ML19339A608

Forwards Power Sys Coordination & Integration Agreement Between Sc Public Svc Authority & Central Electric Power Cooperative,Inc.Doj Criteria Re Determination of Significant Change Addressed

ML19339A608
Person / Time
Site:	Summer
Issue date:	10/28/1980
From:	Morrison H CAHILL, GORDON & REINDEL
To:	Chilk S NRC OFFICE OF THE SECRETARY (SECY)
References
ISSUANCES-A, NUDOCS 8011040407
Download: ML19339A608 (135)

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? O o o .. .A R I . ,RANCE WOJT2R". DIRECT DIAL NUMBER In the Matter of South Carolina Electric & Gas Company, et al.

(Virgil C. Summer Nuclear Station)

Docket No. 50-395A

Dear Mr. Chilk:

This letter is intended to provide an update to the Commission on the status of negotiations between the South Carolina Public Service Authority and Central Electric Power Cooperative, Inc. regarding the tentative agreement to share ownership and planning dn generating and transmission facilities. In addition, the South Carolina Public Service Authority has reviewed the comments of the Department of Justice filed in this proceeding on October 10, 1980 and respectfully requests permission to file the comments contained in this letter.

Before updating the progress of the negotiations, the Department of Justice's criteria for the determination of "significant change" as set forth in its filing of October 10 will be addressed. First, however, it might be helpful to chronicle in outline form the events leading up to the Department's filing:

1. In 1969 South Carolina enacted legislation allocat-ing service areas among the investor-owned and cooperative electric utilities. The South Carolina Public Service Authority (" Santee Cooper"), an agency of the State of South Carolina, was not affected by this legislation, and while it was free to compete throughout the state, Santee Cooper also ,

l faced competition throughout its then-existing service area.

Santee Cooper, anlike other electric utilities, had no exclusive service area.

2. On June 30, 1971 South Carolina Electric & Gas

("SCE&G") filed an application for a construction permit for the Summer Nuclear Unit. i i

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, CAMILL Gomoow & Raswnst ,

- filed, and on December 3, 1974 the Commission added Santee Cooper'as co-licensee. At that time the Department of Justice advised the Commission staff that a further antitrust review was not required because of the-sale of a part inter-est-in Summer to Santee Cooper.-- which was made possible by j the 1973 legislation permitting the acquisition.

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9. On December 10, 1976, an application for an operating license was filed with the Commission and pub-lished in the Federal' Register.

10. On December 6, 1978, more than five years after.

. Santee Cooper agreed to acquire an interest in Summer, four l years after Santee Cooper was added as a co-licensee, two years after the filing of the application for an operating

, license, and more than seven years after the legislature granted. Santee Cooper an exclusive service area, Central filed a petition for a finding of "significant change."

11. On March 19, 1979, the Commission staff, after a l review of the briefs of the parties and the completion of a

! lengthy investigation that commenced in 1977, concluded that Central's petition for a finding of significant change should be dismissed; the staff concluded that whatever changes may have occurred in South Carolina during the prior.

five-year period were neither "significant" nor unanticipated at the time of the 1972 antitrust review. The Commission staff memorandum and supporting documents was served upon the Department of Justice on March 19, 1979. The Department of Justice remained silent.

12. Prior to June 30, 1980, the Commission delegated 4

to the NRC staff the responsibility for making "significant i change" determinations.

, 13. On June 30, 1980, fifteen months after receipt of

, the NRC staff's conclusion that Central's petition should be denied because there had been no significant changes, and 4 only about nine months before tha Summer Unit could be ready

to load fuel, the Commission announced that it, rather than i

the staff, would make the significant change determination i

in this case, and invited the parties and the Department of 4 Justice to comment on the Commission's criteria for making the significant change determination.

(a) The Commission posed three criteria for deter-mining significant change, and with respect to the third, viz, that the changes must have antitrust implications that would likely warrant a Commission remcdy, requested that the Department of Justice l provide its views as to whether an antitrust hearing would be required in this case. The t Commission, after receipt of the views of the

! parties and the Department of Justice, would thereafter decide the "significant change" issue.

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CAurLL Gonoow & RzzwozL

14. On July 8, 1980, the NRC staff requested the licensees to update the status of their respective negotia-tions with Central. In response, Santee Cooper provided copies of tentative agreements between Santee Cooper and Central, approved by the Board of Directors of both, and previously submitted to the REA for approval, which provide for joint ownership in generation facilities, including ownership by Central of a portion of Santee Cooper's inter-est in the Summer Unit.

15. On October 10, 1980, Justice filed a " response" to the Commission's Memorandum of June 30, 1980. In doing so, however, Justice declined to respond to the Commission's inquiry as to whether an antitrust hearing might be required and declined to respond to the Commission's inquiry as to whether any remedy might be feasible; Justice did, however, advise the Commission that it should apply different criteria for the "significant change" determination than the Commission had previously proposed. This October 10, 1980, comment by Justice was filed nearly four years after the application for an operating license (and nearly four years after Justice had first advised the Commission staff that the addition of Santee Cooper as a co-licensee would not require an antitrust review) , more than one year after receipt of the Commission's staff conclusion (based on criteria similar to those set forth in the Commission's Memorandum of June 30, 1980), that there had been no significant change since March 1972.

In its October 10, 1980 submission, Justice urges that a finding of significant change -- and the corresponding requirement of what almost inevitably will be a six-month antitrust review -- is compelled whenever there has been a change in the " competitive environment", apparently whether or not the change is "significant," whether or not the change has negative antitrust implications and whether or not the change was entirely foreseeable or indeed even anticipated, at the time of the construction permit anti-trust review. Thus, despite the fact that Santee Cooper's ownership interest was anticipated by the Attorney General's advice letter in 1972 and despite the recognition on the part of the Attorney General in 1972 of the State policy with respect to exclusive service areas, and despite the 1976 statement by the Department that a further antitrust review need not be conducted as a result of the acquisition by Santee Cooper of an interest in the Summer Unit, the Department now belatedly asserts that.these events, which occurred seven years ago and which have been known to the Department throughout this period, now warrant a finding of "significant change" -- and a second ant!. trust review. The i

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caniu. conoon & azawozi. j Department makes this assertion despite its failure to explain how the licensees' lobbying efforts on behalf of the )

1973 legislation might be characterized as " inconsistent I with the antitrust laws," as the Act requires in order to l invoke a license remedy, or even how the " changes" created  !

by such legislation may be deemed "significant."  !

l This proceeding is well on the road to making a J mockery of the regulatory process generally, the Atomic Energy Act and its antitrust review precedent and substan- l tive antitrust law specifically. The sweeping criteria for I determining significant change now advanced by the Department of Justice is not only inconsistent with the Act and its legislative history, but is unworkable and just plain silly.

It insures precisely that which the "significant change" determination was intended to avoid, viz, that licensees not

. be compelled unnecessarily to run the antitrust review gauntlet at both the construction permit and operating license stages. Changes in the " competitive environment" are inevitable; the loss of a large-load customer, for example, during an eight-year interim betwee;. construction and operating license gives rise to a change in the "com-petitive environment" and would, under the Department's criteria, trigger an antitrust review in the total absence of any suggestion that conduct " inconsistent with the anti-trust laws" might have occurred, that a hearing might be required, that a nexus may exist between the conduct and the granting of an operating license, or even that the Commission might be able to fashion a remedy.

The antitrust review provisions of the Atomic Energy Act were not intended to provide leverage for cus-tomers to obtain more favorable contracts from suppliers, to overturn entirely legitimate state action, or to restructure bulk power markets to conform to some idealistic, textbook ,

model of competition; instead, these provisions were intended l to provide the Commission with the authority to remedy j anticompetitive conduct that might arise as a result of the grant of a license to operate a nuclear power plant.  !

l The Joint Committee on Atomic Energy explained as follows the nature of the antitrust review procedure con-templated by the Act:

"Of course, the committee is intensely aware that around the subject of prelicensing review and the provisions of subsection 105c., hover opinions and emotions ranging from one extreme to the other pole. At one extremity is the view that no pre- l I

licensing antitrust review is either necessary or advisable and that the first two subsections of l section 105 concerned with violation of the anti-

CAnttt Gonnow & Rztwort trust laws and the information which the Commis-sion is obliged to report to the Attorney General are wholly adequate to deal with antitrust con-siderations ....At the opposite pole is the view that the licensing process should be used not only to nip in the bud any incipient antitrust situation but also to further such competitive postures, outside of the ambit of the provisions and estab-lished policies of the antitrust laws, as the Commission might consider beneficial to the free -

enterprise system. The Joint Committee does not favor, and the bill does not satisfy, either extreme view." H.R. Rep. 91-1470, 91st Cong., 2d Sess. 29 (1970).

This proceeding is now nearly three years old.

The Summer Unit will be ready to load fuel in the period be-tween April 1981 and the end of that year; the cost to the licensees if there is any delay in start-up will be in excess of $6 million a month. Moreover, Santee Cooper pre-sently anticipates a serious shortage in generating capacity without sufficient alternative sources of supply being available as early as the Summer of 1982 if approval of the operating license is delayed significantly. The "signifi-cant changes" occurred more than seven years ago and were fully anticipated at the time of the construction stage antitrust review in 1972. Santee Cooper has offered Central joint ownership and planning in generation and transmission facilities, respectively, the current status of which is described below. The Commission staff has investigated these issues over a period of several years and has con-cluded that further proceedings are not warranted. The Department of Justice has refused to characterize the events of the past seven years as anything more than a change in the " competitive environment" and has declined to respond to the Commission's inquiry either as to the likeli-hood that an antitrust hearing is appropriate or the avail-ability of an adequate remedy. Instead, it seemingly urges a delay of at least six months while a second antitrust review covers ground known to the Department since March 1972.

Turning to the status of negotiations between Santee Cooper and Central on joint ownership of generation and transmission facilities, REA has advised that the tenta-tive, agreement approved by the Board of Directors of each and submitted to REA should be modified in certain respects.

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1 CENTRAL ELECTRIC POWER COOPERATIVE, INC.

AND SOUTH CAROLINA PUBLIC SERVICE AUTHORITY POWER SYSTEM COORDINATION AGREEMENT WITH APPENDICES, AGREEMENTS, AND F POWER CONTRACT AMENDMENTS I'

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r-POWER SYSTEM COORDINATION AND INTEGRATION AGREEMENT BETWEEN SOUTH CAROLINA PUBLIC SERVICE FITHORITY AND CENTRAL ELECTRIC POWER COOPERATIVE. INC.

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POWER SYSTEM COORDINATION AND INTEGRATION AGREEMENT TABLE OF CONTENTS PAGE REFERENCE ARTICLE. SECTIONS. OR APPENDIX TITLES NUMBER RECITAL

................................I DEFINITIONS

............................. 4 Article I - . . . . . . Existing-Agreement ............. 6 i

Article II

. . . . . . Joint Committees .............. 7 Article III . . . . . . Ownership of Cross & Summer Generating  ;

Article IV Station Resources . . . . . . . . . . . . . . 11

. . . . . . Future Generating Resources . . . . . . . . . 12 1 Article V . . . . . . Power and Energy Rates and Requirements . . . 16 i Article VI . . . . . . Transmission Services and Deliveries . . . . 18 Article VII . . . . . . Transmission System Coordination . . . . . . 19 Art i cl e VI I I . . . . . . Del i ve ry Po i nt s . . . . . . . . . . . . . . . 22 Article IX . . . . . . Electrical Characteristics . . . . . . . . . 23 Article X . . . . . .' Dispatching & Operation of Capacity Resources

& Transmission System . . . . . . . . . . . . 24 Article XI . . . . . . Metering . . . . . . . . . . . . . . . . . . 27 Article XII . . . . . . B il l i ng & Payment . . . . . . . . . . . .

Article Article XIVXIII . . . . . . Arbitration . . . . . . . . . . . . . . . . .. 28 29

. . . . . . Mi sc el l an eou s . . . . . . . . . . . . . . . 33 Effective Date & Term ..........33 Central's Members ............33 Interruptions to Service . . . . . . . . . 33 Force Majeure . . . . . . . . . . . . . . 34 Successors and Assigns . . . . . . . . . . 34 Selling or Leasing of Authority System . . 34 Selling or Leasing of Either Parties' System . . . . . . . . . . . . . . . . 35 Rights of Way ..............35 Entry of Premises ............35' Ownership of Facilities & Right of Removal .35 Indemnification . . . . . . . . . . . . . 36 Interpretation and Captions . . . . . . . 36 Audit . . . . . . . . . . . . . . . . . . 36 Counter Parts . . . . . . . . . . . . . . 36 Sev e rab i l i ty . . . . . . . . . . . . . . . 3 7 Governing Law ..............36 Notices . . . . . . . . . . . . . . . . . 37 Signatures and Seals . . . . . . . . . . . 38 APPENDIX A . . . . . . Provisions Relating To Resource Integration and Supplemental Power Sales . . . . . . . . 39 Exhibit I Cost of Service Methodology .......53 Exhibit II Schedules A & B .............57 Schedules C ...............58 Exhibit III Production Energy Charges . . . . . . . . 59 Exhibit IV Resource List & Energy Accounting Application . . . . . . . . . . . . . . . 60 APPENDIX B ... . . . . Provisions Relating To Transmission Service . . . . . . . . . . . 62 APPENDIX C . . . . . . Provisions Relating To Transmission Operations and Maintenance . 66

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9 POWER SYSTEM COORDINATION AGREEMENT l

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after day of referred to as the " Coordination Agreement") entered into

,198 . by and between the South Carolina Public Service Authority (hereinafter referred to as the " Authority"), an Agency of the State of South Carolina, and Central Electric Power Cooperative, Inc., (hereinafter referred to as " Central"), a cooperative corporation organized and existing under the laws of the State of South Carolina, witnesseth that,

.I RECITALS Whereas. Authority owns and operates an electric power system consis-ting of electric generating, transmission, and distribution facilities; 4

Whereas, Central is a generation and transmission cooperative which through wholesale purchases from Authority, furnishes electric power and energy at wholesale contracts; to its Member distribution cooperatives under all requirements

-Whereas Central through loans from the United States of America (hereinafter called the " Government") acting through the " Administrator of REA" has constructed certain electric generating and transmission facilities and through certain' lease and power contracts leased these facilities to Authority; detail: Whereas, these certain lease and power contracts are by name and

1. Contract Obligation: Commonly known as the A-B Agreement; effec-tive date, January 1,1950; tennination date, January 1,1985; date of last payment, January 10, 1985.

2.

C Lease: Effective date, October 22, 1952; tennination date, October 22, 1982; date of last payment, November,1995.

3.

, C Power date Contract:

October Effective date, October 22, 1952; termination 22, 1987.

4.

D Lease: Effective date, April 25, 1963; tennination date, originally July 1,1996, and extended to June 7, 2007, by tenns of the L Amendment of the D, E, F, G, H and K Leases; date of last payment, November, 2003.

5.

D Power Contract: Effective date, April 25, 1963.

6.

E tease (Amendment to the D Lease): Effective date, October 23,

1968; tennination date originally June 1, 2000, but extended to June 7, 2007, by tenns of the L Amendment to the 0, E, F, G, H, and K Leases; date of last payment, November, 2305.

7.

F Power Contract: Effective date, April 29, 1971; termination date, June 15, 2005.

i 8.

! F Lease (Amendment to the D and E Lease): Effective date, April

, 29, 1971; tennination date, originally June 15, 2001, but extend-ed to June 7, 2007, by tenns of the L Amendment to the 0, E, F, G, H, and K Leases; date of last payment, November, 2008.

9. G Lease (Amentient to the 0, E, anc ' Leases;: Effective date.

October 10, 1973; teminatic.n date originally March 13, 2003, but extenden te June 7, 2007, by terms M the L Ame idment to the D, E, F, G, H, and K t eases; date of last payment February, 2010.

10. H Lease Amendment to the D, E, F, and G uecses): Effective date December 3,1975; temination date, originally Decemter 3, 2005, but extended to June 7, 2007, by tems of the L Amendment to the D, E, F, G, H, and K Leases; date of last payment November, 2011.

11. r Lease (Amendment to the D, E, F. G, and H Leases); Effective date, October 18, 1976; ter-"inat on date, originally October 18, 2006 but extended to June ', 2U ' by tems of the L Amendment to the D, E, F, G, H, and K tesses; tote of last payment, Februa ry, 2014.

12. I Lease ( Amendment to the D, f F , G, H and k Leasesh Effec-tive date, June 7,1977, tennination dat.1 June 7, 2007, date of last payment, February 2015.

Whereas, the aforementioned Contract Obligation contairi provisions whereby Central is obligated to purchase, and Autho ity obligated to provide and sell, all of Central's electrical power and energy requirments during the term of such Obli provisions")gation, may De which such by amended provisions (collectively, mutual agreement '111-requ of Authority and i rement Central,s but only with the consent of the Administrator of REA and of the holders of at least seventy-five (75%) percent (principal amount) of Authority's Priority Obliga-tions; and Whereas, the aforementioned C Lease contains provisions whereby Cen-tral is obligated to purchase, and Authority is obligated to provide and sell, all of the electrical power and energy requirements of~ Central's then current members, which such provisions (collectively "all requirements provisions") may be amended by mutual agreement of Central and the Authority with the consent of the Administrator of RFA; end Whereas, the aforementioned Contract Obligation, the C Lease, the D Lease, the E Lease, the F Lease, the G Lease, the H Lease, the K Lease, and the L Lease each have an option clause whereby Authority has the option to purchase the facilities covered by the aforenamed Obligation and Leases at any time during the terms of said Obligation and Leases; and Whereas, Authority will exercise its optiori to purchase the facili-ties covered by the A-B, C, D, E, F, G H, K, and L Leases, and Authority and Central will eliminate and make void the "all requirements" provisions of the C Lease; and Whereas, Authority has awarded contracts for the construction of two coal-fired electric = generating units at a generating facility known as the Cross Generating 3tation (hereinaf ter referred to as the " Cross Station") located near the community of Cross, South Carolina; and Whereas, Authority currently plans the Cross Station to ultimately house four coal-fired generating units, each unit to have a nominal net genera-ting output capacity of 450 megawatts with the first unit (Unit Number Two) having a projected Commercial Operating Date of November 1,1983, and the second i

unit 1985.

(Unit Number One) having a projected Commercial Operating Date of May 1, Units three and four are to be constructed as required to supply the load requirements of the combined Authority-Central System; Whereas, Central desires an option whereby Central may acquire an undivided ownership interest in each unit to be constructed at the Cross Genera-ting Station; and .

Whereas, Authority, as tenant in common with the South Carolina Electric and Gas Company, owns an undivided ownership interest in the Virgil C.

Sunner Nuclear Generating Station currently being constructed by Authority and the South Carolina Electric and Gas Company; and Whereas, Central desires an option whereby Central may acquire an undivided ownership interest in the Virgil C. Sunner Nuclear Generating Station with such option to have a stated tennination date; and Whereas, Central desires an option whereby Central may. acquire an undivided ownership interest in each future generating unit constructed by Authority, or by Authority and any other Party or Parties; and l

Whereas, Authority desires an option whereby Authority may acquire an undivided ownership in each and every future generating unit constructed by i

Central, or by Central and any other Party or Parties; and dereas, Central desires to purchase and receive from Authority all of the electricel power and energy requirements of Central's Members not supplied from Central Capacity Resources; and Whereas, Central desires Authority to transmit and deliver electric power from Central Capacity Resources and from Authority's Capacity Resources across Authority's transinission system to Central-owned transmission facilities and Delivery Points of Central's Members; and Whereas, Central desires to ultimately own all of the generating resources and necessary to meet Central's total power requirements on a firm basis; i

Wheraas, Central and Authority desire, for their mutual benefit and that of their ultimate customers, to jointly plan all future generation and transmission facilities; and '

Whereas, after January 1,1985, Central and Authority mutually desire -

l to tenninate and make void each and every provf sion of the A-B Power Contract and supersede each and cvery provision of such Contract with this Agreement; and i Whereas, Central and Authority mutually desire to tenninate and make voic each and every provision of the C, D, and F Power Contracts and supersede each and every provision of such Contracts with this Agreement; Now, therefore, in consideration of the foregoing and the mutual covenants as follows:and agreements herein centained, the Parties hereto contract and agree 1

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fluring the cont ract Yea , as of the combined ;.ys r of 3:sthn: it/ d 1d . eat a t

@t ine ! 'n Arr' idi r A neret)

B. Ba l': ow-r 1 e a ca.1a :, s '. A '

' vurheM; an.1 undergrc.ind transmitticq iines wnich serva a syt tem-wi1e bulk l oca-ca rr'/i ni: nr reit oi . i ty func' ton, including (il li.9es or itne sec.s.ents tich at either end ce connected .n r pac ity Resot:rces, oc (. lines n. line seg.:eni.s W rt c eithei en.: . a _

t r.i.erunne t siith other utility systen, or (3) lines nr line seqment s wh rn i a* tnth ence' a te

onnected

.f voltage istoinw linet described in (11 or s'2i abo e whether vi s.ot t rantfo-ma on ived.

Buh Power Transmission i acilit tes shall include a:i stations segments. from which emanate one or more Bulk Pnwar transat ss?on fines o C. Capacity Resource:

An electric generating unit, an owr.ershi, share in an electric generating unit, or the availability of electric capacity purchased from an electric generating unit or source available to provide the electric power and energy requirements of Authority and/or Central.

D.

Co-generation: The process wherery a waste or by-product. of a generating station is used by a separate entity, an industrial plant for en ample, or, in operation a waste or by-product of the industrial plants prcduction processes, and in turn, station in the generation nrocess.of the industrial plant is used by the generating E. Contract Year:

ending at 12:00 midnignt the following June 30.The period beginning at 12:01 a. A Ju F. Delivery Point:

Any point at which the conductors owned by Authority or Central connect with the conductors owned by the other Party for the sole purpose of delivering electrical power and energy in the case of Cen-tral to a Central customer or Member-Cooperative and in the case of Authority to an Authority Facility or to an Authority Customer.

G. Dispatching:

involving operations such as, but not limited to:The operating control of an integrated

1.

The assignment of load to specific generating stations and other sources of power supply to effect the most reliable and economical power supply as the total of the significant and combined area electrical loads rise and fall.

2.

The control of operations ansi naintenance of generating f

units, transmission lines, substations, and equipment, including edministration of environmental, operating, regu-latory, reliability, and safety procedures.

3.

Tne operation of transmission lines, switches, and related fac!lities.

4. The negotiating and scheduling of power and energy transac-tions with interconnected electric utilities.

H.

Eligible Capacity Resource: A Capacity Resource of either Party which has met the notice provisions and other-conditions of this Agreement.

I.

Generating Station: A station at which are located prime movers, electric generators, and auxiliary equipment for converting mechanical, falling water, chemical, solar or nuclear energy into electric energy.

J. Good Utility Practice: Good Utility Practice at a particular time means any of the practices, methods and acts, which, in the exercise of reasonable judgment in the light of the facts (including but not limited to the then current practices, methods and acts engaged in or approved by a signifi-cant portion of the electric utility industry known at the time the decision was made, would have been expected to accomplish the desired result at a reasonable cost co4sistent with reliability and safety. Good Utility Practice is not intended to be limited to the optimum practice, method or act, to the exclusion of all others, but rather to be a number of possible practices, methods or acts.

K. Reserve Generating Capacity: Generating capacity available to meet unanticipated demands for power or to generate power in the event of loss of generation resulting from scheduled or unscheduled outages of regularly used generating capacity.

L. Combined Authority-Central System, Integrated Authority-Central System: The tenns combined Authority-Central System and Integrated Authority-Central System shall, interchangably, mean the contiguous generation and trans-mission system owned and operated by the Parties as of January 1,1980, together with all transmission facilities and Eligible Capacity Resources available to the Parties which are from time to time connected to and contiguous with the existing system.

M.

Territorial Reserve Margin: During either the current Jinter or Summer Contract Period, the amount, if any, by which the aggregate sum of the Net Dependable Capabilities of the Capacity Resources of Authority (less firm purchases by the Authority) and the Eligible Capacity Resources of Central (less firm purchases by Central) exceed the Territorial Peak Demand (less firm pur-chases of Authority and Central) for such Contract Period. The Territorial Reserve Margin may be expressed as a percent of the Territorial Peak Demand with the Dependable Capabilities of the finn purchases of Authority and the firm purchases of Central removed from Capabilities and Demand.

Article I. EXIST!NG AGPEEMENTS '

Authority and Central acknowledge and confirm tiie cxistence of the A-B through L Leases mentioned in the Recitals portion of this Agreement.

Authority continues its sole responsibility and authority to possess, control, operate and maintain all property, interests in property and all faci- ,

lities included in the A-B through L Leases, including the right to repair, replace, remove from service and the right to upgrade, modify or add to such facilities in accordance with such Leases.

Authority hereby gives, and Central hereby accepts, notice of Authori-ty's intent to exercise Authority's options pursuant to the A-B, C, D, E, F, G, H, X, and L Leases to purchase the facilities covered by such leases, each such purchase to become effective no later than the latest date stipulated in each such lease or amendment; provided, that the provisions of each such lease or amendment shall remain in effect until each such purchase shall have become effective. .

By mutual agreement, Authority and Central hereby terminate, vacate, and make null and void the C, D, and F Power Contracts and all amendments there-to and supersede such contracts, as amended, with thi,s Agreement.

By mutual agreement, effective Jae;ary 1,1985, Authority and Central hereby terminate, vacate, and make null and veid the A-B Agreement and all amendments thereto and supersede such Agreement with this Agreement.

All other existing agreements between Authority and Central, or por-tions thereof, shall continue in full force and effect unless and to the extent modified herein.

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Article II. JOINT COMMITTEE 5 A. EXECUTIVE COMMITTEE There shall be established an " Executive Committ ee" which shall be constituted by and act on behalf of the Parties on the matters and in the me .r.a hereinafter set forth.

The membership of the Executive Committee shall consist of one me -

of the Board of Directors of Authority and one member of Central's Board of Trustees, Cent ral . and the Chief Executive Officer of Authority and General Manager o r The appointment of each board member for each Party shall be con't in writing to the other Party. Each such appointment shall be for an indet-n'te.

term and may be terminated at any time upon written notice from the appoint',;

Party to the other Party, which notice shall also name the successor to the member whose term is terminated.

The Executive Committee shall meet not less of ten than semi-ann.e ,

secreta ry. and place designated by the Party having appointed the then cur ;n at the time On written request of any member, the Executive Committee shall convene a called meeting at the time and place designated by the Party havi y appointed the then current secretary, provided, however, that such called peet ing shall be not more than thirty (30) working days after such request unless the member requesting the meeting agrees to a later date.

There shall be appointed a secretary of the Executive Committee wh; shall not be a member of such Committee and whose appointment shall rotate am:qg the Parties, with the first secretary appointed by the Chief Executive Office of Authority tral. and the second secretary appointed by the General Manager of Ce.

Each secretar of the change year, y shall serve for a term of two years commencing on July i 1982. except that the first secretary shall serve through Junc 30, The Party appointing each such secretary ney terminate the term of such secretary and replace such secretary durino the term thereof with another secre-tary with written notice to the other Party. The secretary shall be responsible for preparing and distributing minutes of the meetings of the Executive Comnit-tee and tive such other duties and responsibilities as may be agreed to by the Execo-Committee.

The Executive Committee shall be responsible for (i) the implementr tion and administration, on behalf of the Parties, of the provisions of this Agreement as hereinafter provided, (11) the resolution of disputes between the Parties arising under or relating to any provision of this Agreement, and (i';>

such other matters as ney be agreed upon among the Parties.

The Executive Committee shall develop such manuals of pr:.cedures at may be necessary to implement and administer any transactions among the Partits No action shall be taken by the Executive Committee except by a ma l >.'

ity vote of all agreements. members unless otherwise specifically provided in tnis or other Notwithstanding anything contained in this Agreement, ne r.atter she'i require the approval of the Execotive Committee or that of any oth commi ttcc created by this Agreement or by the Executive Committee, unless s matter (1) f

Article II. JOINT COMMITTEES (cont'd) is specifically assigned to such committee or (2) involves a facility which is jointly owned, or to be jointly owned, by Authority and Central.

Each Party shall, within ninety (90) days after approval of the min-utes of the Executive Committee, as hereinafter provided, submit such minutes to its Board for action and shall promptly notify the other Party of any action taken thereon.

B. SUBCOMMITTEES 4

The Executive C:mnittee shall not delegate its authority to others; however, the Executive Committee shall have the authority to appoint and direct standing or ad hoc subcommittees or task forces, the members of which need not be members of the Executive Committee, to study and make recommendations on any subject, and to discharge such other duties and responsibilities as may be agreed upon by the Parties.

There shall be established at least two such standing subcommittees; namely, the Planning Committee and the Operating Committee. The present Au-thority-Central Engineering Committee shall be superseded by the aforementioned subcommittees.

1. The Planning Committee shall consist of two salaried employees of Authority appointed by the Chief Executive Officer of Authority and two salaried employees of Central appointed by the General Manager of Central. Such appoint-ments shall be for indefinite tems and each such appointment shall be confirmed in writing by the appointing Party to the other. One member of the Planning Committee shall be designated Chairman and such chairmanship shall rotate among the Parties, with the first chainnan appointed by Authority, and the second chairman appointed by Central. Each chairman shall serve a tenn of two years, commencing on July 1 of the change year, except that the first chairman shall serve through June 30, 1982, and each such appointment shall be confinned in writing by the appointing Party to the other. If a chainnan is unable to complete a tenn, an interim chainnan shall be appointed by the vacating chair-man's Party to serve out the tenn. The Planning Committee shall meet not less '

than quarte-ly with one quarterly meeting being held each April and shall be responsible for the exchange of information and studies and analyses relating to matters involving generation and transmission system planning and such other matters as may be specifically designated by the Executive Committee or as otherwise specifically set forth in this Agreement.

2. The Operating Committee shall consist of two salaried employees of Authority appointed by the Chief Executive Officer of Authority and two salaried employees of Central, appointed by the General Manager of Central.

Such appointments shall be for indefinite tenns and shall be confinned in writ-ing by the appointing Party to the other. One member of the Operating Consnittee shall be designated as chainnan of the Operating Committee, and such chairman-i ship shall rotate among the Parties, with the first chairman appointed by Cen-l tral and the second chainnan appointed by Authority. Each chainnan shall serve I

a tenn of two years, comnencing on July 1 of the changing year, except that the first chairman shall serve through June 30, 1982, and each such appointment shall be confirmed in writing by the appointing Party to the other. If a chair-

Article II. JOINT COMMITTEES (cont'd) man is unable to complete a tem, an interim chairman shall be appointed by the vacating chaiman's Party to serve out the tem. The Operating Comittee shall meet not less than quarterly and shall be responsible for the exchange of infor-mat'on and studies and analyses relating to matters involving operations of the integrated generation, and transmission systems of Authority and Central as may be specifically designated by the Executive Committee or as otherwise specifi-cally set forth in this Agreement.

Nothing in this Agreement shall prevent the Executive Committee from

' dissolving the Planning Committee or the Operating Committee; provided, however, that in the event either committee is dissolved, the responsibilities of such committee that are specifically set forth herein shall fall upon the Executive Committee or such other committee or committees as the Executive Committee may designate.

C. GENERAL RULES Unless the Executive Committee specifically agrees otherwise, the following rules shall apply to all joint committees fonned by the Parties pur-suant to this agreement:

1. Attendance at the meetings shall not be limited to members, but the Parties recognize the practical necessity of limiting attendance of non-members to those who are expected to take an active part in the agenda for a given meeting.

2. Each Party shall be responsible for the personal expenses of its members and its other attendees at a meeting of a committee. All other expenses necessary in the performance of the duties of such committee shall be allocated and paid as determined by the Executive Committee.

3. Minutes of each meeting of a committee shall be kept so as to record the following: date, time and place of the meeting; those in attendance; ac-tions approved; agreements reached; date, time and place of the next meeting.

, The minutes shall not include any position advanced by a Party which was not thereafter at the same meeting accepted; provided, however, when no agreement among the abers of the committee can be reached on a matter, at the request of either Party, the Parties respective positions shall be entered into the minutes for review by the Executive Committee.

4 The secretary of a committee shall prepare and distribute draft min-utes of each meeting of the committee by either personally handing a copy to each member or mailing the same to each member, in each case not later than ten (10) calendar days after the close of the meeting. Each member shall promptly notify the secretary of his approval or of any corrections he desires to be made to the minutes. The secretary shall be responsible for coordinating corrections with the members and shall promptly mail corrected minutes for signature by the

' members. The approved minutes of the Executive Comittee shall be presented to the Parties' respective Boards and the approved minutes of any cther committee

shall be presented to the Executive Committee.

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Article II. JOINT COMMITTEES (cont'd)

5. Realizing that publication of information furnished hereunder by one Party to the other ney detrimoltally affect the furnishing Party, the Parties agree to keep confidential any tuch information upon the written request of the furnishing Party. Public dissemination of such information by the furnishing Party shall constitute a termination of the confidentiality requirement as to that specific information.

Notwithstanding the above, nothing in this Agreement shall be con-strued as preventing the disclosure by either Party to bond counsel, underwrit-ers, consultants or REA of any information which in the opinion of such bond counsel, underwriters, consultants or REA may affect the security of any bonds or other evidences of indebtedness issued or to be issued by such Party. Fur.

ther, neither Party shall be prevented from disclosure of such information in official statements necessary for the issuance of such bonds or other evidence of indebtedness. Further, neither Party shall be prevented from meeting any disclosure requirements required under such Parties existing Bond Resolutions, Indentures or mortgages, including but not restricted to audit reports, engi-neering reports and any other related ' reports.

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1 I

Article III. 0WNERSHIP 0F CROSS AND SUMMER GENERMING SU T10N RESOURCES A. If the covenants of the Bond Resciution unoer which Autnority's out- i standing obligations have been issued require the retirement of any or all of i Authority's Priority Obligations as a result of the acquisition of a porticr. of i e Generating Station by Central, the purchase price to be paid by Central shall cover any and all penalties Authority has, will have, or is committed to pay to retire the involved portion of Authority's Priority Obligations on the date sale is made to Central.

B. Authority hereby grants Central an option whereby Central may own up to forty-five (45%) percent undivided interest in each and every unit, excluding real estate, of the Cross Generating Station. Such ownership if and when effec-tuated, shall be pursuant to a Generating Station Ownership and Operating Agree-ment between the parties which such agreement shall be substantially the same as

. the " Generating Station Ownership and Operating Agreement" attached hereto as Appendix D to this Agreement.

Notwithstanding this or any other provisions of this Agreement, such option to Central for each specific unit shall terminate if not exercised orior to the date Authority bonds are sold to finance the construction of any portion of the specific unit.

C. Authority hereby grants Central an option whereby Central may own up to a thirty three and one third (33 1/3) percent undivided ownership interest in Authority's share of the Virgil C. Summer Nuclear Generating Station (the Summer Station). Such ownership if and when effectuated shall be pursuant to a Genera-ting Station Ownership and Operating Agreement between the Parties which such Agreement shall'be subst.antially the same as the Generating Station Ownership and Operating Agreement attached hereto as Appendix D to this Agreement taking into account any circumstances or requirements specific to the Summer Station.

Notwithstanding this or any other provision of this Agreement, such Authority option to Central shall terminate if not exerc' red by January 1,1981, and if exercised such purchase shall be contingent upon ') Central's obtaining any and all necessary consents agreements or approvals f em SCE&G and appro-priate governmental regulatory bodies and (2) Authority' ability to comply with the covenants of the Bond Resolution under which its out anding obligations have been issued and (3) Central covering any and all e) :nses or penalties the Authority has, will have, or is committed to pay to cons uct the said portion of the Summer Station purchased by Central.

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Article IV. Flit 9tE GENERATING TdS0t.P.CES It is the D artles' intent to cooperate 4.. . u.ttiinetc the planning of future generating resources for their mutual bane'i*., anc, in fertherance *bere-of: _

A. Each Party, at the first regular meeting of tne Planning Committee in each year, shall provide the other, through its respes.tive representatties or such Committee, such Party's most current prcjections ;f that Party's annuai Summer and Winter peak demands and annual enercy requirements for the twenty (20) year period commencing with the immediately precceding Jarcary 1. The Planning Committee shall review such Drojectio: . and *o the extent r.ecess8rj and practicable, reconcile any descrepancies, and ccmcine such projections it a forecast of the peak demand and energy requirements o' the cd ined !..'hority.

Cent ral systen. for such twenty (20) year period.

R. It shall be Authority's responsibilit, to c=vt! 7  : ...e'iminarv ger-eration expansion plan and to construct or otherwise acquire such nev. gene-at-ing resources as niay be required and provided fcr in L;n 9c 2 erit ton ex;iensic.

plan; provided, however, that Central shall have the r< tica to ccutre an un -

vided ownership Interast in each such future ganerat'ng unit pursuant to SeS tion C below.

Authorttj shall develop such generation em insion r e- based uocn tv:

projections of the future power and energy requirements of the ccobined Authcr; ty-Central system described above, and present such cl a- to i.e:.*.ral, througa '.h<

Planning Committee, at a regular meeting of the Plarining Cniattee not later than July 31 of such year. The trigger date for addit.% of rat';re generattre resources shall be that date at which time the PrcierW % . .tari41 Peserva Margin falls below twenty percent (20%) unless otherwise me.t.r!!y agreeable.

C. Subject to the provisions herein, Authority heret, g ants Central 6r.

option to acquire an undivided ownership interest in aact, future generating unit, other than at the Cross and Summer stations, to be const ucted by Auter-ity during the term of this Agreement. Such undivicea ownership interest if arm shall not be less than fifteen percent (150 nor shall it e<ceed the lesser of o (i) forty-five per cent (45%) or (ii) Central's contribution, erpressed a ; a percent, to the Annual Territorial Peak Demand of the cmbined Authority-Centre.i system, as such contribution is projected for the first ful! year following the Commercial Operating Date of such generating unit. Provided, however, that the aggregate sum of the Net Dependable Capacities of the capacity retources of Central shall nct exceed the sum of Central's contc -. tion to the Annual Ten i-torial Peak Demand of the combined Authority-Centr al syst m as such contributicm is projected for the third full yean following the C..r.oref:.1 aperating Date of such generating unit, plus reserves related to such demands, in the case of each such future generating unit, Ai.t harity shall n've Central as much notice as practicable, but at least eighteen (18) nonths writte-notice of Authority's intent to issue the first contracts or to sell canas, whichever is earlier, for the construction o' such unit. Central shall notity j Authority as to its intentions as soon as practicable and Central's option uiti, respect thereto shall expire if not exercised in the manner hereinafter pro"in at least twelve (12) months prior to the projected date contained in the not ice.

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l Article IV. FUTURE GENERATING RESOURCES (cont'd)

Central's option with respect to such generating unit shall be exer -

cised by written notice to Authority, and such acquisition shall be pursuant to an Operating and Ownership Agreement to be timely executed by the Parties which Agreement shall be substantially the same as the Generating Station Ownership and Operating Agreement, attached hereto as Appendix D to this Agreement as such Generating Station Ownership and Operating Agreement may be appropriately modi-fied or amended with the mutual consent of the Parties taking into account any circumstance or requirements specific to such generating unit.

D.

Central may construct or otherwise acquire and own generation re-sources to serve all or a portion of Central's provided, that in case of each such resource, (power and energy requirements,i) Cen arrangements necessary, in the opinion of the Planning Committee, to have the output of such resource delivered to Authority's transmission system; and (ii)

Central has made all of the arrangements necessary, in the opinion of the Plar, ning Committee, to have such resource dispatched by Authority pursuant to Arti-cle X hereof; and (iii) the connection of such resource will not, in the opin-ion of the Planning Committee, compromise the security or integrity of the Authority-Central system.

Furthermore, Central shall give Authority timely notice of Central's intent to acquire such additional generating resources so as to allow Authority sufficient time to make such system modifications and reinforcements as may be necessary in order to receive the output of each such resource consistent with the provisions of this Article IV, Section D.

No such resource shall be con-nected to the combined Authority-Central system until such necessary system modifications and reinforcements have been made; and, additionally, Authority may require Central to provide and install such system protection and control equipment as Authority deems appropriate, consistent with Good Utility Prac-tice, to system. protect the security and integrity of the combined Authority-Central E.

In furtherance of the provisions of Article IV, Section D, a Non-Conventional resource of Central shall not be connected to the combined Author-ity-Cent Committee.

Planning al transmission system without coordinating such connection with the Further, a non-conventional resource shall not be declared an Eligible Capacity Resource unless and until (i) the Planning Committee de-signates it as such and (ii) the Parties are in agreement with respect to the terms and conditions of such classification. For purposes of this Agreement, a

• "Non-Conventional" resource shall be any generating resource which is not con-ventionally fueled (i.e., pulverized coal, oil, gas, hydro, nuclear fission) and/or which is not based upon existing and conventional technologies widely accepted within the electric utility industry at the time such rest,urce is proposed.

Such resource will be evaluated as to its Net Dependeble Capability based upon its ability to be utilized in a reliable manner to meet loads during peak demand periods. Such Net Dependable Capability rating may be (1) estimated prior to experience with the resource if such estimation can be made with rea-sonable certainty or (2) determined after a pericd of experience not exceeding one year after. connection to the system, if such determination cannot be made with reasonable certainty without actual experience with the source.

Article IV. FUTURE GENERATING RESOURCES (cont'd)

The establishment of a rating in accordance with the above will qualify the resource as an Eligible Capacity resource.

l F. For the purposes of the Provisions Relating Tt Resource Integration and Supplemental Power Sales attached hereto as Appendix A, a generating re-source of Central shall be an " Eligible Capacity Resource" if and only if (i) the power and energy of such resource is available to Central as of the effec-tive date of this Agreement pursuant to then existing agreements between the Parties including increases in the amounts threunder; or (ii) such resource is jointly owned with Authority; or (iii) such resource has been proposed in writ-ing to Authority at least ten (10) years prior to the Commercial Operating Date thereof, provided that no such notice shall be given prior to the second anni-versary of the effective date of this Agreement; or (iv) if less than ten (10) but more than five (5) years notice is given, Authority can, at the time such notice is given, reschedule any planned generating resources of Authority which are not then under construction so as to accomodate such resource of Central without increasing or decreasing the planned Territorial Reserve Margins, ex-pressed as a parcentage, by more than two percentage points (2%) in any year during the five-year period following the scheduled Commercial Operating Date of such resource proposed by Central, as such reserve margins are indicated on the Generation Expansion Plan in effect at the time the resource is proposed.

Provided, however, that such resource may be classified as an Eligible Capacity Resource if the Planning Committee detemines that the addition of such re-source, and its classification as an Eligible Capacity Resource, will not have an adverse effect upon the reliability of the combined system and the economics of both Parties. For purposes of this paragraph, the tem "under construction" shall mean that a contractural obligation has been entered into which if can-celled or delayed would require the payment of cancellation or postponement costs; provided, however, if Central agrees to pay any such cancellation or postponement costs, such generating resource shall not be considered as "under construction" for purposes of this caragraph.

G. Subject to the provisions herein, Central hereby grants Authority an option to acquire an undivided ownership interest in each future generatin5 unit

' to be constructed by Central during the tem of this Agreement. Such undivided ownership interest if any, shall not be less than fifteen percent (15%) nor exceed the lesser- of (i) forty-five percent (45%) or (ii) Authority's contri-bution, expressed as a percent, to the Annual Territorial Peak Demand of the combined Authority-Central system, as such contribution is projected for the first full year following the Commercial Operating Date as such tem is defined in the ownership agreement relating to such generating unit. Provided, however, that once the aggregate sum of Central's Net Dependable Capacities equals Cen-tral's contribution to the Annual Territorial Peak Demand of the combined Au-thority-System the aggregate sum of the Net Dependable Capacities and related Reserve Margins of the Caoacity Resources of Authority shall not exceed Author-ity's contribution to the Annual Territorial Peak Demand of the combined Author-ity-Central system as such contribution is projected for the third full year following the Commercial Operating Date of such generating unit.

In the case of each future generating unit, Central shall give Author-ity as much notice as practicable, but at least eighteen (18) months written notice of Central's intent to issue the first contracts or to obtain funds,

.t Article It. HITORE. T 7::Ai!NG RESOURCES (cont'.. l whichever is earlier, for the construction of such ur-it. / atho"'ty shell noti'y Central as soon as practi cable as to its intent ions ar:d Authc-ity's option .vi t h respect thereto shall expire if not exercised in the :anner hereindter pre icer.

at least twelve (12) months prior to the projected citt centaine: A the no+ ice.

Authority's option with respect to eai.h such generating unit rnay se exercised by written notice to Central and such acy.n.;ition, if and whr.:n ef #ec-tuated, shall be pursuant to an operation and ownersm agreenent tr be time ly executed by the Parties which shall be substan' ci:j tre seme is the Genera.inc Station Ownership and Operating Agreement, as sut' -e r a' vg eta-ino Owrerei.

, and Operating Agreement may be appropriately ocei ei ar a.v ded *h 19 m- 4 consent of the Parties taHng into account ary tir "~nec -: c.. re f re e: ts specific to such gen.:rati.:9 unit , provided the: ne clu ,' 'i :1: wi'5 respect to the desiga, const.ection, operation, ana ..a r+u: . . c,f *.e fari i:y shall be reversed, urless otherwise agreed.

H. The generation expansion plan shall be mocifie; .?r e.c a stec 3ppro-priately by the Planning Committee to incorporate each Darty's Eligitle Capacity Resot:rces, and such modified generation expansion plan shall be adopted by .he Planning Committee not later than January 1 of the following year as the offi-cial generation expansion plan of the Parties until the naxt sx.h ;;lan is acort-ed the following ye, .

I. Notwithstanding any other provision of this Agreeme it it 's the intent of both Parties to preserve the all-requirements provision of'the contract Obli-gation. Accordingly, both Parties agree that prior to Jeruar.1,1955, Cen ra' shall not acquire or receive power and energy from any resn,rce or resource; other than those acquired by Central pursuant to such Lon** ac* Obi gation.

t Article V. POWER AND ENERGY RATES ND REQUIREMENTS i A. Subject to the provisions of Paragraph C of this Article V, beginning with the effective date of this Agreement and until January 1,1985, pursuant and subject to the provisions of this Agreement and Appendix A and the Provi-

, sions Relating To Transmission Service attached hereto as Appendix B Authority l hereby agrees to sell and Central hereby agrees to receive and purchase all of I

Central's electrical power and energy requirements except, however, (1) power and energy requirements purchased from others for delivery points in territories not served by Central's members as defined in Article XIV, Section B below, (2) power and energy requirements under arrangements in effect as to Central or any of its members as of June 30, 1979, including arrangements with the Southeastern Power Administration and any modifications thereto and any increases in energy or capacity allocations thereunder.

After January 1,1985, pursuant and subject to the provisions of this Agreement and Appendices A and B, Authority hereby agrees to provide and sell

, and Central hereby agrees to receive and purchase all of Central's electrical

! power and energy requirements not (~) provided by Eligible Central Capacity Resources or (2) purchased from others for delivery points in territories not served by Cooperatives which were members of Central as of June 30,1979or(3) purchased from others under arrangements in effect as to Centra, or any of its members as of June 30, 1979 including arrangements with the Southeastern Power Administration and any modifications thereto and any increases in energy ur capacity allocations thereunder.

B. The rates and charges calculated by the methodology specified in Ap-pendices A and B are based upon a cost of service approach which the Parties agree shall be applicable to the wholesale, partial requirements, and any other sales of capacity, energy, and services between the Parties. It is recognized that different cost of service methodologies can be derived. The Parties also recognize that the agreed upon cost of service methodology may from time to time, contribute to differences between rates to the Authority,s retail custo-mers and to Central's members and/or retail customers of Central's members.

C. Authority and Central shall use their best efforts to implement the procedures and place in effect any and all charges applicable under this Agree-ment and its Appendices. Until the date of implementation the subject services shall be provided at the rate specified in the F Power Contract, including, until July 1981, the surcharge implemented by Amendment No.10, and after June 30, 1981 the surcharge implemented by Amendment No.11. The Authority shall give Central not less than six (6) months written notice of the change-over ' rom the F Power Contract rate to the initial rate to be implemented under this Agreement, which implementation date shall be on January 1 or July 1.

D. Beginning on or prior to April 1,1981, and on or prior to October 1 thereafter Authority shall present to Central for its review and comments a copy )

of the rate study used to detemine (1) the fixed charges to become effective on the following July 1 and (2) an estimate of fixed charges to become effective on

the second following July 1. The charges shall be based on Authority budgeted cost data as approved by the Authority's Board of Directors for the subject ,

fiscal years cosered by the rate study. No earlier than April 1 of each year l Authority shall review the cost data used to determine the fixed charges to 1 become effecthe the following July 1 and adjust such fixed charges to reflect then current cost data.

,, Article V. POWER AND ENFRGY RATES AND REQUIREMENTS (cont'd)

E. The Cost of Service rate study for the fixed charges for the fiscal year 1982 ending June 30, 1982, except as modified by Section C of this Article V, shall be based on the fiscal year 1982 budgets approved by the Authority's Board of Directors as of July 1, 1980.

F. If power and energy is not available within combined Authority-Central System to serve a new industrial customer which desires to be served by Central or one of its members referenced in Article XIV Section 8 or to serve a member of Central not referenced in Article XIV Section B, Authority shall be obligated to use its reasonable best efforts to obtain such power and energy from outside the System. If Authority fails to obtain and purchase such power and energy, .

Central may obtain such power and energy and Authority shall coordinate the transmission and delivery of such Central obtained power and energy. Such power and energy purchased by Central shall become an eligible capacity resource of Central. Central shall be obligated to pay any and all, costs associ-ated with the purchase and delivery of any and all power and energy so obtained from out-side the combined Authority-Central System.

G. If power and energy are purchased by Authority outside the combined Authority-Central system to serve industrial customers of the Authority or any new load of the Authority, excepting Central customer or member-cooperative load, the Authority shall be obligated to pay any and all costs associated with such purchases.

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l Article VI. TRANSMISSION SERVICE AND DELIVERIES A. Authority hereby agrees to provide transmission service to Central in accordance with the provisions of this Agreement and Appendix B.

B.

Central hereby agrees to provide transmission services to Authority across Central owned transmission facilities, excluding leased facilities, which are a part of the Authority-Central combined system upon similar mutually agreed upon tenns and conditions as contained in this Agreement and Appendix B.

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i Article VII. TRANSMISSION SYSTEM COORDINATION A.

Based on (1) Central's Delivery Point requirements pursuant to Article VIII herein, and (2) on Central's notice of Central's intent to construct and own future generating facilities pursuant to Article IV herein, and (3) on the Parties respective transmission system requirements as presented to the Planning i

Committee, and (4) on other appropriate factors Authority shall annually prepare a transmission expansion and improvement plan for the combined Authority-Central system. Such plan shall result from studies of the combined system of Authority and Central considering requirements for adequately supplying the total present and anticipated future transmission requirements of the Parties and to maintain

the integrity of such combined system.

i Such plan shall be submitted to Central through the Planning Committee and, subject to the provisions of this Agreement, Authority shall give good faith consideration to the comments of Central regarding such plan.

B.

Through the Planning Committee, Authority and Central shall attempt to coordinate future transmission facility planning and avoid, to the extent pos-sible, the duplication of such future facilities.

C.

Subject.to the provisions of this Agreement, the Planning Committee shall, pursuant to the provisions of Section E of this Article, detennine the ownership and resultant ownership responsibilities of any proposed transmission facilities making an initial appearance on the transmission expansion and im-provement plan.

D.

Ownership of future transmission facilities (1) not specifically identified as to ownership in Section E of this Article VII or (2) not specifi-cally identified as Bulk Power pursuant to the definition of Bulk Power in the Definition section of this Coordination Agreement or (3) in bona fide dispute as to the category of ownership to which the subject facility should be assigned are to be apportioned as to ownership by the Planning Committee to Authority and Central with a sixty (60) percent ownership accruing to Authority and a forty (40) percent ownership accruing to Central.

The percentage of ownership shall be based on (1) line miles of each separate voltage level for line facilities and (2) non-depreciated construction cost in dollars, as entered on the respective Party's plant records, for each substation of each separate voltage level.

Running totals of the percentage of ownership of each Party of the transmission facilities specificially referenced as those facilities to be assigned pursuant to this Section D of Article VII shall be maintained by the Planning Committee.

Estimated miles of transmission line and substation construction costs are to be used during the planning and construction stages of any particular transmission facility. As soon as actual data is entered upon the plant records of either Party the Planning Ccmmittee shall be informed by the subject Party of the actual data, which actual data shall then replace the estimated data on the running total list maintained by the Planning Committee.

There shall be no joint ownership of transmission facilities but separate and distinct line, line segments, and entire substations and trans-Article VII. TRANSMISSION SYSTEM COORDINATION (cont'd) mission structures shall be indentifiable as to ownership by the Parties in-dividually.

Assignments of ownership by the Planning Committee shall be made in such a manner that the apportioned ownership ratio set forth above shall be maintained as close as practicable.

E.

The responsibility for ownership, design, construction, operation, maintenance, alteration, and any other related matter involving the existing and future transmission facilities and related rights-of-way, regardless of voltage level, on or for the combined Authority-Central transmission system shall be as follows:

1. Central:

a. Facilities owned by Central as of January 1,1980, and not leased to Authority, and the M Loan Facilities.

b. Facilities, excluding bulk oower facilities [but includin the M Loan Facilities], in the planning, design, or con g struction stage which have been (1) presented to the Author-ity-Central Engineering Committee prior to January 1,1980, as facilities to be owned by Central or (11) budgeted by Central as of January 1,1979.

c. Future radial facilities to serve only Central or members of Central, or non-member consumers of Central .

d. Future Delivery Points to serve only Central or member: of Central, or non-member consumers of Central.

e. Bulk power facilities connecting a generating station owned or partially owned by Central in which Authority does not have at least a fifteen (15) percent ownership interest provided however no such line shall extend past a point of contact or a point of crossing of any transmission line of the same voltage owned or leased by Authority.

f.

Forty (40) percent of those future transmission facilities referenced in Section D of this Article VII. Facilities referenced in a, b, c, d and e immediately above are speci-fically excluded from the apportionment. The forty (40) percent is to be measured as follows:

(i) With respect to line facilities by line miles of each voltage level.

(ii) With respect to substation facilities by dollars of substation construction costs, as entered on Central plant record books, at each voltage level. Voltage level is that voltage at the high side of the trans-formation if transformation is made at the substation.

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Article VII. TRANSMISSION SYSTEM C0 ORDINATION (cont'd)

2. Authority:

a. Facilities owned by or leased to Authority.

b. Facilities (i) covered by approved government leases or (ii) in the planning, design, or construction stage which have been presented to the Authority-Central Engineering Commit-tee prior to January 1,1980, as facilities to be owned by Authority or (iii) budgeted by Authority as of July 1,1979.

c. Future radial facilities to serve only Authority customers.

Central or Central Members are not considered Authority customers for this purpose,

d. Future Delivery Points to serve any Authority customer.

Central or Central members are not considered Authority customers for this purpose. .

e. All Bulk Power facilities as specifically defined in the Definition Section of this Coordination Agreement except as excluded in Section E.1.e. of this Article VII.

f. Sixty (60) percent of those future transmission facilities referenced in Section D of this Article VII. Facilities specifically referenced in a, b, c, d, and e immediately

, above are specifically excluded from the apportionment. The sixty (60) percent is to be measured as follows:

(i) With respect to line fscilities by line miles of each voltage level.

(ii) With respect to substation facilities by dollars of substation construction costs, as entered on Authority plant record books, at each voltage level. Voltage level is that voltage at the high side of the trans-formation if transformation is made at the substation. .

l F. Upon timely written request of Central, given from time to time l Authority shall operate and maintain any Central-owned transmission lines spec-ified in such requests subject to and in accordance with the Provisions Relat-ing To " Transmission Operation and Maintenance" attached hereto as Appendix C.

G. All transmission facilities constructed or altered by the Parties l shall be constructed, altered, operated and maintained in accordance with Good 1 Utility Practice and so as to be compatible with the then existing transmission l systems. l l

H. Authority shall, with respect to the Bulk Power facilities mentioned l in Section E.2.e. above, plan, construct, alter, improve, operate and maintain existing and future such facilities in order to provide adequate capacity, voltage and reliability for the size and nature of the loads served from these facilities.

l ARTICLE Vill. DELIVERY POINTS A. Either party may connect any new Delivery Point to the transmission system. The Planning Committee shall be provided any data regarding the pro-posed Delivery Point which its deems necessary or relevant. The Planning Com-mittee shall determine what steps, if any, must be taken to reinforce the system to accomodate new Delivery Points. If the Planning Committee determines that system improvements are necessary, the party owning the facility requiring improvement or responsible for building the necessary facility under the pro-visions of Article VII hereof shall promptly take all necessary steps to make such improvements. No new Delivery Point shall be connected until the required improvements are made.

B. A Central Del' rery Point may be terminated by mutual agreement of the part ies. .

C. When the Planning Committee determines that a Delivery Point shall be converted to a different voltage, the party owning or leasing as lessee, each affected facility shall within a reasonable time make and bear the expense of such conversion.

v

Artit.le IX. ELECTRICAL CHARACTERISTICS A. All power and energy to be furnished hereunder by either Party to the other shall be alternating current, three-phase, approximately 60 Hertz, unre-gulated and at a nominal standard voltage generally available in the area in which service is provided. .

B. Central and Authority shall at all times take and use power and energy in such manner that the load at each point of delivery shall not be unbalanced between phases by more than ten percent. If the load is unbalanced by more than ten percent, the Party responsible for the unbalance may be required by the other Party to make the necessary changes to correct such unbalance within a reasonable time.

C. Power shall be used by Authority and Central in such manner as will not cause objectionable voltage fluctuations or other electrical disturbances to

!he generation, transmission, or distribution systems. If such fluctuations or disturbances are determined by the Operating Committee to be objectionable, the abused Party may require the abusing Party, at its sole expense, to install corrective equipment which will reasonably limit such fluctuations or distur-bances. If the abusing Party fails to install corrective equipment within a reasonable period of time, the abused Party may install such equipment and bill the abusing Party for the installed cost thereof.

D. Both Parties shall maintain a power factor of as near unity as practi-cable. If at any time the power factor is found by the Operating Committee to cause adverse effects on the system the Party or Parties causing the problem shall promptly cause it to be corrected.

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I i

i Article X. DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND TRA A. OPERATION AND MAINTENANCE Each Party shall, to the fullest extent practicable, cause all trans-mission facilities owned or controlled by it, and all generating facilities in which it has an ownership interest, to be designed, constructed, maintained, and operated in accordance with Good Utility Practice and in accordance with stand-ards, methods, and/or procedures established by the Planning and Operating Committees.

Upon timely written request of Central given from time to time, Authority shall operate and maintain any Central-owned transmission lines sub- ,

ject to and in accordance with the provisions of the " Transmission System Opera-tion and Maintencnce Agreement" between the Parties, which such agreement is attached hereto as Appendix C.

B. CENTRALIZED DISPATCH All present and future transmission facilities and capacity resources in which either Party has an ownership interest and which are, or become, a part of the combined Authority-Central system, shall be subjected to centralized dispatch by Authority.

C. _ MAINTENANCE AND REPAIRS Each Party shall, to the fullest extent practicable: (a) cause trans-mission facilities owned or controlled by it, a id generating facilities in which it has an ownership interest, to be withdrawn from operation for mainten-ance and repair only in accordance with maintenance schedules established or approved by the Operating Committee from time to time; (b) restore such facili-ties to good operating condition with reasonable promptness; and (c) in emer-gency situations, accelerate maintenance and repair in accordance with estab-lished procedures.

D. OBJECTIVES OF CENTRALIZED DISPATCH The day-to-day scheduling and coordination by Authority of the opera-tion of transmission facilities which are owned or controlled by the Parties, and of generating units in which the Parties have ownership interests, shall be designed to achieve the following objectives:

(a) The reliability of the combined Authority-Central system shall at all times be reasonably assured, and properly distributed spin-ning and ready reserves shall be provided; and (b) The combined energy requirements of the Parties shall be satis-fied at the lowest practicable cost.

i E. ENERGY TRANSACTIONS WITH OTHERS In furtherance of the above stated objectives, Autnority shall be Central's sole agent for entering into short-term energy transactions with l other utility systems.

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Article X. DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND TRANSMISSION SYSTEM (cont'd)

Accordingly, purchases of energy from others to serve the requirements of the combined Authority-Central system shall be made by Authority, and payment' by Central for any use of such energy shall be pursuant to Appendix A. Further-more, any sales of energy te others from any resources of Authority or Central shall be made by Authority without regard to ownership so as not to make an adverse distinction between the Parties. When such a sale of energy from a Central-owned resource is made, Authority shall enter into such transaction on behalf of Central, and such transaction shall be made pursuant to the then existing agreement between Authority and the purchaser of such energy, provided that the terms of such transaction shall be so as to fairly compensate Central for the costs of generating such energy. In such event Authority shall be responsible for collecting any payment from the purchaser thereof, and each Monthly Billing Statement for services provided Central by Authority pursuant to Appendix A shall reflect credits to Central for such payments received by Authority.

F. PAYMENT FOR DISPATCH-RELATED SERVICES Central shall reimburse Authority for all costs incurred by Authority related to the dispatch and control of Central's transmission and generating facilities and all costs incurred by Authority associated with additional re-cord-keeping, accounting, and reporting occasioned by this Agreement. Such costs shall be determined in the following manner.

1. System Control and Load Dispatching Central shall be responsible for a portion of the costs incurred by Authority which are chargeable as Operating Expenses to Account 556 - System Control and Load Dispatching, of the Uniform System of Accounts. Such porticr.

is to be detennined in the following manner.

The total costs chargeable to Account 556 shall be allocated to each generating resource owned individually or jointly by the Parties in the ratio that the total hours of operation of such resource bear to the aggregate sum of the total hours of operation of all generating resources of the Parties. Cen-tral shall be responsible for (i) one hundred percent (100%) of the costs so allocated to each generating resource in which Authority has no interest and (ii) Central's ownership share, relative to the total of Authority's and Cen-tral's ownership shares in such resource, of the costs so allocated to each generating resource in which both Central and Authority have an ownership in-terest.

Authority shall prepare and render to Central a bill for such System Control and Load Dispatching Costs incurred each month as soon as practicable, and Ceritral shall make payment thereof in accordance with Article XI herein.

E. Other Costs Central shall be further responsible for an appropriately allocated share of all other costs incurred by Authority from time to time in dispatching transmission facilities and generating units of Central, including a facili-i ,

. Article X. DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND TRANSMISSION SYSTEM (cont'd) ties cha ge to cover the capital costs of any equipment acquired by Authority in connectio? therewith.

Any dispatch related capital improvement which would result in the allocation to Central of fifty thousand dollars ($50,000) or more shall be submitted to the appropriate subcommittee for review and analysis prior to purchase thereof. Beginning in the calendar year in which this Agreement be-comes effective, the $50,000 threshold shall be increased or decreased in re-lation to the annual National Consumer Price Index (or successor index) publish-ed by the Bureau of Labor Statistics of the United States Department of Labor or its successor Agency.

Authority shall bill Central for Central's share of such costs as such costs are incurred, and Central's payment therefor shall be in accordance with Article XII herein.

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l Article XI. METERING A. Power and energy deliveries to Central shall be metered at the points of delivery from Authority's transmission system to the transmission or distri-bution systems of Central or Central's Members. If, in the case of particular delivery points, it is impractical to meter such deliveries at the point or points of actual delivery, Authority may meter such deliveries at another point or points and such resulting readings shall be appropriately adjusted to com-pensate for losses between the point or points of actual metering and the point or points of actual delivery.

B. Authority shall install, operate, maintain, and read the meters at each delivery point which Authority detemines is necessary to properly meter deliveries to Central. Central shall supply without cost to Authority a suitable place for installing Authority's metering equipment. Central may at its own cost install, operate, maintain, and read additional metering equipment to check that of Authority.

C. Authority shall test meters at least once every year.

Authority shall provide Central advance notice of testina and Central shall have the right to have a representative present at such testing, D. If any meter used for billing fails to register or is found to be inaccurate, an appropriate billing, based on the best information available, shall be agreed upon by the parties hereto. Any meter tested and found to be not more than two percent (2%) above or below nomal shall be considered accu-rate insofar as correction of billings is concerned. If as a result of any test, a meter is found to register in excess of two percent (2%) either above or below nomal, then the reading of such meter previously taken for billing purposes shall be corrected for the period during which it is established the meter was inaccurate. If such period of inaccuracy cannot be agreed upon by the Parties, no correction shall be made for any period extending more than ninety (90) days prior to the day on which an inaccuracy is discovered.

E. In addition to such tests as are deemed necessary by Authority, Authority shall have any meter of the Authority tested upon written request of Central, and if such meter proves accurate within two percent (2%) above or below nomal, the expense of the test shall be born by Central.

F. Authority's meters shall be read as nearly as practicable at regular intervals of not less than twenty-eight (28) days or not more than thirty-two (32) days, so as to pemit the rendering of twelve monthly bills during each contract year.

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Article XII.. BILLING AND PAYMENT A. Authority shall bill Central for services rendered under this Agree-ment and its Appendices and Central shall pay such bill to the Authority, at the office of Authority in Moncks Corner, South Carolina, or some other location in South Carolina as stipulated by Authority, within twenty (20) days after the date the bill is mailed or otherwise rendered, provided that any payments under any ownership and operating agreement relating to Central's ownership of genera-ting facilities shall be due and payable as provided in such agreement.

B. Service periods of 28 to 32 days will nomally be billed on a regular monthly basis without proration. For irregular billing periods or billing periods determined by special meter readings, monthly capacity or demand charges will be prorated on a 30-day basis based on thS actual number of days between meter readings. All billings rendered to Centras under this Agreement, except billings for payments under any ownership and operating agreement relating to Central's ownership of generating facilities, shall be mailed or otherwise rendered on the same day.

C. When all or part of any bill shall remain unpaid twenty (20) days after such bill is rendered, interest at the rate of Morgan Guaranty Trust Company Prime Rate plus three (3) percent per annum on the unpaid balance shall be added to the bill thereafter, and, in addition to all other remedies avail-able to it, Authority may discontinue service hereunder upon twenty (20) days' written notice. To avoid such discontinuance of service, Central shall, within such twenty (20) day period, pay such unpaid amounts, plus interest, and, at Authority's request, deposit with Authority as collateral security for payment of future bills for service such sum as may be requested by Authority, not to exceed twice the highest monthly bill of Central during the preceding calendar year. Deposit of collateral shall not be required in cases where the nonpayment of all or part of any bill arises out of a genuine dispute as to Central's liability for such bill or part thereof. In the event only a part of a bill is in dispute, Central shall pay the undisputed portion, and shall be subject to the deposit of collateral security as aforesaid if such undisputed portion is not paid.

D. Authority may discontinue all service after twenty (20) days' written notice whenever Central has violated any provision of this Agreement so as to constitute a substantial breach hereof, except that notice need not be given where discontinuance of service at any delivery point is necessary due to Cen- ,

tral's failure to operate in a safe manner consistent with sound engineering or  !

operating principles. To avoid such discontinuance of service, Central shell, I immediately upon notice, cease such unsafe practice or remedy such violation.

E. Where all service is discontinued for cause con:;tituting substantial breach as discussed above, Authority may teminate this Agreement upon giving Central thirty (30) days written notice. Resumption of service following any such termination shall be conditioned upon payment by Central of collateral security, as provided above. Upon such termination, Central shall pay Author-ity, in addition to any unpaid charges for service, such other damages as may be provided by law.

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, Article XIII. ARBITRATION A. Any controversy, claim, counterclaim, defense, dispute, difference or misunderstanding arising under or relating to any provision of this Agreement or its interpretation, performance or breach, which cannot be resolved by the Executive Committee shall be settled by an Arbitral Tribunal as hereinafter provided, with the exception, however, of issues relating to provisions of this Agreement which are specifically exempted from arbitration.

1 Except upon the prior written mutual agreement of the Parties, dis-putes arising under or relating to a provision of any joint ownership agreement between the Parties shall be exempt from Arbitration hereunder.

1 Subject to paragraph 0 of this article either Party shall have the right to proceed with matters which have been disapproved by the other Party and which are the subject of arbitration; provided, however, that if a Party pro-ceeds with such a disapproved matter and if the determination made by the Arbi-tral Tribunal on such matter is inconsistent with that Party's action (or lack of action) thereon, such Party shall, upon such determination by the Arbitral

Tribunal, be subject to ruitable financial judgment. Such financial [or other judgment shall be determined by the Arbitral Tribunal.

Notwithstanding other provisions of this Agreenent whenever a matter

) has been referred to the Arbitral Tribunal and the Party having responsibility for construction or operation, as the case may be, determines thet the other position or positions would create an immediate danger to the safe operation of the System or necessary to obtain the approval of or to comply with requirements

of governmental agencies having jurisdiction, such Party may proceed in accord-ance with its position with respect to such matter until it has been resolved by the Arbitral Tribunal. If the Arbitral Tribunal recommends a course of action which such Party detennines would create a danger to the safety of the combined l

system of Authority and Central or would violate regulatory requirements of any governmental agency having jurisdiction, it may nevertheless proceed in accord-ance with its position subject to a suitable financial or other adjustment.

Such financial or other judgment shall be detennined by the Arbitral Tribunal.

B. Either party may initiate arbitration by giving the other party writ-ten notice stating the question or questions to be arbitrated, the amount in dispute, if any, and the remedy or remedies sought.

C. The Arbitral Tribunal shall be composed of three arbitrators each of  ;

whom shall be experienced in the economics and rate structure of the electric  !

utility industry and power system planning and engineering and who shall he l appointed in the following manner:

)

1. The Party initiating the arbitration shall name one arbitrator in the notice referred to in Paragraph B above.

2. Within twenty-one (21) calendar days after receipt of such no-l tice, the second Party shall give the initiating Party written l notice naming a second arbitrator and specifying any additional l

questions to be arbitrated, the amount involved, if any, and the remedy or remedies sought.

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_,.,__-_,_,,_,_.___i

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Article XIII. ARBITRATION (cont'd) 3.

The two arbitrators so appointed shall choose the third arbitra-tor.

If the second Party fails to appoint its arbitrator within l twenty-one (21) calendar days after receipt of written notice of l

the appointment by the initiating party of its arbitrator, or if the first two arbitrators fail to appoint the third arbitrator within thirty (30) calendar days after the appointment of the second arbitrator, the appointments wMch have not been made as contemplated above shall, on the written request of either Party, be made by the Chief Judge of the United States District Court ,

for the District of South Carolina or, failing appointment by him, by the Chief Judge of the Fourth l'nited States Judicial Circuit, or failing appointment by him, by any Judge of the Circuit Court of South Carolina having jurisdiction of the dis-pute sought to be arbitrated. The third arbitrato, shall not be connected be with either of the Parties. The third arbitrator shall the chairman.

D.

Each of the arbitrators shall take such oath, if any, as may be re-quired under the laws of South Carolina. -

E.

Any arbitration hereunder shall be held at a location in the United States to be selected by the Chairman of the Arbitral Tribunal.

F.

the Chairman. The Arbitral Tribunal shall convene at such time as shall be fixed by sit.

Thereafter, the Arbitral Tribunal shall detemine when it shall G.

4 Subject to the provisions of this Article and except as the Parties shall otherwise agree, the Arbitral Tribunal shall decide all questions relating to its competence and shall detemine its procedure. All decisions of the Arbitral Tribunal shall be by majority vote.

H.

The Arbitral Tribunal shall afford to both parties a fair hearing and shall render its award in writing within forty-five (45) calendar days after the date on which rendered it shall declare the hearings to be closed. . The award may be by default.

An award signed by a majority of the Arbitral Tribunal may grant in its award any remedy or relief which it deems just and equitable and within the scope of this Agreement, including, but not limited to, specific perfomance. A signed counterpart of the award shall be transmitted to each Party.

Any such award rendered in accordance with the provisions of this Arti-i cle and shall comply bewith finalany and binding' such award.upon the Parties, and each Party shall abide by I.

it selects.Each Party shall pay the remuneration and expenses of the arbitrator The remuneration and expenses of the Chairman of the Arbitral Tribunal and any persons, other than the arbitrator selected by each party, as may be required for the conduct of the arbitration proceeding (" third persons")  ;

shall be shared equally by the Parties. The Arbitral Tribunal shall fix the amount of the remuneration of the Chairman of the Art,itral Tribunal and any third persons. Each of the Parties shall defray its own expenses in connection with the arbitration proceedings. Any question concerning the division of the costs of the Chairman of the Arbitral Tribunal and any third persons or the procedure for payment of such costs shall be detemined by the Arbitral Tribunal.

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l Article XIII. ARBITRATION (cont'd)

J. The provisions for arbitration set forth in this Article shall be in lieu of any other procedure for the detemination of the controversies ano claims between the Parties referred to in Paragraph A of this Article.

K. If any arbitrator appointed in accordance with this Article shall 1

resign, die or become unable to act, a successor arbitrator shall be promptly appointed in the same manner as herein described for the appointment of the i original arbitrator. Unless the Parties shall agree othemise, the arbitral i proceedings shall be resumed at the point at which they were interrupted by such death, resignation or inability; provided, however, that if the Chairman of the Arbitral Tribunal shall resign, die or become unable to act, any hearings held previously shall be repeated. '

L. Either Party may be represented by counsel. A Party intending to be so represented shall notify the other Party and the Arbitral Tribunal of the name and address of its counsel at least three (3) calendar days prior to the date set for the hearing at which counsel is first to appear. When an arbitra-tion is initiated by counsel, or where counsel replies for the other Party, such notice is deemed to have been given.

M.

The Arbitral Tribunal shall make the necessary arrangements for the taking of a stenographic record whenever such record is requested by a Party.

The cost of such stenographic record and all transcripts thereof, shall be pro-rated between the Parties ordering copies unless they shall othemise agree.

N. The Parties may er such evidence as they desire ar,d shall produce such additional evidence understanding and detent a che Arbitral Tribunal may deem necessary to an

.ation of the dispute. The Arbitral Tribunal may, if it considers it appropriate, require a Party to deliver to each of the arbitra-tors and to the other Party, within such a period of time as the Arbitral Tribu-nal shall decide, a summary of the documents and other evidence which that Party intends to present in support of the facts set out in its statement of claim or statement of defense. When the Arbitral Tribunal is authorized by law to sub-poena witnesses or documents, it may do so upon its own initiative or upon the request of any Party. The Arbitral Tribunal shall be the judge of the rele-vancy and materiality of the evidence offered, and confomity to legal rules of evidence shall not be necessary. All evidence shall be taken in the presence of all the arbitrators and of both Parties except where either of the Parties is absent after due notice, or is in default or has waived its right to be present.

O.

The Arbitral Tribunal may issue such orders as it may deem necessary to safeguard any property which is the subject matter of the arbitration without prejudice to the rights of the Parties or the final detemination of the dis-pute.

P. Any communication by either party to the Chairman of the Arbitral Tribunal shall be in writing and copies shall concurrently be sent by the Party to the other arbitrators and to the other Party.

Q. If the Parties settle their dispute during the course of the arbitra-tion, the Arbitral Tribunal, upon the Parties' request, may set forth the tems of the agreed settlement in an award.

Article XIII. ARBITRATION (cont'd)

R. No judicial proceedings brought by a Party in relation to the subject matter of the arbitration shall be deemed a waiver of that Party's right to arbitrate.

S. Either Party may cause judgment to be entered upon, or institute a proceeding to enforce, the award of the Arbitral Tribunal in any court of com-petent jurisdiction, and may enforce such judgment by execution and may pursue any other appropriate remedy against such other Party for the enforcement of the award.

T. Any arbitration under this Article shall be governed by the statutory arbitration law of South Carolina of general application in effect at the time of arbitration. If and to the extent that any provision of this Article is invalid under such statutory arbitration law, such provision shall be of no effect without, however, invalidating any other provisions hereof.

U. This Article shall survive the termination of this Agreement.

V. Notwithstancing any other provision contained herein to the contrary, no dispute shall be arbitrable hereunder uniess:

1. the amount of any individual item in dispute has an annual value to the Party initiating the arbitration of at least $100,000 or

2. the items in dispute at any one time have an aggregate annual value to the Party initiating the arbitration of at least $100,000.

Beginning in the calendar year in which the Agreement becomes effec-tive, the $100,000 threshold for arbitration shall be increased or decreased in relation to the annual National Consumer Price Index (or successor index) published by the Bureau of Labor Statistics of the United States Department of Labor or its successor Agency.

W. The Parties expressly agree that this Article XI!! shall constitute a condition precedent to the institution of any proceeding in any court relating to the subject matter.

X. In matters not provided for herein, the rules of the American Arbitra-tion Association shall apply.

Y. Trial De Novo When the prevailing Party to an arbitration applies to the court for enforcement of the arbitration award and the court detemines that one or more of the following elements is present in such award, the non-prevailing Party shall have the right to a trial de novo in a court of competent jurisdiction:

(1) such award for any one proceeding exceeds five million dollars ($5,000,000) against the non-prevailing Party; or (2) where an award requires the perfomance by the non-prevailing Party of any act which (a) is not lawful, (b) is contrary to the provisions of the non-prevailing Party's security instruments, (c) vio-lates the conditions of any governmental or regulatory approval required herein or jeopardizes the obtaining, retaining, transferring or amending such govern-mental or regulatory approvals, or (d) has the effect of creating an Event of Default for the non-prevailing Party under the tems of this Agreement.

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Article XIV. MISCELLANEDUS A. EFFECTIVE DATE AND TERM This Agreement shall become effective upon approval in writing by the Administrator of REA; provided, however, that if such approval by the Admini-strator of REA is not forthcoming by December 31, 1980, either Party may prior to such approval, declare this Agreement and its execution thereof, null,and void.

This Agreement shall remain in force and effect for an Initial Term of fifteen (15) years from the effective date set forth hereinabove. Thereafter, this Agreement shall be automatically renewed for consecutive subsequent terms of fifteen (15) years, but may be terminated at the end of the Initial Term or any subsequent time by either of the Parties hereto by such Party providing written notice of such termination to the other Party at least ten years prior to the expiration of such Initial Term or other termination date.

B. CENTRAL'S MEMBERS For the purposes of this Agreement and its Appendices, Central's members shall be deemed to include only those Distribution Cooperative Members or their successors which it had at the execution hereof, to wit:

Aiken Electric Cooperative, Inc.

Berkeley Electric Cooperative, Inc.

Black River Electric Cooperative, Inc.

Coastal Electric Cooperative, Inc.

Edisto Electric Cooperative, Inc.

Fairfield Electric Cooperative, Inc.

Harry Electric Cooperative, Inc.

Lynches River Electric Cooperative, Inc.

Marlboro Electric Cooperative, Inc.

Mid-Carolina Electric Cooperative, Inc.

Newberry Electric Cooperative, Inc.

Palmetto Electric Cooperative, Inc.

Pee Dee Electric Cooperative, Inc.

Santee Electric Cooperative, Inc.

Tri-County Electric Cooperative, Inc.

and such new members and non-members consumers as may be located generally within the geographical areas now served by Central and its present members.

Central may, at its option, bring other future members of Central under the provisions of this Agreenent; provided, however, the Parties shall, if re-quested by either Party, negotiate in good faith to arrive at terms and con-ditions appropriate for such future members and equitable to both Parties.

C. INTERRUPTIONS TO SERVICE With respect to any services prov'ded hereunder, Authority and Central will exercise their respective best efforts to insure satisfactory and continuous service but do not guarantee a continuous supply of electrical energy and shall not be liable for damage occasioned by interruptions to service or failure to

Article XIV. MISCELLANEOUS (cont'd1 commence delivery caused by an act of God, or the public enemy, or for any cause reasonably beyond its control, including but not limited to the failure or l breakdown of generating or transmitting facilities, flood, fire, strike, or action or order of any agency having jurisdiction in the premises, or for inter-ruption (when the other Party has been given reasonable notice) necessary for inspection, repair or changes in the generating equipment or transmission and distribution system of Authority or Central.

D. FORCE MAJEURE In addition to the specific provisions of paragraph C above, neither Party shall be liable for breach of contract with respect to any obligation under this Agreement or any of its Appendices if prevented from perfor ting such obligation by any cause beyond its reasonable control, including but not limited to act of God or the public enemy, failure or breakdown of gener,ating or transmitting, flood, fire, strike or action or order of any agency having jurisdiction in the premises or the inability, despite timely good faith attempt, to obtain any jurisdiction in the premises, including REA.necessary certificate, pemit, a E. SUCCESSORS AND ASSIGNS This Agreement shall apply to and be binding upon the successors and as-signs of the Parties hereto as fully as if the words " successors and assigns" were written herein wherever reference to Central or Authority occurs in this Agreement.

This Agreement shall not be assigned by either Party without the written consent of the other, except that it may be assigned, without the con-sent of Authority, by Central to the t'nited States, represented by the Adminis-trator of REA or any successor agency as additional security under any mortgage securing any REA loan and to any purchaser of the system or any part thereof under. foreclosure of said mortage in the event of default by Central there-under F.

SELLING OR LEASING OF AUTHORITY SYSTEM If during the life of this Agreement the Authority's System shall be sold or leased to another entity, Central shall have the right, with the approval of theAuthority.

to Administrator of REA, to teminate any existing leases of Central facilities In such event, Central shall pay to the Authority the excess, if any, of Net Book ing to be paid thereon. Value of such system or part thereof over the principal remain-If, however, the Net Book Value shall be less than the difference to Central. principal remaining to be paid on the loan or loans, the Authority In any event the Authority shall pay to Central inter-est Central.on the applicable lease loans up,to the date possession is acquired by

" Net Book Value" shall mean original cost, including capitalized

, replacements, less depreciation provided, however, depreciation on the steam-

! electric generating plant shall not be at in.'ividual rates calculating a cc.1-posite rate ofbasis.

straight-line less tLan 2.52% per year, on depreciab.e plant, figured on a transmission facilities, per year shall be used.An overage rate of not less thm 2.7 l Notice of election to exercise said option shall be given by Central to the Authority or its lessee or pur-chaser within six (6) months after written notice has been received by Central 3

Article XIV. MISCEILANE005 (cont'd) of the happening of the event giving rise to the option.

G.

SELLING OR LEASING OF EITHER PARTY'S SYSTEM If during the Life of this Agreement either Party's System shall become available for sale or lease to another entity, the other Party shall have first refusal rights to the purchase or lease of such System to the extent permitted by law, provided however, the following events shall not be deemed a sale or lease to another entity under this paragraph:

1.

Transfer of Central's system to REA and/or subsequent transfer by REA to any REA borrower,

2. Merger or consolidation of Cent al with any one or more elec-trical cooperatives or REA borrowers,

3. Corporate re-organization or name change of Central, or

4. Mortgage to secure monies borrowed to construct facilities or otherwise in the ordinary course of the borrower's business.

H. RIGHTS OF WAY Central agrees to convey to Authority from time to time for the term of this Agreement and without charge, all easements and other rights of way rea-sonably necessary for the construction operation, maintenance, replacement, and removal of facilities upon, across or w,ithin Central's property for purposes of providing service under this Agreement, provided, however, that upon the termi-nation of this Agreement, any such easements and rights of way shall automat-ically revert to Central. The locattun of such easements and rights of way shall be mutually agreed upon by the Parties through the Joint Committees.

i I. ENTRY OF PREMISES Either Party shall have the right to enter the premises of the other Part" to read, maintain meters, poles, con,ductors, appurtenances and other equipment locate i

J. 0WNERSHIP OF FACILITIES _AND RIGHT OF REMOVAL Except as otherwise may be provided in this Agreement or other agreements between the Parties, any and all equipment installed by either Party on the premises of the other Party shall be and remain the property of the Party owning and installing such equipment, regardless of the manner of attachment to the  ;

real property of the other Party. Upon termination of this Agreement, the owner j of the equipment shall have the right to enter the premises of the other Party  !

and shall, within a reasonable time and in a reasonable manner, ar.d with all  ;

due diligence, remove such equipment at the owner's sole cost and expense, repair any damage to the other Party's property caused by such removal, and restore ment was theinstalled.

premises to the condition in which they existed before such equip-

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Article XIV. MISCELLANEOUS (cont'd)

K. INDEMNIFICATION i

Each Party assumes all responsibility on its side of a delivery point for the service supplied or taken as well as for the electrical installation, appli- l ances and apparatus used in connection therewith. Neither Party shall be re-sponsible to the other for the transmission or control of electrical energy i beyond the respective Party's side of the delivery point. Each Party shall and  :

hereby does indemnify and hold the other Party and its officers, employees, and agents free and hannless from any and all legal and other expenses, suits, claims, damages, costs, fines, penalties, liabilities or other obligations of -

whatsoever kind, including but not limited to damage or destruction of property i and iqiury or death of persons, resulting from or connected with the indemnify-ing Party's perfonnance under this Agreement, including but not limited to the 1 operation, maintenance or defective condition of such Party's equipment, or any act or omission of such Party's smployees, agents or contractors, regardless of whether such act or omission occurred on the other Party's premises; provided, however, that nothing in this Article XIV or elsewhere in this Agreement shall make any Party hereto liable for consequential damages or loss of profits.

1

L. INTERPRETATION AND CAPTIONS

1. If any provision of this Coordination Agreement or any of its 1

Appendices is in conflict with any provision of any prior dated agreement, the provis' ions of this Coordination Agreement shall

prevail.

2. The captions of Articles and Sections of this Coordination Agree-

l ment and its Appendices are for convenience only and shall be i ignored in construing or interpreting the provisions of this Coordination Agreement.

M. AUDIT i

1. Notwithstanding any other provision contained herein to the contrary and in addition to any other rights Central may have under this Coordination Agreement, Central shall have the right at any time, but no more often than annually, to audit Authori-ty's books at Central's expense. i

2. Notwithstanding any other provision contained herein to the contrary and in addition to any other rights Authority may have under this Coordination Agreement, Authority shall have the 1

right at any time, but no more often than annually, to audit Central's books at Authority's expense.

I N. COUNTERPARTS This Coordination Agreement may be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Coordination Agreement.

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Article XIV. MISCELLANE0US (cont'd)

O. SEVERABILITY If any provision of this Coordination Agreement is held invalid or unen-forceable by any govermnental authority or court having jurisdiction over the subject matter hereof, the remaining provisions shall remain in full force and effect according to their terms and the Parties shall renegotiate in good faith any provision held invalid or unenforceable in order to reach agreement as to replacement of or modification to such provision.

P. TAX EXEMPT STATUS If any provision of this Coordination Agreement would, in the opinion of the United States Internal Revenue Service, cause any obligation of the Author-ity to be an " industrial development bond" as defined in subsection (c) (2) of Section 103 of the Internal Revenue Code of 1954 of the United States of Ameri-ca, the parties hereto shall attempt to agree upon a substitute provision which would, in the opinion of the United States Internal Revenue Service, result in such obligation not being subject to treatment as an " industrial development bond." Failing such agreement, this contract shall be null and void.

Q. GOVERNING LAW The provisions of this Coordination Agreement shall be construed and governed in accordance with the laws of the State of South Carolina.

Upon demand by either Party from time to time during the life of this Coordination Agreement and its Appendices, the Parties shall negotiate for the purpose of reaching a mutual agreement which will be fair to both if circum-stances require a change in this Coordination Agreement or its Appendices to:

1. Remove any grossly unfair or unjust burden imposed on either Party or its customers by operation of any part of tiiis Coordin-ation Agreement.

2.

Comply with rulings of any governmental authority or court having jurisdiction over the subject matter hereof.

3. Correct any inequities due to inadvertent errors or omissions in this Coordination Agreement.

R. SPECIFIC PERFORMANCE The Parties agree that in the event of any substantial breach of this Agreement, including any of its Appendices, the damaged Party shall, in addition to any other remedy at law or in equity or by statue or arbitration available to it, be entitled to a decree for specific performance hereof according to the terms of this Agreenent.

S. NOTICES Any notice or communication required or permited hereunder shall be effec-tive when personally delivered or when addressed:

Article XIV. MISCELLANEOUS (cont'd)

If to Central: Central Electric Power Cooperative, Inc.

Post Office Box 1455-Colenbia, SC 2920?

If to Authority: South Carolina Public Service Authority One Riverwood Drive Morcks Corner, SC ?9461 and deposited, postage prepaid, certified or registered, in the United States mail. Any such notice so given shall be deemed to have been given on the date of such deposit of such notice in the United States mail as evidenced by the postmark on the envelope. Ef ther Party by notice to the other given as afore-said may change its mailir.g address for future notices hereunder.

IN WITNESS WHEREOF, the Authority pursuant to a resolution duly adopted by its Board of Directors, has cause,d this Coordination Agreement to be executed by its President and its seal to be affixed by its Secretary, and Central, pursuant to a resolution duly adopted by its Board of Trustees, has caused this Coordination Agreement to be executed by its President and its corporate seal to be affixed by its Secretary, all as of the day and year first above written.

Attest:

SOUTH CAROLINA PUBLIC SERVICE AUTHORITY BY Secretary President Attest: CENTRAL ELECTRIC POWER COOPERATIVE, INC.

' BY Secretary President

-(SEAL) l

l APPEN0lX A l

' PROVISIONS RELATING TO

- RESOURCE INTEGRATION AND SUPPLEMENTAL POWER SALES l

i ARTICLE I. DESCRIPTION OF SERVICE A. SALE AND DELIVERY OF POWER Subject to the provisions of this Appendix and the Coordination Agreement, Authority shall sell and deliver and Central shall purchase, receive, and pay for all of Central's electrical power and energy requirements except, however, (1) power and energy requirenents purchased from others for delivery

• points in territories not served by Central's members as defined in Article XIV, Section B (of the Coordination Agreement), (2) power and energy requirements under arrangements in effect as to Central or any of its members as of June 30, 1979, including arrangements with the Southeastern Power Admi.11stration and any modifications thereto and any increases in energy or capacity allocations there-under, and (3) purchases from others as required by any state or federal statute or regulation now or hereafter in effect.

B. SERVICE CHARACTERISTICS AND AVAILABILITY The bulk electric power supply services provided hereunder shall consist of (1) Firm Wholesale Supplemental Capacity and Energy to supplement power and energy received by Central from Central-owned Capacity Resources, (2)

Reserve Capacity and (3) Back-up Energy for Eligible Capacity Resources of Central, and Economy Energy services, all as hereinafter defined. All capacity and energy to be furnished hereunder shall be alternating current three-phase, unregulated electric service at a nominal frequency of approximately 60 Hertz, and available at the high-voltage bus bars of Authority's step-up substations at its several Generating Stations and at the paints of interconnection with other utility canpanies, but metered at the actual Points of Delivery to Central's Members and adjusted for losses as described hereinafter. The availability of this service shall be conditioned upon Central's compliance with the general terms and conditions of this Appendix and the provisions of the Coordination Agreement.

Authority shall provide transmission service to Central as provided in the Coordination Agreement and Appendix B thereto.

E i

4

\

.- APPENDIX A ARTICLE II. GENERAL TERMS AND CONDITIONS A. ESTIMATED AND ADJUSTED BILLINGS In preparing Monthly Billing Statements for services rendered here-under, the detennination of capacity charges pursuant to Articles VI and VII herein shall be predicated initially on the bacis of the Parties' projections of the Territorial Peak Demands for each Contract Period and each Party's contribu-tions thereto pursuant to the Coordination Agreement, and these projections shall be used as the basis for billing until the actual data becomes available.

When actual Territorial Peak Demand data becomes available for each Contract Period, the capacity charges hereunder shall be recalculated to reflect such actual Territorial Peak Demand data. A special bill shall be rendered to Cen-tral, as soon as practicable, reflecting the aggregate difference between the estimated bills previously rendered to Central and recalculated bills based upon the actual Contract Period Territorial Peak Demand data. As between the. Author-ity and Central, whichever Party owes the other as a result of such recalcula-tion shall make payment to the other as follows: the paying Party may elect to spread the total amount owed in equal installments over a number of months not to exceed six (6) nor to extend beyond the period Central takes service here-under; provided, however, the amount of each such installment except the last shall not be less than One Hundred Thousand Dollars ($100,000). Such payments may be reflected as additional charges or credits to succeeding monthly bills.

Additionally it is recognized that due to delays in accounting and record keeping, actual, fuel costs may not be available at the end of each month in time to allow timely rendering of bills based upon such actual costs. In consideration thereof, each month Authority shall estimate the Average Fuel Cost (as defined below) of each Capacity Resource; and as soon as practicable after the end of the current Monthly Billing Period, Authority shall prepare and render a Preliminary Billing Statement to central based on such estimates.

Payment of such Preliminary Billing Statement by Central shall be subject to the Payment provisions of the Coordination Agreement.

As soon as actual fuel cost data becomes available for the current Monthly Billing Period, a Final Billing Statement shall be calculated using such actual costs, and the aggregate difference between such Final Billing Statement and the Preliminary Billing Statement previously rendered shall be credited or debited as appropriate to the Preliminary Billing Statement for the next suc-ceeding Monthly Billing Period. Central shall provide Authority the actual fuel costs of Central's generating resources for each Monthly Billing Period as soon as practicable af ter the close of such Monthly Billing Period.

B. ' TEST RATING OF CAPACITY RESOURCES The Operating Committee shall be responsible for rating and evaluating each Capacity Resource in order to determine its Net Dependable Capability for the purposes of this Appendix. Such rating and evaluations shall be made in accordance with Good Utility Practices (as defined in accordance with the Coor-dination Agreement) and shall be without regard to ownership so as not to unduly discrimina:e between the Parties.

At the request of either Party, any generating unit of the other Party shall be tested for the purpose of rating such generating unit, and representa-

APPENDIX A l

tives of the requesting Party may be present to observe such test. The costs of such test shall be borne by the requesting Party if the i Muested test results in a rating not more thea five percent (51) above or below the rating thereto-fore utilized. If the evaluation of the requested test revilts in a rating which is in excess of five percent (51) either above or below the rating there-tofore utilized for such resource, then the owner of such generating unit shall bear the costs of such test, and the resulting rating shall be utilized for the next monthly billing hereunder and thereafter until the next testing and rating.

C. MAINTENANCE SATURATION For the purposes of this Appendix, the integrated system of Authority and Central shall be deemed to be " Maintenance Saturated" during a Contract Year if the Planning Committee determines that capacity was added to the system for the reason that Authority or Central, in order to maintain adequate operating reserve margins at other times during the Contract Year, have planned or sche-duled outages for the routine maintenance of one or more generating resources for the time of the expected Annual Territorial Peak Demand. However, such determination shall be made without regard to generating units not operated by one of the Parties or generating units over which the Parties otherwise have no control with respect to the scheduled maintenance thereof.

• In any Contract Year during which the Planning Committee determines that the combined system of Authority and Central is Maintenance Saturated, the determination of the Territorial Reserve Margin for the Contract Period in which the Annual Territorial Peak Demand occurred shall be adjusted upward or downward only for the purposes of determining Central's Reserve Capacity Requirements pursuant to Article VII, Section A, herein to properly account for the Net Dependable Capability of those Capacity Resources or portions thereof which were added to the system in consideration of such Maintenance Saturation.

D. OTHER TERMS AND CONDITIONS All service provided hereunder shall be pursuant to and in accordance with the provisions of the Coordin6 tion Agreement.

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I 4

APPENDIX A ARTICLE III. _ DEFINITIONS the following terms shall be defined as follows:For the purposes o ,

Contract Period:

Period.

A Summer Contract Period shall be the period beginnin July 1 and ending 12:00 midnight on the following December 31.

Winter Contract midnight on the following June 30. Period shall be the period beginn Coordination Agreement:

tion Agreement" between South Carolina Public Service Authority a Electric o f. Cooperative, Inc., to which this Appendix A is attached and mad Fir. Purchases:

party, generally not from specific or designated generating unit intended to have associated with them sufficient reserve capacity so as to be continuously available except during the most severe emergencies.For the purposes of this Appendix, Firm Purchases from others must carry a level of reserves ity-Centralor reliability at least equal to those of the overall combined Author-System.

Net Dependable Capability: The maximum net dependable generation output level in megawatts, exclusive of station use, that can reasonably be expected to be maintained by such Capacity Resource during peak demand per to reflect the net maximum power available from suc the high-voltage side of the associated Generating Station substation if such Capacity transmissionResource system of is a generating Authority unit or units located on the intergrated and Central, Net Dependable Capability shall reflect the net ma point or points of delivery of such power and energy Peak Period:

Either a Summer Peak Period or a Winter Peak Period. A Summer Peak 12:00 midnight Period on the followingshall be the November 30. period beginning 12:01 a.m. on June period followingbeginning May 31. 12:01 a.m. on December 1 and ending 12:00 midnight on t herein shall be as defined in the Coordination Agreeme dices thereto.

l 1

APPENDIX A ARTICLE IV. DETERMINATION OF CAPACITY AND ENERGY REQUIREMENTS A.

TERRITORIAL CAPACITY AND ENERGY REQUIREMENTS The Territorial Demand in each hour shall be the total net one-hour integrated kilowatt demand on the integrated transmission system of Authority and Central during such hour as metered or measured at the high-voltage bus bars cf the various generating station substations of the integrated system and at the utility bus bars at the Authority's side of the points of interconnection with other systems.

If Authority deems it impractical to meter or measure all or i portions of the Territorial Demand at one or more such points, Authority may i meter or measure such net energy input where practical, and the resulting i readings or measurements shall be adjusted appropriately to compensate for losses between the points of actual metering or measurement and the high-voltage i bus bars of the Generating Station substations and/or the bus bars on Authori-

ty's side of points of interconnection with other utility systems.

The Territorial Energy Requirement for any month) shall be the aggregate sum, in kilowatt-hours, period of time (e.g., a of the Territorial Demands for the hours comprising such time period.

mined as follows: The Territorial Peak Demand for each Contract Period shall De deter-the Summer Territorial Peak Demand shall be the maximum Territorial Demand occurring during the most current Summer Peak Period; the Winterthe during Territorial PeakWinter most current Demand Peak shall Period. be the maximum Territorial Demand occuring t

Demand occurring The _ Annual during theTerritorial then current Peak Demand Contract Year.shall be the maximum Territorial B.

CENTRAL'S CAPACITY AND ENERGY REQUIREMENTS Central's Total Demand in each hour shall be the total combined coin-cident one-hour Integrated kilowatt demand of Central and Central's Members with thesuch during hour as metered Coordination or measured at the Points of Delivery in accordance Agreement.

Central's Total Derand in each hour shall be further adjusted for losses between the Points of Delivery and the high-voltage bus bars of the various generating station substations of the integrated system

and at the bus bars at the Authority's side of the points of interconnections with other P1anning utility systems in a manner to be determined from time to time by the Comm1ttee.

L Central's Total Energy Requirement for any time period (e.g., a month) shall be the aggregate sum, in kilowatt-hours, of Central's Dcmands for the hours comprising such time period.

j Central's Coincident Peak Demand shall be Central's Total Demand occurring at the time of the occurrence of the Contract Period Territorial Peak Demand for the then current Contract Period.

i Central's Annual Coincident Peak Demand shall be Central's Total Demand occurring at the time of the occurrence of the Annual Territorial Peak Demand for the then current Contract Year.

l

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APPENDIX A C.

AUTHORITY'S CAPACITY ANP 7NERGY REQUIREMENTS Authority's Net Demand in each hour shall be determined as (i) the Contract Period Territorial Demand in such hour, less (ii) Central's Total Demand, adjusted for system losses, in such hour.

Authority's Net Energy Requirement for any time period shall be deter-mined as (1) the Territorial Energy Requirement for such time period, less (ii)

Centrel's

' riod. Total Energy Requirement, adjusted for system losses, for such time Authority's Coincident Peak Demand shall be Authority's Net Demand ig at the time of the Contract Period Territorial Peak Demand for the

. rent Contract Period.

Authority's Annual Coincident Peak Demand shall be Authority's Net Demand occurring at the time of the Annual Territorial Peak Demand for the then current Contract Year.

i l

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APPENDIX A ARTIC1.E V. ENERGY AND FUEL COST ACCOUNTING A. NET GENERATION AND COSTS 1.

The Net Generation of a Capacity Resource during any time period shall be the net one-hour integrated demand, exclusive of station use, generated or produced from such Capacity Resource during such time period that is avail-ablesystem.

sion from such resource as input into the integrated Authority-Central transmis-Such Net Generation snall be metered or measured at the high-voltage bus bars of the various Generating Station substations in the case of generating units or at the points of delivery to Authority's system in the case of purchased power Capacity Resources. If Authority deems it impractical to so meter or measure the Net Generation of a Capacity Resource at such points, such Net Generation may be metered or measured where practical and adjusted appropri-ately to compensate for losses between the actual point of metering or measure-ment and the high-voltage bus bar to the Generating Station substation or the points of dalivery to the Authority's system.

2.

j The Net Fuel Cost of a Capacity Resource during any time period shall be detemined as follows:

The Net Fuel Cost of a generating unit shall be the dollar cost of fuel burned or used during such time period, as recorded in Accoants 501, 518, or 547 The Net Fuel Cost of a purchased power resource ce transaction shall be the total net cost of the energy, exclusive of demand and station or customer charges, received through or from such resource during such time period as stated in the statements, bills, or invoices received for such purchases. If such statements, bills, or invoices do not explicitly state such net cost of energy associated with such purchases, net cost of energy shall be estimated in a

are manner similar to the manner in which the Net Fuel Costs of generating units detemined.

If either Party hereto is subject to the South Carolina State Genera-tion Tax, or any similar tax or sum in lieu thereof, the Net Fuel Cost of each Capacity Resource of such Party shall be increased for the purposes of this Appendix so as to account for such tax.

3.

The Average Fuel Cost of each Capacity Resource during each month shall be the Net Fuel Cost of such Capacity Resource during such month dividad by the Net Generation of such Capacity Resource during such month, bt.th as defined above. i

4. ~

\

It is recognized that from time to time Authority may enter into power and energy transactions with other utility systems, such transactions representing sources or uses of energy not represented or otherwise reflected as Capacity Resources in the Capacity Resources List.

The Net Generation of such purchase shall be the net energy delivered to the integrated Authority-Central ,

l t ansmission system. The Net Fuel Cost of the transaction shall be considered ,

the net cost of the energy, exclusive of demand and station or customer charges, I received through or from such transaction during such time period as stated in  ;

the statements, bills, or invoices received for such transaction. The Average Fuel Cost of such transaction will be the Net Fuel Cost divided by the Net Generation of the transaction as determined herein. ,

-4 5-

APPENDIX A In the case of a purchase of energy by Authority, such transaction shall be treated during the current month as a Capacity Resource having a Net Dependable Capability of zero and included in the Resource Classification List at a position directly below that Capacity Resource having an Average Fuel Cost most nearly equal to but not less than that of such transaction. In the case of a sale of energy by Authority, the Net Generation and Net Fuel Cost of the Capacity Resource or Resources having an Average Fuel Cost most nearly equal to that associated with such sale shall be reduced by the Net Generation 2nd Net Fuel Cost, respectively, associated with such sale.

This procedure notwithstanding, if an energy transaction with another utility system can otherwise be identified as being directly associated with one or more particular Capacity Resources, then the Net Generation ard Net Genera-tion Cost of such particular Capacity Resource or Resources shall be increased or reduced by the Net Generation and Net Fuel Cost, respectively, of such trans-action.

5. The Variable Operation and Maintenance Rate of each Capacity Resource shall be the estimated average annual Variable Operation and Mainten-ance Expenses per kilowatt-hour of Net Generation as determined in the case of Authority's Capacity Resources for each Contract Year from Authority's Cost of

' Service Study for the then current Contract Year in accordance with Exhibit III attached hereto. The Variable Operation and Maintenance Rate for Central's Capacity Resources shall be determined in the same manner as then currently usec by Authority and Authority's Capacity Resources.

6. The Incremental Cost of each Capacity Resource in each month shall be the sum of (i) the Average Fuel Cost of such Resource during such month and (ii) the Variable Operation and Maintenance Rate for such Resource for the current Contract Year, both expressed as mills per kilowatt-hour.

B. RESOURCE LIST For each month, there shall be prepared a Resource List. The Resource List shall be a list of the Capacity Resources of Authority and Central arranged in ascending order of Incremental Cost so that the Capacity Resource lowest on the List shall be that Capacity Resource with the Lowest Incremental Cost and the Capacity Resource at the top of the list will be that Capacity Resource with the highest Incremental Cost.

C. ENERGY ACCOUNTING

! 1. The Expected Generation of each Capacity Resource of each Part) in each hour shall be determined as follows. The Expected Generation of the Capacity Resource lowest (compared to other Capacity Resources of the Party) on the Resource List shall be the lesser of (i) the Net Dependable Capability of such Capacity Resource, and (ii) the Demand, appropriately adjusted for losses, of such Party during such hour. The Expected Generation of each successive Capacity Resource of such Party shall be the lesser of (i) the Nat Dependable Capability of such Capacity Resource, and (ii) the amount, if any, by which such l Party's total Demand, appropriately adjusted for losses, in such hour exceeds the aggregate sum of the Expected Generation of all other Capacity Resources of the Party below or lower than such Capacity Resource in the Resource List.

l APPENDIX A

, 2. The Surplus Generation of a Capacity Resource in each hour shall be the amount, if ary, by which the actual Net Generation of such Resource during such hour exceeds the Expected Generation of such Resource during such hour.

3. The Replacement Energy Requirement of a Capacity Resource in each hour shall be the amount, if any, by which the Expected Generation of such resource in such hour exceeds the actual Net Generation of such Resource in such hour.

4. For the purposes of detennining Back-up and Economy Energy trans-ections between the Parties, the Replacement Energy required by each capacity Resource shall be deemed to be supplied from those Capacity Resources having Surplus Generation in the following manner. Starting at the top of the Resource List and proceeding to the bottom, the Replacement Energy for the Capacity Resource highest on the Resource List which has a Replacement Energy Requirement shall be deemed to be supplied from the Surplus Generation or portions thereof of the Capacity Resource or Resources highest on 'ne Resource List from which Surplus Generation is available. Replacement Energy for each next succeeding Capacity Resource having a Replacement Energy Requirement shall be deemed to be supplied from the Surplus Generation or portions thereof of the Capacity Re-source or Resources next higher on the Resource List from which such Surplus Generation is available and not previously used to provide such Replacement Energy for another Capacity Resource.

D. BACK-UP AND ECONOMY SERVICES When Replacement Energy for a Capacity Resource of one Party is sup-plied (in the manner hereinabove described) from one or more Capacity Resources of the other Party higher on the Resource List than the Capacity Resource for which such Replacement Energy is thus supplied, such Replacement Energy shall be deemed Back-up Energy purchased by the fonner Party from the latter. The price for such Back-up Energy purchase shall be at the current Incremental Cost in mills per kilowatt-hour of the Capacity Resources providing such Back-up Energy.

When Replacement Energy for a Capacity Resource of one Party is sup-plied (in the manner hereinabove described) from one or more Capacity Resources of the other Party lower on the Resource List than the Resource for which such Replacement Energy is thus supplied, such Replacement Energy shall be deemed Economy Energy purchased by the former Party from the latter. The price for such Economy Energy purchase shall be one-half (1/2) of the sum of (i) the current Incremental Cost of the Capacity Resource for which such Economy Energy ,

! is purchased and (ii) the current Incremental Cost of the Capacity Resources i from which such Economy Energy is supplied.

ARTICLE VI. FIRM SUPPLEMENTAL PURCHASES Central shall purchase and receive from Authority all of Central's l

Supplemental Power and Energy Requirements, as defined herein, and pay Authority for such purchases at the prices detenninea in the manner described hereinbelow.

A. CENTRAL'S SUPPLEMENTAL DEMAND AND ENERGY REQUIREMENTS Central's Supplemental Demand in any hour shall be the amount, if any, I

l e 1 APPENDIX A by which Central's Total Demand in such hour exceeds the aggregate sum of the Net Dependable Capabilities of all of Central's Eligible Capacity Resources.

Central's Supplemental Power Billing Demand shall be detemined as i

follows: for each mont 1 of a Summer Contract Period, Central's Supplemental Power Billing Demand shall be Central's Supplemental Demand which occurred at i the time of the most recent Summer Territorial Peak Demand; for each month of a Winter Contract Period, Central's Supplemental Power Billing Demand shall be Central's Supplemental Demand which occurred at the time of the most recent Winter Territorial Peak Demand.

Central's Supplemental Energy Requirement for each Monthly Billing i l

Period shall be the amount, if any, by which Central's Total Energy Requirement for such Monthly Billing Period exceeds the aggregate sum of the Expected Gener- ,

ation of all of Central's Capacity Resources for such Monthly Billing Period.

B. PRICES FOR FIRM SUPPLE'4 ENTAL POWER AND ENERGY

1. Supplemental Capacity The price per kilowatt of Central's Supplemental Power Billing Demand shall be detemined in the following manner:

a. Prior to the beginning of each Contract Year pursuant to Article V Section D of the Coordination Agreement, Authority shall prepare or have prepared a Cost of ~.urvice Study to detemine its projected Annual Revenue Requirements for that Contract Year as functionalized or classified as between the following classifications:

(i) Production Demand Costs (ii) Production Energy Costs (iii) Transmission Costs (iv) Distribution Costs (v) Customer Accounting Costs (vi) Customer Infomation and Sales Costs (vii) Other Costs

b. Such Cost of Service Study shall be prepared in accordance with the Partial Requirements Cost of Service Methodology attached hereto as Exhibit I.

c. Such Cost of Service Study shall be presented to Central for Central's review not later than October 1 prior to the beginning of such Con-

" tract Year, and Central shall have until January 1 to review such study and submit Central's comments thereon for consideration by Authority. Authority shall consider such comments at a regularly scheduled meeting or, at Authority's option, at a special meeting of its Board of Directors prior to the beginning of the Contract Year.

d. Based on such Cost of Service Study as it may be revised pursuant to this Appendix A and Section D of Article V of the Coordination Agreement, Authority shall determine the price per kilowatt of Firm Capacity in accordance with Exhibit II attached hereto, and such price per kilowatt of fim ,

Capacity shall apply to each kilowatt of Central's Supplemental her Billing l Demand.  !

.- APPENDIX A

2. Supplemental Energy The price per kilowatt-hour of Central's Supplemental Energy Require-ment in each Monthly Billing Period shall be the sum of (i) Authority's Monthly.!

Fuel Cost in mills per kilowatt-hour and (ii) Authority's then current Produc-tion Energy following Charge Rate in mills per kilowatt-hour, both as determined in the manner:

a.

Billing Period shall be detemined by the following fonnula: Authority's A!

F= [F /G,] x [1/(1-K)]

Where:

F=

Average Monthly Fuel Cost in mills per kilowatt-hours, rounded to the nearest one-thousandth of a cent.

F*= Authority's total fuel cost for the current Monthly Billing Period, and such costs shall include the following:

(a) the cost of fossil and nuclear fuel burned or used in Authority's own plants and Authority's share of fossil and nuclear fuel burned or used in jointly owned or leased plants as such costs are recorded in Accounts 501, 518, and 547, plus (b) the actual identifiable fossil and nuclear fuel cost associated with energy purchased for reasons other than identifiedin(c)below,plus (c) the net energy cost of energy purchases exclusive of capacity or demand charge (irrespective of the designa-tion assigned to such transaction) when such energy is purchased on an economic dispatch basis. Included therein may be such costs as the charges for economy energy purchases and the charges as a result of sched-uled outage, all such kinds of energy being purchased by the Authority to substitute for its own higher cost energy; and less (d) the cost of fossil and nuclear fuel recovered through inter-system sales including the fuel cost related to economy energy sales and other energy sold on an eco-nomic dispatch basis.

I G=

• Authority's total Net Generation for the current Monthly Billing Period which shall be equated to the sum of (i) generation, (ii) purchases, (iii) interchange in, less (iv ,

energy associated with pumped storage operations, less (v)) l inter-system sales referred to in F , (d) above, i i

1 l

, APPENDIX A I

K= Authority's Allowance for Capital Improvements, expressed as a decimal fraction, which was included in Authority's Cost of Servir.e Study, referenced in Subsection 1 of Section B of this Article VI, for the then current Contract Year.

The determination of F herein shall reflect appropriate credits (charges) for sales (purchaseI)and by AUt( hority to (from) Central of Back-up and Economy Energy pursuant to Article VI herein.

I

b. Authority's Production Energy Charge Rate for each Contract Year shall be determined from Authority's above referenced Cost of Service Study for the then current Contract Year in accordance with Exhibit III attached hereto. -

1

APPENDIX A ARTICLE VII. RESERVE CAPACITY CHARGES In consideration of Authority's providing Back-up Energy services for Eligible Central-cwned Capacity Resources, Central shall purchase and pay for Reserve Capa' city associated with such Back-up Er.ergy services in the manner set forth hereinafter.

A. Central's Reserve Capacity Requirement Central's Reserve Capacity Requirenent in each Monthly Billing Period shall be (1) the aggregate sum of the Net Dependable Capabilities of Central's Eligible Capacity Resources other than Firm Purchases, multiplied by (ii) the then current Territorial Reserve Margin expressed as a decimal fraction.

B. Price for Reserve Capacity The price per kilowatt of Reserve Capacity purchases from Authority shall be determined from Authority's above referenced Cost o~f Service Study for the then current Contract Year in the manner set forth on Exhibit II attached hereto.

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APPENDIX A

. ARTICLE VIII. MONTHLY BILLIPS STATEMENT I

A Monthly Billing Statement shall be prepared and rendered for ser- l vues provided hereunder for each Monthly Billing Period. Each such Monthly Billing Statement, prepared and rendered in accordance with the provisions of Article II, Section A, hereof, shall reflect the monthly charges for l

)

l (a) Firm Supplemental Power and Energy purchases by Central, )

(b) Reserve Capacity purchases by Central, and (c) Back-up and Economy Energy purchases by Central.

(d) Any applicable charges or credits (or installments thereof) resulting from adjustments made pursuant to Article II, Section A, of this Appendix A.

Each such Monthly Billing Statement shall also reflect any credits for Back-up.and Economy Energy purchases by Authority from Central so that to the extent possible a net bill is rendered. When, however, that Monthly Bill re-flects a net credit due Central, Authority shall render payment to Central for such credit within twenty (20) days, and, in such event, Authority shall be subject to the late payment provisions of Article XII, Section C, of the Coor-dination Agreement.

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EXHIBIT I APPENDIX A COST OF SERVICE METHODOLOGY l The purpose of this Methodology is to describe the methods of func-tionalization of Authority's costs to be used in developing annual Cost of Service studies pursuant to Appendices A and B to this Power System Coordination and Integration Agreement (" Coordination Agreement").

As used herein, " functional classification" or " function" shall refer to one of the following categories or classifications of costs:

(i) Production Demand (ii) Production Energy (iii) Transmission i

(iv) Distribution

'! (v) Customer Service

, Except as otherwise specifically provided herein, the uses of such function,al classifications herein shall be consistent with the uses of such classifications contained in the Uniform System of Accounts and as used in accordance with Good Utility Practice.

As used herein, the term "functionalization" shall mean the assignment or allocation of Authority's costs to and between such functional classifica-tions.

I. OPERATION AND MAINTENANCE EXPENSES A. Production 0&M Expenses 1.. Feel Expenses - shall be assigned to the Production Energy component.

2. Purchased Power Expenses shall be functionalized into Pro-duction Demand and Production Energy components as the basis of the then current rates and charges under which such power is to be purchased by Authority.

3. Other Production D&M Expenses - 65% of such expenses shall be assigned to the Production Demand function and the re-

! mainder to the Production Energy Component; provided, how-l ever, this functionalization shall be subject to refinement ,

as the result of more detailed analyses or studies at such '

time as the Authority determines, pursuant to such studies, that such functionalization is no longer appropriate.

B.< Transmission 0&M Expenses shall be assigned to the Transmission function.

C. Distribution 0&M Expenses shall be assigned to the Distribution function.

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- EXHIBIT I i l

APPENDIX A D. Customer Accounting Expenses shall be assigned to the Customer 1

Accounting function.

E. Customer Service and Informational Expenses shall be assigned to the Customer Service function.

F. Sales Expenses shall be assigned to the Customer Service func-tion.

G. Administrative and General Expenses shall be allocated to func-tional classifications in proportion to the Wages and Salaries included in Operation and Maintenance Expenses other than Admin-istrative and General Expenses assigned or allocated to such functional classifications in the manners hereinabove described; provided, however, to the extent that the test-year projections of such Operation and Maintenance Expenses are not in sufficient detail to so identify such Wages and Salaries, then historical ratios of such Wages and Salaries may be used as the basis for this functionalization.

II. Sums in Lieu of Taxes -

A. Payments to Municipalities of franchise fees shall be assigned to the Distribution function.

All other payments to governmental agencies shall be assigned to the Production Demand function. The amount of Payments to the State of South Carolina included in any test-year Cost of Service study shall not exceed the lesser of the amount included in the test year as to the Payment to the State or 10% of the balance projected in that test year's line item entitled " Balance Available for Payment to the State, Renewals, Replacements, Capital Additions to Plant and for Other Lawful Purpcses," or items similar thereto; provided, however, that all items included in that line item are related to the generatioq, transmission or distribution of electric power and energy and pro-vided, further, that no additional reserve contingency items or similar reservations of revenues that are not as of the date of this Agreement included in " Balance Available for Payments to the State,  !

Rene'aals, Replacements, Caoital Additions to Plant and for other )

Lawful Purposes," shall be included in this item in determining the  ;

cost of service or rates to be charged.

l III. Debt Services and Lease Payments 1 Interest expense and principal paid on debt (collectively, " Debt Service") shall first be allocated to the plant classifications of Produc-tion, Transmission, Distribution, and General, as reflected in the Unifonn System of Accounts, on the basis of the application or utilization of the proceeds of such debt. Lease Payments shall first be allocated to such plant classifications on the basis of the utilization and classification of the corresponding leased facilities so that payments for the lease of facilities which are recordable as Production Plant facilities, Trans-

. mission Plant facilities, Dittribution Plant facilities, and General Plant facilities shall be classified accordingly.

EXHIBIT I APPENDIX A Debt Service and Lease Payments thus classified as Production, Transmission, and Distribution Plant-related shall be assigned to the Production Demand, Transmission, and Distribution functional classifi-

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cations, respectively. The Debt Service and Lease Payments classified as General Plant-related shall be functionalized in proportion to the functionalization of Administra.ive and General Expenses as described hereinabove.

IV. Working Capital Allowance An allowance to provide to Authority additional working capital required on a year-to-year basis shall be included in the ccst of service. This allowance is formulated to allow Authority to increase its working capital annually in an amount equal to one-eighth of the increase in its annual Operation and Maintenance Expenses other than Purchased Power Expense, Nuclear Fuel Expense, and Lease Payments, if any, during the test period over the immediately preceding 12-month period. This Working Capital Allowance shall be allocated to function-al classifications on the same basis as the corresponding O&M.

V. Other Income and Revenues Miscellaneous Other Income and Revenues received by Authority other than for Sales of Electricity shall be functionalized and cred-ited to each functional classification so as to reflect the functional classifications of the activities giving rise to such Income and Reve-nues.

VI. Allowance for Capital Improvements Authority shall be entitled to include in the cost of service an allowance for transfers to Authority's Capital Improvement Fund, which allowance shall not in total exceed the greater of (i) eight and one-half percent (8.5%) of Authority's Operating Revenues and other Income or (ii) the percentage of the total Debt Service included in such cost of service study required to matntain the level of Debt Service Cover-age referenced below.

VII. , Debt Service Coverage Notwithstanding any other provisions of this Agreement, should the Authority's five-year projections disclose that its debt service coverage will be during one or more years of such five-year period, less than that required to maintain Authority's present (July 1,1980)

Al and A+ Bond Rating, the Authority may increase Central's Allowance for Capital Improvements sufficient to maintain the required debt service coverage in each such year; provided, however that such in-crease shall not exceed the aggregate average Allowance for Capital Improvements (expressed as a percentage of Debt Service charges) in-cluded in the Cost of Service Study from which the Authority's other

! rates were developed, excluding from such limitation, however, certain l

Authority contracts in existence as of the effective date of this l

Agreement wherein the Allowance for Capital Improvements may not be ex-ceeded.

j A debt service coverage of 1.75 is presently (July 1,1980) be-lieved required to maintain a Bond Rating of Al and A+. If the required level of debt service coverage is found to change in the future the CIF referenced above shall be altered accordingly.

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i EXHIBIT 1I APPENDIX A Schedule A Reserve Capacity Price for Each Contract Year Line No. Description Amount Notes and Refe,*ences

1. Total Production Fixed Costs $ C.O.S. Study

2. Aggregate Monthly Installed kW Schedule C, Line 14 Capacity Column (c)

3. Unreserted Capacity Rate $/kW Line 1 i Line 2

4. Reserve Capacity Price $/kW Line 3 Schedule B Fim Capacity Price for Each Contract Period Line No. Description Amount Notes and References

1. Unreserved Capacity Rate $/kW Schedule A, Line 3

2. Territorial Reserve Margin  %

3. Fim Capacity Price $/kW Line 1 x [1.00 + (Line 2+100)]

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.x l "HIBIT II APPENDIX A l

Schedule C Projected Monthly Installed Capacity Line Existing Additions Total No. Month (MW) (MW) (MW)

(a) (b) (c)

1. July

2. August

3. September

4. October -

5. November

6. December

7. January

8. February

9. March

10. April

11. May

12. June

13. Aggregate Monthly Installed Capacity (MW's)

14. Aggregate Monthly Installed Capacity (KW's)

(Line 13 X 1000)

EXHIBIT III APPENDIX A d

Production Energy Charges Production Projected Variable Variable Costs

• Net Generation D&M Rate (3) (KWH) (Mills)

(a) (b) (c)

Generating Resources:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Total Resource Costs Other Variable Costs Total Production Energy Charge Rate

Reference:

1. Columns (a) and (b) data obtained from Cost of Service Study.

2. Column (c) = Column (a) 4 Column (b).

• Excluding Fuel.

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EXHIBIT IV APPENDIX A RESOURCE LIST AND ENERGY ACCOUNTING APPLICATION Sample - Hour Energy Accounting Diagrams NOTE: Diagram to be added.

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EXHfBIT TV 'I

. APPENDIX A RESOURCE LIST AND ENERGY ACCOUNTING APPLICATION Descriptive Application Of Sample - Hour Accounting Diagram NOTE: Diagram to be added.

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, APPENDIX B 4

PROVISIONS RELATING TO TRANSMISSION SERVICE ARTICLE I. DESCRIPTION OF SERVICE A. CHARACTER OF SERVICE The service provided hereunder (" Transmission Service") shall be the transmission of electric power and energy over Authority's transmission system from (1) the high-voltage bus bars of the various generating station substations of Authority, (2) Authority's side of points of interconnection with other utility systems, and (3) points of receipt by Authority on its transmission system of electric power and energy from Central-owned generating facilities or electric power and energy otherwise delivered by Central to Authority for Trans-mission Service hereunder, to (a) existing Delivery Points of Central's Members and (b) such other Delivery Points as may be established on the combined Author-ity-Central transmission system pursuant to the Coordination Agreement.

All electric power and energy delivered hereunder shall be alternating current, three-phase, unregulated, ac a nominal frequency of approximately 60 Hertz andPoint.

Delivery at a nominal standard voltage generally available in the area of each B. APPLICABILITY This Appendix shall be applicable to all electric power and energy Coordinationto transmitted Central and Central's Members, as such Members are defined in the Agreement.

C. AVAILABILITY Transmission Service hereunder is available throughout the service

area referenced in the Coordination Agreement at the existing Delivery Points of Central's Members, at the existing points of interconnection between Authority's and Central's transmission systems, and at such future points of interconnection and such future Delivery Points to which the Parties may agree in accordance with the Coordination Agreement.

APPENDIX B ARTICLE II. GENERAL TERMS AND CONDITIONS l

A. BILLING AND PAYMENT Monthly Billing Statements for Transmission Service hereunder shall be l prepared as hereinafter provided and rendered monthly to Central by Authority. l Payment by Central of amounts due in accordance with such Monthly Billing State-ments shall be made pursuant to the terms, conditions, and provisions of the Coordination Agreement. '

B. ESTIMATED AND ADJUSTED BILLINGS In preparing Monthly Billing Statements for services rendered, the detennination of Transmission Demand Charges pursuant to Article III, Section A, herein shall be predicated initially on the basis of the Parties' projections of the Annual Territorial Peak Demand for the then current Contract Year and each Parties' contribution thereto, and these projections shall be used as a basis for billing until actual Annual Territorial Peak Demand data becomes available.

When actual Annual Territorial Peak Demand data becomes available for the con-tract year, the Demand Charges hereunder shall be recalculated to reflect such actual data. A special bill shall be rendered to Central, as soon as practica-ble, reflecting the aggregate difference between the estimated bills previously rendered to Central and the recalculated bills based upon the actual contract year Annual Territorial Peak Demand data. As between Authority and Central, whichever Party cwes the other as a result of such recalculation shall make payment (s) to the other as follows: the paying Party may elect to spread the total amount owed in equal installments over a number of months not to exceed six (6) nor to extend beyond the period Central takes service hereunder; pro-vided, however, the amount of each such installment except the last shall not be less than One Hundred Thousand Dollars ($100,000). Such payments may be re-flected as additional charges or credit to succeeding Monthly Billi".9 State-ments.

C. ACCESS FOR AUTHORITY EMPLOYEES Authority shall have the right and privilege to enter the premises of Central and Central's Members at all reasonable times for the purposes of read-ing meters, inspecting or repairing apparatus used in connection with service hereunder, removing Authority's property or for any other purposes to carry on the work of Authority in connection with the delivery of power and energy here-l under, and to do all things necessary and expedient in the proper operation of Authority's system. In exercising such right anc' privilege, Authority shall assume all liability for damage or personal injury caused by negligence of l

Authority.

D. CONTINUITY OF SERVICE Authority shall exercise due care and diligence to provide Transmis-sion Service hereunder free from interruption; provided, however, the Authority shall not be responsible for any failure to provide such service, nor for inter-ruption, reversal, or abnonnal voltage of the supply, if such failure, inter-

! ruption, reversal, or abnormal voltage is without negligence on Authority's part. Whenever the integrity of Authority's system or the supply of electricity is threatened by conditions on Authority's systec, on Central's system or that of Central's Members, or on the systems with which Authority or Central are l l APPENDIX B directly or indirectly interconnected, or whenever it is necessary or desirable to aid in the restoration of service, Authority may, in confomance with Good l

Utility Practice, curtail or interrupt electric service or reduce voltage to some or all of Central's Members and such curtailment, interruption, or reduc-tion shall not constitute negligence by Authority.

E. LIABILITY Central expressly agrees to indemnify and save hamiess and defend Authority against all claims, demands, costs or expense for loss, damage, or injury to persons or property in any manner directly or indirectly connected with or growing out of the generation, transmission, or distribution of electric energy on Central's side (or that of a Member of Central) of any Delivery Point, unless such claim or demand shall arise out of or result from negligence or willful misconduct of Authority, its agents, servants, or employees.

F. OEFINITIONS .

Except as specifically provided to the contrary, all terms used herein shall be as defined in tuch Coordination Agreement and the other Appendices thereto.

" Coordination Agreement" as used herein shall be the " Power System Coordination and Integration Agreement" between South Carolina Public Service Authority and Central Electric Power Cooperative, Inc., to which this Appendix B is attached and made a part of.

For purposes of the Cost of Service Study referenced in Exhibit II of Appendix A of the Coordination Agreement the term " Wholesale Classification" refers to those classifications to which " sales for resale" are made by Authori-ty:

namely; Central, Members of Central, and Municipals. " Retail Classifica-tion" refers to those classifications to which " sales to the ultimate user" are made by Authority: namely; the Authority's Commercial, Industrial, the Mili-tary, Street Lighting, and other miscellaneous retail customers.

G. OTHER Additionally, all service provided hereunder shall be in accordance with and pursuant to the provisions of the Coordination Agreement.

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APPENDIX B ARTICLE III. CHARGES FCR TRANSMISSION SERVICE A. MONTHLY BILLING STATEMENT Each Monthly Billing Statement for Transmission Service hereunder shall include (1) Transmission Demand Charges and (2) Delivery Service Charges, both as determined in the manner hereinafter set forth.

B. TRANSMISSION DEMAND CHARGES Transmission Demand Charges in eaco month shall be determined as (1)

Central's Annual Coincident Peak Demand less the SEPA capacity allotment of Central's Members, as adjusted for losses, for the then current Contract Year, as defined in Appendix A of the Coordination Agreement multiplied by (2) Author-ity's Transmission Service Demand Charge, as determined in the manner set forth hereinafter. ,

Pursuant to the aforementioned Appendix A nnd Article V Section D of the Coordination Agreement, prior to the beginning of each Contract Year, Au-th9rity shall prepare or have prepared a Cost of Service study to determine its projected tne Annual following Revenue Requirements as functionalized or classified as among classifications:

(i) Production Denand Costs (ii) Production Energy Costs (iii) Transmission Costs (iv) Distribution Costs (v) Customer Accounting Costs (vi) Customer Information and Sales Costs (vii) Other Costs From such Cost of Service Study, Authority's Monthly Transmission Service Demand Charge, in dollars per kilowatt, will be determined as one-twelfth of the quotient obtained by dividing the total Annual Transmission Costs deter-mined pursuant to such Cost of Service Study, by the then projected Annual Territorial Peak Demand, as such Annual Territorial Peak Demand, less the SEPA capacity allotments of Central's Members and other Authority Customers, as adjusted for losses, is defined pursuant to the aforementioned Appendix A of the Coordination Agreement. Such Monthly Transmission Service Demand Charge, in dollars per kilowatt, shall apply throughout the Contract Year.

C. DELIVERY SERVICE CHARGES From the aforementioned Cost of Service Study, the Authority shall detennine those components of the cost classifications of (1) Distribution Costs, (2) Customer Accounting Costs, (3) Customer Information and Sales Costs, and (4) Other Costs which are directly associated with service to Centrt.? and Central's Members and delivery of power thereto or which are reasonably allo-cable to such service and delivery. Such determinations shall be made in ac-cordance with the provisions of Exhibit I of the aforementioned Appendix A, and the Delivery Service Charges for each month sha'l be one-twelfth of the aggre-gate sum of such compor.ents so as igned or allocated to Central.

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APPENDIX C PROVISIONS RELATING TRANSMISSION OPERATION AND MAINTENANCE ARTICLE I. GENERAL l

A. COORDINATION AGREEMENT r This Appendix is attached to and is a part of the " Power System Coor-dination and Integration Agreement" between South Carolina Public Service Au-thority and Central Electric Power Cooperative, Inc., hereinafter referred to as the " Coordination Agreement."

Except as specifically provided herein, all provisions of this Appen-dix are subject to the qualifications, terms and conditions, and other provi-sions and Appendices of such Coordination Agreement, and all terms used herein, except as specifically provided otherwise, shall be as defined in such Coordina-tion Agreement.

B. TRANSMISSION. OPERATION. AND MAINTENANCE Subject to and in accordance with the provisions hereinafter set forth, Authority shall manage, operate, and maintain Designated Transmission Facilities of Central, as such Designated Transmission Facilities are defined hereinafter.

C. DESIGNATED TRANSMISSION FACILITIES Designated Transmission Facilities shall be those transmission facili-ties owned by Central which Central desires Authority to operate, and maintain in accordance herewith.

Central will furnish, install, and own at its sole expense and cost, all lands and transmission line equipment and shall have such lands and equip-ment in condition acceptable to Authority before Authority will commence ser-vice under this Appendix C of the Coordination Agreement.

No transmission facilities of Central shall be Designated Transmission Facilities if (1) such facilities are not owned by Central, or (2) such facili-ties are leased by Central to any other party, or (3) such facilities are lo-cated outside the State of South Carolina, or (4) such facilities are substan-a tially different in kind or nature from the transmission facilities of Authort-ty.

D. NOTICE The operation, and maintenance of any Designated Transmission Facili-ties shall be subject to timely written notice of Central's desire for facili-ties to be so operated and maintained in accordance herewith. For the purposes of this Appendix, " timely written notice" shall be written notice received by Authority not less than one full Contract Year prior to the time such operation, and maintenance is desired by Central. Such notice shall include plans and .

specifications of said facilities for review and comment by Authority.

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APPENDIX C Notwithstanding any other provision hereof or of the Coordination Agreement, Authority shall have no responsibility with respect to the operation, or maintenance of any transmission facility of Central which is under construc-tion or otherwise prior to the time such facility is energized or placed into service for tha purposes of transmitting electrical power and energy on a con-tinuous basis consistent with Good Utility Practice.

Central or Authority may withdraw Designated Transmission Facilities from the operation, and maintenance of Authority hereunder upon five (5) years written notice.

E. LIABILITY Central expressly agrees to indemnify and save harmless and defend the Authority against all claims, demands, costs or expense for loss, damage or injury to persons or property in any manner directly or indirectly connected with or growing out of, the operation and maintenance of Central-owned transmis-sion lines unless such claim or demand shall arise out of or result from the negligence or willful misconduct of the Authority, its agents, servants or employees.

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APPENDIX C ARTICLE II. OPERATION OF DESIGNATED TRANSMISSION FACILITIES Authority shall have the sole authority to operate all Designated Transmission Facilities and Central hereby appoints Authority as Central's sole agent for all purposes o,f operation of such Designated Transmission Facilities.

Authority shall operate Designated Transmission Facilities in accord-ance with Good Utility Practice.

Authority shall make no adverse distinction between Designated Transmiss Facilities hereunder and Authority's own transmission facilities.

will use its reasonable best efforts to comply with all applicable law andAuthority governmental regulations with respect to such operation, Authority shall operate Designated Transmission Facilities in accord-ance with the same standards, procedures, and methods used by Authority from time to time with respect to Authority's own transmission facilities; unless however, Central requires more rigorous standards or procedures. In the case Central requires more rigorous standards or procedures than those then currently used by Authority with respect to Authority's own transmission facilities, Central shall be responsible for any additional costs associated therewith in addition to any other cost responsibility payments by Central hereunder.

Authority will provide Central any information or data .in such fom as such infomation or data is routinely available to Authority. If Central re-quests and Authority provides any additional infomation or data, Central shall be responsible for all costs incurred by Authority in providing such additional infomation or data, and such responsibility shall be in addition to any other cost responsibilities of or payments by Central hereunder.

i APPENDIX C ARTICLE III. MAINTENANCE OF DESIGNATED TRANSMISSION FACILITIES Authority shall have the sole authority to maintain all Designated Transmission Facilities and Central hereby appoints Authority as Central's sole agent for all purpose.s o,f maintaining such Designated Transmission Facilities.

Authority shall maintain Designated Transmission Facilities in accord-ance with Good Utility Practices, and in the maintenance of transmission facili-ties, Authority shall make no adverse distinction between Designated Transmis-sion Facilities and Authority's own transmission facilities.

Authority shall maintain Designated Transmission Facilities in accord-ance with the same standards, procedures, and methods used by Authority from time to time with respect to the maintenance of Authority's own transmission facilities; unless however, Central requires more rigorous standards or proce-dures.

those then currently used by Authority with respect to Authority s o mission facilities, Central shall be responsible for any additional costs asso-ciated therewith in addition to any other cost responsibility payments by Cen-tral hereunder.

Authority will provide Centra' any infomation or data in such fom as such infomation or data is routinely available to Authority. If Central re-quests and Authority provides any additional infomation or data, Central shall be responsible for all costs incurred by Authority in providing such additional infomation or data, and such responsibility shall be in addition to any other cost responsibilities of or payments by Central hereunder.

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APPENDlX C ARTICLE IV. CAPITAL ADDITIONS. RETIREMENTS AND REPLACEMENTS A. RETIREMENTS AND REPLACEMENTS Whether expenditures for retirements and replacements of Designated Transmission facilities are capital related shall be detennined by the Authority in according with the Unifonn System of Accounts and Authority's own then cur-rent accounting standards and criteria.

salvage value of retired or replaced facilities. Authority shall credit Central for the B. CAPITAL ADDITIONS No construction or repairs which alters or changes any part of the C2signated Transmission facilities, except for minor emergency repairs, shall be permitted without prior approval of Central. Central reserves the right to make or cause to be made any and all capitf additions or changes thereto.

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APPENDIX C ARTICLE V. INVENTORY OF SPARE PARTS AND EQUIPMENT Authority shall maintain an inventory of spare parts, miscellaneous  !

material, capital equipment, and other equipment necessary in the opinion of Authority to discharge Authority's responsibilities hereunder with respect to management, operation, and maintenance of Authority's transmission facilit.es and Designated Transmission Facilities.

Authority shall accept into such inventory all materials associated with or retired from Designated Transmission Facilities and will credit Central for the value of materials so received. Such value shall be determined in the same manner in which Authority determines the value of materials received into such inventory from or for Authoritv's own transmission facilities.

Notwithstanding any other provision of this Appendix or the Coordina-tion Agreement, if Central constructs or otherwise acquires and owns any trans-mission facilities requiring parts, or materials, or equipment different from those required by Authority for Authority's own transmission facilities, Author-ity shall have no obligation to maintain an inventory of such different parts, miterials, or equipment, except at Central's sole expense.

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, APPENDIX C ARTICLE VI. PAYMENTS A. GENERAL It is the desire and intent of the Parties hereto that Central reim-1 burse Authority as precisely as possible for all actual costs incurred by Au-l thority in the operation, and maintenance of Designated Transmission Facili-l ties. It is realized by the Parties, however, that the specific identification of all individual costs would be impractical, and, in consideration thereof, the Parties have agreed to the methods of fairly allocating and assigning costs as between the Parties that are set forth below. To the extent, however, that such methods fail to satisfy this intent of the Parties, or at such times as other fair and reasonable methods for more accurately identifying such actual costs -

become practical, in the opinion of both Parties, then the Parties hereto shall negotiate in good faith to modify the allocation methods herein in keeping with such intent.

B. PAYMENT FOR OPERATION AND MAINTENANCE OF DESIGNATED TRANSMISSION FACILITIES Central shall pay Authority each month one-twelfth of Central's pro-portionate share of tne aggregate annual Costs of Operation and Maintenance of Designated Transmission Facilities hereunder in the ratio that Central's capital investment in such Designated Transmission Facilities bears to the aggregate sum of the Authority's capital investment in Authority's own transmission facilities and Central's capital investment in such Designated Transmission Facilities.

Such Costs of Operation and Maintenance shall consist of:

1. Transmission Operation and Maintenance Expenses - all costs in-curred by Authority in the operation and maintenance of transmis-sion facilities which are chargeable to Accounts 560-573 of the Unifom System of Accounts excluding, however, Accounts 565 -

Transmission of Elect-icity by Others, and Accounts 567 - Rents.

2. Administrative and General Costs - a proportionate share of Authority's costs which are chargeable in Administrative and General Expenses in Accounts 920-931 of the Unifom System of Accounts. Such proportionate share, to be allocated to Central, shall be in the ratio that the Wages and Salaries Costs included in the total Transmission Operation and Maintenance Expenses defined in 1 above bear to the total Wages and Salaries Costs incurred by Authority and chargeable as Operation and i4aintenance Expenses under the Unifom System of Accounts, excluding those Wages and Salaries Costs chargeable as Administrative and General Expenses.

Each Monthly Payment by Central for Operation and Maintenance of Designated Transmission Facilities by Authority shall be based upon Authority's then current Operating Budget and the Parties' then current projections of the Parties' respective capital investment in transmission facilities. As soon as practicable after the end of each month, as actual costs are recorded and avail-able, Authority shall prepare a revised Monthly Billing Statement reflecting such actual costs and capital investment. The aggregate difference between the estimated Monthly Billing Statement previously rendered to and paid by Central

APPENDIX C shall be reflected as an additional charge or credit, as appropriate, on the estimated Monthly Billing Statement in the next succeeding month.

C. PAYMENT FOR CAPITAL ADDITIONS, RETIREMENTS. AND REPLACEMENTS l Central shall reimburse Authority for Authority's costs of Capital, Additions, Retirements, and Replacements made to Desinated Transmission Facili-ties. Such costs shall include the original costs of necessary parts, materi-als, and equipment, and other applicable costs associated therewith including but not limited to direct labor, outside services, allocable overheads and stores expenses, all as detemined in the same manner in which Authority deter-mines and assigns such costs to Capital Additions, Retirerr;1ts, and Replacements made to its own facilities.

D. PAYMENT FOR MAINTAINING SPARE PARTS AND EQUIPMENT INVENTORY Central shall pay Authority monthly an Inventory Carrying Charge in consideration for Authority maintaining an inventory of spare parts, materials, and equipment as hereinabove described. Such Inventory Carrying Charge shall be detennined by multiplying (1) one-twelfth of Authority's then current Fixed Charge Rate by (2) Central's proportionate share of Authority's total dollar investment balance in spare transmission parts, materials, and equipment, which such proportionate share shall be in the ratio that Central's capital investment in Designated Transmission Facilities bears to the angregate sum of Authority's capital investment in transmission facilities and Central's capital investment in Designated Transmission Facilities. Authority's Fixed Charge Rate shall be the net effective annual interest rate of Authority's then most recent long-tenn Bond Issue.

E. MONTHLY BILLING STATEMENTS For services rendered hereunder, Authority shall render a Monthly Billing Statement to Central about the first of each month setting forth the costs, as hereinabove described, for which Central shall reimburse Authority hereunder. Such Monthly Billing Statement shall reflect (1) Charges for Opera-tion and Maintenance as estimated to be incurred by Authority during such month, (2) any charges or credits necessary to correct to actual the previous month's estimate of such Charges for Operation and Maintenance which was included in the monthly Billing Statement for the previous month, (3) Inventory Carrying Charges for the second preceeding month, and (4) the costs of any Capital Additions, I Replacements, or Retirements made during the preceeding month, all such costs detennined pursuant to the foregoing. Central shall pay such Monthly Billing Statement in accordance with the billing and payment provisions of the Coordina-tion Agreement.

End of Coordination Agreement and its Several Appendices and Exhibits l -

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GENERATING STATION OWNERSHIP & OPERATING AGREEMENT I

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9 GENERATING STATION OWNERSHIP AND OPERATING AGREEMENT BETWEEN SOUTH CAROLINA PUBLIC SERVICE AUTHORITY AND CENTRAL ELECTRIC POWER COOPERATIVE INC.

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l GENERATING STATION OWNERSHIP AND OPERATING AGREEMENT j BETWEEN l SOUTH CAROLINA PUBLIC SERVICE AUTHORITY AND i

CENTRAL ELECTRIC POWER COOPERATIVE, INC.

This Generating Station Ownership and Operating Agreement (hereinafter referred to as the " Agreement") entered into on the day of , 1980, by and between the South Carolina Public Service Authority (hereinafter referred to as " Authority"), an Agency of the State of South Carolina, and Central Electric Power Cooperative, Inc., (herein-after referred to as " Central"), a cooperative corporation organized and exist-ing ur. der the laws of the State of South Carolina, witnesseth that, RECITALS .

Authority owns a site in the vicinity of South Carolina and is proceeding with all steps, actions and activities (including purchasing and procurement), incident to and required for the design, engineering, construction and subsequent operation by Authority of a -fired steam-electric generating station to be known as the Generating Station and hereinafter defined as the " Project" having a net capability of approximately MW and with the first u.71t presently expected to be placed in commercial operation during the quarter of calendar year , with the remaining units to follow as the combined Authority-Central load requirements dictate; and Authority has entered into certain contracts for planning, engineering and construction of the Project; and Central has determined that percent ( ) of the Project Output will be required on or about the expected Dates of Commercial Operation of the respective units to serve its growing power and energy requirements; and Authority has determined that the disposition of percent ( )  !

of the Project Output to Central is desirable; and  !

Authority and Central have determined that it is in their best interests and in the best interests of the State of South Carolina for them to own the  ;

Project excepting the land thereon as tenants in common and for Authority to l proceed with Project design, construction, operation and maintenance for itself ,

a and as agent for Central pursuant to this Agreement. )

l NOW, THEREFORE, the Parties mutually agree as follows:

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1. DEFINITIONS 1.01 " Costs of tonstruction" means all costs allocable to the acqui-sition, design, engineering, and construction of the Project, obtaining neces-  ;

sary permits and making it ready for operation, including the cost of initial fuel supply and allowance f9r funds used during construction. Credits relating to such costs, including insurance proceeds, shall be applied to Costs of Con-struction when received.

1.02 " Cost of Operation" means all costs applicable or allocable to the operation and maintenance of the Project, fuel and rights relating thereto, elective capital additions made pursuant to Section 20, and, subsequent to the Date of Commercial Operation, repairs and renewals and replacements necessary to assure design capability, betterments, modifications and additions in keeping with Good Utility Practice and when in the reasonable judgment of Authority necessary to obtain the approval of or to comply with the requirements of gov-ernmental agencies have jurisdiction. Credits relating to such costs, includ-ing insurance proceeds, shall be applied to Costs of Operation when received.

Also included are Authority Administration and General Costs, Sums in Lieu of Taxes, Payment to the State, Capital Improvement Funds, Working Capital Require-ments, rental of the Project real estate, debt service on railroad cars and related equipment, and other related costs allocable to the Project.

1.03 " Construction Disbursing Account" means tne separate account established by Central for the purpose of paying Central's Ownership Share of Costs of Construction.

1.04 "Date of Commercial Operation" means the date fixed by Authority

.., and agreed to by Central as the point in time when a Generating Unit is ready to be operated on a commercial basis at an output as detemined by the Central-Authority Operating Committee to be in accordance with Good Utility Practice.

1.05 " Generating Station" means the steam generator, the turbine-generator and related structures and facilities, including the cooling facili-ties, emission control facilities, Project Substation, including facilities for switching and transformation, together with additions and bettements thereto and replacements thereof, and appropriate equipment and spare parts.

1.06 tod Utility Practice" at a particular time means any of the practices, methods and acts, which in the exercise of reasonable judgment in the light of the facts (including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electrical utility indus-try prior thereto) known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consis-tent with reliability, safety and expedition. Good Utility Practice includes due regard for manufacturer's warranties and shall apply not only to functional parts of the Project, but also to appropriate structures, landscaping, painting, signs, lighting and other facilities. Good Utility Practice is not to be limit-ed to the optimum practice, method or act to the exclusion of all others, but rather to be a number of possible practices, metFods or acts. In evaluating ject Consultant shall take into account the fact that the Authority is an Agency of the State of South Carolina with prescribed statutory powers, duties and responsibilities.

- 1.07 " Labor Costs" means all payroll, related employee benefit costs I and employee expenses of all employees of the Parties chargeable to the Project. I 1.08 " Matter" means any subject, or any aspect thereof, arising out of or relating to the interpretation or perfomance of this Agreement, including any proposal that may be made by either of the Parties.

1.09 " Output" means that net capacity and energy from the Generating Unit or Station which at any time can be made available at the high voltage teminals of the Project Substation after station use and losses.

1.10 "0wnership Share" of a Party means the fractional share speci-fied in Paragraph 2.01 hereof, or as the same may be adjusted pursuant to Sec-tions 18 and 19.

1.11 " Plant Real Property" means the real property awned by Authority as a site for and necessary and useful for the construction, operation and maintenance of the Project. A description of the Plant Real Property and state-ment of the estimated value thereof is attached as Exhibit I, and made a part hereof. ,

1.12 " Coordination Agreement" means the Power System Coordination and Integration Agreement between the Parties.

1.13 " Project" means the (a) Generating Station, (b) all licenses, pemits, rights and approvals necessary or convenient for construction, opera-tion, maintenance of the Project, (c) roads, railroad extension, railroad spurs, docks, parking lots, fencing and similar facilities, and (d) all things acquired by the Parties for use in construction, operation, maintenance and repair of the Project. A description of the Project and a statement of the estimated cost thereof is attached as Exhibit II, and made a part hereof.

1.14 " Project Consultant" means an individual or firm of national i reputation and recognized expertise in the field or subject referred to it, the J

appointment of which is mutually agreed to by the Parties, retained for the purpose of resolving differences referred to it. A different Project Consult-ant may be retained for each Matter referred.

1.15 " Project Construction-Engineer" means

, retained by Authority for the design and engineering and construction supervision of unit one of the Project under the direction of j - Authority. The Project Construction-Engineer may or may not be i i for units of the Project.

1.16 " Project Substation" means lines and switching facilities con-necting the Generating Units to the 230 KV substation, line and switching facilities for connecting the startup and emergency transfomer for the Generating Units to the 230 KV substation, 230 KV buses, insulat:rs, struc-tures and foundations, bus tie switching facilities, 230 KV bus po'.ential and I current transfomers including interconnection metering equignent, relays and l

meters and control devices for these bus facilities installed and made opera-tional with the Generating Units.

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1.17 "Unifom System of Accounts" means the Federal Energy Regula-tory Commission Unifom System of Accounts prescribed for Class A Public Utili-ties and Licensees in effect on January 1,1980, as the same may be amended from l time to time. J

2. 0WNERSHIP. RIGHTS AND OBLIGATIONS 2.01 The Parties shell have title to the ' 7ect except the real estate as tenants in common and shall, as co-tenants -a m an undivided interest therein and, subject to the tems of this Agreement, own the Project, have the i

! related rights and obligations, including payment therefor, and be entitled to the Output as follows:

Party Ownership Share Authority Central 2.02 Subject to Paragraphs 2.07 and 5.01, the Parties shall promptly and with all due diligence, acting jointly or individually as may be appropri-ate, take all necessary actions and seek all regulatory approvals, licenses and permits necessary to carry out their obligations under this Agreement.

2.03 Authority shall within a reasonable time and upon receipt of any required regulatory approvals and from time to time, execute and deliver deeds, bills of sale and such other documents as may be necessary in addition to this Agreement to grant Central an easement over Project lands for the duration of the Project and to vest ownership in the Parties as set forth in Paragraph 2.01 above.

2.04 (a) The duties, obligations and liabilities of the Parties are intended to be several and not joint or collective, and neither Party shall be jointly or several;(liable for the acts, omissions or obligations of the other Party, except that Central shall be severally liable, in proportion to its Ownership Share of the Project, for the acts, omissions, or obligations per-fomed, omitted or inc jrred by Authority while acting as the agent of Central under the tems of this Agreement.

(b) No provis'on of this Agreement shall be construed to create an association, joint ventare, partnership, or impose a partnership duty, obligation or liability, on or wi:h regard to any of the Parties. Neither Party shall have a right or power to bind any other Party without its written consent, except as expressly provided in this Agreement. Each Party shall severally bear its Ownership Share of all obligations, including the supply of energy for station use when not generated by the Project, and shall severally bear its Ownership Share of liabilities relating to the Project as they arise.

2.05 Until such time as the Project, or any part thereof, as origi-nally constructed, reconstructed or added to, is no longer used or useful for the generation of electric power and energy, or until the end of the period pemitted by aoplicable law, whichever occurs first, the Parties waive the right to partition, ehether by partition in kind or sa ? and divisien of the proceeJs thereof, and agree that during said time they will not resort to any action at ,

law or equity to partition and further that for said time tlq waive the benefit of all laws that may now or hereafter authorize partition of the properties comprising the Project.

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2.06 Each Party and its designees shall have the right to go upon and into the Project at any time subject to insurance and industrial security and safety requirements and the necessity of efficient and safe construction and peration of the Project.

2.07 In order to provide unified management of the Project, Central authorizes and designates Authority, and Authority agrees to so act, as its agent to design, construct, operate and maintain the Project under the terms of this Agreement, and the Parties agree that Authority shall have sole possession and control of the Project for the Parties subject to the provisions of Para-graph 2.06, and shall have sole authority for the design, construction, opera-tion and maintenance of the Project in accordance with Good Utility Practice and in such manner as is required in the reasonable judgment of Authority to obtain the approval or comply with the requirements of regulatory agencies having jurisdiction. The Parties agree that such relationship shall not be changed except by the written consent of both Parties.

2.08 (a) In the design, construction, operation and maintenance of the Project, each Party shall act without compensation other than payment or reimbursement of costs and expenses as provided herein.

(b) Each Party releases the other Party, its agents and employees from any claim for loss or damage, including consequential loss or damage, arising out of the construction, operation, maintenance, reconstruction or repair of the Project due to negligence, but not any claim for loss or damage resulting from breach of this Agreement or for willful or wanton misconduct.

Authority acting for and on behalf of Central and itself, shall take timely and appropriate legal action to recover losses from damages resultirc from breach of any other contract relating to the Project, and shall promptly notify Central of any such breach and anticipated loss resulting therefrom.

Notwithstanding the foregoing, Authority and Central acting jointly may initiate and pursue any legal actions or proceedings, and enforce any legal or equitable rights or claims relating to or affecting the Project as and when it may be necessary, appropriate or prudent for them so to do.

(c) Any loss, cost, liability, damage and expense to the l Parties or either of them, other than damages to either Party resultino from loss of use and occupancy of the Project or any part thereof, arising out of the construction, operation, maintenance, reconstruction or repair of the Project or based upon injury to or death of persons or damage to or loss of Project property and property of others, to the extent not covered by collectible h surance, shall be charged to Costs of Operation or Costs of Construction, Weh-ever may be appropriate.

(d) Each Party to the extent obtainable sha' cause its insurers to waive any rights of subrogation against the other Party, its agents and employees, for losses, costs, damages or expenses, arising out of the con-struction, operation, maintenance, reconstruction or rerair of the Project.

3. PROJECT COORDINATION 3.01 At the time of the executiun of this Agreement the Parties shall each appoint by notice in writing to the other Party a representathe and

an alternate, who shall be employees of the Party making the appointments.

Changes in the representative or alternate shall be made by written notice to the other Party. Notice to an appointed representative or alternate shall be deemed to be notice to the Party represented by him.

3.02 Authority shall keep Central infonned of all significant Mat-ters with respect to licensing, design, construction, operation and maintenance of the Project (including plans, specifications, engineering studies, environ-mental reports, budgets and supporting data, staffing and maintenance programs and schedules) and, when practicable, shall furnish such infonnation in time for Central to submit comments and recommendations thereon before decisions are made, and shall confer with Central as and whenever needs arise. Authority shall give due consideration to comments and recommendations made by Central.

Authority shall furnish or make available any and all other information relating to any aspect of the Project upon request of Central.

3.03 Nothing contataed in this Section 3 shall in any manner dimin-ish the authority, possession and control of Authority as set forth in Paragraph 2.07.

4. RESOLUTION OF DISAGREEMENTS 4.01 If Authority and Central cannot agree on any Matter which under the terms of this Agreement requires mutual consent of the Parties, a Project Consultant will be appointed to settle the disagreement. In the absence of an agreement as to the selection of a Project Consultant, either Party may request the Chief Judge of the United States District Court for the District of South Carolina to appoint a Project Consultant.

4.02 The Project Consultant shall consider all written arguments and factual materials which have been submitted to it by the Parties within 30 days following its appointment, and as promtly as possible make a written determina-tion as to whether any Matter referred to it would or would not have been con-sistent with Good Utility Practice. If the Project Consultant determines that the Matter referred to it was not consistent with Good Utility Practice, it l shall at the same time recommend what would under the same circumstances have met such test.

4.03 Matters found by the Project Consultant to be consistent with Good Utility Practice shall become immediately effective and Central shall be

, obligated to ex send funds for its Ownership Share of the increased cost, if any.

l . Subject to Par graph 4.05, Matters found by the Project Consult 6nt to be incon- .

sistent with t.ood Utility Practice shall be modified to conform to recommenda-tions of the Project Consultant or as the Parties may otherwise agree, and shall become effective when so iaodified.

4.04 Authority shall have the right, but not the duty, to proceed with Matters which have been disapproved by Central; provided, however, if Authority takes such action on a disapproved Matter and if the detennination made by the Project Consultant is that such Matter was not consistent with Good Utility Practice, then Authority shall bear the aet increase in the Costs of Construction and Costs of Operation of such actiu to the extent it was incon-sistent with what the Project Consultant detennined would under such circum-stances have met s m h tests.

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i 4.05 Notwithstanding other provisions of this Section 4 whenever a Matter has been referred to the Project Consultant and Authority determines that the other position or positions would create an immediate danger to the safe j operation of the Project or when in the reasonable judgment of Authority neces- 1 sary to obtain the approval of or to comply with requirements of governmental agencies having jurisdiction, Authority may proceed in accordance with Authori-ty's position with respect to such Matters until such Matter has been resolved by the Project Consultant. Whenever the Project Consultant has recommended a course of action which the Authority detemines would create a danger to the safety of the Project or would violate regulatory requirements of any govern-mental agency having jurisdiction of the Project, Authority may nevertheless proceed in accordance with Authority's position subject to a suitable financial adjustment.

4.06 The cost of employing the Project Consultant shall be shared equally by the Parties.

5. CONSTRUCTION AND LICENSING 5.01 Authority, acting for itself and as agent for Central, shall take whatever action is necessary or apropriate to seek and obtain all licenses, pemits and other rights and regulatory approvals necessary to construction and operation of the Project.

5.02 Authority shall prosecute construction of the Project in accordance with Good Utility Practice and plans and specifications for the Project prepared or approved by the Project Construction-Engineer. Authority shall use its best efforts to achieve the Date of Commercial Operation for the first unit at during the quarter of calendar year but shall not be responsible for delays which are beyond its control, as provided for in Section 17, or for delays resulting from the regulatory process.

5.03 Authority shall, as a matter of normal practice, award separate contracts for readily separable parts of the work to the extent consistent with the construction of the Project at the least overall cost, high quality and the requirements of governmental agencies having jurisdiction. Construction con-tracts may be lump sum, unit price, and, whenever deemed prudent by Authority, may be negotiated, and may also contain incentive and liquidated damages claus-es. As a matter of policy, Authority shall request bids from qualified con-tractors and award contracts after appropriate evaluation and review to tb lowest evaluated bidder unless there are substantial reasons for deviating from that policy in a particular case. All bids, contracts and related documents shall be made available to Central as infomation; provided, however, that the award of any contract in excess of $500,000 and any change order which would increase a contract price by an a..tount in excess of $200,000 shall be subject to the approval of Central. Beginning in the calendar year in which this Agreement bect'es effective, the above dollar amount shall be increased or de-creased in direct relation to the annual National Consumer Price Index (or any successor index) published by the Bureau of Labor Statistics of the United States Department of Labor.

5.04 Any and all licenses, pemits, approvals, contracts, obliga-tions and commitments obtained, made and entered into or incurred by Authority  !

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prior to the effective date of this Agreement in connection with the acquisition and construction of the Project are hereby ratified and approved by Central. A list of licenses, pennits, approvals, contracts, obligations and commitments and the cmounts expended and committed therefor, prior to the effective date of this Agreement is attached hereto as Exhibit III and made a part hereof.

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6. REIMBURSEMENT FOR COSTS 6.01 Within ninety (90) days after the date of the execution of this i Agreement, Central shall establish a disbursing account from which payments  ;

are to be made on account of its Ownership Share of all Costs of Construction.  !

Authority shall prepare an initial statement reflecting an estimate of all l Costs of Constructi caid by Authority to the date of the establishment of such disbursing aci.ou..e. Central shall prcnptly pay into such disbursing ac-count its Ownership Share of the amount set forth on the initial . statement.

The initial statement shall include an amount for interest computed at the '

Morgan Guaranty Trust Company Prime Rate per annum on a 365-day basis on all payments for Costs of Construction made by Authority to the date of the ini-tial statement. Thereafter each Party shall pay when due its Ownership Share of Costs of Construction and Costs of Operation. '

6.02 Each Party shall pay to the other Party its Ownership Share of Costs of Construction expended for the benefit of the Project by such other Party after the effective date of this Agreement for, among other things: (a)

Labor Costs, (b) Other Costs of Construction including, without limiting the generality of the foregoing, equipment, insurance, licensing fees, materials, supplies, travel, construction power, and (c) administrative and general costs chargeable to the Project.

6.03 Each Party shall pay to the Other Party its Ownership Share of Costs of Operation expended for the benefit of the Project by such other Party after the effective date of this Agreement for, among other things: (a) Labor Costs, (b) other operating costs including, without limiting the generality of the foregoing, equipment, insurance, licensing fees, materials, supplies, and travel, (c) administrative and general costs chargeable to the Project, and (d) fuel purchases.

All net test energy generated by Unit prior to the date of commer-cial operation of such unit shall be integrated into Authority's system and sold by it. Central shall be credited for an amount equal to Central's ownership shara of the net test energy at the same price the Authority pays for such en-ergy.

7. CONSTRUCTION BUDGET 7.01 An initial budget of the amounts expended or expectet to be expended for specific items of Costs of Construction in each month during the period through and for each 6-mo2 h period thereafter to the completion of construction as detennined by Authority is at-tached hereto as Exhibit IV and is hereby approved.

7.02 By January 1 cf erh year until completion of construction, Authority shall provide Central an annual construction budget (subject to ap-proval by the Authority's board of Directors) supported by detail adequate for the purpose of comprehensive review, describing the itens of Costs of Construc- l tion and of the amounts expected to be expended therefor in each month during i the next 12-month period and in 6-month periods thereafter to the completion of '

construction. Central shall, within 30 days after receipt of such bi;dget, indicate its approval or disapproval of the budget or any part therTf and may submit to Authority any comments or recommandations it deems approp: 1 ate. .

Construction budgets shall be changed by Authority from time to time during a calendar year as necessary to reflect substantial changes in construction sched-ules, plans, specifications or costs, and when so changed shall be submitted similarly to Central and action to approve or disapprove shall be taken by Central within 15 days of receipt thereof. I l

8. CONSTRUCTION PAYMENTS  !

8.01 Not later than the fifth working day of each month Authority shall furnish Central an estimate of Costs of Construction expected to be paid during the following calendar month together with Authority's approximate sched-ule of payments of such cost, and will from time to time as appropriate advise l Central of any changes in such estimates or schedules.

8.02 Authority shall pay all Costs of Construction and prior to the close of business on each working day, shall notify Central of the total of such payments made that day and of any significant changes in Authority's schedule or estimate furnished pursuant to Paragraph 8.01. Not earlier than 12:00 noon of the next workday following such payments, Authority shall draft Central's Con-struction Disbursing Account for Central's Ownership Share of such payments subject to Paragraph 6.02. Authority shall furnish Central complete supporting data including accounts distribution as soon as practicable.

9. ?ERATION 9.01 Authority shall operate and maintain the Project in accordance with Good Utility Practice and in such manner as is required in the reasonable judgment of the Authority to obtain and maintain the approval of or to comply with the requirements of governmental agencies having jurisdiction.

9.02 Suoject to Paragraph 9.01 and to the provisions of Section 13, Authority shall operate and maintain the Project as if it were a disinterested party without regard to the benefits of the respective xnership of the Parties.

10. OPERATION BUDGETS 10.01 For purposes of this Section 10, Contract Year shall be the twelve-month period beginning July 1 and ending June 30 except that the first l Contract Year shall be the period beginning on the Date of Commercial Operation  ;

of the first unit at and ending the next succeeding June 30. )

i 10.02 At least two (2) months prior to the expected Date of Commer- )

cial Operation, Authority shall provide Central a budget of the Costs of Opera-tion, including administrative and general expenses relating to operation for each month from the expected Date of Nnmercial Operation to the end of the first Contract Year. Thereafter, on c a before June 1 of each year, Authority shall provide Central a similar operating budget for the next succeeding Con-tract Year.

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' Each operating budget shall be supported by detail adequate to allow Central's detailed review and shall show, among other things, staffing allocations and Authority services. Central shall indicate its approval or disapproval of the proposed operating budget or any part thereof within 30 days after receipt.

10.03 The effective operating budget shall be revised semi-annually and also shall be changed from time to time: (a) to include costs occasioned by an emergency. (b) to provide for repairs, renewals, replacements or additions necessary to achieve and maintain design capacity and energy capability and (c) to provide for expenditures which in the reasonable judgment of Authority are necessary to obtain the approval of or to comply with the requirements of gov-ernmental agencies having jurisdiction or an expenditure required by Section 18.

Promptly after the semi-annual revision or the occurrence of any of the above events and promptly after the occurrence of other circumstances requiring the expenditure of funds not contemplated in the effective operating budget, Author-ity shall provide a revised operating budget to Central. Costs incurred by Authority in the exercise of Good Utility Practice prior to the time a revised operating budget becomes effective shall be added as incurred to the amounts due under the operating budget. Central shall indicate its approval or disapproval of the revised operating budget or any part thereof within fifteen days after receipt.

11. OPERATION PAYMENTS 11.01 Authority agrees to make payments of all Costs of Operation and Central, upon notice, shall promptly reimburse Authority for Central's Ownership 3 hare of such costs subject to the provisions of Paragraph 6.02.

1 02 Not later than the next to the last working day of each month and at suc'. other times as is practicable Authority shall notify Central of any significar . changes in Costs of Operation expected to be paid in the following  ;

month. '

11.03 Authority will notify Central one (1) working day prior to anticipated payment of Costs of Operation and of the amount of me.ey required ,

to make such payment. Central will transfer to an operating disbursing account l in a bank mutually agreed upon sufficient monies to cover Central's Ownership i Share of such Costs of Operation. Authority shall furnish Central complete '

supporting data, including accounts distribution, as soon as practicable.

12. FUEL 12.01 A minimum of seventy (70) days supply of fuel r.dequate to will be the target stockpile for the station.

12.02 Fuel for the original stockpile and deliveries to maintain at least the above minimum stockpile level shall be acquired through long-tenn contracts to the extent possible and practical. As a matter of policy, Author-ity shall request bids from qualified suppliers and award long-tenn contracts l

and spot-market purchases, after appropriate evaluation and review, to the lowest evaluated bidder ur:eis there are substantial reasons for deviation from that policy in a partic':lar case.

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12.03 All bids, contracts, and related documents shall be made available to Central as infomation; provided, however, that the award of any contract for any period longer than one year shall be subject to review by Central's representative invited to participate with the Authority's staff committee which approves such contract awards.

12.04 From time to time purchases on the spot-market or transfers to the Cross Station from other generating stations may be used to supplement the amounts of fuel obtained under long-tens contracts. It may also be neces-sary to transfer fuel from the Station stockpile to the stock-pile of other Authority or Authority-Central owned generating station if Author-ity considers such transfers to be in the best interest of the system. Trans-fers of fuel to and from the Station will be valued at the Au-thority's adopted method of costing coal to all customers.

12.05 Authority shall make all payments of the cost of fuel pur-suant to the provisions of Paragraph 6.03 of this Agreement.

13. SCHEDULING OF PROJECT OUTPUT 13.01 Each Party shall be antitled to receive its Ownership Share of the Output of the Generating Station.

13.02 Authority shall be responsible for the scheduling and dis-patching of capacity and energy available from the Generating Station to give effect to the provisions of this Agrement and the most economical mix of avail-able resources, including economic dispatch purchases, which results in t%

lowest overall cost to meet system load requirements.

13.03 Authority with the concurrence of Central shall schedule Generating Station outages, other than emergency outages, and notify Central es to the time and duration thereof as far in advance as practicable. Notwith-standing the foregoing, Authority may shut the Generating Station down, reduce power or take other appropriate action which in the reasonable judgment of the Authority is necessary to obtain the approval of or comply with the require-ments of governmental agencies having jurisdiction, or to insure safety to per-sons or property.

14. DELIVERY OF PROJECT OUTPUT 14.01 The Parties shall equitably compensate each other for losses '

incurred in effecting the delivery of Project Output. Such losses shall be detemined pursuant to the Co' Mination Agreement.

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15. ACCOUNTING 15.01 Authority shall keep separate, complete and accurate account l of all receipts and expenditures of Costs of Construction and Costs of Opera-tion. Each of the Parties shall keep complete and accurate accounts of all costs incurred by it for which it is to be reimbursed as a Costs of Construc-tion or Costs of Operation as appropriate.

15.02 All accounts shall be kept in accordance with or so as to pemit conversion to the Unifom System of Accounts.

l The allocation of costs by Authority between Costs of Construction and Costs of Operation pursuant to th;s Agreement shall be binding on the Parties for pur-poses of this Agreement, but the manner in which accounts are kept pursuant to this Agreement is not intended to be deteminative of the manner in which they l are treated in the separate books of account of the Partien 15.03 Central shall have the right at any ressonable time to examine the separate books of account relating to the Project kept by Authority pur-suant to this Sectico 15 and to examine and copy all plans., specifications, bids and contracts relating to the Project. Each party shall have the right to examine the books of account and all supporting data and documents relating to e,:nounts for which the other Party is to be reimbursed. The measure of the acceptability of the amounts for which a Party is to be rein.oursed shall be Good  ;

Utility Practice. Either Party shall have the right to challenge any of the '

amounts for which the other Party has made payment, and if the Parties canNt agree on the amcants so challenged, the Matter shall be referred to a Project Consultant.

1S.04 Authority shall cause all accounts to be audited by a firm of independent Ctrtified Public Accountants of national reputation acceptable to both Parties and regulatory agencies at approximately annual intervals and when such accounts are closed. Copies of such audits shall be supplied to Central.

16. INSURANCE Authority shdl maintain in force, for the benefit of the Parties as their terest shall appear, as Costs of Construction or Costs of Ope.1 tion as appropriate, such insurance as Authority and Central may agree upon, but not less than as is nomally carried by electrical utilities in similar circum-stances to confonn to Good Utility Practice. Authority shall keep Central in-fomed as to the status of insurance in force and if it does so, Authority shall not be liable for any failure to insure or inadequacy of coverage. Central may request additional insurance to the extent available, and Authority shall pur-chase such requested insurance at the expense of Central. The proceeds from such requested insurance shall be disbursed as directd by Central. If addi-tional units or generating projects are proposed for the site of the Proje".,

Authority may cause the insurance on the Project to be extended to such units or generating projects.

17. UNCONTROLLABLE FORCES Neither Party hereto shall be in default in performance of any obliga-tion hereunder, except the payment of moneys, if such failure of perfomance is due to causes which such Pany could not have reasonably been expected to avoid.

18. DAMAGE TO PROJECT 18.01 If the Project suffers damage resulting from causes other than ordinary wear, tear or deterioration to the extent that the estimate of the cost of repair is twenty-five (25%) percent or less of the depreciated value of l the Project prior to the damage, and does not exceed available insurance pro-ceeds by $ or more, and if the Parties do not agree that the Project shall be ended pu stant to Section 24, Authority shall promptly submit to Cen-tral a revised constrection or operating budget, as appropriate.

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- Authority shall then proceed to repair the Project and each Party shall pay as budgeted its Ownership Share of the cost of such repair.

18.02 If the estimate of the cost of repair exceeds twenty-five l

(25%) percent of the depreciated value of the Project, or if the estimated cost of repair exceeds the available proceeds of insurance by $ or more, the Parties shall detemine the estimated fair market value of the Project if it is then teminated without repair. If within ninety (90) days thereafter, the Parties do not mutually agree that the Project shall be repaired as provided in Paragt aph 18.01, each Party shall become entitled to its Ownership Share of available insurance proceeds and the Party desiring such repair shall have the option to either (a) purchase the other Party's Ownership Share of the Project by paying to the other Party its Nnership Share of the estimated value of the Project without repair, or (b) paying the full amount of the cost of repair, in which latter case the Ownership Share of the Party not desiring repair shall be reduced at the end of each month to the extent detamined by the following fomula:

S = S I V 1 F 0 qy+cj where:

V = Estimated fair market value of the Project if it is teminated without repair.

C = Actual expenditures for repair.

S o = Ownership Share prior to loss.

3 r = Reduced Ownership Shate.

18.03 Any change in the Parties' Ownership Shares resulting from Paragraph 18.02 shall be subject to necessary regultory approvals.

19. DEFAULT l 19.01 Upon failure of either Party hereto to make any payment when due or perfom any obligation of any owner herein, the other Party may make ,

written demand upon said Party, and if said failure is not cured within 60 days frm the date of such demand it shall at the expiration of such period consti-tute a default. A Party in default shall have no right to the Output of the Project or to exercise any other right of a Party. If a Party in good faith disputes the existence or extent of such failure, it shall within said 60-day l period make such payment or perfom such obligation under written protest di- i l rected to the other Party. Such dispute shall be submitted to a Project Con- ,

sultant who shall detemine the extent of the obligation of the Party disputing l such failure and any payments shall be adjusted accordingly. Payments not made when due may bi. advanced by the other " arty and, if so advanc9d, shall bear interest, until paid, at the Morgan Guaranty Trust Company Prime Rate. Net-withstanding any of the provisions of this Section 19, if Authority is the Par-ty in default, Authority shall continue to operate the Project in accordance with Good Utility Practice.

l 19.02 If the default results from non-payment of capital costs, as I

defined in the Uniform Systen of Accounts, and contirtues for a period of four months, the defaulting Party shall afford the other Party the right (but such other Party shall not have the obligation) for an additional period of two months by notice in writing, to undertake the payment of such capital costs in full and the Ownership Share of the Parties shall be adjusted as detemined by the following formula:

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S = S ( V )

r (V+A) where:

V = Estimated ' air value of Project without the capital addition assign-able to non-payment.

A = Capital addition assignable to non-payment plus interest thereon.

S o = Ownership Share prior to default.

3 r = Reduced Ownership Share.- .

19.03 Any change in the Parties' Ownership Shares resulting from Paragraph 19.02 shall be subject to necessary regulatory approval.

19.04 In addition to the rights granted in this Section 19, any nondefaulting Party may take any action, in law or equity, to enforce this Agreement and to recover for any loss or damage, including attorney's fees and collection costs, incurred by reason of such default.

20. tLECTIVE CAPITAL ADDITIONS Renewals and replacements not necessary to assure design capability, and bettements and additions to the Project which in the reasonable judgment of Authority are not required to obtain the approval of or comply with require-ments of governmental agencies, shall be made after the Date of Commercial Op-eration only upon agreement between the Parties; provided, however, that Au-thority may make such additions at its own expense.

21. ADDITIONAL _ FACILITIES 21.01 If Authority determines to construct additional generatir.3

. facilities on Plant Real Property, Central shall become a joint owner thereof with Authority in the same proportion as its Ownership Share set forth in Para-graph 2.01 hereof. The tenns and conditions of such joint ownership shall be in accordance with the previsions of this Agreement as the same may be appro-priately modified, amended or supplemented with the mutual consent of the Parties to reflect such joint ownership.

21.02 Authority shall furnish Central copies of pertinent studie.;

relating to the construction of such additional facilities as soon as such studies become available, and as soon as practicable shall notify Central in writing of its detennination to construct such additional facilities. The notice shall specify a period of time, but not less than ninety (90) days, j within which Central shall indicate its approval.

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, 22. ASSIGNMENTS 22.01 This Agreement shall be binding upon and shall inure to the benefit of successors and assigns of the Parties; provided, however, that no transfer or assignment of other than all of a Party's interest in the Project and under this Agreement to a single entity shall operate to give the assignee or transferee the status or rights of a " Party" hereunder. Except as provided in Section 18 and 19 of this Agreement, the undivided interest (or a portion thereof) of either Party in the Project under this Agreement may be transferred and assigned as set out below but not otherwise; (a) To any mortgagee, trustee, or secured party, as security for bonds or other indebtedness of such Party, present or future; and such mort-gagee, trustee or secured party may reali;te upon such security in foreclosure or other suitable proceedings, and succeed to all right, title and interests of such Party; (b) To any corporation or other entity acquiring all or sub-stantially all the property of the Party making the transfer; (c) To any corporation or entity into which or with wt.sch the Party making the transfer may be merged or consolidated.

(d) To any corporation or entif.y, the stock or ownership of which is wholly owned by the Party making the transfer; (e) To any corporation or entity in a single transaction constituting a sale and lease back to the transferor or assignor.

22.02 Transfer or assignment shall not relieve a Party of any obli-gation hereunder except to the extent agreed to in writing by the Parties and shall be subject to the approvals of governmental agencies having jurisdic-tion.

23. TRAINING (a) Authority shall carry out a familiarization and training program to maintain adequate staffing, engineering and operation of the Project and the expenses thereof shall be part of the Costs of Construction or Costs of Operation as appropriate.

(b) Each Party shall be entitled within the limits of opera-ting efficiency and safety requirements to use of the facilities of the Project for the training of its own employees for staffing of other facilities or the engineering and operation thereof. Any increase in the Costs of Construction or the Costs of Operation resulting from such traimng shall be borne by the Party employing such trainees.

24. END OF PROJECT Vnen the Generating Unit or Station can no longer be~ made capable, consistent with Good Utility Practice, of producing electricity, or when the Project is ended pursuant to Section 18, Authority shall sell for removal by the Purchaser all saleable parts of the Project to the highest bidders.

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• The net proceeds or costs of the sale shsll be distributed to each Party in l

accordance with its Ownership Share. In the event such costs of ending the Project exceed available funds, each Party shall pay its Ownership Share of such excess as incurred.

25. PERSONAL COVENANTS AND LIMITATION AGAIhiT ALIENATION 25.01 Except for the Parties' mutual waiver of the right to parti-tion set forth in Section 2, all of the covenants and conditions herein shall be personal to the respective Parties and not covenants running with the land and shall be binding upon any person or entity acquiring any right, title or in-terest of any Party in or to the Project or under this Agreement, by assignment or in any other way.

26. PROPRIETARY INFORMATION All information made availabic to Central by Authority hereunder shall

- be subject to any applicable restrictions on disclosure of proprietary infor-mation.

27. COUNTERPARTS This Agreement may be executed in any number of origi-nal counterparts. All such counterparts shall constitute but one and the same Cross Agreement.

28. SEVERABILITY If any provision of this Agreement is held invalid or unenforceable by any governnental authority or court having jurisdiction over the sebject matter hereof, the remaining provisions shall remain in full force and effect according to their terms and the Parties shall renegotiate in good faith any provision held invalid or unenforceable in order to reach agreement as to replacement of or modification to such provision.

29. INTERPRETATION AND CAPTIONS

1. If any provision of this Agreement or any of its Exhibits is in confitet with any provision of any prior dated agreement, the provisions of this Agreement shall prevail.

2. The captions of Articles and Sections of this Agreement and its Exhibits are for convenience only and shall be ignored in construing or interpreting the provisions of this Agreement.

30. GOVERNING LAW The provisions of this Agreement shall be construed and governed in accordance with the laws of the State of South Carolina.

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. 31. NOTICES Any notice or communication required or pennited hereunder shall be effec-tive when personally delivered or when addressed:

If to Central: Central Electric Power Cooperative, Inc.

Post Office Box 1455 Columbia, SC 29202 If to Authority: South Carolina Public Service Authority One Riverwood Drive Moncks Corner, SC 29461 and deposited, postage prepaid, certified or registered, in the United States mail. Any such notice so given shall be deemed to have been given on the date of such deposit of such notice in the United States mail as evidenced by the ,

postmark on the envelope. Either Party by notice to the other given as afore-said may change its mailing address for future notices hereunder.

32. EFFECTIVE DATE AND TERM This Agreement shall become effective on or after upon approval by the Administrator of REA; provided, however, that if such ap-preval by the Administrator of REA is not forthcoming by ,

either Darty may, at its option, declare this Agreement and its execution there-of, nui and void.

IN WITNESS WHEREOF, the Authority, pursuant to a resolution duly acopted by its Board of Directors, has caused this Agreement to be: executed by its President and its seal to be affixed by its Secretary, and Central, pursuant to a resolution duly adopted by its Board of Trustees, has caused this Agreement to be executed by its President and its corporate seal to be affixed by its Secretary, all as of the day and year first above written.

Attest: SOUTH CAROLINA PUBLIC SERVICE AUTHORITY BY 1 Secretary President .

Attest: CENTRAL ELECTRIC POWER COOPERATIVE, INC.

BY Secretary President (SEAL) i

EXHIBIT I 0F AGREEMENT PLANT REAL PROPERTY SAMPLE l

Approximately 2,150 acres located East of the Authority's Diversion l Canal in the Cross Section of St. John's Parish, Berkeley County, South Caro- )

lina, as shown on Authority Drawing C-3388, dated 2/18/80, entitled " Detail Map  :

of Project Area", attached hereto as Aopendix I. A " General Map of Project Area", Authority Drawing C-3389, dated 2/18/80 is attached as Appendix II.

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SAMPLE 4 1

DETAIL MAP OF rROJECT AREA Drawing No. C-3388 I

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SAMPLE GENERAL MAP OF PROJECT AREA Drawing No. C-3389 e

EXHIBIT II 0F AGREEMENT PROJECT DESCRIPTION i

SAMPLE Santee Cooper preposes to construct four 450-MWe (net) coal-fired steam-electric generating units on an approximately 2,660-acre site adjacent to the north bank of the Diversion Canal connecting Lakes Marion and Moultrie of  !

the licensed Santee Cooper Hydroelectric Project, FERC No.199, and near the i town of Cross, South Carolina. The proposed water intake and discharge struc-tures ano parts of the transmission line corridors would be located within the boundary of the licensed Santee Cooper project. Commercial operation of the first unit is planned for 1983, with succeeding units scheduled for 1965, 1987, ,

and 1988. Support facilities would include a 10.5-mile rail spur to bring coal '

to the plant, and approximately 180 miles of new 230-kV transmission lires with six separate circuits supply er.isting substations at four primary load centers.

Major station facilities include two approximately 600-foot high stacks with dual flues (one for each unit), mechanical draft cooling towers, electrostatic precipitators for the removal of particulates a wet limestone flue gas desulfurizatien (FGD) system for the removal of suffur dioxide, boilers designed to reduce nitrogen oxide emissions, a chemical waste treatment plant, and intake and discharge structures at the Diversion Canal. The site is charac-terized by a level topography, varying between 80 and 85 feet above mean sea l evel . Some lowland areas are marshy during the wet seasons, and several are classified as Corps of Engineers 404 Wetlands. The site is presently timbered with pine and mixed pine-hardwoods. There are no residences on the site, which is owned by Santee Cooper.

Fuel The Cross Generating Station would burn bituminous coal from reserves in Eastern Kentucky. At full load each unit would consume approximately 221

• ons/hr, approximately 1,400,000 tons /yr at c 70 percent annual load factor.

Coal would be delivered by unit trains of 10,000 ton capacity at an average rate of 3 per week per unit. Forty-six acres of land would be provided for 120 days of dead storage.

Water Resources Water for plant operations would be withdrawn from the Diversion Canal. Two intake structures would be located at the bank of the canal. Each structure would contain trash racks, a vertical traveling screen, and three 7,500-gpm intake pumps. Structures would be designed for a maximum intake velocity of 0.5 fps. Potable water (300 gpm maximum) would be supplied from wells and/or treated canal water.

The heat dissipation system would consist of mechanical draft cooling towers operating in a clossd circuit.

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Air Resources The proposed air pollution control system consists of three parts:

particulate control, flue gas desulfurization, and nitrogen oxides control.

Particulate control would be achieved by cold-side electrostatic precipitators located after the heat exchangers. Flue gas desulfurization would enploy wet limestone scrubbers, designed to remove 90 percent of the 50 In normal opera-ticaremovalefficiencywouldbebetween70and90 percent,$s. required to maintain S0 emissions below 0.6 lb/million BTU, with some bypass to minimize flue gas re$ eat requirements. Nitrogen oxide control would be by boiler and furnace design.

Solid Wastes Sludge from the FGD system would be dewatered and mixed with d~y fly ash and a lime additive to stabilize it in solid form. The solidified material wo 'd be disposed of on site.

Fly ash, as described above, would be combined with the FGD sludge.

Bottom ash would be sluiced to clay-lined ash ponds for settling and clarifica-tion, with the supernatant recycled to the plant.

Transmission Facilities A total of six new 230-kV transmission lines (total length about 180 miles) would be required to transmit power to existing substations at four primary load centers. Where possible and advantageous, existing corridors would be used, widened where necessary. Approximately 105 miles of new corridor would be required.

Railroad Sour A new 10.5-mile rail spur would be required to connect the plant to the Seaboard Coast Line main line near St. Stephen. The route would cross the Cooper River Rediversion Canal and the abandoned historic Santee Canal.

Railroad Cars The Cross Station will have facilities for rotary dump coal cars. As these cars will not be furnished by the railroad company, they will be purchased by the Authority as part of the Costs of Construction of the Project.

EXHIBIT III 0F AGREEMENT PERMITS AND CONTRACTS SAMPLE Santee Cooper has retained Burns and Roe, Inc. of Paramus, New Jersey, to provide engineering services and construction management services frir the Cross Generating Station. Burns and Roe, Inc. will be reimbursed on a cost basis. The estimated cost to the Project for engineering and construction management service 5 is $20 million dollars for the first unit.

Santee Cooper is awarding contracts for equipment procurement and construction services. The administration of these contracts and coordination of field construction will be handled by Burns and Roe's construction management with advice and guidance from Santee Cooper's Station Construction Section.

A list of purchase orders, list of licenses, pennits, and certifica-tions obtained by Santee Cooper is shown in Tables I and II to this Exhibit.

This Exhibit and the Tables are correct as of January 31, 1980.

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, TABLE I I

GENERATING STATION FIRST UNIT SAMPLE CONTRACT NO. EQUIPMENT SUPPLIER CONTRACT AMOUNT l

2G1 Turbine-Generator General Electric $ 15,880,419

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202 Condenser Ecolaire Condenser $ 1,616,773 203 Condenser Tubes Olin Brass Group $ 1,525,418 A

204 Condensate Pumps Ingersoll-Rarid $ 396,109 205 Feedwater Heaters Yuba $ 35,000 206 Deaerator L*A Water $ 195,790 207 Boiler Feed Pumps Delaval $ 467,900 208 B.F.P. Drives General Electric $ 1,227,624 211 Steam Generator Combustion Engineering $ 1,700,000 213 Precipitator C-E Walther_ $ 730,000 221 Cooling Tower Research-Cottrell $ 4,805,400 231 High Pressure Valves Rockwell International $ 566,198 236 Overhead Traveling Crane Landel, Inc. $ 371,105 281 Chimney PulIman $ 5,941,000

287 Elevator Southern Elevator $ 134,967 271 Site Preparation Eastern Contractors $ 1,756,500 291 Preliminary Site Survey Moore, Gardner $ 21,340 292 Subsurface Investigation Law Engineering $ 488,900 1 Geophysical Probe 292A Investigation Law Engineering $ 656,000 2928 Test Caisson

. Installation Caisson Corporation $ 304,169 l

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l GENERATING STATION FIRST UNIT (CONT'D)

SAMPLE CONTRACT NO. EQUIPMENT SUPPLIER CONTRACT AMOUNT 293 Material Testing Pittsburg Testing $ 175,000 214 FGD System Peabody Process $ 21,672,000 216 Coal Handling System Fairfield Engineering $ 16,453,186 t

i GENERATING STATION SECOND UNIT SAMPLE EQUIPMENT SUPPLIER CONTRACT AMOUNT CONTRACT NO.

101 Turbine-Generator General Electric $ 16,055,599 102 Condenser Ecolaire Condenser $ 1,679,899 104 Condensate Pumps Ingersoll-Rand $ 360,544 105 Feedwater Heaters Yuba $ 1,351,540 106 Deaerator L*A Water Treatment $ 190,300 107 Boiler Feed Pump Delaval $ 379,900 108 B.F.P. Drives General Electric $ 1,318,128 111 Steam Generator Combustion Engineering $ 41,434.411 113 Precipitator C-E Walther $ 13,593,055 187 Elevator Southern Elevator $ 133,894 114 FGD System Prabody Process $ 17,991,300 r

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l TABLE II SAMPLE The following is a list of permits and certifications from the local, State, and Federal agencies which Santee Cooper has obtained or expects to obtain as being required for the project:

Local A. Berkeley County Auditor's Offi'ce.

1. Berkeley County Construction Permit.

State:

A. Department.of Health and Environmental Control.

1. Construction Permit for Water Polution Control Facilities.

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2. Operating " "

3. Construction "

Sewage Treabnent Plant.

4. Operating " "

5: Construction Run Off Permit (4/20/79).

6. 401 Certification.

7. Permit for disposal of cellulosic material by earth burial.

8. Permit for disposal of inert, non-toxic waste by earth burial.

9. Fuel Burning Construction Permit, Unit No. 1 (4/16/79).

• 2(4/16/79).

3.

. . = = u .

4,

10. Fuel Burning Operating Permit, Unit Na.1.

. N N N N N 3.

. . . . . = l 4,

• Permit obtained.

Tabla II B. Water Resources Commission.

1. Water Resources Construction Permit.

Federal:

A. Federal Energy Regulatory Commission.

1. Enviromnental Impact Statement.

2. Intake and Discharge Construction Permit.

B. Corp of Engineers.

, 1. Intake and Discharge Construction Permit.

C. Federal f.viation Administration.

1. Tall Stack Construction Notification.

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4 EXHIBIT IV 0F AGREEMENT INITIAL BUDGET (CROSS UNIT NO. 2) l SAMPLE l

Type I

• Type II ** Total Fiscal Year 1979 $1,787,654 $5,148,436 $ 6,936,094 Fiscal Year 1980 July, 1979 78,004 48,330 126,337 August, 1979 187,783 810,469 998,225 September, 1979 432,001 1,043,698 1,475,703 October 1979 1,364,920 1,098,152 2,463,078 November, 1979 399,146 2,009,137 2,408,288 December, 1979 11,782 1,047,121 1,058,906 January,1980 2,298,796 February, 1980 2,328,000 March, 1980 2,232,000 April ,1980 2,276,000 May, 19v0 2,193,000 June, 1980 2,019,000 Fiscal Year 1961 37,545,750 Fiscal Year 1982 113,147,793

. Fiscal Year 1983 151,483,000 Fiscal Year 1984 42,627,000 TOTAL $373,617,000

• Type I expenditures include environmental studies, investigations, engineering, geophysical work, etc., for the facility.

• • Type II expenditures include physical work at the site and contract purchases which will become a part of the facility.

Figures through December,1979, are actual expenditures. Others are estimates.

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1 CROSS LEASE AGREEMENT

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. l CROSS GENERATING STATION LEASE AGREEMENT BETWEEN SOUTH CAROLINA PUBLIC SERVICE AUTHORITY AND CENTRAL ELECTRIC POWER COOPERATIVE, INC.

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. Agreement and lease made as of , 1980, between South Carolina Public Service Authority (" Authority") an agency of the State of South Carolina, and Central Electric Power Cooperative, Inc. (" Central") a cooperative corporation organized and existini under the laws of the State of South Caro-lina.

RECITALS WHEREAS, Authority own:; and operates an electric power system consist-ing of electric generating, transmission and distribution facilities; and WHEREAS, Central is a generation and transmission cooperative, which, through wholesale purchases from Authority, furnishes electric power and energy to its member distribution cooperatives under all requirements contracts; and WHEREAS, Central, through loans from the United States of America, (the " Government") acting through the Administrator of the Rural Electrification Administration (the " Administrator") has constructed electric generating and transmission facilities and by means of certain lease contracts has leased such facilities to Authority; and K.EREAS, that certain Contract Obligation entered into between Author-ity and Central as of January 1,1950 contains an all requirements clause which so long as the Contract Obligation remains outstanding may only'be deleted or amended with the consent of 75% of the holders of the Authority s priority obligations; and WHEREAS, after Jariary 1,1985, said Contract Obligation will no longer be outstanding, and after such date the Parties hereto intend to delete such all requirements provision; and WHEREAS, the Parties hereto have entered into an agreement whereby they will construct and own an electric generating station now known as the ,

" Cross Generating Station" at which they intend ultimately to construct four l generating units; and WHEREAS, the commercial operation date of the first such generating unit (Unit 2) is scheduled for November 1,1983.

WITNESSETH, that in consideration of the mutual undertakings contained herein the Parties hereto agree as follows:

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I ARTICLE I Construction of the Cross Plant Unit 2 Section 1. Scope of the Cross Plant Unit 2. The Cross Plant Unit 2 shall consist of a fossil-fueled steam-electric generating unit (the " Unit) and related substation facilities. The unit shall consist of one 510 MW (name plate) steam-electric generating unit and its related generation and substation facilities to be installed near Cross, South Carolina, rare fully described in Exhibit I.

Section 2. Cross Ownership Agreement. The construction of the Cross Plant Unit 2 shall be accomplished by the Authority on behalf of itself and as agent for Central as set forth in the Cross Ownership Agreement hereto-fore entered into between the Parties hereto. In case of any conflict between any provision of this Agreement and any provision of the Cross Ownership Agree-ment, the latter shall govern.

Section 3. Canpletion and Lease of the Cross Plant Unit 2. Upon completion of the construction of the Cross Plant Unit 2, as provided in the Cross Ownership Agreement, the Authority shall inform Central that such unit is completed. Thereupon Central shall have the right to inspect such unit, and such unit shall be started and tested and the Authority shall cause the defects, if any, disclosed by such inspection and tests, to be corrected. The Authority shall designate the date of commercial operation of Unit 2 and from such date Central leases its ownership share of Unit 2 to Authority and Authority shall take possession of Central's ownership share.

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ARTICLE II Operation and Maintenance of the Cross Plant Unit 2 Section 1. General, 7. ring the tem of this lease, the Authority j shall operate and maintain Unit 4 in accordance with the usual standards of operation and maintenance and in comiomity with all applicable laws and regu-lations now or hereafter in Arce. Without limiting the generality of the foregoing, the Authority " , while this lease is in force:

(a) Pay all expenses arising from or in connection with the opera-tion and maintenance of Unit 2, including, without limitation, taxes of any kind or character arising from or in connection with the ownership or operation of Unit 2, and the cost of insurarce in respect of Unit 2 in such kinds and amounts as may be required by the tems of any loan contracts or mortgages entered into by Central to finance its ownership share.

(b) Pay or cause to be paid to Central as renul for Central's ownership share the following amounts at the times indicated:

(c) Promptly perfom all of its obligations to Central under this lease and refrain from doing any act which would result in a violation of any obligation of Central incurred as part of Central's financing of its ownership share of Unit 2.

(d) Return Central's ow.:rship share of Unit 2 to Central upon expiration of the tem of this lease or upon its temination for any reason, in as good condition as when received, reasonably wea and tear expected.

(e) All obligations to pay rentals and other financial commitments under this lease are junior and subordinate to Authority's Electric System Expansion Bonds and are on a parity with payments made by Authority pursuant to other leases heretofore entered into between the Parties hereto. Provided, however, that nothing herein contained shall be construed to prevent Central from retaking possession of its ownership share of Unit 2 if the Authority shall fail, because of compliance with the provisions of its Trust Indenture of 1949 or its Bond Resolution of 1971, as the same have or may be amended or supple-mented, or otherwise, to make rental payments herein provided or to perfom any

. other obligation herein contained, and provided further, that approval of this ,

lease by the Administrator shall not be construed as a waiver of the right of foreclosure which may be available to the Administrator under any mortgage lien l held by him or any other right available to the Administrator. j l

Section 2. Records. The Authority, upon commencement of operation 1 and maintenance of Unit 2, shall maintain complete accounting records for Unit 2 I in accordance with the Federal Energy Regulatory Commission Uniform System of Accounts, including, without limitation, records of the electric plant accounts including all capital additions and retirements, and cost records of the opera-tion and maintenance of Unit 2, which shall be available for inspection by the duly authori.ted representatives of Central and the Administrator at all reason-

able times.

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ARTICLE III Miscellaneous Section 1. Effective Date and Term.. This lease shall be effective as of the date of commercial operation of Unit 2 when approved in writing by the

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Administrator and shall continue in force until January 1,1985 or until the Contract Obligation is no longer outstanding, whichever is earlier.

Section 2. Specific Performance. The Parties hereto agree that in the event of a breach of any material provision hereon, Authority or Central, as the case may be shall, in addition to ,,v ather remedy at law or in equity or by statute avaliable to it, be entitled to 6 decree for specific performance hereof according to the terms of this lease.

Section 3. Uncontrollable Forces. Neither Party shall be consid-ered to be in default in respect of any obligation hereunder if prevented from fulfilling such obligation by reason of uncontrollable forces, the term "uncon-trollable forces" being deemed for the purpose of this agreement and lease to mean any cause beyond the control of the parties affected, including, but not limited to, failure of facilities, floods, earthquakes, storms, lightning, fires, epidemics, wars, riots, civil disturbances, labor disturbances, sabotage, and restraint by ccurt or public authority, which, by exercise of due diligence and foresight, such party could not reasonably have been expected to avoid.

Either party rendered unable to fulfill any obligation by reason of uncontrol-lable forces shall exercise due diligence to renove such inability with all reasonable dispatch. In the event of destruction or damage to Unit 2, the provisions of the Cross Ownership Agreement shall govern.

Section 4. Successors and Assigns. This agreement and lease shall apply to and ts tinding upon the successors and assigns of the parties hereto as fully as i' the words " successors and assigns" were written herein wherever reference to Central and the Authority occurs in this agreement. This agreement and lease shall not be assigned by either party without the written consent of the other, except that it may be assigned without the consent of the Authority, by Central to the Government represented by the Administrator of REA and its successors as additional security under any mortgage securing Central's owner-ship share and to any purchaser of Central's ownership share upon foreclosure of any mortgage in the event of default by Ce3 tral thereunde .

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I IN WITNESS WHEREOF, the Authority, pursuant to a resolution duly l

- adopted by its Board of Directors, has caused this agreement and lease to be executed by its President and its seal to be affixed by its Secretary and Cen-

! tral, pursuant to a resolution duly adopted by its Board of Trustees, has caused this agreement to be executed by its President and its corporate seal to be affixed by its Secretary, all as of the day and year first above written.

SOUTH CAROLINA PUBLIC SERVICE AUTHORITY By SEAL ATTEST:

Secretary WITNESS:

CENTRAL ELECTRIC POWER COOPERATIVE, INC.

By SEAL ATTEST:

i Secretary j i

l WITNESS:

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MICROWAVE AGREEMENT 4

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i AGREEMENT FOR THE l USE OF A PORTION OF AUTHORITY MICROWAVE SYSTEM BY CENTRAL FOR LOAD MANAGEMENT AND DATA RETRIEV!?

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_me sma . Sus-1 l Microcave Letter Agreement l .

This Agreement for the Use of a Portion of Autnority Microwave System by Central for Load Management and Data Retrieval (hereinafter revarred to as the " Microwave Agreement") entered into on the day of ,

1980, by and between the South Carolina Public Service Authority thereinafter referred to as the " Authority"), an Agency of the State of South Carolina, and Central Electric Power Cooperative, Inc., (hereinafter referred to as "Cen-tral"), a cooperative corporation organized and existing under the laws of the State of South Carolina, witnesseth that, RECITALS WHEREAS, Central has constructed and leased to Santee Cooper certain microwave facilities to which have been added by Santee Cooper other microwave facilities together to be known as "the microwave system" (System); and WHEREAS, Central, by virtue of shared generating capacity ownership with Santee Cooper -

d Central's desire for self-sufficiency, must provide means to control and manage its itember load characteristics; and, WHEREAS, the System provides the only practical means of such load control and management between Central and its members; and, WHEREAS, duplication of existing facilities is economically impracti-cal; and, WHEREAS, Santee Cooper desires to cooperate in such system load con-trol .

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, the Parties hereto contract and agree as follows:

Santee Cooper will provide sixty (60) channels of the existing three hundred (300) channel System for Central use in load management and data re-trieval under the following conditions:

Such use by Central shall be on a non-profit, cost-sharing basis pursuant to Sections 94.17 (a) (2) and 94.17 (d) of the regulations of the Federal Communications Commission.

Central shall coordinate the use of all of the channels with Santee Cooper so thr.t there will be no adverse effects on the existing System.

The System shall continue to be operated and maintained by Santee Cooper, Central agrees to pay to Santee Cooper for the operation and mainten-ance of the sixty (60) channels a sum equal to one-finh of the total annual costs (debt service, operating and maintenance expenst , and related burdens) allocated to the System.

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Microwave Lstttr Agreement For each contract year, until actual data becomes available, Central shall pay a monthly sum equal to one-twelfth of the above-estimated cost for the Systec. When actual monthly data becomes availabiti, succeeding monthly billing stataments will be adjusted to reflect, as additional charges or credits, actual costs incurred by Santee Cooper; System costs not allocated directly to Central shall be allocated pursuant to Appendix B of the Coordination Agreement.

This System use agreement shall become effective upon the date the Administrator of REA approves the above-mentioned Coordination Agreenent.

Any notice or communication required or permitted hereunder shall be effective when personally delivered or when addressed:

If to Central: Central Electric Power Cooperative, Inc.

Post Office Box 1455 Columbia, SC 29202 If to Authority: South Carolina Public Service Authority 223 North Live Oak Drive Moncks Corner, SC 29461 and deposited, postage prepaid, certified or registered, in the United States mail. Any such notice so given shall be deemed to have been given on the date of such deposit of ushe notice in the United States mail as evidenced by the postmark on the envelope. Either Party by notice to the other given as afore-said may change its mailing address for future notices hereunder.

IN WITNESS WHERE0F, the Authority, pursuant to a resolution duly adopted by its Board of Directors, has caused this Microwave Agreement to be executed by its President and its seal to be affixed by its Secretary, and Central, pursuant to a resolution duly adopted by its Board of Trustees, has caused this Microwave Agreement to be executed by its President and its corpo-rate seal to be affixed by its Secretary, all as of the day and year first above written.

Attest: SOUTH CAROLINA PUBLIC SERVICE AUTHORITY BY Secretary President Attest: CENTRAL ELECTRIC POWER COOPERATIVE, INC.

BY Secretary President (SEAL)

l AMENDMENT NO. 10 TO "F" WHOLESALE POWER CONTRACT

l o I U. S. DEPARTMENT OF AGRICULTURE RURAL ELECTRIFICATION ADMINISTRATION REA BORROWER DESIGNATION South Carolina 50 Santee _ ,

THE WITHIN Amendment No. 10 Dated April 17, 1980, to the "F" Wholesale Power Contract between the South Carolina Public _ ,__.

Service Authority and Central Electric Power Cooperative, Inc.

SUBMITTED BY THE AB0VE DESIGNATED BORROWER PURSUANT TO THE TERMS OF THE LOAN CONTRACT, IS HEREBY APPROVED S0LELY FOR THE PURPOSES OF SUCH CONTRACT.

/s/ Frank W. Bennett For the Administrator DATED 6/13/80 i

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AMENDMENT NO. 10 TO "F" WHOLESALE POWER CONTRACT This Acreemenc made as of /Ygf,/ 7, / -/ '.it ,

between the SOUTE CAROLINA PUBLIC SERVICE AUTHORITY (hereinafter called the " Authority"), an agency of the State of South Carolina, and the CENTRAL ELECTRIC POWER COOPERATIVE, INC., (hereinafter called " Central"), a cooperative corporation organized and exist-ing under the laws of the State of South Carolina.

WHEREAS, the Authority and Central heretofore have entered into agreements providing for the construction by Central and lease by the' Authority of an electric power system and agree-ments providir.g for the sale of power by the Authority to Central, the latest agreement for the sale of power between the Parties being known as the "F Power Contract" of April 27, 1970; and, WHEREAS, Section 5 of the "F Power Contract", as 1:Ast amended by Amendment No. 3 to "F" Wholesale Power Contract 6ated as of October 16, 1975, provides for the manner of determiring the rate to be charged Central by the Authority for electric enern ,

and, WHEREAS, Central and the Authority have agreed to an ,

interim rate increase pending review and renegotiation of all the:r contractual relationships.

NOW, THEREFORE, in consideration of the mutual undertaking herein contained, the Parties agree as follows:

Section 1. The said "F Power Contract", as amended, is further amended by deleting the text of Section 5c as it appears on page 7 of said contract, and substituting therefor the following:

"c. Starting with the monthly billing period beginning July 1, 1980 (billed August 1, 1980) ending with, but including, the monthly billing period beginning June 1, 1981 (billed July 1,1981) , the energy charge per monthly billing period shall be determined in accordance with thc provisions of the immediately preceding subsection b of this section 5, as heretofore revised pursuant to Sectior.

8; provided, however, that there shall in addition be billed a surcharge of 2.3 mills per KWH of total Billing Energy. Further provided, that the surcharge provided in this subsection shall not be included as a part of the

' rate specified in Section 5' to be reviewed in accordance with the rate review provisions of Section 8 hereof."

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l l Section 2. Except as herein modified, the "F Power

- Contract", as amended, remains in full force and effect.

Section 3. The amendment herein set forth does not constitute an increase in Central's power rates accomplished "at any time or by any method other than in accordance with

! the provisions for periodic rate review" within the purview of l

Section 24 of the "F Power Contract" as amended, nor will this amendment be construed by either party to indicate that the rate in effect prior to this amendment is or is not equitable.

Section 4. This amendment shall become effective upon approval in writing by the .^.dministrator of Rural Electrification Mministration.

IN WITNESS WHEREOF, the Authority, pursuant to a resolu--

tion duly adopted by its Board of Directors, has caused this Amend-ment No. 10 to the "F Power Contract" to be executed by its Presi-dent and its seal affixed by its Secretary, and Central, pursuant to a resolution duly adopted by its Board of Trustees, has caused this Amendment No. 10 to be executed by its President and its cor-porate seal to be affixed by its Secretary, in quintuplicate ori-ginal all as of the date and year aforesaid.

SEAL SOUTH CAROLINA PUBLIC SERVICE AUTHOR 4TY ATTEST: ,

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p., By i f..

Secretary President WITNESS:

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SEAL CENTRAL ELECTRIC POWER COOPERATIVE, INC. j l

ATTEST: [g

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. b Secretary ) Plesident' WITNESS: 1 l

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STATE OF SOUTH CAROL 7NA)

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COUNTY OF BERKELEY)

Personally appeared [fL, /M .11 c (/9 v , who being duly sworn, says-that 3he saw _ /(/ , ~ //L.3, /y ,

as ' tsident of South Carolina Public Service Authority, and

/ /A 1% 3 s s , as Secretary, sign, attest, affix V

the Authority's seal and as the act and deed of South Carolina Public Service Authority, deliver the foregoing Instrument; and thet he with ',t' ' u . 6 /[,n' / / N witnessed the execution thereof.

N'A !l,, Rl . DC ML Swcrn to hefore pe this day of ' ( /u < P , 1980.

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if ,,, .*hi/LD L'L(t c (L.S.)

Ndtary Public for South Carolina My Commission expires: /, Ji fo STATE OF SOUTH CAROLINA)

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COUNTY OF RICHLAND)

Personally appeared h (ma g tq(d [(?, w .,

, who being duly sworn, says that She saw Robert W. Williams, Jr., as President of Central Electric Power Cooperative, Inc., and Robert B.

Awbrey, as Secretary, sign, attest, affix the Corporate seal and as the act and deed of Central Electric Power Cooperative, Inc., deliver the foregoing Instrument; and that she with vi- o_ , , N.9. Nm/c , ,,_

witnessed the execution thereof.

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Sworn to before me this h day of QU , 1980.

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4 .S.)

Notarf Public for South Cazol @a My Commission expires: W/8//$/

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AMENDMENT NO. 11 T0 "F" WHOLESALE POWER CONTRACT l

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x AMENDENT N0.11 TO "F" WHOLESALE POWER CONTRACT This Agreement made as of , between the  !

SOUTH CAROLINA PUBLIC SERVICE AUTHORITY (hereinafter called the " Authority"), an agency of the State of South Carolina, and the CENTRAL ELECTRIC POWER C00PERA-TIVE, INC., (hereinafter called " Central"), a cooperative corporation organized and existing under the laws of the State of South Carolina.

WHEREAS, the Authority and Central heretofore have entered into agree-ments providing for the constretSn by Central and lease by the Authority of an electric power system and agreements providing for the sale of power by the Authority to Central, the latest agreenent for the sale of power between the Parties being known as the "F Power Contract" of April 27, 1970; and, WHEREAS, Section 5 of the "F Power Contract", as last amended by Amendment No.10 to "F" Wholesale Power Contract dated as of April 7,1980, l provides for the manner of detennining the rate to be charged Central by the Authority for electric energy; and, I

WHEREAS, Central and the Authority have agreed to an interim rate increase pending review and renegotiation of all their contractual relation- 1 ships.

NOW, THEREFORE, in consideration of the mutual undertaking herein contained, the Parties agree as follows:

Section 1. The said "F Power Contract", as amended, is further amend-ed by deleting the text of Section Sc as it appears on page 7 of said contract, and substituting therefor the following:

"c. (1) Starting with the monthly billing period beginning July 1, 1981 (billed August 1,1981) ending with, but including, the monthly billing period beginning June 1,1982 (billed July 1,1982), the i energy charge per monthly billing period shall be determined in ac-cordance with the provisions of the immediately preceding subsection b of this section 5, as t etofore revised pursuant to Section 8; pro- '

vided, however, that there shall in addition be billed a surcharge of 3.4 mills per KWH of total Billing Energy. Further provided, that the surcharge provided in this subsection shall not be included as a part of the ' rate specified in Section 5' to be reviewed in accordance with the rate review provisions of Section 8 hereof."

"c. (ii) Starting with the monthly billing period beginning July 1, 1982 (billed August 1,1982) ending with, but including, the monthly billing period beginning June 1,1983 (billed July 1,1983), the energy charge per monthly billing period shall be determined in ac-cordance with the provisions of the immediately preceding subsection b of this section 5, as heretofore revised pursuant to Section 8; pro-vided, however, that there shall in addition be billed a surcharge of 4.2 mills per KWH of total Billing Energy. Further provided, that the surcharge provided in this subsection shall not be included as a part of the ' rate specified in Section 5' to be reviewed in accordance with the rate review provisions of Section 8 hereof."

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l "c.(iii) Immediately prior to the billing period beginning July 1 of each year following July 1,1983, a surcharge in mills per KWH of I

total billing shall be calculated and billed in the same manner used '

to calculate and bill the surcharge covered by Amendment No.10 and l the above c. (1) and c. (ii) of this Amendment No.11."

Section 2. Except as herein modified, the "F Power Contract", as l

rended, remains in full force and effect.

Section 3. The amendment herein set forth does not constitute an increase in Central's power rates accomplished "at any the or by any method other than in accordance with the provisions for periodic rate review" within the purview of Section 24 of the "F Power Contract", as amended, nor will this

)

amendment be construed by either party to indicate that the rate in effect prior to this amendment is or is not equitable. l Section 4. This amendment shall become effective upon approval in writing by the Administrator of Rural Electrification Administration. ,

IN WITNESS WHEREOF, the Authority, pursuant to a resolution duly l

adopted by its Board of Directors, has caused this Amendment No.11 to the "F Power Contract" to be executed by its President and its seal affixed by its Secretary, and Central, pursuant to a resolution duly adopted by its Board of Trustees, has caused this Amendment No.11 to be executed by its President and  ;

its corporate seal to be affixed by its Secretary, in quintuplicate original all as of the date and year aforesaid.

4 SEAL SOUTH CAROLINA PUBLIC SERVICE AUTHORITY ATTEST:

By

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Secretary President WITNESS:

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SEAL .

CENTRAL ELECTRIC POWER COOPERATIVE, INC.

ATTEST:

secretary President i

l WITNESS:

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CERTIFICATE OF SERVICE s

I hereby certify that copies of the foregoing LETTER were mailed this 29th day of October, 1980, by first class mail, postage prepaid, to the following:

Joseph Rutberg, Esq. C. Pinckney Roberts, Esq.

Antitrust Counsel Dial, Jennings, Windham, Thomas Nuclear Regulatory Commission and Roberts Washington, D.C. 20555 P.O. Box 1792 ,

Columbia, South Carolina 29202 Mr. Jercme D. Salzman Chief Joseph B. Knotts, Esq.

Antitrust and Indemnity Group Debevoise & Liberman Nuclear Reactor Regulation Office 1200 Seventeenth Street, N.W.

Nuclear Regulatory Commission Washington, D.C. 20036 Washington, D.C. 20555 Edward C. Roberts, Esq.

Donald Kaplan, Esq. South Carolina Electric & Gas Robert Fabrikant, Esq. Company Department of Justice P.O. Box 764 P.O. Box 14141 Columbia, South Carolina 29202 Washington, D.C. 20044 Fredric D. Chanania, Esq.

Samuel J. Chilk Office of of Executive Legal Secretary Director Nuclear Regulatory Commission U.S. Nuclear Regulatory Washington, D.C. 20555 Commission Washington, D.C. 20555 Mr. P. T. Allen Executive Vice President and General Manager Central Electric Power-Cooperative P.O. Box 1455 Columbia, South Carolina 29201 Wallace E. Brand, Esq.

Brand and Hall 1523 L Street, N.W. 1 Suite 200 Washington, D.C. 20005 j ym .'

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M. Rand McQuinn 4 . - - - - - - , +