ML20042C774

Advises That Recent Staffing Plans May Seriously Jeopardize Ability to Credibly Handle Antitrust Responsibilities

ML20042C774
Person / Time
Site:	River Bend
Issue date:	10/04/1983
From:	Regan W Office of Nuclear Reactor Regulation
To:	Vollmer R Office of Nuclear Reactor Regulation
Shared Package
ML20042C775	List: ML20042C774 ML20042C783 ML20042C801 ML20043B026 ML20043B057 ML20043B059 ML20043B064 ML20043B069 ML20043B073 ML20043B079 ML20043B082 ML20043B086 ML20043B089 ML20043B092 ML20043B095 ML20043B099 ML20043B107 ML20043B108 ML20043B122 ML20043B124
References
FOIA-89-559 A, NUDOCS 8310190349
Download: ML20042C774 (72)

Text

{{#Wiki_filter:p, _nwn mm.s.w.mu.aa.v.s u.mv.wn.nw.u w u ma.w.wy .n;- e e OCT 0 41983 l i MEMORAN0lM FOR: Richard H. Vollmer. Director Division of Engineering THRUt William V. Johnsten AD/MCET FROM: lbs. M. Run, Jr. Chief i $1te Analysis Branch, DE

SUBJECT:

Alff! TRUST ACTIVITY i Enclosed is a copy of a request by counsel representing the City of r Lafayette for antitrust action in connection with Gelf States Utilities' operating license application for River Bend Units 1 and 2. Please note particularly the allegation that excess reserve capacity and higher production costs are resulting in increased competitive pressures among _i the competing entities. We believe that requests or petitions such as the attached wf th respect to { antitrust operating license reviews are likely to increase both because of the increased competitive pressures and because of the absence of any further CP applications. Formerly, the CP applications provided a form for dis-gruntled entities to have their antitrust complaints aired before the NRC. This form is no longer available, and it is likely that the complaints will increasingly shift to the operating license antitrust reviews. It is cor understanding that the antitrust attorneys of ELD have been receiving increased inquiries regarding petitioners' rights at the INtc with respect to I j operating license revicws such as for Perry, Wolf Creek Byron and River Bend. As illustrated by the enclosed request, antitrust considerations involve i numerous electrical entities and complex considerations regarding contractual l relationships, power supply arra'npaments, electric operations, and competitive i relationships. The analyses requ' re a wide range of expertise and varied ccmsiderations not subject to a recipe type approach. We bring this to your attention because we believe that recent staffing plans may seriously jeopardire our ability to credibly handle our antitrust responsibilities. We would also like to emphastae that antitrust OL reviews and antitrust complaints tend to trail the health, safety and environmental reviews and may continue up to the z h '9 h10h,9,03,49831 p MIJ gs,. OF PtCE > .................. ~...... .. ". " ~ .. ".. ~ . sm. 1> ......o..- . ~ ~ .. - - ~ - - " won n....o....n .....o o..u........oo.n.. no.noa." .a.""" a "".

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c. -t- ' issuance of the OL. including the second er third unit of a multi-unit plant. As a result, temporary slackening e* entitrust activity during periods of construction stretch out may not be indicative of future requirements. Original signed'by W. H. Regan,Jr. Ms. H. Regan Jr.. Chief Site Analysis Branch Enclosuret As stated DISTRIBUTION: Central' Files SAB Rdg SAB File t WJohnston WRegan AToalston r / .DNAY.t[0ET.....

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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report under Section 13 or 15(d) of the becurities Exchange Act of 1934 For Fiscal Year Ended December 31,1983.' Commission File Number 1-2703 GULF STATES UTILITIES COMPANY taneet name se sosuer mt as specia.4 in su etener) Texas 74-0662730 lMNor@I) IMeaMT.) 350 Pine Street Beaumont, Texas 7'7701 (Addms of Petacipal Baecente Odaeos) my Code) Registrant's telephone number, including area code: 409-838-6631 Securities registered pursuant to Section 12(b) of the Act: Tiene.f soch eng. TwYieYM 7%% Convertible Debentures due 1992 New York Stock Exchange, Inc. Preferred Stock, cumulative, $100 par value 54.40 Dividend Preferred 54.52 Dividend Preferred New York Stock Exchange, Inc. $5.08 Dividend Preferred $8.80 Dividend Preferred Adjustable Rate Cumulative Preferred Stock, Series B (Depositary Receipts) Preference Stock, cumulative, without par value $4.40 Dividend Preference New York Stock Exchange, Inc. $3.85 Dividend Preference s - Common Stock, New York Stock Exchange,Inc. without par value Midwest Stock Exchange Paciac Stock Exchange Securities ' egistered pursuant to Section 12(g) of the Act: None r Indicate by check mark whether the registrant (1) has Sled all reports required to be Aled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to Ble such reports), and (2) has been subject to such Aling requirements for the past 90 Yes v No.... l

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deposits in east Texas for possible use by the Compa incorporated under the laws of the Netherlands Antilles for the purpose of b ance is funds outside the United States and the lending of such funds to the C owing subsidiaries. subject to the Public Utility Holding Company Act of 1935.Th CONSTRUCTION AND FINANCING PROGRAM Co,nstruction The principal' item of the Company's 1984-1985 expected to be in service in late 1985. Bend Unit 1, a 940 MW nuclear construction program is River y funds from loans guaranteed by the REA. Under the CEPCO is obligated to pay its 30 percent share of the construction costs a n, is doing so. On September 30,1983, the REA approved CEPCO's applicatio share of the costs to complete construction. Previous oan ing a limit being placed on its total investment in such unit have been termin 1985 construction programs consist of the following princi ness nosa.

• nas Electric production plant (a)........................as wi Electric transmission and distribution facilities......

$492,000 $440,000 $362,000 Other electric, gas and steam plant................. 115,000 103,000 118,000 _ 36,000 Estimated expenditures (b)(c)................... 25,000 _ 20,000 g g $500,000 (a) Includes the Company's share of costs of joint! o $131 million of cu e expected partici on (excluding AFUDC in each case) by CEPCO in River Bend Unit I during 1 84 and 1985, respectively. Does not include approximate mulion and $13.2 million,(including $11.1 mulion and $12.7 mulion of AFU respectively), associated with the cancelled River Bend Unit 2 in 1984 and 198 respectively, which had been included in previous estimates. (b) Excludes approximately $27 mulion of nuclear fuel ($11 mulion of represents uranium concentrates which Nuclear Fuel Lease in 1983 (See " purchased from SRG&T) acquired through the . mately $40 million and $39 mulion in 1984 and 1985, respectively payable by a third party fuel company which owns nuclear fuel that the Com many is unconditionally obligated to lease. Also excludes a !lon and $3.4 million in 1983 and 1984, res_pectively,pproximatel) fu $4.1 mil-associated with the cancelled River Bend Unit 2 and not covered by the Nuc of nuclear Fuel Lease. The Company is currently negotiating to enminate or defer th costs. se (c) includes AFUDC, a non-cash item, of $127 millio t on 2 .l \\ .r ,9

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m m - wa m m v. w.w a_ u u m I ~ l. 4 whereby,a portion of the cost of both equity and borrowed funds used to finance construction is capitalized instead of being charged t_o__o_ perations in the period of incurrence. Both the equity and the debt portion of AFUDC are non-cash items of non operating income which have the effect of increasing the Company's reported net income by their full amounts. Assuming River' Bend Unit l goes'into operation in 1985, construction expendi-tures for 1986 are expected to decline to approximately $260 millitm (including AFUDC but excluding $38 million of nuclear fuel covered by 'the Nuclear Fnel lease). The Company is keeping its post 1985 construption plans as flexible as practicable with the intention of accommodating any further changes that may develop. Actual expendi-tures in the past have been, and estimates of future expenditures may be, affected by greater than anticipated escalations in costs, additional expenditures for environ-mental, safety and other factors, and further delays in portions of the construction program. SRG&T executed an agreement providing for it to become owner of a 7 pe'rcent . undivided interest in River Bend Unit 1. However, the REA refused to approve such participation. The Company and SRG&T discussed contract amendments whereby SRG&T would become owner'of a 3% percent interest in such unit, and SRG&T reap-plied to the REA for approval of such participation, but such application was refused and SRG&T will not become an owner. The construction program reflected in this report assumes no participation by SRG&T. Financing The Company's construction program places it in a position, which is expected to continue for at least several more years, in which its financial condition and ability to finance construction and operations is in large measure determined by its ability to obtain funds from outside sources and continued participation by CEPCO in River Bend Unit 1. The Company estimates that internally generated funds and AFUDC will be equal to an average of approximately 45 percent of the amount required to meet construction costs (including AFUDC) for 1984 and 1985. Assuming River Bend Unit 1 goes into operation in 1985 and is, fully reflected in rates beginning January,1986, the Company estimates that internally generated funds and AFUDC will cover most con-struction costs (including AFUDC) in 1986. The funds required by the Company from outside sources for its construction expenditures are initially expected to be obtained through short and intermediate-term borrowings which.will be refinanced from time to time through the issuance of addi-tional bonds, common, preferred and preference stock and other securities of the Com-pany. The amount of each class of securities sold and the timing of the sales thereof will depend on a number of. factors, including market conditions, earnings and capitalization ratios, and satisfaction of the interest and preferred stock dividehd cover-age requirements described below. As of December 31,1983, the Company was authorized by the FERC to make short-a borrowings of up to $300 million in aggregate amount at any one time outstand-ing ud had short-term linea e,f credit providing for borrowings of approximately $190 million. ane Sr.pany also has an $800 million intermediate-term revolving credit agreement under which $110 million of borrowings were outstanding at December 31, 1983.1.oans under this agreement provide for intermediate-term loans to be made 3 .[ , = .M 1 'M h.1m.

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mmmunmewswvnmwse.ownw.m..mmusem..a..m.mm nmwcr The Company has no present plan to convert any of its generating facilities, but is considering modi 8 cation of at least one unit so that jt may be cycled to lower operating levels to accommodate load conditions which may occur when River Bend Unit 1 is in operation and purchases are being made from the Southern Companies, l PROPOSED GENERATING FACILITIES River Bend Unit 1 The Com Bend

• Unit 1,pany's only proposed generating unit actively under construction is River a 940 MW boiling water nuclear reactor unit being constructed by the -

Company at a site near St. Francisville, Louisiana. Stone and Webster Engineering .t Corporation serve 6 as General Contractor for the project and General Electric Company is providing the turbine generator and the nuclear steam supply system. The unit is scheduled to be placed in service in late 1985. During the fourth quarter of 1983 the Company received an updated forecast from its contractor which indicates that the estimated total cost of River Bend Unit 1 of 82.5 billion, excluding AFUDC, estimated in late 1981 and the proposed December,1985 in-service date do not need to be revised. The Company's share (assuming the 30 percent participation by CEPCO) of such cost, excluding AFUDC, is estimated to be $1.7 billion. As of December 31,1983, project construction was projected to be 82.1 percent . complete and approximately 51.9 billion had been expended (excluding AFUDC) by the Company and CEPCO. l Based upon the status of work as of December 31,1983, the Company projects that the in-service date of the Unit will be in late 1985 assuming the Company can continue to Anance the planned rate of construction. The 1984 construction budget is based upon a plan which proposes to meet the late 1985 in service date of the Unit. Even though the project has continued since 1981 to meet or exceed goals contained in the Com-pany's construction schedule, the 1983 NRC staff report indicated the staff believed the schedule was " optimistic". A new report is expected during,the Amt quarter of 1984. The construction permit (as amended during 1982) for River Bend Unit I states that the latest date for completion is December 31, 1985. Any delay in the in service date l beyond late 1985 would require an amendment of the construction permit and could l add additional cost which, in turn, would add to the Company's need for rate relief and Anancing from outside sources. i On April 25,1981, the Company submitted an Operating License Application for River Bend Uni.t I to the NRC r.nd on August 25,1981, the Application was docketed. Pursuant to the published notice, petitions requesting a public hearing were Aled by i Louisianians for Safe Energy, together with one individual, Louisiana Consumen' League, and the State of Louisiana (Attorney General's of6ce). Following the Special Prehearing Conference held on June 14,1983, the ASLB granted intervention to the g petitioners. Contentions concerning the possible failure of the Old River Control Struc-1 ture, which involves a possible change in the course of the Missianippi River and potential for salinity increases in cooling water for the unit, and infestation of asiatic clams, which involves the risk of such clams ~ interfering with important heat exchangers, have been admitted. A third contention concerning the offsite emergency plan is to be ruled on in early 1984. The City of Lafayette, Louisiana, while not an intervenor in the operating license proceeding, has Aled two letten requesting the NRC staff to.make a Anding that "signi6 cant changes" have occurred subsequent to the 7 w.. .... m,.au_ = = - L-

antitrust review conducted for the construction permit and that further review by the NRC and Justice Department be initiated. Lafayette also requests a determination that the Company has violated the conditions of its construction permit and that such conditions be modified to require the Company to provide additional transmission services. The Company has in the past and is now providing transmission services to Lafayette and others which the Company believes comply with the conditions of its permits. (See " Item 3. Legal Proceedings" with respect to disagreement regarding a recently requested transmission service). Whether any hearing will be held or action. .taken on these requests and whether any such hearings or action would result in a delay in the processing 9 the operating license application cannot presently be f determined. The recent denial of requested rate relief by the LPSC will adversely affect the Company's ability to Anance the construction of River Bend Unit 1. What changes in the construction schedule will have to be made,if any, have not been determined. Any delay in the construction of such unit would substantially increase the cost of such unit. See " Regulation and Rates." River Bend Unit 2 On January 5,1984, the Company's Board of Directors adopted a resolution to cancel the construction of River Bend Unit 2 (previously deferred) because of the avail-ability of adequate generating capacity and purchased power in the foreseeable future. River Bend Unit 2 was planned to be a 940 MW nuclear fueled generating unit to be built adjacent to Unit 1. Through the end of 1983, approximately $107.5 million, including approximately $38.5 million of AFUDC, had been expended on Unit 2, and an estimeted additional $12.9 million will be expended to cancel equipment purchase commitments and restore the site. The net after tax loss, which the Company proposes to amortize and recover through rates over the period described below, is estimated to be $82.4 million. The Company's Texas rate filing asks for recovery of the costs of River Bend Unit 2 in rate base over a five year period. Applications for similar recovery through rates subject to their respective jurisdictions will be made to the LPSC and the FERC during 1984. There can be no assurance that such recoveries will be permitted and that such costs will not be written off. (See " Regulation and Rates".) The Company has received i orders from FERC and LPSC granting permission to defer recognition of such cancella-tion loss for accounting purposes until rate treatment has been determined by the respective regulatory authorities. ' Other Facilities, The only other new generating unit presently planned by the Company is Nelson Unit 5, a 5+J MW coal fired unit presently scheduled for commercial operation in 1994. As of December 31, 1983, approximately $28.2 million, including $9.9 million of AFUDC, had been expended on this Unit. An additional $20.1 million has been expended for turbine generator parts and is included in " plant held for future use". The. Company has notified CEPCO that it does not presently intend to participate in any additional CEPCO units as had been previously planned. 8 i

a.fm.xwweteaw9xasatemmemwanreenunwA unw-l ' ~' l = l PURCHASED POWER AND INTERCONNECTIONS in 1983, the Company purchased approximately 16 percent of the energy which it sold. Substantially all costs of purchased power are presently being passed on to cus-tomers of the Company, but such cost pass through is subject to approval and review by regulatory authorities. The Company has a long term contract for the purchase of 46 MW of hydroelectric capacity from the Toledo Bend Project on the Sabine River. The Company also partici. potes in a diversity interchange of power with the TVA. The Company's participation in this interchange was 100 MW through the summer of 1983 and was reduced to 29 MW effective in November,1983. The Company also has agreements with SRG&T and SRMPA whereby the Com- .pany purchases, regardless of the availability of the unit, a declining percentage of their rights to the capacity and output of Nelson Unit 6, over periods of sever) and fourteen years, respectively. The average amounts to be purchased in 1984 and 1985 a e 154 MW and 126 MW, respectively. The Company and CEPCO have an agreement whereby the Company will purchase, regardless of the availability of the unit,100 percent of the rights of CEPCO to the output of River Bend Unit I for one year, expected to be approximately 282 MW, and declining amounts over a rwo year period. The Company has executed contracts with the Southern Companies providing for the construction of a new 500 KV, interconnection between the two systems and for purchases by the Company of capacity and energy irom coal 8 red units. During the FERC proceedings concerning such contracts, vuious objections were raised by inter-venors including the LPSC. Negotiations of settlement among the parties have been concluded and contract amendments have been executed and Sled with the FERC. The settlement is subject to FERC apmoval. These arrangements include a reduction in the rates proposed to be charged by the Southern Companies, deferral of the unit purchases until 1985 and reduction in the amount thereof (to phase from 400 MW in 1985 to 700 MW in 1988-1992), and purchases of long term power expected to be lower in cost than the unit power (to phase from 650 MW in 1984 to 300 MW in 19881992). . The arrangements also provide for purchases of up to 500 MW of power prior to the expected completion of the new interconnection facilities in mid 1984 when other transmission can be arranged. This settlement, if approved, will substantially reduce the costs of the' purchased power to the Companyc The Company owns and operates an extensive transmission and distribution sys - tem covering the 28,000 square mile area served in Louisiana and Texas, which is interconnected with all of its generating plants. The Company's transmission system is also interconnected with several neighboring investor-owned and publicly-owned electric systems. The Company has interconnection agreements with Central Louisiana Electric Company, Inc., Louisiana Power & Light Company, CEPCO, Southwestern Electric Power Company, Mississippi Power & Light Company, LEPA, the Southern Companies and the cities of Lafayette, Plaquemine, and New Roads, Louisiana, which contain terms on which the parties may provide each other emergency, economy, maintenance 9' .m.m. MrAsr% - mm.an. m.sm A seu m s e a e u.e. m .m.m_ ^.. _.emm-. .._m -m_-..%mm.___.*_mm__._

arm :wwwm.mizan wm,ww.mm: zm tw w.wa u w.s. and other types of electric service. The Company also has an interconnection agree-ment with Houston Lighting and Power Company providing the Company with a minor amount of emergency service only. Guidelines of the Southwest Power Pool, of which the Company is a member, provide for maintenance of a minimum generating reserve capacity of 18 percent or, as an alternative,15 percent if certain reliability criteria are me,t. This guideline is taken into account in the Company's plans. Based upon current projections the Company now believes that for the balance of this decade it will exceed the Pool's minimum generating' reserve capacity guidelines. While subject to review by regulatory authori-ties in rate proceedings, the Company believes its reserves, as projected, are appropriate in view of the long periods involved in planning and constructing gener-ating units and the signiacant changes in load growth during the last ten yeam. Under Federal law administered by the FERC, the Company may be required to purchase power from certain quahned cogenerators and small power producers whether the Company has planned for such purchase or not. To date no material purchases have been required, but numerous proposals are being discussed in anticipa. tion of projected increases in the Company's electric rates. The impact of this law upon future operations cannot presently be predicted. FUEL SUPPLY During the periods indicated below, the Company's total generation (excluding generation from its steam product units) was provided by various fuels approximately as follows: sees ass Natural Gas Under contract with Exxon Company, U.S.A., expiring January 1, 198 5............................................ 57.9% 56.4 % Under contract with United Gas Pipe Line Co., expiring J anuary 1, 1992............................................. 2.5 27.2 Under contract with Texas Intrastate Gas Co., expiring Jan uary 1, 1985............................................. 2.4 2.6 Under contract with Sugar Bowl Industrial Gas Corporation (a)... 1.0 Under contract with Cajun Natural Gas Co., expiring January 1, 1990 (a)(b)........................................ 7.0 6.7 Under contract with Funk Exploration, Inc., expiring May 15, 1996..............................................a 0.8 ' Under short-term or interruptible contracts..................... 18.0 1.1 Coal Under the Company's and CEPCO's contracts with Kerr McGee Coal Cor 11.0 4.0 Fuel 011...... p..................................................0.4 1.0 Total..................................................... 100% 100% ' (a) As of November 1,1982, the contract with Sugar Bowl was terminated and replaced with a new long term contract with Cajun Natural Gas Company. (b) Will be changed to Louisiana Industrial Gas Supply effective January 1,1985, a.+ 1 1 - e n m m m. u m. --m _-m-- -m ..-- - - - - ---u

_y L leases 605 rotary. dump railroad can used in the transporting of this coal to Nelson Unit 6. The Company's current projections indicate such quantity of coal will be suf. Scient to satisfy slightly more than the fuel requirement of Nelson Coal Unit 6 for a 20 year period. Additional quantities of coal must be obtained for operation of this unit ,for the remainder of its usefu11 tie. Due to the deferred in service date of the planned Nelson Coal Unit 5, quantities of coal for such unit have not been obtained. CEPCO has contracts which are expected to provide an a' eiuate supply of coal d l until 1997 for operation of the Big Cajun No. 2, Unit 3, of which the Company owns 42. percent. Gas, Coal and Oil Costs The costs of natural gas, coal and fuel oil experienced for the past Sve years have been as follows:

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. Cost Per KWH...................... 1.599e 1.741e 1.644e 1.284e .992e Coal Cost Per KWH...................... 2.635e 2.609e Fuel Oil i Cost Per KWH. 4.................. 5.020e 5.577c 4.756e 4.145e 2.884c, Combined Cost Per KWH........................... 1.728e 1.811e 1.722e 1.410e 1.299e For the year ended December 31,1983, the systemwide average fuel cost for gener-ation was $1.596 per million BTU's as compared to $1.678 per million BTU's for the year ended December 31,1982. Nuclear Fuel The Company entered into a fuel lease in 1982 with Delta, a' single purpoee corporation established by a non-afEliated third party. Under the fuel lease, Delta will ' lease nuclear fuel to the Company which Delta has previously acquired from the Com-pany or its vendon and which is being or will be converted, enriched, and fabricated at the expense of Delta.for use at the Company's River Bend Unit 1. Once the Unit is placed into commercial operation, the Company will make quarterly payments to Delta for the cost (including capitalized interest) of fuel consumed during the quarter. In order to fulfill an agreement with SRG&T, on December 2,1983, the Company purchased 216,269 pounds of uranium concentrates from SRG&T for approximately $11 million. The Company subsequently sold these concentrates to Delta for the same $11 million purchase price. During 1984 the Company and CEPCO expect to eceive delivery of the remaining Arm uranium commitment (approximately one-quarter million pounds) under a supply contract with Ranchers Exploration and Development Company and HNG Oil Com-pany. These deliveries and anal payments of all related uranium supply expenses will complete this contract commitment. The Company also has a contract with Sequoyah Fuels Corporation (a wholly owned subsidiary of Kerr McGee Corporation) for conver-sion prior to 1990 of eight million pounds of uranium to natural uranium hexa 8uoride for River Bend Unit 1. This contract was amended in January,1984, to provide the Company with an option to defer services previously scheduled between 1985 and 1990 to the period between 1991 and 2003. The Company now has two thirty-year I 12 a -m-M__._

... -_. -, _ __ ~ . ~ a { adjustable Exed commitment enrichment services contracts with the DOE which have been dedicated to serve River Bend Unit 1. During 1984 these contracts may be com. bined into a single agreement with DOE. During 1983 the DOE long term fixed-com-mitment enrichment services contract originally covering one of the cancelled Blue Hills Units was terminated at no cost to the Company..The Company has a contract with General Electric Company for fabrication of the initial core and four reloads for each of the River Bend Units, which was amended during 1983 to facilitate the deliveries of enriched product for the River Bend Unit 1 initial core which began in 1983 and will be completed in 1984. Further amendment to this contract with General i Electric is being negotiated regarding, among other items, the portion of this fabrication contract which relates to River Bend Unit 2 only and is not within the-obligations covered by the nuclear fuel lease described above. i SUBSIDIARIES Varibus Corporation The Company's wholly-owned subsidiary, Varibus, holds leases on substantial undeveloped lignite reserves in east Texas, estimated by the Company to be in excess of, 135 million tons. Due to the deferral of construction of previously proposed lignite units at least until the late 1990's, Varibus may sell all or part of the leases now held. Varibus also operates intrastate pipelines in Louisiana which are used primarily to transport fuel to two of the Company's generating stations. Prudential Drilling Company The Company's wholly-owned subsidiary, Prudential,is in the business of explor-ing, developing and operating oil and gas properties in Texas and Louisiana. The principal assets of Prudential are an interest of approximately 5% percent in the Elwood Field in Chambers County, Texas, and the oil and gas properties of Varibus l which were transferred to Prudentla! on January 1,1982. The book value of Pruden-tial's oil and gas properties at December 31,1983, was approximately $59.5 million. During 1983, Prudential expended $18.2 million in exploration, completion and developments efforts, including $10.7 million in joint ventures with independent oper- ~ ators, to explore for oil and gas reserves in the Texas and Louisiana Gulf Coast region. l Proved reserves at December 31,1983, are estimated by the Company to be in the range of 16,500,000 MCF of gas and 1,300,000 barrels of oil or condensate. Additionally, Prudential is acquiring, both through its own staff and through outside geological and exploration consultants, prospects in which Prudential expects to offer participations to others. For exploration, completion and development in 1984, Prudential has planned and budgeted expenditures totaling $14.0 million. The Company presently plans to make equity and tax benefit advances of up to $14.0 million to Prudential for oil and gas exploration, completion and development in 1984. The balance of funds, if any, for the 1984 exploration, completion and deve, lop-p ment programs are expected to come from bank financing and funds generated internally by Prudential. Gulf States Overseas Finance, N.V. Finance is a wholly-owned subsidiary of the Company incorporated under the laws of the Netherlands Antilles. The principal business of Finance is the borrowing of 13 'A' C - ' h-wM 40 - 4 a8 3 Y %,.-. S t % $ ("* .1 Ja f* ? D M. & T. ' a S + - 9 3"'*1 F.4

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w the Company that will result from the termination of the Exxon fuel contract in Jahuary,1985,(which based upon current assumptions of fuel prices, which are subject to change, could increase cos,ts in the range of 30% for the average residential cus-tomers), and the expected increase in elebric rates following the presently scheduled completion of the R}ver Bend nuclear unit at the end of 1985 will adversely affect the Company's ability to meet price competition. Municipalities and large industries inside and outside the Company's service area that have surplus geheration available for periods of time may offer such electricity for sale within the Company's service area at costs signi6cantly lower than the Company's anticipated regulated rates. The Company and other systems in the region offer certain transmission services which facilitate sales of such electricity. Existing wholesale and retail load of the Company is subject to possible displacement. The Company has recently initiated litigation to determine whether it has a duty to provide transmission service so that another wholesaler (a municipality) can sell power to a large industrial customer of the Company. See " Item

3. Legal Proceedings."

NUCLEAR GENERATING FACILITIES The construction, ownership a'nd future operation of a nuclear generating unit exposes the Company to signiscant special risks. The cost of constructing nuclear units has increased materially from original esti-mates by utilities due primarily to escalation of costs, increased and changing govern. ment regulation, signi8 cant public opposition, increased costs of capital, and long periods required for construction. These cost increases have been experienced by the Company in the construction 'of River Bend Unit 1 and have produced extreme financial pressures on the Company which can continue to be met only if the Company can obtain adequate rate relief and raise neessoary funds in public markets lThree of the four nuclear units originally planned by the Company have been cancelled and the costs relative to two such units are being amortized and recovered through rates. The Anancial pressure on the Company has been increase <1 by regulatory disallowar.ce of an adequate cash return on CWIP. ~ Regulatory, safety, and environmental requirements, design problems, and the need for action by numerous governmental bodies, in addition to construction risks involved in any large project, can result in substantial delays in completion and increases in cost which can further increase the Anancial pressure on the Company. While the Company presently believes it will be able to complete River Bend Unit 1 and obtain the necessary licenses and governmental actions to place'it in operation, other companies with units in a more advanced stage of completion than the Com-pany's have experienced an inability to do so.1f for some presently unexpected reason River Bend Unit 1 is not placed in operation as a nuclear unit, the Company would evaluate other possible uses or conversion of the facilities or may possibly be ordered to write-off all or a portion of the costs of suc,h unit.. When nuclear units are completed and placed in operation, certain regulatory-authorities are requiring the costs of such units to be phased in over a period of years rather than allowing immediate inclusion of the costs of such units in rate base and are disallowing portions of the costs deemed to be unreasonable. If the Company's regu-latory authorities were to require such a phase-in or disallowanee, then the Company 18

] may experience continued Ananejal pressure and earn revenues insufficient to provide an adequate return on the Company's investment in River Bend Unit 1. When a nuclear unit is placed in operation, the high degree of regulatory monitor-ing and controls to assure safe operation may cause the unit to be out of service or on limited service frequently and for long periods of time. In the event of outages at River Bend Unit 1 for extended periods, the ability of the Company to continue to supply service may be a function of its ability to purchase large amounts of power from other sources during such periods. The ability of the Company to withstand the Anancial burdens resulting from such purchases and from the costs of any necessary repairs, reattings, and clean-up would be primarily a function of the amount of such costs the Company is allowed to recover through its rates. Risks of substantial liability arise from the use, handling, and possible radioactive emissions associated with t.he use of nuclear fuel While the Company expects to carry insurance, such insurance may not cover all types or amounts of loss experienced in connection with operation of River Bend Unit 1, and severe Anancial consequences could result from a signincant accident or occurrence. HUMAN RESOURCES The Company had approximately 4,950 regular employees as of December 31, 1983. Of these, approximately 3,100 operating and clerical personnel are represented by Local Unit No. 2286, International Brotherhood of Electrical Workers, AFL-CIO. A general wage increase of approximately 8 percent became effective June 19,1983 pur-suant to an agreement which expires June 23,1984 between the Company and such union. The Company has received notice that there are at least 10 charges of discrimina-tion presently pending against it before the Equal Employmeat Opportunity Commis-sion. These charges concern various procedures and practices of the Company that allegedly caused discrimination against the charging parties on the basis of race or sex. The limits of the potential classes of plaintiffs, the remedies to be sought, and the amount or materiality of monetary claims,if any, which may arise in connection with these charges are not presently known. ENVIRONMENTAL MATTERS The application of Federal and State esstrictions to protect the environment involves or may involve review, certi6 cation or issuance of permits by various _ Federal or State authorities, including the EPA, the U.S. Corps of Engineers and the NRC, with respect to construction of new facilities or. modi 6 cation of existing facilities and with respect to initial or continued operation of facilities. The Company believes that it is in compliance with all presently applicable requirements and is not involved in pending proceedings (other than the proceedings before the NRC discussed above under " Pro-posed Generating Facilities") and does not know of any threatened proceeding in which the Company is or will be charged with material violation of such requirements, except as reported under " Legal Proceedings" below. The environmental restrictions, particularly in regard to air quality, water quality, and solid wastes have increased and are likely to continue to increase the cost of operations of the Company's generating installations and have significantly increased the cost of proposed new facilities. The Company believes that the capital expenditures and operating costs incurred in 19 l l -...e ,.aoa w+ n Nweew a*&w, w%r*;;m i we:.m m m-

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.a u..,,,ww, m, 2 u,, i. There am no family relationships between oScers or directors of the Company nor are 0 there any arrangements or undestandings between executive oscers and any other person pursuant to their being selected as oscers other than with directors or oscens of the Company acting solely in their capacities as such regarding terms of employment. All executive of6cen are elected annually by the Board of Directors. Ite m 2. n:,-; A All principal plants and other materially important physical properties of the CoEspany are held in fee. P=dwww men ta camur OSce Building Beaumont, TX 22 Story OSce Building Beetric Power Stations Noches Station Beaumont, TX 316 MW Louisiana Station Beton Rouge, LA 277 MW Roy S. Nelson Station (undivided 70% of Unit 6) Westlake, LA 1,314 M W Willow Glen Station St. Gabriel, LA 1,894 MW Sabine Station Bridge City, TX 1,966 M W Lawis Creek Station Willis,TX 530 M W Big Cajun No. 2, New Roads, LA 227 MW Unit 3 (undivided 42%) River Bend Unit 1 St. Francieville, LA (under (undivided 70%) construction) The com any also owns such other physical properties, including real property, buildings, transmission ines, distribution and generation facilities, as are necessary to conduct its opera-tions. (See "Present Generating Facilities" and " Proposed Generating Facilities".) Substantially all property owned by the Compe.ny is subject to the lien of the MortSage Indentum of the Company. Minor portions of the Company's transmission system and substan-tial portions of its distribution system are located on easements and not on property owned in fee by the Company. A 17.etory headquarters oSce building located in Beaumont, Texas, is owned by third parties and is leased to the Company. This building is currently occupied by Company person-no! The long-term debt Anancing of the building by the owners was consummated on. September 7,1933 in the amount of $53,000,000. Nuclear fuel for River Bend Unit 1 is owned by Delta Fuel Services Corporation and is leased to the Company for use in such unit. Ite m 3. Zagal L--::: % (a) Material pending legal proceedings to which the Company is a party are: (1) On January 6,1982 the Company commenced irial of an action against United in the Louisiana Civil District Court in New Orleans for $704 million, allegmg United's failure to fu1811 les contractual obligations to supply natural gas to the Company. In its answer, United alleged that the Company had imprudently incurred several hundred mil-lion dollars of the damages Jaimed and.w :f the Court to so and and render Judg-ment in favor of United and to transmit its Andings and judgment to the LPSC no that the LPSC can by remedial order provide for recovery from the Company by its customers of the alleged unreasonable sneurred costs. After lengthy negotiations, representatives of the Company and United, proposed a resolution of the lawsuit and some of the proceedings pending before the FERC. The LPSC considered the proposed settlement and consented to 23 a .f. 2* 1'*.* Can 3f M*h a ah t,hl 1 a * * 'A

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c_ mam.mam m mwam.caavema:am mx.~x ~ ~ w w V ~. the withdrawal of its intervention in the Gulf States United.oult. On March 9,1983, settle-ment documents were executed by Culf States and United. On that date, an order was signed diamissing the Gulf States United suit. Gulf States also agreed to withdrew from the so eslied Phase.m proceeding before the FERC. Under the terms of the settlement agreement United paid the Company $112 mill on as a settlement'of the alternate fuel and convetsion costs incurred by the Company. The settlement also provides for an extension of the Company's existing gas supply contract with United until 1992 and for certain gas tansportation services, such gas and services to be provided at snarket prices. In. addition, a Texas aallate of United will supply a sainimum of 27.34 billion cubic feet of gas a year and trarmortation servions in Texas for at least ten years beginning in 1985 at prices comparable to t Nose charged to other industrial customers of United. The disposition of funds received by the Company is the subject of proceedings before the LPSC and the PUCT and the FERC. A tentative agreement, subject to PUCT order, has been reached in the PUCT proceedings, under which the customers of the Company in Texas would receive a direct cash refund. The Anal outcome of such proceedings cannot presently be determined; however, the Company believes that the disposition of such funds will not have a signiacant impact on the Company's results of operations,, (2) The Company is or has been a party to several FERC proceedings which are the consolidated curtailment proceedings consisting of Docket Nos. RP7129 and RP71120, parts of which have been designated Phase I, Phase 11, and Phase m. On November 5,1976, the United States Court of Appeals for the Fifth Circuit entered an order in such curtailment proceedings which directed a revision in the existing interim curtailment plan for United. The revision had the efect of slightly increasing the deliveries of gas by United to the Company. On May 30,1980, the presiding Administre. tive Law Judge issued an initial decision approving United's proposed permanent curtail-ment plan. United's settlement proposal was contested by several of its customers, includ-ing the Company. United's proposal would group sepamtely its pipeline and direct market custossers, and then allocate curtallment within each group accordirig to sepaste systems of priorities. The United curtallment plan fails to take account of alternative interstate gas supplies available to its customers. As a result, the plan diandvantamse direct market cus-tomers like the Company who have less access to laterstate suppies than do many of ' Urdted's pipeline customers. On October 8,1982, the PERC issued an opinion approving the May 30,1980 initial decision. The Company's motion for ahearing with respect to this ophdon was denied on November 29,1982, and the Company has appealed the decision to the United States Court of Appeals for the Fifth Circuit. On September 14,1982, an Order was issued by the Adadaistrative Law Judge in Phase m of those proceedings dealing with the liability of United under its tari8s for curtailment of deliveries. Exceptions to certain parts of the Order wem taken befon the FIRC by the Company, United and other participants in the Phase m proceeding. As a result of a settlement reached iri the Company's lawsuit against United, the Company moved on May 19,1983 to withdrew its intervention in Phase m of these proceedings. While the Comadasion has not yet acted on this motion, it was unopposed. The other emceptions remain pending before the Comadesion. ' (3) Construction and operation of nuclear-fueled units are subject to regulation by appropriate governmental agencies, including the issuing of perndts and licenses by the NRC. in September 1973, the Company applied to the ABC, a predecessor to the NRC, for construction permits for the two River Bend Units. After hearings before and a favorable decision by the ASLB, the NRC issued construction persdts to the Company on March 25, 1977, authorizing the construction of these two units. Because of two decisions of the 24 l l l l c _w -

t United States Court of Appeals for the District of Columbia on July 21,1976, afecting all f pending applications for construction permits, the NRC issued these permits on a condi. tional basis pending adoption of a rule concerning the reprocessing of spent nuclear fuel and waste disposal. Such permits are subject to the Anal outcome of the proceedings result. ing from such court decisions. The court decisions have been reviewed by the U.S. Supreme Court and remanded to the Court of Appeals for further consideration. On April l , 27,1982, on remand from the U.S. Supreme Court, the Court of Appeals for the District of { Columbia again vacated the NRC rule on reprocessing and waste disposal, but at that time expressed no view as to the validity of licenses and construction permits granted under NRC rules. On September 1,1982, the Court of Appeals issued an order staying its mandate. On October 29,1982, the NRC lesued a Statement of Policy indicating that no i e action should be taken by its Licensing Boards or StaN implementing the Court of Appeals decision pending Anal action by the United States Supreme Court, which granted certiorari on November 29,1982. On June 6,1983, the U.S. Supreme Court reversed the decision of l the Court of Appeals'. The U.S. Supreme lourt's decision efectively upheld the NRC's r generic rule for all nuclear power plants, including River Send. Accordingly, the condi. tions imposed in the River Bend construction permits regarding the reprocessing of spent i l nuclear fuel and waste disposal are no longer applicable. No further action by the Com-pany in these proceedings is necessary. (4) In August,1974, the Company Aled an application for permits to construct Blue Hills Units 1 and 2, nuclear units then proposed to be built in Texas. However, the Board of Directors authorised the cancellation of the Blue Hills units in August,1978. The Company i has been permitted to recover the costs of abandoning these plants through rates over ave; and ten year periods. In a proceeding which is now pending before the NRC, the Company is seeking approval for future use of the Blue Hills site for nuclear generation purposes. The State of Texas, acting through its Attorney General, has intervened in the proceeding as an interested State. There are no other intervenors in this proceeding. On April 28,1981, ti.e ASLB issued a Partial Initial Decision Anding that the Blue Hills site is a suitable location for nuclear power reactors of the general eine and type,,v:::f under the requirements of the Atomic Energy Act of 1954, as amended, and NRC regulations promul. gated thereunder. This decision remains subject to appellate review within the NRC. (5) On October 13,1982, Varibus aceived a Proposed Remedial Order from the ERA of the DOE, alleging that Varibus charged the Company approximately S7.5 million in l excess of the maximum lawful selling price on fuel oil sales made during October, j L November and December of 1973 and January of 1974. The Company and Varibus have reached a settlement agreement with the ERA concerning the order. i Subject to execution of a consent order on mutually =T&le terms, Varibus will deposit the sum of $750,000 in an secrow account pending a decision on Varibus' request, for special exception relief, which was Aled with the DOE and which seeks to exempt Varibus' fuel oil sales from the mandatory petroleum price regulations.1f Varibus' excep-tion request is granted, then the total amount placed in escrow and all earnings thereon will be refunded to Varibus. U Varibus' request is not granted, then the escrowed amount and all subsequent earnings will be paid over to the Company for refund to its customers. It is not possible to, predict at this time whether Varibus' request,for exception relief will be granted in whole or in part or at all. (6) See " Human Resources" with respect to charges of discrim'ination. In U.S. District Court in Beaumont, Texas, a class action was Aled against the Company in June,1981, i alleging reverse discrimination against white employees by virtue of various upgrading and remedial seniority bene 8ts that have been conferred upon blacks and females. The breadth of the alleged injured class has not yet been determined. Potential monetary 25 i 4 g'_' .) 9 8 A D

~_ ~ liability, if any, cannot be predicted. This case was dismissed in 1982 and a declarstory judgment action was Aled in the same court against the Company and the Equal Employ. r ment Opportunity Commission alleging substantially the same claims. (7) In August,1982, suit was Aled in U. S. District Court for the Eastern District of Texas, Beaumont, Division lby Shiralette Broussard against Gulf States Utulties Company claimin's damages and other relief for discharge from employment allegedly in violation of various federal alvil rights laws. No estimate of potential liability, if any, can be made at this time. (8) The Texas Department of Water Resouscos has referred the matter of respon. sibility for cleanup of a 14 acre tract of land owned by the Company to the Texas Attorney - General's oSce. The property was utilised by area industries during the 1950's and 1960's as an industrial waste dump. The property was acquired by the Company in 1981 for possible future cooling water espability expansion at its Sabine Power Station. The exis-tence of the industrial wastes was unknown to the Company at the time of purchase. The Company advised the Department that it was not a generator of the wastes nor the owner of the property when it was being used as a waste disposal site and, therefore, should not be 11ab e for the cost of any cleanup activities. Potential monetary liaM11ty of the Company, if ahy, cannot be predicted (9) See Regulation and Rates" with respect to retail and wholesale rete matters. (10) The Company is'a party in numerous other legal proceedings which constitute ordinary routine litigation incidental to its business, including actione for negligence or other claims, which are not described above. (11) On June 7,1982, Southern Company Services, Inc., on behalf of the Southern Companies Aled with the FERC an. Interconnection Agreement and Unit Power Sales 4 Agreement between the Company and the Southern Companies and a Transmission Facill-ties Agreement between the Company and Mississippi Power Company. Middle South Services, Inc., on behalf of Arkansas Power and ught Comp.ny, Imuisiana Power and ught Company, Mississippi Power and ught Company, and New Orleans Public Service, Inc., Aled a motion to intervene and request for hearing alleging that the transaction would burden their systems and requesting an investigation of the proposed transsetion and the extent to which they should be compenssted. The National Wildlife Federation, on behalf of itself and others, aled a protest raising various environmental issues and requesting an opportunity to submit additional information at a later date. The Company Aled a motion to intervene to protect its interest in the transaction. The LPSC Aled a notice of interven-tion with the FERC requesting a hearing on the rates to be charged by the Southern Companies. The City of Lafayette,Imuisiana, Aled a petition to intervene and a request that the PERC not approve the agreements without conditioning such appsoeal on the Com-pany's and phhalppi Power and ught Company's agreement to provide Lafayette with transmission and interchange service on reasonable and non discriminatory teruns. On December 27,1982, the Middle South Companies, mentioned above, Aled a notice of with. drawaL which was accepted by the FERC, pursuant to a settlement agreement whereby the Company and the Southern Companies undertook certain action to minimisa the burden on the systems of the Middle South Companies. On January 21,1983, the PERC issued an order accepting the aling and setting a hearing on the justness and reasonableness of the agreements. After several conferences a settlement agreement was entered into by the Southern Companies and the Company on December 6,1983. On January 16,1984, the. presiding examiner certi8ed the settlement to the FERC for approval as an uncontested settlement despite Lafayette's objection, and it is now pending before the PERC. (12) A group of Louisiana marina operstors on Toledo Bend Reservoir has Aled a complaint with the FERC requesting that the PERC cause the reservoir water level to be i i i 26 b) 8N *CAO b MN1N

41 i

t maintained at higher levels. Since any such mquirement could affect the availability of L hydroelectric power purchased by the Company from the !!censees of the pro}ect, the ) Company has Aled a motion to intervene in such proceeding. (13) A suit was Aled in the 75th Judicial District Court of Chambers County, Texas, on j June 3,1983, t the Company's wholly-owned subsidiary, Prudential and Sun i Exploration and elopment Company, as lessees, by the lessors under oil and gas leases j covering appro,ximately tWo thirds of the acreage constituting Prudential's principal producing property known as the Elwood Field. Such Rold produces from a number of l stringer aands in the Vicksburg formation, all of which have been consolidated by order of the Railroad Commission of Texas for c'. rilling and development purposes. The suit alleges breaches of covenants to develop one of the producing stringer sands and to protect the other stringer sand from drainage ahd seeks (1) damages arising from such alleged breaches and (11) an order directing that several additional wells be dri!!ed promptly, failing which + the leases be terminated as to the allegedly underdeveloped portion of the formation except for the area held by the existing wells. Prudential owns an average of approximately 7% of the lessees' working interest involved. The amount of damages claimed for alleged drainage annot presently be determined. In addition to payment of damages, an adverse order could cause Prudential to bear its sham of the cost of drilling additional wells, if ' determined to be economical, or to forfeit development rights on lessors' acreage, except for those portions of the formation rurently held by production. Prudential's counsel believas it has meritorious defenses to the suit. (14) On February 3,1964, the Company Aled a petition in the U. S. District Court for the Middle District, in Baton Rouge, Louisiana, against the Cities of Lafayette and Pla. quesdne, LEPA and Staufer Chemical Company. The petition seeks (i) a declaratory order that a refusal to wheel certain power from tafayette to Staufer would not constitute a viol tion of federal antitrust law and (ii) damages and injunctive relief arising from certain activities alleged to be violations of federal antitrust and civil rights laws. The Cities and Staufer entered into several contracts proposing the ante of power to Staufer commencing in September 1964 and squested the Company to provide trar==l-lon service. Stouser gave the Co:apany notice 'of intent to terminate its electric service contract with the Com-pany so that it could purchase such power. Stauser's demand represented approximately 5% of the Company's large industrial demand and 1.5% of the Company's total demand by all customers in 1983. Itesa d. Subminolon of Mattess to a Vote of Security Holders No matters were submitted during the fourth quarter of 1983 to a vote of security holders. l l l e 4 l 1 1 =

. m - w. m w. m. m.. u ; m c W.:.l =-.. g.d W T. % n .W Federal Regletar / Vgl. 49 N3. t / Wedn'eedey, January 4,"l964 / Nrtices 531' i l l date, the Commiselon or an Atomic be delivered to the Commiselon's Public antitrustinformation for thelt i Safety and Ltcensing Board, designated Document Room.1717 H Street. NW., appucation for an operating license in by the Commiselon or by the Chairman Washington.D.C. by the above date. connection with the owners' plans to of the Atomic Safety and ucensing Where petitions are Aled during the last operate two bothng water toectors in Board panel,willrule on b requwt ten (10) days of the notice period,it is West Feliciana parish.14uistans known and/or petition and the Secretary or the requested that the petitioner or as the Rivw Btad Station. Unite 1 and 2. deelsnated Atomic Safety and Licensing repmoentative for the petitioner he data submitted contain antitrust Board winissue a notice of hearing or promptly no inforth the a==taalon by a information for review pursuant to NRC r an appropriate order. toll. free telephone call to Wester Union Regulatory Guide gJ no,have to..,. As required by 10 Cf1t 1.71'4 a at (800) 336 400D (in h4 ssauri (goo) 344 - determine whether there any petition for lesve to intervono shall set p?co).%o Western Union operster. ' elpalBoast changes ofess the completion forth with particularity the interest of

• f abound be given Datapem IdentiBoettom or the antitrust review at the 2 the petitioner la the ic o 't and

. ~ Number 37s7 and the following message enestruction pensit staga. (nose data how that laterest may be affected by the ' addressed to'Eunor G. Adensam: represent an updated sospense Jrom the u 'resuhe of the p: a " De petition petitioner's name and telephone.. ' i applican;s' orignial data =6-taat= that, should specinonlly explain the eneons number, date petition was mailed; plant - was notloodin the FedealRegleter on why laterventloa should be permitted name: and publication date and page. g' August 8, test-Vol48, pgJ401111 _ with particular reference to the number of this Fedesel Register notion. an essapleties of a stair emetreet;' foUowing factors:(1)ne nature of the A copy of the petitlen should also be review, the Dirooter of Noeleer Reactor petitioner's right under the Act to be ' sent to the Exoostive IAgal Director - Regulation willissue an initial Anding as'

• made a party to the p: o '7 (2) the UA Nuclear Regulatory ema=taalon, o to whether there have been "olgniBoant
• nature and extent of the petitioner's Was D.C aosal. and to her, changes" under esction tene(s) of the,

property, a==ial or other interest in Albert . Duke poww Company.'p O. Atonde Energy Act. A copy of thle " the procuding:and(8) the possible Box Sales,422 South Church Strwt.

• Bading will be pubhebed in the Federal effect of any order which may be Charlotte North Carolina asses.

Regleter and wiu be sent to the. ' ~ entmd in the proceeding on the attorney for the hoenose. Washington, DC and local public - petitioner's laterest. De petition should Nontimely Alings of petitions for lave <t-mat rooms and to those persons also identify the specinc aspect (s) of the tointervene amendedpetitions. subject matter of the proceeding as to supplemental petitions and/or requeste ' providing comments or infonnation in ~ rampanaa to this notice. lf the initial which petitionet wishes to latervene. forb wiu not be entertained '- Anding concludes ht there have not Any pmon who has filed a petition for obsent a termination by the been any signiacant changes, requests, leave to intervene or who has been Comenisalon the prooiding ofBoer or the s for reevaluation may be puhutitled for a admitted as a party may amend the Atomic Safety and 1.loonsing Board period of 30 days after the date of the titlon without requesting leave of the daignated to rule on the petition and/or Fedesel Regleter notice. no results of up to Afteen (15) days prior to the request, that the petitioner has made a anu toevaluations that are roguested first prehearing conference scheduled in oubeanual shW of gud onuse for wlh be pubhahd h the FederalReglete the proceeding, but such an amended the granting of a late petitism and/or and copies sent to the Washington and ' petition must satis the specificity request. Det determination win be - lonal public document rooms. . mquirennente bed above. based upon a balancing of the factore A copy of the generalinformation'. Not later than Afteen (15) days prior to b Amt pmhearing confance spedadin to CFR 2.714(eXIXiHv)and portion of the appliantion for an 1.714ld). operating bcones and the antitrust scheduled in the proceeding, a petitioner For further details with respect to this information submitted is avauable for shall file a supplement to h petition to action. ese the application for bhc====ination and copying for a the contentions which am sought to be amendments dated August 3.1883 fu at the Commission's pubhc. intmene which must include a het of litigated in the matter, and b bum for which is avallable for public inspection Document Room.1717 H Street. NW at b Commision's public Doomnent Washington, DC 30655, and la the local each contention set forth with masonable specificity. Contentione shall Room.1717 H Street NW Washington. blic document room at the Louisiana D.C. and at the Atkins Library, htste Univoralty, Government rh=aat '{ I Univoretty of North Carolina. Charlotte Department. Beton Rouge. Imulelane ~ - i petitioner who falle to file such a (UNCC Station). NorthCarchna asses.

70Bos, supplement which satisfies these Deted at Betheeda, hearyland this sord day Any person who desires additional mquirements with respect to at least one of Danmber sm.

Infonnauon meanung es menw contention will not be permitted to For the Nuclear Reguletory Commleelos, oevesedin this nodos or who wishes to participate se a party, silmer G.Ma-han Mews canalded wie myoot to Those permitted to intervene become chief. uosasing Aranch No. 4 D/ vision of signiacant changes related to antitruet parties to the proceeding. subject to any Lasasht saaners which han ocourmila se apphcants' actiWtin sine the limitations in the order granting lesve to ' pm nas ee sas raw s.o.et en eal 4 intervene, and have the opportunity to enuma sees m construction permit antitrust mylew N participate fullyin the conduct of the abould submit such requeste for including the opportunity to infonna60n or views to the UA Nuclm hearing' evidence and crose examine(Dooket Nee. 86 400 and 06-406) Regulatory Commiselon. Washington. N present

• I Secti e Ana ch, ce of ev o to en al be ed th the Secretary of the Commlesion. United Nuclear Reactor Regulation on or before States Nuclear Regulatory Commiselon.

Culf States Utillties Company, on February 8.1964. Washington. D.C. 20555. Attention: behalf ofitself and Cajun F.loctric Power Deied at Bethesda, blaryland thne soih day ' Docketing and Service Branch, or may Cooperative, has filed additional of December seas. 4 VE 2 s tif f tg_ A* a.14 *We I am A L 8 9 44.14 *- h ' 8% AN

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f though we do not agree with GSU's contention that LTS does not provide transmission service for Lafayette to furnish full requirements fim power to a third party, that is not the purpose of the contract between Lafayette and Plaquemine. As I explained, the purpose of the Plaquemine-Lafayette Contract is for purposes of coordination of generation. Again, among other provisions, the Lafayette-Plaquemine Contract provides for coordination of operations, emergency assistance by either party to the other, coordination of reserves, and in recognition of the economics.of Lafayette's lower cost generation, Plaquemins agrees to purchase and Lafayette agrees to sell surplus (not firm) power and energy "up to Plaquemine's full load requirements." Lafayette has never expressed that it is to supply full requirements firm power. To the contrary, Lafayette is only requesting transmission service be provided for surplus power and energy up to a capacity equal to Plaquemine's full load requirements (.specifically requested at 23,000 KW and 15,000 KW during the ['- upcoming sumer and Winter months respectively) such that to the extent Lafayette's lower cost surplus power and energy is available it can be made available to Plaquemine over GSU's transmissio,n system. Although we do not agree with GSuts contentions, and without prejudice to our 4 position, if Plaquemine would agree on a temporary basis to have some generation on line and schedule the rest from Lafayette, would GSU then allow transmission d service to commence immediately? If GSU still insists that all telemetering be installed prior to allowing Lafayette's energy to flow to Plaquemine, and if GSU estimates delivery of this metering equipment will be 28 to 36 weeks, then if you would provide to me the complete specifications and catalog numbers.of the required metering equipment,'I will. order the equipment since delivery to us is ' quoted at about 12 weeks. ' Frankly, Mr. Naylor, we see no legitimate reason for. GSU's refusal to provide transmission service. We maintain,that our Interconnection Agreement and the I LTS Schedule is applicable to the type transmission service requested and believe that GSU's refusal to provide that service is in violation of the settlement of the anti-trust case which resulted in the January 8.1974 Interconnection Agreement. We also believe GSU's refusal to provide the requested service is in violation of Nuclear Regulatory Commission's anti-trust...., licensing conditicas for the River Band Station. Unless our disagreements are resolved in the next few days, we feel we have no choice but to seek relief by means which are available. Sincerely, (h n hobie R.Trviff ~ Associate Director of Utilities / Power Development & Sal LRE:di J i cc: May Stanley Hebert, Plaquemine Mr Wallace Brand t. Ray Radigan

r. George Spiegel

i r aru m :o.. q p q g] i ty..:. W 7 / IN FELL SWOOP, PENNSYLVANI A P&L CURES s ,,;yg _ s, u g / [ y EXCESS CAPACITY ILLS -- SELLS GPU 945 MW - w r ;;3, 9 9 ng g Jersey Central Power & Light has agreed in pringe t s w buy 945 MW of electricity from Pennsyhania Pow er & Lgh: y yk.d ),', eg.:, the exact amount that was deemed excess to the compnis t : 7 needs and kept from rate base by the Pennsyh2nia Pubhe -(,- y " A, Utility Comnussion last summer. ((} f '. ,, '. The proposed 15 year agreement for energy and capa. ~~ iib j ity sales tepresents 10.6'i of PP1L's total electricity output 3 and will come from the full array of the utility's generating y 3 l[gy -= / mix. The power sale, which will cost the General Publie t'til. y, An exclusive report on tNe electric utikty industry

• 4 """Y

' * " * ^ ' subject to approval by the Federal Energy Regulatory Com. mission and the New Jersey Board of Public Utilities. The Pennsyh2nia PUC's August 1963 decision said PP&L's 94541W share in the Susquehanna.1 nuclear unit INSIDE THIS ISSUE represented excess capacity (EUw,:9 Aug '83,1). liowever, Courts the 945 MW excluded from rate base was spread out in equal e Noith Carolina Supreme Court gives munis another proportion among all of the utility's generating units instead territorial edge over private utilities, co ops. 3 of being tied only to Susquehanna.l. The commission allowed 1 e Wyoming high court rules abandoned plant costs the utility to recover depreciation and operating and mainte. cannot be passed on to ratepayers..... 6 nance costs associated with the excess capacity, but did not e Court overturns Colorado PUC order that raised allow a return on that portion. cost for hooking up new residences. 8 "We would include a rate of returnin the rates (to Jersey Cen. " Equipment tralP&Q in aGition to the cost of service "said Gerald Caliendo, e NEM A survey sees continued drop in utility PP&L vice president and chief counsel regulatory affairs,w ho add. I h h sak W W noe&ct odWs ntes.& sad LS equipment orders through 1992 4 (continued on pwge.%, e PVC finds reworked SDG&E oil contract ' unreason. GSU SEEKS TO SKIRT ANTITRUST CHARGES able': commission studying penalties 9 IN BID TO HANG ON TO MAJOR CUSTOMER e Hawaiian Electric seeks relief from low. sulfur fuel Gulf States Utilities, see'ing to deny wheeling service k bind; Boston Ed gets a break 10 to a major industrial customer that wants to defeet fromits Legislation system, has gone to federal court asking exemption from . Bill tolift Virginia ban on coal slurry pipelines prosecution under antitrust laws. At the same time,it islevel, will have to wait another year. 2 ing antitrust charges against the city utility of Lafayette, L.. e Utah legislature passes bill exempting G&T co. ops where the Stauffer Chemical Co. would like to shift up tu from rete regulation.......... 6 85 MW ofits electricalload. Public Power GSU's petition before the U.S. District Court for the e APPA panel okays resolutions on Clean Air Act, Middle District of Louisiana asks for a declaratory judgment PCBs. coal hauling and taxes. 7 that the company would not be in violation of antitrust law for Ratn falling to wheel. The complaint also alleges that Lifayette has hel ed to " pirate away an important retall eustomer"and en. P e South Dakota PUC's price elasticity initiative under. I'

1. N mined by customer poll.

3 "*"' an dunkg h can as W Mam e New incentive rate nets Detroit Edison $400.000 in e natm oM,s uput and b pndal ht on th added revenue in firs't month 5 ability ofindustrial customers to shop around for cheaper p Regulation power suppliers. The move for a declaratoryjudgment "im. + Idaho PUC disallows entire 42.MW wood waste plant munizing" GSU from antitrust liability is probably unprece. i. from Washington Water Power rate base .7 dented.said a lawyer for the utility. And the filing of anti. Wheeling trust charges by are investor. owned company against a muni %n e Montana regulators hit BPA agreement to wheel is considered unusual. Generally. wheeling disputes involve North Dakota oower for WAPA 9 antitrust complaints filed by munis against priy ptilitic. for alleged non. cooperation. f Stauffer Chemical has told GSl' that thea a, ;tf!cria e l l 1

x. n na _.r. @.: a, perates in St. G;br.el.1. is plagued by high costs and that the utility's rates are unaffordable. S n.- lw !..ne.! a prepesal1: GSU under which the chemical plant would buylower. cost power generated by Lafa ette ;nd wheeled by Gulf States. Wheeling would occur under existing interconnection agreements between GSU and lai.r>ette - agreemem! which Gulf States contends do not allow for such transfers. Tr.e case promises to expand the legal precedent on antitrust law and refusal to w! eel, say lawyers on both sides of the dispute. The dassic case in this area. decided by the U.S. Supreme Court in 1973, found priate uta. ity Otter Tan Power in violation for refusing to wheel from muni to muni.The GSU case raises the questibn of re. fusal to wheel 1o serse a third party which happens to be an existing large industrial retail customer, said another GSU attorney."We are conDdent the courts will recognize the adverse nature" of the Stauffer proposal,he said, indicating that it would lease GSU with a large amount of excess capacity and increased costs to allocate am remaining customers. Stauffer's present electricity demand " represents roughly 5% of thejotal demand by aU of Gulf States'large industrial customers in Louisiana for 1983, and r6ughly 1.5% of the total demand by all cus. tomers on Gulf States' system." says the court petition GSU has invested $96.4 million in meeting the present and future needs of the chlorine plant. out of a total generating system investment that tops 52.8 billion,it says. A GSU law)er ventured that the 1: sue is ripe for U.S. Supreme Court review. GSU's antitrust allegations do not focus or. :he Stauffer case as much as on what is !ald out as a pattern of antl. competitive behasior by bfayette. This behavior threatens Gulf States with loss of customers and rev. enue and an impaired abibly to serve new and existing customers, says the petition. Anti competitive behavior pointed out by GSU includes a city ordinance "providing for the use by Lafay. cite of all utility poles owned by competing utilities within the city limits, without any compensation being paid for that use," the bnking by Lafayette of the sale of electricity to the sale of water and sewer service "over which bfay ette has monopoly power in the releont market" and the entering by the city "into bond inden. tures obligating bfayette to refuse to grant a franchise to any utility which would render services or own facil. ities within bfayette's boundaries in competition with Lafayette." Neither Stauffer not bfayette officials.were available for comment. PENNSYLVANI A P&L TO SELL 945 MW... begins on pa9e 1 utility has been seeking buyers for wholesale power for some time but that the PUC decision accelerated the ^ search. "We're hopeful that the sale can be;in by July or August." i A spokesman for Jersey Central P&L said the contract represents a S150 milbon savings over the life of 'the contract compared to purchases from the Pennsylvania New Jersey Maryland Interconnection."And this is long. term Drm power we can count on," he said. The rate for 19851986 is estimated at 5#kWh, he noted, adding that energy and capacity purchases from PP&L should amount toabout $230.million a year in the early years of the contract. "We're currently purchasing about 60% to 70% of our power because it's more economical than using some of our old oD fired plants," the spokesman observed. The Three Mile Island nuclear units have remained out of service for a number of years, contributing to the shortfaD. He said over the contract life "PP&L power will at first cost slightly less than electricity from the PJM pool and then will be slightly above PJM costs when Susquehanna 2 comes on line in 1985. The cost dips again compared to PJM after 1990." Decreasing amounts of energy wiD be sold to JCFAL from 1995 through 1999. The purchase will supply about 30% of the utility's energy requirements and defer the need for buuding new generating plants, said the spokesman. Fuel mix of the sale will be roughly 25% nuclear,65% coal and the remainder from oil and other sources. Diana Johnston, an attorney with the New Jersey Department of Public AduDcate's division of rate counsel, said her ofDce willintervene in the case. "We're going to look at what they [ Jersey Central P&L) need, when it's needed and the costs. We'll have to look at their load forecasts." Last year,the New Jersey BPU Dnally endorsed a long troubled contract Oetween'PP&L and Atlantic Elec. tric for the sale of 125 MW of Su.squehanna.1 and.2 capacity through 1991 after rejecting an earlier wision of the pact for being uneconomical to ratepayers (EUW,4 Apr '83,1). The BPU accepted the contract after it was enlarged to include 125 MW of coal capacity from 1991 to 2000 (EUW,17 Oct '83,4; 8 Aug '83,4):A stipu. lated agreement with a number of state and consumer intervenors aho required that costs be levelized and that a capacity factor penalty be imposed for poor performance. BILL TO LIFT VIRGINIA BAN ON COAL SLURRY PlPELINES WILL HAVE TO WAIT ANOTHER the state's powerful railroad lobby proved too tough once again. The bill, which would give coal slutry pro ects eminent domain rights. reached the floor of the House but was pulled back into committe byits sponc. * ' sors due to fear of pn unfasorable vote. A spokesman for Virginians for Competitive Coal Transportation,a lobbying group supporting cor struction of a slurry pipeline, said the bD1 would be carried over to the next 2 ELECTRIC L'TILITY MEK. February 20,1964

an m a m,ms Culf States refuses to wheel Nuclear power l Utility seeks court' order $6j'Q",'y En its antitrust immunity Uu mun have n cica, unde,. Gulf States Utilities Co.'s claim that it is immune from antitrust laws in refusing standing of the various risks,they face to wbeel power for the city of Plaquemine, La.,is unfounded, an attorney for the fj',,',',',h *III 'E"investmp t nu. ht city said. ager of the Tennessee Valley Authority The company has filed suit in the U.S. District Court for the Middle District of told the House Subcommittee on Ener. l.ouisiana seeking a declaration that its refusal to wheel power for Plaquemine from gy Research and Production. biayette, La., to St. Gabriel, La., would not be a violation of the Sherman Act- "This means that a research, develop-The company claims it ts immunized from antitrust liability under the state statute ment and demonstration program rr.ust wrtich created the Louisiana Energy and Power Authority, of which both brayette first make a careful study on how these and P!aquemine are members. The LEPA statute, Gulf States contends, provides that risks can be reduced," said George no member of the joint action agency may sell power to a customer of another D0 worth. "For example,there must be electric utility located more than 300 feet outside ofits service territory (as estab-more certainty and a much shorter time a lished in April 1979)without the consent of the other utility. Plaquemine wants period from identification of needed the power wheeled to St. Gabriel so it can sell power to a Stauffer Chemical Co. capacity and the on line schedule for 4 piant currently served by Gulf States. the capacity, more stability in design But seseral federal court rulings have made it clear that the 1. EPA statute would and less complexity in the requirements not immuniac Gulf States from antitrust liability because the state is not forcing the which must be met," he added. utility to consent to the sale, the Plaquemine attorney said. He suggested a task force of utility Stauffer wants to buy power from Plaquemine because Gulf States' rates are so representatives be established to identify - I high that they would force the company to shut down the St. Gabriel plant-the criteria for risk abatement. 1 in its complaint, Gulf States said its transmission facilities would be subjected to Dilworth said both the high. tem. I defacto ecmmon carrier status if it were forced to wheel power to a retail customer. perattare gas cooled reactor and the The company asserted that the wheeling doctrine upheld by the U.S. Supreme Court Secure P (P!US) nuclear technologies in the Otter Tall case applies only to wholesale, not retail, transactions. are potentially safe. He cautioned the l "If Gulf States were to furnish access to its transmission facilities to perrnit one committee not to gear federal research { cfits larFe industrial customers to purchase bulk power from sources outside (its) efforts strictly toward small reactors. J system, the risk that all of(itslindustrial customers would follow suit is substantial," "'Ihere may be a market for both the company said, small and large reactors." he said. But the transaction in question involves wholesale power, the Plaquemine attorney

• The 2,240 MW integrated design for said. Plaquemine has asked the company to set up a second delivery point for whole*

a large high temperature gas cooled sale power which the city purchases from Lafayette. Gulf States is required to pro-reactor holds promise as a lead plant vide wheeling services for the cities under Nuclear Regulatory Commission beense design for the technology,he said, e conditions it agreed to about 10 years ago. Plaquemine has rejected Gulf States'. suggestion that it build its own transmission line over the seven mile distance between the city and the Stauffer plant. "The revenues from that one customer alone would justify building a trans. mission line," Gulf States said. EllIDIIP EOMWNUNI7 But the line would hase to be built across the Mississippi River, may not be Public Nvr wed/r (L'SPS 026120) feasible and would definitely be prohibited by cost, said the Plaquemine attorney. is published oveLiv h the American Even if the city proceeded with construction ofits own line. it would have no Pubhe Power Awociation. 2301 st St. guarantee that Gulf States would wheel the power the 60 miles from Lafayette to N.W. Washington. D.C. 2003*. Semnd Plaquemine, he added, claw postage paid at Washington D.C. Gulf State > has also csked the federal court to find Lafayette in violation of the and additional mailing ot::m. Sherman Act. The investor owned utility alleged Lafayette has a territorial agree. POSTMASTER: Send addrew changn ment with Southwest Louisiana Electric Membership Corp.-a charge whleh a b '^ M N bfayette official said is " simply not true., Annual suheription ratn: APPA member utilitin. 560 tincluded in knh i The company alsu charged that biayette has: nonf ruemben. 52M bira subenpiions j s' "'i"' d -announced it wil! use its permit authority to prevent any competing utility from b-serving custumers of the e:ty owned utility: Edison Jeanne Widhne L.. !W I -ensted an urs'm; nee prgidmg ser use by the city-without compensation-of Asshtant Editon Lon A; Lichtk f all pvles owned by :.ruher utnity: -tied or attempted tc tie the sale of electricity to the sale of sewer and water Productiom Margaret I, wmt.. ugh service:and -entered into bnd indentures obligating the city to refuse to grant a franchise Telephone: 202 W30n to any utility whi h wodd compete with the city utihty, e %l5 % Page2 Public Power Weekly / March 5.1984

e m. vs wms. u. _ -- i, . ~. 5. DRATT DATED JUNE 16, 1984 POWER DELIVERY AGREEMElfT 4 4 I BEWEEN GUIE STATES UTILITIES. COMPANY h AND e t 'k,', 1 'Il%9d e9( *Wm 98 W.P N FB# W +mPaa;) 2 "- 4 gw'M . i.. 6 e f,*-

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z w.c.a w.mwwmn.n :.mwcw '... g' W l POWER DELIVERY AGREEMENT TABLE OF C0hTEhTS ARTICLE I - TERM AND PURPOSE OF AGREEMEhT, QUALIFYING CUSTOMER------------------------ I Section 1.1 - Term------------------------------------------- 1 S e c t i on 1. 2 - Pu rpo s e - - - - - - - - - - - - ~ ~ ~ - - - - - - - - - - - - - - - - - - -- - - 1 Section 1.3 - Qualifying Customer---------~ ~--------- -------- 2 ARTICLE II - CUSTOMER INFORMATION SUPPLIER, LOSSES------------------- 4 Section 2.1 - Customer Information-~---------------~-- ------ 4 Section 2.2 - Suppliera--------~ ------------- ---------~-~ 4 Section 2.3 - Losses-------- --------------------- -------------- 5 F ARTICLE III - POIh7 0F DELIVERY AND LOCATION---- ~ ~~~---------- 5 Section 3.1 - Point of Delivery ------------------------------- 5 S e c t i on 3. 2 - Loc at ie n ~ - - - - - - ~ ~ ~ ~ - - - - ~ ~ -- - - - - - - - - - ~ ~ -- 5 ARTICLE IV - SERVICE AND RATE SCHEDULES, POWER SUPPLY DEFICIENCIES - ~ ~ -- ~ ~ ------ -- ~ ---- ~ ~ ------- 6 Section 4.1 - Service and Rate Schedules------ ----------- ---- 6 Section 4.2,- Power Supply Deficiencies ~ ~ ~ -- ~ ~ ---------- --- 9 ARTICLE V METERING AND CUSTOMER CONTROL AREA---~~~---~~---~~- 10 Section 5.1 - Metering- --------- ---------- --------- --- --- 10 ) Section 5.2 - Telemetering and Communications------~~~----~ 11 Section 5.3 - Customer Control Area - --~ ~ - -- -----~ ~ ------- Section 5.4 - Taxes and Other Governmental Charges----~~-~~-- 12 ARTI CLE VI - DEFAULT- ~ ~ ~ - --- --- - ~ - -- - - -- -- ~ ~ - - - - -- - - - - - - - - 13 I 1 1 Section 6.1 - Default---------- ---------------------- ---------- 13 l ARTICLE VII - UNC0hTROLLABLE FORCE AND i IhTERRUPTIONS OF SERVICE--~ ~--------------------- 14 1 Section 7.1 Uncontrollable Force and Interruptions of Service-~ ~----------------- 14 ) i l, i q Nh c6.m /b. - ^ ='N A @ p 8-" W-

- -.. unn.. o u u,.w u,..n-u..u.~-vm w srm-c., y l l 1 l. 4' 1* ' ARTICLE VIII - LIABILITY---,-------------------------------

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19 Section 6.1 - Liability------------------------. ---------- ---

• 19 ARTICLE IX - FRANCHISES, RIGHTS-0T-WAYS, PERMITS, ETC.--------------- 21 Section 9.1 - Franchises, Rights-of-Ways, Permits, Etc.-

21

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ARTICLE X - REGULATORY APPROVAL------------------ -------- --- ------ 21 Section 10.1 - Regulatory Approval------------------------------- 21 ARTICLE XI - SUCCESSORS AND ASSIGNS---------------------------------- 22 Section 11.1 - Successors and Assigns------------------- -------- 22 ARTICLE XII - PRIOR AGREEMENTS----------------- --------------------- 22 i L Section 12.1 - Prior Agreements---------------------------------- 22 ARTICLE XIII - EXECUTION---------------------------

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23 Section 13.1 - Execution-'- ---- ---------- --------------------- 23 ARTICLE XIV - NOTICE------------------------------------------------- 22 Section 14.1 - Notice-------------------------

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22 ARTICLE XV - APPROVALS-- ----------------- --------------- ------- -.24 SERVICE ANb RATE SCHEDULES 4

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w f,a' t 4 e ? t DRAIT DATED JUNE 16, 1984 P0h'ER DELIVERY AGREEMEffT i BEh'EEN t GUIS STATES IJTILITIES COMPANY 4 k I t 4 m 'I m - m. w,.. w

-_,..-.-.,.;,n...-.. ,...,.~.. - m, ~.~. -..e.-. u. w uca w c.m ce a w =c.w w l { ': '~ - + - - s P0k'ER DELIVERY AGREEMENT FOR TRANSMISSION SERVICE. This AGREEMENT is made this,,, day of 19 , by and between Gulf States Utilities Company, hereinafter-called " Company" and _, hereinafter called " Customer". ARTICLE I - TERM AND PURPOSE OF AGREEMENT, QUALIFYING CUSTOMER Secti*on 1.1 - Term The term of this Agreement shall be for a period of years commenc. Lag 19 , and ending 19 This Agreement shall be renewed'for successive additional terms of years unless terminated by either party. Either party may terminate this Agreement, effective at the end of the initial term hereof or effective at any time thereafter, either during or at the end of any renewal term, by giving the other= party three (3) years written notice of termination. In-the event Power Delivery Service is not taken by the Customer within three' years from the date of this greement stated above, then this Agreement shall automatically be terminated and become null and void. Section.1.2 - P,urpose The purpose of this Agreement is to establish the terms, conditions, and consideration pursuant to which the Company will provide Power Delivery Service to a Qualified Customer (as defined in Section 1.3 below). Power Delivery Service is the transmission of power and energy over the Company's transmission system from a Power Supplier (Supplier) 2 1 l 5 r04NNTt n3.'*TACY M*.."6MC..'t i?'7"Mi tin k C?>>M*Arnv &+ 'a ? ?'en"c ?r-W(mm.:I.

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p, f'x 'or Entity which is directly connected to the Company's system to the t Point of-Delivery which is directly connected to the Company's' system (as defined in Article III, below) to fulfill the load requirements of-the-Customer's integrated system. ~ Customer shall have the responsibility at its expense-for making all-the arrangements for the purchase of power and energy and the, delivery of it to the Company's system, including when necessary the arrangements for transmission through systems between GSU and the Supplier. The s power and energy must be delivered by an Entity (as defined in the appropriate Service Schedule) to an interconnection point (s) of such Entity with the Company. The Supplier or the Entity through which the power and energy is delivered to the Company must be an Entity connected directly.to the-Company's system and have an active Power Interconnection Agreement with the Company. The contract path from the source of generation to the Customer's load must have adequate thermal capacity under generally accepted industry standards to accommodate transmission of such generation and all other simultaneous transactions. Section 1.3 - Q'ualifying Customer Power Delivery Service by the Company is available only to qualifying customers (Customer) which shall be defined to mean an incorporated municipality or a rural electric cooperative within or joining Company's service area and which owns and operates its own 2 l \\ l

,-w.v_ r ...v 1 (" electrical distribution system for retail sales of electricity within '1 -its system. By its' execution of this Agreement, the Customer warrants that it is a qualified customer. If the customers owns or operates . generating facilities, then the Customer hereby acknowledges that this Agreement does no.t' provide for or cover interconnected operations, emergency.(except as specifically provided for in any attached service , schedule) or replacement power supply from the Company or transmission t. services for delivery,of power by the Company genera,,ted by the Customer facilities. Power Delivery Service pursuant to this Agreement shall be subject to the terms and conditions of this Agreement and of the Power Delivery

• Service Schedule and Power Delivery Rate Schedule PDS as in effect from time to time during the term of this Agreement.

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anrarnecra w N N. i_ , y ARTICLE II - CUSTOMER INFORMATION, SUPPLIER AND LOSSES

i' Section 2.1.- Customer Information Customer agrees to promptly furnish Company with all information

~ regarding the taking, use, and delivery of Power Delivery Service provided by Company hereunder as may_ be reasonably requested by Company ' t from time to time for Company to use in determining compliance with the terms of this Agreement, and applicable service and rate schedule (s), appliceble laws and regulatory rules and orders, or for it to use in connection with planning or implementing curtailment programs as provided in Article VII and to confirm compliance by Customer'with such programs. i Section 2.2 - Supplier A Supplier must be an Entity as defined in Service Schedule PDS I attached hereto. Information ab'out the Supplier shall be furnished to 1 Company by Customer as required in the Service Schedules and Rate i Schedules. Customer may change its Supplier or Suppliers by giving j . written' notice to GSU at least one year in advance of such change and not later than October 1, of the calendar year preceding the year in which such change of Supplier or Suppliers is to be made. The "new" Supplier must meet all the qualifications contained in this Agreement -and the Service,and Rate Schedules, i '1 The Company shall not be obligated to receive or deliver any power and energy under this Agreement from or to an Entity (as defined in this Agreement and Service Schedule PDS) unless, (i) the supplying Entity has an active Power Interconnection Agreement with the Company and such 4 .m

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Entity is not in default thereunder, (ii) the Customer has an active-Power Delivery Service Agreement with the Company and the Customer'is not in default thereunder, and (iii) 911 facilities are in place and q operational including metering, telemetry, communication channels and transformation devices. Section 2.3 - Losses Customer shall be responsible for electrical losses on the Company's system and shall arrange for Supplier to' deliver to the Company's system -those losses assodisted with the Customer's load requirements. Such losses shall be furnished as specified in the applicable Service or Rate q 'l Schedule. j ARTICLE III - POINT OF DELIVERY ANd LOCATION Section 3.1 - Point of Delivery The electric energy to be furnished shall be

phase, Alternating Current, at a nominal-voltage _of volts, and a i

i nominal' frequency of sixty (60) hertz, and shall be delivered to a a inutually agreed Point of Delivery de' scribed as follows in Sec' tion 3.2 I below. Section 3.2 - Location ~ The Point of Delivery shall be located on the Company's electric system -{ at the following location: ) I i 5 -oo r.m m sm es es m a a n os

v (g. I-t ( to serve the customer's integrated system. . There shall be only one Point of Delivery served from Company's s system'for the requirements of the Customer. At Company's sole option, . Company may agree to provida an additional Point of Delivery at a mutually agreeable location on the Company's integrated system to serve the load of the Customer's integrated electric system. If one or more - t n additional Pciints of Delivery are established by agreement, then all references in this Agreement and all service and rate' schedules to the' 1 Customer's Point of-Delivery shall include each and all such Pointa. If i{ U ~ Customer takes delivery at more than one Point of Delivery then Customer agrees that the electric systems served from those points will not be l operated in parallel. Company shall not be required to provide additional transmission,' I substation or distribution facilities (except metering for, billing i purposes) in order to imp?ement this Agreement or provide service hereunder except as provided in Service Schedule PDS unless mutually agreed upon by the parties. The Customer shall be responsible at its i expense for furnishing all facilities necessary for its receipt and distribution of de' liveries hereunder. ARTICLE IV, SERVICE AND RATE SCHEDULES, POWER SUPPLY DEFICIENCIES-i Section 4.1 - Service and Rate Schedules Customer agrees to take and pay monthly.for all Power Delivery J, Service and other service furnished hereunder'on the terms and conditions set forth in Service and Rate schedule (s) attached hereto and made a part hereof and in applicable superseding service and rate 6 l l e .,4 SWTA

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Isb - schedules.. If~ provision is made in any rate schedule for a minimum I ' charge; Customer agrees that it shall be obligated in all events to pay such minimum charge even though Customer may for any reason in the period involved actually take no service or less service than that upon which the minimum charge is based. Bills for services and for other amounts due under this Agreement are to be rendered monthly to the 7 Customer by the Company and shall be due on the 20th day of the succeeding month or on the 10th day after receipt of bill, whichever is later. (The' terms month and monthly as used herein are intended tv * ' designate the period between any two consecutive readings of the C Company's meters at approximately thirty day intervals.) Payment shall 4 be made at such office of the Company to which payment is due as the Company shall designate. There shall be added to any overdue' amount l-L interest on the overdue amount at the annual rate of five percent plus the prime rate.for commercial loans.in effect at the.Irving Trust Company, One Vall Street, New York 10005, on the due date of the L l-payment or, if such rateLis unlawful, at:the highest interest rate 1 allowable by law, Anything in the Agreement to the contrary notwithstanding, it is ) agreed-that the rates of Company to be charged for service and the terms u and conditions,for service under this Agreement shall be as provided in the Company service and rate schedule (s) attached hereto or in any effective superseding service and rate schedule (s) of Company for such type of service which are approved or accepted for filing by any regulatory agencies having jurisdiction thereof. In all events it is the intention of Company and Customer that at all times this Agreement 7 w I N* M' 'Wb YM~M 8'ib IO 88 * '#9D-9 f 9' DY M YA"' N Y D"t h M N bME---

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4 1 ' is in effect'(as it may be amended oth'erwise or extended from time to L s' {. time), Company shall have.and specifically reserves the right to change' ~ any dT the' terms and conditions of service and rates it charges for services to Customer and' place such changed terms, conditions, and T rates.in effect subject to such regulatory action, if any, as is 6 required by law, but-in all events without the concurrence or joinder of the Customer. All changes in rates, terms, and conditions by the Company shall apply to service contracted prior to the effective date of the change as well as service contracted hereunder after such effective date, except and to the extent otherwise mutually agreed in any specific contract between the parties for service pursuant to the service schedule. For purposes of this provision, in no event shall the Customer (regardless of its governmental character) be considered or deemed a governmental or regulatory agency having jurisdiction over any-rates of or change of rates by Company for any service provided under this Agreement. Without in any way limiting any of the rights reserved to the Company in the preceding paragraph and to confirm the existence of such c rights pursuant to the current regulations of the Federal Energy-Regulatory Commission, the parties agree that nothing contained herein shall be construed as affecting in any way the right of the Company in furnishing service under any rate schedule (Service Schedule) to - unilaterally make application to the Federal Energy Regulatory n: Commission (or the successor to such regulatory authority) for a change in rates and terms and conditions of service under Section 205 of the Federal Power Act and pursuant to the Commission's Rules and Regulations 8 l i ... ~.... ~ _

w--w: r s-sry,e,'w r,w r er,ve n.w m v w sm w rs. murf "' Frs.il v vd we ersk u-1 q i - promulgated thereunder. In addition, the parties agree that any such-changes to any Service Schedule may, but are not required to, take the ~ form of a conversion of.the Service Schedule to a tarriff generally applicable to the type of service involved. It is distinctly understood and agreed by and bet, ween the parties that this Agreement in no way obligates the Company to supply any service to the Customer except as may be specifically agreed to and p,rovided under~ Service Schedules in effect hereunder. Section 4.2 - Power _ Supply Deficiencies It is fully agreed that Company under,no circumstances is responsible.or obligated.for making up or supplying any deficiency from theCustomerlsSupplierandhasnoobligationtocontacteitherthe . Supplier or Customer when such deficiency in supply exists. The-Customer shall require that its Supplier assume full and primary j responsibility to provide or obtain all emergency and replace' ment power that may become necessary to meet the Customer's load requirements. If Supplier-(for Customer) requests ~ Company to supply a deficiency, and if Company has Emergency Energy.available, Company will provide Emergency Service under the applicable Emergency Schedule attached and made a part of,this Agreement. If Company is unable to supply or obtain the emergency service requested under the terms and conditions of such Emergency Schedule, the . Company shall not be liable or obligated to the Supplier or Customer. In the event that the Supplier or the Company is unable to supply the-9 es l .'a

w..., ~ ~...~ .- - ~ ~- -- c t ~ deficiency'then the Customer.shall immediately reduce its energy take to remove the deficiency. ARTICLE V - METERING, TELEMETERING, COMMUNICATIONS AND CUSTOMER CONTROL AREA Section 5.1 - Metering All the Power Delivery Service delivered to the Customer shall be. measured at the Point of Delivery designated in Article III. All wires, meters and' devices necessary to measu're and bill the Power Delivery ' Service at the voltage and amount specified in Articles II and III. are to be furnished and installed by the Company and shall remain the property of Company. In case of question as to the accuracy of the Company's. measuring instruments, either party shall have the right at any time, and from time to time upon giving forty-eight (48) hours notice-to the'other . party, to have such instruments tested, and. if necessary, recalibrated with both partin's represented at the test. When requested by the Customer the expense of the test and/or recalibration shall be borne by the Customer if the Company's meters are found.to be accurate within two ~ 4 (2) per cent; otherwise, the cost of the test shall be paid by the Company. No allowance. in the charge for Power Delivery Service shall be made to the Customer unless the error of the meter or meters exceeds (2) percent. If it shall be shown by the test that any of the measuring instruments are inaccurate, proper allowance as shown by the test oto be necessary shall be made to the party entitled thereto, but not for a longer period than thirty (30) days prior to the time when written complaint of inaccuracy is made. In no event will corrections be made 10 vuuttuw xxim.v~x1 xx- .,:r-e . m. s., m~ h=~.- ~ ww~~. w ~ ~w ,, ;: r-z.n ~ ~m a m,: a m m.w ~-

m w,,rw wru.,m=ct, rsm.mwmwanw..w.w u.w mursus.a v.. w. uma l.> h. 4 for a period beyond t,hirty (30) days or the date of the las't preceding test,=whichever is shorter. No allowance will be made on any bill on account of claim for inaccuracy of measurement unless Customer shall in writing request such allowance within thirty (30) days from date of bill. If the meters installed by Company fail to register at any time during any month, the power delivered during such month shall be estimated upon the basis of the best available data considering the actual power delivered to Customer under substantially similar conditions. Section 5.2 - Telemetering and Communications Customer shall be responsible for and provide or cause the Supplier - to provide telemetering and communications between the Supplier and Customer's Point of Delivery, and-the Supplier shall supply generation to continuously match the Customer's load requirements, plus associated losses experienced-in the Company's System as provided in the applicable s service and rate schedule. Customer shall reimburse the Company kor the Company's costs of ' acquiring' and installing the telematering and communication facilities ' installed by the Company to supply the Company's Power Supply Department with information on the Power Delivery at the Customer Point of ~ Delivery. Customer shall reimburse the Company monthly for any recurring cost associated with providing Power Delivery Service hereunder, such as leased communication circuits, etc. whether or not service is actually provided during the month. 11 S ,n -. -

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Section 5.3 - Customer Control Area .~ Effective from the initiation of any Power Delivery Service under this Agreement and continuously for the. period such service is to be provided, the Customer shall cause.itself to be included in the Supplier's control area and removed from the Company's control area, and 1.1 .the Company'.will have no responsibtlity for the Customer's power supply except as provided under this' Agreement. Customer's-agreement with the Supplier shall specify that the Supp11.er is responsible for scheduling and ilelivering continuously the Customer's power supply to match the Customer's load requirements. Prior to initiation of service..the Customer shall furnish the Company a copy of the supply contract between the Customer and the Customer's Supplier. The Company shall have the right (but not the obligation) to periodically audit the Supplier's Power Su'pply Dispatching Records and the Customer's contract with its Supplier shall so provide. Section 5.4 - Taxes and Other Governmental Charges In addition to the rates provided in this Agreement and-the Service Schedules effective hereunder and rate schedules applicable thereto,. Customer shall yay or shall reimburse the Company for the applicable proportionate part of any new tax, or increase in existing taxes due to audit changes imposed by tax collector, or governmental imposition or charge (including those which may be lawfully imposed by the Customer upon the Company,.but excepting state,' parish, city, and special district ad valorem taxes and any taxes on net income) levied or 12 .n .n7Mr. h r*M:*e._9M*rtA ^~~~* " " ' ' " "

--mnmarre -rmum,:.vmrw.r.mv 1.x.vmnm.uwsu.ma 1.u a :v..u we. w.o ;.a.a,aiha4&am..s s 4 assessed against the Company's electric business after the effective date of this Agreement and which affect the service under this , Agreement, except as the power and energy may be exempt under law from the effects of any such tax or taxes. In no event shall the Customer be entitled to any payment or reimbursement hereunder from the Company for ~ any new tax, levy, assessment, imposit, ion, or other charge by the Customer or payment in li,eu of tax to the Customer, or any increase in any such existing charge imposed by the Customer upon its electric. business. ARTICLE VI - DEFAULT Section 6.1 - Default If the Customer shall default in the performance of any of its obligations under this Agreement, including but not limited to payment of sums due under this Agreement, or shall violate any of the provisions hereof or of any applicable service or rate schedule (s), the Company may-suspend service upon fifteen (15) days advance written notice specifying the default and declaring its intention to suspend service, provided said default or violation is not remedied within such fifteen.(15) day period. Such suspension is not to interfere with_the enforcement by the Company of any rights under this Agreement or of any other legal right or remedy. No,deler by the Company in enforcing any of its rights hereunder shall be deemed a wciver of such rights, nor shall a waiver by the Company of one of the Customer's defaults be deemed a waiver of any other or subsequent default. 13 1

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c ,m g._ Ls In the event said default or violat, ion is not remedied within thirty 2 (30). days after initial notice of default and intention to suspend I service has been given by Company, then this entire Agreement shall, at the election of the Company, and without regard to whether Company did. in fact theretofore exercise its right to suspend service, be wholly at an'end, and Company shall be entitled to terminate all service and disconnect and remove its facilities.: subject to such regulatory action-as may be required by law. Upon such termination becoming' effective the. partien shall thereupon be severally released from a11'further obligation hereunder except for rights of action then already accrued. No dispute with reference to the amount due for Power Delivery - Service shall excuse the Customer from paying, at the time when payment is called for by this Agreement, the' amount stated by Co'mpany to be due, but the Customer shall be entitled to recover any amount which it may j have paid in-excess of the amount cctually found to be due. j 0: ARTICLE VII - UNCONTROLLABLE FORCE AND INTERRU"TIONS OF SERVICE - Section 7.1 - Uncontrollable Force and Interruptions of Service The Company shall supply continuous service and avoid interruptions or curtailment of service which it may be under obligation to supply' hereunder, but it shall not be considered to have committed a breach of ~ this Agreement or any Service Schedule or to have failed in auy of its obligations hereunder or under any Service Schedule by reason of any interruption or curtailment caused or occasioned (i) by installation, maintenance, repair, test, inspection, or replacement of equipment in accordance with accepted utility practice; (ii) by function of 14 i .m _..__....__..._m._.

m m, m m m essumed'ww=ukwr unds. *equency relays or other automatic load shedding equipment to preserve the integrity of its system or interconnected systems, or by ma,nual load shedding in an emergency when, in its judgment, such action will tend to prevent or alleviate a threat to the integrity of its power supply or transmission system; (iii) by the negligence of the Company, its employees or contractors, which does not constitute gross negligence of or a willful default by it; or (iv) by an uncontrollable force, as defined below or effected pursuant to the terms of any Service Schedule. Reasonable diligence shall, however, be exercised to restore service as promptly as possible after the occurrence of any such interruption or curtailment. The Company sbs11 have the right to interrupt or curtail service as expressly prbvided in this Agreement or the applicable Service Schedule. Interruptions and curtailments made for the purpose of installing, maintaining, repairing, testing, inspecting, or replacing equipment shall be made insofar as practicable at such time and in such manner as shall occasion least inconvenience to the Customer and on all such occasions reasonable advance notice shall be given to the Customer if the nature of the situation permits unless otherwise provided in the Service Schedule. Further, the Company's obligation to supply service hereunder or under any Service Schedule is also at all times subject to and it shall not be liable, whether by contract or otherwise, fcr any damage or loss, direct or consequential, by reason of (i) curtailment by the Company of any service or refusal by it to supply additional capacity or service 15 I f _%,f % $ ) %.SE$.%&

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...,.-.~.w.,a.~~~~~~<mm~~~~~~~""""""""**"* .1 ,q 'due to l'ts implementations of its curtailment p;ograms (which programs <f may provide for priorities as between various classes and categories of customers and various uses or types of service, may be implemented -system-wide, regionally, or locally in the_ discretion of the Company. and may be amended or-supplemented by the Company from time to time) whenever the Company in its discretion, which.shall not be exercised unreasonably, deems such implementation to be necessary because it^1s experiencing or is about_to experience a shortage of capacity (generating or transmission) or energy resulting from any cause, subject to any order of any regulatory authority having jurisdiction; (ii) curtailment of any service made by it_in compliance with orders or requests of any governmental agency curtailing, conserving, reallocating, or diverting available power resources, facilities, or fuel (including but not limited to orders sought or supported by'the Company); or (iii) acceptance by the Com*any (either with contract or p without) of new customers and additional loads of customers being served or new interconnections or new or additional service to interconnected parties or-new or additional power delivery service even though doing so may affect the Customer by increasing the. amount, frequency, or duration of curtailment of service to the Customer pursuant to such programs unless the_ Company acts in bad faith in accepting the new or additional load, interconitection, or service. Upon written request, the Company will provide to the Customer a copy of such programs as supplemented, modified, and in effect from time to time. Each party shall be fully responsible for installing on its side of the Point of Delivery all 16 l %t99 'RSI .M fZd* 1 *I.E.Da I*CfM I"U

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z w.cmnw. ram.u,vu mmn wn..mmwmuu mswmm;..m.a,w. o;s.va..m. $^ equipment necessary to enable it to effect such curtailment as may be provided for_or requested under such programs. I In the event the Company does curtail any such servic to the Customer pursuant to su:h program, the Customer agrees that upon request it shall immediately take all action necessary to achieve the requested curtailment. In the event-the Customer does not upon request immediately obtain the requested amount of curtailment, then such failure shall constitute a default by the Customer hereunder and, in addition to such other recourse ss may be available to the Company based upon such default, the Company shall have the right to totally interrupt and suspend service to the Customer without further notice during the period such curtailment is in effect. Whether the Customer has theretofore achieved requested curtailment or not, nothing herein shall limit the Company's rights to require further' curtailment by or to interrupt service to the Customer nor limit-A the, Customer's responsibilities with regard thereto. If it is practicable to do so under then existing conditions, the. e Company _shall attempt to give the receiving party advance notics of any interruption or curtailment, which notice may be by telephone, telegraph, or other means, as appropriate; provided, however, that the Company shall have the right to interrupt or curtail service even 'without notice (either by automatic equipment or.otherwise) when there is not reasonable time under the circumstances to give notice. As used in this Section, the terms " curtailment" cnd " curtail" shall for all purposes include voltage reductions or abnormalities, reversal of 17 -.~.--

E I.'. I supply; suspensions of service, and any other forms of modification, reduction, or interruption, in whole or in part of service. The term " uncontrollable forces" shall include, but is not limited to, acts of God, acts of the public enemy, failure of. facilities, explosion, breakdown, flood, accident, earthquake, storm, hurricane, wind, lightning, fire,. epidemic, war, riot, civil disturbance, labor - disturbance, strike, sabotage, or restraint by court or public authority a hav'ing jurisdiction, fuel curtailment, rationing, or shortage,. material shortage, delay in delivery, national emergency,-delay or failure of performance by a third party, governmental delay, action or inaction l (including but not limited to action sought'or supported by the party), i or other acts or conditions, whether of the same or different character t than those above referred to, and exclusive in all events of.those acts and conditions described in the preceding paragraphs which operate independently, beyond the reasonable control of the party affected. t Neither party shall'be responsible to the other for delay in or i failure of performance of its obligations hereunder or under any Service Schedule (except that obligations to pay monies which are then due under- ' the' provisions of this-Agreement shall'not be excused) when such delay or failure is caused by uncontrollable force. The party subject to . l uncontrollable' force shall use all reasonable diligence to remove or cure the inability, provided that neither party shall be r$ quired to settle or resolve labor disturbances or strikea or accept or agree to i governmental or regulatory orders or conditions without objection or f contest on any basis not acceptable to such party in its sole 18 m.a.m. m:m.m. .w e -a e - -~--~ ~~v-~ ~

mm.wwwwwwma.mmm>me .c g-discretion. Notice of, uncontrollable force shall be given by the party-affected as soon as resonably possible. Custorcer agrees not to injure nor tamper with and to take all reasonableskepstopreventemployeesofCustomer,orotherpersonsfrom injuring or tampering with Co&pany's property, including but not limited to meters, an'd all other electrical equipment. Customer agrees to install and maintain in a thoroughly safe and efficient manner, and in accordance with good electrical practice and all applicable lawful

,y regulations, all of-fts lines, transformers, wiring, apparatus, machinery and appliances connected to the Company's line.

If at any time any part of Customer's lines, transformers wiring. apparatus, l machinery or appliances shall-be in a condition which interferes with Company's proper service to Customer, or to its other customers, Company i shall have the right', in addition to any other right of discontinuance hereunder, to discontinue service to Customer until such interfering parts shall be put back in' proper operating condition, or shall have I been' replaced or disconnected. Except in. case of emergency,' Company shall give Customer reasonable written notice of its intention to i discontinue service to Customer on account of any such claimed interference, and, when practical, suitable time for the repair or l replacement of,such interfering part. Neither party to this Agreement . assumes the duty of inspecting the other party's lines, transformers, I wiring, apparatus, machines, or appliances, or any part thereof. ARTICLE VIII - LIABILITY Section 8.1 - Liability 19 I i c - r-r' 'm r ' "r m '~

m: -=w7 ^ , rh. 3 ? Cu tomer assumes all responsibility for the electric power and energy delivered hereunder after it leaves Company's lines, as well as for the wires, transformers, apparatus and appurtenances used in connection therewith at and beyond the Point of Delivery defined in .i Article III, and hereby agrees to protect and save Company harmless.and indemnified fro,m injury or damage to persons or property occasioned by su,ch power and en rgy or by such wires, transformers, apparatus and appurtenances at and beyond said point of delivery, except.where said injury or damage shall'be shown to have been occasioned by the sole negligence of Company. It is further, understood and agreed that Company [ shall not be responsible for injury or damage to Customer's employees in i tampering with or attempting to repair and/or maintain any of the I Company's lines, wiring, apparatus or equipment on Company's side of the point offielivery, or such meters, appliances and appurtenances as Company may install on Customer's premises at and beyond the point of delivery and Customer will protect, save harmless and indemnify Company - i against all liability, loss, cost, damage and expense including attorney's fees by reason of such injury or damage to such employees or other person or persons; and, likewise, Customer shall not be liable for " - i injury or damage to Company's employees where such damage or injury in occasioned by acts of Company's employees in. tampering with or attempting to repair and/or maintain any of Customer's lines, transformers, wiring, apparatus or equ.ipment on Customer's premises, and Company will protect, save harmless and indemnify Customer against all- { liability, loss, cost, damsge and expense including attorney's fees by reason of such injury or damage to such employees. 20 m,~.

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Customer agrees that it will require its Supplier, and if there is 7 . an intervening Entity delivering the power to the Company, the intervening Entity to agree to assume full responsibility.and indemnify the Company with respect to occurrences and facilities prior to the-point (s):of receipt by the Company in the same manner as the Customer J assumes such responsibility and indemnifies the company with respect to e 3 occurrences a'nd f acilities beyond the Toint of Delivery in the preceding-paragraph. ARTICLE IX - FRANCHISES, RIGHTS-OF-WAYS, PERMITS, ETC. Section 9.1 - Franchises, Rights-of-Wa'ys, Permits. Etc. It is understood and agreed that the covenants of the Compa'ny herein contained are conditioned upon its securing and retaining the necessary franchises, right-of-ways.and permits, at costs in its judgment reasonable and without expropriation, to enable it to provide service under this Agreement, anc' the Customer agrees to furnish a right-of-way over land which is owned or controlled by the Customer,. free of cost, and to aid in every way-in securing other necessary right-of-ways, and t ' furnish Company s employees access'to premises free of tolls or other. charges when employees are on Company business. If requested by Company, the Customer shall furnish without cost to Company, a suitable place for the p, roper installation of Company's meters and other i, electrical equipment necess'ary to deliver and measure the service furnished under this Agreement. ARTICLE X - REGULATORY APPROVAL i Section 10.1 - Regulatory Approval 21 \\ _ r a -w=< t mee ~am n-em2i ame. a c.e a-a e= ' =

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ev.. m u 4 S g 4 This1 Agreement shall not-be ' binding upon the parties hereto until g.. p approved or accepted for filing by all state and federal regulatory authorities having jurisdiction hereof. ARTICLE XI - SUCCESSORS AND ASSIGNS Section 11.1 + Successcrs and Assigns This Agreement shall bind and inure to the benefit of the parties hereto, their successors and assigns, but the Customer shall not assign -any of his rights under this Agreement without obtaining the prior-written consent of the Company. ARTICLE XII - OTHER AGREEMENTS Section 12.1 - Prior Agreements This Agreement, upon its date of taking effect, shall supersede all previous agreements between the Company and the Customer relative to the l servic,es covered by this Agreement, interconnection arrangements, or the-i purchase and sale of Wholesale Electric Service. Such other agreements 1;i shall be terminated as of the commencement of this Power Delivery fi Service Agreement. . ARTICLE XIII - EXECUTION Segtion 13.1 - Execution i No agreement or representation made by a representative of the j s /; Company or Customer, unless reduced to writing or incorporated herein, shall be binding upon either party. 'I ARTICLE XIV - NOTICE Section 14.1 - Notice 'i 22 m

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> t-1 Any written' notice, demand, or request required or-authorized under this Ag'reement or any applicable service or rate schedule shall be 9 ' deemed properly given if deposited in the U.S. Mail, postage prepaid, by: ' registered or certified mail, addressed'to the party to which it is- ?.iven at the address indicated by the signatures of each party hereto. .4 f .h,l 4 9 p 1 1 ' i. - e a e t ..j 4 I I 4' l 1 l 23 .I = n_ --2_9._.,.,--

artt.wvatatutowrec- + 1 r. p.. t R.,, i ' ': * ; 4 ARTICLE XV'- APPROVALS IN TESTIMONY WHEREOF, the undersigned parties have duly executed ~ - this Agreement on this-day of J. 1984.: ATTESTATION. j, J Customer l By: By d a l Title Title i Address: I i i ATTESTATION: GULF STATES UTILITIES COMPANY. 3 By By Title Title d i Address: ) n 24 j wact a wu - - = = ^ - - * *

~ . 1 SCH. PDS Page 1 SERVICE SCHEDULE PDS POWER DELIVERY SERVICE-x i 0.1-This Service Schedule PDS is agreed to on 19 , to become effective under, and as a part of, the P'ower Delivery-Agreement (Agreement) between (Customer) and Gulf States Utilities Company (Company). The term of this Service Schedule 'shall be the same as the Agreement between the parties with any 1 i extens, ions theret.o in accordance with the Agreement. i SECTION 1 - PURPOSE AND DEFINITIONS i 1.1 The purpose of this Service Schedule PDS is for the Company to

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provide Power Delivery Service to move power and associated energy from the-Customer's Power Supplier's (Supplier) interconnection point (s) on the Company's system or..if-there is an intervening Entity (as defined in i Section 5) through which the power and energy is. delivered to the l Company then from such Entity's interconnection point (s) on the 1 Company's system to the Customer's Point of Delivery directly connected to Company's system and to establish the terms, conditions, and standards applicable thereto. To assure that Power Delivery capac~ity on {; Company's system shall be reasonably available to Customer, Power Delivery Serv!.e shall not exceed the Capacity stated on Exhibit A to the Agreement. All deliveries of Power Delivery Service shall be under the terms, conditions, and standards provided in the Agreement and this Service Schedule PDS. This Service Schedule and specific deliveries of i

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reav a aze.nrr R' ~. 9; h <.< l;* SCH. PDS Page 2 Power Supply Service hereunder shall not constitute a dedication of any h facilities to common carrier status by Company. L I SECTION 2 - OBLIGATIONS l 2.1 Beginning on the commencement date for Power Delivery Service i 1' under this Service Schedule, Customer at its expense shall have its-Supplier or the delivering Entity deliver to the Company and the Company ^ shall receive at the-Supplier's or Entity's interconnection point (s) with the Company, for delivery by the Company to the Customer Point of Delivery, power and associated energy necessary to fulfill the load requirements.of the Customer's integrated system. { 2.2 Customer agrees to furnish to Company prior to October 1st of each year, a six (6) calendar year (or for the remaining term of this i ~ Service Schedule if less than six years) maximum load estimate by years i for its Point o'f Delivery for the remaining term of the Agreement.- Customer shall be fully responsible for preparing such estima us and shall use due diligence in the preparation thereof and in updating such estimates. Customer shall promptly advise Company of any changes and updating of such estimates. Custonier shall' keep Company fully informed, as far in advance, 2.3 as practically possible, of their anticipated requirements for such 4 Power Delivery Service hereunder and shall in all events give the Company twelve months written notice of such requirements for its Point of Delivery for each calendar year not later than October 1 of the preceding year. Such notice shall include details of the location of i e

rz:mmnwamx w.. am mv.n.w.c.uw m: u.waw. n z.u.>. ..w. in w.w , 9 SCH. PDS Page 3 Company's, interconnection with the Entity which will be the Supplier or will make delivery of tfie power to the Company, the facilities required, and insofar as known, proposed quantities of r er and one'rgy, and ' proposed delivery schedules, and shall provide such other information requested by Company to enab'le it t'o determine its ability to provide the requested Power Delivery Service from such* entity in accordance with-the terms, conditions and standards of this Service Schedule. Company may waive the October 1 deadline or the 12 months notice. 2.4 Normally Company will be able to determine from previous load -studies whether. Power Delivery Service capacity is av'ailable, but in the event load flow or other engineering studies are reasonably required for: Company to determine the availability of facilities for transmission from such other entity within the standards provided herein, Company shall within fifteen.(15) days after receipt of notice from Customer give written notice to Customer of such need-for studies and the estimated cost thereof, If Customer elects:to proceed, they shall within fifteen (15) days of Company's notice so advise Company in writing and agree to pay'such costs, in which case a copy of the study will be made available to Customer for their further planning, including all informatici necessary to determine the correctness of the results. If Customer does not elect-to so proceed, then neither they nor Company shall have any further obligation hereunder with regard to such requested service. l 1 l 5manwa.m m,m-m mmni- . ~ ~.nc n v~- - ~ ~ ~ - - - - ~ ~ - - " " ~ ~ ~ ~ ~ ' ~ - = -

wuwrwaacwwcvaww \\, _ 'SCH. PDS Page 4 2.5 If Company determines that the requested Power Delivery Service can be supplied within the' standards provided herein, it shall so notify Customer. If the rsquested Power Delivery Service is determined not to 4 be available, Company shall notify Customer within sixty days of the reasons why such tervice will not be available. 2.6 Company shall not be obligated to supply Power Delivery Service for any power and energy to the Customer unless and until both Company and Customer have reduced'the terms of such Power Delivery Service in accordance with this Schedule to a written agreement executed by duly authorized officers or agents of Customer and Company. - 1 l 2.7 Power Delivery Service under this Agreement shall be contracted i for a term of not less than two years, l-SECTION 3 - SUPPLY OF POWER DELIVERY SERVICE 3.1 'The Company will furnish Power Delivery Service in accordance with this Service Schedule to the extent it has transmission capacity i

• J available to provide such service (uhich qualification is not intended

} to' limit the express obligation of Company to provide transmission y facilities in accordance with the provision of Section 3.2 below) under_ sound engineering and good utility practice and subject to the following standards: 3 Such service will neither impair the ability of Company to a. render adequate service to its customers nor impair or reduce the reliability of electric service by Company to its own

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!.u SCH. PDS Page $ 1 customers during the term of the schedulad service below accepted public utility standards. - b. Such service will not endanger impair, or create unsafe conditions on.the system or any of the facilities of Company or its customers or parties with which it is interconnected. c. Such service shall not violate or be inconsis. tent with and shall not cause Company to violate, directly or indirectly, or become a party to violation of any applicable statute, order, crdinance, governmental or agency rule, regulation, or other applicable federal, state or local law; and without limiting the scope of the foregoing, the receipt of the Power Delivery Service by Customer, must in all events be lawful, duly authorized, and approved or accepted for filing by all regulatory agencies, if any, which then have jurisdiction over such delivery, and the Power Delivery Service shall not cause Company to be discriminatory or preferential in any service, rate or charge to any customers of Company within the meaning 4 of any applicable law. d. In the event the Customer Supplier's source of generation is unable for any >ason to supply power and energy to Company, Company shall have no responsibility to deliver Power Delivery Service from any other source except pursvant to prearranged and centracted sales. W.,

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__ t a+guamwovaratus,a.*cwnecest%eef li l SCH. PDS Page 6 The determination of the availability of existing transmission e. capacity of the Company shall be made on the basis of existing load, future contracted or projected new load beyond normal load growth, previously scheduled load (both hereunder and otharwise), and normal load growth of the Company, all as estimated by the Company on the basis of its customary engineering planning practice. 3.2 During the term of the Power Delivery Service to be provided by Company pursuant to this Service Schedule, and subject to the terms and conditions of the Agreement and this Service s hedule, Company agrees c that it will provide and maintain internal tri .nnion capacity sufficient to deliver Customer power and assoco ted energy necessary to meet the Normal Load Growth of the Customer. " Normal Load Growth" is defined as the average rate of growth in percent for the most recent five-year period for the applicable Customer"a Point of Delivery. Individual loads added during th,e most recent five-year period exceeding two times such Normal load Growth avex4ge rate will be excluded in the determinatior. of Hormal Load Growth. In ordex foy the Company to provide this service under Section 3.2 the following conditions emst be set; Eec'h loeds and Normal Load Growth, and Company'2 obligation to a. provide such capacity shall include initit11y or at any time during the term c4 thit: service only amounts up to the full requirements load of the Customer an its Point of 9elivery. l MMR&* DW.,.atst.WMQDIQ'N WDMSAbWM n' 'O~ ~ ~# ^

c -_.n..,, 4.- SCH. PDS Page 7 b. Company shall have the option of providing any additional transmission capacity for Normal Load Growth either to the a Customer's Point of Delivery or providing it to an additional Customer Point of Delivery mutually agreed upon by the Company and the Customer, and Customer shall be obligated at its expense to install such additional facilities at the existing Point of Delivery or at the new custocar Point of Delivery as 4 may be necessary for it to receive the transmission, including but not limited to additional or new substation facilities uith such transformation and switching equipment as may be necessary, c. The facilities furnished shall in all events.be those deemed necessary by Company to provide such service in accordance with Company's then current construction and operating. standards, I g i 3.3 During the term of the Power Delivery Service to be provided by Company pursuant to this Service Schedule Company shall have no obligation to provide or maintain transmission capacity other than as provided in Section 3.2, and shall have no obligation under this Service Schedule to pro, vide or maintain transmission capacity at its interconnections with other systems sufficient to provide Power Delivery Service to the Customer. In the event Customer requires transmission capacity for the Power Delivery Service provided for in this Service Schedule which the Company is not obligated to furnish under Section 3.2 above, Customer may in writing request the Company to furnish such

,:-~--- h 9 SCll. PDS Page 8 facilities (excluding facilities at the Compaq{'s interconnections with other systems) in time reasonably sufficient for the Company to include such facilities in its pl.anning and construction program and sufficient for such facilities to be completed in time to accommodate the proposed transmission service. The Company will furnish such facilities, including additional Points of Delivery, only by mutual agreement of the part~ias and subject to the following conditions: Such loads, shall include initially or at any time during the a. term of this service only those loads of the Customer as defined under Section 2 of this Service Schedule and served from the Point of Delivery as defined under Article III of the Agreement. b. If any new or additional facilities are required for such Power Delivery Service, Customer shall pay to the Company a f acilities charge which wil.1 ful.ly compensate the Company for the costs of such facilities beyond the cost the Company would otherwise incur for its own use. c. The facilities furnished shall in the events be those deemed necessary by the Company to provide such service in accordance with the Company's then current construction and operating standards, i d. If the parties fail to reach mutual agreement for the Company to furnish additional points of delivery or increases in --_w

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+ l, SCH. PDS Page 9 capacity for whatever reasons, then the Customer shall have the option of providing the necessary distribution and transmission facilities to interconnect with the Company's existing transmission system at mutually agreeable points, subject to appropriate. approvals an.d certifications by any regulatory authorities having jurisdiction. The Company shall have the right to contest such interconnection in any such regulatory proceedings and otherwise. 3.4 Upon reasonable advance written notice to Company, Customer may abandon any Point of Delivery or may' reduce the amount of capacity previously specified under*this Service Schedule for any Point of Delivery. Such abandonment or reduction in capacity shall become effective on the date specified by Customer in the notice, but not sooner than twelve months after the date such notice is received by Company provided, that in calcula.Ang Power Delivery Service Billing Demand such point shall be included'as though such abandonment or reduction in capacity had not taken place until the twenty-fifth month following the month in which notice of the reduction in capacity or abandonment is given. Advance notice of abandonment or reduction may be waived by Company if mutually agreeable. 3.5 Power Delivery Service hereunder shall be made available normally on a 24 hour per day basis and shall be entitled to priority over all transmission service for surplus power and energy and secondary energy regardless of priority in contract date or scheduling and to e pM&OIk 4 $ sd1

t n irmsmrr rzrzmr::r l .4 SCH. PDS Page 10 priority over all economy transactions with other parties, and to priority over replacement energy transactions (other than for unscheduled forced outage) with other parties if other sources are available; further, except as otherwise agreed in any contract between Customer and Company for a specific transaction under this schedule, Power Delivery Service hereunder shall have priority over interruption for transactions of Company with.other parties for, emergency service and replacement energy service involving unscheduled forced outages unless emergency service or such replacement energy is not available from other sources. 3.6 Anything to the contrary in the Agreement, this Service Schedule PDS or the Rate Schedule PDS to the contrary notwithstanding, it is agreed that Company is not obligated to interrupt its firm customers in order to maintain a scheduled Power Delivery Service. Company may curtail or interrupt, in whole or in part, any Power Delivery Service provided hereunder upon ten (10) minutes notice (given ~ by telephone or any other manner to the Customer) if system conditions, are such that the transmission adversely affects, beyond tecepted standards, the loading on facilities or if Company determines that any of the standards in Section 3.1 a, b,-or c are not being met, and may in all events interrupt any transmission service instantaneously and without notice if Company deems it necessary to protect system stability. Without in any way ifalting the general applicability of the terms and provisions of the Agreement for service under this Service Schedule, it is expressly noted that the obligations of Company to 1 l % a., u t errr+nrcumcw:vemmwwaw ura mme-memnm eme-a-----a-~~-

m,muw.mmwzwr.m.nm."mac :. rima c.nnvrw r=.wn.wmmw&a.h. M w.ma m L F. i SCH. PDS Page 11 provide Power Delivery Service hereunder are subject to the provisions of Article VII of the Agreement and Section 3.3 above. All contracts by Customer for its purchase of power and energy from a Supplier involving transmission service by Company hereunder shall be subject to all of the conditions of this Service Schedule PDS and shall explicitly recognize such rights of the Company to curtail and interrupt transmission se rvice. SECTION 4 - BASIS OF SETTLEMENT 4.1 For the, Power Delivery Service provided by Company hereunder, Customer shall pay to Company each month an, amount computed on the basis of Rate Schedule PDS attached. 4.2 Company shall render bills each month for special Power Delivery Service provided during the preceding month. Such bills shall be prepared on the basis of metering information obtained in accordance with Article V of the Agreement and Section 2 of this Service Schedule. 4.3 In the event it should at any time be determined by Company, 'either by audit, metering testing, or otherwise, that actual Power Delivery Service exceeded the amount previously billed, then Company shall be entitl'ed to bill and Customer shall be obligated to pay an amount equal to the rate for Power Delivery Service applied to the corrected amount of actual service transmitted in excess of the amount previously billed. In no event shall this imply an obligation on the part of Company to provide Power Delivery Service beyond that actually contracted for under this Service Schedule. 4 l co me_ e% sk.. a k

,,,h. m. - n. SCH. PDS Page 12 4.4 If the Customer now or hereafter has a physical interconnection with the Supplier or delivering Entity, then the Power Delivery Service charge shall be calculated on the actual peak power transmitted over the Company's system to the Cust'omer for the twelve months ending with the current month. SECTION 5 POI!ftS OF DELIVERY r S.1 To assure the applicability of all the standards and conditions for transmission service hereunder, including but not limited to the prevention r>f discriminatory or preferential service, rates, or charges by Company and prevention of impairment of Company's ability to serve-its customers, it is agreed that for purposes of this Service Schedule, Points of Delivery shall be limited to those described under Article III and any Points of Delivery added by mutual agreement. SECTION 6 - DEFINITION OF ENTITY 6.1 To assure the applicability of all of the standards and conditions for Power Delivery Service hereunder, including but not limited to the prevention of discriminatory or preferential service, rates, or t.harges by Company and prevention of impairment of Company's ability to serv,e its customers, it is agreed that for purposes of this Service Schedule, " Entity" shall mean any municipality, rural electric cooperative, public or private corporation, governmental agency such as TVAandSouthwestPowerAdministration,orkawfulassociationofanyof the foregoing (a) which lawfully exists and owns and operates or proposes to own and operate electric generating facilities with

w - l. SCH. PDS Page 13 facilities for transmission and/or distribution of electric energy; (b) which, with the exception of' municipalities, governmental agencies and rural electric cooperatives, is or will upon commencement of operations be a public utility (or in the case of an tssociation each member thereof, excepting municipalities, governmental agencies and rural electric cooperatives, is a public utility) under the laws of Texas or Louisiana or the Federal Power, Act and provides or upon commencement of t operations will provide electric service under contracts or rate schedules on file.with and subject to regulation of the Louisiana Public Servica Commission, the P,ublic Utilities Commission of Texas or the Tederal Energy Regulatory Commission; and (c) with which Company then has a physical interconnection and has entered into a power interconnection and interchange agreement which provides for transmission service and which agreement is approved or accepted for filing by the Federal Energy Regulatory Commission without conditions knacceptable'to Company. 4 9 O e e

-r:rsm.usern.nwmm.m v.m.su.s.cau...a cm.,rsammumwau 1-s- 4 SCH. PDS Page 14 EXECUTED as of the date first hereinabove mentioned. ATTEST: CUSTOMER 8,7 By Title Title ATTEST: GUIS STATES UTILITIES COMPANY By gy Title Title s 6 9 e e t G f a m en~~-.~___.-_--..,~~-.----._----.-

y,. w. ,y . ~_ ,c o RATE SCH. PDS TO SERVICE SCH. PDS Page 1 RATE SCHEDULE PDS TO SERVICE SCHEDULE PDS , 19 i 1. Application This Rate Schedule shall apply to provision by Company of Power Delivery Service to Customer under and pursuant to the Power Supply Agreement between such parties and Service Schedule PDS thereto. 2. Power Supply Service Billina Demand Power Supply Service Billing Deman'd shall be the arithmetical sum of the non concurrent maxin;um 60-minute kw demands for Power Delivery Service delivered frpm the Company system at each of the Customer Points of Delivery during the Billing Month of the 12 months period ending with the Current Billing Month when such arithmetical sum was highest; provided that each Point of Delivery shall be included in the determination of the monthly arithmetical sum of maximum 60-minute kw d,emands at not less than the greater of (i) 50% of the kw capacity specified for such ' Point of Delivery under Exhibit "A" to Service Schedule PDS or that which is deemed to continue in effect for twenty-four months under Section 3.4 of Service Schedule PDS with respect to Points of Delivery which have been abandoned or reduced in capacity) or,(ii) 50% of the maximum 60-minute kw demand 1 _. ~,

-5 rm - r_- [. 1 o . n 4 c RATE SCH. PDS i TO SERVICE SCH. PDS Page 2 established at sur.h Points of Delivery subsequent to the last change in specified capacity (Minimum Billing Demand). If the power factor at the point of measurement for any Point of Delivery is found to be less than 90% lagging, one kva will be i conside'ed as 0.90 kw but not less than actual kw. r t 3. Transmission Service Rate The rate for transmission service which shall be paid by Customer to Company is as follows: 230 KV, 345 KV and 500 KV. $ 0.740 per KW per month 69 KV and 138 KV..... $ 1.060 per KW per month 34.5 KV......... $ 1.280 per KW per month 13.2 KV $ 1.570 per KW per month The applicable rate shall be based upon the lower of the voltages at the point of delivery or the point of receipt on the Companys . system, 4. Losses Whenever CEstomer schedules the delivery of power and energy over 4 the system of the Company under the p 6 visions of Service Schedule PDS, it shall be the Customer's obligation at its expense to cause its Supplier to make deliveries of power and energy to the interconnection points on the Company's system at which the power and energy is received by the Company continuously in excess of the ( e a=_m_

m. e ~o' s q -0. load requ'irements at the Point (s) of Delivery to which the Company is transmitting the power in amounts equal to the losses for the Thelosseswikibedeterminedbymultiplying transaction involved. the average loss factor (for the appropriate voltage) times the amount of energy so transicitted. The Customer or Supplier shall fully absorb and bear the burden of such losses. e 0 4 e 4 6 9 e 9 e et 9 4 l I 4 e e "M 4 ( M h-*hhAN Mh tEk.t.C > K.GP hhCL.. %..h EMG. N Ahhh W.A m* N WW Nasame n hoheh^^^h=NM-^NA"-^--

.m w o SCH. GES Page 1 EERVICE SCHEDULE GES EMERGENCY SERVICE 0.1 This Schedule GES is agreed to on 19 to be effective under, and as a part of, that Power Delivery Agreement (Agreement) between Gulf States Utilities Company (hereinafter referred' to as Company) and (hereinafter referred to as Customer), dated 19 The term of this Service Schedule shall run concurrently with the Agreement, provided that either party can terminate this schedule by written notice given to the other party not less than four (4) years in advance of the termination date. SECTION 1 - EMERGENCY SERVICE 1.1 The intent of this Schedule is to provide for emergency assistance from Company to the Customer under the terms and conditions set forth herein and in the Agreement. 1.2 Emergency Service for the purpose of this Schedule shall meant (a) Energy

• supplied by Company (Seller) to Customer (Buyer) during any period or periods when emergency conditions beyond the control of Customer's Supplier exiqts temporarily on the system of. Customer's Supplier so that generation and transmission facilities of Customer's Supplier's system, including purchases 6

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p 9 SCH. GES Page 2 4 (not including such Emergency Service), are inadequate to carry Customer's system load responsibility. 1.3 When Customer desires Emergency Service, es defined in parkgraph 1.2 above, which Company is in a. position to furnish, and Customer or Customer's Supplier, requests Emergency Service from Company-and an agreement is reached as to the amount of Emergency Service which can be delivered by Company and the probable duration of such delivery; then Company shall furnish the requested Emergency Service from any available source (including purchases from a system or systems not a Party to Agreement for resale to Customer, if requested by the Customer-or Supplier) to the extent that, in the judgment of Company, the generation or purchase and the delivery of such Emergency Service will not impair or jeopardize service in the Company's system or its commitments *to others. SECTION 2 - CONDITIONS FOR SERVICE 2.1-It is agreed that Company has no responsibility or obligation to make-up or replace any deficiency of Customer's Supplier, but Company will attempt to provide Emergency Service to the maximum extent . practicable as set forth in this Schedule. 2.2 At the time of any request for Emergency Service Customer shall give Company information concerning the nature and extent of the conditions causing the emergency. I _...a..._....-

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.4 l.op i o SCH. GES Page 3 SECTION 3 - RATE AND BILLING 3.1 Emergency Service supplied hereunder shall be billed and paid for under the higher amount calculated under (a) or (b) below, or under (c) 1f applicable (a) 17.5 mills per kilowatthour; or (b) Company's cost of fuel for generating such energy, including start-up costs,' if any, plus 5 mills per kilowatthour; or ' (c) 110% of Company's costs to purchase such energy from another supplier, and provided the 10% amount shall not exceed 2 allis per kilowatthour. a 9 e O 4 -A M b A I-' A ^

mam.m 4 4 p R e EXHIBIT "A" TO SERVICE SCHEDULE PDS Delivery Voltage Initial Specified Effective Point Which Capacity . Capacity Date Delivered KW XW Amended .tt 4 4 Date, Exhibit "A" 1 .... ~.. . _ _ _ _...}}