANY STATEOFMARYLAND} ss.

City of Baltimore MICHAEL B. KEEGAN, Vice President On this 2nd day of September, A.D. 1998, before me came the individual who executed the preceding instrument, to me personally known, and, being by me duly sworn, said that he/she is the therein described and authorized officer of St. Paul Fire and Marine Insurance Company; that the seal affixed to said instrument is the Corporate Seal of said Company; that the said Corporate Seal and his/her signature were duly affixed by order of the Board of Directors of said Company.

IN TESTIMONY WHEREOF, I have hereunto set my band and affixed my Official Seal, at the City of Baltimore, Maryland, the day and year first above written.

REBECCA EASLEY-ONOKALA, Notary Public My Commission Expires July 13, 2002 CERTIFICATION I, the undersigned officer of St. Paul Fire and Marine Insurance Company, do hereby certify that I have compared the foregoing copy of the Power of Attorney and affidavit, and the copy of the Section of the By-Laws of said Company as set forth in said Power of Attorney, with the ORIGINALS ON FILE IN THE HOME OFFICE OF SAID COMPANY, and that the same are correct transcripts thereof, and of the whole of the said originals, and that the said Power of Attorney has not been revoked and is now in full force and effect.

IN TESTIMONY WHEREOF, I have hereunto set my hand this

___3_l_s_t_ _ _.day of _ _M_a_r_c_h ______, 19 ---2..2.._. MICHAEL R. MCKIBBEN, Assistant Secretary Only a certified copy of Power of Attorney bearing the Certificate of Authority No. printed in red on the upper right corner is binding. Photocopies, carbon copies or other reproductions of this document are invalid and not binding upon the Company.

ANY INSTRUMENT ISSUED IN EXCESS OF THE PENALTY AMOUNT STATED ABOVE IS TOTALLY VOID AND WITHOUT ANY VALIDITY.

29550 Rev. 11-98 Printed in U.S.A.

Payment Surety Bond Date bond executed: March 31, 1999 Effective date: March 31, 1999 Principal: Virginia Electric and Power Company, One James River Plaza, 701 E. Cary Street, Richmond, VA 23219 Type of organization: Corporation State of Incorporation: Virginia NRC License Number, name and address of facility and amount for decommissioning activity guaranteed by this bond: NPF-7; North Anna Power Station, 1022 Haley Drive, Mineral, VA 23117 Surety and business address: St. Paul Fire and Marine Insurance Company, 5801 Smith Avenue, Baltimore, Maryland 21209 Type of organization: Corporation State of Incorporation: Minnesota Surety's qualification in jurisdiction where licensed facility is located: Licensed to do business in the State of Virginia Surety's bond number: 400 KA 666 7 Total penal sum of bond: $7,206,045.00 Know all persons by these presents, That we, the Principal and Surety(ies) hereto, are firmly bound to the U.S. Nuclar,Regulatory G0mmission-(hereinafter-called-NRC}in*the above.penal-sum. for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and severally; provided that, where the Sureties are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum 'jointly and severally" only for the purpose of allowing joint action or actions against any or all ofus, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sum only as is set forth opposite the name of such Surety; but ifno limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.

jt-99/A36. l

',11 e Bon~o. 400 KA 6667 WHEREAS, the U.S. Nuclear Regulatory Commission, an agency of the U.S. Government, pursuant to the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, has promulgated regulations in Title 10, Chapter I of the Code of Federal Regulations, Part 50, applicable to the Principal, which require that a license holder or applicant for license provide financial assurance that funds will be available when needed for facility decommissioning; NOW, THEREFORE, the conditions of the obligation are such that if the Principal shall faithfully, before the beginning of decommissioning of each facility-identified above, fund the standby trust fund in the amount( s) identified above for the facility; Or, if the Principal shall fund the standby trust fund in such amount(s) after an order to begin facility decommissioning is issued by the NRC or a U.S. district court or other court of competent jurisdiction; Or, if the Principal shall provide alternative financial assurance and obtain the written approval of such assurance, within 30 days after the date a notice of cancellation from the Surety(ies) is received by both the Principal and the NRC, then this obligation shall be null and void; otherwise it is to remain in-full force and effect. . .

The Surety(ies) shall become liable on this bond obligation only when the Principal has failed to fulfill the conditions described above. Upon notification by the NRC that the Principal has failed to perform as guaranteed by this bond, the Surety(ies) shall place funds in the amount guaranteed for the facility(ies) into the standby trust fund.

The liability of the Surety(ies) shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but in no event shall the obligation of the Surety(ies) hereunder exceed the amount of said penal sum.

The Surety(ies) may cancel the bond by sending notice of cancellation by certified mail to the Principal and to the NRC provided, however, that cancellation shall not occur during the 90 days beginning on the date of receipt of the notice of cancellation by both the Principal and the NRC, as evidenced by the return receipts.

The Principal may terminate this bond by sending written notice to the NRC and the Surety(ies) 90 days prior to_the proposed date.of.termination.provided,.how.e:v:er,. that no.such notice shall.become effective until the Surety(ies) receive(s) written authorization for termination of the bond from the NRC.

The Principal and Surety(ies) hereby agree to adjust the penal sum of the bond yearly so that it guarantees a new amount, provided that the penal sum does not increase by more than 20 percent in any one year.

jt-99/A36.2

'JI e Bon~O- 400 KA 6667 In Witness Whereof, the Principal and Surety(ies) have executed this financial guarantee bond and have affixed their seals on the date set forth above.

Principal:

Virginia Electric B:

John A. Sh Corporate Seal Sr. Vice President, CFO and Treasurer Name and Title Corporate Surety:

St. Paul Fire and Marine Insurance Company Corporate Seal By:/Lw(lJ/~

Mark W. Edwards, II. Attorney-In-Fact Name and Title Bond Premium: ...,$_13~*~6_9_1_._oo_ _ _ _ __

jt-99/A36.3

l"I

• ,. .'J\l.e~RIUI POWER OF Surety ST. PAUL FIRE AND MARINE INSURANCE COMPANY

- Washington Street, St. Paul, Minnesota sw .

For verification of the authenticity of this Power of Attorney, you may telephone toll free 1-800-421-3880 and ask for CERTIFICATE OF AUTHORITY NO.

ATTORN]j:Y NO. the Power of Attorney Clerk. Please refer to the Power of Attorney No. and the named individual(s).

F-16170 GENERAL POWER OF ATTORNEY - CERTIFIED COPY (Original on File at Home Office of Company. See Certification.)

2110527 KNOW ALL MEN BY THESE PRESENTS: That St. Paul Fire and Marine Insurance Company, a corporation organized and existing under the laws of the State of Minnesota, having its principal office in the City of St. Paul, Minnesota, does hereby constitute and appoint:

Lee McGriffID, Mark W. Edwards II, Jeffrey M. Wilson, Birmingham, Alabama; R E. Daniels, Anita Rosenau, Pensacola, Florida; individually its true and lawful attorney(s)-in-fact to execute, seal and deliver for and on its behalf as surety, any and all bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, which are or may be allowed, required or permitted by law, statute, rule, regulation, contract or otherwise, NOT TO EXCEED IN PENALTY THE SUM OF FIFTY MILLION DOLLARS($50,000,000)EACH and the execution of all such instrument(s) in pursuance of these presents, shall be as binding upon said St. Paul Fire and Marine Insurance Company, as fully and amply, to all intents and purposes, as if the same had been duly executed and acknowledged by its regularly elected officers at its principal office.

This Power of Attorney is executed, and may be certified to and may be revoked, pursuant to and by authority of Article V,-Section 6(C), of the By-Laws adopted by the Shareholders of ST. PAUL FIRE AND MARINE INSURANCE COMPANY at a meeting called and held on the 28th day of April, 1978, of which the following is a true transcript of said Section 6 (C):

"The President or any Vice President, Assistant Vice President, Secretary or Service Center General Manager shall have power and authority (1) To appoint Attorneys-in-fact, and to authorize them to execute on behalf of the Company, and attach the Seal of the Company thereto, bonds and undertakings, recognizances, contracts of indemnity and other writings obligatory in the nature thereof, and (2) To appoint special Attorneys-in-fact, who are hereby authorized to certify to copies of any power-of-attorney issued in pursuance of this section and/or any of the By-Laws of the Company, and (3) To remove, at any time, any such Attorney-in-fact or Special Attorney-in-fact and revoke the authority given him."

Further, this Power of Attorney is signed and sealed by facsimile pursuant to resolution of the Board of Directors of said Company adopted at a meeting duly called and held on the 5th day of May, 1959, of which the following is a true excerpt:

"Now therefore the signatures of such officers and the seal of the Company may be affixed to any such power of attorney or any certificate relating thereto by facsimile, and any such power of attorney or certificate bearing such facsimile signatures or facsimile seal shall be valid and binding upon the Company and any such power so executed and certified by facsimile signatures and facsimile seal shall be valid and binding upon the Company in the future with respect to any bond or undertaking to which it is attached."

IN TESTIMONY WHEREOF, St. Paul Fire and Marine Insurance Company has caused this instrument to be signed and its corporate seal to be affixed by its authorized officer, this 2nd day of September, A.D. 1998.

ST. PAUL FIRE AND MARINE INSURANCE COMPANY STATE OF MARYLAND} ss.

City of Baltimore MICHAEL B. KEEGAN, Vice President On this 2nd day of September, A.D. 1998, before me came the individual who executed the preceding instrument, to me personally known, and, being by me duly sworn, said that he/she is the therein described and authorized officer of St. Paul Fire and Marine Insurance Company; that the seal affixed to said instrument is the Corporate Seal of said Company; that the said Corporate Seal and his/her signature were duly affixed by order of the Board of Directors of said Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal, at the City of Baltimore, Maryland, the day and year first above written.

REBECCA EASLEY-ONOKALA, Notary Public My Commission Expires July 13, 2002 CERTIFICATION I, the undersigned officer of St. Paul Fire and Marine Insurance Company, do hereby certify that I have compared the foregoing copy of the Power of Attorney and affidavit, and the copy of the Section of the By-Laws of said Company as set forth in said Power of Attorney, with the ORIGINALS ON FILE IN THE HOME OFFICE OF SAID COMPANY, and that the same are correct transcripts thereof, and of the whole of the said originals, and that the said Power of Attorney has not been revoked and is now in full force and effect.

IN TESTIMONY WHEREOF, I have hereunto set my hand this

___3cc.-l_s_t_ _ _day of _ _ _M_a_r_c_h_____ , 19 ---22__. MICHAEL R. MCKIBBEN, Assistant Secretary Only a certified copy of Power of Attorney bearing the Certificate of Authority No. printed in red on the upper right comer is binding. Photocopies, carbon copies or other reproductions, o'f this document are invalid and not binding upon the Company.

ANY INSTRUMENT ISSUED IN EXCESS OF THE PENALTY AMOUNT STATED ABOVE IS TOTALLY VOID AND WITHOUT ANY VALIDITY.

29550 Rev. 11-98 Printed in U.S.A.

Attachment 3 VIRGINIA ELECTRIC AND POWER COMPANY SURRY AND NORTH ANNA POWER STATIONS UNITS 1 AND 2 DECOMMISSIONING FINANCIAL ASSURANCE Qualified Nuclear Decommissioning Trust Agreement As Amended and Restated Dated May 4, 1994 And Non-Qualified Nuclear Decommissioning Trust Agreement As Amended and Restated Dated May 4, 1994

VIRGINIA ELECTRIC AND POWER COMPANY QUALIFIED NUCLEAR DECOMMISSIONING TRUST AMENDED AND RESTATED TRUST AGREEMENT

e e VIRGINIA ELECTRIC AND POWER COMPANY QUALIFIED NUCLEAR DECOMMISSIONING TRUST -

AMENDED AND RESTATED TRUST AGREEMENT THISJ.R?T AGREEMEN1:tAMENDMENT AND RESTATEMENT MADE THE of /It , Jqq..,-, between VIRGINIA *ELECTRIC AND POWER -.

1-lii day COMPANY, a Virginia corporation, the Granter, and MELLON BANK, N.A., a national banking association with trust powers, *the Trustee, provides:

WHEREAS the Granter entered into a Trust Agreement with CRESTAR

.BANK (formerly United Virginia Bank), dated De_cember 31, 1985, as amended and restated June 22, 1988, to establish the VIRGINIA ELECTRIC AND POWER COMPANY QUALIFIED NUCLEAR DECOMMISSIONING TRUST (the "Trust").

WHEREAS section 2.01 of the Trust Agreement provided for the appointment of a successor Trustee;

.WHEREAS the Granter has appointed the Trustee as successor Trustee and the Trustee has accepted such appointment; WHEREAS section 5. 01 of the Trust Agreement re*served to the Granter the right to amend the Trust Agreement subject to certain restrictions; and WHEREAS the Granter now wishes to amend and restate the Trust Agreement.

NOW, THEREFORE, the Granter and the Trustee agree to amend and restate the Trust as follows:

ARTICLE 1. GENERAL PROVISIONS 1

1. 01. Name, Trust Fund.

The namea-of the Trust is the VIRGINIA ELECTRIC AND POWER

'COMPANY QUALIFIED NUCLEAR DECOMMISSIONING TRUST. The Trust Fund is the entire undistributed amount of all contributions placed-with the Trustee, as adjusted for all income, expense, gain, or loss on such amount as may exist from time to time.

• ,*** *** '****** -., **--~* **** **** "- '*~ *-*~***~""" **, "****.--.,~ ** , . , . ,., . ._ ** ,_...... *>>***r, ***r , *.**,,,-*** *'*'*'""-""********t'.'**-,****e,..*r* ,,-, ~~-**~*

1.02. Granter, Trustee.

The Granter of this Trust is Virginia Electric and Power Company and its successors and assigns as provided in section e e 5.03 of this Agreement. ~he Trustee under this Agreement is Mellon Bp.nk, N.A., :its -~u~cessors and assigns, or any other-~

person, *company,- _bank-,_ or- trust company appointed as provided in section 2.01 of this Agreement.

1.03. Trust Committee.

The Granter may establish a Nuclear Decommissioning-Trust Committee (the "Committee") composed of any. three or more persons appointed by the Grantor's Board of Directors on whatever terms the Board*desires. The Committee has the authority to exercis-e all of the Granter's -powers under the Agreement, and for purposes of Sections 2.03(c) and (d) and Section 3.04(g), the Trustee will be protected in treating the directions and other actions of the Committee as the directions or actions of the Granter. The Granter must certify to the Trustee all appointments to or removals from the Committee, and the Trustee must recognize written instructions signed by any committee member as a directive from the Committee.

1.04. Separate Reserve Funds.

The Trust Fund may be divided into separate Reserve Funds as

- designated by the Granter, and each Reserve Fund provides for the decommissioning of a specified unit of a nuclear power plant. Each Rese.rve Fund. is established as a trust under state law. Each Reserve Fund will be segregated and maintained apart from the assets of other Reserve Funds and any other assets of the Trust Fund. Separate accounting and-separate funding will be observed, and each Reserve Fund shall be treated as a separate trust. Reserve Funds may be commingled for-investment purposes -in accordance with section 3.02 of this Agreement. -

ARTICLE 2. TRUSTEE APPOINTMENT, REMOVAL, LIABILITY 2.01. Appointment, Removal, Successors.

(a) The Trustee is named above. The Grantor.may appoint orie or more persons as additional or successor Trustees. A Trustee may resign on thirty days' notice in writing to the Grantor. The Granter may remove any Trustee by thirty days' written notice to each Trustee. Upon the*resignation or *

• removaL_-;Of a Tr.ustee, the Grantor will appoint a successor Trustee, who will have the same powers and duties as the

• predecessor Trustee. Additional Trustees may be appointed in the same manner as a successor Trustee. -

-*(-b} ****A**-suce*ess-or . ---T-r-u-s-t--ee* ..*may--qu-a-1-i-f.y ...by- ... e~ecut.ing. , ....... .

acknowledging, and delivering acceptance to the Granter in a form satisfactory to the Granter. The successor without further act, deed, or conveyance is vested with all the estate, e e rights, powers, and discretion of .the predecessor Trustee just as if orj.ginally -

nam.ed- a_s, --*- ...

a Trustee- -

in- this Agreement. *

~=:..- -- .

(c) When a successor Trustee accepts, the predecessor Trustee (or representative, if the predecessor Trustee is unable or unavailable) will assign, transfe~ title, and pay over to the successor Trustee the funds and properties then constituting the Trust Fund. The predecessor Trustee (or representative) is authori.zed,* however, to reserve a sum of

, money deemed advisable for payment of fees arid expenses in

- connection with the transfer and settlement of the Trust Fund or otherwise (all subject to the limitation in section 5.04 of this Agreement), and any balance of that reserve remaining after the payment of fees -and expenses will b.e paid over to the successor Trustee.*

(d) If two Trustees are serving, acts and decisions of the Trustee will be made unanimously, If more than two .

Trustees are serving, acts and decisions of the Trustee will be*

made by a majority vote. Without designation, one of the Trustees may execute instruments or documents on behalf of alf the Trustees until any Trustee objects in wrfting to the other Trustees. If the Trustees are deadlocked or otherwise unable to act, the Gran.tor will appoint additional* or successor Trustees (which may be or include existing Trustees).

(e) If more than one Trustee is serving, a meeting need '*

not be called or held for the Trustees to .make decisions or take actions; deci~ions* ~ay be made 6r action taken by written documents signed by the requisite n~mber of Trustees. The Trustees may delegate to one or more of their number authority

• to sign documents on behalf of the Trustees or to perform.

ministerial acts, but no Trustee to whom that*authority is delegated may perform an act involving the exercise 6f discretion without first obtaining the concurrence of the requisite number of other Trustees, even though the one alone may sign a document required by third parties.

(f) The Trustee may adopt or amend bylaws and regulations that the Trustee deems desirable for the conduct of trustee affairs.

I (g-1;= The Trustee will keep a record of all Trustee 0

proceedings and acts and all other data necessary for the proper administration of_ the __1'rust. The Trustee will notify the Gran.tor of any_ Truste_e action lakeri, arid when required by law, will notify any other interested party. *

.........,, ., ..... - . --~ ......... ~- .. - ""'"'* - --~ **- *~ ........, _,.._...,_***-~--~ ..---- ..,--...... *- .................. " .,,.,. *.*--, 1,,.,,,.., ............, ** ,,.,, *. ...., **.** *****--1,.

2.02 Establishment And Acceptance Of Trust.

(a) All contributions to the Trust Fund (other than e e deemed contributions under *Treasury Regulations section 1.468A-8ib)(2)(iv)(A)) ~u:;:t ~-e made in cash.

(b) At the time it makes any contribution to the Trust Fund, the Grantor will specify in a writing then delivered to the Trustee the exact amount or portion of the contribution that is to be placed in each Reserve Fund then existing. The Trustee shall not accept contributions from other than the

• Grantor without the Grantor's written approval for each such contribution, and an exact written allocation of such a

. contribution among the Reserve Funds then existing must accompany the contribution. The Trustee has no right or duty to inqui~e into the amount of or the method used in determining any contribution or the allocation of.any.contribution among the Reserve Funds. The Trustee is accountable only for funds actually received. The Trustee has no duty to compute or collect the amount to be paid to it by the Grantor.

(c) All contributions and income from contributions -will be-held, managed, and administered in trust according to the terms of thi~ Ag~eement. -

(d) No part of the Trust Fund may be used for or diverted to purposes other than the exclusive purposes allowed by this Agreement, as described in sections 5.04 and 6.01 of this Agreement.

(e) __ The Trustee. now accepts the Trust created by this Agreement and will perform the-Trustee'~ duties ~nder this*

Agreement.

• _ 2.03. Limitation Of Liability.

(a) To the extent permitted by law, the Trustee will --

serve without bond; the Trustee will secure and pay for required bonds. Except as*otherwise provided in this Agreement, no Trustee is liable for any act or omission of any other Trustee or for any act or omission of any other person.

At its own expense, the Granter is entitled to employ its own

_ counsel to defend or maintain, either in its own name or in the

. name of any Trustee, with said Trustee's approval, any suit*or litigation arising under this Agree'ment involving the Trustee.

(b) The Trustee is not liable for the making, retention, or sale __ of__ a_11y i~yestm~nt o_r reJnves_tment made as provided in this Agreement, but the Trustee is liable-_ for any loss to or diminution of the Trust Fund due to the Trustee's gross

• neglig*en:ce ..;**-wii*l-ful-*mis-c-onduet;***or*--1-aek****of--good- -f:ai-th-in- ...

carrying out the terms of this Agreement.

e e (c) The Trustee is ful-ly protected and indemnified when relying 9n a writtel! _COIIlJ!ltmication from a properly designateg.

officer or employ_ee~.of .£he Granter concerning an instruction or direction of the Granter and in continuing to rely upon a communication until a subsequent communication is filed with the Trustee. The Trustee is fully. protected. and indemnified in acting on any instrument,* c~rtificate, or paper believed by the Trustee to be genuine and to be signed or presented by the _

proper person. ' The_ Trustee is under no duty to make any investigation or inquiry as to any statement contained in any

• written communication or document signed by the proper person, but may accept it as conclusive evidence of the truth and the accuracy of the statements contained.

(d) The Granter will indemnify the Trust Fund and the Trustee against any liability imposed as a result of a claim asserted by any person or entity if the Trustee has acted in good faith reliance on the terms of this Agreement or a written direction of the Granter.

2.04. Discharge After Distributions Or Termination; After all distributions (including distributions to a successor Trustee) or any termination under this Agreement or applicable law, the Trustee is discharged from all obligations under this Agreement, and no person or entity has any further right or*

claim against the Trustee not otherwise provided by statute.

2.05. ~egal Arition.

In all lega1 actions regarding the Trust and this Agreement, the Trustee ~nd.the Granter are the only necessary pa~ties. A final judgment not appealed or appealable.entered in an action or proceeding against the Grantor, the Trust, or the Trustee is binding and conclusive on the parties to this Agreement and all persons having or claiming to have any interest in the Trust Fund.

ARTICLE 3. INVESTMENT DUTIES, POWERS 3 01.

1

• Stated Investment Policy.

Certain-_-J..imi tat ions are placed on investing in and disposing of some securities to avoid disqualification of the Trust for tax purposes an~_ to minimize potential problems with securities regulations._ As provided by law and section 5.04 of this Agreement, an investment must not result in a diversion or use of Trust*. *a-sset*s-.. tha-t-*-i-s----no-t---pe-rmi.tted-.u.nder .. InternaL..Rev.enue Code section 468A. The Trustee's investment policy for assets within the Trustee's investment control will be to realize the greatest appreciation of the Trust Fund as may be possible within the limits of this Agreement and prudent fiduciary practices, whether- the appreciation is by way of current income accumula*tion or _b}'.:,_ appr.ec:-ia\~?-~ in ~he.,:market value pf ass-ets; In its annual report tO. the Gran.tor, the Tr~stee will advise of the Trustee's investment policy or strategy.

• Formulatiop of.

the policy is the Trustee's responsibility as long as the Grantor has not exercised ._its right to direct the investments

_under section 3. 04. The Trustee must* consider the stated purposes of the Trust and*- this 'Agreement,

• statutory _*_ -

requirements, and othei; __rel!:!vant information .apd .standard~

before stipulating the stated investment policy.** The* Trustee may consult with the Granter, .counsel, and inve'stmerit advisors

-_ for fact-finding purposes before so st_ipulating.

• 3.02. Investment Of Trust Fund.

The assets of two or more Reserve Funds may be commingled for investment purposes as the Grantor directs. ').'heTrustee*shall apportion any earnings or losses from an investment made. with commingled assets to each participating Reserve Fund in th~-

_same proportion that the amount invested from each Reserve F:und bears to the total amount invested. Subject.to the .

provisions of section 3.04 of this Agreement,.the Trustee will invest and reinvest the principal and_ incom~ of -each Rese.rve Fund and keep those *trust assets invested,. without distinction-.

between p_rincipal and income .. If assets of tw6 or in.ore Reserve Funds are* coimriirtgled for investment purposes;_ the Gran.tor shall -

have the absolute authority to direct the Trustee . at *any time i

.to: liquidate the interests of* the *Reserve Fund :.iri -a **commingled. --

investment, and the-trustee shall promptly complywitli aily such _

directive. Except*-as"<provided in Section 5. OZ; upon _* * *

• _* * * -

• liquidation of a Reserve Fund in. a- commingled investment, the *_

interests of the other Reserve -Funds_ will also be liquidated - -

and de*posi ted with each Reserve Fund..

• Such investments shall be limited to*the followiFg: * : .. C"

(a) .. publicly traded domestic or foreign common- and' preferred stocks and options thereon,_- as well as w~rrants _; .

rights. and preferred stocks convertible into common stock, :

regardless -of where ,or how* traded. ** * * * **

.- . {-b-)- investment grade domestic. corporate bonds- and -

0 debentures and* any such securities which are convertible into - 0 common stock, domestic or foreign._ - *_J_ ' - -

. (c) bonds or other obligations- of the United-'States* of:

Amer ica:__p ..£ iion.:u. s*:-*-*s*overefigir-*aebt"-with"':an***e*quivarent~:-rat-ing of -

A or higher.

• e e (d) investment grade*obligations of the states and of municipa,li ties or of. _.an¥ ~gencies thereof.

(e) investment grade notes of any nature, of foreign or domestic issuers.

(f) savings accounts, certificates of deposit and other types of time deposits, bearing a reasonable rate of interest based upon the duration, amount, type*and geographical area, with any financial institution or quasi-financial institution or any department of_ the same, either_ domestic or foreign, -

under the supervision of the United States .or any State, including any Trustee in its corporate or association capacity (including any department or division of the same) or a corporation or association affiliated with the same.

(g) any collective, common or pooled trust fund operated or maintained exclusively for the commingling and collective investment of monies or other assets including any such fund operated or maintained by the Trustee or its affiliate. ,

Notwithstanding the provisions of this Agreement which place restrictions upon the actions of-the Truste, to the extent monies or other assets are utilized to acquire units of any collective trust, the terms of the collective trust indenture shall solely govern the investment duties, responsibilities and powers of the trustee of such collective trust and, to the extent required by law, such terms, responsibilities and powers shall be incorporated herein by-reference and shall be part of this Agreement. For purposes of valuation, th~ value of the

.interest maintained by a Reserve Fund in such collective trust shall be the fair market value of the collective fund units held, determined in accordance with generally recognized valuation procedures. The Grantor expressly understands and agrees that any such collective fund may provide for the lending of its securities by the collective fund trustee and_

that such collective fund*' s trustee will receive compensation_

from such collective fund for the lending of securities that is separate from any compensation of the Trustee hereunder, or any compensation of the collective fund trustee for the management of such collective fund.

(h) open-erid and closed-end investment companies, regardl.~s of the purposes for which such-fund or funds were created, (including those for which the Trustee or an affiliate provides services for a fee), and any partnership, limited or unlimited, joint venture and other forms of joint enterprise created for any lawful purposes *othe-rwise consistent with the invest-ment-* -guidelin-S*--set--fo:J?-t-h -he-:rein .. --*---**--* _,, ............ ,. _. ""' *-** ,,.

(i) Notwithstanding anything else in this Agreement to the contrary, including, without limitation, any specific or general power granted to the Trustee, including the power to e e invest in real property, no .portion of a Reserve Fund shall be invested. in real estc1-te ._ , For this purpose, "real estate" - _

includes, but is- _not_ limited~~to, real property, leaseholds or mineral interests. *

• 3.03. Additional Powers Of Tiustee .

. The *Trustee has the following powers and authority. in the administration and investment of*the Trust Fund, to be ex~rcised ~ubj~ct to the other provisions of this Agreement and especially this Arti~le 3:

(a) To purchase, subscribe for, and hold securities or other property authorized by sections 3 .. 01 and 3.02 as i proper investment for the Trust-Fund, and to retain the same in trust.

(b) To sell for cash or credit, exchange, convey, transfer, or otherwise dispose of any securities or other property held in each Reserve Fund, by private contract or at public auction. No person dealing with the Trustee is bound to_

see to the application of the purchase money or to inquire into the validity, expediency, or-propriety of any sale or other disposition.

I (c) To vote any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of .substitution; to exercise any conversion pr_ivileges, subscription rights, or other options, and to make any incidental payments; to oppose, consent to, or-otherwise_

.participate in corporate reorganizations or other changes affecting corporate securities, and (unless prohibited by

• statute)* to delegate discretionary powers, and to pay any

related.assessments or charges; and generally to exercise any ownership powers over stocks, bonds, securities, or other property held as part of a Reserve Fund.*

(d) To keep part of a Reserve Fund in cash or cash balances invested in interest-bearing accounts if the Trustee ..

deems that to be prudent under the circumstances.

(e) To accept and retain for as long as the Trustee deems advisable any securities or other property received or acquired as TruS-t..ee, regardless of any lack of diversification.

_ .. (f) ___ To make, execute, acknowledge, and deliver documents of transfer and conveyance* and other instruments *that may be necessary or appropriate to carry out the Trustee**s powers.

• , '- . .:- .. c*, "* .~ 4.,._.,.,. ~, .**..,.*. ~***"'*' ~.... .... .* . ....., ** ,,...** *****-*

"***-'"*-**~ . ---- *-*"--~,~. .,.~.---'*"*** ........... ,, ........... ,...,~,-, ..... ,,.. ,.... _,_ ...... - .

(g) To settle, compromise, or.submit to arbitration any claims, debts, or damages due or owing to or from a Reserve Fund, to commence or defend legal or administrative e e proceedings, and to represent the Trust in all legal or administ~ativ~ procee4i~gs- -*- ... .. _

. ...__ . ~:-:.- -~ .

(h) To employ suitable agents and counsel (who may be counsel of the Grantor) and to pay their reasonable expenses and compensation.

• (i) .On direction by the Granter as to the agent and insurance company, to invest in irisurance contracts if and as.

~. allowed under Internal Revenue Code .section 468A, payable to the Trustee or its assignees as beneficiary.

(j) to purchase, enter, sell, hold, and generally _deal in any manner in and with contracts for*the immediate or future delivery of financial instruments of any issuer or of any other property; -to grant, purchase, sell, exercise, permit to expire,*

permit to be held in escrow, and otherwise to acquire, dispose of, hold and generally deal in any manner with and in all forms of options in any combination.

(k) To enter into contracts, in a form determined by the*

Trustee, with one or more persons, firms, associations, or corporations to obtain advice and counsel about investments.

(1) To enter into arrangements for the deposit of funds with banks or trust companies and in connection with the arrangements:

(1) To authorize the depositary to act*as custodian of the cash, -securities, or.other property comprising the funds; (2) To authorize the depositary to convert the funds in whole or in part into, or to invest and reinvest the same in, securities of any kind and nature permitted in this Agreement; and (3) To provide for the payment to the depositary of reasonable compensation for its services.

(m) To cause any securities or other property held as part of* a Reserve Fund to be registered in its own name or in the namecc:-of one or more of its nominees, and to hold any

• investments in bearer form, but the books and records of the Trustee must at all times show that the investments are part of a Reserve Fund.

• • (n:y*- *70. -p*a:rti-cipate****in-*any-m-er-gers--0-1:.... con-sol-idations,. or any registrations of securities with state or federal authorities regarding any securities held.

e (o) To do all acts, take all proceedings, and exercise all righ;ts and privileges_, although not specifically mentio11_ed here, as the Trustee-deems necessary to administer the Trust Fund and to carry out the purposes of this Agreement.

3.04. Directing The Trustee.

(a) Directed *investments under* this section 3.. 04 ma_y not

• exceed the total of a Reserve Fund.

(b) Subject to the limitation of paragraph (a), the Trustee at the written direction _of the Granter will segregate the value requested and will after that invest, reinvest, and otherwise deal with that Segregated Amount as directed by the Grantor if it is consistent with the terms of this Agreement.

(c) If exercised, the Grantor's right to direct investment and reinvestment includes the *right to select.

investment managers, brokers, salesmen, or agents to handle investments or execute investment orders. The Granter may give.

an investment manager any of the Grantor's powers, pursuant-to this section 3.04 or otherwise, by so certifying in writing to the Trustee. The Trustee is not responsible for the selection,

• terms of appointment, compensation, or conduct of any investment manager, broker, salesman, or agent selected by the Granter, but the Trustee is resp*onsible

• for its own actions in its dealing with such persons in accordance with the provisions of section 2.03 of .this Agreement. For purposes of Sections 2*. 03(c) and (d) and Section 3. 04(g), the Trustee will be *-

protected in treating the directions and other actions of the inves*tment manager as the directions or actions of the Granter.

(d) In the absence 6f directions under section 3.04, the Trustee is free to proceed without*the concurrence or

• affirmative expression of the Grantor to handle, manage, control, invest, and reinvest the Trust assets that *are not Segregated Amounts under the powers granted in this Agreement with the same force and effect as if this section were not a part of this Agreement.

(e) No person dealing with the Trustee is required to determine whether any sale or purchase by the Trustee has been authorized or directed by the Granter, and each is fully

• protected in dealing with the Trustee in the 'same manner as if this section were not a part of this Agreement.

(f) Whenever the Trustee is difected to purchase or sell*

ass ets***-in-*~a -Re*se-r-ve--Fund ;**-t-he--T-rus-tee---i.n....i.t.s.-.sole._ dis.er et ion is permitted at the expense of the Trust to obtain an appraisal of the value of the assets to be purchased or sold.

e e (g) Subject to the power of the Grantor as described in this section, the po:w~rf!'"" gra~ted the Trustee under sections -~

3. 02 and* 3. 03 of- -this Agr-eement. will be exercised in the discretion of the Trustee. Neither the Trustee nor any other.

persons is under a duty to question the Grantor's direction, and the Trustee will comply as promptly as possible with the such direction if it is cons is tent with the terms .Of this

.Agreement. -.-

3. 05. Prohibition Against* Self-Dealing.

The.Grantor and the' Trustee will perform no act of self-dealing within the meaning of Internal Revenue Code section 495l(d),

. except for those acts *expressly permitted* by Treasury

• Regulations section l.468A-5(b)(2).

ARTICLE 4. OT.HER DUTIES OF TRUSTEE 4.01. Payments From A Reserve Fund.

On the written direction of the Grantor, the Trustee will make payments and transfers from a Reserve Fund to the persons or entities, in the manner, in.the amounts, andfor the purposes:

specified in the written directions. After payment, the amount

• paid is no longer a part of_the Reserve Fund.- Each Granter direction will include a representation by the Grantor that .the payment-is in accordance with the purposes of.this Agreement.

the Trustee is not responsible £or the application of the payments or.for the adequacy_of a Reserve Fund after payment to meet.and discharge Trust liabilities.

4. 02. -Payment Of Compensation, -Expenses. And Taxes.

(a) The Trustee will be paid.reasonable compensation as agreed upon from time to time in writing by the Grantor and the Trustee. In addition, the -Trustee will be reimbursed from the Reserve Funds *or, at the option of the Grantor, by the Grantor for all ordinary and necessary expenses incurred in connection with the operation of the Trust, including federal income tax imposed on the modified gross income of the Trust, any state or local tax imposed on the incom~ or assets of the Tru~t, legal*

expense~~~ accounting expenses, actuarial expenses, and trustee compensation and expenses. All taxes levied or*assessed *on or in respect of a Reserve Fund, whether. assessed to the Reserve Fund 6r the Granter, will be paid, at the option of the.

Granter, by the Granter, or from the Trust Fund and pro rated among* *tfre-* *Re-serve*-Funds---i-n--*p-ro-po*r*t-io-n--to*-*t-he-i-1:- *r-es.pect.-ive.

fair-market values at the preceding calendar year end in the case of property taxes and in proportion to their respective taxable incomes for the relevant taxable year in the case of income taxes. To the extent that any taxes are provoked by the e e investment in or receipt of .an identifiable asset or transactton involvil!g a _p~rticular Reserve Fund, the taxes w_ill be charged against--*the. approp.ri_ate Reserve Fund, giving appropriate effect to computations of income and deductions related to the asset or transaction, and allocating any

• exemption available among the Reserve Funds .in proportion to the tax liability provoked. Identifiable direct expenses will be treated in the same way as taies. * *

(b) The Trustee will prepare and file tax returns for the Reserve Funds as dir_ected

• by the Granter, provided that the Grantor shall indemnify the Trustee for - any penalties, additions to tax, or other amounts for which it may be charged due to a-position taken on such returns. ;The Trustee may assume that any taxes assessed-on or with respect to the Reserve Funds are lawfully assessed unless the Granter advises the Trustee in writing that in the opinion of counsel for the Granter the taxes are or may be unL:1.wfully *assessed. When so advised and requested in writing by the Granter, the Trustee will contest the validity of the taxes in any manner deemed appropriate by the Grantor or its counsel, in which event the Trustee will execute all documents, instruments, claims, and petitions necessary or advisable in the opinion of the Granter or its counsel for the refund, abatement, reduction, or elimination of taxes. Reasonable expenses incurred by the Trustee in connection with such a contest*will be reimbursed as provided in-paragraph (a) of.this sect1on. *

(c) No pro.vision of --this -section will be effective to the

• extent that it would violate Internal Revenue Code section 468A, especially in so far as it relates to Internal Revenue Code --section 4951.

4.03. Accounting.

(a) The Trustee will keep accurate and detailed accounts of all investments, receipts, disbursements, and other transactions for each Reserve Fund and for the Trust Fund. All accounts, books, tax returns, and records relating to the Trust are open to inspection and-audit at all reasonable times -by any person-designated . by the Granter.

(b-):c:" Within sixty days after the end of each calendar year and within sixty days after the removal or resignation of a Trustee as provided in section 2.01, the Trustee will file a written report of-the investments, receipts,-disbursements, and other transactions during the year or during the* period from the -c-lose-- of-- t-he---last---yea-:1;. -to . . t-he.--date ....of ..-the .. .Tr.us.t.ee ~.s ... removal or resignation, including the current value of the Reserve Funds. After ninety days from the date of filing that annual or other accounting, the Trustee is forever released and discharged from all liability and accountability to anyone with e e respect to the propriety of* acts and transactions shown in the accountiIJ.g, except ~qr aJ:tS or transactions as to which the --*

Grantor files written*ooJections with the Trustee within the ninety-day period .

. (c) Except as specifically provided by. statute, no person other than the Grantor may require an accounting or bring an action against the Trustee*about the Trust or the actiotis of -

the Trustee. The* Trustee is not required to make reports to

._ any courts or administrative agencies, except as specifically

• required by* statute._

4.04. Valuation.

(a) As of each calendar year end, the Trustee will determine the fair-market value of the Trust Fund and each Reserve Fund and report that value to the Grantor in writing.

The valuation determined according to this section is binding on the Grantor, and all other persons interested in the T~ust.

(b) Non-cash contributions are valued at fair-market value determined by the Trustee as of the actual date on which the Trustee accepts the property.

(c) In*determining the net worth of the Trust Fund and*

the Reserve Funds, the Trustee will allocate among such Reserve Funds and deduct all allocable expenses.

ARTICLE 5. AMENDMENT AND TERMINATION OF THE TRUST 5.01. Amendment Of The Trust.

The Grantor has the right at any time to amend this Agreement in whole or in part, but (a) Except to permit the return of contributions found not to be deductible for federal income tax purposes to whatever extent such return may be accomplished without .

disqualifying the Trust under Internal Revenue Code section 468A, no amendment may authorize or permit any assets of the Trust Fund (other than those required to pay taxes and other administration expenses) to be used for or diverted to purposes other t-han those allowed by Internal Revenue Code section 468A, and (b) No amendment may be made that changes the Trustee's duties or liabilities without the Trustee's written consent.

.. . . ..* -~*, ..............,........ ....... ,,

An amendment may be made retroactively if such application is necessary to bring the Trust, the Grantor, or the Virginia Electric and Power Company Non-Qualified Nuclear Decommissioning Trust (another trust between the Grantor and t

e e the Trustee) into conformity-with the Internal Revenue Code, Treasury. regulations.,.: o:r;__ any other applicable statute- or regulation. * * * -~:.---*

5.02. Irrevocability Of Reserve Funds.

Each Reserve Fund is irrevocable. Except as otherwise provided by*law, each Reserve Fund terminates upon completion of its nuclear power plant decommissioning *that it has* been *created to.

. fund as certified to the Trustee by the Grantor, upon disqualification of the Reserve Funds under Internal Revenue Code section 468A, or upon the frµstration or failure of the*

Reserve Funds purposes.

5.03. Merger, Consolidation. or Succession.

(a) A corporation with which the Grantor is merged or a corporation or other legal entity which acquires substantially all the assets of the Grantor, shall become the Grantor for purposes of this Agreement, and every reference in this

• Agreement to the Grantor will be treated as a reference to that surviving or purchasing corporation or other legal entity ..

(b) If the Granter is liquidated, merged, or consolidated .

with another company or other legal entity and the Grantor's successor chooses not to discharge the *Grantor's duties under this Agreement, the Trust nevertheless will survive and the

• Trust Fund will continue in trust under the terms of this Agreement. In such*a case, the Trustee may, but -shall not be required to, petition a court of competent jurisdic.tion seeking the appointment of a party to succeed to the responsibilities of the Grantor. In seeking such an order, the Trustee shall:be held harmless and indemnified by the_Grantor or its successor.

Any expenses incurred by the Trustee in seeking said court order shall be the responsibility of the Grantor or its successor until paid.

(c) The merger or consolidation of the Tr~st with, or a transfer of assets or liabilities from this Trust to another trust or fun~ is not permitted unless the Trustee has received an opinion of counsel satisfactory to the Trustee to the_effect that the merger, consolidation, or transfer results in no divers~on or use of assets that is not permitted -by Internal Revenue Code section 468A.

5.04. Impossibility Of Diversion.

Assets* *of **th*e--*Re-serve-Fund*s-*-may* . *not--* be-.:used---f.o.:r.....or.... div.erted to purposes other than the purposes permitted by Internal Revenue Code section 468A, whether by operation or natural termination of the Trust~ by power of revocation or amendment, by happening of a contingency, by collateral arrangement, or by any other means. If permissible unde~ the preceding sentence, contributions by the.Granter to the Trust found not to be e

deductible for f*ede*ra1 - in'coine~- tax purposes shall be returned- to the Granter or, failing that, set aside in a fund or trust separate from this trust under such terms as the law permits and the Grantor directs.

ARTICLE 6. MISCELLANEOUS .PROVISIONS 6.01. Construction.

The Granter's intent and purpose in creating this Trust and

• executing this Agreement is to maintain Nuclear Decommissioning Reserve Funds pursuant to Internal Revenue Code section 468A,to which money and property contributed by the Grantor will be deductible for federal income tax purposes. All questions arising in the administration of the Trust and in the

• construction of this Agreement will be resolved accordingly.

This Agreement will be construed, enforced, and administered in accordance with the laws of the Commonwealth of Virginia,

• except to the extent that the laws of the United States of America -take precedence, in which event, this Agreement will be construed .in accordance with _the laws of the United States of America. The head.ings. and subheadings in this Agreement have been inserted for convenience only and are to be ignored in construction of the provisions.

6. 02. . _Rights Under The Trust.

No person other than the .Grantor has any-vested rights under the Trust except to the extent that rights may accrue under other agreements made by the Trustee: Except as-permitted by law, no assignment of any rights or benefits under the Trust is permitted or recognized, nor will any rights or benefits be subject to attachment or other legal or equitable *process or subject to the jurisdiction of any bankruptcy court.

6.03. Frustrated Actions.

If it becomes impossible for the Grantor or the Trustee to perform an act, then that act will be performed which, in the.

discretion of the Trustee, most nearly cairi~s otit the intent and pu~pose of this Agreement.

6.04. Construction Of Direction.

Whenever the Granter or Trustee is directed to take an action upon the ..**oc-currenc*e***of.. --an---event-,--ne-ithe-r.....i,s ..-unde.r.... obligation to take that action until it has received proper and satisfactory written notice of the occurrence.

e 6.05. Authorizations And Communications.

=:...- -~.

A written authorization or communication from an officer of the Grantor or the Trustee that an event has occurred constitutes conclusive evidence of the occurrence, and the Grantor or Trustee is fully protected and discharged from all liability in accepting and relying upon that authorization or communication.

6.06. Genuine Notice.

The Grantor or the Trustee will not incur liability to any persons or party when acting on a notice, request, consent, letter, telegram, or other paper or document that it believes to be genuine, and to have been signed or sent by the proper*

person.

6.07. Loss Or Damage.

Except as specifically provided by statute, neither the Granter.,

or the.Trustee is liable for loss or damage, except by reason of its own gross negligence or .willful default.

6.08. Binding Nature.

This Agreement i~ binding upon the heiis, ~xecutors, administrators, successors, and assigns of all parties, present and future. *, ,,.

IN WITNESS of this Amended and Restated Agr,~~ment, the Grantor ..

,aqndq the Trustee have signed below on this _1t! day of JV/AV ,

By:

son ice President-Finance and First Vice President

\

\ ;*

e VIRGINIA ELECTRIC AND POWER COMPANY QUALIFIED NUCLEAR-DECOMMISSION TRUST TRUST AGREEMENT AMENDMENT

?,>,..,"

i\.~

THIS TRUST AGREEMENT AMENDMENT made the~?,:,* day of December, 1994, between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia corporation, the Grantor, and MELLON BANK, N.A., a national banking association with trust powers, the Trustee, provides:

WHEREAS, the Grantor entered into a Trust Agreement w1th CRESTAR BANK (formerly United Virginia Bank), dated December.31, 1985, as amended and restated on May 4,.-1994, to establish the VIRGINIA ELECTRIC AND POWER COMPANY QUALIFIED NUCLEAR DECOMMISSIONING TRUST (the "Trust");

WHEREAS, the Grantor has appointed the Trustee as successor Trustee; WHEREAS, Section 5.01 of the Trust Agreement reserved to the Grantor the right to amend the Trust Agreement subject to certain restrictions; WHEREAS, the parties wish to reaffirm their intention that the term "Trust Fund," as used throughout the Trust Agreement, shall r~f~r simply to the aggregation of the Reserve Funds; WHEREAS, the parties desire to ensure that any commingling of assets of the Reserve Funds, in accordance with Section 3.02 of this Agreement, does not create an association taxable as a

... corporation within the meaning of Treasury Regulations (26 C.F.R.) Section 301.7701-2(a); and

-~

. '/'

J e WHEREAS, the Grantor now wishes to amend the Trust Agreement.

NOW, THEREFORE, the Grantor and-the Trustee agree to amend the Trust as follows:*

1. Add the following sentence at the end of Section 1.01:

"As used herein, "Trust Fund" shall be used merely to -

refer to the Reserve Funds in the aggregate and is not intended nor should it be construed to constitute a separate entity."

2. Delete the last sentence of Section 3.02:

"Except as provided in Section 5.02, upon liquidation of a Reserve Fund in a commingled investment, the interest of the other Reserve Funds will also be liquidated and deposited with each Reserve Fund."

3. Add the following two sentences at the end of the first paragraph of Section 3.02:

"The commingling arrangement undertaken as permitted in this Section 3.02 can be terminated at any time by any Reserve Fund. No Reserve Fund in the commingling arrangement may substitute for itself in the arrangement any person that is not a member to the commingling arrangement."

IN WITNESS of this Amended Agreement, the Granter and the Trustee have signed below on this d~NDday of December, 1994.

e e VIRGINIA ELECTRIC AND POWER COMPANY NON-QUALIFIED NUCLEAR DECOMMISSIONING TRUST AMENDED AND RESTATED TRUST AGREEMENT

e e VIRGINIA ELECTRIC AND POWER COMPANY NON-QUALIFIEDNUCLEAR DECOMMISSIONING TRUST AMENDED -AND 'RESTATED:TRUST-AGREEMENT THIS TRUST AGREEMENT AMENDMENT AND RESTATEMENT MADE THE ~'-It.. day of MA~ , ~ ' between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia corporation, the Grantor, *and MELLON BANK, N.A., a national banking association with trust powers, the Trustee,*provides:

WHEREAS the Grantor entered into a Trust*Agreement with CRESTAR BANK (formerly United Virginia Bank), dated December 31, 1986, amended and restated April 18, 1989, to establish the VIRGINIA

- ELECTRIC AND POWER COMPANY NON-QUALIFIED NUCLEAR

.DECOMMISSIONING T~UST (the "Trust"). -

_ WHEREAS section 2. 01 of the Tru_st Agreement provided for the

• appointment of a successor *Trustee; WHEREAS the Grantor has appointed the Trustee as successor Trustee and -the-Trustee has *accepted such-appointment; WHEREAS section 5.01 of the Trust Agreement reserved to the Grantor the right to amend-the Trust Agreement subject to certain restrictions; and WHEREAS the .Grantor now_wishes to amend and restate the Trust Agreement.

NOW, THEREFORE, the Grantor and the Trustee agree to amend -and restate the Trust'as follows:

ARTICLE 1. GENERAL PROVISIONS 1.01. Name. Trust Fund.

The- name**-of***the*--Trust***is **the --V-I-RG!-NIA-*--ELEGTRI:G~,.AND--P-OWER --

COMPANY NON-QUALIFIED NUCLEAR DECOMMISSIONING TRUST. The Trust Fund is the entire undistributed amount of all contributions placed with the Trustee, as adjusted for all income, expense, gain, or loss on such amount as may exist from time to time.

e 1.02. Granter, Trustee.

0 The Grant.or of this ~-Trust- is*=~Vi.rginia Electric and *Power Company and its successors and assigns as provided in section 5.03 of this Agreement. The Trustee under this Agreement is Mellon Bank, N.A., its successors and assigns, or any other person, company, bank, or trust company appointed as provided in section 2.01 of this Agreement.

1.03. Trust Committee.

The Grantor may establish a Nuclear .Decommissioning Trust Committee (the "Committee") composed of any three or more persons appointed by the Grantor's Board of Directors on whatever terms the Board desires. The Committee has the authority to exercise all of the Grantor's powers under the Agreement, and for purposes of Sections 2.03(c) and (d) and Section 3.04(g), the Trustee will be protected in treating the directions and other actions of the Committee as the directions or* actions of the Grantor. The Grantor must certify to the .

Trustee all appointments to or removals from the Gommittee, *and the Trustee must *recognize written instructions signed by any committee member as a directive from the Committee.

1.04. Separate Reserve Funds.

The Trust Fund is divided into separate Reserve Funds as

_*_designated by the Grantor, and each Reserve Fund provides for the decommissioning of a specified unit of a nuclear *power plant. Each Reserve Fund is established as a trust under state law. Each Reserve Fund will be segregated and maintained apart from the assets of other Reserve Funds and any other assets of--

the Trust Fund. Separate :accounting and separate funding will be observed as though each Reserve Fund were a separate trust.

Reserve Funds may be commingled for investment purposes in accordance with section 3.02 of this Agreement.

ARTICLE 2. TRUSTEE APPOINTMENT, REMOVAL, LIABILITY 2.01. Appointment, Removal, Successors.

(a) The Trustee is named above. *The Grantor may appoint one or_moxe persons as additional or successor Trustees . . A Trustee may resign on thirty days' notice in writing to the Grantor. The Grantor may remove any Trustee by thirty days' written notice to each Trustee. Upon the resignation or

• removal of a Trusteer the Grantor will appoint a successor Trustee*,**-who**-will***have--the---same---p0we-r-s---and--du-ties. a-s .... the .....

predecessor Trustee. Additional Trustees may be appointed in the same manner as a successor Trustee.

(b) A successor Trustee may qualify by executing, e . . e acknowledging, and delivering acceptance to the Grantor in a form satisfactory to the Gr~ntor. The sticcessor without further act, deed, or.._.cqnveyance is vested with all the estate, rights, powers*, and~ discr-etion--of the predecessor Trustee just as if originally named as a Trustee in_ this Agreement.

(c) When a successor Trustee accepts, the pi~decessor Trustee (or representative, if the predecessor Trustee is

.unable or unavailable) will assign, - transfer title, and pay ov~r to the successor Trustee the funds ind properties *then

.__ constituting the Trust Fund. The predecessor Trustee (or representative) is authorized, however; to reserve a sum of money deemed advisable for payment' of fees and expenses in connection with the transfer and settlement of the . Trust Fund or otherwise (all subject to the limitation iri section 5.04 of this Agreement), and any balance of that reserve remaining after the payment of fees and expenses will be paid over to *the successor Trustee. *

(d) If two Trustees are serving, acts and decisions bf the Trustee will be made unanimously. If more than two Trustees are serving, acts and decisions of the Trustee will be made by a majority vote. Without designation, one of the Trustees may execute instruments or documents on behalf of all the Trustees until any Trustee objects in writing to the other Trustees. If the Trustees are deadlocked or otherwise unabl~

to act, .. the Grantor will appoint additional or successor Trustees.(which may be or include existing Trustees).

a

. ( e) If more than one -Trustee is -serving; 'meeting *need -

not be called or held for the Trustees to make decision~ or take actions; decisions may be made or action taken by written documents signed by the requisite number of.*Trustees. *. The -

• Trustees may delegate to one or more of their number authority to sign documenti on behalf of the Trustees or to perform ministerial acts, but no Trustee to whom that authority is delegated may perform an act involving the ex~rcise of discretion without first obtaining the concurrence of the requisite number of other Trustees, -even though_the one alone may sign a document required by third parties.

(f) The Trust.ee may adopt or amend . bylaws and regulat1ons that the Trustee deems desirable for the conduct of-Trustee

• affairs.a-:* -

(g) The Trustee will keep a _re~e>r_cl _of all_ 'J'rust_E?e proceedings and acts and all.other data necessary for the .

proper administration of the Trust. The Trustee will notify the. Grantor*-*of-*any-*Trustee-*act-i-on--*tak-en*,***and--when-*r-equired -by law, will notify any other interested party.

2.02 Establishment And Acceptance Of Trust.

(a) Unless the Grantor otherwise advises the Trustee, the e

Grantor will make all contributions in cash or other intangible e

personal property.

(b) At the- -ti~-e--i{*-blakes -any contribution to the Trust Fund, the Grantor will specify in a writing then delivered to the Trustee the exact amount.or portion of the contribution that is to be placed in each Reserve Fund then existing. The Trustee shall not accept contributions from other than the

. Grantor without the_ Grantor's* written ap.proval for each such contribution, and an exact wiitten allocation of such a

,, contribution among the Reserve Funds then existing must accompany the contribution. The Trustee has no right or duty to inquire into the amount of .or the .method used in determining any contribution or the allocation of any contribution among the -Reserve- -Funds; -

• The Trustee is -accountable only -for funds actually received. The Trustee has no duty to compute or collect the amount to be paid to it by the Grantor.

(c) All contributions and income from contributions will be held, managed, and administered in trust according to the terms of this Agreement. *

- (d) No part of the Trust- Fund may be used for or diverted to purposes other than the exclusive purposes allowed by this Agreement, as *described in s~ctions 5.04 and 6.01 of this Agreement.

(e) The Trustee now accepts the Trust created. b'y this Agreement and-will-perform th~ .Trustee*s_duties under.this:

Agreement.

2.03. Limitation Of Liability.

(a) ro the extent permitted by law, the Trustee will serve without bond; the Trustee will secure and pay for required bonds. Except as otherwise provided in this Agreement, no _Trustee is liable for-any act or omission of any other Trustee or for any act or omission of any other person.

At i_ts own expense, the Grantor is entitled to employ its own counsel to defend or maintain, either in its own name or in the name of any Trustee, with said Trustee's approval, -any suit or litigation- arising under_ tllis Agreement involving the I Trust-ee.

(b}a-c: The Trustee is not liable for the making, retention, 0

or sale of any investment or reinvestment made as provided in this _Agreement, _but _the _Trusi:ee is_ lic1.ble for any loss to or diminution of the Trust Fund due to the Trustee-, s gross negligence, willful misconduct, or lack of good faith in car rying*-*out.. *the****te-rms *-of*--*thi-s- *Agr-eement-;-*

(c) The Trustee is fully protected and indemnified when relying on a written communication from a properly designated officer or employee of the Grantor concerning an instruction or I .

e e direction of the Grantor and in continuing to rely upon a communication until a subsequent communication is filed with.

the Trustee. The Truste-e- is __ fully protected and indemnif fed- in acting on any -irist_r-ument / cer*tif icate, or paper believed by the Trustee to be genuine and to be signed or presented by the proper person. The Trustee is under no duty to make any investigation or inquiry as to any statement contained in any written communication or document sig*ned by the proper person, but may accept it a~ conclusive evidence of the truth and the accuracy of *the statements contained. *

(d) The Granto-r will indemnify the Trust Fund and the .

Trustee against any liability imposed as a result of a claim asserted by any person or entity if the Trustee has ,acted in good faith reliance on the terms of *this Agreement or a written direction of the Granter.

2.04. Discharge After Distributions Or Termination.

After all distributions (including distributions to a successor Trustee) or any termination under this Agreement or applicable.

law, the Trustee is discharged f'rom all obligations under this Agreement, and no person or entity has any further right or claim against the Trustee not otherwise provided by statute.

I 2.05. Legal Action.

In all legal a6tions regirding the Trust and this Agreement, t_he Trustee and the Gra.ntor

• are the only necessary parties. A final judgment *not appealed or appealableentered in an action or proceeding against the Grantor, the Trust, or the Tru~tee is binding and conclusive on the parties to this Agreement and all persons having or*claiming to have*any interest in the Trust Fund.

ARTICLE 3. INVESTMENT DUTIES, POWERS 3.01. Stated Investment Policy.

The Trustee's investment policy for assets within the Trustee's investment control will be to realize the greatest apprecia,tion of the Trust Fund within ,the limits of this Agreement and prudent fiduciary practices, whether the appreciation is by way of current income accumulation or by appreciation in the market value of assets.

In its annual report to the Granter, the Trustee will advise of the Trustee's investment policy or strategy .. Formulation of the policy* is *the***Tru-stee 1 *s --respon-s ilril'i'ty-- as--l'ong **as**-the Granter has not exercised its.right to direct the investments under section 3.04. The Trustee must consider the stated purposes of the Trust and this Agreement, statutory requirements, and other relevant information and standards I.

e before stipulating the stat~d investment policy. The Trustee may consult with the Granter.,* counsel, and investment advisors for fatt'_,.f inding_purpo_se~ b~J9..i:e so_ stipulating.

3. 02 .,.* Investment Of Trust Fund.

The assets of two or more* lteserve Funds may-be' commingled for investment purposes as the* Graritor directs . . The Trustee shall apportion. any. earnings or losses from *an* investment*:made with

• commingled assets_ to .each participating-Reserve Fund in the same proportion .that the. amou_nt invested from 'each Reserve Fund bears to the total amount invested. *subject *to the . .

provisions of section 3; 04 of this* Agreement, the Trustee will .

invest and reinves.t tl:ie principal ap.d income,.i..pf* ea~h. Re~etve.

Fund and keep those trust assets invested', without .distinct:i.on .. *.

• between.principal- and income. If assets of two or.more Reserve.

Funds are commingled for inve$tment purposes, the*Grantor shall have. the_ .absolute authority to. dire.ct .the Trustee at .any time .

to liquidate the interests of the Reserve Fund in a commingled investment, and the Trustee shall promptly comply with any such

• directive. Except as provided in _Section 5. 02, upon _*

liquidation of a Reserve Fund in a commingled investment, the interests of the other Reserve Funds will also be liquidated anci deposited with .each Reserve Fund. * *

.... ,*- ... ,('

Such investments . shall be limited to the following:*

- ._.* * . .. (a) ptibl-icly t'raded: domestic or

• foreign common. and .

• *_. preferred~stocks* and *options.,thereon, as well.as- warrants,

. rights and preferred stocks convertible i11to common stock, .

rega:tdless:-of where or how traded..

• 0

. (b) investmept, grade domes.tic corporate* bonas* and

.

• debentures and any such securities which are c_onvertible into common stock, domes_tic or foreign.* * *

(c) bonc:ls or other*obligatioils of the United St'ates of*

America, . or non~U. S. sovereign .debt with an equivalent rating .

of A or higher.

. (d) .* investment grade obligations of . the. states. and of .

municipalities *or of any agencies thereof. *

(E!J;- 'investment grade notes of any nature, 7

ot- foreign or.

domestic issuers.

(f) savings-accounts, certificates of de~osit and other**

types of time* deposits, bearing a reasonable rate of interes:t:

based .upon' the *duratiori '.*'amount, *1:ypti. arid" 'gtiog*rapliicaf. area.';"

with any financial institution or quasi-financial institution e e or any department of the s~me, either domestic or foreign, under _the supervision of the United States or any State, including any _su_ch __financ,iaL Jnstitution owned, operated o-r --

maintained by the truste~ in~~ts cotporate or association capacity (including any department or division of the same) or a corporation or association affiliated with the same .

. (g) any collective, common or pooled trust fund operated or_maintained exclusively for* the commingling.and collective investment of monies or other assets including*any such fund operated or maintained by the Trustee, or its affiliate.

Notwithstanding the provisions of this ..Agreement which place.

restrictions upon the actions of.the Trustee, to the extent monies or other assets are utilized to.acquire units of any collective trust, the.terms of the cbllective tiust indenture shall solely govern the investment duties, responsibilities and powers of the trustee of such collective trust and, to the extent required by law, such terms, responsibilities and powers shall be incorporated herein by reference and ~hall be pa~t of -

this Agreement. For purposes of valuation, the value of the interest maintained by the a Reserve Fund iri such collective trust .shall be the fair market value of the collective fund*

units held, determined in accordance with generally recognized valuation procedures. The Granter expressly understands and agrees that any such collective fund may provide for the lending of its securities by .the collective fund trustee and that such collective fund's trustee will re~eive compensation from such collective_fund for the lending of securities that is separate-from any compensation of the Trustee-hereunder, or any

. compensation of the collective fund trustee _.for *the management -*

of such collective fund.

(h) open-end and closed-end investment c-ompariies, (including those for which the Trustee or an affiliate provides services for a fee) regardless of the purposes for which such fund or funds were created, and any partnership, limited or unlimited, joint venture and other forms of joint enterprise created for any lawful purpose otherwise consistent with the investment guidelines set forth herein.

(i) Notwithstanding anything else in this Agreement to the contrary, including, without limitation, any specific or general power granted to the Trustee, including the power to invest-in real property, no portion of a Reserve Fund shall be invested in real estate. For this purpose, "real* estate" includes, but i~ not limited to, real property, lea~ehol4s_or miner~l interests.

The Trustee has the following powers and authority in the administration and investment of the Trust Fund, to be exercised subject to the other provisions of this Agreement and e

especially this Article 3:

(a), To purchase; subscribe for, and hold securities b~-

other property- authorized.: by "-sections 3. 01 and 3. 02 as a proper investment for the Trust Fund, and to retain the same in trust.

(b) To sell for cash or credit, exchange, convey, transfer, or otherwise dispose of. any securities or other

• property held in the each-Reserve-Fund, by private contract or

• at public auction.

• No person dealing with the_ Trustee* is bound

.:_to* see to -the* application of the._purchase: money or to. inquire into the validity,- expediency, or propriety of .any sale or other dispo'sition. * .

(c) To vote any stocks, bonds, or other securities; to give. general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights, or other options, and to make any incidental payments; to oppose, consent to, or otherwi_se participate in corporate reorganizations or other changes affecting corporate securities, and ,(unless* prohibited by statute) to delegate discretionary powers, and to pay any related assessments or charges; and generally -to exercise any ownership powers over stocks, bonds, securities, or other property held as ~art of a Reserve Fund.

(d) To keep part of a Reserve Fund in cash or cash i

• .balances* invested in interest-bearing accounts if the Trustee

• deems* .that to be *prudent *under the. circumstances. _

(e) To accept and retain for as long as the Trustee deems advisable any securities or other property recei.ved or acquir*ed as Trustee,* regardless of a-ny *1ack of diversification.

(f) To make, execute, acknowledge, and deliver documents of transfer and conveyance and other instruments that may be necessary or appro~riate to carry out the Trustee's powers.

(g) To settle, compromise, or submit to arbitr~tion any claims, debts, or damages due or owing to or from a Reserve Fund, to commence or defend legal or administrative

• proceedings, and to represent the Trust in all legal or administrative proceedings.

(h) To employ suitable agents and counsel (who may be counsel of the Granter) and to pay their reasonable expenses and .compensation.

( i') *** -ori -ai:rect'ion*by-**the--Grantor* as "to.. the* -agent .. and

• insurance company, to invest in insurance contracts if and as allowed under Internal Reveriue Code section 468A, payable to the Trustee or its assignees as beneficiary.

e e (j) to purchase, ent~r, sell, hold, and generally deal in any manner in and with contracts for the immediate or future delivery, of fi_na_nctal. ins,truments of any issuer or of any -other property; to grant-,** purchase~:..- sell, -exercise, permit to expire, permit to be held in escrow, and otherwise to acquire, dispose of, hold and generally deal in any manner with and in all forms of options in any combination.

(k) To enter into contracts, in.a form determined by the Trustee, with one or more persons, firms, associations, or corporations to obtain advice and counsel about investments.

(1) To enter into .arrangements for the deposit of funds with banks or trust companies and in connection with the arrangements*:

(1) To authorize the depositary to act as custodian of the cash, securities, or other property comprising the funds; r (2) To authorize the depositary to convert the funds in.whole or in part into, or to.invest and reinvest the same in, securities of any kind and nature permitted in this Agreement; and (3) To provide for the payment to the depositary of

. reasonable compensation for its services.

(m) To cause. any securities or other property held as part of a Reserve *.Fund to be registered in its own name or in the name of one or more of its nominees, and to hold any investments in bearer form, but the books and records of the Trustee must at all*times show that the investments are part of a Reserve Fund.

(n) To parti_cipate in any mergers or consolidations; or any registrations of securities with state or federal authorities regarding any securities held.

(o) To do all acts, take all proceedings, and exercise all rights arid privileges, although not specifically mentioned herei as the Trustee deems. necessary to administer the Trust Fund and to carry out _the purposes of this Agreement.

3.04. Directing The Trustee.

(a) Directed investments under this section 3.04 may not exceed the ..

total

. of a Reserve Fund.

(b) Subject to the limitation of paragraph (a), the Trustee at the written direction of the Grantor will segregate the value requested and will after that invest, reinvest, and e e otherwise deal with that Segregated Amount as directed by the.

Granter if it is consistent-with the terms of this Agreement.

(c) If ~xcir~ised~ fhe~rantor's right to direct investment and reinvestment includes the right to select

• investment managers, brokers, salesmen, or agents to handle investments or execute investment orders. The Grantor may give

_an investment manager any of --the Granter's powers, pursuant to this_section 3.04or otherwise, by so certifying in writing to the Trustee. The Trust~e is not responsible for the selection, terms of appointment, -compensation, or :conduct of any investment manager, -broker, salesman,. or agent selected by t_he Grantor, but the Trustee is responsible for.its own actions in

• its dealing with such persons in accordance with *the provision~

of section 2.03 of this Agreement. For purposes of.Sections 2.03(c) and (d) and Section 3.04(g), the Trustee will be protected in treating the directions and other actions of an investment manager as the directions or actions of the Grantor.

(d) In the absence of directions under section 3.o~; the Trustee is free to proceed without the concurrence or affirmative-expression of the Grantor to handle, manage, control, invest, and *reinvest-*the Trust assets that are not Segregated Amounts under the powers granted in this Agreement with the same force and effect as if this section were not a part of this Agreement .

. ~(e) No person dealing with.the Trustee is required to

.determine*whetherany sale or.purchase by the :Trustee-has been authotized or directed by the Grantor, and each is £ully protected.in dealing*with the Trustee in the same manner as if t~is section were not a part of this Agreement.

(f) Whenever the Trustee is directed to purchase or sell assets in a Reserve Fund, the Trustee in its sole discretion is permitted at the expense of the Trust to obtain an appraisal of the value of the assets to be purchased or sold.

(g) Subject t6 the power of the Grantor as described in this section, the powers granted the Trustee under sections 3.02 and 3.03 of this Agreement will be exercised in the __

.discretion of the Trustee. Neither the Trustee nor any other pers*ons is under a duty to question the Granter's direction, and the~-a',rustee will comply as promptly as possible with the Grantor's direction if it is consistent with the terms of this Agreement.

ARTICLE 4. OTHER DUTIES OF TRUSTEE 4.01. Payments From A Reserve Fund.

On the written direction of the Grantor, the Trustee will make payments and transfers from a Reserve Fund to the persons or entities, e e in the manner, in the amounts, and for the purposes specified in the written directions. After payment, the amount paid is no longer a --part- of :t_he Reserve Fund. Each Granto-r --

direction will fnc1-ude a ...:repr-esentation by the Grantor that the payment is in accordance with the purposes of this, Agreement.

The Trustee is not responsible for the application of the payments or for the adequacy of a Reserve Fund after payment to meet and discharge Trust liabilities.

• 4.02. Payment Of Compensation, Expenses, And Taxes.

(a) The Trustee will be paid. reasonable compensation a~

agreed upon fiom time to time in wiiting by the Grantor and the Trustee. In addition, the-Trustee will be*reimbursed from the Reserve Funds or, at the. option of _.the *Grantor, by the Grantor for all ordinary and necessary expenses incurred in connection with the operation of the Trust, *including* federal income tax imposed on the modified gross income of the Trust, any state or local tax imposed on the income or assets of the Trust, le_gal expenses, accounting expenses, actuarial expenses, and trustee compensation and expenses. All taxes levied or assessed o~ or.

in respect of a Reserve Fund, whether assessed to the Reserve Fund or the Grantor, will be paid, at the option of the Grantor, by the Grantor, or from the Trust Fund and pro rated among the Reserve Funds in proportion to their respective fair-market values at the preceding calendar year end in the case of property taxes and in proportion to their respective taxable incomes for the relevant taxable year in the case of income taxes. To the.-extent that any taxes are provoked by-the investment in or receipt of an identifiable ~sset* or

• transaction involving a particular Reserve Fund, the taxes will be charged against the appropriate Reserve-Fund, giving .

appropriate effect to computations of income and deductions*

related to the asset or transaction, and allocating any exemption available among the Reserve Funds in proportion to the tax liability provoked. Identifiable direct expenses will be treated in the same way as taxes. *.

(b) The Trustee will prepare and file* tax returns for the Reserve Funds as directed by the Grantor, provided that the Grantor shall indemnify the Trustee for any penalties, -*

additions to tax, or other amounts for which it may be charged due to a position taken on such returns. The Trustee may

• assume -t-hat any taxes assessed on or with respect to the Reserve Funds are lawfully assessed unless the Grantor advises the Trustee in writing that in the opinion_ of cou_nsel_ for the Grantor the taxes are or may be unlawfully assessed. When so advised and requested in writing by the Grantor, the Trustee will *conte-st*-the-val-i-di ty--of --the*-taxes .. -in-*any *manner *deemed appropriate by the Grantor or its counsel, in which event the Trustee will execute all documents, instruments, claims, and petitions necessary or advisable in the opinion of the Grantor or its counsel for the refund, abatement, reduction, or

" e elimination of taxes.

e Reasonable expenses incurred by the Trustee in connection with *such a contest will be reimbursed as provided. in pa_ragr~ph. (~)_,of_ ;this section.

4.03 .. Accounting.

(a) The Trustee will keep accurate and detailed accounts of all investments, receipts, disbursements, and other transactions f.or each Reserve Fund and for the Trust Fund. All accounts, books, tax returns, and records *relating to the Trust

. are open to inspection and audit at all reasonable times by any

• person.designated by.the Granter.

I .

(b) Within sixty days after the end of each calendar year.*

• and within sixty days after the removal or resignation of a Trustee -as provided in ~ection 2.01, the Trustee will file a.

written report of the investments, receipts, disbursements, -and other transactions during the year or during the period from the close of the last year to the date of the Trustee's removal or resignation, including the current value of the Reserve*

• Funds. - After ninety days from _the date of filing that annual .

• or other accounting, the Trustee is forever released and discharged from all liability and accountability to anyone with respect to the propriety of acts and transactions shown in.the accounting, except for acts or-transactions as to which the Grantor files written objections with the. Trustee within the ninety-day period.

(c) Excepf:as ipecificaily provided by statute, no p~rson other than the Granter may require an accounting.or bring an action*.against the- Trustee about .the Trust or the actions of the Trustee. The Trustee is not required to make reports to any courts or administrative agencies, except*as specifically required by statute.

• 4.04. Valuation.

(a) As of each calendar year end, the Trustee will determine the fair-market value of the Trust Fund and each Reserve Fund and report .that value to the Granter in writing.

(b) Non-cash contributions are valued at fair-m~rket value determined by the Trustee as of the actual date *on which the Trus-"E-ee accepts the property.

(c) In determining the net.worth of the Trust Fund and the Reserve Funds, the Trustee will allocate among such Reserve Funds and deduct all allocable expenses.

ARTICLE 5. AMENDMENT AND TERMINATION OF THE TRUST 5.01. Amendment Of The Trust.

The Granter has the right at any time to amend this Agreement in whole orinpart, e but (a). No amendmen:t Jµay a:qthorize or permit any assets -of,-_

the Trust Fund (other than those required to pay taxes and other administration expenses) to be used for or diverted to purposes other than the costs of decommissioning the Grantor's nuclear power plants, except as may be required by any court or regulatory authority, and (b) No amendment may be made that changes the Trustee's duties or liabilities without*the Trustee's written consent.

An amendment may be made retroactively if such application is necessary to bring the Trust, the Grantor,,or the Virginia Electric and Power Company Qualified Nuclear Decommissioning Trust (another trust b~tween the Grantor and the Trustee) into conformity with the Internal Revenue Code; Treasury regulations, or any other applicable statute or regulation.

5.02. Termination Of Reserve Funds.

Except as otherwise provided by law, each Reserve Fund terminates upon completion of .all nuclear power plant decommissioning that it has been created to fund, as certified to the Trustee by the Grantor, or upon the frustration or failure of the trust's purposes. Upon termination of a Reserve Fund, any of the Reserve Fund that remains shall revert to the Granter free of trust.

5.03. M~rger~ C6nsolidation, or Succession.

(a) A corporation with which the Grantor is merged or a corporation or other legal entity which acquires substantially all the assets of the Grantor, shall become the Grantot for purposes of this Agreement, and every reference in this Agreement to the Grantor will be treated as a reference to that surviving Or purchasing corporation or other legal entity.

(b) If the Grantor is liquidated, merged, or consolidated with another company or other legal entity and the Grantor's successor chooses not to discharge the Grantor's duties under this Agreement, the Trust nevertheless will survive and the Trust Fund will continue in trust under the terms of this Agreement- 0

• In such a case, the Trustee may, but shall not be required to, petition a court of competent jurisdiction seeking the appointment of a party to.succeed to the responsibilities of the Grantor. In seeking such an order, the Trustee shall be held harmless and indemnified by the Granter or its successor.

Any expenses **-incur*r*ed *ny *the*-*Tru*stee** in -see*king** *said *court order shall be the responsibility of the Granter or its successor until paid.

e e (c) The merger or ~oriiolidation of the Trust with, or a transfer. of assets or liabilities from this Trust to anotlie~

trust or fund -is -not- permi tfed- -unless the Trustee has received an opinion of counsel satisfactory to the Trustee to the effect that the merger, consolidation, or transfer results in no diversion or use of assets that is not permitted by the Agreement.

5.04. I~p6ssibility Of Diversion.

Until a Reserve Fund. terminates, assets of a Reserve Fund may

• not be used for or diverted to purposes other than the purposes permitted by this Agreement.

ARTICLE 6. MISCELLANEOUS PROVISIONS 6.01. Construction.

The Grantor's intent and .purpose in creating this Trust a~d executing this Agreement is to maintain Nuclear Decommissioning Reserve Funds to provide for the costs of de.commissioning the Grantor's *nuclear power plants. All questions arising in the administration of the Trust* and in the construction of this Agreement will be resolved accordingly. This Agreement will be construedi enforced, and administered in accordance with the laws of the Commonwealth of Virginia, .except to the extent that the.laws of the United States of America take precedence, in which event,* this Agreement will be construed in accordance with the laws of the United States of America. The headings and .subheadings in this Agreement have been inserted for convenience only and are to be ignored in construction of the provisions.

• 6.02. Rights Under The Trust.

No person other than the Granter has any vested rights under the Trust except to the extent that rights may accrue*under other agreements made by the Trustee. Except as permitted by law, no assignment of any rights or benefits under.the Trust is permitted or* recognized, nor will any rights or benefits be ..

. subject to attachment or other legal or equitable process or subject to the jurisdiction of any bankruptcy court.

6.03. Frustrated Actions .

If it becomes impossible for the Grantor or the Trustee to perform an act, then that act will be performed which, in the discretion --of *the Trustee, m*o*s*t

• ne*arly-*carries out* the intent and purpose of this Agreement.

6.04. Construction Of Direction.

Whenever the Granter or Trustee is directed to take an action

.. ,i -

e upon the occurrence of an e~ent, neither is under obligation to take that action until it has received proper and satisfactory written ~otice of the_ Ofcurrence.

6.05. Authorizations And Communications.

A written authorization or communication from an officer of the Granter or the Trustee that an event has occurred constitutes conclusive evidence of the occurrence, and the Granter or Trustee is fully protected and discharged from all liability in accepting and relying upon that authorization or communication.

6.06. Genuine Notice.

The Granter or the Trustee will not incur liability to any persons or party when acting on a notice, request, consent, letter, telegram, or other paper or document that it believes to be genuine, and to -have been signed or sent by the proper person.

6.07. Loss Or Damage.

Except as specifically provided by statute, neither the Granter or the Trustee is liable for loss or damage, except by reason of its own gross negligence or willful default.

6.08. Binding Nature.

This Agre~ment is binding upon the heirs, eiecutors, administrators, successors, and assigns of all parties, pres~nt and future.

IN WITNESS of this Amended and Restated Agreement, the Granter and the Trustee have signed below on this .!+/-Ii! day of JV1Af ,

199!#.

By:

B., . Joh on Senier v*ce President-Finance Controller, Treasurer and Corporate Secretary

~~LO~

Richard S. Thomas

Title:

First Vice President

1. 12239G