NL-03-0693, Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

ML031000426
Person / Time
Site:	Hatch
Issue date:	03/26/2003
From:	Sumner H Southern Nuclear Operating Co
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
NL-03-0693
Download: ML031000426 (83)

Text

Lewis Sumner Southern Nuclear Vice President Operating Company, Inc.

Hatch Project Support 40 Inverness Parkway Post Office Box 1295 Birmingham, Alabama 35201 Tel 205 992.7279 Fax 205 992 0341 SOUTHERN A March 26, 2003 COMPANY Energy to ServeYourWorld' Docket Nos.: 50-321 NL-03-0693 50-366 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D. C. 20555-0001 Edwin I. Hatch Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

Ladies and Gentlemen:

Pursuant to 10 CFR 50.75(0(1), each power reactor licensee is required to report to the NRC the status of its decommissioning funding for each reactor or part of each reactor it owns on a calendar year basis, beginning on March 31, 1999, and every two years thereafter. Southern Nuclear Operating Company (Southern Nuclear) holds operating licenses DPR-7 and NPF-5 for the Edwin I. Hatch Nuclear Plant. On behalf of the licensed owners of the Edwin I. Hatch Nuclear Plant (Georgia Power Company, Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia, and the City of Dalton, Georgia), Southern Nuclear provides the enclosed submittals in accordance with the requirements of 10 CFR 50.75(f)(1).

This letter contains no NRC commitments. If you have any questions, please advise.

Sincerely, H. L. Sumner, Jr.

HLS/TWS/sdl

Enclosures:

1. Georgia Power Company letter dated March 11, 2003

2. Municipal Electric Authority of Georgia letter dated March 19, 2003

3. Oglethorpe Power Corporation letter dated February 27, 2003

4. City of Dalton, Georgia letter dated February 13, 2003 0

-A00

U. S. Nuclear Regulatory Commission NL-03-0693 Page 2 cc: Southern Nuclear Operating Company Mr. J. D. Woodard, Executive Vice President Mr. P. H. Wells, General Manager - Plant Hatch Document Services RTYPE: CHAO2.004 U. S. Nuclear Regulatory Commission Mr. L. A. Reyes, Regional Administrator Mr. L. N. Olshan, NRR Project Manager - Hatch Mr. N. P. Garrett, Acting Senior Resident Inspector - Hatch Georgia Power Company Mr. A. L. Leverett, Executive Vice President and CFO Municipal Electric Authority of Georgia Mr. J. E. Fuller, Senior Vice President and CFO City of Dalton, Georgia Mr. D. Cope, President and CEO Oglethorpe Power Corporation Ms. A. F. Appleby, Vice President Finance

ENCLOSURE 1 Allen L Leverett Bin 10240 Executive Vice President and 241 Ralph McGill Boulevard NE Chief Financial Officer Atlanta, Georgia 30308-3374 Tel 404 506 5710 Fax 404 506 5712 GEORGIALA March 11, 2003 POWER A SOUTHERN COMPANY Docket Nos. 50-321 50-366 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C. 20555 Edwin I. Hatch Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

Dear Ladies and Gentlemen:

Pursuant to 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC the status of its decommissioning funding for each reactor or part of each reactor it owns on a calendar year basis, beginning on March 31, 1999, and every two years thereafter. Georgia Power Company (GPC) hereby submits the enclosed information in accordance with 10 CFR 50.75(f)(1) for operating licenses DPR-7 and NPF-5 issued for Edwin I.

Hatch Nuclear Plant Unit 1 and 2, respectively. Southern Nuclear Operating Company, as the operating licensee and as an agent for the owners of the Edwin I. Hatch Nuclear Plant, is providing this information to the NRC on behalf of GPC.

Based on the information presented herein, there is reasonable assurance that the funding necessary for decommissioning the Edwin I. Hatch Nuclear Plant, consistent with the NRC prescribed minimum set forth in 10 CFR 50.75(c), will be available on the expiration date of operating licenses DPR-7 and NPF-5.

Please advise if you have any questions or comments regarding the information provided herein.

Respectfully submitted, GEORGIA POWER COMPANY, by, iTWS Enclosure

U. S. Nuclear Regulatory Commission Page Two cc: Southern Nuclear Operating Company Mr. H. L. Sumner, Vice President - Hatch U. S. Nuclear Regulatory Commission. Washington, D.C.

Mr. L. N. Olshan, NRR Licensing Project Manager - Hatch U. S. Nuclear Regulatory Commission. Region 11 Mr. L. A. Reyes, Regional Administrator Mr. N. P. Garrett, Acting Senior Resident Inspector - Hatch

Enclosure Edwin I. Hatch Nuclear Plant Georgia Power Company Ownership Percentage - 50.1 %

10 CFR 50.75(f)(1) Requirement Unit 1 Unit 2 1 The NRC minimum decommissioning estimate, $ 206,309,000 2 $ 206,309,0002 pursuant to 10 CFR 50.75(b) and (c). 1 2 The amount accumulated at the end of the $ 113,120,988 $ 106,068,211 calendar year preceding the date of the report for items included in 10 CFR 50.75(b) and (c).

3 A schedule of the annual amounts remaining to be See Schedule in See Schedule in collected; for items in 10 CFR 50.75(b) and (c). Attachment 1 Attachment 1 4 The assumptions used regarding: Per GPSC Docket 14000-U Per GPSC Docket 14000-U (a) rates of escalation in decommissioning 3.6% 3.6%

costs; (b) rates of earnings on decommissioning 6.5% 6.5%

funds; and (c) rates of other factors used in funding projections None None 5 Any contracts upon which the licensee is relying None None pursuant to 10 CFR 50.75(e)(1)(v) 6 Any modifications to a licensee's current method No modifications since the No modifications since the providing financial assurance occurring since the last report. Funding is to an last report. Funding is to an last submitted report. Extemal Sinking Fund with External Sinking Fund with the source of funds from the source of funds from Traditional Cost of Service Traditional Cost of Service ratemaking as ordered by the ratemaking as ordered by the GPSC in Docket 14000-U. GPSC in Docket 14000-U.

7 Any material changes to trust agreements. None None NOTES:

1The NRC formulas in section 10 CFR 50.75(c) include only those decommissioning costs incurred by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: (1) release of the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates. The costs of managing and storing spent fuel on-site until transfer to DOE are not included in the cost formulas.

2This number is based on NUREG-1 307, Rev. 10, for the burial factor (Option 2) and the December 2001 values for labor and energy factors.

Attachment 1 Schedule of Annual Amounts Included in Current Rates (Dollars in Thousands)

Plant Hatch HATCH 1 HATCH 2 BEG OF END OF BEG OF END OF YEAR FUND FUND YEAR YEAR FUND FUND YEAR YEAR FUND BAL EARNINGS CONTRIB FUND BAL FUND BAL EARNINGS CONTRIB FUND BAL 2002 113,121 106,068 2003 113,121 7,353 3,667 124,141 106,068 6,894 3.160 116,122 2004 124,141 8,069 3.667 135,877 116,122 7,548 3,160 126,830 2005 135,877 8,832 3.667 148,376 126,830 8,244 3,160 138,234 2006 148,376 9,644 3,667 161,687 138,234 8,985 3,160 150,379 2007 161,687 10,510 3,667 175,864 150,379 9,775 3,160 163,314 2008 175,864 11,431 3,667 190,962 163,314 10,615 3.160 177,089 2009 190,962 12,413 3.667 207,042 177,089 11,511 3,160 191,760 2010 207,042 13,458 3,667 224,167 191,760 12,464 3,160 207,384 2011 224,167 14,571 3,667 242,405 207,384 13,480 3,160 224,024 2012 242,405 15,756 3,667 261,828 224,024 14,562 3,160 241,746 2013 261,828 17,019 3,667 282,514 241,746 15,713 3.160 260,619 2014 282,514 18,363 3.667 304,544 260,619 16,940 3,160 280,719 2015 304,544 19,795 2.200 326,539 280,719 18,247 3,160 302,126 2016 326,539 21,225 0 347,764 302,126 19,638 3,160 324,924 2017 347,764 22,605 0 370,369 324,924 21,120 3,160 349,204 2018 370,369 24,074 0 394,443 349,204 22,698 3,160 375,062 2019 394,443 25,639 0 420,082 375,062 24,379 1,422 400,863 2020 420,082 27,305 0 447,387 400,863 26,056 0 426,919 2021 447,387 29,080 0 476,467 426,919 27,750 0 454,669 2022 476,467 30,970 0 507,437 454,669 29,553 0 484,222 2023 507,437 32,983 0 540,420 484,222 31,474 0 515,696 2024 540,420 35,127 0 575,547 515,696 33,520 0 549,216 2025 575,547 37,411 0 612,958 549,216 35,699 0 584,915 2026 612,958 39,842 0 652,800 584,915 38,019 0 622,934 2027 652,800 42,432 0 695,232 622,934 40,491 0 663,425 2028 695,232 45,190 0 740,422 663,425 43,123 0 706,548 2029 740,422 48,127 0 788,549 706,548 45,926 0 752,474 2030 788,549 51,256 0 839,805 752,474 48,911 0 801,385 2031 839,805 54,587 0 894,392 801,385 52,090 0 853,475 2032 894,392 58,135 0 952,527 853,475 55,476 0 908,951 2033 952,527 61,914 0 1,014,441 908,951 59,082 0 968,033 2034 1,014,441 39,563 0 1,054,004 968,033 62,922 0 1,030,955 2035 _ _ _ _ _ _ 1,030,955 67,012 0 1,097,967 2036 1,097,967 71,368 0 1,169,335 2037 1,169,335 76,007 0 1,245,342 2 03 8 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1,245,342 36,426 0 1,281,768 Beg. Projected Beg. Projected Balance Net Earnings Funding Total Balance Net Earnings Funding Total 113,121 894,679 46,204 1,054,004 106,068 1,123,718 51,982 1,281,768

ENCLOSURE 2 March 19, 2003 EAGN WER Docket Nos. 50-321 50-366 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C 20555 Edwin I. Hatch Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors (10 CFR 50.75(f)(1))

Dear Ladies and Gentlemen,

Pursuant to 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC the status of its decommissioning funding for each reactor or part of each reactor it owns on a calendar year basis, beginning on March 31, 1999, and every two years thereafter. The Municipal Electric Authority of Georgia (MEAG) hereby submits the enclosed information in accordance with 10 CFR 50.75(0(1) for operating licenses DPR-7 and NPF-5 issued for Edwin I Hatch Nuclear Plant Unit 1 and 2, respectively. Southern Nuclear Operating Company, as the operating licensee and as an agent for the owners of the Edwin I. Hatch Nuclear Plant, is providing this information to the NRC on behalf of MEAG.

Based on the information presented herein, there is reasonable assurance that the funding necessary for decommissioning the Edwin I. Hatch Nuclear Plant, consistent with the NRC prescribed minimum set forth in 10 CFR 50.75(c), will be available on the expiration date of operating licenses DPR-7 and NPF-5.

Please advise if you have any questions or comments regarding the information provided herein.

Respectfully submitted, THE MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA, by, Senior Vice President & CFO James E. Fuller 1TWS ' ~

MunicipaI Elecric Authority of Georgia 1470 Riveted,,e4Earkway NW Enclosure Ada -4686 1-800-333- EAG 770-563-0300

U. S. Nuclear Regulatory Commission Page Two cc: Southern Nuclear Operating Company Mr. H. L. Sumner, Vice President - Hatch U. S. Nuclear Regulatory Commission. Washington, D.C.

Mr. J. Colaccino, NRR Licensing Project Manager- Hatch U. S. Nuclear Regulatory Commission, Region 11 Mr. L. A. Reyes, Regional Administrator Mr. N. P. Garrett, Acting Senior Resident Inspector- Hatch Municipal Electric Authority of Georgia Mr. Steven M. Jackson, Director - Power Supply

Enclosure Edwin I. Hatch Nuclear Plant The Municipal Electric Authority of Georgia Ownership Percentage - 17.7%

10 CFR 50.75(f)(1) Requirement Unit I Unit 2 1 The NRC minimum decommissioning estimate, pursuant $ 72,887,000 2 $ 72,887,000 2 to 10 CFR 50.75(b) and (c). 1 2 The amount accumulated at the end of the calendar year $ 51,535,740 $ 49,833,366 preceding the date of the report for items included in 10 CFR 50.75(b) and (c).

3 A schedule of the annual amounts remaining to be See Schedule in See Schedule in collected; for items in 10 CFR 50.75(b) and (c) Attachment I Attachment 1 4 The assumptions used regarding:

(a) rates of esclation in decommissioning costs; 4.50% 4 50%

(b) rates of earnings on decommissioning funds; and 6.60% 3 6.60% 3 (c) rates of other factors used in funding projections. _

5 Any contracts upon which the licensee is relying pursuant See Attachment 2 See Attachment 2 to CFR 50.75(e)(1)(v).

6 Any modifications to a licensee's current method providing None None financial assurance occurring since the last submitted report.

7 Any material changes to trust agreements. See Attachment 3 See Attachment 3 NOTES:

1 The NRC formulas in section 10 CFR 50.75(c) include only those decommissioning costs incurred by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: (1) release of the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates.

The costs of managing and storing spent fuel on-site until transfer to DOE are not included in the cost formulas.

2 This number is based on NUREG-1 307, Rev. 10, for the burial factor (Option 2) and the December 2001 values for labor and energy factors.

3 Eamings rate of 6.60% for decommissioning funding approved by The Municipal Electric Authority of Georgia Board of Directors on November 14, 2002.

Attachment 1 Edwin I. Hatch Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors - 2003 Submittal

MLEAG Power Decommissioning Funding Plan Nuclear Decommissioning Fund - Hatch 1 (Dollarsin thousands)

Calendar Balance at Interest Less: Balance at Year Beg. of Year Contributions (1) Earnings Fees End of Year (A) (B) (C) (D) (E) 2002 51,536 2003 51,536 3,298 (83) 54,751 2004 54,751 3,614 (88) 58,277 2005 58,277 3,846 (93) 62,030 2006 62,030 4,094 (99) 66,025 2007 66,025 4,358 (105) 70,277 2008 70,277 4,638 (112) 74,803 2009 74,803 4,937 (I 19) 79,621 2010 79,621 5,255 (127) 84,750 2011 84,750 5,593 (135) 90,209 2012 90,209 5,954 (143) 96,020 2013 96,020 6,337 (152) 102,205 2014 102,205 6,746 (162) 108,789 2015 108,789 7,180 (172) 115,797 2016 115,797 7,643 (183) 123,257 2017 123,257 8,135 (194) 131,197 2018 131,197 8,659 (207) 139,650 2019 139,650 9,217 (220) 148,647 2020 148,647 9,811 (234) 158,224 2021 158,224 10,443 (248) 168,419 2022 168,419 11,116 (264) 179,270 2023 179,270 11,832 (281) 190,821 2024 190,821 12,594 (299) 203,116 2025 203,116 13,406 (318) 216,204 2026 216,204 14,269 (338) 230,135 2027 230,135 15,189 (359) 244,965 2028 244,965 16,168 (383) 260,750 2029 260,750 17,210 (412) 277,547 2030 277,547 18,318 (439) 295,427 2031 295,427 19,498 (478) 314,447 2032 314,447 20,753 (508) 334,692 2033 334,692 22,090 (540) 356,242 2034 356,242 15,675 (383) 371,534 2035 2036 2037 2038 2039 Total 327,874 (7,876)

Options Level Payments Footnotes:

(1) - Based on the current funding levels and decommissioning forecast, the decommissioning contributions for Hatch Unit One are being suspended.

MEAG Power Decommissioning Funding Plan Nuclear Decommissioning Fund - Hatch 2 (Dollarsin thousands)

Calendar Balance at Interest Less: Balance at Year Beg. of Year Cnntrinuionns (I) Earnines Fees End of Year 1-1 (A) (B) (C) (D) (E) 2002 49,833 2003 49,833 3,189 (80) 52,943 2004 52,943 3,494 (85) 56,352 2005 56,352 3,719 (90) 59,981 2006 59,981 3,959 (96) 63,844 2007 63,844 4,214 (102) 67,956 2008 67,956 4,485 (108) 72,332 2009 72,332 4,774 (115) 76,991 2010 76,991 5,081 (122) 81,950 2011 81,950 5,409 (130) 87,229 2012 87,229 5,757 (138) 92,848 2013 92,848 6,128 (147) 98,829 2014 98,829 6,523 (156) 105,195 2015 105,195 6,943 (166) 111,972 2016 111,972 7,390 (177) 119,185 2017 119,185 7,866 (188) 126,864 2018 126,864 8,373 (200) 135,037 2019 135,037 8,912 (212) 143,737 2020 143,737 9,487 (226) 152,998 2021 152,998 10,098 (240) 162,855 2022 162,855 10,748 (255) 173,348 2023 173,348 11,441 (272) 184,517 2024 184,517 12,178 (289) 196,407 2025 196,407 12,963 (307) 209,062 2026 209,062 13,798 (327) 222,533 2027 222,533 14,687 (348) 236,873 2028 236,873 15,634 (370) 252,137 2029 252,137 16,641 (399) 268,379 2030 268,379 17,713 (424) 285,668 2031 285,668 18,854 (462) 304,060 2032 304,060 20,068 (491) 323,637 2033 323,637 21,360 (522) 344,474 2034 344,474 22,735 (555) 366,654 2035 366,654 24,199 (591) 390,263 2036 390,263 25,757 (671) 415,349 2037 415,349 27,413 (712) 442,050 2038 442,050 14,588 (378) 456,260 2039 Total 416,579 (10,153)

Options: Level Payments Footnotes, (1) - Based on the current funding levels and decommissioning forecast, the decommissioning contributions for Hatch Unit Two are being suspended.

Attachment 2 Edwin I. Hatch Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors - 2003 Submittal

NOW THEREFORE:

For and in consideration of the premises and the mutual covenants and-agreeements here-inafter set forth, and in order to pay the Authority for its costs of providing (i) the Parti-cipant's Entitlement Share, as hereinafter defined, of the output and services of each facility of the Project and (ii) the Participant's Supplemental Bulk Power Supply, it is agreed by and between the parties hereto as follows:

ARTICLE I TERM OF CONTRACT, DEFINITIONS Section 101. Term.

The term of this Contract shall begin and this Contract shall constitute a binding obli-gation of the parties hereto from and after its execution by the last party to execute the same. The obligation of the Authority to provide electric power and energy under the pro-visions of this Contract shall begin with the first issuance and delivery by said Authority of any of its Bonds which are authorized to be issued by the provisions of I Ga. L. 1975, p. 107, as amended, or, in the event notes of the Authority are issued in anticipation of the issuance of Bonds, such obligation shall begin with the issuance and delivery of such bond anticipation notes. The term of this Contract shall continue in full force and effect until such time, not exceeding fifty years, as all of the Authority's Bonds as hereinafter defined or notes issued in anticipation of the issuance of Bonds and the interest thereon have been paid or provision for payment shall have been made in accordance with the provisions of the Bond Resolution or until such time as the Project shall be retired from service, decommissioned, or disposed of by the Authority, whichever is later.

Section 102. Definitions and Explanation of Terms.

As used herein:

(a) "Act" shall mean that certain Act of the 1975 session of the General Assembly of the State of Georgia compiled and published in I Ga. L. 1975, p. 107, as the same has been here-tofore or may be hereafter amended.

(b) "Annual Project Costs" shall mean, with respect to a Power Supply Year, to the ex-tent not paid as a part of the Costs of Acquisition and Construction, all costs and expenses of the Authority paid by the Authority for each of the generating facilities and the transmis-sion system facilities comprising the Project during such Power Supply Year allocable to the Project including, but not limited to, those items of cost and expense referred to in Section 306 (b) and (c), hereof, as Annual Project Generation Fixed Charges, Other Annual Project Generation Costs, Annual Project Transmission Fixed Charges, and Other Annual Project Transmission Costs.

(c) "Annual Supplemental Costs" shall mean those costs and expenses of the Authority allocable to the purchasing or furnishing of Supplemental Bulk Power Supply to the Partici-pants.

(d) "Annual System Budget" shall mean, with respect to a Power Supply Year, the budg-et adopted by the Authority not less than thirty days prior to the beginning of such Power Supply Year which budget shall itemize estimates of Annual Project Costs and Annual Sup-plemental Costs and all revenues, income, or other funds to be applied to such Costs, respec-tively, for and applicable to such Power Supply Year or, in the case of an amended such Budg-et, for and applicable to such Year for the remainder of such Power Supply Year.

2

(e) "Billing Statement" shall mean the written statement prepared or caused to be pre-pared monthly by the Authority that shall be based upon the Annual System Budget or upon the amended Annual System Budget adopted by the Authority pursuant to Section 202 hereof, and that shall show the monthly amount to be paid to the Authority by the Participant in ac-cordance with the provisions of Sections 307 and 403 hereof.

(f) "Bonds" shall mean the bonds issued by the Authority pursuant to the provisions of the Bond Resolution to finance or refinance the Cost of Acquisition and Construction of the Project, whether or not any issue of such bonds shall be subordinated as to payment to any other issue of such bonds, and shall include additional Bonds issued pursuant to the provi-sions of Section 501 hereof and refunding Bonds issued pursuant to the provisions of Sec-tion 502 hereof.

(g) "Bond Resolution" shall mean the Power Revenue Bond Resolution and any Supple-mental Power Revenue Bond Resolution to be adopted by the Authority and accepted by the Trustee and the Co-Trustee (if any) thereunder for the benefit of the owners of the Bonds which shall provide for the issuance of such Bonds, a copy of which Power.Revenue Bond Resolution and First Supplemental Power Revenue Bond Resolution in substantially the form to be adopted by the Authority shall be on file in the records of the Participant.

(h) "BuLlk Power Supply" shall mean, 'with respect to a Participant, all electric power and energy required by such Participant in excess of that amount (i) supplied by any gener-ation and transmission resources owned by such Participant on the effective date of this Con-tract, (ii) received by such Participant from the Southeastern Power Administration (SEPA), and (iii) procured by such Participant from alternate bulk power supply resources in accordance with the provisions of Section 404, hereof.

(i) "Commercial Operation Date" shall mean, with respect to each facility of the Project, the beginning of the day on which such facility of the Project is, in the opinion of the Author-ity, producing and delivering electric power and energy for commercial use, provided, how-ever, in the event any such facility is producing and delivering electric power and energy for commercial use on the date of acquisition of the Authority's interest therein, the Author-ity may establish a Commercial Operation Date for such facility which date shall be within a reasonable time of the effective date of such acquisition.

(j) "Consulting Engineer" shall mean an engineer or engineering firm of national repu-tation having demonstrated expertise in the field of electric power generation, transmission, power supply, electric utility operations, rates, and feasibility.

(k) "Contract" and "Power Sales Contracts" shall mean, respectively, this Contract with the Participant and all Power Sales Contracts, including this Contract, substantially identical hereto entered into by the Authority and a Participant, in each case as the same may be amended from time to time.

(1) "Cost of Acquisition and Construction" shall mean, to the extent not included in An-nual Project Costs, all costs of and expenses of planning, designing, acquiring, constructing, installing, and financing the Project, placing the Project in operation, decommissioning, or disposal of the Project, and obtaining governmental approvals, certificates, permits and licenses with respect thereto heretofore or hereafter paid or incurred by the Authority and

-may include, in addition and without limitation, the following:

- (1) working capital and reserves in such amounts as may he established pursuant to the Bond Resolution.

(2) interest accruing in whole or in part on Bonds prior to and during construction and for such additional period as the Authority may reasonably determine to be necessary 3

thereof in operation in accordance with the for the placing of the Project or any facility provisions of the Bond Resolution, facility of the Project and work-(3) acquisition of initial fuel for each generation and reserves for reload fuel, capital ing capital and reserves therefor and working of Bonds issued to finance such costs (4) the deposit or deposits from the proceeds to the Bond Resolution to meet Debt Ser-in any fund or account established pursuant vice reserve requirements for Bonds, of Bonds issued to finance such costs (5) the deposit or deposits from the proceeds to the Bond Resolution as reserves for re-in any funds or accounts established pursuant decommissioning or disposal of any newals and replacements, retirement from service, generating facility of the Project or contingencies, by the Authority, (6) training and testing costs incurred costs, engineering fees, contractors' (7) preliminary investigation and development services and supplies and legal and fees: costs of labor, materials, equipment, utility financing costs, period of construction, and (8) all costs of insurance applicable to the properly aillocable to the acquisition (9) all other costs incurred by the Authority and financed by the issurance of additional and construction of the Project, including all costs Bonds pursuant to Section 501, hereof.

to any period, the aggregate of the amounts (m) "Debt Service" shall mean, with respect said period into any fund or funds created required by the Bond Resolution to be paid during paying the principal (including sinking fund by the Bond Resolution for the sole purpose of on all the Bonds from time to time outstand-installments) of and premium, if any, and interest that Debt Service shall not include any ing as the same shall become due, provided, however, acceleration of the maturity of the Bonds.

to a Participant and any Power Supply (n) "Entitlement Share" shall mean, with respect (including related transmission facilities)

Year and with respect to the generating facilities (i) that percentage of the output an'.d and the transmission system facilities of the Project, in the Schedule of Output Entitlement Shares services of such generating facilities set forthPower Supply Year, as the same may hereafter attached hereto for such Participant in such of the Power Sales Contract with such Par-be increased in accordance with the provisions services which shall be determined by the ticipant, and (ii) that percentage of transmissionallocable to such Participant in accordance be Authority during each Power Supply Year to with the provisions of Section 308 hereof.

(o) "Fuel Costs" shall mean all costs incurred by the Authority during any Power Sup-processing, fabrication, transportation, deliver-ply Year that are allocable to the acquisition, materials required for the generation facil-ing, reprocessing, storage, and disposal of nuclear established by the Authority for such costs ities of the Project, including transfers to reserves related to such costs applied as appropri-related to future Power Supply Years, less credits ate in the discretion of the Authoiity.

which is a party to this Contract.

(p) "Participant" shall mean the political subdivision.State of Georgia which own and op-in the "Participants" shall mean all political subdivisions inhabitants and customers by pro-their citizens, erate electric distribution systems to serve which are parties to contracts with the Author-viding them with electric power and energy and term "Participants" shall include the "Par-ity substantially identical to this Contract. The Participant" shall mean any one of the ticipant," and the terms "a Participant" or "eachcase.may be. "Participant" shall include any Participants or each of the Participants, as the which operates or conducts or exercises commission or agency of such political subdivision electric distribution system.

jurisdiction over any essential function of the Participant's 4

(q) "Power Supply Year" shall mean the calendar year, except that the first Power Sup-ply Year shall begin on the date the Authority has an obligation to provide electric power and energy as determined in accordance with the provisions of Section 101, hereof.

(r) "Proportionate Share" shall mean, with respect to a Participant and a Power Sup-ply Year, that percentage of the kilowatts or kilowatt hours, as the case may be, of each type of service included in Supplemental Bulk Power Supply which such Participant is entitled to receive and for which such Participant is obligated to pay in each month of a Power Supply Year. With respect to kilowatts, such percentage shall be obtained for each month by dividing the maximum one-hour integrated coincident system demand of such Participant's Supple-mental Bulk Power Supply provided by the Authority during the particular month by the max-irnumr one-hour integrated coincident system demands of Supplemental Bulk Power Supply provided by the Authority to all the Participants during that month. With respect to kilowatt hours, such percentage for each month shall be obtained by dividing the kilowatt hours of Sup-plemental Bulk Power Supply delivered by the Authority to such Participant during the particular month by the total kilowatt hours of Supplemental Bulk Power Supply delivered by the Authority to all of the Participants during that month.

(s) "Project" shall mean those electric generation and related transmission facilities which are identified in the Description of Project and those transmission system facilities to which reference is made in the Description of Project to be acquired and constructed by the Authority during the time prior to the Commercial Operation Date of the last of the generat-ing facilities of the Project to be completed in order to meet the Authority's investment respon-sibility during such time in connection with any agreement for an integrated transmission sys-tem to which the Authority may be a party in accordance with the provisions of Section 302 hereof, together with (i) any major renewals, replacements, repairs, additions, betterments and improvements necessary, in the opinion of the Consulting Engineer, to keep the Project in good operating condition or to prevent a loss of revenues therefrom, (ii) any major addi-tions, improvements, repairs and modifications to the Project and any decommissionings or disposals of the Project, required by any governmental agency having jurisdiction over the Project or for which the Authority shall be responsible by virtue of any obligation of the Au-thority arising out of any contract to which the Authority may be a party relating to owner-ship of the Project or any facility thereof, (iii) those transmission system facilities to which reference is made in the Description of Project and which are required, in the opinion of the Consulting Engineer, to be acquired and constructed by the Authority on or after the Com-mercial Operation Date of the last of the generation facilities of the Project to be completed in order to meet the Authority's investment responsibility after such Commercial Operation Date in connection with any agreement for an integrated transmission system to which the Authority shall be a party in accordance with the provisions of Section 302 hereof, and (iv) working capital required by the Authority during construction of the Project and for the plac-ing of the Project in operation for providing Bulk Power Supply, including Supplemental Bulk Power Supply, to the Participant.

(t) "Prudent Utility Practice" at a particular time shall mean any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility in-dustry prior to such time, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at the lowest reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Utility Practice is not intended to be limited to the optimum practice, method.or act to the exclusion of all others, but rather to be a spectrum of possible practices, methods or acts having due regard for manufacturers' warranties and the requirements of governmental agencies of competent 5

to Prudent Utility Prac-jurisdiction. In evaluating whether any act or proposal conforms utilization of the tice, the parties shall take into account the objective to achieve optimum Authority's resources.

to a Participant, that (u) "Supplemental Bulk Power Supply" shall mean, with respect of that supplied from portion of Bulk Power Supply required by such Participant in excess owned or controlled by the Project and, unless otherwise provided, from any future projects to purchase electric the Authority from which the Participant contracts with the Authority transmission ser-capacity reserve service, power and energy and in excess of the generating service associated and such other vice, scheduled, emergency, or economy interchange service, with the provisions of with the Project as shall be supplied by the Authority in accordance Section 303, hereof.

the Authority which (v) "Uncontrollable Forces" means any cause beyond the control of or overcome, including but by the exercise of due diligence the Authority is unable to prevent comply with then existing not limited to, failure or refusal of any other person or entity to act of God, fire, flood, explosion, contracts with the Authority or with a Participant, an authority including military strike, sabotage, pestilence, an act of the public enemy, civil and proper jurisdiction, in-court orders, injunctions, and orders of governmental agencies with inability of the Authority surrection or riot, an act of the elements, failure of equipment, or materials or equipment or any Contractors engaged in work on the Project to obtain or ship of the Authority to because of the effect of similar causes on suppliers or carriers, or inability sell or issue its bonds or notes.

Accounts for Class A (w) "Uniform System of Accounts" means the Uniform System of as amended or time to time, and B Public Utilities and Licensees as prescribed and, from or its successor.

modified or substitution therefor made by the Federal Power Commission ARTICLE II CERTAIN OBLIGATIONS OF THE AUTHORITY AND THE PARTICIPANT Section 201. Bulk Power Supply.

shall take from The Authority shall provide or cause to be provided and the Participant be responsible will the Authority the Bulk Power Supply of the Participant. The Authority contracting for, for planning, negotiating, designing, financing, acquiring or constructing, and transmission arrangements administering, operating, and maintaining all generation to the Par-Bulk Power Supply and facilities necessary to effect the delivery and sale of such supply bulk power ticipant, provided, however, that the Participant may procure alternate resources pursuant to the terms of Section 404, hereof.

I Section 202. Annual System Budget.

System Budget at The Authority will prepare and submit to the Participant an Annual Participant may least ninety days prior to the beginning of each Power Supply Year. The matters or sug-any then submit to the Authority, at any time until such budget is adopted, The Authority gestions relating to the Budget which the Participant may care to present. than thirty nor and adoption of such Budget not less shall then proceed with the consideration and shall cause more than forty-five days prior to the beginning of such PoNver Supply Year the Budg-provided, however, copies of such adopted Budget to be delivered to the Participant, delivered in adopted and et for the first Power Supply Year shall be prepared, considered, 6

the most practicable manner available in the discretion of the Authority. As required from time to time during any Power Supply Year after thirty days notice to the Participant, the Authority may adopt an amended Annual System Budget' for and applicable to such Year for the remainder of such Year.

Section 203. Reports.

The Authority will prepare and issue to the Participants the following reports each month of the Power Supply Year:

(1) Financial and Operating Statement relating to the Project and to the Supplemental Bulk Power Supply, (2) Status of Annual System Budget, (3) Status of construction budget of the Project during construction, (4) Analysis of operations relating to the Project and to the Supplemental Bulk Power Supply.

Section 204. Records and Accounts.

The Authority will keep accurate records and accounts of each of the facilities comprising the Project and of the transactions relating to the Supplemental Bulk Power Supply as well as of the operations of the Authority in accordance with the Uniform System of Accounts.

Said accounts shall be subject to an annual audit by a firm of independent certified public accountants experienced in electric utility accounting and of national reputation to be sub-mitted to the Authority within sixty days after the close of any Power Supply Year. All transactions of the Authority relating to the Project and to the Supplemental Bulk Power Supply with respect to each Power Supply Year shall be subject to such an audit.

Section 205. Consulting Engineer.

(a) The Authority will retain a consulting engineer to assist, advise and make recom-mendations to the Authority on matters relating to electric power generation, transmission, power supply, electric utility operations, rates and charges, feasibility and budgets and shall cause such consulting engineer to prepare within one hundred and twenty days following the close of each Power Supply Year an annual comprehensive engineering report with respect to the Project and to the Supplemental Bulk Power Supply for the immediately preceding Power Supply Year which shall contain a copy of the annual audit and which shall include:

(1) A report on the operations of td Authority; (2) A report on the management of the Project; (3) A report on the sufficiency of rates and charges for services; (4) A report on requirements for future bulk power supply; (5) Recommendations as to changes in operation and the making of repairs, renew-als, replacements, extensions, betterments and improvements; and (6) A projection of the Authority's costs of providing the Bulk Power Supply to aU Participants for the ensuing five year period.

(b) The Authority shall cause a copy of said engineering report to be delivered to each Participant 7

Section 206. Power Supply Planning.

The Participant will keep the Authority advised on all matters relating to the Partici-pant's power supply planning including but not limited to load forecasts, proposed trans-mission and generation additions and new delivery points.

Section 207. Diligence.

The Participant will exercise diligence in the operation of its electric system with the view of securing efficiency in keeping with Prudent Utility Practice, will construct its facili-ties in accordance with specifications at least equal to those prescribed by the National Elec-tric Safety Code of the U. S. Bureau of Standards, will maintain its lines at all times in a safe operating condition, and will operate said lines in such manner as not to interfere un-duly with the operations of others. The Participant will use electric service equally, from the three phases as nearly as possible and will maintain a power factor of 89.49 lagging or such greater power factor as may be agreed upon by the Participant in the light of any other con-tract between the Authority and any other party, and such agreement by the Participant shall not be unreasonably withheld.

Section 208. Access.

Participant will give all necessary permission to enable the agents of the Authority to carry out this Contract and will otherwise be subject to applicable terms and conditions set forth in those tariffs which affect the Participant and which are filed with the Federal Pow-er Commission. The Authority and the Participant each wrill give the other the right to enter the premises of the other at all reasonable times for the purpose of repairing or removing facilities, reading meters and performing work incidental to delivery and receipt of Bulk Power Supply.

Section 209. Adjustment of Billing.

At the end of each PoNver Supply Year the Authority shall determine if the aggregate amount paid by the Participant under Sections 307 and 403, hereof, to provide recovery of all the Authority's costs during such Power Supply Year was in the proper amount, and, upon the making of such determination, any amount found to have been paid by the Par-ticipant in excess of the amount which should have been paid by the Participant shall be credit-ed on the Billing Statements to the Participant for the remaining month or months of the Power Supply Year next succeeding the Power Supply Year for which such adjustment was determined to have been necessary. Ten percent of the amount of any deficiency shall be added to each of the next ten Billing Statements. In the event' that the failure of a Partici-pant to pay its Entitlement Share of Annual Project Costs in accordance with its Power Sales Contract shall have resulted in the application of amounts in any reserve or working fund under the Bond Resolution to the payment of costs payable from such reserve or work-ing fund and the other Participants shall have made up the deficiency created by such appli-cation or paid additional amounts into such reserve or working fund, amounts thereafter paid to the Authority by such nonpaying Participant for application to such past due payments shall be credited on the Billing Statements of such other Participants in the next month or months as shall be appropriate.

Section 210. Disputed Monthly Billing Statement.

In case any portion of any monthly Billing Statement received by the Participant from the Authority, shall be in bona fide dispute, the Participant shall pay the Authority the full amount of such monthly Billing Statement, and, upon determination of the correct amount, 8

the difference between such correct amount and such full amount, if any, will be credited to the Participant by the Authority after such determination. In the event such monthly Billing Statement is in dispute, the Authority will give consideration to such dispute and will advise the Participant with regard to the Authority's position relative thereto within thirty days following written notification by the Participant of such dispute.

Section 211. Sources of Participant's Payments.

The obligations of the Participant to make the payments to the Authority under this Contract shall constitute general obligations of the Participant for the payment of which the full faith and credit of the Participant shall be and the same hereby is pledged to provide the funds required to fulfill all obligations arising under this Contract. Unless such payments or provisions for. such payments shall have been made from the revenues of the electric sys-tem of the Participant or from other funds thereof, the Participant will annually in each and every fiscal year during the term of this Contract include in its general revenue or appro-priation measure, whether or not any other items are included, sums sufficient to satisfy the payments required to be made in each year by this Contract until all payments required un-der this Contract have been paid in full. In the event for any reason any such provision or appropriation is not made for a fiscal year of a Participant, then the chief fiscal officer of the Participant shall, in accordance with the provisions of the Act in effect as of the date of this Contract, set up as an appropriation on the accounts of the Participant in each fiscal year the amounts required to pay the obligations called for under this Contract. The amount of the appropriation in such fiscal year to meet the obligations of this Contract shall be due and payable and shall be expended for the purpose of paying and meeting the obligations provided under the terms and conditions of this Contract, and such appropriation shall have the same legal status as if the Participant had included the amount of the appropriation in its general revenue or appropriation measure.

Section 212. Rate Covenant.

The -Participant will establish, maintain and collect rates and charges for the electric service of its electric system so as to provide revenues sufficient, together with available elec-tric system reserves, to enable the Participant to pay to the Authority all amounts payable under this Contract and to pay all other amounts payable from and all lawful charges against or liens on the revenues of its electric system.

ARTICLE III ELECTRIC POWER AND ENERGY FROM THLE PROJECT Section 301. Ownership of Project.

The Authority will issue the Bonds in series from time to time under the Bond Resolu-tion to finance and shall own the Project consisting of the Authority's ownership interest in the generation and transmission facilities described in the Description of Project attached to this Contract and will cause to be delivered to the Participant during each month of each Power Supply Year its Entitlement Share of the output and services of each facility of the Project for the useful life of each such facility of the Project.

Section 302.. Costs of Generation and Transmission Facilities Comprising the Project.

(a) Those generation and transmission facilities comprising the Project will, for purposes 9

of accounting for the Authority's costs and charges to the Participants, be separated into (i) generation and related transmission facilities, and (ii) transmission system facilities; (b) The Authority's costs of providing to the Participants their Entitlement Shares of such generation and related transmission facilities as are included in the Project will be ac-counted for as described in Section 306 (b) hereof, and (c) The Authority's costs of providing to the Participants their Entitlement Shares of such transmission system facilities as are included in the Project will be accounted for as described in Section 306(c) hereof, and will be determined as follows:

(1) Such transmission system facilities as are included in the Project will be acquired by the Authority from time to time for the term of this Contract through participation in an integrated transmission system agreement with other utilities. The Authority's investment responsibility in such transmission system facilities for any Power Supply Year will be that percentage of the total investment in the combined transmission system facilities of the Authority and such other utilities obtained by dividing the demand of total Bulk Power Supply provided by the Authority to all the Participants during such Power Supply Year by the combined demands of the Authority and such other utilities during such Power Supply Year and expressing the result as a percentage.

The Authority's responsibility for annual capital costs relating to renewals, replace-ments, repairs, additions, betterments and improvements to and for annual operating costs of such transmission system facilities for any Power Supply Year will be the annual capital and operating costs incurred by the Authority for such facilities.

(2) In the event the Authority assumes responsibility for transmission of the Partici-pants' allotments of SEPA power pursuant to arrangements for which provision is made in Sections 803 and 804 hereof, the Authority's responsibility for investment in, and annual capital and operating costs of, such transmission system facilities acquired by the Authority from time to time through participation in such integrated trans-mission system agreement may be increased. The Authority's investment responsibility in such increased transmission system facilities for any Power Supply Year will be that percentage of the total investment in the combined transrhission facilities of the Authority and such other utilities obtained by dividing the demand of such SEPA power plus the demand of total Bulk Power Supply provided by the Authority to all the Participants during such Power Supply Year by the combined demands of the Authority and such other utilities during such Power Supply Year and expressing the result as a percentage. The Authority's responsibility for annual capital costs relating to renewals, replacements, repairs, additions, betterments and improvements to and for annual operating costs of such increased transmission system facilities for any Power Supply Year will be the annual capital and operating costs incurred by the Authority for such facilities.

Section 303. Interconnection Arrangements.

The Authority will purchase or provide such generating capacity reserve service, trans-mission service, maintenance service, emergency service, economy interchange service and other interchange service associated with the Project as may be necessary for the reliable and economical supply of the output and services of the Project and will cause to be delivered to the Participant during each month of the Power Supply Year its Entitlement Share of such output and services. The Authority may use electri'c energy from the Project which is surplus to the requirements of the Participants, as such surplus may be available from time to time, for the purpose of economy interchange service or other interchange services with others, and sny net revenues received by the Authority for any such services shall be credited to the Participants by the Authority in proportion to their Entitlement Shares.

10

Sectiorn 304. Operation and Maintenance.

the Pro-The Authority covenants and agrees that it 'will operate, maintain and manage and econom-ject or cause the same to be operated, maintained and managed in an efficient ical manner, consistent with Prudent Utility Practice.

Section 305. Insurance.

of the The Authority shall maintain or cause to be maintained, in force for the benefit An-or parties hereto, as their interest shall appear, as Costs of Acquisition and Construction as is and nual Project Costs, such insurance with respect to the Project as shall be available the case of and operating generating facilities but, in usually carried by utilities constructing state satisfy the requirements of Federal and nuclear generating facilities, not less than will as is usu-law and the Nuclear Regulatory Commission regulations and such other insurance ally carried by electric utilities in conformity with Prudent Utility Practice.

Section 306. Charges and Billings for the Project.

and (a) The Authority will establish fair and nondiscriminatory charges for all output the Project service provided by the Authority to the Participants relating to each facility of with the designed to recover all of the Authority's costs allocable to such facility commencing date to which interest has been capitalized Commercial Operation Date of such facility or the System on Bonds allocable to such facility, whichever is the earlier, as set forth in the Annual Section by the Authority pursuant to Budget, or the amended Annual System Budget adopted 202 hereof, and such costs shall include Annual Project Costs.

facil-(b) The Annual Project Costs allocable to the generation and related transmission ities of the Project shall include at least the following items of costs and expense:

(1) "Annual Project Generation Fixed Charges," which means:

(A) the amount which the Authority is required under the Bond Resolution for to pay or deposit into any fund or account established by the Bond Resolution the payment of Debt Service and any reserve requirements for Bonds which are allocable to (i) the generation and related transmission facilities of the Project and (ii) the w6rking capital which is required by the Authority for providing Bulk Pow-er Supply, including Supplemental Bulk Power Supply to the Participants and which is allocable to the generation and related transmission facilities of the Project; (B) the amount (not otherwise included under any item in this Section 306 (b))

allocable to the generation and related transmission facilities of the Project which the Authority is required under the Bond Resolution to pay or deposit during such Power Supply Year into any other fund or account established by the Bond Resolu-up tion, and shall include, without limitation, any such amounts required to make any deficiency in any reserve fund or working fund required or permitted by the Bond Resolution resulting from a default in payments by any Participant or Par-ticipants of amounts due under its or their Power Sales Contracts with the Authority; (C) amounts which the Authority is required under the provisions of the Bond Resolution to pay or deposit into a reserve for renewals and replacements; (D) amounts which must be realized by the Authority for coverage of Debt Service as may be required by the Bond Resolution; (E) amounts which must be set aside by the Authority for the retirement from 11

service, decommissioning, or disposal of the generation facilities of the Project as may be required by the Bond Resolution; (F) amounts which must be paid by the Authority for the purchase of generat-ing capacity reserves for the Project; and (G) amounts which must be paid by the Authority for the purchase of transmis-sion service for the Project; and (2) "Other Annual Project Generation Costs," which means:

(A) all costs of producing and delivering electric power and energy from the Project and providing the Participants' Entitlement Shares including, but not limited to, (i) Fuel Costs and other ordinary operation and maintenance costs and provi-sions for reserves therefor, administrative and general costs, insurance, overhead and any charges payable by the Authority in connection with the output of the Project, (ii) net costs of scheduled, emergency, economy or other interchange service incur-red by the Authority in connection with the Project, and (iii) all operation and main-tenance costs related to the operating and conducting of the business of the Author-ity including salaries, fees for legal, engineering, and other services and all other expenses properly related to the conduct of the affairs of the Authority; and (B) amounts required of the Authority by the provisions of the Bond Resolu-tion to pay the cost of or to provide reserves for (i) extraordinary operating and maintenance costs including the costs of scheduled, emergency, or other interchange service and the prevention or correction of any unusual loss or damage to keep the generating facilities of the Project in good operating condition or to prevent a loss of revenue therefrom, (ii) any major renewals, replacements, repairs, additions, bet-terments and improvements necessary, in the opinion of the Consulting Engineer, to keep the generating facilities of the Project in good operating condition or to pre-vent a loss of revenues therefrom and (iii) any major additions, improvements, re-pairs or modifications to any such generating facility, or any decommissionings or disposals of any such generating facility, required by any governmental agency hav-ing jurisdiction over the Project or for which the Authority shaill be responsible by virtue of any obligation of the Authority arising out of any contract to which the Authority may be a party relating to ownership of the Project or any facility there-of to the extent that the Authority is not reimbursed therefor from the proceeds of insurance or funds for such payment are not available to the Authority therefor from any funds or accounts established under the Bond Resolution, or funds for such payment are not provided or to be provided by the issuance of additional Bonds pursuant to Article V of this Contract.

(c) The Annual Project Costs allocable to the transmission system facilities of the Project shall include at least the following items of costs and expense:

(1) "Annual Project Transmission Fixed Charges," which means:

(A) the amount which the Authority is required under the Bond Resolution to pay or deposit into any fund or account established by the Bond Resolution for the payment of Debt Service and any reserve requirements for. Bonds which are allocable to (i) the transmission system facilities of the Project and (ii) the work-ing capital which is required by the Authority for providing Bulk Power Supply, in-cluding Supplemental Bulk Power Supply, to the Participants and which is allocable to the transmission system facilities of the Project; 12

Section 306 (c) )

(B) the amount (not otherwise included under any item of this Authority is the Project which the allocable to the transmission system facilities of Power Supply during such required under the Bond Resolution to pay or deposit and shall Bond Resolution, Year into any other fund or account established by the up any deficiency include, without limitation, any such amounts required to make the Bond Resolution in any reserve fund or working fund required or permitted by of amounts resulting from a default in payments by any Participant or Participants due under its or their Power Sales Contracts with the Authority; provisions of the (C) the amount which the Authority is required under the and and replacements; Bond Resolution to pay or deposit into a reserve for renewals of Debt (D) amounts which must be realized by the Authority for coverage Service as may be required by the Bond Resolution; and (2) "Other Annual Project Transmission Costs," which means:

and (A) amounts for ordinary operation and maintenance costs, administrative Authority by the general costs, insurance, overhead, and any other charges payable all credits due to in connection with such transmission system facilities, including and Participants with respect to delivery point transmission facilities; Bond Resolu-(B) amounts required of the Authority by the provisions of the operation and tion to pay the costs of or to provide reserves for (i) extraordinary unusual loss or dam-maintenance costs, including the prevention or correction of any good operating con-age to keep the transmission system facilities of the Project in renewals, replace-dition, or to prevent a loss of revenues therefrom, (ii) any major in the opinion of ments, repairs, additions, betterments and improvements necessary, of the Project the Consulting Engineer, to keep the transmission system facilities and (iii) any in good operating condition or to prevent a loss of revenues therefrom such transmission major additions, improvements, repairs or modifications to any jurisdiction over the Project or facility required by any governmental agency having of the Au-for which the Authority shall be responsible by virtue of any obligation may be a party relating thority arising out of any contract to which the Authority the Authority to ownership of the Project or any facility thereof to the extent that for such pay-is not reimbursed therefor from the proceeds of insurance or fundsaccounts estab-or ment are not available to the Authority therefor from any funds not provided by lished under the Bond Resolution, or funds for such payment are the issuance of additional Bonds pursuant to Article V of this Contract.

Power Supply Year (d) The Authority shall bill the Participant each month during each for such month in accordance with by providing the Participant with a Billing Statement 306. Such Billing Statement the charges established pursuant to the provisions of this Section for such month by the Participant shall set forth, among other things, the sum to be paid sum shall equal the for its Entitlement Share of the Project output and services, and such as estimated in the Costs, Participant's Entitlement Share of that amount of Annual Project pursuant to the Bond then current Annual System Budget, which the Authority is required Billing Statmnent Resolution to accrue, pay or set aside during each month. Such monthly owned, finan:ed, as are shall include a credit for such delivery point transmission facilities paid by the Participant or operated by the Participant, and such Billing Statement shall be not paid by the Par-on or before the tenth day from the date of such bill. Amounts due and one-half percent per charge of one and ticipant on or before said day shall bear an additional Supply Year, adjust-month until the amount due is paid in full. At the end of each Power If the Participant pays ments of billing shall be made in accordance with Section 209 hereof.

13

less than the full amount due with respect to a Billing Statement, the partial payment so re-ceived shall be applied first in discharge of the Participant's obligation to pay its Entitlement Share of the Annual Project Costs as provided in this Article III before any funds from such partial payment are applied to the discharge of the Participant's obligations under the pro-visions of Article IV hereof.

(e) At such times as the Authority issues additional Bonda in accordance with the pro-visions of Article V, hereof, the Authority will increase such elements of Annual Project Costs as are necessary and the Participant shall pay its Entitlement Share of such increased charges pursuant to the provisions of Section 307 hereof.

Section 307. Project Entitlement and Payment Obligations.

(a) The Participant shall be entitled to receive its Entitlement Share of the-output and transmission services of the Project and of all services provided by the Authority in ac-cordance with the provisions of Section 303 hereof, as may be available for the useful life of the Project.

(b) The Participant shall pay its Entitlement Share of Annual Project Costs set forth in the monthly Billing Statements submitted by the Authority to the Participant in accord-ance with the provisions of Section 306 hereof, whether or not the Project or any part there-of has been completed, is operating or operable or its output is suspended, interrupted, in-terfered with, reduced or curtailed or terminated in whole or in part, and such payments shall not be subject to reduction whether by offset or other-wise and shall not be condition-al upon the performance or nonperformance by any party of any agreement for any cause whatever.

Section 308. Determination of Participant's Entitlement Shares of Transmisslon System Fa-cilities Included in the Project.

(a) With respect to transmission system facilities included in the Project, the Entitle-rment Share for each Participant to be determined by the Authority for each Power Supply Year shall be the percentage allocable to the Participant of the transmission services provided by the Authority and of the costs incurred by the Authority relating to such transmission sys-tem facilities as are acquired by the Authority from time to time for the term of this Contract through participation in an integrated transmission system agreement -with other utilities.

Such percentage shall be determined by the Authority by dividing the average of the one-hour integrated coincident system demands for Bulk Power Supply provided by the Authority to such Participant during each month of such Power Supply Year by the average of the one-hour integrated coincident system demands of total Bulk Power Supply provided by the Au-thority to all of the Participants during each month of such Power Supply Year and expressing the result as a percentage so that, when all of such Entitlement Shares so computed by the Authority are added together, their sum shall be one hundred. For the purposes of such com-putation, the one-hour interval shall be the hour during which there shall occur the maximum one-hour integrated coincident system demands of total Bulk Power Supply provided by the Authority to all of the Participants.

(b) In the event the Authority assumes responsibility for transmission of the Partici-pants' allotments of SEPA power pursuant to arrangements for which provision is made in Sections 803 and 804 hereof, and such responsibility results in an increase in the investment in and annual operating costs of such transmission system facilities, the Entitlement Share for each Participant to be determined by the Authority for each Power Supply Year shall be the percentage allocable to the Participant of the transmission services provided by the Au-14

thority and of the costs incurred by the Authority relating to such increased responsibility.

Such percentage shall be determined by the Authority by dividing the average of the one-hour Power integrated coincident system demands of such SEPA power plus the demands of Bulk Sup-Supply provided by the Authority to such Participant during each month of such Power and ply Year by the average one-hour integrated coincident system demands of SEPA power during demands of total Bulk Power Supply provided by the Authority to all of the Participants the re-the same one-hour interval of each month of such Power Supply Year and expressing sult as a percentage so that, when all of such Entitlement Shares so computed by the Authority the are added together, their sum shall be one hundred. For the purposes of such computation,inte-one-hour interval shall be the hour during which there shall occur the maximum one-hour Supply grated coincident system demands of SEPA power and demands of total Bulk Power provided by the Authority to all of the Participants.

(c) Such Entitlement Shares of transmission system facilities included in the Project and shall be estimated by the Authority prior to the beginning of any Power Supply Year Budget. Revisions of such estimated such estimates shall be set forth in the Annual System Year Entitlement Shares shall be made by the Authority at the end of such Power Supply the billings for such Power Sup-based upon such system demands as actually experienced and ply Year shall be adjusted by the Authority accordingly.

Section 309. Pledge of Payments.

All payments required to be made by the Participant pursuant to the provisions of this Costs Article III, and all other payments attributable to the Project or to the Annual Project shall be to be made in accordance with or pursuant to any other provision of this Contract, pledged to secure the payment of the Authority's Bonds.

Section 310. Payment as Operating Expense.

any So long as electric power and energy shall actually be received by a Participant from facility or facilities of the Project, the Participant's Entitlement Share of Annual Project for Costs shall be paid by the Participant as a cost of purchased electric power and energy Participant's electric system and as an expense of operation and maintenance thereof.

Section 311. Credits to Annual Project Cost.

in The Authority may, pursuant to the Schedule of Entitlement Shares and participation in Sec-an integrated transmission system agreement with others, for which provision is made other tion 302(c), hereof, sell the output and services of facilities included in the Project to utilities. The anticipated proceeds from such sale shall be estimated in the Annual System to Budget, and any net revenues actually received by the Authority as the result of such sales other utilities during any month of the Power Supply Year shall be credited to the Partici-the pants in proportion to their Entitlement Shares in the monthly Billing Statement for following month.

Section 312. Sale of Excess Participant's Entitlement Share.

In the event the Participant shall determine that all or any part of the Participant's in Entitlement Share of the output and services of the generating facilities of the Project are the Authority may sell and transfer for any excess of the requirements of the Participant, period of time all or any part of such excess output and services to such other Participants ss shall agree to take such excess output and services, provided, however, that in the event the other Participants do not agree to take tha entire amount of such excess, the Authority 15

shall have the right to dispose of such excess to other utilities. If all or any portion of such excess of the Participant's Entitlement Share of output and services is sold pursuant to this section, the Participant's Entitlement Share shall not be reduced, and the Participant shall remain liable to the Authority to pay the full amount of its Billing Statement as if such sale had not been made; except that such liability shall be discharged to the extent that the Authori-ty shall receive payment for such excess output and services from the purchaser or purchasers thereof.

ARTICLE IV SUPPLEMENTAL BULK POWER SUPPLY ARRANGEMENTS Section 401. Supplemental Bulk Power Supply Provided by the Authority.

The Authority will provide or cause to be provided to the Participant its Supplemental Bulk Power Supply during each month of each Power Supply Year. Such Supplemental Bulk Power Supply may include, but shall not be limited to, partial and full requirements firm power purchases, and unit power service, firm and nonfirm capacity and energy service, transmission service and other interchange service made available as a result of transac-tions with other utilities. The costs to the Authority of electric power and energy purchased by the Authority from other utilities based upon tariffs filed by such other utilities with the Federal Power Commission will be directly reflected in the monthly Billing Statement to the Participant. Such monthly Billing Statement will include a credit for such delivery point transmission facilities as are owned, financed, or operated by the Participant.

Section 402. Charges for Supplemental Bulk Power Supply.

(a) The Authority will establish fair and nondiscriminatory charges for all services provided by the Authority to the Participants relating to the Supplemental Bulk Power Sup-ply of the Participants designed to recover all of the Authority's costs of acquiring, financing, operating and maintaining such Supplemental Bulk Power Supply as such costs are set forh in the Annual System Budget or any amended Annual System Budget adopted by the Au-thority pursuant to Section 202 hereof, and such costs shall include Annual Supplemental Costs as defined in Section 102 (c), hereof; and (b) The Authority shall bill the Participant each month during each Power Supply Year by providing the Participant with a Billing Statement according to the charges established pursuant to the provisions of *this Section 402, for the services supplied to the Participant by the Authority as set forth in Section 403 hereof, and for the costs incurred by the Authority as set forth in this Section 402, and such bill shall be paid by the Participant on or before the tenth day from the date thereof. Amounts due and not paid by the Participant on or before said day shall bear an additional charge of one and one-half percent per month until the amount due is paid in full. At the end of each Power Supply Year, adjustments of billings shall be made in accordance with the provisions of Section 209 hereof.

Section 403. Supplemental Bulk Power Supply Taken by the Participant; The Participant shall take all of its Supplemental Bulk Power Supply from the Authority and shall pay to the Authority the Participant's Proportionate Share of Annual Supplemental Costs set forth in the monthly Billing Statement submitted by the Authority to the Partici-pant.

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Section 404. Alternate Supplemental Bulk Power Supply Resources.

bulk power sup-If the Participant desires to procure an alternate source of supplemental may do so under the following ply other than that provided by the Authority, the Participant terms and conditions:

reduced, and.

(a) In no event will the Participant's Entitlement Share of the Project be Project Share of Annual the Participant will continue to be obligated to pay its Entitlement Costs; Authority for (b) The Participant will enter into an interconnection agreement with the the terms and condi-reserves, emergency, economy, scheduled and other interchange service, between tions of which will be similar to those contained in interconnection arrangements the Authority and others; and procure such (c) The Participant will give notice to the Authority of its intention to service equiv-from its obligation to provide alternate source which will relieve the Authority alent to such alternate source. Such notice will be at least the following:

total peak (1) Two years if such alternate source equals 20% or less of Participant's Share of the output and services demand less SEPA power and Participant's Entitlement of the generating facilities of the Project; than (2) Three years if such alternate sources equals more than 20%7 but not greater Participant's Entitlement 30% of Participant's total peak demand less SEPA power and Project; Share of the output and services of the generating facilities included in the than (3) Five years if such alternate source equals more than 307% but not greater Entitlement 407%of Participant's total peak demand less SEPA^ power and Participant's Share of the output and services of the generating facilities of the Project; than (4) Seven years if such alternate source equals more than 407 but not greater less SEPA power and Participant's Entitlement 60% of Participant's total peak demand Share of the output and services of the generating facilities of the Project; total (5) Nine years if such alternate source equals more than 60% of Participant's and Share of the output peak demand less SEPA power and Participant's Entitlement services of the generating facilities of the Project; agree to a notice Provided, however, that the Authority and the Participant may mutually imposed upon the burden or cost would be shorter than any of those provided above if no Authority as the result of such shorter notice.

Section 405. Interconnection Arrangements.

ar-The Authority and the Participant may mutually agree to enter into interconnection for service rangements for reserves, emergency, economy, scheduled and other interchange date of this effective generation and transmission facilities owned by the Participant on the with the arrangements shall not be inconsistent Contract, the terms and conditions of which provisions of this Contract.

ARTICLE V ADDITIONAL BONDS Section 501. Issuance of Additional Bonds.

with the (a) Additional Bonds may be sold and issued by the Authority in accordance the event, for any provisions of the Bond Resolution at any time and from time to time in 17

reason, the proceeds derived from the sale of the Bonds first validated pursuant to the pro-visions of the Act and of this Contract shall be insufficient for the purpose of completing the initial facilities of the Project and placing each facility thereof in Commercial Operation in-cluding the completion of those transmission system facilities to be acquired and constructed by the Authority prior to the Commercial Operation Date of the last of the generating facili-ties of the Project to be completed in order to meet the Authority's investment responsibility during such period in connection with any agreement for an integrated transmission system to which the Authority may be a party in accordance with the provisions of Section 302 hereof.

(b) Additional Bonds may be sold and issued by the Authority in accordance with the pro-visions of the Bond Resolution at any time and from time to time in the event funds are re-quired to pay the cost of (i) any major renewals, replacements, repairs, additions, better-ments, or improvements, to the Project necessary, in the opinion of the Consulting Engineer, to keep the Project in good operating condition or to prevent a loss of revenues therefrom, (ii) any major additions, improvements, repairs, or modifications to the Project, or any de-commissionings or disposals of the Project, required by any governmental agency having jurisdiction over the Project or for which the Authority shall be responsible.by virtue of any obligation of the Authority arising out of any contract to which the Authority may be a party relating to ownership of the Project or any facility thereof, or (iii) reload fuel for each gener-ation facility of the Project in any Power Supply Year to the extent that sufficient funds are not available in any reserves established by the Authority for Fuel Costs; provided however, that no such additional Bonds may be issued for the purpose of adding additional generating units to the Project.

(c) At such time as funds may be required to provide funds in excess of those provided from the sale of the Bonds first validated pursuant to the Act and this Contract to meet the Authority's investment responsibility in connection with the agreement to which the Authori-ty may be a party providing for an integrated transmission system, in accordance with the provisions of Section 302, hereof, the Authority may provide such funds as may be necessary therefor by the issuance of additional Bonds.

(d) Any such additional Bonds shall be secured by assignment of the payments to be made by the Participants pursuant to the provisions of Article III of the Power Sales Con-tracts, including payments required to be made under Article III of this Contract, and all oth-er payments attributable to the Project or to the Annual Project Costs to be made in accord-ance with or pursuant to any other provision of this Contract, and such other Power Sales Contracts, as such payments may be increased and extended by reason of the issuance of such additional Bonds, and such additional Bonds may be issued in amounts sufficient to pay the full amount of such costs and sufficient to provide such reserves as may be reasonably de-termined by the Authority to be desirable. Any such additional Bonds issued in accordance with the provisions of this Section 501 and secured by assignment of payments to be made in accordance with the provisions of this Section, may rank pari passu as to the security af-forded by the provisions of this Contract and of all other Power Sales Contracts between the Authority and the Participants relating to the Project and to the issuance of Bonds therefor with all Bonds theretofore issued pursuant to and secured in accordance with the provisions of this Contract.

Section 502. Issuance of Refunding Bonds.

In the event the Annual Project Costs to the Participants of electric power and energy from the Project may be reduced by the refunding of any of the Bonds then outstanding or in the event it shall otherwise be advantageous, in the opinion of the Authority, to refund any Bornds, the Authority may issue and sell refunding Bonds to be secured by assignment of the payments 18

to be made by the Participants pursuant to the provisions of Article III of the Power Sales Contracts, including payments required to be made under Article III of this Contract, and all other payments attributable to the Project or to the Annual Project Costs to be made in accor-dance with or pursuant to any other provision of this Contract and such other Power Sales Contracts. Any such refunding Bonds issued in accordance with the provisions of this Section and secured by assignment of such payments may rank pan passu as to the security afforded by the provisions of this Contract and of all other Power Sales Contracts between the Authority and the Participants relating to the Project and to the issuance of Bonds therefor with all bonds thereto-fore issued pursuant to and secured in accordance with the provisions of this Contract.

Section 503. Adjstrment of AnnualVProject Costs.

In the event the proceeds derived from the sale of any Bonds issued pursuant to the pro-visions of this Contract, the payment of which is secured by assignment of payments made pursuant to the provisions of this Contract and of all other Power Sales Contracts between the Authority and the Participants relating to the Project and to the issuance of Bonds there-for, exceed the aggregate amount required for the purposes for which such Bonds were is-sued, the amount of such excess shall be used to make up any deficiency then existing in any fund or account under the Bond Resolution in the manner therein provided, and any balance shall be used to retire, by purchase or call and redemption, Bonds in advance of maturity, and in such event the Authority will reduce such elements of Annual Project Costs as are necessary and appropriate to reflect such accelerated retirement.

ARTICLE YI DEFAULT Section 601. Event of Default.

Failure of the Participant to make to the Authority any of the payments for which pro-vision is made in this Contract shall constitute a default on the part of the Participant.

Section 602. Continuing Obligation, Right to Discontinue Service.

In the event of any such default, the Participant shall not be relieved of its liability for payment of the amounts in default, and the Authority shall have the right to recover from the Participant any amount in default. In enforcement of any such right of recovery, the Au-thority may bring any suit, action, or proceeding in law or in equity, including mandamus and action for specific performance as may be necessary or appropriate to enforce any covenant, agreement or obligation to make any payment for which provision is made in this Contract against the Participant, and the Authority may, upon sixty days written notice to the Par-ticipant, cease and discontinue providing all or any portion of the Participant's Bulk Power Supply.

Section 603. Levy of Tax for Payment.

In the event of such default by the Participant, the Participant shall provide for the as-sessment and collection of an annual tax sufficient in amount to provide funds annually to make all payments due under the provisions of this Contract in each year over the remainder of the life of this Contract and the Authority shall have the right to bring any suit, action, or proceeding in law or in equity, including mandamus and action for specific performance, to en-force the assessment and collection of a continuing direct annual tax upon all the taxable property within the boundaries of such Participant sufficient in amount to provide such funds annually in each year of the remainder of the life of this Contract.

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Section 604. Transfer of Power and Energy Pursuant to Default.

on a pro rata In the event of a default by a Participant, the Authority shall transfer, Participant's Entitle-basis to all other Participants which are not in default, the defaulting been discontinued by ment Share of the output and services of the Project which shall have Share of the default-reason of such default, and the pro rata portion of such Entitlement to the Entitlement be added ing Participant so transferred shall become a part of and shall shall be obligated Share of each such transferee Participant, and the transferee Participant Share of the Entitlement to pay for its Entitlement Share, increased as aforesaid, as if the Entitlement as the transferee Participant, increased as aforesaid, had been stated originallyAuthority, provided, the Share of the transferee Participant in its Power Sales Contract with Participant's Entitle-however, that in no event shall any transfer of any part of a defaulting output and services of ment Share result in an obligation of a transferee Participant to buyrecently established max-the Proj ect from the Authority in eccess of fif ty percent of the most provided, further, that imum annual hourly peak demand of such transferee Participant andshall be reduced to the the obligation of the defaulting Participant to pay the Authority of the defaulting extent that payments shall be received by the Authority for that portion Participant's Entitlement Share which may be transferred as aforesaid.

Section 605. Other Default by Participant.

or collect rates or In the event of a failure of the Participant to establish, maintain, to pay all amounts charges adequate to provide revenue sufficient to enable the Participant the Participant to the event of a failure of due to the Authority under this Contract or in the provisions of this take from the Authority its Bulk Power Supply in accordance with under any other covenant, agree-Contract, or in the event of any default by the Participant bring any suit, action, or proceeding ment or obligation of this Contract, the Authority may performance, as for specific in law or in equity, including mandamus, injunction and action or obligation of this may be necessary or appropriate to enforce any covenant, agreement Contract against the Participant.

Section 606. Default by Authority.

or obligation In the event of any default by the Authority under any covenant, agreement or in equity, in law of this Contract, the Participant may bring any suit, action, or proceeding be necessary or including mandamus, injunction, and action for specific performance as may against the appropriate to enforce any covenant, agreement, or obligation of this Contract Authority.

Section 607. Abandonment of Remedy.

discontinued or In case any proceeding taken on account of any default shall have been their former to abandoned for any reason, the parties to such proceedings shall be restored and duties of positions and rights hereunder, respectively, and all rights, remedies, powers, had been the Authority and the Participant shall continue as though no such proceedings taken.

ARTICLE VII MISCELLANEOUS GENERAL PROVISIONS Section 701. Character and Continuity of Service.

energy to (a) The Authority may temporarily interrupt or reduce deliveries of electric necessary reduction is the Participant if the Authority determines that such interruption or equipment in or make repairs to or replacements, in case of emergencies or in order to install 20

work on its generation or investigations, and inspections of or to perform other maintenance the Participant regarding transmission facilities and related apparatuses. After informing therefor, and stating the prob-any such planned interruption or reduction, giving the reason ability schedule such interruption able duration thereof, the Authority will to the best of its with the operations of the or reduction at a time -which will cause the least interference Participants.

liable for failure to provide, (b) The Authority shall not be required to provide, or be or curtailment of or inter-service under this Contract when such failure or the cessation or, with respect to the services ference with the service is caused by Uncontrollable isForces by the failure or refusal of any to be provided for Supplemental Bulk Power Supply, caused with the Authority or by the other bulk power supplier to enter into reasonable contracts approvals to enable the Au-inability of the Authority to obtain any required governmental thority to acquire or construct any facilities.

Section 702. Metering.

of meters and will pro-(a) The Authority reserves the right to provide for installation determining the quantity for vide or cause to be provided all necessary metering equipment delivered by the Authority under and conditions of the supply of electric power and energy at its own cost install additional this Contract; provided however that the Participant may The Participant shall supply metering equipment to provide a check on that of the Authority. the Authority's metering equip-without cost to the Authority a suitable place for installing ment.

found to be inaccurate, the Au-(b) If any meter used for billing fails to register or is to be repaired or replaced, and an thority shall repair or replace such meter or cause it the Authority based upon the best appropriate billing shall be made to the Participant by days, during which no metering oc-information available for the period, not exceeding sixty two percent above or below normal curred. Any meter tested and found to be not more than is concerned. If, as a result of shall be considered accurate insofar as correction of billings above or below normal, then any test, a meter is found to register in excess of two percent shall be corrected for the the reading of such meter previously taken for billing purposes but no correction shall be made period during which it is established the meter was inaccurate, an inaccuracy is discovered by for any period beyond sixty days prior to the date on which such test.

the Authority, the Authority (c) In addition to such tests as are deemed necessary by of the Participant and, if such shall have any meter tested at any time upon written request normal, the expense of such test meter proves accurate within two percent above or below shall be borne by the Participant.

of the time of any meter test (d) The Authority shall notify the Participant in advance so that a representative of the Participant may be present.

Section 703. Power Deliveries.

Contract shall be in the form Power and energy furnished to the Participant under this 60 Hertz.

of three phase current, alternating at a frequency of approximately Section 704. Liability of Parties.

and liability for the The Authority and the Participant shall assume full responsibility and each shall indemnify and save maintenance and operation of their respective properties of any and all damages, claims, harmless the other from all liability and expense on account 21

or actions, including injury to or death of persons arising from any act or accident in con-nection with the installation, presence, maintenance and operation of the property and equip-ment of the indemnifying party and not caused in whole or in part by the negligence of the other party; provided that any liability which is incurred by the Authority through the oper-ation and maintenance, of the Project and not covered, or not covered sufficiently, by insur-ance shall be paid solely from the revenues of the Authority, and any payments made by the Authority to satisfy such liability shall become part of the Annual System Budget.

Section 705. Other Terms and Conditions.

Service hereunder shall be in accordance with such other terms and conditions as are established as part of the Authority's service rules and regulations, which shall not be in-consistent with the provisions of this Contract.

Section 706. Assignment of Contract.

(a) This Contract shall inure to the benefit of and shall be binding upon the respective successors and assigns of the parties to this Contract; provided, however, that except as pro-vided in the event of a default, and, except for the assignment by the Authority authorized hereby, neither this Contract nor any interest herein shall be transferred or assigned by either party hereto except with the consent in writing of the other party hereto, provided, however, that such consent shall not be withheld unreasonably. No assignment or transfer of this Contract shall relieve the parties of any obligation hereunder.

(b) The Participant acknowledges and agrees that the Authority may assign and pledge to the Trustee and Co-Trustee designated in the Bond Resolution all its right, title, and in-terest in and to all payments to be made to the Authority under the provisions of Article DI of this Contract and all payments attributable to the Project or to the Annual Project Costs to be made in accordance with or pursuant to any other provision of this Contract as security for the payment of the principal (including sinking fund installments) of, and premium, if any, and interest on all the Bonds, and, upon the execution of such assignment and pledge, such Trustee shall have all rights and remedies herein provided to the Authority, and any reference herein to the Authority shall be deemed, with the necessary changes in detail, to include such Trustee which shall be a third party beneficiary of the covenants and agree-ments of the Participant herein contained.

Section 707. Termination or Amendment of Contract.

(a) This Contract shall not be terminated by either party under any circumstances, whether based upon the default of the other party under this Contract or any other instru-ment or otherwise except as specifically provided in this Contract.

(b) This Contract shall not be amended, modified, or otherwise altered in any manner that will adversely affect the security for the Bonds afforded by the provisions of this Con-tract covering the purchase and sale of power hereunder upon which the owners from time to time of the Bonds shall have relied as an inducement to purchase and hold the Bonds. So long as any of the Bonds are outstanding or until adequate provisions for the payment thereof have been made in accordance 'with the provisions of the Bond Resolution, this Contract shall not be amended, modified, or otherwise altered in any manner which will reduce the pay-ments pledged as security for the Bonds or extend the time of such payments provided here-in or which will in any manner impair or adversely affect the rights of the owners from time to time of the Bonds.

(c) None of the Power Sale Contracts may be amended as to any one or more Participants 22

so as to provide terms and conditions different from those herein contained except upon writ-ten notice to and written consent or waiver by each of the other Participants, and upon similar amendment being made to the Power Sales Contract of any other Participant requesting such amendment after receipt by such Participant of notice of such amendment.

ARTICLE VIII FUTURE PROJECTS UNDERTAKEN BY THE AUTHORITY Section 801. Future Projects.

The Authority may from time to time conduct studies and negotiations with respect to planning, designing, financing, constructing, administering, operating, and maintaining or otherwise acquiring future generation and transmission facilities or rights to the output thereof in addition to those contemplated for the Project, and may make recommendations to the Participant that such future facilities be undertaken by the Authority. If the Participant wishes to participate in and the Authority wishes to undertake any such future facilities, the Participant shall execute a contract therefor with the Authority.

Section 802. Future Participants.

It is expressly understood that nothing herein shall preclude other future participants from contracting with the Authority for planning, procuring, and providing such other fu-ture participants' bulk power supply, including participation in other projects undertaken by the Authority.

Section 803. Changes in Existing SEPA Arrangements.

The Authority may negotiate bulk power supply arrangements with the Southeastern Power Administration and the Georgia Power Company for changes in the currently existing contracts between the Participants and Southeastern Power Administration and between Geor-gia Power Company and Southeastern Power Administration which changes are for the ex-pressed purpose of lowering the Participants' overall bulk power supply costs by acquisition by the Participants of their full lawful allotments of Southeastern Power- Administration power. If such expressed purpose is achieved and the Authority wishes to undertake such arrangements, the Participant may execute a contract therefor with the Authority in which the Participant may assign its allotment of Southeastern Power Administration power to the Authority for delivery by the Authority to the Participant.

Section 804. Other SEPA Arrangements.

The Authority may negotiate other bulk power supply arrangements with the Southeast-ern Power Administration relating to other projects of the Southeastern Power Adninistra-tfon not now included in the currently existing contracts between the Participants and the Southeastern Power Administration for acquisition by the Participants of their full lawful allotment of such other projects. The Participant may assign its allotment of such other projects to the Authority for delivery by the Authority to the Participant.

Section 805. Allocation of Costs.

Until the Authority shall undertake a future project or until the provisions of Sections 803 or 804 hereof relating to SEPA arrangements are implemented, all operating and main-tenance costs related to the operating and conducting of the business of the Authority shall be treated as Annual Project Costs and, upon the undertaking by the Authority of a future project or upon implementation of the provisions of Sections 803 or 804 hereof, the Authori-23

ty shall allocate an appropriate share of its administrative and general expense to such future project and such arrangements under Section 803 and 804.

ARTICLE IX SEVERABILITY In case any one or more of the provisions of this Contract shall for any reason be held to be.illegal or invalid by a court of competent jurisdiction, it is the intention of each of the parties hereto that such illegality or invalidity shall not affect any other provision here-of, but this Contract shall be construed and enforced as if such illegal or invalid provision had not been contained herein, and this Contract shall be construed to adopt, but not to en-large upon, all the applicable provisions of said Act, and all the applicable provisions of the Constitution and general laws of Georgia, and, if any provisions hereof conflict with any applicable provision of said Constitution or laws, the latter as adopted by the legislature and as interpreted by the courts of this state shall prevail in lieu of any provision hereof in con-flict or not in harmony therewith.

IN WITNESS WHEREOF, the Municipal Electric Authority of Georgia has caused this Contract to be executed in its corporate name by its duly authorized officers and, by the execution hereof it is acknowledged that payments made under this Contract may be assigned, as provided in Section 706 (b) hereof, by the Authority to the Trustee and Co-Trustee to be designated in any Supplemental Bond Resolution as security for the payment of all Bonds of the Authority, as set forth in said Section 706(b) hereof, and the Authority has caused its corporate seal to be hereunto impressed and attested; the Participant has caused this Con-tract to be executed in its corporate name by its duly authorized officers and its corporate seal to be hereunto impressed and attested, and delivery hereof by the Authority to the Par-ticipant is hereby acknowledged, all as of the day and year first above written.

MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA BY: ....................................

CHAERMAN ATT: . ....................

SECRETAY-TEASURE BY: .................

MAYOR ATT: ...................................

CLERE:

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DESCRIPTION OF PROJECT Initial Facilities.

The initial facilities of the Project shall be the following:

I. Initial Electric Generation and Related Transmission Facilities Included In The Project.

(a) Plant'Hatch.

A seventeen and seven-tenths percent undivided interest in the two 807 MWe nominally rated nuclear generating units to be known as the Edwin I. Hatch Nuclear Units, Numbers One and Two, (individually designated as Hatch Unit No. 1 and Hatch Unit No. 2 and collectively designated as Plant Hatch) to be located near Baxley in Appling County, Georgia, including for such units (i) land delineated and described in the records of the Clerk of the Superior Court of Appling County, Georgia, in Plat Book 8, page 35, and in the records of the Clerk of the Superior Court of Toombs County, Georgia, in Plat Book 11, page 84, and all land rights pertaining thereto, (ii) the nuclear power reactors, the turbine-generators, the buildings housing the same, the associated auxiliaries and equipment, and the related transmission facilities all as more parti-cularly described in the Application, and amendments thereto, by the Georgia Power Company before the Atomic. Energy Commission in Docket Nos. 50-321 and 50-366 and the Preliminary Safety Analysis Report, and amendments thereto, which constitute a part of such Application, (iii) inventories of materials, supplies, fuel, tools and equipment for use in connection with Plant Hatch, and (iv) the Plant Hatch Railroad delineated and described in the records of the Clerk of the Superior Court of Appling County in Plat Book 8, pages 36, 37, and 38.

(b) Plant Vogtle.

A thirty percent undivided interest in the two 1150 MWe maximum rated nuclear generating units to be known as the Alvin W. Vogtle Nuclear Units, Numbers One and Two (individually designated as Vogtle Unit No. 1 and Vogtle Unit No. 2 and collectively designated as Plant Vogtle) to be located near Waynesboro in Burke County, Georgia, including for such units (i) land delineated and described in Georgia Power Company Map File M-8-3, to be recorded in the records of the Clerk of the Superior Court of Burke County, Georgia and all land rights pertain-ing thereto, (ii) the nuclear power reactors, the turbine-generators, the buildings housing the same, the associated auxiliaries and equipment, and the related transmission facilities all as more particularly described in the Application, and amendments thereto, by the Georgia Power Com-pany before the Atomic Energy Commission in Docket Nos. 50-424 and 50-425 and the Pre-liminary Safety Analysis Report, and amendments thereto, which constitutes a part of such Application, and (iii) inventories of materials, supplies, fuel, tools and equipments for use in connection with Plant Vogtle, provided, however, in the event for any reason Bonds are not issued for that portion of the Project designated as Plant Vogtle, the facilities described in this subparagraph (b) shall not be a part of the Project.

(c) Working Capital.

Working Capital required by the Authority during construction of the Project and for the placing of the Project in operation for providing Bulk Power Supply, including Supple-mental Bulk Power Supply, to all the Participants.

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In The Project.

II. Initial Transmission Facilities Included and constructed by the Authority during the Those transmission facilities to be acquired of the last of the generating facilities of the time prior to the Commercial Operation Date in investment responsibility during such time Project to be completed in order to meet its transmission system to which the Au-connection with any agreement for an integrated of Section 302 of the Contract.

the provisions thority may be a party in accordance with Additional Facilities.

be those additions and improvements to the The additional facilities of the Project shall facilities and to the transmission system facilities electric generation and related transmission and (iii) of Section 102 (s) of the Contract.

of the Project provided for in clauses (i), (ii)

SCHEDULE OF ENTITLEMENT SHARES.

OF THE OUTPUT AND SERVICES OF I. PARTICIPANTS' ENTITLEMIENT SHARES RELATED TRANS'MISSION FACILITtES)

THE GENEPRATING FACILITIES (INCLUDING INCLUDED IN THE PROJECT output and services of the generating facili-The Participants' Entitlement Shares of the of the Project, which Project includes a seven-ties (including related transmission facilities) in Plant Hatch and a thirty percent undivided teen and seven-tenths percent undivided interest particularly described in the Description of more interest in Plant Vogtle both of which are Authority in accordance with the provisions of Project, and of the services provided by the forth Participant be those Entitlement Shares set Section 303 of the Contract, shall for each in the following schedule:

Entitlem~ent Enti tlemnent Entitlement Share After Inritial Share After Share After Secrod Third Entitlement First Adjustment Share Ad1Jstment AdJastment Participant 91 0.644 0.618 0.614 0.610 ACWVORTH 1.162 1.157 1.413 1.220 ADEL 10.412 10.043 14.151 12.468 ALBANY 0.422 0.413 BARNESVILLE 0.558 0.469 0.969 0.836 0.809 BLAKELY 0.931 0.035 0.033 0.033 0.035 TOWN OF BRINSON 0.560 0.566 0.574 0.551 BUFORD 1.807' 1.772 CAIRO 1.318 1.680

-2.757 2.793 2.256 2.638 CALHOUN 1.104 1.086 1.149 1.202 CAINILLA 5.173 5.277 6.376 5.197 CARTERSVILLE

• 7.409 7.659 5.304 6.373 COLLEGE PARE: 0.645 0.637 0.760 0.692 CObDLERCE 2.677 2.595 2.658 2.667 COVINGTON 3.369 3.410 2.643 3.155 CRISP COUNTY 0.119 0.118 DOERUN 0.129 0.126 2.640 2.607 2.609 DOUGLAS 2.305 6.652 7.101 6.976 EAST POINT 7.662 1.347 1.350 ELBERTON 1.545 1.351 26

ELLAVILLE 0.247 0.268 0.298 0.306 FAIRBTURN 0.544 0.526 0.556 0.564 FITZGERALD 2.329 2.769 2.895 2.932 FORSYTH 0.932 0.879 0.967 0.988 FORT VALLEY 1.647 1.616 1.562 1.554 GRANTVILLE 0.090 0.089 0.083 0.082 GRIFFIN 3.600 3.080 2.954 2.932 HOGANSVILLE 0.331 0.308 0.296 0.294 JACKSON 0.542 0.517 0.499 0.496 LAFAYETTE 1.639 1.618 1.604 1.605 LA GRANGE 4.330 3.839 3.302 3.193 LAWRENCEVILLE 1.527 1.809 2.082 2.148 MANSFIELD 0.051 0.036 0.028 0.027 MARIETTA 10.551 11.519 12.448 12.683 MONROE 1.508 1.422 1.444 1.453 MONTICELLO 0.367 0.384 0.398 0.402 MOULTRIE 2.989 2.985 3.031 3.051 NEW[NAN 1.609 1.545 1.583 1.596 NORCROSS 0.583 0.733 0.820 0.841 PALMETTO 0.282 0.297 0.323 0.329 QUITMAN 0.747 0.765 0.652 0.630 SANDERSVILLE 0.887 0.813 0.778 0.775 SYLVANIA 1.757 2.639 3.042 3.099 SYLVESTER 0.944 0.887 0.954 0.973 THOMASTON 1.299 1.217 1.216 .1.220 THOMASVILLE 5.788 4.894 4.409 4.332 WASHINGTON 1.018 0.994 1.039 1.052 WEST POINT 0.561 0.544 0.444 0.424 WRIGHAM 0.086 0.109 0.121 0.124 TOTAL 100.000 100.000 100.000 100.000 The Initial Entitlement Share set forth above shall be the Entitlement Share for the period commencing with the Commercial Operation Date of Hatch Unit No. 1 and ending with the Commercial Operation Date of Hatch Unit No. 2 or December 31, 1978, whichever is the earlier.

The Entitlement Share After First Adjustment shall be the Entitlement Share for the period commencing with the Commercial Operation Date of Hatch Unit No. 2 or January 1, 1979, whichever is the earlier, and ending with the Commercial Operation Date of Vogtle Unit No. 1 or December 31, 1982, whichever is the earlier.

The Entitlement Share After Second Adjustment shall be the Entitlement Share for the period commencing with the Commercial Operation Date of Vogtle Unit No. 1 or January 1, 1983, whichever is the earlier, and ending with the Commercial Operation Date of Vogtle Unit No. 2 or December 31, 1983, whichever is the earlier.

The Entitlement Share After Third Adjustment shall be the Entitlement Share for the period commencing with the Commercial Operation Date of Vogtle Unit No. 2 or January 1, 1984, whichever is the earlier, and ending with the last day of the term of the Contract; 27

provided however, that in the event Plant Vogtle is not constructed, the Entitlement Share Aftei Second Adjustment and the Entitlement Share After Third Adjustment shall not be applicable, and the Entittement Share After First Adjustment shall apply for the period commencing with the Commercial Operation Date of Hatch Unit No. 2 or January 1, 197, whichever is the earlier, and ending with the last day of the term of the Contract; and provided further that the Authority, in accordance with the provisions of Section 311 of the Contract, will sell the output and sernces of such undivided interests in Plant Hatch and Plant Vogtle to Georgia Power Company in accordance with the following schedules:

(a) Hatch Unit No. I and Hatch Unit No. 2.

Percentage of Output and Serrices To be Sold to Power Supply Year Ga. Power Co.

That Portion of the Power Supply Year Remaining After the Commercial Operation Date of a Unit of the Project 50.0%

First Full Power Supply Year Following Commercial Operation Date 50.0%a Second Full Power Supply Year Following Commercial Operation Date 37.5%

Third Full Power Supply Year

.Following Commercial Operation Date 37.5%

Fourth Full Power Supply Year /

Following Commercial Operation Date 25.0 7%

Fifth Full Power Supply Year Following Commercial Operation Date 25.07%

Sihth Full Power Supply Year Following Commercial Operation Date 12.5%

Seventh Full Power Supply Year Following Commercial Operation Date 12.5%

28

(b) Vogtle Unit No. 1 and Vogtle Unit No. 2.

Percentage of Output and Services To be Sold to Power Supply Year Ga. Power Co.

That Portion of the Power Supply Year Remaining After the Commercial Operation

. 50.0%

Date of a Unit of the Project First Full Power Supply Year Following Commercial Operation Date .50.0%

Second Full Power Supply Year Following Commercial Operation Date 37.5%

Third Full Power Supply Year Following Commercial Operation Date 37.5%

Fourth Full Power Supply Year Following Commercial Operation Date 25.0%

Fifth Full Power Supply Year Following Commercial Operation Date 25.0 %

Sicth Full Power Supply Year Following Commercial Operation Date 12.5 %

Seventh Full Power Supply Year Following Commercial Operation Date 12.5%

services-Provided, however that for the purpose of determining the percentage of output and First Full Power Supply Year Following Commer-to be sold to Georgia Power Company, the year cial Operation Date, with respect to Vogtle Unit No. 1 shall be no later than the calendar and no later than the calendar year 1985, 1984 and with respect to Vogtle Unit No. 2 shall be available the percentage of output and services to be sold (when such output and services are upon for such sale) shall be taken from the foregoing schedule for the appropriate year based Date of Vogtle Unit No. 1 is no the conclusive presumption that the Comhmercial Operation 2 is no Date of Yogtle Unit No.

later than the year 1983 and that the Commercia Operation Geor-of such capacity sold to later than the year 1984, and provided, further, that the amount capacity gia Power Company shall not exceed 25 % of the Authority's ownership share of the of Vogtle Units Nos. 1 and 2 over the useful life of such units.

Par-It is understood that there shall not be any reduction in Entitlement Shares of the Power Company and each ticipants as a result of such sales of output and services to Georgia be such liability shall Participant shall remain liable for its full Entitlement Share except discharged to the extent the Authority receives payment from Georgia Power Company.

I. PARTICIPANTS' ENTITLEMENT SHARES OF SERVICES OF TRANSMISSION SYSTEM FACILITIES INCLUDED IN THE PROJECT.

The Participants' Entitlement Shares of Services of Transmission System Facilities included in accor-in the Project shall be determined by the Authority during each Power Supply Year dance with the provisions of Section 308 of the Contract.

29

AMENDMENT POWER SALES CONTRAC' Between GEORGIA MUNICIPAL ELECTRIC AUTHORITY OF and THE UNDERSIGNED PARTICIPANT into as of March 1, 1976, by and between This Amendment of Contract, made and entered public body corporate and politic and a public the Municipal Electric Authority of Georgia, a sometimes designated as the Authority, created corporation of the State of Georgia, hereinafter and the undersigned political subdivision by the provisions of I Ga. L. 1975, p. 107, as amended, as the Participant.

of the State of Georgia, hereinafter sometimes designated WITNESSETH THAT:

dated as of October 1, 1975, has been BE it remembered that a Power Sales Contract and the Participant, and previously executed by and between the Authority Contract in certain respects, WHEREAS, the parties desire to amend said NOW THEREFORE:

mutual covenants and agreements herein-For and in consideration of the premises and the hereto as follows:

after set forth, it is agreed by and between the parties as of March 1, 1976.

Section 1. Said Power Sales Contract shall be dated is deleted in its entirety and the following Section 2. Section 102 (1) (3) of said Contract new Section 102 (1) (3) is substituted in lieu thereof:

any generation facility of the Project and

"(3) acquisition of initial fuel or fuel inventory for capital and reserves for reload fuel and addi-working capital and reserves therefor and working tional fuel inventories."

by deleting the word "Output" in Section 3. Secti~on 102 (n) of said Contract is amended the fourth line thereof.

in its entirety and the following new Section 4. Section 102 (o) of said Contract is deleted Section 102 (o) is substituted in lieu thereof:

the Authority during any Power Supply

"(o) 'Fuel Costs' shall mean all costs incurred by fabrication, transportation, delivering, Year that are allocable to the acquisition, processing, and of fossil materials required for any of reprocessing, storage, and disposal of nuclear materials transfers to reserves established by the Authori-the generation facilities of the Project, including 1

I ty for such costs related to future Power Supply Years, less credits related to such costs applied as appropriate in the discretion of the Authority.

Section 5. Section 102 (s) of said Contract is deleted in its entirety and the following new Section 102 (s) is substituted in lieu thereof:

"(s) 'Project' shall mean those electric generation and related transmission facilities which are identified in the Description of Project and those transmission system facilities to which reference is made in the Description of Project to be acquired and constructed by the Authority during the time prior to the Commercial Operation Date of the last of the generating facilities of the Project to be completed in order to meet the Authority's investment responsibility during such time in connection with any agreement for an integrated transmission system to which the Authority may be a party in accordance with the provisions of Section 302 hereof, together with (i) any major renewals, replacements, repairs, additions, betterments and improvements neces-sary, in the opinion of the Consulting Engineer, to keep the Project in good operating condition or to prevent a loss of revenue therefrom, (ii) any major additions, improvements, repairs and modifications to the Project and any decommissionings or disposals of the Project, required by any governmental agency having jurisdiction over the Project or for which the Authority shall be responsible by virtue of any obligation of the Authority arising out of any contract to which the Authority may be a party relating to ownership of the Project or any facility thereof, and (iii) working capital required by the Authority during construction of the Project and for the. placing of the Project in operation for providing Bulk Power Supply, including Supplemental Bulk Power Supply, to the Participant."

Section 6. Section 401 of said Contract is deleted in its entirety and the following new Section 401 is substituted in lieu thereof:

"Section 401. The Authority will provide or cause to be provided to the Participant its Supplemental Bulk Power Supply during each month of each Power Supply Year. Such Supple-mental Bulk Power Supply may include, but shall not be limited to, partial and full requirements power purchases and unit power service, generating capacity reserve service, firm and nonfirm capacity and energy service, transmission service (including transmission service purchased by the Authority to supplement the Participant's Entitlement Share of transmission services provided by' the Authority from those transmission systems facilities included in the Project) and other interchange service made available as a result of transactions with other utilities. The costs to the Authority of electric power and energy purchased by the Authority from other utilities based upon tariffs filed by such other utilities with the Federal Power Commission will be directly reflected in the monthly Billing Statement to the Participant. Such monthly Billing Statement will include a credit for such delivery point transmission facilities as are owned, financed, or operated by the Participant."

Section 7. Section 501 (b) of said Contract is deleted in its entirety and the following new Section 501 (b) is substituted in lieu thereof:

"(b) Additional Bonds may be sold and issued by the Authority in accordance with the provisions of the Bond Resolution at any time and from time to time in the event funds are required to pay the cost of (i) any major renewals, replacements, repairs, additions, betterments, or improvements, to the Project necessary, in the opinion of the Consulting Engineer, to keep the Project in good operating condition or to prevent a loss of revenues therefrom, (ii) any major additions, improvements, repairs, or modifications to the Project, or any decommissionings or disposals of the Project, required by any governmental agency having jurisdiction over the Project 2

i - I or foe which the Authority shall be responsible by virtue of any obligation of the Authority arising out of any contract to which the Authority may be a party relating to ownership or the Project or axiy facility thereof, or (iii) reload fuel or additional fuel inventory for any generation facility of the Project in any Power Supply Year to the extent that sufficient funds are not available in any reserve established by the Authority for Fuel Costs; provided however, that no such additional Bonds may be issued for the purpose of adding additional generating units to the Project.

Section 8. Section 501 (c) is deleted in the its entirety, and Section 501 (d) is renumbered Section 501 (c).

Section 9. The -attachment to said Contract entitled "Description of Project" and "Schedule of Entitlement Shares" consisting of five pages is deleted in its entirety and the Description of Project and Schedule of Entitlement Shares attached hereto is substituted in lieu thereof.

Section 10. Said Contract shall remain in full force and effect except as herein amended.

IN WITNESS WHEREOF, The Municipal Electric Authority of Georgia and the Participant have caused this Amendment of Contract to be executed in their corporate names by their duly authorized officers and their corporate seals to be hereunto impressed and attested, all as of the day and year first above written.

MUNICIPAL ELECTRIC AUTORITY BY: .....

/ CHAIR?~

ATT: .........

TARY-TREASURER CITY OF BY:

CIF7 / f -  ?* AYOR / }

CLERK -

LY THIS PAGE INTENTIONALLY LEFT BLANK.

4

DESCRIPTION OF PROJECT Initial Facilities.

The initial facilities of the Project shall be the following:

.I. Initial Electric Generation and Related Transmission Facilities Included In The Project.

(a) Plant Hatch.

A seventeen and seven-tenths percent undivided interest in the two 807 MWe nominally rated nuclear generating units to be known as the Edwin I. Hatch Nuclear Units, Numbers One and Two, (individually designated as Hatch Unit No. 1 and Hatch-Unit No. 2 and collectively designated as Plant Hatch) to be located near Baxley in Appling County, Georgia, including for such units (i) land delineated and described in the records of the Clerk of the Superior Court of Appling County, Georgia, in Plat Book 8, page 35, and in the records of the Clerk of the Superior Court of Toombs County, Georgia, in Plat Book 11, page 84, and all land rights pertaining thereto, (ii) the nuclear power reactors, the turbine-generators, the buildings housing the same, the associated auxiliaries and equipment, and the related transmission facilities all as more parti-cularly described in the Application, and amendments thereto, by the Georgia Power Company before the Atomic Energy Commission in Docket Nos. 50-321 and 50-366 and the Preliminary Safety Analysis Report, and amendments thereto, which constitute a part of such Application, (iii) inventories of materials, supplies, fuel, tools and equipment for use in connection with Plant Hatch, and (iv) the Plant Hatch Railroad delineated and described in the records of the Clerk of the Superior Court of Appling County in Plat Book 8, pages 36, 37, and 38; provided, however, the Authority shall have the right and power to sell to any one or more of the political subdivi-sions listed in the following Schedule of Entitlement Shares which shall not execute a Power Sales Contract with the Authority such portion of its undivided interest in Plant Hatch as the Authority shall be lawfully obligated by virture of any contractual obligation of the Authority to sell to such political subdivisions to satisfy the license conditions pertaining to Plant Hatch.

(b) Plant Vogtle.

A seventeen and seven-tenths percent undivided interest in the two 1150 MWe maximum rated nuclear generating units to be known as the Alvin W. Vogtle Nuclear Units, Numbers One and Two, (individually designated as Vogtle Unit No. 1 and Vogtle Unit No. 2 and collectively designated as Plant Vogtle) to be located near Waynesboro in Burke County, Georgia, including for such units (i) land delineated and described in Georgia Power Company Map File M-S-15 dated March 15, 1976, to be recorded in the records of the Clerk of the Superior Court of Burke County, Georgia and all land rights pertaining thereto, (ii) the nuclear power reactors, the turbine-generators, the buildings housing the same, the associated auxiliaries and equipment, and the related transmission facilities all as more particularly described in the Application, and amendments thereto, by the Georgia Power Company before the Atomic Energy Commission in Docket Nos. 50-424 and 50-428 and the Preliminary Safety Analysis Report, and amendments thereto, which constitutes a part of such Application, and (iii) inventories of materials, supplies, fuel. tools and equipments for use in connection with Plant Vogtle, provided, however, in the event for any reason Bonds are not issued for that portion of the Project designated as Plant Vogtle, the facilities described in this subparagraph (b) shall not be a part of the Project.

(c) Plant Wansley.

A ten percent undivided interest in the two 865 MW nominally rated coal-fired generating 5

units to be known as the Hal Wansley Steam Plant Units, Numbers One and Two, (individually designated as Wansley Unit No. 1 and Wansley Unit No. 2 and collectively designated as Plant Wansley) to be located near Centralhatchee in Heard and Carroll Counties, Georgia, including for such units (i) land delineated and described in Georgia Power Cbmpany Map File K-S-1 dated June 5, 1972, to be recorded in the records of the Clerks of Superior Courts of Heard and Carroll Counties, Georgia, and all land rights pertaining thereto, (ii) the turbine-generators, the boilers, the buildings housing the same, the stack, the cooling facilities, the associated auxiliaries and equipment, and the related transmission facilities all as more particularly described in the en-vironmental impact statement relating to Plant Wansley, and (iii) inventories of materials, sup-plies, fuel, tools and equipment for use in connection with Plant Wansley, provided, however, in the event for any reason Bonds are not issued for that portion of the Project designated as Plant Wansley, the facilities described in this subparagraph (c) shall not be a part of the Project.

(d) Plant Scherer.

A ten percent undivided interest in the four 810 MW nominally rated coal-fired generating units to be known as the Robert W. Scherer Steam Plant Units, Numbers One, Two, Three, and Four, (individually designated as Scherer Unit No. 1, Scherer Unit No. 2, Scherer Unit No. 3, and

- Scherer Unit No. 4 and collectively designated as Plant Scherer) to be located near Forsyth in Monroe County, Georgia, including for such units (i) land delineated and described in Georgia Power Company Map File N-85-9 dated December 19, 1974, containing approximately twenty-seven hundred acres, together with such additional land of approximately ten thousand acres acquired or to be acquired for use in connection with Plant Scherer, to be recorded in the records of the Clerk of Superior Court of Monroe County, Georgia and all land rights pertaining thereto, (ii) the turbine-generators, the boilers, the buildings housing the same, the stacks, the cooling facilities, the associated auxiliaries and equipment, and the related transmission facilities all as more particularly described in the environmental impact statement relating to Plant Scherer, and (iii) inventories of materials, supplies, fuel, tools and equipment for use in connection with Plant Scherer, provided, however, in the event for any reason Bonds are not issued for that portion of the Project designated as Plant Scherer, the facilities described in this subparagraph (d) shall not be a part of the Project.

(e) Working Capital.

Workizig Capital required by the Authority during construction of the Project and for the placing of the Project in operation for providing Bulk Power Supply, including Supplemental Bulk Power Supply, to all the Participants.

II. Initial Transmission Facilities Included In The Project.

Those transmission facilities to be acquired and constructed by the Authority during the time prior to the Commercial Operation Date of the last of the generating facilities of the Project to be completed in order to meet its investment responsibility during such time in connection with any agreement for an integrated transmission system to which the Authority may be a party in accordance with the provisions of Section 302 of the Contract.

Additional facilities.

The additional facilities of the Project shall be those additions and improvements to the electric generation and related transmission facilities and to the transmission system facilities of the Project provided for in clauses (i), and (ii) of Section 102(s) of the Contract.

6

SCHEDULE OF ENTITLEMENT SHARES.

I. PARTICIPANTS' ENTITLEMENT SHARES OF THE OUTPUT AND SERVICES OF THE GENERATING FACILITIES (INCLUDIWG RELATED TRANSMISSION FACILITIES)

INCLUDED IN THE PROJECT The Participants' Entitlement Shares of the output and services of the generating facilities (including related transmission facilities) of the Project, and of the services provided by the Authority in accordance with the provisions of Section 303 of the Contract, shall for each Participant be those Entitlement Shares set forth in the following schedule; provided, however, that in no event shall the Entitlement share of any Participant be less than that set forth in the following schedule and provided, further, that in the event any one or more of the political subdivisions listed in the following schedule shall not execute a Power Sales Contract with the Authority, the Entitlement Shares of the remaining Part icipants, as such Entitlement Shares are set forth in each column of the following schedule, may be increased pro rata by an amount not exceeding fifteen percent of such Entitlement Shares in order that the sum of the remaining Entitlement Shares in each of the following columns when so adiusted shall total 100.000%:

Entitlement Entitlement Entitlement Initial Share After Share After Share After Entitlement First Second Third Participant Share Adjustment Adjustment Adjustment ACWORTH 0.610 0.644 0.618 0.614 ADEL 1.413 1.220 1.162 1.157 ALBANY 14.151 12.468 10.412 10.043 BARNES VILLE 0.558 0.469 0.422 0.413 BLAKELY 0.931 0.969 0.836 0.809 TOWN OF BRINSON 0.035 0.035 0.033 0.033 BUFORD 0.574 0.551 0.560 0.566 CAIRO 1.318 1.680 1.807 1.772 CALHOUN 2.256 2.638 2.767 2.793 CAIMIILLA 1.149 1.202 1.104 1.086 CARTERS VILLE 5.277 5.376 5.197 5.173 COLLEGE PARK 6.304 6.373 7.409 7.659 COafMERCE 0.760 0.692 0.645 0.637 COVINGTON 2.695 2.658 2.667 2.677 CRISP COUNTY 2.643 3.155 3.369 8.410 DOERUN 0.129 0.126 0.119 0.118 DOUGLAS 2.305 2.640 2.607 2.609 EAST POINT 7.662 6.652 7.101 6.976 ELBERTON 1.645 1.351 1.347 1.350 ELLAVILLE 0.247 0.268 0.298 0.306 FAIRBURN 0.544 0.526 0.556 0.564 FITZGERALD 2.329 2.769 2.895 2.932 FORSYTH 0.932 0.879 0.967 0.988 FORT VALLEY 1.647 1.616 1.562 1.554 GRANTVILLE 0.090 0.089 0.083 0.082 GRIFFIN 3.600 3.080 2.954 2.932 HOGANSVILLE 0.331 0.308 0.296 0.294 7

JACKSON 0.542 0.517 0.499 0.496 LAFAYETTE 1.639 1.618 1.604 1.605 LA GRANGE 4.330 3.839 3.302 3.193 LAWRENCEVILLE 1.527 1.809 2.082 2.148 MANSFIELD 0.051 0.036 0.028 0.027 MARIETTA 10.551 11.519 12.448 12.683 MONROE 1.508 1.422 1.444 1.453 MONTICELLO 0.367 0.384 0.398 0.402 MOULTRIE 2.989 2.985 3.031 3.051 NEWNAN 1.609 1.545 1.583 1.596 NORCROSS 0.583 0.733 0.820 0.841 PALMETTO 0.282 0.297 0.323 0.329 QUITMAN 0.747 0.765 0.652 0.630 SANDERSVILLE 0.887 0.813 0.778 0.775 SYLVANIA 1.757 2.639 3.042 3.099 SYLVESTER 0.944 0.887 0.954 0.973 THOMASTON 1.299 1.217 1.216 1.220 THOMASVILLE 5.788 4.894 4.409 4.332 WASHINGTON 1.018 0.994 1.039 1.052 WEST POINT 0.561 0.544 0.444 0.424 WEIGHAM 0.086 0.109 0.121 0.124 TOTAL 100.000 100.000 100.000 100.000 The Initial Entitlement Share set forth above shall be the Entitlement Share for the period commencing with the Commercial Operation Date of Hatch Unit No. 1 and ending December 31, 1978.

The Entitlement Share After First Adjustment shall be the Entitlement Share for the period commencing January 1, 1979, and ending December 31, 1982.

The Entitlement Share After Second Adjustment shall be the Entitlement Share for the period commencing January 1, 1983, and ending December 31, 1983.

The Entitlement Share After Third Adjustment shall be the Entitlement Share for the period commencing January 1, 1984, and ending with the last day of the term of the Contract.

The Authority, in accordance with the provisions of Section 311 of the Contract, will sell a portion of the output and services of such undivided interests in Plant Hatch, Plant Vogtle, Plant Wansley, and Plant Scherer to Georgia Power Company in accordance with the following schedule:

8

Perentage of output anid Services To be Sold to Ga. Power Co.

Power Supply Year That Portion of the Power Supply Year Remaining After the Commercial Operation 50.00%

Date of a Unit of the Project First Full Power Supply Year 60.0%

Following Commercial Operation Date Second Full Power SupplY Year 37.5%9 Following Commercial Operation Date Third Full Power Supply Year 37.5%

Following Commercial Operation Date Fourth Full Power Supply Year 25.0%o Following Commercial Operation Date Fifth Full Power Supply Year 25.0%

Following Commercial Operation Date Sicth Full Power Supply Year 12.57o Following Commercial Operation Date Seventh Full Power Supply Year 12.5%7 Following Commercial Operation Date of the Participants as a result of such There shall not be any reduction in Entitlement Shares and each Participant shall remain liable sales of output and services to Georgia Power Companybe discharged to the extent the Authority shall for its full Entitlement Share except such liability receives payment from Georgia Power Company.

SERVICES OF TRANSMISSION II. PARTICIPANTS' ENTITLEMENT SHARES OF SYSTEM FACILITIES INCLUDED IN THE PROJECT.

Transmission System Facilities included The Participants' Entitlement Shares of Service of during each Power Supply Year in ac-in the Project shall be determined by the Authority Contract.

cordance with the provisions of Section 308 of the 9

SECOND AMENDMENT PONVER SALES CONTRACT Between MUNICIPAI. ELECTRIC AUTHORITY OF GEORGIA and THE UNDERSIGNED PARTiCIPANT 1977, by and behveen the This Second .kAnclnlellnt of Cuntract, made andlntcred into as of May 25, and politic and a public corporation of Muneipal Electric Authority of Georgia, a public body corporatc created by the provisions of I Ga.

thc State of Georgia, hereinafter somet;mes designated as the Authority, the State of Georria. hereinafter I.. 197>5, p. 107, as amendcd, and the undersigned politieal sailidivision of

.<nmctimes designated as the Participant.

NVITTN ESSETH:

THAT:

dated as of March 1, 1976, 13E it rcmenibered that a Power Sales Cuntr.lct and an Amendcment. both Participant. and havc. been previously cxccuted by and between the Authority and the certain respects.

NVIlEREAS, the parties desire to amend said Ctntract in NOW THEREFORE:

agreements hereinafter set For and in consideration of the premises and tle mutual covenants and and between the parties hereto forth, the sufficiency of which is hereby acknowledged, it is agreed by as follows:

Share' is defined Section 1. Subsection 102(r) of said Power Sales Contract wherein "Proportionate is hereby deleted in its entirety.

the following new Section Section 2. Section 403 of said Contract is hercbv deleted in its entirety and 403 is substituted in lieu thereof:

The Participant shall ta'ke

-Section 403. Supplcrnmntal BulBk Power Supply Taken By Participant.

pay to the Authoriht its all of its Supplemental Bulk Power Supply from the Authority and shall nmonth' Billing Statement as share of Annual Supplemental Costs set forth in the Participant's submitted by the IN, and determined in accordance with the foregoing provisions of this Article Authority to the Participant.'

as of the time of the Mlay, 1977, Section 3. Said Amendment shall be effective for each Participant from working capital for the meter readings. The Authority is, however. authorized to make adjustments to off-set the amount by which the period fron February 7, 1977, to the effective date of this Amendment what the total of such billings would total of any Participant's actual billings during such period exceeded power supply development.

have been under the WVR-9 rate, said adjustments to bel a cost of effect as herein amended.

Section 4. Said Conbact shall remain in full force and I

-, .. .. .. -- 1. .--- - - - - I -- - .. -, ,- I ;: -'.14 SIMA -. .

. Y ': 11 i;L the Participant have lcctic Authority of Geotri;i anld WTE;FOF, Thc bflfunlcEpa by their duly be executed ill their corporate names IN WITNESS Second Amendment of Contract to all of the day and caused this to be hereunto impremssd and attested, sels autorized offices and their corporatC _

year first above written.

tr MUNICIPAL ELECTRIC AUTH__I L GE;ORGIA BY:

ATT:

~I' BY:

C6/t

I S THIRD AMENDMENT POWER SALES CONTRACT BETWEEN MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA AND THE UNDERSIGNED PARTICIPANT into as of February 1, 1978, by and between the This Third Amendment of Contract, made and entered of the body corporate and politic and a public corporation Municipal Electric Authority of Georgia, a public L. 1975, as the Authority, created by the provisions of I Ga.

State of Georgia, hereinafter sometimes designated hereinafter sometimes subdivision of the State of Georgia,

p. 107, as amended, and the undersigned political designated as the Participant.

WITNES SETH:

THAT:

and a an Amendment, both dated as of March 1, 1976, BE it remembered that a Power Sales Contract and the Authority and been previously executed by and between Second Amendmcnt dated as of May 25, 1977, had the Participant, and projects may be undertaken by the Authority to pro-WHEREAS, said Contract contemplates that additional and it is now deemed feasible and desirable by the vide a portion of the Participant's bulk power requirements, a portion of acquire additional generating capacity to provide Participant and the Authority that the Authority said requirements, and date into a Project Two Power Sales Contract of even WHEREAS, the Participant has determined to enter pay the costs of ac-Authority to issue its revenue bonds to herewith with the Authority in order to enable the output and related below and to enable Participant to receive quiring and constructing Project Two referred to services from Project Two, and Bond the said Power Sales Contract, consistent with the WHEREAS, it is necessary and desirable to amend a combined and charges, if desirable, to recover costs on Resolution, to enable the Authority to establish rates projects output supplied from Project Two and any~ future basis for Supplemental BuLk Power Supply and the with to enable the Authority to make additional transactions for which Participant may execute a contract; and respect to the output and services of the Project thereunder.

NOW THEREFORE:

covenants and agreements hereinafter set forth, the For and in consideration of the premises and the mutual by and between the parties hereto as follows:

sufficiency of which is hereby acknowledged, it is agreed I

at the end of Section Section 1. The Power Sales Contract, as amended, is hereby further amended by adding 102 the following definitions:

interests A (x) "Project Two" shall mean the Authority's second project consisting of additional undivided agreement with Georgia Power Compaiy dated as in Plants Wansley and Scherer acquired pursuant to an option Sales in Section 102(s) of the Project Two Power of August 27, 1976, as amended, which project is described Contract.

of the date hereof be-(y) "Project Two Power Sales Contract" shall mean that certain Contract dated as from time to time, relating to the provision tween the Authority and the Participant as the same may be amended of output and related services from Project Two to the Participant.

Section 401 in its Section 2. The Power Sales Contract, as amended, is hereby further amended by deleting entirety and substituting in lieu thereof the following new Section 401:

"Section 401. Supplemental Bulk Power Supply Provided by the Authority.

Bulk Power The Authority will provide or cause to be provided to the Participant its Supplemental Supply may in-Supply during each month of.each Power Supply Year. Such Supplemental Bulk Power and unit power clude, but shall not be limited to, partial and full requirements firm power purchases, transmission service, firm and non-firm capacity and energy service, transmission service (including the Participant's Entitlement Share of transmission service purchased by the Authority to supplement system facilities included in the Project) and services provided by the Authority from those transmission other interchange service made available as a result of transactions with other utilities.

Section 402 in its Section 3. The Power Sales Contract, is amended, is hereby further amended by deleting entirety and substituting in lieu thereof the following new Section 402:

"Section 402. Rates and Charges for Supplemental Bulk Power Supply.

costs of ary (a) The Authority may combine the Annual Supplemnental Costs with the annual the Participant has future project undertaken by the Authority, including Project Two, for which rates and executed a contract for the output and related services thereof, for the purpose of establishing separate rates and charges, or the Authority may establish for any of such costs, or combination thereof, of Section charges, at the discretion of the Authority, in either case in accordance with the provisions 402 (b)hereof.

charges which (b) The Authority will establish and maintain fair and nondiscriminatory rates and Costs, will provide revenues that are sufficient, but only sufficient, to pay the Annual Supplemental by the whether or not such Costs are combined with the annual costs of any future projects undertaken executed a con-Authority, including Project Two, for output and services of which the Participant has tract.

Year by provid-(c) The Authority shall bill the Participant each month during each Power Supply in accordance with the rates and charges ing the Participant with a Billing Statement for such month 402 for its Supplemental Bulk Power established pursuant to the foregoing provisions of this Section for such delivery point transmission Supply. Such monthly Billing Statement will include a credit shall be paid by facilities as are owned, financed or operated by the Participant. Such Billing Statement due and not paid by the the Participant on or before the tenth day from the date of such bill. Amounts percent one-half (1-1/2%)

Participant on or before said date shall bear an additional charge of one and in full. At the end of each per month for each month, or fraction thereof, until the amount due is paid of Section Power Supply Year, adjustments of billings shall be made in accordance with the provisions 209 hereof. 402 (a) hereof (d) In the event that the Authority establishes rates and charges pursuant to Section any future projects to recover, on a combined basis, Annual Supplemental Costs and annual costs of which the Partici-undertaken by the Authority, including Project Two, for the output and services of submitted by the pant has executed a contract, the Authority will Identify on the Billing Statement revenues to be re-Authority to the Participant pursuant to Section 402 (c) hereof that amount of the allocable to the ceived by the Authority from the Participant pursuant to such rates and charges that is to be received by payment of monthly Annual Supplemental Costs. Such amount shall be the revenues 2

the Authority to the payment Of Cost3 Of any such the Authority from the Participant not allocated by to such projiecu.

future project pursuant to the contracts relating further amended by renumbering prefnt Section Sectio 4. The Power Saes Contract, as amended, is hertby to read as follows:

111 to Sction 31 (a), and adding a new Section 31 l(b)

Partici-exchange electric capacity 2nd energy from the

-(b)The Authority may also utilize, sell, and transaction can reasonably pant's Entidement Shato of Project One, whenever, in its discretion, any such overall Bulk Power Supply t; the Participants.

be expected to mxzt in a more reliable or economical in shall, to the extent practicable, be estimated The intifpsted proceeds from such sales or transactions received by the Authority as a result of such actually the Annu2l Syem Budget and any net revenues tne Entitlement Share of Annuzl Project Costs under trMnatifix h6a be cNdIted to the Participant's rower Sakl Contract" effect as herein amended.

xtion 5. Salid Contract shall cnhiin In full force and this Authority of Georgia and the Participant have caused IN W1TESS WHEREOF, The Munrcpal Uoctric and Amendmt of Contract to be executed ti their corporate names by their duly authorized officers

.tlrd atttstcd, all of the day- and year first above written.

ar corporatu seal to be heanunto fmprewd and MUNICIPAL ELECTRIC AUTHIORITY OF GEOR;GIA BY

SecretaryTre aurer CITY OF ADELJ

,j _ _

BY:

AT! Cle Clerk

\ ./

FOURTH AMENDMENT POWER SALES CONTRACT BETWEEN MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA AND THE UNDERSIGNED PARTICIPANT This Fourth Amendment of Contract, made and entered into as of May 1, 1980, by and between the Municipal Electric Authority of Georgia, a public body corporate and politic and a public corporation of the State of Georgia, hereinafter sometimes designated as the Authority, created by the provisions of I Ga. L. 1975, p. 107, as amended, and the undersigned political subdivision of the State of Georgia, hereinafter sometimes designated as the Partici-pant.

W I T N E S S E T H:

THAT:

BE it remembered that a Power Sales Contract and an Amendment, both dated as of March 1, 1976, a Second Amendment dated as of May 25, 1977, and a Third Amendment dated February 1, 1978, have been previously executed by and between the Authority and the Participant, and WHEREAS, the Participant and the Authority have determined that it is in their best interests to sell the Authority's interests in Scherer Units Three and Four in each of Project One and Project Two and to acquire additional generating capacity substantially equal to the interests so sold in accordance with the provisions of the Project Three Power Sales Contract entered into by the Participant and the Authority as of the date of this Amendment; and WHEREAS, it is necessary and desirable to amend the said Power Sales Contract, con-sistent with the Bond Resolution, to (i) redefine the Project so as to exclude the interests in Scherer Units Three and Four which are to be disposed of by the Authority, and (ii) to revise the schedule of sales of output and services from Scherer Units One and Two.

NOW THEREFORE:

For and in consideration of the premises and the mutual covenants and agreements here-inafter set forth, the sufficiency of which is hereby acknowledged, it is agreed by and between the parties hereto as follows:

Section 1. The attachment to the Power Sales Contract entitled "DESCRIPTION OF PROJECT", as amended, is hereby further amended by deleting section I (d) in its entirety and substituting in lieu thereof the following section I(d):

"(d) Plant Scherer.

A ten percent undivided interest in the two 810 MW nominally rated coal-fired generating units to be known as the Robert W. Scherer Steam Plant Units, Numbers One and Two (in-dividually designated as Scherer Unit No. One and Scherer Unit No. Two) to be located near Forsyth in Monroe County, Georgia, including for such units (i) land delineated and de-scribed in Georgia Power Company Map File N-85-9 dated December 19, 1974, containing 1

approximately twenty-seven hundred acres, together with such additional land of approxi-mately ten thousand acres acquired or to be acquired for use in connection with Plant Scherer, to be recorded in the records of the Clerk of Superior Court of Monroe County, Georgia and all land rights pertaining thereto, (ii) the turbine-generators, the boilers, the buildings housing the same, the stacks, the cooling facilities, the associated auxiliaries and equipment, and the related transmission facilities all as more particularly described in the environmental impact statement relating to Plant Scherer, (iii) inventories of materials, supplies, fuel, tools and equipment for use in connection with Plant Scherer, and (iv) an amount equal to 5.0 percent of the common facilities of Plant Scherer."

Section 2. The attachment to the Power Sales Contract entitled "SCHEDULE OF EN-TITLEMENT SHARES", as amended, is hereby further amended by deleting Plant Scherer from the schedule of sales of output and services to Georgia Power Company, and adding a new schedule of sales of output and services to Georgia Power Company from Scherer Units One and Two as follows:

"The Authority, in accordance with the provisions of Section 311 of the Contract, intends to sell a portion of the output and services of the Project to Georgia Power Company in ac-cordance with the following schedule:

Percentage of Output and Services To be Sold to Georgia Power Power SuDinly Year Company That Portion of the Power Supply Year Remaining After the Commercial Operation Date of Scherer Units One or Two 100.0%

First Full Power Supply Year Following Commercial Operation Date 90.0%

Second Full Power Supply Year Following Commercial Operation Date 80.0%

Third Full Power Supply Year Following Commercial Operation Date 70.0%

Fourth Full Power Supply Year Following Commercial Operation Date 60.0%

Fifth Full Power Supply Year Following Commercial Operation Date 50.0%

Sixth Full Power Supply Year Following Commercial Operation Date 40.07 Seventh Full Power Supply Year Following Commercial Operation Date 30.0%O Eighth Full Power Supply Year Following Commercial Operation Date 20.0%o Ninth Full Power Supply Year Following Commercial Option Date 10.0%

The Authority may, in its discretion, establish conclusive commercial operation dates for units of the Project for the purpose of the foregoing schedule and such dates may be dif-ferent from those Commercial Operation Dates established in accordance with Section 102(i) of the Contract. The establishment of the foregoing schedule is not intended to limit the power of the Authority granted in Section 311 to sell and exchange power and energy from the Project."

2

IN WITN`ES3 WHEREOF, Thq Municipal Electric Authority of Georgia and the Partici-pant have caused this Fourth Amendment of Contract to be executed in their corporate narmes by their duly authorized officers and their corporate seals to be hereunto impressed and at-tested, all of the day and year first above written, MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA BY: 5 f Chairman SecretaryTreasurer

FIFTH AMENDMENT POWER SALES CONTRACT BETWEEN MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA AND THE UNDERSIGNED PARTICIPANT This Fifth Amendment of Contract, made and entered into as of November 16, 1983, by and between the Municipal Electric Authority of Georgia, a public body corporate and politic and a public corporation of the State of Georgia, hereinafter sometimes designated as the Authority, created by the provisions of I Ga. L. 1975, p. 107, as amended (Title 46-3-110 O.C.G.A.), and the undersigned political subdivision of the State of Georgia, hereinafter sometimes designated as the Participant.

WITNESSETH:

BE it remembered that a Power Sales Contract and an Amendment, both dated as of March 1, 1976, a Second Amendment dated as of May 25, 1977, a Third Amendment dated February 1, 1978, and a Fourth Amendment dated May 1, 1980, have been previously executed by and between the Authority and the Participant; and WHEREAS, the Participant and the Authority have determined that it is in their best interests that the Authority undertake a fourth project in accordance with the provisions of the Project Four Power Sales Contract entered into by the Participant and the Authority as of the date of this Amend-ment, which is reasonably expected to result in a more economical overall Bulk Power Supply to the Participant and other political subdivisions contracting with the Authority therefore by making the output and related services of Project Four available to the Participant, and by enabling the Authority to rearrange certain sales of the output of the Project and Project Four to other utilities which is intended to improve substantially the matching of the output of both the Project and Project Four to the Participant's Bulk Power Supply requirements; and WHEREAS, it is necessary and desirable to amend the said Power Sales Contract, consistent with the Bond Resolution, so as to revise the schedule of sales of output and services from Vogtle Unit No. 1 and Vogtle Unit No. 2.

NOW THEREFORE For and in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged, it is agreed by and between the parties hereto that said Contract is further amended as follows:

Section 1. The attachment to the Power Sales Contract entitled "SCHEDULE OF ENTITLE-MENT SHARES", as amended, is hereby further amended by deleting the reference to Plant Vogtle from the schedule of sales of output and services to Georgia Power Company, and adding a new schedule of sales of output and services to Georgia Power Company from Plant Vogtle as follows:

"The Authority, in accordance with the provisions of Section 311 of the Power Sales Contract, as amended, and subject to the provisions of the Alvin W. Vogtle Nuclear Units Numbers One and Two Purchase, Amendment, Assignment and Assumption Agreement, dated as of November 16, 1983, between Georgia Power Company and the Authority, intends to sell a portion of the output and services of its Project One ownership entitlement in Vogtle Units Numbers One and Two to Georgia Power Company in accordance with the following schedule:

1

the Authority's Project One ownership entitle-

"A. As to 77.966% of the output associated with such sales shall be as follows:

ment in Vogtle Units Numbers One and Two, Percentage of Output and Services To Be Sold To Georgia Power Company Power Supply Year That Portion of the Power Supply Year Remiaining After the Commercial Operation 50.0%

Date of a Unit of Plant Vogtle First Full Power Supply Year 50.0%

Following Commercial Operation Date Second Full Power Supply Year 37.5%

Following Commercial Operation Date Third Full Power Supply Year 37.5%

Following Commercial Operation Date Fourth Full Power Supply Year 25.0%

Following Commercial Operation Date Fifth Full Power Supply Year 25.0%

Following Commercial Operation Date Sixth Full Power Supply Year 12.5%

Following Commercial Operation Date Seventh Full Power Supply Year 12.5%

Following Commercial Operation Date One ownership entitle-the Authority's Project "B. As to 7.345% of the output associated with shall be equal to such sales to Georgia Power Company ment in Vogtle Units Numbers One and Two, date of a Unit of Plant the Commercial Operation 100% of the output and services beginning with full Power Supply Year following the Power Vogtle and continuing until the end of the fourteenth of such Unit occurs.

Supply Year in which the Commercial Operation the Authority's Project One ownership entitle-

"C. As to 14.689% of the output associated with equal to such sales to Georgia Power Company shall be ment in Vogtle Units Numbers One and Two, date of a Unit of Plant the Commercial Operation 100% of the output and services beginning with (i) retirement of such Unit, or (ii) the first to occur of Vogtle and shall continue until the later to occur of Bonds or of provision being made for such the principal of the latest date stated for the payment of Bond Resolution.

payment in accordance with Section 1201 of the is not intended to limit the power of the Author-

"D. The establishment of the foregoing schedule power and energy from Project One."

ity granted in Section 311 to sell and exchange as "Section 213" is hereby added:

Section 2. The following new section to be known "Section 213. Resale Covenant.

enter the express written consent of the Authority, The Participant agrees that it will not, without or pay for, power person agrees to take, or to take into any contract pursuant to which a nonexempt sentence, "nohexempt person" shall mean preceding purchased from Project One. For purposes of the of the United States, the District of Columbia, any entity which is not a state, territory, or possession of the is not exempt from taxation under Section 501 or any political subdivision thereof, and which Internal Revenue code of 1954, as amended."

2

of Georgia and the Participant IN WITNESS WHEREOF, the Municipal Electric Authority corporate names by their duly in their have caused this Fifth Amendment of Contract to be executed and attested, all of the date and authorized officers and their corporate seals to be hereunto impressed year first above written.

- MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA BY: A)_ _-___ _ _ .__ -

Approved As To Form 6 Chair-man ATT: /; P6 . Z * - ____

Counsel Secretary-Treasurer Approved As To Form 3

SIXTH A"T POWR SALES CONTRACT BEIWEEN MUNI[CPAL ELECTRIC AUTHORITY OF GEORGIA AND THE UNDERSIGNED PARTICIPANT This Sixth Amendment of Contract, made and entered into as of January 1, 1986, by and between the Municipal Electric Authority of Georgia, a public body corporate and politic and a public corporation of the State of Georgia, hereinafter sometimes referred to as the Authority, created by the provisions of I Ga. L. 1975, p. 107, as amended (Title 46-3-110 O.C.G.A.), and the undersigned political subdivision of the State of Georgia, hereinafter soretires designated as the Participant.

W I T N E S S E T H:

BE it remembered that a Pow'er Sales Contract and an Amend-Ient, both dated as of March 1, 1976, a Second Amendment dated as of May 25, 1977, a Third Amendment dated February 1, 1978, a Fourth Amend-mnent dated May 1, 1980, and a Fifth Amendment dated as of November 16, 1983, have all been executed previously by and between the Authority and the Participant; and WHEREAS, the City of Oxford ("Oxford") which has previously received its wholesale power supply from the City of Covington has requested to became a Participant; and WHEREAS, it is in the best interests of the Authority, the Participants and Oxford for Oxford to become a Participant upon the execution of a Power Sales Contract.

g ~NOW THEREFORE For and in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged, it is agreed by and between the parties hereto that said Contract is further amended as follows:

Section 1. The Authority is hereby authorized to enter into a Power Sales Contract with Oxford in substantially the form of this Power Sales Contract, as amended, with such changes as may be required to make such contract applicable to Oxford, and to provide Oxford with an Entitlement Share of 0.191%, and an appropriate Transmission Entitlement Share calculated in accordance with Section 308 of the Power Sales Contract.

Section 2. The Authority is authorized to provide a portion of Oxford's Entitlement Share from this Participant's Entitlement Share pro rata with the other Participants approving this Sixth Amendment.

Section 3. This Participant agrees to continue obligated for its full Entitlement Share without deduction for the pro rata portion assigned by the Authority to Oxford: Provided however, that the Authority hereby agrees that it will take all necessary action to enforce the payment of all sums due by Oxford for .its Entitlement Share, and this Participant shall receive credit for its pro rata share of such payments.

Section 4. This Sixth Amendment shall become effective when such amendment has been approved by Participants whose 1985 Transmis-sion Entitlemnt Shares represent, in the aggregate, not less than 75%

of the total Participants' Transnission Entitlement Shares for 1985:

Provided, however, that the AuEhority may make service to Oxford retroactive to January 4 1986.

IN WITNESS WEEREOF, the Municipal Electric Authority of Georgia and the Participant have caused this Sixth Amendment of Contract to be executed in their corporate nares by their duly author-ized officers and their corporate seals to be hereunto impressed and attested, all as of the date and year. first above written.

MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA Approved As to Form BY: A z h-w)^y-c__

Chairman ATT:

eral Counsel SecretaryTreasurer CITY OF L Approved As to Form BY: / -a*

SEVENTH AMENDMENT POWER SALES CONTRACT BETWEEN MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA AND THE UNDERSIGNED PARTICIPANT entered into as of This Seventh Amendment of Contract, made and of Georgia, a May 31, 1989, by *and between the Municipal Electric Authority of the State of public body corporate and politic and a public corporation created by the Georgia, hereinafter sometimes referred to as the Authority, 46-3-110, et sea.),

provisions of 1975 Ga. Laws 107, as amended (O.C.G.A. § Georgia, hereinafter and the undersigned political subdivision of the State of sometimes designated as the Participant.

W IT N E S S E T H both BE it remembered that a-Power Sales Contract and an Amendment, of May 25, 1977, a dated as of March 1, 1976, a Second Amendment dated as dated as of Third Amendment dated as of February 1, 1978, a Fourth Amendment 1983, and a Sixth May 1, 1980, a Fifth Amendment dated as of November 16, previously by Amendment dated as of January 1, 1986, have all been executed and between the Authority and the Participant; and the WHEREAS, the Participant and the Authority have determined that operation of financing of transmission system facilities after the commercial One; and Vogtle Unit No. Two is to be continued as a part of Project

I WHEREAS, a contract with the Southeastern Power Administration (SEPA) permits the Authority to wheel SEPA allocations for municipal preference customers within the State of Georgia.

NOW, THEREFORE For and in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged, it is agreed by and between the parties hereto that said Contract is further amended as follows:

PROPOSED AMENDMENTS TO POWER SALES CONTRACTS Section 1. The Power Sales Contract, as amended, is hereby further amended by deleting subsection 102(s) in its entirety and substituting a new subsection 102(s) to read as follows:

"(s) 'Project' shall mean those electric generation and related transmission facilities which are identified in the Description of Project and those transmission system facilities to which reference is made in the Description of Project, together with (i) any major renewals, replacements, repairs, additions, betterments and improvements necessary, in the opinion of the Consulting Engineer, to keep the Project in good operating condition or to prevent a loss of revenue therefrom, (ii)any major additions, improvements, repairs and modifications to the Project and any decommissioning or disposals of the Project, required by any governmental agency having jurisdiction over the Project or for which the

I %

Authority shall be res~ponsible by virtue of any obligation of the Authority arising out of any contract to which the Authority may be a party relating to ownership of the Project or any facility thereof, and (iii) working capital required by the Authority during construction of the Project and for the placing of the Project in operation for providing Bulk Power Supply and SEPA power to the Participant."

Section 2. The Power Sales Contract, as amended, is hereby further amended by deleting subsection 302(c)(2) in its entirety Section 3. The Power Sales Contract, as amended, is hereby further amended by deleting subsection 308(b) in its entirety and by substituting in lieu thereof a new subsection 308(b) so that when so amended subsection 308(b) shall read as follows:

"(b) The Authority may assume responsibility for transmission of SEPA power to Participants and other customers of SEPA, provided that the Authority shall recover at least its costs for such transmission service.

During any Power Supply Year in which the Authority has responsibility for transmission of SEPA power, such transmission service shall be provided by the Authority to the Participants and other customers of SEPA by accepting delivery of such SEPA power from SEPA, for the accounts of the respective Participants and other customers of SEPA, and delivering such SEPA power to such Participants and other customers through use of the transmission system facilities included in the Project, and the Authority is authorized to increase its investment in, and the annual operating costs of, such transmission system facilities as may be required to provide such

transmission service. The charges for such service shall be calculated hereof. All and collected by the Authority as provided in Section 308A shall be amounts collected by the Authority for such transmission service as other appropriately credited to Annual Project Costs in the same manner credits pursuant to Section 311 hereof."

Section 4. The Power Sales Contract, as amended, is hereby further Section amended by adding a new section following Section 308 to be designated 308A to read as follows:

"Section 308A. Calculation of Charges for SEPA Transmission Service.

per The Authority shall establish a rate (expressed in dollars costs and kilowatt per month and determined utilizing the annual dollar for purposes billing determinants) for each month of the Power Supply Year of SEPA of delivering SEPA power to the Participants and other customers each month of which are not Participants ('nonparticipant customers') for the Power Supply Year. Such rate shall be determined for each Power Supply Year by dividing the sum of (i) the Annual Project Transmission and (iii)

Fixed Charges, (ii)the Other Annual Project Transmission Costs, purchase of amounts, if any, which must be paid by the Authority for the transmission transmission services for the Project under its integrated in each case as budgeted or system agreement with other utilities; of (a)the estimated to be incurred for the Power Supply Year; by the sum Bulk Power highest annual one-hour integrated coincident system demand of (b) the Supply provided by the Authority to all of the Participants, to the highest annual SEPA capacity delivered by the Authority

Participants and nonparticipant customers, and (c) less demand credits and transmission losses, if applicable, incurred by the Authority under its integrated transmission system agreement with other utilities that are properly allocable to the SEPA capacity delivered to the Participants and nonparticipant customers, in each case to be supplied during the Power Supply Year; with the result further divided by the number of months in the Power Supply Year. The amount payable by each Participant and nonparticipant customer for each month of the Power Supply Year shall be the product of the rate, determined in accordance with the foregoing, and the SEPA capacity delivered by the Authority to such Participant or nonparticipant customer of SEPA during the respective month of the Power Supply Year, plus, in the case of nonparticipant customers of SEPA, any applicable surcharge."

Section 5. The attachment to the Power Sales Contract entitled "Description of Project", as amended, is hereby further amended by deleting the paragraph designated "Additional Facilities" in its entirety and substituting a new paragraph to read as follows:

"Additional Facilities.

The additional facilities of the Project shall be those additions and improvements to the electric generation and related transmission facilities and to the transmission system facilities of the Project provided for in clauses (i) and, (ii) of Section 102(s) of this Contract; and those transmission system facilities, renewals, replacements, repairs, disposals, and additions. betterments,

improvements, and modifications thereto, acquired or constructed by the Authority subsequent to the Cormercial Operation Date of the last of the generating facilities of the Project to be completed in order to meet its investment responsibility in connection with any agreement for an integrated transmission system to which the Authority may be a party.

IN WITNESS WHEREOF, the Municipal Electric Authority of Georgia and the Participant have caused this Seventh knendment of Contract to be executed in their corporate names by their duly authorized officers and their corporate seals to be hereunto impressed and attested, all as of the date and year first above written.

MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA APPROVED AS TO FORM: BY: , /) 't)

Chairman

_ _ Y_ h _ _ - X 2 ATTEST: a ,L/ ___

Generazi Counsel Secretary-Treasurer*

CITYe APPROVED AS TO FORM: BY:

__ATT Participant Atrney I

Attachment 3 Edwin I. Hatch Nuclear Plant Financial Assurance Requirements for Decommissioning Nuclear Power Reactors - 2003 Submittal The Trust Agreement was modified on March 9%h 2001 to provide for an additional investment manager, State Street Global Advisors.

ENCLOSURE 3

• r OglethorpePower Oglethorpe Power Corporation 2100 East Exchange Place Tucker, GA 30084-5336 phone 770-270-7600 February 27, 2003 fax 770-270-7872 An Electric Membership Cooperative Docket Nos. 50-321 50-366 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D. C. 20555 Edwin I. Hatch Nuclear Plant "Financial Assurance Requirements for Decommissioning Nuclear Power Reactors" (63 FR 50465 dated September 22, 1998)

Dear Ladies and Gentlemen:

As provided in 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC, on a calendar year basis, beginning on March 31, 1999, and every 2 years thereafter, on the status of its decommissioning funding for each reactor or part of reactor it owns.

Oglethorpe Power Corporation (OPC), hereby submits the information for operating licenses DPR-7 and NPF-5 as requested in accordance with 10 CFR 50.75(f)(1) for the Edwin I. Hatch Nuclear Plant. Southern Nuclear Operating Company, as the operating licensee and as agent for the joint owners of Plant Hatch, will be forwarding a complete set of submittals to the NRC on behalf of the joint owners.

Based on the information presented herein, there is reasonable assurance that the OPC ownership prorated amount of the NRC prescribed minimum will be available to decommission Plant Hatch units I & 2 on the current expiration date of each unit's operating license as set forth in 10 CFR 50.75(c).

Should you have any questions concerning this matter, please call me.

Respectfully submitted, Anne F. Appleby Vice President Finance Oglethorpe Power Corporation Enclosures G Electric Cooperative Association member of the National Rural A

U. S. Nuclear Regulatory Commission Page Two cc: Southern Nuclear Operating Company Mr. H. L. Sumner, Vice President - Plant Hatch U. S. Nuclear Regulatorv Commission, Washington. DC Mr. L. N. Olshan, Project Manager - Hatch U. S. Nuclear Regulatory Commission, Region 11 Mr. L. A. Reyes, Regional Administrator Mr. J. T. Munday, Senior Resident Inspector - Hatch

Enclosure Edwin I. Hatch Nuclear Plant Oglethorpe Power Corporation Ownership Percentage - 30%

10 CFR 50.75(f)(1) Requirement Unit 1 Unit 2 1 The minimum decommissioning fund estimate, $123,538,0002 $123,538,0002 pursuant to 10 CFR 50.75 (b) and (c)'

2. The amount accumulated at the end of the calendar $57,840,076 $45,472,544 year preceding the date of the report for items included in 10 CFR 50.75 (b) and (c).

3. A schedule of the annual amounts remaining to be See Schedule in See Schedule in collected;for items in 10 CFR 50.75 (b) and (c). Attachment I Attachment I

4. The assumptions used regarding:

Rates of escalation in decommissioning cost 4.72% 4.72%

Rates of Earnings on decommissioning funds 8% 8%

Rates of other factors used in funding projections

5. Any contracts upon which the licensee is relying pursuant to 10 CFR 50.75(e)(1)(ii)(c)

6. Any modifications to a licensee's current method providing financial assurance occurring since the last submitted report.

7. Any material changes to trust agreements. Two changes were made in Two changes were made in the investment managers. the investment managers.

The first was a change from The first was a change from one fixed income manager one fixed income manager to another fixed income to another fixed income manager. The second manager. The second change was to remove a change was to remove a poor performing small cap poor performing small cap manager and add a Treasury manager and add a Treasury Bill Fund. Bill Fund.-

In addition the plant has In addition the plant has received a 20 year license received a 20 year license extension. extension.

I

• The NRC formulas in section 10CFR50.75(c) include only those decommissioning costs incurred by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: (1) release of the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates. The costs of managing and storing spent fuel on site until transfer to DOE are not included in the cost formulas.

2 This number is based on NUREG-1307, Rev. 9 for the Burial factor and the December 1999 values for the Labor and Energy factors

PROPOSED SCHEDULE USING 2001 MINIMUM PROPOSED SCHEDULE USING 2001 MINIMUM OGLETHORPE POWER CORPORATION NRC FUNDING - 2003 OGLETHORPE POWER CORPORATION NRC FUNDING - 2003 LICENSE EXTENSION - LEVEL CONTRIBUTION LICENSE EXTENSION - LEVEL CONTRIBUTION Hatch I Escalation Factor 4 720 Hatch 2 Escalation Factor 4720 Inflation Factor 4 72 Inflation Factor 472 Earnings Rate. 8 Earnings Rate. 8 (est based on Balance earnings rate) Balance Balance Balance Year Begin Year Earnings Contnbution End Year Year Begin Year Earnings Contribution End Year 7/90 0 0 15,485,000 15,485,000 7/90 0 0 11,334,489 11,334,489 1990 0 0 548,371 16,652,771 1990 11,334,489 453,380 654,745 12,442,614 1991 0 0 548,371 18,533,364 1991 12,442,614 995,409 654,745 14,092,768 1992 0 0 548,371 20,564,404 1992 14,092,768 1,127,421 654,745 15,874,934 1993 0 0 548,371 24,016,702 1993 15,874,934 2,010,297 654,745 18,539,976 1994 0 0 1,147,297 24,565,073 1994 18,539,976 377,070 1,047,457 19,964,503 1995 0 0 1,147,297 25,653,180 1995 20,278,012 2,699,667 1,047,457 24,025,136 1996 0 0 1,147,297 33,842,031 1996 24,025,136 3,071,009 1,047,457 28,143,602 1997 33,842,031 8,135,205 1,147,297 43,124,533 1997 28,143,602 5,262,044 1,047,457 34,453,103 1998 43,124,533 4,171,715 1,953,043 49,249,291 1998 34,453,103 3,337,183 1,364,675 39,154,961 1999 50,986,366 2,164,118 1,874,666 55,025,150 1999 39,154,961 3,313,186 1,286,298 43,754,445 2000 55,025,150 3,667,226 1,299,666 59,992,042 2000 43,754,445 3,014,823 711,298 47,480,566 2001 59,992,042 (62,964) 1,224,666 61,153,743 2001 47,480,566 (39,191) 636,298 48,077,673 2002 61,153,743 (3,313,667) 0 57,840,076 2002 48,077,673 (2,605,129) 0 45,472,544 2003 57,840,076 4,627,206 0 62,467,282 2003 45,472,544 3,637,803 0 49,110,347 2004 62,467,282 4,997,383 0 67,464,664 2004 49,110,347 3,928,828 0 53,039,175 2005 67,464,664 5,397,173 0 72,861,838 2005 53,039,175 4,243,134 0 57,282,309 2006 72,861,838 5,828,947 0 78,690,785 2006 57,282,309 4,582,585 0 61,864,894 2007 78,690,785 6,295,263 0 84,986,047 2007 61,864,894 4,949,191 0 66,814,085 2008 84,986,047 6,798,884 0 91,784,931 2008 66,814,085 5,345,127 0 72,159,212 2009 91,784,931 7,342,794 0 99,127,726 2009 72,159,212 5,772,737 0 77,931,949 2010 99,127,726 7,930,218 0 107,057,944 2010 77,931,949 6,234,556 0 84,166,505 2011 107,057,944 8,564,635 0 115,622,579 2011 84,166,505 6,733,320 0 90,899,825 2012 115,622,579 9,249,806 0 124,872,385 2012 90,899,825 7,271,986 0 98,171,811 2013 124,872,385 9,989,791 0 134,862,176 2013 98,171,811 7,853,745 0 106,025,556 2014 134,862,176 10,788,974 0 145,651,150 2014 106,025,556 8,482,044 0 114,507,601 2015 145,651,150 11,652,092 0 157,303,242 2015 114,507,601 9,160,608 0 123,668,209 2016 157,303,242 12,584,259 0 169,887,502 2016 123,668,209 9,893,457 0 133,561,665 2017 169,887,502 13,591,000 0 183,478,502 2017 133,561,665 10,684,933 0 144,246,599 2018 183,478,502 14,678,280 0 198,156,782 2018 144,246,599 11,539,728 0 155,786,326 2019 198,156,782 15,852,543 0 214,009,325 2019 155,786,326 12,462,906 0 168,249,233 2020 214,009,325 17,120,746 0 231,130,071 2020 168,249,233 13,459,939 0 181,709,171 2021 231,130,071 18,490,406 0 249,620,476 2021 181,709,171 14,536,734 0 196,245,905 2022 249,620,476 19,969,638 0 269,590,114 2022 196,245,905 15,699,672 0 211,945,577 2023 269,590,114 21,567,209 0 291,157,324 2023 211,945,577 16,955,646 0 228,901,223 2024 291,157,324 23,292,586 0 314,449,910 2024 228,901,223 18,312,098 0 247,213,321 2025 314,449,910 25,155,993 0 339,605,902 2025 247,213,321 19,777,066 0 266,990,387 2026 339,605,902 27,168,472 0 366,774,374 2026 266,990,387 21,359,231 0 288,349,618 2027 366,774,374 29,341,950 0 396,116,324 2027 288,349,618 23,067,969 0 311,417,587 2028 396,116,324 31,689,306 0 427,805,630 2028 311,417,587 24,913,407 0 336,330,994 2029 427,805,630 34,224,450 0 462,030,081 2029 336,330,994 26,906,480 0 363,237,474 2030 462,030,081 36,962,406 0 498,992,487 2030 363,237,474 29,058,998 0 392,296,472 2031 498,992,487 39,919,399 0 538,911,886 2031 392,296,472 31,383,718 0 423,680,190 2032 538,911,886 43,112,951 0 582,024,837 2032 423,680,190 33,894,415 0 457,574,605 2033 582,024,837 46,561,987 0 628,586,824 2033 457,574,605 36,605,968 0 494,180,573 2034 628,586,824 50,286,946 0 678,873,770 2034 494,180,573 39,534,446 0 533,715,019 2035 533,715,019 42,697,202 0 576,412,221 2036 576,412,221 46,112,978 0 622,525,198 2037 622,525,198 49,802,016 0 672,327,214 2038 672,327,214 53,786,177 0 726,113,391

$581,978,000 695,042,000 NRC Mm NRC Min from 1/03 letter from 1/03 lette

ENCLOSURE 4 Dalton UT IL IT IE S see the light February 13, 2003 Docket Nos. 50-321 50-366 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D. C. 20555 Edwin I. Hatch Nuclear Plant "Financial Assurance Requirements for Decommissioning Nuclear Power Reactors" (10 CFR 50.75(f)(1)

Dear Ladies and Gentlemen:

As provided in 10 CFR 50.75(f)(1), each power reactor licensee is required to report to the NRC, on a calendar year basis, beginning on March 31, 1999, and every 2 years thereafter, on the status of its decommissioning funding for each reactor or part of reactor it owns.

The Water, Light and Sinking Fund Commission of the City of Dalton, Georgia, operating as Dalton Utilities, hereby submits the information for operating licenses DPR-7 and NPF-5 as requested in accordance with 10 CFR 50.75(f)(1) for the Edwin I. Hatch Nuclear Plant, Units 1 and 2, respectively. Southern Nuclear Operating Company, as the operating licensee and as agent for the joint owners of Plant Hatch, will be forwarding a complete set of submittals to the NRC on behalf of the joint owners.

Based on the information presented herein, there is reasonable assurance that the Dalton ownership prorated amount of the NRC prescribed minimum will be available to decommission Plant Hatch units 1 & 2 on the current expiration date of each unit's operating license as set forth in 10 CFR 50.75(c).

Should you have any questions concerning this matter, please call Tom Bundros at (706) 281-1035.

Respectfully submitted, Do Cope President and CEO 1200 VD. Parrott, Jr Parkway

• PO Box 869

• Dalton, GA 30722-0869

• 706 278 1313 T

• 706 278 7230 F

Enclosures Page Two U. S. Nuclear Regulatory Commission cc: Southern Nuclear Operating Company Mr. H. L. Sumner, Vice President - Plant Hatch U. S. Nuclear Regulatory Commission. Washington, DC Mr. J. Colaccino, NRR Licensing Project Manager - Hatch U. S. Nuclear Regulatory Commission, Region II Mr. L. A. Reyes, Regional Administrator Mr. N. P. Garrett, Acting Senior Resident Inspector - Hatch

Enclosure Edwin I. Hatch Nuclear Plant The Water, Light and Sinking Fund Commission of the City of Dalton, GA Operating as Dalton Utilities Ownership Percentage - 2.2%

10 CFR 50.75(f)(1) Requirement Unit 1 Unit 2

1. The minimum decommissioning fund estimate, $9,059,0002 $9,059,0002 pursuant to 10 CFR 50.75 (b) and (c)'

2. The amount accumulated at the end of the calendar $14,132,232 $12,802,431 year preceding the date of the report for items included in 10 CFR 50.75 (b) and (c).

3. A schedule of the annual amounts remaining to be See Schedule in See Schedule in collected; for items in 10 CFR 50.75 (b) and (c). Attachment 1 Attachment I

4. The assumptions used regarding:

Rates of escalation in decommissioning cost N/A N/A Rates of Earnings on decommissioning funds Various Various Rates of other factors used in funding projections N/A N/A

5. Any contracts upon which the licensee is relying None None pursuant to 10 CFR 50.75(e)(1)(ii)(c) 6 Any modifications to a licensee's current method None None providing financial assurance occurring since the last submitted report.

7. Any material changes to trust agreements. None None 1 The NRC formulas in section 10CFR50.75(c) include only those decommissioning costs incurred by licensees to remove a facility or site safely from service and reduce residual radioactivity to levels that permit: (1) release of the property for unrestricted use and termination of the license; or (2) release of the property under restricted conditions and termination of the license. The cost of dismantling or demolishing non-radiological systems and structures is not included in the NRC decommissioning cost estimates The costs of managing and storing spent fuel on site until transfer to DOE are not included in the cost formulas.

2 This number is based on NUREG-1307, Rev. 10 for the Burial factor (Option 2) and the December 2001 values for the Labor and Energy factors.

The Water, Light and Sinking Fund Commission of The City of Dalton, GA DIBIA Dalton Utilities Nuclear Decommissioning Funds Investment Balances December 31, 2002 En

=1 Bank of New York Wachovia Bank Total Funds Carrvina Value Market Value Par Value Carrying Value Market Value Par Value Carrying Value Market Value Par Value Plant Hatch Unit I 4,005,835 6,291,604 14,100,000 7,752,303 7,840,628 6,250,591 11,758,138 14,132,232 20,350,591 Unit 2 3,470,769 5,699,583 18,200,000 6,716,816 7,102,848 8,068,139 10,187,584 12,802,431 26,268,139 Total 7,476,604 11,991,187 32,300,000 14,469,119 14,943,475 14,318,730 21,945,722 26,934,662 46,618,730 r-Plant Voctle OF Unit I 1,701,467 2,962,261 12,200,000 3,292,770 3,691,584 5,408,313 4,994,237 6,653,845 17,608,313 Io pq.

Unit 2 1,707,282 2,956,330 13,000,000 3,304,023 3,684,193 5,762,957 5,011,305 6,640,523 18,762,957 o Total 3,408,750 5,918,591 25,200,000 6,596,793 7,375,777 11,171,270 10,005,543 13,294,368 36,371,270 Grand Total 10,885,353 17,909,778 57,500,000 21,065,911 22,319,252 25,490,000 31,951,265 40,229,030 82,990,000 Interest Sheets\Nuclear Decomm Funds.)ds 2/13/03