ML20055G495

Decommissioning Financial Assurance Certification Rept

ML20055G495
Person / Time
Site:	Haddam Neck File:Connecticut Yankee Atomic Power Co icon.png
Issue date:	07/31/1990
From:	NORTHEAST UTILITIES SERVICE CO.
To:
Shared Package
ML20055G492	List: B13569, Forwards, Haddam Neck Plant Decommissioning Financial Assurance Certification Rept ML20055G495
References
NUDOCS 9007230248
Download: ML20055G495 (67)

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. ] , General Offices e solden street, Berlin. Connecticut q P.O. Box 270 0 .mos..it ma caaa HARTF ORD. CONNECTICUT 06141-0270 i k L J ",,'*,",' [*M g ( A M 000 j ] 1 i July 18,1990 t Docket No. 50 213 l B13569 i RE: 10CFR50.75 i U.S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, DC 20555 i Gentlemen: t i Haddam Neck Plant i Decomminnionino Financial Assurance Certification Rooort i i The-Nuclear Regulatory Commission's (NRC) regulations require that on or before July 26, 1990, all production or utill:ation facility licensees submit to the NRC 'information in the form of a report as described in 10 CFR 50.75 indicating how reasonable assurance will be provided that funds will be available to decommission the facility"1 This Decommissioning Financial Assurance Certification Report (Report) addresses the Commission's decommissioning financing requirements applicable to the Haddam Neck nuclear facility (hereafter referred to as f the Unit). This report is submitted by Northeast Utilities Service Company (NUSCO) as agent on behalf of the Unit's Licensee and Owner, the Connecticut Yankee Atomic Power Company (CYAPCO). CYAPCO is in turn owned by ten (10) regional electric utilities which also purchase the Unit's entire electrical generation. A list of CYAPCO's owners is provided in the attached l 1 10 CFR Paragraph 50.33(k)(2). .i .. -. ~ _m.,

I l L i U. S. Nuclear Regulatory Commission B13569/Page 2 July 18,1990 i Connecticut Yankee OriginalPowerContract.2 The Unit is a Pressurized Water Reactor (PWR) licensed for 1825 MWt for which NRC License Number DPR 61 is currently and will continue to be in effect on July 26,1990 and thereafter, in accordance with 10 CFR 50.75(c), NUSCO certifies that, utilizing the financing methodology described below, funds In the amount of at least $125.7 million (1990 dollars) will be available to decommission the Unit.3 This figure will be annually adjusted during the licensed operating life of the Unit by the adjustment factors defined in 10 CFR 50.75(c)(2). CYAPCO is accumulating decommissioning funds to address NRC financial assurance requirements in an external sinking fund in accordance with 10 CFR 50.75(e). This sinking fund was established in April 1984 and was subsequently amended in 1987. A copy of the related Instrument, Master Trust Agreement, Reserve Funds for Connecticut Yankee Nuclear Unit Decommissioning Costs, is attached hereto. This document conforms with 10 CFR 50.75(e). Finally, NUSCO certifies that each owner of CYAPCO has agreed to be financially responsible for its share of the Unit's decommission costs pursuant to the terms of its Power Contract, the 1987 Supplementary Power Contract and Additional Power Contract, with CYAPCO, copies of which are attached. Each owner has entered into identical agreements with CYAPCO. l a Please note that Hartford Electric Light Company has been merged into the Connecticut Light and Power Company (CL&P). As such. CL&P's ownership in CYAPCO is 34.5%. 8 The escalation factors used by NUSCO were those required by 1oCFR50.75(c)(2) and were the most recent available at the time this report was prepared. The source and date for each factor is listed below. Factor Source Data Labor Monthly Labor Review 12/89 Energy Producer Price Indexes 1/90 Waste Burial NUREG 1307, Report on Waste Burial Charges 12/88

i .c U. S. Nuclear Regulatory Commission B13569/Pa0e 3 l July 18,1990 if there are any questions regarding this submittal, please contact Mr. Bryan W. Cook at (203) 665 3718. r Very truly yours, r NORTHEAST UTIUTIES SERVICE COMPANY 24 ) a E. J. Mroczka Senior Vice President 1 L oc: T. T. Martin, Region I Administrator A.B. Wang, NRC Project Manager, Haddam Neck Plant J.T. Shediosky, Senior Resident inspector, Haddam Neck Plant t 1 i k

l i l 1 SUBMITTAL OF REPORT CERTIFYING ] i DECOMMISSIONING FINANCIAL ASSURANCE FOR I THE HADDAM NECK NUCLEAR FACILITY SUBMITTED ON BEHALF OF CONNECTICUT YANKEE ATOMIC 00'#ER COMPANY j i BY THE NORTHEAST UTILITIES SERVICE COMPANY I 4 l DATED JULY 18, 1990 l q t' -i

r J 1. i i i l i 1 Table of Contents l Decommissioning Financial Assurance Certification Report fu the Haddam Neck Nuclear Facility i Attachments ) l Amended and Restated Indenture of Trust, Reserve Funds for Connecticut Yankee Nuclear Unit Decommissioning Costs ll Power Contract lll 1987 Supplementary Power Contract lV. Additional Power Contract h 4 1

. ) i l F L r ' f l t i ATTACHMENT I i e i t I f 1 ) 6 ? k V e 1 l-l' l i l l l L. 1-l -~ - - - + -.

AMENDED AND RESTATED INDENTURE OF TRUST RESERVE FUNDS FOR CONNECTICUT YANKEE NUCLEAR UNIT DECOMMISSIONING COSTS 4 J This INDENTURE OF TRUST, amended and restated as of i April.1, 1987, between CONNECTICUT YANKEE ATOMIC POWER COMPANY, - a Connecticut corporation having its principal office in Berlin, j connecticut (hereinafter called " Connecticut Yankee"), and THE CONNECTICUT BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a banking corporation having its principal office in Hartford, Connecticut (together with its successor or successors hereinafter called the " Trustee"). i WHEREAS, Connecticut Yankee owns and operates a nuclear I electric generating plant of the pressurized water type, located (- at Haddam Neck, Haddam, Connecticut, which activities are i performed pursuant to an Operating License, No. DPR-61, dated t Juns 30, 1967, as amended, issued in Docket No. 50-213 by the United States Atomic Energy Commission (now the Nuclear Regulatory Commission, which, together with any successor agency 1 or agencies, is hereinafter called the "NRC"); and t I l e

c' 2 WHERE'AS, rules and regulations of the NRC impose upon each such licensee the responsibility for payment of the costs of ) permanent shutdown of its reactor and maintenance of such facility in a safe condition after said shutdown; and l WHEREAS,: Connecticut Yankee desires to make provision for ] payment of the expenses of the decommissioning of its nuclear electric generating plant in accordance with said NRC rules and regulations; WHEREAS, Connecticut Yankee ucrires to establish two independent trusts to assure its financial ability to meet obligations to the NRC, other governmental bodies, and the general public in connection with said decommissioning, such trusts to hold all payments made to them and any earnings thereon solely for the purpose of meeting such decommissioning expenses and thereafter for the benefit of the purchasers of power from Connecticut Yankee; and WHEREAS, one of such trusts is being established to comply with the requirements for nuclear decommissioning reserve funds set forth in Section 468A of the Internal Revenue Code of 1986, l as amended (the " Code"); and l t +

, =. - f L WHEREAS, the second of such trusts is being established to serve as a vehicle for the deposit and accumulation of such additional funds as Connecticut Yankee may-from time to time determine are necessary or desirable to provide for the decommissioning expenses of its nuclear electri'c generating plant in accordance with NRC rules and regulations; and WHEREAS, Connecticut Yankee and,the Trustee have heretofore entered into an Indenture of Trust dated as of April 30, 1984 (the "1984 Indenture of Trust"); and I WHEREAS, the subsequent enactment of Section 468A of the Code has made an amendment and restatement of said 1984 Indenture of Trust advisable; and l WHEREAS, Section 2.03 of said 1984 Indenture of Trust permits its amendment in order to comply with a law of any governmental body having jurisdiction; and i 1 WHEREAS, all conditions and requirements necessary to make l l this amended and restated Indenture of Trust a valid and legal instrument, in accordance with its terms and for the purposes herein expressed, have been performed and fulfilled and the l execution and delivery hereof have been duly authorized. 1 l 1 j

h .4 L 2 NOW, THEREFORE, in consideration of the foregoing premises and for the purposes of establishing.the trusts and securing the faithful performance and observance of the covenants and conditions hereinafter set forth, Connecticut Yankee has executed and delivered this amended and restated Indenture of Trust to the Trustee and said Trustee does by these presents agree, on behalf of itself and its successor or successors in trust, to hold all property and rights conveyed to it or them pursuant hereto upon the trusts and subject to the conditions herein set forth.. And it is hereby covenanted, declared and agreed, upon the trusts and for the purposes aforesaid, as set forth in the i following covenants, agreements, conditions and provisions, viz.: l l ARTICLE I Definitions l l Sectio'n 1.01 Defined Terms. For all purposes of this L Indenture of Trust, unless the context otherwise specifies or L requires: l l l

7 5-A. " Connecticut Yankee" shall mean Connecticut Yankee and its legal representatives, so long as Connecticut Yankee continues to own the Unit, and thereafter " Connecticut Yankee" chall mean any corporation or corporations which succeed Connecticut Yankee in the manner prescribed in Article V or any other entity or entities which succeed to the rights and obligations of Connecticut Yankee with respect to the Unit. B. The_" Unit" shall mean the nuclear electric generating plant and the land presently owned by Connecticut Yankee and located at Haddam Neck, in Haddam, Connecticut, as it shall from time to time exist, together with such structures, components and equipment now or hereafter associated therewith which become i l subject to decommissioning rules and regulations of the NRC. C. The " Operating License" shall mean Operating License l' No. DPR-61, dated June 30, 1967, as heretofore or hereafter amended, originally issued in Docket No. 50-213 by the Atomic Energy Commission (now the NRC). o D. The " Uniform System" shall mean the Uniform System of i L Accounts prescribed by the FERC for Major and Non-Major Public l [ Utilities and Licensees, as from time to time in effect, or any i cystem of accounts hereafter promulgated in substitution i therefor. l I W

[.i n l i E. Trustee" shall mean The Connecticut Bank and Trust i l Company, National Association, and its successors which shall l become such in the manner prescribed in Section 6.04. + F. Officers' dertificate" shall mean a certificate signed by the President (or a Vice President) and the Treasurer (or an Assistant Treasurer) of Connecticut Yankee or executives of 5 Connecticut Yankee with equivalent responsibilities, and delivered to the Trustee. G.- Purchasers" shall mean those electric utilities which purchase electric power from the Unit pursuant to power contracts with Connecticut Yankee. I H. Nuclear Regulatory Commission" or "NRC" shall mean the ' United States Nuclear Regulatory Commission or any governmental [ agency or agencies succeeding to its authority. I. FERC" shall mean the Fedcral Energy Regulatory Commission or any governmental agency or agencies succeeding to its authority. 6 L L d i m

r7 1 , l t i ARTICLE II Identification, Nature and Duration of the Trusts L Section 2.01. Identification of Trusts. The trusts j established by this Indenture of Trust shall be named collectively the " Connecticut Yankee Decommissioning Trusts," and the trusts shall be individually named as follows: r Connecticut Yankee Trust A t Connecticut Yankee Trust B t The trust identified above as " Trust A" shall be established and administered as s nuclear decommissioning reserve fund under Section 468A of the Code. The trust identified above as " Trust l B" shall be established and administered as a supplemental l nuclear decommissioning reserve fund. Section 2.02. Nature and Purpose. The Connecticut Yankee Decommissioning Trusts are intended to assure provision for payment of all, or as great a portion as poss'ible, of the F expenses associated with the decommissioning of the Unit. The Connecticut Yankee Decommissioning Trusts will be r independent of Connecticut Yankee and its stockholders, and will constitute vehicles which will hold and disburse, in accordance with the provisions hereof, moneys collected from the Purchasers 4 m

[ 8- ' ~ 4 4 b i1 for the purpose of defraying such decommissioning expenses. If, after completion of the decommissioning process for the Unit, it is determined that excess moneys may have been co11seted or accumulated in one or both trusts pursuant to this Indenture of Trust, any such excess shall be distributed to or for the benefit of the Purchasers purnuant to Article VII hereof. Section 2.03. Duration: Amendment. The term of the Connecticut Yankee Decommissioning Trusts shall extend until the earliest of (1) the exhaustion of all moneys in the trusts at a time when Connecticut Yankee is under no further obligation to make deposite under Section 4.01 hereof, or '* the completion of the decommissioning process for the Unit, .c other action or order of the NRC or any successor agency having similar effect, l or (3) notification to the Trustee by Connecticut Yankee of its decision to have any or all of these trusts merged into substantially equivalent trusts and the transfer of all the L moneys in the trusts to such successor trustc

provided, however, that any such transfer shall not change the L

identification of any trust. It is recognized that, depending 2 [ upon the amounts accumulated in the trusts and the method or i i methods of decommissioning of the Unit authorized by the NRC and l other governmental agencies having jurisdiction, the trusts may L extend for an indefinite period. 1 L i

L !? I .g. i i I The trusts are irrevocable by Connecticut Yankee; provided, however, that Connecticut Yankee may merge any or all of these i trusts into other trusts pursuant to the preceding paragraph, { and Connecticut Yankee may amend this Indenture of Trust in order to comply with any law, order, rule or regulation of any i t governmental body or agency having jurisdiction over (1) the t decommissioning of the Unit, (ii) the rates charged by. Connecticut Yankee for power from the Unit, (iii) taxes paid by r the Connecticut Yankee, or (iv) the trusts created by this Indenture of Trust; subject, however, to the right of the TrusteeEto decline to enter into any such amendment if, in its opinion, such amendment may not afford adequate protection to the Trustee when the same shall become operative, and provided that no such amendment shall disqualify Trust A as a " Nuclear Decommissioning Reserve Fund" under Section 468A of the Code. ARTICLE III l Farticular Covenants of Connecticut Yankee i i l l Connecticut Yankee hereby covenants as follows: Section 3.01. Title to Unit. At the time of the l execution and delivery of this instrument, Connecticut Yankee is well seized and possessed of the real property in Haddam, l'

i 10 i Connecticut, on whi.ch the Unit is located, the Unit itself and all personal property appurtenant thereto, i Section 3.02. Corporate Existence. Except as otherwise specifically permitted by this Indenture of Trust, Connecticut i Yankee will do or cause to be done, so long as the Unit is in commercial operation, all things necessary to preserve, extend and keep in full force and effect Connecticut Yankee's existence, and those rights and franchises of Connecticut Yankee which relate to the Unit and performance by Connecticut Yankee of its obligations under this Indenture of Trust. ~ 1 i rection 3.03. NRC Licenses. At'the time of the execution and delivery of this instrument, Connecticut Yankee, as licensee under the Operating License, is subject to the authority of the NRC. Connecticut Yankee will obtain and thereafter maintain, to the extent within its capacity, in full force and effect, all [ licenses and other public authorizatione, necessary or required I i for the operation of the Unit (to the extent Connecticut Yankee continues such operation), for the decommissioning of the Unit, and for subsequent possession and surveillance of the site. Section 3.04. Instruments of Further Assurance. Connecticut Yankee will execute and deliver such further instruments and do such further acts as it considers necessary -- {

'i-- 33, or proper to carry out more effectually the purposes of this Indenture of Trust or to transfer to any new trustee or trustees the estate, powers, instruments and moneys held in trust ' hereunder. Section 3.05. Appointment of S.uccessor Trustee. Whenever necessary to avoid or fill a vacanef in the office of Trustee, Connecticut Yankee will, in the manner provided in Section 6.04, appoint a Trustee so that there shall at all times be a Trustee hereunder which is eligible and qualified in accordance with the provisions of Section 6.02. ARTICLE IV Decommissioning Trust Funds Section 4.01. Deposits to Decommissioning Trusts. All moneys deposited with the Trustee pursuant to the provisions hereof, together with income earned thereon, shall be held by the Trustee upon the trusts hereof. Each of the Connecticut Yankee Decommissioning Trusts is held for the same purposes, whether such trust is identified as " Trust A" or " Trust B," and Connecticut Yankee shall instruct the Trustee in writing to deposit its payments in either Trust A or Trust B. Connecticut Yankee may also elect to instruct the Trustee to

[ 12 trrnsfer moneys from Trust B to Trust A, subject to the provisions hereof, Section 468A of the Code, and such reasonable procedures as the Trustee may prescribe. Connecticut Yankee shall have deposits made to the Connecticut Yankee Decom'issioning Trusts in accordance with ~ m this Section so long as required in order to complete the then applicable schedule of proposed deposits. No deposit shall be made in Trust A (which Connecticut Yankee has elected to be treated as a nuclear decommissioning reserve fund under Section 468A of the Code) in excess of the amount which is allowable as a deduction under said Section 468A. Connecticut Yankee shall be solely responsible for determining whether any deposit or transfer of funds made by Connecticut Yankee hereunder qualifies for a deduction under. Section 4 6P,A of the Code and, if so, the amount of such deposit or transfer that is so deductible. The Trustee shall have no responsibility for reviewing or confirming any determination made by Connecticut Yankee with respect to the tax treatment of any deposit or transfer of funds made by Connecticut Yankee hereundsr. Connecticut Yankee shall prepare a schedule of proposed deposits to be made into the trusts for the purpose of e

n A" ' L accumulating moneys for eyplication toward payment of the costs reasonabl'y anticipated in connection with decommissioning the Unit. Such schedule shall be filed by Connecticut Yankee with the Trustee. Thereafter, Connecticut Yankee shall cause moneys collected from Purchasers to be deposited into the trusts in j accordance with~the schedule from time to time in effect, which schedule shall at all times be based upon. charges which are permitted by the FERC to be collected and which are not subject to refund. Connecticut Yankee may make such deposits from moneys received by it from the Purchasers, or Connecticut Yankee may arrange to have such deposits made by the Purchasers directly to the Trustee as contributions to Trust B and, if permitted by.Section 468A of the Code, to Trust A. Connecticut Yankee shall give reasonable prior notice to the Trustee of L those deposits which shall not be made by Connecticut Yankee. ? I If at any time the making of the deposits contemplated ~ hereby becomes subject to the jurisdiction of the FERC or any other governmental agency having jurisdiction over rates charged by Connecticut Yankee to the Furchasers, then Connecticut Yankee shall promptly suomit a schedule of deposits to any such agency l and, after final action by any such agency, shall file a l l certified copy of such schedule with the Trustee. Any such I schedule shall be deemed to be in effect until a subsequent schedule is duly approved or accepted and a certified copy of such subsequent schedule is filed with the Trustee. I

c 14 e At least once every five years after such deposit schedule is initially filed with the Trustee and continuing until thx Unit ceases to generate electricity and is retired from active j service, Connecticut Yankee shall review the schedule to f determine if the level of deposits in the Fund remains reasonably designed to accumulate appropriate moneye for application towards payment of decommissioning costs, taking f into account changes in technology and applicable regulatory I requirements. If, at any time, in the opinion of Connecticut Yankee a revision of the schedule is appropriate, it shall promptly prepare such a revision, obtain any necessary i regulatory permissions or approvals and deliver a certified copy to the Trustee, whereupon such revised schedule shall supersede ,the schedule previously in effect. Connecticut Yankee shall not be permitted at any time to ^ offset any deposits required pursuant to the provisions hereof by application in any way of expenditures or obligations which might otherwise qualify for withdrawals under Section 4.03 hereof. Moneys held pursuant to this Indenture of Trust as part of l any trust estate shall be applied or paid by the Trustee only in accordance with the provisions of thin Article IV. n ,n --,.n,

e q = 13 I \\ Section 4.02. Management of Trust Moneys. Connecticut j i Yankee intends that the funds in Trust A snall be held, invested, and used in such.a manner that the trust qualifies as a " Nuclear Decommissioning Reserve Fund" under Section 468A of the Code. The Trustee shall hold and invest such funds pursuant to written investment guidelines promulgated by Connecticut Yankee in consultation with the Trustee. [ The Trustee shall hold and invest funds in Trust B pursuant to written investment guidelines promulgated from time to time by Connecticut Yankee in consultation with the Trustee. It is recognized that funds deposited. in Trust B may not quaJify for deductions under Section 468A of the Code. The guidelines promulgated from time to time by Connecticut Yankee shall take into account considerations appropriate to achievement of the purposes described in this Indenture of Trust, such as the estimated commencement date for decommissioning the Unit, the amounts of moneys held in trust and anticipated earnings, the preservation of accumulated principal, appropriate liquidity throughout the estimated remaining life of the Unit (so that amounts of decommissioning 1

I 16-4 1 funds are readily available-on relatively short notice in the l event of a premature decommissioning of the Unit), and the goal of-maximizing trust earnings af ter payment of applicable taxes and other expenses. In investing, reinvesting, exchanging, selling and otherwise managing the trusts, the Trustee shall discharge its duties with the care, skill, prudence and diligence under the circumstances then prevailing which persons of prudence, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of a like character and with like aims and in accordance with the written investment guidelines promulgated from time to time by Connect;. cut Yankee in consultation with~the Trustee. Connecticut Yankee shall have the power to appoint one or more investment managers to manage, or direct, the acquisition, holding or disposition of any trust assets in accordance with the terms of a written appointment made by the Connecticut Yankee: provided, however, that the Trustee shall at all times retain custody of all trust assets. Any such investment manager shall, udless its appointment provides otherwise,'have the power to direct the Trustee in, and in such case the Trustee shall not be responsible for, the exercise of those powers expressly given the Trustee under this Section 4.02 with respect to all or part s 4

t 37 of the trust moneys, pursuant to the terms of its appointment by Connecticut Yankee, and the Trustee shall, upon receipt of an officers' Certificate certifying such investment manager's t appointment and written acknowledgement of such appointment from such investment manager satisfactory in form to the Trustee, exercise such powers as directed in writing by such investment f manager. The Trustee shall not be liable for any diminution in I the value of the trusts as a result of following any such direction or as a result of not exercising any such powers in the absence of any such direction. Notwithstanding the foregoing, the Trustee shall at all times be responsible for l determining whether an investment direction by an investment-1 manager is in compliance with Stetion 468A(e)(4) of the Code, and if any investment direction does not so comply, the Trustee j shall not fol, low such direction and shall so notify Connecticut Yankee. If no such invectment manager has been so appointed by Connecticut Yankee, the Trustee shall have full authority to invest and reinvest the Fund in accordance with the provisions of this Indenture of Trust, and its associated written investment guidelines, and shall not be required to follow the directions of any other person. e 4 - = ~ ~,

[ a Section 4.03. Withdr: sal of Trust Moneys. A. Upon compliance uith the requirements of this Section, moneys held by the Trustee in one or both of the trusts may be withdrawn for the following purposes ~ (1) To pay or reimburse Connecticut Yankee for expenditures which constitute payment of the Decommissioning Expenses of the Unit; (2) To pay taxes and other reasonabla expenses incurred in connection with the administration and operation of the trus,ts, to the extent such taxes and expenses are not paid directly by Connecticut Yankee; (3) Pursuant to an Officers' Certificate, to transfer l moneys from Trust B to Trust A. L In computing the amounts which may be withdrawn under (1) above, the gross amount of an expenditure shall be reduced by any refunds, rebates, or other moneys similarly received by Connecticut Yankee with respect thereto. Any such' refund, rebate or similar payment received after the certification of the expenditure or obligation to which it relates, and which has not previously been taken into account shall be applied within l three mor.ths after its receipt to reduce the amount of a i L subsequent w.;thdrawal from. the trusts made under this Section or i i shall b9 redeposited in the trusts f rom which the amount was J

a;p F ~ ' withdrawn. In making payments or reimbursements under (1), the Trustee shall transfer from Trust A and/or Trust B as specified in an Officers' Certificate. B. Unit Decommissioning Expenses shall include: (1) All costs and expenses of removing the Unit from service, including without limitation, dismantling, mothballing, removing radioactive material (excluding spent nuclear fuel) to temporary and/or permanent storage sites, decontaminating, restoring and supervising the site, and any costs and expenses incurred in connection with proceedings before ~athorizr ton governmental authorities relating to decommission the Unit or remove tc.. Unit from service; (2) All costs of labor and c;

her directly or indirectly incurred,.....-

without limitation, services of foremen, inspectors, supervisors, surveyors, engineers, security personnel, counsel and accountants, performed or rendered in connection with the decommissioning of the Unit and the removal of the Unit from service, and all costs of materials, supplies. machinery, construction equipment

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-and. apparatus' acquired or used (including rental charges;for machinery, equipment or: apparatus hired) - for-or in connection.with the decommissioning of the' Unit and'the removal of-the Unit from 6crvlte, and all-administrative costs, including sarvj.c56;of1 counsel and 4 financial advisers, of any applicable ~-independent. trust or other. separate fund; it being understood.that any amountLexclusive'of proceeds of insurance realized by' 4 Connecticut Yankee as salvage"on any machinery, I -construction equipment and apparatus, the cost-of'which-shall be was, charged to the decommissioning' expense, treated ast a reduction of the amounts otherwise chargeable oniaccount of the costs of decommissioning ~ of the Unis; and (3).'All overhead costs incurred by Connacticut-YankeeLand its agents which is. applicable to:the Unit during its decommissioning: period, including, without limiting the generality of the foregoing, taxes (other than taxes cn1 or in respect of income), charges, licenses, excises and assessments, insurance premiums, and curety bond premiums. Without limiting the generality of the foregoinc, any other amounts expended or to be paid with respect to decommissioning 0 0

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+ y of the Unit or. removal of the Unit from service shall constitute L part of the Unit Decommissioning Expenses.if such amounts are, e or when paid will be, either (1) properly. chargeable to any account related-to decommissioning of a nuclear generating unit in accordance with the Uniform System or general'ly accepted accounting principles as then in effect, or (ii) properly

chargeable to decommissioning of a nuclear generating unit in I

accordance with then applicable' regulations of.the MRC cr the i FERC or any other governmental. agency having jurisdiction. I h C. A withdrawal under this Section from the trusts shall j q be paid only upon receipt by the Trustee of~an Officers' Certificate dated on-the date of the withdrawal application: { (1) stating'the amount to be withdrawn, and the .i l purposes for which the amount.is to be used; L i

(2) specifying in reasonable detail by general le L

classification the underlying items of expenditures and j ( L obligations'which will constitute part of the Unit Decommissioning Expenses, and stating-that such expenditures. t constitute, or obligations when-paid will constitute, part )

u.

of the Unit.Decommissians,ng Expenses, and that none of such j I expenditures and obligations has been made the basis of a prior withdrawal under this Section; a [I

7 g Jh k' : >, c n t t .n ~ + r l ^ .if ' stating that any moneys which.have previously been. ~ (3). withdrawn from the trusts to pay obligations;have been ] I expended on account of items which constitute part of the .UnitLDecommissioning Expenses;'and j (4) stating that no governmental approval.for such i i . withdrawal is necessary or, if at any time the making of i withdrawals herefrom becomes subject to the jurisdiction of any governmental agency, stating that such regulatory 'i -i ~ approval has been obtained and furnishing a copy =thereof. ) 'In addition to withdrawals of Fund moneys otherwise q u permitted by this'Section, the Trustee shall distribute to the Purchasers'any moneys which are determined by Connecticut Yankee t and byfa governmental authority having jurisdiction to be in excess of' amounts reasonably needed to be retained in the fund g L to provide for payment of Unit Decommissioning Expenses. Any such distribution of moneys to the Purchasers shall be made by j g, . the Trustee in the same manner as a final distribution pursuant Jco Section 7.02. 9 r k. j' 0 4 r

ba e bi ' i, ARTICLE V Consolidation-Merger, Conveyance or Transfer-i 1, y Section 5.01. Connecticut-Yankee Mey Consolidate, etc., on ~Certain Terms. Nothing in this Indenture of Trust shall be interpreted to prevent any consolidation or merger of 1 Connecticut Yankee with, or into, any other entity or entities, 1 or the conveyance or transfer of any of their. respective rights, < title and interest in the Unit to any other entity or entities; q .provided, however, that upon any such consolidation, merger, y p j conveyance or transfer, the successor entity or entities shall -i 1 L be lawfully entitled to own and operate the Unit and shall 6 l execute and deliver-to the Trustee, simultaneously with such consolidation, merger, conveyance or transfer, a trust agreement i supplemental hereto in form satisfactory to the Trustee, containing an agreement on the part of such successor entity or entities to assume the due and punctual performance'and observance of all the covenants and conditions of this Indenture of Trust, with the same effect and to the same extent as if-such successor entity or entities had been an original party hereto. Section 5.02. Other Successors. Nothing in this Indenture of Trust shall be interpreted to prevent Connecticut Yankee from transferring its right, title and interest in, and its obligations with respect to, the Unit to any agent, representative, authority, agency, commission or other entity or entities, authorized by applicable state and federal statutes or

.. ie wi a 'I .n . 24-regulations to assume responsibility for the decommissioning of= ~ isuch'a nu'elear facility; provided,:however, that such-7 transferee shall execute and deliver to the Trustee a trust agreement supplemental hereto in form satisfactory.to the. . Trustee, containing an agreement =on the'part of such transferee entity or, entities to aisume the due and punctual performance 6: and observance of all the covenants and' conditions-of this-Indenture of Trust, with the same effect and to the'same extent-as if'such transferee had been an original party hereto. Section 5,03. Successor Substituted. In the event Connecticut Yankee, pursuant to Section 5.01 or:5.02, shall consolidate with or merge int 9 any other entity or shall convey or transfer all or.substantially all their respective rights, title and interest in the Unit to any other' entity, the -successor entity, upon causing to be executed and delivered the-supplemental Indenture of Trust referred to in Section 5.01 shall succeed to and be substituted hereunder with the same effect as if such successor entity had been named herein as an original party.

r: j.- e ARTICLE VI The Trustee Section 6,01. Acceptance of Trusts; Certain Terms of the-Tru sts. The Trustee, for itself and its successors, hereby ~ accepts the trusts created by this Indenture of Trust and agrees - to perform the same, but only upon the terms expressly herein l set forth, including the following 'I l

1 A.

The-recitals herein shall be taken as the statements of Connecticut, Yankee and shall not be considered. j as made by, or imposing any obligation'or liability upon, .j .-{ the Trustee. The Trustee makes no representations as te the L or validity of the trusts (or any;part j value, condition, 7 i L thereof) to achieve the purposes of this Indenture of Trust 1 l and the trusts created herein, and the Trustee shall: incur 'I o t no liability or responsibility in respect of any of such 1 ^ l matters. L U B. The Trustee shall be-under no responsibility or l-L duty with respect to the disposition of any moneys duly paid to Connecticut Yankee or its agent under-any. provision i hereof. C. The Trustee shall be under no responsibility or l-obligation to ecllect any deposit of moneys into the l trusts. 4 M

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26- \\ 1 -? d,. . D.- The Trustee shall'not rely upon-any default under^ 1 any covenant in Article-III hereof as aidefense against- + F performing its trusts and powers hereunder. Fa E.. The Trustee may execute,any of thel trusts or powers-hereof and. perform any duty hereunder either directly or through'its agents or attorneys. l - F. The Trustee may, as an expense of administering-the truste, consult with legal counsel-to be selected by it (who may btLeounsel for Connecticut Yankee), and.the Trustee \\ shall not'ime liable for any action taken or suffered by it- ~in good faith in accordance with the advica of such 1 counsel. G.

The Trustee shall have the-right, from time to.

time, to be reasonably compensated.for.all services rendered hereunder and to be reimbursed for all reasonable expenses incurred by it in the administration of the trusts created hereby. If not paid by Connecticut Yankee 5following' -j reasonable notice from the Trustee of such-services and compensation, the Trustee shall have the right to apply trust moneys held by it hereunder to the payment of such compensation and expense reimbursements. e 4 8

i ' t 1, 't ' f! ,j ' ,g,-. ti y a E 3; .H.- Connecticut Yankee,shall, indemnify the Trustee' j a against anylliability it may-sustain, in good faith and ~ without. negligence, in the performance of_its duties fhereunder. ,4 h I. -The Trustee'shall be protected in acting upon any i resolution, request, consent, order, certificate', _l notice', report, opinion, statement, obligation, appraisal or'other 1 document' believed by it to be genuine and to have besn-d 3 signed by the ' proper party or. parties. 1 Sun Trustee-shall t accept a board of-directors' resolution as conclusive evidence that a resolution has been duly adopted and is in, full forco and efdect. Except as otherwise expressly J I provided, an Officers' Certificate shall be' accepted by the L Trustee >as conclusive evidence of the facts therein stated, i and shall constitute full'protgetion to the Trustee for'any action taken or omitted to be 'taken by the: Trustee in good faith reliance thereon. Notwithstanding.the fact that-the S Trustee shall have no obligation to make any investigation into the matters stated in any such notice, resolution, request, consent, order, certificate, report, opinion, statement, obl2gation, ap'praisal or other paper o'r document, the Trustee may, in its discretion, make such further inquiry into such facts or matters as it may see fit. b f t I

ym SA; l L r: j i;- >/ ::D 4 \\ e k J. .The' Trustee shall maintain appropriate records of-all d'eposits, investments and earnings thereon received by the trusts and all disbursements made : from the trusts,~ and t each month the Trustee shall provide to Connecticut Yankee a q written! statement of all transactions.. In addition,-the ii Trustee shall provide to Connecticut Yankee at least e l annually a report: certifying as to:the! activity in each of the~ trusts over the period since the most recent report and pt h the balances at the beginning and end of such period, m K. Connecticut Yankee and its agents shall have the right to review,-inspect and' audit the books and records of the Trustee relating to the trusts. L. The' Trustee shall cause.fpropriate tax returns with respect to the trusts and income earned by each of the trusts to be prepared and. filed and shall pay any taxes o shown tc be due out of the appropriate trust moneys held by 1 it. The Trustee shall have the right to challenge the s oblication to make payment of any such taxes'and shall have i - the authority to settle any proceedings related to such taxes, and to receive refunds and take any other action necessary or appropriate in regard to taxes on the trusts or income earned by the trusts. i. 9 I-i . ~ - i'

'U l a. o in'u-i[ c.- ' 4 _.M., TheLTrustee shall prepare;and submit such-o applications, reports and other-documents'as may be required. ' by any governmental authority-identified in.an Officers'- l Certificate as having jurisdiction over the trusts and performance.of the trust obligations and activities specified by this Indenture of Trust. 't -t .-i N. Without in any way limiting the powers and I authority conferred upon the Trustee.by other provisions of-u - this Indenture of Trust or by law, and to enable the Trustee .to perform its duties hereunder, the Trustee is expressly 4 y authorized.and empowered as follows: i To sell, exchange, convey, transfer'or otherwise dispose of any property held by it, by.public or I i private sale. No person dealing.with the Trustee shall be bound to see to tdie application of the purchase -money or to inquire into the validity or expediency of. any such sale or other disposition: w t To make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers granted in this Indenture of Trust; .t' L

f -), h M e,pp: ' J?l' g,?. .30 Q,i ,, ;l. w. ' To: recister any. securities held' in the trusts.1 a its: m own nameHor-in the name'of a nominee and'to hold any i security 11n bearer form or in book entry, or to combine certificates representing such-securities with certificated of the same issue held oy:the Trustee'in 4 other fiduciary capacities, or to deposit or arrange-for the deposit of such securities in a qualified-central depositary even though, when so deposited, such securities may be merged and held in bulk in the name laf the' nominee of.such depositary with other securities i deposited therein by another' person,'or to deposit or arrang'e for the deposit of any socurities issued by the . United States Government, or any agency or instrumentality thereof, with a Federal Reserve bank, ( but the books and records of the Trustee'shall at all' ~ times show that all such securities are part of the appropriate trust hereunder; In-consultation with Connecticut Yankee, to compromise ) or otherwise ad]ust claims in favor of or against the-tructs. Section 6.02. Persons Eliaible for Aopointment as the Trustee. The Trustee shall at all times be a bank or trust 1 9 a.

3, ; .~ 4 1 company having.its principal office-and; place of business in the United States of America,-and shall at all times be a corporation authorized to do businessiin the State of F Connecticut,.with a cerbined capital andtsurplus of at least t .m $100,000,000 and authorized under appli' cable' laws to exercise corporate trust powers and subject to supervision or examination by appropriate federal or-state authorities. If the Trustee L . publishes reports of condition at leastLannually, pursuant to !j l'aw or to the requirements of any supervising or examining l authority referred to in this Section, then, for the purposes of h this Section, the combined capital and surplus of the Trustee shall be deemed t,o be its combined capital and surplus as: set forth in its most re' cent. report.of condition so published. 'l: I L In the event the Trustee ceases toLbe eligible under this Section, it shall resign immediately in the manner and with the effect specified in Section 6.03; if the: Trustee does not so t-resign, it shall be removed forthwith by Connecticut Yankee. l; ' c R Whenever necessary to avoid or fill a vacancy in the office of the Trustee, Connecticut Yankee will, in *he manner provided LJ in Section 6.04, appoint a Trustee so that there shall at all. times be a Trustee eligible under this Section. l I l

g, n I:t-p_ ; .32-- SectionL6.03. Resignation and Removal. The. Trustee'may resign and be discharged from the trusts hereby created by .giv ng at least - six weeks' prior written notice thereof to i Connecticut Yankee. Such-resignation shall'become effective on the day:specified in such notice or upon the appointment of a-successor and such successor's acceptance, whichever is later. 9 Connecticut Yankee may at any time remove the Trustee, with or without cause, up,on at least six weeks' prior written notice, such notice to be in the form of an officers' Certificate of i- ' Connecticut Yankee declaring such removal and specifying the successor trustee-appointed pursuant to Section 6.04. The Trustee, after resignation or removal, may nevertheless retain a lien upon the trust moneys to secure any amounts due to it under any provision of this Indenture of Trust 'Section 6.04. Appointment of Successor Trustee. In the ' event'the Trustee resians, is removed, or becomes incapable of acting or is adjudged bankrupt or insolvent, or if a receiver of the Trustee or its property is appointed or a public officer takes charge or control of.the Trustee or its property or affairs for the purpose of rehabilitation, conservation or liquidation, a vacancy shall be deemed to exist in the office of the Trustee, and a successor shall be appointed by Connecticut Yankse-to fill such vacancy. The validity of any such

i e 3 p t l - appointment,lhowever, shall not be impaired or affected by l failure;to give notice of~such appointment or by:any defect in such' notice, r If, in a proper case, no successor Trustee shall have been -i appointed pursuant to the foregoing-provisions of this Section, or;if appointed, shall not have accepted the appointment, within 60-days after the' resignation of the Trustee, or-the occurrence of a vacancy in the office of the Trustee, the Secretary of the i State of Connecticut may apply to a court of. competent jurisdiction to appoint a successor Trustee, e Section 6.05. . Acceptance of Appointment by Successor Tru stee. A successor Trustee appointed hereunder shall execute an instrument - accepting such. appointment and deliver one counterpart thereof each to Connecticut Yankee, the retiring Trustee, and, if applicable, the court making such appointment. Thereupon, without any further act, such successor Trustee shall 4 become vested with all the properties, rights, powers, trusts and duties of the retiring Trustee as if originally named under this Indenture of Trust; however, any retiring Trustee, when requested by the successor Trustee in writing or by Connecticut Yankee and-upon payment of any lawful charges and disbursements, shall nevertheless execute and deliver an instrument or instruments conveying and transferring to such successor Trustee e I

s t: 34 4 all its properties, rights, powers, and trusts Lhereunder and-shall dul'y assign, transfer and deliver to such successor s Trustee all. property and moneys held by it. hereunder. If the E r successor 1 Trustee reasonably requests an instrument from Connecticut Yankee for the purpose of more fully /and certainly: h , vesting in.and confirming to it said properties, rig ts, powers. and, trusts, then such instrument shall be executed, acknowledged and delivered to it by Connecticut Yankee. Section 6.06. Merger or Consolidation of the Trustee. Subject to the requirements of Section 6.02 hereof, any corporation into which the Trustee may be merged or with which it may be: consolidated or any corporation resulting from any-merger or consolidati'on to which the Trustee shall be a party or' ] anyLcorporation to which substantially all the business and-assets of'the Trustee may be transferred, shal'1 be the Trustee f under this Indenture of Trust, without further act. ARTICLE VII Distribution of Assets uoon Termination f Section 7.'01. Transfer to Successor Trust. In the event that any trust established pursuant to this Indenture of Trust is required or permitted by an action of any governmental 9

7,- e k< 1 4 j I \\ authority having_ jurisdiction to'be, transferred to:another trust or trusts in order to satisfy the purposes specified in Section-1 2,02, Connecticut Yankee shall.have-the right, by written notice: to the' Trustee,~to elect to have such trust or trusts / subsumed into such-other trust or trusts. Such written notice of such j election shall be signed by'the President or Treasurer of Connecticut Yankee and shall direct the Trustee to transfer the. ~ ' trust moneys to the specified successor trust or trusts. Upon l the completion of such transfer, the specified trust shall' terminate. i Section 7.02. Final Distribution. 'Any moneys remaining l in a trust upon termination of the term hereof in accc,rdance with clause (2) of Section 2.03 hereof shall be distributed 1by the Trustee for the benefit of the Purchasers in accordance with h the terms and conditions ordered by-any governmental authority having jurisdiction, or by. Connecticut Yankee in the absence of a governmental-authority having such jurisdiction, If any of the trusts created by this Indenture of Trust'is finally determined to be void for any reason by a court or other governmental authority having jurisdiction, any portion of the i trust estate which cannot then be applied to achievement of the-purposes specified herein shall be distributed in the manner specified in this Section 7.02.

E : ,) i 4 i s f '; 36-j n' l pi '![!O ARTICLE:VIII General Provisions Section 8.01. Compliance Certificates and Opinions. ~ Every certificate or opinion with respect to comp 1'iance-with a condition or covenant provided for in this Indenture of Trust 1 shall include: A. A statement-that each person making such certificate or opinion has read such covenant or condition and-the definitions herein relating thereto. li B. A.brief. statement as to the nature and scope of the examination or investigation upon which the statementsoor opinions. contained in such certificate or opinion are i based. ~ C. A statement that, in the opinion of each such person, he or she har made or caused to be made such examination er investigation as is necessary to enable that person to express an informed opinion as to whether or not such covenant or condition has been complied with. i

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? ? .y, u: v D. 'A statement as to whether or not, in-the opinion of the; person-making such certificate opinion, such b' condition or covenant has been complied with. In any. case where-several matters are required.to be-certified by, or covered by an opinion of, any specified~ person, ~ it is not necessary that all such matters be certified by, or covered by the opinion of, only one such person, or that they be K so certified or covered by only one document, but one such i . person may certify.or give an opinion with respect to some matters and;one (or more) other-such persons as to other matters, and each such person may certify or give an opinion as to such matters in one or several documents. [l Section:8.02. N;o Implied obligations. This Indenture of 1' Trust shall not be interpreted to impose any duty, I responsibility, obligation or liability upon the Truste', or Connecticut Yankee in addition to those duties, O< responsibilities, obligations and liabilities which are expressly 1specified in this instrument. .o l-ARTICLE IX Miscellaneous j l<., Section 9.01. Supplemental Indentures of Trust. Subject j to Section 2.03 hereof, this Indenture of Trust may be amended

<n o 3g_ t i ci or-supplemented:from' time to time by the execution and delivery ( of one or'more. supplemental indentures of trust by.and between Connecticut _ Yankee and -the Trustee, provided.that the amendment or supplement'has' received any required approval or acceptance by any. governmental-body having jurisdiction. i Section 9.02. Successor Governmental Authorities. I Wherever a specific governmental authority is identified in this Indenture of-Trust, such identification shall include any successor governmental authority, agency or body having substantially comparable responsibilities, j Section 9.03. Amendment or Repeal of Section 468A. Any reference in this Indenture of Trust to Section 468A of the Code shall be deemed to refer _not only to such section, as it may from time to time be amended, but also to any successor statutory provision. In the event that Section 468A of the Code,-ortits successo'r statutory provision, i s repealed, in whole or in part, and certain provisions of this Indenture of Trust cease to be required, such provisions shall thereupon be ineffective without the necessity of further amendment of this Indenture of Trust. i e,vw-

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o s 0. -m i F 4 Section 9.04. -Applicable Law.- ThisLIndenture,of Trust shall be_ governed.by an'd construed in accordance with-the laws ,o-L of'the State of Connecticut. Section 9.05. Unenforceable Provisions. Any provision 1of-this Indenture of ' Trust which is prohibited-or -is determined to j .. 1 - be unenforceable in any jurisdiction shall,-as to such jurisdiction, be ineffective to the extent of such prohibition 3 or unenforceability'without invalidating the remaining - provisions hereof,'and any such prohibition or.unenforceability b . in anyfjurisdiction shall not invalidate or render ~ unenforceable o ' such. provision in any other jurisdiction. i l 1 C L Section 9.06. Written Changes and Notices. No term or L p. provision of this Indenture of Trust may be changed,. waived, discharged or terminated, except by an instrument in writing L L signed by-the party or other person against whom enforcement of I; the change, waiver, discharge or termination is sought; and any waiver of the terms hereof shall be effective only in the f specific instance and for the specific purpose given. t Section 9.07. Countercarts. This Indenture of Trust may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but b all such counterparts shall together constitute but one and the 1 .same instrument. t-a

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of the terms of provisions hereof.

L 91 .y-IN WITNESS WHEREOF, the parties hereto have caused 'this-g-c Indenture of Trust to be duly executed by-their respective 1 authorized officers as of the date first above, written, n:. : CONNECTICUT YANKEE ATOMIC L' POWER COMPANY .n-l 3 Its(// ice President. & Treasurer .:n [.. THE CONNECTICUT BANK AND TRUS.T-4 COMPANY, NATIONAL ASSOCIATION r; -M. : t (- By w# 'i - Its VICE PRESIDENT (Michael Callahan) ,4 5

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l ) J. + [ COMPOSITE CONFORMED COPY) a POWER CONTRACT, dated as of July 1,1964, between CONNECT 1ctrr YANKEs AToute Powtx j - COMPANY (" Connecticut Yankee"), a Connecticut corporation, and ('Ihe names of the Purchasers appear ) in the attached Appendix) (the " Purchaser"). j It is agreed'as follows: i

1. Basic Understandlags Connecticut Yankee has been organized to provide for the supply of power to the twelve' utility companies (including the Purchaser) which are its stockholders. It has commenced the construction of a nuclear electric generating unit of the pressurized water type, which is being designed to have an

.)

Initial' gross capability of approximately 490 megawatts electric, at a site adjacent to the Connecticut.

' River at Haddam Neck, Connecticut (the unit being herein, together with the site and all related facilities, referred to as the." Unit"). Construction of the Unit is being carried out under contracts with Westing-house Electric Corporation and Stone & Webster Engineering Corporation. The Unit is to be operated to supply power to Connecticut Yankee's stockholders, each of which - is undertaking to purchase a fixed percentage of the capacity and output of the Unit. The respective percentages of the capacity and output of the Unit to be purchased by the Purchaser and the other Connecticut Yankee stockholders are the same as the respective-percentages of Connecticut Yankee's . stock now owned by them.' The names of the stockholders and their respective percentages (" entitle. 3 ment percentages") of the capacity and output of the Unit are as follows: Entitlement Stockholder Peressanse - The Connecticut Light and Power Company........... 25.0 % New England Power Company............................... 15.0 % e Boston Edison Company............................................ 9.5 % The Hartford Ecctric Light Company........... 9.5% The United Illmninating Company.... 9.5% Western Massachusetts Electric Company........ 9.5 % ~ Central Maine Power Company..... 6.0% Public Service Company of New Hampshire.. 5.0% Montaup Electric Company......................................... 4.5% New Bedford Gas and Edison Light Company *.. 2.5 % s Cambridge Electric Light Company *.. 2.0 % Central Vermont Public Service Corporation....... 2.0% i Connecticut Yankee and its other stockholders are entering into power contracts which are identical to this contract except for necessary changes in the names of the parties. New Bedford Gas and Edison Light Company has informed Connecticut Yankee that it proposes to transfer the Connecticut Yankee stock owned by it to Cambridge Electric Light Company. If this transfer is consummated, the Power Contract between Connecticut Yankee and New Bedford Gas and Edison Light Company will be cancelled and the contract between Connecticut Yankee and Cambridge Electric Light' Company will be amended to increase Cambridge Electric Light Company's entitlement percentage from 2.0% to 4.5 %.*

• As contemplated by Section I of the contract. New Bedford Gas and Edison Light Company has transferied the r

Connecticut Yankee stock owned by it to Cambridge Electric Light Company, the Power Contract between Connecticut , Yankee and New Bedford Gas and Edison Light Company has been cancelled, and the contract between Connecticut Yankee and Cambridge Electric Light Company has been amended to increase Cambridge Electric Light Company's entitlement percentage from 2.0% to 4.5%. As a result of the transfer by New Bedford Gas and Edison Light Company of the Connecticut Yankee stock owned by it to Cambridge Electric Light Company. the number of Connecticut Yankee's stockholders has been reduced from twelve to eleven. t

l-

2. Efoeshe Date sad Term if This contract shall become effective upon receipt by the Purchaser of notice.that Connecticut

-. Yankee has entered into power contracts, as contemplated by Section 1 above, with each of its other stockholders. The term of this contract shall expire 30 years after the plant completion date. - The " plant completion date" shall be the earlier of (1) October 1,1968, and (11) the 'date on which the Unit is placed in commercial operation,'as determined by Connecticut Yankee (the "com-1 j mercial operation date").

3. Constreetloa of the Unit Connecticut Yankee will proceed with due diligence with construction of the Unit, and will exercise its best efforts to complete and place it in commercial operation by October 1,1967, on the presently estimated schedule therefor and within present cost estunates, and will keep the Purchaser currently informed as to the progress of construction and expected plant completion date.

4. Operation and Maineessace of the Unit Connecticut Yankee will operate and maintain the Unit in accordance with good utility practice under the circumstances and all applicable law, including the applicable provisions of the. Atomic Energy Act of 1954 and of any license issued thereunder to Connecticut Yankee, Within the limits hnposed by good utility practice under the circumstances and applicable law, the Unit will be operated at its maximum capability and on a long hour use basis.

' Outages for inspection, maintenance, refueling and repairs and replacements will~be scheduled in accordance with good utility practice and insofar as practicable shall be mutually, agreed upon by Connecti-cut Yankee and the Purchaser. In the event of an outage, Connecticut Yankee will use its best efforts to restore the Unit to service as promptly as possible. f

5. Purchaser's Entidement The Purchaser will, throughout the term of this contract, be entitled and obilgated to take its entitle-ment percentage of the capacity and net electrical output of the Unit. at alllevels at which the Unit is operated or operable, whether more or less than.490 megawatts electric.

6. Delinries and Metering The Purchaser's entitlement percentage of the output of the Unit will be delivered to and accepted by it at the step up substation at the site. All deliveries, will be made in the form of 3-phase, 60 cycle, alternating current at a nominal voltage of 345,000 volts. The Purchaser will make its own arrangements for the transmission of the power.

Connecticut Yankee will supply and maintain all necessary metering equipment for determining the quantity and conditions of supply of deliveries under this contract, will make appropriate tests of such equipment in accordance with good utility practice and as reasonably requested by the Purchaser, . and will' maintain the accuracy of such equipment within reasonable limits. Connecticut Yankee will furnish the Purchaser with such summaries of meter readings as the Purchaser may reasonably request.

7. Payment With respect to each month commencing prior to the plant completion date, the Purchaser will pay Connecticut Yankee at the rate of 5 mills per kilowatt hour, for the Purchaser's entitlement per-I

.centage of the net electrical output (if any) of the Unit during the particular month. With respect to each month commencing on or after the plant completion date, the Purchaser will pay Connecticut Yankee an amount equal to the Purchaser's entitlement percentage of the sum of (a) Connecticut Yankee's total operating expenses for the month with respect to the Unit, plus (b) an amount equal to one-twelfth of 6% per annum of the net Unit investment as most recently determined in accordance with this Section 7. 2 ,vci

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3,,,,.gs g. _ w w -..v .. ~ -.~ ~ -.. - yy ( + Connecticut Yankee's " operating expenses" shall-loclude all amounts properly chargeable _ to - b u0 . operating axpense accounts, less any applicable credits thereto, in accordance with the Uniform System - 'l ~ of Accounts (the " Uniform System") prescribed by the Federal Power Commission for Class A and E Class B Public Utilities and Licensees as in effect on the date of this contract; provided, that, for

purposes of this contract, the accrual of depeeciation as an operadng expense shall commence on the plant completion date at the rate of 4% per annum, whether or not the Unit is then in operation, and.

during each of the first twenty-five years after the plant completion date the amount included in operat- !!ng expenses on' account of depreciation accruals (and amortization, if any,'of property' losses) shall ' in no event be less than 4% of the excess of: - (a) the_ amount properly chargeable _at the plant completion date in accordance withL the Uniform System to electric plant accounts (including construction work in progress) with respect. to the depreciable portion of the Unit (or, if the plant completion date is prior to the commercial operation date and the amount so chargeable with respect to the depreciable portion J the Unit on the commercial operation date is greater than it was on the plant completion date, then such greater amount), over (b) the amount of net available cash. Tbc " net Unit investment" shall consist, in each case with respect to the. Unit, of (1) the aggre. 4 gate amount properly chargeable at the time in accordance with the Uniform System to Connecticut , Yankee's electric plant accounts (including construction work in progress), less the balance, if any, at the time of the accumulated provision for depreciation, as determined in accordance with the Uniform-System; plus (11) the aggregate amount properly chargeable at the time in accordance with the Uniform x System to accounts representing materials and supplies; plus (111) such reasonable allowances for pre. paid items and cash working capital as may from time to time be determined by Connecticut Yankee. i.. However, for purposes of this contract, the net amount included at any date after the plant completion date in net Unit investment under clause (1) of the immediately preceding sentence shall in no event be less than the excess of; (a) the amount properly chargeable at the plant completion date in accordance with the Uniform System to electric plant accounts (including construction work in progress) with respect to the Unit (or, if the plant completion date is prior to the commercial operation date and the C amount so chargeable with respect to the Unit on the commercial operation date is greater than it was on the plant completion date, then such greater amount).. over (b) the sum of (1) the aggregate minimum amount required by the proviso to the third paragraph of this Section 7 to be included in operating expenses from the plant completion date to the date in question on account of depreciation accruals (and amortization, if any, of property losses), piar (2) the amount of net available cash. The net Unit investment shall be determined as of the plant completion date and thereafter as of the commencement of each calendar year, or, if Contecticut Yankee elects, at more frequent intervals, s " Net available cash" means, at any date as of which the amount thereof is to be determined, the excess of (a) the aggregate amount received by Connecticut Yankee after the plant completion date and prior to two years before the determination date as insurance proceeds on account of loss or damage to 6 . the Unit or as the proceeds of a sale or condemnation of a portion of the Unit, over (b) the aggregate amount expended after the plant completion date and prior to the determination date on account of rebuilding, repairs, reph. cements and additions to the Unit, provided that insurance proceeds received with respect to a particular loss shall be taken into account for purposes of the foregoing computation only if the amount received with respect to the loss exceeds $150,000, m Connecticut Yankee will bill the Purchaser, as soon as practicable after the end of each month, for all amounts payable by the Purchaser with respect to the particular month. Such bills will be 3

4 c -l sedered in roch detail as the Purchaser may reasonably request and may be rendered on an estimated basis' subject to corrective adjustments in. subsequent billing periods. l All bills shall be paid in_ full !, ~ within 10 days after receipt thereof by the Purchaser. j

8. Make up Terms med Option Tens-(a)' De Purchaser may elect to extend the contract term by written notice to Connecticut Yankee -

. upon the following conditions and for the following period or periods:' ? (1). % Se event that the Unit is not in commercial operation on the plant completion date, the conWtw may be extended for a period equal to the number of consecutive days by whichu conur:#' omation is delayed beyond the plant completion date; and s if at. w 1 after the commencement of commerdal operation no deliveries are made - under tes ccaw~ m a period of at least 120 consecutive days, the contract may be extended ~ for a Nhd.qc/ to the aggregate of such periods during which no deliveries were made. If the teth rh. contract is extended pursuant to the provisions of this subsection (a), all of the' ' contract provisbos shall remain in efect for the extended term. I (b) Upon expiration of the initial term of this contract or upon expiration of the term as-extended in accordance with subsection (a) of this Section 8, the Purchaser shall continue to be ' l ~ e j entitled, at its option, to its entitlement percentage of the capacity and output of the Unit upon terms - l at least as favorable as those obtained by any other person.

9.. CaneeRation of Castreet u

. If deliveries cannot be made to the Purchaser because either (i) the Unit is. damaged to the extent of being completely or substantially completely destroyed, or I (11)~ the Unit is taken by exercise of the right of eminent domain or a similar right or power, or (iii) (a) the Unit cannot be used because of contamination, or because a necessary license - or other necessary public authorization cannot be cWined or is revoked, or because the utiliza. tion of such a license or authorization is made sut n 'to specified conditions which are not met, and (b) the situation cannot be rectified to an extent which will permit Connecticut Yankee s make deliveries to the Purchaser from the Unit; then and in any such case,'the Purchaser may cancel this contract. Such cancellation shall be efected i by written notice given by the Purchaser to Connecticut Yankee. In the event of such cancellation, all continuing obligations of the parties, including the Purchaser's obligations to continue payments, l: 'shall cease forthwith. Any dispute as to the Purchaser's right to cancel this contract pursuant to the j foregoing provisions shall be referred to arbitration in accordance with the provisions of Section 13. . Notwithstanding anything in this contract elsewhere contained, the Purchaser may cancel this~ contract or be relieved of its obligations to make payments hereunder only as provided in the next preceding paragraph of this Section 9. Further, if for reasons beyond Connecticut Yankee's reasonable control, deliveries are not made as contemplated by this contract, Connecticut Yankee shall have no p( liability to the Purchaser on account of such non. delivery. .10. Issorsees Prior to the first shipment of fuel to the plant site, Connecticut Yankee will obtain, and thereafter will at all times maintain, insurance to cover its "public liability" for personal injury and property damage resulting from a " nuclear incident" (as those terms are defined in the Atomic Energy Act of 1954, as amended), with limits not less than Connecticut Yankee may be required to maintain to qualify for governmental indemnity uder said Act and shall execute and maintain an indemnifica-4

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. ~z.m p. '. ;. :. h... * .. ~.... l M 2. A ~ '. -. L.. ..:.t. : a. q 1 . tion agreement with the Atomic Energy Commission as provided by said Act. Connecticut Yankee will also at all times maintain such other types of liability insurance,' including workmen's compensadon lasurance, in such amounts, as is customary a the case of other similar electric utility companies, or - as may be required by law. Connecticut Yankee will at all times keep insured such portions of the Unit as are of a usa usually insured by electric utility companies, similuly situated and operating like properties, against the . risk of a " nuclear incident", and such other risks as electric utility companies, similarly situated and operating like properties, usually insure against. Such insurance shall to the cztent available be. t carried in an amount at least equal to the original cost of the insured facilities, less accrued depreciadon thereon.

11. AdditionalUnks Connecticut' Yankee or its nominee may install one or more additional generating units at the Haddam Neck site. The installation of such unit or units shall not aHect the terms of this contract,

'but in such case, if and to the extent appropriate, if any portion of the Unit (whether such portion constitutes land, structures or equipment) is also used with the additional unit (s), an appropriate allocation of the cost of the Unit shall be made and the net Unit investment shall be reduced accord. ingly, subject, however, to the limitation that the aggregate amount of the reduction in not Unit investment l-resulting from all such allocations shall not escoed $2,000,000. l ?

12. Andit l

Connecticut Yankec's books and records (including metering records) shall Ne open to reasonable inspection and audit by the Purchaser, t l l

13. Arbitration l.(

In case any dispute shall arise as to the interpretatloa or performance of this contract which ) cannot be settled by mutual agreement, such dispute shall be submitted to arbitration. The parties shall if possible agree upon a single arbitrator. In case of failure to agree upon an arbitrator within ' 15 days after the delivery by either party to the other of a written notice requesting arbitration, either party may request the American Arbitration Association to appoint the. arbitrator. The arbitrator, after opportunity for each of the parties to be heard, shall consider and decide the dispute -and notify the parties in writing of his decision. Such decision shall be binding upon the parties, and l_ the expenses of the arbitration shall be borne equally by them.

14. Regulados

' Ibis contract, and all rights, obligations and performance of the parties hereunder, are subject to all applicable state and federal law and to all duly promulgated orders and other duly authorized action of governmental authority having jurisdiction in the premises.

15. Assignment This contract shall be binding upon and shall inure to the benefit of, and may be performed by, the successors and assigns of the parties, except that no assignment, pledge or other transfer of this contract l.

by either party shall operate to release the assignor, pledgor or transferor of any of its obligations under I this contract unless consent to the release is given in writing by the 'other party, or, if the other party has theretofore assigned, pledged or otherwise transferred its interest in this contract, by the other party's assignee, pledgee or transferee. I l<

16. Right of Setof

( The Purchaser shall not be entitled to set off against the payments required to be made by it L under this contract (1) any amounts owed to it by Connecticut Yankee or (ii) the amount of any claim by it against Connecticut Yankee. However, the forrgoing shall not afect in any other way the Purchaser's rights and remedies with respect to any such amounts owed to it by Connecticut Yankee or any such claim by It against Connecticut Yankee. 5

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17. Intaryseisens The laterpretadon and performance of this contract shall be in accordance with and controlled

(* . by the law of the State of Connecticut. -

18. Addresses Except as the parties may otherwise agros, any notice, request, bill or other communicatha from one party to the other, relating to this corvact, or the rights, obligations or performance of the parties hereunder, shall be in writing and shall be eSective upon delivery to the other party. Any st,ch com.

munication shall be considered as duly delivered when mailed to the respective post oSce address of the other party shown following the signatures of such other party hereto, or such other post osce address as may be designated by writtan nodos siven as provided in this Section 18.

19. Corporate Obilgadens This contract is the corporate act and obligation of the parties hereto, and auf claim hereunder against any stockholder, director or othcer of el*ber party, as such, is expressly walred.

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30. AB Prior Agreements f;;lf This coetract represents the entire agreement between us relating to the sobject matter bereof, and all

[ previous agreements, dbeassions, communications and correspondence with respect to the subjoet matter i are hereby supe sehd and are of no further force and efect.

i,

lx Wnxtst.Wmmor, the parties have executed this contact by tholt respective oScers threunto duly autaodsed as of the date first above written. CONNECTICUT YANEtz Atomic Powen COMPANY ( Attest: By........................................................................ e 1ts.................................................................. P. O. Box 2010 Hartford, Connecticut 06101 (Purchaser) Attestt i sy............................................................... (Of5cer) Its................................................................. (Title) (Address) (Forms of signatures appear in the attached Appendix) 6 .. ~ -......

p; 3 APPENDIX j s Separate Power Contracts were entered into, identical Ja form with the foregoing except as to'the { '

• eascution thereof and'except that on page 1 the names of the respective Purchasers were inserted.

The Power Contracts were executed by the respective parties thereto, under their corporate seals,. as follows. CONNECTICUT YANKEE ATOMIC POWER C$MPANY ' f l.' - Atsest: By S. R. KNAPP L F. hoast Its President i Secretary P. O. Box 2010 (CORPORATE SEAL) Hartford. Connecticut 06101 L THE CONNECTICUT LIGHT AND POWER COMPANT i Attest: e l By PAUL V, HAYDEN j C. J. RAMAGE ' Its President I l Assistant Serretny P. O. Box 2010 (CORrORATE Sr.AL) Hartford, Connecticut 06101 i E NEw ENGLAND POWER COM!'ANY L ( Attest: By ROsERT F. KP.AUst JOSEPH X. CoRnETT Its President Clerk 441 Stuart Street t (CORPORATE SEAL) B0ston, Massachusetts 02116 e BOSTON EDrsON COMPANY l Attest: By CnARLEs F. AVILA g l

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Its Pasident Clerk i. 1 l. .' (CORPORATE SEAL) Boston, Massachusetts 02112 l 182 Tremont Street THE HARTFORD Et.ECTRIC LIGHT COMPANY Attest: By R. A. OtasON ,I' I' '0** Its Chairman Scentary P. O. Box 2370 (CORPORATE SEAL) Hartford, Connecticut 06101 1 %es i~eem ys. np.p s m.t sa.w. - ~..u * * -*. + e .~~.' ~ * + ~ ~ = ~ * ' ~ - - - < . M

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4 m i 1 Tut UNrTED ILLUMINATING COMPANY' j Attest:' ( By WILuAu J. CooPsk j A. RoTAL Wooo. lu hht Soorstary 80 Temple Street (CoRPonATE SEAL) New Haven, Connecticut - 0650'6 WESTERN MASEACHUBETTs ELECTRIC COMPANY i Atteet: By-HoWARD J. CADWEt.L N. F. PLAN Its Chainnan of the Board 174 Brush Hill Avenue (CORPORATE SEAL) West Spring 6 eld, Manachusetts 01089 i CmTRAL MMNE POWER COMPANY sy W. H. DuxnAw O #' IO"*" Its President I Assistant Secretary 9 Green Street (CORPORATE SEAL) Augusta, Maine 04332 ( Pusuc SamvicE COMPANY oF NEw HAMPSHIRE + Attest: By A. R. ScurLLER ANARELLE LANDER $ p Secretary 1087 Elm Street (CORPORATE SEAL) Manchesur, New Hampshire 03105 MoNTAUP ELECTRIC COMPANY Attest: By Gurno R. PERERA R.M.h its Prealdent Clerk 49 Federal Sreet (CORPORATE SEAL) Boston, Massachusetts 02107 i NEW BEDPoRD OAs AND EntsoN LIGHT COMPANY' f Attest: By JonN F. Rics R. E. rolls i y, Clerk 130 Austin Street (CORPORATE SEAL) Cambridge, Massachusett 02139 4

• The contract between Connecticut Yankee and New Bedford Gas and Edison Llsht Company has been cancelled.

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~ w.. e.....,.. w,.. w s.. - ..a .m .,e m. w ..,. 7 =.. '3; y i u-y, s i 's .1'. 1 ', CAusaspos ELucraic LJout CouPAxy - Attest t 1 l By JostN F. Rxu e c, R. E. rolls h 4 3ts President p Ostk 130 Austin Street l ' (ConroRATE $EAL) Cgg.jpridge, Massachusetts 02139-1 l Cax7 art, VERMONT PURI.!C $ERVICE CORPORATION l Attest: .i 4, By ALstaf A. Cart >r Poarra E. Nost.: its Chairman Oerk p., 77 Grove Street. l 1 a. o,- - (ContoRATE SEAL) Rutland, Vermont 03701 1 3 8 i i p L .'#5 a .,y 4 l n v i h, I h a

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i i i 1 l l ADDITIONAL POWER CONTRACT ADDITIONAL POWER CONTRACT, dated as of April 30, 1984, l between CONNECTICUT YANKEE ATOMIC POWER COMPANY (" Connecticut Yankee"), a Connecticut corporation, and The Connecticut Light 4 ~ and' Power company, (the'"Purchasor"). t In consideration 'f the following understandings and the o - 1 respective undertakings of the parties, it is agreed as follows:. e ' 1. Basic Understandinen. Connecticut Yankee was organized in 1962 to provios for the . supply of power to its' sponsoring utility companies (including the Purchaser). Connecticut Yankee constructed a nuclea'r ^ a electric generating unit of the pressurized water type, having a l maximum not capability of approximately 582 megawatts electric, f at a site adjacent to the Connecticut River at Haddam, ~ Connecticut (said unit, together.with the site and all related i facilities owned or to be owned by Connecticut Yankee, being referred to herein as the " Unit"). On June 30, 1967, Connecticut Yankee was issued' a full-term, operating license for t

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E i- . i 1 l' 1 y' i the Unit from the Atomic Energy Commission (now the Nuclear Regulatory Commission which, together with any successor agency i or agencies, is hereafter. called the "NRC"), which lice'nse. expires on May 26, 2004, and the Unit commenced commercial-operation on January 1, 1968.

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j The Unit is operated to supply power to the purchasers from ~ J Connecticut Y4nkee (collectively the " Purchasers"),' each of which by a Powcr Contract dated as of July 1, 1964, as supplemented by Supplementary Power Contracts dated as of March j 1, 1978, such Supplementary Power Contracts Amended on August 22, 1980 and October ?.5, 1982 (collectively the " Power Contracts"), has undertaken to purchase a, fixed percentage of the capacity and output of the Univ. for a term extending thrhugh l December.31, 1997. The names of the Purchasers and their respe'etive percentages (" entitlement percentages") of the + capacity and output of the. Unit are as follows: Entitlement Percentage The Connecticut Light and Power company.... 34.5% .New England Power Company.................. 15.0 Western Massachusetts' Electric Company..... 9.5 y The United Illuminating Company............ 9.5 Boston Edison Company...................... 9.5 Central Maine Power Company................ 6.0 Public Service Company of New Hampshire;... 5.0 Montaup Electric Company.......-............ 4.5 Cambridge Electric Light Company........... 4.5 Central Vermont Public Service Corporation. 2.0 i s

w u A \\ , l t' f' The Power Contracts have been supplemented most recantly by Second supplementary Power Contracts, dated as of 1984, between Connecticut Yankee and each of the Purchasers (the "Second Supplementary Power Contracts"). The Second Supplementary Power Contracts provide for the collection of .c .,~ funds to defray the ultimate cost of decommissioning the Unit and to provide an allowance for potentia),' taxes payable by ] Connecticut Yankee with respect to the decommissioning fund. l Connecticut Yankee and the Purchasers desire to provide for the orderly continuktion of the cale and purchase of ths i 4 o capacity and c,utput of the Unit curing the useful life of the j Unit to the extent thht such useful life continues beyond the \\; termination date of the Power Contracts and the Second

• Supplementary Power Contracts and to provide appropriate provisions for the col.ection of funds for, and the payment of, decommissioning costs and any ether costs, including potential taxes, with respect to the Unti during and after the useful life L

of the Unit. Connecticut Yankee and the other Purchasers are entering into Additional Power Contracts which are identical to this contract except for necessary changes in the names of the l. par,es. I ( {- ~.

k i 4 ( 2. Effective Date, Term and Waiver. l 6 This contract shall become effective upon receipt by the i , Purchaser of notice that connecticut Yankee has entered into Additional Power Contracts, as contemplated by~Section 1 above, with each of the other Purchasers. The operative term of this ~ contract shall commence on January 1, 1998 notwiths'tanding the f act that the useful se'rvice life of the Unit may have been terminated prior to that date, and shall terminate upon the [ later to occur of (1) 30 days af ter the date on which the last t ' cf the financial obligations of Connecticut Yankee which I constitute elements of the payment calculated pursuant to Section 7 of.this contract has been extinguished by Connecticut t I , Yankes, or (ii) 30 days after the date on which Cor4necticut Yankee is finally relieved of any obli.gations under the last of any licensen (operating and/or possessory) which it now holds from, or which may hereafter be issued to.it by, the NRC with respect to the Unit under applicable provisions.of the Atomic r Energy Act of 1954, as amended from time to time (t.he "Act"). Connecticut Yankee and the Purchaser acknowledge that, if the useful service life of the Unit is terminated prior to January 1, 1998, then only the provisions of this contract applicable te decommissioning of the Unit will apply during the operative term of this' contract. ( h ---w n

3.-- ..i 5-l {' The Purchaser hereby irrevocably waives its right to extend [ the-contract term of its Power Contract pursuant to subsections i .(a) or (b) of Section 8 thereof. i 5 Operation and Maintenance of the Unit. t 3. Connecticut Yankee will operate and maintain the Unit in .accordance with good utility practice under the circumstances and all applicable law, including the applicable provisions of the Act and of any l'icenses issued thereunder to. Cont.ecticut Within the limits imposed by good utili.y practice t Yankee. under the circumstances End applicable law, the Unit will be operated at its maximum capability and on a long hour use 1 basis. t refueling and repairs Outages for inspection, maintenance, and replacements will be scheduled in accordance with good utility practice and insof ar as practicable shall be mutually In the agreed upon by Connecticut Yankee and the Purchaser. event of an outage, Connecticut Yankee will use its best efforts to restore the Unit to service as promptly as practicable. 4. Decommissioning. dfter commercial operation of the Unit permanently ceases, Connecticut Yankee will decommission the Unit in a manner i ...,y ,e, -.,,.e-

A F. k,- r '- . authorized by Connecticut Yankee's board of directors and approved by the NRC'in accordance with the Act and the rules and regulations thereunder then in effect and by any agency having jurisdiction over decommissioning of the Unit. It is understood that, pursuant to the Second Supplementary Power Contracts, ite Purchasers are currently being billed for Total Decommissioning Costs which, as of the date of this. a'e being accumulated in n' separate fund which was

contract, r

' established for.the purpose of reimburning Connecticut Yankee for Decommismioning Er.penses incurred in the process of i-decommissioning the Unit and that s$ch billings are subject to change in accordance with the proviadons of the Second (' - Supp'lamentary Power Contracts, sub'ect to the jurisdiction of the Federal Energy Regulatory Coumission or any successo'.' agency . thereto (the "FERC"). It is coatemplated that sufficient funds-will be accumulated pursuant to those contracts and paragraph 7 - hereof to make payment to reimburse Connecticut Yankee for the ? full cost of decommissioning the Unit. 5.. Purchaser's Entitlement. be l The Purchaser will, throughout the term of this contract, entitled and obligated to take its entitlement percentage of the capacity and net electricai output of the Unit, at whatever i

k' A., u - l i L' HL level the Unit is operated or operable, whether more or less than 582 megawatts electric. L I 6. Deliveries and Metering. The Purchaser's entitlement percentage of the output of the at the ' Unit.will be delivered to and accepted by the Purchaser All deliveries wi1* be made in_ L-?, step-up substation at.the site. the form of 3-phase, 60 cycle, alternating current at a nominal b l' The Purchaser will make its own voltage of 345,000' volts. arrangements for the transmission of its entitlement percentage. L, l of the output of the Unit. 4 L.(.. connecticut Yankee will supply and maintain all necessary i metering equipmsnt for determining the quantity and conditions will make of supply of deliveries under this contract, t appropriate tests of such equipment in accordance with good a . utility practice and as reasonably requested by the Purchaser,

and will maintain the accuracy of such equipment within Connecticut Yankee will furnish the reasonable limits.

i . Purchaser with such summaries of meter readings as the Purchaser may reasonably request. I p l L

8-l\\ 7. P_ayment. With respect to each month commencing on or after January 1, 1998, the Purchaser will pay Connecticut Yankee an amount equal to the Purchaser's' entitlement percentage of the sum of (a) the Total Decommissioning Costs for the month with respect to the Unit, plus (b) Connecticut Yankee's total operating expenses for i the month with respect to the Unit, plus (c) an amount' equal to i one-twelfth of'the composite percentage for such month of the net Unit investment as most recently determined in accordance with this Section 7. I " Composite percentage" shall be computed as of the last day l j of each month during'the term hereol (the " computation date") and for any month the composite percentage shall be that " Composite computed as of.the last day of the previous month. p percentage" as.of a computation date shall be the sum of (1) the equity percentage as of such date multiplied by the ratio which as of such date, f the equity investment with respect to the Unit, is to the total capital as of such date; plus (ii) the " effective interest rate" per annum of each principal. amount of long-term debt outstanding on such date for money borrowed with multiplied by the ratio which such ~ f respect to the Unit, principal amount is to total capital as of such date; plus (iii) the " effective dividend rate" per annum of'each series'of to the . preferred stock outstanding as of such date with respect Unit multiplied by the ratio which the amount at which such ~ <--

w _ la; l ( preferred stock would be reflected on a balance sheet of j Connacticut Yankee is to total. capital as of such date., The " effective interest rate" of each principal amount of long-term i debt referred t'o in clause'(ii) will reflect the annual interest requirements and to the extent applicable, amortization of issue i expenses, discounts and premiums, sinking fund call premiums, j expenses'and discounts, refunding and retirement expenses, discounts and premiums, and all other expenses applicable to the l-issue of such indebtedness. The " effective dividend rate" of each series of preferred ) stock referred to in clause (iii) v111 reflect the annual I dividend requirements applicable to each such series of I ^ preferred stock. l " Equity percentage" as of any date. af ter commencemer.t of the l operative term hereof shall be that percentage which was the " equity percentage" applicable under the Power Contracts on the t L last day of the term. of the ' Power Contracts or such other percentage as may from time to time thereafter be approved by -the FERC or any success 4r regulatory authority. ". Equity investment" as of any date shall consist of the sum of (i) all amounts theretofore paid to Connecticut Yankee for all common capital stock theretofore issued, plus all amounts .me ,--4

.. t. 10-I paid to' Connecticut Yankee by any of its common stockholders as less the sum of any amounts s capital contributions or advances, l paid by Connecticut Yankee to its common stockholders in the return of l form of stock retirements, repurchases or redamptions, capital or repayments of such contributions or advances; plus (ii) any, credit balance in the capital surplus account not included under-(i) and in the retained earnings account on the books of Connecticut Yankee as of such date. " Total capital" as of any date shall be the equity inve.stment with respect to the Unit, plus the total of the amour.t which would 'be reflected on a balance sheet of Connecticut Yankee for all och'er securities (excluding short-term debt), including long-tein debt and preferred. stock then i I outstanding with respect to the Unit. " Uniform System" shall mean the Uniform System of Accounts prescribed by the FERC for Class A and Class B Public Utilities and Licensees, as from time to time in effect. l Connecticut Yankee's " operating expenses" shall include all amounts properly chargeable to operating expense accounts, less any applicable credits thereto, in accordance.with the Uniform System; however, excluding for purposes of this contract Total Decommissioning Costs. e w---- ,s.n ..a

0. N , i i l l 'b l. I " net Unit investment" shall consist, in each case with respect to the Onit, of (i) the aggregate amount properly chargeable at the time in accordance with the Uniform System to Connecticut Yankee's electric plant accounts (including i construction work in progress.to the extent allowed by the FERC) less the balance, if any, a't the time of the accumulated provision for depreciation, as determined in accordance with.the l Uniform System (excluding any amounts specifically allowed by l the FERC to be so excluded); plus (ii) the aggregate amount properly chargeable at the time in accordance with the Uniform System to accounts representing materials and supplies; plus (iii) such reasonable allowances for prepaid items and cash ( working capital as may from time to time he determ'ined by L Connecticut Yankee. and, for purposes. hereof, not Unit investment shall in.:lude, in addition to all other amounts which l may be includable.therein under this section, but without duplication, the aggregate amount properly chargeable at.the time in accordance with the Uniform System to. Connecticut Yankee's nuclear fuel accounts (other than nuclear fuel in L I process of fabric'ation), less.the balance at the time of the accumulated provision for amortization of the cost of nuclear I L fuel (excluding any amounts specifically permitted by the FERC), The all.as determined in accordance with the Uniform System. net Unit investment shall be determined as of the commencement i r m. -,____w-~--..

G ',( if Cont.ecticut Yankee niects, at more of each calendar year, or, frequent intervals. " Total Decommissioning Costs" for any month shall mean the sum of (x) an amount equal to all accruals in such month to any reserve, as from time to time established by Connecticut Yankee and approved by its board of directors,' to provide for the ultimate payment of the Decommissioning Expenses of the Unit It is plus (y). Decommissioning Tax Liability for such month. . understood (1) that such funds may be held by Connecticut Yankee as determined ' or by an independent trust or other separate fund, by said board of directors, (ii) that, upon compliance with Section'17 hereof,N the amounti; custody and/or' timing of such g accrur>1s may from' time to r.ime during the term hereof be . modified by said borird of d) rectors in its discretion or.to comply with applicable statutory or regulatory, requirements or to reflect changes in the amount, custody or timing of anticipated Decommissioning Expenses, and (iii) that the use of the term "to decommission" herein encompasses compliance with ~ all requirements (other than those relating to spent nuclear [ fuel) of the NRC for permanent cessation of operation of a nuclear facility and any oth,r activities reasonably related l e thereto. I I d

),. l.f Y t ~13-b i " Decommissioning Expenses" shall includes t i (1) All costs and expenses of removing the. Unit from service,' including without limitation, dismantling, mothballing, removing radioactive material (excluding spent nuclear'f'uell to temporary and/or permanent storage sites, t decon'taminating, restoring and. supervising the L site, and a.ny costs and expenses incurred in 4 connection with proceedings before governmental authorities relating to any authorization to ' t i decommission the Unit or remove the Unit from l-H i' service: .4, L (2) All costs of labor and services, whether directly or indirectly incurred, including without limitation, services of foremen, inspectors, r supervisors, surveyors, engineers, security ~ personnel, counsel and accountants, performed or L rendered in. connection with the decommissioning of the Unit and the.r5moval of the Unit from service, and all costs of materials; supplies,. machinery, construction equipment and apparatus acquired or used~(including rental charges for machinery, equip' ment or apparatus hired) for or in connection with the decommissioning of the Unit and the O ,-v---- p w e ~ v

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g' W ~.',<, 34 3_ l ( removal of the Unit from service, and all administrative costs, including services of counsel and financial advisers, of any applicable independent trust or other separate fund; it being understood ~that any amount, exclusive of proceeds , realized by connecticut'iankee as of insurance, salvage on any machinery, construction equipment and apparatus, the cost of which was charged to Decommissioning Expense, shall be treated as a reduction' of the amounts otherwise chargeable on ( account of the costs of decommissioning of the Units and 4 All overhead. costs applicable to the Unit during (3) its decommissioning period, inclading, without limitin's the generality of the focagoing, taxes (other than taxes on or in respect of income), charges, licenses, excises and assessments, casualti.es, surety bond premiums ar.d insurance premiums. " Decommissioning Tax Liability" for any month shall be an t amount established by Connecticut Yankee and approved by its board of directors to meet possible income tax obligations, which amount shall not exceedi the amount to be included in the I

. c..,. s, . j' k> clause (x). portion of Total Decommissioning Costs for such month' multiplied by.a fraction whose numerator is equal to the combined highest applicable statutory Federal and state marginal income tax rate and-whos9 denominator is, equal to one minus the combined highest statutory Federal and state marginal' income tax rate. Without limiting the generality of the foregoing, any oth'er* amounts expended or to be paid with respect to decommissioning of the Unit or removal of the Unit from service shall constitute part of the Decommissioning Expenses if they are, or when paid V wili be, either (i) properly chargeable to any account related to' decommissioning of a nuclear generating unit in accordance ( with the Uniform System or generally accepted accountirig principles as'then in effect, or (ii),' properly chargeable'to decommissioning of a nuclear generating unit in accordance with then applicable segulations of the NRC or the.FERC or any other regulatory agency having jurisdiction. 8. Billing'. Co,nnecticut Yankee will bill the Purchaser, as soon as practicable after the end of each month, for all amounts payable by the Purchaser'with respect to the particular month pursuant to Section 7 hereof. Such bills will be rendered in such detail i t 1 5

D.- ?; i - 1 I as the Purchaser may reasonably request and may be rendered on J an estimated basis subject to corrective adjustments in subsequent billing periods. All bills shall be due and pa1able l when rendered and any amount remaining unpaid 15 days following the date of recei'pt of bills shall bear interest at an annual rate equal to 2%'in excess of the current prime rate then in effect at The Connecticut Bank and Trust Compeny, National Association, from the due date..to the date payment is received by Connecticut Yankee. 9. Decommissioning Fund. 4 Connecticut Yankee agrees to cause an appropriate i decommissioning reserve to be maintained in accordance with applicable regulatory requirements. Connecticut' Yankee has established an independent trust or o'ther separate fund (the "Cennecticut Yankee Tru.st") which has the necessary powers to hold and invest all funds collected for the decommissioning of the Unit and to disburse the same to reimburse Connecticut Yankee for such costs whon actually incurred for decommissioning of the Unit or removal of the Unit from service. If during the term of the Connecticut Yankee Trust applicable legislation or regulations are, promulgated which so permit or require, or an alternative entity is created for funding decommissioning of the Unit, the Connecticut Yankee Trust has the authority, with the 4 c -~+,s,,.e4 + .we. .o e ,r ,,v.3 w a w .,=e _ m, x ,*...--w w -a...~-,

'19,.;, 46, 0 x i+, f" o w, concurrence of Connecticut Yankee, to transfer its trust estate y' to such newly authorized entity for the purpose of providing for o the ' decommissioning of the Unit or removal of the Unit from L service. !E 7o Connecticut Yankee agree~1E p'a'y to, or cause to be paid to, s m the Connecticut Yankee Trust or any successor trust approved by

f the board of directors of Connecticut Yankee all funds collected 4

.l.. hereunder for the express purpose of decommissioning'the Unit or removing the Unit from service and further agrees that, after the tax consequences of decommissioning collections have been resolved, any funds collected hereunder to meet Decommissioning Tar. Liability which are' not used - for that purpose will be / \\ refunded to' the Purchaser. L 10. Cancellation of Contract. I If deliveries uannot be made to the Purchaser because either y I (i) the Unit is damaged to the extent of being l i' completely or substantially completely destroyed, or i l L the Unit is taken by exercise of the right of L (ii) h L eminent domain or a similar right or power, or l l - t j e e w w - ag wo a. --e-- 5 -e "=+v-'s e --e -'-a e "e---a M

L , -,J. ] 18-j I ( (iii) (a) the Unit cannot be used because of contamination, or because a necessary license or other necessary public authorization cannot be obtained or As i revoked, or because the utilization of'such a license or ~ authorization is made subject to specified conditions which are not met, and (b) the situation"cannot be rectified to an I extent'which will permit' Connecticut Yankee to make deliveries to the Purchaser.from the Units. f ( t then and in any such case, the Purchaser may cancel the provisions of this contract, except tha't in all cases other than i those described in clause (ii) above, the provisiens relating to the payment of Total Decommissioning Costs shall, whether or not [ the Unit is operated or operable and notwithstanding any earlier termination of.the service life of the Un.tt, remain in full force and effect until'the expiration of the term hereof, it being recognized that such costs represent deferred payments in connection with power theretofore deli.ered by Connecticut v Yankee hereunder. Such cancellation shal1 be affected by written notice given by the Purchaser to Connecticut Yankee. In the event of such cancellation, all continuing obligations of j k the parties hereunder as to subsequently incurred cests of Connecticut Yankee other than the obligations relating to the . payment and application of Total Decommissioning Costs excluded from such cancellation by the second preceding sentence, but + i

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[ -19 ( l including the Purchaser's obligations to continue payments pursuant to clauses (b) and (c) of the first paragraph of Section 7 hereof, shall cease forthwith. Notwithstanding the foregoing, the applicable provisions'of this contract shall . continue in effect after the cancellation hereof to the extent necessary to permit final billings and adjustments hereunder with respect to obligations incurred through the date of cancellation and the collection thereof. Any dispute as to the Purchaser's right to cancel this contract pursuant to the foregoing provisions shall be referred to arbitration in 4 accordance with the provisions of Section 13. Notwithstanding anything in this contract elsewhere _( contained, the Purchaser may cancel this contract.or be relieved oi' its obligations to make payments hereunder only sa provided in th's next preceding paragraph of this Section 10. Further, if for re.asons beyond Connecticut Yankee's reasonable control, deliveries are not made as contemplated by this contract, Connecticut Yankee shall have no liability to the Purchaser on account of such non-delivery. .11. J_nsuranc e. Connecticut Yankee presently has in effect, 'and hereafter - will at all' times maintain until the expiration of the term - i 9

• /.

I ', ~20-i J l hereof, insurance to cover its "public' liability" for personal injury and property damage resulting from a " nuclear incident" (as those terms are defined in the Act), with limits not less than Connecticut Yankee may be required to maintain to qualify for governmental' indemnity under the Act and shall maintain an indemnification agreement with the NRC as provided~bi the Act. Connecticut Yankee will al'so at all, time maintain such other types of liability insurance,' including workmen'.s compensation i in such amounts, as is customary in the case of other insurance, I similar electric utility companies, o'r as may be required by law. . Connecticut Yankee will at all times keep insured such portions of the Unit as are of a character usually insured by electric utility companies simi.'.arly situated and operating like ' properties, against the risk of a " nuclear incident" and such other risks as electric utility companies, similarly situated ~ and such and operating like properties, usually insure against; insurance shall to the extent availablo be carried in amounts sufficient to prevent Connecticut Yankee from becoming a co-Such insurance shall to the exteht available be insurer. carried in an amount at least equal to the original cost of the insured facilities, less accrued depreciation thereon. ~ , _ _... ~,.

^ ^ ~ ~ ' 1 't j .i i 1 t F 12. Audit.- i 6 Connecticut Yankee's books and records (including metering 1 records) shall be open to reasonable inspection and audit by the t I Purchaser. + t 4. r, m 1

13. -Arbitration.

'In case any dispute shall arise as to the interpretation or l performance of this contract which cannot be settled by mutual b! agreement, such dispute shall be submitted to arbitration. The In parties chall if possible agree upon a single arbitrator. case of failure to agree upon an arbitrator ~within 15 days after the delivery by either party to the other of a written notice requesting a'rbitrati'on, either party may request the American Arbitration Association to appoint the arbitrator.- The arbitrator, after opportunity for each of-the parties to be heard, shall consider and decide the dispute and notify the k i par. ties in writing of his decision. Such decision shall be p i binding upon the parties, and the expenses of the arbitration shall be borne equally by them. i 14'. Regulation, o 4 l.. j This contract, and all rights, obligations and performance i of the parties hereunder, are subject to all applicable state L / o w w we --6 we-+, a*esi-g w p e-9-e e p 3 h,-e' er e ,w ,-6-@ meg'c*--ew ena-,p+* $9N--

i b a., t s . ) L: 1 ) 1 - 1 and Federal-law and to all' duly promulgated orders and other duly authorized action of governmental authorities having i \\ ^ jurisdiction. I 15. Assignment. 1 ! +. This contract shall. be binding upon and shall inure to the benefit of, and may be performed by, the successors and assigns, of the parties, except'that no assignment,. pledge or other i transfer..of this contract by either party shall opcrate to release the assignor, pledgor or transferor from any of its obligations under this contract unless consent to.the release is o given'in writing by the other party, or, if the other party has \\ l theretofore assigned, pledged or otherwise transferred its l i interest in this contract, by the other party's assignee, pledgee or transferee, or unless such transfer is 1,1cident to a merger or consolidation with, or transfer of all or I substantially all of the assets of the.transferor to, another l Purchaser which shall, as a part of such succa'ssion, assume all, l [ 1 .the obligations of the transferor under this contract. i 16$ Right of Setoff. The Purchaser shall not be entitled to set off against the payments required to be made by it under this contract ~(1) any 4 4 6 6 - _. _ _ _. _ _ - - -^_ 4 4= $ e 3-, q e,

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i %, o "a p ? r " L o t: amounts owed to it by Connecticut Yankee'or (ii) the amount of any claim by it against, Connecticut Yankee. However, the-p I foregoing shall not affect in any other way the Purchaser s right and remedies with respect to any such amounts owed to it by connecticut Yankee or any such claim by it against Connecticut Yankee. 17. Amendments. l Upon authorization by Connecticut Yankee's board of directors of uniform amendments to all the Additional. Power Contracts, Connecticut ' Yankee shall have the right to amend the provisions of Section 7 hereof by serving an appropriate o statement of uuch amendment upon the Purchaser and filing the l . same with the TERC (or -such other regulatory agency as may have 1 jurisdiction in'the premises) in accordance with the provisions of a;p).1 cable laws and any rules and regulatione thereunder, and tha amendment shall thereupon become effective on the date specified therein, subject to ary cu> pension order issued by such kgency. All cther amendments to this contract shall be by mutual. agreement, evidenced by a written amendment signed by the . parties hereto. 9 l N I c,-

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.m. f,. ' cW g3> (18.. Interpretation. 6:. 'n t i Q (* LThe; interpretation and' performance of this contract sh'all:be .) ab J-Jin a'ccordance with and controlled by the. law'of the Stata=of l , y1 nl;. '; ~ Connecticut. o I 19.-. Addresses. m a', I Except as the parties may otherwise agree, any notice,> ? request, bill or oth'r communication from one. party to the e j other, relating to this contract,.or the rights, obligations or a. ~ performance of the parties hereunder, shall be in writing and- ~' f <shall. be, effective upon delivery to the other party.. Any such

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. ( communication shall be considered as duly delivered when delivered i'n' person or: mailed by register.*d or certified mail,. . postage. prepaid, to thel respective post of.! ice. address of the R . other party shown following the signatures of such other party ' . hereto, or such other address as.may be' designated by, written notice givennas prov'ided-in this Section 19. ~ L

20.. Corporate obligations, q

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-i This contract is the corporate act and obligation of the . parties hereto, and any cla'im hereunder against any stockholder, j i director or officer of either party, as such, is' expressly waived. . r i. J o le i I ( i e

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All Prior Agreements Superseded. ? m 21. ? This contract represents the entire-agreement between the ~ O parties relating to the subject matter hereof during the operative term hereof ( 1.e., post-December 31, 1997)~, and all previous agreements, discussions, communications and

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correspondence with respect to.the subject matter are hereby E' superseded and are-of no further force and effect. ol' c P P 22.- Counterparts. 1 t l This contract may be executed in any number of counterparts and eac'h executed counterpart shall have the same force and 2 L: D effect-as an-original instrument and as'if all-the. parties'to L all. of t,he-counterparts had signed the same* instrument. Any si'gnature page of this contract may be detached from any E l counterpart.without impairing the legal effect of any signatures 1 thereon, and may be attached to another counterpart of this contract identical in form hereto but having attached'to it one I l or more' signature pages. L IN WITNESS WHEREOF, the parties have executed this contract by their respective officers thereunto duly authorized as of the date first above written. r l: 1-L l' 31. --i 4

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,m. = w 1, w -1 t r y t... CONNECTICUT YANKEE ATOMIC POWER -i ~ COMPAN"E r:. Its' Senior Vice-Piesident P.O. Box 270. Hartford, Connecticut 06141: -THE CONNECTICUT LIGHT AND' POWER COMPANY. ~ 9 '-B m (Of ficer-- and Tit.le) E.' JAMES FERLAND, PRESIDENT-& CHIEF q ( Addre.s s). OPERATING OFFICER P. - O. BOX 270-HARTFORD, CONNECTICUT-06141 P r 4 9 9 i a e I L I, l e t l' l. ...., -. = _ _.... =

.;,y ,ym,_., ,,,.,,.c4,, d 5 ) '$\\ t 4 -t, 3 1. g 1 i, \\ ti, ATTACHMENT IV. 1 3 . f, [ 3 - f<. .1s q l. ,-1 '} l 1 1 - -. f .-s ? 1 J l' s 1-- 1 l l'* a h b ~) li 4+ j. . <j } m. t h (- g.=.. 1 i- .h 4 + i ? 4 ..i ' F ,f. bc ii f' l-r ~b i h, 1-' e e ) y 1 f,I 4 .'eI 4 j-%_-. - 9 h t'r ' l(. e s I, E O".- a r. g' O+ t b,.: s, 4 h' a t s l' G r

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=. l e i 1987 SUPPLEMENTARY POWER CONTRACT i This 1987 supplementary Power Contract, dated as of the 1st day of April, 1987, is entered-into by and between Connecticut . Yankee Atomic Power Company ( Connect cut Yankee") and the connecticut i Licht and Power Comoany (" Purchaser"). . Basic Understandings t Connecticut Yankee and the Purchaser are parties to a Power i Contract dated as'of July 1, 1964 (" Power Contract"). Pursuanti l-to the Power Contract and other-similar contracts (collectively, the " Power Contracts") between Connecticut Yankee and its other purchasers (collectively, with the Purchaser, the " Purchasers"), Connecticut Yankee-supplies to the Purchasers all of the capacity and electric energy available from the nuclear I generating unit owned by Connecticut Yankee at a site adjacent to the Connecticut River in the Town of Haddam, Connecticut (the " Unit"). The Power Contracts have a term of thirty (30) years .l following January 1, 1968, the date on which the Unit commenced L j commercial operation. ( u l l

tu : q, I 2 i, .( Connecticut Yankee and the Purchaser are also parties to an l Additional Power Contract, dated as of April 30, 1984 (" Additional Power Contract"). The Additional' Power Contract and other similar contracts (collectively, the " Additional. Power Contracts") between Connecticut Yankee and its other purchasers provide for extension of their respective rights and obligations following the December 31, 1997 termination date of the Power Contract and continuing during the Unit's. service life following January 1, 1998 and termination of all decommissioning 1 obligations related to the. Unit. Pursuant to the Power Contract and the Additional Power the Purchaser is entitled-and obligated to take its

Contract, entitlement percentage of the capacity and not electrical' output i

of the Unit and'the Purchaser is obligated to make payment of a similar portion of the costs and expenses related to the: Unit during the Unit's service life and decommissioning. l The Power Contract serves as security for obligations of . Connecticut Yankee and cannot be changed without the concurrence of other parties. Therefore, Connecticut Yankee and the Purchaser have been precluded from amending the Power Contract, and Connecticut Yankee and the Purchaser have entered into the following additional contract arrangements relating to the Unit (collectively, with other similar contract arrangements between . -.. ~...-.

~ . 7: 'i l.. 1 s i g

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Connecticut Yankee'and the other Purchasers, the " Supplementary, ~ Power contracts"): Supplementary Power Contract,. dated as of March 1, j 1978 Agreement Amending Supplementary Power Contract, 5 dated August 22, 1980 Second Amendment of The Supplementary Power Contract, dated October 15, 1982 ( Second supplementary Power contract, dated as of April 30, 1984 Pursuant to the Supplementary Power Contracts, the Purchaser makes monthly supplemental payments to Connecticut Yankee, such -payments being in addition to the payments made pursuant to the Power

• Contract.

These supplementary payments cover elements of Connecticut Yankee's costs of owning, operating'and maintaining tie Unit which are not appropriately provided for in the Power Contracts.- The_ Supplementary Power Contracts also contain r additional commitments and obligations relating to ownership, operation and maintenance of the Unit. NOW THEREFORE, in order to supersede the Supplementary Power Contracts and to restate herein the terms and conditions contained in such superseded Supplementary Power Contracts which Connecticut Yankee and the Purchaser wish to continue and to i make the applicable provisions of this 1987 Supplementary Power

.v.. t,' '4 1, 3. Contract effective'during the terms of the Power Contract and the Additional Power Contract, and in consideration of the l understandings recited herein and previously recited in the Supplementary Power Contracts, and in consideration of the respective undertakings of the parties to.this 1987 Supplementary Power Contract, Connecticut Yankee and the Purchaser hereby agree as follows: 1. Undertakings by Connecticut Yankee. Connecticut Yankee agrees to continue to operate and . maintain the Unit in accordance with the requirements of the 1 j. Power. Contract and Additional Power Contract and to use its best efforts to meet its future financing needs at the lowest L practicable cost. l l' 2. ' Supplementary Payment'To Payments Under The Power Contract l. With respect to each month, the Purchaser will pay to j i L Connecticut' Yankee the amount, if any, by which (1) the 1 Purchaser's entitlement percentage of the sum of (a) Connecticut l Yankee's total operating expenses for the month with respect to the Unit and (b) an amount equal to one-twelfth (1/12) of the o composite percentage for such month of the net Unit investment, l exceeds (ii) the amount payable by the Purchaser for the month i

0%. i i ai pursuant to the second paragraph of Section 7 of the Power contract. For the purposes of determining the amount, if'any, to be paid pursuant to this Section 2, 'idue following shall apply: i Connecticut Yankee's " operating expenses" shall include all-amounts properly chargeable to operating expense accounts, less any applicable credits thereto, in accordance with the LUniform System of Accounts (the " Uniform System") prescribed by the. Federal Energy Regulatory Commission for Class A or Class B Public Utilities and Licensees; provided, that for i-the accrual purposes of this Supplementary Power Contract, i of depreciation shall be computed'on the basis of a term ending May 26, 2004. l Included in the Unit's monthly operating expenses until fully recovered shall be an amount equal to one-thirty sixth (1/36) of the interest expense accrued from April, 1983 to October, 1986, inclusive, on the amount due from Connecticut Yankee to 'tdue U.S. Department of Energy for disposal of prior spent nuclear fuel and associated high level radioactive material. l 1

y p: ^ ' ^ - - y ' Alsolincluded in the-Unit's operating expenses:shall be an -{ 1 expense accrual for materials-and supplies which are-0 anticipated to~ remain _at tho'end.of the. Unit's operating l 4 111fe, with payment of such accruals being determined in ~ accordance with the following formula: ~ 1/M times (I,-R,) = E, ( i where: "M" equals the total number of months beginning with the billing month and ending on May 2.6, 2004, inclusive; "I,"' equals the gross book value of inventory as shown.on Connecticut Yankee's books.of account at the end of the month prior to the billing-month; "R,"' equals the total accumulated amortization n-reserve for materials and supplies at-the'end of the-Unit's useful life,.as shown on Connecticut Yankee's books-of account for the month prior to the billing month; and I "E," equals the monthly operating expense 1 accrual to be credited to the accumulated reserve for the billing month. Also included in the Unit's operating expenses shall be an expense accrual for nuclear fuel which is anticipated to remain unburned in the reactor core at the end of the Unit's

,;; wfM w e 7 ~ 7 ,o-m g(' .qji , /lly , y -. 7. - [h((sll7 t a 7 l'y $N Dy 8 j{ g operating life, with payment.of such accruals being. cv L.:A determined in.accordance with the following formula: 1/M times (I -R ) = Eg g g "M"' equals the total number of months beginning where: with the billing month and ending on May. 26, 2004,. inclusive; "I " equals the gross book value of the unburned g fuel remaining in the reactor core at the end of i the month during which the Unit most recently shut F down for refueling. The value of the unburned fuel-in the cora-shall be before any new fuel is added to the core pursuant to refueling; "R " equals the accumulated amortization reserve f for the unburned final core value, as shown on Connecticut Yankee's books of account for the month prior to the billing month; and "E " equals the monthly fuel amortization g expense accrual for the billing month. If in any month the earnings, after deducting associated costs, from investment of the segregated fund created pursuant to Section 8 of this 1987 Supplementary Power ( i i

n.,

,7 yM S J -a,. b; ( p. fy +. .1 -s-c + l O'- w .i. ie,' contract for disposal of prior spent-nuclear fuel and I; r L' associated high level radioactive material exceed or are-o insufficient.to meet Connecticut Yankee's interest. ~ obligations to the U.S. Department of Energy in; regard to ? such disposal costs, then an appropriate adjustment will:be -r' i made to the Unit's operating expenses forithe month to reflect the not amount of such excess or deficiency. l ..t " Net Unit investment" shall be determined in accordance with-thefprovisions of Section 7 of the Power. contract, except i that for purposes of this 1987 Supplementary Power Contract, (1) not Unit investment shall include construction we'rk.in

progress'only to the extent allowed by the Federal Energy o

Regulatory. Commission, (ii) in determining not Unit f investment, the accumulated provision-for depreciation shall not include any amounts specifically allowed by the Federal ~ L Energy Regulatory Commission to be excluded, (iii) not Unit i investment shall include the amount of Connecticut Yankee's j obligation for the principal balance and accrued interest due to the U.S. Department of Energy in regard to disposal of-prior spent nuclear fuel and-associated high level radioactive material, as shown on Connecticut Yankee's books F" of account, to the extent that such amount has not been L funded pursuant to Section 8 of this 1987 Supplementary Power Contract, (iv).not Unit investment shall include, in

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t addition to;all other amounts which may be includable-therein under said Section 7, but-without duplication, the

] . aggregate amount properly: chargeable at thel time in accordance with the Uniform System to Connecticut Yankee's nuclear: fuel accounts' (other than nuclear fuel in process), less the= balance.at the time of the accumulated provision for amortization.of the cost of nuclear fuel (excluding any } amounts specifically permitted by the Federal Energy Regulatory Commission), and (v) not Unit investment shall be reduced by the reserve for materials and~ supplies and unburned nuclear fuel' remaining at the end of the Unit's ~ g useful life, all as determined in accordance with the g; Uniform System. i " Composite percentage" shall be computed as of the last day .l i ~ a of each month ("the computation date"),-and for any. month the composite percentage shall be that computed as of the last day of the previous month. " Composite percentage" as of a ? - computation date shall be the sum of (1) fifteen percent (15%). multiplied by the ratio which the equity investment with respect to the Unit, as of such date, is to the total capital as of such date; plus (ii) the " effective interest rate" per annum of sach principal amount of long-term debt-outstanding on such date for l money borrowed with respect to the Unit (including the amount of I Connecticut Yankee's obligation to the U.S. Department of Energy i i L

o . i w. -; 1 j i x. in'~ regard to disposal of prior spent nuclear fuel and associated high level radioactive material which is included.in not Unit investment), multiplied by the ratio which such principal amount is to total capital as of such date; plus (iii) the " effective dividend rate" per annum of each series of preferred stock outstanding as of such date with respect to the Uni'c multiplied by the ratio which the amount at which such preferred' stock would be reflected on a balance sheet of Connecticut Yankee is to total capital as of such date. The " effective interest rate" of each principal amount of long-term debt referred to in clause (ii) will reflect the annual interest requirements and to the extent applicable, amortization of issuance expenses and discounts an'd premiums'and sinking fund call premiums, and l expenses and< discounts, refunding and retirement expenses and discounts and' premiums, and-all other expenses applicable-to the 4 issue of such indebtedness. The " effective dividend-rate" of each series of preferred stock referred to in clause (iii) will reflect:the annual dividend requirements, and to the extent applicable, amortization of issuance expenses and discounts and l premiums, sinking fund call premiums and expenses and discounts, refunding and retirement expenses and discounts and premiums, and all other expenses applicable to each such issue of preferred stock. l i-

-k 3 11 ~ l l, -" Equity investment" as of any date shall consist'of.the sum of (i)-all amounts theretofore paid to Connecticut Yankee for all common capital stock theretofore issued, plus all amounts paid to Connecticut Yankee by any of its common stockholders as capital contributions or advances, lors the sum of any amounts paid-by Connecticut Yankee to its common stockholders in the form of stock retirements, repurchases.or redemptions, return of i -, capital or repayments of such contributions or advances; plus (ii)-any credit' balance in the capital surplus account not- ' included under (1) and.in the retained earnings account on the books of' Connecticut Yankee as of such date. q- " Total capital" as of any date shall be the equity investment with respect to the Unit, plus the total of the amount which would be reflected on a balance sheet of Connecticut Yankee for all long-term debt and preferred stock then outstanding with respect to the Unit. " Uniform' System" shall mean the Uniform System of Accounts -prescribed by the Federal Energy Regulatory Commission (or any successor governmental authority) for Class A and Class B Public Utilities.and Licensees, as said system may be amended from time to time. t

y i 1.. 1 -12 ' b i o 3. Decommissionino Payment ? .For each month the Purchaser will pay Connecticut Yankee an

amount equal to the Purchaser's entitlement percentage of the.

. Total: Decommissioning Costs for the month with respect'to the! i. + Unit.- 1 (a) " Total Decommissioning costs" for any month shall mean the sum'of (x) an amount equal to all accruals'in such month to any reserve asJfrom time to= time established by Connecticut Yankee and I approved by its board of directors, to provide for-i I the. ultimate payment of the Decommissioning ' Expenses of the Unit plus (y) Decommissioning Tax Liability for such month. It is understood (1). that such funds'may be held by Connecticut' Yankee. 1 or by an independent trust or other separate fund, as determined by said board of directors, (ii) that, upon compliance with Section 7 hereof, the J l amount, custody and/or timing of such accruals may from time to time during the term-hereof be modified by said board of directors in its discretion or to comply with applicable statutory or regulatory requirements or to reflect changes in the amount, custody or timing of anticipated Decommissioning Expenses, and (iii) that the use

w, w 3. 4 b i i 7_ , L -I'. L '+ of the term "to decommission" herein encompasses i compliance with all requirements (other than~those' t h relating to spent nuclear fuel) of the Nuclear [ Regulatory Commission-or its successors (the.- "NRC")Lfor permanent cessation of operation of a nuclear. facility and any other activities ~ E L reasonably related thereto. l' (b)- " Decommissioning Expenses" shall include: (1) All costs and expenses of any NRC-approved method of removing the Unit from-service, - g l ' including without limitation,-dismantling,- mothballing, entombment, removing radioactive material (excludingspentnuclearfuel)[to . temporary and/or permanent storage' sites, decontaminating, restoring and supervising-I the site, and any costs and expenses incurred in connection: with proceedings before governmental authorities relating to any 4 authorization to decommission the Unit or i remove the Unit from service; (2) All costs of labor and services, whether directly or indirectly incurred, including e

..m.lA,- ^ . ss.. v.:- r a /- gdr if~ l lr without. limitation,Eservices'of. foremen, j L 1 j inspectors, supervisors,osurveyors, -engineers, security personnel, counsel'and-

(

-) accountants; performed.or rendered in connection with the decommissioning of the Unit and-the removal of-the Unit from =! . service,' and all costs of materials, p supplies, machinery, construction' equipment? and apparatus acquired or used:(including rental charges for machinery, equipment or apparatus > hired) for or in connection with the. decommissioning of the Unit and the c eif removal of the Unit from service, and all i administrative costs,-including services.cf. counsel and financial advisers, of-any applicable independent trust or other' separate fund; it being understood that any-amount, exclusive of proceeds of insurance, t realized by Connecticut Yankee as salvage on q any machinery, construction equipment and. 1 apparatus, the cost of which was charged to Decommissioning Expense, shall be treated as a reduction of the amounts otherwise chargeable on account of the costs of decommissioning of the Unit; and ^ 4

.a -15 L (3) 'All overhead costs applicable to.the Unit during its. decommissioning period, including, without-limiting the generality of the foregoing, taxes (other than taxes on or in respect of income), charges, licenses, excises and-assessments, casualties, surety -bond; premiums and insurance premiums. (c) " Decommissioning Tax Liability" for any. month

shall be an' amount established by connecticut Yankee and approved by its board of directors to:

{ meet possible income. tax' obligations, which amount shall not exceeds the amount-to be included in' the clause (x) portion of Total Decommissioning costs for such month multiplied by a fraction whose numerator is equal to the combined highest-applicable statutory Federal and state-marginal income tax rate and whose denominator is equal to one minus the combined highest statutory Federal and state marginal income tax rate. o. ( Without limiting the generality of the foregoing, any other amounts expended or to be paid with respect to decommissioning of the Unit or removal

~ 1 g- ^ -la-a 2p - of the Unit from service shall constitute part of i l the Decommissioning Expenses ifLthey are, or when R paid will"be, either (i) properly chargeable to: any account related to decommissioning of a j . nuclear generating unit in accordance with the Uniform-System of-Accounts applicable to i 1 Connecticut.. Yankee or generally accepted-accounting principles as then in effect, or.(ii) properly chargeable to decommissioninc of a . j -nuclear generating unft.in accordance with then applicable regulations of the NRC or the FERC or q 3. any other regulatory agency having jurisdiction.. i 4.. Decommissionino Payment Billina 1 d Connecticut Yankee will bill the Purchaser,-as soon.as practicable,after the end of each month, for all amounts payable j by,the Purchaser with respect to the particular month pursuant to Section 3 hereof. Such bills will be rendered in such detail j as.the Purchaser may reasonably request and may be rendered on j an estimated basis subject to corrective adjustments in subsequent billing periods. All bills shall be due and payable when rendered'and any amount remaining unpaid 15 days folicwing the date of receipt of bills shall bear interest at an annual rate equal to 2% in excess of the current prime rate then in

o o 7 'b q A <,j' ',, m 17-- n y. N 3 \\. offact at the principal; office in Hartford,. Connecticut of.The-j L-t L Connecticut Bank and Trust Company, National Association,-from' 1 fthe due-date to the date payment is~ received by Connecticut Yankee. 4 C 5. Decommissionino Fund i ? b Connecticut Yankee agrees to pay to,- or cause-to be paid to, .T the'-Connecticut Yankee Trust or any successor trust approved by l + P the* board of' directors of Connecticut Yankee all funds collected-t ~ hereunder-for the purpose-of decommissioning the Unit or' ' removing the Unit from! service. 6.. Duration of Decommissionino Payments v The Purchaser's ob1'igation to make payment of its. l entitlement' percentage of Total Decommissioning Costs shall, ~ whether or not the Unit is operated or operable and notwithstanding any earlier termination of the service life-of the. Unit and cancellation of the Power Contract or Additional Power Contract, remain in full force and effect until the completion of decommissioning of the Unit, it being recognized that such costs represent deferred payments in connection with power theretofore delivered by Connecticut Yankees provided, however, that the payment of Total Decommissioning Costs shall a r w -r v.--, w --, v-r +-+

w h L. -13 Si ~' L ! cease upon'the'taking of the Unit by exercise of the right of eminent domain or similar right or power. ~ t p, L7. Amendment of Decommissioning Payment Provisions l Upon authorization by Connecticut Yankee's board of directors of uniform-amendments to all the 1987. Supplementary Power Contracts identical to this 1987 Supplementary Power contract, Connecticut Yankee shall have the right to amend the provisions hereof relating to decommissioning payments by ( serving an appropriate statement of such amendment upon the Purchaser and filing the-same,with the Federal-Energy Regulatory o Commission (or such other regulatory agency as may have . jurisdiction,in'the premises) in accordance with the provisions L of applicable laws and any rules and regulations thereunder,'and such' amendment shall thereupon become effective on-the.date specified therein, subject to any suspension order duly' issued by such agency. All other amendments to this 1987 Supplementary-t Power Contract'shall be by mutual agreement, evidenced by a-s written amendment signed by the parties hereto, q 8. Secregated Fund for Disposal.of Prior Spent Nuclear Fuel and Associated Hich Level Radioactive Material Connecticut Yankee agrees to pay to, or cause to be paid into, any segregated fund approved by the board of directors of t t t

f h. i 19-L' \\ [ ) connecticut Yankee funds collected under this 1987 Suppl 6mentary p Power.. Contract for the purpose of. disposing of prior spent l u nuclear fuel and-associated high level radioactive material. Punds-previously collected by Connecticut Yankee from the Purchaser for the purpose of disposing of prior spent nuclear fuel and associated high level radioactive material-shall also be paid into any such segregated fund. Connecticut Yankee - further agrees that any funds collected from the Purchaser to meet such ' disposal costs which are not used for that purpose will be refunded to the Purchaser at the time final payment of such disposal' costs is made to the U.S.' Department of Energy. b Supplementary Payment to Payments Under The Additional. d 9. Power Contract ~ With respect to each month commencing on or after the effective date of service under the Additional Power Contract,. the Purchaser will pay to Connecticut Yankee the amount by which' -(i) the Purchaser's entitlement percentage of the sum of (a) Connecticut Yankee's total operating expenses for the month with respect-to the Unit and (b) an amount equal to one-twelfth .(1/12)'of the composite percentage for such month of the not Unit investment, exceeds (ii) the amount payable by tha Purchaser for the month pursuant to Section 7 of the Additional Power Contract. 5 - e etem a g p' g a m - e w -e En fM, 49 9 - w T--

J Y* A, .20 Forithe purposes'of determining the' amount, if any, to be g paid pursuant to this Section 9, the definitions set forth in j Section 2'of this 1987 Supplementary Power Contract shall apply. 1

10. Supplementary Payments Upon Termination of The Unit's

d Service Life In addition to all amounts otherviec payable by the Purchaser pursuant to the Power Contract and Additional Power contract, the Purchaser will be oblicated to pay to Connecticut I

Yankee, whether'or not the Unit is operated or operable and notwithstanding any earlier termination of the service life of the Unit and cancellation of.the Power Col. tract or Additional i Power Contract, the Purchaser's entitlement percentage of expenses associated with disposal of prior spent nuclear fuel. Such spent nuclear fuel expenses will be billed and paid in the same manner as decommissioning payments pursuant to Sections 4 l and 6 hereof.

11. Arbitration In case any dispute shall arise as to the interpretation or performance of this 1987 Supplementary Power Contract which cannot be settled by mutual agreement, such dispute shall be submitted to arbitration.

The parties shall if possible agree upon a single arbitrator. In case of failure to agree upon an i

q;b;y -~ u t.w o< . no 1 i{ b

i,

L.,. arbitrator within 15 days after the delivery by either pprty to the other of a written notice requesting arbitration, either I party may request the American Arbitration Association to appoint the arbitrator. The arbitrator, after opportunity.for -each of the parties to be heard, shall consider and' decide the dispute and notify the parties in writing of his decision. Such decision shall be binding upon the parties, and the expenses of. the arbitration shall be borne equally by them. 3 a

12. Regulut(og This 1987 Supplementary Power Contract, and all rights, t

' obligations and performance of the parties hereunder, are subject to all applicable state and Federal law and to all duly promulgated orders and other duly authorized action of any. governmental authority having jurisdiction. '13. Assignment l This 1987 Supplementary Power Contract shall be binding upon and shall' inure to the benefit of, and may be performed by, the 1 successors and assigns of the parties, except that no assignment, pledge or other t 'f this 1987 Supplementary Power Contract by either par' operate to release the assignor, pledger or transfet ny of its obligations under

y -p;. ,y.. 4 E -(. this 1987 Supplementary Power Contract unless; consent _to the-release is given in writing by the other party, or, if the other party has theretofore _ assigned, pledged or otherwise transferred-its interest in this 1987 Supplementary Power Contract, by the f other party's assignee, pledgee or transferee, or unless such transfer is incidentito a merger or consolidation with, or transfer of all or substantially all of the assets.of the . transferer to, another Purchaser which shall, as part of such assume all the obligations of the transferor under succession, this contract..

14. Richt of Setoff l

( The Purchaser shall not be entitled to set off against the _ payments required to be made by it under this 1987 Supplementary -Power Contract (1) any amounts owed to it by Connecticut Yankee I or (ii) the-amount of any claim by it against Connecticut-the foregoing shall not affect in any other . Yankee..However, way the Purchaser's rights and remedies with respect to any such i amounts owed to it by Co'nnecticut Yankee or any claim by it against Connecticut Yankee. t { L l . i.-

hi k ~ ~ '~ ,~ u

4 1 9.,

m ,Oi" ' c Rb ' in. ,3 I .J p,-. v. f fl5'..: Interpretation The: interpretation,and-performance of this 1987 Supplementary-Power Contract shall be in accordance.with and k controlled.bylthe law of the State of Connecticut. .,?l6.' Addresses any notice, Except'as the parties may otherwise agree, i . request, bill or'other communication.from one party to the. other, relating to this.1987. Supplementary Power Contract,~or 2 bligations-or performance of the parties hereunder, j a -the rights,:o shall be in writing Eand shall be - effective upon delivery to thes t p Any'such communication shall-be considered as duly j E other party. delivered when, mailed to the respective post office address of -i ~ f such other i Ethe other: party shown following the signatures o or such,other. post office address as may be f 3 ^ party. hereto, -designated by written notice given as provided in.this Section. u 17.- Corporate Obliostions !a This 1987 Supplementary Power Contract is the corporate act: 1 I Ie .and obligation of the parties hereto, and any claim hereunder f!' s h against any. stockholder, director or officer of any party, as such, is expressly waived. i 1 ) . -... \\

E ?

18. Usage'of Defined Terms g.

Except where-otherwise specifically provided herein, the usage in-this 1987 Supplementary Power Contract of terms which { are defined in the Power Contract and Additional' Power Contract h' shall be deemed to be in accordance with the definitions thereof in the Power Contract.

19. Counterr 3 NE This 1987 Supplementary Power contract may be executed in any-number of counterparts and each executed counterpart shall have the same force and effect as an original instrument and as

] if all the parties to all of the counterparts had signed the- .Any signature page of this 1987 Supplementary EI same instrument. Power Contrac't-may be detached from any counterpart without ' impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this 1987 Supplementary Power ~ Contract identical in form hereto but having attached to it one or more signature pages.

20. Effectiveness 4

This 1987 supplementary Power Contract shall become effective sixty days after the date upon which this 1987 'i ' Supplementary Power Contract shall have been filed with the Federal Energy Regulatory Commission, subject to any suspension

25-4 order duly issued by the Federal Energy Regulatory Commission. At such time as this 1987 Supplementary Power Contract b.ecomes effective it shall supersede and cancel the previous Supplemental Power Contracts between Connecticut Yankee and the Purchaser, except that this 1987 supplementary Power contract shall not affect the obligation to pay any sums of money due with renpect to any prior period under the terms of any such previous Suppiamentary Power contracts, i. k I luu u

g4 26-( IN WITNESS WHEREOF, the parties have executed this 1987 Supplementary Power Contract by their respective officers duly authorized as of the 1st day of April, 1987. CONNECTICUT YANKEE ATOMIC POWER COMPANY 3 ^ By_ Its Chairma and Prest. dent Address: P.O. Box 270 Hartford, Connecticut 06101 The Connecticut Light and Power Company By (' Its Chairman and President Address: 4 _____________1____________.________ .............}}