THIRD AMENDMENT AND RESTATEMENT OF THE POWER PURCHASE AND OPERATING AGREEMENT BY AND BETWEEN WESTMORELAND ? LG&E PARTNERS AS SUCCESSOR IN INTEREST TO BECKLEY COGENERATION COMPANY AND VIRGINIA ELECTRIC AND POWER COMPANY

Exhibit 10.2

THIRD AMENDMENT AND RESTATEMENT OF THE

POWER PURCHASE AND OPERATING AGREEMENT

BY AND BETWEEN

WESTMORELAND — LG&E PARTNERS

AS SUCCESSOR IN INTEREST TO

BECKLEY COGENERATION COMPANY

AND

VIRGINIA ELECTRIC AND POWER COMPANY

THIRD AMENDMENT AND RESTATEMENT OF
THE POWER PURCHASE AND OPERATING AGREEMENT

Table of Contents

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THIRD AMENDMENT AND RESTATEMENT OF
THE POWER PURCHASE AND OPERATING AGREEMENT
BY AND BETWEEN
WESTMORELAND - LG&E PARTNERS
AS SUCCESSOR IN INTEREST TO
BECKLEY COGENERATION COMPANY
AND
VIRGINIA ELECTRIC AND POWER COMPANY

        THIS THIRD AMENDMENT AND RESTATEMENT, effective as of the Effective Date, of the POWER PURCHASE AND OPERATING AGREEMENT effective January 11, 1989 and executed January 24, 1989, first amended and restated March 28, 1990 ("First Amendment and Restatement"), and subsequently amended and restated November 15, 1991 ("Second Amendment and Restatement"), is by and between WESTMORELAND — LG&E PARTNERS, a Virginia general partnership with its principal office located in Charlottesville, Virginia ("Operator"), as successor in interest to BECKLEY COGENERATION COMPANY, a Delaware limited partnership, and VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia public service corporation with its principal office located in Richmond, Virginia, operating in North Carolina as North Carolina Power ("North Carolina Power" or "Company"). As used herein, the term "Original Agreement No. 1" shall refer to the Power Purchase and Operating Agreement as executed on January 24, 1989. The term "Agreement" shall refer to the Second Amendment and Restatement as amended and restated hereby and as the same may hereafter be amended and in effect. Both Operator and North Carolina Power are herein individually referred to as "Party" and collectively referred to as "Parties".

R E C I T A L S

        WHEREAS, the Company had entered into the Original Agreement No. 1, executed January 24, 1989, with Beckley Cogeneration Company, a partnership whose general partners were Westpower-Beckley L.P., a partnership whose general partner was Westmoreland-Beckley, Inc., Borealis Power Partners, a limited partnership whose general partner was Borealis Power Company, Inc., and S.N.W./Beckley, L.P., a partnership whose general partner was Stone & Webster Beckley Corporation; and

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        WHEREAS, such partnership was going to develop an electric generating facility known as The Beckley Project in Beckley, West Virginia; and

        WHEREAS, such partnership chose not to develop such facility in Beckley, West Virginia; and

        WHEREAS, S.N.W./Beckley, L.P. withdrew from the partnership; and

        WHEREAS, Hadson Roanoke Valley, L.P., a California limited partnership whose general partner was Hadson Power 16 Incorporated, bought the interest of Borealis Power Partners; and

        WHEREAS, Westmoreland-Roanoke Valley, L.P., formerly Westmoreland-Beckley, Inc., and Hadson Roanoke Valley, L.P., as Westmoreland-Hadson Partners, planned to own and operate a new generation facility located inside North Carolina Power’s certificated retail service area in Halifax County, North Carolina, with a maximum nameplate rating of 203,250 KVA; such facility in all future correspondence to be identified as the Roanoke Valley Project (or the "Facility"); and

        WHEREAS, the Original Agreement No. 1 was first amended and restated March 28, 1990 pursuant to the First Amendment and Restatement to reflect the above changes; and

        WHEREAS, the First Amendment and Restatement was then amended and restated November 15, 1991 pursuant to the Second Amendment and Restatement; and

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        WHEREAS, Hadson Roanoke Valley, L.P., subsequently changed its name to LG&E Roanoke Valley, L.P., whose general partner is LG&E Power 16 Incorporated, and Westmoreland-Hadson Partners subsequently changed its name to Westmoreland — LG&E Partners.

        WHEREAS, the Parties now want to further amend and restate the Agreement; and

        WHEREAS, the Commercial Operations Date occurred on May 29, 1994; and

        WHEREAS, Operator wishes to sell exclusively to North Carolina Power all of the Facility’s Net Electrical Output, such sale to be pursuant to the terms and conditions set forth herein; and

        WHEREAS, North Carolina Power wishes to purchase energy and capacity, which may be dispatched by North Carolina Power pursuant to the terms and conditions set forth herein;

        NOW, THEREFORE, in consideration of these premises and of the mutual covenants and agreements hereinafter set forth, Operator and North Carolina Power covenant and agree, and amend and restate the Second Amendment and Restatement in its entirety, as follows:

ARTICLE 1: Definitions

        Whenever the following terms appear in this Agreement, whether in the singular or in the plural, present or past tense, they shall have the meaning stated below:

        1.1    "Actual Capacity Factor" — For any Year, the quotient (expressed as a percentage) obtained by dividing: (a) the Delivered Capacity for such Year by (b) the sum of (i) the product of the Maximum Capacity — Summer and the number of hours in the Summer Period during such Year, and (ii) the product of the Maximum Capacity — Winter and the number of hours in the Winter Period during such Year. Notwithstanding the foregoing provisions, (A) the Actual Capacity Factor for each of 1998 and 1999 shall be deemed conclusively to be 91.629% and 85.721%, respectively, and (B) the Actual Capacity Factor for each of 2004, 2009, 2014 and 2019 shall be deemed conclusively to be the quotient obtained pursuant to the calculation in the preceding sentence, plus three percent (3%). Without limiting the generality of the foregoing provisions, the Actual Capacity Factor shall also be calculated for all of the Year 2000.

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        1.2    "Annual O&M Capacity Component"— For any Year during which the O&M Capacity Component increases or decreases, the Annual O&M Capacity Component shall be the quotient obtained by dividing (a) the sum of (i) the product obtained by multiplying the O&M Capacity Component in effect as of January 1 of such Year by the number of days from and including January 1 of such Year through the Day preceding the effective date of such increase or decrease, and (ii) the product obtained by multiplying the O&M Capacity Component after giving effect to such increase or decrease by the number of days from and including the effective date of such increase or decrease through the last Day of such Year, by (b) the total number of days in such Year. Notwithstanding the foregoing provisions, the Annual O&M Capacity Component for any Year during which the O&M Capacity Component does not increase or decrease shall equal such O&M Capacity Component.

        1.3    "Average Capacity Factor" — For any Year other than 2000, the average of the Actual Capacity Factor for each of the three (3) preceding Years; provided that in no event shall the Average Capacity Factor be deemed to be less than (a) 86% in any Year from 2001 through 2009, or (b) 85% in 2010 or any Year thereafter during the Initial Term; provided that the minimum Average Capacity Factor, if any, during any Extended Term shall be subject to the mutual agreement of the Parties. Notwithstanding the foregoing provisions, the Average Capacity Factor for each of 2004, 2009, 2014 and 2019 shall be deemed conclusively to be the average referred to in the preceding sentence, plus three percent (3%).

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        1.4    "Business Day" — Monday through Friday excluding holidays recognized by North Carolina Power. As of the date of this Agreement, these holidays include New Year’s Day, Martin Luther King’s Birthday, Good Friday, Memorial Day, Fourth of July, Labor Day, Veteran’s Day, Thanksgiving Day, day after Thanksgiving Day, Christmas Eve and Christmas Day. The Day North Carolina Power observes such holidays may be changed by North Carolina Power upon ten (10) Days written notice to Operator.

        1.5    "Calendar Day" or "Day" — A Calendar Day shall be the 24-hour period beginning and ending at 12:00 midnight Eastern Time. The terms Day and Calendar Day may be used interchangeably and shall have the same definition.

        1.6    "Calendar Month" or "Month" — A Calendar Month shall begin at 12:00 midnight on the last Day of the preceding Month and end at 12:00 midnight on the last Day of the current Month. The terms Month and Calendar Month may be used interchangeably and shall have the same definition.

        1.7    "Calendar Quarter" or "Quarter" — A Calendar Quarter shall be a 3-Month period beginning 12:00 midnight on December 31, March 31, June 30, or September 30. The terms Calendar Quarter and Quarter shall be used interchangeably and shall have the same definition.

        1.8    "Calendar Year" or "Year" — A Calendar Year shall be the 12-Month period beginning 12:00 midnight on December 31 and ending at 12:00 midnight on the subsequent December 31. The terms Year and Calendar Year may be used interchangeably and shall have the same definition. Notwithstanding the foregoing provisions, if the Initial Term is canceled, expires or otherwise terminates on any Day other than December 31, the terms Year and Calendar Year shall also be deemed to refer to the time from and including January 1 of such Year through the effective date of such cancellation, expiration or termination for purposes of this Agreement.

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        1.9    "Capacity Purchase Payment" — The amount North Carolina Power will pay Operator for Delivered Capacity in accordance with Article 10.

        1.10    "Capacity Purchase Payment Adjustment" — The amount calculated as such in Section 10.15(b).

        1.11    "Capacity Unit Price" — At any time, the quotient obtained by dividing the sum of the applicable Fixed Capacity Component and the applicable O&M Capacity Component by the applicable Average Capacity Factor, expressed in cents/kWh; provided that, at any time during the Years 2004, 2009, 2014 and 2019, the divisor in the foregoing calculation shall be the applicable Average Capacity Factor minus three percent (3%).

        1.12    "Commercial Operations Date" — May 29, 1994.

        1.13    "Delivered Capacity"— The amount of capacity that Operator delivers from the Facility to North Carolina Power, which, for all purposes, shall be deemed to be the sum of (a) the Net Electrical Output that is delivered to North Carolina Power and that, during any Off Peak Hour, does not exceed 101% of the Maximum Capacity — Summer or Maximum Capacity — Winter, as the case may be, expressed in kWh, and (b) during those hours that North Carolina Power (i) has Dispatched the Facility off-line, or to produce Net Electrical Output at less than the applicable Maximum Capacity – Summer or Maximum Capacity — Winter, or (ii) was unable, refused or otherwise failed to receive Net Electrical Output for any reason, including, without limitation, pursuant to Section 7.5, the difference obtained by subtracting the Net Electrical Output actually delivered during such Dispatch, inability, refusal or failure, if any, from the kilowatt-hours that Operator potentially could have delivered if the Facility had operated at the Maximum Capacity – Summer or Maximum Capacity – Winter, as the case may be, during such Dispatch, inability, refusal or failure. For purposes of the preceding sentence, any hour during which Operator increases or reduces the production of Net Electrical Output in response to Dispatch by North Carolina Power shall be deemed for all purposes hereunder to be an hour described in clause (b)(i) of this Section 1.13. Notwithstanding the foregoing provisions, if Operator is first in a Scheduled Outage, Maintenance Outage, or Forced Outage, and North Carolina Power thereafter (A) Dispatches the Facility off-line, or to produce Net Electrical Output at less than the applicable Maximum Capacity – Summer or Maximum Capacity —Winter, or (B) is unable, refuses or otherwise fails to receive Net Electrical Output, then, to the extent, if any, that such Scheduled Outage, Maintenance Outage, or Forced Outage is concurrent with such Dispatch, inability, refusal or failure by North Carolina Power, the Delivered Capacity during such period of concurrence shall only include the Net Electrical Output actually delivered. during such period, as specified in clause (a) of this Section 1.13.

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        1.14    "Design Limits" — When the Facility operates in accordance with this Agreement, it is capable of operation over the continuous range from 52,500 kW (summer) and 53,200 kW (winter) ("Minimum Operating Level") and through a maximum operating level which shall be the Maximum Capacity – Summer or Maximum Capacity – Winter, as the case may be. After the Facility has been off line, it can achieve the levels of operation specified below within the time periods indicated below:

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Once the Facility has been synchronized with North Carolina Power’s system and brought to its Minimum Operating Level, its Net Electrical Output may be increased at the rate of 7% of the Minimum Operating Level per minute. If the Facility is operating above its Minimum Operating Level, its Net Electrical Output may be reduced at the rate of 10% of the Minimum Operating Level per minute down to the Minimum Operating Level. The maximum cold starts caused by North Carolina Power shall not exceed 20 per year not including starts after any Facility outages. Minimum run time, at or above the Minimum Operating Level, between shutdowns is twelve (12) hours.

        1.15    "Dispatch" — The right of North Carolina Power, or its exercise, in accordance with Prudent Utility Practices, to schedule and control, directly or indirectly, manually or automatically from any of its division or system operating centers, the generating level of the Facility in order to commence, increase, decrease or cease the delivery of Net Electrical Output pursuant to the conditions set forth in Article 7.

        1.16    "Effective Date"— December 1, 2000, or such later effective date as is approved by the FERC.

        1.17    "Emergency" — A condition or situation which, in the sole judgment of North Carolina Power, affects or will affect North Carolina Power’s ability to meet its obligations to maintain safe, adequate and continuous electric service to North Carolina Power’s customers and/or the customers of any member of NERC.

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        1.18    "Energy Purchase Price" — The price per kilowatt hour that North Carolina Power will pay, in accordance with Article 10, Operator for Net Electrical Output delivered to North Carolina Power.

        1.19    "Extended Term" or "Extended Terms" — Shall have the meanings given to such terms in Section 5.2.

        1.20    "FERC" — The Federal Energy Regulatory Commission or any successor thereto.

        1.21    "Facility"— Operator’s generation facility, including land, primary and auxiliary equipment and all transmission equipment, whether owned by Operator or others (except that which is owned by North Carolina Power), installed on Operator’s side of the Interconnection Point, necessary for the delivery of the Net Electrical Output of the Facility and that are not Interconnection Facilities.

        1.22    "Financial Closing"— December 18, 1991, which is .the date on which documents providing funding for the construction of the Facility were executed.

        1.23    "Fixed Capacity Component" — (a) during each of the Years 2000 through 2008, and from and including January 1, 2009 through May 28, 2009, 3.185 cents/kWh, and (b) from and including May 29, 2009 through the end of the Initial Term, 0.822 cents/kWh; provided that the Fixed Capacity Component during any Extended Term shall be subject to the mutual agreement of the Parties.

        1.24    "Forced Outage" — Any unplanned interruption or reduction of Net Electrical Output that is attributable to breakdown or failure of Facility equipment or that, in Operator’s Judgment, is required by safety considerations.

        1.25    "Initial Term" —Shall have the meaning given to such torn in Section 5.1.

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        1.26    "Interconnection Facilities" — All the facilities installed by North Carolina Power to enable North Carolina Power to receive Net Electrical Output, or Net Electrical Output and Delivered Capacity, from the Facility, including but not limited to all metering equipment; transmission and distribution lines and associated equipment; transformers and associated equipment on its side of the Interconnection Point; relay and switching equipment; protective devices and safety equipment; and telemetering equipment, wherever located.

        1.27    "Interconnection Point" — The physical point(s) where the Net Electrical Output of the Facility is delivered to the North Carolina Power system at a voltage acceptable to North Carolina Power. This point will be on the high voltage side of the Operator’s step-up transformer.

        1.28    "Interest" — The compensation for the accrual of monetary obligations under this Agreement computed Monthly and prorated daily from the time each such obligation arises based on an annual interest rate equal to the Prime Rate plus two (2) percent. For purposes of this Agreement, Prime Rate shall mean the rate of interest from time to time publicly announced by The Chase Manhattan Bank, NA., (or its successor) at its principal office, presently located at 1 Chase Manhattan Plaza, New York, New York 10081, as its prime commercial lending rate, determined for each obligation to pay interest at the time such obligation arises.

        1.29    "Maintenance Outage"— An interruption or reduction of the Facility’s availability that (i) is not a Forced Outage or a Scheduled Outage, and (ii) Operator elects to take in good faith for the purpose of performing work on the Facility that should not, in the reasonable opinion of Operator, be postponed until the next Scheduled Outage.

        1.30    "Maximum Annual Capacity Payment" — During any Year is the sum of (a) the product of (i) the Maximum Capacity — Summer, (ii) the Maximum Capacity Unit Price, and (iii) the number of hours in the Summer Period during that Year, and (b) the product of (i) the Maximum Capacity — Winter, (ii) the Maximum Capacity Unit Price, and (iii) the number of hours in the Winter Period during that Year. Notwithstanding the foregoing provisions, the Maximum Annual Capacity Payment for the Year 2009 shall be the sum of (a) the product of (i) the Maximum Capacity — Summer, (ii) the applicable Maximum Capacity Unit Price, and (iii) the number of hours in the Summer Period during that Year to which such Maximum Capacity Unit Price applies, and (b) the product of (i) the Maximum Capacity —Winter, (ii) the applicable Maximum Capacity Unit Price, and (iii) the number of hours in the Winter Period during that Year to which such Maximum Capacity Unit Price applies. Notwithstanding the foregoing provisions, the Maximum Annual Capacity Payment for each of the Years 2004, 2009, 2014 and 2019 shall be deemed conclusively to be the amount derived from the foregoing calculations for such Year, plus the aggregate amount of the additional payments for such Year provided for in Section 10.15(c) hereof.

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        1.31    "Maximum Capacity Summer" — The amount of capacity designated as such in Section 11.1.

        1.32    "Maximum Capacity — Winter" — The amount of capacity designated as such in Section 11.1.

        1.33    "Maximum Capacity Unit Price" — During any Year, is the sum of the Fixed Capacity Component for such Year, and the Annual O&M Capacity Component for such Year, expressed in cents/kWh. Notwithstanding the foregoing provisions, there shall be two (2) Maximum Capacity Unit Prices for the Year 2009, one applicable to the time from and including January 1, 2009 through May 28, 2009 and calculated using the Fixed Capacity Component in effect at that time, and the second applicable to the time from and including May 29, 2009 through December 31, 2009 and calculated using the Fixed Capacity Component in effect at that time.

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        1.34    "NCUC" - The North Carolina Utility Commission or any successor thereto.

        1.35    "NERC" — The North American Electric Reliability Council, including any successor thereto and subdivisions thereof.

        1.36    "Net Electrical Output" — All of the Facility’s generating output made available for sale; such Net Electrical Output shall be measured by the North Carolina Power-owned metering (on a kilowatt-hour basis) that would be located both (i) on the high voltage side of the Operator’s step-up transformer and (ii) on the North Carolina Power owned side of the Interconnection Point

        1.37    "O&M Capacity Component" — 2.160 cents/kWh in 2000 dollars, which shall be increased or decreased, as appropriate, on April 1, 2001 and on each April 1 thereafter by the percentage change in the Gross Domestic Product Implicit Price Deflator Index first published for the previous Calendar Year as specified by the US Department of Commerce, or such other organization as the Parties may mutually agree.

        1.38    "Off Peak Hours"— During the periods March 1 through June 14 and September 16 through November 30, those hours from 2200 hour to 0600 hour Monday through Friday and all day Saturday and Sunday.

        1.39    "Prudent Electrical Practices" — The practices, methods and use of equipment required to protect North Carolina Power’s system, employees, agents, and customers from malfunctions occurring at the Facility and to protect the Facility, and Operator’s employees and agents at the Facility, from malfunctions occurring on North Carolina Power’s system or on any other electric utility with which North Carolina Power is directly or indirectly electrically connected, and to adhere to applicable industry codes, standards, and regulations.

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        1.40    "Prudent Utility Practices" — The practices generally followed by the electric utility industry, as changed from time to time, which generally include, but are not limited to, engineering and operating considerations.

        1.41    "PURPA" - The Public Utility Regulatory Policies Act of 1978.

        1.42    "Qualifying Facility"or "QF" — A cogeneration facility or a small power production facility which is a Qualifying Facility under Subpart B of Subchapter K, Part 292 of Chapter I, Title 18, Code of Federal Regulations, promulgated by the FERC. Such a facility must be "new capacity" pursuant to PURPA, construction of which began on or after November 9, 1978.

        1.43    "SCC" — The State Corporation Commission of Virginia or any successor thereto.

        1.44    "Scheduled Outage" — A planned interruption of the Facility’s generation exceeding seven (7) consecutive Days that is required or recommended in Operator’s sole discretion, for inspection, preventive maintenance, corrective maintenance or repair or replacement of equipment and that is scheduled as such pursuant to the provisions of Section 7.2.

        1.45    "Summer Period" —The Summer Period shall be the six (6) Month period beginning 12:00 midnight on March 31 and ending at 12:00 midnight on the following September 30.

        1.46    "Term" —Shall have the meaning given to such term in Section 5.1.

        1.47    "Tracking Account" — A notional account in which amounts are added and subtracted as provided in Section 10.15(b).

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        1.48    "Winter Period" —The Winter Period shall be the six (6) Month period beginning 12:00 midnight on September 30 and ending at 12:00 midnight on the following March 31. Any references in this Agreement to specific Sections shall be deemed to be references to Sections of this Agreement, unless the context requires otherwise.

ARTICLE 2: Sale and Purchase of Energy and Capacity

        2.1    Operator agrees to sell, and North Carolina Power agrees to purchase, the Net Electrical Output of the Facility, but only to the extent that the Facility is Dispatched by North Carolina Power, and subject to the terms and conditions of this Agreement.

        2.2    Operator agrees to sell, and North Carolina Power agrees to purchase, Delivered Capacity from the Facility, subject to the terms and conditions of this Agreement.

        2.3    The Parties agree that Operator has fulfilled its obligation to provide the information, documentation and other materials required pursuant to Section 2.3 of the Second Amendment and Restatement.

        2.4    Operator has provided North Carolina Power, within ninety (90) Days after the Commercial Operations Date, a copy of a completion certificate issued by a widely recognized engineering firm that was acting as unaffiliated independent engineer for the lenders representing to the lenders, after construction was substantially completed, that the constructed Facility, if maintained in accordance with Prudent Electrical Practices, Prudent Utility Practices, and the terms of this Agreement could be reasonably expected to have a useful life at least equal to the Initial Term.

        2.5    The information, documentation and other materials referred to in Section 2.3 are for North Carolina Power’s use in administering this Agreement only.

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ARTICLE 3: Notices

        3.1    Any notice or communication required to be in writing hereunder shall be given by any of the following means: registered, certified, or first class mail, ground or air courier, telex, telecopy, or telegram. Such notice or communication shall be sent to the respective Parties at the address listed below. Except as expressly provided herein, any notice shall be deemed to have been given when sent. Any notice given by first class mail shall be considered sent at the time of posting and, if sent by ground or air courier, such notice shall be deemed sent one business Day after delivery to the courier. Communications by telex, telecopy, or telegram shall be deemed given when confirmed by telecopy machine report indicating satisfactory transmission and shall be followed up by depositing a copy of the same in the post office for transmission by registered, certified, or first class mail in an envelope properly addressed as follows:

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        3.2    Either Party may, by prior written notice to the other, change the representative or the address to which such notices and communications are to be sent.

ARTICLE 4: Pre- and Post-Operation Period

        4.1    Operator shall, at its expense, acquire, and maintain in effect, from the FERC and from any and all other federal, state, and local agencies, commissions and authorities with jurisdiction over Operator and/or the Facility, all permits, licenses, and approvals, and complete or have completed all environmental impact studies necessary as follows:

        4.2    Not used.

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        4.3    Operator has provided North Carolina Power with generator manufacturer’s capability curves, relay types, and proposed relay settings for review and inspection by North Carolina Power, and, within sixty (60) Days of receiving such material, North Carolina Power informed Operator, in writing, that the proposed relay types and relay settings were acceptable. Operator also has provided North Carolina Power with Facility design heat balance diagram, flow diagrams, Automatic Generation Control logic, and major equipment list for review. Operator shall notify North Carolina Power of any changes to any information provided in this Section in a timely manner.

        4.4    Operator and North Carolina Power have mutually developed written pre-commercial operations and post-commercial operations operating procedures consistent with the terms and conditions of this Agreement. The operating procedures discussed in this Section 4.4 are intended as a guide and shall be limited to how the Operator’s Facility and output are integrated into North Carolina Power’s bulk electric system. Topics covered include, but are not necessarily limited to, method of day-to-day communications; key personnel list for both Operator and utility operating centers; clearances and switching practices; outage scheduling; daily capacity and energy reports; unit operations log; and reactive power support.

        4.5    North Carolina Power prepared and submitted to Operator a written voltage schedule, North Carolina Power may change such voltage schedule upon thirty (30) Days prior written notice to Operator. Operator shall use such voltage schedule in the operation of its Facility. This voltage schedule shall be based on the normally expected operating conditions for the Facility and the reactive power requirements of North Carolina Power’s system.

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ARTICLE 5: Term and Termination

        5.1    The Initial Term of this Agreement is for a period of twenty-five (25) years commencing with the Commercial Operations Date, unless extended under this Article 5, terminated, or canceled. The Initial Term, as extended under this Article 5 during any Extended Term, is sometimes hereafter referred to as the "Term." In the event a Force Majeure condition delays a Party’s performance as stipulated in Article 14 of this Agreement after the Commercial Operations Date, then North Carolina Power may at its sole option extend the Term of this Agreement a period of time equal to the Force Majeure delay. North Carolina Power must provide the Operator a notice of its intent to extend this Agreement no less than 2 years prior to the end of the Initial Term, unless such Force Majeure occurs less than 2 years from the end of the Initial Term, in which case such notice must be provided to Operator by North Carolina Power sixty (60) Days after the end of the Force Majeure delay period.

        5.2    This Agreement may be extended for periods of up to five (5) years each (individually, an "Extended Term" and, collectively, the "Extended Terms"), provided that two (2) years prior to the end of the Initial Term, or any subsequent Extended Term, as the case may be, the Parties agree in writing to such extension.

        5.3    If either Party defaults under this Agreement, then the non-defaulting Party shall give the defaulting Party written notice describing such default. The defaulting Party shall be given sixty (60) Days from the receipt of such notice to cure such default. However, if the default cannot be cured within sixty (60) Days with the exercise of reasonable diligence, then the non-defaulting Party shall grant an additional reasonable period of time to cure such default, if the default is an Operator default. If the defaulting Party fails to cure such default within the prescribed period of time, then the non-defaulting Party may, in addition to any other rights or remedies available at law or in equity, immediately terminate this Agreement and consider defaulting Party in material breach of its obligations under this Agreement. Any of the following conditions shall be considered defaults by Operator under this Section 5.3, including without limitation:

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        5.4    Termination of this Agreement shall not be construed as a forfeiture or waiver of any statutory right of a Qualifying Facility to sell to North Carolina Power non-firm energy produced from the Facility.

ARTICLE 6: Representations and Warranties of Operator

        6.1    Operator represents and warrants that, as of December 1, 1990 and at all times thereafter during the Term of this Agreement, Operator will have a reliable supply of fuel of quality and in quantity sufficient to deliver energy and capacity as provided hereunder. From time to time, as North Carolina Power may reasonably request, Operator shall provide North Carolina Power evidence of its compliance with this obligation. Alternate supplies of fuel will be considered in determining whether Operator has a reliable supply of fuel.

        6.2    Operator warrants that the Facility will be operated and maintained in accordance with (i) operating procedures developed pursuant to Section 4.4, (ii) generally accepted Prudent Utility Practices, including without limitation, synchronizing, voltage and reactive power control, and (iii) generally accepted Prudent Electrical Practices.

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        6.3    Operator warrants that the Facility will be operated in such a manner so as not to have an adverse effect on North Carolina Power’s voltage level or voltage waveform.

        6.4    Operator warrants that the Facility will be operated at the voltage levels determined pursuant to Section 4.5, provided such operation is within the Design Limits.

        6.5    Operator shall, at all times, conform to all laws, ordinances, rules and regulations applicable to it. Operator shall give all required notices, shall procure and maintain all governmental permits, licenses and inspections necessary for its performance of this Agreement, and shall pay all charges and fees in connection therewith.

        6.6    Operator agrees to comply with all applicable provisions, and successor provisions thereto, of Executive Order 11246, as amended; § 503 of the Rehabilitation Act of 1973, as amended; § 402 of the Vietnam Era Veterans Readjustment Assistance Act of 1974, as amended; and implementing regulations sot forth in 41 C.F.R, §§ 60-1, 60-250, and 60-741 and the applicable provisions relating to the utilization of small and minority business concerns as set forth in 15 U.S.C. § 637, as amended. Operator agrees that the equal opportunity clause set forth in 41 C.F.R. § 60-1.4 and the affirmative action clauses set forth in 41 C.F.R. § 60-250.4 and 41 C.F.R. § 60-741.4 and the clauses relating to the utilization of small and minority business concerns set forth in 15 U.S.C. § 637(d)(3) and 48 C.F.R. § 52-219-9 are hereby incorporated by reference and made a part of this Agreement. Operator will adopt and comply with a small business and small disadvantaged business subcontracting plan which will conform to .the requirements set forth in 15 U.S.C. § 637(d)(6). The provisions of this section shall apply to Operator only to the extent that (i) such provisions are required of Operator under existing law, (ii) Operator is not otherwise exempt from said provisions and (iii) compliance with said provisions is consistent with and not violative of 42 U.S.C. §2000e et seq. , 42 U.S.C. § 1981 et seq ., or other acts of Congress.

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        6.7    Any fines or other penalties incurred by Operator or its agents, employees or subcontractors for noncompliance by Operator, its employees, or subcontractors with laws, rules, regulations or ordinances shall not be reimbursed by North Carolina Power but shall be the sole responsibility of Operator. If fines, penalties or legal costs are assessed against North Carolina Power by any government agency or court due to noncompliance by Operator with any of the laws, rules, regulations or ordinances referred to in Sections 6.5 and 6.6 above or any other laws, rules, regulations or ordinances with which compliance is required herein, or if the work of Operator or any part thereof is delayed or stopped by order of any government agency or court due to Operator’s noncompliance with any such laws, rules, regulations or ordinances, Operator shall indemnify and hold harmless North Carolina Power against any and all fines or penalties imposed on North Carolina Power clearly attributable to the solo failure of Operator to comply therewith. Operator shall also reimburse North Carolina Power for any and all legal or other expenses (including attorneys’ fees) reasonably incurred by North Carolina Power in connection with such fines or penalties.

        6.8    The Operator and general partners of Operator hereby represent and warrant that:

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        6.9    Not used.

        6.10    Operator agrees that, upon request of North Carolina Power, it shall deliver or cause to be delivered from time to time to North Carolina Power certifications of its officers, accountants, engineers, or agents as to such matters directly related to Operator’s ability to perform its obligations under this Agreement as North Carolina Power may reasonably request.

        6.11    The general partners of Operator agree to preserve and keep in force and effect Operator’s and their own corporate existence (if applicable) and all franchises, licenses and permits necessary to the proper conduct of its business, including without limitation the business of constructing, owning and operating the Facility.

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        6.12    Operator will keep proper books of record and account in which full and correct entries will be made of all dealings or transactions of or in relation to its business and affairs, in accordance with generally accepted accounting principles consistently applied. From time to time through the Term of this Agreement, but no more frequently than annually, North Carolina Power, at Operator’s cost, shall have the right to designate an independent public accounting firm to conduct a review of the Operator’s auditor’s audit of the books and records of Operator under a confidentiality agreement with Operator to the limited extent necessary (i) to verify that they are being kept in accordance with generally accepted accounting principles, and (ii) to advise North Carolina Power of the financial condition of Operator and that Operator is not in default under any loan agreements, transmission agreements or fuel supply agreements. Operator shall make all pertinent records available at its office at Charlottesville, Virginia during normal business hours.

        6.13    Operator will provide to North Carolina Power, on a Monthly basis, a statement of the total quantity and total delivered cost of all fuel consumed in the Facility.

ARTICLE 7: Control and Operation of the Facility

        7.1    Operator shall inform the North Carolina Power operations center designated in the interconnection study performed pursuant to Article 8 as to the daily operating schedule and generation capability of its Facility, including, without limitation, during any Forced Outage. In addition, by the 5th of each Month after the first Month after the Commercial Operations Date, Operator shall provide North Carolina Power with Facility performance and events data for the preceding Month in a format consistent with the most current NERC Generating Availability Data Systems ("GADS") reporting standards. Event reporting terminology and definitions under the NERC GADS reporting standards do not modify the terms of this Agreement.

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        7.2    Operator shall submit to North Carolina Power, in writing, by September 1 of each Year, its planned Scheduled Outage periods for the next Year. Operator may modify its Scheduled Outage periods by notifying North Carolina Power. of any such modifications at least ninety (90) Days (or less if North Carolina Power agrees) in advance. Such Scheduled Outages shall not exceed 30 Days in each Year, except for those Years where major maintenance overhauls are planned. Operator may only schedule major maintenance overhauls to occur in 2004, 2009, 2014 and 2019, unless mutually agreed otherwise. During such major maintenance overhaul years, Scheduled Outages shall not exceed 42 Days. North Carolina Power shall have the right to approve the start date of any Scheduled Outage, such approval not to be unreasonably withheld, delayed or conditioned, and, in any event, shall notify Operator of such approval or disapproval no later than the October 31 next following the submission by Operator of its planned Scheduled Outage periods for the next Year. At least thirty (30) days prior to any Scheduled Outage, Operator shall provide North Carolina Power with whatever schedule for such Scheduled Outage that Operator then has. Operator shall not schedule a Scheduled Outage during the Months of December, January, February or during the period from June 15 through September 15 of any Year without the prior written consent of North Carolina Power. In addition to Scheduled Outages, Operator is entitled to an unlimited number of Maintenance Outages and Forced Outages during any Year. Operator shall provide North Carolina Power with forty-eight (48) hours advance notice, or such lesser notice as is practicable under the circumstances, of the timing and estimated duration of any Maintenance Outage, and shall provide North Carolina Power with such notice as is practicable under the circumstances of the occurrence and estimated duration of any Forced Outage. Each such notice shall identify, to the extent then known by Operator, the equipment involved in such outage and the capacity that will not be available for Dispatch. During any such outage, Operator shall notify North Carolina Power promptly of any material changes in the notice information previously provided to North Carolina Power. The Parties shall work together in good faith to coordinate the start date of any Maintenance Outage. If North Carolina Power reasonably requests Operator to return all or part of that portion of the Facility that is affected by a Maintenance Outage or Forced Outage, as the case may be, to operational status, Operator shall complete its maintenance and repair work as soon as reasonably practical.

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        7.3    North Carolina Power shall have the right, upon six (6) months prior written notice, to revise the six (6) Months during which Operator shall not, unless mutually agreed, schedule a Scheduled Outage.

        7.4    Each Party shall keep complete and accurate records and all other data required by each of them for the purposes of proper administration of this Agreement.

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        7.5    Subject to the provisions of this Agreement, North Carolina Power can Dispatch the Facility, and make changes in Dispatch, but only to the extent consistent with the Design Limits. Subject to the provisions of this Agreement, Operator shall control and operate the Facility consistent with North Carolina Power’s Dispatch of the Facility; provided, however, that from time to time North Carolina Power shall not be obligated to accept or receive, and may require Operator to reduce or cease the delivery of, Net Electrical Output if:

North Carolina Power will make a reasonable effort to notify and coordinate such reductions and cessations of delivery of Net Electrical Output to North Carolina Power with Operator. If North Carolina Power requires Operator to reduce or cease the delivery of Net Electrical Output in any of the circumstances described in clauses (b), (c) or (d) of this Section 7.5, North Carolina Power shall provide Operator with forty-eight (48) hours prior notice thereof, or such lesser notice as is practicable under the circumstances. Any reduction or cessation in the delivery of Net Electrical Output to North Carolina Power required of Operator hereunder shall be implemented and completed as soon as possible consistent with Prudent Utility Practices.

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        7.6    When North Carolina Power Dispatches the Facility off-line pursuant to the provisions of Section 7.5, North Carolina Power will provide Operator with an estimate, to the nearest hour, of when the Facility can commence the delivery of Net Electrical Output. North Carolina Power will provide Operator with twenty (20) minutes notice of changes in operating levels to be achieved by the Facility, except that when the Facility is operated with Automatic Generation Control, North Carolina Power shall not be required to provide such notice.

        7.7    Operator shall employ qualified personnel for operating and monitoring the Facility and for maintaining communications between the Facility and North Carolina Power and shall ensure that such personnel are on duty at all times, twenty-four (24) hours a Day and seven (7) Days a week. During Scheduled Outages, Maintenance Outages, Forced Outages or any event