ML20212H417

Forwards 860430 Scheduling Svcs Agreement Between Georgia Power Co & Oglethorpe Power Corp.Partially Deleted Interconnection Agreement Between Alabama Electric Cooperative,Inc & Ogelthorpe Power Corp Also Encl

ML20212H417
Person / Time
Site:	Hatch, Vogtle, 05000000
Issue date:	08/11/1986
From:	Rhex Edwards GEORGIA POWER CO., TROUTMANSANDERS (FORMERLY TROUTMAN, SANDERS, LOCKERMA
To:	Lambe W Office of Nuclear Reactor Regulation
References
NUDOCS 8608140061
Download: ML20212H417 (80)

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TROUTMAN, SANDERS, LOCKERMAN & ASHMORE -

ATTORNEYS AT LAW CANDLER BUjLOING ATLANTA. GEORGIA 30043 4o4 ese-sooo WRITER 4 O' RECT D6AL NUMSER CABLE: MAESTRO ROBERT P. EDWARDS JR. ess.eao7 August 11, 1986 VIA FEDERAL EXPRESS William Lambe Planning and Program Analysis Staff Office of Nuclear Reactor Regulation United States Regulatory Commission 7920 Norfolk Avenue Room P-420 Bethesda, Maryland 20814

Dear Mr. Lambe:

The purpose of this letter is to answer your questions concerning Georgia Power Company and Oglethorpe Power Corpor-ation bulk power marketing activity as described in the Supplemental Information For Antitrust Review ~ submitted by Georgia Power Company on February 24, 1986.

SEPA. With respect to the Southeastern Power Admini-stration (hereinafter "SEPA") federal power marketing discussed on page ten, this program has been implemented. The only dispute which threatened its implementation was a complaint by a group of cities in North Carolina that SEPA improperly divided the output of the Army Corps of Engineers projects among South-eastern states. That complaint was dismissed in Electricities of North Carolina, Inc. v. Southeastern Power Administration, 621 F. Supp. 358 ('W .D.N.C. 1985), and no appeal was taken from the final judgment affirming SEPA's program.

Oglethorpe Power Corporation. Concerning Oglethorpe Power Corporation's sale to Seminole Electric Cooperative in l

Florida, I would like to confirm that access by Oglethorpe Power Corporation to transmission owned by Georia Power Company is not an issue because of the Integrated Transmission System Agreement, which allows equal access by each party to the transmission facilities of the other party. Enclosed with this letter is a Scheduling Services Agreement dated April 30, 1986 which memorializes certain arrangements and establishes procedures to accommodate the proposed Seminole transaction. Georgia Power Company has also committed to Oglethorpe Power Corporation to l

develop a scheduling services agreement that would be applicable

! to other off-system transactions. Discussions concerning the

! development of such an agreement are in progress. Also enclosed

! is a copy of Oglethorpe Power Corporation's Interconnection I

Agreement with Alabama Electric Cooperative. Oglethorpe Power

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TROUTMAN, SANDERS,LOCKERMAN G ASHMORE o a .,=caeni cwo.=i enorcesiens encout.ons Mr. William Lambe August 11, 1986 Page Two Corporation excised portions it wished to keep confidential from Georgia Power Company. The Oglethorpe Power Corporation Agreement with South Mississippi Electric Cooperative is similar.

As we discussed, the Federal Energy Regulatory Commission has not asserted jurisdiction over bulk power transactions among cooperatives. These specific transactions are the outcome of the discussions involving Oglethorpe Power Corporation which were more generally described in the Georgia Power Company submittal.

Georgia Power Company. The discussions with utilities in Florida and the Carolinas have yielded two new schedules:

Service Schedule EP and a Short Term Power Sales Agreement, dated June 20, 1986 and May 27, 1986, respectively, copies of which are enclosed. The Georgia Power off-system discussions referenced in the earlier submittal are discussions with the Unit Power Sales customers of The Southern Company system concerning modification of their contracts. Other than the modifications previously reported, they have not yet resulted in proposed changes to the Unit Power Sales contracts.

Please do not hesitate to give me a call if any more information or clarification is needed or would be useful. If I cannot answer your questions, I will be able to put you in immediate touch with someone who can.

Very truly yours, 4

Robert P. Edwards, Jr.

Counsel for Applicant RPE, Jr./jdC Georgia Power Company

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4 Enclosures

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SERVICE LIST 1

Fred D. Williams Regional Administrator, Vice President Region II Bulk Power Markets U. S. Nuclear Regulatory Georgia Power Co. Commission 19th Floor, 333 Piedmont Ave., NE 101 Marietta St., NW, Suite Atlanta, GA 303038 Atlanta, GA 30323 2900 L. Clifford Adams, Jr. Resident Inspector Heard, Leverett and Adams Nuclear Regulatory Commission 700 Equitable Bldg. P. O. Box 572 100 Peachtree St. Waynesboro, GA 30830 Atlanta, GA 30303 John Schlecht DeForrest Parrott Vice President, Engineering Board of Water, Light and and Participant Services and Sinking Fund Municipal Electric Authority of GA City of Dalton 1470 Riveredge Parkway 1200 Harris St.

Atlanta, GA 30328-4640 Dalton, GA. 30720 Stanley Hill Steve McGee Oglethorpe Power Corp. Department Manager, Power 2100 E. Exchange Place Generation Tucker, GA 30085 Oglethorpe Power Corp.

2100 E. Exchange Pl.

Rucker, GA 30085-1349 Jeffrey Stair Legal Services Deppish Kirkland, III Oglethorpe Power Corp. Consumers' Utility Counsel 2100 E. Exchange Pl. Suite 225, 32 Peachtree St.

Tucker, GA 30085-1349 Atlanta, GA 30303 i

Mark Gerchick Douglas C. Teper Paul, Hastings, Janofsky & Georgians Against Nuclear Ener(

l Walker 1253 Lenox Cir.

! 12th Floor, 1050 Conn. Ave., NW Atlanta, GA 30306 Washington, D. C. 20036 Billie Pirner Garde

! Citizens Clinic Director Government Accountability Project 303 10th St.

Augusta, GA 30901 i

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SERVICE LIST Richard Conway Richard J. Kelly Vice President & Project Executive Vice President Director Power > Supply Georgia Power Co. Georgia Fower Co.

Route 2, Box 299A 24th Floor, 333 Piedmont ave., NE Waynesboro, GA 30830 Atlanta, GA 30308 Donald O. Foster Ruble A. Thomas Vice President & Project Vice President General Manager Southern Co. Services, Inc.

P. O. Box 299A, Route 2 P. O. Box 2625 Waynesboro, GA 30830 Birmingham, AL 35202 George Bockhold, Jr. J. A. Bailey Vogtle Plant Manager Project Licensing Manager Georgia Power Co. Southern Co. Services, Inc.

Route 2, Box 299A P. O. Box 2625 Waynesboro, GA 30830 Birmingham, AL 35202 L. T. Gucwa Byron L. Holton Chief Nuclear Engineer Integrated Systems Marketing Georgia Power Co. Ga. Power Co.

P. O. Box 4545 20th Floor, 333 Piedmont ave., NE Atlanta, GA 30302 Atlanta, GA 30308 Garey Rozier Vance Mullis Georgia Power Co. Georgia Power Co.

19th Flo:>r, 333 Piedmont Ave., NE 19th Floor, 333 Piedmont ave., NE Atlanta, GA 30308 Atlanta, GA 30308 W. J. Smith Ernest L. Blake, Jr.

Bulk Power Marketing Bruce Churchill Georgia Power Co. Shaw, Pittman, Potts & Trowbridge 20th Floor, 333 Piedmont ave., NE 1800 M. Street, NW Atlanta, GA 30308 Washington, D. C. 20036 l

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a SCHEDULING SERVICES AGREEMENT This Agreement is made and entered into as of this'bD day of April, 1986, by and between GEORGIA POWER COMPANY, a corporation organized and existing under the laws of the State of Georgia

("GPC") and OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION CORPORATION), an electric membership corporation organized and existing under the laws of the State of Georgia ("OPC")(individually a " Party" or collectively the

" Parties"). .

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.01 WHEREAS, GPC and OPC together with the Municipal Electric Authority of Georgia ("MEAG") and the City of Dalton, Georgia (" Dalton") jointly own Plant Robert W. Scherer Units No.

1 and No. 2 (" Plant Scherer") and have previously executed the Plant Robert W. Scherer Operating Agreement dated as of May 15, 1980 (the " Operating Agreement"), pursuant to which GPC was appointed agent for OPC, MEAG, and Dalton for the management, control, operation (including scheduling and dispatching of capacity and energy) and maintenance of Plant Scherer; and

.02 WHEREAS, GPC, OPC, MEAG, and Dalton have entered into a Memorandum of Understanding of even date herewith; and

.03 WHEREAS, OPC desires to sell energy from Plant Scherer to Seminole Electric Cooperative, Inc. (" Seminole") pursuant ~to an agreement between OPC and Seminole, dated April , 1986,.

(the " Seminole Agreement"), during the period April , 1986 to May 31, 1986; and

.04 WHEREAS, energy provided under this Agreement is deemed to be Non-Firm (as herein defined) and is available subject to the conditions hereof; and

.05 WHEREAS, OPC will require temporary energy during an hour in which the net generation from Plant Scherer becomes insufficient to meet the scheduled energy sales to Seminole; and

.06 WHEREAS, GPC, at its option, may supply other energy to OPC for Seminole's account when Plant Scherer is out of service; and 1

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.07 WHEREAS, in order to implement such sale of energy to Seminole, GPC, in accordance with this Agreement and the Memorandum of Understanding, has agreed to schedule energy from Plant Scherer to be delivered by OPC to Florida Power Corporation

("FPC") at the Georgia-Florida state line; and

.08 WHEREAS, the Parties agree that OPC's utilization of energy from Plant Scherer for the purpose of implementing the Seminole Agreement shall neither be nor establish a precedent concerning f u ture sales or purchases of other capacity or energy outside the Georgia territory; and

.09 WHEREAS, OPC and GPC enter into this Agreement for the purpose of providing scheduling, operating, and accounting procedures for the delivery of energy to FPC, providing for Temporary and Optional Energy service from GPC to OPC, and providing for payment from OPC to GPC for all of these services.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, GPC and OPC hereby agree as follows:

ARTICLE _I_ _ DEFINITIONS 1.1 Definitions. For the purposes of this Agreement the following definitions shall apply:

(a) The Delivery Point for all energy delivered to FPC for Seminole's account pursuant to this Agreement is deemed to be the Georgia-Florida state line, and transactions hereunder are contingent upon the GPC-FPC 230 kV interconnection being in service.

(b) Unit Energy is net generation at Plant Scherer, including incremental transmission losses to the Delivery Point, deemed to have been delivered to meet scheduled energy requirements.

(c) Temporary Energy is energy supplied by GPC to OPC for Seminole's account in any hour in which Unit Energy becomes

, insufficient to meet scheduled energy requirements, and will not i

be available for more than one hour beyond the hour in which Plant Scherer becomes inoperative.

(d) Optional Energy is energy supplied by GPC to OPC for Seminole's account, at the option of GPC, when Unit Energy is unavailable.

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(e) Non-Firm shall mean transactions that are not guaranteed and are subject to cancellation by GPC (or its agent) at any time at its sole option but not without justifiable reason.

(f) Unit Power Sales ("UPS") shall mean sales by Southern system companies to non-affiliated companies pursuant to contracts similar to the Amended and Restated Unit Power Sales Agreement between Florida Power & Light Company and the Southern system companies, dated February 18, 1982, as amended.

(g) Long-Term Non-Firm Sales shall refer to sales by S ou the rn system companies to non-affiliated companies pursuant to service schedules such as Service Schedule E to Interchange Contracts such as the one dated October 18, 1979 between Florida Power & Light Company and the Southern system companies.

ARTICLE II - SCHEDULING 2.1 Unit Energy. (a) In order to implement the Seminole Agreement, GPC, subject to the terms and conditions hereof, hereby agrees to schedule Unit Energy to FPC for the account of Seminole, in the quantities and at the times specified herein.

The amount of Unit Energy available for scheduling at Plant Scherer in any hour shall be limited to 230 MWH.

(b) In order to arrange for the appropriate scheduling and delivary of Unit Energy pursuant to this Agreement, beginning with the date of this Agreement and on each workday thereafter during its term, FPC shall notify GPC (or its agent) no later than 9:00 a.m. prevailing Central Time, of (i) Seminole's request for hourly energy to be delivered at the Delivery Point to FPC for Seminole's account for the next 24-hour period commencing at

, 12:00 midnight prevailing Central Time, and for additional 24-hour periods where weekends or holidays are involved; and (ii) the average transaction price (in dollars /MWH) for energy delivered from OPC to Seminole pursuant to the Se'minole Agreement for each 24-hour period.

(c) Following receipt of such request, GPC (or its agent) shall determine during which hours the requested energy is expected to be available for scheduling. Unit Energy shall be deemed unavailable for scheduling from Plant Scherer when (i) the incremental cost of generation on the Southern system to serve territorial requirements and off-system UPS, UPS Replacement Energy, Long-Term Non-Firm Sales, and the sale described herein is projected to reach the level which would load either unit at Plant Scherer to 350 net MW or greater while such unit is in economic dispatch, or (ii) Plant Scherer is anticipated to be off 3

line, or (iii) the GPC-FPC 230 kV interconnection is expected to be out of service. If a limiting condition is expected on the Georgia-Florida interconnection, the availability of Unit Energy will be determined in accordance with Section 3.1(a) below. GPC (or its agent) shall notify FPC no later than 5:00 p.m.

prevailing Central Time of the hours that Unit Energy is anticipated to be available at the requested MW 1evels. This establishes the schedule for Unit Energy deliveries.

2.2 Temporary Energy. Temporary Energy shall not be scheduled.

2.3 Optional Energy. Optional Energy may be supplied by GPC to OPC for Seminole's account at the option of GPC, when Unit Energy is unavailable. In the event Plant Scherer is anticipated to be unavailable for Unit Energy deliveries at any time during the scheduling period, GPC (or its agent) may, at its option, declare Optional Energy available for scheduling. GPC (or its agent) shall notify FPC no later than 5:00 p.m. prevailing Central Time of the hours that Optiona. Energy is anticipated to be available at the requested MW 1evels. This establishes the schedule for Optional Energy deliveries.

ARTICLE III - DELIVERY OF ENERGY 3.1 Unit Energy. (a) GPC (or its agent) shall make a determination 30 minutes prior to the start of each hour in which a schedule for Unit Energy deliveries exists as to the availability of energy to be delivered under the requested schedule. Unit Energy shall be deemed unavailable, for delivery to Seminole under this Agreement, whenever the conditions set forth in Section 2.1(c) exist. If a limiting condition exists on the Southern system side of the Georgia-Florida interconnection, relative priority of this transaction and other Southern-to-Florida transactions will be determined as follows:

All UPS, UPS Replacement Energy and Long-Term Non-Firm Sales will have priority over OPC-Seminole transactions. The relative priority of OPC-Seminole transactions and Southern system Assured Economy transactions shall be determined by the difference between the average transaction price and the projected cost of this OPC-Seminole transaction applied to the schedule for Unit Energy deliveries for the current calendar day, compared to the difference between the Southern system's stated cost and transaction price (in dollars) of its then current Assured Economy transactions, the largest difference having priority.

The projected cost of this OPC-Seminole transaction will be the total of the current month's projected fuel, variable operation and maintenance ("O&M") expense and in-plant fuel handling expense components of the UPS Base Energy Rate for Plant Scherer 4

increased by the percent transmission losses associated with this transaction for the appropriate time period. If the limitation is a result of problems on the Florida side of the i Georgia-Florida interconnection, access to the interconnection '

shall be determined by the Florida utilities sharing the interconnection according to their standard operating procedures.

If at any time GPC (or its agent) receives conflicting instructions from Florida utilities concerning the relative priority of an OPC-Seminole transaction and other Southern system-Florida transactions, GPC (or its agent) may, at its. sole option, interrupt some or all of the OPC-Seminole transaction.

(b) GPC will determine the amount of Unit Energy delivered from Plant S c'..e re r ba s e d on a projection of incremental losses from Plant Scherer to the Delivery Point. The projection of losses will be determined using the existing algorithms of the Southern system for incremental transmission losses. The total incremental losses thus determined for each hour of the projected period will be converted to average percent incremental losses for a minimum of two time periods a day. These time periods are expected to consist of the hours beginning 7:00 a.m. and ending 10:00 p.m. prevailing Central Time, designated as the peak period, and the hours beginning 10:00 p.m. and ending 7:00 a.m.

prevailing Central Time, designated as the valley period. The percent incremental transmission losses determined as described herein will be applied to the schedule for Unit Energy deliveries to determine the hourly allocation of Unit Energy to Plant Scherer. GPC will be responsible for monitoring the actual incremental losses and making appropriate corrective adjustments in subsequent scheduling periods in order to assure that all of the energy delivered as Unit Energy is allocated to Plant Scherer in the appropriate time periods.

3.2 Temporary Energy. Temporary Energy shall be supplied by GPC to OPC for Seminole's account in an hour in which the Unit Energy becomes insufficient to meet the requirements for scheduled energy. The delivery of Temporary Energy will be discontinued as soon as practicable.

3.3 Optional Energy. For any hour in which a schedule for Unit Energy deliveries exists and Unit Energy is deemed to be t

unavailable, GPC may convert the schedule to Optional Energy and continue deliveries until it is determined that Unit Energy is l again available as scheduled. Optional Energy shall be delivered l to OPC for Seminole's account at Plant Scherer, and OPC shall be responsible for transmission losses associated with its delivery l to FPC as determined in Section 3.1(b). The delivery of Optional Energy may be discontinued at any time at GPC's sole option.

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ARTICLE IV - BILLING AND ACCOUNTING 4.1 Unit Energy. (a) Unit Energy shall be subtracted from I the actual hourly net generation at Plant Scherer and allocated l to OPC's account prior to the determination of any other energy I allocations (including GPC, OPC, MEAG and Dalton retentions).

Unit Energy shall be allocated prorata to whichever units have net positive energy production within an hour.

(b) In the event that Unit Energy plus OPC's peaking energy requirements from Plant Scherer as determined under GPC's current effective Partial Requirements Tariff exceeds OPC's retained energy in a unit for the current month as determined by the Operating Agreement, OPC-shall purchase the additional energy from GPC at the current month's fuel, variable O&M expense, and in-plant fuel handling expense components of the UPS Base Energy Rate for Plant Scherer as determined in the current month's UPS billing.

, 4.2 Temporary Energy. (a) Temporary Energy will have been delivered if the net generation at Plant Scherer in any hour is less than the schedule for Unit Energy deliveries increased by the percentage transmission losses associated with this transaction for the appropriate time period. The amount of Temporary Energy shall be determined by subtracting the net generation at Plant Scherer from the schedule for Unit Energy deliveries increased by the percentage transmission losses associated with this transaction for the appropriate time period.

(b) Temporary Energy will be priced by GPC to OPC at the Southern system's incremental cost above all transactions for the current hour plus $5.00/MWH, or the current month's fuel, variable O&M expense, and in-plant fuel handling expense components of the UPS Base Energy Rate for Plant Scherer, whichever is higher.

4.3 Optional Energy. Optional Energy, when delivered, will be priced by GPC to OPC at the current month's fuel, variable O&M expense, and in-plant fuel handling expense components of the UPS Base Energy Rate for Plant Scherer.

4.4 Scheduling and Coordination Fee. In addition to all other payments required to be made hereunder, OPC shall pay to GPC S0.50/MWH for all energy delivered to the Delivery Point pursuant to this Agreement during a month to compensate GPC for hard-to-identify and hard-to-quantify costs, including costs associated with scheduling, coordination and accounting.

4.5 Billing and Payment. By the tenth working day of each month, or as soon thereafter as practicable, GPC will provide OPC 6

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with an invoice containing preliminary accounting of the energy -

delivered by transaction and the costs associated therewith.

This preliminary accounting and costs will be replaced with actual values for energy and costs when available, and the difference applied as an adjustment to the next preliminary bill.

Upon termination of this Agreement, all billings will be calculated on an actual basis as soon as practicable. All Plant Scherer variable O&M costs and in-plant fuel handling costs associated with energy delivered to Seminole pursuant to this Agreement will be replaced with the 1986 average variable OEM costs and in-plant fuel handling costs for Plant Scherer when such costs become available and an appropriatesbilling adjustment will be issued. OPC will make payment for invoices rendered hereunder within fifteen days of receipt.

4.6 Initial Costs. OPC will reimburse GPC for all of Southern Company Services' initial developmental costs, including appropriate overheads associated with this Agreement, programming changes to Southern's on-line Power Management System, modification of billing procedures and programs, and administrative efforts to formulate and implement this Agreement.

All such costs are estimated to be S23,000 which shall be paid upon the execution of this Agreement.

ARTICLE V - ADMINISTRATION 5.1 Non-Firm Transactions. The transactions provided for in this Agreement are Non-Firm, and GPC's scheduling and coordinating obligations hereunder may be interupted by GPC whenever (i) the limiting conditions described in Section 2.1(c) exist; or (ii) conflicting instructions from Florida utilities are received as described in Section 3.1(a); or (iii) the output of Plant Scherer is necessary to continue service to the Southern territorial system; or (iv) GPC reasonably expects continuation

! or implementation of a transaction may cause an adverse economic consequence to GPC under The Southern Company System Intercompany Interchange Contract, dated October 28, 1983.

5.2 Florida Interface Rules. Prior to scheduling any transactions hereunder, OPC shall provide GPC with written instructions approved by each of the Florida utilities affected by transactions over the Southern system-Florida interface, setting forth Florida's characterization of the OPC-Seminole transactions to be implemented hereunder, the priority of such transactions in relation to other Southern system-Florida transactions, and any other special scheduling instructions or considerations. For purposes of this section Florida utilities shall include, without limitation, Florida Power & Light Company, Jacksonville Electric Authority, Florida Power Corporation and

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the city of Tallahassee, Florida.

5.3 Seminole Capacity Resources. OPC warrants that Seminole is an electric utility with load responsibility, resources, and reserves such that a purchase of Non-Firm energy is appropriate and useable on its system. OPC will take all steps necessary, including obtaining an appropriate contractual commitment from Seminole, to assure that Seminole possesses capacity reserves (owned or purchased) in sufficient quantities to permit it to purchase Non-Firm energy during each hour that energy hereunder is made available.

5.4 Regulatory Approvals. The Parties recognize that this contract is required to be filed with and approved by certain regulatory agencies including the Federal Energy Regulatory Commission ("FERC"). To this ent. GPC agrees to take steps promptly to file this Agreement with FERC and shall seek a waiver of the notice requirements of the' Federal Power Act and Section 35.3 of FERC's regulations so as to obtain an effective date contemporaneous with the effective date of this Agreement. In the event this Agreement is changed or modified by any regulatory agency or authority, either Party, if adversely affected, shall have the right to terminate this Agreement immediately.

Furthermore, OPC will take all steps reasonably requested by GPC to obtain FERC acceptance of the termination date of this Agreement specified herein. In any event, OPC agrees that neither it nor Seminole will seek to have any transaction scheduled under this Agreement after May 31, 1986.

5.5 ITS Load Resgonsibilitie_s. The Parties agree that deliveries of energy to FPC hereunder will be as though made by OPC on the ITS from Plant Scherer, and if such transaction causes any increase in OPC's load responsibility under the ITS by creating a new annual peak for OPC, this responsibility will be accepted by OPC in a subsequent ITS Settlement.

5.6 Use of OPC Capacity. The Parties agree that the

] allocation of Unit Energy from Plant Scherer hereunder is a utilization of OPC's reserve capacity in Plant Scherer for this specific transaction only, and this use neither is nor establishes a precedent for the future use of OPC's capacity.

5.7 Unique Circumstances. The Parties hereto agree that the circumstances leading to this Agreement are unique, and that this Agreement therefore establishes no precedent for any other services and will not be relied upon by either Party for any purpose other than for the services and payment provided for hereunder.

5.8 Indemnification. OPC agrees to indemnify GPC and save 8

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1 GPC harmless from any claim whatsoever brought by Seminole, l another Florida utility or any other party resulting from GPC's performance hereunder; provided, however, nothing contained herein shall relieve GPC of the consequence of its negligence or of any breach of this Agreement.

5.9 Operating Committee. GPC and OPC shall each appoint one representative and one alternate to act for it in matters pertaining to the interconnected operation of its system hereunder and the detailed operating arrangements for delivery of energy hereunder. The two representatives, or their alternates, shall comprise the Operating Committee. Evidence of such appointments shall be given by written notice to each of the Parties, and auch appointments may be changed at any time by similiar notice.

ARTICLE VI - MISCELLANEOUS 6.1 Term. This Agreenent shall become effective as of the date first appearing above, and shall terminate at midnight on May 31, 1986.

6.2 Force Majeure. The term " Force Majeure" shall mean acts of God, the enforcement or adoption of legislation or lawful rules, regulations or orders of any governmental body, acts of public enemy, riots, strikes, or other industrial disturbances, labor or material shortages, fires, explosions, breakdowns of or damage to generating plants, structural failure of facilities, or other causes of a similar nature which are beyond the reasonable control of GPC or OPC and wholly or partly prevent GPC or OPC from performing its obligations hereunder. If because of Force Majeure either GPC or OPC is unable to carry out its obligations under this Agreement, and if such Party promptly gives the other Party hereto written notice of such Force Majeure, specifying the nature, extent, and expected duration of such Force Majeure, the obligations and liabilities of the Party giving such notice and the corresponding obligations and liabilities of the other Party shall be suspended to the extent made necessary by and during the continuance of such Force Majeure.

6.3 Notices. Any notices, billing information and invoices required by this Ag;eement shall be deemed properly given if mailed postage paid, to Oglethorpe Power Corporation, 2100 East Exchange Place, P. O. Box 1349, Tucker, Georgia, 30085-1349, Attention: Department Manager, Power Contracts in the case of OPC, and to Georgia Power Company, 333 Piedmont Avenue, Atlanta, Georgia 30308, Attention: Manager, Bulk Power Marketing 333/20, '

in the case of GPC.

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e 6.4 Transfers and Assigns. OPC shall not transfer or assign its rights and obligations under this Agreement without GPC's prior written consent. The terms of this Agreement shall be binding upon the Parties, their successors and assigns.

IN WITNESS WHEREOF, the parties hereto have duly executed this Scheduling Services Agreement by their duly authorized representatives as of the date first above written.

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e "GPC" GEORGIA OWER COMPANY By: 3 Its: VP - Bulk Power Markets Attest:

By:

(Title)

"OPC" OGLETHORPE POWER CORPORATION

-(AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION CORPORATION)

Its: GeneraIMana/c /

Attes .

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By: ) /Ml' Corporate Counsel ' __

(Title) 11 4

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INTERCONNECTION AGREEMENT -

BETWEEN ALABAMA ELECTRIC COOPERATIVE, INC.

AND OGLETHORPE POWER CORPORATION

Interconnection Agreement between

- -- Alabama Electric Cooperative, Inc.

and Oglethorpe Power Corporation TABLE OF CONTENTS Page 1

1.0 Service Obligations . . . . . . . . . . . . . . . . . . . . . . . .

1 1.01 Services to be Rendered ....................

1 1.02 Initial Service Schedules ................... a .

1.03 Changes in Service Schedules . . . . . . . . . . . . . . . . . . 1 2.0 Service Arrangements ....................... 1,,

2.01 Operating Committee ...................... 1 2

2.02 Interconnection Facilities . . . . . . . . . . . . . . . . . . . 2 2.03 Metering . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.04 Operating Responsibilities . . . . . . . . . . . . . . . . . . . 2 2.05 Wheeling Responsibilities ................... 3 2.06 Operating Standards ...................... 3 Scheduling ............................ 4 3.0 .

3.01 Specification ......................... 4 3.02 Methodology ............................A 4

4.0 Limits of Liability . . . . . . . . . . . . . . . . . . . . . . . .

4.01 Force Majeure ......................... 4 5

5.0 Billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.01 Schedule o f Pa yments . . . . . . . . . . . . . . . . . . . . . . 5 5

5.02 Maintenance of Records . . . . . . . . . . . . . . . . . . . . . 6 5.03 Billing Meters . . . . . . . . . . . . . . . . . . . . . . . . .

....... 6 5.04 Consolidation .................. 6 5.05 Applicability to Schedules . . . . . . . . . . . . . . . . . . .

6 6.0 Term ...............................

7 7.0 Terminatica . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 8.0 Agency ..............................

8 9.0 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . .

01851 1

10.0 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 10.01 No Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 10.02 Further Executions . . . . . . . . . . . . . . . . . . . . . . . 9 10.03 Governing Law ......................... 9 10.04 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10.05 Section Headings Not to Af feet Meaning . . . . . . . . . . . . . 9 10.06 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . . 9 10.07 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10.08 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SIGNATURE PAGE .............................11 APPROVAL OF RURAL ELECTRIFICATION ADMINISTRATION . . . . . . . . . . . . 12 SERVICE SCEDULE "A" . . . . . . . . . . . . . . . . . . . . . . . APPENDIX A SERVICE SCEDULE "B" . . . . . . . . . . . . . . . . . . . . . . . APPENDIX B SERVICE SCEDULE "C" . . . . . . . . . . . . . . . . . . . . . . . APPENDIX C SERVICE SCHEDULE "D" . . . . . . . . . . . . . . . . . . . . . . . APPENDIX D SERVICE SCEDULE "E" . . . . . . . . . . . . . . . . . . . . . . . APPENDIX E l 01851 11

THIS AGREEENT, dated as of the d.3_ day of Ctk)W , 1984, between ALABAMA ELECTRIC COCPERATIVE, INC., an electric cooperative organiIed and existing under the laws of the State of Alabama (AEC), and OCLETHORPE POWER _ _

CORPORATION, an electric cooperative organized and existing under the laws of the State of Georgia (OPC). (AEC and CPC hereinafter collectively called the

" Participants".)

WITNESSETH AEC and OPC are generation and transmission cooperatives engaged in the production and supply of electric power and energy to their respective members located in the States of Alabama and Georgia. The Participants desire by this Agreement to establish a contractual basis for the interconnection of their electric systems, and for the direct and indirect exchange of electric power and energy.

NOW, TEREFORE, in consideration of the premises and the mutual agreements , ,

herein set forth, AEC and OPC hereby agree as follows:

1.0 Service Obligations.

1.01 Services to be Rendered.

A. Each Participant will provide, on an as available basis, electric power and energy requested by the other Participant in accordance with the Service Schedules provided for herein.

1.02 Initial Service Schedules.

A. The initial Service Schedules indicated below are attached to this Agreement and incorporated herein by reference:

Service Schedule A - Emergency Energy Service Schedule B - Short Term Power and Energy .)

Service Schedule C - Economy Energy Service Schedule D - Wheeling (Transmission) Service Service Schedule E - Maintenance Energy 1.03 Changes in Service Schedules.

A. The Participants contemplate that the initial Service Schedules provided for above may from time to time be amended, modified, deleted entirely or that new Service Schedules may be added. Each such change will be effective only upon agreement by both Participants and, when agreed to, will be fully incorporated into the terms of this Agreement.

2.0 Service Arrangements.

2.01 Operating Committee.

A. Each Participant shall designate a representative and an alternate for an Operating Comittee which will meet annually and more ofter.

if requested by either Participant.

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B. Participants on the Operating Committee will coordinate operation I under this Agreement, including the establishment of operating and I maintenance procedures pursuant to the Service Schedules hereunder.

Further, this Committee shall be the appropriate forum for the discussion of all issues regarding this Agreement.

C. The Operating Committee shall be responsible for periodic review of current and future generation, transmission and interconnection plans as they may affect this Agreement.

D. This Committee shall have no power to modify the terms of this Agreement or any Service Schedule hereunder.

2.02 Interconnection Facilities.

A. The initial point of interconnection shall be at the Walter F. , ,

George Substation. The Participants understand that this initial point of interconnection may be changed or that additional points of interconnection may be added. Any deletion or addition of any point of interconnection must be agreed to by both Participants. - -

2.03 Metering.

A. Each Participant, at its cost, shall provide all necessary metering equipment at each interconnection point. Each Participant shall be responsible for the operation and maintenance of such equipment.

B. The metering equipment shall be used for billing purposes, and will measure and record:

(a) "in" and "out" kilowatt-hours per clock hour, (b) "in" and "out" kilovar-hours per clock hour, and (c) "in" and "out" total kilowatt-hours at these interconnection facilities.

C. Each Participant, upon request, shall provide the interconnection data recorded at its interconnection facility.

D. Each Participant will be responsible for supplying such data as may be necessary to their respective control centers.

2.04 Operating Responsibilities.

A. Each Participant shall be responsible for the operation and maintenance of any facilities and related equipment under its control which are necessary to the implementation of this Agreement.

B. Each Participant agrees to install, or arrange for the installation of, underfrequency relays on its respective system which will automatically disconnect a minimum of 40 percent of its system load in four 10 percent steps as follows:

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(a) Disconnect to a mininum of 10 percent of system load when system frequency drops to 59.5 hertz. ..

(b) Disconnect to a minimum of a second 10 percent of system load when system fregtency drops to 59.2 hertz.

(c) Disconnect a minimum of a third 10 percent of system load when system freqJency drops to 58.8 hertz.

(d) Disconnect a minimum of a fourth 10 percent of system load when system frequency drops to 58.4 hertz.

C. The Participants agree that the steps outlined in subparagraph B are consistent with the operating requirements of the Southern Company with which both of the Participants are interconnected. The Participants further agree that to the extent these steps may be modified by the Southern Conpany in its relationship with the individual Participants, this Agreement shall be automatically i modified to reflect those changes. , . ,

D. The installation of any additional underfrequency relays beyond those already installed shall be determined and agreed on by both '

Participants. -

2.05 Wheeling Resoonsibilities.

A. Each Participant shall arrange for transmission service required, if any, and pursuant to this Agreement directly to the utility with which it is connected and which is to perform the wheeling service.

B. The finalizing of all necessary wheeling arrangements are a condition precedent to either Participant's obligations hereunder.

2.06 Operating Standards.

A. Each Participant agrees to discharge its obligations under this Agreement in accordance with Prudent Utility Practice. For the purpose of this Agreement, " Prudent Utility Practice" at a particular time shall mean any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry prior to such time, or any of the practices, methods and acts which, in the exercise of reasonable judgement in light of the facts known at the time the decision was made, could have been expected to accomplish the intent of this Agreement at the lowest reasonable cost consistent with good business practices, reliability, safety and expedition. At a minimum, each Participant agrees that its conduct and operations relative to this Agreement will conform to the applicable guidelines of the North American Electric Reliability Council Operating Manual as the same may, from time to time, be amended.

B. The Participants will normally operate their systems in parallel.

Either Participant may interrupt parallel operation where required for satisfactory operation of its system.

01851 C. Each Participant agrees to use due diligence to protect, operate and maintain its respective system so as to avoid or minimize the likelihood of system disturbances which might impair the reliability of the other Participant's system.

O. Each Participant shall take such steps as to ensure that its actions do not impose an undue burden on the other Participant's kilovar t

flow.

3.0 Scheduling.

3.01 Specification. -

A. For any week in which the Participants have agreed to a transaction under one of the applicable Service Schedules, a weekly schedule specifying power and energy deliveries on an hourly basis will be

• furnished by the buyer to the seller not later than Noon on Thursday '

of the week preceding the week in which the transaction is to occur.

B. A scheduling week shall be defined as Sunday through Saturday. ,

C. Scheduling shall be performed on prevailing Central Time.

3.02 Methodology,.

A. Schedule change may be made on verbal notice unless otherwise specified in the Service Schedule.

B. All schedule changes shall be confirmed in writing within 3 working days following the schedule change.

C. Hourly schedules will be integrated depending on the rate of change of each schedule.

D. The ramp rate for schedule changes will be in accordance with l standard industry practice applicable at the time of the schedule change.

4.0 Limits of Liability.

4.01 Force Majeure.

A. Each Participant shall exercise due diligence to meet scheduled transactions, but neither shall incur any liability to the other for failure to perform a scheduled transaction due to causes beyond its control or any other reasons due to force majeure.

i Force majeure shall mean any act, delay or failure to act on the part of any state or federal government authority whether legislative, executive, judicial or administrative including delay or failure to act by any government authority in the issuance of any 01851 ..

necessary permits or licenses, and the prohibiting of acts necessary to performanco hereunder or the permitting of any such acts only subject to unreasonable conditions, acts of God, damage, accidents, or disruptions including but not limited to fire, flood, explosions, tornado, hurricane, earthquake, windstorm, or equipment breakdown, failure or delay beyond the Participant's control in securing materials, equipment, services or facilities, labor difficulties such as strike, slowdowns, or shortages, delays in transportation, civil unrest disturbances, demonstrations, or any other cause beyond the Participant's control. In no event shall lack of funds be considered force majeure.

B. In the event any cause arises which would impair a Participant's system reliability or ability to meet its own load requirements, deliveries and/or receipts of power and energy may be suspended as necessary.

5.0 Billing.

5.01 Schedule of Payments.

A. All transactions under this Agreement will be billed by calendar month; bills will be due and payable within 10 days of receipt, or

20. days after the end of the month in which the bill is received, whichever is later.

B. Payments due from a Participant hereunder, not made when due, shall bear interest compounded daily until paid, at a rate per annum which shall be based upon the higher of (i) the CFC line of credit rate on the date the bill was initially received or, (ii) the CFC line of credit rate on the date the bill became overdue.

5.02 Maintenance of Records.

A. Each Participant will keep detailed records of all transactions under this Agreement sufficient to determine all capacity and energy transactions on an hourly basis including transactions for wheeling and any necessary metering adjustments. Such records shall be available upon request by the other Participant.

B. In any transaction involving wheeling services with a third party,'

the Participant directly connected to the wheeling utility will pay the charges for such service, and add such payment as a separate item 6 to the monthly bill of the Participant requesting service.

C. Each Participant will maintain an " inadvertent energy account" to account for inadvertent transfers of energy resulting from interconnection. This account will be cleared in accordance with the guidelines in the North American Reliability Council Operating Manual. g 01851 _ _ _ _ _ _ - _ _ _ _ - _ _ _ . _ . . _ - . .

I 5.03 Billino Meters.

A. Meters will be maintained within a tolerance of f,1X and tested at least annually. Each Participant shall provide to the other the i

results of such annual testing.

B. Where a meter is found to be out of tolerance' all billings related to that meter will be adjusted retroactively to the last date on which that meter was checked or to a date 60 days preceding the most recent test date, whichever results in a shorter adjustment period.

C. In addition to the annual meter testing provided for in 5.03 A.

above, either Participant may request in writing that the other perform a test on the latter's metering equipment. Within 45 days

after such request, a test will be performed on the metering i

equipment specified in the written request. If the test proves that , .

the equipment is within the + IX tolerance provided for above, the requesting Participant will ' pay all reasonable cost of performing this test. Payment to be made within 10 days of billing. In the event the metering equipment tested exceeds the tolerance limits,- '

'! all prior billing related to that metering equipment will be adjusted in accordance with 5.03 B. and the owner of the equipment shall bear all cost associated with testing.

l 5.04 Consolidation.

A. The billing between Participants for all transactions shall be consolidated on a monthly basis.

J 5.05 Applicability to Schedules.

< A. Billings will be at the rates provided in the applicable Service Schedule as amended from time to time.

B. In each Service Schedule there are certain services for which the charge will be agreed on in advance of the transaction. For those services for which a charge is specified, the Participants recognize

that the costs of providing those services may change during the term of this Agreement. These charges will be reviewed annually and

adjustedifnecessarybyagreementofbothParticipants.

1

C. Any Participant desiring to purchase electric power and energy under this Agreement shall be ultimately responsible for all wheeling charges incurred, if any, in accomplishing such sale, j 6.0 Term.

A. This Agreement shall become effective upon execution by both j Participants and receipt of all required regulatory approval and shall continue in effect until December 31, 1989 Unless sooner terminated under Paragraph 7 hereof.

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B. Following the initial term or any extension hereof, this Agreement shall be extended for additional periods of one year unless at least thirty days prior to the end of the initial period or any extension i t

hereof either Participant notifies the other in writing of its intent not to extend this Agreement.

7.0 Termination.

A. It is the intent of the Participants to this Agreement that within 90 days of the effective date of this Agreement, a test transaction be held to verify the mutual benefits contemplated by the Participants. Within 60 days after the test, either Participant may terminate this Agreement by 30 days written notice to the other Participant.

B. In the event the performance under this Agreement subjects either " -

Participant hereunder to regulation by the state regulatory body of the other Participant or to taxation under the law of the state of the other Participant, the Participant so affected may terminate this Agreement upon 30 days written notice to the other Participant. ' '

C. In the event continued participation in this Agreement threatens the system reliability or safety of either Participant, that Participant may terminate this Agreement upon 10 days written notice to thy other Participant.

8.0 Agency.

A. Each Participant recognizes t ist in order to fulfill its obligations hereunder, either Participant may appoint one or more agents to act on its behalf.

B. In the event either Participant appoints any such agent, it shall promptly notify the other Participant and outline in detail the role

of such agent.

C. Each Participant agrees to coordinate with and work with any agent appointed by the other Participant to the extent necessary to fulfill the intent of this Agreement.

D. Notwithstanding any language herein to the contrary, either Participant may terminate this Agreement in the event any i

appointment of an agent by the other Participant threatens the system reliability or safety of the Participant receiving notice of such appointment. Such termination shall be accomplished by 10 days written notice.

E. Except as may be included in any Schedule to this Agreement, each Participant shall be responsible for any charges incurred by virtue of its use of any agent.

01851 . _ _ _ .- - . - - - - _ . - _ _ _ _ _

9.0 Indemnification.

A. Each Participant shall be solely liable for, and will indemnify the other against, all damages, injuries, claims, losses, expenses, suits and other liabilities, including reasonable attorney's fees, arising from its own activities under this Agreement, or from its operation, ownership, maintenance or use of its facilities used in the performance of this Agreement, or from the sole negligent acts or omissions of its agents, servants, employees, and contractors.

Each Participant will assume responsibility for all loss and expense '

resulting from injury or death of its employees arising from operations under this Agreement, and will indemnify the other against all such liability, except where such injury or death is caused by the sole negligence of the other Participant. Both Participants shall equally bear all losses, expenses, and other liabilities to any person caused by the joint or concurring - -

negligent acts or omissions of both Participants or their respective agents, servants, employees, and contractors. A Participant entitled to indemnity must promptly tender defense of a '

claim to the other, and fully cooperate with the other in' investigation and defense of the claim. A Participant providing indemnity to the other shall be subrogated to all of the rights of such other, which will fully cooperate with the indemnifying Participant in obtaining or enforcing any rights of subrogation.

Neither Participant, by providing indemnity to the other, shall be held to be estopped or to have waived its right to seek indemnity or contribution from any third party who may have caused or contributed to the injury, loss or damage. This indemnity agreement is undertaken by both Participants knowingly and voluntarily, and each acknowledge the mutual sufficiency of consideration for this agreement.

10.0 Miscellaneous. i 10.01 No Delay.

A. No disagreement or dispute of any kind between or among any of the Participants concerning any matter, including without limitation, the amount of any payment due hereunder or the correctness of any charge made hereunder, shall permit any Participant to delay or withhold any payment pursuant to this Agreement. In the event a portion of a bill or charge hereunder is disputed, the undisputed amount will be promptly and timely paid. Where payment of any disputed amount is withheld, the portion of such amount which is ultimately shown or agreed to be correct will bear interest from the original due date at the rate specified in Section 5.01(B) hereof.

Likewise, where any bill or charge is paid under protest or later discovered to have been over-paid, the amount of any refund ultimately shown or agreed to be due shall bear interest from the date of original payment at the rate specified in Section 5.01(B) hereof.

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10.02 Further Executions.

A. From time to time after execution hereof, the Participants will execute such instruments and other documents, upon the request of another Participant, as may be necessary or appropriate, to carry out the intent of this Agreement.

10.03 Governing Law.

A. The validity, interpretation, and perfoYmance of this Agreement and each of its provisions shall be governed by the laws of the state in which any Defendant to any suit brought under this Agreement is located.

10.04 Notice.

a .

A. Except as may be required by subparagraph 2.01 hereof, any notice, request, consent or other communication permitted or required by this Agreement shall be in writing and shall be deemed given when deposited in the United States Mail, first class postage prepaid,- '

and if given to AEC shall be addressed to:

General Manager ,

Alabama Electric Cooperative Post Office Box 550 Andalusia, Alabama 36420 and if given to OPC shall be addressed to:

General Manager Oglethorpe Power Corporation 2100 East Exchange Place Post Office Box 1349 Tucker, Georgia 30085-1349 unless a different individual or address shall have been designated by the respective Participant by notice in writing.

10.05 Section Headings Not to Affect Meaning.

A. The descriptive headings of the various Sections of this Agreement have been inserted for convenience of reference only and shall in no way modify or restrict any of the terms and provisions thereof.

10.06 No Partnershio.

A. Notwithstanding any provision of this Agreement, the Participants do not intend to create hereby any joint venture, partnership, association taxable as a corporation, or other entity for the conduct of any business for profit. The Participants agree timely to take all voluntary action as may be necessary to be excluded from i

01851 .- _ _ . - .. _. . - - - _ _ . - - _ . _ - - - - .

treatment as a partnership under the Internal Revenue Code of 1954, as amended, and, if it should appear that one or more changes to this Agreement would be required in order to meet the intent of this Paragraph 10.06, the Participants agree to negotiate promptly in good faith with respect to such changes.

10.07 Amendments.

A. This Agreement may be amended by and only by a written instrument duly executed by each of the Participants hereto.

10.08 Counterparts.

1 A. This Agreement may be executed simultaneously in two or more counterparts, each of which shall b:: deemed an original but all of which together shall constitute one and the same instrun.ent.

+

01851 _ _ _ _ __ _ . - - - - . _ _ _ , _ - - _ _ _ - _ _ _ _ - _ _ _ . . . _. .

This Agreement shall not be effective until approved by the Administrator of the Rural Electrification Administration.

ALABAMA ELECTRIC COOPERATIVE BY: O />u du/> m W ITS: V 10 ,,d:Q ,L'r v

ATTEST: ,

$/ / : n.fM//

a .

(SEAL)

OGLETHORPE POWER CORPORATION yY:

ITS:

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General Masag f ATTEST:

MMk (SEAL) 01851 - _ - - - -

APPROVAL OF RURAL ELECTRIFICATICN ADMINISTRATION The foregoing Interconnection Agreement was submitted by Alabama Electric Cooperative, an REA Borrower, and by Oglethorpe Power Corporation, an REA borrower, pursuant to the terms of their loan contracts with the Rural Electrification Administration, and said Agreement is hereby approved solely for the purpose of such loan contracts.

RURAL ELECTRIFICATICN ADMINISTRATION BY:

ITS:

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APPENDIX A i

SERVICE SCTOULE "A" l

l EERGENCY ENERGY j Under Agreement of Odch4.f" M , 4 ,

between Alabama Electric Cooperative and Oglethose Power Co@ oration, i

All of the services contemplated by this Schedule are on an 'as, if, and i

when available" basis, in the sole judgement cf the Participant requested to provide the service.

Neither Participant shall have any liability to the t

other for any inability to provide a requested service, i 1.01 This Schedule applies when:

4 (a) The buyer is suffering a forced outage or other system emergency.

which impairs the buyer's ability to meet its system loads; and .

(b) The buyer requests the aid of the seller; and 2

(c) The seller, in its sole judgement, can provide the requested service

' without imposing a hazard or economic burden on seller's operations and without impairing seller's own system loads.

2.01 No obligation to furnish emergency power under this Schedule shall l be longer than 72 consecutive hours in any one emergency.

I I

3.01 In the event that the buyer determines that the emergency condition will continue past 72 consecutive hours then arrangements must be made to

! supply its needs as per existing Schedules in this or other Agreements.

1 l 4.01 The bu er will a for all a re *1ved nder this chedule b i

of l

4.03 Prior to and during the transaction, the seller will furnish j estimated incremental energy cost information hourly (as shown by seller's

,1 economic dispatch program) which will be used for billing.

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APPENDIX 8 SERVICE SCHEDLA.E "B" SHORT TERM POWER AND ENERGY Under Agreement of CPMof"* M 3,19 , between Alabama Electric Cooperative and Oglethorpe Power CoIporation.

All of the services contenplated by this Schedule are on an "as, if, and when available" basis, in the sole judgement of the Participant requested to provide the service. Neither Participant shall have any liability to the other for any inability to provide a requested service.

1.01 Either Participant may request a reservation of power and associated energy from the other on a weekly basis. If the seller has power and energy available, then the Participants will agree on the amount of capacity to be supplied, the period during which capacity is to be supplied, a schedule of' '

deliveries, and the price of such capacity and estimated energy cost.

1.02 Each transaction will be confirmed in writing prior to commencement of deliveries, or as soon as possible thereafter.

2.01 During any period for which Short-Term Power and Energy has been scheduled, the seller will deliver such power and energy on buyer's call up to the amount reserved.

2.02 Powe. reserved under this Schedule is nor>-firm. The seller shall not be obligated to supply or cause to be supplied, and buyer shall not be obligated to pay for, any capacity reserved but not able to be supplied by seller, due to a system emergency or otner abnormal load condition on seller's

, system which could not reasonaDly have been foreseen. In such event, l deliveries scheduled hereunder may be suspended upon request of the seller, with a pro.-rata reduction in demand charges, i

3.01 Buyer will pay for power and energy reserved and/or supplied under

this Schedule as follows

a. Demand At the ra rs Der kilowa i

l Billing demand will be kilowatts reserved for the week.

b. Ene Charges: All ene supolied under this Schedule, will be at the rat l

l l l l

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APPENDIX C SERVICE SCEDLLE "C" EC(NOMY ENERGY Under Agreement of kM( M3, N6 ,

between Alabama Electric Cooperative and Oglethorpe Power Corporation.

All of the services contemplated by this Schedule are on an "as, if, and when available" basis, in the sole judgement of the Participant requested to provide the service.

Neither Participant shall have any liability to the other for any inability to provide a requested service.

1.01 From time to time each Participant may have economy energy available and offer such to the other. If the seller's energy is available at an incremental cost lower than the buyer's, then the Participants will " split the savings." ' '

The rate for economy energy will be calculated by the following formula:

Rate per kWh = B + (A-8)/2 Where A equals the out-of-pocket cost of energy at point of delivery which buyer avoids as a result of the transaction, and B equals the out-of-pocket cost of energy at point of delivery which seller incurs as a result of the transaction.

1.02 The price of service under this Schedule will be agreed on an hour-by-hour basis during each transaction.

2.01 The buyer will purchase economy energy under this Schedule only when it has alternate dependable capacity available, including adequate reserve.

2.02 Transactions under this Schedule may be discontinued by either Participant at any time.

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APPENDIX D SERVICE SCHEDULE "D" WWELING (TRANSMISSICN) SERVICE Under Agreement of OC)CD d M ,I , between Alabama Electric Cooperative and Oglethorpe Power Corporation.

All of the services contemplated by this Schedule are on an "as, if, and when available" basis, in the sole judgement of the Participant requested to provide the service. Neither Participant shall have any liability to the other for any inability to provide a requested service.

1.01 This Schedule applies to transmission service at 115 kV or above when one Participant requests transmission service and the other Participant has transmission capacity available as requested.-

2.01 The Participant requesting wheeling will deliver, or arrange for delivery of, bulk power to the Participant providing wheeling. The Participant providing wheeling will then deliver 97% of the bulk power it received. The Participant requesting wheeling will make all necessary arrangements with other utilities involved, and will pay all wheeling charges of such other utilities.

3.01 From time to time and where available, either Participant may provide to the other " firm" transmission service by the week or month in such amounts as the Participants may agree on. Monthly service will be reserved at least 7 days in advance, and weekly service will be reserved at least 3 days in advance. Reservations will be confirmed in writing prior to commencement of service or as soon as possible thereafter.

4.01 From time to time and as available, either Participant may provide "non-firm" transmission service to the other upon at least four hours advance notice unless otherwise agreed. Where "non-firm" service is provided more than three days during any week, then the weekly rate for " firm" service shall apply.

5.01 Either " firm" or "non-firm" service may be suspended or terminated as deemed necessary by the Participant providing it in the event of an emergency condition on the system of the Participant providing the service, or in the event of an emergency on a third party's system which requires the aid of the wheeling Participant, or where transmission service under this Agreement could not be continued without impairing a prior commitment to transmission service by the wheeling Participant. Additionally, no transmission service is required to be provided which would impair the ability of the wheeling Participant to render adequate service to its customers or reduce the reliability of its system. In the event of any such suspension or termination of wheeling service, transmission service charges will be

prorated. The Participant suspending service shall not be required to deliver power from its own or other sources, and its sole liability shall be the proration of transmission service charges, and payment of any wheeling charges of third parties resulting from the susoension or termination. j 6.01 Neither Participant shall be responsible for the legality of the other's transactions with third parties.

7.01 The monthly rate for " firm" transmission service shall beM per kilowatt times the maximin capacity in kilowatts reserved by the Participant requesting wheeling.

8.01 The weekly rate for " firm" transmission service shall beMof the monthly rate per kilowatt, times the maximum capacity in kilowatts reserved by the Participant requesting wheeling.

9.01 The charge for "non-firm" transmission service shall beMF , ,

for energy scheduled by the Participant requesting the wneeling.

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t APPENDIX E SERVICE SCEdULE "E" l

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MAINTENANCE ENERGY Under Agreement of Oa.Jober A3,19 W , between A1abama -

Electric Cooperative and Oglethorpe Power Corporation.

1 i All of the services contemplated by this Schedule are on an "as, if, and when available" basis, in the sole judgement of the Participant requested to provide the service. Neitter Participant shall have any liability to the

otner for any inability to provide a requested service. - .

1 I 1.01 This Schedule applies during a planned outage of the buyer's

, generating or transmission f acilities which has been coordinated in advance j with the seller, provided that the seller in its sole judgement has power'and -

energy available.

2.01 The buyer will for all ene received under this Schedule by

payment of i

i 1

i 2.02 The initial price of service under this Schedule will be agreed on prior to each transaction. During any transaction, the seller will furnish incremental energy cost infomation hourly as shown by seller's economic dispatch,.which will be used for billing. .i i 2.03 Power reserved under this Schedule is non-firm. The seller shall not be obligated to supply, or cause to be supplied, and the buyer shall not be obligated to pay for, any capacity reserved but not able to be supplied by seller or taken by buyer, due to a system emergency or other abnormal system load condition which could not reasonably have been foreseen by either Participant. In such event, deliveries scheduled hereunde'r may be suspended upon request of the affected Participant.

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., .e SHORT TERM POWER SALES AGREEMENT BETWEEN ALABAMA POWER COMPANY, GEORGIA POWER COMPANY, GULF POWER COMPANY, MISSISSIPPI POWER COMPANY AND SOUTHERN COMPANY SERVICES, INC.

AND SOUTH CAROLINA ELECTRIC & GAS COMPANY .

Section 0.1: This Short Term Power Sales Agreement (hereinafter referred to as " Agreement") is executed and entered into this 27th day of May, 1986, between South Carolina Electric & Gas Company ("SCE&G") and Alabama Power Company, an Alabama Corpora-tion; Georgia Power Company ("GPC"), a Georgia Corporation; Gulf Power Company, a Maine Corporation; Mississippi Power Company, a Mississippi Corporation; and Southern Company Services, Inc.

("SCS"), an Alabama Corporation, collectively referred to herein as the " Southern Companies";

ARTICLE I - PURPOSE Section 1.1: The purpose of this Agreement is to set forth the terms, conditions and limitations under which Southern Companies agree to purchase power and energy from SCE&G at the point of direct interconnection between GPC and SCE&G.

e ARTICLE II - TERM Section 2.1: The term of this Agreement shall commence on June 1, 1986, and shall continue in effect for 90 days when it will expire by its terms. However, such expiration is subject to reasonable extensions by mutual agreement. Upon termination of this Agreement, Southern Companies shall not be relieved of their obligation under Atticle IV hereof to pay SCE&G for energy deliv-ered pursuant to this Agreement.

ARTICLE III - SCHEDULING Section 3.1 - Schedules for Receipt and Delivery: Southern Com-panies shall schedule with SCE&G the power and energy to be pur-chased by Southern Companies from SCE&G, and any changes in such schedules. Such schedules shall be established by the operating representatives of Southern Companies and SCE&G, and shall be subject to all limitations, restrictions and conditions on avail-ability of power and energy set forth in this Agreement.

Southern Companies' operating representative will give SCE&G's operating representative as much advance notice as possible of power and energy delivery schedules and shall provide by 12:01 p.m. prevailing Central Time his best estimate of such schedule for at least the next 24-hour period commencing at 9:00 p.m.

prevailing Central Time or for longer periods where weekends and holidays are involved. It is understood that upon mutual agree-ment, Southern Companies and SCE&G schedules may be changed on the day of delivery.

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Section 3.2 - Power and Energy to be Scheduled:

(a) SCE&G will deliver power and energy to Southern Companies as scheduled from surplus capacity at SCE&G's Canadys 1, Canadys 2, and Urquhart 3 units (hereinafter referred to as

" units") subject to the conditions stated in paragraph (h).

(b) Southern Companies may purchase energy during the term of this Agreement as specified in Section 2.1 subject to the following minimum: 100 GWH in the first 30-day period, a cumulative 200 GWH by the end of the second 30-day period, and a cumulative 300 GWH by the end of the third 30-day period. These minimums are subject to reduction by credits set forth in this Section 3.2. Should Southern Companies not meet its commitment of 300 GWH by the end of the initial 90-day period, Southern Companies shall take any deficient energies during two subsequent 30-day periods, subject to the same terms and conditions provided for in this Agree-ment. There shall be no additional minimum energy require-ments during these two subsequent 30-day periods. The maxi-mum delivery rate required of SCE&G at any time shall be 350 MW. Such energy shall be made available by SCE&G, except as l

provided in paragraph (h). Peak hours are defined at 9:00 a.m. prevailing Central Time to 9:00 p.m. prevailing Central Time. During all off-peak hours following each on-peak delivery period Southern Companies shall purchase at least j 40% of the maximum outputs of such units to meet the maximum on-peak delivery rate requested by Southern Companies and i

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' l prescheduled for delivery to the Southern Companies that 24-hour period, or 40% of the maximum delivery rate avail-able continuously over the 12-hour on-peak period, whichever is less; except as reduced under the conditions specified in paragraph (1). The maximum outputs of the units are listed in paragraph (k). Should SCE&G be unable to preschedule the full delivery rate requested by Southern Companies, Southern Companies shall only be required to receive during all off-peak hours, at least 40% of the prescheduled maximum on-peak delivery rate for that 24-hour period, or the maxi-mum delivery rate available continuously over the 12-hour on-peak period, whichever is less; except as reduced under the conditions specified in paragraph (i).

-(c) Should SCE&G be unable to deliver energy as prescheduled, that unsuppiied energy shall be credited, at Southern Companies' option, to Southern Companies' total commitment of 300 GWH. Should SCE&G be unable to preschedule energy as requested by Southern Companies, that unsupplied energy shall be credited to Southern Companies total commitment; provided, however, that the credit for unscheduled energy will be limited to 3.3 GWH per each 24-hour period. In no event will the credit apply to requests for power made by Southern Companies from a unit during periods when downtime restrictions for such unit apply as a result of scheduling by Southern Companies. SCE&G, at Southern Companies' option, will credit Southern Companies' total commitment 4

with any energy deliveries prevented by transfer restric-tions attributable to the SCE&G side of the SCE&G-GPC inter-connection. SCE&G will not credit Southern Companies' total commitment with any energy deliveries prevented by transfer restrictions attributable to the GPC side of the SCE&G-GPC interconnection.

(d) Should Southern Companies not purchase a minimum, subject to reduction by credits set forth in this Section, of 100 GWH in the first 30-day period, a cumulative 200 GWH by the end of the second 30-day period, and a cumulative 300 GWH by the end of the third 30-day period, Southern Companies agree to pay SCE&G carrying charges at the end of each respective 30-day period for the coal associated with any such energy not taken at the end of each respective 30-day period.

Carrying charges shall be determined for any energy not taken as follows:

(1) The interest rate shall be the average interest paid by South Carolina Fuel Company to finance coal inventory during the 30-day period in which the energy was not taken. SCE&G agrees to provide Southern Companies with a detailed calculation of the interest rate for each l

30-day period upon request, and agrees to allow repre-

! sentatives of Southern companies to audit such calcula-tions.

l (2) The principal upon which the interest rate shall be i

applied will be determined by multiplying the cumula-l I

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tive amount of energy not taken (GWH) by $15,760/GWH.

Examples of this calculation are provided in Exhibit A attached hereto.

(3) southern Companies agree that any energy deficiency which exists at the end of the initial 90-day period shall accrue carrying charges for two additional 30-day periods, to be applied to any deficiency remaining at the end of each of those periods. Any carrying charges which accrue pursuant to this paragraph (d) shall be billed as of the end of each 30-day period and included in the invoice specified in Section 4.2.

(e) Southern Companies shall pay SCE&G $20/MWH, plus actual start-up costs, up to a maximum of the applicable unit start-up cost listed in paragraph (k), for producing and delivering energy pursuant to this Agreement. Start-up costs shall be applied only if incurred solely as a result

of Southern Companies' schedule under this Agreement. If Southern Companies keeps a unit (for which it has been charged a start-up cost) running for at least seven days, r

then Southern Companies will be credited for that start-up.

I (f) The length of the delivery period set by schedules under l

Section 3.2 must satisfy the minimum running times of the units. Minimum downtime restrictions for the units shall apply between scheduled deliveries. Minimum running times

! and down times for the units are listed in paragraph (k).

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(g) Should Southern Companies request energy during a downtime period of the units, SCE&G shall provide such energy, if possible, at its incremental' cost of delivery to the GPC-SCE&G interconnections plus $3/MWH.

(h) Priority for the energy to be delivered pursuant to this Agreement shall be given to SCE&G's system load, SCE&G's reliability commitments to other utilities, and any agree-ments which would provide for capacity payments to SCEGG.

However, SCE&G shall provide any energy that has been sched-uled pursuant to paragraph (b) for the duration of the scheduled peri.od unless it becomes burdensome due to loss of generation, other than the units, or other system conditions as specified above in this paragraph. If there is loss of generation on SCE&G's system, other than at the units, or other system conditions as speciflad shove in this para-graph, SCE&G shall continue, if possitle, delivery of the energy from its system or a third party's system for a mini-mum of seven hours after such conditions occur. SCE&G's price for the energy delivered during the seven-hour period will be $20/MWH. In the event of cancellation of delivery by SCE&G under the conditions specified above, and Southern Companies has been charged for the previous start-up of a unit from which deliveries are cancelled, Southern Companies shall be credited for the cost of that start-up.

Should full or partial loss of generation occur at the units, SCE&G will notify Southern Companies of such loss and 7

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Southern Companies shall have the option of requesting SCE&G to continue all scheduled energy deliveries to Southern Companies. If requested, SCE&G shall continue, if possible, delivery of all scheduled energy at the full delivery rate.

SCE&G's price of the energy supplied in lieu of energy from the units shall be SCE&G's incremental cost of delivery to the GPC-SCE&G interconnection, plus $3/MWH. Any start-up costs related to bringing any of the units back in service after such loss shall not be charged to Southern Companies.

(i) SCE&G agrees to make best efforts to reduce off-peak energy delivered to Southern Companies, as required in paragraph (b), primarily by using any available off-peak energy from the units for pumping requirements at the Fairfield Pumped Storage facility when economical. SCE&G will notify Southern Companies when such an opportunity exists and, if Southern Companies and SCE&G agree, SCE&G shall reduce energy delivered to Southern Companies by a specified delivery rate and length of time. SCE&G estimates that approximately 2 GWH each 30-day period from the units may be utilized for off-peak pumping requirements. In no event

( will any reduction under this paragraph operate as a credit to Southern Companies' total commitment specified in para-graph (b).

(j) After first obtaining Southern Companies' consent, SCE&G may offer energy from the units to third parties on an economy transaction basis. SCE&G's quoting price in such a transac-8

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tion shall be $20/MWH. SCE&G shall proceed on a best efforts basis and shall not be obligated to offer such energy where the buyer's avoided cost of energy is less than

$J0/MWH. If any ruch energy is delivered to third parties pursuant to this paragraph, SCE&G shall credit Southern Companies' energy charges for 50% of SCE&G's share of the difference between the $20/MWH and the buyer's avoided cost.

Such energy sold to third parties shall be credited to Southern Companies' total commitment as specified in para-graph (b).

(k)

SCEEG GENERATING UNIT CHARACTERISTICS MAXIMUM OUTPUT MINIMUM RUNNING MINIMUM DOWN START-UP (MW) TIME (HRS) TIME (HRS) COSTS ($)

Canadys 1 125 48 48 13,707.00 Canadys 2 125 48 48 13,707.00 Urquhart 3 100 48 48 4,127.00 Section 3.3 - Communications between Parties: The Operating

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Committee, created pursuant to Article VII, shall agree on proce-dures and time periods to effect the notifications contemplated by this Article III and to coordinate the orderly schedule of power and energy by Southern Companies and SCE&G.

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ARTICLE IV - BASES FOR SETTLEMENT Section 4.1 - Payment for Power and Energy Purchased from SCE&G:

Southern Companies shall pay for the power and energy delivered pursuant to this Agreement including all appropriate energy charges, unit start-up charges, or coal pile carrying cost charges for failure to take energy pursuant to the terms and conditions of Section 3.2, and any late payment charges attribu-table to late payment, provided, however, that such charges do not arise due to SCE&G's negligence or failure to perform its obligations.

Section 4.2 - Presentation and Payment of Invoices: Charges in the amounts determined in accordance with Sections 3.2 and 4.1 for each month shall be stated in an original invoice prese'nted by SCE&G to Southern Companies on or before the ninth (9) day of the next month. For information purposes, a copy of such invoice may be transmitted to Southern Companies before such ninth (9) day by means of telecopier or other similar communication device followed by delivery to Southern Company Services, Inc., of the original of such telecopied invoice as specified above. On or before the fifteenth (15th) day of the month, Southern Companies l

l shall make payment to SCE&G in accordance with the invoice in immediately available funds through wire transfer of funds or other mutually agreeable method of payment with the understanding that such funds are to be in the possession of SCE&G by 12:00 p.m. prevailing Central Time on such fifteenth day. If the 10 l

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. i fifteenth day falls on a Saturday, Sunday or holiday, the due date will be established in advance by mutual agreement of the Operating Committee. Payments of charges not made when due shall accrue interest at One Hundred Five Percent (105%) of the prime rate quoted on the date due by Manufacturers Hanover Trust Company in New York, New York, computed from the due date to the date of payment (a day shall equal one-thirtieth of a month).

Section 4.3 - Disputed Invoice: In case any portion of an invoice submit +ed pursuant to Section 4.2 is in bona fide dis-pute, the undisputed amount shall be payable when due; and the remainder shall be paid promptly, upon the determination of the correct amount, in accordance with Sections 3.2 and 4.1, includ-ing interest at One Hundred Five Percent (105%) of the prime rate quoted on the date due by Manufacturers Hanover Trust Company in New York, New York, computed from the due date to the date of payment (a day shall equal one-thirtieth of a month). Upon request by Southern Companies, SCE&G shall provide copies of supporting documentation and records necessary to verify invoices to the requestor, whether disputed or undisputed.

ARTICLE V - POINT OF DELIVERY AND METERING Section 5.1 - Point of Delivery: The point of delivery for the sale of energy to Southern Companies will be the following inter-connection points between GPC and SCE&G, and SCE&G shall have no responsibility for the energy beyond such points of interconnec-tion:

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(a) At the South Carolina-Georgia state line on the line between Plant Urquhart and Fenwick Street Substation; (b) At the South Carolina-Georgia state line on the line between Plant Urquhart and South Augusta substation; (c) On the Clark Hill 115 kv bus, in accordance with arrangements in effect with the Southeastern Power Administration.

ARTICLE VI - OPERATION Section 6.1 - Operation of Systems in Parallel: The SCE&G system and the Southern Companies systems shall be operated in parallel as agreed upon from time to time by the Operating Committee except as may, under special temporary conditions, be arranged otherwise between the respective operating representatives.

Each of the parties hereto reserves the right to open the interconnections between their systems, after giving notice as far in advance as possible to the other party, whenever, in its judgment, service to its customers or those of systems now inter-connected with it is adversely affected by closed operation.

However, both parties shall cooperate to remove the cause of such interruption to interconnected operation as soon as possible and restore said interconnections to normal operating condition.

Section 6.2 - Determination of Deliveries: The amount of power and energy supplied by SCE&G to Southern Companies shall be determined on the basis of the amounts scheduled between the 12

respective operating representatives. The systems of SCE&G and Southern companies shall be operated in such a manner as to make actual net deliveries of power and energy as nearly equal to the net scheduled deliveries as is practicable.

Section 6.3 - Kilovar Supply: It is the intent that neither SCE&G nor Southern Companies shall impose an undue burden on the other with respect to the flow of kilovars. The Operating Committee shall establish from time to time mutually satisfactory voltage schedules and kilovar supply arrangements.

Section 6.4 - Disturbances: SCE&G and Southern Companies shall, insofar as practicable, protect, operate, and maintain their systems and facilities so as to minimize disturbances originating on one party's system which might impair service on the system of the other party.

ARTICLE VII - OPERATING COMMITTEE An Operating Committee shall coordinate operations in carry-ing out the terms of this Agreement, and each of the parties hereto shall designate in writing to be delivered to the other party not later than thirty (30) days after the date hereof the person who is to act as its representative on said committee (and the person or persons who may serve as alternate whenever such representative is unable to act). Such representatives and alternate or alternates shall each be persons familiar with the 1

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generation, transmission and substation facilities of the system of such party by which he has been so designated, and each shall be fully authorized to collaborate with the other representative (or alternates) and from time to time as the need arises, subject to the declared intentions of the parties herein set forth, and to the terms hereof, and the terms of any other agreements per-taining hereto subsequently arrived at between the parties, to determine and agree upon all matters referred to the operating representatives of the parties in other sections of this Agree-ment.

ARTICLE 8 - MISCELLANEOUS PROVISIONS Section 8.1 - Force Majeure: In case either party hereto should be delayed in or prevented from performing or carrying out any of the agreements, covenants, and obligations made by and imposed upon said parties, or any of them, by this Agreement by reason of or through strike, stoppage in labor, failure of contractors or suppliers of materials, riot, fire, flood, ice, invasion, civil war, commotion, insurrection, military or usurped power, order of any Court or Judge granted in any bona fide adverse legal pro-ceedings or action, order of any civil or military authority either de facto or de jure, explosion, act of God or the public i

enemies, or any cause reasonably beyond its control and not attributable to its neglect; then, and in such case or cases, such party shall not be liable to the other party for or on account of any loss, damage, injury, or expense resulting from or j

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, l arising out of such delay or prevention; provided, however, that the party suffering such delay or prevention shall use due and in its judgment practicable diligence to remove the cause or causes thereof. It is understood that neither party shall be required by the foregoing provisions to settle a strike except when, according to its own best judgment, such a settlement seems advisable.

Section 8.2 - Responsibility and Indemnification: Each party hereto expressly agrees to indemnify and save harmless and defend the other against all claims, demands, costs, or expense for loss, damage, or injury to persons or property, in any manner directly or indirectly connected with or growing out of the gene-ration, transmission, or use of electric capacity and energy on its own side of the delivery point or points hereunder unless such claim or demand shall arise out of or result from the negli-gence or willful misconduct of the other party, its agents, ser-vants, or employees; provided, however, that each company signing this Agreement shall, in all cases, be responsible for damage or injury to its own employees.

Section 8.3 - Regulatory Approvals: Southern Companies and SCE&G recognize that this Agreement is required to be filed with cer-tain regulatory agencies including the Federal Energy Regulatory Commission ("FERC"). To such end, SCE&G agrees to take steps promptly to file this Agreement with the FERC. SCE&G shall also 15

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request a waiver of the notice requirements of the Federal Power Act and Section 35.3 of FERC's regulations to the extent neces-sary to allow such agreement to become effective June 1, 1986.

Southern companies agree to cooperate and assist SCE&G in secur-ing conclusion of any review by FERC of this Agreement without significant change hereto, in an expeditious manner.

[this space left blank intentionally, the next page (page 17) is the signature page]

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IN WITNESS WHEREOF, the parties hereto have caused the foregoing document to be executed by their duly authorized officers effective as of the date first set forth above.

Attest: SOUTH CAROLINA ELECTRIC & G AS COMPANY l // /

?f sm . /

James H.' Y]ung Jr[

Asst. Secretary Senior Vic M resi@nt Date: May 27, 1986 Attest- SOUTHER'i COMPANY SERVICES, INC.

By -

R. O. Uery /

Ass /. Secretary Vice President Date: May 27, 1986 Attes -

, ALABAMA F 7ER COMPANY By_ o- > d sh- -

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// Robert E. Huf fman Assf. Secretary Vice President Date: May 27, 1986 Attest- GEORGIA OWER COMPANY

' Byn A C '

Fred D. Williams Ass /. Secretary Date:

Vice President May 27, 1986 Attes : -

GULF POWER COMPANY By [M Earl B.

hQ Parsons, fr .

Ass . Secretary Vice President Date: May 27. 1996 Atte  : MISSISSIPPI OWKR COMPANY w / By / -. O h

" 11. H . Bell, fr.

f/

Asst. Secretary Vice President Date: May 27, 1986 17

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EXHIBIT A CALCULATIONS OF CARRYING CHARGES Example 1 Suppose the energy taken (including all credits) by Southern '

Companies in the first 30-day period is 70 GWH. Then Southern Companies must pay carrying charges on 100 GWH - 70 GWH = 30 GWH.. '

The principal is:

(30 GWH) ($15,760 / GWH) = $472,800 If the interest rate as calculated in Section 3.2, (d), (1) is 10%

per year, then the carrying charges for the first 30-day period are:

($472,800) (0.10) / 12 = $3,940 Example 2 Continuing Example 1, suppose the cumulative energy taken (includ-ing all credits) by Southern Companies by the end of the second 30-day period is 140 GWH. Then Southern Companies must pay carrying charges on 200 GWH - 140 GWH = 60 GWH. The new principal is:

(60 GWH) ($15,760 / GWH) = $945,600 If the new interest rate as calculated in Section 3.2, (d), (1) is 9% per year, then the carrying charges due at the end of the second 30-day period are:

($945,600) (0.09) / 12 = $7,092 Example 3 Continuing Example 1, suppose the cumulative energy (including all credits) by the end of the second 30-day period is 220 GWH. Then Southern Companies owes no carrying charges for that period.

There will be no interest credit to Southern Companies for taking more than the minimum requirement, but the excess energy will reduce the minimum requirements of the next period.

s 2.

CERTIFICATE OF CONCURRENCE This is to certify that Alabama Power Company, Georgia Power Company, Gulf Power Company, and Mississippi Power Company assent to and concur in the rate schedule described below, which South Carolina Electric & Gas Company has filed and hereby file this certificate of concurrence in lied of the filing of the rate schedule specified.

Short Term Power Sales Agreement dated May 27 , 1986, between Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, and Southern Company Services, Inc., and South Carolina Electric & Gas Company.

. SOUTHERN COMPANY SERVICES, INC.

By R. O. Usry g/

Vice President As the representative of ALABAMA POWER COMPANY GEORGIA POWER COMPANY GULF POWER COMPANY MISSISSIPPI POWER COMPANY Dated: May 27, 1986

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.(; . SERVICE SCHEDULE EP -

ECONOMIC ENERGY PARTICIPATION SCHEDULE BETWEEN FLORIDA POWER & LIGHT COMPANY AND

' AL7BAMA POWER COMPANY, GEORGIA POWER COMPANY, GULF POWER COMPANY, MISSISSIPPI POWER COMPANY AND SOUTHERN COMPANY SERVICES, INC.

Section EPO.1: This Economic Energy Participation Schedule is made and entered into this 20th day of June, 1986 by and between Florida Power & Light Company ("FPL") and Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company and Southern Company Services, Inc. ("SCS"), collectively. referred to herein as (" SOUTHERN COMPANIES") and this Service Schedule EP is a part of the Interchange Contract dated October 18, 1979, as amended, between FPL and SOUTHERN COMPANIES, hereinafter referred to as the " CONTRACT."

ARTICLE I .

RECITALS Section EPl.1: SOUTHERN COMPANIES have direct transmission interconnections with certain third party utility companies with which FPL desires to enter into electric service arrangem'nts e to determine whether energy can be purchased l

and transmitted on an experimental basis to the economic l benefit of the customers of FPL, SOUTHERN COMPANIES and the '

i third party utility companies.

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',, (h, Section EPl.2: The parties recognize that the transmission interconnections between SOUTHERN COMPANIES and third party i utility companies and internal transmission systems were constructed for the primary purpose of enhancing rel. lity of electric service to territorial customers of the operating subsidiaries of The Southern Company and that such interconnections and internal transmission systems were in many instances, certificated or approved by state regulatory *l agencies for the benefi~t of retail customers. ~

Section EPl.3: FPL has requested that SOUTHERN COMPANIES

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make arrangements for the delivery to FPL of economic energy purchased from time to time from third party utility

( companies when such transactions can be accommodated without creating an economic or reliability burden on territorial customers of the operating subsidiaries of The Southern Company.

Section EPl.4: SOUTHERN COMPANIES are willing to accommodate purchases by FPL from third party utility companies so that the operating subsidiaries of The Southern Company may participate in the economic benefits to be derived from the economic energy transactions contemplated by this Service Schedule EP.

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NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the parties hereto agree and contract as follows:

ARTICLE II PURPOSE Section EP2.1: The purpose of this Service Schedule EP is to provide a mechanism by which FPL and SOUTHERN COMPANIES can participate in economic energy transactions which may be feasible from time to time with third party utility companies with which SOUTHERN COMPANIES have direct inter-connections but with which FPL does not have direct inter-connections.

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Section EP 2. 2 : - It is understood and agreed that FPL is entitled to receive economic _ energy hereunder to the extent that FPL has alternative dependable capacity available to it that could be used for the supply of its system load if transactions under this Service Schedule EP were not available.

ARTICLE III TERM Section EP3.1:

The term of this Service Schedule EP shall commence on the day it is allowed to become an effective rate schedule under the Rules and Regulations of the Federal

• l Energy Regulatory Commission ("FERC") and shall continue in 1 effect for an initial period of one (1) year. It is recognized by the parties that this Service Schedule EP is of an experimental nature and by mutual agreement the parties may extend the term hereof if this service schedule results in mutual economic benefits.

ARTICLE IV SERVICES TO BE RENDERED Section EP4.1 --

General

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Description of Service: This Service Schedule EP sets forth the terms and conditions and limitations associated with scheduled delivery of economic energy to FPL from third party utility companies. SOUTHERN COMPANIES will arrange for a scheduled delivery of economic energy from the third party utility company to points of direct interconnection with SOUTHERN COMPANIES and contemporaneous delivery of such economic energy to points of interconnection with FPL.

Section EP4.2 -- FPL to Contract with Third Party Utility Companies: In order to provide for economic energy transactions under this Service Schedule EP, FPL will enter into economic energy purchase arrangements with one or more third party utility companies with which SOUTHERN COMPANIES have a direct transmission interconnection. After FPL has entered into contractual arrangements for the purchase of

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energy from a third party utility company, it will provide SOUTHERN COMPANIES with an executed copy of the contract.

Upon receipt of such a contract, SOUTHERN COMPANIES, as soon as practicable, will review the contract to determine whether the energy purchases provided for therein are compatible with the provisions'of this Service Schedule EP and make any necessary modifications to its computer programs and operating procedures so that it may accommodate and participate in such economic energy transactions.

Section EP4.3 -- Duration of Economic Energv Transactions:

The economic energy transactions to be conducted under this Service Schedule EP shall be scheduled by mutual agreement

( of the parties in accordance with the provisions of Article V hereof and shall not exceed seven (7) days duration. It is agreed by the parties that economic energy transactions scheduled by mutual agreement of the parties can be interrupted, curtailed or limited in accordance with the provisions of Article VI, hereof.

ARTICLE V SCHEDULING OF ECONOMIC ENERGY TRANSACTIONS Section EP5.1 --

Scheduling between FPL and SOUTHERN COMPANIES:

After FPL determines that it would be to its economic advantage to arrange for an economic energy L

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• transaction with a third party utility company with which it has entered into a contract, FPL will contact the operating representative at SCS to determine if SOUTHERN COMPANIES are willing and able to schedule the proposed economic energy transaction. At the time of this communication, FPL's operating representative will inform SCS's operating representative of the price quoted for economic energy from the third party utility company and the avoided cost of FPL for each time period, as determined in accordance with Section EP7.2, of each 24-hou'r day for each day of the proposed economic energy transaction (or in the alternative, the incremental cost of the third party utility company and the avoided cost of FPL for each time period, as determined in accordance with Section EP7.2, of each 24-hour day for each day of the proposed transaction) and the quantity of energy to be scheduled during each hour of the time period of the proposed economic energy transaction. Normally, FPL will contact SCS's operating representative on or before 12:00 p.m. prevailing Central Time of the day preceding the day on which the proposed economic energy transaction is to commence and SCS's operating representative will evaluate the economic energy transaction and inform FPL by 3:00 p.m.

prevailing Central Time whether it is willing and able to accommodate the proposed economic energy transaction.

4 If FPL desires to commence an economic energy transaction on l

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the same day, it may contact SCS's operating representative to determine whether the SOUTHERN COMPANIES are willing and able to accommodate the proposed economic energy transaction on short notico. In determining whether SOUTHERN COMPANIES are willing and able to accommodate a proposed economic energy transaction, SCS will consider, in its sole discre-tion, whether the proposed transaction may create an economic or reliability burden on any of the SOUTHERN COMPANIES or their customers.

Section EP5.2 -- Commitment to Economic Energy Transactions:

When FPL determines that it is to its economic advantage to commence an economic energy transaction with a third party

( utility company, it will request that SOUTHERN COMPANIES commit to participation in and delivery of such economic energy for continuous periods of no more than seven (7) days. If SOUTHERN COMPANIES are willing to accommodate the transaction, SCS will assure the economic energy. transaction for the time period requested by FPL or for some shorter time period and the transaction will only be subject to curtailment or interruption for those causes and reasons set forth in Section EP6.1 hereof. It is recognized that the total energy transfer from SOUTHERN COMPANIES to FPL may be limited in anticipation of peak load conditions pursuant to the provisions of Section EP6.2 hereof.

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y J, ARTICLE VI INTERRUPTION OR CURTAIDIENT OF ECONOMIC ENERGY TRANSACTIONS AND LIMITATION OF TOTAL ENERGY TRANSFER Section EP6.1 --

Interruotion or Curtailment of Assured Economic Energy Transactions: If an economic energy transaction has been scheduled by FPL pursuant to Section EP5.1 and that economic energy transaction has been assured pursuant to Section EP5.2, the economic energy transaction can only be subsequently refused, interrupted or curtailed by SOUTHERN COMPANIES for the follouing reasons:

(i) failure of the third party utility company to supply economic energy at the direct interconnection points with SOUTHERN COMPANIES; (ii) limitation on the transmission interface between SOUTHERN COMPANIES and the third party utility company; (iii) limitations on the internal transmission systems of SOUTHERN COMPANIES which SCS considers, in its sole discretion, to be a safety or reliability concern; (iv) limitation on the SOUTHERN COMPANIES-Florida interface which under the priorities and procedures established by the users of that interface would require SOUTHERN COMPANIES to curtail or interrupt the scheduled economic energy transaction with the third party utility company and (v) a determination by SCS, in its sole discretion, that SOUTHERN COMPANIES may be unable to perform or comply with contractual commitments (now existing or

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entered into in the future) with other third party

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utili ties.

It is specifically agreed however, that SOUTHERN COMPANIES will not be permitted to interrupt or curtail an assured economic energy transaction becauee of changed l economic considerations after SOUTHERN COMPANIES commit to assure the transaction under Section EPS.2. Before interrupting or curtailing an assured economic energy transaction with the third party utility company, SOUTHERN COMPANIES will notify FPL and the third party utility company, thirty (30) minutes' in advance, if possible, otherwise as soon as practicable, of the need to interrupt or curtail a transaction hereunder. SOUTHERN COMPANIES agrees that it shall only interrupt or curtail a transaction

( to the extent and for the period of time necessary and that it partial service can be provided, then SOUTHERN COMPANIES shall provide such partial service and restore the transaction as soon as practicable.

Section EP6.2 -- Limitation on Total Enercy Transfers to FPL During Peak Load Conditions: Notwithstanding the provisions of Section EP6.1, it is recognized by the parties that SOUTHERN COMPANIES may limit the total energy transfer to FPL during certain anticipated peak load periods on the electric systems of the individual SOUTHERN COMPANIES. In such event, the operating representative of SOUTHERN COMPANIES will contact the operating representative of FPL i 9-

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{ as far in advance as possible but at least four(4) hours in advance to give notice of the decision to limit the total energy transfer to FPL.

Upon such notice, FPL will adjust the total scheduled energy transfer to a level which is not to exceed the then current maximum capability under Schedule E of the CONTRACT plus the then current maximum capability under the Amended and Restated Unit Power Sales Agreement between FPL and SOUTHERN COMPANIES dated February 18, 1982, as amended.

Section EP6.3 -- Early Termination or Curtailment of Assured Economic Energy Transaction Due to Failure of Third Party Utility to Supply Economic Energy: FPL may curtail or terminate an assured economic energy transaction upon giving 12 hours1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br /> notice to the operating representative of SOUTHERN COMPANIES that the third party utility company is unable to supply or may be unable to continue to supply the scheduled economic energy. All notices under this section will be deemed as having~been given on the nearest whole clock hour.

The payment- by FPL to SOUTHERN COMPANIES for early curtailment or termination of an assured economic energy transaction pursuant to " this section will be determined in accordance with the provisions of Section EP8.4.

. .s u O ARTICLE VII TRANSMISSION LOSSES Section EP7.1 -- Delivery of Economic Energy to FPL to be Net of Incremental Transmission Losses: The SOUTHERN COMPANIES shall deliver economic energy scheduled from a third party utility company to its direct interconnection points with FPL less an amount of energy attributable to incremental transmission losses determined pursuant to this Article.

Section EP7.2 --

Determination of Incremental Transmission Losses:

The SOUTHERN CCIPANIES will develop the energy deliveries scheduled to FPL based on a projection of

(. incremental losses which will be performed on the day preceding the date for actual delivery of the economic energy scheduled from a third party utility. Projections of losses for longer periods of time will be made as required.

The projections of losses will be based on the hourly incremental or decremental transmission losses determined using the existing algorithms of the SOUTHERN CGMPANIES to determine the incremental hourly losses due to each transaction under this Service Schedule EP. The total incremental losses thus determined for each hour of the projected period will be converted to average incremental losses for a minimum of two time periods a day.

These time periods are expected to consist of the hours beginning 7:00

1 a.m. and ending 10:00 p.m. designated as the peak period and for the hours beginning 10:00 p.m. and ending 7:00 a.m.

designated as ,the valley period (prevailing Central Time) ,

or such other time periods as may be mutually agreed upon by the operating representatives. In no event, will incre-mental losses for any peak period or valley period or other mutually agreed to time period be established at a value less than zero. The percent incremental transmission losses for each period, determined in accordance with the proce-dures described above, will 'be '

applied o the hourly schedules for receipts from third party utility companies to determine the hourly schedules of deliveries of economic energy to FPL.

Any adjustment to this schedule during the day will be handled by the operating representatives of the parties.

ARTICLE VIII BASIS FOR SETTLEMENT l

i Section EP8.1'-- FPL Responsible for Payment to Third Party Utility Companies:

FPL shall arrange for economic energy transactions contemplated by this Service Schedule EP pursuant to contracts executed with third party utility companies. FPL shall indemnify and save harmless and protect SOUTHERN COMPANIES from and against any costs, losses, expenses (including attorneys fees), or damages

, (including incidental and consequential damages) associated l

with or arising out of any demands, suits, actions or claims

s. * ..

brought by a third party utility company against SOUTHERN COMPANIES or SCS due to nonpayment by FPL for energy delivered to SOUTHERN COMPANIES by such third party utility company or breach of contract .between FPL and the third party utility company. Further, in the absence of willful or wanton misconduct on the part of any one or more of the SOUTHERN COMPANIES, FPL waives all rights of recovery against the SOUTHERN COMPANIES and SCS and their agents, servants or employees for any losses, expenses, costs or damages of any nature (including incidental and consequential damages), arising out of a failure by the third party utility company to deliver or schedule economic energy pursuant to the arrangements between FPL and such

( third party utility company or for any other breach or omission by the third party utility company under its contractual arrangements with FPL.

Section _EP8.2 --

Rates for Assured Delivery of Economic Enercy from Third Party Utility Company to FPL: If the economic energy transaction scheduled between FPL and the third party utility company is based upon the difference between the incremental cost of the third party utility company and the avoided cost of FPL the following rate shall apply:

Rate (Alternative No. 1): FPL, SOUTHERN COMPANIES and the third party utility shall jointly participate

1

( in a three-way share-the-savings type arrangement for economic energy deliveries from the third party utility to FPL with the calculation of the one-third share for each time period to be paid by FPL to SOUTHERN COMPANIES to be computed in accordance with the methodology and procedure set forth in Annex 1 to this Service Schedule EP, which annex is incorporated herein by reference.

The one-third (1/3) share to be paid by FPL to SOUTHERN COMPANIES shall be computed after provision for transmission losses. In no event will SOUTHERN COMPANIES' one-third (1/3) share of the savings be less than the equivalent of $2.00 per megawatt hour for each time period.

If the economic energy transaction scheduled between FPL and the third party utility company is based upon an energy price delivered to SOUTHERN COMPANIES which includes a mark-up by the third party utility company, the following rate shall apply:

Rate (Alternative No. 2): FPL and SOUTHERN COMPANIES shall jointly participate a in two-way share-the iavings type arrangement for economic energy deliveries from the third party utility to FPL based upon the difference between the delivered economic energy price and the avoided energy cost of FPL with the calculation of the one-half share for each time period to be paid by FPL to SOUTHERN COMPANIES to be

. a.

i-coatputed in accordance with the methodology and procedure set forth in Annex 2 to this Service Schedule EP, which annex is incorporated herein by reference.

The one-half share to be paid by FPL to SOUTHERN COMPANIES shall be computed after provision for transmission losses. In no event will SOUTHERN COMPANIES' one-hal'f shlare of the savings be less than the equivalent of $2.00 per megawatt hour for each time period.

Although the parties expect that the rate for most economic energy transactions will be computed in accordance with Alternative Rates Nos. 1 and 2 above, the parties recognize for purposes of flexibility and convenience that the parties l

may agree that the following rate should apply:

Rate (Alternative No. 3): FPL's and SOUTHERN COMPANIES' operating representatives may negotiate and 1

agree to a rate for each time period of the assured economic energy transaction at the time of the request for delivery of economic energy from a third party utility company, but in no event will the rate be less than the equivalent of $2.00 per megawatt hour for each time period.

l _Section EP8.3 --

Pay' ment for Delivery of Economic Energy from Third Party Utility Comoany to FPL: FPL shall pay

. l J. l 4

SOUTHERN COMPANIES for economic energy delivered from the third party utility company to FPL as follows:

The payment to be made by FPL to SOUTHERN COMPANIES shall be the summation of the products determined by multiplying the appropriate rates established in Sec-tion EP8.2 times the quantity of economic energy (in megawatt-hours) scheduled for delivery to FPL during each time period of the assured economic energy trans-action.

An example of this calculation is set forth on .

Annex 3 and is incorporated herein by reference. In the event the economic energy transaction is inter-rupted or curtailed by SOUTHERN COMPANIES for any of the reasons or causes set forth in Section EP6.1 (except failure to deliver by third party utility company), then FPL shall only be responsible for payment for those hours economic energy is actually delivered by SOUTHERN COMPANIES.

In the further event FPL interrupts or curtails the economic energy trans-action as a result of a limitation on the total energy transfer to FPL under Section EP6.2, then FPL shall only be responsible for payment for those hours eco-nomic energy is actually delivered to FPL by SOUTHERN COMPANIES.

_Section EP8.4 --

Payment for Early Termination or Curtailment of Assured Economic Energy Transaction Due to

-~ # ,

Failure of Third Party Utility to Supply Economic Energy:

If FPL curtails or terminates an economic energy transaction pursuant to Section EP6.3 due to inability of the third party utility company to supply economic energy, the payment to be made by FPL to SOUTHERN COMPANIES shall be the sum of (i) the amount owed by FPL for all economic energy scheduled for delivery during the time period prior to the time of the notice of curtailment or termination and (ii) the amount ~

owed for the economic energy originally scheduled for delivery during the 12 hour1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br /> period immediately following the notice of curtailment or termination and (iii) the amount owed for any economic energy subsequently scheduled for delivery after the end of the 12 hour1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br /> period through the end

( of the economic energy transaction. .

Section EP8.5 --

Presentation and Payment of Bills for Service: Charges in the amounts determined in accordance with this article for each month shall be stated in an original invoice presented by SOUTHERN COMPANIES to FPL pursuant to Article VII of the CONTRACT. FPL shall pay the invoice presented by SOUTHERN COMPANIES in accordance with Article VIII of the COMTRACT. Any amount due and unpaid after the due date will be termed delinquent and there shall be added interest at One Hundred Five Percent (105%) of the prime rate quoted on the date due by Manufacturers !!anover Trust Company in New York, New York, computed from the due 17 -

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<, I date to the date of payment (a day shall equal one-thirtieth of a month).

Section EP8.6 -- Disputed Bill: In case any portion of any bill submitted pursuant to this Article is in bona fide dispute, the undisputed amount shall be payable when due and the remainder shall be' paid promptly upon the determination of the correct amount in accordance with Section EP8.4. ~

ARTICLE IX MISCELLANEOUS PROVISIONS Section EP9.1 --

Regulatory Approvals: FPL and SOUTHERN COMPANIES recognize that this Service Schedule EP is

( required to be filed with certain regulatory agencies including the FERC. To such end, the SOUTHERN COMPANIES agree to take steps promptly to file this Service Schedule EP with the FERC.

Section EP9.2 -- FPL Responsible for Deliverv into Florida:

It shall be the sole responsibility of FPL to arrange its receipt of energy under this Service Schedule EP at the SOUTHERN COMPANIES-Florida interface. In this connection, FPL shall be responsible for any arrangements with other Florida utilities necessary to allow transfers of energy t

contamolate.d under this Service Schedule EP.

ge e' g Section EP9.3 -- Adoption by Reference of Provisions of the CONTRACT: Except as specifically provided for in this Service Schedule EP, the provisions of the CONTRACT shall apply to purchases and deliveries contemplated hereunder; provided, however, that in the event of any inconsistency between the provisions of the CONTRACT and this Service Schedule EP, the provisions of this Service Schedule .EP shall govern.

Section EP9.4 -- Service Schedule EP not to be a Precedent for Future Transactions: By executing this Service Schedule EP the parties have not deemed to have agreed on any method of pricing or ratemaking principle for the purposes of

_( future contractual negotiations or with respect to any future regulatory or court proceedings regarding contractual relations between them, nor shall any of the parties be prejudiced with respect to any position that any of them may desire to take in any such future contractual negotiations or proceedings involving such contractual relationships.

[The next page is the signature page, page 20.]

,, .o * ,

IN WITNESS WHEREOF, the parties hereto have caused the foregoing document to be executed by their duly authorized

(. officers effective as of the date first set forth above.

Attest: - . ,

FLORIDA POWER & L HT COMPANY By Secretary / # " >

W. E. Coe Vice President Attes : SOUTHERN COMPANY SERVICES, INC.

/[ By -

Asst.

g Secretary R. O. Usryjf Vice Presi&ent Atte t: ALABAMA POWER COMPANY

. By a d. K-g Asst. Secretary Robert E. Euffman Vice President Attes : GEORGIA POWER COMPANY By /

C Fred D. Williams As/t. Secretary Vice President Attes : GULF POWER COMPANY ff By [M Earl

[ B. mh Parsons, Gr.

Asst. Secretary Vice President Atte  : MISSISSIPPI P VER COMPANY

/h By V

As/t. Secretary St .~H . flell/ J r .

Vice President

'., ./ ,

Annex 1 Page 1 of 2 Service Schedule EP (Rate Alternative No. 1)

This Annex sets forth the methodology and procedure that will be used to compute the rate to be paid by FPL to SOUTHERN COMPANIES for economic energy transactions when the basis for determination 'of that rate is a three-way share-the-savings arrangement. A rate will be computed for each time period of an assured economic energy transaction arranged by FPL. It is expected that each day will be divided into two (2) time periods consisting of the hours beginning 7:00 AM and ending 10:00 PM prevailing Central Time (peak period) and for the hours beginning 10:00 PM and ending 7:00 AM prevailing Central Time (valley period), or such other time periods as agreed to by the operating representatives.

In order to compute the rate for each time period of the economic energy transactions, the following components will be established by the operating representatives of SOUTHERN COMPANIES and FPL in advance of the transaction:

(A) Avoided cost of FPL (in $/MWh);

( (B) Incremental cost of economic energy to be delivered from the third party utility company to SOUTHERN COMPANIES (in $/MWh);

(C) Economic energy (in MWh) to be supplied to SOUTHERN COMPANIES from the third party utility company; and (D) Economic energy (in MWh) to be delivered by SOUTHERN COMPANIES to FPL (to be net of incremental transmission losses).

SOUTHERN COMPANIES rate for its share of the total net economic benefit for each time period resulting from the economic energy transaction ($ per MWh) will be computed as follows:

SCRATE ($/MWh) = ((A) X (D)) - ((B) X (C))

(3 X (D))

If the rate for any time period is calculated to be less than $2.00/MWh, the rate will be establishr.d at $2.00/MWh for the time period.

b

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' Annex 1 Page 2 of 2 l C,. Example Calculation - Rates for Service Schedule EP Section EP8.2 - Rate Alternative No. 1 Assumed Data for Example In accordance with the procedure and time frames set forth in Section EPS.1, FPL contacts the operating representative at SCS to arrange for an assured economic energy transaction over a two (2) day period with a third party utility company. The operating representatives agree to the following values for each period of each day of the assured transaction:

Inc. Cost of Economic Economic Energy Energy to be to be Economic Energy FPL Delivered From Delivered From Delivered to Avoided Third Party to Third Party to FPL by Cost SOUTHERN COMPANIES SOUTHERN COMPANIES Period SOUTHERN COMPANIES (A) (B) (C) Losses (D)

(5/MWh) (5/MWh) (MWh) (%) (MWh)

Day 1 Peak 30.00 21.00 2,000 10.0 1,800 Va11ey 26.75 20.00 600 5.0 570

( Day 2 Peak 32.00 21.00 2,000 10.0 1,800 Valley 28.00 20.00 600 6.0 564 Example Calculation of Rates:

Substituting data into the equation:

SCRATE (for each time period) = ((A) X (D)) - ((B) X (C))

Day 1 - Peak Period (3 X (0))

= ((30.00 X 1800) - (21.00 X 2000))/(3 X 1800) = $2.2222/MWh Day Day 21--Peak Valley Period == (26.75 X 570) - (20.00 X 600))/(3 X 570) = $1.8991/MWh = $2.00/F Period (32.00 X 1800) - (21.00 X 2000))/(3 X 1800) = $2.8889/MWh Day 2 - Valley Period = (28.00X 564) - (20.00 X 600))/(3 X 564)=$2.2411/MWh b

Annex 2 Page 1 of 2 Service Schedule EP (Rate Alternative No. 2)

This Annex sets forth the methodology and procedure that will be used to compute the rate to be paid by FPL to SOUTHERN COMPANIES for economic energy transactions when the basis for determination of that rate is a two-way share-the-savings arrangement.

A rate will be computed for each time period of an assured economic energy transaction arranged by FPL. It is expected that each day will be divided into two (2) time periods consisting of the hours beginning 7:00 AM and ending 10:00 PM prevailing Central Time (peak period) and for the hours beginning 10:00 PM and ending 7:00 AM prevailing Central Time (valley period), or such other time periods as agreed to by the operating representatives.

In order to compute the rate for each time period of the economic energy transactions, the following componertts will be established by the operating representatives of SOUTHERN COMPANIES and FPL in advance of the transaction:

(A) Avoided cost of FPL (in $/MWh);

(B) Price of economic energy to be delivered from the third party utility

( company to SOUTHERN COMPANIES (in $/MWh);

(C) Economic energy (in MWh) to be supplied to SOUTHERN COMPANIES from the third party utility company; and (D) Economic energy (in MWh) to be delivered by SOUTHERN COMPANIES to FPL (to be net of incremental transmission losses).

SOUTHERN COMPANIES rate for its share of the total net economic benefit for each time period resulting from the economic energy transaction ($ per MWh) will be computed as follows:

SCRATE ($/MWh) = ((A) X (0)) - ((B) X (C))

(2 X (D))

If the rate for any time period is calculated to be less than $2.00/MWh, the rate will be established at $2.00/MWh for the time period.

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d ." Annex 2 Page 2 of 2

( Example Calculation - Rates for Service Schedule EP Section EP8.2 - Rate Alternative No. 2 Assumed Data for Example In accordance with the procedure and time frames set forth in Section EPS.1, FPL contacts the operating representative at SCS to arrange for an assured economic energy transaction over a two (2) day period with a third party utility company. The operating representatives agree to the following values for each period of each day of the assured transaction:

Price of Economic Economic Energy

Energy to be to be Economic Energy FFL Delivered From Delivered From Delivered to Avoided Third Party to Third Party to FPL by Cost SOUTHERN COMPANIES SOUTHERN COMPANIES Period SOUTHERN COMPANIES (A) (B) (C) Losses (D)

(5/MWh) (5/MWh) (MWh) (%) (MWh)

Day 1 Peak 30.00 22.50 2,000 10.0 1,800 Valley 27.00 22.00 600 5.0 570

( Day 2 Peak 32.00 22.50 2,000 10.0 1,800 Valley 28.00 22.00 600 6.0 564 Example Calculation of Rates:

Substituting data into the equation:

'

• SCRATE (for each time period) = ((A) X (D)) - ((B) X (C))

Day 1 - Peak Period (2 X (D))

Day 1-ValleyPeriod=(((27.00X=(30.00X1800)-(22.50X2000))/(2X1800)=$2.5000/MWh Day 2 - Peak Period 570) - (22.00 X 600))/(2 X 570) = S1.9211/MWh = $2.00/F Day 2 - Valley Period = (((28.00 X=(32.00X1800)-(22.50X2000))/(2X1800)=$3.5000/MW 564) - (22.00 X 600))/(2 X 564) = $2.2978/MWh

N 1 s J ,:

Annex 3 Page 1 Example Calculation - Payment for Delivery of Economic Energy Service Schedule EP Section EP8.3 The payment to be made by FPL to Southern Companies for each assured economic energy transaction shall be computed bys 'unning the products determined by multiplying the rates for each time period times the quantity of energy scheduled to be delivered during each time period. Examples of this computation, utilizing the data from Annex Nos. 1 and 2, follows:

Energy Scheduled to be Delivered Delivery Period to FPL Rate Payment (MWH) (5/MWH) (5)

Rate Alternative No.1 (Annex 1)

Day 1

( Peak Valley 1,800 570 2.2222 2.0000 4,000.00 1,140.00 1,800 2.8889 5,200.02 Valley 564 2.2411 1,263.98 Total Payment 11,604.00 Rate Alternative No.2 (Annex 2) 1,800 2.5000 4,500.00 Valley 570 2.0000 1,140.00 Day 2 Peak 1,800 3.5000 6,300.00 Valley 564 2.2978 _1,295.96 Totai Pavment 13,235.96 b

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