Text

Forwards Decommissioning Rept Indicating Reasonable Assurance That Funds Available to Decommission Facility. Financial Assurance of Cotenants Also Encl
	ML20055G526
Person / Time
Site:	Nine Mile Point
Issue date:	07/18/1990
From:	Burkhardt L; NIAGARA MOHAWK POWER CORP.
To:	; NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
	NMP2L-1244, NUDOCS 9007230281
	Download: ML20055G526 (247)
	v • d • e

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"N5ETSA NIAGARA MOHAWr. POWER CORPORAtl0N/301 PLAINFIELD ROAD, SYRACUSE, N Y.13212/ TELEPHONE (315) 474 1511 July 18,1990 NMP2L 1244 U. S. Nuclear Regulatory Commission Attention: Document Control Desk Hashington, D.C. 20555 RE: Nine Mile Point Unit 2 Docket No. 50-410 NPF-69 Gentlemen:

As required by 10CFR50.33(k) and 50.75, Niagara Mohawk hereby submits the

-enclosed Decommissioning Report, indicating how reasonable assurance is provided that its share-of funds will' be available. to decommission Nine Mlle Point Unit 2 when its license expires. Also enclosed are the financial assurance documents of.the cotenants portion of Nine Mile Point Unit 2.

If you have any questions in regard to the content of Niagara Mohawk's Decommissioning Report, please contact H. D.' Baker at (315) 428-7029.

Sincerely' ,

NIAGAR M0 HANK POWER CORPORATI0h Mr, Lawrence Burkhardt III Executive Vice President (08421)

Enclosures cc: Reg. Administrator, Region I

' Mr. R. A. Capra, Director Mr R. E. Martin, Project Manager Mr. H. A. Cook, Senior Resident Inspector Records Management 9007230281 900718- (

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HlAGARA MOHAWK POWER CORPORAtl0N/300 ERIE BoVLEVARD WEST. SYRACUSE. N Y.13202/ TELEPHONE (315) 4741511 BEFORE THE UNITED STATES NUCLEAR REGULATORY COMMISSION ,

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NIAGARA MOHAWK POWER CORPORATION Docket No.

r DECOMMISSIONING REPORT Niagara Mohawk Power Corporation (Company), Syracuse, New York, hereby i

L submits this Decommissioning Report in compliance with 10 C.F.R. 50.33(k) at'd 50.75(b).

1. The Company owns the following undivided interest in the Nine Mile Point Unit Two Nuclear Generating Statio . (Unit):

Niagara Mohawk Power Corporation 41% - l

2. The Company hereby certifies that financial assurance for decommissioning e

its 41 percent share of the Unit is provided in the amount of $74,007,720. The calculation-l of this amount is set forth in Exhibit A and complies with the formula set forth in 10 C.F.R.

L 50.75(c). This figure will be revised annually during the operating life of the Unit using.

the adjustment factor defined in 10 CFR 50.75(c)(2).

3. The method by which the Company will provide financial assurance for decommissioning its share of the Unit will be by payments into an extemal sinking trust fund-(Trust Fund) established March 13,1990. The Company made an initial contribution

, of $446,000 to the Trust Fund on March 14,1990 (see Exhibit B). Beginning March 15,~

g 1991, the Company will make supplemental contributions to the Trust Fund, such i

l supplemental contributions to be made annually or sooner until October 2026.

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4. Attached as Exhibit C to this Decommissioning Report is a copy of the executed Trust Agreement between the Company and Mellon Bar.k, N.A. dated March 13, -,

i 1990. On April 6,1990, the Company employed Loomis, Sayle.s and Company of Boston, MA to act as the initial investment manager of the Trust Fund. l

5. Attached as Exhibit D to this Decommissioning Report is a schedule for implementing the method of providing fm* ancial assurance for decommissioning the Company's share of the Unit. l NIAGARA MOHAWK POWER CORPORATION

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By: .

Arthur W. Roos 1 Treasurer q

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EXHIBIT A 1

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Calculation of Minimum Financial Assurance Amount NINE MIIE POINT UNIT TWO

i I. NRC MINIMUM DECOMMISSIONING COST FOR A BWR NUCLEAR PLANT A. For BWR between 1200 MWt and 3400 MWt: (5104 Million + 0.009P), where P = MWt ,

Source: Federal Register, Vol. 53 No.123, Part 50, P. 24ts50 NRC Minimum Total Amount Niazara Mohawk Power Corporanon: 41% Ownership 9 Year End 1989 Nine Mile Point Unit Two = 3323 MWt $104,000,000 plus: .009 (x) 3323 = 29.907.000 $180,506,636 x .41 = S 74.007.720 NRC Minimum @ 1986 S: 133,907,000 1989 Adjustment Factor (x)

(See II.A, Sheet 2 of 2) 1.348 NRC Minimum @ Year End 1989 S: $180.506.636 en aG

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II. Enc ADsu8TNENF FACTOR muwaiOE (Per Federal Register, Vol. 53, No.123, Part 50, P. 24050) .>

A'. Estimated cost (Year E) = [1986 $ cost] [.65L + .13E + .22B]

(.65 x 1.226) + (.13 x .877) + (.22 x 1.989) i1989 Year End Adjustment Facter =- j 1989 Tear End Adjustment Factor = gg Where: Source:

L = Labor Monthly Labor Review, U.S. Department of Labor, Bureau of Labor Statistles, Tal>1e 23, Employment Cost Index, private nonfarm, Northeast Region. .

t E = Energy equals two components: Producer Price Index Data, Table 6: where P equals Indestrial Power, Com.

P = electric power (23%) Code 0543, Mid-Atlantic; where F equals Light feel oils, Comm. Code 0573. ;

F = fuel oil (77%)

B = Burial Cost EUREG 1307, Report on Weste Burial Charges, October 1989.

B. Calculation of Factors: i Energy (E): P = Electric Power Labor (L): ' Compensation, Northeast Region Index -Indust. Power, CC 0543, Mid-Atlantic Inder l

January 1986 Actual 130.5 January 1986 4ctual 111.9 December 1988 Actual 150.4 December 1988 Actami 109.5 i December 1989 Actual 160.0 December 1989 Actual 115.4' 1986 to Year End 1989 Excl. Factor LL2! 1986 to Year Ehd 1989 Escl. Factor h03J Energy (E): F = Ptsel Oil Burial (B): : Light Fuel Oils, CC 0573 Inden October 1989, EUREG 1307 So. Carolina site. January 1986 Actual 82.0 for BWR Year Index December 1988 Actual 50.7 :

December 1989 Actual 68.1 1/1/86 Washington Site 1.000 t 1/1/88 So. Carolina site 1.814 . 1986 to Year Bid 1989 Escl. Factor e n830 1/1/89 So. Carolina site (Est.-0 4.4f? 1.894 (*) i 1/1/90 So. Carolina site (Est. 8 5.0M 1.989'(*)

-l 1986 to Year End 1989 Escl.-Factor L989 "{

E = for a BNR [0.23F + 0.77F] W E = for a BWR-[0.23(1.031) + 0.77(0.830)] = 0.877 - 5i w et

Estimated burial. cost to escalate at 4.4% and 5.0% for 1989 and 1990 based on the Barnwell low-level radioactive .S.%

. rate schedule for base disposal charges - standard waste. .

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( W I R E' T R A N S F E R)

3 , ; PLEASE ISSUE CHECK AS FOLLOWS:

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--. Mellon_ Bank.

P ADDRESS-One Mellon Bank Center - ,

Room 3346 $3,578,000.00 i Pittsburgh, PA. 15258 l

l FOR: Nuclear Decommissioning Trust deposit.

Use the wire transfer inst uctions listed below: .

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. ' Mellon Bank (West)

L Pittsburgh, PA l AB A' #043-000-261

. Attn Joanne Haines Benefit: 900-9132 l if Further Credit:

Niagara Mohawk Decommissioning Trust J Unit 1 Qualified - Account 092-014 $3,132,000 Unit 11 Qualified - Account 092-016 446,000

$3,578,000 O

.4 c THIS WIRE TRANSFER MUST BE COMPLETED ON MARCH 14,-1990 I

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i EXHIBIT C

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t NIAGARA MOHAWK POWER CORPORATION i MASTER DECOMMISSIONING TRUST AGREEMENT FOR NINE MILE POINT NUCLEAR STATION UNIT ONE i NINE MILE Pr.NT NUCLEAR STATION UNIT TWO r

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Dated: March d,1990

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, e TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS.

1.01 Definitions......................... 3 t

ARTICLE II. MASTER TRUST PURPOSES, '

NAME AND FUNDS ,

2.01 Master Trust Purposes . . . . . . . . . . . . . . 8 2.02 Establishment of Master Trust ...... 8 2.03 Acceptance of Appointment........... 9

, 2.04 Name of Master Trust................ 9

! 2.05 Segregation of Master Trust......... 9 ;

l 2.06 Designation of Funds................ 10 '

I 2.07 Duties of Authorized Representatives.10 2.08 No Authority to Conduct Business.... 11 2.09 No Transferability of Master Trust.. 11 l ARTICLE III. CONTRIBUTIONS AND INCOME.

3.01 Initial Contribution................ 11 3.02 Additional Contributions............ 12 3.03 Allocation of Net Income............ 12 3.04 Subsequent Adjustments.............. 12 ARTICLE IV. DISTRIBUTIONS.

4.01 Payment of Decommissioning Costs ... 13 4.02 Payment of Expenses of Administration.................... 14 4.03 Fees................................ 14 4.04 Liquidation of Investments.......... 14 ARTICLE V. TERMINATION.

5.01 Termination of Funds and Master Trust in General........... 15 5.02 Termination of Qualified Funds Upon Disqualification....... 16 5.03 Termination of Qualified Funds on Sale of Plants................. 16 5.04 Distribution of Master Trust and Funds Upon Termination........ 16 L

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ARTICLE VI. TRUSTEES.

6.01 Designation and Qualification of Successor Trustee (s)........... 17 6.02 Exoneration from Bond............... 18 6.03 Resignation......................... 18 6.04 Transactions With Third Parties..... 19 6.05 Accounts and Reports................ 19 6.06 Tax Returns and Other Reports....... 21 6.07 Liability........................... 23 ARTICLE VII. INVESTMENTS.

7.01 Appointment of Investment Manager (s).23 7.02 Direction by Investment Manager (s).. 24 ARTICLE VIII. TRUSTEE'S GENERAL POWERS.

8.01 Extension of Obligations and Negotiation of Claims............. 27 8.02 Registration of Securities.......... 27 8.03 Borrowing........................... 27 8.04 Retention and Removal of Pro-fessional and Employee S2rvices. . . 27 8.05 Powers of Trustee to Continue Until Final Distribution.......... 28 8.06 Discretion in Exercise of Powers.... 28 ARTICLI IX. TRUSTEE'S INVESTMENT POWERS.

9.61 Preservation of Principal........... 29 9.02 Investment of Qualified Funds....... 30 9.03 Investment of Nonqualified Funds.... 31 9.04 Cash Sweep Investments.............. 31 9.05 Management of Master Trust.......... 31 ARTICLE X. MISCELLANEOUS.

10.01 Headings............................ 32 10.02 Particular Words.................... 32 10.03 Severability of Provisions.......... 33 10.04 Delivery of Notices Under Agreement. 33 10.05 Alterations and Amendments.......... 33 10.06 Successors and Assigns.............. 35 10.07 G ov e rn i ng La w . . . . . . . . . . . . . . . . . . . . . . . 3 5 10.08 Accounting Year..................... 35 10.09 Counterparts........................ 35 EXHIBIT A CERTIFICATE

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MASTER DECOMMISSIONING TRUST AGREEMENT l AGREEMENT made this /b* day of March, 1990, by and between Niagara Mohawk Power Corporation, a New York i

corporation (" Company"), and Mellon Bank, N.A., a national ;

banking association having trust powers (" Trustee").

RECITALS OF THE COMPANY WHEREAS, the Company is the sole owner of Nine Mile Point Naclear Station Unit one ("Nine Mile Unit one"); and j WHEREAS, the Company is the owner of a forty-one percent (41%) undivided interest in Nine Mile Point !

t l Nuclear Station Unit Two ("Nine Mile Unit Two"); and WHEREAS, the Company is subject to regulation by the New York Public Service Commission ("NYPSC"), an agency of the State of New York created and existing pursuant to N . Y . Pub. S e r . Law i 1, et seq. and the Nuclear Regulatory Commission ("NRC"), an agency of the United States government created and existing pursuant to 42 U.S.C.

i 5841; and WHEREAS, the NYPSC has permitted the Company to i include in its cost of service for ratemaking purposes certain amounts in order to provide monies for the l

Company's share of expenses with respect to the company's ownership interests in the Plants; and

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1 WHEREAS, pursuant to section 468A of the Internal ;

Revenue Code of 1986 (" Code"), certain Federal income tax ,

benefits are available to the company by creating and ,

making contributions to qualified nuclear decommissioning reserve funds associated with the Company's ownership :

interests in the Plants; and :

WHERIAS, the Company wishes to establish both quali-fled nuclear decommissioning reserve funds and nonquali-fled nuclear decommissioning reserve funds to hold monies for decommissioning the Plants; and WHEREAS, the company wishes to establish a Master Trust for the collective investment of the assets of the qualified and nonqualified nuclear decommissioning reserve

! funds for the Plants, wherein each Fund shall constitute a separate trust under the Master Trust; and ,

WHEREAS, the assets of each of the qualified and nonqualified nuclear decommissioning reserve funds shall l be deemed to have been transferred to a Master Trust to be held hereunder for the benefit of such runds.

RECITALS OF TRUSTEE WHEREAS, Mellon Bank, N.A. (" Trustee"), is a national banking association with trust powers; and l WHEREAS, the Trustee is willing to serve as trustee I to the Master Trust on the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the mutual promises herein contained, the company hereby agrees to deliver to the Trustee and the Trustee hernby agrees to receive contributions to the Master Trust; and TO HAVE AND TO HOLD such assets; and TO INVEST AND REINVEST the assets of the Master Trust as provided herein; and T6 PAY OR DISTRIBUTE frem the Master Trust as provided herein; IN TRUST NEVERTHELISS, for the uses and purposes and upon the terms and conditions, as hereinafter set forth.

I. DEFINITIONS 1.01 Definitions. As used in this Master Decommissioning Trust Agreement, the following terms shall have the following meanings (1) " Agreement" shall mean and include this Master Decommissioning Trust Agreement as the same may be amended,' modified, or supplemented from time to time.

(2) " Authorized Representative" shall include the persons designated pursuant to section 2.07 hereof.

(3) " Certificate" shall mean a document prope y completed and executed by an Authorized Representa*

of the company and substantially in the form of Exhibit A hereto.

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ll (4) " Code" shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time.

(5) " Committee" shall mean the Compensation Committee established by the company consisting of three or more individuals appointed by the Company. The Company has empowered the committee to direct the investment management of all assets of the Master Trust and perform all duties attendant thereto, including the appointment of trustees and investment managers (which may include the Trustee) and the execution of whatever contracts, agreements, or other documents, as it deems necessary to manage and invest such assets. Each member of the Committee shall serve at the Company's will and the Company shall notify the Trustee in a written statement signed by an Authorized Representative of the Company of all appointments and replacements of Committee members.

(6) " Company" shall mean Niagara Mohawk Power Corporation.

(7) " Contribution" shall mean any contribution, cash or otherwise, made to the Funds.

(8) " Decommissioning Collections" shall mean all monies collected by the Company from its customers for Decommissioning Costs associated with the Plants.

(9) " Decommissioning Costs" shall mean the expenses incurred in decommissioning the Plants.

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(10) " Excess Contribution" shall have the meaning i set forth in Section 3.04 hereof.

(11) " Fund" shall mean any one of the Qualified or j Nonqualified Funds. i (12) " Funds" shall mean the Qualified Funds and the l

Nonqualified Funds, collectively.

(13) " Investment Account" shall mean an account established by the Trustee pursuant to Section 7.01 herest.

(14) " Investment Manager (s)" shall mean the fiducitry specified in an Investment Manager Agreement (s),

including any employee of the company or its affiliated companies.

(15) " Investment Manager Agreement (s)" shall mean an agreement (s) between the company and an Investment Manager (s) selected by the company which agreement governs ,

i the investment management of all or a portion of the Trust.

(16) " Master Trust" shall consist of the ,

Contributions to the Funds by the Company pursuant to this Agreement together with-the proceeds and reinvestment

, thereof.

1 (17) "Nine Mile Unit One" shall mean the Company's ownership !nterest in Nine Mile Point Nuclear Station Unit One as it exiEts from time to time.

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(18) "Nine Mile Unit One Nonqualified Fund" shall consist of Contributions by the company for decommissioning Nine Mile Unit One (but only to the extent such contributions are not deposited and maintained in the ,

Nine Mile Unit One Qualified Fund) plus earnings and appreciation thereon. ;

(19) "Nine Mile Unit One Qualified Fund" shall mean the Nuclear Decommissioning Reserve Fund established for :

Nine Mile Unit One pursuant to section 468A of the Code, and shall consist of Contributions by the company for decommissioning Nine Mile Unit One plus earnings and appreciation thereon, which contributions are specified in ,

a Schedule of Ruling Amounts with respect to Nine Mile Unit One.

l (20) "Nine Mile Unit Two" shall mean the company's :

ownership interest in Nine Mile Point Nuclear Station Unit Two as it exists from time to time.

(21) "Nine Mile Unit Two Nonqualified Fund" shall consist of Contributions by the Company for decommissioning Nine Mile Unit Two (but only to the extent such Contributions are not deposited and maintained in the Nine Mile Unit Two Qualified Fund) plus earnings and appreciation thereon.

(22) "Nine Mile Unit Two Qualified Fund" shall mean the Nuclear Decommissioning Reserve Fund established for

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Nine Mile Unit Two pursuant to section 468A of the Code, and shall consist of Contributions by the company for decommissioning Nine Mile Unit Two plus earnings and appreciation thereon, which Contributions are specified in a Schedule of Ruling Amounts with respect to Nine Mile Unit rio.

(23) "Nonqualified Punds" shall mean the Nine Mile Unit one Nonqualified Fund and the Nine Mile Unit Two Nonqualified Fund, collectively.

(24) "NRC" shall mean the Nuclear Regulatory Commission, as defined in 42 U.S.C. I 5841.

(25) "NYPSC" shall mean the New York Public Service Commission, as defined in N.Y. Pub. Ser. Law 5 1, et seq.

(26) " order" shall mean any order relating to decommissioning the Plants issued by the NYPSC or the NRC.

(27) " Plants" shall mean Nine Mile Unit one and Nine Mile Unit Two, collectively.

(28) " Qualified Funds" shall mean the Nine Mile Unit One Qualified Fund and the Nine Mile Unit Two Qualified Fund, collectively.

(29) " Schedule of Ruling Amounts" shall have the meaning set forth in section 468A(d) (i) of the Code.

(30) " Service" shall mean the Internal Revenue Service.

(31) " Trustee'" shall mean Mellon Bank, N.A., or any successor appointed pursuant to Section 6.01 hereof.

II. MASTER TRUST PURPOSES,_NAME AND FUNDS 2.01 Master Trust Purposes. The exclusive purposes of this Master Trust are to hold funds for the contem- [

plated decommissioning of the Plants, to constitute qualified and nonqualified nuclear decommissioning reserve funds for the Plants (the Qualified Funds being estab-libbed pursuant to Section 468A of the Code, any applica-ble successor provisions and the regulations thereunder) !

l l and to comply with any order.

l 2.02 Establishment of Master Trust. By execution of T L t this Agreement, the company:

(a) establishes the Master Trust which shall be >

ef fective March /[I, 1990, and which shall consist of such l Contributions as may be delivered to the Trustee by the Company for the Funds. The Master Trust also shall ,

include additional Contributions, and earnings and appreciation thereon; (b) establishes the Funds, each of which shall 7 constitute a trust consisting of such contributions as may be delivered to the Trustee by the company as designated for such Fund. Each Fund also shall include additional

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L Contributions designated for such Fund, and earnings and appreciation thereon; and

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.(c) appoints Mellon Bank, N.A. as Trustee of the Master Trust.

2.03 Acceptance of Appointment. Upon the terms and conditions herein set forth, Mellon Bank, N.A. accepts the appointment as Trustee of this Master Trust. The Trustee shall receive any contributions dsposited with it by the i company and shall hold, manage, invest and administer such Contributions, together with earnings and appreciation thereon, in accordance with this Agreement.

i 2.04 Name of Master Trust. The Contributions received by the Trustee from the Company together with the proceeds, reinvestments and appreciation thereof shall constitute the " Niagara Mohawk Power Corporation Master Decommissioning Trust."

2.05 Segregation of Master Trust. The Master Trust shall be divided by the Trustee into the Funds as follows:

(a) Nine Mile Unit one Qualified Fund; (b) Nine Mile Unit one Nonqualified Fund; (c) Nine Mile Unit Two Qualified Fund;-

(d) Nine Mile Unit Two Nonqualified Fund.

The Trustee shall maintain such records as are necessary to reflect each Fund separately on its books L from each other Fund and shall create and maintain such i

subaccounts within each Fund as the Company shall direct.

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P 2.06 Designation cf Funds. Upon (i) the initial Contribution to the Master Trust as specified in Section 3.01; (11) any addition to the Master Trust pursuant to Sect. ion 3.02; (iii) any adjustment to the Funds pursuant ,

to Section 3.04; or (iv) any withdrawal from the Master Trust for Decommissioning Costs pursuant to Section 4.01, -

or for administrative expenses pursuant to Section 4.02, I the Company shall designate (in writing) the Fund (s) which are to be credited or debited for the amount of such .

Contribution, withdrawal, addition or adjustment, and the Trustee shall credit or debit the Fund (s) in accordance with such designation; provided, however, that if the Company fails to designate the Fund (s) to which payment of administrative expenses is to be debited, such payment shall be debited pro rata (based upon the fair market value of each Fund) among all of the Funds.

2.07 Duties of Authorized Representatives. The company has empowered the Authorized Representatives and their delegates to act for the Corpany in all respects hereunder. The Authorized Representatives may act as a ,

group or may designate one or-more Authorized 1

Representative (s) or delegate (s) to perform the duties described in the foregoing sentence. The Company shall provide the Trustee with a written statement setting forth ,

the names and specimen signatures of the Authorized .

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Representatives. The Authorized Representatives shall provide the Trustee with a written statement setting forth the names and specimen signatures of any delegate of the Authorized Representatives.

2.08 No Authority to Conduct Dusiness. The purposes of this Master Trust are limited specifically to the matters set forth in Section 2.01 hereof, and there is no objective to carry on any business unrelated to the Master Trust purposes set forth in Section 2.01 hereof, or divide the gains therefrom.

2.09 No_ Transferability of Master Trust. The interest of the Company in the Master Trust is not transferable, whether voluntarily or involuntarily, by the company nor subject to the claims of creditors of the Company; provided, however, that any creditor of the company as to which a certificate has been properly completed and submitted to the Trustee may assert a claim ,

directly against the Master Trust in an amount not to exceed tre amount specified in such certificate.

III. CONTRIBUTIONS AND INCOME 3.01 Initial contribution. On or after the date first written.above, the Company shall cause to be delivered to the Trustee an initial Contribution of Decommissioning Collections.

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3.02 Additional Contributions. From time to time after the initial Contribution to the Master Trust and I

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, prior to the termination of this Master Trust, the Company may make, and the Trustee shall accept, additional

. contributions to the Master Trust to satisfy the purposes of this Master Trust as set forth in Section 2.01, which contributions may be made to the Qualified Funds or to the Nonqualified Funds. -l 3.03 Allocation of Income. The Trustee may pool ]

the assets of the Funds for investment purposes in I

accordance with the written instructions of the Company, and, upon so doing, may treat each Fund so pooled as having received or accrued a pro rata portion (based on the principal balances of the Funds so pooled) of the net ,

income of the Master Trust (including appreciation) related to such pooled assets in any accounting year of .

the Master Trust. The Trustee shall maintain such records 1

l as are necessary to reflect the allocation of income and losses among the Funds in accordance with this section ,

3.03. The Trustee may rely upon the written opinion of ,

legal counsel of the company with respect to any question ,

arising under this Section 3.03.

3.04 Subsequent Adjustments. The Trustee and the Company understand and agree that the Contributions made l

by the Company to a Qualified Fund from time to time may

l exceed the amount permitted to be paid into such Fund (s) pursuant to section 468A of the Code and any regulations thereunder, based upon changes in estimates, subsequent developments or any other event or occurrence which could not reasonably have been foreseen by the company at the ;

time such Contribution was made (" Excess Contribution").

Upon receipt of a written directive of the Company signed by an Authorized Representative setting forth the amount i

of the Excess Contribution to be transferred (" Excess Assets") from a Fund and stating that such Excess contributions and any earnings and appreciation thereon L should be transferred to one or more of the other Funds as specified or paid to any person or entity, including but not limited to thn Company, the Trustee shall transfer or pay such Excess contributions, as the case may be, to the Fund (s), pornon, or entity specified by the company in the written directive. -

The Trustee and the company further understand and agree that a transfer of monies among the Qualified Funds l and the Honquelified Funds may be necessary to effectuate the purposes of this Master Trust.

IV. DISTRIBUTIONS 4.01 Payment of Decommissioning Costs. Upon receipt '

of a certificate, the Trustee shall make payment of Decom-missioning Costs to any person (including the Company) for i

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goods provided or labor or other services rendered in ,

I connection with the decommissioning of the Plants.

4.02 Payment of Expenses of Administration. Upon {

receipt of a certificate, the Trustee shall make payments j of administrative costs (including taxes, reasonable out-of-pocket expenses, trustee's fees and investment manager's fees) and other incidental expenses of the Master Trust (including legal, accounting and actuarial i expenses) in connection with the operation of the Master Trust) pursuant to this Agreement. All such administra-tive expenses and incidental expenses of the Master Trust l l shall be allocated proportionately among the Funds (based j l on the principal balance of each Fund) unless otherwise

-directed by the company. The Trustee shall maintain such records as are necessary to reflect the allocation of L costs and expenses in accordance with this section 4.02.

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4.03 Fees. The Trustee shall receive as exclusive compensation for its services pursuant to this Agreement L those amounts specified in the fee schedule as may from l

time to time be agreed upon in writing by the Trustee and the Company. !

4.04 Liquidation of Investments. At the direction :

of the company or any Investment Manager, the Trustee shall sell or liquidate such investments of the Funds as may be specified. The proceeds of any such sale or l

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liquidation shall be credited pro rata to the Fund or Funds to which such investments were credited prior to '

such sale or liquidation.

V. TERMINATION 5.01 Termination of Funds and Master Trust in l

General. Each Fund (or portion thereof) established hereunder shall terminate upon the earlier of:

(i) the date specified as the date that such Fund (or portion thereof) shall terminate in a written notification to the Trustee from the company; (ii) substantial completion of the nuclear decommissioning of the Plant to which it relates (as defined in Treasury Regulations promulgated under Code '

section 468A), as evidenced by written notification of that fact to the Trustee I by the Authorized Representative; or l (iii) twenty-one (21) years after the death of the last survivor of (x) each person who .

1 L was an officer of the company or of the company's affiliated companies on January I.

L 1, 1990 and (y) each of their descendants L

born on or prior to January 1, 1990.

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, This Master Trust shall terminate upon the termination of all of the Funds. l 5.02 Termination of Qualified Funds Upon Disqualifi-cation. Notwithstanding the provisions of Section 5.01 1

hereof, the applicable portion of any Qualified Fund shall

]

terminate upon its disqualification from the application of section 468A of the code, whether pursuant to an administrative action on the part of the Service or the

decision of any court of competent jurisdiction, but in no event earlier than the date on which all available appeals have been either prosecuted or abandoned and the period of 4

time for making any further appeals has elapsed.

5.03 Termination of Qualified Funds on Sale of Plants. Notwithstanding the provisions of Section 5.01 hereof, and to the extent required in Treasury Regulations promule, under code section 468A, the applicable portion or any Qualified Fund shall terminate upon the company's sale or other disposition of all or a portion of

-the Plants.

5.04 Distribution of Master Trust and Funds Upon Termination. Upon termination of this Master Trust or any ,

l Fund (s), the Trustee shall assist the Investment ,

Manager (s)'in liquidating the assets of the Master Trust or Fund (s), and distributing the then-existing assets thereof (including accrued, accumulated and undistributed

,,-...,.,,y-,r w- - -- e-y, , - - -- ,

- - - - - - - - --__-_- - - __ _-_., __,__,,.___m _ _ , _ _ -

net income), less final Master Trust or rund administra-tion expenses (including accrued taxes), to the company; provided, however, that no such distribution shall be made unless either (a) an order has been issued which specific-ally authorizes such distribution or (b) the Trustee has received an opinion of legal counsel to the Company to the effect that no such order is necessary to authorize such distribution.

VI. TRUSTEES 6.01 Designation and Qualification of Successor Trustee (s). At any time during the term of this Master Trust, the Company shall have the right to remove the Trustee (at the Company's sole discretion) acting hereunder and appoint another qualified entity as a successor Trustee upon thirty (30) days, notice in writing to the Trustee, or upon such shorter notice as may be acceptable to the Trustee. In the event that the Trustee ,

or any Successor Trustee shall (a) become insolvont or admit in writing its insolvency; (b) be unable or admit in writing its inability to pay its debts as such debts nature; (c) make a general assignment for the benefit of creditors; (d) have an involuntary petition in bankruptcy filed against it; (e) commence a cane under or otherwise seek to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquida-

-- - . ,_ - _. ~ _ . - - - . _ . - - - - - _ . - - - .

tion law, statue, or proceeding; or (f) resign, the company shall appoint a successor Trustee as soon as prac-t ticable. In the event of any such removal or resignation, i

the Trustee or successor Trustee shall have the right to ,

have its accounts settled as provided in Section.6.05 ,

hereof. Any successor to the company, as provided here- j in, shall have the same right to remove and to appoint any .

Trustee or Successor Trustee. ,

Any successor Trustee shall qualify by a duly acknowledged acceptance of this Master Trust, delivered to the company. Upon acceptance of such appointment by the Successor Trustee, the Trustee shc11 assign, transfer and -j pay over to such Successor Trustee the monies and proper-ties then constituting the Master Trust. Any successor Trustee shall have all the rights, powers, duties and obligations herein granted to the original Trustee.

6.02 Exoneration from Bond. No bond or other security shall be exacted or required of any Trustee or Successor Trustee appointed pursuant to this Agreement.

6.03 Resignation. The Trustee or any Successor Trustee hereof may resign and be relieved as Trustee at any time without prior application to or approval by or order of any court by a duly acknowledged instrument, which shall be delivered to the company by.the Trustee no

b

~19~ ;

l i

less than sixty (60) days prior to the effective date of ;

i the Trustee's resignation or upon such shorter notice as may be acceptable to the company. If for any reason the ;

company cannot or does not act in the event of the resignation of the Trustee, the Trustec may apply to a court of competent jurisdiction for the appointment of a ;

Successor Trustee.

6.04 Transactions With Third Parties. No person or ,

organization dealing with the Trustee hereunder shall be required to inquire into or to investigate the person's or -

organization's authority for entering into any transaction ,

or to see to the~ application of the proceeds of any such transaction.

6.05 Accounts and Reports. The Trustee shall keep accurate and detailed accounts of all investments, receipts and disbursements and other transactions hereunder in accordance with specifications of the company, and all accounts, books-and records relating thereto shall be open to inspection and audit at all reasonable times by any person designated by the company.

-Within 30 days following the close of each month, the Trustee shall file with the company a written report setting forth all investments, receipts and disbursements and other transactions effected by them during the month and containing an exact description of all cash and h

. - , . - . - - . _ . _._. _ . _ _ _ _ _ _ _ . . _ . . _ _ _ _ _ . . _ . . _ . . _ _ _ , . _ _ _ . _ . . . . . _ ~

t securities contributed, purchased, sold or distributed and the cost or not proceeds of sale, and showing all cash, !

and securities and other investments held at the end of such month and the cost and fair market value of each item thereof as carried on the books of the Trustee. Such accounts and reports shall be based on the accrual.nethod ,

of reporting income and expenses and shall show the 1

portion of the assets applicable to each Fund and also shall identify all disbursements from each Fund made to pay Decommissioning costs or Administrative Expenses.

Upon the expiration of two (2) years from the date of the filing of such written reports with the company, the >

Trustee shall be forever released and discharged from all liability or accountability to anyone with respect to all l

l acts and transactions shown in such written report, except such acts or transactions as to which the company shall take exception by notice to the Trustee within such two-year period; provided however, that nothing contained herein shall be deemed to relieve the Trustee of any liability which miy be imposed pursuant to section 6.07 hereof. In the event that any exception taken by the ;

company cannot be amicably adjusted, the company may file the written report in a court having jurisdiction and upon the audit thereof any and all such exceptions which may

i 1

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l not have been amicably settled shall be heard and adjudicated.

All records and accounts maintained by the Trustee with respect to the Master Trust shall be preserved for j such period as may be required under any applicable law. j Upon the expiration of any such required retention period, i

the Trustee shall have the right to destroy such records and accounts after first notifying the company in writing of its intention and transferring to the Company any records and accounts requested by the Company. j 6.06 Tax Returns and Other Reports. The Trustee shall prepara and timely file all Federal, state and local income or franchise tax returns or other reports (including estimated tax returns and information returns) ,

l l as may be required from time to time with respect to the )

Funds, and the Company agrees to provide the Trustee in a l timely manner with any information within its possession, and to cause the Investment Manager (s) to provide the Trustee with any information in its possession, which is necessary to such filings. The Trustee shall prepare and )

submit to the company in a timely manner all information requested by the Company regarding the Funds required to be included in the company's Federal, state and local income tax returns or other reports (including estimated tax returns and information returns). Subject to the l

1 limitations conteined in Section 8.02 hereof, the Trustee may employ independent certified public accountants or ;

other tax counsel to prepare or review such returns and i reports. The Trustee agrees to sign any tax returns or other reports where required by law to do so or arising out of the Trustee's responsibilities hereunder, and to l remit from the Master Trust appropriate payments or [

deposits of Federal, state and local income or franchise taxes directly to the taxing agencies or authorized ;

i depositaries in a timely manner. Notwithstanding Section

6.07 hereof, any interest or penalty charges assessed l-l against the Funds pursuant to Chapters 67 or 68 of the '

l Code, or pursuant to any similar state or local tax provisions, as a result of the Trustee's failure to comply with this section 6.06 shall be borne by the Trustee and not the Funds. The Trustee agrees to notify the Company in writing within ten days of the commennement of any I audit of any Fund's Federal, state, or local tax returns, and to participate with the company on behalf of the Funds in sush audits and related inquiries. The Trustee further agrees to provide the company with any additional l information in its possession regarding the Funds which may be requested by the company to be furnished in an l

audit of the Company's Federal, state, or local tax returns.

l l

1 I

f 23-I 6.07 Liability. The Trustee shell not be liable 1 for any acts, omissions or defaults of any agent (other j than its officers and amployees) or depository appointed

)

or selected with reasonable care. The Trustee shall be ,

liable only for such Trustee's own acts or omissions (and l those of its officers and employees) occasioned by the willfulness or negligence of such Trustee (or that of its officers and employees).

Notwithstanding the foregoing, the Trustee (and not l

the Master Trust) shall be liable for any tax imposed pursuant to section 4951 of the code (or any applicable i

successor provision) as such section is made applicable to the Master Trust, the Qualified Funds, or the Trustee.

VII. INVESTMENTS 7.01 Appointment of Investment Manager (s).

Initially, the Trustee shall have investment responsibility for this Master Trust. However, the , t committee may appoint one or more Investment Managers to I

direct the investment of all or part of the Master Trust.

Whenever such appointment is made, the committee shall provide written notice of such appointment to the Trustee, l-shall specify the portion of the Master Trust with respect to which an Investment Manager has been designated, and ,

shall instruct the Trustee to segregate into an Investment Account those assets with respect to which that specific

p, Investment Manager has been designated. An Investment Manager shall certify in writing to the Trustee that it is qualified to act in the capacity provided under an Invest-ment Manager Agreement, shall accept its appointment as Investment Manager, shall certify the identity of the person or persons authorized to give instructions or directions to the Trustee on its behalf, including speci-men signatures, e d shall undertake to perform the duties imposed on it under an Investment Manager Agreement. The Trustee may continue to rely upon all cuch certifications unless otherwise notified in writing by the Company or an Investment Manager, as the case may be. Notwithstanding the appoints.ont of an Investment Manager to direct the investment of an Investment Account, the Trustee, through its computerized monitoring system and otherwise, shall review all investment instructions from the Investment Manager and shall carry out or.ly those investment instructions which would not cause a violation of section 468A of the Code (or any successor provision) or the regulations promulgated thereunder.

7.02 Direction by Investment Manager (s). An Investment Manager designated by the Committee to manage an Investment Account shall have authority to manage and to direct the acquisition and disposition of the assets of the Master Trust, or a portion thereof, as the case may i

.25-be, and the Trustee shall exercise the powers set forth in Article IX hereof only when, if, and in the manner directed by the Company in writing. An Investment Manager shall have the power and authority, exercisable in its sole discretion at any_ time, and from time to time, to issue and place orders-for the purchase or sale of portfolio securities directly with qualified brokers or dealers. Except as otherwise provided in Section 7.01, the Trustee, upon proper notification from an Investment Manager (such notification haing agreed to by the Trustee and Investment Manager), shall settle the transactions in accordance with the appropriate trading authorize.tions.

Written notification of the issuance of each such authorization shall be given promptly to the Trustee by an Investment Manager, and such Investment Manager shall cause the settlement of such transaction to be confirmed '

in writing to the _ Trustee, and to the Company, by the broker or dealer. Except as otherwise provided in Section 7.01, such'notificatiotrshall be proper authority for the .

Trustee to pay for portfolio securities purch2 sed against receipt thereof and to deliver portfolio securities sold ,

against payment therefor, as the case may be. All directions to the Trustee by an Investment Manager shall be in writing and shall be signed by a person who has been certified by such Investment Manager pursuant to Section ,

,v- ..

l 7.01 hereof as authorized to give inctructions or directions to the Trustee.

Should an Investment Manager at any time elect to place security transactions directly with a broker or dealer, the Trustee shall not recognize such transaction unless and until it has received instructions or confirma-tion of such fact from an Investment Manager. Should an Investment Manager direct the Trustee to utilize the services of any person with regard to the assets under its management or control, such instructions shall be in writing and shall specifically set forth the actions to be taken by the Trustee as to such services. In the event that an Investment Manager places security transactions directly or directs the utilization of a service, such Investment Manager shall be solely responsible for_the acts of such persons.

The authority of an Investment Manager and the terms and conditions of the appointment and retention of afi Investment Manager (s) shall be the responsibility solely of the committee,-and the Trustee shall not be deemed to be.a party or to have any obligations under any agreement with an Investment Manager.

VIII. TRUSTEE'S GENERAL POWERS The Trustee shall have, with respect to the Master

-Trust, the following powers, all of which powers are I

~27-

'9 fiduciary powers to be exercised in a fiduciary capacity and in the best interests of this Master Trust and the purposes hereof, namely:

8.01 Extension of Obligations and Negotiation of Claims. To renew or extend the time of payment of any obligation, secured or unsecured, payable to or by this Master Trust, for as long a period or periods of time and on such terms as the Trustee shall determine, and to adjust, settle, compromise and arbitrate claims or demands in favor of or against this Master Trust, including claims for taxes, upon such terms as the Trustee may deem advisable, subject to the limitations contained in Section 9.05 (regarding self-dealing).

8.02 Registration of Securities. To hold any stocks, bonds, securities, or other property in the name of a nominee, in a street name, or by other title-holding device, without indication of trust.

zg 8.03 Borrowing. To borrow money in such amounts and upon such terms as the company may authorize in writing as necessary to carry out the purposes of this Master Trust, and to pledge any securities or other property for the r repayment of any such loan as the Company may direct.

8.04 Retention and Removal of Professional and

- Employee Services. Upon the Company's written approval, Ik to employ, retain and remove attorneys, accountants, c

M

custodians, engineers, contractors, clerks and agents'as necessary and proper for the administration of this Master Trust.

8.05 Powers of Trustee to Continue Until Final Distribution. To exercise any of such powers after the date on which the principal and income of the Master Trust shall have become distributable and until such time as the entire principal of, and income from, the Master Trust shall have been actually distributed by the Trustee. It is intended that distribution of the Master Trust or a Fund will occur as soon as possible upon termination of the Master Trust or Fund, subject, however, to the limitations contained in Article V hereof.

8.06 Discretion in Exercise of Powers. To do any and all other acts which the Trustee shall deem proper to effectuate the powers specifically conferred upon it by this Agreement; provided, however, that the Trustee may not do any act or participate in any transaction which would:

(1) Disqualify any Qualified Fund from the application of section 468A (or any applicable successor provision) of the Code; (2) Contravene any provision of this Agreement; or

t l'l .

L (3) Violate the' terms and conditions of any L

L instructions provided in a written statement of the Company. .

IX. TRUSTEE'S INVESTMENT POWERS The Trustee recognizes the authority of an Investment Manager to manage, invest, 'nvest the assets in an- ,

i Investment Account pursuant . vestment Manager Agreement and as provided in Ar' . VII of this Agree-ment, and the Trustee agrees to cooper. ' with any Investment Manager as deemed necessary to accomplish these L

tasks.. Notwithstanding the foregoing, to the extent that the' assets of the Master Trust have not been-allocated to an Investment Account under the investment control of an

' Investment Manager, and to the extent the assets of the

, 4 J

l Master Trust have been allocated to an Investment Account L

but have not been invested by an Investment Manager, upon -j the written instructions of the Committee, the Trustee l

L shall have the following investment powers all of which j

] are fiduciary powers to be executed in a fiduciary capacity and-in the best interest of this Master Trust and l the purposes hereof, namely: ,

l 9.01 Preservation of Principal. To hold, manage, I t-and invest the assets of this Master Trust in a manner designed to maximize and preserve the income and principal of this Master Trust for the purposes of this Master Trust u

h 1

' including the duty to ensure that all such assets are invested at all times, except as otherwise provided in Sectionn 4.04, 5.04, 9.02 and 9.03.

9.02 -Investment of Qualified Funds. To invest and reinvest all or part of the Qualified Funds, including any undistributed income therefrom; provided, however that no such investment or reinvestment of the Qualified FundsLaay be made by the Trustee:

(1) Unless such investment is permitted to be made by code sections 501(c) (21) (B) (ii) and 468A(e) (4) (C), the regulations thereunder, and any applicable successor provisions; or (2) In any bank, savings and loan association, or other financial institution whose deposits are not-insured by the Federal Deposit Insurance Corporation, the Federal Savings:& Loan Insurance Corporation, or other comparable Federal agency; or (3) Which would contravene ar. instructiores issued by the-Committee or the Company.

In ali cases, however, the total investments by the Trustee must be sufficiently liquid to enable the Master Trust to fulfill the purposes of the Master Trust and to satisfy obligations of the Master Trust as such obligations become due. Nothing in this Section 9.02

-a

+ c .

shall be construed as authorizing the Trustee to carry.on

-any business or to divide the gains therefrom.

9.03 Investment of Nonqualified Funds. To invest and reinvest all or any part of the Nonqualified Funds, including any undistributed income therefrom, as directed by the. company.

9.04 Cash Sweep Investments. To the extent that the assets of the Master Trust have not been invested by an Investment Manager on any given day, to invest such uninvested assets of the Master Trust as the' Company may direct in writing, subject to the limitations contained in Section 9.05 hereof (regarding self-dealing).

9.05 Management of Master Trust. To sell, exchange, partition, or otherwise dispose of all or any part of the Master Trust at public or private sale, without prior. application to, or approval by,_or order of

)

any, court, upon such terms and in such' manner and at such prices as the Trustee shall determine; to modify, renew or extend bonds, notes or other obligations or any install-ment of principal thereof or any interest due thereon and to waive any defaults in the performance of the terms and conditions thereof; and to execute and deliver any and all-

{$5 bills of sale, assignments, bonds-or other instruments in

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- connection with these powers, all at sucn times, in such j manner and upon such terms and conditions as the Trustee E

'f.... . . . . . . . . . , _ . . . . . . . . . . . . . . , . . - .... -- . . . . . . . . . .

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-3 2 -

.may deem expedient to accomplish the purposes of this Master Trust as set forth in Section 2.01.

Notwithstanding anything contained in this Agreement to the contrary, the Trustee may not authorize or carry

-out any sale, exchange or other transaction which would constitute an act of "self-dealing" within the meaning of section 4951 of the Code, as such section is made applicable to the Qualified Funds by section 468A(e)(5) of the code, any. regulations thereunder, and any applicabh successor provision.

X. MISCELLANEOUS 10.01 Headings. The section headings set forth in this Agreement and the Table of Contents are inserted for convenience of reference only and shall be disregarded in the construction or interpretation of any of the provisions of this Agreement.

10.02 Particular Words. Any word contained in the text of~this Agreement shall be read as the singular or plural and as the masculine, feminine, or neuter as may-be applicable or permissible in the particular context.

Unless otherwise specifically stated, the word " person" shall be taken to mean and include an individual, partnership, association, trust, company, or corporation.

- -- _ ._.m

^ .i 4 i

10.03' Severability of Provisions. If any provision of this Agreement or its application to any-person or entity.or in any circumstances shall be invalid and unenforceable, the application of such provision to.

persons and in-circumstances other than those as to which-it is invalid or unenforceable and the other provisions of this Agreement, shall not be affected.by such invalidity or unenforceability.

10.04 . Delivery of Notices Under Agreement. Any notice required by this Agreement to be given to the company or the Trustee shall be deemed to have been proper 1v given when mailed, postage prepaid, by registered or cer ified mail, to the person to be notified as set-

forth below:

If to the Company:

Niagara Mohawk Power Corporation 300 Erie Boulevard West

-Syracuse,.New York 13202 Attention: Mr. Timothy M. Barrett .

If to the Trustee:

Mellon Bank, N.A.

One Mellon Bank Center Pittsburgh, Pennsylvania 15258-0001 Attention: Mr. Vince V. Jands The. company or the Trustee may1 change-the above address by delivering notice thereof in writing to tne other party.

10.05 Alterations and Amendments. The Trustee and the company understand and agree that modifications or l

amendments may be required to this Agreement from' time to time to effectuate the purpose of this Master Trust and to comply with any order, any changes in tax laws, regulations or rulings-(whether published or private) of the Service and any similar state taxing authority, and any other changes in the laws (including-final regulations and published or private rulings) applicable to the Company or the Plants. This Agreement may be altered or amended to the extent necessary or advisable to effectuate such purposes or to-comply with such. order or changes.

This Agreement also may be altered or amended to reflect a transfer, exchange, or other disposition of the Plants (including, without limitation, the designation of additional beneficiaries to.this Agreement) or to encompass decommissioning Contributions with respect to

'other nuclear power plants owned now or in the future by the Company. Any alteration or amendment to this -

Agreement must be in writing and signed by the Company and the Trustee. -The Trustee shall have no duty to inquire or make any investigation as to whether any proposed amendment, modification or alteration is consistent with this Section 10.05, but the Trustee may decline to adopt such amendment, modification, or alteration upon the advice of legal counsel for the Trustee.

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10.06 Successors and Assigns. Subject to the provisions of Sections 2.09 and 6.01, this Agreement shall be binding upon and inure to the benefit of the company, the Trustee and their respective successors, assigns, personal representatives, executors and heirs.-

10.07- Governing Law. The Master Trust is a New York trust, and all questions pertaining to its validity, construction,.and administration shall be determined in accordance with the laws of the State of New York to the extent not preempted by Federal law.

10.08 Accounting Year. The Master Trust shall operate'on an accounting year which coincides with the calendar year, January 1 through December 31.

10.09 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

1 e

f

. IN WITNESS WHEREOF, the Company and the Trustee have set their hands and seals to this Agreement as of the -

day and year first above written.

NIAGARA MOHAWK' POWER CORPORATION By A lstant Treasurer Attest:- d. d U Ass (s) int Sectetar(j MELLON BANK,.N.A.

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By (AJ Al ,

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Attest:

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STATE OF NEW YORK ) 1

) ss:

COUNTY-OF ONONDAGA )

I, Judith M. Uva , a Notary Public in and for the aforesaid jurisdiction, do hereby-certify that Arthur W. Roos and _ John 3. Hennigan , who are personally known to me to be the persons who executed the ,

foregoing Master Decommissioning Trust Agreement, personally I appeared before me in the aforesaid jurisdiction, and as Assistant Treasurer and Assistant Secretary of Niagara

~ Mohawk Power Corporation and by virtue of the power and authority vested in them, acknowledged the same to be the act and deed of Niagara Mohawk Power Corporation and they executed the same as such.

Given under my hand and seal this 14th day of February,.1990.

(NOTARIAL SEAL) 3: WD D NotaryPublic,StateofNewYork l My commission expires in/u /en .

JUDITH M. UVA w ., ruwe i. ii sm. . w.. =

7

. us .. /c - U -QusHhed in Onondesa County No. 451Yo 4, c....n...

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STATE OF PENNSYLVANIA ) ,

, ) ss:

' COUNTY OF ALLEGHENY ) ;

Denise A. Fuhrer , a Notary Public in and for I,

the aforesaid jurisdiction, do hereby certify that cue.ct awe mmh and EMIL KLECMEp who are personally known to me l to be the persons who executed the foregoing Master l Decommissioning Trust Agreement, personally appeared before me in the aforesaid jurisdiction, and arl Vid E PEEC DEArr 8 and TutusT OmGRof Mellon- Bank, N. A. - and by virtue of the -l power and authority vested in them, acknowledged the same to l be the act and deed of H no t ou Pats u 4 N.A. and they I executed the same as such.

Given under my hand and seal this IST" day of March, 1990.

(NOTARIAL SEAL]

L O,L D.An Notary Public, State of Pennsylvania' l l My commission expires __ . _ _ NOT AA AL ;E AL w~a r ur.nc.n,4CIARY PU5dC '

FiTTSSU%H,t LLE0HENYCOUNTY MY COP.' CSO'4 ExF;;E.e. 0E; 3, tm -

( Memte, Penr4)'cta Assxiaton of No xios L l l

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e Exhibit A CERTIFICATE NO.

The undersigned Authorized Representative of Niagara Mohawk Power Corporation (Company), a New York corporanton being duly authorized and empowered to execute and deliter

-this certificate, hereby certifies to the Trustee of the Niagara Mohawk Power Corporation Master Decommissioning Trust (Master Trust), pursuant to Article IV of that certain Master Decommissioning Trust Agreement, dated March __, 1990 (Agreement), between the Trustee and the Company as follows:

(1) Attachment 1 hereto sets forth the amounts either invoiced to, or incurred by, or to be incurred by the company or the Funds that are/will be due and owing to each payee =

listed (Payees) fort (a) goods or services provided in connection with decommissioning the Planti or-(b) administrative costs of the Manter Trust (excluding costs arising:from the .

Company's furnishing of goods,. services, or facilities to the Master Truet and excluding compensation which is excessive or unnecescary to carry out the purposes of the Master Trust) as evidenced by the invoice, contracts or agreements attached hereto; (2) all such amounts due and owing to the Payees constitute Decommissioning Costs or Administrative Expenses as described in Article IV of the Agreement; (3) all such amounts may be paid from the Master Trust without causing the Qualified Fund (s) to become disqualified from the application of Code section 468A'or any applicable successor provision; and

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(4) . all conditions precedent to the making of this withdrawal and disbursement set forth in any agreement between such Payees and the Company, if applicable, have been fulfilled.

Accordingly, request'is hereby made that the Trustee provide for the withdrawal of $ from the (Nine

Mile Unit One/ Hine Mile Unit Two)= (Qualified Fund /Nonquali-fled Fund) (Funds specified in the attached schedule) in order to permit payment of such sum to be made to the Payees. You are further requested to disburse such sum,

-once withdrawn, directly to such Payees in the following manner: (CHECK / WIRE TRANSFER / ) on or before

, 19_.

WITNESS my hand this day of ,

19_ .

NIAGARA MOHA" POWER CORPORATION By. ,,

Authorized-Representative

4 i

EXHIBIT D

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~ - NIAGARA MOHAWK POWER CORPORATION 41% OWNERSHIP SHARE NINE MIE POINT UNIT 1WO EXHRNAL SINKING 'IRUST FUND DEPOSIT SOEDUE fS000)_

NIAGARA MOHAWK POWER CORPORATION'S 41% SHARE ONLY:

Financial assurance amount at year end 1989 (from EXHIBIT A): $ 74,008 A.

B. Fir ancial assurance amount escalated at an annual inflation rate of a% to the end of the operating license life October,2026: 5446,353 = ($74,007,720) x [(1 + .05)^36.83 years]

C. The decommissioning amount Niagara Mohawk anticipates funding by October, 2:526. This fund balance is based on the Company's current, but unresolved rate case proceeding (N.Y.S. PSC Case Nos. 89-E-152; 89-E-153), and the depositing schedule as described on EXHIBIT D 5452,321 = (Qualified balance of $418,827 + Non-qualified Page 2 of 2: balance of $33,494, see EXHIBIT D, Page 2 of 2)

Annual inflation rate of 5% per DRI/McGraw-Hill U.S. Review, April,1989, Table 2, Page 44, Implicit Price Deflator in se -

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BEFORE THE UNITED STATES NUCLEAR REGUIRIORY COMMISSION ROCHESTER GAS AND ELECTRIC CORPORATION ) Docket No.

DECOMMISSIONING REPORT ROCHESTER GAS AND ELECTRIC CORPORATION (Company) hereby submits this Decommissioning Report in compliance with 10 C.F.R.

59. 50.33 (k) and 50.75(b) .

1. The Company owns 14% undivided interest in the Nine Mile Point Unit 2 Nuclear Station (Unit).

2. The Company hereby certifies that financial assurance'for decommissioning the company's interest in the Unit is provided in the amount of $25,276,553. The calculation of this amount is set forth in Exhibit A and complies with the formula set forth in 10 C.F.R. 550.75(c).

3. The method by which the Company will provide financial assurance for decommissioning the Unit will be by establishment of an external sinking fund in which deposits will be made at least annually.

4. Attached as Exhibit B to this Decommissioning Report is a copy of the executed Master Decommissioning Trust Agreement between the Company and Mellon Bank, N. A. -(" Trustee") for the purpose of holding monies for decommissioning of the Plant.

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5. Attached as Exhibit c' to-this Decommissioning Report is a .

schedule'for implementing the method of providing financial assurance

't for decommissioning the Unit.

ROCHESTER GA8 AND ELECTRIC CORPORATION By: M -+~

Robert C. Hdnderson Senior Vice President,. Controller and Chief Financial Officer Dated: June 27, 1990

EIRIBIT.A Calculation of Minimum Financial Assurance Amount mina Mile Point Unit 2 Nuclear Station New York Tecions Labor (1) = Northeast Energy (EF= Mid-Atlantic Waste BurLal'(B) = South Carolina

For BWR Unit L=- 1.2261 E= 0.8767 B= 1.9881 BWR Escalation Factor =

0.65(1.2261) + 0.13 (0.8767) + 0.22(1.9881) = 1.3483.

Base haount for BWR between 1200 MWt and 3400 MWt =

$(104 + 0.009P) million; (P = power level of unit in megawatts thermal =

3323 MWt).

$(104 + 0.009(3323) ) million = $133,907,000.

$133,907,000

14%' ownership-interest = '< & 746,980.

Escalated Amount for units

$18,746,980 X 1.3483 = $25,276,553.

We assume South Carolina is used for waste burial as it is the closest site to the Unit.

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b EXHIBIT B l

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ROCHESTER GAS AND ELECTRIC CORPORATION MASTER DECOMMISSIONING TRUST AGREEMENT .i a '

FOR GINNA NUCLEAR PLANT NINE MILE POINT NUCLEAR STATION UNIT TWO i

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TABLE OF CONTENTS l

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ARTICLE I. DEFINITIONS. I 1

1.01 Definitions................................... 3 ARTICLE II. MASTER TRUST PURPOSES, NAME AND FUNDS....... 7 ;

2.01 Master Trutt Purposes......................-. 7

'2.02 Es t abli shmen t o f Mas te r Trus t . . . . . . .. . . . . . . . . 7 2.03 Acceptance of Appointment................... 8 2.04 Name of Master. Trust........................ 8 2 2.05' Funds of Master Trust....................... 8 2.06 Designation of Funds........................ 8 ,

2.07 Duties of Authorized Representatives........ 1 f: 2.08 No Transferability of Master Trust......... 10

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l' ARTICLE III. CONTRIBUTIONS AND INCOME................... 10 3.01 Initial Contribution....................... 10 ,

3.02 Additional Contributions................... 10 i

3.03 Alloca tion o f . Ne t Income . . . . . . . . . . . . . . . . . . . 10 -

3.04 Subsequent Adjustments..................... 11L o

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ARTICLE IV. DISTRIBUTIONS, ........................... 12 4.01 Payment of Decommissioning Costs........... 12 4.02 Payment of Expenses of Administration. . . . . .12 4.03' Fees....................................... 13 4.04 Liquidation of Investments................. 13' ARTICLE V. TERMINATION................................ 13 5.01 Termination of Funds.and Master Trust

'=n in Genera 1............................... 13 r 4 5.02 Termination of' Qualified Funds Upon Disqua11fication.......................... 14 L 5.03 Termination of Qualified Funds On Sale of Plants........................... 14 5.04 Distribution of Master' Trust and Funds Upon-Termination......................... 15 i

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r TABLE OF CONTENTS (Continued)

Ea9A ARTICLE VI. TRUSTEES....................2 ................ 15 6.01 Designation and Qualification of Successor Trustee (s)....................... 15 6.02 Exoneration from Bond........................ 17 6.03 Resignation.................................. 17 6.04 Accounts and Reports......................... 17 6.05 Tax Returns and Other Reports................ 19 6.06 Liability.................................... 21 6.07 Indemnity.................................... 21 ARTICLE VII. INVESTMENTS.................................. 21 7.01 Appointment of Investment Manager (s)......... 21 7.02 Direction by InvestmentLManager(s)........... 22 ARTICLE VIII. TRUSTEE'S GENERAL POWERS..................... 25 8.01 Extension of Obligations and Negotiation of Claims.................................. 25 8.02 Registration of Securities................... 25 8.03 Borrowing.................................... 25 8.04 Retention and Removal of Professional and Employee Services..................-.... 26 8.05- Powers of Trustee to Continue Until Final Distribution......................... 26 8.06 Discretion in Exercise of Powers............. 26

. ARTICLE IX. COMPANY'S INVESTMENT POWERS.................. 27 9.01 Company Investment Direction..........-....... 27 ARTICLE X. MISCELLANEOUS................................ 28 10.01 Headings..................................... 28 10.02 Particular Words............................. 28 10.03 -Severability of Provisions...-................ 28 10.04 Delivery of Notices Under Agreement.......... 28 10.05 Alterations and Amendments................... 29 a

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4 e c : TABLE OF' CONTENTS (Continued)-

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' ARTICLE X. -MISCELLANEOUS. (Continued) 10.06 Successors and' Assigns....................... 30 10.07 Governing Law................................ 30-10.08 Accounting Year.............................. 30 10.09 Counterparts................................. 30

-EXHIBIT A. CERTIFICATE.

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e MASTER DECOMMISSIONING TRUST AGREEMENT

-AGREEMENT made as of the 9th day of March, 1990, by and between Rocaester Gas and Electric Corporation, a New York corporation-(" Company"), ans Mellon Bank, N.A., a national banking association having trust powers (" Trustee") and having its principal office at One Mellon Bank Center, Pittsburgh,_PA 15258.

RECITALS OF_THE COMPANY WHEREAS, the Company is the sole owner of the Ginna Nuclear Plant ("Ginna"); and WHEREAS, the Company is the owner of a fourteen percent:(14%) undivided interest in Nine Mile Point Nuclear Station Unit Two ("Nine Mile Two") (Ginna and Nine Mile Two are collectively referred to as the " Plants"); and WHEREAS, the Company is subject to regulation by the Nr. York State Public Service Commissica ("PSC"),.en agency of

.the State of New York-and the Nuclear Regulatory Commission

("NRC"), an agency of-the United' States government; and

, WHEREAS, pursuant to section 468A of the Internal Revenue Code of 1986 (" Code"), certain Federal income tax-benefits are available to the Company by creating-and making contributions to qualified nuclear decommissioning funds; and WHEREAS, the Company wishes to establish both qualified nuclear decommissioning funds and nonqualified nuclear decommissioning funds to hold monies for i~

decommissioning the Plants; and

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WHEREAS, the Company wishes to establish a taster Trust for the collective investment of the assets of the qualified and nonqualified nuclear decommissioning funds for the Plants, whereir. each Fund shall constitute a separate trust under the Master Trust; and WHEREAS, the assets of each of the qualified and nonqualified nuclear decommissioning funds shall be held under this Mauter Trust for the benefit of such Funds.

RECITALS _0E_TRUSIEE WHEREAS, Mellon Bank, N.A. (" Trustee"), is a national banking association with trust powers; and WHEREAS, the Trustee is willing to serve as trustee to the Master Trust on the terms and conditions herein set forth. i NOW, THEREFORE, in consideration of the mutual -

promises herein contained, the Company hereby agrees to deliver to the Trustee and the Trustee hereby agrees to receive contributions to the Master Trust beginning on the date first written above; and !

TO MAVE AND TO HOLD such assets; and TO INVEST AND REINVEST the assets of the Master Trust as provided herein; and TO PAY OR DISTRIBUTE from the Master Trust as provided herein; W

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IN TRUST NEVERTHELESS, for the uses and purposes and upon the terms and conditionse as hereinafter set forth. ,

I. DIElRIIlONS '

1.01 Definitions. As used in this Master Decommissioning Trust Agreement, the following terms shall have the following meanings:

(1) " Agreement" shall mean this Master Decommissioning Trust Agreement as the same may be amended, l modified, or supplemented from time to time. ,

(2) " Authorized Representative" shall include the persons designated pursuant to Section 2.07 hereof.

(3) " Certificate" shall mean a document properly completed and executed by an Authorized Representative of the Company pursuant to which the Authorized Representative officially requests the Trur, tee to take the specified action or certifies to the facts stated therein. >

(4) " Code" shall mean the Internal Revenue Code of '

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1986, as the sama may be amended from time to time.

(5) " Committee" shall mean the Nuclear Decommissioning Committee established by the Company consisting of three or more individuals appointed by the Company. The Company has empowered the Committee to direct the in.'estment management of all assets of the Master Trust and perform all

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duties attendant thereto, including the appointment of trustees and investment managere (which may include the Trustee) and the execution of whatever cont acts, agreements, or other documents, as it deems necessary to manage and invest the

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assets. Each member of the Committee shall serve at the ,

t Company's discretion and the Company shall notify the Trustee in a written statement signed by an AJthorized Representative of the Company of all appointments and replacements of '

Committee members.

(6) " Company" shall mean Rochester Gas and Electric Corporation.

(7) " Contribution" shall mean any contribution, cash ;

or otherwise, made to the Funds.

(8). " Decommissioning Costs" shall mean the expenses '

incurred in decommissioning the Plants.

(9) " Excess Contribution" shall have the meaning set forth in Section 3.04 hereof.

(10) " Fund" shall mean any one of the Qualified or Nonqualified Funds. '

(11) " Funds" shall mean the. Qualified Funds and the ,

Nonqualified Funds, collectively.

(12) "Ginna" shall mean the Company's Ginna Nuclear

Plant.

(13) "Ginna Nonqualified Fund" shall mean the fund consisting of contributions by the Company for decommissioning

I Ginna which are not deposited in the Ginna Qualified Fund plus -

eatnings and appreciation thereon. .

(14) "Ginna Ocalified rund" shall mean the fund ;

consisting of Cont 11butions pursuant to Section 468A of the Code and any applicable successor provisions and regulations thereunder by the Company for decommissioning Ginna plus ,

earningt and appreciation thereon which contributions are specified in a Schedule of Ruling Amounts with respect to Gir.na.

(15) " Investment Account" shall mean an account established by the Trustee pursuant to St>ction 7.01 hereof.

(16)

" Investment Manager (s)" shall mean the fiduciary specified in an Investment Manager Agreement (s), including any ,

employee of the Company or its affiliated companies.

()7) " Investment Manager Agreement (s')" shall mean an agreement (s) between the Company and an Investment Manager (s) selected by the Company which agreement governs the investment i

E management of all or a portion of the Trust.

(18) " Master Trust" shall consist of the ;

i Contributions to the runds by the Company pursuant to this ,

Agreement together with the proceeds and reinvestment thereof.

(19) "Nine Mile Two" shall mean the Company's fourteen percent (14%) undivided ownership interest in Nine Mile Nuclear Station Unit Two.

(20) "Nine Mile Two Nonqualified Fund" shall mean the fund consisting of Contributions by the Company for ,

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i decommissioning Nine Mile Two which are not deposited in the Nine Mile Two Qualified Fund plus earnings and appreciation thereon.

(21) "Nine Mile Two Qualified Fund" shall mean the fund consisting of Contributions pursuant to section 468A of the Code-and any applicable successor provisions and tegulations thereunder, by the Company for decommissioning Nine Mile Two plus earnings and appreciation thereon, which Contributions are specified in a Schedule of Ruling Amounts with respect to Nine Mile Two.

(22) "Nonqualified Funds" shall mean the Ginna Nonqualified Fund and the Nine Mile Two Nonqualified Fund, collectively.

(23) "NRC" shall mean the Nuclear Regulatory Commission, as defined in 42 U.S.C. $ 5841.

(24) " Order" shall mean any order relating to decommissioning the Plants issued by the PSC or the NRC.

(25) " Permitted Investments" roeans investments which are authorized pursuant to section 468A of the Code and any applicable successor provisions and regulations thereunder.

(26) "PSC" shall mean the New York State Public Service. Commission, as defined in N.Y. Pub. Ser. Law S 1, as neg.

(27) " Plants" shall mean Ginna and Nine Mile Two, collectively.

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(28) " Qualified Funds" shall mean the Ginna Qualified Fund and the Nine Mile Two Qualified Fund, collectively.

(29) " Schedule of Ruling Amounts" shall have the meaning set forth in section 468A(d)(1) of the Code. I (30) " Service" shall mean the Internal Revenue i Service.

(31) " Trustee" shall mean Mellon Bank, N.A. or any successor appointed pursuant to Section 6.01 hereof.

II. MASTER _ TRUST _P_U.B PDSESa_NAME_AND_EUNDS .

2.01 Master Trust Putpas.es. The exclusive purposes of this Master Trust are to hold funds for the decommissioning of the Plants, to constitute qualified and nonqualified nuclear '

decommissioning reserve funds for the Plants and to comply with regulatory provisions relating to decommissioning or the tax treatment of decommissioning funds and costs.

2.02 EELahlishment o f_ Matte r Tru s t . By Execution of this Agreement, the Compeay:

(a) establishes the Master Trust which shall be -

effective as of March 9, 1990, and which shall consist of such Contributions as may be delivered to the Trustee by the Company

-for the Funds and earnings and appreciation thereon; (b) establishes the Funds, each of which shall constitute a trust consisting of such Contributions as may be l

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I delivered to the Trustee by the Company as designated for such l Fund and earnings and appreciation thereon; and I l

(c) appoints Mellon Bank, N.A. as Trustee of the i Master Trust, j i

2.03 Acsseplance of Apprinttrent. Upon the terms and conditions herein set forth, Mellon Bank, N.A. accepts the appointment as Trustee of this Master Trust. The Trustet shall receive any Contributions deposited with it by the Company and .

l shall hold, manage, invest and administer the Funds, in accordance with this Agreement.

2.04 NAme of Matter Trust. The Contributions received by the Trustee from the Company together with the proceeds, reinvestments and-appreciation thereof shall constitute the " Rochester Gas and Electric Corporation Master ;

Decommissioning Trust."

2.05 Funds of Master Trust. The Master Trust shall be divided by the Trustee into the Fund (s) as follows:

(a) Ginna Qua11 fled Fund; (b) Ginna Nonqualified Fund; (c) Nine Mile Two Qualified Fund; ,

(d) Nine Mile Two Nonqualified Fund; The Trustee shall maintain separate records for each Fund.

2.06 Deaignation of Funda. Upon (i) the initial Contribution to the Master Trust as specified in Section 3.01; e -

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(ii) any addition to the Master Trust pursuant to Section 3.02; i (iii) any adjustment to the Funds pursuant to Section 3.04; or (iv) any withdrawal from the Master Trust for Decommissioning _

Costs pursuant to Section 4.02, the Company shall deliver a -

Certificate to the Trustee designating which Fund (s) are to be credited or debited for the amount of such Contribution, withdrawal, addition or adjustment, and the Trustee shall j credit or debit the rund(s) in accordance with such designation; p.tarided, haneter that if the Company f ails to designate the Fund (s) to which payment of administrative expenses is to.be debited, such payment shall be debited pro rata (based upon the fair market value of each Fund) among all of the Funds.

2.07 Dutles of Authorized Representatives. The t

Company has empowered the Nuclear Decommissioning Committee and their designees to act for the Company in all respects hereunder. The Committee may act as a body or may designate "

on,e or more Authorized Representative (s) or delegate (s) to perform the Cuties of the Company under this Trust. The Committee shall provide the Trustee with a written statement setting forth the names and specimen signatures of the l Authorized Representatives. The Authorized Representatives ,

shall provide the Trustee with a Certificate setting forth the names and specimen signatures of any delegate of an Authorized Representative.

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2.08 No Transferability of Master Trust. The interest of the Company in the Master Trust is not 1

transferable, whether voluntarily or involuntarily, by the )

Company nor subject to the claims of creditors of the Company provided, howevel, that any creditor of the Company as to which a Certificate for payment of decommissioning costs in the form of Exhibit A has been properly completed and submitted to the Trustee may assert a claim directly against the Master Trust in an amount not to exceed the amount specified in such Certificate.

1 III. CONTRIBUTIONS AND_INCQME 3.01 InititL. Contribution. Upon the establishment of this Master Trust on the date first written above, the Company j shall cause to be delivered to the Trustee an initial Contribution.

3.02 Additional Cantributiona. From time to time after the initial Contribution to the Master Trust and prior to the termination of this Master Trust, the Company may make, and the Trustee shall accept, additional Contributions to the Master Trust for the purposes set forth in this Master Trust, which contributions may be made to the Qualified Funds or to the Nonqualified Funds.

3.03 Allocation of Income. The Trustee may pool the as' sets of the Funds for investment purposes in accordance with v.

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l the written instructions of ti.a Authorized Representative, and, )

upon so doing, may treat each Fund so pooled as having received or accrued'a pro rata portion (based on the principal balances of the Funds so pooled) of the net income of the Master Trust (including appreciation) related to such pooled assets with

respect to the period during which they are pooled. The Trustee shall maintain such records as are necessary to reflect the allocation of income and losses among the Funds in l accordance with this Section 0.03.

3.04 Subsnquent_ Adjustments. The Trustee and the Company understand and agree that the Contributions made by the Company to a Qualified Fund from time to time may exceed the '

amount permitted to be paid into such Fund (s) pursuant to section 468A of the Code and any regulations thereunder, based upon changes in estimates, subsequent developments or any other event or occurrence which affects the calculation of.

decommissioning vosts, the regulatory or tax treatment of those costs, or the calculation of contributions'(" Excess Contribution"). Upon receipt of a Certificate setting forth the amount of the Excess Contribution to be transferred

(" Excess Assets') from a Fund and stating that such Excess L Contributions and any. earnings and appreciation thereon should be transferred to one or more of the other Funds as specified or paid to any person or entity, including but not limited to

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the Company, the Trustee shall transfer or pay such Excess Contributions, as the case may be, to the Fund (s), person, or entity specified in the Certificate.

The Trustee and the Company further understand and agree that a transfer of monies among the Qualified Funds and '

the Nonqualified Funds may be necessary to effectuate the purposes of this Master Trust. '

IV. DISTRIBUTIONS 4.01 PAylnent of Decongnisaloning_Casia. Upon receipt of a Certificate in the form of Exhibit A, the Trustee shall make payment of, or the reimbursement for, Decommissioning Costs to any person (including the Company) for goods provided or labor or other services rendered in connection with the L

decens .ssioning of the Plants.

4.02 Prinent of Expenses of Afuninistration. Upon receipt of a Certificate, the Trustee shall make payments of administrative costs (including taxes, reasonable out-of-pocket expenses and trustee's fees and investment manager'r fees) and other incidental expenses of the Master Trust including legal, accounting and actuarial expenses in connection with the formation, management, operation or termination of the Master Trust. All such administrative expenses and incidental expenses of the Master Trust shall be allocated proportionately i

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among the Funds (based on the principal balance of each Fund) unless otherwise directed by the Company. The Trustee shall !

maintain such records as are necessary to reflect the j allocation of costs and expenses in accordance with this i Section 4.02. l

- I 4.03 Eena. The Trustee shall receive as full compensation for all services pursuant to this Agreement those amounts specified in the fee schedule attached to this Agreement. Any fee schedule changes shall be effective on the first day of the month following six months prior written notice of any such change by the Trustee to the Company.

4.04 Lisuidatisn of Investments. At the directicn of the Company or any Investment Manager, the Trustee shall sell I

or liquidate such '.avestments of the Funds as may be specified. The proceeds of any such sale or liquidation shall be credited pro rata to the Fund or Funds to which such investments were credited prr to such sale or liquidation.

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V. IERMINATION L 5.01 Termination of Funds and Master Trust in :

GeneIA1. Each Fund established hereunder shall terminate upon the earlier of:

(i) the date specified as the date that such Fund shall terminate in a Certificate delivered to the Trustee;

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(ii) substantial completion of the nuclear decommissioning of the Plant to which it relates (as defined in Treasury Regulations promulgated under Code section 468A), as evidenced by delivery of a Certificate; or (iii) thanty-one (21) years after the death of the <

last survivor of each person who was'an officer of the Company or of the Company's .

affiliated companies on January 1, 1990 and each of their descendants born on or prior to January 1, 1990. This Master Trust shall terminate upon the termination of all of_the Funds. !

l 5.02 Termination of Oualified Funds Upon ElERualification. Notwithstanding the provisions of i Section 5.01 hereof, the applicable portion of any Qualified Fund shall terminate upon its disqualification:from the i application of section 468A of the Code, whether pursuant to an -

administrative action on the part of the Service or the ,

decision of any court of competent jurisdiction, but in no ,

avent earlier than the date on which all available appeals have :

been either prosecuted or abandoned and the period of time for '

making any further appeals has elapsed.

5.03 Termination of Oualified Fund.5LEL SA1.tLQ1 Elants.- Notwithstanding the provisions of Section 5.01 hereof,

l and to the extent provided in Treasury Regulations promulgated under Code section 468A, the applicable portion of any Qualified and Nonqualified Fun shall terminate upon the Company's sale or other disposition of all or a portion of its ownership interests in the Plants.

5.04 Disitihution of_Masier Truai_and_Eunda_Upon IerminAtinn. Upon termination of this Master Trust or any Fund (s), the Trustee shall assist the Investment Manager (s) in liquidating the assets of the Master Trust or Fund (s), and distributing the then-existing assets thereof (including l accrued, accumulated and undistributed net income), less final Master Trust or Fund administration expenses (including accrued taxes), to the Company; provided, however, that no such distribution shall be made unless either (a) an Order has been l issued which specifically authorizes such distribution or i

i (b) the Trustee has received an opinion of legal counsel to the 1

i. Company to the effect that no such Order is necessary to ,

authorize such distribution. l l

E VI. IRUSIEEE ,

6.01 Designelinn_and.AttalitiAalinn o f .. Snc_c.eEsoI ILustee(sl. At any time during the term of this Master Trust, the Company shall have the right t , remove the Trustee (at the Company's sole discretion) acting nereunder and appoint another i

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qualified entity as a Successor Trustee upon thirty (30) days' notice in writing to the Trustee, or yon such shorter notice as may be acceptable to the Trustee. In the event that the Trustee or any Successor Trustee shall: (a) become insolvent or admit in-writing its insolvency; (b) be unable or admit in writing its inability to pay its debts as such debts mature; (c) make a general assignment for the benefit of creditors; (d) have an involuntary petition in bankruptcy filed against it; (e) commence a case under or otherwise seek to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law, statute, or proceeding, or (f) cease to be eligible to serve as Trustee, the Company shall remove the Trustee and appoint a Successor Trustee. In the event of any such removal, the Trustee or Successor Trustee shall have the right to have its accounts settled as provided in Section 6.04 hereof. Any successor to the Company, as provided herein, shall have the same right to remove and to appoint any Trustee or Successor Trustee.

Any Successor Trustee shall qualify by a duly acknowledged acceptance of this Master Trust, delivered to the Company. Upon acceptance of such appointment by the Successor Trustee, the Trustee shall assign, transfer and pay over to such Successor Trustee the monies and properties then constituting the Master Trust. Any Successor Trustee shall

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l have all the rights, powers, duties and obligations herein granted to the original Trustee. Any removal under this Section 6.01 or resignation under Section 6.03 shall become

, effective upon acceptance of appointment by the Successor Trustee. '

6.02 Exoneration ftam Bond. No bond or other security shall be exacted or required of any Trustee or ,

Successor Trustee appointed pursuant to this Agreement. ,

6,03 Resignation. The Trustee or any Successor Trustee hereof may resign by giving writtea notice, which shall be delivered to the Company by the Trustee ne less than ninety (90) days prior to the effective date of the Trustee's t resignation. If no successor trusteo .s appointed within the l

L ninety (90) day period, the resigning Trustee may petition a l court of competent jurisdiction for the appointment of a l

Successor Trustee subject at all times to the terms and

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conditions of this Agreement.

6.04 Accounts and Reports. The Trustee shall keep i accurate and detailed accounts of all investments, receipts and disbursements and other transactions hereunder in accordance 1

with specifications of the Company, and all accounts, books and .

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records relating thereto shall be open to inspection and audit at all reasonable times by any person designated by the Company. Unless otherwise requested by the Company, within 10

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l days following the close of each month, the Trustee shall file n

with the Company a written report setting forth all investments, receipts and disbursements and other transactions effected by them during the month and containing an exact description of all cash and securities contributed, purchased, sold or distributed and the cost or net proceeds of sale, and showing all cash, and securities and other investments held at the end of such month and the cost and fair market value of each item thereof as carried on the books of the Trustee. Such accounts and reports shall be based on the accrual method of. I reporting income and expenses and chall show the portion of the assets applicable to each Fund and also shall identify all disbursements from each Fund. The accounts and reports shall include such other matters as the Company may reasonably request.

Upon the expiration of six (6) years from the date of '

the filing of such written reports with the Company, the Trustee shall be forever released and discharged from all liability or accountability to anyone with respect to all acts and transactions shown in such written report, except such acts i

or transactions as to which the Company shall take exception by notice to the Trustee within such six-year period; provided howexer, that nothing contained herein shall be deemed to relieve the Trustee of any liability which may be imposed pursuant to Section 6.07 hereof.

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All records and accounts maintained by the Trustee with respect to the Master Trust shall be preserved for such period as may be required under any applicable law. Upon the expiration of any such required retention period, the-Trustee. I

-i shall have the right to destroy such records and accounts after first notifying the Company in writing of its intention and J transferring to the Company any records and accounts requested by the Company.

l 6.05 Tax Retury and Other Reparta. The Trustee a shall prepare and timely file all Federal, state and local l income or franchise tax returns or other reports (including ;

estimated tax. returns and information returns) as may be required from time to time on behalf of a Fund, and the Company

, agrees to provide the Trustee in a timely manner with any l

l information within its possession, and to cause the Investment Manager (s) to provide the Trustee with any information in its possession, which is necessary to such filings. The Trustee i.

shall prepare and submit to the Company in a timely manner all information requested by the Company regarding the Funds required to be included in the Company's Federal, state and local income tax returns or other reports (including estimated tax returns and information returns). Subject to the limitations contained in Section 8.04 horeof, the Trustee may employ independent certified public accountants or tax counsel

to prepare or review such returns and reports. The Trustee agrees to sign any tax returns or other reports where required by law to do so or arising out of the Trustee's responsibilities hereunder, and to remit from the Master Trust appropriate payments or deposits of Federal, state and local income or franchise taxes directly to the taxing agencies or authorized depositaries in a timely manner. Twenty (20) business days prior to filing any tax return on behalf of a Fund, the Trustee shall submit the completed tax return to the company for review and shall make such changes requested by the Company upon advice of counsel that the change constitutes a position which would not cause the imposition of a negligence penalty. Notwithstanding Section 6.07 hereof, any interest or penalty charges assessed against the Funds pursuant to Chapters 67 or 68 of the Code, or pursuant to any similar state or local tax provisions, as a result of the Trustee's failure to comply i with this Section 6.06 shall be borne by the Trustee and not the Funds. The Trustee agrees to notify the Company in writing within ten days of the commencement of any audit of any Fund's Federal, state, or local tax returns, and to participate with the Company on behalf of the Funds in such audits and related inquiries. The Trustee further agrees to provide the Company with any additional information in its possession regarding the funds which may be requested by the Company to be f urnished in i

. an audit of the Company's Federal, state, or local tax returns.

6.06 Llabi li ty.. The Trustee shc11 not be liable for any acts, omissions or defaults of any agent (other than its officers and employees) or depository appointed or selected with reasonable care. The Trustee shall be liable only for such Trustee's own acts or omissions (and those of its officers and employees) occasioned by the willfulness or negligence of such Trustee (or that of its officers and employees).

Nothwithstanding the foregoing, the Trustee (and not the Master Trust) shall be liable for any tax imposed pursuant to section 4951 of the Code (or any applicable successor provision) r.s such section is made applicable to the Master Trust, the Qualified Funds, or the Trustee.

5.07 Indemnity. Notwithstanding section 6.06, the Trustee hereby indemnifies and holds the Company harmless from any costs, expeuids, damages or liabilities which arise out of the making of any investments with funds in a Qualified Fund

.which are not permitted Investments.

VII. .lHYESItiENIS 7.01 Appointment of Investment Manaaer(s). The Company shall appoint one or more Investment Managers to direct the investmont of all or part of the Master Trust. The Company shall provide written notice of such appointment to the n

1 Trustee, shall specify the portion of the Master Trust with respect to which an Investment Manager has been designated, and shall instruct the Trustee to segregate into en Investment Account those assets with respect to which that specific Investment Manager has been designated. Except as otherwise provided in Article IX and section 6.07 hereof, to the extent that the Company authorizes an Investment Manager to direct the investment of an Investment Account or directs investments, the Trustee shall be released and relieved of all investment duties, responsibilities and liabilities customarily or statutorily incident to a trustee with respect to the Investment Account, and as to such Investment Account, the Trustee shall act as custodian. An Investment Manager shall certify in writing to the Trustee that it is qualified to act in the capacity provided under an Investment Manager Agreement, shall accept its appointment as Investment Manager, shall

~

certify the identity of the person or persons authorized to give instructions or directions to the Trustee on its behalf, including specimen signatures, and shall undertake to perform the duties imposed on it under an Investment Manager Agreement. The Trustee may continue to rely upon all such certifications unless otherwise notified in writing by the Company or an Investment Manager, as the case may be.

7.02 Diter t i o n by._Iny_e.s_tment_B Bil A9.e.LQil . An Investment Manager designated by the Committee to manage an

1 Investment Account shall have authority to manage and to direct the acquisition and disposition of the assets to the Master l

Trust, or a portion thereof, as the case may be. An Investment ) ,

Manager shall have the power and authority, exercisable in its L sole discretion at any time, and from time to time, to issue a

and place orders for the purchase or sale of portfolio securities directly with qualified brokers or dealers. The Trustee, upon proper notification from an Investment Manager ,

(such notification being agreed to by the Trustee and Investment Manager), shall settle the tr8nsactions in accordance with the appropriate trading authorizations.

s l

Hrftten notification of the issuance of each such authorization shall be give,n promptly to the Trustee by an Investment t

Manager, and such Investment Manager shall cause the settlement l-l of such transaction to be confirmed in writing to the Trustee by the broker or dealer. Such notification shall be proper i authority for the Trustee to pay for portfolio securities purchased against receipt thereof and to deliver portfolio securities sold against payment therefor, as the case may be.

The procedures for providing directions to the Trustee by an Investment Manager shall be in writing and shall be signed by a i

person who tss been certified by such Investment Manager pursuant to Section 7.01 hereof as authorized to give ,

instructions or direct'ons to the Trustee.

Should an Investment Mar < VJe r at any time elect to place security transactions directly with a broker or dealer, the Trustee shall not recognize such transaction unless and until it has received instructions or confirmation of such fact from an Investment Manager. Should an Investment Manager direct the Trustee to utilize the services of any person with regard to the assets under its management or control, such instructions shall be in writing and shall specifically set forth the actions to be taken by the Trustee as to such services. In the event that an Investment Manager places security transactions directly or directs the utilization of a service, such Investment Manager shall be solely responsible for the acts of such persons. The sole duty of the Trustee as to such transactions shall be incident to its duties as custodian.

The authority of an Investment Manager and the terms t and conditions of the appointment and retention of an Investment Manager (s) shall be the responsibility solely of the Company, and the Trustee shall not be deemed to be a party or to have any obligations under any agreement with an Investment Manager.

The Investment Manager shall have discretion to vote l proxies, if any, with respect to securities owned hereunder u,a u_a,- u__-_- -_-_-____ - - , - , - - - - - - . -- - - - - ---- _ --- _ -- _ _ _ _s_

l except that-the Investment Manager may vote any proxies in the manner and to the extent directed by the Committee.

VIII. IRUSTEE ' S _ GENERAL POWERL' The Trustee shall have, with respect to the Master Trust, the following powers, all of which powers are fiduciary powers to be exercised in a fiduciary capacity and in the best interests of this Master Trust and the fcrposes hereof, namely:

8.01 Extenainn.of oblica.tions and__Regotia_ tion of Claims. To renew or extend the time of payment of any obligation, secured or unsecured, payable to or by this Master Trust, for as long a period or periods of time and on such terms as the Trustee shall determine, and to adjust, settle, compromise and arbitrate claims or demands in favor of or against this Master Trust, including. claims for taxes, upon such terms as the Trustee may deem advisable.

8.02 Registration of securities. To hold any stocks, bot.Js, securities, or other property in the name of a nominee, in a street name, or by other title-holding device, without indication of trust.

8.03 Borrowi.ng. To borrow money in such amounts and upon auch terms as the Company may authorize in writing as necessary to carry out the purposes of this Master Trust, and i

l

to pledge any securities or other property for the repayment of any such loan as the Company may direct.

8.04 Reigntion and_Remova1 of ProfcE110nA1 And '

Employe.e _ services . Upon the Company's written approval, to employ, retain and remove attorneys, accout.tants, custodians, engineers, contractors, clerks and agents as necessary and proper for the adminir;tration of this Master Trust.

+

8.05 coxela of _ Truste.e._Lo._CnniinuaJntil rinLL Dis.tIlbution. To exercise any of such powers after the date on which the principal and income of the Master Trust shall have become distributable and until such time as the entire t principal of, and income from, the Master Trust shall have been actually distributed by the Trustee. It is intended that -

distribution of the Master Trust or a Fund will occur as soon as possible upon termination of the Master Trust or Fund, subject, however, to the limitations contained in Article V hereof.

8.06 Diggletion in Exercise of Powers. To do any and l all other acts which the Trustee shall deem proper to effectuate the powers specifically conferred upon it by this Agreement, provided, however, that the Trustee may not do any act or participate in any transaction which would:

(1) Disqualify any Qualified Fund from the application of section 468A (or any applicable successor provision) of the Code;

(2) Contravene any provision of this Agreement; or (3) Violate the terms and conditions of any instructions provided in a written statement of the Company.

Ix. Armi' 9: 4YESTMtiT_EDERS 9.01 The u & we recogM tes the authority of an Investment Manager to winale, iet sst, and reinvest the assets in an Investment Account -pursuant to an-Investment Manager Agreement and as provided in Article VII of this Agreement, and the Trustee agrees to cooperate with any Investment Manager os deemed necessary to accomplish these tasks. Notwithstanding the foregoing, to the extent that the assets of the Master Trurt have not been allocated to an Investment Account under the investment control of an Investment Manager, and to the extent the assets of the Master Trust have been allocated to an Investment Account but have not been invested by an Investment Manager, the Company shall have the powers and authority of an investment manager as specified in Article VII and the Trustee shall invest the assets in the manner specified by the Company and shall be relieved and released from all investment duties and responsibilities to the extent and in the same manner as specified'in Article VII.

f X. KlSEELLANEOUS 10.01 Headinga. The section headings set forth in this Agreement and the Table of Contents are inserted for convenience of reference only and shall be disregarded in the construction or interpretation of any of the provisions of this Agreement.

10.02 PAtticular words. Any word contained in tre text of this Agreement shall be read as the '8ngular or plural and as the masculine, feminine, or neuter as may be applicable or permissible in the particular context. Unless.otherwise specifically stated, the word " person" shall be taken to nean and include an individual, partnership, association, trust, company, or corporation.

10.03 SeymI1bility of Provisions. If any provision of this Agreement or its application to any person or entity or in any circumstances shall be invalid and unenforcerkle, the application of such provision to persons and in circumstances other than those as to which it is invalid or unenforceable and the other provisions of this Agreement, shall not be affected by such invalidity or unenforceability.

10.04 Delivery of Notices UndeI_Agregment. Any notice required by this Agreement to be given to the Company or the Trustee shall be deemed to have been properly given when -

mailed, postage prepaid, by registered or certified mail, to the person to be notified as set forth below:

a.

If to the Company:

Rochester Gas and Electric Corporation 89 East Avenue Rochester, New York 14649 Attention: Treasurer If to the Trustee Mellon Bank, N.A.

One Mellon SLnn Center pittsb':igh pA 13258 Attention: Trust Department The Company or the Trustee may change the above address by delivering notice thereof in writing to the other party.

10.05 Alterations and Amendmenta. The Trustee and the Company understand and agree that modifications or amendments may be required to this Agreement from time to time to effectuate the purpose of this Master Trust and to comply with any Order, any changes in tax laws, regulations or rulings (whether published or private) of the Service and any similar state taxing authority, and any other changes in the laws, rules,. regulations and interpretatiens of the pSC, NRC or other regulatory body (including final regulations and published or private rulings) applicable or relating to the Company or the plants. Any modification or amendment to this Agreement must be in writing and signed by the Company and the Trurtee. The Trustee shall have no duty to inquire or make any investigation as to whether any proposed amendment, or modification is

9 g -

1 2

30 -

consistent with this Section 10.05, but the Trustee shallLadopt

~

[ such amendment, modification, or alteration upon the advice of legal counsel for the Company that such amendment or modification is consistent with the provisions of this Section 10.05.

S

~

10.06 Succesrors and Assians. Subject to the provisions of. Sections 2.08 and 6.01, this Agreement shall be i binding upon and inure to the benefit of the Company, the-

L Trustee and their respective successors, assigns, personal l

representatives, executors and heirs.

10.07 Goygtning Law.. The Master Trust is a New' York trust, and all questions pertaining to its validity, construction, and administration shall be determined in accordance with the laws of the State of New York-to the extent not preempted by Federal law.

10.08 Accountina Year. The Master Trust shall operate on an accounting year which coincides with the calendar r

year, January 1-through December 31.

10.09 Counterparts. This-Agreement may be executed t

in any. number of counterparts, each of which shall be an original, with the same ef fect as if the signaturee thereto and hereto here upon the same instrument.

V l

i Llb w ma

^

2; 1

i IN WITNESS WHEREOF, the Company and the Trustee-h&ve l in .

set-their-hands and seals to this Agreement as of the day and

. year first above written. ,

i

. l ROCHESTER GAS AND ELECTRIC CORPORATION By b'~:b 1 klYs w Sb? se-Senior Vice Pi'esident, Title Controller and Chief Financial Officer i

[

Attest: udh_ab ih.

Vice-President, Secretary and Treasurer Q Title r

?

Mellon Bank, N.A.

7

% By bW$^i: '

/ M" l1. Vice. President Title-l h

Attest:

Trust,9f'f cer Title '

)

E

/8 .

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l' l ll

.v ,

l . i0!;,

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$ j Y,'

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t Lif ,-,I

>4 . . . _ . .a. .. . - . , .._.m IM a, Exhibit A CERTIFICATE NO.

The. undersigned Authorized Representative of Rochester Gas and Electric Corporation (Company), a New York corporation being duly authorized and empowered to execute and deliver this i Certificate, hereby certifies to the Trustee of the Company's Master Decommissioning Trust (Master Trust); pursuant to !

F Article IV of that certain Master Decommissioning Agreement,

~

dated as of March 9, 1990 (Agreement), Petween the Trustee and the Company'as follows:

(1) Attachment 1 hereto sets'forth the-amounts.either invoiced to, or incutred-by, or to be incurred by the Company or the Funds that are/will be due and owing to each payee listed'(Payees)'for:

(a) goods or services provided in connection with decommissioning'the plant; or (b) -administrative costs of the Master Trust (excluding costs arising from the Company's.

furnishing of goods, services, or facilities to the Master Trust and excluding '

compensation which is excessive orx unnecessary to carry out the purposes of the -i Master Trust)

L as evidenced by the invoice, contracts or; agreements attached hereto; l4

-(2) all such' amounts due and owing to the payees constitute Decommissioning' Costs or Admir.istrative Expenses.as described in Article IV of the Agreement; 3

I' II i.

l.

h

' ' { \. . y diich, iO , _

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-(3)^ all such amounts may be paid from the Master Trust without causing the Qualified Fund (s) to become disqualified from the application of Code section 468A or any applicable successor.

provision; and (4) all conditions. precedent to the making of this withdrawal and disbursement set forth in-eny

agreement between such payees and the Company, if applicable, have been fulfilled.

Accordingly, request is hereby made thht the Trustee provides for the withdrawal of $ from the.(Ginna Nine. Mile Two] [ Qualified "und/Nonqualified Fund] [Furds specifiedLin the attached schedule] in order to permit = payment of such sum to be made to the payees. You are further-

' requested to disburse such sum, once withdrawn,-directly to such Payees in the following manner: [ CHECK / WIRE TRANSFER / ] on or before , _ 19 .

WITNESS my hand this day of ,

19 . .

4 By Authorized Representative t

4533V

, i

% rn =

NUCUPAR DBCOMMISSION *1 RUST PER SCHEDULE -

' POR

\

ROCHPEIERA%ANDEL&iCIE1CIQREDMDON IEUFIEESERY1G ACCOUNT PEE: $?,500per Account-

' ASSET FEE: .05 of 1% per annum on the first $50 million Negotiated thereafter SBCURITY TptANSACITON PEE: $20 per Transactio.1 /

gS1IEEEB: $30 perIssue (Walved)

BKREEQi[DNQ: $165/ Hour of tax preparation ANCKLARv SERVICES EBCURTTY IR4 DING-We set our fee on a per loan basis. ."Ihe earnings are split 50 with our trust customers up to 2%. Any retum greater than 2%, McDon caps out at 1% and the balance goes to the customer. All expenses for monitoring, control and investments are included in Mellon's split.

OtMJHE: - $10,000 annually GIPM DISURSEMmfr: $8,00 for disbursement.

-N.

ROCHESTER CAS AND ELECTRIC CORPORAfl0N NUCLE AR DECOMMIS$10NING - EXTERNAL TRU$i EXHIBIT C NINE MILE PolNT 2 NUCLEAR PLANT (A) (B) (C) (D) (E)

YEAR BALANCE CONTRIBUll0NS EARNINGS BALANCE ASSUMPTIONS 1/1/Kx 12/31/xx - ---- - --- -- ----

....... ....... ... . .... .. m ..... ... ........ Total Cost Estimate $30,590,000 (1)

NaC Certificate Ammsit $25,276,553 (2) 1989 $0 80 SD $0 Year of Est. 1990 1990 $0 81,017,745 $9,872 $1,027,616 Cost Escalation 4.00%

1991 81,027,616 $1,070,086 $67,261 $2,164,984 Total Cost at Decome. $125,539,297 (3) 1992 $2,164,984 $1,070,086 $120,981 $3,356,051 Nec cert. Amt. 8 Decom $103,733,269 (4) 1993 S3.356,051 $1,070,086 5177,215 $4,603,353 Fund Return Pre-tax 8.00%

1994 $4,t,03,353 $1,070,086 $236,105 85,909,544 Fund Return - Af ter tax 4.64%(5) 1995 85,909,544 $1,070,086 S297,775 $7,277,405 Fif + Sli 42.00%

1996 87,277,405 51,070,086 8362,357 $8,709,848 1997 S8,709,848 $1,070,086 S429,987 510,209,921 1998 $10,209,921 81,070,086 $500,811 $11,780,819 1999 $11,780,819 $1,070,086 $574,979 $13,425,884 2000 $13,425,884 $1,070,086 $652,649 $15,148,619 WOTES D 2001 515,148,619 $1,070,086 $733,985 $16,952,691 2002 $16,952,691 $1,070,086 $819,162 $18,841,939 (1) Per pending Rate case (incl. non contaminated removal) 2003 S18,841,939 $1,070,086 $908,360 $20,820,385 (2) Per Exhibit A.

2004 $20,820,385 $1,070,086 $1,001,770 $22,892,241 (3) Total Cost at Decommissioning (2026) a 4% escalation.

2005 822,892,241 $1,070,086 $1,099,590 $25,061,917 (4) NaC Certificate Amount at Decomissioning (2026) 2006 $25,061,917 S1,070,086 $1,202,028 527,334,031 w 4% escalation.

2007 S27,334,031 $1.073,486 $1,309,303 $29,713,420 (5) Rest return net of taxes and trust expenses equals .64%.

2008 $29,713,420 $t,070,0t0 $1,421,642 S32,205,148 2009 S37,205,148 51,070,086 $1,539,286 534,814,520 2010 S'i4,814,520 $1,070,086 ti,662,483 S37,547,09e 2011 $37,547,090 $1,070,086 Si,791,498 $40,408,6'4 2012 $40,408,674 $1,070,086 S1,926,604 $43,405,364 2013 S43,405,364 $1,070,086 $2,068,088 S46,543,539 2014 $46.543,539 $1,070,086 $2,216,253 $49,829,878 2015 S4 ,429,878 $1,070,086 $2,371,413 $53,271,377 2016 S53,271,377 81,070,086 $2,S33,899 $56,875,362 2017 $56,875,362 $1,070,086 $2,704,056 $60,649,504 2018 $60,649,504 $1,070,086 $2,882,247 $64,601,837 2019 $64,601,837 $1,070,086 S3,068,851 $68,740,774 2020 $68,740,774 $1,070,086 $3,264,265 $73,075,125 2021 $73,075,125 $1,070,086 $3,468,905 S77,6'4,116 2022 $77,614,116 S1,070,086 $3,683,207 $82,367,410 2023 $82.367,410 $1,070,086 S3,907,628 $87,345,124 2024 $87,345,124 $1,070,086 $4,142,644 $92,557,854 2025 $92,557,854 $1,070.086 S4,388,755 598,016,695 2026 $98,016,695 $1,070,086 $4,646,487 $103,733,269 2027 2028 2029 2030 2031 2032 2033 2034 TOTAL $39,540,851 $64,192,418 $103,733,269

BEFORE THE UNITED STATES NUCLEAR REGULATORY COMMISSION HEW YORK' STATE ELECTRIC ) Docket No.

& GAS CORPORATION )

DECOMMISSIONING TJ UDET

-NEW YORK STATE ELECTRIC & GAS CORPORL4 20N (Company) hereby submits this Decommissioning Report in compliance with 10 C.F.R. 5 50.33(k) and 5 50.75(b).

1. . The Company owns an 18% undivided interest in: the

- Nine Mile Point nuclear generating unit No. 2 (NMP2).

2.- The Campany hereby: certifles that ~ financial' assurance is provided in the amount' of $32,491,'195 (1989 dollars) for decommissioning its share of the contaminated-portion of NMP2. -.The calculation of this amount is set forth.

in; Exhibit A-and complies with the formula set forth in'10 C.F.R. 5 - 50.75 (c) . The Company acknowledges its 18% undivided y ' interest with respect to the total financial assurance amount' of $180,506,636 (1989 dollars).

. \.

3. The method by which the Ccmpany provides finan-

\ cial assurance for decommissioning its share of the contamin-

'ta.1 portion of NMP2 is the establishment of an external trust

k. in 41tch deposits will be made at least annually -

>!g1

4. Attached as Exhibit B to this Decommissioning Report is a copy of the executed trust instrument. gj l I

{

si _ _ - . . . _ . . _ _ _ . _ _ _ . . _ . .

o i L

5. Attached as Exhibit C to this Decommissioning-Report is n schedule setting forth proposed contributions to

.the external trust for decommissioning the Company's 18% share of the contaminated portion of NMP2 and the. assumed earnings '

on such contributions.

i

6. Attached as Exhibit D to this Decommissioning ,

Report - is a schedule setting forth the Nuclear Regulatory Commission financial assurance amount escalated for inflation to the time of the projected cessation of operations in

-October 2026.

NEW YORK STATE ELECTRIC & GAS CORPORATION _,

% A By: ?

k..u 6t W E>tec'utive f Presfdent an4 Chief Fi hn al Officer Dated: June 21, 1990

, i

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a

- w Sheet 1 of 7 t.lWil.li.a taltilation of Rittees finaitial Assirante hunt slut till POlul Vull fl0

. i. ' uit Bluim Et0M!$518!I4 (051 tot 6 He atttnt PL6ul

4. FOR let Mllitu 12H Mt aat 34H nt . (llH Illlies

6.Htt), entre P = Mt Source: Federal htister Vol.53.

NO.123 Part H, p.240%.

tatat Hlp1 ulut litt Pl!N1 pli 150

3323 Hi . ~ ~ ~ ~ ~ - Et Rition llH,H0,He (0 itpul) Pli'th Spilpit t i lear tid litt

- - - --- ~ ~ - - - -

stes .Hf til 3323 , 21 H7,H0 WC Elulen i 1984 l 133,107.6H heo 1erk State tiectrit l las lit 32,411,115 1991 ANUS 1Hul fat 101 til (See 11.A hies) 1.348 at sluim I tint tul litt la llH.H6,636 38883385888

!!. Et AlJUS1Hul I Atllt (HA110u (Pit itHt6i t[Ill1[t, VOL.53, W.123. P6ll 54, p 24tH.1

4. Estiested Cost (tear !! : tilli t test) [ .65L * .13E + .22l )

19891[nt 165 alA151R[N1 fit 10R - a t.0 1.226) * (.13 : .l77) * ( 22 i 1.181)

'1989 ft4I Eul AlH51stut Int 1H 1.341 34888384 leertes snere:

Deathly Labor tevies, U.S. leportetet of labor,Isreas of Labor Statistits L lahr lante 25, tesloyeest test Indes, private nostare, northeast letien, i i tie]r Prodster Price lades lata, falle 6: unere P etials ladsstrial guer, toes, code M43.-

P

eetsals estrit peer too (23 toegonents:

1- Rit Atlastic; ebere i etials Lithi feels oils, tees. tede H7 F*feeloil(771) 1

lirial test - .uuttl 1347, leport es laste istial Charges, October, litt.

l. InttRAllh OF TAC 10tS -

tierp (II: P s elettric sover

. !Wil -

lder (1,11 (unntation, northeast legion luMI ' ..ledist.

. . . . . . . Fuer,

. . . . . . .CC

. . . . .M43,

. . . . . . 8:1

. . . . .Atlantic 130.5 Jeu 1984 Actual lit.V.

16N19814ttial 191.5 :

H [ lt H Actsal lH.4 IEC ltM 6ttial HClittActual 115.4-HC1911 Actual 1H.6 .......

1916 to ir led 1919 Istl f atter 1.431 1986 to it tid 1991 titt Fatter 1.226 3333333 -

3833333 Iserer it): F Feel oil l#El lirial(ll Liq 61 feel oils, tt n?3 = ......

J4u1964Actsal 82.6 Ottaler lH1, Ettl 1347 So. (410Llua llit Tot HR 50.7

....... ............ .......................... gg g998 Attid Mt1991bctoal H.1 -

11At luMI .......

1994 to ir tid 1981(5:1 Fatter 4.134 lillin 14SMlu61 H Slit 1.H0 :: =34:

til/H 50. (Athlu4 Slit 1.114 tillit 50. (440LluA Slit (Est i 4.41) 1.114 (t)

.h

'> 1/IIt0 50. (A40LluA Slit (Est t 5.011 1.tif (1)

-- Iberefore I estals: per trait tetilaterr leite, hr,1981, page 7.

1984 to ir Ist 1991 tstl Fatter 1.111 t i for a HR (0.23P

4.77fl

== :: = t i 1er a Ht (0.23(1.031) + 0.??(0.830)) : 0.677 m 33333333 lIstiested barial test to escalate at 4.41 and 5.01 for 199141910 basedonthelarneelltoelevelratisattive rate schedsle for base disposal charges stasiari sagte, g l{

t >

-%g Sheet 21of 7

' CreiIlabor Statistics: Compensatson & Industrial Relations I 25. Emp'r>yment Colt inder, private nonform workers, by bargaining status, region, and area site uuneiesi.i001 1988 l 1909 l 8 cent change 1967 l 3 12 ,

Sere, acnths nionths Jutte Sept. Dec Mar. June Sek Dec. - 96Jed enoed t Dec. 04ar doc.1999 COMP (NSAT60N

.- Wetters. Dy Dergeeneng statue' Unen ., 133 4 1356 136 9 1379 138 6 139 7 141 1 142 3 143 7 10 37 Good

Po8 von 9 131 0 134 1 135 3 1363 1373 137 9 139 4 140 6 142 0 10 35 Se'wce poouon0 1367 134 0 1394 140 5 140 9 142 6 143 9 tel t 146 3 8 36 t Mermslechanno - +.- 131 S 135 0 1363 137 0 1382 139 9 141.3 142 5 144 1 11 43 peonmermeeacturg _ . _ . - - - 135 1 136.2 137.6 1366 138 9 139 5 141.0 142 1 143 3 8 32 Normnion +- - 1369 . 1349 1407 142 2 183 9 146 0 147.7 149 6 151 2 9 5t

Gncos poouan9 - -. 134 1 122 137 8 134 7 139 9 141 4 1433 145 0 146 6 10 47 Senace poesting 1366 140 $ 142 5 144 4 146 3 146 6 t50 5 152 7 154 1 9 53 Manusactunn9 ~- 135 6 1378 1392 140 1 141 3 1431 144 8 146 5 1476 9 de Nonmarssiachmg . 337 5 139 4 141 5 143 2, 145 0 147.3 149 1 151.2 152 7 to $3 Wetters 6y regnen '

a 14i 9 143 7 145 9 1474 150 4 153 5 1555 154 3 160 0' 11 64

- 135 4 137.1 1393 140 4 1463 142 7 1441 185 8 1 to 42 131 7 134 4 135 5 136 7 136 0 139 3 140 9 142 3 143 6; 9 41

- Meaett ttermettr North Comr aft

- 5t .. 136 3 138 3 1395 140 6 141 5 143 2 144 9 146 4 147 5 6 42 Wernets.Dy eree saae

Metropoman eteet 136 7 134 9 140 5 t420 1436 145 6 147 4 149 4 150 7 .

9 48 Other areas - 132 0 133 6 135 S 136 2 1366 137.5 134 3 139 4 141 1 12 31 WA0t$ ANO SALAmtE6

Werners, by bergaenang status

Urton - - 1305 131 0 132 0 132 9 513 4 134 3 1354 136 2 137 6 to 31 Gmpoestir91 - 128 5 128 7 129 7 130 4' i,11 2 132 0 133 4 134 2 135 6 to 34 Seewce poducing 1334 134 4 1354 134 7 064 137 6 134 4 1393 140 7 10 29 Manusaciunng -- 179 3 179 4 1304 131 0 1321 133 0 134 4 135 l 136 7 12 35 Nonmanufactunne - 131 0 132.1 133.3 134 5 134 4 135 4 136 2 137.1 134 3 9 27 P4eaunen 135 0 136 4 134 1 139 5 141.1 142 9 144 4 146 3 147 5 6 el

' Gooet poduC891. 1321 1336 135 0 135 7 1368 136 2 139 5 1411 142 4 .9 41 Seewee pooucin9. 1347 134 0 140 0 141 4 143 6 145 6 147 2 149 3 150 5 .4 48 Marustectunng . 133 9 135 5 136 7 1374 138 6 1399 141 4 142 8 144 2 '10 40 peonmenufaclunng 135 4 1368 134 8 140 4 142 2 144 1 145 6 147.7 144 9 8 47 Werners by region '

Northeell . 139 7 1409 142 9 144 6 147 3 150 1 152 0 t $47 156 4 11 42 South 133 0 134 0 1361 1371 127 0 13e 9 140 0 141.7 143 J 8 37 Mosesi ttermerop horth Cenvaib 129 9 131.3 1321 133 3 134 2 135 6 1369 138 0 139 1 8 34 West _ -- 133 5 134 9 136 0 137 4 138 1 139 4 140.7 tel t 142.7 6 3.3 werkers, my ere. .ee n Mee0comen Feet 134 6 1358 137.3 138 7 180 2 - lit t 143 4 145 2 146 4 8 44-Otner areas _ 1298 1309 133 0 133 5 133 7 1;46 135.2 1361 1378 12 31

' The estemet are cascusawJ tWierenpy Wom inose tot the acceston and Adansty tascr Aeosew Tichnical Note. "Eshmaton pactesret lot the f* ivy immear e oei e4 . creon aa = ties. cacanos see = saw casundes m 7 in2.

I t

100 Monthly Labor Review March 1990 n

4, p

_ ,T .

Sheet 3-of 7 q .

e Table 6. Producer price indesee and percent changes for commodity groupings and indhriouel home-Continued' (t982 e 100 uruses eterw'se recated) .

Unedpfsted comrime ay Over mess

'"8 ' cont chenee to Commosty Jett 1980 Front 60de Deu Sep.1999' I Dec 16p9' Jan.1990' Jan.1900 Dec 1989 Apuetic tooeweer 0437 123.1 123.1 123 1 11 8 0 0434 Other loorweer ..

Other iseener oms reasied proeucie 044 124 4 124 4 1248 2.4 2 0441 il1i 123 0 123 1 2.2 .1 Luggege and smes lesser goods --

Hand h,ggage .

0112 12/64 100 5 104 6 1069 3.4 1s Luggage ciher then hand lugge0e . 0113 12/64 119 0 120.0 120 0 45 0 wornen a 6 crueren a handoege & purses - Otte 06/02 M (9 (9 - (r) (e) 0132 06/82 124 9 123.1 123 8 .6 .s Othor personsi tseiher gooos

+

Giovee 0442 119.5 119 4 121 0 3e 1.3 As teamer dress a se<vearese geves and a tiens 0103 06/06 117.3 117.3 117.3 .7 0 As teether wars gores and annens 0104 06/06 117.9 117.0 119 9 4e 1.7 0443 134 0 1361 134.1 2.7 0 ineusmal leseher -

anousines teether benlagiother indusanoi producie _ 0103 06/45 134.9 1340 134.9 2.7 0 0444 1367 136.0 137 2 1.7 .2 Footmeer cut secct 0102 12/64 119 0 119.1 119 4 1.7 .3 Boot and shoe cui stoca and nnengs 0445 06/95 111.3 til 4 til 7 42 ,3 Leatheeliesther.the goods. fte c.

0101 06/85 111 7 112 1 1t2 4 46 .3 Leeinet/teelhor.eee goods. other then tests 0111 06/65 111 2 111 0 111 2 30 .2 Leather bens Fuets and totened products and peeer OS 73 9 74.1 80 1 17.8 61 061 96.5 to 9 97.6 3.7 .7 ,

Coal-0511 103 2 1046 106 3 2.9 1.8 Anerweene 01 101.1 101.7 103 4 2.2 1.7 Prgeerec enshreces enesed Situntnous coal . 0$12 M4 96 8 97 6 30 .7 02 99 9 02 4 92 6 2 .2 Sooi sees et poserod spiushnous com Sieem esocine unenes 0200 9tJ e3.5 93 7 .1.1 .2

^ Jcome producers 0212 43 5 91 0 914. 66 0 0215 06/63 91.8 e1.1 S t.s 4.1 .3 As other eenseen users Connect seems of poseres enununous coes . 03 M$ 97.2 MS .6 ..e

- 0301 100 3 t o1.1 100 3 .8 4 Stearn eiereic unenes J 0303 43 6 31 t 33.3 2.s edeiseurycel/como poshssers .g 3 .1 As einer punestnel users - 0306 92.4 33.2 03 3 06 12/M 93 2 93 2 . 93 2 14 0 0 Mosered tutununeus coel #esel /comnt une 06 t2/M 88 5 . es.3 de 3 .3 0

- basered tutun= nous coes ter espert -

Piecered queurruneus coat,intrecome. tens 07 12/M 1012 100 8 100 1 19 I 7.2

" 08 101J 1005 90 9 4.1 .6 Unpropered toes 052 90.7 60 4 90 4 1.8 .7 Coke even prosacas Cone - 0522 0101 87 9 Me e4 8 14 0 Come Omer como Nrnece pochscts - 0194 12/M 112 4 113.1 (1 6 M 053 75 4 76.3 s2 s 10 t as ces sums a 0631 42 8 31.7 64 3 2.1 32 Noneet ess 0102 41.2 78 8 64 5 3.3 7.2 tuorstese .. g .s 3 enerosiete ,

0103 MS pg 9 94 1 0532 50 0 54 6 64 4 48.9 410 Lanuehod peerossum ges 31.3 0104 $16 70.3 127 3 134.7 P+esene 40.0

.guiene - 0105 41.2 46 0 672 42.7 0106 41 8 474 544 13 8 19 0 gesene .

0107 06/64 55 6 64 3 64 7 31.6 11.0 -

Cmor notees pse teens 054 120.7 1to 6 1146 3,6 0 Ewine power Conwaarties power. 40 tw esmand 0642 -118 6 113.1 112.5 33 .5 1101 111 3 113 7 102.5 64 ' .t.9 Nee Englerus - t hetApenet 1204 106 t 1004 100.5 37 1307 1674 110 6 111 3 18 4 f est fearm Centet 30 12 West North Central 1411 142 2 1('.3 128 0 1514 116.7 11s.3 it4 g . i .3 .6 Scum Atenac 1617 114.0 t16 s 1168 -3 .2 East Soum Capees 1721 116 1 1073 107.5 43 2

's wesi Soush Ceneres 110.3 7 4

<#' 1824 107.4 107.0 nieunten 1927 136 6 1309 131 0 10 4 .1 Pacec f treasinal power.6Co nw eemand _ 0543 122 6 11$ 7 116 3 38 .6 1101 1,07 1 1 1 88 -42 Aew fegend - 10,s 67 3 e im 1 cs:q C6,2 1 .2 .

1 i.e - e, er., e, iee.e.

1 157 I

i

{ -. . - - - - . __ _. _

ME - -

. - . ~ _ .... . a - .. . _

Sheet 4 of 7 Table 6.' Produce? pr6ce indeses and percent changes for commodity groupings and individualitem6-Continued -

(1982 100 vNess seerwee swcatect .

Vnesiuved Commooy' Other svia.

come ioety coot Dav $'Q{

See 1989' l Dec 1969' l Jan.1990' l Ja41980 l Dec. iteg Induseini power. 500 kw : JMd Saal peoin Comes l 0543 1307 117 5 114 3 1t5 g g1 g,g

.Wess 8torth Central j 1411 1S27- 130 6 132 3 32 1.3 South Alatats . r-

i 1914 127 6 113 0 113 6 16 .2 Sesi $oum cowel 1617 122.1- 122 3 122 5 +8 2 l

West South Centes 1721 112 4 1067 tot 9 43 1.t Adtesnamn 1624 111 8 907.2 107,2 1.0 0 Pec4C 1927 136 9 WO 119 0 11 9 0 Crues poww teemoser proegeort 0561 56 2 59 8 64 4 29 6 7.7 Peressum proests, seinied ' ' 057 61 4 62 0 71.7 31 8 15 4

[ '

Goenene 0571 64 9 to 6 60 0 24 S '13 9 Leesse regular mener gaecano - 02 67 1 61S 69 0 24 4 Seses to geneert veteners and other sesenets ..* 12 2 0202 66 8 613 66 8 24 6 12 2 Smes to end users - .J203 74 3 te 1 77.0 26.0 13 1 Prorraum peem mener gasonnes . 03 71.7 67.9 75 0 18 3 10 6 Sees to stesses. reissers one eener resoners - . 0302 70 1 66 4 73 4 to 4 10 8 1

- Smes to end seers i 0303 72 5 69 7 - 76 S 19 0 03 Unseesse regner esecane De 62 5 $6 2 ~ 67.5 Mt 16 0 Smes to inesses reteners and omer vesseers , 0402 62 0 57 8 67.0 MS 18 9 i Sees to end mems . 0403 62 9 Sa 4 47.1 27 e 14 e

- a,ui ,s, -

Emesone

!0$72 ui ut n2 M. i. 0 1 C2 timesone -. - 0201 56 8 67.1 ti? M4 27.7 Jeq lesse 03 64 3 64 3 74 9 374 16.5 siseess+ syne 0301 69 6 46 3 79 9 40 2 20 5 Deesfune.svos .

0303 06/85 65 9 70 1 49 0 23 7 ,t 6 0573 59 3 01 3 644 Y.sa m u . ~ - . 02 (M 25 3

' Fuse es no2 tooseners - 020t 59 2 M4 to 9 54 6 -- 27.0 s2 eseos nsel 03 St S le S 66 SS.I 23.5

- Cener esm tuas see. - -. 04 Omer egM suas ans _.- 0401 061SS 76 2 82 ? 1016 SS 4 27.4 Aseshed hses .0574 46 8 $2 0 $7 4 M3 . 10 4

- Smas to senseers - l 07 SJ6stl 62 0 46 5 74 7 33 4 14 9 Centenne < 1% sunur . 0701 40 9 de 0 61 4 11.7 . 12 2

- Carm > t% auieur 0702 134 $4 9 64 4 e6.2 16 1 Sees to end users De

' Seses to oral users 0001 06/85 64.7 44 7 73 8 34 6 7.4 Fnefoe hApreerse 0574 112 0 ti2 0 t to S 31 .t.3 Luersaeng yeese ~, 03 tot 4 100 7 109 9 - S6 .2 Lencaeng yeese 0303 06/05 107.2 107 4 107.5 58 t Luencaerg eres seines ens 04 Lersaang ans enneer ens - 0401 06/05 105 0 1050 103 3 2.7 14 Petreasum and sees preshacts. ne E 050 12/64 47 $ Se 4 31 9 4.7 . 4.2 Peerstenen end essi preaucts. n e c. 0541 Pesessum case Of11 06/e5 4t.1 41 4 40 0 - .20 5 4.3 AseneR l heme - 0112 06/05 S64 45 8 47 6 40- 39 Cese potenseen and cosa proshets of19 12/64 136,6 ,1355 146 0 . 34.2 f.7

- Chemesses and esos products 06 121 4 1209 1208 2.3 t aufuseus amenesens 041 112 4 111 8 111.2 5I~ ..S Same siergeru eneezes* . 0613

100 9 910 $ 110 9 3.7 4 AAases eral crearme , 01 1028 - 1021 102 7 44 4 CNores hated 0101 114 3 105 8 1to9 -48 44

-) Desswer soeum camerwe - 0103 1072 107 5 104 6 41 10 y ' , Soeum rypremse towe tc4usec eces) 0104 to 3 99 e to 6 10 0 .t.2

' Omer eergens enenecas 02 112.2 113 2 113 4 3.5 .2 Alusaseen hyssesse 0206 04/87 134 2 18) 132.3 38 (8)

Leno. int owet. Nyerased 4 esed turned desemne . 0213 99 9 100 2 100 9 28 .7

. t+yeecNanc esel 0221 101.5 972 470 14 2 10.5 Sulhere sod 0232 06/87 112 4 110.1 110.0 9 t

Omar energere acuse 0242 12/t2 1to 1 104 a 109.7 23 .4

pues - 0262 12/64 76 9 79 9 60 0 14 .1

' Sosessi tipesygfessnese (STPP) 0266 06/t* 06 6 84 e se e 86 0 7 meest seit 0271 12/04 107.0 1128 111.5 .5 .I 2

' fsbe 0272 12/04 78 9 (8) (8) (8) (8)

-. Named or scenes posseenen sens 0274 12164 107 8 106.3 105 7 6.0 24 Nesm . ~ 0276 12/84 102 9 tot 6 101.9 .1 .1 0$n mergeruc chenusses - 0242 12/62 112 9 114 4 195 2 2.9 .S

ase Art 8 notes et and et eneet i e 158 .

My

. , , , .y v. . :. i . n a 4 rmwos Sheet 5 of 7 y .ICHEMoNUCLEAR SYSTEMS,1NCe 8 220 Stoner. ope Dove

Colorn'>ta. South Caronna 79210 BARHHELL LO4-LEVEL RADI0 ACTIVE MASTE MANAGEMENT FACILITY RATE SOIEDULE All radwaste material Transport 6 tion and Nuclear Reputatory Comission Regulation Title 10 of the Code of Federa Regulations, Chen Hutlear's Nuclear Regulator Commission ' and South Carolina Radioactive Haterial Licenses, Chem-Nuclear'y Barnwell-Site Disposal: Criteria, and amendments thereto. s

1. BAtt MtP01AL CHARCEO (Not including Surcharges, Barnwell County Business License Tax, and Cask Handling Fee)

Standard Maste>

8. Biological Weste ($$8.71/ft3 C. Special Nuclear Material ($NH) $40351ft3 )

$38.7i/ft3 plus $5.00 per Gram $NH Mote: ether Minimum charges charge per shipment, excluding Surcharges and specific is $1,000,

2. SURCHARGES:

A. Height Surcharges (Crane Loads Only)

Weicht of container 1.urcharop Per container 0 - 1,000' lbs, 1,001 - 5,000 lbs. tb Surcharge 5,001 10,000'Ibs. $ 450.00 10,00) - 20,000 lbs. $ 800,00 20,001 $1,125.00

- 30,000 lbs. $1,450.00 30,001 - 40,000- Ibs.

40,001 $2,130.00

- 50,000 lbs. $2,800.00 greater than 50,000 lbs.

By Special Request B. Curie Surcharges For Shielded Shipment:

Curie Content Per thinment $urcharne Per Shinment 0-- 5 $ 2,780.00

> 5 -

15

$ 3,150.00 15 - 25 .

$ 4,170.00

> 25 - 50 $ 6,290.00

> $0 - 75 8 7,665.00

> 75 - 100

$10,395.00 100 -

ISO $12,460.00

>- 150 - 250 $16,700.00

> -250 - 500 $20,900.00

> 500 - 1,000 $25,000.00-

> 1,000 - 5,000 $33,400.00

> 5,000 By Special Request l

Effective January 1, 1990

.1-

.(4629g)-

__ _._.(803) 256 0450 e 1 sten 216947 ~ '

3 CHEM NUCLEAR SYSTEMS,INC. '

220 siovoge orw.ceuma sgn rg eag

'(

HASTE MANAGEMENT FACILITY RATE SCHEDULE All radwaste material shall - be packaged in accordance with Department of Transportation-ahd Nuclear Regulatory Commission Regulations in Title 49 and Title 10 of the Code of Federal Regulations, Chem-Nuclear's Huclear Regulatory Commission and = $outh Carolina Radioactive Material Licenses, Chem-Nuclear's Barnwell $lte Olsposal Criteria, and amendments thereto.

1. BASE DISPOSAL CHARGES: (Not including Surcharges, Barnwell County Business License Tax, and Cask Handling Fee)

A. Standard Haste 3 dh6.8 Hit l j

. 8101cgical-Haste $38.52/ft3 C. Special Nuclear Material (SNH) $36.87/ft3 plus $4.75 per Gram SNM Note: Minimum charge por shipment, excluding Surcharges and specific other charges 1s $800.00.

2. SURCHARGES:

-A. Height Surcharges (Crane Loads Only)

Weicht of container Surcharge Per Centainer 0- 1,000 lbs. No Surcharge 1,001 - 5,000 lbs. $ 430.00 5,001 - 10,000 lbs. $ 760.00 10,001 - 20,000 lbs. $1,070.00 20,001 - 30,000 lbs. $1,390.00 30,001 - 40,000 lbs.- $2,030.00 40,001 - 50,000 ibs. $2,670.00 greater than 50,000 lbs. By Special Request

8. Curie Surcharges For Shielded Shipment:

Curie Content For Shtement 'Surcharoe Per Shloment 0- 5 $ 2,650.00

> 5 -

15 $ 2,990.00

> 15 - 25 $ 3,980.00

> 25 - 50 $ 5,990.00

> 50 -

75 $ 7.320.00

>. 75 - 100 $ 9,910,00

> 100 - 150 $11,~870.00

> 150 -

250 $15,900.00

> 250 - 500 $19,900.00

> 500 - 1,000 $23,900.00

> I,000 - 5,000 $31,800.00

> 5,000 By Special Request

~

Effective Januarf 1, 1989 (803)256 0450.Te'ex k16947

, ,, , u w u, m i . r.. m - : cv CHEM-NUCLEAR SYSTEMS,INC.

220 Stoner ogo orwe e Columtra. Soum Catohna 29210 BAANWELL LOW-LIVEL BADICACTIVR WASTR MARACEMERT FACILITY BATR SCIIDUL8 All' radweste material shall be packaged in accordance _ with Department of Transportation and Nuclear Regulatory Cosmisalon Regulations in Title 49 and Title 10 of the Code of Federal Regulations, CNSI's Ruclear Regulatory Commienion and South Carolina Radioactive Material Licenses, CNSI's Barnwell Site Disposal Criteria, and amendments thereto,

1. BAILDISPosAL cnicES: (Not including Surcharges, Barnwell County Business License Tax, and Cask Handling Tee)

'(A. Standard Waste Q 3 M /ft.3 f.' ~ B1616 sic 61~Wae'te $36.9771E 3 ~

C. 8pecial Nuclear Material (SNM) 435.32/ft.3 i

plue $4.50 per Gram SNM Mote: Minimum charge per - shipment, excluding Surcharges and specific Other Charges is $750.00.

2. BURCHARGgt .,

f

.y-A A. Weight surchatges (Crane Loade Only) '

'I Walaht af container surchara centainer 0- 1,000 lbs. - Surcharge 1,001 - 5,000 1ha.

5,001 - 10,000 lbs. ( 405.00 710.00 10,001 - 20,000 lbs. \ J,010.00 20,001 - 30,000 lbs. '$1,310.00 30,001 - 40,000 lbs. -

$1,915.00 40,001 - 50,000 lbs. 82,520.00 greater than 50,000 lbs. By Special Request B.' Curie Surcharges For Shielded Shipments:

G.ligin_ Content Per thinment Eurcharme Per Rhiement 0 -

5 4 2,500.00 '

>- 5 -

15 $ 2,820.00

> 15 -

25 4 3,750.00

> 25 - 50 $ 5,650.03

) 50 -

75 $ 6 4900.00

) 75 - 100 $ 9.350.00

> 100 -

150 $11,200.00

> 150 -

250 $15,000.00

> 250 -

500 $18,300,00

> 500 - 1,000 $22,500.00

>1,000 - 5,000 $30,000.00

-(- 25,000 By Special Request

' Effeetive January 15, 1988-(25153).

(800) 256 0450

Teles. 216947

. , , . - , , , , , . , , , . , ,, , , - . . . . . . , , - - - - - - - - - -m--

, ~

EXHIBIT B L: .

.f .

NEW YORK STATE ELEC'1 IC & GAS CORPORATION NUCLEAR: DECOMMISSIONING TRUST' AGREEMENT FOR NINE MILE POINT NUCLEAR GENERATING UNIT'NO. 2 l-I l

l

)

l t

l

~'

Dated:: March 12, 1990 3 :" ro.A i- :1

[- (

I l ~-

i:

f t ,

" ;O '. _ .

===== , . - - - . - - . . . . . . .

TABLE OF CONTENTS Page ARTICLE'I. DEFINITIONS.......................... 3 1.01 Definitions .......................... 3 ARTICLE II. ESTABLISHMENT OF TRUST............... 7 2.01 Trust Purposes . . . . . . . . . . . . . . . . . . . . . . 7 2.02 Trust Fetablished and Trustee Apr .nted................ 4 ........ 7 2.03 Acc<.ptance of Appointment............ -8 2.04 Ncme-of Trust........................ 8_

2.05 Duties of Authorized Representatives. 8 2.06 No Authority to Conduct Business..... 9 2.07 Ik) Transferability of Trust.......... 9 ARTICLE III. CONTRIBUTIONS AND INCOME............. 9 3.01 Initial Contribution................. 9

'3.02 Additional Contributions............. 10 10 3.03 Subsequent Adjustments...............

3.04 Trustee Not Responsible for Enforcing Payment of-Contributions...................... 11 ARTICLE IV. DISTRIBUTIONS........................ 11 4.01 Payment of Decommissioning Costs _.... 11 4.02 Payment of Expenses.of Administration..................... 11 4.03 Reliance on . Committee. . . . . . . . . . . . . . . . 12 4 . iO 4 Fees................................. 13 4.05 Trustee Entitled to Reimbursement.... 13 4.06 Liquidation of Investments........... 13 ARTICLEEV. TERMINATION.......................... 14 5.01 Termination of Nine Mile Unit Two Qualified Fund in General.......... 14 (i) l l

>n

8

& '4 Page 5.02 Termination of Nine Mile-Unit Two Qualified Pund Upon Disqualifi-cation............................. 14 o 5.03 Termination of Nine Mile Unit Two '

l Qualified Fund on Sale of Nine L . Mile Unit-Two...................... 15

! 5.04 Distribution of Nine Mile Unit Two Qualified Fund Upon Termination.......................... 15

~5.05 Powers of Trustee and Investment H Manager to Continue Until Final Distribution....................... 16:

L' <

ARTICLE VI. TRUSTEES............................. 17 ;

1

[ -6.01 Designation and Qualification ,

of Successor Trustee............... 17 6.02 Exoneration from Bond...... ......... 18 .

L 6.03 Resignation..........................- 18 i 6.04 Transfer of Ownership or Cisqualifi-cation of the Nine Mile Unit Two Qualified Fund ................ 19-6.05 Transactions With Third Parties...... . 20~ j l 6.06 Accounts and Reports................. 20. ;

L 6.07 Tax Returns and Other Reports........ 23: 1 l- 6.08 Liability.............. ............. 26 L 6.09 Indemnity............................ 26 6.10 Liability for Self-Dealing........:... 27' L ARTICLE VII. INVESTMENTS...'....................... 27 l

L ~ 7 . 01 - Appointment of Investment Manager.... 12 7 7.02 Direction by Investment Manager...... 28 g ARTICLE VIII. TRUSTEE'S GENERAL POWERS............. 31 8.01 Negotiation of Claims................ 31 8.02 Registration and Deposit of Securities....................... 31

? 8.03 -Borrowing............................ 32 8.04 Retention and Removal of Pro-fessional and Employee Services.... 32 l 8.05 Discretion in Exercise of Powers..... 33 l l

ARTICLE IX. TRUSTEE'S INVESTMENT POWERS.......... 33 l

(ii)

[

t. 4 6

. n e

v o s

Page s 9.01 Investment of Nine Mile Unit Two Qualified Fund..................... 34 9.02 Investment of-Uninvested 7ssets...... 36

'9.03 Management of Assets.. .............. 37 9.04 Extension of Obligatior.4............. 37 9.05 Limitations on Investment Discretion. 37 ARTICLE X. MISCELLANEOUS......................... 38 10.~ 01. Headings............................. 38 10.02 Particular Words..................... 38 10.03 Severability of Provisions........... 39 10.04 Delivery of Notices Under Agreement.. 39 10.05 Alterations and Amendments........... 40 10.06 Successors and Assigns............... 41 10.07 Governing Law........................ 41 10.08 Accounting Year...................... 41 10.09 Counterparts......................... 41 10.10 Form of Communications............... 41 10.11 No obligation to Act on Unsatisfactory Notice..............- 42 10.12' Successor to the Trusteo............. 42 EXHIBIT A. CERTIFICATE c.

(iii) 2 .- . _ __ _ __ - _ - - - _-_____

y=

NUCLEAR DECOMMISSIONING TRUST AGREEMENT AGREEMENT made this 12th of March, 1990, by and between New York State Electric.& Gas Corporation, a New York corporation (" Company"), and' Bankers Trust Company, a New York banking company having trust powers (" Trustee").

RECITALS OF THE COMPANY WHEREAS, the Company is the owner of an eighteen percent-(18%) undivided interest in Nine Mile Unit Two; and WHEREAS, the Company is subject to regulation by the New York Public Service Commission ("NiPSC"), an agency of the State of New York created and existing pursuant to-N . Y . Pub . S er . Law 5 1, et seq. and the Nuclear Regulatory Commission.("NRC"), an agency of the United States govern-ment created and existing pursuant to 42 U.S.C.- 5 5841; and WHEREAS,=the NYPSC has permitted the company to include in its cost of service for ratemaking purposes

-certain amounts in order to provide monies for the. company's share of expenses with respect to the Company's ownership

-interest in Nine Milt Unit Two; and WHEREAS, pursuant to Section 468A' of the Code, certain Federal income tax benefits are available to the

Company by creating and making contributions to-a qualified m

nuclear decommissioning reserve fund associated with the Company's ownership interest in Nine Mile Unit Two; and WHEREAS, the Company wishes to establish a qualified nuclear decommissioning reserve fund to hold monies for decommissioning Nine Mile Unit Two; and WHEREAS, the Company wishes to establish a Trust for the investment of the assets of the qualified nuclear decommissioning reserve fund for Nine Mile Unit Two.

RECITALS OF TRUSTEE WHEREAS, the Trustee is a New York banking company with trust powers; and WHEREAS, the Trustee is willing to serve as trustee to the Trust on the terms and conditions herein aet forth.

NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company hereby agrees to deliver to the Trustee and the Trustee hereby agrees to j receive contributions to the Trust beginning on the date first written above; csqd TO HAVE AND TO HOLD such assets; and TO INVEST AND REINVEST the assets of the Trust as provided herein; and

5 TO PAY OR DISTRIBUTE from the Trust as provided herein; IN TRUST NEVERTHELESS, for the uses and purposes and upon the terms and conditions, as hereinafter set forth.

i I. DEFINITIONS 1.01 Definitions. As used in this Nuclear ,

-Decommissioning Trust Agreement, the following terms shall have the following-meanings:

l L (1)- " Agreement" shall mean this Nuclear Decommissioning Trust Agreement as the same may be amended, modified, or supplemented from time to time.

(2) " Authorized Representative" shall mean

. persons authorized by tha-Company to act on its behalf,.

as specified in Section 2.05~ hereof.

(3, " Certificate" shal1~mean a document properly completed and executed by an Authorized Representative p and substantially'in the' form of. Exhibit A hereto.- l j;

D (4) " Code" shall-mean the Internal Revenue Code of'1986, as the same may be amended from time to: time, q and any reference in this Agreement to'a section of the.

L j Code shall include that section of the Code and'the regulations promulgated thereunder. ,

(5) "Commisr> ion" shall mean any public regulator u

or regulatory body or instrumentality, agency or offi-L 4

-3 l

4-cial (judicial or otherwise) directly- or indirectly of the United States, or any state or political subdivi-sion thereof, as the case may be, having authority to fix rates for.the furnishing or sale et d;;betrical energy, to set standards for the maintenance of Nine Mile Unit Two and/or to supervise the decommissioning i ,

of Nine Mile Unit Two.

, (6) " Committee" shall mean the Investment Com-mittee established by the Company's Board'of Directors

-,nnsisting of two or more individuals appointed thereby. The Company has empowered the Committee to direct the investment management of all assets of the.

Trust and to perform all duties attendant thereto, including the appointment of trustees, Authorized

.l Representatives and Investment Managers (which may

.t-include the Trustee) and the execution of~whatever 1'

contracts, agreements, or other documents that the Committee deems necessary to manage and invest such.

assets. Each member of the Committee shall serve'at the Company's will and the Company shall notify the Trustee in a written statement signed by the Company's Secretary'or Ar31stant Secretary of all appointments

.and replacements of Committee members.

J- ,

- , r,

(7) " Company"'shall mean New York State Electric

& Gas Corporation.

.(8) " Contribution" shall mean any' cash'or other property contributed to the Nine Mile Unit Two Qualified Fund provided, however, that if other property is' contributed, " Contribution" shall mean any, property contributed to the Nine Mile Unit Two Qualified Fund that is-acceptable to the Trustee.

(9) " Decommissioning costs" shall mean the ex-penses incurred in decommissioning Nine Mile Unit Two.

(10) " Excess Contribution" shall have the meaning set forth in Section 3.03 hereof.-

(11) " Investment Account" shall mean an account-established by the Trustee pursuant to Section 7.01 hereof.

' ( 12 ) - " Investment Manager" shall mean any fiduciary specified as'such in Investment Manager Agreement. The Committee, as well as any employee of the-Company or its affiliated companies, may be appointed as an Investment Manager.

(13) " Investment Manager Agreement" shall mean any agreement or other evidence of authority between the Company and an Investment Manager selected by the

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< management of all or a portion of the Trust.

1 (14) "Nine Mila Unit Two" shall mean Nine Mile Point nuclear generating unit No. 2.

(15) "Nine Mile Unit Two Qualified Fund" shall mean the nuclear decommissioning reserve fund esta-blished for Nine Mile Unit Two pursuant-to Section 468A ;

of the Code and shall consist of contributions by the Company for decommissioning Nine Mile Unit Two plus ,

earnings and appreciation thereon, which Contributions

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are referenced in a Schedule of Ruling Amounts with respect to Nine Mile Unit Two.

(15) "NRC" shall mean the Nuclear Regulatory 9 31 Commission, as defined in 42 U.S.C. S 5841.

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,(17) "NYPSC" shall mean the New York Public iiJ

.'~ Service: Commission,-as defined-in N.Y. Pub. Ser. Law S 1, et seq.

(18)' " order" shall mean any order relating to decommissioning Nine Mile Unit Two that is issued by a 4,

Commission.

Z (19) " Schedule of Ruling Amounts" shall,mean the e schedule of " ruling amounts" (as such term is defined in Section -468A(d) (2) of the Code (or any applicable successor provision)).

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k (20) " Service" shall mean the Internal Revenue Service.

'(21) " Trust" shall mean the trust established.

pursuant to Section 2.02(a) hereof, which shall consist of the Contributions to the Nine Mile Unit Two Qualified Fund by the Company pursuant to this ,

Agreement together with the earnings and appreciation-thereon.

(22) " Trustee" shall mean Bankers Trust Company, or any successor appointed pursuant to Section 6.01' hereof.

II. ESTABLISHMENT OF TRUST 2.01 Trust Purposes. The exclusive purposes of this Trust are to hold funds for the contemplated decommissioning of Nine Mile Unit Two, to constitute a qualified nuclear decommissioning reserve fund for Nine Mile .

Unit Two (the Nine Mile Unit Two Qualified Fund being established pursuant to Section 468A~of the' Code) and to comply with any order.

2.02 Trust Established and' Trustee Appointed. By j

. execution of this Agreement, the Company:

(a) establishes the Trust which shall be effective-March.12- 1990, and which'shall consist of such Contributions as may be delivered to the Trustee

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by the company for the Nino Mile Unit Two Qualified l Fund and the earnings and appreciation thereon; and (b) appoints Bankers Trust Company as Trustee of the Trust.

2.03 Acceptance of Appointrent. Upon the terme and conditions herein set forth, Bankers Trust Company accepts the appointment as Trustee of this Trust. The Trustee shall receive any Contributions deposited with it by the company and shall hold, manage, invest and administer-such contributions, together with the earnings and appreciation thereon, in'accordance with this Agreement.

2.04 Name of Trust. The Contributions received -

by the Trustee from the Company together with the earnings and appreciation thereon shall constitute the "New York State Electric &1 Gas Corporation Nuclear Decommissioning Trust."

2.05 DutiesLof Authorized Representatives. The company has empowered the Authorized Representatives and their delegates to-act for the Company in all respects here-under.- The Authorized Representatives may act as a group or l may designate one or more Authorized Representatives or i

delegates to perform the duties dcscribed in the foregoing sentence. The Committee shall provice the Trustee with a written statement setting forth the names and specimen sig-l

fi' natures of the Authorized Representatives. The Authorized !

l Representatives shall provide the Trustee with a written-statement setting forth the names and specimen signatures of any delegate of the Authorized Representatives.

2.06 No Authority to Conduct Business. The pur-poses of this Trust are limited specifically to the matters j set forth in Section 2.01 hereof, and there is no objective.

to carry on any business unrelated to the Trust purposes set forth in Section 2.01 hereof, or divide the gains therefrom.

2.07 No Transferability of Trust. Except in the ,

case of a situation described in Section 5.04 hereof and except as provided in sections 3.03 and 6.04 hereof, the interest of the Company in the Trust is not transferable, l whether voluntarily or involuntarily, by the company nor-is l it'subjact to the claims of creditors of the Company. l Notwithstanding anything in the preceding sentence to the contrary, upon receipt of a certificate that has been properly completed and submitted to the Trustee, the Trustee 1 shall comply with the provisions of Sections 4.01 and 4.02 ;

of this Agreement.

III. CONTRIBUTIONS AND INCOME 3.01 Initial Contribution. Upon the establish-ment of this Trust on the date first written above, the

J Company shall cause to be delivered to the Trustee an ,

initial Contribution.

1 L 3.02 Additional Contributions. From time to time ,

after the initial Contribution to the Trust and prior to the V k l

termination of this Trust, the Company may make, and the Trustee shall accept, additional Contributions to the Trust to satisfy the purposes of this Trust as set forth in Section 2.01 hereof.

3.03 Subsequent Adjustments. The Trustee and the Company understand and agree that the contributions made by the Company to the Nine Mile Unit Two Qualified Fund from time to time may exceed the amount permitted to be paid into L the Nine Mile Unit Two Qualified Fund pursuant to Section 468A of the Code (or any applicable successor provision) i

. based upon changes in estimates, subsequent developments or any other event or occurrence which could not reasonably have been foreseen by the company at the time such contribu-tion was made (" Excess contribution"). Upon receipt of a ,

written directive of the Company signed by an Authorized Representative setting forth the amount of the Excess Con-tribution and stating that-the Excess Contribution and any earnings and appreciation thereon shall be paid from the Nine Mile Unit Two Qualified Fund to any person or entity, including but not limited to the company, the Trustee shall 1

pay such Excess Contribution to the person or entity j specified by the company in the written directive, f 3.04 Trustee Not Responsible for Enforcing Payment of Contributions. Notwithstanding anything in this Article III to the contrary, the Trustee shall have no responsibility to any person for enforcing payment of any Contributions to, or for the timing, computation, deductibility or amount thereof, or for the adequacy of the Nine Mile Unit Two Qualified Fund or the funding standards adopted by the company to meet or discharge any Decommis-sioning Costs or other liabilities in connection with Nine Mile Unit Two.

IV. DISTRIBUTIONS 4.01 Payment of Decommissioning Costs. Upon receipt of a Certificate, the Trustee shall make payment of Decommissioning Costs from the Nine Mile Unit Two Qualified Fund.to any person'(including the Company) for goods 1

provided or labor or other services rendered in connection with the decommissioning of Nine Mile Unit Two.

l 4.02 Payment of Expenses of Administration. Upon receipt of a Certificate, the Trustee shall make payments of .

administrative costs (including, but not limited to, fees L -.for legal services rendered to the Trustee after the date of

\ l L this Agreement, taxes, reasonable out-of-pocket expenses l'

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t incurred by the Trustee after the date of this' Agreement and i

Trustee's fees), Investment Manager Fees, and other f 1

incidental expenses of the Trust (including legal, accounting and actuarial expenses) in connection with the operation of the Trust pursuant to this Agreement. Anything herein to the contrary notwithstanding, upon the expiration of = thirty (30) days' notice to the Company, the Trustee f shall be-authorized to charge the Trust for payments and ;

l expenses not reimbursed by the company or evidenced by the presentation of a certificate. l 4.03 Reliance on Committee. The Trustee shall not be responsible for the content of any certificate- j delivered to it under any provision of the Agreement. Each direction to the Trustee in a certificate shall constitute a l certification by the Company that such direction is in accordance with all applicable laws and regulations and the L terms of this Agreement, and that all requisite consents, l

waivers or approvals of any Commission or.any other person ,

have been duly and validly obtained, given or' waived, as the ;

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f case may be. The Trustee may rely _ conclusively on any such ,

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Certificate and shall have no duty to make any independent L

I inquiry or investigation before acting upon any direction i.

contained therein.

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4.04 Fees. The Trustee shall' receive as ex-clusive compensation for its services pursuant to this Agreement those amounts specified in such fee schedule as may from time to time be agreed upon in writing by the Trustee and the Company. >

4.05 Trustee Entitled to Reimbursement. Anything

, in the preceding Sections 4.02 and 4.03 to the contrary notwithstanding, the Trustee's entitle 4 c.t to charge such administrative expenses to the Trust shall constitute a lien on the assets of the Trust and the Company shall reimburse the Trustee for any such expenses if for any reason such expenses are not paid out of the Trust. The Trustee's

1. _

entitlement to reimbursement hereunder shall not be affected by the resignation or removal of the Trustee or by the termination of the Agreement or of the Nine Mile Unit Two Qualified Fund.

4.06 Liquidation of Investments. At the'direc-tion of the Company or an Investment Manager, the Trustee shall sell or liquidate such investments of the Nine Mile Unit Two. Qualified Fund as may be specified and credit the proceeds of any such sale car liquidation _ to the Nine Mile l

Unit Two Qualified Fund.

l V. : TERMINATION 5.01 Termination of Nine Mile Unit Two Qualified General. The Nine Mile Unit Two Qualified Fund

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Fund in shall terminate upon the earliest of:

(a) the date specified as the date that the Nine Mile Unit Two Qualified Fund shall terminate in a j written notification to the Trustee from the company; 1

(b) substantial completion of_the nuclear decom-missioning of Nine Mile Unit Two (as defined in Section 468A of the Code, or any applicable successor I provision), as evidenced by written notification of I that fact to the Trustee by an Authorized l Representative; or (c) twenty-one (21) years after the death of the last survivor of each person who was an officer of the j company or of the Company's affiliated companies on the 1 date of this Agreement:and each of their descendants i living on said date.

5.02 Termination of Nine Mile Unit Two Qualified )

l Fund Upon Disqualification. Notwithstanding the provisions I l

of Section.5.01 hereof, unless the Company provides written l l notice to the Trustee of its decision not to terminate the H Nine Mile Unit Two Qualified Fund, the Nine Mile Unit Two ;

L Qualified Fund shall terminate upon its disqualification I l 1

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. 4 from the application of Section 468A of the Code (or any

' applicable successor provision), whether pursuant to an administrative action on the part of the Service or the t

decision of any court of competent jurisdiction, but in no event earlier than the date on which all available appeals have been either prosecuted or abandoned and the. period of time for making any further appeals has elapsed.

5.03 Termination of Nine Mile Unit Twn Qualified Fund on Sale of Nine Mile Unit Two. Notwithstanding the provisions of Section 5.01 hereof, unless the Company provides written notice to the Trustee of-its decis!.on not to terminate'the Nine Mile Unit-Two Qualified Fund, the Nine Mile Unit Two Qualified Fund shall terminate upon the ,

Company's= sale or other disposition of all or-a portion of its ownership interest in Nine Mile Unit Two to the extent provided in Section 468A of the Code-(or any applicable

- succecsor provision).

5.04 Distribution of Nine Mile Unit Two Qualified Fund Upon Termination. Upon termination of the-Nine Mile Unit Two Qualified Fund (whether following an occurrence describe 6 in Section 5.01, 5.02, 5.03 or 6.04=herein, or otherwise), the Trustee shall liquidate the assets of the

- Nine Mile Unit Two Qualified Fund and. distribute the then-existing assets thereof (including accrued, accumulated and

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-l undistributed net income), less final Nine Mile Unit Two q Qualified Fund administration expenses (including accrued l l

taxes),: to the Company; provided, however, that no such {

distribution shall be made unless either (a) an order has ,

been issued which specifically authorizes such-distribution

)

or (b) the Trustee has received an opinion of legal counsel in form acceptable to the Trustee (which may be from legal counsel.to the Company) to the effect that no such Order is !

necessary to authorize such distribution. i 5.05 Powers of Trustee and Investment Manager to Continue Until Final Distribution. The Trustee shall have !

the authority to exercise any of the powers described in '

Articles VIII and IX of this Agreement and any Investment '

Manager appointed pursuant to Section 7.01 hereof shall have the authority to exercise any of the powers described in 1 i

Section 7.02 hereof, in each case after the date on which the principal and income of the Trust shall have become !

distributable and until such time as the entire principal i

of, and. income from, the Trust shall have been actually distributed by the Trustee. It is intended that distribution of the Nine Mile Unit Two Qualified Fund will occur as soon as possible upon termination of the Nine Mile

' Unit Two Qualified Fund, subject, however, to the i limitations contained in-this Article V.

< l VI. TRUSTEES. l 6.01 Designation and Qualification of Successor L'

Trustee. At any time during the term of this Trust, the i

company shall have the right to remove the Trustee (at the !

Company's sole discretion) acting hereunder and appoint i

another qualified entity ac a Successor Trustee upon forty- !

five (45) days' notice in writing to the Trustee, or upon l such shorter notice as may be acceptable to the Trustee. In the event that the Trustee or any successor Trustee shall: !

(a). become insolvent or admit in writing its insolvency; (b) be unable or admit in writing its inability to pay its debts 4 as such debts mature; (c) make a general assignment for the benefit of creditorst (d).have an involuntary petition in 4

bankruptcy filed.against it; (e) commence a case under or otherwise seek to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law, statute, or proceeding, or .

(f) resign, the Company shall appoint a successor Trustee as soon as is practicable after the occurrence of such event. .

In the event of any such removal or resignation, the Trustee or. Successor Trustee shall have the right to have its accounts settled as provided in Section 6.06 hereof. If for any reason the company cannot or does not appoint a Successor Trustee within thirty (30) days after removal of 1.

T the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee.

The Trustee shall charge any expenses incurred in connection ,

therewith to the Nine Mile Unit Two Qualified Fund and shall be reimbursed. therefor. Any succesoor to the Company, as provided herein, shall have the same right to remove and to appoint any Trustee or successor Trustee.

Any Successor Trustee shall qualify by a duly acknowledged acceptance of this Trust, delivered to the Company. Upon acceptance of such appointment by the-Successor Trustee, the Trustee shall assign, transfer and pay over to such Successor Trustee the monier and properties then constituting the Trust. Any Successor Trustee shall have all the rights, powers, duties and obligations.herein granted to the original Trustee.

6.02 Exoneration from Bond. No bond or other

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security shall be exacted or required of any Trustee or Successor Trustee appointed pursuant 'to this Agreement. .

p 6.03 Resignation. The Trustee or any Successor Trustee hereof may resign and be relieved as Trustee at any time without prior application to e approval by or order of l- any court by a duly acknowledged inst 2 ment, which shall be delivered to the Company by the Trustee no less than sixty (60) days prior to the effective date of the Trustee's

resignation or upon such shorter notice as may be acceptable to the Company. If for any reason the Company cannot or does not appoint a Successor Trustee within thirty (30) days af ter the resignation of the Trustee, the Trustee may apply to a' court of competent jurisdiction for the-appointment of' ,

a successor Trustee. The Trustee shall charge any expenses :i incurred.in connection therewith to the Nine Mile Unit Two

-Qualified Fund and shall be reimbursed therefor.

6.04 Transfer of ownership or Disqualification of the Nine Mile Unit'Two Qualified Fund. (a) If the Com- ;

pany's direct ownership interest in Nine Mile Unit Two is sold,-exchanged, or otherwise disposed.of, in whole or in part,=or (b) if the Nine Mile Unit Two Qualified Fund terminates by reason of its disqualification from the application of Section 468A of the Code (or any applicable successor provision) (as provided in Section 5.02 hereof), !

and the Company elects to transfer any portion of the Nine ,

Mile Unit Two Qualified Fund which is deemed distributed to the Company under Section 468A of_the Code (or any' !

applicable successor provision) into a separate trust for the benefit of the. Company's successor in interest, or into >

l a fund which does not meet tha requirements of Section 460A of the Code (or any. applicable successor provision), the I

L company shall provide written notice of such election to the l

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' Trustee; which notice shall specify the amount that the Trustee shall transfer to the separate trust or fund. The Trustee may enter into a separate trust agreement with.the company's successor in interest containing substantially the same terms set ~forth herein and shall' transfer to the ,

separate trust or fund the amount specified in such written notice. In the event that the Company's successor selects another trustee to administor the separate trust or fund, the Trustee shall transfer the amount specified in such written notice to.such other trustee, and the Trustee shall '

have-no further duties or obligations in connection with

. respect to the amount transferred or with respect to the separate trust or fund. Transfers made pursuant to this Section 6.04 shall be in cash only, in kind-or in a

- combination of cash and in kind as reasonably agreed to by d

the Company and the Trustee pursuant to any then applicable law.

6.05 Transactions With Third Parties. No person or organization dealing with the Trustee hereunder shall be l

[ required to inquire into or to investigate the Trustee's authority for entering into any transaction or to see to the application of the proceeds of any such transaction..

6.06 Accounts and Reports. The Trustee shall keep accurate and detailed accounts of all investments, e

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receipts and disbursements and other transactions hereunder in accordance with specifications mutually agreed to in writing by the Trustee and the company, and all accounts, -!

books and records relating thereto shall be open.to inspec-tion and audit at all reasonable times by any person desig-nated by the Corpany. Within thirty (30) calendar days following the close of each accounting year (as described in.

Section 10. 08 r ereof) , or such shorter period as the Trustee .

and the company mutually agree to in writing, and as soon as ,

is practicable following the close of each calendar month, ,

the Trustee shall file with the company a written report setting forth all investments, receipts and disbursements and other transactions. effected by the Trustee during the preceding accounting year or calendar month, as the case may be, and containing an exact descriptior. of all cash and i securities contributed, purchased, sold or distributed and. !

the cost or net proceeds of sale, and showing all cash, and !

securities and other investments held at the end of such '

accounting year or calendar month, as the case may be, and i i

the cost and fair market value of~each item thereof as q carried on the books of the-Trustee. Such accounts and ,

' reports shall be based on.the accrual method of reporting income and expenses and chall identify all disbursements.

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f t from the Nine Mile Unit Two Qualified Fund made to pay i Decommissioning Costs or Administrative Expenses.

Upon the expiration of one year from the date of the filing with th0 Company of each yearly written report (reflecting tra.sactions effected by the Trustee during the preceding accounting year), the Trustee shall be forever released and discharged from all liability or accountability to anyone with respect to all acts and transactions shown in such written yearly report, as well as with respect to all acts and transactions shown in any written report filed by the Trustee following the close of any calendar month within such preceding accounting year, except for such acts or transactions as to which the company shall take exception by notice to the Trustee within such one-year period 7 provided, however, that nothing contained herein shall be deemed to relieve the Trustee of any liability which may be imposed- ,

pursuant to Section 6.08 or 6.10 hereof. In the event that ,

l any exception taken by the company cannot be amicably I adjusted, the Company may file the written report in a court having jurisdiction and any and all such exceptions which

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have not been amicably settled shall be heard and adjudicated.

All records and accounts maintained by the Trustee

-with respect to the Trust shall be preserved in accordance l l

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- 1 with and for such period that conforms to the Trustee's ordinary document retention policy, unless the Trustee and i

the Company mutually agree in writing that the Trustee shall 1

preserve such r3 cords for a longer period. Upon the expiration of such period, the Trustee shall have the right ,

to destroy.such records and accounts after first notifying the Company in writing of its intention and transferring to e the Company any records and accounts requested by the Company.

6.07 Tax Returns and Other Reports. The Trustee shall prepare and timely file all Federal, state and local income or franchise tax returns or other reports (including estimated tax returns and information returns) as may be required from time to time with respect to the Nine Mile Unit Two Qualified Fund, and the Company agrees to provide the Trustee i'n a timely manner with any information within its possession, and to cause the Investment-Manager to provide the Trustee with any information in its possession, which is necassary to such filings.- The company further agrees to provide timely written notification to the Trustee 1

L of any circumstances, including but not limited to an-expansion of the Company's business operations, which may require the Trustee to amend tax returns or other reports which it has prepared or is in the process of preparing; to

file additional-tax returns or other reports as may be required by applicable laws or regulations; or to'otherwise .

comply with applicable Federal, state and local laws and regulations. Moreover, in the event of such change la circumstances, the Company shall reimburse the Trustee for y any costs, disbursements and other expenses (including but not limited to fees for legal services rendered to the Trustee) incurred in connection with any additional ,

investigative, preparatory or other duties which the Trustee is required to perform as a result of such change in circumstances. Upon the Company's request for information regarding the Nine Mile Unit Two Qualified Fund that is required to be included in its Federal, state and local income or franchise tax returns or other reports (including estimated tax returns and information' returns), the Trustee shall prepare and submit all such information to the Company in a timely manner. subject to the limitations contained in Section 8.04 hereof, the Trustee may employ independent certified public accountants or other tax counsel to prepare or review such returns and reports. The Trustee agrees to ,

sign any tax returns or other reports when required by law toldofso or arising out of the Trustee's responsibilities

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hereunder, and to remit from the Trust' appropriate payments or deposits of Federal, state and local income or franchise ,

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,r 4 taxes (including estimated taxes) directly to th6 taxing agencies.cn: authorized depositaries in a timely manner. j Notwithstanding Section 6.08 hereof, any interest or penalty charges assessed against the Nine Mile Unit Two Qualified Fund pursuant to Chapters 67 or 68 of the Code (or any-applicable successor provisions), or pursuant to any similar state or local tax provisions, arising as a result of the Trustee's failure to comply with this Section 6.07 and not

^

attributable to any acts or omissions of the company or an Investment Manager shall be borne by the Trustee and not the Nine Mile Unit Two Qualified Fund. The Trustee agrees to notify the company in writing within ten days of the commencement of any audit of the Nine Mile Unit Two Qualified Fund's Federal, state, local, or franchise tax returns or other reports (including estimated tax returns and information returns), and to participate with the company on behalf of the Nine Mile Unit Two Qualified Fund in such audits and related inquiries. The Trustee further agrees to provide the company with any additional v

information in its possession regarding the Nine Mile Unit Two Qualified Fund which may be requested by the Company to be furnished in an audit of the Company's Federal, state, local, or franchise tax returns or other reports (including estimated tax returns and information returns).

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i 6.08 Liability. The Trustee shall not be liable ;

for any acts, omissions or defaults of any agent (other_than its officers and employees) or depositary appointed or selected with reasonable care. The Trustes shall be liable. ;

for only its own acts or omissions (and those of its officers and employees) in performing the duties specifically undertaken by it hereunder which are occasioned -l by its bad faith, negligence or willful misconduct (or that ;

of its officers and= employees).

6.09 Indemnity. In consideration of Bankers Trust Company's agreeing to enter into this Agreement and to j

(

act as Trustee hereunder, the Company hereby agrees to hold i harmless Bankers Trust Company, individually and as Trustee, and Bankers Trust Company's directors, officers, and ;

employees,-from and against all amounts, including without limitation taxes, penalties, expenses (including reasonable counsel fees), liabilities, claims, damages, actions, suits or-other charges, incurred by or assessed against Bankers Trust Company, individually or as Trustee, or its directorc, officers or employees, arising out of this Agreement ~or its acting as Trustee, other than those incurred as a result of ;

-its own-bad faith, negligence or willful misconduct. The undertaking made in this Section 6.09 shall be binding on !

the Company, its successors or assigns and shall survive l

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.1 termination, amendment or restatement of this Agreement, or-the resignation or removal of the Trustee. ,

6.10 Liability for Self-Dealing. Anything in '

this Agreement to'the contrary notwithstanding, the Trustee (and not the Trust) shall be-liable for any tax imposed on the Trustee pursuant to Section 4951 of the Code (or-any applicable successor provision) as such section is made ,

applicable to the Trust, the Nine Mile Unit Two Qualified Fund, or the Trustee.

VII. INVESTMENTS 7.01 Appointment of Investment Manager.

Initially, the Trustee shall have investment responsibility for this Trust. However, the Committee may appoint ene or more Investment Managers to direct the investment of all or ;

Whenever such appointment is made, the

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part of the Trust.

Committee shall provide written notice of such appointment- '

to the Trustee, shall specify the portion of the Trust with respect to which an Investment Manager has been designated, and shall instruct the Trustee to segregate into an i'

Investment Account.those assets'with. respect to which that specific Investment Manager has been designated. lExcept as 1

l otherwise provided in Article IX hereof, to the extent that L

the Company authorizes an Investment Manager to direct the investment of an Investment Account, the Trustee shall be l l

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released and relieved of all investment duties, i responsibilities and liabilities customarily or statutorily incident'to a trustee with respect to the Investment r K- ,

Account, and as to such Investment Account, the Trustee shall act as custodian. The Company shall certify in i

writing to the Trustee that any Investment Manager appointed pursuant to this section 7.01 is duly authorized to act in the capacity specified in an Investment Manager Agreement

. with such Investment Manager. Such Investment Manager shall certify in writing to the Trustee that it accepts its

. appointment as Investment Manager, shall certify the identity of the person or persons authorized to give instructions or directions to the Trustee on its behalf, including specimen signatures, and shall undertake to perform the duties imposed on it under an Investment Manager Agreement. The Trustee may continue to-rely upon all such-certifications unless otherwise notified in writing by the Company or an Investment Manager, as the case may be.

7.02 Direction by Investment Manager. An Investment Manager designated by the Committee to manage an

. Investment Account shall have authority to manage,and to direct the acquisition and. disposition of the assets of the s may be.

Trust, or a portion thereof, as the ca~e The Trustee shall exercise the powers set forth in Article VIII 1

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and in Section 9.02(b) hereof only when, if, and in the manner directed by the Investment Manager in yriting, and-shr.il not be under any obligation to invest or otherwise 4 manage any assets in the Investment Account. An Investment Manager shall have the power and authority, exercisable in its sole discretion at any time, and from time to time, to issue and place orders for the purchase or sale of. portfolio securities directly with qualified brokers or dealers. The Trustee, upon proper notification from an Investment Manager !

1 (the manner of notification being such as is agreed-upon by :

the Trustee and Investment Manager), shall settle the f transactions in accordance with the appropriate trading authorizations. Written notification of the issuance of ,

1 each such authorization shall be given promptly to the ;

Trustee-by an Investment Manager,.and such' Investment Manager shall cause the settlement of such transaction to be confirmed in_ writing to the Trustee, and to the company, by' l the broker or dealer. Such notification shall be--proper-authority for the Trustee to pay for portfolio securities purchased against receipt thereof and to deliver portfolio j securities sold against payment therefor, as the case may_ i be. All directions to the Trustee by an Investment Manager shall be in writing and shall be signed by a person who has been certified by such Investment Manager pursuant to l

Section 7.01 hereof'as authorized to give instructions or directions to the Trusteo.

Should an Investment Manager at any time' elect to .

-place security transactions directly with a broker or dealer,=the Trustee shall not recognize such transaction-unl'ess and until it has received instructions or confirmation of such fact from an Investment Manager.

Should an-Investment Manager direct the Trustee to utilize the services of any person with regard to the assets under ,

I its management or control, such instructions shall be in writing and shall specifically set forth the actions to be taken by the Trustee as to such services. In the event that an Investment Manager places security transactions directly or directs.the utilization of a service, such Investment i Manager shall be solely responsible for the acts of such persons.; The sole duty of the Truste2 as to such transactions shall be incident to its duties as custodian.

The authority of an Investment Manager and the terms and conditions-of the appointment and retention of an Investment Manager shall be the responsibility solely of the l

Committee, and the Trustee shall not be deemed to be a party or to have any obligations under any agreement with an ,

Investment Manager. Any duty of supervision or review of the acts, omissions, or overall performance of an Investment t

Manager shall be the exclusive responsibility of the JCommittee, and the Trustee shall have no duty to review any_

securities or other assets purchased by an Investment Manager, or to make suggestions to an Investment Manager or to the Committee with respect to the. exercise or nonexercise of any power by an Investment Manager. .

VIII. TRUSTEE'S GENERAL POWERS The Trustee shall have, with respect to the Trust, the following powers, all of which powers are fiduciary

_ powers to be exercised in a fiduciary capacity and in the' >

beet interests of this Trust and the purposes hereof, namely:

8.01 Negotiation of Claims. To adjust, settle, Lcompromise and arbitrate claims or demands in favor of or against'thisETrust, including claims for taxes, upon such terms as the-Trustee may deem advisable, but without obligation to do so and all at the risk and expense (including, but not limited to, fees for_ legal services l l

rendered to the Trustee) of the Trust.

8.02 Registration and Deposit of Securitics. To i:

hold any stocks, bonds, securities, or other property in the name of a nominee, in a street name, or by other title-holding device without indication of trust, and to deposit j 1

or to arrange for the deposit of securities held in the Nine i

c ,

Mile Unit Two Qualified Fund with The Depository Trust

-Company (New York) or another depository approved by the company even though, when so deposited, such securities may be held in the name of the nominee of such' depository with other securities deposited therewith by other persons, or to <

deposit or to arrange for the deposit of any. securities _ I issued or guaranteed by the United States Government, or any agency or instrvmentality thereof, with a Federal Reserve Bank even though, when so deposited, such securities may not be held separately from securities deposited therein by other persons, provided, however, that no securities held in the Nine Mile Unit Two Qualified Fund shall be deposited with a Federal Reserve Bank or other depository in the same account as any individual property of the Trustee, and l provided further that the books and records of the Trustee shall at all times show that all such securities are part of the Nine Mile Unit Two Qualified Fund.

8.03 Borrowing. .To borrow money in such amounts -

and upon such terms as the_ Company may authorize in writing l

as necessary to carry out the purposes of this Trust, and to pledge any securities or other property for the repayment of any such loan as the company may direct.

8.04- Retention and Removal of Professional and Emoloyee Services. Upon notice to the Cor.pany, to employ, l

.i.

i i

h retain and remove attorncys, accountants, custodians, ,

i engineers, contractors, clerks and agents as necessary and proper for the administration of this Trust. j i

8.05 Discretion in Exercise of Powers. To do any and all other acts which the Trustee shall deem proper to effectuate the powers specifically conferred upon it by this Agreement, provided, however, that the Trustee shall-be 1 entitled to assume without further inquiry that any notices, regulatory approvals or procedures required to be given, obtained and observed, as the case may be, have been given, obtained or observed and that any action taken by the 1

Company, an Authorized Representative, the Committee, or an_ ;

Investment Manager, does not violate the provisions of this Agreement or applicable law or regulation. Anything herein {

to the. contrary notwithstanding, the Trustee may not engage in any transaction which would constitute either a violation-of Section 468A of the Code (or any applicable' successor provision) or an act of "self-dealing" within the meaning of Section 4951 of the Code (or any applicable-successor provision).

IX. TRUSTEE'S INVESTMENT POWERS The Trustee recognizes the authority of an Investment Manager to manage, invest, and reinvest the assets in an Investment Account pursuant to an Investment i

Manager Agreement and as provided in Article VII hereof. To i i

the extent that the assets of the Trust have not been allocated to an Investment Account under the investment I control of an-Investment Manager, upon the written i instructions of the Committee, and, to the extent provided j i

in' Sections 9.03(a) and (b) hereof, the Trustee shall have _

the following investment powers all of which are fiduciary j powers to lua executed in a fiduciary capacity and in the best interest of this Trust and the purposes hereof, namely: ,

9.01- Investment of Nine Mile Unit Two Qualified l Fund. To invest and' reinvest all or part of the Nine Mile

-Unit Two Qualified Fund, including any undistributed income therefrom; provided, however, that investments and reinvest-i ments of the Nine Mile Unit Two Qualified Fund: i (a) nay be made by the Trustee only in -- ,

(i) public debt securities of the United 1 States; j (ii) obligations of a-state or local govern- l ment which are net in default as to- !

principal or interest and which are not a security issued by the New: York State Energy Research and Development Authority for the benefit of the company; and 4

t

~34-m

1 l.

L (iii) time or demand deposits in a bank (as a.

such term is defined in Section 581 of the Code, or any applicable successor provision) or an insured credit union (within the meaning of Section 101 of the Federal Credit Union Act, 12 U.S.C.

1752) located in the United States, and (b) may not be made by the Trustee --

l (i) in any bank, savings and loan association, or other financial institution whose deposits are not insured by the Federal Deposit Insurance Corporation, the Federal Savings & Loan Insurance Corporation, or other comparable Feceral agency; or (ii) Which would contravene any instructions issued by the Committee or the Company.

In all cases, however, the total investments by 1 the Trustee must be sufficiently liquid to enable the Trust to fulfill the purposes of the Trust and to satisfy obligations of the Trust as such obligations become due.

The Company shall notify the Trustee of the-liquidity requirements of the Trust. Nothing in this Section 9.01 <

4 l

i l

I shell be construed as authorizing the Trustee to carry on any business or to divide the gains therefrom. ,

9.02 Investment of Uninvested Assets.

(a) to the extent that, on any given day, assets allocated to an Investment Account or assets in the Nine Mile Unit Two Qualified Fund that have not been I

allocated to an Investment Account have not been invested, to temporarily invest such uninvested assets in a fund designated by the Trustee (which fund shall neither be a common, collective or commingled trust fund nor violate the provisions of Section 468A of the -

code (or any applicable successor provision);

(b) to the extent that, on any given day, assets allocated to an Investment Account have not been i

invested by the Investment Manager responsible for the investment of such assets, to invest such uninvested assets as such Investment Manager may direct in writing

^

pursuant to Section 7.02 hereof, provided, however, that the Trustee shall have no obligation to invest uninvested assets maintained in an Investment Account unless and until it shall receive written instructions from such Investment Manager; and (c) to hold uninvested assets from the Nine Mile Unit Two Qualified Fund without incurring any liability I i

l 1

for the payment of interest thereon for such period as it shall deem reasonable or necessary.

9.03 Management of Assets. To sell, exchange, partition, or otherwise dispose of all or any part of the Nine Mile Unit Two Qualified Fund at public or private sale, without prior application to, or approval by, or order of any court, upon such terms and in such manner and at such prices as the Trustee shall determinet to modify, renew or extend bonds, notes or other obligations or any installment of principal thereof or any interest due thereon and to waive any defaults in the performance of the terms and conditions thereof; and to execute and deliver any and all bills of sale, assignments, bonds or other instruments in connection with these powers, all at such times, in such manner and upon such terms and conditions as the Trustee may deem expedient to accomplish the purposes of this Trust as set forth in Section 2.01 hereof.

9.04 Extensien of Obligations. To renew or extend the time of payment of any obligation, secured or unsecured, payable to or by this Trust, for as long a period or periods of time and on such terms as the Trustee shall

. determine.

9.05 Limitations on Investment Discretion. The committee may limit, restrict, or impose guidelines b

f affecting the exercise of the investment powers conferred on l the Trustee in this Article IX; provided, however, that, except if permissible pursuant to applicable law, any such limitations, restrictions or guidelines shall not expand or make more broad the said investment powers, that the Trustee l

sha'11 not be responsible for the establishment of any such limitations, restrictions or guidelines or any investment or diversification policies embodied therein, and that, in implementing the same and exercising its authority hereunder, the Trustee shall have no duty to inquire into or to review the management or investment of any Investment Account, except as otherwise specifically provided in this Article IX.

X. MISCELLANEOUS l

10.01 Headings. The section headings set forth in this Agreement and the Table of contents are inserted for convenience of reference only and shall be disregarded in the construction or interpretation of any of the provisions 1

of this Agreement. ,

l 10.02 Particular Words. Any word contained in the text of this Agreement shall be read as the singular or

! plural and as the masculine, feminine, or neuter as may be applicable or permissible in the particular context. Unless otherwise specifically stated, the word " person" shall be t

i taken to mean and include an individual, partnership, association, trust, company, or corporation.

10.03 Severability of Provisions. If any provision of this Agreement or its application to any person ;

or entity or in any circumstances shall be invalid and unenforceable, the application of such provision to persons and in circumstances other than those as to which it is invalid or unenforceable and the other provisions of this Agreement shall not be affected by such invalidity or unenforceability.

10.04 Delivery of Notices Under Agreement. Any notice required by this Agreement to be given to the Company or the Trustee shall be deemed to have been properly given when mailed, postage prepaid, by registered or certified mail, to the person to be notified as set forth below:

If to the company NEW YORK STATE ELECTRIC & GAS CORPORATION P. O. Box 287 Ithaca, New York 14851 Attention: S.J. Rafferty, Treasurer If to the Trustee ,

Bankers Trust Company 280 Park Avenue 8W New York, New York 10017 Attention: Paul Perez, Assistant Vice President

I l

. I i

The Company or the Trustee may change the above address by !

delivering notice thereof in writing to the other party.

10.05 Alterations and Amendments. The Trustee and the company understand and agree that modifications or amendments may be required to this Agreement from time to ,

time to effectuate the purpose of this Trust and to comply with any order, any changes in tax laws, regulations or rulings (whether published or private) of the Service and any similar state taxing authority, and any other changes in the laws (including final regulations and published or private rulings) applicable to the Company or Nine Mile Unit Two. This Agreement may be altered or amended to the extent necessary or advisable to effectuate such purposes or to comply with such order or changes. This Agreement also may be altered or amended to encompass decommissioning contributions with respect to other nuclear power plants owned now or in the future by the company. Any alteration or amendment to this Agreement must be in writing and signed '

by the Company and the Trustee. The Trustee shall have no 1 duty to inquire or make any investigation as to whether any proposed amendment, modification or alteration is consistent !

with this Section 10.05. The Trustee may decline to adopt such amendment, modification, or alteration and may seek the advice of legal counsel in making such determination.

i l

l l J

l l

l

. i I

i 10.06 Successors and Assigns. Subject to the provisions of Sections 2.07 and 6.01 hereof, this Agreement shall be binding upon and inure to the benefit of the Company, the Trustee and their respective successors, assigns. personal representatives, executors and heirs.

10.07 Governing Law. The Trust is a New York !

trust, and all questions pertaining to its validity, construction, and administration shall be determined in ,

accordance with the laws of the State of New York to the extent not preempted by Federal law.

10.08 Accounting Year. The Trust shall operate ,

)

on an accounting year which coincides with the calendar year, January 1 through December 31.

10.09 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. I 10.10 Form of Communications. Any agreement between the Company and any person or any other provision of this Agreement to the contrary notwithstanding, all notices, instructions, directions, and other communications to the Trustee shall be in writing or in such other form, including transmission by electronic means through the facilities of third parties or otherwise, specifically agreed to in

6 writing by the Trustee. The Trustee shall not be responsible to the Company or any other person for any errors or inaccuracies in any notices, instructions, directions, or other communications given to the Trustee, or for acting in accordance therewith.

5 10.11 No obligation to Act on Unsatisfactory Notice. The Trustee shall incur no liability under this ,

Agreement for any failure to act pursuant to any notice, instructions, directions, or any other communications from ;

the company, the committee or any Authorized Representative unless and until it shall have received such notice, instructions, directions, or any other communications in form satisfactory to it. Upon receipt of any notice, instructions, directions, or any other communications from any such person which is not in form satisfactory to it, the

-Trustee shall notify such person of the inadequacy thereof.

10.12 Successor to the Trustee. Any successor, by merger or otherwise, to substantially all of the trust business of Bankers Trust Company shall automatically and without further action become the Trustee hereunder, cubject to all the terms and conditions and entitled to all the benefits and immunities hereof. Anything contained in the I

1

~42-l l

, ?

)

I previous sentence to the contrary notwithstanding, the company j shall have the right to remove such Trustee pursuant to Section 6.01 hereof.

IN WITNESS WHEREOF, the Company and the Trustee have set their hands and seals to this Agreement as of the day and

'/ ear first above written.

NEW YORK STATE ELECTRIC & GAS CORPORATION By $

R.'A.(J p bson '

Exec m ve Vice President and Chief Financial Officer Attest I #de Sheht BANKERS TRUST C , Y By (

Maria Gavr44 Vice President

/ ;

Attest k/ / / -

Title yp l

I

STATE OF NEW YORK )

) ss:

COUNTY OF TOMPKINS )

I, ALi0E M.doRb A/d a Notary Public in and for the aforesaid jurisdiction, do hereby certify that R. A. Jacobson and D. W. Farley, who are personally known to me to be the persons who executed the foregoing Nuclear Decommissioning Trust Agree-ment, personally appeared before me in the aforesaid jurisdic-tion, and as Executive Vice President and Chief Financial Officer, and Secretary of New York State Electric & Gas Corpora-tion and by virtue of the power and authority vested in them, acknowledged the same to be the act and deed of New York State Electric & Gas Corporation and they executed the same as such.

l-Given under my hand and seal this 12th day of 64c #2 Nota 26/ Public A

Aus a KseN6 Noser h M e lose el Nee tus c- - to 1

1

STATE OF NEW YORK )

) ss:

COUNTY OF NEW YORK )

I, 7 49 8 /t/G- a Notary Public in and for the aforesaid jurisdiction, do hereby certify that hMs* CAvary and#dfe Anscoug who are personally known to me to be the persons who executed the foregoing Nuclear Decommissioning Trust Agreement, personally appeared before me in the aforesaid jurisdiction, and as v/ce er t.r eosur- and As.sr. (4a /W>sarafef Bankers Trust company and by virtue of the power and authority vested in them, acknowledged the same to be the act and dead of 34useraf Tkvir certeder and they executed the same as such.

Given under my hand and seal this f.lL day of M AWct! , 1990.

(NOTARIAL SEAL) -

Notary blic, State (/6f New W4K My commission expires 7-3 /- f/ .

JOAN BYRNE Netwy e %* g g of how Yo,kL*#8k

~ n , 7. ,,- e, I

I l

I

EXHIBIT A ,

CERTIFICATE No.

t The undersigned Authorized Representative of New York State Electric & Gas Corporation (Company), a New York corporation being duly authorized and empowered to execute and, deliver this Certificate, hereby certifies to the Trustee of the New York State Electric & Gas Corporation Nuclear' Decommissioning Trust (Trust), pursuant to Article IV of that certain Nuclear Decommissioning Trust Agreement, dated March __, 1990 (Agreement), between the Trustee and ti,e Company as follows:

(1) attachment 1 hereto sets forth the aucunts either invoiced to or incurred by, or to be incurred by the Company or the Nine Mile Unit Two Qualified Fund that are/will be due and owing to each payra listed (Payees) fort (a) goods or services provided in connection ,

with decommissioning Nine Mile Unit Two; or l (b) administrative costs of the Trust (excluding costs arising from the company's furnishing of goods., services, or facilities to l the Trust and excit ding compensation which is !

excessive or unnecessary to carry out the purp'oses )

of the Trust) as evidenced by the invoice, contracts or agreements attached hereto; (2) all such amounts due and owing to the Fayees I constitute Decommissioning Costs or Administrative Expenses as described in Article IV of the Agreement; (3) all such amounts may be paid from the Trust without causing the Nine Mile Unit Two Qualified Fund l to become disqualified from the application of Section '

468A of the Code (or any applicable successor provision); and ;

i l

e Exhibit A I p:g3 2 (4) all conditions precedent to the making of this withdrawal and disbursement set forth in any agreement between such Payees and the Company, if applicable, have been fulfilled.

Accordingly, demand is hereby made that the Trustee provide for the withdrawal of S from the Nine Mile Unit Two Qualified Fund in order to permit payment i of such sum to be made to the Payees. You are further

' directed to disburse such sum, once withdrawn, directly to such Payees in the following manner: (CHECK / WIRE TRANSFER /

) on or before , .

WITNESS my hand this day of , .

NEW YORK STATE ELECTRIC & GAS CORPORATION, By Authorized Representative b

L i

NEW YORK STATE ELECTRIC & GAS CORPORATION Certificate of Appointment of Investment committee-f I, J. M. NIEFER, Assistant Secretary of NEW YORK STATE ELECTRIC & GAS CORPORATION, a New York corporation, do hereby certify that the Board of Directors of said Corporation at a meeting thereof duly called, convened and held on March 9, 1990, appointed R. A. Jacobson, V. W. Rider and S. J. Rafferty to serve as the Investment Committee under the Nuclear Decommissioning Trust Agreement between the Corporation and Bankers Trust

' Company, as Trustee, dated March 12, 1990.

IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of said Corporation this 21st day of June 1990.

\' --

pasistantSecrutary 1

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p.>

ftHI? (- f -g, he Verl itatt tiettrit 4 Bas 2cretiratstr.

      .,     ,   \.                Nirt mit Foint Nutirar 6ettratito Unit 80. 2 g                    l Cor.tritutions' to Extertal lit.Ltr.: Fute Fer tentesinatte Costs o.

l (1) (21 m 14) (5i It) .

 '                       8trict ' Fand Fal.                                    Truster & For,a Bal.              l

($ theft Beg. . Fund Mahuesent Erit P:.th.Itr. t1 Yest Contributions ternings fest(30bp) of tear I l(000s) 4(000s) 6(000s) l(000sf 'l(000s) ; 3151989 0- 0 0 0 0. ; 3 15 1990 0 395- 0 0- 395 3151991 395 426- . 35 (9) 850 ;

 ;?                                                                                                               '

3151992 850 1,482 100 (12) 2.420 p* 3 15 1993 3151994 2.420 1.578 1.578 202 314 (12) (16) 4.189 6.064: 4.189 7 l 3 15 1995 6.064 1,578 432 122) 8,0!.2 L 3 !$ 1996 8.052 1.578 $!? 128)- 10.159 3151997' 10.159 1,578 690 t:51 12.392 3151998 12.392 1.578 830 (421 14.756 n , 3 15 1999 14.758 1,578 979 (50) 17,266 3152000 17.266- 1,578 '!.137 (!8) 19.924 .; 22,741 >l 3!$2001 19,924 1,578 1,305 (6H

    '                  3 15 2002          22.741            1.578      1,482           (75). 25,726 3 !$ 2003 -        25,726            1,578     1,670            (BH     28,890            !

3 3 15 2004 28,890 1,578 1.870 (95) 32.243

 ;, .                  3 !$ 2005          32,243            1.578     2,081-         (105)     35,797 I                     3152006            35,797            1,578     2.305          (!!7)     39,563 3152007            39,563            1,578 , 2,542            (129)     43,55b
                      -3152008            43.!55 -          1,578     2,794          (141)     47.785 3 15 2009          47,725            1,578     3,060          (!$5) . 52,268 3!$2010            52,26B            !.57F     3.343          !!69)     57.019

!! 20!! 57.015 1,572 3.642 (1841 62,055

                        ! 15 2(!          42.05!           ~1.57E      3.9!9       = !2%i      67.392           J 3 15 20!!          e7.3(2            1.578      4.29!         (217!     73.04F 3!!2014           .73.042            1.578      4.652,        i2351     79.042            i 3152015            79.042            1,578      5.025         :255)     85,395 3 !$ 2016          ES,315            1,576      5,430         :275)     92.126          .;

3152017 72,129 1,57B !.654 :1296) 99,263 3152016 91,2o3 1.573 6.303 (319) 106,825 ,

                       ! !!'2015        iM.825              1,576      6.760       '(343) !!4,840                *

[L 3 15 2020 !!4,54' l.578 7.285 - t3691 123.334-3 15 20:1 .23,334 1.578 7,820 (396) 132,335 3 !! 2 22 '132.335 1.578 8.357 f4251 141,876 3152023- 141,876 1.578 0,969 t455) 151.987 . 3 15 2024 1,576 4 ,625 1487) 162.702 <; 151.'97 ' 315202! 162.702 1.57E 10,300 1521) 174.059 3152026 174.t'55 1.575 !!.015 i!56) 16A.015 F: 10 15 2026 164.095 1.315 11.7c5 1516) 198.580 v i I

 ;e                   ictelt                               57.269 146.661           1.550)    198.590 SatStB 5833838         $48383      3853883
 \:

f a w I +

p - DW!altD hea 9ert State Electric 4 Gas Corocration Nine Mlle Foint hurlear bentrating Unit ho. 2 ContasinatedPortion Decoselitioning Aeounti i t i Inflation hine Mile Two NYSE6 t Year Late 1 leta! 18 Share 1966 0.01 6133.907,000 624.103,260 1989 34.81 6180,506,636 132,491,195 1990 5.01 6189.531,968 634,115,754 ; 1991 5.01 8199,008,566 435,821,542 1992 5.01 6208,958,994 637,612,619 1953 5.01 6219.4%,944 639,493.250 1994 5.01 6230,377.291 641,467,912 1995 5.01 6241,896,156 643,541,308 1996 5.01 1253,990,964 645.718.373 1997 5.01 6266,690,512 648.004,292 1998 5.01 6280,025.038 650,404,507 1999 5.01 6294,026.289 152,924.732 2000 5.01 8308.727.604 155.570,969 2001 5.01 6324,163,984 658,349,517 2002 5.01 6340,372,183 661,266.993 2003 5.01 6357,390,793 664,330,343 2004 5.01 4375,260,332 667,546.860 2005 5.01 6394,023,349 670,924,203 2006 5.01 6413,724,516 674,470,413 2007 5.01 6434,410,742 678.193,934 , 2000 5.01 6456,131,279 482,103,630 2009 5.01 6478,937,843 686,208.812 2010 5.01 6502,884,735 890,519,252 20!! 5.01 1528,028,972 895.045,215 20!; !.0; 4554,430.421 199.797,47e 2M7 5.01 6502,151,941 1104.787.344 Dit !.01 1611.259.534 1110.026.7D

 ;tt          5.01       SH1,022.!9 5115.!!8,05; 2014         5. 0'. 16T3.913,641   1121.304,455 2017         5.01       1707,609,322 4127.369,676 2016         5.01       1742,989.790 $133,738,160 2019         5.0%       $780.139,27'   4140.425.070 2020         5.01       6819.146.24'. 1147.446.324 2021         5.01       5660,103.55? 1154.81B,640 2022         5.(t       1903.108.73' l!62.559.572 202:         5.0;       8948,2e4.17c 1170.687,551 2024         5.01       6995,677,375 1179.221,928 2025         f.01 11,045,461.241 1185,183,024 202i         4.01     11.067.279.697 119!.710.345 lini: ce the huelear f r0ulatory Coesissate 's ur.ieet de:enisit.nino test estante, estalsted t0 tte tt4 if tt,t operattig licenst s

+

l

           %R%0&O Gas & Electric Corporation 284 SOUTH AVENUE, POUGHKEEPSIE, N.Y. 12601-4879                        (914) 452-2000 BEFORE THE UNITED STATES NUCLEAR REGULATORY COMMISSION CENTRAL HUDSON GAS & ELECTRIC CORPORATION )               Docket No.

DECONNISSIONING REPORT CENTRAL HUDSON GAS & ELECTRIC CORPORATION (Company) hereby submits this Decommissioning Report in compliance with 10 C.F.R. 50.33(k) and 50.75(b).

1. The Company owns the following undivided interest in the Nine i Mile Point 2 Nuclear Generating Station (Unit):

Central Hudson Gas & Electric Corporation gfgt

2. The company hereby certifies that financial assurance for dsoommissioning its share of the Unit is provided in the amount of

         $16,245,597. The calculation of this amount is set forth in Exhibit A and I

complies with the formula set forth in 10 C.F.R. 50.75(c). The Company ! acknowledges the following interest with respect to the total financial ! assurance amount Central Hudson Gas & Electric Corporation (9%) 4{ggggggg7

3. The method by which the Company will provide financial
assurance for deconstissioning its share of the Unit will be by payments into a trust fund established March 1, 1990. The Company has currently L

made contributions through June 30, 1990 of $459,000 and will continue to l make payments on a quarterly basis. Such monies will be invested by the Trustee in accordance with the investment guidelines set forth by the Company.

E 'l l i

4. Attached as Exhibit B to this Decommissioning Report is a copy of the executed Trust Agreement between the Company and the Bank of New 1

York dated March 1, 1990, which contains as Exhibit A, a description of the investment guidelines set forth by the Company. I

5. Attached as Exhibit C to this Decommissioning Report is a t

schedule for implementing the method of providing financial assurance for decommissioning tne Company's share of the Unit. CENTRAL HUD8ON GAS & ELECTRIC CORPORATION Byl ' John F. Drain Vice r ident - Controller and Treasurer Dated: June 1, 1990 1 D 1&2/NRCDECOM

N M 80N gas 3r ELECTRIC CORPORATION FINANCIAL AS8URANCE COMPLIANCE FOR THE DECONNISSIONING NIR MILE POINT 2 NUCLEAR GENERATING STATION l 1 I l i t \ l' l-i l l

Calculation of Minimum Financial Assurance Amount NINE MILE POINT UNIT '1180 I. NRC MINIMUM DECOf9 FISSIONING COST FOR A BWR NUCLEAR PLANT A. For BWR between 1200 MWt and 3400 MWt: ($104 Million + 0.009P), where P = MWt 1 Source: Federal Register, Vol. 53, No. 123, Part 50, p. 24050 NRC Minimum Total Amount Each Co-Tenant's Portion Ownership % 9 Tear End 1989 Nine Mile Point Unit Two = 3323 MWt $104,000,000 Niagara Mohawk Power Corporation 41% $ 74,007,720 plus: .009 (x) 3323 = 29,907.000 Long Island Lighting Company 18% 32,491,195 New York State Electric & Gas 18% 32,491,195 NRC Minimum e 1986 3: 133,907,000 Rochester Gas and Electric 14% 25,270,929 Central Hudson Gas and Electric 9% 16,245,597 1989 Adjustment Factor (x) (See II.A, Sheet 2 of 3) 1.348 Total 100% $180,509,636 NRC Minimum e Year End 1989 $: $1!0,50! 63! EY

                                                                                                                                  *5
                                                                                                                                 ~E
                                                                                                                                  .-. e k

u

                                                    .    ,   . . .   ,. - ~       . , ,      ._.

II. NRC ADJUSTMENT ThCTOR EQUATION (Per Federal Register, Vol. 53, No. 123, Part 50, p. 24050) A. Estimated Cost (Year X) = {1986 $ Cost] [.65L + .13E + .22B] 1989 Year End Adjustment Factor = (.65 x 1.226) + (.13 x .877) + (.22 x 1.989) 1989 Year End Adjustment Factor = 1 3_4g Where: Source: L = Labor Monthly Labor Review, U.S. Department of Labor, Bureau of Labor Statistics, Tabic 25, Employment Cost Index, private nonfarm, Northeast Regica. E = Energy equals two components: Producer Price Index Data, Table 6: where P equals Industrial Power, Cossi. P = electric power (23%) Code 0543, Mid-Atlantic; where F equals Light fuel oils, Couse. Code 0573. F = fuel oil (77%) B = Burial Cost NUREG 1307, Report on Waste Burial Charges, October 1989. D. Calculation of Factors: Energy (E): P = Electric Power Labor (L): Compensation, Northeast Region Index Indust. Power, CC 0543, Mid-Atlantic Index January 1986 Actual 130.5 January 1986 Actual 111.9 December 1988 Actual 150.4 December 1988 Actual 109.5 December 1989 Actual 160.0 December 1989 Actual 115.4 2.186 to Year End 1989 Excl. Factor 1.226 1986 to Year End 1989 Escl. Factor 1.gl Energy (E): F = Fuel Oil Burial (B): Light Fuel Oils, CC 0573 Index October 1989, NUREG 1307 So. Carolina Site January 1986 Actual 82.0 i for BWR Year Index December 1988 Actual 50.7 December 1989 Actual 68.1 1/1/86 Washington Site 1.000 1/1/88 So. Carolina Site 1.814 1986 to Year End 1989 Escl. Factor 0.830 1/1/89 So. Carolina Site (Est. G 4.4%) 1.894 (*) 1/1/90 So. Carolina Site (Est. G 5.0%) 1.989 (*) Therefore E equals: per Draft Regulatory Guide, EN 1986 to Year End 1989 Escl. Factor 12 9g9 May 1989, page 7. E5 E = for a BNR [0.23P + 0.77F] 3 E = for a BWR [0.23(1.031) + 0.77(0.830)] = p.g77

Estimated burial cost to escalate at 4.4% and 5.0% for 1989 and 1990 based on the Barnwell low-level radioactive w rate schedule for base disposal charges - standard waste.

F i i EKHIBIT A ' Sheet 3 cf 3 b CENTRAL HUDSON GAS & ELECTRIC CORPORATION Decommissioning Amount Escalated to the End of the Operating License Life Based on the KRC's Minimum Decommissioning _ Cost (4000) i Inflation Year Rate t Central Hudson's share - 9% , Year End 1989 5.2% $16,246 (From Exhibit A, Sheet 1 of 3) i Year End 1990 5.0% 17,058 , Year End 1991 5.0% 17,911 Year End 1992 5.0% 18,807 ; Year End 1993 5.0% 19,747 ' Year End 1994 5.0% 20,734 Year End 1995 5.0% 21,771 Year End 1996 5.0% 22,860 Year End 1997 5.0% 24,003 ' Year End 1998 5.0% 25,203 Year End 1999 5.0% 26,463 Year End 2000 5.0% 27,786 , Year End 2001 5.0% 29,175 Year End 2002 5.0% 30,634 Year End 2003 5.0% 32,166 Year End 2004 5.0% 33,774 Year End 2005 5.0% 35,463 Year End 2006 5.0% 37,236 Year End 2007 5.0% 39,098 Year End 2008 5.0% 41,053 Year End 2009 5.0% 43,105 Year End 2010 5.0% 45,261 Year End 2011 5.0% 47,524 Year End 2012 5.0% 49,900 ! Year End 2013 5.0% 52,395 Year End 2014 5.0% 55,015 Year End 2015 5.0% 57,765 Year End 2016 5.0% 60,654 Year End 2017 5.0% 63,686 Year End 2018 5.0% 66,871 Year End 2019 5.0% 70,214 Year End 2020 5.0% 73,725 Year End 2021 5.0% 77,411 , Year End 2022 5.0% 81,282 Year End 2023 5.0% 85,346 + Year End 2024 5.0% 89,613 Year End 2025 5.0% 94,094 October 2026 4.0% g}3ggg 5% inflation rate per DRI/McGraw Hill U.S. Review i l

EXHIBIT B CENTRAL HUDSON GAS & ELECTRIC CORPORATION MASTER DECOMMISSIONING TRUST AGREEMENT FOR ITS INTEREST IN UNIT NO. 2 OF THE NINE MILE POINT NUCLEAR STATION i Dated: March 1, 1990 i

 ...                          .              . . - -   . . . - - . - - -     . - . _ - - .           - - - - - -~ -                    -
                                                                                                                                               )

TABLE OF CONTENTS i ARTICLE I. DEFINITIONS. 1.01 Definitions ............................. 3 1 ARTICLE II. MASTER TRUST PURPOSE, NAME AND FUNDS. 2.01 Master Trust Purpose .......................... 7 l l 2.02 Establishment of Master Trust ................. 7 i 2.03 Acceptance of Appointment ..................... 8 l 2.04 Name of Master Trust .......................... 8 ]

2. 05 Division of Master Trust . . . . . . . . . . . . . . . . . . . . . . 8 2.06 Designation of Funds .......................... 9 2,07 Duties of Authorized Representatives .......... 9 2.08 No Authority to Conduct Business .............. 10

2. 09 No Transferability of Master Trust . . . . . . . . . . . . 10 i ARTICLE III. BENEFICIARIES OF MASTER TRUST.

f 3.01 Company and Others to be Beneficiaries ........ 10 ARTICLE IV. CONTRIBUTIONS AND INCOME. 4.01 Contributions ................................. 10 4.02 Allocation of Net Income ...................... 11 4.03 Subsequent Transfers .......................... 11 ARTICLE V.- DISTRIBUTIONS. l 5.01 Payment of Decommissioning Costs and Administrative Costs .......................... 12 l 5.02 Payment of Administrative Expenses ............ 12 i l 5.03 Fees .......................................... 13 5.04 Liquidation of Investments .................... 13 f

l ARTICLE VI. TERMINATION. 6.01 Termination of rur.ds and Master Trust in General..................................... 14 6.02 Distribution of Master Trust and Funds Upon Termination ............................. 14 ] l ARTICLE VII. TRUSTEES. 7.01 Designation and Qualification of Successor Trustee (s) .......................... 14 I 7.02 Exoneration from Bond ......................... 16 l l 7.03 Resignation ................................... 16 ) l 7.04 Transactions With Third Parties ............... 16 7.05 Accounts and Reports .......................... 16 l 7.06 Tax Returns and Other Reports ................. 18 7.07 Liability ..................................... 20 ARTICLE VIII. TRUSTEE'S GENERAL POWERS. l l 8.01 Registration of Securities .................... 22 I l 8.02 Borrowing ..................................... 22 ) 8.03 Retention and Removal of Professional l and Employee Services ......................... 22 8.04 Delegation of Ministerial Powers .............. 23 I l 8.05 Powers of Trustee to Continue Until Final Distribution ............................ 23 8.06 Discretion in Exercise of Powers .............. 23 8 . 0 7 Depo s it o f Fund s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3

8. 08 Market Inventory Funds . . . . . . . . . . . . . . . . . . . . . . . . 2 4 ,

8. 09 Loaning o f Securities . . . . . . . . . . . . . . . . . . . . . . . . . 2 4 8.10 Tempora ry Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4

1

                                                                          -lii-                                                                                l i

i i ARTICLE IX. TRUSTEE'S INVESTMENT POWERS. J l 9.01 General Investment Powers ..................... 25 9.02 Appointment of Investment Manager (s)........... 26 l 9.03 Direction by Investment Manager (s)............. 27 I ARTICLE X. MISCELLANEOUS. 10.01 Headings ...................................... 29 10.02 Particular Words .............................. 29 10.03 Severability of Provisions .................... 29 10.04 Delivery of Notices Under Agreement ........... 30 10.05 Alterations and Amendments .................... 30 1 10.06 Successors and Assigns ........................ 31 ) 10.07 Governing Law; Jurisdiction; Certain Waivers........................................ 31 10.08 Accounting Year ............................... 32 10.09 Counterparts .................................. 32 10.10 Decommissioning Liability ..................... 32 EXHIBIT A. PERMITTED INVESTMENTS EXHIBIT B. CERTIFICATE f 1 i t l 1, '

MASTER DECOMMISSIONING TRUST AGREEMENT AGREEMENT made as of this 1st day of Narch, 1990, between CENTRAL NUDSON GAS & ELECTRIC CORPORATION , a New York : corporation (the " Company"), and THE BANK OF NEW YORK, as Trustee (the " Trustee"), a New York banking corporation having trust powers. I WHEREAS, the Company is the owner - of a nine percent (9%) tenancy-in-common interest in Unit No. 2 of the Nine Mile Point Nuclear' Station, located in Oswego County, New York (such Unit being hereinafter called the " Unit" and the Company's l interest therein being hereinafter called the " Company's Interest ; in the Unit"); and WHEREAS, Unit No. 2 is a nuclear fueled electric generating unit which will require Decommissioning at the end of its useful life; and l WHEREAS, pursuant to the requirements of the Nuclear Regulatory Commission ("NRC") , the Company is required to create an external source of funding to provide for the costs associated with the Decommissioning of nuclear fueled electric generating units which it owns; and WHEREAS, pursuant to Section 468A of the Internal Revenue Code of 1986, as amended, certain fideral income tax benefits are available to the Company as a result of creating and-making contributions to certain nuclear decommissioning reserve runds; and

    - - - * - P -,               * ,

1

                                   .2-WHEREAS,   the Company,     in order to comply with the requirements of the NRC, and in order to be in a position to take i

advantarJe of the federal income tax benefits avail.ble under the I aforementioned Section 468A, wishes to establish both Qualified

Funds and h'onqualified Funds to hold amounts in trust for the future Decommissioning of (each af) the Unitts); and , WHEREAS, the Company wishes to establish a Master Trust t for the retention and investment of the assets of the Qualified Funds and Nonqualified Funds for the Unit (s), wherein each of the Funds shall constitute a separate trust under the Master Trust; , and , WHEREAS, The Bank of New York is willing to serve as Trustee under the Master Trust on the terms and conditions herein set forth. , NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, the ; Trustee hereby agrees to accept, from and after the date first above written, Contributions to the Master Trust delivered to it from time to time by or on behalf of the company; TO HAVE AND TO HOLD such assets; and TO INVEST KND REINVEST the same as provid.ed herein; ' IN TRUST NEVE:1THELESS , for the uses r.nd purposes and upon the terms and conditions, as hereinaftsw set forth; and TO PAY OR DISTRIBUTE from the Master Trust as providea herein.

      ~                                                     _ _         ._      _ _ _ _ - .

g I. DEFINITIONS 1.01 Definitigna. As used in this Master l, Decommissioning Trust Agreement, the following terms shall have

the'following meanings: I I

(1) " Agreement" shal1~mean this Master Decommissioning Trust Agreement as the same may be amended, modified, or supplemented f-c time to time. (2) ,

                                                                                                                    " Applicable Law" shall mean all applicable laws,            i i

statutes, treaties, rules, codes, ordinances, regulations, l certificates, orders, interpretations, licenses and permits of any Governmental Authority and judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other judicial or quasi-judicial tribunal of competent. jurisdiction ' j l (including those pertaining to health, safety, the environment or otherwise). i

                                                                               ;(3)                                     " Applicable Tax Law" shall mean Section 468A of O                                   the Code (or comparable subsequent provision of the Code) and the regulations thereunder,                                                                           and any other provision of the '. Code          ,
                                 ' relating to the Federal taxation of the Funds or credits or

- 9 deductions based on contributions. j (4) " Authorized Representative" shall mean the persons i designated as such pursuant to Section 2.07 hereof, i

       ,                                                                             (~)                                 " Business Day" shall mean a day that is not a                '

Saturday or Sunday or a legal holiday in the State of New York. (6) " Certificate" shall mean a document properly

                                    . completed and executed by an Authorized Representative of the
          .I :.

wy -

4 4 Company and substantially in. the form of Exhibit B hereto: as it ' may from time to time be amended. (7) " Code" shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time. (8) " Company" shall have the meaning set forth in the opening paragraph of this Agreement. (9) " Company's Interest in the Unit" shall have the meaning set forth in the first WHEREAS clause of this Agreement. (10)' " Contribution" shall mean any contribution, cash l or otherwise, made to the Trustee for deposit in one er more of : the Funds and in such subaccounts thereunder as provided in this j Agreemont. No contribution.which consists of real property shall be permitted. (11) " Decommissioning" shall mean the decommissioning and retiring of a nuclear generatin; Unit from service in accordance with Applicable Law and shall consist of the removal i (as a fac.d 'y) of a nuclear generating unit safely from service l and the :sduction cf residual radioactivity at the site of such j L unit to 4 . eve > u a-~ permits the release of the - property for unrestrl .43 nw ata termination of the NRC license relating to the unit. Th.in pc., cess shall include, but not be limited to (a) I the removal of both radioactively contaminated and radioactively. 'I l

   . uncontaminated portions of.the unit, and disposing of the same in                          1 accordance with Applicable Law at the end of the useful life of such unit       (b)    work done to the      site of     the unit     and        its associated      equipment     and   facilities    and  to    adjacent   areas,

{ \ whether or not such areas are contiguous to such site, in order i

1

               ,   to decontaminate such site and such areas and (c) work done by or 4
        ;          on behalf of the company-(or for which the company is charged) to the site where any portion of the unit and                                                                its      associated equipment and facilities are to be disposed of in order to prepare and maintain such sito as a disposal site.

(y) '>becommissioning costs" shall mean all costs and - o expenses r41ating or allocable to, or incurred in connection with Decommissioning, including, but not limited to, the removal of-lt , the equipment', structures and portions of a nuclear generating unit and its site containing radioactive contaminants or the b decontamination of the same to a level that permits the property L to be released - for unrestrictive use after cessation of the operation of the unit, plus, in the case of decontamination, the cost of removal of -such equipment structures and portions; 4 1 provided, however, that if Applicable Law prohibits the foregoing l 1 or. imposes requirements that are more costly to implement than .l the removal or decontamination referred to above in this definitjon, the term " Decommissioning costs" shall mean all costs and expenses relating or allocable to, or incurred in connection ! with, the requirements imposed by Applicable Law with respect to

                   - radioactive contaminants after a nuclear generating unit ceases operation.

(13) " Funds" shall mean the ' Qualified Funds and the Nonqualified Funds, collectively. (14) " Governmental Authority" shall mean any Federal, state, county, muni<::1 pal, foreign, international, regional or other governmental authority, agency, board, body, 1 1

L i instrumentality or court, including, without limitation, the NRC i and tho'Public-Service Commission of New York. (15) " Investment Manager (s)" shall mean any person or i entity appointed by the company (including, but not limited to, , any employee of the company or its affiliated companies and the Trustee, any affiliate company or subsidiary of the Trustee or any employee thereof), provided, however, that written notice of such_ appointment is received by the Trustee from the company, i (16) "Nonqualified Funds" shall mean, collectively the Funds' not constituting Qualified Funds established under, and in accordance with, Section 2.02 (b) or Section 2.05 of the Master Trust'with respect to the company's Interest in the Unit. Each Nonqualified Fund shall have such subaccounts as the company may specify. (17) "NRC" shall have the meaning ascribed thereto in the third WHEREAS clause of this Agreement or any successor agency. (18) " Order" shall mean any order relating to Decommissioning issued by a Governmental Authority and applicable to the Unit. (19) " Qualified Funds" shall mean, collectively, the account. established under, and in accordance with, Section 2.02 (b)' of the Master Trust for purposes of Section 468A of the Code which is designated as such in the records of the Trustee. The Qualified Fund shall have such subaccounts as the company may i specify. Contributions, if any, made with respect to each such Fund in any year shall not exceed the amount permitted to be made L r

                                                -7  '

to such Fund with respect to the. year in question in order for the Company to be allowed : to take the deduction afforded by I Sectioa.468A of the Code. (20) " Regulation" shall mean any requirement having-the force of law which is binding on the Company. (21) " service" shall mean the Internal Revenue Service. (22) " Trustee" shall have the meaning ascribed thereto in 'the opening paragraph of this Agreement or any successor L appointed pursuant to section 7.01 hereof. l (23) " Unit" shall have the meaning set forth in the ; first WHEREAS clause of this Agreement. II. MASTER TRUST PURPOSE. NAME AND FUNDS 2.01 Master Trust Purnome. The exclusive purpose of this Master Trust is to accumulate and hold funds for the

contemplated Decommissioning of the Unit and to expend funds for that purpose..

2.02 Establishment of' Master Trust.- By execution of this Agreement, the Company: (a) establishes the . Master Trust for the-retention and investment of the assets of the Funds, which shall be effective on the date first above written; (b) establishes a Qualified Fund and a Nonqualified Fund-for the company's Interest in the Unit; and (c) appoints The Bank of New York as Trustee of the Master Trust. 1 1 I i

2.03' - Accentance 'of Annointment. Upon the terms and l conditions herein set forth, The Bank of New York accepts the appointment as Trustee of this Master Trust. The Trustee 2 l s - declares that it will hold-all estate, right, title and interest i it -may . acquire hereunder exclusively. for the purposes set forth 3 in this Article II. The Trustee shall receive any contributions deposited with it by the Company in trust for the benefit of the company and shall deposit such contributions in one or more of 1

                   - the Funds, an'd in such subaccounts thereunder, as provided in Section 2.05 hereof and otherwise as the company shall specify.                                           )

The Trustee- shall hold, manage, invest and administer such

                   - Contributions, together with earnings and appreciation- thereon, i

l - in accordance with this Agreement.

                               -2.04   Name of Master Trust.             The Contributions received                           )

by the_ Trustee from the company together with the proceeds, L reinvestments .and appreciation thereof shall constitute the

                    " Central Hudson Gas & Electric Corporation Master Decommissioning
                                                                                                                           ]

Trust." 1 2.05 Division of Master Trust. The Master Trust shall ! be divided by the Trustee into a Qualified Fund and a Nonqualified Fund for the company's Interest in the Unit and into j such other Nonqualified Funds as the Company from time to time I l shall establish. Each Fund shall constitute a separate trust under the Master Trust and.shall be designated as relating to the Company's Interest in the Unit. Each Fund shall have a subaccount relating to each Designated Beneficiary, clearly i 4

1 identified as such, 'and such other subaccounts as the Company from time to time shall specify. The Trustee shall maintain such records as are necessary to reflect each Fund and 'each subaccount thereunder l separately on its books from each other Fund and subaccount. 4" 2.06 Desianation of Funds. Upon (i) any Contribution to the Mastor Trust; or - (ii) any withdrawal from the Master Trust; or (iii) any transfer between the Funds or subaccounts thereunder, $he Company shall designate (in writing), in accordance with Articles IV-or V, as applicable, the Fund (s), and the subaccount(s) thereunder, which is to be credited or debited for the amount of such Contribution, withdrawal or transfer, and ; in the' Trustee shall credit or debit the . Fund (s), and the i subaccount(s) thereunder, in accordance with such designation.- 2,07 Duties of Authorized Ranresentatives. The

    ; Company has empowered the Authorized Representatives and their u                                                                                                                    ,

delegates to act'for.the company in all respects hereunder. The , 1' l L Authorized Representatives may act as a group or may designate one or more Authorized Representative (s) or delegate (s) to- i l perform the duties described in the foregoing sentence. The company shall provide the Trustee with a written statement i setting forth the names and specimen signatures of the Authorized Representatives. The Authorized Representatives shall provide L the Trustee with a written statement setting forth the names and L specimen signatures of any delegate of the Authorized L Representatives. Until otherwise notified in writing by the Company, the Trustee may rely upon any written notice, _/

l

        -instruction,         direction,       certificate        or       other     communication believed-by-it to be genuine and to be signed or certified by any                                   .

one or more Authorized Representatives or their designated ; delegate (s), and the Trustee shall be under no duty to make' any l investigation or inquiry as to the truth or accuracy of any , statement contained therein. ; 2.08 No Authority to Conduct Business. The purpose of this Master Trust is limited. specifically to the matters set ! forth in Sect' ion 2.01 hereof, and there is no objective to carry-on any business unrelated to the Master Trust purpose set forth in Section 2.01 hereof, or divide the. gains therefrom. 2,09 Hg_ Transferability of Master Trust. The' interest of the Company in the - Master Trust is neither transferable, whether voluntarily or involuntarily, by the company nor subject

        .to the payment of the                claims of creditors of the Company;-

orovided, however, that any creditor of the Company as to which a-Certificate has - been properly completed and submitted to the

 ;       Trustee may assert a claim directly against the Master Trust in                                     .,

an amount not to exceed the amount-specified in such Certificate. III. BENEFICIARY OF MASTER TRUST 3.01 Company to be Beneficiarv. The beneficial ownership of the Funds shall, subject to the purpose of the Master Trust, be at all times in the Company. IV. CONTRIL30TIONS AND INCOME 4.01 Contributions. The Company may make such Contributions to any Fund from time to time as it shall deem t l l :. .

s l

                     - necessary or appropriate. The Trustee shall return Contributions              j to the-Company to the extent such Contributions are stated in a                  I l

written opinion of legal counsel to the company, who may be an l I employee of the Company, to be excessive in light of Applicable 1

                                                                                                     -1 Law and Applicable Tax Law.

l 4.02 Allocation of Net Income. The Trustee may pool l l the assets of - the Funds or of any subaccounts thereunder for 1

                     - investment purposes in accordance with the written instructions                ,

of the company, subject to the limitations on investments contained in Exhibit A hereto, and, upon so doing, shall treat , each rund or subaccount so pooled as having received or accrued a

                     - pro rata portion (based on the principal balances of the Funds or subaccounts . so pooled) of the net income of the Master Trust (including appreciation) related to such pooled assets in any accounting period of the Master Trust.              Without limiting the
                   ,  requirements of Section 7.05 hereof, the Trustee shall' maintain such separate records of each of the Funds and the subaccounts thereunder as are necessary to reflect the assets thereof'and the allocation of income and losses-among the Funds and subaccounts
                     - thereunder.      The Trustee may rely upon the written opinion of legal counsel of the Company, who may be an employee of the L

j. <

                     . Company, with respect to any question arising under this Section.

4.02. 4.03 Subseauent Transfers. Upon receipt of a written

         -"           directive of the company signed by an Authorized Representative                    ;

1 L which sets forth an amount to be transferred from one of the 'j L L Funds or subaccounts thereunder and states that such amount l

l. I i i r) $: &

  .    .   .     -    - - - ..         - -      - .       .      .~. - .... ..-. -             - . . -    . .

l l. l

    ~s hould' be transferred to one or more other Funds or subaccounts as specified,           the Trustee shall transfer such amount to the Fund (s) or subaccounts specified by the Company in tho' written directive.

r V. DISTRIBUTIONS 5.01 Payment of Decommissionina Costs and Administrative Costs. -In addition to payments otherwise authorized by,this Agreement, the Trustee shall make payments out of the Funds or any subaccounts thereunder upon presentation to-l the Trustee of a certificate by the company instructing the Trustee to disburse amounts in . the Funds or any subaccounts thereunder in a manner designated in such certificate 'for , purposes of paying costs, liabilities and expenses of

Decommissioning or, if so specified, administrative costs related to servicese authorir.ed by the Company pursuant to Section 5.02.

If.the assets of any Fund or subaccount thereof.are insufficient

to permit:the' payment in full or amounts to be peid pursuant ~to a certificate, the Trustee shall have no liability with respect to such-insufficiency and no obligation to use its own funds.to pay the same. 5.02 Payment of Administrative Exnenses. In addition to the payment of administrative costs paid pursuant-to Section L 5.01 hereof, from time to time, the Tr2stee shall make payments i ! of all administrative expenses (including taxes, out-of-pocket expenses and Trustee's fees as specified in the agreement i; referred to in Section 5.03 hereof) in connection with the o p

   -    _ _ . .   .   .       --    .              -~ . . .-                 -  - - -          - -- . - .

operation of the Master Trust pursuant to this Agreement. - All such administrative expenses and incidental expenses of the Master Trust shall- be allocated proportionately among the Funds (based on the fair market value of'each Fund immediately prior to any such payment) and within each Fund among the subaccounts in the proportion that the balance in each subaccount bears-to the i' aggregate balance of all subaccounts in such Fund; provided, that income taxes- shall be allocated among Qualified- Funds and i Nonqualified Funds in accordance with the income tax actually I imposed on each such Fund. The Trustee shall maintain such records as are .necessary to reflect the allocation of administrative expenses and incidental expenses among the Funds _ l in accordance with this Section 5.02. If the assets of any Fund l 1 or subaccount thereof are insufficient to permit the payment in full of amounts _ payable under this section 5.02, the Trustee L [ snall'have no liability with respect to such insufficiency and no , I. obligation to use its own funds to pay the same. l 5.03 Egaa. - The Trustee shall receive as exclusive-compensation for its _ services such amounts as may from time to l time be agreed to by'the Trustee and-the Company. 5.04 Liauidation of Investments. At the direction of the Company, the Trustee shall sell or liquidate such investments i ! of the. Funds as may be specified.- The proceeds of any such' sale or liquidation shall be credited pro rata to the Fund or Funds - and within each Fund to the subaccount or subaccounts thereunder to which such investment's were credited prior to such sale or liquidation.

VI. TERMINATION 1 6.01 Termination of Funds and Master Trust in General. ; Each Fund' established hereunder shall terminate only upon the earlier of (i) the completion of the Decommissioning of the Unit

             -to which it relates (as evidenced by written notification of.that fact to the Trustee by the Authorized Representative, or (ii) twenty-one (21) years af ter the death of the last survivor of each person who was-an officer or director of the company on the.

date of this Agreement and each of their descendants born on or prior to-that date. This Master Trust shall terminate.upon.the

termination of all of the Funds. Prior to its termination this Master Trust shall be irrevocable.

6.02 Distribution of Master - Trust and Funds UD.QD e - i

l. Termination. Upon termination of this Master Trust, the Trustee i shall liquidate the assets of the Master Trust or such Funds, as the case may be, and distribute them (including accrued, 1 accumulated and undistributed net income), less all reasonable final administrative costs and expenses (including accrued taxes), to the Company.

VII. TRUSTEES l 7.01 Desianation and Oualification of Successor

 - ,          Trustee (s).            At any time during the term of this Master Trust, the company shall have the right t:, remove the Trustee (at the company's sole discretion) acting hereunder and appoint another qualified entity as a successor Trustee upon thirty (30) days' notice in writing to the Trustee, or upon such shorter notice as i

                                                                     - may be acceptable to the Trustee.            In the event that the bank or-trust company serving as Trustee or successor Trustee shall:                              (a) become insolvent or admit in writing- 'its insolvency;                            (b)      be-unable or admit in writing its inability to pay its debts as such debts mature; (c) make a general assignment for the benefit- of creditors.; (d) have- an involuntary petition in bankruptcy filed against itt (e) commence a case under- or otherwise seek to take advantage      of     any     bankruptcy,      reorganization,            insolvency, readjustment of debt, dissolution or liquidation law, statute, or proceeding or (f) resign, the company shall appoint a successor Trustee as soon as practicable.            In the event of any such removal-or resignation, the Trustee or successor Trustee shall have the right to have its accounts finalized as.providad in Section 7.05 hereof.-    Any successor to the company, as provided herein, shall have - the same right to remove and ' to appoint any Trustee or successor Trustee.

Any successor Trustee shall be a bank or trust company incorporated and doing business within the -United States = of America and having a ' combined capital . and surplus of at least

               $250.000,000, if there be such an' institution villing, able and legally qualified to perform the duties of Trustee hereunder upon

l. reasonable or customary terar.

Any successor Trustee shall: qualify by a duly p acknowledged acceptance of this Master' Trust, delivered to the l-L company. Upon acceptance of such appointment by the successor l l Trustee, the Trustee shall assign, transfer and pay over to such Successor Trustee the assets then constituting the Master Trust. I e r e w v4

of W jp , -) V# , 6 ..

                           ' Anys successor . Trustee shall have all the rights, powers, duties                I y          ,                                                                                                  I f3                          'and-obligations herein granted to the original Trustee.                            I n                                  7.02   Eggneration from Bond. No bond or other security              i l

,Y - shall be exacted or required of any Trustee or successor Trustee. ' l l !e, appointed pursuant to this Agreement. J l 7.03 Resianation. The Trustee or any successor

          ;                 Trustee hereof may resign and be relieved as Trustee at any time s

without prior application to or approval by or order of any court by a duly acknowledged instrument, which shall be delivered to the Company by the Trustee no less than thirty (30) days prior to the effective date of the Trustee's resignation or upon such pW shorter notice as may be acceptable to the Company. If for.any j v reason the- Company cannot or does not act'in_the event of the resignation of the Trustee, the Trustee may apply to a court of competent- jurisdiction for the appointment of a successor Trustee l and the cost of making such application shall be- an $ administrative expense. p 7.04 Transactions With Third Parties. No person or / organization dealing with the Trustee hereunder shall be required y to inquire into or to investigate its authority for entering into 1: L any transaction. or to see to the application of the proceeds of l.

                           - any such transaction.
   ,m
                                      '7.05 -  Accounts and Recorts.       The Trustee shall keep            i

!- accurate -and detailed accounts of.all investments, receipts and disbursements and other transactions hereunder with respect to t each Fund and each subaccount thereunder in accordance with specifications of the Company, and all accounts, books and

                                                                       . . . - - - - - - - - - - - - - - - - - - - - - ~ _ - - - .
     ~
 .V l

records relating thereto shall be open to inspection and audit at 1 all reasonable times by any person designated by the . Company. I Within 25 days following the close of each month, the Trustee l shall provide a written report of the estimated market value of 1 each Fund and each subaccount thereunder, prepared on an accrual basis. Within 35 days following the close of each month, the Trustee. shall file with the company a final written report ! setting forth all investments, receipts and disbursements and other transactions effected by it during the month and containing an exact description of all cash and securities contributed, l purchased, sold or distributed and the cost or not proceeds of i L sale, and showing all cash, and securities and other investments J l ! o held at the end of such month and the cost and fair market value of each item thereof as carried on the books of- the Trustee. l Such accounts and reports shall be based on the accrual method of 7 L reporting net income and expenses and shall show the portion of \

       ~the assets applicable to each Fund and subaccount thereunder and                                                                   -

shall also identify all disbursements from each Fund and l l L , subaccount thereunder. l l Upon the expiration of 90 days from the date of filing l , such written reports with the Company, the Trustee shall be I forever released and discharged from all liability- or accountability to anyone with respect to all acts and transactions shown in such written reports, except such acts or } transactions as to which the Company shall take exception by written notice to the Trustee within such 90 day period; provided, however, that nothing contained in this Section 7.05 l l l l

           -          -           --- .                     -    ----.e--

L , shall be - deemed to relieve the Trustee of any ' liability imposed l pursuant to.Section 7.07-hereof. In the event that any exception tahen by the company cannot be amicably adjusted, the company may, within one year of the date of such exception, file the written report in a court having jurisdiction and upon the-audit thereof any and all such exceptions which may not have been amicably settled shall be heard and adjudicar ed. Any exception not so filed within one year shall be deemed waived and any liability of the Trustee with respect thereto shall be deemed I. released. All records and accounts maintained by the Trustee with respect to the Mastar Trust and the Funds shall be preserved for . p ! such period as the company shall specify and in the absence of any instructions from the company shall be preserved for a period of three years. Upon the. expiration of any such required ! retention period, the Trustee shall have the right to destroy such records' and accounts after first notifying the company in writing of its intention and transferring to the company any records and accounts requested by the company. > 7.06 Tax Returns and Other Reoorts. The Trustee shall prepare and file all federal, state and local income or franchise tax returns or other reports (including estimated tax returns and information returns) as may be required from time to time with lI l' respect to the Qualified Fund, and the company agrees to provide l the Trustee in a timely manner with any information which is necessary to such filings which is not in the possession of the Trustee. The Trustee shall prepare and submit to the company in

a timely : manner all- information requested by the company ,! regarding the Funds required to be included in the Company's federal, state and local income tax returns or other reports (including estimated tax returns and information returns) . The Trustee may employ independent certified public accountants or other tax counsel to prepare or review such returns and reports and the cost thereof shall be an administrative cost. The l Trustee agrees to sign any tax returns or other reports where required by law to do so or arising out of the Trustee's responsibilities hereunder, and.to remit from the Master Trust appropriate payments or deposits of federal, state and local income or' franchise taxes directly to the taxing agencies or authorized depositaries. Any interest or penalty charges assessed against the Master Trust pursuant to Chapters 67- or 68 of the code, or pursuant to any similar state or local tax provisions, as a result of the Trustee's failure to comply with this section 7.06 shall be an administrative expense 'unless 1 caused by the Trustee's gross negligence or wilfull misconduct, , in which case such interest or penalty charges shall be borne .by the Trustee and not the Master Trust. The Trustee agrees to notify the company in writing within 10 days of the commencement of the audit of any Qualified Fund's federal, state, or local tax- 1 returns, and to participate with the Company on behalf of the Qualified Fund in such audits and related inquiries. The Trustee further agrees to provide the company with any additional L information in its possession regarding .he Master Trust which l 4 l

I 1 20-may'be requested by the Company to be furnished in an audit of i the Company's federal, state, or local tax returns. 7.07 -Liability. (a) The Trustee shall be liable only for its own acts or omissions occasioned by its willful

 '[ .

misconduct or negligence. In no event, except as provided in clause (iv) below, shall the Trustee be liable (i) for acting'in y accordance with instructions from the Company or pursuant to a legal opinion of counsel to the Company,- (ii) for special or consequential ' damages, (iii) for acts'or omissions of a Federal Reserve ' Bank, the Depositary Trust Company, Participants Trust l1 Company . or a clearing agency governed by Section 17A of the Securities Exchange Act of 1934, or (iv) for the acts or omissions of the Trustee's nominees, correspondents, designees, ! agents, subagents, depositories or sub-custodians, provided the Trustee in appointing same has exercised reasonable care. (b) Notwithstanding anything contained in this Agreement to the contrary, upon receipt of written instructions from the Company (satisfactory in form to the Trustee) as to what transactions would constitute "self-dealing" under Code Section 468A(e)(5) or Codo Section 4951 (or any applicable successor provisions), the Trustee agrees to refrain from authorizing or carrying out the transactions- specified in such instructions I unless the decision' to so refrain would require knowledge of l facts not apparent on the face of such transaction. In this latter case, the Trustee will so refrain only if it has knowledge of the pertinent facts and shall be under no obligation to determine the facts. If the Trustee authorizes or carries out

y; any transaction in violation of the provisions of this clause

         -(b), the Trustee (and not the Master Trust or any Qualified Fund) shall be liable for any tax imposed on the Master Trust, any                      -

Qualified Fund, or the Trustee pursuant to Code Section 4951 (or

  .       any applicable successor provision) and for any loss or damage.

sustained by the Master Trust, any Qualified Fund, or the f company. Otherwise, the Trustee snall not bo liable for any such [m tax or loss.

       +                  '

(c) The Company shall indemnify the Trustee and hold f it harmless against any and all t.laims, losses, liabilities, ! excise taxes, damages or expenses (including reasonable attorneys' fees and expenses) howsoever arising from or in. connection with this Agreement or the performance of its duties hereunder, together with any income taxes imposed on the Trustee as a result of any indamnity paid to it hereunder, provided that nothing contained herein shall require that the Tructee be indemnified for any liability imposed pursuant to clauses (a) or (b) of this Section 7.07. Nothing contained herein shall-limit or. in any way impair the right of the Trustee to indemnification under any other provision of this Agreement. (d) The company understands that when and if the Trustee delivers property against payment, it may deliver such g property prior to receiving final payment and that, as a matter l of bookkeeping convenience, the Trustee may credit one or more of the Funds with anticipated proceeds of sale prior to actual receipt of final payment. The risks of non-receipt of payment

 ..                                                                                                            .l  '
               -11 be the Company's and the Trustee shall have no liability therefor.                                                                                              ,

1

                       -(e)       The provisions of this Section 7.07 and the right                               j 1

of the Trustee to claim the benefit thereof shall survive any termination of this Agreement and any resignation or removal of , the Trustee. VIII. TRUSTEE'S GENERAL POWER The , Trustee shall have, with respect to the Master Trust, the following powers, all of which powers are fiduciary powers to be exercised in a fiduciary capacity and in the best

           . interests of this Master Trust and the purposes hereof, namely:

8.01 Reaistration of Securities. To hold any stocks, bonds, securities, and/or other property in the name of a nominee, in a street neae, or by other title-holding device, without indication'of trust and generally to exercise the powers of an owner, including without limitation the power to vote in accordance witn instructions provided by the Company, with respect to any such property whether so held or held in its own > name, as Trustee. 8.02 Borrowina. To borrow money in such amounts and upon such terms as the Company may authorize in writing as necessary to carry out the purposes of this-Master Trust, and to t pledge any securities or-other property for the repayment of any ; i such loan as the Company may direct. I 8.03 Retention and Removal of Professional and 1 Employee Services. To employ attorneys, accountants, custodians, 1 I

    ,, k L      .

4 1 1

l l engineers, contractors, clerks and agents to carry out the purposes of this Master Trust. The cost of any such employment-shall be an-administrative cost. 8.04 Dalecation of Ministerial Powers. To delegate to other persons such ministerial powers and duties as the Trustee may deem to be advisable. 8.05 Powers of Trustee to Continue Until Final Distribution. To exercise any of such powers after the date on which the principal and income of the Funds under the Master Trust shall have become distributable and until such time as the entire principal of, and income from, the Master Trust shall have l been - actually distributed by the Trustee. It is intended that distribution of one or more of the Funds under the Master Trust ' will occur as soon as possible after - termination of the Master Trust or any Fund.. 8.06 Discretion in Exercise of Powers. To do any and [ all other acts which the Trustee shall deem proper to effectuate l the powers specifically conferred upon it by this Agreement, 4 orovided, h9we.ver, that. the- Trustee may not do any act or' participate'in any transaction which would: (a) Contravene any provision of this Agreement; or (b) violate the terms and conditions of any instructions provided in a written statement of the company. 8.07 Deposit of Funds. To deposit funds in interest >

      . bearing. account deposits maintained by or savings certificates issued by The        Bank of     New York        in    its     separate  corporate j       capacity, or in any other banking institution affiliated with The

(

     .t  .

J Bank of New York; orovided, however, that the assets of a I l Qualified Fund' may only be so deposited if the requirements of Applicable Tax Law are met. 1 8.08 ligrket Inventory Funds. To maintain and operace one or more ' market inventory funds as a vehicle to exchenge

     ' securities among Funds without alienating the property from the                             .

Trust. 8.09 Loanina of Securities. To loan securities to brokers or dealers or other borrowers under such terms and conditions as the Trustee, in its absolute discretion, deems advisable, to secure the same in any manner permitted by law and. l the provisions of this Agreement, and during the term of any such L - loan, to permit the-loaned securities to be transferred into the L

     - name of and voted by the borrowers or others, and, in connection u           .

t with the exercise-of the powers hereinabove granted, to-hold any L prt.perty deposited as collateral by the borrower pursuant to any master loan a.greement in bulk or otherwise, together with the

i. unallocated interests of other lenders, and to liquidate and -,

I retain any such property upon the default of the borrower, and to receive compensation therefor out of any amount paid, by or

      ' charged to the account of the borrower.

8.10 Temocrary Investments. In the event assets of the Funds have not been invested by an Investment Manager at the end of a business day, the Trustee will temporarily invest such uninvested assets in accordance with Section 9.01 hereof. i l l l

                                                                                                                            ..l IX. INVESTMENTS                                    1 9.01  Trustee's General Investment Powers.      Subject to      -f l

the provisions of Sections 9.02-and 9.03, the Trustee shall have I l the power to invest such assets in accordance with the written

     ' directions   of  the   Company,    subject    to the  limitations   on investments contained.in Exhibit A hereto, and, as to Qualified Funds,- in -conformity with the limitations set forth in Section 468A of the code and the regulations thereunder.

Not'hing in this Ar reement shall restrict the Trustee, j in its individual capacity, from acting as an agent. for, providing banking, investment advisory, investment management and other services to,.and generally engaging in any kind of business with others (including, without limiting the generality of the a

     ' foregoing,. issuers of securities, of money. market instruments or of.other property purchased for or on behalf of the Master Trust l

or any of the Funds) to the same extent as if not the ' Trustee hereunder. Nothing in this Agreement shall in any way be deemed l-to restrict the right of the Trustee, in'its individual capacity, to perform services for any other person or entity, and the performance of such services for others will not be deemed to violate or give rise to any duty or obligation:to the company or the Master Trust not specifically undertaken by the Trustee hereunder. Nothing in this Agreement shall limit or restrict the Trustee, in its individual capacity, _or any of its officers, y affiliates or employees from buying, selling or trading in any securities for its or their own accounts. The Trustee, in its l individual capacity, its officers, employees or affiliates, and 1 l' i

4 o its-.other clients may at any time have, acquire,. increase, - i decrease or dispose of positions in investments which are at the L same time being acquired or disposed of for the account of the l-

--- ;   Master Trust-or one or more of the Funds.      The Trustee shall have no obligation to acquire for the Master Trust or any of the Funds t

a position in any property which it acquires in its individual' capacity, or which its officers, employees or affiliates may acquire for its or their own accounts or for the . account of a , client. 9.02' Accointment of Investment Manacer(s). The Company may appoint one or more Investment Managers to direct the investment of all or part of the Master Trust. The Company shall also have~ the right to remove any such Investment Manager (s). Whenever such ' appointment is made, the Company shall provide 1 written-notice of such appointment to the Trustee, shall specify the portion of the Master Trust with respect 'to . which an Investment Manager has been designated, and shall instruct the Trustee to segregate into an Investment Account ' those assets designated for management by the Investment Manager. To the extent that assets are segregated into an Investment Account, the Trustee shall be released from and relieved of all investment duties, responsibilities and liabilities customarily or statutorily incident to a trustee with respect to the assets in Investment Account, and as to such Investment Account the Trustee shall act as custodian. An Investment Manager shall certify in , writing to the Truste'e the identity of the person or persons authorized to give instructions or directions to the Trustee on

   'its behalf, ' including specimen signatures'.                 The Trustee may con *inue to rely upon all such certification unless otherwise notified in writing by the Company or an Investment Manager, as'
   .the case may.be.

9.03 Direction by Investment- Manaaer(s). (a) An Investment Manager designated by the -Company to manage an-Investment Account shall have authority to manage and to direct i the ' acquisition- and disposition of the assets of the Master Trust, or e portion thereof, as the case may be, and the Trustee shall exercise the powers set forth in Article IX hereof only when, if, and in the manner directed by the Company-in writing, and shall not be under any obligation to invest or otherwise manage any assets - in the Investment Account.. An Investment Manager >shall have the powers and authority, exercisable in its a sole discretion at any' time, and from. time to time, to issue and place orders for the purchase or sale of portfolio- securities

   - directly with qualified brokers or dealers.             The Trustee, upon proper notification from an Investment Manager, shall settle the transactions    in      accordance     with   the  appropriate                      trading authorizations.      Written notification of the issuance of each such authorization shall be given promptly to the Trustee by an Investment Manager, and such Investment Manager shall cause the settlement of such transaction to be confirmed in writing to the Trustee, and to the Company, by the broker or dealer.                                   Such notification shall be proper authority for the Trustee to pay for portfolio securities purchased against receipt thereof and to

Ji :' s deliver portfolio securities sold against payment therefor, as the case may be. All directions to the Trustee by an Investment j i Manager shall be in writing and shall~be signed by a person who t i has been certified by such Investment Manager pursuant to Section 1 7.01 hereof as authorized to give . instructions or directions to the Trustee. l (b) Should an Investment Manager at any time elect'to ! place security transactions directly with a broker or dealer, the Trustee shall not recognize such transactions.unless and until it has rece'ived instruction or confirmation of such fact from an Investment Manager. Should an Investment Manager direct the Trustee to utilize the services.of any person with regard'to the assets under its management or control, such instruction shall be in _ writing and shall 'specifically set forth the actions to be

              - taken by the Trustee as to such services. In the event that an Investment   Manager    places ~ security transactions directly   or directs the utilization of a service, such Investment Manager shall be solely responsible for the acts of such persons.        The sole duty .of the Trustee as to such transactions: shall          be incident to its duties at custodian.                                        l (c)   The authority of an Investment Manager and the terms and conditions of the appointment and retention of an Investment Manager (s)- shall be the responsibility solely of the Company, and the Trustee shall not be deemed to be a party or to have any obligations under any agreement with an Investment Manager. Any duty of supervision or review of the acts, omission      -
              -or overall performance of the' Investment Manager (s) shall be the

                      .    .   .   . _  . - -    . . - ~ - ..             .     .   .-     .  .- -.

c. ' i o 1, g, r exclusive responsibility of the company, and the Trustee shal3 '

have no duty to review any securities or other assets purchased by,an. Investment Manager, or to make suggestions to an Investitent Manager or to the ' Company with respect to the exercise or nonexercise of any power by an Investment Manager. X. MISCELLANEOUS , 10.01' Headinas. The section headings set forth in this. Agreement- and the Table of Contents are inserted for convenience of reference .only and shall be disregarded in the > construction or interpretation of any of the provisions of this Agreement. 10.02. Particular Words. Any word contained in the text of this Agreement shall be read as the singular-or plural

            'and as the masculine,-feminine, or neuter'as may be applicable or.

permiscible in the ~ particular context. Unless otherwise 1 specifically stated, the word " person" shall be taken to mean and-

            . include an individual, partnership, association, trust, company, l

or corporation. l 10.03 Severability of Provisions. If any provision of- J this Agreement or its application to any person or entity or in ] 1 any. circumstances shall be invalid and unenforceable, the application of. such provision to persons and in circumstances .l other-than those as to which it is invalid or unenforceable and the other provisions of this Agreement, shall not be affected by such invalidity or unenforceability. l

                                                                               .l 1

10.04 Deliverv- of Notices Under Aareement. Any notice, direction or instruction required by this Agreement to be given to the. company or the Trustee shall be deemed to_have been properly given when mailed, postage prepaid, by registered ' or l certified mail, to the person to be notified as set forth below: ; 1 If to the Company: Central Hudson Gas & Electric Corporation 284 South Avenue Poughkeepsie, New York 12601-4879

                  .-Attention:      Treasurer 1

If to the Trustee:- The Bank of New York One Wall Street New York, New York 1028? Attention: Institutional Investment. Counsel-The Conpany. or the Trus* 1 may change the above address- by delivering notice thereo' in writing to the other party. Alterations and Amendments.- The Trustee and the

10.05 company understand and agree.that modifications or amendments may be required to this Agreement, and to the exhibits'and schedules hereto, from time to . time to .effecti: ate the purpose of the Master Trust and to comply with Applicable Law, Applicable Tax Law, any order, . any changas in tax laws, regulations or rulings (whether 11 L _ published or private) of the Service and any similar state taxing authority, and any other changes in the laws applicable to the l-Company or the Company's Interest in the Unit. This Agreement, p and the exhibits hereto, may ao altered or amended to the extent b' necessary or advisable to effectuate such purposes or to comply with such Applicable Law, Applicable Tax Law, Order or changes. I i l l

y- e ~31-otherwise, -this Agreement, and the exhibits and schedules hereto, may be amended, modified, or altered for any purpose requested by the company so long as such amendment, modification, or alteration does not affect the use of the assets of the Funds to pay the costs of Decommissioning. Any alteration or amendment to, or modification of, this Agreement or an exhibit hereto must be in writing and signed by the company and the Trustee. The Trustee shall execute any such alterat' ion, modification or amendment required to be executed by it and shall accept and be governed by any amended, modified or altered schedule delivered to it but shall have no duty to inquire or make any investigation as to whether any amendment, modification or alteration is consistent with this Section 10.05. 10.06 Successors and Assions. Subject to the provisions of Sections 2.09 and 7.01, this Agreement shall be binding upon and inure to the benefit of the Company, the Trustee and their -respective successors, assigns, personal representatives, executors and heirs. 10.07 Governino Lawr Jurisdictioni certain Waivers. (a) The Master Trust and all questions pertaining to its validity, construction, and administration shall be determined in accordanc6; with the internal substantive laws (and not the choice of law rules) of the State of New York to the extent not superseded by Federal law. The Company and the Trustee hereby waive the right to a trial by jury in any action or proceeding brought hereunder.

E l l 1 1 (b) To the extent that, in any jurisdiction, the 1 Company has or hereaf ter may acquire, or is or hereafter may be entitled to claim, for itself or its assets, immunity (sovereign or otherwise) from suit, execution, attachment (before or after , judgment) or any other legal process brought by or on behalf of the Trustee and arising with respect to this Master Trust or the . Trustee's functions hereunder, the company irrevocably agrees not tc claim, and hereby waives, such immunity. 10.'08 Accountina Year. The Master Trust shall operate , on an accounting year which coincides with the calendar year, January 1 through December 31. 10.09 Counterottig. This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 10.10 Decommissionino Liability. Nothing in this Agreement or in any supplement is intended to impose any responsibility on the Trustee for overseeing or paying the cost of the Decommissioning of the Company's Interest in the Unit other than, in the case of the Trustee, the disbursement of funds in accordance with Article V hereof. k L 4

                                       --m-  e e.- n          e   --

i l 1 l I EXKIBIT A CDfIRAL HUDSON CAS & ELEC'IRIC CDRICPATION [ECCtHISSIONING 'Il0ST GUALITTm ITND , Investment Objective

  'Ihe investment objective of the ibrd is to maximize retunw, within the context of the following investment guidelines.

i INVESIMDfr GUIDEIllE General Investments for the qualified portion are to be made in strict otmpliance with Internal Revenue code Section 468A (e) (4) (c). Elioible In m L.icits

1. Public debt securities of the United States including treasury bills, '

notes and bonds. Securities of govemment agencies are not pemitted.

2. obligations of a State or local government that are not in default as to principal or interest.

3. Time or danand deposits in a bank or an insured credit union located in the United States. 'Ihese deposits shall be limited to the amount of insurance provided. ,

Ouality Starvhttis

   'Ihe quality standards for obligations of a State or local govertiment shall be:

1. Each security shall be rated Baa or better by Moody's and BBB or better by Standard & Poor's.

2. Investment in securities rated below single A shall be limited to 10%

of the market value of the Ebnd.

P I l P Maturity an:1 turation Reauirenent ;

1. Maturities shall occur in at least 5 of the followirg 10 years.

2. Se maximum average duration of the portfolio shall not exceed 5.5 years.

r Diversification - , The following diversification standards will be applied when the mrket value of the nixl reaches $2 million. Until the Furd reaches that level, i no sirgle issuer shall exceed 35% of the mrket value of the total portfolio at the time of purchase. mese diversification contraints shall ; exclude U.S. Treasury issues. I

1. 11o single issue in the portfolio shall exceed 5% of the mrket value of the total portfolio at the time of purchase.

2. 11o single issuer shall represent more than 10% of the market value of the portfolio at the time of purchase.

3. tio more than 25% of the mrket value of the total portfolio may in the aggregate be invested in the securities of any one State and/or of tho governmental subdivisions of the State.

OthCI

1. 7nternal Revenue Ccxle Section 468A prohibits investment in repurchase

agreements or caningled funds of any nature.

2. The fund will be actively managed to take advantage of market imbalances.

l l'

_ . _ . _ . _ . _ . _ . - ~ __ _ _ _ . _ _ . _ . _ _ . . _ _ . _ _ _ ._ _ _ . . _ - _ . _ _

<                                                                                                                                         l
                                                                                                                                          +

EXHIBIT B CERTIFICATE NO. The undersigned Authorized Representative of CEN'IRAL HUDSON GAS & ELECTRIC CORPORATION (" Company"), an corporation, being duly authorized and empowered to execute and , deliver this certificate, hereby certifies that payments in the ! amounts and to the payees listed below are for obligations duly incurred by the company during the Decommissioning of (insert name of Unit)'under Applicable Law cnd hereby directs the Trustee 7 the CENTRAL HUDSON GAS & ELECRIC CORPORATION Master Decommissioning Trust (Master Trust) , pursuant to Article V of i the Master Trust Agreament to pay to each payee listed, including , the Company .it so listed, (Payees) in Exhibit 1 hereto, the amounts set forth therein, and certifies that the payments requested are proper expenditures of the Master Trust. . Accordingly, request is hereby made that the Trustee provide for the withdrawal of $ from the (insert name of Unit and Fund and Subaccount(s)) in order to permit payment of l such sum to be made to the Payees. You are further requested to disburse such sum, once withdrawn, directly to such Payees in the following manners (CHECK / WIRE TRANSFER / ) on or before ! , 19 .

WITNESS MY HAND THIS day of , 19_ .

l CENTRAL HUDSON GAS & ELECTRIC CORPORATION By: Name: Authorized Representative

    ._ _. _      . . ~ . .   ._. _ . _ _ _ ._                      _.       .        _ _ _ _ _ . _ _ . _ . _ _            __ _

l 1 STATE OF NEW YORK ) l

                             )       sat                                                                                           :

COUNTY OF NEW YORK ) I

I, Sylvia Cohen, a Notary Public in and for the , aforesaid jurisdiction, do hereby certify that John F. Drain, who ) is personally known to me to be the person who executed the 5 foregoing Master Decommissioning Trust Agreement, personally , appeared before me in the aforesaid jurisdiction, and as ' Treasurer of CENTRAL HUDSON GAS & ELECTRIC CORPORATION, and by virtue of the power and authority vested in him, acknowledged the same to be the act and deed of CENTRAL HUDSON GAS & ELECTRIC CORPORATION, and he executed the same as such. : Given under my hand and seal this 8th day of March, 1990. t { NOTARIAL SEAL) ,

                                                  'd lt sn                         w Notary Public, State of New York My commission expires 8.,4 3/ /9?d.

SYWlA COHEN // / Notary Public, State of New Yo,$ No. 315747950 Qualified in New York County Commission Expires qf l 1 1

STATE OF NEW XORK )

                                )       as:

COUNTY OF NEW YORK ) I, Gylvia Cohen, a Notary Public in and for the aforesaid jr.risdiction, do hereby certify that Stephen P. Weis, who is perr,onally known to me to be the person who executed the foregoing Master Decommissioning Trust Agreement, personally appeared before me in the aforesaid jurisdiction, and as a Vice President of THE BANK OF NEW YORK, and by virtue of the power and authority vested in him, acknowledged the same to be the act and deed of THE BANK OF NEW YORK, and he executed the same as such. Given under my hand and seal this 8th day of March, 1990. . (NOTARIAL SEAL) D n~

                                                ,lf/ WLL-s             $

mv Notary /Public, State of New York My commission expires'o/i, ?/ /r6

SYLVIA COHOW N NotaN Public, State of New M No. 315747950 Qu thfled in New ym q Commit Hon Explig l.

i IN WITNESS WNEREOF, the Company and the Trustee have j set their hands and seals to this Agreement as of the day and l year first above written.

                                                                                                                                              ,i CENTRAL              HUDSON        GAS          &       ELECTRIC                 J CORPORATION                                                                      !

By: , _e ' { r flpe t JOM N F. O KAtN' uritie: M6*WA ; Atteat: AL44 ' Nam .' (Ed. C Tit Se m THE BANK OF NEW YORK, as Trustee By Name: , b Wld STEAcq P u.>e <J Titlet Vit6 fff5ebr # Atte }?ft t u f fMM , sem., ,9s.g,4.s e a l Tit 1et h ;gg Q Cg g,v ~ +.. r < RJtMarch T 1990/CNGEC0fA. DOC 1 1 1 I i i

[ CEWikAL HUD$DN C $ L [LECTE!L CDRPORAi!DN Ithiht C l kiw Milt Unit 2 titernal trost Fund ~ for Deconsilliering tests t ......................... NRC Ministe Furidits Assurante Plati (l000) FUND INTERNAL REV.R[D. 101AL 6.0. AAA FUND

                           ) ALAN ( l     FUND         FORFUND            FUQ      MUNICIIAL$        FUG             Mfi F(E6 3      14 LAC ( 3 DEG. OF YE. TRANSF[k         MID$1T         HPDSli     (TAI [1.)      [ARNINBS         2$ bA$l$ fl$        1[ AR (O PERIOD              (11          (2)            (3)            (41          ($1             (6)               (7)                       (8) t 7/1/89-6/30/90                    0       459til            66             525       5.751              'l                    0                    532 7/1/90-6/30/91                  532          0           787(2)            767       5.751             53                     2                 1,370 7/1/91 6/30/92               1,370           0            241(3)           B41       5.751            103                     5                 2,309
    *//l/92 - 6/30'93            2,309           0            f41              041       5.751            !!7                     7                 3,300 7/1/92 + 6i30/94             3,3%            0            641              B41       5.'lti           (14                    10                 4,345 7/1/94 - 6/30/95             ',345           0            G41              641       5.751            274                    12                 3,666 7/1/95 - e/30/96             5.449           0            B41              941       5.751            337                    15                 6,611 7/1/96 - 6/30/97             6,611           0            fel              041       5.751            404                    1E                 7,939 7/1/97-6/30/99               7,639           0            P41              641       5.751            475                    21                 9,133 7/1/96 6/30/99               9,133           0            641              B41       5.751            149                    25                10,499 7/1/99 - 6/30/00           10,499            0            Est              641       l,. 7l,1         628                    Ri                11,938   .

7/1/00 6/30/01 11,939 0 641 241 5.75% 711 31 13,4t9 ; 7/1/01-6/30/v2 13,4!9 0 641 641 5.751 798 36 15,063 7/1/02 - 6/30/03 15.063 0 B41 B41 !.751 E90 40 16,754 7/1/03 - 6/30/04 16,754 0 E41 041 5.751 90E 44 18,530 7/1/M 6/30/05 13,536 0 941 641 5.751 1,090 49 20,420 7/1/0!-6/30/06 20,420 0 B41 B4! 5.751 1,192 54 22,406 7/1/06 - 6/30/07 22,406 0 641 841 5.751 1,313 59 24,501 7/1/07 - 6/30/06 24,501 0 041 641 5.7l,1 1,433 64 26,711 7/1/06 - 6/30/09 26,711 0 841 941 5.751 1,560 70 29,042 7/1/09 6/30/10 29,042 0 641 641 5.751 1,694 76 31,501 7/1/10 - 6/30/11 31,501 0 B41 941 5.7l,1 1,635 B2 34,095 7/1/!!-6/30/12 34,0(! O B41 641 5.751 1,985 29 36,632 7/ ult - 6/30/13 36,632 0 B41 B41 5.751 2,142 96 39,719 7/1/13 - 6/30/14 39,719 0 941 B41 5.751 2,306 103 42,765 7/1/14 6/30/15 42,765 0 641 641 5.75% 2,463 til 45,976 7/1/15-6/30/16 45,976 0 641 641 5.75% 2,668 119 49,367 7/1/16 - 6/30/17 49,367 0 641 B41 5.75% 2,663 126 52.943 7/1/17 6/30/16 52,943 0 941 041 5.751 3,063 137 56,715 7/1/1B - 6/30/19 56,715 0 041 641 5.75% 3,285 147 60,694 7/1/19 - 6/30/20 60,694 0 841 B41 5.75% 3,514 157 64,292

   .7/1/20 - 6/30/21           64,092            0             041             841        5.751        3,755                    169                69,320 7/1/21-6/30/22             69,320            0             641             B41        5.751        4,010                    179                73,992 7/1/22 - 6/30/23           73,992            0             641             941        5.751        4,279                    191                79,920
   .7/1/23 - 6/30/24           76,920            0             841             B41        5.751        4,562                    204                P4,119 7/1/24 - 6/30/25           64,119            0             B41             641        5.751        4,661                    217                69,604 7/1/25 - 6/30/26            B9,604           0             841             B41        5.75%        5,176                    232                95,389 7/!/26 - 10/31/26          95,389            0             200             200        5.751        2,299                    101                97,650 10TfL                          459        30,565            31,024                    69,961                3,12B NDTES:

(1) 6324 deposited on March 15,1990 and $135 deposited on April 2,1990. (2) Aeount allowed in Case 89-E-107, Opinion 90-16, datee May 21,1990. (31 Annual depetits adjusted fris SB40.90 to SB41. .

m BEFORE THE ' UNITED STATES NUCLEAR REGULATORY COMMISSION Long Island Lighting Company _ Docket No. DECOMMISSIONING REPORT Long Island Lighting Company hereby submits this i Decommiccioning Report in compliance with 10 C.F.R. 5 50.33(k) i and i 50.75(b).

1. n owns an 10% undivided interest in the !

Thecom$ehointnucleargeneratingunitNo.2 Nine Mi .

(NMP2), j i

2. The Company hereby certifies that financial :

assurance is provided in the amount of $32,491,195 : (1989 dollars) for decommissioning its share of the :

                       -contaminated portion of NMP2, The calculation of                1' this amount'is set for in Exhibit A and complies with the formula set forth in 10 C.F.R. $

50.75(c). The Company acknowledges its 18%

undivided interest with respect to the total i financial assurance amount of $180,506,636- J (1989 dollars). ;

                 .3. The method by which the Company.provides financial              .!

aesurance-for decommissioning its share of the " conteminated portion of NMP2 is the establishment of an extc.rnal trust in which deposits with be made- ; t at least annually,

4. Attached as Exhibit B to this Decommissioning Report-is a copy of the executed trust agreement.

5. Attached as Exhibit C to this Decommissioning .

Report is a schedule setting-forth proposed- l o contributions to the external trust for > decommissioning the Company's 18% share of'the ! contaminated portion of.NMP2, This schedule is , adjusted for inflation to the projected cessation : of operations in October 2026. 3s . LONG ISLAND LIGHTING COMPANY , By: Vi6e~ Pres 4(ent-- Finance i Dated' June 25, 1990 y - e m + w Q ff-

Exhibit A I.!#1111 ... 6 talteletici et tislave fi4Htial Alstreste newet blWL litt PG.;hl W611 id

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                                                                                 ~~~~a                        lett 151461 (lptie; tweet;                                       lit               32 31,411,19)

Ct t!Wl## l 1994 it 133,ti),lH tre tett flettrit 6 tal in ,4tl.lM tetittler Let ut (lettrit 141 !),t?l.121 1] 6Hal!A!61 iAtiDI (il flee !!.s hit:1 1.341 teatral hisu las of llettrit it 16.24,19) Et fitted I 1(48 te 1949 ti llH Hi.634 IH1 llH,Hl.634 seeiniens eu . nese

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II, et 6HilliMt1 TotfH 183!13 (til FIHlat 1(llliti, VR.53 W0.123, Pal; ll, p IHil.) 4, 1111:41:1 telt 11 ear il s (1916 4 test) ( .6% * .13( * .!;l 1 tilt ital (W Hhl'Hhl 14tt0t i I.il 1.!!il * (.13 .427)

I.!! t 1.tif) .

1991 Yl6014 61;019fut 16(168 e 1.346 umm leertti pers ~~. tataler tentnit talor inite,0.1. ItHrtetet 6f L6bst, laren of labor Statistics idle 25, (episteest tut laies, vivait saf ars, tortheast legies. I i tierte scult tu (nonettu Prohter Price !Hn lata, f alle 6: dere P enals letistrial swer, tese, test 1$43, I

elettric por (131) tit filantiti dere f etah tient fielt s!!s, tue, tode ll?)

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1. InttilL611H OF Int 16tli

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eletirit peer taler (lla CteHasatten, llorthust leliu IHl1 Ithst. Fuer, CC 414, he-Atlatit IGl!

JH 1986 Attul 134.5 Jet Illi attol 111.9 Hj ltH setut 19.4 ttt 1964 Actul Itt.) H. Illt Attui 1H,4 ;*t !'It 4:1u1 111.4 . 1944 to tr til 1999 litt futer 1.!!6 !!!i to it (si till litt f atter 1.131 emm eume leerer ([h I e feel til norlal (Ils ti ...fatl

                                                                                                                                  ....i.lt      ens, it ep;                                                          Intt litder litt, liUell 13D lo. (6thD66 litt fit HI                                                               1641986 4ttul                                                                       92.4
                     ......... ....... .............................                                                              3(g 1til 4(tul                                                                      10.7 fint                                                                               !Hl!                       Kt 1989 6ttial                                                                      64.1
                                                                                                                                                                                                                   ....m 1/1/86 dihlhtttu lit!                                                              !.HI                                                   1986 to tr (H 1989 till f atter                        1.134 1/illi 50. CH3uu lift                                                              1.114                                                                                                       *"""         t IIllit $2. (At:t nn $l1! (tst i 4.41)                                             1.194 (il                                                                                                                .

tilth 10. (Attt!he litt it:615.H) 1. tit (4)

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8.77(0.136)) 0.177 I nuun t

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p-Exh'ibit! R t et a f f i h t A Y LONG ISLAND LIGHTING COMPANY DICOMMISSIONING TRUST AGREEMENT . FOR ; e N7NE NILE POINT. NUCLEAR STATION UNIT TWO ; t t t i Dated: May 29, 1990 f P e [-~

l

 "                                                                                                             l
                                 '7ABLE OF CONTENTS Page ARTICLE I. UttJNITIONS.                                                                           l 1.01     Definitions..................................                                          j ARTICLE II. TRUST PURPOSES, NAME AND FUNDS                                                         j 2.01     Tru st Pu rpo s e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.02 Establishment of the Trust................... 2.03 Acceptance of Appointment.................... - 2.04 Name of Trust................................ 2.05 Segregation of Trust......................... 2.06 Designation of Funds..........................

            .2.07     Duties of Authorized Representatives.........                                          t 2.08     No Transferability of Trust..................

ART;CLE III. CONTRIBUTIONS AND INCOME 3.01 Initial Contribution......................... L 3.02 Additional Contributions..................... - Allocation of Income......................... t 3.03 l , 3,04 Subsequent Adjustments....................... r

      - " ARTICLE IV. DISTRIBUTIONS 4.01     Payment of Decommissioning Costs.............

4.02 Payment of Expenses of Administration........ , 4.03 Fees......................................... ! 4'.04 Liquidation of Investments................... ARTICLE V. TERMINATION b 5.01 Termination of Tunds and Trust in Genera 1................................. , 5.02 Termination of Qualified Fund Upon Disqualification...................... j 5.03 Termination of Qualified Fund l _ on Sale of P1 ant........................... l 5.04 Distribution of Trust and Funds Upon Termination........................... l 6 I

r t 4 i ARTICLE VI. ' TRUSTEE

                ~6.01        R em eval o f Tru ste e . . . . . . . . . . . . . . . . . . . . .. . . . . . .

6.02 Resignation of Trustee....................... 6.03 Other Events Disqualifying the Trustee....... 6.04 Designation and Qualification of Successor Trustee.......................... 6.05 Exoneration from Bond.......a................ 6.06 Accounts and Reports......................... 6.07 Settlement of Accounts..........'............. 6.08 Tax Returns and Other Reports................ - 6.09 Liability.................................... 6.10 Indemnity.................................... ARTICLE VII. INVESTMENTS 7.01 Appointment of Investment Manager (s)4 ........ 7.02 Direction by Investment Manager (s)........... , 1 ARTICLE VIII. TRUSTEE *S GENERAL POWERS 4 8.0I Extension of Obligations and Negotiation of Claims...................... B.02 Registration.of Securities................... . 8.03 Borrowing.................................... 8.04 Retention and Removal of Professional

        -                       and Employee Services......................

8.05 Powers of Trustee to Continue Until Final Distribution................... 8.06 Discretion in Exercise of Powers............. ARTICLE IX. TRUSTEE *5 INVESTMENT POWERS 9.01 Preservation of Principa1..................... 9.02 Investment of Qualified Fund................. 9.03 Investment of Nonqualified Fund.............. 9.04 Cash Sweep Investments....................... 9.05 Management of Trust.......................... ARTICLE X. MISCELLANEOUS , 10.01 Headings..................................... 10.02 Particular Words............................. 10.03 Severability of Provisions................... 10.04 Delivery of Notices Under Agreement.......... 10.05 Alternations. Modifications and Amendments... l 10.06 Successors and Assigns....................... . L 10.07 Governing Law................................ L 10.08 A c c oun ti ng Y e a r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.09 Counterparts................................. . EXHIBIT A CERTIFICATE r si l' i

                          'PECOMfqSS10NING TRUST AGREEMENT                                       '

AGREEMENT made this 29th day of May 1990, by and between Long Island Lighting Company, a New York corporation (" Company"), and Mellon Bank, N.A., a national banking association having trust powers (" Truster"). 1ECITALS OF_THE_C_OMPANY WHEREAS, the Company is the owner of an eighteen percent l (18%) undivided interest in Nine Mile Point Nuclear Station Unit i Two ("Nine Mile Unit Two" or the "Tlant"); and j WHEREAS, the Conpany is subject to regulation by the Public ) i Service Commission of the State of New York ("PSC"), an agency of i the State of New York created and existing pursuant to N.Y. Pub. Ser. Law i 1, et sea. and the Nuclear Regulatory Commission ("NRC"), an agency of the United States government created and existing pursuant to 42 U.S.C. I 5841; and WHEREAS, the PSC has permitted the Company to include in its cost of service for ratemaking purposes certain amounts in order to provide monies for the Company's share of expenses with - t respect to the Company's ownership interest in the Plant; and WHEREAS, pursuant to Section 46BA of the Internal Revenue Code of 1986 (" Code"), certain Federal income tax benefits are available to the Company by creating and making contributions to e a qualified nuclear decommissioning reserve fund associated with l the Company 's ownership interesta in the Plant; and WHEREAS, the Company wishes to establish both n' qualified l nuclear decommissioning reserve fund and a nonqualified nuclear l

       ,                                                                                                i se
         . decommissioning reserve fund to hold monies for decommissioning                              i the Plant; and                                                                                '

WHEREAS,-the Company wishes to estabidsh a Trust for the collective investment of the assets of the qualified and nonqualified nuclear decommissioning reserve funds for the Plant, wherein each Fund shall constitute a separate trust under the , Trust; and ; WHEREAS, the assets of each of the qualified and , o nonqualified nuclear decommissioning reserve funds shall be , l desmed to have been transferred to a Trust to be held hereunder ! for the benefit of such Funds. !

                                                  . RECITALS OF TRUST E                                 ,

! WHEREAS, Mellon-Bank. N.A. (" Trustee"), is a national

     -    banking association with trust powers; and WHEREAS, the Trustee is willing to serve as trustee to the                            .

Trust em the terms and conditions herein set forth. - s NOW. THEREFORE, in consideration of the mutual premies ,

         .herein contained, the Company hereby agrees to deliver to the Trustee and the Trustee hereby agrees to receive contributions to                            ;

the Trust; and TO BAVE AND TO EDID such assetst and . TO INVEST AND REINVEST the assets of the Trust as provided he'.ein; and

TO TAY OR DISTRIBUTE from the Trust as provided hereint IN TRUST htvuuntLESS, for t.he uses and purposes and upon '

I: the terms and conditions, as hereinafter set forth. t 2 l l

1 l 1 i 1 d

2. TITINITIONS 1.01 h finitions. An used in this Decommissioning Trust i

Agreement, the following terms ahall have the following neanings: (1) " Agreement" shall mean and include this Decommissioning , Trust Agreement as the same inay be amended modified or i supplemented from time to time. ! (2)

Authorized Representative" shall include the persons l

      > designated pursuant to Section 2.07 hereof.

(3) "Certifiente" shall wenn a document properly completed ; and exeented by an Authorized Representative of the Company and ; substantially in the form of Exhibit A hereto. (4) "Cade" t. hall nean the Internal Revenue Code of 39B6, az ; the same nay be amended from time to timo, j (5) " Company" shall mean Long Island Lighting Company. (6) " Contribution" shall mean any contribution, cash or , otherwiLe, made to the Funds. ; (7) "Deccmmissioning Collections" shall wenn all monies

collected by the company from its customers required to be

       " deposited hereunder for Decommissioning Costs associated with the    !

Plant. , (B) " Decommissioning Costs" shall mean the expenses

       ' incurred in decommissioning the Plant.
              -(9)  " Excess Contribution" shall have the meaning set forth    ,

in Section 3.04 hereof. L (10) '" Fund" shall inean either the Qualified or Nonqualified , Fund. 3 l l

1

 .n -

i

(II)

Funds' shall wean the Qualified Yund and t.he i l

Nonqualified Fund, collectively. i (12) " Investment Account" shall wenn an account established by the Trustee pursuant to Section 7.01 hereof.

               -(13)     " Investment Manager (s)" shall wenn the fiduciary                             ,

specified in an Investment Manager Agreement (s), including any i employee of the Company or its-affiliated companies. ,

               '(14)     " Investment Manager Agreement (s)" shall mean an                              ;

agreement (s) between the Company and an Investment Manager (s) selected by the Company which agreement governs the investment nanagement of all or a portion of the Truct. (15) " Trust" shall consist of the Contributions to the Funds by the Company pursuant to this Agreement together with the

      -    proceeds and reinvestment thereof.

(16) "Nine Mile Unit Two" shall mean the Company's eighteen percent (IB%) undivided ownership interest in Nine M11'e Point . Nuclear Station Unit Two. (17) "Nonqualified Fund" shall consist of the Contributions by the Company for decommissioning Nine Mile Unit Two (but only to the extent such Contributions are not deposited and maintained

in the Qualified Tund) plus earnings and apprecintion thereon.

1 (IB) " Qualified Fund" shall mean the Nuclear Decommissioning

        . Reserve Fund estabidshed for Nine Mile Unit Two pursuant to Section 46BA-of the Code, and shall consist of Contributions by 1

the Company for decommissioning Nine Mile Unit Two plus earnings and appreciation thereon, which Contributions are specified in a Schedule of Ruling Amounts with respect to Nine Mile Unit 7Vo. 4 i n-- ,. . - - . , .-,-.- -

1 ! 1 ! ', l (19) ' *NRC* shall nean the Nuclear Regulatory Commission, as

            - defined in 42 U.S.C. I 5B41.

1 (20) "?SC" shall 1nean the Public Service commission of the i State of New Yorit, as defined in N.T. Pub. Ser. Law i 3, e_t sea,

                          *0rder" shall mean any order relating to                             !

(21) 1 decommissioning the Plant issued by tho' PSC or the NRC. l (22)

Plant" shall mean Nine Mile Unit Two. 1 (23)
Schedule of Ruling Amounts" shall have the meaning set l 1

forth in Section 45BA(d)(i) of the Code. 1 (24) " Service" shall mean the Internal Revenue service. J ( P.5 ) " Trustee" shall mean Me13cn Bank, N.A., or ary j l successor appointed pursuant to Section 6.04 hereof. , 11- 7E @ l.RMFP_QSES_, NN E.hND,, M S.

        .           P.01   Trust Purp_oses. The exclusive purposes of this Trust             ,

are to hold funds for the contemplated decommissioning of the , Plant ,, to constitute a qualified and a nonqualified nuclear , decommissioning reserve fund for the Tiant (the Qualified Tund being established pursuant to Section 46BA of the Code, any applicable successor provisions and the regulations thereunder) and to comply with any Order. 2.02 'Es_tablishmept_ of._the Trust. By execution of this ! Agreement, the Company: . (a) establishes the Trust which shall be effective May , , 1990, and which shall consist of such Contributions as way be delivered to the Trustee by the Company for the Funds. ' The Trust also shall include additional contributions, and earnings and 1 appreciation thereon: 5

 ' ..                                                                                    t i

(b) - establishes the Yunds, 'ench of which shall constitute a l trust consisting of such Contributions as may be delivered to the , i Trustee by the Company as designated for such Fund. Each Fund shall include additional Centributions designated for such Fund, and earnings and appreciation thereen; and (c) appoints Mellon Bank, N.A. as' Trustee of the Trust. 2.03 Ac_ceptance c of_Appointme_rtt. Upon the terms and conditions herein set forth, Mellon Bank, N. A. accepts the

I appointment as Trustee of this Trust. The Trustee shall receive any Contributions deposited with it by the Company and shall hold, manage. invest and administer such Contributions, together with earninge and appreciation thereon, in accordance with this I Agreement.

        .         2.04    Name of Trust. The Contributions received by the             ,

Trustee from the Company together with the proceeds, reinvestments and appreciation thereof shall constitute the "Long Island Lighting Company Decommissioning Trust." 2.05 Segregation _of_ Trust. The Trust shall be divided by the Trustee into the Funds as follows: (a) Qualified Fundt and ] (b) Nonqualified Fund. . The Trustee shall naintain such records as are necessary to reflect each Fund separately on its books from each other Fund and shall create and maintain such subaccounts within each Fund as the Company shall direct. 2.06 De_signation of Funds. Upon (i) the initial Contribution to the Itust as specified in Section 3.01; (ii) any [ 6 L I

           . addition to the 7tust pursuant to Section 3.02; (iii) any                     ;

j adjustment to the Tunds pursuant to Section 3.04t er (dy) any , withdrawal from the Trust for Decommissioning Costs pursuant to > c Section 4.01, or for administrative expenses pursuant to Section 4.02, the Company shall designate (in vrlting) the Fund (s) which t are to be credited or debited for the us.ount of such I Contribution, withdrawal, addition or adjuttment, and the Trustee shall credit or debit the Tund(s) in accordance with such

             . de si gnatien t provid_ed, however, that if the Company f ails to           i designate the Fund (s) to which payment of administrative expenses           ,

is to be debited, such payment shall be debited pro rata (based upon the f air warhet value of each Fund) among each Fund. 2.07 Duties of Authorized Teepresentatives. The Company hes empowered the Authorized Representatives and their delegates to ; act-for the Company in all respects hereunder. The Authorized Representatives may act as a group or may designate one or more l Authorized Representative (s) or delegate (s) to perform the duties described in the foregoing sentence. The Company shall provide the Trustee with n wrdtten statement setting forth the names and specimen signatures of the Authorized Representatives. The ' Authorized Representatives shall provide the Trustee with a written statement setting forth the names and specimen signatures of any delegate of the Authorized Representatives. j

                   ,2.08   No_ Transferability of Trust. The interest of the Company in the Trust ds not transferable, whether voluntarily or 1

involuntarily, by the Company not subject to the claims of I l' creditors of the companyt provided, however, that any creditor of 7 1

I' 1 t \ ! the Company as to which a Certificate for payment of decommissioning costs has been properly completed and submitted , to the Trustee may assert a claim directly against the Trust in i an amount not to exceed the amount specified in such Certificate. III. ' CONTRIBUTIONS AND INCOME 3.01 Initial Contribution. On or'after the date first , L written above, the Company shall cause to be delivered to the ; Trustee an initial Contribution. ; 3.02 Additional Contributions. Trem time to time after the initial Contribution to the Trust and prior to the termination of this Trust, the Company may make, and the Trustee shall accept, additional Contributions to the Trust to satisfy the purposes of-this Trust as set forth in Section 2.01, which contributions may be made to the Cunlified Fund or to the Nonqualified Fund. , l 3.03 Allocation of Income. The Trustee may pool the assets .

                                                                        .                                i of the,, Eunds for investment purposes in accordance with the written instructions of the Company, and, upon so doing, nay treat each Fund so pooled as having received or accrued a pro rata portion (based on the principal balances of the Funds so pooled) of the net income of the Trust (including appreciation) reinted to such pooled assets in any accounting year of the Tru st ~. The Trustee shall maintain such Tecords as are necessary to reflect the allocation of smcome and losses among the Funds in accordance with this Section 3.03.        The Trustee mey rely upon the written opinion of legal counsel'of the Company with respect to                              ,

any question arising under this Section 3.03. } 1 L l B 1 I I 1

    .                                                                            t
             .3.04  _Sub_sejtuent Adiustwents. The Trustee and the company       !

understand and agree that the Contributions made by the Company t to the Qualified Fund from time to time may exceed the amount 3 perwitted to be paid into such Fund pursuant to Section 46BA of the Code and any regulations thereunder, based upon changes An i t estimates, subsequent developments or any other event or r occurrence which could not reasonably have been foreseen by the ; company at the time such Contribution was made (" Excess ; Contribution"). Upon receipt of a written certificate of the Company setting forth the amount of the Excess Contribution to be j transferred ("Excens Assets") from a Fund and stating that such Excess Contribution and any earnings and appreciation thereon should be transferred to the other Fund as specified or paid to any person or entity, including but not limited to the Company, the Trustee shall transfer or pay such Excess Contribution, as 1 the case may be, to the Fund, person, or entity specified by the Company in the written certificate. The Trustee and the Company further understand and agree , that a transfer of monies among the Qualified Fund and the l Nonqualified Fund may be necessary to effectuate the purposes of ; this Trust. TV. DISTRIBUTIONS 4.01 _P_ayment of Decommissionino Costs. Upon receipt of a j Certificate, the Trustee shall make payment of, or the ; reimbursement for, Decommissioning Costs to any person (including the Company) for goods provided or labor or other services I rendered in connection with the decommissioning of the Plant. l

9 I

1 l

    .                                                                               \

Notwithstanding the above, the Company may also make payment of, or the reimbursement for, decommissioning costs not associated , with the Trust. 4.02 Etym _ent of Expenses of Administration. Upon receipt of a Certificate, the Trustee shall make payments of i administrative costs (including taxes, reasonable out-of-pocket i expenses, trustee's . fees and investment manager's fees) and other incidental expenses of the Trust (including legal, accounting and $ actuarial expensen) in connection with the operation of the Trust ! pursuant to this Agreement. All such administrative expenses and it;.:4 dental expenses of the Trust shall be allocated proportionately among the Funds (based on the principal balance of each Fund) unless otherwise directed by the Company. The

      - Trustee shall maintain such records as are necessary to reflect             ;

the allocation of costs and expenses in accordance with this ' Section 4.02. 4.03 fees. The 7tustee shall receive as exclusive compensation for its services pursuant to this Agreement those amounts specified in the fee schedale as may from time to time be ! agreed upon in writing by the Trustee and the Company. Any fee schedule changes shall be effective on the first day of the month l L following thrse months prior written notice of any such change by the' Trustee to the Company. 4.04 Liuud_dation of_I_nyes.tments. At the direction of the Company or any Investment Manager, the Trustee shall sell or liquidate such investments of the Funds as may be specified. The proceeds- of any such sale or liquidation shall be credited pro 30

Tata to the Yund or runds to which such Anvestments were credited prior to such sale or litruidation.

V. ;I;ERMINATION 5.01 Tortnination of_ Funds and Trust in General. Each Fund (or portion thereof) established hereunder shall terminate upon the earlier'of: (1) the date specified as the date that such Fund (or portion thereof) shall tenninate in a certificate to the Tntstee from the Company (11) substantial completion of the nuclear decommissioning of the Plant (as defined in Treasury Regulations promulgated under Section 46BA of the Code), as evidenced by delivery of a certificate of that fact to the Trustee by the Companyt or (iii) twenty-one (23) years after the death of the 1est survivor of (x) each person who was an officer of the company or of the Company's affiliated companies on January 3, 3990 and (y) each of their descendants born on or prior to January 1,1990. This Trust shall terminate upon the termination of all of the Funds. , 5.02 Tenninnti on_ofE al; Lid e d_ Fund Upon_ Di squ al i f i c a ti oD . Notwithstanding the provisions of Section 5.01 hereof, the applicable portion of the Qualified Fund shall terminate upon its di3 qualification from the application of Section 46BA of the Code, whether pursuant to an administrative action on the part of the Service or the decision of any tourt of competent 11

      .                    -             .             _  .      ..     . _ _ .      .-   - __ __ A

l 1

 -                                                                               i l

jurisdiction, but in Tao event earlier than the date on which all . available appeals have been either prosecuted or abandoned and i i the period of time for making any further appeals has elapsed, f i 5.03 Termination of Qualified Tun _d on Sale of__ Plant. l Notwithstanding the provisions of Section 5.01 hereof, and to the l extent required in Treasury Reguistiona' promulgated under Section l 468A of the code, the appideable portion of the Qualified Fund shall terminate upon the company's sale or other disposition of ; l dts ownership interest in the Plant. 9 5.04 pistributiottof_ Trust and Funds Upon Termina_tiSn. 1 Upon termination of this Trust or any Fund (s),.the Trustee shall I l

assist the Investment Manager (s) in Idquidating the assets of the l

Trust or Fund (s), and distributing the then-existing assets . l

     -  thereof (including accrued, accumulated and undistributed net income), less final Trust or Fund administration expenses 1

(including accrued taxes), to the company: proyided, however, ; 1 that no such distribution shall' be unde unless either (a) an J l Order has been issued which specifically authorizes such i I

       ' distribution or (b) the Trustee has received an opinion of legal    l l

counsel to the company to the effect that no such order is necessary to authorize such distribution. ! l VI. TRUSTEE l 6.01 Bemoval of Trustee. At any time during the term of j 1 this Trust, the Company shall have the right at any time in its

       ' sole discretion to remove the Trustee or Successor TImstee acting hereunder and appoint another qualified entity as a Successor Trustee upon thirty (30) days notice An writing to the Trustee or    .i l

22 L ,_ _ _ ._ . . _ _

t Successor Trustee, or trpon such shorter motice as say be ; i acceptable to 'the Trustee or Successor Trustee. Any successor to the Company, as provided herein, shall have the same right to ; remove and to appoint any Trnstee or Successor Trustee. ! 6.02 Resignation of Trustee. Without prior application to or approval by or order of any court of' competent jurisdiction, i the Trustee or any successor Trustee way give notice at any time, by a duly acknowledged instrument, delivered to the Company no less than ninety (90) days prior to a date designated therein as the effective date thereof, or upon such shorter notice as may be i acceptable to the Company, of its intention to resign and be , relieved as Trustee oT Successor Trustee. If for any reason the ' Company cannot or does not act to appoint a successor Trustee

   ,   within the ninety (90) day period provided in the aforesaid notice of intention to resign as Trustee, the Trustee or                 ?

Succes,sor Trustee way apply to a court of competent jurisdiction for the appointment of a Successor Trustee subject at all times to the terms and conditions of this Agreement. 6.03 _0ther A ent_s_Disgu_alifying_the Tim.stee. In the event that the Titstee or any Successor Trustee shalls (a) become insolvent or admit in writing its insolvency: (b) be unable or l admit in writing its inability to pay its debts as such debts , l mature (c) make a general assignment for the benefit of i 1 creditors; (d) have an involuntary petition in bankruptcy filed l against itt (e) institute a proceeding ' seeking its adjudication 1 as a bankrupt or for reorganization under the federal Inws of ; l bankruptcy or otherwise commence a case seeking to take advantage 33

of any law, statute or ' proceeding relf". ing to bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or

       . liquidations or (g) cease to be eligible to serve as Trustee or        ]

Successor 7tmetee, the Company aball appoint a successor Trustee ; as soon as practicable. 6.04 Desi_gnation and Dualif_1_cttien of_ Successor Trustee, f Under any of the circumstances set forth in Sections 6.DJ, 6.02 i and 6.03, the Trustee or Successor 7Yustee shall have the right to have its accounts ' settled as provided in Section 6.07 hereof. Any Successor Trustee shall qualify by a duly acknowledged j meceptance of this Trust, -delivered to the Company. Upon acceptance of such appointment by the Successor Trustee, the Trustee or prior successor Trustee shall assign, transfer and pay

    ,   over to such Successor Trustee the nonies and propelties then            i constituting the Trust. Any successor Trustee shall have all the      i rights, powers, duties and obidgations herein granted ~to the original Trustee.

Any removal under Section 6.01, any resignation under Section 6.02 or any disqualification under Section 6.03 shall not { become effective until the moneys and properties then j constituting -the Trust shall have been assigned, transferred and paid over to the Successor Trustee. 6.05 Exoneration from Bond. No bond or other security shall be exacted or required of any Trustee or Successor Trustee 2 qualified to act as such pursuant to this Agreement. l 6.06. Accounts _and_Reporfs. The Trustee and any Successor

      / Trustee shall keep accurate and detailed accounts of all l

i 14 j 1

f,, , e 7 inve.tm.nts, receipts and disbursements and other ttimwactions

                                                                                                                 }
           = hereunder in accordance with specifications of the Company, and all accounts, books and records relating thereto shall be open to inspection and audit at all reasonable times by any person                                           !
           . designated by the company.                                   Unless otherwise authorized by th'e    i Company, the Trustee shall file with the Company, within 10 days                                     j following the close of each month, a written report setting forth all investments, receipts and disbursements and other transactions effected by such Trustee or Euccessor Trustee during the month and containing an exact description of all cash and                                         l securities contributed, purchased, sold or distributed and the cost or net pr~aeds of sale, and showing all cash, and securities and other inveytments held at the end of such nonth q

and the cost and fair market value of each item thereof as ; carried on the books of the Trustee or Successor Trustee, as the case may be. , Such accounts and ret >rts shall be based on the. ! liccrual wethod of reporting income 1.nd expenses and shall'show e

            - the portion of the assets applicable to each Tund and also shall.                                  J identify all disbursements from each Fund. 'The accounts and                                           I i

reports shall include such other matters as the Company may ) reasonably requert. 6.07 Settlement _p_f Accounts. Notwithstanding the i designation and qualification of a successor Trustee and the assignment, transfer and payment over to the Successor Trustee of the noneys and properties -then nonstituting the Trust, ' the Trustee or Euccessor Trustee shall not be released and discharged

             -from Isability or accountability except (a) trpon the expiration                                         i 15

         . of a period of six years from the date of the filing of written reports with the Company as provided in Section 6.06, except with respect to such acts or . transactions as to which the Company i'

shall have taken exception by notice delivered to the Trustee or i Soccessor Trustee, as the case way be, within such six-year period;- (b)- by a settlement of accounts'in a written -instrument signed by the Company and the Trustee or Successor Trustee or (c) c by a final judgment of a court of competent jurisdiction; provided however, that nothing contained herein shall be deemed * / to relieve the Trustee or Successor Trustee of any liability which may be imposed pursuant to Section 6.09 hereof.. In the event that any exception taken by the Company cannot be amicably f adjusted, the Company may file the written report in a court of competent jurisdiction and, upon the audit thereof, any and all such exceptions which may not have been amicably settled shall be heard,and adjudicated.

                 'Upon the expiration of s'uch six-year period (except as-to such matters as are excepted therefrom), upon the execution of such settlement of accounts or upon the issuance of such final judgment, the '.frustee or Successor Trustee shall be forever released and discharged from all liability or accountability to anyone with respect to all acts and transactions shown in such             ,

written reports, such settlement of accounts or such final l s judgment, l All Tecords und accounts naintained by the Trustee or Successor Trustee wd+h respect to the Trust shall be preserved l l 'for such period as way be required under any applicable law. 1. 36 \

    ,                                                                                                                      I Upon the expiration of any such required retention period,-the Trustee shall have the right to destroy such records and accounts
             . after first notifying the Company in writing of its intention and i
            .: transferring to the company any records and accounts requested by the Company.                                                                                                 -

6.08 Tax Returne__and Other Reports. The Trustee shall t prepare and timely file all Federal, state and local income or , franchise tax returns or other reports (including estimated tax returns. and information returns) as nay be required from time' to ' > time with respect to the Funds, and the. Company agrees to provide x the Trustee in a timely manner with any information within its

            . possession. and to cause the Investment Manager (s) to provide the                                           ,

Trustee _with any information in its possession, which is 4 necessary to-such filings. The Trustee shall prepare and submit I to the Company = in a timely inanner all infor1 nation requested by the Company'regarding the Funds required to be included in the

            . Company *z Federal,-state and local' income tax returns or other                                            ,

reports (including estimated tax returns:and information

l. returns). - Subject to the limitations contained in Section B.04 hereof, the Trustee may employ independent certified pubide accenntants or other tax counsel -to prepare or review such 4

l returns and reports. The Trustee agrees to sign any tax returns L L or other reports where required by law to do so or arising out of h K the Trustee ~s responsibilities hereunder, and to remit from the

i. Trust appropriate payments or deposits of Tederal, Mate and l 0 local income or franchise taxes directly to the taxing agencies L or authorized-depositories in a timely manner. Twenty (20) 37

businesa days prior to filing any tan ret: urn on behalf of a Yund, , the Trustee shall submit the completed tax return to the Company

           . for review and shall make such changes requested by the Company         [

t t upon advice of counsel that the change constitutes a position which would not cause the imposition of a negligence penalty. Notwithstanding Section 6.09 hereof, any interest or penalty ? charges assessed against the Funds pursuant to Chapters 67 or 68 of the Code, or pursuant to any similar state or local tax i provisions, as a result of the Trustee's failure to comply with this Se'-tion 6.08 shall be borne by the Trustee and not the Funds. The Trastee agrees to notify the Company in writing within ten days of the commencement of any audit of any Fund's j Federal, state or local tax returns, and to participate with the Company on behalf of the Funds in such audits and related inquiries. The Trustee further agrees to provide the Company with any additional information in its possession regarding the 1 Funds which may be. requested ::y the Company to be furnished in an ;

            ' audit of the Company *s Federal, state or local tax returns.

l ~6.09 Li abil_i_ty. The Trustee shall Tiot.be liable for any acts, omissions or defaults of any agent (other than its officers i and employees) or depository appointed or selected with ] l reasonable care. The Trustee shall be liable only for such ! l 4 L . Trustee's own acts or omissions (and those of its officers and l L -employees) occasioned by the villfulness or negligence of such l l l l Trustee (or that of its officers and employees). l l Notwithstanding the foregoing, the Trustee (and not- the l' Trust) shall-be 1dable for any tax imposed pursuant to Section l l l L as l ______i

               - 4951 of. the code (or any upp1dcable successor provision) an= such -

section is wade applicable to the Trust, the Qualified Tund or. j

               -the Trustee.                                                                                       i i

5.10 Indemnity. Notwithstanding Section 6.09, the Trustee -5

               -hereby indemnifies and holds the Company harmless from any costs.

1 expenses, damages or liabilities which arise out of the making of any investments with . funds in a Qualified Fund which are not Permitted 2nvestments. VII. 7hvm.s_me.NTS 7.03 Appointment of Investment Manager ( s) . Unitially, the r Trustee shall have investment responsibility for this Trust. l However, the Company may appoint one or more Investment Managers to direct the investment of all or part' of the Trust. Whenever-

         .      such appointment is made, the Company shall provide written notice of such appointment to the Trustee, shall specify the portion of the Trust with respect to which an Investment Manager                                    >

has been designated, and shall instruct the Trustee to segregate

                'into an Investment Account those assets with respect to which I.

that specific Investment Manager has been designated. An

Investment Manager shall certify in vriting to the Trustee that it is qualified to act in the capacity provided under an Investment Manager Agreement, shall accept its appointment as JInvestment Manager, shall certify the identity of the person or persons authorized to give instructions or directions to the Trustee on its behalf, including specimen signatures, and shall undertake to perform the duties imposed on it under an- Inveement Manager Agreement. The Trustee may continue to rely upon all 19

j Le

/ . such certifications unless otherwise notified in writing by the l Company.or an Investment Manager, as the case may be. l Notwithstanding the appointment of an Jnvestment Manager to direct the investment of an Investment Account, the Trustee, l. through its computerized inonitoring system and otherwise, shall review all investment instructions from the-Investment Manager and shall carry out only those investment instructions which. t vould not cause a violation of Section 46BA of the Code (or any successor provision) or the regulations promulgated thereunder.

j. .

7.02 pirection by Investment Manauer(s). An Investment i Manager shall have. authority to manage and to direct the

             . acquisition and disposition of the assets of the Trust. or a
             . portion thereof, as the case may be, and the Trustee shall'                  ,
       .     -exercise the powers set forth in Article IX hereof only when, if, and . in the manner directed by the Company in writing.      An Investment Manager shall have the power and authority,'

exercisable in its sole discretion at any time, and-from time to time, to issue and place orders for the purchase. or sale of. i portfolio securities directly with qualified brokers or dealers. Except as otherwise provided in Section 7.01, the Trustee, upon , proper motifirstion from an Investment Manager (such notification 1 being agreed to by the Trustee and Investment Nanager), shall , settle the transactions in accordance with the appropriate trading authorizations. Written notification of the issuance of ; each such authorization shall be given promptly to the Trustee by an Investment Manager, and such Investment Manager.shall cause

             -the settlement of such t wasaction to be confirmed in writing to 20

1. p the Trustee, and 'to .the Company, by the broker or dealer. Except-as otherwise provided in~ Section 7.01, such notification shall be proper authority for the Trustee to pay for portfolio securities purchased against receipt thereof' and to deliver portfolio securities sold against payment therefor, as the case nay be. All directions to the Trustee by an Investment Manager shall be dn writing and shall be signed by a person who has been certified by such Investment Manager pursuant to Section 7.01 hereof as authorized to give instructions or directions to the Trustee. Should an Investment Manager at any time elect to place ! security transactions directly with a broker or dealer, the Trustee shall not recognize such transaction unless and until it

       .has received instructions or confirmation of such f act from an          j
     . Investment Manager. Should an Investment Manager direct the Trustee- to utilize the services of any person with regard to the         j-
       " assets'junder its wanagement or control, such instructions shall         !

be in writing and shall specifically set forth the actions to be ! taken by the Trustee as-to such services. -In the event that an , 1 Investment Manager places security transactions directly=or' directs the utilination of a service, such Investment Manager

        'shall be solely responsible for the acts of such persons.

The authority of an Investment Manager and the terms and cond$tions of the appointment and retention of an Investment Manager (s) shall be fully set forth in an Investment Nanagement ! Agreement. and the ' Trustee shall not be deemed to be 's party or

       ' to have any obligations under any agreement with an Investment Manager.

1 21 l

m 0 : (. 7711. ' EUSTEE

S GEtLERAL' TOWERS ,

The Trustee shall have, with respect to the Trust, the following powers, all of which powers are fiduciary powers to be exercised in a fiduciary capacity and in the best interests of , this Trust and the purposes hereof, namely: , 8.01 Extension of_ Obligations- and Negotiation of C1_ aims. To

renew or extend the time of payment of any obligation, secured or unsecured, payable to or by this Trust, for as long a period or periods of time and on such terms as the Trustee shall determine, and*to adjust. settle, compromise and arbitrate claims or demands in f avor of or against this Trust, including claims for taxes, upon such terms as the Trustee may deem advisable, i:

subject to the limitations contained in Section 9.05 (regarding

    . self-dealing).

8.02 _Re.gistration of_SecniM e_s. To hold any stocks, 1 bonde ,.; securitie s, or other prcperty in the name of a nominee, in . a street name :or by other title-holding device, without indication of trust. , Borrowing. To borrow money in such amounts and upon i 8.03 such terms as the Company may authorize in writing as necessary to carry out the purposes of this Trust, Lnd to pledge any securities or othar property for the repayment of any such loan as- the Company 1nay direct.

8.04 Retention and Removal of Professional and Empl_oye_e.

S e c ti_g_e s . Upon the Company's written approval, to employ, retain ) and remove, attorneys, accountants, custodians, engineers. I1 22 l

a.

           "  contractors, clerks and agents ms necessary and proper for the administration of this Trust.                                               y B.05- Po_ vers _of_T_rustee_to_Cquiinue Until_ Final Distribution. To exercise any of such powers after the date on              i 1

which the principal and income of the Trust shall have become : distributable and until such time as the entire principal of, and i income from, the Trust shall have been actually distributed by the Trustee. It is intended that distribution of the Trust or a 's 4 Fund will occur as soon as possible upon termination of the Trust ', or Fund, subject, however, to the limitations contained in f 1 Article V hereof. , 1

                   -B.06   Discretion in Exercise of Powers.        To do any and all'     q
                                                                                       'i other acts.which the Trustee shall deem proper-to effectuate the powers specifically conferred upon it byfthis Agreement;                     =

proyided, however, that the Trustee may not do any act or

             'partiqApate.in any transaction which would:

(1) . Disqualify any Qualified Tund from the application of i Section'46BA (or-any applicable successor provision) of the Code; (2) Contravene any provision of this' Agreement; or (3)- Violate the terms and conditions of any instructions e provided in a written statement of the Company. IX. TRUSTEE ' S_I_NyESTMENT_PO_ WERS 7 The Trustee recognizes the authority of an Investment i: ' Manager to manage, invest,- and reinvest the assets in an L

l: Investment Account pursuant to an Investment Manager Agreement and.as provided in Article VII of this Agreement, and the Trustee agrees to cooperate with any Investment Manager as deemed l-l l

23 -t 1. l

i L j

l

        ~necessary to accompidsh these tasks,                     Notwithstanding-the-          ;

foregoing, to the extent that the assets of the Trust have not t been allocated'to an Investment Account.under the investment control' of an Investment Manager, and to the extent the assets of the. Trust have been allocated to an Investment Account but have not been invested lby an Investment Manager, upon the written .

                                                                                              .t
         .dnstructions of the Company, the Trustee shall' have the following.

investment powers- all of which are fiduciary powers to be executed in a fiduciary capacity and in the best interest of this Trust and the purposes hereof, namely: L 9.01 Pr.eseryatiop_of_ Principal. To hold, manage, and invest the assets of this Trust in a manner designed.to maximize. und preserve the income anel principal of this Trust for the purposes of this Trust-including the duty to ensure that all such assets are invested at all. times, except as otherwise provided in Secti o,ns 4.04, 5.04, 9.02.and 9.03.

                 - 9.02   .i nve_stmen t _of_ Qua li fi e d _ Fur}d . To invest and reinvest' all or part of the Qualified Fund, including any undistributed income-therefrom: prov.ided, however, that no . such = investment or

[ reinvestment of the Qualified Fund may be made by the Trustee: (1)' Unlens-such investment is permitted to be made by Code L , Sections 503 (c)(21)(B)(di) and 46BA(e)(4)(C), the regulations

   ,      thereunder, and any applicable successor provisions                    or (2)   In any bank. savings and loan association, or'other u

financial institution whose deposits are not insured by the i l Federal Deposit Tnsurance Corporation, the Federal Savings & Loan ?. I Insurance Corporation, or other comparable Faderal agancy: or l' l 24 l l q

                                                                                   -       ~

x , . L. (3) 'Which would contravene any instructions issued by the Company. - In all cases, however, the total investments by the Trustee must be sufficiently liquid to enable the Trust to fulfill the , t purposes of the Trust and to satisfy obligations of the Trust as y ' such obligations become due. Nothing in this Section 9.02 shall i be construed as authorizing the Trustee to carry on any business or to divide the gains therefrom. 9.03 J nv e stment_ o f _tionqu a l_111 esilund . To invest and-a reinvest all or any part of the Nonqualified Tund, including any undistributed income therefrom, as directed by the Company.

           ,        9.04  Cash a    _Sweepj nvestment_s.       To the extent ~that the assets of the Trust have not been invested by an Investment Manager'on-
  -l                                                                                            .
             - any given day, to invest such uninvested' assets of the Trust as-                ,

the' Company may direct in writing, subject to the limitations contained in'Section 9.05 hereof (regarding self-dealing). , 9.05 Nanagement_of_ Trust. To sell, exchange, partition, or

             - otherwise dispose of all or any part of the Trust at public or
             -- private sale, without prior application to, or approval by, or order of any court, upon such terms and in such manner and at such prices as the Trustee shall determine; to modify, renew or extend bonds, notes or other obligations or any installment of t

principal thereof or any interest due thereon and to waive any i: .

             - defaults in'the performance of the terms and conditions thereof; and to execute and deliver any and all bills of sale, l

assignments, bonds or other instruments in connection with these l

l-powers, all at such times, in such manner and upon such terms and o 25 s

    ,r
     ,                                                                               .l l-         ~ conditions as the Trustee may' deem expedient to accomplish the purposes = of. this Trust as set forth in Section 2.01.

Notwithstanding anything contained in this Agreement to the contrary, the-Trustee'may not authorize or carry out any sale, exchange'or-other transaction which would constitute an act of "se]f-dealing" within the= meaning of Section 4951 of the Code, as ; such section is made applicable to the Qualified Fund by Section. 'I I i E46BA(e)(5) of.the Code, any regulations thereunder, and any

            -applicable successor provision.

X. MI_S_CELLANEOUS

                  '10.01   Readings. The section headings set forth in this
                                                                                     'i Agreement and the Table of Contents are inserted for convenience 9

of reference only and shall be disregarded in the construction or

        -   ' interpretation of any of the provisions of this Agreement,               e

t. 10.02 Particular Words. Any word contained in the text of I .

this Agreement shall be read as the singu'lar or plural and as the nasculine, feminine, or neuter as may be applicable or J l permissible in the particular context. Unless otherwise : specifically stated, the word " person" shall be taken to mean and l' h include an individual, partnership, association, trust, company. 1 or corporation. 10.03 b Severability off rov _isiops. If any provision of this

            - Agreement or its application to any person or entity or in any circumstances shall be invalid and unenforceable, the app 1dcation         i of such provision to persons and in circumstances other than               I l

those as to which it is invalid or unenforceable and the other ) 26 l l l

    .                                                                                1
   'l.                                                                             k l

provisions of this Agreement, shall not be affected by such ] invalidity or unenforceability. 10.04 Delivery of Notices Under Agreement. Any notice j required by this Agreement to be given to the. Company or the l Trustee shall be deemed to have been properly given when mailed. postage prepaid, by registered or certified mail, to the person to-be notified as set forth below: If to the Company: , Long Island Lighting Company 175 East Old Country Road Hicksville, New York 11801 AttentJon: Treasury Services t If to the Trustee: Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, Pennsylvania .15258-0001 Attention: Mr. Earl J. Kleckner

           .The Company or the Trustee may change the above addres.s by l

delivering notice thereof in writing to the other party. 10.05- Alternations. Modifications and Amendments. The Trustee and the Company . understand and agree that alternations, . modifications or amendments may be required to this Agreement

            -from time to time to effectuate the purpose of this Trust and to
           -comply with any Order, any changes in tax laws, regulations or
           . rulings (whether published or private) of the Service and any '

i

            .similar state taxing authority, and any other changes in the laws, rules and regulations (including final. regulations and published or private rulings) applicable to the Company or the Plant. This Agreement ~nny be altered, modified or emended to the extent mecessary or. advisable-to effectuate such purposes or to 27

l

 ..                                                                                                           l remply with such Order or changes.           This Agreement also may be                    j I

altered modified or amended to reflect a transfer, exchange, or I other disposition of the Plant (including, without . limitation, 'l l

              - the designation nf additional beneficiaries to this Agreement) or                         i 1

to encompass' decommissioning Contributions with respect to other . nuclear power plants owned now or in the future by the Company.

              .Any alternation, modification or amendment to this Agreement must
              'be in writing and signed by the Company and the Trustee.                     The Trustee =shall adopt such amendment, modification or alternation
              .upon the' advice of legal counsel for the Company that such i

amendment, modification or alternation is consistent with the - provisions of this Section 10.05 and shal.1 have no duty to J inquire 'or make any investigation as to whether any. proposed i

          ,     amendment, modification or alternation is cons.1 stent with this Section 30.05.

10.06 Succ_es_ sors an_d Assions. . Subject to the provisions of-l Sections 2.08 and 6.04, this Agreement shall..be binding upon and I inure to the benefit of the Company, the Trustee and their 'i respective successors, assigns, personal' representatives, executors and heirs.

10.07- Governina Law. The Trust is a New York trust, and- > l all quantions pertaining to its validity construction, and administration shall be determined in accordance with the laws of. the State of New York to the extent not preempted by Federal law. 10.08 Accountin_g Year. The Trust shall operate on an l I : accounting year which coincides with the calendar year, January 1

            . through December 31.

28 s.

e o- . r.. t L

 's.                  '
                 'l0.09. Counterparts. This Agreement may be executed:in any
           . number of counterparts, each of which shall be an original, with the same effeet as if the. signatures- thereto and hereto were upon-the same instrument.

IN WITNESS WHEREOT, the Company and the Trustee have set-their hands and seals to this Agreement'as of the day and year first above vrdtten. LONG ISLAND LIGHTING COMPANY By !/ . < VicW Phesident-An'ance u df Attest: I f ' 'd L*- Assist'nt. a Secretary - MELLON' BANK, N.A.

N *" By ' Vice President

                                                                          ,g-
                                                          . v. ,/ m.              ,

Attest: / _A - ' Tiiru) W D$kicer ( t 9

                                                                                        .                            I
                                                                                       '@ ', ..bN N,~-

q. s, !

ad 29 . E .n .; . ,:. - /

                                                                                      %                      <        1
                                                                                        %.e..,_,,   ,

e*/

k l 1 1 oa ] Exhibit A l CERTIFICATE NO. The underaigned Authorized Representative of Long Island [ Lighting Company (Company), a New York corporation being duly J authorized and empowered to execute and deliver this Certificate, nhereby certifies to the Trustee of the Long Island Lighting Company Decommissioning Trust (Trust),. pursuant to Article IV of. that certain Decommissioning Trust Agreement, dated May. , 1990 (Agreement), between the Trustee and the Company as follows: (1) Attachment I hereto sets forth the amounts either , invoiced to, or incurred by, or to be incurred by the t L Company'or the Funds that are/will be due and owing to l- each payee listed (Payees) for: (a) goods or services provided in connection with-decommissioning the Plant; or (b) administrative costs of the Trust (excluding costs

                  -         arising from the Company's furnishing of goods,         r services,'or facilities.to the Trust and excluding.

compensation which is' excessive or unnecessary to l carry out the purposes-of-the Trust) as evidenced by the invoice,-contracts or-agreements-attached hereto; (2) all such amounts due and owing to the Payees constitute l- Decommissioning Costs or Administrative Expenses as V described in Article 1V- of the Agreement; (3) all such amounts may be paid from the Trust without causing the Qualified Fund to become disqualified from the application of Code Section 46BA or any applicable successor provision; and (4) all conditions precedent to the making of this withdrawal and disbursement set forth in any agreement between such Payees and the Company, if applicable,

                      .have been fulfilled.

,r. !

   .-                                                                                       1 i

o; Accordingly, request is hereby nade that the Trustee provide )

              . for the withdrawal'of $          from the Long Island Lighting Company      l

[ Qualified Fund /Nonqualified Fund] [ Funds specified in the attached schedule) in order to permit payment of such zum to be made to the Payees. You are further requested to disburse. such sum, once withdrawn, directly to such Payeen An the following manner: ICHECK/ WIRE TRANSFER / 1 on or before ,

               .1990.

WITNESS wy hand this day of , 1990. LONG. ISLAND LIGHTING COMPAM' l By Authorized Representative 9 4 si D

      'l' I

l l l. l 1' 1 1; 1: .

                                                                                                                                                                                                                                      ~          !
                                                                                                                                              ,                                                                              Exhibit C-LONG ISLAND LIGNTING COMPANY-                                                                                                                                 , . .

17-593-NMP2DCOM --------------------------

    -6/20/90                                                         Nine Mile Unit 2 Externet' Sir *ing Famd
                                                                 - for the Contaminated Decomunissioning Costs (000's)

QUALIFIED NUCLEAR DECOMMISSIONING FUND (ONDF) (PREV. 8) (IRS-RULE) (2)+(3) (5)*t(.5 0F - (.0035*(.5 OF ((6-7) * (1+4+6-7 7a) FUND INTERNAL REY. REQ. TOTAL G.O. ' AAA ' (4)) +(1)] (4+6))+(1)] .1034% FUW BALANCE a FUND FOR FUND FUND' MUNICIPAL FUW ' IN4GT FEES a STATE TAXES . BALANCE a BEG. OF YEAR TRANSFER DEPOSIT DEPOSlf (TAX EX.) EARWINGS 35 SASIS PTS a 10.34% YEAR Em PERIOD (1) (2) (3) (4) (5) (6) (7) (7a) (8) 7/1/88--6/30/89 0 0 0 0 6.66% 0 0 0 0 7/1/89--6/30/90 0 25 0 25 6.66%- 1 0 0 26 7/1/90--6/30/91 26 1791 796 ~ 2586 6.66% 88 5 9 2687 7/1/91--6/30/92 .2687 1591 1591 6.66% 232 13 23 4475 7/1/92--6/30/93 4475 1591 1591 6.66% 351 19 34 6364-7/1/93--6/30/94 6364 1591 1591 6.66% 477 26 47 .. 8359' 7/1/94--6/30/95 8359 1591 1591 6.66%- 610 33 60 10468 7/1/95--6/30/96 10468 1591 1591 6.66% 750 41 73 12695 7/1/ %--6/30/97' 12695 1591 1591 6.66% - 896 49 88 15048~ 7/1/97--6/30/98 15048 1591 1591 6.66% 1055 57 103 17535 7/1/98--6/30/99 17535 1591 1591 6.66% 1221 66 119 20161-7/1/99- 6/30/00 20161 1591 1591 6.66% 13 % 76 136 22936 7/1/00--6/30/01 22936 1591 1591 6.66% 1581 86 155 25867 7/1/01--6/30/02 25867 1591 1591 5.66% 1776 % 174 28965 7/1/02--6/30/03 28965 1591 1591 6.66% 1982 108 194 32237-7/1/03--6/30/04 32237 1591 1591 6.66% 2200 119 215 35693 7/1/04--6/30/05 35693 1591 1591 6.66% 2430 132 238 39343 7/1/05--6/30/06 39345 1591 : 1591 6.66% 2673 145 261 43203' 7/1/06-6/30/07 43203 1591 1591 6.66% 2930 159 287- 47219 7/1/07--6/30/08 47279 1591 1591 6.66% 3202 174 313 51586 7/1/08--6/30/09 51586 1591- 1591- 6.66% 3489 189 341 56135 7/1/09--6/30/10 56135 1591 1591- 6.66% 3792 206 371 60941 7/1/10--6/30/11 60941 1591 -1591 6.66% 4112 223 402 66019 - 7/1/11--6/30/12 66019 1591- 1591 6.66% 4450 242 435 71384 7/1/12--6/30/13 71384 1591 1591 6.66% 4807 261 470. 77051 7/1/13--6/30/14 77051 1591 1591 6.66% 5185 282 507 83039 7/1/14--6/30/15 83039 1591 1591 6.66% 5583 303 546 89364 7/1/15--6/30/16 89364 1591 1591 6.66% 6005 326 587 96047 7/1/16--6/30/17 96047 1591 1591 6.66% 6450 350 631 103107 7/1/17--6/30/18 103107 1591 1591 6.66% 6920 376 677 110566 7/1/18--6/30/19 110566 1591 .1591 6.66% 7417 403 725 118446 7/1/19~ 6/30/20 118446 1591 1591 6.66% . 7941 431 777 126771 7/1/20--6/30/21 126771 '1591 1591 /.66% 84 % 461 831 135566 7/1/21--6/30/22 135566 1591 1591 6.66% 9082 493 888 144858 7/1/22-6/30/23 144858 1591 1591 6.66% 9701 527 949 154675 7/1/23--6/30/24 154675 1591 1591 6.66% 10354 562 1012 165046 7/1/24--6/30/25 165046 1591 1591 6.66% 11045 600 1080 176002 7/1/25--6/30/26 176002 1591 1591 6.66% 11775 639 1151 187578 7/1/26-10/31/26 187578 398 398 6.66% M506 679 1223 198579 i 1816 56892 58708- 164960 8958 '16131~ l

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A

r -y e i Exhibit C (Cont'd.) . NOTES: ,

1. Based on Tenera's decommissioning cost estimate

2. Total minimum decommissioning cost = $1,103,221,000 -

3. NRC minimum decommissioning cost = $1,087,842,000 t

4. ULCO's share (18%) = $198,579,780 -

5. ULCO's decommissioning cost accrued

a. Total = $2,011,666.93

b. External (84%) = $1,689,800.23

c. Internal (16%) = $321,886.70

6. Transfer of $1,791,000 is accrued to December 31,1990 ($1,689,800.23 + 126,000

                   - $25,000) = $1,790,800.23

7. - Municipal bond rate of 6.66 percent is effective annual yield of nominal rate of 6.5 s '

   'e
   .               percent compounded ' quarterly.

a:exbtc I

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ML20055G526

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