INTERCONNECTION
AGREEMENT
Between
IAMERICAN ELECTRIC
POWER SERVICE
CORPORATION
As Agent
For
INDIANA MICHIGAN
POWER COMPANY
And
INDIANAPOLIS POWER
& LIGHT COMPANY
April 1,
2008
CONTENTS
ARTICLE
1 - INTERCONNECTED OPERATION ..3
ARTICLE 2 - SERVICE CONDITIONS ..3
ARTICLE 3 - INTERCONNECTED POINTS, METERING POINTS AND DATA
ACQUISTION SYSTEM EQUIPMENT ..3
ARTICLE 4 - RECORDS ..3
ARTICLE 5 - BILLING AND PAYMENT ..3
ARTICLE 6 - OPERATING COMMITTEE ..3
ARTICLE 7 - INDEMNITY...3
ARTICLE 8 - ARBITRATION 3
ARTICLE 9 - TERM AND TERMINATION OF AGREEMENT 3
ARTICLE 10 - REGULATORY AUTHORITIES 3
ARTICLE 11 - CANCELLATION OF PRIOR AGREEMENTS 3
ARTICLE 12 - GENERAL 3
ARTICLE 13 - ASSIGNMENT 3
APPENDIX I INTERCONNECTION POINTS 18
APPENDIX II METERING AND METERING POINTS 22
APPENDIX III - DAS EQUIPMENT: OWNERSHIP, INSTALLATION AND
MAINTENANCE 27
APPENDIX IV - DEFINTIONS 37
THIS
INTERCONNECTION AGREEMENT (this “Agreement”) is made
and entered into as of this 14th day of April, 2008, between
American Electric Power Service Corporation (“AEP”) as
agent for Indiana Michigan Power Company (“I&M”)
(hereinafter referred to as “AEP”), and Indianapolis
Power & Light Company (“IPL”); each of AEP and IPL
sometimes herein referred to singularly as a “Party” or
collectively as the “Parties”.
WITNESSETH:
0.1
WHEREAS, I&M is an Indiana corporation, owning and operating
electric facilities for the transmission and distribution of
electric power and energy in the State of Indiana;
0.2
WHEREAS, IPL is an Indiana corporation, owning and operating
electric facilities for the generation, transmission, and
distribution of electric power and energy in the State of
Indiana;
0.3
WHEREAS, I&M and IPL have entered into an Interconnection
Agreement, dated December 30, 1960 [I&MI Rate Schedule FERC No.
21 and IPL Rate Schedule FERC No. 1] as subsequently modified
through the date hereof and amended (“1960 Agreement”);
pursuant to which the transmission systems of I&M and IPL are
presently interconnected and operated in parallel through certain
interconnection facilities;
0.4
WHEREAS, I&M, IPL and Public Service Company of Indiana
(“PSI”, doing business as Duke Energy Indiana, Inc., or
“Duke Energy Indiana”) have entered into a Facilities
Agreement dated April 24, 1968; as subsequently modified through
the date hereof (“1968 Agreement”); pursuant to which
the transmission systems of I&M, IPL and Duke Energy Indiana
are presently interconnected and operated in parallel through
certain interconnection facilities;
0.5
WHEREAS, I&M, IPL and PSI have previously entered into a
Memorandum of Agreement, dated November 5, 1973 (the “1973
MOA”) Per Facilities Agreement of April 24, 1968; and
pursuant to which the systems of I&M, IPL and Duke Energy
Indiana are presently interconnected and operated in parallel
through certain transmission facilities;
0.6
WHEREAS, I&M and IPL have entered into Data Acquisition
Equipment Agreements, each dated August 21, 1985 (“1985
Agreement”), for the Fall Creek Station, the Breed Station
and the Tanners Creek Station with subsequent supplements for
telemetry of information from the interconnection points;
0.7
WHEREAS, the Parties wish to replace and supersede the 1960
Agreement, the 1968 Agreement, the 1973 MOA, and the 1985
Agreements, and all subsequent modifications or addenda to said
agreements, and set the terms and conditions upon which they may
continue the interconnected operation of their respective
transmission systems, pursuant to the provisions of this Agreement;
0.8
WHEREAS, IPL’s transmission facilities (including conductors,
circuit breakers, switches, transformers and other associated
equipment used to control the transfer of energy from one place to
another) owned, operated and controlled by IPL, including any
modifications, additions or upgrades made thereto (collectively,
the “IPL transmission system”) is currently under the
functional control of the Midwest ISO and I&M’s
transmissions facilities (including conductors, circuit breakers,
switches, transformers and other associated equipment used to
control the transfer of energy from one place to another) owned,
operated or controlled by I&M, including any modifications,
additions or upgrades made thereto (collectively, the “AEP
Transmission System”) is currently under the functional
control of PJM; and
0.9
WHEREAS, the Federal Energy Regulatory Commission
(“FERC”) has required the Midwest ISO and PJM to be a
signatory to this Agreement in order to ensure that Midwest ISO and
PJM are kept fully apprised of the matters addressed herein and so
that Midwest ISO and PJM may be kept aware of any reliability and
planning issues that may arise.
0.10
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein set forth, the Parties hereto agree as
follows:
ARTICLE 1 -
INTERCONNECTED OPERATION
1.1
Interconnected Parties The AEP Transmission System and the
IPL Transmission System shall be interconnected at the points
specified and described in Appendix I to this Agreement
(“Interconnection Points”). The Parties may, from time
to time, by mutual agreement, add one or more additional
Interconnection Points or discontinue or modify one or more
existing Interconnection Points, and shall amend Appendix I to
reflect same. In furtherance thereof, the Parties shall,
during the term of the Agreement, continue in service the existing
transmission lines and interconnection facilities and essential
terminal equipment, to the extent required for the purposes of this
Agreement.
ARTICLE 2 - SERVICE
CONDITIONS
2.1
Avoidance of Unauthorized Use and Control of System Disturbances
Each Party shall have facilities or contractual arrangements
adequate to serve its own load and shall exercise reasonable care
to design, construct, maintain, and operate its Transmission
System, in accordance with Good Utility Operating Practice, and
neither Party shall be obligated to receive or deliver real or
reactive power when to do so might introduce objectionable
operating conditions on its Transmission System. Any Party
may install and operate on its Transmission System such relays,
disconnecting devices, and other equipment as it may deem
appropriate for the protection of its Transmission System or the
relief of an Unauthorized Use to its Transmission System. The
Parties shall maintain and operate their respective Transmission
Systems so as to minimize, in accordance with Good Utility
Practice, the likelihood of a disturbance originating in either
Transmission System, which might cause impairment to the service of
the other Party or of any transmission system interconnected with
the Transmission System of the other Party.
2.2
Interruption of Service The interconnections provided under
this Agreement, and any service being provided under this
Agreement, may be interrupted or reduced upon such notice as is
reasonable under the circumstances: (a) by operation of automatic
equipment installed for power system protection; (b) after
consultation with the other Party, if practicable, when a Party
deems it desirable for installation, maintenance, inspection,
repairs or replacements of equipment; or (c) at any time that, in
the sole judgment of the interrupting Party, such action is
necessary to preserve the integrity of, or to prevent or limit any
instability on, or to avoid or mitigate an Unauthorized Use of its
Transmission System.
2.3
Operating Responsibilities The Parties agree to operate and
maintain their Transmission System, including the transmission
equipment and facilities, in a manner consistent with Good Utility
Practice in order to permit the Parties to operate their respective
Transmission System as required by this Agreement at their
respective cost. Operating arrangements for facility maintenance of
this Agreement shall be coordinated between operating personnel of
the AEP system control center and operating personnel of the IPL
system control center. Except as may be necessary and
appropriate in an emergency, all operating arrangements shall be
coordinated with, and consistent with, the practices of their
respective RTO.
2.4
Energy Losses The energy losses on the interconnected
facilities shall be assigned to the appropriate Party based on the
metering points of the interconnected facilities or according to
procedures developed by the Operating Committee and subject to any
requirements of their respective RTO.
ARTICLE 3 -
INTERCONNECTION POINTS, METERING POINTS AND DATA ACQUISITION SYSTEM
EQUIPMENT
3.1
Interconnection Points All electric energy delivered under
this Agreement shall be of the character commonly known as
three-phase 60 Hz energy and shall be delivered at the
Interconnection Points specified under Article 1 (and Appendix I)
of this Agreement at standard nominal voltage or such voltages as
may be specified in Appendix I of this Agreement.
3.2
Metering and Data Acquisition System Equipment Measurement
of electric energy under this Agreement for the purposes of
determining load and affecting settlements, and monitoring and
telemetering of power flows shall be made by standard types of
metering and data acquisition system (“DAS”) equipment
installed and maintained, as per the Joint Operating Agreement by
the owner at the Interconnection Points consistent with provisions
of Appendix II and Appendix III of this Agreement. Any
aspects of metering and DAS equipment not specifically provided for
by this Agreement will be referred to the Operating Committee
pursuant to Article 6.
3.3
New Interconnection Points, Metering Points and DAS Equipment
If a Party requests a new interconnection point, metering
point or DAS equipment, or upgrades or replacements of such
existing facilities or DAS equipment, that Party shall be
responsible for the cost of the new facilities or equipment and
their installation; provided, however, if both Parties benefit from
such new, upgraded or replaced facilities and equipment, then each
Party shall be responsible for the cost and installation, to the
extent of such benefit.
ARTICLE 4 -
RECORDS
4.1
Copies of Records Each Party shall provide to a requesting
Party copies of records maintained in accordance with FERC’s
record retention requirements to the extent such records document
any transactions that have occurred under this
Agreement.
ARTICLE 5 - INVOICING
AND PAYMENT
5.1
Invoicing Any invoice that is issued pursuant to this
Agreement shall be for: (a) the establishment of any new
Interconnection Point; or (b) the modification of an existing
Interconnection Point. The Operating Committee shall establish the
terms and conditions applicable to invoicing pursuant to Article
6.2(b) of this Agreement.
5.2
Timeliness of Payment Unless otherwise agreed, all invoices,
if any, issued pursuant to this Agreement shall be rendered as soon
as practicable in the month following the calendar month in which
expenses were incurred and shall be due and payable, unless
otherwise agreed, within thirty (30) days of receipt of such
invoices. Payment to the payee shall be made by electronic
transfer or such other means as shall cause such payment to be
available for the use of the payee. Interest on amounts past
due shall accrue daily at the then current prime interest rate (the
base corporate loan interest rate) published in the Wall Street
Journal, or, if no longer so published, in any mutually agreeable
publication, plus two percent (2%) per annum, but will in no event
exceed the maximum interest rate allowed pursuant to Indiana law,
and shall be payable from the due date of such unpaid amount and
until the date paid.
5.3
Disputed Invoices All disputed invoices shall be paid
in full under the conditions specified in Article 5.2 of this
Agreement. Disputes will then be brought before the Operating
Committee for resolution per Article 6 of this Agreement. If, after
thirty (30) days, the Operating Committee has not resolved the
dispute, then such dispute will be resolved pursuant to the
arbitration procedures specified in Article 8 of this Agreement.
5.4
Invoice Adjustments Subject to Article 12.4 and other than
as required by Applicable Laws and Regulations or metering test
adjustments, invoice adjustments shall be made within twenty-four
(24) months of the rendition of the initial invoice.
5.5
Tax Reimbursement It is expressly agreed by the Parties
that, as part of the compensation to be paid under this Agreement,
if, during the term hereof, there should be levied and/or assessed
against either Party any direct tax, including, but not limited to
sales, excise or similar taxes (other than taxes based on or
measured by net income), by any taxing authority on the power
and/or energy manufactured, generated, produced, converted, sold,
purchased, transmitted, interchanged, exchanged, exported or
imported by the supplying Party to the other Party, such supplying
Party shall be fully compensated by the other Party for such direct
taxes.
5.6
Contribution In Aid of Construction The Parties intend that
all costs paid by a Party to the other Party, for the
establishment, discontinuance or modification of an Interconnection
Point, shall be non-taxable contributions to capital, and shall not
be taxable as contributions in aid of construction
(“CIAC”). If federal or state income taxes are imposed
upon the Party with respect to such payments paid by the other
Party as a CIAC by the Internal Revenue Service (“IRS”)
and/or a state department of revenue (“State”), the
Party paying the CIAC shall reimburse the other Party for the tax
effect of such CIAC computed in accordance with FERC rules and
including any interest and penalty charged to the Party by the IRS
and/or State.
ARTICLE 6 - OPERATING
COMMITTEE
6.1
Operating Committee An Operating Committee shall administer
the interconnected operation of the Parties’ Transmission
Systems as provided for in this Agreement. Each Party shall
appoint one representative and one alternate to the Operating
Committee and designate, in writing, said appointments to the other
Party. Such representative and alternate shall be persons
familiar with the transmission and substation facilities of the
Party they represent and shall be fully authorized to perform the
principal duties listed below.
6.2
Duties of the Operating Committee The principal duties of
the Operating Committee shall be as follows:
a.
to establish operating, and control procedures;
b.
to establish accounting and billing procedures;
c.
to coordinate maintenance schedules to any extent agreed by the
Parties; and
d.
to perform those duties, which this Agreement requires to be done
by the Operating Committee, and such other duties as may be
required for the proper functioning of this Agreement.
6.3
Limitations on Operating Committee Duties The Operating
Committee shall not amend or modify any of the terms or conditions
of this Agreement. The Operating Committee may, to the extent
appropriate, solicit input from the Midwest ISO, PJM, or
Reliability Coordinator and, in any event, shall perform its
functions consistent with the directives of the Midwest ISO, PJM or
Reliability Coordinator.
6.4
Operating Committee Disputes If the Operating
Committee is unable to agree on any matter coming within its scope
of operation, then such matter shall be resolved pursuant to
Article 8 of this Agreement.
6.5
Access Rights The Operating Committee shall have the right
of entry to all property of the Parties used in connection with the
performance of this Agreement for the purpose of inspection and
reading of meters, checking of records, and all other pertinent
matters.
ARTICLE 7 -
INDEMNITY
7.1
Indemnity To the extent permitted by Applicable Laws and
Regulations, each (the “Indemnifying Party”) shall
indemnify, save harmless, and defend the other Party from and
against any losses, liabilities, costs, expenses, suits, actions,
claims, and all other obligations arising out of injuries or death
to persons or damage to property caused by or in any way
attributable to the ownership or operation of the Transmission
System of the Indemnifying Party, except that the Indemnifying
Party’s obligation to indemnify the other Party shall not
apply to the extent of any liabilities arising from the other
Party’s negligence, recklessness or intentional misconduct or
that portion of any liabilities that arise out of the other
Party’s contributing negligent, reckless or intentional acts
or omissions. Further, to the extent that a Party’s
immunity as a complying employer, under the worker’s
compensation and occupational disease laws, might serve to bar or
affect recovery under or enforcement of the indemnification
otherwise granted herein, each Party agrees to waive its
immunity. For the purposes of this Article 7.1 only, the term
“Party” shall include the Party’s directors,
officers, employees, Affiliates and agents.
7.2
Limitation of Damages No Party nor any of its Affiliates,
members, managers, shareholders, officers, directors, employees,
agents, successors or assigns shall be liable under this Agreement,
whether in contract, tort (including negligence and strict
liability) or otherwise, to the other Party or any of its
Affiliates, members, managers, shareholders, officers, directors,
employees, agents, successors or assigns for incidental, punitive,
special, indirect, multiple, exemplary or consequential damages
(including, without limitation, attorneys’ fees, litigation
costs, lost profits or revenues, or loss of good will) connected
with or resulting from performance or non-performance of this
Agreement.
7.3
Fines
(a)
Except as set forth in Sections 7.3(b), any fines, penalties or
other costs incurred by either Party or such Party’s agents,
employees or subcontractors for non-compliance by such Party or its
agents, employees or subcontractors with the requirements of any
Applicable Laws and Regulations or Governmental Authorities, will
not be reimbursed by the other Party but will be the sole
responsibility of such non-complying Party.
(b)
If such fines, penalties or other costs are assessed against a
Party (the “Penalized Party”) by any Governmental
Authority due to the non-compliance by the other Party with
Applicable Laws and Regulations or requirement of a Governmental
Authority, the other Party will indemnify and hold harmless the
Penalized Party against any and all losses, liabilities, damages
and claims suffered or incurred because of the failure of the other
Party to comply therewith, subject to refund in the event that the
Penalized Party or other Party prevails in any contest of the
fines, penalties or other costs. The other Party will also
reimburse the Penalized Party for any and all legal or other
expenses (including attorneys’ fees) reasonably incurred by
the Penalized Party in connection with such losses, liabilities,
damages and claims.
(c)
In the case of Section 7.3(b), either Party will, upon written
notice to the other Party, have the right to reasonably contest in
the name of either or both Parties, as required, or to require the
other Party to reasonably contest the assessment of such fines,
penalties or costs, and the Party requesting such contest will be
responsible for any costs and expenses (including the costs and
expenses of the other Party) relating to such contest.
ARTICLE 8 -
ARBITRATION
8.1
Submission to Arbitration In the event of disagreement between the
Parties with respect to (1) any matter herein specifically made
subject to arbitration, (2) any question of operating practice
involved in the performance of this Agreement, (3) any question of
fact involved in the application of provisions of this Agreement,
or (4) the interpretation of any provision of this Agreement, the
matter involved in the disagreement shall, upon demand of either
Party, be submitted to arbitration in the manner hereinafter
provided. The arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. Sections 1 et seq., and judgment upon the
award rendered by the arbitrator(s) may be entered by any court
having jurisdiction thereof. An offer of such submission to
arbitration shall be a condition precedent to any right to
institute proceedings at law or in equity concerning such
matter.
8.2
Appointment of Arbitrators The Party calling for arbitration
shall serve notice in writing upon the other Party, setting forth
in detail the subject or subjects to be arbitrated, and the Parties
thereupon shall endeavor to agree upon and appoint one person to
act as sole arbitrator. If the Parties fail to agree on an
arbitrator within a period of fifteen (15) days from the receipt of
the original notice, the Party calling for the arbitration shall,
by written notice to the other Party, call for appointment of a
board of arbitrators skilled with respect to matters of the
character involved in the disagreement, naming one arbitrator in
such notice. The other Party shall, within ten (10) days
after the receipt of such call, appoint a second arbitrator, and
the two arbitrators so appointed shall choose and appoint a third
arbitrator. In case such other Party fails to appoint an
arbitrator within said ten (10) days, or in case the two so
appointed fail for ten (10) days to agree upon and appoint a third,
the Party calling for the arbitration, upon five (5) days’
written notice delivered to the other Party, shall seek appointment
the second or third arbitrator, as the case may be, from and
pursuant to the rules of the American Arbitration Association
(“AAA”) for commercial arbitration. No arbitrator
named by a Party or, as the case may be, the AAA, shall have been
employed previously by either Party or have a direct or indirect
interest in either Party or the subject matter of the arbitration.
8.3
Arbitration
(a)
Except as otherwise provided for herein to the contrary,
arbitration proceedings shall be conducted in accordance with the
commercial arbitration rules of the AAA to the extent not
inconsistent with the rules herein specified.
(b)
The sole arbitrator, or the board of arbitrators, shall afford
adequate opportunity to the Parties to present information with
respect to the question or questions submitted for arbitration and
may request further information from either or both Parties.
(c)
The validity, construction and interpretation of this Article 8,
and all procedural aspects of the arbitration conducted pursuant
hereto shall be decided by the arbitrator(s). In deciding the
substance of the Parties' claims, the arbitrator(s) shall refer to
the governing law referenced in this Agreement. It is agreed
that the arbitrator(s) shall have no authority to award treble,
exemplary or punitive damages of any type under any circumstances
whether or not such damages may be available under state or federal
law, or the rules of the AAA. The arbitrator(s) shall have
the right only to interpret and apply the terms and conditions of
this Agreement, but may not change any term or condition of this
Agreement, deprive either Party of any right or remedy expressly
provided hereunder, or provide any right or remedy that has been
excluded hereunder.
(d)
The findings and award of the sole arbitrator or of a majority of
the board of arbitrators shall be final and conclusive with respect
to the question or questions submitted for arbitration and shall be
binding upon the Parties. To the fullest extent permitted by
law, any arbitration proceeding and subsequent arbitration award
shall be maintained in confidence by the Parties.
(e)
Each Party shall pay for the services and expenses of the
arbitrator appointed on its behalf. If there is a board of
arbitrators, all costs incurred in connection with the arbitration
shall be paid in equal parts by the Parties, unless the award shall
specify a different division of the costs.
ARTICLE 9 -
TERMS AND TERMINATION OF AGREEMENT
9.1
Terms and Termination This Agreement shall be effective as
of the date first written above, or such later date as the last
necessary regulatory approval hereof shall be obtained (unless an
earlier date is specified by the regulatory authority having
jurisdiction), and shall remain in effect until the date falling on
the tenth (10th) anniversary of the date hereof (the “Initial
Term”) and, thereafter, for successive twelve (12) month
periods (“Renewal Terms”). Either Party may
terminate this Agreement after the Initial Term by providing to the
other Party at least twelve (12) months’ advance written
notice of its intent to terminate this Agreement, in which case
this Agreement shall terminate at the end of such twelve (12) month
notice period without regard to the expiration of any Renewal
Term. Notwithstanding the above, this Agreement may be
terminated earlier (a) if the Parties mutually agree or (b) as
otherwise expressly provided for in this Agreement.
9.2
Default; Remedies of Parties Upon Default
(a)
Either Party shall be in default under this Agreement if it fails
to perform any of its material duties or obligations under this
Agreement, and such failure continues for thirty (30) days after
written notice thereof from the other party; provided, that if such
failure (other than the failure to make payment of any amounts due
and payable hereunder) is not capable of being cured within such
thirty (30) days period with the exercise of Due Diligence, then
such cure period shall be extended for an additional reasonable
period, not to exceed thirty (30) days, so long as the defaulting
Party is exercising Due Diligence to cure such failure.
(b)
Upon a default by a defaulting Party, the other Party may, at its
option, (i) take action to terminate this Agreement by providing
written notice of termination to the defaulting Party, Midwest ISO,
PJM and FERC; provided, that any such terminating shall not take
effect until FERC approval, if any is required by Applicable Laws
and Regulations, is obtained, and/or (ii) take any other action at
law or in equity as may be permitted under this Agreement to
enforce the performance or observance of any rights, remedies,
duties, obligation or liabilities under this Agreement.
(c)
No remedy conferred by any provision of this Agreement is intended
to be exclusive of any other remedy and each and every remedy shall
be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute or otherwise. The election of any one or more
remedies shall not constitute a waiver of the right to pursue other
available remedies.
ARTICLE 10 -
REGULATORY AUTHORITIES
10.1
Regulatory Authorities This Agreement is made subject to the
jurisdiction of any Governmental Authority having jurisdiction over
the Parties, the Transmission Systems of the Parties, this
Agreement or the subject matter hereof. Nothing contained in
this Agreement shall be construed as affecting in any way, the
right of a Party furnishing service under this Agreement to
unilaterally make application to FERC for a change in rates,
charges, classification, service or any rule, regulation or
contract relating thereto under Section 205 and 206 of the Federal
Power Act and pursuant to the FERC’s Rules and Regulations
promulgated thereunder.
10.2
Adverse Regulatory Change The Parties agree to jointly
submit and support the filing of this Agreement with the
FERC. Any changes or conditions imposed by the FERC or any
other Governmental Authority with competent jurisdiction in
connection with such submission or otherwise in respect of this
Agreement, any of which are unacceptable to a Party after the
Parties’ good faith attempt to negotiate a resolution to such
objectionable change or condition, shall be cause for termination
of this Agreement upon thirty (30) days’ prior written notice
by the non-consenting Party to the other Party.
ARTICLE 11 -
CANCELLATION OF PRIOR AGREEMENTS
11.1
Cancellation of Prior Agreements When this Agreement becomes
effective pursuant to Article 9 of this Agreement, thi
