exv10w01



 



EXHIBIT 10.01


RESTATED INTERCHANGE AGREEMENT



RESTATED AGREEMENT TO

COORDINATE PLANNING AND OPERATIONS AND

INTERCHANGE POWER AND ENERGY



Between



NORTHERN STATES POWER COMPANY



and



NORTHERN STATES POWER COMPANY (WISCONSIN)



Restated January 16, 2001

Restates Agreement Dated September 17, 1984, As Amended



 








 



RESTATED AGREEMENT TO

COORDINATE PLANNING AND OPERATIONS AND

INTERCHANGE POWER AND ENERGY



Between



NORTHERN STATES POWER COMPANY



and



NORTHERN STATES POWER COMPANY (Wisconsin)



Table of Contents




	 	 	 	 	 	 	 	 	 
	Article	 	Title	 	Page
	
	 	
	 	

	ARTICLE I	 	Recitals	 	 	1	 
	ARTICLE II	 	Objectives of Interchange Agreement	 	 	4	 
	ARTICLE III	 	Definitions	 	 	4	 
	ARTICLE IV	 	Coordinating Committee	 	 	4	 
	ARTICLE V	 	Planning	 	 	5	 
	ARTICLE VI	 	Interconnection Systems	 	 	6	 
	ARTICLE VII	 	Operation and Maintenance	 	 	6	 
	ARTICLE VIII	 	Metering	 	 	7	 
	ARTICLE IX	 	Sales	 	 	8	 
	ARTICLE X	 	Charges	 	 	9	 
	ARTICLE XI	 	General Provisions	 	 	10	 
	ARTICLE XII	 	Termination of Existing Agreements	 	 	13	 
	ARTICLE XIII	 	Term of Agreement	 	 	13	 
	ARTICLE XIV	 	Features of Interchange Agreement Subject to
Automatic Adjustment Under Formula Provisions and Features
Subject to Adjustment Only by Filing Under Federal Power Act	 	 	13	 





 








 



Exhibits




	 	 	 
	Exhibit I	 	
Formula-type Procedures for Development of Amounts of Power Sales
	 	 	 
	Exhibit II	 	
Formula-type Procedures for Development of Amounts of Energy Sales
	 	 	 
	Exhibit III	 	
Formula-type Procedures for Development of Unit Rates for Power Sales
	 	 	 
	Exhibit IV	 	
Formula-type Procedures for Development of Unit Rates for Energy Sales
	 	 	 
	Exhibit V	 	
Formula-type Procedures for Development of Demand Related Costs
	 	 	 
	Exhibit VI	 	
Formula-type Procedures for Development of Energy Related Costs
	 	 	 
	Exhibit VII	 	
Specification of Rate of Return on Common Equity
	 	 	 
	Exhibit VIII	 	
Specification of Average Monthly Peak Demands
	 	 	 
	Exhibit IX	 	
Specification of Depreciation Rates
	 	 	 
	Exhibit X	 	
Specification of Demand and Energy Classification of Production Expenses







 








 



RESTATED

AGREEMENT TO COORDINATE PLANNING AND OPERATIONS

AND

INTERCHANGE POWER AND ENERGY




ARTICLE I

RECITALS




          1.1 THIS RESTATED AGREEMENT, hereinafter referred to as the Interchange
Agreement, is made this 16th day of January, 2001, by and among NORTHERN STATES
POWER COMPANY, a Minnesota corporation, hereinafter referred to as “NSP
(Minn)”; and NORTHERN STATES POWER COMPANY, a Wisconsin corporation,
hereinafter referred to as “NSP (Wis).”




          1.2 WHEREAS, the parties to this Agreement, hereinafter called “Parties”
or “NSP Companies” collectively, or “Party” singularly, are the owners and
operators of electric generation and transmission facilities (hereinafter
called “power supply facilities”) and are engaged in the business of providing
electric power and energy at retail and wholesale; and




          1.3 WHEREAS, NSP (Minn) and NSP (Wis) are utility operating company
subsidiaries of Xcel Energy Inc; and




          1.4 WHEREAS, the Parties for many years have coordinated the planning and
operation of their power supply facilities under various coordinating
agreements, including the “Coordinating Agreement Among Northern States Power
Company (Minnesota) and Northern States Power Company (Wisconsin)” (“1982
Contract”) and the “Agreement to Coordinate Planning and Operations and
Interchange Power and Energy Between Northern States Power Company (Minnesota)
and Northern States Power Company (Wisconsin)” dated September 17, 1984 (“1984
Contract”); and




          1.5 WHEREAS, the object of the coordination among the Parties has been to
plan and operate their power supply facilities as an integrated electric
system; and





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          1.6 WHEREAS, such integrated system planning and operation provides
benefits to the Parties and their respective customers, including opportunities
for:




	 	A.	 	The construction of new generation and
transmission facilities of optimum size to produce maximum
economies of scale for the Parties’ combined electric system
as a whole;






	 	B.	 	The economical use of capacity and energy
available from variations in load patterns resulting from the
diversity of loads imposed by the respective Parties;






	 	C.	 	The utilization of the seasonal and diversity
patterns of other utilities not contiguous to each of the
respective Parties for the outlet of surplus capacity and
energy which may be available from time to time, together with
the opportunity, because of such variation in seasons and
diversity of loads, to acquire capacity and energy from other
utilities and thus avoid or defer the construction of
generating capacity to meet seasonal loads;






	 	D.	 	The pooling of reserves to reduce the magnitude
of reserve capacity required by the respective Parties in
order to assure reliable service to their respective
customers;






	 	E.	 	Improvement in the reliability of electric
service through the use of transmission interconnections which
provide the respective Parties with the opportunity to call
upon one another as well as other utilities with which they,
or any of them, are interconnected to provide backup service
in case of emergencies or breakdowns in excess of the reserves
carried by the respective Parties; and







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	 	F.	 	The provision of the most economical energy for
the customers of the respective Parties by use of a
centralized economic dispatch system.






          1.7 WHEREAS, the Parties having planned and operated their power supply
facilities as an integrated system, it is fitting that each should bear the
same unit cost of power supply as the others; and




          1.8 WHEREAS, under the 1982 Contract the unit cost of power supply was
equalized among the Parties through sales of power and energy among the Parties
as set out in the contract; and




          1.9 WHEREAS, the Parties desire to continue to plan and operate their
power supply facilities on an integrated system basis and, through sales among
themselves, to equalize their unit power supply costs; and




          1.10 WHEREAS, the rates under which the sales of power and energy were
made among the Parties under the 1984 Contract were formula rates stated in
generalized terms; and




          1.11 WHEREAS, the Parties’ desire to provide for greater specificity in
the formula rates under which the sales among themselves are made and to
perfect and refine the cost of service procedures contained in the formula
rates; and




          1.12 WHEREAS, NSP(Minn) is the successor public utility to the rights and
obligations of Northern States Power Company (Minnesota) under the 1984
Contract;




          1.13 NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter stated, the Parties agree and contract as
follows:




ARTICLE II

OBJECTIVES OF INTERCHANGE AGREEMENT




          The objectives of this Interchange Agreement are (1) to provide the
contractual basis for the continued planning and operation of the power supply
facilities of the Parties in such a





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manner as to achieve the maximum possible economies consistent with the
highest practicable reliability of service and (2) to provide the basis for
determining the amounts of power and energy needed to be sold among the Parties
and the charges for such sales in order to equalize the Parties’ unit costs of
power supply.




ARTICLE III

DEFINITIONS




          3.1 “Sales of power and energy” are the sales of power in kilowatts and
the sales of energy in kilowatt-hours made under this Interchange Agreement by
each Party to the other Party.




          3.2 “Generation facilities” are those facilities of the Parties which
produce power and energy and introduce it into the transmission facilities.




          3.3 “Transmission facilities” are all facilities which serve a
transmission function.




          3.4 “Power supply facilities” consist of both generation and transmission
facilities as defined above.




          3.5 A Party’s “system” refers to the system of power supply facilities
which it owns. Where the context indicates such intent, “system” refers to the
combined system of power supply facilities of all Parties.




ARTICLE IV

COORDINATING COMMITTEE




          Coordinating Committee. The Parties shall establish a committee to be
known as the Coordinating Committee to coordinate planning and operations among
themselves. Each of the Parties shall designate, in writing, two persons who
are to act as its representatives on the committee. The Coordinating Committee
shall be responsible for the following:




	 	A.	 	Coordinating the planning and design of
generation and transmission facilities to be installed by the
Parties in the ensuing 10 year period;







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	 	B.	 	Coordinating the operation and maintenance of
generation and transmission facilities of the Parties;






	 	C.	 	Administering procedures for determining the
amounts of power and energy sold among the Parties In
accordance with the provisions of this Interchange Agreement;






	 	D.	 	Administering the development of monthly charges
under the formula rates contained in this Interchange
Agreement; and






	 	E.	 	Such other matters as the Coordination Committee
may determine to be necessary or desirable in order to carry
out the purposes of this Interchange Agreement.





The Coordinating Committee shall select a chairman and vice-chairman from its
members, and the chairman, or in his absence the vice-chairman, shall convene
meetings of the committee from time to time as deemed appropriate. The
chairman and the vice chairman shall not be employees of the same Party.




ARTICLE V

PLANNING




          The Parties agree that their power supply facilities shall be planned and
developed on the basis that their combined individual systems constitute an
integrated electric system and that the objective of their planning shall be to
maximize the efficiency and reliability of the system as a whole.




ARTICLE VI

INTERCONNECTION SYSTEMS




          6.1 Transmission Facilities. The Parties shall maintain adequate
Interconnections between their respective systems which will permit interchange
of electric power and energy pursuant to this Interchange Agreement.





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          6.2 Associated System Facilities. Each Party shall provide in its system
facilities for such telemetering, load control, communication, and relay
protection as is necessary for the proper operation of the interconnected
systems.




ARTICLE VII

OPERATION AND MAINTENANCE




          7.1 Operation. The interconnected systems of the Parties shall be
operated in continuous synchronism and in coordination with each other. If the
synchronous operation of the systems becomes interrupted because of reasons
beyond the control of any Party or because of scheduled construction or
maintenance, the Parties shall cooperate to remove the cause of the
interruption as soon as practicable and restore the systems to normal operating
condition.




          7.2 Service Conditions. It is intended that no Party shall be obligated
to deliver reactive power to any other Party or to receive reactive power from
any other Party when to do so may introduce objectionable operating conditions
on the system of any Party. It is recognized that in order to assure adequate
service and economical use of the facilities of the Parties’ systems it may be
necessary from time to time to establish operating procedures for carrying
reactive power loads of one system by the other.




          7.3 Recognition of Flow of Power and Energy. It is recognized by the
Parties that their respective electric systems are and will be directly or
indirectly interconnected with electric systems owned or operated by others,
that the flow of power and energy among the systems of the Parties will in part
be controlled by the physical and electrical characteristics of the facilities
involved and the manner in which they are operated, and that part of the power
and energy being delivered under this Interchange Agreement may flow through
such other systems rather than through the facilities of the Parties.





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          Each Party shall at all times cooperate with other interconnected systems
in establishing arrangements which may be necessary to relieve any hardship on
other systems caused by energy flows from deliveries hereunder.




          7.4 Correction of Trouble. In the event that the interconnected operation
of the systems herein contemplated results in trouble on any Party’s system
including, but not limited to, interruptions, grounds, communication
interference, unreasonable surges, or objectionable voltage fluctuations, where
such trouble is caused by the method of operation or the facilities employed by
another Party, its customers, or fourth party suppliers connected to its lines,
such trouble shall be corrected by the Party on or through whose system it
originates within a reasonable time after written notice thereof.




          7.5 Emergency Service from a Third Party. In the event of an emergency on
a Party’s system the other Party shall procure emergency service from other
systems which may be available. Any Party procuring such service shall be the
sole judge of its ability to supply emergency service.




ARTICLE VIII

METERING




          8.1 Metering. Suitable metering equipment shall be installed for
determining the flow of power and energy among the Parties. The ownership of
and responsibility for metering equipment shall be determined by the Parties.
Any Party may at any time install and maintain duplicate meters at its own
expense.




          8.2 Meter Readings. Each Party shall read its meters at times to be
agreed upon and promptly forward such registrations to the other Party.




          8.3 Meter Tests, Accuracy, and Adjustments. Each meter shall be tested
periodically and maintained in an accurate condition by the Party owning the
meter in accordance with rules





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prescribed by regulatory bodies having jurisdiction thereof. Adjustments
of any meter readings for meter error shall not extend beyond 60 days previous
to day on which inaccuracy is discovered. Should any metering equipment at any
time fail to register, or should the registration thereof be so erratic as to
be meaningless, the quantities of power and energy delivered shall be
determined from the best information available.




ARTICLE IX

SALES




          9.1 Amount of Sales. The Parties shall sell power and energy to each
other in amounts that will allow them to achieve equal unit costs of power
supply. The amount of power sold by each Party to the other Party in each
billing month shall be determined as set out in Exhibit I hereto. The amount
of energy sold by each Party to the other Party in each billing month shall be
determined as set out in Exhibit II hereto.




          9.2 Character of Service. Power and energy sold hereunder shall be
delivered as three-phase alternating current, at a frequency of approximately
60 Hz with such variations from nominal voltages as may be mutually established
from time to time.




          9.3 Continuity of Delivery. Power and energy sold hereunder shall be
furnished continuously except for interruptions or curtailments in service
caused by an uncontrollable force, or by operation of devices installed for
system protection, or by the necessary installation, maintenance, repair, and
replacement of facilities. Such interruptions or reductions in service shall
not constitute a breach of this Interchange Agreement, and no Party shall be
liable to the other for damages resulting therefrom. Except in case of
emergency, each Party shall give reasonable advance notice of temporary
interruptions or curtailments in service necessary for such installations,
maintenance, repair, and replacement of facilities, and shall attempt to
schedule such interruptions or curtailments as convenient for all Parties.





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ARTICLE X

CHARGES




          10.1 Compensation General Principle. The objective of the charges
provided for herein is to compensate the Party selling power and energy for its
full fixed costs including return and its full variable costs of producing and
transmitting the power and energy.




          10.2 Monthly Charges. The Parties selling power and energy under this
Interchange Agreement shall charge the unit rates for power (dollars per
kilowatt) developed each month pursuant to Exhibit III hereof and the unit
rates for energy (mills per kilowatt-hour) developed each month pursuant to
Exhibit IV hereof. The unit rate for power for each Party shall be applied to
the number of kilowatts of power sold by the Party pursuant to Paragraph 9.1
hereof in the billing month, and the unit rate for energy for each Party shall
be applied to the number of kilowatt-hours sold by that Party pursuant to that
Paragraph.




          10.3 True-up for Payments for Power. The unit rates for power developed
pursuant to Exhibit III hereof shall initially be developed on the basis of
estimated data for the calendar year. When actual cost data are available, the
total annual costs shall be redetermined and the total annual payment by each
Party shall be adjusted to reflect the actual cost data. The specification of
average monthly coincidental peak demands specified in Exhibit VIII shall not,
however, be adjusted to actual data in the true-up process. The adjustment
shall be accomplished by a surcharge or credit, whichever is appropriate, on
the next statement prepared under Paragraph 10.4 hereof. The estimated data
for the calendar year used to develop the unit rates for power may be adjusted
from time to time to reflect significant revisions in estimates.




          10.4 Statements. As promptly as practicable after the first day of each
calendar month, the Parties shall cause to be prepared a statement setting
forth the transactions and charges between the Parties during the preceding
month in such detail and with such segregations as may





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be needed for operating records or for settlements under the provisions of
this Interchange Agreement. The statement shall set forth in detail the
charges and credits to each Party and the net balance due.




          10.5 Method of Settlement. The Party or Parties owing a net balance due,
as set forth in the monthly statement, shall pay the net balance due within 10
days of the date of the statement.




ARTICLE XI

GENERAL PROVISIONS




          11.1 Reports and Information. Each Party shall, upon request, furnish to
the other Party such reports and information concerning its system operations
as are reasonably necessary to enable each member of the Operating Committee to
make an informed judgment on all matters considered by the Committee.




          11.2 Uncontrollable Force. No Party shall be considered to be in default
in respect of any obligation hereunder if prevented from fulfilling such
obligation by reason of an uncontrollable force. The term “uncontrollable
force” shall include, among others, such causes as failure of facilities,
flood, earthquake, storm, lightning, fire, epidemic, war, riot, civil
disturbance, labor disturbance, sabotage, delay in receiving supplies and
materials, collision, or restraint or order of court or public authority having
jurisdiction, or other causes beyond the control of the Party affected, and
which by exercise of due diligence and foresight could not reasonably have been
avoided. Any Party unable to fulfill any obligation by reason of an
uncontrollable force shall remove said inability with reasonable dispatch;
except that the settlement of strike or labor disturbance shall be entirely
within the discretion of the Party incurring the strike or disturbance.





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          11.3 Indemnity. Each Party agrees to defend, indemnify, and hold harmless
the other Party against any and all claims, liability, loss, damage, or expense
caused by or resulting from the negligent acts or omissions of the indemnifying
Party, its employees or agents in connection with the performance of this
Interchange Agreement.




          11.4 Waivers. Any waiver at any time by a Party of its rights with
respect to default of this Interchange Agreement or with respect to any other
matter arising in connection with this Interchange Agreement, shall not be
deemed a waiver with respect to any subsequent default or matter. Any delay,
short of the statutory period of limitation, in asserting of enforcing any
right under this Interchange Agreement, shall not be deemed a waiver of such
rights.




          11.5 Right of Access. Each Party shall give authorized agents and
employees of any other Party the right to enter its premises at all reasonable
times for the purpose of reading or checking meters, for constructing, testing,
repairing, renewing, exchanging, or removing any or all of such other Party’s
equipment which may be located on the property of the Party or performing any
work incident hereto.




          11.6 Successors and Assigns. This Interchange Agreement shall inure to
the benefit of, and shall bind, the successors of the Parties hereto but shall
not be assigned by any Party without first securing written consent of the
other Party.




          11.7 Limitation as to Third Parties. The signatories hereto shall be the
only Parties in interest to this Interchange Agreement. This Interchange
Agreement is not intended to and shall not grant rights of any character
whatsoever in favor of any person, corporation, association, or entity other
than the Parties, and the obligations herein assumed by the Parties are solely
for the use and benefit of the Parties. Nothing herein contained shall be
construed as permitting or





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vesting in any person, corporation, association, or entity other than the
Parties, any rights hereunder or in any of the electric facilities owned by the
Parties or the use thereof.




          11.8 Independent Contractors. It is agreed among the Parties that by
entering into this Interchange Agreement providing for coordinated planning and
operation of their systems, the Parties shall not become partners, but as to
each other and to third persons, the Parties shall remain independent
contractors in all matters relating to this Agreement.




          11.9 Notices. Any notices, demands, or requests, required or authorized
by this Interchange Agreement, shall be deemed properly given if mailed postage
prepaid, as follows:




	 	 	 
	For NSP (Minn):	 	
For NSP (Wis):
	President	 	
President
	Minnesota Jurisdiction	 	
Wisconsin Jurisdiction
	Northern States Power Company	 	
Northern States Power Company (Wisconsin)
	414 Nicollet Mall	 	
1414 West Hamilton Avenue
	Minneapolis, MN 55401	 	
P.O. Box 8
	 	 	
Eau Claire, WI 54702-0008






          The designation of the persons to be notified or the address of such
person may be changed at any time by similar notice.




          11.10 Regulatory Approval. This Interchange Agreement and all obligations
hereunder are subject to the regulation of the Federal Energy Regulatory
Commission and any other regulatory body or governmental authority having
jurisdiction thereof.




          11.11 The interpretation and performance of this Interchange Agreement
shall be in accordance with and controlled by the laws of the State of
Minnesota.




ARTICLE XII

TERMINATION OF EXISTING AGREEMENTS




          The following agreements are terminated as of the date that this
Interchange Agreement is permitted to become effective as a rate schedule under
Section 205 of the Federal Power Act.




	 	A.	 	Coordinating Agreement, dated April 23, 1982.







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	 	B.	 	Amendment to Coordinating Agreement, Article
7.09, Determination of Return on Investment, dated October 29,
1982.






	 	C.	 	Agreement to Coordinate Planning and Operations
and Interchange Power and Energy, dated September 17, 1984, as
amended.





Termination of the foregoing agreements shall have no effect on unpaid bills or
other liabilities which may have accrued as of the date of termination.




ARTICLE XIII

TERM OF AGREEMENT




          This Restated Interchange Agreement shall become effective January 1,
2001, or the date that it is permitted to become effective as a rate schedule
under Section 205 of the Federal Power Act. The contract may be terminated by
either Party giving the other Party five years written notice. The Interchange
Agreement may be terminated at any time by mutual agreement of the Parties.
The applicable provisions of the Interchange Agreement shall continue in effect
after termination to the extent necessary to provide for final billings and
adjustment.




ARTICLE XIV

FEATURES OF INTERCHANGE AGREEMENT SUBJECT TO

AUTOMATIC ADJUSTMENT UNDER FORMULA PROVISIONS

AND FEATURES SUBJECT TO ADJUSTMENT ONLY BY FILING

UNDER FEDERAL POWER ACT




          14.1 Automatically Adjusting Features. It is the intent of the Parties
that Exhibits I, II, III, IV, V and VI of this Interchange Agreement establish
formula-type procedures for developing the amounts of power and energy sales
and the unit rates charged for such sales and that the amounts developed under
the formula-type procedures set out in those exhibits will adjust automatically
from time to time as provided in the exhibits and that no filings will be made
at the Federal Energy Regulatory Commission or any successor agency to reflect
such automatic adjustments. It is the further intent of the Parties that any
change in the formula-type





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procedures set out in the above specified exhibits shall be filed as a
rate change under the Federal Power Act.




          14.2 Features Not Automatically Adjusting. It is the intent of the
Parties that the values and data specified in Exhibits VII, VIII, IX, X and XI
shall not be subject to automatic adjustment and may be changed only by filing
revised sheets as a rate change under the Federal Power Act. The Parties
contemplate that a revised Exhibit VIII will be filed annually at the end of
each calendar year to specify the projected average monthly peak demands for
the succeeding calendar year, but that if the projected demands are not
available before the commencement of the calendar year to which they apply,
they may be filed as soon in that calendar year as feasible, with a request, in
which each Party shall concur, that they be made effective as of the first day
of the calendar year.




          14.3 Example of Development of Unit Rates. Exhibit III and IV illustrate
in detail the development of the unit rates for power and energy sales. It is
the Intent of the Parties that no material change in the procedures used to
develop the unit rates will be made without filing a revised Exhibit III and IV
illustrating the change as a rate change under the Federal Power Act.



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          IN WITNESS WHEREOF, the Parties have caused this instrument to be executed
by their respective authorized officials as of the day and year first above
written.




	 	 	 	 	 	 
	ATTEST	 	NORTHERN STATES POWER
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	 	 	By:	 	 
	 	
	 	 	

	 	 	 	Title:	 
	 	 	 	NORTHERN STATES POWER COMPANY
	 	 	 	(WISCONSIN)
	 
	 	 	 	 	 	 
	 	 	 	By:	 	 
	 	 	 	 	

	 	 	 	Title:	 







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Exhibits




	 	 	 
	Exhibit I	 	
Formula-type Procedures for Development of Amounts of Power Sales
	 	 	 
	Exhibit II	 	
Formula-type Procedures for Development of Amounts of Energy Sales
	 	 	 
	Exhibit III	 	
Formula-type Procedures for Development of Unit Rates for Power Sales
	 	 	 
	Exhibit IV	 	
Formula-type Procedures for Development of Unit Rates for Energy Sales
	 	 	 
	Exhibit V	 	
Formula-type Procedures for Development of Demand Related Costs
	 	 	 
	Exhibit VI	 	
Formula-type Procedures for Development of Energy Related Costs
	 	 	 
	Exhibit VII	 	
Specification of Rate of Return on Common Equity
	 	 	 
	Exhibit VIII	 	
Specification of Average Monthly Peak Demands
	 	 	 
	Exhibit IX	 	
Specification of Depreciation Rates
	 	 	 
	Exhibit X	 	
Specification of Demand and Energy Classification of Production Expenses