EXHIBIT

10.68




 




AMENDMENT

NO. 2 TO COAL SUPPLY AGREEMENT 




 




 




THIS AMENDMENT NO. 2 TO COAL SUPPLY AGREEMENT (“Amendment

No. 2”) is entered into effective as of January 1, 2003, by and between

LOUISVILLE GAS AND ELECTRIC COMPANY AND KENTUCKY UTILITIES COMPANY, Kentucky

corporations 220 West Main Street, Louisville, Kentucky 40202 (collectively

“Buyer”), and McELROY COAL COMPANY, CONSOLIDATION COAL COMPANY, CONSOL

PENNSYLVANIA COAL COMPANY, AND ISLAND CREEK COAL COMPANY, Delaware

corporations, and EIGHTY FOUR MINING COMPANY, a Pennsylvania corporation, all

of 1800 Washington Road, Pittsburgh, Pennsylvania 15241, (individually and

collectively, “Seller”).  In

consideration of the agreements herein contained, the parties hereto agree as

follows.




 




1.0                               AMENDMENTS




 




The Agreement heretofore

entered into by the parties, dated effective January 1, 2000, and identified by

the Contract Numbers set forth above, as amended by Amendment No. 1 dated

January1, 2002, hereafter referred to as “Agreement”, is hereby amended as follows:




 




2.0                               TERM




 




2.1           Section

2.0 Term

is deleted in its entirety and is replaced with the following:




 




2.0                               TERM.  The term of this Agreement shall

continue through December 31, 2004 subject to early termination pursuant to the

terms of the Agreement.




 




3.0                               QUANTITY




 




3.1                                 Section

3.1 Base

Quantity, is deleted in its entirety and is replaced with the

following:




 




3.0                               QUANTITY.  Seller shall sell and deliver and Buyer

shall purchase and accept delivery of the following annual quantities of coal: 




 




1





























 




	

  Year


  	

   


  	

  Base

  Quantity (Tons)


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  2003


  	

   


  	

  1,000,000


  	

   


  
	

  2004


  	

   


  	

  2,000,000


  	

   


  





 




The Base Quantity will be delivered in approximately

equal monthly quantities and in accordance with a mutually agreed upon

schedule.




 




4.0          SOURCE




 




4.1           Section

4.1 Source

is deleted and replaced with the following:




 




4.1                                 Source.  The coal sold hereunder shall be supplied

primarily from geological seam Pittsburgh #8, from Seller’s Shoemaker Mine,

located in Marshall County, West Virginia (the “Coal Property”).  As necessary soley to comply with the

quality requirements of this Agreement, Seller may blend with coal from the

Coal Property, coal from Seller’s Dilworth, Mahoning  Valley, McElroy, Mine 84, VP #8, Buchanan, Baily/Enlow Fork,

Loveridge, and/or Robinson Run Mines (the “Alternate Mines”).




 




5.0          QUALITY




 




5.1           Section

6.1 Specifications

is deleted and replaced with the following:




 




6.1                                 Specifications.  The coal delivered hereunder shall conform

to the following  specifications on an

“as received basis”:




 




	

  Specifications


  	

   


  	

  Guaranteed

  Monthly


  Weighted Average (1)


  	

   


  	

  Rejection

  Limits


  (per shipment)


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  BTU/LB.


  	

   


  	

  min. 


  	

   


  	

  12,200


  	

   


  	

  <


  	

   


  	

  11,800


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  LBS/MMBTU:


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  MOISTURE


  	

   


  	

  max.


  	

   


  	

  6.50


  	

   


  	

  >


  	

   


  	

  7.20


  	

   


  
	

  ASH


  	

   


  	

  max.  


  	

   


  	

  11.20


  	

   


  	

  >


  	

   


  	

  12.50


  	

   


  
	

  SULFUR


  	

   


  	

  max.


  	

   


  	

  2.50


  	

   


  	

  >


  	

   


  	

  2.75


  	

   


  
	

  SULFUR


  	

   


  	

  min.


  	

   


  	

  2.25


  	

   


  	

  <


  	

   


  	

  2.00


  	

   


  
	

  CHLORINE


  	

   


  	

  max.


  	

   


  	

  0.06


  	

   


  	

  >


  	

   


  	

  0.08


  	

   


  
	

  FLUORINE


  	

   


  	

  max.


  	

   


  	

  0.015


  	

   


  	

  >


  	

   


  	

  0.035


  	

   


  
	

  NITROGEN


  	

   


  	

  max.


  	

   


  	

  1.10


  	

   


  	

  >


  	

   


  	

  1.25


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  ASH/SULFUR

  RATIO


  	

   


  	

  min.


  	

   


  	

  3.00:1


  	

   


  	

  <


  	

   


  	

  2.30:1


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  SIZE

  (3” x 0”):


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Top

  size (inches)*


  	

   


  	

  max.  


  	

   


  	

  3x0


  	

   


  	

  >


  	

   


  	

  4x0


  	

   


  
	

  Fines

  (% by wgt)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Passing

  1/4” screen


  	

   


  	

  max.


  	

   


  	

  50


  	

   


  	

  >


  	

   


  	

  55


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  %

  BY WEIGHT:


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  VOLATILE


  	

   


  	

  min.


  	

   


  	

  36


  	

   


  	

  <


  	

   


  	

  32


  	

   


  
	

  FIXED

  CARBON


  	

   


  	

  min.


  	

   


  	

  44


  	

   


  	

  <


  	

   


  	

  42


  	

   


  
	

  GRINDABILITY

  (HGI)


  	

   


  	

  min.


  	

   


  	

  55


  	

   


  	

  <


  	

   


  	

  50


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  BASE

  ACID RATIO (B/A)


  	

   


  	

   


  	

   


  	

  .45


  	

   


  	

  >


  	

   


  	

  .55


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  SLAGGING

  FACTOR**


  	

   


  	

  max.


  	

   


  	

  2.00


  	

   


  	

  >


  	

   


  	

  2.30


  	

   


  
	

  FOULING

  FACTOR***


  	

   


  	

  max.


  	

   


  	

  .25


  	

   


  	

  >


  	

   


  	

  .50


  	

   


  
	

  ASH

  FUSION TEMPERATURE (°F) (ASTM D1857)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  REDUCING

  ATMOSPHERE


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Initial

  Deformation


  	

   


  	

  min. 


  	

   


  	

  1950


  	

   


  	

  min.


  	

   


  	

  1900


  	

   


  
	

  Softening

  (H=W)


  	

   


  	

  min.


  	

   


  	

  1990


  	

   


  	

  min.


  	

   


  	

  1950


  	

   


  
	

  Softening

  (H=1/2W)


  	

   


  	

  min.


  	

   


  	

  2099


  	

   


  	

  min.


  	

   


  	

  2050


  	

   


  
	

  Fluid


  	

   


  	

  min.


  	

   


  	

  2202


  	

   


  	

  min.


  	

   


  	

  2150


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  OXIDIZING

  ATMOSPHERE


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Initial

  Deformation


  	

   


  	

  min.  


  	

   


  	

  2391


  	

   


  	

  min.


  	

   


  	

  2300


  	

   


  
	

  Softening

  (H=W)


  	

   


  	

  min.  


  	

   


  	

  2461


  	

   


  	

  min.


  	

   


  	

  2400


  	

   


  
	

  Softening

  (H=1/2W)


  	

   


  	

  min.  


  	

   


  	

  2506


  	

   


  	

  min.


  	

   


  	

  2450


  	

   


  
	

  Fluid


  	

   


  	

  min.  


  	

   


  	

  2535


  	

   


  	

  min.


  	

   


  	

  2500


  	

   


  





 




2





























 






















(1)                                  An

actual Monthly Weighted Average

will be calculated for each specification for coal delivered to the Louisville

Gas and Electric generating stations and a separate actual Monthly Weighted

Average will be calculated for each specification for coal delivered to the

Kentucky Utility generating stations.




 




*                                         All

the coal will be of such size that it will pass through a screen having

circular perforations three (3) inches in diameter, but shall not contain more

than fifty per cent (50%) by weight of coal that will pass through a screen

having circular perforations one-quarter (1/4) of an inch in diameter.




 




**           Slagging Factor (Rs)=(B/A) x (Percent Sulfur by

WeightDry)




 




***         Fouling Factor (Rf)=(B/A) x

(Percent Na2O by WeightDry)




 




	

  The Base Acid Ratio

  (B/A) is herein defined as:


  	

   


  	

   


  	

   


  
	

  BASE ACID RATIO (B/A) =


  	

   


  	

  (Fe2O3  + 

  CaO  +  MgO 

  +  Na2O  + 

  K2O)


  	

   


  
	

   


  	

   


  	

  (SiO2  + 

  A12O3 

  +  TiO2)


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  Note: As used herein


  	

  >


  	

  means greater than:


  	

   


  
	

   


  	

  <


  	

  means

  less than.


  	

   


  





 




3





























 




5.2           Section 6.3 Rejection is deleted

and replaced with the following:




 




6.3                                 Rejection.  Buyer has the right, but not the obligation,

to reject any shipment which fail(s) to conform to any or all of the Rejection

Limits set forth in § 6.1 or contains extraneous materials.  Buyer must reject such coal within

seventy-two (72) hours of receipt of the coal analysis provided for in § 7.2 or

such right to reject is waived.  In the

event Buyer rejects such non-conforming coal, title to and risk of loss of the

coal shall be considered to have never passed to Buyer and Buyer shall return

the coal to Seller, or at Seller’s request, divert such coal to Seller’s

designee, all at Seller’s cost and risk. 

Seller shall replace the rejected coal within ten (10) working days from

notice of rejection with coal conforming to all of the Rejection Limits set

forth in § 6.1.  If Seller fails to

replace the rejected coal within such ten (10) working day period or the

replacement coal is rightfully rejected, Buyer may purchase coal from another

source in order to replace the rejected coal. 

Seller shall reimburse Byer for (i) the 

excess, if any,  between (a) the

actual price to Buyer for such coal purchased from another source plus the cost

of transporting such coal to Buyer’s plant and (b) the price Buyer would have

paid for such coal under this Agreement, plus the cost to Buyer, if any, of

transporting such coal from the relevant Delivery Point to Buyer’s plant; and

(ii) any and all transportation, storage, handling, or other expenses that have

been incurred by Buyer for rightfully rejected coal.  This remedy is in addition to all of Buyer’s other remedies under

this Agreement and under applicable law and in equity for Seller’s breach.




 




If Buyer fails to reject a shipment of non-conforming

coal which it had the right to reject for failure to meet any or all of the

Rejection Limits set forth in § 6.1 or because such shipment contained

extraneous materials, then such non-conforming coal shall be deemed accepted by

Buyer; however, the quantity Seller is obligated to sell to Buyer under the

Agreement may or may not be reduced by the amount of each such non-conforming

shipment at Buyer’s sole option and the shipment shall nevertheless be

considered “rejectable” under §

6.4.  Buyer shall notify Seller no later

than thirty (30) days following Buyer’s acceptance of such rejectable coal, of

Buyer’s decision to reduce by an amount equal to the amount of rejectable coal,

the Base Quantity which Seller is obligated to sell and deliver to Buyer.  If Buyer does not notify Seller within the

thirty (30) day time period of Buyer’s decision to reduce the Base Quantity by

the amount of rejectable coal, the 




 




4





























 




Base Quantity will remain as defined in § 3.1.  Further, for shipments containing extraneous

materials, which include, but are not limited to, slate, rock, wood, corn

husks, mining materials, metal, steel, etc., the estimated weight of such

materials shall be deducted from the weight of that shipment.




 




6.0          WEIGHTS,

SAMPLING, AND ANALYSIS.




 




6.1           Section

7.1 Weights

is deleted and replaced with the following:




 




7.1                                 Weights.  The weight of the coal delivered

hereunder shall be determined on a per shipment basis by pBuyer on the basis of

scale weights at the generating station(s) unless another method is mutually

agreed upon by the parties.  Such scales

shall be duly reviewed by an appropriate testing agency and maintained in an

accurate condition.  Seller shall have

the right, at Seller’s expense and upon reasonable notice, to have the scales

checked for accuracy at any reasonable time or frequency.  If the scales are found to be over or under

the tolerance range allowable for the scale based on industry accepted

standards, either party shall pay to the other any amounts owed due to such

inaccuracy for a period not to exceed sixty (60) days before the time any

inaccuracy of scales is determined.




 




6.2           Section

7.2 Sampling

and Analysis is deleted and replaced with the following:




 




7.2                                 Sampling and Analysis.  The Seller has sole

responsibility for quality control of the coal and shall forward its “as

loaded” quality to the Buyer as soon as possible.  The sampling and analysis of the coal delivered hereunder shall

be performed by Buyer and the results thereof shall be accepted and used for

the quality and characteristics of the coal delivered under this

Agreement.  All analyses shall be made

in Buyer’s laboratory at Buyer’s expense in accordance with ASTM standards where applicable, or industry-accepted standards.  Samples for analyses shall be taken by any

industry-accepted standard, mutually acceptable to both parties, may be

composited and shall be taken with a frequency and regularity sufficient to

provide reasonably accurate representative samples of the deliveries made

hereunder.  Seller represents that it is

familiar with Buyer’s sampling and analysis practices, and finds them to be

acceptable.  Buyer shall notify Seller

in writing of any significant changes in Buyer’s sampling and analysis

practices.  Any such changes in Buyer’s

sampling and analysis practices shall, except for ASTM or industry accepted

changes in practices, provide for no less accuracy than the sampling and

analysis practices existing at the time of the execution of this Agreement, unless

the Parties otherwise mutually agree.




 




5





























 




Each sample taken by Buyer shall be divided into four

(4) parts and put into airtight containers, properly labeled and sealed.  One (1) part shall be used for analysis by

Buyer; one (1) part shall be used by Buyer as a check sample, if Buyer in its

sole judgment determines it is necessary; one (1) part shall be retained by

Buyer (LG&E) until the twenty-fifth (25th) of the month

following the month of unloading (the “Disposal Date”) or Buyer (KU) until

thirty (30) days (“Disposal Date”) after the sample is taken, and shall be

delivered to Seller for analysis if Seller so requests before the Disposal

Date; and one (1) part (“Referee Sample”) shall be retained by Buyer until the

Disposal Date.  Seller shall be given

copies of all analyses made by Buyer by the twelfth (12th) business

day of the month following the month of unloading, in addition, Buyer (KU) will

send weekly analyses of coal unloadings to Seller.  Seller, on reasonable notice to Buyer shall have the right to

have a representative present to observe the sampling and analyses performed by

Buyer.  Unless Seller requests a Referee

Sample analysis before the Disposal Date, Buyer’s analysis shall be used to

determine the quality of the coal delivered hereunder.  The Monthly Weighted Averages shall be

determined by utilizing the individual shipment analyses.




 




If any dispute arises before the Disposal Date, the

Referee Sample retained by Buyer shall be submitted for analysis to an

independent commercial testing laboratory (“Independent Lab”) mutually chosen

by Buyer and Seller.  All testing of any

such sample by the Independent Lab shall be at requestor’s expense unless the

results differ by more than the applicable ASTM reproducibility standards, in

such case, Buyer will pay for testing. 

If the Independent Lab results differ by more than the applicable ASTM

reproducibility standards, the Independent Lab results will govern.  The cost of the analysis made by the Independent

Lab shall be borne by Seller to the extent that Buyer’s analysis prevails and

by Buyer to the extent that the analysis of the Independent Lab prevails.




 




7.0          

PRICE




 




7.1           Section

8.1 Base

Price is deleted and replaced with the following:




 




8.1                               Base Price.  Except as provided in section 8.4, the base

price (“Base Price”) of the coal to be sold hereunder, excluding any applicable

sales or use tax imposed on Buyer, will be firm in accordance with the

following schedule:




 




	

  Year


  	

   


  	

  Base Price

  (F.O. B. Barge)


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2003


  	

   


  	

  $


  	

  0.9631 per MMBtu


  	

   


  
	

  2004


  	

   


  	

  $


  	

  0.9631 per MMBtu


  	

   


  
							





 




6





























 




7.2           Section

8. 2(b) is deleted and replaced with the following:




 




8.2(b)                  Notwithstanding

the foregoing, for each specification, there shall be no discount if the actual

Monthly Weighted Average meets the applicable Discount Point set forth

below.  Actual Monthly Weighted Averages

will be separately calculated for the Louisville Gas and Electric generating

stations and for the Kentucky Utility generating stations.  However, if the actual Monthly Weighted

Average for the Louisville Gas and Electric generating stations and/or the

Kentucky Utility generating stations fail to meet such applicable Discount Point,

then the discount shall apply to and shall be calculated on the basis of the

difference between the actual Monthly Weighted Average and the Guaranteed

Monthly Weighted Average pursuant to the methodology shown in Exhibit A

attached hereto.  The discount will be

applied only to the particular company whose actual Monthly Weighted Average

failed to meet the Discount Points.




 




	

   


  	

   


  	

  Guaranteed

  Monthly Weighted Average


  	

   


  	

  Discount

  Point


  	

   


  
	

  BTU


  	

   


  	

  Min.


  	

   


  	

  12,200 BTU/LB


  	

   


  	

  12,000 BTU/LB


  	

   


  
	

  ASH


  	

   


  	

  Max.


  	

   


  	

  11.20 LB/MMBTU


  	

   


  	

  11.20 LB/MMBTU


  	

   


  
	

  MOISTURE


  	

   


  	

  Max.


  	

   


  	

  6.50 LB/MMBTU


  	

   


  	

  7.00 LB/MMBTU


  	

   


  
	

  SULFUR


  	

   


  	

  Max.


  	

   


  	

  2.50 LB/MMBTU


  	

   


  	

  2.60 LB/MMBTU


  	

   


  





 




For example, if

the actual Monthly Weighted Average of ash equals 12.00 lb/MMBTU, then the

applicable discount would be (12.00 lb. — 11.20 lb.) X $.0083/lb/MMBTU =

..00664/MMBTU.




 




7.3           Section

8.4 Price

Review is deleted in its entirety.




 




7.4           Section

8.4 New

Impositions is added in its entirety.




 




8.4                                 New

Impositions.  The

above Base Price shall be subject to adjustment only  in the event that new, or changes in existing, applicable Federal

or state statutes, regulations, or other governmental impositions on the coal

to be supplied hereunder, including but not limited to tax increases or

decreases, occur after January 1, 2003, which cause Seller’s cost for providing

coal to Buyer under this Agreement to increase or decrease by more than $.10

per ton.  Seller shall promptly notify

Buyer of any such changes and supply 




 




7





























 




sufficient documentation for Buyer to verify any such

change.  Either Buyer or Seller may

request a Base Price adjustment, which shall be comprised of no more than the

reasonable costs directly associated with the effect of such change on the coal

to be supplied hereunder.  If the non-requesting

party agrees to the requested price adjustment, such adjustment shall be made

effective on the first day of the calendar month following the effective date

of any change, (except when such change is effective on the first day of the

month in which case the adjustment shall be made as of such date).  If the non-requesting party rejects the

request of the requesting party for a Base Price adjustment, the requesting

party, at its option, may terminate this Agreement without liability due to

such termination for either party.




 




8.0          INVOICES,

BILLING AND PAYMENT




 




8.1           Section

9.3 Payment

Procedures for Coal Shipments is deleted and replaced with the

following:




 




9.3                                 Payment

Procedures for Coal Shipments. 

For all coal delivered pursuant to Article Section 5 hereof, and

unloaded at the Buyer’s generating stations  between

the first (1st) and fifteenth (15th) days of any calendar

month, Buyer shall make preliminary payment for seventy-five percent (75%) of

the amount owed for the coal (based on the assumption that the coal will meet

all guaranteed monthly quality parameters) by the twenty-fifth (25th)

day of such month of delivery and unloading. 

If the twenty-fifth (25th) is not a regular working day,

payment shall be made on the next regular working day.  For all coal delivered, as defined in Article

Section 5 hereof, and unloaded at the Buyer’s generating stations between the

sixteenth (16th) and the last day of any calendar month, Buyer shall

make preliminary payment for seventy-five percent (75%) of the delivered and

unloaded coal by the tenth (10th) day of the month following the

month of delivery and unloading.  If the

tenth (10th)

is not a regular workday, payment shall be made on the next regular working

day.




 




Preliminary payment shall be in the amount of

seventy-five percent (75%) of the then current price on a dollar per ton basis

as calculated by the guaranteed monthly weighted average BTU/lb and the then

current Base Price in cents per MMBTU.




 




A reconciliation of amounts paid and amounts owed

shall occur by the   twenty-fifth (25th)

day of the month following the month of delivery and unloading.  (For example, Buyer will make one initial

payment by September 25 for seventy-five percent (75%) of coal delivered and

unloaded September




 




8





























 




1 through 15, and another initial payment by October

10 for seventy-five percent (75%) of coal delivered and unloaded September 16

through 30.  Reconciliation will occur

by October 25 for all deliveries and unloadings made in September.) The

reconciliation shall be made as follows: Seller shall invoice Buyer on or

before the fifteenth (15th) day of the month following the month of

delivery and unloading.  The amount due

for all coal (based on the Base Price minus any Quality Price Discounts)

delivered and unloaded and accepted by Buyer during any calendar month shall be

calculated and compared to the sum of the preliminary payments made for coal

delivered and unloaded and accepted during such month.  The difference shall be paid by or paid to

Seller, as applicable, by the twenty-fifth (25th) day of the month

following the month of delivery and unloading, except, that, if the

twenty-fifth (25th) is not a regular working day, payment shall be

made in the next regular working day. 

Buyer shall electronically transfer all payments to Seller’s account as

designated in writing by Seller.”




 




9.0          NOTICES




 




9.1                                 Section

12.1 Form

and Place of Notice is amended to change the address for notices

to the Seller to read as follows:




 




	

  “Notice if to Seller:


  	

  CONSOL Energy Inc


  	

   


  
	

   


  	

  1800 Washington Road


  	

   


  
	

   


  	

  Pittsburgh,

  Pennsylvania 15241


  	

   


  
	

   


  	

  Attn:  Vice President, Marketing


  	

   


  
	

   


  	

   


  
	

  Notices and

  correspondence of a routine nature shall be addressed to Seller at:


  	

   


  
	

   


  	

   


  
	

   


  	

  CONSOL Energy, Inc.


  	

   


  
	

   


  	

  1800 Washington Road


  	

   


  
	

   


  	

  Pittsburgh,

  Pennsylvania 15241


  	

   


  
	

   


  	

  Attn: General Sales

  Manager


  	

   


  





 




10.0        EXHIBIT A




 




10.1                           Exhibit

A  Sample

Coal Payment Calculations  is deleted and replaced with the

following:




 




9





























Exhibit

A




 




EXHIBIT A




SAMPLE COAL PAYMENT CALCULATIONS




 




For contracts supplied from multiple “origins”, each “origin will be

calculated individually.




 




	

   


  	

   


  	

  Section I


  	

   


  	

  Base Data


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  1)


  	

   


  	

  Base F.O.B. price per ton:


  	

   


  	

  $


  	

  23.50


  	

   


  	

  /ton


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  1a)


  	

   


  	

  Tons of coal delivered:


  	

   


  	

   


  	

   


  	

  tons


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2)


  	

   


  	

  Guaranteed average heat

  content:


  	

   


  	

  12,200 


  	

   


  	

  BTU/LB.


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2r)


  	

   


  	

  As received monthly

  avg. heat content:


  	

   


  	

   


  	

   


  	

  BTU/LB.


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2a)


  	

   


  	

  Energy delivered in

  MMBTU:


  	

   


  	

   


  	

   


  	

  MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  [(Line 1a) *2,000

  lb./ton*(Line 2r)] *MMBTU/1,000,000 BTU


  [(    ) *2,000

  lb./ton*(    )]*MMBTU/1,000,000 BTU


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2b)


  	

   


  	

  Base F.O.B. price per

  MMBTU:


  	

   


  	

  $


  	

  0.9631


  	

   


  	

  MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  {[(Line 1)/(Line 2)]*(1

  ton/2,000 lb.)]}*1,000,000 BTU/MMBTU


  {[(/ton)/(       BTU/LB)]*(1 ton/2,000 lb.)}*1,000,000

  BTU/MMBTU


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  3)


  	

   


  	

  Guaranteed quarterly

  avg. max. sulfur


  	

   


  	

  2.50


  	

   


  	

   LBS./MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  3r)


  	

   


  	

  As received quarterly

  avg. sulfur


  	

   


  	

   


  	

   


  	

  LBS./MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  4)


  	

   


  	

  Guaranteed monthly avg.

  ash


  	

   


  	

  11.20 


  	

   


  	

  LBS./MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  4r)


  	

   


  	

  As received monthly

  avg. ash


  	

   


  	

   


  	

   


  	

  LBS./MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  5)


  	

   


  	

  Guaranteed monthly avg.

  max. moisture


  	

   


  	

  6.50 


  	

   


  	

  LBS./MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  5r)


  	

   


  	

  As received monthly

  avg. moisture


  	

   


  	

   


  	

   


  	

  LBS./MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Section II


  	

   


  	

  Discounts


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Assign a (-) to all

  discounts (round to (5) decimal places)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  6d)


  	

   


  	

  BTU/LB.:  If line 2r <12,000 BTU/lb. then: 


  {1 —{(line 2r) / (line 2)} * $0.2604/MMBTU
 {1 - (  ) / (  )} * $0.2604 =


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  7d)


  	

   


  	

  SULFUR:  If line 3r is greater than 2.60 lbs./MMBTU

  


  [ (line 3r) - (line 3) ] * 0.1232/lb. Sulfur 


  [ (  )- ( ) ] * 0.1232 =


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

  8d)


  	

   


  	

  ASH: If line 4r is

  greater than 11.20 lbs./MMBTU


  [ (line 4r) - (line 4) ] * 0.0083/MMBTU


  [ ( ) - ( ) ] * 0.0083 =


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

  9d)


  	

   


  	

  MOISTURE:  If line 5r is greater than 7.00 lbs./MMBTU


  [ (line 5r) - (line 5) ] * 0.0016/MMBTU


  [ ( ) -  ( ) ] * 0.0016 =


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  





 




10





























 




	

   


  	

   


  	

  Section III


  	

   


  	

  Total

  Price


  Adjustments


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Determine total

  Discounts as follows:


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Assign a (-) to all

  discounts (round to (5) decimal places)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Line 6d:


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Line 7d


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Line 8d


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Line 9d


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  10)


  	

   


  	

  Total Discounts (-):


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Algebraic sum of above:


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  11)


  	

   


  	

  Total evaluated coal

  price = (line 2b) + (line 10)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  12)


  	

   


  	

  Total discount price

  adjustment for Energy delivered:


  (line 2a) * (line 10) (-)


  $            /MMBTU                                +


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

  =


  	

  $


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  13)


  	

   


  	

  Total base cost of coal


  (line 2a) * (line 2b)


  $           /MMBTU                 +


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

  =


  	

  $


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  14)


  	

   


  	

  Total coal payment for

  month


  (line 12) + (line 13)


  $           /MMBTU                 +


  	

   


  	

  $


  	

   


  	

   


  	

  /MMBTU


  	

  =


  	

  $


  	

   


  





 




 




11





























 




IN WITNESS WHEREOF, the parties hereto have

executed this Amendment No. 2 on the day and year below written, but effective

as of the day and year first set forth above.




 




 




	

  LOUISVILLE GAS AND ELECTRIC COMPANY


  	

   


  	

  McELROY COAL COMPANY


  
	

   


  	

   


  	

   


  	

   


  
	

  BY: 


  	

   


  	

   


  	

  BY: 


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  TITLE: 


  	

   


  	

   


  	

  TITLE: 


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  DATE: 


  	

   


  	

   


  	

  DATE: 


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  KENTUCKY UTILITIES COMPANY


  	

   


  	

  CONSOLIDATION COAL COMPANY


  
	

   


  	

   


  	

   


  
	

  BY:  


  	

   


  	

   


  	

  BY: 


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  TITLE:  


  	

   


  	

   


  	

  TITLE:  


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  DATE:  


  	

   


  	

   


  	

  DATE: 


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  EIGHTY FOUR MINING COMPANY


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  BY:  


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  TITLE:  


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  DATE:  


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  CONSOL PENNSYLVANIA COAL COMPANY


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  BY:


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  TITLE:  


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  DATE:


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  ISLAND CREEK COAL COMPANY


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  BY:  


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  TITLE:  


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  DATE:


  	

   


  
						





 




12