ML19274D317
| ML19274D317 | |
| Person / Time | |
|---|---|
| Site: | Waterford  |
| Issue date: | 03/15/1978 |
| From: | Mclendon G LOUISIANA POWER & LIGHT CO. |
| To: | NRC COMMISSION (OCM) |
| Shared Package | |
| ML19274D316 | List: |
| References | |
| OTHR-780315, NUDOCS 7901230159 | |
| Download: ML19274D317 (26) | |
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- AGREEMENT by and between TOWN OF HOMER
- and LOUISIANA POWER & LIGHT COMPANY
- This agreement for the operation and possible ultimate transfer of ownership of the electric system of the Town of Homer, Louisiana, sometimes hereinafter referred to for convenience as the " Operating Agreement," made and entered into on this 15 day of March- ,19 78, by and between TOWN OF HOMER, a municipal corporation of the State of Louisiana, sometimes hereinafter referred to as
" Town," herein acting through and represented by Toe Michael , its Mayor, pursuant to and hereunto duly authorized by Ordinance No. 6g of the Mayor and Board of Selectmen of the Town, duly adopted on December 7 ,19 77 , a certified true copy of which is annexed hereto, said Mayor and Board of Selectmen being the governing authority and body of the Town and having so acted pursuant to and as authorized by the favorable vote of the qualified electots of the Town, voting at an election duly held on October 22 , 19 77 ,
a certified copy of the official promulgated results of such election being also annexed hereto, and-LOUISIANA POWER & LIGHT COMPANY, a Louisiana corporation, sometimes hereinafter referred to as
" Company," herein acting through and represented by G. D. McLendon , its Senior Vice President ,
hereunto duly authorized by resolutions the Board of Directors of the Company duly adopted , .. November 21 19 77, a certified true copy of which resolutions is annexed hereto, 790123c m
WITNESSETH THAT:
WHEREAS, the Town owns and operates an electric power and light plant and system and a waterworks plant and system which are revenue pro-ducing; and WHEREAS, the Town presently has outstanding an aggregate of
$1,662,000 principal amount of revenue bonds payable from the income and revenues of said electric and waterworks plants and systems; and WHEREAS, the Town has considered that it would be to the manifest advantage of the Town and the residents thereof to effect an agreement which at one and the same time assures the payment of said relenue bonds, the availability of a reliable supply of electricity for the Town and the electric customers thereof, and the operation of the Town's electric system by capable and experienced management, and further provides for the possible ultimate ownership of said electric system by the Company on the basis hereinafter set forth; and WHEREAS, the Company is an electric utility company owning, operating and maintaining facilities for the generation, transmission, distri-bution and/or sale of electricity in 46 of the 64 parishes of the State of Louisiana, with a long history of capable and experienced management and with substantial resources with which to enable it to perform its obligations under this Operating Agreement; NOW, THEREFORE, the Town and the Company, each for and in consideration of the agreements, covenants and stipulations of the other hereinafter set forth and of all of the terms and provisions of this Operating Agreement, do hereby mutually agree, covenant and stipulate a follows:
Section 1. For purposes of this Operating Agreement the following words, terms and/or phrases, as used herein, shall, unless, the context obviously re-quires otherwise, have the meanings hereinafter set forth:
(a) " Bonds" shall mean the presently outstanding revenue bonds heretofore issued by the Town and payable from the income and revenues of the waterworks and electric system or systems of the Town, consisting of the following:
(1) $485,000 principal amount presently outstanding of such bonds of an original issue of $700,000 of such bonds dated as of September 1,1959 (sometimes hereinafter referred to as the "1959 bonds"), the presently outstanding bonds of such issue bearing the numbers 216 to 700, both inclusive, maturing on March 1st of the years 1978 through 1989, bearing interest at the rate of 4. 25% per annum, all issued under a resolution (sometimes hereinafter referred to as the "1959 bond resolution") adopted by the Mayor and Board of Selectmen of the Town on August 18, 1959; (2) $155,000 principal amount presently outstanding of such bonds of an original issue of $250,000 of such bonds dated as of March 1,1963 (sometimes hereinafter referred to as the "1963 bonds"), the presently outstanding bonds of such issue bearing the numbers 96 to 250, both inclusive, maturing on March 1st of the years 1978 through 1988, bearing interest at rates from 1.25% to 3.375% per annum, all issued under a resolution (sometimes hereinafter referred to as the "1963 bond resolution") adopted by the Mayor and Board of Selectmen of the Town on January 21, 1963;
. (3) $627,000 principal amount presently outstanding of such bonds of an original issue of $750,000 of such bonds dated as of July 1,1967 (sometimes herein-after referred to as the "1967 bonds"), the presently outstanding bonds of such issue bearing the numbers 124 to 750, both inclusive, maturing on March 1st of the years 1978 through 1997, bearing interest at rates from 4.50% to 4.90% per annum, all issued under a resolution (sometimes hereinafter referred to as the "1967 bond reso-lution") adopted by the Mayor and Board of Selectmen of the Town on July 5,1967; and (4) $395,000 principal amount presently outstanding of such bonds of an original issue of $400,000 of such bonds dated as of September 1,1975 (sometimes hereinafter referred to as the "1975 bonds"), the presently outstanding bonds of such issue bearing the numbers of 2 to 80, both inclusive, maturing on March 1st of the years 1978 through 1995, bearing interest at rates from 5% to 7% per annum, plus additional interest at rates from 1% to 3% to March 1,1978, represented by separate detachable interest coupons designated "A" coupons, all issued under a resolution (sometimes hereinafter referred to as the "1975 bond resolution") adopted by the Mayor and Board of Selectmen of the Town on July 2,1975.
(b) " Bond Resolutions" shall mean and refer collectively to all of the various resolutions referred to in sub section (a) of this Section 1 and/or under which Bonds have been issued.
(c) " Electric System" shall mean the entirety of the electric power and light plant and system of the Town, including, but not by way of limitation, the entirety of the facilities, equipment, plant and property of the Town used solely for the generation, distribution and sale of electricity, and the proportionate part of any facilities, equip-ment, plant and property of the Town used jointly for the generation, distribution and sale of electricity and for the operation of the waterworks system of the Town, to-
'gether with the materials and supplies, tools, automotive and vehicular equipment, rights of-way, servitudes and other interests in land, and permits and other rights, pertaining thereto or held by the Town in connection therewith or necessary for the operation and/or maintenance thereof, and the books and records of the Town with respect thereto, but shall not include any of the plant, property, or facilities used solely in and by the waterworks system of the Town.
(d) " Generating Facilities" shall mean all of the facilities, equipment and plant or plants of the Town for the generation of electricity.
(c) " Distribution System" shall mean the entirety of the Electric System exclusive of the Generating Facilities.
(f) " Commencement Date" shall mean __8_;0)_o' clock A. M. on March 17 ,
19 78 , or such other date and/or time as the Town and the Company may hereafter agree in writing as the date and time on and at which the Company shall commence operating the Distribution System.
(g) " Fiscal Agent" shall mean The llomer National Bank, Ilomer, Louisiana, in its capacity as fiscal agent of the Town in connection with the Bonds, or the duly designated successor fiscal agent or agents in such connection, as the case may be, (h) " Sinking Fund Deposits" shall mean and refer to each of t'ic respective payments to be made hereunder by the Company to the Fiscal ., gent for deposit into and to the credit of the Sinking Fund of the Town referred to in the Bond Resolutions, which Sinking Fund Deposits are to be applied by the Fiscal Agent as in the Bond Resolutions set forth.
(i) " Force Majeure" shall mean and include acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, insurrec-tions, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, arrests and restraints of government and people, civil disturbances, explosions, breakage of or accidents to or the necessity for making repairs or alteration. to electric generating stations, transmission lines, distribution lines, substations, transformers, switching stations and switching devices, and any other causes, whether of the kind herein enumerated or otherwise, not within the control of the party affected thereby and which by the exercise of duc diligence such party is unable to prevent or overcome; and shall further include the inability to acquire or delays in acquiring, at reasonable cost and after due diligence, necessary servi-tudes, right of way grants, permits, licenses, permissions of any kind from any governmental agencies, fuel, materials and supplies.
Section 2. Commencing on and at the Commencement Date and continuing thereafter as long as this Operating Agreement shall remain in effect, the Company, acting as Agent for the Town but at the sole cost and expense of the Company, shall perform and do, and sh.'11 have the sole and exclusive right to perform and do, the following:
(a) 'Ihe Company shall operate and maintain the Distribution System, furnish-ing reliable and efficient electric service (after reasonable time and opportunity to correct any deficiencies in the Distribution System) to the customers thereof, both present and future. In so doing, the Company shall provide for the entirety of the electric power supply requirements of the Distribution System and its aforesaid customers, including the Town, and shall perform and do ali necessary work and provide all necessary services, materials and equipment. Since, as a result of the foregoing, the Generating Facilities may not be needed to provide for the afore-said electric power supply requirements and it may be inexpedient to maintain them, as the Town hereby declares, the Company shall not be obligated to operate or maintain the Generating Facilities or any part or unit thereof. Ifowever, the Company shall have the right and option if and whenever it so sees fit (but shall not be obligated) to operate and/or maintain, and shall have the sole and exclusive right to operate, the Generating Facilities or any part or parts or units or units thereof.
(b) The Company shall from time to time make such additions, improvements and replacement to, extensions of, and retirements with respect to, the Distribution System as the Company, acting as a prudent operator, considers necessary or desirable, and shall have the right and option (but no obligation) to make any additions, improvements and replacements to, and retirements with respect to, the Generating Facilities that the Company in its discretion sees fit.
(c) He Company shall make a complete and detailed inventory of the Electric System as of the Commencement Date, and shall maintain complete and detailed property and cost records with respect to any additions, improvements or replace-ments to the Electric System, including any extensions of the Distribution System, any replacements effected by way of maintenance, and any retirements with respect to the Electric System.
(d) We Company shall read the meters and bill the customers of the Distribu-tion System, which shall normally be done on an approximately monthly basis, and shall collect and retain all revenues for the electric service rendered hereunder.
Ilowever, the meters of all of the customers of the Distribution System shall be read by the Company for the first time on the day of the Commencement Date, at which first meter reading the Town shall have the right to have its representatives accompany the meter readers of the Company and verify the Company's readings.
The Town shall bill the customers and collect for all electricity used up to such first meter reading as determined by such first meter reading; the Company shall bill the customars and collect for all electricity used after such first meter reading.
The Town and the Company shall each promptly remit to the other any payments or amounts received, or inadvertently collected or accepted, for electric service, to which the other is in fact entitled.
(c) He Company shall obtain, and shall maintain in effect, all such insurance policies and/or insurance coverages with respect to the Electric System as may be required by the Bond Resolutions.
Section 3. (a) So long as this Operating Agreement shall remain in effect, the Company shall, out of the revenues collected by it for the electric service rendered hereunder, make payments to or for the benefit and account of the Town, as the case may be, as follows:
(1) On or before the 10th day of each month the Company shall pay to the Fiscal Agent the Sinking Fund Deposit due for that date in accordance with the total annual payments set forth in the " Sinking Fi ad Deposit Schedule" which is attached hereto, made part hereof, and marked " Exhibit A" for identification, pro-vided that for the first calendar month that this Operating Agreement shall be in effect the Company shall pay only an amount equal to that fraction of such monthly payment having a numerator equal to the number of days remaining in such first calendar month from and after and including the Commencement Date and a denom-inator equal to the number of days in such first calendar month.
(2)(i) On or before the last calendar day of each month, the Company shall pay to the Town two percent (2%) of the total revenues (including fuel adjustment charges) collected and received by the Company during the preceding calendar month from the sale of residential and commercial electric services to customers within the corporate limits of the Town, as such Ilmits may now or hereafter exist, provided, however, that it is distinctly understood and agreed that the said two percent (2%) of the total revenues (including fuel adjustment charges) shall not apply to or include any revenues (including fuel adjustment charges) from the sale of electric energy to the Town or to government or municipal agencies, or to any sale for industrial purposes or for resale within the corporate limits of the Town.
(ii) 'Ihe Company shall also timely pay to the Town as they become due the regularTown ad valorem taxes on all property owned by the Company within the corporate limits of the Town.
(iii) In the event that the payments by the Company to the Town for any calendar year pursuant to (1) and (ii) of this Section 3(a)(2) total less than
$41,000, the Company will pay to the Town the difference between such total and
$41,000 within thirty days after the end of such calendar year, it being understood and agreed, however, that for that part of the first calendar year that this Operating Agreement shall be in effect and for that part of the last calendar year that this Section 3(a)(2) shall continue in effect pursuant to clause (b) of Section 15 hereof, the foregoing amount of $41,000 shall be replaced by an amount equal to that fraction of $41,000 having a numerator equal to the number of days in such calendar year that this Operating Agreement shall be in effect and a denominator of 365.
(iv) In the event that the total revenues (including fuel adjustment charges) collected and received by the Company from the sale of electric service to residential and commercial customers within the corporate limits of the Town exceed $585,000 during any calendar year or years, the figure of $41,000 stated in (iii) of this Section 3(a)(2) shall, for such calendar year or years, be increased by an amount equal to 1% of the amount by which such annual revenues exceed $585,000.
(v) If, as a result of increased electric rates (rates including fuel adjustment charges), increased over those first applied by the Company on the Commencement Date, the annual cost to the Town of the Company's municipal
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electric service to the Town shall at any time be greater than the aggregate of the annual payments made by the Company to the Town pursuant to the foregoing pro-visions of this Section 3(a)(2), then the Company will add to its aforesaid annual payments to the Town, within thirty days after the determination thereof, an amount equal to that part of the difference resulting from the increase or increases in electric rates, provided, however, that all services taken by the Town on the Company's Municipal Pumping Rate Schedule series MP-Code 28 or revisions or replacements thereof or thereto shall be excluded from the calculation provided for by the last preceding sentence.
(b) Whether or not any of the Bonds then remains unpaid and/or outstanding, the Company shall, out of the revenues collected by it for the electric service rendered hereunder, pay to the Town annually commencing on March 1,1993, and ending on March 1,1997, the sum of $25,400 per year.
(c) In the event that the revenues collected by the Company for the electric service rendered under this Operating Agreement do not provide sufficient funds for the making of the payments required by sub sections (a) and (b) of this Section 3, the Company shall nevertheless make all such payments, providing any necessary additional monies from other funds of the Company. In the event that the revenues collected by the Company for the electric service rendered under this Operating Agreement exceed the aggregate amount of all payments which the Company is obligated to make under sub sections (a) and (b) of this Section 3, such excess shall be retained and kept by the Company as its own funds and shall belong to the Company, and may be applied by the Company to the payment of the costs and expenses set forth in Section 2 of this Operating Agreement or to any other purposes, as the Company sees fit.
Secti~on 4. So long as any of the Bonds shall remain unpaid or outstanding, the Town shali. maintain the Reserve Fund established by the Bond Resolutions in such amount or amounts and otherwise as required by the Bond Resolutions, and shall make timely payment therein of any amount or amounts which may be necessary in this connection. When none of the Bonds shall any longer be unpaid or outstanding, the monies or amounts then in said Reserve Fund shall, insofar as the Company is concerned, belong to and be the property of the Town.
Section 5. So long as any of the Bonds shall remain unpaid or outstanding, the Town shall keep and maintain the Depreciation and Contingencies fund established by the Bond Resolutions in such amount or amounts and otherwise as required by the Bond Resolutions, but in any event in an amount not less than $10,000, and, except to the extent otherwise provided in the next succeeding sentence hereof, shall promptly make any payments or deposits into said Fund which are and/or which may become necessary for the purpose aforesaid, failing which the Company shall have the right (but not the obligation) to make payments into said Fund necessary to increase the amount thereof to not more than $10,000, which payments shall offset and be effective as a credit against the payments thereafter due by the Company to the Town under Section 3 hereof. None of the monies in said Fund shall be used to pay for Capital Improvements (as hercinafter defined) unless, after a board of arbitrators acting on a demand under Section 7 hereof shall have made a final and binding determination requiring the Company to make Cenital Improvements, the Company shall have failed for a continuous period of not less than ninety (90) days to commence and/or thereafter in good faith to continue and pursue the work required by such determination, in which event any monies from said Fund used in making the Capital Improvements required by such determination shall be promptly replaced
. by the Company. 'Ihe monics in said Fund may be invested by the Fiscal Agent in such interest bearing deposits as may be permitted with respect to other monies, accounts or funds held or maintained by the Fiscal Agent under the terms of the Bond Resolutions, and interest thereon may, as far as the Company is concerned, be withdrawn by the Town provided that the balance in said Fund shall not thereby be reduced to less than is required by the Bond Resolutions. When none of the Bonds shall any longer be unpaid or outstanding, all monies then remaining in said Fund shall, insofar as the Company is concerned, belong to and be the property of the Town.
Section 6. (a) The Town represents and warrants that the aforesaid Sinking Fund and Reserve Fund are current as of the date hereof and that it has paid into said Funds all amounts required by the Bond Resolutions to have been paid into said Funds as of the date hereof. For the first calendar month that this Operating Agree-ment shall be in effect, the Town shall pay to the Fiscal Agent for deposit into the Sinking Fund an amount at least equal to that part of the Sinking Fund Deposit for that month which the Company is not obligated to pay under Section 3(a)(1) of this Operating Agreement.
(b) So long as any of the Bonds shall remain unpaid or outstandi,ng, the Town shall make any and all payments into the aforesaid Reserve Fund and the aforesaid Depreciation and Contingencies Ft::d required by the Bond Resolutions and shall provide and maintain said Reserve Fund and Depreciation and Contingencies Fund in amounts as required by the Bond Resolutions, falling which the Company may (but shall not be obligated to) make and pay on behalf of the Town any or all payments into either or both of said Funds which are then more than fifteen (15) days in arrears, and the amounts of any such payments so made by the Company shall be deducted from and credited against any amounts then or thereafter due by the Company to the Town under Section 3(a)(2) hereof, and all such payments so made by the Company to the Fiscal Agent on behalf of the Town shall constitute and be effective as credits against the obligations of the Company to the Town referred to in Section 3(a)(2).
(c) In the event that the Company shall default in the payment of any Sinking Fund Deposit, then the Town shall be entitled to, and the Company hereby assigns to the Town in such event and while such default shall continue, all revenues for the electric service to be rendered hereunder to the customers of the Distribution System until, and such assignment is to be effective only until, such default shall be remedied; provided, however, that the foregoing provisions of this sentence shall be without prejudice to, and shall be subject and subordinate to, the Company's Mortgage and Deed of Trust, aated as of April 1,1944, to The Chase National Bank of the City of New York and Carl E. Buckley, Trustees ('Ihe Chase Manhattan Bank (National Association) and Charles F. Ruge, successor Trustees), as supplemented and amended by twenty-three (23) Supplemental Indentures thereto and as it may have been or may thereafter be further supplemented and/or amended by further Supple-mental Indentures thereto or amendments thereof. Any such revenues so collected or received by the Town shall be applied and credited to the remedying of such default, and any amounts so collected or received by the Town in excess of the monies needed to remedy such default shall promptly be remitted to the Company.
Section 7. In the event that, at any time while this Operating Agreement remains in effect, either the Town or 25% of t.,e holders of the outstanding Bonds (the " demand-ing party") shall make written demand upon the Comnany to effect further extensions, additions, improvements, renewals and/or replacements (" Capital Improvements")
to the Distribution System, and shall in such writing assert that the same are necessary to the proper operation of the Distribution System in accordance with accepted electric utility practices (the " demand"), and if the Company shall fall to make such Capital Improvements within 90 days after receipt of such demand or shall fall to commence making such Capital Improvements within such 90-day period and thereafter to go forward with all reasonable diligence with the completion there-of, then the demanding party shall have the right to require arbitration of the matter as hereinafter set forth; and if it shall be determined in and by such arbitration proceeding that the demand is correct, then the Company shall make such Capital Improvements; provided, however, that the Company shall not be so required to spend for such Capital Improvements in any one calendar year more than 5% of the revenues collected by the Company during the preceding calendar year for the electric service. rendered by it hereunder. Upon such arbitration proceeding being required as hereinabove set forth, the demanding party shall choose an arbitrator, the Company shall choose an arbitrator, and the two arbitrators so chosen shall choose a third arbitrator, who shall be a professional engineer. If the arbitrators chosen by the f.emanding party and the Company are unable to agree on a third arbitrator, the selection cf the third arbitrator, who shall be a professional engineer as afore-said, shall be accomplished by application of the rules of the American Arbitration Association. The board of arbitrators thus chosen shall determine the validity of the demand, which determination shall be in writing and shall be final and binding.
Section 8. All additions, improvements and replacements made by the Company to the Electric System, including any and all extensions of the Distribution System and all replacements to the Electric System effected by way of maintenance (and including any Capital Improvements made under the provisions of Section 7 of this Operating Agreement), shall be and shall remain the property of the Company, and the Company shall have the right at any time and from time to time to alter, improve, repair or remove any thereof, consistently with the proper performance by the Company of its obligations under this Operating Agreement. In the event that, for any reason, this Operating Agreement shall be terminated or nullified without the Company acquiring the ownership of the Electric System as hereinafter set forth, the Town shall be obligated to pay to the Company, and shall pay to the Company promptly and in any event no later than 120 days after such termination or nullifi-cation of this Operating Agreement, the depreciated book cost of all additions, improvements and replacements made by the Company to the Electric System, including all extensions of the Distribution System (and including any Capital Improvements made under the provisions of Section 6 of this Operating Agreement),
located within the corporate limits of the "own as such corporate limits exist on the Commencement Date, and all replacements effected by way of maintenance, less any salvage realized from retired property, and upon such payment being made by the Town to the Company, all of said additions, improvements, replacements and exten-sions within the corporate limits of the Town as such corporate limits exist on the Commencement Date shall become the property of and belong to the Town, and the Company shall have no further ownership rights with respect thereto.
Section 9. Commencing on and at the Commencement Date and continuing thereafter throughout the time that this Operating Agreement remains in effect, the Town shall make available to the Company and the Company shall have access at all reasonable times during business hours to all of the books and records of the Town relating to the Electric System and to such other books and records of the Town as may be necessary, appropriate or desirable to enable the Company fully, effectively and efficiently to perform its obligations under this Operating Agreement.
Section 10. Commencing on and at the Commencement Date and continuing thereafter throughout the time that this Operating Agreement remains in effect, the Company shall have all control of the Electric System necessary to operate and maintain the same, and shall operate and maintain the Distribution System, and any part or parts of the Generating Facilities that it sees fit, in such manner as the Company deems proper, and shall not be subject to direction by the Town or any officials, agents or employees of the Town with respect to any of such operation and/or maintenance; however, the Company shall be obligated to operate and main-tain the Distribution System as a prudent operator and in a manner consistent with accepted electric industry practices; and the Company and the Town declare and agree that this instrument constitutes an operating agreement and not a lease, and does not effect or provide for any sale or other disposition of the Electric System or any sub-stantial part thereof so long as any of the Bonds are outstanding and unpaid in principal er interest.
Section 11. The Company will not require customer deposits from the existing (on the Commencement Date) customers of the Distribution System. Any customer deposits held by the Town from such existing customers will not be turned over to the Company; the handling or adjustment thereof will be a matter to be settled Ir 'ecn the Town and such customers; and the Company shall have no liability or responsibility in connection therewith. Ilowever, the Company shall be entitled to require customer deposits from all new (including reconnected) customers, and the deposits from such new customers will be held by the Company as its property subject to the Company's standard refund agreements with new customers, and any refunds of such deposits so held by the Company shall be made by tbc Company directly to the customers.
Section 12. De Company is not hereby assuming and shall not be liable or responsible for any financial or other obligations or liabilities of the Town, pro-vided, however, that the foregoing shall not in any way derogate from the Company's obligations to make the deposits and/or payments required by Section 3 of this Operating Agreement. He Town warrants that the Electric System and all of the parts thereof are free and clear of any liens, encumbrances or privileges of any nature whatsoever except for any resulting from the Bond Resolutions or the Bonds, and further, the Town agrees to keep, and/or to restore as may be necessary, the entire Electric System in a good and satisfactory state of repair and operating con-dition consistent with good engineering and oper,ating practices in the electric utility industry, until such time as the Company assumes the responsibility for and the operation of the entire Electric System, failing which the Company shall have the right to do so at the expense of the Town, which expense shall offset and be effective as a credit against the payments thereafter due by the Company to the Town under Section 3 hereof.
Section 13. The rates to be charged or made available by the Company for its services to the various classes or categories of customers served by the Distribution System shall be as hereinafter set forth:
(a) De Town takes cognizance of the rate schedules (" Rate Schedules") filed by the Company in and/or with its rate increase application (" Application") presently pending with the Louisiana Public Service Commission ("LPSC"), and agrees that the Company shall have the right, and the Town hereby authorizes the Company, to place and mainmin said Rate Schedules in effect with respect to the customers served by the Distribution System, beginning on the Commencement Date and continuing during the time that such Application is pending, whether before the LPSC or in the courts; provided that when action on said Application has been brought to a conclusion, whether before the LPSC or in the courts, if the Company's rates to be charged to customers whose rates are regulated by the LPSC, as finally determined in the action on said Application, are less than the rates theretofore billed by the Company to and collected by the Company from the customers of the Distribution System, then the Company will refund to such customers the amounts of such difference.
(b) Commencing at such time as the action on said Application has been brought to a conclusion, whether before the LPSC or in the courts, the Company will then and thereafter charge or make available to the various classes or categories of customers served by the Distribution System the same rates which the Company charges or makes available to the same classes or pategories of customers of the Company cIsewhere in the State of Louisiana whose rates are regulated by the LPSC, and any changes thereafter made in the Company's rates charged or available to such customers elsewhere in the State of Louisiana shall automatically result in and require the making of the same changes in the rates charged or made available to the same classes or categories of customers of the Distribution System. The Town shall from time to time take all such regulatory, rate-making and/or other action, if any, as may be necessary, appropriate or desirable to implement and effectuate in detail the foregoing provisions of this Section 13, but said provisions shall be effective and shall continue in effect as long as this Operating Agreement shall continue in effect regardless of any action or inaction on the part of the Town.
Section 14. Throughout the time that this Operating Agreement remains in effect, the Town shall not:
(a) grant or issue to anyone other than the Company, inconsistently with the Bond Resolutions, any franchise or permit for the generation, transmission, dis-tribution and/or sale of electric power or energy within the corporate limits of the Town as said limits now exist and as they may hereafter be extended, nor for the use of any of the streets, roads, alleys or any other public places within said corporate limits for the construction, operation or maintenance of electric lines or for any of the above mentioned purposes; (b) issue any additional electric revenue bonds, or issue any additional bonds whatever under any of the Bond Resolutions or under any indentures, agreements or documents under which any of the Bonds have been issued, whether heretofore authorized or not; or (c) sell, convey or otherwise alienate, or mortgage or otherwise encumber, the Electric System or any part or parts thereof or any interest or interests therein, norsuffer or permit the same to be done.
Section 15. The Company shall have the right from time to time and at any time, either in its own name or in the name and on behalf of the Town, to pay and refund any or all of the Bonds and/or to pre refund any of the Bonds which may not then be callable. If payment before maturity of some but less than all of the Bonds shall reduce the amounts of any of the Sinking Fund Deposits needed under and for the purposes of the Bond Resolutions by the Fiscal Agent, the respective amounts of such Sinking Fund Deposits as set forth in the attached Sinking Fund Deposit Schedule shall be reduced accordingly. The Company shall have the further right, at any time that the Company considers it economically feasible to do so, to call upon and require the Town to issue and sell refunding bonds in an amount sufficient to pay and refund all of the Bonds then outstanding and/or to pre refund any of the Bonds which may not then be callable or which the Company may not then desire to have called and paid, on the basis of the replacement of this Operating Agreement with a lease purchase agreement whereunder the Company will become the lessee of the Electric System, the Icase payments made by the Company will be sufficient to service and pay the principal of and premium, if any, and interest (the " debt service") on the refunding bonds as such principal, premium, if any, and interest become due and payable, and the Company will have the right and option to acquire the Electric System on the same basis set forth hereinafter in clause or paragraph (a) of this Section 15 when none of the refunding bonds is any longer outstanding, or on the basis of the replace-ment of this Operating Agreement with a new operating agreement reflecting such changes as necessarily result from such refunding, but otherwise having substantially the same terms, conditions, and provisions as this Operating Agreement; and the Town shall be bound and obligated to issue and sell such refunding bonds and to pay and refund and/or pre refund the Bonds then outstanding pursuant to the requirements and instructions of the Company unless the basis upon which the Company has struc-tured such refunding does not provide adequately for the payment of the Bonds and the refunding bonds in principal and interest. If at any time the Town determines that, for its purposes, it is necessary to effect such a refunding, it shall have the right to do so, and the Company shall be obligated to permit the Town to do so, provided that the last maturing revenue refunding bonds shall have a maturity date no later than March 1,1997; and that the total annual debt service amounts for the refunding bonds shall be no greater for any year than the annual amount of the Sinking Fund Deposit for such year. In the event that, for any reason, the con-templated refunding and lease purchase or new operating agreement transaction is not consummated or is thereafter nullified, this Operating Agreement and all of the rights and obligations of the parties hereunder shall continue in full force and effect pursuant to the terms of this Operating Agreement. For purposes of this Operating Agreement and/or any such lease purchase agreement or new operating agreement, Bonds and/or refunding bonds shall be considered to have bce paid and refunded, or to have been pre-refunded, as the case may be, and to be no longer outstanding, at such time or times as monies in the necessary amount or amounts shall have been deposited with the Fiscal Agent, or with the paying agent bank for the refunding bonds, as the case may be, with irrevocable direction to apply such monies to such payment and refunding and/or pre refunding, as the case may be.
At such time as no Bonds or refunding bonds are any longer outstanding (whether as a result of the payments made by the Company pursuant to Section 3(a)(1) of this Operating Agreement or as a result of payments or deposits made pursuant to the provisions of this Section 15 or any combination thereof or othenvise):
(a) The Company shall have the right and option to purchase and acquire from the Town the entirety of the Electric System including all of the fccilities, equipment, plant and property of the Town used or useful for the generation, distribution and/or sale of electticity, all rights of-way, servitudes and other interests in land in connection therewith or necessary for the operation and maintenance of the Flectric System, and all books, records and accounts in connection with the Electric System, for the following considerations:
(1) the continued obligation of the Company to make the payments to the Town provided for in and by subsection (b) of Section 3 of this Operating Agreement, and (2) the grant'ng by the Company to the Town of the right and option to require the Company to pay the Town in a single lump sum, in lieu of the last-mentioned payments, the aggregate amount of all such payments then remaining unpaid, discounted on a basis of iGy]; r annum applied against each such payment to the due date thereof; and upon the Company's exercisc of its right and option so to purchase and acquire the Electric System, title to the Electric System shall thereupon automatically vest in, and the Electric System shall automatically belcng to the Company, ano, in addition, the Town shall be obligated to execute and deliver and shall execute and deliver to the Company all such Instruments and evidences of conveyance and transfer, all such descriptions, and all such other documentation, in recordable form, as the Company may reasonably request for purposes of appropriately documenting and evidencing of record the acquisition and ownership of the Electric System by the Company, and of adequately describing in connection therewith that which the Company shall have so acquired, but the refusal or failure of the Town so to do shall not affect the Company's ownerahlp of the Electric System; and (b) mits Operating Agreement aid /or any such lease purchase agreement or new operating agreement shall thereupon be completely terminated for all purposes, except that (without derogating in any other respect from the effect of such termina-tion) (i) the foregoing clause or paragraph (a) of this Section 15 shall survive such termination and continue in effect in accordance with its terms, and (ii) Section 3(a)(?) hereof and Section 13(b) hereof shall continue in effect as long as the sixty (60) year electric franchise this day granted by the Town to the Company, or any replacement or successor or successive elect-ic franchise granted to the Company, its successors or assigns, shall be or remain in effect.
Section 16. In the event that Force Majeure or the fault or default of the Town renders the Company unable to carry out any of its obligations under this Operating Agreement other than obligations to pay or deposit money, such obligations shall be suspended during the continuance of any inability so caused, but for no longer period.
-Section 17. No default hereunder by either the Town or the Company shall be cause for terminating, cancelling, annul'ing or voiding this Operating Agreement unless such default shall have continued unremedied for a period of not less than ninety (90) days after written notice with respect thereto has been given by the other party. Any period of time during which the party claimed to be in default shall in good faith and with duc diligence contest or defend, as the case may be, the claims, facts, litigation or proceedings assertedly giving rise to such default, or contest the claims of the other party with respect to such claimed default, or during which the party claimed to be in default shall have commenced and thercafter shall in good faith continue and pursue the work necessary to remedy the claimed default, shall not be included in the above-mentioned ninety (90)-day period. However, the foregoing provisions of this Section 17 shall not in any manner derogate from or affect the rights under the Bond Resolutions of any of the holders of any of the Bonds.
Section 18. 'lhts Operating Agreement shall be effective and shall remain in full force and effect from the date hereof, being the date first hereinabove set forth, until none of the Bonds is any longer unpaid or outstanding, such termination date and termination being subject, however, to the provisions of Section 15 of this Operating Agreement.
Section 19. 'Ihis Operating Agreement shall be binding upon and shall inure to the benefit of the Town, the Company, and the respective successors and assigns of each of them.
e IN WITNESS WilEREOF, the Town and the Company have signed and executed this Operating Agreement in several multiple original counterparts on the day and date first hereinabove written at ilomer , Louisiana, each in the presence of ?.he two ondersigned competent witnesses.
WITNESSES: TOW HOME ,
B Mayor (v . d' k a .cZ h ' [/
LOUISIANA POWER & LIGHT COMPANY
/f. bl Senior Vice President
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By
ACKNOWLEDGMENT STATE OF LOUISIANA PARISil OF Claiborne BEFORE ME, the undersigned authority, personally came and appeared M6 /ddy/-/ >1
, who, after first being duly sworn by me, did depose and say that he signed the above and foregoing Operating Agreement between the Town of Homer and Louisiana Power & Light Company as a witness to the signatures of both of the said part!es thereto, in the presence of both of the said parties thereto and another subscribing witness to the signatures of both of the said parties tnereto, all of whom signed in his presence, each signing in the presence of all of the others, and that all of said signatures thereto are genuine and correct.
(A/ / /J'?f-iY&
Sworn to and subscril'ed before me this 15 day of March , 19 78 .
$ :n f Yps, -
Notary Public
_3
Exhibit A
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SINKING FUND DEPOSIT SCIIEDULE Payment Date Total 3/1/78 $112,643.18 3/1/79 $153,064.50 3/1/80 $151,879.50 3/1/81 $151,607.00
$150,213. 25 3/1/82 3/1/83 $149,732.00 3/1/84 $149,112.00 3/1/85 $147,369.50 3/1/86 $146,435.50 3/1/87 $150,375.00 3/1/88 ~
$147,838.00 3/1/89 $147,617.00 3/1/90 $148,271.00 3/1/91 $147,257.00 3/1/92 $146,844. 00 3/1/93 $109,983.00 3/1/94 $ 56,173.00 3/1/95 $ 54,865.00 3/1/96 $ 49,508.00 3/1/97 $ 49,303.00
' Die monthly payments required by Section 3(a)(1) of the Operating Agreement to be paid in each year on the 10th day of each month shall consist of the following: the monthly payments due on January 10th and February 10th of each year shall each consist of one twelfth (1/12) of the total annual payments for such year set forth in this Sinking Fund Deposit Schedule, and the monthly payments due on the 10th day of the remaining months of e9ch year shall each consist of one-twelfth (1/12) of the total annual payments set forth in this Sinking Fund Deposit Schedule for the next succeed-ing year.