FirstEnergy Operating
Companies
Exhibit
10.7
FERC Electric Tariff, Second
Revised Volume No. 2
Service Agreement No
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[Execution Copy]
MANSFIELD POWER SUPPLY
AGREEMENT
Between The
Cleveland Electric Illuminating Company
and The
Toledo Edison Company, Sellers
and
FirstEnergy
Generation Corp., Buyer
This Mansfield Power Supply
Agreement ("Agreement") dated October 14, 2005, is made by and
between The Cleveland Electric Illuminating Company and The Toledo
Edison Company ("Sellers") and FirstEnergy Generation Corp.,
("Genco" or "Buyer"). The Sellers and Genco may be identified
collectively as "Parties" or individually as a "Party." This
Agreement is entered into in connection with the transfer of
ownership of The Cleveland Electric Illuminating Company, Ohio
Edison Company, Pennsylvania Power Company, and The Toledo Edison
Company’s fossil and pumped storage generation assets to
Genco.
WHEREAS, Buyer owns or operates
fossil and pumped storage generation facilities formerly owned by
The Cleveland Electric Illuminating Company, Ohio Edison Company,
Pennsylvania Power Company, and The Toledo Edison Company
(collectively "the FirstEnergy Operating Companies");
and
WHEREAS, Sellers lease portions
of the Bruce Mansfield Generating Station, Units 1, 2, and 3
(hereinafter “Leased Mansfield Facilities”) from owner
trustees under the Sale/Leaseback Arrangements; and
WHEREAS, Genco, an affiliate of
the Sellers, operates the Leased Mansfield Facilities;
and
WHEREAS, Sellers wish to sell
to Buyer the electrical output of the Leased Mansfield Facilities;
and
WHEREAS, Buyer is engaged
exclusively in the business of owning and operating generation and
selling Power at wholesale; and
WHEREAS, Buyer desires to
obtain the entire electric output of the Leased Mansfield
Facilities pursuant to the rates, terms and conditions set forth
herein.
It is agreed as
follows:
I.
TERM
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A.
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The sale and purchase of Power
pursuant to this Agreement shall begin on December 1, 2005, or such
later effective date authorized by the FERC, for an initial term
ending December 31, 2010. This Agreement shall remain in effect
from year to year thereafter unless terminated by either Party upon
at least sixty days written notice prior to the end of the calendar
year.
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Issued by: David M. Blank,
Vice President
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Effective
Date:
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Issued on: October 14,
2005
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December 1,
2005
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B.
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Notwithstanding I.A, this
Agreement will terminate if the Sale/Leaseback Arrangements for the
Leased Mansfield Facilities are terminated or assigned to Genco.
Termination of the Agreement under this Section will be effective
no sooner than the effective date of the termination or assignment
of the Sale/Leaseback Arrangements. Buyer will give Sellers no less
than sixty days written notice of the termination of this Agreement
under this Section I.B. In the event of a partial termination or
assignment of the Sale/Leaseback Arrangements, the Parties will
amend this Agreement to reflect the revised rates, terms, and
conditions for the sale of Power from the remaining Leased
Mansfield Facilities.
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II.
SALE AND PURCHASE OF CAPACITY AND ENERGY
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A.
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Sellers shall make available to
Buyer all of the Capacity, Energy, Ancillary Services, Emission
Allowances, and Renewable Energy Attributes, if any, which are
available from the Leased Mansfield Facilities identified in
Exhibit C to this Agreement, and Buyer shall purchase and pay for
such Capacity, Energy, Ancillary Services, Emission Allowances and
Renewable Energy Attributes in accordance with the terms of this
Agreement. Sellers shall make firm Capacity, Energy, and Ancillary
Services available at the Delivery Points. Buyer shall arrange and
will be responsible for all transmission, congestion costs, losses,
and related services at and from the Delivery Points. The Capacity,
Energy, Ancillary Services, Emission Allowances, and Renewable
Attributes supplied by Sellers are collectively referred to as
Buyer's "Power Supply Requirements." Electric 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
applicable Transmission Provider OATT, and the requirements of the
FERC.
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B.
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Genco will operate and maintain
the Leased Mansfield Facilities in accordance with Good Utility
Practice, the applicable requirements of the FERC, NERC, Electric
Reliability Organization, as well as the requirements of the
regional reliability councils or Regional Entity, and Regional
Transmission Organizations where the Leased Mansfield Facilities
are located.
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III.
SCHEDULING AND SYSTEM PLANNING
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A.
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Sellers shall notify Buyer on
or before November 1 of each year during the term of this Agreement
of the amount of Capacity, Energy, Ancillary Services, Emission
Allowances, and Renewable Energy Attributes it expects to have
available from the Leased Mansfield Facilities for each day in each
month of the next calendar year. The information provided in this
notification shall include, but not be limited to, the time and
expected duration of any planned outage of the Leased Mansfield
Facilities.
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B.
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Sellers shall update their
annual forecast of available Capacity, Energy, Ancillary Services,
Emission Allowances, and Renewable Energy Attributes for any change
or expected change in the operation of the Leased Mansfield
Facilities that would materially affect the annual forecast
provided to Genco. Sellers shall provide the updated forecast for
any full month(s) remaining in the calendar year within thirty days
of becoming aware of the change or expected change in the operation
of the Leased Mansfield Facilities.
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C.
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Sellers will supply Genco, upon
request, any such information as is necessary to meet the
requirements of the applicable Transmission Provider OATT, FERC,
NERC, Electric Reliability Organization, regional reliability
council, Regional Entity, or Government Authority.
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IV.
PRICE
Sellers shall charge, and Buyer
shall pay, for Buyer's Power Supply Requirements, as follows on a
monthly basis.
A. Charges
Buyer will pay Sellers the
Monthly Charge under the formula set forth in Exhibit A for the
Power Supply Requirements Available from the Leased Mansfield
Facilities identified in Exhibit C.
B. Billing
and Payment
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 Sellers
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 Sellers.
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.
C.
Records
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 for such longer
period as may be required by law.
D.
Audit and Adjustment Rights
Buyer shall have the right, at
its own expense and during normal business hours, to audit the
accounts and records of Sellers 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 therefore will be promptly made. No adjustment
will be made for any invoice or payment made more than one year
from rendition thereof. This provision shall survive the
termination of this Agreement for a period of one year from the
date of termination for the purpose of such invoice and payment
objections. To the extent that audited information includes
Confidential Information, the Buyer shall keep all such information
confidential under Section VII.C.
E.
Section 205 Rights
Nothing contained herein shall
be construed as affecting in any way the right of the Party
furnishing service under this Agreement to unilaterally make
application to the FERC for a change in rates under Section 205 of
the Federal Power Act and pursuant to the FERC's Rules and
Regulations thereunder. Provided, however, that nonrate terms and
conditions may be amended only by a written agreement signed by the
Parties.
V.
METERING
Generation metering shall be
installed, operated and maintained in accordance with the
applicable generator interconnection agreements among the Genco,
Transmission Provider, and Transmission Owner. Metering between
control areas shall be handled in accordance with the applicable
Transmission Provider OATT. Retail metering shall be provided in
accordance with applicable state law. Nothing in this Agreement
requires Sellers or Buyer to install new metering
facilities.
VI.
NOTICES
All notices, requests,
statements or payments shall be made as specified below. Notices
required to be in writing shall be delivered by letter, facsimile
or other documentary form. Notice by facsimile or hand delivery
shall be deemed to have been received by the close of the Business
Day on which it was transmitted or hand delivered (unless
transmitted or hand delivered after close in which case it shall be
deemed to have been received at the close of the next Business
Day). Notice by overnight mail or courier shall be deemed to have
been received two Business Days after it was sent. A Party may
change its addresses by giving notice as provided above.
NOTICES &
CORRESPONDENCE :
To Sellers: FirstEnergy
Service Company
