Exhibit 10.1

 

THIRD AMENDMENT TO PLANT HAL WANSLEY OPERATING AGREEMENT

 

THIS THIRD AMENDMENT to Plant Hal Wansley Operating Agreement, dated as of the
15th day of April, 2018 (the “Effective Date”), by and among Georgia Power
Company (“GPC”), Oglethorpe Power Corporation (An Electric Membership
Corporation) f/k/a Oglethorpe Power Corporation (An Electric Membership
Generation and Transmission Corporation) f/k/a Oglethorpe Electric Membership
Corporation (“OPC”), and City of Dalton, an incorporated municipality in the
States of Georgia acting by and through its Board of Water, Light and Sinking
Fund Commissioners (“Dalton”), each individually, a “Participant,” and together,
the “Participants.”

 

WITNESSETH

 

WHEREAS, the Participants have previously entered into that certain Plant Hal
Wansley Operating Agreement by and between GPC and each of the Participants
dated as of March 26, 1976 (GPC and OPC) and as of April 19, 1977 (GPC and
Dalton), as amended by that certain Amendment to Plant Hal Wansley Operating
Agreement by and among all of the Participants and the Municipal Electric
Authority of Georgia (A Public Corporation and Instrumentality of The State of
Georgia) (“MEAG”)  dated as of January 15, 1995, and as further amended by that
certain Second Amendment to Plant Hal Wansley Operating Agreement by and among
all of the Participants and MEAG dated as of October 31, 2016 (as amended,
collectively, the “Operating Agreements” and individually the “OPC Operating
Agreement” and the “Dalton Operating Agreement”) providing, among other things,
for the management, control, maintenance, and operation of Plant Hal Wansley;

 

WHEREAS, the Participants mutually desire to amend certain provisions of each of
their respective Operating Agreements as more particularly set forth in this
Third Amendment;

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Participants agree to amend each of their
respective Operating Agreements as follows:

 

1.              Definitions.  All capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Operating Agreements.

 

2.              Prudent Utility Practice.  Section 1(b), AUTHORITY FOR OPERATION
AND MANAGEMENT, of each of the Operating Agreements is hereby amended by
inserting “and agrees that it shall discharge its responsibilities as agent in
accordance with Prudent Utility Practice” after the words “GPC accepts such
appointment” and moving the period to the end of the sentence in the last line
of the second paragraph of the section.

 

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3.              Operation.  Section 1(d), OPERATION, of each of the Operating
Agreements is hereby amended by deleting the words “good utility practices” in
the last paragraph of the section and inserting the words “Prudent Utility
Practice” in lieu thereof.

 

4.              Budgets, Schedules, Plans, and Notices to be Provided. 
Section 1(h)(i), BUDGETS, SCHEDULES AND PLANS TO BE PROVIDED BY GPC TO THE
PARTICIPANTS, of each of the Operating Agreements is hereby amended by expanding
the title to include “NOTICES” so that the amended title is BUDGETS, SCHEDULES,
PLANS AND NOTICES TO BE PROVIDED BY GPC TO THE PARTICIPANTS.

 

5.              Capital Budget — Final Budget.  Section 1(h)(i), BUDGETS,
SCHEDULES, PLANS AND NOTICES TO BE PROVIDED BY GPC TO THE PARTICIPANTS, and,
APPENDIX A — CAPITAL BUDGET, of each of the Operating Agreements is hereby
amended by inserting the following at the end of the first paragraph of the
section after the words “the remaining four years by annual total.”:

 

By thirty (30) days after GPC approves each draft budget estimate of capital
costs as a final budget estimate, GPC shall provide a copy of the final budget
to each Participant.

 

6.              Capital Budget — Budget Update.  Section 1(h)(i), BUDGETS,
SCHEDULES, PLANS AND NOTICES TO BE PROVIDED BY GPC TO THE PARTICIPANTS, of each
of the Operating Agreements is hereby amended by:

 

a.              deleting all occurrences of the phrase “five-year budget” and
replacing such occurrences with the phrase “ten-year budget”;

 

b.              deleting the word “four” in the phrase “the remaining four years
by annual total” in the last sentence of the first paragraph;

 

c.               deleting the first sentence of the second paragraph beginning
with “GPC may from time to time” and ending with “such proposed changes to all
Participants” in its entirety and inserting the following in lieu thereof:

 

GPC shall propose and provide to each Participant updates and changes in the
capital budget estimates and revised capital budget estimates as necessary to
reflect any additions, deletions, substitutions, modifications, or changes in
construction, purchasing or payment schedules, plans, specifications or costs
related to completions, renewals, additions, replacements, modifications and
disposal in connection with the Units no less frequently than one (1) time per
calendar quarter at the Operating Committee Meeting.  GPC shall also provide to
each Participant a monthly report on the total amount of variance between
capital budget estimates and actual expenditures.

 

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d.              inserting the following at the end of the third paragraph of the
section after the words “expected amounts that the Participant will be billed”:

 

Each capital budget estimate and revised capital budget estimate shall include
project evaluation documentation prepared by GPC for any individual project with
a total cost greater than $25,000,000.00 and any budget items intended to
provide for multiple miscellaneous projects with an aggregate total cost greater
than $25,000,000.00.  The project evaluation documentation provided by GPC shall
include a description of the project, statement of project purpose, basic
rationale for the project, a cost/benefit analysis prepared by GPC, estimated
project cost, annual cost schedule, and estimated in service date; and

 

7.              Operating Budget.  Section 1(h)(ii), BUDGETS, SCHEDULES, PLANS
AND NOTICES TO BE PROVIDED BY GPC TO THE PARTICIPANTS, and, APPENDIX A —
OPERATING BUDGET, of each of the Operating Agreements is hereby amended by:

 

a.        inserting the following at the end of the first paragraph of the
section after the words “shall be based on information reasonably available.”:

 

By thirty (30) days after GPC approves each draft budget estimate of Operating
Costs as a final budget estimate, GPC shall provide a copy of the final budget
to each Participant.

 

b.        Inserting the following at the end of the third paragraph of the
section after the words “each Participant’s reasonable review thereof”:

 

GPC shall also provide to each Participant a monthly report on the total amount
of variance between operating budget estimates and actual expenditures.

 

8.              Testing Schedules.  Section 1(h), Budgets, Schedules Plans AND
NOTICES to be provided by GPC to the Participants, of each of the Operating
Agreements is hereby amended by inserting the following new subsection (v) at
the end of the section:

 

(v)  Testing Schedules.   By January 15th of each year, GPC shall provide to
each Participant its anticipated testing schedule for the year.  Promptly and
generally on the schedule per which GPC provides internal notice of the same,
GPC shall provide notice to each Participant of any changes to the updated
testing schedule. Whenever feasible, the notices of testing schedule shall
indicate which Units are schedules to run, load profile, and the scheduled
duration of the test(s).

 

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9.              Notice of Violations, Self-Reports, or Claims.  Section 1(h),
BUDGETS, SCHEDULES PLANS AND NOTICES TO BE PROVIDED BY GPC TO THE PARTICIPANTS,
of each of the Operating Agreements is hereby amended by inserting the following
new subsection (vi) at the end of the section:

 

(vi)   Notices. Promptly after GPC receives notice of or knows of same
pertaining to the operation of Plant Wansley  and, excepting any circumstance
where immediate notice or disclosure to a governmental authority is necessary,
prior to GPC providing notice or disclosure to any governmental authority, GPC
shall at a minimum provide each Participant: (i) a copy of any notice, demand,
complaint, or claim received by GPC from any governmental authority or third
party, (ii) notice of any self-reports to be made, (iii) notice of  known
violations of applicable laws, and (iv) notice of any agency investigations, all
in order to facilitate timely awareness and receipt of pertinent information
concerning the same by the Operating Committee and each Participants’ legal
counsel and senior management.

 

10.       Term.  Section 5(b), TERM, of each of the Operating Agreements is
hereby amended by deleting the first sentence of the section in its entirety and
inserting the following in lieu thereof:

 

This Agreement shall become effective upon the Closing provided for in Section 2
of the Ownership Agreement and shall remain in effect with respect to Wansley
Unit No. 1 and Wansley Unit No. 2, until April 15, 2041.  GPC shall meet and
confer with the Participants with respect to analysis on and decisions to
establish projected or firm dates to cease Commercial Operation for either
Wansley Unit No. 1 or Wansley Unit No. 2, including, prior to filing, any
projected or firm dates which may be filed with any regulatory agency.

 

11.       Certain Definitions.  Section 9, CERTAIN DEFINITIONS, of each of the
Operating Agreements is hereby amended by:

 

a.              Replacing the definition of “COMMON PROCUREMENT” in subsection
(g) thereof with the following definition:

 

(g) COMMON PROCUREMENT.  “Common Procurement” shall mean, at any time, the
procurement of coal by GPC, on its own behalf and as agent for the other
Participants in the Common Coal Stockpile and each of the Separate Coal
Stockpile Participants which is at the time a Common Procurement Participant.

 

b.              inserting the following subsection (cc) at the end of the
section:

 

(cc) PRUDENT UTILITY PRACTICE.  “Prudent Utility Practice” shall mean at a
particular time any of the practices, methods and acts engaged in or approved by
a

 

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significant portion of the electric utility industry prior to such time, or any
of the practices, methods and acts which, in the exercise of reasonable judgment
in light of the facts known at the time the decision was made, could have been
expected to accomplish the desired results at the lowest reasonable cost
consistent with good business practices, reliability, safety and expedition. 
“Prudent Utility Practice” is not intended to be limited to the optimum
practice, method or act to the exclusion of all others, but rather to be a
spectrum of possible practices, methods or acts having due regarding for, among
other things, manufacturers’ warranties, the requirements of governmental
agencies of competent jurisdiction and the requirements of the Ownership
Agreements and Operating Agreements.

 

12.       Plant Wansley Operating Committee.

 

a.              Section 10(a), ESTABLISHMENT OF PLANT WANSLEY OPERATING
COMMITTEE, of each of the Operating Agreements is hereby amended by:

 

i.                  inserting the words “and which shall meet no less frequently
than one (1) time per calendar quarter” before the period at the end of the
first sentence; and

 

ii.               inserting the following at the end of the section, “GPC shall
provide and update the information that is to be reviewed by the Plant Wansley
Operating Committee as set forth in Section 10(b)(v).

 

b.              Section 10(b), RESPONSIBILITIES OF THE PLANT WANSLEY OPERATING
COMMITTEE, of each of the Operating Agreements is hereby amended by:

 

i.                  inserting the words “, periodic review, and updating as
needed or desired by the Plant Wansley Operating Committee” after the words “The
development of” in the first line of subsections (i), (ii), and (iii); and

 

ii.               renumbering subsection (iv) to subsection (vi) and inserting
the following before the renumbered subsection (vi):

 

(iv)                        To review operating procedures for the common
facilities of Plant Wansley and the adjacent combined cycle facilities prepared
by GPC and submitted to the Plant Wansley Operating Committee.

 

(v)                           To review, comment, and submit questions to GPC
for GPC to respond to on Plant Wansley general update and status reports
prepared by GPC and submitted to the Plant Wansley Operating Committee.  By way
of example, the general update and status reports shall include information at
an operations level of detail on performance of each of the Units; major
projects, performance, replacement, and maintenance of key equipment; current
and anticipated outages; accidents; injuries; property damage or loss; budget,
claims, and the like.

 

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13.       Ratification.  The Participants ratify and affirm each of their
Operating Agreements as amended by this Third Amendment. Except as expressly set
forth in this Third Amendment, all other provisions of the Operating Agreements
remain unchanged and in full force and effect.  This Third Amendment may be
executed in any number of counterparts and by original, electronic, or facsimile
signatures, each of which shall be deemed an original, but all of which together
shall constitute one instrument.

 

[Remainder of Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the duly authorized representatives of the undersigned
Participants have executed this THIRD AMENDMENT under seal as of the Effective
Date.

 

Signed, sealed and delivered in the presence of:

 

GEORGIA POWER COMPANY

 

 

 

/s/ Lisa Coble

 

By:

/s/ Ted J. McCullough

Witness

 

Name:

Ted J. McCullough

 

 

Title:

SVP & Senior Production Officer

/a/ Cheryl K. Smiley

 

 

Notary Public

 

Attest:

/s/ Meredith Lackey

My Commission expires: February 27, 2019

 

Its:

SVP, General Counsel & Corporate Secretary

 

 

(CORPORATE SEAL)

 

 

 

 

 

 

Signed, sealed and delivered in the presence of:

 

OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION)

 

 

 

/s/ Lori Holt

 

By:

/s/ Michael L. Smith

Witness

 

Name:

Michael L. Smith

 

 

Title:

President and Chief Executive Officer

/s/ Jean Wheeler

 

 

 

Notary Public

 

Attest:

/s/ Kimberly D. Adams

My Commission expires: May 7, 2020

 

Its:

Secretary

 

 

(CORPORATE SEAL)

 

 

 

 

 

 

Signed, sealed and delivered in the presence of:

 

CITY OF DALTON

 

 

acting by and through its Board of Water, Light and Sinking Fund Commissioners
(d/b/a Dalton Utilities)

 

 

 

 

 

By:

/s/ Tom Bundros

/s/ Witness

 

Name:

Tom Bundros

Witness

 

Title:

Chief Executive Officer

 

 

 

/s/ Megan Hobbs

 

Attest:

/s/ John Thomas

Notary Public

 

Its:

Chief Energy Services Officer

My Commission expires: March 21, 2019

 

(CORPORATE SEAL)

 

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