FORM OF DISTRIBUTION-TRANSMISSION INTERCONNECTION AGREEMENT

Exhibit 10.61

Exhibit 1.1 -D

FORM OF DISTRIBUTION-TRANSMISSION
INTERCONNECTION AGREEMENT

and

Interstate Power and Light Company

Dated as of December 17, 2007

TABLE OF CONTENTS

		Page
Article 1. Definitions			1
Article 2. Operational Requirements			7
Article 3. Operation and Maintenance			10
Article 4. Supervisory Control and Data Acquisition, SCADA			15
Article 5. Revenue Metering			16
Article 6. Protective Relaying and Control			19
Article 7. Planning and Obligation to Serve			21
Article 8. New Construction and Modification			23
Article 9. Access to Facilities			24
Article 10. Notifications and Reporting			25
Article 11. Safety			26
Article 12. Environmental Compliance and Procedures			27
Article 13. Billings and Payment			28
Article 14. Applicable Regulations and Interpretation			29
Article 15. Force Majeure			29
Article 16. Limitation of Liability			30
Article 17. Indemnification			30
Article 18. Insurance			31
Article 19. Several Obligations			32
Article 20. Confidentiality			32
Article 21. Breach, Default and Remedies			34
Article 22. Term			36
Article 23. Amendment			37
Article 24. Assignment/Change in Corporate Identity			37
Article 25. Subcontractors			38
Article 26. Dispute Resolution			38
Article 27. Miscellaneous Provisions			39

EXHIBITS

Exhibit 1		Identification of the Interconnection Points and Equipment
Exhibit 2		Contact Information for Local Distribution Company’s Site Representatives and Transmission Owner’s Site Representatives
Exhibit 3		Transmission Owner Switching Procedures
Exhibit 4		Local Distribution Company Switching Procedures
Exhibit 5		[Reserved]
Exhibit 6		[Reserved]
Exhibit 7		Form of Easement
Exhibit 8		Metering Specifications
Exhibit 9		Dispute Resolution Procedures
Exhibit 10		[Reserved]

FORM OF DISTRIBUTION-TRANSMISSION INTERCONNECTION AGREEMENT

     This Distribution-Transmission Interconnection Agreement (“ Agreement ”) is entered into as of the 17th day of December, 2007 by and between the Interstate Power and Light Company (IPL), an Iowa corporation (“ Local Distribution Company ”), having a place of business at 200 First Street SE, Cedar Rapids, IA, 52401 and ITC Midwest LLC, a Michigan limited liability company (“ Transmission Owner ”). Transmission Owner and Local Distribution Company are individually referred to herein as a “ Party ” and collectively as “ Parties .”

     WHEREAS, pursuant to the Asset Sale Agreement between Transmission Owner and Local Distribution Company, dated as of December 18, 2007 (the “ Asset Sale Agreement ”), Transmission Owner has purchased from Local Distribution Company all elements of the Transmission System that are presently interconnected with the Distribution System;

     WHEREAS, Local Distribution Company will own and/or operate existing and/or new Distribution System facilities from present and/or new locations; and

     WHEREAS the existing Distribution System facilities currently are connected to the Transmission System and Local Distribution Company will continue to connect the existing Interconnection Equipment to the Transmission System on the terms set forth herein; and

     WHEREAS, Transmission Owner requires access to parts of Local Distribution Company’s assets, and Local Distribution Company requires access to parts of Transmission Owner’s assets; and

     WHEREAS, Transmission Owner is willing to continue to own and/or operate the Transmission System in accordance with Good Utility Practice; and

     WHEREAS, the Parties have agreed to execute this mutually acceptable Interconnection Agreement in order to provide interconnection of the Local Distribution Company with the Transmission Owner and to define the continuing rights, responsibilities, and obligations of the Parties with respect to the use of certain of their own and the other Party’s property, assets, and facilities;

     NOW, THEREFORE, in consideration of their respective commitments set forth herein, and intending to be legally bound hereby, the Parties covenant and agree as follows:

Article 1. Definitions

     Wherever used in this Agreement with initial capitalization, the following terms shall have the meanings specified or referred to in this Article 1.

1.1

Agreement means this Distribution-Transmission Interconnection Agreement between Local Distribution Company and Transmission Owner, including all attachments hereto, as the same may be amended, supplemented, or modified in accordance with its terms.

1.2

Asset Sale Agreement shall have the meaning specified in the recitals.

1.3		Black Start Capability shall mean a generating unit that is capable of starting without an outside electrical supply.
1.4		Common Facilities shall mean substation assets at jointly occupied sites that benefit both Local Distribution Company and Transmission Owner, but that are owned by either Local Distribution Company or Transmission Owner individually (the “ Owning Utility ”). Common Facilities include, but are not limited to, perimeter fencing and other barriers, control house(s) and other structures and associated foundations, grading and surfacing, fire protection equipment, Station Power facilities, battery banks, lighting, lightning masts, and grounding to the extent located on the substation properties identified in Exhibit 1.

1.5		Confidential Information shall have the meaning set forth in Section 20.1 hereof.
1.6		Balancing Authority/Control Area means an entity that maintains Resource to Load (as those capitalized terms are defined in the OATT) interchange balance within a Balancing Authority/Control Area and supports interconnection and frequency in real-time.

1.7		Balancing Authority/Control Area Operator shall mean the entity that has the ability and the obligation to operate the Balancing Authority/Control Area to ensure that the aggregate electrical demand and energy requirements of the load are met at all times, taking into account scheduled and reasonably expected unscheduled outages of system elements.
1.8		Dispute shall have the meaning set forth under Section 26.1 hereof.
1.9		Distribution System shall mean the equipment and facilities and the Interconnection Equipment owned by Local Distribution Company and used to deliver power and energy to end users, including transformers, switches, and feeders with an operating voltage of less than 34 kV or such other facilities as may be designated by the applicable regulatory agency. Such facilities are identified in Exhibit 1.
1.10		Distribution Transformer shall mean an electrical transformer that has its secondary low side windings rated at Nominal Voltage of 34 kV or less or such other facilities as may be designated by the applicable regulatory agency. Such facilities are identified in Exhibit 1.
1.11		Due Diligence shall mean the exercise of good faith efforts to perform a required act on a timely basis and in accordance with Good Utility Practice using the necessary technical and personnel resources.
1.12		Easements shall have the meaning set forth under Section 9.2 hereof.
1.13		Effective Date shall be the Closing Date, as defined in the Asset Sale Agreement.
1.14		Eligible Customer shall have the meaning specified in the OATT on file with the FERC.

1.15		Emergency means a condition or situation that, in the reasonable good faith determination of the affected Party based on Good Utility Practice, causes or is reasonably likely to cause an imminent physical threat of danger to life or a significant threat to health, property or the environment.
1.16		ERO means the Electric Reliability Organization certified by FERC, or its successor.
1.17		FERC shall mean the Federal Energy Regulatory Commission or its successor federal agency.
1.18		FERC Standards of Conduct shall mean the standards of conduct set forth in 18 CFR §358 or its successor regulations.
1.19		Force Majeure shall have the meaning set forth under Article 15 hereof.
1.20		Forced Outage shall mean in the case of the Distribution System, taking the Distribution System, in whole or in part, out of service by reason of an Emergency or Network Security Condition, unanticipated failure or other cause beyond the reasonable control of Local Distribution Company, when such removal from service was not scheduled in accordance with Section 3.7.2, and, in the case of the Transmission System, taking the Transmission System, in whole or in part, out of service by reason of an Emergency or Network Security Condition, unanticipated failure, or other cause beyond the reasonable control of Transmission Owner when such removal from service was not scheduled in accordance with Section 3.7.2.
1.21		Good Utility Practice shall mean the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, including compliance with applicable ERO and RRO reliability standards, or any of the practices, methods and acts that, 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 includes all acceptable practices, methods, or acts generally accepted in the region.
1.22		Governmental Authority shall mean any foreign, federal, state, local or other governmental regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, arbitrating body, or other governmental authority; provided such entity possesses valid jurisdictional authority to regulate the Parties and the terms and conditions of this Agreement.
1.23		Interconnection Equipment shall mean all the equipment that is necessary for the interconnection of the Distribution System with the Transmission System as set forth in Exhibit 1 hereto as it may be revised from time to time.
1.24		Interconnection Point(s) shall mean the point(s) at which the Distribution System is connected with the Transmission System, as set forth in Exhibit 1 hereto as it may be revised from time to time.

1.25		Interconnection Service shall mean the services provided by Transmission Owner for the interconnection of the Distribution System with the Transmission System. Interconnection Service does not include the right to transmission service on the Transmission System, which service shall be obtained in accordance with the provisions of the OATT.
1.26		Interconnection Standards shall be those standards provided by Transmission Owner to Local Distribution Company or by mutual agreement of the Parties to establish and maintain interconnected operation in compliance with the applicable standards of ERO, and RRO, and applicable state or federal regulations.
1.27		Interest Rate shall mean the interest rate calculated in accordance with the methodology specified for interest on refunds in the FERC regulations at 18 C.F.R. § 35.19a(a)(2)(iii).
1.28		Jointly Used Assets shall have the meaning specified in Section 3.10.4.
1.29		Knowledge shall mean actual knowledge of the corporate officers or managers of the specified Person charged with responsibility for the particular function as of the Effective Date of this Agreement, or, with respect to any certificate delivered pursuant to this Agreement, the date of delivery of the certificate.
1.30		Local Distribution Company shall mean Interstate Power and Light Company and its successors and assigns.
1.31		Local Distribution Company’s Site Representative shall be that person or persons identified in Exhibit 2 as the point of contact for day-to-day operations of the Distribution System.
1.32		Material Adverse Change shall have the meaning specified in Section 22.3(a).
1.33		MISO shall mean the Midwest Independent Transmission System Operator, Inc., or any successor organization.
1.34		Multiple Use Transmission Structures shall have the meaning specified in Section 3.12.
1.35		Network Security shall mean the ability of the Transmission System to withstand sudden disturbances such as unforeseen conditions, electric short circuits or unanticipated loss of system elements consistent with reliability principles used to design, plan, operate, and assess the actual or projected reliability of an electric system that are (i) established by any Governmental Authority, ERO, or RRO and (ii) implemented by Transmission Owner or required of Transmission Owner to be in compliance with Reliability Coordinator directives.
1.36		Network Security Condition shall mean a condition or situation in which, in the reasonable good faith determination of Transmission Owner, Network Security is not satisfied or is threatened.

1.37		Nominal Voltage shall mean an accepted standard voltage level offered by Transmission Owner, at various points on the Transmission System, including but not limited to 34.5 kV, 69 kV, 115 kV, 138 kV, 161 kV, 230 kV, and 345 kV.
1.38		Normal System Condition shall mean any operating conditions of the Transmission System other than an Emergency or Network Security Condition.
1.39		Open Access Transmission Tariff or OATT shall mean the Open Access Transmission Tariff on file with FERC under which transmission service is provided using the Transmission System. Presently the effective OATT is the MISO Transmission and Energy Markets Tariff.
1.40		Owning Utility shall have the meaning set forth in Section 1.4.
1.41		Party and Parties shall have the meanings set forth in the introductory paragraph of this Agreement.
1.42		Person shall mean any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, or governmental entity or any department or agency thereof.
1.43		Planned Outage shall mean action by: (i) Local Distribution Company to take its equipment, facilities or systems out of service, partially or completely, to perform work on specific components that is scheduled in advance and has a predetermined start date and an approximate duration pursuant to the procedures set forth in Section 3.7.4, or (ii) Transmission Owner to take its equipment, facilities and systems out of service, partially or completely, to perform work on specific components that is scheduled in advance and has a predetermined start date and an approximate duration pursuant to the procedures set forth in Section 3.7.4.
1.44		Protective Relay is a device that detects abnormal power system conditions and, in response, initiates automatic control action.
1.45		Protective Relay System is a group of Protective Relays and associated sensing devices and communications equipment that detects system abnormalities and performs automatic control action to mitigate or reduce adverse effects of such abnormalities.
1.46		Qualified Personnel shall mean individuals trained for their positions pursuant to Good Utility Practice.
1.47		Release shall mean spill, leak, discharge, dispose, pump, pour, emit, empty, inject, leach, dump, or allow to escape into or through the environment.
1.48		Reliability Coordinator shall mean the ERO-approved entity that provides the security assessment and emergency operations coordination for one or more Balancing Authority/Control Areas or Transmission Owners and that has operational authority over Transmission Owner under ERO standards. Presently the Reliability Coordinator is MISO.

1.49		Revenue Quality Metering System shall mean a system that includes current and voltage instrument transformers, secondary wiring, test switches, meter transducer(s), meter and loss compensation as set forth in Article 5.
1.50		RRO shall mean the applicable regional reliability organization, or its successor. Presently the RRO is the Midwest Reliability Organization.
1.51		RTO shall mean a Regional Transmission Organization, as designated by FERC. Presently the RTO is MISO.
1.52		RTU — Remote Terminal Unit shall mean a device connected by a communication system to one or more master computers with appropriate software placed at various locations to collect data and perform remote control. A Remote Terminal Unit may also perform intelligent autonomous control of electrical systems and report the results back to the master computer(s).
1.53		Shared Distribution Substations shall have the meaning specified in Section 3.10.2.
1.54		Shared Transmission Stations shall have the meaning specified in Section 3.10.1.
1.55		Station Power shall be the energy needed to serve the auxiliary loads within the substation, including heating, lighting service to panels, etc at a Shared Transmission or Shared Distribution substation.
1.56		Supervisory Control and Data Acquisition (SCADA)  shall mean a system that provides data acquisition, supervisory control and alarm display and control from remote field locations to control centers.
1.57		Surviving Distribution Entity shall have the meaning specified in Section 24.2.
1.58		Surviving Transmission Entity shall have the meaning specified in Section 24.1.
1.59		System Restoration Plan shall mean a plan utilizing Black Start Capability designed and implemented by Transmission Owner in conjunction with its interconnected generation and distribution customers, Balancing Authority/Control Area Operators, other electric systems, Reliability Coordinator and RRO to energize portions of the Transmission System that are de-energized as a result of a widespread system disturbance.
1.60		Term shall have the meaning set forth in Section 22.1 hereof.
1.61		Transmission Owner shall mean ITC Midwest LLC and its successors and assigns.
1.62		Transmission Owner’s Site Representative shall be that person or persons identified in Exhibit 2 as the point of contact of day-to-day operations of the Transmission System.
1.63		Transmission System shall mean all facilities of Transmission Owner through which Transmission Owner provides transmission service under the OATT.

1.64

Transmission System Operations Center(s) shall mean the Transmission System control center(s) that is/are responsible for monitoring and controlling the Transmission System in real time.

Article 2. Operational Requirements

2.1		Subject to the terms and conditions of this Agreement, Transmission Owner shall provide Local Distribution Company Interconnection Service for each Interconnection Point identified in Exhibit 1, from the Effective Date for the Term of this Agreement.
2.2		The Interconnection Points between the Transmission System and Distribution System, including the locations thereof and all associated equipment are described and shown on Exhibit 1 hereto. The Parties shall amend Exhibit 1 to reflect additions to or modifications of any Interconnection Points or any such equipment.
2.3		Exhibit 2 shall list Local Distribution Company’s Site Representatives and Transmission Owner’s Site Representatives, as may be modified from time to time by the respective Parties.
2.4		Interconnection Standards .

	2.4.1		The Interconnection Point(s) shall be established and maintained in accordance with Good Utility Practice and Federal, State, ERO, RRO and RTO standards and policies applicable to Transmission Owner’s interconnection service to Local Distribution Company.
	2.4.2		Reactive Power . Transmission Owner and Local Distribution Company recognize and further agree that Local Distribution Company and Transmission Owner have a mutual responsibility for maintaining voltage at each Interconnection Point, in accordance with applicable ERO Standards, Reliability Coordinator and RRO protocols and policies:

	(i)		Local Distribution Company shall maintain a system average power factor of at least 98% leading or lagging, as measured at the distribution side of the Interconnection Point(s), at load levels greater than 90% of the Local Distribution Company’s monthly system peak load.
	(ii)		Local Distribution Company shall maintain a system average power factor between 90% leading and 90% lagging, as measured at the distribution side of the Interconnection Point(s), at load levels less than 90% of the Local Distribution Company’s monthly system peak load.
	(iii)		The Transmission Owner shall have the ability to request the Local Distribution Company to correct power factor(s) at delivery points in an area or region requiring reactive support. Local Distribution Company shall use reasonable efforts to correct power factor in a timely fashion.

	(iv)		Transmission Owner recognizes that there may be situations where power factor correction is best accomplished on the Transmission System. The Transmission Owner shall use reasonable efforts to make appropriate changes to the system to compensate for reactive power losses.
	(v)		The Parties agree to cooperate in the installation and management of reactive power resources connected to their respective systems.

2.5

(a) Local Distribution Company shall comply with Transmission Owner’s operating requirements and/or switching procedures. Such operating requirements and switching procedures are set forth in Exhibit 3.

	(b)		Transmission Owner shall comply with Local Distribution Company’s operating requirements and/or switching procedures. Such operating requirements and switching procedures are set forth in Exhibit 4.
	(c)		Representatives of Local Distribution Company and Transmission Owner shall meet annually to review both Parties’ operating requirements and switching procedures set forth in Exhibits 3 and 4 and adopt any mutually agreed amendments to Exhibits 3 and 4 in accordance with the requirements of Section 23.2.

2.6		Local Distribution Company shall be required to comply in all respects with the requests, orders, directives and requirements of Transmission Owner including those issued to implement directives of the Reliability Coordinator. Any such requests, orders, directives or requirements of Transmission Owner or the Reliability Coordinator must be: (a) issued pursuant to Good Utility Practice, (b) not unduly discriminatory, (c) otherwise in accordance with applicable tariffs or applicable federal, state or local laws, and (d) reasonably necessary to maintain the integrity of the Transmission System.
2.7		Transmission Owner shall verbally notify Local Distribution Company if Transmission Owner is unable to comply with Section 2.5(b) at any time during the Term of this Agreement. If the failure to comply is due to Local Distribution Company’s actions or inactions, Transmission Owner will verbally notify Local Distribution Company to correct such condition as soon as possible.
2.8		Load Shedding

2.8.1

Local Distribution Company shall install and/or maintain automatic under-frequency load shedding equipment as required to maintain compliance with mandatory standards set forth by ERO, and RRO.

(i)

Transmission Owner recognizes that as of the date of this contract the Local Distribution Company has a large portion of its under-frequency load that is shed from the Transmission System. The Parties agree that the Local Distribution Company will transition all or most of its under

			frequency load to the Distribution System on a schedule mutually agreed to by the Parties.
	(ii)		Transmission Owner agrees to perform all required testing and maintenance of the under-frequency load shedding equipment that is installed on the Transmission System and provide the test data and maintenance records to the Local Distribution Company. Local Distribution Company will reimburse Transmission Owner for any expenses incurred that are in excess of the Transmission Owner’s normal maintenance practices.

	2.8.2		Local Distribution Company shall install and/or maintain under-voltage load shedding equipment as required to maintain compliance with mandatory standards set forth by ERO, and RRO. The equipment selection and location shall be determined by mutual agreement of the Parties.
	2.8.3		If directed to do so by the Reliability Coordinator or Transmission Owner, Local Distribution Company shall shed load to maintain the reliability and integrity of the Transmission System, provided that the Reliability Coordinator or Transmission Owner shall make load-shedding determinations on an equitable, non-discriminatory basis with respect to all loads interconnected with the Transmission System whose interruption is necessary to permit safe and reliable operation and maintenance of the Transmission System;.

2.9

Not a Reservation for Transmission Service

	2.9.1		Local Distribution Company, as an Eligible Customer under the OATT, shall be responsible for making arrangements under the OATT for transmission and any ancillary services associated with the delivery of capacity and/or energy purchased or produced by Local Distribution Company, which services shall not be provided under this Agreement.
	2.9.2		Local Distribution Company and Transmission Owner make no guarantees to each other under this Agreement with respect to the availability of transmission service under the OATT or any other tariff under which transmission service may be available in the region. Nothing in this Agreement shall constitute an express or implied representation or warranty with respect to the current or future availability of transmission service.

2.10

Local Distribution Company, or its agent, shall have and maintain an appropriate agreement with each Balancing Authority/Control Area with responsibility for the load served via an Interconnection Point, under which such Balancing Authority/Control Area shall perform balancing of such load with generation. Local Distribution Company shall provide a copy of each such agreement to Transmission Owner.

Article 3. Operation and Maintenance

3.1		The Parties agree to coordinate the operation of their electrical systems at the Interconnection Points in compliance with Good Utility Practice to prevent or minimize detrimental impacts on either Party’s system. The Parties agree to operate their respective systems in synchronism at the Interconnection Points that are operated closed.
3.2		Each Party shall operate any equipment that might reasonably be expected to have an impact on the operations of the other Party in a safe and efficient manner and in accordance with all applicable federal, state, and local law, operating practices specified by ERO, RRO and Good Utility Practice, and otherwise in accordance with the terms of this Agreement. Each Party shall comply with such reasonable operating requests, orders, directives and requirements of the other Party as are authorized under this Agreement.

3.3

(a)

Without limiting the generality of Section 3.1, Local Distribution Company shall own, operate and maintain the Distribution System in a manner consistent with Good Utility Practice to prevent degradation of voltage or of interconnection service of the Transmission System. Local Distribution Company shall be responsible for the costs of maintaining, operating, repairing or replacing the Distribution System and Local Distribution Company’s Interconnection Equipment.

(b)

Without limiting the generality of Section 3.1, Transmission Owner shall own, operate and maintain the Transmission System in a manner consistent with Good Utility Practice to prevent degradation of voltage or of interconnection service of Local Distribution Company’s Distribution System. Transmission Owner shall be responsible for the costs of maintaining, operating, repairing or replacing the Transmission System and Transmission Owner’s Interconnection Equipment.

3.4

(a)

Except during an Emergency, Local Distribution Company shall not, without prior Transmission Owner authorization, operate any Transmission Owner circuit, including transformer, line or bus elements. Local Distribution Company shall retain the right to operate Transmission Owner equipment during an Emergency to address an imminent threat to the safety of personnel, to maintain the integrity of the Transmission System, to prevent damage to equipment and to maintain the integrity of the Distribution System. When practical, prior to operation of such equipment, Local Distribution Company shall provide immediate notice to Transmission Owner. Local Distribution Company shall not operate any Transmission System circuit if upon notice Transmission Owner expressly refused to grant permission to Local Distribution Company. Within five (5) working days of such Emergency, Local Distribution Company shall provide written explanation of such Emergency to Transmission Owner.

(b)

Except during an Emergency, Transmission Owner shall not, without prior Local Distribution Company authorization, operate any Local Distribution Company circuit, including transformer, line or bus elements. Transmission Owner shall

retain the right to operate Local Distribution Company equipment during an Emergency to address an imminent threat to the safety of personnel, to maintain the integrity of the Transmission System, and to prevent damage to equipment. When practical, prior to operation of such equipment, Transmission Owner shall provide immediate notice to Local Distribution Company. Transmission Owner shall not operate any Distribution System circuit if upon notice Local Distribution Company expressly refused to grant permission to Transmission Owner. Within five (5) working days of such Emergency, Transmission Owner shall provide written explanation of such Emergency to Local Distribution Company.

3.5

Local Distribution Company and Transmission Owner shall design, install, test, calibrate, set, and maintain their respective Protective Relay equipment in accordance with Good Utility Practice, applicable federal, state or local laws, ERO, RRO and RTO requirements and this Agreement, as set forth in Article 6 hereof.

3.6

(a)

If Transmission Owner reasonably determines that (i) any of Local Distribution Company’s Interconnection Equipment fails to perform in a manner consistent with Good Utility Practice and applicable ERO, RRO, and RTO requirements or this Agreement, or (ii) Local Distribution Company has failed to perform proper testing or maintenance of its Interconnection Equipment in accordance with Good Utility Practice or this Agreement, Transmission Owner shall give Local Distribution Company written notice to take corrective action. Such written notice shall be provided by Transmission Owner to Local Distribution Company’s Site Representative as soon as practicable upon such determination. If Local Distribution Company fails to initiate corrective action promptly and in any event within seven (7) days after the delivery of such notification, and if in Transmission Owner’s reasonable judgment leaving Local Distribution Company’s Distribution System connected with Transmission System would create an Emergency or Network Security Condition, Transmission Owner may, with as much prior verbal notification to Local Distribution Company and Balancing Authority/Control Area Operator as practicable, open only the Interconnection Point(s) needing corrective action connecting Local Distribution Company and Transmission Owner until appropriate corrective actions have been completed by Local Distribution Company, as verified by Transmission Owner. Transmission Owner’s judgment with regard to an interruption of service under this paragraph shall be made pursuant to Good Utility Practice and subject to Section 3.1 hereof. In the case of such interruption, Transmission Owner shall immediately confer with Local Distribution Company regarding the conditions causing such interruption and Local Distribution Company’s recommendation concerning timely correction thereof. Both Parties shall act promptly to correct the condition leading to such interruption and to restore the connection.

(b)

If Local Distribution Company reasonably determines that (i) any of Transmission Owner’s Interconnection Equipment fails to perform in a manner consistent with Good Utility Practice and applicable ERO, RRO, and RTO requirements or this Agreement, or (ii) Transmission Owner has failed to perform proper testing or maintenance of its Interconnection Equipment in accordance with Good Utility

Practice or this Agreement, Local Distribution Company shall give Transmission Owner written notice to take corrective action. Such written notice shall be provided by Local Distribution Company to Transmission Owner’s Site Representative as soon as practicable upon such determination. If Transmission Owner fails to initiate corrective action promptly and in any event within seven (7) days after the delivery of such notification, and if in Local Distribution Company’s reasonable judgment leaving Transmission System connected with Local Distribution Company’s Distribution System would create an Emergency, Local Distribution Company may, with as much prior verbal notification to Transmission Owner and Balancing Authority/Control Area Operator as practicable, open only the Interconnection Point(s) needing corrective action connecting Transmission Owner and Local Distribution Company until appropriate corrective actions have been completed by Transmission Owner, as verified by Local Distribution Company. Local Distribution Company’s judgment with regard to an interruption of service under this paragraph shall be made pursuant to Good Utility Practice and subject to Section 3.1 hereof. In the case of such interruption, Local Distribution Company shall immediately confer with Transmission Owner regarding the conditions causing such interruption and Transmission Owner’s recommendation concerning timely correction thereof. Both Parties shall act promptly to correct the condition leading to such interruption and to restore the connection.

3.7

Outages

	3.7.1.		Outage Authority and Coordination . In accordance with Good Utility Practice and applicable ERO, RRO, and RTO requirements, each Party may, in close cooperation with the other, remove from service its system elements that may impact the other Party’s system as necessary to perform maintenance or testing or to replace installed equipment. Absent an Emergency, the Party scheduling a removal of a system element from service will use good faith efforts to schedule such removal on a date mutually acceptable to both Parties, in accordance with Good Utility Practice. The Parties shall comply with RTO procedures relating to notification requirements for scheduled outages.
	3.7.2		The Parties shall coordinate inspections, Planned Outages, and maintenance of their respective equipment, facilities and systems so as to minimize the impact on the availability, reliability and security of both Parties’ systems and operations when any such outage is likely to have a materially adverse impact on the other Party’s system. Subject to the confidentiality provisions of Article 20 and FERC’ s Standard of Conduct, on or before November 1 of each year during the Term hereof, the Parties may exchange non-binding Planned Outage schedules, which shall be developed and followed in accordance with Good Utility Practice, for the following one-year period for the Distribution System and the Transmission System. The Parties shall keep each other updated regarding any changes to such schedules. Each Party shall use commercially reasonable efforts to minimize the costs of any cancellation or rescheduling of a Planned Outage that affects the other Party’s system.

	3.7.3		Forced Outage . In the event of a Forced Outage of a system element of the Distribution System adversely affecting the Transmission System, Local Distribution Company will use Good Utility Practice to restore that system element to service promptly. In the event of a Forced Outage of a system element of the Transmission System adversely affecting the Distribution System, Transmission Owner will use Good Utility Practice to restore that system element to service promptly.
	3.7.4		Planned Outage . In the event of a Planned Outage of a system element of the Distribution System adversely affecting the Transmission System, Local Distribution Company will act in accordance with Good Utility Practice to restore that system element to service promptly in accordance with its schedule for the work that necessitated the Planned Outage. In the event of a Planned Outage of a system element of the Transmission System adversely affecting the Distribution System, Transmission Owner will act in accordance with Good Utility Practice to restore that system element to service promptly in accordance with its schedule for the work that necessitated the Planned Outage.

3.8		The Parties shall use commercially reasonable efforts consistent with Good Utility Practice to coordinate operations in the event of any Forced or Planned Outage.
3.9		System Restoration Plan Participation . In accordance with Good Utility Practice, Local Distribution Company agrees to participate in Transmission Owner’s System Restoration Plan for the Distribution System and the Transmission System, as well as any verification testing of Black Start Capability.
3.10		Shared Transmission Stations and Distribution Substations .

	3.10.1		Each Party shall be responsible for the operation and maintenance of their respective equipment located in stations that house facilities of both the Transmission Owner and Local Distribution Company. In the case where the Transmission Owner is the majority owner of the stations, they shall be referred to as the “ Shared Transmission Stations” and in the case where the Local Distribution Company is the majority owner of the stations, they shall be referred to as the “Shared Distribution Substations ”).
	3.10.2		At least once each year, the Parties shall meet and review the Parties’ respective operational and maintenance responsibilities at all Shared Transmission Stations and Shared Distribution Substations and, if necessary, alter such responsibilities as the Parties deem appropriate.
	3.10.3		Transmission Owner and Local Distribution Company understand and agree that at each Shared Transmission Station or Shared Distribution Substation, there are facilities that each Party utilizes (e.g. station batteries, some protective relay equipment, etc.). These Jointly Used Assets will be owned by the owner of the Shared Station who shall be responsible for operating and maintaining such Jointly Used Assets and for all costs associated with such operation and

			maintenance. Each Party shall operate and maintain their respective Jointly Used Assets in accordance with Good Utility Practice and all applicable provisions of this Agreement.
	3.10.4		Maintenance of Common Facilities . Notwithstanding its obligation to comply with Good Utility Practice, as identified elsewhere in this Agreement, the Owning Utility of Shared Transmission Stations and Shared Distribution Substations shall perform the following maintenance activities with respect to Common Facilities of each substation: (1) maintain the integrity of the perimeter fencing, including code-required signage; (2) maintain the functionality of yard lighting; (3) keep the control house secure and take reasonable efforts to control rodents therein; (4) perform periodic cleaning of the control house in order to minimize equipment damage due to dirt and grit; (5) weatherize control house(s) in the spring and fall in order to maintain proper ventilation and adequate heat and avoid a negative impact on the serviceability of equipment; (6) weed treat the substation yard annually and maintain adequate stone to maintain step and touch potentials at safe levels; and (7) keep station access drives in drivable condition and free of snow and ice, maintaining a path to the control house(s) and around the perimeter of the equipment where possible.

3.11		Station Power . The Parties agree that (i) Local Distribution Company’s system losses include the Station Power supplied by Local Distribution Company to the Purchased Transmission Assets (as defined in the Asset Sale Agreement), and accordingly that (ii) Local Distribution Company shall supply Station Power to the Purchased Transmission Assets at no cost to Transmission Owner. The Transmission Owner may request, from the Local Distribution Company or appropriate service provider, additional Station Power sources to the Purchased Transmission Assets (as defined in the Asset Sale Agreement), or to new transmission station(s). In such circumstances, the provision of such additional Station Power sources shall be subject to the terms and rates of the Local Distribution Company’s, or appropriate service provider’s, applicable tariff for such service.
3.12		Multiple Use Transmission Structures . The Parties acknowledge and understand that the Transmission System includes certain transmission structures with both transmission and distribution lines attached thereto (“Multiple Use Transmission Structures”). With regard to the operation and maintenance of such Multiple Use Transmission Structures, the Parties agree that:

	3.12.1		Subject to Sections 3.12.2 and 3.12.3, Transmission Owner shall allow Local Distribution Company to maintain without charge attachments of those distribution lines existing as of the Effective Date to the Multiple Use Transmission Structures.
	3.12.2		For Facilities that have been designed as Multiple Use Transmission Structures prior to the Effective Date and can accommodate attachment of distribution lines, there shall be no charge by Transmission Owner for attachments.

	3.12.3		Transmission Owner shall be responsible for the costs associated with maintaining, relocating, upgrading or implementing other changes to the transmission structures designated as Multiple Use Transmission Structures; provided , however , that Local Distribution Company shall be responsible for all costs associated with the distribution lines attached to such Multiple Use Transmission Structures, including, but not limited to, costs associated with maintaining, relocating, upgrading or implementing other changes to such distribution lines.
	3.12.4		Transmission Owner shall provide Local Distribution Company reasonable advance notice of any planned change to Multiple Use Transmission Structures that may require Local Distribution Company to relocate or otherwise change its distribution lines attached thereto. If it is necessary under generally accepted utility practice for the Local Distribution Company’s distribution lines to be removed from Multiple Use Transmission Structures then the Transmission Owner shall allow Local Distribution Company’s distribution lines to remain attached to the Multiple Use Transmission Structures for a commercially reasonable period in order to allow Local Distribution Company to develop a suitable alternative for its distribution lines; provided , however , that such interim use of Multiple Use Transmission Structures by Local Distribution Company shall neither impair the provision of non-discriminatory, open access transmission service over the Transmission System nor interfere with any planned additions or upgrades to such facilities proposed by Transmission Owner or directed by the RTO, FERC or any other Governmental Authority with jurisdiction to require such addition or expansion to the Transmission System. Local Distribution Company shall act in good faith and exercise Due Diligence in developing and implementing a suitable alternative for its distribution lines.

Article 4. Supervisory Control and Data Acquisition, SCADA

4.1

Interconnection Points containing SCADA and communications equipment installed prior to the Effective Date shall be considered to satisfy the terms and conditions of this Article 4. Local Distribution Company shall install and operate such SCADA and communications equipment as is necessary consistent with Good Utility Practice, and ERO and RRO requirements for Transmission Owner to perform monitoring, state estimation and contingency analysis for (i) Interconnection Points that existed prior to the Effective Date and did not contain SCADA and communications equipment or (ii) new Interconnection Points installed after the Effective Date. Each Interconnection Point or other mutually agreeable location with SCADA and communications equipment shall have one dedicated communications path to Balancing Authority/Control Area Operator’s control center for the RTU data. Additional data paths and communications equipment requested, either emanating from the substation or the Balancing Authority/Control Area Operator’s control center, will be at the expense of the requestor. The SCADA and communications equipment may provide data and status information in real time or with a time delay acceptable to Transmission Owner and shall provide data and control via an industry standard protocol such as ICCP or another method agreed by

		the Parties. Such data may include, but not be limited to megawatts, megavars, voltage, amperes, device status and communication system status.
4.2		Transmission Owner reserves the right (at Transmission Owner’s expense) to require Local Distribution Company to install or cause to be installed at any new or modified Interconnection Point a dual port RTU within Local Distribution Company’s substation to provide data and control directly to the Transmission Owner. Local Distribution Company will assist in furnishing desired inputs and outputs for such RTU.
4.3		The operating metering system shall consist of instantaneous values of MW, MVAR, voltage and current (amperes). Amperes may be measured directly or calculated based on measured values.

	4.3.1		Values shall be inputted to a Remote Terminal Unit (RTU) or comparable communication device for communication with the Balancing Authority/Control Area Operator.
	4.3.2		Transducers may utilize the voltage transformers and current transformer secondary circuits also utilized by the revenue metering equipment for a particular interconnection. In such case, the performance criteria listed in Exhibit 8 hereto for the voltage transformers and the current transformers shall apply. Relaying class voltage transformers and current transformers are not to be utilized unless mutually agreed by all the owners of the metering equipment and the Balancing Authority/Control Area Operator.
	4.3.3		Transducers shall have at most 0.3% inaccuracy. Transducers shall be field calibrated at least once every ten (10) years, or as necessary, and documentation shall be retained showing the calibration results until three (3) years after the last calibration. The Transmission Owner and Local Distribution Company agree that, as to all Interconnection Points in existence as of the Effective Date, no new or different equipment shall be installed to meet the requirements of this section.

4.4

To the extent new SCADA and associated communications equipment is to be installed, Local Distribution Company shall install or facilitate installation of SCADA and associated communications equipment as soon as practicable, provided that installation shall be accomplished within a time period of no more than 180 days following notice by Transmission Owner or prior to installation of any new Interconnection Points.

Article 5. Revenue Metering

5.1

Local Distribution Company shall own, operate, test and maintain or contract for the metering equipment at the Interconnection Points with Transmission Owner, as required by this Article 5. Transmission Owner and Local Distribution Company agree that, as to all Interconnection Points in existence as of the Effective Date, no new or different metering equipment or arrangements shall be required. For existing Interconnection Points where low-side metering exists without loss compensation, Parties will agree to loss compensation factors. To the extent existing metering equipment is replaced or new metering equipment is installed at Interconnection Points in existence as of the Effective

Date, such replacements or installations shall meet the standards set in Section 5.2. Local Distribution Company shall install metering equipment that meets the standards set forth in Section 5.2 at all new Interconnection Points.

5.2

The Revenue Quality Metering System shall consist of all instrument transformers (current and voltage), secondary wiring, test switches and meter(s) required to determine the metering values for record for any given metering point.

	5.2.1		Metering shall be form 9, 3 element for 4 wire systems and form 5, 2 element for 3 wire systems.
	5.2.2		Meters shall measure, at a minimum, megawatt hours and megavar hours and have bi-directional capability, where applicable. All measured values shall have individual outputs, (such as DNP and KYZ), where applicable and a minimum 35- day interval data recording capability for each measured value.
	5.2.3		Revenue-quality loss-compensated metering shall be acceptable if the metering facilities and the Interconnection Point are not at the same physical location. The metering shall account for real power losses between the location of the meter and the Interconnection Point and no-load losses of the power transformer. Real power losses between the location of the meter and the Interconnection Point must be agreed upon by both parties. The meter data management system for determining such losses shall be MV-90 or an equivalent meter data management system.
	5.2.4		The Party that owns the metering equipment shall maintain records that demonstrate compliance with all meter tests and maintenance conducted in accordance with Good Utility Practice for the life of the Interconnection Point. The non-owning Party shall have reasonable access to the records.
	5.2.5		For installations where the metering is performed using loss compensation, the factory certified test results of the power transformer, including load, no-load losses and calculated meter loss calculations, shall be recorded in writing. The non-owning Party shall have reasonable access to the records. If factory certified test results, including load and no-load losses are not available, then both parties shall endeavor to agree on the loss compensation value.
	5.2.6		Records showing metering instrument transformers’ factory certified or utility test shop test results showing compliance with applicable metering test standards shall be maintained by the meter owner. The non-owning Party shall have reasonable access to the records. Metering transformers must be at least .3% accuracy class.
	5.2.7		A meter’s factory certified or utility test result, showing compliance with applicable metering test standards, shall be maintained by the meter owner. The non-owning Party shall have reasonable access to the records.
	5.2.8		Metering equipment shall be tested by the Party owning said equipment at suitable intervals agreed upon by the Parties. Such test intervals shall not exceed

4 years. The meters’ accuracy shall be maintained at a minimum in accordance with applicable regulatory standards. At the request of either Party, special tests, outside the agreed upon test interval, shall be made. If any special meter test discloses the metering device to be registering within acceptable limits of accuracy as specified herein, then the Party requesting such special meter test shall bear the expense thereof. Otherwise, the expense of such test shall be borne by the owner. Representatives of each Party shall be afforded opportunity to be present at all routine or special tests and upon occasions when any readings for purposes of settlements hereunder are taken from meters not producing an automatic record.

	5.2.9		If, as a result of any test, any meter shall be found to be registering more than one (1) per cent above or below one hundred (100) percent of 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. No meter shall be left in service if found to be more than 0.5 percent above or below one hundred (100) percent of accuracy at series full and light load, unity power factor. Should metering equipment at any time fail to register, the energy delivered shall be determined from the best available data. All meters shall be kept under seal, such seals to be broken only when the meters are to be tested or adjusted.
	5.2.10		Test switches shall be installed to allow independent testing and/or replacement of each meter and transducer utilizing the secondary circuit. No other piece of equipment shall be in the revenue metering secondary circuit.
	5.2.11		In substations where an RTU or other remote data collecting and telecommunication device is present, meters shall have form C, 3-wire outputs with programmable values determined by Local Distribution Company for bi- directional MWHs and MVARs. Such form C, 3 wire outputs shall be connected to an isolation relay before connecting to the RTU. Alternatively, real time SCADA (Watts, Vars, Voltage, PF, Current, Frequency, etc.) and equivalent pulse accumulator values may be electronically ported from the revenue meter to the station RTU when technically feasible and upon agreement of the parties.
	5.2.12		In interconnecting substations where electrical energy is resold to another local distribution company other than the one interconnecting with the Transmission Owner at such substation, revenue meters shall also be equipped with modems connected to a land phone circuit. The land line shall be provided and paid for by Local Distribution Company. Also acceptable is using a meter and equipment so the meter can be accessed by using a TCP/IP address.
	5.2.13		In the event of an interconnection meter needing replacement or repair, a representative from the non-owning party shall be given a reasonable opportunity to be present during such repair or replacement.

5.2.14

Transmission Owner shall have the right to read the revenue meters remotely, and in a secure manner, as reasonably necessary to facilitate billing and calculation and verification of revenues.

Article 6. Protective Relaying and Control

6.1		Transmission Owner shall have the right, using Good Utility Practice, to review and approve all new Protective Relaying logic equipment, including equipment settings, protective relay schemes, drawings, and functionality associated with each Interconnection Point. Local Distribution Company shall have the right, using Good Utility Practice, to review all new Protective Relaying logic equipment, including equipment settings, protective relay schemes, drawings, and functionality associated with each Interconnection Point. Protective Relaying logic equipment and schemes installed before the Effective Date shall be considered to satisfy the terms and conditions of this Article 6. When existing equipment or schemes installed prior to the Effective Date are replaced or when new equipment or schemes are installed pursuant to this Article 6 or in association with new Interconnection Points, then such replacement or installation shall be performed in accordance with the terms and conditions of this Article 6.
6.2		To the extent that there is generation on the Distribution System that, in the reasonable judgment of either Party, may contribute material amounts of current to a fault on the Transmission System, Local Distribution Company shall have and enforce standards to ensure the provision, installation and maintenance of relays, circuit breakers, and all other devices necessary to remove promptly any fault contribution of such generation to any short circuit occurring on the Transmission System and not otherwise isolated by the Transmission Owner equipment. Such protective equipment shall include, without limitation, a disconnecting device or switch with load interrupting capability to be located between the generation and the Transmission System at an accessible, secure, and satisfactory site selected upon mutual agreement of the Parties. Transmission Owner shall not be responsible for protection of such generation.
6.3		Any Protective Relay System that causes any Transmission Owner protective device or Local Distribution Company protective or switching device connected to a Transmission Owner bus to operate shall be maintained and tested in accordance with the provisions of this Article 6.
6.4		Transmission Owner shall, in accordance with Good Utility Practice, own, operate, maintain and test those Protective Relays, current transformers, and potential transformers listed in Exhibit 1 that provide protection for the Transmission System. Local Distribution Company shall, in accordance with Good Utility Practice, own, operate, maintain, and test any remaining Protective Relays governed by this Article 6. The Parties shall maintain, and, as necessary, upgrade their respective Protective Relay Systems in accordance with Good Utility Practice, and each Party shall provide the other Party with access to copies of operation and maintenance manuals and test records for all relay equipment.

6.5		The Parties shall test their respective relays associated with the Interconnection Points for correct calibration and operation in accordance with Good Utility Practice. Complete functional testing of the relay protection schemes shall be performed at the same time. Parties shall coordinate design, installation, operation, and testing of Protective Relay schemes to insure that such relays operate in a coordinated manner so as to not cause adverse operating conditions on the other Party’s system.
6.6		Local Distribution Company shall be responsible for maintenance, calibration and functional testing of Protective Relay systems that protect Local Distribution Company’s equipment associated with the Interconnection Points and that protect Transmission Owner from Local Distribution Company’s Interconnection Equipment to the extent such calibration and testing are consistent with Good Utility Practice. All such maintenance and testing must be performed by Qualified Personnel selected by Local Distribution Company. In addition, Local Distribution Company shall allow Transmission Owner to conduct regularly scheduled, visual inspection of all Protective Relaying and associated maintenance records. Related maintenance and operational records shall be maintained by Local Distribution Company in accordance with Good Utility Practice. Upon completion of all Protective Relay calibration testing and relay functional testing, Local Distribution Company shall make available copies of all test reports and related records for review by Transmission Owner. Local Distribution Company shall review all test reports and document that Protective Relay System’s tests and settings, as shown on such test reports, have been done in accordance with the equipment’s specifications and Good Utility Practice.

6.7	(a)		As Transmission Owner’s system protection requirements change and as system protection technology advances, Transmission Owner will upgrade its Protective Relay System in accordance with Good Utility Practice. If these upgrades affect the serviceability and acceptability of the Protective Relay Systems on the Interconnection Equipment installed, owned, and operated by Local Distribution Company, Local Distribution Company must (at its own expense) upgrade its Protective Relay Systems as necessary to bring them into compatibility with, and adopt the technological standards of, the Protective Relay Systems installed by Transmission Owner. Transmission Owner shall give Local Distribution Company notice of any such upgrade as soon as practicable prior to the anticipated date of such upgrade.
	(b)		As Local Distribution Company’s system protection requirements change and as technology advances, Local Distribution Company will upgrade its Protective Relay System in accordance with Good Utility Practice. If these upgrades affect the serviceability and acceptability of the Protective Relay Systems on the Interconnection Equipment installed, owned, and operated by Transmission Owner, Transmission Owner must (at its own expense) upgrade its Protective Relay Systems as necessary to bring them into compatibility with, and adopt the technological standards of, the Protective Relay Systems installed by Local Distribution Company. Local Distribution Company shall give Transmission Owner notice of any such upgrade as soon as practicable prior to the anticipated date of such upgrade.

(c)

Exhibit 1 shall be updated by the Parties to reflect any changes in Protective Relay Systems as they are made.

6.8		Local Distribution Company shall provide the necessary space to install or expand relay panels for substation system protection if requested by Transmission Owner. Any incremental costs required to accommodate such a request shall be the responsibility of Transmission Owner.
6.9		Transmission Owner shall provide the necessary space to install or expand relay panels for substation system protection if requested by Local Distribution Company. Any incremental costs required to accommodate such a request shall be the responsibility of Local Distribution Company.

Article 7. Planning and Obligation to Serve

7.1

Adequacy Obligation . Subject to applicable regulatory approvals, including the principles of least-cost long-term planning applicable to maintaining the overall reliability of the transmission and distribution system in the planning horizon, and subject to the oversight and direction of the RTO (or any successor regional transmission organization) where applicable, Transmission Owner shall have a public utility duty to operate, maintain, plan and construct the Transmission System so that the system is adequate:

	(a)	(i)		to support effective competition in energy markets without favoring any market participant;
		(ii)		to deliver on a reliable basis the reasonable, projected needs of all loads on the electric distribution systems connected to and dependent upon the Transmission Owner’s facilities for delivery of reliable, low-cost and competitively-priced electricity to such distribution systems; and
		(iii)		to provide needed support to the distribution systems interconnected to the Transmission System; and

(b)

In meeting these obligations, the Transmission Owner shall treat the needs of each electric distribution system interconnected with the Transmission system, and the electric loads on each system in a nondiscriminatory manner. The costs of additions to the Transmission System to meet this adequacy obligation shall not be directly assigned or charged to a distribution system, or to end users separately, unless approved or required by the appropriate regulatory agency.

7.2		Local Distribution Company and Transmission Owner shall discuss, at appropriate intervals, the needs of Local Distribution Company and the plans of Transmission Owner that could affect Local Distribution Company. The Parties agree to cooperate and coordinate as necessary on planning and construction of projects that affect Local Distribution Company.
7.3		If the Parties agree upon the need for any such project, they shall cooperate and coordinate in seeking all necessary regulatory approval for such project. The Parties shall

coordinate and cooperate with each other with respect to all communications and commitments to municipal, county, and state agencies involved in such project.

7.4		If Local Distribution Company proposes construction of a transmission project and Transmission Owner does not agree that such project is needed, Local Distribution Company shall have the right to petition the applicable Governmental Authority for a declaratory ruling on whether the proposed project is needed pursuant to Transmission Owner’s public-utility duty to plan and construct a reliable, adequate system. The Parties agree that the ruling of the applicable Governmental Authority will be binding upon them.
7.5		Load Growth and Reliability Needs . Transmission Owner is obligated to plan and install any Transmission System components that may be necessary to accommodate Local Distribution Company’s planned load growth and planned reliability improvements. Transmission Owner will construct new interconnections with Local Distribution Company facilities in accordance with Transmission Owner’s planning criteria, other agreements in effect between the Parties, and Good Utility Practice. Transmission Owner shall bear the responsibility for such planning and installing in accordance with this Article 7. Transmission Owner’s obligations under this Section 7.5 shall include the planning and installation of any new Interconnection Points that may be necessary to accommodate Local Distribution Company’s planned load growth and planned reliability improvements. Recovery of the cost of such additions shall be in accordance with Section 7.1.
7.6		To facilitate planning and construction discussions under Section 7.2, Local Distribution Company, or its designated representative, shall annually submit the following information, on a commercially reasonable efforts basis, to Transmission Owner:

	(a)		no later than November 1 of each year, the most recent actual summer and winter peak demands in megawatts (MW) and megavars (MVAR) for each Interconnection Point with the Transmission System, coincident with Local Distribution Company’s peak demand for these seasons, and
	(b)		no later than February 1 of each year:

	(i)		seasonal peak demand forecasts (MW and MVAR) for each Local Distribution Company Interconnection Point with the Transmission System for the next ten (10) years as required by the RRO, RTO or ERO for the Transmission Owner’s model; and
	(ii)		planned facility connections (new Interconnection Points) with the Transmission System for the next ten (10) years.

Transmission Owner will treat all information disclosed by Local Distribution Company under this Section 7.6 as Confidential Information

Article 8. New Construction and Modification

8.1		Subject to this Article 8, Transmission Owner may construct additional Transmission System elements or modify the existing Transmission System and Local Distribution Company may construct additional Distribution System elements or modify the existing Distribution System. All such modifications and construction provided for herein, shall be conducted in accordance with Good Utility Practice and all applicable ERO, and RRO standards. Each Party shall only be responsible for the costs to modify its own system elements and the costs to construct new elements of its system and shall not be responsible for the costs imposed on the other party as a result of such modification or new construction. However, during the period while such modification or new construction is under way, the Party modifying system elements or constructing new system elements shall maintain the transmission, distribution and communications capabilities of the other Party using Good Utility Practice to avoid or minimize any adverse impact on the other Party.
8.2		Notwithstanding the foregoing, no modifications to, or new construction of, facilities, or access thereto, including but not limited to rights-of-way, fences, and gates, shall be made by either Party that might reasonably be expected to have a material effect upon the other Party with respect to operations or performance under this Agreement, without providing such other Party (a) prior written notification as set forth in this Article 8, and (b) sufficient information regarding the work prior to commencement to enable such other Party to evaluate the impact of the proposed work on its operations. The information provided must be sufficiently detailed to enable reasonable review by such other Party and satisfy such other Party’s reasonable operational requirements. Each Party shall use reasonable efforts to minimize any adverse impact on the other Party.
8.3		If any Party intends to install any new facilities, equipment, systems, or circuits or any modifications to existing or future facilities, equipment, systems or circuits that could reasonably be expected to have a material effect upon the operation of the other Party, the Party desiring to perform said work shall, in addition to the requirements of Section 8.2, provide the other Party with drawings, plans, specifications and other necessary documentation for review at least 60 days prior to the start of the construction of any such installation. This notice period shall not apply to modifications or new installations made to resolve or prevent pending Emergency or Network Security Conditions.
8.4		The Party reviewing any drawings, plans, specifications, or other necessary documentation shall promptly review the same and provide any comments to the performing Party no later than 30 days prior to the start of the construction of any installation. The performing Party shall incorporate all requested modifications to the extent required to maintain Good Utility Practice and compliance with this Agreement.
8.5		Within 180 days after any modification or construction subject to this Article 8 is placed in service, the Party initiating the work shall provide “as built” drawings, plans and related technical data to the other Party. Approval or review of any document referenced herein shall not relieve the initiating party of its responsibility for the design or

construction of any proposed facility, nor shall it subject the other Party to any liability, except with respect to the confidentiality provisions of Article 20.

8.6

Each Party shall, at its own expense, have the right to inspect or observe all maintenance activities, equipment tests and installation, construction, and modification of facilities of the other Party that could have a material effect upon the facilities or operations of the first Party.

Article 9. Access to Facilities

9.1		The Parties hereby agree to provide each other such access to facilities, properties, equipment and records as may be necessary and appropriate to enable each Party to maintain its respective facilities, equipment and property in a manner consistent with Good Utility Practice. Such access shall be provided in a manner so as not to interfere unreasonably with the ongoing business operations, rights, and obligations of either Party. Any such access shall be subject to applicable federal, state and local laws and regulations and the rules and operation guidelines of the Party owning such facilities or properties, including without limitation any requirement of such Party that personnel make communication with the other Party upon entering such Party’s facilities or properties.
9.2		Without limiting the generality of Section 9.1, Transmission Owner shall have access to all of its equipment, systems, and facilities located on Local Distribution Company’s property through easements granted to Transmission Owner and substantially in the form of Exhibit 7 (“ Easements ”), and Local Distribution Company shall have access to all its equipment, systems and facilities located on Transmission Owner’s property through similar Easements. A schedule of easement agreements that will be governed by the terms of this Agreement is attached hereto and incorporated herein by this reference as Exhibit 7, Schedule 1. Transmission Owner and Local Distribution Company acknowledge and agree that Exhibit 7, Schedule 1 may be revised and supplemented from time to time to add and/or delete easements as additional facilities are added or retired. Such supplementation shall not require formal amendment to this Agreement. Each Party shall furnish at no cost to the other Party any necessary access, easements, licenses, and/or rights of way upon, over, under, and across lands owned or controlled by either Party and/or its affiliated interests for the construction and operation of necessary lines, substations, and other equipment to accomplish interconnection of such other Party’s facilities with the Transmission System under this Agreement and shall, at all reasonable times, give such other Party, or its agents, free access to such lines, substations, and equipment, as allowed by applicable ERO, or RRO policies, standards, or rules. An accessible, protected and satisfactory site selected upon mutual agreement by the Parties and located on Local Distribution Company’s premises shall be provided by and at Local Distribution Company’s expense for installation of metering devices, unless Transmission Owner elects to install meters on poles or other locations controlled by it. Local Distribution Company grants to Transmission Owner at all reasonable times and with reasonable supervision, the right of free ingress and egress to Local Distribution Company’s premises for the purpose of installing, testing, reading, inspecting, repairing, operating, altering, or removing any of Transmission Owner’s property located on Local

Distribution Company’s premises or for other purposes necessary to enable Transmission Owner to receive electric energy, suspend the receipt thereof, or determine Local Distribution Company’s compliance with this Agreement.

9.3		Each Party shall provide the other Party keys, access codes or other access methods necessary to gain unassisted access to the other Party’s facilities to exercise rights under this Agreement. Access shall only be granted to Qualified Personnel.
9.4		Neither Party shall make changes to the site topography or accesses, including but not limited to grading or drainage, that could reasonably be expected to have a material adverse effect upon the other Party’s facilities or common use drainage or pollution control systems without the prior written consent of the other Party, such consent not to be unreasonably withheld.

Article 10. Notifications and Reporting

10.1		Unless otherwise provided, any notice required to be given by either Party to the other Party in connection with this Agreement shall be given in writing: (a) personally; (b) by facsimile transmission (if the sender thereafter sends such notice to the recipient by any of the other methods provided in this Section 10.1); (c) by registered or certified U.S. mail, return receipt requested, postage prepaid; or (d) by reputable overnight carrier, with acknowledged receipt of delivery; or (e) any other method mutually agreed by the Parties in writing. Notice given personally shall be deemed given on the date of personal receipt. Notice sent by facsimile shall be deemed given on the date the transmission is confirmed by sender’s facsimile machine, so long as the facsimile is sent on a business day during normal business hours of the recipient. Otherwise, notice by facsimile shall be deemed given on the next succeeding business day. Notice provided by mail or overnight courier shall be deemed given at the date of acceptance or refusal of acceptance shown on such receipt.
10.2		Notice to Transmission Owner shall be to Transmission Owner’s Site Representative, at the address identified in Exhibit 2. Notice to Local Distribution Company shall be to Local Distribution Company’s Site Representative, at the address identified in Exhibit 2
10.3		Each Party shall provide prompt notice to the other Party describing: (i) the nature and extent of any Emergency or Network Security Condition that may be reasonably anticipated to affect the other Party’s equipment, facilities or operations, (ii) the impact on operations, and (iii) all corrective action. Either Party may take reasonable and necessary action, both on its own and the other Party’s system, equipment, and facilities, to prevent, avoid or mitigate injury, danger, damage or loss to its own equipment and facilities, or to expedite restoration of service; provided , however, that the Party taking such action shall give the other Party prior notice, if at all possible, before taking any action on the other Party’s system, equipment, or facilities.
10.4		In the event of an Emergency or Network Security Condition contemplated by Section 10.3, each Party shall provide to the other such information, documents, and data as are necessary for operation of the Transmission System and Distribution System, including,

without limitation, such information as is to be supplied to any Governmental Authority, ERO, RRO, Transmission System Operations Center, or Balancing Authority/Control Area Operator.

10.5		In order to continue interconnection of the Distribution System and Transmission System, each Party shall promptly provide the other Party with all relevant information, documents, or data regarding the Distribution System and the Transmission System that would be reasonably expected to affect the Distribution System or Transmission System and is reasonably requested by ERO, RRO, or any Governmental Authority.
10.6		A Party performing routine maintenance and inspection activities that do not require major equipment or system outages and have no material impact on the other Party shall provide the other Party with at least twenty-four (24) hours’ prior notice, if practicable. A Party performing routine maintenance and inspection activities that will require major equipment or system outages shall provide the other Party with not less than seventy-two (72) hours’ prior notice, if practicable; provided that the provisions of Section 3.7.2 remain applicable to the outages and that the notice required by this Section 10.6 shall be in addition to, and does not substitute for, the requirements of Section 3.7. As noted in Article 3.7, Parties must comply with the applicable RTO procedures.
10.7		Transmission Owner shall notify Local Distribution Company prior to entering Local Distribution Company’s facilities for routine measurements, inspections and meter reads in accordance with the requirements of Section 10.6. Local Distribution Company shall notify Transmission Owner prior to entering Transmission Owner’s facilities, including switchyards, for routine maintenance, operations, measurements, inspections and meter reads, in accordance with the requirements of Section 10.6.
10.8		Each Party shall provide prompt verbal notice to the other Party of any system alarm relating to the other Party’s equipment, unless the system alarm is automatically sent to the other Party.
10.9		Upon request, each Party shall provide a report or a copy of the data from a system events recorder or digital fault recorder relating to the other Party’s equipment.
10.10		Each Party agrees to notify the other Party immediately verbally, and then in writing, of any labor dispute or anticipated labor dispute of which its management has actual knowledge that might reasonably be expected to affect the operations of the other Party with respect to this Agreement.

Article 11. Safety

11.1

Each Party agrees that all work performed by either Party that may reasonably be expected to affect the other Party shall be performed in accordance with Good Utility Practice and all applicable laws, regulations, safety standards, practices and procedures and other requirements pertaining to the safety of persons or property (including, but not limited to those of the Occupational Safety and Health Administration, the National Electrical Safety Code and those developed or accepted by Transmission Owner and Local Distribution Company for use on their respective systems) and Good Utility

Practice when entering or working in the other Party’s property or facilities or switching area. A Party performing work within the boundaries of the other Party’s facilities must abide by the safety rules applicable to the site.

11.2		Each Party shall be solely responsible for the safety and supervision of its own employees, agents, representatives, and subcontractors.
11.3		Transmission Owner shall immediately report any injuries that occur while working on Local Distribution Company’s property, facilities or switching area to appropriate agencies and Local Distribution Company’s Site Representative. Local Distribution Company shall immediately report any injuries that occur while working on Transmission Owner’s property or facilities or switching area to appropriate agencies and the Transmission Owner’s Site Representative. Each Party will provide the other with its clearing/tagging/lockout procedures. Local Distribution Company’s procedures shall govern clearances requested or initiated by Local Distribution Company on equipment of Local Distribution Company that utilizes the Transmission Owner’s equipment as an isolation device. Transmission Owner’s procedures shall govern clearances requested or initiated by Transmission Owner on equipment of Transmission Owner that utilizes the Local Distribution Company’s equipment as an isolation device.

Article 12. Environmental Compliance and Procedures

12.1

Each Party shall immediately provide verbal notification to the other Party upon the discovery of any Release of any hazardous substance caused by the Party’s operations or equipment that impacts the assets or facilities of the other Party or upon discovery of the Release of any hazardous substance that may reasonably be expected to migrate to, or adversely impact, the property, facilities or operations of the other Party and shall promptly furnish to the other Party copies of any reports filed with any governmental agencies addressing such events. Such verbal notification shall be followed by written notification within twenty-four (24) hours. The Party responsible for the Release of any hazardous substance on the property or facilities of the other Party, or of any hazardous substance that may migrate to, or adversely impact the property, facilities or operations of the other Party shall be responsible for the reasonable cost of performing any and all remediation or abatement activity and submitting all reports or filings required by environmental laws. Advance written notification (except in emergency situations, in which verbal, followed by written notification, shall be provided as soon as practicable) shall be provided by any Party performing any remediation or abatement activity on the property or facilities of the other Party, or that may adversely impact the property, facilities, or operations of, the other Party. Except in emergency situations, such remediation or abatement activity shall be performed only with the consent of the Party owning the affected property or facilities. The Parties agree to coordinate, to the extent necessary, the preparation of site plans, reports or filings required by law or regulation, including but not limited to Spill Prevention, Control and Countermeasures (SPCC) and Stormwater Pollution Prevention Plans (SWPP) required by any regulatory agency of competent jurisdiction.

Article 13. Billings and Payment

13.1		Any invoices payable under this Agreement shall be provided to the other Party under this Agreement within a reasonable time after the first day of each month. Each invoice shall indicate the month in which services were provided, shall fully describe the services rendered and shall be itemized to reflect the services performed or provided. The invoice shall be paid within sixty (60) days of the invoice date.
13.2		Any payments required to be made by Local Distribution Company under this Agreement shall be made to Transmission Owner at the following address:

ITC Midwest LLC
39500 Orchard Hill Place
Novi, MI 48375
Fax: (248) 374-7129
Attention: Accounts Receivable

Any payments required to be made by Transmission Owner under this Agreement shall be made to Local Distribution Company at the following address:

Interstate Power and Light Company
200 First Street SE
P.O. Box 351
Cedar Rapids, IA, 52406-0351
Fax: (319) 786-4492
Attention: Vern Gebhart, Vice President, Customer Service
Operations.

13.3		The rate of interest on any amount not paid when due shall be equal to the Interest Rate in effect at the time such amount became due. Interest on delinquent amounts shall be calculated from the due date of the bill to the date of the payment. When payments are made by mail, bills shall be considered as having been paid on the date of receipt by the other Party. Nothing contained in this Article is intended to limit either Party’s remedies under Article 21 of this Agreement.
13.4		Payment of an invoice shall not relieve the paying Party from any responsibilities or obligations it has under this Agreement, nor shall such payment constitute a waiver of any claims arising hereunder.
13.5		If all or part of any bill is disputed by a Party, that Party shall promptly pay the amount that is not disputed and provide the other Party a reasonably detailed written explanation of the basis for the Dispute pursuant to Article 26. The disputed amount shall be paid into an independent escrow account pending resolution of the Dispute, at which time the prevailing Party shall be entitled to receive the disputed amount, as finally determined to be payable, along with interest accrued at the Interest Rate through the date on which payment is made, within ten (10) business days of such resolution.

13.6

Neither Party shall be responsible for the other Party’s costs of collecting amounts due under this Agreement, including attorney fees and expenses and the expenses of arbitration.

Article 14. Applicable Regulations and Interpretation

14.1		Each Party’s performance under this Agreement is subject to the condition that all requisite governmental and regulatory approvals for such performance are obtained in form and substance satisfactory to the other Party in its reasonable judgment. Each Party shall exercise Due Diligence and shall act in good faith to secure all appropriate approvals in a timely fashion.
14.2		This Agreement is made subject to present or future state or federal laws, regulations, or orders properly issued by state or federal bodies having jurisdiction. This Agreement shall be interpreted pursuant to the laws of the State of Iowa without regard to any conflicts of law principles and to the Federal Power Act and the regulatory agency or agencies having jurisdiction over the particular matter.

Article 15. Force Majeure

15.1		General . Except for the obligation to make any payments under this Agreement, neither Party shall be considered to be in default or breach of this Agreement or liable in damages or otherwise responsible to the other Party for any delay in or failure to carry out any of its obligations under this Agreement if, and only to the extent that, the Party is unable to perform or is prevented from performing by an event of Force Majeure. Notwithstanding the foregoing sentence, neither Party may claim Force Majeure for any delay or failure to perform or carry out any provision of this Agreement to the extent that such Party has been negligent or engaged in intentional misconduct and such negligence or intentional misconduct substantially and directly caused that Party’s delay or failure to perform or carry out its duties and obligations under this Agreement.
15.2		Force Majeure Defined . The term Force Majeure means those events beyond the reasonable control of, and without the fault or negligence of, the Party claiming Force Majeure which, through the exercise of Good Utility Practice, that Party could not have avoided and which, by exercise of Due Diligence, that Party is unable to overcome. Such events include, but are not limited to, the following, to the extent they conform to the foregoing criteria: labor disputes (including a strike) flood; lightning strikes; earthquake; fire; epidemic; war; invasion; riot; civil disturbance; sabotage or vandalism; explosion; insurrection; military or usurped power; action of any court or Governmental Authority, or any civil or military authority de facto or de jure; act of God or the public enemy; or any other event or cause of a similar nature beyond a Party’s reasonable control. Mere economic hardship does not constitute Force Majeure.
15.3		Procedures . A Party claiming Force Majeure must:

15.3.1

give written notice to the other Party of the occurrence of a Force Majeure event no later than three (3) business days after learning of the occurrence of such an event;

	15.3.2		use Due Diligence to resume performance or the provision of service hereunder as soon as practicable;
	15.3.3		take all commercially reasonable actions to correct or cure the Force Majeure event;
	15.3.4		exercise all reasonable efforts to mitigate or limit damages to the other Party, except that neither party shall be required to settle any strike, walkout, lockout or other labor dispute on terms that, in the sole judgment of the Party involved in the dispute, are contrary to its interest; and
	15.3.5		provide prompt written notice to the other Party of the cessation of the adverse effect of the Force Majeure event on its ability to perform its obligations under this Agreement.

Article 16. Limitation of Liability

16.1

With respect to claims by and between the Parties under this Agreement, notwithstanding any other provision of this Agreement, liability of each Party shall be limited to direct actual damages, and all other damages at law or in equity are waived. Under no circumstances shall either Party or its affiliates, directors, officers, employees and agents, or any of them, be liable to the other Party, whether in tort, contract or other basis in law or equity for any special, indirect, punitive, exemplary or consequential damages, including without limitation such damages for: loss of profits or revenue from work not performed, loss of use of or under-utilization of the other Party’s facilities, loss of use of revenues, attorneys’ fees, litigation costs and loss of anticipated profits resulting from either Party’s performance or non-performance of an obligation imposed by this Agreement. The limitations on damages specified in this section are without regard to the cause or causes related thereto, including the negligence of any Party, whether such negligence be sole, joint or concurrent, or active or passive. This limitation shall not apply to claims for death, bodily injury or third party claims.

Article 17. Indemnification

17.1

Local Distribution Company’s Indemnification . Subject to the provisions of Article 16, Local Distribution Company shall indemnify, hold harmless and defend Transmission Owner, and its officers, directors, employees, affiliates, managers, members, trustees, shareholders, agents, contractors, subcontractors, affiliates’ employees, invitees and successors, from and against any and all claims, demands, suits, obligations, payments, liabilities, costs, losses, judgments, damages and expenses (including the reasonable costs and expenses of any and all actions, suits, proceedings, assessments, judgments, settlements, and compromises relating thereto, reasonable attorneys’ and experts’ fees and reasonable disbursements in connection therewith) for damag