PY-CEI-NRR-1200, Forwards Decommissioning Repts on Financial Assurance for Plant

Forwards Decommissioning Repts on Financial Assurance for Plant

ML20055H634
Person / Time
Site:	Perry
Issue date:	07/25/1990
From:	Lyster M CENTERIOR ENERGY
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
PY-CEI-NRR-1200, NUDOCS 9007270109
Download: ML20055H634 (200)

Text

,

'. PERRY NUCLEAR POWER PLANT Mail Address:

LF :10 CENTER ROAD P.O. BOX 97 Michael D Lyster PERRY, OHIO 44081 PERRY, OHIO 44081 Vice President Nuclear (216)259 3737 p

j- . July 25, 1990 l-PY-CE1/NRR-1200 L U.S. Nuclear _ Regulatory' Commission Document Control Desk Washington, D. C. 20555 Perry Nuclear Power Plant Docket No. 50-440 Decommissioning Reports on Financial Assurance Gentlement '

Enclosed are Decommissioning Reports filed on behalf of the Cleveland Electric Illuminating Company, the Toledo Edison Company, _the Pennsylvania Power - i Company, the Duquesne Light Company and the Ohio Edison Company for compliance I with 10CFR50.33(k) and 50.75(b) for assurance funding of Perry. Nuclear Power i Plant, (PNPP) Unit 1. These five utilities represent 100% ownership of PNPP, q '

Unit'l.

If you have any questions, please feel free to call.

Sincerely,  !

si ,

'\'

Michael D. Ly er Vice. President, Nuclear -Perry MDL:MJH:nje

-Attachment cc NRR Project Manager Sr. Resident Inspector NRC Region III

, O hh .

Ops ahng Units:

Cleveland Electric tiluminating

[

br Toledo Edison I

w 4

BEFORE THE I

' UNITED STATES NUCLEAR REGULATORY COMMISSION a

CLEVELAND ELECTRIC ILLUMINATING CO. . Docket No. _50-440 DECOMMISSIONING' REPORT CLEVELAND ELECTRIC' ILLUMINATING:COMPANYl(Company) hereby-nubmits this Decommissioning Report ~in' compliance ~with 10 C.F.R.

F.ections 50.33(k) and 50.75(b)..

1.

The' Company owns a 31.11% undivided interest in Unit No.

1 of the Perry Nuclear Power Plant.

1 2.

The Company hereby certifi's e that-financial assurance for decommissioning the Unit is provided in the-amount of at:

least $52.88 million. The calculation of'this amount is, set forth in Exhibit A and complies with the~ formula set forthLin 10 C.F.R.

section 50.75(c) and shall' beladjusted annually in confor-mance with that section.

3.

The method by which the Company will provide, financial-assurance for decommissioning the Unit will ime by establishment of an external sinking fund in which deposits will be made at least annually.

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

~'=

f ;. ,

1 1

Attachedias Exhibit'B-1 to'this; Decommissioning R'eport; 4.

is a true and correct' copy of'the executed trust-instrumentifor: I the external sinking fund. Attached as. Exhibits B-2 and;B-3 to<

this Decommissioning Report are,true and correct copies of ,

Evidence of Authorities indicating that.the parties signing.Jsuch: -

l trust instrument are authorized to do so'.

5. Attached as Exhibit'C:.to this' Decommissioning Report is: .

.~ I, a schedule for implementing the-method of,providing financial as-surance for decommissioning the. Unit.

i THE CLEVELAND ELECTRIC ILLUMINATING COMPANY' Murray R. Edelman who, being duly sworn, deposed and'said i that (1) he is Executive.Vice-Presidenti- Power Generation of the Centerior service company, (2) he is'dulycauthorized to' execute!  ;

and file this report on-behalf of The Cleveland Electric.Il-luminating Company, and=(3) the statements set forth therein are~ ,

true and correct to the best of his knowledge,_information and P belief.

4%t444 k 'N

[-

Murray M. Edelman q

Sworn to and subscribed before me, this l . day of 3ULY ,

uu u JOSEPH C. SZWEJKOW5KI-e ,

, is ! -

, ham runes, seses of m cuya. cry.

.[i y ,

,'f ky Genusosassa Erslrus Jufy 14,1991  ;

u

6 -

EXHIBIT A t CLEVELAND- ELECTRIC ILLUMINATING COMPANY 'l 1

Calculation'of Minimum Financial' Assurance Amount- I for December 1989 Perry: Nuclear Power Plant Unit No. 1 1 1

Ohio Regions I

____________ 1

.- i Labor (L) = ;Value for Midwest l

Ensrgy (E)'= East North Central value .

Waste Burial (D) = So.: Carolina.BWR

,1 For BWR Unit:

• Calculated NRC Escalation Factor Factor Factor L =- 1.149' x 0.65s =' O.747 l 1

E= 0.867' x 0.13 = 0.113 >

B= 1.814- x 0.22 = 0.399  :

1.259' Bace Amount in millions for BWR greater than 3400'MWt =

(P = power level of unit in megawatts thermal)

$135 (million)

Escalated Amount for unit = $135,000,000 ' Base Amount x 1.259 Escalation Factor

$169,965,000 Escalated Amount j Escalated Amount for Cleveland Electric Illuminating Company's ownership-interest of 31.11% atDecember 1989

)

169,965,000 x 0.3111-

\

$52,876,112 {

============= '

i i

e

. * *~

EXHIBIT B-1 U

.,. 1

~ ;t <, .J.

I

^

f,

.i i

~1 i

i l

t

.. -MASTER-DECOMMISSIONING TRUST AGREEMENT.

dated as of, July 1, 1988  ;

i between

( THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

'and-

? AMERITRUST: COMPANENATIONAEi: ASSOCIATION ,

as Trustee-

{f I

d I

.1

' l l

\

i l

(.i --, .

r _.r

.=

, -Table of: Contents-Page

-Number ARTICLE I ESTABLISHMENT AND DECLARATION OF. TRUST 1.1' Establishment:of Trust . . . . . . . . . . . . . 1- g j

~

1.2i- Declaration of Trust .............. l' 1

ARTICLE II PURPOSE OF TRUST; USE OF TRUST ASSETS 2.1 Purpose of Trust .................. 2- 'l 2.2 Permitted Use-of1 Trust Funds ...... 2 2.3 Commingling _ o f Asse ts ' . . . . . . . . . . . . . . ;3 'i 2.4 Pe rmi t ted Inves tme n ts . . . . . . . . . . . . . - 3 2.5 Company _ Directives ................. 4: >

" ARTICLE III CONTRIBUTIONS BY=THE1 COMPANY' 3.1 Nature of Contributions ........... 5 .i 3.2 Contributions ..................... 5-1 ARTICLE IV INDEMNIFICATION'OF THE TRUSTEE i

.4.1 Indemnification ...................- 5 i ARTICLE V _ QUALIFICATIONS, DUTIES'AND' POWERS  !

OF THE TRUSTEE -,

5.1 Qualification of the Trustee ...... 6-  !

5.2 Duties of the Trus tee . . . . . . . . . . . . . 6 :-

5.3 Authorit'f with respect to  :!

Amounts;and Sufficiency of:  !'

Contributions .................... 7 5.4 Duties Not Expressly Undertaken . . .- 7 i ARTICLE'VI TAXES AND EXPENSES y 6.1 Non-Qualified Trust Funds ......... 7 6.2 Qualified Trust Funds ............. 8 6.3 Trustee's Compensation and Expenses ................... 8 ARTICLE VII ACCOUNTINGS BY THE TRUSTEE  !

7.1 Inspection of-Books and Records ... 9 7.2 Statements of Account ............. 9 7.3 Personsz Entitled to Accounting .... 9 i

ARTICLE VIII REMOVAL OR RESIGNATION OF THE TRUSTEE i 8.1 Resignation or Removal ............ 9 8.2 Failure.to Appoint successor Trustee ............... 10 Y , .; *.

se- l l ',

i i

(

• Page Number ARTICLE IX ACTION SY THE-COMPANY 9.1 Authority to Act . . . . . . . . . . . . . . . . . . - 10:  ;

9.2 Reliance of Trustee on Written Certifications, Etc. .... 10 I

, 9.3 Ce rtain - In f o rmation . . . . . . . . . . . . . . . 10  :

1 l

ARTICLE X AMENDMENT ~OF AGREEMENT I 10.1 Amendments,......................... 11 l ARTICLE XI- TERM OF THE TRUST ~

11.1- Termination at the Option-of the Company .................. 11 11.2 Trust Term ........................ 11 i 11.3 Final Distributioncof. Trust Fund Assets ..................... 11J :t

. ARTICLE XII DEFINITIONS I 12.1 Definitions ....................... 11 ARTICLE XIII -MISCELLANEOUS ~. PROVISIONS AND EFFECTIVE'DATE- .. <

13.1- Notices ........................... 11 4 13.2 Severability ...................... 14 13.3' Separate Counte rparts . . . . . . . . . . . . . ' 15. -

C 13.4 13.5; Successors and Assigns ............ 15-Headings .......................... 15:

13.6 . Gove rn ing Law a . . . . . . . . . . . . . . . . . . . . . 15 13.7. Administration of Trust,...........- l15 13.8. Performance by the Company . . . . . . . . 15=

Schedule I Nuclear. Generating Units and  !

Related Trust Funds  !

Schedule II Allocation of. Initial Contributions l'

I t

1 -

.TH IS - DECOMMISSIONING 1 . TRUST AGREEMENT (hereinafter referred to as the " Agreement") made this 1st day of July,1988, by and between .The Cleveland Electric Illuminating Company, an Ohio corporation. having its principal place of business at Cleveland, Ohio (" Company"), and AmeriTrust Company National-Association, a national banking association having its principal place of business at 900 Euclid Avenue, Cleveland, Ohio, not in its individual capacity but solely as trustee'(the " Trustee").

RECIIAkS ,

The Company has certain obligations -under Applicable Law (as such term and certain other capitalized terms used herein are defined in Article XII hereof) with respect to the Decommission-ing of its interests, whether now existing or hereinafter acquired, in the Nuclear Generating Units identified in Schedule I hereto.

The Company desires to establish a trust to provide for the Decommissioning of its- interests in the Nuclear Generating Units. -

NOW, THEREFORE, the Company and the Trustee hereby agree as follows:

ARTICLE I ESTABLISHMENT AND DECLARATION OF TRUST Section 1.1. Establishment of Trust. The Company hereby (a) establishes with .the Trustee a master trust which -

shall (i) be known as the "The Cleveland Electric Illuminating Master Nuclear Decommissioning Trust" (the " Trust") and (ii) consist of a Qualified Trust Fund and a Non-Qualified. Trust Fund-

, for each Nuclear Generating Unit, as: more fully identified in .

L Schedule I hereto (sometimes collectively referred to as the  !

[ " Trust Funds" and each, individually, as a " Trust Fund"), and (b)~

transfers, assigns, conveys and delivers to the Trustee certain l -

I l property, being cash in the amounts set forth in Schedule II, '

which property shall initially be allocated to and held in the specific Trust Funds as indicated in Schedule II.

Section 1.2. Declaration of Trust. The Trustee declares that it will hold all estate, right, title (except as otherwise provided in Article VIII hereof) and interest in and to

, the assets of-the -Trust Funds upon the trusts, and exclusively-  !

I for the purposes, set forth herein.

l l

l

z..; 'j% =

l

1-l ,

I L ' ARTICLE.II l PURPOSE OF-TRUSTr~USE OF TRUST ASSETS.

l Section 2.1. Purpose of Trust. The. Trust'has been ,

created and shall be maintained and . operated for the exclusive- ,

purpose of providing: funds for.1 the satisfaction' of the Company's i Decommissioning obligations. with respect ..to the Nuclear.Generat- ,

-ing Units and certain. administrative- costs and expenses inci-' -l dental thereto, and except as expressly set forth > in this Agree-- ,

ment, none of the assets.of any Trust. Fund;shall be.;used for,-or: 1 diverted to, any. other purpose. .;

Section 2.2. Permitted : Uses of ' Trust Funds.- t 2.2.1. .The assets of each Trust' Fund may bes- t

. 1 (a) used to fund, in whole or in part,-the  !

Decommissioning costs of the Company with: respect toJthe Decommissioning of the - Nucleare Generating Unit to which such-Trust Fund relates;-

l (b). used to pay -taxes, . administrative ~and-other incidental: expenses of, or allocable.; to,~ such :

Trust Fund,'.<in. each; case only in accordance with,- 4

- 'and_ subject to

' the. provisions- of, Article;VI of:

this Agreement; >

r (c) invested:and. reinvested, as.: described and -

. . subject'to .the'- limitations. set. forth in Section '

2.4, but only.to the extent that;the: assets!of'such .;

Trust ' Fund are. not- currently . required' for the purposesadescribed in clau ses (a) and-(b) above; (d) transferred;to another trust : established by the , Company or by. any governmental : instrumental-ity having jurisdiction over the decommissioninguof nuclear generating plants for the - purpose. of ? fund-ing the Company's costs of nuclear generating, plant Decommissioning; and '

(e) distributed to the Company, if-andito the extent.it is determined that-the aggregate' assets.

of-such Trust Fund ~ together, vita its Related Trust Fund are in excess of what is req'uired to satisfy.

the: purposes described' in clatses- (a) and.(b)-

above;.provided that, in the case of any Qualified Trust Fund, no such distribution may'b6 made unless such distribution would constitute a withdrawal of Excess -Contributions or would otherwise be a l

distribution permitted to be made f rom a Qualified

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

a.. OF . 1

,;- Nuclear =.: Decommissioning _ Reserve Fund under Applicable Tax Law. .

2.2.2. . The assets of each- Qualified. Trust Fund! ,

may be transferred to its Related Non-Qualified. Trust Fund at the-direction of the Company-(a) in whole, to the extent:that such

-Qualified-Trust Fund has been terminated for purposes of Section 468A of the Code and (b) in. part, to_the-extent of any Excess Contribution made to such_ Qualified- Trust -Fund. Subject to the -

requirements of Applicable Tax La w , , the _ assets of each Related-Non-Qualified Trust Fund may be transferred, in whole or in part, to the Related' Qualified. Trust Fund, at any timeiand from' time to-time, at'the directionlof'the_ Company.

2.2.3. Upon. receipt of- a Company Distribution i Order, the Trustee shall make, payments f rom the Trust Funds (or any' Trust Fund) or transfers of assets as between_the Trust Funds-in accordance' therewith. {

Section 2.3. Comming11ng of Assets.- .No' part of the t assets of any Trust Fund may be invested or otherwise commingled-  !

with the monies or other. assets of any other trust or trusts  ;

except as permitted or required' 'by .-Applicable Law and, in the-case of any Qualified Trust ' Fund, subject to the requirements of Applicable ,TaxsLaw. ~~Notwithstanding anything to the contrary '

contained in this Agreement, inino . event shall-the~ assets of any:

Qualified Trust Fund and of- any Non-Qualified Trust' Fund be '

co'uningled- unless otherwise permittedibyi Applicable Tax- Law. -

Section~2.4. Permitted Investments ,

i 2.4.1. Subject to subsection 2.4.5, the assets I'

of each: Qualified Trust Fund may be-invested and reinvested from time to time only in the following investments: 1 (a) Public Debt Securities of :the United States of America; (b) obligations of any State or local, govern-ment in the United' States of Americanthat areLnot.

in default as to principal or interest.and-the.

interest on which is exempt from tax under .Section 103(a) of_the Code; (c) time or demand deposits (* including ' check- )

ing accounts, savings accounts, certificateslaf

. deposit and other . time or . demand deposits) in a in the United ~ States Bank or Credit Union located ,

of America; and l (d) any other investment-in which assets of a

- Qualified Nuclear Decommissioning Reserve Fund may be invested under Applicable Tax Law.

~3~__.__._

i . . _ . _ _ _ _ - _ _ _ _U

1

,. 1 I

2.4.2. Subject to subsection 2.4.5, the assets of each Non-Qualified--Trust. Fund may-be Invested.and reinvested from time to time as the Trustee may, subject to any Company Directive, in its discretion determine.

-2.4.3. Subject to Section 2.5 and subsections 2.4.1 and 2.4.2 hereof, the Trustee .may invest all or part of the -

assets of 'the Trust Funds in interest-bearing, deposits with ,'

l AmeriTrust Company National Association,- in its capacity as a banking association, including but not limited to time deposits,

, . savings deposits, certificates of deposit or time accounts.  !

! 2.4.4. The assets of the Trust Funds.shall'be >

l invested and shall not be held in-cash except to the: extent that cash holdings are consistent with prudent risk management in l light of general economic. conditions from time to time existing ,

and except to .the- extent that cash- shall' -be reasonably and currently requi' red- for the purposes described in Section H2.2 hereof. Such investments shall be made in a manner calculated.to

, optimize the after tax earnings of the . Trust Funds, giving consideration to liquidity,. risk, diversification .and other prudent investment objectives. In order.'to optimize .the.

financial performance of the Trust Funds,' the: Trustee shall.

(

consult;with- the ' Company sfrom. time .to -time .as to the tax consequences to the Company 1and the Trust- Funds of = investments of.

~

{' the assets thereof and the anticipated requirements of the Trust in light of the , purposes set forth in- this r Agreement. - 1 2.4.5. Notwithstanding.anything to the contrary herein contained,=none of the assets. of any Trust Fund may be invested in any investment' which would not be permitted under 1 l Applicable Laws ' then in ef fect of the Federal government of the United States of America or the Stateaof Ohio including, without limitation, Federal and Ohio laws relating or applicable to the investment of trust funds established for the purpose :of funding the costs of decommissioning nuclear generating plants.

l Section 2.5. Company Directives. The Company reserves -

the right to, and may, subject to the limitations set forth in Section 2.4, at any time and from time to time, direct the Trustee pursuant to a Company Directive, as to the investment of all lar any part of the assets' of the Trust Funds- (or either Trust ,

rund). ,

2.5.1. Each such Company Directive shall specify i 'those assetscof>the Trust Funds with respect to which the Company intends to exercise investment control and provide specific L -

instructions with respect to the investment thereof. The Trustee shall comply with each such Company Directive and shall have no duty to question the. instructions therein contained, or to moni-tor or review any investment .made pursuant.to any such Company Directive (other than to take such actions as are expressly re-

.. 4

, I l

a E'

+ quired i by thes terms c-of - such company Directive and to maintain

-books and records and: provide statements of account;with respect-to transactions effected--by the Trustee pursuant.to such Company Directive in-accordance. with the provisions of Article VII of j this Agreement) . j 2.5.2. The= Trustee shall be; entitled to rely on each such Company Directive until such time.as the Company shall revoke such Company Directive by giving' written notice of tho' revocation thereof.

2.5.3. Those assets of the Trust Funds which are -l not subject to a' Company Directive then in effect shall be in-  ;

vested and reinvested by the Trustee'in accordance with the pro-visions of Section 2.4. ,

i ARTICLE III  !

CONTRIBUTIONS BY'THE COMPANY Section 3.1. Nature of Contributions. Company contri-butions to each-Trust ~ Fund shall be made in cash, securities or other property, as the Company shall > elect,xprovided that, in the -

case of'ench Qualified- Trust- Fund, Company. contributions shall' L

v.,s :onlyrbe made in cashi . or- other - property,a if any,' which may be; f- contributed to a > Qualified Nuclear. Decommissioning . Trust . Fund L under Applicable Tax Law; and- provided--further, that non-cash Company contributions to any Trust Fund shall. be made only in l such securities or other property as -would in: each case' meet the- ,

L requirements of Section- 2.4 of this- Ag reeme nt- for Permitted l ' Investments with respect to such Trust Fund.

l SectionL3.2. Contributions. The Company-may-deposit ,

with the Trustee contributions to the Trust Funds'(or.any Trust Fund) from time to time and at any time and in such_ amounts as the Company shall determine to be necessary' or desirable for l~ compliance with its Decommissioning obligations under_ Applicable Law. or otherwise . The Company shall,.at the time of making any deposit pursuant to this Section 3.2, instruct the _ Trustee in writing as_to the allocation of such deposit as among the-Trust Funds and the Trustee shall .not accept any such deposit in the absence of instructions with respect to the allocation thereof.

l ARTICLE IV-

• INDEMNIFICATION OF THE TRUSTEE 4

l Section 4.1. Indemnification.. The- Trustee shall have no liability hereunder. to any Person, except for liabilities arising out of its own bad faith, -gross negl'igence (or, with respect to distributions of funds other than in.accordance with

' Company' Distribution Orders of . the. - Company , pursuant to Section 2.2, its negligence) or willful misconduct, and shall be respon-7 i -

sible for the performance of only such duties as are specifically .

set forth in this Agreement. The Company hereby agrees to indem-nify and hold harmless the Trustee from and against any and all costs, expenises or liabilities (including attorney's fees) which may be incurred by, or asserted against, the Trustee by reason of ,

its acting as Trustee under this Agreement (whether or not in-curred while acting as Trustee), except for such costs, expenses and liability arising from the Trustee's bad faith, gross negli-gence (or, with respect to distributions. of funds other than in accordance with Company Distribution Orders, its negligence) or willful misconduct.

ARTICLE V i QUALIFICATIONS, DUTIES AND POWERS OF THE TRUSTEE Section 5.1. Qualifications of the- Trustee. The Trustee shall (a) be a commercial bank or a trust company in the nature of a bank organized under the laws of the United States or any State thereof, (b) not be an Affiliate of the Company, and (c) have a combined capital and surplus of not less than S250,000,000. If at any time during the term hereof the Trustee shall not meet the requirements for qualification as trustee as set forth-in-the preceding . sentence, the: Trustee shall promptly

' notify thatcompany'and each, Owner- Participant of such, fact and, at the request of the Company, shall resign. as Trustee. .

Section 5.2. Duties of the Trustee. The Trustee shall (a), hold, invest and reinvest the assets of the Trust Funds as provided in this-Agreement, (b) with respect tus each Trust Fund, record all charges, credits and other transactions with respect to each Trust Fund, whether executed in accordance with Company

'Di'rectives, Company ' Distribution Orders or otherwise , and (c) make payments and distributions from the Trust Funds only for the purposes described in Section 2.2 and in accordance with Company Distribution Orders. Subject to Applicable Law and -except as otherwise directed by the Company or as otherwise provided in this Agreement, the Trustee may and hereby is expressly autho-rized and empowered to:

(i) vote any bonds or other securities, give general or special proxies or powers of attorney-with or without power of substitution, exercise any i conversion privileges, subscription rights or other options and make any payments ine'idental thereto, consent to or otherwise participate in corporate

-reorganizations or other changes affecting corpo-rate securities and delegate discretionary powers and pay any assessments or charges in connection therewith, and, generally, exercise any of the powers of an owner or holder with respect to secur-ities or other property held in the Non-Qualified

.- 1

8' .

4'8 j

]

.i }

-Trust Fund' and,. to - the -extent applicable, the Qualified Trust Fund; ,

(ii) make, execute, acknowledge and deliver i any and all documents .of transfer and conveyance and any and all other instruments that may be-

• necessary or appropriate t o -- carry. out the powers:  !

herein granted;.

register any investment held in either (iii)

Trust Fund in its' own name or in the name of a nominee and to hold any investment in bearer form, _,

or deposit or arrange for the deposit of any secur- .

ities issued by the Federal government of the  !

United States of America, mentality-thereof, with- . auorFederal any agency reserve or instru-bank, provided , however , the Trustee will be responsible .

for the acts-of.its nominees;-

(iv) employ . agents ,- attorneys. (who .may-~ be-counsel to the Company)- and'depositaries as may be reasonably necessary in the. administration of the-Trust Funds; and 4

s-(v) 4 maintain cash balances: to meet ~antici-pated distributions: 'frosi ' or. administrative ex- "

(_ penses of, the Trust Funds.

Section 5.3. Authority with respect- to Amounts and Sufficiency of Contributions.. The Trustee. shall have no .respon-

. sibility or authority in connection with the determination of the - ,

amounts to be deposited with it from time to time:as contribu-

'*tions'of the Company, nor shall- it have any authority on behalf of any Person to bring any action or. proceeding to, enforce.the collection of any such amount.

Section-5.4.- Duties Not Expressly Undertaken. No duties or obligations shall be imposed.,upon .the - Trustee -with .  ;

respect to the Trust Funds unless- they shall have been specifi--

E cally undertaken by the Trustee by 'he express terms of this t, - Agreement or other written agreement to .which.the Trustee is a party, or are otherwise imposed upon the Trustee by Applicable Law, t

I ARTICLE VI'

TAXES AND EXPENSES-

~

Section 6.1. Non-Qualified Trust Funds.

6.1.1. All taxes of any kind that may be

- assessed or levied against or in respect of.the income or assets of any Non-Qualified Trust Fund, including income-taxes, if any, i

i L 1

I y-l l .shall.be paid from the assets of such Non-Qualified Trust Fund '

whether or not such Trust Fund is, for such purposes, deemed to l be a. taxpayer under Applicable Law. To.the extent any such tax i obligation is a tax obligation of the Company under Applicable Law, the company shall have the right to be reimbursed therefore from the assets of' such Non-Qualified Trust Fund and each such '

reimbursement shall be deemed to be a distribution of assets of-L such Trust Fund authorized pursuant to Section 2.2.l(b).

I 6.1.2. All brokerage commissions incurred by any.

Non-Qualified Trust Fund and all other ordinary and ne';essary administrative costs and incidental expenses incurred by the Trustee in connection with the administration and operation of such Non-Qualified Trust Fund (other than.those properly allo-cable to and payable from the- Related Qualified Trust Fund),

including, without limitation, legal expenses of agents or attor-neys-employed by the Trustee (whether or not arising out of a r judicial or administrative proceeding and whether or not. incurred l' while it is acting as Trustee), accounting expenses, actuarial expenses, such compensation to the Trustee as may be agreed upon from time to time between the Trustee and the Company on a basis no less favorable to the Company than that which the Trustee I generally affords to like customers for ' like . services, and all.

l other proper charges and disbursements of the Trustee which are L- allocable.to such Non-Qualified., Trust. Fund shall:be: paid from

! such Non-Qualified' Trust Fund.

N l Section 6.2. Qualified Trust Funds. oAll taxes imposed l under Section 468A(e)(2) of the Code and the regulations there-l under and all State and local taxes- imposed on the income or assets of any Qualified Trust Fund shall be paid from such Quali-fled Trust Fund and the Trustee shall prepare and timely file, with'the-cooperation.of the Company, all Federal, state and local tax returns required to be filed by such Qualified Trust Fund under Applicable Law. All other ordinary and necessary expenses incurred by the Trustee in connection with the' administration and operation of any Qualified Trust Fund and, to the extent properly allocable to such Qualified Trust Fund (including,.without limi-tation, legal expenses (whether or not arising out'of a judicial or administrative proceeding and whether or not-incurred while acting as Trustee), accounting expenses, actuarial expenses, compensation to the Trustee and all other proper charges and l disbursements of the Trustee which are allocable to such Quali-fled Trust Fund) shall be paid from such Qualified Trust Fund to .l the extent such expenses are permitted to'be paid from a Quali-fled Nuclear Decommissioning Reserve Fund under Applicable Tax i Law. l Section 6.3.. Trustee's Compensation and Expenses. If, and to the extent that, the assets of any Trust Fund are insuf-ficient to pay the compensation to and/or the expenses of the Trustee allocated thereto, as set forth in Sections 6.1. 2 and

. 6.2, thenisuch. compensation =to . and/or expenses of the Trustee shall be-paid by the Company.

ARTICLE VII ACCOUNTINGS BY THE TRUSTEE Section 7.1. Inspection of Books and Records. The Trustee shall,-with respect to each Trust Fund, keep separate, accurate and detailed accounts of- all investments, receipts, disbursements and other transactions hereunder, and all accounts, books and records relating thereto shall, at all reasonable  !

times, be open to inspection and audit by the Company and its  !

agents.

Section 7.2. Statements of Account. Within 30 days

.following each March 31, June 30, September 30- and December L31 of eachoyear, commencing 30 days- following September ~30, 1988, the Trustee shall' provide to the Company a written statement of account with respect to each Trust rund setting forth all-invest-ments, receipts, disbursements and other transactions effected by-it during the three calendar ' month period ending on such-March 31, June 30, September 30 or December 31 (as the case may be). Within 30 days,following:sthe resignation:or removal of tho' ,

N- Trustee, the-Truttee shall--provides (a) .to the Company a written:. I statement'of account. with respect--to each Trust Fund-setting s- forth all investments, receipts, disbursements ^and other.transac-tions effected by it during the. period. commencing on the day next.

following thr, last day of the- period covered by:the last state-ment -of account 'provided by the' Trustee pursuant to the preceding sentence, through and including the- date of such ruaignation,, and

-(b) to the Company and the successor. trustee a statement of all r- - of-its fees and expenses remaining Junpaid as of the time it l delivers the statement of account required-pursuant to clause (a) above, which fees and expenses shall be paid by the successor

trustee upon approval by and receipt of written instruction from the Company.

Section 7.3. Persons Entitled to Accounting. No Person, other than the Company, may demand an accounting by the Trustee hereunder or may. institute any action or proceeding

-against the Trustee or the Trust.

l ARTICLE VIII REMOVAL OR RESIGNATION OF THE TRUSTEE l

Section 8.1. Resignation or Removal. The Trustee may l be removed by the Company at any time- upon 60 days' notice in writing to the Trustee and the Trustee may resign at any time upon 60 days' notice in writing to the Company. Upon such  ;

removal or, resignation, the Company shall appoint and designate a i successor trustee meeting the requirements of Section 5.1 of this i l

\q 3

l -

.1 , (,

o< -.mAgreement,uand upon acceptance of.suchl appointment, such succes-sor trustee shall have the powers and-duties of the-Trustee here-

-under, and the--fundstand-properties then constituting each of-the Trust Funds shall be assigned,- transferred and paid over to such

, successor trustee.

Section 8.2. Failure to Appoint Successor Trustee. If for any reason the Company shall tail to appoint a successor  ;

trustee upon the resignation or removal ofLthe Trustee, as pro- j vided in Section 8.1, the Trustee may apply to a court of compe-  !

tent jurisdiction for the appointment of a successor trustee.

ARTICLE IX l ACTION BY THE COMPANY

)

Section 9.1. Authority to Act. AnyL action 'of the  !

i ~-Company required'or permitted under this Agreement may be taken by the Board of' Directors-of the Company, or any committee there-

. of having authority.to act upon matters relating hereto, or by any of ficer, employee or agent of the Company duly authorized by its Board of Directors to act on its behalf in such respect. Any such action of the Company 'or : authorization to act,on' behalf of the Company shall be evidenced by; a resolution- of its Board of

. ., Directors = certified to, tho', Trustee over the signature ofnthe-

' Secretary or of any Assistant- Secretary- of the Company, and the s Trustee shall be fully protected in acting'in accordance with- <

such resolution so certified .to it. The Company shall furnish j the Trustee from time to time' with6 certified copies.of resolu-tions of its Board of Directors- evidencing the appointment and  ;

authorization of any committee,' officers, employees or agents of the Company or of any other person authorized by the Board of n ' Directors +to act.under this Agreement, and the appointment and authorization of any successors thereof.

I tions, Etc.

Section 9.2. Reliance of Trustee-on Written Certifica- '

All certifications, Company Distribution orders, Company Directives, requests, instructions and objections of the Company to the Trustee shall be in writing and the Trustee shall act and shall be fully protected in acting in accordance with-such certifications, company- Distribution Orders, Company Directives, requests, and instructions and shall have no duty to question or verify the same.

Section 9.3. Certain Information.' The Company shall provide to the Trustee (a) as promptly as practicable after the issuance thereof, a copy of each order, license, revenue ruling -

or similar action by which the Company is bound by any Govern-

. mental Authority which arises out. of any proceeding to which the Trustee was not a party, 'and which imposes any obligation, limitation or restriction upon the management and operation of

-the. Trust lie any obligation of limitation,upon the Trustee with respect to its performance hereunder and (b) from' time to time during the term hereof, such other information as the Trustee may j

. .- j l

. i I

$ .ureasonably request-itoE enable- it- to perform = its obligations hereunder.

ARTICLE X AMENDMENT OF AGREEMENT Section 10.1. Amendments. Except.as otherwise provided-in this. Agreement, the Company may, at any time and from time;to

. time, amend, in whole or in part, any or all of the provisions of-this Agreement upon: written notice thereof to the Trustee. No amendment which affects the rights, duties or responsibilities of the Trustee may-be made without its consent, and no' amendment shall' authorize or permit- any part of the corpus or income of the -  !

Trust Funds to be- used for or diverted to purposes _other than those described in Section 2.2.

ARTICLE XI TERM OF'THE TRUST  !

Section'11.1. Termination at the Option of the Company.

Subject to the requirements of h311 cable . Law, - the Company may. "

terminate the Trust at- any. time' prior. to expiration of the : Trust p*- term: (as set . forta in . cSection ,11.2) . uponi written notice to. the -

Trustee.

Section 11.2. Trus t Te rm . . In ,no, event shall the-Trust i extend for a . term longer than the earlier of (a),the date which-shall be thec 21st- anniversary =of the< death of. the last1 survivor.

of all of-the now living lineal descendants ofLJoseph P. Kennedy, father of President John F. Kennedy -and (b).the date of final

' payment of all 'the costs of Decommissioning the- Nucloar Generating Units.

Section 11.3. Final Distribution of Trust Fund Assets.

Upon termination of the Trust, the Trustee shall distribute the remaining assets of the Trust Funds ' pursuant to a Company Distri-bution order in accordance with Section 2.2.

ARTICLE XII DEFINITIONS Section 12.1. De f initions . For pu'rposes of this Agree-ment, the following capitalized te rms shall have the following meanings:

" Applicable Law" shall .mean all applicable laws, statutes,- treaties, rules, codes, ordinances, regulations, certificates, orders, interpretations, licenses and permits of

anycGovernmental Authority and judgments,; decrees, injunctions,_

writs, orders or like action of any court, arbitrator or other.

._ _ __ ._ _ _ . _ _ . _ .. _ _ _ ____. ~_. _

l l -

t L

i l .

t judicial.or~ quasi-judicial. tribunal of competent jurisdiction l (including those pertaining to health, safety, the environment or  ;

otherwise). ,

l

" Applicable Tax Law" shall mean Section 468A~of tho' Code (or any comparable subsequent provision of the Code) and the  ;

regulations thereunder,. and any other provision of the Code I relating to the Federal taxation of the Trust Funds.  !

" Bank" shall have the meaning set forth in Section 581 .

5 of the Code.

" Business Day" shall mean any day other than a Saturday-or Sunday or other day on which banks'in Ohio are authorized or  ;

~

obligated to be closed.

" Code" shall mean the Internal Revenue Code of.1986,,as i

>, amended, or~any; comparable subsequent law.  :

" Company" shall mean The Cleveland' Electric Illuminating

. Company, an Ohio corporation, or .its successors -or assigns ,

hereunder, j

" Company Directive" shall mean any written directionstof i L< the Company to.the Trustee,1Las -described in:Section 2.5,-as-to  ;

F- '

• the- investment of sall' or part of the. assets of . the; Trust Funds.

N

" Company Distribution, order' shall mean- any written f instructions.of the Company to the; Trustee, pursuant to which the Company directs the Trustee- to distribute .or transfer all or part j of the assets of the Trust Funds, which- -instructions shall  ;

include a certification by an officer of. .the Company that the  :

edistribution_or transfer requested is permitted - by and in accor- }

dance with the provisions of Section 2.2. -

" Cost of Service Amount" shall mean, with respect to- l each Nuclear Generating Unit during any taxable year, the. amount of the costs of Decommissioning to the Company for such~ Nuclear l Generating Unit included in ~ the Company's cost of service for r ratemaking purposes for such taxable year, but only to'the extent i such costs are directly or indirectly charged to customers of the l Company by reason of electric energy consumed during such. taxable .,

year or are otherwise required to be included in the Company's ,

income under Section 88 of 'the Code and the regulations thereunder. .

" Credit Union" shall mean any insured credit union with-in the meaning of Section-101(6) of the Federal Credit Union Act of 1932. .

" Decommis sioning " shall mean, with respect to any ,

Nuclear. Generating Unit, the decommissioning.and retirement from l

-R - . . .. :

, ;L T

~

' A commercial- service of such Nuclear Generating Unit, all in accor-dance. with Applicable Laws.

" Excess Contribution" shall mean- the- amount by which contributions to-any Qualified Trust Fund during any taxable year OKeeed the Maximum Qualified Contributions for such Qualified Trust' Fund during such taxable year.

" Governmental Authority" shall mean any Federal, state, county, municipal, foreign, international, regional- or other governmental authority, agency, board, body, instrumentality or  ;

court including, without limitation, the United States Nuclear Regulatory Commission and the The Public Utilities Commission of I Ohio.

" Maximum Qualified contributions" shall mean, with

. respect to each Qualified Trust Fund during any taxable year, an

. . amount equal-(a).to the lesser of (i) the. Ruling Amount for such taxable year or' (ii): Cost of Service Amount for such Qualified- 1 Trust Fund during such taxable year, or (b) such greaterr amount -

l as may'be contributed to such Qualified Trust Fund during any j taxable year under Applicable Tax Law. i "Non-Qualified Trust Fund" shall 'mean,cany Trust Fund. 1 4

established under-this Agreement:which isonot a-Qualified. Nuclear-Decommissioning Reserve ' Fund. 1

{m', c

" Nucle ar - Generating Units" shall mean those nuclear q units identified as such on. Schedule.I hereto. '

" Person"' -shall mean any individual,1 partnership,-

corporation, trust, unincorporated association or joint venture, a government or any , department or agency thereof, or any.other entity.

"Public Debt Securities" shall mean any of Treasury bills,- Treasury notes, Treasury bonds and savings bonds issued by the Federal government of the United States of America.

" Qualified Nuclear Decommissioning Reserve Fund" shall mean a " Nuclear Decommissioning Reserve Fund" within the meaning of Section 468A of the Code.

" Qualified Trust Fund" shall mean any Trust Fund estab-lished under this Agreement which meets the requirements for a Qualified Nuclear Decommissioning Reserve Fund. '

"Related" shall mean, with respect to each Qualified Trust Fund established for the Decommissioning of a particular E= Nuclear' Generating Unit,'the Non-Qualified Trust Fund which has been established for the Decommiss ionir.g of the same Nuclear

. Generating Unit and, with respect to each Non-Qualified Trust Fund established for the- Decommissioning 'of a particular Nuclear

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

4 l

Generating' Unit, the Qualified. Trust Fund which has been estab-lished for the Decommiss ioning - of the- same Nuclear Generating Unit.

" Ruling Amount" shall mean, with respect to=any taxable year, an amount determined in accordance with Section 1.468A-3 of the regulations of the Internal Revenue . Service, as in effect and as may.be amended from time to time.

t i

l " Trust" shall have the meaning set forth in Section 1.1 of this Agreement.

"T:ust Funds" and " Trust rund" shall have the respective meanings set forth in Section- 1.1 of this Agreement.

ARTICLE XIII

. MISCELLANEOUS PROVISIONS AND EFFECTIVE DATE F

Section 13.1. Notices. All : notices, reports and other in 'ormation required or permitted to be given or delivered here-

, under shall be ir. writing and shall be deemed given when deliv-l ered in person, or on the fourth day af ter being deposited in the.

United States mail, postage. prepaid, registered- or certified mail, addressed as follows:

r-

% If to the Company:

The Cleveland: Electric Illuminating Company

, c/o, Centerior Energy Corporation  ;

i 6200 Oak Tree Boulevard I independence, Ohio 44131 Attention: Treasurer If to the Trustee:

AmeriTrust Company National Association l t 900 Euclid Avenue '

Cleveland, Ohio 44114 l Attention: James Russell, Vice President H l l L and/or to such other respective addresses and/or addressees as may be designated by notice given by either party in accordance.

with the provisions of this Section 13.1.

L Section 13.2. Severability.. Any- provision of this

^

Agreement which is prohibited or unenforceable in any jurisdic-tion shall, as-to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or'unen-forceability in any jurisdiction 'shall not invalidate or render unenforceable such provision in any other jurisdiction-

, , f,1 7

Section 13.3. Separate Counterparts. This Agreement may be executed by. the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but-one and the same instrument.

Section 13.4. ' Successors and Assions. All covenants-and agreements contained herein shall be bindi , upon, and inure to the benefit of, the Trustee and its successors and assigns and the Company and its successors and assigns, all as herein pro- i vided. Any request, notice, direction, consent, waiverJoe other instrument or action by the Coacany shall: bind the successors > and assigns of the Company.  ;

Section 13.5. Readingc. The headings. of the various 4

Articles and Sections herein are for convenience of reference i

. .only and shall. not define or limit .any of the terms or provisions t hereof. J Section 13.6. Governing Law. This Agreement shall in all respects be governed by, and construed.in accordance with the

, laws of the State of Ohio,. including all matters;of; construction, ,

validity and performance..

F,,, Section-13.7. ' Administration of Trust.- The principal.

(. place cf administration of the Trust .shall be'the principal.

office of the Trustee.

Section 13.8. Performance by tho ' Company. - Any'obliga-tion of the Company with respect to Decommissioning hereunder or. -

pursuant to Applicable Law may be. performed by the Company and

. any<such performance shall -not be construed as a revocation of the trusts created hereby.

I i-i

.k e

/ IN WITNESS WHEREOF,-the parties hereto have caused this

' Agreement'to-be' executed- by- their respective officers thereunto l duly authorized as of the day and year first above written.

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY s

By:

'l Title 4 l

President ATTEST:

' fb "

, Title , ,

V AMERITRUST COMPANY NATIONAL ASSOCIATION, not in its individual-capacity, but so'.ely as Trustee By: mM Tit /  %

ATTEST:

i l

\ ,Js u)r 0 64 i

.ap, ,.

.c i -

SCHEDULE I (

NUOLEAR' GENERATING UNIT RELATED TRUST FUNDS 1.- Davis-Besse Power a. Davis-Besse Station Unit No. 1- -Qualified Trust Fund.

b. Davis-Besse' Non-Qualified Trust Fund i

2. Perry Power Station a.. Perry Qualified Unit No. 1 Trust Fund- ,

.- b. Perry'Non-Qualified Trust Fund -

~

i l

3. Beaver Valley Power a.. Beaver. Valley Qualified-Station Unit No. 2' Trust Fund

b. Beaver: Valley Non-s Qualified Trust Fund i l

'l l

'l l

l 1

l l

l 1

l l

r ,

i l

+.

,,,.-...-..,,,m.,,..,-~n,- , ,-, .

,. , 1

'....v

.,.- ' j t'

i I

I' SCHEDUE.E . II. ]

' Allocation of Initial ~ Contributions- d Davis-Besee Non-Qualified Trust Fund . 3100 Davis-BesseE Q ualified Trust Fund -0

-]

- Perry Non-Qualified- Trus t - Fund 100  ;

.i Perry Qualified ' Trust: Fund 0 Beaver Valley Qualified Trust Fund _

100 - ,

I H- , , Beaver: Valley Non-Qualified Trust Fund 0 l

. Aggregate Initial Contributions ^ S300 1

N I .

i 1

l l'

l l

l l .

1 u

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

,0+ '

a EXHIBIT B-2--

. EVIDENCE OF AUTEORITY

' .I , - E . LYLE PEPIN, do hereby certify-that I am Secretary of The Cleveland Electric' Illuminating Company ("Companya) and that Lyman Phillips was the duly elected and actingLPresident of the; Company on. July 1, 1988'and,. by virtue of holding.such offics,.

~

was authorized to execute on behalf of the Company the Master Decommissioning Trust Agreement' dated as of July 1, 1988.

In witness whereof; I have hereunto signed my name:this b day of July, 1990.

$b E. Lyle Mpin Secretary 7 Sworn to and subscribed-before me this: .h

h. day of July, 199.0- 1 p,

hMrb , A '

v. ll l;, ., ~ . .

N 0-N l

\, ' ' ' *  : JOSEPH C. SIWEJKOWSKI N

i tw.y rume, sn= w as ce, cw. i g/ li - My Consessman homes July 14. 1991

-Y, p

i L

l.

1, l'

I .l i

, EXHIBIT B 1 EVIDENCE OF AUTHORITY j STATE OF' [ h

-To Wit:

CITY OF-1

.g On this:= ~

/'/ d day of-- dm b , before m , a. notary public in and for the city..and s@nted foresaid,-personally appeared .

i James R.1 Russell, and he did Wapose and say that he is the Vice President of Ameritrust Company National Association,--Trustee, which executed the-Master Decommissioning Trust Agreement dated' 'i as of July 1, 1988 between The Cleveland Electric Illuminating-, ~

q

' Company and Ameritrust company National Association, and that he i

signed his-name thereto by order of:the Association. y y

i.

.', 0 W r.<a

. 'V ' . 'l1l -}j*?,/.

{& QQ "#r 4 VLaw .,

//

.'M y, Commission Expires: -. .. ..

)J NF has ao e'M det.

. g',,,

i f.

?

i Y:

"j

//',

3 . * .'s ,

Section 147.03 R.C. 'i e ~fe ( ,,

• ) .\

.'tnn n ,

l l

l l

EXHIBIT C

' CLEVELAND? ELECTRIC, ILLUMINATING' COMPANY:

, Decommissioning Funding Schedule.

for December 1989

' Perry Nuclear Power Plant Unit No. 1

Year Contribution Interest Fund Amount

---... ------------ --------.y-- ------------

1988- 485,630 2,565- 488,195

-1989 971,261' 88,135 1,547,590 1990 971,261 44,731 2,563,582-1991 971',261 67,083- 3 ,.6 0 1 , 9 2 5 -

1992 971,261 89,926 4,663,112 1993 971,261 113,272 5,747,645-1994 971,261 137,132 6,856,038 ,

1995 971,261 161,517 7,988,815' j 1996 971,261 186,4384 9,146,513 1997 971,261 1211,907' - 10,3 2 9,681~

1998. 971,261 -237,937 -11,538,878 1999 971,261 264,539 12,774,678 2000 .971,261 291,727 '14,037,666 2001 971,261 319,513- 15,328,439 2002 971,261 347,910 16,647,609

-2003 971,261 376,931 17,995,801; -

2004 971,261 406,591 19,373,653-2005 971,261 436,904- -20,781,818 2006 971,261 467,884 22,220,962.

2007 971,261 499,545 23,691,768 2008 971,261 531,903 25,194,931 2009 971,261 564,972 26,731,164 2010 971,261 598,769 28,301,194 2011 971,261 '633,310- '29,905,765 j!

2012 971,261 668,611 31,545,636:

2013 971,261 9 704,688 33,221,584 .i 2014 971,261 741,559 3 4 , 9 3 4', 4 0 4 - ~I 2015 971,261 779,241 36,684,905 2016  !

971,261 817,752 38,473,917f, 1 2017 971,261 857,110 40,302,288' j 2018 971,261 897,334 42,170,883 j 2019 971,261 938,443 44,080,587J '

2020 971,261 980-457 46,032,304 2021 971,261

.i 1,023,395 48,026,959' 2022 971,261 1,067,277 50,065,497 <

2023 971,261 1,112,125 52,148,882 2024 971,261 1,157,959 54,278,102 t 2025 971,261 1,204,802 56,454,165' }

2026 283,083 1,245,106 57,982,353 *'

• NOTE: Amount greater than required by calculations set fourth-in 10 CFR Section 50.75(c) i

.....i....... -

BEFORE THE i UNITED STATES NUCLEAR REGULATDM> COMMISSION TOLEDO EDISON COMPANY Docket No. 50-440 DECOMMISSIONING REPORT i

TOLECO EDISON COMPANY (Company)-hereby submits this Decom-missioning Report in compliance with 10 C.F.R. sections 50.33(k) 1 and 50.75(b). '1

1. The Company owns a 19.91% undivided interest in' Unit No.

1 of the Perry Nuclear Power Plant.

2. The company hereby certifies that financial assarance for decommissioning the Unit is provided in the amount of at least $33.84 million. The calculation of this amount is set forth in Exhibit A and complies with the formula set forth in 10 C.F.R. section 50.75(c) and shall be adjusted annually in confor-n.ance with that section.

3. Tne method by which the company.will provide financial assurance for decommissioning the Unit will be by establishment of an external sinking fund in which deposits will be made at i least annually.

o

4. Attached as Exhibit B-1 to this Decommissioning Report is a true and correct copy of the executed trust instrument for the external sinking fund. Attached as Exhibits B-2 and B-3 to this Decommissioning Report are true and correct copies of Evidence of Authorities indicating that the parties signing such trust instrument ate authorized to do so.

5. Attached as Exhibit C to this Decommissioning Report is a schedule for implementing the method of providing financial as-surance for decommissioning the Unit.

TOLEDO EDISON COMPANY COMPANY Murray R. Edelman who, being duly sworn, deposed and said that (1) he is Executive Vice President - Power Generation of the Centerior Service company, (2) he is duly authorized to execute and file this report on behalf of The Toledo. Edison company,.and (3) the statements set forth therein are true-and correct to the best of his knowledge, information and belief.

141N

~

1Ag%

Murr# R. Edelman Sworn to and subscribed before me, this I day of JULV ,

WO .

~ '

yv shek O. h# b c JOSLPH C $1WUKOWSY1 Metry MMi, stem a 0% cun. nr.

hty Gem?leux1 RApire IJty 14, WI -

i i

EXHIBIT A THE TOLEDO EDISON COMPANY Calculation of Minimum Financial Assurance Amount for December 1989 Perry Nuclear Power Plant Unit No. 1 Ohio Regions Labor (L) = Va3"* ior Midwest En rgy (E) = East mosLh Central value W3Cte Burial (B) = So. Carolina BWR Fcr BWR Unitt Calculated NRC Escalation Factor Factor Factor La 1.149 x 0.65 = 0.747 E= 0.867 x 0.13 = 0.113 B= 1.814 x 0.22 = 0.399 1.259 Bace Amount in millions for BWR greater than 3400 MWt =

(P = power level of unit in megawatts thermal)

$135 (million)

Eccalated Amount for unit = $135,000,000 Base Amount x

1.259 Escalation Factor

$169,965,000 Escalated Amount t Escalated Amount for Toledo Edison Company's ownership interest of 19.91% at E0Y December 1989 169,965,000 x 0.1991 t

$33,840,032

=

1

i

.... EXHIBIT B-1 ADM!NISTAAT!ON COPY s

. 1 r ..

I

s. *

- II I2 O - ' ' ? O/r l I '

i{ ' ' . 1 ): .

Q).

Jins.: a ;gsg WM OF COUNSEL 4

MASTER DECOMMISSIONING TRUST AGREEMENT

. dated as of July 1, 1988 3.e...n .

i THE TOLEDO EDISON COMPANY and AMERITRUST COMPANY NATIONAL ASSOCIATION, as Trustee s

.j l

Table of Conten:s l i

Page Number ARTICLE I ESTABLISHMENT AND DECLARATION OF' TRUST 1.1 Establishment of Trust ............ 1 1.2 Declaration of Trust .. ............ 1 ARTICLE II PURPOSE OF TRUST; USE OF TRUST ASSETS 2.1 Purpose of Trust . . ... . ............ 2 2.2 Permitted Use of Trust Funds....... 2 2.3 Commingling of Assets .. ........... 3 2.4 Permitted Investments ............. 3

2. 5 ' Company Di rec t ive s . . . . . . . . . . . . . . . . . 4 j

. 1 ARTICLE III CONTRIBUTIONS BY THE COMPANY 3.1 Nature of Contributions ........... 5 3.2 Contributions .. .. . ....... . . . . . . . . . . 5 j l

ARTICLE IV INDEMNIFICATION OF THE TRUSTEE l 4.1 Indemnification ................... 5 ARTICLE V QUALIFICATIONS, DUTIES AND POWERS  ;

OF THE TRUSTEE 5.1- Qualification of the Trustee ...... 6 5.2 Duties of the Trustee . ............ 6 5.3 Authority with respect to Amounts and Sufficiency of Contributions .................... 7 i 5.4 Duties Not Expressly- Undertaken . . .- 7  ;

ARTICLE VI TAXES AND EXPENSES 6.1 Non-Qualified Trus t Funds . . . . . . . . . 7 6.2 Qualified Trust Funds ............. 8 .

6.3 Trusten's Compensation  !

and Expenses . . ... ... ........... 8 ARTICLE VII ACCOUNTINGS BY THE TRUSTEE 7.1 Inspection of Books and Records ... 9 7.2 Statements of Account . ............ 9 7.3 Persons Entitled to Accounting .... 9 ARTICLE VIII REMOVAL OR RESIGNATION OF THE' TRUSTEE 8.1 Resignation or Removal ............ 9 8.2 Failure to Appoint Successor Trustee . . . ............ 10 I

c. A e .. ____Y

t.

c '. i l

e, Page

!!umbe r j ARTICLE IX ACTION BY THE COMPANY 9.1 Authority to Act .................. 10 l 9.2 Reliance of Trustee on-1 Written Certifications, Etc. . . . . 10 l 9.3 Certain Information ............... 10 i

ARTICLE X AMENDMENT OF AGREEMENT 10.1 Amendments . . . . .................... 11 l

L ARTICLE XI TERM OF THE TRUST l 11.1 Termination at the Option l of the Company .................. 11 I 11.2 Trust Term ........................ 11 1 11.3 Final Distribution of Trust i Fund Assets . .................... 11 J

ARTICLE XII DEFINITIONS 12.1 Definitions . . . .................... 11 -

)

l ~1 i ARTICLE XIII MISCELLANEOUS PROVISIONS AND EFFECTIVE DATE 13.1 Notices . . . . . . . .................... 14 .

13.2 Severability ...................... 14 13.3 Separate Counterparts.............. 15 l 13.4 Successors and Assigns ............ 15 13.5 Headings . . . . . . .................... 15 13.6 Governing Law . .................... 15 13.7 Administration of Trust ........... 15 l

13.8 Performance by the Company ........ . 15 Schedule I Nuclear Generating Units and Related Trust Funds Schedule II Allocation of Initial-Contributions l

l 4

.A_^^ -,y

4 THIS DECOMMISSIONING TRUST AGREEMENT (hereinafter

- referrtd to as the " Agreement") made this 1st day of July, 1983, by and netween The Toledo Edison Company, an Ohio corporation having its principal place of business at 300 Madison Avenue, Toledo, Ohio (" Company"), and AmeriTrust company National Associat.on, a national banking association having its principal place of business at 900 Euclid Avenue, Cleveland, Ohio, not in its individual capacity but solely as trustee (the " Trustee").

R{C11ALS The Company has certain obligations under Applicable Law (as such term and certain other capitalized terms used herein are defined ing in Article XII hereof) with respect to the Decommission-of its interests, whether now existing or hereinafter ccquired, in the Nuclear Generating Units identified in Schedule I hereto.

The Company desires to establish a trust to provide for

, the Decommissioning of its interests in the Nuclear Generating Units.

NOW, THEREFORE, the Company and the Trustee hereby agree .

os follows:

ARTICLE I ESTABLISHMENT AND DECLARATION OF TRUST Section 1.1. Establishment of Trust. The Company hereby (a) establishes with the Trustee a master trust which shall-(i) be known as the "The Toledo Edison Master Nuclear Decommissioning Trust" (the " Trust") and (ii) consist of a Qualified Trust Fund and a Non-Qualified Trust Fund for each Nuclear Generating Unit, as more fully identified in Schedule I hereto (sometimes collectively referred to as the " Trust Funds" and each, individually, as a " Trust Fund"), and (b) transfers, ossigns, conveys and delivers to the Trustee certain property, being cash in the amounts set forth in Schedule II, which prop-orty shall initially be allocated to and held in the specific Trust Funds as indicated in Schedule II.

Section 1.2. Declaration of Trust. The Trustee declares that it will hold all estate, right, title (except as otherwise provided in Article VIII hereof) and interest in and to the assets of the Trust Funds upon the trusts, and exclusively for the purposes, set forth herein.

/

ARTICLE II PURPOSE OF TRUST: USE OF TRUST ASSETS Section 2.1. Purpose of Trust. The Trust has been created and snall be maintained and operated for the exclusive purpose of providing funds for the satisfaction of the Company's Decommissioning obligations with respect to the Nuclear Generat-ing Units and certain administrative costs and expenses inci-dental thereto, and except as- expressly set forth in this Agree-ment, none of the assets of any Trust Fund shall be used'for, or diverted to, any other purpose.

Section 2.2. Permitted Uses of Trust Funds.

2.2.1,. The assets of each Trust Fund may bet (a) used to fund, in whole or in part, the.

Decommissioning Costs of the Company with respect

. . to the Decommissioning of the Faclear Generating Unit to which such Trust Fund relates; (b) used to pay taxes, administrative and other incidental expenses of, or allocable to, such '

Trust Fund, in each case- only in-accordance with, and subject to the provisions .of, Article VI of this Agreement; (c) invested and reinvested, as described and subject to the limitations set forth in Section 2.4, but only to the extent that the assets of such Trust Fund are not currently required for the purposes described in clauses (a) and-(b) above; (d) transferred to another trust established ,

by the Company or by any governmental instrumental- i ity having jurisdiction over the decommissioning of nuclear generating plants for the purpose'of fund-ing the Company's costs of nuclear generating plant Decommissioning; and (e) distributed to the Company, if and to the extent it is determined that the aggregate assets of such Trust Fund together with its Related Trust Fund are in excess of what is required to satisfy the purposes described in clauses (a) and (b) above;'provided that, in the case.of any 0ualified Trust Fund, no such distribution may be made unless such. distribution would constitute a withdrawal of Excess Contributions or would otherwise be a distribution permitted to be made from a Qualified d

-2 -

Nuclear Decommissioning Reserve Fund under l Applicable Tax Law.

2.2.2. The assets of each Qualified Trust Fund may be transferred to its Related Non-Qualified Trust Fund at the direction of the Company (a) in whole, to the extent that such Qualified Trust Fund has been terminated for purposes of Section l 468A of the Code and (b) in part, to the extent of any Excess  ;

Contribution made to such Qualified Trust Fund. Subject to the rcquirements of Applicable Tax Law, the assets of each Related Non-Qualified Trust Fund may be transferred, in whole or in part, to the Related Qualified Trust Fund, at any time or from time.to  !

time, at the direction of the Company. ,

2.2.3. Upon receipt of a Company Distribution i Order, the Trustee shall make payments from the Trust Funds (or i ony Trust Fund) or transfers of assets as between the Trust Funds in accordance therewith.

1 Section 2.3. Commingling of Assets. No part of the cssets of any Trust Fund may be invested or otherwise commingled with}the monies or other assets of any other t[ Bat or trusts i oxcept as permitted or required by Applicable Law and, in the i ecse of. any Qualified Trust Fund, subject'to the requirements-of - I Applicable Tax Law. Notwithstanding anything to the contrary

+

~ contained'in this Agreement,"in-no event.shall the. assets ~of any ,

Qualified Trust ?und and of any Non-Qualified Trust Fund be. I commingled unless otherwise permitted by Applicable Tax Law. ~

Section 2.4. Permitted Investments.

2.4.1. Subject to subsection 2.4.5, the assets of each Qualified Trust Fund may be invested and reinvested from i

time to time only in the following investmentst (a) Public Debt Securities of the United States of America; (b) obligations of any State or local govern- I ment in the United States of America that are not i in def ault as to principal or interest and the interest on which is exempt from tax under section '

103(a) of the Code; l (c) time or demand deposits (' including check-l ing accounts, savings accounts, certificates of l

deposit and other time or demand deposits) in a Bank or Credit Union located in the United States j of America; and

]

l l (d) any other investment in which assets of a Qualified Nuclear Decommissioning- Reserve F nd may

! be invested _ under Applicable Tax Law. .

L w I

2.4.2. Subject to subsection 2.4.5, the assets of each Non-Qualified Trust Fund may be invested and reinvested from time to time as the Trustee may, subject to any Company Directive, in its discretion determine.

2.4.3. Subject to section 2.5 and subsections 2.4.1 and 2.4.2 hereof, the Trustee may invest all or part of the assets of the Trust Funds in interest-bearing deposits with AmeriTrust Company National Association, in its capacity as a banking association, including but not limited to time deposits, savings deposits, certificates of deposit or time accounts.

2.4.4. The assets of the Trust Funds shall be invested and shall not be held in cash except to the extent that cash holdings are consistent with prudwnt risk management in light of general economic conditions from time to time existing and except to the extent that cash shall be reasonably and currently required for the- purposes described in Section 2.2 hereof. Such investments shall be made in a manner calculated to optimize the af ter-tax earnings of the Trust Funds, giving con-sideration to liquidity, risk, diversification and other prudent investment objectives. In order to optimize the financial performance of the Trust Funds, the Trustee shall consult with .

the Company'from time.to time .as to the tax consequences to the Company and the Trust Funds of: investments of the assets thereof and the anticipated requirements of the Trust in light of the purposes set forth in this Agreement.

2.4.5. Notwithstanding anything to the contrary herein contained, none of the ass'ets of any Trust Fund may be invested in any investment which would not be permitted under Applicable Laws then in ef fect of the Federal government of the United States of America or the State of Ohio including, without.

limitation, Federal and Ohio laws relating or applicable to the investment of trust funds established for the purpose of funding the costs of decommissioning nuclear generating plants.

Section 2.5. Company Directives. The Company reserves the right to, and may, subject to the limitations set forth in Section 2.4, at any time and from time to time, direct the Trustee pursuant to a Company Directive, as to the investment of all or any part of the assets of the Trust Funds (or either Trust Fund). .

2.5.1. Each such Company Directive shall specify those assets of the Trust Funds with respect to which the Company intends to exercise investment control and provide specific l instructions with respect to the investment thereof. The Trustee shall comply with eac such Company Directive and shall have no duty to question the instructions therein contained, or to moni-tor or review any investment made pursuant to any.such Company Directive (other than to take such actions as are expressly re-

-4 -

e

. quired by the terms of such company Directive and to maintain

. books and records and. provide . statements of account with respect to transactions effected by the Trustee pursuant to such Company Directive in accordance with the provisions of Article VII of this Agreement).

2.5.2. The Trustee shall be entitled to rely on Oack such Company Directive until such time as the Company shall revoke such Company Directive by giving- written notice of the revocation thereof.

2.5.3. Those assets of the Trust Funds which are not subject to a Company Directive then in effect shall be in-vested and reinvested by the Trustee in accordance with the pro-visions of Section 2.4.

ARTICLE III

. CONTRIBUTIONS BY THE COMPANY Section 3.1. Nature of Contributions. Company contri-butions to each Trust Fund shall be made in cash, securities or other property, as the Company shall elect, provided that, in the cose of each Qualified Trust Fund,. Company contributions shall-only be made in cash or. other property, if any, which may be

- contributed to. a 'Oualified,4 Nuclear Decommissioning Trust Fund under Applicable Tax Law; and provided further, that non-cash Company contributions to any Trust Fund shall be made only in auch securities or other property as would in each case meet the j roquirements of Section 2.4 of this Agreement for Permitted Investments with respect to such Trust Fund.

Section 3.2. Contributions. The Company may deposit

, with the Trustee contributions to the Trust Funds (or any Trust l Fund) from time to time and at any time and in such amounts as the Company shall determine to be necessary or desirable for compliance with its Decommissioning obligations under Applicable  !

Law or otherwise . The Company shall, at the time of making any '

deposit pursuant to this Section 3.2, instruct the Trustee in i writing as to the allocation of such deposit as among the Trust i Funds and the Trustee shall not accept any such deposit in the  !

Obsence of instructions with respect to the allocation thereof.

ARTICLE IV '

INDEMNIFICATION OF THE TRUSTEE Section 4.1. Indemnification. The Trustee shall have no liability. hereunder to any Person, except for liabilities arising out of its own bad faith, gross negligence (or, with respect to distributions of funds other than in accordance with I Company Distribution Orders of the. Company pursuant-to Section l

2.2,-its negligence) or willful misconduct, and shall be respon- j I

i

-s- i

sible for the performance of only such duties as are specifically set forth in this Agreement. The Company hereby agrees to indem-nify and hold harmless the Trustee from and against any and all costs, expenses or liabilities (including attorney's fees) whien may be incurred by, or asserted against, the Trustee by reason of its acting as Trustee under this Ag reeme nt (whether or not in-curred while acting as Trustee), except for such costs, xpenses and liability arising from the Trustee's bad faith, gross negli-gence (or, with respect to distributions of funds other t an in accordance with Company Distribution orders, its negligence) or willful misconduct.

ARTICLE V QUALIFICATIONS, DUTIES AND POWERS OF THE TRUSTEE Section 5.1. Qualifications of the Trustee. The Trustee shall (a) be a commercial bank or a trust company in the

. nature of a bank organized under the laws of the United States or cny State thereof, (b) not be an Affiliate of the Company, and (c) have a combined capital and surplus of not less than S250',000,000. If at any time during the term hereof the Trustee chall not meet the requirements for qualification as trustee as cet forth in the preceding sentence, the Trustee shall promptly notAfy the Company and each Owner Participant of such fact and,-

et the request of the Company,'shall resign as Trustee.

Section 5.2. Duties of the Trustee. The Trustee shall (a) hold, invest and reinvest the assets of the Trust Funds as provided in this Agreement, (b) with respect to.each Trust Fund, record all charges, credits and other transactions with respect to each Trust Fund, whether executed in accordance with Company Directives, Company Distribution Orderr or otherwise, and (c) l make payments and distributions from the Trust Funds only for the l purposes described in Section 2.2 and in accordance with Company j Distribution orders. Subject to Applicable Law and except as otherwise directed by the Company or ss otherwise provided in this Agreement, the Trustee may and hereby is expressly autho-rized and empowered to:

(i) vote-any bonds or other securities, give general or special proxies or powers of attorney i I

with or without power of substitution, exercise any conversion privileges, subscription rights or other l options and make any payments ine'idental thereto, I

consent to or otherwise participate in corporate reorganizations or other . changes affecting corpo-rate securities and delegate discretionary powers and pay any assessments or charges in connection therewith, and, generally, exercise any of the powers of an owner or holder with respect to secur-ities or other property held in the Non-Qualified

- g --

\ \

t Trust Fund and, to the extent applicable, the l Qualified. Trust Fund; (ii) make, execute, acknowledge and deliver any and all documents of transfer and_ conveyance  !

l and any and all other- instruments that may be i necessary or appropriate to carry out the powers  :

herein granted; l

(iii) register any investment held in either Trust Fund in its own name- or- in the name of a nominee and to hold any investment in bearer form, or deposit or arrange for the deposit of any secur-ities issued by the Federal government of the  :

, United States of America , or any agency or instru-mentality thereof, with a Federal reserve bank, '

provided, however, the Trustee will be responsible for the acts of its nominees; (iv) employ agents, attorneys (who may be counsel to the Company) and depositaries as may be reasonably necessary in the administration of the Trust Funds; and (v) maintain cash. balances- to; meet-antici-pated ' distributions from,- or administrative-ex-penses of, the Trust Funds.

t Section 5.3. Authority with respect to Amounts and "

i Sufficiency of Contributions. The Trustee shall have no respon-l oibility or authority in connection with the determination of the cmounts to be deposited with it from time to time as contribu-l tions of1 the Company, nor shall it have any authority-on behalf ,

of any Person to bring any action or proceeding to enforce the collection of any such amount.

Section 5.4. Duties Not Expressly Undertaken. No duties or obligations shall be imposed upon the Trustee with ,

respect to the Trust Funds unless they shall have been specifi-cally undertaken by the Trustee by the express terms of this Agreement or other written agreement to which the Trustee is a party, or are otherwise imposed upon the Trustee by Applicablo La w .

ARTICLE VI TAXES AND EXPENSES l Section.6.1. _Non-Qualified Trust Funds. ,

6.1.1. All taxes of any kind. that may be assessed or levied against or in respect of the income or assets of any Non-Qualified Trust Fund, including income taxes, if any,

_ _ _ _ _ ___ __ _ ~._ _ __ _.

l

\. '.

shall be paid from the as33ts of such Non-Qualified Trust Fund whether or not such Trust Fund is, for such purposes, deemed to be a taxpayer under App 1!:able Law. To the extent any such tax obligation is a tax obligation of the Company under Applicable Law, the Company shall have the right to be reimbursed therefore from the assets of such Non-Qualified Trust Fund and each such reimbursement shall be deemed to be a distribution of assets of such Trust Fund authorized pursuant to Section 2.2.1(b).

6.1.2. All brokerage commissions incurred by any Non-Qualified Trust rund and all other ordinary and necessary administrative costs and incidental expenses incurred by the Trustee in connection with the administration and operation of cuch Non-Qualified Trust Fund (other than those properly allo-cable to and payable from the Related Qualified Trust Fund),

including, without limitation, legal expenses of agents or attor-neys employed by the Trustee (whether or not arising out of a judicial or administrative proceeding and whether or not incurred while it is acting as Trustee), accounting expenses, actuarial oxpenses, such compensation to the Trustee as may be agreed upon from time to time between the Trustee and the Company on a basis no less favorable to the Company than that which the Trustee generally affords to like customers for like services, and all other proper charges and disburrements of the Trustee which are allocable to such Non-Qualified Trust Fund- shall be paid from auch Non-Qualified Trust Fund.

Section 6.2. Qualified Trust Funds. All taxes imposed under Section 468A(e)(2) of the Code and the regulations there-under and all State and local taxes imposed on the income or essets of any Qualified Trust Fund shall be paid from such Quali-fied Trust Fund and the Trustee shall prepare and timely file, with the. cooperation of the Company, all Federal, state and local tax returns required to be filed by such Qualified Trust Fund under Applicable Law. All other ordinary and necessary expenses incurred by the Trustee in connection with the administration and operation of any Qualified Trust Fund and, to the extent properly allocable to such Qualified Trust Fund (including, without limi-tation, legal expenses (whether or not arising out of a judicial or administrative proceeding and whether or not incurred while acting a s' Trustee), accounting expenses, actuarial expenses, compensation to the Trustee and all other proper charges and disbursements of the Trustee which are allocable to such Quali-fled Trust Fund) shall be paid f rom such Qualified Trust Fund to the extent such expenses are permitted to be paid f rom a Quali-fled Nuclear Decommissioning Reserve Fund under Applicable Tax Law.

Section 6.3. Trustee's Compensation and Expenses. If, and to the extent that, tne assets of any Trust Fund are insuf-ficient to pay the compensation to and/or the expenses of the Trustee allocated thereto, as set forth- .in Sections 6.1.2 and l

1 i

6.2, then such :ompensation to 'and/or expenses of the Trustee ,

shall be paid by the. Company.

ARTICLE VII ACCOUNTINGS BY THE TRUSTEE Section 7.1. Inspection of Books and Records. The Trustee shall, with respect to each Trust Fund, keep separate, e occurate and detailed accounts of all investments, receipts, i disbursements and other transactions hereunder, and all accounts, books and records relating thereto shall, at all reasonable i times, be open to inspection and audit by the Company and its  ;

cgents.

Section 7.2. Statements of Account. Within 30 days following each March 31, June 30, September 30 and December 31 of ,

oach year, commencing 30 days following September 30, 1988, the ,

Trustee shall provide to the Company a written statement of occount with respect to each Trust Fund setting forth all invest-ments, receipts, disbursements and other transactions effected by it during the three calendar month period ending on such March 31, June 30, September 30 or December 31 (as the case may be). Within 30 days following the resignation or removal of the Trustee, the Trustee shall provide (a) to the Company a. written otatement of account with ' respect to: each Trust Fund setting forth all investments, receipts, disbursements and other transac-tions effected by it during the period commencing on the day next following the last day of the period covered by the last state-ment of account provided by the Trustee pursuant to the preceding. 1 centence, through and including the date of such resignation, and (b) to the Company and the successor trustee a statement.of all of-its fees' and < expenses remaining unpaid as of the time it delivers the statement of account required pursuant to clause (a) cbove, which fees and expenses shall be paid by the successor

• truste upon approval by and receipt of written instruction from the Company.

Section 7.3. Persons Entitled to Accounting. No

• Person, other than the Company, may demandLan accounting by the Trustee hereunder or may institute any action or proceeding cgainst the Trustee or the Trust.

ARTICLE VIII REMOVAL OR RESIGNATION OF THE TRUSTEE Section 5.1. Resignation or Removal. The Trustee may

- be removed by the Company- at any time upon 60 days' notice in ,

writing ts the Trustee and the Trustee may resign at any time upon 60 dais' notice in writing to the Company. Upon such <

removal or eb:!gnation, the Company shall appoint and designate a successor trust.s meeting the requirements of Section 5.1 of this 9-

• e i

Agreement, and upon acceptance of such appointment, su:h succes-

- sor^ trustee shall have the powers.and. duties of the Trustee here-under, and the funds and properties then constituting each of the ,

l Trust Funds shall be assigned, transferred and paid over to such ,

! successor trustee.

Section B.2. Failure to Appoint Successor Trustee. If l for any reason the Company shall fail to appoint a successor ,

i trustee upon-the resignation or. removal of the Trustee, as pro-vided in Section B.1, the Trustee may apply to a court of compe- i tont jurisdiction for the appointment of a successor trustee.

ARTICLE IX ACTION BY THE COMPANY ,

i Section 9.1. Authority to Act. Any action- of the 4

Company required or permitted under this Agreement may be taken by the Board of Directors' of the Company,' or any -committee there-of having authority to act upon matters relating hereto, or by any officer, employee or agent of the Company duly authorized by its Board of Directors to act on its behalf in such respect. Any such action of the Company or authorization to act on behalf of ,

the Company shall be evidenced by a resolution of its Board of Directors certified to the Trustee over the signature of the  :

SOcretary or of any Assistante' Secretary of the Company, and the Trustee shall be fully protected in acting'in.accordance with cuch resolution so certified to it. The Company shall furnish the Trustee from time to time with certified copios of resolu-'

tions of its Board of Directors evidencing.the appointment and authorization of any committee, officers, employees or agents of the Co apany or of any other person authorized by the Board of Directors to act under- this Agreement, and the appointment and authorization of any successors thereof.

Section 9.2. Reliance of Trustee on Written Certifica-tions, Etc. All certifications, Company Distribution Orders, Company Directives, requests, instructions and objections of the l Company to the Trustee shall be in writing and the Trustee shall cet and shall be fully protected in acting in accordance with such certifications, Company Distribution orders, company -

Directives, requests, and instructions and shall have no duty to question or verify the same. .

Section 9.3. Certain In f o rma t ion .' The Company shall provide to the Trustee (a) as promptly as practicable after the issuance ~thereof, a copy of each order, license, revenue ruling or similar action by whi:h the Company is bound by any Govern- t 4 -

mental Authority which arises-out< of any proceeding to which the Trustee was not a party, and which imposes any obligation, limitation or restriction upon the management and operation of the Trust or any obligation of limitation upon the Trustee with respect to its performance hereunder and (b) from time to time during the term hereof, such other information as the Trustee may

.J-

i i

4 reasonably request to enable it to perform its obligations hereunder.

ARTICLE X 7 AMENDMENT OF AGREEMENT Section 10.1. Amendments. Except as otherwise provided in this Agreement, the Company may, at any time and from time to time, amend, in whole or in part, any or all_of the provisions of this Agreement upon written notice thereof to the Trustee. No cmendment which affects the rights, duties or responsibilities of the Trustee may be made without its consent, and no amendment chall authorize or permit any part of the. corpus or income of the Trust Funds to be used for or diverted to purposes other than those described in Section 2.2.

ARTICLE XI TERM OF THE TRUST -

1 Section 11.1. Termination at the Option of the Company. '

Subject to the requirements of Applicable Law, the Company may_

torminate the Trust ,at.any time prior to expiration'of the Trust' 4s . term (as set forth.in .Section ll.2)..upon. written notice to the Trustee. '

Section 11.2. Trust Term. In no event shall the Trust-oxtend for a term longer than the earlier of (a).the date which chall be the 21st anniversary of the death of the last survivor of all of the now living lineal descendants of Joseph P. Kennedy, father of President John F. Kennedy and- (b) the date of final payment'of all the costs of Decommissioning the Nuclear Generat-ing Units.

Section 11.3. Final Distribution of Trust Fund Assets.

Upon termination of the Trust, the Trustee shall distribute the rcmaining assets of the Trust Funds pursuant to a Company Distri-bution Order in accordance with Section 2.2.

l ARTICLE XII '

DEFINITIONS Section 12.l. De f in i t ions . For pu'rposes of this Agree--

mont, the following capTeali z ed terms shall have the,following l

moanings:

" Applicable Law" shall mean all applicable laws, statutes, treaties, rules, codes, ordinances, regulations, certific ates, orders , interpretations, licenses and permits of any Governmental Authority and judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other

I t 4 judicial or quasi-judicial tribunal of ecmpetent jurisdi: tion (including those pertaining to health, safety, the environment or otherwise).

" Applicable Tax Law" shall mean Section 468A of the Code (or any comparable subsequent provision of the Code) and the regulations thereunder, and any other provision of the Code relating to the Federal taxation of the-Trust Funds.

" Bank" shall have the meaning set forth in Section 581 of the Code.

" Business Day" shall mean any day other than a Saturday or Sunday or other day on which banks in Ohio are authorized or obligated to be closed.

" Code" shall mean the Internal Revenue Code of 1986, as I '

~ cmended, or any comparable-subsequent law.

. " Company" shall'mean The' Toledo Edison Company, an Ohio corporation, or its successors or assigns hereunder.

" Company Directive" shall mean any written dir ..sns of the Company to the Trustee, as described in Section ' :c as to the investment of all or part of the assets of the Trus't Funds.

" Company Distribution order" shall mean any written instructions of the Company to the Trustee, pursuant to which the Company directs the Trustee to distribute or transfer all or.part of the assets of the Trust Funds, which instructions shall include a certification by an oCficer of the Company that the distribution or transfer requested is permitted by and in accor-dance with the provisions of Section 2.2.

" Cost of Service Amount" shall mean, with respect to each Nuclear Generating Unit during any taxable year, the amount of the costs of Decommissioning to the Company for such Nuclear Generating Unit included in the Company's cost of service for ratemaking purposes for such taxable year, but only to the extent such costs are directly or indirectly charged to customers of the Company by reason of electric energy consumed during such taxable year or are otherwise required to be included in the Company's income under Section 88 of the Code and the regulations thereunder.

" Credit Union" shall mean any insured credit union with-in the meaning of Section 101(6) of the Federal Credit Union Act of 1982.

" De c ommis s io n i ng " shall mean, with respect to any i Muclear Generating Unit, the decommissioning and retirement from commercial service of such Nuclear Generating Unit, all in accor-dance with Applicable Laws, w - _ _ _ _ _ _ _ _

1 i

" Excess Contribution" shall mean the amount by which contributions to any Qualified Trust Fund during any taxable year  !

oxceed the Maximum Qualified Contributions for such Qualified i Tcust Fund during such taxable year.

" Governmental Authority" shall mean any Federal, state, county, municipal, foreign, international, regional or other governmental authority, agency, board, body, instrumentality or court including, without ilmitation, the United States-Nuclear R3gulatory Commission and the The Public Utilities Commission of Ohio. ,

" Maximum Qualifttd Contributions" shall mean, with rospect to each Qualified Trust Fund during any taxable year, an cmount equal (a) to the lesser of (i) the Ruling Amount for such taxable year or (ii) Cost of Service Amount for such Qualified

' Trust' Fund-during.such' taxable year, or (b) such greater amount oc may be contributed to such Qualified Trust Fund during any taxable year under Applicable Tax Law.

"Non-Qualified Trust Fund" shall mean any Trust Fund octablished under this Agreement which is not a Qualified Nuclear t" Decommissioning Reserve Fund.

" Nuclear Generating Units" shall mean those nuclear i units identified as such on Schedule I hereto.

" Person" shall mean any individual, partnership, corpo-ration, trust, unincorporated association or joint venture, a government or any department or agency thereof, or any other l ontity.

"Public Debt Securities" shall mean any of Treasury bills, Treasury notes, Treasury bonds and savings bonds issued by the Federal government of the United States of America.

l " Qualified Nuclear Decommissioning Reserve Fund" shall mean a " Nuclear Decommissioning Reserve Fund" within the meaning ,

of Section 468A of the Code.

" Qualified Trust Fund" shall mean any Trust Fund estab-I lished under this Agreement which meets the requirements for a Qualified Nuclear Decommissioning Reserve Fund.

l "Related" shall mean, with respect to each Qualified I Trust Fund established for the Decommissioning of a particular Nuclear Generating Unit, the Non-Qualified Trust Fund which has been' established for- the Decommissioning of the same Nuclear Generating Unit and, with respect to each Non-Qualified Trust Fund established for the Decommissioning of a particular Nuclear Generating Unit, the Qualified Trust Fund which has been estab-l w __

l lished for the Decommissioning of the same Nuclear Generating Unit.

" Ruling Amount" shall mean, with respect to any ';axable yoar, an amount determined in accordance with Section 1.469A-3 of the regulaeions of the Internal Revenue Service, as in effect and  ;

as may be amended from time to time.

" Trust" shall have the meaning set forth in Section 1.1 l of this Agreement.

" Trust Funds" and " Trust Fund" shall have the respective m0anings set forth in Section 1.1 of this' Agreement.

ARTICLE XIII MISCELLANEOUS PROVISIONS AND EFFECTIVE DATE .

Section'13.1. Notices. All notices, reports and other -

information required or permitted to. be given or delivered-here-under shall be in writing and shall be deemed given when deliv-ored in person, or on the fourth day af ter being deposited in the

! United States mail, postage prepaid, registered or certified mail, addressed as follows:

(

If to the Companyt The Toledo Edison Company c/o Centerior Energy Corporation -

6200 Oak Tree Boulevard Independence, Ohio 44131 Attention: Treasurer If to the Trustee:

AmeriTrust Company National Association '

900 Euclid Avenue Cleveland, Ohio 44114 Attentient James Russell, Vice President and/or to such other respective addresses and/or addressees as may be designated by notice given by either party in accordance with the provisions of this section 13.1.

Section 13.2. Severability. Any provision: of this  ;

Agreement which.is prohibited or unenforceable in any jurisdic-

. tion shall, as to -such jurisdiction, be inef fective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unen-forceability in'any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. ,

b

l Section 13.3. Separate Counterparts. This Agreement may be executed by the parcies hereto in separate counterparts, oach of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 13.4. Successors and Assions. All covenants and agreements contained herein shall De binding upon, and inure to the benefit of, the Trustee and its successors and assigns and the Company and its successors and assigns, all as herein pro-vided. Any request, notice, direction, consent, waiver or other instrument or action by the Company shall bind the successors and ossigns of the Company.

Section 13.5. Headings. The headings of the various Articles and Sections herein are for convenience of reference t

,- only and shall not define or limit any of the terms or provisions s hereof.

Section 13.6. Governino Law. This Agreement shall in all respects be governed by, and construed in accordance with the laws of the State of Ohio, including all matters of construction, validity and performance.

• Section 13.7. Administration of Trust. The principal place of administration of the Trust shall be the principal office of the Trustee.

Section 13.8. Performance by the Company. Any obliga-tion of the company with respect to Decommissioning hereunder or pursuant to Applicable Law may be performed by the Company and any such performance shall not be construed as a revocation of the trusts created hereby.

t 1

6

Agreement ~IN WITNESS WHEREOF, parties hereto have caused this the to be executad by their respective officers 5ereunto duly authorized as of the day and year first above written.

THE TOLEDO EDISON COMPANY By: / %Mv'/b' Titlet .M ATTESTt Tit 1 bI A atentsec Err '

j AMERITRUST COMPANY NATIONAL

' ASSOCIATION, not in its individual capacity, but solely as Trustee By: h u T1 et AC M  !

ATTEST:

l U .-

,ML tle tpa,, p,gfjQ .

1D

p

.~.

9 SCHEDb'd I l

l  :

NUCLEAR GENERATING UNIT RELATED TRUST FUNDS i

i

1. Davis-Besse Power a. Davis-Besse '

Station Unit No. 1 Qualified Trust. Fund

b. Davis-Besse Non-Qualified Trust Fund i

2. Perry Power Station a. Perry Qualified Unit No. 1 LTrust Fund P

1

b. - Perry Non-Qualified '>

Trust Fund l

5 t

1 i

G l

S T

SCHEDULE II Allocation of Initial-Contributions Davis-Besse Non-Qualified Trust Fund . . . . . . . . . . . $100_

Davis-Besse Qualified Trust Fund ............... O Perry Non-Qualified Trust Fund ................. 100 Perry Qualified Trust Fund .....................

0 ,

Aggregate Initial Contributions $200-O e .

l i

I

EXHIBIT B-3 EVIDENCE OF AUTEORITY i

I, E. LYLE PEPIN, do hereby certify that I am. Secretary of The Toledo Edison Company (" Company") and that'Murray R. Edelman was the duly elected and acting President of the Company on July l 1, 1988 and, by virtue of holding such office, was authorized to j execute on behalf of the company the Master Decommissioning Trust. j i

Agreement dated as of July 1, 1988.

In witness whereof, I have hereunto signed my name this  !

Mbday of July, 1990.

i E. Lyle Mpin Secretary Sworn to and subscribed before me this l day of July, 1990. )

l

.

• I

% Co.ukh. [znuda i

% .. uumsoncn i

s a ^.

- hetWF hb8E. help of SMe6 Cura. Cly.

1 4

- (/ Mr hkaisa kehus Ast 14. 281 s

\

(

t

EXHIBIT B-3 EVIDENCE OF AUTHORITY 4

STATE OF d i . To-Wit:

CITY OF hh[e on this /944 day of 7d , before me, a notary public in and for the city and stat (/aforesaid, personally appeared James R. Russell, and he did depose and say that he is the Vice President of Ameritrust Company National Association, Trustee, which executed the Master-Decommissioning Trust Agreement dated as of July 1, 1988 between the Toledo Edison Company and Ameritrust Company National Association, and that he signed _his name thereto by order of the Association.

• n't

'.'?

( ;,', ~ . ' ..:. U' 'f..fj

. . , ayv k ,-

n - - -

aj

.':My Commission Expires: Gatsony J. Ioamnem -- = ,_

newy evne.ame w n . ---

e ,  :

.($w.c.4,'., , ' i ) g , '. 'y '. i NF mammesa has no emphinen een, san = w.m a.c,

'. ) , \'

1 l

l 1

I

{~

i

(

l

,---.--e- ,, .,e u-v ---y ,wwer--,,,-- gs, , - ~

i EXHIBIT C THE TOLEDO EDISON COMPANY Decommissioning Funding Schedule j for. December ~1989' .

1 5[ $$ 5 $.5 .$$ . S . $1.

Year Contribution Interest Fund Amount 1988 310,886- 2,180 313,066 l 1989 621,771 54,521 989,358 1990 621,771 28,605 1,639,735 1991 621,771 42,914 2,304,419 ,

1992 621,771 57,537 2,983,727 1993 621,771 72,481 3,677,980 1994 621,771 87,755 4,387,506 1995 621,771 103,365 5,112,641  ;

1996 621,771 119,318 5,853,730  ;

1997 621,771 135,622 6,611,123  !

1998 621,771 152,284 7 385,178

, l 1999 621,771 169,313 8,176,262 '

2000 621,771 186,717~ 8,984,751 2001 621,771 204,504 9,811,026 2002 621,771 222,682 10,655,479 2003 621,771 241,260 11,518,510 2004 621,771 260,247 12,400,528

• 2005 621,771 279,651 13,301,950 2006 621,771 299,482 14,223,203 2007 621,771 319,750 15,164,724 2008 621,771 340,463 16,126,959 2009 621,771 361,633 17,110,362 2010 621,771 383,267= 18,115,401 2011 621,771 405,378' 19,142,550 >

2012- 621,771 427,976 20,192,297 2013 621,771 451,070 '21,265,138 2014 621,771 474,673 22,361,582

, 2015 621,771 498,794 23,482,147 2016 621,771 523,447 24,627,365 2017 621,771 548,642 25,797,777 2018 621,771 574,391 26,993,939 2019 621,771 600,706 28,216,416 2020 621,771 627,601 29,465,788 2021 621,771 655,087 30,742,646 2022 621,771 683,178 32,047,594 2023 621,771 711,887 33,381,252 ,

2024 621,771 741,227 34,744,250  !

2025 621,771 771,213 36,137,234 2026 283,083 798,133 37,218,450 *

• NOTE: Amount greater than required by calculations set fourth in 10 CFR Section 50.75(c)

9 .

i l

BEFORE THE j UNITED STATES NUCLEAR REGULATORY COMMISSION DUQUESNE LIGHT COMPANY ,

DECOMMISSIONING REPORT DUQUESNE LIGHT COMPANY (Company) hereby submits this i

Decommissioning Report in' compliance with 10 C.F.R. section 50.33 i (k) and 50.75 (b).  !

r

1. The Company owns a 13.74% undivided, interest in Unit t No. 1 of the Perry Power Station, a nuclear generating unit located in Perry, Lake County, Ohio.  ;

2. The Company hereby certifies that financial assurance .

for decommissioning the Unit will be provided in thel amount of

$23.4 million (1990 dollars). The calculation of this certification amount is set forth in Exhibit A and complies with L

i

[ the formula set forth in 10 C.F.R. .section.50.75(c).

3. The method by which the Company will provide financial assurance for decommissioning the Unit will'be by establishment of an external sinking fund in which deposits will'be.

made at least annually.

i Y

y

/ \. .

, e

t 5

i 3

I

4. Attached as Exhibit B to this Decommissioning Report f i

is the executed trust instrument for the external' sinking fund; i r

5. The Fund has.a current balance of-$513,800, and i annual contributions of $274,701, currently approved of by the-  ;

Pennsylvania PUC, of which 72% is intended for the decontamination-l or removal of radioactive structures. These contributions will accumulate the certification amount if sufficient earnings are-achieved. If earnings fall short of the-. amount required by the NRC for decommissioning, the-Company.will apply for further rate recovery to increase the annual contributions.

3 DUQUESNE LIGHT' COMPANY s A Bv Attest: A<4 A MV- By: .wO- -- "#

Title:

MNdbr. Gu,a*kkQ Date: b^s '

.M--

L i 100 l

^

l.

t

, - . e . , . - - . - ---- ,

- ^ -

': j ' ';'

9 EXHIBIT A '

i r.

DUQUESNELIGHTCOMPANY

• Perry Nuclear Power Plant Unit No. I .[

l Calculation of Minimum Financial Assurance Amount 1 as of December 19891 l i

4 Pennsylvania Renions l .

g - Labor - (L) = Midwest .

l Energy (E) = East North - Central ,

Waste Burial (B) = South Carolina..

a For PWR Unit' {

1' L = 1.149-L E' = - 0.867 B = 1.814 PWR . Escalation Factor =

L 0.65(1.149) + 0.13(0.867) + 0.22(1.814) = 1~.259 ,

Base Amount for BWR greater than 3400 MWt = $135- million.

Escalated Amount for unit = $135,000,000 X11.259 = >

$ 169,965,000, -

Prorated Amount for Duquesne Light Company's ownership - '

interest (13.74 %) in the unit:

$169,965,000 X .1374 = $23.353.191 as of ? December.1989.-

L l t

Y n nl1 - P _f nC2 N

--EXHIBIT B:

Perry _- 1 .

NUCLEAR DECOMMISSIONING' TRUST AGREEMENT.

THIS NUCLEAR DECOMMISSIONING TRUST AGREEMENT, dated as-of the loth day of March, 1989, between DUQUESNE LIGHT COMPANY,-a corporation duly _ organized and; existing under the laws of the Commonwealth of. Pennsylvania,_having its principal office at One Oxford Centre, 301 Grant Street, Pittsburgh,-Allegheny County, i

Pennsylvania (the " Company"),-and-MELLON BANK,LN.A., as Trustey,.a national banking association.having its principal office'at One; Mellon Bank Center, Pittsburgh, Pennsylvania, 15258.(the

" Trustee");

WITNESSETH:

WHEREAS, the Company owns'a 13.74 percent undivided interest-(as tenant in-common with the owners._of the other undivided interests) of Unit No. 1 of the Perry Power Station

(" Perry" or the " Unit"), a nuclear generating, unit located in Perry, Lake County, Ohio; WHEREAS, the Company desires to establish pursuant to this Agreement two funds under a <, ingle trust agreement, one of which qualifies as a Nuclear Deccamissioning Reserve Fund under section 468A of the Internal Revenue Code of 1986, as-amended, or any corresponding section or sections of any future United States internal revenue statute (the " Code") and the regulations

L

i. .A-thereunder (the " Qualified Fund"), and one of which-does not so i qualify (the "Nonqualified Fund"; collectively, the " Funds"),-

under the laws of the Commonwealth of Pennsylvania, f

WHEREAS, the execution and delivery of this Agreement have been duly authorized by each of the Company and the Trustee and all things necessary to make this Agreement a valid and binding agreement by each of the Company and the Trustee have been done.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH, that to

. provide for the creation-of the Funds and' the making of payments-therefrom and the performance of the covenants of the Company and, the Trustee set forth herein, the Company does hereby sell, assign, transfer, set over and pledge unto the Trustee, and to its successors in-the trust and its assigns forever, all of the '!

Company's right, title and interest in and'to any and all cash and property herewith and hereafter contributed to the Funds, subject to the provisions of Article V hereof and Section 4 of the Special Terms of the Qualified Nuclear Decommissioning Reserve Fund, j i

attached hereto as Exhibit A (the "Special Terms").

TO HAVE AND TO HOLD THE SAME IN TRUST for.the exclusive purpose of providing funds for the decommissioning of the Unit in order to satisfy the Company's liability in connection therewith,-

to pay the administrative costs and other incidental expenses of f 1

J

4, '. A f

the Funds, .and to make certain investments, all as hereinafter provided.

t ARTICLE I'  !

Purposes of the Funds: Contributions I

I Section 1.01. Establishment'of the Funds. The Funds ,

shall be maintained separately at-all times in'the United States

.as the Nonqualified Fund and the Qualified' Fund pursuant to this!

Agreement and as a. trust in accordance with the' laws =of the Commonwealth of Pennsylvania. The' Company intends that the.

Qualified Fund shall-qualify as a Nuclear Decommissioning l Reserve. I Fund under section 468A of the Code.

Section 1.02. Purnoses of the Funds. The1F,nds u are i established for the exclusive purpose of providingifundsLfor the 1

i decommissioning of the Unit. The Nonqualified Fund shall accumulate all contributions (whether from the' Company'or others) which do not satisfy the requirements for contributions to the Qualified Fund pursuant to Section 2 of the Special. Terms. -The-Qualified Fund shall accumulate'all contributions (whether from  !

the Company or others) which satisfy the requirements of Section 2 - 4 of the Special Terms. The Qualified Fund shall also be governed by the provisions of the Special Terms, which provisions shall  !

take precedence over any provisions of this Agreement construed to be in conflict therewith. None of-the assets of the Funds shall

~

t

_ _ - ,- _ _ _ . - .a

s .= ca. ,

be' subject to attachment, garnishment =, execution orLlevy in any manner for.the-benefit of creditors of the~ Company.

Section 1.03. Contributions to the Funds. The assets of the Funds shall be contributed by the Company (or by_others.  !

l approved in writing by the Company)1from time to time. Cash ,

[ contributions shall be allocated to'the-Qualified Fund unless'the Company designates in writing at the time of payment to whichI of the two Funds the payment is allocated. .The Company shall have i sole discretion as to whether cash-payments'are allocated to th'e i

Qualified Fund or the Nonqualified Fund.- Contributions.of.

property other than cash shall be allocated to1the Nonqualified

~

Fund.

L ARTICLE II Payments'Bv-The Trustee Section-2.01 Limitation on-Use of Assets. The assets of the Funds shall be used exclusively (a) toisatisfy, in'whole or in part, any expenses or-liabilities incurred by or.on behalf of the Company with respect to'the decommissioning of:the Unit, 4

including expenses incurred in connection'with the preparation for <

decommissioning, such as engineering and other planning expenses, and all expenses incurred after the actual decommissioning occurs, such as physical security and radiation monitoring expenses (the '

" Decommissioning Costs"), (b) to pay the administrative costs and other incidental expenses of each Fund separately from the assets

_4

i, .w I

of such Fund, and (c) to invest 1*. securities and investments as directed by the-investment manager (s)-pursuant to Section 3.02(a)-

or the Trustee pursuant to Section 3.02(b), except that all assets of the Qualified Fund must be invested.in Permissible Assets as' i defined in the Special Terms. LUse of the essets of the Qualified.

Fund shall be further limited by-the provisions of the Special.

Terms, Section 2.02. i Certification for Decommissionino Costs. 1 I

If assets of the Funds are-required to satisfy Decommissioning Costs, the Company shall present'a certificate substantially in the form attached hereto as Exhibit B to the Trustee signed by its

]

Chairman of the Board, its President or one of its Vice Presidents and its Treasurer or an Assistant Treasurer, requesting-payment from the Funds. Any certificate requesting payment by the Trustee to a third party or to the Company'from the' Funds for i Decommissioning Costs shall include the following:

I 1

(a) a statement of the amount of the payment to be made from the Funds and whether the payment is to be made from the Nonqualified Fund, the Qualified Fund or in part from both Funds; I

(b) a statement that the payment is requested to pay Decommissioning Costs which have been incurred, and if payment is i I

to be made from the Qualified Fund, a statement that the ,

Decommissioning Costs to be paid constitute Qualified Decommissioning Costs, as defined in the Special Terms; 1

i, i.i (c) the nature of the Decommissioning CostsLto be paid; (d) -the payee, which may_be the' Company,in the: case of-reimbursement for payments previously made or expenses previously l incurred by the Company for Decommissioning Costs;

-( e ) . a statement that the Decommissioning Costs for

~

which payment is requested have not1 theretofore-been paid out of- l funds of the Funds; and  !

1 a statement that any necessary authorizations:of'-

(f) i the Pennsylvania Public Utility Commission (the "PUC") land /orfany other governmental agencies having jurisdiction with respect to:-

the decommissioning have'been obtained.  :

4 The Trustee shall retain at11 east one counterpartfof all

~

-j copies of such certificates (including attachments) and related- 1 documents received by it pursuant to this Article II.

i F

The Company shall have the right to enforce payments.

from-the Fund upon compliance with the procedures set forth in.

~

this Section 2.02. -

j Section 2.03. Administrative Costs. The Trustee.shall .

. pay, as directed by the Company, the administrative costs and other incidental expenses of the Nonqualified Fund, including all <

4 federal, state, and local taxes, if any, imposed directly on the Nonqualified Fund, legal expenses, accounting expenses, actuarial.

expenses and trustee expenses, from the assets of the Nonqualified ,

Fund-and shall pay, as directed by-the Company, the administrative-l costs and other incidental expenses of the Qualified Fund, as defined in the Special Terms, from the assets of the Qualified Fund.

Section 2.04 'Pavments between the Funds. -The Trustee shall make payments (i) from the Qualified Fund to the Nonqualified Fund provided such payments are in cash and are in accordance with Section 4 of-the Special Terms'or (ii) from the Nonqualified1 Fund to-the Qualified Fund provided such payments are ,

in cash and are in accordance with the contribution limitations set forth in Section 2 of the Special Terms, as the case:may be, upon presentation by the Company of a certificate substantially in the form of Exhibit C hereto executed by the Company instructing:  ;

the Trustee to make any such payments. The Trustee.shall be-fully protected in relying upon such certificate.

A.RTICLE III Concernina The Trustee Section 3.01. Authority of Trustee. The Trustee hereby accepts the trust created under this Agreement. The Trustee shall have the authority and discretion to manage and control the Funds to the extent provided in this Agreement but does not guarantee

..: .w

(

the Funds in any manner against investment loss-or depreciation in-asset value or guarantee the adequacy of the Funds to satisfy;the i

Decommissioning Costs. The Trustee'shall not be liable for the  !

making, retention or sale of any investment or reinvestment made-by it, provided that any investment'of assets of the Qualified Fund qualifies as a Permissible Asset, as defined in the Special Terms, nor shall the Trustee be responsible for any other loss to or diminution of the Funds, or for any other loss or damage which

-4 may result from the discharge of its duties hereunder.except for any action not taken in good faith.

l Section 3.02-. Investment of Funds. (a) The Company l shall have the authority to appoint one or more-investment-managers (which may include the Company) who shall have the power '

to direct the Trustee in investing the assets-of the-Funds;  ;

provided, however, that the Trustee shall not follow any direction which would result in assets of the Qualified Fund being invested.  ;

i in assets other than Permissible Assets as definedLin-the1Special Terms. To the extent that the Company chooses to exercise-this authority, it shall so notify the Trustee and instruct the Trustee in writing to separate into a separate account those assets.the investment of which will be directed by each investment manager.

The Company shall designate in writing the person or persons who-are to represent any such investment manager in dealings with the Trustee. Upon the separation of the assets in accordance with the Company instructions, the Trustee, as to those assets while so separated, shall be released and relieved of all investment

c. .u 1

l duties, investment responsibilitiesLand investment liabilities I normally or statutorily incident to a trustee;t provided, however, that the TrusteeEshall not be relieved of-the responsibility of

-)

ensuring that. assets of the Qualified Fund-are invested solely in; (

Permissible Assets, as defined in the Special Terms. The-Trustee shall retain all other fiduciary duties with respect to assets the-investment of which is directed by invest' ment managers.

(b) To the extent that the-investment of assets of the Funds is not being directed by one or more investment managers under Section 3.02(a), the Trustee shall hold, invest, and reinvest the funds delivered to it hereunder as it in its sole.

( discretion deems advisable, subject to the restrictions' set forth herein for investment'of the assets of.the Qdalified Fund.

(c) Regardless of the person directing investments, any- l assets of the Qualified Fund shall be invested solely in ,

L Permissible Assets as defined in, and required by, the Special Terms, and shall be. accumulated, invested, and reinvested in like  ;

manner. Upon the written consent of-the Company, the assets of the Qualified Fund and the Nonqualified Fund may be pooled for the purpose of investing the assets with each other, with the-assets of other Nuclear Decommissioning Reserve Funds under section 468A-of the Code established by (x) the Company or (y) any other utility for which the Trustee serves as trustee of the Nuclear Decommissioning Reserve Fund, and with the assets of any other- ,

l nuclear decommissioning funds established by (m) the Company or '

_9

a

't

-(n) any other utility for which the Trustee serves.as trustee of the nuclear decommissioning fund, provided the following conditions are satisfied: (1) the trustee-of each nuclear decommissioning fund must separately account for the contributions, earnings, expenses, and-distributions of'such fund; i (ii) the earnings and. expenses'must be reasonably apportioned among'such nuclear decommissioning funds; (iii):if assets of a Nuclear Decommissioning Reserve' Fund under section 468A'of the Code are pooled with assets of any other nucleari decommissioning  ;

fund, all such pooled assets must be invested solely in j Permissible' Assets as defined in the Special' Terms; and-(iv) the books and records of such funds must enable the Internal Revenue i i

Service to verify that the requirements of section 468A of the

.i Code and the regulations thereunder are satisfied. The assets of j the Qualified Fund may not be pooled for the purpose.of investing ~  ;

the assets with assets of any nuclear. decommissioning fund j established by any other utility if'such pooling,would result in.

i the Qualified Fund failing to qualify'as a Nuclear Decommissioning Reserve Fund under section 468A of the Code.

Section 3.03. Prohibition-Acainst Self-Dealina, ,

Notwithstanding any other provision in this Agreement, the Trustee shall not engage in any act-of self-dealing:as defined in section 468A(e)(5) of the Code and Treas. Reg. $1.468A-5(b) or any corresponding future Treasury Regulation.

I i

F i, . %

Section 3.04. -pomeensation. The Trustee shall be entitled to receive out of the Funds reasonable' compensation for services rendered hy it,-as well as expenses.necessarily incurred by it in the execution cf the trust hereunder, provided such.

~

compensation and expenses qualify as administrative costs and >

other incidental expenses of the Qualified Fund, as defined in the-Special Terms, with respect to'any payment of compensation and ,

expenses from the Qualified Fund.

1 Section 3.05.. Books of Account. The Trustee shall keep separate true and correct books of account with respect =to each of the Funds, which books of account shall at all-reasonable i

times be open to inspection by the Company or its: duly appointed representatives. The Trustee shall, upon written-request of the Company, permit government agencies, such as the PUC or the .

i l

Internal Revenue Service, to inspect the books of account.of the '

Funds. The Trustee shall furnish to the Company by the tenth.

business day of each month a statement for each Fund showing,_with  !

respect to the preceding calendar month, the balance of assets on hand at the beginning of such month, all receipts, investment transactions, and disbursements which took place during such month and the balance of assets on hand at the end of such month. The-Trustee agrees to provide on a timely basis any information deemed t

necessary by the Company to file the Company's federal, state and-local tax returns.

-t

Section 3.06. Reliance on Documents. The Trustee, upon receipt of documents furnished to.it by_the Company pursuant i to the provisions of this Agreement, shall examine she same to.

I determine whether they conform to the requirements thereof. The-Trustee acting in good faith may conclusively rely, as to the truth of statements and the correctness of opinions' expressed in-any certificate or other documents conforming to-the requirements of this Agreement. If the Trustee in the administration'of the i

Funds, shall deem it necessary or desirable that a matter be l

provided or established prior to taking or suffering any action l i

=

hereunder, such matter-(unless evidence in respect thereofEis l otherwise specifically prescribed hereunder) may be deemed by the-Trustee to be conclusively provided or established:by a-certificate signed by the Chairman ~of the Board, th'e: President or any Vice President of the Company and delivered to the Trustee.

The Trustee shall have no duty to inquire: into the validi+'y, accuracy or relevancy of any-statement contained in any i

certificate or document nor the 'uthorization a of any party making such certificate or delivering such document and the Trustee'may rely and shall be protected in acting or refraining from acting upon any such written certificate or document furnished to it hereunder and believed by it to be genuine-and to have been signed ,

or presented by the proper party or parties. The Trustee shall not, however, be relieved of any obligation to refrain from self-dealing as provided in Section 3.03 hereof or from ensuring. that; all assets of the Qualified Fund are invested solely in i

Permi ssible Assets as defined in the Special Terms.

l

'.=ou ,

Section 3.07. Liability-and Indemnification. The-

. Trustee shall not be liable for any action taken by it in good faith and without gross negligence and believed by it to be authorized or'within the rights or powers-conferred upon it by this Agreement and may consult with counsel 1of its own choice (including counsel for the Company) and shall'have full and l complete authorization and protection-for any action taken.or suffered by it hereunder in good faith and without gross negligence and in accordance with the opinion of such' counsel,'

provided, however, that the Trustee shall be liable for any consequences resulting from investing assets of:the Qualified 1 Fund'

} .

L in other than Permissible Assets or from self-dealingJas-provided' -i in Section.3.03 hereof. Provided indemnification does;not result l

in self-dealing under Section 3.03 hereof or in a deemed-contribution to the Qualified Fund in excess of the limitation:on contributions under section 468A of the Code and the regulations" thereunder, the Company hereby agrees:to indemnify the, Trustee for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, willful recklessness or-bad faith on the part of the Trustee, arising out of or in i connection with its entering into-this Agreement and carrying out its duties hereunder, including the' costs and expenses of defending itself against any claim of liability in the premises, provided such loss, liability or expense does not result from investing assets of the Qualified Fund in other than Permissible Assets as defined in the Special Terms or from self-dealing under

..,. ,.~,

Section 3.03 hereof,.and provided further, that.no such costs or -

expenses shall be paid if the payment of such costs or expenses is prohibited by section 468A of the Code or the: regulations ,

thereunder.

Section 3.08. Resianation, Removal-and Successor Trustees. The Trustee may resign at any time upon thirty (30) days written notification to the Company. The Company.may remove the Trustee for any_ reason at any time upon thirty (30) days written notification to the Trustee. If a successor Trustee shall' not have been appointed within thirty (30) days'after the giving of written notice of 'such resignation or removal, the: Trustee . or s Company may apply to any court of competent jurisdictioncto appoint-a successor Trustee to act until such time, if any, as a successor shall have been appointed and shall have accepted'its appointment as provided below. If the Trustee shall be adjudged j bankrupt or insolvent, a-vacancy shall thereupon be deemed to exist in the office of Trustee and a successor shallLthereupon be appointed by the Company. Any successor Trustee appointed hereunder shall execute, acknowledge and deliver to the-Company an appropriate written instrument accepting such appointment hereunder, subject to all the terms and conditions hereof, and thereupon such successor Trustee shall become fully vested with j all the rights, powers, trusts, duties and obligations of its

! I predecessor in trust hereunder, with like effect as if originally l named as Trustee hereunder. The predecessor Trustee shall upon l

written request of the Company, and payment of all fees and

.. . . ~

r expenses, deliver to the successor Trustee the corpus of the Funds ,

and perform such other acts as may be required ~or be desirable to;

. vest and confirm in said'auccessor Trustee all right, title and i

interest'in the-corpus of the Fund to which'it succeeds.

Section 3.09.. Mercer of Trustee. Any corporation into which the Trustee may be merged or withewhich it may be- q consolidated, or any corporation resulting from any merger or consolidation to which the' Trustee shall be a party, or any '

corporation to which the corporate trust functions of the Trustee may be transferred, shall be the successor Trustee under this Agreement without the necessity of executing.or filing any additional acceptance of this' Agreement or.the performance of any further act on the part of any other parties hereto.

-ARTICLE IV Amendments The Company may amend this Agreement from time to time, -

provided such amendment does not cause the Qualified Fund to fail to qualify as a Nuclear Decommissioning Reserve Fund under section 468A of the Code and the regulations thereunder. The' Qualified:

Fund was established and shall be maintained for the sole purpose' of qualifying as a Nuclear Decommissioning Reserve Fund under section 468A of the Code and the regulations thereunder. If the Qualified. Fund would fail to so qualify because ofmany provision contained in this Agreement, this Agreement shall be deemed to be

+

amended as necessary to conform;with the requirements of section 468A and the regulations thereunder. If a proposed amendment shall affect the responsibility of the Trustee, such amendnient shall not be considered valid and binding _until such time as the amendment is executed by the Trustee.  !

ARTICLE V Termination The Qualified Fund shall terminate upon the later of (A)

I the earlier of either-(i) substantial completion of decommissioning of the Unit, as defined in the Special Terms, or 4 (ii) disqualification of the Qualified. Fund by the Internal 1.

Revenue Service as provided in Treas. Reg. $1.468A-5(c) or any corresponding future Treasury-Regulation _or (B) termination by the i U.S. Nuclear Regulatory Commission of the Company's operating.  ;

license with respect to the Unit. The Nonqualified Fund shall' terminate upon termination by the U.S. Nuclear Regulatory

-Commission of the Company's operating license with; respect to the Unit. Upon termination of either Fund, the assets of the i terminated Fund shall be distributed in accordance with any (

written directive of the PUC concerning. termination of such1 Fund.

Absent a 5ritten directive of the PUC within thirty (30) days i

after the PUC is notified of the termination, all of the assets shall be Listributed to the Company. The Company shall provide the Trustee with notification that the Qualified Fund or the Nonqualified Fund, as the case may be, has terminated and with 1

l j

l~

either-(i) the PUC written directive or'(ii) a certificate signed ,

~

by its Chairman of the Board, its President or.one of its Vice Presidents and its Treasurer-or an Assistant Treasurer stating l l

l that there is no PUC written directive and that' thirty (30) days  !

l have elapsed since notification to the PUC of termination, as the l' .

case may be, prior to distribution of the assets of-the terminated l

Fund. I l ARTICLE VI L i Miscellaneous .

1 Section 6.01. Bindina Acreement. All covenants and L agreements in this Agreement shall be' binding upon and= inure to i

the benefit of the respective parties hereto, their successors:and assigns.

Section 6.02. Notices. All notices and communicatjopa hereunder shall be in writing and shall be deemed to be duly given on the date mailed if sent by registered mail, return receipt requested, as follows:

MELLON BANK, N.A.

Trust and Investment Department  !

ATTN: Trust Administration Room 151-3346 One Mellon Bank Center Pittsburgh, PA 15258 i

Duquesne Light Company One Oxford Centre, 28-2 301 Grant Street Pittsburgh, PA 15279 Attention: Treasurer

, - ~ -

.. o.

or at such other' address es any of the above may have-furnished to  ;

the other parties in writir.g byg registered mail, ' return receipt requested.

Section 6.03. Governino Law._ The Funds-have been established pursuant to this Agreement in-accordance with the :r requirements for a trust under the laws,of the Commonwealth of Pennsylvania, and this Agreement shall be governed by and r

construed and enforced-in accordance with the laws of the-  :

Commonwealth of. Pennsylvania.

Section 6.04. Countercarts. This Agreement may be executed in several counterparts, and'all such counterparts executed and delivered, each an original, shall constitute but one and the same instrument.

t i

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed in its corporate name by,one of its'Vice Presidents, and its corporate seal to be affixed hereunto, and the '

same to be-attested by its Secretary or one of its Assistant ,

Secretaries; and j Mellon Bank, N.A. has caused this Agreement to be signed in its corporate name by one of its Vice Presidents, and its corporate seal to be affixed hereunto, and the same to be

, T, c , . .

,,. attested by one of-its Assistant Secretaries or'one of its Trust

? :n Officers.

WITNESS the due execution and:ensealing hereof the day and year first above written.

ATTEST: DUQUESNE LIGHT-COMPANY y- 4 boJ 3. R '

By: P_ /

Secretary Vic r dent'

[ Corporate Seal)-  ;

I l

ATTEST:

MELLON BANK, N.A.

) ft i . t i? t h /t:( By: # cl Med Vice-President

[ Corporate Seal] j C

n i;.- .:. .

+

COMMONWEALTH OF PENNSYLVANIA ')-

) SS:

COUNTY OF ALLEGHENY )-

On this loth day of March,11989,Ebefore me, the .i undersigned Officer, a Notary Public;in and for said Commonwealth-and-County, personally appeared: Gary L. Schwass, who: acknowledged himself to be a Vice President of Duquesne Light Company, a Pennsylvania corporation, and that he as such being authorized to l 1

do so executed the foregoing Indenture for the purposes therein contained by signing the-name of Duquesne. Light Company by himself .[

i as Vice President, i

I .

1 IN WITNESS WHEREOF, I;have hereunto set my hand-and official seal.

d. uk N ry'Public  :

My Commission expires: ,

i 1

g EMA A.Lt%% MTARYputz EIIWACH AIL 3?Qycop;,7y 5 5 ? & *)}$?n 0 MARCHt%1001 n +.rv.nym w., .,,,,;; g i b

l l

. . . - - . =. .-

I l

l:

COMMONWEALTH OF PENNSYLVANIA: )

4

) SS::

COUNTY OF' ALLEGHENY- )  :

On this M6 day.of April, 1989',Lbefore meithe

- undersigned officer, a-Notary Public in.and for said State andL i County, personally appeared l Christine A.-Bloom, who acknowledgedc

, herself to be.a Vice President of:Mellon Bank,-N.A., a national -

banking-association and that she;asisuch being authorized to do:so .

executed on-March 1 0 ,= 1 9 8 9 ,.. the Nuclear Decommissioning: Trust Agreement between Duquesne Light Company and'Mellon Bank, N.'A.,las t o

Trustee, relating to Unit No.~1 of the PerryfPower Station,.'for the purposes therein contained by signing the name of Mellon Bank, N.A. by herself as Vice President' .

.IN WITNESS WHEREOF, I have' hereunto set my. hand and-official seal.

l-i V NotaryPublicy

~ , NOIAd$'Eg DE30R41 A.WR:GHT.h0TARYPUBUC I PITTSSURGH.. Al' EGHENYCOUNTY My. Commission expires: 5(53' ""o"*S$*" = "S"^ = $

Membw Pemsyfvane Assooamof tem J .

A

. , _ . . . . ~ _ _,

. o. .-

Exhibit A-to-tho-Nucloor D0commionioning'

-Truot" Agreement ~

. .j SPECIAL TERMS'OF'THE-QUALIFIED: 1 NUCLEAR = DECOMMISSIONING RESERVE FUND The-following Special Terms of the Qualified Nuclear Decommissioning . Reserve - Fund (the " Qualified - Fund ') -(hereinaf ter referred to as the "Special. Terms")_will apply forfpurposes of_the -)

Nuclear Decommissioning Trust Agreement, dated March 10, 1989  :[

i between Duquesne Light Company (the " Company")fand Mellon Bank,-  !

i' N.A._(the'" Trustee") (the " Agreement").

-i Section-1, ' De finit' ions . The following terms: as used irr 9

the Special Terms shall, unless the context clearly indicates-otherwise, have the following respective-meanings:

i I

(a) " Administrative-costs andiother incidental: expenses of the Qualified Fund" shall'meantallLordinary and necessary expenses incurred in connection with theLoperation-of the i Qualified Fund, as provided in1Treas. Reg. - $1'.468A-5(a) (3 ) (ii) ( A_ ) -i or any corresponding future Treasury Regulation,-incibding,-

without limitation, federal,. stateand. local incomeitax'; legal-4 expenses, accounting expenses, actuarial expenses and trustee expenses. >

(b) " Qualified Decommissioning Costs" shall mean all-expenses otherwise deductible for federal income tax purposes, -

i without regard to section 280B of:the Internal Revenue Code of 1986, as amended, or any corresponding section or sections of:any, future United States internal revenue statute (the " Code"),

0 incurred (or to be incurred) in connection with the1 entombment, decontamination' dismantlement,,removalfand disposal of the structures, systems and components of the~ Unit when it has permanently ceased the production of electric energy, excluding.  :

any costs incurred for the disposal of spent nuclear fuel, as i

I provided in Treas. Reg.-$1.468A-1(b)(5)-or any corresponding l

L future Treasury Regulation. Such term includes al1~otherwise-

deductible expenses to be incurred'in connection with the

~

preparation for decommissioning, such as engineering'and other planning expenses, and all otherwise deductible-expenses'to be 3

i incurred with respect to the Unit after the actual decommissioning occurs, such as physical security and radiation monitoring-expenses.

(-

(c) " Obligations of a state or-local government" shall mean obligations of a state or local government unit /the-interest i

on which is exempt from tax under section.103(a) of;the Code, as-provided in Treas. Reg. $1.468A-5(a)(3)(ii)(C) or any l

corresponding future Treasury' Regulation.

(d) " Permissible Assets" shall mean the following assets:

(1) Public debt securities of the United _ States; (ii) Obligations of a state or local government that are not in default as to principal or interest;  ;

A-2

l-

. k l i l

(iii). Time or demand' deposits in a bank, as defined in section 581 of the Code, or an insured credit union within the meaning of section 101(6) of the Federal ~ Credit Union Act, 12 ,

U.S.C. 1752(7) (1982), located in the United-States; or ,

i (iv) Any other investment permitted for:a qualified nuclear decommissioning reserve fund under section 468A'of the q '

Code and the regulations thereunder.

-(e) "Public debt securities of the United States 'shall [

mean obligations that are taken into consideration for. purposes of' the public debt limit, as provided in-Treas. Reg. $1.468A-5(a)(3)(ii)(B) or any corresponding future Treasury-Regulation, including, as of-the-date hereof, Treasury bills,-Trearury notes, Treasury bonds and savings bonds.

l (f) "PUC" shall mean the Pennsylvania Public. Utility, 1

Commission or any other corresponding governmental authority having jurisdiction over the Unit.

(g) " Substantial completion of decommissioning" shall L mean the date that the maximum acceptable radioactivity levels-mandated-by the U.S. Nuclear Regulatory Commission'with respect >to a-decommissioned nuclear power plant are satisfied by the Unit; ,

provided, however, that if the Company requests a ruling.from the Internal Revenue Service, the date designated by the Internal-Revenue Service as the date on which substantial completion of.

)

A-3 1 y

4

I deconsissioning occurs shall Jgovern; provided, further, that the t

date-on which substantial completion of decommissioning occurs shall be in accordance with Treas. Reg. $1.468A-5(d)(2) or any  ;

corresponding fstv<w Oreasury Regulation.

(h) " Time er demand deposits" shall-mean checking f accounts, savings accounts, certificates of deposit or other time or demand deposits, excluding common or collective trust funds, as provided in Treas. Reg. $1.468A-5(a)(3)(ii)(D) or any ,

corresponding future Treasury Regulacion, j

~

Section 2. Contributions to the Oualified Fund. The.  !

assets of the Qualified Fund shall be contributed by the. Company (or by others approved by the Company in writing) from time to time in cash. The Trustee-shall not accept any contributions for ,3 the Qualified Fund'other.than cash payments with respect to which the Company is allowed a deduction under section 468A(a).of1the' 1 .

Code and Treas. Reg. $1.468A-2(a) or any corresponding' future Treasury Regulations. The Company hereby_ represents that all contributions (or deemed contributions) by the Company to the-Qualified Fund in accordance with the provisions of Section 1.03 of the Agreement shall be deductible under section 468A of the Code and Treas. Reg. $1.468A-2(a) or any corresponding future Treasury Regulation or shall be withdrawn pursuant to Section 4 hereof.

1 A-4

l SectionL3. Limitation on-Use of Asssta. The assets.of the Qualified Fund shall be used exclusively 5as:follows:

(a) To. satisfy, in whole - or irt part, the. liability of

. i the Company =for Qualified Decommissioning Costs through payments by the Trustee pursuant to Section~2.02 of the Agreement; and (b)- To pay the' administrative costs and'~other-incidental expenses of the Qualifie'd Fund; .and (c) To the extent the assets of the Qualified-Fund-are I

not currently required for (a) and (b) above, to invest-directly ]

in Permissible Assets.

Section 4. JWithdrawals by-the Comoany. If.the  !

Company's contribution (or deemed : contribution) to the Qualified 1 Fund in any one year exceeds the amount deductible under section= j

-1 468A of the Code and the regulations thereunder,-the-Company may- l

-l withdraw such excess contribution from the Qualified-Fund or j instruct the Trustee to withdraw such excess contribution from the j Qualified Fund and pay such excess contribution to'the q Nonqualified Fund, as defined in the. Agreement, pursuant to.

Section 2.04 of the Agreement, provided any such withdrawal occurs on or before the date prescribed by law (including extensions) for filing the federal income tax return of the' Fund for the taxable year to which the excess contribution. relates for witndrawals-  !

pursuant to Treas. Reg. $$1.468A-5(c)(2) and 1.468A-2(f)(2)'and I A-5 l

1

• . ,

• l occurs on or before the later of the date prescribed by law l (including extensions) for filing the federal income tax return of the Fund for the taxable year to which the excess contribution relates or the date that is thirty (30) days after the date that l

l the Company receives the ruling amount for such taxable year for  !

[

l withdrawals pursuant to Treas. Reg. $1.468A-3(j)(3). If the Company determines that withdrawal pursuant to this Sectior 4 is '

appropriate, the Company shall present a certificate so stating to the Trustee signed by its Chairman of the Board, its President or one of its Vice Presidents and its Treasurer or an Assistant Treasurer, request 4ng such withdrawal. The certificate shall be substantially in the form attached as Exhibit C to the Agreement '

for transfers to the Nonqualified Fund as provided in Section 2.04 of the Agreement and substantially in the form of Exhibit D to the r

Agreement for withdrawals by the Company.

l Section 5. Taxable Year / Tax Returns. The accounting i and taxable year for the Qualified Fund shall be the taxable year of the Company for federal income tax purposes. If the taxable r

year of the Company shall change, the Company shall notify the l 1

Trustee of such change and the accounting and taxable year of the Qualified Fund must change to the taxable year of the Company as provided in Treas. Reg. fl.468A-4(c)(1) or any corresponding future Treasury Regulation. The Company shall assist the Trustee in complying with any requirements under section 442 of the Code and Treas. Reg. 61.442-1. The Company shall prepare, or cause to be prepared, any tax returns required to be filed by the Qualified A-6

+ .-:

I

< -a- .,. .;

t i'=

Fund, and the Trustee'shall'aign and fileisuch returns on~ behalf' of.the Fund.- The. Trustee shall cooperate'with the Company in.the '

preparation.of such returns. .

.i 1 1 L

s

~

t

! t t

i i

?

I

'l

-r ,

j

'r h

n. <

p

-f 1 k

> f'-

.a

.i

\.

.L 1

' {

k

-5 a

i[

t r

p s

.i i.' <

.L n

ih if .

3 .h L

Ik

.' ) ,

. a k

5

.7 3

~!.

J

't

1. 5 ,

Y

, 1-

!. i l

)

- .f  ;

^h

-.1

'.,l.

a f

-e l,

'A-7 <

l 7

'h t . ';

[ n t '

ji . . _ . . . - _ ...-.-.._...__...-_-._..~...~-......._....-..s.~__-.

. . . . . - , .-._,.-...-.,~,>m--.-

,--.r...-..-,P -'

Exhibit B .

to tho Nuclocr Dec:mmissicning Truct Agrccm:nt CERTIFICATE FOR PAYMENT OF DECOMMISSIONING COSTS 7

(Name of Trustee],

as Trustee

[ Address)

This Certificate is submitted pursuant to Section 2.02 of the Nuclear Decommissioning Trust Agreement, dated March 10, 1989, between Mellon Bank, N.A. (the " Trustee") and Duquesne Light '

Company (the " Company") (the " Agreement"). All capitalized terms i used in this certificate and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. In j your capacity as Trustee, you are hereby authorized and requested to disburse out of the Funds to the amount of $ from the Qualified Fund and the amount of $ from the Nonqualified Fund for the payment of the Decommissioning Costs which have been incurred. With respect to such Decommissioning ,

Costs, the Company hereby certifies as follows:

1. The amount to be disbursed pursuant to this ,

Certificate shall be solely used for the purpose of paying the Decommissioning Costs described in Schedule A hereto.

l 2. None of the Decommissioning Costs described in Schedule A hereto have previously been made the basis of any certificate pursuant to Section 2.02 of the Agreement. ,

+w

3 .

3. The amount to be disbursed from the Qualified Fund pursuant to this certificate shall be used solely for the purpose of paying Qualified Decommissioning Costs as defined in the Special Tarms.

4. Any necessary authorizations of the PUC or any corresponding governmental authority having jurisdiction over the decommissioning of he Unit have been obtained.

IN WITNESS WHEREOF, the undersigned have executed this Certificate in the capacity shown below as of , .

DUQUESNE LIGHT COMPANY By_ l Name:

Title:

By Name:

Title B-2 l

_ Exhibit C to tha Nuclocr Dec mmicciening  ;

! Trust Agro m:nt t i

?

CERTIFICATE FOR TRANSFER BETWEEN THE QUALIFIED FUND l

AND THE NONQUALIFIED FUND l  !

[Name of Trustee], i as Trustee

! [ Address)

This Certificate is submitted pursuant to Section 2.04

{

i of the Nuclear Decommissioning Trust Agreement, dated March 10, 1989, between Mellon Bank, N.A. (the " Trustee") and Duquesne Light  ;

Company (the " Company") (the " Agreement"). All capitalized terms ,

used in this certificat6 and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. In [

your capacity as Trustee, you are hereby authorized and instructed ,

as follows (complete one):

To pay $ in cash from the Nonqualified Fund to the Qualified Fund; or l To pay 4 in cash from the Qualified Fund to the Nonqualified Fund.

With respect to such payment, the company hereby certifies as follows:

1. Any amount stated herein_to be paid from the [

l Nonqualified Fund to the Qualified Fund is in accordance  !

with the contribution limitations applicable to the ,

l Qualified Fund set forth in Section 2 of the Special l

Terms and the limitations of Section 2.04 of the ,

Agreement.

2. Any amount stated herein to be paid from the \

Qualified Fund to the Nonqualified Fund is in accordance with Section 4 of the Special Terms. The Company'has determined that such payment is appropriate under the l standards of Section 4'of the Special Terms.

l h

t

c-

, . .s.-.

-[

1

'l i

i I

i l

IN WITNESS WHEREOF, the undersigned have executed this  !

a

. Certificate in the capacity shown below as of , .  !

l,

~

DUQUESNE LIGHT ODMPANY ,i

^l

• Y Name:

Titles.

By Name:

Titles o

C-2 l i-

e si e Exhibit D I ts tha Nuciocr-Decommicsioning Trust AgrOcm:nt i

I CERTIFICATE FOR WITHDRAWAL I OF EXCESS CONTRIBUTIONS FROM QUALIFIED FUND i

[Name of Trusteel as Trustee ,

[ Address] .

i' This Certificate is submitted pursuant to Section 4 of the Special Terms attached as Exhibit A to the Nuclear i Decommissioning Trust-Agreement, dated March ~10, 1989, between t

i Mellon Bank, N.A. (the " Trustee") and Duquesne Light Company (the

" Company") (the " Agreement"). All capitalized _ terms used in this i

Certificate and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. In your ,

capacity as Trustee, you are hereby authorized and. instructed to pay $ in cash to the Company from the Qualified _ Fund.

With respect to such payment, the' Company hereby certifies-that withdrawal pursuant to Section 4'of.the Special Terms is appropriate and that $ constitutes an excess- '

contribution pursuant to such Section, f

?

+ ,- -e e

i  ;

o g.c e i 1

1 IN: WITNESS. WHEREOF,.the undersigned have executed this .

h certificate in the capacity shown below as of ,. .  !

i i

i

, DUQUESNE LIGHT COMPANY i i

-i l,

i By Name: ;g Title. .

t i  !

,By  ;}

Name: .

t Titie: .

[

t

't I

i

'i l

i I

• ?

r i

!I i

~f i

i t

, '!f 1 i l

i

+

I

'I h

.I

, I l

D-2 [

lf

i BEFORE THE '

UNITED STATES NUCLEAR REGULATORY COMMISSION OHIO EDISON COMPANY Docket No. 50-440  !

PENNSYLVANIA POWER COMPANY DECOMMISSIONING REPORT l OHIO EDISON COMPANY and its wholly owned subsidiary PENNSYLVANIA POWER COMPANY (Companies), hereby submit this .

Decommissioning Report in compliance with 10 C.F.R. sections >

50.33 (k) and 50.75(b). Ohio Edison Company and Pennsylvania Power company are both licensees. I

1. Ohio Edison Company owns a 30.0% undivided interest in the Perry Nuclear Power Plant Unit One (Unit). Pennsylvania Power Company owns a 5.24% undivided interest in the Unit.

2. 'The minimum financial' assurance amount for decommissioning the Unit is $59,895,666. The calculation of this amount is set forth in Exhibit A and complies with the formula set forth in 10 C.F.R. section 50.75(c).

l l

. J

3. The method by which the companies will provide 1 l l financial assurance for decommissioning the Unit will be by establishment of an external sinking fund (s) in which deposits-will be made at least annually.

r

4. Attached as Exhibit B to this Decommissioning Report are copies of the executed trust instruments for the external sinking funds.

5. Attached as Exhibit C to this Decommissioning Report .

are schedules for implementing the method of providing financial assurance for decommissioning the Unit.

6. The Companies jointly certify that financial assurance for decommissioning the Unit is provided by the total external sinking fund balance as shown in= Exhibit D. The total  ;

, external sinking fund balance is in excess of the minimum- i financial assurance amount for the Unit.

OHIO-EDISON COMPANY By:

H. P. .B y Senior Vice : esident l

L PENNSYLVANIA POWER COMPANY By:

.R. P. Wushinske. '

Vice President & Treasurer

?

Dated: July 23, 1990 1

EXHIBIT A OHIO EDISON COMPANY I Calculation of Minimum Financial Assurance Amount for December, 1989 .

Perry Nuclear Power Plant Unit One j ohio Realons Labor (L) = Midwest Energy (E) = East North Central Waste Burial (B) = South Carolina-  :

For BWR Unit L= 1.149 E= 0.867 1 B= 1.814 ,

BWR Escalation Factor =

0.65 (1.149) + 0.13(0.867) + 0.22(1.814) = 1.259.

Base Amount for BWR greater than.3400 MWt = $135 million.

?

Escalated Amount for unit = $135,000,000 x 1.259 = $169,965,000.

^

Escalated Amount for Ohio Edison Company's ownership interest (30.0%) in the unit:

$169,965,000 x .3 = $50.989.500 for December, 1989. '

L l l

I

)

i il l

i j

J

I l

EXHIBIT A PENNSYLVANIA POWER COMPANY  !

Calculation of Minimum Financial Assurance Amount for December, 1989 Perry Nuclear Power Plant Unit One~

t phio Reaions l

Labor (L) = Midwest i Energy (E) = East North central Waste Burial (B) = South Carolina  ;

i For BWR Unit j L= 1.149 E= 0.867 -

B= 1.814 i

BWR Escalation Factor = l 0.65 (1.14 9) + 0.13 (0. 867) + 0. 22 (1. 814 ) = 1.259. .

Base Amount for BWR greater than 3400 MWt 6 $135 million.

L Escalated Amount for unit = $135,000,000 x 1.259 = $169,965,000.

Escalated Amount for Pennsylvania Power Company's ownership interest (5.24%). in the unit: l

$169,965,000 x .0524 = $8.906.166 for December, 1989.

1 I

I i

i

..s 1 bi EXHIBIT 8 d

i t

t i

f I

PENNSYLVANIA POWDt COMPMW ,

QUALIFIED DECONNI. lSMONI)G TRUS" AGREEMENT .

FOR PERRY FJC: EAR PolfER PLANT P f

e i

i t

i I

Dated: March 10, 1989 l

5 I

. . _ . _,,_,...,-r-. ,,w, - - , . , _ , , . . . . ~ , + . , ..,.s , __ u-_______-- __.%__ -

...-_. ,-m__ --

, '.- l l

l 6' l

TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS.

1.01 Definitions.............................. 3 ARTICLE II. QUALIFIED TRUST PURPOSES, NAME AND SUBACCOUNTS.

l

2.01 Qualified Trust Purposes. . . . . . . . . . . . . . . . 7  ;

t 2.02 Establishment of Qualified Trust........ 7  ;

2.03 Acceptance of Appointment............... 8 2.04 Name of Qualified Trust................. 8 2.05 Segregation of Qualified Trust.......... 8  ;

2.06 Designation of Subaccounts.............. 9 i 2.07 Duties of Authorised Representatives.... 9 d

2.08 Alterations and Amendments.............. 10 2.09 No Authority to Conduct Business........ 10 2.10 No Transferability of Qualified Trust... 11 ARTICLE III. CONTRIBUTIONS AND INCOME.

1 3.01 Initial Contribution.................... 11 3.02 Additional Contributions................ 11 3.03 Allocation of Income.................... 12 3.04 Subsequent Adj ustments . . . . . . . . . . . . . . . . . . 12 '

1 ARTICLE IV. DISTRIBUTIONS.

4.01 Payment of Decommissioning Costs........ 13 I 4.02 Payment of Administrative Costs......... 13 4.03 Fees.................................... 14 4.04 Liquidation of Investments............... 14 ARTICLE V. .

TERMINATION.

t 5.01 Termination of Qualified '

Trust in General...................... 14 5.02 Termination of Qualified Trust  !

Upon Disqualification................. 15 5.03 Termination of Qualified Trust on. Sale of'P1 ant....................... 15 5.04 Distribution of Qualified Trust Upon Termination........................... 16 1

i

-i-

l s <

O I

ARTICLE VI: TRUSTEES. )

6.01 Designation and Qualifications l of Successor Trustee (s)............... 16 I i 6.02 Exoneration from Bond................... 18 j 6.03 Resignation............................. 18 1 6.04 Transactions With Third Parties......... 18 6.05 Accounts and Reports.................... 18 l

6.06 Tax Returns and other Reports........... 20 6.07 Liability............................... 23 ARTICLE VIIt INVESTMENTS.

1 1 ,

l 7.01 Appointment of Investment Manager (s).... 23 1 7.02 Direction by Investment Manager (s)...... 25 l ARTICLE VIII: TRUSTEE'S GENERAL POWERS.  !

8.01 Extension of Obligations and . -

Negotiation of Claims................. 27 8.02 Registration of Securities.............. 27 8.03 Borrowing............................... 28 l

8.04 Retention and Removal of Professional and Employee Services................. 28 8.05 Delegation of Ministerial Powers. . . . . . . . 28 ,

8.06 Powers of Trustee to Continue Until Final Distribution.............. 28 8.07 Discretion in Exercise of Powers................................ 29 l

ARTICLE IX: TRUSTEE'S INVESTMENT POWERS.

r 9.01 Preservation of Principal............... 30 9.02 Investment of Qualified Trust........... 30 ,

9.03 Cash Sweep Investments.................. 31 s 9.04 Management of Qualified Trust........... 32 ARTICLE X MISCELIANEOUS .

10.01 Headings................................ .

33 10.02 Particular Words........................ 33 10.03 Severability of Provisions.............. 33 10.04 Delivery of Notices Under A 10.05 Successors and Assigns.....greement..... ............. 33 34 '

10.06 Governing Jurisdiction.................. 34 10.07 Accounting Year......................... 35 10.04 Counterparts............................ 35 EXHIBIT At CERTIFICATE EXHIBIT Bt SCHEDULE OF INITIAL CONTRIBUTION EXHIBIT C FEE SCHEDULE AND SCHEDULE OF ADMINISTRATIVE COSTS

e' 1

QUALIFIED DECOMMISSIONING TRUST AGREEMENT

' AGREEMENT made this 10th day of March, 1989, by and.  !

between Pennsylvania Power. Company, a Pennsylvania

, corporation'(" Company"), and First National Bank of Western Pennsylvania, a national banking association having trust powers (" Trustee").

I

]

, RECITALS OF THE COMPANY WHEREAS, the Company is the owner of a 5.24 percent j' undivided interest in Unit one of the Perry Nuclear Power Plant and the Common Facilities associated therewith 1 and a

WHEREAS, the Company is subject to regulation by the Pennsylvania Public Utility Commission'("PPUC"), an agency of the Commonwealth of Pennsylvania created api existing ,

pursuant to 66 Pa. C.S.A. I 101 g sea.,-and by the Federal Energy Regulatory Commission-("FERC") and the ,

1 Nuclear Regulatory Commission ("NRC"), both agencies of the United 'tates S government created and existing pursuant )

to 42 U.S.C. Il 7134 and 7171, and 42 U.S.C. I 5841, respectively; and WHEREAS, the PPUC and the FERC have permitted the Company to include in its cost of service for ratemaking purposes certain amounts to be contributed by the company to a qualified nuclear decommissioning reserve fund in 1

1  : ~ _ >

4 .

l

.o  !

2-l order to provide adequate monies for dscommissioning costs with respect to the Company's ownership interest in the  !

Perry Nuclear Power Plant; and WHEREAS, pursuant to section 468A of the Internal l

Revenue Code of 1986 (" Code"), certain Federal income tax I

benefits are available to the Company by creating and making contributions to a qualified nuclear l decommissioning reserve fund associated with the Company's ownership interest in the Perry Nuclear Power Plant; and WHEREAS, the Company wishes to establish a qualified i nuclear decommissioning reserve fund to hold monies for decommissioning its ownership interest'in the Perry Nuclear Power Plant; and r WHEREAS, the assets of the qualified nuclear decommissioning reserve fund shall be deemed to have been j transferred to a Qualified Trust to be held hereunder for the benefit of such trust. '

RECITALS OF TRUSTEE '

WHEREAS, First National Bank of Western Pennsylvania is a national banking association with trust powers; and WHEREAS, First National Bank of Western Pennsylvania l

is willing to serve as Trustee of the Qualified Trust on the terms and conditions herein set forth.

4 h

u -. . _ _ _ , . _ , ., , . - . _ _ . . , . _ _ _ . . _ _ . . _ . . _ . . . . . . _ _ _ . _ , _ . . . . . . , _ , . , _,,. . _ , .

1

, o l

I NOW, THEREFORE, in consideration of the mutual f promises herein contained, the company hereby agrees to deliver to the Trustee and the Trustee hereby agrees to receive Contributions to the Qualified Trust beginning on  !

or after the date first written above; and TO HAVE AND TO HOLD such assets; and TO INVEST AND REINVEST the assets of the Qualified Trust as provided herein; and TO PAY OR DISTRIBUTE from the Qualified Trust as ,

provided herein; IN TRUST NEVERTHELESS, for the uses and purposes and j upon the terms and conditions, as hereinaf ter set forth.-

l I. DEFINITIONS '

I 1.01 Definitions. As used in this Qualified Decommissioning Trust Agreement, the following terms shall i

have the following meanings:

(1) " Agreement" shall mean and include this Qualified Decommissioning Trust Agreemnt as the same may from time to time be amended, modified; or supplemented. ,

(2) " Authorized Representative" shall include any  ;

member of the finance committee of the board of directors. '

of the company or their designate.

L I

=_-.------m,. -.-.m.-e,,--m v.--,w.,,,,.e,- -,w. -

.-r,m.,,-m,-e- .. ~ c.mw,,--,. - , - - . , _ o m. -y ,,.g.%-, ..-y,:s ,,.e,..-%--w.,e

e (3) " Certificate" shall mean a document properly completed and executed by an individual (s) or corporation (s) duly authorized by an Authorized Represen-tative and substantially in the form of Exhibit A hereto.

(4) " Code" shall mean the Internal Revenue Code of.

1986, as the same may.be amended from time to time.

(5) " Common Facilities" shall mean those' facilities which will serve the operation of both generating units at the Perry Nuclear Power Plant to an equal degree but which currently serve only Unit one of the Perry Nuclear Power Plant. . .

i (6) " Company" shall mean Pennsylvania Power Company, or its successor.

(7) " Contribution" shall mean any contribution, cash or otherwise, made to the Qualified Trust.

(8) " Decommissioning Collections" shall mean all monies collected by the Company from its customers for Decommissioning costs associated with the Plant.

(9) " Decommissioning Costs" shall mean the expenses incurred in decommissioning the Plant.

(10) " Excess contribution" shall have the meaning set forth in Section 3.04 hereof.

1 1

l

\

l (11) "FERC" shall mean the Federal Energy Regulatory Commission created and existing pursuant to 42 U.S.C. Il 7134 and 7171..

(12) "FERC Subaccount" shall mean the portion of the Qualified Trust consisting of Decommissioning Collections  ;

from FERC customers plus earnings thereon. *

(13) " Investment Account" shall mean an account i established by the Trustee pursuant to Section 7.01 hereof '

which consists of those assets of the Qualified Trust designated for management by an Investment Manager.

(14) " Investment Manager (s)" shall mean the fiduci-ary specified in an Investment Manager Agreement (s),

including any employee of the Company or its affiliated companies.

(15) " Investment Manager Agreement (s)" shall mean an agreement (s) between the Company and an investment l manager (s) selected by the Company which agreement (s).

governs the management of an Investment Account (s).

(16) " order" shall mean any order relating to t

decommissioning the Plant issued by the PPUC or the FERC after the company, the PPUC Staff, the FERC Staff, the Trustee, and other interested parties he19 been given notice and an opportunity to be heard. '

l t

i

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

i e

! . I i

6- l i

(17) " Plant" shall mean the Company's ownership '

interart in the Perry Nuclear Power Plant, i.e., a 5.24 [

i percent undivided interest in Unit one and the Common .

Facilities associated therewith.

(18) "PPUC" shall mean the Pennsylvania Public f Utility Commission, as defined in 66 Pa. C.S.A. I 101, g  !

i l sea.

l (19) "PPUC Subaccount" shall mean the portion of the- [

Qualified Trust consisting of Decommissioning Collections f from PPUC ratepayers plus earnings thereon. j (20) " Qualified Trust" shall mean the trust fund {

established for the Plant pursuant to section 468A of the l

Code, and shall consist of Contributions by the Company for decommissioning the Plant plus earnings on such Contributions, which Contributions are specified in a >

Schedule of Ruling Amounts with respect to the Plant.

(21) " Schedule of Ruling Amounts" shall have the meaning set forth in Section 46SA(d) of the code. i (22) " Service" shall mean the Internal ~ Revenue Service.

(23) "Subaccounts" ahall mean the FERC Subaccount and the PPUC Subaccount collectively.

t

I o

I i I i

(24) "Succassor Trustee" shall mean any entity i appointed'as a successor to the Trustee pursuant to Section 6.01 hereof.  !

(25). " Trustee" shall mean First National Bank of  !

western Pennsylvania, or any Successor Trustee.

(26) " Unit One" shall mean the Unit One-generating .

unit at the Perry Nuclear Power Plant in which-the Company owns a 5.24 percent undivided interest. l f

' i II. QUALIFIED TRUST PURPOSES, NAME AND SUBACCOUNTS. I 2.01 Qualified Trust Purposes. The purposes,of this Qualified Trust are to hold funds for the contemplated l- ,

decommissioning of the Plant,'to constitute a qualified [

l nuclear decommissioning reserve fund for the Plant pur- l suant to section 468A of the Code, any applicable succes-ser provision and the- regulations thereunder, arJ to ,

comply with any order. . ,

2.02 Establishment of Qualified Trust. By execution of this Agreement, the Company

• r (a) irrevocably establishes the Qualified Trust -

I which shall be effective March 10, 1989, and which shall i consist of such Contributions as may be delivarad to the  :

Trustee by the Company for the Qualified Trust. The 1

i i

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

..__.m,_ _ _ . - . . . . _ . . _ , , _ _ . _ , . . , ,,.mm -

~

. -s-Qualified Trust also shall include-further Contributions, and earnings and appreciation thereont and (b) appoints First National Bank of Western Pennsylvania as Trustee of the Qualified Trust.

,- 2.03 Acceptance of Appointment. Upon the terms and conditions herein set forth, First National Bank of Western Pennsylvania accepts the appointment as Trustee of this Qualified Trust. The Trustee shall receive any contributions transferred to it by the company and shall hold, manage, invest and administer such Contributions, >

together with earnings and appreciation thereon.

2.04 Name of Qualified Trust. The Qualified Trust shall be named the " Pennsylvania Power Company Qualified Decommissioning Trust for Perry Nuclear Power Plant," or

~

suc' Variation thereof as the Company or the Trustee may adopt for reasons of business convenience.

2.05 Sacrocation of Qualified Trust. The Qualified Trust shall be segregated by the Trustee into a FERC Subaccount and a PPUC Subaccount. The Trustee shall account for each Subaccount separately from the.other Subaccount and shall maintain such records as are necessary to reflect the allocation of income and expenses to each Subaccount.

1 e

l 4

9 2.06 Designation of Subaccounts. Upon (i) the initial Contribution to the Qualified Trust as specified in section 3.01; (ii) any additional contribution to the Qualified Trust pursuant to section 3.02 ;- (iii) any adjustment to the Qualified Trust pursuant to section 3.04; or (iv) any withdrawal from the Qualified Trust pursuant to Article IV, the Company shall designate in writing the subaccount(s) which is to be credited or debited by such Contribution, addition, adjustment, or withdrawal, and the Trustee shall credit or debit the Subaccount(s) in accordance with such written designation.

2.07 Duties of Authorized Representatives. The-Company has empowered the Authorized: Representatives and their designates to act for the company in all respects hereunder. The Authorized Representatives may act as a group or may appoint one or more Authorized Representative (s) or designate (s) to perform the duties described in the foregoing sentence. The Company shall provide the Trustee with a written statement setting forth the names and specimen signatures of the Authorized Representatives. The Authorized Representatives shall provide the Trustee with a written statement setting forth the names and specimen signatures of'any designate of the Authorized Representatives and of any Authorized b

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

l4 .

1 Representative appointed to act on behalf of all Authorized Representatives.

2.08 Alterations and Amendments. 'The Trustee and 1

the company understand and agree that modifications or i

amendments may be required to thia Agreement from time to l .

time to effectuate _the purpose of this Qualified Trust and-

?

to comply with any order, any changes in tax laws, regula-I tions or rulings (whether published or private) of the service and any similar state taxing authority, and any 4 other changes in the laws applicable to the Company or the ,

Plant., The Trustee and the Company may alter or amend'

, this Agreement in writing to the extent necessary or ad-I l visable to effectuate such purposes or-to comply with such i Order or changes. The Trustee and the Company also may ,

alter or amend this Agreement in writing to encompass (i) l one or more nonqualified decommissioning reserve fund (s) '

for the Plant, or (ii) decommissioning collections with respect to other nuclear power plants owned now or in the +

future by the Company. Any alteration or amendment to this Agreement must be in writing and signed by the  !

Company and the Trustee. I 2.09 No Authority to Conduct Business. The purposes of this Qualified Trust are limited to the matters set forth in section 2.01 hereof, specifically, and there is t

' i i

I no objective to carry on any business unrelated to the  !

l Qualified Trust purposes set forth in Section 2.01. hereof, j or divide the gains therefrom. l 2.10 No Transferability of Qualified Trust. The interest of the company in the Qualified Trust is not transferable, whether voluntarily or involuntarily, by the I

company nor subject to the claims of creditors of the company.provided, however, that cny creditor of the  !

Company'as to which a certificate has been properly

{

completed and submitted to the Trustee may assert a claim directly against tne Qualified Trust in an amount not to-exceed the amount specified in such certificate.

i I <

l i III. CONTRIBUTIONS AND INCOME t 3.01 Initial Contribution. After the establishment of this Qualified Trust on the date first written above, the Company shall cause to be delivered to the Trustee an initial Contribution as specified in Exhibit B hereto.

3.02 Additional Contributions. From time to time

.after the initial contribution to the Qualified Trust and prior to the taraination of this Qualified Trust, the-Company may make, and the Trustee shall accept, additional Contributions to the Qualified Trust to satisfy the 1

1

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

i j purposes of this Qualified Trust as set forth in section  ;

1 i

I 2.01. )

3.03 Allocation of Income. The Trustee, upon 1

written notice from the Company, may pool?the assets of j the subaccounts for investment purposes and, upon so ,

doing, may treat each Subaccount as having received or accrued a pro rata portion (based on the fair market value of each subaccount) of Qualified Trust income in any '

accounting year.of the Qualified Trust. The Trustee shall maintain such records as are necessary to refleet the i

allocation of income between the Subaceounts in accordance l

! with this Section 3.03. The Trustee may rely upon the l written opinion of legal counsel of the Company with i respect to any question arising under this Section 3.03.

3.04 subsequent Adiustmente. The Trustee and the t company understand and agree that the Contributions made by the Company to the Qualified Trust from time to time may exceed the amount permitted to be paid into the Qualified Trust pursuant to section 468A of the Code and i

any regulations thereunder, based upon changes in '

estimates, subsequent developments or any other event or occurrence which could not reasonably have-been foreseen by the company at the time such contribution was made

(" Excess Contribution"). Upon receipt of a written O

s

, i i  !

i i I

l l statement of'the Company setting forth the amount of the  !

Excess Contribution and stating that such Excess contribution should be transferred or paid to any person ,

or entity, including but not limited to the company,' the i

Trustee shall transfer or pay such Excess Contribution, as the case may be, to the person or entity specified by the company in the written statement. 11: 311 cases, i distributions of any Excess Contributions shall not be ,

made unless, in the opinion of legal counsel to the company, such distribution will not lead to-disqualification of the Qualified Trust from the .

application of section 46sA of the Code and that such ,

distribution will not constitute a violation of any order. -i i

IV. DISTRIBUTIONS

?

4.01 Payment of Decommissioning Costs. Upon receipt of a certificate, the Trustee shall make payments of l Decommissioning costs to any person (including the  !

Company) for goods provided or labor or other services  ;

rendered in connection with the decommissioning of the Plant.

4.02 payment of Administrative costs. The Trustee shall make payments of al) reasonable administrative costs and incidental expensee of the Qualified Trust (including

}

I-w-, y w -- , - - - , , , -<nu ..,,-yuid",., .-. ,..,em,

_ __w#w,._.s,,__,,w-- m - - - , ., , . . ~ , . . . . - , . - . , _-c, , we. ...w,..w.. s =

_ - . - . _ - -~ .

.l

.14.-

l-

, t l.

taxes', reasonable out-of-pocket expenses'and Trustee's

,. fees) as specified in. Exhibit C, hereto.

Upon the receipt l:

of a Certificate, the Trustee'shall make payments of all  ;

f other reasonable administrative costs and' incidental-

~

expenses of the Qualified Trust which are not specified in ] .

Exhibit'C hereto. All such: administrative costs and f incidental' expenses-of the-Qualified Trust shall be charged proportionately between the Subaccounts-(based.on .

f the' fair market'value of each Subaccount)?unless otherwise  !

directed by the Company. .f

. 4.03- Fees . . The Trustee.shall receive as exclusive-compensation for:its services those fees specified in Exhibit C hereto-as may be amended from time to time in writing by the Trustee'and the! Company.

~

4.04 Liquidation of Investments. At the direction of the Company or any Investment Manager, the Trustee

~

shall sell or liquidate such investments of the Qualified Trust as may be directed or required in order to make any

l. - payment or distribution, and,shall-until disbursement,-

restore the proceeds to the Qualified Trust.-

7 1

V. TERMINATION 5.01 Termination'of Qualified' Trust in General.,-

This Qualified Trust shall teriminate upon the earlier of:

N **

(i) substantial; completion of the nuclear decommissioning-of the' Plant.(as defined in Treasury _ Regulations promulgated under code-section 468A); or (ii)Ltwenty-one (21) years'atter the death of the last survivor of the-officers of the company-and the company's affiliathd companies and such of their-descendants, born on or_ prior-i to January 1, 1989.  !

5.02 Termination of Qualified Trust Upon Disuuali- I fication. Notwithstanding the provisions 1of Section 5.01

{

hereof, the applicable portion of th'e Qualified Trtat shall terminate upon its disqualification from the I application of section 468A of the Code, whether. pursuant ,

to an administrative action on the part of the Service or the decision of any. court of competent jurisdiction, but in no event earlier than the date on which all available j appeals have been either prosecuted =or abandoned and the

. period of time for making any further' appeals has elapsed.

5.03 Termination of Qualified Trust on Sale of,

' Plant. Notwithstanding the provisions of.Section 5.01 hereof, and to the extent provided in Treasury Regulations promulgated under code section'468A, the applicable por- i tion of the Qualified Trust shall terminate upon the com-

,pany's sale-or other disposition of all or-a portion of  ;

its ownership interest in the Plant.

,' .3- y j t

t I

i 5.04 Distribution of-Qualified Trust Upon.

-Termination. Upon termination.ofithe' Qualified _ Trust, the

• I Trustee shall, in accordance with written instructions _

from the company _or_an Investment Manager,t11guidate1or- t A

l distribute (in kind) to-the_ Company the; assets of the i

l Qualified Trust (including accruedh accumulated and undistributed not income) ,- less ' final' or unpaid admin- t

'istrative costs'and incidental expenses (including ~ accrued l  : taxes). of1the Qualified Trust; provided,_however, that no such distribution shall be made unless either (a) an order by the appropriate regulatory authorities has been issued which specifically authorizes:such-distribution or (b) the Trustee has received an opinion of legal counsel to the company to the effect that no such order.is necessary'to i

authorize such-distribution. i b

VI. TRUSTEES-6.01 , Designation and Qualification of Successor

-Trustee (s). At any time during the term of this Qualifie'd i Trust, the Company.shall have the right to remove.the c

[- Trustee (at the Company's' sole discretion) acting hore-under and appoint another-qualified entity as a. Successor Trustee upon thirty (30) days' notice in writing to the r Trustee, or upon such shorter notice as may be. acceptable i:

i i

I

, ,, v

i.

-17 ' .,

I to'the' Trustee. In the event 'that t'4e ' Trustee or any successor Trustee shall: (a) becoralinsolvent or admit in writing its insolvency;-(b) be unable or' admit.in writing its inability to pay its debts as-such debts nature; (c)  !

make'a general assignment for the. benefit of creditors; Lj 1

(d)Lhave an involuntary pet.ition in bankruptcy filed i against.it; or'(e) commence a case under or otherwise seek to take advantage of any bankruptcy, reorganization, in-solvency, readjustment of debt,~ dissolution or liquidation f I

law, statute, or proceeding; or (f) resign, the Company shall appoint a successor Trustee as soon as practicable. ,

In the event of ar.-  % '. removal or resignation, the Trustee or Succer, e ' , -] tee shall have the right-to have its accounts settlet as-provided in Section 6.06-hereof.

1 Any successor Trustee shall qualify by a duly acknow-ledged acceptance of this-Qualified Trust, delivered to 1 1

the company. Upon acceptance of such appointment by the successor Trustee, the Trustee shall assign, transfer and-pay over to such Successor Trustee the assets then ,

constituting the Qualified Trust. Any successor Trustee a

shall have all the rights,. powers,_ duties and obligations  : i herein granted to the original Trustee.

l 1

1 1.

'.,i d-p . 4 v;

l J

6.02 Exoneration from Bond.- No bond or other  !

security shall-be-exacted or required of any1 Trustee or l

~

Successor Trustee appointed pursuant to this Agreement.

6.03 Resignation. The Trustee-or.any: Successor:

s Trustee herect may resign and be relieved'as Trustee-ato

~

any time without priorfapplicationLto or approval by_or ,

order of any court by'a duly acknowledged' instrument, l' which shall be delivered to the' Company by_the Trustee no

~

L less than sixty (60) days prior toLthe effective-date of the Trustee's resignation or upon such shorter notice as-1 may be acceptable to the company.: If for any reason the Company cannot or does not act'in the event of the resig-nation of the Trustee,_.the Trustee may apply;to a court-of competent jurisdiction for- the appointment 'of; a successor Trustee.

6.04 Transactions With Third Parties. No person or organization dealing with the Trustee hereunder shall be required to inquire into or to investigate its: authority

. for entering into any transaction or to see to the appli-L l cation of the proceeds of anyLeuch transaction.

6.05 Accounts and Reports. 'The Trustee shall keep accurate and detailed accounts ~of all investments, receipts and disbursements and other transactions here-under in accordance with specifications of'the company,

'- , o

-t and all accounts, books and records-relating thereto shall I

be open to inspection and audit at all reasonablettimes-by any person designated'by the Company. Within 30 days-i following-the close of each month,'the Trustee:shall' file i with the company a written report setting forth all' investments, receipts and disbursements and other transac- '

tions? effected;by it during the month and-containing an . i exact description of all' Contributions, purchases,. sales i or distributions andLthe cost or net proceeds of sale,.and showing all~ cash, securities and.other investments = held at ,

.the and of such month and the cost-and fair ~value of.each f

' item thereof as carried on the books,of the Trustie. -Such accounts and reports shall be based on-the cash method of.

reporting income and expenses and shall show.the-portion '

of the assets applicable to each Subaccount and shall-also, identify all' disbursements made to pay for expenses.or administration of the Qualified Trust.

Upon the expiration of two years fron'the date'of the filing of such written' reports with the Company,-the Trustee shall be forever released.and discharged from all-liability or accountability'to.anyone with respect to-all; acts and transactions..shown in such written-report, except

'such acts-or transactions as to which the company shall take exception by notice to the Trustee within such-two i

i 1

l l.

j year period; provided however, that nothing contained herein shall be deemed to relieve the. Trustee of any lia-bility which may be imposed pursuant to Section 6.07 here-o of. -In'the event that any exception taken by the company. .

cannot be~ amicably adjusted,nthe company may file.the i written. report in a court;havingrjurisdiction and upon tho'  ;

audit;thereof any andialltsuch exceptions which may not' ,  !.

have been~ amicably settled shall be' heard and-adjudicated..

l All records'and accounts maintained by.the Trustee- j with" respect to the Qualified? Trust shall be preserved.

until the later of: (i) seven years after the expiration of the taxable year to,which suchl records and accounts relate; or (ii) the expiration of'the statute of limitations, as extended from time to. time, with respect- .

to an audit by any Federal,' state,.or local. tax authority of any' tax return of the company or~tho' Qualified Trust based on such returns.and accounts. Upon the expiration of this period, the Trustee shall have the-right to destroy such< records-and accounts after:first notifying the company in writing of its intention and transferring to the company any records and accounts requested by the company.

6.06 Tax Returns and other Reports. The Trustee j shall prepare and timely file all Federal, state and local-

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

. s 1 L.. jl

- 21- ,

~

income or franchise tax returns or other reports (including estimated tax returns and'information returns)-

as may be. required from time to time with respect to the Qualified Trust,tand the: Company agrees:to provide the

}

ll Trustee in a~ timely manner with any information within'its -l possession,.-and to cause the Investment Manager (s)' to.

provide the Trustee with any information'inLits- ..

-possession, which is necessary to such filings ~. The .{

Trustee shall prepare and submit.to the company in a '

timely manner all information requested by the company.. ,

l regarding the Qualified Trust required to.be included in. .

=

i

! the Company's Federal, state and local' income! tax returns I

d or other reports (including estimated tax returnanand information returns). Subject to the limitations?

contained in Section 8.04 hereof, the Trustee may.' employ ~ 4 i

independent certified public accountants or'other' tax counsel to prepara or review such returns and reports. i The Trustee agrees to sign any tax. returns or other .

reports where required by law to do so or arising out of the Trustee's responsib'ilities hereunder,-and to-remit from the Qualified Trust appropriate payments or; deposits of-Federal, state-and local income, intangible,-or-

'F franchise taxes directly'to the taxing agencias or.auth .

orized depositaries in'a timely manner. Notwithstanding l l

'l l

,,,,--------.er

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

Section 6.07' hereof, any interest or penalty charges assessed against the Qualified: Trust pursuant to Chapters .

1

- 67 or 68' of the Code,: or pursuant. to any similar. state or local tax provisions, as a result of the Trustee's failure 1 to comply with this~Section 6.06 shall be borne by the i

Trustee and.not the Qualifie'd Trust or the; Company. !Not -

! withstanding the foregoing, J to the extent that any :.nter-l l est or penalty charges are assessed with respect-to tho' '

Trustee's untimely payment of any Federal,1 state, or local' staxes of'the Qualified. Trust, the Qualified Trust, and not ,

the Trustee,-shall' bear the cost of such interest or pen-1 l' alty charges to the extent of any earnings. realized'by,the i

Qualified Trust-on the amount of unpaid taxes.for.the.  !

period of time between the date on which such taxes. ware' F due and the.date on which the Trustee actually paid such-taxes. The Trustee agrees to notify the'CompanyJwithin ten (10) days after the Trustee receives-notice of'the'  ;

. assessment or proposed assessment of any interest.or pen- '

l alty charges: incurred or to be' incurred with. respect to. y

\  ;

4 the Qualified Trust. The Trustee agrees to notify the 1 Company in writing within' ten:(10)' days of its-receipt 2of a notice straudit of the Qualified Trust's Federal,, state, or local tax returns, and to participate with'the Company on behalf of the Qualified Trust in such audits and l

1

s. .,

p ,,

~23-~

\

l related: inquiries. 'The.Trustec further agrees to provide- .i the Company with anp additional infornationfin'its l possession regarding the Qualified Trust which may be requested by'the; Company to,be furnishedLin'an audit-ot l

the Company'sLFederal, state, or. local. tax returns.

6.07- Liability. The Trustee'shall not be liable -

for any acts,-omissions or defaults.ofiany' agent (other' .?

than its officers.and. employees)ror depositary appointed "5 or selected with1reasonablercarelin accordance with- '

)

Section~8.04 hereof. The Trustee 1shall be liable-only for

" i such-Trustee's own. acts or omissions,(and those of its' 'I

- officers and employees) occa$1oned by the willfulness or negligence of such Trustee 'orfthatEof its officers and ,  ;

employees).

Notwithstanding the foregoing, the. Trustee (andinot.

1 the Qualified Trust or the' Company)'shall be.liab?.e for-any tax imposed pursuant toisect' ion-4951 of the Code (or any applicable successor provision) as such section is

'i

. made applicable to the Qualified Trust or'the Trustee.

}

VII. INVESTMENTS 7.01 Appointment of Investment Manacer(s). The

- Company may appointoone or more Investment Managersito direct the investment oftall or'part,of the Qualified t

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

!2- '

~

u .

1 l

Trust. The Company shall also have"the right to remove any such Investment Manager (s). The appointment of an Investment Manager shall be made in'accordance with any  ;

procedures:specified by the Company.

Whenever such appointment'is made, the company shall' provide written notice of such appointment to the Trustee, shall specify- .

tho' portion of the-Qualified Trust with respect to which i

an Investment Manager has been' designated, and shall ,

instruct the Trustee to segregate into an. Investment Account those assets designated for management by the i Investment Manager. Except as otherwise'provided in.

Article IX hereof, to the extent that the assets-of an Investment Account are, invested by an investment Manager, the Trustee shall be released-and' relieved of all. ,

investment duties, responsibilities and! liabilities j customarily or statutorily incident to a. trustee with

• respect to the Investment Account, and as'to such

~

Investment Account,-the Trustee shall act as' custodian.

An Investment Manager shall certify in-writing to the-Trustee that it is registered under the. Investment Advisers-Act of 1910, shall accept:itsLappointment as Investment Manager, shall certify the identity of the person or. persons authorized.to give instructions or di-rections to the Truste.e on its behalf, including specimen l

l 1

6 ,

signatures,-and shall undertake to perform the duties

-imposed on it under an Investment Manager Agreement. The i Trustee may' continue to-rely upon all such'cartifications- -l unless otherwise notified _in writing lby the Company or an Investment Manager, as the case,mayfbe.

]

7.02 Direction by Investment Manager (s)', Jm Investment Manager designated by the-Companyfto manage an Investment Account shall hava authority to manage and to direct the acquisition and disposition of the assets of R the~ Qualified' Trust, or a portion _ thereof,s as the case may be, and the Trustee shall exercise the-powers set forth-in -

j Article IX hereof.only when, if, and in-the manner direct-ed by the Company in writing, and shall not be under any obligation-to invest or othcrwise manage any: assets in the i 1

Investment Account. An Investment. Manager =shall have the 3 power and authority, exercisable iniits sole $1scretionJat any time,.and from time to time, to. issue and place orders for the purchase or sale'of portfolio securities directly_  ;

o with qualified brokers or dealers. .The Trustee, upon '

proper notification from an Investment Manager,'shall settle the transaction in accordance-with:the appropriate- l trading authorizations. Written notification-of the=issu-

'E ance of each such authorization shall be given promptly to the Trustee by an Investment Manager, and such Investment

!}

m :: .

Manager shall cause the execution ofisuch order to be confirmed in writing to the Trustea,-andsto the company, c .by the broker or dealer.- Such notification shall be-

, proper authority for the= Trustee to pay for-portfolio securities purchased against receipt thereof and to .

~ deliver; portfolio securities sold-against payment there-  ;

.for, as the case may be. All directions to the Trustee byl an . Investment Manager shall be in: writing. and shall be signed by a person who has been certified by such Invest-ment' Manager pursuant to Section 7.01 hereof.as. authorized to give instructions or directions to'thA Trustee. '

should an Investment Manager'at'any time elect to  :

I place security. transactions directly with a broker or i dealer, the Trustee shall-not recognize such transaction unless and until'it has received instructions or.confirma '

tion of such fact from an Investment Manager. Should an' Investment Manager direct the Trustee-to utilize the services of'any person with regard to.the assets.under its management or-control, such instructions shall be.in writing and shall specifically set forth the actions to be f

taken by the Trustee as to such services. In.the event that an Investment Manager places security transactions )

directly or directs the utilization.of aRservice, such Investment Manager shall be solely responsible for the

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

d

4

.= .I 1

.-27 -

acts of.such persons. Except as otherwise.provided.in

' Article IX, the sole duty of the Trustee asito such transactions shall be incident to its duties as custodian.

VIII. , TRUSTEE'S GENERAL POWERS

~

. I The Trustee shall-have',.with respect;to the Qualified.

Trust, the following powersi all of which powers'are fidu-

'{

I ciary powers to be exercised'in a fiduciary-. capacity and in the best interests of this Qualified Trust and~the- -

purposes hereof, namely: I 8,.01 Extension'of oblications and Negotiation of.

Claims. To renew or extend the-time'of payment:of any .

i obligation, secured or unsecured, payable'to or;by this-i Qualified Trust, for as long a period or periods of time. 'I and on such terms as the Trustee shall> determine,;and to 1 l

adjust, settle, compromise,-and arbitrate l claims"or demands in favor of or against-this Qualified Trust,-

including claims for taxes, upon such terms; as the Trustee may deem advisable, subject to tha limitations contained I in Section 9.04 (regarding self-dealing).

8.02 Recistration of Securities. 'To hold any stocks, bonds, securities, and/or other property'in the l l name of a nominee, in a street name,.or by other titlea l l

i l

( -l 1

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

L*} [ '

l; i L E i

-i holding device, without indication of' trust,.and toiuse a

. clearing: corporation such as-Depository Trust Company.  :!

8.03 Borrowing. To borrow money in such amounts- ,

and upon such terms as the Company may authorize in-writing.'as necessary to carry out the purposeslof.this i Qualified Trust, and.to pledge any securities or other-i property:for the repayment of.any.such-loan'as the-Company l may direct.

1 6.04. Retention and Removal of Professional and j

~

-Employee Services. To employ attorneys,~ accountants, ,

custodians, engineers, contractors, clerks,Tand_ agents, as:

authorized in writing by the: Company,.to carry out the- .

I purposes of this-Qualified Trust.

8.05 Delegation of Ministerial Powers. To delegate to other persons: such ministerial powers and duties as the Trustee may; deem to be advisable.

8.06 Powers of Trustee to Continue Until Final 1 Distribution. To exercise any of such powers after the j date-on which the principal and income of the Qualified i Trust shall have become. distributable:and until such time s

, as the entire principal of, and income from, the Qualified l Trust shall have been actually distributed by the. Trustee.

It is intended that distribution of the-Qualified Trust will occur as soon as possible upon termination of the 1

4 a

I r~ .....e._ .,m._o,. . , , . . , _ - , _ . , - . , . . . , . , . _ . ,_ , . , . . . . _ . . . . . . . .4 ... . w . m .. . _ _ . - . .

3; ,

i i

i Qualified' Trust, subject, however, to the limitations contained in Article.V hereof.

Discretion in Exercise of' Powers.: To do any-8.07 andLall other acts which the Trustee shall deem proper to

effectuate the powers specifically conferred upon it by i this Agreement, provided, however, that the Trustee may not exercise its discretion to do'any act or participate

-in any transaction which would:

(1) Disqualify the Qualified Trust from the applica- t

tion of section 468A5(or any applicable L

successor provision) of the coder (2) contravene any provision of this Agreement; or (3) Violate-the terms and conditions of any instruc-  ;

l tions provided.in a certificate of the company.

I IX. TRUSTEE'S INVESTMENT POWERS The Trustee ~ recognizes the-authority of an Investment r Manager to manage, invest, and reinvest the assets in an Investment Account pursuant to an Investment Manager Agreement and as provided in Article VII of this l

l Agreement, and thel Trustee agrees to cooperate with any- _

Investment. Manager as deemed necessary-to accomplish these  !

tasks.- Notwithstanding-the foregoing, to the extent that d the assets of the Qualified Trust have not been allocated 4

e

~ *

[ -f t-i

.= -l a

to an1 Investment Account under.the investment control of l l

l an Investment--Manager, and to the. extent the assets of tho'

]

l-- ' Qualified Trust-have been allocated to an Investment L Account but have not been: invested by an Investment j

Manager, upon the: written; authorization:of.-the Company,.

~!

the Trustee shall'have'the following investment powers, all of which are fiduciary powersLto be executed in'a i;

fiduciary capacity and in.the best interest of this ,

Qualified Trust and the purposes hereof, namely:

9.01 Preservation of-Principal. To hold,. manage, and invest the assets of'this Qualified Trust in a manner *

=i designed to maximize and preserve the income and principal- '

of this Qualified Trust'for the purposes of th'is Qualified Trust including the duty to ensure thatuall suchcassets l

are invested:"at all' times, except as'otherwise providedLin Sections 4.04, 5.04 and 9.02.

9.02 Investment of' Qualified Trust ~- To invest and .

reinvest-all or'part of the Qualified Trust, including any undistributied income therefrom; provided, however, that no [

such. investment or reinvestment of the-Qualified Trust may ,

be made by the Trustee:=

(1) Unless such investment is permitted'to be made by Code = sections 501(c) (21) (B) (ii) and.

1 l!

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

'~

~31-i 4 68A(e) (4 ) (C) , the regulations thereunder, and-any applicable successor- provisi'ons1: or (2) In any-bank, savings-'and loan association, or ,

other financial' institution whose' deposits are i

not' insured by the Federal-Deposit Insurance t

Corporation,:the Federal' Savings;& Loan-Insurance Corporation, or other comparable .

Federal'or' state agency 1 or L

U '(3) Which would' contravene'any' instructions issued-l by the Company.

l In all cases,chowever, the total: investments by.the l ..

l- Trustee must be sufficiently liquid to enable the l

l ' Qualified Trust to fulfill.the purposes of the Qualified' '

1 ii Trust and to satisfy obligations.offthe Qualified Trust'as

such obligations become due.- Nothingcin this'Section 9.02 shall be construed as authorizing the Trusteelto carry on- -I any business or.to divide.the gains-therefrom.

9.03 Cash' Sweep Investments. To the extent-that '

L

the assets-of the Qualified Trust have not been invested' I- .. .

by an Investment. Manager on anysgiven day, to invest such uninvested-assets of the Qualified

Trust as'the Company-- l may direct in writing, subject to the limitations L

contained in Section 9.04 hereof (regarding self-dealing). 1 l

l i

l l t

e ,

1 1; f. , )

~

.{

-32~ -i 9.04- Management of Qualified' Trust..- To sell, exchange, partision,-or otherwise dispose of_allEor any part-of;the; Qualified Trust-at public or. private sale, without prior application to, Hor approval by,.or_ order of

'any court,'uponLeuch. terms and in such manner and at such prices asfthe_ Trustee shall determine; to modify, renew or. .

extend bonds,-notes or other obligations or_any install- j ment of principal thereof or'any interest due thereon and -

to waive any defaults in the performance of the-terms and conditions thereof; and to execute and deliver any and~all' bills of sale, assignments,. bonds-or other instruments in connection with these: powers,' all at such times,_ in su' hc -

manner and upon such terms and conditions as the Trustee- '

a may deem expedient to accomplish the purposes of this Qualified Trust as set forth in-Section 2.01. i Notwithstanding anything contained in this. Agreement to the contrary, the Trustee may not'authorizeLor.. carry out any sale, exchange-or other transaction which'would censtitute an act of "self-dealing" within the meaning of ,

section 4951 of the Code, as such section is made '

applicable to the Qualified Trust by section 46aA(e) (5) of i

the-code, any regulations thereunder, and any applicable successor provision.

1. ?. .

i t

X. MISCELIANEOUS ,

'10.01 Headings. - The section headings set-forth'in this Agreement and the TableLof Contents are inserted for j convenience of reference only and shall be diaregarded:in j i the construction or. interpretation of'any of'the prov'i -

- sions of this Agreement.

10.02- Particular-Words. - Any word contained in the text of this Agreement shall be' read as the singular'or.

t plural and as the masculine l. feminine, or neuter as may be applicable or permissible in theLparticular context. -Un-less otherwise specifically' stated, the word " person" shall be taken to mean,and include anfindividual, partner-ship, association, trust, company,.or corporation.

.10.03 severability of Provisions. If.any: provision f

of this Agreement or its application to any person or -

~ entity or in any. circumstances shall be' invalid-and unen- -

forceable, the application of such provision'to persons ,

and in circumstances other.than those as to which~it is invalid or unenforceable and the other provisions of this= ;t

)

Agreement, shall not be -:affected by such invalidity: or q unenforceability. .

10.04 Delivery of Notices-Under Agreement. Any- .

notice required by this Agreement to be'given to the Company or the Trustee shall be deemed to have been-t .

4 7

,-w_ -- - .--a- n-___ --,a_ , ,- --_n ,__-__w,-~ne. _an-w w--4 sw-e -,w-,,-ww - - - . e.--ee--.e - ,>--a.-,,..-,y--..we. ,.,n-e,-,,

'd

^

-e-4 .

.?

e properly given when mailed, postage prepaid, byfregistered l t

or: certified mail, to the person to.be notified.as set l

forth below:

If to the-Company by express mail:-

PENNSYLVANIA POWER COMPANY 1 East Washington Street

~New CP.stle,. Pennsylvania 16101 .

Attention: Treasurer-If to the company by regular mail:

PENNSYLVANIA POWER COMPANY >

P.O. Box 891 New Castle, Pennsylvania 16103-0891 Attention: Treasurer ,

1 If to the Trustee: '

FIRST NATIONAL BANK OF WESTERN PENNSYLVANIA l 101 East Wawhington Street i New Castle, Pennsylvanial :16101i

[ Attention: Trust Department' The Company or the Trusteeimay change the above f address by delivering notice thereoftin writing to the a

other party.

10.05 Successors and Assians. Subject to the pro- >

visions of Sections-2.10 and 6.01', this' Agreement shall be binding upon.and inure to the benefit of the Company,:the Trustee and their respective successors and' assigns.

10.06 Governing Jurisdiction. The Qualified Trust is a Pennsylvania irrevocable trust,and all questions l

4 m .-_-.. . _ _ _ _ __m

, _ . _ . _ -:..,__.__m . . . , . . _ . _ . . . . - - , . ~ , . . . . , - _ - - . ~ ~ . ~ ,

- - -. . --- .. . . -- . .~. -- .

A

. : 1

-1

)

l l

pertainina to its validity,' construction, and administra-tion shall be determined.in accordance with tho' laws of the Commonwealth of Pennsylvania-to:the extent not

[

l_

superseded by Federal. law.-

a 10.07 Accounting Year. 'Th's Qualified. Trust shall' l i

L operate on an accounting: year which coincides with the calendar year, January-1 through December 31~.

i 10.08 counterparts. This Agreement may be. executed i

-4 i

-in any' number of counterparts,:each-of which shall be an original, with the same effect as if.the signatures-there-I to and hereto were upon:the same-instrument.- ,3 4

l-i 4

4 1

-l 1

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

- 36-:

IN WITNESS WHEREOF,ithe. Company and the Trustee have caused this. Agreement to be executed b'y their

~

respective duly authorized officers as of-the day and yearf first above written.

PENNSYLVANIA POWER COMPANY

'~

- By hh

.p- ,

' E d' - . ,

I'- ]

-Robert P.-Wushinska  !

Vice President ard Treasurer Attest: M's .N- # w Ange:/$ne Compat6ne Assidtant Secretary i FIRST NATI z OFofESTERN' PENNSYLV IA/

/ ..

i By el . {1h [ -

Samuel h na4 Mas, Jr.:#

.Vice President l Attest n A .C Thomas S. Mansell-iv = - 4h Y Senior Vice-President'and!

Assistant Secretary

-i l

____,,--,--,,.,,,,,,,,,,e ,

v ,

, i l.. ,

p l- -3 7 '- t o

I

j. COMMONWEALTH OF. PENNSYLVANIA-)

i ). 'ss: .

l COUNTY OF LAWRENCE' 5)-

l i

I, Robert B. Seltzer ,.a' Notary Public in.and for-the aforepaid jurisdiction,.do hereby certify-that Robert l P.;Wushinske and Angeline Comparone,;who are [wrsonally- ,

known to me to be the persons who executad thn foregoing. j Qualified' Decommissioning Trust' Agreement.. personally

' appeared before me in the aforesaid jurisaiction, and as vice President and Treasurer and as Assistant Secretary of i Pennsylvania Power Company, and"by virtue of the. power and-authority vested in them, acknowledged the same to be.the (

act and deed'of Pennsylvania' Power Company, and they l executed.the same as such.

[

Given under my hand and seal this:-10th day of March, 1989.

-(NOTARIAL SEAL) -

[

Notary Public, Commonwealth.of

Pennsylvania

My commission expires March 12, 1992-NOTARIAL SEAL--

ROBE RT B, SELTZER, Notary Public -

New Castle. Lawrence Co., PA My Commmion Exnires March 12,1992 1

i

.i l

l-i

+

t ,a T .;,

, 'f . .

1 a

~,.

q

-3'8-r , .

COMMONWEALTH OF PENNSYLVANIA .)  ;

2

-) ss: l COUNTY OF IAWRENCE - .)

=I s

I,' c 'I. A MPIbd[ a Notary Public in and for

-the aforesaid jurisdiction,.1 do hereby certify that Samuel I. Haines,,Jr.-and Thomas S."Mansell,-'who are personally. -

known to me to~be the-persons who' executed;the foregoing Qualified Decommissioning l Trust Agreement, personally appeared before ne'in'ths aforesaid jurisdiction, and as!

Vice President and.as'Ser.ior-Vice-President..and Assistant =

. Secretary of First' National Bank of Western Pennsylvania, j and by virtue o! the power and authority vested in them, acknowledged-t N Same-to be the act and deed.of First ,

i < National-. Bank or tiestern Pennsylvania, and they executed  !

the same as<such.  !

Given under my hand and seal this M day of' j March,.1989- ~

i i (NOTARIAL SEAL) l -Notary Public, Cbanonwealth of Pennsylvania .. .

I:

My commission expires March 26. 1990 .

I'OTARIAL SEAL

, ;,:.; n r, cAWMLL, tet:ry Pub':9 4: .

s" ) ie;ap00 COUfib/I 'A

• M,, o.,$P.:N u;Expi:es Mer,20,19M ,

_ . - . . , , -.,.,,,-,.,e-m , , . . , , ~ , , , , - , , , , , . . , - . . . . . , - , ,, ,-

---*-------------------s n.,

a. .

.s 3

4 Exhibit ~A t I -

• l CERTIFICATE NO.

~

, t 1  !

The undersigned Authorized Representative of l

l' Pennsylvania Power Company (Company), a' Pennsylvania >

L  : corporation, being. duly authorized and empowered to-l.

s execute and deliver this Certificate, hereby. certifies to ,

the Trustee of the Pennsylvania Power. Company Qualified Decommissioning Trust.(Qualified Trust),' pursuant to- .

Article IV of.that certain Qualified Decommissioning Trust 1 Agreement, dated March 10, 1989.'(Agreement), between the Trustee and the Company as follows:. -

(1). Exhibit -;L hereto sets forth- the amounts either' i n v o i c e d t o ,: or incurredaby, or-to be incurred by the-Company-:or the. Qualified Trust,that are/will be due.and owing to:each payee listed (Payees) for:-

(a) goods or; services-provided.in connection l

, with decommissioning the-Plant;-or i '

j (b). administrative. costs;of~the Qualified Trust .

(excluding costs arising from the Company's furnishing of~ goods, services, or facilities to the Qualified Trust:and. excluding compen-sation which is excessive or unnecessary:to

. carry out the purposes el the' Qualified. '

Trust) as evidenced by thetinvoice, contracts or agreements attached hereto; (2) all such amounts constitute-Decommissioning- l Costs or reasonable: administrative' costs and 1

incidental' expenses'as described-in Sections 1 4.01 and:4.02 of4 the Agreement; (3) all such amounts may,be paid from the Qualified Trust without causing it to become disqualified

-f.

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

, . 1 l

.W l L

I J

l

-fron'the application.of code section 468A,or:any H applicable-successor'provisiont and ,[

, '(4)- .ill; conditions'procedent_to theLaaking'of this:

.. withdrawal"and disbursement set,forth in any agreement between'such Payees and the Company, if applicable ~, have been fulfilled or will be.

fulfilled by,the payment date specified in.

Exhibit:1.:

t Accordingly, directionJis hereby-given that the

_l Trustee

• provide!forithe withdrawal'of $ from the

-(FERC Subaccount/PPUC Subaccount of the Qualified Trust) l (Subaccount(s) of the Qualified Trust specified in Exhibit i 1]Lin order to permit payment of such sum to be-made to the-Payees. You are further directed to!-disburse such sum, once withdrawn, d1Tectly to such-PaVees.in the

~

following manner: (DESCRIBE: ; CHECK, WIRE TRANSFER, ETC.T j en or befora the-date(s)_ specified in' Exhibit'1, without. .

i any duty to see to the application thereof by said Payees.- t WITNESS my hand-this day _of j

,. 19 _ ..

PENNSYLVANIA < POWER ~ COMPANY l By.

Authorized Representative 4

9 a

o

, l i

A

I

'H,

'*. Exhibit B .j SCHEDULE OF INITIAL CONTRIBUTION TO 1

PENNSYLVANIA POWER. COMPANY ~ .;

.. QUALIFIED DECOMMISSIONING: TRUST FOR PERRY. NUCLEAR POWER PLANT on March 13,"198 ,. Pennsylvania Power Company 1

.. r n (Company) shall cause to-be' delivered to Firstl National [

n o Bank of Western Pennsylvania (Truste'e), pursuant to the j Pennsylvania-Power Company Qualified Decommissioning Trust-

~

U i

Agreement dated March- 10,- 1989, the sum of $17,962.03 tur

deposit in said-Qualified Trust. ByLits= signature.below,.

the Trustee hereby! acknowledges receipt'of the' initial ~ c I

contribution to the Qualified Trust.

4 FIRST NATIONAL' BANK OF

. WEST 6 PENNSYLVANIA

\

L  : .

.\ . -i r

.& _l I By: - Q--

_ /; .

Dated:- March 13,* l'989 i

4 e

7 o

e f '

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

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

s Exhibit C FEE SCHEDULE AND SCHEDULE OF ADMINISTRATIVE COSTS Annual fees / costs to be charged to account as follows:

1. Base fee of $375 per subaccount,

• per year.

2. Annual percentage fee according to schsdule below.

RATE OF ANNUAL FEE ANNUAL FEE ON AMOUNT IN TRUST

.003 on 1st $1,000,000 $3,000 on $1,000,000

.002 on next 2,000,000 - 7,000 on 3,000,000

.0015 on next 2,000,000 10,000 on 5,000,000

.001 on next 5,000,000 15,000 on 10,000,000

.00075'on next 5,000,000 18,750 on- 15,000,000

.0005 on next 5,000,000 21,250 on 20,000,000

.00028 cn excess 22,500 on 25,000,000

3. Tax preparation fee of $250 for U.S. and PA returns.

4. All taxes payable regarding the account.

• The taking of the tax base fee will be postponed for.the years ending 3-31-90, 3-31-91, 3-31-92 and will be added to the base fee j taken for'che years ending 3-31-93, 3-31-94 and 3-31-95.

~

-s i

o I l st Washinpron Street

~*.*. P.O flos 891 PENN POWER *

.. Nea casue rn >orv3 cent er . r . .,u, sta, n

4f 2 052 5'3i threct Dent 412 CSC 5430 Pbrer:sylvania Power Cornpany noonert P wustwsse v.c. eres.oeni no r,.. s,,'

March 10, 1989 First National Bank of Western Pennsylvania '

101 East Washington Street New Castle, PA 16101 Attention: Trust Department Gentlemen:

We hereby authorize First National Bank of Western Pennsylvania {

to invest the assets of the qualified fund in accordance with Article IX of the Qualified Decommissioning Trust Agreement for Perry Nuclear Power Plant dated March 10, 1989.

Very truly yours,

'7 Qjsp .u.,

dsm

}

l I

s-i I

RRST NATIONAL BANK / OF WESTERN PENNSYLVANIA j 101 L A$T WASHINGTON $7REET

• P.O. BOX 1488

• NEW CASTLE. PA 1610314eB

• TELEPHONE: (412) 652 5511 l

l l

I i

i l

l FIRST NATIONAL BANK OF WESTERN PA TRUST DEPARTMENT INVESTMENT PLAN FOR THE PENNSYLVANIA POWER COMPANY DECOMMISSIONING TRUST OF 1989 i

f e i MAF, b " t I

l I

a 4

PENNSYLVANIA POWER PERRY DECOMMISSIONING TRUST FIRST NATIONAL BANK INVESTMENT STRATEGY Our plan is to use the circumstances and nature of this decommissioning trust to achieve an investment return exceeding 7.5%

over the life of this trust. We will work to maximize the trust's terminal value which will result from monthly company contributions to the trust and investment returns thereon. Currently, in qualified trusts, investments are-limited to certain fixed income investments.

(Non-qualified trusts may invest in equity securities as well.)

There is now a reasonable possibility that the investmer.t limitations on qualified trusts vill be broadened to include equities.

Given our investment return goals, we pro %ose the following investment plan. Initially, the qualified t.;ust will be funded with approximately $18,000 with monthly contributions to follow until termination in the year 2026. Our plan is to invest the available funds in long term coupon and zero coupon municipal' bonds. Over time, the monthly contributions will be used to continue acquiring similar securities plus taxable coupon securities as appropriate given then existing after-tax yield relationships.

The emphasis will be on terminal value and not shorter term relative performance comparisons. Any yield enhancement techniques that could be employed will be limited'by our emphasis on terminal value as well as the overall size of the trust's assets. We believe this is appropriate given:the time horizon of 37 years to termination. Should'

4 any assets somehow accumulate in a non-qualified trust, we will invert them in equity securities. Should the investment limitations on qualified trusts be broadened, we will recommend inclusion of equity securities in that portfolio. Obvious)y, such a recommendation should at that time be discussed with company representatives and its 1

counsel. ,

r As may be concluded from the foregoing, our plan is to employ a cost averaging technique relying on monthly contributions and trust earnings to accumulate assets in essentially three types of assets; tax exempt fixed income, taxable income when appropriate and, if eventually permitted, equity assets. 'At least initially, and probably as long as the current interest rate environment prevails, we will emphasize long term municipal bond issues within a cost averaging approach technique. Should after-tax yields from taxable securities rise above municipal bond yields, emphasis would then shift to that area. Our plan is to seek and secure best value (return) over time and is not oriented to short term market timing or. aggressive swapping, the risks from which, we believe, are inappropriate to the purposes of this trust.

Trustee's fees will be funded from monthly contributions and/or trust earnings as appropriate.

6

)

i

EXHIBIT B o

e OHIO EDISON COMPANY MASTER DECOMMISSIONING TRUST AGREEMENT FOR PERRY NUCLEAR POWER PLANT UNIT ONE, PERRY NUCLEAR POWER PLANT UNIT TWO, BEAVER VALLEY POWER '

STATION UNIT ONE AND BEAVER VALLEY POWER STATION UNIT TWO Dated: June 1, 1988

. .s TABLE OF CONTENTS ELSE ARTICLE I.- DEFINITIONS.

1.01 Definitions ............................... 3 ARTICLE II. MASTER TRUST PURPOSES, NAME AND TUNDS.

2.01 Master' Trust Purpose ...................... 11 2.02 Establishment of Master Trust ............. 11 2.03 Acceptance of Appointment ................. 12 2.04 Name of Master Trust .................. ... 12 2.05 Division of Master Trust .................. 12 2.06 Designation of Funds ...................... 13 2.07 Duties of Authorized Representatives ...... 13

2. Pi No Authority to Conduct Business .......... 14 2.09 No Transferability of Master Trust ......., 14 ARTICLE III. BENEFICIARIES OF MASTER TRUST.

3,01 Company and Others to be Beneficiaries .... 15 ARTICLE IV. CONTRIBUTIONS AND INCOME.

4.01 Contributions ............................. 15 4.02 4.03 Allocation of Net Income ................... 16 Subsequent Adjustments .................... 17 ARTICLE V. DISTTABUTIONS.

5.01 Payment of Decommissioning Costs and Administrative Costs ..................... 17 5.02 Payment of Administrative Expeases ......... 19 5.03 Fees ....................................... 20.

5.04 Liquidation of Investments ................ 20 ARTICLE VI. TERMINATION.

6.01 Termination of Funds and Master Trust in General.................................... 21 6.02 Distribution of Master Trust and Funds Upon Termination ............................. 22 l

-i-l

~

s

.i l

l i

1 Pace f

ARTICLE VII. TRUSTEES. i 7.01 Designation and Qualification of Successor i Trustee (s) ............................... 22 .!

7.02 Exoneration from Bond ..................... 24 7.03 Resignation . ............................. 24 i 7.04 Transactions With Third Parties ........... 24 l' 7.05 Accounts and Reports ....................... 25 Tax Returns and Other Reports ............. f 7.06 26 L

7.07 Liability ................................. 28 ARTICLE VIII. INVESTMENTS.

8.01 Acpointment of Investment Manager (s) . . . . . . 30 .

8.02 Direction by Investment Manager (s) . . . . . . . . - -

31 ARTICLE IX. TRUSTEE'S GENERAL POWERS.

9.01 Registration of Securities ................ 34 9.02 Borrowing .................................. 34 9.03 Retention and Removal of Professional and Employee Services .................... 34 9.04 Delegation of Ministerial Powers .......... 35 .

9.05 Powers of Trustee to Continue

• Until Final Distribution ................. 35  :

9.06 Discretion in Exercise of Powers .......... 35 9.07 Deposition of Funds ....................... 36 i 9.08 Market Inventory Funds .................... 36 9.09 Loaning of Securities ..................... 36 9.10 Retention of Uninvested Cash .............. 37 ARTICLE X. TRUSTEE'S INVESTMENT POWERS.

l 10.01 General Investment Powers ................. 37 5 l

l ARTICLE XI. MISCELLANEOUS.

1 i 41.01 Headings .................................. 38 11.02 Particular Words .......................... 38 11.03 Severability of Provisions ................ 38  !

11.04 Delivery of Notices Under Agreement . .. . . . . . 39 11.05 Alterations and Amendments ................ 39 11.06 Successors and Assigns .................... 41-11.07 Governing Law; Jurisdiction; Certain-Waivers................................... 41 _

3 4

9 . - - - - , .w. ..y. ,-&. - , , , - , - -

- ~

. .o.

Page 11.08 Accounting Year ........................... 41- ,

11.09 Counterparts .............................. 41 11.10 Decommissioning Liability ................. 41 l SCHEDULE A. PERMITTED INVESTMENTS }

SCHEDULE B. OWNER TRUSTEE AND OWNER PARTICIPANTS EXHIBIT A. CERTIFICATE ,

i EXHIBIT B. FORM OF SUPPLEMENT TO MASTER LECOMMISSIONING TRUST AGREEMENT 1

i 1

- l t

c k

l l

I t

,h r

-iii-k e . --. ,

i i

i MASTER DECOMMISSIONING TRUST AGREEMENT '

f AGREEMENT made as of this 1st day of June, 1988, f between OHIO EDISON COMPANY, an Ohio corporation (the

" Company"), and NATIONAL CITY BANK, Akron, as Trustee (the -

" Trustee"), a nationa'l banking association duly organized and  ;

validly existing under.the laws of the United States of America.

l WHEREAS, the Company has ownership interests as a i tenant in common of undivided interests.in Perry No. 1, Perry.  !

No. 2, Seaver Valley No. 1 and Beaver Valley No. 2, as well as leasehold interests in additional undivided interests in Perry No. 1 and Beaver Valley No. 2; and i WHEREAS, Perry No. 1, Perry No. 2, Beaver. Valley No. 4 1 and Beaver Valley No. 2 are, or are designed to be, nuclear fueled electric generating units which will require Decommissioning at the end of their useful life; and WHEREAS, pursuant to the requirements of the >

Sale / Leaseback Transactions, the Company is required to' i  ;

l establish trust funds to provide for payment of  ;

Decommissioning Costs associated with its ownership and leasehold interests in Perry No. I and. Beaver Valley No. 2, [

l i

r , ..- , y -., ,-

. y _ , _ _ . , - . , . . . - - . ._..% w

and, pursuant to the requirements of The Public Utilities Commission of Ohio ("PUCO") and the Nuclear Regulatory Commission ("NRC"), is generally-required to create an external source of funding to provide for the costs associated with the Decommissioning of its-proportionate share of nuclear fueled electric generating units in which'it has an interest; and WHEREAS, pursuant to Section 468A of the Internal Revenue Code of 1986, as amended, certain federal income tax benefits are available to the Company as a result of creating.

and making contributions to certain nuclear decommissioning reserve funds; and WHEREAS, the Company, in order to comply with the requirements of the Sale / Leaseback Traasactions and the requirements of the PUCO and NRC, and in order to be in a position to take advantage of the federal income tax benefits available under the aforementioned Section 468A, wishes to establish both Qualified Funds and Nonqualified Funds to hold amounts in trust for the future Decommissioning of each of '

the Units; and WHEREAS, the Company wishes to establish a Master Trust for the retention and investment of the assets of the Qualified Funds and Nonqualified Funds for the Units, wherein

, e  :

h

. .~, ~3~ N L  !

each of the Funds shall constitute a separate trust under the Master Trust; and WHEREAS, National City Bank, Akron is willing to serve as Trustee under.the Master Trust on the terms and 1 conditions.herein set fcrth.

NOW, THEREFORE, in consideration of the mutual t i

1 '

promises herein contained.and other good and valuable consideration, receipt atd 4 sufficiency of which is hereby acknowledged, the Trustee hereby agrees to accept, from and i

i after the date first above written, Contributions .o the Master Trust delivered to it from time to time by or on L behalf of the Company; TO HAVE.AND TO HOLD such assets; and '

l l

TO INVEST AND REINVEST the same as provided herein; l

IN TRUST NEVERTHELESS, for the uses and purposes and l l upon the terms and conditions, as hereinafter set forth; and TO PAY OR DISTRIBUTE from the Master Trust as provided herein.

I. DEFINITIONS 1.01. Definitions. As used in this Maste.-

L Decommissioning Trust Agreement,_the following terms shall 1

L have tho'following meanings:

f s

i 4-4 t

(1) "

Agreement" shall^mean this Master  ;

Decommissioning Trust Agreement as the same may be amended, l modified, or supplemented from time to time.

(2) "

Applicable Law" shall mean all applicable  ;

l laws, statutes, treaties, rules, codes, ordinances, regulations, certificates, orders, interpretations, licenses

, and permits of any Governmental Authority and judgments, i decrees, injunctions, writs, orders or like action of any court, arbitrator or other judicial or quasi-judi:ial tribunal of compentent jurisdiction (including those pertaining to health, safety, the environment or otherwise).

(3) "

Applicable Tax Law" shall mean Section 468A of the Code (or comparable subsequent provision of the Code) and ,

the regulations thereunder, and any other provision of the 4

Code relating to the Federal taxation of the Funds or credits or deductions based on Contributions. _

t (4) Authorized Representative" shall mean the persons designated as such pursuant to Section 2,07 hereof, except that after a Defavlt (as that term is used in the form of Supplement attached hereto as Exhibit D) any Designated i Beneficiary shall be deemed to be an Authorized Representative for purposes of completing, executing and  !

i delivering a certificate to the Trustee relating to a particular Unit but only with raspect to the Unit and the

- y pw y+, p. -- t----

i a .. undivided interest therein specified in the Supplement pursuant to which such Designated Beneficiary is designated as such.

(5) " Beaver Valley No. 1" shall mean the nuclear generating unit located at the Beaver Valley Power Station and known as Unit 1, together with its associated facilities and equipment.

(6) " Beaver Valley No. 2" shall mean the nuclear generating unit located at the Beav6r Valley Power Station and known as Unit 2, together with its associated facilities and equipment.

(7) " Beaver Valley Power Station" shall mean the electric generating station located on the south bank of the Ohio River in Beaver County, Pennsylvania, approximately 25 miles northwest of Pittsburgh.

(8) " Business Day" shall mean a day that is not a Saturday or Sunday or a legal holiday in the State of Ohio.

(9) " Certificate" shall mean a document properly completed and executed by an Authorized Representative of the i

company and substantially in-the form of Exhibit A hereto as j it may from time to time be amended.

(10) " Code" shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time.

(11) " Company" shall have the meaning set forth in the opening paragraph of this Agreement.

l 1

\l? *

.s_

(12) " Contribution" shall mean any contribution, ,

cash or otherwise, made to the Trustee for deposit in one or more of the Funds and in such subaccounts thereunder as provided in this Agreement. No contribution which consists of real property shall be permitted.

(13) " Decommissioning" shall mean the removal (as a facility) of a nuclear generating unit safely from service and the reduction of residual radioactivity at the site of such unit to a level that permits the release of the property for unrestricted use and termination of the NRC license relating to the unit. This process shall include, but not be limited to (a) the removal of both radioactively contaminated and radioactively uncontaminated portions of the unit, and disposing of the same in accordance with Applicable Law at the end of the useful life of such unit or if there are no Applicable Law at that time, in accordance with the operating agreement with respect to such unit (b) work done to the site of the unit and its associated equipment and. facilities and i to adjacent areas, whether or not such areas are contiguous to such site, in order to decontaminate such site and such areas and (c) work done by or on behalf of the Company (or for which the Company is charged) to the site where any portion of the unit and its associated equipment and facilities are to be disposed of in e: der to prepare and- l maintain such site as a disposal site.

i j

, ,. (14) " Decommissioning Costs" shall mean all costs and expenses relating or allocable to, or incurred in connection with the removal of the equipment, structures and portions of a nuclear generating unit and its site containing radioactive. contaminants or the decontamination of the same to a level that permits the property to be released for unrestrictive use shortly after cessation of the operation of the unit, plus, in the case of decontamination, the cost of removal of such equipment structures and portions; provided, however, that if Applicable Law prohibits the foregoing or imposes requirements that are more costly to implement than the removal or decontamination referred to above in this definition, the term " Decommissioning Costs" shall mean all costs and expenses relating or allocable to, or incurred in connection with, the most costly requirements imposed by Applicable Law with respect to radioactive contaminants after a nuclear generating unit ceases operation.

(15) " Designated Beneficiary" shall mean a party designated as such in a Supplement.

-(16) " Funds" shall mean the Qualified Funds and the Nonqualified Funds, collectively.

(17) " Governmental Authority" shall mean any Federal, state, county, municipal, foreign, international, regional or other governmental authority, agency, board,

_8_

body, instrumentality or court, including, without  :

limitation, the NRC and the PUCO.

1 (18) " Investment Account" shall mean an accoun ,

established by the Trustee pursuant to Section 8.01 hereof. I which consists of those assets in each Fund under the Master Trust designated by the' Company for. management by an Investment Manager.

(19) " Investment Manager (s)" shall mean the j l

person (s) appointed by the Company pursuant to section 8.01 i hereef, including any employees of the Company or its ,

i affiliated companies.

(20) " Investment Manager Agreement (s)" shall mean an agreement (s) between the Compant and an Investment  ;

Manager (s) appointed by the Compary which agreement governs the management of all or a portion of the Funds.

(2L) " March 1987 Sale / Leaseback Transaction" shall mean the transactions consummated in March 1987 in which the Company sold and leased back a portion of its undivided ,

ownership interest in Perry No. 1.

(22) "Nonqualified Funds" shall mean,. collectively-the Funds not constituting Qualified Funds established under, and in accordance with, Section 2.02(b) or Section 2.05 of l

the Master Trust with respect to any of the Units. Each Nonqualified Fund shall have such subaccounts at the Company may specify.

t

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

" ~

(23) "NRC" shall have the meaning ascribed thereto in the third WHERIAS clause of this Agreement or any successor agency.

(24) " Order" shall mean any order relating to Decommissioning. issued by a Governmental Authority and applicable to one or more of the Units'.

(25) " Perry No. 1" shall mean the nuclear generating unit located at the Perry Nuclear Power Plant and  ;

known as Unit 1, together with its associated facilities and l, equipment.

(26) " Perry No. 2" shall mean the nuclear generating unit located at the Perry Nuclear Power Plant and known as Unit 2, together with its associated facilities and equipment, at such time as such unit is completed and is placed in service.

(27) " Perry Nuclear Power Plant" shall mean the i l

L electric generating station located on the shoretof Lake Erie l

in Lake County, Ohio, approximately 3.', miles northeast of Cleveland.

(28) "PUCO" shall have the meaning ascribed thereto in the third WHEREAS clause-of this Agreement but shall also include any successor agency, (29) " Qualified Funds" shall'mean, collectively, the accounts established under, and in accordance with, v n , , - ,

c.. , . - -

e ..,e - ,-v-r -r

1

, ,, -A0-Section 2.02(b) of the Master Trust for purposes of Section 468A of the Code which are designated as such in the records of the Trustee. Each Qualified Fund shall have such subaccounts as the Company may specify. Contributions, it.

any, made with respect to each such Fund in any year shall-not excsed the amount permitted to be made to such Fund with, respect to the year in question in order for the Company to be allowed to take the deduction afforded-by Section 468A of the Code.

(30) " Required Payments" shall mean the payments described in Section 10(b)(3)(viii)(D) of each participation agreement entered into by the Company in connection with the Sale / Leaseback Transactions that are to be paid into the Funds.

(31) " Sale / Leaseback Transactions" shall mean the March 1987 Sale / Leaseback Transaction and the September 1987 Sale / Lease Transaction, collectively.

(32) " September 1987 Sale / Leaseback Transaction" shall mean the transactions consummated in September 1987 in which the Company sold and leased back a portion of its undivided ownership interest in Beaver Valley No. 2.

(33) " Service" shall mean the Internal Revenue P

Service.

, l m

. ,. -AA-(34) " Supplement" shall mean a Supplement substantially in the form of Exhibit B hereto as it may from time to time be amended.

(35) " Trustee" shall have the meaning ascribed thereto in the opening paragraph of this Agreement.or any successor appointed pursuant to Section 7.01 hereof. j (36) " Undivided Interest" with respect to any q Designated Beneficiary shall have the meaning specified in ,

the Supplement designating such Designated Beneficiary.

(37) " Units" shall mean Beaver Valley No. 1, Beaver a

Valley No. 2, Perry No. I and Perry No. 2, collectively.  ;

II. MASTER TRUST PURPOSE, NAME AND FUNDS 2.01 Master Trust Purpose. The exclusive purpose l of this Master Trust is to accumulate and hold funds for the contemplated Decommissioning of the Units and to expend funds j-for that purpose.

2.02 Est ablishment of Master Trust. By execution of this Agreement, the Company:

(a) establishes the Master Trust for the j retention and investment of the' assets of the Funds, which Shall be effective on the date first above written;-

(b) establishes a Qualified Fund and a Nonqualified Fund for.each Unit; and (c) appoints National City Bank, Akron as Trustee of the Master Trust.

l f f

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

. .. l l

2.03 Acceptance of Appointment. Upon the terms and conditions herein set forth, National City Bank, Akron .!

accepts the appointment as Trustee of this Master Trust. The Trustee declares that it will hold all estate, right, title and interest it may acquire hereunder exclusively for the. )

J purposes set forth in this Article II. The Trustee shall )

i receive any Contributions deposited with it by the Company in trust for the benefit of the company (subject to the rights

?

of other parties as contemplated by Section 3.01 hereof) and  ;

shall deposit such Contributions in one or more of the Funds, and in such subaccounts thereunder, as provided in Section 2.05 hereof and otherwise as'the Company shall specify. The Trustee shall hold, manage, invest and administer such Contributions, together with earnings and appreciation ,

thereon, in accordance with this Agreement.

2.04 Name of Master Trust. The Contributions received by the Trustee from the Company together with.the proceeds, reinvestments and appreciation thereof shall constitute the " Ohio Edison Company Mester Decommissioning ,

Trust."

2.05 Division of Master Trust. The Master Trust shall be divided by the Trustee into a Qualified Fund and a Nonqualified Fund for each of the Units and into such other Nonqualified Funds as the Company from time to time shall I

'i

.. - ~ - ..

establish. Each Fund shall constitute a separate trust under the Master Trust and shall be designated as relating to a particular Unit. Each Fund shall have a subaccount relating to each Designated Beneficiary, clearly identified as such, and such other subaccounts as the Company from time to time shall specify.

The Trustee shall maintain such records as are necessary to reflect each Fund and each subtecount thereunder separately on its books from each other Fund and subaccount.

2.06 Designation of Funds. Upon (i) any ,

Contribution to the Master Trust; or (ii) any withdrawal'from the Master Trust; or (iii) any transfer between the Funds, the Company shall designate (in writing), in accordance with Articles IV or V, as applicable, the Fund (s),'and the subaccount(s) thereunder, which is to be credited or debited l

for the amount of such Contribution, withdrawal or transfer, i

and the Trustee shall credit or debit the Fund (s), and the I subaccount(s) thereunder, in accordance with such designation. '

2.07 Duties of Authorized Recrosentatives. The Company has empowered the Authorized Representatives and their delegates to act for the Company in all respects hereunder. The Authorized Representatives may act'as a group or may designate one or more Authorized Representative (s) or delegate (s) to perform the duties described in the foregoing I l

. .. sentence. The Company shall provide the Trustee with a written statement setting forth the names and specimen signatures of the Authorized Representatives. The Authorized Representatives shall provide the Trustee with a written statement setting forth the names and specimen signatures of any delegate of the Authorized Representatives. Until otherwise notified in writing-by the Company, the Trustee may rely upon any written notice, instruction, direction, certificate or other communication-believed by it to be genuine and to be signed or certified by any one or more Authorized Representatives or their designated delegate (s),

and the Trustee shall be under no duty to make any investigation or inquiry as to the truth or accuracy of any statement contained therein.

2.08 No Authority to Conduct Business. .The purpose of this Master Trust is limited specifically to the matters set forth in Section 2.01 hereof, and there is no objective I to carry on any business unrelated to the Master Trust-1 purpose set forth in Section 2.01 hereof, or divide the gains therefrom.

2.09 No Transferability of Master Trust. Except as  ;

expressly provided in Article III hereof, the interest-of the  !

Company in the Master Trust is neither transferable, whether voluntarily or involuntarily, by the Company nor subject to

'1

, .. l 1

the payment of the claims of creditors of the Company:  ;

provided, however, that any creditor of the Company as to f which a Certificate has been properly completed and submitted i to the Trustee may assert a claim directly against the Master Trust in an amount not to exceed the amount specified in such Certificate. ,

III. BENEFICIARIES OF MASTER TRUST f 3.01 Company and Others to be Beneficiaries. The beneficial ownership of the Funds shall, subject to the  ;

purpose of the Master Trust, be at all times in the Company, y but the Company shall, pursuant to the Sale / Leaseback Transactions, and may otherwise, subject its rights hereunder I to the rights of other parties pursuant to one or more i l

Supplements.

l IV. CONTRIBUTIONS AND INCOME .

4.01 Contributions. On or before March 16, 1992, with respect to Perry No. 1, and on or before September 29',

1992, with respect to Beaver Valley No. 2, and annually on or before the anniversary of such_ dates, respectively, the company shall make a contribution-equal to the respective l Required Payments then due, which Contribution shall be  ;

1 l allocated to each Designated Beneficiary's subaccounts in tho' j Funds relating to the Unit in question as the Company shall J

[

specify (so long as the Required payment with_ respect to each 1

Designated Beneficiary shall be allocated or the basis of j such Designated Beneficiary's Undivided Interest), and the .

)

remaining amount shall be allocated to the subaccount for the  !

Company's remaining interest. The Company may also make such other Contributions to any Fund from time to time as it shall l

deem necessary or appropriate. The Trustee shall have the

]

ability to return Contributions to the Company if such 1 l

Contributions are excessive in light of Applicable Law, Applicable Tax Law and the requirements of the Sale / Leaseback Transactions. j 4.02 Allocation of Not Income. So long as no Default (as such term is defined in any Supplement) has 1 J

occurred and is continuing, the Trustee may pool the assets of the Funds or of any subaccounts thereunder for investment  ;

purposes in accordance with the written instructions of the Company and subject to the limitations on investments

]

l contained in Schedule A hereto, and, upon so doing, shall j i

treat each Fund or subaccount so pooled as having received or accrued a pro rata portion (based on the principal-balances of the Funds or subaccounts so pooled) of the not income of 5 the Master Trust (including appreciation) related to such l

pooled assets in any accounting period of the Master Trust.

Without limiting the requirements of Section 7.05 hereof, the L 0 l

I

[

l L l D s

.. l i

l Trustee shall maintain such separate records of eaca of the .

Funds and the subaccounts thereunder as are necessary to '

l reflect the assets thereof and the allocation of income and l t

L losses among the Funds and subaccounts thereunder. The l Trustee may rely upon the written opinion of legal counsel of the Company, who may be an employee of the Company, with ,

I  ;

I respect to any question arising.under this Section 4.02. ,

l 4.03 Subsequent Adjustments.- Upon receipt of a -

written directive of the Company signed by an Authorized 1 Representative which sets forth an amount to be transferred f from one of the Funds or subaccounts thereunder and states that such amount should be transferred to one or more other Funds or subaccounts as specified, the Trustee shall transfer such amount to the Fund (s) or subaccounts specified by the Company in the written directive; provided, however, that no transfer shall be made from a Designated Beneficiary's i

subaccount except to another subaccount of such Designated j Beneficiary without such Designated Beneficiary's. prior -

written consent. No transfer to or from a Qualified Fund j shall be made which would violate the provisions of Section l l 468A of the Code.  ;

t V. DISTRIBUTIONS 5.01 Payment of Decommissionine Costs and l

Administrative Costs. In addition to payments otherwise L

l

i l

a 1

s .;. -As-authorized by this Agreement, the Trustee shall make payments out of the Funds or-any subaccounts thereunder upon j presentation to the Trustee of a Certificate by the Company, i or by any Designated Beneficiary if a Default shall have occurred and be continuing and such Designated Beneficiary is acting pursuant to the provisions of Section 3 of the Supplement to which it is a party, instructing the Trustee to f

disburse amounts in the Funds or any subaccounts thereunder in a manner designated in such Certificate for purposes of paying costs, liabilities and expenses of Decommissioning er, if so specified, administrative costs related to services authorized by the Company pursuant to Section 9.03. If the Funds relate to either Perry No. 1 or Beaver Valley No. 2, the percentage of payments to be withdrawn from any l

l Designated Beneficiary's subaccount shall be equal to such Designated Beneficiary's Undivided Interest in the Unit to which the relevant Fund is related. If the balance.in any Designated Beneficiary's subaccount from which payment is to be made is insufficient for any payment, the Company shall, i at the time it delivers the certificate to the Trustee, pay i the amount of such deficiency into the.Nonqualified Fund for credit to such subaccount or subaccounts', and any such payment shall be treated as a Required Payment in respect of such Designated Beneficiary. If the assets of any Fund or l

a I

1 e

I

+

subaccount thereof are insufficient to pormit the payment in-  !

full or amounts to be paid pursuant to a Certificate, the T:ustee shall have no liability with respect to such insufficiency and'no obligation to use its own funds to pay the same, except as it might otherwise be liable under this Agreement because of its negligence or wilful misconduct.

5.02 Payment of Administrative Expenses. 'In addition to the payment of administrative costs paid pursuant >

2 to Section 5.01 hereof, from time to time, the Trustee shall I

make payments of all reasonable administrative expenses .

(including taxes, reasonable out-of-pocket expenses and '

Trustee's fees as specified in the agreement referred to in Section 5.03 hereof) in connection with the operation of the Master Trust pursuant to this Agreement. All such administrative expenses and incidental expenses of the Master i

Trust shall require prior written authorization of the 3 Company and shall be allocated proportionately among the Funds (based on the fair market value of each Fund immediately prior to any such payment) and within each Fund ,.

among the subaccounts in the proportion-that the balance in ear

• subaccount bears to the aggregate balar ce of all subaccounts in such Fund; provided, that'the.tmost! allocated  ;

to any Designated Beneficiary's subaccount shall in no event exceed an amount equal to the percentage of the Designated =

l i

4

-> - - , , - - -- - . . - - - . . - - - . , - , - - + . - --,1 - - ---,--,n

w ...

Beneficiary's Undivided Interest times the aggregate amount of-such administrative and. incidental expenses allocated.to-the Fund to which such subaccount relates. JThe Trustee shall-

_ maintain such records as are necessary to reflect-the i allocation of' administrative expensesJand incidental expenses among the Funds in accordance with-this Section 5102. If the I

assecs of any Fund or subaccount-thereof are' insufficient to permit-the payment-in full of amounts payable under this

-Section 5.02, the Trustee shall have no liability with respect to such insufficiency-and noMobligation to'use its' d

own funds to pay the'same,Lexcept ascit might'otherwise_be-  ?

liable under this Agreement:because of its nsgligence or ,

wilful misconduct.

5.03 Fees.- The Trustee shall receive as exclusive  !

l compensation for its services'such amounts as may from time i to time be agreed to by the Trustee and the Company.-

5.04 Lieuidation of Investments. At-the' direction  ;

I of the Company or any1 Investment ManagerD(with respect to Funds or portions'thereof;specified to be under the control' of such Investment Manager as to investment in an Investment-Manager, Agreement), the Trustee,shallIsell or liquidate such investments of the Funds as may'be specified. The proceeds of any such sale or liquidation shall'be credited pro rata to the Fund or Fundt and within each Fund to the subaccount or i

J

o s

-2&-

g .

subaccounts thctsucmor to which such investments were credited priot t e. .ch~ sale or liquidation. Notwithstanding )

the foregoing, at any-time'during the continuance of a R Default, a Designated Beneficiary,mayl direct the Trustee'in writing to sell or liquidate such investments of_any 1

subaccounts identified with such-. Designated Beneficiary as-such Designated Beneficiary may specify and the proceeds'of i

any such sale or liquidation shall be credited  !

proportionately:to the subaceounts to which such investments are credited prior to such sale or liquidation. '

TERMINATION VI.

6.01 Termination of Funds and Master Trust in, General. -Each Fund established. hereunder shall terminate only upon the completion of the Decommissioning of the Unit to which it. relates (as-evidenced by written notification of ,

that fact to the Trustee by the Authorized Representative,- i which written notification in'the-case:of Perry No. 1 and Beaver Va)?.ey No. 2 (and in those cases only) shall be i

accompanied by the written approval of-each Lessor,-

partnership and corporation identified in Schedule B hereto  ;

(as amended by.the Company.from time to time) as being connected ~with the Unit in question. This Master Trust'shall terminate upon the termination of all of the Funds. Prior to its termination this Master-Trust shall be-irrevocableb i i

H se,

• s

... -28 . ,

f q.

6.02 Distribution of Master Trust'and: Funds Upon i i

Termination.' Upon termination of this' Master Trust or of-the t Funds with respect'to a particular Unit, the! Trustee shall-

~ ,

assist the Company or the Investment = Manager (s) in l liquidating'the assets of'the Master. Trust or such-Funds,zas L the case may be,~and distributing the then existing assets.

thereof (including Accrued, accumulated and undistributed net l income), less all reasonable final-administrative costs and' .

.l expenses agreed to by the Company.(including accrued:texes).,

to the Company; provided,.however, that no suchLdistribution-  ;

i L shall be made unless Decommissioning.shall have been l

l completed and the conditions set forth in Section' 6.'01 shall have been satisfied.

VII. TRUSTEES 7.01- Designation and Qualification of' Successor l

Trustee (s). At any time during the term of this Master-Trust, the Company shall have the right to. remove,the Trustee (at the company's-sole discretion) acting hereunder and appoint another qualified entity as a successor Trustee upon. 3 i

thirty (30) days' notice-in writing to the: Trustee, or upon  ;

j l such shorter notice as may be acceptable'to the Trustee. In-the event that.the bank or trust company serving as Trustee' -l r or successor. Trustee shall: (a) become insolvent or admit in writing its insolvency; (b) be unable orundmit in writing'its 4

]

4 q _

s ,,

f-o a I inability to pay its debts as such debts; mature; (c) make a

(

general assignment for the benefit of creditors; (d) have an- '

involuntary petition in bankruptcy filed against it: (e) commence-a-case'under'or otherwise seek to take advantage'of' s any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation-law,ustatute, or. proceeding" ]

or-(f) resign, the~ Company 'shall appoint a successor-Trustee-;

}

as soon as practicable. In the event'of'any such removal or' l resignation, the Trustee or successor Trustee shall have the 1

~

right to have its accounts finalized as provided-in Section

.05-hereof.. Any successor to the Company, as provided herein, shall have_the same'right to. remove and'to appoint" i any Trustee or successor Trustee. f Any successor Trustee shall beia bank or' trust .

company incorporated and doing-business-.within the United States of America and-having:a combined ~ capital and surplus of at least $50,000,000, if there be such an institution willing, able and legally qualified to perform the duties of Trustee hereunder upon reasonable or customary terms.

Any successor Trustee'shall=. qualify by a duly.  !

acknowledged acceptance of this Master Trust, delivered-to- -i the Company. Upon acceptance of such appointment by the.

successor Trustee, the Trustee shall assign, transfer and pay over to such Successor Trustee-the assets then constituting i

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

' 'l y 7. _

the Master l Trust. Any successor Trustee shall have all the l- rights, powers,-duties and obligations herein' granted to the original Trustee.

~7.02 Exoneration from' Bond. No bond or other ,

security shall be exacted or' required of.any Trustee or

]

L successor-Trustee <appoince'dtpursuant to this Agreement.

7.03 Resicnation. Thel Trustee'or,any successor l Trustee hereof may resign and be relieved'as Trustee at.any '

-time without prior-l application to or_appraval by or order of-l any. court by a duly acknowledged instrument, which shall be delivered to the. Company by the Trustee.no less than sixty-l l (60) days prior to the effective date of the Trustee's resignation or upon such shorter notice as may be acceptable _

)

to the Company. If-fort any reason the-Company cannot or does I

not act'in the event of.the resignation.of the Trustee, the l i .

i Trustee may' apply to a court of-competent jurisdiction for o

1 the appointment of a successor Trustee and the cost of making such application shall be an administrative expense.

l 7.04 Transactions-With Third Parties. No-person or .

organisation de'aling with the Trust'oe hereunder shall be ,

required to inquire'into or to investigate its authority for ]

entering into any transaction or to see to the application of the proceeds of any such transaction. ,

, i s

,,.............,.,,,,,-,,,3-.,,,,...,..t,,. -- .-m, .. .. . . .., ,., , , , , ,,,...,,,,.

di % '

+ x

,'( @ ,

?

t I

7.05 Accounts and Reports. The Trustee shall keep accurate and detailed accounts of all investments, receipts .

.and disbursements and other transactions hereunder ysth respect- to each Fund and each subaccount - thereunder - ir.

accordance with specifications of-the-Company,:and all-accounts, books-and records relating thereto?asltova

particular Unit-_shall be open to inspectionLandiauditlattall reasonable times by each Lessor, partnershipfand corporation

~

identified in Schedule B hereto (as amendedeby :theEcompany- -

from time to-time) as being connected withi hat! t Uni.t; .andTas- i to a particular Unit and generally by1any'other' person: .

designated by the Company. Within'5 Business 1 Days:following the close of each month,-the Trustee shall-provide a written report of the estimated market value ofieach Fund and.each subaccount thereunder, prepared on an~ accrual! basis. -Within 15 days following the close of each month,rthe Trustee shall file with the. Company:a final written reportLsetting;forth all investments, receipts and disbursementsiand other '

transactionsieffected by it during the month;and containing an exact description' of. all cash arai securition contributed, purchased, sold or distributed:and1the cost o: not p. eeds.

of sale, and showing all cash, and securities and other investments held at the end of such month.and the costLand.

fair market value of each item thereof as carried on the i i I

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

f

.. .C .

1 i

~

books of the-Trustee. Such accounts and_ reports shall be based on the_ accrual method of reporting net' income and; expenses and shall show the portion of the" assets applicable

.to each, Fund and subaccount thereunder.and-shall a' Iso-r identify all~ disbursements from each Fund =and subaccount thereunder.

In additionito the foregoing, on or before January ,

31 infeach calendar year', the Trustee'shall' submit such reports to the PUCO,as may be required underLal'1 applicable.-

regulations and:shall promptly; deliver a copy of each such j report to each Lessor, partnership and corporation identified ,

in Schedule B hereto .(as: amended: by the Company f rom' time to time).

All recordsHand' accounts maintained by the-Trustee with respect to the Master Trust and the Funds shall be preserved for such period as may;be required under any 1

applicable law. Upon the-expiration of any:such: required' retention period, the' Trustee shall have1the right.to destroy-such records and accounts after first notifying the Company in writing of its intention and transferring to the Company any records and accounts requested by the Company.

4 7.06 Tax Returns and Other Reports. The Trustee shall prepare and timely file all federal, state. and local I income or franchise tax returns or other-reports (including i

1 i

1

t . ' ,

. :l

. ,,b ?: .

I 1

r estimated tax returns and information returns)LasLmay:be .,

r required from. time to time with. respect <toJthetQualified' )

Funds, and.the Company agrees to provide lthelTrustee'inDa timely manner with~any informationiwithin.its possession, and j

-to cause the Investment Manager (s) to provide theLTrustee o

with any.information 1.n its possession,=which-isunecessary:to such filings. The Trustee shall prepare' and ' submit to the' l Company in-a timely manner all-informationkrequested by the

~

Company regarding the Funds required to be includedlin.the Company's federal, state and local incomettax returns'or 1

'other reports (including estimated tax returns and ,

information returns), su'b ject to the limitations contained  ;

i in Section 9.03-hereof,.the Trustee may employ independent certified public accountants or othe6 coa counsel toLprepare or review such. returns and reports and'the-cost thereof shall. l be an administrative cost. The-Trustee agrees to sign any. i

. tax returns or other reports where required by law to do so

.c or arising out of'the Trustee's responsibilities hereunder,  :

and to remit =from the Master Trust appropriate payments or j deposits of. federal, state and local income:or. franchise-taxes directly to the taxing agencies or-authorized l

L depositaries-in a timely manner. Notwithstanding Section 7.07 hereof, any interest or penalty charges assessed against the Master Trust pursuant to' Chapters 67 or 68 of the Code, t

I:

a

. , , - . - . , , ~

_9 m

s

-28~

. ^.. .=

1 l

i or, pursuant t'o'any similar; state-or local tax provisions,-as

~

=

.a result offthe: Trustee's7 failure1 to. comply with this-Section 7.06-shall- be; borne'by1the. Trustee and not the MasterfTrust. d

.r 3 The Trustee agrees toinotifytimmediatelygthe; Company in o . . t

-writing <of theEcommencement of the. audit of any Qualified

.\

U Fund's federal,' state, oralocal tax returns, and to-  ;

participateswith the Company on behalffof'the Qualified Funds;

inLsuch'-. audits and relatedcinquiries. TheLTrustee further, i v -

agrees to' provide the Company- with any additionala information:

-inEits-possession regarding;the Master Trust which.may be. 3 l

L requested byithe Company to be furnished'in an audit of the. *

-Company's federal,. state, or local . tax returns.within 30 days of receipt of notice of audit but in ncy event . lessLthan 115 *

-days;priorcto the commencement of any audit.

In: addition, the: Trustee rhall file with the PUCO,-  !

l' within thirty days;of the'filingEthereof with a~ State or Federal agency, copies of all documents that!the Master. Trust is required to-fi.le,with any State or Federal, agency (other-than-the PUCO), including without limitation tax returns.

7.07- Liability. (a) The Trustee shall be. liable only for:such Trustee's own acts or omissions (and-those of L

its officers and employees) occasioned by the willful misconduct or negligence of such Trustee.(or that of its officers and employees). l j

F l 4

,r- - ----w , ,< - -- ., -, . - - , . ,- - - , . - - - - . e

c

.; - r-

]

l 1

L t (b) Notwithstanding anything~ contained--in this 1 1

Agreement to the~ contrary, the Trustee _ agrees to refrain fromt i authorizing orJearrying. cut transactions that'would  ;

1 constitute "self-dealing" under' Code Section 468A(e)(5)'orL Code Section 49511(or-any applicable successor provisions).

If the Trustee authorizes:or-carries outiany transactionlin-violation of.the' provisions of this clause (b), the Trustee ~  !

(and not the Master 1 Trust or any Qualified Fund) shall be- 4 liable for anyutaxDimposed on1the Master Trust, any-Qualified Fund, or the Trustee pursuant to Code Section 4951L(or any.

applicable successor provision) and'for..any loss or damage L sustained by the Master-Trust,,any Qualified Fund, or the j company; provided, however, that the Trustee shall have no' t

I such liability with respwet to transactions-authorized or<

carried out pursuant to specific written. instructions of thei Company..

(c) The Company shall indemnify the Trustee-and hold it harmless against any and all claims, losses, liabilities, excise-taxes, damages or expenses-(including reasonable: attorneys' fees and expenses) howsoever arising

~

1 from or in connection with this Agreement or the! responsible- 1 performance of its duties hereunder, together with any income 4

a taxes imposed on the. Trustee as a result of any indemnity .

I paid to'it hereunder, provided.that nothing contained herein d

I

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

m> _

ii

., :y 1 ij#

l shall requiro that the Trustee-benindemnified for any-  !

l a liability. imposed pursuant to clauses?(a) or (b) of this '

Section 7.07.- Nothing-contained herein shall limit orfin any

, way_ impair the4right of the Trustee to indemnification under Lany=other provision of>this Agreement.

VIII 1 INVESTMENTS q 8.01' Appointment of Investment Manager (s)'.- The

-i Company may appoint one-or more' Investment'Managersito direct; the investment of.all or partHof the Fundslunder)the Master Trust. The Company shall also have the right to remove any- l such Investment-Manager (s). Whenever such appointment is-made, the Company shall provide written: notice?ofisuch  ;

appointment to the Trustee, shall specify the' portion of the Funds under the~ Master Trust with-respect:to which an 1

Investment Manager has been designated, and-shall instruct 1

the Trustee to segregate into'an Investment Account'for each Fund those-assets designated for management byLthe Investment Manager. Each Investment Account shall be divided into a separate subaceount relating to each Designated. Beneficiary and such other subaccounts as the company from time to' time shall'specify. To the extent.that assets are segregated into an Investment' Account, the Trustee shall be: released and relieved of all investment duties, responsibilities and liabilities customarily o~r statutorily l incident to a trustee i

, -i d '

l i

i with respect to.the assets in Investment Account, and as to such Investment Account the Trustee shall.act as custodian.

~

An .nvestment Manager shall certify in writing to the Trustee.

1 the identity of the' person or persons authorized to give-instructions or directions-to the Trustee on its behalf, i

-including specimen signatures. The Trustee may continue-to d l rely upon-all'such certifications unless otherwise notified 1

in; writing by-the_ Company or an Investment Manager,-as the' case may be.

8.02 Direction by Investment Manager (s).. An Investment Manager appointed by the Company toimanage an Investment. Account shall have authority toLmanage and.to

. direct te a acquisition; and disposition of the assets of >the Funds under the Master Trust, or a portion thereof,.as the case may be, and the Trustee shall exercise the powers. set ,

forth in Article X. hereof with respect to those' assets only-- ,

when, if, and in'the manner directed by the C6mpany'(or, during the continuance of a1 Default, by oneior more Designated Beneficiaries)lin writing, and'shall.not be under-any obligation to _ invest .or otherwise manage .any assets :in I the Investment Account. An Investment Manager'shall haveLthe power and authority, exercisable in its sole discretion'at_ q any time, and from time:to time, to issue and-place orders, for the purchase or sale of portfolio securities directly H l

i i

I L

-l

.. _ _ .~ , _

4r j

-.,u ,-- , -t f

i with qualified brokers or dealers.' The Trustee, upon proper 4

( i-notification from an Investment Manager, shall. settle the (

L

., transactions-in accordance with the appropriate trading t

authorizations. Written notification'of the issuance of each L' such authorization shall be given promptly to the Trustee by l-+

an Investment Manager,.andisuch InvestmentLManager shall

~

cause the settlement of such transacti'on to be confirmed in-

~

3 writing to the Trustee, and toithe Company, by the-broker or .

dealer. Such notification.shall*be proper authority for the- -4 Trustee to pay for portfolio' securities purchased against receipt thereof and to deliver portfolio securities sold against payment therefor, as.the. case /may be.

All directions to the. Trustee by-an Investment Manager.shall.be in_ writing .

and:shall be signed by a: person who has been certified by such Investment Manager pursuant'to Section 8.01. hereof as authorized to give-instructions or' direct' ions to the Trustee.

~

~

Should an Investment Manager.at any time elect to place security transactions directly with a-~ broker.or_ dealer, the Trustee shall not recognize such transaction unless and until it has received instructions or confirmation of such ,

fact from:an Investment Manager. Should an Investment f

. Manager direct the Trustee w utilize i.he- services of any- q person with regard to the assets under-'its management or control, such instructions shall be in writing and shall (

.l.

~"

l74f

, + a? 7 a

-y- f ,

y m t Sl specifically-set forth the actions to be-taken by the Trustee as to such services. In the event that an1 Investment Manager j places-security transactions directly orLdirects the-  ;

utilization of a service..such Investment Manager-shall be  :

solely-responsible for the acts of-such persons'~. The sole H

-l duty of the Trustee as to.such transactions shall be: incident i to its duties as custodian. '-

The authority of:an Investment ManagerLand-the terms t

and conditions of the appointment and' retention of an  !

. i Investment Manager (s) shall'be the responsibility. solely;of' j i

the Company, and the Trustee shall'not be deemed to be a- i party to, or to have any obligations under, any agreement- l 1

with an Investment Manager. Any; duty;ofEsupervision:or-  !

review of the r ts, omissions'orcoverall_ performance of_the l Investment Manager (s) shall be the' exclusive responsibility 1

of the Company, and the Trustee-shall have'no duty to review '!

any securities or other assets purchased by.an Investment Manager, or to make suggestions to an Investment Manager or to the Company with respect to the exercise?or nonexercise of any power.by an-Investment Manager.

-Nothing contained in this Section 8.02 shall be deemed to authorize any_ Investment Manager as such-to direct

or otherwise cause assets to be transferred between Funds or subaccounts. Any investment authorization:shall at all times x

\\

,, , ' be-subject to the'investmente standards set forth in Schedule'A hereto.

IX. -TRUSTEE'S' GENERAL POWER The Trustee shall have, with respect to the Master Trust, the followingcpowers,-all of which powers.are fiduciary powers to-be exercisedEin a fiduciary capacity and1 in the best-interests.of this Master Trust'and-the purposes ,

hereof, namely:

i 9.01 Registration of-Securities. To hold any l

. stocks,-bonds,~ securities,_and/or.other property.in-the name i of a nominee, in a street name, or by-other title-holding device,uwithout indication of. trust and generally to exercise '

the powers of an owner, including without-limitation-the

-l power to vote in accordance with1 instructions-provided=by the '

Company, with respect to-any such property whether sojheld or a

held in its own name,uas Trustee.

9.02 Borrowing. To borrow money in such amounts and upon-such-terms as the company may authorize in writing as necessary,to carry out the purposes'of.this Master Trust, and to pledge any securities or other property for the  !

repayment of any such loan as the Company may direct.

9.03 Retention and Removal of Professional and Employee Services. To employ (upon authorization by the-Company) attorneys, accountants, custodians, engineers,

.. -39 . ,

4 contractors, clerks'and agentsito carry out the purposes of this. Master Trust. The cost of any such-employment snall:be-an administrative cost.

H9'.04 Delegation of Ministerial Powers. .To delegate <

to other' persons such ministerial powers and duties as the Trustee 1may. deem to be advisable.

9.05 ^ Powers of Trustee to ContinueLUntil Final Distribution. To exercise any of such powers after.the date on which the principal and income:of the Funds-under'the.

Master' Trust shall-have become distributable and-until such'.

time as the entire principal of, and' income-from,.the Master Trust shall have been actually distributed by the Trustee."

-It is intended that distribution:of one or mo're of'the. Funds under the Master Trust will occur as soon as possible after termination of the Master Trustior any Fund, subject,.

however, to the limitations contained in Article V hereof.

9.06' Discretion in Exercise of Powers; To do any_

i and all other acts which the Trustee shalludeem proper _to-effectuate,the powers specifically: conferred upon it by~this Agreement, nrovided, however,Ethat the Trustee may_not do any act or participate in-any transaction which would:

{1) Contravene any provision of this Agreement or any Supplement hereto; I

sl i l

^

, q

~

.., _,,. t (2) - Violatec the terms and conditions of any instructions-

-provided in-a written statement of the Company or,-

if applicable, any Designated Beneficiary, provided

-such instructions are not inconsistent'with thisi Agreement or'any supplement; (3) Eliminate'or' disqualify the status ofLthe Qualified =

Funds'(orLany of them) as Qualified Decommissioning; g Reserve Funds under Section 468A (or any applicable successor provision) of the Code; or [

i (4) Constitute an investment of the Funds in the_ Company? )

or an affiliate of the Company.

.],

9.07 Deposition'of Funds. To deposit fundsiin pl interest bearing account deposits maintained by or savings I

certificates issued by National City-Bank,-Akron in its separate corporate capacity,.or in:any other banking?  !

institution' affiliated with National City Bank, Akron; y provided,:however, that the assetsLof a Qualified Fund may only_be so deposited if the requirements of Applicable Tax Law are met. j 9.08 Market Inventory Funds. .To maintain andc operate one or more market inventory funds as a vehicle'to exchange securities among Funds without alienating the  ;

i' property from the Trust.

9.09 Loaning of Securities. To loan securities to j brokers or dealers or othat borrowers under such terms and 1

l

'k

b

.. . --37-:

conditions as the Trustee, in'its absoluteldiscretion, deems advisable, to secure the same in any manner permitted by law and the provisions of this Agreement, and during the. term of-any such loan; to permit the-loaned securities'to be

~

i transferred into the name'of and voted by the borrowers or others, and, in? connection with the exercise of the powers. _

hereinabove granted, to hold anyLproperty deposited as- ,

collateral by the borrower pursuant to any master loan l agreement in bulk or otherwise, together with the unallocated interests of other lenders, and to liquidate-and retain any.

such property.upon the. default of the borrower-, and to receive compensation therefor outeof any amountLpaid by or charged to the account of1the borrower.  !

9.10 Retention of Uninvested' Cash. To hold uninvested cash' awaiting investment and such additional cash balances as-it.shall deem reasonable or necessary,-without l .

1 l

incurring any liability'for ,the paymentEof interest thereon. ,

L l l X. TRUSTEE'S INVESTMENT POWERS j 10.01 General-Investment Powers. The Trustee ,

l recognises the authority of an Investment Manager to: manage, 1

invest,.and reinvest the assets:in an Investment Account I pursuant tonan Investment Manager Agreement.and as provided. -l in Article VIII of this Agreement, and the. Trustee agressito cooperate with any Investment Manager as deemed necessary to i accomplish these tasks. Notwithstanding the foregoing, to' l

,jk th'e extent that the assets of the Funds under the Master Trust have not been segregated'ihto an Inves'tment Account to be invested by an Investment Manager, the Trustee'shall-'have the power to invest such assets in accordance with the written' directions of~the Company and, as to Qualified Funds, in conformity with the' limitations set forth in~Section 468A of the Code and the regulations thereunder.-

XI. MISCELLANEOUS 11.01- Headings- The section headings set forth in j this Agreement and the Table of Contents are' inserted for convenience of reference only'and shall be~ disregarded in the construction or interpretation of any of theLprovisions of  ;

this Agreement.

11.02. Particular Words. Any word contained inithe- 1 text of this Agreement shall be read as the1 singular or plural and as the masculine, feminine, or neuter as may'be-applicable or-permissible in the particular! context,- Unless otherwise specifically stated, the word " person"lshall be i

taken to mean and include an individual, partnership,  ;

association, trust, company, or corporation.

11.03- Severability of Provisions. If any provision-of this Agreement or its application to any person or entity or in any circumstances shall be invalid and unenforceable, the application of such provision to persons and in circumstances other than those as to which it is invalid or.

i

__ _ _ ._ . _ _ . _ ~ . . . . _ . ,

l 1

.,: ,. - - - 39-i r

i P

unenforceable and the.other provisions:of this-Agreement, i

shall not be affected by such invalidity or unenforceability. i

~

11.04 Delivery =of Notices'Under Agreement., Any .

notice, direction,or construction. required by this Agreement -i

- to be given to the Company or the Trustee shall be deemed to have been properly given when' mailed, postage prepaid,.by registered or certified mail, tosthe person to be notified 1as ,

9

?'

set forth below:

If to the Company-

' OHIO EDISON COMPANY, 76 South' Main Street- '

Akron, Ohio = 44308.-

. Attention:- Treasurer- .

If to the Trustee:- s National. City-Bank,-Akron i P.O. Box 2130 Akron, Ohio 44309-2130  :

Attention:- -Corporate-Trust Department The Company or the Trustee may change the above= address:by

delivering notice thereof in writing to the;other. party.

i 11.05 Alterations and Amendments. .ThenTrustee and ,

1 the Company understand and agree that. modifications or i

amendments may be: required to this Agreement', and to the-exhibits and schedules hereto, from time to. time to .

o l

effectuate the purpose of the Master Trust and to comply with  !

l Regulations, any Order, any changes in tax' laws, regulations 1

i or rulings (whether published or private) of the Service,and any similar state taxing authority, and any.other changes in 1 o; ,

d a

es e, w .g_,ww. m e e. .y -g. g g g " m--- g

_ ,,_ 7 _

s l

t

-I the-laws applicabletto:the Company.or the Units. This Agreement, and the'. exhibits and schedules hereto,.may be altered or amended tosthe extent necessary or. advisable to. ,

effectuate such'purposesLor to comply with such Regulations, [

l I l

I Order or changes, ')t L Otherwise,athis' Agreement,-and the exhibitsLand'.

schedules hereto, may be amended, modified, or altered-for i any purpose requested-by:the company so long as such q amendment, modification, or alteration does notiaffect the use of the assets of the Funds to pay the costs'of} ,

j Decommissioning.

l --

l Any alteration or amendment to, or modification of, this Agreement or an' exhibit hereto must be-in writing and signed by the Company and the Trustee. Schedules to this Agreement may be amended, modified or' altered by delivery:of

! such amended, modified or altered schedule to the' Trustee' i . .

l together with notice that such: amended, modified or altered-l schedule shall:be effective forthwitheor at-such later date as specified in the notice. The Trustee shall' execute any l j such alteration', modification or amendment. required to be I executed by it-and shall accept and be governed by any

, amended,' modified or altered schedule delivered to it but~

shall have no duty to inquire or make any investigation as to-

.- whether any amendment, modification or alteration.is

consistent with this Section.11.05.

i 1

i l l

._ . _ _ . - - . . a

ll

,, , 11.06 Successors and Assigns'. '. Subject-to the provisions O' Sections 2.09 andL7.01,-this Agreement shall be binding uponLand inure <to the-benefit of-the Company,.the; a Trustee and their respective successors,-assigns, personal j 0 Govern n La u isdiction: Certain' l Waivers. The Master Trust'and all questions pertaining to' its validity, construction,'and administration shallbe: .

determined in accordance with the laws of the! state of Ohio to the e'xtent not superseded by Federal-law.- i

-i-11.08- Accounting Year. 'The Master Trust shall  ;

1 operate on an accounting year which _ coincides with tihe: i calendar year, January 1 through-December 31'.: l 11.09 Counterparts. This: Agreement e4y be executed  ;

h in any number of counterparts, each-of which shall be-an--

original, with the same offact as if the signatures thereto-and hereto were upon the same instrument.

4 11.10 Decommissioning: Liability.. Nothing in-this 1

Agreement or in any Supplement is intended to impo::t any1 l

responsibility on the Trustee'or on any Des.ignated  !

i Beneficiary for overseeing or paying the. cost of the Decommissioning of the Units or any of them'other than,. in-  !

the case of the Trustee, the disbursement of funds in 4 accordance with Article V hereof.

i

= ,,..,.

1 I

IN WITNESS. WHEREOF,.lthe Company _.and the Trust'ee have set their hands and seals-to this Agreement as.of the day and. -

l year.first above. written. l

. OHIO EDISON' COMPANY' By~

Attest: - . .

NATIONAL ~ CITY' BANK,. Akron.

t.

By @ b bb

?

Attest: lu rt 'L' r/' / -

i/f/ / /gl  ;

l 1

'1 l

l

'l l

I

..m. ..__ ._ _ . _ . .

. - .- - - . . . . - ~~ - - - . - .

'c.. i q

, -i SCHEDULE A l 4

Perry No. 1:

Qualified F'ind:

Invert:oent : permitted from time to time under 4 M

Section 468A of the Code and Regulations thereunder,'unless- -

the investments permitted with: respect to. Perry No. 1 Nonqualified Funds is more restrictive, in which case; the 1 .f investments permitted with respect to Perry No. 1 , 91 Nonqualified Funds shall control, Nonqualified Funds:-

Investments permitted by the March 1987 l Sale / Leaseback Transaction asievidenced'from time to time.  ;

during the period ended- ten years prior- to the- Funding Date >

f, (as that term is used in the . Participation: Agreement) by- a written schedule approved by each of the Designated Beneficiaries involved with-suchJtransaction and thereafter.

until such Funded Date as specified in the1 Participation , ,

Agreement related thereto. ]

' Perry No. 2: p L Qualified Fund:

Investments permitted from time to time under. j section - 468A of the Code and Regulations thereunder. ,}

Nonqualified-Funds:

No restrictions'on: permitted investments. y i

Beaver = Valley No.~1

' Qualified Fund: q Investments permitted from' time to' time.under 1l Section 468A of the_ Code and Regulations thereunder..

• Nonqualified Fund:

No restrictions on permitted investments'.

J tt L

1

' -< . . - ~ , , - . . , , , . - - -

. J' , 'w .

-2' y-..^ :3 :

' Beaver Valley No.'2-Qualified' Fund:' .

Investments permitted from time to time under Section 468A of.the Code and Regulations thereunder, unless the investments: permitted with respect to Beaver Valley No. 2 Nonqualified Funds:are1more restrictive, in which case, the Nonqualified Funds:shall control.

Nonqualified Fun'd:

' Investments permitted by the September.1987 Sale / Leaseback Transaction as evidenced-from time to time during the' period: ended ten years prior to the Funded'Date '

(as that term is usedyin the Participation-Agreement) by a written schedule approved by each of the Designated-Beneficiaries involved-with such transaction and thereafter ~

until-such Funded Date as specified in the Participation Agreement relatedi thereto.

s

...e9 r SCHEDUI2 B ,

i PERRY NO. 1 i

Owner Trustee

• First National Bank of' Boston' Jim Mogavero P. 0, Box 1618 Boston, MA 02105-1618 Owner Particicants:

Perry One Alpha Limited Partnershf.p Security Pacific Capital Leasing e/o Squire, Sanders & Dempsey' Manager, Operations Dept.

1800 Huntington Bldg. Four Embarcadero Ctr., Suite 1200 -

Cleveland,-OH 44115 San-Francisco, CA 94111- ,

Perry One Delta Limited' Partnership . Perry One; Gamma Limited Partnership c/o Squire, Sanders & DempseyL c/o Squire, Sanders & Dempsey. 2 1800 Huntington Bldg. 1800~Huntington Bldg. c

. Cleveland, OHL 44115 Cleveland, OH 44115 Perry One Beta Limited Partnership c/o Squire, Sanders & Dempsey 1800 Huntington Bldg.

Cleveland,.0H 44115

.i PERRY NO. 2 i None BEAVER VATfiY NO. 1 ,

None BEAVER VATTFY NO.'2 Owner Trustee:

i First National Bank of Boston Jim Mogavero

. P. O. Box 1618-Boston, MA 02105-1618 I

w _ . . . . . . . - , - ,

-~. -

1:m f

]

h 1.. _

2*

I

.. pe l d i

, Owner Particinant:_

Mission First Financial! Chrysler; Capital Corporation Lawrence Yu, Mission Fin. Mgr,'_ Portfolio Administration 3010 Old Ranch Pkway,' Suite 400= 'Creenwich Office Park 1 ],.

Seal Beach,1 A - 90740 2750 Creenwich, Connecticut 06830 Perry One Delta Limited Partnership' Beaver Valley Two Sigma Limited '{

c/o' Squire, Sanders & Dempsey c/o Dect.ert, Price & Rhoadsey-  ;

1800 Huntington Building 3400 Centre Square West l' Cleveland,-OH 44115- Philadelphia, PA 19102 .r Perry One' Alpha Limited Partnership. Beaver Valley TwolPi Limited c/o Squire, Sanders & Dempsey. c/o Dechert, Price & Rhoadsey. 3 3400 Centre Square-West

~

1800 Huntington Building 3 Cleveland,-OH 44115 Philadelphia, PA 19102 ,

Security Pacific Capital Leasing -l Manager, Operations Dept./ Lev.

-t 4 Embarcadero Ctr. Suite 1200 m San Francisco, CA 94111  ;

t i

t

_y i

i 4

I l >

L

-3 y . -

.n

-i ,

...... .j 15181fC

, . 0H10101505 COMPANY. 1 1 .. -

l PittiIUCLEARPOWIIP!,AI7Ullf50.-!

l DIC0EISS!0llIGFDIDlIGSCRIDULE.

l-i I

l Beginning Annual Innsteent - 'tading 60,912' l

1990- 1,849,316 1,174,326 3,084,554 1991 3,064,554 1,174,326' 91,793 4,350,673 1992- 4,350,673' ~1,174,326 =123,446 5,648,446- l 1993 5,648,446= 1,174,326 155,890: 6,978,662 1994- 6,978,662 1,174,326 4 169,146_. 8,342,134 >

1995 8,342,134 1,174,326 223,232 9,739,692 11.172,190 '

1996. 9,739,692 1,174,326' 258,171 l 1997 11,172,190 .1,174,326 293,984 12,640;500 7 l 1998 12,640,500 1,174,326 330,692' 14,145,516  !

1999 14,145,516 1,174,326 368,317 :15,688,161 2000  : 15,688,161 ' 1,174,326 406,683 ' 17,269,371.- o

- 2001 17,269,371 1,174,326 446,413 18,890,110l 2002 1R,890,110 1,174,326 486,932'_ 20,551,368' 2003 20,551,368- 1,174,326 - 528,463 i22,254,157' 2004 22,254,157 1,174,026 571,033 23,999.517 l 2005 23,999,517 1,174,326 614,667 25,788,510' '

2006 25,788,510 1,174,326 659,392' '27,622,228

'4 l 2007- 27,622,228 1,174,326 705,235 -29,501,789: '

l 2008 29,501,789 1,174,326 752,224 31,428,340: 'i l 2009 31,428,340 1,174,326 800,388 33,403,054. ,

l 2010 33,403,054 ' 1,174,326 649,755' 35,427,135  ;

2011- 35,427,135- 1,174,326- 900,357: ;37,501,818.- ,

2012 - 37,501,818. 1,174,326 - 952,225n -39,628,370 l

- 2013 :39,628,370' 1,174,326 - 1,005,388- -41,806,084-2014 ~41,808,084 1,174,326 .1,059,881 44,042,291' 2015 44,042,291 1,174,326 1,115,736; 46,332,353 ,

2016 ,46,332,353- 1,174,326 1,172,988 48,679,667  ;

i 2017- 48,679,667' 1,174,326  : 1,231,671? 51,085,665 2018 51,085,665 1,174,326 1,291.821-- -53,551,812_ i 2019 53,551,812 1,174,326 .1,353,474- 56,079,612 2020 .56,079,612 -1,'174,326 1,416,669 $8,670,607-2021 58,670,607, 1,174,326 1,481,444- 61'326,378-2022 61,326,378 1,174,326 1,547.839 64,048,543 2023- 64,048,543. 1,174,326 1,615,893 66,838,762 .

2024 66,838,762 1,174,326 ,1,685,648_. 69,696,736 l- 2025 69,698,736 1,174,326 1,757.147 72,630,210 l 2026 72,630,210 1,174,326 1,830,434 75,634,970 Assumptions:(1)ContributionmadeonJuly1; (2)Iarningsprojectedusingarealrateofreturnof2.5%

i

n. + . .- - - - .

!!E!!!!C PtEISTLf60A Mit CWWI PIRif 500Ltk! MIS &*#t 1517 50. I D800515S10p150 MEM S08tM.I Beginning . Annual lenstant leding fear ballace Contribstion Bertings Balknee

..... .<... .... ... .......~..... ....... .. ..... . ...

1590 48,647- 57,118 1,930 107,695 1991 107,695 79,513 3,686 190,894 19fJ 190,894 64,109 5,574 260,577 1693 ' 260,577 52,912 7,176, 320,665 1994 320,665- 52,912 8,678 382,255.

1995 382,255 52,912 10,218 445,365' 1996 445,385 52,912 11,756 510,093 1257 510,093 62,912 13,414 576,419 1998- 576,419 52,912 15,072- 644,403 1999 644,403 52,912- 16,771 714.086 2000 714,086 52,912 18,514 785,512 2001 785,512 52,912 20,299. 858,723 2002 858,723 52,912 22,129 933,764 2003 933,764 52,912 24,006 1,010.682 2004 1,010,682 52,912 25,928 1,089,522.

2005 1,089,522 52,912 27,899 1,170,333<

2006 1,170,333 52,912 29,920 1,253,185 2007 1,253,165 52,912 31,991 1,338,068 2006 1,338,068 52,912 34,113 1,425,093 2009 1,425,093 52,912 36,289 1,514.294 2010 1,514,294 52,912 38,519 - 1,605,'125 2011 1,605.725 52,912 -40,805 1,699,442 2012 1,699,442 62,912 43,147 1,795,501 2013 1,795,501 52,912 45,549 '1,893,962 2014 1,893462 52,912 48,010 1,H4,684 ,

2015 1,994,884 52,912 .50,534 2,098,330 2 2016 2,098,330 52,912 53,120 2,204,362 2017 2,204,362 52,912 55,770 2,313,044 2018 2,813.044 52,912 58,488 2,424,444 2010 2,424,444 52,912 61,273= 2,538,629 2020 2.538,629 52,912 64,127 2,655,668  ;

2021 2,655,668 52,912 67,053 2,775,633 0 22 2,775,633 52,912 70,052 2,898,597 2b?3 2,898,597 52,912 73,126 3,024,635 202( 3,024,635 52,912 76,277 3,153,824 +

2025 3,153,624 52,912 79,507 3,286,243 2026 3,286,243 52,912 82,817 3,421,972

~

Assaartione (1) Contribution sade on Julf 1 ,

gt)tarnlessprojectedusingarealrateofreturnof2,51 l:

i h

\ '

i

4

. > e' 55181!D f!BABCIAl, ASSORANCE ABOUffS ABD Silt!M FUID BAl,AICtB FOR Pitti 50CI, tat P0ftt PIAff Ullt 10.1 OhioIdison FeenstleaniaPmt fotal FinancialAesoranceAnoast $50,989,500' $8,906,166 859,895,666 ProjectedtiternalSinkingFund balance at decosaiseloning hte $75,6H,970 63,421,972 879,056,942 B

B

.