Unassociated Document


    

      FirstEnergy
        Solutions Corp.                                                     EXHIBIT
        10.10

      FERC
        Electric
        Tariff, Original Volume No.1

      Service
        Agreement
        No.5

      


      


      ELECTRIC
        POWER SUPPLY AGREEMENT

       

      Between
        FirstEnergy Solutions Corp., Seller

       

      And
        Pennsylvania Power Company, Buyer

       

      This
        Electric Power Supply Agreement (“Agreement”)
        dated October 31,
        2005, is made by and between FirstEnergy Solutions Corp., (“SOLUTIONS” or
“Seller”), and Pennsylvania Power Company (“Penn Power” or “Buyer”). SOLUTIONS
        and Penn Power may be identified collectively as “Parties” or individually as a
“Party.” This Agreement is entered into in connection with Pennsylvania electric
        restructuring legislation and is designed to provide Penn Power’s Power Supply
        Requirements:

       

      WHEREAS,
        Seller has
        purchased: all of the electric output of nuclear generating units of its
        affiliate, FirstEnergy Nuclear Generation Corp. (including the electric output
        of nuclear generating units owned by others that is purchased by FirstEnergy
        Nuclear Generation Corp.); all of the electric output of fossil and pumped
        storage generating facilities owned or operated by its subsidiary, FirstEnergy
        Generation Corp.; and power from unaffiliated companies (collectively referred
        to as “Generating Resources”); and

       

      WHEREAS,
        Seller is engaged
inter
        alia,
        in the business
        of generating, purchasing, and selling electric power at wholesale and retail;
        and

       

      WHEREAS,
        Buyer is
        responsible for obtaining and delivering sufficient Capacity, Energy, and
        related services necessary to meet its Provider of Last Resort obligations
        under
        Pennsylvania law, as well as other power supply obligations incurred by law,
        contract or tariff;

       

      WHEREAS,
        Buyer desires to
        obtain from Seller sufficient Power to satisfy its Power Supply Requirements
        to
        Pennsylvania customers under the rates, terms and conditions set forth herein;
        

       

      It
        is agreed as follows:

       

      


      
        
          	I.	
                    
                    TERM

                


        

      

       

      
        The
          sale and
          purchase of electric power pursuant to this Agreement shall begin on January
          1,
          2006, or such later effective date authorized by the Federal Energy Regulatory
          Commission, and shall remain in effect through December 31, 2006.

         

      

      Issued
        By:   Richard
        H.
        Marsh, Senior Vice President                                 Effective
        Date: January 1, 2006

      Issue
        Date: October
        31,
        2005 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	II.	
                    SALE
                  AND PURCHASE OF CAPACITY AND ENERGY


              


      

       

        
        
          	
                	    A.	
                  Seller
                    shall
                    make available to Buyer, Capacity and Energy sufficient to satisfy
                    Buyer’s
                    Power Supply Requirements. Seller shall make such firm Capacity
                    and Energy
                    available at the Delivery Points. Capacity and Energy supplied
                    shall be
                    sixty-hertz, three phase alternating current. The Power Supply
                    Requirements will be provided in accordance with Good Utility
                    Practice,
                    and where applicable, the provisions of the OATT of the Transmission
                    Provider or any superseding tariff. The Capacity and Energy provided
                    by
                    Seller will comply with all requirements for Network Resources
                    under the
                    Transmission Provider OATT and Buyer’s Network Transmission Agreements
                    with Transmission Provider. 

                


        

      

       

      
        	
              	    B.	
                Buyer
                  will
                  purchase its full Power Supply Requirements from Seller during
                  the term of
                  this Agreement. Buyer will receive and pay for its Power Supply
                  Requirements in accordance with Section IV of this Agreement. Buyer
                  will
                  be responsible for obtaining all Network Transmission Service,
                  Ancillary
                  Services, congestion charges, marginal transmission losses, and
                  such other
                  services and administrative charges as are required and imposed
                  by the
                  Transmission Provider OATT on the Buyer as a Load Serving Entity
                  for the
                  delivery of Capacity and Energy at and from the Delivery Points
                  under this
                  Agreement. 

              


      

       

      
        	
              	    C.	
                Seller
                  may
                  purchase power from third parties in the Spot Market as necessary
                  to
                  satisfy its obligations under this Agreement.


              


      

       

      
        	
              	    D.	
                If
                  Seller’s
                  credit is adversely impacted during the term of this Agreement,
                  Buyer
                  agrees to allow Seller to acquire purchased power as agent for
                  the Buyer
                  where reasonably necessary to minimize supply costs under this
                  Agreement.
                  Buyer will pay all of the costs associated with acquiring this
                  Power, but
                  Seller will not charge Buyer any broker fee for performing this
                  service.
                  

              


      

       

      
        	III.	
                    SCHEDULING
                  AND
                  SYSTEM PLANNING

              


      

       

      
        	
              	    A.	
                On
                  or before
                  November 1, 2005, Buyer will inform Seller of its initial annual
                  Capacity
                  and Energy forecast for calendar year 2006. Such initial annual
                  forecast
                  shall include Buyer’s Power Supply Requirements for the year, by month.
                  Based on Buyer’s initial annual forecast, as well as other information
                  that may be communicated between Buyer and Seller as necessary
                  and
                  appropriate for system planning, Seller shall procure the necessary
                  Generation Resources and develop forecasts of Buyer’s Power Supply
                  Requirements on a weekly, daily and hourly basis, and shall periodically
                  update such forecasts to reflect current
                  circumstances.

              


      

       

      
        	
              	    B.	
                Buyer
                  shall
                  update its initial annual forecast of Capacity and Energy for any
                  change
                  or expected change in its Power Supply Requirements that would
                  materially
                  affect the forecast provided to Solutions. Buyer shall provide
                  the updated
                  forecast to Solutions for any full month(s) remaining in the calendar
                  year
                  within thirty days of becoming aware of the change or expected
                  change in
                  its Power Supply Requirements. 

              


      

       

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      
        	
              	    C.	
                Buyer
                  is
                  responsible for scheduling delivery of its Power Supply Requirements
                  with
                  Transmission Provider in accordance with the OATT. Buyer will
                  simultaneously furnish its schedule to Seller and Transmission
                  Provider.
                  Seller will supply Capacity and Energy to Buyer in accordance with
                  the
                  schedule provided to Transmission Provider. Buyer and Seller acknowledge
                  that Buyer’s Power Supply Requirements may vary from the schedule provided
                  to Transmission Provider. Buyer agrees that it is responsible for
                  payment
                  of any Transmission Provider charges incurred when actual Power
                  Supply
                  Requirements differ from the schedule provided. Seller shall be
                  responsible for payment of any Transmission Provider charges incurred
                  by
                  its failure to deliver the scheduled amount of Capacity and Energy.
                  

              


      

       

      
        	
              	    D.	
                Load
                  Management. To minimize supply risk to the Seller hereunder, Buyer
                  agrees
                  to enforce its applicable Retail Tariffs, Special Contracts, and
                  federal
                  tariffs and contracts, including, but not limited to, those tariffs
                  or
                  contracts that provide for curtailment or interruption of electric
                  service, real time pricing, or other load management devices. At
                  Buyer’s
                  request Seller will provide estimates of the Spot Market price
                  of Energy
                  in sufficient detail for Buyer to implement and administer its
                  tariffs and
                  contracts with retail customers. Any such data furnished to Buyer
                  shall be
                  treated as Confidential
                  Information.

              


      

       

      
        	 	
                 E.

              	
                Seller
                  agrees
                  to operate its Generating Resources in accordance with Good Utility
                  Practice, including, but not limited to the efficient and economic
                  dispatch of the Generating Resources. Seller will self-schedule
                  sufficient
                  Generating Resources to supply Buyer’s Power Supply Requirements in
                  accordance with the Buyer’s delivery schedule and Transmission Provider
                  OATT.

              


      

       

      
        	 	
                 F.

              	
                Buyer
                  and
                  Seller agree to cooperate in providing any information required
                  by the
                  Transmission Provider, NERC, regional reliability council, Electric
                  Reliability Organization, Regional Entity or Government Authority
                  related
                  to service provided under this Agreement.


              


      

       

      
        	IV.	
                   PRICE

              


      

       

      Seller
        shall
        charge, and Buyer shall pay the following charges for Buyer’s Power Supply
        Requirements. The method for calculating this amount is set forth in Exhibit
        B.

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
              	    A.	
                Capacity
                  and Energy Charges

              


      

       

      Buyer
        shall pay
        Seller an amount up to, but not exceeding, the amount of money that Buyer
        bills
        its retail customers who elect to receive generation service from Buyer as
        generation service charges, including the retail charge for losses billed
        to
        Buyer’s retail customers, under the Buyer’s Retail Tariffs and Special Contracts
        as approved by the Pennsylvania Public Utility Commission. This amount will
        be
        reduced for any gross receipts taxes contained in the generation service
        portion
        of Buyer’s Retail Tariffs and Special Contracts. As soon as practicable after
        the end of the month, Buyer shall provide Seller load data, metered sales,
        and
        rates used for billing in sufficient detail for Seller to determine after
        the
        fact, the revenues due Seller for Buyer’s Power Supply Requirements and
        delivered to the applicable retail customer classes during a billing period.
        Buyer and Seller will abide by all applicable Code of Conduct provisions
        in
        exchanging this data, and such data will be considered Confidential Information
        under Section VII.C of this Agreement.

       

      
        	
              	    B.	
                Power
                  Supply for Buyer’s Existing Wholesale Contracts
                  

              


      

       

      During
        the term of
        this Agreement, Seller will supply sufficient Capacity and Energy to fulfill
        Power supply obligations under Buyer’s wholesale contracts in effect on January
        1, 2006. Buyer is responsible for scheduling and delivery of Power under
        such
        wholesale contracts, as well as payment of any charges imposed by the
        Transmission Provider for delivery of Power under the wholesale contracts.
        Buyer
        will pay Seller the amount billed by Buyer under its wholesale contracts
        for
        Power supply, including, but not limited to, charges for demand Capacity,
        Energy, or reserves. As soon as practicable after the end of the month, Buyer
        shall provide Seller load data, metered sales, and rates used for billing
        wholesale customers in sufficient detail for Seller to determine after the
        fact,
        the revenues due Seller for Buyer’s existing wholesale contracts.

       

      
        	
              	    C.	
                Billing
                  and Payment

              


      

       

      Unless
        otherwise
        specifically agreed upon by the Parties, the calendar month shall be the
        standard period for all billings and payments under this Agreement. As soon
        as
        practicable after the end of each month, the Seller will render an invoice
        to
        Buyer for the amounts due for Power Supply Requirements for the preceding
        month.
        Payment shall be due and payable within ten days of receipt of the invoice
        or,
        if such day is not a Business Day, then on the next Business Day. Buyer will
        make payments by electronic funds transfer or by other mutually agreeable
        method(s) to the account designated by Seller. Any amounts not paid by the
        due
        date will be deemed delinquent and will accrue interest at the Interest Rate
        until the date of payment in full.

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      
        	
              	    D.	
                Records

              


      

       

      Each
        Party shall
        keep complete and accurate records of its operations under this Agreement
        and
        shall maintain such data as may be necessary to determine the reasonableness
        and
        accuracy of all relevant data, estimates, payments, or invoices submitted
        by or
        to it hereunder. All records regarding this Agreement shall be maintained
        for a
        period of three years from the date of the invoice or payment, or such longer
        period as may be required by law.

       

      
        	
              	    E.	
                Audit
                  and
                  Adjustment Rights

              


      

       

      Buyer
        shall have
        the right, at its own expense and during normal business hours, to audit
        the
        accounts and records of Seller that reasonably relate to the provision of
        service under this Agreement. If the audit reveals an inaccuracy in an invoice,
        the necessary adjustment in such invoice and the payments therefor will be
        promptly made. No adjustment will be made for any invoice or payment made
        more
        than one year from rendition thereof. This provision shall survive the
        termination of this Agreement for a period of one year from the date of
        termination for the purpose of such invoice and payment objections. To the
        extent that audited information includes Confidential Information, the Buyer
        shall keep all such information confidential under Section VII.C.

       

      
        	
              	    F.	
                Section
                  205 Rights

              


      

       

      The
        rates for
        service specified herein shall remain in effect for the Term of this Agreement,
        and shall not be subject to change through application to the FERC pursuant
        to
        the provisions of Section 205 of the Federal Power Act absent the written
        agreement of all Parties hereto. 

       

      
        	V.	
                    METERING

              


      

       

      Generation
        metering
        shall be installed, operated and maintained in accordance with the applicable
        interconnection agreements between the generator, Transmission Owner and
        the
        Transmission Provider. Metering between balancing areas shall be handled
        in
        accordance with the practices established b y the Transmission Provider.
        Retail
        metering shall be provided in accordance with applicable state law. Nothing
        in
        this Agreement requires Seller or Buyer to install new metering
        facilities.

       

      
        	VI.	
                    NOTICES

              


      

       

      All
        notices,
        requests, statements or payments shall be made as specified below. Notices
        required to be in writing shall be delivered by letter, facsimile or other
        documentary form. Notice by facsimile or hand delivery shall be deemed to
        have
        been received by the close of the Business Day on which it was transmitted
        or
        hand delivered (unless transmitted or hand delivered after close in which
        case
        it shall be deemed received at the close of the next Business day). Notice
        by
        overnight mail or courier shall be deemed to have been received two Business
        Days after it was sent. A Party may change its addresses by providing notice
        of
        same in accordance herewith.

       

      
        
          
             

             

            
            

            Effective
              Date:  January 1, 2006

          

          
            5

            
              

            

          

          
            
            

          

        

      

       

      NOTICES
        & CORRESPONDENCE:

       

      

        
          	
                  To
                    Seller:

                	
                  FirstEnergy
                    Solutions Corp.

                	
                  To
                    Buyer:

                	
                  FirstEnergy
                    Service Company 

                	 
	 	
                  Director,
                    FES
                    Back Office

                	 	
                  Vice
                    President

                	 
	 	
                  395
                    Ghent
                    Road

                	 	
                  76
                    South Main
                    Street

                	 
	 	
                  Akron,
                    Ohio
                    44333

                	 	
                  Akron,
                    Ohio
                    44308

                	 


        

      

       

      INVOICES
        & PAYMENTS:

       

      

        
          	
                  To
                    Seller:

                	
                  FirstEnergy
                    Solutions Corp.

                	
                  To
                    Buyer:

                	
                  FirstEnergy
                    Service Company 

                	 
	 	
                  Director,
                    FES
                    Back Office

                	 	
                  Vice
                    President

                	 
	 	
                  395
                    Ghent
                    Road

                	 	
                  76
                    South Main
                    Street

                	 
	 	
                  Akron,
                    Ohio
                    44333

                	 	
                  Akron,
                    Ohio
                    44308

                	 


        

      

       

      SCHEDULING:

       

      
        
          	
                  To
                    Seller:

                	
                  FirstEnergy
                    Solutions Corp.

                	
                  To
                    Buyer:

                	
                  FirstEnergy
                    Service Company 

                	 
	 	
                  Director,
                    FES
                    Back Office

                	 	
                  Vice
                    President

                	 
	 	
                  395
                    Ghent
                    Road

                	 	
                  76
                    South Main
                    Street

                	 
	 	
                  Akron,
                    Ohio
                    44333

                	 	
                  Akron,
                    Ohio
                    44308

                	 


        

      

      


      
        	VII.	 	
                MISCELLANEOUS

              


      

       

      A.     Performance
        Excused

       

      If
        either Party is rendered unable by an event of Force Majeure to carry out,
        in
        whole or part, its obligations hereunder, then, during the pendency of such
        Force Majeure, but for no longer period, the Party affected by the event
        shall
        be relieved of its obligations insofar as they are affected by Force Majeure.
        The Party affected by an event of Force Majeure shall provide the other Party
        with written notice setting forth the full details thereof as soon as
        practicable after the occurrence of such event and shall take all reasonable
        measures to mitigate or minimize the effects of such event of Force Majeure.
        Nothing in this Section requires Seller to deliver, or Buyer to receive,
        Power
        at Delivery Points other than those Delivery Points designated under this
        Agreement, or relieves Buyer of its obligation to make payment under Section
        IV
        of this Agreement.

       

      
        
          
            
            

            Effective
              Date:  January 1, 2006

          

          
            6

            
              

            

          

          
            
            

          

        

      

       

      Force
        Majeure shall
        be defined as any cause beyond the reasonable control of, and not the result
        of
        negligence or the lack of diligence of, the Party claiming Force Majeure
        or its
        contractors or suppliers. It includes, without limitation, earthquake, storm,
        lightning, flood, backwater caused by flood, fire, explosion, act of the
        public
        enemy, epidemic, accident, failure of facilities, equipment or fuel supply,
        acts
        of God, war, riot, civil disturbances, strike, labor disturbances, labor
        or
        material shortage, national emergency, restraint by court order or other
        public
        authority or governmental agency, interruption of synchronous operation,
        or
        other similar or dissimilar causes beyond the control of the Party affected,
        which causes such Party could not have avoided by exercising good electric
        operating practice. Nothing contained herein shall be construed to require
        a
        Party to settle any strike, lockout, work stoppage, or other industrial
        disturbance or dispute in which it maybe involved or to take an appeal from
        any
        judicial, regulatory or administrative action.

       

      B.     Transfer
        of
        Title and Indemnification

       

      Title
        and risk of
        loss related to the Power Supply Requirements shall transfer to the Buyer
        at the
        Delivery Points. Seller warrants that it will deliver the Power Supply
        Requirements to Buyer free and clear of all liens, security interests, claims
        and encumbrances or any interest therein or thereto by any person arising
        prior
        to the Delivery Points. Each Party shall indemnify, defend and hold harmless
        the
        other Party from and against any claims arising from or out of any event,
        circumstance, act or incident first occurring or existing during the period
        when
        control and title to the Power Supply Requirements is vested in the other
        Party.

       

      C.     Confidentiality

       

      Neither
        Party shall
        disclose to third parties Confidential Information obtained from the other
        Party
        pursuant to this Agreement except in order to comply with the requirements
        of
        FERC, NERC, Electric Reliability Organization, applicable regional reliability
        council, Regional Entity, Regional Transmission Organization, or Government
        Authority. Each Party shall use reasonable efforts to prevent or limit the
        disclosure required to be provided to third parties.

       

      D.     Further
        Assurances

       

      Subject
        to the
        terms and conditions of this Agreement, each of the Parties hereto will use
        reasonable efforts to take, or cause to be taken, all action, and to do,
        or
        cause to be done, all things necessary, proper or advisable under applicable
        laws and regulations to consummate and effectuate the transactions contemplated
        hereby.

       

      E.     Defined
        Terms

       

      Terms
        not
        specifically defined in this Agreement shall have the meaning given in the
        applicable Transmission Provider OATT. 

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          7

          
            

          

        

        
          
          

        

      

       

      F.     Assignment

       

      Unless
        mutually
        agreed to by the Parties, no assignment, pledge, or transfer of this Agreement
        shall be made by any Party without the prior written consent of the other
        Party,
        which shall not be unreasonably withheld, provided, however, that no prior
        written consent shall be required for (i) the assignment, pledge or other
        transfer to another company or Affiliate in the same holding company system
        as
        the assignor, pledgor or transferor, or (ii) the transfer, incident to a
        merger
        or consolidation with, or transfer of all (or substantially all) of the assets
        of the transferor, to another person or business entity; provided, however,
        that
        such assignee, pledgee, transferee or acquirer of such assets or the person
        with
        which it merges or into which it consolidates assumes in writing all of the
        obligations of such Party hereunder and provided, further, that either Party
        may, without the consent of the other Party (and without relieving itself
        from
        liability hereunder), transfer, sell, pledge, encumber or assign such Party’s
        rights to the accounts, revenues or proceeds hereof in connection with any
        financing or other financial arrangements.

       

      G.     Governing
        Law

       

      The
        interpretation
        and performance of this Agreement shall be according to and controlled by
        the
        laws of the Commonwealth of Pennsylvania regardless of the laws that might
        otherwise govern under applicable principles of conflicts of laws.

       

      H.     Counterparts

       

      This
        Agreement may
        be executed in two or more counterparts and each such counterpart shall
        constitute one and the same instrument.

       

      I.     Waiver

       

      No
        waiver by a Party of any default by the other Party shall be construed as
        a
        waiver of any other default. Any waiver shall be effective only for the
        particular event for which it is issued and shall not be deemed a waiver
        with
        respect to any subsequent performance, default or matter.

       

      J.     No
        Third Party
        Beneficiaries

       

      This
        Agreement
        shall not impart any rights enforceable by any third party other than a
        permitted successor or assignee bound to this Agreement.

       

      K.     Severability

       

      Any
        provision
        declared or rendered unlawful by any applicable court of law or regulatory
        agency or deemed unlawful because of a statutory change will not otherwise
        affect the remaining lawful obligations that arise under this
        Agreement.

       

      
        
          
            
            

            Effective
              Date:  January 1, 2006

          

          
            8

            
              

            

          

          
            
            

          

        

      

       

      L.     Construction

       

      The
        term
“including” when used in this Agreement shall be by way of example only and
        shall not be considered in any way to be a limitation. The headings used
        herein
        are for convenience and reference purposes only.

       

      IN
        WITNESS
        WHEREOF,
        the Parties have
        caused their duly authorized representatives to execute this Electric Power
        Supply Agreement on their behalf as of October 31, 2005.

       

      

        
          	
                  FirstEnergy
                    Solutions Corp.

                	
                  Pennsylvania
                    Power Company

                
	 	 	 	 	 	 	 	 	 
	
                  By
                    ______________________________

                	
                  By:
                    _______________________________________

                
	
                  Senior
                    Vice
                    President,

                  FirstEnergy
                    Solutions Corp.

                	
                  Vice
                    President, FirstEnergy Service
                    Company

                


        

      

       

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Exhibit
        A

      DEFINITIONS

       

      In
        addition to
        terms defined elsewhere in this Agreement, the terms listed below are defined
        as
        follows:

       

      Affiliate
        means, with
        respect to any person, any other person (other than an individual) that,
        directly or indirectly, through one or more intermediaries, controls, or
        is
        controlled by, or is under common control with, such person. For purposes
        of the
        foregoing definition, control means the direct or indirect ownership of more
        than fifty percent (50%) of the outstanding capital stock or other equity
        interests having ordinary voting power or ability to direct the affairs of
        the
        affiliate. 

       

      Ancillary
        Services
        means all services
        as defined in the Transmission Provider OATT that Buyer must obtain to deliver
        Capacity and Energy under this Agreement.

       

      Buyer’s
        Network Transmission Agreements
        means the service
        agreements for Network Integration Transmission Service and the Network
        Operating Agreement among the Transmission Provider and The Cleveland Electric
        Illuminating Company, Ohio Edison Company, Pennsylvania Power, and The Toledo
        Edison Company. 

       

      Buyer’s
        Retail Tariffs
        mean all retail
        tariffs of Pennsylvania Power Company as approved by the Pennsylvania Public
        Utility Commission.

       

      Buyer’s
        Power Supply Requirements means
        Capacity and
        Energy, necessary to meet its Provider of Last Resort obligations under
        Pennsylvania law, as well as other power supply obligations incurred by law,
        contract or tariff. Buyer’s Power Supply Requirements do not include deviations
        in the amount of energy scheduled and consumed under this Agreement, including,
        but not limited to, energy imbalance, transmission losses, and congestion
        as
        defined in the Transmission Provider OATT.

       

      Business
        Day
        means any day on
        which Federal Reserve member banks in New York City are open for
        business.

       

      Capacity
        means the resource
        that produces electric Energy, measured in megawatts.

       

      Code
        of
        Conduct
        means statutes,
        rules, regulations, or orders issued by a Government Authority that prohibit,
        restrict, or condition the exchange of information between the regulated
        and
        competitive business operations of Affiliates.

       

      Confidential
        Information
        means any
        confidential, proprietary, trade secret, critical energy infrastructure
        information, customer account information, or commercially sensitive information
        relating to the present or planned business of a Party that is supplied under
        this Agreement, and is identified as confidential by the entity supplying
        the
        information. 

       

       

       

       

      Delivery
        Point
        means, where
        Capacity and Energy are supplied from generating facilities owned or controlled
        by the Seller within the FirstEnergy Balancing Area, the point of
        interconnection between the generating facility and the transmission facilities
        of Transmission Owner. Delivery Point means, where Capacity and Energy are
        supplied from generating facilities outside of the FirstEnergy Balancing
        Area,
        the interface between the transmission facilities of the adjacent balancing
        area
        and the transmission facilities of Transmission Owner.

       

      
        
          
          

          Effective
            Date:  January 1, 2006

        

        
          10

          
            

          

        

        
          
          

        

      

      
         

      

      Electric
        Reliability Organization
        has the meaning
        given in Section 215(a)(2) of the Federal Power Act.

      


      Energy
        means electric
        energy delivered under this Agreement at three-phase, 60-hertz alternating
        current measured in megawatt hours.

       

      FERC
        means The Federal
        Energy Regulatory Commission or its regulatory successor.

       

      FirstEnergy
        Balancing Area
        means the
        collection of generation, transmission, and loads within the metered boundaries
        of the FirstEnergy system where FirstEnergy maintains load resource balance.
        

      


      Force
        Majeure
        has the meaning
        given in Section VII.C.

       

      Good
        Utility Practice
        means any of the
        practices, methods and acts engaged in or approved by a significant portion
        of
        the electric utility industry during the relevant time period 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 result at a reasonable cost consistent
        with
        good business practices, reliability, safety, and expedition. Good Utility
        Practice includes compliance with the standards adopted by NERC, its applicable
        regional councils, an Electric Reliability Organization or Regional Entity
        as
        approved by the FERC. Good 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
        acceptable practices, methods or acts, generally accepted in the region and
        consistently adhered to by utilities in the region.

       

      Government
        Authority
        means any federal,
        state, local, municipal or other governmental entity, authority or agency,
        department, board, court tribunal, regulatory commission, or other body,
        whether
        legislative, judicial or executive, together or individually, exercising
        or
        entitled to exercise any administrative, executive, judicial, legislative,
        policy, regulatory or taxing authority or power over Buyer or
        Seller.

       

      Interest
        Rate
        means the lesser
        of Prime Rate plus two percent and the maximum lawful rate permitted by
        applicable law.

       

      NERC
        means The North
        American Electric Reliability Council or any superceding organization with
        responsibility for establishing reliability standards for the interstate
        grid.


       

      Power
        means Capacity
        and/or Energy.

       

      
        
          
             

             

            
            

            Effective
              Date:  January 1, 2006

          

          
            11

            
              

            

          

          
            
            

          

        

      

       

      Prime
        Rate
        means for any
        date, the per annum rate of interest announced from time to time by Citibank,
        N.A., as its prime rate for commercial loans, effective for such date as
        established from time to time by such bank.

       

      Regional
        Entity
        has the meaning
        given in Section 215(a)(7) of the Federal Power Act.

      


      Regional
        Transmission Organization
        has the meaning
        given in Section 3(27) of the Federal Power Act.

      


      Special
        Contracts
        mean contracts
        between the Buyer and retail customers for the sales of Power and other related
        services at prices that differ from the Buyer’s Retail Tariffs.

       

      Spot
        Market
        means the Day
        Ahead or Real Time Energy Markets administered by the Regional Transmission
        Organization or any other over-the-counter Energy market in which the
        transaction date of the Energy purchase is within thirty calendar days of
        the
        last day of the delivery period specified for the purchase.

       

      Transmission
        Owner
        means the entity
        that owns facilities used for the transmission of Power from the Seller’s
        Generating Facilities.

       

      Transmission
        Provider
        means the Midwest
        Independent Transmission System Operator, Inc. or other utility, including
        Regional Transmission Organizations, transmitting Power on behalf of Buyer
        to or
        from the Delivery Point(s) under this Agreement.

       

      Transmission
        Provider OATT
        means the Open
        Access Transmission Tariff, Open Access Transmission and Energy Markets Tariff,
        or any other tariff of general applicability on file at the FERC under which
        the
        Transmission Provider offers transmission service.

      


      
        
          
            
            

            Effective
              Date:  January 1, 2006

          

          
            12

            
              

            

          

          
            
            

          

        

      

      


      Exhibit
        B

      Total
        Bill
        Calculation 

      


      Total
        Bill will not
        exceed ∑ [g + L + WCR] 

       

      where:

       

      
        	 	
                g

              	
                =

              	
                the
                  generation charge, expressed in total dollars, billed to Buyer’s retail
                  customers which elect to receive generation service from Buyer,
                  less any
                  gross receipts taxes contained in the generation
                  charge.

              


      

       

      
        	 	
                L

              	
                =

              	
                the
                  retail
                  charge for losses billed to Buyer’s retail customers which elect to
                  receive generation service from
                  Buyer

              


      

       

      
        	 	
                WCR=

              	
                Wholesale
                  Contract Revenues for Power supply
                  obligations.

              


      

       

       

       

      
        
          Effective
            Date:  January 1, 2006

        

        
          13