ML20206T491

Application for Amend to License NPF-66,reflecting Establishment of Wholly Owned Subsidiary Corporation to Facilitate 870203 Agreement Re Contested Proceedings Concerning Const of Facility

ML20206T491
Person / Time
Site:	Byron
Issue date:	04/16/1987
From:	Ainger K COMMONWEALTH EDISON CO.
To:	Murley T Office of Nuclear Reactor Regulation
References
2976K, NUDOCS 8704230190
Download: ML20206T491 (105)

Text

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/ ', Commonwealth Edison

( -- d Oro First National Plaza. Chicago, Enois l

\ / Address Reply to: Post Offce Box 767 Y/ Chicago, Illinois 60690 - 0767 l

April 16, 1987 i

Mr. Thomas E. Murley, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, DC 20555

Subject:

Byron Station Unit 2 Application for Amendment to Facility Operating License NPF-66 and Appendix A, Technical Specifications NRC Docket No. 50-455

Dear Mr. Murley:

Commonwealth Edison Company will establish a wholly-owned subsidiary corporation, the Central Illinois Electric Generating Company (" Subsidiary"),

to facilitate an agreement, dated February 3, 1987, among Commonwealth Edison Company, the Governor, the Attorney General of the State of Illinois, the States Attorney of Cook County, Illinois, several other representatives of state agencies and certain industrial customers of Commonwealth Edison Company (the " Agreement"). The Agreement is attached as Exhibit A. The Agreement, which is pending before the Illinois Commerce Commission for approval, concerns a number of contested proceedings before the Illinois Commerce Commission and the courts involving the continued construction of Braidwood Station Units 1 and 2, as well as establishing the rates which Commonwealth Edison Company will be allowed to charge in recognition of the operation of Byron Station Unit 2 and Braidwood Station Units 1 and 2.

Specifically, the Agreement contemplates the conveyance of title to Byron Station Unit 2 and Braidwood Station Units 1 and 2 from Commonwealth Edison Company to the Subsidiary in accordance with the Facilities Transfer Agreement which is attached as Exhibit B. Commonwealth Edison Company will have the right to purchase all electricity produced by the units for at least a 5-year period under a power Supply Agreement which is attached as Exhibit C. The subsidiary's rates will be regulated by the Federal Energy Regulatory Commission. The Agreement also provides for a rate increase of approximately 9.6% (net of fuel savings) to Commonwealth Edison Company's retail customers with a five year moratorium on rate increases thereafter. The retail customer rates would continue to be regulated by the Illinois Commerce Commission thereafter. Finally, the Agreement provides several options that are available to address the rate treatment of the units owned by the subsidiary after the fifth year. Those options are to be exercised at the direction of the Illinois Commerce Commission.

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l Mr. T.E. Murlcy April 16, 1987 l Although the Subsidiary will become the titleholder of Byron Station Unit 2 ("the Facility") under the Agreement, it is not contemplated that the l Subsidiary would itself operate the Facility. Commonwealth Edison Company, under an agreement with the subsidiary, would continue to operate the Facility and be financially responsible for the operations of the Facility as that term is used in the regulations of the Nuclear Regulatory Commission (the "NRC").

The Construction and Operating Agreement and the Financing Agreement between Edison and the Subsidiary are attached as Exhibits D and E respectively.

Based on the foregoing, we believe the operating license, including the technical specifications, should be amended to recognize the Subsidiary's status as titleholder of the Facility. Accordingly, pursuant to 10 CFR Sections 50.59 and 50.90, Commonwealth Edison Company requests that NRC amend the operating license to add the Subsidiary as a co-licensee with Commonwealth Edison Company as shown on the marked-up operating license and technical specifications in Exhibit F.

Attachment 1 of this letter contains additional general information in support of the application for license amendment. Included is a description of the organization and management of the Subsidiary, the Facility being conveyed to the Subsidiary, and information concerning technical and financial qualifications.

Attachment 2 addresses antitrust review. The information presented in this attachment demonstrates that neither the Agreement which occasions this amendment application nor its implementation constitute changed circumstances which raise any significant issues under the antitrust laws or which require a further antitrust review.

This proposed amendment has been reviewed and approved by both on-Site and Off-site review in accordance with Commonwealth Edison Company procedures. We have reviewed this proposed amendment in accordance with 10 CFR 50.92(c) and determined that no significant hazards consideration exists.

Our analysis is documented in Attachment 3.

The conveyance of the Facility to the Subsidiary requires the approvals of regulatory authorities in addition to the NRC, including the Illinois Commerce Commission and the Federal Energy Regulatory Commission.

Until all necessary approvals have been obtained, the Agreement described above cannot be implemented. It is intended that such approvals will be sought and obtained by July 1, 1987. Therefore, it is requested that the NRC approve the proposed operating license amendment but delay its effectiveness until 12:01 a.m., July 1, 1987. Should it subsequently appear that other l

regulatory approval cannot be obtained prior to that time, Commonwealth Edison Company will promptly notify the NRC.

! Commonwealth Edison Company is notifying the State of Illinois of i this application for amendment by transmitting a copy of this letter and its attachments to the designated State Official.

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t Mr. T.E. Murley April 16, 1987 In accordance with 10 CFR 170, a fee remittance in the amount of

$150.00 is enclosed.

Please direct any questions regarding this matter to this office.

Very truly yours,

. A^

K. A. Ainger Nuclear Licensing Administrator 1m Exhibits: A through G Attachments (1): General Background Information (2): Antitrust Review (3): Analysis of No Significant Hazards Consideration

Enclosure:

Fee Remittance cc: Byron Resident Inspector NRC Region III Office L. N. Olshan - NRR M. C. Parker - IDNS SUBSCRBEDANDSKOgNto befor me.tigs /y day of si y i , 1987 bl C -

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Notary Public

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February 3, 1987 MDIORANDUM OF UNDERSTANDING WHERIAS:

The completion of the nuclear power plants now under construction in Northern Illinois and the Potential impact which either completion or cancellation of these plants could have on electric rates, electric service and the economy of the State are matters of great concern to the people of this State; and WHEREAS:

approximately 7.1 billion dollars will be invested in these power plants; and WHERIAS:

protracted and costly litigation concerning the completion of these power plants is continuing and further costly litigation concerning the level of electrig rates will occur unless resolved by agreement among responsible public officials, electricity consumers and commonwealth Edison Company

(" Edison"); and WHERIAS:

the signatories to this Memorandum all agree that it la in their mutual interest to resolve the continued uncertainty with respect to completion of these power plants, the level of electric rates and the adequacy of electric service and to resolve those uncertainties without resorting to still further litigation which all agree would only serve to increase the costs to all concerned.

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ratemaking purposes, book depreciation during the Initial Rate Period shall be accrued on a straight-line basis. Such deprecia-tion shall commence (and capitalization of carrying charges shall cease) for Byron II and Braidwood I no later than July 1,1937, and for Braidwood II no later than October 1,1988. Edison fur-ther agrees that it will not cause the subsidiary to replace Edison as the primary obligor of any outstanding security of Edison existing at the time this Memorandum is executed.

The subsidiary will not be subject to regulation by the Illinois Commerce Commission ("ICC" or " Commission"), except as provided in the affiliated interest provisions of the Illinois Public Utili-ties Act, and will not be subject to the audit provisions of the 1

Illinois Public Utilities Act. The subsidiary's rates will be I

subject to regulation by the Federal Energy Regulatory Commission

("FERC"),,and, subject to the parties' commitments in Paragraph 7 hereof, Edison will not oppose the participation by any party to this Memorandum'in'any proceeding before the FERC, including a proceeding to approve the rates to be charged by the subsidiary.

In connection with the transfer to the Subsidiary, Edison will j

yrite off not less than $550 million of its investment in the t

Units. Edison will file appropriate pleadings with the ICC to j implement the provisions of this Memorandum. Parties to this Memorandum shall have the right to participate in any hearing called by the ICC relative to said petition.

Edison represents that it does not plan to retire any of its generating units in any different sequence or sooner than that on file with the ICC in Docket No. 86-0249 and Edison acknowledges

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NOW THEREFORE, in consideration of the promises and covenants set forth in this Memorandum, the parties agree to a settlement upon the principles and understandings set forth be-low:-

RESTRUCTURING THE OWNERSEIP OF THREE NUCLEAR GENERATING FACILITIES

1. Edisor} will transfer its nuclear generating facili-ties known as Byron Unit II and Braidwood Units I and II (the

" Units") to a- wholly-owned subsidiary (the " subsidiary") . Neither Edison nor the subsidiary will take any action with respect to ownership (legal or equitable) of the Units that would preveht the Subsidiary from performing its obligations under the Power supply Agreement provided for herein. Edison will complete and operate the Units, transferred to the Subsidiary. For operating purposes, i

Edison will treat the Units on the same basis as its own units and will be responslbfe for insuring that they are operated and main-tained safely and in accordance with all requirements of the Nuclear Regulatory Commission ("NRC"). In all aspects of operat-

,ing the Units Edison will allocate costs and resources on a basis consistent with its general utility operations so as to insure that no subsidy flows from or to the subsidiary. For purposes of treating deferred taxes related to the Units, Edison agrees that during the Initial Rate Period (as defined in Paragraph 3 herein) the Units shall be treated in the same manner as the nuclear units owned by Edison; and that deferred taxes shall not be flowed back to income disproportionately during the Initial Rate Period. For

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MEM0RANDUM .

OF UN'DERSTANDING

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Exhibit A

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d that retirement of its generating units requires the approval of the ICC under the Public Utilities Act. Furthermore, Edison represents that it intends to operate its generating units in accordance with the principles of economic dispatch (subject to -

changes imposed by governmental authority) and that its Illinois c,oal-burning units are, and Edison believes that at least for the duration of the Initial Rate Period, are expected to be, its lowest cost coal-burning units.

Edison agrees that it will not defer its operating and maintenance ekpenses and capital additions costs during the Rate Moratorium Period for the purpose of increasing its costs for test i

year purposes in any rate proceeding after the Rate Moratorium Period. To enable any party to verify that Edison has conducted i

its operating and maintenance and capital additions programs in accordance with this commitment, Edison shall file annually during the Initial Rate Period a report with the Commission describing its budgeted and actual activities related to operating and main-tenance expenses and capital additions costs for the previous year. The report shall include an explanation of any significant ,

discrepancies between the budget and actual expenditures for that year.

RATE MORATORIUM

2. Edison will not seek a general rate increase for five years or for eight years if option (c) described in Para-graph 5 hereof is exercised (which 5-year or 8-year period shall be the " Rate Moratorium Period"), except as specifically provided

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in Paragraph 3 hereof (or, if option (c) of Paragraph 5 is exer-cised, the increase permitted therein), nor will Edison otherwise seek any other increase in its rates during this period, except as otherwise provided in Paragraph 3 hereof. This paragraph shall not preclude Edison from seeking an increase or decrease in or taking any other action before the ICC with respect to the follow-4 ing Rates and Riders, or from taking any other action with the consent of the party affected by the change: Rates 1, 1E and IT (but only as these three rates relate to light bulb charges), and Riders 4 (but"only with respect to avoided cost payments), 6, 7, 10, 21, 23 and 27.

(In this Memorandum, " general rate increase" means any increase for which Edison would, absent a waiver by the Commission, have to comply with ICC General Order 210 now codified '

I at 83 Ill. Admin. Code 285).

.3. Effective as of July 1, 1987, Edison will increase .

its base retail rates by approximately $660 million, exclusive of revenue taxes. ' The general service rates will be determined by l

applying a uniform percentage increase to its base rates currently in effect. The uniform percentage increase that will be applied to the general service rates will be the percentage that, if applied to all of Edison's base rates, would result in a revenue increase lof approximately $660 million. The parties agree that Edison's residential and general service rates will be as set forth in Attachments A, B and C. Attachment A reflects a reduc-tion in the summer-winter rate differential. Except as otherwise required by the terms of this Memorandum, during the Initial Rate Period fuel costs of the Units shall be included in Edison's

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computations under its fuel adjustaant clause in the same manner as though the Units were owned by Edison. During the Rate Morato-rium Period, Edison will not file with the ICC any.other request for a general rate' increase or for any other increase in rates (other than as may result from changes in the rates and Riders listed in Paragraph 2 hereof) excepts

a. Where conditions beyond Edi' son's control, such as, but not limited to, acts of God, major , economic disruptions, or changes in law, rules or regulations or interpretations thereof, create or result in a financial emergency for Edison which threatens Edi-

- son's ability to continue to maintain an adequate quality of service in its service area or otherwise carry out.its responsibil-ities as a public utility; or

b. To recover costs or recoup revsaue losses '

imposed by decisions, or by changss in law, ordinances, rules or regulatiora er inter-(

pretations thereof promulgates or enacted by any Illinois court, the General Atatably or

' any other Illinois governmental or regulato-

• ry body or other authority after the date hereof involving regulatory or tax matters or franchise or similar payments to units of local government, all as applicable primari-1 ly to electric utilities, public utilities, Edison or regulated industries generally (as distinguished from being applicable to all businesses or taxpayers as a class).

c. To recover any federal acid-rain tax, sur-charge or fee.

The Conaission shall make the determination of whether an appro-1 priate emergency exists to warrant the granting of a rate increase 4

pursuant to the foregoing subparagraph a. Further, nothing in this Memorandum shall be construed as preventing any party from a) contesting an application by Edison to increase or restructure its rates or riders other than as provided in the first two sentences f

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of this Paragraph 3 (or in option (c) of Paragraph 5 of this

. Memorandum) or b) from seeking a rate reduction where a relaxation of governmentally imposed costs, such as, for example, a material reduction in taxes, creates a significant windfall for Edison. A "significant windfall" exists only if in any year Edison's re-ported consolidated not income, before interest expense, produces a rate of return on Edison's total book assets (including those of the subsidiary) which. is in excess of a rate of return which would be just and reasonable if applied to Edison's utility rate base pursuant to the Illinois Public Utilities Act.

On or about July 1, 1992, or, if option c in Paragraph 5 hereof is exercised then on or about July 1,1995, Edison shall i' file with the Icc an application for a determination as to appro-t priate rates following the Initial Rate Period. Such application may include a request for a general rate increase (including emergency relief) or decrease. '

The period,beginning with the effective date of the rate increase provided for in the first

! sentence of Paragraph 3 and ending with the effective date of the rates established by this procedure is defined as the " Initial Rate Period."

4. At no time will Edison seek to recover any revenue shortfall or inadequacy which it may believe exists in its rate levels in effect during the Rate Moratorium Period. This provi-sion shall not prevent Edison from seeking a rate increase under the terms of the exceptions specified in subparagraphs (a), (b) and (c) of Paragraph 3 or from seeking emergency rate relief immediately following the Rate Moratorium Period.

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POWER SUPPLY AGREEMENT 5.

Edison will enter into a Power Supply Agreement with the subsidiary whereby Edison will have a right which shall take precedence over the right of other purchasers to purchase all of the output of the Units for five years. Edison will buy elec-tricity from the subsidiary when doing so'is cheaper than produc-ing electricity from other units or buying it elsewhere.

In exchange for the right to buy electricity, Edison will pay a fixed monthly fee of $55 million to the subsidiary. During the five year period ending June 30, 1992, Edison will pay only the cost. of fuel, plus amounts equal to the amounts of bonuses provided.{or in the output Guarantee provision of this Paragraph 5, for the e'lec-tricity it buys from the subsidiary.

Outeut Guarantee .

If th'e SubsidIiary is unable to produce energy from the Units at the cumulative target levels set forth below, Edison guarantees, through the operation of the fuel adjustment clause (by making credits against costs reflected in that clause), to compensate ratepayers for the excess costs of replacement power over the fuel costs of the Units; provided, however, that Edison shall not be obligated to absorb more than $660 million of re-placement power cost in respect of a shortfall in any of the years 1988 through 1991, or $330 million in respect of 1987 or 1992.

I The amount of replacement power in respect of any year shall be deemed to be the shortfall in cumulative target level output as of

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l the end of'such ear f5ss the amount, if any, of such shortfall at the and of the preceding year. In computing the shortfall in output under this paragraph, only one-half of any energy for which Edison has received a bonus of one-half of the savings pursuant to the immediately succeeding paragraph, shall be considered as energy output of the Units. 1 If in any year the subsidiary produces energy from the Units in excess of 110% of the annual target level set forth below for such year, Edison shall be entitled to a bonus based on the savings relat&d to all energy produced in excess of 110% of the target output. Such savings shall be the difference between replacement power costs and the fuel costs of the Units applicable to the energy representing output in excess of 110% of the target output. The bonus shall be equal to the full amount of such savings to the extent those savings do not exceed the amount of credits previously paid pursuant to the preceding paragraph and half such savings'to the extent such savings do exceed such cred-I its. In determining if a bonus is earned, all kWh output in any year up to 110% of target levels shall be considered normal out-l put. Then any output achieved in that year after 110% of the target output has been achieved shall be considered excess output and eligible for the bonus.

Any credits, bonuses or adjustments to be made as a result of the output Guarantee shall be accomplished through operation of the fuel adjustment clause.

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.' s TARGET LIVELS 1

Annual cumulative X3AI Gioavatthours Ginawatthours July-Dec 1987 6,000 6,000 1988 11,000 17,000 1989 13,200 30,200 1990 16,100 46,300 1991 18,000 64,300 Jan-June 1992 7,550 . 71,850 Commonwealth Edison will propose methods and procedures to estimate replacement costs for power, and submit such proposal i

to the parties to this Memorandum for comment. All parties agree to work together to develop a mutually agreeable approach. In the event that there are unresolved disputes, the parties agree to 4 i submit the matter to the ICC for hearing and resolution.

Canacity Guarantee The cumulative Target Level Gigawatthours as of July 1, 1992, as set forth' above in this Paragraph 5, assumes that Byron II and Braidwood I each will produce 25,273 gigawatthours during the period and that Braidwood II will produce 21,304 gigawatthours during the period. If, as of July 1, 1992, either Byron II or Braidwood I has produced less than 20% of its share of the cumulative Target level Gigawatthours, and as of such date, that Unit has become inoperable and it reasonably appears that the l Jnit will not operate in the foreseeable future, Edison shall be obligated to provide additional credits against costs used in computing fuel adjustment charges under Edison's retail rates.

Such credits will be determined in accordance with Attachment D.

However, no such credits shall be made if the aggregate of the credits provided for under the output Guarantee is equal to the ,

aggregate amount of fixed monthly fees paid by Edison pursuant to paragraph 5.

Detions After Five Years The subsidiary sh'all agree to o for to Edison the fol-lowing options, exercisable by Edison (after hearings and approval '

by the ICC) no later than July 1,1991, relating to Edison's right l

l to purchase p'over from the Subsidiary following June 30, 1992:

a. Edison may purchase power from the subsidiary when and as available for a period of 20 years at prices l

l subject to FERC jurisdiction and *

! have the " favored nations" rights

( set forth in Attachment E attached hereto. (Nothing contained herein shall be deemed to deprive the ICC of any authority it may have to approve contracts for purchase of' such power or to review the prudence cf such 1 purchases); or

b. Edison may contract to purchase not less than the entire amount of the output of Byron Unit II for the remainder of its useful life and e such amount of power (in blocks of 100 megawatts) from Braidwood I as Edison shall designate at the time of exercise of this option, over the remainder of that Unit's useful life. such power shall be sold at rates determined using traditional net original cost rate base / rate of return regulation and accounting for fuel and all other costs of produc-tion, all as determined by the FERC from time to time. The Illinois retail share of the costs thereof shall be fully reflected in Edison's retail revenue requirement in any proceeding before the ICC to deter-mine Edison's retail rates. If 11

Edison has elected to purchase any amounts of power from Braidwood I pursuant to this option (b), Edison I

' may, effective on July 1, 1997 or, if option (c) has been exercised, on July 1, 2000, reduce the amounts of power (in blocks of 100 '

megawatts) from Braidwood I which it must purchase, by giving notice of such reduction 12 months prior to the effective date, (If Edison exercises the option to purchase the entire output of Braidwood II and l option (c has been exercised, Edison can)not reduce the amounts of power' purchased from Braidwood I on July 1, 2000. ) The amount charged to Edison will be reduced to reflect

, this reduction, and the Illinois retail share of these lower costs shall be reflected in Edison's retail revenue requirement in any proceeding before the ICC to deter- -

mine Edison's retail rates.

If Edison exercises this option (b) and has not reduced the amount of power it has elected to purchase from Braidwood Unit I, it shall have a further option, exercisable on .

December 1, 1998, to purchase not less tha.n the entire ou'tput of Braidwood II during the period January 1, 2000 through the remain-der of its useful life. If Edison elects to purchase such output, the rate Edison will pay therefor shall be the greater of (1) the market value of power as determined with reference to third party, arms length, long term firm power pur-chase contracts commencing approxi-mately January, 2000, or (2) prices determined using traditional not original cost rate base / rate of return regulation and accounting for fuel and all other costs of produc-tion, all as determined by the FERC.

The Illinois retail share of the costs of any output so purchased shall be fully reflected in Edison's retail revenue requirement in any proceeding before the ICC to deter-aine Edison's retail rates.

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For purposes of traditional not I

original cost rate base / rate of return replation whenever provided for in this option b, rate base shall be calculated after deducting the applicable portion of the not less than $550 million write-off specified in Paragraph 1; or

c. Edison may defer the election of options (a) or (b) until July 1, 1994, in which case it shall be entitled to a one-time retail rate increase beginning on July 1, 1992.

The increase will be accomplished by applying a uniform percentage increase to base rates then in

- effect. The percentage increase will be the lasser of i) one-half of the cumulative increase in the Consumer Price Index for All Urban consumers, published monthly by the i U.S. Department of Labor Bureau of '

statistics, for chica

' Northwestern Indiana,go, Illinois1,--

from April 1987' to April 1,1992, or 11) 7.5 percent.

If Edison elects this option (c), -

the $55 million monthly fee payable to Par,the Subsidiary agraph pursuant 5 shall be adjustedto to this reflect the full amount of the increase, and the output and capaci-ty Guarantee provisions of this Paragraph 5 shall not apply during the period of the extension. In the

' event that this option (c) is exer-cised, then the deadline for axer-cising options (a) or (b) shall be extended to and including July 1, 1994.

Edison will select one of the above options as directed by the ICC.

It is understood and agreed that the right to exer-cise options (a), (b) and (c) above, or any part of them, is to be Edison's under its agreement with the Subsidiary, but the determi-nation of whether or not such options should be exercised for the i

benefit of Edison's ratepayers shall rest with the ICC and the ICC shall direct Edison with regard to said options. From time to time Edison will institute proceedings before the ICC to obtain its direction and authority to exercise (or not exercise) such options within the time frame permitted for the exercise of said options.

Nothing herein shall be cor.etrued as granting the ICC authority to direct Edison with respect to the amount of power it is to purchase under. option (a) .

If the FERC declines to make the determinations required under option -(a), if any, and option .(b), then the ICC will be requested to make such determinations.

If the Comnission fails to. direct Edison as to whfch option it is to elect on or before July 1, 1991 (or if option (c) i is elected by July 3,1991, and the Commission subsequently fails to further direct Edison with regard to the election of options (a) or (b) on or before July 1,1994) and Edison has filed with the ICC a request'for direction no later than 12 months prior to the date in question:

(1) Edison shall be deemed to have elected to contract to purchase the entire output of Byron 7T for the remainder of its useful life and 50% of tae entire output of Braidwood I for the remainder or its useful life, all effective as of the termi-nation of the Rate Moratorium Period; (ii) Edison shall this Memorandum; have no further options under and (iii) The rates for power contracted for pursuant to subparagraph (i) above shall be determined as provided above with respect to output of Byron II and Braidwood I contracted for under option (b).

REGULATORY AND JUDICIAL ACTIONS

6. Edison's obligations under this Memorandum are dependent upon the regulatory. and judicial actions referred to below:

A.

Illinois May before Commerce 1, 1987.Commission Action to be taken t

(i) Authorization of creation of the Subsidiary and transfer of _the Units and permits and licenses related thereto to the subsidiary.

(ii Approval of agreements between Edison a)nd the subsidiary under which Edison will complete construction of the Units and operate the Units and purchase power from the subsidiary.

(iii) Authorization for Edison to invest

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in the subsidiary, from time to time, as l

required to assure proper maintenance and operation of the Units.

, (iv) Release of Edison from any obliga-tien it has to complete the Units pursuant to l

l prior orders of the Commission,

'(v) Authorization for Edison to paran-tee the subsidiary's obligations and liabilit-ies with respect to safe operation of the '

Units.

(vi) Approval of rates reflecting the

'. rate increase provided for in the first four sentences of Paragraph 3 hereof, including any necessary waiver of General Order 210.

(vii) Approval of a suitable modification in Rider 19 to limit its availability in the a case facilities.

of changes in ownership of existing (viii) A statement of intention not to oppose any reasonable proposal by Edison during the Initial Rate Period to refinance securities or otherwise to revise its capital structure so as to enhance the position of its stockholders within the framework of the revenues allowed Edison during the Initial l

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. o Rate Period under this Memorandum, it being understood that any such action is not binding on a determination of revenue requirements in any subsequent rate proceeding.

(ix) A statement of intention to refrain from reducing Edison's rates or revenues during the Initial Rate Period, unless re-quested to do so by Edison.

s (x) . satisfactory resolution of the fol-lowing commission matters so that Edison may charge the rates provided for in this Memoran-dum and consummate the transactionp described herein and.is not required to make any refunds in respect of past charges:

(a) Braidwood construction case (b) staff investigation into Edi-son's future rates (c) staff investigation into effect of the 1986 tax reform act as to Edison

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(d) pending Rate 1 restructuring (e) notice of inquiry into excess capacity (it being understood that it shall be a satisfactory '

. , resolution for this purpose if the commission's determination has no application to Edison for the term of the Initial Rate Period or as its capacity may be deemed to be affected by purchases pursuant to option b

, of Paragraph 5. Bowever, i nothing herein shall preclude '

an excess capacity inquiry or adjustment at such time as l Edison has acquired (through construction, joint ownership or purchase) capacity in addi-tion to existing capacity and capacity acquired through the exercise of option (b) of Paragraph 5.)

(f) pending fuel reconciliation proceedings

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(g) pending audits pertaining to Byron II and Braidwood I (h) Uniform fuel clause proceed-4 ings (it being understood that .

satisfactory resolution would preserve Edison's fuel clause

- in essentially its present form [with modifications re-quired under this agreement) for the Initial mate Period including the right of the Commission to require Edison to operate on an economic dispatch basis). It is further agreed that during the Initial Rate

• ' Period Edison will not be re-quired or permitted to recover purchased power demand charges or fixed fees for purchased power through the fuel clause.

B. TimelygrantofNuclearRegulatoryCommisskon approval of transfer of the Units and their if-g conses to the Subsidiary.

C.

Timely grant of any necessary FERC approval of the rates and transactions provided for in this Memo-randum.

D.

Judicial action having the effect of affirming the i Commission's July,1984, and October,1985, Edison rate orders in their entirety.

E.

Timely acticn by the Securities and Exchange Cor-mission confirming that Edison will remain exempt from the registration requirements of the Public Utility Holding Company Act of 1935.

F. Any other governmental action required as of Ju-ly 1, 1987 for consummation of the transactions provided for in this Memorandum will be taken in a timely manner.

COMMITMENTS OF TEE PARTIES 'k 7.

Edison commits to use its best efforts to accom-plish the regulatory and judicial actions described in Paragraph 6 as promptly as practicable and will institute proceedings in

furtherance thereof before the Icc to implement the provisions of this Memorandum on or before February 6, 1987. The other parties to the Memorandum agree to support the terms of this Memorandum in any proceeding in which they are participants before the 2cc, the NRC and the FERc. The parties agree that for the Initial Rate Period they will not take any action (whether before a regulatory body, the General Assembly or any other le'gislative body, or any court) that would prevent or require the undoing of any of the transactions contemplated by this agreement, it being understood, however, that- in Supreme ccurt Docket No. 63747, Peoole 21 ths State af Illinois ax r.nl Emil I. Hartigan, Attorney General y.

Illinois corzerce coraission And Commonwealth Edisen SSERanX, the parties have presented their positions and have the discretion to I

determine what action to take in that case. The parties other than Edison upon proper notice authorize Edison to represent on their behalf before any regulatory body or court that they are signatories to 'thls agreement and have agreed to the regulatory action described in Paragraph 6. The parties recognize that s

Edison's agreement to limit the level of its rates or otherwise to

, adhere to the terms hereof is conditioned upon compliance with this Paragraph 7 by all other parties hereto. Edison's failure to accomplish the implementation of the settlement on or before September 1, 1987 shall discharge the parties hereto from all obligations with respect to the regulatory and judicial actions set out in Paragraph 6 hereof, provided, however,- that if Edison has extended the termination date set forth in Paragraph 8 to a N date later than September 1, 1987, then such later data shall be '

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l substituted for september 1, 1987 in this sentence. It is further understood that the parties may participate in generic dockets related to the subjects specified in subparagraphs A(x)(e) and (h) of Paragraph 6 hereof. However, the results produced by these  !

dockets shall not be used by any party in conflict with the representations related thereto in this Paragraph 7.

GENERAL 8.

This understanding shall terminate if all regula-tory and judicial action contemplated herein has not occurred prior to July 1, 1987, except as otherwise provided in this Para-graph 8. Edison shall have the right to extend the deadline for s

or waive any such action, subject to the limitations herein con-tained. During the period of any such extension, Edison's rates l

t shall provide for charges no higher than the greater of (i) charges permitted under Edison's rates now in effect, or (ii) u charges under s'ch rates as they may be changed under Paragraph 2 or 3 hereof. No such extension shall operate to extend the termi-nation date of the Rate Moretorium Period, or the date by which pptions in Paragraph 5 may be exercised. No such waiver shall permit Edison to place in effect any rates which provide for charges higher than the greater of (i) charges permitted under i

Edison's rates now in effect, or (ii) charges under such rates as they any be changed under Paragraph 2 or 3 hereof. If Edison extends any deadline pursuant to this Paragraph 8, and this under-standing, nonetheless, thereafter terminates because regulatory or judicial action conte = plated herein has not occurred prior to the

extended deadline, its rates now in effect shall be reinstated as of the date of termination. No such extension shall expire later than December 31, 1987. In addition, in the case of such a termi-nation, if during the period of the extension Edison places in effect a general rate increase, the output Guarantee provided under Paragraph 5 shall be considered to be in effect _during such period.

For that purpose the amount of output guaranteed shall be equal to 33 1/3 gigavatthours multiplied by the number of days the increase is in effect and the maximum fuel adjustment clause credit will be equal to $1,833,333 aultiplied by such number of days.

This understanding shall not be construed as preventing.

Edison from filing for a rate increase in respect of its inykst-ment in and operating and maintenance costs associated with i Byron II and Braidwood I and II prior to July 1, 1987, nor shall it operate to prevent the parties from contesting such applica-tion.

No increase which may result from any application permitted by the precedin'g hentence shall become effective during the period l "

of any extension of the July 1, 1987 deadline. Any such applica-

{ tion for an increase will be withdrawn if the necessary regulatory Jand judicial action has taken place by July 1, 1987 as that date may be extended as provided in this Paragraph 8.

9.

In addition to Edison's other rights in respect of any failure to meet the conditions to its obligations hereunder, (a) if, prior to the time the regulatory and judicial actions specified in Paragraph 6 occur, in Edison's reasonable judgment it appears likely that any governmental action provided for herein l will not be taken within the time specified in Paragraph 8 (other

than because of Edison's fault), or (b) thereafter if Edison and at least two of the other parties to this Memorandum believe it

)

likely that any such action will be invalidated, in whole or in part, Edison may terminate the understandings embodied herein and

)

if Edison has already conveyed the Units to the Subsidiary, Edison shall have the right to cause the subsidiary to reconvey the Units to Edison. The ICC order approving the conveyance to the subsid-iary shall contain appropriate provisions approving such a recon-voyance.

Any such reconveyance shall be without prejudice to any party's rights to cppose and to raise all arguments and positions and to pursue procedures provided by law or regulation regarding "ratabasing" the Units and reflecting their costs in rates.

10. The obligations of the signatories to this Memoran-I dum are also conditioned upon the establishment and continued effective, ness of rates consistent with this Memorandum throughout the Initial Rate Period.

l 11. kn disputes over the interpretation of this Memo-randum will be committed to the respective regulatery agency having jurisdiction over the subject matter. #

, 12. The parties agree that any FERC-mandated modifica-tions, alterations, amendments or changes to any component of the rate provided for in this Memorandum, the Power supply Agreement or any other governing document, or the terms or conditions there-of, shall not constitute a basis for a change in retail rates during the Initial Rate Period. This provision shall not be construed as modifying or in any manner limiting the condition imposed in Paragraph 6C.

13.

Edison agrees to take any action necessary to ensure that the Subsidiary, with respect to its own obligations, shall be bound by this Memorandum as if it were an original signa-tory.

Edison will furnish evidence of the subsidiary's acceptance of the terms of this Memorandum.

Membrandum of Understanding dated this 14d '0 day of February, 1987.

Commonwealth Edison Company I

. By Xk.n < VJ l(bhr1 fakes 4 O'Connor, thairman m

/

'l Memorandum of Understanding dated this day of February, 1987.

James R. Thompson, Governor, on behalf of the People of the State of Illinois By I

e

. s l

9 9

. ~

Memorandum of Understanding dated this i 1day of February, 1987.

Neil T. Hartigan, Attorney General, on be alf of the People of the State ,

of[,~Illinois

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By / -

• \

, G.

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/

l

~

Memorandum of Understanding dated this d day of February, 1987.

Richard M. Daley, state's Attorney, on behalf of the People of cook county, Illinois 2- '

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r e g

/

D

i Memorandum of Understanding dated this Z d d ay of February, 1987.

The Illinois Industrial Energy Consumers (IIEC) Party Intervano in Docket 86-0249 By /:

• -lh/f RANDALL ROBERTSO)(

Attorney for IIEC t

o 9

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• s

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l

Memorandum of Understanding dated this day of Februa ry,1987.

The Governor's Office of Consumer Services BY M /4 /4

, Alvin K. Grandys, Ph.D. /

Director l \

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. g e

1

Memorandum of Understanding dated thir b day of February, 1987.

The Small Business Utility Advocate D

By a _

William G,f d 4

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2 .

Attachment A

• ELECTRICrn' For the Oises and Vannes aimed o' ILI.,C.C.No 4

. Cominonetelth Shoes km. 4 3, Si 7 and 3 Rettsed Sewes he. 9 Edison Company and ihe meenpesied emugueus estruary RATE 1. RESIDENTIAL SERVICE Avellabbitf.

Th.s enie is eveDehle to any assierner useg ee Company's elseme servise for senadenal purposes

. Charge.

• Monahly Cussesner Charge.

. July k 1987 Thnush Jammary I.19e9 Demusiker 31,1988 and AAer i

For Cwiemer sesides in:

A buDd.r.3 esmamms 3 or more d elkna usu. . . . . . . . . . . . . . . . . . . . . S 3J0 'S 3.45 A huGdm8 eenismes I er 2 dweihng meu . . . . . . . . . . . . . . . . . . . . . . . . S 9.10 $ B.36 BuDengs emininins I er 2 dweDes mas shau melude, but ne he hmiisd so, savowes_ emmmenly serened is as single femay danached houses. single femay esached besses som houses. town housas, senih hemmes, duplanes, two.

Sau, and two famDy homes. .

On Dienber 10. 1964, the Carpeny had .ssigned aB arisnes Rate I ereuners to one of die sharge elassmenuens dancribed shows. If any of these amamers aforms the Compary that this anisial elessificauen is beorrea, the Campan3. span serificoden. wiD plass the ausiomer h te approprisis classifiatam he will aos isess my sensis

• Emergy Charge.

July 1,1987 Through Jaamary I 1989 Desucher 31.1988 and AAer M

.! Onese per kilowenhaar for fes 400 kilossuhour i appLed a the man 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II.96ss llJe95s Qarge per kDomeuhour for eD kilo auhours over 400 appbed a the men 4. . . . . . . . . . . . . . . . . . g . . . . . . . . . . . . . . . . . . . l&730r 13 102s 4

fkhee %(anthe Qargeter kilowouhsur for fes 400 hdommuhoun ,

apphed m the em4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. tees

• llM5s Charge per kilowouhaur for au kUowenhows e.ar 400 appbed a the mm4. .,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $J02e $J06 ,

For the pwpous honof, the $wnmer Manihs she he sie estener's Srs methly bEleg gened trish e adog meer sendag data e er afwr Jens 13 and the ihree aussesdag smely hdies pened6 l

The fuel adjusenen dierge er seda primded for bi Radar 20 shd apply is aD kile=atahaisi suppbed h die month-i Lose Popneet Cheese.

I The Inne paymet sharge primdad for h the Terms ed Condauens of this $shessle of Ranes shad be appbashie to aD aberges oder this suse.

IJght Besik Sersite.

The show sherses do nei include light hulk earvies The sharge for such servia shad be R174e per kDo.eeheur for the f.ni 300 kDe=enheurs sippLed in ihe mone.1;shi hulb servier is dasenhed a Rader 10 and is apuanal wish the asemer.

heinimum Charge.

The minenesa nomihly sharge shad be the Maihly Cusioner Charge Term erServies.

The ensenemer's anna of servies shall esmmenes when the Campany bases to supply earvise hoseeder aid shad essunut noi amore than isn days aher nouse is sessived to discaiunut estviet Three. Phase Sersies.

ThreeWas servies is eveDahle onder diis soie. Where e threeWas sessadery apply is ses oveDahle fress the Company's disinhuden tystem adyseem to the assiemer's properr) te essassary pnrnary and nesendary entensions wiD be fumished try the Carpany schjem to te provisions of R.de' 2 (Canunued on Shas No 10)

Date E#ecthe: Jul) 3.1937 Asterisk (*) indicsies chang, lewd b; C. F. Rifakes. V6:e Preident, Pos otr.ce Des 767.Qscago, khnois e0690

_ _ __ - _ _ _ _,_ ,___ - _ -. -~ - - - - - - - - -

l l

. l Atthch'n2r.t B ELECTiticITY Commonurelih For the Chis and Yusses used en ILL.C.C.So 4

• , Sheets has. 4,5. O and 3

, LIWm Company Rulerd sawei No. 24 ;

and the uneenrperewd ammigueus umiery RATE 6. GENERAL SERVICE Applicabihty.,

Eacept as po.ided isi Reie 6L. eis een is applicable to any emmenereast indestria!. er govemmental sumamer sie a himen Demed of less than 1.000 kilo aus who uses the Company's elecmc earvise hereunder for d seapsiseme Direa meren: sequaemenu povided under eneeher ease esenadiataly pior no Sepamber 2.1975 wiu. he ever, also be Pmded hereundar Geerst Servlee -Thee af Day.

Tme of day shstges shan apply no (1) any customer with e Maaimurn Demand of SID kinswens. he less then I 000 kDonetts.

in ihme of the 12 menes peosdeg the hues mene, me af which esser during the thsee menshs pesades the h&ng mene. Q) sucesssers to maammers arrwd under thsas sharges ' ' "i pner as the esas of sneenesien whene esammed Manunen Demands meet the demand sequusmenu in alsuse (I) show. O) erw easteners whose eenmated Manasnurr Demands meet the demsid sequirements in eleuse (1) above. and (4) my.senemer penamely hiBad homendst pa slauses (1) er Q1 eseep as eserwise povided below.

These sharges ehd act he applicable so ensiemers er their aussessors wish elaaric spese hesisig taking errvies under the 4 Haanns enh Laghi provaseen

• of Ander 25 pner no November 23.1977. enerpt span wrism appbcanon by the aussemer to the Campany.

If a asioner et one time was served pursunni no (1) above en Guere! Servies - Tone of Day ed has e Masirmum Demand which has mes essended 200 kilomans in any more of the twelve snene period peandmg the hiDs93 mee, such sunener may elect. in wriuen apphcauen to the Carnparry. to be served en Genern! Service. Gensief $stvice - Tune of Dey shd een agaan he apphcabh arnJ such m iemer quaLTies for such esse under she sepseemens of Gene! 5 rve: - Tme of Dey.

General Senke.

Geere! servia charges shd app?y to aU esher estamers qualifying for servise oder this sein.

Charge.

Generet Senire - Tkne of Ds).

• Monthly casemer Charge.

The hihiy Cusioner Charge shaB he 319J9.

• Danand Charge.

Semaner All Othcr

! Menans Months 515.06 W per kilossu for an kilowems of Maasses W for the meesh.

) For se M hereof. ihe summer Menes shsU he the astener's fires needdy hang period wiih an ending swier me i

date se er after Joe 13 and the ihree suceanens sumiddy hang paneds.

• Emergy Charge.

4360c*per llBowenhet for d kJeweehears supphed during Punk Fesu 3.Ille per kilowauhaar for d kBowethers esppieed esas Of Punk Perieda The fuel edpsenet eherge er wedd pudsd for es Radar 20 shad app!y to eB kuswenhem agplied a the month.

General Senere.

• Monthly Costumer Charge.

The hihly Castamer Charge sh:2 be 59.3!.

• Demand Charge.

/ Sommer All Other Meaths Months

$15.0b 311.72 per kile=an for an kDowens of Maaseen Dunend for the manih.

For se poposes hereof. the suminer hes shnu be se eussener's firn monely hang period with an endes meter read r's due en er afier Jee 15 and the ihree succeedes menihly hGLng penods.

• In eteerdense wnh me AppLeone of Demand 04rge revisions of this mee, there shad be ao dernand sharge es such for seriam smd sustomers, but in heu eereof such sustomers ehd pay 4.409s per hinewenhas is Summer Months and

$#17s per hile=anheur a an aber snenes si addson to the surgy sharges ses lenh halom.

• Emergy Charge.

Elseweatheurs Seppsedlethe blanth

$ 130e per kJousthme for me fast .............................. 30.0T 3.9f?s per kDo.inheur for the next .............................. 470.000 3 93de per kao.inhour for au ever .............................. 500.000 The fuel adpsvnent charge or creda proNed for et Rider 20 shat apply to aU kilomanheurs suppLed in the men

• 1 l (Conunued en Sheet No. 2.')

l Date Etrecthe: Jety L im l Asterisk (*) ladicates change Isued b; C. P. lufskes. Vice Prea Peer Orrice to 767, Chicago,Innes 9 -s

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e A

ELECTalCTTY I R.L C. C.We e i

ForSaeets the Clites andmea Nes 4.sa Venia3se leied em new we u am as loin n,..es sae,i se 35, i Cosmosseafib sed the venneerporaud eent.svous ternter3 ICserett Nison Company RATE 4. GENT.RAL SERVICE 1 (Continued frees 5 hat No 34)

Laer Peyment sharge.

' The late payment aberge revided for in the Terms and Coodrtices of this Sebedule of Ratas sha!! he opp under this rau Igialmen Charge.

The minimum monthly abarge shall be & monthly eustomer ebarge

'ttanteen gharge.

For customers with demand swim. the averap eest of etertneity benunder is any meeth, etelusive of the Customer Charge, sha!! not esmd the sum of !# 706e and the feel ad;ustment per kilowateour peevided. b euch guaranteed charge sha!! not opraw to redues the Customer's bin to an amount lens than the minim f

tiesJean Demand.

For General service-Time of Day custoewn.the masimum demand in say month shall be the highest m tabhshed dunas the penL pnods in such morth For General servin customers.the estimum demed shall be the hisbest Sainute de Appheetles of Demand Charge.

The Company shall provide a demand neur sed the demand ebery shnu apply obes a sustomer's 3 me eseeeds 2.000 blematthem na eneb of too suemsive meeth!) bilbag pnede or if his matinum demand kilosatthout use is asummd as in eteens of ten kilooetta er 2A00 kileesttheure.sespectively. Any eusto l demand charp would not ordinanly apply under the fmgoing eestesa, may.at has request and upon I

pnete meter renuts. he provided eith a demand meter sad billed than 12 months unless be beeomm entitled to a demand meter pner to the end of the 13. month pne entitled to a demand meter shall not be reqmrod to pay neul er other separate abarges for such meter t* ' Whethet er set a demand meter is issuhd. the charge is beu of demand ebarp abaN apply to any sustemet, es temer paying natal for a demand meter in secordanet mth the foregoing paragraph. whose us

• blosattbom and abooe manimuro demand has not eseseded ten kilosstu is any neath of the proced and shan sentinue se appt> until the Custeiner's use esmde 2.000 kaneesttheurs is two suevensive m t bas demand esseeds ten kilosstu as too sueressive seatbly bilhas peneds l

'blessenmeet of Demand and Kliewertheare Sepplied.

When too or mon metenng insulletsons m pmided en the Catemer's premisse the demand is sm) Em be determined by add ng together the separate demands at eerb mesenas instalistise dunas such Es.ne that (a) na came the demand at ae) metenns insu!!ation is ngisured by as indsesting er eussistive demand at euch issu!1 sties is each Eminuu pried of an) meeth shall be aneumed to be the name a la any Eminute pened of such moeth,and (b) the demand at any installatsoa may be assumed t semd lead af eveb emenerned feed as two hileworta er has. and seeb demand then are too er snen eattbour emnts insultations se the Customer's pnmises.the kileosttbom ovppled s maned by adding together the kileeattbours metered at seeb installaties. provided that ebm the instahtien eseced 6.400 in the bilhng meeth and m not meured sa euch a manner as to permit dete dunas obich they een delivend, for purpense of applying the tsee of day proviseems of this r he seasidmd to have been dehvmd sa peak penods If the energv use at even ineuhtiesdis $300 blo the bilhng mor>th. a eba'ge of g 021e per kdeoathur aball apply to sueb kilowatthem The matanu halotatthem supphed for too et men ynmasas eiu met be sembined for hi!Las perpenas benunder.

L*pon wguest, slw Cospar) mil provide snmetered servin for sensected leads set esecedsag t of the Cussesser's envipment is sentamuous er is regularly orbeduled se an annual basis For saan, the monthly bloestthours abaff be determined by multiptynns the reted enttay (based sp apprognau data) of the senserted lesde by one teelfth of the annual hours of operaties an blem atthours dehvered te as untneund point of eupply shall be seasidered to have been dehver (Cer.tinued et $ beet No St)

Deze Einri.e Orteber to, loin

• Filed olth the flusens Commem Commismo se Ortsber 84.1981 lessed b G F Manes %sa presidesi.

lessed persaaet is Order of Immens Casseree Fast OSn ben fgt.Charsge.Immeu Hete 844881 and 834831 Cosmassies estered October 14.1985 la Case hm Asienst (*# ladiesnes ebange km. ,,

e *.

. ,

• Attach.ent 0 ELECTRICfTY For the Osie and vuence used en ILI C.C.No.4

,. Commonuenlah Shesis No. 4, S. s. 7 and e Edison Company Reised Sheet N 2a and the innssyneed ese,guous essmwy l

RATE 6L LARGE GENERAL SERVICE Applicobillt).

TMs rate is egyLcable no (1) any senmerca!. bidesinal, er geenunama! essesmer whh a Maasnisn Dunand of IJWO kilowea er from in three of the 12 months precedeg the haleg mene. Q) sucessesre to assiemess served endet tese shages immedauly prior to the deu of oneesssion whose estamaiad Matanen Demands meet te demand sequvements in slause (1 above. O) men ensiemers whose eenmated Mansnum Demands mass es demand sugevemens in elause 0) shoe. and (

essemer prevenly hilled temunder pwouana is shoes 0) er (2). eassys as eherwin pseeded halow.

If a ausiener at one esme was served pursuant to (1) sho=: a Large Genere! Serviss-Tene of Day ad has e Masimen Demand which has not enesaded 200 kilowess in my month of the 12 mamah pmed psessess te hdag mensk. sash essener may elac. m enaan appbmuss es the Company, to be served en Rene 6. Gammal asmas. Rane 61. Imge Gemsel Samse Tene of Dsy. &all est agaan he appbeshie on! such meiener qualte for mah see under ehma 0) absue.

The large Genere! Servise-Nass whh Ushi eheran ehd he appbehle esdy as amesmese er esir sammessers whh einseric s beanng enkms servier eder she Hanns wuh Ush: Psovis.es of Rader 25 pner is Neuunhar 23.1977.

i A large Gmern! Service-Heat wie Ushi muerner will he alle=ed to take Large Osamm1 Servie-Tene of Dey service upon ennen apphcanes to the Campany. Once changed to Large Genem! Servise-Tune of Day servies, these sensmeri or ihw sussassors w21 met he eBowed to senum ao large Gensen! Serviss -Hast whh UshL Charges Large General Servise .Thne of Day.

• Meathl; Cusioener Charat The Menihly Cenomer Owge shd be 1547.06 -

• Demand Charge.

Essernam of. ,

Senauer As Other Massman Demand 3

Months Months sur te Mandi 513.06 311.77 per kilo au for the fait ............................. HIJ100 633 3.06 per kilo au for au est ............................. 30J100 For she pwposes hereof. the Senener Months ehd be the sumsmer's Arst meeldy hillsig parwal mis e andag swear sending enie og er after June 15 md the ihme sussending membly hilles penads.

• Energy Qarge. *

' d $ dos par kilo auhaar for at kRoushows suppbed desig Funk Penads 3 IIIe,per paebour for at kGosnshours suppbed dweg Off.Psak Persed i

The fuel adjusenet sharge er seda primdad for hi Rader 20 shd apply to aD kilswnshows espphed bi the monik I.arge General Servlee-Pet wish Ught

• Menthly Customer Chargt he Meely Cusierner Garge shd he $547.06

• Demand Qarge.

1. 8emmer As Other Menins Maths

$13.06 311.77 per kilowen for eD kiloesus of Mananum Deand for the menih.

For the pwposes hereof, she Summer Mauhs ahd be she annamer's faris memhty huhns period wiih si edes swear mad.ra data en er afar June 15 and the ihree succending senddy hiums paneds.

• Emerg7 Qorge.

EBeweetheers Seppsed in she Mont 5.130s per kao.sahart for she fas ................................. 30.000 3 937e per k Do neheur for the su.at . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ff0.000 3.934 : pe r kDo sahour for d over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300.000 The fun! adjunimeni charge er creda pnmded for si Rder 20 shd sjyly to d kilos neoun suppbed in the meuh (Corund as Sheet No. 29)

Date ENaties. July 1.193:

Asterisk (*) indicasse chang, laved by & P. h, W holdent pos Ofrece les 767. Qicago. Dianois 60e96

- ,,,,- w.--w,e.,.wp-,--,.,---, y,,y --m-,__43 y ,, ,w_,.y _ _ _ , , , , , ey,, -,,_,_ _ _ __v, _ _ _ _ _ _ _ _ _ . _

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ELECTRICffY _

. For Se Cttle and Vilnsge stead on ILI C.C.No.4 Commeewealth Sness Nes. d S. d. 7 and 3 i 2ht Re=ted Snest No. 29 and the memepersed sema. nous umieay (Canadag 2M Revned 5 hem No 05)

Edison Company l RATE 6L. LARGE GENERAL SERYlCE

' \

(Camand fem Shen No 28)  !

l Este Permes Charge. 1 The Inu pymesa sharge providad for a ihe Tems ed Candguns of M Senduls of Raans ahd he appleashls to all charges l indst his sess.

I I Minimenn Charge.

1hs ainsman meshh eherge shd be als moedy unener charge.

Maelmune Charge. l The evange en af elastncity hermedet in my mea aclusive of ibe Meriihty Cansmer Oerge, shd aes samed the sum d 19,736s and the fuel adjusment pr kDemanhos providad. however eat seek guaranised sharge shd not opina is, enhus es Chasme's halis as seamu less than the esiireen shasse.

• Mammuun Dunand.

Esamps e asud h the paragriph hale.. $a maabnen demand h any sens ehd he the highen 36minuu demand enablished during es peak pmeds b such mens serps thai, for messmeri wis 30einuu demands eneeedes 1.$00 kDoomu in ihms of the 12 s en$s ymandrg es hLrs mens. the maaimum demand sha'.) he the everige of the erst highen 30eines demanda eruushed durmg the peak priods in sus mens not pers than one such demand to ha salsand from my me day.

For assiemers taking servia mest Large Genern! Servies Hesdng wish LJahi provisie of this seis the mannese demand shall be the highen 3&sinuis demand enehLabsd at my tiene during sed mens asesp eat, ser ennsmers wis 30ehen dunands amendeg 1.500 kile su h three of es 12 membs preendeg es hihg mens. she maairmen demand abau he es overage of the tres highest denside esisEshed dunns the merah, est pers chas ans each duimd to be asleasd frern esy mis day.

Mansorument of Demand and Kaewettheurs SuppHed.

When two er mars meuring hamusvens are prended en te Consme(s premises, abe dunand in any 30.mbes pried shd he deurmined by adding ingeAer the espnte demands at each meanns innathGen eering each 30eousu parted onesp

&as (s) a ease the demand na any esarrg insulladen is saginered by as bdeenGng er annufsive emnand meur. $e demand a such inna11snan a each 30einem priod of any math shall be essened is he the same as ilm highest demand l In my 30 myivu pried er such ment. and (b) de demand as any hadaGen may be asenned is hs 75 prem: of te eunnaamd lead if such seeruand lead is two kDessas er isss and sush demand is is he added to e asund demand. Mars tes are two or more weeart asuring inndsdans. the kDeustikeun supplied shad be doennhied by endog angenhor es kDemaresure meisrud si each knaDada. providad has whsse the kDveeshaari a any me innaDados moned 5.500 in the hines memn and ses ses svuured b nesh a mannst as to prmit dassnahansa af the hours doing which they sitt

• dalivered, for preposes of oppf3e ' g the esmeefdsy provisions of n mas, ensk haoweeheurs shad be sensidered to base base d Lvered in peak priods If the me'sy su et such inndeuse is 3.500 kDowenheurs or less in the ha:eg memh. e eheres of 4.021s pr kilo.a:$eur shd opp!> is such haema:$aari. Tha maaimen durands and LDemaahours supphed for two er meri peanses wiH ees he camband for hilhng paposes bassader.

Lipes sequest. 6e"Canyany wC) provies enmesed servies for annened leads esa amendhg two kDowess there spemtien of the Cananer's equyment is eunuevous er is regularly esNduled on en suenal basis. per the peysees of hilleg h such mess. ihe siesthly kDoweatheurs shall be ensemead by maksplying te sensd wasuge Onesed spun nameplau er enhet syproprime deu) of emnsand Inds by erudwelhh of the annual hours of spress and 6vidag by lA00 AD haowenheen enhvesed is en mesured pava of espp'y ahd he seussered is have hem dehvind dehg pont pried 6 i

' Sarvtes Feegliest A mandard kndenen feminhed by se Campany be,medst shd he daurmined by es psevisisms of the Campany's Rider 6 mesp the: 6e fecasus se providad es sunderd shd he edaquu erify is orpply earvies se e imod equalis the maasnen 30

! minns demand of the Custaner seuWahed during the peak pensa Il larger feeDassa eri seguired is eerse es omse of te eN.pnak demand over the peak demand, the Casismer shd pry, as epsenal feeilsnes b esserdanes wis du Companis 2

Radar 6. the east of any fuihues se required However se spuma! feeDeues sharges shd apply se fasiksas animes and i b plass as se isru the Cunener yealifies for wriin herament 41 (Cannnus4 an 5%est No 30) yhed ete the attness Commeres Commision em Oseber 17.193d Dose Enesthe: Deeenhar 1.1933 Assertsk P) Amentas change Inved by G.P.RJfdek %n Preident.

Fest Omn los 767.Disage. Bhnsts 40690

h. .. _ . . .

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4

Attachment D The amount of the credit which is to be made in respect of either Byron II or Braidwood I Unit if it meets the criteria for capacity guarantee credits set forth in Paragraph 5 of the Memorandum of Understanding shall be determined by making the calculations described below. ,

)

A. From the aggregate amount of fixed fees paid

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pursuant to Paragraph 5 of the Memorandum of Understanding there shall be subtracted the aggregate amount of credits made pursuant to that Paragraph (net of the aggregate amount of Edison's share of the shared savings).

I B. The result of the calculation made under paragraph A shall be multiplied by 0.35.

! C. 'The result of the calculation made under i

paragrap,h a shall be multiplied by a fraction, l the numerator of which is the difference in gigawatthours between the cumulative actual output of the Unit as of June 30, 1992, and 25,274 and the denominator of which is 25,274. This calculation in paragraph C shall be made separately for Byron II and Braidwesd I.

The result of the calculation made pursuant to paragraph c shall be the amount of the credit; provided that in no event shall the sua of the credits made under this provision and the aggregate 1

i amount of credits made pursuant to the output Guarantee in Para-graph 5 of the Memorandum of Understanding exceed the aggregate amount of fixed fees paid pursuant to Paragraph 5.

O O

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t 2

' a,.

k Attachment E "Most Favored Nations" l

During the 20-year period June 30, 1992 through June 30, 2012 Edison under option (a) in Paragraph 5 shall have the rights set forth in paragraphs (A) and (B) below.

(A) If Edison is purchasing power under a Contract with the subsidiary (" Pre-Existing Edison Contract") and the subsidiary enters into a contract to sell power to a Third Party (" Third Party Contract") which is comparable to the Pre-Existing Edison Contract, but contains more favorable prices or payment terms, Edison any elect to have the price and payment terms of the Third a Party Contract substituted for the prices and payment terms of the Pre-Existing Edison Contract. A Third Party contract shall be considered to be " comparable" only ift ,

I. . It is effective over approximately the same calen-dar time period as the Pre-Existing Edison Contract.

II. Any other difference between the terms and condi-tions of the Third Party contract (excluding price and payment terms) and those of the Pre-Existing Edison contract does not significantly affect (1) .the subsidiary's cost of providing ser-vice, (ii) the quantity or type of service to be provided, (iii) the benefits obtained by the subsidiary, or (iv) the risks under-taken by the subsidiary.

Edison shall have no right to substitute only the price SI payment terms of the Third Party contract for those of the Pre-t

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. I 4

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s  :

( Existing Edison contract, it being u dn erstood that Edison's elec- j tion under this paragraph is limited to substitution of both the payment And Price terms of the Third Party Contract for those of '

the Pre-Existing Contract.

B. If the subsidiary enters into a Third Party Con-tract and Edison advises subsidiary that it desires to purchase power under a comparable contract, the subsidiary will offer power to Edison under a comparable contract, if such power is available from the Units. For purposes of this paragraph, a contract will be considered'to be comparable to the Third Party contract only if its terms and conditions are materially the same as those of such Third Party contract excepting only such terms and conditions as do not significantly affect (i) the Subsidiary's cost of providing

( service, (ii) the quantity or type of service to be provided, (iii) the amounts, form and timing of payments, (iv) the benefits ,

obtained by the subsidiary or (v) the risks undertaken by the j subsidiary. No such comparable contract shall relieve Edison of any of its obligations under any Pre-Existing Edison Contract.

Upon the execution of any Third Party Contract, the subsidiary will give Edison notice of same and furnish copy of same to Edison within 30 days of the execution of said Third Party Contract.

2-r-~=-.-+w.w,-.- .. - - . _ -,w___,. ----- .w .,-e---,--wir..yw-,e- -,-,i

FACILITIES TRANSFER AGREEMENT commonwealth Edison Company (" Edison") and

(" Subsidiary") hereby agree as follows:

1. The conveyance of facilities which is the subject of this Agreement takes place in implementation of a Memorandum of Understanding among Commonwealth Edison Company, the Governor of the State of Illinois, the Attorney General of the State of Illinois, the State's Attorney of Cook County, the Governor's Office of Consumer Services, the Small Business Utility Advocate, and certain industrial customers of Commonwealth Edison Company who are party intervenors in a proceeding before the Illinois Commerce Commission bearing the Docket No. 86-0249. The Memorandum of Understanding entered into by the above parties contemplates the settlement of a variety of contested proceedings before the Illinois commerce Commission and the courts in which the continued construction of Braidwood Unit 2 is at issue as well as the rates which Edison will charge. The agreement conte = plates l

l the conveyance of the facilities commonly known as Byron Unit 2 and Braidwood Units 1 and 2 (collectively, the " Units") to Subsidiary. Subsidiary's rates will be regulated by the Federal Energy Regulatory Com=ission. A rate increase of approximately 13% in Edison's retail base rates with a five-year moratorium on l

rate increases thereafter is also provided for. Accordingly, Edison will convey the Units to Subsidiary. The real estate and facilities constituting the Units are more particularly described Exhibit B

i

• l l

in Appendix 1. The conveyance shall be effective as of July 1, 1987, or such later date as may be specified by Edison. In the case of Byron Unit 2 such conveyance shall include an easement for

'I the continued operation and maintenance of that Unit on the Byron Station Site described in Appendix 1.

2. The conveyance will be evidenced by suitable quitclaim deeds and such bills of sale and other documents as subsidiary may reasonably require. Where appropriate, such documents shall reflect the fact that the Units are and will remain subject to the lien of the mortgage securing Edison's first mortgage bonds. Such conveyance shall be subject to a reservation to Edison of such rights as may be necessary or appropriate, to enable Edison, as an NRC licensee, to comply with all NRC requirements, including the authority to exclude persons from the premises conveyed to subsidiary so as to meet NRC security, emergency planning and radiation protection requirements as described in Section 2.1 of the Safety Evaluation Report issued by the Nuclear Regulatory Commission ("NRC") for Byron dated February, 1982, and the Safety Evaluation Report for Braidwood dated December, 1983. Such conveyance shall also be subject to a reservation to Edison of such rights as may be necessary or appropriate to enable Edison to continue to operate and maintain facilities on the Braidwood Station Site described in Appendix 1, which will not be conveyed to subsidiary.

3. Edison will take such steps as are necessary (including seeking any required NRC approval or consent) to amend

?

or transfer its NRC licenses to Subsidiary to the extent such amendment or transfer is necessary to give Subsidiary title to the Units, the right to complete construction thereof or the right to operate the Units through Edison as its agent and sell electric power generated by the Units. Edison will provide the NRC with such assurances and guarantees as it may require in connection with the conveyance of the Units to subsidiary. Edison recognizes that the NRC may require that Edison be a primary obligor with respect to certain of subsidiary's obligations and liabilities arising out of construction, ownership or operation of the Units.

Edison will transfer any other licenses or permits relating to the Units, where necessary to enable Subsidiary to complete construction of the Units, operate them or sell power therefrom.

4. Ad valorem property taxes applicable to either the Byron Station Site and the facilities thereon or the Braidwood Station Site and the facilities thereon shall be allocated between the parties so that each bears an amount thereof in proportion to its investment in the station in question. Subsidiary shall also be liable for 50% of such taxes allocable to Byron Station common plant. Ad valorem property taxes for 1987 shall be prorated to  ;

l the date of the conveyance.

5. This Agreement shall become effective when Edison l

notifies Subsidiary that all governmental approvals and actions required by the terms of the Memorandum of Understanding between Edison and various other parties, dated February 3, 1987, have been obtained or waived by Edison. Nothing contained herein shall l

be construed as permitting Edison to waive approval by the i

-, . . - _ - - , - , - -- , ., - - ,..-- n - __

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- Illinois Commerce Commission of this Agreement or any other agree-ment between Subsidiary and Edison.

6. This Agreement is subject to approval by the Illinois commerce commission and shall only become effective upon such approval.

Executed this day of , 1987.

COMMONWEALTH EDISON COMPANY By:

Its:

(SUBSIDIARY)

By:

Its:

APPENDIX I Facilities Transfar Agreement

1. As used herein, the " Byron Station Site" is the land in ogle County conveyed by the following deeds:

Parcel 1 Warranty Dead (WD) #424625, Recorded 4-23-73, BK277, PGG6 Trustee's Dead (TR's D) #454533, Recorded 12-30-76, BK287, PG93 Quitclain Deed (QCD) #427835, Recorded 8-30-73, BK278, PG362 Parcel 2 WD #422068, Recorded 1-10-73, BK276, PG34 Parcel 3 WD #425182, Recorded 5-11-73, BK277, PG319 Parcel 4 WD #428267, Recorded 9-20-73, BK278, PG548 Parcel 5 WD $423820, Recorded 3-20-73, BK276, PG873 Parcels 6 and 20 .

WD #424166, Recorded 4-2-73, BK276, PG1040 WD #423085, Recorded 2-22-73, BK276, PG489 Parcel 7 WD #425238, Recorded 5-14-73, BK277, PG359 Parcel 8 WD #426363, Recorded 6-28-73, BK277, PG870 Parcel 9

Conservator's Dead #422066, Recorded 1-10-73, BK276, PG32 Parcel 10 l

WD #426441, Recorded 7-2-73, BK277, PG901

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

,w_, - - - - , .-, ,--y. - ~ . , - - - - , - - - - - . - - - - - , , - - . . . .--r- - , r--,-- ---

'. Parcel 11 TR's D #425183, Recorded 5-11-73, BK277, PG320 Parcel 13 WD #425179, Recorded 5-11-73, BK277, PG316 Parcel 14 WD #422159, Recorded 1-15-73, BK276, PG73 Parcel 15 WD #422158, Recorded 1-15-73, BK276, PG72 Parcel 19 WD #426182, Recorded 6-21-73, BK277, PG774 QCD #426183, Recorded 6-21-73, BK277, PG776 Parcel 21 TR's D #431590, Recorded 3-15-74, BK279, PG785 Parcel 22 WD #423572, Recorded 3-12-73, BK276, PG750 Parcel 23 WD #426439, Recorded 7-2-73, BK277, PG900 i Parcel 24 QCD #430565, Recorded 1-24-74, BK279, PG284 Parcel 25 WD in TR #423087, Recorded 2-22-73, BK276, PG493

, Parcel 26 WD in TR #423086, Recorded 2-22-73, BK276, PG491 Parcel 27 WD in TR #424181, Recorded 4-3-73, BK276, PG1048 i Parcel 28 l

TR's D #459784, Recorded 7-6-77, BK288, PG650 4

l

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

. t Parcel 29 /

WD #462001, Recorded 9-21-77, BK289, PG198 Parcel 30 WD #469580, Recorded 6-21-78, BK291, PG72 Parcel 31 TR's D #439779, Recorded 4-17-75, BK282, PG669 Parcel 32 -

WD #433435, Recorded 5-31-74, BK280, PG444 Parcel 32-1 WD #454954, Recorded 1-13-77, BK287, PG255 Parcel 33 TR's D #453474, Recorded 11-18-76, BK286, PG900 ,

)

Parcel 1RR (Railroad) '

WD #437173, Recorded 11-22-74, BK281, PG924 '

Parcel 2RR WD #438600, Recorded 2-14-75, BK282, PG256 Parcel 3RR WD #434263, Recorded 7-3-74, BK280, PG833 Parcels 4RR, 4RRA, and 4RRB WD in TR #431897, Recorded 4-1-74, BK279, PG909 WD in TR #431899, Recorded 4-1-74, BK279, PG913 TR's D #443723, Recorded 10-21-75, BK283, PG938 Parcel 5RR WD #436961, Recorded 11-12-74, BK281, PG862 1

Parcel 6RR WD #433434, Recorded 5-31-74, BK280, PG442 l

l Parcel 7RR WD #437753, Recorded 12-31-74, BK281, PG1149 QCD #437754, Recorded 12-31-74, BK281, PG1151

Parcels 8RR, 8RRA, and 8RRB WD #435594, Recorded 10-24-74, BK281, PG711 QCD #436595, Recorded 10-24-74, BK281, PG713 WD in TR #436596, Recorded 10-24-74, BK281, PG715 Parcels 9RR and 9RRA WD #438239, Recorded 1-23-75, BK282, PG145 QCD #438240, Recorded 1-23-75, BK282, PG147 WD in TR #438238, Recorded 1-23-75, BK282, PG143 Parcels 10RR, 10RRA, and 10RRB TR's D #436593, Recorded 10-24-74, BK281, PG709 WD in TR #431560, Recorded 3-14-74, BK279, PG771 Parcel 11RR WD #436592, Recorded 10-24-74, BK281, PG708 Parcel 12RR QCD #502362, Recorded 7-1-82, BK299, PG111-115

2. As used herein, the "Braidwood Station Site" is the land conveyed by the following deeds:

Parcel 1 Special WD #R73-33682, Recorded 11-7-73, Will County Parcel 2 and Parcel 1 Corridor ,

Special WD #R75-04282, Recorded 2-21-75, Will County QCD #R75-07989, Recorded 4-9-75, Will County Parcel 3 WD #R73-00389, Recorded 1-4-73, Will County Parcel 4 QCD #R73-00320, Recorded 1-4-73, Will County QCD #R73-00321, Recorded 1-4-73, Will County QCD #R73-00322, Recorded 1-4-73, Will County QCD #R73-00323, Recorded 1-4-73, Will County WD #R76-06641, Recorded 3-11-76, Will County

e Parcel 5 Court Order #R75-26232, Recorded 9-30-75, Will County QCD #R76-12112, Recorded 4-28-76, Will County Parcels 6 and 7 WD #R73-32465, Recorded 10-25-73, Will County WD #R73-32466, Recorded 10-25-73, Will County WD #R73-32467, Recorded 10-25-73, Will County Parcel 7-1 WD #R77-29452, Recorded 8-12-77, Will County ,

Parcel 8 WD #R74-28701, Recorded 11-18-74, Will County Parcel 9 TR's D #R76-11403, Recorded 4-22-76, Will County Parcel 10 TR's D #R74-10641, Recorded 5-9-74, Will County Parcel 11 TR's D #R74-02647, Recorded 2-1-74, Will County Parcel 12 Special WD #R74-10086, Recorded 5-3-74, Will County Parcel 13 QCD #R73-09343, Recorded 4-4-73, Will County Parcel 14 Special WD #R73-12394, Recorded 5-2-73, Will County Parcels 15, 16 and 38 Special WD #73-11350, Recorded 11-8-73, Kankakee County Parcel 17 Special WD #R74-10087, Recorded 5-3-74, Will County Parcel 18 WD #R72-33692, Recorded 11-16-72, Will County

Parcel 19 WD #R73-12393, Recorded 5-2-73, Will County Parcel 20 WD #R73-28751, Recorded 9-20-73, Will County Parcel 21

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TR's D #R75-000787, Recorded 1-10-75, Will County Parcel 22 l WD #R75-13721, Recorded 6-6-75, Will County Parcel 23 WD #238349, Recorded 4-17-75, RK328, PG787, Grundy County Parcel 24 WD #239424, Recorded 6-26-75, BK329, PG260, Grundy County Parcel ~25 WD #247760, Recorded 1-27-77, BK342, PG610, Grundy County Parcel 25-1 Railroad Spur Title in Trust 45553, CT&T Co.

Parcel 25-2 QCD #250782, Recorded 8-1-77, BK350, PG455, Grundy County Parcel 26 l

Title in Trust 45553, CT&T Co.

Parcel 27 l WD #73-4771, Recorded 5-25-73, Kankakee County QCD #73-4774, Recorded 5-25-73, Kankakee County QCD #73-4775, Recorded 5-25-73, Kankakee County l

QCD #73-4776, Recorded 5-25-73, Kankakee County QCD #73-4777, Recorded 5-25-73, Kankakee County QCD #73-4778, Recorded 5-25-73, Kankakee County WD #73-4779, Recorded 5-25-73, Kankakee County WD #73-4780, Recorded 5-25-73, Kankakee County WD #73-4781, Recorded 5-25-73, Kankakee County

QCD #73-4782, Recorded 5-25-73, Kankakee County l

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. Parcel 28 WD #73-76, Recorded 1-4-73, Kankakee County Parcel 29 WD #72-10952, Recorded 11-17-72, Kankakee County Parcel 30 WD #72-10954, Recorded 11-17-72, Kankakee County Parcel 31 WD #73-2911, Recorded 4-4-73, Kankakee County Parcel 32 WD #73-772, Recorded 1-26-73, Kankakee County Parcel 33 WD #72-6651, Recorded 7-26-72, Kankakee County Parcel 34 WD #73-75, Recorded 1-4-73, Kankakee County Parcel 35 WD #72-9224, Recorded 10-3-72, Kankakee County Parcel 36 l WD #72-9223, Recorded 10-3-72, Kankakee County Parcel 37 Special WD #75-1247, Recorded 2-24-75, Kankakee County Parcel 39 Conservator's Deed #73-5184, Recorded 6-4-73, Kankakee County Parcel 2 Corridor TR's D #R76-16535, Recorded 6-3-76, Will County Parcel 3 Corridor WD #R73-31738, Recorded 10-18-73, Will County

.. Parcel 4 Corridor WD #R73-36061, Recorded 12-6-73, Will County Parcel 5 Corridor WD #R74-01538, Recorded 1-18-74, Will County Parcel 6 Corridor Easement - See Braidwood - Wilton Center R/W, Parcel 6 Parcel 7 Corridor WD (R73-26439, Recorded 8-29-73, Will County QCD #R73-26440, Recorded 8-29-73, Will. County Parcel 8 Corridor WD #R74-02644, Recorded 2-1-74, Will County Parcel 9 Corridor WD #R74-21461, Recorded 8-29-74, Will County ,

Parcel 10 Corridor WD #R75-07305, Recorded 4-1-75, Will County Parcel 11 Corridor TR's D #R75-07303, Recorded 4-1-75, Will County

Parcel 12 Corridor TR's D #R82-06274, Recorded 3-29-82, Will County l

3. Edison will grant Subsidiary an easement in the Byron Station Site for the purpose of (i) operating and maintaining the Byron Unit 2 generating facility, including any needed replacements, modifications, additions, retrofits or similar improvements to the equipment and structures con:tituting Byron Unit 2, and (ii) making such use of the Byron Station Site as is appropriate in connection with the retirement and

,. decommissioning of such equipment and structures.

4. The facilities and structures which constitute the Byron Unit 2 generating facility include the Byron Unit 2

a. Reactor containment

b. Reactor Vessel

c. Reactor internals including control rod drive mechanisms, instrumentation and detectors, pressurizers and steam generator including separator and dryer.

d. Cranes and Hoists used solely in connection with operation of the Unit

e. Main and Misc. Instrument and Control Panels

f. Piping, including valves and supports used solely in connection with operation of the Unit

g. Circulating Water Pumps used solely in connection with operation of the Unit

h. Turbine (including foundation)

1. Generator (including foundation)

j. Condenser

k. 345 KV. Main Power Disconnect Switch (1/2 interest)

1. Natural Draft Cooling Tower Such facilities and structures also include any other facility or structure at the Byron Station Site which (i) was designed, I constructed or installed primarily for use in connection with the f

operation of Byron Unit 2, and (ii) in the case of any such facility through which electricity generated by Byron Unit 2 flows (together with the structures which support such facility), i~s located in the system at or prior to the points designated A on the attached diagram.

5. Edison will convey the Braidwood Station Site to Subsidiary subject to the reservations contained in paragraph 2 of the Facilities Transfer Agreement between Edison and Subsidiary l

together with all equipment, structures, inventories, materials i

-s-l

4 and supplies located or stored thereon except the transmission facilities. As used herein " transmission facilities" means any equipment through which electricity generated by Braidwood Unit 1 f( or Braidwood Unit 2 flows (together with the structures which support such facilities) which is located in the system after both of the points designated A on the attached diagram.

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DIAGRAM -

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I

' h, POWER SUPPLY AGREEMENT BETWEEN

[ SUBSIDIARY)

AND COMMONWEALTH EDISON COMPANY This Power Supply Agreement (" Agreement"), made and entered into this day of , 1987, by and between (Subsidiary), ("[ Subsidiary]") , and COMMONWEALTH EDISON CO?'PANY,

(" Edison"),

WITNESSETH:

WHEREAS, (Subsidiary] shall own certain electric generating units commonly known as Byron Unit 2, Braidwood Unit 1 and Braidwood Unit 2 (the " Units"); and WHEREAS, Edison is a public utility engaged in, among other businesses, the generation, purchase, transmission, distri-bution and sale of electric power and energy at wholesale and retail; and WHEREAS, (Subsidiary] has agreed to sell to Edison power and energy available to (Subsidiary] from the Units, and Edison has agreed to join with (Subsidiary] in executing an agreement that will set forth in detail the terms and conditions for the sale of such power and energy by (Subsidiary] to Edison; and 1

WHEREAS, Byron Unit 2 and Braidwood Unit 1 are expected to be placed in service on or before July 1, 1987; Exhibit C

9 NOW, THEREFORE, (Subsidiary] and Edison, in consider-

^

ation of the premises and the mutual agreements contained herein, which each of the parties hereto acknowledges to be sufficient consideration, agree as follows:

ARTICLE I TERM OF AGREEMENT 1.1 EFFECTIVE DATE. The Effective Date of this Agreement shall be July 1, 1987.

1.2 TERM. This Agreement will have an Initial Term beginning on the Effective Date hereof continuing through and including l

June 30, 1992. The Initial Term of this Agreement is subject to extension pursuant to the provisions of Section 5.4 of this Agreement. The parties recognize that the date for exercise of the option relative to Braidwood 2 capacity provided in subparagraph (ii) of Section 5.3 hereof falls outside such Initial Term, but nevertheless survives.

ARTICLE II UNIT CAPACITY SALE AND RESERVE RESPONSIBILITY 2.1 UNIT CAPACITY SALE. During the Initial Term of this Agreement (and any extension of such Initial Term pursuant to Section 5.4 of this Agreement), (subsidiary) shall make available to Edison all the power and energy available from each of the Units from time to time and at any time for Edison's own use or resale to others.

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2.2 RESERVE RESPONSIBILITY. The sale by (Subsidiary) to Edison of the output of the Units pursuant to Section 2.1 is a sale without generating capacity reserves.

ARTICLE III POINTS OF DELIVERY 3.1 POINTS OF DELIVERY. Edison shall receive and take title to power and energy produced at each Unit at the point of interconnection between the Unit and Edison's facilities.

ARTICLE IV CHARGES FOR SERVICE 4.1 RESERVATION CHARGE. During the Initial Term of this Agreement (and any extension of such Initial Term pursuant to Section 5.4 of this Agreement), Edison shall pay (Subsidiary) a base monthly reservation charge of $55,000,000 beginning with the bill for July, 1987. Such base monthly reservation charge shall be subject to increase as provided in Section 5.4 of this Agreement.

4.2 ENERGY CHARGES. For each kilowatthour of energy delivered to Edison hereunder in any month Edison shall pay [ Subsidiary) the cost of fuel (including applicable costs'of leased nuclear fuel) incurred in such month to produce the energy purchased by Edison, such cost of fuel to be calculated in a manner consistent with the provisions of Edison's Illinois Commerce Commission ("ICC") fuel adjustment clause. If, in i

any of the periods listed on the table set forth below,

[ Subsidiary) produces energy from the Units in excess of

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...' c .'

4 110% of the target level for such period listed on such table

(" Bonus Energy"), Edison shall also pay (Subsidiary) an amount determined in accordance with the following formula:

1/2 (S - C) + C,  ;

where.

1 S= the savings deemed to result from the production of Bonus Energy; and ,

C= amounts previously credited by Edison to retail ratepayers pursuant to the " Output Guarantee" provisions of Paragraph 5 of the Memorandum of Understanding dated February 3, 1987, between Edison and certain j other parties (the " Memorandum of '

Understanding"), and not previously considered in determining compensa-tion for Bonus Energy or S, which-ever shall be less.

In determining whether (Subsidiary] has become entitled to compensation for Bonus Energy, all energy output for any i

period listed on the table set forth below up to the target level for such period shall be considered normal output and only when (Subsidiary] has produced energy from the Units in such period in excess of 110% of the target level for such period shall (Subsidiary) become eligible for Bonus Energy compensation.

TARGET LEVELS Period Cumulative Period Gioawatthours Gicawatthours July-Dec 1987 6,000 6,000 1988 11,000 17,000 1989 13,200 30,200 1990 16,100 46,300 1991 18,000 64,300 Jan-June 1992 7,550 71,850 The savings deemed to be realized by Edison from the production of Bonus Energy shall be the difference between the fuel cost incurred by (Subsidiary) in producing Bonus Energy and the cost Edison would have incurred in replacing such Bonus Energy. Edison, in conformity to the Memorandum of Understanding, shall determine the value of such replace-ment power. The additional Bonus Energy compensation to which (subsidiary) may be entitled shall be determined no later than 30 days following the end of the period to which such Bonus Energy compensation relates. Any such Bonus Energy compensation shall be billed to Edison in equal monthly installments over the 12 months succeeding the month in which such determination is made.

4.3. FIRM RATES. The rates for service specified herein, as they may be increased as expressly provided for in Section 5.4, shall remain in effect during the Initial Term of this Agreement and any extension thereof pursuant to section 5.4, I

and shall not be subject to change through application to the Federal Energy Regulatory Commission ("FERC") pursuant to the provisions of Section 205 of the Federal Power Act absent the t

agreement of the parties hereto. Similarly, the pricing mechanisms specified in Article V shall not be subject to

. change through application to the FERC pursuant to such provisions of the Federal Power Act.

ARTICLE V OPTIONS 5.1 EXERCISE OF OPTIONS. Edison shall have the options specified in Sections 5.2, 5.3 and 5.4 below to purchase power and energy from (subsidiary) after the Initial Term of this Agreement. Except as otherwise provided in section 5.4 below, each such option is exclusive of the others, and the option selected by Edison must be exercised by Edisco no, later than the close of business, Monday, July 1, 1991.

5.2 MOST FAVORED NATION STATUS (Option a). During the period June 30, 1992, through June 30, 2012, Edison may purchase power and energy from (subsidiary] produced from the Units, when and as available from the Units and subject to prior i sale to others, at any time and from time to time at prices l

subject to the jurisdiction of the FERC but subject to Edison's rights described in Appendix A to this Agreement.

Nothing contained in this Section 5.2 shall be deemed to l deprive the ICC of any authority it may have to approve l

l contracts for the purchase of such power and energy or to l review the prudence of such purchases. If the FERC is without or disclaims jurisdiction with respect to the rates I

at which such sales are to be made by (Subsidiary] to Edison, l

the rates agreed upon by the parties shall be submitted to the ICC for review under Section 7-101 of the Illinois Public Utilities Act and the rates agreat upon by the parties, as t

they may be modified by the ICC rpon review, shall be the basis upon which Edison shall conpensate (Subsidiary).

5.3 NEW AGREEMENT (Option b). (i) Edison shall have the option to contract with (Subsidiary) to purchase not less than the

' entire output of Byron Unit 2 for the remainder of its useful life and, if it does so, to also purchase such amount of power (in blocks of 100 megawatts) from Braidwood Unit 1 over the remainder of its useful life as Edison shall designate at the time of exercise of this option. If Edison elects to purchase any amounts of power from Braidwood Unit 1 pursuant to this Section 5.3, Edison shall have the further option to reduce the amounts of power (in blocks of 100 megawatts) that Edison is obligated to purchase from Braidwood Unit 1, any such reduction to be effective on July 1, 1997 or, if Edison j has previously exercised the option provided for in Section 5.4 of this Agreement, effective on July 1, 2000, in either case by giving notice of such reduction 12 months prior to l

such effective date. Edison shall purchase such power, and the energy associated therewith, at rates determined using l

traditional net original cost rate base / rate of return regulation and accounting for fuel and all other costs of l

production, all as determined by the FERC from time to time.

If the FERC is without or disclaims jurisdiction with respect l

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to such rates, or declines to make such a net original cost rate base / rate of return determination, such determination as made by Edison and (Subsidiary) shall be submitted to the ICC for review under section 7-101 of the Public Utilities Act, and the determination of the parties, as it may be modified by the Icc upon such review, shall be the basis upon which Edison shall pay (Subsidiary). In the event that Edison exercises its option to reduce its purchases from Braidwood Unit 1, the amount payable to (Subsidiary) shall be reduced to reflect such reduction effective as of the date of such reduction.

(ii) If Edison has elected to purchase the output of Byron Unit 2 and at least a part of the output of Braidwood Unit 1 under this section and has not elected to reduce the amount of power produced by Braidwood Unit 1 to be purchased under this section, Edison shall have the further option to elect on December 1, 1998, to purchase not less than the entire ,

output of Braidwood Unit 2 during the period January 1, 2000 through the remainder of the useful life of Braidwood Unit 2.

! In the event Edison exercises the option to purchase the output of Braidwood Unit 2, it shall not thereafter have any option under this Agreement to reduce the amount of power Edison is obligated to purchase from Braidwood Unit 1. For power, and associated energy, produced from Braidwood Unit 2 Edison shall pay (Subuidiary) the greater of (1) the market value of such power and energy as determined by reference to

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

. .=. -.

4 third-party, arms length, long-term firm power purchase contracts commencing approximately January, 2000, or (2) rates determined using traditional net original rate 4

n base / rate of return regulation and accounti'g for fuel and all other costs of production, all as determined by the FERC.

If the FERC is without or disclaims jurisdiction with respect to such rates, or declines to make such a determination of market value or not original cost rate base / rate of return rates, such determinations as made by Edison and (Subsidiary] ,

shall be submitted to the Icc for review under Section 7-101 i of the Public Utilities Act, and the determinations of the parties, as they may be modified by the Icc upon such review, shall be the basis upon which Edison shall pay (Subsidiary),

except as otherwise provided in this Section.

5.4 EXTENSION OPTION (Option c). Edison shall have the option to defer until the close of business on Friday, July 1, 1994, the time by which it must exercise the option provided in i

Section 5.2 above or the option provided for in Section 5.3 above. If Edison exercises the option provided for in this

( Section 5.4, the Initial Term of this Agreement shall be extended, and the entire output of the Units shall continue to be available to Edison, to and including June 30, 1995, and the monthly payment required to be made by Edison under Section 4.1 of this Agreement shall be increased by an amount equal to 1/12 of the annual retail rate increase'to which Edison shall be entitled as a consequence of its election, at l l

l. _. __ _. _

9 the direction of the ICC, to exercise the option provided by this Section 5.4. The bonus provision of Section 4.2 shall not apply during the period of such extension. Particularly, but not in limitation of the foregoing, the capacity of Braidwood 2 shall remain subject to the option specified in Section 5.3 (ii) above (being part of Option b as set out in

" Options After 5 Years" in' Paragraph 5 of the Memorandum of -s Understanding dated February 3, 1985).

5.5 DEFAULT OPTION. [ Subsidiary] recognizes that Edison has agreed with others to be directed by the ICC in its exercise

.of the options provided in Sections 5.2, 5.3 and 5.4 above.

In the event that Edison has filed with the ICC a request for such direction no later than 12 months prior to the applicable option exercise date, and the ICC has failed to direct Edison with regard to any such exercise, Edison shall be deemed to have elected to contract to purchase the entire output of Byron Unit 2 for the remainder of its useful life and 50% of the entire output of Braidwood Unit 1 for the remainder of its useful life beginning on the date 12 months following the applicable exercise date. In the event this section 5.5 becomes operative, Edison shall have no further l options under this Article V and the rates for power for which Edison has so contracted shall be determined as provided in Section 5.3 with respect to the output of Byron Unit 2 and Braidwood Unit 1.

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9 ARTICLE VI BILLING 6.1 STATEMENTS. As soon as practicable after the end of each calendar month, the Parties shall cause to be prepared a ,

statement setting forth the energy delivered by (Subsidiary] to Edison from each Unit and the cost of fuel incurred by (Subsidiary] in producing such energy during such month. If necessary, the cost of fuel may be determined on an estimated basis and adjusted retroactively once the actual cost of fuel incurred in such month is known. Generally accepted practices and methods of accounting and billing for energy transactions between interconnected systems shall be followed in preparing such statements.

6.2 BILLS. As soon as practicable after preparation of the acnthly statement provided for in Section 6.1 above, (Subsidiary] shall render to Edison a bill for the amounts due (Subsidiary] by Edison for energy purchased in the month covered by such statement, the capacity reservation charge for such month and any Bonus Energy compensation due

, (Subsidiary] pursuant to Section 4.2 of this Agreement.

Edison shall pay (Subsidiary] the amount due within 15 days of the date of the bill. Unless otherwise agreed upon, a calendar month shall be the standard monthly period for the purposes of settlement under this Agreement.

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ARTICLE VII METERS AND METERING 7.1 METERS. Electric power and energy interchanges at each point

\~ of delivery shall be measured by suitable metering equipment provided by subsidiary.

7.2 TESTING. Such metering equipment shall be tested by Edison at suitable intervals as specified by the parties from time to time, such intervals not to exceed 12 months. The accuracy of registration shall be maintained in accordance with sound operating practice.

7.3 BILLING CORRECTIONS. If, as a result of any test, any meter shall be found to be registering more than two percentage points above or below one hundred percent accuracy, the account between the parties hereto shall be corrected, for a period equal to one-half of the elapsed time since the last prior test, according to the percentage of inaccuracy so found, except that if the meter shall have become defective or inaccurate nt a reasonably ascertainable time since the last prior test of such meter, the correction shall extend back to such time. Should metering equipment at any time fail to register, the energy delivered shall be determined from the best available data.

ARTICLE VIII CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT, AMENDMENTS AND SPECIAL TERMINATION RIGHT 8.1 CONDITIONS PRECEDENT. The effectiveness of this Agreement is conditioned upon the approval or acceptance for filing of

l

.* . . 1 l

1 this Agreement by any regulatory authority having jurisdic-tion and the approval by the ICC of Edison's sale of the Units to [ Subsidiary).

I 8.2 FERC ACCEPTANCE FOR FILING. (Subsidiary] and Edison mutually recognize and agree that this Agreement will be filed with the Federal Energy Regulatory Commission and [ Subsidiary] and Edison agree jointly to request acceptance for filing of this Agreement without suspension by the FERC. In this connec-tion, Edison and (Subsidiary) agree that each of them will execute any and all documents, duly authorize all officers or agencies, and do all of the things necessary and appropriate ,

to secure acceptance for filing of this Agreement by the FERC without suspension, or change or modification of the terms hereof, no later than July 1, 1987.

8.3 AMENDMENTS. This Agreement may be. amended only upon mutual agreement of the parties. Any such amendment shall be in writing and will be effective as of the date set forth in the order of any regulatory authority, or other l governmental agency having jurisdiction, approving or accepting for filing such amendment or any portion thereof that is required to be approved or accepted.

8.4 SPECIAL TERMINATION RIGHT. If, for any reason, Edison is not l- permitted to place in effect or maintain the rates provided l for in the Memorandum of Understanding, Edison shall have the

(

, right to terminate this Agreement, such termination to be effective when and as specified by Edison.

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ARTICLE IX MISCELLANEOUS 9.1 GOVERNING LAW. The validity, interpretation and performance of this Agreement and each of its provisions shall be gov-erned by the laws of.the State of Illinois, except to the extent that this Agreement shall be subject to federal law.

9.2 COUNTERPARTS. Any number of counterparts of this Agreement may be executed and each shall have the same force and effect as the original.

9.3 NOTICES. Any notice, demand or request made by a party to the other party pursuant to any provision of this Agreement shall be made in writing and shall be delivered either in person, by prepaid telegram or by registered or certified mail to the officer at the address listed below, provided that each party may from time to time change the designated recipient or the address or both, to be used for the giving to it of any such notice, demand or request, by giving written notice of such change to the other party.

l TO [ Subsidiary):

TO Edison:

9.4 SECTION HEADINGS NOT TO AFFECT MEANING. The descriptive l

headings of the various Articles and sections of this Agree-ment have been inserted for convenience only and shall not modify or restrict any of the terms and provisions thereof.

9.5 FURTHER ASSURANCES. From time to time after the execution of this Agreement, each party shall execute such instruments, upon the request of the_other, as may be necessary or appro-priate to carry out the intent of this Agreement.

9.6 WAIVERS. Any waiver by either party of its rights with respect to a default under this Agreement, or with respect to any matter arising in connection with this Agreement, shall not be a waiver of any subsequent default or matter.

i 9.7 COMPUTATION OF TIME. In computing any period of time prescribed or allowed by this Agreement, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a

~

Saturday, Sunday, or legal ho11 day, in which event the period shall run until the end of the next business day which is not l

a Saturday, Sunday, or legal holiday.

9.8 SURVIVORSHIP OF OLLIGATIONS. The termination of this Agreement shall not discharge any party from any obligation it owes to the other party under this Agreement by reason of I any transaction, loss, cost, damage, expense or liability i

which shall have occurred or arisen after the effective date of this Agreement, but prior to such termination. It is the intent of the parties that any such obligation owed (whether the same shall be known or unknown as of the termination of this Agreement) will survive the termination of this Agreement.

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9.9 Subsidiary hereby agrees to be bound by the obligations imposed on it by the Memorandum of Understanding as if it were an original signatory thereto.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective authorized officers and their respective corporate seals to be affixed hereto as of the date first above written.

ATTEST: COMMONWEALTH EDISON COMPANY By Secretary (Title)

ATTEST: [ Subsidiary] l By Secretary (Title)

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Accendix A "Most Favored Nations" During the 20-year period June 30, 1992 through June 30, 2012 Edison under Section 5.2 of this Agreement shall have the rights set forth in paragraphs (A) and (B) below.

) (A) If Edison is purchasing power under a Contract with the Subsidiary (" Pre-Existing Edison Contract") and the Subsidiary enters into a contract to sell power to a Third Party (" Third Party Contract") which is comparable to the Pre-Existing Edison i

contract, but contains more favorable prices or payment terms, Edison may elect to have the price and payment terms of the Third Party Contract substituted for the prices and payment terms of the Pre-Existing Edison Contract. A Third Party contract shall be considered to be " comparable" only if:

I. It is effective over approximately the same calen-dar time period as the Pre-Existing Edison Contract.

II. Any other difference between the terms and condi-l tions of the Third Party Contract (excluding price and payment terms) and those of the Pre-Existing Edison Contract does not significantly affect (i) the Subsidiary's cost of providing ser-vice, (ii) the quantity or type of service to be provided, (iii) the benefits obtained by the Subsidiary, or (iv) the risks under-taken by the Subsidiary.

[ Edison shall have no right to substitute only the price SI payment terms of the Third Party Contract for those of the Pre-i

+

t Existing Edison Contract, it being understood that Edison's elec-tion under this paragraph is limited to substitution of both the payment and price terms of the Third Party Contract for those of the Pre-Existing Contract.

B. If the Subsidiary enters into a Third Party Con-tract and Edison advises Subsidiary that it desires to purchase power under a comparable contract, the subsidiary will offer power to Edison under a comparable contract, if such power is available from the Units. For purposes of this paragraph, a contract will be considered to be comparable to the Third Party Contract only if its terms and conditions are materially the same as those of such Third Party Contract excepting only such terms and conditions,as do not significantly affect (i) the Subsidiary's cost of providing service, (ii) the quantity or type of service to be provided, (iii) the amounts, form and timing of payments, (iv) the benefits obtained by the Subsidiary or (v) the risks undertaken by the Subsidiary. No such comparable contract shall relieve Edison of any of its obligations under any Pre-Existing Edison Contract.

Upon the execution of any Third Party Contract, the Subsidiary will give Edison notice of same and furnish copy of same to Edison within 30 days of the execution of said Third Party Contract.

.. j i.' l i

CONSTRUCTION AND OPERATING AGREEMENT Agreement dated as of , 1987, between

, (" Subsidiary") and Commonwealth Edison Company (" Edison"). Subsidiary and Edison agree as fol-t lows:

' l l

1. Recitals. In accordance with an agreement j f ,

entitled Memorandum of Understanding, dated February 3, 1987, I

among Edison, the Governor of the State of Illinois, the Attorney General of the State of Illinois, the State's Attorney of Coo,k .

County and other parties (the " Memorandum"), Edison has agreed to

' 1 transfer its nuclear generating facilities known as Byron Unit 2 i to Subsidiary. The l

and Braidwood Units 1 and 2 (the " Units")

real estate and facilities constituting the Units are more particularly described in the Facilities Transfer Agreement.

Edison has also agreed that it would complete and operate the Units transferred to Subsidiary as agent for Subsidiary.

2. Comeletion of Construction. Edison agrees to

! complete the construction of the Units as soon as is commercially feasible in accordance with the Construction Permits issued by the United States Nuclear Regulatory Commission ("NRC"). In this regard, Edison shall, and Subsidiary irrevocably authorizes Exhibit D

i .

I'

't Edison to, make such contracts, agreeaants and modifications to existing contracts and take such other actions as Edison, in its sole discretion, considers necessary or appropriate to complete the construction of the Units and their preparation for commercial service. Subsidiary will cooperate with Edison in connection with its duties under this paragraph, including, without limitation, applications for authorizatir s ns, permits or licenses and the execution of-such other documents as may be reasonably required.

3. Construction Pavnents. Edison shall be respons-ible for making arrangements for the payment of all costs and obligations incurred in connection with the construction of the . , .

Units. The costs incurred by Edison in connection with such '

a construction up to the in-service date of the Units shall be a

deemed to be a contribution to capital by Edison as sole shareholder of subsidiary.

Edison shall also be responsible for making arrange-ments for payment of all costs and obligations incurred after the in-service date, in connection with the construction of any needed replacements, modifications, additions, retrofits or l similar improvements with respect to the Units. Edison shall bill subsioiary for these costs. To the extent practicable, the billings shall be at such times as shall be appropriate to put the amounts billed in Edison's hands at the times disbursements are made. To the extent such billing is not practicable, Edison L ,.._ _ __

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shall have the right to bill Subsidiary for capital Costs.

" Capital Costs" means a return on Edison's unamortized investment in the item in question, at a rate equal to that which i

Edison has been authorized to earn on rate base in its then most recent general rate order promulgated by the Illinois Commerce Commission (such rate to vary when and as such Commission promulgates new orders) and, in the case of investment in i

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depreciable (or otherwise amortizable) property, amortization of the value of such investment in accordance with the basis then used by Edison in respect of similar property includable in Edison's retail rate base.

Subsidiary may require Edison to provide Subsidiary with a statement showing in reasonable detail the basis for the computation of any bil), at or about the time the bill is rendered to Subsidiary. The existence of a dispute between l

Edison and Subsidiary with respect to the proper amount'of any '

bill shall not relieve Subsidiary of its obligation to pay the bill when due. All bills shall be subject to audit and later correction if in error, s

4. Operation and Maintenance. Edison shallLoperate and maintain the Units in accordance with the terms of the" applicable NRC Operating Licenses, taking all steps which it considers necessary or appropriate for that purpose, including, but not limited to, (a) manning the Units with its own employees, (b) making and modifying contracts with third parties, (c) 4g -E I

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securing and keeping in effect all necessary licenses and other governmental authorizations, (d) preparing and maintaining reports and records required by governmental authority or necessary or appropriate to properly account for the costs and expenses of operation and maintenance of the Units, (e) providing purchasing, engineering and other support services associated with the operation of the Units, (f) procuring and )

maintaining such liability and property insurance as may be required by law or may be otherwise considered to be desirable by Edison and (g) providing off-site electrical power to the Units as described in Section 8.2 of the Safety Evaluation Reports for =

Byron Station dated February, 1982, and the Braidwood Station dated December, 1983, as amended from time to time. During the Priority Period applicable to a Unit, Edison will treat such Unit on the same basis as its own units, allocating personnel and other resources, dispatching and establishing priorities for activities and resources among the Unit and Edison's own units as though Edison owned the Unit. The " Priority Period" applicable to a Unit is the Rate Moratorium Period (as defined in the Memorandum) and any subsequent period during which Edison is purchasing output from such Unit under a contract entered into pursuant to subparagraph (b) of paragraph 5 of the Memorandum.

During any other period Edison will operate and maintain a Unit in accordance with accepted utility practices.

Edison shall also construct any needed replacements, modifications, additions, retrofits or similar improvements to

the Units, whether required before or after completion of the Units, and shall retire and decommission the Units upon the expiration of their useful lives, salvaging any useful parts of the Units. Subsidiary will cooperate with Edison in all activities in connection with the operation and maintenance of

~

the Units, including, without limitation, applications for authorizations, permits and licenses and the execution of such other documents as may be reasonably required.

4 1

5. Operation and Maintenance Costs. Edison shall be responsible for making arrangements for the payment of all costs, and obligations incurred in connection with the operation and maintenance of the Units, including without limitation, all costs associated with materials and supplies inventories used for the Units and the disposal of nuclear fuel used in the Units, 3rrespective of the identity of the owner of such fuel. Edison shall bill Subsidiary for these costs. To the extent practicable, the billings shall be at such times as shall be l appropriate to put the amounts billed in Edison's hands at the times disbursements are made. To the extent such billing is not practicable, Edison shall have the right to bill Subsidiary for Capital Costs. Subsidiary may require Edison to provide Subsidiary with a statement showing in reasonable detail the basis for the computation of any bill, at or about the time any l bill is rendered to Subsidiary. The existence of a dispute l

between Edison and Subsidiary with respect to the proper amount

of any bill shall not relieve Subsidiary of its obligation to pay the bill when due. All bills shall be subject to audit and later correction if in error.

6. Nuclear Fuel. Nuclear fuel may be leased or subleased by Edison to Subsidiary. In the case of fuel subleased to subsidiary, Subsidiary shall pay to Edison a rental equal to the amounts payable by Edison in respect of such fuel under Edison's lease of such fuel. To the extent practicable, such rental payments shall be due at such times as shall be appropriate to put the amounts billed in Edison's hands at the times Edison makes its rental payments. In the case of nuclear fuel leased by Edison to Subsidiary, Subsidiary will pay to Edison a rental equal to the Capital Costs applicable to such fuel.

7. Allocation of Overhead. Subsidiary recognizes that under this Agreement Edison will incur expenses associated with its management and supervisory duties which are not fully compensated in the construction costs and operation and Mainten-ance Costs provided for above. Accordingly, Subsidiary agrees to Pay Edison annually an allocable portion of its management and supervisory overhead costs with respect to each of the Units, to

be determined in accordance with the following formula:

U X A and G T

Where:

"U" means the total construction expenditures and operating expenses of the Unit in question for that fiscal year; "T" means Edison's total construction expenditures and -

operating expenses for that fiscal year including all such expenditures made in connection with this Agreement; and "A&G" means the total of Edison's Administrative and General Costs, as reflected in Edison's books of accounts maintained in accordance with applicable regulatory requirements, including applicable pension provisions, other employee benefits and payroll taxes, and executive management's salaries and the expenses of their offices for that fiscal year.

With respect to each Unit " fiscal year" means that part of each calendar year during the term hereof which is subsequent 1

l 1 .. _. -

'to the in-service date of the Unit and prior to completion of its decommissioning and retirement. Edison shall bill Subsidiary for its allocable share of management and supervisory overhead costs within 30 days after the close of each fiscal year. Subsidiary shall make payment to Edison within ten days after receipt of the bill.

8. Byron Station Common Plant and Common Costs.

4 Edison shall make the real estate and facilities designed, constructed or used as common plant for both units of the Byron Station available when and as required for operation and maintenance of Byron Unit 2. Subsidiary agrees to pay to Edison for the use of such common plant a monthly rental charge equal to 50% of the Capital Costs applicable to such common plant.

To the extent practicable, costs properly assignable to a Unit at the Byron Station shall be assigned to the owner of such Unit. Fifty percent of operating and maintenance costs not readily allocable to a Unit shall be allocated to Byron Unit 2.

The parties recognize that there are facilities associated with each of the generating units at the Byron Station which are not classified as common plant but which are, from time to time, used in connection with the operation of both units.

Such facilities will continue to be so used throughout the remaining useful lives of such generating units. During the Priority Period applicable to Byron Unit II, neither party shall be obligated to compensate the other for such use. For any l - - - - _ . -. - - - - - . _ _ - _ - _ _ _ .

. F .

e period thereafter, the parties will agree to an appropriate method of' sharing the use of, and costs associated with, such facilities.

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9. Scare Ecuinment. Edison will make available to subsidiary for use in connection with the Units spara equipment and parts maintained in connection with Edison's units.

Subsidiary will make available to Edison for use in connection with Edison's units spara equipment and parts maintained in connection with the Units. The party receiving any such spare equipment or parts shall compensate the other party either in cash or by providing like equipment or parts, at the election of the party providing such equipment or parts. If payment is to be made in cash, such payment shall be equal to the original cost of the item in question. At any time after the Rate Moratorium Period (as defined in the Memorandum), either party may terminate the obligations to make equipment and parts available under this paragraph.

i

10. Access. Subsidiary shall at all times provide Edison, its employees, independent contractors and other authorized invitees with access to the Units'for such purposes as -

Edison, in its sole discretion, considers appropriate, including access to the NRC to assure compliance with NRC regulations.

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. 11. Term. Except as otherwise provided in paragraph 12, this Agreement will continue in force until the earlier of (a) the retirement of all of the Units or (b) such date as is provided for by Edison and Subsidiary in a written agreement to the effect that this Agreement is terminated.

12. Termination. Edison may terminate this Agreement if Subsidiary becomes insolvent or generally fails to pay, or admits in writing its inability to pay, debts as they become due; or Subsidiary applies for, consents to or acquiesces in the appointment of, a trustee, recmiver or other custodian for Subsidiary or any property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for Subsidiary or for a substantial part of the property of Subsidiary and is not discharged within l 30 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is commenced in respect of Subsidiary, and if such case or proceeding is not commenced by Subsidiary it is consented to or acquiesced in by Subsidiary or remains for 30 days undismissed; or subsidiary takes any corporate action to authorize, or in furtherance of, any of the foregoing.

s . . -

l Subsidiary may terminate this Agreement as to any. Unit, upon twelve months' prior written notice to Edison of Subsid- '

) iary's determination to terminate with respect to such Unit provided-that~no such termination may be effective prior to the end of the Priority Period ,tpplicable to such Unit.

4 The foregoing terminatica rights shall be in addition to any other rights the parties may have arising out of any fact or circumstance referred to in this paragraph or arising out of any default. No such termination shall relieve Edison of any obligation it may have as a licensed operator of the Units or as otherwise may be imposed on Edison by the NRC or by operation of law with respect to safety of construction, operation, j m'aintenance, shutdown or decommissioning of the Units.

i

13. Acency. Subsidiary hereby appoints Edison as Subsidiary's agent for the purpose of completing construction of the Units and operating and maintaining them under the terms of this Agreement; and, it is expressly understood that in so i

j constructing, operating and maintaining the Units, Edison will be acting solely as agent for Subsidiary and not as a principal.

This Agreement shall not create any rights in any person, other 1

I than Edison and Subsidiary, whether as a third party beneficiary or otherwise. Edison shall have no obligation hereunder to anyone other than Subsidiary and subsidiary shall have no right to assign, convey, pledge or otherwise transfer * / of its rights hereunder without the prior written consent of Edison. Nothing l

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contained herein shall operate to limit any obligation Edison may

, have as a licensed operator of the Units, or as otherwise may be imposed on Edison by the NRC or by operation of law with respect l

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to the safety of construction, operation, maintenance, shutdown or decommissioning of the Units.

14. Miscellaneous.

(a) The validity, interpretation and performance of this Agreement and each of its provisions shall be governed by the law of the State of Illinois as though all acts or omissions occurred in that State. This Agreement is subject to the ap-1 proval of any regulatory authority required by law.

(b) The section headings included in this Agree-ment have been inserted for convenience of reference only and shall in no way affect the interpretation of this Agreement.

(c) This Agreement may not be amended except by a written instrument executed by Edison and Subsidiary.

(d) This Agreement may not be assigned by either party without the prior written consent of the other party, which shall not be unreasonably withheld.

(e) This Agreement is subject to approval by the Illinois Commerce Commission and shall only become effective upon I

, such approval.

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i Executed this day of , 1987.

I COMMONWEALTH EDISON COMPANY By: I l

Its:

[ SUBSIDIARY)

By: .

Its:

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A

.h FINANCING AGREEMENT g

COMMONWEALTH EDISON COMPANY, (" Edison"), and

, (" Subsidiary"), in consideration of those matters set forth in Article I hereof agree as follows:

ARTICLE I Recitals (a) Edison owns 100% of the outstanding equity securi-ties of Subsidiary.

(b) Edison and Subsidiary are parties to a Facility Transfer Agreement, a Construction and Operating Agrecment, and a Power Supply Agreement, all of even date herewith. Pursuant to those agreements, Edison will transfer to Subsidiary the facilities common'_y referred to as Byron Unit 2 and Braidwood Units 1 and 2 (collectively the " Units"), and as agent for Subsidiary, complete construction of the Units, operate and maintain the Units, and construct any modifications thereto required for their continued operation, and, for at least 5 years, will have the right to purchase all of the power generated thereby. In order to perform its obligations under those agreements, Subsidiary may be required to make expenditures in excess of the revenues received by it from sales of power.

Exhibit E

e ARTICLE II Fundins

1. On or before July 1, 1987, Edison will make a cash contribution to the capital of subsidiary in the amount of

$25,000,000 to provide working capital. Thereafter, from time to timo, and at subsidiary's request, Edison will make available to subsidiary such funds as may be necessary to enable Subsidiary to comply with any obligation it may have with respect to safe construction, operation, maintenance, shutdown or decommissioning of the Units; provided that nothing herein contained shall be _

construed as obligating Edison to provide funds to enable Subsidiary to continue or resume operation of the Units, or any of them, when Edison believes that continued or resumed operation is uneconomical.

2. From time to time, and at Subsidiary's request, Edison uay make available to Subsidiary auch funds as may be necessary to enable Subsidiary to perform its obligations in respect of the agreements referred to in Article I, or to fulfill any other obligation subsidiary may come to have arising out of or relating to ownership or operation of the Units.

ARTICLE III

. Conditions At Edison's option, funds to be provided hereunder shall be made available in the form of: (1) loans bearing interest at a rate not to exceed 250 basis points above Edison's then most

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recent borrowing of similar duration; (2) non-interest bearing capital advances; or (3) capital contributions.

! ARTICLE IY ,

i 13.M This Agreement shall continue in full force and effect during the term of the construction and Operating Agreement 4

referred to above.

4 ARTICLE V

! Limitations (a) The obligations of Edison to provide funding under paragraph 1 of Article II and its right to provide other funding hereunder shall be subject to approval of this Agreement by the l- Illinois commerce commission.

(b) This Agreement shall not create any rights in any person, other than Edison and Subsidiary, whether as a third party beneficiary or otherwise. Edison shall have no obligation hereun-der to anyone other than Subsidiary and subsidiary shall have no right to assign, convey, pledge or otherwise transfer any of its rights hereunder without the prior written consent of Edison.

(c) Subsidiary shall not use any of the funds provided 1

to subsidiary hereunder for any purpose other than those specified i in Article II.

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. h8 l Dated at , Illinois, the _ day of

, 1987.

1 COMMONWEALTH EDISON COMPANY By

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• ' #pa ngD UNITED STATES

[ y NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555

%...../

COMMONWFALTH EDISON COMPANY CEAITRAL ILt.idot5 # DOCKET NO. STN 50-455 ELEctruc GENaMr#N4 BYRON STATION, UNIT 2 coMPAay FACILITY OPERATING LICENSE License No. NPF-66

1. The Nuclear Regulatory Commission (the Comission or the NRC) has found that: @nd Cedml Illi.eis Ele Mc. 6caer 4 gCe v a d A. The applicationAfor a license filed by Commonwealth Edison Companyd (e-iteensees) 4Gu ' h:m: 0 complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's regulations set forth in 10 CFR Chapter I, and all required notifications to other agencies or bodies have been duly made; B. Construction of Byron Station, Unit 2 (the facility) has been substantially completed in conformity with Construction Permit No.

CPPR-131 and the application, as amended, the provisions of the Act and the regulations of the Commission; C. The facility will operate in conformity with the application, as amended, the provisions of the Act, and the regulations of the Commission (except as exempted from compliance in Section 2.D.

below);

D. There is reasonable assurance: (1) that the activities authorized by this operating license can be conducted without endangering the health and safety of the public, and (ii) that such activities will he conducted in compliance with the Commission's regulations set forth in 10 CFR Chapter I (except as exempted from compliance in Section 2.D. below);

as ew and a5 a3at 4r Ceabl Ilh .is Elec(,1c. Guemh 3 E. Commonwealth Edison CompanyAis technically qualified to engage in b aap P

the activities authorized by this license in accordance with the Commission's regulations set forth in 10 CFR Chapter I; F. Commonwealth Edison Company has satisfied the applicable provisions of 10 CFR Part 140, " Financial Protection Requirements and Indemnity Agreements," of the Comission's regulations; Exhibit F

4 G. The issuance of this license will not be inimical to the connon defense and security or to the health and safety of the public; H. After weighing the environmental, economic, technical, and other benefits of the facility against environmental and other costs and considering available alternatives, the issuance of Facility Operating License No. NPF-66, subject to the conditions for protection of the environment set forth in the Environmental Protection Plan attached as Appendix R to License No. NPF-37, issued February 14, 1985, is in accordance with 10 CFR Part 51 of the Commission's regulations and all applicable requirements have been satisfied; and I. The receipt, possession, and use of source, byproduct and special nuclear material as authorized by this license will be in accordance with the Commission's regulations in 10 CFR Parts 30, 40 and 70.

2. Based on the foregoing findings regarding this facility, Facility License No. NPF-66 is hereby issued to.foamomms44teli#see Me.

Operatinc;N-LJf 'I- ::'; to read as follows:

co-licensees A. This license applies to Byron Station, Unit 2, a pressurized water reactor, and associated equipment (the facility) owned by Commonwealth Edison Companyt The facility is located in north

. [-(C6C ) and _ central Illinois within Rockvale Township, Ogle County, Illinois Cxhl Illinel5 and is described in the Byron /Braidwood Station's Final Safety Ele 3 M e Gener* Eg Analysis Report, as supplemented and amended, and in the licensee's Cmy-ny

• Environmental Report, as supplemented and amended.

B. Sub.iect to the conditions and requirements incorporated herein, the Commission hereby licenses:

Co licenseep (1) C_ -J b,- C y---f '""d, pursuant to Section 103 of the Act and 10 CFR Part 50, to possess, use and operate the facility at the designated location in Ogle County, Illinois, in accordance with the procedures andlimitationssetforthinthislicense?

Co-Itcensees, (2) ttfkr, pursuant to the Act and 10 CFR Part 70, to receive, possess and use at any time special nuclear material as reactor fuel, in accordance with the Ifmitations for storage and amounts required for reactor operation, as described in the Final Safety Analysis Report, as supplemented and amended; Co- licensee.s (3) 4Ece, pursuant to the Act and 10 CFR Parts 30, 40 and 70, to receive, possess, and use at any time any byproduct, source and special nuclear material as sealed neutron sources for reactor startup, sealed sources for reactor instrumentation and radiation monitoring equipment calibration, and as fission detectors in amounts as required;

• Uc obhy&ns of Ac. co-licensees, ws*R re.5 ped 4o 14e ownerskiY and operakn & as kility are, se.+ % in ne fae; \t ue, Tra.s(ec A y e e w i-and Me. Consf~ch and O erahny p A3 rement dan y 193'l dre.k are a&c4ed 4. de ae4 4 applic.bn filed .n A pril 1 6 n v 7.

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Co- \icensees (4) 4 ego, pursuant to the Act and 10 CFR Parts 30, 40 and 70, to receive, possess, and use in amounts as required any byproduct, source or special nuclear material without restriction to chemical or physical fann, for sample analysis or instrument calibration or associated with radioactive apparatus or components; and Co- 1iceNeef (5) GEGo, pursuant to the Act and 10 CFR Parts 30, 40 and 70, to possess, but not separate, such byproduct and soecial nuclear materials as may be produced by the operation of the facility.

C. This license shall be deemed to contain and is subject to the conditions specified in the Commission's regulations set forth in 10 CFR Chaoter I and is subject to all applicable provisions of the Act and to the rules, I

re9ulations and orders of the Commission now or hereafter in effect; and is subject to the additional conditions specified or incorporated below:

(1) Maximum Power Level CECO D e-Hosasse is authorized to operate the facility at reactor core power levels not in excess of 3411 megawatts thermal (100 percent rated power) in accordance with the conditions specified herein. The items identified in Attachment I to this license shall be completed as specified. Attachment 1 is hereby incorporated into this license.

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(2) Technical Specifications and Environmental Protection Plan The Technical Specifications contained in Appendix A (NUREG-1113),

. as revised through Amendment No. 5 and revised by Attachment 2 to NPF-60, and the Environmental Protection Plan contained in i Appendix B. both of which were attached to License No. NPF-37,

dated February 14, 1985, are hereby incorporated into this license.

I Attachment 2 contains a revision to Appendix'A which is hereby

• incorporated into this license. *t "::n: shall operate the facility in accordance with the Technical Specifications and the Environmental Protection Plan. -Ceco 1

(3) Initial Test Program Any changes to the Initial Startup Test Program described in Chapter 14 of the FSAR made in accordance with the provisions of 10 CFR 50.59 shall be reported in accordance with 50.59(b)

. within one month of such change.

(4) Regulatory Guide 1.97, Revision 2 Compliance The licensee shall submit by March 1,1987, a preliminary report -

describing how the requirements of Regulatory Guide 1.97, Revision 2 have been or will be met. " -'P-- g shall submit by September 1, 1987, the final report and a schedule for implementation (assumino the NRC approves the DCROR by March 1. 1987).

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'D. The facility requires an exemption from the reouf rements of Appendix J to 10 CFR Part 50, Paragraph III.D.2(b)(ii) of the testing of contain-ment air locks at times when containment integrity is not required (SER Section 6.2.6).

This exemption is authorized by law, will not present an undue risk to the public health and safety, and is consistent with the comon defense and security. This exemption is hereby granted. The special circumstances regarding the exemption are identified in the referenced

. section of the safety evaluation report and the supplements thereto.

This exemption is granted pursuant to 10 CFR 50.12 (51 FR 37096 dated October 17,1986). With this exemption, the facility will operate, to the extent authorized herein, in confonnity with the application, as amended, the provisions of the Act, and the rules and regulations of the Comission. co _ g;cewsee.s An exemption was previously granted pur uant to O CFR 70.24. The exemption was granted with NRC mater' s license No. SNM-1916, issued March 4,1985, and relieved the W . from th requi,rynent of havino a criticality alarm system. Therefore, the is exempted from the criticality alarm system provision of 10 CFR 70.24 so far as this

section applies to the storage of fuel assemblies held under this license.

C Ec.o E. ";; 11;;;;;; shall implement and maintain in effect all provisions of the approved fire protection program as described in the

CEC.o 110

::::'; Fire Protection Report through Amendment 8 and the i C EC. licer,;ee's letters dated September 23, 1986, October 23, 1986, i

November 3, 1986, December 12 and 15, 1986, and January 21, 1987, and as approved in the SER dated February 1982 through Supplement l No. 8 sub.iect to the following provision:

CECO T';e lice,.aee may make changes to the approved fire protection program without prior approval of the Commission only if those changes would not adversely affect the ability to achieve and maintain safe shutdown in the event of a fire.

co-I kensee.s F. The li;;;;;; shall fully implement and maintain in effect all provisions of the physical security, guard training and qualification, and safeguards contingency plans previously approved by the Commission and all amendments and revisions to such plans made pursuant to the authority of 10 CFR 50.90 and 10 CFR 50.54(p). The plans, which contain Safeguards Information protected under 10 CFR 73.21, are l entitled: "Comonwealth Edison Company Byron Nuclear Power Station Physical Security Plan, Security Personnel Training and Qualification Plan, and Safeguards Contingency Plan"* with revisions submitted through December 9, 1986.

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4 co-IicenseeS G. Except as otherwise provided in the Technical Specifications or Environmental Protection Plan, the f = e n shall report any violations of the requirments contained in Section 2.C of this license in the following manner: initial notification shall be made within 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> to the NRC Operations Center via the Emergency Notification System with written followup within thirty days in accordance with the procedures described in 10 CFR 50.73(b), (cl, and (e).

co-licensee.s H. The li=nne shall have and maintain financial protection of such type and in such amounts as the Comission shall require in accordance with Section 170 of the Atomic Energy Act of 1954, as amended, to cover public liability claims. {

I. This license is effective as of the date of issuance and shall expire at midnight on November 6, 2026.

FOR THE NUCLEAR REGULATORY COMMISSION b

[

AA Richard H. Vollmer, Deputy Director Office of Nuclear Reactor Regulation Attachments:

1. Work Items to be completed

2. Revision to Appendix A -

Technical Specifications (NUREG-1113)

Date of Issuance: January 30, 1987 -

• The Security Personnel Training and Oualification Plan and the Safeguards Contingency Plan are Appendices to the Security Plan.

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ATTACHMENT 1 TO BYRON STATION UNIT 2 OPERATING LICENSE NPF-66 i

This attachment identifies specific items which must be completed to the Commission's satisfaction in accordance with the operational modes as identified below:

A. The preoperational tests and testing deficiencies in Attachments A and B, respectively, of the November 3,1986 letter from K. A. Ainger to H. R. Denton, as modified by the January 14, 1987 letter from K. A. Ainger to H. R. Denton, shall be completed in accordance with the schedule commitments contained in those attachments.

B. Until testing of the Unit 2 Auxiliary Building ventilation system is

complete, including post test review and approval by PED, the licuise. C.ECo shall not operate Byron Unit 2 at power levels exceeding 30%, unless the Auxiliary Building ECCS leakage can be shown to be below the corresponding limit presented in Figure 1 of the October 24, 1986 letter S. C. Hunsader to H. R. Denton. Leak rate determination shall be in accordance with the October 30, 1986, letter, S. C. Hunsader to H. R. Denton, and performed three times

1. Prior to exceeding 30% power, 4

2. During the first two weeks of April 1987, and

)

3. During the first two weeks of July 1987.

! 4. Should Unit 2 be in an outage condition during the periods j specified in paragraphs B.2, 8.3 above, the leakage rate determinations shall be performed within the first two weeks after returning to power.

CECO .

! In the event that total leakage during any of these tests s GREATER than

! thevalueforthecorrespondingpowerlevel,th;li:::::./shall,within l 1 hour1.157407e-5 days <br />2.777778e-4 hours <br />1.653439e-6 weeks <br />3.805e-7 months <br />, initiate ACTION to reduce the leakage to an acceptable value or reduce power in accordance with Figure 1 within the next 6 hours6.944444e-5 days <br />0.00167 hours <br />9.920635e-6 weeks <br />2.283e-6 months <br />.

CE9Co C. Prior to exceeding 5% power, th; li;;r.;ee shall seal all construction design penetration openings in designated fire barriers. Completion of nine (9) seals may be accomplished as requested in the S. C. Hunsader to J. G. Keppler letter dated January 13, 1987, and in addition,

• penetrations may be left unsealed to facilitate a requirement of a plant modification or plant maintenance requirement; however, the 'ic:::::

shall provide compensatory measures. CECO

ADMINISTRATIVE CONTROLS -

T b 6.1 RESPONSIBILITY stumn moneser l-an emP I 9e et Covmonwale Ed*j 6.1.1 'The i_p ' t-i .t, Byron Station,Ashall be responsible for overall unit operation and shall delegate in writing the succession to this responsibility during his absence.

7 an eQoye ok hmmeal A Edisen, f CcamoMWe*% Edison

% 6.1.2 The Shift Engineera(or during his absence from the control room, a designatedAindividual) shall be responsible for the control room command function. A management directive to this effect, signed by the a'"' '-- Vice President and General Manager-Nuclear Stations shall be reissued to all station personnel on an annual basis. A Assiston+

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6.2 ORGANIZATION of CommenwcoHb Edisc%

OFFSITE Commonwea% Edim 6.2.1 The'offsite organization for unit management and technical support shall be as shown in Figure 6.2-1.

UNIT STAFF 6.2.2 The unit organization shall be as shown in Figure 6.2-2 and:

a. Each on duty shift shall be composed of at least the minimum shift crew composition shown in Table 6.2-1; and

b. At least one licensed Operator shall be in the control room when fuel is in the reactor. In addition, while the unit is in MODE 1, 2, 3, or 4, at least one licenced Senior Operator shall be in the control room;

c. A Radiation Chemistry Technician,* qualified in radiation protection procedures, shall be on site when fuel is in the reactor; il

d. AW. CORE ALTERATIONS shall be observed and directly supervised by either a licensed Senior Operator or licensed Senior Operator Limited

[ to. Fuel Handling who has no other concurrent responsibilities during this operation;

e. A site Fire Brigade of at least five members

• shall be maintained onsite at all times. The Fire Brigade shall not include the Shift Engineer, and the two other members of the minimum shift crew necessary for safe shutdown of the unit and 'any personnel required for other essential functions during a fire emergency; and l

• The Radiation Chemistry Technician and Fire Brigade composition may be less than the minimum requirements for a period of time not to exceed 2 hours2.314815e-5 days <br />5.555556e-4 hours <br />3.306878e-6 weeks <br />7.61e-7 months <br /> in I order to accommodate unexpected absence provided immediate action is taken to

/ fill the required positions.

+CommonwealA Ed: son has overall respoudilif'f f ev- Uni +- oPerahm, ach n3 as agent of Cenfrol Illinea Eleh Gen nj ComPey for operaHen o f U n i t- 2. .

. BYRON - UNITS 1 & 2 6-1

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BYRON STATION DETAll L l UNIT- 1 & UNIT-2 L

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F ATTACWENT 1 The following general information is provided in support of the application for. license amendment.

I. Subsidiary A. Name: Central Illinois Electric Generating Company B. Address: P.O. Box 767 Chicago, IL 60690 C. Business

Purpose:

The Subsidiary will be a corporation established to hold title to the Facility and, through Commonwealth Edison Company as agent, operate the Facility for the purpose of selling the electricity generated thereby in accordance with rates approved by the Federal Energy Regulatory Commission.

D. Organization and Management: The subsidiary has not yet been created. It will be created sometime in the future after favorable consideration by the Illinois Commerce Commission. The subsidiary will be a corporation organized and existing under the laws of the State of Illinois. Its principal office will be located in Chicago, Illinois. All of the stock of the corporation will be owned by Commonwealth Edison Company. All of the Subsidiary's directors and principal officers will be employees of Commonwealth Edison Company.

All will be citizens of the United States. They will be:

Name Subsidiary and Edisor; Position James J. O'Connor Chaiman and President

• Wallace B. Behnke, Jr. Vice Chairman

• Bide L. Thomas Executive Vice President

• Raymond P. Bachert Vice President and Comptroller Harlan M. Dellsy Vice President and General Counsel James W. Johnson Vice President Thomas J. Maiman Vice President Robert J. Manning Vice President Donald A. Petkus Vice President Cordell Reed Vice President George P. Rifakes Vice President J. Patrick Sanders Vice President John J. Viera Vice President Ernest M. Roth Treasurer Klaus H. Wisiol Secretrary

• Also will be members of the Board of Directors of Central Illinois Electric Generating Company

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It is not contemplated that the Subsidiary will have any other employees with the possible exception of a few administrative staff 4

persons. As explained below, all personnel and other resources needed to operate, maintain and decommission the Facility safely will be provided by Commonwealth Edison Company.

II. Facility Under the Facilities Transfer agreement, title to the Facility alone will be conveyed to the Subsidiary. There will be no change in the ownership of the real property underlying the Facility. Commonwealth Edison Company will retain title to that property; however, the subsidiary will be granted an easement in the Byron Station site to permit'the operation, maintenance and decommissioning of the Facility. Commonwealth Edison Company will continue to maintain control over the site exclusion area as described in Section 2.1 of I

the Safety Evaluation Report, dated February, 1982, which was issued by the NRC for Byron Station.

l Title to several structures, equipment and systems that serve both

! units during operation, so-called " common facilities," will be retained by commonwealth Edison Company. No change in the Technical Specifications which 9overn the availability of these common facilities for each unit is

! contemplated. These common facilities are shown to the extent feasible in yellow on Exhibit G. The Facility is depicted in red thereon, and consists of the following structures and equipment:

a. Reactor Containment

b. Reactor Vessel

c. Reactor internals including control rod drive mechanisms, instrumentation and detectors, pressurizer and steam generators including separator and dryer.

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d. Cranes and Hoists used solely in connection with operation of j the Unit

e. Main and Misc. Instrument and Control Panels i

! f. Piping, including valves and supports used solely in connection with operation of the Unit

g. Circulating Water Pumps used solely in connection with operation of the Unit 3

h. Turbine (including foundation) j i. Generator (including foundation) i 1

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s k.. 345 KV Main Power Disconnect Switch (1/2 interest) ,.

i 1. I atural N Draft Cooling Tower III. Technical Oualifications  ;-

The NRC has determined under the operating license that commonwealth i Edison company is qualified to operate the Facility. These circumstance.$ will not change as a result of the proposed license amendment. The Subsidiary has appointed Commonwealth Edison as its agent responsible'for the operation, maintenance and decommissioning of the Facility. Thikrelationshipis established under paragraphs 4 and 13 of the construction and operating i _ Agreement (Exhibit D). Paragraph 13 also states that the Subsidiary shall have

! no right to " assign, convey,. pledge or otherwise transfer any of its rights"

, without the written consent of Commonwealth Edison Company. Moreover, as sole owner of the shares of the Subsidiary, Edison will control all decision-making to assure that the Facility's nuclear operations organization, which was found technically qualified'by the NRC in its Safety Evaluation Report'(SER, dated .i February, 1982), will remain in place. Finally, the NRC will have regulatory  !',

control over the Subsidiary as a co-licensee of the Facility as well as Edison (

) thereby subjecting any change in the operating entity of the Facility to the NRC's approval. ' i s

IV. Financial Oualifications Commonwealth Edison Company is responsible financially for the operation, maintenance, and decommissioning of the Facility under the proposed amendment and as set forth in Article II of the Financing Agreement as that term is used in the NRC's regulations (Exhibit E). In accordance with its

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obligations under those regulations, commonwealth Edison Company commits to i provide the necessary financial resource-to operate, maintain and decommission the Facility safely.

f,i j Commonwealth Edison Company is an electric utility as defined in 10 i CFR Section 50.2, and pursuant to 10 CFR Section 50.33(f) and 57.57(a)(4) no i finding of financial responsibility to operate the Facility was required when the operating license u.ss issued. None is required of Mhe Subsidiary since (i) Commonwealth Edison is assuming full responsibility for the Facility, and c (ii) the subsidiary also qualifies as an electric utility under 10 CFR Section j

50.2 because as the owner of the Facility its legal status properly qualifies s it as a generator and seller of electricity through rates established by a l separate regulatory authority.  ;

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ATTACN erf 2 Antitrust Review commonwealth Edison Company submitted the requisite information under

'10 CPR Section 50.33a and Appendix L to part 50 in connection with the operating license antitrust review for Byron Unit 2. The information was reviewed by the Attorney General and comments were solicited from the public.

On September 18,:1986 the NRC's Director of the Office of Nuclear Reactor Regulation made findings, in accordance with Section 105(c)(2) of the Atomic Energy Act of 1954, as amended, that no significant changes had occurred since the construction permit reviews by the Attorney General and the NRC for Byron Unit 2 which would require a second antitrust review in connection with the OL,-

application. (See 51 Fed. Reg. 34171 (September 25, 1986)).

The following discussion will demonstrate that neither the Agreement which occasions this Amendment application nor'its implementation constitute changed circumstances which raise any significant issues under the antitrust laws or which require a further antitrust red ew.

For a period of five to eight years after the effective date of the Agreement, Edison (and through it, Edison's customers) will be entitled to all

.of the power generated by the Units. That is no different from the situation without the Agreement. At all times, both with and without the Agreement, the price of power generated by the Units, and thus as an economic matter, what is paid for entitlement to the power, is subject to regulatory control. The Illinois Commerce Commission controls the price of power sold to Edison's retail customers and the FERC controls the price of power sold to other utilities (including municipal systems).

What may be different under the Agreement is that after the initial period (the duration of which, 5 to 8 years, is to be determined by the Illinois counerce Commission) is the identity of the utility entitled to the power W , more importantly, what is to be paid for that entitlement. Under Edison's a rship, the situation without the Agreement, the amount paid for entitlement-to the power is determined by traditional rate base / rate of return regulation. Such regulation serves to place both a cap and a floor on the amounts (rates) paid for the electricity generated. However, with the Subsidiary's ownership of the Units under the Agreement, the amounts paid for entitlement to the power may be lower than with Edison's ownership. The subsidiary, unlike Edison, has no service territory and thus, has no assured market for the power. This means that the subsidiary may be unable to sell the power at prices equivalent to those permitted by regulation. In that circumstance, the power will be sold at rates determined by competitive market

. forces. This circumstance is dependent on the options which are exercised by Edison at the end of the initial 5-year term of the Power Supply Agreement, as directed by the Illinois Commerce Commission. This arrangement between 3dison, the subsidiary and the Illinois Commerce Commission is, if anything, pro-competitive.

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S ATTAC35ENT 3

~ t Anelvsis of No'Significant Hazards Consideration The application to amend the operating license to add the Subsidiary as a co-licensee of the Facility involves no significant hazards consideration as demonstrated herein. ,

t The tests for determining whether a proposed amendment involves no significant hazards consideration are set forth in 10 CPR Section 50.92(c).

The proposed amendment involves no change in the Facility, the manner in which i the Facility is operated, or in the personnel who operate it. The proposed change will involve no alterations to the facility itself and no modifications to plant procedures. Therefore, the proposed amendment involves no increase in the probability or consequences of an accident previously evaluated. Nor does it create the possibility of a new or different kind of accident from any accident previously evaluated or involve any reduction in a margin of safety.

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