ML19340F134

Forwards Point Sys Coordination & Integration Agreement Between Sc Public Svc Authority & Central Electric Power Cooperative,Inc.Certificate of Svc Encl

ML19340F134
Person / Time
Site:	Summer
Issue date:	01/14/1981
From:	Morrison H CAHILL, GORDON & REINDEL
To:	Chilk S NRC OFFICE OF THE SECRETARY (SECY)
References
ISSUANCES-A, NUDOCS 8101190498
Download: ML19340F134 (99)

Text

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CAIHLL GoanoN & REINDEL 1990 K STREET,N.W.

WASHINGTON, D. C. 20o06 TELEPROM O2 562 8900 R apso asso Ca stg ADONE S SE S ElGMTY DIN C ST.CET entw TO.st. N. T. 0005 *COTTOP.AN M WAS MINGTON'

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8 Qa %1 s g; I Re: In the Matter of South Carolina lri N {J/

• ?ef%g Electric & Gas Company, et al. . N (Virgil C. Summer Nuclear Station) L,/ f y

Docket No. 50-395A dI l 16@

Dear Mr. Chilk:

This is to update our report of October 28, 1980 concerning the status of negotiations between the South Carolina Public Service Authority and Central Electric Coop leading toward a Power System Coordination Agreement.

As noted in our status report of October 28, 1980, negotiations between the Authority and Central have con-

' tinued following the receipt of comments from the REA on the prior tentative agreement. Subsequent negotiations have re-sulted in a Power System Coordination Agreement between the parties which has been formally approved by the Board of Directors of both the Authority and Central, and which has I been submitted to the REA for approval. Action by the REA is expected in the very near future, and if REA approval is forthcoming, the power system coordination agreement between the Authority and Central will be consummated immediately thereafter.

l A copy of the agreement, as approved by both l parties (but not by the REA) is enclosed. We will advise

! you immediately in the event the REA requires modification ,

' of the enclosed agreement, and will supply a copy of the i final agreement at that time.

Sincerely, g.,

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Hugh R hjs2

. Morrison ,' ,

Samuel J. Chilk, Secretary Nuclear Regulatory Commission Washington, D.C. 20555 g

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l POWER SYSTEM COORDINATION AGREEMENT

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POWER SYSTEM COORDINATION AND INTEGRATION AGREEMENT 4

BETWEEN i SOUTH CAROLINA PUBLIC SERVICE AUTHORITY AND CENTRAL ELECTRIC POWER COOPERATIVE, INC.

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POWER SYSTEM C0 ORDINATION AND INTEGRATION AGREEMENT TABLE OF CONTENTS .

PAGE REFERENCE ARTICLE. SECTIONS, OR APPENDIX TITLES NUMBER RECITAL ............................... 1 DEFINITIONS ............................. 4 Article I . . . . . . Existing Agreement ............. 6 Article II . . . . . . Joint Committees .............. 7 Article III . . . . . . Ownership of Cross & Summer Generating Station Resources . . . . . . . . . . . . . . 11 Article IV . . . . . . Future Generating Resources . . . . . . . . . 12 Article V . . . . . . Power and Energy Rates and Requirements . . . 16 Article VI . . . . . . Transmission Services and Deliveries . . . . 18 Article VII . . . . . . Transmission System Coordination . . . . . . 19 Article VIII . . . . . . Delivery Points . . . . . . . . . . . . . . . 23 Article IX . . . . . . Electrical Characteristics . . . . . . . . . 24 Article X . . . . . . Dispatching & Operation of Capacity Resources

& Transmission System . . . . . . . . . . . . 25 Article XI . . . . . . Metering ..................28

Article XII . . . . . . Billing & Payment . . . . . . . . . . . . . . 29 Article XIII . . . . . . Arbitration . . . . . . . . . . . . . . . . . 20 l

Article XIV . . . . . . Miscellaneous . . . . . . . . . . . . . . . . 35 Effective Date & Term ..........35 Central's Members ............35 Interruptions to Service . . . . . . . . . 35 Force Majeure . . . . . . . . . . . . . . 36 Successors and Assigns . . . . . . . . . . 36 Selling or Leasing of Authority System . . 36 Selling or Leasing of Either Parties' System . . . . . . . . . . . . . . . . 37 Rights of Way . . . . . . . . . . . . . . 37 Entry of Premises . . . . . . . . . . . . 37

, Ownership of Facilities & Right of Removal .37 l Indemnification . . . . . . . . . . . . . 38 Interpretation and Captions .......38 i Audit . . . . . . . . . . . . . . . . . . 38 i

Counterparts . . . . . . . . . . . . . . . 38 Severability . . . . . . . . . . . . . . . 39 Tax Exempt Status ............39 Governing Law . . . . . . . . . . . . . . 40 Specific Performance . . . . . . . . . . . 40 Notices . . . . . . . . . . . . . . . . . 40 Signatures and Seals . . . . . . . . . . . 41 APPENDIX A . . . . . . Provisions Relating To Resource Integration and Supplemental Power Sales. . . . . . . . . 42 Exhibit I Cost of Service Methodology. . . . . . . . 57 Exhibit II Reserve Capacity Price for Each Contract Year. . . . . . . . . . . . . . . 61 Firm Capacity Price for Each Contract Period . . . . . . . . . . . . . . . . . . 61

e REFERENCE PAGE ARTICLE, SECTIONS, OR APPENDIX TITLES NUMBER APPENDIX A ...... Exhibit II Projected Monthly Installed Capacity . . . 62 Exhibit III Production Energy Charges. . . . . . . . . 63 Exhibit IV Resource List and Generation Accounting. . 60 APPENDIX B . . . . . . Provisions Relating To Transmission Service. . . . . . . . . . . 65 APPENDIX C . . . . . . Provisions Relating To Transmission Operations and Maintenance . 69 APPENDIX D . . . . . . Agreement for the Use of a Portion of Authority Microwave By Central for Land Management and Data Retrieval. . . . 77 APPENDIX E . . . . . . Sample Calculation Cost of Service . . . . . . . . . . . . . 80

l This Power Systems Coordination and Integration Agreement (hereinafter re-ferred to as the " Coordination Agreement") entered into on the day of

, 198 , by and between the South Carolina Public Service Authority (hereinafter refe_rred 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, ,

RECITALS Whereas, Authority owns and operates an electric power system consisting of electric generating, transmission, and distribution facilities; Whereas, Central is a generation and transmission cooperative which through wholesale purchases from Authority, furnishes electric power and energy at wholesale to its Member distribution cooperatives under all requirements con-tracts; Whereas, Central through loans from the United States of America (herein-after called the " Government") acting through the " Administrator of REA" hae constructed certain electric generating and transmission facilities and through certain lease and power contracts leased these facilities to Authority; Whereas, these certain lease and power contracts are by name and detail:

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

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

3. C Power Contract: Effective date, October 22, 1952; termination date October 22, 1987.

4. D Lease: Effective date, April 25, 1963; termination date, origi-nally July 1,1996, and extended to June 7, 2007, by terms 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 Lease (Amendment to the D Lease): Effective date, October 23, 1968; termination date originally June 1, 2000, but extended to June 7, 2007, by terms of the L Amendment to the D, E, F, G, H, and K Leases; date of last payment, November, 2005.

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

8. F Lease (Amendment to the D and E Lease): Effective date, April 29,

( 1971; termination date, originally June 15, 2001, but extended to June 7, 2007, by terms of the L Amendment to the D, E, F, G, H, and X Leases; date of last payment, November, 2008.

9. G Lease (Amendment to the D, E, and F Leases): Effective date, Octo-ber 10, 1973; termination date originally March 13, 2003, but extended to June 7, 2007, by terms of the L Amendment to the D, E, F, G, H, and K Leases; date of last payment February, 2010.

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

11. K Lease (Amendment to the D, E, F, G, and H Leases): Effective date, October 18, 1976; termination date, originally October 18, 2006 but extended to June 7, 2007, by terms of the L Amendment to the D, E, F, G, H, and K Leases; date of last payment, February, 2014.

12. L Lease (Amendment to the D, E, F, G, H and K Leases): Effective date, June 7,1977, termination date June 7, 2007, date of last pay-ment, February 2015.

Whereas, the aforementioned Contract Obligation contain provisions whereby Central is obligated to purchase, and Authority obligated to provide and sell, all of Central's electrical power and energy requirements during the term of such Obligation, which such provisions (collectively, "all-requirements provi-sions") may be amended by mutual agreement of Authority and Central, 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 Power Contract contains provisions whereby Central 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 provi-sfons") may be amended by mutual agreement of Central and the Authority with the consent of the Administrator of REA; and 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 option to purchase the facilities.

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 generatinn units at a generating facility known as the Cross Generating Station (he cinafter referred to as the " Cross Station") located near the community of Cross, South Carolina; and

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Whereas, Authority currently plans the Cross Station to ultimately house four coal-fired generating units, each unit to have a nominal net generating

- output capacity of 450 megawatts with the first unit (Unit Number Two) having a projected Commercial Operating Date of tiay 1,1984, and the second unit (Unit Num-ber One) having a projected Cocunercial Operating Date of November 1,1986. Units three and four are to be constructed as required to supply t'te load requirements of the combitied Authority-Central System; Whereas, Central desires an option whereby Central may acquire an undivided ownership tior.; and interest in each unit to be constructed at the Cross Generating Sta-Whereas, Authority, as tenant in comon with the South Carolina Electric and Gas Company, owns an undivided ownership interest in the Virgil C. Summer Nucle ar Generating Station currently being constructed by Authority and the South Carclina Electric and Gas Company; and Whereas, Central desires an option whereby Central may acquire an undivided ownership interest in the Virgil C. Sumer Nuclear Generating Station with such j

option to have a stated termination 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 Whereas, Authority desires an option whereby Authority may acquire an un-divided ownership in each and every future generating unit constructed by Cen-tral, or by Central and any other Party or Parties; and Whereas, Central desires to purchase and receive from Authority all of the electrical 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 transmission system to Central-owned transmission facilities and De-

, livery Points of Central's Members; and Whereas, Central desires to ultimately own all of the generating resources necessary to meet Central's total power requirements on a firm basis; and Whereas, 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 10, 1985, Central and Authority mutually desire to terminate and make void each and every provision of the A-B Agreement and super-sede each and every provision of such Agreement with this Agreement; and Whereas, Central and Authority mutually desire to terminate and make void each and every provision of the C, D, and F Power Contracts and supersede each and every provision of such Contracts with this Agreement; i Now, therefore, in consideration of the foregoing and the mutual covenants and agreements herein contained, the Parties hereto contract and agree as fol-lows:

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DEFINITIONS For the purposes of this Agreement the following definitions shall apply:

A.

Annual Territorial Peak Demand: The maximum coincident one-hour in-tegrated kilowatt demand of the combined systems of Authority and Central during the Contract Year, as defined in Appendix A hereto.

B. Bulk Power Transmission: Oserhead and underground transmission lines which serve a system-wide bulk load-carrying or reliability function, including (1) lines or line segments which at either end are connected to Capacity Re-sources, or (2) lines or line segments which at either end interconnect with other utility systems, or (3) lines or line segeents which at both ends are con-nected to lines described in (1) or (2) above whether or not transformation of voltage is involved. Bulk Power Transmission Facilities shall include all sta-tions from which emanate one or more Bulk Power tr ansmission lines or line seg-ments.

C. Capacity Resource: An electric generating unit, an ownership share in an electric generating unit, or the availability of electric capacity pur-chased from an electric generating unit or source arailable to provide the elec-tric power and energy requirements of Authority and/or Central.

D. Co-generation: The process whereby a waste or by-product of a gener-ating station is used by a separate entity, an industrial plant for example, in operation of the industrial plants production processes, and in turn, or, a waste or by-product of the industrial plant is used by the generating station in the generation process.

E. Contract Year: The period beginning at 12:01 a.m.

at 12:00 midnignt the following June 30. July 1 and ending F. Delivery Point: A 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 Central to a Central custocer or Member-Cooperative and in the case of Authority to an Authority Facility or to an Authority Customer.

G.

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

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

2. The control of operations and of maintenance of generating units, transmission lines, substations, and equipment, including compliance with environmental, operating, regulatory, reliability, and safety procedures.

i 3. The operation of transmission lines, switches, and related faci-lities.

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The negotiating and scheduling of power and energy transactions 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:

i electric generators, and auxiliary eqd "A station at which are located prime movers l water, chemical, solar or nuclear energy, nent for converting into electric energy.mechanical, falling J. Good Utility Practice: Good Utility Practice at a particular time means any of the practices, methods and acts, which, in the exercise of reason-able 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 significant por-tion of the electric utility industry known at the time the decision was made, would have be expected to accomplish the desired result at a reasonable cost consistent with reliab lity and safei.y. Good Utility Practice is not intended to be limited to optimum practice, method or act, to the exclusion of all others, but rather to be a number of possible practices, methods or acts.

K.

i 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 terms combined Authority-central System and Integrated Authority-Central Sys-tem shall, interchangably, mean the contiguous generation and transmission system owned and operated by the Parties as of January 1,1980, together with all trans-mission facilities and Eligible Capacity Resources available to the Parties which are from time to time connected to innd contiguous with the existing system.

M.

Territorial Reserve Margin: During either the current Winter or Sum-mer Contract Period, the amount, it any, by which the aggregate sum of the Net Dependable Capabilities of the Capacity Resources of Authority (less firm pur-chases 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 Re-serve Margin may be expressed as a percent of the Territorial Peak Demand with the Dependable Capabilities of the firm purchases of Authority and the firm purchases of Centr il removed from Capabilities and Demand.

N. Uniform System of Accounts: Means the Federal Energy Regulating Commission Uniform System of Accounts prescribed for Class A Utilities and Licensees in effect January 1,1980 as the same may be amended from time to time; provided however, if such accounting amendment shall cause a substantial change in the methods or results of computations of costs under this Agreement, the Parties shall attempt to agree upon the adoption, non-adoption or modifica-i tion of such amendment to prevent an inequity to either Party. Failing such l agreement, an Arbitral Tribunal shall resolve the disagreement pursuant to Arti-cle XIII hereof, in order to prevent an inequity to either Party. All refer-

[ ences to " Account (number)" shall refer to the Uniform System of Accounts as so defined.

Article 1. EXISTING AGREEMENTS Authority and Central acknowledge and confirm the existence of the A-B through L Leases mentioned in the Recitals portion of this Agreement.

Authority continues its sole responsibfifty and authority to possess, con-trol, 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, re-place, 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 Authority's intent to exercise Authority's options pursuant to the A-B, C, D, E, F, G, H, K, and L Leases to purchase the facilities covered by such leases, each such pur-chase to become effective no later than the latest date sicipulated in each such lease or amendment; provided, that the provisions of each such lease or amend-ment shall remain in effect until each such purchase shall have become effec-tive.

By mutual agreement, Authority and Central hereby terminate, vacate, and make null and void the C, D, and F Power Contracts and all amendments thereto and apersede such contracts, as amended, with this Agreement.

By mutual agreement, effective January 10, 1985, Authority and Central hereby terminate, vacate, and make null and void the A-B Agreement and all amendments ther.'to and supersede such agreement with this Agreement.

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

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Article II. JOINT COMMITTEES A. EXECUTIVE COMMITTEE There shall be established an " Executive Comittee" which shall be con-stituted by and act on behalf of the Parties on the matters and in the manner hereinafter set forth.

The membership of the Executive Comittee shall consist of one member of the Board of Directors of Authority and one member of Central's Board of Trustees, and the Chief Executive Officer of Authority and General Manager of Central. The appointment of each board member for each Party shall be confirmed in writing to the other Party. Each such appointment shall be for an indefinite term and may be terminated at any time upon written notice from the appointing Party to the other Party, which notice shall also name the successor to the mem-ber whose term is terminated.

The Executive Comittee shall meet not less often than semi-annually at the time and place designated by the Party having appointed the then current sec-retary. On written request of any member, the Executive Comittee shall convene a called meeting at the time and place designated by the Party having appointed the then current secretary, provided, however, that such called meeting shall be not more than thirty (30) working days after such request unless the member re-questing the meeting agrees to a later date.

There shall be appointed a secretary of the Executive Committee who shall not be a member of such Comittee and whose appointment shall rotate among the Parties, with the first secretary appointed by the Chief Executive Officer of Authority and the second secretary appointed by the General Manager of Central.

Each secretary shall serve for a term of two years comencing on July 1 of the change year, except that the first secretary shall serve through June 30, 1982.

The Party appointing each such secretary may terminate the term of such secretary and replace such secretary during the term thereof with another secretary with written notice to the other Party. The secretary shall be responsible for pre-paring and distributing mirutes of the meetings of the Executive Comittee and such other duties and responsibilities as may be agreed to by the Executive Com-mittee.

The Executive Comittee shall be responsible for (i) the implementa-tion and administration, on behalf of the Parties, of the provisions of this i

Agreement as hereinafter provided, (11) the resolution of disputes between the Parties arising under or relating to any provision of this Agreement, and (iii) such other matters as may be agreed upon among the Parties.

The Executive Committee shall develop such manuals of procedu ms e M y be necessary to implement and administer any transactions among the Partic.

No action shall be taken'by the Executive Comittee except by a major-ity vote of all members unless otherwise specifically provided in this or other agreements.

( Notwithstanding anything contained in this Agreement, no matter shall require the approval of the Executive Comittee or that of any other comittee created by this Agreement or by the Executive Comittee, unless such matter (1)

, Article II. JOINT CO MITTEES (cont'd) is specifically assigned to such comittee 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 Executtie Comittee, as hereinafter provided, submit such minutes to its Board for action and shall promptly notify the other Party of any action taken thereon.

B. SUBCOMITTEES The Executive Comittee shall not delegate its authority to others; however, the Executive Committee shall have the authority to appoint and direct standing or ad hoc subcomittees or task forces, the members of which need not be members of the Executive Comittee, 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 subcomittees; namely, the Planning Comittee and the Operating Comittee. The presen'. Au-thority-Central Engineering Comittee shall be superseded by the aforementioned subcomittees.

1. The Planning Comittee 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 terms and each such appointment shall be confirmed in writing by the appointing Party to the other. One member of the Planning Comittee shall be designated Chairman and such chairmanship shall rotate among the Parties, with the first chairman appointed by Authority, and the second chairman appointed by Central. Each chairman shall serve a term 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 confirmed in writing by the appointing Party to the other. If a chairman is unable to complete a term, an interim chairman shall be appointed by the vacating chair-man's Party to serve out the term. The Planning Comittee shall meet not less than quarterly 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 Comittee 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 terms and shall be confirmed in writ-ing by the appointing Party to the other. One member of the Operating Comittee shall be designated as chairman of the Operating Comittee, and such chairman-ship shall rotate among the Parties, with the first chairman appointed by Cen-tral and the second chairman appointed by Authority. Each chairman shall serve i' a term of two years, comencing 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-9 Article II. JOINTCOMMITTEES(cont'd) .

man is unable to complete a term, an interim chairman shallComittee The Operating be appointed shall by the vacating chairman's Party to serve out the term.

meet not less than quarterly and shall be responsible for the exchange of infor-mation and studies and analyses relating to matters i be specifically designated by the Executive Comittee or as otherwise specif ,

cally set forth in this Agreement.

Nothing in this Agreement shall prevent the Executive Comittee from dissolving the Planning Comittee or the Operating Comittee; provided, however, that in the event either commf ttee is dissolved, the r Committee or such other committee or comittees as the Executive Committee m designate.

C. GENERAL RULES _

Unless the Executive Comittee specifically agrees otherwise, the fol-lowing rules shall apply to all joint comittees formed 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 ing. No action shall be taken except by a majority vote of all members unless otherwise specifically provided in this or other agreements.

2. Each Party shall be responsible for the personal Allexpenses of its mem-other expenses bers and its other attendees at a meeting of a committee.n and paid as determined by the Executive Comittee.

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

4. The secretary of a comittee shall prepare and distribute draft min-utes of each meeting of the comittee Each memberbysh;11either promptly per (10) calendar days after the close of the meeting.

notify the secretary of his approval or of any correction to the minutes.

with members.

the members and shall promptly mail correcte the Parties' respective Boards and the approved minutes of any other shall be presented to the Executive Comittee.

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4 Article II. JOINT COMMITTEES (cont'd) 5.

Realizing that publication of information furnished hereunder by one Party to the other may detrimentally affect the furnishing Party, the Parties agree furnishing to keep confidential any such information upon the written request of the Party.

Public dissemination of such information by the furnishing Party shall constitute that specific information. a termination of the confidentiality requirement as to 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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r Article III. 0WNERSHIP OF CROSS AND SUMMER GENERATING STATION RESCURCES A. If the covenants of the Bond Resolution under which Authority's out-standing olligations have been issued require the retirement of any or all of Authority's Priority Obligations as a result of the acquisition of a portion of a 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 l

estate, of the Cross Generating Station. Such ownership if and when effectuated, shall be pursuant to an operation and ownership agreement to be negotiated between the Parties and timely executed. Central's execution of the negotiated operation and ownership agreement shall be subject to REA approval.

Notwithstanding this or any other provisions of this Agreement, such option to Central for each specific unit shall terminate if not exercised prior to the of the date specificAuthority unit. bonds are sold to finance the construction of any portion 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 an opera-tion and ownership agreement to be negotiated between the Parties and timely executed. Central's execution of the negotiated operation and ownership agreement shall be subject to REA approval.

( Notwithstanding this or any other provision of this Agreement, such Au-

.hority option to Central shall terminate if not exercised by January 1, 1981, and if exercised such purchase shall be contingent upon (1) Central's obtaining any and all necessary consents agreements or approvals from SCE&G and appropriate 90-vernmental regulatory bodies and (2) Authority's ability to comply with the cove-nants of the Bond Resolution under which its outstanding obligations have been is-sued and (3) Central covering any and all expenses er penalties the Authority has, will have, or is committed to pay to construct the said portion of the Summer Sta-l tion purchased by Central.

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4 Article IV. FUTURE GENERATING RESOURCES It is the Parties' intent to cooperate and coordinate the planning of future generating resources for their mutual benefit, and, in furtherance there-of:

A. Each Party, at the first regular meeting of the Planning Committee in each year, shall provide the other, through its respective representatives on such Committee, such Party's most current projections of that Party's annual Summer and Winter peak demands and annual energy requirements for the twenty (20) year period commencing with the immediately preceeding January 1. The Planning Committee shall review such projections and, to the extent necessary and practicable, reconcile any discrepancies, and combine such projections into a forecast of the peak demand and energy requirements of the combined Authority-Central system for such twenty (20) year period.

B. It shall be Authority's responsibility to develop a preliminary gen-eration expansion plan and to construct or otherwise acquire such new generat-ing resources as may be required and provided for in such generation expansion plan; provided, however, that Central shall have the option to acquire an undi-vided ownership interest in each such future generating unit pursuant to Sec-tion C below.

Authority shall develop such generation expansion plan based upon the projections of the future power and energy requirements of the combined Authori-ty-Central system described above, and present such plan to Central, through the Planning Committee, at a regular meeting of the Planning Committee not later than July 31 of such year. The anticipated Commercial Operating Date for additional

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future generating resources shall be that date at which time the Projected Terri-torial Reserve Margin falls below twenty percent (20%) unless otherwise mutually agreeable.

C. Subject to the provisions herein, Authority hereby grants Central an option to acquire an undivided ownership interest in each future generating unit, other than at the Cross and Summer Stations, to be constructed by or on behalf of Authority during the term of this Agreement. Such undivided ownership in-terest if any shall aui be less than fifteen percent (15%) nor shall it exceed the lesser of (i) forty-five percent (45;) or (ii) Central's contribution, expressed as a percent, to the Annual Te* ritorial Peak Demand of the combined Authority-Central system, as such contr'oution is projected for the first full year following the Commercial Operating Date of such generating unit. Provided, however, that the aggregate sum of the Net Dependable Capacities of the capacity resources of Central shall not exceed the sum of Central's contribution to the Annual Territorial Peak Demand of the combined Authority-Central system as sucn contribution is projected for the third full year following the Commercial Opera-ting Date of such generating unit, plus reserves related to such demands.

In the case of each such future generating unit, Authority shall give Central as much notice as practicable, but at least eighteen (18) months written notice of Authority's 'ntent to issue the first contracts or to sell bonds, whichever is earlier, for the construction of such unit. Central shall notify

Authority as to its intenticss as soon as practicable and Central's option with respect thereto shall expire if rot exercised in the manner hereinafter provided at least twelve (12) months prior to the projected date contained in the notice.

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i 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 if and when effectu-ated, shall be cursuant to an operation and ownership agreement to be negotiated between the Pa' ties and timely executed. Central's execution of the negotiated operating and ownership agreement shall be subject to REA approval.

D. Certral may construct or otherwise acquire and own generation re-sources to si rve all or a portion of Central's power and energy requirements; provided, that in case of each such resource, (1) Central has made all of the 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 Plan-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 Av.nority-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 mod-ifications and reinforcements have been made; and, additionally, Authority may require Central to provide and install such system protection and contrgi' equip-ment as Authority deems appropriate, consistent with Good Utility Prac+. ice, to protect the security and integrity of the combined Authority-Central system.

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-Central transmission system without coordinating such connection with the Planning Committee. Further, a non-conver.tional 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 resource is pro-posed.

Such resource will be evaluated as to its Net Dependable Capability based upon its ability to be utilized in a reliable manner to meet loads during l peak demand periods. Such Net Dependable Capability rating may be (1) estimated l prior to experience with the resource if such estimation can be made with reason-l able certainty or (2) determined after a period 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.

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Article IV. FUTURE GENERATING RESOURCES (cont'd)

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

F. For the purposes of the Provisions Relating To 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 thereunder; 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 percentage, 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. Pro-vided, however, that such resource shall be classified as an Eligible Capacity Resource if the Planning Committee determines 'het the addition of such resource, and itt 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 term "under con-struction" shall mean that a contractural obligation has been entered into which if cancelled or delayed would require the payment of cancellation or post-ponement costs; provided, however, if Central agrees to pay any such cancella-tion or postponement costs, such generating resource shall not be considered as "under construction" for purposes of this paragraph.

G.

Subject to the provisions herein, Central hereby grants Authority an option to acquire an undivided ownership interest in each future generating unit to be constructed by Central during the term of this Agreement. Such undivided ownership interest if any, shall not be less than fifteen percent (15%) nor ex-ceed 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 term 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 Capacity 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.

i 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 no-tice of Central's intent to issue the first contracts or to obtain funds,

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Article IV. FUTURE GENERATING RESOURCES (cont'd) whichever is earlier for the construction of such unit. Authorit Central as soon as pr,acticable as to its intentions and Authority'y shall notify s option with respect thereto shall expire if not exercised in the manner hereinafter provided at least twelve (12) months prior to the projected date contained in the no-tice.

Authority's option with respect to each such generating unit may be exercised by written notice to Central and such acquisition, if and when effec-tuated, shall be pursuant to an operation and ownership agreement to be nego-tiated between the Parties and timely executed. Central's execution of the nego-tiated operating and ownership agreement shall be subject to REA approval.

H.

The generation expansion plan shall be modified or adjusted appro-priately by the Planning Committee to incorporate each party's Eligible Capacity Resources, and such modified generation expansion plan shall be adopted by the Planning Committee r.ot later than January 1 of the following year as the offi-cial generation expansion plan of the Parties until the next such plan is adopt-ed the following year.

I. Notwithstanding any other provision of this Agreement it is the in-tent of both Parties to preserve the all-requirements provision of the Contract Obligation. Accordingly, both Parties agree that prior to January 10, 1985 Central shall not acquire or receive power and energy from any resource or r,e-sources other than those acquired by Central pursuant to such Contract Obliga-tion.

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Article V. POWER AND ENERGY RATES AND RE0VIREMENTS A. Subject to the provisions of Paragraph C of this Article V, beginning with the effective date of this Agreement and until January 10, 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 hereby agrees to sell and Central hereby agrees to receive and purchase all of 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 8 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 10, 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 (1) provided by Eligible Central Capacity Resources or (2) purchased from others for delivery points in territories not served by Central mem.

bers as defined in Article XIV Section B below or (3) purchased from others under arrangements in effect as to Central or any of its members as of June 30, 1979 in-cluding arrangements with the Southeastern . cower Administration and any modifica-tions thereto and any increases in energy or 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 supplemental power requirements, and any other sales of capacity, energy, and services between the Parties. It is recognized that different cost of service methodologies might have been 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 customers and to Central's members and/or retail customers of Ccntral's members.

C. Authority and Central shall use their best efforts to implement the pro-cedures and place in effect any ar.d all charges applicable under this Agree-ment and its Appendices. Until the date of implementation the subject services shall be pro-vided 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 from 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 and shall be no earlier than January 1,1983, and no later than July 1,1984, unless otherwise mutually agreed.

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 determine (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 fis-i

Article V. POWER AND ENERGY RATES AND REQUIREMENTS (cont'd) cal years covered by the rate study. No earlier than April 1 of each year Authority shall review the cost data used to determine the fixed charges to be-coae effective the following July 1 and adjust such fixed charges to reflect then current cost data.

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 he 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 co-ordinate 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 associated with the purchase and delivery of any and all power and energy so obtained from outside 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.

I 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 terms and conditions as contained in this Agreement and Appendix B.

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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 con-struct and own future generating facilities pursuant to Article IV herein, and (3) on the Parties respective transmission system requirements as presented to the Planning Comittee, 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 supply-ing the total present and anticipated future transmission requirements of the Parties and to maintain the integrity of such combined system.

Such plan shall be submitted to Central through the Planning Comittee and, subject to the provisions of this Agreement, Authority shall give good faith consideration to the coments 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 possible, the duplication of such future facilities.

C. Subject to the provisions of this Agreement, the Planning Comittee shall, pursuant to the provisions of Section E of this Article, determine 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 Comittee to Authority and Central with a sixty (60) percent ownership accruing to Authority and a forty l (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 Comittee.

Estimated miles of transmission line and substation constructicn 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 Comittee shall be informed by the subject Party of 4

the actual data, which actual data shall then replace the estimated data on the running total list maintained by the Planning Committee.

Article VII. TRANSMISSION SYSTEM COORDINATION (cont'd)

There shall be no joint ownership of transmission facilities but separate and distinct line, line segments, and entire substations and transmission struc-tures shall be indentifiable as to ownership by the Parties individually.

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 power facilities but including the M Loan Facilities, in the planning, design, or con-struction stage which have been (i) presented to the Author-ity-Central Engineering Committee prior to January 1, 1980, as facilities to be owned by Central or (ii) 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 members 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 pro-vided however no such line shall extend past a point of con-tact 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.

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Article VII.

TRANSMISSION SYSTEM C0 ORDINATION (cont'd) l (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.

2. Authority:

a. Facilities owned by or leased to Authority.

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

c. Future radial facilities to serve only Authority customers.

Central or Central Members are not considered Authority cus-tomers for this purpose.

d. Future Delivery Points to serve any Authority customer.

Central or Central members are not considered Authority cus-tomers for this purpose.

e. All Bulk Power facilities as specifically defined in the Definition Sectic.a 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 facilities by ifne 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.

F. Upon timely written request of Central, given from time to time 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.

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s Article VII. TRANSMISSION SYSTEM COORDINATION (cont'd)

G.

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

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

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ARTICLE VIII. DELIVERY POINTS A.

system. Either party may connect any new Delivery Point to the transmission 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 im-provement or responsible for buf1 ding the necessary facility under the pro-visions of Article VII hereof shall promptly take all necessary steps to make such improvements.

improvements are made. No new Delivery Point shall be connected until the required B. A Central Delivery Point may be terminated by mutual agreement of the parties and neither party shall unreasonably withhold its agreement.

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.

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Article IX. ELECTRICAL CHARACTERISTICS A.

All power and energy to be furnished hereunder by either Party to the other shall be alternating current, three-phasc, 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 ener-gy in such manner that the load at each point of delivery shall not be un-balanced 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 with-in 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 the 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 disturb-ances. 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.

practicable. Both Parties shall maintain a power factor of as near unity as If at any time the power factor is found by the Operating Commit-tee 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 Article X. DISPATCHING SYSTEM AND OPERATION OF CAPACITY RESOURCES AND TRANSMIS 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 maintained and operated in accordance with Good Utility Practice and in accordance with standards, methods, and/or pro-cedures 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 Maintenance 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 dis-patch by Authority.

C. MAINTENANCE AND REPAIRS Each Party shall, to the fullest extent practicable: (a)causetrans-mission facilities owned or controlled by it, and generating facilities in which it has an ownership interest, to be withdrawn from operation for maintenance and repair only in accordance with maintenance schedules established or approved by the Operating Committee from time to time; (b) restore such facilities to good operating condition with reasonable promptness; and (c) in emergency situ-ations, accelerate maintenance and repair in accordance with established pro-cedures.

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.

E. ENERGY TRANSACTIONS WITH OTHERS

( In furtherance of the above stated objectives, Authority shall be Cen-

Article X.

DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND TRANSMIS SYSTEM (cont'd) tral's sole agent for entering into short-term energy transactions with other utility systems.

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. Furtner-more, any sales of energy to others from any resources of Authority or Central shall be made by Authority without regard to ownership so as not to make an ad-verse 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 och 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 fa-cilities and all costs incurred by Authority associated with additional record-keeping, accounting, and reporting occasioned by this Paragraph. 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 Con-trol and Load Dispatching, of the Uniform System of Accounts. Such portion is to be determined 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- )

i tral's ownership shares in such resource, of the costs so allocated to each gen-erating resource in which both Central and Authority have an ownership in-terest.

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

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i Article X.

DISPATCHING AND OPERATION OF CAPACITY RESOURCES AND T SYSTEM (cont'd)

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

connection to cover the capital costs of any equipment acquired by Authority in i Any dispatch related capital improvement which would result in the allocation to Central of fifty thousand dellars ($50,000) or more shall be sub-mitted thereof.to the appropriate subcommittee for review and analysis prior to purchase Beginning in the calendar year in which this Agreement becones effec-tive, the $50,000 threshold shall be increased or decreased in relation to the annual National Consumer Price Index (or successor index) published by the BureauAgency.

cessor of Labor Statistics of the United States Department of Labor or its suc-Authority shall bill Central for Central's share of such costs as such costs are incurred, and Central's paynent therefor shall be in accordance with Article XII herein.

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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 l or points of actual delivery.  ;

l B. Authority shall install, operate, maintain, and read the meters at each delivery point which Authority determines is necessary to properly meter deliveries to Cent,al. Central shall supply without cost to Authority a suit-able place for installing Authority's metering equipment. Central may at its i 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 testing and Central l 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 normal 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 normal, then the reading of such meter previously taken for billing pur-poses 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 be-low normal, the expense of the test shall be born by Central.

F. Authority's meters shall be read as nearly as practicable at regular t

intervals of not less than twenty-eight (28) days or not more than thirty-two (32) days, so as to permit the rendering of twelve monthly bills during each contract year.

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 normally 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 the actual number of days between meter readings. All billings rendered to Central under this Agreement, exccot' s 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) dafs after such bill is rendered, interest at the rate of Morgan Guaranty Trust Com-pany 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 available 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 shall, immediately upon notice, cease such unsafe practice or remedy such violation.

E. Where all service is discontinued for cause constituting substantial breach as discussed above, Authority may terminate 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 1

, provided by law.

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l 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 Exec-utive Consnittee shall be settled by an Arbitral Tribunal as hereinafter pro-vided, with the exception, however, of issues relating to provisions of this Agreement which are specifically exempted from arbitration.

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 sna11 be exempt from Arbitration hereunder if the Joint  !

Ownership Agreement provides for the resolution of disputes by disinterested parties or a tribunal (other than by a Court). )

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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- i 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 suitable financial judgment. ,

judgment shall be determined by the Arbitral Tribunal. Such financial or other j Notwithstanding other provisions of this Agreement 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 that the other po-sition or positions would create an immediate danger to the safe operation of the ,

System or it is necessary to obtain the approval of or to comply with require- j ments of governmental agencies having jurisdiction, such Party may proceed in -

accordance with its position with res;'ect to such matter until it has been re-solved by the Arbitral Tribunal.

If the Arbitral Tribunal orders a course of action which such Party determines would create a danger to the safety of the  !

combined system of Authority and Central or would violate regulatory requirements 1 of any governmental agency having jurisdiction, it may nevertheless proceed in accordance with its position subject to a suitable financial or other adjust- )

ment. Such financial or other judgment shall be determined by the Arbitral Tr$- l bunal.

B. Either party may initiate arbitration by giving the other party written notice stating the question or questions to be arbitrated, the amount in dis-pute, 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 be appointed in the following manner:

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

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2. Within twenty-one (21) calendar days after receipt of such no-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 l remedy or remedies sought.  ;

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 twenty-one (21) calendar days after receipt of written notice of 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 which 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 United States Judicial Cir-cuit, or failing appointment by him, by any Judge of the Circuit Court of South Carolina having jurisdiction of the dispute sought to be arbitrated. The third arbitrator shall not be connected with either of the Parties. The third arbitrator shall be 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 Arbitral Tribunal shall convene at such time as shall be fixed by the Chairman. Thereafter, the Arbitral Tribunal shall determine when it shall 4

sit.

G. 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 determine 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 it shall declare the hearings to be closed. The award may be rendered 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 per-formance. A signed counterpart of the award shall be transmitted to each Party.

Any such award rendered in accordance with the provisions of this Article shall

, be final and binding upon the Parties, and each Party shall abide by and comply with any such award.

I. Each Party shall pay the remuneration and expenses of the arbitrator

, it selects. The remuneration and expenses of the Chairman of the Arbitral l 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 Arbitral 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 1

Article XIII. ARBITRATION (cont'd) costs of the Chairman of the Arbitral Tribunal and any third persons or the pro-cedure for payinent of such costs shall be determined by the Arbitral Tribunal.

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

K.

l If any arbitrator appointed in accordance with this Article shall re-sign, 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 original arbitrator. Unless the Parties shall agree otherwise, the arbitral proceedings shall be resumed at the point at which they were interrupted by such i

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-i

' tion is initiated by counsel, or where counsel replies for the other Party, such notice is deemed to have been given.

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ine 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 otherwise agree.

N.

The Parties may offer such evidence as they desire and shall produce such additional evidence as the Arbitral Tribunal may deem necessary to an understanding and determinatior 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 conformity to legal rules of evidence shall not be necessary. All evidence shall be taken in the presence of j all the arbitrators and of both Parties except where either of the Parties is i absent after due notice, or is in default or has waived its right to be present.

i 0. The Arbitral Tribunal may issue such orders as it may deem necessary j to safeguard any property which is the subject matter of the arbitration without prejudice to the rights of the Parties or the final determination of the dis-pute.

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

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Article XIII. ARBITRATION (cont'd)

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

R. Eitner 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 judgrent by execution and may pursue any other appropriate remedy against such other Party for the enforcement of the award.

S. Any arbitration under this Article shall be governed u'y 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 in-valid under such statutory arbitration law, such provision shall be of no effect without, however, invalidating any other provisions hereof.

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

U. Notwithstanding any other provision contained herein to the contrary, no dispute shall be arbitrable hereunder unless:

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) pub-lished by the Bureau of Labor Statistics of the United States Department of i

Labor or its successor Agency.

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

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

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Article XIII. ARBITRATION (cont'd)

X. Trial De Novo When the prevailing Party to an arbitration applies to the court for enforcement of the arbitration award and the court determines that one or mor 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 performance 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 eny 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 terms of this Agreement.

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B

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Article XIV. MISCELLANE0US A. EFFECTIVE DATE AND TERM This Agreement shall become effective upon approval in writing by the Admin-istrator of REA; provided, however, that if such approval by the Administrator of REA is not forthcoming by January 20, 1981, 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 thirty (30) years from the effective date set forth hereinabove. Thereaf ter, this Agree-ment shall be automatically renewed for consecutive subsequent terms of thirty (30) 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 ter-mination 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.

Horry 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 with-in 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 Agreement; 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 provided 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 i not be liable for damage occasioncd by interruptions to service or failure to s

Article XIV. MISCELLANE0US (cont'd) 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 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 performing 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 generating or transmitting, facilities flood, fire, strike or action or order of any agency having juris-diction in the premises or the inability, despite timely good faith attempt, to obtain any necessary certificate, permit, approval or the like from any agency having jurisdiction in the premises, including REA.

E. SUCCESSORS AND ASSIGNS This Agreerent 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, withort the con-sent of Authority, by Central to the United 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 un-der foreclosure of said mortage in the event of default by Central there-under.

F. SELLING OR LEASING 0F 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 the Administrator of REA, to terminate any existing leases of Central facilities to Authority. In such event, Central shall pay to the Authority the excess, if any, of Net Book Value of such system or part thereof over the principal remain-ing to be paid thereon. If, however, the Net Book Value shall be less than the principal remaining to be paid on the loan or loans, the Authority shall pay the difference to Central. In any event, the Authority shall pay to Central inter-est on the applicable lease loans up to the date possession is acquired by Cen-tral. " 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 individual rates calculating a com-posite rate of less than 2.52% per year, on depreciable plant, figured on a straight-line basis. An average rate of not less than 2.74%, on the depre-ciable transmission facilities, per year shall be used. Notice of election to exercise said option shall be given by Central to the Authority or its lessee or

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Article XIV. MISCELLANE0US (cont'd) purchaser within six (6) months after written notice has been received by Central 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 rir its to the purchase or lease of such System to the extent permitted by law and upon approval of REA, 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 then member of Central or any REA borrower, or direct transfer to any then member of Central or any REA borrower.

2. Merger or consolidation of Central 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 borrowe='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 location of such easements and rights of way shall be mutually agreed upon by the Parties through the Joint Committees.

I. ENTRY OF PREMISES Either Party shall have the ri to read, maintain, install, renove,ght to enter inspect, theand test premises of entering alter the the otherParties Party meters, poles, conductors, appurtenances and other equipment located thereon.

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 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, and with all due diligence, remove such equipment at the owner's sole cost and expense, repair

s Article XIV. MISCELLANEGUS (cont'd) i any damage to the other Party's property caused by such removal, and restore the premises to the condition in which they existed before such equipment was in-stalled.

K. INDEMNIFICATION l

l 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-ances and apparatus used in connection therewith. Neither Party shall be re-sponsible to the other for the transmission or control of electrical energy be-yond 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 harmless from any and all legal and other expenses, suits, claims, damagas, costs, fines, penalties, liabilities or other obligations of whatsoever kind, including but not limited to damage or destruction of property 1 and injury or death of persons, resulting from or connected with the indemnify-ing Party's performance under this Agreement, including but not limited to the operation, maintenance or defective condition of such Party's equipment, or any act or omission of such Party's officers, employees, and agents 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.

! L. INTERPRETATION AND CAPTIONS

1. If any provision of this Coordination Agreement or any of its Appendices is in conflict with any provision of any prior dated i

' agreement, the provisions of this Coordination Agreement shall prevail.

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

M. AUDIT l

1. Notwithstanding any other provision contained herein to the con-trary and in addition to any other rights Central may have under this Coordination Agreement, Central shall have the right at any time, to audit Authority's books at Central's expense.

2. Notwithstanding any other provision contained herein to the con-trary and in addition to any other rights Authority may have un-der this Coordination Agreement, Authority shall have the right t

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

N. 0

_C_0VNTERPARTS This Coordination Agreement may be executed in any number of original counterparts. All such counterparts shall ccnstitute but one and the same Co-ordination Agreement.

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s Article XIV. MISCELLA TS lcoct'd)

0. 5E!Eri.3ILITY If any provision of this Coordination Agreement is held invalid or unen-forceable by any governmental 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

1. If any provision of this Coredination Agreement would, in the opinion of the United States Internal Revenue Service, contained in a Ruling to be promptly applied for by the Authority and thereafter issued, cause any obligation of the Authority 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 America, and if, upon demand by Central for judicial review under Section 7478 of the Internal Revenue code of 1954 as amended, the declaratory judgment or decree issued, as finally affirmed after such available appeals as Central shall demand, shall hold that any provision of this Coordination Agreement would cause any obligation of the Authority to be an " Industrial Development Bond" as defined above, the Parties hereto shall negotiate in good faith for the purpose of reaching mutual agreement upon a substitute provision which would, in the opinion of the United States Internal Revenue Service contained in a Ruling to be promptly applied for by the Auth-ority and thereafter issued (and judicially reviewed upon demand by Central as hereinafter set forth), result in such obligation not being subject to treatment as an " Industrial Development Bond".

! i. Failing such agreement an Arbitral Tribunal shall, pursuant to Article XIII hereof, resolve the tax exempt status related disagreement, excepting tax exempt status related disagreements involving the pricing of Central's Supplemental Power and Energy Requirements under Article VI (Firm Supplemental l Purchases) of Appendix A of this Ccordination Agreement, by amending this Agree-

) ment to the minimum extent necessary to avoid such adverse tax treatment.

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11. Failing such agreement on tax exempt status related items involving the pricing of Central's Supplemental Power and Energy Requirements under Article VI of Appendix A, such pricing provisions of Article VI of Appendix A shall be null and void and supplanted by the Cost of Service Methodology then in use by Authority in Electric Rate Studies to determine Net Revenues of the System as defined by the Authority's August 31, 1971 Bond Resolution, as amended and supplemented, if the substitution of such Cost of Service Methodology is nec-essary to avoid such adverse tax treatment.

2. If, in the opinion of the United States Internal Revenue Service contained in a Ruling to be promptly applied for by the Authority and there-after issued, this Coordination Agreement, in its entirety, would cause any obligation of the Authority to be an " Industrial Development Bond" as defined

! above, and if, upon demand by Central for judicial review under Section 7478 of the Internal Revenue Code of 1954, as amended, the declaratory judgment or decree issued, as finally affirmed after such available appeals as Central shall demand, shall hold that this Coordination Agreement in its entirety would cause any obligat%n of the Authority to be an " Industrial Development Bond" as de-l fined above this contract shall be null and void and the C, D and F Power

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Article XIV. NISCELLA.:EOUS (cont'd)

Contracts, including Amendment No.11 to the F Power Contract, shall be reinstated as contracts between the Parties according to their respective terrs and provisions.

3. If an adverse Ruling as described in Paragraphs 1. and 2. above (which shall include a declination to rule by the United States Internal Revenue Service) is obtained from the United States Internal Revenue Service, the Parties hereto shall negotiate in good faith for the purpose of reach-ing mutual agreement upon substitute provisions which would result in any obligation of the Authority, including those necessary to be issued during the pendency of any appeal from such adverse Ruling (or declination to rule),

not being subject to treatment as an " Industrial Development Bond" as de-fined above. During the period of time between such Ruling and the earlier of (1) the amendment of the Coordination Agreement pursuant to such nego-tiations, including the obtaining of a favorable ruling from the United States Internal Revenue Service thereon if necessary (2) a subsequent favorable ruling from the United States Internal Revenue Service or (3) a final and unappealable favorable decision of a federal court, this Agreement (other than this Section) shall be suspended and of no effect and the C, D and F Power Contracts, including Amendment No. 10 and Amendment No. 11 to the F Power Contract, shall be reinstated as contracts between the Parties according to their respective terms and provisions, including the present term of such contracts; provided, further, that if and to the extent the Parties can identify elements of the Coordination Agreement which, if effective, would not adversely affect the Tax Exempt Status of the Authority's obligation, such identified elements shall be added to the C, D and F Power Contracts as amendments thereto. Upon the issuance of a favor-able ruling or decision, upholding in all respects this Coordination Agree-ment as originally executed, as referred to in (2) or (3) above of this Para-graph 3, the Coordination Agreement as originally executed shall be reinstated between the Parties. In the event of a final and unappealable unfavorable decision of a federal court, the contract in effect between the Parties immed-iately prior thereto shall continue in effect (but for no longer than the terms of such contract specified therein) while the provisions of Paragraph 1. and 2.

of this Section P are complied with by the Parties.

This Section shall survive termination of this Agreement and become part of the F Power Contrac' if such termination is caused by Authority's loss of Tax Exempt Status-l

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s Article XIs. MISCL. LANE 005 (cont'd)

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 Co-ordination Agreement and its Appendices, the Parties shall negotiate in good faith for the purpose of reaching a mutual agreement which will be fair to both if circumstances dices to: require a change in this Coordination Agreement or its Appen-1.

Remove any grossly unfair or unjust burden imposed on either Party or its customers by operation of any part of this Coordination Agreement. ,

2. Comply with final rulings of any governmental authority or court having jurisdiction over the subject mat:7- 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 i amedy 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 Agreement.

S. NOTICES Any notice or communication required or permited 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 i Moncks Corner, SC 29461 '

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Article XIV. MISELLANE0VS (cont'd) I 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.

IN WITNESS WHEREOF, the Authority, pursuant to a resolution duly adopted by its Board of Directors, has caused this Coordination Agreement 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 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.

SOUTH C R NA PUBLIC ERVICE AUTHORITY Attest:

'd /1 ]/ BY .' /[// N (b Y I Ol I1 !i? ll 12 15 8e Secretary President [

ftENTRAL ELECTRI ' POWER 030 PEP I E, NC .

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BY L .

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/2./z . 8o Secretary \ ,

President l\

(SEAL) '

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APPENDIX A PROVISIONS RELATING TO RESOURCE INTEGRATION AND SUPPLE" INTAL POWER SALES ARTICLE I. DESCRIPTION OF SERVICE A. SALE AND DELIVERY OF POWER Subject to the provisions of this Appendix and the Coordination Agree-ment, Authority shall sell and deliver and Central shall purchase, receive, and pay for all of Central's electrical power and energy requirements in excess of that supplied by Central's Capacity Resources except, however, (1) power and ener-gy requirements parchased from others for delivery points in territories not served by Central's members at defined in Article XIV, Section B (of the Coordina-tion Agreement), (2) power and energy requirements under arrangements in effect as to Central or any of its aembers as of June 30, 1979, including arrangements with the Southeastern Power Acninistration and a1y modifications thereto and any in-creases in energy or capacity allocations tnereunder, 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 points of interconnection with other utility companies, 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.

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s APPENDIX A ARTICLE II. GENERAL TERMS AND CONDITIONS A.

ESTIMATED AND ADJUSTED BILLINGS In preparing Monthly Billing Statements for services rendered here-under, the determination of capacity charges pursuant to Articles VI and VII herein shall be predicated initially on the basis 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 Con 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 bfils 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 ren-der a Preliminary Billing Statement to Central based on such estimates. Payment of such Preliminary provisions Billing Statement of the Coordination Agreement. by Central shall be subject to the Payment As soon as actual fuel cost data becomes ovailable 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 after the close of such Monthly Bfiling Period.

B.

TEST RATING OF CAPACITY RESOURCES i each Capacity Resource in order to determine its Net Dependabl the purposes of this Appendix. Such rating and evaluations shall be made in accordance with Good Utfifty Practices (as defined in accordance with the Coor-w - , . - - . .-__,- , _ -,y.-- , ,_ _ ., - - - , , - , , , . , , , , - ,,, ._, _ - ,

r 1 1

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APPENDIX A discriminate between the Paroies.dination Agreement) and shall b o unduly

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1 thebepurpose may of rating present to observe such test. such generating unit, and r es rep i The costs of such test of a generating Party if the requested test results in a rating n above or below the rating theretofore utilized.

of testing its own generating unit accomplished at its own Ifrequest.Each the eval-cent (5%) either above or below the rating theretof -

test, and the resulting rating shall be utilized ngfor the hereunder and thereafter until the next testing and rating.

C.

MAINTENANCE SATURATION t

For the purposes of this Appendix, the integrated system of Au and Central shall be deemed to be " Maintenance Saturated" during a if the Planning Committee determines that capacity was added m for to the the reason that Authority or Central, reserve margins at other times during the Contract Year in order to maintain adequate ng ope have planned or sched-l for the time of the expected Annual Territorial However, such Peak De ,

1 determination shall be made without regard to generating units e ynot oper one of the Parties or generating units over control with respect to the scheduled maintesance thereof.

which the Parties otherwise h that the combined system of Authority and Central is Ma determination of the Territorial Reserve Margin for the Contract,which the Period in the Annual Territorial Peak Demand occurred shall be adjusted upward wnward or only for the purposes of determining Central's Reserve Capacity Requir pursuant to Article VII Section A, herein to properly account for the Net Dependable Capability of those Capacity Resources or portions there added to the system in consideration of such Maintenance Saturation.

D. j OTHER TERMS AND CONDITIONS k

i with the provisions of the Coordination Agreement.All service provil The calculations and accounting for all costs and services under 1 i

Appendices A and B, including the Cost of Service hereto as Appendix E and made a part of this Agreement.

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APPENDIX A ARTICLE III. DEFINITIONS For the purposes of this Appendix and unless otherwise defined herein, the following terms shall be defined as follows:

i Contract Period:

i Period. A sumer contract Period Either a Sumer Contract Period or a Winter Contract shall be the period beginning 12:01 a.m. on l

July 1 and ending 12:00 midnight on the following December 31. Winter Contract Period shall be the period beginning 12:01 a.m. on January 1 and ending 12:00 l

midnight on the following June 30.

l Coordination Agreement: The " Power System Coordination and Integra-tion Agreement" between south Carolina Public Service Authority and Central l Electric Cooperative, Inc., to which this Appendix A is attached and made a I part of.

Firm Purchases: Electrical capacity and energy purchases from another party, generally not from specific or designated generating units, which are in-tended to have associated with them sufficient reserve capacity so as to be con-tinuously available except during the most severe emergencies. For the purposes of this Appendix, Firm Purchases from others must carry a level of reserves or reliability at least equal to those of the overall combined Authority-Central System.

l Net Dependable Capability:

' The maximum net dependable generation out-put level in megawatts, exclusive of station use, that can reasonably be expect-ed to be maintained by such Capacity Resource during peak demand periods. Such i

Net Dependable Capability shall be determined or adjusted for losses so as to reflect the net maximum power available from such Resource at the bus bar at the high-voltage side of the associated Generating Station substation if such Capa-city Resource is a generating unit or units located on the intergrated trans-mission system of Authority and Central. If such Capacity Resource is the availability of capacity and energy purchased from another utility system, the Net Dependable Capability shall reflect the net maximum power available at the time of the annual peak demand of the integrated Authority-Central System at the point or points of delivery of such power and energy to the Authority's system.

Peak Periodt Either a Suniner Peak Period or a Winter Peak Period. A Summer Peak Period sn'all be the period beginning 12:01 a.m. on June 1 and end-ing 12:00 midnight on the following November 30.- A Winter Peak Period shall be the period beginning 12:01 a.m. on December 1 and ending 12:00 midnight on the following May 31.

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

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a 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 of the various generating station substations of the integrated system and at theutility other bus bars at the Authority's side of the points of interconnection with systems. If Authority deems it impractical to meter or measure l all or portions of the Territorial Demand at one or more such points, Authority may meter or measure such net energy input where practical, and the resulting i readings or measurements shall be adjusted appropriately to compensate for los-ses between the points of actual metering or measurement and the high-voltage bus bars of the Generating Station substations and/or the bus bars on Author-ity's side of points of interconnection with other utility systems.

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

mined as follows: The Territorial Peak Demand for each Contract Period shall be deter-the Summer Territorial Peak Demand shall be the maximum Ter-ritorial Demand occurring during the most current Summer Peak Period; the Win-ter Territorial during the most Peak Demand current Wintershall be the Peak maximum Territorial Demand occuring Period.

Demand occurring The Annual Territorial during the thanPeak current Demand contractshall Year.be the maximum Territorial B.

CENTRAL'S CAPACITY AND ENERGY REQUIREMENTS l

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 during such hour as metered or measured at the Points of Delivery in accordance with the Coordination Agreement.

Central's Total Demand in each hour shall be further adjusted for losses between the Points of Delivery and the high-voltage uus 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 withPlanning the other utility systems in a manner to be determined from time to time by Committee.

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

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

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

s APPENDIX A C.

AUTHORITY'S CAPACITY AND ENERGY REQUIREMENTS l

Authority's Net Demand in each hour shall be determined as (i) the I Contract Period Territorial Demand in such hour, less (ii) Central's Total De-mand, adjusted for system losses, in such hour.

Authority's Net Energy Requirement for any time period shall be de-termined as (1) the Territorial Energy Requirement for such time period, less (ii) Central's time period. Total Energy Requirement, adjusted for system losses, for such Authority's Coincident Peak Demand shall be Authority's Net Demand occurring at the time of the contract Period Territorial Peak Demand for the then current Contract Period.

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

APPENDIX A ARTICLE 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, gene-rated or produced from such Capacity Resource during such time period that is avafiable from such resource as input into the integrated Authority-Central transmission system.

Such Net Generation shall be metered or measured at the high-voltage bus bars of the various Generating Station substations in the case i

of generating units or at the points of delivery to Authority's system in the l

t 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 ad-justed appropriately to compensate for losses between the actual point of metering or measurement and the high-voltage bus bar to the Generating Station substation or the points of delivery to the Authority's system.

2. The Net Fuel Cost of a Capacity Resource during any time period shall be determined as fo!Iows:

The Net Fuel Cost of a generating unit shall be the dollar cost of fuel or burned or used during such time period, as recorded in Accounts 501, 518, 547. The Net Fuel Cost of a purchased power resource or transaction shall be the total net cost of the energy, exclusive of demand and station or custo-mer 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 i

energy associated with such purchases, net cost of energy shall be estimated in a manner similar to the manner in which the Net Fuei Costs of generating units are determined.

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 r

Capacity pendix soResource as to account of such for Party shall be increased for the purposes of this Ap-such tax.

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! 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 divided by the Net Generation of such Capacity Resource during such month, both as de-fined above.

4. It is recognized that from time to time Authority may enter into power and energy transactions with other utility systems, such transactions re-presenting 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 transmission 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, 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.

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l l APPENDIX A I

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 t Dependable Capability of zero and included in the Resource Classification List at a position directly below that Capacity Resource having an Average Fuel Cost i

most nearly equal to but not less than that of such transaction. In the case i 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 and Net Fuel Cost, respectively, associated with such sale.

This procedure notwithstanding, if an energy transaction with another utility systen can otherwise be identified as being directly associated with one or more particular Capacity Resources, then the Net Generation and Net ,

l Generation Cost of such particular Capacity Resource or Resources shall be in-creased or reduced by the Net Generation and Net Fuel Cost, respectively, of such transaction.

5. ,

i The Variable Operation and Maintenance Rate of each Capacity Re-source shall be the estimated average annual Var 1able 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 i

attached hereto. The Variable Operation and Maintenance Rate for Central's Ca-l pacity Resources shall be determined in the same manner as then currently used by Authority and Authority's Capacity Resources.

6. The Incremental Cost of each Capacity Resource in each month shall be the sum of (1) 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.

t B. RESOURCE LIST t

For each month, there sh111 be prepared a Resource List. The Re-source 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 Re-source with the highest Incremental Cost.

C. ENERGY ACCOUNTING 1.

! The Expected Generation of each Capacity Resource of each Party 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 of such Capacity Resource, Party during such and hour.(ii) the Demand, appropriately adjusted for losses, The Expected Generation of each successive Ca-pacity Resource of such Party shall be the lesser of (f) the Net Dependable Capability of such Capacity Resource, and (ii) the amount, if any, by which such Party's total Demand, appropriately adjusted for losses, in such hour ex-i ceeds the aggregate sum of the Expected Generation of all other Capacity Re-sources of the Party below or lower than such Capacity Resource in the Resource List.

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l APPENDIX A

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

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3. The Replacement Energy Requirement of a Capacity Resource in each

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hour shall be the amount, 11' any, by which the Expected Generation of such re-source in such hour exceeds the actual Net Generation of such Resource in such hour.

4. For the purposes of determining Back-up and Economy Energy trans-l actions 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 Re-source List and proceeding to the bottom, the Replacement Energy for the Capac-ity Resource highest on the Resource List which has a Replacemer.t Energy Re-quirement shall be deemed to be suppifed from the Surplus Generation or por-tions thereof of the Capacity Resource or Resources highest on the Resource List from which Surplus Generation is available. Replacement Energy for each i

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 Resource 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 former 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 En-ergy.

When Replacement Energy for a Capacity Resource of one Party is sup-plied (in the manner hereinabove described) from one or more Capacity Resour>es l

' of the other Party lower on the Resource List than the Resource for which sr, Replacement Energy is thus supplied, such Replacement Energy shall be deeme <

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 cur-rent Incremental Cost of the Capacity Resource for which such Economy Energy is purchased and (ii) the current Incremental Cost of the Capacity Resources from which such Economy Energy is supplied.

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APPENDIX A ARTICLE VI. FIRM SUPPLEMENTAL PURCHASES Central shall purchase and receive from Authority all of Central's Supplemental Power and Energy Requirements, as defined herein, and pay Author-ity for such purchases at the prices determined in the manner described herein-below.

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

l l Central's Supplemental Power Billing Demand shall be determined as

follows

for each month of a Summer contract Period, Central's Supplemental Power Billing Demand shall be Central's Supplemental Demand which occurred at 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 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 Generation of all of Central's Capacity Resources for such Monthly Billing Pe-riod.

B. PRICES FOR FIRM SUPPLEMENTAL POWER AND ENERGY

1. Supplemental Capacity l

The price per kilowatt of Central's Supplemental Power Billing Demand

! shall be determined in the following manner:

a. Prior to the beginning of each Contract Year pursuant to Ar-ticle V Section D of the Coordination Agreement, Authority shall prepare or have prepared a Cost of Service Study to determine its projected Annual Revenue Requirements for that Contract Year as functionalized or classified as between the following classifications of costs:

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

b. Such Cost of Service Study shall be prepared in accordance with the Partial Requirements Cost of Service Methodology attached hereto as l r 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 I to review such study and

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a APPENDIX A submit Central's comments thereon for consideration by Authority. Authority shall consider such comments at a regularly scheduled meeting or, at Author-ity's option, ginning of theatContract a special meeting of its Board of Directors prior to the be-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 Il attached hereto, and such price per kilowatt of firm Ca-pacity shall apply to each kilowatt of Central's Supplemental Power Billing Demand.

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) Authorit,y'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. Authority's ling Period shall be determined by the following formula: Average Monthly Fuel Co F=

0.95 [Fm/Gm 3 X El/(1-K)3 Where:

F

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

F m = 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 identified in (c) below, plus (c) the net energy cost of energy purchases exclusive of capacity or demand charge (irrespective of the designation 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 scheduled 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

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APPENDIX A economy energy sales and other energy sold on an eco-nomic dispatch basis.

Gm = 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))

inter-system sales referred to in Fm (d) above.

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

credits (charges)Thefor determination sales of Fm and Gm herein shall reflect appropriate up and Economy Energy pursuan(purchases) by Authority to (from) Central of Back-t to Article VI herein.

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 at-tached hereto.

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

A. Central's Reserve Capacity Requirement Central's Reserve Capacity Requirement 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 (2) 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 of 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 BILLING STATEMENT A Monthly Billing Statement shall be prepared and rendered for ser-vices 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 (a) Firm Supplemental Power and Energy purchases by Central, (b) Reserve Capacity purchases by Central, and l

(c) Back-up and Economy Energy purchases by Central.

(d) Any applicable charges or credits (or installments thereof) re-sulting dix A. from adjustments made pursuant to Article II, Section A, of this Appen-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 reflects 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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APPENDIX A ARTICLE IX. TREATMENT OF SEPA Prior to the time that Central acquires a Capacity Resource other than the purchase of capacity and energy by Central from the United States of America acting through and by the Southeastern Power Administration ("SEPA"),

such capacity and energy (hereinafter called "SEPA" Capacity and Energy) shall be treated in the following manner. Central's Supplemental Power Billing De-mand in each month shall be reduced by Central's SEPA Capacity as appropriately adjusted for losses; Central's Supplemental Power Energy Requirement in each month priatelyshall be reduced adjusted by Central's SEPA Energy in such month, also as appro-for losses.

Beginning at the time Central begins receiving power and energy from some Capacity Resource or Resources cther than Central's SEPA Capacity and En-ergy, and thereafter, such SEPA Capacity and Energy shall be treated under this Agreement as a Capacity Resource of Central. If necessary, the Parties hereto shall negotiate to arrive at an equitable method of determining the Net Genera-tion deemed to be associated with such SEPA Capacity and Energy in each hour.

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

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

i) f,11) Production Demand Production Energy (iii) Transmission iv) Distribution v) Customer Service VI) Customer Information and Sales (VII) Other Except as otherwise specifically provided herein, the uses of such functional classifications herein shall be consistent with the uses of such l classifications contained in the Uniform System of Accounts and as used in ac-cordance with Go od Utility Practice.

As used herein, the term "functionalization" shall mean the assign-ment or allocation of Authority's costs to and between such functional classi-fications.

I.

OPERATION AND MAINTENANCE EXPENSES A. Production O&M Expenses

1. Fuel Expenses - 95% shall be assigned to the Production Energy component. 5% shall be assigned to Production Demand.

2. Purchased Power Expenses shall be functionalized into Pro-duction Demand and Production Energy components as the ba-

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sis of the then current rates and charges under which such l power is to be purchased by Authority.

3. Other Production 0&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 ever, this functionalization shall be subject to refinement as the result of more detailed analyses or studies at such time as the Autho rity determines, pursuant to such stud-ies, that such functiona lization is no longer appropriate.

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

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

EXHIBIT I APPENDIX A D.

Customer Accounting Expenses shall be assigned to the Customer 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 Salard es 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 1

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 Purposes," or items similar thereto; provided, however, l that all items included in that line item are related to the genera-tion, transmission or distribution of electric power and energy and provided, 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, Renewals, Replacements, Capital Additions to Plant and for other Law-ful Purposes," shall be included in this item in determining the cost of service or rates to be charged.

III. Debt Services and Lease Payments I

Interest expense and principal paid on debt (collectively, " Debt Ser-vice") shall first be allocated to the plant classifications of Produc-tion Transmission, Distribution, and General, as reflected in the Uniform 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 i the corresponding leased facilities so that payments for the lease of fa-cilities which are recordable as Production Plant facilities, Trans-mission Plant facilities, Distribution Plant facilities, and General Plant facilities shall be classified accordingly.

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j EXHIBIT I APPENDIX A l Debt Service and Lease Payments thus classified as Production, Trans-mission, and Distribution Plant-related shall be assigned to the Produc-tion Demand, Transmission, and Distribution functional classifications, respectively. The Debt Service and Lease Payments classified as General Plani.-related shall be functionalized in proportion to the functionaliza-tion of Administrative and General Expenses as described hereinabove.

IV. Working Capital Allowance An allowance to provide to Authority additional working capital re-quired on a year-to-year basis shall be included in the cost 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 Ex-pense, Nuclear Fuel Expense, and Lease Payments, if any, during the test period over the immediately preceding 12-month period. This Working Capi-tal Allowance shall be allocated to functional 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 credited to each functional classification so as to reflect the functional classifica-tions of the activities giving rise to such Income and Revenues.

VI. Allowance for Capital Improvements Authority shall be entitled to include in the cost of service an al-lowance for transfers to Authority's Capital Improvement Fund, which al-lowance 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 maintain the level of Debt Service Coverage referenced below.

VII. Debt Service Coverage Notwithstanding any other provisions of this Agreement, should the Authority's five-year Cost of Service 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 Cap-ital Improvements sufficient to maintain the required debt service coverage in each such year; provided, however that such increase shall not exceed the aggregate average Allowance for Capital Improvements (expressed as a percentage of Debt Service charges) included in the Cost of Service Study from which the Authority's other rates were developed, excluding from such limitation, however, certain Authority contracts in existence as of the ef-fective date of this Agreement wherein the Allowance for Capital Improve-ments may not be exceeded.

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EXHIBIT I APPENDIX A A d.:bt service coverage of 1.75 is presently (July 1,1980) be-lieved, by Authority, required to caintain a Bond Ratiag 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.

ThisSection VII shall not become effective unless and until all other Authority customer classifications are paying at least eight and one-half percent (8 1/2%) into the Capital Improvement Fund.

ThisSection VII shall not become effective or applied to any Central billings prior to the monthly billing period beginning July 1,1984, (billed August 1,1984) at which time the CIF adjustment, if any, shall be based on Gross Revenue and Revenue Available for Debt Service projected for Authority Fiscal Year 1985 ending June 30, 1985.

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EXHIBIT II i

APPENDIX A Schedule A Reserve Capacity Price for Each Contract Year Line No. Description Amount Notes and References

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

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

3. Unreserved Capacity Rate $/kW Line 1

• Line 2

4. Reserve Capacity Price 4/kW Line 3 i

Schedule B Firm 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. Firm Capacity Price $/kW Line 1 x [1.00 + (Line 2+100)]

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I EXHIBIT II APPENDIX A Schedule C Projected Monthly Installed Capacity Line Existing No. Month Additions- Total (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. Agc egate Monthly Installed Capacity (XW's) i (Line 13 X 1000)

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EXHIBIT III APPENDIX A Production Enerqy Charges Production Projected Variable Variable Costs

• et Generation O&M Rate

($) (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 l 2. Column (c(a) and (b) data obtained from Cost of Service Study.

) = Column (a) + Column (b).

• Excluding Fuel.

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RESOURCE LIST b **

@ NET DEPENDABLE CAPACITIES AND COMBINED ELIGIBLE

@ PET GENERATION RESOURCE LIST (STACK)

@ REPUICEMENT REQUIRED: IF LESS THAN GENERATION ACCOUNTING -

MENT AW M

\ .

ci IF@ GREATER THAN @

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F RESERVES PUM ED

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ONE HOUR

2 APPENDIX B PROVISIONS RELATING TO TRANSMISSION SERVICE ARTICLE I. DESCRIPTION OF SERVICE A. _ CHARACTER OF SERVICE The service provided hereunder transmission of electric power and energy (over Authority's transm from (1) the high-voltage bus bars of the various generating station substa-tions of Authority (2) Authority's side of points of interconnection with other utility systems, and (3) points of receipt by Authority on its transmis-sion system of electric power and energy from Central-owned generating facil-for Transmission Service hereunder, to (a) existing Deliv tral's Members and (b) such other Delivery Points as may be established on the combined Agreement. Authority-Central transmission system pursuant to the Coordination All electric power and energy delivered hereunder shall be alter-nating current, three-phase, unregulated, at a nominal frequency of approxi-mately area of 60 eachHertz and at Delivery a nominal standard voltage generally available in the Point.

B. APPLICABILITY transmitted to Central and Central's Members, as such Mem the Coordination 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 Author-ity's and Central's transmission systems, and at such future points of inter-connection and such future Delivery Points to which the Parties may agree in accordance with the Coordination Agreement.

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APPENDIX B ARTICLE II. GENERAL TERMS AND CONDITIONS A. BILLING AND PAYMENT Monthly Billing Statements for Transmission Service hereunder shall be prepared ity. as hereinafter provided and rendered monthly to Central by Author-Payment by Central of amounts due in accordance with such Monthly Billing Statements 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 de-termination 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, actual data.the Demand Charges hereunder shall be recalculated to reflect such A special bill shall be rendered to Central, as soon as practic-able, 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 owes the other as a result of such recalculation shall make pay-ment (s) to the other as follows: the paying Party may elect to spcead the total amount owed in equal installments over a number of months not to excced six (6) nor to extend beyond the period Central takes service hereunder; provided, how-ever, 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 ad-ditional charges or credit to succeeding Monthly Billing Statements.

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-under, andsystem.

Authority's to do all things necessary and expedient in the proper operation of In exercising such right and privilege, Authority shall assume thority.

all liability for damage or personal injury caused by negligence of Au-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 in-terruption, reversal, or abnormal voltage of the supply, if such failure, in-terruption, 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 system, on Central's system or that of Central's Members, or on the systems with which Authority or Central are di-

APPENDIX B rectly or irdirectly interconnected, or whenever it is necessary or desirable to aid in the restoration of service, Authority may, in conformance with Good Util-ity Practice, curtail or interrupt electric service or reduce voltage to some or all of Central's Members and such curtailment, interruption, or reduction shall not constitute negligence tj Juthority.

E. LIABILITY Central expressly agrees to indemnify and save harmless and defend Au-thority against all claims, demands, costs or expense for loss, damage, or in-jury to persons or property in any manner directly or indirectly connected with or growing out of the generation, transmission, or distribution of electric en-ergy 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. DEFINITIONS Except as specifically provided to the contrary, all terms used here-in shall be as defined in such 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" re-fers to those classifications to which " sales for resale" are made by Authority:

namely; Central, Members of Central, and Municipais. " Retail Classification" refers to those classifications to which " sales to the ultimate user" are made by Authority: namely; the Authority's Commercial, Industrial, the Military, 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.

The calculations and accounting for all costs and services under Ap-pendices A and B, including the Cost of Service Methodology and other Exhibits of Appendix A shall be in accordance with the illustrative calculations at-tached hereto as Appendix E and made a part of this Agreement.

t APPENDIX C PROVISIONS RELATING TO TRANSMISSION OPERATION AND MAINTENANCE ARTICLE I. GENERAL A. COORDINATION AGREEMENT 1

l This Appendix is attached to and is a part of the " Power System Coor-dination and Integration Agreement" between South Carolina Public Service Au-l th;rity and Central Electric Power Cooperative, Inc., hereinafter referred to 23 the " Coordination Agreement."

i Except as specifically provided herein, all provisions of this Appen-i 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 Coordination Agreement.

B. TRANSMISSION, OPERATION, AND MAINTENANCE i

i Subject to and in accordance with the provisions hereinafter set forth, Authority shall 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 facilities 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 equi ment in cdndition acceptable to Authority before Authority will commence serp-vice under this Appendix C of the Coordination Agreement.

No transmission facilities of Central shall be Designated Transmis-l sion Facilities if (1) such facilities are not owned by Central, or (2) such facilities are leased by Central to any other party, or (3) such facilities are located outside the State of South Carolina, or (4) such facilities are substantially different in kind or nature from the transmission facilities of l Authority.

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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 opera-

! '< tion, and maintenance is desired by Central. Such notice shall include plans l and specifications of said facilities for review and comment by Authority.

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. APPENDIX B I

ARTICLE III. CHARGES FOR 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 each 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)

Authority's Transmission Service Demand Charge, as determined in the manner set forth hereinafter.

Pursuant to the aforementioned Appendix A and Article V Section D of the Coordination Agreement, prior to the beginning of each Contract Year, Au-thority shall prepare or have prepared a Cost of Service study to determine its projected the Annual following Revenue Requirements classifications of costs: as functionalized or classified as among (i) Production Demand (ii) Production Energy (iii) Transmission (iv) Distribution (v) Customer Accounting (vi) Customer Information and Sales (vii) Other 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 determined 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 Custom-ers, 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 determine 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 Central 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 aforemeationed Appendix A, and the Delivery Service Charges for each month shall be one-twelfth of the aggre-g gate sum of such components so assigned or allocated to Central.

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

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

E. INDEMNIFICATION The provisions of Section K of Article XIV of the Coordination Agreement notwithstanding:

1. Central shall and hereby does indemnify and hold the Authority and its officers, employees and agents free and harmless from any and all legal and other expenses, suits, claims, damages, costs, fines, penalties, llabil-ities or other obligations of whatsoever kind, including but not limited to damage or destruction cf property and injury or death of persons, resulting from or connected with the design and construction, including capital additions or changes made by Central, and ownership by Central of Designated Transmission Facilities.

2. The At *.hority shall and hereby does indemnify and hold Central and its officers, an, employees, and agents free and harmless from any and all legal and other expensas, suits, claims, damages, costs, fines, penalties, lia-bilities or other obligations of whatsoever kind, including but not limited to damage or destruction of property and injury or death of persons, resulting i from or connected with the operation and maintenance of Designated Transmission Facilities, including retirements and replacements thereof by the Authority.

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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 of operation of such Designated Transmission Facil-ities.

Authority shall operate Designated Transmission Facilities in accord-ance with Good Utility Practice. In the operation of transmission facilities.

Authority shall make no adverse distinction between Designated Transmission Fa-cilities hereunder and Authority's own transmission facilities. Authority will use its reasonable best efforts to comply with all applicable law and guvern-mental 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, Cen-tral shall be responsible for any additional costs associated therewith in addi-tion to any other cost responsibility of or payments by Central hereunder.

Authority will provide Central any information or data in such form as such informt. tion or data is routinely available to Authority. If Central requests and Authority provides any additional information or data, Central shall be responsible for all costs incurred by Authority in providing such ad-ditional information or data, and such responsibility shall be in addition to l any other cost responsibilities of or payments by Central hereunder.

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. APPENDIX C ARTICLE III. MAINTENANCE OF DESIGNATED TRANSMISSION FACILITIES Authority shall have the sole authority to maintain all Desionated Transmission Facilities, and Central hereby appoints Authority as Center.l's sole agent for all purposes of maintaining such Designated Transmission Facil-ities.

Authority shall maintain Designated Transmission Facilities in accordance with Good Utility Practices, and in the maintenance of transmission facilities, Authority shall make no adverse distinction between Designated Transmission Facilities and Authority's own transmission facilities.

Authority shall maintain Designated Transmission Facilities in accordance with the same standards, procedures, and methods used by Authority from time to time with respect to the maintenance of Authority's own transmis-sion facilities; unless however, Central requires more rigorous standards or procedures. In the case Central requires more rigorous standards or procedures than those then c'Jrrently 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 of or pay-ments by Central hereunder.

Authority will provide Central any information or data in such form as such information or data is routinely available to Authority. If Central requests and Authority provides any additional information or data, Central shall be responsible for all costs incurred by Authority in providing such ad-ditional information or data, and such responsibilitt shall be in addition to any other cost responsibilities of or payments by Central hereunder.

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APPENDIX 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 determined by the Authority in according with the Uniform System of Accounts and Authority's own then cur-rent accounting standards and criteria. Authority shall credit Central for the salvage value of retired or replaced facilities.

B. CAPITAL ADDITIONS No construction or repairs which al'.ers or changes any part of the Designated Transmission facilities, except 'or 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 capital 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 cperation, and maintenance of Authority's transmission facilities 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 Authority'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, materials, or equipment, except at Central's sole expense.

APPENDIX C ARTICLE VI. PAYMENTS A. GENERAL It is the desire and intent of the Parties hereto that Central reimburse Authority as precisely as possible for all actual costs incurred by Authority in the operation, and maintenance of Designated Transndssion Facili-ties. It is realized by the Parties, however, that the sp.ecific 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 Aut_ority each month one-twelfth of of the aggregate annual cost of operation and maintenance of Designated Transmission Facilities hereunder such annual costs shall be determined by multiplying the ratio that Central's capital investment in such Designated Transmission Faciitties bears to the aggregate sum of the Authority's capital investment in Authority's own transmission facilities and Central's capital investment in ogh Dasignated Transmission Facilities by the Cost of Operating and Maintenance specified below:

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 Uniform System of Accounts excluding, however, Accounts 565 -

Transmission of Electricity 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 Uniform 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 Maintenance Expenses under the Uniform 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-j

4 APPENDIX C 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 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 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, Retirements, 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 determined 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 aggregate 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 or Authority's then most recent long-term Bond Issue.

E. MONTHLY BILLING STATEMENTS For services rendered hereunder, Authority shall render a Monthly B W ing 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 C1arges for Operation and Maintenance which was included in the monthly Billing 3tatement for the previous month, (3) Inventory Carrying Charges for the second preceding month, and (4) the costs of any Capital Additions, Replacements, or Retirements made during the preceding month, all such costs determined pursuant to the foregoing. Central shall pay such Monthly B:e ting Statement in accordance with the billing and payment provisions of the Coordina-tion Agreement.

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9 MICROWAVE AGREEMENT l

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I i AGREEMENT FOR THE i USE OF A PORTION OF AUTHORITY i MICROWAVE SYSTEM BY CENTRAL i FOR LOAD MANAGEMENT AND DATA RETRIEVAL I

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APPENDIX D Microwave Letter Agreement This Agreement for the Use of a Portion of Authority Microwave System by Central for Load Management and Data Retrieval (hereinafter referred to as the " Microwave Agreement") entered into on the day of ,

1980, by and between the South Carolina Public Service Authority (hereinafter referred to as Santee Cooper, 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, 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 and Central's desire for self-sufficiency, must provide means to control and manage its member 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 impractical; and, WHEREAS, Santee Cooper desires to cooperate in such system load control.

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 retrieval under the following conditions:

Such use by Central shall be on a non-pursuant to Sections 94.17 (a) (2) and 94.17 (d) profit, of the cost-sharing regulations ofbasis the Federal Comunications Commission.

Central shall coordinate the use of all of the channels with Santee Cooper so that 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 maintenance of the sixty (60) channels a sum equal to one-fifth of the total annual costs (debt service, operating and maintenance expense, and related burdens) allocated to the System.

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APPENDIX D Microwave Letter Agreement ror each contract year, u. 611 actual data becomes available, Central shall pay a monthly sum equal to one-twelfth of the above-estimated cost for the System. When actual monthly data becomes available, succeeding monthly billing statements 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. Provided, however, di-rect allocation of System costs to Central under this Appendix D shall not be-come effective until implementation of the other charges under the Coordination Agreement pursuant to the provisions of Paragraph C of Article V of the Coordi-nation Agreement.

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SAMPLE CALCULATIONS COST OF SERVICE i

APPENDIX E SAMPLE CALCULATION COST OF SERVICE SANTEE COOPER ALLOCATION OF COSTS FOR FY83 Line* Total ** System **

No. Item System Central ** Less Central

1. Fuel 189,062 118,731 a) Demand 9,453 4,537 4.916 b) Energy 179,609 66,815 112,794

2. Other Production 31,311 a) Demand 20,352 9,769 10,583 b) Energy 10,959 4,077 6,882

3. Purchased Power 5,705 a) Demand 5,271 2,530 2,741 b) Energy 434 161 273

4. Transmission 0&M 4,603 a) Demand 4,603 2,255 2,348

5. Distribution O&M 2,494 a) Demand 1,304 1,304 b) Customer 871 871 c) Specific 45 45 d) Specific Outdoor Lighting 274 274

6. Customer Accounts 2,093 a Retail 1,964 1,964 b System 129 100 29

7. Sales & Customer Service 578 a) Industrial Affairs 202 202 b) Retail 376 376

8. A&G 8,158 a) Production 5,058 2,248 2,810 f

b) Transmission 1,63L'

• 800 832 c) Distribution 734 734 d) Customer Accounts 571 27 544 e) Sales 163 163

9. Total 0&M 244,004 93,319 150,685 See page Number 83 of this Appendix E for explanation of allocation by line number.

t ** Data in thousands of dollars except for debt service coverages and CIF percen-tages.

,. APPENDIX E SANTEE COOPER ALLOCATION OF COSTS FOR FY83 (cont'd)

Line* Total System No. Item System Central Less Central

10. Sums in Lieu 2,764 a) Specific Retail 856 856 b) Payments to County 408 195 213 c) Payment to State 1,500 720 780 1L- Lease Payments 5,510 a) Production 1,478 709 769

,, b) Transmission 4,032 1,976 2,056

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12. Debt Service 74,810 a) Demand 74,810 35,909 38,901

13. Working Capital 3,747 1,321 2,153

14. Total Before CIF 330,562 134,149 196,413

15. CIF @ 8.5% 30,708 12,462 18,246

16. Gross Revenue Requirements 361,270 146,611 215,659

17. Less Other Income & Revenue (11,621) (5,246) (6,375)

18. NET REVENUE REQUIPEMENTS 349,649 141,365 208,284 Central Demand Allocation (Note 1)

Generation - 48.0%

Tr.ansmission - 49.0% (Includes 41,100 KW SEPA Wheeling)

Central Energy Allocation - 37.2%

Note 1: Central's Sumner and Winter Coincidental Peak Demands Assumed Equal As Compared In Percentage To Total System Coincidental Demand.

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APPENDIX E SANTEE COOPER DEBT SERVICE CALCULATION AND DEFICIENCY CALCULATION - FY83 Amount Line Item Total system Reference Description System Central less Central

18. Operating Revenue 349,649 141,365 208,284 l 17. Other Income 3 Revenue 11,621 5,246 6,375

16. Gross Revenue 361,270 146,611 214,659

9. Oper. & Maintenance Expense (244,004) (93,319) (150,685) 10a. Taxes - Paid From Revenue Fund ( 856) -

( 856)

Rev. Available For Debt Service 116,410 53,292 63,118 12a. Debt Service 74,810 35,909 38,901 i Debt Service Coverage 1.56 1.48 1.62 Revenue Required For 1.75 Time Coverage (Note 1) 130,918 - -

Revenue Deficiency (Note 2) 14,508 5,866 8,642 Total Adjusted Revenue Available i For Debt Service 130,918 59,158 - 71,760 l

Debt Service 74,810 35,909 38,901 Debt Service Coverage 1.75 1.65 1.84 Total Adjusted Gross Revenue 375,778 152,477 223,301 Total Adj. Contribution to Capital Improvement Fund 45,216 18,328 26,888 Adjusted CIF % (Note 3) 12.52 12.50 12.53

! Note 1: 74,810 time 1.75 equals 130,918.

Note 2: Spread on Ratio of Central and Other System Revenue to Total Operating Revenue.

Note 3: Adjusted CIF percentage based on Line 16 - Gross Revenue

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, APPERDIX E EXPLANATION OF LINES 1-18 ON PAGES 109 and 110 Line Agreement Item Reference

1. Item I.A.1 - Page 53: Allocated 95% Production Energy 5% Production Demand

2. Item I.A.3 - Page 53: 65% assigned Demand, 35% Energy.

3. Item I.A.2 - Page 53: Assigraa to Demand and Energy per Current Rates under which power is purchased by Authority.

4. Item I.B. - Page 53: 100% assigned Demand.

5. Item I.C. - Page 53: No Distribution 0&M currently allocated to Central.

6. Item I.D. - Page 54: Allocated to Central and Others based on the num-ber, type, and size of Authority's customers.

7. Item I.E.aF. - Page 54: None currently allocated to Central.

8. Item I.G. - Page 54:

9. Sum of lines 1-8.

10. Item IIA - Page 54: No payment to municipalities of franchise fee allo-cated to Central, payment to counties and state al-located by Demand to Central and Others.

11. Item III - Page 54: Assigned to Production and Transmission function, allocated by Demand to Central and Others.

12. Item III - Page 54: Allocated by Demand to Central and Others.

13. Item IV - Page 55: Allocated to functional classifications on the same basis as Total 0&M less Purchased Power Expense, Nuclear Fuel Expense, and Lease Payments, if any.

14. Sum of. Lines 9-13.

15. Item VI - Page 55: Allocated to Central and Others on the same basis as Total Before CIF on Line 14.

16. Sum of Lines 14-15.

17. Item V - Page 55: Revenues and Income of the Authority from Other than Sales of Electricity have been classified, al-located, and credited to the Cost of Service based on analyses of the activities and sources from wnich such income arises.

18. Sum of Lines 16-17.

y AMENDMENT NO.10 TO "F" WHOLESALE FOWER CONTRACT 1

1 I

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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 ,

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AMENDMENT NO. 10 TO "F" WHOLESALE POWER CONTRACT This Agreement made as of /k w M 7, / i 70 ,

between the SOUTH 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.

l 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 providing 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 last amended by Amendment No. 8 to "F" Wholesale Power Contract dated as of October 16, 1975, provides for the manner of determining the rate to be charged Central by the Authority for electric energy; and, WHEREAS , Central and the Authority have agreed to an interim rate increase pending review and renegotiation of all their contractual relationships.

NOW, THEREFORE, ir consideration of the mutual undertaking I herein contained, the Partiu_ agree as follows:

Section 1. The said "F Power Contract", as amended, is further amended by deleting the text of Section Sc 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 l including, the monthly billing period beginning June 1, l 1981 (billed July 1, 1981), the energy charge per monthly billing period shall be determined in accordance with the provisions of the immediately preceding subsection b of this section 5, as heretofore revised pursuant to Section 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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a 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 l

constitute an increase in Central's power rates accomplished "at any time or by any method other than in accordance with I 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 i in effect prior to this amendment is or is not equitable.

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 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 AUTHORITY ATTEST:

{ l G t ; s ', . ):. ..,

By d s'd Secretary President WITNESS:

lbYu ?!l YI' Y r jtu.a f // e ?t_ t SEAL CENTRAL ELECTRIC POWER COOPERATIVE, INC.

ATTEST: [g

'M .J t3 l.h . . r BY e T

Secretary ) g President' WITNESS

i Ga. /t a t.c._ Ma_dd A ..

t,b T fo A l

1. . _ . . - - . - . .

STATE OF SOUTH CAROLINA)

)

COUNTY OF BERKELEY)

Personally appeared [ , '/, 4 v //1 ,9, c (19 9 who

/

being duly sworn, says that 3he saw /t/ r1 fr/fse/,, ,

as President of South Carolina Public Service Authority, and

/ M b4 J d , as Secretary, sign, attest, affix V

the Authority's seal and as the act and deed of South Carolina 1

l Public Service Authority, deliver the foregoing Instrument; and that She with ~A / 5r L dl/c4 / A' witnessed the execution thereof.

L /L m . M ic C u i.

Swcrn to before me this f/g-

'f f' day of G_ ,' ( [F , 1980.

-' ( r.

..,~~, ' !! ' (((l s' t Y_ t .

(L.S.)

Ndtary Public for South Carolina My Commission expires: /, JE (6 STATE OF SOUTH CAROLINA)

)

l COUNTY OF RICHLAND) t Personally appeared a <_(' a fc_ a[($,um., j , who 1

l Leing 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 l the act and deed of Central Electric Power Cooperative, Inc., deliver the foregoing Instrument; and that,.she with s/bu. \$. YfeumA' /p t

witnessed the execution thereof.

b rl'u n hh w J Sworn to before me thish day of ( M,fd , 1980.

6tw ~

-+L.S.)

• a Notarf My Public for Commission South Cagolp/

expires: *s/8//8_

( /

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I AMENDMENT NO. 11 TO

,F, WHOLESALE POWER CONTRACT 4

s AMENDMENT 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 construction 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 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 last amended by l Amendment No.10 to "F" Wholesale Power Contract dated as of April 7,1980, provides for the manner of determining the rate to be charged Central by the Authority for electric energy; and, WHEREAS, Central and the Authority have agreed to an interim rate increase to provide time to implement the Power System Coordination and Integration Agreement.

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 adding to the text of Section Sc as it appears on page 7 of said contract as l amended, the following:

"c. (ii) 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 energy charge per monthly billing period shall be determined in accordance with the provisions of the immediately preceding subsection b of this section 5, as heretofore revised pursuant to Section 8; provided, however, that there shall in addition be billed a surcharge of 2.24 mills per KWH of total Billing Energy.

I 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. (iii) Starting with the monthly billing period beginning July 1, l

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 l

4.78 mills per KWH of total Billing Energy. Further provided, that the surchange provided in this subsection shall not be included as a part of the ' rate specified in Section 5' to be reviewed in accordance wit) the rate review provisions of Section 8 hereof."

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4 CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing let-ter and Power System Cocrdination Agreement were mailed this 14th day of January, 1981, by first-class mail, postage pre-paid, to the fol_owing: kg Samuel J. Chilk, Secretary Nuclear Regulatory Commission Washington, D.C. 20555 Joseph Rutberg, Esq.

Antitrust Counsel Nuclear Regulatory Commission Washington, D.C. 20555 Jerome D. Salzman, Chief Antitrust and Indemnity Group Nuclear Reactor Regulation Office

! Nuclear Regulatory Commission Washington, D.C. 20555 Donald Kaplan, Esq.

Robert Fabrikant, Esq.

Department of Justice P.O. Box 14141 Washington, D.C. 20444 P.T. Allen

! Executive Vice President and l General Manager l Central Electric Power Cooperative P.O. Box 14555 Columbia, South Carolina 29201 Wallace E. Brand, Esq.

Brand and Hall 1523 L Street, N.W.

Suite 200 Washington, D.C. 20005 C. Pinckney Roberts, Esq.

Dial, Jennings, Windham, Thomas and Roberts P.O. Box 1792 Columbia, South Carojina-29202 l

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