**EXHIBIT10.71**

 
| Ohio Valley Electric Corporation         |   | Original Sheet No. 211 |
|------------------------------------------|--------|------------------------|
| Indiana-Kentucky Electric Corporation    |   |                   |
| 1” Revised Rate Schedule FERC No. 4 |   |                   |

 

MODIFICATION NO. 14

 

TO

 

INTER-COMPANY POWER AGREEMENT

 

DATED JULY 10, 1953

 

AMONG

 

OHIO VALLEY ELECTRIC CORPORATION,

ALLEGHENY ENERGY SUPPLY COMPANY, L.L.C.

(successor to West Penn Power Company

and The Potomac Edison Company)

APPALACHIAN POWER COMPANY (formerly

APPALACHIAN ELECTRIC POWER COMPANY), THE

CINCINNATI GAS & ELECTRIC COMPANY, COLUMBUS

SOUTHERN POWER COMPANY (formerly

COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY),

THE DAYTON POWER AND LIGHT COMPANY, INDIANA

MICHIGAN POWER COMPANY (formerly

INDIANA & MICHIGAN ELECTRIC COMPANY),

KENTUCKY UTILITIES COMPANY, LOUISVILLE

GAS AND ELECTRIC COMPANY MONONGAHELA

POWER COMPANY, OHIO EDISON COMPANY, OHIO

POWER COMPANY (formerly THE OHIO

POWER COMPANY),

PENNSYLVANIA POWER COMPANY,

SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, and

THE TOLEDO EDISON COMPANY.

 

Dated as of April 1, 2001

 
| Issued by: Dave Hart     | Effective: June 1, 2001                        |
|--------------------------|------------------------------------------------|
|                     | Vice President and  Assistant to the President |   |
|                     |                                           |
| Issued on: June 15, 2001 |                                           |
|                          |                                                |  |

 

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|   |   | Original Sheet No. 212 |
|--------|--------|------------------------|

 

MODIFICATION NO. 14

TO

INTER-COMPANY POWERAGREEMENT

 

THIS AGREEMENT dated as of the 1st day ofApril, 2001, by and among OHIO VALLEY ELECTRIC CORPORATION (herein called“OVEC” or “Corporation”), ALLEGHENY ENERGY SUPPLY COMPANY, L.L.C. (successor toWEST PENN POWER COMPANY and THE POTOMAC EDISON COMPANY), APPALACHIAN POWERCOMPANY, THE CINCINNATI GAS & ELECTRIC COMPANY, COLUMBUS SOUTHERN POWERCOMPANY (formerly COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY), THE DAYTONPOWER AND LIGHT COMPANY, INDIANA MICHIGAN POWER COMPANY (formerly INDIANA &MICHIGAN ELECTRIC COMPANY), KENTUCKY UTILITIES COMPANY, LOUISVILLE GAS ANDELECTRIC COMPANY, MONONGAHELA POWER COMPANY, OHIO EDISON COMPANY, OHIO POWERCOMPANY, PENNSYLVANIA POWER COMPANY, SOUTHERN INDIANA GAS AND ELECTRIC COMPANYand THE TOLEDO EDISON COMPANY, all of the foregoing, other than OVEC, beingherein sometimes collectively referred to as the Sponsoring Companies andindividually as a Sponsoring Company.

 

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|   |   | Original Sheet No. 213 |
|--------|--------|------------------------|

 

WITNESSETHTHAT

 

WHEREAS, Corporation and the United States of Americahave heretofore entered into Contract No. AT-(40-1)-1530 (redesignated ContractNo. E-(40-1)-1530, later redesignated Contract No. EY-76-C-05-1530 and laterredesignated Contract No. DE-AC05-76OR01530), dated October 15, 1952, providingfor the supply by Corporation of electric utility services to the United StatesAtomic Energy Commission (hereinafter called “AEC”) at AEC’s project nearPortsmouth, Ohio (hereinafter called the “Project”), which Contract hasheretofore been modified by Modification No. 1, dated July 23, 1953,Modification No. 2, dated as of March 15, 1964, Modification No. 3, dated as ofMay 12, 1966, Modification No. 4, dated as of January 7, 1967, Modification No.5, dated as of August 15, 1967, Modification No. 6, dated as of November 15,1967, Modification No. 7, dated as of November 5, 1975, Modification No. 8, datedas of June 23, 1977, Modification No. 9, dated as of July 1, 1978, ModificationNo. 10, dated as of August 1, 1979, Modification No. 11, dated as of September1, 1979, Modification No. 12, dated as of August 1, 1981, Modification No. 13,dated as of September 1, 1989, Modification No. 14, dated as of January 15,1992, Modification No. 15, dated as of February 1, 1993, and Modification No.16, dated as of January 1, 1998 (said Contract, as so modified, is hereinaftercalled the “DOE Power Agreement”); and

 

WHEREAS, pursuant to the Energy Reorganization Act of1974, the AEC was abolished on January 19, 1975 and certain of its functions,including the procurement of electric utility services for the Project, weretransferred to and vested in the Administrator of Energy Research andDevelopment; and

 

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|   |   | Original Sheet No. 214 |
|--------|--------|------------------------|

 

WHEREAS, pursuant to the Department of EnergyOrganization Act, on October 1, 1977, all of the functions vested by law in theAdministrator of Energy Research and Development or the Energy Research andDevelopment Administration were transferred to, and vested in, the Secretary ofEnergy, the statutory head of the Department of Energy (hereinafter called“DOE”); and

 

WHEREAS, the parties hereto have entered into acontract, herein called the “Inter-Company Power Agreement,” dated July 10,1953, governing, among other things, (a) the supply by the Sponsoring Companiesof Supplemental Power in order to enable Corporation to fulfill its obligationsunder the DOE Power Agreement, and (b) the rights of the Sponsoring Companiesto receive Surplus Power as may be available at the Project Generating Stationsand the obligations of the Sponsoring Companies to pay therefor; and

 

WHEREAS, the Inter-Company Power Agreement hasheretofore been amended by Modification No. 1, dated as of June 3, 1966,Modification No. 2 dated as of January 7, 1967, Modification No. 3, dated as ofNovember 15, 1967, Modification No. 4, dated as of November 5, 1975, ModificationNo. 5, dated as of September 1, 1979, Modification No. 6, dated as of August 1,1981, Modification No. 7, dated as of January 15, 1992, Modification No. 8,dated as of January 19, 1994, Modification No. 9, dated as of August 17, 1995,Modification No. 10, dated as of January 1, 1998, Modification No. 11, dated asof April 1, 1999, Modification No. 12, dated as of November 1, 1999, andModification No. 13, dated as of May 24, 2000 (said contract so amended and asmodified and amended by this Modification No. 14 being herein and thereinsometimes called the “Agreement”); and

 

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|   |   | Original Sheet No. 215 |
|--------|--------|------------------------|

 

WHEREAS, it is the goalof OVEC to assist its Sponsoring Companies by making available to them additionalpower and energy; and

 

WHEREAS, additional power would be made available as aresult of reductions by DOE of its contractual entitlement to power from OVEC;and

 

WHEREAS, it was agreed between DOE and Corporationthat DOE would reduce its contractual entitlement to OVEC power and energy inexchange for Corporation’s agreement to relieve DOE of certain costs associatedwith additional facilities and replacements (“AFR”); and

 

WHEREAS, it was necessary to allocate to theSponsoring Companies shares of the AFR costs which, as a result ofCorporation’s agreement with DOE, will no longer be payable by DOE; and

 

WHEREAS, the Sponsoring Companies also wish to amendthis Agreement to equalize the costs of surplus energy associated with theadditional power being made available by DOE; and

 

WHEREAS, OVEC and the Sponsoring Companies desire toenter into this Modification No. 14 as more particularly hereinafter provided;

 

NOW, THEREFORE, the parties hereto agree with eachother as follows: 1.            Delete subsection1.0124 and substitute therefor the following:

 

1.0124 “DOE SettlementCapacity Surcharge Period” means the calendar months from June 1, 2001 throughApril 30, 2003.

 

2.              Deletesubsection 1.0125 and substitute therefor the following:

 

1.0125 “DOE Settlement EnergySurcharge Period” means the calendar months from September 1, 2001 throughApril 30, 2003.

 

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|   |   | Original Sheet No. 216 5 |
|--------|--------|--------------------------|

 

*3.           *Delete subsection*1.0126*and substitute therefor thefollowing:

 

*1.0126*“Effective Date” means the date on whichCorporation notifies the Sponsoring Companies that all conditions toeffectiveness, including all required waiting periods and all requiredregulatory acceptances or approvals, of this Modification No. 14 have been satisfied.

 

4.            Deletesubsection*6.01*andsubstitute therefor the following:

 

CHARGES FOR SURPLUS POWER AND ECAR EMERGENCY ENERGY,AND DOE SETTLEMENT SURCHARGES

 

*6.01Total Monthly Charge.*The amount to be paid Corporation each month by the Sponsoring Companiesfor Surplus Power and Surplus Energy supplied under this Agreement shallconsist of the sum of an energy charge, a demand charge and, if applicable, anemergency power surcharge, a DOE Settlement Capacity Surcharge and a DOESettlement Energy Surcharge, all determined as set forth in this Article *6.*The amount to be paid to Corporationfor ECAR Emergency Energy supply under this Agreement shall be 98.74 mills perkilowatt hour (plus transmission charges calculated in accordance withapplicable law).

 

5.             Deletesubsection*6.024*andsubstitute therefor the following:

 

*6.024*Determine for such month the differencebetween the total cost of fuel as described in subsection *6.021*above and the sum of (a) the totalenergy charge to be billed DOE as described in subsection *6.022*above, (b) the energy charge to bebilled as DOE Emergency Energy as described in subsection *6.023*above and (c) the total cost of fuelused to generate ECAR Emergency Energy. For the purposes hereof the differenceso determined shall be the fuel cost allocable for such month to the totalkilowatt-hours of energy generated at the Project Generating Stations for thesupply of Surplus Energy. For Surplus Energy made available to the SponsoringCompanies by the Letter Supplement between DOE and Corporation dated March 20,2001 (the “Released Demand”), each Sponsoring Company shall pay Corporation foreach such month an amount obtained by multiplying the ratio of the billingkilowatt-hours of such Surplus Energy availed of by such Sponsoring Companyduring such month to the aggregate of the billing kilowatt-hours of all SurplusEnergy availed of by all Sponsoring Companies during such month times thedifference determined hereinabove. For all other Surplus Energy, eachSponsoring Company shall pay Corporation an amount equal to (i) an amountobtained by multiplying the billing

 

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|   |   | Original Sheet No. 217 |
|--------|--------|------------------------|

 

kilowatt-hours of SurplusEnergy (other than Surplus Energy associated with the Released Demand) availedof by such Sponsoring Company during such month by the average station heatrate of the Project Generating Stations times the average cost per Btu(determined in a uniform manner for all Sponsoring Companies in conformity withany applicable requirements of Account 703 (Fuel) of the Uniform System ofAccounts) of all fuel consumed by said Sponsoring Company in its own generatingstations, both averages to be computed in respect of the month next precedingthat for which payment is being made, plus (ii) its Power Participation Ratioof the excess, if any, for such month of the fuel costs of the Corporationallocable to the total kilowatt-hours of energy generated at the ProjectGenerating Stations for the supply of Surplus Energy (other than Surplus Energyassociated with the Released Demand) over the aggregate of the amounts computedwith respect to all Sponsoring Companies under (i) above, minus (iii) its PowerParticipation Ratio of the excess, if any, for such month of the aggregate ofthe amounts computed with respect to all Sponsoring Companies under (i) aboveover the fuel costs of the Corporation allocable to the total kilowatt-hours ofenergy generated at the Project Generating Stations for the supply of SurplusEnergy (other than Surplus Energy associated with the Released Demand).

 

6.            Adda new subsection 6.025 after subsection 6.024 as follows:

 

*6.025*During the DOE Settlement EnergySurcharge Period, Kentucky Utilities Company and Louisville Gas and ElectricCompany shall, in addition to all other charges payable to Corporation underthis Agreement, pay to Corporation for all on-peak hours a DOE SettlementEnergy Surcharge in the amount of 1.37 mills per kilowatt hour. For purposes ofthis subsection, “on-peak hour” means any hour from the hour ending 0800Eastern Prevailing Time through the hour ending 2300 Eastern Prevailing Time onany Monday, Tuesday, Wednesday, Thursday or Friday, excluding any holidaysspecified by the North American Electric Reliability Council or its successors.

 

7.             Deletesubsection 6.03 and substitute therefor the following:

 

6.03 *Demand Charge from June 1, 2001 through April 30,2003.*The demand charge to be paid each month from June 1, 2001through April 30, 2003 by the Sponsoring Companies shall, subject to theprovisions of Sections 6.08 and 6.12 below, be determined by Corporation asfollows:

 

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|   |   | Original Sheet No. 218 |
|--------|--------|------------------------|

 

8.           Deletesubsection 6.033 and substitute therefor the following:

 

6.033 Determine the demandcharge to be charged to DOE for such month, such demand charge to be an amountequal to the product of the aggregate of the costs determined in accordancewith *subsection*6.031 above andthe average DOE capacity ratio in effect for such month, weighted with respectto the periods of time during which DOE capacity ratios were in effect;provided, however, that the demand charge to be charged to DOE for such monthshall be reduced by amounts, if any, specified in paragraph 3 of Section 3.04of the DOE Power Agreement with respect to fines and penalties, which amountsDOE shall not be obligated to pay to Corporation as a result of the secondproviso contained in Section 7.05 of the DOE Power Agreement and other amounts,if any, specified in paragraph 3 of Section 3.04 of the DOE Power Agreementwhich DOE shall not be obligated to pay to Corporation as a result ofadjustments mutually agreed upon by Corporation and DOE pursuant to said secondproviso which reads as follows:

 

“provided, further, that DOE shall be relieved of itsobligation to pay to Corporation amounts specified in paragraph 3 of Section3.04 with respect to fines and penalties with respect to occasions where it isasserted that Corporation failed to comply with a law or regulation relating tothe emission of pollutants or the discharge of wastes, if, and only if, priorto any such particular occasion, (i) DOE has requested Corporation to limit thegeneration at either or both Project Generating Stations so as not to exceed astated number of megawatts for a stated period to comply with applicable lawsor regulations relating to the emission of pollutants or the discharge ofwastes, (ii) DOE has advised Corporation that it will, and does, during suchperiod, limit its demand at the Project so that the number of megawatts to besupplied by Corporation at the point of delivery as permanent and supplementalpower shall not exceed the amount determined by multiplying the DOE capacityratio by the number of megawatts of permanent and supplemental power to whichDOE would be entitled after giving effect to the limitation provided in clause(i) above, and (iii) Corporation shall willfully fail so to limit generation ateither or both of the Project Generating Stations so as not to exceed thenumber of megawatts stated in such request (however, should Corporationwillfully operate either or both of the Project Generating Stations so that thenumber of megawatts generated shall exceed (x) the number of megawatts whichcould have been generated had DOE not requested Corporation to limit itsgeneration as provided in clause (i) above, minus (y) the number of megawattswhich could have been generated had DOE not requested Corporation to limit itsgeneration as provided in clause (i) above multiplied by the DOE capacityratio, plus (z) the number of megawatts

 

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|   |   | Original Sheet No. 219 |
|--------|--------|------------------------|

 

determined as provided inclause (ii) above plus transmission losses thereon, then the amount to be paidby DOE to Corporation on account of the costs specified in paragraph 3 ofSection 3.04 other than (a) any interest, principal, and/or amortizationcomponent of any purchase price, amortization, rental, or other payment underan installment sale, loan, lease or similar agreement relating to the purchase,lease, or acquisition by Corporation of additional facilities under Section3.06 and replacements under Section 3.07, (b) the cost of any insurance carriedsolely for the benefit of DOE at its request pursuant to paragraph 3(b) ofSection 3.04 and (c) any taxes allocated directly to DOE pursuant to paragraph3(c) of Section 3.04, shall be adjusted to the extent mutually agreedupon);...”

 

9.            Deletesubsections 6.038 and 6.039 in their entirety.

 

10.          Deletethe last paragraph of subsection 6.08 and substitute therefor the following:

 

In the event DOE deliverssuch further notice to Corporation as provided in said paragraph (b) of Section6.02 of the DOE Power Agreement and payment of a modified demand charge by DOEto Corporation as provided in said paragraph (d) of Section 6.02 of the DOEPower Agreement becomes effective during any portion of the notice period asdefined in said Section 6.02 of the DOE Power Agreement, during such portion ofthe notice period determination of the demand charges to be paid by theSponsoring Companies to Corporation each month shall continue to be in accordwith the provisions of *Section 6.03*ofthis Agreement, modified only as such provisions may be affected by saidparagraphs (b) and (d) and consistent with the principle that the aggregate of(i) the demand charges payable by DOE adjusted pursuant to paragraph 4 ofSection 3.04 of the DOE Power Agreement and (ii) the demand charges payable bythe Sponsoring Companies, each month to Corporation shall be equal to the totalcosts incurred for such month by Corporation resulting from its ownership,operation, and maintenance of the Project Generating Stations and ProjectTransmission Facilities determined in accordance with paragraph 3 of Section3.04 of the DOE Power Agreement and quoted in *subsection*6.031 above.

 

11.           Aftersubsection 6.08, add a new subsection 6.081 as follows:

 

6.081 *DOE Settlement Capacity*Surcharge. Duringthe DOE Settlement Capacity Surcharge Period, the following Sponsoring Companiesshall, in addition to all other charges payable to Corporation under thisAgreement, by the Sponsoring Companies, pay monthly to Corporation, DOESettlement Capacity Surcharges in the amounts set forth below:

 

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|   |   | Original Sheet No. 220 |
|--------|--------|------------------------|

 
| Allegheny Energy Supply Company, L.L.C.   |   | $          | 314,093.66 |   |
|-------------------------------------------|--------|------------|------------|--------|
| Appalachian Power Company                 |   | 532,786.51 |       |
| The Cincinnati Gas & Electric Company |   | 314,093.65 |       |
| Columbus Southern Power Company           |   | 151,500.27 |       |
| The Dayton Power and Light Company        |   | 174,003.45 |       |
| Indiana Michigan Power Company            |   | 263,699.21 |       |
| Monongahela Power Company                 |   | 123,292.06 |       |
| Ohio Edison Company                       |   | 510,600.28 |       |
| Ohio Power Company                        |   | 527,398.42 |       |
| Pennsylvania Power Company                |   | 67,192.59  |       |
| Southern Indiana Gas and Electric Company |   | 50,394.44  |       |
| The Toledo Edison Company                 |   | 140,407.15 |       |

 

12.          Deletethe first paragraph of subsection 6.12 and substitute therefor thefollowing:

 

6.12 *Demand Charge Beginning May 1, 2003.*Duringthe period commencing with May 1, 2003 and for the remainder of the term ofthis Agreement, subject to the provisions of Article 11 below, demand chargespayable by the Sponsoring Companies to Corporation shall be determined asprovided below in this Section 6.12.

 

13.                               Delete subsection 10.08 in itsentirety.

 

14.           ThisModification No. 14 shall become effective at 12:00 o’clock Midnight on theEffective Date.

 

15. The Inter-Company Power Agreement, as modified byModifications Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 and ashereinbefore provided, is hereby in all respects confirmed.

 

16. This Modification No. 14 may be executed in anynumber of copies and by the different parties hereto on separate counterparts,each of which shall be deemed an originai but all of which together shallconstitute a single agreement.

 

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|   |   | Original Sheet No. 221 |
|--------|--------|------------------------|

 

IN WITNESS WHEREOF, the parties hereto have executedthis Modification No. 14 as of the day and year first written above.

 
|   | OHIO VALLEY ELECTRIC CORPORATION          |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   | By:                                       | s/ E. L. Draper, Jr. |   |
|   |                                      |
|   |                                      |
|   | ALLEGHENY ENERGY SUPPLY COMPANY, L.L.C.   |
|   |                                      |
|   |                                      |
|   | By:                                       | s / D. C. Benson |   |
|   |                                      |
|   |                                      |
|   | APPALACHIAN POWER COMPANY                 |
|   |                                      |
|   |                                      |
|   | By:                                       | s/ E. L. Draper, Jr. |   |
|   |                                      |
|   |                                      |
|   | THE CINCINNATI GAS & ELECTRIC COMPANY |
|   |                                      |
|   |                                      |
|   | By:                                       | s/ J. C. Procario |   |
|   |                                      |
|   |                                      |
|   | COLUMBUS SOUTHERN POWER COMPANY           |
|   |                                      |
|   |                                      |
|   | By:                                       | s/ E. L. Draper, Jr. |   |
|   |                                      |
|   |                                      |
|   | THE DAYTON POWER AND LIGHT COMPANY        |
|   |                                      |
|   |                                      |
|   | By:                                       | s/ H. T. Santo |   |

 

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|   |   | Original Sheet No. 222 |
|--------|--------|------------------------|

 
|   | INDIANA MICHIGAN POWER COMPANY      |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   | By:                                 | s/ E. L. Draper, Jr. |   |
|   |                                |
|   |                                |
|   | KENTUCKY UTILITIES COMPANY          |
|   |                                |
|   |                                |
|   | By:                                 | s/ P. W. Thompson |   |
|   |                                |
|   |                                |
|   | LOUISVILLE GAS AND ELECTRIC COMPANY |
|   |                                |
|   |                                |
|   | By:                                 | s/ P. W. Thompson |   |
|   |                                |
|   |                                |
|   | MONONGAHELA POWER COMPANY           |
|   |                                |
|   |                                |
|   | By:                                 | s/ D. C. Benson |   |
|   |                                |
|   | OHIO EDISON COMPANY                 |
|   |                                |
|   | OHIO POWER COMPANY By:              | s/ E. L. |   |
|   |                                |
|   |                                |
|   | Draper, Jr.                         |   |
|   |                                |
|   | PENNSYLVANIA                        |
|   |                                |   |
|   | By:                                 | s/ A. R. Garfield |   |
|        |                                     |  |  |  |  |  |

 

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|   |   | Original Sheet No. 223 |
|--------|--------|------------------------|

 
|   | SOUTHERN INDIANA GAS AND ELECTRIC  COMPANY |
|--------|--------------------------------------------|
|   |                                       |
|   |                                       |
|   | By:                                        | s/ R. G. Jochum |   |
|   |                                       |
|   |                                       |
|   | THE TOLEDO EDISON COMPANY                  |
|   |                                       |
|   |                                       |
|   | By:                                        | s/ G. L. Pipitone |   |

 

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