Wholesale Sales Agreement

WHOLESALE SALES AGREEMENT


WHOLESALE SALES AGREEMENT


between


NEW ENGLAND POWER COMPANY


and


USGEN ACQUISITION CORPORATION


Dated as of August 5, 1997


Table of Contents


ARTICLE 1. BASIC UNDERSTANDINGS........................................ 1


ARTICLE 2. DEFINITIONS................................................. 1


ARTICLE 3. TERM AND REGULATORY APPROVAL................................ 3
3.1 Term........................................................ 3
3.2 Filings..................................................... 4


ARTICLE 4. SALE AND PURCHASE........................................... 4
4.1 Sale and Purchase........................................... 4
4.2 Quantities.................................................. 4


ARTICLE 5. PRICE AND BILLING........................................... 5
5.1 Price....................................................... 5
5.3 Taxes, Fees and Levies...................................... 7


ARTICLE 6. DELIVERY AND LOSSES......................................... 7
6.1 Delivery.................................................... 7


ARTICLE 7. DEFAULT AND TERMINATION..................................... 7
7.1 Material Breach and Termination............................. 7


ARTICLE 8. NOTICES, REPRESENTATIVES OF THE PARTIES..................... 9
8.1 Notices..................................................... 9
8.2 Authority of Representative................................. 9


ARTICLE 9. LIABILITY, INDEMNIFICATION, AND
RELATIONSHIP OF PARTIES..................................... 10
9.1 Limitation on Consequential, Incidental and Indirect
Damages..................................................... 10
9.2 Indemnification............................................. 10
9.3 Independent Contractor Status............................... 11


ARTICLE 10. ASSIGNMENT.................................................. 11
10.1 General Prohibition Against Assignments..................... 11
10.2 Exceptions to Prohibition Against Assignments............... 11


ARTICLE 11. SUCCESSORS AND ASSIGNS...................................... 11


ARTICLE 12. FORCE MAJEURE............................................... 12
12.1 Force Majeure Standard...................................... 12
12.2 Force Majeure Definition.................................... 12
12.3 Obligation to Diligently Cure Force Majeure................. 12


ARTICLE 13. WAIVERS..................................................... 13


ARTICLE 14. REGULATION.................................................. 13
14.1 Laws and Regulations........................................ 13
14.2 NEPOOL Requirements......................................... 13


ARTICLE 15. INTERPRETATION.............................................. 13


ARTICLE 16. SEVERABILITY................................................ 14


ARTICLE 17. MODIFICATIONS............................................... 14


ARTICLE 18. SUPERSESSION................................................ 14


ARTICLE 19. COUNTERPARTS................................................ 14


ARTICLE 20. HEADINGS.................................................... 14


WHOLESALE SALES AGREEMENT
-------------------------


This WHOLESALE SALES AGREEMENT ("Agreement") is dated as of August 5, 1997 and is by and between NEW ENGLAND POWER COMPANY ("NEP"), a Massachusetts corporation, and USGen Acquisition Corporation, a Delaware corporation ("Buyer"). This Agreement provides for the purchase by Buyer and the sale by NEP of Wholesale Nuclear Entitlement as defined in this Agreement.


ARTICLE 1. BASIC UNDERSTANDINGS


NEP has ownership and/or contractual interests in certain nuclear generating units and is willing to supply electric energy, capacity, and any other associated electric products from those interests to Buyer on the terms specified in this Agreement. Buyer desires to purchase that electric energy, capacity, and any other associated electric products from NEP. Nothing in this Agreement shall be deemed to cause Buyer to have acquired any Ownership Interest or otherwise be treated as an owner of any Nuclear Interest.


ARTICLE 2. DEFINITIONS


The following words and terms shall be understood to have the following meanings when used in this Agreement, or in any associated documents entered into in conjunction with this Agreement. In addition, except as otherwise expressly provided, where terms used in this Agreement are defined in the NEPOOL Agreement and not otherwise defined herein, such definitions are expressly incorporated into this Agreement by reference.


CLOSING DATE - The date upon which Buyer acquires control of the generating assets it purchases from NEP.


COMMISSION OR FERC - The Federal Energy Regulatory Commission or such successor federal regulatory agency as may have jurisdiction over this Agreement.


CONTRACT PERIOD - A three month period during the term of this Agreement, except that the first Contract Period shall begin on the Closing Date and end on the last day of the third month following the month in which the Closing Date occurred and, if the term of this Agreement expires on a date other than the last day of any three month period, the last Contract Period shall also end on that date.


DEPARTMENT - The Massachusetts Department of Public Utilities.


GOOD UTILITY PRACTICE(S) - The practices, methods and acts (including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry) that at a particular time, in the exercise of reasonable judgment in light of the facts known or that should reasonably have been known at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with law, regulation, codes, standards, equipment manufacturer's recommendations, reliability, safety, environmental protection, economy and expedition.


GWH - Gigawatt hour.


ISO - The Independent System Operator to be established in accordance with the NEPOOL Agreement and the Interim Independent System Operator Agreement as amended, superseded or restated from time to time.


KW - Kilowatt.


KWH - Kilowatt- hour.


MMBTU - Million British thermal units. NUCLEAR INTERESTS - NEP's interests as a joint owner in Seabrook Unit 1 and Millstone Unit 3 and as a purchaser under power contracts with Vermont Yankee Nuclear Power Corporation and Maine Yankee Atomic Power Company.


NEPEX - The New England Power Exchange.


NEPOOL - The New England Power Pool.


NEPOOL AGREEMENT - The New England Power Pool Agreement dated as of September 1, 1971, as amended and as may be amended or restated from time to time.


OWNERSHIP INTERESTS - NEP's interests as a joint owner in Seabrook Unit 1 and Millstone Unit 3 and as a stockholder of Vermont Yankee Power Corporation and Maine Yankee Atomic Power Company.


PRICE - The price set forth in SECTION 5, below.


PRIME RATE - The prime (or comparable) rate announced from time to time as its prime rate by the Bank of Boston or its successor, which rate may differ from the rate offered to its more substantial and creditworthy customers.


PTF - Facilities categorized as Pool Transmission Facilities under the NEPOOL Agreement.


WHOLESALE NUCLEAR ENTITLEMENT - NEP's generation and delivery to Buyer at any location on the NEPOOL PTF system of electric energy, capacity, and any other associated electric product produced by NEP's Nuclear Interests in the quantities determined in accordance with ARTICLE 4, SECTION 4.2.


WHOLESALE STANDARD OFFER SERVICE AGREEMENTS - The Agreement(s) of even date herewith entered into between the Buyer and certain of NEP's affiliates under which Buyer supplies Wholesale Standard Offer Service, as defined therein, to NEP's affiliates.


ARTICLE 3. TERM AND REGULATORY APPROVAL


3.1 Term


The term of this Agreement shall begin at 12:01 am on the Closing Date and continue until the earlier of: (a) the day that the last Wholesale Standard Offer Service Agreement terminates; (b) the day NEP consummates a permanent sale or other disposition of the last of its Nuclear Interests; or (c) the day the last of NEP's Nuclear Interests has been permanently retired by decision of the owners or board of directors of the unit or by order of the Nuclear Regulatory Commission.


3.2 Filings


NEP will file this Agreement with FERC (and any other regulatory agency as may have jurisdiction over the Agreement) in accordance with the provisions of applicable laws, rules and regulations. Buyer will be responsible for any filing fees for filing this Agreement with FERC (and any other regulatory agency as may have jurisdiction over the Agreement).


ARTICLE 4. SALE AND PURCHASE


4.1 Sale and Purchase


NEP shall sell and deliver to the Delivery Points and Buyer shall purchase the quantity of Wholesale Nuclear Energy determined for each Contract Period in accordance with SECTION 4.2. The price for such sale and purchase shall be as set forth in ARTICLE 5, SECTION 5.1, below.


4.2 Quantities


On or before the Closing Date, with respect to the first Contract Period and, thereafter, at least thirty (30) days prior to the beginning of each Contract Period, Buyer will notify NEP of the quantity of Wholesale Nuclear Entitlement that Buyer desires to purchase from NEP during the next Contract Period (the "Purchased Quantity"). Such quantity shall be expressed in a stated number of kilowatts for each Nuclear Interest during each month of the Contract Period, Buyer having the right to nominate different quantities (including zero) for different months during any Contract Period. Failure by Buyer to nominate a quantity of Wholesale Nuclear Entitlement in a timely fashion as set forth in the first sentence of this section, for any Contract Period, shall be deemed a nomination of zero kilowatts for each Nuclear Interest for each month during the Contract Period. During each month of a Contract Period, NEP shall sell and deliver and Buyer shall purchase a quantity of Wholesale Nuclear Entitlement equal to the lesser of: (a) the quantity nominated by the Buyer with respect to the month and (b)(1) if Buyer has purchased NEP's fossil generating stations, 88.2% of the total of the winter maximum claimed capability ratings of NEP's Nuclear Interests during the month and (2) if Buyer has purchased NEP's hydroelectric generating stations, 9.8% of the total of the winter maximum claimed capability ratings of NEP's Nuclear Interests during the month.


Notwithstanding anything in this Agreement to the contrary, NEP shall not be required to deliver any Wholesale Nuclear Entitlement from any plant that fails to operate for any reason whatsoever, nor shall anything in this Agreement be construed to constrain NEP in any way from exercising its judgment as to when any Nuclear Interests should be temporarily shut down or permanently retired.


ARTICLE 5. PRICE AND BILLING


5.1 Price


(a) For each month during any Contract Period that kW or kWh are sold
and delivered under this Agreement, Buyer shall pay NEP the
NEPOOL Market Price, which shall be the sum of:


(1) the NEPOOL Installed Capability Clearing Price for the month
(expressed in dollars per kilowatt) times the Purchased
Quantity for the month; plus


(2) the NEPOOL Energy Clearing P ...