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EXHIBIT 10.55
Execution Copy
Amendment and Restatement of the April 1, 2001
GENERATOR INTERCONNECTION AGREEMENT
Between
MICHIGAN ELECTRIC TRANSMISSION COMPANY
And
CONSUMERS ENERGY COMPANY
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Execution Copy
Amendment and Restatement of the April 1, 2001
GENERATOR INTERCONNECTION AGREEMENT
Between
Michigan Electric Transmission Company
And
Consumers Energy Company
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ARTICLE 1 -
DEFINITIONS....................................................
2
ARTICLE 2 - TERM OF
AGREEMENT..............................................
5
2.1 Effective
Date.....................................................
5
2.2
Term...............................................................
6
2.3
Termination........................................................
6
2.4 Regulatory
Filing..................................................
6
2.5
Survival...........................................................
6
ARTICLE 3 - INTERCONNECTION
SERVICE........................................ 6
3.1 Scope of
Service...................................................
6
3.2 Third-Party
Actions................................................
7
ARTICLE 4 - INTERCONNECTION
ASSETS......................................... 8
4.1 Reservation of Rights to
Interconnection Assets.................... 8
4.2
Modifications......................................................
8
4.3 As-Built
Drawings..................................................
8
ARTICLE 5 -
OPERATIONS.....................................................
8
5.1
General............................................................
8
5.2 Transmission Provider
Obligations.................................. 9
5.3 Consumers
Obligations..............................................
9
5.4 Jointly Owned
Assets............................................... 9
5.5 Access
Rights......................................................
10
5.6 Switching and Tagging
Rules........................................ 10
5.7 Black Start
Participation..........................................
10
5.8 Reactive
Power.....................................................
10
5.9 System
Security....................................................
10
5.10 Consumers
Voltage Regulation.......................................
11
5.11 Protection
and System Quality......................................
11
5.12 Outages,
Interruptions, and Disconnection..........................
12
5.13 Operating
Expenses.................................................
14
ARTICLE 6 -
MAINTENANCE....................................................
14
6.1 Transmission Provider's
Obligations................................ 14
6.2 Consumers'
Obligations.............................................
14
6.3 Jointly Owned
Assets............................................... 15
6.4 Access
Rights......................................................
15
6.5 Maintenance
Expenses...............................................
15
6.6
Coordination.......................................................
15
6.7 Inspections and
Testing............................................ 16
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6.8 Right to Observe
Testing........................................... 16
6.9 Secondary
Systems..................................................
16
6.10 Observation
of Deficiencies........................................
16
ARTICLE 7 -
EMERGENCIES....................................................
16
7.1
Obligations........................................................
16
7.2
Notice.............................................................
16
7.3 Immediate
Action...................................................
17
7.4 Transmission Provider's
Authority.................................. 17
7.5 Consumers'
Authority...............................................
17
7.6 Audit
Rights.......................................................
17
ARTICLE 8 -
SAFETY.........................................................
18
8.1
General............................................................
18
8.2 Environmental
Releases............................................. 18
ARTICLE 9 -
METERING.......................................................
18
9.1
General............................................................
18
9.2 Costs of Administering Metering
Assets............................. 18
9.3 Testing of Metering
Assets......................................... 19
9.4 Metering
Data......................................................
19
9.5
Communications.....................................................
19
ARTICLE 10 - FORCE
MAJEURE.................................................
20
ARTICLE 11 - INFORMATION
REPORTING......................................... 20
ARTICLE 12 - PAYMENTS AND BILLING
PROCEDURES............................... 20
12.1
Invoices...........................................................
20
12.2 Payments to
Transmission Provider..................................
21
12.3 Interest
Charges...................................................
21
12.4
Disputes...........................................................
21
ARTICLE 13 -
ASSIGNMENT....................................................
22
ARTICLE 14 - INDEMNITY AND
INSURANCE....................................... 22
ARTICLE 15 - LIMITATION ON
LIABILITY....................................... 23
ARTICLE 16 - BREACH, CURE AND
DEFAULT...................................... 24
16.1
General............................................................
24
16.2 Events of
Breach...................................................
24
16.3 Continued
Operation................................................
24
16.4 Cure and
Default...................................................
25
16.5 Right to
Compel Performance........................................
25
ARTICLE 17 -
CONFIDENTIALITY...............................................
25
ARTICLE 18 - AUDIT
RIGHTS..................................................
26
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ARTICLE 19 -
DISPUTES......................................................
26
ARTICLE 20 -
NOTICES.......................................................
26
ARTICLE 21 -
MISCELLANEOUS.................................................
27
21.1
Amendments.........................................................
27
21.2 Binding
Effect.....................................................
27
21.3
Counterparts.......................................................
28
21.4 Entire
Agreement...................................................
28
21.5 Governing
Law......................................................
28
21.6 Headings
Not To Affect Meaning.....................................
28
21.7
Waivers............................................................
28
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Execution Copy
Amendment and Restatement of the April 1, 2001
GENERATOR INTERCONNECTION AGREEMENT
THIS
AMENDMENT AND RESTATEMENT OF THE APRIL 1, 2001 GENERATOR
INTERCONNECTION AGREEMENT (the "Agreement") is made and entered
into as of April
29, 2002 by and between Michigan Electric Transmission Company, a
Michigan
corporation with offices at 212 West Michigan Avenue, Jackson,
Michigan (herein
referred to as "Transmission Provider") and Consumers Energy
Company, a Michigan
corporation with offices at 212 West Michigan Avenue, Jackson,
Michigan (herein
referred to as ("Consumers"). Consumers and Transmission Provider
each may be
referred to individually as a "Party," or collectively as the
"Parties." This
Agreement amends, restates and completely replaces the April 1,
2001 Generator
Interconnection Agreement between the Parties, effective on the
date indicated
above.
WITNESSETH:
WHEREAS, Transmission Provider is engaged in the transmission of
electric
energy; and
WHEREAS, Consumers owns and operates several electric generating
assets
(herein referred to as a Unit when discussing one of them, or as
Generation
Resources when referring to all of them) as described in Article 1.
The Unit
names and generating capability ratings of the Generation Resources
are set
forth in Exhibit A to this Agreement. Each Unit in the list is
currently in
commercial operation; and
WHEREAS, it is
necessary for Consumers' Units to remain interconnected with
Transmission Provider's System (as defined in Article 1), in order
for said
Units to continue to operate; and
WHEREAS, the Parties have entered into an Operating Agreement,
dated as of
April 1, 2001, as amended and restated, (herein referred to as the
"Operating
Agreement") that defines the operating responsibilities of the
Transmission
Provider with respect to the Transmission System and the
obligations, rights and
responsibilities of Consumers to provide ancillary services and to
operate its
Generation Resources in a manner that will not unduly interfere
with the
provision of Transmission Services by the Transmission Provider;
and
WHEREAS, the Parties have entered into a Network Operating
Agreement, dated
as of April 1, 2001, as amended and restated, that governs
Transmission
Provider's provision of Network Integration Transmission Service to
Consumers as
a Network Customer under the Tariff.
WHEREAS, the Parties have entered into a Purchase and Sale
Agreement for
Ancillary Services, dated as of April 1, 2001, as amended and
restated, that
sets forth the terms and conditions under which Consumers shall use
its
Generation Resources to provide ancillary services to the
Transmission Provider,
and
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WHEREAS, Consumers and Transmission Provider are willing to
maintain the
interconnection of Consumers' Generation Resources with
Transmission Provider's
Transmission System under the terms and conditions contained
herein.
NOW,
THEREFORE, in consideration of and subject to the mutual
covenants
contained herein, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Whenever used in this Agreement, appendices, and attachments
hereto, the
following terms shall have the following meanings:
"Black Start Capability" shall mean a generating Unit that is
capable of
starting without an outside electrical supply. Said Units are
specified in
Exhibit A.
"Black Start Plan" shall mean a plan utilizing Black Start
Capability
designed and implemented by the Transmission Provider in
conjunction with its
interconnected generation and distribution customers, Distribution
System
Control, other electric systems, its Security Coordinator and ECAR,
to energize
portions of the Transmission Provider's System which are
de-energized as a
result of a widespread system disturbance.
"Black Start Service" shall mean the provision of service needed
to
energize a defined portion of the Transmission Provider's System,
including the
start up of the Generation Resources and/or other generators, in
accordance with
the Transmission Provider's Black Start Plan when local power from
the
Transmission Provider's System is unavailable or insufficient.
"Commission" shall mean the Federal Energy Regulatory Commission,
or any
successor agency.
"Connection Point" shall be the point where Consumers'
Interconnection
Assets connect to Transmission Provider's Interconnection Assets,
as described
in Exhibit B of this Agreement.
"Consumers' Incremental Cost" shall mean Consumers' actual
hourly
replacement cost of energy on Consumers' Generation Resources,
whether that
energy is (a) produced by generation owned by or under contract to
Consumers or
(b) purchased from a third party.
"Consumers' Interconnection Assets" shall mean the assets
identified as
belonging to Consumers in Exhibit B of this Agreement and all other
assets that
are necessary or desirable to interconnect a Unit to the
Transmission Provider's
System reliably and safely, including all connection, switching,
transmission,
distribution, safety, and communication assets, protective assets,
Telemetry and
Monitoring Assets that Consumers owns or operates and
maintains.
"Consumers' System" shall mean the assets owned, controlled and
operated by
Consumers that are used to provide service to its customers.
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"ECAR" is an acronym, which stands for the East Central Area
Reliability
coordination agreement. This is the agreement under which
Transmission Provider
and other ECAR members establish regional coordination practices
and guides to
govern the electric coordinated operation and reliability of the
East Central
Region of North America.
"Emergency" shall mean any system condition that requires automatic
or
immediate manual action to prevent or limit the loss of
transmission assets or
generation supply that could adversely affect the reliability of
Transmission
Provider's System or Consumers' System or the systems to which
either Party is
directly or indirectly connected.
"Generation Resources" shall mean the assets used for the
production of
electric energy, which are owned and operated by Consumers and
directly or
indirectly connected to the Transmission Provider's System.
"Good Utility Practice" shall mean any of the practices, methods
and acts
engaged in or approved by a significant proportion of the electric
utility
industry during the relevant time period, or any of the practices,
methods and
acts which, in the exercise of reasonable judgment in light of the
facts known
at the time the decision was made, could have been expected to
accomplish the
desired result at a reasonable cost consistent with good business
practices,
reliability, safety and expedition. Good Utility Practice is not
intended to be
limited to the optimum practice, method or act to the exclusion of
all others,
but rather to be acceptable practices, methods or acts generally
accepted in the
region.
"Governmental Authority" shall mean any federal, state, local or
municipal
governmental body; any governmental, regulatory or administrative
agency,
commission, body or other authority exercising or entitled to
exercise any
administrative, executive, judicial, legislative, policy,
regulatory or taxing
authority or power; or any court or governmental tribunal.
"Hazardous Substances" shall mean any chemicals, materials or
substances
defined as or included in the definition of "hazardous substances",
"hazardous
wastes", "hazardous materials", "hazardous constituents",
"restricted hazardous
materials", "extremely hazardous substances", "toxic
substances",
"contaminants", "pollutants", "toxic pollutants" or words of
similar meaning and
regulatory effect under any applicable Environmental Law, or any
other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by
any applicable Environmental Law. For purposes of this Agreement,
the term
"Environmental Law" shall mean federal, state, and local laws,
regulations,
rules, ordinances, codes, decrees, judgments, directives, or
judicial or
administrative orders relating to pollution or protection of the
environment,
natural resources or human health and safety.
"IEEE" is an acronym, which stands for the Institute of Electrical
and
Electronic Engineers.
"Interconnection Assets" shall mean, collectively, Transmission
Provider's
Interconnection Assets and Consumers' Interconnection Assets, or
the specific
Interconnection Assets of one of the Parties, as the case may
be.
"Jointly Owned Assets" shall mean those assets in which Consumers
and
Transmission Provider have undivided ownership interests. Due to
the nature of
substation
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designs, many of the supporting substation assets (e.g., station
batteries,
fencing, control houses, ground grid, yard stone, steel structures
and some
protective relay assets) cannot be separated by ownership and the
Parties share
in the ownership of such assets. The respective ownership of such
assets by
substation is shown in Exhibit B hereto.
"Metering Assets" shall mean the assets required to provide
acceptably
accurate metering of the interconnection power and energy output
from the Unit
and the standby power and energy usage of the Unit. Said Metering
Assets
typically includes but is not limited to, metering accuracy
potential and
current transformers, transducers, primary connections, secondary
connections,
secondary potential and current circuits and conduit, telephone
lines and access
to said Metering Assets, if necessary. The transducers used shall
be capable of
providing Megawatthour and Megavarhour data.
"Monitoring Assets" shall mean the assets required to determine (a)
the
sequence of events for the operation of protective assets during an
electrical
fault, (b) the location and characteristics of an electrical fault
and (c) the
quality of power provided at the Point of Receipt.
"NERC" is an acronym that stands for the North American
Electric
Reliability Council, including any successor thereto or any
regional reliability
council thereof. This reliability council oversees the development
and
publication of operating policies, engineering planning principles
and guides
and support information to provide guidance to the regional
reliability councils
and to promote electric system reliability.
"Point of Receipt" shall be the point at which capacity and energy
is
provided by Consumers, as described in Exhibit B of this
Agreement.
"Reactive Design Limitations" shall mean the reactive power
capability
designed into the Unit, which were consistent with reactive power
capability
specifications in place when the Unit was constructed.
"Secondary Systems" shall mean control or power circuits that
operate below
600 volts, AC or DC, including, but not limited to, any hardware,
control or
protective devices, cables, conductors, electric conduits and
raceways,
secondary assets panels, transducers, batteries, chargers, and
voltage and
current transformers.
"Switching and Tagging Rules" shall mean the written documents
describing
the switching and tagging procedures of Transmission Provider and
Consumers, as
they may be amended.
"System Operator" is a generic term used to describe the
individuals
responsible for the integrity or the operational control of the
Transmission
Provider's System and any successor thereto.
"System Protection Assets" shall mean the assets required to
protect (a)
Transmission Provider's System, the systems of others connected to
Transmission
Provider's System, and Transmission Provider's customers from
faults occurring
at the Unit, and (b) the Unit from faults occurring on Transmission
Provider's
System or on the systems of others to which Transmission Provider's
System is
directly or indirectly connected.
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"Tariff" means either the Open Access Transmission Tariff or the
Joint Open
Access Transmission Tariff in which Transmission Provider provides
or will
provide open access, non-discriminatory transmission service, as
amended from
time to time, or any successor tariff on file, or to be filed, with
the FERC, as
such may be amended from time to time.
"Telemetry Equipment" shall mean the assets, identified by
Transmission
Provider, that are required to provide the necessary, real-time
telemetry of
Unit operations and status, as required by Transmission Provider,
for remote
monitoring and control purposes. This typically includes but is not
limited to,
remote terminal units, distributed terminal units, telemetry signal
inputs,
fiber optic communication connections, transducers, pulse
multipliers, isolation
amplifiers, analog inputs, digital inputs, metering pulsed
accumulator inputs,
power supply, dedicated telephone data line to remote terminal
units, telephone
modem, telephone switching, interface terminal strips for landing
signal
inputs/outputs. Telemetry Equipment may be located at Consumers'
Unit and or at
Transmission Provider's assets.
"Transmission Provider's Interconnection Assets" shall mean the
assets
identified as belonging to Transmission Provider in Exhibit B of
this Agreement
and all other assets that are necessary or desirable to
interconnect the
Generation Resources to Transmission Provider's System reliably and
safely,
including all connection, switching, transmission, distribution,
safety, and
communication assets, protective assets, Metering, Telemetry and
Monitoring
Assets and all improvements, additions or extensions to
Transmission Provider's
System attributable to or necessitated by the Generation Resources
that
Transmission Provider owns or operates and maintains.
"Transmission Provider's System" shall mean the assets owned,
controlled
and operated by the Transmission Provider that are used to provide
transmission
service under Part II and Part III of the Tariff.
"Transmission Service" shall include both Point-To-Point
Transmission
Service provided under Part II of the Tariff and Network
Integration
Transmission Service provided under Part III of the Tariff.
"Unit" shall mean each of Consumers' electric generating assets, or
group
of generating assets having common Interconnection Assets,
identified generally
in the second "Whereas" clause and Exhibit A of this Agreement and
more
specifically identified in the "as built" drawings provided to
Transmission
Provider in accordance with Section 4.5 of this Agreement, together
with the
other property, assets, and assets owned and/or controlled by
Consumers on the
Consumers' side of the Connection Point.
ARTICLE 2
TERM OF AGREEMENT
2.1 Effective Date
This
Agreement shall become effective upon the date specified by the
Commission under Section 205 of the Federal Power Act.
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2.2 Term
This
Agreement shall become effective as provided in Section 2.1 above
and,
unless terminated as provided below, shall continue in full force
and effect
until a mutually agreed termination date, but no later than the
date on which
all of the Generation Resources cease commercial operation.
2.3 Termination
In
the event that Transmission Provider joins a Regional
Transmission
Organization ("RTO") which requires use of its own FERC-approved
interconnection
and operating agreement, this Agreement shall terminate on the
effective date of
such new interconnection and operating agreement between Consumers
and the RTO,
except to the extent necessary to resolve billing and other
outstanding matters
related to service rendered under this Agreement as specified in
Section 2.5.
2.4 Regulatory Filing
Transmission Provider shall file this Agreement with the Commission
as a
Service Agreement under the Tariff. Consumers agrees to cooperate
with
Transmission Provider with respect to such filing and to provide
any
information, including the rendering of testimony reasonably
requested by
Transmission Provider, needed to comply with applicable regulatory
requirements.
2.5 Survival
The
applicable provisions of this Agreement shall continue in effect
after
expiration, cancellation, or termination hereof to the extent
necessary to
provide for final billings, billing adjustments, and the
determination and
enforcement of liability and indemnification obligations arising
from acts or
events that occurred while this Agreement was in effect.
ARTICLE 3
INTERCONNECTION SERVICE
3.1 Scope of Service
In
the event future changes in either (a) design or operation of any
Unit,
(b) Consumers' requirements or (c) Transmission Provider's
requirements
resulting from the Unit's parallel operation with Transmission
Provider's System
later necessitate additional Interconnection Assets or
modifications to the then
existing Interconnection Assets herein, the Parties shall undertake
such
additions and modifications as may be necessary. Before undertaking
such future
additions or modifications, the Parties shall consult, develop
plans and
coordinate schedules of activities, including the making of
necessary amendments
to this Agreement (including its Appendices) and/or entering into
new
agreements, so as to insure continuous and reliable operation of
the
Interconnection Assets. The cost of such additions or modifications
to the
Interconnection Assets shall be borne by Consumers unless otherwise
agreed upon
at the time. The ownership, operation and maintenance
responsibilities for any
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such future additions or modifications shall be made consistent
with the
responsibilities allocated in this Agreement.
3.1.1 Except as otherwise provided under Sections 5.8 and 5.9 of
this
Agreement, Transmission Provider shall have no obligation under
this Agreement
to pay Consumers any wheeling or other charges for electric power
and/or energy
transferred through Consumers' assets or for power or ancillary
services
provided by Consumers under this Agreement for the benefit of
Transmission
Provider's System.
3.1.2 Except as otherwise provided under this Agreement,
Transmission
Provider shall have no obligation under this Agreement to make
arrangements or
pay under applicable tariffs for transmission and ancillary
services associated
with the delivery of electricity and ancillary electrical products
produced by
the Unit.
3.1.3 Except as otherwise provided under this Agreement,
Transmission
Provider shall have no obligation under this Agreement to procure
electricity
and ancillary electrical products to satisfy Consumers' station
power needs or
other related requirements.
3.1.4 Except as otherwise provided under this Agreement,
Transmission
Provider shall have no obligation under this Agreement to make
arrangements
under applicable tariffs for transmission, losses, and ancillary
services
associated with the use of Transmission Provider's System for the
delivery of
electricity and ancillary electrical products to the Unit.
3.1.5 Transmission Provider makes no representations to Consumers
regarding
the availability of Transmission Service on Transmission Provider's
System, and
Consumers agrees that the availability of Transmission Service on
Transmission
Provider's System may not be inferred or implied from Transmission
Provider's
execution of this Agreement. Consumers will obtain Transmission
Service on
Transmission Provider's System under a separate agreement between
the Parties
and in accordance with the provisions of the Tariff.
3.2 Third-Party Actions
Consumers acknowledges and agrees that, from time to time during
the term
of this Agreement, other persons may develop, construct and
operate, or acquire
and operate generating assets in the Transmission Provider's
service territory,
and construction or acquisition and operation of any such assets,
and
reservations by any such persons of Transmission Service under the
Tariff may
adversely affect the Unit and the availability of Transmission
Service for the
Unit's electric output. Consumers acknowledges and agrees that
Transmission
Provider has no obligation under this Agreement to disclose to
Consumers any
information with respect to third-party developments or
circumstances, including
the identity or existence of any such person or other assets,
beyond what
Transmission Provider customarily provides to other similarly
situated
generators, except as may be required under Article 4 of this
Agreement and
elsewhere in this Agreement. Consumers and Transmission Provider
make no
guarantees to the other under this Agreement with respect to
Transmission
Service that is available under the Tariff or any other tariff
under which
Transmission Service may be available in the region.
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ARTICLE 4
INTERCONNECTION ASSETS
4.1 Reservation of Rights to Interconnection Assets
Except as provided in Section 5.2 hereof, each Party reserves to
itself the
ownership, operation and maintenance of its Interconnection Assets
and all
improvements, additions or extensions to its Interconnection Assets
under this
Agreement which are attributable to or necessitated by the
interconnection of
the Unit.
4.2 Modifications
Either Party may undertake modifications to its assets. In the
event a
Party plans to undertake a modification that may be expected to
impact the other
Party's assets, that Party shall provide the other Party with
sufficient
information regarding such modification, including, without
limitation, the
notice required in accordance with Article 11 of this Agreement so
that the
other Party can evaluate the potential impact of such modification
prior to
commencement of the work. The Party desiring to perform such work
shall provide
the relevant drawings, plans, and specifications to the other Party
at least
ninety (90) days in advance of commencement of the work or such
shorter period
upon which the Parties may agree, which agreement will not
unreasonably be
withheld or delayed.
4.3 As-Built Drawings
Upon
execution of this Agreement, Consumers shall provide to
Transmission
Provider current interconnection drawings and system diagrams for
each of its
Units, unless the Parties agree that such drawings are not
necessary. Subject to
the requirements of Article 17 of this Agreement, not later than
ninety (90)
days after completion of any addition to or modification of the
assets of any of
said Units that may reasonably be expected to affect Transmission
Provider's
System, Consumers shall issue revised "as built" drawings to
Transmission
Provider.
ARTICLE 5
OPERATIONS
5.1 General
Transmission Provider and Consumers agree that they shall comply
with the
Operating Agreement, then-existing (or amended) applicable manuals,
standards,
and guidelines of Transmission Provider, NERC, ECAR, or any
successor agency
assuming or charged with similar responsibilities related to the
operation and
reliability of the North American electric interconnected
transmission grid. To
the extent that this Agreement does not specifically address or
provide the
mechanisms necessary to comply with such Operating Agreement,
Transmission
Provider, NERC or ECAR manuals, standards, or guidelines,
Transmission Provider
and Consumers hereby agree that both Parties shall provide to the
other Party
all such information as may reasonably be required to comply with
such Operating
Agreement, manuals, standards, or guidelines and shall operate, or
cause to be
operated, their respective assets in accordance with such Operating
Agreement,
manuals, standards, or guidelines.
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Transmission Provider and Consumers agree that specific
transmission system
operating limitations required to satisfy Nuclear Regulatory
Commission
Operating License and Design requirements applicable to the
Palisades Nuclear
Plant are identified in a separate agreement, attached hereto as
Exhibit C, and
shall be adhered to by both Parties.
5.2 Transmission Provider Obligations
Transmission Provider
shall operate and control Transmission Provider's
System and other Transmission Provider assets in a safe and
reliable manner (a)
in accordance with Transmission Provider's applicable operational
and/or
reliability criteria, protocols, and directives (which include
those of NERC and
ECAR), (b) the Operating Agreement and (c) in accordance with the
provisions of
this Agreement. From time to time, Consumers will control and
operate six 345 kV
synchronizing circuit breakers (Nos. 32H9 and 32R8 in the Campbell
345 kV
Substation and Nos. 28H9, 28R8, 32F7 and 32H9 in the Hampton
Substation) to
connect or disconnect the Campbell 3, Karn 3 or Karn 4 Units, as
the case may
be, from the transmission system. The Parties may agree from time
to time that
Consumers, under the direction of the Transmission Provider, will
operate
certain other Interconnection Assets of the Transmission
Provider.
5.3 Consumers Obligations
Consumers shall operate and control its Generation Resources in a
safe and
reliable manner in accordance with (a) Consumers' applicable
operational and/or
reliability criteria, protocols, and directives (which shall
include those of
NERC and ECAR), the Operating Agreement and (c) the provisions of
this
Agreement.
5.4 Jointly Owned Assets
Operation of Jointly Owned Assets at the electric substations
where
Interconnection Facilities are located will be under the direction
and control
of the Party with more than fifty percent (50%) of the major
equipment at each
such location, unless otherwise agreed by the Parties hereto. Said
Party shall
operate the Jointly Owned Assets in a manner consistent with Good
Utility
Practice and the provisions of Sections 5.2 and 5.3 above, as
appropriate. Each
Party's respective share of responsibility for the costs of
operation of Jointly
Owned Assets shall be the same percentage as the percentage of
major equipment
owned by such Party in that substation, as set forth in Exhibit B
and its
subsequent addendum's. For purposes of this Agreement, major
equipment is
defined as (a) main power transformers, (b) 23 kV, 46 kV, 138 kV
and 345 kV
circuit breakers, (c) power system regulators and reclosers and (d)
46 kV and
138 kV capacitor banks (any three-phase installation of such
equipment shall
count as one unit of equipment). Exhibit B shall be updated with an
addendum at
least annually by the Transmission Provider, and approved in
writing by
Consumers, to show all changes in equipment and the effects of such
changes on
the determination of Jointly Owned Asset percentages. In the case
where each
Party hereto owns exactly fifty percent (50%) of the major
equipment at any
specific location, the Transmission Provider shall assume the
responsibility for
direction and control of the operation activities as such location.
In those
substations where each Party hereto owns assets, each Party shall
be responsible
for its appropriate share, as set forth in Exhibit B hereto, of
station power
energy usage and expense.
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5.5 Access Rights
The
Parties shall provide each other such access rights as may be
necessary
for either Party's performance of its respective operational
obligations under
this Agreement; provided that, notwithstanding anything stated
herein, a Party
performing operational work within the boundaries of the other
Party's assets
must abide by the rules applicable to that site.
5.6 Switching and Tagging Rules
The
Parties shall abide by their respective Switching and Tagging Rules
for
obtaining clearances for work or for switching operations on
assets. The Parties
will adopt mutually agreeable Switching and Tagging Rules prior to
the effective
date of this Agreement.
5.7 Black Start Participation
In
accordance with Good Utility Practice, Consumers agrees to
participate
in Transmission Provider's Black Start Plan, as well as any
verification
testing. Nothing in this Agreement obligates a particular Unit to
provide Black
Start Service. Transmission Provider's Black Start Plan shall place
the highest
possible priority on energizing those portions of the Transmission
Provider's
System which are required to transmit power from designated Black
Start Unit or
Units to the Palisades switchyard in the event of a loss of all
offsite power to
the Palisades Nuclear plant. Consumers shall identify the minimum
capacity
necessary to meet Nuclear Regulatory Commission License and Design
requirements
for the Palisades Nuclear plant, and the specific Unit or Units
which are
designated to provide the required capability.
5.8 Reactive Power
The
supply and absorption of reactive power is dealt with in the
Purchase
and Sale Agreement for Ancillary Services between the Parties
hereto.
5.9 System Security
During an Emergency on Transmission Provider's System or on an
adjacent
transmission system, the System Operator has the authority to
direct Consumers
to increase or decrease real power production (measured in MW)
and/or reactive
power production (measured in MVAR), within the design and
operational
limitations of any of Consumers' Generation Resources in service at
the time, in
order to maintain security on Transmission Provider's System. In
the event of
such a declaration of an Emergency, determinations: (a) that
Transmission
Provider's System security is in jeopardy, and/or (b) that there is
a need to
increase or decrease reactive power production, even if real power
production is
adversely affected, will be made solely by the System Operator or
his designated
representative. Each Unit operator will honor System Operator's
orders and
directives concerning said Unit's real power and/or reactive power
output within
design and operational limitations of the Unit's equipment in
service at the
time, such that the security of Transmission Provider's System is
maintained.
Transmission Provider shall restore Transmission Provider's System
conditions to
normal to alleviate any such Emergency, in accordance with Good
Utility
Practice. Consumers will be compensated by Transmission Provider
for increasing
or decreasing the
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real power output of any of its Units as directed by the System
Operator to
support Transmission Provider's System during an Emergency by the
payment of (a)
Consumers' Incremental Cost associated with such increase or
decrease in real
power output or (b) at such other rate filed by Consumers and
approved by the
Commission. Similarly, if the Transmission Provider requests any of
Consumers'
Units to provide or absorb reactive power that would be outside of
the Unit's
Reactive Design Limitations, requiring the Unit's real power output
to be
reduced to obtain the desired reactive power, Transmission Provider
shall
compensate Consumers at the real power rate discussed in the
preceding sentence,
to the extent that the Unit had to reduce real power output to
operate within
its Reactive Design Limitations, unless otherwise provided in
another agreement
or tariff on file with the Commission.
5.10 Consumers Voltage Regulation
Consumers shall have sufficient voltage regulation at each Unit to
maintain
an acceptable voltage level for the equipment at the Unit during
periods of time
that the Unit's generation is off line.
5.11 Protection and System Quality
Consumers shall, at its expense, install, maintain, and operate
System
Protection Assets, including such protective and regulating devices
as are
identified by order, rule or regulation of any duly constituted
regulatory
authority having jurisdiction, or as are otherwise necessary to
protect
personnel and assets and to minimize deleterious effects to
Transmission
Provider's electric service operation arising from the Unit.
Transmission
Provider shall install any such protective or regulating devices
that may be
required on Transmission Provider's assets in connection with the
operation of
the Unit at Consumers' expense.
5.11.1 Requirements for Protection. In compliance with applicable
NERC,
ECAR and Transmission Provider's requirements, Consumers shall
provide, own, and
maintain relays, circuit breakers and all other devices necessary
to promptly
remove any fault contribution of the Unit to any short circuit
occurring on
Transmission Provider's System not otherwise isolated by
Transmission Provider's
assets. Such protective assets shall include, without limitation,
a
disconnecting device or switch with visible blade disconnect and
load
interrupting capability to be located between the Unit and
Transmission
Provider's System at an accessible, protected, and satisfactory
site selected
upon mutual agreement of the Parties. The present integrated system
provides for
fault clearing at the generation substations. Unit protection may
not be able to
detect all short circuits, but the Parties agree that no other
arrangements
shall be required. Consumers shall be responsible for protection of
the Unit and
Consumers' other associated assets from such conditions as negative
sequence
currents, over- or under-frequency, sudden load rejection, over-
or
under-voltage, and generator loss-of-field. Consumers shall be
solely
responsible for provisions to disconnect the Unit and Consumers'
other
associated assets when any of the disturbances described above
occur on
Transmission Provider's System.
5.11.2 System Power Quality. Consumers' facilities and equipment
shall not
cause excessive voltage flicker nor introduce excessive distortion
to the
sinusoidal voltage or current waves. Power output from and input to
the Unit
shall be in accordance with the power quality
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standards contained in IEEE Standards 141 (voltage flicker) and 519
(harmonics).
Consumers' facilities and equipment have been designed and
constructed in
accordance with then-existing standards so as not to cause
excessive voltage
excursions nor cause the voltage to drop below or rise above the
range
maintained by Transmission Provider in the absence of Consumers'
facilities and
equipment at the time the Unit first went into service.
5.11.3 Inspection. Subject to the confidentiality provisions set
forth in
Article 17, Transmission Provider shall have the right, but shall
have no
obligation or responsibility to (a) observe Consumers' tests and/or
inspection
of any of Consumers' protective assets directly connected to
Transmission
Provider's System or interfacing with Transmission Provider's
protective assets,
(b) review the settings of any of Consumers' protective assets; and
(c) review
Consumers' maintenance records relative to Consumers' protective
assets.
Transmission Provider may exercise the foregoing rights from time
to time as
deemed necessary by Transmission Provider upon reasonable notice to
Consumers.
However, the exercise or non-exercise by Transmission Provider of
any of the
foregoing rights of observation, review or inspection shall be
construed neither
as an endorsement or confirmation of any aspect, feature, element,
or condition
of the Unit or Consumers' protective assets or the operation
thereof, nor as a
warranty as to the fitness, safety, desirability, or reliability of
same.
5.12 Outages, Interruptions, and Disconnection
5.12.1 Outage Authority and Coordination. In accordance with Good
Utility
Practice, each Party may, in close cooperation with the other and
upon providing
notice per Section 20.2, remove from service its assets that may
impact the
other Party's assets as necessary to perform maintenance or testing
or to
install or replace assets. Absent the existence or imminence of an
Emergency,
the Party scheduling a removal of a facility from service will
schedule such
removal on a date mutually acceptable to both Parties. Further, the
Transmission
Provider shall use its best efforts to coordinate the scheduling of
maintenance
on its Interconnection Assets to coincide with Consumers scheduled
maintenance
on its Units that may be impacted by the Transmission Provider's
maintenance.
5.12.2 Outage Restoration.
5.12.2.1 Unplanned Outage. In the event of an unplanned outage of
a
Party's facility that adversely affects the other Party's assets,
the Party
that
owns or controls the facility out of service will use
commercially
reasonable efforts to promptly restore that facility to
service.
5.12.2.2 Planned Outage. In the event of a planned outage of a
Party's
facility that adversely affects the other Party's assets, the Party
that
owns
or controls the facility out of service will use commercially
reasonable efforts to promptly restore that facility to service and
in
accordance with its schedule for the work that necessitated the
planned
outage.
5.12.3 Interruption. If at any time, in Transmission Provider's
reasonable
judgment, the continued operation of the Unit would cause an
Emergency,
Transmission Provider may curtail, interrupt, or reduce energy
delivered from
the Unit to Transmission Provider's System until the condition
which would cause
the Emergency is corrected. Transmission Provider
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shall give Consumers as much notice as is reasonably practicable of
Transmission
Provider's intention to curtail, interrupt, or reduce energy
delivery from the
Unit in response to a condition that would cause an Emergency and,
where
practicable, allow suitable time for the Parties to remove or
remedy such
condition before any such curtailment, interruption, or reduction
commences. In
the event of any curtailment, interruption, or reduction,
Transmission Provider
shall promptly confer with Consumers regarding the conditions that
gave rise to
the curtailment, interruption, or reduction, and Transmission
Provider shall
give Consumers Transmission Provider's recommendation, if any,
concerning the
timely correction of such conditions. Transmission Provider shall
promptly cease
the curtailment, interruption, or reduction of energy delivery when
the
condition that would cause the Emergency ceases to exist.
5.12.4 Disconnection.
5.12.4.1 Disconnection after Agreement Terminates. Upon termination
of
the
Agreement, Transmission Provider may disconnect Consumers'
Generation
Resources from Transmission Provider's System in accordance with a
plan for
disconnection upon which the Parties agree.
5.12.4.2 Disconnection in Event of Emergency. Subject to the
provisions of Subsection 5.12.4.3 of this Agreement, Transmission
Provider
or
Consumers shall have the right to disconnect the Unit without
notice if,
in
Transmission Provider's or Consumers' sole opinion, an Emergency
exists
and
immediate disconnection is necessary to protect persons or
property
from
damage or interference caused by Consumers' interconnection or lack
of
proper or properly operating protective devices. For purposes of
this
Subsection 5.12.4.2, protective devices may be deemed by
Transmission
Provider to be not properly operating if Transmission Provider's
review
under Article 6 of this Agreement has disclosed irregular or
otherwise
insufficient maintenance on such devices or that maintenance
records do not
exist or are otherwise insufficient to demonstrate that
adequate
maintenance has been and is being performed.
5.12.4.3 Disconnection after Under-frequency Load Shed Event.
NERC
Planning Criteria require the interconnected transmission system
frequency
be
maintained between 59.95 Hz and 60.05 Hz. In case of an
under-frequency
system disturbance, Transmission Provider's System is designed
to
automatically activate a five-tier load shed program. The five load
sheds
occur at 59.5, 59.3, 59.1, 58.9 and 58.7 Hz, respectively. For
those Units
that
are determined by Transmission Provider to be large enough to
impact
the
Transmission Provider's System security, each such Unit shall
be
capable of under-frequency operation as specified in Appendix 1
"Isolation
of
Generating Units" contained in ECAR Document No. 3 - Emergency
Operations, or a higher under-frequency set point if already in
place upon
execution of this Agreement. Upon notice from Consumers and if
the
Transmission Provider agrees, Consumers may implement a higher
under-frequency relay set point if necessary to protect its assets
for a
particular Unit or Units.
5.12.5 Continuity of Service. Notwithstanding any other provision
of this
Agreement, Transmission Provider shall not be obligated to accept,
and
Transmission Provider may
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require Consumers to curtail, interrupt or reduce deliveries of
energy if such
delivery of energy impairs Transmission Provider's ability to
construct,
install, repair, replace or remove any of its equipment or any part
to its
system or if Transmission Provider determines that curtailment,
interruption or
reduction is necessary because of Emergencies, forced outages,
operating
conditions on its system, or any reason otherwise permitted by
applicable rules
or regulations promulgated by a regulatory agency having
jurisdiction over such
matters. The Parties shall coordinate, and if necessary negotiate
in good faith,
the timing of such curtailments, interruptions, reductions or
deliveries with
respect to maintenance, investigation or inspection of Transmission
Provider's
assets or system. Consumers reserves all rights under the Federal
Power Act and
applicable other federal and state laws and regulations to commence
a complaint
proceeding or other action with the Commission or other
Governmental Authority
with appropriate jurisdiction over the Parties to enforce the
provisions of this
Subsection 5.12.5.
5.12.6 Curtailment Notice. Except in case of Emergency, in order
not to
interfere unreasonably with the other Party's operations, the
curtailing,
interrupting or reducing Party shall give the other Party
reasonable prior
notice of any curtailment, interruption or reduction, the reason
for its
occurrence, and its probable duration.
5.13 Operating Expenses
Consumers shall reimburse Transmission Provider for all direct and
indirect
costs and expenses (including but not limited to telephone circuit
charges,
property taxes, insurance and assets testing) incurred by
Transmission Provider
in operating Transmission Provider's Interconnection Assets, to the
extent that
Transmission Provider is not otherwise recovering such costs and
expenses under
the Tariff. Such costs and expenses shall be determined by
Transmission Provider
in accordance with the standard practices and policies followed by
Transmission
Provider for the performance of work for others in effect at the
time such
operation work is performed. Payment by Consumers shall be made in
accordance
with the provisions of Article 12 hereof.
ARTICLE 6
MAINTENANCE
6.1 Transmission Provider's Obligations
Transmission Provider shall maintain its assets, to the extent they
might
reasonably be expected to have an impact on the operation of the
Unit (a) in a
safe and reliable manner in accordance with applicable operational
and/or
reliability criteria, protocols, and directives (which include
those of NERC and
ECAR), (b) in accordance with the provisions of the Operating
Agreement and (c)
in accordance with the provisions of this Agreement.
6.2 Consumers' Obligations
Consumers shall maintain its assets, to the extent they might
reasonably be
expected to have an impact on the operation of Transmission
Provider's System
(a) in a safe and reliable manner in accordance with applicable
operational
and/or reliability criteria, protocols, and directives (which
include those of
NERC and ECAR), (b) in accordance with the
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provisions of the Operating Agreement and (c) in accordance with
the provisions
of this Agreement.
6.3 Jointly Owned Assets
Maintenance of Jointly Owned Assets at the electric substations
where
Interconnection Facilities are located will be under the direction
and control
of the Party with more than fifty percent (50%) of the major
equipment at each
such location, unless otherwise agreed by the Parties hereto. Said
Party shall
maintain the Jointly Owned Assets in a manner consistent with Good
Utility
Practice and the provisions of Sections 6.1 and 6.2 above, as
appropriate. Each
Party's respective share of responsibility for the costs of
maintenance of
Jointly Owned Assets shall be the same percentage as the percentage
of major
equipment owned by such Party in that substation, as set forth in
Exhibit B and
its subsequent addendum. For purposes of this Agreement, major
equipment is
defined as set forth in Section 5.4 hereto. Exhibit B shall be
updated with an
addendum at least annually by the Transmission Provider, and
approved in writing
by Consumers, to show all changes in equipment and the effects of
such changes
on the determination of Jointly Owned Asset percentages. In the
case where each
Party hereto owns exactly fifty percent (50%) of the major
equipment at any
specific location, the Transmission Provider shall assume the
responsibility for
direction and control of the maintenance activities at such
location.
6.4 Access Rights
The
Parties shall provide each other such access rights as may be
necessary
for either Party's performance of their respective maintenance
and/or
construction obligations under this Agreement; provided that,
notwithstanding
anything stated herein, a Party performing maintenance and/or
construction work
within the boundaries of the other Party's assets must abide by the
rules
applicable to that site.
6.5 Maintenance Expenses
Consumers shall reimburse Transmission Provider for all direct and
indirect
costs and expenses (including but not limited to inspection, repair
and
replacement) incurred by Transmission Provider in maintaining
Transmission
Provider's Interconnection Assets, to the extent that Transmission
Provider is
not otherwise recovering such costs and expenses under its Tariff.
Such costs
and expenses shall be determined by Transmission Provider in
accordance with the
standard practices and policies followed by Transmission Provider
for the
performance of work for others in effect at the time such operation
work is
performed. Payment by Consumers shall be made in accordance with
the provisions
of Article 12 of this Agreement.
6.6 Coordination
The Parties agree to
confer regularly to coordinate the planning and
scheduling of preventative and corrective maintenance. Each Party
shall conduct
preventive and corrective maintenance activities as planned and
scheduled in
accordance with this Section 6.5 and the Operating Agreement.
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6.7 Inspections and Testing
Each
Party shall perform routine inspection and testing of its assets
in
accordance with Good Utility Practice as may be necessary to ensure
the
continued interconnection of each Unit with Transmission Provider's
System in a
safe and reliable manner.
6.8 Right to Observe Testing
Each
Party shall, at its own expense, have the right to observe the
testing
of any of the other Party's assets whose performance may reasonably
be expected
to affect the reliability of the observing Party's assets. Each
Party shall
notify the other Party in advance of its performance of tests of
its assets, and
the other Party may have a representative attend and be present
during such
testing.
6.9 Secondary Systems
Each
Party agrees to cooperate with the other in the inspection,
maintenance, and testing of those Secondary Systems directly
affecting the
operation of a Party's assets which may reasonably be expected to
impact the
other Party. Each Party will provide advance notice to the other
Party before
undertaking any work in these areas, especially in electrical
circuits involving
circuit breaker trip and close contacts, current transformers, or
potential
transformers.
6.10 Observation of Deficiencies
If a
Party observes any deficiencies or defects on, or becomes aware of
a
lack of scheduled maintenance and testing with respect to, the
other Party's
assets that might reasonably be expected to adversely affect the
observing
Party's assets, the observing Party shall either (a) provide notice
to the other
Party that is prompt under the circumstance or (b) deem such
observation an
Emergency to life or property and immediately disconnect the Unit
pursuant to
Subsection 5.12.4.2 of this Agreement, and the other Party shall
make any
corrections required in accordance with Good Utility Practice.
ARTICLE 7
EMERGENCIES
7.1 Obligations
Each
Party agrees to comply with NERC and ECAR Emergency procedures
and
Transmission Provider and Consumers Emergency procedures, as
applicable, with
respect to Emergencies.
7.2 Notice
Transmission Provider shall provide Consumers with oral
notification that
is prompt under the circumstances of an Emergency that may
reasonably be
expected to affect
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Consumers' operation of any or all of its Generation Resources, to
the extent
Transmission Provider is aware of the Emergency. Consumers shall
provide
Transmission Provider with oral notification that is prompt under
the
circumstances of an Emergency that may reasonably be expected to
affect
Transmission Provider's System, to the extent Consumers is aware of
the
Emergency. In lieu of oral notification described in the preceding
two
sentences, the Parties may agree in advance to use other electronic
notification
means. To the extent the Party becoming aware of an Emergency is
aware of the
facts of the Emergency, such notification s
