ML20066E225

Suppl 1 to Application for Amend to License NPF-86, Authorizing North Atlantic Energy Svc Co to Act as Managing Agent for Facility.Record of Reorganization Proceedings Before State of Nh Puc & Draft Agreement Encl

ML20066E225
Person / Time
Site:	Seabrook
Issue date:	01/15/1991
From:	Feigenbaum T PUBLIC SERVICE CO. OF NEW HAMPSHIRE
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
NYN-91005, NUDOCS 9101180167
Download: ML20066E225 (66)

Text

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New Hampshire Yankee  :::' e"' ""'

Chief Executive Officer i NYN 91005 I january 15, 1991:

- United States Nucle.tr Regulatory Commission ,

Washington, D.C. 20555 Attention: Document Control Desk

References:

=(a) Facility Operating License No. NPF 86, Docket No. 50 443

-(b) _ Application . t0: Amend Facility Operating License No. NPF 86 _.to Authorize North Atlantic Energy Service Company to Act as Managing Agent for Seabrook Station, Unit No,'1 dated November 13, 1990

-(c)' Letter -dated December 26, 1990 from B, J. Leeds- (NRC) to T. C; Felgenbaum- 1

Subject:

Supplement 1' to Application to- Amend Facility-Operating License No. NPF-86-to Authorize North Atlantic Energy Service Company to Act an Managing

- Agent for Seabrook Station, Unit No.1

- G,entlemen:

New-Hampshire Yankee (NHY) hereby supplements the Application filed on November

- 13,- 1990 'in the. above Docket .[ Reference (a)). Certain terms defined 'in the Application j

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Reference:

(b)) are ubed herein 'with the meanings there provided, ThisSSupplement responds to your letter of; December 26,- 1990 [ Reference . (c)) in  ;

4 lwhich?you requested amplification. of the - Application "to clarify NAESCO's yrole in the I marketing of.cnergy produced by Seabrook.' The original Application, under the heading q of ' Antitrust Considerations",:made only the factual = statement about marketing because to

" _the licensees / applicants it was clear that NAESCO could never venture into energy marketin'g.- q

'Therefore, it did- not. seem necessary to- underscore -this point, This oversight is hereby, a remedied.

lAs explained in the Application, the transfer of Managing Agent responsibilities to NAESCO is an integral part of the reorganization plan, Le the Joint Plun, confirmed by the- d Bankruptcy Court in the proceeding relating to PSNH, NAESCO's sole. purpose under the Joint Plan is to function as the' entity licensed by the Commission to ' manage, operate _ and -

1 maintain' Seabrook Unit = 1- on behalf of its owners, the other licensecs, As - such the-organization of NAESCO. as a New Hampshire corporation and -public utility _ under New Ilampshire law Lhns- been approved by the New flampshire Public Utilities Commission

-(NIIPUC), That.NHPUC authorization of NAESCO is explicitly limited "to the managerr, cot, 9101100167 910115 h

- PDR, ADOCK 05000443 JU

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180063-

New Hampshire Yankee Division of Public service Company of New Hampshire Q P.O. Box 300

• Seabrook, NH 03874

• Telephone (603) 474 9521 1

United States Nuclear Regulatory Commission January 15, 1991 Attention: Document Contro! Desk Page two operation and maintenance of the Seabrook project, and [does] not extend to its functioning as a franchised electric utility for the sale or distribution of electricity." (emphasis added, a provision omitted from the discussion in the original Application on page 4 and in footnote 2.) See pages 171 and 172 of the Report and Order, dated July 20, 1990 of the NHPUC in Docket #89 244, attached as Exhibit A hereto. Thus, NAESCO lacks the legal power and authority to sell energy.

Furthermore, Paragraph 15 of the Joint Ownership Agreement explicitly provides that each Participant (i.e., each of the twelve existing licensecs) shall be entitled to its Ownership Share of the " capacity and hourly generation" of Seabrook Unit 1. Therefore,100% of the Seabrook energy will continue to be owned by the present licensees and NAESCO will acqui.e no interest therein. Consistent with that fact, the scope of NAESCO's authority as out!!ned in the Application did not include any reference to energy marketing (See Section 11 of Application) and- the Managing Agent Operating Agreement being prepared to implement the July 19,1990 Agreement will explicitly withhold any authority with respect to energy marketing. (See draft form of Managing Agent Operating Agreement, attached as Exhibit B hereto, at Section 11 (f), page 11).

Given the foregoing explicit restraints upon NAESCO imposed by the NHPUC or by contract, NHY proposes that the form of license amendment filed with the Application (see

- Exh. 2 to Application) be modified in two respects: first, to change paragraph 2. b) to read as follows:

'b). The footnote on page 1 of the license shall read:

North Atlantic Energy Service Company (NAESCO) is authorized to act as agent for the: Public Service Company of New Hampshire [ North Atlantic Energy Corporation], Canal Electric Company, The Connecticut Light and Power Company, EUA Power Corporation, Hudson Light & Power Company, Massachusetts Municipal Wholesale Electric Company, Montaup Electric Company, New England Power Company, New Hampshire Cooperative, Inc., Taunton Municipal Light Plant, The United Illuminating Company, and Vermont Electric Generation and Transmission Cooperative, Inc., solely with respect to, and with exclusive responsibility for and control over, the physical construction, operation and maintenance of the facility "

Second, to add an additional condition as follows:

'2. H. Marketinn of Enerny NAESCO shall not participate in any way in the marketing or brokering of the capacity of, or electrical energy produced by, the facility. The licensees other than NAESCO, as the owners collectively of 100% of such capacity and energy, shall not delegate to their agent, NAESCO, any authority with respect to such marketing or brokering of capacity or electrical energy.

W"--

United States Nuclear Regulatory Commission January 15, 1991 Attention: Document Control Desk Page three NHY submits that (bis proposed condition 2.H. will assure the Commission of direct control over NAESCO and the licensees with respect to the energy marketing issue.

NHY has performed a safety evaluation on the proposed Supplement 1 to the operating license amendment provided herein and has determined that it does not involve an Unreviewed Safety Question pursuant to 10CFR50.59. NHY has also determined that the conclusions reached in the analysis of the Application against the criteria of 10CFR50.92 remain valid and that the proposed supplement does not involve a Significant Hazards Consideration.

Supplement 1 to the Application has been reviewed and approved by the Station Operating Review Committee and the Nuclear Safety Audit and Review Committee.

If you have any questions, please contact Mr. Terry L. Harpster, Director of Licensing Services, at (603) 474 9521, extension 2765.

Very truly yours, (g 94chC" Ted C. Feigenbaum Enclosure (s)  ;

TCF:AMC/act/sst ,

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United _ States Nuclear Regulatory Commission January 15, 1991 Attention: Document Control Desk Page four cc: Mr. Thomas T. Martin Regional Administrator United States Nuclear Regulatory Commission Region 1 475 Allendale Road King of Prussia, PA 19406 Mr. George L. lverson, Director Office of Emergency Management State Office Park South 107 Pleasant Street Concord, NH 03301 Mr. Gordon Edison, Project Manager Project Directorate I.3 Division of Reactor Projects U. S. Nuclear Regulatory Commission Washington, DC 20555 Mr. Noel Dudley NRC Senior Resident inspector P. O. Box 1149 Seabrook,- NH 03874 I

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, New llampshire Yankee January 15, 1991 1

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EXHIBIT A TO NYN 91005.

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l DR 49-244 IN THE MATTER OF e

! NORTHEAST UTILITIES /PUBLIC 8ERVICE COMPANY OF NIW EAMPSEIRE j

Reorganisation Proceedings i

I I NEW MAMPSRIRE PURLIC UTILITIES ColOC55 ION i

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f I. REQUESTED STRUCTURAL CHANGES NU requests the following ' structural approvals' l

under the Rate Agreement and the Joint Plant-

2. approval of the commencement of business by NAEC and the new NU subsidiary which will operate Seabrook referred to as "NUCP' or

'NAESC," as public utilities in New Hampshire i 2. approval of the transfer of PSNH's Seabrook interests (including land and fuel) to NAEC

3. approval of the merger of Northeast Utilities Acquisition Corporation

("NUAC") with and into PSNH.

NUAC will not engage in any public utility business and NU does not seek this commission's approval for its l commencement of business pursuant to 374 22. NUAC will cease to exist when the merger between NU and PSNH takes effect.

4. approval of certain mortgages.over present and future property of PSNH and NAEC.

NAEC and NAESC are essential parties to successful implementation of the Joint Plan. Ex. NU 5, Busch Profiled Direct Testimony at 95. NAEC has the sole purpose of replacing PSNH in its ownership share of Seabrook over rights and obligations defined under the Seabrook Power Contract discussed above and found to be in the public good. NAESC or NUOP will have the sole purpose of replacing New Hampshire Yankee in the management, operation and maintenance of Seabrook. NU management of Seabrook discussed above was of paramount importance in achieving the projected rate levels. NU management of Seabrook will be conducted via NAISC and, accordingly, it will be in the public good to authorize NAESC q,  !

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1 to operate as a public utility. This authorization would be {

limited, as is currently NNY's authorization to operate as a public utility, to the managemant, operation and maintenance of the seabrook project, and will not. extend to its functioning as a franchised electric utility for the sale or distribution of electricity. I, For similar rocsons we cpprove the transfer of PSNH's Seabrook interest, including land and fuel, to NAEC, pursuant d to RSA 374 30. The Joint Plan and the Rate Agreement cannot g function without this transfer taking effect, thereby

• facilitating the financing of the reorganization, minimizing  ?

L PSNH's capital costs and maximizing tax benefits. Tr. Apr. 11 at 62-63 Tr. Apr. 30 at 23-28. 4 The rights and obligations of Q PSNH and NAEC will be defined primarily under the terms of the Seabrook Power Contract which we have found to be in the public good.

7 NU has also asked for approval of the merger of WAC with and into PSNH. WAC is the vehicle for effecting the

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merger between.PSNH and NU and is therefore a vital part of the reorganization process. As we have discussed above, the merger 2 between NU and PSNE is of paramount importance to attainment of j

the projected synergies and, ultimately, to containment of the *

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rate increases to the 5.5% projection and important to assure L

that the public good will be served. For these reasons we find

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that the merger of NUAC with and into PSNH is in the public d f!

good and is hereby approved.

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New Hampshire Yankee January 15, 1991 i

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EXHIBIT B TO NYN 91005 i

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FEAB_ ROOK PROJECT MANAGING AGENT OPh'RA'I'ING AGREEMENT Effoctive as of _, 1991 na- . , s , c ,, n e,,, , uy,, . , v ,, n.,n n,. e n. n g,,.,, ,, r ,, ,n

t SEABROOK PROJECT ,

i MANACINO'ACENT OPERATING JCRFFMENT i

TABLE OF CONTENTS' PA9_t 5

11. Definitions Basic-Understandings 6 2.-

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3. Managing Agent -;

4. Services 12 15

5. Contracting Authority

6. Periodic Reporting 16

7. Access to--Information 26~

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-8. Payments; Budgets- ]

40 Ba.L .Certain Transitional Rules 41-

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Insurance-1

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-10. .Docommissioning  :

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ill .- . Limitation of Liability 42 x

44 12..: Term'and Effectiveness 46

13. No Setoff' 14 . : Assignment ,

47-No Third-Party:Boneficiaries 47 <

115.

LSeveral10bligations of Participants 47 L16'.--

L48' L 17.. . Applicable Law and Enforceability

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"-18 7 -Arbitration

'19.,' Notices 50-l 50-L

2 0 ;. JCounterparts 51 b . 21. Amendment 52-Signatures g g

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l EPAEROOK PROJECT MANAGING ACENT OPERATING AGREEMENT Thie-Managing Agent Operating Agreement ("Agrooment") is mado as of _. , 1991, between North Atlantic Energy-

-Service Company, a corporation organized as a wholly-owned subsidiary of Northoast Utilities ("NU") and a public utility organizod under the laws of the State of New Hampshire (the

" Operator"), and'those signatories to the Joint Ownership Agroomont (as defined in the next paragraph. hereof) which have executod and deliverod or which hereafter execute and deliver thieLAgreement (the "Signatorian"). The-signatories which-are signatories of the Joint Ownership Agreement collectively with

-tho other parties.which are now or from time to time hornafter become-signatories of the Joint Ownership Agreement aro hereinafter-roferred to as the " Participants",

~WHEREAS, the Participants are the partico to the Agreement.

' for-Joint Ownership, Construction and Operation of New Hampshire

. Nuclear Units, dated May 1, 1973, as heretofore amended through the: Twenty-Third Amendment (which agreement as from time to time amended is hereafter referrod to as the " Joint Ownership.

Agreement"), which sets forth their respective rights and obligations with respect to the nuclear electric generating.

b  : plant.("Seabrook Station" or the " Unit"-or the " Plant" or the

" project *) which the Participants have constructed in Seabrook, l

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2 New 11ampchiro, consisting of unit ono and all common facilities

("Seabrook 1") which is completod and unit two ("Seabrook 2")

which has boon cancolled; and WlIEREAS, pursuant to the Joint Ownership Agreement and actions taken by the Participants, management responsibility for Seabrook_ Station, subject to the limitad oversight and direction functions of the Exocutive Committee described in Paragraph 37 of

.the Joint Ownership Agreement (the " Executive Committee"),

currently resides in Public Service Company of New Hampshire

("PSNH"), acting through its Now Hampshire Yankee Diviticn (tho

" Division"); and WHEREAS, pursuant to a plan of reorganization for PSNH filod by. Northeast Utilities Service Company in bankruptcy case No. 88-0043 pending in the United States Bankruptcy Court for the District of New Hampshire with respect to PSNH, it is contemplated that PSNH will become a wholly-owned subsidiary of NU, and that PSNH's Ownership Share of Seabrook Station (the "Seabrook Interent") will be transferred to a subsidiary of NU to

-be known-as N'+th Atlantic Energy Corporation ("NAEC"); and l

WREREAS, Paragraph 36.2 of the Joint Ownership Agreement I a the appointment by Participants owning 51% or more of s Ownership Shares of Seabrook Station of a managing agent to l

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act-on behalf of all-the Participants in the management of the-operations of the Seabrook Station, and it la intended that this.

Agreement implement-Paragraph 36.2 of the Joint Ownerehlp Agreement; and

-WHEREAS,~it is-recognized that under the Joint Ownership j . Agreement'the Participants are each severally responsible for their respective Ownership Shares of the costs of operating and maintaining-Seabrook 1 and of the ultimate disposition of.

-Seabrook~2-and~are entitled to-their ownership Shares of the

capacity and electric energy produced by Seabrook 1; and-WHEREAS, :by . order in~ File No. , the-Securities and Exchange-Commission'("SEC") has approved and authorized, under

.the; Public ! Utilities Holding- Company '.*.:t of 1935 (the " Act"), the organization and- conduct of business of Operator as a wholly owned--subsidiary of NV,Ja public utility-holding company l_ registerod under the Act; and WHEREAS,-Operator desires to assume the responsibilities of

~ Managing Agent for' Seabrook-Station on behalf of tTe Participants !and to perform such responsibilities and duties -all o

in accordance with Prudent Utiltty Practice (as-defined in Paragraph 8.1 of _ the Joint Ownorsh;p A%reement); and enn rh avvun ntvv w evo cren eg enen tetet in no in

WHEREAS, economies, increased efficiencies and other benefits will accruo to the participants as a result of Operator's assumption of those responsibilities; and WHEREAS, it is tho intent of the Operator and the Signatorjos to promoto the safo, efficient and reliable operation of Seabrook Station and the Signatories desire that the Operator shall have responsibility for tho day-to-day operation and maintenanco of Seabrook Station consistont with this goal; and WHEREAS, the Operator and the Signatories, which hold in the aggregate Ownernhlp Shares totail.ing 70.60921% of all Ownership Shares, wish to implement, as of the Time of Effectiveness (as hereinafter definod) the provisions of their Agreement made as of July 19, 1990 which can be implemented under the Joint Ownership Agrooment with tho approval of less than 80% of the Ownership Shares, and this Agreemont is intended to accomplish that result; and 4

WHEREAS, the signatories and the Operator desire that all Participants shall have tnu

• arestricted access to project information, with the limited restrictions set forth herein, and the Operator closires to keep the Participants regularly and fully advised of significant activitios and developments.

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I NOW, T!!EREFORE, in consideration of the premises and the i mutual covenanto contained herein, the parties herusy agrec as follows:

1. Definitiong (a) Terms defined in the Joint Owncrohip Agreement are g

used in this Agreement with the same meanings as 4

-therein provided.

(b) The term "NRC" shall mean the United States Nucleur Regulatory Commission or any governmental agency or 1 l

agencies which. succeed to the powers thereof.

(c) The term "NRC License" shall mean the full-power operating license, No. NPF-86, and all other licenses relating to Seabrook Station issued by the NRC.

j (d) The term "NRC' Amendment" shall mean the amendment to

.NRC License, which, inter alta, designate Operator as

• the entity _ technically qualifiwa to operate seabrook 1.

(e)' The term " Time of Effectiveness

• shall mean 11:59 p.m.

on the last day of-the calendar month in which the NRC Amendment, and any other federal, state or local

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6-regulatory, judicial or other approvals necessary for the performance of this Agreement (collectively

• Rogulatory Approvalu"), shall all have becomo (

offective.

(f) The term "Unuffiliated Participants" shall mean those Participants which are not under common control.

2. Basie-Understandinog (a) (i) This Agreement relates to the transfer and

-delogation to Operator by the Participants of authority with respect to the operation of 1

Seabrook 1 under the NRC License and the a

supervision of the disposition of Seabrook 2, which han been cancelled and abandoned by the Participanto, by appointing the Operator as-Managing Agent pursuant to Paragraph 36.2 of the Joint Ownership Agreement.

(ii) The parties hereto recognize that such transfor and delegation can only be accomplished after the NRC-Amendment is issued and becomes effective.

The parties agree to cooperate in good faith and use all reasonable vIiorts to obtain, and not e

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oppose directly or indirectly, the issv.ance of the NRC Amendmont and other Regulatory Approvals on an appropriate schedule recognising the overriding intorest of the Participante in maintaining the safe,.officient and reliable operation of tho ,

Plant and-in-assuring a smooth transition to a new  !

operator. The provisions of this Agreemont relating to the transfer and delegation of such L

operating authority and the exercise thereof shall-becemo operative at the Time of Ef f.ectiveness.

(iii)

Tho Operator shall use all-reasonable efforts to operate the Unit in a scio, officient and reliablo mannor in compliance with all applicablo safety requirements, including but not limited to the technical specifications and the other terms and conditions of the NRC Licenses, the rules and regulations of the NRC, and any applicable orders issued by it.

l (iv) The operator shall une all reasonable efforts to operato and maintain the Unit in a manner that will (a) promote the safety of workero at the Unit and-the safety of the general public; (b) promote cursolm yyss na eten g;g cogg og,73 ;g,g7,to 3"8 D

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reliable Unit performance, high Unit availability, a low forced outage rate and short outage durations; (c) conform to all regulatory requirements and binding industry standards: and (d) consistent with the goals described in the foregoing clauses ta), (b) and (c), produce busbar costs as low as reasonably possible, through 1

control of operating and maintenance expenses and restraint in the commitment of capital funds.

(b) On or as soon as practicable after the Time of Effectiveness the Signatories Will take the following

-actions in order to implement the transfer of authority contemplated hereins (1) PSNU shall'effect the assignment to the Operator of the responsibilities of the Division (as agent for Participants) under all outstanding contracts and agreements relating to Seabrook Station which have heretofore been entered into by PSNH or the

. Division either expressly or implicitly on behnif of all Participants and will cooperate with the operator in negotiating appropriate modifications reflecting the shift of authority being L implemented hereby to any contracts relating to l

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9 Seabrook Station (nuch as the NEIL insurance policy) which are subject to requirements which precludo execution by, or assignment to, the Operator as Managing Agent; and (ii) Subject to the reasonable direction of the Executivo co:.tmittee, the Operator shall assumo responsibility on behalf of the Participants for all property tax negotiations with local communities relating to Seabrook Station facilities as to matters arising after the Timo of Effoetiveness.

3. linnagina Acent (a) comtnencing at the Time of Effectiveness and until the oxpiration or termination of this Agraoment, (1) tho Signatories, owning collectively 51% or more of the ownership Shares av required by Paragrap,h 36.2 of the Joint Ownership Agreement, hereby designate the i

Operator as Managing Agent of Seabrook Station under L the Joint Ownership Agreement on behalf of-the Participants, and (11)-the Partleipants hereby employ ,

the Operator, and tho operator hereby agrees, to perform the engineering, oporational and other 1

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professional servicuu and responsibilitios of such Managing Agent on behalf of the Participants, in accordance with this Agroement and the Joint ownership Agreement. Subject to the previolons of this Agrnement l which accign cortain authority to the Pa.'icipanto and/or the Executivo Committee, the parties hornto agreo that, as Managing Agent, Operator shall have completo and ultimate responsibility for day-to-day management of the oporation of Seabrook 1, including those duties, functions, responsibilities, prorogatives, discretionary right1 and nuthorizations to act on behalf of the Participants which are described in the Joint ownership Agreement. Such responsibilities, in1RI Alia, include authority on all oporational issues rocpoeting Seabrook 1 to the oxtent nocessary to comply with tho NRC Licenso, responsibility for all licensing actions with respoet to Saabrook 1, and ultimate responsibility for the ef fectivo implementation of the quality ausurance program at Soabrook 1.

(b) The Operator shall promptly advise the Participants of its significant actions in discharging its responsibilitios, consistent with Section 6 of this Agreomont.

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(c) The Participants chall approve or disapprove in

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advance, by a vote of 51% or more of the Ownership  !

Shares, the Operator's selection of the senior on-sito manager for the Plant.

l (d) The Participante chall approvo or disapprove in I advance, by a vote of 51% or more of tho ownership Shares, significant government affairo and public relations policies pertaining to thn Plant.

(e) Tho Participants shall approve or disapprove in advance, by a vote of 51% or more of the Ownership Shares, the incontivo compensation programe and aggregato payments associated therewith for Operator personnel assigned to the Plant.

(f) The participants expressly withhold from the operator anyauthoritytomarketorbrokerthecapacitpor energy produced by the plant on their behalf, and nothing heroin shall be interpreted as dalegating to the operator any such authority.

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4. Eerviens Tho operator agrees to perform or cause to be performed all

.the servicos and responsibilitiet assigned to it hereunder 1

in conformance with professional standards of care and practice appropriate to the nature of the technical and ,

professional services involved and in uccordance with Prudent Utility Practice (as defined in Paragraph 8.1 of the ,

Joint Ownership Agreement), including, but not limited to (a) selecting, employing, training and maintaining sufficient-personnel to staff seabrook station-in accordance with licence and regulatory. requirements applicable to the operation of Seabrook Station and to provido or cause to be provided any support service $

for auch activities; (b) planning for nuclear fuel utilitation at Seabrook 1 and procuring on behalf of.the Participants the requisite nuclear fuel therefor, including arranging for all stages of uranium processing, fuel-design and fabrication and eventual storage, transportation, disposition and/or reprocessing of irradiated nuclear fuel and the disposition of or use of reprocessed material; h \

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, j (c) purchasing and maintaining on behalf of the i Participants, at appropriate levels, inventories of 3 materiale, supplies and spare parts required for operation and maintenance of Seabrook Station; i

(d)- after consultation with the Executive Committee to the j extent reasonably required by that committee, eclecting i and-retaining consultants and contractors to assist in i the performance of the Operator's' responsibilities with respect to Seabrook Station;

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(e) subject to paragraphs 24.2.and 37.4(d) of the Joint Ownership Agreement and the resolution regarding the j s

disposition of-$sabrook 2 adopted >by the Participants  ;

on November 6, 1906, recommending to the Participants specific actions concerning the disposal'of seabrook

2) i (f) reporting to the Executive Committee and Participants '

on the. operations and finances of, and the insurance -

for, Seabrook Station'in accordance with-Section 6 of this Agreement; and

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(g) taking all other actionn necessary in order to keep the Opsrating Licensoc and other nocessary recJulatory permits in full force and effect.

Other than its responsibilities with respect to the operation of seabrook station, in carrying out its obligations as Managing Agent horeunder and under the Joint ownership Agreement, the Operator may retain or appoint a service company or agent (which cervice company or agent shall be affiliated with Operator) to act on behalf of and perform the responsibilities of the Operator horeunder and under the Joint ownership Agrooment, so long no such appointment in consistent with the terms of the Operating Licenso and the rules and regulations of the NRC. No much retention or appointmont shall becomo effectivo unless the agreement (s) betwoon che operator and any such service company or agent has been approved by at least throo or more Unaffiliated Participants, owning collectively 60% or more of tho ownership Shares. The Participanto chAll not withhold thoir approval of any such agroenent if it is fair and equitablo to all affected parties, avv..n m vv w evn ma*" WA " "I '"'"""

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5. Centractino Author,ity In conformity with the paragraphs 9 and 10 of the Joint ownership Agreement and subject to Section 3 of this Agreement and this Section 5, the Participants hereby 1

authorize ti.o operator, as Managing Agent for the  !

Participants, to entar into, and to execute and deliver, such contracts with third partion for design, engineering, construction and technical support services or for insurance for Seabrook Station or for the purchase of materials, equipment, and nuclear fuel for Seabrook Station and for the acquisition oi interests (other than title) in real estate essential to Seabrook 1, as the Operator deems nocessary and prudent, provided that such contracts shall expressly provide.that the Participants are severally liable in proportion to their roepective Ownership Shares, and neither  ;

jointly nor jointly and. severally liable thereon; and provided, further, that such contracts shall provide for title to any such property which becomes a fixture or integral part of Seabrook Station to pass to the respective Participants in proportion to'their respective ownernhip.

Shares. Without limiting the generality of the foregoing, the Participants intend that this authorization includes authority to enter into operating leases for automobiles, equipment and other facilities necessary,.in the Operator's

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1 opinion, to the operation of Seabrook Station or to the proper performance of the operator's responsibilities horounder. The operator will use its best efforte to nogotiate contracts that do not includo provisions for indemnification and/or payment of specini and consequential damages to third parties. In the ovent that the Operator finde it necessary to include one or more such provisions, it chail, to the extent practicable, adviso tho Participanto of ouch condition in advance of the execution of such agrooment. In any event the Operator chall promptly adviso the Participants of the inclusion of such provision (s) after the oxecution of such agrooment(s).

The Operator, without the prior approval of the Executive Committee, shall not enter into an agreement related to Sonbrook Station with a vendor, corstractor or consultant that would require the operator to refuso to furnish any Seabrook-relatoo information that could be requested by a Participant on the basis that such vendor, contractor or consultant claims such information to be proprietary, provided that such agreoment may provide that any Participant which wishoo to obtain any information treated as confidential or proprietary by a vendor, contractor or consultant shall sign an appropriate nondisclosuro agreement requested by such vendor, contractor or consultant.

l i

onn nuv unnvi vvw i vo eten w m n n?tti in en in

. . _ ._ _ _ . _ _ _ _ = _ _ _ _ _ . _ _ _ _ . . _ _ _ . _ _ _ . _ _ _ _ _ - . .

l l

Major contracts and material modifications to such contracts for a) nuclear fuel and.fuci services (oxeluding short-term spot market purchases); b) employment contracts with scabrook Station personnel (exclud!.ng union labor contracts); c) contracts having a dollar value exceeding $10 million and either procenting significant liability issuec or presenting long-term (at loast two years) political, regulatory.or public relations policy issues; and d) the acquisition of interests (other than title) in real estate essential to Seabrook-1 shall not be executed unless approved in advance by Participante owning collectively Sit or more of the ownership Shares. The criteria governing the types of major contracts requiring prior approval by the-Participants, in addition-to those specifically identiflod herein, may be reasonably expanded from time to time-by the Executive Committee. Such additional major contracts shall be offthe same magnitude and importance to Seabrook Station as those described above.

Tha Participants and Operator agree that, whether or not the Operator fulfills its obligation to provide that the several liability of-the Participants is referred to therein,_the. Participants shall be severally liable, and neither' jointly nor jointly and severally liable, for their s FTYM to $

~

_ . . . _ . . _L________..___----__---------

respectivo Ownership Shares of all obligations performable, and all paymento due, under or with respect to any contracts antered into concerning Seabrook Station executed on their behnli-as contemplated by Paragraphs 9 er 10.1 of the Joint Ownership Agreemont or this Section 5. >

6. Periodie 9,eportino (a) The Operator shall meet with the Participants no less f requently than quarterly to report on the status of Seabrook Station and discuss other matters regarding Seabrook station. Each Participant shall endeavor, in advance of the meeting, to notify the Operator of the matters-of interest to that Participant for discussion.

(b) For each quarterly Participants' meeting, the operator shall distribute, at least seven days in advance, a written operational report which shall-include, but not be limited to, the following:

(1) A briot' summary of the Plant's operation since i the last meeting of-the Participante;

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

I

'i j

~19-(11) A summary of Plant chutdowns and unusual load reductions since the last meeting of the Participants; (iii) The status of major capital projects (the criteria governing the projects to be reviewed shall be reaso; ably estab11'shed from time to timo by the Executive Committee);

(iv) A summary of any NRC, U.S. Environmental Protection Agency, New- Hampshire Department- of Environmental Protection, or OSHA violations, and the Operator's response thereto, since the last meeting of the Participants; (v) A list of the NRC elevated enforcement actions including confirmatory action letters, enforcement conferences and NRC-roquested manag,ement conferencess (vi) A cummary of new significant-industry concerns that have a high potential impact on the Plant that would result in significant increased costs or a Plant shutdown; I

1 I

, . ;, _ .,s,v,,~,3,w ,4. vo " na "- c a

• n. * * ' " " " " ' "

l 1

20-(vii) A summary of major exposure items for the upcoming refueling outage; (viii) A list of other issues that tho Operator believes should bo brought to the Participants' attention, o.g., related federal, state or local spocifio incues; (ix) A summary of any event at the Plant declared by the NRC to have boon an Abnormal Occurrence; .

(x) A report on industriai cafety, including status of the lost-time accident incidence rato since the last meeting and the boginning of the year; and (x1) Other items which the Executive Committee shall, from timo to time, reasonably request.

At tho Participants' meeting, the otticer of tho Operator with operational responsibility for the Plant shall give a presentation on the significant items contained in the writton operational report, as well as tho current status of the Plant. The officor will also briot the Participants on the results of evaluations I

l

. . . , . . . , . , . . . ,, m ,m

..m . . . . . . , . . . . . . . . . , , . .

~ :4 3 -

and assessments of the Plant by the Institute of Nuclear Power Operations ("INPO"), since the last meeting of the Participanta.

(c) For each quarterly Participants' meeting, the Operator shall distribute, at least novan days in advance, a written financial report which shall include, but not be limited to, the followings (1) Actual operating expensos for the prior quarter and year-to-dato comparing samo to the approved budget. (The Operator shall explain, in dotoil, all line item expensos which are budgnted to be greator than 1% of the approved operating budget and which are at variance from the approved budget by greater than 10%. Each report shall identity actual expenditures not within the spproved budget and actual withholding of expenditurne which have been approved.);

(ii) A projection as to any nignificant year-end variances from the approved budget. (The Operator shall explain, in detail, r.11 line item expendituros which aro budgetod to bo greater than 1% of the approved oporating budget and projected l

(TUnnHN' ' "q ' Wq tten SU CnEG 09?21 Ingen to c? n f3

- . __ ._ . _ . _ - . _ _ _ _ _ _ _ . - . . _ _ . ~ . _ . _ . _ _ . _ _ . _ _ . _ _ _ . .

to be at variance from the approved budget by greater than 10%. The operator shall also explain I whether the total level of operating or capital expenditures is expected to exened the respective approved budget by 5%. Each roport shall identify proposed expenditures not within the approved I l

budget or proposed withholding of expenditures which have been approved.); and 1

(111) Other items which the Executive Committee shall, from time to timo, reasonably request, (d) Between the quarterly Participants' meetings, tho Oporator shall distribute,- on a timely basis, oporational information which chall includo, but not bo limited to, the following: .

(1) A copy of the NRC' Systematic Assessment of Licenseo Performance ("SALP") report,.or equivalent, and tho operator's response thereto. ,

(Copies of SALp reports are to bo provided as soon as. reasonably possible after they.are released to the public by the NRC.);

, . n n., avvuntrw t yvw wn eten C U 00:3 09?91 I"'""'I"

_ - _ . _ _ = _ _ _ . _ _ _ _ _ _ _ . . _ .._ -_._._.___..___.-._.m _ . _ _ _ . _ .

1 I

(ii) A copy of the year end INPO performance indicator report, or equivalent, for the Plant;

, (iii) A copy of the Plant's post refuol outago report; (iv) A deceription of any event which results in a Plant shutdown or could extend a refueling .

shutdown _by greater than two weeks; '

i (v) A copy of the NRC report for any NRC viciations in Scvority Levels I, II, or III, and the Operator's responso thereto; (vi) A copy of any NRC report containing a pro; ; sed -

civil penalty onforcement action; and (vii). Other items which the Executive Committec may, from time to time, reasonably request; (e) Between the quarterly Participants' meetings, the-Operator shall' distribute, on a timely basis, financial information which chall include, but not be limited to, the i* , lowing i

i 3:

png - OMYunRHMO9 ' WO CICO N EO

__.._._.~.,__-.;.. _ - - . . . . . _ - _ . ~ . - . . . _ , , _ , _ ~ _ - , . ___4

l s

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1 (1) Monthly reports which will enable each Participant to moet its accounting, statistical, and

, financial disclosure requiremante, including.the requirerr.onts of any regulatory bodies having jurisdiction over such Participant. (The Operator o

shall provide cuch accounting information in b

electronic format (i.e., magnetic tapo or diskette) for those Participants which specifically request such. Subject to section 7(a), covoring the cost. of providing additional l information, if any Participant shall reasonably I

requent accounting or other information required L by this section 6 in a special-or diffaront

' format, such request shall be granted to the extent practicable.);-and (11j Othur items which t.hw Executive Committee-shmil, from time to time, reasonably request. i i

(f) Notices of an Unusual-Event, Alert, Sito Area-

, Emergency,-or General Emergency (as such terms are defined in the Emergency Plans for the Plant) shall be o

distributed by tho operator to the-Participants i

immedint'ely according to the Emergency Notification Procedures adopted by NEPEX, or equivalent.

i_

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a In N (T\fV ei hif 9T; fit 7Q 8 tYd f.fn Af* f M 9 p, .tQ+0T Tf FAD -Th

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

I l

(g) The operator shall report to the Participante, no less ,

i 4

than quarterly, on the status of all decommissioning trust funds and all activity associated therewith. At least annually, consistent with the timing of the activities of the Now Hampshire Decomminsioning Finance Committee, or its equivalent, the operator shall issue-a written report to the Participants on the performance of the-investment manager / trustee, as well as the l specific _investmente comprising each trust fund.

1 (h)_ my.the end of the first quarter of each year, the Operator shall furnish each Participant with a i

detailed-list of insurance-policies in effect for-the Plant. Such list shall identify.the insurer, coverage.

umounts, deductibles, premiums and other relevant information. To the extent that premiums.on policies providing coverage for facilities other than the Plant ,

are allocated to the Plant,.the Operator shall so identify and fully document the basis'for such ,

allocation. The Operator shall promptly_ notify each Participant-of any material adverse' change to any policy. ,

b 5

,,, , , ,,, o n, y y ,, y ,,

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l (i)

Upon the exceution of an appropriato confidentiality agreement between the Operator and an individual Partici; ant, thu operater will provide such Participant f with copies of all ovaluations and assessments of f Scabrook Station and the Operator by INPO.

2

($) The Operator chall report to the Participants, no lose than p arterly, on the status of any material 11tigat: 6cn involving possibio liability of all o f the Participants in the project before any Federal or state court or administrativo agency.

(k) Somiannually, the Operator will furnish to the Participants data showing actual performance for the plant compared to estimates and goalo contained in the approved Annual Seabrook Plan as described in Section 8 of this Agreement.

7.- Acpens to Information P

l , (a). Each Participant shall have the unrestricted right to ,

all information relating to-Seabrook Station including, but not limited to, records and correspondence within L

the control of the Operator,-and any service company or.

agent retained or' appointed pursuant to Section 4 of S

G S 4 f

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I this Agreement, wherever located except for information which is a) protected by law, b) rostricted by contract with third parties, or c) doomed commercially sensitive by much service company or agent. 11 requested

'information is rostricted by contract w ti h third partins, the Operator, and such servico company or agent, will uoo its best offerts to obtain the consent of third parties to disclose confidential information Lo Participanto, with the understanding that ,

Participants may be roquired to sign a non-disclosure agreement. For information which is considered commercially sensitive to a service company or agent appointed or retained by the Operator, upon the roquest of one or more Participants, such service company or agent shall allow for its review by an independent third party, selected by the parties involved (other than the Operator and such service company or agent) and acceptable to the Operator (provijod that the operator may not_ unreasonably withhold its acceptanco) to determine, using an informal, simplified proceduro, ,

whether the information in question is commercially sensitive. In any event, if reasonable under the circumstances,-the Oporator may require a Participant to sign a condisclosure agreement covering information that it considers commercially sensitive.

- N

• 9 4 N k

l i

i Roview of information by Participants at the offices of tho Operator, or a servico company or agent appointed  %

or retained by tho operator, shall-occur at reasonable timos during normal business hours, and shall be arranged in advance.

The Participants shall use reasonable efforts to avoid disrupting the business operations of the Operator or much nervice company or egent.  !

The Operator shall coordinato and facilitate the dissemination of information between the project and the Executivo Committee and/or the Participants.

Upon request, the operator shall assist the

' Participants-in regulatory proceedings and other including the l contested matters relative to the Plant, .i 1

provision of witnesses and of current and' accurate data  :

on a timely basis.

4 that will Information, including witness support, l

require a substantial commitment of time or a substantial effort to assemble or develop, and is j

neither a) required by a substantial number of I Participants, nor b) requested by the Executivo I N"NIN T VV*td

• 1 V(1 p,p 3,,

- _ _ _ _ - - _ _ . _ _ _ _ _ = _ . _ - _ _ _ _ _ _ _ _ _ _ _ -

Committee, shall be paid for by thu Participant (s) requesting such information. The Operator, in consultation wit h t.hu Executive Co:runitteo, shall develop a runtonable standard by which it will dotermino how and when a Participant in to be charged for information roquented.

Subject to the limitations not forth oisewhero in this Section ? any information relating to Seabrook Station shall be provided to any Participant requesting it, with the understanding that the Participant may bo required to pay for the coat of providing it in the utrcumstances doccribed in the proceding paragraph.

(b) Without limiting the generality of this Sect' ion 7, any Participant or the Executive Committee may request an audit of the accounts and records of the operator, at its offices, at reaeonablo times, by an independent enttified accountant or other representative of the Participant (s) requesting the audit; provided howover that, absent extraordinary circumstances, and subject to the rights of the Participanto under soetion 18 (Arbitration) of this Agreement, a full-scope audit shall not be performed at the request of tho Executive Committoo or one or mero Participants not affiliated T N.* nvv.om m uv,n.,n, e c n ,. , . en n ,,m, ,, rn ,n

with tho operator more frequently than once cach year.

11 an audit is requestod by tho Exocutive Committee, the ennts thereof shall be borno by all Participants in proportion to their Ownership Sharen. 11 an audit 10 requestod by one or taore, but lous than all, of the Participants, the costs theroof shall be borno by the Participent(s) making such request. If an audit is performed in connection with an arbitration proceedinge the costs of the audit shall be allocated among the Participants in accordance with the decision of tho arbitrator.

(c) F.ach Participant chall be notiflod by the Operator, sufficiently in advance, of exit intervie,v rnestings with INPO, on its evaluatio.n report, and the NRC, on its bALP report and enforcement conforences.

Representatives of any Participant may attend such meetings ao oboorvers.

(d) Each Participant shall have the right to have its representativos visit the Plant, tour facilities, inspect project records (subject to Section 7(a) hereof) and observo Plant activities, provided thet theuo activities will not interfere with the operation of the Plant, Plant safety or security. Such

""" ovv..nux,vu,a.,vn ,u n ,,, g., ,

i

-31 ,

1 representativos shall comply with all applicablo rules and regulations in of fect at the Plant whether impocod by governmental authority or by the Oparator.

8. Epvmental_Budael.n (a) All services rondorod by the Operator, or by a tarvice company or agent retained or appointed pursuant to Section 4 of thic Agreement, under this Agreement will be at actual cent thereof, f airly And equitably

' aillocated and calculated, all consistent with the requiremente of the Act and the rules rad regulations  !

and orders thereunder. Dig 9ct charges will bo mado for services where a direct allocation of cost is possible.

Chargee not directly as9ignable shall be determined hnd allocated on a reasonablo and 4quitable bacia in ,

accordance with PUltCA requiremento and as approved by the Executive Committoo, whleh approval shall not be unreasonably withhold. The operato.r shall cbrain Executive Committee app: oval, which appxoval shall not be unroasonably vit.hheld, of ;he . methodology util17.od, i

as well ao changes thereto, for allocating.conta to the project, prior to the implementation of such methodology. Such allocation methods will be l

uppropriately documented and avaAlablo for review by i

I I

I "U" oVVimut t VV-rn s t vq p,pq 7 . pn g q $ 97 . .

l l

32-the Participants upon re4ueet. Without limiting the generality of the forogoing, r,11ocable costs include exceutive salaries and frings b+ngff.ts paid by the  !

Operator, the employee wages and bvnwfits paid by the Ope.ator, the insurance expenses incarred pursuant to fic:! tion 9 of-this Agreement, and ot her grAneral overhead

- expfacess incurrod by thu operator. The Operator shall keep nomplete And accurato accounts of all receipts and expo dite os hereunder in accordance with the rules and rog#.ations of the Securities and Exchu'qe commission and the Uniform System of Accounts prescs U:#d for Public Utilitios and Lieunsees subject tc tyt rederal Dut1r Act, as amended from time to time (or su th

)' sl a110. accounts as may hereafter become appropp ate)

(hproint"ter the " Uniform System of Account,4").

1 (b) The L'a~rticipants shall pay the Operator for all

. project costs and expenses incurred by the Operator in accordance with the Joint Ownership Agreement.

6 (c) Iit!ws'h calendar . year during the term horeof, commenc_ng with.*,ho first such year which begins after  !

the Time AC fifectiveness, the Operator shall prepare and present to the Executive Committee (with copisw to ,.  ;

each-Participant the following budget informations-g- i

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

a

____._.____m _ _ . _ _ , _ _ _ _ _ _ _ - _ _ .

33.-

Ji) .by November 1 ot each c,alendar yeart (A) a detailed estimated. budget for operating '

and maintenance exponses, disposal costs of nuclear fuel, and any other funding requirements not contained in (1)(w) beldw, in a reasonable format selected by the Executive Committee, for the succeeding j calendar year (the " Proposed Annual Operating Budgot");

(B) a_ six-year forecast of capital expondituros, including a detailed budget of exponditures for construction activities (plant additions and removals), and procuromont of nucical fum1 for tho succeeding calendar year (such capital budgot for the succeeding-calendar 1 year being herein called the " Proposed Annual Capital'Budgot"); and (C) a proposed annual-plan which shall comprehensively address all operating-goals and objectivos for the Plant and its staff

'(" Proposed Annual Seabrook Plan") and the a

O ONYUOIIH9M9'$YQ CICO C, C 07 Q, OO!9I 18/60 TO

basis thereof and shall includo any planned changes in tho authorizod staffing level for the Plant; and (11) by June 1 of the cubsequent yoar, a five-year forocast of all expenditurco defined in (i)(A) abovo, including a proliminary detailed cetimated budget for the succeeding colondar year for exponditures defined in (i)(A) and (1)(B) above using a reasonable format selected by the Executive committoe and a five-year plan for the managemont of radioactive wasto, including projected volumes, spent fuel inventory, processing and disposal plans and estimated costa. .

The Proposed Annuti Operating Budget and the Proposed Annual Capital Budget, defined in (i)(A) and (1)(B) above, shall collectively comprico the "Propopod Annual Seabrook Dudgets". All exponditures that the Participanto are expected-to fund to the Disbursing Agent over tho succeeding calendar year, are to be contained in the Proposed Annual Seabrook Budgets and presented on a monthly basis.

I or shall, an part of the development of the Pt se Annual Seabrook Budgeto, provide a forocast of other project related expendituron, such as property tax paymente and decommissioning 1 funding requirements, which each Participant is required to remit directly to an. entity other than the Disbursing Acant. Such direct pay expenditures forecast shall not bo included i

in the total Proposed Annual Seabrook Budgeta, in advanco of the meeting of tho Participants at which the Proposed Annual Seabrook Budgets and Proposed Annual Seabrook Plan will be considered, which mooting shall be held on or prior to Dacomber 15 of oach year, the-Executive Committon shall review such-Proposed Annual Seabrook Budgete and Proposed Annual Seabrook

~

Plan and,.after consulting with the other Participants, shall confer with the Operator regarding such Proposed Annual Soabrook Budgets and Proposed Annual Seabrook Plan for such calendar year. Subject to tho provisions of Section 37.3(c) of tho. Joint Ownership Agreement, the Participants shall, by a vote of fifty-ono percent n

(51%) or'more of the-Ownership Shares, eithr: approve or modify the aggregate dollar amount of oither or both the Proposed Annual Operating.Dudgot or the Proposed Annuni Capital Budget. Upon approval by the e nuven w uv w vn c cn n- onen -n mt in nn in

L i

Participants', the Proposed Annual Scabrook Budgets, reflecting any modifications made thereto by the Participants,.and the Proposed Annual Seabrook Plan, reflecting any modifications made thereto by tho Participants, shall be deemed to be the final annual Seabrook Budgnts")

Seabrook budgets (the " Final Annual and final annual Seabrook plan, (tho

• Final Annual To Seabrook Plan"), respectively, for such year.

become' effective, 50 Final Annual Seabrook Budgets and Final- Annual Seabrook = Plan for such year shall, subject

-to-th's provisions of Section 37.3(c) of the Joint Ownership Agreement, requiro approval by Participants l

owning fifty-one_ percent ($1%) or more of the ownership Shares in'the Seabrook Project before the prior December 31, provided that if Pc ticipants owning more

'than-49% of the ownership Shares do not disapprove.of the Proposed Annual Seabrook Budgots and Proposed Annual .Seabrook Plan in writing lar tho tenth day after then it the_ meeting called and held to' consider it, shall be deemed to be tho Final Annual Seabrook Budgetr.

h And Final Annual Seabrook Plan, respectivoly, for suc -

year.

Tho Participants may-review the planning and budgot process and roquest changes,_ subject to approval by

"'* nw ,nuvivuw era mn g pg?m, ,n m 9,nn, n

'the Executivo committee. _The Operator shall_make every reasonable _ effort to implement the changes reasonably ,

requested by the Participants and approved by the A decision by the Executive Executive Committee.

Committee to approve or disapprove any such requested-change may be overridden by a voto of 51% or more of the Ownership shares.

(d)_ Subsequent-to, approval of the Final Annual Seabrook Budgets, the Executive Committee-may, in the reasonable exercise of its discretion, approve the redistribution

.of expenditures among budget categories or budget items The Participants to which the Operator shall conform.

shall_ approve or disapprove in advance, by a vote of or:more of Participants owning _ fifty-one percent (51%)

tho-ownership shares, increases in expenditures contained in the' Final Annual operating Budget or tae Final AnnualECapital Budget if such:projstted expenditures aro expected to1 result init otal' expenditures which exceed 1the-respective approved annual-budget by 5% unless1there is an Lmmediate need nit to to proceed in order to maintain or restore the safe reliable operation, in.which caso similar PartJcipant! approval is-required if such incroases are.

expected to result in expenditures which exceed the-a

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budget by~10%.

-In no event shall the Operator fail ~to comply'with applicable law, the NRC's rules, regulations or orders,-or the terms _of_the Unit's operating License or Technical-specifications due to the need to obtain such approval. The Operator will

~

make: reasonable efforts to mitigate expenditures and -.

i s avoid' increases in approved budget amounts.

-Expenditures made-for the purposes of regulatory compliance which were not-anticipated in the approved budget and which_ result _in exceeding-the approved budget shall be' reported by the Operator promptly to i the Executivs Committee.

_(e)

The) operator shall. submit to the~ Participants for their approva3,:by a 51%-vote of the:0wnership shares, a

'dotalled plan and budget. pertaining to all_its activities covering'the; period:from the-Time:of

~

s Such- l Effectiveness to'the end of'that' calendar year. ,

i plan:chall be submitted at least'60: days-prior totthe:

-Time of Effectiveness,--and:shall--include, but.not'be limited:to,Jstaffing changes',Esignificant contracts

• which the Operator-proposes to[ terminate _and/or anscts-d which it; proposes to abandon;and the costs ' associate therewith.

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ownnnv e mi in . yn ggen es* enen en.0T Te en m

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

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l (f)- In-the event.that the Oporator has obtainod services

~from-an affiliated company, as contemplated in Section-4 of this Agreement, such affiliateo company shall,

.unless'the Executive Committee othervjse directs, submit-bills for such services to the operator, and the operator'shall in turn bill the Participants for such services in accordance with the Agreement for Seabrook

-Project.Diebursing Agent, as amended.

(g) -In the c event of a dispute as to-the amount of any

~

. payment to be-made to=the Operator hereunder,-the Participant or Participants disputing such payment

~

shall. notify the Operator of-the-amount in dispute and-including

-shall1 pay'to the Operator the total payment

~

~tho' disputed' amounts. The operator shall promptly -

refund,;with interest from the date of payment until

~t he dateiof refund'at'an annual rate equal to the L

ffect from l' ,

_. lowest (i.e., " base") interest rate,-in-e

~

tilne to time, - at the Bank of Boston on 90-day commercitl--loans, any disputed amount ultimately found to be not payable.

l 1

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e r 5 Sa..lcertain Transitional Rulen In the event that North Atlantic Energy Service Company shall be appointed by the Participants to act as Dicbursing Agent for the project and such appointment shall becomo '

effective prior to the time that Participants owning nighty '

percent-(80%)'or more of the ownership Shares have voted to to amend Section'37.3 of the Joint Ownership Agreement authorize tho. annual preparation of twelve-month budgeto (rather than-the-quarterly preparation of six-month. budgets, _

then North as presently required by said Section 37,3),

Atlantic ?tnergy service -company 'shall comply with -the requirements of thn Joint Dwnership Agreement and the First

.Amandment - to the Seventh Amendment-to-and RestatedL as Agreement for Project Dieburning Agent'(such Agreement, theEsame may from time to time be modified, supplomental or

-amonded, being hereinaiter-called the " Disbursing Agent  !

--Agreement") with respect to.the-manner, timing and other matters aftocting xhe budgets for the project and the billing and disbursement of Project Costs, unless and until i i

Participante' owning eighty. percent (80%) or more vote:to amend Section 37.3 of the-Joint Ownership Agreement to h budgets; authorize lthe annual preparation of twelve-mont 3 shall-be so provided, however, that until said Section 37 f p

amended,;in addition to complying with the requirements o g

L

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3 Section 37.3 of the Joint Ownership Agreement and the Diebursing Agent Agreement, the operator shall, for informational purposos only, also annually propare and distribute to-the Participante twelve-month budgets, as cont.emplated by Section 8 horeof. r

-9. .Inayrance The Participante hereby direct the Operator to implement Paragraph 10 of the Joint Ownership Agreement.

The Participants further direct the Operator to obtain and maintain for the-benefit of its officers, directors and trustees while acting in.such capacities, Directors and

' Officers Liability Insurance in such amount as the Operator may from time to time determine, after consultat,lon with the-Participants.

10, Decomminstoning 1.-

In furtherance of the provisions of Paragraph 13A of the.

Joint Ownership Agreement, the Participante hereby designate P

the Operator as " lead company" (as that term is defined in Chapter:162-F of the-New Hampshire Revised Statutes-Annotated) and delngate to the Operator authority to serve a

" "a* nmnnmw u.n ncn n. cn.y, _ y n

t

.I.-

1 I

t as-spokesman 1for the Participants, under the reasonable-direction of the-Executive Committee, in dealings.with the

--State of New llampshire with -respect to = the Seabrook Nuclear Decommissioning Financing Fund as contemplated by that statute.- The Operator lshalltalso perform-all of the obligations of a Managing Agent under the Pre-Operational Decommissioning Funding Agreement, the'Seabrook. Pre-Operational Trust Agreement and the Seabrook Nuclear all-Decommissioning Financing Fund Master Trust. Agreement,

dated as of February 11, 1989, as the same may be amended from time to time.

11 ', Limitation of Liability ,

,4

q For and in consideration ofLthe fact that the Oporator is  !

I undertaking responsibility for-design,' engineering,

' ' construction,: operation:and maintenance--of-Seabrook Station-

-for-and on behalf of the'

Participants:

without any r <

compensation or charge other than recovery.of its' costs;for such services, no Participant.shall-be entitled toLrecover-

~

trustees, officers, from the Operator or the-directors,

employees,Lagents or affiliates of the Operator-(or the

' directors,. trustees, officers, employees-or agents of such-3 .c affiliates)-(collectively " Protected Parties 5) any damages 4

b resulting from.the-performance or non-performance of its-N nwangswnq.wn cyn g gg

y -l rospective responsibilities hereunder or under the Joint ownerchip Agrooment, or-for any damage to scabrook Station,

.any cur ta11 ment of-power,-or any otheri damagos of any kind, including direct, incidental, consequential, special, indirect or punitivo' damages occurring during the courso of-the design, engineering, procurement, installation, refuoling or

-construction, operution, maintenance, decommissioning of Scabrook Station or otherwiso arising out

' of the performance or non-performance of this Agreement,-

unless such damagosinhall have resulted directly from the

' willful misconduct of the Oporator, or, to the extent legally attributable to the Operator, directly from the Notwithstanding-willful misconduct of a Protected Party.

the proceding sentence, no Participant shall-bo entitled to recover any ouch damagen if such-damagos resulted-from the operator's or Protected Party's actions or omissions that havo boen:oxpressly approved in advance by'the Executive

' Committee or by the rarticipants.

All goods and services provided to the project' by a Protected Party shall tm under a written contract having tho same limitation of liability as - above; provided, howevor, sly even that the same limitation of liability shall also if' goods and servicos are provided without a writton contract.

~~

e ni m 'IM DtM W W W{Q' W(1 gypp gg g

w The provisions of this Soction il shall apply to the

-notwith=tanding.any' provision of this Agreement contrary and shall survive the expiration or termination of this Agroement, 12 . . Term and Effectivgnggg (a)

The term of.this-Agreement'shall commence at the Time of' Effectiveness, provided that it has been executed by.

Operator and Participants owning at least 51% of the ownership Shares of Seabrook Station, and shall continue until the date,-after the cessation of commercial operation of Seabrook-1, on which the Participants and Operator.are ultimately relieved by the NRC of.any further obligations with_ respect to the decommissioning of Seabrook 1, unless' sooner terminated-as-hereinafter provided.

-(b) This' Agreement may be terminated 1

(1) By the Participants, at any time, with or without t

b cause, by the affirmative vote of.51% of all i

L. Ownership Shares,

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~45-(ii) By the Operator, with or without cause, upon twelve months prior notice to the participants; providod that tho Operator may not.give auch notice of termination during the first twelvo months following the Time of Effectiveness.

(c) any party-terminating this Agrooment shall give written t

notice of such termination to the other parties hereto, stating the date on which termination is to occur (the

" Termination Date"). Notwithstanding nuch notice, the Termination Data shall not occur until any requisito amendmont to the Operating License has been issued and ie in offect. The Operator agroos to cooperate with the-Participanto to accomplish the orderly transfor of

its responsibilities herounder to any successor designated by the Participants. On the Termination Date, as a precondition to any termination heroof, the Participants shall pay to the Operator all amounts' duo' tozit-horeunder and shall execute and doliver to Operator such instruments as it may reasonably request which evidonce the continuing obligations of the Participants in accordance with.Section 11 of this Agreement.

r er e O MD NNM ' $Y(l {p{q

(d) If the Participants or the Operator terminato this 2 Agreement, the Participants shall relanbureo tho Operator for diroet costs actually incurred resulting from such termination. The Operator shall fully substantiato all direct costo actually and reasonably incurred and supply supporting documentation of such The Operator shall use its costs in reasonable detail.

best offerto to mitigate the costs of termination.

(e) This Agreement shall also be subject to termination and shall terminate, without any action by any of the parties heroto, to the extent and from the time that performance may contlict with the Act or with any rulo, regulation or ordor oi the SEC odopted before or after the making heroof.

13. No Sotog l

The Participants' obligation to make payments to the Operator hereunder is absolute and unconditional end a Participant shall not be entitled to sot of f against the payments required to be made hereunder any amounts owod to it by the Operator or any aff'.' late of the Operator or by any other Participant or the amount of any claim by it

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against the Operator or any affiliato of the Operator or any-other Participant.

14. A.ti.fignatat -

This Agreement shall be binding upon end inure to the bonofit of the Operator and the Participants and the subject to the Participants' cuecessors and oosigns, The Operator may not assign limitations herein est forth, A Participant may not its rights and obligations hereunder, assign part or all of Jts interests hereunder except as an i nt of a

. integral:part of a transaction involving an ass gnme corrosponding portion of its Ownership Share which complius' with tho Joint ownership Agreement.

Beneficiarios, 15.-fdp Third Party fit

~The provisions'of this Agrooment are solely for-the bene d are not of the' parties hereto and~the other-Participants an intended to benefit or create righto in any third parties, p-

16. Several Obligations of Participants The_ obligations of the Participants under this Agreement-and l to this Agreemont-shall any contract entered into pursuant u

' "

• nvwnmyyx.wn y ,n w cn m ot,9r t g n ,, t 9 l

be several, and-neither joint nor joint and several, in v proportion to the respective Ownership Sharos of the Participants. Every. document delivered to any third party by-the Operator which may bear on the naturo of the Participanto'-obligations shall specify cuch several (and ,

not joint or. joint'and soveral) nature of the Participant's obligations.

17. Applicabis Law'and Enfordg,gbility

-This Agreement: is made under and-ohall be governod by and i interpreted-in accordance with the laws of the' State of New

'1

\

Hampshire.

Infthe event that any clause or provisjon of this Agreement, orzany part thereof, shall be. declared invalid or

. unenforceable by any regulatory body or court having E

L

-jurisdiction, such' invalidity or unenforceability shall not affect the validity or' enforceability of the remaining portions of this-Agreement.

'18.- Arbitration Any dispute.among.a) any of the Participants and. Operator or b) any Participant and other Participant (s) with respect to i,

f mrv .ntrv nntw e vn ,my,,

this Agrwoment (" Disputing Parties) shall be.sebmitted to Copies arbitration on the request of any Disputing Party.

of any such request shall be served on all Participants and the Operator. Such request shall-spoeify the issue or issues in disputo and summarize the submitter's claim with respect thereto.

Within ton busineas days after receipt of such a request authorized roprosentatives of the Participants and the Operator shall confer and attempt to If such agree upon appointment of a single arbitrator, agreement is not accomplished, any Disputing Party may request the American Arbitration Association to appoint an arbitrator in accordance with its Commercial Arbitration Rules,1which rulee shall govern the conduct of the arbitration in the absence of contrary agreement by the Disputing Parties. The arbitrator shall conduct a hearing in Manchester, New Hampshire, or at any other location i hin Emutually agreed to among the_ Disputing Parties, and w t thirty days.thereafter, unless such time is extended by agreement-by the Disputing Parties,.shall notify the Participanto and Ope ~ator in writing of his decision, stating his reasons for such decision and listing his The arbitrator findings of fact and conclusions of law.

shall not have-power to amend or add to this, or any other, Subject Agreement, including the Joint Ownership Agreement.

to such limitation, the decision of the arbitrator shall be

? &#~r % avrumty t yv wr e v yn pppg ,, p

any final and binding on the Disputing Parties except that Disputing: Party may. petition a court of competent Tha decision of jurisdiction for review of errors of law.

the arbitrator shall determino and specify how the expenses of tho arbitration shall be allocated among the Disputing Parties.

19. Noticos Any notice, demand, request or documentation to be furniched to any Participant or the Operator pursuant to any provision of this Agreement shall be provided in writing and shall be delivered either in person, by prepaid-telegram, by registered or certified mail, or by.telecopier, telefax, or other electronic means with verification of receipt thereof i ipant or

.to the officer, official, or agent of such Part c Operator at the-address indicated on Schedule A hereto or at such address as may hereafter-be designated from time to time by.such Participant or Operator by written notice to ths other Participants and the Operator.

l I-

20. Countfirearts ,

Any number of counterparts of this Agreement may be executed-and each shall have the same force'and offect as an original 1

L ECO? : (TyvunHH ygggazyd Cten s u en g nm g ,g

_ ~

4 f the counterparts and as if all of the Signatories to all o had signod the same instrument.

I

21. Amendtuint by agreomont This Agreement may be amanded from51% timo to time; or more of in writing executed by Participants owning iremente of the Ovnurship Sharan, except that voting requ ended, and grantor than 51%, contained herein, may not be am

%, contained actions requiring a vote greater than 51 t in heroin, may not bo rescinded or cuperseded, t r porcentexcep of tho wri. ting by Participants owning such gron e ownership Shares.

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'WHOliN tWy-}q e yyg EU@ *

.{?OT I6-80 To-

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~52-

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d this

.IN WITNESS WHERE0r, nach of the undersigned has cause Agreement, to be duly = signed by an authorised - of'O.cer, and its -

iraspective seal to bo duly affixed hereto and attested.(or such signature by'an authorized officor to be attostwd to by a

, witness) on the.date-indicated but as of the date first above writton.

"[ ATTESTED SEAL OR SIGNATURE OF. WITNESS) NORTH ATLANTIC ENERGY SERVICE COMPANY i

By: _

Its Dates PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE DY8

- I t.s Date ,

-THE UNITED ILLUMINATED COEPANY By: _

Its Dates EUA POWER CORPORATION

~Dy Its Dato _ _ _ _

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1 MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY.

Dy Its Dates NEW ENGLAND POWER COMPANY

__ By:

Its Dates THE CONNECTICUT. LIGHT AND POWER COMPANY

_ By: _

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Its -

Dater CANAL ELECTRIC COMPANY Bft _ _ _

Its Dates _

MONTAUP ELECTRIC COMPANY By1 Its Dates J

- 9900 qqvgggyzgy3q,lV4 CPCO ? 0 COUG CI;91 - I 6 / t10 e In I-

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54 -

- NEW' HAMPSHIRE ELECTRIC COOPERATIVE, INC, F Dy _

-Itu-

-Datoi _

VERMONT ELECTRIC GENERATION-AND TRANSMISSION COOPERATIVE, INC.

BYt .

I Its.

?

Date _

TAUNTON 11UNICIPAL LIGHTING, PLANT

)

8v t _. - _

Its-Dates _

HUDSON. LIGHT & FOWER DEPARTMENT By -

Its Datet a

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^ ^ *5 N .tvv intiv r vu,o a e vn eten e** P n ? ,Q tT*0Y TH 0. 0 TE ~

1 SCHEDULE A Addresses of Agonts for Operator and Participants l

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