ML20215E979

Application to Amend CPPR-133,recognizing Establishment of wholly-owned Subsidiary Corporation,Central Illinois Electric Co & Adding Subsidiary as co-permit Holder W/Comm Ed.Marked-up CPPR-133 & MOU Encl

ML20215E979
Person / Time
Site:	Braidwood
Issue date:	06/15/1987
From:	Hunsader S COMMONWEALTH EDISON CO.
To:	Murley T Office of Nuclear Reactor Regulation
References
3182K, NUDOCS 8706220180
Download: ML20215E979 (101)

Text

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- -= ,' _ N Commonwealth Edison I Ora First Natior:J Plaza, Chicago, Illinois

" f), Address Reply to: Post Office Box 767 I (Nd Chicago, I!Snois 60690 0767 r

l June 15, 1987 i

Mr. Thomas E. Murley, Director Office of Nuclear Reactor Regulaticn  :

U.S. Nuclear Regulatory Commission Washington, DC 20555

Subject:

Braidwood Station Unit 2

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Application for Amendment to l Construction Permit CPPR-133 I NRC Docket No. 50-457 l

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References:

(a) December 31, 1975, D.B. Vassallo letter I to B. Lee, Jr.

(b) September 30, 1982 L.O. De1 George letter to H.R. Denton (c) November 15, 1982 D.G. Eisenhut letter to L.O. DelGeorge (d) May 28, 1987 S.C. Hunsader letter to T.E. Murley Reference (a) provided Commonwealth Edison with Braidwood Station Construction permit CPPR-133 for Unit 2. Reference (b) provided Commonwealth Edison's request for an extension of the construction completion date for Braidwood Unit 2 to April 30, 1988. Reference (c) provide the NRC review, evaluation and order extending Construction Permit CpFR-133 from November 1, 1983 to April 30, 1988. Reference (d) provided I the application for amendment to Facility Operating License NPF-70 for l

Braidwood Unit 1 addressing the establishment of a wholly-owned subsidiary corporation.

Pursuant to the provisions of 10 CFR 50.55(d), Commonwealth Edison hereby requests an amendment of the Braidwood Station Construction Permit CPPR-133. This amendment involves the application of this same wholly-owned l subsidiary corporation, the Central Illinois Electric Generating Company

(" Subsidiary") for Braidwood Unit 2.

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

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l Mr. T.E. Murley June 15, 1987 Specifically, the Agreement contemplates the conveyance of title to Byron Station Unit 2 and Braidwood Station Units 1 and 2 from Commonwealth I

Edison Company to the Subsidiary in accordance with the Facilities Transfer Agreement which is attached as Exhibit B. Commonwealth Edison Company will have the right to purchase all electricity produced by the units for at least a 5-year period under a power Supply Agreement which is attached as Exhibit C. The rubsidiary's rates will be regulated by the Federal Energy Regulatory 9.6% (net of fuel savings) to Commonwealth Edison Company's retail customers with a five year moratorium on rate increases thereafter.

The retail customer rates would continue to be regulated by the Illinois Commerce Commission thereafter. Finally, the Agreement provides several l options that are available to address the rate treatment of the units owned by the Subsidiary after the fifth year. Those options are to be exercised ,

at the direction of the Illinois commerce Commission.  !

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

Commonwealth Edison Company, under an agreement with the Subsidiary, would l l continue to construct the Facility and be financially responsible for the construction of the Facility as that term is used in the regulations of the g Nuclear Regulatory Commission (the "NRC"). The Construction and Operating '

Agreement and the Financing Agreement between Edison and the Subsidiary are i attached as Exhibits D and E respectively.

1 Based on the foregoing, we believe construction permit CppR-133 should be amended to recognize the Subsidiary's status as titleholder of the Facility. Accordingly, pursuant to 10 CFR 50.90, Commonwealth Edison Company requests that NRC amend the construction permit to add the Subsidiary as a l co-permit holder with Commonwealth Edison Company as shown on the attached  !

marked-up copy of Construction permit CPpR-133, in Exhibit F. l Attachment 1 of this letter contains additional general information in support of the application for license amendment. Included is a description of the organization and management of the Subsidiary, the Facility being conveyed to the subsidiary, and information concerning technical and financial qualifications.

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

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i Mr. T.E. Murley June 15, 1987 The conveyance of the Facility to the Subsidiary requires the approvals of regulatory authorities in addition to the NRC, including the  !

Illinois Commerce Commission and the Federal Energy Regulatory Commission, j Until all necessary approvals have been obtained, the Agreement described above cannot be implemented. It is intended that such approvals will be l sought and obtained by July 1, 1987. Therefore, it is requested that the NRC approve the proposed construction permit amendment in a manner as expiditious as possible. .Should it subsequently appear that other regulatory approval .

cannot be obtained, Commonwealth Edison Company will promptly notify the NRC. I Commonwealth Edison Company is notifying the State of Illinois of this application for amendment by transmitting a copy of this letter and its attachments to the designated State Official.

In accordance with 10 CFR 170, a fee remittance in the amount of

$150.00 is enclosed.

Please direct any questions regarding this matter to this office.

Very truly yours, S. C. Hunsader "W

Nuclear Licensing Administrator Exhibits: A through G Attachments (1): General Background Information (2): Antitrust Review

Enclosure:

Fee Remittance cc: Braidwood Resident Inspector ,

NRC Region III Office )

J. A. Stevens - NRR ]

M. C. Parker - IDNS SUBShIBEDANDyp to befqrp me this _I day of l U A,{.r , 1987

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'k*s..E. x MEM0RANDUM ,

OF UN'DERSTANDING

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Exhibit A

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Tabruary 3, 1987 MEMORANDUM OF UNDERSTANDING WHERIAS: The completion of the nuclear power plants now under construction in Northern Illinois and the Potantial impact which either completion or cancellation of these plants could have on electric rates, electric service and the economy of the State ) l I

are tatters of great concern to the people of this State; and WHERIAS: approximately 7.1 billion dollars will be invested in these power plants; and i

WHERIAS: protracted and costly litigation concerning the completion of these power plants is continuing and further costly 1,itigation concerning the level of electrig rates will occur unless. resolved by agreement among responsible public officials, electricity consumers and commonwealth Edison Company 1

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WHERIAS: the signatories to this Memorandum all agree that it is in their mutual interest to resolve the continued uncertainty with respect to completion of these power plants, the {

""'" # I k$hel of electric rates and the adequacy of electric service and to resolve those uncertainties without resorting to still further litigation which all agree would only serve to increase the costs to all concerned.

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w NOW THEREFORI, in consideration of the Promises and i covenants set forth in this Memorandum, the parties agree to a settlement upon the principles and understandings set forth be-lows RESTRUCTURING THE OWNERSHIP OF THREE NUCLEAR GENERATING FACILITI29 L Tdiser. vill transfer its nuclear generg. ting facili-ties known as Byron 'h+it II and Braidwood Units I and II (the

" Units") to a wholly-caned subsf diary (the " Subsidiary") . Neither Edison nor the Subsidiary will takt:- any action with respect to ownership -(legal or equitable) of tie. Units that would prevent the subsidiary from performing its obligetions under the Power supply Agreement provided for herein. Ediscu will complete and operate the Units transferred to the Subsidiary. For operating purposes, Edison will treat the Units on the same basis as its own units and

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will be respons'ible for insuring that they are operated and main-tained safely and in ac'cordance with all requirements of the Nuclear Regulatory Commission ("NRC") . In all aspects of operat-ing the Units Edison will allocate costs and resources on a basis consistent with its general utility operations so as to insure I that no subs'idy flows from or to the Subsidiary. . For purposes of treating deferred taxes related to the Units, Edison agrees that during the Initial Rate Period (as defined in Paragraph 3 herein) the Units shall be treated in the same manner as the nuclear urits owned by Edison; and that deferred taxes shall not be flowed back to income disproportionately during the Initial Rate Period. For 2-J

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ratemaking purposes, book depreciation during the Initial Rate Period shall be accrued on a straight-line basis. Such deprecia-tion shall commence (and capitalization of carrying charges shall cease) for Byron II and Braidwood I no later than July 1, 1987, and for Braidwood II no later than October 1, 1988. Edison fur-ther agrees that it will not cause the Subsidiary to replace Edison as the primary obligor of any outstanding security of i Edison existing at the time this Memorandum is executed. The Subsidiary will not be subject to regulation by the Illinois commerce Commission ("ICC" or " Commission"), except as provided in the affiliated interest provisions of the Illinois Public Utili-ties Act, and will not be subject to the audit provisions of the Illinois Public Utilities Act. The Subsidiary's rates will be subject to regulation by the Federal Energy Regulatory Commission

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

proceeding to approve the rates to be charged by the Subsidiary.

In connection with the transfer to the Subsidiary, Edison will yrite off not less than $550 million of its investment in the Units. Edison will file appropriate pleadings with the ICC to implement the provisions of this Memorandum. Parties t tais Memorandum shall have the right to participate in any hearing called by the ICC relative to said petition.

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

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! that retirement of its generating units requires the approval of the ICC under the Public Utilities Act. Furthermore, Edison represents that it intends to operate its generating units in accordance with the principles of economic dispatch (subject to changes imposed by governmental authority) and that its Illinois coal-burning units are, and Edison believes that at least for the durationoftheInitialRatePeriod,areehectedtobe,its lowest cost coal-burning units. .

Edison agrees that it will not defer its operating and j maintenance ekpenses and capital additions costs during the Rate Moratorium Period for the purpose of increasing its costs for test year purposes in any rate proceeding after the Rate Moratorium l Period. To enable any party to verify that Edison has conducted its operating and maintenance and capital additions programs in accordance with this commitment, Edison shall file annually during the Initial Rate Period a report with the Commission describing its budgeted and actual activities related to operating and main-

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tenance expenses and capital additions costs for the previous year. The report shall include an explanation of any significant discrepancies between the budget and actual expenditures for that j

year.

l RATE MORATORIUM

2. Edison will not seek a general rate increase for five years or for eight years if option (c) described in Para-graph 5 hereof is exercised (which 5-year or 8-year period shall be the " Rate Moratorium Period"), except as specifically provided 4

I 2, in Paragraph 3 hereof (or, if option (c) of Paragraph 5 is exer-cised, the increase permitted therein), nor will Idison otherwise seek any other increase in its rates during this period, except as otherwise provided in Paragraph 3 hereof. This paragraph shall not preclude Edison from seeking an increase or decrease in or taking any othhr action before the ICC with respect to the follow-ing Rates and Riders, or from taking any other action with the consent of the party effected by the change: Rates 1, 1E and IT i

(but only as these three rates relate to light bulb charges), and Riders 4 (but'only with respect to avoided cost payments), 6, 7, 10, 21, 23 and 27. (In this Memorandum, " general rate increase" means any increase for which Edison would, absent a waiver by the Commission, have to comply with ICC General order 210 now codified at 83 Ill. Admin. Code 285). l

,3. Effective as of July 1, 1987, Edison will increase its base retail rates by approximately $660 million, exclusive of revenue taxes. 'Th'e general service rates will be determined by applying a uniform percentage increase to its base rates currently in effect. The uniform percentage increase that will be applied to the general service rates will be the percentage that, if applied to all of Edison's base rates, would result in a revenue increase of approximately $660 million. The parties agree that Edison's residential and general service rates will be as set i

forth in Attachments A, B and C. Attachment A reflects a reduc- l tion in the summer-winter rate differential. Except as otherwise required by the terms of this Memorandum, during the Initial Rate Period fuel costs of the Units Ishall be included in Edison's

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

a. Where conditions beyond Edi' son's control, such as, but not limited to, acts of God, ] 1 majer. economic disruptions, or changes.in law, rules or regulations or interpretations thereof, create or result in a financial emergency for Edison which threatens Edi-

- son's ability to continue to maintain an k adequate quality of service in its service 1 area or otherwise carry out its responsibil-ities as a public utility; or

) b. To recover costs or re' coup revenue losses L imposed by decisions, or by changes in law, ordinances, rules or regulations or inter-  ;

pretations thereof promulgated or enacted by j any Illinois court, the General Assembly or any other Illinois governmental or regulato-ry body or other authority after the data

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hereof involving regulatory or tax matters j or franchise or similar payments to units of

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l local government, all as applicable primari- 1 ly to electric utilities, public utilities, i Edison or regulated industries generally (as j distinguished from being applicable to all businesses or taxpayers as a class).

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

The Commission shall make the determination of whether an appro-priate emergency exists to warrant the granting of a rate increase pursuant to the foregoing subparagraph a. Further, nothing in this Memorandum shall be construed as preventing any party from a) contesting an application by Edison to increase or restructure its l rates or riders other than as provided in the first two sentences i

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4 of this Paragraph 3 (or in option (c) of Paragraph 5 of this Memorandum) or b) from seeking a rate reduction where a relaxation of governmentally imposed costs, such as, for example, a material reduction in taxes, creates a significant windfall for Edison. A "significant windfall" exists only if in any year Edison's re-ported consolidated not income, before interest expense, produces a rate of return on Edison's total book assets (including those of the Subsidiary) which is in excess of a rate of return which would be just and reasonable if applied to Edison's utility rate base pursuant to the Illinois public Utilities Act.

On or about July 1, 1992, or, if option c in Paragraph 5 I hereof is exercised then on or about July 1, 1995, Edison shall file with the ICC an application for a determination as to appro-priate rates following the Initial Rate Period. Such application may include a request for a general rate increase (including emergency relief) or decrease. The period,beginning with the effective date of the rate increase provided for in the first sentence of Paragraph'3 and ending with the effective date of the rates established by this procedure is defined as the " Initial Rate Period."

4. At no time will Edison seek to recover any revenue

- *??ff.t ho_rtfall or inadequacy which it may believe exists in its rate l

levels in effect during the Rate Moratorium Period. This provi-i l- sion shall not prevent Edison from seeking a rate increase under

{ the terms of the exceptions specified in subparagraphs (a), (b) and (c) of Paragraph 3 or from seeking emergency rate relief immediately following the Rate Moratorium Period.

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4 POWER SUPPLY AGREEMENT

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

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

Outeut Guarantee .

If th's subsid'iary is unable to produce energy from the Units at the cumulative target levels set forth below, Edison l

guarantees, through the operation of the fuel adjustment clause

, (by making credits against costs reflected in that clause), to compensate ratepayers for the excess costs of replacement power over the fuel costs of the Units; provided, however, that Edison shall not be obligated to absorb more.than $660 million of re-placement power cost in respect of a shortfall in any of the years 1988 through 1991, or $330 million in respect of 1987 or 1992.

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

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the and of such year less the amount, if any, of such shortfall at the and of the preceding year. In computing the shortfall in ./ I

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output under this paragraph, only one-half of any energy for wh[dh Edison has received a bonus of one-half of the savings pursuant to <

the immediately succeeding paragraph, shall be considered as {

energy output of the Units. js a If in any year the subsid'iary p Nduces energy from the, Unitsinexcessof110%oftheannualtargetlevel. set /forthbelo( x for such year, Edison shall be entitled to a bonus based on the savings related to all energy produced in excess of 110'% of the

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target output. Such savings shall be the difference between N replacement power costs and the fuel costs of the Units applicable

• I' to the energy representing output in excess of 110% of the target output. The bonus shall be equal to the full amount of such savings,to the extent those savings do not exceed the amount o[

credits previously paid pursuant to the preceding paragpsph and y y.

half such savings'to the extent such savings do exceed such cred-its. In determining l'f a bonus is earne6 all kWh output in any ;, ,

year up to 110% of target levels shall be considered normal out put. Then any output achieved in that year after 110% of the target output has been achieved shall be considered excess output ,

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• eligible for the bonus. t Anycredits,bonusesoradjustmentstobemadeaE"a result of the Output Guarantee shall be accomplished through operation of the fuel adjustment clause. .

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7 X33g-C Annual picavatthours cdmulhtiva4 cicavatthours 2 ' 1

., July-Dec'19t h 6,000 6 Woo b

b 1988% 11,000 17,000

% P 1995; " 13,200 '

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' Commonwealth Edison will propose methods \and procedures U j t hestimate replacement costs for power, and submit such proposal ,..

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to thesparties to this Memorandum for comment. All parties agree ,,

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3 d.bworktogitthertodevelopamuthall agre'aable approach.

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-svent that there are unre' solved disputes, the parties agree to kubmitthemattertotheICCforhearingandresciution. J <

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Cacacity Guarantee

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, . 9 The ' Cumulative Target ' -Level Gigawatthours as of July 1, h

f 1992, as set forth a' hove 1 ,

o in this paragraph 5, assumas that l Byron II abd Braidwoc(o I each will produce 25,273 gigawatthours during the period and that Braidwcod II will produce 21,304 {

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gig watthouro during the period. If, as of July 1, 1992, either Byron II or Brildwood I has produced less than 20% of its share of the cumu **/e Target level Gigawatthours, and as of such date, that Unit has become inoperable and it reasonably appears that the Unit will not operate in the foreseeable future, Edison shall be

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obligated to provide additional credits against costs used in computing fuel adjustment charges under Edison's retail rates.

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j Such credits 'viddra determined in accordance with Attachment D. '

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

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

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

• subject to FERC jurisdiction and have the " favored nations" rights set forth in Attachment E attached hereto. (Nothing contained herein shall be deemed to deprive the ICC of any authority it may have to approve contracts for purchase of'

, such power or to review the prudence of such' purchases); or

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

.I Edison has elected to purchase any amounts of power from Braidwood I pursuant to this option (b), Edison may, effective on July 1, 1997 or, if option (c) has been exercised, on July 1, 2000, reduce the amounts of power (in blocks of 100 megawatts) from Braidwood I which it must purchase, by giving notice of ,

such reduction 12 months prior to the effective date. (If Edison exercises the option to purchase the entire output of Braidwood II and option Edison c(c) has been exercised, annot reduce the amounts of power' purchased from Braidwood I on July 1, 2000.) The amount charged ,

to Edison will be reduced to reflect

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

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If Edison exercises this option (b)  !

and has not reduced the amount of power it has elected to purchase from Braidwood Unit I, it shall have a further option, exercisable on .

December 1, 1998, to purchase not less tha,n the entire output of Braidwood II during the period January 1, 2000 through the remain .

der of.its useful life. If Edison elects to purchase such output, the rate Edison will pay therefor shall be the greater of (1) the market

' value of power as determined with reference to third party, arms l I

length, long term firm power pur-chase contracts commencing approxi-  !

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

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

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

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

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

- effect. The percentage increase will be the lesser of i) one-half of the cumulative increase in the consumer Price Index for All Urban consumers, published monthly by the U.S. Department of Labor Bureau of Statistics, for Chica Northwestern Indiana,go, Illinois1,--

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

If Edison elects this option (c), -

the $55 million monthly fee payable to,the Subsidiary pursuant to this Paragraph 5 shall be adjusted to reflect the full amount of the -

increase, and the Output and Capaci-ty Guarantee provisions of this Paragraph 5 shall not apply during the period of the extension. In the

, event that this option (c) is exer-cised, then the deadline for exer-cising options (a) or (b) shall be extended to and including July 1, l m ?'~r ~:7 ' 1994=

Edison will select one of the above options as directed by the Icc. It is understood and agreed that the right to exer-cise options (a), (b) and (c) above, or any part of them, is to be Edison's under its agreement with the Subsidiary, but the determi-nation of whether or not such options should be exercised for the 1

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. -3 benefit of Edison's ratepayers shall rest with the ICC and the ICC shall direct Edison with regard to said options. From time to time Edison will institute proceedings before the ICC to obtain its direction and authority to exercise (or not exercise) such options within the time frame permitted for the exercise of said options.

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

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

If the Commission fails to direct Edison as to which option it is to elect on or before July 1, 1991 (or if option (c) is elected by July 1,1991, and the Commission subsequently fails }

l to further direct Edison with regard to the election of options )

(a) or (b) on or before July 1, 1994) and Edison has filed with i l

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

(i) Edison shall be deemed to have elected to contract to purchase the entire output of Byron II )

' for the remainder of its useful life and 50% of the !

entire output of Braidwood I for the remainder of its useful life, all effective as of the termi-nation of the Rate Mcratorium Period; (ii) Edison shall have no further options under this Memorandum; and (iii) The rates for power contracted for pursuant to subparagraph (1) above shall be determined as provided above with respect to output of Byron II ,

l and Braidwood I contracted for under option (b).

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REGULATORY AND JUDICIAL ACTIONS

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

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

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

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

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

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

'(vf Authorization for Edison to guaran-tea the Subsidiary's obligations and liabilit-ies with respect to safe operation of the Units.

(vi) Approval of rates reflecting the

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

(vii) Approval of a suitable modificatis.1 in Rider 19 to limit its availability in the case of changes in ownership of existing facilities.

(viii) A statement of intention not to oppose any reasonable proposal by Edison ,

1 during the Initial Rate Period to refinance securities or otherwise to revi:a !.ts capital structure so as to enhance the position of its i stockholders within the framework of the l revenues allowed Edison during the Initial f

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

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

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

(a) Braidwood construction case (b) staff investigation into Edi-son's future rates.

(c) staff investigation into effect of the 1986 tax reform act as to Edison (d) ~ pending Rate 1 restructuring

. (e) notice of inquiry into excess capacity (it being understoos

- that it shall be a satisfactory

. , resolution for~this purpose if the Commission's determination ,

has no application to Edison for the term of the Initial Rate Period or as its capacity may be deemed to be affected by purchases pursuant to option b

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

(f) pending fuel reconciliation proceedings

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e t (g) pending audits pertaining to Byron II and Braidwood I (h) Uniform fuel clause proceed-ings (it being undarstood that satisfactory resolution would preserve Edison's fuel clause in essentially its present form [with modifications re-quired under this agreement) for the Initial Rate Period including the right of the Commission to require Edison to operate on an economic dispatch basis). It is further agreed that duritig the Initial Rate

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

B. Timely grant of Nuclear Regulatory Commission approval of transfer of the Units and their 119-censes to the Subsidiary.

C. Timely grant of any necessary FERC approval of the

,, rates and transactions provided for in this Memo-randum.

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

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

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

COMMITMENTS OF THE PARTIES

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

?

F furtherance thereof before the ICC to implement the provisions of this Memorandum on or before February 6, 1987. The other. parties 1

to the Memorandum agree to L pport the terms of this Memorandum in any proceeding in which they are participants before the ICC, the NRC and the FERC. The parties agree that for the Initial Rate Period they will not take any action (whether before a regulatory body, the General Assembly or any other legislative body, or any court) that would prevent or require the undoing of any of the transactions contemplated by this agreement, it being understood, however, that- in Supreme Court Docket No. 63747, Peeele 21 thA State 21 Illinois gg Igl Egil I. Hartican, Attorney General y.

Illinois Commerce Commission 3rd Commonwealth Edison coneanV, the parties have presented their positions and have the discretion to determine what action to take in that case. The parties other than Edison upon proper notice authorize Edison to represent on their behalf before any regulatory body or court that they are signatories to"this agreement and have agreed to the regulatory action described in Paragraph 6. The parties recognize that Edison's agreement to limit the level of its rates or otherwise to

, adhere to the terms hereof is conditioned upon compliance with this Paragraph 7 by all other parties hereto. Edison's failure to accomplish the implementation of the settlement en or before September 1, 1987 shall discharge the parties hereto from all obligations with respect to the regulatory and judicial actions set out in Paragraph 6 hereof, provided, however, that if Edison  !

has extended the termination date set forth in Paragraph 8 to a date later than September 1, 1987, then such later date shall be

,e -t substituted for September 1, 1987 in this sentence. It is further understood that the parties may participate in generic dockets related to the subjects specified in subparagraphs A(x)(e) and (h) of Paragraph 6 hereof. Howevar, the results produced by these dockets shall not be used by any party in conflict with the representations related thereto in this Paragraph 7.

GENERAL

8. This understanding shall terminate if all regula-tory and judicial action contemplated herein has not occurred Prior to July 1,1987, except as otherwise provided in this Para-graph 8. Edison shall have the right to extend the deadline for 3

or waive any such action, subject to the limitations herein con- i tained. During the period of any such extension, Edison's rates shall provide cor charges no higher than the greater of (i) charges permitted under Edison's rates now in afkeet, or (ii) l charges under s'uch rates as they may be changed under Paragraph 2 or 3 hereof. No such extension shall operate to extend the termi-nation date of the Rate Moratorium Period, or the date by which

, options in Paragraph 5 may be exercised. No such waiver shall permit Edison to place in effect any rates which provide for n?,;2 charges higher than the greater of (i) charges permitted under Edison's rates now in effect, or (ii) charges under such rates as they may be changed under Paragraph 2 or 3 hereof. If Edison extends any deadline pursuant to this Paragraph 8, and this under-1 standing, nonetheless, thereaf ter terminates because regulatory or judicial action contemplated herein has not occurred prior to the

~19-

• b extended deadline, its rates now in effect shall be reinstated as of the date of termination. No such extension shall expire later than December 31, 1987. In addition, in the case of such a termi-nation, if during the period of the extension Edison places in effect a general rate increase, the output Guarantee provided under Paragraph 5 shall be considered to be in effect during such period. For that purpose the amount of output guaranteed shall be equal to 33 1/3 gigawatthours multiplied by the number of days the increase is in effect and the maximum fuel adjustment clause credit will be equal to $1,833,333 multiplied by such number of days. This understanding shall not be construed as preventing Edison from filing for a rate increase in respect of its invest-ment in and operating and maintenance costs associated with Byron II and Braidwood I and II prior to July 1, 1987, nor shall it operate to prevent the parties from contesting such applica-tion. Noincreasewhichmayresultfromanyapp51cationpermitted

~

by the precedin'g sentence shall become effective during the period of any extension of th'e July 1, 1987 deadline. Any such applica-tion for an increase will be withdrawn if the necessary regulatory i

,and judicial action has taken place by July 1, 1987 as that date may be extended as provided in this Paragraph 8.

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

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

p > .

i than because of Edison's fault), or (b) thereafter if Edison and at least two of the other parties to this Memorandum believe it likely that any such action will be invalidated, in whole or in part, Edison may terminate the understandings embodied herein and if Edison has already conveyed the Units to the Subsidiary, Edison shall have the right to cause the subsidiary to reconvey the Units to Edison. The Icc order approving the conveyance to the subsid-1 i

inry shall contain appropriate provisions approving such a recon-l voyance. Any such reconveyance shall be without prejudice to any party's rights to oppose and to raise all arguments and positions and to pursue procedures provided by law or regulation regarding "ratabasing" the Units and reflecting their costs in rates.

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

}

the Initial Rate Period. 1 1

I

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

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

• • • • provided for in this Memorandum, the Power Supply Agreement or any other governing document, or the terms or conditions there-of, shall not constitute a basis for a change in retail rates )

during the Initial Rate Period. This provision shall not be construed as modifying or in any manner limiting the condition imposed in Paragraph 6C.

e % emw O )

13. Edison agrees to take any action necessary to ensure that the Subsidiary, with respect to its own obligations, shall be bound by this Memorandum as if it were an original signa-tory. Edison will furnish evidence of the subsidiary's acceptance of the terms of this Memorandum.

l 1

Merorandum of Understanding dated this v1~4' day of l February, 1987.

Commonwealth Edison Company )

,, By t->^ O/MM1 faites d O'Connor, thairman e

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I I Memorandum of Understanding dated this ay of  !

t j February, 1987. i i  !

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I James R. Thompson, Governor, on behalf of the People of the State of Illinois By 1

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

The small Business Utility Advocate

,N 4 my b Willian G,f E a d i I

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e ,6 Memorandum of Understanding dated this day of Feb rua ry,1987.

The Governor's Office of Consumer Services

-BY ) /4 Alvin K. Grandys, Ph.D. /

/4 Director e

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

q Neil F. Hartigan, Attorney General, on be alf of the People of the

\ State of(: Illinois ,

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By / / .I^

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• b Memorandum of Understanding dated this d day of i February, 1987.

Richard M. Daley, State's Attorney, on behalf of the People of Cook County, Illinois i

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' Memorandum of Understanding dated this Z day of I

February, 1987. l l

l The Illinois Industrial Energy Consumers (IIEC) Pary Intervano in Docket 86-0249

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By /. ,'-- l Vf f FJJJDAiJ., ROBERTSON' Attorney for IIEC 4

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A?.tachmOnt A ELECTRICT!Y For the Oum and Visings usted am ILL C C.No.d Connmonwealth Sheets No. d. 5,4,7 and 8 Rew Sheet No. 9 Edison Coinpany "ad 'h' mae8'Parsind amuguous aserbary RATE 1. RESIDENTIAL SERVICE At altabRity.

Tids rese is oveGable to any mastener wing the Campany's electric servim far maidedal purposes.

Charges.

• Monthly Customer Charge.

July 1.1987 Through January 1.1939 December 31,1988 and ARer For Cwtamer asiding h:

. A budding samamms 3 or more dwelhng enins. . . . . . . . . . . . . . . . . . . . . S 3J0 8 3.d5 A budding eeum' ing 1 or 2 dwelLng uruu . . . . . . . . . . . . . . . . . . . . . . . 3 9.10 8 8.06 bod &ngs mannahng I or 2 dwe!!ing anns shad include. but eat be limiiad to, arummus sammerJy referred to as single famdy desached houses, single famDy anached bauses. rom houses. teos houses. semidstased houses. dgleses two-flats, and two fainty houses.

On Deaumber 10, 1964, ne Campany had assigned aD susdng Rau I cumaman to one af the eherge danificadans described above. If any of these customers aforms the Company that this inidal classificadan is acorrea, the Company. ope wenficadan, will place the customer in the appropnam clusticanon but wG) ma ismae any afumi

• EnerEy Charge.

July 1.1987 Through January 1.1939 December 31.1988 and Aner Eumme h fht Garge per kilowenhour for farst 400 kDomsehours suppbed in she snauh. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  !!.964s ll.095s Oarge pr kDowouhour for aD kDomauhoun over 400 suppLed in she momh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.770s 16.1024 h Wm Chs'ge per kuowtthour far farst 4M kDowtahaurs suppbed in the meth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II.964s 11.6954 i Charge per kDowsuhour for e3 kDowanhours over 400 asppbed in she mamh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.392s 3.306c ,

For the purposes hereof, the Summer Meths shad be she sustomer's fire mandsly baling priod wah an endans meier nades daw on or afur June 15 and the ihme succeedeg snamh)y baleg penads The fuel adjusement sharge er esudis provided for in Radar 20 shad spply to nD kDowauhours sqphed h the momh.

Late Payment Charge.

The lais payment charge pnmdsd far in the Terms ed Candidas d this Schedule of Raias shad be appLcable to aD earges under this raie.

Light Bulb Service.

The above charges do mai include light bulb service. The charge for such service shad be 0.174e per kDomsuhour for the fint {

300 kDowauhoun supphed in the rnamh. Light bulb service is described in Rider 10 and is opuanal wuh the cusamer.

Minimum Charge.

+,y The. minimum monthly charge shad be the Momhly Customer Charge.

" Term'oISidiie.

The sustomer's term of service shad commence when the Company begins to supply service hemmder and shad candnue act marc than ten dsys aher nadce is reatived to decanunus servist.

Three. Phase Service.

Three. phase service is evsDable under this rete. When e three. phase secondary supply is act ovaDable from the Campany's f

distribusan system adjacent to the sustomer's propeny, the necessary pnmary and secondary saiensions *01 he fumis)nd by da Company subjea to the provisians af Rader 2.

i (Cednued on Shees Na 10)

Date Enecthe: Jut;1,1987 Asterisk (*)indicales change 1 sued by C. P. Rifakes. Vice President.

Post Omce Box 767. Chicago, blinois 60690

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Attachter.t B s'

ELECTRICfTY l Far the Citle and Villsam kmed en ILL.C.C.So s Commonaesttb Sheets Nos. 4,5,6,7 and g Reila,s Sh,e Se. 2r I' EdNm Company and ** imeco'pomud corosvous iemicry RATE 6. GENERAL SERYlCE Applicabluty.

l Escept as pc=adcd in Raie 6L, this rate is applicable to any commercal. mdustrial. or sovernmental sustomer with a l

Maximum Demand of kan than 1.000 kilows:u who uses the Company's eleetne service bertunder for d squiremenu j Diria surrant aquiremenu povided under another rait immedaiely pnot to September 2.1975, wD). however, also be povvied hereunder.

General Servke - Tiene of Des. ,

Tene of day charges shd apply to (1) any customer with a Maximum Demand of 500 kilowatts, but less than 1,000 uomatu. I in ihree of the 12 months pecedeg the bdhng enonth, wie of mhich occun during the ihme months precedeg the bahng month, (2) suecasors to cusiomers served under these charges snmedately prior to the date of succession whose saurnaiad Maumwn Demands meet the demand rsquurmenu in elause (1) above, (3) eew customers whose estiinated Maumurn f

Demarids meet the demand mquirements in clause (1) above, and (s) any. customer previaualy buled bertunder punuant to clauses (1) or (21 except as ctherwise provided below.

Thew charges ahd noi be appLesbk to customers or their successon with clearic space headng iding service under the Heaung wah Ligh' Provuien of* Rader 2.5 prior to November 23. 1977, except open wriam appLcanon by the customer no the Company.

If a customer at one time was served pursuant to (1) above on Genera! Scaica - Time of Day and has a Masimum Demand which has nos caraaded 200 kDowans se any month of the to Jw month period preending the buling month, such customer may eket in wriuen ayLcadon to the Company, io be served on General Service. Geners! Service - Time of Day ahd ecs again is enlabh trd such natomer qualfia foe such rue under the seguiremenu of General Service - Tune of Day.

General Serske.

General service charges ahd sply to a3 other cusiamen quahtying for acrvice mder this rate.

Charges.

Cencrat Servke - Time of Ds).

• Monthly Customer Charge.

The Monthly Custaner Charge shd be 519.59.

• Dcinand Charge.

Summer All Other Months Months

$15 06 Si1.M per kilosau for d kilo.aus of Maurnwn Demand for the month.

For the. M bereof, the Summer Months shall be $e customer's first monthly bahns ptried wish an andmg meter readmg data on or afie Jes 15 and the three succecang irwnshly buLng persods.

• Energy Charge. .

6.560e*per lbowauhour for d Howsuhaan suppbed durma Ped Periods.

3.!!!s per Wo=auhaar for d Womanhoun suppled earms Off Paal Penada The fuel adjusenet charge or cruda provided for m Rade 20 shd only to su kDowachoun sgphadan the month.

General Servke.

• Monthly e-a-r Charge.

The Monthly Customer Charge shd be 59.38

• Danand Charge.

/ Summer All Other Months Months

$15.06 511.D per kiloman for d Luowntu of Maxim 6 n Demand for the meth.

For the pwposes hereof, the summer Mo'nths shat! be the customer's fint monthly bahng period with an endes meter rsades date r- *:..t June 15 and the three succeedes monthly bahn penods.

• In accorece with the Appbcanon of Demand Charge povisions of this rate, there shd be no demand charge as such for certain omd cunemen but in Leu thertof, such czatamen shall pay 6.409s pr kDowanbour m Summer Months and 5277s pr uomaubour e d asher months e addaam to the energy chages set fonh below.

• Energy Charge.

Ellowatthours Sepplied in the Month 5.130e pr Womanheur for the first ................ ............. 30.000 3.937 pr Gowanhout for the nea .............................. 470.000 3.934s pr kDownshour for au over .............................. 500.000 The for.) adjustment charge or enda ponded for m Rwier 20 shd saly to 2 Wo auhoun sughed m the mmA (Conunued cri Sheet No. 25)

Date Effeethe: July 1.1937 A;.erisk (*) indicares change Isrued by G. P. RJfakes, Vke President.

Pos Omce Box 767,Chkago, Illinois 60690

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I2.ZCTRICTTY EL1, C c. N, 4 I im W m u Terwthe Ciries sad Nes.4.s.g, ses%luskes g ustad(Cameelung as lla p.n med Sent nie tu q Commoe=eshh ud & uraticorpotsud contiguow termory Idisco Company RATE 8, CENERAL SERVICE (Contansed from Sheet No 14)

1. ate Paymest Charge.

The late payment charge provided for m the Tertu and Cooditions of thu Sebedule of R under this rate Minimea Charps The mirumum nonthly charge shall be the monthly ewtomer chstge

'Martmas Charge.

For cuswmers math demand ineters. the average cost of elec such guaranteed charge sha!! not opersu to adun & Cutomer's bill to an amount leu than Matisse Dessand.

For General Service-Time of Dey custos ers the muimum damsad an amp mooth sha tabbshed d une.g the peak periods in such mostb Tor General Service customen the inssimum demand shall be the highest Mminute Appbestles of Demand Charge.

The Compu) shall provide a demarad meter and the dernarid charge d or shall monthlyapply whe escoeds 2.000 blomatthours in neh of too sweeessive montMy bilbeg penods or if his mas kilon atthout use is estimated as in eseesa of hun thenof kilos se pnate sneter natals, be provided eithf h 12a month demand meter pened A customer the a and bi than 12 months unleu be becomes utitled to a demard meter pnor to the erd o t e entitled to a demand meter shall not be required to pay rental or o&r separsu charges for such m Whethes ce act a detr.and meter is installed,the charge sa !>eu of dernand charge 0 shall a semer paying rental for o derrnnd meter in secordance baling penod, or

• and shall continue to apply until the Cunomer's use esends 2.000 bles atthours in two su hu demand eteveds ten blem stu so two successive montMy bilhng penoda

'Meusrement of Dessad and K11susethears Seppued. d shall When two or mon snetenrig instal 4tions ,

i arelativeprovsded demand mner, the on the thu (s) to came the demand at se meunt.g is.s:allation a reg.sured by an indicat ng or cumu demed at such instalisuon se each Moseste pened of d Where mected load af such ecaneesed load u two kiloostu b or lensh and su h d shallbe deter-then an two or more e stthour intunng iuta!!stions determination ofon the the bours ll Cus sasullet on sieved $300 in the bi!hng month ud are not muered in such a manner u to permit dunns

• bach they we= dehvered,for purposes of applying hthe 12me t dehsered in peak pnods 11 the emeagy uneh at such autallation es $300 Lilesart leu se of da be eensedend to have .

the bihts month, a chs se of 4 021e per blosstabour sisti apply to 1*pon request,the Compey mil provide unmetered serviet for connected f bilbr:# er surt loa of the Customer's equipment as continuous or is ergularl) scheduled on an stnual basis coars. the reenthly kiloostthours aball tar deurmined by multiplyir.g dthe divid,tg rated b3 esttage 1000 All (base d

apprornate data) of the coenected loads by one twelfth of the a (Continued on Ebert No 26)

Dsit Efeerive.Ortober 19.1988

' Tued alth the Illweis Cetemerev Centeission es Detsber g8,ltl8 teseed e G P Males.bre Presidest.

Pass Off,ev 5es 747.Chiesgo.111saeu lette lassed penstat to Order of Dhaels CommerevCostnassies estered October 24.1985 la Case Nos Asurmh ('l ladiesus c6asse ex -

7 _

j~ ^e A A9,tBCh".ent C I- ELECTRICffY j For the Otte and Vittage usied on 11.1.. C. C. No. 4

! Commonwculth Shnas Nes. d,5,6,7 and 8 Re&d Shwi No. 2A 4 Edlaon Company aad the **a'P'**d **8va"8 8rnary RATE 6L, LARGE GENERAL SERVICE Appfleshmiy.

Tids rou is appbcable to (1) ony mmmercial, edustna!, er govemmenial eusiemer with e Maximen Demand af 1,000 kDowens or more a thru of the 12 mon $s pmadeg the billeg month. G) successors to estameri served eder these cha'gts immedsuly prior to the deu of sucesssion whose astensisd Maaimum Demands sness the demand requirements in clause (1) l sbove. O) pem assumers whose estimated Maumum Demands meet ths demand sequiremenu in clause (1) above, and (4) any sumomer previously bided hereunder pursuant to sisusu (1) or Q), eassps as otherwise prmded below.

( If a customer et one tune was served pursuani io 0) above en Large General Service-Tame of Day aid has a Mambnum Demand thich has noi encanded 200 kdomens in any mons of the 12 mens pened prundmg the bdhng momh, such sustomer ms) eket, bi entun appLcade to me Company, to be served en Rau 6, Geners) servies. Rau 6L la'Be Censral Service. Tone of Day, shd not asam he appbcable ind! such metamer quaLfas for ad rue oder aimes 0) above.

The Lerge Ganara! Service-Heat wis Ught charges shd be apphoble ordy to esterners er their eucasesori with sluvic space hemag ethns acavies eder the Headng wuh Ughi provisions of beer 25 prior to November 23,1977.

A large General Service-Hess with Ught cusumer will be dowed no take large General Servie-Time of Day service upe wriuen oppi,cadan to the Compsey. Once changed to Large General Service-Tune of Dey servios, those eusiamers or mes sucesseori mal om be aDowed to ruwm in Large General Servise-Heat wah IJght Charges.

Large General Servlee Thne of Day.

• Monnt; Customer Charge.

The Monthly Customer Chaage shd be $547.06

• Demand Charge.

Kilowetts of

$enomer AN Osher Masimum Demand Meashe Menos for the Mene 51106 511.77 per uom ou for the fait ............................. 10,000 6J5 106 per uo.su for aD wer ............................. 10,000 For the purposes hereof, se Summer Months shd be the sustomer's (wst monthly bahng penal eith an ending guur read.ng dau eg er stur June 15 and the ihree suecaedes manihty bilLng pened6

• Energy' Charge.

6560s per Womauheur for d k2owsahauri suppLed danns Peak Panods ill!#,per Womanhour for d kDomsahauri suppbed during Off. Peak Penads.

The fuel adiosenes charge or seda prmded for m Raser 20 shad sypy no d uo.nuhours suppbed in the sinna

• l i

Large General Service-West wish IJght, l

• Monthly Costamer Cberge.

The Manihty Customer Qarge ihd be 1547.06

• Demand Chargs

/ Sammer As Other Menes Manihs ,

1 31106 $11.77 per Howau for d uowau of Maumum Dunand for the unands. j For the pwposu hereof, the Suminer Months shad be the customer's nrst monthly bahrig pened with an andmg meur ruirg l dau en er afur June !$ and the ihree succer.deg mard)y billeg panods.

1

• Energy Charge.

Dowatthours Supplied in she Monik il30s per kDo enhour for the fasi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 j 3.987s per kDowanhour for the neat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470,000 3 934s per uomsahaur for sD oust ................................. $00,000 7he fuel adpssenent shstge er credia provided for m Lder 20 shd apply to aD Wom euhours suppbed in the month l

(Conunued an Sheet Na 29)

Date EMeetive: Jut;1.1987 Asterisk (*) indicates change Imued by C. P, Rifakes, Vice President, Post Omer Bos 767 Chicago, tilinois 60690 N

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ELECTRICfW Tor the Cities and Vilas3m llaed on II.L. C. C. No. A Shesu Nos. A 5,4 7 and 8 21st Revtsed Sheet No. 29 Cominoswit!th (CsoccLes 2ah Revued shea No 29) and the ir.ecor;onwd sonuseous terruory Edison Company RATE 6L. LARGE GENERAL SER\1CE (Conunus4 from Shen No. Og)

Late Permer Charge.

The lata payment charge providad for e ibe Terms and Condaions of h SchadJs of Raus ahd be applicable in au charges orderedstsu.

Mlatmum Charge.

Tk meanian month)y charge shad be the methjy cuncrno sharge.

MaJdmven Charga The averige ene of s;acmeiry barwunder a sny monA, aclusive of the Menth}y Cunomer Charge, shad not entsad h sum of 19.736s and the fuel adjustment per Womsuhour provided, however, that euch guaruuad charge stuu not eterste o seduce the Qamorocr's ba: to an arnount less than the ensurnum charge.

• Mazfmum Demand. l Eacept as noud in the partriph below. As maximum demand in any saans ahd be the highest 34 minute demand /

enablishe.d durus the pak pence! in such mrth sacr;e that, for naswmers with 30.rsinute demands sacaedes 1,500 Uowstu in three of the 12 anonse pescedeg the b2' rg mons. the tr uimum dewand shall be the aversge of the thne l lughest 30 mmes demands asubbh:4 de.ng the pak priods in such snonA, not mots than one such demand to bc l utad frren any ans day.

For cianomers takirs servna under Large Ocnen! Service - Headng with Light provision of M riu the maxirnuro dema.o l shall be the 6 hen 30 m.ngu demand establ.shed at any time de.rg such month norps that, for custorners sie 30.mmuu l demands esades 1,$00 Woesu in thess of the 12 rnones pesca4eg the bC3irig month, the mu.irnum demand shsU be te evengt of the erse 1sghest demands e.nsbhshed during the monA, not more than ime such demand to be selecud from ]

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Measurement of Denand and KBowstthours Supplied.

j Where two or mort meurtng insul'aums an provided oc the Customer's pnmises, tbs demand in arty 34 minute priod shd I

bs determined by addeg togeset the separate kr ands as sach rnmenng innalladon durits ruch 30. minute period esce;n hat (s) to case the dsmand as ery encerra ins @.syon is esgirtend by as ind canng or cumidadvs demand acur, es demand as such irtstallation in sach 30-minuu period c( stiy month shan be assumed to be the sarne as the highest demand in acy 30cevis priod of ruch month, and (b) the demand at ariy inadaGon may be anstrned to be 75 percent of the sonneac4 bd if such connecud bd is two kDo sca or less, sad such dcmand is to be added to a seursd demand. %hers there are =o or more ma:Acer insunts inrCations, the Mosanheurs suppLtd shad be decrmined by adding togescr the kDomenbcun meured at sach a edaVan, provided that then the LDowsahours at any such innal:adoe esecad 5.500 in the ba'Jng snortth and ars not meured in each a mannes es to permit deurminaden of the boort dunng which shey esrs delivert4, for prpoise of app?>rg the time.of<!ay yovisions of this raw, such Housuhours sha5 be considc's PJoer 6 tb cost of any facLues so esquirsd, However, no cruona! faclues cha ges shar app?y to faciLnes cuars and in plaos at the tone tk Cusurner qualass far servics bemnder (Conunued im Shen No 30)

Date Errees: Deremtier L 1936 Thed wuh the litanais Commerte Commiston en Octocar 17,198d Isrusef by C. p. RJfakes, %ce P*elderit.

Asternsk (*) indicases change Pos Omes Bon 167, Chicago.Dhnots 6000

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Attachment D l l

The amount of the credit which is to be made in respect l of either Byron II or Braidwood I Unit if it meets the criteria for capacity guarantee credits set forth in Paragraph 5 of the l l l l Memorandum of Understanding shall be determined by making the l 1

calculations described below. . I A. From the aggregate amount of fixed fees paid

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i pursuant to Paragraph 5 of the Memorandum of l

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

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

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

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

w e 4 b

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

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(

Attachrent E "Most Tavored Nations",

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

(A) If Edison 1s purchasing power under a Contract with the subsidiary (" Pre-Existing Edison Contract") and the subsidiary enters into a contract to sell power to a Third Party (" Third Party Contract") which is comparable to the Pre-Existing Edison contract, but contains more favorable prices or payment terms, Edison may elect to have the price and payment terms of the Third Party Contract substituted for the prices and payment terms of the Pre-Existing Edison contract. A Third Party Contract shall be considerpd to be " comparable" only ift ,

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

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

Edison shall have no right to substitute only the price 9I payment terms of the Third Party Contract for those of the Pre-l l

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Existing Edison Contract, it being understood that Edison's elec- l tion under this paragraph is limited to substitution of both the payment And price terms of the Third Party contract for those of the Pre-Existing Contract.

B. If the Subsidiary enters into a Third Party Con-  :

tract and Edison advises Subsidiary that it desires to purchase l

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

i Subsidiary. No such comparable contract shall rel,ieve Edison of l

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any of its obligations under any Pre-Existing Edison Contract. l Upon the execution of any Third Party Contract, the Subsidiary will give Edison notice of same and furnish copy of same to Edison within 30 days of the execution of said Third Party Contract.

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FACILITIES TPANSTER AGREEMENT 1

i Cc =onwealth Edison Co:pany ("Idison") and I

("Subsidimry") hereby agree as follows:

1. The conveyan e of facilities which is the subject of this Agreement takes place in ispl.Eentstien of a Memorandu of Understanding a:eng Cct=enwealth Edison Cc=pany, the Governor of i the State of Illinois, the Attorney General of the State of Illinois, the State's Attorney of Cook County, the Governor's Cffice of Consumer Services, the Lxall Business Utility Advocate, and certain industrial custeners of Cc :enwealth Edison Co=pany who are party intervencrs in a proceeding before the Illinois Com=erce Commission bearing the Docket No. 86-0249. The Me:crandu= ,of Understanding entered into by the above parties cente= plates the settlement of a variety of contested proceedings before the Illinois censerce Cc: ission and the courts in which the continued constructic'n of Braidwcod Unit 2 is at issue as well .

as the rates which Edisen will charge. The agree =ent cente= plates the conveyance of the facilities commenly known as Byron Unit 2 and Braidwood Units 1 and 2 (collectively, the " Units") to subsidiary. Subsidiary's rates will be regulated by the Federal Energy Regulatory ce==ission. A rate increase of approxi=ately 13% in Idisen's retail base rates with a five-year =orateriu en rate increases thereafter is also provided for. Accordingly, Idison vill convey the Units to subsidiary. The real estate and facilities ecnstituting the Units are ==re particularly described Exhibit B

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

' the continued operation and maintenance of that Unit on the Byron  !

i Station Site described in Appendix 1. f

2. The conveyance will be evidenced by suitable I

j quitclaim deeds and such bills of sale and other documents as Subsidiary may reasonably require. Where appropriate, such documents shall reflect the fact that the Units are and will remain subject to the lien of the mortgage securing Edison's first mortgage bonds. Such conveyance shall be subject to a reservation to Edison of such rights as may be necessary or appropriate, to enable Edison, as an NRC licensee, to comply with all NRC requirements, including the authority to exclude persons from the premises conveyed to Subsidiary so as to meet NRC security, emergency planning and radiation protection requirements as described in Section 2.1 of the Safety Evaluation Report issued by the Nuclear Regulatory Commission ("NRC") for Byron dated February , 1982, and the Safety Evaluation Report for Braidwood dated December, 1983. Such conveyance shall also be subject to a reservation to Edison of such rights as may be necessary or

,_ , ,3, appropriate to enable Edison to continue to operate and maintain facilities on the Braidwood Station Site described in Appendix 1, which will not be conveyed to subsidiary.

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

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

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

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

5. This Agreement shall become effective when Edison notifies subsidiary that all governmental approvals and actions required by the terms of the Memorandum of Understanding between Edison and various other parties, dated February 3, 1987, have been obtained or waived by Edison. Nothing contained herein shall be construed as permitting Edison to waive approval by the u_...

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

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

1987.

Executed this day of ,

COMMONWEALTH EDISON COMPANY By:

Its:

[ SUBSIDIARY)

By:

Its:

se

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APPENDIX I ]

Facilities Transfer Agreement j 1

1. As used herein, the " Byron Station Site" is the land in Ogle County conveyed by the following deeds: l Parcel 1 Warranty Deed (WD) #424625, Recorded 4-23-73, BK277, PG66 Trustee's Dead (TR's D) #454533, Recorded 12-30-76, BK287, PG93 Quitclain Dead (QCD) #427835, Recorded 8-30-73, BK278,, PG362 Parcel 2 WD $422068, Recorded 1-10-73, BK276, PG34 Parcel 3 WD $425182, Recorded 5-11-73, BK277, PG319 Parcel 4 f WD $428267, Recorded 9-20-73, BK278, PG548 .

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Parcel 5 i

WD $42'3820, Recorded 3-20-73, BK276, PG873 l

Parcels 6 and 20 WD $424166, Recorded 4-2-73, BK276, PG1040 -

WD $423085, Recorded'2-22-73, BK276, PG489 Parcel 7 WD $425238, Recorded 5-14-73, BK277, PG359 Parcel 8 WD $426363, Recorded 6-28-73, BK277, PG870 1 Parcel 9 f Conservator's Deed $422066, Recorded 1-10-73, BK276, PG32 Parcel 10 WD $426441, Recorded 7-2-73, BK277, PG901

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1 Parcel 11 TR's D #425183, Recorded 5-11-73, BK277, PG320 Parcel 13 WD #425179, Recorded 5-11-73, BK277, PG316 Parcel 14 WD #422159, Recorded 1-15-73, BK276, PG73 Parcel 15 WD #422158, Recorded 1-15-73, BK276, PG72 Parcel 19 WD #426182, Recorded 6-21-73, BK277, PG774 QCD #426183, Recorded 6-21-73, BK277, PG776 Parcel 21 TR's D #431590, Recorded 3-15-74, BK279, PG785 Parcel 22 WD #423572, Recorded 3-12-73, BK276, PG750 Parcel 23 WD#456439, Recorded 7-2-73, BK277, PG900 Parcel 24 QCD #430565, Recorded 1-24-74, BK279, PG284 j Parcel 25 WD in TR #423087, Recorded 2-22-73, BK276, PG493 Parcel 26 WD in TR #423086, Recorded 2-22-73, BK276, PG491 Parcel 27 WD in TR #424181, Recorded 4-3-73, BK276, PG1048 Parcel 28 TR's D #459784, Recorded 7-6-77, BK288, PG650 L~j i. g ,

. i Parcel 29  ;

WD (462001, Recorded 9-21-77, BK289, PG198 Parcel 30

( WD $469580, Recorded 6-21-78, BK291, PG72 Parcel 31 TR's D #439779, Recorded 4-17-75, BK282, PG669 Parcel 32 I

WD #433435, Recorded 5-31-74, BK280, PG444 l

Parcel 32-1 *

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WD #454954, Recorded 1-13-77, BK287, PG255 l Parcel 33 TR's D #453474, Recorded 11-18-76, BK286, PG900 Parcel 1RR (Railroad)

WD $437173, Recorded 11-22-74, BK281, PG924 Parcel 2RR WD #43'8600, Recorded 2-14-75, BK282, PG256 Parcel 3RR WD (434263, Recorded,7-3-74, BK280, PG833 Parcels 4RR, 4RRA, and 4RRB WD-in TR $431897, Recorded 4-1-74, BK279, PG909 WD in TR $431899, Recorded 4-1-74, BK279, PG913 TR's D $443723, Recorded 10-21-75, BK283, PG938 Parcel 5RR WD $436961, Recorded 11-12-74, BK281, PG862 Parcel 6RR WD $433434, Recorded 5-31-74, BK280, PG442 Parcel 7RR l l

WD $437753, Recorded 12-31-74, BK281, PG1149 l QCD $437754, Recorded 12-31-74, BK281, PG1151 l

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Parcels 8RR, 8RRA, and SRRB WD #436594, Recorded 10-24-74, BK281, PG711 QCD #436595, Recorded 10-24-74, BK281, PG713 WD in TR $436596,_ Recorded 10-24-74, BK281, PG715 g

Parcels 9RR and 9RRA WD $438239, Recorded 1-23-75, BK282, PG145 QCD #438240, Recorded 1-23-75, BK282, PG147 WD in TR #438238, Recorded 1-23-75, BK282, PG143 Parcels 10RR, 10RRA, and 10RRB TR's D $436593, Recorded 10-24-74, BK281, PG709 WD in TR $431560, Recorded 3-14-74, BK279, PG771 Parcel 11RR WD $436592, Recorded 10-24-74, BK281, PG708 ,

1 Parcel 12RR QCD $502362, Recorded 7-1-82, BK299, PG111-115 i

2. As used herein, the "Braidwood Station Site" is the land j i

conveyed by the following deeds:

Parcel 1 Special WD (R73-33682, Recorded 11-7-73, Will County Parcel 2 and Parcel 1 Corridor special WD $R75-04282, Recorded 2-21-75, Will County QCD tR75-07989, Recorded 4-9-75, Will County Parcel 3

- ggar WD_fR73-00389, Recorded 1-4-73, Will County Parcel 4 I l

I QCD (R73-00320, Recorded 1-4-73, Will County QCD (R73-00321, Recorded 1-4-73, Will County

- QCD $R73-00322, Recorded 1-4-73, Will County QCD $R73-00323, Recorded 1-4-73, Will County HD #R76-06641, Recorded 3-11-76, Fill County l

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

WD #R74-28701, Recorded 11-18-74, Will County I

Parcel 9 TR's D $R76-11403, Recorded 4-22-76, Will County Parcel 10 TR's D (R74-10641, Recorded 5-9-74, Will County Parcel 11 TR's D #R74-02647, Recorded 2-1-74, Will County Parcel 12 Special WD #R74-10086, Recorded 5-3-74, Will County l Parcel 13 -

QCD $R73-09343, Recorded 4-4-73, Will County Parcel 14 Special WD #R73-12394, Recorded 5-2-73, Will County Parcels 15, 16 and 38 Special WD $73-11350, Recorded 11-8-73, Kankakee County Parcel 17 Special WD (R74-10087, Recorded 5-3-74, Will County Parcel 18 WD (R72-33692, Recorded 11-16-72, Will County

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l Parcel 19 WD WR73-12393, Recorded 5-2-73, Will County )

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Parcel 20 WD #R73-28751, Recorded 9-20-73, Will County Parcel 21  ;

TR's D #R75-000787, Recorded 1-10-75, Will County i

Parcel 22 WD (R75-13721, Recorded 6-6-75, Will County Parcel 23 WD #238349, Recorded 4-17-75, BK328, PG787, Grundy County Parcel 24 WD #239424, Recorded 6-26-75, BK329, PG260, Grundy County ,

Parcel 25 WD $247760, Recorded 1-27-77, BK342, PG610, Grundy County Parcel 25-1 Railroad Spur Title in Trust 45553, CT&T Co.

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

Parcel 27

'7D #73-4771, Recorded 5-25-73, Kankakee County QCD #73-4774, Recorded 5-25-93, Kankakee County QCD #73-4775, Recorded 5-25-73, Kankakee County QCD $73-4776, Recorded 5-25-73, Kankakee County QCD $73-4777, Recorded 5-25-73, Kankakee County QCD #73-4778, Recorded 5-25-73, Kankakee County WD #73-4779, Recorded 5-25-73, Kankakee County WD $73-4780, Recorded 5-25-73, Kankakee County WD $73-4781, Recorded 5-25-73, Kankakee County QCD #73-4782, Recorded 5-25-7,3, Xankakee County u... --

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Parcel 28 WD #73-76, Recorded 1-4-73, Kankakee County Parcel 29 WD #72-10952, Recorded 11-17-72, Kankakee County Parcel 30 WD $72-10954, Recorded 11-17-72, Kankakee County Parcel 31 WD $73-2911, Recorded 4-4-73, Kankakee County i

Parcel 32

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WD #73-772, Recorded 1-26-73, Kankakee County

. Parcel 33 WD #72-6651, Recorded 7-26-72, Kankakee County Parcel 34 WD $73-75, Recorded 1-4-73, Kankakee County Parcel 35 WD #72-9224, Recorded 10-3-72, Kankakee County Parcel 36 WD $72-9223, Recorded 10-3-72, Kankakee County ,

Parcel 37 Special WD #75-1247, Recorded 2-24-75, Kankakee County j Parcel 39 Conservator's Dead $73-5184, Recorded 6-4-73, Kankakee County f Parcel 2 Cor.*idor TR's D #R76-16535, Recorded 6-3-76, Will County )

Parcel 3 Corridor )

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WD (H73-31738, Recorded 10-18-73, Will County l

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. o-Parcel 4 Corridor WD #R73-36061, Recorded 12-6-73, Will County Parcel 5 Corridor WD (R74-01538, Recorded 1-18-74, Will County Parcel 6 Corridor Easement - See Braidwood - Wilton Center R/W, Parcel 6 Parcel 7 Corridor  !

WD (R73-26439, Recorded 8-29-73, Will County QCD #R73-26440, Recorded 8-29-73, Will County Parcel 8 Corridor WD (R74-02644, Recorded 2-1-74, Will County Parcel 9 Corridor WD (R74-21461, Recorded B-29-74, Will County Parcel 10 Corridor i WD (R75-07305, Recorded 4-1-75, Will County Parcel 11 Corridor TR's D (R75-07303, Recorded 4-1-75, Will County Parcel 12 Corridor TR's D (R82-06274, Recorded 3-29-82, Will County

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

needed replacements, modifications, additions, retrofits or similar improvements to the equipment and structures constituting Byron Unit 2, and (ii) making such use of the Byron Station Site as is appropriate in connection with the retirement and 1

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decommissioning of such equipment and structures.

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

a. Reactor Containment

b. Reactor Vessel

c. Reactor internals including control rod drive mechanisms, instrumentation and detectors, pressurizers and steam generator including separator and dryer. 1

d. Cranes and Heists used solely in connection  !

with operation of the Unit

e. Main and Misc. Instrument and Control Panels ]

f. Piping, including valves and supports used  ;

solely in connection with operation of the {

Unit j

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

h. Turbine (including foundation) 1.- Generator (including foundation) ,

j. Condenser

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

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

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

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m ..

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

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DIAGRAM 1____

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5 I POWER SUPPLY AGREEMENT BETWEEN

[ SUBSIDIARY)

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

(" Edison"),

WITNESSETH:

WHERIAS, (Subsidiary] shall own certain electric generating units commonly known as Byron Unit 2, Braidwood Unit 1 and Braidwood Unit 2 (the " Units"); and WHEREAS, Edison is a public utility engaged in, among other businesses, the generation, purchase, transmission, distri-e bution and sale of electric power and energy at wholesale and retail; and WHEREAS, (Subsidiary] has agreed to sell to Edison power )

and energy available to (Subsidiary] from the Units, and Edison has agreed to join with (Subsidiary) in executing an agreement that will set forth in detail the terms and conditions for the sale of such power and energy by (Subsidiary) to Edison; and WHEREAS, Byron Unit 2 and Braidwood Unit 1 are expected ,

to be placed in service on or before July 1, 1987; e

Exhibit C

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

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

1.2 TERM. This Agreement will have an Initial Term beginning on the Effective Date hereof continuing through and including June 30, 1992. The Initial Term of this Agreement is subject to extension pursuant to the provisions of Section 5.4 of this Agreement. The parties recognize that the date for exercise of the option relative to Braidwood 2 capacity provided in subparagraph (ii) of Section 5.3 hereof falls outside such Initial Term, but nevertheless survives.

ARTICLE II UNIT CAPACITY SALE AND RESERVE RESPONSIBILITY l 8

2.1 UNIT CAPACITY SALE. During the Initial Term of this ,

Agreement (and any extension of such Initial Term pursuant to l k

Section 5.4 of this Agreement), [ Subsidiary] shall make available to Edison all the power and energy available from each of the Units from time to time and at any time for j Edison's own use or resale to others.

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

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

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

4.2 ENERGY CHARGES. For each kilowatthour of energy delivered to Edison hereunder in any month Edison shall pay (Subsidiary) the cost of fuel (including applicable costs of leased nuclear fuel) incurred in such month to produce the energy purchamed by Edison, such cost of fuel to be calculated in a manner consistent with the provisions of Edison's Illinois Commerce Commission ("ICC") fuel adjustment clause. If, in any of the periods listed on the table set forth below, (subsidiary) produces energy from the Units in excess of l

• I e n

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

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

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

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

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

period shall (Subsidiary) become eligible for Bonus Energy i compensation.

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TARGET LEVELS Period Cumulative Period Gicavatthours gic% watthours i

July-Dec 1987 6,000 6,000 1988 11,000 17,000 l 1989 13,200 30,200 1990- 16,100 46,300 1991 18,000 64,300 Jan-June 1992 7,550 71,850 The savings deemed to be realized by Edison from the production of Bonus Energy shall be the difference between the fuel cost. incurred by (subsidiary) in producing Bonus Energy and the cost Edison would have incurred in replacing such Bonus Energy. Edison,'in conformity to the Memorandum of Understanding, shall determine the value of such rep 1* ace-ment power. The additional Bonus Energy compensation to which (subsidiary) may be entitled shall'ba determined no later,than 30 days following the and of the period to which such Bonus Energy compensation relates. Any such Bonus Energy compensation shall be billed to Edison in equal monthly installments over the 12 months succeeding the month in which such determination is made.

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

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

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

5.2 MOST FAVORED NATION STATUS-(Option a). During the period

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

Nothing contained in this section 5.2 shall be deemed to

,,, y.7 , ,.. deprive the ICC of any authority it may have to approve contracts for the purchase of such power and energy or to review the prudence of such purchases. If the FERC is without or disclaims jurisdiction with respect to the rates at which such sales are to be made by (Subsidiary) to Edison,

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o I

- the rates agreed upon by the parties shall be submitted to t

the ICC for review under section 7-101 of the Illinois Public Utilities Act and the rates agreed upon by the parties, as they may be modified by the ICC upon review, shall be the basis upon which Edison shall compensate (Subsidiary).

5.3 NEW AGREEMENT (Option b). (i) Edison shall have the option to contract with (Subsidiary) to purchase not less than the entire output of Byron Unit 2 for the remainder of its useful )

life and, if it does so, to also purchase such amount of power (in blocks of 100 megawatts) from Braidwood Unit 1 over the remainder of its useful life as Edison shall designate at the time of exercise of this option. If Edison elects to purchase any amounts of power from Braidwood Unit 1 pursuant to this Section 5.3, Edison shall have the further option to reduce the amounts of power (in blocks of 100 megawatts) that f

Edison is obligated to purchase from Braidwood Unit 1, any such reduction to be effective on July 1, 1997 or, if Edison has previously exercised the option provided for in Section 5.4 of this Agreement, effective on July 1, 2000, in either q case by giving notice of such reduction 12 months prior to such effective date. Edison shall purchase such power, and l l

the energy associated therewith, at rater datermined using l traditional net original cost rate base / rate of return J regulation and accounting for fuel and all other costs of production, all as determined by the FERC from time to time.

If the FERC is without or disclaims jurisdiction with respect l

l 4

to such rates, or declines to make such a net original cost rate base / rate Of return determination, such determination as made by Edison and (Subsidiary) shall be submitted to the ICC for review under Section 7-101 of the Public Utilities Act, and the determination of the parties, as it may be modified by the Icc upon such review, shall be the basis upon which 1

Edison shall pay (Subsidiary). In the event that Edison )

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

(ii) If Edison has elected to purchase the output of Byron .

Unit 2 and at least a part of the output of Braidwood Unit 1 under this Section and has not elected to reduce the amount of power produced by Braidwood Unit 1 to be purchased under this S'ection, Edison shall have the further option to elect on December 1, 1998, to purchase not less than the entire output of Braidwood, Unit 2 during the period Jahuary 1, 2000 through the remainder of the useful life of Braidwood Unit 2.

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

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third-party, arms length, long-term firm power purchase f contracts commencing approximately January, 2000, or (2) l 1

rates determined using traditional not original rate base / rate of return regulation and accounting for fuel and )

all other costs of production, all as determined by the FERC.

If the FERC is without or disclaims jurisdiction with respect to such rates, or declines to make such a determination of market value or not original cost rate base / rate of return retes, such determinations as made by Edison and (Subsidiary) shall be submitted to the ICC for review under Section 7-101 of the Public Utilities Act, and the determinations of the parties, as they may be modified by the ICC upon such review, shall be the basis upon which Edison shall pay (Subsidiary),

except as otherwise provided in this section.

5.4 EXTENSION OPTION (Option c). Edison shall have the option to defer'until the close of business on Friday, July 1, 1994, the time by which it must exercise the option provided in l Section 5.2 above or the option provided for in Section 5.3 above. If Edison exercises the option provided for in this section 5.4, the Initial Term of this Agreement shall be I extended, and the entire output of the Units shall continue .

to be available to Edison, to and including June 30, 1995, I and the monthly payment required to be made by Edison under Section 4.1 of this Agreement shall be increased by an amount j equal to 1/12 of the annual retail rate increase to which Edison shall be entitled as a consequence of its election, at i i

C l the direction of the ICC, to exercise the option provided by this Section 5.4. The bonus provision of Section 4.2 shall not apply during the period of such extension. Particularly,

) but not in limitation of the foregoing, the capacity of Braidwood 2 shall remain subject to the option specified in Section 5.3 (ii) above (being part of option b as set out in-

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

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

In the event that Edison has filed with the ICC a request for such direction no later than 12 months prior to the applicable option exercise date, and the ICC has failed to direct Edison with regard to any such exercise, Edison shall be dedmed to have elected to contract to purchase the entire l output of Byron Unit 2 for the remainder of its useful life and 50% of the entire output of Braidwood Unit'l for the )

remainder of its useful life beginning on the date 12 months following the applicable exercise date. In the event this Section 5.5 becomes operative, Edison shall have no further options under this Article V and the rates for power for which Edison has so contracted shall be determined as provided in Section 5.3 with respect to the output of Byron Unit 2 and Braidwood Unit 1. l l

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ARTICLE VI BILLING 6.1 STATEMENTS. As soon as practicable after the end of each I

calendar month, the Parties shall cause to be prepared a l

statement setting forth the energy delivered by

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

6.2 BILLS. As soon as practicable after preparation of the monthly statement provided for in Section 6.1 above, (subsidiary) shall render to Edison a bill for the amounts due (Subsidiary) by Edison for energy purchased in the month covered by such statement, the capacity reserv5 tion charge for.such month and any Bonus Energy compensation due (Subsidiary) pursuant to'Section 4.2 of this Agreement.

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

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• l ARTICLE VII METERS AND METERING 7.1 METERS. Electric power and energy interchanges at each point of delivery shall be measured by suitable metering equipment provided by Subsidiary.

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

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

~ *7t:"7"Cfrom the best available data.

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

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

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

8.2 FERC ACCEPTANCE FOR FILING. (Subsidiary) and Edison mutually j recognize and agree that this Agreement will be filed with l j

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

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

8.4 SPECIAL TERMINATION RIGHT. If, for any reason, Edison is not permitted to place in effect or maintain the rates provided for in the Memorandum of Understanding, Edison shall have the right to terminate this Agreement, such termination to be effective when and as specified by Edison.

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

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

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

TO (Subsidiary):

TO Edison:

9.* SECTION HEADINGS NOT TO AFFECT MEANING. The descriptive headings of the various Articles and sections of this Agree-ment have been inserted for convenience only and shall not modify or restrict any of the terms and provisions thereof.

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

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

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

9.8 SURVIVORSHIP OF OBLIGATIONS. The termination of this Agreement shall not discharge any party from any obligation it owes to the other party under this Agreement by reason of any transaction, loss, cost, damage, expense or liability i which shall have occurred or arisen after the effective date of th' Tgreement, but prior to such termination. It is the  ;

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

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

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

ATTEST: COMMONWEALTH EDISON COMPANY By Secretary (Title)

ATTEST (Subsidiary)

By Secretary (Title) d e

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s Arrendix &

"Most Favored Nations"

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

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

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

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

the benefits obtained by the subsidiary, or (iv) the risks under-taken by the Subsidiary.

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

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l Existing Edison Contract, it being understood that Edison's eiec- )

i tion under this paragraph is limited to substitution of both the )

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payment and price terms of the Third Party Contract for those of the Pre-Existing Contract.

B. If the Subsidiary enters into a Third Party Con- 1 i

tract and Edison advises subsidiary that it desires to purchase I power under a comparable contract, the subsidiary will offer power i i

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

Upon the execution of any Third Party Contract, the l

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

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,J f

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

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

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1. Recitals. In accordance with an agreement entitled Memorandum of Understanding, dated February 3, 1987, among Edison, the Governor of the State of Illinois, the Attorney General of the State of Illinois, the State's Attorney of Cook County and other parties (the " Memorandum"), Edison has agreed to transfer its nuclear generating facilities known as Byron Unit 2 and Braidwood Units 1 and 2 (the " Units") to subsidiary. The real estate'and facilities constituting the Units are more particularly described in the Facilities Transfer Agreement.

Edison has also agreed that it would complete and op'erate the 1 Units transferred to Subsidiary as agent for Subsidiary.

2. Comoletion of Construction. Edison agrees to complete the construction of the Units as soon as is commercially

' le'asibiE in accordance with the Construction Permits issued by the United States Nuclear Regulatory Commission ("NRC"). In this j regard, Edison shall, and Subsidiary irrevocably authorizes Exhibit D

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e Edison to, make such contracts, agreements and modifications to l

existing contracts and take such other actions as Edison, in its

! sole discretion, considers necessary or appropriate to complete i

the construction of the Units and their preparation for l commercial service. Subsidiary will cooperate with Edison in connection with its duties under this paragraph, including, without limitation, applications for authorizations, permits or j licenses and the execution of such other documents as may be 1

reasonably required. l 1

3. Construction Payments. Edison shall be respons-ible for making arrangements for the payment of all costs and obligations incurred in connection with the construction of the Units. The costs incurred by Edison in connection with such construction up to the in-service date of the Units shall be deemed to be a contribution to capital by Edison as sole shareholder of subsidiary.

Edison shall also be responsible for making arrange-ments for payment of all costs and obligations incurred after the in-service date, in connection with the construction of any needed replacements, modifications, additions, retrofits or similar improvements with respect to the Units. Edison shall bill subsidiary for these costs. To the extent practicable, the billings shall be at such times as shall be appropriate to put the amounts billed in Edison's hands at the times disbursements a

are made. To the extent such billing is not practicable, Edison

h__ . ._ .

. shall have the right to bill Subsidiary for capital Costs.

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

(

Edison has been authorized to earn on rate base in its then most recent general rate order promulgated by the Illinois Commerce commission (such rate to vary when and as such Commission promulgates new orders) and, in the case of investment in depreciable (or otherwise amortizable) property, amortization of the value of such investment in accordance with the basis then used by Edison in respect of similar property includable in Edison's retail rate base.

Subsidiary may require Edison to provide Subsidiary with a statement showing in reasonable detail the basis for the l l

computation of any bill, at or about the time the bill is j rendered to subsidiary. The existence of a dispute between ,

l Edison and Subsidiary with respect to the proper amount of any 1 1

bill shall not relieve Subsidiary of its obligation to pay the

' i bill when due. All bills shall be subject to audit and later i l

correction if in error.  !

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4. ooeration and Maintenance. Edison .all operate and waintain the Units in accordance with the terms of the applicable NRC Operating Licenses, taking all steps which it l considers necessary or appropriate for that purpose, including, l

but not limited to, (a) manning the Units with its own employees, I (b) making and modifying contracts with third parties, (c) l l

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securing and keeping in effect all necessary licenses and other governmental authorizations, (d) preparing and maintaining reports and records required by governmental authority or.

necessary or appropriate to properly account for the costs and expenses of operation and maintenance of the Units, (e) providing purchasing, engineering and other support services associated with the operation of the Units, (f) procuring and maintaining such liability and property insurance as may b.

required by law or may be otherwise considered to be desirable by Edison and (g) providing off-site electrical power to the Units as described in Section 8.2 of the Safety Evaluation Reports for Byron Station dated February, 1982, and the Braidwood Station dated December, 1983, as amended from time to time. During the i Priority Period applicable to a Unit, Edison will treat such Unit on the same basis as its own units, allocating personnel and other resources, dispatching and establishing priorities for activities and resources among the Unit and Edison's own units as though Edison owned the Unit. The " Priority Period" applicable to a Unit is the Rate Moratorium Period (as defined in the Memorandum) and any subsequent period during which Edison is purchasing output from such Unit under a contract entered into pursuant to subparagraph (b) of paragraph 5 of the Memorandum.

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

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

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the Units, whether required before or after completion of the Units, and shall retire and decommission the Units upon the expiration of their useful lives, salvaging any useful parts of the Units. Subsidiary will cooperate with Edison in all activities in connection with the operation and maintenance of the Units, including, without limitation, applications for authorizations, permits and licenses and the execution of such other documents as may be reasonably required.

5. ODeration and Maintenance Costs. Edison shall be

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responsible for making arrangements for the payment of all costs and obligations incurred in connection with the operation and maintenance of the Units, including without limitation, all costs associated with materials and supplies inventories used for the Units and the disposal of nucicar fuel used in the Units, irrespective of the identity of the owner of such fuel. Edison shall bill Subsidiary for these costs. To the extent practicable, the billings shall be at such times as shall be appropriate to put the amounts billed in Edison's hands at the times disbursements are made. To the extent such billing is not practicable, Edison shall have the right to bill Subsidiary for Capital Costs. Sub 'liary may require Edison to provide Subsidiary with a statement showing in reasonable detail the l basis for the computation of any bill, at or about the time any bill is rendered to subsidiary. The existence of a dispute between Edison and Subsidiary with respect to the proper amount 1

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

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

7. Allocation of overhead. Subsidiary recognizes that under this Agreement Edison will incur expensed associated with its management and supervisory duties which are not fully compensated in the Construction Costs and operation and Mainten- j ance costs provided for above. Accordingly, subsidiary agrees to pay Edison annually an allocakie portion of its management and supervisory overhead costs with respect to each of the Units, to l I l

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s be determined in accordance with the following formula:

U A and G )

--- X T

Where:

"U" means the total construction expenditures and operating expenses of the Unit in question for that fiscal year; "T" means Edison's total construction expenditures and operating expenses for that fiscal year including all such expenditures made in connection with this Agreement; and "A&G" means the total of Edison's Administrative and General Costs, as reflected in Edison's books of accounts maintained in accordance with applicable regulatory requirements, including applicable pension provisions, other employee benefits and payroll taxes, and

- sr.; .r. .yy - executive management's sal :ims and the expenses of their offices for that fiscal year.

I With respect to each Unit " fiscal year" means that part ,

j of each calendar year during the term hereof which is subsequent  !

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

8. Byron Station Common Plant and Common Costs.

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

To the extent practicable, costs properly assignable to a Unit at the Byron Station shall be assigned to the owner of such Unit. Fifty percent of operating and maintenance costs not readily allocable to a Unit shall be allocated to Byron Unit 2. q The parties recognize that there are facilities 1 associated with each of the generating units at the Byron Station which are not classified as common plant but which are, from time )

to time, used in connection with the operation of both units.

Such facilities will continue to be so used throughout the remaining useful lives of such generating units. During the Priority Period applicable to Byron Unit II, neither party shall l

be obligated to compensate the other for such use. For any i

T i' .

I period thereafter, the parties will agree to an appropriate.

method of sharing the'use of, and costs associated with, such >

facilities.

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9. Scare Ecuiement. Edison will make available to i Subsidiary for use in connection with the Units spara equipment I

and parts maintained in connection with Edison's units.

subsidiary will make available to Edison for use in connection with Edison's units spara equipment and parts maintained in connection with the Units. The party receiving any such spara equipment or parts shall compensate the other party either.in cash or by providing like equipment or parts, at the election of the party providing such equipment or parts. If payment is to be made in cash, such payment shall be equal to the original cost of the item in question. At any time after the Rate Moratorium .)

Period-(as defined in the Memorandum), either party may terminate the obligations to make equipment and parts available undar this paragraph. .

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

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

the effect that this Agreement is terminated.

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12. Termination. Edison may terminate this Agreement if Subsidiary becomes insolvent or generally fails to pay, or j i

admits in writing its inability to pay, debts as they become due; )

i or Subsidiary applies for, consents to or acquiesces in the j i

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

for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for subsidiary or for a substantial part of thd property of subsidiary and is not discharged within 30 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding,under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is commenced in I respect of subsidiary, and if such case or proceeding is not commenced by Subsidiary it is consented to or acquiesced in by subsidiary or remains for 30 days undismissed; or Subsidiary '

l takes any corporate action to authorize, or in furtherance of, any of the foregoing, i 1

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subsidiary may terminate this Agreement as to any Unit, upon twelve months' prior written notice to Edison of Subsid-iary's determination to terminate with respect to such Unit provided that no such termination may be effective prior to the end of the Priority Period applicable to such Unit.

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

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

This Agreement shall not create any rights in any person, other than Edison and Subsidiary, whether as a third party beneficiary or otherwise. Edison shall have no obligation hereunder to anyone other than subsidiary and subsidiary shall have no right to assign, convey, pledge or otherwise transfer any of its rights hereunder without the prior written consent of Edison. Nothing l j

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

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14. Miscellaneous.

(a) The validity, interpretation and performance of this Agreement and each of its provisions shall be governed by 1

the law of the State of Illinois as though all acts or omissions occurred in that State. This Agreement is subject to the ap-1 preval of any regulatory authority required by law. l l

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

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

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

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

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Executed this day of , 1987.

COMMONWEALTH EDISON COMPANY

. By:

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[ SUBSIDIARY)

By:

l Its:

9 a

• .9 i 1 FINANCING AGREEKINT 1; I

COMMONWEALTH EDISON COMPANY, (" Edison"), and f g

, (" Subsidiary"), in consideration of those I I

natters set forth in Article I hereof agree as follows:

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ARTICLE I  ;

Fecitals (a) Edison owns 100% of the outstanding equity securi- l ties of subsidiary.

(b) Edison and Subsidiary are. parties to a Facility Transfer Agree =ent, a Construction and Operating Agreement, and a Power Supply Agreement, all of even date herewith. Pursuant to those agree ents, Edison will transfer to Subsidiary the facilities ce==enly .enferred to as Byron Unit 2 and Braidwood j Units 1 and 2 (collectively the " Units"), and as agent for I Subsidiary, cc plete ctanstruction of the Units, operate and maintain the Units, JJJ construct any modifications,thereto required for their continued operation, and, for at least 5 years, will have the right to purchase all of the power generated thereby. In order to perfors its obligations under those agreements, Subsidiary may be required to make expenditures in excess of the revenues received by it from sales of power.

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l Exhibit E I

1 ARTICLE II Fundinc

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

$25,000,000 to provide working capital. Thereafter, from time to time, and at subsidiary's. request, Edison will make available to subsidiary.such funds as may be necessary to enable Subsidiary to comply with any obligation it may have with respect.to safe construction, operation, maintunance, shutdown er decommissioning of the Units; provided that nothing herein contained shall be construed as obligating Edison to provide funds to enable Subsidiary to continue or resume operation of the Units, or any of them, when Edison believes.that continued or resumed operation is l uneconomical.

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

ARTICLE III Conditions At Edison's option, funds to be provided hereunder shall be made available in the form of: (1) loans bearing interest at a rate not to exceed 250 basis points above Edison's then most 4

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

ARTICLE H InIn This' Agreement shall continue in full force and effect I

during the term of the construction and operating Agreement referred to'above.

ARTICLE V Limitation (a) The obligations of Edison to provide funding under paragraph 1 of Article II and its right to provide other funding hereunder shall be subject to approval of this Agreement by the Illinois Commerce Commission.

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

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

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Dated at , Illinois, the __ _ day of

, 1987.

COMMONWEALTH EDISON COMPANY l

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e UNITED STATES NUCLEAR REGULATORY COMMISSION W ASHING TON, D. C. 20555 l

COMMONWEALTH EDISON COMPANY ct 6 d Cen+ral Mia i3 T NO. STN 50-457 cf lec.+ ric. C'c n &" N^ 'l BRAIDWOOD STATION, UNIT NO. 2 l CoePaay CONSTRUCTION PERMIT Construction Permit No. CPPR-133 1

, 1. The Nuclear Regulatory Commission (the Commission) having found that:

A. The application for construction permit complies .with the l requirements of the Atomic Energy Act of 1954, as amended, and I the rules and regulations of the Commission, there is reasonable assurance that the activities authorized 'by the permit will be conducted in compliance with the rules and regulations of the l Commission, and all required notifications to other agencies or {

bodies have been duly made; _ _

l edison l B. The Commonwealth Edison Company h: ^p([t g ) has described the. proposed design of the Braidwood Station, Unit No. 2 (the {

l- l facility), including, but not limited to, the principal {

architectural and engineering criteria for the design and {

has identified the major features or components incorporated  !

therein for the protection of the health and safety of the public;

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C. Such further technical or design information as may be required to complete the safety analysis, and which can reasonably be le f t for later consideration, will be supplied in the final safety analysis report; i

+ D. Safety features or components, if an equire res arch an evelopment have been described by ,,s .Jdunt and *he ^ p.i- Ficliso n een+ has identified, and there ivill be conditete , a researc

_- a development program reasonably designed to resolve any safety questions associated with such features or components; gy hl bl+ F

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E. On the basis of th' e foregoing, there is reasonable assurance that (i) such safety questions will be satisfactorily resolved at or-before the latest date stated in the application for completion of construction of the proposed facility and (ii) taking into consideration the site criteria contained in 10 CFR Part 100, the proposed facility can be constructed and operated at the proposed '

location without undue risk to the health and safety of the public; e d?.si d N F. Oc~ Appli_ cant)is technically qualified to design and construct Ithe proposed facility; E clo's o n G. m.c Analicent is financially qualified to design and construct the propose facility; H. The. issuance of a permit for the construction of the facility .will not be inimical to the common defense and security or to the health and safety of the public; and I. After weighing the environmental, economic, technical and other benefits of the facility against environmental and other costs and considering available alternatives, the issuance of a con-struction permit subject to the conditions for protection of the environment set forth herein is in accordance with 10 CFR Part 50 of the Commission's regulations and all applicable requirements have been satisfied.

2. Pursuant to Section 103 of the Atomic Energy Act of 1954, as amended i (the Act), and Title 10, Chapter I,, Code of Federal Regulations, Part 50, " Licensing of Production and Utilization Facilities," and

pursuant to the Initial Decisions of the Atomic fety and Licensing - i l Board, dated January 8,1975, October 29, 1975 December 31,1975, a n d / '

l the Nuclear Regulatory Coq;gission (the Commission) hereby issues b a .. a construction permit tT(@e /M1icant)for a utilization facility designed to operate'at a core power level of 3411 megawatts thermal n ara

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as described filed in this matter by the(A in the applicaty'7pf@.mmendments and as more fullythereto described (the application) in the evidence received at the public hearing upon that application.

The facility, known as the Braidwood Station, Unit No. 2, will be located on the Applicant's site in Will County, Illinois.

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3. "this permit s1 11 be deemed to contain and be subject to the conditions specified in Sections 50,54 and 50.55 of said regulations; is subject to all applicable provisions of the Act, and rules, regulations, and orders of the commission now or hereafter in effect; and is subject

,. to the conditions specified or incorporated below:

• -- A.' The earliest date for the completion of the facility is November 1, 1981, and the latest date for completion is ;;es w n , i^" .

A pri I _ 3cv_ in B. The facility shall be ecinstructed and located at the site as

, described in the application, in North Central Illinois, neat the town of Braidwood, in Will County,, Illinois.

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C. This construction permit authorizes the'1g

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o construct the facility described ~in the application and the hearing record, in accordance with the print.ipal architectural and engineering criteria and environmental protection commitments set forth therei_n. _ g,,,3 co rmi-hc,iffsymn eC,/

, D. The ^ 9.ic -t jiubject to the following antitrust condition:

The App icant will afford an opputtunity to participate in the ,

LaSalle County Station, Units 1 and 2, for the term of the license, i g or any extension or renewal thereof, to those municipal electric  !

L systems which have. indicated an interest in such participation l by December 31, 1973, through a reasonable ownership interest

+ in: such unit (s) or through contractual purchases of unit power w v y *ICI"#5 h*

subject to reasonable terms And conditions and on a basis that w H fully compensate the h 1II T'IfA M M costs (including (C%~

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a reasonable return on investment). Such opportunity to participate shall include arrangements for reannnable -- Kerve protection and associated transmission se -

,b ^$7'MS-iee]t on a basis q' I that will fully compensate '... 'd, Jnm for its costs (including ,

" a reasonable return on investment). The municipal systems must enter into executory agreements to accomplish the fore-going no later than December 31, 1974.

E. This facility is subject to the following conditions for the protectio _n of the environment:

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L (1) Th I p!!:::t[shall take the necessary mitigating action, including those summarized in Section 4.5 of the Final Environ-( mental Statement, during construction of the Station and associated transmission lines to avoid unnecessary adverse environmental impacts from construction activities, with the exception that burning of landscape waste from site clearing is permitted in accordance with Illinois State law; L _______________-----

4 Ce,-penu +- he Iders (2) A control program shall be established by the 41Meep o provide for a periodic review of all construction activities to assure that those activities conform to the environmental conditions set forth in this permit; (3) Before engaging in a construction activity which may result in a significant adverse environmental impact that was not evaluated or that is significantly ated in the Final Environmental greater thanA'p@t Statement, the(dp ey 5a+- g [__*'g "

shall provide written notification to the Director, Livision of Reactor Licensing; (4) If unexpected harmful effects or evidence of irrever damage is detected during facility construction, the -A(h,ggjg ~ __

shall provide an acceptable analysis of the problem

@daplanofactiontoeliminateorsignificantlyreduce an the harmful effects or damage; and (5) In addition to the preoperational monitoring program described in Section 6.1 of the Environmental Report, with amendments, the staf f recommendations included in Section 6.1 of the Final Environmental Statement shall be followed, with modifications as may be approved by the staff.

4. This permit is subject to the limitation that a license authorizing opergign of)the, facility will not be issued by the Commission unless (a) Qu@dcant h submits to the Commission the complete final safety analysis report, portions of which may be suomitted and evaluated from time to time; (b) the Commission finds that the final design provides reasonable assurance that the health and safety of the public will not be endangered by the operation of the facility in accordance with p"ocedures approved by it in connection with the issuance of

said license; (c) the Commission finds that operation of the facility i' will be in accordance with 10 CFR Part 51 o f t he Commis d nn 's regul at ions and all applicable requirements were satisfied; and (d) @ 'aYplie r p submits proof of financial protection and executes an indemnity agreement as required by Section 170 of the Act.

5. This permit is ef fective as of its date of issuance and: shall expire

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on the later,t completion date indicated in paragraph 3.A above.

FOR THE NUCLEAR RECULATORY COMMISSION

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R. S. Boyd,[ Acting pNect or Division of-Ieactor' Licensing Office of t1uclear Reactor Regulation Date of Issuance: December 31, 1975

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'4 ATTACHMENT 1 ,

i The following general information is provided in support of the

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application for construction permit amendment.

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

Purpose:

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

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

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

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

• Wallace B. Behnke, Jr. Vice Chairman

• Bide L. Thomas Executive Vice President

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

Ernest M. Roth Treasurer )

Klaus H. Wisiol Secretrary

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

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1 It is not contemplated that the subsidiary will have any other employees with the possible exception of a few administrative staff persons. As explained below, all personnel and other resources needed-to construct the Facility safely will be provided by Commonwealth Edison Company.

II. Facility Under the Facilit'ies Transfer agreement, title to the Facility will be conveyed to the subsidiary, including control over the site exclusion area as described in Section 2.1 of the Safety Evaluation Report, dated. November, 1983, which was issued by the NRC for Braidwood Station.

The Facility is depicted in Exhibit G, Sheets 1 and 2, and consists of the following structures and equipment for each unit:

a. Reactor Containment

b. Reactor Vessel

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

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

e. Main and Misc. Instrument and Control Panels

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

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

h. Turbine (including foundation)

1. Generator (including foundation)

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. Condenser

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

1. Cooling Lake III-. Technical _Oualifications The NRC has determined under the construction permit that Commonwealth Edison Company is qualified to construct the Facility. These circumstances will not change as a result of the proposed construction permit amendment. The Subsidiary will appoint Commonwealth Edison as its agent responsible for the construction of the Facility. This relationship is established under paragraphs 4 and 13 of the Construction and Operating Agreement (Exhibit D). Paragraph 13 also states that the Subsidiary shall have~no right to " assign, convey, pledge or otherwise transfer any of its rights" without the written consent of Commonwealth Edison Company. Moreover, as sole owner-of the shares of the Subsidiary, Edison'will control all decision-making to assure that the Facility's nuclear construction organization, which was found technically qualified by the NRC in its Safety Evaluation Report (SER, dated April 4, 1975), will remain in place. Finally, the NRC will have regulatory control over the Eubsidiary as a co-permit holder of the Facility as well as Edison thereby subjecting any change in the construction entity of the Facility to the NRC's approval.

IV. Financial-Oualifications Commonwealth Edison Company is responsible financially for the construction of the Facility under the proposed amendment and as set forth in Article II of the Financing Agreement as that term is used in the NRC's regulations (Exhibit E). In accordance with its obligations under those regulations, Commonwealth Edison Company commits to provide the necessary financial resource to construct the Facility safely.

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a ATTACHMENT 2 Antitrust Review Commonwealth Edison Company submitted the requisite information under l

- 10 CFR Section 50.33a and Appendix L to part 50 in connection with the l operating license antitrust review for Braidwood Unit 1. The information was reviewed by the Attorney General and comments were solicited from the public.

On August 8, 1986 and reaffirmed on October 29, 1986 the NRC's Director of the office of Nuclear Reactor Regulation made findings, in accordance with Section 105(c)(2) of the Atomic Energy Act of 1954, as amended, that no significant changes had occurred since the construction permit reviews by the Attorney General ano the NRC for Braidwood Unit I which would require a second antitrust review in connection with the OL application. (Cee 51 Fed. Reg. 29350 (August 15, 1986)).

1 The following diacyssion will demonstrate that neither the Agreement which occasions this Amendment application nor its implementation constitute changed circumstances which raise any significant issues under the antitrust i laws or which require a further antitrust review.

For a period of five to eight years after the effective date of the Agreement, Edison (and through it, Edison's customers) will be entitled to all of the power generated by the Units. That is no different from the situation without the Agreement. At all times, both with and without the Agreement, the price of power generated by the Units, and thus as an economic matter, what is paid for entitlement to the power, is subject to regulatory control. The Illinois Commerce Commission controls the price of power sold to Edioon's retail customers and the FERC controls the price of power sold to other utilities (including municipal systems).

What may be different under the Agreement is that after the initial period (the duration of which, 5 to 8 years, is to be determined by the Illinois commerce Commission) is the identity of the utility entitled to the power and, more importantly, what is to be paid for that entitlement. Under j Edison's ownership, the situation without the Agreement, the amount paid for l entitlement to the power is determined by traditional rate base / rate of return  !

regulation. Such regulation serves to place both a cap and a floor on the l amounts (rates) paid for the electricity generated. However, with the subsidiary's ownership of the Units under the Agreement, the amounts paid for i entitlement to the power may be lower than with Edison's ownership. The 1 l

Subsidiary, unlike Edison, has no service territory and thus, has no assured market for the power. This means that the subsidiary may be unable to sell the power at prices equivalent to those permitted by regulation. In that l circumstance, the power will be sold at rates determined by competitive market l forces. This circumstance is dependent on the options which are exercised by l Edison at the end of the initial 5-year term of the power Supply Agreement, as l directed by the Illinois Commerce Commission. This arrangement between  !

Edison, the Subsidiary and the Illinois Commerce Commission is, if anything, I pro-competitive.

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