Standard Office Service Wholesale Sales Agreement

EXHIBIT 10.35


STANDARD OFFER SERVICE


WHOLESALE SALES AGREEMENT


THIS STANDARD OFFER SERVICE WHOLESALE SALES AGREEMENT ("Agreement") dated as of October 29, 1999, is by and between THE CONNECTICUT LIGHT AND POWER COMPANY ("CL&P" or "Buyer") and NRG POWER MARKETING INC. ("Seller"). The Seller and Buyer together are the Parties and each individually is a Party to this Agreement.
WITNESSETH:
WHEREAS, pursuant to Section 20(b) of Public Act 98-28, An Act Concerning Electric Restructuring ("Act"), the Buyer must procure generation for the purpose of providing Standard Offer Service to those end use consumers of electricity within its traditional retail service area ("Retail Customers") that do not or are unable to choose an Electric Supplier (as defined in Section 1(30) of the Act);


WHEREAS, by Order dated July 7, 1999, in Docket No. 99-03-36, the Connecticut Department of Public Utility Control ("DPUC") approved, with certain modifications, the Buyer's proposal to issue a competitive bid solicitation, or Request For Proposals, for generation service to supply fifty percent of the Buyer's Standard Offer Service Load ("the RFP");


WHEREAS, the DPUC has retained J.P. Morgan Securities, Inc. ("J.P. Morgan") to act as the exclusive agent to the DPUC to conduct the RFP;


WHEREAS, J.P. Morgan carefully evaluated the responses to the RFP, including the response submitted by the Seller, and advised that the Seller is a qualified bidder pursuant to the RFP, and that the Seller's offer to supply a portion of the Standard Offer Service Load meets the standards for selection in the RFP, subject to negotiating an acceptable agreement to supply Standard Offer Service;


WHEREAS, this Agreement sets forth the rates, terms and conditions under which the Seller will supply firm all-requirements service as necessary to serve a specified share of the Buyer's aggregate retail load that takes Standard Offer Service during the term of this Agreement;


NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the Parties to this Agreement covenant and agree as follows:


1. DEFINITIONS


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As used throughout this Agreement, the following terms shall have the
definitions set forth in this Article 1.


1.1 "BACK-UP SERVICE" means generation services provided to any
Retail Customer that has entered into a service contract with
an alternative supplier who, in turn, fails to provide
generation services to such Retail Customer other than due to
the Retail Customer's failure to pay for such services.


1.2 "CONTRACT LOAD QUANTITY" means the portion of the Standard
Offer Service Load, defined as a monthly total, for which the
Seller is obligated to supply SOS Requirements Power pursuant
to Section 3.5 of this Agreement. The Contract Load Quantity
shall be calculated in accordance with Appendix A.


1.3 "DELIVERY POINT" means any point on the NEPOOL PTF, or one or
more other points of interconnection between the Buyer's
transmission or distribution system and generating assets
owned or contracted for by the Seller, where Seller delivers
SOS Requirements Power to the Buyer, and at which point title
to and liability for electricity passes from the Seller to the
Buyer; provided, however, that the Seller shall assume all of
the risk that it will not obtain NEPOOL credit for power that
is not delivered to the NEPOOL PTF; and provided further that,
from the standpoint of the rights and benefits received by the
Buyer under this Agreement, all power delivered hereunder
shall be treated in the same manner as if the power had been
delivered to the NEPOOL PTF.


1.4 "DELIVERY SERVICES" means the combination of Regional Network
Service ("RNS") over NEPOOL PTF acquired pursuant to the
NEPOOL Transmission Tariff, Local Network Service ("LNS") over
the Buyer's Non-Pool Transmission Facilities pursuant to the
NU Operating Companies open access transmission tariff, and
firm distribution services under the Buyer's distribution
service tariff that are provided by the Buyer for the delivery
of SOS Requirements Power for the Contract Load Quantity.
Delivery Services shall not include losses, congestion
charges, ancillary services or any ISO charges associated with
SOS Requirements Power, all of which shall be the
responsibility of the Seller.


1.5 "ISO" means ISO New England, Inc., the Independent System
Operator for the NEPOOL Control Area, or any successor
thereto.


1.6 "MATERIAL ADVERSE EFFECT" as used in Sections 10.1 and 10.2
means any change in, or effect on the Buyer or Seller after
the date of this Agreement and prior to the Effective Date
that is materially adverse to any of the transactions
contemplated hereby, other than (i) any change or effect
resulting from changes in the international, national,
regional or local wholesale or retail markets for electric
power; (ii) any change or effect


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resulting from changes in the international, national,
regional or local wholesale or retail markets for any fuel
used by the Seller; (iii) any change or effect resulting from
changes in the North American, national, regional or local
electric transmission systems; (iv) any change or effect
resulting from any action or inaction by a legislative or
regulatory authority, other than failure of any state or
federal governmental authority or commission to give any
consent or approval.


1.7 "NEPOOL" means the New England Power Pool, the power pool
created by and operated pursuant to the provisions of the
Restated NEPOOL Agreement, as such agreement may be amended
from time to time.


1.8 "NEPOOL CONTROL AREA" means the geographic area in which the
ISO is responsible for maintaining transmission lines within
established security limits and for balancing the sum of
internal generation and net interchange with the control area
load at all times in order to maintain system stability,
reliability and frequency within acceptable limits.


1.9 "NEPOOL PTF" means the facilities categorized as Pool
Transmission Facilities as defined in the Restated NEPOOL
Agreement.


1.10 "SOS REQUIREMENTS POWER" means the firm wholesale power that
Seller is obligated to deliver as defined in Section 3.1.


1.11 "SOS SUPPLIER BILLING AMOUNT" means the monthly billing
quantity as determined in accordance with Appendix A.


1.12 "STANDARD OFFER SERVICE" OR "SOS" means the electric service
provided in accordance with Section 20(b) of the Act and the
implementing rules and regulations of the DPUC to those Retail
Customers of the Buyer that do not purchase electricity from
an Electric Supplier.


1.13 "STANDARD OFFER SERVICE LOAD" means the aggregate consumption
of all of CL&P's Standard Offer Service customers plus the
aggregate electric losses for delivery from a Delivery Point
to the end-use meters of all such customers as determined in
accordance with Appendix A.


1.14 "TERM" means the period during which the Seller is obligated
to supply SOS Requirements Power pursuant to this Agreement.
The Term shall be for four (4) calendar years commencing at
the hour ending 0100 on January 1, 2000, and terminating at
the hour ending at 2400 on December 31, 2003, unless this
Agreement is terminated earlier pursuant to its terms.


1.15 "TRANSITION AGREEMENT" means the Agreement for Transition
Power Supply between and among The Connecticut Light And Power
Company, NRG Energy, Inc., NRG Power Marketing Inc., Montville
Power LLC,


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Middletown Power LLC, Devon Power LLC, Norwalk Power LLC, and
Connecticut Jet Power LLC, pursuant to which the parties to
such agreement have arranged for the Buyer to acquire rights
to power between the date of closing of the sale of certain of
the Seller's generating assets to NRG Energy, Inc. and the
commencement of SOS, or for the Seller to acquire rights to
power from the date of commencement of SOS to the date of
closing of the sale of such CL&P generating assets to NRG
Energy, Inc.


2. EFFECTIVE DATE AND FILING


2.1 This Agreement shall be binding on the Parties as of the date
it is executed by both Parties ("Effective Date"); provided
that the provision of SOS Requirements Power by the Seller
shall be subject to obtaining necessary regulatory
authorizations for providing such service. Promptly after
execution hereof, the Seller shall file this Agreement with
the Federal Energy Regulatory Commission ("FERC") and shall
request that the FERC accept this Agreement for filing without
modification or condition, with service hereunder to be
effective commencing on January 1, 2000. The Buyer shall
support such filing. In addition, the Buyer shall, promptly
after execution hereof, submit this Agreement to the DPUC for
its approval as set forth in the RFP. The Seller shall bear
the cost of the FERC filing described above except for the
costs associated with the Buyer's intervention. The Buyer
shall bear the cost of the DPUC filing described above except
for the cost of the Seller's intervention. In each case, the
Party responsible for filing this Agreement shall request that
the regulatory agency give confidential treatment to the
pricing terms of this Agreement, which are the result of a
competitive solicitation held by the Buyer.


2.2 In the event that the FERC or the DPUC grants conditional
approval of this Agreement, compliance with which would create
a material adverse economic impact on a Party, the adversely
affected Party may seek to negotiate such changes to this
Agreement as may be necessary to restore the balance of
consideration hereunder while simultaneously complying with
the FERC and DPUC orders. If the Parties are unable to
negotiate such changes that are satisfactory to each Party
within five (5) business days after the FERC or DPUC order,
either Party shall have the right to terminate this Agreement
by giving five (5) days written notice to the other Party, in
which event the Agreement shall be null and void and of no
further force and effect from and after the date of
termination. In the event that the FERC or the DPUC does not
accept the changes negotiated by the Parties hereunder, either
Party shall have the right to terminate this Agreement upon
thirty (30) days' written notice to the other Party, in which
event the Agreement shall be null and void and of no further
force and effect from and after the date of termination.


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2.3 The applicable provisions of this Agreement shall continue in
effect after expiration of the Term (or earlier termination as
provided herein) to the extent necessary to provide for final
accounting, final billing, billing adjustments, resolution of
any billing dispute, resolution of any court or administrative
proceeding and final payments.


3. SALE AND PURCHASE OF SOS REQUIREMENTS POWER


3.1 SOS Requirements Power is the wholesale power delivered at the
Delivery Point(s) that is supplied at all times and in
quantities reflecting the full requirements for power of
Retail Customers purchasing Standard Offer Service from CL&P.
SOS Requirements Power shall be firm and shall vary in
quantity from minute to minute, hour to hour, day to day and
month to month based on the consumption patterns of Retail
Customers. SOS Requirements Power includes power supply and
ancillary services, in such amounts as are required for the
Buyer to serve the Contract Load Quantity plus losses at all
times throughout the Term. SOS Requirements Power includes all
of the power supply and ancillary services that are or may be
necessary to serve electrical load under the Restated NEPOOL
Agreement during the Term, including Energy, Installed
Capability, Operable Capability, Operating Reserves, Automatic
Generation Control, electrical losses, congestion charges
imposed under the NEPOOL Transmission Tariff, charges of the
ISO associated with NEPOOL membership and with serving the
Contract Load Quantity, and any future additions, deletions or
changes to the seven NEPOOL products (Energy, Installed
Capability, Operable Capability, 30-minute Non-Spinning
Operating Reserves, 10-Minute Spinning Reserves, 10-Minute
Non-Spinning Reserves, and Automatic Generation Control) that
are required for entities serving electrical load in NEPOOL.
SOS Requirements Power shall also include such transmission
and distribution delivery services as may be required for the
Seller to deliver SOS Requirements Power to the Delivery
Point(s). SOS Requirements Power shall not include any current
or future requirement to meet a renewable energy portfolio
standard in the State of Connecticut.


3.2 The Seller shall deliver and sell to Buyer at a Delivery Point
the Contract Load Quantity. The billing determinants on which
payment to Seller is based shall be determined in accordance
with Appendix A.


3.3 The Buyer shall receive and purchase power delivered by Seller
in accordance with this Section 3.


3.4 The Seller shall own or procure sufficient firm power supplies
and ancillary services to provide SOS Requirements Power
throughout the Term, and shall schedule all such power
supplies and ancillary services with the ISO


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for use by the Buyer in accordance with the provisions of the
Restated NEPOOL Agreement (including future amendments
thereto) and the applicable operating procedures of the ISO.
The Seller shall be responsible for all transmission and
distribution delivery costs, if any, required to deliver SOS
Requirements Power to the Delivery Point(s).


3.5 The Contract Load Quantity shall be equal to thirty-five (35)
percent of the Standard Offer Service Load during calendar
year 2000, forty (40) percent of the Standard Offer Service
Load during calendar years 2001 and 2002, and forty-five (45)
percent of the Standard Offer Service Load during calendar
year 2003.


3.6 The Buyer shall procure or arrange for Delivery Services in
order to accomplish the firm delivery of SOS Requirements
Power from the Delivery Point(s) to the Retail Customers
taking SOS Requirements Power throughout the Term; provided
that the Buyer's obligation to supply Delivery Services at and
from the Delivery Point(s) with respect to any particular
generating resource of the Seller shall be subject to the
availability of transmission service for such delivery under
the NEPOOL Transmission Tariff.


3.7 For the entire Term, the Seller shall either (1) be a member
of NEPOOL with its own load and settlement account established
in accordance with the rules of the ISO, or (2) contract with
a NEPOOL member for such member to include the Seller's load
in its own load and settlement account.


3.8 The Seller and Buyer shall comply with the procedures, rules
and regulations of the ISO and NEPOOL and the requirements of
the Restated NEPOOL Agreement as they may apply to the
purchase, sale and delivery of SOS Requirements Power.


3.9 The Seller shall be responsible for forecasting the Contract
Load Quantity for purposes of meeting its supply obligation
hereunder on a monthly, daily and hourly basis, for the full
Term of the Agreement. The Buyer's most recent forecasts of
energy sales and peak demand for its service area are set
forth in Appendix B for informational purposes. The Buyer will
supply the Seller with (1) any updates or material changes to
such forecasts made during the Term, (2) on a weekly basis,
the actual number of customers on Standard Offer Service
broken down by customer segment to the extent known, for the
previous week, and (3) within 37 hours after the close of the
day, the same supplier hourly loads the Buyer submitted to the
ISO on behalf of the Seller.


3.10 The Seller shall be responsible for and shall pay all ISO and
NEPOOL charges and expenses associated with the provision of
SOS Requirements Power, except for any such ISO or NEPOOL
charges that


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are imposed directly on the Buyer in connection with the
provision of Delivery Services by the Buyer.


3.11 The Seller shall be responsible for and shall pay all taxes,
fees, and levies that may be assessed by any entity in
connection with the provision of SOS Requirements Power except
for (1) such taxes, fees and levies that Buyer is allowed to
collect directly from the Retail Customers, and (2) such
taxes, fees and levies that are assessed directly to the Buyer
in connection with the provision of Delivery Services.


3.12 If and to the extent that, at any time during the Term, the
congestion management scheme in effect under the NEPOOL
Transmission Tariff provides for the automatic assignment of
rights to rebates of transmission congestion charges to retail
loads of the Buyer, the Seller shall be entitled to a portion
of such congestion rebate rights based on the ratio between
the Contract Load Quantity and the Buyer's retail load that is
subject to the automatic assignment of such rights.


4. CHARGE PROVISIONS


4.1 For and in consideration of the sale by the Seller to the
Buyer of SOS Requirements Power, the Buyer shall pay the per
unit charges set forth in the Table below for all SOS
Requirements Power supplied to Retail Customers during the
Term of this Agreement. The monthly quantity of SOS
Requirements Power to which the unit charges set forth herein
shall be applied for billing purposes, shall be the SOS
Supplier Billing Amount:


NRG POWER MARKETING
Table of Load Percentages and Charges


- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
5% LOAD 2000 2001 2002 2003
SHARE* (CENTS PER KWH) (CENTS PER KWH) (CENTS PER KWH) (CENTS PER KWH)


- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
1ST - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2ND - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
3RD - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
4TH - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------


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5TH - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
6TH - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
7TH - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
8TH - - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
9TH - - - - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10TH - - - - - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------


4.2 The charges set forth in Section 4.1 are the result of a
competitive bid solicitation and shall apply for the entire
Term unless both Parties agree to a change in charges set
forth in a written amendment to the Agreement that is accepted
for filing by the FERC. Nothing in this Section 4.2 is
intended to modify Sections 2.2, 4.5, or 9.3 of this
Agreement.


4.3 It is the intent of the Parties that, except as provided in
Sections 4.5 and 9.3, or as the Parties otherwise agree,
neither the Seller and its affiliates nor the Buyer and its
affiliates shall have the unilateral right to make a filing
with the FERC under any Section of the Federal Power Act, or
with the DPUC, seeking to change the charges or any other
terms or conditions set forth in this Agreement for any
reason.


4.4 Neither Party shall instigate or cooperate with any effort of
third parties to petition the FERC or the DPUC to change any
term of the Agreement (which includes the charges and
quantities). If any third party nevertheless petitions the
FERC or the DPUC to establish a proceeding under Section 206
of the Federal Power Act, both Parties shall cooperate to seek
to dismiss such proceeding and to uphold the Agreement without
change. It is the intention of the Parties that any authority
of the FERC or the DPUC to change the Agreement be strictly
limited to that which applies when the contracting parties
have irrevocably waived their right to seek to have the FERC
or the DPUC change any term of this Agreement.


4.5 In the event that the DPUC modifies the rules relating to the
provision of Standard Offer Service during the Term, or
Connecticut enacts legislation that has the affect of
modifying the provisions of the Act relating to Standard Offer
Service, and such DPUC or legislative modifications would
materially adversely affect the rights and responsibilities of
either Party under this Agreement, the Party that believes it
would be materially adversely affected by such modifications
may request that the DPUC take action to protect the interests
of such Party. If the DPUC does not provide relief
satisfactory to such Party within sixty (60) days from the
date of filing of the request, the Parties shall enter into
good faith negotiations to amend this Agreement in a mann ...