FirstEnergy Solutions
Corp.
EXHIBIT
10.10
FERC Electric Tariff, Original
Volume No.1
Service Agreement
No.5
ELECTRIC POWER SUPPLY
AGREEMENT
Between FirstEnergy
Solutions Corp., Seller
And Pennsylvania Power
Company, Buyer
This Electric Power Supply
Agreement (“Agreement”) dated October 31, 2005, is
made by and between FirstEnergy Solutions Corp.,
(“SOLUTIONS” or “Seller”), and Pennsylvania
Power Company (“Penn Power” or “Buyer”).
SOLUTIONS and Penn Power may be identified collectively as
“Parties” or individually as a “Party.”
This Agreement is entered into in connection with Pennsylvania
electric restructuring legislation and is designed to provide Penn
Power’s Power Supply Requirements:
WHEREAS
, Seller has
purchased: all of the electric output of nuclear generating units
of its affiliate, FirstEnergy Nuclear Generation Corp. (including
the electric output of nuclear generating units owned by others
that is purchased by FirstEnergy Nuclear Generation Corp.); all of
the electric output of fossil and pumped storage generating
facilities owned or operated by its subsidiary, FirstEnergy
Generation Corp.; and power from unaffiliated companies
(collectively referred to as “Generating Resources”);
and
WHEREAS
, Seller is
engaged inter alia
, in the business of generating, purchasing, and selling electric
power at wholesale and retail; and
WHEREAS
, Buyer is
responsible for obtaining and delivering sufficient Capacity,
Energy, and related services necessary to meet its Provider of Last
Resort obligations under Pennsylvania law, as well as other power
supply obligations incurred by law, contract or tariff;
WHEREAS
, Buyer desires to
obtain from Seller sufficient Power to satisfy its Power Supply
Requirements to Pennsylvania customers under the rates, terms and
conditions set forth herein;
It is agreed as
follows:
The sale and purchase of
electric power pursuant to this Agreement shall begin on January 1,
2006, or such later effective date authorized by the Federal Energy
Regulatory Commission, and shall remain in effect through December
31, 2006.
Issued By: Richard
H. Marsh, Senior Vice President
Effective
Date: January 1, 2006
Issue Date:
October
31, 2005
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II.
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SALE
AND PURCHASE OF CAPACITY AND ENERGY
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A.
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Seller shall make available to
Buyer, Capacity and Energy sufficient to satisfy Buyer’s
Power Supply Requirements. Seller shall make such firm Capacity and
Energy available at the Delivery Points. Capacity and Energy
supplied shall be sixty-hertz, three phase alternating current. The
Power Supply Requirements will be provided in accordance with Good
Utility Practice, and where applicable, the provisions of the OATT
of the Transmission Provider or any superseding tariff. The
Capacity and Energy provided by Seller will comply with all
requirements for Network Resources under the Transmission Provider
OATT and Buyer’s Network Transmission Agreements with
Transmission Provider.
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B.
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Buyer will purchase its full
Power Supply Requirements from Seller during the term of this
Agreement. Buyer will receive and pay for its Power Supply
Requirements in accordance with Section IV of this Agreement. Buyer
will be responsible for obtaining all Network Transmission Service,
Ancillary Services, congestion charges, marginal transmission
losses, and such other services and administrative charges as are
required and imposed by the Transmission Provider OATT on the Buyer
as a Load Serving Entity for the delivery of Capacity and Energy at
and from the Delivery Points under this Agreement.
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C.
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Seller may purchase power from
third parties in the Spot Market as necessary to satisfy its
obligations under this Agreement.
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D.
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If Seller’s credit is
adversely impacted during the term of this Agreement, Buyer agrees
to allow Seller to acquire purchased power as agent for the Buyer
where reasonably necessary to minimize supply costs under this
Agreement. Buyer will pay all of the costs associated with
acquiring this Power, but Seller will not charge Buyer any broker
fee for performing this service.
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III.
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SCHEDULING AND SYSTEM
PLANNING
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A.
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On or before November 1, 2005,
Buyer will inform Seller of its initial annual Capacity and Energy
forecast for calendar year 2006. Such initial annual forecast shall
include Buyer’s Power Supply Requirements for the year, by
month. Based on Buyer’s initial annual forecast, as well as
other information that may be communicated between Buyer and Seller
as necessary and appropriate for system planning, Seller shall
procure the necessary Generation Resources and develop forecasts of
Buyer’s Power Supply Requirements on a weekly, daily and
hourly basis, and shall periodically update such forecasts to
reflect current circumstances.
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B.
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Buyer shall update its initial
annual forecast of Capacity and Energy for any change or expected
change in its Power Supply Requirements that would materially
affect the forecast provided to Solutions. Buyer shall provide the
updated forecast to Solutions for any full month(s) remaining in
the calendar year within thirty days of becoming aware of the
change or expected change in its Power Supply
Requirements.
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Effective
Date: January 1, 2006
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C.
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Buyer is responsible for
scheduling delivery of its Power Supply Requirements with
Transmission Provider in accordance with the OATT. Buyer will
simultaneously furnish its schedule to Seller and Transmission
Provider. Seller will supply Capacity and Energy to Buyer in
accordance with the schedule provided to Transmission Provider.
Buyer and Seller acknowledge that Buyer’s Power Supply
Requirements may vary from the schedule provided to Transmission
Provider. Buyer agrees that it is responsible for payment of any
Transmission Provider charges incurred when actual Power Supply
Requirements differ from the schedule provided. Seller shall be
responsible for payment of any Transmission Provider charges
incurred by its failure to deliver the scheduled amount of Capacity
and Energy.
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D.
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Load Management. To minimize
supply risk to the Seller hereunder, Buyer agrees to enforce its
applicable Retail Tariffs, Special Contracts, and federal tariffs
and contracts, including, but not limited to, those tariffs or
contracts that provide for curtailment or interruption of electric
service, real time pricing, or other load management devices. At
Buyer’s request Seller will provide estimates of the Spot
Market price of Energy in sufficient detail for Buyer to implement
and administer its tariffs and contracts with retail customers. Any
such data furnished to Buyer shall be treated as Confidential
Information.
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E.
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Seller agrees to operate its
Generating Resources in accordance with Good Utility Practice,
including, but not limited to the efficient and economic dispatch
of the Generating Resources. Seller will self-schedule sufficient
Generating Resources to supply Buyer’s Power Supply
Requirements in accordance with the Buyer’s delivery schedule
and Transmission Provider OATT.
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F.
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Buyer and Seller agree to
cooperate in providing any information required by the Transmission
Provider, NERC, regional reliability council, Electric Reliability
Organization, Regional Entity or Government Authority related to
service provided under this Agreement.
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Seller shall charge, and Buyer
shall pay the following charges for Buyer’s Power Supply
Requirements. The method for calculating this amount is set forth
in Exhibit B.
Effective
Date: January 1, 2006
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A.
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Capacity and Energy
Charges
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Buyer shall pay Seller an
amount up to, but not exceeding, the amount of money that Buyer
bills its retail customers who elect to receive generation service
from Buyer as generation service charges, including the retail
charge for losses billed to Buyer’s retail customers, under
the Buyer’s Retail Tariffs and Special Contracts as approved
by the Pennsylvania Public Utility Commission. This amount will be
reduced for any gross receipts taxes contained in the generation
service portion of Buyer’s Retail Tariffs and Special
Contracts. As soon as practicable after the end of the month, Buyer
shall provide Seller load data, metered sales, and rates used for
billing in sufficient detail for Seller to determine after the
fact, the revenues due Seller for Buyer’s Power Supply
Requirements and delivered to the applicable retail customer
classes during a billing period. Buyer and Seller will abide by all
applicable Code of Conduct provisions in exchanging this data, and
such data will be considered Confidential Information under Section
VII.C of this Agreement.
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B.
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Power Supply for Buyer’s
Existing Wholesale Contracts
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During the term of this
Agreement, Seller will supply sufficient Capacity and Energy to
fulfill Power supply obligations under Buyer’s wholesale
contracts in effect on January 1, 2006. Buyer is responsible for
scheduling and delivery of Power under such wholesale contracts, as
well as payment of any charges imposed by the Transmission Provider
for delivery of Power under the wholesale contracts. Buyer will pay
Seller the amount billed by Buyer under its wholesale contracts for
Power supply, including, but not limited to, charges for demand
Capacity, Energy, or reserves. As soon as practicable after the end
of the month, Buyer shall provide Seller load data, metered sales,
and rates used for billing wholesale customers in sufficient detail
for Seller to determine after the fact, the revenues due Seller for
Buyer’s existing wholesale contracts.
Unless otherwise specifically
agreed upon by the Parties, the calendar month shall be the
standard period for all billings and payments under this Agreement.
As soon as practicable after the end of each month, the Seller will
render an invoice to Buyer for the amounts due for Power Supply
Requirements for the preceding month. Payment shall be due and
payable within ten days of receipt of the invoice or, if such day
is not a Business Day, then on the next Business Day. Buyer will
make payments by electronic funds transfer or by other mutually
agreeable method(s) to the account designated by Seller. Any
amounts not paid by the due date will be deemed delinquent and will
accrue interest at the Interest Rate until the date of payment in
full.
Effective
Date: January 1, 2006
Each Party shall keep complete
and accurate records of its operations under this Agreement and
shall maintain such data as may be necessary to determine the
reasonableness and accuracy of all relevant data, estimates,
payments, or invoices submitted by or to it hereunder. All records
regarding this Agreement shall be maintained for a period of three
years from the date of the invoice or payment, or such longer
period as may be required by law.
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E.
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Audit and Adjustment
Rights
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Buyer shall have the right, at
its own expense and during normal business hours, to audit the
accounts and records of Seller that reasonably relate to the
provision of service under this Agreement. If the audit reveals an
inaccuracy in an invoice, the necessary adjustment in such invoice
and the payments therefor will be p
