ML20214Q955

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Application for Amend to License NPF-59,recognizing Central Illinois Electric Generating Co Status as Titleholder of Facility,Per Agreement Between Util,State of Il & Cook County.Mou & marked-up License Encl.Fee Paid
ML20214Q955
Person / Time
Site: Braidwood Constellation icon.png
Issue date: 05/28/1987
From: Hunsader S
COMMONWEALTH EDISON CO.
To: Murley T
Office of Nuclear Reactor Regulation
Shared Package
ML20214Q957 List:
References
3107K, NUDOCS 8706050276
Download: ML20214Q955 (104)


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') Commonwealth Edison One First National Plaza. Chicago, IInois i

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Address Reply to: Post Office Box 767 1*

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\\s Chicago, Illinois 60690 0767 May 28, 1987 Mr. Thomas E. Murley, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, DC 20555

Subject:

Braidwood Station Units 1 and 2 Application for Amendment to

$3 Facility Operating License NpF-M and Appendix A, Technical Specifications NRC Docket No. 50-456 and 50-457

Dear Mr. Murley:

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

to facilitate an agreement, dated February 3, 1987, among Commonwealth Edison Company, the Governor, the Attorney General of the State of Illinois, the States Attorney of Cook County, Illinois, several other representatives of state agencies and certain industrial customers of Commonwealth Edison Company (the " Agreement"). The Agreement is attached as Exhibit A.

The Agreement, which is pending before the Illinois Commerce Commission for approval, concerns a number of contested proceedings before the Illinois Commerce Commission and the courts involving the continued construction of Braidwood Station Units 1 and 2, as well as establishing the rates which Commonwealth Edison Company will be allowed to charge in recognition of the operation of Byron Station Unit 2 and Braidwood Station Units 1 and 2.

Specifically, the Agreement contemplates the conveyance of title to Byron Station Unit 2 and Braidwood Station Units 1 and 2 from Commonwealth Edison Company to the Subsidiary in accordance with the Facilities Transfer Agreement which is attached as Exhibit B.

Commonwealth Edison Company will have the right to purchase all electricity produced by the units for at least a 5-year period under a Power Supply Agreement which is attached as Exhibit C.

The Subsidiary's rates will be regulated by the Federal Energy Regulatory Commission. The Agreement also provides for a rate increase of approximately 9.6% (net of fuel savings) to Commonwealth Edison Company's retail customers with a five year moratorium on rate increases thereafter. The retail customer rates would continue to be regulated by the Illinois Commerce Commission thereafter.

Finally, the Agreement provides several options that are available to address the rate treatment of the units owned by the subsidiary after the fifth year. Those options are to be exercised at the direction of ok the Illinois Commerce Commission.

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Mr. T.E. Murley Mry 28, 1987

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a Although the Subsidiary will become the titleholder of Braidwood Station Units 1 and 2 ("the Facility") under the Agreement, it is not contemplated that the Subsidiary would itself operate the Facility.

Commonwealth Edison Company, under an agreement with the Subsidiary, would continue to operate the Facility and be financially responsible for the operations of the Facility as that term is used in the regulations of the Nuclear Regulatory Commission (the "NRC").

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

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

, of this letter contains additional general information in support of the application for license amendment.

Included is a description of the organization and management of the Subsidiary, the Facility being conveyed to the Subsidiary, and information concerning technical and financial qualifications. addresses antitrust review. The information presented in this attachment demonstrates that neither the Agreement which occasions this amendment application nor its implementation constitute changed circumstances which raise any significant issues under the antitrust laws or which require a further antitrust review.

This proposed amendment has been reviewed and approved by both on-Site and Off-Site review in accordance with Commonwealth Edison Company

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procedures. We have reviewed this proposed amendment in accordance with 10 CFR 50.92(c) and determined that no significant hazards consideration exists.

Our analysis is documented in Attachment 3.

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

Until all necessary approvals have been obtained, the Agreement described above cannot be implemented.

It is intended that such approvals will be sought and obtained by July 1, 1987. Therefore, it is requested that the NRC approve the proposed operating license amendment but delay its effectiveness until 12:01 a.m., July 1, 1987. Should it subsequently appear that other regulatory approval cannot be obtained prior to that time, Commonwealth Edison Company will promptly notify the NRC.

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

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Mr. T.E. Murley May 28, 1987-In accordance with 10 CFR 170, a fee remittance'in the amount of

$150.00 is enclosed.

Please direct any questions regarding this matter to this office.

Very truly yours, A c. M S. C. Hunsader i

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

Enclosure:

Fee Remittance cc: Byron Resident Inspector NRC Region III Office J.-A. Stevens - NRR M. C. Parker - IDNS SUBSCRIBED AND SWO to befo k

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MEM0RANDUM OF UN'DERSTANDING

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Exhibit A I

t February 3, 1987 MEMORANDUM OF UNDERSTANDING WHEREAS: The completion of the nuclear power plants now under construction in Northern Illinois and the potential impact.

which either completion or cancellation of these plants could have on electric rates, electric service and the economy of the State are matters of great concern to the people of this State; and WHEREAS:

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

protracted and costly litigation concerning the completion of these power plants is con'tinuing and further costly litigation concerning the level of electric rates will occur unless resolved by agreement among responsible public officials, electricity consumers and Commonwealth Edison Company

(" Edison"); and WHEREAS:

the signatories to this Memorandum all agree

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that it is in their mutual interest to resolve the continued uncertainty with respect to completion of these power plants, the o-

','~1evel'of electric rates and the adequacy of electric service and

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to resolve those uncertainties without resorting to still further litigation which all agree would only serve to increase the costs to all concerned.

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

RESTRUCTURING THE OWNERSHIP OF THREE NUCLEAR GENERATING FACILITIES 1.

Edison will transfer its nuclear generating facili-ties known as Byron Unit II and Braidwood Units I and II (the

" Units") to a-wholly-owned subsidiary (the " Subsidiary").

Neither Edison nor the Subsidiary will take any action with respect to ownership (legal or equitable) of the. Units that would prevent the Subsidiary from performing its obligations under the Power Supply Agreement provided for herein.

Edison will complete and operate the Units, transferred to the Subsidiary.

For operating purposes, Edison will treat the Units on the same basis as its own units and will be respons'ible for insuring that they are operated and main-1 tained safely and in accordance with all requirements of the Nuclear Regulatory Commission ("NRC").

In all aspects of operat-

,ing the Units Edison will allocate costs and resources on a basis consistent with its general utility operations so as to insure that no subs'idy flows from or to the Subsidiary.

For purposes of treating deferred taxes related to the Units, Edison agrees that during the Initial Rate Period (as defined in Paragraph 3 herein) the Units shall be treated in the same manner as the nuclear units owned by Edison; and that deferred taxes shall not be flowed back to income disproportionately during the Initial Rate Period.

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ratemaking purposes, book depreciation during the Initial Rate Period shall be accrued on a straight-line basis.

Such deprecia-tion shall commence (and capitalization of carrying charges shall cease) for Byron II and Braidwood I no later than July 1, 1987, and for Braidwood II no later than October 1, 1988.

Edison fur-ther agrees that it will not cause the subsidiary to replace Edison as the primary obligor of any outstanding security of Edison existing at the time this Memorandum is executed.

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

The Subsidiary's rates will be subject to regulation by the Federal Energy Regulatory Commission

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

In connection with the transfer to the Subsidiary, Edison will Write off not less than $550 million of its investment in the Units.

Edison will file appropriate. pleadings with the ICC to implement the provisions of this Memorandum.

Parties t tais Memorandum shall have the right to participate in any hearing called by the ICC relative to said petition.

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

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l that retirement of its generating units requires the approval of the ICC under the Public Utilities Act.

Furthermore, Edison

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represents that it intends to operate its generating units in accordance with the principles of economic dispatch (subject to changes imposed by governmental authority) and that its Illinois 4

coal-burning units are, and Edison believes that at least for the.

duration of the Initial Rate Period, are expected to be, its lowest cost coal-burning units.

Edison agrees that it will not defer its operating and maintenance ekpenses and capital additions costs during the Rate 1

Moratorium Period for the purpose of increasing its costs for test year purposes in any rate proceeding after the Rate Moratorium Period.

To enable any party to verify that Edison has conducted its operating and maintenance and capital additions programs in accordance with this commitment, Edison shall file annually during' the Initial Rate Period a report with the Commission describing its budgeted and actual activities related to operating and main-l tenance expenses and capital additions costs for the previous year.

The report shall include an explanation of any significant discrepancies between the budget and actual expenditures for that year.

RATE MORATORIUM 2.

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

in Paragraph 3 hereof (or, if option (c) of Paragraph 5 is exer-cised, the increase permitted therein), nor will Edison otherwise seek any other increase in its rates during this period, except as otherwise provided in Paragraph 3 hereof.

This paragraph shall not preclude Edison from seeking an increase or decrease in or 1

taking any other action before the ICC with respect to the follow-ing Rates and Riders, or from taking any other action with the consent of the party effected by the change:

Rates 1, 1E and IT (but only as these three rates relate to light bulb charges), and Riders 4 (but'only with respect to avoided cost payments),

6, 7,

10, 21, 23 and 27.

(In this Memorandum, " general rate increase" means any increase for which Edison would, absent a waiver by the-Commission, have to comply with ICC General order 210 now codified at 83 Ill. Admin. Code 285).

,3.

Effective as of July 1, 1987, Edison will increase t

its base retail rates by approximately $660 millien, exclusive of revenue taxes.

The general service rates will be determined by i

applying a uniform percentage increase to its base rates currently l

in effect.

The uniform percentage increase that will be applied 4

to the general service rates will be the percentage that, if applied to all of Edison's base rates, would result in a revenue increase of approximately $660 million.

The parties agree that Edison's residential and general service rates will be as set forth in Attachments A, B and C.

Attachment A reflects a reduc-tion in the summer-winter rate differential.

Except as otherwise required by the terms of this Memorandum, during the Initial Rate Period fuel costs of the Units shall be included in Edison's l

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s computations under its fuel adjustment clause in the same manner as though the Units were owned'by Edison.

During the Rate Morato-rium Period, Edison will not file with the ICC any other request for a general rate increase or for any other increase in rates (other than as may result from changes in the rates and Riders listed in Paragraph 2 hereof) except:

a.

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

- son's ability to continue to maintain an adequate quality of service in its service i

area or otherwise carry out its responsibil-ities as a public utility; or b.

To recover costs or re' coup revenue losses imposed by decisions, or by changes in_ law, ordinances, rules or regulations or inter-pretations thereof promulgated or enacted by any Illinois court, the General Assembly or any other Illinois governmental or regulato-ry body or other authority after the date hereof involving regulatory or tax matters or franchise or similar payments to units of local government, all as applicable primari-ly to electric utilities, public utilities, Edison or regulated industries generally (as distinguished from being applicable to all businesses or taxpayers as a class).

c.

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

The Commission shall make the determination of whether an appro-priate emergency exists to warrant the granting of a rate increase i

pursuant to the foregoing subparagraph a.

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

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of this Paragraph 3 (or in option (c) of Paragraph 5 of this Memorandum) or b) from seeking a rate reduction where a relaxation of governmentally imposed costs, such as, for example, a material reduction in taxes, creates a significant windfall for Edison.

A "significant windfall" exists only if in any year Edison's re-ported consolidated net income, before interest expense, produces a rate of return on Edison's total book assets (including those of the subsidiary) which.is in excess of a rate of return which would be just and reasonable if applied to Edison's utility rate base pursuant to the Illinois Public Utilities Act.

On or about July 1, 1992, or, if option c in Paragraph 5 hereof is exercised then on or about July 1, 1995, Edison shall file with the Icc an application for a determination as to appro-priate rates following the Initial Rate Period.

Such application may include a request for a general rate increase (including emergency relief) or decrease.

The period,beginning with the effective date of the rate increase provided for in the first sentence of Paragraph 3 and ending with the effective date of the rates established by this procedure is defined as the " Initial Rate Period."

4.

At no time will Edison seek to recover any revenue

  • rg.e. shortfall or inadequacy which it may believe exists in its rate levels in effect during the Rate Moratorium Period.

This provi-sion shall not prevent Edison from seeking a rate increase under the terms of the exce:,)tions specified in subparagraphs (a), (b) and (c) of Paragraph 3 or from seeking emergency rate relief immediately following the Rate Moratorium Period. -.

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POWER SUPPLY AGREEMENT 5.

Edison will enter into a Power Supply Agreement with the Subsidiary whereby Edison will have a right which shall take precedence over the right of other purchasers to purchase all of the output of the Units for five years.

Edison will buy elec-tricity from the Subsidiary when doing so'is cheaper than produc-ing electricity from other units or buying it elsewhere.

In exchange for the right to buy electricity, Edison will pay a fixed monthly fee of $55 million to the Subsidiary.

During the five year period ending June 30, 1992, Edison will pay only the cost of fuel, plus amounts equal to the amounts of bonuses provided,for in the Output Guarantee provision of this Paragraph 5, for the elec-tricity it buys from the Subsidiary.

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

The amount of replacement power in respect of any year shall be i

l deemed to be the shortfall in cumulative target level output as of i 6

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the and of such year less the amount, if any, of such shortfall at the end of the preceding year.

In computing the shortfall in output under this paragraph, only one-half of any energy for which Edison has received a bonus of one-half of the savings pursuant to the immediately succeeding paragraph, shall be considered as energy output of the Units.

If in any year the subsidiary produces energy from the Units in excess of 110% of the annual target level set forth below l

for such year, Edison shall be entitled to a bonus based on the savings relat&d to all energy produced in excess of 110% of the target output.

Such savings shall be the difference between replacement power costs and the fuel costs of the Units applicable i

to the energy representing output in excess of 110% of the target output.

The bonus shall be equal to the full amount of such savings to the extent those savings do not exceed the amount of credits previously paid pursuant to the preceding paragraph and half such savings to the extent such savings do exceed such cred-its.

In determining if a bonus is earned, all kWh output in any i

year up to 110% of target levels shall be considered normal out-put.

Then any output achieved in that year after 110% of the target output has been achieved shall be considered excess output 2 eligible for the. bonus.

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

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TARGET LEVELS Annual Cumulative Year Gioavatthours Giaawatthours July-Dec 1987 6,000 6,000 1988 11,000

' 17,000 1989 13,200 30,200 1990 16,100 46,300 1991 18,000 64,300 Jan-June 1992 7,550 71,850 Commonwealth Edison will propose methods and procedures to estimate replacement costs for power, and submit such proposal to the parties to this Memorandum for comment.

All parties agree to work together to develop a mutually agreeable approach.

In the event that there are unresolved disputes, the parties agree to submit the matter to the ICC for hearing and resolution.

Canacity Guarantee The Cumulative Target Level Gigawatthours as of July 1, 1992, as set forth' above in this Paragraph 5, assumes that Byron II and Braidwood I each will produce 25,273 gigawatthours during the period and that Braidwood II will produce 21,304 gigawatthours during the period.

If, as of July 1, 1992, either 4

Byron II or Braidwood I has produced less than 20% of its share of the Cumu:.1/e Target level Gigawatthours, and as of such date, that Unit has become inoperable and it reasonably appears that the Unit will not operate in the foreseeable future, Edison shall be obligated to provide additional credits against costs used in computing fuel adjustment charges under Edison's retail rates.

I such credits will be determined in accordance with Attachment D.

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However, no such credits shall be made if the aggregate of the credits provided for under the output Guarantee is equal to the aggregate amount of fixed monthly fees paid by Edison pursuant to Paragraph 5.

Ootions After Five Years The Subsidiary shall agree to offer to Edison the fol-loving options, exercisable by Edison (after hearings and approval by the ICC) no later than July 1,1991, relating to Edison's right to purchase p'ower from the Subsidiary following June 30, 1992:

a.

Edison may purchase power from the Subsidiary when and as available for a period of 20 years at prices subject to FERC jurisdiction and have the " favored nations" rights set forth in Attachment E attached hereto.

(Nothing contained herein shall be deemed to deprive the ICC of any authority it may have to approve contracts for purchase of' such power or to review the prudence of such ' purchases); or b.

Edison may contract to purchase not less than the entire amount of the output of Byron Unit II for the i

remainder of its useful life and such amount of power (in blocks of 100 megawatts) from Braidwood I as e

Edison shall designate at the time of exercise of this option, over the remainder of that Unit's useful lit:

Such power shall be sold at rates determined using traditional not original cost rate base / rate of 4

return regulation and accounting for fuel and all other costs of produc-tion, all as determined by the FERC from time to time.

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

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Edison has elected to purchase any amounts of power from Braidwood I pursuant to this option (b), Edison may, effective on July 1, 1997 or, i

if option (c) has been exercised, on July 1, 2000, reduce the amounts i

of power (in blocks of 100 megawatts) from Braidwood I which it i

must purchase, by giving notice of

'such reduction 12 months prior to the effective date.

(If Edison exercises the option to purchase the entire output of Braidwood II and option (c) has been exercised, Edison cannot reduce the amounts of power' purchased from Braidwood I on July 1, 2000.)

The amount charged to Edison will be reduced to reflect

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

If Edison exercises this option (b) and has not reduced the amount of power it has elected to purchase from Braidwood Unit I, it shall have a further option, exercisable on December 1, 1998, to purchase not less than the entire output of Braidwoo'd II during the period January 1, 2000 through the remain-der of its useful life.

If Edison elects,to purchase such output, the rate Edison will pay therefor shall be the greater of (1) the market value of power as determined with reference to third party, arms l

length, long term firm power pur<

chase contracts commencing approxi-mately JanuPPf, 2000, or (2) prices determined u.ing traditional not original cost rate base / rate of return regulation and accounting for fuel and all other costs of produc-tion, all as determined by the FERC.

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

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s For purposes of traditional net original cost rate base / rate of-2 return regulation whenever provided for in this option b, rate base shall be calculated after deducting

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the applicable portion of the not F

less than $550 million write-off specified in Paragraph 1; or j

c.

Edison may defer the election of 3

options (a) or (b) until July 1, 1994, in which caso it shall be il entitled to a one-time retail rate increase beginning on July 1, 1992.

The increase will be accomplished l

by applying a uniform percentage l*

increase to basa rates then in

- effect.

The percentage. increase will be the lesser of i) one-half of the cumulative increase in the

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Consumer Price Index for All Urban consumers, published monthly by the U.S. Department of' Labor Bureau of.

Statistics, for Chicago,. Illinois --

Nort(. western Indiana, from April,1, 1987 to April 1,/1992, or 11) 7;5 percent.

If Edison elects this option (c), -

' the $55 million monthly fee payable -

to the subsidiary pursuant to this Pafagraph 5 shall be adjusted to reflect the full amount of the increase, and the output and Capaci-ty Guarantee provisions of this Paragraph 5 shall_notiapply during the period of the' extension.

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

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1994-Idison will select one of the above options as directed by the ICC.

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

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benefit of Edison's ratepayers shall rest with the ICC and the ICC shall direct Edison with regard to said options.

From time to time Edison will institute proceedings before the ICC to obtain its direction and authority to exercise (or not exercise) such options within the time frame permitted for the exercise of said options.

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

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

If the Commission fails to direct Edison as to which I

option it is to elect on or before July 1, 1991 (or if option (c) is elected by July 1, 1991, and the Commission subsequently fails to further direct Edison with regard to the election of options (a) or (b) on or before July 1, 1994) and Edison has filed with 1

the ICC a reque'st'for direction no later than 12 months prior to the date in question:

(i)

Edison shall be deemed to have elected to contract to purchase the entire output of Byron II for the remainder of its useful life and 50% of the entire output of Braidwood I for the remainder of its useful life, all effective as of the termi-nation of the Rate Moratorium Period; j

(ii)

Edison shall have no further options under this Memorandum; and (iii)

The rates for power contracted for pursuant to subparagraph (i) above shall be determined as provided above with respect to output of Byron II and Braidwood I contracted for under option (b). l

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i REGUIATORY AND JUDICIAL ACTIONS 6.

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

i A.

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

(i)

Authorization of creation of the Subsidiary and transfer of the Units and permits and licenses related thereto to the i

subsidiary.

(ii)

Approval of agreements between Edison and the Subsidiary under which Edison will complete construction of the Units and operate the Units and purchase power from the Subsidiary.

(iii)

Authorization for Edison to invest in the Subsidiary, from time to time, as required to assure proper maintenance and operation of the Units.

(iv)

Release of Edison from any obliga-tion it has to complete the Units pursuant to prior orders of the Commission.

'(v)

Authorization for Edison to guaran-tee the subsidiary's obligations and liabilit-ies with respect to safe operation of the Units.

1 (vi)

Approval of rates reflecting the rate increase provided for in the first four

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sentences of Paragraph 3 hereof, including any necessary waiver of General Order 210.

(vii)

Approval of a suitable modificatita in Rider 19 to limit its availability in the case of changes in ownership of existing facilities.

(viii)

A statement of intention not to oppose any reasonable proposal by Edison during the Initial Rate Period to refinance securities or otherwise to revise its capital structure so as to enhance the position of its stockholders within the framework of the revenues allowed Edison during the Initial.-

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

(ix)

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

(x)

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

(a)

Braidwood construction case (b) staff investigation into Edi-son's future rates (c) staff investigation into effect of the 1986 tax reform act as to Edison (d) pending Rate 1 restructuring (e) notice of inquiry into excess capacity (it being understood that it shall be a satisfactory resolution for this purpose if the Commission's determination has no application to Edison for the term of the Initial 1

Rate Period or as its capacity may be deemed to be affected by purchases pursuant to option b of Paragraph 5.

However, nothing herein shall preclude an excess capacity inquiry or adjustment at such time as Edison has acquired (through construction, joint ownership or purchase) capacity in addi-tion to existing capacity and capacity acquired through the exercise of option (b) of Paragraph 5.)

(f) pending fuel reconciliation proceedings !

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(g) pending audits pertaining to Byron II and Braidwood I (h)

Uniform fuel clause proceed-1 ings (it being understood that satisfactory resolution would-preserve Edison's fuel clause in essentially its present form [with modifications re-quired under this agreement) for the Initial Rate Period including the right of the Commission to require Edison to operate on an economic dispatch basis).

It is further agreed that during the Initial Rate Period Edison will not be re-quired er permitted to recover purchased power demand charges or fixed fees for purchased-power through the fuel clause.

B.

Timely grant of Nuclear Regulatory Commission approval of transfer of the Units and their li'-

censes to the Subsidiary.

C.

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

D.

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

E.

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

e F.

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

COMMITMENTS OF THE PARTIES i

7.

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

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. 9 furtherance thereof before the ICC to implement.the provisions of this Memorandum on or before February 6, 1987.

The other parties to the Memorandum agree to support the terms of this Memorandum in any proceeding in which they are participants before the ICC, the NRC and the FERC.

The parties agree that for the Initial Rate Period they will not take any action (whether before a regulatory body, the General Assembly or any other legislative body, or any court) that would-provent or require the undoing of any of the i

transactions contemplated by this agreement, it being understood, however, that-in Supreme Court Docket No. 63747, Peonle 21 thR State 2f Illinois gg Igl Egil I. Hartican, Attorney General E.

Illinois Commerce Commission And Commonwealth Edison ConDanV", the parties have presented their positions and have the discretion to 4

determine what action to take in that case.

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

The parties recognize that 1

Edison's agreement to limit the level of its rates or otherwise to adhere to the terms hereof is conditioned upon compliance with

)

this Paragraph 7 by all other parties hereto.

Edison's failure to accomplish the implementation of the settlement on or before September 1, 1987 shall discharge the parties hereto from all obligations with respect to the regulatory and judicial actions l

set out in Paragraph 6 hereof, provided, however, that if Edison has extended the termination date set forth in Paragraph 8 to a i

2 date later than September 1, 1987, then such later date shall be 4

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,.s.,_-..e,,,,,

___.--.,-,-----.n.

substituted for September 1, 1987 in this sentence.

It is further understood that the parties may participate in generic dockets related to the subjects specified in subparagraphs A(x)(e) and (h) of Paragraph 6 hereof.

However, the results produced by these dockets shall not be used by any party in conflict with the representations related thereto in this Paragraph 7.

GENERAL 8.

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

Edison shall have the right to extend the deadline for or waive any such action, subject to the limitations herein con-tained.

During the period of any such extension, Edison's rates shall pro, vide for charges no higher than the greater of (i) charges permitted under Edison's rates now in effect, or (ii) charges under s'uch rates as they may be changed under Paragraph 2 or 3 hereof.

No such extension shall operate to extend the termi-nation date of the Rate Moratorium Period, or the date by which

, options in Paragraph 5 may be exercised.

No such waiver shall permit Edison to place in effect any rates which provide for e?,te charges higher than the greater of (i) charges permitted under Edison's rates now in effect, or (ii) charges under such rates as they may be changed under Paragraph 2 or 3 hereof.

If Edison extends any deadline pursuant to this Paragraph 8, and this under-standing, nonetheless, thereafter terminates because regulatory or judicial action contemplated herein has not occurred prior to the j i

~, _ _. - _

extended deadline, its rates now in effect shall be reinstated as of the date of termination.

No such extension shall expire late.

i than December 31, 1987.

In addition, in the case of such a termi-nation, if during the period of the extension Edison places in I

effect a general rate increase, the output Guarantee provided j

under Paragraph 5 shall be considered to be in effect during such period.

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

This understanding shall not be construed as preventing Edison from filing for a rate increase in respect of its invest-ment in and operating and maintenance costs associated with.

Byron II and Braidwood I and II prior to July 1, 1987, nor shall it operate to prevent the parties from contesting such applica-j tion.

No increase which may result from any application permitted j

by the precedin'g sentence shall become effective during the period of any extension of the July 1, 1987 deadline.

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

9.

In addition to Edison's other rights in respect of any failure to meet the conditions to its obligations hereunder, (a) if, prior to the time the regulatory and judicial actions specified in Paragraph 6 occur, in Edison's reasonable judgment it appears likely that any governmental action provided for herein 4

will not be taken within the time specified in Paragraph 8 (other !

-. - ~.

than because of Edison's fault), or (b) thereafter if Edison and at least two of the other parties to this Memorandum believe it likely that any such action will be invalidated, in whole or in part, Edison may terminate the understandings embodied herein and if Edison has already conveyed the Units to the Subsidiary, Edison shall have the right to cause the subsidiary to reconvey the Units to Edison.

The ICC order approving the conveyance to the Subsid-inry shall contain appropriate provisions approving such a recon-vayance.

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

10.

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

11.

Inj disputes over the interpretation of this Memo-randum will be committed to the respective regulatory agency having jurisdiction over the subject matter.

12.

The parties agree that any FERC-mandated modifica-I tions, alterations, amendments or changes to any component of the

--*s provided for in this Memorandum, the Power Supply Agreement or any other governing dccument, or the terms or conditions there-of, shall not constitute a basis for a change in retail rates during the Initial Rate Period.

This provision shall not be i

{

construed as modifying or in any manner limiting the condition imposed in Paragraph 6C.

1 -

4 1

b 13.

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

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

Metrorandum of Understanding dated this 3'W day of February, 1987.

Commonwealth Edison Company By

+ -n O/M1

'faitesd O'Connor, thairman I

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Memorandum of Understanding dated this day of February, 1987.

James R. Thompson, Governor, on behalf of the People of the State of Illinois By v-e 6

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

i Neil F. Hartigan, Attorney General, on be alf of the People of the State of Illinois *

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

Richard M. Daley, State's Attorney, on behalf of the People of cook county, Illinois A

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Memorandum of Understanding dated this Z d ay of d

February, 1987.

The Illinois Industrial Energy Consumers (IIEC) Party Interveno in Docket 86-0249 By

/Di ~ l '/f f

RANDALL ROBERTSON' Attorney for IIEC l

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Memorandum of Understanding dated this day of February,1987.

The Governor's Office of Consumer Services h)

/ 6 fa BY l

Alvin K. Grandys, Ph.D. /

Director i

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

9 i

The Small Business Utility Advocate

,D A S o

By William Gf d

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Att:chc nt A e

ELECTRICITY For the Otles and Vi!! ages listed en ILL. C. C. N2 4 Commonwealth Sheets Nos. 4,5,6,7 and 8 Revised Shees No. 9 4

Edison Company and the minwrpned ccringuous terruary RATE 1. RESIDENTIAL SERVICE As alf ability.

Tha rate is avadable to any customer using the Company's electric service for residendal purposes.

Charges.

  • Monthly Customer Charge.

July 1,1987 Through January 1,1939 December 31,1988 and After For Cusicrner residr: in:

A buDdeg emuining 3 or more dwelLng miu.....................

S330 5 3.45 A buildmg conuining I or 2 dweEng uruu.......................

S 9.10

$ 8.86 Baadms: containing I or 2 dwe!!ing units shan include. ta: acs be limited to. strucsures commonly referred to as single famdy detached houses. single famuy attached houses. row houses, town houses, semi <letached houses. duplexes, two-Gats, and two famDy houses.

On Decernber 10. 1984 the Canpany had sisigned a!! exisung Rate I custaners to one d the charge classificadens desen~ bed above, if any of these customers informs the Company that this initial classificadon is incorrect, the Cornpany. ope venficadon, sul place the customer in the a;prcynate classdication but wD] ocs issue any refund.

  • Energy Charge.

July 1,1987 Through January 1,1989 December 31,1968 and After Summer \\fnnth Garge per kuomatthour for fest 400 kDomschours suppbed in the mcnth......................................

!!.9644 II.695s Garge per kuomaubour for aU kuom atthours over 400 suppLed in the month............................

16.770e 16.1024 0%e %f arts Charge per kdomanhour for first 400 kDowanhoun supphed in th e meth......................................

11.964#

11.695s Qarge per kUowsuhour for au kDow subours over 400 suppbed in the mmth......................................

5.3924 5.306c For the parposes henof. the Summer Maths shad be the cusicrner's first methly bDLng period wah an endes meter readmg date on or after June 15 and the ihree succeedes meth!y biums priods.

The fuel adjustment charge or credit provided for b Rader 20 shan a; ply to aD kDowauhours suppbed in the month.

Late Payment Charge.

The late payment charge provided for h the Terms and Condinms d this Schedule of Rates shad be appucable to au charges under t}us rate.

Light Bulb Service.

The above charges do nos include light bulb service. The charge for such service shad be 0174 per kDonauhour for the first 500 kilowanhours suppLed in the momh.1.ight bulb semce is described in Rader 10 and is opumal wuh the cusianer.

Minimum Charge.

m a. The minimum momh!y charge shaU be the Monthly Cusiczner Charge.

'Tirm of SerWe.

The customer's term of service shaU ccrnmence when the Company begins to supply servics hereunder and shan condnue not more than im days after nodce is received to daemunus service.

Three. Phase Service.

Three. phase service is available under this rate. Where a three. phase secondary eupply is exa avaDable from the Company's datnbudm systern adjacent to the customer's property, the necessary pninary and secondary extensions wi!! be fumished by the Ccrnpany subjea to the provisions of Rader 2-(Continued on Sheet No.10)

Date Enecthe: JutsI,19s7 Asterisk (*) indicates change laued by G. P. Rifakes, Vice President, Post Omco Bos 767, Chkago. Illinois 60690

AttachT.tr.t B

  • ~.

ELECritlCrlT For the Clelm and VHlages lised en ILL. C. C. 50. 4 Commonucelth Sheas Nos. 4. 5,6,7 and g nestsed sheet So. 24 Edlen Company and se wuncorporsied conoguous iemtory RATE 6. GENERAL SERVICE Appl 6cability.

Exupt as povided in Rate 6L, this rate is apphcable to any commercal. industrial. or govemmental customer si h a Maximwn Demand of less than 1.000 kilowatu who uses the Cormpany's electne service hereunder for all requiremenu Direcs current requiremenu povided under another rate immedsstely pner to September 2.1975, wGl. however, also be providad bestunder.

General Servlee - Time of Day.

Tirne of day charges shsU apply to (1) any customer with a Maaimum Dunand of 500 kilowntu. but less than 1.000 kilomatu, in three of the 12 months precedeg the bdhng month, one of mhich occun during the three months precedeg the bahng month, (2) successors to customers served under these charges immediately pnor to the date of succession whose enumated Maumwn Demands meet the demand requiremenu in clause (1) above, (3) eew custamen whose assimeted Maumum Demands meet the demand requirements in clause (1) above. and (4) any. customer previously NDed bertunder pursuant to clauses (1) or C), escep as otherwise povided below.

These charges shau not be applicable to customers or their successors with elearic space heating taking service under the Heatirig with Light provision of Mer 25 pnor so November the Ccmpany.

~

23. 1977 sacept upon wnnen application by the cusiomer to If a customer at one time was served pursuant to (1) above on General Service - Tune of Day and has a Maximum Demand which has nos exceeded 200 Womans in any mmth of the twelve month penad pecading the biding meth, such customer may elect, in wriuen appbcation to the Cornpany. to be served on General Servia. General Service - Tirne of Day shad not egne be a;pbcable urtti! such custerner quahties for such rate under the requiremenu of General Service - Tune of Day.

General Sers ke.

General service cha ges am' a;pfy to au caher customers quahfytng for acrvior under this rate.

Charges.

General $crs ke - Time of Day.

Monthly Customer Charge.

The Monthly Cusicrner Charge shau be $19.59.

  • Demand Charge.

Summer All Other Months Months

$15.06 311.77 per kilo au for au kilomans of Maumum Dumaad for the month.

For the hrposes hertof, the Summer Months shaU be the customer's fins monthly bahng period wish an endes meter read 6ng date on or after June 15 and the three succeedeg methly bGLng pnods.

  • Energy Charge.

6.560c'per Co auhour for aD 10omanhcairs supphed danns Peak Periods.

3.llis per Won nahcair for au kDomanhours suppbed dures OE.Psak Penodo The fuel adjusenet charge or creda prowded for m Mer 20 shan a; ply to au kilowanhours sughed in the amonth.

Cencral Sers ke.

  • Monibly Customer Charge.

The Methly Customer Charge shad be 59.3!.

  • Denand Charge.

i Summer All Other Months Month:

515.06 311.77 per kilosan for aD kilowans of Maumtsn Demand for the month.

For the purposes hereof, the Summer Momhs shaU be the customer's first monthly bdhng period with an endeg meter readeg dais -

...t Jme 15 and the three succeedeg monthly bJhng pnods.

  • In accorece with the Appbcation of Demand Charge povisions of this rate there shad be no demand charge as such for certain sman custerners, but in heu thereof. such cusicrners shad pay 6.409s pr kilowanhour in Summer Momhs and SVf7s pr Womauhour in a3 other rneths e addium to the energy chargea set fonh brJom.
  • Energy Charge.

IOleweathours Sepplied in the Month 5.130s per kQowanhour for the fusi 30.000 3.et7s per Hossahour for the nes:

470.000 3934s pr 10owsahour for an over..............................

$00.000 The fue) adjusenent c'Large or endit ponded for m her 20 shaU agly to all kilowauhours sughed in the meta (Conunued cm Sheet No. 25)

Date ENectise: July 1.1987 Asterisk (*) Indkates change Isued by G. P. Rifal6es. Vice Preldent.

Post Omce Bot 767. Chkato. Ininais 60690 s

ELECTRICTTY gL1. C C.No 4 Ter the Cirses and ma n ustad as M rem Sheet M H l

Common =eahh Ebevu Nos.4,5,6, and 8 (Cancetuas lla Resised 5bni w tu and the unmeerpented contiguous terniory Edison Company RATE 6. GENT.RAL SERVICE (Continued from Shet No 24)

The late payment charge provided for m the Terms and Cond;tions of this Schedule o Late Payanent Charge.

i under this tate Minimes Charge.

The minimum monthly charge shall be the monthfy customer charge For custemen with demand meten the aserage cost of elec

'Mulmaa gharge.

i h

auch guaranteed charge shall not oprate to reduce the Customer's bill to an amount less tha For General Service-Time of Day customers.the masimum descand in any month s Maximem Demand.

tabhshed dunts the peak p nods in such month-Tor General Service customen,the mas; mum dennand shall be the highest Mminu The Company shall provide a demand meter and the demand charge shall apply th Appbeatles of Demand Charge.

demand or monthly eteeeds 2.000 blematthours in each of too successive menthly bilheg penods or if 1.is manimumA blosatthout use is estim.ted as in escens of ten Llce atta or 2.000 h

h thereof pnate meter rentals, be provided eith a der: sod meter and bille d A customer sho is tbn 12 months unless he becomes entitled to a demand meter pner to the end of the 12 month p entitled to a demand meter sh!! not be required to pay rental or other separate charges for such m Whether or not a demand eneter is insta!!ed.the charge in Leu of demand charge sha!! spply h b has not eseceded 2000 tomer paymg natal for a demand meter in accordance with the foreg hly bilhng penods or and shall centinue to apply until the Customer's use neteds 2.000 blos anbours in two suceesan e m ha demarid eteeeds ten kilos atta in too successive monthly bilbag penods.

'Messanment of Demand ud Kileverthean Sepp 16ed.

d h ll When too or more metent.: installations are provided on the Cu l ti e demand meter, the that (a)in case the dennand at u) metenng matallation is registend by an todicating or cumu a v demand at such instanation in asch Eminute priod of an Where nected load if such coni eeted load is too kilowatta or less, and such demand is to be l

h s pphed shall be deter-then ars two or more oatthour meants insta!!stions on the Customer's peemmes,the ki oostt ours u ch mmed by addmg together the Lilos atthoun metend at each installatzen. provided that f the hours snstallation esceed 5.$00 in the b!hng month and are not metend in such a manner na to per dunes obeh they we* 4hvered.for purposes of applymg thj be considered to have,

the bilhng month, a chaage of 4 021e per bloestthour sha!! apply to Upon request the Company will provide unmeterw; eefvece for etenected loads f ih h

of the Customer's equipment is contaucus or is regularly schedaled on an annual ba

!t or other esses, the rnenthly kiloostthoun shat! be determined by multiplying the toted mattage (b appropriate data) of the ectnected loads by one twelfth of th*

(Continued on $but % 2e) i Date Efeett'e.0et*ber it, till lassed 6) C P Males.Vice President.

  • Fued eith the !!nsets Comment Commission se Ociaber ti, till Post O&ee Des Ili,CWeste.11hasis lette lassed pensaat to Order of !!Lasis CommeretComitussies estered October it,Italla Case Nos $44 Astersan ('s nadicates change N

Attsch. ant C a

ELECTRICITY For the Ottes and Vinste timed on ILL. C. C. %. 4 Commonu culth Sheets Nea. A 5. 4 7 and 8 Reilwd Sheet %. 2 A

(

Edison Company and the uninoo'Pomud conuguous iemtory RATE 6L. LARGE GENERAL SERVICE Applicability.

This rate is opphcable to (1) any arnmercial, eduitna!. or gowmmental cusiomer sith a Masirman Demand of 1.000 kilowsus or more in ihne of the 12 mones precedeg the billing month. G) auccessors to customers served under these charges immediately prior to the date of succession whose estunated Maximum Demands meet the demand requuements in clause (1) above. O) nem custwners whose estimated Maximum Demands meet the demand requirements in clause (1) above, and (4) any customer previously bided hereunder punuant to clauses (1) or (2), camp as oderwise pnmind balow.

If a customer at one time was served punuant to (1) above on Large General Service-Tene of Day and has a Maximum Demand thich has not cacaeded 200 kilomatts in any month of the 12 month penod preceding the ht!!mg snomh. such custerner may elect. in snuen appbeation to the Company, so be served on Rate 6. General Service. Rais 6L brae General Service. Tune of Day, shad not again be appbcable sui! such aistomer quaLfas for nadi rate ieder cisuse (1) above.

The brge Genera! Service-Heat with Usht charges shad be appLcable only to custamen or their successors with electric spa:e heating isking service under the Heating with Ught provisions of Rader 25 prior to November 23.1977.

A large General Service-Heat wiih Ught cusierrwr wiD be aDowed to take Large General Service-Time of Day service upon wriuen aphcation to the Company. Once changed io Large General Service-Tune of Day utvice. those customers or their successors mill not be aDomed to retum to brge Genera! Service-Heat with Ught Charges.

Large General Service-Time of Day.

  • Monthly Customer Charge.

The MenAly Customer Chage shall be 5547.06

  • Demand Charge.

Kilowatts of Summer All Other Maximum Demand Months Months for the Month 515.06 511.77 per Wowsu for the farsi 10.000 6J5 5.06 per Wou su for su over 10.000 For the purposu hereof, the Summer Months shad be the cusiorcer's first monthly baling pnW mith an ending meier reading date c, or afier June 15 and the three succeedeg manhly balmg pnada.

  • Energy Oarge.

IL560c per kilosauhour for aI! knownshours suppLed during Paak Penedt 3.1lis,per kilo sahaut for an kilowanhours suppbed dunna Off Peak Periods.

We fuel adjustment charge or credit provided for m Rider 20 shad syty to a!! kilomanhours suppLed in the month.

Large Cencral Serske-Heat with Ught

  • Monthly Customer Charge.

The Monthly Customer Charge shad be 5547.06.

  • Danand Charge.

Summer AII Other Months Months

$15.06 311.77 per kilowau for nD kilo aus of Maximum Demand for the month.

Fce the purposes hereof, the Sur.mer Menths shad be the customer's first snomhly b21ing pened with an endbg meter reades date on er after hne !$ and the three succeedeg memhly balang pnods.

  • Energy Qarge.

Dowatthours Supplied in the Month 5.130s pr k Do aahour for she first.................................

30.000 3 987s pr k Dowanhour for the next................................. 470.000 3.934s per Wom achour for a!! over................................. 500,000 The fuel adjusiment charge or credit provided for e Rider 20 shad agly to aD kilosauhours suppbce in the monih.

(Conunued on Sheet No. 29) l Date Effectl e: July 1.1937 Asterisk (*) indicates change Imuod by C. P. Alfaken, Vice President.

Post Orace Bos 767,Olcago,litinois 60690

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i ELECUtlCITY For the Cities and VIItages timed on ILL C. C. No. 4 Commonwealth Shesu Nos. 4 5,6,7 and 3 21st Revised Sheet No. 29 Edison Company and es udncsrpornud cedgoous urnto -

(Caactics 20e Revuid Shec No 29)

RATE 6L LARGE GENERAL SERVICE (Conunued from Shecs No. 23)

Late Paf ment Charge.

The lau pyment charge povided for an ibe Tenns ed Condai,:ns of this ScheA e of Katu shd be appLcab:e to all charges underedarie.

Mlatmum Charge.

The muurnum mcrti'.y charge chan be the mcrdJy cunemer charge.

Maximirro Charge.

The averige con of electneiry hereunder in any month, aclusive of the Monthly Cunamer Osarge, sha:1 not accM the sum d 19.786# and the fuel adjus: ment pr LDo.schour p rvided, bo ever, that auch guaruuad charge ahd act oprata to seduce the Chacreer's bal to an arneuniless than the minirnurn charge.

  • Muf:num Darnand.

F.acept as noud in the parignph below. the muimum demand in ey month sha:! be the highest 34 minute demand ertablished durteg se peak periods in such men h ocept that, for mstomers with 30-minuu demands accedes 1.500 kuo stu in three of the 12 cones prund.rg the bill.rg month, the rnuimum demand shaI! be the asenge of the eres IUghest 30-minute demands estabbshed dants the pak priods in such month, not snore than one such demand to be antemd fran any ces day.

For cunemers takirs service under large Geners! Service - Headng with I.ight provisim of this rise the muime dema.o shall be the h.ghen 34mmute 1emand estabLshed at any time durirg sud month ocep that, for custorners with 30 minuu demands exceedes 1.500 kDo uu in three of et 12 rnonths peceding the bCling month, the muimwn demand shall be the averige of the three highest demanda esubhshed daring the month, not mon ihan cme ruch dcmand to be sekeud from any cru day.

Mansurement of Dernand and KDowstthour Supphet Mere two cr mere sneunns ir.stcaucris an povided on the Customer's premises, the demand in any 30-minute priod shall be deurmined by odding together the sepante dernands at each macrmg insta11 anon during rud 30-minute period sacep abat (a) in case ce demand at any sneerirg irtsullauan is registered by an bdicadng or cumu!anve demand meter, the demand as such installadon in each 30-minute period c( any month shall be ananed to be the same as the highest demand e any 30.minuu prind ci such month, and (b) the demand at any inra:lauon may be assumed to be 75 percent d the conneaed load if such connecud bd is two kuo acs or less, and such dernand is to be added to a meured demand. Where thcrt am two or more osecur meuring instCations, the LDoma:thours rupplied shall be decimined by addeg togeeer the kilosanhours metered at each inrCaum, provided that *bert the LDowanhours at any mich innallance exceed 5 '00 in the isIling month and are not meured in sach a manner as to prmit deurminanon of the bours daring which they mere delivered, for prposes of apphes the i.me of day provisions of this riu, such Howatthouri shau be considered to hase tue.n dehvered in pai pricds. If the ene*gy use at such insta::stion is 5.500 kuomanhours or ks: in es bC:rg mm:.h. a charge ct 4 C21s per kuommecur shall apply to such kalomanhcori. The muirnum demands and huomarthours suppLed for two or more premisu win not be c:rnbeed for ta:Lr.: prposu hereunder.

Ups request, es Ccenpany wi!! provide unmacred servics for emnecud loads act eseceding two kDonats shcre opersticri of abe Cusicner's equipment is conunuous or is regular!y schedaled on an annual basis. For the purposes of bCleg e such esses, the moethly k.Do*atthours shau be deiermmed by muluplying the riad satuge (based spe earnepiats or oeer All arpecpriaie data) of ocrmeasd Icmds by one evelhh of the annual bours of opr Um and davides by 1,000.

Lile=sahcuri dehvered to an mmeured pcars c( any!y shall be ccrisidered to have bem dehvered during pak pnads wrvice Fadtices.

A sundard betataUon fumithed by the Ccrnpuy hereunder shd be determined by et provisions of the Ccenpany's Rader 6 cacep that the facuaties so provded as standard shan be edequate m!y to supply service to a bd equal to the musmum 30-msnute demand of ee Custczner estabLshed darmg et peak pnod If larger fac2aies are required to serve the excess of es off peak demand over the peak demand. the Custerner shaU pay, as opional faciL6es in accordance with the Ccepanis Rider 6. the cost of any feeibues so requirca However. no opuonal fac04ues charges ahd apply to faciLnes esines and b placs as se tame the Customer quahfics for service hermeder.

(Centeued m Sheet No. 30)

Date Enecthe: December 1.1986 Filed with the 111tnots Commerce Commision on Oac6er 17,19 6 larved b; C. P. Rafskea. Vice President.

Asterisk (*) indJcstas change Poet Omce Bon 767, Chicago !!Iinois 6000 k

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

l A.

From the aggregate amount of fixed fees paid i

^

pursuant to Paragraph 5 of the Memorandum of Understanding there shall be subtracted the aggregate amount of credits made pursuant to that Paragraph (net of the aggregate amount of I

Edison's share of the shared bevings).

l l

B.

The result of the calculation made under j

paragraph A shall be multiplied by 0.35.

C.

'The result of the calculation made under paragrap,h B shall be multiplied by a fraction, the numerator of which is the difference 1

in gigawatthours between the cumulative actual j

output of the Unit as of June 30, 1992, and 25,274 and the denominator of which is 25,274.

This calculation in paragraph C shall be made separately for Byron II and Braidwood I.

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

i e

i.

,i i

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

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Attachment E J

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

(A)

If Edison is purchasing power under a Contract with i

the subsidiary (" Pre-Existing Edison contract") and the subsidiary enters into a contract to sell power to a Third Party (" Third Party Contract") which is comparable to the Pre-Existing Edison l

Contract, but contains more favorable prices or payment terms, Edison may elect to have the price and payment terms of the Third Party Contract substituted for the prices and payment terms of the 1

Pre-Existing Edison Contract.

A Third Party Contract shall be considered to be " comparable" only ift I.,

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

II.

Any other difference between the terms and condi-

]

tions of the Third Party Contract (excluding price and payment i

{

terms) and those of the Pre-Existing Edison Contract does not j

significantly affect (i) the subsidiary's cost of providing ser-l vice, (ii) the quantity or type of service to be provided, (iii) the benefits obtained by the subsidiary, or (iv) the risks under-l taken by the subsidiary.

4 Edison shall have no right to substitute only the price l

gr payment terms of the Third Party Contract for those of the Pre-i i

i -.-,- - - -

ig Existing Edison Contract, it being understood snat Edison's elec-tion under this paragraph is limited to substitution of both the payment ADA Price terms of the Third Party Contract for those of the Pre-Existing Contract.

B.

If the Subsidiary enters into a Third Party Con-tract and Edison advises Subsidiary that it desires to purchase power under a comparable contract, the Subsidiary will offer power to Edison under a comparable contract, if such power is available from the Units.

For purposes of this paragraph, a contract will be considered ~to be comparable to tha Third Party Contract only if its terms and conditions are materially the same as those of such Third Party Contract excepting only such terms and conditions as do not significantly affect (i) the Subsidiary's cost of providing service, (ii) the quantity or type of service to be provided, (iii) ths. amounts, form and timing of payments, (iv) the benefits obtained by the Subsidiary or (v) the risks undertaken by the Subsidiary.

No such comparable con rac' shall relieve Edison of any of its obligations under any Pre uxisting Edison Contract.

Upon the execution of any Third Party Contract, the subsidiary will give Edison notice of same and furnish copy of i

same to Edison within 30 days of the execution of said Third Party 1

Contract.

b

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. J

..... -.... _... _ -. _ _ _.. -,, -. -- -. l

9 8

,s FACILITIES TRANSFER AGREEMENT Co==onwealth Edison Co=pany (" Edison") and

(" Subsidiary") hereby agree as follows:

1.

The conveyance of facilities which is the subject 3

of this Agreement takes place in implementation of a Memorandum of Understanding among co==onwealth Edison Company, the Governor of the State of Illinois, the Attorney General of the State of Illineis, the State's Attorney of Cook County, the Governor's Office of Consumer Services, the Small' Business Utility Advocate, j

and certain industrial custe=ers of Commonwealth Edison Co=pany

(

who are party interveners in a proceeding before the Illinois l

Commerce Cc =ission bearing the Decket No. 86-0249.

The Me:crandum of Understanding entered into by the above parties

]

centerplates the settle =ent of a variety of contested proceedings before the Illinois cc::erce Commission and the courts in which the continued construction of Braidwood Unit 2 is at issue as well t

as the rates which Edisen will charge.

The agreement cente= plates the conveyance of the facilities cc =enly known as Byron Unit 2 and Braidwood Units 1 and 2 (collectively, the " Units") to Subsidiary.

Subsidiary's rates will be regulated by the Federal l

Inergy Regulatory Co==ission.

A rate increase of approximately 13% in Edison's retail base rates with a five-year moratorium en J,

rate increases thereafter is also provided for.

Accordingly, l

Idison will convey the Units to subsidiary.

The real estate and i

facilities constituting the Units are more particularly described i

l Exhibit B

in Appendix 1.

The conveyance shall be effective as of July 1, 1987, or such later date as may be specified by Edison.

In the case of Byron Unit 2 such conveyance shall include an easement for I the continued operation and maintenance of that Unit on the Byron Station Site described in Appendix 1.

2.

The conveyance will be evidenced by suitable quitclaim deeds and such bills of sale and other documents as Subsidiary may reasonably require.

Where appropriate, such documents shall reflect the fact that the Units are and will remain subject to the lien of the mortgage securing Edison's first mortgage bonds.

Such conveyance shall be subject to a reservation to Edison of such rights as may be necessary or appropriate, to enable Edison, as an NRC licensee, to comply with all NRC requirements, including the authority to exclude persons from the premises conveyed to subsidiary so as to meet NRC becurity, emergency planning and radiation protection requirements as described in Section 2.1 of the Safety Evaluation Report issued by the Nuclear Regulatory Commission ("NRC") for Byron dated February, 1982, and the Safety Evaluation Report for Braidwood dated December, 1983.

Such conveyance shall also be subject to a reservation to Edison of such rights as may be necessary or appropriate to enable Edison to contirva to operate and maintain y

facilities on the Braidwood Station Site described in Appendix 1, which will not be conveyed to subsidiary.

3.

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

I' or transfer its NRC licenses to Subsidiary to the extent such l

amendment or transfer is necessary to give Subsidiary title to the 1

Units, the right to complete construction thereof or the right to i

operate the Units through Edison as its agent and sell electric

{

power generated by the Units.

Edison will provide the NRC with 1

such assurances and guarantees as it may require in connection i

with the conveyance of the Units to Subsidiary.

Edison recognizes j

that the NRC may require that Edison be a primary obligor with f

{

respect to certain of Subsidiary's obligations and liabilities arising out of construction, ownership or operation of the Units.

i j

Edison will transfer any other licenses or permits relating to the Units, where necessary to enable subsidiary to complete j

construction of the Units, operate them or sell power therefrom.

4.

M valorem property taxes applicable to either the Byron Station Site and the facilities thereon or the Braidwood l

Station Site and the facilities thereon shall be allocated between the parties so that each bears an amount thereof in proportion to 4

its investment in the station in question.

Subsidiary shall also i

be liable for 50% of such taxes allocable to Byron Station common plant.

M valorem property taxes for 1987 shall be prorated to the date of the conveyance.

5.

This Agreement shall become effective when Edison l

notifies subsidiary that all governmental approvals and actions required by the terms of the Memorandum of Understanding.between Edison and various other parties, dated February 3, 1987, have been obtained or waived by Edison.

Nothing contained herein shall 1

j be construed as permitting Edison to waive approval by the i

i i

{.-

i Illinois Core.erce Commission of this Agreement or any other agree-i ment between Subsidiary and Edison, 6.

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

Executed this day of 1987.

COMMONWEALTH EDISON COMPANY a

By:

Its:

[ SUBSIDIARY) sy:

Its:

l' i

i e

t

/

?,

/

i

APPENDIX I o

Facilities Transfer Agreement 1.

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

Parcel 1 Warranty Deed (WD) #424625, Recorded 4-23-73, BK277, PG66 Trustee's Deed (TR's D) #454533, Recorded 12-30-76, BK287, PG93 Quitclaim Deed (QCD) #427835, Recorded 8-30-73, BK278, PG362 Parcel 2 WD #422068, Recorded 1-10-73, BK276, PG34 Parcel 3 WD #425182, Recorded 5-11-73, BK277, PG319 Parcel 4 WD #428267, Recorded 9-20-73, BK278, PG548 Parcel 5 WD #423820, Recorded 3-20-73, BK276, PG873 Parcels 6 and 20 WD #424166, Recorded 4-2-73, BK276, PG1040 WD #423085, Recorded 2-22-73, BK276, PG489 Parcel 7 WD #425238, Recorded 5-14-73, BK277, PG359 Parcel 8 WD #426363, Recorded 6-28-73, BK277, PG870 Parcel 9 Conservator's Deed #422066, Recorded 1-10-73, BK276, PG32 Parcel 10 WD #426441, Recorded 7-2-73, BK277, PG901 l

l

Parcel 11 1

TR's D #425183, Recorded 5-11-73, BK277, PG320 Parcel 13 t

WD #425179, Recorded 5-11-73, BK277, PG316 l

Parcel 14 WD #422159, Recorded 1-15-73, BK276, PG73 Parcel 15 WD #422158, Recorded 1-15-73, BK276, PG72 Parcel 19 WD #426182, Recorded 6-21-73, BK277, PG774 QCD #426183, Recorded 6-21-73, BK277, PG776 Parcel 21 TR's D #431590, Recorded 3-15-74, BK279, PG785 Parcel 22 WD #423572, Recorded 3-12-73, BK276, PG750 Parcel 23 WD #426439, Recorded 7-2-73, BK277, PG900 Parcel 24 r

QCD #430565, Recorded 1-24-74, BK279, PG284 Parcel 25 WD in TR #423087, Recorded 2-22-73, BK276, PG493 Parcel 26 WD in TR #423086, Recorded 2-22-73, BK276, PG491 Parcel 27 WD in TR #424181, Recorded 4-3-73, BK276, PG1048 Parcel 28 TR'c D #459784, Recorded 7-6-77, BK288, PG650 Parcel 29 WD #462001, Recorded 9-21-77, BK289, PG198 Parcel 30

(

WD #469580, Recorded 6-21-78, BK291, PG72 Parcel 31 TR's D #439779, Recorded 4-17-75, BK282, PG669 Parcel 32 WD #433435, Recorded 5-31-74, BK280, PG444 Parcel 32'l WD #454954, Recorded 1-13-77, BK287, PG255 Parcel 33 TR's D #453474, Recorded 11-18-76, BK286, PG900 Parcel 1RR (Railroad)

WD #437173, Recorded 11-22-74, BK281, PG924 Parcel 2RR WD #438600, Recorded 2-14-75, BK282, PG256 Parcel 3RR WD #434263, Recorded 7-3-74, BK280, PG833 Parcels 4RR, 4RRA, and 4RRB WD in TR #431897, Recorded 4-1-74, BK279, PG909 WD in TR #431899, Recorded 4-1-74, BK279, PG913 TR's D #443723, Recorded 10-21-75, BK283, PG938 Parcel 5RR WD #436961, Recorded 11-12-74, BK281, PG862 Parcel 6RR WD #433434, Recorded 5-31-74, BK280, PG442 Parcel 7RR WD #437753, Recorded 12-31-74, BK281, PG1149 QCD #437754, Recorded 12-31-74, BK281, PG1151 -

I Parcels BRR, BRRA, and 8RRB WD #436594, Recorded 10-24-74, BK281, PG711 QCD #436595, Recorded 10-24-74, BK281, PG713 WD in TR #436596, Recorded 10-24-74, BK281, PG715 Parcels 9RR and 9RRA WD #438239, Recorded 1-23-75, BK282, PG145 QCD #438240, Recorded 1-23-75, BK282, PG147 WD in TR #438238, Recorded 1-23-75, BK282, PG143 Parcels 10RR, 10RRA, and 10RRB TR's D #436593, Recorded 10-24-74, BK281, PG709 WD in TR #431560, Recorded 3-14-74, BK279, PG771 Parcel 11RR WD #436592, Recorded 10-24-74, BK281, PG708 Parcel 12RR QCD #502362, Recorded 7-1-82, BK299, PG111-115 2.

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

Parcel 1 Special WD #R73-33682, Recorded 11-7-73, Will County Parcel 2 and Parcel 1 Corridor Special WD #R75-04282, Recorded 2-21-75, Will County QCD #R75-07989, Recorded 4-9-75, Will County Parcel 3 g.:- r ;WD_fR73-00389, Recorded 1-4-73, Will County Parcel 4 QCD #R73-00320, Recorded 1-4-73, Will County QCD #R73-00321, Recorded 1-4-73, Will County QCD #R73-00322, Recorded 1-4-73, Will County QCD #R73-00323, Recorded 1-4-73, Will County WD #R76-06641, Recorded 3-11-76, Will County

Parcel 5 Court Order #R75-26232, Recorded 9-30-75, Will County QCD #R76-12112, Recorded 4-28-76, Will County Parcels 6 and 7 WD #R73-32465, Recorded 10-25-73, Will County WD #R73-32466, Recorded 10-25-73, Will County WD #R73-32467, Recorded 10-25-73, Will County Parcel 7-1 WD #R77-29452, Recorded 8-12-77, Will County Parcel 8 WD #R74-28701, Recorded 11-18-74, Will County Parcel 9 TR's D #R76-11403, Recorded 4-22-76, Will County Parcel 10 TR's D #R74-lO641, Recorded 5-9-74, Will County Parcel 11 TR's D #R74-02647, Recorded 2-1-74, Will County Parcel 12 special WD #R74-10086, Recorded 5-3-74, Will County Parcel 13 QCD #R73-09343, Recorded 4-4-73, Will County Parcel 14 special WD #R73-12394, Recorded 5-2-73, Will County Parcels 15, 16 and 38 Special WD #73-11350, Recorded 11-8-73, Kankakee County Parcel 17 Special WD #R74-10087, Recorded 5-3-74, Will County Parcel 18 WD #R72-33692, Recorded 11-16-72, Will County -

\\

Parcel 19 WD #R73-12393, Recorded 5-2-73, Will County Parcel 20 WD #R73-28751, Recorded 9-20-73, Will County Parcel 21 TR's D #R75-000787, Recorded 1-10-75, Will County Parcel 22 WD #R75-13721, Recorded 6-6-75, Will County Parcel 23 WD #238349, Recorded 4-17-75, BK;/*

P7787, Grundy County Parcel 24 WD #239424, Recorded 6-26-75, BK329, PG260, Grundy County Parcel 25 WD #247760, Recorded 1-27-77, BK342, PG610, Grundy County

)

J Parcel 25-1 Railroad Spur Title in Trust 45553, CT&T Co.

Parcel 25-2 QCD #250782, Recorded 8-1-77, BK350, PG455, Grundy County Parcel 26 Title in Trust 45553, CT&T Co.

Parcel 27 I

UD #73-4771, Recorded 5-25-73, Kankakee County QCD #73-4774, Recorded 5-25-73, Kankakee County QCD #73-4775, Recorded 5-25-73, Kankakee County QCD #73-4776, Recorded 5-25-73, Kankakee County QCD #73-4777, Recorded 5-25-73, Kankakee County QCD #73-4778, Recorded 5-25-73, Kankakee County WD #73-4779, Recorded 5-25-73, Kankakee County WD #73-4780, Recorded 5-25-73, Kankakee County WD #73-4781, Recorded 5-25-73, Kankakee County QCD #73-4782, Recorded 5-25-73, Kankakee County _ _.

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

Parcel 4 Corridor WD #R73-36061, Recorded 12-6-73, Will County Parcel 5 Corridor WD #R74-01538, Recorded 1-18-74, Will County 1

1 Parcel 6 Corridor Easement - See Braidwood - Wilton Center R/W, Parcel 6 1

Parcel 7 Corridor WD #R73-26439, Recorded 8-29-73, Will County QCD #R73-26440, Recorded 8-29-73, Will County Parcel 8 Corridor i

WD #R74-02644, Recorded 2-1-74, Will County Parcel 9 Corridor WD #R74-21461, Recorded 8-29-74, Will County Parcel 10 Corridor WD #R75-07305, Recorded 4-1-75, Will County Parcel 11 Corridor TR's D #R75-07303, Recorded 4-1-75, Will County Parcel 12 Corridor TR's D #R82-06274, Recorded 3-29-82, Will County 3.

Edison will grant Subsidiary an easement in the Byron Station Site for the purpose of (i) operating and maintaining the Byrc unit 2 generating facility, including any

{

needed replacements, modifications, additions, retrofits or similar improvements to the equipment and structures constituting Byron Unit 2, and (ii) making such use of the Byron Station Site as is appropriate in connection with the retirement and decommissioning of such equipment and structures.

4.

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

Reactor Containment i

b.

Reactor Vessel c.

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

d.

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

Main and Misc. Instrument and Control Panels f.

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

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

Turbine (including foundation) 1.

Generator (including foundation) j.

Condenser k.

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

Natural Draft Cooling Tower Such facilities and structures also include any other facility or structure at the Byron Station Site which -(i) was designed, constructed or installed primarily for use in connection with the operation of Byron Unit 2, and (ii) in the case of any such facility through which electricity generated by Byron Unit 2 flows (together with the structures which support such facility), is located in the system at or prior to the points designated A on the attached diagram.

i l

5.

Edison will convey the,Braidwood Station Site to Subsidiary subject to the reservations contained in paragraph 2 of the Facilities Transfer Agreement between Edison and Subsidiary together with all equipment, structures, inventories, materials l

1 '

and supplies located or stored thereon except the transmission facilities.

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

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i DIAGRAM I

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t POWER SUPPLY AGREEMENT BETWEEN

[3UBSIDIARY)

AND COMMONWEALTH EDISON COMPANY This Power Supply Agreement (" Agreement"), made and entered into this day of 1987, by and between

[ Subsidiary], ("[ Subsidiary]"), and COMMONWEALTH EDISON COMPANY,

(" Edison"),

WITNESSETH:

WHEREAS, (Subsidiary) shall own certain electric generating units commonly known as Byron Unit 2, Braidwood Unit 1 and Braidwood Unit 2 (the " Units") ; and WHEREAS, Edison is a public utility engaged in, among other businesses, the generation, purchase, transmission, distri-bution and sale of electric power and energy at wholesale and retail; and WHEREAS, [ Subsidiary] has agreed to sell to Edison power and energy available to [ Subsidiary] from the Units, and Edison has agreed to join with [ Subsidiary] in executing an agreement that will set forth in detail the terms and conditions for the sale of such power and energy by [ Subsidiary] to Edison; and WHEREAS, Byron Unit 2 and Braidwood Unit 1 are expected to be placed in service on or before July 1, 1987; Exhibit C

t t

NOW, THEREFORE, (Subsidiary) and Edison, in consider-ation of the premises and the mutual agreements contained herein, which each of the parties hereto acknowledges to be sufficient consideration, agree as follows:

ARTICLE I TERM OF AGREEMENT 1.1 EFFECTIVE DATE.

The Effective Date of this Agreement shall be July 1, 1987.

1.2 TERM.

This Agreement will have an Initial Term beginning on the Effective Date hereof continuing through and including June 30, 1992.

The Initial Term of this Agreement is subject to extension pursuant to.the provisions of Section 5.4 of this Agreement.

The parties recognize that the date for exercise of the option relative to Braidwood 2 capacity l

provided in subparagraph (ii) of Section 5.3 hereof falls outside such Initial Term, but nevertheless survives.

l ARTICLE II UNIT CAPACITY SALE AND RESERVE RESPONSIBILITY 2.1 UNIT CAPACITY SALE.

During the Initial Term of this i

Agreement (and any extension of such Initial Term pursuant to Section 5.4 of this Agreement), (subsidiary] shall make available to Edison all the power and energy available from j

4 each of the Units from time to time and at any time for Edison's own use or resale.to others.

1.

,, - ~ - - -

N i

2.2 RESERVE RESPONSIBILITY.

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

ARTICLE III POINTS OF DELIVERY 3.1 POINTS OF DELIVERY.

Edison shall receive and take title to power and energy produced at each Unit at the point of interconnection between the Unit and Edison's facilities.

ARTICLE IV CHARGES FOR SERVICE 4.1 RESERVATION CHARGE.

During the Initial Term of this Agreement (and any extension of such Initial Term pursuant to Section 5.4 of this Agreement), Edison shall pay (Subsidiary]

a base monthly reservation charge of $55,000,000 beginning with the bill for July, 1987.

Such base monthly reservation charge shall be subject to increase as provided in Section 5.4 of this Agreement.

4.2 ENERGY CHARGES.

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

If, in any of the periods listed on the table set forth below, (Subsidiary]

produces energy from the Units in excess of I

..,,,--n

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

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

1/2 (S - C) + C, where:

S=

the savings deemed to result from the production of Bonus Energy; and C=

amounts previously credited by Edison to retail ratepayers pursuant to the " Output Guarantee" provisions of Paragraph 5 of the Memorandum of Understanding dated February 3, 1987, between Edison and certain other parties (the " Memorandum of Understanding"), and not previously considered in determining compensa-tion for Bonus Energy or S, which-ever shall be less.

In determining whether (Subsidirry] has become entitled to compensation for Bonus Energy, all energy output for any period listed on the table set forth below up to the target level for such period shall be considered normal output and only when [ Subsidiary] has produced energy from the Units in such period in excess of 110% of the target level for such period shall (Subsidiary]

become eligible for Bonus Energy compensation.

TARGET LEVELS Period Cumulative Period Gicavatthours Gicavatthours

(

July-Dec 1987 6,000 6,000 1988 11,000 17,000 1989 13,200 30,200 1990 16,100 46,300 1991 18,000 64,300 Jan-June 1992 7,550 71,850 The savings deemed to be realized by Edison from the production of Bonus Energy shal.1. be the difference between the fuel cost incurred by (Subsidiary) in producing Bonus i

Energy and the cost Edison would have incurred in replacing such Bonus Energy.

Edison, in conformity to the Memorandum of Understanding, shall determine the value of such replhee-ment power.

The additional Bonus Energy compensation to which [ Subsidiary) may be entitled shall be determined no later than 30 days following the end of the period to which such Bonus Energy compensation relates.

Any such Bonus i

Energy compensation shall be billed to Edison in equal monthly installments over the 12 months succeeding the month in which such determination is made.

4.3. FIRM RATES.

The rates for service specified herein, as they may be increased as expressly provided for in Section 5.4, shell remain in effect C. ring the Initial Term of this Agreement and any extension thereof pursuant to Section 5.4, and shall not be subject to change through application to the Federal Energy Regulatory Commission ("FERC") pursuant to the provisions of Section 205 of the Federal Power Act absent the - -. -

agreement of the parties hereto.

Similarly, the pricing mechanisms specified in Article V shall not be subject to change through application to the FERC pursuant to such provisions of the Federal Power Act.

ARTICLE V OPTIONS 5.1 EXERCISE OF OPTIONS.

Edison shall have the options specified in Sections 5.2, 5.3 and 5.4 below to purchase power and energy from (Subsidiary) after the Initial Term of this Agreement.

Except as otherwise provided in Section 5.4 below, each such option is exclusive of the others, and the option selected by Edison must be exercised by Edison no later than the close of business, Monday, July 1, 1991.

5.2 MOST EAVORED NATION STATUS (Option a).

During the period June 30, 1992, through June 30, 2012, Edison may purchase power and energy from (subsidiary) produced from the Units, when and as available from the Units and subject to prior sale to others, at any time and from time to time at prices subject to the jurisdiction of the FERC but subject to Edison's rights described in Appendix A to this Agreement.

Nothing contained in this Section 5.2 shall be deemed to

  • yt- ;;_ y rive the ICC of any authority M may have to approve d

contracts for the purchase of such power and energy or to review the prudence of such purchases.

If the FERC is without or disclaims jurisdiction with respect to the rates l

at which such sales are to be made by (Subsidiary) to Edison, I.

1 the rates agreed upon by the parties shall be submitted to.

the ICC for review under Section 7-101 of the Illinois Public j

Utilities Act and the rates agreed upon by the parties, as they may be modified by the ICC upon review, shall be the 1

basis upon which Edison shall compensate (Subsidiary).

5.3 NEW AGREEMENT (Option b).

(i) Edison shall have the option to contract with (Subsidiary) to purchase not less than the entire output of Byron Unit 2 for the remainder of its useful life and, if it does so, to also purchase such amount of l

power (in blocks of 100 megawatts) from Braidwood Unit 1 over the remainder of its useful life as Edison shall designate at the time of exercise of this option.

If Edison elects to purchase any amounts of power from Draidwood Unit 1 pursuant to this section 5.3, Edison shall have the further option to reduce the amounts of power (in blocks of 100 megawatts)-that Edison is obligated to purchase from Braidwood Unit 1, any such reduction to be effective on July 1, 1997 or, if Edison j

has previously exercised the option provided for An Section 5.4 of this Agreement, effective on July 1, 2000, in either case by giving notice of such reduction 12 months prior to such effective date.

Edison shall purchase such power, and the energy associated therewith, at rater 'ctermined using traditional net original cost rate base / rate of return regulation and accounting for fuel and all other costs of production, all as determined by the FERC from time to time.

If the FERC is without or disclaims jurisdiction with respect

..,,-,__,_,,_m-

,,m.

7

N to such rates, or declines to make such a net original cost rate base / rate of return determination, such determination as made by Edison and (Subsidiary] shall be submitted to the ICC for review under Section 7-101 of the Public Utilities Act, and the determination of the parties, as it may be modified by the ICC upon such review, shall be the basis upon which Edison shall pay (Subsidiary).

In the event that Edison exercises its option to reduce its purchases from Braidwood Unit 1, the amount payable to (Subsidiary) shall be reduced to reflect such reduction effective as of the date of such reduction.

(ii) If Edison has elected to purchase the output of Byron Unit 2 and at least a part of the output of Braidwood Unit 1 under this Section and has not elected to reduce the amount of power produced by Braidwood Unit 1 to be purchased under this Section, Edison shall have the further option to elect 4

on December 1, 1998, to purchase not less than the entire output of Braidwood Unit 2 during the period January'1, 2000 through the remainder of the useful life of Braidwood Unit 2.

In the event Edison exercises the option to purchase the output of Braidwood Unit 2, it shall not thereafter have any i

option under this Agreement to reduce the amount c* power Edison is obligated to purchase from Braidwood Unit 1.

For power, and associated energy, produced from Braidwood Unit 2 Edison shall pay (Subsidiary]

the greater of (1) the market 1

l value of such power and energy as determined by reference to i _ _

third-party, arms length, long-tern firm power purchase contracts comm'ncing approximately January, 2000, or (2) e rates determined using traditional net originr1 rate base / rate of return regulation and accounting for fuel and all other costs of production, all as determined by the FERC.

If the FERC is without or disclaims jurisdiction with respect to such rates, or declines to make such a determination of market value or net original cost rate base / rate of return rates, such determinations as made by Edison and (Subsidiary]

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

except as otherwise provided in this Section.

5.4 EXTZNSION OPTION (Option c).

Edison shall have the option to defer until the close of business on Frit.y, July 1,

1994, the time by which it must exercise the option provided in Section 5.2 above or the option provided for in Section 5.3 above.

If Edison exercises the option provided for in this Section 5.4, the Initial Term of this Agreement shcIl be i

extended, and the entire output of the Units shall continue to be available to Edison, to and including June 30, 1995, l

and the monthly payment required to be made by Edison under Section 4.1 of this Agreement shall be increased by an amount equal to 1/12 of the annual retail rate increase to which Edison shall be entitled as a consequence of its election, at,

the direction of the ICC, to exercise the option provided by this Section 5.4.

The bonus provision of Section 4.2 shall not apply during the period of such extension.

Particularly, but not in limitation of the foregoing, the cenacity of Braidwood 2 shall remain subject to the opti, pecified in Section 5.3 (ii) above (being part of Option b as set out in

" Options After 5 Years" in Paragraph 5 of the Memorandum of Underatanding dated February 3, 1985).

5.5 DEFAULT OPTION.

[ Subsidiary] recognizes that Edison has agreed with others to be directed by the ICC in its exercise of the options provided in Sections 5.2, 5.3 and 5.4 above.

l In the event that Edison has filed with the ICC a request for such direction no later than 12 months prior to the applicable option exercise date, and the ICC has failed to direct Edison with regard to any such exercise, Edison shall be deemed to have elected to contract to purchase the entire I

output of Byron Unit 2 for the remainder of its useful life and 50% of the entire output of Braidwood Unit 1 for the I

remainder of its useful life beginning on the date 12 months following the applicable exercise date.

In the event this Section 5.5 becomes operative, Edison shall have no further options under this Article V and the rates-for power for which Edison has so contracted shall be determined as i

1 provided in Section 5.3 with respect to the output of Byron Unit 2 and Braidwood Unit 1.

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ARTICLE VI BILLING 6.1 STATEMENTS.

As soon as practicable after the end of each I

calendar month, the Parties shall cause to be prepared a statement setting forth the energy delivered by (Subsidiary) to Edison from each Unit and the cost of fuel incurred by [ Subsidiary) in producing such energy during such month.

If necessary, the cost of fuel may be determined on an estimated basis and adjusted retroactively once the actual cost of fuel incurred in such month is known.

Generally accepted practices and methods of accounting and billing for energy transactions between interconnected systems shall be followed in preparing such statements.

6.2 BILLS.

As soon as practicable after preparation of the monthly statement provided for in Section 6.1 above, f

(Subsidiary) shall render to Edison a bill for the aucunts due (Subsidiary) by Edison for energy purchased in the month covere.d by such statement, the capacity reservation charge for such month and any Bonus Energy compensation due (Subsidiary) pursuant to'Section 4.2 of this Agreement.

Edison shall pay [ Subsidiary) the amount due within 15 days of the date of the bill.

Unless otherwise agreed upon, a calendar month shall be the standard renthly period for the purposes of settlement under this Agreement.

! l

ARTICLE VII METERS AND METERING 7.1 METERS.

Electric power and energy interchanges at each point of delivery shall be measured by suitable metering equipment provided by Subsidiary.

7.2 TESTING.

Such metering equipment shall be tested by Edison at suitable intervals as specified by the parties from-time to time,.such intervals not to exceed 12 months.

The accuracy of registration shall be maintained in accordance 1

with sound operating practice.

7.3 BILLING CORRECTICNS.

If, as a result of any test, any meter shall be found to be registering more than two percentage points above or below one hundred percent accuracy, the account between the parties hereto shall be corrected, for a period equal to one-half of the elapsed time since the last prior test, according to the percentage of inaccuracy so found, except that if the meter shall have become defective or inaccurate at a reasonably ascertainable time since the last prior test of such meter, the correction shall extend back to such time.

Should metering equipment at any time fail to register, the energy delivered shall be determined C.'if';Cfrom the best available data.

ARTICLE VIII CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT, AMENDMENTS AND SPECIAL TERMINATION RIGHT 8.1 CONDITIONS PRECEDENT.

The effectiveness of this Agreement is conditioned upon the approval or acceptance for filing of.


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

8.2 FERC ACCEPTANCE FOR FILING.

[ Subsidiary] and Edison mutually recognize and agree that this Agreement will be filed with the Federal Energy Regulatory Commission and [ Subsidiary] and Edison agree jointly to request acceptance for filing of this Agreement without suspension by the FERC.

In this connec-1 tion, Edison and [ Subsidiary) agree that each of them will execute any and all documents, duly authorize all officers or agencies, and do all of the things necessary and appropriate to secure acceptance for filing of this Agreement by the FERC without suspension, or change or modification of the terms hereof, no later than July 1, 1987.

B.3 AMENDMENT 3.

This Agreement may be amended only upon mutual agreement of the parties.

Any such amendment shall be in writing and will be effective as of the date set forth in the order of any regulatory authority, or other governmental agency having jurisdiction, approving or accepting for filing such amendment or any portion thereof that is required to be approved or accepted.

8.4 SPECIAL TERMINATION RIGHT.

If, for any reason, Edison is not permitted to place in effect or maintain the rates provided for in the Memorandum of Understanding, Edison shall have the i

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

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ARTICLE IX MISCELLANEOUS 9.1 GOVERNING LAW.

The validity, interpretation and performance I

of this Agreement and each of its provisions shall be gov-erned by the laws of the State of Illinois, except to the extent that this Agreement shall be subject to federal law.

9.2 COUNTERPARTS.

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

9.3 NOTICES.

Any notice, demand or request made by a party to the other party pursuant to any provision of this Agreement shall be made in writing and shall be delivered either in person, by prepaid telegram or by registered or certified mail to the officer at the address listed below, provided i

that each party may from time to time change the designated recipient or the address or both, to be used for the giving to it of any such notice, demand or request, by giving written notice of such change to the other party.

TO [ Subsidiary):

TO Edison:

i 9.4 SICTION HEADINGS NOT.TO AFFECT MEANING.

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

- - - - - - ~ - - - - - - - ~I

9.5 FURTHER ASSURANCES.

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

9.6 WAIVERS.

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

9.7 COMPUTATION OF TIME.

In computing any period of time prescribed or allowed by this Agreement, the day of the act, event, or defa. ult from which the designated period of time begins to run shall not be included.

The last day of the period so computed shall be included, unless it is a Saturday, Sunday, or legal holiday, in which event the period shall run until the and of the next business day which is not a Saturday, Sunday, or legal holiday.

9.8 SURVIVORSHIP OF OBLIGATIONS.

The termination of this Agreement shall not discharge any party from any obligation it owes to the other party under this Agreement by reason of l

any transaction, loss, cost, damage, expense or liability which shall have occurred or arisen after the effective date 1

of th' Tgreement, but prior to such termination.

It is the intent of the parties that any such obligation owed (whether the same shall be known or unknown as of the termination of this Agreement) will survive the termination of this Agreement.

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

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

ATTEST:

COMMONWEALTH EDISON COMPANY By Secretary (Title)

ATTEST:

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I Accendix A i

"Most Favored Nations" l

During the 20-year period June 30, 1992 through June 30, 2012_ Edison under Section 5.2 of this Agreement shall have the I

rights set forth in paragraphs (A) and (B) below.

i (A)

If Edison is purchasing power under a Contract with the Subsidiary (" Pre-Existing Edison Contract") and the Subsidiary enters into a contract to sell power to a Third Party (" Third Party Contract") which is comparable to the Pre-Existing Edison contract, but contains more favorable prices or payment terms, Edison may elect to have the price and payment terms of the Third Party Contract substituted for the prices a~nd paynent terms of the Pre-Existing Edison Contract.

A Third Party Contyact shall be considered to be " comparable" only if:

I.

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

II.

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

Edison shall have no right to substitute only the price er payment terms of the Third Party Contract for those cf the Pre-1 1

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'o Existing Edison Contract, it being understood that Edison's elec--

i tion under this paragraph is limited to substitution of both the payment and price terms of the Third Party Contract for those of the Pre-Existing Contract.

B.

If the Subsidiary enters into a Third Party Con-tract and Edison advises Subsidiary that it desires to purchase power under a comparable contract, the Subsidiary will offer power to Edison.under a comparable contract, if such power is available from the Units.

For purposes of this paragraph, a contract will be considered to be comparable to the Third Party Contract only if its terms and conditions are materially the same as those of such Third Party Contract excepting only such terms and conditions as-do not significantly affect (i) the subsidiary's cost of providing service, (ii) the quantity or type of service to be provided, (iii) the amounts, form and timing of payments, (iv) the benefits obtained by the subsidiary or (v) the risks undertaken by the Subsidiary.

No such comparable contract shall relieve Edison of any of its obligations under any Pre-Existing Edison Contract.

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

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

(" Subsidiary") and Commonwealth Edison Company (" Edison").

Subsidiary and Edison agree as fol-lows:

1.

Recitals.

In accordance with an agreement entitled Memorandum of Understanding. dated February 3,

1987, among Edison, the Governor of the State of Illinois, the Attorney General of the State of Illinois, the State's Attorney of Cook County and other parties (the " Memorandum"), Edison has agreed to transfer its nuclear generating facilities known as Byron Unit 2 and Braidwood Units 1 and 2 (the " Units")

to subsidiary.

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

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

2.

Completion of Construction.

Edison agrees to complete the construction of the Units as soon as is commercially

.c ?,n feasibie' in accordance with the Const ruction Permits issued by

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the United States Nuclear Regulatory Commission ("NRC").

In this regard, Edison shall, and subsidiary irrevocably authorizes Exhibit D l

Edison to, make such contracts, agreements and modifications to existing contracts and take such other actions as Edison, in its sole discretion, considers necessary or appropriate to complete the construction of the Units and their preparation for commercial service.

Subsidiary will cooperate with Edison in connection with its duties under this paragraph, including, without limitation, applications for authorizations, permits or licenses and the execution of such other documents as may be i

reasonably required.

3.

Constri2ction Pavnents.

Edison shall be respons-1 ible for making arrangements for the payment of all costs and obligations incurred in connection with the construction of the Units.

The costs incurred by Edison in connection with such construction up to the in-service date of the Units shall be i'

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

Edison shall also be responsible for making arrange-ments for payment of all costs and obligations incurred after the in-service date, in connection with the construction of any i

needed replacements, modifications, additions, retrofits or similar improvements with respect to the Units.

Edison shall bill Subsidiary for these costs.

To the extent practicable, the billings shall be at such times as shall be appropriate to put the amounts billed in Edison's hands at the times disbursements are made.

To the extent such billing is not practicable, Edison _

4.

shall have the right to bill Subsidiary for capital costs.

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

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

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

Subsidiary may require Edison to provide Subsidiary with a statement showing in reasonable detail the basis for the computation of any bill, at or about the-time the bill is rendered to Subsidiary.

The existence of a dispute between Edison and Subsidiary with respect to the proper amount of any bill shall not relieve Subsidiary of its obligation to pay the bill when due.

All bills shall be subject to audit and later 4

correction if in error.

4.

Operation and Maintenance.

Edison shall operate and maintain the Units in accordance with the terms of the applicable NRC Operating Licenses, taking all steps which it considers necessary or appropriate for that purpose, including, but not limited to, (a) manning the Units with its own employees, (b) making and modifying contracts with third parties, (c)

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securing and keeping in effect all necessary licenses and other governmental authorizations, (d) preparing and maintaining reports and records required by governmental authority or necessary or appropriate to properly account for the costs and expenses of operation and maintenance of the Units, (e) providing purchasing, engineering and other support services associated with the operation of the Units, (f) procuring and maintaining such liability and property insurance as may be required by law or may be otherwise considered to be desirable by Edison and (g) providing off-site electrical power to the Units as described in Section 8.2 of the Safety Evaluation Reports for Byron Station dated February, 1982, and the Braidwood Station dated December, 1983, as amended from time to time.

During the Priority Period applicable to a Unit, Edison will treat such Unit on the same basis as its own units, allocating personnel and other resources, dispatching and establishing priorities for activities and resources among the Unit and Edison's own units as though Edison owned the Unit.

The " Priority Period" applicable to a Unit is the Rate Moratorium Period (as defined in the Memorandum) and any subsequent period during which Edison is purchasing output from such Unit under a contract entered into pursuant to subparagraph (b) of paragraph 5 of the Memorandum.

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

Edison shall also construct any needed replacements, 3

modifications, additions, retrofits or similar improvements to 2 '

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the Units, whether required before or after completion of the Units, and shall retire and decommission the Units upon the expiration of their useful lives, salvaging any useful parts of the Units.

Subsidiary will cooperate with Edison in all activities in connection with the operation and maintenance of the Units, including, without limitation, applications for

. authorizations, permits and licenses and the execution of such other documents as may be reasonably required.

5.

Operation and Maintenance Costs.

Edison shall be responsible for making arrangements for the payment of'all costs and obligations incurred in connection with the operation and maintenance of the Units, including without limitation, all costs associated with materials and supplies inventories used for the q

Units and the disposal of nuclear fuel used in the Units, irrespective of the identity of the owner of such fuel.

Edison shall bill Subsidiary for these costs.

To the extent practicable, the billings shall be at such times as shall be appropriate to put the amounts billed in Edison's hands at the times disbursements are made.

To the extent such billing is not 4

practicable, Edison shall have the right to bill Subsidiary for Capital Costs.

Sub ' diary may require Edison to provide Subsidiary with a statement showing in reasonable detail the basis for the computation of any bill, at or about the time any l

bill is rendered to subsidiary.

The existence of a dispute between Edison and Subsidiary with respect to the proper amount J,

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of any bill shall not relieve subsidiary of its obligation to pay the bill when due.

All bills shall be subject to audit and later correction if in error.

6.

Nuclear Fuel.

Nuclear fuel may be leased or subleased by Edison to Subsidiary.

In the case of fuel subleased to Subsidiary, Subsidiary shall pay te Edison a rental equal to the amounts payable by Edison in respect of such fuel under Edison's lease of such fuel.

To the extent practicable, such rental payments shall be due at such times as shall be j

appropriate to put the amounts billed in Edison's hands at the i

times Edison makes its rental payments.

In the case of nuclear fuel leased by Edison to Subsidiary, Subsidiary will pay to Edison a rental equal to the Capital Costs applicable to such fuel.

7.

Allocation of Overhead.

Subsidiary recognizes that under this Agreement Edison will incur expenses associated with its management and supervisory duties which are not fully compensated in the Construction Costs and Operation and Mainten-4 ance costs provided for above.

Accordingly, Subsidiary agrees to pay Edison annually an allor-k's portion of its management and j

supervisory overhead costs with respect to each of the Units, to

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be determined in accordance with the following formula:

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A and G T

Where:

"U" means the total construction expenditures and operating expenses of the Unit in question for that fiscal year; "T"

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

executive management's salr;ics and the expenses of their offices for that fiscal year.

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

to the in-service date of the Unit and prior to completion of its l

decommissioning and retirement.

Edison shall bill Subsidiary for its allocable share of management and supervisory overhead costs within 30 days after the close of each' fiscal year.

Subsidiary shall make payment to Edison within ten days after receipt of the bill.

8.

Byron Station Common Plant and Common Costs.

2 Edison shall make the real estate and facilities designed, constructed or used as common plant for both units of the Byron Station available when and as required for operation and maintenance of Byron Unit 2.

Subsidiary agrees to pay to Edison for the use of such common plant a monthly rental charge equal to 50% of the Capital Costs applicable to such common plant.

To the extent practicable, costs properly assignable to a Unit at the Byron Station shall be assigned to the owner of such Unit.

Fifty percent of operating and maintenance costs not i

readily allocable to a Unit shall be allocated to Byron Unit 2.

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

Such facilities will continue to be so used throughout the remaining useful lives of such generating units.

During the Priority Period applicable to Byron Unit II, neither party shall be obligated to compensate the other for such use.

For any.

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

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9.

Soare Ecuipment.

Edison will make available to Subsidiary for use in connection with the Units spare equipment and parts maintained in connection with Edison's units.

Subsidiary will make available to Edison for use in connection with Edison's units spare equipment and parts maintained in connection with the Units.

The party receiving any such spare equipment or parts shall compensate the other party either in cash or by providing like equipment or parts, at the election of the party providing such equipment or parts.

If payment is to be made in cash, such payment shall be equal to the original cost of the item in question.

At any time after the Rate Moratorium period (as defined in the Memorandum), either party may terminate the obligations to make equipment and parts available under this paragraph.

10.

Access.

Subsidiary shall at all time" provide Edison, its employees, independent contractors and other authorized invitees with access to the Units for such erposes as Edison, in its sole discretion, considers appropriate, including access to the NRC to assure compliance with NRC regulations..

11.

Term.

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

the effect that this Agreement is terminated.

12.

Termination.

Edison may terminate this Agreement if subsidiary becomes insolvent or generally fails to pay, or admits in writing its inability to pay, debts as they become due; or Subsidiary applies for, consents to or acquiesces in the 4

appointment of, a trustee, receiver or other custodian for Subsidiary or any property thereof, or makes a general assignment i

for tha benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or

l other custodian is appointed for Subsidiary or for a substantial part of the property of Subsidiary and is not dischr.rged within 30 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is commenced in

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respect of subsidiary, and if such case or proceeding is not commenced by Subsidiary it is consented to or acquiesced in by

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subsidiary or remains for 30 days undismissed; or Subsidiary takes any corporate action to authorize, or in furtherance of, any of the foregoing. !

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Subsidiary may terminate this Agreement as to any Unit, upon twelve months' prior written notice to Edison of Subsid-iary's deterrination to terminate with respect to such Unit provided that no such termination may be effective prior to the 4

and of the Priority Period applicable to such Unit.

The foregoing termination rights-shall be in addition 1

to any other rights the parties may have arising out of any fact or circumstance referred to in this paragraph or arising out of any default.

No such termination shall relieve Edison of any obligation it may have as a licensed operator of the Units or as otherwise may be imposed on Edison by the NRC or by operation of law with respect to safety of construction, operation, maintenance, shutdown or decommissioning of the Units.

13.

Acenev.

Subsidiary hereby appoints Edison as Subsidiary's agent for the purpose of completing construction of the Units and operating and maintaining them under the terms of this Agreement; and, it is expressly understood that in so constructing, operating and maintaining the Units, Edison will be acting solely as agent for subsidiary and not as a principal.

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

than Edison and Subsidiary, whether as a third party beneficiary i

or otherwise.

Edison shall have no obligation hereunder to i

anyone other than Subsidiary and Subsidiary shall have no right i

to assign, convey, pledge or otherwise transfer any of its rights j

hereunder without the prior written consent of Edison.

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contained herein shall operate to limit any obligation Edison may have as a licensed operator of the Units, or as otherwise may be imposed on Edison by the NRC or by operation of law with respect to the safety of construction, operation, maintenance, shutdown or decommissioning of the Units.

14.

Miscellaneous.

(a)

The validity, interpretation and performance of this Agreement and each of its provisions shall be governed by the law of the State of Illinois as though all acts or omissions occurred in that State.

This Agreement is subject to the ap-Proval of any regulatory authority required by law.

(b)

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

(c)

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

(d)

This Agreement may not be assigned by either l

party without the prior written consent of the other party, which shall not be unreasonably withheld.

(e)

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

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Q, Executed this day of

, 1987.

COMMONWEALTH EDISON COMPANY By:

Its:

(SUBSIDIARY)

By:

Its:

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FINANCING AGREEMENT COMMONWEALTH EDISON COMPANY,

(" Edison"), and g

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

ARTICLE I Recitals (a)

Edison owns 100% of the outstanding equity securi-ties of Subsidiary.

(b)

Edison and Subsidiary are parties to a Facility Transfer Agree =ent, a Construction and Operating Agreement, and a Power Supply Agreement, all of even date herewith.

Pursuant to those agree =ents, Edison will transfer to Subsidiary the facilities co==enly referred to as Byron Unit 2 and Braidwood Units 1 and 2 (collectively the " Units"), and as agent for Subsidiary, co=plete construction of the Units, operate and maintain the Units, and construct any modifications thereto required for their continued operation, ?.nd, for at least 5 years, will have the right to purchase all of the power generated thereby.

In order to parform its obligations under those agreements, subsidiary may be required to make expenditures in excess of the revenues received by it from sales of power.

Exhibit E

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ARTICLE II

~Fundina 1.

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

$25,000,000 to provide working capital.

Thereafter, from time to time, and at Subsidiary's request, Edison will make available to subsidiary such funds as may be necessary to enable Subsidiary to comply with any obligation it may have with respect to safe i

construction, operation, maintenance, shutdown or decommissioning i

I of the Units; provided that nothing herein contained shall be construed as obligating Edison to previde funds to enable subsidiary to continue or resume operation of the Units, or any of a

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them, when Edison believes that continued or resumed operation is uneconomical.

2.

From time to time, and at Subsidiary's request, Edison may make available to Subsidiary such funds as may be nece'ssary to enable Subsidiary to perform its obligations in i

respect of the agreements referred to in Article I, or to fulfill i

l any other obligation subsidiary may come to have arising out of or l

relating to ownership or operation of the Units.

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ARTICLE III l

Conditions At Edison's option, funds to be provided hereunder shall i

j be made available in the form of:

(1) loans bearing interest at a rate not to exceed 250 basis points above Edison's then most l t l i 4

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t recent borrowing of similar duration; (2) non-interest bearing d

capital advances; or (3) capital contributions, i

ARTICLE IY Term i

This Agreement shall continue in full force and effect during the term of the construction and operating Agreement referred to above.

ARTICLE V Limitations l

(a)

The obligations of Edison to provide funding under a

paragraph 1 of Article II and its right to provide other funding 4

hereunder shall be subject to approval of this Agreement by the Illinois commerce commission.

(b)

This Agreement shall not create any rights in any l

person, other than Edison and Subsidiary, whatner as a third party i

i beneficiary or otherwise.

Edison shall have no obligation hereun-der to anyone other than Subsidiary and subsidiary shall have no right to assign, convey, pledge or otherwise transfer any of its rights hereunder without the. prior written consent of Edison.

i (c)

Subsidiary shall not use any of the funds provided to Subsidiary hereunder for any purpose other than those specified in Article II.

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Dated at Illinois, the day of 1987.

COMMONWEALTH EDISON COMPANY By By

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UNITED STATES

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NUCLEAR REGULATORY COMMISSION O Q g' j

WASHINGTON, D, C. 20555 j

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COMMONWEALTH EDISON COMPANY f DOCKET NO. STN 50-456 BRAIDWOOD STATION, UNIT 1 FACILITY OPERATING LICENSE C E 10 T R h L.

.L L.L D N o i S L= L E C TR t c.

(, c= N E r9 A T IN Cr C O M A ^' Y License No. NPF 59 1.

The Nuclear Regulatory Commission (the Comission or the NRC) has found as a J.

na cenGI risino.s Elca, te tSat.

__cre ne n +, a c.mpan The application 4for a license filed by Commonwealth Edison Company @y A.

(c.o - tionse 3)Lthe 'icemecI complies with the standards and requirements of the

. Atomic Eneray Act of 1954, as amended (the Act), and the Commission's regulations set forth in 10 CFR Chapter I, and all reauired notifications to other agencies or bodies have been duly made:

B.

Construction of Braidwood Station, Unit 1 (the facility) has been substantially completed in conformity with Construction Permit No.

CPPR-132 and the application, as amended, the provisions of the Act and the regulations of the Commission; C.

The facility will operate in conformity with the application, as amended, the provisions of the Act, and the regulations of the Ccmmission (except as exempted from compliance in Section 2.0.

below);

D.

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

F.-

cear.1 r et.,non e tu 1;g rsciWEv c.nd a s_= w +

E.

Ccamonwealth Edison CompanyKis technically qualified to engage in O

the activities authorized by this license in accordence with the c Y '%

Commission's regulations set forth in 10 CFR Chapter I; F.

Commonwealth Edison Conoany has satisfied the applicable provisions of 10 CFR Part 140, " Financial Protection Requirements and Indemnity Aareements," of the Commission's regulations; shE+

F

. G.

The issuance of this license will not be inimical to the common defense and security or to the health and safety of the public; H.

After weighing the environmental, economic, technical, and other benefits af the facility against environmental and other costs and considering available alternatives, the issuance of Facility Operating License No. NPF-70, subject to the conditions for protection of the environment set forth in the Environmental Protection Plan attached as Appendix B, is in accordance witn 10 CFR Part 51 of the Commission's regulations and all applicable requirements have been satisfied; and I.

The receipt, possession, and use of source, byproduct and special nuclear material as authorized by this license will be in accordance with the Commission's regulations in 10 CFR Parts 30, 40 and 70.

2.

Based on the foregoing findings regarding this facility, Facility Operating License No. NPF-70, which supercedes Facility Operating License O

No. NPF-59 issued on October 17, 1986, is hereby issued to _....~.. -. m +4e N *-

c o - Ike**5 Edier Cc ;=y (W limi^e} to read as follows:

uE A.

This license applies to Braidwood Station, Unit 1, a pressurized gN water reactor, and associated equipment (the facility) owned by

( o Commonwealth Edison Company d The facility is located in north -

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a n d ca.*cd eastern Illinois, 3 miles southwest of the Kankakee River, 20 miles E

s s is; w 3 stage south-southwest of the town of Joliet, and 60 miles southwest of yi&0\\ t Chicago, Illinois. The facility is within Reed Township, Will

( k, ( 8 G ' * ""+ ',9 County, Illinois and is described in the Byron /Braidwood Stations' o

A a^%

Final Safety Analysis Report, as supplemented and amended, and in.c j p ' A ]

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the Environmental Report, as supplemented and amended.

t C * %s 3 r.N B.

Subject to the conditions and requirements incorporated herein,

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the Commission hereby licenses:

v 4 e c o - s. w o-s yb k.:e ^k (1) CcrA:=1thClisenCowany(CCCc),pursuanttoSection y,t

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103 of the Act and 10 CFR Part 50, to possess, use and

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g operate the facility at the above designated location in 0o

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Will County, Illinois, in accordance with the procedures

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  • and limitations set forth in this license;
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(2) CEtr,6 pursuant to the Act and 10 CFR Part 70, to receive, i E {<, j V

storage and amounts required for reactor operation, as

  • 3 Tg described in the Final Safety Analysis Report, as 0 0 1-y y

supplemented and amended;

,fejg co-Ucensee.s'nt to the Act and 10 CFR Parts 30, 40 and 70, t t u

e CRo,4 pursua 04 (3) to receive, possess, and use at any time any byproduct, DS 4 6 o

source and special nuclear material as sealed neutron

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3 sources for reactor startup, sealed sources for reactor d

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,,(,I instrumentation and radiation monitoring equipment j4 calibration, and as fission detectors in amounts as tt 5.

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. Co I ic. ems ce s, (4) GEGo,^ pursuant to the Act and 10 CFR Parts 30, 40 and 70, to receive, possess, and use in amounts as required any byproduct, source or special nuclear material without restriction to chemical or physical form, for sample

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analysis or instrument calibration or associated with r

radioactive apparatus or components; and j

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(5) tEco',^ pursuant to the Act and 10 CFR Parts 30, 40 and 70, y;

to possess, but not separate, such byproduct and special nuclear materials as may be produced by the operation of the facility.

C.

This license shall be deemed to contain and is subject to the conditions specified in the Commission's regulations set forth in 10 CFR Chapter I and is subject to all applicable provisions of the Act and to the rules, regulations and orders of the Commission now or hereafter in effect; and f s subject to the additional conditions specified or incorporated below:

(1) Maximum Power Level Com ino n w e a l% E dis on Codpa n y GMob The 'icensee^1s authorized to operate the facility at reactor core power levels not in excess of 3411 megawatts thermal (100 percent rated power) in accordance with the conditions specified herein and other items identified in Attachment 1 to this license.

The items identified in Attachment I to this license shall be completed as specified. Attachment 1 is hereby incorporated into this license. Pending Commission approval, this license is restricted to power levels not in excess of five percent of rated power (170 megawatts thermal).

(2) Technical Specifications and Environmental Protection Plan The Technical Specifications contained in Appendix A and the Environmental Protection Plan contained in Appendix B, both of whichareatt:chpp.pereto,areherebyincorporatedintothis license. The ' ice =cc shall operate the facility in accordance with the Technical Specifications and the Environmantal Protection Plan.

(3) Emergency Planning In the event that the NRC finds that the lack of progress in completion of the procedures in the Federal Emergency Management Agency's final rule, 44 CFR Part 350, is an indication that a major substantive problem exists in achieving or maintaining an adequate state of emeroency preparedness, the provisions of 10 CFR Section 50.54(s)(2) will apply.

i (4) Initial Startup Test Program Any changes to the Initial Test Program described in Section 14 of the FSAR made in accordance with the provisions of 10 CFR 50.59 shall be reported in accordance with 50.59(b) within one month of such change.

(5) Regulatory Guide 1.97, Revision 2 Compliance C e Cc2 The licen:ce shall submit the final report and a schedule for implementation within six months of NRC approval of the DCRDR.

D.

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

This exemption is authorized by law, will not present an undue risk to the public health and safety, and is consistent with the common defense and security. This exemption is hereby granted.

The special circumstances regarding this exemption are identified in the referenced section of the safety evaluation report and the supplements thereto. This exemption is granted pursuant to 10 CFR 50.12.

With this exemption, the facility will operate, to the extent authorized herein, in conformity with the application, as amended, the provisions of the Act, and the rules and regulations of the Commission.

EcorIseASEd An exemption was previously granted pursuaK to U CFR 70.24. The

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exemptionwasgrantedwithNRCmaterialpicens No. SNM-1938, issued October 8, 1985, and relieved the licensee from he. requirement of having a criticality alarm system. Therefore, the licensee is exempted from the criticality alarm system provision of 10 CFR 70.24 so far as this section applies to the storage of fuel assemblies held under this license.

cECs E.

The 'icen:ce shall implement and maintain in effect all provisions of the approved fire protection program as described in the Final Safety Analysis Report, as supplemented and amended, and as approved in the SER dated November 1983 and its supplements, sub,iect to the following provision:

ce ca ne44censee may make changes to the approved fire protection program without prior approval of the Comission, only if those changes would not adversely affect the ability to achieve and maintain safe shutdown in the event of a fire.

co Gu aus F.

The liccn:cc^shall fully implement and maintain in effect all provisions of the physical security, guard training and qualification, and safeguards contingency plans previously approved by the Commission ard all amendments and revisions to such plans made pursuant to the authority of 10 CFR 50.90 and 10 CFR 50.54(p). The plans, which contain Safeguards Information protected under 10 CFR 73.21, are entitled:

"Braidwood Station Physical Security Plan, Security Personnel Training and Qualification Plan,* and Safeguards Contingency Plan *" with revisions submitted through May 27, 1986.

f-licen.see s)

G.

ExceptasotherwiseprovidedintheTechnicjlSpecificationsor Environmental Protection Plan, the licenses shall report any violations of the requirements contained in Section 2.C of this license in the following manner:

initial notification shall be made j

within 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> to the NRC Operations Center via the Emergency i

Notification System with written followup within thirty days in i{

accordance with the procedures described in 10 CFR 50.73(b), (c),

and(e).

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H.

The 4icca:cc4shall have and maintain financial protection of such type and in such amounts as the Commission shall require in 1

accordance with Section 170 of the Atomic Energy Act of 1954, as I

amended, to cover public liability claims.

4 I.

This license is effective as of the date of issuance and shall expire at midnight on May 21, 2026.

FOR THE NUCLEAR REGULATORY COMMISSION 1

4 Thomas E. Murley, Director Office of Nuclear Reactor Regulation j

Attachments:

1.

Work Items to be completed 2.

Appendix A - Technical Specifications (NUREG-1261) 3.

Appendix B - Environmental Protection Plan Date of Issuance: May 21,1987

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