ML19274E475
| ML19274E475 | |
| Person / Time | |
|---|---|
| Site: | Black Fox |
| Issue date: | 03/21/1979 |
| From: | Ewing T PUBLIC SERVICE CO. OF OKLAHOMA |
| To: | Varga S Office of Nuclear Reactor Regulation |
| References | |
| 6212DIN8-014-99, 6212DIN8-14-99, NUDOCS 7903260237 | |
| Download: ML19274E475 (73) | |
Text
, 6212 DIN 8- 014 -992 PUBLIC SERVICE COMPANY OF OKLAHOMA '
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A CENTRAL AND SOUTH WEST COMPANY h
. . a D O. DOX 201/ TULSA. OKLAHOMA 74102 /(918)583-3611 w. -Q Public Service Company of Oklahoma Black Fox Station March 21, 1979 Financial Conditions of License File 6212.125.3500.32L Docket STN 50-556 & STN 50-557 Office of Nuclear Reactor Regulat!
Division of Projtet Management Light Water Reactors Branch No. 4 U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Attention: Mr. Steven A. Varga, Chief Gentlemen:
In supplement one to the Safety Evaluation Report for Black Fox Station Units 1 and 2, NUREG 0190, tl.e regulatory staff concluded (2 20.5) that applicants are financially qualified. The staff's conclusion was con-ditiened by the requirement that we provide copies of the executed Rural Electrification Administration (RFA) load commitment notices to the cooperative participants and copies of the executed Joint Ownership Agreement among the three participants.
We are enclosing herein the following documents which fulfill the staf f's requirement:
A. Loan Guarantee Commitment -
Robert W. Feragen, Administrator, Rural E1cetrification Administration to Associated Electric Cooperative, Inc. for
" Associated's 21.159 percent undivided ownership in the Black Fox Nuclear Generating Plant, and transmission facilities associated with the above referenced generating units," undated.
received late January, 1979.
B. Loan Guarantee Commitment -
Robert W. Feragen, Administrator, Rural Electrification Ad.ainistration to Western Farmers Electric Cooperative "to purchase a 400 MW (net) interest in the Black Fox Nuclear Generating Plant (two units) being constructed by Public Service Company of Oklahoma, near Tulsa, Oklahoma," dated January 23, 1979.
C. Black Fox Nuclear Electric Generating Station Ownership Agreement among Public Service Company of Oklahoma and Associated Electric Cooperative, Inc. and Western Farmers Electric Cooperative, dated September 20, 1978.
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Office of Nuclear Reactor Regulation March 21, 1979 Division of Project Management Page Two It is instructive to note that, by its own terms, the Black Fox Nuclear Electric Generating Station Ownership Agreement shall become effective (E 24.1) upon its approval by the Administrator of the Rural Electrification Administration. Thie approval will only be granted upon issuance of the construction permit by the U. S. NRC Office of Nuclear Reactor Regulation in accordance with present REA practice.
Applicants have been proceeding under the providions of the Black Fox Nuclear Electric Generating Station Memorandum of Understanding and the Ownership Agreement, Black Fox Nuclear Electric Generating Station, both dated June 1, 1978 and contained in the Black Fox Station Application for Licenses, con-struction permit stage, Amendment 3, dated June 30, 1978. Any differences between the two ownership agreements are editorial in nature and were made at the request of the REA.
We request that the receipt of the enclosed documents be reflected in Supplement two to the Black Fox Safety Evaluation Report and that no financial qualification conditions be imposed on the Black Fox Station construction permits.
Very truly yours,
.s bf T. N. Ewing, Mana er Black Fox Sta iect TNE:VLC:jk cc: BFS Service List w/ attach.
BLACK FOX STATIO?l SERVICE LIST
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XC: L. Dow Davis, Esquire Joseph R. Farris, Esq.fre
. William D. Paton, Esquire John R. Woodard. III, Esquire
= Colleen Woodhear, Esquire Green, Feldman, Hall & Woodard Counsel for fiRC Staff B16 Enterprise Building U. S. fluclear Regulatory Commission Tulsa, Oklahoma 74103 Washington, D. C. 20555 Andrew T. Dalton, Esquire Mr. Cecil Thomas 1437 South Main Street, Suite 302 U. S. Nuclear Regulatory Commission Tulsa, Oklahoma 74119 Phillips Building 7920 florfolk Avenue Mrs. Ilene H. Younghein Bethesda, Maryland 20014 3900 Cashion Place Oklahoma City, Oklahoma 73112 Mr. Jan A. florris Environmental Projects Branch 3 Mr. Lawrence Burrell U.S. Nuclear Regulatory Commission Route 1, Box 197 Phillips Building Fairview, Oklahoma 73737 7920 florfolk Avenue Bethesda, Maryland 20014 Mrs. Carrie Dickerson Citizens Action for Safe Energy, Inc.
Mr. William G. Hubacek P. O. Box 924 U.S. Fluclear Regulatory Comission Claremore, Oklahoma 74017 Office of In::pection and Enforcement Region IV 611 Ryan Plaza Drive, Suite 1000 Arlington, Texas 76012 Mr. Gerald 7 Diddle General Ma ,ager AssociaLCJ Electric Cooperative, Inc.
P. O. Box 754 Springfield, Missouri 65801 Mr. Maynard Human General Manager Western Farmers Electric Cooperative P. O. Box 429 Anadarko, Oklahoma 73005 Michael I. Miller, Esq.
Isham, Lincoln & Beale One 1st fiational Plaza Suite 4200 Chicago, Illinois 60603 Mr. Joseph Gallo Isham, Lincoln & Beale 1050 17th Street N.W.
Washington, D. C. 20036 ,
UNITED STATLS DcPA11TMLNT OF ACRICULTURE RUR AL ELt.CT HirlCATION ADMINIST H ATION W ASHING TON. O C. 2025C Idr. Rudie D. Slaughter, President Associated Electric Cooperative, Inc.
P. O. Box 754 Springfield, liissouri 65801
Dear Pr. Slaughter:
A Loan Guarantee Commitment in the amount of $1,408,315,000 has been approved for your organization. Under this Commitment the Government will guarantee a loan of $1,408,315,000 to Associated Electric Cooperative, Inc. , Springfield, !!issouri, (Associated) from a legally organized and qualified lending agency pursuant to a contract of guarantee, satisfactory to REA, accog the Government, Associated and the lending agency. The proceeds of the guaranteed loan are to be used to finance the 630 !@l Thomas Hill Unit l'o. 3 coal-fired steam generating plant, expcnsion of' the Prairie Hill coal raine, Associated's 21.739 parcent undivided ownership in the Black Fox Station nuclear generation plant, and transmission fai:ilities associated with the above referenced generating units.
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Mr. Clark T. McWhorter, President )a[
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Dear Mr. McWhorter:
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h A loan guarantee commitment in the amount of $860,583,000 has been :}
approved foi your organization. Under this commitment the Govern- PJ' ment will guarantee a loan of $860,563,000 to the Western Farmers ft '
Electric Cooperative. Anadarko, Oklahoma, from a legally organized N-.
and qualified lending agency pursuant to a contract of guarantee, satisfactory to REA, among the Government, WFEC and the lending 7
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agency. The proceeds of the guaranteed loan are to be used for the 'g.
construction of a 376 IN (net) coal-fired generating unit near Hugo, Oklahoma, and associated transmission facilities and to
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BLACK FOX NUCLEAR ELECTRIC GENERATING STATION I
OWNERSHIP AGREEMENT AMONG PUBLIC SERVICE COMPANY OF OKLAHOMA AND ASSOCIATED ELECTRIC COOPERATIVE, INC.
AND WESTERN FARMERS ELECTRIC COOPERATIVE
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. TABLE OF CONTENTS ARTICLE I . . .. . . . Scope ARTICLE II . . . . . . . Definitions ARTICLE III . . . . . . . Participation ARTICLE IV . . . . . . . . Ownership ARTICLE V . . . . . .. Proj ect Management ARTICLE VI . . . . . . . Financial ARTICLE VII . . . . . . . Billing and Payments ARTICLE VIII . . . . . . . Audits ARTICLE IX . . . . . . . Committees ARTICLE X . . . . . . . Nuclear Fuel ARTICLE XI . . . . . . . Operations ARTICLE XII . . . . . . . Simulator ARTICLE XIII . . . . . . . Construction and Operation Cost Accounting ARTICLE XIV . . . . . . . Conveyance or Creation of Security Interests ARTICLE XV . . . . . . . Transfer of Ownership Interest ARTICLE XVI . . . . . . . Insurance and Protection ARTICLE XVII . . . . . . . Force Majeure ARTICLE XVIII. . . . . . . Liability ARTICLE XIX . . . . . . . Project Continuity ARTICLE XX . . . . . . . Miscellaneous Provisions ARTICLE XXI . . . . . . . Applicable Law ARTICLE XXII . . . . . . . Kotices ARTICLE XXIII. . . . . . . Severability ARTICLE XXIV . . . . . . . Term
m BLACK FOX NUCLEAR ELECTRIC GENERATION STATION OWNERSHIP AGREEMENT AMONG PUBLIC SERVICE COMPANY OF OKLAHOMA AND ASSOCIATED ELECTRIC COOPERATIVE, INC.
AND WESTERN FARMERS ELECTRIC COOPERATIVE This Agreement, made by and among Public Service Company of Oklahoma (PS0), an Oklahoma corporation, and Associated Electric Cooperative, Inc. (Associated),
a Missouri corporation, and Western Farmers Electric Cooperative (Western), an Oklahoma corporation; WITNESSETH:
WHEREAS, the parties to this Agreement (sometimes hereinafter called
" Owners"), either own or have availabic for their use, operate, and maintain electric generation and transmission facilities, and are engaged in the business of generation, transmission, and sale of electric energy; and WHEREAS, the systems of the Parties are already interconnected by transmission lines and are operating in synchronism; and WHEREAS, the Parties each have need of additional generating capacity to meet the need of their respective systems; and WHEREAS, PS0 is in the process of licensing, designing, and constructing a nucicar-fueled, multi-unit electric generating station, to be known as Black Fox Station, and hereinaf ter referred to as " Station" on a site near Inola, Oklahoma, 4
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. in Rogers County, on a construction schedule established to provide for commercial full-load operation of Unit 1 prior to March 1, 1984, and for Unit 2 prior to March 1, 1986; and WHEREAS, each Party has participated in planning for the Station and in early financial support so as to be recognized as an Owner in initial licensing applications; and WHEREAS, the Parties desire to obtain for themselves the mutual benefits and advantages to be realized by the joint ownership of the Black Fox Station Proj ect; and WHEREAS, Associated and Western have heretofore entered into Memorandums of Understanding with PSO providing for, among other things, participation in ownership of the said Station; and WHEREAS, the Parties have heretofore entered into an Ownership Agreement dated June 1, 1978 for co-ownership of the said Station which Agreement was not approved by the Administrator of the Rural Electrification Administration and therefore did not become binding; NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties hereby agree as follows:
ARTICLE I Scope 1.1 The Station will consist of two (2) nuclear-fueled generating units, each nominally rated 1,150 megawatts net electric, including all appurtenant facilities and electric substation necessary for reliabic, efficient, safe, and environmentally acceptable operation, to be constructed and operated for the mutual benefit of the Parties in accordance with licenses, permits, and regulations required by local,
. state, and federal authorities.
1.2 The Station shall be designed, installed, fueled, and operated in a prudent manner and in accordance with good utility practices and appli-cable laws, codes, and regulations, 1.3 The S*ation is to be located on a site in Rogers County, near Inola, Oklahoma.
1.4 PS0 is designated the principal Owner and operator of the Station and will act as Project Manager.
1.5 The Project Manager is given and shall have plenary power, discretion, and authority in all respects and in every detail for the dismantling and disposal of the Station, except as specifically limited herein, and provided that the decision to decommission or cease plant operation shall be cade as hereinafter provided.
1.6 Associated and Western covenant and agree to cooperate with and support PSO in all applications, filings, and compliance with all local, state, and federal regulatory bodies having jurisdiction in all matters pertain-ing directly or indirectly to the Project, its Construction, fueling, and Operation.
1.7 PSO, Associated, and Western as Owners will finance and own the Project as tenants in common with an undivided interest in common facilities so as to achieve the economies of size and single licensing for all Parties.
1.8 It is recognized that precise Construction costs for the Project cannot be determined until incurred, and the Parties hereto agree to partici-pate in the actual total cost of the Project.
1.9 The Parties shall furnish evidence and information which may be required by licensing or regulatory bodies having jurisdiction demonstrating that those Parties have the capability to meet their respective financial obligations to participate in and pay the costs and expenses of the Project.
1.10 It is understood that facilities, if any, required for the sole benefit of one of the Parties hereto shall be financed and constructed by that Party and that the other Parties hereto shall have no responsibility under this Agreement for the provision, operation, and maintenance of those facilities.
1.11 The delivery point for all power and energy from the Station will be at the Station substation 345 kV bus, and each Party hereto shall provide or cause to be provided the necessary transmission facilities or transmission service arrangements to integrate its proportionate share of the output into its respective bulk power transmission system.
1.12 It is the express intent of this Agreement that all Parties hereto, as Owners in the Project, each bear its proportionate share of all costs and risks. It is recognized that future regulations and conditions cannot be fully and clearly forecast; therefore, it is agreed and under-stood that PSO,as Project Manager, shall not intentionally take fortuitous advantage afforded it by virtue of its position by implementing decisions disproportionately advantageous to it. In like canner, PSO shall not be petitioned nor caused to make and implement decisions providing a disproportionate advantage to Associated or Western.
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ARTICLE II Definitions 2.1 Site. The Site as used herein shall mean that land described in Exhibit 1, attached hereto, and made a part hereof, and such additional land as may be required to meet regulatory requirements and for prudent management of the Station and Project-related facilities.
2.2 Station (Black Fox' Station). Station and Black Fox Station as used herein shall mean the Site and the nuclear steau electric generating station owned by the Parties hereto and to be constructed, operated, and maintained in accordance with provisions herein.
2.3 Proj ec t. Project as used herein shall mean the complete facility consist-ing of the Site, Station, substation, fuel supply, Simulator, and ancillary facilities and equipment, whether on or off Site, necessary for a s.fe, efficient, reliable, nuclear-fueled electric generating station meeting regulatory requirements. Transmission lines connecting the Station sub-station to bulk power transmission systems, including such lines on the Site, shall not be included in the Project.
2.4 Owner (s). The Owners are PSO, Associated, and Western, the Parties who are signatories to this Agreement, their successors and assigns, and none other.
2.5 Owner's Share (Ownership Share). Owner's Share and Ownership Share shall be that percentage or decimal fraction of the Station as herein-after established for each Owner.
2.6 Capacity. Capacity as used herein shall mean net negawatt electric capacity.
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2.7 Decommissioning. Decommissioning as used herein shall mean the
. obtaining of licenses, permits, and all acts related to ultimate and final closing as may be required by regulatory authorities and prudent management, but shall not include dismantling, removal, salvage, and restoration of the Site nor the determination of the time or necessity for Decommissioning.
2.8 Construction'(Construct). Construction as used herein shall mean pre-construction, construction, and modification of the Project up to the dates of Commercial Operation; and thereafter shall include replacements, additions, alterations, Decommissioning (as defined in Section 2.7),
dismantling, removal, and final disposition of all components of the Project. Construction includes, but is not limited to, related engineer-ing, design, licensing, procurement, quality assurance, Site acquisition, supervision, expediting, accounting, management, testing, protection, taxes, preoperation net expense, preoperation training, and administration.
2.9 operation-(Operate). Operation as used herein shall mean activities at, or for, the Station subsequent to Commercial Operation dates, or such prior time as the Executive Committee may determine, required to operate, maintain, use, and repair the Station, including, but not limited to, related administration, accounting, supervision, engineering, procurement, quality assurance, testing, training and retraining, fuel handling, security, protection, and taxes.
2.10 Commercial Operation. Commercial Operation as used herein shall mean the state of completion at which a generating unit is determined by the Executive Committee to be reliable and can reasonably be expected to be ready to operate continuously at an acceptable capacity rating. The Executive Committee shall establish the date of Commercial Operation for each generating unit.
2.11 Interest. Interest as used herein shall mean the financing cost of an Owner for funds provided for another Owner, and shall be at the prime interest rate at the First National Bank of Chicago, computed as of the last day of the month for which such Interest is due, plus one percent (1%).
ARTICLE III Particioation 3.1 PSO vill own nominally 1,400,000 kilowatts of Capacity of the Station for its sole use to meet its system requirements and other electric power obl' igations. PSO's Owner's Share shall be equal to 60.870 percent.
3.2 Associated will own nominally 500,000 kilowatts of Capacity of the Station for its sole use to meet its system requirements and other electric power obligations. Associated's Owner's Share shall be 21.739 percent.
3.3 Western will own nominally 400,000 kilowatts of Capacity of the Station for its sole use to meet its system requirements and other electric power obligations. Western's Owner's Share shall be 17.391 percent.
3.4 The actual capacity of each particular unit, as determined from time to time, shall be prorated to each Owner in accordance with the Owner's Share percentage and rounded to the nearest 1,000 KW.
ARTICLE IV
. Ownership 4.1 The Project will be owned by PSO, Associated, and Western, as tenants
- i in common, each with an undivided interest in the ownership fu the percentages herein specified with all rights, duties, and obligations inherent in such ownership, except as modified by this Agreement. The Owners shall take such actions as ray be necessary and appropriate to obtain releases from liens of their respective indentures of mortgage and to make such conveyances each to the other as will vest in each Owner its appropriate undivided interest. The consideration for each such conveyance shall be equal to the product of the cost of such facilities and the fractional interest to be conveyed as hereinafter provided.
4.2 Neither this Agreement nor any other contract or agreement or conduct is or will be intended, and shall not be construed, to create a partner-ship, association, trust, or business trust among the Parties, or any of them, each of which hereby waives and disclaims any such status.
4.3 The Project Ibnager is given the right to determine the use of any or all of the Site by the Owners not directly required for Project facilities for any other utility use, as long as such use does not adversely affect the operation, licensing, liability insurance, autput, or economy of the Station. In the event that PSD wishes to use the Site for a major-installation such as additional generating units, Associated and Western will be compensated for their pro rata shares of the Site so used.
4.3.1 PSO shall be entitled to the use of so much of the Site as may be necessary to construct and connect its transmission
facilities to the Station substation. Such right is not
-[ limited to lines presently contemplated.
In the event that Associated or Western elects to construct and connect a transmission facility to the Station substation, each shall be entitled to the use of so much of the Site as may be necessary, provided that the actual location and con-struction schedule of such transmission facilities shall be subject to approval of PSO, as Project Manager.
4.4 Should any or all of the Project be retired, removed, or salvaged, any net monies received in such divestiture shall be credited to the Owners in proportion to their Owner's Shares.
4.5 Each Owner shall at all times have access to its owner's Share of Capacity and energy output of the Station or any generating unit, except as otherwise provided in Article XI and Article XIX. In the event of a partial outage or limited license which restricts the output of the Station or any generating unit, the remaining Capacity shall be prorated on the basis of Owner's Shares.
ARTICLE V Project Management 5.1 The Parties hereby, except as otherwise specifically provided in this Agreement, appoint PS0 as the sole Project Manager to Construct, fuel, and Operate the Project. Except as otherwise specifically limited in this Agreement, the Project Manager is hereby vested with plenary power, discretion, and authority, in all respects and in every detail, to make all decisions and choices and to do or cause to be done all things directly or indirectly related to the Project. The Project Manager
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will consult with the other Parties on issues of major significance
. in the Project. Such consultation is not to be construed as a limita-tion of the Project Ibnager's decision-making process with regard to its responsibility and authority as set out cbove. Enumeration else-where in this Agreement of specific authority is not intended, and shall not be construed, to limit the scope of authority granted in this Section 5.1. Except as provided in Article X (Nuclear Fuel), only the Project Manager shall have the power, discretion, and authority to deal with third parties concerning this Project.
All Parties agree to cooperate fully with the Project Manager in all things toward furtherance of a timely and economic Construction and Operation of the Project.
5.2 The Project Manager agrees to pursue the Construction and commissioning of the Station and to Operate the Station with due diligence and foresight to meet the scheduled completion dates and the outputs established herein.
PS0 agrees not to unilaterally delay the Construction, commissioning, or Operation of either generating unit for reasons or situations for which it would be singularly advantageous to PSO.
5.3 PS0 shall expeditiously obtain all necessary permits and licenses required for the Construction, fueling, and Operation of the Station, and Associated and Western shall fully cooperate with PSO and lend every assistance in a timely manner, as requested by PSO, and to the extent requested, join in the applications therefor. The Owners hereby recognize that timely pre-paration and presentation of complete licensing and permit applications,
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and support of those applications, are critical to the construction schedule
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and cost control, and that performance by each Owner in respect to Y
, licensing is of the utmost importance to the Project.
5.4 PSO, as Project Manager, shall negotiate, execute, and enforce contracts (including, but not limited to, purchase orders) providing, among other
/ things, for the purchase of materials, equipment, and services for the Construction, Operation, and fueling of the Project. It is understood and agreed that with respect to said contracts, PS0 has the exclusive right to initiate, prosecute, or defend whatever litigation or arbitra-tion which, in its sole discretion, is considered necessary, and any such litigation or arbitration shall be under the sole direction and control of PSO and counsel retained or employed by PSO. PS0 will keep the other Owners advised of the progress of such litigation or arbitra-tion, and shall consult with the Owners prior to settling such litigation or arbitration, but need not obtain the approval or consent of such other Owners to enter into such settlement. In the event that PSD elects not to initiate litigation or arbitration, it shall have the right to engage in whatever negotiations, in 4.ts sole discretion, it considers necessary in pursuance of its right hereunder to enforce contracts. PSO shall keep the other Owners advised of the progress of such negotiations, and shall consult with the other Owners prior to en'tering a negotiated settlement, but need not obtain the approval or consent of such other Owners to enter into such settlement.
5.5 The Owners may examine and inspect any and all plans, drawings, sketches, and reports of the consulting engineer, information and data supplied by manufacturers and suppliers of eqcipment, contracts, and all related
or similar documents at any reasonable time. The Project Manager yv . shall preserve and maintain such documents as may be reasonably required
. by any Owner.
ARTICLE VI Financial 6.1 Each Owner shall be liable for all costs incurred by or on behalf of PSO, as Project Manager,which are properly chargeable to Construction, Opera-tion, and fuel supply of the Project in proportion to its Owner's Share, except as proportioned in Article X (Nuclear Fuel) and Exhibit 2 (Substation) attached hereto and made a part hereof. Such costs include, but are not limited to, PS0's administrative and general overheads, engineering over-heads, Site acquisition, design, engineering, engineering fees, equipment
- and material procurement, installation, Construction, fuel supply, licensing, insurance, preoperation staffing, operator training, quality assurance, project management and supervisfor., startup, Operation, maintenance, modi-fication, Decommissioning, demolition, and disposal.
6.2 Costs incurred directly by Associated er Western shall be that Party's sole responsibility and paid by such Owner, except when such costs have received prior approval from PSO, as Project Manager, to be chargeable to the Project for pro rata payment by the Owners.
6.3 Owners are individually responsible for timely providing the Project Manager their respective share of funds. Nothing contained herein shall be construed so as to obligate PSO, as Project Manager, to use its own funds to cover another Owner's funds required for Construction, Operation, or fuel supply.
6.4 PSO, as Project Manager, is entitled to recover all costs incurred on behalf of Owners, including Interest on funds advanced on their behalf,
>Ub provided that PSO shall not be entitled to receive funds in advance of the need for such funds.
6.5 Owners shall establish separate Owner Project accounts of their own choice to comply with Section 6.3. Project Manager shall be given authority to withdraw funds from the Owner Project accounts, af ter notice to Owner by the Project Manager pursuant to Section 7.2.
6.6 All funds required by PSO, as Project Manager, to meet the fuel require-ments of Associated and Western for the initial and each cubsaquent fuel loading shall be furnished by Associated and Western as required to meet the financial obligations of fuel acquisition, conversion, enrichment, fabrication, shipping, storage, reprocessing, disposal, and all other necessary fueling requirements or service. Such funding and procedures shall be in conformity with the principles and procedures herein established in Section 6.5.
6.7 Funds provided pro rata by the Owners and accounting procedures employed in the determination of costs to be recovered by PSO, as Project Manager, for Decommissioning, and subsequent to Decommissioning, and for disposal of the Station and Site at the end of the Station's useful life, shall be determined by the owners at the time those actions are contemplated.
Such funding and procedures shall be in conformity with the principles and procedures herein established for Construction and Operation.
6.8 Construction and Operating costs, including overhead costs, billed by the Project Manager to Owners shall not include " allowance for funds used during construction" (interest during construction), each Owner being individually responsible for such costs.
6.9 When title to any property is conveyed pro rata to each owner, each
, Owner will thereafter be individually responsible for its tax obligation.
sv 6.10 Pending the resolution of any dispute by the Executive Committee, Owner's negotiation, or judicial proceedings, PSO, as Project Manager, shall pro-ceed with the Project in a manner consistent with this Agreement using its best judgment, and the Owners shall provide the funds required in accordance with this Agreement.
ARTICLE VII
~ Billing'and Payments 7.1 Project Fbnager shall submit to Ovners, as soon as practicable after the end of each month, expenditure statements covering each Owner's Project
. account balance and pro rata expenditures incurred during the month, including, but not limited to, the funds expended for Construction, fueling, and Operation.
7.2 Project Manager shall withdraw funds from owner Project accounts only after at least five (5) banking days notice to Owners in advance of its intent so to do. No such funds shall be withdrawn by Project Manager until the date Project Manager pays the vendor. Uithdrawals inadvertently made before payment to vendor shall be returned to the Project accounts with Interest immediately. Interest earned on funds in Owner Project accounts shall belong to the owner who establishes the account.
7.3 Interest (as defited) on the amount of PSO's own funds advanced on behalf of Associated and Western, shall be added to subsequent statements, pro-vided that statements and notice of funds payable have been timely made by PSO.
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7.4 Statements which have been rendered by Project Manager which are in
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good faith disputed by Owners shall be paid in full under protest, as
, submitted, before they become past due. In the event of a protest, such protest will be lodged in writing, establishing the Owner's full position as to the reason of protest. Any refunds subsecuently paid when protest is finally settled, if more than thirty (30) days from date of protest, shall include Interest each month.
ARTICLE VIII Audits 8.1 PSO, as Project Manager, shall maintain procedures, records, and compre-hensive books of account as may be required to determine the cost of the Proj ect , and for computation of anounts payabic or deposited in Project accounts by owners. The Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission for class A and B utilitics shall be used for the determination of any question related to costs and expenses arising under this Agreement, except that where specific methods of computation are set forth herein, such methods shall prevail.
8.2 An annual audit will be made of the accounting records of PSO pertaining to the recording and development of costs used for billing purposes for the Project. All costs of such audit shall be borne in accordance with Owner's Shares.
8.2.1 The annual audit shall be performed by an accredited auditing firm of national repute, jointly selected by the Owners.
8.2.2 The annual audit shall include the required schedules, reports, and infornation as agreed upon by the audit subcommittee of the
=e.
Management Committee and approved by the Management Co=mittee.
8.2.3
. The certified results of the annual audit will be provided to each Owner.
8.3 In addition to the regular annual audit provided for in 8.2 above, the Owners, individually or jofntly, shall have the right but not the obligation to inspect or audit, at their own expense, the books of account and other records, in whole or in part, maintained by PSO as Project Manager, at any reasonable time. The results of each such inspection or audit shall be made available ta the other Owners upon request.
ARTICLE IX Committees 9.1 The Executive Co=mittee, consisting of PS0's Chief Executive Officer, Associated's General Manager, and k'estern's General Manager, or such other representative as a particular Owner may designate in writing, shall perform all duties specified for it in this Agreement and endeavor to resolve disputes submitted to it.
The Executive Committee shall have no authority or power of decision except with regard to administrative matters.
9.1.1 Any Owner may replace its Executive Committee member at any time. Each Owner shall designate its representative by written notice mailed to each of the other Owners. A member may designate a proxy to represent that Owner and to act for such Owner. A proxy must be designated by written notice
mailed to and received by the other Owners prior to the particular Committee meeting. A proxy shall not be an employee or the Committee member of another Owner.
9.1.2 PS0's representative shall be the Moderator of the Executive Committee. Meetir.gs shall be called by the Moderator or through him upon request of one or more members of the Committee. To the extent practicable, an agenda for each meeting shall be distributed in advance thereof by the Moderator. The Moderator shall be responsible for the prompt distribution of minutes of meetings.
9.1.3 Decisions and determinations of the Executive Committee shall be by unanimous vote of those Owners not in default of this Agreement.
9.1.4 All items received by the Executive Committee requesting action bv an Owner shall specify the date by which such action is to be completed and reported to the members of the Executive Committee.
9.2 A Management Committee shall be established to provide a forum for the timely interchange of Project information and data pertaining to, but not limited to, schedules, Construction, financing, Operation, and fueling, for the administration of this Agreement, and to receive and consider sugges-tions and interests of the Owners pertaining to the Project.
9., J The Ibnagement Committee shall have no authority or power of decision except with regard to preparation of guides and pro-cedures required for administration, or as otherwise specifically provided herein.
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9.2.2 The Management Committee is to be composed of one member from each Owner. The Project !!anager's member shall serve as Moderator.
9.2.3 The Management Committee shall meet periodically as determined by the Committee or on special call through the Moderator by any member.
9.2.4 Meetings of the Management Committee shall follow an agenda established as far in advance of the meeting as practicable in order to give all members a chance to review and request additions to such agenda. The Moderator shall be responsible for preparation of minutes and the minutes shall be mailed to the Management Committee members as soon as prteticable af ter conclusion of each meeting.
9.2.5 All items brought before the Management Committee indicating action by an Owner or the Project Manager, shall specify the date by which such action is to be completed and reported to the members of the Management Committee.
9.2.6 The Management Co=mittee shall appoint an audit subcommittee and other temporary committees or task forces as needed.
9.2.7 The Management Committee shall develop guides and procedures to assist in the day-to-day administration of this Agreement.
Such guides and procedures shall not be construed to amend this Agreement. All guides and procedures shall be subject to approval by the Executive Committee and each such guide or procedure shall bear an effective date and a termination date.
Guides or procedures shall not be extended beyond their termina-tion dates, but their intent may be extended through follow-up guides or procedures approved by the Executive Committee.
ARTICLE X Nuclear Fuel 10.1 It is recognized that nuclear fuel is unique with respect to financing its purchase and processing and as to its final use in generating electric power in a nuclear reactor. PSO shall act on behalf of Associated and Western in all matters relating to fuel for the initial and each succeed-ing fuel load in each unit, including, but not limited to, the acquisition of nuclear fuel material, and contracting for conversion, enrichment, fabrication, transportation, reprocessing, storage, and disposal.
10.2 It is understood that PS0 neither guarantees nor warrants the availability of adequate fuel material, enrichment capacity, or any part of the fuel cycle, nor the total cost thereof. However, recognizing its responsibility to its customers and the other Owners, PSO covenants to pursue with all diligence and foresight the acquisition of such fuel material and the necessary contracts for its processing into fabricated nuclear fuel at the lowest evaluated cost possibic.
10.3 In the event that fuel is contemplated being furnished by Associated or Western, such fuel delivery schedules must be compatible with schedules, plans, and obligations established for fuel acquired by PSO, under such terms and conditions that may be agreed upon between the Owners. Under no conditions shall fuel furnished by Associated or Western serve to increase the cost of fuel to either of the other Owners above that cost which could have been realized through the fuel supply obligations of PSO.
10.4 It is understood that PS0 is entitled to recover all costs incurred on behalf of Associated and Western relating to the furnishing of nuclear
. fuel. It is the intent that all the Owners shall pay the same per unit cost for thermal energy committed for use in a Project generating unit, unless otherwise agreed by the Owners.
10.5 In the event that any owner elects to provide less than its full share of fuel enrichment for a unit as determined by the core physics for a specific fuel load, the other Owner or Owners shall have the option and right to provide their pro rata share of the fuel enrichment required to complete the generating unit's full fuel enrichment loading, in accordance with this Article X, and shall thereby increase its thermal energy shares and acquire the right to schedule the corresponding addi-tional electric energy output when that particular generating unit's capacity is not fully scheduled.
10.6 All nuclear fuel shall be deemed to be owned by the Owners as tenants in common, each with an undivided interest in accordance with the quantities of fuel acquired for the account of each Owner, provided that each Owner may at any time sell and assign all or any part of its interest in such fuel to any entity (" Fuel Lessor") for lease back to such Owner subject to these conditions:
(i) the Fuel Lessor shall waive all rights to partition of such fuel; (ii) the Fuel Lessor shall not obtain any rights not possessed by such Owner with respect to the Operation or scheduling of any generating unit or the removal of nuclear fuel therefrom; (iii) the Fuel Lessor shall not become an Owner in the Project by reason of such position; (iv) such Owner shall indemnify all other Owners against any costs or expenses incurred by them because of such Owner's sale and lease back of its interest in the nuclear fuel.
10.7 Fuel accounting, including, but not limited to, initial costs, pre-payment, fuel reprocessing cost, fuel storage cost, fuel disposal cost, and fuel cost overhead charges, shall be consistent with, but not limited to, instructions prescribed by the Federal Energy Regulatory Commission in its Uniform System of Accounts.
10.8 The cost of fuel supply and spent fuel activities incurred by PSO, as Project Manager, shall be paid by each Owner in proportion to its thermal energy share in each particular fuel material acquisition, processing, delivery, reprocessing, storage, and disposal. Fuel management and on-site fuel handling costs shall be included in Operation costs.
10.9 Each Owner's fueling costs shall include, but are not limited to, costs for fuel in a form ready for use in a nuclear steam supply system, delivery to the Statien, PSO's procurement labor, and labor overhead costs. PSO labor overhead costs shall be determined in the same manner provided in Article XIll.
10.10 For the purpose of determining fuel consu=ed over any accounting period, estimates of the thermal energy used by each Owner, and estimates of re-processing costs, storage costs, salvage values, and disposal costs shall follow procedures approved by the Executive Committee.
10.11 Investment in fuel prior to and after its receipt at the Station, thermal energy consumed, reprocessing costs, storage costs, salvage value, and disposal costs of the fuel shall be deternined and recorded for each fuel assembly and PSO shall keep such records and follow such procedures as may be required to determine as accurately as is reasonably feasible the thermal energy produced from each fuel assembly.
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10.12 The foregoing principles and their application are subject to regulatory
. authority requirements to qualify nuclear fuel cost for inclusion in
. cost of service for rate applications and fuel cost adjustments and to such procedures as the Executive Committee may approve from time to time.
ARTICLE XI Operations 11.1 Operating procedures and guides, excluding "Nucicar Plant Technical Specifications for Operation" procedures, shall be established under the direction of the Management Co=mittee, as provided in Section 9.2.
Such procedures and guides will include energy accounting, loading, schedule requirements, and such other items as pertain to the day-to-day Operation and loading of the generating units for the benefit of the Owners and will be revised and updated as necessary to meet current operating conditions.
11.2 It is recognized that operation of nuclear units and present inter-connected system operation methods and technology require certain limitations be placed on day-to-day operations. It is therefore agreed that the following items, among others, will be set out in detail in the operating procedures and guides for the Station:
11.2.1 Initially, there will be no remote loading of the units, and therefore, all capacity and energy shall be on a dispatcher's schedule basis with no provisions for auto-matic scheduling or load frequency control, 11.2.2 Scheduling of output shall not call for unreasonable or uneconomical changes in scheduled output.
. 11.2.3 Each generating unit will have an operating minimum load and such minimum will be apportioned according to Owner's Shares and each Owner will be required to schedule and receive its minimum schedule, unless another Owner's load schedule will cover the generating unit's minimum load, 11.2.4 In the event that any Owner fails at any time to schedule its full available capacity from a generating unit, such unscheduled capacity may be utilized by the other Owners t(
me',t their system requirements. If so utilized, such capacity shall be shared by the other Owners on a pro rata basis or as mutually agreed. Energy utilized in this way shall not in-crease or decrease an Owner's total thermal energy entitlement from any particular fuel load.
13.3 Each Owner shall bear its Owner's Share of the supply of energy and losses for Station use when such energy is not generated by the Station.
Associated and Western shall schedule their required energy share plus appropriate losses into PSO's transmission system interconnections con-currently with such Station requirements.
11.4 PSO, as Project Manager, shall have the responsibility for and is hereby fully authorized to act for itself and on behalf of the other Owners, to maintain appropriate levels of materials, supplies, tools, and spare parts as required for reliable operation and timely maintenance of the Station.
11.4.1 The expenditure for original spare parts shall be included in Construction costs and shall be borne by the Owners in the ratio of their Owner's Shares. Replacement of spare parts
used in Operation wil.! norcally be a maintenance expense.
Additional spare parts may be added to the spare parts inventory from time to time.
11.4.2 Records shall be kept as to physical quantities of spare parts at the Station. Such records shall be subject to verification by inventory in conjunction with annual audits.
11.4.3 Replacement of tools, including small tools, as necessary from time to time in the Operation of the Station shall be paid pro rata by the Owners.
11.5 Any time af ter either unit is in Co==ercial Operation and any Owner or Owners propose to cease operation of either one or both generating units and such generating unit continues to be operable and licensable, or any Owner declares its in-bility to continue paying its total Owner's Share of Project costs, the Owners hereto shall negotiate in good faith toward an equitabic amendment to this ownership Agreement.
In the event that a mutually satisfactory amendment cannot be negotiated, any Owner or Owners desiring to continue operation shall have the option and right to:
(1) buy, or to bring in a replacement owner to buy, all or any part of, the interest of the owner or Owners proposing to cease operation at the fair value of its Owner's Share; or (2) operate the generating units for their own account cnd pay all the Operation and fueling costs of the Owner or Owners pro-posing to cease operation.
11.5.1 During such period of negotiation or until an option pursuant to 11.5(1) or 11.5(2) above has been exercised, which period of time shall not exceed twelve (12) months af ter the date g (p 32 Mw- . g gL%ftY A 2"EE~U_kk h % M d aft b
notice to cease operation under this Section 11.5 is made, the Station shall continue to be operated for the benefit of all the Owners, and all the Owners shall pay their Owner's Share of Operation and fueling costs.
11.5.2 In the event PSO's Ovnership Share is acquired as provided in 11.5(1) above, or PSO's Share is operated for the account of another Owner as provided in 11.5(2) above, an owner desiring to continue Operation shall take over as Project Manager and shall contract vi h PSO, under terms of this Agreement, for PSO to operate the Project for the new Project Manager with the same diligence and cost as it would have if desiring to continue operation, until such new Project Manager is o.ualified -
to assume full Project Manager responsibilities. Such new Project Manager shall diligently make an effort to become qualified.
11.6 If, at any time, af ter either unit is in Co=mercial Operation, a major expenditure is required to continue or restore operation of either or both units, the Executive Connittee will be consulted before such expendi-ture is made. In the event that any owner or Owners do not wish to parti-cipate in such expenditure and other Owner er Owners do desire to make the expenditure and continue operatior., they may do so. In this tvent, the Parties shall negotiate in good faith toward an equitable amendment to this Ownership Agreement. In the event that a mutually satisfactory amend-ment cannot be negotiated, the Owner or Owners desiring to continue oper-ation shall have the same options and rights as provided in Sections 11.5, 11.5.1 and 11.5.2
11.7 The Owners are encouraged to continue operating system dispatch offices, manned on a 24-hour basis, and are encouraged to continue active parti-cipative membership in the Southwest Power Pool (SPP) or its successor organization. PSO, Associated, and Western hereby agree to operate their systems in accordance with the operating reco=mendations of SPP and the North American Power System Incerconnection Committee (NAPSIC), or such successor organization rul.es insofar as practicable and prudent.
11.8 Associated and Western nr.y assign qualified personnel employed by them to certain engineering, administrative, operation, or maintenance posi-tions or training assignments during Construction and Operation of the Station. PSO shall retain the sole right of approval., acceptance, assignment, or termination of assignment for such employees of Associated and Western and to limit such employees to a practical number, but such rights shall not be arbitrarily administered.
11.8.1 Payroll costs, overhead costs, and expenses of such employees shall be paid by their respective employers. Payroll costs including appropriate overhead and indirect costs of such c=ployees on a long-term Station complement assignment will be credited to the Owner's Construction and Operation cost obligations, and such credit amount charged pro rata to all the Owners. Such credit shall not include per diems, expenses, salary adjustments for dislocation,or other costs incurred by virtue of the remote assignment of the Duner's employee, and furthermore, shall not exceed the cost of a PSO employee competent to perform a similar assignment.
11.8.2 No credit shall be allowed for pay or expenses to an Owner's
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employee, including PSO, who is on short-term or training assignments at the Station.
ARTICLE XII Simulator 12.1 As an integral part of the Project, PSO, as Project Manager, has contracted with the General Electric Company (GE) for CE to install and operate a Boiling Water Reactor (BWR) operator training facility on the Site, such facility to include a simulator which models the Station and its control rooms. The Owners hereby agree that structures, improvements, and ser-vices provided by the Project Manager to CE in support of the training facility are an integral part of the Project. Capital improvements furnished for GE shall be owned in accordance with Ownership Shares and paid in the same Lanner a. provided for Station Construction. Services and expenses incurred by the Project Manager for the Simulator shall be shared by the Owners in accordance with Ownership Shares in the same canner as provided for Station Operation.
12.2 As a consideration to the Owners for providing the Simulator building and other services, the CE contract will provide BUR operator traininr course credit accruals for Station Operators enrolling in technology training, operator training, retraining, and refresher training conducted at the Si=ulator by CE. All such training course credits and all other considerations received from GE shall be chared by the Owners in proportion to Ownership Shares.
12.3 As a consideration to GE to install and operate a BWR operating training facility on the Site, an advance deposit for Station Operator training vill be made to CE in the totr.1 amount of $500,000, to be paid in twelve
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(12) equal monthly payments beginning with GE's beneficial use of
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the facility, and it is agreed that the Owners will share in this advance payment in accordance with their Ownership Shares and in accor-dance with the requirement to share training costs for the Project.
ARTICLE XIII Construction'and Operation Cost Accounting 13.1 Construction and Operation cost, including overheads, shall include expenditures to the extent that they are charged or allocated to the Project in accordance with sound accounting practice and consistent with instructions prescribed by the Federal Energy Regulatory Commission in its Uniform System of Accounts.
13.2 Nuclear fuel costs shall be incurred and billed as provided in Article X and are excluded from Operation costs addressed in this Article XIII.
13.3 The charges for overhead costs shall be determined and applied on a basis consistent with the principles set out in Exhibit 3, " Overhead Loading Factors," attached hereto and made a part hereof. The books of account and the calculations determining the factor for each overhead item and the application of the overhead factors shall be subject to audit. It is understood that, if upon audit, the amounts used in the determination of the factors do not accurately reficct amounts recorded in the books of account; or where estimates, used in accordance with the methedology described herein, result in an af ter-the-fact determination that the use of said estimates caused the aggregate allocation to be incorrec.t; or that the allocation was not applied in the manner prescribed, the overhead rates shall be adjusted to actual at the end of each fiscal year. The
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- adjusted rates shall be used in the preparation of refunds or additional billings to Associated and Western for such year, and as the basis for allocating overhead costs during the next succeeding fiscal year.
13.4 PSO shall provide monthly to Associated and Western its estimate of the cost of Operation for the ensuing month and an update for the remainder of the budget year. During construction PSO shall provide monthly to Associated and Western its current best estimate, by unit, of the cost to co:plete con-struction of the Project. Cost of Construction and Operation, including overhead costs and all other charges and Project account balances, shall be reported nonthly to Associated and Western.
13.5 Uithin ninety (90) days af ter this Agree =ent becomes binding, a review will be made relative to the charges made under the Memorandum of Understanding between PSO and Associated, and PS0 and Western, to reconcile those charges to the charges herein authorized, and appropriate adjustments shall be made.
13.6 PSO, as Project Manager, shall prepare completion reports and supplements as required to establish the basis for electric plant accounts for each Owner as prescribed by the Federal Energy Regulatory Commission.
13.7 PSO may, at its sole option, revise its accounting procedures for charges to Construction or Operation, in which event, the Owners agree to a=end this Article XIII to correspond with PSO's revised accounting procedures as necessary to maintain the prir.ciples herein established.
13.8 Should any Owner determine that the principles established in this Article XIII have become inequitabic, the Owners shall, at the request of any Owner or the Project Manager, negotiate in good f aith to correct such inequity in compliance with the Project scope as established in Section 1.12.
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ARTICLE XIV Conveyance or Creation of Security Interests 14.1 Each Owner shall have, without need for consent from or prior offer to any other Owner, the right at any tine and from time to time to convey or create any form of security interest in all of its interests and entitlements in all or any part of the Project as security for its present or future bonds or securities, including a mortgage or conveyance to a trustee or trustees, provided that any such conveyance or creation by its own terms shall be subject to all the terms and conditions of this Agreement.
An Owner shall have no right, power, or authority to convey any interest in the ownership right of any other Owner.
14.2 Any mortgagee, trustee, or secured party under present or future deeds of trust, mortgages, indentures, or security agreements of any of the Owners, and any receiver, referee, or trustee in bankruptcy or reorganization of any of the Owners, may without need for the prior written consent of the other Owners, succeed to acquire all of the rights, titles, and interests of such Owner in the Project and in this Agreement, and may take over possession of or foreclose upon said property, rights, titles, and interests of such Owner.
ARTICLE XV Transfer of Ownership Interest 15.1 During and throughout the useful life of the Station, no Owner shall take any action (including, without limitation, commencing or maintaining any proceeding in any court) for the purpose of or which might result in
partition for sale for division of the proceeds, in whole or in part, of the Project, or any or all other improvements made thereto and each Party hereby waives, releases, and covenants not to enforce any rights which it now has or hereafter acquires to take any such action in respect of any of said property, whether now existing or hereaf ter acquired, and each Party shall from time to time, upon the written request of another Party, execute and deliver such further instruments as may be necessary or appropriate to effect and confirm the foregoing waiver, release, and covenant.
15.2 Except as provided in Article XI, Article XIV, and Article XV, if an Owner desires to sell or otherwise transfer all or any part of its undivided interest in the Project, it shall, before sale or transfer to another entity, give written notice to the other Owners of the interest offered for sale or transfer, the terms and conditions of said offer, and the date, not less than twelve (12) months from the date of the notice, when it is proposed to consummate the sale or trancier. Such other Owners, and each of them, shall have the exclusive option to obtain such interest upon said terms and conditions for a period of six (6) months from the date of said notice.
This option shall be exercised by giving written notice of acceptance to the offering Owner. If more than one Owner accepts the offer, the interest sold shall be apportioned in accordance with the relative Owner's Shares of the accepting Dwners or in such other manner as the accepting Owners agree to in writing.
15.3 For twelve (12) months after completion of Decommissioning and Site restoration, PSO, its successors,and assigns, shall have the exclusive
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right and option to purchase all or any part of the interests in the Project of the other Owners, or either of them, not retained as required for regulatory requirements, for a consideration equal to the then fair market value of such interest. This option shall be exercised by giving written notice to such Owners specifying the interest to be obtained and the date on which it is proposed to consummate the sale, which date shall not be more than six (6) mcnths fron the date of the notice.
15.4 A transfer as a result of a merger, consolidation, or acquisition of sub-stantially all of the electric utility property of an Owner; a transfer by an Owner to its wholly-owned subsidiary or parent or to any entity which is under common ownership or control with it; or the assignment by Associated or Western of all or substantially all of its rights to the United States of America, may be made without restriction and shall not be subject to the foregoing right of first refusal, provided that in each case the transferee expressly assumes the Owner's obligations hereunder.
15.5 Except as provided in Article XIV and Section 10.6, the sale, or other transfer of all or any part of the undivided interest of an Owner, and all of the rights accruing to an Owner under or as a result of this Agreement, must be to an entity which is engaged in the electric utility business and who can meet the requirements of the Nuclear Regulatory Co= mission or its successor regulatory body for an Owner of a nucicar electric generating facility.
15.6 No transfer of any interest shall relieve any Owner of its obligations hereunder without express release by the remaining Owners, but such express release shall be granted upon the furnishing to the remaining
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Owners of reasonable assurance that the financial ability of the transferee is not substantially less than that of the Owner involved.
In the event of any transfer pursuant to Section 15.4, each owner shall be deemed to have granted to the Owner making such transfer its express release from all obligations under this Agreement, except obligations accrued at the time of such transfer.
15.7 Except as provided in Article XIV, and before a transfer of ownership interest shall be effective, any successor to the rights, titles, and interest of an Owner shall assume and agree in writing to fully perform and discharge all the obligations hereunder of such Owner, and such suc-cessor and transferee shall notify and furnish evidence to each of the other Owners of such transfer, assignment, or merger.
15.8 To comply with the provisions of Article 2, Section 32, of the Oklahoma Constitution, and any other applicabic constitutional provision, statute, or rule of common law concerning the rules against perpetuities or suspension of the power of alienation, the limitations herein imposed upon the sale or other transfer of all or any part of an Owner's interest shall be binding upon the Parties, their successors, assigns, and legal representatives, until twenty-one (21) years after the death of the last surviving member of the following class: The respective officers, directors, and trustees of the Parties and their immediate and remote descendants who are living at the effective date of this Agreement.
ARTICLE XVI Insurance and Protection 16.1 PSO, ec Project Maneger, is hereby authorized to, and shall obtain and maintain, policies of liability and property insurance with respect to smm=enente .a-zm:nrsresammeswrmansmresas
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the Project elements and the Construction, fueling, and Operation thereof,
. which shall afford protection against those insurable hazards and risks which good utility practices require. Insurance carriers, insurable
, values, limits, deductibles, retentions, and other special terms shall be approved by the Executive Committee. Any changes in insurance coverage and policies shall be promptly reported to the Owners. Each Owner, at its expense, shall have the right to secure such additional insurance coverage as may be desired and such additional coverage may.be effected through endorsements on policies of Project-related insurance. It is recognized that the amount of property insurance available to generating units at a nuclear generation site may be subject to an overall site limitation and that, if so, the Project Manager rey be unable to obtain all of the property insurance coverage which would otherwise be required by this Article XVI.
16.2 Insurance coverage shall include, among other things, to the extent available, nuclear liability insurance, in such form and in such amount as will meet the financial protection requirements of the Atomic Energy Act of 1954, as amended, and an agree =ent of indemnification as contemplated by Section 170 of said Act. If the nuclear liability protection system contemplated by said Section 170 is repealed or changed, the Project Manager shall obtain and maintain to the extent available on reasonable terms, alternate protection against nuclear liability.
36.3 Any losses, damage, or liability arising pursuant to this Agree =ent, not insured by the Project insurance, other than as between the Owners, shall be borne by the Owners in accordance with their Owner's Shares, except as provided in Section 18.2.
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16.4 The Project Manager is hereby authorized on behalf of the Owners to
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settle any loss covered by any policy of insurance; provided however,
, the Project Manager shall not, without prior written consent of at least one of the other Owners, settle any loss where the amount to be paid in settlement exceeds a total liability to the Owners of one million dollars
($1,000,000).
16.5 In the event any portion of the insurance contemplated by this Articia XVI is unavailable or cannot be obtained on reasonable terms, written notice of such fact shall be given by the Project Manager to all Owners.
16.6 Each policy obtained pursuant to this Article XVI shall, to the extent of their insurable interest, include all Owners as insureds, each to the same effect as if separately insured and shall, if any Owner shall so request it, include as insureds, nortgagees and others holding a security interest in cach insured's undivided interest in a Project element, and Certificates of Insurance for all such policies shall be provided to each Owner.
ARTICLE XVII Force Majeure 17.1 Failure to perform, in whole or part, any obligations under this Agreement (except the obligations to pay) shall be excused where such total or partial failure was the proximate result of a force majeure, provided that any Owner, or the P2 oject Manager, aff ected by a force majeure shall use due diligence to place itself in a position to perforn its obligations hereunder.
Force majeure shall be deemed to be any cause beyond the control of the af fected Owner, or the Project Manager, which such Owner, or the Project Manager, could not reasonably have been expected to avoid by exercise of
due diligence and foresight, including but not ' limited to: Storm, flood, drought, lightning, earthquake, fire, explosion, failure of facilities not due to lack of proper care and maintenance, civf' disturbance, .
sabotage, labor dispute, var, national emergency, and restraint by court or other public authority. Nothing contained herein shall be construed so as to require an Owner, or the Project Manager, to settle any strike i or labor dispute in which it may be involved.
ARTICLE XVIII Liability 18.1 The Project Manager's liability is limited in the following manner. Except as provided in Sections 18.2 and 18.3, the Parties, for themselves, their successors, assigns, and legal representatives (hereafter in this Article referred to collectively as " Parties"), and each of them,' hereby release waive, covenant not to sue, and discharge Project Manager, its successors, assigns, and legal representatives, and its or their present and future officers, directors, agents, servants, employees, and stockholders, and their successors, assigns, and legal representatives (hereaf ter in this Article referred to collectively as " Project Manager") of and from any and all liability to said "Partics" for direct, indirect, special, and consequential loss, cost, damage, or e.xpense, and any and every claim, de=and, action, or right of action, of whatsoever kind or nature, e.ither at law or in equity resulting from any act, error, or omission, whether negligent or not, of " Project Manager" (or any person or entity whose act, error, or omission, whether negligent or not, would be imputed to " Project Manager") which is directly or indirectly related to, connected with, or
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. arising out of the performance or nonperformance of " Project Manager" under this Agreement or in the Project; including, but not limited to, those on account of injury to or death of any person or persons, or the damage, loss, destruction, or diminution in value of any personal or real property and interest therein, or the loss of actual or anticipated business revenue, personal income, profits, or loss of use of electric power, or the nonoperation or increased expense of operation of other facilities, or the cost of capital, or the cost of purchased or replacceent electric power, or any other economic loss, direct or indirect. The
" Parties" further agree not to take any action, including, but not limited to, obtaining or enforcing any judgment, or fail to act, which action or inaction vould result in the " Project Manager," whether negligent or not, .
having to make payment for contribution or indemnity to entities which are not " Parties."
18.2 Except as provided in Section 18.3 and except to the extent such liability is discharged or indemnified by Project policiec of insurance, or other contracts of indemnity, no Owner or the " Project Manager" will be responsible to the customers, agents, servants, employees, stockholders, members, officers, directors, or trustees (or their successors, assigns, legal representatives, heirs, or other persons claiming through them) as such, of any other Owner for any loss, cost, damage, or expense arising from or in connection with action or failure to act, whether negligent or not, in connection with this Agreement or the Project, and each Owner whose customers, agents, servants, or employees make a claim for such loss, cost, damage, or expense, shall indemnify, save harmless, and defend the other Owners, and the Project Manager, their agents, servants, employees, stockholders, members, officers, directors, and trustees from all cuch claims, demands, and actions, and all gmmumman.mnxwwemuruwe:wwwm-
direct, indirect, special, and consequential loss, cost, damage, or expense
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incurred in connection therewith, including, but not limited to, attorneys' fees.
18.3 Each Owner and Project Manager shall be solely responsible for its default and breach of this contract, and of its own acts of bad faith or willful misconduct, and will indemnify, hold harmless, and defend the other Owners, and each of them, from all direct, indirect, special, or consequential loss, cost, damage, expense, claim, or demand resulting therefrom. Every right and remedy at law or equity is reserved to Owners and Project Manager to give effect to this Section, including the right to recover therefor all direct, indirect, special, or consequential loss, cost, damage, expense, claim, or demand resulting therefrom.
ARTICLE XIX Project Continuity 19.1 Owners agree that uninterrupted Construction and Operation of the Project is desirable and essential, regardless of any controversy that may arise between them, or with third parties.
19.2 In event of default by any Owner, any non-defaulting owner may exercise one or any combination of the following options:
(a) enforce all rights and remedies available to him at law and equity; (b) require defaulting Owner to execute necessary conveyances, assignments, and releases of encumbrances to effectively deliver to the non-defaulting Dwners its interest in the Project, under terms and for a price to be mutually deter-mined by the Parties.
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(c) require Project Manager to forthwith suspend delivery of capacity and energy to defaulting owner.
19.3 In the event of default by any owner, the non-defaulting owners, in addition to options contained in Section 19.2 above, shall mutually agree to:
(a) liquidate the Project; or (b) proceed with the Project on terms mutually agreed by non-defaulting Owners.
19.4 During the period delivery of capacity and energy to a defaulting Owner is suspended for any reason, Project Manager shall pay defaulting Owner for the amount of thermal energy, if any, owned by defaulting owner which is used by Project Manager for the benefit of non-defaulting Owners during such period of suspension in proportion to their pro rata interest, unless otherwise mutually agreed to by the non-defaulting Owners.
19.5 In the event non-defaulting owners elect to liquidate the Project as provided in 19.3(a), the Owners shall not be entitled to liquidation proceeds until after all costs of liquidation have been met.
19.6 In the event non-defaulting owners elect to proceed with the Project as provided in 19.3(b):
(a) PSO (whether in default or not) shall continue as Project Manager with the same responsibilities and diligence, and under the same contract terms as it would have done had there been no default, and if PSO be in default, a non-defaulting owner shall take over the Project Manager's duties as expeditiously as it can qualify to do so.
(b) the Project shall proceed under the direction of the Project
Manager as provided in this contract during any time the Owners are engaged in negotiation, disput arbitra-
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tion, or litigation concerning matters referred to in this Article, or cencerning third parties.
19.7 When the Project is not being liquidated, but is proceeding under the conditions of this Article, the defaulting Owner shall, prior to utilizing funds for any other project, facility, or venture, reach mutual agreement with non-defaulting owners on matters in negotiation, dispute, arbitration, or litigation concerning any matter referred to in this Article.
ARTICLE XX Miscellaneous Provisions 20.1 This Agreement shall be binding on the successors and assigns of each Party or Owner and insofar as permitted by law on any receiver or trustees in bankruptcy, receivership, reorganization of any Party or Owner, or other court proceeding.
20.2 Each Owner shall, upon request of another Owner, execute and deliver to such Owner any document reasonably required to implement any provisions of this Agreement.
20.3 Any nusber of counterparts of this Agreement may be executed and each shall have the same force and effect as an original.
20.4 On the effective date hereof, this Agreement shall constitute the entire understanding between the parties superseding any and all previous or con-temporaneous understandings pertaining to the subject matter contained herein, whether written or oral, including, but not limited to: The Memorandum of Understanding heretofore entered into by PSO and Associated; the Memorandum of Understanding heretofore entered into by PS0 and Western; the Memorandum of
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Agreement among the Parties dated June 1,1978; and the Ownership Agreement
- among the Parties dated June 1, 1978.
20.5 Failure by an Owner to insist on any occasion upon strict performance of any provision of this Agreement or to take advantage of any other rights shall not be construed as a vaiver thereof or as a vaiver in the future of the same right or a similar right.
20.6 Each Exhibit referred to herein is a part of this Ownership Agreement for all purposes as fully as if herein set forth verbatim.
20.7 The captions for the Articles are merely for convenient reference and are not intended to govern, limit, expand, nodify, or in any manner affect the scope, meaning, intent, or relative importance of the substantive portions of this Agreement.
20.8 Remedies provided in this Agreement are cumulative and shall be in addi-tion to all other remedies available at law or in equity.
20.9 This Agreement and any amendments to this Agreement and all obligations herein assumed by any Owner, or the Proj ect Manager, shall in all respects be subject to the applicable rules, regulations, and orders of governmental authorities having jurisdiction in the premises.
20.10 Nothing in this Agreement shall be construed to prevent any Owner or the Project Manager from resisting, challenging, contesting, or appealing any 1aw, statute, regulation, or decision of any governmental authority, which it claims to be invalid, unlawful, arbitrary, or capricious.
20.11 Each Owner and the Project Manager shall comply with all applicable statutes, ordinances, rules, regulations, and orders of governmental authorities per-taining to the Project, including, but not limited to, obligations imposed W4? F Ws[Q M & &s
by licensing requirements, air and water standards, environmental regulations and requirements, and provisions of any Environmental Impact Statement issued by the United States of America with respect to the Project pursuant to the National Environmental Policy Act; provided that
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the cost of environmert.a1 requirements imposed by the Rural Electrification Administration, which are in excess of the requirements imposed by the Environmental Impact Statements issued by the Nuclear Regulatory Commission, shall be deemed to be for the sole benefit of Associated and Western, and shall be paid by them in addition to their Ownership Shares of costs.
. 20.12 The following provisions are included in this Agreement only to comply with legal requirements; the Parties do not intend by such recitals to bind themselves beyond their icgal duty. In the event of cancellation, termination, or suspension for noncompliance with this Section 20.12, such cancellation, termination, or suspension shall be limited to obligations as . Project Manager, and shall not be applicable to Ownership or financial obligations of the Parties.
20.12.1 During the performance of this Agreement, the Parties agree as follows:
(1) The Project Manager will not discriminate against any e=ployee or applicant for employment because of race, color, religion, sex, or national origin. The Project Manager vill take affirmative action to ensure that applicants are e= ployed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the
. .- 1 -
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following: Employment, upgrading, demotions or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection of training, including apprenticeship. The Project Manager agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this Equal Opportunity Clause.
(2) The Project Manager vill, in all colicitations or advertisements for employees placed by or on behalf of the Project Manager, ctate that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or
, national origin.
(3) The Project Manager will send to each labor union or representative of workers, with which it has a collective bargaining agreement or other contract or understanding, a notice advising the said labor union or workers' representative of the Project Panager's co=mitments under this Section, and shall post copies of the notice in conspicuous places available to employees and appli-cants fer employment.
(4) The Project Manager will comply with all provisions of Executive Order 11246 of September 24, 1965, and the rules, regulations, and relevant orders of the Secretary of Labor.
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(5) The Project Manager vill furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and vill permit access to its books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, rer.1ations, and orders.
(6) In the event of the Project Mar.ager's noncompliance with the Equal Opportunity Clause of this Agreement, or with any of the said rules, regulations, or orders, this Agreement may be canceled, terminated, or suspended in whole er in part,and the Project Manager may be declared ineligible for further governmental contracts or federally assisted construction contracts in accordance with pro-cedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor,.or as provided by law.
(7) The Project Manager vill include this Equal Opportunity Clause in every Project contract or purchase order unless execpted by the rules, regulations, or order of the Secre-tary of Labor issued pursuant to Section 204 of Executive Order 11246 of Septe=ber 24, 1965, so that such provisions will be binding upon each contractor, subcontractor, or EE:uramanr:remee--. w rm e m ur m v e m =- w w
vendor. The Project Manager vill take such action -
vith respect to any contract or purchase cder as the administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance; provided however, that in the event the Project Manager becomes involved in, or is threatened with, litigation with a contractor or vendor as a result of such direction by the administering agency, the Project Manager may request the United States to enter into such litigation to protect the interests of the United States.
20.12.2 The Project Manager acknowledges that it is familiar v'ith the Rural Electrification Act of 1936, as amended, the so-called " Kick-Back" -
Statute (48 Stat. 948), and regulations issued pursuant thereto, and 18 U.S.C. 287, 1001, as amended.
20.12.3 Each Owner certifies that lit does not maintain or provide for its employees any segregated facilities at any of its establishments, and that it does not permit its employees to perform their services at any location, under its control, where segregated facilities are maintained. Each Owner certifies further that it will not maintain or provide for its ecployees any segregated facilities at any of its establishments, and that it will not permit its employees to perform their services at any location, including the Project, under its control, where segregated facilities are maintained. Each Owner, agrees that a breach of this certification is a violation of the Equal Opportunity Clause in this Agreement.
As used in this certification, the term " segregated facilities"
.t
, - ; ._w .fmeans any. vait'ing. rooms, xwork a'reas' , restrooms and washro'o=s, restaurants and other eating areas, time-clocks, locker rooms, and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees which are segre-gated by explicit directive or are in fact segregated on the basis of race, color, religion, or national origin, because of habit, local custom, or otherwise. The Project Manager agrees that (except where it has obtained identical certifica-tions from proposed subcontractors for specific time periods) it vill obtain identical certification from proposed contractors prior to the award of contracts exceeding $10,000 which are not exempt from the provisions of the Equal Opportunity Clause, and that it will retain such certifications in its files.
20.12.4 In the performance of this Agreement, at least forty percent (40%) in cost of the unmanufactured articles, materials, and supplies used, or to be used, shall have been mined or produced in the United States, and at least forty percent (40%) in cost of the manufactured articles, caterials, or supplies used, or to be used, shall have been manufactured in the United States, substantially all from articles, materials, or supplies mined, produced, or manufactured, as the case may be, in the United States; provided, that the cost of foreign articles, materials, or supplies to be used cay exceed forty percent (40%) in the event and to the extent that the Administrator shall expressly, in writing, authorize such use pursuant to the provisions of the s ; .;, . . ?46 -
~
- -- - ' - ~
_ _ _ _ -_ m--- - ---
Rural Electrification Act of 1938, being Title IV of Public Resolution No.122, 75th Congress, approved June 21, 1938. The Project Manager agrees to obtain and submit to Associated and Western such certificate or certificates, signed by all material suppliers, contractors, and all sub-contractors furnishing equipment or performing construction for or on the Project, with respect to compliance with the foregoing provision as the Administrator from time to time may require.
20.12.5 No nember of or delegate to the Congress of the United States shall be admitted to any share or part of this Agreement or to any benefit to arise herefrom other than the receiving of electric service on the same terms accorded other consumers.
20.12.6 In the acquisition, construction, and completion of the Project pursuant to this Agreement, the Project Manager shall at all times take all reasonable precautions for the safety of employees on the work and of the public, and shall comply with all applicable pro-visions of federal, state, and municipal safety laws and building and construction codes, including without limitation, all regula-tions of the Occupations 1 Safety and Health Administration.
20.12.7 Notwithstanding anything contained in this Agreement, Associated and Western shall be under no obligation to advance any funds to PSO to finance the construction or acquisition of any building in any area heretofore identified by the Secretary of Housing and Urban Development, pursuant to the Flood Disaster Protection Act of 1973 (the " Flood Insurance Act") or any rules, regulations, or
. a
orders issued to implement the Flood Insurance Act (" Rules"), as an area having special flood hazards, or to finance any facilities
- or materials to be located in any such building, or in any building owned or occupied by PSO or Associated or Western located in such flood hazard area unless and until there has been compliance with all other conditions of this Agreement which are precedent to such advances, and the Administrator has determined, that (i) the com-munity in which such area is located is then participating in the national flood insurance program, as required by the Flood Insurance Act and any Rules and (ii) PSO and Associated and Western have ob-tained flood insurance coverage with respect to such building and contents as may then be required pursuant to the Flood Insurance Act and any Rules.
20.12.8 All portions of Project buildings and facilities which are intended to be accessible to the public or in which it is intended that a physically handicapped person may be c= ployed shall be designed, constructed, or altered in accordance with the minimum standards in the "American Standard Specifications for making Buildings and Facilities Accessible to, and usable by the Physically Handicapped, Number A117.1-R1971," approved by the American Standards Association, Inc. (subsequently changed to American National Standards Institute, Inc.).
ARTICLE XXI Applicable Law 21.1 This Agreement is made under and shall be governed by the laws of the State of Oklahoma as if each act or omission occurred within said State. It is
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hereby agreed that venue for any legal or equitable proceeding pertaining to this Agreement or the Project lies in Iulsa, Caddo, or Rogers Counties, Oklahoma, and any action brought by an Owner or the Project Manager, or
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on their behalf, sill be instituted and tried only in courts within said Counties. Notwithstanding any other provision of this Agreement, this Article XXI shall not be binding upon the United States of America.
ARTICLE XXII Notices 22.1 Except as otherwise approved in writing by the Executive Co=mittee, any notice, demand, or request made to any Owner pursuant to any provision of this Agreement shall be made in writing and shall be deemed given upon delivery either in person, by prepaid telegram, or by postage paid certified mail, return receipt requested, addressed as follows:
If to Public Service Company of Oklahoma:
Mr. Martin E. Fate, Jr.
Executive Vice President Public Service Co=pany of Oklahoma P.O. Box 201 Tulsa, Oklahoma 74102 If to Associated Electric Cooperative, Inc.:
Mr. Gerald F. Diddle General Manager Associated Elcetric Cooperative, Inc.
P.O. Box 754 Springfield, Missouri 65801 If to Western Farmers Electric Cooperative:
Mr. Maynard Human General Manager Western Farcers Electric Cooperative P.O. Box 429 Anadarko, Oklahoma 73005 or to such other representative or at such other address as may from time to time by written notice by an Owner be given to the other Pmers.
ARTICLE XXIII
- Severability
._3. . .
23.1 In the event that any of the provisions of this As;reement, or the application of any such provision, shall be held invalid by any court or other authority having jurisdiction in the premises, the remainder of the Agreement, and the application of its provisions, shall not be affected thereby and all remain-ing provisions shall remain in full force and effect.
The above notwithstand-ing, the provisions of Sections 5.1 and 5.4, and Articles IV, VI, VII, and XVIII are the essence of and constitute inducing and inseparable parts of this entire Agreement, and this Agreement vauld not have been entered into by the Parties if Sections 5.1 and 5.4, and Articles IV, VI, VII,'and XVIII ha not been incorporated herein and considered by the Parties to be reasonable and valid.
23.2 In the event any provision of this Agreement is determined to be invalid under, or in conflict with, any applicable statute or any regulation or order of any regulatory agency having jurisdiction herein, the Owners shall attempt by mutual agreement to arrive at an amendment of this Agreement which eliminates such invalidity or conflict and restores the substance and original intent of this Agreement.
ARTICLE XXIV
_ Term 24.1 This Agreement shall become effective upon its approval by the f.dministrator of the Rural Electrification Administration. The notice of such approval shall be attached hereto as Exhibit 4 and made a part hereof. As of the date of such approval, this Agreement shall be in full force and effect and binding upon the Parties, and shall continue for an initial period ending the 31st day of December, 2018, or such earlier date as will conform with q "
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. the duration of the Station operating license issued by the Nuclear
~
Regulatory Commission, and thereafter from year to year with respect to the provisions pertaining to Decommissioning and final disposition of all vestiges of the Project; provided, that an amendment to this Agreement shall be executed to establish a new term certain, prior to application for an operating license renewal, license amendment to possession only, or license terminacion, or any other Decondssioning, facility dismantling, and removal activity.
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IN WITNESS WHEREOF, the undersigned have caused this Agreenent to be duly executed by their respective authorized officers and their respective corporate seals to be affixed hereto this N L// day of [#w ,,,,le, , 1978.
PUBLIC SERVICE COMPANY OF OKLAH02:A
't
,,,) By h s
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Title:
President and Chief Executive ATTEST: ; '( * -
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ll 1 J11 L Secretary /
ASSOCIATED ELECTRIC COOPERATIVE, INC.
By) e c k .-c' s'
Title:
President , ,
ATTEST:
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Secretary WE ~ " ERS ECTRI 00 PERATIVE h/, f W v
tie: President ATTEST:
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.-F. U -1 J Secretary 9
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. BLACK FOX SITE
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OVERHEAD LOADING FACTORS PSO payroll overheads, general administrative overhead, and engineering and
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supervision overhead costs applicable to the Project, but not directly charged, vill be allocated to the Project cost based on PSO direct labor charged. This exhibito referenced in Section 13.3, establishes the principles for overhead charges and develops the overhead loading factors to be used initially. These factors are based upon 1977 accounting records and were developed prior to the audit provided for in Section 13.3.
Staffea Cecetruetfea Construetten _stetsea 0>eestsea (.p e e s . s e-on-site eft-site other*
h Overheads applica%1e to Direct t.abert On-site off.sste _ct* eve 1 Fald Absence 2
12.001 32.001 32.CD1 32.001 12.C31 Fayre11 Tases. Insurance and benefite 22.281 22.281 12.Cn 3 22.281 22.281 22.281 22.241 Credit for On-3ste Inaurance Coverage (3.091) 4 Off-31 e Rent 0.091) - -
3 27.931 13.951 -
27.931 Employee safety Educatten Activstsee p.???)
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Direct Labor Fayre11 Overbaada 30.921 62.231 48.261 30.921 62.231 34.241 6 Ceneral Admiatetrative Overhead 34 36.941 36.141 36.941 36.941 36.941 tr.81**erina and supervistes Overhaad A A 36.941 1.5 29.071 = =
Oretatian Emaiseerlag & Supervieles Overknad - -
_s _9.361 Total OverhaaJa 47.061 99.171 314.271 67.861 99.171 30.es:
- "Other" designates PSO technicians and craf tsmen, such as relay and co::muni-
- cations technicians, substation and line crews, and generation central mainten- i ance personnel working at the Project, including their engineering and super-vision support, not regularly assigned to the Project.
- 1. PAID ABSENCE A paid absence overhead factor is applied to.all labor, regular and over-time.
'Ihe cost of paid absences is charged to Account 242.45, Paid Absence At-crual at the time such paid absences occur. The account is cleared by loading the total PSO labor charges for time worked. The loading factor
is determined from data for prior periods and is designed to maintain the balance of the account at or near zero.
The Paid Absence Overhead Factor, based on 1977, is 12.00%.
- 2. PAYROLL TAXES, INSURANCE AND BENEFITS - LOADING A Payroll Taxes, Insurance and Benefits overhead factor is applied to all labor, regular and overtime.
Direct charges to payroll associated expense accounts (Accounts 408.53, State Unemployment Insurance; 408.58, Federal Une=ployment Insurance; 40B.59, F.I.C.A.; 925.01, Injuries and Da= ages; 926.17. Ecployee Insur-ance, Relief and Assistance; 926.18, Pensions; 926.19. Thrift Plan) are accu =ulated and prorated to total labor charges by applying a loading rate determined by prior year data and estimated tax rates.
The Payroll Taxes Insurance and Benefits Loading Factor is 22.28%. The rate was determined as follows:
Total Payroll Paid: 1976* $28 988 585 Pension Cost (A/C 926.18) $1 594 275 5.50%
Insurance (A/C 296.17) 1 608 337 5.55 Thrif t Plan (A/C 926.19) 619 278 2.14 Payroll Liability (General Liability and Workmen's Compensation A/C 925.01)
Unemployment Insurance: 3.09 (est.)
State (A/C 408.53) 0.66 (est.)
Federal (A/C 408.58) 0.21 (est.)
F.1.C.A. (A/C 408.59) 5.13 (Est.)
Loading Rate 22.28%
- 1977 data not available until May, w_ n-_-- a -mus=uwxcmw'umn""*""
- 3. CREDIT FOR ON-SITE INSURANCE COVERACE PSD employees assigned to the Site vill be covered under the On-Site Con-prehensive General Liability and Workmen's Compensation coverage included in Construction and Operation costs.
A credit for the duplicate coverage vill be made.
- 4. REh7 A Rent Overhead Factor is applied to all off-site labor charges to properly allocate the cos: of providing office and office support facilities for P50 e=ployees. No rent is charged for P50 employees assigned to the Site.
One-half the nomal rate is applied to other Construction labor in, recognition that such charge is allocated to all such Itbor, which is esticated to be double the off-site labor.
The Rent Overhead Factor is 27.95%. The rate was computed as follows based on a study of 1977 estinated factors:
Basic Average Rent -
Raw space 0 58.00 per square foot Utilities, Furnishings, Interiors and Office Machines @ St. 00 per square foot
$12.00 per square foot Estima ted square f eet per employee 350 Average cost per employee S 4,200.00 =
Estima ted Average Of fice $27.95%
$15,025.00 Employee Salary TTT y mqr.c.1w mK-MrtVMF--
On occupancy of the new PSO Ceneral Office Building, contemplated in 1978,
. . . the ren.t overhead fa.ctor_ vill be recomputed using actual data where avail-able, as follows.
Depreciation and financing costs, including income tax, on PSO puned office buildings, if any Lease /or Rental Costs Taxes Insurance Utilities Depreciation and Financing Costs, including Income Tax, on PSO owned Interiors, Furnishings and Office Machines Building Maintenance, and Other Build-ing Operating Costs Estimate $12.00 per square foot
- 5. Credit for Employee Safety Educational Activities In recognition that only a small portion of PSO Employee Safety Educational Activities expense vill be for the Project's benefit, but is included in the General Administration Overhead P. ate, a credit of 90% of the balance of Account 925.02, Employee Safety Educational Activities, divided by total PSO labor, will be made. In 1977, this credit factor is 0.27%.
The rate was determined as follows:
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.-
- 1977 balance in Account 925.02 = $70,962.40 90% of balance ($70,962.40 x .90) = $63,866.16
, _90% of balance in Account 925.02 S 63,866.16 = 0.27%
$ 23 332 082 Total PSO labor less charges to Clearing, Other Accounts, and Administrative and General
- 6. CENERAL ADMINISTRATIVE LOADING FACTOR The General Administrative overhead charges include the portion of the pay and expenses of the general officers and administrative and general expenses applicable to the Project.
This factor. is the ratio of Administrative and General labor expenses (less labor), and payroll overheads to total PSO labor, less payroll charges to paid absence, supervision and engineering clearing work orders, and less Administrative and General labor.
The ratio of Administrative and General labor, expenses (less labor), and payroll overheads to total PSO labor, less payroll charges to paid absence, supervision and engineering clearing work orders, and less Administrative and General labor is 36.94%.
Total Administrative and General Labor,
' Expenses (less labor) and Payroll Overheads Total Labor, less payroll charges to = S523 8 618 852 = 36.94%
332 082 paid absence, supervision and engineer-ing clearing work orders, and less Administrative and General Labor
Administrative and General Related Overheads '
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.QQ 2" Ad=inistrative and General Labor
- -- -~----'^M -
$3,844,936
- Item 1 Paid Absence 0 12.00% 461,392 Subtotal $4,306,328 2 Payroll Taxes, Insurance and Benefits 0 22.2c% 959,450
. 4 Rent 0 27.95% 1,203,619 Total I. abor and Payroll Overheads $6,469,397 7 Employee Education, Information & Misc. Benefits $ 170,406 8 Travel and Misc. Expenses 357,879 9 Office Supplies and Expenses 913,228 .
10 Outside Services E= ployed 385,411 11 Employee Safety Educational Activities 10,633 12 Co=puter Services 210,536 13 Misc. General Expense- _ 101,062 Total Ad.ministrative and General 1. abor, Expenses (less labor), and Payroll Overheads $8,618,852
- 7. IMPLOYEE EDUCATION, IhTOFF.ATION AND MISCELLANEOUS BENEFITS This amount is the sum of the balances in Accounts 926.02 through 926.16, less labor.
B. TRAVEL AND MISCELLANEOUS D' PENSE This amount is the entire balance in Account 921.01, Travel and Miscellaneous Expenses.
- 9. OFFICE SUPPLIES AND EXPENSES This a=ount is the entire balance in Account 921.02, Office Supplies and Expenses.
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Page 7 of 11
- 20. _0UTSIDE SERVICES D{ PLOYED
- r. . .
The expenditure used in this factor is the total amount charged to PSO by Central and South West Corp. for " services rendered at cost in accordance with Service Agreement dated April 1, 1969" (or its successor agreement) as recorded in Account 923, outside Services Employed.
- 11. IMPLOYEE SAFETY II)UCATIONAL ACTIVITIES This amount includes the cost of safety, accident prevention and similar educational activites, including the expenses, except labor, of personnel regularly engaged in safety and accident prevention activities, charged to Account 925.02, Employee Safety Educational Activities.
- 22. COMPUTER SERVICES This factor incudes PSO expenditure for computer lease and rental (including peripheral equipment and other related expense) related to the Administrative and General factor.
It is enticipated that the PSO computer operation will be centralized within Central and South West's computer operations. At such time, that portion of the billing from Central and South West to Public Service Company for computer services applicable to Administrative and General will be included in the above factor.
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- 13. _ MISCELLANEOUS CENEPJd. EXPENSE The only expenditures included in this factor are security services for the general offices, directors' fees and temporary labor expenses recorded in Account 930.20, Miscellaneous General Expense. This factor is the total of those items.
- 14. D;GINEERING AND SUPERVISION OVEPJiEAD FACTOR PSO accu =ulates charges for Engineering and Supervision activites which cannot be specifically charged to a construction project, in Clearing Work Order 198-0000 (transmission, distribution and general) or 198-0001 (production). These clearing work orders (including labor loaded with overheads for Paid Absence, Payroll Taxes Insurance and Benefits, and Rent are cleared by loading the appropriate Construction Work in Progress Labor, Retire =ent Work in Progress Labor and Reimbursable Job Order Labor.
The 198-0000 factor vill apply to Substation Construction at the Project.
NOTE:
As long as EFS is the only PSO nuclear generating station, all engineering and supervision charges vill be direct to BFS, and therefore, no allocation vill be cade from 198-0001.
The 198-0000 Engineering and Supervision Overhead Loading facter is 29.07%.
The rate was ce=puted as follows:
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JEngineering and Supervision Related Overheads:
9 EngineerirE and Supervision Labor Charged to Clearing Work order 198-0000 $ 880,684 Item 1 Paid Absence 0 12.00% $ 105.682 Subtotal $ 986,366 2 Payroll Taxes, Insurance and Hisc. Benefits 0 22.28% 219,762 4 Rent 0 27.95% 275,689 Total Labor and Payroll Overheads $1,481,817 Other Expenses Charged to Work Order 198-0000 $ 35,653 Total Engineering and Supervision Labor, Expenses and Payroll Overhead Charged to Work Order 198-0000 $1,517,470 Engineering and Supervision Labor, Expenses, and Payroll Overheads charged to Engineering and Supervision Clearing Work Order 198-000Q = $1 517 470 = 29.07% -
Labor charged to Transmission, Distribution and $5 520 888 General Construction Work in Progress
- 15. OPERATIONS SUPERVISION AND ENGINEERING OVERHF.AD FACTOR - SUBSTATION General Office charges for Supervisory and Engineering activities related to transmission substation operation and caintenance which cannot be directly charged to a specific substation are charged to Accounts 560 and 568. .
The Operation's Supervision and Engineering Overhead factor applied to Substation operation and maintenance labor is 9.36%. The rate was deter-mined as follows:
.. ? -- l :-- : - ' .
. _ - __ ^---c ~--
Operations Supervision and Engineering Related Overheads -
Engineering and Supervision Labor charged to
, Substation Operation and Haintenance Accounts 560 and 566 $20,842 Item 1 Paid Absence 0 12.00% 2,501 Subtotal $23,343 2 Payroll Taxes, insurance, & Hisc. Benefits 0 22.28% 5,201 3 Rent G 27.95% _
6,524 Total Engineering and Supervision Labor charged to Substation Operation and Haintenance Accounts
- 560 and 566 $35,060 Other Expenses Charged to Accounts $60 and 566 $ 3,397 Total Engineering and Supervision Labor, Payroll Overheads, and Other Expenses charged to Substation Operation and Maintenance Accounts 560 and 566 _$38,465 Total Supervision and Engineering Salaries, Labor Expenses, and Payroll Overheads Charges to Accounts 560 and 568 = $ 38,465 = 9.36%
Total Labor Charged Accounts $62 and 570 S410,822 .
EDTE: Operations Supervision ar.d Engineering Expense, incurred by General Office employees charging to Accounts 517.00, 519.00 through 525.00 and 528.00 through 532.00 are allocated to all nuclear generating stations. As long as BFS is the only PSO nuclear generating station, all such charges will be direct to BFS, and therefore, no allocation vill be made. .
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ACCOUNTING RECORDS USED FOR OVERHEAD COST ALh.0 CATION PRIOR TO THE 1977 AUDIT PROVIDED FOR IN SECTION 13.3 Total PSO Labor:
Production Operations and Haintenance 4 038 611.72 Trans=ission Operations and Maintenance 1 059 280.43 Distribution Operations and Haintenance 5 191 305.53 Customer Accounting Operations 2 888 478.11 Customer Service.Information Operations 283 954.38 Sales Operations 344 715.50 Administrative and General Opet 3 tion and Haintenance 3 844 936.45 Total Operations and Maintenance Labor $17 651 282.12 Labor charged to Expense Work Orders $1 355 569.38 Labor charged to Investment Work Orders 6 697 920.51 Labor charged to Retirement Work Orders 500 671.66 Labor charged to Reimbursable Job Orders 250 847.74 Labor charged to Paid Absence 2 877 846.26 Labor charged to Other Accounts 1 694 519.51 Total Labor charged to Work Orders, Paid Absence, and Other Accounts $13 377 375.06 Total PSO Labor $31 028 657.18 ,
Total PSO Labor Less Labor Chrrged to Clearing, Other Accounts and Ad=inistrative and Genera):
Total PSO Labor $31 028 657.18 Labor charged to Au=inistrative and General $3 844 936.45 Labor charged to Engineering and Supervision Clearing Work Orders 973 796.86 Labor charged to Paid Absence $2 877 846.26 $ 7,696,575.57 Total PSO Labor Less Charges to Clearing, Other Accounts, and Ad=inistrative and General $23 332 081.61 Transmission, Distribution and General CWIP Labor:
Labor charged to Investment Work Orders $6 697 920.51 Labor charged to Retirement Work Orders 500 671.66 Labor charged to Reimbursable Job Orders 250 847.74 Total CWIP Labor $ 7 449 439.91 Less: Labor charged to Clearing Work Order 198-0000 $ 880 688.94 Labor charged to Production CWIP 1 047 867.75 $ 1 928 551.69 Transmission, Distribution and General CWIP Labor S 5 520 888.22 9
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. i ACCOUNTING RECORDS USED POR OVERHEAD COST ALLOCATION PRIOR TO THE 1977 AUDIT PROVIDED FOR IN SECTION 13.3
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- Total PSO Labor:
Production Operations and Maintenance 4 038 611.72 Transmission Operations and Haintenance 1 059 280.43 Distribution Operations and Maintenance 5 191 305.53 Customer Accounting Operations 2 888 478.11 Customer Service.Information Operations 283 954.38 Sales Operations 344 715.50 Administrative and General Operation and Maintenance 3 844 936.45 Total Operations and Haintenance Labor $17 651 282.12 Labor charged to Expense Work Orders $1 355 569.38 Labor charged to Investment Work Orders 6 697 920.51 Labor charged to Retirement Work Orders 500 671.66 Labor charged to Reimbursable Job Orders 250 847.74 Labor charged to Paid Absence 2 877 846.26 Labor charged to Other Accounts 1 694 519.51 Total Labor charged to Work Orders, Paid Absence, and Other Accounts $13 377 375.06 Total PSD Labor $31 028 657.18 ,
Total PSO Labor Less Labor Charged to Clearing, Other Accounts and Administrative and General:
Total PSO Labor $31 028 657.18 Labor charged to Administrative and General $3 844 936.45 Labor charged to Engineering and Supervision Clearing Work Orders 973 796.86 Labor charged to Paid Absence $2 877 846.26 $ 7,696,575.57 Total PSO Labor Less Charges to Clearing, Other Accounts, and Ad=inistrative and General
$23 332 081.61 Transmission, Distribution and General CWIP Labor:
Labor charged to Investment Work Orders $6 697 920.51 Labor charged to Retirement Work Orders 500 671.66 Labor charged to Reimbursable Job orders 250 847.74 Total CWIP Labor $ 7 449 439.91 Less: Labor charged to Clearing Work Order 198-0000 $ 880 688.94 Labor charged to Production CWIP 1 047 867.75 $ 1 928 551.69 Transmission, Distribution and General CWIP Labor S 5 520 888.22 O