EXHIBIT
10.71


 


	
  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

  	
   

  
			



 

















 


	
   

  	
   

  	
  Original Sheet No. 212

  



 


MODIFICATION NO. 14




TO




INTER-COMPANY POWER
AGREEMENT


 


THIS AGREEMENT dated as of the 1st day of
April, 2001, by and among OHIO VALLEY ELECTRIC CORPORATION (herein called
“OVEC” or “Corporation”), ALLEGHENY ENERGY SUPPLY COMPANY, L.L.C. (successor to
WEST PENN POWER COMPANY and THE POTOMAC EDISON COMPANY), APPALACHIAN 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, PENNSYLVANIA POWER COMPANY, SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
and THE TOLEDO EDISON COMPANY, all of the foregoing, other than OVEC, being
herein sometimes collectively referred to as the Sponsoring Companies and
individually as a Sponsoring Company.


 

















 


	
   

  	
   

  	
  Original Sheet No. 213

  



 


WITNESSETH  THAT


 


WHEREAS, Corporation and the United States of America
have heretofore entered into Contract No. AT-(40-1)-1530 (redesignated Contract
No. E-(40-1)-1530, later redesignated Contract No. EY-76-C-05-1530 and later
redesignated Contract No. DE-AC05-76OR01530), dated October 15, 1952, providing
for the supply by Corporation of electric utility services to the United States
Atomic Energy Commission (hereinafter called “AEC”) at AEC’s project near
Portsmouth, Ohio (hereinafter called the “Project”), which Contract has
heretofore been modified by Modification No. 1, dated July 23, 1953,
Modification No. 2, dated as of March 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 of August 1, 1979, Modification No. 11, dated as of September
1, 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 hereinafter
called the “DOE Power Agreement”); and


 


WHEREAS, pursuant to the Energy Reorganization Act of
1974, the AEC was abolished on January 19, 1975 and certain of its functions,
including the procurement of electric utility services for the Project, were
transferred to and vested in the Administrator of Energy Research and
Development; and


 


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  Original Sheet No. 214

  



 


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


 


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


 


WHEREAS, the Inter-Company Power Agreement has
heretofore 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 of
November 15, 1967, Modification No. 4, dated as of November 5, 1975, Modification
No. 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 as
of April 1, 1999, Modification No. 12, dated as of November 1, 1999, and
Modification No. 13, dated as of May 24, 2000 (said contract so amended and as
modified and amended by this Modification No. 14 being herein and therein
sometimes called the “Agreement”); and


 


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  Original Sheet No. 215

  



 


WHEREAS, it is the goal
of OVEC to assist its Sponsoring Companies by making available to them additional
power and energy; and


 


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


 


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


 


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


 


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


 


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


 


NOW, THEREFORE, the parties hereto agree with each
other as follows: 1.            Delete subsection
1.0124 and substitute therefor the following:


 


1.0124 “DOE Settlement
Capacity Surcharge Period” means the calendar months from June 1, 2001 through
April 30, 2003.


 


2.              Delete
subsection 1.0125 and substitute therefor the following:


 


1.0125 “DOE Settlement Energy
Surcharge Period” means the calendar months from September 1, 2001 through
April 30, 2003.


 


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  Original Sheet No. 216 5

  



 


3.            Delete subsection  1.0126 and substitute therefor the
following:


 


1.0126 “Effective Date” means the date on which
Corporation notifies the Sponsoring Companies that all conditions to
effectiveness, including all required waiting periods and all required
regulatory acceptances or approvals, of this Modification No. 14 have been satisfied.


 


4.            Delete
subsection  6.01 and
substitute therefor the following:


 


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


 


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


 


5.             Delete
subsection  6.024 and
substitute therefor the following:


 


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


 


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  Original Sheet No. 217

  



 


kilowatt-hours of Surplus
Energy (other than Surplus Energy associated with the Released Demand) availed
of by such Sponsoring Company during such month by the average station heat
rate of the Project Generating Stations times the average cost per Btu
(determined in a uniform manner for all Sponsoring Companies in conformity with
any applicable requirements of Account 703 (Fuel) of the Uniform System of
Accounts) of all fuel consumed by said Sponsoring Company in its own generating
stations, both averages to be computed in respect of the month next preceding
that for which payment 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 the total kilowatt-hours of energy generated at the Project
Generating Stations for the supply of Surplus Energy (other than Surplus Energy
associated with the Released Demand) over the aggregate of the amounts computed
with respect to all Sponsoring Companies under (i) above, minus (iii) its Power
Participation Ratio of the excess, if any, for such month of the aggregate of
the amounts computed with respect to all Sponsoring Companies under (i) above
over the fuel costs of the Corporation allocable to the total kilowatt-hours of
energy generated at the Project Generating Stations for the supply of Surplus
Energy (other than Surplus Energy associated with the Released Demand).


 


6.            Add
a new subsection 6.025 after subsection 6.024 as follows:


 


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


 


7.             Delete
subsection 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, 2001
through April 30, 2003 by the Sponsoring Companies shall, subject to the
provisions of Sections 6.08 and 6.12 below, be determined by Corporation as
follows:


 


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  Original Sheet No. 218

  



 


8.           Delete
subsection 6.033 and substitute therefor the following:


 


6.033 Determine the demand
charge to be charged to DOE for such month, such demand charge to be an amount
equal to the product of the aggregate of the costs determined in accordance
with subsection 6.031 above and
the average DOE capacity ratio in effect for such month, weighted with respect
to 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 month
shall be reduced by amounts, if any, specified in paragraph 3 of Section 3.04
of the DOE Power Agreement with respect to fines and penalties, which amounts
DOE shall not be obligated to pay to Corporation as a result of the second
proviso 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 Agreement
which DOE shall not be obligated to pay to Corporation as a result of
adjustments mutually agreed upon by Corporation and DOE pursuant to said second
proviso which reads as follows:


 


“provided, further, that DOE shall be relieved of its
obligation to pay to Corporation amounts specified in paragraph 3 of Section
3.04 with respect to fines and penalties with respect to occasions where it is
asserted that Corporation failed to comply with a law or regulation relating to
the emission of pollutants or the discharge of wastes, if, and only if, prior
to any such particular occasion, (i) DOE has requested Corporation to limit the
generation at either or both Project Generating Stations so as not to exceed a
stated number of megawatts for a stated period to comply with applicable laws
or regulations relating to the emission of pollutants or the discharge of
wastes, (ii) DOE has advised Corporation that it will, and does, during such
period, limit its demand at the Project so that the number of megawatts to be
supplied by Corporation at the point of delivery as permanent and supplemental
power shall not exceed the amount determined by multiplying the DOE capacity
ratio by the number of megawatts of permanent and supplemental power to which
DOE would be entitled after giving effect to the limitation provided in clause
(i) above, and (iii) Corporation shall willfully fail so to limit generation at
either or both of the Project Generating Stations so as not to exceed the
number of megawatts stated in such request (however, should Corporation
willfully operate either or both of the Project Generating Stations so that the
number of megawatts generated shall exceed (x) the number of megawatts which
could have been generated had DOE not requested Corporation to limit its
generation as provided in clause (i) above, minus (y) the number of megawatts
which could have been generated had DOE not requested Corporation to limit its
generation as provided in clause (i) above multiplied by the DOE capacity
ratio, plus (z) the number of megawatts


 


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  Original Sheet No. 219

  



 


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


 


9.            Delete
subsections 6.038 and 6.039 in their entirety.


 


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


 


In the event DOE delivers
such further notice to Corporation as provided in said paragraph (b) of Section
6.02 of the DOE Power Agreement and payment of a modified demand charge by DOE
to Corporation as provided in said paragraph (d) of Section 6.02 of the DOE
Power Agreement becomes effective during any portion of the notice period as
defined in said Section 6.02 of the DOE Power Agreement, during such portion of
the notice period determination of the demand charges to be paid by the
Sponsoring Companies to Corporation each month shall continue to be in accord
with the provisions of Section 6.03 of
this Agreement, modified only as such provisions may be affected by said
paragraphs (b) and (d) and consistent with the principle that the aggregate of
(i) the demand charges payable by DOE adjusted pursuant to paragraph 4 of
Section 3.04 of the DOE Power Agreement and (ii) the demand charges payable by
the Sponsoring Companies, each month to Corporation shall be equal to the total
costs incurred for such month by Corporation resulting from its ownership,
operation, and maintenance of the Project Generating Stations and Project
Transmission Facilities determined in accordance with paragraph 3 of Section
3.04 of the DOE Power Agreement and quoted in subsection
6.031 above.


 


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


 


6.081 DOE Settlement Capacity Surcharge. During
the DOE Settlement Capacity Surcharge Period, the following Sponsoring Companies
shall, in addition to all other charges payable to Corporation under this
Agreement, by the Sponsoring Companies, pay monthly to Corporation, DOE
Settlement 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.          Delete
the first paragraph of subsection 6.12 and substitute therefor the
following:


 


6.12 Demand Charge Beginning May 1, 2003. During
the period commencing with May 1, 2003 and for the remainder of the term of
this Agreement, subject to the provisions of Article 11 below, demand charges
payable by the Sponsoring Companies to Corporation shall be determined as
provided below in this Section 6.12.


 


13.                               Delete subsection 10.08 in its
entirety.


 


14.           This
Modification No. 14 shall become effective at 12:00 o’clock Midnight on the
Effective Date.


 


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


 


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


 


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  Original Sheet No. 221

  



 


IN WITNESS WHEREOF, the parties hereto have executed
this 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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