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                                                                   EXHIBIT 10.4b




                                                                (EXECUTION COPY)





                            INTERCONNECTION AGREEMENT

                                  By and Among

                         THE CONEMAUGH STATION OWNERS

                                      and

                     THE CONEMAUGH SWITCHING STATION OWNERS




                            Dated: November 19, 1999


                                    for the


                          CONEMAUGH GENERATING STATION
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                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----
1.0    Definitions........................................................     1

2.0    Term...............................................................     6

3.0    Continuing Obligations and Responsibilities........................     7
       3.1    Interconnection Service.....................................     7
       3.2    Access, Easements, Conveyances, Licenses and Restrictions...     8
       3.3    Facility and Equipment Maintenance..........................     9
       3.4    New Construction or Modifications...........................    10
       3.5    Inspections.................................................    12
       3.6    Information Reporting Obligations...........................    13
       3.7    Local Services..............................................    14
       3.8    Switching Station Owners Provided Local Services............    15
       3.9    Generating Station Owners Provided Local Services...........    16
       3.10   Spare Parts.................................................    17
       3.11   Emergency Procedure.........................................    17
       3.12   Interconnection Service Interruptions.......................    18
       3.13   Non-Availability Notification...............................    18
       3.14   Schedule Maintenance Notification and Coordination..........    19
       3.15   Safety......................................................    19
       3.16   Environmental Compliance and Procedures.....................    20

4.0    Operations.........................................................    20
       4.1    General.....................................................    20
       4.2    Generating Station Owners' Operating Obligations............    21
       4.3    Auditing of Accounts, Records and Operational Records.......    23

5.0    Cost Responsibilities and Billing Procedures.......................    23
       5.1    Cost Responsibility for Interconnection Service.............    23
       5.2    Billing Procedures..........................................    23
       5.3    Payment of Invoices.........................................    23
       5.4    Interest on Unpaid Balances.................................    23
       5.5    Default.....................................................    24

6.0    Documentation......................................................    24
       6.1    Drawings....................................................    24

7.0    Confidentiality....................................................    24
       7.1    Confidentiality of the Switching Station Owners.............    24
       7.2    Confidentiality of the Generating Station Owners............    25
       7.3    Confidentiality of Audits...................................    26
       7.4    Remedies....................................................    26

8.0    Events of Default..................................................    26

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       8.1    Events of Default by Generating Stations Owners.............    26
       8.2    Remedies of Switching Station Owners........................    27
       8.3    Events of Default by Switching Station Owners...............    28
       8.4    Remedies of Generating Station Owners.......................    28
       8.5    Specific Performance........................................    29

9.0    Indemnification....................................................    29
       9.1    Generating Station Owners' Indemnification..................    29
       9.2    Switching Station Owners' Indemnification...................    29
       9.3    Indemnification Procedures..................................    30
       9.4    Survival....................................................    30

10.0   Insurance..........................................................    30

11.0   Force Majeure......................................................    31

12.0   Disputes...........................................................    31

13.0   Representations....................................................    32
       13.1   Representations of the Switching Station Owners.............    32
       13.2   Representations of the Generating Station Owners............    33
       13.3   Representation of All Parties...............................    33

14.0   Assignment/Change in Corporate Identity............................    34

15.0   Subcontractors.....................................................    36

16.0   Labor Relations....................................................    36

17.0   Independent Contractor Status......................................    37

18.0   Limitation of Liability............................................    37

19.0   Notices............................................................    37

20.0   Headings...........................................................    38

21.0   Waiver.............................................................    38

22.0   Counterparts.......................................................    38

23.0   Governing Law and Construction.....................................    38
       23.1   Laws and Regulations........................................    38

24.0   Severability.......................................................    39

25.0   Amendments.........................................................    39


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26.0   Entire Agreement...................................................    39

27.0   No Third Party Beneficiaries.......................................    39

28.0   Conflicts..........................................................    40

29.0   Further Assurances.................................................    40

30.0   Several Liability of Each of the Owners............................    40
       30.1   Several Liability of Generation Station Owners..............    40
       30.2   Several Liability of Switching Station Owners...............    40

31.0   Appointment of Agents..............................................    40


                                   SCHEDULES

                    Schedule A -- Interconnection Facilities




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                           INTERCONNECTION AGREEMENT

This Interconnection Agreement (the "Agreement") dated as of November 19, 1999,
by and among Atlantic City Electric Company ("ACE"), Baltimore Gas & Electric
Company ("BGE"), Delmarva Power & Light Company ("DPL"), Sithe Pennsylvania
Holdings, LLC ("Sithe") PP&L, Inc. ("PPL"), PECO Energy Company ("PECO"), UGI
Development Company ("UGI"), Potomac Electric Power Company ("PEPCO") and Public
Service Electric and Gas Company ("PSE&G") in their capacity as the Conemaugh
Generating Station Owners (each, a "Generating Station Owner", and together,
the "Generating Station Owners") and ACE, BGE, DPL, Metropolitan Edison
Company, PPL, PECO, UGI Utilities, Inc., PEPCO and PSE&G in their capacity as
the Conemaugh Switching Station Owners (each, a "Switching Station Owner", and
together, the "Switching Station Owners"). The Generating Station Owners and
the Switching Station Owners are referred to herein as a "Party", and
collectively, as the "Parties."

                                  WITNESSETH:

     WHEREAS, the Generating Station Owners plan to continue to own and operate
the Conemaugh Station;

     WHEREAS, the Switching Station Owners intend to continue to operate their
switchyard and transmission system from their present locations;

     WHEREAS, the Conemaugh Station is interconnected to the Switching
Station Owners' Transmission System and the Switching Station Owners and the
Generating Station Owners desire to keep the Conemaugh Station interconnected
to such Transmission System on the terms set forth herein;

     WHEREAS, the Switching Station Owners and the Generating Station Owners
have agreed to execute this Agreement in order to establish the requirements,
terms and conditions for the interconnection of the Conemaugh Station with the
Transmission System of the Switching Station Owners.

     NOW THEREFORE, in consideration of the mutual representations, covenants
and agreements hereinafter set forth, and intending to be legally bound hereby,
the Parties hereto agree as follows:

                                    ARTICLE 1
                                  DEFINITIONS

1.0  Definitions. Wherever used in this Agreement with initial capitalization,
the following terms shall have the meanings specified or referred to in this
Article 1.

     1.1  "Affiliate" shall mean, with respect to a corporation, partnership,
or other entity, each other corporation, partnership, or other entity that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such corporation, or other
entity.

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     1.2  "Agreement" shall mean this Interconnection Agreement dated as of
November 19, 1999 by and between the Switching Station Owners and the
Generating Station Owners, including all schedules attached hereto and any
amendments hereto.

     1.3  "Conemaugh Station" shall mean that real and personal property owned
by the Generating Station Owners which comprises the Conemaugh Generating
Station, including, but not limited to, the buildings, structures, turbines,
generators, equipment and other improvements, and any additions, modifications
or replacements thereto.

     1.4  "Easement Agreement" shall mean, with respect to the Conemaugh
Station, the Easement, License and Attachment Agreement among all of the
Generating Station Owners and all of the Switching Station Owners, containing
grants and reservations of easements and other rights with respect to the
Conemaugh Station, which agreement will be executed by the Parties in
accordance with Section 3.2 of this Agreement.

     1.5  "Effective Date" shall mean the date referenced in the first
paragraph of this Agreement.

     1.6  "Emergency" shall mean (a) with respect to the Switching Station
Owners, a condition or situation with PJM Interconnection, L.L.C., the
Switching Station Owners or the Transmission Operator deem imminently likely to
(i) endanger life or property, or (ii) adversely affect or impair the
Transmission System, the Switching Station Owners' electrical systems or the
electrical or transmission systems of other to which the Transmission System or
the Switching Station Owners' electrical systems are directly or indirectly
connected and (b) with respect to the Generating Station Owners, a condition or
situation which the Generating Station Owners deem imminently likely to (i)
endanger life or property, or (ii) adversely affect or impair the Conemaugh
Station. Such a condition or situation includes, but is not limited to,
overloading or potential overloading, excessive voltage drop or unusual
operating conditions.

     1.7  "Environmental Laws" shall mean (i) Federal, state, and local laws,
regulations, rules, ordinances and codes, and (ii) decrees, judgments,
directives, or judicial or administrative orders applicable to the Parties and
relating to pollution or protection of the environmental, natural resources or
human health and safety, including, in each case, without limitation, laws
relating to Releases or threatened Releases of Hazardous Substances (including,
without limitation, Releases into or onto ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, Release,
transport or handling of Hazardous Substances.

     1.8  "FERC" shall mean the Federal Energy Regulatory Commission or its
successor.

     1.9  "Generating Station Owners" shall have the meaning set forth in the
introductory paragraph of this Agreement (and shall include their permitted
successors and assigns) as the owners as tenants in common of undivided
interests in the Conemaugh Station.

     1.10  "Generating Station Owners' Facilities" shall mean that equipment
and appurtenances at the Conemaugh Station, which are owned, controlled, or
operated by the Generating Station Owners, that might reasonably be expected to
have an impact on system frequency, voltage, system stability, power quality or
the safe operation of the


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Switching Station Owners Facilities or Transmission System.

     1.11  "Good Utility Practice" shall mean 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 is not intended to be
limited to the optimum practice, method, or act to the exclusion of all others,
but rather is intended to include acceptable practices, methods, or acts
generally accepted in the region.

     1.12  "Hazardous Substances" shall mean: (a) any petrochemical or
petroleum products, oil, radioactive materials, radon gas, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contains dielectric fluid that may contain
polychlorinated biphenyls; (b) any chemicals, materials or substances defined
as or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "hazardous constituents", "restricted hazardous
materials", "extremely hazardous substances", "toxic substances",
"contaminants", "pollutants", "toxic pollutants" or words of similar meaning
and regulatory effect under any applicable Environmental Law; or (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law.

     1.13  "Interconnection Service" shall mean all such services as are
necessary and sufficient to connect the Conemaugh Station with the Transmission
System and to enable the Owners to transmit the energy and ancillary services
generated by the Conemaugh Station to the Transmission System. Interconnection
Service shall not mean transmission service, services not included in this
Agreement, line losses, or any other service which is available and/or required
under the PJM Tariff, or any retail wheeling tariff, including any distribution
service tariff or contract, in each case as amended from time to time, which is
applicable to the Conemaugh Station.

     1.14  "Investment Grade Credit Rating" shall mean any entity with (a)
senior long-term debt rated "Baa3" or better from Moody's, "BBB-" or better
from S&P or investment grade as determined by another nationally recognized
rating service, or (b) a net worth of at least one hundred million dollars
($100,000,000.00).

     1.15  "Joint Tag List" shall mean the list of personnel approved from time
to time by the Switching Station Owners, in accordance with Good Utility
Practice, who meet the Switching Station Owners requirements to switch, tag,
and ground electrical equipment.

     1.16  "Joint Use Facilities" shall mean equipment, identified as Joint Use
Facilities in Schedule A, as amended from time to time, which are owned by
either the Switching Station Owners or the Generating Station Owners and which
are primarily used for generation operations but are also essential to the
operational reliability of the Transmission System and are, therefore, Jointly
Operated by the Switching Station Owners and the Generating Station Owners.

     1.17  "Jointly Operated" shall mean to either operate or request operation
of Joint Use Facilities.


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     1.18  "MAAC" shall mean the Mid-Atlantic Area Council, a reliability
council under Section 202 of the Federal Power Act established pursuant to the
MAAC Agreement dated August 1, 1994, or any successor thereto.

     1.19  "Maintain" shall mean construct, reconstruct, install, inspect,
repair, replace, operate, patrol, maintain, use, modernize, expand, or upgrade,
or undertake other similar activities including Routine Inspection and
Maintenance in accordance with applicable law, PJM requirements and Good
Utility Practice.

     1.20  "MDPSC" shall mean the Maryland Public Service Commission or any
successor agency thereto.

     1.21  "NERC" shall mean North American Electric Reliability Council or any
successor electric reliability organization.

     1.22  "NJBPU" shall mean the New Jersey Board of Public Utilities or any
successor agency thereto.

     1.23  "OSHA" shall mean the Occupational Safety and Health Administration
or any successor agency thereto.

     1.24  "PAPUC" shall mean the Pennsylvania Public Utility Commission or any
successor agency thereto.

     1.25  "PCF" shall mean Pool Controlled Facilities.

     1.26  "PJM" shall mean the Pennsylvania-New Jersey-Maryland interconnected
power pool operated under the PJM Agreement or any successor thereto.

     1.27  "PJM Agreement" shall mean the Pennsylvania-New Jersey-Maryland
Interconnection Agreement, dated September 26, 1956, as amended by the
Operating Agreement of PJM Interconnection, L.L.C., dated as of April 1, 1997
and as amended and restated as of June 2, 1997, and as may be further amended
or superseded from time to time.

     1.28  "PJM Control Area" shall mean the control area recognized by NERC as
the PJM Control Area.

     1.29  "PJM Interconnection, L.L.C." shall mean the entity formerly known
as the PJM Interconnection Association, converted into a limited liability
company pursuant to the Delaware Limited Liability Company Act, Title 6,
Sections 18-101 et seq. of the Delaware Code, by virtue of the filing of both
the Certificate of Formation and Certificate of Conversion with the Secretary
of State of Delaware, effective as of March 31, 1997, or the successor or
successors thereto, if any, which continue to perform the functions of such
entity.

     1.30  "PJM System Operator" shall mean the PJM Interconnection, L.L.C.
energy control center staff responsible for central dispatch as provided in the
PJM Agreement, as amended or superseded.


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     1.31  "PJM Tariff" shall mean the PJM Open Access Transmission Tariff
filed by the PJM Interconnection, L.L.C. with the FERC on July 14, 1997, in
Docket No. OA97-261-000 as amended and effective April 1, 1998, and as may be
further modified, amended or superseded from time to time, under which
transmission and ancillary service is provided within the PJM Control Area.

     1.32  "Point of Interconnection" shall mean each ownership point of
demarcation where capacity, energy, and ancillary services each are transferred
between the Conemaugh Station and the Transmission System. The Points of
Interconnection are specified in Schedule A to this Agreement, which may be
modified from time-to-time by mutual written agreement of the Parties.

     1.33  "Pool Controlled Facilities" or "PCFs" shall mean those Switching
Station Owners Interconnection Facilities over which PJM Interconnection,
L.L.C., or any successor entity, exercises operational control in accordance
with the applicable agreement or tariff, or any successor agreement or tariff,
as such facilities are designated in Schedule A to this Agreement.

     1.34  "Qualified Personnel" shall mean individuals trained for their
positions by the Generating Station Owners and/or the Switching Station Owners
pursuant to Good Utility Practice.

     1.35  "Release" shall mean release, spill, leak, discharge, dispose of,
pump, pour, emit, empty, inject, leach, dump, or allow to escape into or
through the environment.

     1.36  "Revenue Meters" shall mean all MWh, MVARh meters, pulse isolation
relays, pulse conversion relays, transducers used by PJM Interconnection,
L.L.C. or the Switching Station Owners for billing purposes, and associated
totalizing equipment and appurtenances (including voltage transformers and
current transformers), as defined in Schedule A, used to measure the transfer
of energy across the Points of Interconnection.

     1.37  "Right-of-Way Access" shall mean gates, roadways, paths, or other
means of access used or required to gain entry to the transmission or
distribution system rights-of-way with respect to a Party's property or
facilities.

     1.38  "Routine Inspection and Maintenance" shall mean any inspection,
certification, test and/or work required pursuant to applicable law, PJM
requirements and Good Utility Practice on either Party's property or facilities
to ensure (a) reliable substation, transmission, and distribution operations,
and (b) transmission and distribution system integrity.

     1.39  "Secondary Systems" shall mean control or power circuits that
operate below 600 volts, ac or dc, including, but not limited to, any hardware,
control or protective devices, cables, conductors, electric raceways, secondary
equipment panels, transducers, batteries, chargers, and voltage and current
transformers.

     1.40  "Spill Prevention Control and Countermeasure Plan" or "SPCC" shall
mean a plan to be implemented for on shore facilities that includes physical
structures and other measures to respond to and to prevent spills of oil from
reaching navigable waters as defined in Section

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502(7) of the Federal Water Pollution Control Act, or adjoining shorelines.

     1.41  "Switching and Tagging Rules" shall mean the Switching Station
Owners' switching and tagging rules as amended from time to time.

     1.42  "Switching Station Owners" shall have the meaning set forth in the
introductory paragraph of this Agreement (and shall include their permitted
successors and assigns) as the owners as tenants in common of undivided
interests in the Conemaugh Switchyard.

     1.43  "Switching Station Owners' Facilities" shall mean those
transmission, distribution, substation, and communication facilities and
related equipment, including the Switching Station Owners Interconnection
Facilities, and any additions, modifications or replacements thereto, that
service the Conemaugh Station.

     1.44  "Switching Station Owners' Interconnection Facilities" shall mean
all structures, facilities, equipment, devices and apparatus owned or leased
by, or under contract to the Switching Station owners, including those that are
identified as the Switching Station owners Interconnection Facilities or as
Joint use Facilities owned by the Switching Station owners in Schedule A, as
amended from time to time, which facilities are necessary to facilitate the
interconnection of the Conemaugh Station to the Transmission System.

     1.45  "Transmission Operator" shall mean the person, or persons,
designated by the Switching Station Owners who coordinate the day-to-day
interconnection of the Conemaugh Station with the Transmission System.

     1.46  "Transmission System" shall mean the facilities, including PCFs,
owned, controlled, or operated by the Switching Station Owners, either jointly
or individually, for purposes of providing transmission service, including
services under the PJM Tariff, and Interconnection Service.

                                   ARTICLE 2
                                      TERM

2.0  Term.

     2.1  Subject to required regulatory authorizations, this Agreement shall
become effective when signed by the Parties except that obligations of the
Parties under this Agreement to provide or pay for Interconnection Service and
other services described herein shall not become effective until the date on
which the sale by Metropolitan Edison Company of its interest in the Conemaugh
Generating Station to Sithe Pennsylvania Holdings L.L.C. is consummated. This
Agreement shall continue in effect until the date of retirement for the
Conemaugh Station, unless terminated in accordance with the terms of this
Agreement or the Parties agree to an early termination date. The Switching
Station Owners shall file this Agreement with the FERC as a Rate Schedule
within the meaning of 18 C.F.R. Part 35. The Generating Station Owners agree to
support such filing, to reasonably cooperate with the Switching Station Owners
with respect to such filing, and to provide any information, including the
filing of testimony, reasonably required by the Switching Station Owners to
comply with applicable filing requirements.

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     2.2  If (a) the FERC, any State or State regulatory commission or PJM
Interconnection, L.L.C. implements a change in any law, regulation, rule or
practice, or (b) the Switching Station Owners' compliance with a change in any
law or regulation, which compliance, in either case, affects, or may reasonably
be expected to affect, the Switching Station Owners' or the Generating Station
Owners performance under this Agreement, then the Switching Station Owners or
the Generating Station Owners performance under this Agreement, then the
Switching Station Owners and the Generating Station Owners shall negotiate in
good faith any amendments to this Agreement that are necessary to adapt the
terms of this Agreement to such change, and the Switching Station Owners shall
file such amendments with the FERC. If the Parties are unable to reach
agreement on such amendments, either Party shall have the right to make a
unilateral filing with the FERC to modify this Agreement pursuant to Sections
205 or 206 or any other applicable provision of the Federal Power Act and the
FERC rules and regulations thereunder; provided that the other Party shall have
the right to oppose such filing and to participate fully in any proceeding
established by the FERC to address such amendments.

     2.3  The applicable provisions of this Agreement shall continue in effect
after cancellation or termination hereof to the extent necessary to provide for
final billings, billing adjustments, and the determination and enforcement of
liability and indemnification obligations arising from acts or events that
occurred while this Agreement was in effect.

     2.4  Notwithstanding any term of this Agreement to the contrary, the
Generating Station Owners may elect, in their sole discretion and without
liability to the Switching Station Owners, to discontinue the interconnection
of the Conemaugh Station with the Switching Station Owners Interconnection
Facilities and terminate this Agreement upon 24 months' prior written notice to
the Switching Station Owners, provided however that if such termination does
not coincide with the retirement of the Conemaugh Station, the Generating
Station Owners shall continue to provide the local services described in
Section 3.9 hereof until such retirement.

                                   ARTICLE 3
                  CONTINUING OBLIGATIONS AND RESPONSIBILITIES

3.0  Continuing Obligations and Responsibilities.

     3.1  Interconnection Service.

          3.1.1  The Switching Station Owners shall provide the Generating
Station Owners with Interconnection Service to the Conemaugh Station over the
Switching Station Owners Interconnection Facilities. Interconnection Service
shall be provided under this Agreement, only with respect to the Conemaugh
Station, and any addition to (including additional units at the site of the
Comemaugh Station), upgrade of, or repowering of the Conemaugh Station,
installed in accordance with the terms of this Agreement.

          3.1.2  The Switching Station Owners shall provide Interconnection
Service at the Points of Interconnection specified in Schedule A.

          3.1.3  The Switching Station Owners shall not be responsible for (a)
making arrangements under the applicable tariffs for transmission, losses or
ancillary services associated with the use of the Transmission System for the
delivery of capacity and/or energy produced by

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the Conemaugh Station, which services shall not be provided under this
Agreement, (b) obtaining capacity and/or energy to satisfy station service for
the Conemaugh Station, or other requirements, or (c) making arrangements under
the applicable tariffs for transmission, losses, or ancillary services
associated with the use of the Transmission System for the delivery of capacity
and energy to the Conemaugh Station for the purpose of supplying station
service or for any other use by the Generating Station Owners, which services
shall not be provided under this Agreement. The Switching Station Owners shall
reasonably cooperate with Generating Station Owners with respect to such
arrangements.

          3.1.4  The Switching Station Owners do not guarantee the
non-occurrence of, or warrant against, and the Generating Station Owners
release the Switching Station Owners from any and all claims or damages
associated with: (a) any interruption in the availability of the Switching
Station Owners Interconnection Facilities; or (b) damage to the Generating
Station Owners' Facilities resulting from electrical transients, including,
without limitation, short circuits (faults), or events of force majeure as
defined in Article 11, except to the extent such interruption or damage is
caused by the Switching Station Owners' gross negligence or willful misconduct
in performance of their obligations under this Agreement.

          3.1.5  The Generating Station Owners do not guarantee the
non-occurrence of or warrant against, and the Switching Station Owners release
the Generating Station Owners from any claims or damages associated with: (a)
any interruption in the availability of the Generating Station Owners'
Facilities, (b) any discontinuation, curtailment, interruption or reduction of
energy delivered from the Conemaugh Station; or (c) damage to the Switching
Station Owners Facilities resulting from electrical transients, including,
without limitation, short circuits (faults), or events of force majeure as
defined in Article 11, except to the extent such discontinuation, curtailment,
interruption, reduction or damage is caused by the Generating Station Owners'
gross negligence or willful misconduct in performance of their obligations
under this Agreement or their operation of the Conemaugh Station.

          3.1.6  The Switching Station Owners shall use reasonable efforts to
restore the Switching Station Owners Interconnection Facilities to service as
promptly as practicable.

     3.2  Access, Easements, Conveyances, Licenses, and Restrictions.

          3.2.1  General. Points of Interconnection, and certain operating
procedures and practices for the Switching Station Owners Interconnection
Facilities, are set forth in Schedule A to this Agreement. The Switching
Station Owners and the Generating Station Owners hereby grant to each other
such licenses, access and other rights (i) regarding the Generating Station
Owners' Facilities and the Switching Station Owners' Facilities as may be
necessary for either Party's performance of their respective obligations under
this Agreement, including but not limited to the operation and maintenance of
their respective facilities, and (ii) as may be required by the Switching
Station Owners for the operation and maintenance of their transmission
facilities located at the Conemaugh Station. The Switching Station Owners and
the Generating Station Owners agree to work diligently and in good faith in
order to prepare an Easement Agreement that fully memorializes in further
detail such easements, access and other rights granted hereunder, with the goal
of finalizing said document prior to April 1, 2000. In the event such Easement
Agreement is not finalized on or prior to April 1, 2000, the Parties shall
proceed toward final resolution of an Easement


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Agreement in accordance with the alternate dispute resolution procedures set
forth in Section 12.1 of the Agreement. Said Easement Agreement shall be the
exclusive statement between and among each and all of the Switching Station
Owners and all of the Generating Station Owners as to the easements, access and
other similar real property rights between and among themselves with respect
to the Conemaugh Station.

          3.2.2  In the event the Generating Station Owners fail to provide to
the Switching Station Owners the local services required hereunder to be
provided to the Switching Station Owners, the Switching Station Owners shall
have the right to operate the equipment and systems of the Generating Station
Owners, to the limited extent necessary to provide such local services to the
Switching Station Owners, provided, however, that the Switching Station Owners
may not operate any of the Generating Station Owners' Facilities used for the
generation of electricity. The Generating Station Owners shall grant the
Switching Station Owners such access to their property as may be required for
the Switching Station Owners to operate such equipment and systems under the
foregoing circumstances.

The Switching Station Owners shall give the Generating Station Owners or the
Generating Station Owners' assignee, successor or transferee written notice,
pursuant to Article 19, of their intent to implement their rights to operate the
Generating Station Owners' equipment and systems prior to their exercise of
their rights set forth in this Section 3.2.2 and allow the Generating Station
Owners reasonable time under the circumstances to correct any failure on the
Generating Station Owners' part to provide the required local services.

          3.2.3  The Switching Station Owners shall return operational control
of such facilities to the Generating Station Owners as soon as practicable
after the event permitting the Switching Station Owners to exercise such
operational control has ceased. The Switching Station Owners shall operate
such facilities in accordance with applicable law, PJM requirements and Good
Utility Practice and return them in the same condition as existed when they
were taken over.

     3.3 Facility and Equipment Maintenance.

          3.3.1  The Switching Station Owners shall provide Interconnection
Service in a safe and efficient manner and pursuant to applicable law, PJM
requirements and Good Utility Practice. The Generation Station Owners shall pay
the Switching Station Owners for the costs they incur to Maintain the Switching
Station Facilities installed pursuant to Section 3.4. The Generating Station
Owners shall Maintain the Generating Station Owners' Facilities at the
Conemaugh Station in a safe and efficient manner, as required by and in
accordance with applicable law, PJM requirements and Good Utility Practice,
provided, however, that the Generating Station Owners shall not be obligated to
modernize, expand or upgrade the Generating Station Owners' Facilities unless
the failure to modernize, expand or upgrade is reasonably likely to have an
material adverse impact on the operation of the Switching Station Owners
Facilities. The Generating Station Owners shall keep all common-use roadways
and plant accesses in or about the Conemaugh Station in substantially the same
condition as exists on the date of this Agreement.

                                       9
<PAGE>   14
     3.3.2  Equipment Testing Obligations.

          3.3.2.1  The Switching Station Owners may reasonably request,
pursuant to applicable law, PJM requirements and Good Utility Practice, that
the Generating Station Owners test, calibrate, verify, or validate the
Generating Station Owners' Facilities, and the Generating Station Owners shall
promptly comply with such a request. The Generating Station Owners shall be
responsible for all costs of testing, calibrating, verifying or validating the
Generating Station Owners' Facilities.

          3.3.2.2  Pursuant to the foregoing Section 3.3.2.1, the Generating
Station Owners shall supply the Switching Station Owners, at the Switching
Station Owners' request and at no cost to the Switching Station Owners, copies
of inspection reports, installation and maintenance documents, test and
calibration records, verifications, and validations related to the Generating
Station Owners' Facilities. The Switching Station Owners shall supply to the
Generating Station Owners, at the Generating Station Owners' request and at no
cost to the Generating Station Owners, copies of inspection reports,
installation and maintenance documents, test and calibration records,
verifications, and validations related to the Switching Station Owners
Interconnection Facilities.

     3.4  New Construction or Modifications.

          3.4.1  The Switching Station Owners shall make such additions,
modifications, replacements and improvements to the Switching Station Owners
Interconnection Facilities as are required by law, regulation, the PJM Tariff,
the PJM Agreement or Good Utility Practice to enable the Switching Station
Owners to provide Interconnection Service in compliance with this Agreement. The
Generating Station Owners shall pay the cost of such additions, modifications,
replacements or improvements, including without limitation, any tax liability,
costs of acquiring real property and costs and fees for permits franchises,
licenses and regulatory and other approvals, except to the extent that such
costs are allocated to a party or parties other than the Generating Station
Owners by PJM Interconnection, L.L.C. or otherwise under the PJM Tariff or PJM
Agreement. Except as required under Section 3.4.6, the Switching Station Owners
shall pay the cost of any other additions, modifications, replacements or
improvements made to the Switching Station Owners' Interconnection Facilities.

          3.4.2  If any additions, modifications, replacements or improvements
undertaken by the Switching Station Owners might reasonably be expected to
affect the Generating Station Owners' operation of the Conemaugh Station, the
Switching Station Owners shall provide one hundred twenty (120) days written
notice to the Generating Station Owners in a manner consistent with FERC Order
No. 889 (18 C.F.R. Part 37) prior to undertaking such additions, modification,
replacements or improvements. Any such additions, modifications, replacements or
improvements shall comply with applicable law, PJM requirements and Good Utility
Practice. The Switching Station Owners and the Generating Station Owners shall
mutually agree to the scheduling of such addition, modification, replacement or
improvement to minimize any adverse impact on the Conemaugh Station. The
Generating Station Owners shall be deemed to have accepted the Switching Station
Owners' proposed additions, modifications, replacements or improvements unless
the Generating Station Owners give the Switching Station Owners written notice
of their objections within thirty (30) days after receipt of the Switching
Station Owners' notice. The Generating Station Owners' acceptance or deemed
acceptance of the Switching

                                       10
<PAGE>   15
Station Owners' proposed additions, modifications, replacements or improvements
shall not be construed, with respect thereto, as: (a) confirmation or
endorsement of the design; (b) a warranty of safety, durability or reliability;
or (c) responsibility for strength, details of design, adequacy or capability.

          3.4.3  In the event the Generating Station Owners plan to increase
the capacity of the Generating Station Owners' Facilities, the Generating
Station Owners shall submit to the Switching Station Owners and all plans
and specifications that the Switching Station Owners may reasonably request
related to such increase. Such specifications and plans shall be submitted by
the Generating Station Owners to the Switching Station Owners not later than
twenty-four (24) months prior to the respective commercial operation date for
additions, modifications, or replacements to the Generating Station Owners'
Facilities that will result in such increase, except as otherwise agreed to by
the Switching Station Owners. Any such additions, modification, or replacements
shall comply with applicable law, PJM requirements and Good Utility Practice.

          3.4.4  If the Generating Station Owners plan any additions,
modifications, or replacements to the Generating Station Owners' Facilities
that will not increase its capacity, but could reasonably be expected to affect
the Transmission System or the Switching Owners Interconnection Facilities, the
Generating Station Owners shall give the Switching Station Owners reasonable
notice, but not less than 120 days' prior written notice. All such additions,
modifications, or replacements shall (i) comply with applicable law and Good
Utility Practice, (ii) be accompanied by appropriate information and operating
instructions, and (iii) be subject to the review and acceptance of the
Switching Station Owners, which review shall be based on applicable law and
Good Utility Practice and which acceptance shall not unreasonably be withheld.
The Switching Station Owners shall be deemed to have accepted the Generating
Station Owners' proposed additions, modifications or replacements unless the
Switching Station Owners give the Generating Station Owners written notice of
their objections within thirty (30) days after receipt of the Generating
Station Owners' notice.

          3.4.5  The Switching Station Owners' acceptance of the Generating
Station Owners' interconnection plans and specifications for any proposed
additions, modifications, or replacements to the Generating Station Owners'
Facilities and the Switching Station Owners participation in interconnected
operations with the Generating Station Owners are not and shall not be
construed as: (a) confirmation or endorsement of the design of the
Generating Station Owners' Facilities; (b) a warranty of safety, durability or
reliability of the Generating Station Owners' Facilities; or (c) responsibility
for strength, details of design, adequacy, or capability of the Generating
Station Owners' Facilities.

          3.4.6  The Switching Station Owners shall inform the Generating
Station Owners of any additions, modifications, or replacements to the
Transmission System or the Switching Station Owners Interconnection Facilities,
that are necessary as a result of the addition, modification, or replacement to
the Generating Station Owners' Facilities made pursuant to Sections 3.4.3 or
3.4.4. The Generating Station Owners shall compensate the Switching Station
Owners for all reasonable costs associated with any modifications, additions, or
replacements made to the Switching Station Owners Interconnection Facilities or
Transmission System related to any additions, modifications, or replacements to
the Generating Station Owners' Facilities, except to the extent that such costs
are allocated to a party or parties other than the Generating Station Owners by
PJM Interconnection, L.L.C. or otherwise under the


                                       11
<PAGE>   16

PJM Tariff or PJM Agreement. The Switching Station Owners shall provide an
estimate as early as practicable, but in any event not less than sixty (60)
days prior to the initiation of such addition, modification or replacement.

          3.4.7  The Generating Station Owners shall modify, at their sole cost
and expense, the Generating Station Owners' Facilities as may be reasonably
required to conform with changes to applicable law, PJM requirements and Good
Utility Practice or to conform with additions, modifications, or replacements
of the Transmission System or the Switching Station Owners Interconnection
Facilities, reasonably required by applicable law, PJM requirements and Good
Utility Practice or implemented in accordance with this Agreement, (including,
without limitation, changes to the voltages at which the Transmission System is
operated) provided, however, that the Generation Station Owners shall not be
obligated under this Agreement to modernize, expand or upgrade the Generation
Station Owners' Facilities unless the failure to modernize, expand or upgrade
is reasonably likely to have an material adverse impact on the operation of the
Switching Station Owners' Facilities.

          3.4.8  Upon completion of any addition, modification, or replacement
to the Generating Station Owners' Facilities that may reasonably be expected to
affect the Transmission System or the Switching Station Owners Interconnection
Facilities, but no later than ninety (90) days thereafter, the Generating
Station Owners shall issue "as built" drawings to the Switching Station Owners.
Upon completion of any addition, modification, or replacement to the
Transmission System or the Switching Station Owners Interconnection Facilities,
that may reasonably be expected to affect the operation of the Generating
Station Owners' Facilities, but no later than ninety (90) days thereafter, the
Switching Station Owners shall issue "as built" drawings to the Generating
Station Owners.

     3.5  Inspections.

          3.5.1  The Switching Station Owners shall, at their own expense, have
the right to inspect or observe all maintenance activities, equipment tests,
installation work, construction work, and modification work to the Generating
Station Owners' Facilities. If the Switching Station Owners observes any
deficiencies or defects with respect thereto that might reasonably be expected
to adversely affect the Transmission System or the Switching Station Owners
Interconnection Facilities, the Switching Station Owners shall notify the
Generating Station Owners, and the Generating Station Owners shall make
immediately any corrections necessitated by applicable law and Good Utility
Practice.

          3.5.2  The Generating Station Owners shall at their own expense, have
the right to inspect or observe all maintenance activities, equipment tests,
installation work, construction work, and modification work to the Switching
Station Owners Interconnection Facilities. If the Generating Station Owners
observe any deficiencies or defects with respect thereto that might reasonably
be expected to adversely affect the Conemaugh Station, the Generating Station
Owners shall notify the Switching Station Owners, and the Switching Station
Owners shall make immediately any corrections necessitated by applicable law,
PJM requirements and Good Utility Practice.


                                       12

<PAGE>   17
     3.5.3  Joint Use Facilities.

          3.5.3.1  Joint Use Facilities are identified in Schedule A to this
Agreement. The Party owning such Joint Use Facilities shall Maintain those
facilities pursuant to applicable law and Good Utility Practice and shall make
such additions, modifications, replacements and improvements as are required by
applicable law and Good Utility Practice or which are necessary to maintain
Interconnection Service provided, however, that the Generation Station Owners
shall not be obligated under the Agreement to modernize, expand or upgrade the
Generation Station Owners' Facilities unless the failure to modernize, expand
or upgrade is reasonably likely to have an material adverse impact on the
operation of the Switching Station Owners' Facilities. Each Party agrees to
perform joint inspections of the Joint Use Facilities one year from the
Effective Date, and annually thereafter, or as otherwise mutually agreed upon.
The Switching Station Owners and the Generating Station Owners shall bear their
respective costs of participating in such inspections.

          3.5.3.2  The Party owning such Joint Use Facilities shall provide to
the other Party copies of the written reports, summarizing such inspections and
describing any problems, deficiencies, or other observed defects. Unless the
Parties agree that an alternative to such correction is preferable, the Party
owning such Joint Use Facilities shall be responsible for correcting any noted
deficiencies within sixty (60) days from the date of the inspection or within
such other period mutually agreeable between the Parties. The Party owning such
Joint Use Facilities shall bear the costs of such corrections.

     3.6  Information Reporting Obligations.

          3.6.1  In order to maintain Interconnection Service, the Switching
Station Owners may request, and the Generating Station Owners shall provide,
all relevant information, documents, or data regarding the Conemaugh Station
that would be expected to affect the Transmission System, and which is
reasonably requested by NERC, MAAC, PJM Interconnection, L.L.C., the PAPUC, any
other state or District of Columbia agency having jurisdiction over the
Switching Station Owners or the Generating Station Owners or any one or more of
them, the PJM System Operator, or the Transmission Operator, which disclosure
shall be subject to reasonable restrictions, acceptable to the Switching
Station Owners and the Generating Station Owners, regarding the disclosure of
commercially sensitive information provided by the Generating Station Owners.

          3.6.2  The Generating Station Owners shall supply accurate, complete,
and reliable information necessary for operations, maintenance, compliance with
regulatory requirements, and analysis of the Transmission System which is
reasonably requested by NERC, MAAC, PJM Interconnection, L.L.C., the PAPUC, any
other state or District of Columbia agency having jurisdiction over the
Switching Station Owners or the Generating Station Owners or any one or more of
them, the PJM System Operator, or the Transmission Operator, which disclosure
shall be subject to reasonable restrictions, acceptable to the Switching
Station Owners and the Generating Station Owners, regarding the disclosure of
commercially sensitive information provided by the Generating Station Owners.
Such information may include metered values for MW and MVAR, voltage, current,
amperage, automatic voltage regulator status, automatic frequency control,
dispatch, frequency, breaker status indication, or any other information
reasonably required for reliable operation of the Transmission System pursuant
to

                                       13

<PAGE>   18
applicable law, PJM requirements and Good Utility Practice.

          3.6.3  Information pertaining to generation operating parameters
shall be gathered for electronic transmittal to the Switching Station Owners and
provided to the Switching Station Owners Remote Terminal Units (RTUs) in
accordance with Schedule A.

          3.6.4  The Generating Station Owners shall be responsible for the
maintenance, and any required replacements or upgrades of the field devices and
equipment used to gather information regarding generation operating parameters.

          3.6.5  The Generating Station Owners shall Maintain, at their own
expense, operating telephone links to PJM Interconnection, L.L.C., PJM System
Operator, or Transmission Operator, to provide information deemed necessary by
them, or as reasonably deemed necessary by the Switching Station Owners in
accordance with applicable law or Good Utility Practice to integrate operation
of the Conemaugh Station with the Transmission System provided, however, that
the Generation Station Owners shall not be obligated under this Agreement to
modernize, expand or upgrade the Generation Station Owners' Facilities unless
the failure to modernize, expand or upgrade is reasonably likely to have an
material adverse impact on the operation of the Transmission System.

     3.7  Local Services.

          3.7.1  General.  The Switching Station Owners and the Generating
Station Owners agree that, due to the integration of certain control schemes,
Revenue Metering applications, and communication networks, it is cost effective
for them to provide each other with the services set forth in Sections 3.8 and
3.9.

                 3.7.1.1  The Switching Station Owners and the Generating
Station Owners shall use their best efforts to ensure that services provided
shall be available at all times and in the manner specified herein.
Notwithstanding the foregoing, either Party may change such services, provided
that (a) there is no cost increase to the receiving Party as a result of such
change, (b) the quality, reliability, and integrity of the replacement services
are equivalent to the services replaced, and (c) there is otherwise no
materially adverse effect on the receiving Party.

                 3.7.1.2  Neither the Switching Station Owners nor the
Generating Station Owners shall terminate any services without the other Party's
written consent, which consent shall not be unreasonably withheld, or without at
least twelve (12) months' prior written notification; provided, however, that if
either Party no longer needs or desires a particular service provided, that
Party shall notify the other Party, and the providing Party shall terminate that
service as soon thereafter as practicable. Notwithstanding the foregoing,
neither Party may terminate any service, without the prior written consent of
the other Party, which is deemed a part of Interconnection Service or which is
necessary or useful to connect the Conemaugh Station to the Transmission System.

          3.7.2  Temporary Suspension of Services. The Party providing the
services shall notify and obtain approval, which approval shall not be
unreasonably withheld, from the affected Party of any scheduled temporary
suspension of services at least five (5) working days in advance of such
suspension. Such notification shall include estimated time duration for a return

                                       14
<PAGE>   19
to normal conditions. The Party temporarily suspending the service shall use
reasonable efforts to minimize the duration of the suspension.

                 3.7.2.1  In the event of any unplanned or forced suspension of
the services, the Party providing the service shall immediately notify the other
Party first verbally and then in writing in accordance with Article 19. The
providing Party shall use all reasonable efforts to minimize the duration of
that suspension.

                 3.7.2.2  The Switching Station Owners and the Generating
Station Owners agree to use all reasonable efforts to complete any repairs,
modifications, or corrections that are necessary to restore to the other Party
as soon as reasonably practicable, any services that have been suspended.

     3.8  Switching Station Owners Provided Local Services.

          3.8.1  Local services to be provided by the Switching Station Owners
shall include those as defined in Schedule A and below. The costs which the
Switching Station Owners may recover from the Generating Station Owners in
connection with the local services provided under Section 3.8.4 shall be equal
to the direct costs incurred by the Switching Station Owners to provide such
services, plus a reasonable proportion of the Switching Station Owners' overhead
attributable to such services.

          3.8.2  Building Services.  At no cost to the Generating Station
Owners, the Switching Station Owners shall provide building space including
heating, ventilation, air conditioning, lighting, and other building services,
as and to the extent provided immediately prior to the Effective Date, to the
Generating Station Owners' Facilities located within the Switching Station
Owners Facilities.

          3.8.3  Substation Security.  The Switching Station Owners shall
provide, at no charge, for common use by all Parties, an intrusion alarm system
for the substation control building, as in existence at the Conemaugh Station
immediately prior to the Effective Date.

          3.8.4  Revenue Metering.  The Switching Station Owners shall, at
Generating Station Owners' expense: (a) own and Maintain, and have the right to
change the location of all Revenue Meters, instrument transformers and
appurtenances associated with Revenue Meters, and analog equipment (transducers
and telemetry), (b) conduct meter accuracy and tolerance tests, and (c) prepare
all calibration reports required for equipment that measures energy transfers at
the Point of Interconnection. All meter accuracy and tolerance testing hereunder
shall be in accordance with applicable law, PJM requirements and Good Utility
Practice and shall be conducted, at the Generating Station Owners' request, in
the presence of a Generating Station Owners' representative.

                 3.8.4.1  The Switching Station Owners and the Generating
Station Owners agree that, if the Revenue Meters and analog equipment and the
Point of Interconnection are not at the same location electrically, the metering
data shall be adjusted, or the Revenue Meters shall be compensated, as mutually
deemed appropriate, to record delivery of electricity in a manner that accounts
for the total (load plus no-load) electrical energy losses occurring between the

                                       15
<PAGE>   20

metering point and the Point of Interconnection when the Conemaugh Station is
delivering energy to the Switching Station Owners, which adjustment shall be
pursuant to the methodology set forth Schedule A.

                 3.8.4.2  If at any time any Revenue Metering and analog
equipment is found to be inaccurate by a margin of greater than that allowed
under the applicable criteria and applicable law, PJM requirements and Good
Utility Practice, such Revenue Metering and analog equipment shall be made
accurate or replaced at the Generating Station Owners' expense. Meter readings
for the period of inaccuracy shall be adjusted insofar as the extent of the
inaccuracy can be reasonably ascertained; provided, however, no adjustment
shall be made for meter readings made prior to the point in time halfway
between the time of the last test that showed the Revenue Metering and analog
equipment in question to be functioning accurately and the time the subsequent
inaccuracy is corrected, except by agreement of the Parties. Each Party shall
comply with any reasonable request of the other concerning the sealing of
Revenue Meters, the presence of a representative of the other Party when the
seals are broken and the tests are made, and other matters affecting the
accuracy of the measurement of electricity delivery from or to the Conemaugh
Station. If either Party believes that there has been a Revenue Meter or
analog equipment failure or stoppage, it shall immediately notify the other
Party thereof.

                 3.8.4.3  The Parties shall each keep and maintain accurate and
detailed records relating to the delivery of energy for a period of not less
than seven (7) years. Such records shall be made available for inspection by
the other Party or any governmental agency having jurisdiction with respect
thereto during normal business hours upon reasonable notice.

                 3.8.4.4  The Switching Station Owners shall own and Maintain,
at the Generating Station Owners' expense, all additional or updated metering
and associated equipment needed in the reasonable discretion of the Switching
Owners exercised in accordance with applicable law and Good Utility Practice.


                 3.8.4.5  The Switching Station Owners shall own and Maintain,
at the Generating Station Owners' expense, equipment for real-time
communications and transmission of real-time reactive power, hourly MWh
information, and such other information as required by the PJM System Operator,
or Transmission Operator, or as reasonably required by the Switching Station
Owners in accordance with applicable law and Good Utility Practice.

          3.8.5  Other Equipment.  Except as set forth in Sections 3.84,
3.8.4.4, 3.8.4.5 and Article 5 hereafter, the Switching Station Owners shall
pay all costs to acquire, operate and Maintain the Switching Station Owners
Interconnection Facilities and any transformers and other equipment and
facilities owned or controlled by the Switching Station Owners which are
necessary or useful to provide Interconnection Service.

     3.9  Generating Station Owners Provided Local Services.

          3.9.1  Local services to be provided by the Generating Station Owners
shall include those as defined in Schedule A and below. Notwithstanding
anything in this Agreement to the contrary, to the extent that any local
services set forth in Schedule A or Section 3.9 requires the delivery of
electric energy to the Switching Station Owners (including Section 3.9.2 and
Section 5.1.1 of Schedule A), each of the Generating Station Owners may assign
such

                                       16
<PAGE>   21
energy delivery obligations to another party and the Switching Station Owners
shall accept such energy from the party designated by such Generating Station
Owner, provided however, that (i) such Generator Station Owner shall remain
liable for any failure of such other party to perform such assigned obligations,
and (ii) the Generating Station Owner and such party designated by the
Generating Station Owner shall be obligated to obtain all regulatory approvals
required to provide such services.

          3.9.2  Building Services.  At no cost to the Switching Station
Owners, the Generating Station Owners shall provide the Switching Station Owners
Facilities located within the Conemaugh Station with building services including
heating, ventilation, air-conditioning, lighting, and other building services as
and to the extent provided prior to the Effective Date.

          3.9.3  Meter Data.  At no cost to, and if requested by the Switching
Station Owners, the Generating Station Owners shall provide the Switching
Station Owners with meter data at locations that require a manual read that will
be set forth in Schedule A to this Agreement if necessary.

          3.9.4  Storage and Office Space.  The Generating Station Owners shall
provide to the Switching Station Owners, at no cost to the Switching Station
Owners, the use of storage areas and building spaces for spare parts and
administrative uses related to the Switching Station Owners Interconnection
Facilities at the locations in place immediately prior to the Effective Date.

     3.10  Spare Parts.

          3.10.1  Where practicable and available, and subject to Good Utility
Practice and applicable regulatory and other approvals, the Switching Station
Owners and the Generating Station Owners shall provide the other Party with
spare parts in the event of Emergencies or equipment failures. The Parties shall
mutually agree upon payment for, or replacement of, such spare parts. Payments
shall be based upon current replacement cost.

     3.11  Emergency Procedure.

          3.11.1  The Switching Station Owners, through the Transmission
Operator, shall provide the Generating Station Owners with prompt verbal
notification of Emergencies affecting the Transmission System that may
reasonably be expected to affect the Generating Station Owners' operation of the
Conemaugh Station or the Generating Station Owners' Joint Use Facilities, and
the Generating Station Owners shall provide the Switching Station Owners through
the Transmission Operator, prompt verbal notification of any Emergency which
might reasonably be expected to affect the Switching Station Owners operations.
Such notification shall describe the Emergency, the extent of the damage or
deficiency, the anticipated length of the outage, and the corrective action
taken and/or to be taken, and shall be followed as soon as practicable with
written notification in accordance with Article 19.

          3.11.2  If in the good faith judgment of a Party, an Emergency
endangers or might endanger life or property, the Party recognizing the problem
shall take such action as is reasonable and necessary to prevent, avoid, or
mitigate injury, danger, and loss. If, however, the Emergency involves
transmission or distribution electrical equipment, the Generating Station

                                       17
<PAGE>   22
Owners shall notify the Transmission Operator, and shall obtain the consent of
such personnel, prior to performing any switching operations.

          3.11.3  The Switching Station Owners may have the Transmission
Operator take whatever action or inaction is necessary during Emergency
operating conditions consistent with applicable law, PJM requirements and Good
Utility Practice to (a) preserve public safety, (b) preserve the integrity of
the Transmission System, (c) limit or prevent damage, and (d) expedite
restoration of service. If any action or inaction by the Switching Station
Owners or the Transmission Operator under this Section 3.11 results in the
discontinuation, curtailment, interruption or reduction of energy delivery from
the Conemaugh Station to restore the Transmission System, the Switching Station
Owners shall use reasonable efforts to restore Interconnection Service as
promptly as practicable and to minimize the effect of such restoration of
service on the Conemaugh Station.

     3.12 Interconnection Service Interruptions.

          3.12.1  If at any time, in the reasonable exercise of the
Transmission Operator's judgment or the Switching Station Owners' reasonable
judgment exercised in accordance with applicable law, PJM requirements and Good
Utility Practice and on a non-discriminatory basis, the operation of the
Generating Station Owners' Facilities would have an adverse impact on the
quality of service rendered by the Switching Station Owners (including
transmission or distribution services and services provided to end users), or
interfere with the safe and reliable operation of, the Transmission System, the
Switching Station Owners may discontinue Interconnection Service and/or
curtail, interrupt or reduce energy delivered from the Conemaugh Station, until
the condition has been corrected.

          3.12.2  Unless the Transmission Operator, or the Switching Station
Owners, perceive that an Emergency exists or that the risk of one is imminent,
the Switching Station Owners shall give the Generating Station Owners
reasonable notice of their intention to discontinue, curtail, interrupt or
reduce energy delivery in response to the interfering condition and, where
practical, allow suitable time for the Generating Station Owners to remove the
interfering condition before any such discontinuation, curtailment,
interruption or reduction commences. The Switching Station Owners' judgment
with regard to any discontinuation, curtailment, interruption or reduction of
service under this Section 3.12.2 shall be made pursuant to applicable law, PJM
requirements and Good Utility Practice.

          3.12.3  In the event of any discontinuation, curtailment,
interruption or reduction the Switching Station Owners shall promptly confer
with the Generating Station Owners regarding the interfering conditions that
gave rise to the discontinuation, curtailment, interruption or reduction and
the Switching Station Owners shall give recommendations to the Generating
Station Owners concerning the timely correction thereof.

          3.12.4  The Switching Station Owners shall use reasonable efforts
to restore Interconnection Service as promptly as practicable, or, if
applicable, cease the curtailment, interruption or reduction of energy delivery
upon notification by the System Operator or PJM Interconnection, L.L.C., as
applicable, that the interfering condition no longer exists.


                                       18

<PAGE>   23
     3.13 Non-Availability Notification

          3.13.1  If the Generating Station Owners anticipate that any
generating unit, or units, at the Conemaugh Station will not be available, the
Generating Station Owners shall notify the Transmission Operator with as much
lead time as practicable, normally no less than seventy-two (72) hours in
advance of the expected date on which the Generating Station Owners plan to
take any of the generating units at the Conemaugh Station off-line, and the
Generating Station Owners shall give the Transmission Operator notice with as
much lead time as practicable of the expected date and time at which generation
will be resumed.

          3.13.2  In the event of an unplanned outage of the Conemaugh Station,
the Generating Station Owners, as soon as practicable, shall notify the
Transmission Operator of the Conemaugh Station's temporary interruption of
generation and the Generating Station Owners shall provide the Transmission
Operator, as soon as practicable, with notice of the date on which generation is
expected to resume at the Conemaugh Station.

     3.14 Scheduled Maintenance Notification and Coordination

          3.14.1  Local Routine Inspection and Maintenance.  The Switching
Station Owners and the Generating Station Owners agree that, due to the
integration of certain control and protective relaying schemes between the
Generating Station Owners' Facilities and the Switching Station Owners
Interconnection Facilities, it will be necessary for them to cooperate in the
inspection, maintenance and testing of these areas of integration. Each Party
will provide advance notice to the other Party before undertaking any work in
these areas, especially in electrical circuits involving circuit breaker trip
and close contacts, current transformers or potential transformers.

          3.14.2  Switching Station Maintenance.  Subject to applicable FERC
regulations and policy, and PJM requirements, the Switching Station Owners
shall, as soon as practicable, give written notice to the Generating Station
Owners regarding the timing of any scheduled maintenance of the Switching
Station Owners Facilities which might reasonably be expected to affect the
operation of the Conemaugh Station. The Switching Station Owners shall, to the
extent practicable, schedule any testing, shutdown, or withdrawal of the
Switching Station Owners Facilities to coincide with the Generating Station
Owners' scheduled outages. To facilitate such notification, in June of each
year, or on another date mutually acceptable to the Parties, the Generating
Station Owners shall furnish the Switching Station Owners with non-binding
preliminary maintenance schedules for the Conemaugh Station covering the
upcoming two years. The Generating Station Owners shall furnish the Switching
Station Owners with non-binding updates to such schedules to reflect
significant changes thereto. In the event the Switching Station Owners are
unable to schedule the outage of their facilities to coincide with the
Generating Station Owners' schedule, the Switching Station Owners shall notify
the Generating Station Owners as soon as practicable of the reasons for the
facilities' outage, of the time scheduled for the outage to take place, and of
its expected duration. The Generating Station Owners shall give notice to the
Switching Station Owners regarding any scheduled maintenance of the Generating
Station Owners' Facilities which might reasonably be expected to affect the
operation of the Switching Station Owners Interconnection Facilities or the
Transmission System.


                                       19

<PAGE>   24

     3.15  Safety.

          3.15.1  General.  The Switching Station Owners agree with respect to
the Switching Station Owners Interconnection Facilities, and the Generating
Station Owners agree, with respect to the Generating Station Owners'
Facilities, that all work performed by either Party on such Facilities which
might reasonably be expected to affect the operations of the other Party shall
be performed in accordance with all applicable laws, rules, and regulations
pertaining to the safety of persons or property, and Good Utility Practice.

          3.15.2  Switching and Tagging.  The Switching Station Owners and the
Generating Station Owners shall apply and comply with their respective
Switching and Tagging Rules and either Party will accept tagging performed by
the other party as outlined in this Section 3.15.

                 3.15.2.1  Except for the Joint Use Facilities, the Generating
Station Owners shall be responsible for all switching and tagging on the
Generating Station Owners side of the Points of Interconnection, as such points
are set forth in Schedule A to this Agreement. The Switching Station Owners
shall be responsible for all switching and tagging on the Switching Station
Owners side of the Points of Interconnection. The Parties owning the equipment
at the Points of Interconnection shall be responsible for its switching and
tagging. Switching and tagging requests from one Party to the other Party shall
be executed in a timely manner.

                 3.15.2.2  For switching and tagging involving the Joint Use
Facilities identified in Schedule A, the Party requiring the switching and
tagging will switch and tag under its Switching and Tagging Rules. Prior to
either Party operating the Joint Use Facilities, they will communicate their
intentions to the Transmission Operator and the appropriate station operating
authority. The Switching Station Owners and the Generating Station Owners shall
be responsible for training and testing their respective operators for
inclusion on a Joint Tag List. Either as changes occur or annually, each Party
shall provide the other Party with an updated list of its employees qualified
for inclusion on the Joint Tag List.

     3.16  Environmental Compliance and Procedures.

          3.16.1  Each Party shall notify the other Party first verbally and
then in writing, of any Release of Hazardous Substances and any type of
remediation activities that could adversely affect the other Party's facilities
or property or the employees of such other Party or such other Party's
contractors, as soon as possible but no later than twenty-four (24) hours of
occurrence, and shall promptly furnish to the other Party copies of any reports
filed with any governmental agencies covering such events.


                                   ARTICLE 4
                                   OPERATIONS

4.0  Operations.

     4.1  General.  The Switching Station Owners, with respect to the Switching
Station Owners Interconnection Facilities, and the Generating Station Owners,
with respect to the


                                       20

<PAGE>   25
Generating Station Owners' Facilities, shall operate such equipment that might
reasonably be expected to have an impact on the operations of the other Party in
a safe and efficient manner and in accordance with all applicable Federal,
state, and local laws, and Good Utility Practice, and otherwise in accordance
with the terms of this Agreement.

          4.1.1  The Generating Station Owners shall comply with the requests,
orders, and directives of the Switching Station Owners with respect to
Interconnection Service to the extent such requests, orders or directives are
(a) issued pursuant to applicable law, PJM requirements and Good Utility
Practice, (b) not discriminatory; and (c) otherwise in accordance with
applicable tariffs.

          4.1.2  In the event the Generating Station Owners believe that a
request, order, or directive of the Switching Station Owners exceeds the
limitations in Section 4.1.1, they shall nevertheless comply with the request,
order, or directive of the Switching Station Owners pending resolution of the
dispute under Article 12. The Parties agree to cooperate in good faith to
expedite the resolution of any disputes arising under this Section 4.1.

          4.1.3  Neither the Generating Station Owners nor the Switching
Station Owners shall discontinue the performance of their respective obligations
under this Agreement due to any failure of the other Party to perform its
obligations under this Section 4.1 during the pendency of any dispute regarding
such failure and until such dispute is finally resolved. For purposes of the
preceding sentence, this Agreement shall be considered to be in effect,
notwithstanding any termination or purported termination hereof by a Party as a
result of any failure of the other Party to perform its obligations under this
Section 4.1 which is the subject of an unresolved dispute.

     4.2  Generating Station Owners' Operating Obligations.

          4.2.1  General.  The Generating Station Owners shall request
permission from the Switching Station Owners, the Transmission Operator, the
System Operator or PJM Interconnection, L.L.C., as applicable, prior to opening
and/or closing circuit breakers in accordance with applicable switching and
operations procedures.

                 4.2.1.1  The Generating Station Owners shall carry out all
switching orders from the Transmission Operator in a timely manner.

                 4.2.1.2  The Generating Station Owners shall keep the
Switching Station Owners advised of the Conemaugh Station's capabilities of
participation in system restoration and/or its black start capability and
adhere to the Transmission Operator's system restoration plan, as amended from
time to time.

                 4.2.1.3  The Generating Station Owners' equipment shall
conform to industry standards for harmonic distortion and voltage fluctuation.

                 4.2.1.4  The Generating Station Owners shall comply with the
GPU Transmission Operations Interconnection Requirements and System Protection
and Control Interconnection Requirements, as amended from time to time, and with
related Switching Station

                                       21
<PAGE>   26
Owners' directives issued as directed or authorized by PJM Interconnection
L.L.C.

          4.2.2  Voltage or Reactive Control Requirements. Unless otherwise
agreed to by the Parties or authorized or directed by PJM Interconnection,
L.L.C., the Generating Station Owners shall operate the Conemaugh Station with
automatic voltage regulation equipment in service at all times. When in
service, such voltage regulation equipment shall control voltage at the Points
of Interconnection consistent with the range of voltages as prescribed by the
Transmission Operator pursuant to applicable law, PJM requirements and Good
Utility Practice. From time to time, to the extent authorized or directed by
PJM Interconnection, L.L.C., the Transmission Operator may require the
Generating Station Owners to provide reactive power from the Conemaugh Station
or to absorb reactive power from the Transmission System, provided that, in
either case, the Conemaugh Station is operating within its reactive generating
capability and not violating any electric constraints.

                 4.2.2.1  The Generating Station Owners will operate the
Conemaugh Station in accordance with prescribed voltage schedules pursuant to
Section 4.2.2 to the extent the Conemaugh Station is operating within its
reactive generating capability and not violating any electrical constraints.
Should the Generating Station Owners fail to comply, the Switching Station
Owners will provide written notice to the Generating Station Owners of the
Switching Station Owners' intent to remedy that failure. If the Generating
Station Owners do not promptly commence appropriate action after receiving such
notice, the Switching Station Owners may then take any necessary action at the
Generating Station Owners' expense to remedy such failure, including the
installation of capacitor banks or other reactive compensation equipment
necessary to ensure the proper voltage or reactive supply at the Conemaugh
Station. The Switching Station Owners shall take, to the extent feasible,
reasonable efforts to minimize the impact of such action on the operation of the
Conemaugh Station.

                 4.2.2.2  The Generating Owners shall notify the Transmission
Operator if any or all generating units at the Conemaugh Station reaches a VAR
limit, if there is any deviation from the prescribed voltage schedule which is
outside the limits prescribed by applicable law, PJM or Good Utility Practice,
or if any automatic voltage regulator is removed from or restored to service.

          4.2.3  The Transmission Operator may from time to time, to the extent
authorized or directed by PJM Interconnection, L.L.C., request, order, or direct
the Generating Station Owners, pursuant to applicable law, PJM requirements or
Good Utility Practice, to adjust generator controls that impact the
Transmission System, such as excitation, droop, and automatic generation
control settings. The Generating Station Owners agree to comply with such
requests, orders and directions.

          4.2.4  The Generating Station Owners acknowledge that the
Transmission Operator may have the right, to the extent authorized or directed
by PJM Interconnection, L.L.C., to require reduced or increased generation of
the Conemaugh Station in accordance with the PJM Agreement or the PJM Tariff,
as applicable, or in accordance with applicable rules of the Transmission
Operator.

          4.2.5  Notwithstanding anything to the contrary set forth herein, the
Generation Station Owners shall have no obligation to provide ancillary
services hereunder to the extent that

                                       22
<PAGE>   27
regulatory authorization is required to do so and has not been issued or
obtained or is not in effect. The Generating Station Owners shall use all
reasonable efforts to obtain and keep in effect all regulatory authorizations
required to provide the ancillary services contemplated hereby.

          4.2.6  All payments, if any, received by a Switching Station Owner
for ancillary services provided by a Generating Station Owner shall be paid over
to such Generating Station Owner by such Switching Station Owner.

     4.3  Auditing of Accounts, Records and Operational Records.  The
Generating Station Owners and the Switching Station Owners shall have the right,
during normal business hours, to audit each other's accounts and records
pertaining to transactions under this Agreement, upon twenty (20) days prior
written notice, at the offices where such accounts and records are maintained.
Any such audit of a Party's accounts and records shall not be made more
frequently than once in any twelve (12) month period, and no such audit may be
made with respect to accounts and records relating to periods more than
twenty-four (24) months prior to the date of the audit notice. The Party being
audited will be entitled to review the audit report and any supporting
materials. The Party conducting the audit shall maintain the confidentiality of
all information obtained during the audit in compliance with Article 7 of this
Agreement. To the extent that audited information includes confidential
information, the auditing Party shall designate an independent auditor to
perform such audit.

                                   ARTICLE 5
                  COST RESPONSIBILITIES AND BILLING PROCEDURES

5.0  Cost Responsibilities and Billing Procedures.

     5.1  Cost Responsibility for Interconnection Service.  The Generating
Station Owners shall not be responsible for any costs arising from the Switching
Station Owners' provision of Interconnection Service to the Generating Station
Owners, excepting only the costs specified in Sections 3.3 (Facility, Equipment
and Maintenance), 3.4 (New Construction or Modifications), 3.8 (Switching
Station Owners Provided Local Services) and 4.2.2.1 (Operation in Accordance
with Prescribed Voltage Schedules) of this Agreement.

     5.2  Billing Procedures.

          5.2.1  General.  Within a reasonable time after the first day of each
month, each Party shall prepare an invoice for those reimbursable services
provided to the other Party under this Agreement during the preceding month.

          5.2.2  Each invoice shall delineate the month in which the services
were provided, shall fully describe the services rendered, and shall be itemized
to reflect the services performed or provided.

          5.2.3  The invoice shall be paid within thirty (30) days of issuance.
All payments shall be made in immediately available funds payable to the other
Party, or by wire transfer to a bank named and account designated by the
invoicing Party, unless the Parties agree to another form of payment.


                                       23

<PAGE>   28
     5.3  Payment of Invoices.  Payment of an invoice shall not relieve the
paying Party from any responsibilities or obligations it has under this
Agreement, nor shall such payment constitute a waiver of any claims arising
hereunder.

     5.4  Interest on Unpaid Balances.  Interest on any unpaid amounts
(including amounts placed in escrow) shall be calculated in accordance with the
methodology specified for interest on refunds in FERC regulations at 18 C.F.R.
Section 35.19a(a)(2)(iii). Interest on delinquent amounts shall be calculated
from the due date of the bill to the date of payment. When payments are made by
mail, bills shall be considered as having been paid on the date of receipt by
the other Party.

     5.5  Default.  In the event either Party fails to make payment to the
other Party on or before the due date, as described above, and such failure of
payment is not corrected within twenty (20) calendar days after the Party
notifies the Party of the missed payment, a default by said Party shall be
deemed to exist and the provisions of Article 8.0 shall apply.

          5.5.1  In the event of a billing dispute between the Switching
Station Owners and the Generating Station Owners, each Party shall continue to
provide services as long as the other Party continues to make all payments not
in dispute.

                                   ARTICLE 6
                                 DOCUMENTATION

6.0  Documentation.

     6.1  Drawings.

          6.1.1  Drawings that exclusively describe the Generating Station
Owners' Facilities and are not the proprietary information of third parties will
be transferred by the Switching Station Owners to the Generating Station Owners.
Drawings that exclusively describe the Switching Station Owners Facilities,
including the Switching Station Owners Interconnection Facilities, will be
retained by the Switching Station Owners. Drawings describing the Conemaugh
Station and the Switching Station Owners Facilities on the same drawing will be
identified and marked as "common drawings." The Switching Station Owners shall
retain the common drawings and shall provide a copy of same to the Generating
Station Owners.

          6.1.2  Each Party shall be responsible for updates and corrections to
its respective drawings described in Section 6.1.1 and shall provide copies
thereof to the other Party as soon as practicable after the updates or
corrections are made. The Parties shall develop mutually agreeable procedures
for updating such drawings.

          6.1.3  Except as otherwise noted on the document or drawing, neither
Party makes any representations as to the accuracy, detail, or completeness of
the documents or drawings provided to the other Party, and each Party hereby
releases the other Party from any liability arising as a result of the use of
such documentation or drawings.

                                       24
<PAGE>   29

                                   ARTICLE 7
                                CONFIDENTIALITY

7.0  Confidentiality.

     7.1  Confidentiality of the Switching Station Owners.  The Switching
Station Owners shall hold in confidence, unless compelled to disclose by
judicial or administrative process or other provisions of law, all documents and
information furnished by the Generating Station Owners in connection with this
Agreement and which is marked "Confidential" or "Proprietary" or is otherwise
identified as containing information which the Generating Station Owners require
not be publicly disclosed. Except to the extent that such information or
documents are (a) generally available to the public other than as a result of a
disclosure by the Switching Station Owners, (b) available to the Switching
Station Owners on a non-confidential basis prior to disclosure to the Switching
Station Owners by the Generating Station Owners, or (c) available to the
Switching Station Owners on a non-confidential basis from a source other than
the Generating Station Owners, provided that such source is not known, and by
reasonable effort could not be known, by the Switching Station Owners to be
bound by a confidentiality agreement with the Generating Station Owners or
otherwise prohibited from transmitting the information to the Switching Station
Owners by a contractual, legal or fiduciary obligation, the Switching Station
Owners shall not release or disclose such information to any other person,
except to their employees on a need-to-know basis, in connection with this
Agreement who have first been advised of the confidentiality provisions of this
Section 7.1 and have agreed in writing to comply with such provisions. In no
event shall such information be disclosed in violation of the requirements of
FERC Orders 889 and 889-A (18 C.F.R. Part 37), and any successor thereto. The
Switching Station Owners shall promptly notify the Generating Station Owners if
it receives notice or otherwise concludes that the production of any information
subject to this Section 7.1 is being sought under any provision of law and the
Switching Station Owners shall seek confidential treatment for such confidential
information provided thereto. The Switching Station Owners may utilize
information subject to this Section 7.1 in any administrative or legal
proceeding to which the Switching Station Owners, or any one or more of them, is
a party or in any proceeding under Article 12, subject in each case to a
confidentiality agreement with the participants.

     7.2  Confidentiality of the Generating Station Owners.  The Generating
Station Owners shall hold in confidence, unless compelled to disclose by
judicial or administrative process or other provisions of law, all documents and
information furnished by the Switching Station Owners in connection with this
Agreement and which is marked "Confidential" or "Proprietary" or is otherwise
identified as containing information which the Switching Station Owners require
not be publicly disclosed. Except to the extent that such information or
documents are (a) generally available to the public other than as a result of a
disclosure by the Generating Station Owners, (b) available to the Generating
Station Owners on a non-confidential basis prior to disclosure to the Generating
Station Owners by the Switching Station Owners, or (c) available to the
Generating Station Owners on a non-confidential basis from a source other than
the Switching Station Owners, provided that such source is not known, and by
reasonable effort could not be known, by the Generating Station Owners to be
bound by a confidentiality agreement with the Switching Station Owners or
otherwise prohibited from transmitting the information to the Generating Station
Owners by a contractual, legal or fiduciary obligation. The Generating Station
Owners shall not release or disclose such information to any other person,


                                       25

<PAGE>   30
except their employees on a need-to-know basis in connection with this
Agreement who have first been advised of the confidentiality provisions of this
Section 7.2 and have agreed to comply in writing with such provisions. The
Generating Station Owners shall promptly notify the Switching Station Owners if
they receive notice or otherwise conclude that the production of any
information subject to this Section 7.2 is being sought under any provision of
law and the Generating Station Owners shall seek confidential treatment for
such confidential information provided thereto. The Generating Station Owners
may utilize information subject to this Section 7.2 in any administrative or
legal proceeding to which the Generating Station Owners or any one or more of
them is a party or in any proceeding under Article 12, subject in each case to
a confidentiality agreement with the participants.

     7.3  Confidentiality of Audits.  The independent auditor performing any
audit, as referred to in Section 4.3, shall be subject to a confidentiality
agreement between the auditor and the Party being audited. Such audit
information shall be treated as confidential except to the extent that its
disclosure is required by regulatory or judicial order, for reliability
purposes pursuant to Good Utility Practice, and applicable FERC rules and
regulations, as amended from time to time. Except as provided herein, neither
Party will disclose the audit information to any third party without the other
Party's prior written consent. Audit information in the possession of the Party
not being audited shall be subject to all provisions of Article 7.

     7.4  Remedies.  The Parties agree that monetary damages would be
inadequate to compensate a Party for the other Party's breach of its
obligations under this Article 7. Each Party accordingly agrees, subject to
Article 18, that the other Party shall be entitled to equitable relief, by way
of injunction or otherwise, if the first Party breaches or threatens to breach
its obligations under this Article 7, which equitable relief shall be granted
without bond or proof of damages, and the receiving Party shall not plead in
defense that there would be an adequate remedy at law.

                                   ARTICLE 8
                               EVENTS OF DEFAULT

8.0  Events of Default.

     8.1  Events of Default by Generating Station Owners.  Each of the
following shall constitute an Event of Default by the Generating Station Owners
under this Agreement:

          (a) the failure to pay any amount due to the Switching Station Owners
within twenty (20) days after receipt of written notice of nonpayment, unless
the payment of such amounts is disputed, in which event Section 5.5.1 shall
apply;

          (b) the failure to comply, in any substantial respect, with any
material term or condition of this Agreement, provided that such failure has a
material adverse impact on the Switching Station Owners' operations, the
Switching Station Owners Facilities or the Transmission System;

          (c) a receiver, liquidator or trustee is appointed for Generating
Station Owners holding, in the aggregate, more than 75% interest in the
Conemaugh Station, which receiver, liquidator or trustee is not discharged
within sixty (60) days;

                                       26
<PAGE>   31
          (d) the entry of a decree or decrees adjudicating as bankrupt or
insolvent Generating Station Owners holding, in the aggregate, more than 75% of
the interest in the Conemaugh Station, which decree or decrees are not stayed
or discharged within sixty (60) days; or

          (e) voluntary petitions for bankruptcy are filed under any federal or
state bankruptcy law by or on behalf of Generating Station Owners holding more
than 75% interest in the Conemaugh Station.

     8.2  Remedies of Switching Station Owners.

          (a) The Switching Station Owners shall give written notice to the
Generating Station Owners of the occurrence of an Event of Default under
Section 8.1(b), which notice shall set forth in reasonable detail the nature of
the default and, where known and applicable, the steps necessary to cure such
default. The Generating Station Owners shall, within thirty (30) days following
receipt of the Switching Station Owners' notice, either (i) cure such default;
or (ii) commence in good faith all such steps as are reasonable and appropriate
to cure such default as promptly as practicable in the event such default
cannot, in the reasonable judgment of the Generating Station Owners, be
completely cured within such thirty (30) day period. If the Generating Station
Owners dispute that an Event of Default under Section 8.1(b) has occurred, the
Generating Station Owners shall nevertheless comply with this Section 8.2(a)
pending the resolution of the dispute. Pending the resolution of the dispute
between the Parties, the Switching Station Owners shall continue to provide
Interconnection Service and the local services set forth in Section 3.7 and 3.8
in compliance with this Agreement. If it is determined that no Event of Default
under Section 8.1(b) existed, the Switching Station Owners shall pay and
reimburse the Generating Station Owners for all costs and expenses incurred by
them to cure the alleged default.

          (b) If the Generating Station Owners fail to comply with Section
8.2(a), the Switching Station Owners may (i) exercise such rights and remedies
as may be set forth in this Agreement with respect to such Event of Default; and
(ii) exercise such rights and remedies as may be available at law or in equity
to recover direct damages due to such Event of Default, subject to Section 3.1.5
and Article 18 of this Agreement.

          (c) Subject to Section 8.2(a), upon the occurrence of an Event of
Default under Sections 8.1(a), (c), (d) or (e), the Switching Station Owners may
exercise all such rights and remedies as may be available to it at law or in
equity to recover damages caused by such default, subject to Section 3.1.5 and
Article 18 of this Agreement. The Switching Station Owners may also elect to
terminate this Agreement if the following have not been cured, and are not the
subject of a dispute, pursuant to Section 8.2(a); (i) Generating Station Owners
refuse to pay any undisputed amount due to the Switching Station Owners; (ii)
upon the occurrence of an Event of Default under Section 8.1(b); or (iii) upon
the occurrence of an Event of Default under Sections 8.1(c), (d) or (e),
provided, however, that the Switching Station Owners may not terminate this
Agreement under Sections 8.1(c), (d) or (e) if the payment and performance by
the Generating Station Owners of their obligations under this Agreement are
guaranteed, in writing, by the remaining Generating Station Owners. The
Switching Station Owners shall not discontinue the performance of any one or
more of their obligations hereunder due to the occurrence of an Event of Default
during the pendency of any dispute regarding such Event of

                                       27
<PAGE>   32
Default and until such dispute is finally resolved.

          (d) Notwithstanding anything in this Agreement to the contrary, in
the event the Generating Station Owners' failure to comply with the provisions
of Sections 4.1 and 4.2 of this Agreement is reasonably likely to have an
immediate and material adverse impact on the Switching Station Owners or the
Transmission System, the Switching Station Owners shall have the right, after
providing as much notice as is practicable under the circumstances and
complying with the applicable FERC notice requirements regarding termination of
service, to disconnect the Conemaugh Station from the Transmission System.
Provided that the failure to comply with Sections 4.1 and 4.2 is not due to the
willful misconduct of the Generating Station Owners the Switching Station
Owners shall use reasonable efforts to restore Interconnection Service as
promptly as practicable upon verification that the condition which caused the
disconnection no longer exists.

     8.3. Events of Default by Switching Station Owners.  Each of the following
shall constitute an Event of Default by the Switching Owners under this
Agreement:

          (a) the failure to pay any amount due to the Generating Station
Owners within twenty (20) days after receipt of written notice of payment,
unless the payment of such amount is disputed, in which event Section 5.5.1
shall apply;

          (b) the failure to comply, in any substantial respect, with any
material term or condition of this Agreement, provided that such failure has a
material adverse impact on the Generating Station Owners' operations, the
Generating Station Owners' Facilities or the Conemaugh Station;

          (c) a receiver, liquidator or trustee is appointed for the Switching
Station Owners, which receiver, liquidator or trustee is not discharged within
sixty (60) days;

          (d) the entry of a decree adjudicating the Switching Station Owners
bankruptcy or insolvent, which decree is not stayed or discharged within sixty
(60) days; or

          (e) the filing by or on behalf of the Switching Station Owners of
a voluntary petition in bankruptcy under any federal or state bankruptcy law.

       8.4. Remedies of Generating Station Owners.  (a) The Generating Station
Owners shall give written notice to the Switching Station Owners of the
occurrence of an Event of Default under Section 8.3(b), which notice shall set
forth in reasonable detail the nature of the default and, where known and
applicable, the steps necessary to cure such default. The Switching Station
Owners shall, within thirty (30) days following receipt of the Generating
Station Owners' notice, either (i) cure such default; or (ii) commence in good
faith all steps as are reasonable and appropriate to cure such default as
promptly as practicable in the event such default cannot, in the reasonable
judgment of the Switching Station Owners, be completely cured within such thirty
(30) day period. If the Switching Station Owners dispute that an Event of
Default under Section 8.3(b) has occurred, the Switching Station Owners shall
nonetheless comply with this Section 8.4 pending the resolution of the dispute.
If it is determined that no Event of Default under Section 8.3(b) existed, the
Generating Station Owners shall pay and reimburse the Switching Station Owners
for all costs and expenses incurred by it to cure the

                                       28
<PAGE>   33

alleged default.

          (b)  If the Switching Station Owners fail to comply with Section
8.4(a), or upon the occurrence of an Event of Default under Sections 8.3(a),
(c), (d) or (e), the Generating Station Owners may (i) exercise all such rights
and remedies as may be available to them to recover damages caused by such
default, subject to Section 3.1.4 and Article 18 of this Agreement; and/or (ii)
terminate this Agreement. The Generating Station Owners shall not discontinue
the performance of any one or more of their obligations hereunder due to the
occurrence of an Event of Default during the pendency of any dispute regarding
such Event of Default and until such dispute is finally resolved.

          (c)  Notwithstanding anything in this Agreement to the contrary, in
the event the Switching Station Owners' failure to comply with the provisions
of Sections 4.1 of this Agreement is reasonably likely to have an immediate and
material adverse affect on the Generating Station Owners or Conemaugh Station,
after providing as much notice to the Switching Station Owners as is
practicable under the circumstances, the Generating Station Owners shall have
the right to take such action, at law or in equity, as is reasonably required
to insure the Switching Station Owners' compliance with Section 4.1.

     8.5  Specific Performance.  Notwithstanding the foregoing, upon the
occurrence of any Event of Default, the non-defaulting Party shall be entitled
to commence an action to require the defaulting Party to remedy such default
and specifically perform its duties and obligations hereunder in accordance
with the terms and conditions hereof.

                                   ARTICLE 9
                                INDEMNIFICATION

9.0  Indemnification.

     9.1  Generating Station Owners' Indemnification.  The Generating Station
Owners shall indemnify, hold harmless, and defend the Switching Station Owners,
their parents, and Affiliates, as the case may be, and their respective
officers, directors, employees, agents, contractors, subcontractors, invitees,
successors and permitted assigns from and against any and all claims,
liabilities, costs, damages, and expenses (including, without limitation,
reasonable attorney and expert fees, and disbursements incurred by any of them
in any action or proceeding between the Switching Station Owners and a third
party or the Generating Station Owners) for damage to property of unaffiliated
third parties, injury to or death of any person, including the Switching
Station Owners employees or any third parties (collectively, "Switching Station
Owners' Damages"), to the extent caused, by the negligence or willful
misconduct of the Generating Station Owners and/or their officers, directors,
employees, agents, contractors, subcontractors or invitees arising out of or
connected with the Generating Station Owners' performance or breach of this
Agreement, or the exercise by the Generating Station Owners of their rights
hereunder. In furtherance of the foregoing indemnification and not by way of
limitation thereof, the Generating Station Owners hereby waive any defense they
might otherwise have under applicable workers' compensation laws.

     9.2  Switching Station Owners' Indemnification.  The Switching Station
Owners shall indemnify, hold harmless, and defend the Generating Station
Owners, their parents, and


                                       29

<PAGE>   34
Affiliates, as the case may be, and their respective officers, directors,
employees, agents, contractors, subcontractors, invitees, successors and
permitted assigns from and against any and all claims, liabilities, costs,
damages, and expenses (including, without limitation, reasonable attorney and
expert fees, and disbursements incurred by any of them in any action or
proceeding between the Generating Station Owners and a third party or the
Switching Station Owners) for damage to property of unaffiliated third parties,
injury to or death of any person, including the Generating Station Owners'
employees or any third parties (collectively, "Generating Station Owners'
Damages"), to the extent caused by the negligence or willful misconduct of the
Switching Station Owners and/or their officers, directors, employees, agents,
contractors, subcontractors or invitees arising out of or connected with the
Switching Station Owners' performance or breach of this Agreement, or the
exercise by the Switching Station Owners of their rights hereunder. In
furthermore of the foregoing indemnification and not by way of limitation
thereof, the Switching Station Owners hereby waive any defense they might
otherwise have under applicable workers' compensation laws.


     9.3  Indemnification Procedures.  If either Party intends to seek
indemnification under this Article 9 from the other Party, the Party seeking
indemnification shall give the other Party notice of such claim within ninety
(90) days of the later of the commencement of, or the Party's actual knowledge
of, such claim or action. Such notice shall describe the claim in reasonable
detail, and shall indicate the amount (estimated if necessary) of the claim that
has been, or may be sustained by, said Party. To the extent that the other Party
will have been actually and materially prejudiced as a result of the failure to
provide such notice, such notice will be a condition precedent to any liability
of the other Party under the provisions for indemnification contained in this
Agreement. Neither Party may settle or compromise any claim without the prior
consent of the other Party; provided, however, said consent shall not be
unreasonably withheld or delayed.

     9.4  Survival.  The indemnification obligations of each Party under this
Article 9 shall continue in full force and effect regardless of whether this
Agreement either expired or been terminated or canceled.

     9.5  The Generating Station Owners shall indemnify, hold harmless and
defend the Switching Station Owners and their parents, and Affiliates and their
respective officers, directors, employees, agents, contractors, subcontractors,
invitees, successors and permitted assigns, from and against any and all
fines, penalties, costs, expenses and liabilities, including without limitation,
attorney's fees, litigation expenses and court costs, which may be incurred by
or imposed upon them, or any of them, as a consequence of the failure of the
Generating Station Owners to comply with Section 13.2.4 of this Agreement. The
Switching Station Owners shall indemnify, hold harmless and defend the
Generating Station Owners, their respective parents and Affiliates and their
respective officers, directors, employees, agents, contractors, subcontractors,
invitees, successors and permitted assigns, from and against any and all fines,
penalties, costs, expenses and liabilities, including without limitation,
attorney's fees, litigation expenses and court costs, which may be incurred by
or imposed upon them, or any of them, as a consequence of the failure of the
Switching Station Owners to comply with Section 13.1.4 of this Agreement.


                                       30
<PAGE>   35

                                   ARTICLE 10
                                   INSURANCE

10.0 Insurance.

     10.1  The Parties agree to maintain, at their own cost and expense, fire,
liability, worker's compensation, and other forms of insurance relating to
their property and facilities in the manner, and amounts, and for the durations
as is customary in the electric utility industry.

     10.2  The Parties agree to furnish each other with certificates of
insurance evidencing the insurance coverage obtained in accordance with the
preceding Section 10.1, and the Parties agree to notify and send copies to the
other of any policies maintained hereunder upon written request. Each party
must notify the other Party within five (5) days of receiving notice of
cancellation, change, amendment or nonrenewal of any insurance policy.

                                   ARTICLE 11
                                 FORCE MAJEURE

11.0 Force Majeure.

     11.1  Notwithstanding anything in this Agreement to the contrary, neither
the Generating Station Owners nor the Switching Station Owners, shall be liable
in damages, or otherwise responsible to the other Party, for their failure to
carry out any of their obligations under this Agreement, other than any
obligation to pay an amount when due, if and only to the extent that it is
unable to so perform or is prevented from performing by an event of force
majeure.

     11.2  The term "force majeure" as used herein means those causes beyond
the reasonable control of the Party affected, which by the exercise of
reasonable diligence, including Good Utility Practice, that Party is unable to
prevent, avoid, mitigate, or overcome, including the following: any act of God,
labor dispute (including a strike), act of the public enemy, war, insurrection,
riot, fire, storm or flood, explosion, breakage or accident to machinery or
equipment, electric system disturbance (not including explosion, breakage,
accident or electrical system disturbance caused by the gross negligence or
willful misconduct of a Party), order, regulation or restriction imposed by
governmental, military or lawfully-established civilian authorities, or any
other cause of a similar nature beyond a Party's reasonable control.

     11.3  If a Party shall rely on the occurrence of an event or condition
described above as a basis for being excused from performance of its obligations
under this Agreement, then the Party relying on the event or condition shall
(a) provide prompt written notice of such force majeure event to the other
Party, including an estimation of its expected duration and the probable impact
on the performance of its obligations hereunder; (b) exercise all reasonable
efforts in accordance with Good Utility Practice to continue to perform its
obligations under this Agreement; (c) expeditiously take action to correct or
cure the event or condition excusing performance, provided, however, that

                                       31

<PAGE>   36
settlement of labor disputes will be completely within the sole discretion of
the Party affected by such labor dispute; (d) exercise all reasonable efforts
to mitigate or limit damages to the other Party; and (e) provide prompt notice
to the other Party of the cessation of the event or condition giving rise to
its excuse from performance. All performance obligations hereunder shall be
extended by a period equal to the term of the resultant delay.

                                   ARTICLE 12
                                    DISPUTES

12.0 Disputes.

     12.1  The Parties shall use their best efforts to resolve any claim or
dispute, which arises hereunder, initially through good faith negotiations or
upon the failure of such negotiations, through Alternative Dispute Resolution
("ADR") techniques in accordance with the Model Procedure for Mediation of
Business Disputes as published by the Center for Public Resources; however,
either Party may terminate its participation in ADR during any stage of ADR and
proceed under Section 12.2.

     12.2  If any claim or dispute arising hereunder is not resolved pursuant
to Section 12.1, either Party may, upon giving the other Party at least ten
(10) days prior written notice, initiate litigation to submit such claim or
dispute for decision by a court of competent jurisdiction.

     12.3  The Switching Station Owners hereby waive their rights, and the
Generating Station Owners hereby waive their rights, to require, and each of
them agrees that they will not demand, a trial by jury of any and all issues
which arise out of the performance of, or any failure to perform, this
Agreement by the Generating Station Owners or the Switching Station Owners.

                                   ARTICLE 13
                                REPRESENTATIONS

13.0 Representations.

     13.1  Representations of the Switching Station Owners. Subject to Article
30, each of the Switching Station Owners represent and warrant, solely as to
itself, to the Generating Station Owners as follows:

           13.1.1  Organization. The Switching Station Owner is duly qualified
or licensed to do business and is in good standing in all jurisdictions in
which the ownership of its properties or the nature of its activities or both
makes such qualification or licensing necessary. The Switching Station Owner
has the requisite corporate power and authority to carry its business as now
being conducted;

           13.1.2  Authority Relative to this Agreement. The Switching Station
Owner has the requisite power and authority to execute and deliver this
Agreement and, subject to the procurement of applicable regulatory approvals,
to carry out the actions required of each by this Agreement. The execution and
delivery of this Agreement and the actions it contemplates have been duly and
validly authorized by all required corporate action. The Agreement has been
duly and validly executed and delivered by the Switching Station Owner and,
assuming that it is duly and validly executed and

                                       32



<PAGE>   37
delivered by the Generating Station Owners, constitutes a valid and binding
Agreement of the Switching Station Owner;

           13.1.3  Regulatory Approval. The Switching Station Owner has
obtained any and all approvals of, and given any notices to, any public
authority that are required for the Switching Station Owner to execute and
deliver this Agreement;

          13.1.4  Compliance With Law. The Switching Station Owner represents
and warrants that it is not in violation of any applicable law, statute, order,
rule, regulation or judgment promulgated or entered by any federal, state, or
local governmental authority, which violation would affect the Switching
Station Owner's performance of its obligations under this Agreement. The
Switching Station Owner represents and warrants that it will comply with all
applicable material laws, rules, regulations, codes, and standards of all
federal, state, and local governmental agencies having jurisdiction over the
Switching Station Owner or the transactions under this Agreement.
Notwithstanding any term of this Agreement to the contrary, the failure of the
Switching Station Owner to comply with this Section 13.1.4 shall not constitute
an Event of Default under Article 8, unless such failure is reasonably likely
to have an immediate and material adverse impact on the Generating Station
Owners, the Generating Station Owners' Facilities or the Conemaugh Station and
the Switching Station Owners fail to indemnify, hold harmless and defend the
Generating Station Owners in compliance with Section 9.5 of this Agreement.

     13.2  Representations of the Generating Station Owners. Subject to Article
30, each of the Generating Station Owners represent and warrant, solely as to
itself, to the Switching Station Owners as follows:

           13.2.1  Organization. The Generating Station Owner is duly qualified
or licensed to do business and is in good standing in all jurisdictions in
which the ownership of its properties or the nature of its activities or both
makes such qualification or licensing necessary. The Generating Station Owner
has the requisite corporate power and authority to carry on its business as now
being conducted;

           13.2.2  Authority Relative to this Agreement. The Generating Station
Owner has the requisite power and authority to execute and deliver this
Agreement and, subject to the procurement of applicable regulatory approvals,
to carry out the actions required of it by this Agreement. The execution and
deliver of this Agreement and the actions it contemplates have been duly and
validly authorized by all required corporate action. This Agreement has been
duly and validly executed and delivered by the Generating Station Owner and,
assuming that it is duly and validly executed and delivered by the Switching
Station Owners, constitutes a valid and binding Agreement of the Generating
Station Owner;

           13.2.3  Regulatory Approval. The Generating Station Owner has
obtained any and all approvals of, and given any notices to, any public
authority that are required for the Generating Station Owner to execute and
deliver this Agreement;

           13.2.4  Compliance With Law. The Generating Station Owner represents
and warrants that it is not in violation of any applicable, law, statute,
order, rule, regulation or judgment promulgated or entered by any federal,
state, or local governmental authority, which violation

                                       33

<PAGE>   38

would affect Generating Station Owner's performance of its obligations under
this Agreement. The Generating Station Owner represents and warrants that it
will comply with all applicable laws, rules, regulations, codes, and standards
of all federal, state, and local governmental agencies having jurisdiction over
the Generating Station Owner or the transactions under this Agreement.
Notwithstanding any term of this Agreement to the contrary, the failure of the
Generating Station Owner to comply with this Section 13.2.4 shall not
constitute an Event of Default under Article 8, unless such failure is
reasonably likely to have an immediate and material adverse impact on the
Switching Station Owners, the Switching Station Owners' Facilities or the
Transmission System and the Generating Station Owners fail to indemnify, hold
harmless and defend the Switching Station Owners in compliance with Section
9.5 of this Agreement.

          13.3  Representations of All Parties.  The representations and
warranties in Sections 13.1.4 and 13.2.4 shall continue in full force and
effect for the term of this Agrement.

                                   ARTICLE 14
                    ASSIGNMENT/CHANGE IN CORPORATE IDENTITY

14.0  Assignment/Change in Corporate Identity.

     14.1  This Agreement and all of the provisions hereof shall be binding
upon, and inure to the benefit of, the Parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned, except as
permitted under Section 3.9, by either Party hereto, whether by operation of
law or otherwise, without the prior written consent of the other Party; which
consent shall not unreasonably be withheld. The refusal of a Party to consent
to a proposed assignment shall not be deemed to be reasonable if the financial
capability of the proposed assignee is not materially inferior to the financial
capability of the assignor. Any assignment of this Agreement in violation of
the foregoing shall be, at the option of the non-assigning Party, void.

          14.1.1  Generating Station Owners' Rights - Notwithstanding Section
14.1, each of the Generating Station Owners may assign or otherwise transfer
its rights and obligations hereunder without obtaining the consent of any other
Party as follows;

                 14.1.1.1  Each of the Generation Station Owners may assign (a)
all of its rights and obligations hereunder to any assignee of that individual
Generating Station Owner which acquires all, or substantially all of that
Generating Station Owner's interest in Conemaugh Station, or (b) any of its
rights and obligations hereunder to an Affiliate to the extent necessary for the
qualification of such Generating Station Owner as an exempt wholesale generator
under Section 32 of the Public Utility Holding Company Act of 1935, as amended.
Upon the Switching Station Owners' receipt of notice from the Generating Station
Owner of any such assignment, such assignee will be deemed to have assumed,
ratified, agreed to be bound by and perform all such obligations, and all
references herein to "Generating Station Owners" shall thereafter be deemed to
include references to such assignee, in each case without the necessity for
further act or evidence by the Parties hereto or such assignee. The Switching
Station Owners agree to execute and deliver, at the Generating Station Owner's
expense, such documents as may


                                       34

<PAGE>   39

be reasonably necessary to accomplish any such assignment. Any assignment
described in this Section 14.1.1.1 shall not relieve or discharge any of the
Generating Station Owners from any of its obligations hereunder absent the
written consent of the non-assigning Party to such release from liability
except where one of the following criteria is satisfied:

          (a)  the assignee has an Investment Grade Credit Rating;

          (b)  the obligations of the assignee are guaranteed by an entity with
     an Investment Grade Credit Rating; or

          (c)  the assignment is being made in connection with a merger,
     consolidation or sale of substantially all the assignor's interests in the
     Conemaugh Station to another party that has senior long-term debt with a
     credit rating that is at least equal to that of the assignor or the
     obligations of the assignee are guaranteed by an entity that has senior
     long-term debt with a credit rating that is at least equal to that of the
     assignor.

Upon the satisfaction of any of the above stated criteria, the non-assigning
Party shall be obligated to release the assigning Party from liability, and
shall execute all documents reasonably requested by the assigning Party to
reflect such release.

                 14.1.1.2  Each of the Generating Station Owners or its
assignee may assign, transfer, pledge, or otherwise dispose of its rights and
interests hereunder to a trustee or lending institution for the purposes of
financing or refinancing the Generating Station Owners' Facilities, including
upon or pursuant to the exercise of remedies with respect to such financing or
refinancing, or by way of assignments, transfers, pledges, or other
dispositions in lieu thereof, provided, however, that no such assignment
described in this Section 14.1.1.2 shall relieve or discharge any of the
Generating Station Owners from any of its obligations hereunder. The Switching
Station Owners agree to execute and deliver, at the Generating Station Owner's
expense, such documents as may be reasonably necessary to accomplish any such
assignment, transfer, pledge, or other disposition of rights hereunder for
purposes of the financing or refinancing of the Generating Station Owners'
Facilities, so long as the Switching Station Owners' rights under this
Agreement are not thereby altered, amended, diminished or otherwise impaired.

          14.1.2  Switching Station Owners' Rights - Notwithstanding Section
14.1, each of the Switching Station Owners may assign all of its rights and
obligations hereunder without obtaining the consent of any other party as
follows:

                 14.1.2.1  Each of the Switching Station Owners may assign all
of its rights and obligations hereunder to any assignee of that individual
Switching Station Owner which acquires all, or substantially all of that
Switching Station Owner's interest in the Switching Station Owners' Facilities.
Upon the Generating Station Owners' receipt of notice from the Switching
Station Owner of any such assignment, such assignee will be deemed to have
assumed, ratified, agreed to be bound by and perform all such obligations, and
all references herein to "Switching Station Owners" shall thereafter be deemed
to include references to such assignee, in each case without the necessity for
further act or evidence by the Parties hereto or such assignee. The Generating
Station Owners agree to execute and deliver, at the Switching


                                       35

<PAGE>   40
Station Owner's expense, such documents as may be reasonably necessary to
accomplish any such assignment. Any assignment described in this Section
14.1.2.1 shall not relieve or discharge any of the Switching Station Owners
from any of its obligations hereunder absent the written consent of the
non-assigning Party to such release from liability except where one of the
following criteria is satisfied:

          (a) the assignee has an Investment Grade Credit Rating;

          (b) the obligations of the assignee are guaranteed by an entity with
     an Investment Grade Credit Rating; or

          (c) the assignment is being made in connection with a merger,
     consolidation or sale of substantially all the assignor's interests in the
     Switching Station to another party that has senior long-term debt with a
     credit rating that is at least equal to that of the assignor or the
     obligations of the assignee are guaranteed by an entity that has senior
     long-term debt with a credit rating that is at least equal to that of the
     assignor.


Upon the satisfaction of any of the above stated criteria, the non-assigning
Party shall be obligated to release the assigning Party from liability, and
shall execute all documents reasonably requested by the assigning Party to
reflect such release.

                 14.1.2.2  Each of the Switching Station Owners or its assignee
may assign, transfer, pledge, or otherwise dispose of its rights and interests
hereunder to a trustee or lending institution for the purposes of financing or
refinancing the Switching Station Owners' Facilities, including upon or
pursuant to the exercise of remedies with respect to such financing or
refinancing, or by way of assignments, transfers, pledges, or other
dispositions in lieu thereof, provided, however, that no such assignment
described in this Section 14.1.2.2. shall relieve or discharge any of the
Switching Station Owners from any of its obligations hereunder. The Generating
Station Owners agree to execute and deliver, at the Switchyard Owner's expense,
such documents as may be reasonably necessary to accomplish any such
assignment, transfer, pledge, or other disposition of rights hereunder for
purposes of the financing or refinancing of the Switching Station Owners'
Facilities, so long as the Generating Station Owners' rights under this
Agreement are not thereby altered, amended, diminished or otherwise impaired.

                                   ARTICLE 15
                                 SUBCONTRACTORS

15.0 Subcontractors.

     15.1 Nothing in this Agreement shall prevent a Party from utilizing the
services of such subcontractors as it deems appropriate to perform its
obligations under this Agreement; provided, however, that each Party shall
require its subcontractors to comply with all applicable terms and conditions
of this Agreement in providing such services.

     15.2 The creation of any subcontractor relationship shall not relieve the
hiring Party of any of its obligations under this Agreement. Each Party shall
be responsible to the other Party

                                       36
<PAGE>   41

for the acts and/or omissions of any subcontractor it hires as if it itself had
acted and/or omitted to act. Any applicable obligation imposed by this
Agreement upon a Party shall be equally binding upon, and shall be construed as
having application to, any subcontractor of such Party.

                                   ARTICLE 16
                                LABOR RELATIONS

16.0 Labor Relations. The Switching Station Owners and the Generating Station
Owners agree to immediately notify the other Party, verbally and then in
written, of any labor dispute or anticipated labor dispute of which its
management has actual knowledge that might reasonably be expected to affect the
operations of the other Party with respect to this Agreement.

                                   ARTICLE 17
                         INDEPENDENT CONTRACTOR STATUS

17.0 Independent Contractor Status. Nothing in this Agreement shall be
construed as creating any relationship between the Switching Station Owners and
the Generating Station Owners other than that of independent contractors.

                                   ARTICLE 18
                            LIMITATION OF LIABILITY

18.0 Limitation of Liability. Except for indemnity obligations set forth in
Article 9, neither the Switching Station Owners nor the Generating Station
Owners, nor their respective officers, directors, agents, employees, parents,
affiliates, or successors or assigns of any of them, shall be liable to the
other Party or its parent, subsidiaries, affiliates, officers, directors,
agents, employees, successors or assigns for claims, suits, actions or causes
of action for incidental, punitive, special, indirect, multiple or
consequential damages (including, without limitation, claims of customers,
attorneys' fees and litigation costs) connected with, or resulting from,
performance or non-performance of this Agreement, or any actions undertaken in
connection with or related to this Agreement, including, without limitation, any
such damages which are based upon causes of action for breach of contract, tort
(including negligence and misrepresentation), breach of warranty or strict
liability. The provisions of this Article 18 shall apply regardless of fault and
shall survive termination, cancellation, suspension, completion, or expiration
of this Agreement.

                                   ARTICLE 19
                                    NOTICES

19.0 Notices.

     19.1 Each Party shall indicate to the other Party, by notice, the
appropriate person and their telephone numbers during each eight-hour work
shift to contact in the event of an Emergency, a scheduled or forced
interruption, or reduction in services. The notice last received by a Party
shall be effective until modified in writing by the other Party.

     19.2 All notices, requests, claims, demands, invoices, and other
communications hereunder shall be in writing and shall be given (and except as
otherwise expressly provided

                                       37
<PAGE>   42

herein, will be deemed to have been duly given if so given) by hand delivery,
cable, telecopy (confirmed in writing) or telex, or by mail (registered or
certified, postage prepaid) to the respective Parties as follows:

                    Conemaugh Switching Station Owners
                    Bradley J. Breidinger
                    Manager - Transmission Investment Planning
                    c/o GPU Energy
                    2800 Pottsville Pike
                    Reading, PA 19605

                    Conemaugh Generating Station Owners
                    c/o Keystone-Conemaugh Projects
                    682 Philadelphia Street - 2nd floor
                    Indiana, PA 15701

or such other address as is furnished in writing by such Party; and any such
notice or communication shall be deemed to have been given as of the date so
mailed. Either Party may change the address to which notices are to be
delivered by written notice to the other Party given in accordance with this
Article 19.

                                   ARTICLE 20
                                    HEADINGS

20.0  Headings.  The descriptive headings of the Articles and Sections of this
Agreement have been inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement.

                                   ARTICLE 21
                                     WAIVER

21.0  Waiver.  Except as otherwise provided in this Agreement, any failure of a
Party to comply with any obligation, covenant, agreement, or condition herein
may be waived by the Party entitled to the benefit thereof only by a written
instrument signed by such Party granting such waiver, but such waiver shall not
operate as a waiver of, or estoppel with respect to, any subsequent failure of
the first Party to comply with such obligation, covenant, agreement, or
condition.

                                   ARTICLE 22
                                  COUNTERPARTS

22.0  Counterparts.  This Agreement may be executed in two or more
counterparts, all of which will be considered one and the same Agreement.


                                       38

<PAGE>   43

                                   ARTICLE 23
                         GOVERNING LAW AND CONSTRUCTION

23.0  Governing Law and Construction.

     23.1  Laws and Regulations. This Agreement and all rights, obligations,
and performances of the Parties hereunder, are subject to all applicable
federal and state laws, and to all duly-promulgated orders and other
duly-authorized action of governmental authorities having jurisdiction.

     23.2  When not in conflict with or preempted by federal law, this
Agreement will be governed by and construed in accordance with the law of the
Commonwealth of Pennsylvania, without giving effect to the conflict of law
principles thereof. Except for those matters covered in this Agreement and
jurisdictional to FERC or the appellate courts having jurisdiction over FERC
matters, any action arising out of or concerning this Agreement must be brought
in the courts (state or federal) of the Commonwealth of Pennsylvania. Both
Parties hereby consent to the exclusive jurisdiction of the Commonwealth of
Pennsylvania for the purpose of hearing and determining any action not
preempted by federal law.

                                   ARTICLE 24
                                  SEVERABILITY

24.0  Severability.  In the event that any of the provisions of this Agreement
are held to be unenforceable or invalid by any court or regulatory authority of
competent jurisdiction, the Parties shall, to the extent possible, negotiate an
equitable adjustment to the provisions of this Agreement, with a view toward
effecting the purpose of this Agreement, and the validity and enforceability of
the remaining provisions hereof shall not be affected by such holding.

                                   ARTICLE 25
                                   AMENDMENTS

25.0  Amendments.

     25.1  Except as provided in Article 2:

           25.1.1  Except as set forth in Section 2.2 of this Agreement, the
rates, terms, and conditions contained in this Agreement are not subject to
change under Sections 205 or 206 of the Federal Power Act, as either section
may be amended or superseded, unilaterally by a Party or otherwise absent the
mutual written agreement of the Parties. It is the intent of this Section 25.1
that, to the maximum extent permitted by law, and subject to Section 2.2 of
this Agreement, the rates, terms and conditions in this Agreement shall not be
subject to change, regardless of whether such change is sought (a) by the FERC
acting sua sponte on behalf of a Party or third party, (b) by a Party, (c) by a
third party, or (d) in any other manner.

           25.1.2  This Agreement may be amended, modified, or supplemented
only by


                                       39

<PAGE>   44
written agreement of both Switching Station Owners and the Generating Station
Owners.

                                   ARTICLE 26
                                ENTIRE AGREEMENT

26.0 Entire Agreement.  This Agreement constitute the entire understanding
between the Parties with respect to the subject matter hereof or thereof, and
supersedes any and all previous understandings, oral or written, which pertain
to the subject matter contained herein or therein.

                                   ARTICLE 27
                          NO THIRD PARTY BENEFICIARIES

27.0 No Third Party Beneficiaries.  Nothing in this Agreement, express or
implied, is intended to confer on any person, other than the Parties, any
rights or remedies under or by reason of this Agreement.

                                   ARTICLE 28
                                   CONFLICTS

28.0 Conflicts.  Notwithstanding any provision of this Agreement to the
contrary, this Agreement shall not affect any of the Generating Station Owners'
obligations or the Switching Station Owners' rights and obligations under (a)
the PJM Tariff, and related agreements, (b) the Easement Agreement, or (c)
applicable FERC orders, regulations or policy (such agreements, orders,
regulations, and tariffs referred to collectively as the "Ancillary
Documents"). In the event of a conflict between any provisions of this
Agreement and any provision of one or more Ancillary Documents, which conflict
is not permissible or has not been waived by the appropriate regulatory agency,
the provision of the Ancillary Document shall control.

                                   ARTICLE 29
                               FURTHER ASSURANCES

29.0 Further Assurances.  The Parties hereto agree to execute and deliver
promptly, at the expense of the Party requesting such action, any and all other
and further information, instruments and documents that may be reasonably
requested in order to effectuate the transactions contemplated hereby.

                                   ARTICLE 30
                    SEVERAL LIABILITY OF EACH OF THE OWNERS

30.1 Several Liability of Generation Station Owners.  Notwithstanding anything
to the contrary, it is expressly understood and agreed by the Parties that the
representations, warranties, obligations and covenants of the Generating
Station Owners (and any indemnity provisions relating thereto) under this
Agreement, are made severally, and not jointly, by each of the Generating
Station Owners and in no event shall a Generating Station Owner be liable to
any Party pursuant to this Agreement with respect to its representations,
warranties, obligations and covenants (and any indemnity provisions relating
thereto) as a Generating Station Owner for more than the proportionate share of
its percentage ownership interest in the Conemaugh Station.


                                       40
<PAGE>   45
30.2 Several Liability of Switching Station Owners.  Notwithstanding anything
to the contrary, it is expressly understood and agreed by the Parties that the
representations, warranties, obligations and covenants of the Switching
Station Owners (and any indemnity provisions relating thereto) under this
Agreement, are made severally, and not jointly, by each of the Switching
Station Owners and in no event shall a Switching Station Owner be liable to any
Party pursuant to this Agreement with respect to its representations,
warranties, obligations and covenants (and any indemnify provisions relating
thereto) as a Switching Station Owner for more than the proportionate share of
its percentage ownership interest in the Conemaugh Station.

                                   ARTICLE 31
                             APPOINTMENT OF AGENTS

31.0 The Parties acknowledge that, effective as of the closing of the sale by
     Metropolitan Edison Company of its interest in the Conemaugh Generating
     Station to Sithe Pennsylvania Holdings L.L.C. (i) the Generating Station
     owners will have appointed GPU Generating, Inc. as its agent for purposes
     of administering this Agreement, and (ii) the Switching Station Owners will
     have appointed Pennsylvania Electric Company d/b/a GPU Energy as its agent
     for purposes of administrating this Agreement. Each Party shall give the
     other prompt notice in accordance with this Agreement of any change in the
     foregoing or any subsequent appointment of agents.

                         (Remainder of Page left blank)


















                                       41
<PAGE>   46
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title: Vice President - PSEG Fossil


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   47
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Development Company


-----------------------------------
Name:
Title:

                                       43





<PAGE>   48
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company

                                          /s/ RONALD W. LOWMAN
-----------------------------------       ----------------------------------
Name:                                     Name:  Ronald W. Lowman
Title:                                    Title: Vice President-Fossil Energy


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Development Company


-----------------------------------
Name:
Title:

                                       42





<PAGE>   49
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company

/s/ PETER E. SCHAUB
-----------------------------------       ----------------------------------
Name:  Peter E. Schaub                    Name:
Title: General Manager                    Title:


UGI Development Company


-----------------------------------
Name:
Title:

                                       42





<PAGE>   50
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company

/s/ DENNIS J. MURPHY
-----------------------------------       ----------------------------------
Name:  Dennis J. Murphy                   Name:
Title: VP - PP&E                          Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Development Company


-----------------------------------
Name:
Title:

                                       42





<PAGE>   51
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Development Company

/s/ MARK R. DINGMAN
-----------------------------------
Name:  Mark R. Dingman
Title: Vice President

                                       42





<PAGE>   52
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC

                                          /s/ JJ WAGNER
-----------------------------------       ----------------------------------
Name:                                     Name:  JJ Wagner
Title:                                    Title: Vice President Operations


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Development Company


-----------------------------------
Name:
Title:

                                       42





<PAGE>   53
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company

/s/ H. CARTER KRESGE
-----------------------------------       ----------------------------------
Name:  H. Carter Kresge                   Name:
Title: Manager External Operations        Title:


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC

/s/ H. CARTER KRESGE
-----------------------------------       ----------------------------------
Name:  H. Carter Kresge                   Name:
Title: Manager External Operations        Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Development Company


-----------------------------------
Name:
Title:

                                       42





<PAGE>   54
     IN WITNESS WHEREOF, the Parties have caused their authorized
representatives to execute this Agreement as of the date first above written.


Conemaugh Generating Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Sithe Pennsylvania Holdings, LLC


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Development Company


-----------------------------------
Name:
Title:

                                       42





<PAGE>   55
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company

/s/ TSION M. MESSICK
-----------------------------------       ----------------------------------
Name:   Tsion M. Messick                  Name:
Title:  Director, Transmission            Title:
        & Arrangements

Delmarva Power & Light Company            Metropolitan Edison Company


/s/ TSION M. MESSICK
-----------------------------------       ----------------------------------
Name:   Tsion M. Messick                  Name:
Title:  Director, Transmission            Title:
        & Arrangements


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   56
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company

/S/ ROBERT M. GENECZKO
-----------------------------------       ----------------------------------
Name:  R. M. Geneczko                     Name:
Title: Vice President-Power Delivery      Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   57
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company

/s/ ANDREW W. WILLIAMS
-----------------------------------       ----------------------------------
Name:  Andrew W. Williams                 Name:
Title: Group Vice President               Title:


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   58
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Utilities, Inc.

/s/ MARK R. DINGMAN
-----------------------------------
Name:  Mark R. Dingman
Title: Vice President
       & General Manager

                                       43





<PAGE>   59
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   60
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company

                                          /s/ R. S. ZECHMAN
-----------------------------------       ----------------------------------
Name:                                     Name:  R. S. Zechman
Title:                                    Title: VP-Engin. & Operations


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   61
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company

                                          /S/ ELLEN M. CAVANAUGH
-----------------------------------       ----------------------------------
Name:                                     Name:  Ellen M. Cavanaugh
Title:                                    Title: Vice President
                                                 Electric Supply
                                                 and Transmission


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   62
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company

                                          /s/ P. LANDRIEU
-----------------------------------       ----------------------------------
Name:                                     Name:  P. Landrieu
Title:                                    Title: VP - Electric Transmission


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   63
Conemaugh Switching Station Owners:
-----------------------------------

Atlantic City Electric Company            Baltimore Gas and Electric Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Delmarva Power & Light Company            Metropolitan Edison Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


PP&L, Inc.                                PECO Energy Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


Potomac Electric Power Company            Public Service Electric
                                            and Gas Company


-----------------------------------       ----------------------------------
Name:                                     Name:
Title:                                    Title:


UGI Utilities, Inc.


-----------------------------------
Name:
Title:

                                       43





<PAGE>   64

                                   SCHEDULE A

                               CONEMAUGH STATION

                           INTERCONNECTION FACILITIES


1    Description of Points of Interconnection
     1.1  Points of Interconnection

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
   STATION               POINTS OF INTERCONNECTION                  OWNED BY
--------------------------------------------------------------------------------
<S>                 <C>                                           <C>
 Conemaugh          #1 Main power transformer 500 kV bushings,    Generating
                    including horizontal connection bar to the    Station Owners
                    surge arresters.
--------------------------------------------------------------------------------
                    #2 Main power transformer 500 kV bushings,    Generating
                    including horizontal connection bar to the    Station Owners
                    surge arresters.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
</TABLE>

     1.2  Drawings Showing Points of Interconnection
          1.2.1  Drawing No. LR-D-0024, Revision 1. (Points of Interconnection
                 are labeled as "PI".)

2    Substation Equipment to be Retained by the Generating Station Owners
     2.1  The following equipment will be retained by the Generating Station
          Owners:
          2.1.1  Electrical conduit banks and manholes between the main plant
                 and substation control house.
          2.1.2  Electrical cables between the main plant and substation
                 control house, to the first terminal point in the substation,
                 unless specified otherwise.
          2.1.3  Substation paging system, including all equipment and cabling.
          2.1.4  Plant base station radio equipment, including tower, antennas
                 and cables.

3    Switching Station Owners Access to the Generating Plant
     3.1  Switching Station Owners shall have access to those facilities within
          the Generating Plant as described in the Easement Agreement.
     3.2  Specifically, this shall include, but not limited to, the following:
          3.2.1  Switching Station Owners shall have access to the substation
                 circuit breaker controls switches and indicators located in the
                 Units #1&2 control room.

4    Joint Use Facilities
     4.1  The following Interconnection Facilities will be jointly operated:
          4.1.1  500 KV #2 Generator circuit breakers #1 and #2


                                       A1

<PAGE>   65

          4.1.2  500 kV #1 Generator circuit breakers #6 and #7
          4.1.3  500 kV #1 Generator disconnect switch
          4.1.4  500 kV #2 Generator disconnect switch
          4.1.5  480 volt main breaker A at the A Substation Bus
          4.1.6  480 volt main breaker B at the B Substation Bus
     4.2  The following Generating Station Owners equipment will be jointly
          operated:
          4.2.1  4160 volt Substation feeder breaker M-2SS at #2C Unit Bus
          4.2.2  4160 volt Substation feeder breaker M-1SS at #1C Unit Bus

5    Generating Station Owners Provided Local Services
     5.1  Substation Service Power
          5.1.1  The Generating Station Owners shall provide the Switching
                 Station Owners, at the Switching Station Owners' request and at
                 no charge, with access to Secondary System substation service
                 power at the levels, and at the substation locations, at which
                 power is being provided from the Conemaugh Generating Station
                 immediately prior to the Effective Date of this Agreement. The
                 Generating Station Owners shall Maintain the 4160-volt supply
                 cables from the Generating Plant to the substation service
                 transformers.
     5.2  Control Cables
          5.2.1  The Generating Station Owners shall Maintain all control
                 cables for the Switching Station Owners' control, protection
                 and metering purposes between the Generating Station Owners'
                 facilities and the Switching Station Owners' substation, up to
                 the first terminal point in the Switching Station Owners
                 equipment, unless specified otherwise.
     5.3  Substation Paging System
          5.3.1  The Generating Station Owners shall provide a plant paging
                 system in the Switching Station Owners substation for common
                 use by all Parties, at no cost to the Switching Station
                 Owners, as and to the extent provided prior to the Effective
                 Date of this Agreement.

6    Switching Station Owners Provided Local Services
     6.1  Substation Service Power
          6.1.1  The Switching Station Owners shall provide the Generating
                 Station Owners, at no charge, with access to Secondary System
                 substation service power at the levels, and at the substation
                 locations, at which power is being provided from the Switching
                 Station Owners' Facilities immediately prior to the Effective
                 Date of this Agreement. The Switching Station Owners will
                 Maintain the Secondary System distribution panels and
                 associated circuit breakers or fuses up to, but not including,
                 the field cables to the Generating Station Owners' equipment.
          6.1.2  This substation service power will include 125-volt DC power
                 for the control of the substation generator circuit breakers
                 and the Generating Station Owners' generator protection and
                 control systems.
     6.2  Remote Terminal Units (RTUs)
          6.2.1  The Switching Station Owners will Maintain the RTU in the
                 substation control house for common use by the Parties and
                 transmit the Conemaugh Station status points and generation
                 output levels to the PJM ISO for the


                                       A2

<PAGE>   66
                Generating Station Owners, as described in Section 10 below.
         6.2.2  The Generating Station Owners will Maintain the necessary
                transducers, pulse relays, auxiliary contacts, cables and other
                equipment so as to provide the electrical signals to the
                terminal points of the RTU, provided, however, the Generating
                Station Owners shall not be obligated under this Agreement to
                modernize, expand or upgrade such transducers, pulse relays,
                auxiliary contacts, cables and other equipment unless the
                failure to do so is reasonably likely to have an material
                adverse effect on the operation of the Switching Station Owners'
                Facilities.

7   Operating Requirements
    7.1  Station Service
         7.1.1  The Generating Station Owners will consult with the Switching
                Station Owners to coordinate the timing and nature of
                operations that might reasonably be expected to affect the
                continuous operation of the 4160 volt service supply to the
                substation
    7.2  Current and Potential Circuits
         7.2.1  The Generating Station Owners and the Switching Station Owners
                will consult in performing any work which might be reasonably
                expected to affect the continuous operation of the substation
                or generating units in accordance with Section 3.14.2 of the
                Interconnection Agreement.
         7.2.2  In particular, this will include the potential transformers in
                these locations:
                7.2.2.1  500 kV #1 bus
                7.2.2.2  500 kV #2 bus
         7.2.3  In particular, this will include the current transformers in
                these locations:
                7.2.3.1  500 kV circuit breakers #1, #2, #6 and #7
    7.3  Substation Indication and Controls
         7.3.1  Status indication and control switches will be retained in the
                Generating Station Owners' main control rooms for the 500 kV
                circuit breakers in the substation. These controls will be
                maintained by the Switching Station Owners for the Generating
                Station Owners' convenience and will be operated by the
                Generating Station Owners' personnel only at the direction of
                the Transmission Operator.
         7.3.2  In compliance with FERC Standards of Conduct, the Switching
                Station Owners will disconnect the meters in the main control
                room which indicate power flows in the Transmission System.
    7.4  Substation Equipment Alarms
         7.4.1  The annunciator for the substation 500 kV circuit breaker
                alarms will be retained in the Generating Station Owners' main
                control room. The annunciator and associated cables from the
                substation to the Generating Plant will be Maintained by the
                Generating Station Owners provided, however, the Generating
                Station Owners shall not be obligated under this Agreement to
                modernize, expand or upgrade such annunciator or cables unless
                the failure to do so is reasonably likely to have an material
                adverse effect on the operation of the Switching Station
                Owners' Facilities.
    7.5  Transmission Operating Requirements
         7.5.1  Conemaugh Unit Stability: A procedure has been developed to
                protect the Conemaugh units from an unstable operation when any
                of the three 500

                                      A 3
<PAGE>   67
                kV lines at Conemaugh are out of service and the Keystone No. 1
                and No. 2 units are generating at their full output (850 MW).
                When such a condition exists, a fault on one of the two
                remaining 500 kV lines at Conemaugh will isolate the output of
                the Conemaugh units onto one transmission line and can result
                in their instability and trip. To prevent this from occurring,
                the Conemaugh unit outputs must be restricted on a
                pre-contingency basis. The following potential transmission
                outages could occur and the PJM procedures are in place to
                protect the Conemaugh units: (a) When the Keystone-Conemaugh
                (5003) 500 kV line is out of service, a fault on either the
                Conemaugh-Juniata (5005) 500 kV line or Conemaugh-Hunterstown
                (5006) 500 kV line can cause an instability of the Conemaugh
                units. To control for this situation, the PJM System Operator
                will limit the total net output of the Conemaugh generating
                units to 1570 MW. (b) When the Conemaugh-Hunterstown (5006) 500
                kV line is out of service, a fault on the Keystone-Conemaugh
                (5003) 500 kV line can cause an instability of the Conemaugh
                units. To control for this situation, the PJM System Operator
                will limit the total net output of the Conemaugh generating
                units to 1605 MW. (c) When the Conemaugh-Juniata (5005) 500 kV
                line is out of service, a fault on the Keystone-Conemaugh
                (5003) 500 kV line can cause an instability of the Conemaugh
                units. To control for this situation, the PJM System Operator
                will either limit the total net output of the Conemaugh
                generating units to 1605 MW or enable the Conemaugh Unit No. 2
                Stability Trip Scheme.
         7.5.2  Unit No. 2 Unit Stability Trip Scheme: A protective relay
                scheme is enabled at Conemaugh whenever the Conemaugh-Juniata
                (5005) 500 kV line is out of service. The purpose of this scheme
                is to trip the Conemaugh Unit No. 2 should the Keystone-Juniata
                (5004) 500 kV line be opened for any reason. Such an occurrence
                would result in an instability and trip of both Conemaugh units
                and jeopardize the security of the PJM 500 kV transmission
                system. The PJM will direct the enabling of this scheme only
                when normal conditions are expected to exist and following a
                pre-evaluation of the Conemaugh-Juniata 500 kV line outage in
                accordance with the established PJM procedures. The
                Transmission Operator will direct qualified personnel at the
                Conemaugh Station to enable and disable this scheme in
                accordance with the directions from PJM.
         7.5.3  Reclosing 500 kV lines: All aerial 500 kV lines are designed
                for automatic reclosure after their trip. If a 500 kV line
                trips and does not return to service when automatically
                reclosed, or if the automatic reclosing fails to occur, the
                line will be tried back once manually five (5) minutes after
                the tripping occurs. If a 500 kV line that was successfully
                reclosed five (5) minutes after the trip-out trips a second
                time, the source of the trouble is to be determined by foot
                patrol, aerial patrol, report of trouble, or by any other means
                available. Manual try-backs on lines which trip a second time
                after having been successfully reclosed five (5) minutes after
                tripping are not to be attempted until some period of time has
                elapsed (30 minutes or longer). PJM will not direct the manual
                reclosing of any 500 kV line without the concurrence of the
                Transmission Operator.
         7.5.4  Closing of the 5003 Keystone-Conemaugh line: A procedure has
                been

                                      A 4
<PAGE>   68
                 developed to protect the Conemaugh units from experiencing an
                 excessive torque on their turbine-generator shafts when
                 reclosing the Keystone-Conemaugh (5003) 500 kV line. Such a
                 protecting scheme is required to prevent a power surge into the
                 Conemaugh 500 kV bus from causing an excessive power swing on
                 each of the Conemaugh generating units. Such a swing can result
                 in a  trip of the Conemaugh units and can potentially damage
                 equipment at the plant. The implementation of this procedure
                 requires that the phase angle across the Keystone #5003 circuit
                 breaker at Conemaugh be no greater than 17 degrees prior to
                 its reclosure. This phase angle is monitored by the
                 Transmission Operator and can be estimated from the algebraic
                 difference between the MW flows on the Keystone-Juniata 500 kV
                 line and the Conemaugh-Juniata 200 KV lines should the SCADA
                 point be unavailable. Based on studies, the difference in flow
                 must be less than 1200 MW before closing can be permitted.
                 Should either the monitored phase angle or the actual power
                 flows exceed their established limit, it will be necessary to
                 reduce the output of the Conemaugh generating units before
                 reclosing the Keystone-Conemaugh (5003) 500 kV line. This
                 procedure is fully described in the GPU Energy Bulk Power
                 Operations Memo No. 4, dated April 5, 1993 and as may be
                 further amended from time to time.

          7.5.5  Unit 1 Reactive Output Limit: With the Conemaugh Unit 1
                 generator voltage regulator in the manual mode and the
                 Conemaugh Unit 2 off-line, a contingency loss of the
                 Keystone-Conemaugh (5003) 500 KV line can cause the Conemaugh
                 voltage to reach as high as 580 kV when the Conemaugh 200 MVAR
                 capacitor is in-service. This voltage exceeds the manufacturers
                 rating of all the 200 kV transmission facilities at Conemaugh
                 and can result in equipment damage or failure. To prevent this
                 occurrence, the Conemaugh Unit 1 reactive output must be
                 restricted to less than 110 MVAR when such a condition exists.

          7.5.6  During the daily operation of the PJM system, there may be
                 times when the PJM security analysis programs identify a
                 potential contingency overload of the Transmission Systems at
                 Conemaugh that cannot be alleviated by any of the existing
                 operating procedures. When such a condition occurs, the
                 Locational Marginal Price (LMP) for the Conemaugh 500 kV busses
                 will likely be adjusted to send the proper economic signals to
                 those causing the transmission congestion. This may even
                 include setting a highly negative LMP at these busses. Should
                 such action fail to resolve the congestion created, the
                 Generating Station Owners may be required to reduce the station
                 output in order to maintain the reliability of the Transmission
                 Systems.

8    Metering
     8.1  Meter Compensation: The meters at this Generating Plant are not
          physically located at the Points of Interconnection. Therefore, the
          metering will be compensated (fixed and variable) to record the
          delivery of electricity in a manner that account for the total
          (no-load and load) electrical energy losses which occur between the
          metering and the Point of Interconnection
     8.2  Meter Locations and Points of Interconnection

                                       A5

<PAGE>   69
              8.2.1  Unit #1 Net Generation: The net output will be determined
                     at the Point of Interconnection from the output of the
                     #1 HP and LP Generators flowing through the #1 main power
                     transformer.
                     8.2.1.1  Location: Unit #1 Main Power Transformer
                     8.2.1.2  Meter type: Uni-directional
                     8.2.1.3  Voltage: 22 kV
                     8.2.1.4  Compensation: #1 Main power transformer losses
                     8.2.1.5  Point of Interconnection: At the outgoing 500 kV
                              line connection on the #1 main power transformer
                              busings.
              8.2.2  Unit #2 Net Generation: The net output will be
                     determined at the Point of Interconnection from the output
                     of the #2 HP and LP Generators flowing through the #2 main
                     power transformer.
                     8.2.2.1  Location: Unit #2 Main Power Transformer
                     8.2.2.2  Meter type: Uni-directional
                     8.2.2.3  Voltage: 22 kV
                     8.2.2.4  Compensation: #2 Main power transformer losses
                     8.2.2.5  Point of Interconnection: At the outgoing 500
                              kV line connection on the #2 main power
                              transformer bushings.
9      Pool Controlled Facilities (PCF)
       9.1    500 kV Line "5003": Conemaugh - Keystone
       9.2    500 kV Line "5005": Juniata - Conemaugh
       9.3    500 kV Line "5006": Hunterstown - Conemaugh

10     Unit Operation Information
       10.1   The Generating Station Owners shall provide the following data
              points to the Switching Station Owners Remote Terminal Unit (RTU)
              in accordance with Section 3.6 of the Interconnection Agreement.
       10.2   Status Points
              10.2.1  Generator permissive relay PM-1
              10.2.2  Generator permissive relay PM-2
              10.2.3  Generator #2 Stability Trip/Loss of DC
       10.3   Analog Points
              10.3.1  #1 Generator Net MW
              10.3.2  #1 Generator Net MVAR
              10.3.3  #2 Generator Net MW
              10.3.4  #2 Generator Net MVAR
       10.4   Accumulator Points
              10.4.1  #1 Generator MWH
              10.4.2  #2 Generator MWH




                                       A6

<PAGE>   70













                               [SCHEMATIC CHART]
<PAGE>   71













                               [SCHEMATIC CHART]
<PAGE>   72
                                  ATTACHMENT B

                            List of Representatives

<PAGE>   73
Mr Kenneth Braerman                     Ms Lisa Decker
Baltimore Gas and Electric Company      Baltimore Gas and Electric Company
7309 Windsor Mill Road                  39 W. Lexington Street
Baltimore, MD 21244                     Baltimore, MD 21201

Ms Tsion Messick                        Mr Randall Griffin
Conectiv                                Conectiv
I-95 & Rt 273                           800 King Street
Newark, DE 19714-9239                   Wilmington, DE 19899

Mr Samuel C. Thomas                     Mr Richard P. Sparling
GPU Energy                              Swidler Berlin Shereff Friedman
P.O. Box 16001                          3000 K Street, NW
Reading PA 19640-0001                   Suite 300
                                        Washington, DC 20007-5116

Mr Gabriel Laczo                        Mr Paul E. Russell
PP&L, Inc.                              PP&L, Inc.
2 North Ninth Street                    2 North Ninth Street
Allentown, PA 18101                     Allentown, PA 18101

Mr Robert N. Spencer                    Ms Vilna Waldron Gaston
PECO Energy Company                     PECO Energy Company
2301 Market Street, S6-2                2301 Market Street, S23-1
P.O. Box 8699                           P.O. Box 8699
Philadelphia, PA 19101-8699             Philadelphia, PA 19101-8699

Mr Glenn E. Timmons                     Mr. Allen C. Barringer
Potomac Electric Power Company          Potomac Electric Power Company
1900 Pennsylvania Avenue, NW            1900 Pennsylvania Avenue, NW
Washington, DC 20068                    Washington, DC 20068

Mr Thomas J. McGarvey                   Mr Richard P. Bonnifield
Public Service Electric and Gas Co      Public Service Electric and Gas Co
80 Park Plaza, T14A                     80 Park Plaza, T5G
Newark, NJ 07101                        Newark, NJ 07101

Mr Joseph T. Racho
UGI Utilities, Inc.
400 Stewart Road
P.O. Box 3200
Wilkes-Barre, PA 18773-3200
<PAGE>   74
                                  ATTACHMENT C

                                 Form of Notice
<PAGE>   75

               [SWIDLER BERLIN SHEREFF FRIEDMAN, LLP LETTERHEAD]

                                January 21, 2000

The Honorable David P. Boergers
Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426

     RE:  PENNSYLVANIA ELECTRIC COMPANY
          DOCKET NO. ER00-1194-000
          AMENDMENTS TO 115kV SEWARD-CONEMAUGH
          INTERCONNECTION AGREEMENT

Dear Secretary Boergers:

     Pursuant to section 205 of the Federal Power Act, 16 U.S.C. section 824d,
and Part 35 of the Commission's regulations, 18 C.F.R. Part 35, Pennsylvania
Electric Company (doing business and hereinafter referred to as "GPU Energy")
submits for filing amendments to the 115 kV Seward-Conemaugh Interconnection
Agreement Between GPU Energy and Atlantic City Electric Company, Baltimore Gas
and Electric Company, Delmarva Power & Light Company, Metropolitan Edison
Company, Pennsylvania Power and Light Company, Philadelphia Electric Company,
Potomac Electric Power Company, Public Service Electric and Gas Company, and
the United Gas Improvement Company (collectively, the "Owners")
("Seward-Conemaugh IA").

I.   INFORMATION SUBMITTED WITH FILING

     The Seward-Conemaugh IA was made effective as of April 11, 1970 by an
order of the Federal Power Commission ("FPC") dated May 15, 1970 in
ER94-443-000. It is designated as Pennsylvania Electric Company, Electric Rate
Schedule No. 63.

     The amendments consist of two revised Schedules to the Seward-Conemaugh IA:
(i) Schedule 1 (concerning facilities owned by Pennsylvania Electric Company);
and (ii) Schedule 2 (concerning facilities owned by the parties to the
Seward-Conemaugh IA other than Pennsylvania Electric Company). Schedule 1 has
been revised to add the Conemaugh Interconnection (1993 Addition) to the list
of facilities owned by Pennsylvania Electric Company. Schedule 2 has been
revised to add the Seward-Conemaugh Interconnection (1993 Addition) to the list
of facilities owned by the Owners. These revisions supersede previous revisions
to Schedules 1 and 2 dated



<PAGE>   76
The Honorable David P. Boergers
January 21, 2000
Page 2

September 3, 1981.

II.  COMMUNICATIONS AND SERVICE

     Communications regarding this filing should be addressed to the following
individuals, whose names should be entered on the official service lists
maintained by the Secretary for the docket established with respect to this
filing:

     Richard P. Sparling                      Donald C. Miller
     Bradley R. Miliauskas                    GPU Energy
     Swidler Berlin Shereff Friedman, LLP     2800 Pottsville Pike
     3000 K Street, NW, Suite 300             PO Box 16001
     Washington, D.C. 20007-5116              Reading, PA 19640-0001
     (202) 424-7500                           (610) 921-6285
     (202) 424-7643 (facsimile)               (610) 939-8537 (facsimile)

     A copy of this filing has been served on the Owners and regulators in the
Commonwealth of Pennsylvania. Also included is a form of notice suitable for
publication in the Federal Register, together with an electronic version of the
notice on a 3.5" diskette in WordPerfect format.

III. PROPOSED EFFECTIVE DATE

     GPU Energy requests waiver of the Commission's sixty-day notice period and
an effective date of one day after the date of this filing -- January 22, 2000.
Waiver is appropriate since the Amendments concern the non-rate terms of the
Seward-Conemaugh IA. Further, the information submitted with this filing
substantially complies with the requirements of Part 35 of the Commission's
rules and regulations applicable to filings of this type. GPU Energy requests
waiver of any applicable requirement of Part 35 for which waiver is not
specifically requested, if necessary, in order to permit this filing to become
effective as proposed.

IV.  DOCUMENTS ENCLOSED

     Enclosed are six (6) copies each of the following documents:

     i.    This letter of transmittal;
     ii.   Amendments to the Seward-Conemaugh IA (Attachment A); and
     iii.  A draft Notice of Filing suitable for publication in the Federal
           Register (Attachment B), along with an electronic version of this
           notice on 3.5" computer diskette in WordPerfect format.

<PAGE>   77
The Honorable David P. Boergers
January 21, 2000
Page 3

     An additional copy of this filing is enclosed, to be marked with your
filing stamp and returned to our messenger. Thank you for your assistance in
this matter.

                                 Sincerely,


                                 /s/ KENNETH G. JAFFE
                                 ----------------------------------------
                                 Kenneth G. Jaffe
                                 Richard P. Sparling
                                 Bradley R. Miliauskas
                                 Swidler Berlin Shereff Friedman, LLP
                                 3000 K Street, NW, Suite 300
                                 Washington, D.C. 20007-5116

                                 Attorneys for GPU Energy
<PAGE>   78
                                  ATTACHMENT A

                     Amendments to the Seward-Conemaugh IA

<PAGE>   79
Co._____________ No. __________             Interconnection Facilities Agreement
Supplement No. ________________             Schedule 1 Rev. 2
Concurrence Date ______________             Date of Issue ______________________
FERC Order Date _______________             Date Effective _____________________
                                            Super. Sched. No. 1 Rev 1
                                            Date of Super. Sched. Sept. 3, 1981



                                   SCHEDULE 1

                          FACILITIES OWNED BY PENELEC

1.00 Penelec has provided and now owns, or shall provide and own, the following
described facilities, which are installed for the electrical interconnection
between the parties:

1.10 Seward-Conemaugh Interconnection (1969 Installation)

     1.011  A 115 kV single circuit, three-phase transmission line, 2.18 miles
in length and associated right-of-way, extending from Penelec's Seward
Substation to the Conemaugh Generating Station.

     1.012  At Seward Substation, one (1) 115 kV high-speed automatic reclosing
circuit breaker, appurtenant disconnecting and associated equipment, control
switchboard, and such other items as are required and suitable for the control
of the above interconnection and for the coordination of such control with
related Owners' control equipment described in Section 2.011 of Schedule 2.

     1.013  At Seward Substation, such metering equipment as has been
determined by the parties as necessary for power and energy measurement. This
metering is on the Conemaugh 115 kV circuit breaker at Seward Substation.

1.02 Seward-Conemaugh Interconnection (1981 Addition)

     1.021  At Seward Substation, one (1) 115 kV high-speed automatic reclosing
circuit breaker, appurtenant disconnecting and associated equipment,
switchboard devices, relaying and such other items as are required and suitable
for the control of the above interconnection and for the coordination of such
control with that of the equipment described in Section 1.012 above and with
related Owners' control equipment described in Section 2.011 of Schedule 2.

1.03 Conemaugh Interconnection (1993 Addition)

     The fiber optic ground ("FOG") wire between the Seward Substation and the
Conemaugh Station.

                                       1

<PAGE>   80
ACCEPTED

PENNSYLVANIA ELECTRIC COMPANY              THE CONEMAUGH OWNERS

By: __________________________              By: _________________________
          Vice President                          Administrative Manager

Date: 1-3-2000                              Date: 1-3-2000


                                       2

<PAGE>   81
Co.______ No.____________              Interconnection Facilities Agreement
Supplement No.___________              Schedule 2 Rev. 2
Concurrence Date_________              Date of Issue ______________________
FERC Order Date__________              Super. Sched. No. 2 Rev. 1
                                       Date of Super. Sched. Sept. 3, 1981



                                   Schedule 2

                         Facilities Owned by the Owners

2.00  The Owners have provided and now own, or shall provide and own, the
following described facilities, which are installed for the electrical
interconnection between the parties:

2.01  Seward-Conemaugh Interconnection (1969 Installation)

     2.011 At Conemaugh Station, one (1) 22.4 MVA, 115-4 kV, three-phase
transformer, one (1) 5 kV circuit breaker, appurtenant disconnection and
associated equipment, control switchboard, carrier relaying and such other items
as are required and suitable for the control of the above interconnection and
for the coordination of such control with related Penelec control equipment
described in Section 1.012 and Section 1.021 of Schedule 1. (The metering for
the interconnection is located at Seward and is described in Section 1.013 of
Schedule 1.) NOTE: This transformer has been designated "#1 start-up
transformer."

2.02 Seward-Conemaugh Interconnection (1978 Addition)

     At Conemaugh Station, One (1) 22.4 MVA, 115-13.8 kV, three-phase
transformer, one (1) 15 kV circuit breaker, appurtenant disconnecting and
associated equipment, control switchboard, and such other items as are required
and suitable for control of the above interconnection. This transformer has been
designated "#2 start-up transformer."

2.03 Seward-Conemaugh Interconnection (1981 Addition)

     At Conemaugh Station, one (1) 22.4 MVA, 115-4. 16 kV, three-phase
transformer, one (1) 5 kV circuit breaker, appurtenant disconnecting and
associated equipment, control switchboard, and such other items as are required
and suitable for control of the above interconnection. This transformer has been
designated "#3 start-up transformer."

2.04 Seward-Conemaugh Interconnection (1993 Addition)

     2.041 The Fiber optic strands located within the Penelec fiber optic ground
("FOG") wire, located along the Penelec transmission facilities between the
Station and the Penelec Fiber Hut and the Seward Substation. Penelec grants to
the Owners an indefeasible right of use in the fiber optic strands located
within the FOG wire for transmitting the Owner's private, internal
communications in conjunction with their operation of the Station.

                                       1
<PAGE>   82
     2.042 At Conemaugh Generating Station, a 115 kV single circuit, three-phase
transmission tap, consisting of three structures and four spans of wire,
extending from a tap point on the Seward-Conemaugh 115 kV transmission line to
the No. 1 and No. 2 Flue Gas Desulferization System (FGDS) standby/start-up
transformers, appurtenant disconnecting and associated equipment, control
switchboard, carrier relaying, and such other items as are required and suitable
for the control of the above interconnection.

ACCEPTED

PENNSYLVANIA ELECTRIC COMPANY           THE CONEMAUGH OWNERS


By:__________________________           By:________________________
       Vice President                       Administrative Manager


Date: _______________________           Date: _____________________




                                       2
<PAGE>   83
                                  ATTACHMENT B

                                 Form of Notice
<PAGE>   84
                            UNITED STATES OF AMERICA
                                   BEFORE THE
                      FEDERAL ENERGY REGULATORY COMMISSION

Pennsylvania Electric Company              )             Docket No. ER ________

                                NOTICE OF FILING

                             [                    ]

     Take notice that on January 21, 2000, Pennsylvania Electric Company (doing
business and hereinafter referred to as "GPU Energy") submitted for filing
amendments to the 115 kV Seward-Conemaugh Interconnection Agreement Between GPU
Energy and Atlantic City Electric Company, Baltimore Gas and Electric Company,
Delmarva Power & Light Company, Metropolitan Edison Company, Pennsylvania Power
and Light Company, Philadelphia Electric Company, Potomac Electric Power
Company, Public Service Electric and Gas Company, and the United Gas Improvement
Company. The amendments modify Schedule 1 and Schedule 2 of the Interconnection
Agreement.

     Any person desiring to be heard to protest said filing should file a motion
to intervene or protest with the Federal Energy Regulatory Commission, 888 First
Street, N.E., Washington, D.C. 20426, in accordance with Rules 211 or 214 of the
Commission's Rules of Practice and Procedure (18 C.F.R. Sections 385.211,
385.214). All such motions or protests should be filed on or before [     ].
Protests filed with the Commission will be considered by it in determining the
appropriate action to be taken but will not serve to make the protestants
parties to the proceeding. Any person wishing to become a party must file a
motion to intervene. Copies of this filing are on file with the Commission and
are available for public inspection.


<PAGE>   85
                                  ATTACHMENT B

<PAGE>   86
                                 FORM OF NOTICE

                            UNITED STATES OF AMERICA
                                   BEFORE THE
                      FEDERAL ENERGY REGULATORY COMMISSION

Pennsylvania Electric Company              )             Docket No. ER ________

                                NOTICE OF FILING

                             [                    ]

     Take notice that on January __, 2000, Pennsylvania Electric Company (doing
business and hereinafter referred to as "GPU Energy") submitted for filing
amendments to the 115 kV Seward-Conemaugh Interconnection Agreement Between GPU
Energy and Atlantic City Electric Company, Baltimore Gas and Electric Company,
Delmarva Power & Light Company, Metropolitan Edison Company, Pennsylvania Power
and Light Company, Philadelphia Electric Company, Potomac Electric Power
Company, Public Service Electric and Gas Company, and the United Gas Improvement
Company. The amendments modify Schedule 1 and Schedule 2 of the Interconnection
Agreement.

     Any person desiring to be heard to protest said filing should file a motion
to intervene or protest with the Federal Energy Regulatory Commission, 888 First
Street, N.E., Washington, D.C. 20426, in accordance with Rules 211 or 214 of the
Commission's Rules of Practice and Procedure (18 C.F.R. Sections 385.211,
385.214). All such motions or protests should be filed on or before [     ].
Protests filed with the Commission will be considered by it in determining the
appropriate action to be taken but will not serve to make the protestants
parties to the proceeding. Any person wishing to become a party must file a
motion to intervene. Copies of this filing are on file with the Commission and
are available for public inspection.