**EXHIBIT 10.70**

 
| Ohio Valley  Electric Corporation      |   | Original Sheet No. 197 |
|----------------------------------------|--------|------------------------|
| Indiana-Kentucky  Electric Corporation |   |                   |
| 151  Revised Rate Schedule FERC No. 4  |   |                   |

 

MODIFICATION NO. 13

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)

APPALCAHIAN 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,

THE POTOMAC EDISON COMPANY,

SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, and

THE TOLEDO EDISON COMPANY.

 

Dated as of May 24, 2000

 
| 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. 198 |
|------------------------|

 

MODIFICATION NO. 13

 

TO

 

INTER-COMPANY POWER AGREEMENT

 

THIS AGREEMENT dated as of the 24th day of May, 2000, by andamong OHIO VALLEY ELECTRIC CORPORATION (herein called “OVEC” or “Corporation”),ALLEGHENY ENERGY SUPPLY COMPANY, L.L.C. (successor to WEST PENN POWER COMPANY),APPALACHIAN POWER COMPANY, THE CINCINNATI GAS & ELECTRIC COMPANY, COLUMBUSSOUTHERN POWER COMPANY (formerly COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY),THE DAYTON POWER AND LIGHT COMPANY, INDIANA MICHIGAN POWER COMPANY (formerlyINDIANA & MICHIGAN ELECTRIC COMPANY), KENTUCKY UTILITIES COMPANY,LOUISVILLE GAS AND ELECTRIC COMPANY, MONONGAHELA POWER COMPANY, OHIO EDISONCOMPANY, OHIO POWER COMPANY, PENNSYLVANIA POWER COMPANY, THE POTOMAC EDISONCOMPANY, SOUTHERN INDIANA GAS AND ELECTRIC COMPANY and THE TOLEDO EDISONCOMPANY, all of the foregoing, other than OVEC, being herein sometimescollectively referred to as the Sponsoring Companies and individually as

 

aSponsoring Company.

 

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| Original Sheet No. 199 |
|------------------------|

 

WITNESSETH THAT

 

WHEREAS, Corporation and the United States of America have heretoforeentered into Contract No. AT-(40-1)-1530 (redesignated Contract No. E-(40-1)-1530later redesignated Contract No. EY-76-C-05-1530 and later redesignated ContractNo. DE-AC05-76OR01530), dated October 15, 1952, providing for the supply byCorporation of electric utility services to the United States Atomic EnergyCommission (hereinafter called “AEC”) at AEC’s project near Portsmouth, Ohio(hereinafter called the “Project”), which Contract has heretofore been modifiedby Modification No. 1, dated July 23, 1953, Modification No. 2, dated as ofMarch 15, 1964, Modification No. 3, dated as of May 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, dated as of June 23, 1977,Modification No. 9, dated as of July 1, 1978, Modification No. 10, dated as ofAugust 1, 1979, Modification No. 11, dated as of September 1, 1979,Modification No. 12, dated as of August 1, 1981, Modification No. 13, dated asof 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 of 1974, the AEC wasabolished on January 19, 1975 and certain of its functions, including theprocurement of electric utility services for the Project, were transferred toand vested in the Administrator of Energy Research and Development; and

 

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| Original Sheet No. 200 |
|------------------------|

 

WHEREAS, pursuant to the Department of Energy Organization Act, onOctober 1, 1977, all of the functions vested by law in the Administrator ofEnergy Research and Development or the Energy Research and DevelopmentAdministration were transferred to, and vested in, the Secretary of Energy, thestatutory head of the Department of Energy (hereinafter called “DOE”); and

 

WHEREAS, the parties hereto have entered into a contract, herein calledthe “InterCompany Power Agreement,” dated July 10, 1953, governing, among otherthings, (a) the supply by the Sponsoring Companies of Supplemental Power inorder to enable Corporation to fulfill its obligations under the DOE PowerAgreement, and (b) the rights of the Sponsoring Companies to receive SurplusPower (as defined in the Agreement identified in the next clause in thispreamble) as may be available at the Project Generating Stations and theobligations of the Sponsoring Companies to pay therefor; and

 

WHEREAS, the Inter-Company Power Agreement has heretofore been amendedby Modification No. 1, dated as of June 3, 1966, Modification No. 2 dated as ofJanuary 7, 1967, Modification No. 3, dated as of November 15, 1967,Modification No. 4, dated as of November 5, 1975, Modification No. 5, dated asof 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 asof 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, and Modification No. 12, dated as of November 1, 1999 (saidcontract so amended and as

 

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| Original Sheet No. 201 |
|------------------------|

 

modified and amended by this Modification No. 13 being herein andtherein sometimes called the “Agreement”); and

 

WHEREAS, it is the goal of OVEC to assist its Sponsoring Companiesduring the summer of 2000 by making available to them additional power andenergy; and

 

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

 

WHEREAS, it is desired that DOE release a portion of its contractualentitlement to OVEC power and energy in exchange for payments based on thevalue of such power and energy; and

 

WHEREAS, OVEC and the Sponsoring Companies desire to enter into thisModification No. 13 as more particularly hereinafter provided;

 

NOW, THEREFORE, the parties hereto agree with each other as follows:

 

1.                                       Delete subsections 1.0124, 1.0125 and1.0126 of the Inter-Company Power Agreement and substitute therefore thefollowing:

 

1.0124 “DOE Additional Power Release Period” meansthe calendar months from June 1 through September 30, 2000.

 

1.0125 “DOE Additional Power Release” means areduction of the otherwise applicable DOE contract demand pursuant to thisSection 1.0125, for any calendar month during a DOE additional Power ReleasePeriod.

 

1.0126 “Effective Date” means the date on whichCorporation notifies DOE and the Sponsoring Companies that all conditions toeffectiveness, including all required waiting periods and all requiredregulatory acceptances or approvals, of the arrangements for a DOE AdditionalPower Release and

 

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| Original Sheet No. 202 |
|------------------------|

 

reimbursement of Corporation for costs associated with such release,have been satisfied.

 

2.                                     Delete subsection 5.05 of theInter-Company Power Agreement and

 

substitute therefore the following:

 

5.05 *SurplusEnergy.*Corporation shall make available to each Sponsoring CompanySurplus Energy in proportion to said Sponsoring Company’s Surplus PowerReservation, provided that when (a) the DOE’s contractual entitlement to powerfrom OVEC has been reduced and (b) one or more of the Sponsoring Companies haveagreed to assume responsibility for the charges associated with such reductionin exchange for the right to receive Surplus Power made available thereby, theSponsoring Companies which have assumed responsibility for the chargesassociated with such reduction shall have first priority to Surplus Energy upto the amounts of their respective entitlements to Surplus Power made availableby their assumptions of responsibility for such charges. Any remaining SurplusEnergy shall be made available (through successive allotments if necessary) toall Sponsoring Companies in proportion to their respective Power ParticipationRatios. No Sponsoring Company, however, shall be obligated to avail itself ofany Surplus Energy. Each Sponsoring Company availing itself of Surplus Energyshall be entitled to an amount of energy (herein called billing kilowatt-hoursof Surplus Energy) equal to its portion, determined as provided above, of thetotal Surplus Energy after deducting therefrom such Sponsoring Company’sproportionate share, as defined below in this Section 5.05, of all losses whichwould be incurred in transmitting the total of such Surplus Energy from the345-kv busses of the Project Generating Stations to the systems of allSponsoring Companies availing themselves of Surplus Energy. The proportionateshare of all such losses that shall be so deducted from such SponsoringCompany’s portion of Surplus Energy shall be equal to all such lossesmultiplied by the ratio of such portion of Surplus Energy to the total of suchSurplus Energy. Each Sponsoring Company shall have the right, pursuant to thisSection 5.05, to avail itself of Surplus Energy for the purpose of meeting theloads of its own system and/or of supplying energy to other systems inaccordance with agreements, other than this Agreement, to which such SponsoringCompany is a party.

 

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| Original Sheet No. 203 |
|------------------------|

 

3.                                  Delete subsection 6.01 and substitutetherefor the following:

 

CHARGES FOR SURPLUS POWER, ECAR EMERGENCY ENERGY ANDDOE ADDITIONAL POWER RELEASES

 

6.01 *TotalMonthly Charge.*The amount to be paid Corporation each month by theSponsoring Companies for Surplus Power and Surplus Energy supplied under thisAgreement shallconsistof the sum of an energy charge, a demand charge and, if applicable, anemergency power surplus and/or a DOE Additional Power Release Surcharge, alldetermined 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).

 

4.                                     Delete subsection 6.024 and substitutetherefor the following:

 

6.024 Determine for such month the differencebetween the total cost of fuel as described in subsection 6.021 above and thesum of (a) the total energy charge to be billed DOE as described in subsection6.022 above, (b) the energy charge to be billed as DOE Emergency Energy asdescribed in subsection 6.023 above and (c) the total cost of fuel used togenerate ECAR Emergency Energy. For the purposes hereof the difference sodetermined 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 reduction in DOE Contract Demand from 1899 MW to 1299 MWduring June through September 2000 (the “Released Demand”) and by DOEAdditional Power Releases, each Sponsoring Company shall pay Corporation foreach such month an amount obtained by multiplying the ratio of the billingkilowatt-hours of Surplus Energy availed of by such Sponsoring Company duringsuch month to the aggregate of the billing kilowatt-hours of all Surplus Energyavailed of by all Sponsoring Companies during such month times the differencedetermined hereinabove. For all other Surplus Energy, each Sponsoring Companyshall pay Corporation an amount equal to (i) an amount obtained by multiplyingthe billing kilowatt-hours of Surplus Energy (other than Surplus Energyassociated with the Released Demand or with a DOE Additional Power Release)availed of by such Sponsoring Company during

 

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| Original Sheet No. 204 |
|------------------------|

 

such month by the average station heat rate of theProject Generating Stations times the average cost per Btu (determined in auniform manner for all Sponsoring Companies in conformity with any applicablerequirements of Account 703 (Fuel) by said Uniform System of Accounts) of allfuel consumed by said Sponsoring Company in its own generating stations, bothaverages to be computed in respect of the month next preceding that for whichpayment is being made, plus (ii) its Power Participation Ratio of the excess,if any, for such month of the fuel costs of the Corporation allocable to thetotal kilowatt-hours of energy generated at the Project Generating Stations forthe supply of Surplus Energy (other than Surplus Energy associated with theReleased Demand or with a DOE Additional Power Release) over the aggregate ofthe amounts computed with respect to all Sponsoring Companies under (i) above,minus (iii) its Power Participation Ratio of the excess, if any, for such monthof the aggregate of the amounts computed with respect to all SponsoringCompanies under (i) above over the fuel costs of the Corporation allocable tothe total kilowatt-hours of energy generated at the Project Generating Stationsfor the supply of Surplus Energy (other than Surplus Energy associated with theReleased Demand or with a DOE Additional Power Release).

 

5.                                       Delete subsection 6.038 and substitutetherefor the following:

 

6.038 DOE will be responsible for capacity costsrelated to the Released Demand when and to the extent that energy associatedwith the Released Demand is not received by the Sponsoring Companies because ofa curtailment or outage of Corporation’s generating plants or transmissionfacilities (an OVEC Outage). Any transmission loading relief (TLR) which is notcaused by an OVEC Outage will not be considered an OVEC Outage.

 

6.                                       Insert after subsection 6.038, a newsubsection 6.039 as follows:

 

6.039 When, pursuant to the May 24, 2000 lettersupplement (“Supplement”) to the DOE Power Agreement, DOE and Corporation agreeto a DOE Additional Power Release and thereby to make additional Surplus Powerand Surplus Energy available to the sponsoring Companies, the aggregate demandcharge otherwise payable by each Sponsoring Company for Surplus Power shall beadjusted to reflect its agreed share of a

 

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| Original Sheet No. 205 |
|------------------------|

 

DOE Additional Power Release Surcharge, such DOE Additional PowerRelease Surcharges to be equal to amounts per megawatt hour set forth below forthe Insured Sponsoring Companies, as defined herein, and for the otherSponsoring Companies:

 

(a) For Insured Sponsoring Companies, the DOEAdditional Power Release Surcharge shall be their agreed share of the amount ofthe DOE Additional Power Release under the Supplement times $50.76 per megawatthour during the calendar month of June 2000, $118.60 per megawatt hour duringthe calendar months of July and August 2000 and $25.76 per megawatt hour duringthe calendar month of September 2000 times the number of onpeak hours (5 x 16)during each such month notwithstanding the fact that transmission loadingrelief or outages or curtailments of Corporation’s generation or transmissionfacilities may reduce deliveries of Surplus Energy which might otherwise bemade available to the Sponsoring Companies by the DOE Additional Power Release,minus (a) the demand charges which DOE avoids by reason of the monthlyreduction in DOE contract demand required for the DOE Additional Power Releaseto make additional Surplus Power available to the Insured Sponsoring Companiesand (b) charges for energy in amounts equal to such reductions in demand timesthe number of on-peak hours during such month times Corporation’s energy rateper MWH.

 

(b) For Sponsoring Companies other than the InsuredSponsoring Companies, the DOE Additional Power Release Surcharge shall be theiragreed share of the DOE Additional Power Release under the Supplement times$38.58 per magawatt hour during the calendar month of June 2000, $118.60 permegawatt hour during the calendar months of July and August 2000 and $25.76 permegawatt hour during the calendar month of September 2000 times the number ofon-peak hours (5 x 16) during each such month notwithstanding the fact thattransmission loading relief or outages or

 

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| Original Sheet No. 206 |
|------------------------|

 

curtailments of corporation’s generation or transmission facilities mayreduce deliveries of Surplus Energy which might otherwise be made available tothe sponsoring Companies by the DOE Additional Power Release, minus (a) thedemand charges which DOE avoids by reason of the monthly reduction in DOE contractdemand required for the DOE Additional Power Release to make additional SurplusPower available to Sponsoring Companies other than the Insured SponsoringCompanies and (b) charges for energy in amounts equal to such reductions indemand times the number of on-peak hours during such month times Corporation’senergy rate per MWH.

 

The Sponsoring Companies listed below (“InsuredSponsoring Companies”) will be the loss payees of a $18,800,000 insurancepolicy in form and substance satisfactory to the Insured Sponsoring Companiescovering their obligations to Corporation for its payments to DOE for DOEAdditional Power Releases, when Surplus Energy associated with such releases isnot received by the Insured Sponsoring Companies because of curtailments or outagesof Corporation’s generation or transmission facilities other than curtailmentsresulting from transmission loading relief (TLR). TLR caused by curtailments oroutages of Corporation’s generation or transmission facilities shall notconstitute TLR for purposes of the preceding sentence.

 

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| Original Sheet No. 207 |
|------------------------|

 

Insured Sponsoring Companies

* *

*Kentucky Utilities Company Louisville*

*Gas and Electric Company Ohio Edison*

*Company Pennsylvania Power*

*Company The Toledo Edison Compa*ny

 

7.                                  Insert after subsection 10.07 new subsection10.08 as follows:

 

10.08 *DOE Additional Power ReleaseSurcharge.*

Corporation shall render to each Sponsoring Company a statementindicating the DOE Additional Power Release Surcharge due Corporation from suchSponsoring Company pursuant to *Article 6*above.The total of such charges to the Sponsoring Companies shall in the aggregateequal Corporation’s payment obligation to DOE for a DOE Additional PowerRelease. Such Sponsoring Company shall make payment therefore by the date setforth in such statement. In case the computation of the amount due cannot bedetermined at the time, it shall be estimated subject to adjustment when theactual determination can be made, and all payments shall be subject tosubsequent adjustment.

 

8.                                       This Modification No. 13 shall becomeeffective at 12:00 o’clock Midnight on the Effective Date.

 

9. The Inter-Company Power Agreement, as modified by Modification *Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11*and12 and as hereinbefore provided, is hereby in all respects confirmed.

 

10. This Modification No. 13 may be executed in any number of copiesand by the different parties hereto on separate counterparts, each of whichshall be deemed an original but all of which together shall constitute a singleagreement.

 

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| Original Sheet No. 208 |
|------------------------|

 

IN WITNESS WHEREOF, the parties hereto have executed this ModificationNo. 13 as of the day and year first written above.

 
|   | OHIO  VALLEY ELECTRIC CORPORATION          |
|--------|--------------------------------------------|
|   |                                       |
|   |                                       |
|   | By:                                        |   | /s/  David L. Hart |   |
|   |                                       |
|   | ALLEGHENY  ENERGY SUPPLY COMPANY, L.L.C.   |
|   |                                       |
|   |                                       |
|   | By:                                        |   | /s/  Peter J. Skrgic |   |
|   |                                       |
|   | APPALACHIAN  POWER COMPANY                 |
|   |                                       |
|   |                                       |
|   | By:                                        |   | /s/  Henry Fayne |   |
|   |                                       |
|   | THE  CINCINNATI GAS & ELECTRIC COMPANY |
|   |                                       |
|   | By:                                        |   | /s/  John C. Procario |   |
|   |                                       |
|   | COLUMBUS  SOUTHERN POWER COMPANY           |
|   |                                       |
|   | By:                                        |   | /s/  Henry Fayne |   |
|   |                                       |
|   | THE  DAYTON POWER AND LIGHT COMPANY        |
|   |                                       |
|   | By:                                        |   | /s/  H. Ted Santo |   |
|   |                                       |
|   | INDIANA  MICHIGAN POWER COMPANY            |
|   |                                       |
|   | By:                                        |   | /s/  Henry Fayne |   |
|        |                                            |  |  |  |  |  |  |  |

 

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| Original Sheet No. 209 |
|------------------------|

 
|   | KENTUCKY  UTILITIES COMPANY          |
|--------|--------------------------------------|
|   |                                 |
|   | By:                                  |   | /s/  Wayne T. Lucas |   |
|   |                                 |
|   | LOUISVILLE  GAS AND ELECTRIC COMPANY |
|   |                                 |
|   | By:                                  |   | /s/  Chris Hermann |   |
|   |                                 |
|   | MONONGAHELA  POWER COMPANY           |
|   |                                 |
|   | By:                                  |   | /s/  Peter J. Skrgic |   |
|   |                                 |
|   | OHIO  EDISON COMPANY                 |
|   |                                 |
|   | By:                                  |   | /s/  H. Peter Burg |   |
|   |                                 |
|   | OHIO  POWER COMPANY                  |
|   |                                 |
|   | By:                                  |   | /s/ Henry Fayne |   |
|   |                                 |
|   | PENNSYLVANIA  POWER COMPANY          |
|   |                                 |
|   | By:                                  |   | /s/  Arthur R. Garfield |   |
|   |                                 |
|   | THE  POTOMAC EDISON COMPANY          |
|   |                                 |
|   | By:                                  |   | /s/  Peter J. Skrgic |   |
|        |                                      |  |  |  |  |  |

 

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| Original Sheet No. 210 |
|------------------------|

 
|   | SOUTHERN  INDIANA GAS AND ELECTRIC COMPANY |
|--------|--------------------------------------------|
|   |                                       |   |
|   |                                       |   |
|   | By:                                        |   | /s/  J. G. Hurst |   |
|   |                                       |   |   |   |
|   |                                       |   |   |   |
|   | THE  TOLEDO EDISON COMPANY                 |
|   |                                       |   |   |   |
|   | By:                                        |   | /s/  Guy L. Pipitone |   |
|   |                                       |   |   |   |
|   |                                       |   |   |   |
|        |                                            |  |  |  |  |

 

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