Agreements with Piedmont Electric Membership Corporation



 Exhibit 10.15 
 PARTIAL REQUIREMENTS SERVICE AGREEMENT 
 BETWEEN 
 DUKE POWER COMPANY LLC 
 d/b/a DUKE
ENERGY CAROLINAS, LLC 
 AND 
 PIEDMONT ELECTRIC MEMBERSHIP CORPORATION 
 DATED AS OF MAY 12, 2006 







 TABLE OF CONTENTS 
  


							
	 	 	 	  	 	  	Page
	Article 1 Definitions	  	2
				
		 	1.1	  	Definitions.	  	2
				
		 	1.2	  	Interpretation.	  	20
				
		 	1.3	  	Construction.	  	21
		
	Article 2 Term	  	21
				
		 	2.1	  	Effectiveness.	  	21
				
		 	2.2	  	Term.	  	22
				
		 	2.3	  	Termination.	  	22
				
		 	2.4	  	Absolute Nature of Termination.	  	27
		
	Article 3 Conditions Precedent to the Commencement Date	  	28
				
		 	3.1	  	Conditions Precedent to Duke’s Obligations.	  	28
				
		 	3.2	  	Conditions Precedent to EMC’s Obligations.	  	29
				
		 	3.3	  	Notice of Satisfaction of Conditions Precedent.	  	30
				
		 	3.4	  	Waiver of Condition Precedent.	  	30
				
		 	3.5	  	Commencement of Service; Failure of Condition Precedent.	  	30
		
	Article 4 Sale of Electric Capacity and Energy	  	35
				
		 	4.1	  	Classification of Services Provided.	  	35
				
		 	4.2	  	FFR Supplemental Service.	  	35
				
		 	4.3	  	Partial Requirements Service.	  	37
				
		 	4.4	  	Excepted Load.	  	39
				
		 	4.5	  	Good Title.	  	39
				
		 	4.6	  	Power Quality.	  	39
		
	Article 5 EMC Resources	  	40
				
		 	5.1	  	EMC Contract Resources (Commencement Date - December 31, 2010).	  	40
				
		 	5.2	  	EMC Contract Resources (January 1, 2011 - Termination of Agreement).	  	41
				
		 	5.3	  	No Duke Obligation for Customer Resources.	  	44
				
		 	5.4	  	New Customer Resources.	  	44
		
	Article 6 Priority of Service	  	45
				
		 	6.1	  	Interruption of FFR Supplemental Service and Partial Requirements Service.	  	45









							
		 	 6.2
	 	Curtailments of Load.	  	45
				
		 	 6.3
	 	Emergency Load Curtailment Program.	  	45
				
		 	 6.4
	 	Substitute Energy.	  	46
				
		 	 6.5
	 	Substitute Energy Costs.	  	46
		
	 Article 7 Capacity and Energy Charges
	  	46
				
		 	 7.1
	 	Charges During Commencement Date - December 31, 2006.	  	46
				
		 	 7.2
	 	Charges During January 1, 2007 – December 31, 2010.	  	51
				
		 	 7.3
	 	Charges Commencing January 1, 2011.	  	55
				
		 	 7.4
	 	Monthly Reserve Capacity Charges.	  	57
				
		 	 7.5
	 	Payment.	  	58
				
		 	 7.6
	 	Determination of EMC Capacity and Energy Demands.	  	58
		
	 Article 8 Scheduling Agent Services
	  	59
				
		 	 8.1
	 	Appointment of Duke as Scheduling Agent.	  	59
				
		 	 8.2
	 	Scheduling Policies.	  	59
				
		 	 8.3
	 	Protocols.	  	59
				
		 	 8.4
	 	Scheduling Agent Services (Commencement Date through December 31, 2010).	  	59
				
		 	 8.5
	 	Scheduling Agent Services (January 1, 2011 through Termination).	  	60
				
		 	 8.6
	 	New EMC Resources.	  	61
				
		 	 8.7
	 	Errors in Schedules.	  	61
				
		 	 8.8
	 	EMC Responsibilities.	  	61
				
		 	 8.9
	 	Duke’s Liability.	  	62
				
		 	 8.10
	 	Termination Assistance Service.	  	62
		
	 Article 9 Transmission and Ancillary Services
	  	62
				
		 	 9.1
	 	Delivery Obligations.	  	62
				
		 	 9.2
	 	Transmission Arrangements.	  	62
				
		 	 9.3
	 	Ancillary Services.	  	62
				
		 	 9.4
	 	Regional Transmission Organization.	  	63
		
	 Article 10 Operating Committee
	  	64
				
		 	 10.1
	 	Operating Committee.	  	64
				
		 	 10.2
	 	Duties of the Operating Committee.	  	64









							
		
	 Article 11 Demand Side Management
	  	64
				
		 	 11.1
	 	Availability of Demand Side Management Resource Programs.	  	64
				
		 	 11.2
	 	Changes to Demand Side Management Resource Programs.	  	64
				
		 	 11.3
	 	Credits.	  	64
				
		 	 11.4
	 	Necessary Arrangements.	  	65
				
		 	 11.5
	 	Start-Up Conditions.	  	65
				
		 	 11.6
	 	Periodic Testing.	  	65
				
		 	 11.7
	 	EMC Demand Side Management.	  	66
		
	 Article 12 Modification of This Agreement
	  	67
				
		 	 12.1
	 	Unilateral Modification.	  	67
				
		 	 12.2
	 	Mobile-Sierra Public Interest Standard.	  	67
				
		 	 12.3
	 	Changes To Certain Charge Components.	  	67
				
		 	 12.4
	 	Standard of Review for Permitted Changes.	  	68
				
		 	 12.5
	 	Scope of Waiver.	  	68
		
	 Article 13 Billing and Payment
	  	68
				
		 	 13.1
	 	Billing Period.	  	68
				
		 	 13.2
	 	Billing Statements.	  	68
				
		 	 13.3
	 	Timeliness of Payment.	  	69
				
		 	 13.4
	 	Netting of Payments.	  	69
				
		 	 13.5
	 	Disputes and Adjustments of Statements.	  	69
				
		 	 13.6
	 	Records and Audits.	  	70
		
	Article 14 Dispute Resolution	  	72
				
		 	 14.1
	 	Arbitration.	  	72
				
		 	 14.2
	 	Negotiation and Notice of Arbitration.	  	72
				
		 	 14.3
	 	Individual, Joint or Consolidated Arbitration.	  	72
				
		 	 14.4
	 	Selection of Arbitration Process.	  	73
				
		 	 14.5
	 	Initiation of Arbitration.	  	74
				
		 	 14.6
	 	Arbitration Processes.	  	74
				
		 	 14.7
	 	Decision.	  	77
				
		 	 14.8
	 	Expenses.	  	78
				
		 	 14.9
	 	Effect of Dispute Resolution Procedures.	  	78
				
		 	 14.10
	 	Confidentiality.	  	78









							
	 Article 15 Credit and Collateral Requirements
	  	78
				
		 	 15.1
	 	Posting of Collateral.	  	78
				
		 	 15.2
	 	Material Adverse Changes.	  	78
				
		 	 15.3
	 	Continuing Nature of Collateral Requirement.	  	79
				
		 	 15.4
	 	Interest on Cash Used as Collateral.	  	79
				
		 	 15.5
	 	Grant of Security Interest/Remedies.	  	79
				
		 	 15.6
	 	Notice, Information.	  	80
				
		 	 15.7
	 	Definitions.	  	80
		
	 Article 16 Additional Terms
	  	82
				
		 	 16.1
	 	Representations Warranties and Covenants.	  	82
				
		 	 16.2
	 	Assignment.	  	85
				
		 	 16.3
	 	Liability and Indemnification.	  	86
				
		 	 16.4
	 	Force Majeure.	  	87
				
		 	 16.5
	 	Events of Default and Remedies.	  	88
				
		 	 16.6
	 	Confidential Information.	  	90
				
		 	 16.7
	 	Governmental Liabilities.	  	91
				
		 	 16.8
	 	Choice of Law.	  	92
				
		 	 16.9
	 	Survival of Obligations.	  	92
				
		 	 16.10
	 	Entire Agreement.	  	92
				
		 	 16.11
	 	Cost Projections.	  	92
				
		 	 16.12
	 	Unique Agreement.	  	93
				
		 	 16.13
	 	No Transfer of Rights.	  	93
				
		 	 16.14
	 	No Partnership.	  	93
				
		 	 16.15
	 	Third Parties.	  	93
				
		 	 16.16
	 	Waiver.	  	93
				
		 	 16.17
	 	Time of Essence.	  	93
				
		 	 16.18
	 	Headings.	  	94
				
		 	 16.19
	 	Severability.	  	94
				
		 	 16.20
	 	Counterparts.	  	94
				
		 	 16.21
	 	No Public Announcement.	  	94
				
		 	 16.22
	 	Notices.	  	94









							
				
		 	 16.23
	  	No Dedication of the System.	  	95
				
		 	 16.24
	  	Stranded Costs.	  	95
				
		 	 16.25
	  	Electric Peak Load and Energy Information to be provided by EMC.	  	96
				
		 	 16.26
	  	Demand and Energy Charge and Rate Information to be Provided by Duke.	  	96
				
		 	 16.27
	  	Further Assurances.	  	96
				
		 	 16.28
	  	Applicable Laws and Regulations.	  	96
				
		 	 16.29
	  	Equitable Relief	  	96
				
		 	 16.30
	  	PURPA Assistance.	  	96
				
		 	 16.31
	  	SERC and NERC Data Reporting and Compliance Assistance.	  	96

 SCHEDULES 
  

			
	 1
	  	 Annual Production Capacity and Energy Rates

	
	 ATTACHMENTS
  

	 3-1
	  	Calculation of the Excess Annual Capacity Charges in the Duke-Blue Ridge Agreement, Duke-Piedmont Agreement and Duke-Rutherford Agreement
		
	 4-1
	  	EMC’s Base Obligation and Fixed Forward Resource
		
	 4-2
	  	Calculation of Reduction to EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods
		
	 4-3
	  	Partial Requirements Resources
		
	 7-2
	  	Calculation of the Monthly Demand Charges in the Duke-Blue Ridge Agreement, Duke-Piedmont Agreement and Duke-Rutherford Agreement
		
	 7-3
	  	Calculation of Piedmont Allocated Share of Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit
		
	 7-4
	  	Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy
Credit
		
	 7-5
	  	Example showing Calculations of Piedmont Energy Purchase Amounts and Piedmont Energy Credit Amount









			
	 7-6
	  	Example showing Calculations of EMC Group Energy Purchase Amounts and EMC Group Energy Credit Amount
		
	 7-7
	  	Example showing the calculation of Monthly Billing Demand under Section 7.2.6.3.2
		
	 7-8
	  	Examples showing the calculation of Monthly Billing Demand under Section 7.3.2.2
		
	 7-9
	  	Demand Rate Adjustment Percentage and Annual Percentage
		
	 7-10
	  	Example of Demand Rate Adjustment Percentage and Annual Percentage
		
	 8-1 I
	  	Terms and Conditions for the Scheduling of Power Supplied by North Carolina Electric Membership Corporation to its Independent Members
		
	 8-1 II
	  	Terms and Conditions for Obtaining Transmission Services Adequate to Deliver from the Interface Points Established under the Wholesale Power Supply Agreement of NCEMC for Sales to its
Independent Members








 PARTIAL REQUIREMENTS SERVICE AGREEMENT 
 BETWEEN 
 DUKE POWER COMPANY LLC 
 d/b/a DUKE ENERGY CAROLINAS, LLC 
 AND 
 PIEDMONT ELECTRIC MEMBERSHIP CORPORATION 
 THIS PARTIAL REQUIREMENTS SERVICE AGREEMENT, dated as of May 12, 2006, is entered into by and between Piedmont Electric Membership Corporation, a
corporation organized and existing under Article 2 of Chapter 117 of the General Statutes of North Carolina, together with any permitted successor or assignee (“EMC” or “Piedmont”), and Duke Power Company LLC, d/b/a Duke Energy
Carolinas, LLC, a limited liability company organized and existing under the laws of North Carolina, together with any permitted successor or assignee (“Duke”). Hereinafter, Duke and EMC are sometimes also referred to individually as a
“Party” or collectively as the “Parties.” 
 W I T N E S S E T H 
 WHEREAS, Duke is engaged in the business of generating, transmitting, and distributing electric capacity and energy in portions of the States of North
Carolina and South Carolina, and provides electric service to retail and wholesale customers; and 
 WHEREAS, EMC is an electric membership
corporation that provides retail electric service to its members in the State of North Carolina, and is authorized to purchase electric energy at wholesale for resale; and 
 WHEREAS, EMC is a member of North Carolina Electric Membership Corporation (“NCEMC”) and is a party to the WPSA; and 
 WHEREAS, EMC is a party to the PPA; and 
 WHEREAS, EMC has elected to arrange independently from NCEMC for its future requirements for electric capacity and energy in addition to those to which EMC has entitlements under existing contractual arrangements; and 
 WHEREAS, EMC has reviewed its future needs for electric capacity and energy and Scheduling Agent Services and has determined that in order for EMC to
provide for a portion of EMC’s Native Load, EMC is willing to purchase electric capacity and energy from Duke and is also willing to purchase Scheduling Agent Services from Duke for the duration of, and subject to the terms of, this Agreement;
and 







 WHEREAS, Duke is willing to plan and provide for the electric capacity and energy requirements needed to
meet a portion of EMC’s Native Load and to provide Scheduling Agent Services for the duration of, and subject to the terms of, this Agreement; and 
 WHEREAS, Duke and EMC have agreed to the terms and conditions upon which the sale of electric capacity and energy and provision of Scheduling Agent Services may be conducted between the Parties. 
 NOW THEREFORE, in consideration of the premises and the mutual representations, warranties and covenants set forth in this Agreement, and for other good
and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties, each intending to be legally bound, hereby agree as follows: 
 Article 1 
 Definitions 
  

	1.1	Definitions. 

 Defined terms in this Agreement are
capitalized. The defined terms used in this Agreement have the following meanings: 
 “Accounting Requirements” shall have the
meaning specified in Section 15.7. 
 “Administrator” shall mean the RUS Administrator. 
 “Adverse Ruling” shall have the meaning specified in Section 3.1(c). 
 “Affiliate” means, with respect to any person, any other person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such person. For purposes of this definition, “control” when used with respect to any person means the power to direct the management and policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing. 
 “Agreement” means this Partial Requirements Service Agreement, together with each Schedule and Attachment, each as amended from time to time. 
 “Ancillary Services” means any and all ancillary services provided by the Transmission Provider in connection with any Transmission Service
arranged by EMC for the delivery of electric energy provided under this Agreement from the Delivery Point. 
 “Annual Capacity
Factor” shall have the meaning specified in Section 4.3.3.1. 
 “Annual Capacity Price” shall have the meaning specified
in Section 3.5.2.3.1, 3.5.2.3.2, 3.5.2.3.3 or 7.2.2, as applicable. 
  

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 “Annual Capacity Quantity” shall have the meaning specified in Sections 3.5.2.3.1, 3.5.2.3.2,
3.5.2.3.3 or 7.2.2, as applicable. 
 “Annual Percentage” shall be calculated as shown on Attachment 7-9. 
 “Annual Planning Period” means, the period (as of the Commencement Date either May through September or October through April) designated in
the then most recent Duke Annual Plan (or the successor thereto) that Duke files with the NCUC as the period during which Duke’s annual peak load is projected to occur; provided, that in the event that NCUC ceases to require Duke to file or
filing becomes voluntary and Duke ceases to file the Duke Annual Plan (or a successor thereto) with the NCUC, “Annual Planning Period” shall mean the period (either May through September or October through April) in which Duke’s
annual peak load is projected to occur under the generation planning criteria for Duke’s Generation System used by Duke to meet Duke’s Native Load. 
 “Assignment for Security” shall have the meaning specified in Section 16.2.2. 
 “Bankrupt” means that the Defaulting Party or any guarantor of such Party: 
 (i) is dissolved (other than
pursuant to a consolidation, amalgamation or merger); 
 (ii) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become due; 
 (iii) makes a general assignment,
arrangement or composition with or for the benefit of its creditors; 
 (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditor’s rights, or a petition is presented for its winding-up or liquidation; 
 (v) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); 
 (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or substantially all of its assets; 
 (vii) has a secured party
take possession of all or substantially all of its assets, or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all of its assets; 
 (viii) causes or is subject to any event with respect to it which, under the applicable Laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (i) to (vii) inclusive; or 
  

 3 








 (ix) takes any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts. 
 “Bankruptcy Code” means Title 11 of the United States Code or any successor
thereto. 
 “Base Annual Capacity Charge” means the charge set forth in Section 3.5.2.3.4 or 7.2.2, as applicable. 

“Baseload Resources” means the Partial Requirements Resources identified as Baseload Resources in Attachment 4-3. 
 “Billing Dispute Notice” shall have the meaning specified in Section 13.5. 
 “Billing Period” means the period beginning on the Commencement Date and ending on the last Day of the Month in which the Commencement Date
occurred, and each succeeding Month thereafter. 
 “Blue Ridge” means Blue Ridge Electric Membership Corporation. 
 “Blue Ridge Energy Credit Amount” means the Blue Ridge Energy Credit Amount as determined in Section 7.1.5.9 of the Duke-Blue Ridge
Agreement. 
 “Blue Ridge Energy Purchase Amount” means the Blue Ridge Energy Purchase Amount as determined in Section 7.1.5.9
of the Duke-Blue Ridge Agreement. 
 “Business Day” means any Day other than Saturday, Sunday, or any Day on which the Federal
Reserve member banks are not open for business. 
 “Catawba Nuclear Station” means that certain nuclear power plant located near
Rock Hill in York County, South Carolina. 
 “CFC” shall have the meaning specified in Section 15.7. 
 “Claiming Party” shall have the meaning specified in Section 16.4. 
 “Claims” means all third party claims or actions, threatened or filed, and whether groundless, false, or fraudulent, that directly or
indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys’ fees, and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed
prior to or after the termination of this Agreement. 
 “CoBank” shall have the meaning specified in Section 15.7. 

“Combined Cycle Resources” means the Partial Requirements Resources identified as Combined Cycle Resources in Attachment 4-3.

 “Commencement Date” shall have the meaning specified in Section 2.1.1. 
  

 4 








 “Commercially Reasonable Efforts” means efforts which are reasonably within the contemplation
of the Parties at the Effective Date; which require the performing Party that is acting in good faith to take action or expend funds reasonably in relation to the benefit to be obtained by the other Party; and that require a level of effort which
would be devoted by an independent entity reasonably in the electric utility industry in light of all of the relevant circumstances. 
 “Confidential Information” means any documents, analyses, compilations, studies, or other materials prepared by a Party or its Representatives that contain or reflect either (a) any costs of Duke’s Generation System,
including system average costs, System Incremental Costs, Territorial Incremental Costs, and Territorial Decremental Costs, or (b) written or oral data or information that is privileged, confidential, or proprietary and is marked as
“Confidential.” “Confidential Information” shall also mean all subsequently prepared documents, analyses, compilations, studies, or other materials by a Party or its Representative that are derived from previously marked
“Confidential” data or information. Notwithstanding the foregoing, information shall not be deemed Confidential Information if it: 
 (i) is a matter of public knowledge at the time of its disclosure or is thereafter published in or otherwise ascertainable from any source available to the public without breach of this Agreement, 
 (ii) constitutes information which is obtained from a third party (who or which is not an Affiliate of one of the Parties) other than by
or as a result of unauthorized disclosure, or 
 (iii) prior to the time of disclosure had been independently developed by the
receiving Party or its Affiliates not utilizing improper means. 
 “Control Area” means an electric power system or combination of
electric power systems to which a common automatic generation control scheme is applied in order to match the power output of the generators within the electric power system and electric energy imported into the electric power system, with the load
located within the electric power system. 
 “Cover Costs” shall have the meaning specified in Section 6.4. 
 “CP&L” means Carolina Power & Light Company (d/b/a Progress Energy Carolinas, Inc.). 
 “CPR” shall have the meaning specified in Section 14.1. 
 “Day” means a day, commencing at 00:00:00 Eastern Time of such calendar day and ending 23:59:59 Eastern Time of the same calendar day. 
 “Debt Service Coverage Ratio” shall have the meaning specified in Section 15.7. 
 “Defaulting Party” shall have the meaning specified in Section 16.5.1. 
  

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 “Delivery Points” means any available points on the Transmission System where electric energy
is delivered for Transmission Service. 
 “Demand Rate Adjustment Percentage” shall be calculated as shown on Attachment
7-9. 
 “Demand Side Management Resource Programs” means the demand side management resource programs that Duke makes available
to Duke’s Native Load retail customers within the State of North Carolina under riders approved and on file with the NCUC, as such riders may be amended from time to time. 
 “Depreciation and Amortization Expense” shall have the meaning specified in Section 15.7. 
 “Dispatched Baseload Resources” means the Baseload Resources that Duke dispatches pursuant to Section 4.3.4. 
 “Dispatched Combined Cycle Resources” means the Combined Cycle Resources that Duke dispatches pursuant to Section 4.3.3. 
 “Disputed Amount” shall have the meaning specified in Section 13.5. 
 “Duke” shall have the meaning specified in the first paragraph hereof, provided that for purposes of this Agreement “Duke” shall not
include Duke Transmission and provided further, Duke intends to effectuate a name change to Duke Energy Carolinas, LLC and upon the effectiveness of such name change, references to “Duke” shall mean Duke Energy Carolinas, LLC. 

“Duke Annual Plan” means the Annual Report Duke is required to file with the NCUC in accordance with NCUC Rule R8-60 or successor
thereto. In the event Duke is no longer required to file the Annual Report with the NCUC or filing becomes voluntary, “Duke Annual Plan” shall mean the generation planning criteria for Duke’s Generation System used by Duke to meet
Duke’s Native Load. 
 “Duke-Blue Ridge Agreement” means the Partial Requirements Service Agreement between Duke and Blue
Ridge Electric Membership Corporation, dated May 12, 2006. 
 “Duke Hourly Energy Charge” shall have the meaning specified in
Section 7.1.5.1 or 7.2.5.2, as applicable. 
 “Duke Hourly Reconciliation Charge” shall have the meaning specified in
Section 7.1.5.11. 
 “Duke Monthly Energy Charge” means, with respect to the period beginning on the Commencement Date and
continuing through December 31, 2006, the charge set forth in Section 7.1.5.1; with respect to the period January 1, 2007, through December 31, 2010, the charge set forth in Section 7.2.5.1 or 7.2.6.4, as applicable; and
with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, the charge set forth in Section 7.3.3. 
  


 6 








 “Duke Monthly Reconciliation Charge” shall have the meaning specified in Section 7.1.5.11.

 “Duke Native Load” or “Duke’s Native Load” means the electric capacity and energy demands imposed on Duke by its
retail customers located within Duke’s Service Area, as such Service Area may be amended from time to time in accordance with Laws or pursuant to the requisite approvals of the Governmental Authorities that have jurisdiction to regulate retail
electric service within such Service Area, including by merger or acquisition, plus the demands of Duke’s wholesale power sales customers served under contracts with a firmness of supply equal to such retail customers. 
 “Duke-Piedmont Agreement” means this Agreement. 
 “Duke-Rutherford Agreement” means the Partial Requirements Service Agreement between Duke and Rutherford Electric Membership Corporation, dated as of May 12, 2006. 
 “Duke Reconciliation Amount” shall have the meaning specified in Section 7.1.5.11. 
 “Duke’s Generation Planning Practices” means the then-current generation planning practices of Duke that are reflected in the Duke Annual
Plan. 
 “Duke’s Generation System” means Duke’s owned or leased electric generating facilities and purchased
power resources the output of which are used to serve Duke’s Native Load located within the State of North Carolina, as such system may be amended from time to time by any means including by merger or acquisition. 
 “Duke Schedule 1 Demands” shall have the meaning specified in Schedule 1, Section I.B. 
 “Duke Total Hourly Energy Charge” shall have the meaning specified in Section 7.1.5.2. 
 “Duke Transmission” means Duke Electric Transmission, a division of Duke, or any successor thereto. 
 “Eastern Time” means the time in effect in Charlotte, North Carolina, whether Eastern Standard Time or Eastern Daylight Saving Time.

 “Effective Date” shall have the meaning specified in Section 2.1.1. 
 “EMC” or “Piedmont” shall have the meaning specified in the first paragraph of this Agreement. 
 “EMC Call Signal”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006, shall have the
meaning specified in Section 7.1.5.9; and with respect to the period beginning January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.5.5. 
 “EMC Coincident Peak Demand” shall have the meaning specified in Section 3.5.2.3.5.1 or 7.2.3.2, as applicable. 
  

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 “EMC Contract Resources”, with respect to the period beginning on the Commencement Date and
continuing through December 31, 2010, shall have the meaning specified in Section 5.1.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning
specified in Section 5.2.1. 
 “EMC Demand Side Management Resource Programs” means the demand side management resource
programs that EMC makes available to EMC’s Native Load customers. 
 “EMC Excess Annual Capacity Quantity” shall have the
meaning specified in Section 3.5.2.3.5.1 or 7.2.3.2, as applicable. 
 “EMC Group” means collectively Piedmont, Blue Ridge,
and Rutherford. 
 “EMC Group Annual Capacity Quantity” means the sum of: (i) the Annual Capacity Quantity set forth in
Section 3.5.2.3 of this Agreement; (ii) the Annual Capacity Quantity set forth in Section 3.5.2.3 of the Duke-Blue Ridge Agreement; and (iii) the Annual Capacity Quantity set forth in Section 3.5.2.3 of the Duke-Rutherford
Agreement. 
 “EMC Group Call Signal” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Coincident Peak Demand” shall have the meaning specified in Section 3.5.2.3.5.3. 
 “EMC Group Combined Energy Credit Amount” means the sum of (i) the Blue Ridge Energy Credit Amount, (ii) the Piedmont Energy Credit
Amount, and (iii) the Rutherford Energy Credit Amount. 
 “EMC Group Combined Energy Purchase Amount” means the sum of
(i) the Blue Ridge Energy Purchase Amount, (ii) the Piedmont Energy Purchase Amount, and (iii) the Rutherford Energy Purchase Amount. 
 “EMC Group Combined Excess Annual Capacity Quantity” shall have the meaning specified in Section 3.5.2.3.5.2. 
 “EMC Group Combined Monthly Demand Quantity” shall have the meaning specified in Section 7.1.4.2. 
 “EMC Group Energy Credit Amount” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Energy
Purchase Amount” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Excess Annual Capacity Quantity”
shall have the meaning specified in Section 3.5.2.3.5.3. 
 “EMC Group Monthly Demand Quantity” shall have the meaning
specified in Section 7.1.4.3. 
  

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 “EMC Group Native Load” means the sum of (i) the EMC Native Load under this Agreement,
(ii) the EMC Native Load under the Duke-Blue Ridge Agreement, and (iii) the EMC Native Load under the Duke-Rutherford Agreement. 
 “EMC Group Put Signal” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Reconciliation
Amount” shall have the meaning specified in Section 7.1.5.12. 
 “EMC Group Total Hourly Energy Credit” shall have the
meaning specified in Section 7.1.5.6. 
 “EMC Group’s Base Obligation” means the sum of (i) EMC’s Base
Obligation under Section 4.2.2 of this Agreement, (ii) EMC’s Base Obligation under Section 4.2.2 of the Duke-Blue Ridge Agreement, and (iii) EMC’s Base Obligation under Section 4.2.2 of the Duke-Rutherford
Agreement. 
 “EMC Hourly Demand” shall have the meaning specified in Section 3.5.2.3.5.1 or 7.2.3.2, as applicable.

 “EMC Hourly Energy Credit”, with respect to the period beginning on the Commencement Date and continuing through
December 31, 2006, shall have the meaning specified in Section 7.1.5.5; and with respect to the period beginning January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.5.4. 
 “EMC Monthly Demand Quantity”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006,
shall have the meaning specified in Section 7.1.4.1; and with respect to the period beginning January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.4.1. 
 “EMC Monthly Energy Credit”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006, shall
mean the credit set forth in Section 7.1.5.5; and with respect to the period beginning January 1, 2007, through December 31, 2010, shall mean the credit set forth in Section 7.2.5.3. 
 “EMC Native Load” or “EMC’s Native Load” means the electric capacity and energy demands imposed on EMC by its retail customers
located within EMC’s Service Area, excluding any such demands that constitute Non-Duke Control Area Load or Excepted Load. 
 “EMC
Peak Hour Billing Demand”, with respect to the period January 1, 2007 through December 31, 2010, shall have the meaning specified in Section 7.2.6.3.2, and with respect to the period beginning January 1, 2011, and continuing
through the termination of this Agreement, shall have the meaning specified in Section 7.3.2.2. 
 “EMC Put Signal”, with
respect to the period beginning on the Commencement Date and continuing through December 31, 2006, shall have the meaning specified in Section 7.1.5.9; and with respect to the period beginning January 1, 2007, through
December 31, 2010, shall have the meaning specified in Section 7.2.5.5. 
  

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 “EMC Scheduled Amount” shall have the meaning specified in Section 4.2.3. 
 “EMC’s Base Obligation” shall have the meaning specified in Section 4.2.2. 
 “Energy Cost” shall have the meaning specified in Section 4.3.3.3. 
 “Energy Imbalance Service” means the service provided under Schedule 4 of the Transmission Provider’s OATT. 
 “Equitable Defenses” means, with respect to a proceeding involving this Agreement, the discretion of a Governmental Authority to make or enter
an order of bankruptcy, insolvency, reorganization, or other ruling affecting creditors’ rights generally, or exercising other discretion committed to the court’s or agency’s equitable powers. 
 “Equity” shall have the meaning specified in Section 15.7. 
 “Event of Default” shall have the meaning specified in Section 16.5.1. 
 “Excepted
Load” shall have the meaning specified in Section 4.4. 
 “Excess Annual Amount” means the quantity specified in
Section 3.5.2.3.5. 
 “Excess Annual Capacity Charge” means the charge specified in Section 3.5.2.3.5 or 7.2.3, as
applicable. 
 “Excess Annual Capacity Price” shall have the meaning specified in Section 3.5.2.3.1, 3.5.2.3.2, 3.5.2.3.3 or
7.2.3.1, as applicable. 
 “Extension Term” shall have the meaning specified in Section 2.2.2. 
 “Federal Power Act” means the Federal Power Act, 16 U.S.C. §§791a-828c, as amended from time to time. 
 “FERC” means the Federal Energy Regulatory Commission or any successor agency that administers the Federal Power Act. 
 “FFR Supplemental Service” shall have the meaning specified in Sections 4.1 and 4.2. 
 “Firm Energy” means: electric energy which meets the Transmission Provider’s (or successor Transmission Provider’s) standards related
to character of service and firmness of supply, including standards that may require the designation of specific capacity sources, as such standards exist on the Effective Date or as they may be amended from time-to-time, such that EMC may:
(i) designate the PPA as a Network Resource or successor service designation under its Network Integration Transmission Service Agreement with Transmission Provider, or successor Transmission Provider; and (ii) satisfy applicable
requirements such that the Network Integration Transmission Service or successor service designation can be used to accept and deliver the electric energy pursuant to the highest firm transmission priority of such Transmission Provider; or
(iii) satisfy the standards of any successor Transmission Provider that 
  

 10 








 might have the right to determine the standards for character of service and firmness of supply, including standards that
may require the designation of specific capacity sources, under which EMC may designate the PPA, such that the requirements of the highest firm transmission priority are met under its Network Integration Transmission Service Agreement (or as the
nearest equivalent thereto remains available to EMC under the successor Transmission Provider’s requirements). 
 “Firm Sales”
means wholesale electric sales other than Non-Firm Sales. 
 “Fitch Rating” means Fitch, Inc., a unit of Fimalac, S.A. 

“Fixed Forward Resource” or “FFR Resource” means EMC’s contractual entitlements to electric capacity and energy under the
PPA. 
 “Force Majeure” shall have the meaning specified in Section 16.4. 
 “Fuel Rate”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning specified in
Section 7.2.6.4.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.3.1. 
 “Government” means the United States government. 
 “Governmental Authority” means any federal, state, local or other governmental, regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature,
rulemaking board, court, tribunal, arbitrating body, government-owned corporation or other governmental authority or department thereof. 
 “Governmental Charges” means all taxes, fees, assessments and other charges imposed by any Governmental Authority. 
 “Hour” means one of the twenty-four (24) clock hours in a Day. 
 “Hourly Fuel Charge”, with respect to the
period January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.6.4.1, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the
meaning specified in Section 7.3.3.1. 
 “Hourly Inter-EMC Transfer Reconciliation Charge” shall have the meaning specified in
Section 7.1.5.13. 
 “Hourly Variable O&M Charge”, with respect to the period January 1, 2007, through
December 31, 2010, shall have the meaning specified in Section 7.2.6.4.2, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the meaning specified in
Section 7.3.3.2. 
 “Initial Term” shall have the meaning specified in Section 2.2.1. 
  

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 “Impasse Notice” shall have the meaning specified in Section 14.2. 
 “Interest Expense” shall have the meaning specified in Section 15.7. 
 “Interest Rate” means either (i) the Prime Rate plus two (2%) percent, or (ii) the maximum lawful rate permitted by applicable
Law, whichever is less. 
 “Interval”, with respect to the period beginning on the Commencement Date and continuing through
December 31, 2006, shall have the meaning specified in Section 7.1.5.9 and 7.1.5.10, as applicable; and with respect to the period beginning January 1, 2007, through December 31, 2010, shall have the meaning specified in
Section 7.2.5.5. 
 “ITC” means an independent transmission company. 
 “ISO” means an independent system operator. 
 “kWh” means kilowatt-hour, a unit of electric energy. 
 “kW” means kilowatt. 

“Law” means any law, rule, regulation, order, writ, judgment, decree, or other legal or regulatory determination by a court, regulatory
agency, or other Governmental Authority of competent jurisdiction. 
 “Legal Proceeding” means any suit, hearing, or proceeding by
or before any court or any Governmental Authority. 
 “Light Load Periods” means any Hour during which EMC’s Base Obligation
is reduced because certain of its entitlements to electric capacity and energy under the WPSA are reduced as a result of NCEMC’s Native Load in either of the CP&L east or west Control Areas or Duke Control Area being insufficient to permit
NCEMC to have access to its full contractual entitlement to electric capacity and energy from certain generation or purchased power resources. 
 (i) For each Hour beginning with the Commencement Date and continuing through December 31, 2010, or any portion thereof in which this Agreement is in effect, Light Load Periods in the CP&L east and west
Control Areas, only occur when NCEMC’s Native Load in such CP&L east and west Control Area is less than the contractual amount specified in the Service Obligation Resources (“SORs”). The amount of any reduction in NCEMC’s
entitlement to electric capacity and energy under the SORs is allocated to EMC in accordance with the WPSA. In the Duke Control Area, Light Load Periods only occur when a generating unit at either the Catawba Nuclear Station or the McGuire Nuclear
Station is off-line or de-rated and NCEMC’s Native Load in the Duke Control Area is less than 623.5 MWs. The amount of any reduction in NCEMC’s entitlement to electric capacity and energy is allocated to EMC in accordance with the WPSA.

  

 12 








 (ii) For each Hour beginning January 1, 2011, and continuing through the termination
of this Agreement, Light Load Periods only occur when a generating unit at either the Catawba Nuclear Station or the McGuire Nuclear Station is off-line or de-rated and NCEMC’s Native Load in the Duke Control Area is less than 623.5 MWs. The
amount of any reduction in NCEMC’s entitlement to electric capacity and energy is allocated to EMC in accordance with the WPSA. 
 “Material Adverse Change” or “MAC” shall have the meaning specified in Section 15.2. 
 “Material
Adverse Ruling” shall have the meaning specified in Section 2.3.2.2(c). 
 “Material Adverse Ruling Termination Date”
shall have the meaning specified in Section 2.3.2.2. 
 “Maximum Demand Hour”, with respect to the period beginning on the
Commencement Date and continuing through December 31, 2006, shall have the meaning specified in Section 7.1.4.3; and with respect to the period January 1, 2007 through December 31, 2010, shall have the meaning specified in
Section 7.2.4.1. 
 “McGuire Nuclear Station” means that certain nuclear plant located in Huntersville, North Carolina.

 “Month” means a calendar month, commencing at one (1) minute prior to 12:01 a.m. Eastern Time on one of January 1,
February 1, March 1, April 1, May 1, June 1, July 1, August 1, September 1, October 1, November 1 or December 1 and ending at one (1) minute after 11:59 p.m. Eastern Time of the succeeding
January 31, February 28 or 29 (during a leap year), March 31, April 30, May 31, June 30, July 31, August 31, September 30, October 31, November 30 or December 31. 
 “Monthly” shall have a meaning correlative to that of Month. 
 “Monthly Billing Demand”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.6.3.2, and with respect to the period beginning
January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.2.2. 
 “Monthly Demand Amount” means the quantity specified in Section 7.1.4. 
 “Monthly Demand Charge” means,
with respect to the period beginning on the Commencement Date and continuing through December 31, 2006, the charge set forth in Section 7.1.4; with respect to the period January 1, 2007, through December 31, 2010, the charge set
forth in Section 7.2.4 or 7.2.6.3, as applicable; and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, the charge set forth in Section 7.3.2. 
 “Monthly Demand Rate”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006, shall have
the meaning specified in Section 7.1.4; with respect to the period January 1, 2007 through August 31, 2008, shall have the 
  

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 meaning specified in Section 7.2.4 or 7.2.6.3.1, as applicable, except as provided in Sections 3.5.2.3.1, 3.5.2.3.2
and 3.5.2.3.3; with respect to the period September 1, 2008, through December 31, 2010, shall have the meaning specified in Section 7.2.4 or 7.2.6.3.1, as applicable, and with respect to the period beginning January 1, 2011, and
continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.2.1. 
 “Monthly Fuel
Charge”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.6.4.1, and with respect to the period beginning January 1, 2011, and continuing through the
termination of this Agreement, shall have the meaning specified in Section 7.3.3.1. 
 “Monthly Inter-EMC Energy Transfer
Reconciliation Charge” shall have the meaning specified in Section 7.1.5.13. 
 “Monthly Replacement Energy Charge” shall
have the meaning specified in Section 4.2.4. 
 “Monthly Reserve Capacity Charge” shall have the meaning specified in
Section 7.4. 
 “Monthly Scheduling Agent Service Charge” shall have the meaning specified in Section 7.1.6. 

“Monthly Variable O&M Charge”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning
specified in Section 7.2.6.4.2, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the meaning specified in Section 7.3.3.2. 
 “Moody’s” means Moody’s Investors Services, Inc. 
 “MSCG” means Morgan Stanley Capital Group Inc. 
 “MWh” means megawatt-hour, a unit of
electric energy. 
 “MW” means megawatt. 
 “NCEMC” shall have the meaning specified in the Recitals of this Agreement. 
 “NCEMC Native
Load” means the electric and energy demands imposed on NCEMC by its members for resale to such members’ retail customers, and shall include wholesale sales of electric capacity and energy by Blue Ridge to New River except wholesale sales
of electric capacity and energy made in accordance with Section 4.4.1 of the Duke-Blue Ridge Agreement. 
 “NCEMC Policies”
shall have the meaning specified in Section 8.2. 
 “NCUC” means the North Carolina Utilities Commission or any successor
agency with jurisdiction to regulate retail electric service in the State of North Carolina. 
 “Negotiation Period” shall have the
meaning specified in Section 14.2. 
  

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 “NERC” means the North American Electric Reliability Council. 
 “Network Integration Transmission Service” means Network Integration Transmission Service provided under the OATT. 
 “Network Integration Transmission Service Agreement” or “NITSA” means that certain agreement for Network Integration Transmission
Service, as amended from time to time, executed by EMC and Transmission Provider. 
 “Network Operating Agreement” or
“NOA” means that certain agreement, as amended from time to time, executed by EMC and Transmission Provider in conjunction with the Network Integration Transmission Service Agreement. 
 “Network Resource” shall have the meaning specified in the OATT. 
 “Neutral Auditors” shall have the meaning specified in Section 2.3.2.2.2. 
 “New
River” means Appalachian State University d/b/a New River Light & Power Company or any successor thereto. 
 “Nomination” means the notification provided by MSCG to the Scheduling Agent of the sources and specific amounts of electric energy under the WPSA that MSCG desires EMC to make available in accordance with the terms and conditions
of the PPA. 
 “Non-Claiming Party” shall have the meaning specified in Section 16.4. 
 “Non-Conforming Load” shall have the meaning specified in Section 4.4. 
 “Non-Defaulting Party” shall have the meaning specified in Section 16.5.1. 
 “Non-Duke Control Area Load” means load that is located in a Control Area other than the Duke Control Area, including load that is physically
located in the Duke Control Area but telemetered for Control Area purposes to another Control Area. 
 “Non-Firm Sales” means
wholesale electric sales for which the delivery of electric energy may be interrupted, curtailed or terminated for any reason without any liability to Duke (other than charges imposed for changes to schedules for the sale of electric energy).

 “Notice of Termination” means a written notice to terminate this Agreement under Sections 2.2 or 2.3 that conforms to the
requirements set forth in Section 2.3.3. 
 “OATT” means the Open Access Transmission Tariff of the Transmission Provider on
file with FERC, or the successor transmission tariff (including the Open Access Transmission Tariff of an RTO, ITC or ISO that is applicable to the Transmission System), as either may be amended from time to time. 
 “Operating Committee” shall have the meaning specified in Section 10.1. 
 “Option Notice” shall have the meaning specified in Section 3.5.2.3. 
  

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 “Option Period” shall have the meaning specified in Section 3.5.2.3. 
 “Original Notice” shall have the meaning specified in Section 14.2. 
 “Partial Requirements Agreements” means the Duke-Rutherford Agreement, the Duke-Blue Ridge Agreement, and the Duke-Piedmont Agreement.

 “Partial Requirements Resources” means EMC’s contractual entitlements to electric capacity and energy used to serve
EMC’s Native Load during the period commencing January 1, 2011, and continuing through the termination of this Agreement, as specified in Section 5.2. 
 “Partial Requirements Service” shall have the meaning specified in Section 4.3. 
 “Party” and “Parties” shall have the meanings specified in the preamble of this Agreement. 
 “Patronage
Capital or Margins” shall have the meaning specified in Section 15.7. 
 “Piedmont” shall have the meaning specified in
the first paragraph of this Agreement. 
 “Piedmont Allocated Share of Duke Total Hourly Energy Charge” shall be as calculated in
Attachment 7-3. 
 “Piedmont Allocated Share of EMC Group Total Hourly Energy Credit” shall be as calculated in
Attachment 7-3. 
 “Piedmont Allocated Share of Inter-EMC Energy Charge” shall be as calculated in Attachment 7-3.

 “Piedmont Allocated Share of Inter-EMC Energy Credit” shall be as calculated in Attachment 7-3. 
 “Piedmont Energy Credit Amount”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006,
shall have the meaning specified in Section 7.1.5.9; and with respect to the period beginning January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.5.5. 
 “Piedmont Energy Purchase Amount”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006,
shall have the meaning specified in Section 7.1.5.9; and with respect to the period beginning January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.5.5. 
 “Piedmont Hourly Reconciliation Credit” shall have the meaning specified in Section 7.1.5.12. 
 “Piedmont Monthly Reconciliation Credit” shall have the meaning specified in Section 7.1.5.12. 
  

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 “Point of Interconnection” means the point of interconnection between the Transmission
Provider’s transmission and distribution facilities and EMC’s system. 
 “PPA” means that certain Power Purchase
Agreement by and between EMC and Morgan Stanley Capital Group Inc. dated as of December 11, 2003, as amended from time to time. 
 “Prime Rate” means, for any date, the per annum rate of interest announced from time to time by Citibank, N.A. (or a suitable replacement agreed upon by the Parties) as its “prime” rate for commercial loans, effective on
the date payment is due as established from time to time by such bank. 
 “Principal and Interest Expense” shall have the meaning
specified in Section 15.7. 
 “Prudent Utility Practice” means any of the practices, methods, and acts engaged in or approved
by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods, and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could
have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety, and expedition. Prudent Utility Practice is not intended to be limited to the optimum practice, method, or act to
the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the electric utility industry. 
 “PSCSC” means the Public Service Commission of South Carolina, or any successor agency with jurisdiction to regulate retail electric service within the State of South Carolina. 
 “Purchasing - Selling Entity” means that entity designated to the Transmission Provider by EMC who, upon the effectiveness of such designation,
is eligible to purchase and sell energy and/or capacity and reserve transmission services on behalf of EMC. 
 “PURPA” means the
Public Utilities Regulatory Policies Act, 16 U.S.C. §2601 et seq. (2005), as amended, including amendments included in the Energy Policy Act of 2005. 
 “PURPA Resource” shall have the meaning specified in Section 5.4.1. 
 “Qualifying
Facility” means a facility that meets the standards under 18 C.F.R. Part 292, Subpart B, as amended from time to time. 
 “Reconciliation Allocation Factor” shall be equal to the Reconciliation Allocation Number divided by the sum of the Reconciliation Allocation Numbers as set forth in this Agreement and in the Duke-Blue Ridge Agreement, and
Duke-Rutherford Agreement. 
 “Reconciliation Allocation Number” shall be equal to 17.55. 
 “Replacement Energy” shall have the meaning specified in Section 4.2.4. 
 “Representatives” means, with respect to a Party, such Party’s officers, directors, employees, advisors, and representatives and such
Party’s Affiliates and their respective officers, directors, employees, advisors, and representatives. 
  

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 “Resolution Period” shall have the meaning specified in Section 2.3.2.2.2. 
 “Restricted Rentals” shall have the meaning specified in Section 15.7. 
 “RTO” means a regional transmission organization as that term is defined by FERC. 
 “RUS” means the Rural Utilities Service of the United States Department of Agriculture or any agency succeeding to the functions of RUS.

 “Rutherford” means Rutherford Electric Membership Corporation. 
 “Rutherford Energy Credit Amount” means the Rutherford Energy Credit Amount as determined in Section 7.1.5.9 of the Duke-Rutherford
Agreement. 
 “Rutherford Energy Purchase Amount” means the Rutherford Energy Purchase Amount as determined in Section 7.1.5.9
of the Duke-Rutherford Agreement. 
 “Scheduling Agent” means Duke acting as agent on behalf of EMC to perform Scheduling Agent
Services. 
 “Scheduling Agent Services” shall have the meaning specified in Article 8. 
 “Scheduling Services Agreement” means that certain Scheduling Services Agreement by and between EMC and MSCG dated as of December 11,
2003, as amended. 
 “Scheduling Shortfall” shall have the meaning specified in Section 4.2.4. 
 “Scheduling Shortfall Amount” shall have the meaning specified in Section 4.2.4. 
 “Selection Date” shall have the meaning specified in Section 14.5. 
 “SERC” means the Southeastern Reliability Council. 
 “Service Area” means the area within a state or states within which an electric utility provides retail electric service as determined under the applicable Laws of such state or states. 
 “Service Obligation Resources” or “SORs” means those generation and purchased capacity resources used by NCEMC to serve NCEMC’s
members for resale to such members’ retail customers, as such resources are specified in the Power Sales Agreement Between Carolina Power & Light Company and North Carolina Electric Membership Corporation dated as of November 2,
1998, as amended. 
 “Short Term Interest Expense” shall have the meaning specified in Section 15.7. 
 “S&P” or “Standard & Poor’s” means Standard & Poor’s Rating Group, a division of McGraw Hill, Inc.

 “Standard Arbitration Process” shall mean the arbitration process described in Section 14.6.1. 
  

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 “Streamlined Arbitration Process” shall mean the arbitration process described in
Section 14.6.2. 
 “Submission” or “Submissions” shall have the meaning specified in Section 14.6.1(5).

 “Substitute Energy” shall have the meaning specified in Section 6.4. 
 “Substitute Energy Costs” shall have the meaning specified in Section 6.5. 
 “Summer Period” means the period (as of the Commencement Date May 1 – September 30) designated as the summer period in the then
most recent Duke Annual Plan. 
 “System Average Pricing Option” shall have the meaning specified in Section 7.2.6.1.

 “System Average Pricing Option Notice” shall have the meaning specified in Section 7.2.6.1. 
 “System Average Pricing Option Period” shall have the meaning specified in Section 7.2.6.1. 
 “System Incremental Cost” means the incremental expense, measured in dollars per megawatt hour ($/MWh), incurred by Duke to supply the next
megawatt-hour (MWh) of electric energy, after serving Duke’s Native Load customers’ requirements, and all other opportunity sales, during any Hour in which electric energy is purchased by EMC. System Incremental Cost shall include the
replacement cost of fuel, fuel handling expense, variable operating and maintenance expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs
incurred due to minimum runtimes or loading levels), and other appropriate electric energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined
prior to the Hour. 
 “Term” means the term of this Agreement determined in accordance with Section 2.2.3. 
 “Termination Assistance Service” shall have the meaning specified in Section 8.10. 
 “Territorial Decremental Cost” means the decrease in Duke’s expenses, measured in dollars per megawatt hour ($/MWh), in supplying
Duke’s Native Load customers’ requirements due to Duke’s purchase of electric energy supplied by EMC. Territorial Decremental Cost shall include the reduction in fuel expense, fuel handling expense, variable operating and maintenance
expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs incurred due to minimum runtimes or loading levels), and other appropriate
energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined prior to the Hour. 
 “Territorial Incremental Cost” means the incremental expense, measured in dollars per megawatt hour ($/MWh), incurred by Duke to supply the
next megawatt-hour (MWh) of electric energy after serving Duke’s Native Load customers’ requirements, during any Hour in which 
  

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 electric energy is purchased by EMC. Territorial Incremental Cost shall include the replacement cost of fuel, fuel
handling expense, variable operating and maintenance expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs incurred due to minimum runtimes
or loading levels), and other appropriate electric energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined prior to the Hour. 
 “Times Interest Earned Ratio” or “TIER” shall have the meaning specified in Section 15.7. 
 “Transmission Provider” means any entity transmitting electric energy provided by Duke under this Agreement to the EMC distribution system, and
shall include any ISO, RTO, ITC, or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider. 
 “Transmission Service” means the service provided by a Transmission Provider to EMC pursuant to which electric energy provided under this Agreement is delivered from the Delivery Point to EMC’s
distribution system. 
 “Transmission System” means the electric transmission system owned or leased and operated by Duke
Transmission. 
 “Variable O&M Rate”, with respect to the period January 1, 2007, through December 31, 2010, shall
have the meaning specified in Section 7.2.6.4.2, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.3.2. 
 “Weekday” means Monday, Tuesday, Wednesday, Thursday or Friday, excluding days recognized as holidays by NERC. 
 “Weekend Day” means Saturday or Sunday, and all days recognized as holidays by NERC. 
 “Winter Period” means the period (as of the Commencement Date October 1 – April 30) designated as the winter period in the then
most recent Duke Power Annual Plan. 
 “WPSA” means the Wholesale Power Supply Agreement by and between North Carolina Electric
Membership Corporation and EMC dated as of January 1, 2004, as amended from time to time. The Parties agree that, for the purposes of this Agreement, the WPSA as in effect on the date hereof is attached to a letter from EMC to Duke dated
May 12, 2006. 
 “Year” means a calendar year. 
 1.2 Interpretation. In this Agreement, unless the context otherwise requires, the singular shall include the plural and any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement shall, unless otherwise expressly specified, refer to this 
  

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 Agreement as a whole and not to any particular provision of this Agreement. Whenever the terms “include,”
“includes,” or “including” are used herein in connection with a listing of items included within a prior reference, such listing shall be interpreted to be illustrative only, and shall not be interpreted as a limitation on or
exclusive listing of the items included within the prior reference. Any reference in this Agreement to “Section,” “Article,” “Schedule,” or “Attachment” shall be references to this Agreement unless otherwise
stated, and all such Sections, Articles, Schedules, and Attachments shall be incorporated in this Agreement by reference. In the event that any index or publication referenced in this Agreement ceases to be published, each such reference shall be
deemed a reference to a successor or alternate index or publication reasonably agreed to by the Parties. Unless specified otherwise, a reference to a given agreement or instrument, and all schedules and attachments thereto, shall be a reference to
that agreement or instrument as modified, amended, supplemented and restated, and in effect from time to time. Unless otherwise stated, any reference in this Agreement to any entity shall include its permitted successors and assignees, and in the
case of any Governmental Authority, any person succeeding to its functions and capacities. All dollar amounts referred to in this Agreement shall be in U.S. currency. 
 1.3 Construction. The Parties acknowledge that each was actively involved in the negotiation and drafting of this Agreement and that no Law or rule of construction shall be raised or used in which the
provisions of this Agreement shall be construed in favor of or against either Party because one is deemed to be the author thereof. 
 Article 2 
 Term 
  

	2.1	Effectiveness. 

 2.1.1 Effectiveness of this
Agreement. This Agreement shall become effective upon execution and delivery by the Parties (“Effective Date”) provided that obligations of the Parties to purchase and sell electric capacity and energy and to provide Scheduling Agent
Services shall commence, on the later to occur of (a) September 1, 2006 or (b) the date upon which service commences in accordance with Section 3.5.1.2 or Section 3.5.2.1 (the “Commencement Date”), provided that
the Commencement Date shall be the first Day of the Month. 
 2.1.2 Governmental Approval. 
 2.1.2.1 Duke shall take appropriate steps within five (5) Business Days from the Effective Date to file this Agreement, together with supporting
documents, with FERC pursuant to the requirements of the Federal Power Act. Thereafter, Duke shall diligently pursue acceptance of this Agreement as a rate schedule by FERC and shall keep EMC informed of the progress in such regard. If requested by
Duke, EMC shall undertake Commercially Reasonable Efforts to cooperate with and assist Duke in Duke’s efforts to make this Agreement effective and, upon Duke’s request, shall make a timely submittal at FERC affirmatively supporting the
acceptance or approval of this Agreement by FERC without modification, suspension, investigation, or other condition. 
  

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 2.1.2.2 EMC shall take appropriate steps within five (5) Business Days from the Effective Date to
submit this Agreement, together with supporting documents, to the RUS. Thereafter, EMC shall diligently pursue approval of this Agreement by the RUS and shall keep Duke informed of the progress in such regard. If requested by EMC, Duke shall
undertake Commercially Reasonable Efforts to cooperate with and assist EMC in EMC’s efforts to obtain RUS approval of this Agreement and, upon EMC’s request, shall make a timely submittal at RUS affirmatively supporting the approval of
this Agreement without modification or condition. 
  

	2.2	Term. 

 2.2.1 Initial Term. The initial term
of this Agreement shall commence on the Effective Date and shall continue through 23:59:59, Eastern Time, on December 31, 2021 (“Initial Term”) unless this Agreement is terminated prior to December 31, 2021, in accordance with
Sections 2.3.2, 3.5.2.2 or 3.5.3. 
 2.2.2 Extension. Unless terminated in accordance with Sections 2.3, 3.5.2.2 or 3.5.3,
the Term of this Agreement shall automatically renew and extend for an additional term of ten (10) Years (each such extension being an “Extension Term”), so that unless either Party gives Notice of Termination in accordance with
Section 2.3, the Term of this Agreement shall extend through 23:59:59 Eastern Time on December 31, 2031. Likewise, unless either Party gives Notice of Termination in accordance with Section 2.3, the Term of this Agreement shall extend
through 23:59:59 Eastern Time on December 31, 2041; and so forth thereafter in ten (10) Year increments. 
 2.2.3 Term. The
Initial Term of this Agreement together with each Extension Term, if any, shall constitute the “Term” of this Agreement during which Duke shall provide either FFR Supplemental Service or Partial Requirements Service, as applicable, and
Scheduling Agent Services to EMC. 
  

	2.3	Termination. 

 2.3.1 Termination of the Initial
or an Extension Term. Either Party may terminate this Agreement at the end of the Initial Term by giving Notice of Termination to the other Party as specified in Section 2.3.3 at least three (3) Years prior to the end of the Initial
Term, so that such notice is given no later than December 31, 2018. If the Term is extended beyond the Initial Term pursuant to Section 2.2.2, either Party may terminate this Agreement at the end of the then-current Extension Term by
providing Notice of Termination to the other Party as specified in Section 2.3.3 at least three (3) Years prior to the end of such Extension Term, so that such notice is given no later than December 31, 2028, for the Extension Term
ending December 31, 2031, and so forth thereafter. 
 2.3.2 Early Termination. Notwithstanding the provisions of
Section 2.3.1, early termination of this Agreement, including any Extension Term, shall only be permitted in the six (6) circumstances set out in Sections 2.3.2.1, 2.3.2.2, 2.3.2.3, 2.3.2.4, 2.3.2.5 and 2.3.2.6. 
 2.3.2.1 Early Termination for an Event of Default. In the event that an Event of Default occurs, and the Defaulting Party fails to cure such Event
of Default within the time 
  

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 period(s) specified in Section 16.5.3, the Non-Defaulting Party may terminate this Agreement upon giving thirty
(30) Days’ Notice of Termination, provided that the termination date shall be the last Day of a Month. 
 2.3.2.2 Early
Termination for a Material Adverse Ruling. In the event that a Material Adverse Ruling occurs, the Party affected by such Material Adverse Ruling may, within twenty (20) Days after such Material Adverse Ruling occurs, give the other Party
Notice of Termination, in accordance with Section 2.3.3, of its intent to terminate this Agreement effective on 23:59:59 of the last Day of the Month that is twenty-four (24) Months after the Month in which the Notice of Termination is
given. Such termination date shall be referred to herein as the “Material Adverse Ruling Termination Date.” If a Party fails to give Notice of Termination within twenty (20) Days after a Material Adverse Ruling occurs, it shall have
permanently waived its right to terminate this Agreement due to such Material Adverse Ruling pursuant to this Section 2.3.2.2. Termination pursuant to this Section 2.3.2.2 shall be subject to the following procedures: 
 (a) During the ninety (90) Days immediately following the giving of the Notice of Termination, the Parties shall attempt to negotiate
amendments to this Agreement that would permit the Parties to restore the equivalent value of the economic bargain contemplated by this Agreement absent the Material Adverse Ruling. If the Parties reach agreement, such amendments will not become
effective unless, within one hundred eighty (180) Days of the date that the Notice of Termination is given, the Parties have obtained the necessary approvals of Governmental Authorities to enable the amendments to become effective without
change, condition or modification. In the event that the Parties fail (i) to reach agreement on such amendments, or (ii) to obtain the necessary approvals of Governmental Authorities, this Agreement shall terminate on the Material Adverse
Ruling Termination Date, subject to the provisions of Section 2.3.2.2(b) and 2.3.2.2.2. 
 (b) In the event that the
Parties are unable to reach agreement on the amendments provided in Section 2.3.2.2(a), either Party may, no later than ninety (90) Days after the date that the Notice of Termination is given (or, if earlier, the date that the Parties
mutually agree that they are unable to reach agreement on such amendments), give notice to the other Party of its desire to extend this Agreement for a period of up to twelve (12) Months beyond the Material Adverse Ruling Termination Date. Such
extension will be subject to the Parties (i) having first reached agreement upon the rates, terms and conditions of service for such twelve (12) Month period within one hundred twenty (120) Days of the date that the Notice of
Termination is given and executing such agreement within such one hundred twenty (120) Day period, and (ii) having received from Governmental Authorities the necessary approvals for such rates, terms and conditions without change,
condition or modification within one hundred eighty (180) Days of the date that the Notice of Termination is given. 
 (c) A “Material Adverse Ruling” is an order or action by a Governmental Authority or a change in Law that (i) either (A) modifies the rates, terms, or conditions of this Agreement, (B) disallows the recovery from
EMC of costs that are included in this Agreement, (C) for retail ratemaking or regulatory accounting and reporting purposes, 
  

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 disallows costs related to this Agreement, including any disallowance of Duke’s costs related to
investments in generating facilities or binding contracts to purchase electric capacity and energy to provide service to EMC under this Agreement, or (D) for retail ratemaking or regulatory accounting and reporting purposes, assigns, allocates
or makes pro forma adjustments with respect to the revenues or costs related to this Agreement, and (ii) adversely affects the relative economic position of either Party in a material way. For purposes of this definition only, 
 (1) “material” for Duke means that the effect of the order or action by the Governmental Authority or change in Law is
reasonably projected to decrease Duke’s net revenues under this Agreement, or, in the case of a disallowance, assignment, allocation, or pro forma adjustment of revenues or costs for retail ratemaking or regulatory accounting or reporting
purposes, either (i) decrease Duke’s net costs or increase Duke’s net revenues assigned or allocated to Duke’s retail customer classes, or (ii) increase Duke’s net costs or decrease Duke’s net revenues assigned or
allocated to Duke’s wholesale customer class, by an aggregate amount equal to five percent (5%) or more of the total revenues to be paid by EMC to Duke under this Agreement over the then-remaining Term; 
 (2) “material” for EMC means that the effect of the order or action by the Governmental Authority or change in Law is reasonably
projected to increase EMC’s net costs under this Agreement by an amount equal to five percent (5%) or more of the total revenues to be paid by EMC to Duke under this Agreement over the then-remaining Term; 
 (3) an increase in a Party’s net costs is the increase in the Party’s costs as a result of the order or action by the
Governmental Authority or change in Law, less the increase (if any) in the Party’s revenues as a result of the Material Adverse Ruling; and 
 (4) a decrease in a Party’s net revenues is the decrease in the Party’s revenues as a result of the order or action by the Governmental Authority or change in Law, less the decrease (if any) in the
Party’s costs as a result of the Material Adverse Ruling. 
 (d) The foregoing amounts shall be calculated on a nominal
rather than an inflation adjusted or present value basis. Without limitation of the foregoing, EMC acknowledges that, for retail ratemaking and regulatory accounting and reporting purposes, Duke shall calculate the costs of the electric capacity and
energy used to serve EMC under this Agreement on a system average cost basis beginning January 1, 2011, or upon the commencement of the System Average Pricing Option Period, if earlier. EMC agrees that if the amount of costs that the NCUC or
the PSCSC in effect assigns or allocates to, or requires Duke to assign or allocate to, this Agreement for ratemaking or regulatory accounting and reporting purposes exceeds Duke’s system average costs, such action shall constitute a Material
Adverse Ruling if the five percent (5%) materiality standard set forth above is met. 
  

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 2.3.2.2.1 A change in Duke’s net revenues or EMC’s net costs that results from a change in
this Agreement that is permitted under Section 12.3, shall not constitute a Material Adverse Ruling regardless of the impact of such change on either Party’s net costs or net revenues. 
 2.3.2.2.2 In the event that either Party believes that a Material Adverse Ruling has occurred, the Party affected by such Material Adverse Ruling shall
provide the other Party a good faith calculation together with information supporting the calculation of the projected effect of the Material Adverse Ruling and include such calculation and the cost information supporting the calculation with the
Notice of Termination. If the non-terminating Party notifies the other Party, within twenty (20) Days following the date that such Notice of Termination is given, of its good faith objection to the calculation or the cost information supporting
the calculation of the projected effect of the Material Adverse Ruling, then the Parties shall, within thirty (30) Days following the date that such Notice of Termination is given (the “Resolution Period”), attempt to resolve their
differences with respect to the calculation or the cost information supporting such calculation. If, at the conclusion of the Resolution Period, the Parties are not in agreement with respect to the calculation or cost information supporting the
calculation, then PriceWaterhouseCoopers, or such other nationally recognized accounting firm that is not then the independent auditor for either Party or any of its Affiliates or predecessors and is selected by mutual agreement of the Parties (the
“Neutral Auditors”), shall be engaged within ten (10) Days after the expiration of the Resolution Period to review the calculation and the cost information supporting the calculation and to make an independent determination as to
whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable. If the Neutral Auditors require any additional information, records, or internal analysis to make a determination as
to whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, the Party in possession of such information, records or internal analysis will provide it to the Neutral
Auditors. Each Party agrees to execute, if requested by the Neutral Auditors, a reasonable engagement letter, including customary indemnities. All fees and expenses relating to the work to be performed by the Neutral Auditors shall be borne one-half
(1/2) by the terminating Party and one-half (1/2) by the non-terminating Party. The Neutral Auditors shall act as an arbitrator to determine, based upon its independent review, whether the Material Adverse Ruling meets the materiality
standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable. The Neutral Auditors’ determination shall be made within thirty (30) Days of their selection, shall be set forth in a written statement delivered to both Parties
and shall be final, binding and conclusive. If the Neutral Auditors’ determine the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, is not met, the Notice of Termination shall be null and void. If the
Neutral Auditors’ determine the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, is met, the Notice of Termination shall be effective in accordance with its terms. The initiation of the dispute resolution
process described in this Section 2.3.2.2.2, shall not toll or otherwise delay running of the twenty-four (24) Month time period set forth in the Notice of Termination, unless the Neutral Auditors’ find that the materiality standard
set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, is not met. The procedure set forth in this Section 2.3.2.2.2 shall be the exclusive means for the Parties to resolve any dispute as to whether a Material Adverse Ruling meets
the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2). If a Party gives a Notice of Termination based on its good faith 
  

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 contention of the occurrence of a Material Adverse Ruling that meets the materiality standard set forth in
Section 2.3.2.2(c)(1) or (c)(2), as applicable, and the Neutral Auditors subsequently determine that such materiality standard has not been met, such Party shall not be in default under this Agreement solely because it gave such Notice of
Termination. 
 2.3.2.3 Early Termination for Failure of Condition Precedent. This Agreement may be terminated for failure of a
condition precedent in accordance with Section 3.5.2.2 or Section 3.5.3. 
 2.3.2.4 Early Termination Due to Implementation of
Retail Competition. Upon the date of enactment of a Law providing for implementation of retail electric service competition on a comprehensive basis in the State of North Carolina, the Parties shall enter into negotiations with the goal of
reaching agreement on amendments to this Agreement to provide for the continuation of the purchase and sale of electric capacity and energy and the provision of Scheduling Agent Services provided for in this Agreement after the commencement of such
retail electric service competition. If the Parties are not able to reach agreement by the latter to occur of (i) the date that is ninety (90) Days after the date of enactment of such Law or (ii) the date that is twenty-four
(24) Months prior to the commencement of such retail electric service competition in the State of North Carolina, then this Agreement shall terminate automatically on the date such retail electric service competition commences in the State of
North Carolina without the need for either Party to give notice. 
 2.3.2.5 Early Termination Due to Plant Calculation. In the event
that the Annual Percentage calculated in Attachment 7-9 is positive for two (2) consecutive Years, and the absolute value of such percentage is greater than ten percent (10%) then EMC may, within twenty (20) Days after the
date in such second (2nd) consecutive Year that Duke provides the calculation of the Annual Percentage pursuant to Section 7.3.2.4, give Duke Notice of Termination to terminate this Agreement effective on 23:59:59 of the last Day of Month
that is twenty-four (24) Months after the Month in which the Notice of Termination is given. In the event that the Annual Percentage calculated in Attachment 7-9 is negative for two (2) consecutive Years, and the absolute value of
such percentage is greater than ten percent (10%) for any two (2) consecutive Years, then Duke may, within twenty (20) Days after the date in such second (2nd) consecutive Year that Duke provides the calculation of the Annual
Percentage pursuant to Section 7.3.2.4, give EMC Notice of Termination to terminate this Agreement effective on 23:59:59 of the last Day of Month that is twenty-four (24) Months after the Month in which the Notice of Termination is given.
If a Party fails to give Notice of Termination within twenty (20) Days after Duke provides the calculation of the Annual Percentage pursuant to Section 7.3.2.4 for such second (2nd) consecutive Year, it shall have permanently waived
its right to terminate this Agreement under this Section based on the Annual Percentage for such two (2) consecutive Years; provided, that nothing in this Section 2.3.2.5 shall affect any Party’s termination rights under Sections
2.3.2.1, 2.3.2.2, 2.3.2.3, 2.3.2.4 or 2.3.2.6. 
 2.3.2.6 Early Termination Due to Extended Force Majeure. If, as a result of an event
of Force Majeure, a Party is unable to meet a material obligation hereunder for a period greater than ninety (90) Days, then the Non-Claiming Party shall have the right to terminate this Agreement upon giving a Notice of Termination within
thirty (30) Days of the expiration of 
  

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 such ninety (90) Day period; provided, however, if the Claiming Party has used and continues to use all Commercially
Reasonable Efforts to remedy, cure or mitigate the event of Force Majeure, then the Non-Claiming Party’s right to give Notice of Termination shall be suspended for so long as the Claiming Party continues to use Commercially Reasonable Efforts
to remedy, cure or mitigate the event of Force Majeure. 
 2.3.3 Form of Notice of Termination. Notice of Termination made pursuant to
Sections 2.2 or 2.3 shall be given in accordance with Section 16.22 and shall state (i) the date of termination being effectuated, and (ii) the provision of this Agreement under which termination is being effectuated and the
basis for the termination. Except as otherwise provided in this Section 2.3.3, the Notice of Termination is effective when it is deemed given in accordance with Section 16.22. Once the Notice of Termination is given to a Party, it shall
not be deemed amended, modified, or otherwise revoked for any reason (other than a determination by the Neutral Auditors pursuant to Section 2.3.2.2.2 that the materiality standard is not met) unless such amendment, modification, or revocation
is mutually agreed to by both Parties in writing or unless the Parties reach agreement in accordance with Section 2.3.2.2(a). Upon receipt of the Notice of Termination, the non-terminating Party shall acknowledge receipt in writing sent in
accordance with Section 16.22 within five (5) Business Days of the receipt of the Notice of Termination. Acknowledgment of a Notice of Termination is a courtesy and shall not influence the effectiveness of the termination. Failure to
utilize a method specified in Section 16.22 shall not influence the effectiveness of the termination if the Notice of Termination is actually received by the Chief Executive Officer of the non-terminating Party within thirty (30) Days of
the date of the Notice of Termination, in which case the Notice of Termination shall be effective on the date that the Notice of Termination is actually received by the Chief Executive Officer of the non-terminating Party. 
 2.4 Absolute Nature of Termination. Both Parties hereby acknowledge, warrant, and agree that TERMINATION OF THIS AGREEMENT FOR ANY REASON PROVIDED FOR AND
PERMITTED UNDER THIS AGREEMENT IS ABSOLUTE AND FOREVER EXTINGUISHES ANY AND ALL OBLIGATIONS EXISTING UNDER THIS AGREEMENT FOR (A) DUKE TO PLAN OR PROCURE RESOURCES TO SERVE EMC, OR TO PROVIDE ANY SERVICE OR PRODUCT TO EMC, (B) EMC TO
PURCHASE FROM AND PAY DUKE FOR ANY SERVICES OR PRODUCTS, (C) EMC TO PLAN OR PROCURE RESOURCES TO SERVE DUKE, OR TO PROVIDE ANY SERVICE OR PRODUCT TO DUKE, AND (D) DUKE TO PURCHASE FROM AND PAY EMC FOR ANY SERVICES OR PRODUCTS. Upon
termination of this Agreement in accordance with Section 2.2, 2.3, 3.5.2.2, or 3.5.3, each and every obligation of Duke to provide electric energy and capacity and Scheduling Agent Services to EMC, and each and every right of EMC to purchase
electric energy and capacity and Scheduling Agent Services from Duke shall cease as a matter of contract and neither Party shall claim or assert any continuing right to continued performance, whether by “rollover,” as an
“evergreen” service, or in any other fashion based on this Agreement. By entering into this Agreement, Duke does not commit, and shall not be deemed to have committed, to plan its system to be able to provide any service to EMC beyond the
Term, and EMC agrees that it has no claim to any service beyond the Term. EMC shall not at any time oppose any filing by Duke to cancel this Agreement as a rate schedule under the Federal Power Act concurrently with, or subsequently to, the
termination of this Agreement as a contract in accordance with Section 2.2, 2.3, 3.5.2.2, or 3.5.3. The Parties acknowledge, warrant, and agree 
  

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 that it is the express intention of the Parties that no action by any Governmental Authority may override the terms of
this Section 2.4 of this Agreement, and that should any Governmental Authority take any action purporting to, or that might be claimed to, override the terms of this Section 2.4, either directly or indirectly, EMC shall not make any claim
or assert any right based on or relying on such Governmental Authority action in any manner that conflicts with or frustrates the terms of Section 2.4 of this Agreement. 
 Article 3 
 Conditions Precedent to the Commencement Date

 3.1 Conditions Precedent to Duke’s Obligations. The obligation of Duke to commence sales of electric energy and capacity and purchases of
electric energy and to provide Scheduling Agent Services under this Agreement is subject to the satisfaction or waiver at least thirty (30) Days prior to the Commencement Date (except that Duke may undertake certain preliminary activities in
advance of the Commencement Date) of the following conditions: 
 (a) The representations and warranties of EMC set forth in
Sections 16.1.1 and the covenants of EMC set forth in Section 16.1.2 shall be true and correct. 
 (b) FERC shall
have issued an order accepting or approving this Agreement for filing and permitting it to become effective as filed without modification, suspension, investigation or other condition (including setting this Agreement, or part thereof, for hearing)
unacceptable to Duke. 
 (c) Neither the NCUC nor the PSCSC shall have issued an Adverse Ruling. For purposes of this
Section 3.1(c) only, “Adverse Ruling” means an order or ruling issued by the NCUC or PSCSC (i) which disapproves or rejects this Agreement, or (ii) generally applicable to electric utilities subject to the
jurisdiction of the NCUC or PSCSC, as applicable, in which the NCUC or PSCSC disapproves or rejects the use of system average cost accounting for wholesale contracts. 
 (d) NCEMC shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent. 
 (e) EMC shall have given notice to MSCG terminating the Scheduling Services Agreement. 
 (f) The systems and operational equipment required for Duke to provide and receive service under this Agreement have been installed or
otherwise put in place, tested satisfactorily, and are fully functional. 
 (g) Transmission Provider shall have received
notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent and Purchasing - Selling Entity. 
 (h)
MSCG shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent and Purchasing - Selling Entity. 
  

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 (i) The Parties shall have agreed upon procedures so that Duke may test whether the EMC
Demand Side Management Resource Programs meet the standards and requirements specified for such programs under the rate schedule provisions or riders for Duke’s Demand Side Resource Management Programs then-currently approved and on file with
the NCUC. 
 3.2 Conditions Precedent to EMC’s Obligations. The obligation of EMC to commence purchases of electric energy and capacity and
Scheduling Agent Services and sales of electric energy under this Agreement is subject to the satisfaction or waiver at least thirty (30) Days prior to the Commencement Date (except that EMC may undertake certain preliminary activities in
advance of the Commencement Date) of the following conditions: 
 (a) The representations and warranties of Duke set forth in
Section 16.1.1 and the covenants of Duke set forth in Section 16.1.2 shall be true and correct. 
 (b) The RUS shall
have approved this Agreement without modification, suspension, investigation or other condition unacceptable to EMC. 
 (c)
NCEMC shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent. 
 (d) The
Transmission Provider shall have qualified this Agreement as a Network Resource. 
 (e) The systems and operational equipment
required for EMC to provide and receive service under this Agreement have been installed or otherwise put in place, tested satisfactorily, and are fully functional. 
 (f) Transmission Provider shall have received and acknowledged EMC’s designation of Duke as Scheduling Agent and Purchasing - Selling
Entity. 
 (g) MSCG shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent
and Purchasing - Selling Entity. 
 (h) The Parties shall have agreed upon procedures so that Duke may test whether the EMC
Demand Side Management Resource Programs meet the standards and requirements specified for such programs under the rate schedule provisions or riders for Duke’s Demand Side Resource Management Programs then-currently approved and on file with
the NCUC. 
 (i) EMC and Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (“CP&L”)
shall have each executed and delivered an agreement under which CP&L is obligated during the term to deliver electric capacity and energy and to provide scheduling agent services to meet the demands imposed on EMC by its retail customers that
are located within EMC’s Service Area which constitute Non-Duke Control Area Load and each of the conditions precedent contained in such an agreement, whether applicable to EMC or CP&L, have either been satisfied or waived by the respective
party. 
  

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 3.3 Notice of Satisfaction of Conditions Precedent. Each Party shall use Commercially Reasonable Efforts to
satisfy its conditions precedent (as described in Section 3.1 for Duke and Section 3.2 for EMC) on or before July 31, 2006, or as soon as reasonably practicable thereafter. EMC shall provide Duke with written notice promptly following
the satisfaction or waiver of all of the conditions precedent to EMC’s obligations as described in Section 3.2. Duke shall provide EMC with written notice promptly following the satisfaction or waiver of all of the conditions precedent to
Duke’s obligations as described in Section 3.1, other than the condition precedent specified in Section 3.1(e). In order for the condition precedent specified in Section 3.1(e) to be satisfied, subsequent to the later of the date
of EMC’s receipt of Duke’s notice or the date of Duke’s receipt of EMC’s notice, EMC shall, no later than thirty (30) Days prior to the Commencement Date, give notice to MSCG that the Scheduling Services Agreement shall be
terminated on the Commencement Date. A condition precedent shall not be deemed to have been satisfied or waived prior to the date that the notice provided for in this Section 3.3 is received by the other Party. 
 3.4 Waiver of Condition Precedent. 
 3.4.1 Waiver
by Duke. In the event that any of the foregoing conditions to the obligations of Duke contained in Section 3.1 shall fail to be satisfied, Duke may elect, in its sole discretion, to consummate this Agreement despite such failure, in which
event Duke shall be deemed to have waived any claim for damages, losses or other relief arising from or in connection with such failure, unless otherwise agreed in writing and executed by the Parties. Duke may not waive the condition of approvals
set forth in Section 3.1(b). 
 3.4.2 Waiver by EMC. In the event that any of the foregoing conditions to the obligations of EMC
contained in Section 3.2 shall fail to be satisfied, EMC may elect, in its sole discretion, to consummate this Agreement despite such failure, in which event EMC shall be deemed to have waived any claim for damages, losses or other relief
arising from or in connection with such failure, unless otherwise agreed in writing and executed by the Parties. EMC may not waive the condition of approvals set forth in Section 3.2(b). 
 3.4.3 Waiver by other Party. Any waiver by a Party of the other Party’s conditions precedent shall be in writing, and shall identify the
condition precedent that such Party is waiving. 
 3.5 Commencement of Service; Failure of Condition Precedent. 
 3.5.1 Commencement of Service. 
 3.5.1.1 If all of the conditions precedent specified in Sections 3.1 and 3.2 have been satisfied or waived on or before July 31, 2006, then the Commencement Date shall occur on September 1, 2006, without the need for either
Party to provide notice. 
 3.5.1.2 If all of the conditions precedent specified in Sections 3.1 and 3.2 are satisfied or waived during
the period between August 1, 2006, and November 30, 2006, and service under this Agreement has not commenced pursuant to Section 3.5.2.1, then service under this Agreement shall commence upon the next first Day of a Month which is at
least thirty (30) Days after all such conditions have been satisfied. 
  

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 3.5.2 EMC Options. 
 3.5.2.1 If all of the conditions precedent specified in Sections 3.1 and 3.2, with the exception of the conditions precedent specified in Section 3.1(b) and/or Section 3.2(b), have been satisfied or
waived, then EMC may designate September 1, 2006, October 1, 2006, or November 1, 2006 as the Commencement Date by giving at least thirty (30) Days’ prior written notice to Duke. 
 3.5.2.2 If service has commenced pursuant to Section 3.5.2.1 prior to November 30, 2006, and the condition precedent specified in
Section 3.1(b) and/or Section 3.2(b) has not been satisfied on or before November 30, 2006, then except as provided in Section 3.5.2.3 this Agreement will terminate automatically on December 31, 2006, without the need for
either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the other arising hereunder under any claim or theory whatsoever. 
 3.5.2.3 If service has commenced pursuant to Section 3.5.2.1 prior to November 30, 2006, and the condition precedent specified in
Section 3.1(b) and/or Section 3.2(b) has not been satisfied on or before November 30, 2006, then EMC shall have the option of continuing to receive service hereunder beyond December 31, 2006 until either August 31,
2007, February 28, 2008, or August 31, 2008. EMC may exercise such option by giving notice to Duke of its exercise of such option no later than December 1, 2006. Such notice shall be referred to herein as the “Option
Notice”. EMC’s Option Notice shall specify whether EMC elects to receive service hereunder until August 31, 2007, February 28, 2008, or August 31, 2008. The period of such service that EMC elects pursuant to such option
(whether January 1, 2007 - August 31, 2007; January 1, 2007 – February 28, 2008; or January 1, 2007 - August 31, 2008) shall be referred to herein as the “Option Period”. In the event that EMC exercises its
option under this Section 3.5.2.3, then during the Option Period EMC shall be subject to the charges and credits set forth in Sections 3.5.2.3.1, 3.5.2.3.2, 3.5.2.3.3, 3.5.2.3.4, and 3.5.2.3.5, as applicable, and in Section 7.1 in
lieu of the charges set forth in Section 7.2; provided, that during the Option Period the demand charges set forth in Section 7.1.4 shall be modified as set forth in Sections 3.5.2.3.1, 3.5.2.3.2, or 3.5.2.3.3, as applicable, depending
upon the Option Period selected by EMC. In the event that EMC exercises its option under this Section 3.5.2.3, then notwithstanding the provisions of Section 3.5.2.2, this Agreement will terminate automatically on the last day of the
Option Period, without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the other arising hereunder under any claim or theory whatsoever for service beyond such date.
EMC’s exercise of such option shall not serve to modify any other provision of the Agreement. 
 3.5.2.3.1 In the event that EMC
exercises its option pursuant to Section 3.5.2.3, and the Option Period is January 1, 2007 – August 31, 2007, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge
set forth in Section 3.5.2.3.4 and the Excess Annual Capacity Charge set forth in Section 3.5.2.3.5. In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess
Annual Capacity Price under Section 3.5.2.3.5 during the Option Period shall be as follows: 
  

				
	 Annual Capacity Price
	  	$	38.00/kW-Year
	 Annual Capacity Quantity
	  	 	23,000 kW
	 Excess Annual Capacity Price
	  	$	45.60/kW-Year

  

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 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month, rather
than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and EMC Monthly Energy Credit (and other charges and credits under Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13) during the Option Period shall be as set forth in
Section 7.1.5. 
 3.5.2.3.2 In the event that EMC exercises its option pursuant to Section 3.5.2.3, and the Option Period is
January 1, 2007 – February 28, 2008, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4 and the Excess Annual Capacity Charge set
forth in Section 3.5.2.3.5. In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under Section 3.5.2.3.5 during the Option Period
shall be as follows: 
  

				
	 January 1, 2007 - December 31, 2007:
	  		
		
	 Annual Capacity Price
	  	$	38.00/kW-Year
	 Annual Capacity Quantity
	  	 	23,000 kW
	 Excess Annual Capacity Price
	  	$	45.60/kW-Year
		
	 January 1, 2008 – February 28, 2008:
	  		
		
	 Annual Capacity Price
	  	 	0
	 Annual Capacity Quantity
	  	 	0
	 Excess Annual Capacity Price
	  	 	0

 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month
during 2007 and $5.75/kW-Month during 2008, rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13)
during the Option Period shall be as set forth in Section 7.1.5. 
 3.5.2.3.3 In the event that EMC exercises its option pursuant to
Section 3.5.2.3, and the Option Period is January 1, 2007 – August 31, 2008, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4
and the Excess Annual Capacity Charge set forth in Section 3.5.2.3.5. In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under 3.5.2.3.5
during the Option Period shall be as follows: 
  

				
	 January 1, 2007 - December 31, 2007:
	  		
		
	 Annual Capacity Price
	  	$	38.00/kW-Year
	 Annual Capacity Quantity
	  	 	23,000 kW
	 Excess Annual Capacity Price
	  	 	$45.60/kW-Year
		
	 January 1, 2008 – August 31, 2008:
	  		
		
	 Annual Capacity Price
	  	 	$40.00/kW-Year
	 Annual Capacity Quantity
	  	 	24,000 kW
	 Excess Annual Capacity Price
	  	$	48.00/kW-Year

  

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 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month during
2007 and $5.75/kW-Month during 2008, rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13) during
the Option Period shall be as set forth in Section 7.1.5. 
 3.5.2.3.4 Base Annual Capacity Charge. The Base Annual Capacity
Charge for a Year shall be equal to the product of (i) the Annual Capacity Price for the Year ($/kW-Year) and (ii) the Annual Capacity Quantity for the Year (kW). The Base Annual Capacity Charge for the Option Period shall be billed in
accordance with Article 13 in the July 2007 statement and the July 2008 statement, if applicable. 
 3.5.2.3.5 Excess Annual Capacity
Charge. The Excess Annual Capacity Charge for a Year shall be equal to the product of (i) the Excess Annual Capacity Price for the Year ($/kW-Year) and (ii) the Excess Annual Amount for the Year (kW). The Excess Annual Amount for a
Year shall be equal to the product of (i) the EMC Excess Annual Capacity Quantity for the Year divided by the EMC Group Combined Excess Annual Capacity Quantity for the Year and (ii) the EMC Group Excess Annual Capacity Quantity for the
Year. The Excess Annual Capacity Charge for the Option Period shall be billed in accordance with Article 13 in the September 2007 and the September 2008 statements, if applicable, based on the actual Duke billing data during July and August 2007 and
July and August 2008, respectively. A sample calculation is provided in Attachment 3-1. 
 3.5.2.3.5.1 EMC Excess Annual Capacity
Quantity. The EMC Excess Annual Capacity Quantity for a Year shall be equal to the EMC Coincident Peak Demand for the Year minus EMC’s Base Obligation for the Hour in such Year in which the EMC Coincident Peak Demand occurs, minus the
Annual Capacity Quantity for the Year. In no event shall the EMC Excess Annual Capacity Quantity be less than zero. The EMC Coincident Peak Demand for a Year shall be equal to the EMC Hourly Demand that is coincident with the maximum integrated
sixty (60) minute Duke Schedule 1 Demands during July and August of the Year. The EMC Hourly Demand for an Hour shall be equal to the integrated sixty (60) minute demand of EMC’s Native Load during the Hour. 
  

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 3.5.2.3.5.2. EMC Group Combined Excess Annual Capacity Quantity. The EMC Group Combined Excess
Annual Capacity Quantity for a Year shall be equal to the sum of (i) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of this Agreement, (ii) the EMC Excess Annual Capacity Quantity for the Year as
determined in Section 3.5.2.3.5.1 of the Duke-Blue Ridge Agreement, and (iii) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of the Duke-Rutherford Agreement. 
 3.5.2.3.5.3 EMC Group Excess Annual Capacity Quantity. The EMC Group Excess Annual Capacity Quantity for a Year shall be equal to the EMC Group
Coincident Peak Demand for the Year, minus the EMC Group’s Base Obligation for the Hour in such Year in which the EMC Group Coincident Peak Demand occurs, minus the EMC Group Annual Capacity Quantity; but in no event shall the EMC Group Excess
Annual Capacity Quantity be less than zero. The EMC Group Coincident Peak Demand shall for a Year be equal to the sum of (i) the EMC Coincident Peak Demand for the Year as determined in Section 3.5.2.3.5.1 of this Agreement, (ii) the EMC
Coincident Peak Demand for the Year as determined in Section 3.5.2.3.5.1 of the Duke-Blue Ridge Agreement, and (iii) the EMC Coincident Peak Demand for the Year as determined in Section 3.5.2.3.5.1 of the Duke-Rutherford Agreement.

 3.5.2.4 Any Option Notice given by EMC pursuant to Section 3.5.2.3 shall be given in accordance with Section 16.22 and shall
state the Option Period elected. The Option Notice is effective when it is deemed given in accordance with Section 16.22. Once the Option Notice is given to Duke, it shall not be deemed amended, modified, or otherwise revoked for any reason
unless such amendment, modification, or revocation is mutually agreed to by both Parties in writing. 
 3.5.3 Termination for Failure of
Condition Precedent. 
 3.5.3.1 Subject to the options granted to EMC under Section 3.5.2.1 and 3.5.2.3, in the event that any of the
conditions precedent set out in Sections 3.1(a) through (i) and Sections 3.2(a) through (i) are not satisfied or waived on or before November 30, 2006, then this Agreement will terminate automatically on December 31, 2006,
without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the other arising hereunder under any claim or theory whatsoever. 
  

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 Article 4  
 Sale of Electric Capacity and Energy 
 4.1 Classification of Services Provided. During the period beginning on
the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, Duke shall provide to EMC “FFR Supplemental Service”, as described in Section 4.2. Beginning
January 1, 2011, throughout the remainder of the Term of this Agreement, Duke shall provide to EMC “Partial Requirements Service”, as described in Section 4.3. 
 4.2 FFR Supplemental Service. 
 4.2.1 Character of FFR Supplemental Service. For each Hour during the period beginning on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in
effect, Duke shall sell and deliver, and EMC shall purchase and receive, all of the electric capacity and energy that EMC requires to serve EMC’s Native Load in excess of EMC’s Base Obligation for such Hour. For example, if EMC’s
Native Load during an Hour is 800 MWs, and EMC’s Base Obligation for such Hour is 600 MWs, Duke shall supply and deliver, and EMC shall purchase and receive, 200 MWs of FFR Supplemental Service for such Hour. Duke shall supply and deliver FFR
Supplemental Service in a manner that is as firm as, and otherwise comparable with, the manner in which Duke supplies Duke’s Native Load. Duke shall be responsible for maintaining the generation reserves needed to meet its FFR Supplemental
Service obligation. Notwithstanding anything in this Agreement to the contrary, Duke shall have no obligation to sell and deliver any electric capacity or energy to EMC that is not required to serve EMC’s Native Load. 
 4.2.2 Amount of EMC’s Base Obligation. EMC’s Base Obligation for each Hour beginning on the Commencement Date, and continuing through
December 31, 2010, or any part thereof in which this Agreement is in effect, shall be as set forth in Attachment 4-1. Notwithstanding the preceding sentence, EMC’s Base Obligation shall be subject to modification (a) during Light
Load Periods in accordance with the provisions of Attachment 4-2 or (b) in accordance with the provisions of Section 5.1.4 and 5.1.5. The amounts set forth on Attachment 4-1 reflect MWs delivered at a Delivery Point.

 4.2.3 Scheduling To Meet EMC’s Base Obligation. In order to meet EMC’s Base Obligation, (a) MSCG shall be responsible for
scheduling to the Transmission Provider electric energy under the PPA to serve EMC’s Native Load and (b) Duke, acting as Scheduling Agent, shall be responsible for scheduling to the Transmission Provider, in accordance with the provisions
of Article 8, electric energy to serve EMC’s Native Load from EMC’s entitlements to the resources described in Section 5.1.3, 5.1.4 or 5.1.5. The total amount of electric energy so scheduled to the Transmission Provider in any Hour to
serve EMC’s Native Load beginning on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, shall be the EMC Scheduled Amount; provided that the EMC Scheduled Amount shall
not exceed EMC’s Base Obligation for any such Hour. 
 4.2.4 Scheduling Shortfall. For each Hour beginning on the Commencement
Date, and continuing through December 31, 2010, or any portion thereof in which this Agreement is in 
  

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 effect, if, for any reason, including a Force Majeure as that term is defined herein or a “force majeure”,
“uncontrollable force”, or a similar term defined in a third-party agreement, but not including Duke’s unexcused failure to comply with the provisions of Article 8, the EMC Scheduled Amount is less than EMC’s Base Obligation for
any Hour, there shall be a “Scheduling Shortfall” in the amount equal to the difference between EMC’s Base Obligation and the EMC Scheduled Amount in such Hour (“Scheduling Shortfall Amount”). For any Hour that Duke receives
information or a notice pursuant to Section 8.4.8 that there will be or has been a Scheduling Shortfall, Duke shall use Commercially Reasonable Efforts to procure and supply electric energy in a quantity sufficient to supply the Scheduling
Shortfall Amount for such Hour (“Replacement Energy”). In the event that, through the exercise of Commercially Reasonable Efforts, Duke procures Replacement Energy from a third party for resale to EMC, EMC shall pay Duke for the total cost
incurred by Duke to purchase and deliver the Replacement Energy. Duke’s curtailment of a Non-Firm Sale shall constitute a procurement of Replacement Energy from a third party and the total cost incurred by Duke shall be (i) the foregone
sales price for the Non-Firm Sale curtailed and (ii) if applicable, any charges imposed for changes to schedules for the sale of electric energy. In the event that Duke supplies Replacement Energy from its own resources, EMC shall pay Duke for
such Replacement Energy an amount equal to one hundred ten percent (110%) of Duke’s System Incremental Cost in supplying such Replacement Energy. The total charges for Replacement Energy for a Month, as determined by this
Section 4.2.4, shall constitute the Monthly Replacement Energy Charge. 
 4.2.4.1 It is expressly understood that Section 4.2.4
shall not be construed or interpreted to (i) require Duke to curtail any Firm Sales in order to supply Replacement Energy to EMC, (ii) to curtail any Non-Firm Sales except as set forth in Section 4.2.6 in order to supply such
Replacement Energy to EMC, (iii) impose upon Duke any responsibility for providing Replacement Energy for a Scheduling Shortfall that occurs after the Transmission Provider’s deadline for scheduling transmission service required for the
delivery of such Replacement Energy, or (iv) affect in any way EMC’s rights and obligations under its Network Integration Transmission Service Agreement. 
 4.2.4.2 In the event that there is or is expected to be a Scheduling Shortfall in connection with (a) EMC or its Scheduling Agent having received notice (and in the event EMC receives notice providing Duke with
evidence of such notice) of, or (b) pursuant to Section 8.4.8 Scheduling Agent having received notice of either (i) the occurrence of a “force majeure” event under the PPA, as defined in Section 4.2.4.3, or
(ii) the temporary impairment of generating resources underlying the WPSA or other resources to which EMC may have an entitlement pursuant to Section 5.1.3, 5.1.4 or 5.1.5, such that all or a portion of EMC’s entitlements to electric
energy under such agreements are or will be temporarily unavailable to EMC, then EMC may request Duke to sell electric capacity and energy to EMC for the expected duration of such Scheduling Shortfall. In the event that EMC makes such a request,
Duke shall exercise Commercially Reasonable Efforts to offer to supply electric capacity and energy to EMC under rates, terms, and conditions that Duke determines to be commercially reasonable. If the Parties reach agreement on such a sale, then
Duke shall sell and deliver and EMC shall purchase and receive the electric energy and such electric energy shall be included in EMC Scheduled Amount. 
  

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 4.2.4.3 For purposes of Section 4.2.4.2, the term “force majeure” means an event or
circumstance that: (i) prevents the party claiming to be affected by it from performing its obligations in whole or in part; (ii) is not within the reasonable control of the claiming party, or the result of the negligence of the claiming
party, and (iii) by the exercise of due diligence, the claiming party is unable to overcome in a commercially reasonable manner, and, without limiting the scope of the definition, includes acts of God, or the public enemy, or insurrection,
riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court order or governmental authority or arbitration award (so long as the claiming party has
not sought or has opposed, to the extent reasonable, such actions or restraints). It is expressly acknowledged that transmission service interruptions or curtailments imposed by a transmission provider in response to transmission capacity or
availability shortages shall not be “force majeure” events or circumstances for purposes of this Section 4.2.4.3. 
 4.2.5
EMC PPA Obligation. EMC shall retain all of its rights and obligations under the PPA, including the obligation to pay all costs incurred under the PPA. 
 4.2.6 EMC Obligation to Curtail Load. During any Hour in which there is a Scheduling Shortfall, and either (i) Duke does not replace such electric energy in accordance with Section 4.2.4 or
(ii) EMC has not made, or does not have in place, arrangements to replace such electric energy, EMC shall curtail an amount of EMC’s Native Load equal to the Scheduling Shortfall Amount; provided, however, Duke shall exercise Commercially
Reasonable Efforts within the time constraints that exist to first call upon any available EMC Demand Side Management Resource Program that would not otherwise be called upon absent the Scheduling Shortfall and then if necessary curtail Non-Firm
Sales to the extent of the Scheduling Shortfall before requiring EMC to curtail EMC’s Native Load pursuant to this Section 4.2.6. Any such EMC Native Load that has been curtailed shall be restored when the Scheduling Shortfall is no longer
occurring or when the Scheduling Shortfall has been replaced either by electric energy supplied (a) by Duke in accordance with Section 4.2.4 or this Section 4.2.6 or (b) under arrangements made by EMC with third parties.

 4.3 Partial Requirements Service. 
 4.3.1 Character of Partial Requirements Service. For each Hour during the period beginning on January 1, 2011, and continuing through the termination of this Agreement, Duke shall sell and deliver, and EMC
shall purchase and receive, all of the electric capacity and energy that EMC requires to serve EMC’s Native Load in excess of the EMC Contract Resources. Duke shall be responsible for maintaining the generation reserves necessary to meet this
obligation. Duke shall supply Partial Requirements Service in a manner that is as firm as, and otherwise comparable with, the manner in which Duke supplies Duke’s Native Load. Notwithstanding anything in this Agreement to the contrary, Duke
shall have no obligation to sell and deliver any electric capacity or energy to EMC that is not required to serve EMC’s Native Load. 
 4.3.2 Scheduling of EMC Contract Resources To Serve EMC Native Load. For each Hour beginning on January 1, 2011, and continuing through the Term of this Agreement, EMC’s contractual entitlement to electric energy from the
Dispatched Combined Cycle Resources and from the Baseload Resources shall be scheduled in accordance with the provisions of Sections 4.3.3 and 4.3.4, respectively. 
  

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 4.3.3 Scheduling of the Combined Cycle Resources. Duke may schedule, in accordance with Attachment
4-3 and Article 8, each of the Combined Cycle Resources pursuant to Duke’s economic dispatch as necessary to serve Duke’s total electric energy obligations. Duke shall make no adverse distinction against the Combined Cycle Resources in
determining the dispatch order of Duke’s Generation System and the Combined Cycle Resources. The Combined Cycle Resources that Duke schedules pursuant to economic dispatch shall be referred to as the “Dispatched Combined Cycle
Resources”. Except as provided in Section 4.3.3.1 and Section 4.3.3.2, EMC shall be solely responsible for all costs associated with the Combined Cycle Resources. 
 4.3.3.1 Duke shall not be obligated to pay for any costs that EMC incurs as a result of Duke’s dispatch of the Combined Cycle Resources to the
extent that Duke’s dispatch of such Combined Cycle Resources is for the purpose of serving Duke’s Native Load and, during any Year, Duke’s dispatch of a Combined Cycle Resource for that purpose does not exceed an Annual Capacity
Factor of twenty percent (20%). In the event and at such time during a Year that Duke’s dispatch of a Combined Cycle Resource to serve Duke’s Native Load exceeds an Annual Capacity Factor of twenty percent (20%), Duke shall pay EMC, in the
manner and time provided for in Article 13, the additional Energy Cost that EMC incurs as a result of Duke’s dispatch of such Combined Cycle Resource for the remainder of the Year. For example, if a Dispatched Combined Cycle Resource has a
generating capacity of one hundred (100) MWs during a Year and, as of 11:59:59 p.m. on November 30 of such Year, Duke has dispatched such resource for 175,200 MWhs for the purpose of serving Duke’s Native Load, Duke shall reimburse
EMC for the Energy Costs that EMC incurs in December of such Year as a result of Duke’s dispatch of such Dispatched Combined Cycle Resource. For the purpose of this Section 4.3.3.1, “Annual Capacity Factor” means the total amount
of electric energy generated by a Dispatched Combined Cycle Resource for the purpose of serving Duke’s Native Load during a Year divided by the product of (a) the total generating capacity of such Dispatched Combined Cycle Resource and
(b) 8,784 (during a leap year) or 8,760 (during a Year other than a leap year), multiplied by one hundred percent (100%). 
 4.3.3.2 In
the event that Duke’s dispatch of one or more of the Combined Cycle Resources is for any purpose other than to serve Duke’s Native Load, Duke shall pay EMC, in the manner and time provided for in Article 13, the additional Energy Cost that
EMC incurs as a result of Duke’s dispatch of such Combined Cycle Resource(s). 
 4.3.3.3 For purposes of Sections 4.3.3.1 and 4.3.3.2,
“Energy Cost” means, with respect to any Dispatched Combined Cycle Resource, all variable costs incurred by EMC that are associated with the production of electric energy under the WPSA, including the cost of fuel, start charges, and any
other variable charges incurred by EMC under the WPSA in connection with the electric energy dispatched by Duke from such Combined Cycle Resource regardless of NCEMC’s actual generating cost or NCEMC’s contractual source of the electric
energy. 
  

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 4.3.4 Scheduling of Baseload Resources. Duke shall schedule, in accordance with Article 8,
all of the Baseload Resources to the full extent that EMC’s entitlement to such resources are available to EMC and such electric energy shall be used to serve EMC’s Native Load. EMC shall be solely responsible for all costs associated with
the Baseload Resources. The Baseload Resources that Duke schedules pursuant to this Section 4.3.4 shall be referred to as “Dispatched Baseload Resources”. 
 4.4 Excepted Load. Notwithstanding anything to the contrary herein, Duke shall have no obligation to supply electric capacity or energy required by EMC to serve Excepted Load. Excepted Load shall consist of EMC
load that is either (a) Non-Conforming Load or (b) Non-Duke Control Area Load. Non-Conforming Load shall consist of (i) EMC load resulting from the merger of EMC with another electric membership corporation or other entity (except to
the extent such load was, at the time of the merger, already being served by Duke under an agreement substantially similar to this Agreement), and (ii) EMC wholesale load. Non-Conforming Load shall also consist of discrete EMC load (a) to
which electric service from EMC shall have commenced after the Effective Date, (b) that has a projected peak demand in excess of twenty-five (25) MW for the Year in which electric service from the EMC commences, and (c) which is
projected to change within a one-minute period by a significant quantity on a recurring basis due to the nature of the retail customer’s operations (e.g., without limitation, an arc furnace). 
 4.5 Good Title. Electric energy that is delivered by Duke to EMC shall be free and clear of all liens, Claims, and encumbrances at the Delivery Points, where
title to electric energy provided by Duke hereunder shall transfer to EMC. Electric energy that is delivered by EMC to Duke shall be free and clear of all liens, Claims, and encumbrances at the point where title to the electric energy is transferred
to Duke. 
 4.6 Power Quality. All electric energy provided hereunder at the point of delivery shall be three (3) phase, sixty (60) hertz,
and at system nominal voltages. 
  

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 Article 5  
 EMC Resources 
 5.1 EMC Contract Resources (Commencement Date - December 31,
2010). 
 5.1.1 Identification of Resources. Except as provided in Section 5.4.1, EMC’s Contract Resources during the
period commencing on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, shall consist of EMC’s entitlement to electric capacity and energy under the PPA and such
additional generation or purchased power resources or entitlements as EMC may acquire pursuant to Sections 5.1.3, 5.1.4 and 5.1.5. The FFR Resource is listed in Attachment 4-1. Except as provided in this Section 5.1.1, EMC
shall not, without first obtaining Duke’s prior written consent, enter into any other contracts for, or acquire any ownership interest in or contractual entitlement to, any additional electric generating resources or electric capacity or energy
under which electric capacity and energy would be used to serve EMC’s Native Load during the Term. 
 5.1.2 Changes to FFR
Resources. During the period commencing on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, EMC shall not: (a) take any action that would materially affect the
quantity or quality of MSCG’s service obligations under the PPA without first obtaining Duke’s prior written consent, or (b) agree to any modification to provisions of the PPA or the WPSA that would increase or decrease EMC’s
entitlement to electric capacity or energy under such agreements and for which EMC’s consent is required (except as provided in Section 5.1.4) without first obtaining Duke’s consent to such modification. 
 5.1.3 Resource Impairment. In the event that all or a portion of the FFR Resource, or any other EMC Contract Resource, is terminated or becomes
permanently impaired, EMC shall acquire, at EMC’s expense, a substitute resource (backed by reserves in an amount equal to that required under Duke’s Generation Planning Practices) that is of substantially equivalent size and comparable
reliability to the EMC Contract Resource, or portion thereof, that such substitute is replacing. 
 5.1.4 New Catawba Resource. In the
event that NCEMC acquires all or part of Saluda River Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station, and sells, allocates or transfers a percentage of that entitlement with such entitlement being made
available throughout the Year to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Base Obligation shall be increased by an amount equal to the amount of the entitlement so acquired by EMC. Upon Duke’s request,
EMC shall provide evidence reasonably satisfactory to Duke demonstrating that such entitlement in the Catawba Nuclear Station is backed by sufficient and reliable electric system generating reserves. Duke shall limit such requests to one
(1) request per Year; provided, that if Duke reasonably believes that the sufficiency or reliability of the electric system generating reserves backing EMC’s entitlement in the Catawba Nuclear Station may have changed since Duke’s
last such request, this limitation shall not apply. In the event that EMC fails to demonstrate that its entitlement in the Catawba Nuclear Station is backed by sufficient and reliable generating reserves, Duke shall supply, and EMC shall purchase,
such reserves in an amount equal to that required under Duke’s Generation 
  

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 Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as
determined under the prior sentence) supplied by Duke to EMC at the then-applicable Monthly Demand Charge. Duke’s provision and EMC’s purchase of such reserves shall not affect the determination of EMC’s Base Obligation. This Monthly
charge shall be billed by Duke in accordance with the provisions of Article 13. 
 5.1.4.1 In the event that NCEMC purchases electric
capacity and energy from Duke in lieu of NCEMC’s acquisition of all or a part of Saluda River Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station as provided in Section 5.1.4, and NCEMC sells, allocates
or transfers a portion of such electric capacity and energy to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Base Obligation shall be increased by an amount equal to the amount of the electric capacity and energy
so acquired by EMC. 
 5.1.5 Non-Consent Modification of EMC’s Contract Resources. In the event that EMC’s
entitlements to electric capacity and energy are reduced in accordance with Section 2.9(b) or Section 2.9(c) of the WPSA, the amount of the EMC’s Base Obligation shall not be affected and the provisions of Section 4.2.4.2 shall
apply, except that if the Parties are unable to reach agreement as to the rates, terms and conditions under which Duke would sell electric capacity and energy to EMC, the provisions of Section 5.1.3 shall apply. EMC shall provide written notice
to Duke as soon as reasonably practicable after EMC becomes aware of any modification to EMC’s entitlement to electric capacity and energy under the WPSA pursuant to this Section 5.1.5. In the event that EMC’s entitlements to electric
capacity and energy are increased in accordance with Section 2.9(b) or Section 2.9(c) of the WPSA, then, prior to the effective date of such increase, EMC may elect either to (a) increase EMC’s Base Obligation by the same amount
and to the same extent as EMC’s entitlements to electric capacity and energy are increased, or (b) make arrangements for the sale of EMC’s entitlements to such electric capacity and energy to a third party or to Duke. If EMC fails to
complete the arrangements described in (b) of the preceding sentence by the effective date of the increase in entitlements, then, as of the effective date of the increase in entitlements, the EMC’s Base Obligation automatically will be
increased as described in (a) of the preceding sentence. 
 5.2 EMC Contract Resources (January 1, 2011 -
Termination of Agreement). 
 5.2.1 Identification of Contract Resources. Except as provided in Section 5.4.1, EMC’s
Contract Resources during the period January 1, 2011, through the termination of this Agreement shall consist of EMC’s entitlements to electric capacity and energy under the contracts listed in Attachment 4-3 and such additional
generation or purchased power resources or entitlements as EMC may acquire pursuant to Sections 5.2.3, 5.2.4, and 5.2.5. EMC’s entitlements under the contracts that are listed in Attachment 4-3 shall be referred to as the Partial
Requirements Resources. Partial Requirements Resources consist of two (2) categories of entitlements: Baseload Resources and Combined Cycle Resources. The amount and the material cost and operational terms and conditions of the Baseload
Resources and Combined Cycle Resources shall be as set forth in Attachment 4-3, subject to modification in accordance with Sections 5.2.3 and 5.2.4. Except as provided in this Section 5.2.1, EMC shall not, without first obtaining

  

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 Duke’s prior written consent, enter into any other contracts for, or acquire any ownership interest in or
contractual entitlement to, any additional electric generating resources or electric capacity or energy under which electric capacity and energy would be used to serve EMC’s Native Load during the Term. 
 5.2.1.1 Extension of WPSA. Consistent with the provisions of Section 5.2.2, EMC shall have the right, without the prior consent of Duke, to
extend the term of the WPSA under substantially the same terms and conditions as exist at the time that EMC seeks to extend the term of the WPSA. If EMC extends the term of the WPSA in accordance with this Section 5.2.1.1, the EMC Contract
Resources listed in Attachment 4-3 shall be deemed to be changed accordingly. 
 5.2.2 Changes To Partial Requirements
Resources. Commencing January 1, 2011, through the termination of this Agreement, EMC shall not (a) take any action that would materially affect the quantity or quality of EMC’s entitlement to electric capacity and energy from the
Partial Requirements Resources without first obtaining Duke’s prior written consent, or (b) agree to any modification to provisions of the WPSA that would increase or decrease EMC’s entitlement to electric capacity or energy under
such agreement and for which EMC’s consent is required (except as provided in Section 5.2.4) without first obtaining Duke’s consent to such modification. 
 5.2.2.1 Modifications Effective After Termination. Notwithstanding the provisions of Section 5.2.2, EMC shall be permitted to agree to any resource modification under the WPSA without obtaining Duke’s
consent to the extent that such resource modification will become effective after the Term; provided, that if such resource modification will become effective prior to the end of the Term, EMC’s Partial Requirements Resources and Duke’s
obligation to provide Partial Requirements Service shall not be modified prior to the date that this Agreement is terminated unless Duke consents to such modification. 
 5.2.2.2 Sufficiency of Reserves. Upon Duke’s request, EMC shall provide evidence reasonably satisfactory to Duke demonstrating that each of EMC’s Partial Requirements Resources is backed by sufficient
and reliable electric system generating reserves. Duke shall limit such requests to one (1) request per Year with respect to any Partial Requirements Resource; provided, that if Duke reasonably believes that the sufficiency or reliability of
the electric system reserves backing any Partial Requirements Resource may have changed since Duke’s last such request, this limitation shall not apply with respect to that Partial Requirements Resource. In the event that EMC fails to
demonstrate that its entitlement in a Partial Requirements Resource is backed by sufficient and reliable generating reserves, Duke shall supply, and EMC shall purchase, such reserves in an amount equal to that required under Duke’s Generation
Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as determined under the prior sentence) supplied by Duke to EMC and the then applicable Monthly Demand Charge. This Monthly charge
shall be billed by Duke in accordance with the provisions of Article 13. Duke’s provision and EMC’s purchase of such reserves shall not affect the determination of the amount of Partial Requirements Resources, Baseload Resources or
Combined Cycle Resources. EMC shall provide written notice to Duke as soon as reasonably practicable after EMC becomes aware of a material change to the seller’s service obligations under the contracts listed in Attachment 4-3; provided,
that such notice shall be for information purposes only, and shall not affect any other obligations of either Party under this Agreement. 
  

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 5.2.3 Non-Consent Partial Requirements Resource Modifications. In the event that EMC’s
entitlements are modified pursuant to Section 2.9(b) or Section 2.9(c) of the WPSA, EMC’s Partial Requirements Resources shall be modified in the same amount and to the same extent. To the extent that a Partial Requirements Resource
is modified pursuant to this Section 5.2.3, and the modification changes EMC’s entitlement in a resource listed as a Baseload Resource in Attachment 4-3, the amount of such Baseload Resource, as listed in Attachment 4-3,
shall be deemed to be changed accordingly. EMC shall provide written notice to Duke as soon as reasonably practicable after EMC becomes aware of any modification to EMC’s entitlement to electric capacity and energy under the WPSA pursuant to
this Section 5.2.3. To the extent that a Partial Requirements Resource is modified pursuant to this Section 5.2.3, and the modification changes EMC’s entitlement in a resource listed as a Combined Cycle Resource in Attachment
4-3, the amount of such Combined Cycle Resource, as listed in Attachment 4-3, shall be deemed to be changed accordingly. 
 5.2.4
New Catawba Resource. In the event that NCEMC acquires all or part of Saluda River Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station, and sells, allocates or transfers a percentage of that entitlement with
such entitlement being made available throughout the Year to EMC (through modification of the WPSA or pursuant to a new contract), the entitlement or resource so acquired by EMC shall constitute an additional Partial Requirements Resource, and shall
be deemed to be an additional Baseload Resource. Upon Duke’s request, EMC shall provide evidence reasonably satisfactory to Duke demonstrating that such entitlement in the Catawba Nuclear Station is backed by sufficient and reliable electric
system generating reserves. Duke shall limit such requests to one (1) request per year; provided, that if Duke reasonably believes that the sufficiency or reliability of the electric system generating reserves backing EMC’s entitlement in
the Catawba Nuclear Station may have changed since Duke’s last such request, this limitation shall not apply. In the event that EMC fails to demonstrate that its entitlement in the Catawba Nuclear Station is backed by sufficient and reliable
generating reserves, Duke shall supply, and EMC shall purchase, such reserves in an amount equal to that required under Duke’s Generation Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of
reserves (as determined under the prior sentence) supplied by Duke to EMC and the then-applicable Monthly Demand Charge. This Monthly charge shall be billed by Duke in accordance with the provisions of Article 13. Duke’s provision and
EMC’s purchase of such reserves shall not affect the determination of the amount of Partial Requirements Resources, Baseload Resources or Combined Cycle Resources. 
 5.2.4.1 In the event that NCEMC purchases electric capacity and energy from Duke in lieu of NCEMC’s acquisition of all or a part of Saluda River Electric Cooperative’s existing ownership interest in the
Catawba Nuclear Station as provided in Section 5.2.4, and NCEMC sells, allocates or transfers a portion of such capacity and energy to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Baseload Resources shall
be increased by an amount equal to the amount of the electric capacity and energy so acquired by EMC. 
  

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 5.2.5 Resource Impairment. In the event that all or a portion of an EMC Contract Resource is
terminated or becomes permanently impaired, EMC shall acquire, at EMC’s cost, a substitute resource (backed by reserves in an amount equal to that required under Duke’s Generation Planning Practices) that is of substantially equivalent
size and comparable reliability to the EMC Contract Resource, or portion thereof, that such substitute resource is replacing, and that Duke reasonably agrees is sufficiently reliable. EMC’s acquisition of such substitute resource shall not
affect the determination of the amount of Partial Requirements Resources, Baseload Resources or Combined Cycle Resources. 
 5.3 No Duke Obligation for
Customer Resources. Unless otherwise explicitly provided in this Agreement, nothing herein shall be interpreted or construed as imposing upon Duke any obligations or liabilities, or for transferring to Duke any EMC obligations or liabilities,
under or otherwise pertaining to any EMC Contract Resource, nor shall anything in this Agreement be interpreted or construed as creating or implying any contractual or other relationship between Duke and any other party as to a EMC Contract
Resource. 
 5.4 New Customer Resources. Except as provided in Section 5.4.1, Duke shall have no obligation to amend this Agreement and EMC shall
not make an application to FERC requesting that FERC require that any amendment be made to this Agreement, to accommodate any contractual entitlement to and/or ownership interest in or pertaining to any new electric capacity and/or energy resource
that EMC may obtain after the Effective Date. 
 5.4.1 PURPA Resources. Nothing herein shall limit EMC’s right to purchase
electric capacity and energy from a Qualifying Facility or other renewable resources pursuant to PURPA (“PURPA Resource”). If, during the Term, EMC purchases electric capacity and energy from a PURPA Resource with a nameplate capacity
equal to or greater than one (1) MW, then, for each Month during the period of such purchase: (i) the average hourly integrated electric energy delivered to EMC by such PURPA Resource during the Hours used for determination of the EMC
Monthly Demand Quantity determined in accordance with Section 7.1.4.1 or 7.2.4.1 as applicable or used for determination of the Monthly Billing Demand determined in accordance with Section 7.2.6.3.2 or Section 7.3.2.2 increased for
losses between the point of measurement of EMC’s Native Load and the Duke generation level, shall be added to the EMC Monthly Demand Quantity determined in accordance with Section 7.1.4.1 or 7.2.4.1 as applicable or to the Monthly Billing
Demand determined in accordance with Section 7.2.6.3.2 or Section 7.3.2.2 for such Month, as applicable; (ii) for purposes of calculating the electric energy charges under Sections 7.1.5, 7.2.5, 7.2.6.4 and 7.3.3, as applicable, the
amount of electric energy provided to EMC by such PURPA Resource during an Hour, increased for losses between the point of measurement of EMC’s Native Load and the Duke generation level, shall be added to EMC’s Native Load and to the EMC
Group Native Load for such Hour; and (iii) Duke shall credit EMC, on a Monthly basis, an amount equal to the electric capacity and energy credits to which EMC would be entitled as set forth in Duke’s retail electric tariff on file with the
NCUC, Schedule PP-H or Schedule PP-N (as applicable), Interconnected to Distribution System or Transmission System (as applicable), or its successor tariff, if the capacity and electric energy provided to EMC by such PURPA Resource were provided to
Duke pursuant to and in accordance with such schedules. The interconnection to Duke’s (rather than the EMC’s) Distribution System or Transmission System, as those terms are defined in the schedules, will determine whether the Distribution
System or Transmission System rates apply. EMC will coordinate with Duke to 
  

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 determine the proper application of these schedules. If Schedule PP-H or Schedule PP-N do not apply to the PURPA
Resource, then Duke shall credit EMC, on a Monthly basis, an amount equal to the electric capacity and energy credits to which EMC would be entitled under PURPA if the electric capacity and electric energy provided to EMC by such PURPA Resource were
provided to Duke pursuant to PURPA. EMC’s purchase of the electric capacity and energy from a PURPA Resource shall not affect the determination of the Annual Capacity Quantity determined in accordance with Sections 3.5.2.3.1, 3.5.2.3.2 or
3.5.2.3.3, as applicable. 
 Article 6  
 Priority of Service 
 6.1 Interruption of FFR Supplemental Service and Partial Requirements Service. FFR
Supplemental Service and Partial Requirements Service shall have an interruption priority equivalent to Duke’s Native Load. It is expressly understood and agreed that, except for Duke’s failure to comply with Section 6.2 or as
provided in Section 6.4, Duke shall not be liable to EMC for damages resulting from any such interruptions or impairment of FFR Supplemental Service or Partial Requirements Service. Duke shall use Commercially Reasonable Efforts to notify EMC
by telephone of any scheduled interruption or scheduled impairment of service hereunder and shall use Commercially Reasonable Efforts to confirm such notice by facsimile, electronic mail, or letter on the same date such notice was given. Duke shall
notify EMC by telephone of any unscheduled interruption or impairment of service hereunder as soon as reasonably practicable under the circumstances resulting in such unscheduled interruption or impairment of service. Duke shall use Commercially
Reasonable Efforts to remove all causes of such interrupted or impaired service hereunder. 
 6.2 Curtailments of Load. Except as provided in
Section 4.2.6, EMC’s Native Load shall be subject to curtailment only in accordance with this Section 6.2. In the event that Duke curtails Duke Native Load for any reason, including Force Majeure, EMC shall curtail its load as
directed by Duke. Except as provided in Section 4.2.6, Duke shall not adversely distinguish against EMC’s Native Load in curtailing Duke’s Native Load and directing EMC to curtail EMC’s Native Load; provided, however, that Duke
has sole responsibility to design all curtailments, and may order any manner of curtailment that Duke believes is appropriate so long as EMC’s Native Load and Duke’s Native Load present in the electrical area being curtailed are curtailed
on a non-discriminatory basis. In permitting EMC to restore EMC’s Native Load and restoring Duke’s Native Load that was curtailed, Duke shall not adversely distinguish against EMC’s Native Load, except as provided in
Section 4.2.6. The load curtailment and restoration provisions set forth in this Section 6.2 are in addition to, and without limitation of, the load curtailment and restoration provisions set forth in Section 4.2.6. 
 6.3 Emergency Load Curtailment Program. EMC agrees to implement an emergency load curtailment program for the curtailment of EMC’s Native Load in the event a
load curtailment order is made by Duke. EMC shall comply with its obligation to implement and maintain an emergency load curtailment program and to curtail EMC’s Native Load in the manner specified by Section 6.2. 
  

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 6.4 Substitute Energy. In the event that Duke fails to deliver a sufficient quantity of electric energy to meet
its obligations to provide FFR Supplemental Service or Partial Requirements Service, as the case may be, and Duke’s failure to deliver such electric energy is not pursuant to a curtailment permitted under Section 4.2.6 or 6.2 of this
Agreement, or is otherwise excused under this Agreement, Duke shall pay to EMC an amount equal to EMC’s Cover Costs, if any, incurred for the electric energy that EMC obtained to replace such electric energy (“Substitute Energy”) Duke
failed to supply. EMC’s Cover Costs shall be equal to Substitute Energy Costs incurred by EMC for the Substitute Energy minus the costs that EMC would have incurred had Duke supplied the electric energy to EMC. EMC shall bill its Cover Costs to
Duke in accordance with the provisions of Article 13. In the event that EMC incurs Cover Costs for Substitute Energy over a period that extends past the Month in which Duke’s failure to deliver electric energy occurs, then Duke shall pay
the Cover Costs incurred in the following Month(s) in accordance with the billing and payment provisions of Article 13. 
 6.5 Substitute Energy
Costs. Substitute Energy Costs shall be equal to (i) in the case in which EMC contracts with an energy supplier to provide Substitute Energy to EMC, the cost that EMC, acting in a commercially reasonable manner, incurs to purchase such
Substitute Energy, or (ii) in the case in which Substitute Energy is provided to EMC by the Control Area operator, system operator, or similar entity providing such service on behalf of load (or load serving entities), the cost to EMC imposed
on EMC by such Control Area operator, system operator, or other entity providing such Substitute Energy. In either case, Substitute Energy Costs shall include ancillary services charges, if any, reasonably incurred by EMC to the point where electric
energy is delivered to the Transmission System or imposed to the point where electric energy is delivered to the Transmission System by the Control Area operator, system operator, or other entity providing Substitute Energy, including congestion
charges, energy imbalance charges, backup capacity charges, replacement capacity charges, deficient capacity charges, commitment fees, ratcheted demand and similar charges incurred by EMC in obtaining such Substitute Energy. 
 Article 7  
 Capacity and
Energy Charges 
 7.1 Charges During Commencement Date - December 31, 2006. 
 7.1.1 General. For FFR Supplemental Service provided during the period beginning on the Commencement Date, and continuing through
December 31, 2006, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.1.4, the Duke Monthly Energy Charge set forth in Section 7.1.5.1, if applicable, the Monthly Scheduling Agent Service Charge set forth in
Section 7.1.6 and, if applicable, the Monthly Reserve Capacity Charge set forth in Section 7.4, minus the EMC Monthly Energy Credit set forth in Section 7.1.5.5. In addition, the Duke Monthly Reconciliation Charge, Piedmont Monthly
Reconciliation Credit, and the Monthly Inter-EMC Energy Transfer Reconciliation Charge shall be billed or credited as provided in Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13. The charges set forth in this Section 7.1 are in addition to the other
charges set forth in other sections of this Agreement. 
 7.1.2 [intentionally omitted]. 
  

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 7.1.3 [intentionally omitted]. 
 7.1.4 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to the product of (i) the Monthly Demand Rate for the Year
($/kW-Month) and (ii) the Monthly Demand Amount for the Month (kW). The Monthly Demand Rate for 2006 shall be $0.75/kW-Month. The Monthly Demand Amount for a Month shall be equal to the product of (i) the EMC Monthly Demand Quantity for
the Month divided by the EMC Group Combined Monthly Demand Quantity for the Month and (ii) the EMC Group Monthly Demand Quantity for the Month. In no event shall the Monthly Demand Quantity be less than zero. A sample calculation is provided in
Attachment 7-2. 
 7.1.4.1 EMC Monthly Demand Quantity. The EMC Monthly Demand Quantity for a Month shall be equal to the EMC
Hourly Demand at the time of the Maximum Demand Hour for the Month minus EMC’s Base Obligation at the time of the Maximum Demand Hour. In no event shall the EMC Monthly Demand Quantity be less than zero. 
 7.1.4.2 EMC Group Combined Monthly Demand Quantity. The EMC Group Combined Monthly Demand Quantity for a Month shall be equal to the sum of
(i) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of this Agreement, (ii) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of the Duke-Blue Ridge Agreement, and
(iii) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of the Duke-Rutherford Agreement. 
 7.1.4.3 EMC
Group Monthly Demand Quantity. The EMC Group Monthly Demand Quantity for a Month shall be equal to the difference between the EMC Group Hourly Demand and the EMC Group’s Base Obligation during the Maximum Demand Hour of the Month, but in no
event shall the EMC Group Monthly Demand Quantity for a Month be less than zero. The EMC Group Hourly Demand for an Hour shall be equal to the integrated sixty (60) minute demand of the EMC Group Native Load during the Hour. The Maximum Demand
Hour of a Month shall be the Hour in which the positive difference between the EMC Group Native Load and the EMC Group’s Base Obligation is the greatest (as determined by subtracting the EMC Group’s Base Obligation from the EMC Group
Native Load in every Hour of the Month, to determine the Hour in which such maximum difference for the Month occurs). 
 7.1.5 Monthly
Energy Charges. 
 7.1.5.1 Duke Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the sum of the
Duke Hourly Energy Charges for the Month. The Duke Hourly Energy Charge for an Hour shall be equal to the sum of the Piedmont Allocated Share of the Duke Total Hourly Energy Charge for the Hour plus the Piedmont Allocated Share of the Inter-EMC
Energy Charge for the Hour. 
 7.1.5.2 Duke Total Hourly Energy Charge. The Duke Total Hourly Energy Charge for an Hour shall be equal
to the product of (i) one hundred thirteen percent (113%) of Duke’s Territorial Incremental Cost for the Hour and (ii) the EMC Group Energy Purchase Amount for the Hour. The amount of electric energy delivered by Duke to the EMC
Group during any Hour shall be calculated as set forth in Section 7.1.5.10. 
  

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 7.1.5.3 Piedmont Allocated Share of Duke Total Hourly Energy Charge. The Piedmont Allocated Share
of the Duke Total Hourly Energy Charge for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Piedmont Allocated Share of the Duke Total Hourly Energy Charge for an Hour is shown in
Attachment 7-4. 
 7.1.5.4 Piedmont Allocated Share of Inter-EMC Energy Charge. The Piedmont Allocated Share of the
Inter-EMC Energy Charge for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Piedmont Allocated Share of the Inter-EMC Energy Charge for an Hour is shown in Attachment 7-4.

 7.1.5.5 EMC Monthly Energy Credit. The EMC Monthly Energy Credit for a Month shall be equal to the sum of the EMC Hourly Energy
Credits for the Month. The EMC Hourly Energy Credit for an Hour shall be equal to the sum of the Piedmont Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour plus the Piedmont Allocated Share of the Inter-EMC Energy Credit for
the Hour. 
 7.1.5.6 EMC Group Total Hourly Energy Credit. The EMC Group Total Hourly Energy Credit for an Hour shall be equal to the
product of (i) ninety percent (90%) of Duke’s Territorial Decremental Cost for the Hour and (ii) the EMC Group Energy Credit Amount for the Hour. The amount of electric energy delivered by the EMC Group to Duke during any Hour
shall be calculated as set forth in Section 7.1.5.10. 
 7.1.5.7 Piedmont Allocated Share of EMC Group Total Hourly Energy
Credit. The Piedmont Allocated Share of the EMC Group Total Hourly Energy Credit for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Piedmont Allocated Share of the EMC Group Total
Hourly Energy Credit for an Hour is shown in Attachment 7-4. 
 7.1.5.8 Piedmont Allocated Share of Inter-EMC Energy Credit.
The Piedmont Allocated Share of the Inter-EMC Energy Credit for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Piedmont Allocated Share of the Inter-EMC Energy Credit for an Hour is shown
in Attachment 7-4. 
 7.1.5.9 Calculation of Piedmont Hourly Energy Amounts. The amount of electric energy delivered by Duke to
Piedmont, and by Piedmont to Duke for an Hour, shall be calculated as follows: electric energy scheduled under this Agreement shall be scheduled using two (2) dynamic (instantaneous) signals representing the difference between EMC’s Native
Load and EMC’s Base Obligation. At the time of this Agreement, these signals are sampled once every four (4) seconds; the time period between each sample as defined herein shall be referred to as an “Interval”. The time duration
of the Intervals shall be subject to change based on Duke’s standard operating practices. A signal during an Interval in which EMC’s Native Load exceeds EMC’s Base Obligation shall be referred to herein as an EMC Call Signal,
indicating electric energy supplied by Duke to Piedmont. A signal during an Interval in which EMC’s Base Obligation exceeds EMC’s Native Load shall be referred to herein as an EMC Put Signal, indicating electric energy being supplied by
Piedmont to Duke. The integrated value of the EMC Call Signals (separate from and not combined with the EMC Put Signals) summed 
  

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 across all Intervals during the Hour shall be used as the amount of electric energy supplied by Duke to Piedmont for the
Hour, and the integrated value of the EMC Put Signals (separate from and not combined with the EMC Call Signals) summed across all Intervals during the Hour shall be used as the amount of electric energy supplied by Piedmont to Duke for the Hour.
The amount of electric energy supplied by Duke to Piedmont for the Hour, as calculated in this Section 7.1.5.9, shall be referred to herein as the Piedmont Energy Purchase Amount for the Hour. The amount of electric energy supplied by Piedmont
to Duke for the Hour, as determined in this Section 7.1.5.9, shall be referred to herein as the Piedmont Energy Credit Amount for the Hour. An example showing the calculation of such amounts is shown in Attachment 7-5. 
 7.1.5.10 Calculation of EMC Group Energy Amounts. The amount of electric energy delivered by Duke to the EMC Group, and by the EMC Group to Duke,
for the Hour shall be calculated as follows: Electric energy scheduled under the Partial Requirements Agreements shall be scheduled using two (2) dynamic (instantaneous) signals representing the differences between the EMC Group Native Load and
the EMC Group’s Base Obligation. At the time of this Agreement, these signals are sampled once every four (4) seconds; the time period between each sample as defined herein shall be referred to as an “Interval”. The time duration
of the Intervals shall be subject to change based on Duke’s standard operating practices. A signal during an Interval in which EMC Group’s Native Load exceeds EMC Group’s Base Obligation shall be referred to herein as an EMC Group
Call Signal, indicating electric energy supplied by Duke to the EMC Group. A signal during an Interval in which EMC Group’s Base Obligation exceeds EMC Group’s Native Load shall be referred to herein as an EMC Group Put Signal, indicating
electric energy being supplied by EMC Group to Duke. The integrated value of the EMC Group Call Signals (separate from and not combined with the EMC Group Put Signals) summed across all Intervals during the Hour shall be used as the amount of
electric energy supplied by Duke to the EMC Group for the Hour, and the integrated value of the EMC Group Put Signals (separate from and not combined with the EMC Group Call Signals) summed across all Intervals during the Hour shall be used as the
amount of electric energy supplied by the EMC Group to Duke for the Hour. The amount of electric energy supplied by Duke to EMC Group for the Hour, as calculated in this Section 7.1.5.10, shall be referred to herein as EMC Group Energy Purchase
Amount for the Hour. The amount of electric energy supplied by the EMC Group to Duke for the Hour, as determined in this Section 7.1.5.10, shall be referred to herein as the EMC Group Energy Credit Amount for the Hour. An example showing the
calculation of such amounts is shown in Attachment 7-6. 
 7.1.5.11 Duke Monthly Reconciliation Charge. The Duke Monthly
Reconciliation Charge for a Month shall be equal to the sum of the Duke Hourly Reconciliation Charges for the Month. The Duke Hourly Reconciliation Charge for an Hour shall be equal to the product of (a) the Duke Total Hourly Energy Charge for
the Hour minus the Duke Reconciliation Amount for the Hour and (b) the Reconciliation Allocation Factor. The Duke Reconciliation Amount for an Hour shall be equal to the sum of (i) the Piedmont Allocated Share of the Duke Total Hourly
Energy Charge for the Hour as set forth in Section 7.1.5.3 of this Agreement, (ii) the Rutherford Allocated Share of the Duke Total Hourly Energy Charge for the Hour as set forth in Section 7.1.5.3 of the Duke-Rutherford Agreement,
and (iii) the Blue Ridge Allocated Share of the Duke Total Hourly Energy Charge for the Hour as set forth in Section 7.1.5.3 of the Duke-Blue Ridge Agreement. If the Duke Monthly Reconciliation Charge is positive, EMC shall pay such amount
to Duke; if the Duke Monthly Reconciliation Charge is negative, such amount shall be credited to EMC. 
  

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 7.1.5.12 Piedmont Monthly Reconciliation Credit. The Piedmont Monthly Reconciliation Credit for a
Month shall be equal to the sum of the Piedmont Hourly Reconciliation Credits for the Month. The Piedmont Hourly Reconciliation Credit for an Hour shall be equal to the product of (a) the EMC Group Total Hourly Energy Credit for the Hour minus
the EMC Group Reconciliation Amount for the Hour and (b) the Reconciliation Allocation Factor. The EMC Group Reconciliation Amount for an Hour shall be equal to the sum of (i) the Piedmont Allocated Share of the EMC Group Total Hourly
Energy Credit for the Hour as set forth in Section 7.1.5.7 of this Agreement, (ii) the Rutherford Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour as set forth in Section 7.1.5.7 of the Duke-Rutherford
Agreement, and (iii) the Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour as set forth in Section 7.1.5.7 of the Duke-Blue Ridge Agreement. If the Piedmont Monthly Reconciliation Credit is negative, EMC
shall pay such amount to Duke; if the Piedmont Monthly Reconciliation Credit is positive, such amount shall be credited to EMC. 
 7.1.5.13
Inter-EMC Energy Transfer Reconciliation Charge. The Monthly Inter-EMC Energy Transfer Reconciliation Charge for a Month shall be equal to the sum of the Hourly Inter-EMC Transfer Reconciliation Charges for the Month. The Hourly Inter-EMC
Transfer Reconciliation Charge for an Hour shall be equal to the product of (a) the Reconciliation Allocation Factor and (b) (i) the sum of the Piedmont Allocated Share of the Inter-EMC Energy Charge for the Hour as set forth in
Section 7.1.5.4 of this Agreement, the Rutherford Allocated Share of the Inter-EMC Energy Charge for the Hour as set forth in Section 7.1.5.4 of the Duke-Rutherford Agreement, and the Blue Ridge Allocated Share of the Inter-EMC Energy
Charge for the Hour as set forth in Section 7.1.5.4 of the Duke-Blue Ridge Agreement, minus (ii) the sum of the Piedmont Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in Section 7.1.5.8 of this Agreement,
the Rutherford Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in Section 7.1.5.8 of the Duke-Rutherford Agreement, and the Blue Ridge Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in
Section 7.1.5.8 of the Duke-Blue Ridge Agreement. If the Monthly Inter-EMC Energy Transfer Reconciliation Charge is negative, EMC shall pay such amount to Duke. If the Monthly Inter-EMC Energy Transfer Reconciliation Charge is positive, such
amount shall be credited to EMC. 
 7.1.6 Scheduling Agent Service Charge. In the event that this Agreement is terminated in
accordance with the provisions of Section 3.5.2.2, EMC shall pay to Duke the Monthly Scheduling Agent Service Charge commencing on the date that Scheduling Agent Services commence. The Monthly Scheduling Agent Service Charge for a Month shall
be equal to one thousand dollars ($1,000) per Month. 
 7.1.7 References to Other Agreements. For purposes of calculating the charges
and credits under Sections 3.5.2.3 and 7.1 (including charges and credits calculated pursuant to Section 7.1 in the event that EMC exercises its option pursuant to Section 3.5.2.3), (i) all references in this Agreement to quantities
under or as determined or set forth in the Duke-Blue Ridge Agreement shall be deemed to refer to such quantities during the period in which the 
  

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 Duke-Blue Ridge Agreement is in effect, before which time and after which time such quantities shall be deemed to be
equal to zero; and (ii) all references in this Agreement to quantities under or as determined or set forth in the Duke-Rutherford Agreement shall be deemed to refer to such quantities during the period in which the Duke-Rutherford Agreement is
in effect, before which time and after which time such quantities shall be deemed to be equal to zero. For example, if this Agreement and the Duke-Blue Ridge Agreement terminate August 31, 2008, and the Duke-Rutherford Agreement terminates
August 31, 2007, then during the period through August 31, 2007, EMC Group Native Load shall mean the sum of (i) the EMC Native Load under this Agreement, (ii) the EMC Native Load under the Duke-Blue Ridge Agreement, and
(iii) the EMC Native Load under the Duke-Rutherford Agreement, and during the period September 1, 2007 through August 31, 2008, EMC Group Native Load shall mean the sum of (i) the EMC Native Load under this Agreement and
(ii) the EMC Native Load under the Duke-Blue Ridge Agreement. In addition, for purposes of calculating the charges under Sections 3.5.2.3 and 7.1 (including charges and credits calculated pursuant to Section 7.1 in the event that EMC
exercises its option pursuant to Section 3.5.2.3), all references to “EMC Group” shall refer collectively to the members of such group that are served under those of the above-referenced Agreements that are then in effect
(e.g., in the above example, “EMC Group” would no longer include Rutherford effective September 1, 2007). 
 7.2 Charges During January 1, 2007 – December 31, 2010 . 
 7.2.1 For FFR Supplemental Service provided during
the period beginning on January 1, 2007, and continuing through December 31, 2010, EMC shall pay to Duke the Base Annual Capacity Charge set forth in Section 7.2.2, the Excess Annual Capacity Charge set forth in Section 7.2.3,
the Monthly Demand Charge set forth in Section 7.2.4, the Duke Monthly Energy Charge set forth in Section 7.2.5.1, and, if applicable, the Monthly Reserve Capacity Charge set forth in Section 7.4, minus the EMC Monthly Energy Credit
set forth in Section 7.2.5.3. The charges set forth in this Section 7.2 are in addition to the other charges set forth in other sections of this Agreement. 
 7.2.2 Base Annual Capacity Charge. The Base Annual Capacity Charge for a Year shall be equal to the product of (i) the Annual Capacity Price for the Year ($/kW-Year) and (ii) the Annual Capacity
Quantity for the Year (kW). The Annual Capacity Price for 2007 through 2010 shall be as follows: 
 2007 $38.00/kW-year

 2008 $40.00 kW-year 
 2009 $57.00 kW-year 
 2010 $58.00 kW-year 
 and the Annual Capacity Quantity for 2007 through 2010 shall be as follows: 
 2007 23,000 kW 
 2008 24,000 kW 
 2009 23,000 kW 
 2010 24,000 kW 
  

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 Provided, that the Annual Capacity Quantity amounts set forth in this Secton 7.2.2 for 2009 and 2010 shall be decreased,
on a kW for kW basis, for any increase in EMC’s Base Obligation that occurs pursuant to Section 5.1.4. The Base Annual Capacity Charge shall be billed in accordance with Article 13 in the July statement each Year. 
 7.2.3 Excess Annual Capacity Charge. The Excess Annual Capacity Charge for a Year shall be equal to the product of (i) the Excess Annual
Capacity Price for the Year ($/kW-Year) and (ii) the EMC Excess Annual Capacity Quantity for the Year (kW). The Excess Annual Capacity Charge for the Year shall be billed in accordance with Article 13 in the September statement based on the
actual Duke billing data during July and August of such Year. 
 7.2.3.1 Excess Annual Capacity Price. The Excess Annual Capacity
Price for each Year shall be equal to 120 percent of the Annual Capacity Price for that Year as identified in Section 7.2.2. 
 7.2.3.2
EMC Excess Annual Capacity Quantity. The EMC Excess Annual Capacity Quantity for a Year shall be equal to the EMC Coincident Peak Demand for the Year minus EMC’s Base Obligation for the Hour in such Year in which the EMC Coincident Peak
Demand occurs, minus the Annual Capacity Quantity for the Year. In no event shall the EMC Excess Annual Capacity Quantity be less than zero. The EMC Coincident Peak Demand for a Year shall be equal to the EMC Hourly Demand that is coincident with
the maximum integrated sixty (60) minute Duke Schedule 1 Demands during July and August of the Year. The EMC Hourly Demand for an Hour shall be equal to the integrated sixty (60) minute demand of EMC’s Native Load during the Hour.

 7.2.4 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to the product of (i) the Monthly Demand
Rate for the Year ($/kW-Month) and (ii) the EMC Monthly Demand Quantity for the Month (kW). The Monthly Demand Rate for 2007 through 2010 shall be as follows: 
 2007        $1.08/kW-month 
 2008        $1.25 kW-month 
 2009        $1.33 kW-month 
 2010        $1.42 kW-month 
 7.2.4.1 EMC Monthly Demand Quantity. The EMC Monthly Demand Quantity for a Month shall be equal to the EMC Hourly Demand at the time of the
Maximum Demand Hour for the Month minus EMC’s Base Obligation at the time of the Maximum Demand Hour. In no event shall the EMC Monthly Demand Quantity be less than zero. The Maximum Demand Hour of a Month shall be the Hour in which the
positive difference between EMC’s Native Load and EMC’s Base Obligation is the greatest (as determined by subtracting EMC’s Base Obligation from EMC’s Native Load in every Hour of the Month, to determine the Hour in which such
maximum difference for the Month occurs). 
  

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 7.2.5 Monthly Energy Charges. 
 7.2.5.1 Duke Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the sum of the Duke Hourly Energy Charges for the
Month. 
 7.2.5.2 Duke Hourly Energy Charge. The Duke Hourly Energy Charge for an Hour shall be equal to the product of (i) one
hundred thirteen percent (113%) of Duke’s Territorial Incremental Cost for the Hour and (ii) the Piedmont Energy Purchase Amount for the Hour. The amount of electric energy delivered by Duke to EMC during any Hour shall be calculated
as set forth in Section 7.2.5.5. 
 7.2.5.3 EMC Monthly Energy Credit. The EMC Monthly Energy Credit for a Month shall be equal
to the sum of the EMC Hourly Energy Credits for the Month. 
 7.2.5.4 EMC Hourly Energy Credit. The EMC Hourly Energy Credit for an
Hour shall be equal to the product of (i) ninety percent (90%) of Duke’s Territorial Decremental Cost for the Hour and (ii) the Piedmont Energy Credit Amount for the Hour. The amount of electric energy delivered by the EMC to
Duke during any Hour shall be calculated as set forth in Section 7.2.5.5. 
 7.2.5.5 Calculation of Piedmont Hourly Energy
Amounts. The amount of electric energy delivered by Duke to Piedmont, and by Piedmont to Duke for an Hour, shall be calculated as follows: electric energy scheduled under this Agreement shall be scheduled using two (2) dynamic
(instantaneous) signals representing the difference between EMC’s Native Load and EMC’s Base Obligation. At the time of this Agreement, these signals are sampled once every four (4) seconds; the time period between each sample as
defined herein shall be referred to as an “Interval”. The time duration of the Intervals shall be subject to change based on Duke’s standard operating practices. A signal during an Interval in which EMC’s Native Load exceeds
EMC’s Base Obligation shall be referred to herein as an EMC Call Signal, indicating electric energy supplied by Duke to Piedmont. A signal during an Interval in which EMC’s Base Obligation exceeds EMC’s Native Load shall be referred
to herein as an EMC Put Signal, indicating electric energy being supplied by Piedmont to Duke. The integrated value of the EMC Call Signals (separate from and not combined with the EMC Put Signals) summed across all Intervals during the Hour shall
be used as the amount of energy supplied by Duke to Piedmont for the Hour, and the integrated value of the EMC Put Signals (separate from and not combined with the EMC Call Signals) summed across all Intervals during the Hour shall be used as the
amount of energy supplied by Piedmont to Duke for the Hour. The amount of electric energy supplied by Duke to Piedmont for the Hour, as calculated in this Section 7.2.5.5, shall be referred to herein as the Piedmont Energy Purchase Amount for
the Hour. The amount of electric energy supplied by Piedmont to Duke for the Hour, as determined in this Section 7.2.5.5, shall be referred to herein as the Piedmont Energy Credit Amount for the Hour. An example showing the calculation of such
amounts is shown in Attachment 7-5. 
  

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 7.2.6 System Average Pricing Option 
 7.2.6.1 Exercise of Option. During the period January 1, 2007 through December 31, 2010, EMC shall have the option of being subject to
the pricing provisions set forth in Sections 7.2.6.2, 7.2.6.3, and 7.2.6.4 in lieu of the pricing provisions set forth in Sections 7.2.1, 7.2.2, 7.2.3, 7.2.4 and 7.2.5. EMC may exercise such option (referred to herein as the “System Average
Pricing Option”) for the period beginning January 1, 2007, January 1, 2008, January 1, 2009, or January 1, 2010, and ending December 31, 2010. The period that EMC selects pursuant to this option (i.e.,
January 1, 2007 - December 31, 2010, January 1, 2008 - December 31, 2010, January 1, 2009 - December 31, 2010, or January 1, 2010 - December 31, 2010) shall be referred to herein as the “System Average Pricing
Option Period.” EMC may exercise such option by giving notice (such notice referred to herein as the “System Average Pricing Option Notice”) to Duke no later than September 30 of the Year prior to the Year in which the System
Average Pricing Option Period that EMC selects would commence. For example, if EMC wishes to exercise its option under this Section 7.2.6 effective January 1, 2008, it must provide its System Average Pricing Option Notice no later than
September 30, 2007. The System Average Pricing Option Notice is effective when it is deemed given in accordance with Section 16.22. Once the System Average Pricing Option Notice is given to Duke, it shall not be amended, modified or
otherwise revoked for any reasons unless such amendment, modification or revocation is mutually agreed to by both Parties in writing. 
 7.2.6.2 General. During the System Average Price Option Period, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.2.6.3 and the Duke Monthly Energy Charge set forth in Section 7.2.6.4, in lieu of the
charges set forth in Sections 7.2.1, 7.2.2, 7.2.3, 7.2.4, and 7.2.5. The charges set forth in Section 7.2.6 are in addition to the other charges set forth in other sections of this Agreement (including, if applicable, the Monthly Reserve
Capacity Charge set forth in Section 7.4). 
 7.2.6.3 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal
to the product of (i) the Monthly Billing Demand for the Month (kW) and (ii) the Monthly Demand Rate for the Year ($/kW-Month). 
 7.2.6.3.1 Monthly Demand Rate. The Monthly Demand Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Monthly Demand Rate initially shall be calculated based on estimated
data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges
calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.2.6.3.2 Monthly Billing Demand. The Monthly
Billing Demand for each Month of the Year shall be equal to the average of the twenty (20) EMC Peak Hour Billing Demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during July and
August of such Year. The EMC Peak Hour Billing Demand for an Hour shall be equal to the integrated sixty (60) minute EMC Native Load demand (kW) for the Hour minus EMC’s Base Obligation (kW) for such Hour, but in no event shall the EMC
Peak Hour billing Demand for an Hour (or the Monthly Billing Demand) be less than zero. The Monthly Billing Demand initially shall be calculated based on estimated data, and shall be 
  

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 subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30
following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. An example showing the calculation of this billing demand is
shown in Attachment 7-7. 
 7.2.6.4. Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the
sum of the Monthly Fuel Charge and Monthly Variable O&M Charge for the Month. If the Duke Monthly Energy Charge is positive, EMC shall pay such amount to Duke. If the Duke Monthly Energy Charge is negative, Duke shall credit such amount to EMC.

 7.2.6.4.1 Monthly Fuel Charge. The Monthly Fuel Charge for a Month shall be equal to the sum of the Hourly Fuel Charges for the
Month. The Hourly Fuel Charge for an Hour shall be equal to the product (i) EMC’s Native Load demands during the Hour (kW) minus EMC’s Base Obligation for the Hour (kW) and (ii) the Fuel Rate for the Year ($/kWh). The Fuel Rate
for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Fuel Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The
true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. Duke
will keep EMC informed of the true-up subtotal on a semi-annual basis during a Year. 
 7.2.6.4.2 Monthly Variable O&M Charge.
The Monthly Variable O&M Charge for a Month shall be equal to the sum of the Hourly Variable O&M Charges for the Month. The Hourly Variable O&M Charge for an Hour shall be equal to the product of (i) EMC’s Native Load demands
during the Hour (kW) minus EMC’s Base Obligation for the Hour (kW), and (ii) the Variable O&M Rate for the Year ($/kWh). The Variable O&M Rate for each Year shall be calculated in accordance with the formula rate set forth in
Schedule 1. The Variable O&M Rate initially shall be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the
Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.3 Charges Commencing January 1, 2011. 
 7.3.1 General. For service provided commencing
January 1, 2011 through the termination of this Agreement, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.3.2 and the Duke Monthly Energy Charge set forth in Section 7.3.3. The charges set forth in this
Section 7.3 are in addition to the other charges set forth in other sections of this Agreement. 
 7.3.2 Monthly Demand Charge.
The Monthly Demand Charge for a Month shall be equal to the product of (i) the Monthly Billing Demand for the Month (kW) and (ii) the Monthly Demand Rate for the Year ($/kW-Month). 
  

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 7.3.2.1 Monthly Demand Rate. The Monthly Demand Rate for each Year shall be calculated in
accordance with the formula rate set forth in Schedule 1. The Monthly Demand Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC
no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.3.2.2 Monthly Billing Demand. The Monthly Billing Demand for each month of a Year shall be equal to the average of the twenty (20) EMC Peak
Hour Billing Demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the Annual Planning Period for such Year (as determined in Section 7.3.2.3). The EMC Peak Hour Billing Demand
for an Hour shall be equal to the integrated sixty (60) minute EMC Native Load demand (kW) for the Hour minus the Partial Requirements Resources (kW) for such Hour, but in no event shall the EMC Peak Hour Billing Demand (or the Monthly Billing
Demand) be less than zero. The Monthly Billing Demand shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30
following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. Examples showing the calculation of the Monthly Billing Demand
are shown in Attachment 7-8. 
 7.3.2.3 Determination of Annual Planning Period. If the then-effective Annual Planning
Period is the Summer Period, the Annual Planning Period for purposes of determining the Monthly Billing Demand for the Year under Section 7.3.2.2 shall be the Summer Period that occurs within such Year (for example, if the Annual Planning
Period in 2012 is the Summer Period, and the Summer Period is May - September, the Annual Planning Period for purposes of determining the Monthly Billing Demand for 2012 under Section 7.3.2.2 is May 2012 - September 2012). If the then-effective
Annual Planning Period is the Winter Period, the Annual Planning Period for purposes of determining the Monthly Billing Demand for the Year under Section 7.3.2.2 shall be the Winter Period that ends in such Year (for example, if the Annual
Planning Period in 2012 is the Winter Period, and the Winter Period is October - April, the Annual Planning Period for purposes of determining the Monthly Billing Demand for 2012 under Section 7.3.2.2 is October 2011 - April 2012). 

7.3.2.4 Annual Percentage. No later than June 30, 2012, and each June 30 thereafter during the Term, Duke shall calculate the Annual
Percentage for the immediately preceding Year using the formula set forth in Attachment 7-9, and shall provide such calculation to EMC, together with supporting information. The Annual Percentage may be a positive or negative value. In
the event that the Annual Percentage for such Year is greater than positive four percent (4%), the Monthly Demand Rate for such Year calculated pursuant to Section 7.3.2.1 shall be reduced by the percentage equal to the Demand Rate Adjustment
Percentage. This reduction shall only apply to the Year for which it is calculated. This reduction shall be reflected in the true-up provided to EMC pursuant to Section 7.3.2.1. In the event that the Annual Percentage for such Year is a
positive four percent (4%) or less, or is negative, there shall be no adjustments to the Monthly Demand Rate under this Section 7.3.2.4 for such Year. Illustrative examples showing the calculation of the Annual Percentage and Demand Rate
Adjustment Percentage and the resulting reduction, if any, to the Monthly Demand Rate are set forth in Attachment 7-10. 
  

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 7.3.3 Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the sum
of the Monthly Fuel Charge and Monthly Variable O&M Charge for the Month. 
 7.3.3.1 Monthly Fuel Charge. The Monthly Fuel Charge
for a Month shall be equal to the sum of the Hourly Fuel Charges for the Month. The Hourly Fuel Charge for an Hour shall be equal to the product (i) EMC’s Native Load demand during the Hour (kW) minus the sum of (a) EMC’s
Dispatched Baseload Resources for the Hour (kW) and (b) EMC’s Dispatched Combined Cycle Resources for the Hour for which EMC bears the Energy Cost pursuant to Section 4.3.3.1 (kW), and (ii) the Fuel Rate for the Year ($/kWh). The
Fuel Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Fuel Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available.
The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations.
Duke will keep EMC informed of the true-up subtotal on a semi-annual basis during a Year. 
 7.3.3.2 Monthly Variable O&M Charge.
The Monthly Variable O&M Charge for a Month shall be equal to the sum of the Hourly Variable O&M Charges for the Month. The Hourly Variable O&M Charge for an Hour shall be equal to the product of (i) EMC’s Native Load demands
during the Hour (kW) minus the sum of (a) EMC’s Dispatched Baseload Resources for the Hour (kW) and (b) EMC’s Dispatched Combined Cycle Resources for the Hour for which EMC bears the Energy Cost pursuant to Section 4.3.3.1
(kW) and (ii) the Variable O&M Rate for the Year ($/kWh). The Variable O&M Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Variable O&M Rate shall initially be
calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on
any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.4 Monthly Reserve Capacity Charges. In
the event that Duke provides Replacement Energy to EMC pursuant to Section 4.2.4 in an amount of five thousand (5,000) kW or greater during any Hour of a Year, EMC shall pay a Monthly Reserve Capacity Charge equal to the product of
(i) the Monthly Demand Rate as calculated in Section 7.3.2.1 and (ii) the amount (in kW) of reserves that would be required under Duke’s Generation Planning Practices for a generating resource of a size equivalent to the amount
of Replacement Energy provided to EMC (the “Reserve Capacity Amount”). This charge shall commence on the Day following the Day on which Duke provided Replacement Energy to EMC, and shall terminate on December 31 of that Year. For
example, if Duke provides a maximum amount of 100,000 kWh of Replacement Energy to EMC in any given Hour on July 15, 2007, and the reserves that would be required for a 100,000 kW generating resource under Duke’s Generation Planning
Practices is 17,000 kW, EMC shall be responsible for a Monthly Reserve Capacity Charge for 17,000 kW from July 16, 2007, through December 31, 2007, subject to increase as provided in the next sentence. In the event that Duke provides
Replacement Energy to EMC for any additional Hours during such Year, and the amount of Replacement Energy provided during any such Hours is greater than 
  

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 that previously provided during the Year, then the Reserve Capacity Amount shall be increased to reflect such greater
amount of Replacement Energy, effective the Day after the Replacement Energy is provided. In the event that Duke provides Replacement Energy to EMC in a subsequent Year, the foregoing provisions shall apply, and EMC shall pay Monthly Reserve
Capacity Charges with respect to such Replacement Energy as provided above. Notwithstanding anything in this Section 7.4 to the contrary, the Monthly Reserve Capacity Charges shall terminate no later than December 31, 2010. Any Monthly
Reserve Capacity Charge, or increase in such charge, that begins on a Day other than the first Day of the Month shall be adjusted pro rata for that Month to reflect the number of Days during the Month in which the charge or charge increase was in
effect. 
 7.4.1 Force Majeure Events. Notwithstanding the provisions of Section 7.4, in the event that Duke provides Replacement
Energy to EMC due to the occurrence of a force majeure event, EMC shall not incur a Monthly Reserve Capacity Charge due to Duke’s provision of Replacement Energy for the first twenty-four (24) Hours following such occurrence. For purposes
of this Section 7.4.1, the term “force majeure” means an event or circumstance that: (i) prevents the party claiming to be affected by it from performing its obligations in whole or in part; (ii) is not within the reasonable
control of the claiming party, or the result of the negligence of the claiming party, and (iii) by the exercise of due diligence, the claiming party is unable to overcome in a commercially reasonable manner, and, without limiting the scope of
the definition, includes acts of God, or the public enemy, or insurrection, riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court order or
governmental authority or arbitration award (so long as the claiming party has not sought or has opposed, to the extent reasonable, such actions or restraints). It is expressly acknowledged that transmission service interruptions or curtailments
imposed by a transmission provider in response to transmission capacity or availability shortages shall not be “force majeure” events or circumstances for purposes of this Section 7.4.1. 
 7.5 Payment. All charges or payments contemplated by this Article 7 shall be made in accordance with provisions of Article 13. 
 7.6 Determination of EMC Capacity and Energy Demands. For purposes of determining the electric capacity and energy charges under this Agreement, EMC’s Native
Load demands shall be as determined under the NOA (which demands shall include the adjustments under the NOA for losses between the point of delivery under the NITSA and the point of measurement, and the corrections under the NOA for any metering
failures or inaccuracies), and shall be increased by (1 / (1 - TLF ), in order to reflect such demands at the generation level (i.e., at the point at which power is available for transmission). Metered receipts used in billings and accounting
hereunder will in all cases include adjustments for such losses. TLF shall be equal to the transmission loss factor set forth in the Transmission Provider’s OATT, and shall be expressed as a decimal. For example, if the transmission loss factor
in the Transmission Provider’s OATT is three percent (3%), then ( 1 / (1 - TLF )) shall be equal to ( 1 / (1 -.03)), or ( 1 / .97 ). In the event that the NOA is terminated, or the electric capacity and energy demands measured under the NOA no
longer include an adjustment for losses between the point of delivery under the NITSA and the point of measurement or provisions for correcting such demands for metering failures or inaccuracies, then, for purposes of determining the capacity and
energy charges under this Agreement, EMC’s metered electric capacity and energy demands shall be adjusted for losses 
  

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 between the point of delivery under the NITSA and point of measurement and further increased by ( 1 / (1-TLF)), in
order to reflect such demands at the generation level (i.e., at the point at which power is available for transmission), and suitable arrangements shall be made by the Parties for correcting such demands due to metering failures or
inaccuracies. 
 Article 8 
 Scheduling Agent Services 
 8.1 Appointment of Duke as Scheduling Agent. EMC hereby appoints Duke as Scheduling Agent, effective on
the Effective Date (or such earlier date as is required so that Scheduling Agent may begin rendering Scheduling Agent Services by the Commencement Date), as agent for EMC for the Term, for the limited purposes set forth in this Agreement, with full
power and authority to render the Scheduling Agent Services, and Duke accepts such appointment. 
 8.1.1 Costs. The Parties
acknowledge and agree that all costs and expenses incurred by Duke to provide Scheduling Agent Services are included in the charges set forth in Article 7 and, except as provided for in Section 7.1.6, EMC shall not be charged any additional
rates, charges or fees in connection with Duke’s provision of Scheduling Agent Services. 
 8.2 Scheduling Policies. In providing Scheduling
Agent Services hereunder, Duke shall comply with (i) the NCEMC policies set forth in Attachment 8-1 (“NCEMC Policies”) and (ii) the Transmission Provider’s OATT. To avoid uncertainty, for purposes of Section 8 of
Attachment 8-1 (Part I of II), Piedmont’s “SEPA allocation” shall be zero. 
 8.3 Protocols. In advance of the Commencement
Date, and from time to time thereafter as the Operating Committee may determine appropriate, the Operating Committee shall meet and make reasonable efforts to establish written protocols and procedures to implement the Scheduling Agent Services
provided for hereunder, which shall be reviewed and agreed to by the Parties; provided however, that the Operating Committee’s failure to agree upon such protocols and procedures shall not affect in any way the Parties’ respective rights
and obligations under this Article 8. 
 8.4 Scheduling Agent Services (Commencement Date through December 31, 2010). Beginning on the
Commencement Date and continuing through December 31, 2010, Duke shall provide the following Scheduling Agent Services: 
 8.4.1 Duke
shall develop next-Day and multi-Day forecasts of EMC’s Native Load. 
 8.4.2 Duke shall provide NCEMC with seven-Day and next-Day
forecasts of EMC’s Native Load. 
 8.4.3 Duke shall receive each Day the Nominations from MSCG, and confirm such Nominations with MSCG
in writing, facsimile, e-mail, or any other agreed-upon form of communication. 
 8.4.4 Duke shall provide to NCEMC the Nominations that Duke
receives pursuant to Section 8.4.3. 
  

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 8.4.5 Duke shall provide operational forecasts of EMC Native Load as may be requested by the Transmission
Provider from time to time. 
 8.4.6 [intentionally omitted] 
 8.4.7 [intentionally imitted] 
 8.4.8 Duke shall receive any information or notices from NCEMC or MSCG
relating to any changes in the schedules of electric energy to be delivered to serve EMC’s Native Load. 
 8.4.9 Duke shall provide
daily and Monthly reconciliation and checkout services to EMC with respect to each of NCEMC, the Transmission Provider, and MSCG in connection with services provided by such entities to serve EMC’s Native Load. 
 8.4.10 Duke shall reasonably cooperate with EMC to enable EMC to address issues that may arise in connection with invoices or bills rendered to EMC by
the Transmission Provider in connection with the delivery of electric energy under the PPA, the WPSA, or EMC Contract Resources described in Sections 5.1.3, 5.1.4 and 5.1.5 to serve EMC’s Native Load. Such cooperation shall include providing
EMC with data, records, and other information available to Duke and related to the invoices or bills at issue. 
 8.4.11 If Duke has
information that MSCG was not informed of any transmission constraints or other impediments to deliveries under the PPA to the delivery points designated by MSCG, Duke shall, as promptly as reasonably practical, inform MSCG of any transmission
constraints or other impediments to deliveries under the PPA to the delivery points designated by MSCG. 
 8.4.12 Duke shall serve as
EMC’s Purchasing – Selling Entity. 
 8.4.13 Duke shall schedule to the Transmission Provider electric energy to be delivered from
the EMC Contract Resources described in Sections 5.1.3, 5.1.4 and 5.1.5. 
 8.5 Scheduling Agent Services (January 1, 2011 through Termination).
Beginning on January 1, 2011, and continuing through the date of termination of this Agreement, Duke shall provide the following Scheduling Agent Services: 
 8.5.1 Duke shall develop next-Day and multi-Day forecasts of EMC’s Native Load. 
 8.5.2 Duke shall
provide NCEMC with seven-Day and next-Day forecasts of EMC’s Native Load. 
 8.5.3 Duke shall provide to NCEMC with the daily schedule
of electric energy to be made available each Hour to serve EMC’s Native Load under the WPSA. 
 8.5.4 [intentionally omitted]

 8.5.5 [intentionally omitted] 
  

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 8.5.6 Duke shall provide operational forecasts of EMC Native Load as may be requested by the Transmission
Provider from time to time. 
 8.5.7 Duke shall receive any information or notices from NCEMC relating to any changes in the schedules of
electric energy to be delivered to serve EMC’s Native Load. 
 8.5.8 Duke shall provide daily and Monthly reconciliation and checkout
services to EMC with respect to NCEMC and the Transmission Provider in connection with services provided by those entities to serve EMC’s Native Load. 
 8.5.9 Duke shall reasonably cooperate with EMC to enable EMC to address issues that may arise in connection with invoices or bills rendered to EMC by the Transmission Provider in connection with the delivery of
electric energy under the WPSA or EMC Contract Resources described in Section 5.2 to serve EMC’s Native Load. Such cooperation shall include, but is not limited to, providing EMC with data, records and other information available to Duke
and related to the invoices or bills at issue. 
 8.5.10 Duke shall serve as EMC’s Purchasing – Selling Entity. 
 8.5.11 Duke shall schedule to the Transmission Provider electric energy to be delivered from the EMC Contract Resources described in Section 5.2.

 8.6 New EMC Resources. If EMC obtains one or more new EMC Contract Resources in accordance with the provisions of Article 5 of this Agreement, the
Parties shall negotiate appropriate revisions to this Agreement or the protocols and procedures developed under Section 8.3 as necessary for Duke to provide Scheduling Agent Services hereunder in connection with such new EMC Contract Resources;
provided however, the failure of the Parties to agree on revisions to this Agreement or the protocols and procedures developed under Section 8.3 shall not relieve Duke of its obligation to schedule such new EMC Contract Resources. 

8.7 Errors in Schedules. If Duke is notified by the Transmission Provider, NCEMC or a third party with respect to EMC Contract Resources described in Sections
5.1.3, 5.1.4, 5.1.5 or 5.2, that any schedule provided by Duke as Scheduling Agent has been rejected, Duke shall provide to the Transmission Provider, NCEMC or third party, as applicable, a substitute schedule for the Day in question taking into
account the information provided by the Transmission Provider, NCEMC or third party, as applicable, in connection with such rejection. 
 8.8 EMC
Responsibilities. In connection with Duke’s undertaking Scheduling Agent Services, EMC shall have the following obligations: 
 8.8.1
EMC shall provide Duke, as Scheduling Agent, with: (a) meter data such that Duke may calculate aggregate load in discrete locations or in aggregate load areas as determined by Transmission Provider; (b) five (5) years of the most
recent historical load data; and (c) the Power Requirements Study (or such successor document) that EMC submits annually to the RUS. 
 8.8.2 EMC shall make arrangements with NCEMC, the Transmission Provider, and any third party responsible for providing for deliveries of new EMC Resources as provided for in Section 8.6, as are necessary for those parties to
communicate with, and accept or receive schedules or other information submitted by or to Duke as Scheduling Agent. 
  

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 8.8.3 During the period from the Commencement Date through December 31, 2010, EMC shall direct MSCG
to communicate with, and provide Nominations to Duke as Scheduling Agent. 
 8.8.4 EMC shall reasonably cooperate with Duke as necessary for
Duke to assist EMC in addressing issues that may arise in connection with invoices or bills rendered to EMC by the Transmission Provider, as provided for in Sections 8.4.10 and 8.5.9. 
 8.9 Duke’s Liability. Duke shall be liable for any damages arising from Duke’s unexcused failure to comply with the provisions of this Article 8.

 8.10 Termination Assistance Service. Commencing six (6) Months prior to the scheduled termination of this Agreement and continuing through the
termination date of this Agreement (the “Termination Assistance Period”), Duke shall provide to EMC, or at EMC’s request to EMC’s designee, such reasonable cooperation, assistance and service to cause the orderly and timely
transition and migration of Scheduling Agent Services provided under this Agreement to EMC’s new energy supplier and/or scheduling agent without interruption or adverse effect (“Termination Assistance Service”). EMC may shorten or
terminate the Termination Assistance Period by providing written notice to Duke. 
 Article 9 
 Transmission and Ancillary Services 
 9.1 Delivery
Obligations. Duke shall be responsible for making all arrangements necessary and paying for all costs incurred under contractual arrangements necessary to deliver the electric energy provided hereunder to the Delivery Points. EMC shall be
responsible for making and paying for all contractual arrangements necessary for the delivery of the electric energy provided hereunder from the Delivery Points. 
 9.2 Transmission Arrangements. This Agreement does not obligate Duke to provide any Transmission Service or Ancillary Services, and does not confer upon EMC any rights to service over the Transmission System. EMC shall be responsible
for making separate contractual arrangements with the Transmission Provider for all Transmission Service and Ancillary Services to be provided to EMC. 
 9.3
Ancillary Services. Duke shall make Commercially Reasonable Efforts to assist in any effort by EMC to have the Transmission Provider recognize that the electric capacity and energy provided hereunder satisfies one or more of such Transmission
Provider’s Ancillary Services requirements; provided, however, that nothing in this Section 9.3 shall in any way obligate Duke to provide, make arrangements for, or pay for any Ancillary Services except as expressly provided for in
Section 9.3.1. 
 9.3.1 Energy Imbalance Responsibility. Duke shall reimburse EMC in accordance with the provisions of Article 13
for any Hour in which, as a result of Duke’s unexcused failure to 
  

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 comply with the provisions of Article 8, Energy Imbalance Service charges are incurred by EMC in accordance with the
Transmission Provider’s OATT. EMC shall reimburse Duke in accordance with the provisions of Article 13 for any Hour in which, as a result of Duke’s unexcused failure to comply with the provisions of Article 8, Energy Imbalance Service
compensation is provided to EMC in accordance with the Transmission Provider’s OATT. 
 9.4 Regional Transmission Organization. If an ISO, RTO,
ITC or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider, then Duke and EMC will reasonably cooperate to make or enter into arrangements with such entity to assist such entity with
the implementation of this Agreement. It is expressly understood that neither the implementation of an ISO, RTO, ITC or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider nor the
failure of the Parties to enter into the arrangements contemplated under this Section 9.4 shall relieve either Party of any obligations under this Agreement. 
 9.4.1 Cost Responsibility. Except as provided in Section 9.3.1, it is expressly understood that nothing herein shall be construed to in any way relieve EMC of, or impose upon Duke, the responsibility for
any fees, costs, or charges (including but not limited to congestion costs, transmission losses, or the costs or charges to secure financial transmission rights or the equivalent thereof) that may be imposed on EMC by an ISO, RTO, ITC or other
future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider in connection with the provision of Transmission Service or Ancillary Services. It is further expressly understood that Duke shall have no
right or interest in any financial transmission rights or the equivalent thereof that are allocated, assigned, transferred or acquired by EMC. 
 9.4.2 Congestion Costs. In the event that the Transmission Provider implements a pricing methodology that allocates congestion costs on a locational basis, in determining the dispatch order of Duke’s Generation System, Duke
shall make no adverse distinction between Duke’s Native Load and Duke’s obligations to supply FFR Supplemental Service or Partial Requirements Service, as applicable under this Agreement. Duke further agrees that, in the event it
designates Delivery Points for Duke’s Generation System, Duke shall make no adverse distinction between Duke’s Native Load and Duke’s obligations to supply FFR Supplemental Service or Partial Requirements Service, as applicable under
this Agreement. The Parties shall reasonably cooperate with each other in an effort to develop and implement congestion management strategies designed to minimize the incurrence of congestions costs associated with the delivery of electric energy
under this Agreement. Duke will provide EMC with recommended strategies to manage such congestion costs, under terms that would not subject Duke’s Native Load to any costs that Duke would not otherwise incur, and if EMC agrees with such
recommendation, Duke will use Commercially Reasonable Efforts to implement the recommended congestion management strategies. Duke shall also use Commercially Reasonable Efforts to comply with the congestion management rules that may be adopted by
the Transmission Provider. 
  

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 Article 10 
 Operating Committee 
 10.1 Operating Committee. The Parties shall establish an Operating Committee consisting
of one (1) Representative each. The Operating Committee shall act only by unanimous agreement or consent. Duke and EMC shall designate their respective Representatives to the Operating Committee, plus any alternate, by written notice delivered
in accordance with Section 16.22 within thirty (30) Days after the Effective Date. Each Party’s Representative on the Operating Committee is authorized to act on behalf of such Party with respect to any matter arising under this
Agreement. 
 10.2 Duties of the Operating Committee. The Operating Committee shall facilitate the coordination and interaction between the Parties
with respect to the performance of the duties and obligations imposed on the Parties hereunder, including development or revision of appropriate protocols and procedures therefor. The Operating Committee shall not, however, have any authority to
modify or otherwise alter the Parties’ rights and obligations under this Agreement. 
 Article 11 
 Demand Side Management 
 11.1 Availability of
Demand Side Management Resource Programs. EMC may make available to EMC’s Native Load customers EMC Demand Side Management Resource Programs to the same extent and under comparable terms and conditions as Duke’s Demand Side Management
Resource Programs; provided, however, that EMC may not make available to EMC’s Native Load customers any demand side management resource programs or similar programs other than such EMC Demand Side Management Resource Programs unless EMC is
otherwise required by RUS or by applicable Law to make other demand management side resource programs available to EMC’s Native Load customers or is otherwise permitted under Section 11.7. Except as set forth in Section 4.2.6, the
terms and conditions of EMC Demand Side Management Resource Programs shall be applied to EMC’s Native Load customers and enforced by Duke in the same or comparable manner as they are applied to Duke’s Native Load retail customers and
enforced by Duke. Except as set forth in Section 4.2.6, in implementing and operating such EMC Demand Side Management Resource Programs, Duke shall make no adverse distinction with respect to EMC’s Native Load. 
 11.2 Changes to Demand Side Management Resource Programs. Upon ninety (90) Days prior written notice, Duke shall advise EMC of any modifications, additions,
or deletions that have been or will be made to the Demand Side Management Resource Programs, and the EMC Demand Side Management Resource Programs available hereunder to EMC’s Native Load customers shall be deemed to have been revised to reflect
such modifications, additions, or deletions without any further action required by either Party. 
 11.3 Credits. Except for any EMC Demand Side
Management Resource Program implemented pursuant to Section 11.7 of this Agreement, for each EMC Native Load customer 
  

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 that implements an EMC Demand Side Management Resource Program, EMC shall be entitled to a billing credit. Such billing
credit shall be calculated in accordance with the credit applicable for the Demand Side Management Resource Program, as specified in the rider approved and on file with NCUC for such Demand Side Management Resource Program. Each Month, Duke shall
aggregate the total billing credits to which EMC is entitled pursuant to this Section 11.3, and provide EMC a credit on the Monthly statement delivered in accordance with Section 13.2 equal to the total billing credits for such Month.

 11.4 Necessary Arrangements. To the extent that an EMC Native Load customer agrees to implement an EMC Demand Side Management Resource Program, the
Parties shall cooperate in preparing any detailed implementation procedures and arrangements required to implement such program, provided that, except for any EMC Demand Side Management Resource Program implemented pursuant to Section 11.7 of
this Agreement, Duke shall retain sole operational control over such EMC Demand Side Management Resource Program implemented. The failure of the Parties to agree on detailed implementation procedures and obligations shall not affect Duke’s
obligation to provide EMC with credits as determined by Section 11.3. 
 11.4.1 Audits. For each EMC Demand Side Management
Resource Program whose credit depends upon the number of EMC Native Load customers, EMC shall be required to provide Duke written notice, by no later than January 31 of each Year, of the number of EMC Native Load customers with whom EMC has
entered into arrangements pursuant to this Section 11.4 for such EMC Demand Side Management Resource Program. Duke shall have the right periodically to perform audits, in accordance with the terms of Section 13.6, to verify the accuracy of
the notices concerning the number of EMC Native Load customers with whom EMC has entered into arrangements for each EMC Demand Side Management Resource Program. Based on the results of such audits, Duke shall be entitled, in accordance with the
terms of Section 13.2.2, to revise or adjust the level of credits that Duke previously had provided EMC. 
 11.5 Start-Up Conditions. No later
than sixty (60) Days after the Effective Date, Duke shall conduct a system-wide test of each EMC Demand Side Management Resource Program to determine its capability. Duke shall provide EMC with the results of such test no later than five
(5) Business Days after the completion of the system-wide test. Duke shall not be required to provide credits for EMC Demand Side Management Resource Programs unless the applicable standards and requirements specified for Duke’s Demand
Side Resource Management Programs under the riders approved and on file with the NCUC shall have been met, and the testing provided for in this Section 11.5 shall have been accomplished. 
 11.6 Periodic Testing. Duke shall have the right periodically, but no less than once per Year, to conduct a system-wide test of each EMC Demand Side Management
Resource Program to determine whether the tested EMC Demand Side Management Resource Program is capable of providing a level of demand reduction equal to the level of the credit that EMC is, at the time of such system-wide test, receiving for such
EMC Demand Side Management Resource Program. Subject to Section 11.6.1, if, at the time of such system-wide test, one or more EMC Demand Side Management Resource Program(s) do not provide the level of demand reduction equal to the level of the
credit that EMC is receiving for such EMC Demand Side Management Resource Program(s), Duke shall have the right to (i) reduce the credit provided to EMC to the actual level of demand reduction provided at the time of the system-wide test and,
in accordance with the 
  

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 terms of Section 13.2.2, to revise or adjust the level of credits that Duke previously had provided EMC, and
(ii) provide written notice within ninety (90) Days of the system-wide test, to cancel such EMC Demand Side Management Resource Program(s). 
 11.6.1 Retesting. Within sixty (60) Days of any failure of a system-wide test for an EMC Demand Side Management Resource Program, EMC shall have the right to have Duke conduct a retest in order to
demonstrate that such EMC Demand Side Management Resource Program is capable of providing the level of demand reduction equal to the level of the credit that EMC previously was receiving for such EMC Demand Side Management Resource Program. To the
extent that any such system-wide retest demonstrates that the EMC Demand Side Management Resource Program is capable of providing demand reduction, the credit provided to EMC shall be restored to the prior level or such lesser level as demonstrated
by the result of such rescheduled test and, to the extent applicable, Duke shall, in accordance with the terms of Section 13.2.2, revise or adjust the level of credits that Duke previously had provided EMC and any notice to terminate rendered
by Duke pursuant to 11.6 shall be null and void. 
 11.7 EMC Demand Side Management. If Duke’s Annual Planning Period shifts from the Summer
Period to the Winter Period, then EMC shall have the authority to implement and call upon EMC Demand Side Management Resource Programs to control EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated
sixty-minute) Duke Schedule 1 Demands during the Winter Period to the level equal to but not below the average of (i) the average of EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute)
Duke Schedule 1 Demands during the immediately preceding Summer Period and (ii) the average of EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the
second preceding Summer Period. For example, if (i) the Annual Planning Period during May 2012 - April 2013 is the Summer Period (May 2012 - September 2012), and the average of EMC’s integrated sixty (60) minute EMC Native Load
demands coincident with the twenty (20) highest Hourly Duke Schedule 1 Demands during such period is 100 MWs; and (ii) the Annual Planning Period during May 2013 - April 2014 is the Winter Period (October 2013 - April 2014), and the
average of EMC’s integrated sixty (60) minute EMC Native Load demands coincident with the twenty (20) highest Hourly Duke Schedule 1 Demands during the Summer Period immediately preceding such Winter Period (i.e., May 2013 - September
2013) is 102 MWs; then EMC may call upon EMC Demand Side Management Resource Programs to control EMC’s integrated sixty (60) minute EMC Native Loads demands coincident with the twenty (20) highest Hourly Duke Schedule 1 Demands
during October 2013 - April 2014 to the level equal to but not below 101 MWs. It is expressly acknowledged that (a) Duke shall also have the right to call upon any available EMC Demand Side Management Resource Program implemented pursuant to
this Section 11.7, and (b) EMC shall not be entitled to a billing credit under Section 11.3 (or any other provision of this Agreement) in connection with any EMC Demand Side Management Resource Program implemented pursuant to this
Section 11.7. 
  

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 Article 12 
 Modification of This Agreement 
 12.1 Unilateral Modification. Except as provided in Section 12.3:

 No unilateral modification, amendment or other change to the terms of this Agreement shall be permitted or deemed effective for any reason,
and the rates, terms and conditions specified herein shall not be subject to change through application to FERC pursuant to the provisions of Sections 205 or 206 of the Federal Power Act absent the written agreement of both Parties. Any
amendment or modification to this Agreement shall be deemed enforceable if and only if such amendment or modification (a) has been reduced to writing, (b) has been agreed to and duly executed by both Parties in writing, and (c) has
received all requisite approvals of Governmental Authorities necessary for the effectiveness thereof. Each Party hereby irrevocably waives its rights, including any rights under Sections 205 and/or 206 of the Federal Power Act, to file a
complaint, request an investigation, or make any unilateral rate-change request seeking: (a) an order from FERC finding that any rate or provision in this Agreement is unjust or unreasonable; (b) any refund with respect to this
Agreement’s rates; or (c) any other unilateral modification to this Agreement. Each Party agrees not to make any such unilateral filing or request, and agrees and warrants that these covenants and waivers shall be binding notwithstanding
any regulatory, market, or other change that may occur at any time during the Term. 
 12.2 Mobile-Sierra Public Interest Standard. Except as
provided in Section 12.3, to the extent this Agreement is challenged by any person or its terms are subjected to review under the Federal Power Act or other Laws, the “just and reasonable” standard shall not apply. Instead, absent the
agreement of both Parties to the proposed change, and except as provided in Section 12.3, the standard of review for changes to this Agreement proposed by a Party, a non-party, or FERC acting sua sponte shall be the “public
interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956); Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). 
 12.3 Changes To Certain Charge Components. Notwithstanding anything else herein to the contrary, nothing contained herein shall be construed as affecting in any
way the right of either Party to unilaterally make application to FERC under Sections 205 or 206 of the Federal Power Act (i) to change the depreciation rates and nuclear decommissioning accrual used in Schedule 1, (ii) to
include additional cost items that are incurred in providing FFR Supplemental Service or Partial Requirements Service, as applicable, to EMC that are not included in Schedule 1, (iii) to exclude from Schedule 1 cost items
that are no longer incurred in providing FFR Supplemental Service or Partial Requirements Service, as applicable to EMC, or (iv) to change Schedule 1 to reflect changes in Duke’s accounting consistent with the Accounting
Requirements (including the addition of new accounts and the removal of obsolete accounts). In addition, in the event that (a) EMC implements new time-of-use rates or materially modifies its existing time-of-use rates, for some or all of
EMC’s Native Load customers, (b) such rates result in a reduction of EMC’s Monthly Billing Demand under Sections 7.2.6.3.2 or 7.3.2.2, and (c) such Monthly Billing Demand reduction does not result in a commensurate reduction
in the EMC demands that Duke utilizes in Duke’s Generation Planning Practices, Duke may make unilateral application to 
  

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 FERC under Section 205 of the Federal Power Act to change the calculation of the Monthly Billing Demand set forth in
Sections 7.2.6.3.2 or 7.3.2.2 to more appropriately reflect the costs that Duke incurs in providing service under this Agreement. In the event that Duke makes such a filing with FERC, EMC may oppose such filing, and, in addition, shall be free
to propose any other method for calculating the Monthly Billing Demands set forth in Sections 7.2.6.3.2 or 7.3.2.2 to more appropriately reflect the costs that Duke incurs in providing service under this Agreement. 
 12.4 Standard of Review for Permitted Changes. The Parties acknowledge that, as of the Effective Date, FERC has issued a proposed rule that, if adopted, would
specify the language for parties to include in future agreements where the parties intend that the “just and reasonable” standard of review apply to amendments to the agreements. Notwithstanding the language that ultimately may be adopted
by FERC, it is the intent of the Parties that the standard of review that FERC shall apply when acting on proposed modifications to this Agreement that are permitted under Section 12.3, either on FERC’s own motion or on behalf of a
signatory or non-signatory, shall be the “just and reasonable” standard of review rather than the “public interest” standard of review. 
 12.5 Scope of Waiver. Nothing in this Article 12 shall be construed to modify or limit any Party’s right to enforce the express terms of this Agreement as they are written in this Agreement. 
 Article 13 
 Billing and
Payment 
 13.1 Billing Period. Unless otherwise specifically agreed upon by the Parties in the terms of this Agreement or otherwise in writing,
the Month shall be the standard period for determining all billings and payments under this Agreement. 
 13.2 Billing Statements. 
 13.2.1 Initial Statements. After the end of each Billing Period, Duke shall deliver to EMC a statement setting forth for the Billing Period
(i) the sum of the electric energy delivered and/or received for all Hours during that Billing Period, and (ii) Duke’s calculation of any amounts due from EMC under this Agreement for the Billing Period. In addition, in the event that
there are amounts due from Duke to EMC under this Agreement for a Billing Period, EMC shall deliver to Duke, after the end of such Billing Period, a statement setting forth for the Billing Period EMC’s calculation of any amounts due from Duke
under this Agreement for the Billing Period. Notwithstanding the foregoing, a Party’s failure to render a statement as set forth above shall not relieve the other Party from its obligation to make payment to the billing Party when such
statement is rendered, provided such statement is rendered within one (1) year after the end of the Billing Period. 
 13.2.2
Subsequent Payment Adjustments. The Parties understand that in certain cases Monthly billings will need to be made on an estimated basis. In addition, the Parties understand that after-the-fact adjustments to amounts owed or revenues received
may be made in order to 
  

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 reflect correctly the amounts payable by one Party to the other under this Agreement. Each Party shall cooperate in good
faith with the other Party to obtain the requisite information and perform the necessary computations so as to true-up or otherwise adjust any estimated or adjusted billings promptly. 
 13.3 Timeliness of Payment. Unless otherwise agreed by the Parties, all statements rendered under this Agreement, whether by Duke or EMC, shall be due and payable in accordance with each Party’s statement
instructions on or before the later of the twentieth (20th) Day of each Month, or the tenth (10th) Day after receipt of the statement or; if such Day is not a Business Day, then on the next Business Day. Each Party
shall make payments in immediately available funds by electronic funds transfer, or by other mutually agreeable method, to the account designated in writing by the other Party. Any non-disputed amounts (other than amounts for which payment may be
withheld pursuant to Section 13.5) not paid by the due date shall be deemed delinquent and shall accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent
amount is paid in full. 
 13.4 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and
owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party under this Agreement during the Billing Period, including any related interest, payments, and credits, shall be netted so that only
the excess amount remaining shall be paid by the Party who owes it. If no mutual debts or payment obligations exist and only one Party owes a debt or obligation to the other Party during the Monthly Billing Period, including but not limited to any
interest, payments, or credits, that Party shall pay such sum in full when due. 
 13.5 Disputes and Adjustments of Statements. A Party may, in good
faith, dispute the correctness of any statement or any adjustment to a statement, rendered under this Agreement or adjust any statement for any arithmetic or computational error within twenty-four (24) Months of the date the statement, or
adjustment to a statement, was rendered. If a statement or portion thereof, or any other claim or adjustment arising under this Agreement is disputed, the disputing Party shall provide written notice to the other Party (the “Billing Dispute
Notice”) which (a) states the good faith basis for the dispute, (b) specifies the amount in dispute (the “Disputed Amount”), if any, and (c) provides documentation reasonably supporting the determination of the Disputed
Amount. The disputing Party shall, at its option, (a) make payment to the other Party of the Disputed Amount under protest and thereafter shall be reimbursed by the other Party for any amount determined to be refundable after the resolution of
such dispute or (b) withhold one half (1/2) of the Disputed Amount and make payment to the other Party of the other one half (1/2) of the Disputed Amount. Payment to the other Party of one half (1/2) of the Disputed Amount shall
not relieve the disputing Party of the obligation to pay interest accrued at the Interest Rate from and including the date such payment was due to but excluding the date of such payment of any portion of such Disputed Amount withheld and determined
to be due and payable after the resolution of such dispute. Likewise, the other Party shall not be relieved of the obligation to pay interest accrued at the Interest Rate from and including the date such payment was made to but excluding the date of
reimbursement of any portion of such Disputed Amount paid and determined to be refundable after the resolution of such dispute. 
  

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 In the event that a Party, by timely notice to the other Party, disputes the correctness of a statement
or portion thereof or any other claim or adjustment arising under this Agreement, the other Party shall promptly review the disputed statement or adjustment and shall notify the disputing Party, within forty-five (45) Days following receipt of
the Billing Dispute Notice, of the amount of any error or the amount of any payment or reimbursement that the disputing Party is required to make or is entitled to receive. Payments determined to be due by the disputing Party shall be included on
the next Monthly statement, and shall include interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Reimbursements determined to be due from the other Party shall be included on the next Monthly
statement, and shall include interest accrued at the Interest Rate from and including the due date to but excluding the date reimbursed. If the disputing Party disagrees with the other Party’s resolution of any dispute, then the Parties shall
submit the dispute for resolution in accordance with Article 14. 
 Inadvertent overpayments shall be returned upon request or deducted
by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such overpayment. Any
dispute with respect to a statement is waived unless the other Party is notified in accordance with this Section 13.5 within twenty-four (24) Months after the statement is rendered or any adjustment to the statement is made. Neither Party
shall have the right to challenge any statement, to invoke arbitration of the same or to bring any court or administrative action of any kind questioning the propriety or any other aspect of such statement after a period of twenty-four
(24) Months from the date the statement was rendered; provided, however, that in the case of a statement containing estimates, such twenty-four (24) Month period shall run from the date the statement is adjusted to reflect the actual
amounts due. 
 13.6 Records and Audits. Each Party shall keep such records and documents as may be needed to afford a clear and complete history of
all transactions under this Agreement, and the cost information used to calculate the charges for such transactions, for twenty-four (24) Months following the Month in which such transaction occurs. In addition, during such twenty-four
(24) Month period, EMC shall have the right to audit all records, including phone and computer records, related to Duke’s performance of its obligation not to adversely distinguish against EMC’s Native Load under Section 4.3.3,
Section 6.2, and Section 9.4.2 of this Agreement. If a Party initiates an audit through a notice to the other Party within the time period provided herein, the records and documents related to such audit are required to be maintained under
this Section 13.6, then the other Party will retain such records and documents until such audit is complete. If a Party issues an Original Notice pursuant to Article 14, then the Parties will retain the records and documents relating to such
dispute until the resolution of such dispute. In maintaining such records and documents, EMC and Duke may rely upon the logs and other meter information routinely recorded by Transmission Providers or utilities responsible for coordination of the
purchases and sales. During such twenty-four (24) Month period, either Party, or any Representatives of such Party, shall have the right, at its sole expense and during normal working Hours, to examine the records of the other Party, including
documents and records held by third parties, to the extent reasonably necessary to verify the accuracy of any statement, charge, or computation made pursuant to this Agreement. The Party requesting the audit shall pay the costs associated with any
independent auditor. Upon the request of the auditing Party, the document custodian of the other Party shall certify to the auditing Party that, 
  

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 to the best of such person’s knowledge after reasonable investigation, the documents and records supplied are true
and complete and, in the case of copies, are true, complete and correct copies of the original documents requested by the auditing Party. 
 13.6.1 Procedures. EMC may make a written request for Duke to provide access to documents and records to verify the accuracy of any statement, charge or computation made pursuant to this Agreement. Within ten (10) Business Days
of the receipt of a written request from EMC, Duke shall either provide EMC, or its Representative, with access to the documents and records which are the subject of the written request or provide EMC with copies of the original documents and
records. If Duke elects to provide EMC, or its Representative, with access to the documents and records requested by EMC, EMC or its Representative shall be permitted to make, at its own expense, copies of the documents and records to which it or
its Representative has been provided access. Any copies made by EMC or its Representative shall be subject to the confidentiality provisions set forth in Section 16.6. If Duke is unable to provide EMC with access or copies within ten
(10) Business Days of the receipt of EMC’s written request because it is unable to locate or gain access to such documents and records after reasonable investigation, Duke shall, within ten (10) Business Days of the receipt of such
written request, provide EMC with notice describing the reasons for its failure to provide access to or copies of the documents and records, its efforts to obtain such documents and records, and its best estimate of the time in which EMC will be
permitted access to or provided copies of such documents and records. The twenty-four (24) Month period provided for in Section 13.5 shall be tolled from the date Duke gives notice describing the reasons for its failure to provide access
to or copies of the documents and records until Duke shall have (i) provided EMC with copies or access to all documents and records specified in EMC’s written request or (ii) Duke’s document custodian shall have certified, that
to the best of his knowledge after reasonable investigation that such document does not exist or Duke cannot locate or produce such document or records. 
 13.6.2 Adjustments Resulting from Audits. If any audit or examination under this Section 13.6 reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof
shall be made promptly and shall accrue interest at the Interest Rate from the date the overpayment or underpayment was made until paid; provided, however, that no adjustment for any statement or payment shall be made unless objection to the
accuracy thereof was made prior to the lapse of twenty-four (24) Months from the rendition thereof, and thereafter any objection shall be deemed waived. 
 13.6.3 Confidentiality. The auditing Party shall keep confidential any information obtained in the audit. If requested, a Party shall provide to the other Party statements evidencing the quantity of electric
energy provided under this Agreement for up to the prior twenty-four (24) Months. If an audit is requested with respect to any records held by the a Party or a third party and those records cannot be disclosed to the requesting Party as a
result of a confidentiality obligation, then to the extent legally permissible, the auditing Party shall select an independent auditor to perform the audit consistent with the Parties’ rights under this Agreement and with such confidentiality
arrangements as may be required by the confidentiality obligation in question. 
  

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 Article 14 
 Dispute Resolution 
 14.1 Arbitration. Except as otherwise provided below, any dispute arising out of or in
connection with this Agreement or its performance that cannot be resolved after good faith discussions and negotiations between the Parties as set forth in Section 14.2 shall be submitted to binding arbitration. A dispute with respect to
whether a Material Adverse Ruling meets the materiality standard specified in Section 2.3.2.2(c)(1) or (c)(2) shall be subject to dispute resolution pursuant to Section 2.3.2.2.2. A dispute with respect to an invoice shall first be subject
to the procedures set forth in Section 13.5, and if such dispute is not resolved in accordance with such procedures, then such dispute shall be submitted to binding arbitration in accordance with this Article 14. Any arbitration commenced
under this Article 14 shall be conducted in accordance with the North Carolina Arbitration Act, N.C.G.S. Section 1-567 et seq., and the non-administered arbitration rules and procedures of the CPR Institute for Dispute Resolution
(“CPR”) in effect at the time arbitration is commenced, except where specifically modified by this Agreement. 
 14.2 Negotiation and Notice of
Arbitration. Prior to initiating arbitration hereunder, a Party shall provide the other Party with written notice of the dispute, a proposed means for resolving the same, and support for the Party’s position (“Original Notice”).
Thereafter, Representatives of the Parties shall meet in person to discuss the matter and attempt in good faith to reach a negotiated resolution of the dispute. The Parties agree to provide and exchange supporting facts, records and information
regarding the dispute (including calculation and bases) as part of the good faith negotiations. If the Parties have not agreed upon a resolution of the dispute within thirty (30) Days after the provision of the Original Notice or such other
time period as the Parties may agree in writing to allow for discussions and negotiation (“Negotiation Period”), then at any time after the end of the Negotiation Period, a Party may provide written notice to the other declaring an impasse
(“Impasse Notice”) and initiating binding arbitration in accordance with the further provisions of this Article 14. A Party providing an Impasse Notice shall also contemporaneously notify all entities within the EMC Group of the
provision of its Impasse Notice. 
 14.3 Individual, Joint or Consolidated Arbitration. If, within thirty (30) Business Days of EMC’s
provision of an Impasse Notice, Blue Ridge and/or Rutherford also provides an Impasse Notice relating to substantially the same issue as raised by EMC’s Impasse Notice, or if Duke contemporaneously provides each of EMC, Blue Ridge and/or
Rutherford an Impasse Notice relating to substantially the same issue, then each entity within the EMC Group shall have ten (10) Business Days following the expiration of such thirty (30) Business Day period to provide written notification
to Duke stating whether or not such entity will voluntarily proceed in a joint or combined arbitration. 
 If EMC and one or more of the
entities within the EMC Group that have provided or received Impasse Notices within the specified time period relating to substantially the same issue elect to proceed individually or in more than one arbitration proceeding, Duke shall have the
right to file a motion to consolidate such Impasse Notices with EMC’s Impasse Notice in a single proceeding. The motion to consolidate such Impasse Notices shall be served within ten (10)
  

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 Business Days of the date when each entity within the EMC Group has provided notice as to whether or not it will
voluntarily proceed in a consolidated arbitration. Duke’s motion to consolidate shall be decided in the first commenced arbitration by one arbitrator (if the Streamlined Arbitration Process is used) or one (1) arbitration panel (if the
Standard Arbitration Process is used), provided that the arbitrator(s) shall satisfy the qualifications required pursuant to the third sentence of Section 14.6.1(1) or Section 14.6.2(2), as applicable, with respect to all entities in the
arbitration proceedings that are the subject of the motion to consolidate. If Impasse Notices are simultaneously given by EMC and one or more other entities within the EMC Group, then Duke shall have sole discretion to designate which of the Impasse
Notices shall be treated as the first given for purposes of determining which arbitrator(s) shall decide the motion to consolidate, and shall provide written notice of such designation in the motion to consolidate arbitrations. The procedures set
forth in Sections 14.6.1 and 14.6.2 for each arbitration proceeding in which the motion to consolidate was not filed shall be held in abeyance pending the decision on the motion to consolidate by the arbitrator(s) in the arbitration proceeding in
which the motion to consolidate was filed. 
 In determining whether consolidation of one or all is appropriate, the arbitrator(s) shall
consider whether the same or substantially similar issue or issues will be subject to the arbitration(s); EMC’s reasons for opposing consolidation and Duke’s reasons for seeking consolidation; and the fundamental fairness and efficiency in
proceeding individually, jointly or consolidated. The arbitrator(s) decision on the motion to consolidate shall be binding on the Parties and not subject to appeal. 
 In the event the motion to consolidate is denied (unless otherwise agreed by the Parties and the other entities of the EMC Group that have provided or received such Impasse Notices), the arbitrations shall each
proceed, subject to resolution of scheduling issues, with no arbitration being stayed as a result of the denial of the motion. In the event the motion to consolidate is granted, each entity within the EMC Group, other than the entity which is a
party to the proceeding in which the motion to consolidate was filed, shall move for dismissal of the respective arbitration actions in which it is a party. 
 14.3.1 Individual Treatment of EMC in Joint or Consolidated Arbitration. For purposes of joint or combined arbitration, all of the entities within the EMC Group participating in the proceeding shall be treated
as one (1) Party for purposes of Article 14, with the following exceptions. First, EMC shall be treated as a separate Party for purposes of Selection of Arbitration Process set forth in Section 14.4. Second, EMC may reach its own
independent, voluntary resolution with Duke and may pursue its own strategy and prosecute its case with its own legal counsel in the joint or combined arbitration. Third, EMC will be treated as a separate Party for purposes of discovery in
Section 14.6.1(4) or 14.6.2(4). Fourth, EMC will be treated as a separate Party for purposes of a Submission and for the adoption of the resolution and the associated monetary amount with respect to the ultimate decision of the arbitrator(s).
Fifth, EMC will be treated as a separate Party for purposes of the third sentence of Section 14.6.1(1) and Section 14.6.2(2). 
 14.4 Selection
of Arbitration Process. No later than thirty (30) Days following receipt of the Impasse Notice, or any longer time period as agreed to by the Parties, the Parties shall agree on which arbitration process specified herein to use: either the
Standard Arbitration Process or the 
  

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 Streamlined Arbitration Process. Should the Parties fail to agree on the arbitration process within thirty (30) Days
following receipt of the Impasse Notice, then the Standard Arbitration Process shall be used; provided however, that the Streamlined Arbitration Process shall be used for any dispute where the damages in dispute or other monetary value at stake is
alleged to be two hundred fifty thousand dollars ($250,000) or less for EMC or Duke, or in a joint or combined proceeding two hundred and fifty thousand dollars ($250,000) or less for each entity within the EMC Group that is participating in the
proceeding. If the damages in dispute or other monetary value at stake in a combined proceeding is alleged to be two hundred fifty thousand dollars ($250,000) or less for EMC and at least one (1) other of the entities within the EMC Group
participating in a joint or combined proceeding, the Streamlined Arbitration Process shall be used upon the request of either Party (or any of the other entities within the EMC Group participating in the proceeding) made within thirty (30) Days
following the receipt of the Impasse Notices. 
 14.5 Initiation of Arbitration. Unless otherwise agreed by the Parties and except as provided for in
Section 14.3, arbitration shall be deemed to be initiated when the arbitration process is agreed upon or otherwise determined pursuant to Section 14.4 (“Selection Date”). 
 14.6 Arbitration Processes. 
 14.6.1 Standard
Arbitration Process. The following shall be the process that is used, in accordance with this Article 14, as the Standard Arbitration Process under this Agreement. By mutual agreement, the Parties may in any given arbitration and for the
purposes of that arbitration alone modify or forego any procedural requirement or rule specified hereunder as part of the Standard Arbitration Process: 
 (1) Selection of Arbitrators. The Party initiating arbitration shall nominate one (1) arbitrator no later than fifteen (15) Days following the Selection Date. The other Party shall nominate one
(1) arbitrator no later than thirty (30) Days after the Selection Date. Each of the two Party-nominated arbitrators shall be unaffiliated with any of the Parties or their predecessors or Affiliates; shall not be current or former employees
of the nominating Party or its predecessors or Affiliates and shall be without material financial alliance with the nominating Party or its predecessors or Affiliates such that said arbitrator is able to participate in the arbitration without
evident partiality or actual bias in favor of the nominating Party; unless such pecuniary interest or affiliation is expressly acknowledged and waived by all Parties. The two (2) arbitrators shall jointly appoint a third (3rd), neutral arbitrator within thirty (30) Days after the
nomination of the second (2nd) arbitrator. The neutral arbitrator shall be the chairperson of the tribunal.
This thirty (30) Day period may be extended to sixty (60) Days by agreement of both Parties. If the two (2) arbitrators are unable to agree on a third (3rd) arbitrator within the specified time period, then a third
(3rd) arbitrator shall be selected by the CPR with due regard given to the selection criteria herein and in the subsequent subsections of Article 14 and input from the Parties and other arbitrators. The Parties shall request CPR to
complete selection of the third (3rd) arbitrator no later than thirty (30) Days following their request
for selection of the arbitrator. Costs charged by CPR for this service shall be borne one-half (1/2) by Duke and one-half (1/2) by EMC; provided that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3,
the costs charged by CPR shall be 
  

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 borne one-half (1/2) by Duke and one-half (1/2) by the entities within the EMC Group that
participate in such consolidated arbitration. In the event CPR should fail to select the third (3rd) arbitrator
within thirty (30) Days following the Parties’ request for selection of the arbitrator, then any Party may petition a court of competent jurisdiction in the State of North Carolina to select the third (3rd) arbitrator. Due regard shall be given to the selection criteria and input from the Parties and other arbitrators. Each of the arbitrators shall
take an oath of neutrality. 
 (2) Additional Qualifications of Arbitrators. Unless otherwise agreed to by the Parties,
each of the arbitrators shall be competent and experienced in matters involving the electricity business in the United States. Such experience shall be conclusively demonstrated by ten (10) years or more of electric industry experience as a
practicing attorney or other experience or expertise as agreed to by the Parties. 
 (3) Replacement of Arbitrators. If
prior to the conclusion of the arbitration any arbitrator becomes incapacitated or otherwise unable to serve, then a replacement arbitrator with the qualifications specified herein shall be appointed in the manner and timeframe (such timeframe
starting anew following the unavailability of the arbitrator to be replaced) described in Section 14.6.1(1) above. 
 (4)
Discovery. Discovery and other pre-hearing procedures shall be conducted as set forth herein, as otherwise agreed by the Parties, or if they cannot agree, as determined by a majority of the arbitrators. Each Party shall have the right to
propound up to ten (10) interrogatories, the right to request relevant documents and records, conduct depositions (including depositions of experts), designate experts, and obtain the opinion of opposing experts. 
 (5) Hearing. Within fifteen (15) Days after completion of discovery, each Party shall contemporaneously submit by overnight
delivery and electronic mail to the arbitrators a precise statement of the dispute, a proposed resolution of the dispute, including a monetary amount and the supporting calculations if applicable, and the factual and/or legal support therefor (the
“Submission”). The next Business Day the Parties shall exchange complete Submissions by overnight delivery and electronic mail. Within fifteen (15) Days after receiving the other Party’s Submission, each Party may submit by
overnight delivery and electronic mail to the other Party and the arbitrators a reply statement to the other Party’s Submission. The Parties shall conduct a hearing in Charlotte, North Carolina no later than the later of (i) sixty
(60) Days following selection of the third (3rd) arbitrator, (ii) forty-five (45) Days after all pre-hearing discovery has been completed, or (iii) forty-five (45) Days after the issuance of the arbitrators’ decision denying a motion to consolidate
pursuant to Section 14.3, at which the Parties shall present such evidence, argument, and witnesses as they may choose. Prior to the beginning of the hearing, the Parties may submit a joint statement of undisputed facts and/or issues to be
resolved, if the Parties so agree to submit such statement or if the arbitrators order submission of the statement. If the Parties agree, or if allowed by a majority of the arbitrators, the Parties each may submit a post-hearing brief to the
arbitrators within ten (10) Business Days of completion of the hearing. No reply briefs shall be allowed unless otherwise permitted by a majority of the arbitrators. 
  

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 14.6.2 Streamlined Arbitration Process. The following shall be the process that is used, in
accordance with this Article, as the Streamlined Arbitration Process under this Agreement. By mutual agreement, the Parties may in any given arbitration and for the purposes of that arbitration alone modify or forego any procedural requirement or
rule specified hereunder as part of the Streamlined Arbitration Process: 
 (1) Selection of Arbitrator. No later than
thirty (30) Days following the Selection Date, the Parties shall agree upon a single arbitrator to conduct the arbitration. If the Parties are unable to agree on an arbitrator, then the arbitrator shall be selected by the CPR with due regard
given to input from the Parties and in conformity with the qualifications specified herein. The Parties shall request CPR to complete selection of the arbitrator no later than thirty (30) Days following their request for selection of an
arbitrator. Costs charged by CPR for this service shall be borne one-half (1/2) by Duke and one-half (1/2) by EMC; provided that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3, the costs charged by
CPR shall be borne one-half (1/2) by Duke and one-half (1/2) by the entities within the EMC Group that participate in such consolidated arbitration. In the event CPR should fail to select the arbitrator within seventy-five (75) Days
after the Selection Date, then any Party may petition a court of competent jurisdiction in the State of North Carolina to select the arbitrator. Due regard shall be given to the selection criteria and input from the Parties. The arbitrator shall
take an oath of neutrality. 
 (2) Qualification of the Arbitrator. The arbitrator shall be unaffiliated with any of
the Parties or their predecessors or Affiliates, such that the arbitrator: 
 (a) Shall not be a current or former employee,
advisor, attorney or consultant; 
 (b) Shall be without material financial alliance, such that said arbitrator is able to
participate in the arbitration without evident partiality or bias, unless such pecuniary interest or affiliation is expressly acknowledged and waived by all Parties; 
 (c) Shall be competent in matters involving the electricity business in the United States and shall have ten (10) years or more of
electric industry experience as a practicing attorney or such other experience or expertise as agreed by the Parties; and 
 (d) Shall take an oath of neutrality. 
 (3) Replacement of Arbitrator. If prior to the conclusion of the
arbitration the arbitrator becomes incapacitated or otherwise unable to serve, then a replacement arbitrator with the qualifications specified herein, shall be appointed in the manner and timeframe (such timeframe starting anew following the
unavailability of the arbitrator to be replaced) described in Section 14.6.2(1) above. 
 (4) Discovery. Discovery
and other pre-hearing procedures shall be conducted as set forth herein, as otherwise agreed by the Parties, or if they cannot agree, 
  

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 as determined by the arbitrator. Each Party shall have the right to propound up to ten
(10) interrogatories, the right to request relevant documents and records, conduct at least three (3) depositions, in addition to obtaining discovery of the opinions of any experts and the right to depose any experts (which are not
included in the three (3) depositions above). Additional discovery may be conducted only as allowed by the arbitrator or agreed by the Parties. 
 (5) Hearing. Within fifteen (15) Days after completion of discovery, each Party shall contemporaneously submit a Submission by overnight delivery and electronic mail to the arbitrator. The next Business
Day, the Parties shall exchange complete Submissions by overnight delivery and electronic mail. Within fifteen (15) Days after receiving the other Party’s Submission, each Party may submit by overnight delivery and electronic mail to the
other Party and the arbitrator a reply statement to the other Party’s Submission. The Parties shall conduct a hearing in Charlotte, North Carolina no later than the later of (i) forty-five (45) Days following selection of the
arbitrator, (ii) forty-five (45) Days after all pre-hearing discovery has been completed, or (iii) forty-five (45) days after the issuance of the arbitrator(s)’ decision denying a motion to consolidate pursuant to
Section 14.3, at which the Parties shall present such evidence, witnesses, and argument as they may choose. Unless otherwise ordered by the arbitrator, at least two (2) Days prior to the beginning of the hearing, the Parties may submit a
joint statement of undisputed facts and/or issues to be resolved if the Parties so agree to submit such statement or if the arbitrator orders submission of the statement. If the Parties agree, or if allowed by the arbitrator, the Parties may each
submit a post-hearing brief to the arbitrator within ten (10) Business Days of completion of the hearing. No reply briefs shall be allowed unless otherwise permitted by the arbitrator. 
 14.7 Decision. The arbitrator (if the Streamlined Arbitration Process is used) or a majority of the arbitrators (if the Standard Arbitration Process is used)
shall render his or their decision in favor of one Party or the other by adopting the resolution and the associated monetary amount requested by the prevailing Party in its Submission. The arbitrator(s) must determine the prevailing Party by
interpreting the meaning and intent of the language of this Agreement, applying the applicable Law to the relevant facts and selecting the arbitration ruling proposed by the Parties that most closely correlated to their decision based upon this
Agreement, the applicable Law and the relevant facts. In rendering the decision, the arbitrator(s) shall interpret and apply the terms and conditions of this Agreement, and consider any relevant evidence and testimony, but shall not have the power
to add to or modify any provision of this Agreement or to recommend any additions or modifications or to render a decision that does not adopt the resolution and the associated monetary amount requested by the prevailing Party in its Submission. The
arbitrator(s) shall render a decision within thirty (30) Days following the later of the conclusion of the hearing or the submission of post-hearing briefs. The decision shall be rendered in writing and shall be final and binding upon the
Parties. The decision may be filed in a court of competent jurisdiction, confirmed and may be enforced by any Party as a final judgment in such court, but shall have no precedential effect on future arbitrations under or arising out of this
Agreement except for purposes of enforcement in a court of competent jurisdiction or for the assertion of collateral estoppel/issue preclusion or res judicata/claim preclusion in another proceeding. The Parties expressly acknowledge that no
appeal of the arbitrator’s (or arbitrators’) decision shall be allowed. Except as provided in Section 16.6.4 of this Agreement, the arbitrator(s) shall have no authority to award special, exemplary, punitive, or consequential damages.

  

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 14.8 Expenses. The compensation and expenses of the arbitrator(s) shall be chargeable to and borne one-half
(1/2) by Duke and one-half (1/2) by EMC; provided, that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3, the costs charged by CPR shall be borne one-half (1/2) by Duke and one-half (1/2) by
the entities within the EMC Group that participate in such consolidated arbitration; provided, however, that each Party shall bear the compensation and expenses of its own counsel and any retained or expert witnesses. Any costs incurred by a Party
in seeking judicial enforcement of any final decision rendered by arbitration conducted under this Article 14 shall be chargeable to and borne exclusively by the Party against whom such court order is obtained. It is expressly acknowledged that the
failure of the entities within the EMC Group that participate in a consolidated arbitration to reach agreement on the allocation of costs among such entities shall not increase Duke’s share of the costs incurred under this Section 14.8 or
Sections 14.6.1(1) or 14.6.2(1) above one-half (1/2) of the total costs at issue. 
 14.9 Effect of Dispute Resolution Procedures. The initiation
of the dispute resolution procedures under this Article 14 shall not affect the Parties’ respective obligations and rights under this Agreement during the pendency of any such procedures. 
 14.10 Confidentiality. The existence, contents, or results of any arbitration proceeding under this Article 14 shall be deemed to be Confidential Information and
shall be subject to the confidentiality provisions set forth in Section 16.6. 
 Article 15 
 Credit and Collateral Requirements 
 15.1 Posting of
Collateral. To protect either Party against potential default of payment or performance, any Party that experiences a Material Adverse Change (“MAC”) shall post as collateral an amount equal to the two (2) highest Months of
Duke’s billings to EMC for the previous twelve (12) Months. Such collateral shall be provided by the Party experiencing the MAC in cash, depository agreements, or letters of credit from a financial institution reasonably acceptable to the
Party not experiencing the MAC within three (3) Business Days after the date on which the MAC occurs. Any such depository agreement or letter of credit shall be in a form satisfactory to the Party not experiencing the MAC in its reasonable
discretion. A financing institution participating in a depository agreement or providing a letter of credit entered into for purposes of this Section 15.1 shall be deemed reasonably acceptable by the Party not experiencing the MAC if it has and
maintains a minimum long term credit rating of A- or better from S&P, A3 or better from Moody’s or A- or better from Fitch Ratings, or is with or from CFC and/or CoBank. 
 15.2 Material Adverse Change. Duke shall be deemed to have experienced a MAC if its unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated below BBB- by S &
P and below Baa3 by Moody’s. EMC shall be deemed to have experienced a MAC (a) if it fails to meet the then-current Debt Service Coverage Ratio required 
  

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 of EMC by RUS, as determined by averaging the two (2) highest annual ratios during the most recent three
(3) Years, and (b) the then-current Times Interest Earned Ratio required of EMC by RUS, as determined by averaging the two (2) highest annual ratios during the most recent three (3) Years. The failure by either Party to timely
fulfill a payment or reimbursement obligation, including, in the case of Duke a failure to pay Cover Costs, under this Agreement also shall constitute a MAC by that Party. 
 15.3 Continuing Nature of Collateral Requirement. The Party experiencing the MAC must continue to post the collateral until the MAC is cured. The Party not experiencing the MAC shall have the right to draw
upon, use, and dispose of all collateral that is posted under Section 15.1, if the Party experiencing the MAC fails to fulfill any of its payment or reimbursement obligations, including, in the case of Duke a failure to pay Cover Costs, under
this Agreement, and such failure constitutes an Event of Default. In the event any collateral is drawn upon by the Party not experiencing the MAC in accordance with the provisions of Section 15.5, the Party experiencing the MAC shall within
three (3) Business Days fully replenish the collateral to the monetary amount required by Section 15.1. 
 15.4 Interest on Cash Used as
Collateral. Any interest earned on collateral held under a depository agreement with a financial institution shall be paid to the Party posting the collateral in accordance with the terms of the depository agreement. If cash collateral is
posted, the Party holding the cash collateral shall pay interest to the Party posting the cash collateral at the Federal Funds Effective Rate. The Federal Funds Effective Rate is the rate for that Day opposite the caption “Federal Funds
(Effective)” as set forth in the weekly statistical release designated as H.15(519), or any successor publication published by the Board of Governors of the Federal Reserve System. The Party posting the cash collateral shall invoice the Party
holding the cash collateral for interest accrued during the previous Month and the Party holding the cash collateral shall pay such amount within ten (10) Days of receipt of such invoice. 
 15.5 Grant of Security Interest/Remedies. To secure their obligations under this Agreement, any Party posting collateral under Section 15.1 hereby grants to
the Party not experiencing the MAC a present and continuing security interest in, and lien on (and right of setoff against), and assignment of, all cash collateral, cash equivalents collateral and any and all proceeds resulting therefrom or the
liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of, that Party, and the posting Party agrees to take such action as the non-posting Party reasonably requires in order to perfect the non-posting Party’s
first-priority security interest in, and lien on (and right of setoff against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence or deemed occurrence and during the
continuation of an Event of Default, the Non-Defaulting Party may do any one or more of the following: (i) exercise any of the rights and remedies of a secured party with respect to all collateral, including any such rights and remedies under
Law then in effect; (ii) exercise its rights of setoff against any and all property of the Defaulting Party in the possession of the Non-Defaulting Party or its agent; (iii) draw on any outstanding letter of credit issued for its benefit;
and (iv) liquidate all collateral then held by or for the benefit of the Non-Defaulting Party free from any claim or right of any nature whatsoever of the Defaulting Party, including any equity or right of purchase or redemption by the
Defaulting Party. The Party drawing upon the collateral shall apply the collateral drawn upon or otherwise realized upon the exercise of any rights or remedies granted under this Section 15.5, to reduce the obligations of 
  

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 the Party posting the collateral under this Agreement (the posting Party remaining liable for any amounts owing after
such application), and to return any surplus collateral or proceeds remaining after the posting Party’s obligations are satisfied in full. 
 15.6
Notice, Information. Each Party shall provide the other Party written notice within two (2) Business Days of the occurrence of an MAC affecting the notifying Party or of the occurrence of any event that may reasonably cause a MAC. Duke
shall provide EMC a copy of Duke’s annual report, and any amendments thereto, within thirty (30) Days after the issuance/filing with the Securities and Exchange Commission of such report or amendment. EMC shall provide Duke with (a) a
copy of EMC’s RUS Form 7 each Year, and any amendments to such Form 7, within thirty (30) Days after the filing of such report or amendment with RUS, and (b) the annual Debt Service Coverage Ratio and Times Interest Earned Ratio
required of EMC by RUS for the Year in which the Effective Date occurs and for the two (2) immediately preceding Years. 
  

	15.7	Definitions. 

 “Accounting
Requirements” means any system of accounts prescribed by a federal regulatory authority having jurisdiction over the applicable Party or, in the absence thereof, the requirements of generally accepted accounting principles applicable to
businesses similar to that of the applicable Party; and provided, further, that EMC may use a uniform system of accounts prescribed from time-to-time by the RUS. 
 “CFC” means the National Rural Utilities Cooperative Finance Corporation. 
 “CoBank” means CoBank, ACB. 
 “Depreciation and Amortization Expense” shall mean an amount constituting the depreciation and amortization of EMC computed pursuant to Accounting Requirements. As used in the calculation of the Debt Service
Coverage Ratio, Depreciation and Amortization Expense shall mean the amount reported on the RUS Form 7, Part A, Line 12(b), its successor, or the equivalent. 
 “Debt Service Coverage Ratio” means the ratio determined as follows: for any Year add (i) Patronage Capital or Margins (RUS
Form 7, Part A, Line 28(b), or its successor), plus (ii) Interest Expense (RUS Form 7, Part A, Lines 15(b) and 16(b), or its successor), plus (iii) Depreciation and Amortization Expense for such year (RUS Form 7, Part A, Line 12 (b), or
its successor), plus (iv) Short Term Interest Expense; and divide such total by the sum of all payments of Principal and Interest Expense during such year (RUS Form 7, Part N, Line 12(d), or its successor) plus Short Term Interest Expense;
provided however, that in the event that any long-term debt has been refinanced during such Year the payments of Principal and Interest Expense required to be made during such Year on account of such long-term debt shall be based (in lieu of actual
payments required to be made on such refinanced long-term debt) upon the larger of (a) an annualization of the payments required to be made with respect to the refinanced debt during the portion of such Year such refinancing debt is outstanding
or (b) the payment of Principal and Interest Expense required to be made during the following Year on account of such refinancing debt. 
  

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 “Equity” shall mean EMC’s equities (RUS Form 7, Part C, Line 35, its
successor, or the equivalent) computed pursuant to the Accounting Requirements. 
 “Interest Expense” as used in the
calculation of the Debt Service Coverage Ratio, Interest Expense shall mean the amount reported on the RUS Form 7, Part A, Lines 15(b) and 16(b), its successor, or the equivalent. 
 “Material Adverse Change” or “MAC” shall have the meaning specified in Section 15.2. 
 “Patronage Capital or Margins” as used in the calculation of the Debt Service Coverage Ratio or TIER, shall mean the amount
currently reported in the RUS Form 7, Part A, Line 28(b), its successor, or the equivalent. 
 “Principal and Interest
Expense” shall mean that amount of principal billed on account of total long-term debt of EMC as computed pursuant to the Accounting Requirements. As used in the calculation of the Debt Service Coverage Ratio, Principal and Interest Expense
shall mean the amount currently reported on RUS Form 7, Part N, Line 12(d), or its equivalent. 
 “Restricted
Rentals” shall mean all rentals required to be paid under finance leases and charged to income, exclusive of any amounts paid under such lease (whether or not designated therein as rental or additional rental) for maintenance or repairs,
insurance, taxes, assessments, water rates or similar charges. For the purpose of this definition the term “finance lease” shall mean any lease having a rental term (including the term for which such lease may be renewed or extended at the
option of the lessee) in excess of three (3) years and covering property having an initial cost in excess of two hundred fifty thousand dollars ($250,000) other than automobiles, trucks, trailers, other vehicles (including aircraft and ships),
office, garage and warehouse space and office equipment (including computers). 
 “Short Term Interest Expense”
shall mean an amount constituting the interest expense with respect to the total short-term debt of EMC, computed pursuant to Accounting Requirements, provided that all short-term debt obtained from either CFC or CoBank shall be excluded.

 “Times Interest Earned Ratio” or “TIER” shall mean the ratio determined as follows for each year: add
(i) Patronage Capital or Margins of EMC and (ii) Interest Expense of EMC, and divide the total so obtained by Interest Expense of EMC. 
  

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 Article 16 
 Additional Terms 
 16.1 Representations Warranties and Covenants. 
 16.1.1 Representations and Warranties. 
 16.1.1.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party on the Effective Date, the Commencement Date and the first Day of any Extension Term that: 
 (1) There is not pending or, to its knowledge, threatened against it or any of its Affiliates any Legal Proceeding that could materially
adversely affect its ability to perform its obligations under this Agreement; 
 (2) No event with respect to it has occurred
or is continuing that would constitute an Event of Default, and no such event would occur as a result of its entering into or performing its obligations or circumstances under this Agreement; 
 (3) It is acting as principal for its own account and has made its own independent decision to enter into this Agreement; 
 (4) It has knowledge and experience in financial matters and in the electric industry that enables it to evaluate the merits and risks of
this Agreement, and it is capable of assuming such risks. It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate and proper for it based on its own
judgment, is not relying upon the advice or recommendations of the other Party in doing so, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions, and risks of this Agreement; 
 (5) It has entered into this Agreement in connection with the conduct of its business, and it has the capacity or ability to make or take
delivery of all products or services referred to in this Agreement; 
 (6) The other Party is not acting as a fiduciary or an
advisor with respect to this Agreement; 
 (7) It is not Bankrupt and there are no proceedings pending or being contemplated
by it or, to its knowledge, threatened against it that could result in it being or becoming Bankrupt; and 
 (8) It is an
entity subject to the procedures and substantive provisions of the United States Bankruptcy Code applicable to U.S. corporations generally. 
  

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 16.1.1.2 Continuing Mutual Representations. Each Party represents, and warrants that on each of
the Effective Date, the Commencement Date and throughout the Term, it will cause the following to be materially true and correct: 
 (1) It is duly organized, validly existing and in good standing under the Laws of the state of its incorporation; 
 (2) It has all requisite corporate power to own, operate and lease its properties and carry on its business as contemplated by this Agreement; 
 (3) Subject to the conditions provided for in Article 3, it has all lender authorizations and authorizations from Governmental Authorities necessary for it to legally perform its obligations under this Agreement;

 (4) The execution, delivery and performance of this Agreement and any other documentation it is required to deliver under
this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms or conditions in its governing documents, any contract or other agreement to which it is a party or any Law applicable to it;

 (5) The individual(s) executing and delivering this Agreement and any other documentation required to be delivered under
this Agreement are duly empowered and authorized to do so at the time of such execution and delivery; and 
 (6) This
Agreement has been duly and validly executed and delivered by such Party and constitutes such Party’s legally valid and binding obligation enforceable against it in accordance with the terms thereof, subject to any Equitable Defenses.

 16.1.1.3 Additional Representations and Warranties of Duke. Duke further represents and warrants that: 
 (1) Subject to the conditions provided for in Article 3, Duke is fully authorized to sell the electric capacity and energy and Scheduling
Agent Services it is obligated to provide under this Agreement at the rates and terms contemplated by this Agreement; 
 (2)
Nothing in Duke’s contracts with other parties prevents Duke from fully performing its obligations under this Agreement; and 
 (3)(a)
As of the Effective Date, Duke is a wholly owned direct subsidiary of Duke Energy Corporation, a Delaware corporation; and 
 (b) The
provisions of the NCUC Order dated March 24, 2006, issued in Docket No. E-7, Sub. 795, the merger between Duke Energy Corporation, a North Carolina corporation, and Cinergy Corp., which closed on April 3, 2006, and the conversion of Duke
Energy Corporation, 
  

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 a North Carolina corporation, to Duke on April 3, 2006, did not adversely affect (1) the
franchise granted to Duke by the NCUC to provide NCUC regulated electric power generation, transmission, distribution, delivery, or sales and other related services to the Duke Native Load customers located within the State of North Carolina,
(2) the assets constituting Duke’s Generation System, or (3) Duke’s ability to perform its obligations under this Agreement. 
 16.1.1.4 Additional Representations and Warranties of EMC. EMC further represents and warrants that: 
 (1)
Subject to the conditions provided for in Article 3, EMC is fully authorized to purchase the electric energy and capacity, and Scheduling Agent Services provided under this Agreement at the rates and terms contemplated by this Agreement; and

 (2) Nothing in EMC’s contracts with other parties prevents EMC from fully performing its obligations under this
Agreement. 
 16.1.2 Covenants. 
 16.1.2.1 Duke. Duke covenants that: (i) neither Duke nor any of its Affiliates or subsidiaries shall, during the Term, take any action that could reasonably be anticipated to cause Duke to lose its authority to make wholesale
sales of power as contemplated under this Agreement; (ii) Duke shall not take any action during the Term that could reasonably be anticipated to cause EMC to lose its authority to purchase electric capacity and energy and Scheduling Agent
Services, as contemplated by this Agreement and, as a result, EMC loses its authority to purchase electric capacity and energy and Scheduling Agent Services; and (iii) Duke shall perform its obligations under this Agreement in accordance with
Prudent Utility Practice, including applicable NERC and SERC guidelines, and the Transmission Provider’s OATT. 
 16.1.2.2 EMC.
EMC covenants that: (i) it shall not, during the Term, take any action that could reasonably be anticipated to cause it to lose its authority to purchase, or Duke to lose its authority to provide, the electric capacity and energy and Scheduling
Agent Services as contemplated by this Agreement and, as a result, EMC loses its authority to purchase or Duke loses its authority to provide electric capacity and energy and Scheduling Agent Services; (ii) it shall, in the event one of the
sellers under a contract pursuant to which EMC has acquired an EMC Contract Resource breaches the terms of the contract in a manner that materially affects the quality or quantity of deliveries under such contract, use Commercially Reasonable
Efforts to pursue the enforcement of EMC’s contract rights; (iii) electric energy delivered by MSCG under the PPA qualifies as Firm Energy; and (iv) EMC shall perform its obligations under this Agreement in accordance with Prudent
Utility Practice, including applicable NERC and SERC guidelines, and the Transmission Provider’s OATT. 
  

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 16.2 Assignment. 
 16.2.1 General. 
 16.2.1.1 Duke shall not assign this Agreement or its rights hereunder without the
prior written consent of EMC, which consent shall not be unreasonably withheld; provided, however, that Duke may, without the consent of EMC, (a) transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds
hereof in connection with any financing or other financial arrangements (without relieving itself from liability hereunder), or (b) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of Duke’s
Generation System, and whose unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated BBB- or higher by S&P or Baa3 or higher by Moody’s (or, in the alternative, whose obligations under this
Agreement are guaranteed by a guarantor that meets the foregoing credit standards, provided that the form of the guaranty shall be reasonably satisfactory to EMC). Duke shall be relieved of all liability under this Agreement arising on and after the
effective date of an assignment that satisfies the requirements of subpart (b) above. 
 16.2.1.2 EMC shall not assign this Agreement or
its rights hereunder without the prior written consent of Duke, which consent shall not be unreasonably withheld; provided, however, that EMC may, without the consent of Duke, (a) transfer, sell, pledge, encumber or assign this Agreement or the
accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements (without relieving itself from liability hereunder), or (b) transfer or assign this Agreement to any person or entity (A) succeeding to
substantially the same Service Area and retail load as the EMC Native Load and to EMC’s rights under the EMC Contract Resources, and (B): 
 (i) if the transferee or assignee is an electric membership corporation organized under Article 2 Chapter 117 of the North Carolina General Statutes, it meets both the then-current Debt Service Coverage Ratio required of EMC by
RUS, as determined by averaging the two (2) highest annual ratios during the most recent three (3) years, and the then-current Times Interest Earned Ratio required of EMC by RUS, as determined by averaging the two (2) highest annual
ratios during the most recent three (3) years, or 
 (ii) if the transferee or assignee is not an electric membership corporation
organized under Article 2 Chapter 117 of the North Carolina General Statutes, then its unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated BBB- or higher by S&P or Baa3 or higher by
Moody’s (or, in the alternative, whose obligations under this Agreement are guaranteed by a guarantor that meets the foregoing credit standards, provided that the form of the guaranty shall be reasonably satisfactory to Duke). EMC shall be
relieved of all liability under this Agreement arising on and after the effective date of an assignment that satisfies the requirements of this subpart (B)(ii). 
 16.2.1.3 This Agreement shall be binding upon and inure to the benefit of the permitted successors and permitted assigns of the Parties. Any assignment made without a consent required hereunder shall be void and of no
force or effect as against the non-consenting Party. No sale, assignment, transfer, or other disposition permitted by this Agreement shall affect, release, or discharge any Party from its rights or obligations under this Agreement, except as may be
expressly provided by this Agreement or by written agreement of the Parties. 
  

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 16.2.2 Assignment For Security. Notwithstanding any other provision of this Agreement, a Party,
without the other Party’s consent but, if such assigning Party is then a borrower of the RUS, only with the consent of the Administrator, may assign, transfer, mortgage or pledge its interest in this Agreement as security (an “Assignment
for Security”) for any obligation secured by any indenture, mortgage, or similar lien on its system assets without limitation on the right of the secured party to further assign this Agreement, including the assignment to create a security
interest for the benefit of the Government, acting through the Administrator, or for the benefit of any third party. 
 16.2.3 Assignment
By Administrator. After any Assignment for Security to the Administrator or other secured party (including any indenture trustee under any indenture securing the obligations of the Party), the Administrator or other secured party, without the
approval of the other Party, may (i) cause the interest in this Agreement of the Party who made the Assignment for Security to be sold, assigned, transferred or otherwise disposed of to a third party pursuant to the terms governing such
Assignment for Security, or (ii) if the Administrator or other secured party first acquires this Agreement, sell, assign, transfer or otherwise dispose of this Agreement to a third party; provided, however, that in either case the Party who
made the Assignment for Security is in default of its obligations to the Administrator or other secured party that are secured by such security interest. 
  

	16.3	Liability and Indemnification. 

 16.3.1
Indemnity. Each Party shall indemnify, defend, and hold harmless the other Party from and against: 
 (1) Any Claims
arising from or out of any event, circumstance, act, or incident first occurring or existing during the period when control and title to any electric energy is vested in such Party as provided in Section 4.5, and 
 (2) Any Governmental Charges for which such Party is responsible under Section 16.7.2. 
 Notwithstanding the foregoing, no Party will be required to indemnify, defend, or hold harmless any other Party from any losses or Claims under this
Section 16.3.1 to the extent that such loss or Claim was caused by the other Party’s gross negligence or willful misconduct. 
 16.3.2 Liability Limitations. 
 16.3.2.1 Limitation of Remedies. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY, THE RESPONSIBLE PARTY’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR 
  

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 DAMAGES AT LAW OR IN EQUITY ARE WAIVED REGARDLESS OF THE FAULT, NEGLIGENCE, OR STRICT LIABILITY OF THE PARTY WHOSE
LIABILITY IS RELEASED OR LIMITED THEREBY. 
 IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, AND EXCEPT AS OTHERWISE
EXPLICITLY PROVIDED IN SECTION 16.6.4, THE RESPONSIBLE PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES (INCLUDING INTEREST AS PERMITTED BY APPLICABLE LAW) ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY
AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED (EXCEPT AS PROVIDED IN SECTION 16.29). 
 UNLESS EXPRESSLY HEREIN
PROVIDED, (INCLUDING AS PROVIDED IN SECTION 16.6.4) NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, MULTIPLE, EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS, OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR IN
CONTRACT UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY
PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE. 
 16.3.2.2 Disclaimer. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, EACH PARTY, WITH RESPECT TO THE SUPPLY OF ELECTRIC ENERGY AND CAPACITY TO THE OTHER, EXPRESSLY NEGATES ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY REPRESENTATION OR WARRANTY WITH RESPECT TO CONFORMITY TO MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE. 
 16.3.2.3 Duty to Mitigate. Each Party agrees that is has a duty to mitigate damages, and each covenants that it shall use commercially reasonable efforts to minimize any damages it may incur as a result of the other Party’s
performance or nonperformance of this Agreement. 
 16.4 Force Majeure. Unless otherwise provided by this Agreement, the term “Force
Majeure” means an event or circumstance that: (i) prevents the Party claiming to be affected by it (the “Claiming Party”) from performing its obligations in whole or in part under this Agreement; (ii) is not within the
reasonable control of the Claiming Party, or the result of the negligence of the Claiming Party, and (iii) by the exercise of due diligence, the Claiming Party is unable to overcome in a commercially reasonable manner, and, without limiting the
scope of the definition, includes acts of God, or the public enemy, or insurrection, riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court
order or Governmental Authority or arbitration award (so long as the Claiming Party has not sought or has opposed, to the extent reasonable, such actions or restraints). To the extent that the Claiming Party is prevented by Force Majeure from
carrying 
  

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 out, in whole or part, its obligations hereunder and such Party gives notice and details of the Force Majeure to the
other Party (the “Non-Claiming Party”) as soon as practicable, then the Claiming Party shall be excused from the performance of its obligations other than the obligation to make payments then due or becoming due in respect to performance
prior to the Force Majeure, except as otherwise explicitly provided in this Agreement. The Claiming Party shall remedy the Force Majeure event with all reasonable dispatch. The Non-Claiming Party shall not be required to perform or resume
performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure during the period that such Force Majeure remains in effect. Duke shall not adversely distinguish between EMC’s
Native Load and Duke’s Native Load in claiming an event of Force Majeure. 
 16.5 Events of Default and Remedies. 
 16.5.1 Events of Default. For the purposes of this Agreement, an “Event of Default” means, with respect to a Party (a “Defaulting
Party”), the occurrence of any of the following: 
 (1) The failure to make, when due, any payment or reimbursement
required by this Agreement (including any amounts to be credited by one Party to the other Party) or to post or maintain collateral required by this Agreement, if such failure is not remedied within three (3) Business Days after receipt of
written notice of such failure is given to the Defaulting Party by the other Party (“Non-Defaulting Party”). For the purposes of this Section 16.5.1(1), withholding one half (1/2) of a Disputed Amount in accordance with
Section 13.5 shall not constitute failure to make, when due, a payment; 
 (2) Any representation or warranty made by
such Party herein is false or misleading in any material respect when made or when deemed made or repeated; 
 (3) The failure
to perform any material covenant or material obligation set forth in this Agreement (except to the extent constituting a separate Event of Default under this Section 16.5), if such failure is not remedied within three (3) Business Days
after receipt of written notice thereof to the Defaulting Party, provided, that a Party’s failure to perform its obligations under Section 16.1.2.1(iii) or Section 16.1.2.2(iv) shall not in and of itself constitute a material failure
to perform a material covenant or material obligation unless such failure, in the case of Duke, results in a substantial and continuing degradation in reliability of service hereunder or, in the case of EMC, results in a substantial and continuing
degradation in performance hereunder; 
 (4) Such Party becomes Bankrupt; 
 (5) The loss of any authorization from Governmental Authorities necessary to perform its obligations hereunder in accordance with the
terms of this Agreement; 
 (6) Such Party consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all of its assets to, another entity and, at the 
  

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 time of such consolidation, amalgamation, merger, or transfer, the resulting, surviving, or transferee
entity fails to assume all of the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party; 
 (7) The occurrence and continuation of a default, event of default, or other similar condition or event that under one or more agreements
or instruments, individually or collectively, relating to indebtedness for borrowed money in an aggregate amount of not less than nine million dollars ($9,000,000) in the case of EMC or one hundred fifty million dollars ($150,000,000) in the case of
Duke, that results in the Party’s indebtedness under such agreements or instruments to become immediately due and payable; and 
 (8) With respect to such Party’s guarantor, if any: 
  

	 	(a)	if any representation or warranty made by a guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated;


  

	 	(b)	the failure of a guarantor to make any payment required or to perform any other material covenant or obligation in any guaranty made in connection with this Agreement and such
failure shall not be remedied within three (3) Business Days after written notice; 

  

	 	(c)	a guarantor becomes Bankrupt; 

  

	 	(d)	the failure of a guarantor’s guaranty to be in full force and effect for purposes of this Agreement (other than in accordance with its terms); or 

  

	 	(e)	a guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any guaranty. 

 16.5.2 Notice of Event of Default. In the event a Party becomes aware of any event or circumstance that constitutes an Event of Default, such
Party shall promptly notify the other Party in writing and by telephone. 
 16.5.3 Effect of Event of Default. If at any time an Event
of Default with respect to a Defaulting Party has occurred and is continuing, the other Party (the “Non-Defaulting Party”) may do one or more of the following: 
 (1) If an Event of Default under Section 16.5.1(1) persists for ten (10) Days or longer, terminate this Agreement in accordance
with the notification required pursuant to Sections 2.3.2.1 and 2.3.3 of this Agreement; or 
  

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 (2) If an Event of Default (other than an Event of Default under Section 16.5.1(1))
persists for sixty (60) Days or longer, terminate this Agreement in accordance with Sections 2.3.2.1 and 2.3.3 of this Agreement, provided, however, that if the Defaulting Party is diligently pursuing cure, but such Event of Default is not
capable of being cured within sixty (60) Days, then the period for the Defaulting Party to cure such Event of Default shall be extended from sixty (60) Days to one hundred eighty (180) Days before the Non-Defaulting Party may exercise
its right to terminate this Agreement pursuant to this Section 16.5.3(2). 
 16.5.4 Enforcement of Remedies. The Non-Defaulting
Party may exercise any rights or remedies available at law or equity, subject to the provisions of Article 14 and Sections 15.5 and 16.3 of this Agreement. No delay or failure on the part of a Non-Defaulting Party to exercise any right or
remedy to which it may become entitled on account of an Event of Default shall constitute an abandonment of any such right, and the Non-Defaulting Party shall be entitled to exercise such right or remedy at any time during the continuance of an
Event of Default notwithstanding any delay in enforcing such right. No waiver of any Event of Default shall constitute a waiver of any later Event of Default; all such waivers shall be in writing and shall in no circumstance be deemed effective
unless such waiver is made in writing. All of the remedies and other provisions of this Section 16.5 shall be without prejudice and in addition to any right of setoff, recoupment, combination of accounts, lien, or other right to which any Party
or any of its Affiliates is at any time otherwise entitled, whether by operation of law or in equity, under contract, or otherwise. 
  

	16.6	Confidential Information. 

 16.6.1 Prior
Confidentiality Agreements Unaffected. Any preexisting confidentiality agreements entered into by the Parties pertaining to the negotiation and development of this Agreement shall survive by their terms and shall not be considered modified by
this Agreement. 
 16.6.2 Authorized Disclosure. Each Party agrees to preserve, to the maximum extent permitted by Law, the
confidentiality of Confidential Information supplied to it by the other Party either during the negotiations leading to this Agreement or during the course of implementing, performing or winding up this Agreement. A Party may disclose Confidential
Information received from the other Party to the receiving Party’s Affiliates, auditors, attorneys, consultants, advisors, persons providing financing to the receiving Party, other entities in the EMC Group that have entered into substantially
similar agreements, and to other third parties as may be necessary for the receiving Party to perform its obligations under this Agreement, provided that any such persons agree in writing to be bound by the confidentiality provisions of this
Agreement. Notwithstanding anything contained in this Section 16.6, Confidential Information may be disclosed to any Governmental Authority requiring such Confidential Information, provided that: (i) such Confidential Information is
submitted under applicable provisions, if any, for confidential treatment by such Governmental Authority; (ii) prior to such disclosure, the Party who supplied the information is given notice of the disclosure requirement (if time permits and
the other Party’s counsel determines that such notice is permitted by Law) so that it may take at its own risk and expense whatever action it deems appropriate, including intervention in any proceeding and the seeking of an injunction to
prohibit such disclosure; and (iii) the Party subject to the Governmental Authority endeavors to protect the confidentiality of 
  

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 any Confidential Information to the extent reasonable under the circumstances and to use its good faith efforts to
prevent the further disclosure of any Confidential Information provided to any Governmental Authority. The Parties recognize that Duke is required to file periodic reports with FERC that disclose certain price, quantity, and related data, and such
filings shall not be deemed a violation of this section. 
 16.6.3 Survival of Confidentiality Obligations. Confidential Information
received from the other Party shall be kept confidential in accordance with the terms of this Agreement for at least five (5) Years after the termination of this Agreement. 
 16.6.4 Right to Remedies. In the event of an unauthorized disclosure to a third party, the limitations on remedies contained in
Section 16.3.2.1 shall not apply, and, in the event of a breach, Parties shall not have an adequate remedy at law and accordingly shall, in addition to any other available legal or equitable remedies, be entitled to an injunction against such
breach without any requirement to post a bond as a condition of such relief. 
 16.7 Governmental Liabilities. 
 16.7.1 Minimization of Tax Liability. Each Party shall use reasonable efforts to implement the provisions of and to administer this Agreement in
accordance with the intent of the Parties to minimize all taxes, so long as neither Party is materially adversely affected by such efforts. 
 16.7.2 Governmental Charges. 
 16.7.2.1 With respect to sales of electric energy made by Duke to EMC, Duke shall pay or cause
to be paid all Governmental Charges imposed by any Government Authority on or with respect to such sales of electric energy to the extent such Governmental Charges arise prior to the Delivery Point. EMC shall pay or cause to be paid all Governmental
Charges on or with respect to such sale of electric energy to the extent such Governmental Charges arise after the Delivery Point (other than ad valorem, franchise, or income taxes that are related to the sale of such product and are, therefore, the
responsibility of Duke). 
 16.7.2.2 With respect to sales of electric energy by EMC to Duke, EMC shall pay or cause to be paid all
Governmental Charges on or with respect to the sale of the electric energy to Duke. 
 16.7.2.3 In the event a Party is required by
Law to remit or pay Governmental Charges that are the other Party’s responsibility hereunder, the Party ultimately liable for the Governmental Charge shall promptly reimburse the remitting Party for such Governmental Charges; provided further
that tax liabilities may be netted pursuant to Section 13.4 of this Agreement. Nothing will obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the Law. 
 16.7.3 Records. If with respect to either Party, any purchase or sale of electric energy is exempt from Governmental Charges it shall, upon
written request of the other Party, provide a certificate of exemption or other reasonably satisfactory evidence of exemption, and shall use reasonable efforts to obtain and cooperate with obtaining any exemption from or reduction of any
Governmental Charges. 
  

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 16.7.4 Cost of Obtaining FERC Approval. The Parties agree that all fees assessed by FERC, or
expenses incurred in obtaining the approval of FERC for this Agreement, shall be the sole responsibility of Duke. 
 16.7.5 Cost of
Obtaining RUS Approval. The Parties agree that all fees assessed by the RUS, or expenses incurred in obtaining the approval of RUS for this Agreement, shall be the sole responsibility of EMC. 
 16.8 Choice of Law. The validity, interpretation and performance of this Agreement and the rights and duties of the Parties arising out of this Agreement
shall be governed by and construed, enforced, and performed in accordance with the Laws of the State of North Carolina. No principle, doctrine, or rule of conflicts of law shall modify or alter the applicability of the Laws of the State of North
Carolina to this Agreement. 
 16.9 Survival of Obligations. Upon the termination of the Parties’ delivery, sale, purchase, and related service
obligations under this Agreement, any monies, penalties or other charges due and owing under this Agreement shall be paid, any corrections or adjustments to payments previously made shall be determined, and any refunds due shall be made, as soon as
practicable but no later than sixty (60) Days after such termination. All indemnity and confidentiality obligations and audit rights shall survive the termination of this Agreement in accordance with their respective terms. Upon the effective
date of any termination of this Agreement, each Party’s obligations provided for in this Agreement will survive termination and remain in effect solely for the purpose of complying with the provisions of this Section 16.9; OTHERWISE, AS
PROVIDED IN ARTICLE 2, TERMINATION OF THIS AGREEMENT IS ABSOLUTE, AND NO OTHER OBLIGATIONS, DUTIES, OR RIGHTS WHATSOEVER ARISING UNDER THIS AGREEMENT SHALL REMAIN IN EFFECT FOLLOWING THE TERMINATION OF THIS AGREEMENT. 
 16.10 Entire Agreement. This Agreement, and the Schedules and Attachments attached hereto, constitute the entire and integrated agreement between the Parties
relating to the rates, terms, and conditions set out in this Agreement as of the Effective Date. This Agreement supersedes all prior agreements (other than the Confidentiality Agreement which became fully executed on November 22, 2004)
whether oral or written, related to the subject matter of this Agreement. The terms of this Agreement, including any Schedules and Attachments attached hereto, are controlling, and no parol or extrinsic evidence, including but not limited prior
drafts or projections of future costs or rates, shall be used to vary, contradict, or interpret the express rates, terms, and conditions of this Agreement or as a basis for challenging the justness and reasonableness of any rate, term, or condition
of this Agreement. 
 16.11 Cost Projections. 
 16.11.1 Duke Cost Projections. Duke makes no warranties or representations whatsoever concerning any cost or rate projections that it provided in connection with the negotiations leading up to the execution of this Agreement and any
such projections provided by 
  

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 Duke under Section 16.26 of this Agreement. EMC assumes the risk of reliance on any projected costs or rates
provided by Duke in connection with the negotiations leading up to the execution of this Agreement or any projections provided by Duke under Section 16.26. Any differences between projected costs or rates provided by Duke and actual costs or
rates will not limit or in any way affect the rates, terms, or conditions of this Agreement or any of the Parties’ rights and obligations hereunder. 
 16.11.2 EMC Cost Projections. EMC makes no warranties or representations whatsoever concerning any cost or rate projections that it provided in connection with the negotiations leading up to the execution of
this Agreement and any such projections provided by EMC during the Term. Duke assumes the risk of reliance on any projected costs or rates provided by EMC in connection with the negotiations leading up to the execution of this Agreement or any
projections provided by EMC during the Term. Any differences between projected costs or rates provided by EMC and actual costs or rates will not limit or in any way affect the rates, terms, or conditions of this Agreement or any of the Parties’
rights and obligations hereunder. 
 16.12 Unique Agreement. This Agreement shall not establish any precedent for any other services, or be relied
upon by either Party for any purpose other than for the services and payments provided herein. 
 16.13 No Transfer of Rights. Except as explicitly
provided herein, nothing in this Agreement shall be construed to transfer any rights or obligations that either Party has under any other agreement to the other Party. 
 16.14 No Partnership. The Parties are independent contractors. Nothing in this Agreement shall ever be deemed to create or constitute a partnership, joint venture, or association between the Parties, or to
impose a trust or partnership duty, obligation, or liability on or with regard to either of the Parties. 
 16.15 Third Parties. The provisions of
this Agreement shall not impart rights enforceable by any person or entity not a Party or not a permitted successor or assignee of a Party bound by this Agreement. This Agreement shall not be construed to create any third party beneficiary rights of
any sort. 
 16.16 Waiver. No waiver of all or any part of this Agreement shall be valid unless it (a) is reduced to writing, (b) expressly
states that the Parties agree to such waiver, and (c) is signed by the Parties. Except as specifically set forth herein, neither Duke’s nor EMC’s failure to enforce any provision or provisions of this Agreement shall in any way be
construed as a waiver of any such provision or provisions as to any future violation thereof, nor prevent it from enforcing each and every provision of this Agreement at such time or at any time thereafter. The waiver by either Duke or EMC of any
right or remedy shall not constitute a waiver of its right to assert said right or remedy, at any time thereafter, or any other rights or remedies available to it at the time of or any time after such waiver. 
 16.17 Time of Essence. Time is of the essence for, in, and throughout this Agreement. 
  

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 16.18 Headings. The descriptive headings of the various Articles and Sections of this Agreement (or any
Schedules and Attachments attached hereto) have been inserted for convenience of reference only and in no way shall be deemed to modify or restrict any of the terms or provisions hereof. 
 16.19 Severability. Wherever possible, each provision of this Agreement (including any Schedules or Attachments attached hereto) shall be interpreted in a manner as to be effective and valid under applicable
Law, but if any provision contained herein shall be found or ruled to be invalid, illegal, or unenforceable in any respect and for any reason, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality,
or unenforceable without invalidating the remainder of the provision or any provision of this Agreement, and in such event, the Parties shall attempt to negotiate amendments to this Agreement that would permit each Party to realize the equivalent
value of the economic bargain contemplated by this Agreement absent such finding or ruling. 
 16.20 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. 
 16.21 No Public
Announcement. The Parties agree that no press release or public announcement concerning the transaction contemplated by this Agreement will be made unless mutually agreed to by the Parties in writing; provided, however, such mutual agreement
will not be required if: 
 (a) The disclosing Party determines that disclosure is reasonably necessary to (i) comply
with applicable Laws of a Governmental Authority having jurisdiction; or (ii) obtain financing for the transaction contemplated by this Agreement; or 
 (b) the disclosure is limited to the following information: (i) the names of the Parties; (ii) the type of service being provided; (iii) the Term; and (iv) the total load being served. 

The disclosing Party shall provide the other Party with written notice of such disclosure at least five (5) Business Days prior to such
disclosure. 
 16.22 Notices. Unless otherwise provided in this Agreement, any notice, consent, or other communication required to be made under this
Agreement shall be in writing and shall be delivered in person, by certified mail (postage prepaid, return receipt requested), or by nationally recognized overnight courier (charges prepaid), in each case properly addressed to such Party as shown
below. Any Party may from time to time change its address, designee or contact information for the purposes of notices, consents, or other communications to that Party by a similar notice specifying a new address, but no such change shall become
effective until it is actually received by the Party to be charged with its contents. All notices, consents, or other communications required or permitted under this Agreement that are addressed as provided in this Section 16.22 shall be deemed
to have been given upon delivery if delivered in person, or upon deposit if delivered by overnight courier or certified mail. 
  

 94 








 Duke: 
 Duke Power Company LLC 
 526 South Church Street 
 Charlotte, N.C. 28202 
 Attn: VP – Business Development and Origination 
 Phone: (704) 382-3114 
 Fax: (704) 382-4014 
 With a copy to: 
 Duke Power Company LLC 
 526 South Church Street 
 Charlotte, N.C. 28202 
 Attn: General Counsel 
 EMC: 
 Piedmont Electric Membership Corporation 
 2500 N.C. 86 South 
 Post Office Drawer 1179 
 Hillsborough, North Carolina 27278 
 Attn: R.G. Brecheisen, President and Chief Executive Officer 
 Phone: 919-732-2123 
 Fax: 919-644-1030 
 The Parties may agree on alternative methods of giving operational and scheduling notices, consistent with the
requirements of the applicable Transmission Providers and/or generation scheduling providers. 
 16.23 No Dedication of the System. No undertaking by
either Party to the other Party under any provision of this Agreement shall constitute the dedication of the system, or any portion thereof, of either Party to the public or to the other Party, and it is understood and agreed that any such
undertaking by either of the Parties shall cease after the termination date of this Agreement. The sale by Duke to EMC of electric capacity and energy under this Agreement does not constitute a sale, lease, transfer, or conveyance of any kind of
ownership interest in or to any of Duke’s facilities of any kind. 
 16.24 Stranded Costs. 
 16.24.1 If a Party or any of its Affiliates becomes entitled to receive compensation associated with stranded generation, transmission, distribution or
other assets or costs, the other Party shall have no claim or entitlement to any such compensation. 
 16.24.2 Neither EMC nor Duke shall
have the obligation or liability to the other Party for the payment of any amounts authorized by statute or ordered or approved by a Governmental Authority and that are attributable to or in any way arising from stranded 
  

 95 








 generation, transmission, distribution, or other assets or costs or any liability associated therewith, whether such
amounts are characterized as competitive transition charges, wire charges, or other costs or charges, provided that nothing herein shall limit the damages that may otherwise be recovered for an Event of Default. An order on stranded costs shall not
be deemed a Material Adverse Ruling. 
 16.25 Electric Peak Load and Energy Information to be provided by EMC. Prior to October 1, 2006, and each
October 1 thereafter during the Term, EMC shall provide Duke with forecast projections of (a) EMC’s Monthly electric peak load and electric energy requirements for the following Year and (b) EMC’s annual electric peak load
and electric energy requirements for the following ten (10) years, to the extent EMC has such information available, except that, after a Notice of Termination has been given, EMC shall not be obligated to provide such information for the
period after the termination date. To the extent such information is provided in a report to the RUS that is publicly available, EMC may satisfy this requirement by providing a copy of such report to Duke. 
 16.26 Demand and Energy Charge and Rate Information to be Provided by Duke. Prior to December 1, 2006, and each December 1 thereafter during the Term,
Duke shall provide EMC with forecast projections of (a) the annual electric capacity and energy rates under Sections 7.2 or Section 7.3 (as applicable) for the following year, (b) Monthly demand and electric energy charges under
Section 7.2 or Section 7.3 (as applicable) for the following year, and (c) annual demand and electric energy charges under Sections 7.2 or Section 7.3 (as applicable) for the lesser of the remainder of the Term or the following
ten (10) Years, except that, after a Notice of Termination has been given, Duke shall not be obligated to provide such information for the period after the termination date. 
 16.27 Further Assurances. If either Party determines in its reasonable discretion that any further instruments, assurances, or other things are necessary or desirable to carry out the terms of this Agreement,
the other Party shall execute and deliver all such instruments or assurances, and do all things reasonably necessary or desirable to carry out the terms of this Agreement. 
 16.28 Applicable Laws and Regulations. This Agreement is made subject to all existing and future applicable Laws and to all existing and future promulgated orders or other duly authorized actions of
Governmental Authorities having jurisdiction over the matters set forth in this Agreement. 
 16.29 Equitable Relief. Nothing in this Agreement shall
be construed to limit the injunctive or equitable powers of a court of competent jurisdiction. 
 16.30 PURPA Assistance. Duke shall provide
assistance to EMC, as EMC reasonably requests, to support EMC’s compliance with the generation efficiency and fuel diversity standards under PURPA. 
 16.31 SERC and NERC Data Reporting and Compliance Assistance. Duke shall report EMC’s actual load, forecasted load (as provided by EMC to Duke), and resource information to SERC and NERC and their successors, in a manner similar
to the manner in which Duke reports such information for other wholesale full or partial requirements customers with service as firm as Duke’s Native Load. In addition, Duke shall provide assistance and consultation to EMC, to the extent agreed
to by the Parties, to support EMC’s compliance with such organizations’ data reporting requirements. 
  

 96 








 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized
officers and copies delivered to each Party. 
 PIEDMONT ELECTRIC MEMBERSHIP CORPORATION 
  

			
	By:	 	  

	Name:	 	Randolph G. Brecheisen
	Title:	 	President and Chief Executive Officer
	
	 DUKE POWER COMPANY LLC
 d/b/a Duke Energy
Carolinas, LLC

		
	By:	 	  

	Name:	 	Ellen T. Ruff
	Title:	 	President

  

 97 








 Schedule 1 
 Annual Production Capacity and Energy Rates 
 Schedule 1 Methodology: 
 This formula sets forth the method that Duke will use to determine its annual Demand Rates, Fuel Rates, and Variable O&M Rates (collectively, “Rates”) for
use during the System Average Pricing Option Period, if any, and during the period January 1, 2011 through the termination of this Agreement. The Rates will be annual formula rate calculations. The Rates shall initially be estimated for the
period January 1 - December 31 of the Year in which such Rates are first applicable, and shall be estimated continuing thereafter for successive twelve month periods. Beginning July 1 of the Year in which such Rates are first applicable,
and each July 1 thereafter, the Rates will be trued-up based on actual costs and loads for the most recent calendar Year, using the formula rates set forth below. The calculations will be based on Duke’s FERC Form 1 data and Duke’s
company records. The true-up will include interest on any refunds or surcharges calculated in accordance with the methodology set forth in 18 C.F.R. § 35.19a or its successor. The formulas for the Rates were designed to include all costs
incurred by Duke to own, operate and maintain Duke’s Generation System. The formulas for the Rates may only be amended by the mutual agreement of the Parties or pursuant to Section 12.3 of the Agreement. Disallowance or any other treatment
of any such costs by the NCUC or any other Governmental Authority other than FERC will not have any effect on the inclusion of such costs in the formulas for the Rates as set forth below. 
  

	I.	Definitions 

 Capitalized terms not otherwise defined in the Agreement and
as used in this formula have the following definitions: 
  

	 	A.	Allocation Factors 

  

	 	1.	Production Wages and Salaries Allocation Factor shall equal the ratio of Duke’s production-related direct wages and salaries to Duke’s total direct wages and
salaries excluding administrative and general wages and salaries. 

  

	 	2.	Production Plant Allocation Factor shall equal the ratio of the sum of Duke’s investments in Production Plant plus Production Related General Plant plus Production
Related Intangible Plant to investment in Total Plant in Service. 

  

	 	B.	Terms 

 Accumulated Deferred Income Taxes shall
equal the net of Duke’s electric deferred tax balances as recorded in FERC Account Nos. 281-283 and Duke’s electric deferred tax balance as recorded in FERC Account No. 190. 







 Administrative and General Expense shall equal Duke’s expenses as recorded in FERC Account
Nos. 920-935 excluding FERC Account Nos. 924, 928 and 930.1, and less EPRI dues as recorded in FERC Account No. 930.2. 
 Contra
AFUDC shall equal the reduction in amount of AFUDC recorded in FERC Account No. 107 due to recovery of construction period financing costs from customers resulting from inclusion of construction work in progress in rate base in any of Duke
Power’s retail or wholesale rate jurisdictions. 
 Demand Rate means the Demand Rate calculated in Part II below. 
 Depreciation Expense for Production Plant shall equal Duke’s production expense as recorded in FERC Account No. 403 plus an adjustment
to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to production plant construction work in progress included in rate base. 
 Duke’s Average Peak Hour Load for a year, with respect to the System Average Pricing Option Period, if any, shall equal the average of the
twenty highest hourly (integrated sixty minute) Duke Schedule 1 Demands during July and August of the year; and with respect to the period beginning January 1, 2011, and continuing through the termination of the Agreement, shall equal the
average of the twenty highest hourly (integrated sixty minute) Duke Schedule 1 Demands during the Annual Planning Period of the year. 
 Duke Schedule 1 Demands means Duke’s Native Load demands: (i) compensated for losses to the point at which power is available for transmission, (ii) excluding (a) non-requirements wholesale sales, as listed in
Duke’s FERC Form 1, and (b) wholesale sales with a duration of one year or less, (iii) served by Duke’s Generation System the cost of which is included in Schedule 1. 
 FAS 109 Regulatory Assets and Liabilities shall equal the net of Duke’s FAS 109 balance as recorded in FERC Account No. 182.3 and any
Duke FAS 109 balance as recorded in FERC Account No. 254. 
 FAS 106 Regulatory Assets and Liabilities shall equal the net of
Duke’s FAS 106 balance as recorded in FERC Account No. 182.3 and any Duke FAS 106 balance as recorded in FERC Account No. 254. 
  

 2 








 General Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet
Account No. 101, FERC Electric Plant Account Nos. 389-399, and amounts in FERC Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 389-399, plus an adjustment to add Contra AFUDC related to general
plant construction work in progress included in rate base. 
 General Plant Depreciation Expense shall equal Duke’s general plant
expenses as recorded in FERC Account No. 403 plus an adjustment to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to general plant construction work in progress included in rate base.

 General Plant Depreciation Reserve shall equal Duke’s general plant reserve balance as recorded in FERC Account No. 108
plus an adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to production plant construction work in progress included in rate base. 
 General Tax Expense shall equal Duke’s expenses as recorded in FERC Account No. 408.1. 
 Intangible Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet Account No.101, FERC Electric Plant Account Nos.
301-303, and amounts in FERC Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 301-303, plus an adjustment to add Contra AFUDC related to intangible plant construction work in progress included in rate
base. 
 Intangible Plant Amortization Expense shall equal Duke’s intangible plant expenses as recorded in FERC Account
No. 404 plus an adjustment to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to intangible plant construction work in progress included in rate base. 
 Intangible Plant Amortization Reserve shall equal Duke’s intangible plant reserve balance as recorded in FERC Account No. 111 plus an
adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to intangible plant construction work in progress in rate base. 
  

 3 








 Net Asset Retirement Cost shall equal Duke’s asset retirement costs recorded in FERC Account
No. 101, less the associated accumulated depreciation included in FERC Account No. 108. 
 Other Amortization shall equal
Duke’s amortization expense recorded in FERC Account Nos. 406 and 407 that is related to production plant. 
 Other Regulatory
Assets/Liabilities shall equal the net of Duke’s regulatory assets and liabilities in FERC Account Nos. 182, 228 and 254, excluding FAS 109 Regulatory Assets and FAS 106 Regulatory Assets, that are production related. 
 Payroll Taxes shall equal those payroll tax expenses as recorded in Duke Power’s FERC Account No. 408.1. 
 Plant Held for Future Use shall equal Duke’s balance in FERC Account No. 105. 
 Prepayments shall equal Duke’s prepayment balance as recorded in FERC Account No. 165. 
 Property Insurance shall equal Duke’s expenses as recorded in FERC Account No. 924. 
 Production Related Amortization of Investment Tax Credits shall equal Duke’s credits as recorded in FERC Account No. 411.4 multiplied by
the Production Plant Allocation Factor. 
 Production Depreciation Reserve shall equal Duke’s production reserve balance as
recorded in FERC Account No. 108 plus an adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to production plant construction work in progress included in rate
base. 
 Production Operation and Maintenance (O&M) Expense shall equal Duke’s expenses as recorded in FERC Account Nos.
500-557. 
 Production Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet Account No. 101, FERC
Electric Plant Account Nos. 310-347 and Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 310-347, plus an adjustment to add Contra AFUDC related to production plant construction work in progress in
included in rate base. 
  

 4 








 Production Plant Materials and Supplies shall equal Duke’s balance as assigned to production
as recorded in FERC Account No. 154. 
 Revenue Tax Rate shall equal 1.0 minus the applicable revenue or gross receipts tax
rate(s) to which Duke is subject for the revenues or gross receipts that Duke receives under this Agreement 
 Tax Deduction for
Manufacturing Activities shall equal Duke’s annual amount of tax deduction under Section 102 of the American Jobs Creation Act of 2004. 
 Total Plant in Service shall equal Duke’s total gross plant balance as recorded in FERC Balance Sheet Account No. 101, Electric Plant Account Nos. 301-399, and amounts in FERC Balance Sheet Account
Nos. 102 and 106, plus an adjustment to add Contra AFUDC related to construction work in progress included in rate base. 
 Unamortized
Loss on Reacquired Debt shall equal Duke’s expenses as recorded in FERC Account No. 189. 
 Unamortized Gain on Reacquired
Debt shall equal Duke’s amounts included in FERC Account No. 257. 
 Variable Non-Fuel Production Operation and Maintenance
Expense shall equal Duke’s expenses as recorded in FERC Account Nos. 510, 512, 513, 528, 530, 531, and 544. 
  

	II.	Demand Rate 

 The Demand Rate shall be the Production
Capacity Revenue Requirement as determined in Part III below, divided by Duke’s Average Peak Hour Load, and further divided by the Revenue Tax Rate. The Monthly Demand Rate shall be equal to the Demand Rate divided by twelve (12). 

 

	III.	Production Capacity Revenue Requirement 

 The Production
Capacity Revenue Requirement shall equal the sum of Duke’s (A) Return and Associated Income Taxes, (B) Production Depreciation Expense, (C) Decommissioning Expense, (D) Production Related General Taxes, (E) Fixed
Production Operation and Maintenance Expense, (F) Purchased Power Capacity Expenses, (G) Production Related Administrative and General Expense, (H) Production Related Other Amortization Expense and (I) Capacity Credit for Revenue
from Non-Associated Utility Sales. 
  

 5 









	A.	Return and Associated Income Taxes shall equal the product of the Production Investment Base and the Cost of Capital Rate. 

  

	 	1.	Production Investment Base 

 The Production
Investment Base shall equal the average of the beginning and end-of-year balances of (a) Production Plant, plus (b) Production Related General and Intangible Plant, plus (c) Production Plant Held for Future Use, less
(d) Production Related Depreciation Reserve, less (e) Production Related Net Asset Retirement Costs, plus (f) Nuclear Fuel Inventory, plus (g) Fossil Fuel Inventory, less (h) Production Related Accumulated Deferred Income
Taxes, plus (i) Production Related Loss on Reacquired Debt, (j) less Production Related Gain on Reacquired Debt, plus (k) FAS 106 and FAS 109 Regulatory Assets/Liabilities, plus (l) Other Regulatory Assets/Liabilities, plus
(m) Production Prepayments, plus (n) Production Materials and Supplies, plus (o) Production Related Cash Working Capital. 
  

	 	(a)	Production Plant shall equal Production Plant as defined above. 

  

	 	(b)	Production Related General and Intangible Plant shall equal the sum of General Plant plus Intangible Plant multiplied by the Production Wages and Salaries Allocation Factor.


  

	 	(c)	Production Plant Held for Future Use shall equal Plant Held for Future Use multiplied by the Production Plant Allocation Factor. 

  

	 	(d)	Production Related Depreciation Reserve shall equal Production Depreciation Reserve plus Production Related General and Intangible Plant Depreciation Reserve; where
Production Related General and Intangible Plant Depreciation Reserve shall equal the sum of General Plant Depreciation Reserve plus Intangible Plant Amortization Reserve, multiplied by the Production Wages and Salaries Allocation Factor.


  

	 	(e)	Production Related Net Asset Retirement Costs shall equal Duke’s asset retirement cost balance as recorded in FERC Account No. 101 for Production Plant less the
associated accumulated depreciation balance as recorded in FERC Account No. 108. 

  

 6 









	 	(f)	Nuclear Fuel Inventory shall equal Duke’s balance of investment in nuclear fuel as recorded in FERC Account Nos. 120.1 – 120.6. 

  

	 	(g)	Fossil Fuel Inventory shall equal Duke’s balance of investment in fossil fuel as recorded in FERC Account No. 151. 

  

	 	(h)	Production Related Accumulated Deferred Income Taxes shall equal Total Accumulated Deferred Income Taxes multiplied by the Production Plant Allocation Factor.


  

	 	(i)	Production Related Loss on Reacquired Debt shall equal Unamortized Loss on Reacquired Debt multiplied by the Production Plant Allocation Factor. 

  

	 	(j)	Production Related Gain on Reacquired Debt shall equal Unamortized Gain on Reacquired Debt multiplied by the Production Plant Allocation Factor. 

  

	 	(k)	FAS 106 and FAS 109 Regulatory Assets/Liabilities shall equal Duke’s balance of FAS 106 related costs as recorded in FERC Account Nos. 182.3 and 254 multiplied by the
Production Wages and Salaries Allocation Factor, plus Duke’s balance of FAS 109 related costs as recorded in FERC Account Nos. 182.3 and 254 multiplied by the Production Plant Allocation Factor. 

  

	 	(l)	Other Regulatory Assets/Liabilities shall equal Duke’s balance of Other Regulatory Assets/Liabilities as appropriate; provided, that in order to include any amounts in
this item, Duke shall make a filing with FERC under Section 205 of the Federal Power Act. 

  

	 	(m)	Production Prepayments shall equal Duke’s Prepayments in FERC Account 165 multiplied by the Production Wages and Salaries Allocation Factor. 

  

	 	(n)	Production Materials and Supplies shall equal Production Plant Materials and Supplies as defined above. 

  

	 	(o)	Production Related Cash Working Capital shall be a 12.5% allowance (45 days/360 days) of Fixed Production Operation and Maintenance Expense, 

  

 7 








 Variable Production Non-Fuel Operation and Maintenance Expenses and Production Related Administrative
and General Expense. 
  

	 	2.	Cost of Capital Rate 

 The Cost of Capital Rate will equal
(a) Duke’s Weighted Cost of Capital, plus (b) Federal Income Tax plus (c) State Income Tax. 
 (a) The Weighted Cost of
Capital shall be calculated based upon a proxy capital structure of 45% long term debt and 55% common equity and shall equal the sum of: 
  

	 	(i)	the long term debt component, which shall equal the product of 45% and Duke’s long term debt expenses recorded in FERC Account Nos. 427, 428, 428.1, 429, 429.1, and 430
divided by Duke’s long-term debt balance as recorded in FERC Account Nos. 221 through 227, and 

  

	 	(ii)	the return on equity component, which shall equal the product of 55% and Duke’s return on equity (ROE) of 11.0%. 

  

	 	(b)	Federal Income Tax shall equal 

 [A+(B+C+D)/E] x (FT) /
(1-FT) 
 where FT is the Federal Income Tax Rate and A is the return on equity component, as determined in Sections III.A.2.(a)(ii) above, B
is Production Related Amortization of Investment Tax Credits, , C is Duke’s annual amount of Tax Deduction for Manufacturing Activities, D is the Equity AFUDC component of Production Depreciation Expense as defined in Section III.B below,
and E is Production Investment Base as Determined in III.A.1 above. 
  

	 	(c)	State Income Tax shall equal 

 [A+(B+C+ D)/E + Federal
Income Tax]x(ST)/ (l -ST) 
 where ST is the State Income Tax Rate. A is the return on equity component determined in Sections
lll.A.2.(a)(ii) above, B is the Amortization of Investment Tax Credits, C is Duke’s 
  

 8 








 annual amount of Tax Deduction for Manufacturing Activities, D is the equity AFUDC component of
Production Depreciation Expense as defined in Section III.B. below, E is the Production Investment Base as determined in III.A.l above and Federal Income Tax is the rate determined in Section III.A.2.(b) above. 
  

	 	B.	Production Depreciation Expense shall equal the sum of Depreciation Expense for Production Plant, plus an allocation of General and Intangible Plant Deprecation Expense
calculated by multiplying the sum of General Plant Depreciation Expense and Intangible Plant Amortization Expense by the Production Wages and Salaries Allocation Factor, less Decommissioning Expense as defined in III.C. below.


  

	 	C.	Decommissioning Expense shall equal $48,304,000 per year. 

  

	 	D.	Production Related General Taxes shall equal the sum of General Tax Expense less revenue related taxes and Payroll Taxes, multiplied by the Production Plant Allocation
Factor, and Payroll Taxes multiplied by the Production Wages and Salaries Allocation Factor. 

  

	 	E.	Fixed Production Operation and Maintenance Expense shall equal Duke’s expenses as recorded in FERC Account Nos. 500, 502, 505-507, 511, 514, 517, 519, 520, 523-525, 529,
532, 535-543, 545, 546, 548-554, 556, and 557. 

  

	 	F.	Purchased Power Expenses shall equal Duke’s expenses for purchased power recorded in FERC Account No. 555 less purchased power fuel costs included in the Fuel Rate
determined in Section IV below. 

  

	 	G.	Production Related Administrative and General Expenses shall equal the sum of (1) Administrative and General Expense multiplied by the Production Wages and Salaries
Allocation Factor, (2) Property Insurance multiplied by the Production Plant Allocation Factor, (3) Expenses included in FERC Account 928 related to FERC Assessments multiplied by the Production Plant Allocation Factor, and (4) any
other Production related expenses or assessments in FERC Account Nos. 928 or 930.1. 

  

	 	H.	Production Related Other Amortization Expense shall equal Duke’s amortization expense recorded in FERC Account Nos. 406 and 407 either directly assigned to production or
allocated to production using the Production Plant Allocation Factor or the Production Wages and Salaries Allocation Factor. 

  

 9 









	 	I.	Credit for Revenue from Non-Associated Utility Sales shall equal Duke’s revenues from inter-system sales from Duke’s Generation System recorded in FERC Account 447
to the extent such sales are not included in the determination of Duke’s Average Peak Hour Load, less fuel recovered from such sales as determined in the Fuel Rate below, multiplied by 2/3. 

  

	 	IV.	Fuel Rate 

 The Fuel Rate shall equal F/S, and further
divided by the Revenue Tax Rate, where: 
 F is the expense of fossil and nuclear fuel and purchased economic power, as defined in 18 C.F.R.
§ 35.14(a)(2) (2005), for the calendar year period; provided that for purposes of this calculation described in 18 C.F.R. § 35.14(a)(2) (2005) the cost of fossil fuel shall include, in addition to those items set forth in 18
C.F.R. § 35.14(a)(6), expenses recorded in Account No. 509 for the calendar year period. 
 S is all kWh sold (compensated for
losses to the point at which power is available for transmission ), excluding inter-system sales, for the calendar year period. 
  

	 	V.	Variable O&M Rate 

 The Variable O&M rate shall
equal Variable Non-Fuel Production Operation and Maintenance Expense divided by S as determined in Section IV above, and further divided by the Revenue Tax Rate. 
  

 10 








 Attachment 3-1 
 Example showing the calculation of the Excess Annual Capacity Charges in the 
 Duke-Blue Ridge
Agreement, Duke-Piedmont Agreement 
 and Duke-Rutherford Agreement 
 The purpose of this attachment is to provide an example showing the calculation of the Excess Annual Capacity Charges provided in Section 3.5.2.3.5
of the above-identified agreements. Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R, respectively, and collectively as the EMC Group. 
 Assumptions: 
 Hour of maximum integrated sixty minute Duke Schedule 1 Demands during July and August 2007: 4:00-5:00 pm,
July 14, 2007. 
  

							
	 	  	 BR
 (kW)
	  	 P
 (kW)
	  	 R
 (kW)

	 EMC Coincident Peak Demand (7-14-07 4-5 pm)
	  	225,000	  	150,000	  	425,000
	 EMC Base Obligation (7-14-07 4-5pm)
	  	125,000	  	175,000	  	300,000

 EMC Group Coincident Peak Demand (7-14-07, 4-5 pm): 800,000 kW 
 EMC Group Base Obligation (7-14-07, 4-5 pm): 600,000 kW 
 Annual Capacity
Quantity = 148,000 kW 
 Step 1 
 Calculate EMC Group Excess Annual Capacity Quantity per Section 3.5.2.3.5. 
  

			
	 EMC Group Coincident Peak Demand (7-14-07 4-5 pm)
	  	800,000 kW
	 minus EMC Group Base Obligation (7-14-07 4-5 pm)
	  	- 600,000 kW
	 minus Annual Capacity Quantity
	  	- 148,000 kW
	 EMC Group Excess Annual Capacity Quantity
	  	52,000 kW








 Step 2 
 Calculate EMC Excess Annual Capacity Quantity per Section 3.5.2.3.5.1 
  

									
	 	  	 A
 EMC Coincident Peak
Demand (7-14-07 4-5pm)
 (kW)
	  	 B
 minus EMC Base Obligation
 (7-14-07 4-5 pm)
 (kW)
	  	 C
 minus EMC Annual
Capacity Quantity
 (kW)
	  	 D
 EMC Excess Annual
 Capacity
Quantity1
(kW)

	 BR
	  	225,000	  	125,000	  	42,000	  	58,000
	 P
	  	150,000	  	175,000	  	23,000	  	0
	 R
	  	425,000	  	300,000	  	83,000	  	42,000



	1	Cannot be less than zero. 

 Step 3 
 Calculate EMC Group Combined Excess Annual Capacity Quantity per Section 3.5.2.3.5.2. 
  

			
	 BR Excess Annual Capacity Quantity
	  	58,000 kW
	 P Excess Annual Capacity Quantity
	  	0 kW
	 R Excess Annual Capacity Quantity
	  	42,000 kW
		  	 
	 EMC Group Combined Excess Annual Capacity Quantity
	  	100,000 kW

  

 2 








 Step 4 
 Calculate Excess Annual Amount per Section 3.5.2.3.5. 
  

									
	 	  	 A
 EMC Excess Annual
Capacity Quantity
 (kW)
	  	 B
 EMC Group Combined
Excess Annual Capacity
Quantity (kW)
	  	 C
 EMC Group Excess
Capacity Quantity
 (kW)
	  	 D
 EMC Excess Annual
Amount
 ( ( A / B) * C)
(kW)

	 BR
	  	58,000	  	100,000	  	52,000	  	30,160
	 P
	  	0	  	100,000	  	52,000	  	0
	 R
	  	42,000	  	100,000	  	52,000	  	21,840

 Step 5 
 Calculate Excess Annual Capacity Charge per Section 3.5.2.3.5. 
  

								
	 	  	 A
 EMC Excess Annual
 Amount
 (kW)
	  	 B
 Annual Capacity Price
($/kW-year)
	  	 C
 Excess Annual Capacity
Charge

	 BR
	  	30,160	  	45.60	  	$	1,375,296
	 P
	  	0	  	45.60	  	$	0
	 R
	  	21,840	  	45.60	  	$	995,904

  

 3 








 Attachment 4-1 
 Piedmont 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined in Section 5.1.1) 
  
  

																																																	
	  	  	Weekday
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Sep-06
	  	39	  	37	  	37	  	37	  	37	  	39	  	44	  	43	  	41	  	41	  	41	  	42	  	43	  	44	  	45	  	46	  	48	  	50	  	51	  	51	  	52	  	50	  	46	  	41
	 Oct-06
	  	30	  	29	  	28	  	28	  	30	  	37	  	48	  	46	  	39	  	36	  	34	  	33	  	32	  	32	  	33	  	34	  	37	  	43	  	48	  	52	  	51	  	48	  	41	  	35
	 Nov-06
	  	40	  	39	  	40	  	41	  	42	  	48	  	55	  	52	  	48	  	44	  	41	  	39	  	37	  	37	  	36	  	37	  	40	  	48	  	52	  	52	  	52	  	50	  	46	  	42
	 Dec-06
	  	45	  	44	  	44	  	45	  	48	  	55	  	66	  	65	  	59	  	54	  	49	  	46	  	43	  	41	  	40	  	41	  	47	  	59	  	66	  	66	  	66	  	63	  	58	  	51
	 Jan-07
	  	54	  	55	  	57	  	60	  	62	  	73	  	84	  	78	  	74	  	73	  	66	  	60	  	55	  	52	  	51	  	52	  	58	  	69	  	78	  	78	  	78	  	76	  	73	  	68
	 Feb-07
	  	41	  	41	  	42	  	44	  	46	  	55	  	69	  	67	  	58	  	55	  	53	  	51	  	48	  	48	  	49	  	54	  	63	  	74	  	78	  	80	  	80	  	73	  	65	  	56
	 Mar-07
	  	33	  	32	  	32	  	33	  	36	  	44	  	55	  	51	  	44	  	39	  	37	  	34	  	33	  	32	  	30	  	31	  	34	  	39	  	47	  	52	  	51	  	48	  	42	  	37
	 Apr-07
	  	30	  	29	  	29	  	30	  	31	  	37	  	44	  	41	  	37	  	34	  	32	  	31	  	30	  	30	  	29	  	29	  	31	  	34	  	36	  	39	  	41	  	41	  	37	  	32
	 May-07
	  	30	  	29	  	29	  	28	  	29	  	33	  	39	  	39	  	35	  	34	  	33	  	33	  	33	  	33	  	33	  	34	  	36	  	39	  	40	  	40	  	42	  	43	  	39	  	34
	 Jun-07
	  	41	  	39	  	39	  	39	  	39	  	40	  	43	  	44	  	42	  	43	  	44	  	45	  	46	  	46	  	47	  	48	  	49	  	51	  	53	  	52	  	51	  	52	  	48	  	45
	 Jul-07
	  	51	  	47	  	44	  	42	  	41	  	42	  	45	  	46	  	47	  	52	  	58	  	63	  	67	  	67	  	69	  	73	  	74	  	80	  	83	  	81	  	78	  	74	  	66	  	58
	 Aug-07
	  	51	  	47	  	44	  	43	  	42	  	44	  	48	  	48	  	46	  	48	  	53	  	60	  	66	  	68	  	69	  	73	  	74	  	77	  	84	  	79	  	76	  	74	  	66	  	60
	 Sep-07
	  	37	  	35	  	34	  	34	  	34	  	37	  	41	  	40	  	38	  	38	  	38	  	39	  	40	  	41	  	42	  	43	  	45	  	46	  	47	  	48	  	48	  	46	  	43	  	39
	 Oct-07
	  	28	  	27	  	26	  	27	  	28	  	34	  	45	  	43	  	36	  	33	  	32	  	30	  	30	  	30	  	30	  	32	  	34	  	40	  	45	  	48	  	48	  	44	  	39	  	33
	 Nov-07
	  	37	  	37	  	37	  	37	  	39	  	44	  	51	  	48	  	44	  	41	  	38	  	37	  	35	  	34	  	33	  	34	  	37	  	44	  	48	  	49	  	48	  	46	  	43	  	39
	 Dec-07
	  	42	  	41	  	41	  	42	  	44	  	51	  	62	  	60	  	55	  	50	  	46	  	43	  	40	  	38	  	37	  	38	  	44	  	55	  	61	  	62	  	61	  	59	  	54	  	48
	 Jan-08
	  	55	  	57	  	59	  	61	  	65	  	74	  	87	  	81	  	76	  	74	  	67	  	62	  	58	  	54	  	53	  	54	  	60	  	71	  	80	  	81	  	80	  	79	  	75	  	70
	 Feb-08
	  	43	  	43	  	44	  	45	  	48	  	57	  	72	  	69	  	60	  	56	  	54	  	53	  	51	  	49	  	51	  	55	  	66	  	76	  	80	  	81	  	83	  	75	  	67	  	59
	 Mar-08
	  	34	  	33	  	34	  	34	  	37	  	45	  	57	  	53	  	45	  	40	  	37	  	36	  	34	  	32	  	32	  	32	  	35	  	41	  	48	  	53	  	53	  	50	  	44	  	38
	 Apr-08
	  	31	  	30	  	30	  	31	  	32	  	37	  	45	  	43	  	38	  	35	  	33	  	32	  	31	  	30	  	30	  	30	  	32	  	34	  	37	  	39	  	43	  	42	  	38	  	34
	 May-08
	  	32	  	30	  	30	  	30	  	30	  	34	  	41	  	40	  	36	  	35	  	34	  	34	  	34	  	34	  	34	  	35	  	37	  	39	  	41	  	41	  	44	  	44	  	40	  	35
	 Jun-08
	  	43	  	41	  	40	  	40	  	40	  	41	  	44	  	45	  	44	  	44	  	45	  	46	  	47	  	48	  	48	  	50	  	51	  	53	  	54	  	54	  	53	  	53	  	50	  	46
	 Jul-08
	  	53	  	48	  	46	  	44	  	43	  	44	  	46	  	47	  	48	  	54	  	60	  	66	  	69	  	69	  	72	  	75	  	76	  	83	  	86	  	83	  	81	  	77	  	68	  	59
	 Aug-08
	  	52	  	48	  	46	  	44	  	44	  	46	  	50	  	50	  	48	  	49	  	55	  	62	  	68	  	70	  	73	  	75	  	77	  	80	  	87	  	81	  	79	  	76	  	68	  	61
	 Sep-08
	  	38	  	36	  	35	  	35	  	35	  	37	  	42	  	41	  	39	  	39	  	39	  	40	  	41	  	42	  	44	  	44	  	46	  	48	  	48	  	49	  	50	  	48	  	44	  	40
	 Oct-08
	  	30	  	27	  	27	  	27	  	29	  	36	  	46	  	44	  	37	  	34	  	32	  	32	  	31	  	31	  	32	  	32	  	36	  	41	  	46	  	50	  	49	  	46	  	40	  	34
	 Nov-08
	  	39	  	38	  	38	  	39	  	41	  	46	  	53	  	50	  	46	  	42	  	39	  	37	  	36	  	35	  	34	  	35	  	39	  	46	  	50	  	51	  	50	  	48	  	44	  	40
	 Dec-08
	  	44	  	42	  	43	  	44	  	46	  	53	  	64	  	62	  	56	  	52	  	47	  	44	  	41	  	39	  	38	  	39	  	45	  	57	  	63	  	64	  	63	  	61	  	55	  	49

 Note: Hour 1 refers to 12:00 a.m. - 12:59:59 a.m. Eastern Time, Hour 2 refers to 1:00 a.m. - 1:59:59 a.m. Eastern
Time, etc. 
 Attachment 4-1 to Duke-Piedmont Agreement 







 Piedmont 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	Weekday
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Jan-09
	  	58	  	59	  	60	  	63	  	67	  	77	  	90	  	83	  	80	  	76	  	69	  	65	  	59	  	55	  	55	  	55	  	62	  	73	  	83	  	83	  	83	  	81	  	77	  	73
	 Feb-09
	  	44	  	44	  	45	  	46	  	49	  	59	  	74	  	71	  	62	  	59	  	56	  	55	  	52	  	51	  	53	  	58	  	67	  	79	  	83	  	84	  	86	  	78	  	69	  	60
	 Mar-09
	  	35	  	34	  	34	  	36	  	38	  	46	  	59	  	55	  	46	  	41	  	39	  	37	  	35	  	34	  	32	  	33	  	37	  	42	  	50	  	55	  	55	  	51	  	45	  	39
	 Apr-09
	  	32	  	31	  	31	  	32	  	33	  	39	  	47	  	44	  	39	  	37	  	34	  	33	  	32	  	32	  	31	  	31	  	33	  	36	  	39	  	41	  	44	  	44	  	39	  	34
	 May-09
	  	32	  	31	  	30	  	30	  	31	  	35	  	42	  	41	  	37	  	36	  	36	  	35	  	36	  	36	  	36	  	37	  	39	  	41	  	42	  	43	  	45	  	46	  	41	  	36
	 Jun-09
	  	44	  	42	  	41	  	41	  	41	  	43	  	46	  	46	  	45	  	46	  	46	  	48	  	49	  	49	  	50	  	51	  	53	  	55	  	56	  	55	  	55	  	55	  	52	  	48
	 Jul-09
	  	54	  	50	  	47	  	45	  	44	  	45	  	48	  	48	  	50	  	55	  	62	  	67	  	72	  	72	  	74	  	77	  	80	  	86	  	88	  	87	  	83	  	80	  	71	  	61
	 Aug-09
	  	54	  	50	  	48	  	46	  	45	  	47	  	51	  	52	  	50	  	51	  	57	  	64	  	70	  	73	  	74	  	78	  	80	  	82	  	90	  	84	  	81	  	79	  	71	  	63
	 Sep-09
	  	39	  	37	  	37	  	36	  	37	  	39	  	44	  	43	  	40	  	40	  	41	  	41	  	43	  	44	  	45	  	46	  	48	  	49	  	51	  	51	  	51	  	49	  	46	  	41
	 Oct-09
	  	30	  	29	  	28	  	28	  	30	  	37	  	48	  	46	  	39	  	35	  	34	  	32	  	32	  	32	  	32	  	34	  	37	  	42	  	48	  	52	  	51	  	48	  	41	  	35
	 Nov-09
	  	39	  	39	  	39	  	40	  	41	  	47	  	54	  	52	  	47	  	44	  	41	  	39	  	37	  	36	  	35	  	37	  	40	  	47	  	51	  	52	  	51	  	50	  	46	  	41
	 Dec-09
	  	45	  	44	  	44	  	45	  	48	  	55	  	66	  	65	  	59	  	53	  	49	  	46	  	43	  	41	  	39	  	41	  	46	  	59	  	66	  	66	  	66	  	62	  	58	  	51
	 Jan-10
	  	59	  	60	  	62	  	66	  	69	  	80	  	93	  	87	  	81	  	80	  	72	  	66	  	61	  	58	  	56	  	58	  	63	  	76	  	86	  	86	  	86	  	83	  	80	  	75
	 Feb-10
	  	46	  	46	  	46	  	48	  	51	  	60	  	76	  	73	  	64	  	60	  	58	  	56	  	53	  	53	  	54	  	59	  	69	  	81	  	86	  	87	  	88	  	80	  	71	  	62
	 Mar-10
	  	37	  	36	  	36	  	37	  	39	  	48	  	60	  	56	  	48	  	43	  	40	  	38	  	36	  	34	  	34	  	34	  	37	  	44	  	52	  	57	  	56	  	53	  	47	  	40
	 Apr-10
	  	33	  	32	  	32	  	32	  	34	  	40	  	48	  	46	  	41	  	37	  	35	  	34	  	33	  	32	  	32	  	32	  	34	  	37	  	39	  	42	  	46	  	45	  	41	  	36
	 May-10
	  	34	  	32	  	32	  	31	  	32	  	37	  	44	  	43	  	39	  	37	  	37	  	37	  	37	  	37	  	37	  	37	  	39	  	42	  	44	  	44	  	46	  	47	  	43	  	37
	 Jun-10
	  	46	  	44	  	43	  	42	  	42	  	44	  	47	  	48	  	46	  	47	  	48	  	49	  	51	  	51	  	52	  	53	  	54	  	56	  	58	  	58	  	57	  	57	  	53	  	49
	 Jul-10
	  	56	  	51	  	48	  	46	  	46	  	46	  	49	  	51	  	51	  	58	  	63	  	69	  	74	  	74	  	76	  	80	  	82	  	88	  	91	  	89	  	86	  	82	  	73	  	63
	 Aug-10
	  	55	  	52	  	49	  	47	  	46	  	48	  	53	  	53	  	51	  	53	  	59	  	66	  	73	  	75	  	76	  	80	  	82	  	85	  	93	  	87	  	84	  	81	  	73	  	66
	 Sep-10
	  	40	  	39	  	38	  	37	  	37	  	40	  	45	  	44	  	41	  	41	  	42	  	43	  	44	  	45	  	46	  	47	  	49	  	51	  	52	  	53	  	53	  	51	  	47	  	43
	 Oct-10
	  	31	  	30	  	29	  	29	  	31	  	38	  	49	  	47	  	39	  	37	  	34	  	33	  	33	  	33	  	33	  	34	  	38	  	44	  	49	  	53	  	53	  	49	  	43	  	36
	 Nov-10
	  	41	  	40	  	41	  	41	  	43	  	48	  	56	  	53	  	48	  	45	  	42	  	40	  	39	  	37	  	37	  	37	  	41	  	49	  	53	  	54	  	53	  	51	  	47	  	43
	 Dec-10
	  	46	  	45	  	46	  	46	  	49	  	57	  	68	  	67	  	60	  	55	  	51	  	47	  	44	  	41	  	41	  	42	  	48	  	60	  	67	  	68	  	67	  	65	  	59	  	52

 Attachment 4-1 to Duke-Piedmont Agreement 
  

 2 








 Piedmont 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	Weekend
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Sep-06
	  	40	  	38	  	37	  	37	  	37	  	37	  	37	  	39	  	42	  	44	  	44	  	46	  	47	  	48	  	49	  	50	  	51	  	51	  	51	  	51	  	51	  	49	  	45	  	42
	 Oct-06
	  	30	  	27	  	26	  	25	  	26	  	27	  	30	  	34	  	40	  	43	  	43	  	42	  	43	  	43	  	42	  	43	  	44	  	45	  	47	  	49	  	48	  	44	  	39	  	34
	 Nov-06
	  	35	  	34	  	34	  	34	  	34	  	35	  	37	  	41	  	45	  	46	  	44	  	42	  	41	  	39	  	38	  	38	  	40	  	45	  	48	  	48	  	46	  	44	  	41	  	38
	 Dec-06
	  	49	  	48	  	47	  	48	  	49	  	51	  	55	  	62	  	69	  	67	  	63	  	58	  	55	  	51	  	49	  	49	  	54	  	64	  	68	  	68	  	67	  	66	  	61	  	55
	 Jan-07
	  	73	  	73	  	73	  	74	  	75	  	77	  	80	  	83	  	88	  	87	  	81	  	73	  	67	  	62	  	59	  	56	  	60	  	69	  	74	  	73	  	72	  	68	  	62	  	57
	 Feb-07
	  	48	  	48	  	49	  	51	  	54	  	58	  	61	  	68	  	73	  	69	  	60	  	53	  	45	  	41	  	38	  	36	  	39	  	44	  	55	  	60	  	60	  	59	  	53	  	48
	 Mar-07
	  	32	  	30	  	30	  	30	  	32	  	34	  	37	  	43	  	48	  	48	  	46	  	43	  	41	  	39	  	37	  	36	  	37	  	39	  	45	  	50	  	49	  	46	  	42	  	37
	 Apr-07
	  	30	  	28	  	26	  	27	  	27	  	29	  	31	  	34	  	37	  	39	  	38	  	37	  	36	  	35	  	34	  	34	  	34	  	35	  	36	  	37	  	39	  	39	  	35	  	32
	 May-07
	  	31	  	30	  	29	  	29	  	30	  	30	  	32	  	34	  	38	  	39	  	39	  	39	  	39	  	39	  	39	  	39	  	39	  	40	  	41	  	41	  	42	  	43	  	39	  	36
	 Jun-07
	  	42	  	40	  	39	  	39	  	38	  	39	  	39	  	41	  	44	  	46	  	47	  	48	  	49	  	49	  	50	  	51	  	51	  	51	  	51	  	51	  	50	  	50	  	48	  	44
	 Jul-07
	  	46	  	42	  	39	  	38	  	37	  	37	  	37	  	41	  	48	  	55	  	60	  	64	  	69	  	73	  	74	  	76	  	78	  	79	  	77	  	75	  	73	  	73	  	66	  	57
	 Aug-07
	  	59	  	54	  	54	  	50	  	48	  	48	  	47	  	50	  	58	  	66	  	71	  	76	  	81	  	84	  	86	  	87	  	88	  	88	  	87	  	84	  	83	  	80	  	73	  	66
	 Sep-07
	  	37	  	36	  	34	  	34	  	34	  	34	  	35	  	37	  	39	  	41	  	41	  	43	  	44	  	45	  	46	  	46	  	47	  	48	  	47	  	47	  	48	  	46	  	42	  	39
	 Oct-07
	  	28	  	25	  	24	  	24	  	24	  	25	  	27	  	32	  	37	  	40	  	40	  	39	  	39	  	40	  	39	  	40	  	41	  	42	  	44	  	46	  	44	  	41	  	36	  	31
	 Nov-07
	  	32	  	32	  	31	  	31	  	32	  	33	  	35	  	39	  	42	  	43	  	41	  	39	  	38	  	37	  	35	  	36	  	37	  	42	  	44	  	44	  	43	  	41	  	39	  	36
	 Dec-07
	  	46	  	44	  	44	  	44	  	46	  	48	  	51	  	58	  	64	  	62	  	59	  	54	  	51	  	48	  	46	  	46	  	51	  	60	  	63	  	63	  	62	  	60	  	57	  	51
	 Jan-08
	  	74	  	75	  	76	  	76	  	78	  	80	  	82	  	87	  	91	  	89	  	83	  	76	  	69	  	65	  	60	  	59	  	62	  	71	  	76	  	74	  	74	  	70	  	65	  	59
	 Feb-08
	  	50	  	49	  	51	  	53	  	55	  	59	  	63	  	70	  	75	  	71	  	62	  	54	  	47	  	42	  	39	  	37	  	39	  	45	  	57	  	62	  	62	  	60	  	55	  	49
	 Mar-08
	  	33	  	32	  	31	  	32	  	32	  	35	  	38	  	44	  	49	  	50	  	47	  	44	  	42	  	40	  	38	  	37	  	39	  	41	  	46	  	51	  	51	  	48	  	44	  	39
	 Apr-08
	  	30	  	29	  	27	  	28	  	29	  	30	  	32	  	34	  	39	  	39	  	39	  	38	  	37	  	36	  	35	  	35	  	35	  	37	  	37	  	39	  	41	  	40	  	37	  	32
	 May-08
	  	32	  	31	  	30	  	30	  	30	  	31	  	33	  	36	  	39	  	41	  	41	  	40	  	40	  	40	  	40	  	40	  	41	  	41	  	42	  	42	  	44	  	44	  	41	  	37
	 Jun-08
	  	44	  	41	  	41	  	40	  	39	  	39	  	40	  	42	  	45	  	48	  	48	  	50	  	51	  	51	  	52	  	52	  	53	  	53	  	53	  	52	  	51	  	52	  	49	  	46
	 Jul-08
	  	48	  	44	  	41	  	39	  	38	  	38	  	39	  	42	  	49	  	56	  	62	  	66	  	71	  	75	  	76	  	79	  	80	  	81	  	80	  	77	  	76	  	74	  	67	  	59
	 Aug-08
	  	60	  	56	  	55	  	52	  	50	  	49	  	48	  	51	  	59	  	67	  	74	  	79	  	83	  	87	  	88	  	90	  	90	  	90	  	90	  	87	  	87	  	83	  	75	  	67
	 Sep-08
	  	38	  	37	  	36	  	35	  	35	  	35	  	37	  	38	  	41	  	42	  	43	  	44	  	45	  	46	  	47	  	48	  	48	  	49	  	48	  	49	  	49	  	47	  	44	  	41
	 Oct-08
	  	29	  	26	  	25	  	25	  	25	  	26	  	28	  	32	  	39	  	41	  	41	  	41	  	41	  	41	  	41	  	41	  	42	  	44	  	45	  	48	  	46	  	43	  	37	  	32
	 Nov-08
	  	34	  	32	  	32	  	32	  	33	  	34	  	37	  	40	  	44	  	44	  	43	  	41	  	39	  	38	  	37	  	37	  	39	  	44	  	46	  	46	  	44	  	43	  	40	  	37
	 Dec-08
	  	48	  	46	  	46	  	46	  	47	  	49	  	53	  	59	  	66	  	65	  	61	  	55	  	53	  	49	  	47	  	48	  	52	  	62	  	66	  	66	  	65	  	62	  	59	  	53

 Attachment 4-1 to Duke-Piedmont Agreement 
  

 3 








 Piedmont 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	Weekend
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Jan-09
	  	77	  	77	  	78	  	80	  	81	  	83	  	85	  	89	  	94	  	92	  	87	  	78	  	72	  	67	  	62	  	60	  	64	  	74	  	80	  	76	  	76	  	73	  	67	  	61
	 Feb-09
	  	52	  	51	  	53	  	55	  	58	  	61	  	66	  	73	  	78	  	73	  	64	  	56	  	48	  	44	  	40	  	39	  	41	  	46	  	59	  	64	  	65	  	62	  	56	  	51
	 Mar-09
	  	34	  	32	  	32	  	32	  	34	  	36	  	39	  	46	  	51	  	51	  	48	  	46	  	44	  	41	  	39	  	39	  	39	  	42	  	48	  	53	  	53	  	49	  	44	  	39
	 Apr-09
	  	31	  	30	  	27	  	29	  	30	  	31	  	33	  	36	  	39	  	41	  	41	  	39	  	39	  	37	  	37	  	36	  	37	  	37	  	39	  	39	  	42	  	41	  	37	  	33
	 May-09
	  	33	  	32	  	31	  	31	  	31	  	32	  	34	  	37	  	40	  	42	  	42	  	41	  	41	  	41	  	41	  	41	  	42	  	43	  	44	  	43	  	45	  	46	  	42	  	38
	 Jun-09
	  	45	  	43	  	41	  	41	  	41	  	41	  	41	  	44	  	46	  	49	  	51	  	51	  	52	  	53	  	53	  	54	  	55	  	55	  	55	  	54	  	53	  	53	  	51	  	47
	 Jul-09
	  	49	  	45	  	42	  	40	  	39	  	39	  	40	  	43	  	51	  	59	  	63	  	68	  	73	  	78	  	80	  	81	  	83	  	83	  	83	  	80	  	78	  	76	  	69	  	61
	 Aug-09
	  	62	  	58	  	58	  	53	  	51	  	51	  	50	  	53	  	61	  	69	  	76	  	81	  	87	  	90	  	91	  	93	  	94	  	94	  	93	  	90	  	89	  	86	  	78	  	69
	 Sep-09
	  	39	  	38	  	37	  	37	  	37	  	37	  	37	  	39	  	42	  	44	  	44	  	46	  	47	  	48	  	48	  	50	  	51	  	51	  	51	  	51	  	51	  	48	  	45	  	42
	 Oct-09
	  	30	  	27	  	26	  	25	  	25	  	27	  	30	  	34	  	40	  	43	  	43	  	42	  	42	  	42	  	42	  	43	  	44	  	45	  	46	  	49	  	48	  	44	  	39	  	33
	 Nov-09
	  	34	  	34	  	33	  	33	  	34	  	35	  	37	  	41	  	45	  	46	  	44	  	42	  	40	  	39	  	38	  	38	  	40	  	45	  	48	  	47	  	46	  	44	  	41	  	38
	 Dec-09
	  	49	  	47	  	47	  	48	  	48	  	51	  	55	  	61	  	68	  	67	  	62	  	58	  	54	  	51	  	48	  	49	  	54	  	64	  	67	  	67	  	67	  	65	  	60	  	55
	 Jan-10
	  	80	  	80	  	81	  	81	  	83	  	85	  	88	  	92	  	98	  	95	  	89	  	81	  	74	  	69	  	65	  	62	  	66	  	76	  	81	  	80	  	79	  	75	  	69	  	62
	 Feb-10
	  	53	  	53	  	54	  	56	  	60	  	63	  	67	  	75	  	80	  	75	  	66	  	58	  	50	  	45	  	41	  	39	  	42	  	48	  	60	  	66	  	67	  	64	  	59	  	52
	 Mar-10
	  	36	  	34	  	33	  	34	  	34	  	37	  	41	  	47	  	53	  	53	  	51	  	47	  	45	  	43	  	41	  	40	  	41	  	44	  	50	  	55	  	54	  	51	  	46	  	41
	 Apr-10
	  	32	  	31	  	28	  	30	  	30	  	32	  	34	  	37	  	41	  	42	  	41	  	41	  	40	  	39	  	37	  	37	  	38	  	39	  	39	  	41	  	44	  	42	  	39	  	34
	 May-10
	  	34	  	32	  	32	  	32	  	32	  	33	  	35	  	38	  	41	  	44	  	44	  	43	  	43	  	43	  	43	  	43	  	44	  	44	  	45	  	44	  	46	  	47	  	44	  	39
	 Jun-10
	  	46	  	44	  	43	  	42	  	42	  	42	  	43	  	45	  	48	  	51	  	52	  	53	  	54	  	55	  	55	  	55	  	56	  	57	  	57	  	55	  	55	  	55	  	52	  	48
	 Jul-10
	  	51	  	46	  	44	  	41	  	41	  	41	  	41	  	44	  	53	  	60	  	66	  	70	  	76	  	80	  	81	  	84	  	86	  	87	  	85	  	83	  	81	  	80	  	72	  	62
	 Aug-10
	  	65	  	60	  	59	  	55	  	53	  	52	  	52	  	55	  	63	  	72	  	78	  	83	  	89	  	94	  	95	  	95	  	97	  	97	  	96	  	93	  	92	  	88	  	80	  	72
	 Sep-10
	  	41	  	39	  	38	  	37	  	37	  	38	  	39	  	40	  	43	  	45	  	46	  	47	  	48	  	49	  	51	  	51	  	52	  	53	  	52	  	52	  	53	  	50	  	46	  	43
	 Oct-10
	  	31	  	28	  	27	  	26	  	26	  	27	  	30	  	34	  	41	  	44	  	44	  	44	  	44	  	44	  	44	  	44	  	45	  	46	  	48	  	51	  	49	  	46	  	39	  	34
	 Nov-10
	  	36	  	34	  	34	  	34	  	35	  	37	  	39	  	42	  	46	  	47	  	46	  	44	  	41	  	40	  	39	  	39	  	41	  	46	  	49	  	48	  	47	  	46	  	42	  	39
	 Dec-10
	  	51	  	48	  	48	  	49	  	51	  	53	  	57	  	63	  	70	  	69	  	65	  	60	  	55	  	53	  	50	  	51	  	55	  	66	  	69	  	69	  	69	  	67	  	62	  	57

 Attachment 4-1 to Duke-Piedmont Agreement 
  

 4 








 Attachment 4-2 
 Calculation of Reduction to EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods 
 I. Definitions 
 1. The “Carolina Power & Light Service Obligation Resources” or
“SORs” means those generation and purchased capacity resources provided to NCEMC by CP&L and used by NCEMC to serve NCEMC load pursuant to the Power Supply Agreement. 
 2. The “Power Supply Agreement” means the Power Supply Agreement Dated November 2, 1998 Between North Carolina Electric Membership
Corporation and Carolina Power & Light Company, d/b/a Progress Energy Carolinas, Inc., as amended, filed at FERC in Docket No. ER05-722-000 on June 30, 2005. 
 3. The “1996 SO” means the Service Obligation assumed by NCEMC on January 1, 1996 in the amount of 204.3 MW including losses. 

4. “SOR A” means the 225 MW of electric capacity and energy that CP&L provides to NCEMC pursuant through December 31, 2015 pursuant
to Section 2.1(a)(1) of the Power Supply Agreement. 
 5. “SOR E” means the 225 MW of electric capacity and energy that
CP&L provides to NCEMC pursuant through December 31, 2013 pursuant to Section 2.1(a)(4) of the Power Supply Agreement. 







 6. “NCEMC Catawba Resource Entitlement” or “CRE” means NCEMC’s 623.5 MW
ownership interest in the Catawba Nuclear Station. 
 7. “NCEMC’s CP&L Native Load” or “NCNL” means the electric
capacity and energy demands (kW) imposed on NCEMC by its member cooperatives in CP&L’s existing Control Areas, and which are served by CP&L under the Power Supply Agreement (excluding the 1996 SO). 
 8. “NCEMC’s Duke Native Load” or “NDNL” means the electric capacity and energy demands (kW) imposed on NCEMC by its member
cooperatives in Duke’s Control Area. 
  

 2 








 II. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During
Light Load Periods (through December 31, 2008) 
 EMC’s Base Obligation and EMC Group’s Base Obligation during an Hour
shall be subject to reduction during the period commencing on the Commencement Date and continuing through December 31, 2008 in accordance with the following: 
 A. NCEMC’s contractual right to SO 1996, SOR A and SOR E (654.3 MW rounded to 655 MW) is subject to reduction based on a comparison between 655 MW and NCEMC’s CP&L Native Load (NCNL). 
 B. In the event that NCEMC’s CP&L Native Load during the Hour is less than 655 MW, EMC’s Base Obligation and EMC Group’s Base
Obligation for the Hour shall be reduced as follows: 
 C. If 655 MW minus NCNL is equal to or less than 225 MW, the reduction in EMC’s
Base Obligation shall be equal to the amount set forth in Equation 1 below: 
 Equation 1: ( ( 655 MW - NCNL ) / 225 ) * 5 
 D. If 655 MW minus NCNL is greater than 225 MW, the reduction in EMC’s Base Obligation shall be equal to 5 MW plus the amount set forth in Equation
2 below: 
 Equation 2: ( ( 430 MW - NCNL ) / 225 ) * 5 
  

 3 








 E. If 655 MW minus NCNL is equal to or less than 225 MW, the reduction in EMC Group’s Base
Obligation shall be equal to the amount set forth in Equation 3 below: 
 Equation 3: ( ( 655 MW - NCNL ) / 225 ) * 33 
 F. If 655 MW minus NCNL is greater than 225 MW, the reduction in EMC Group’s Base Obligation shall be equal to 33 MW plus the amount set forth in
Equation 4 below: 
 Equation 4: ( ( 430 MW - NCNL ) / 225 ) * 33 
 G. Example: If NCNL is equal to 565 MW during an Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( ( 655 MW – 565
MW ) / 225 ) * 5 or 2 MW, and the reduction in EMC Group’s Base Obligation for the Hour shall be equal to ( (655 MW - 565 MW) / 225 ) * 33, or 13.2 MW. 
 III. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods (January 1, 2009 through December 31, 2010) 
 EMC’s Base Obligation and EMC Group’s Base Obligation during an Hour shall be subject to reduction during the period commencing on
January 1, 2009 and continuing through December 31, 2010 in accordance with the following: 
 A. NCEMC’s contractual right to
SO 1996 and SOR A (429.3 MW rounded to 430 MW) is subject to reduction based on a comparison between 430 MW and NCEMC’s CP&L Native Load (NCNL). 
  

 4 








 B. In the event that NCEMC’s CP&L Native Load during the Hour is less than 430 MW, EMC’s
Base Obligation for the Hour shall be reduced as follows: 
 Equation 5: ( (430 MW - NCNL ) / 225 ) * 5 
 C. In the event that NCEMC’s CP&L Native Load during the Hour is less than 430 MW, EMC Group’s Base Obligation for the Hour shall be
reduced as follows: 
 Equation 6: ( ( 430 MW - NCNL ) / 225 ) * 33 
 D. Example: If NCNL is equal to 340 MW during an Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( ( 430 MW – 340
MW ) / 225 ) * 5 MW, or 2 MW, and the reduction in EMC Group’s Base Obligation for the Hour shall be equal to ( ( 430 MW – 340 MW ) / 225 ) * 33, or 13.2 MW. 
 IV. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods for the Catawba Resource Entitlement 
 In addition to the reductions to EMC’s Base Obligation and EMC Group’s Base Obligation set forth under Sections II and III above, EMC’s
Base Obligation and EMC Group’s Base Obligation shall be subject to reduction as set forth in this Section IV. 
  

 5 








 A. In the event that NCEMC’s Duke Native Load during an Hour is less than 623.5 MW and a
nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the Hour, EMC’s Base Obligation for the Hour shall be reduced as follows: 
 Equation 7: (1 - ( NDNL / 623.5 MW) ) * 16 MW 
 B. In the event that NCEMC’s Duke Native Load during an Hour is less than 623.5 MW and a nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the Hour, EMC Group’s Base Obligation
for the Hour shall be reduced as follows: 
 Equation 8: (1 - ( NDNL / 623.5 MW ) ) * 95 MW 
 C. Example: If NDNL is equal to 561.15 MW during an Hour, and a nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the
Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( 1 -(561.15 MW / 623.5 MW) ) * 16 MW, which equals ( .1 ) * ( 16 MW ), or 1.6 MW, and the reduction in EMC Group’s
Base Obligation for the Hour shall be equal to ( 1 - (561.15 MW / 623.5 MW ) ) * 95 MW, which equals ( .1 ) * ( 95 MW ), or 9.5 MW. 
  

 6 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 1 of 6) 
 Resource Name: AEP Baseload 
 Type of Resource: Baseload
Resource 
 Delivery period: January 1, 2011 through December 31, 2012 
 Resource Capacity MW: 4 
 Must take resource: Yes, in the amount of MWs that NCEMC indicates is available in
each hour. 
 Scheduling: A schedule must be submitted for each hour by Duke in the amount of MWs that NCEMC indicates is available. 
 Energy Pricing: NA 
 Force Majeure: “Force Majeure”
means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable
control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on (i) the loss of
Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss of failure of Seller’s supply; or (iv) Seller’s ability to sell the Product at a price greater
than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a Transmission Provider for the
Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff, provided
however, that existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. 
 Attachment 4-3 to Duke-Piedmont Agreement 







 Attachment 4-3 
 Partial Requirements Resources 
 (Page 2 of 6) 
 Resource Name: Catawba 
 Type of Resource: Baseload Resource

 Delivery period: January 1, 2011 through December 31, 2021 
 Resource Capacity MW: 16 
 Must take resource: Yes, in the amount of MWs that NCEMC indicates is available in
each hour. 
 Scheduling: A schedule must be submitted for each hour by Duke in the amount of MWs that NCEMC indicates is available. 
 Energy Pricing: NA 
 Force Majeure: The term “Force
Majeure” as used herein shall mean any cause beyond the control of the party affected and which by reasonable efforts the party affected is unable to overcome, including without limitation the following: Acts of God: fire, flood, landslide,
lightning, earthquake, hurricane, tornado, storm, freeze, or drought; blight, famine, epidemic, or quarantine; strike, lockout or other labor difficulty; act or failure to act of any party (and such party so acting or failing to act shall not used
such act or failure to act to excuse any other obligation which it has under this Agreement); act or failure to act of any regulatory agency or other governmental authority; changes in the work or delays caused by public bidding requirements; theft;
casualty; accident; equipment breakdown, failure or shortage of, or inability to obtain from usual sources, goods, labor, equipment, information or drawings, machinery, supplies, energy, fuel or materials; embargo; injunction; litigation or
arbitration with suppliers or vendors; shortage of rolling stock; arrest; war; civil disturbance; explosion; acts of public enemies; sabotage; or breach of contract by any supplier, contractor, sub-contractor, laborer or materialman. Any party
rendered unable to fulfill any obligation under this Agreement by reason of Force Majeure shall make reasonable efforts to remove such inability within a reasonable time. 
 Attachment 4-3 to Duke-Piedmont Agreement 
  

 2 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 3 of 6) 
 Resource Name: Dominion PPA 
 Type of Resource: Combined Cycle
Resource 
 Delivery period: January 1, 2011 through December 31, 2014 
 Resource Capacity MW: 5 
 Must take resource: No 
 Resource Availability: Duke has the right but not the obligation to schedule the amount of MWs that NCEMC has indicated is available from this resource.

 Min run time (Hours): 8 
 Scheduling: 
  

	 	•	 	Day ahead schedule to be submitted, with intraday changes allowed 

  

	 	•	 	Nominations must be made in whole MWs 

  

	 	•	 	Day ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intraday Schedules are those that are requested after the 8:00 a.m. EPT deadline above. All
Schedule changes must occur at the top of the hour. Intraday Schedule changes require 2 hours advance notice. 

  

	 	•	 	Day ahead scheduling: Unlimited changes up to the allocation MWs 

  

	 	•	 	Intraday scheduling: Limit of two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative
maximum of 10% each hour. Additional changes will be accommodated on a best efforts basis. 

 Energy Pricing: For each month of the
Delivery Period, the price for energy will equal the sum of Day-Ahead Energy Charge, the Intra-day Energy Charge, the Incremental Variable Charge and the Variable O&M Charge: 
  

	 	•	 	Day-ahead Energy Charge = the sum of each day in the month’s Day-Ahead Energy Price x energy scheduled Day-Ahead 

  

	 	•	 	Day-Ahead Energy Price = (Day-Ahead Fuel Index + Fuel Adder) x Heat Rate 

  

	 	•	 	Day-Ahead Fuel Index: Gas Daily: Daily Price Survey, Midpoint of the Daily Ranges, Appalachia, Dominion South Point. Gas Index for each Sat. and Sun. shall be the price
specified for the Mon. immediately following such Sat. and Sun. In the event that Gas Daily no longer publishes this index, NCEMC and Dominion will agree upon a replacement index which will be passed through to the IM.


  

	 	•	 	Intra-Day Energy Charge = the sum of each day in the month’s Intra-Day Energy Price x energy scheduled Intra-Day 

  

	 	•	 	Intra-Day Energy Price = (Intra-Day Fuel Index + Fuel Adder) x Heat Rate 

 Attachment 4-3 to Duke-Piedmont Agreement 
  

 3 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 4 of 6) 
  

	 	•	 	Intra-Day Fuel Index: The higher of the price in $/MMBtu for such calendar day or the next calendar day of Gas Daily: Daily Price Survey, Absolute of the Daily Ranges,
Appalachia, Dominion South Point. Gas Index for each Sat and Sun shall be the price specified for the higher of the Monday or Tuesday immediately following such Saturday and Sunday. 

  

	 	•	 	Fuel Adder: $0.25/MMBtu 

  

	 	•	 	Heat Rate: 

  

	 	•	 	2006 heat rate: 7.730 MMBtu/MWh 

  

	 	•	 	Heat Rate Adjustment: The heat rate will be recalculated annually to reflect the actual energy costs from the previous year. The new heat rate will go into effect on February 1
of each year. 

  

	 	•	 	Incremental Variable Charge: There may be additional charges due to making Intra-day schedule changes. 

  

	 	•	 	Variable O&M Charge: 

 2011 = $3.81/MWh 

2012 = $3.91/MWh 
 2013 = $4.01/MWh

 2014 = $4.11/MWh 
 Force Majeure:
“Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is
not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on
(i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss or failure of Seller’s supply; or (iv) Seller’s ability to sell the Product
at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a Transmission
Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s
tariff; provided, however, that existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. 

 Attachment 4-3 to Duke-Piedmont Agreement 
  

 4 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 5 of 6) 
 Resource Name: SCEG 
 Type of Resource: Combined Cycle Resource

 Delivery period: January 1, 2011 through December 31, 2012 
 Resource Capacity MW: 7 
 Must take resource: No 
 Resource Availability: Duke has the right but not the obligation to schedule the amount of MWs that NCEMC has indicated is available from this resource.

 Min run time (Hours): 4 
 Firm Gas Transportation: Firm gas transportation has been procured for up to 16 hours a day. Therefore, operation of this resource is limited to no more than 16 hours a day. 
 Scheduling: 
  

	 	•	 	Day ahead schedule to be submitted, with intraday changes allowed 

  

	 	•	 	Nominations must be made in whole MWs 

  

	 	•	 	Day ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intraday Schedules are those that are requested after the 8:00 a.m. EPT deadline above. All
Schedule changes must occur at the top of the hour. Intraday Schedule changes require 2 hours advance notice. 

  

	 	•	 	Day ahead scheduling: Unlimited changes up to the allocation MWs 

  

	 	•	 	Intraday scheduling: Limit of two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative
maximum of 10% each hour. Additional changes will be accommodated on a best efforts basis. 

 Energy Pricing: For each month of the
Delivery Period, the price for energy will equal the sum of Day-Ahead Energy Charge, the Intra-day Energy Charge and the Variable O&M Charge: 
  

	 	•	 	Day-ahead Energy Charge = the sum of each day in the month’s Day-Ahead Energy Price x energy scheduled Day-Ahead: 

  

	 	•	 	Day-Ahead Energy Price = (Day-Ahead Fuel Index + Fuel Adder) x Heat Rate 

  

	 	•	 	Day-Ahead Fuel Index: 102.6% of SONAT Mid-Point price as published in Gas Daily for Louisiana-OnShore South for gas to flow on such day 

  

	 	•	 	Intra-Day Energy Charge = the sum of each day in the month’s Intra-Day Energy Price x energy scheduled Intra-Day 

  

	 	•	 	Intra-Day Energy Price = (Intra-Day Fuel Index + Fuel Adder) x Heat Rate 

 Attachment 4-3 to Duke-Piedmont Agreement 
  

 5 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 6 of 6) 
  

	 	•	 	Intra-Day Fuel Index: 102.6% of the higher of the Gas Daily daily Mid-Point price for SONAT under the table for Louisiana-OnShore South for gas to flow such day or the Gas
Daily daily Mid-Point price for SONAT under the table for Louisiana-OnShore South for gas to flow on the next trading day 

  

	 	•	 	Fuel Adder: $0.1/MMBtu 

  

	 	•	 	Heat Rate: 7.350 MMBtu/MWh 

  

	 	•	 	Variable O&M Charge: 

 2011 = $2.70/MWh 
 2012 = $2.76/MWh 
 Force Majeure: “Force
Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within
the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on
(i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss of failure of Seller’s supply; or (iv) Seller’s ability to sell the Product
at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a Transmission
Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s
tariff; provided, however, that existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred.

 Attachment 4-3 to Duke-Piedmont Agreement 
  

 6 








 Attachment 7-2 
 Example showing the calculation of the Monthly Demand Charges in the 
 Duke-Blue Ridge Agreement,
Duke-Piedmont Agreement 
 and Duke-Rutherford Agreement 
 The purpose of this attachment is to provide an example showing the calculation of the Monthly Demand Charge provided in Section 7.1.4 of the
above-identified agreements. Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R, respectively, and collectively as the EMC Group. 
 Assumptions: 
 Hour in October in which the
positive difference between the EMC Group Native Load and EMC Group’s Base Obligation is the greatest: 4:00-5:00 pm, October 14, 2006. 
  

							
	 	  	 BR
 (kW)
	  	 P
 (kW)
	  	 R
 (kW)

	 EMC Hourly Demand (10-14-06 4-5 pm)
	  	75,000	  	275,000	  	375,000
	 EMC Base Obligation (10-14-06 4-5pm)
	  	100,000	  	200,000	  	250,000

 EMC Group Hourly Demand (10-14-06, 4-5 pm):    725,000 kW

 EMC Group Base Obligation (10-14-06, 4-5 pm):    550,000 kW 
 Step 1 
 Calculate EMC Group Monthly Demand Quantity
per Section 7.1.4.3. 
  

			
	 EMC Group Hourly Demand
	  	725,000kW
	 minus EMC Group Base Obligation
	  	-550,000kW
		  	 
	 EMC Group Monthly Demand Quantity
	  	175,000kW








 Step 2 
 Calculate EMC Monthly Demand Quantity per Section 7.1.4.1. 
  

							
	 	  	 A
 EMC Hourly Demand
 (10-14-06 4-5pm) (kW)
	  	 B
 minus EMC Base Obligation
 (10-14-06 4-5 pm)
 (kW)
	  	 C
 EMC Monthly Demand
Quantity2
 (kW)

	 BR
	  	75,000	  	100,000	  	0
	 P
	  	275,000	  	200,000	  	75,000
	 R
	  	375,000	  	250,000	  	125,000

 Step 3 
 Calculate EMC Group Combined Monthly Demand Quantity per Section 7.1.4.2. 
  

			
	 BR Monthly Demand Quantity
	  	0 kW
	 P Monthly Demand Quantity
	  	75,000 kW
	 R Monthly Demand Quantity
	  	125,000 kW
		  	 
	 EMC Group Combined Monthly Demand Quantity
	  	200,000 kW

  

 2 








 Step 4 
 Calculate Monthly Demand Amount per Section 7.1.4. 
  

									
	 	  	 A
 EMC Monthly Demand
Quantity
 (kW)
	  	 B
 EMC Group Combined
Monthly Demand Quantity
(kW)
	  	 C
 EMC Group Monthly
Demand Quantity
 (kW)
	  	 D
 EMC Monthly
 Demand Amount
 ( ( A /B) * C) (kW)

	 BR
	  	0	  	200,000	  	175,000	  	0
	 P
	  	75,000	  	200,000	  	175,000	  	65,625
	 R
	  	125,000	  	200,000	  	175,000	  	109,375



	2	Cannot be less than zero. 

 Step 5 
 Calculate Monthly Demand Charge per Section 7.1.4. 
  

							
	 	  	 A
 EMC Monthly Demand
Amount (kW)
	  	 B
 Monthly Demand Rate
($/kW-year)
	  	 C
 Monthly Demand Charge

	 BR
	  	0	  	0.75	  	0
	 P
	  	65,625	  	0.75	  	$49,218.75
	 R
	  	109,375	  	0.75	  	$82,031.25

  

 3 








 Attachment 7-3 
 Calculation of Piedmont Allocated Share of 
 Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy
Credit, 
 Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 I. Definitions 
 1. The Inter-EMC Transfer Price for an Hour shall be equal to the simple average of the Duke
Territorial Incremental Cost for the Hour and the Duke Territorial Decremental Cost for the Hour; provided, that for any Hour for which the EMC Group Energy Credit Amount is zero, the Inter-EMC Transfer Price for the Hour shall be equal to 101.5% of
the Duke Territorial Incremental Cost for the Hour, and that for any Hour for which the EMC Group Energy Purchase Amount is zero, the EMC Transfer Price for the Hour shall be equal to 101.5% of the Duke Territorial Decremental Cost for the Hour.

 2. All other capitalized terms shall have the meaning set forth in Section 1.1 of this Agreement. 
 II. Piedmont Allocated Share of the Duke Total Hourly Energy Charge 
 The Piedmont Allocated Share of the Duke Total Hourly Energy Charge for an Hour shall be equal to: 
 ( C1 /
A ) * D 
 Where: 
 A = EMC Group Combined Energy Purchase Amount 
 C1 = Piedmont Energy Purchase Amount

 D = Duke Total Hourly Energy Charge 
 III. Piedmont Allocated Share of the Inter-EMC Energy Charge 
 The Piedmont Allocated Share of the Inter-EMC Energy Charge
for an Hour shall be equal to: 
 ( C1 / A ) * ( A—B ) * P 
 Where: 
 A = EMC Group Combined Energy
Purchase Amount 
 B = EMC Group Energy Purchase Amount 
 C1 =
Piedmont Energy Purchase Amount 
 P = Inter-EMC Transfer Price 







 IV. Piedmont Allocated Share of the EMC Group Total Hourly Energy Credit  
 The Piedmont Allocated Share of the EMC Group Total Hourly Energy Credit for an Hour shall be equal to: 
 ( G1 / E ) * H 
 Where: 
 E = EMC Group Combined Energy Credit Amount 
 G1 = Piedmont Energy Credit
Amount 
 H = EMC Group Total Hourly Energy Credit 
 V.
Piedmont Allocated Share of the Inter-EMC Energy Credit 
 The Piedmont Allocated Share of the Inter-EMC Energy Credit for an Hour
shall be equal to: 
 ( G1 / E ) * ( E – F ) * P 
 Where: 
 E = EMC Group Combined Energy Credit Amount 
 F = EMC Group Energy Credit Amount 
 G1 = Piedmont Energy Credit Amount 
 P = Inter-EMC Transfer Price 
  

 - 2 - 








 Attachment 7-4 
 Example 1 
 Showing the Calculation of Blue Ridge, Piedmont and 
 Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, 
 EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 The
purpose of this attachment is to provide an example showing the calculation of the charges and credits identified above for one Hour. For purposes of this example, Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R,
respectively, and collectively as the EMC Group. 
 I. ASSUMPTIONS: 
 A. Call and Put Signals during the Hour 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Intervals 1-2251 - Call Signal during each Interval (kW):
	  	6,000	  	0	  	10,000	  	6,000
	 Intervals 1-225 - Put Signal during each Interval (kW)
	  	0	  	10,000	  	0	  	0
	 Intervals 226-450 - Call Signal during each Interval (kW)
	  	6,000	  	0	  	10,000	  	6,000
	 Intervals 226-450 - Put Signal during each Interval (kW)
	  	0	  	10,000	  	0	  	0
	 Intervals 451-675 - Call Signal during each Interval (kW)
	  	0	  	4,000	  	0	  	0
	 Intervals 451-675 - Put Signal during each Interval (kW)
	  	9,000	  	0	  	9,000	  	14,000
	 Intervals 676-900 - Call Signal during each Interval (kW)
	  	0	  	4,000	  	0	  	0
	 Intervals 676-900 - Put Signal during each Interval (kW)
	  	9,000	  	0	  	9,000	  	14,000



	3	Interval numbers refer to the Intervals during the Hour (e.g., Interval 1 is the first four seconds of the Hour, Interval 2 is the next four seconds, etc.). The Call
and Put Signals are shown as the same in each of the first 225 Intervals of the Hour, and then again as the same in the next 225 Intervals and so on. This is a simplifying assumption, to make this example less cumbersome. In actual operation, the
Parties anticipate that these positions would change frequently within the Hour. 








 B. Energy deliveries during the Hour4 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Hourly Energy Amount delivered from Duke - Intervals 1-225
	  	1,500	  	0	  	2,500	  	1,500
	 Hourly Energy Amount delivered to Duke - Intervals 1-225
	  	0	  	2,500	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 226-450
	  	1,500	  	0	  	2,500	  	1,500
	 Hourly Energy Amount delivered to Duke - Intervals 226-450
	  	0	  	2,500	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 451-675
	  	0	  	1,000	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 451-675
	  	2,250	  	0	  	2,250	  	3,500
	 Hourly Energy Amount delivered from Duke - Intervals 676-900
	  	0	  	1,000	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 676-900
	  	2,250	  	0	  	2,250	  	3,500

 C. Incremental/Decremental Costs 
  

	
	Duke Territorial Incremental Cost: $0.10/kWh
	Duke Territorial Decremental Cost: $0.10/kWh



	4	These numbers sum the four-second Call and Put Signals from Part I.A. For example, 6,000 kW delivered by Duke in each of the 225 four-second Intervals (15 minutes)
equal 1,500 kWh (6,000 KW * 225 Intervals / 900 Intervals / Hour = 1500 kWh). 

  

 - 2 - 








 II. CALCULATIONS 
 A. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge 
 Step 1 
 Sum the energy deliveries by Duke to BR for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns
2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by Duke to the EMC Group for all Intervals over the entire Hour (column 5). 
  

											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR5	  	P6	  	R7	  	Sum8	  	Aggregate
EMC
Group9
	 Energy delivered by Duke (kW)
	  	3,000	  	2,000	  	5,000	  	10,000	  	3,000

 Step 2 
 Calculate the percentage that each Customer contributed to the energy deliveries by Duke (Customer Buy / Sum of Customer Buys) 
  

													
	 	  	BR10	 	 	P11	 	 	R12	 	 	Sum	 
	 Energy delivered by Duke
	  	30.00	%	 	20.00	%	 	50.00	%	 	100.00	%



	5	Blue Ridge Energy Purchase Amount 


	6	Piedmont Energy Purchase Amount 


	7	Rutherford Energy Purchase Amount 


	8	EMC Group Combined Energy Purchase Amount 


	9	EMC Group Energy Purchase Amount 


	10	Blue Ridge Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	11	Piedmont Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	12	Rutherford Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 

  

 - 3 - 








 Step 3 
 Calculate
Duke Total Hourly Energy Charge = 113% of Duke Territorial Incremental Cost for electric energy delivered by Duke to the EMC Group for the Hour (3,000 kW * $0.10/kWh * 113% = $339.00) 
 Step 4 
 Calculate the individual EMC’s Allocated Share of the Duke Total Hourly Energy Charge. 
 Apply the percentages derived in Step 2 to the Duke Total Hourly Energy Charge. 
  

													
	 	  	BR13	  	P14	  	R15	  	Sum16
	 $ for energy delivered by Duke
	  	$	 101.70	  	$	 67.80	  	$	 169.50	  	$	 339.00

 These amounts are included in the Duke Hourly Energy Charge. 
  


	13	Blue Ridge Allocated Share of Duke Total Hourly Energy Charge. 


	14	Piedmont Allocated Share of Duke Total Hourly Energy Charge 


	15	Rutherford Allocated Share of Duke Total Hourly Energy Charge 


	16	Duke Total Hourly Energy Charge 

  

 - 4 - 








 B. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the EMC Group Total
Hourly Energy Credit 
 Step 5 
 Sum the energy
deliveries by BR to Duke for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by EMC Group to Duke for all Intervals over the entire Hour (column 5).

  

											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR17	  	P18	  	R19	  	Sum20	  	EMC
Group21
	 Energy delivered by Customer (kW)
	  	4,500	  	5,000	  	4,500	  	14,000	  	7,000

 Step 6 
 Calculate the percentage that each Customer contributed to the energy deliveries by Customers (Customer delivery / Sum of Customer deliveries) 
  

													
	 	  	BR22	 	 	P23	 	 	R24	 	 	Sum	 
	 Energy delivered by Customer
	  	32.14	%	 	35.71	%	 	32.14	%	 	100.00	%



	17	Blue Ridge Energy Credit Amount 


	18	Piedmont Energy Credit Amount 


	19	Rutherford Energy Credit Amount 


	20	EMC Group Combined Energy Credit Amount 


	21	EMC Group Energy Credit Amount 


	22	Blue Ridge Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	23	Piedmont Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	24	Rutherford Energy Credit Amount / EMC Group Combined Energy Credit Amount. 

  

 - 5 - 








 Step 7 
 Calculate the
EMC Group Total Hourly Energy Credit = 90% of Duke Territorial Decremental Cost for electric energy delivered by the EMC Group to Duke for the Hour (7,000 kW * $0.10/kWh * 90% = $630) 
 Step 8 
 Calculate the EMC Allocated Share of the EMC Group Total Hourly Energy Credit 
 Apply the percentages derived in Step 6 to the EMC Group Total Hourly Energy Credit. 
  

													
	 	  	BR25	  	P26	  	R27	  	Sum28
	 $ for energy delivered by Customers
	  	$	202.50	  	$	225.00	  	$	202.50	  	$	630.00



	25	Blue Ridge Allocated Share of EMC Group Total Hourly Energy Credit. 



	26	Piedmont Allocated Share of EMC Group Total Hourly Energy Credit 


	27	Rutherford Allocated Share of EMC Group Total Hourly Energy Credit 


	28	EMC Group Total Hourly Energy Credit 

  

 - 6 - 








 C. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy Charge

 Step 9 
 Calculate the difference between the EMC
Group Combined Energy Purchase Amount (sum determined in Step 1, column 4) and the EMC Group Energy Purchase Amount (aggregate calculated in Step 1, column 5). 
  

			
	 Step 5, column 429
	  	10,000
	 Step 5, column 530
	  	-3,000
		  	 
	 Difference
	  	7,000

 Step 10 
 Apply
the percentages derived in Step 2 to the difference derived in Step 9. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Duke
	  	2,100	  	1,400	  	3,500	  	7,000

 Step 11 
 Calculate Inter-EMC Transfer Price: Average of 113% of Duke Territorial Incremental Cost and 90% of Duke Territorial Decremental Cost, unless EMC Group Energy Purchase Amount or EMC Group Energy Credit Amount is zero. If EMC Group Energy
Purchase Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Decremental Cost. If EMC Group Energy Credit Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Incremental Cost. In this example, Inter-EMC
Transfer Price is average of $0.113/kWh and $0.09/kWh, or $0.1015/kWh. 
  


	29	EMC Group Combined Energy Purchase Amount 


	30	EMC Group Energy Purchase Amount 

  

 - 7 - 








 Step 12 
 Multiply the
Inter-EMC Transfer Price times the amounts derived in Step 10. 
  

													
	 	  	BR31	  	P32	  	R33	  	Sum
	 $ for Inter-EMC Charge
	  	$	213.15	  	$	142.10	  	$	355.25	  	$	710.50

 These amounts are included in the Duke Hourly Energy Charge 
 D. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy Credit 
 Step 13 
 Calculate the EMC Group Combined Energy Credit Amount
(difference between the sum determined in Step 5, column 4) and the EMC Group Credit Amount (aggregate calculated in Step 5, column 5). 
  

			
	 Step 5, column 434
	  	14,000
	 Step 5, column 535
	  	-7,000
		  	 
	 Difference
	  	7,000

  


	31	Blue Ridge Allocated Share of Inter-EMC Energy Charge 


	32	Piedmont Allocated Share of Inter-EMC Energy Charge 


	33	Rutherford Allocated Share of Inter-EMC Energy Charge 


	34	EMC Group Combined Energy Credit Amount 


	35	EMC Group Energy Credit Amount 

  

 - 8 - 








 Step 14 
 Apply the
percentages derived in Step 6 to the difference derived in Step 13. 
  

													
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Customer
	  	 	2,250	  	 	2,500	  	 	2,250	  	 	7,000
					
	Step 15	  			  			  			  		
					
	Muliply the Inter-EMC Transfer Price times the amounts derived in Step 14	  			  			  			  		
					
	 	  	BR36	  	P37	  	R38	  	Sum
	 $ for Inter-EMC Credit
	  	$	228.38	  	$	253.75	  	$	228.38	  	$	710.50

  

	III.	CHARGE/CREDIT SUMMATION FOR THE HOUR 

  

																		
	 	 	 	  	BR	 	 	P	 	 	R	  	Total	 
	 1.
	 	Allocated Share of Duke Total Hourly Energy Ch. (Step 4)	  	$	101.70	 	 	$	67.80	 	 	$	169.50	  	$	339.00	 
	 2.
	 	Allocated Share of Inter-EMC Energy Charge (Step 12)	  	$	213.15	 	 	$	142.10	 	 	$	355.25	  	$	710.50	 
		 		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 3.
	 	Subtotal (row 1 + row 2)	  	$	314.85	 	 	$	209.90	 	 	$	524.75	  	$	1,049.50	 
		 		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 4.
	 	Allocated Share of EMC Group Ttl Hourly En. Cr. (Step 8)	  	$	202.50	 	 	$	225.00	 	 	$	202.50	  	$	630.00	 
	 5.
	 	Allocated Share of Inter-EMC Energy Credit (Step 15)	  	$	228.38	 	 	$	253.75	 	 	$	228.38	  	$	710.50	 
		 		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 6.
	 	Subtotal (row 4 + row 5)	  	$	430.88	 	 	$	478.75	 	 	$	430.88	  	$	1,340.50	 
		 		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 7.
	 	Total charge (credit) (row 3 – row 6)	  	$	(116.03	)	 	$	(268.85	)	 	$	93.88	  	$	(291.00	)
		 		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 



	36	Blue Ridge Allocated Share of Inter-EMC Energy Credit 


	37	Piedmont Allocated Share of Inter-EMC Energy Credit 


	38	Rutherford Allocated Share of Inter-EMC Energy Credit 

  

 - 9 - 








 Attachment 7-4 
 Example 2 
 Showing the Calculation of Blue Ridge, Piedmont and 
 Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, 
 EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 The
purpose of this attachment is to provide an example showing the calculation of the charges and credits identified above for one Hour. For purposes of this example, Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R,
respectively, and collectively as the EMC Group. 
  

	I.	ASSUMPTIONS: 

  

	 	A.	Call and Put Signals during the Hour 

  

									
	 	  	BR	  	P	  	R	  	 EMC
 Group

	 Intervals 1-22539 - Call Signal during each Interval (kW):
	  	0	  	3,000	  	3,000	  	2,000
	 Intervals 1-225 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	0
	 Intervals 226-450 - Call Signal during each Interval (kW)
	  	0	  	5,000	  	3,000	  	4,000
	 Intervals 226-450 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	0
	 Intervals 451-675 - Call Signal during each Interval (kW)
	  	0	  	2,000	  	0	  	0
	 Intervals 451-675 - Put Signal during each Interval (kW)
	  	2,000	  	0	  	0	  	0
	 Intervals 676-900 - Call Signal during each Interval (kW)
	  	0	  	1,000	  	1,000	  	0
	 Intervals 676-900 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	2,000

  


	39	Interval numbers refer to the Intervals during the Hour (e.g., Interval 1 is the first four seconds of the Hour, Interval 2 is the next four seconds, etc.). The Call
and Put Signals are shown as the same in each of the first 225 Intervals of the Hour, and then again as the same in the next 225 Intervals and so on. This is a simplifying assumption, to make this example less cumbersome. In actual operation, the
Parties anticipate that these positions would change frequently within the Hour. 

  

 - 10 - 









	 	B.	Energy deliveries during the Hour40 

  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Hourly Energy Amount delivered from Duke - Intervals 1-225
	  	0	  	750	  	750	  	500
	 Hourly Energy Amount delivered to Duke - Intervals 1-225
	  	1,000	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 226-450
	  	0	  	1,250	  	750	  	1,000
	 Hourly Energy Amount delivered to Duke - Intervals 226-450
	  	1,000	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 451-675
	  	0	  	500	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 451-675
	  	500	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 676-900
	  	0	  	250	  	250	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 676-900
	  	1,000	  	0	  	0	  	500

  

	 	C.	Incremental/Decremental Costs 

 Duke
Territorial Incremental Cost: $0.10/kWh 
 Duke Territorial Decremental Cost: $0.10/kWh 
  

	 	II.	CALCULATIONS 

  

	 	A.	Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge 

 Step 1 
 Sum the energy deliveries by Duke to BR for all Intervals over
the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by Duke to the EMC Group for all Intervals over the entire Hour (column 5). 
  


	40	These numbers sum the four-second Call and Put Signals from Part I.A. For example, 3,000 kW
delivered by Duke in each of the 225 four-second Intervals (15 minutes) equal 750 kWh (2,000 KW * 225 Intervals / 900 Intervals / Hour = 750 kWh). 

  


 - 11 - 









											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR41	  	P42	  	R43	  	Sum44	  	Aggregate
EMC
Group45
	 Energy delivered by Duke (kW)
	  	0	  	2,750	  	1,750	  	4,500	  	1,500

 Step 2 
 Calculate the percentage that each Customer contributed to the energy deliveries by Duke (Customer Buy / Sum of Customer Buys) 
  

													
	 	  	BR46	 	 	P47	 	 	R48	 	 	Sum	 
	 Energy delivered by Duke
	  	0.00	%	 	61.11	%	 	38.89	%	 	100.00	%

  


	41	Blue Ridge Energy Purchase Amount 


	42	Piedmont Energy Purchase Amount 


	43	Rutherford Energy Purchase Amount 


	44	EMC Group Combined Energy Purchase Amount 


	45	EMC Group Energy Purchase Amount 


	46	Blue Ridge Energy Purchase Amount / EMC Group Combined Energy Purchase Amount.



	47	Piedmont Energy Purchase Amount / EMC Group Combined Energy Purchase Amount.



	48	Rutherford Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 

  

 - 12 - 








 Step 3 
 Calculate
Duke Total Hourly Energy Charge = 113% of Duke Territorial Incremental Cost for electric energy delivered by Duke to the EMC Group for the Hour (1,500 kW * $0.10/kWh * 113% = $169.50) 
 Step 4 
 Calculate the individual EMC’s Allocated Share of the Duke Total Hourly
Energy Charge. 
 Apply the percentages derived in Step 2 to the Duke Total Hourly Energy Charge. 
  

									
	 	  	BR49	  	P50	  	R51	  	Sum52
	 $ for energy delivered by Duke
	  	$0.00	  	$103.58	  	$65.92	  	$169.50

 These amounts are included in the Duke Hourly Energy Charge. 
  


	49	Blue Ridge Allocated Share of Duke Total Hourly Energy Charge. 


	50	Piedmont Allocated Share of Duke Total Hourly Energy Charge 


	51	Rutherford Allocated Share of Duke Total Hourly Energy Charge 


	52	Duke Total Hourly Energy Charge 

  

 - 13 - 









	 	B.	Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the EMC Group Total Hourly Energy Credit 

 Step 5 
 Sum the energy deliveries by BR to Duke for all Intervals over
the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by EMC Group to Duke for all Intervals over the entire Hour (column 5). 
  

											
	 Column number
	  	1	  	3	  	4	  	5	  	6
	 	  	BR53	  	P54	  	R55	  	Sum56	  	EMC
Group57
	 Energy delivered by Customer (kW)
	  	3,500	  	0	  	0	  	3,500	  	500

 Step 6 
 Calculate the percentage that each Customer contributed to the energy deliveries by Customers (Customer delivery / Sum of Customer deliveries) 
  


	53	Blue Ridge Energy Credit Amount 


	54	Piedmont Energy Credit Amount 


	55	Rutherford Energy Credit Amount 


	56	EMC Group Combined Energy Credit Amount 


	57	EMC Group Energy Credit Amount 

  

 - 14 - 









													
	 	  	BR58	 	 	P59	 	 	R60	 	 	Sum	 
	 Energy delivered by Customer
	  	100.00	%	 	0.00	%	 	0.00	%	 	100.00	%

 Step 7 
 Calculate the EMC Group Total Hourly Energy Credit = 90% of Duke Territorial Decremental Cost for electric energy delivered by the EMC Group to Duke for the Hour (500 kW * $0.10/kWh * 90% = $45) 
 Step 8 
 Calculate the EMC Allocated
Share of the EMC Group Total Hourly Energy Credit 
 Apply the percentages derived in Step 6 to the EMC Group Total Hourly
Energy Credit. 
  

									
	 	  	BR61	  	P62	  	R63	  	Sum64
	 $ for energy delivered by Customers
	  	$45.00	  	$—	  	$—	  	$45.00

  


	58	Blue Ridge Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	59	Piedmont Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	60	Rutherford Energy Credit Amount / EMC Group Combined Energy Credit Amount.



	61	Blue Ridge Allocated Share of EMC Group Total Hourly Energy Credit. 



	62	Piedmont Allocated Share of EMC Group Total Hourly Energy Credit 


	63	Rutherford Allocated Share of EMC Group Total Hourly Energy Credit 


	64	EMC Group Total Hourly Energy Credit 

  

 - 15 - 









	 	C.	Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy Charge 

 Step 9 
 Calculate the difference between the EMC Group Combined Energy
Purchase Amount (sum determined in Step 1, column 4) and the EMC Group Energy Purchase Amount (aggregate calculated in Step 1, column 5). 
  

			
	 Step 1, column 465
	  	4,500
	 Step 1, column 566
	  	-1,500
		  	 
	 Difference
	  	3,000

 Step 10 
 Apply the percentages derived in Step 2 to the difference derived in Step 9. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Duke
	  	0	  	1,833	  	1,167	  	3,000

 Step 11 
 Calculate Inter-EMC Transfer Price: Average of 113% of Duke Territorial Incremental Cost and 90% of Duke Territorial Decremental Cost, unless EMC Group Energy Purchase Amount or EMC Group Energy Credit Amount is zero. If EMC Group Energy
Purchase Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Decremental Cost. If EMC Group Energy 
  


	65	EMC Group Combined Energy Purchase Amount 


	66	EMC Group Energy Purchase Amount 

  

 - 16 - 








 Credit Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Incremental Cost. In this example,
Inter-EMC Transfer Price is average of $0.113/kWh and $0.09/kWh, or $0.1015/kWh. 
 Step 12 
 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 10. 
  

									
	 	  	BR67	  	P68	  	R69	  	Sum
	 $ for Inter-EMC Charge
	  	$0.00	  	$186.08	  	$118.42	  	$304.50

  

	 	D.	Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy Credit 

 Step 13 
 Calculate the EMC Group Combined Energy Credit Amount
(difference between the sum determined in Step 5, column 4) and the EMC Group Credit Amount (aggregate calculated in Step 5, column 5). 
  

			
	 Step 5, column 470
	  	3,500
	 Step 5, column 571
	  	- 500
		  	 
	 Difference
	  	3,000



	67	Blue Ridge Allocated Share of Inter-EMC Energy Charge 


	68	Piedmont Allocated Share of Inter-EMC Energy Charge 


	69	Rutherford Allocated Share of Inter-EMC Energy Charge 

  

 - 17 - 








 Step 14 
 Apply the percentages derived in Step 6 to the difference derived in Step 13. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Customer
	  	3,000	  	0	  	0	  	3,000
					
	Step 15	  		  		  		  	
					
	 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 14
	  		  		  		  	
					
	 	  	BR72	  	P73	  	R74	  	Sum
	 $ for Inter-EMC Credit
	  	$304.50	  	$0.00	  	$0.00	  	$304.50

  


	70	EMC Group Combined Energy Credit Amount 


	71	EMC Group Energy Credit Amount 


	72	Blue Ridge Allocated Share of Inter-EMC Energy Credit 


	73	Piedmont Allocated Share of Inter-EMC Energy Credit 


	74	Rutherford Allocated Share of Inter-EMC Energy Credit 

  

 - 18 









	III.	CHARGE/CREDIT SUMMATION FOR THE HOUR 

  

																
	 	  	 	  	BR	 	 	P	  	R	  	Total
	 1.
	  	 Allocated Share of Duke Total Hourly Energy Ch. (Step 4)
	  	$	0.00	 	 	$	103.58	  	$	65.92	  	$	169.50
	 2.
	  	 Allocated Share of Inter-EMC Energy Charge (Step 12)
	  	$	0.00	 	 	$	186.08	  	$	118.42	  	$	304.50
		  		  	 	 	 	 	 	 	  	 	 	  	 	 
	 3.
	  	 Subtotal (row 1 + row 2)
	  	$	0.00	 	 	$	289.67	  	$	184.33	  	$	474.00
		  		  	 	 	 	 	 	 	  	 	 	  	 	 
	 4.
	  	 Allocated Share of EMC Group Ttl Hourly En. Cr. (Step 8)
	  	$	45.00	 	 	$	0.00	  	$	0.00	  	$	45.00
	 5.
	  	 Allocated Share of Inter-EMC Energy Credit (Step 15)
	  	$	304.50	 	 	$	0.00	  	$	0.00	  	$	304.50
		  		  	 	 	 	 	 	 	  	 	 	  	 	 
	 6.
	  	 Subtotal (row 4 + row 5)
	  	$	349.50	 	 	$	0.00	  	$	0.00	  	$	349.50
		  		  	 	 	 	 	 	 	  	 	 	  	 	 
	 7.
	  	 Total charge (credit) (row 3 – row 6)
	  	$	(349.50	)	 	$	289.67	  	$	184.33	  	$	124.50
		  		  	 	 	 	 	 	 	  	 	 	  	 	 

  

 - 19 - 








 Attachment 7-5 
 Example showing Calculations of 
 Piedmont Energy Purchase Amounts 
 and Piedmont Energy Credit Amount 
 This attachment provides an example showing the calculation of the Piedmont Energy Purchase Amount and Piedmont Energy Credit Amount for one Hour. 
  

															
	 Four-second Interval Number*
	  	 A
 EMC’s
Base
Obligation
(kW)
	  	 B
 EMC’s
Native
Load
(kW)
	  	 C
 Call
Signal
(B-A
where
B>A)
(kW)
	  	 D
 Call
energy
(C/900)
(kWhs)
	 	 	 E
 Put
Signal
(A-B
where
A>B)
(kW)
	  	 F
 Put
energy
(E/900)
(kWhs)
	 
	 1
	  	100,000	  	102,000	  	2,000	  	2.2	 	 	—  	  	—  	 
	 2
	  	100,000	  	101,000	  	1,000	  	1.1	 	 	—  	  	—  	 
	 3
	  	100,000	  	100,000	  	—  	  	—  	 	 	—  	  	—  	 
	 4
	  	100,000	  	99,000	  	—  	  	—  	 	 	1,000	  	1.1	 
	 5
	  	100,000	  	98,000	  	—  	  	—  	 	 	2,000	  	2.2	 
	 6
	  	100,000	  	97,000	  	—  	  	—  	 	 	3,000	  	3.3	 
	 7-89575
	  	100,000	  	100,000	  	—  	  	—  	 	 	—  	  	—  	 
	 896
	  	100,000	  	98,000	  	—  	  	—  	 	 	2,000	  	2.2	 
	 897
	  	100,000	  	99,000	  	—  	  	—  	 	 	1,000	  	1.1	 
	 898
	  	100,000	  	100,000	  	—  	  	—  	 	 	—  	  	—  	 
	 899
	  	100,000	  	101,000	  	1,000	  	1.1	 	 	—  	  	—  	 
	 900
	  	100,000	  	102,000	  	2,000	  	2.2	 	 	—  	  	—  	 
		  		  		  		  	 	 	 		  	 	 
	 Total
	  		  		  		  	6.6	76	 		  	9.9	77
		  		  		  		  	 	 	 		  	 	 



	*	Interval numbers refer to the Intervals during the hour (e.g., Interval 1 is the first four seconds of the hour, Interval 2 is the next four seconds, etc.) 



	75	To simplify this example, EMC’s Base Obligation and EMC’s Native Load are assumed to be equal during Intervals 6-895. In actual operation, the parties
anticipate that these amounts will differ throughout the Hour. 


	76	Piedmont Energy Purchase Amount 


	77	Piedmont Energy Credit Amount 








 Attachment 7-6 
 Example showing Calculations of EMC Group Energy Purchase Amounts 
 and EMC Group Energy Credit
Amount 
 This attachment provides an example showing the calculation of the EMC Group Energy Purchase Amount and EMC Group Energy Credit
Amount for one Hour. 
  

															
	 Four-second Interval Number*
	  	 A
 EMC
Group
Base
Obligation
(kW)
	  	 B
 EMC
Group
Native
Load
(kW)
	  	 C
 Call
Signal
(B-A
where
B>A)
(kW)
	  	 D
 Call
energy
(C/900)
(kWhs)
	 	 	 E
 Put
Signal
(A-B
where
A>B)
(kW)
	  	 F
 Put
energy
(E/900)
(kWhs)
	 
	 1
	  	400,000	  	408,000	  	8,000	  	8.8	 	 	—  	  	—  	 
	 2
	  	400,000	  	404,000	  	4,000	  	4.4	 	 	—  	  	—  	 
	 3
	  	400,000	  	400,000	  	—  	  	—  	 	 	—  	  	—  	 
	 4
	  	400,000	  	396,000	  	—  	  	—  	 	 	4,000	  	4.4	 
	 5
	  	400,000	  	392,000	  	—  	  	—  	 	 	8,000	  	8.8	 
	 6
	  	400,000	  	388,000	  	—  	  	—  	 	 	12,000	  	13.2	 
	 7-89578
	  	400,000	  	400,000	  	—  	  	—  	 	 	—  	  	—  	 
	 896
	  	400,000	  	392,000	  	—  	  	—  	 	 	8,000	  	8.8	 
	 897
	  	400,000	  	396,000	  	—  	  	—  	 	 	4,000	  	4.4	 
	 898
	  	400,000	  	400,000	  	—  	  	—  	 	 	—  	  	—  	 
	 899
	  	400,000	  	404,000	  	4,000	  	4.4	 	 	—  	  	—  	 
	 900
	  	400,000	  	408,000	  	8,000	  	8.8	 	 	—  	  	—  	 
		  		  		  		  	 	 	 		  	 	 
	 Total
	  		  		  		  	26.4	79	 		  	39.6	80
		  		  		  		  	 	 	 		  	 	 



	*	Interval numbers refer to the Intervals during the hour (e.g., Interval 1 is the first four seconds of the hour, Interval 2 is the next four seconds, etc.) 



	78	To simplify this example, the EMC Group’s Base Obligation and the EMC Group’s Native Load are assumed to be equal during Intervals 6-895. In actual
operation, the Parties anticipate that these amounts will differ throughout the Hour. 


	79	EMC Group Energy Purchase Amount 


	80	EMC Group Energy Credit Amount 








 Attachment 7-7 
 Example showing the calculation of 
 Monthly Billing Demand under Section 7.2.6.3.2

 The purpose of this attachment is to provide an example showing the calculation of the Monthly Billing Demand under
Section 7.2.6.3.2 of the Agreement. 
 I. Assumptions: 
  


									
	 	  	 	  	Day	  	 Hour
	  	 Load
 (MW)

	1.	  	 Highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	5:00-6:00 p.m.	  	17,000
	2.	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	6:00-7:00 p.m.	  	16,975
	3.	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	4:00-5:00 p.m.	  	16,950
	4.	  	 4th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	3:00-4:00 p.m.	  	16,925
	5.	  	 5th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	5:00-6:00 p.m.	  	16,900
	6.	  	 6th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	6:00-7:00 p.m.	  	16,875
	7.	  	 7th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	4:00-5:00 p.m.	  	16,850
	8.	  	 8th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	3:00-4:00 p.m.	  	16,825
	9.	  	 9th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	5:00-6:00 p.m.	  	16,800
	10.	  	 10th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	6:00-7:00 p.m.	  	16,775
	11.	  	 11th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	4:00-5:00 p.m.	  	16,750
	12.	  	 12th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	3:00-4:00 p.m.	  	16,725
	13.	  	 13th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	5:00-6:00 p.m.	  	16,700
	14.	  	 14th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	6:00-7:00 p.m.	  	16,675
	15.	  	 15th
highest Hourly Duke Schedule 1 Demand during 2007
	  	6-26-07	  	4:00-5:00 p.m.	  	16,650
	16.	  	 16th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	4:00-5:00 p.m.	  	16,625
	17.	  	 17th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	3:00-4:00 p.m.	  	16,600
	18.	  	 18th
highest Hourly Duke Schedule 1 Demand during 2007
	  	1-18-07	  	9:00-10:00 a.m.	  	16,575
	19.	  	 19th
highest Hourly Duke Schedule 1 Demand during 2007
	  	1-18-07	  	10:00-11:00 a.m.	  	16,550
	20.	  	 20th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	4:00-5:00 p.m.	  	16,525









									
	 	  	 	  	 Day
	  	 Hour
	  	 Load
 (MW)

	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	3:00-4:00 p.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	5:00-6:00 p.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	6:00-7:00 p.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	3:00-4:00 p.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	4:00-5:00 p.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	2:00-3:00 p.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	1:00-2:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	5:00-6:00 p.m.	  	16,325
	 29.
	  	 29th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	6:00-7:00 p.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	4:00-5:00 p.m.	  	16,325

  

	II.	Calculation of Monthly Billing Demand for 2007: 

 The
twenty (20) highest load hours during July-August are hours 1-14, 16-17 and 20-23. 
  

											
	 No. from Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Base Obligation
 (kW)
	 	 EMC Native Load
minus EMC Base
 Obligation (kW)

	 1.
	 	7-25-07	 	5:00-6:00 p.m.	 	100,000	 	80,000	 	20,000
	 2.
	 	7-25-07	 	6:00-7:00 p.m.	 	102,000	 	80,000	 	22,000
	 3.
	 	7-25-07	 	4:00-5:00 p.m.	 	104,000	 	80,000	 	24,000
	 4.
	 	7-25-07	 	3:00-4:00 p.m.	 	106,000	 	80,000	 	26,000
	 5.
	 	7-24-07	 	5:00-6:00 p.m.	 	104,000	 	80,000	 	24,000
	 6.
	 	7-24-07	 	6:00-7:00 p.m.	 	102,000	 	79,000	 	23,000
	 7.
	 	7-24-07	 	4:00-5:00 p.m.	 	100,000	 	79,000	 	21,000
	 8.
	 	7-24-07	 	3:00-4:00 p.m.	 	100,000	 	79,000	 	21,000
	 9.
	 	8-1-07	 	5:00-6:00 p.m.	 	100,000	 	79,000	 	21,000
	 10.
	 	8-1-07	 	6:00-7:00 p.m.	 	100,000	 	78,000	 	22,000
	 11.
	 	8-1-07	 	4:00-5:00 p.m.	 	99,000	 	78,000	 	21,000

  

 - 2 - 









											
	 No. from Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Base Obligation
(kW)
	 	 EMC Native Load
minus EMC Base
Obligation
(kW)

	 12.
	 	8-1-07	 	3:00-4:00 p.m.	 	99,000	 	78,000	 	21,000
	 13.
	 	7-26-07	 	5:00-6:00 p.m.	 	99,000	 	100,000	 	0
	 14.
	 	7-26-07	 	6:00-7:00 p.m.	 	99,000	 	100,000	 	0
	 16.
	 	7-26-07	 	4:00-5:00 p.m.	 	98,000	 	100,000	 	0
	 17.
	 	7-24-07	 	3:00-4:00 p.m.	 	98,000	 	100,000	 	0
	 20.
	 	8-2-07	 	4:00-5:00 p.m.	 	98,000	 	100,000	 	0
	 21.
	 	8-2-07	 	3:00-4:00 p.m.	 	98,000	 	100,000	 	0
	 22.
	 	8-2-07	 	5:00-6:00 p.m.	 	98,000	 	100,000	 	0
	 23.
	 	8-2-07	 	6:00-7:00 p.m.	 	98,000	 	100,000	 	0
		 		 		 		 		 	 
		 	TOTAL	 		 		 		 	266,000
		 		 		 		 		 	 
		 	AVERAGE	 		 		 		 	13,30081
		 		 		 		 		 	 



	81	Monthly Billing Demand for each Month during 2007. 

  

 - 3 - 








 Attachment 7-8 
 Examples showing the calculation of 
 Monthly Billing Demand under Section 7.3.2.2

 The purpose of this attachment is to provide examples showing the calculation of the Monthly Billing Demand under Section 7.3.2.2
of the Agreement. 
 Example A 
 I. Assumptions: 
  

									
	 	  	 	  	 Day
	  	 Hour
	  	 Load
 (MW)

	 1.
	  	 Highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	5:00-6:00 p.m.	  	17,000
	 2.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	6:00-7:00 p.m.	  	16,975
	 3.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	4:00-5:00 p.m.	  	16,950
	 4.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	3:00-4:00 p.m.	  	16,925
	 5.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	5:00-6:00 p.m.	  	16,900
	 6.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	6:00-7:00 p.m.	  	16,875
	 7.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	4:00-5:00 p.m.	  	16,850
	 8.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,825
	 9.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	5:00-6:00 p.m.	  	16,800
	 10.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	6:00-7:00 p.m.	  	16,775
	 11.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	4:00-5:00 p.m.	  	16,750
	 12.
	  	 12th highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	3:00-4:00 p.m.	  	16,725
	 13.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	5:00-6:00 p.m.	  	16,700
	 14.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	6:00-7:00 p.m.	  	16,675
	 15.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2012
	  	6-26-12	  	4:00-5:00 p.m.	  	16,650
	 16.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	9:00-10:00 a.m.	  	16,575
	 19.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	10:00-11:00 a.m.	  	16,550









									
	 	  	 	  	 Day
	  	 Hour
	  	 Load
 (MW)

	 20.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	4:00-5:00 p.m.	  	16,525
	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	3:00-4:00 p.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	5:00-6:00 p.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	6:00-7:00 p.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	3:00-4:00 p.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	4:00-5:00 p.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	2:00-3:00 p.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	1:00-2:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	5:00-6:00 p.m.	  	16,325
	 29.
	  	 29th highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	6:00-7:00 p.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	4:00-5:00 p.m.	  	16,325

 Annual Planning Period is May through September 
 II. Calculation of Monthly Billing Demand for 2012: 
 The twenty (20) highest load hours during the Summer Period are hours 1-17 and 20-22 
  

											
	 No. from Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
 Requirements
 Resources
 (kW)
	 	 EMC Native Load
 minus EMC Partial
 Requirements
 Resources
 (kW)

	 1.
	 	7-25-12	 	5:00-6:00 p.m.	 	120,000	 	100,000	 	20,000
	 2.
	 	7-25-12	 	6:00-7:00 p.m.	 	120,000	 	100,000	 	20,000
	 3.
	 	7-25-12	 	4:00-5:00 p.m.	 	120,000	 	100,000	 	20,000
	 4.
	 	7-25-12	 	3:00-4:00 p.m.	 	120,000	 	100,000	 	20,000
	 5.
	 	7-24-12	 	5:00-6:00 p.m.	 	115,000	 	100,000	 	15,000
	 6.
	 	7-24-12	 	6:00-7:00 p.m.	 	115,000	 	100,000	 	15,000
	 7.
	 	7-24-12	 	4:00-5:00 p.m.	 	115,000	 	100,000	 	15,000

  

 - 2 - 









											
	 No. from Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements
 Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
 Resources
 (kW)

	 8.
	 	7-24-12	 	3:00-4:00 p.m.	 	115,000	 	100,000	 	15,000
	 9.
	 	8-1-12	 	5:00-6:00 p.m.	 	110,000	 	100,000	 	10,000
	 10.
	 	8-1-12	 	6:00-7:00 p.m.	 	110,000	 	100,000	 	10,000
	 11.
	 	8-1-12	 	4:00-5:00 p.m.	 	110,000	 	100,000	 	10,000
	 12.
	 	8-1-12	 	3:00-4:00 p.m.	 	110,000	 	100,000	 	10,000
	 13.
	 	7-26-12	 	5:00-6:00 p.m.	 	105,000	 	100,000	 	5,000
	 14.
	 	7-26-12	 	6:00-7:00 p.m.	 	105,000	 	100,000	 	5,000
	 15.
	 	6-26-12	 	4:00-5:00 p.m.	 	105,000	 	100,000	 	5,000
	 16.
	 	7-26-12	 	4:00-5:00 p.m.	 	105,000	 	100,000	 	5,000
	 17.
	 	7-24-12	 	3:00-4:00 p.m.	 	100,000	 	100,000	 	0
	 20.
	 	8-2-12	 	4:00-5:00 p.m.	 	100,000	 	100,000	 	0
	 21.
	 	8-2-12	 	3:00-4:00 p.m.	 	95,000	 	100,000	 	0
	 22.
	 	8-2-12	 	5:00-6:00 p.m.	 	95,000	 	100,000	 	0
		 		 		 		 		 	 
		 	TOTAL	 		 		 		 	200,000
		 		 		 		 		 	 
		 	AVERAGE	 		 		 		 	10,00082
		 		 		 		 		 	 

 Example B 
 I. Assumptions: 
  

									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 1.
	  	Highest Hourly Duke Schedule 1 Demand during 2012	  	1-25-12	  	7:00-8:00 a.m.	  	17,000
	 2.
	  	2nd highest Hourly Duke Schedule 1 Demand during
2012	  	1-25-12	  	8:00-9:00 a.m.	  	16,975



	82	Monthly Billing Demand for each Month during 2012. 

  

 - 3 - 









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 3.
	  	3rd highest Hourly Duke Schedule 1 Demand during
2012	  	1-25-12	  	9:00-10:00 a.m.	  	16,950
	 4.
	  	4th highest Hourly Duke Schedule 1 Demand during
2012	  	1-25-12	  	10:00-11:00 a.m.	  	16,925
	 5.
	  	5th highest Hourly Duke Schedule 1 Demand during
2012	  	1-24-12	  	7:00-8:00 a.m.	  	16,900
	 6.
	  	6th highest Hourly Duke Schedule 1 Demand during
2012	  	1-24-12	  	8:00-9:00 a.m.	  	16,875
	 7.
	  	7th highest Hourly Duke Schedule 1 Demand during
2012	  	1-24-12	  	9:00-10:00 a.m.	  	16,850
	 8.
	  	8th highest Hourly Duke Schedule 1 Demand during
2012	  	1-24-12	  	10:00-11:00 a.m.	  	16,825
	 9.
	  	9th highest Hourly Duke Schedule 1 Demand during
2012	  	2-1-12	  	7:00-8:00 a.m.	  	16,800
	 10.
	  	10th highest Hourly Duke Schedule 1 Demand during
2012	  	2-1-12	  	8:00-9:00 a.m.	  	16,775
	 11.
	  	11th highest Hourly Duke Schedule 1 Demand during
2012	  	2-1-12	  	9:00-10:00 a.m.	  	16,750
	 12.
	  	12th highest Hourly Duke Schedule 1 Demand during
2012	  	2-1-12	  	10:00-11:00 a.m.	  	16,725
	 13.
	  	13th highest Hourly Duke Schedule 1 Demand during
2012	  	12-21-12	  	8:00-9:00 a.m.	  	16,700
	 14.
	  	14th highest Hourly Duke Schedule 1 Demand during
2012	  	12-21-12	  	9:00-10:00 a.m.	  	16,675
	 15.
	  	15th highest Hourly Duke Schedule 1 Demand during
2012	  	12-21-12	  	10:00-11:00 a.m.	  	16,650
	 16.
	  	16th highest Hourly Duke Schedule 1 Demand during
2012	  	7-26-12	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	17th highest Hourly Duke Schedule 1 Demand during
2012	  	7-24-12	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	18th highest Hourly Duke Schedule 1 Demand during
2012	  	2-2-12	  	7:00-8:00 a.m.	  	16,575
	 19.
	  	19th highest Hourly Duke Schedule 1 Demand during
2012	  	2-2-12	  	8:00-9:00 a.m.	  	16,550
	 20.
	  	20th highest Hourly Duke Schedule 1 Demand during
2012	  	2-2-12	  	9:00-10:00 a.m.	  	16,525
	 21.
	  	21st highest Hourly Duke Schedule 1 Demand during
2012	  	2-2-12	  	10:00-11:00 a.m.	  	16,500
	 22.
	  	22nd highest Hourly Duke Schedule 1 Demand during
2012	  	1-18-12	  	9:00-10:00 a.m.	  	16,475
	 23.
	  	23rd highest Hourly Duke Schedule 1 Demand during
2012	  	1-18-12	  	10:00-11:00 a.m.	  	16,450
	 24.
	  	24th highest Hourly Duke Schedule 1 Demand during
2012	  	1-18-12	  	7:00-8:00 a.m.	  	16,425
	 25.
	  	25th highest Hourly Duke Schedule 1 Demand during
2012	  	1-18-12	  	8:00-9:00 a.m.	  	16,400
	 26.
	  	26th highest Hourly Duke Schedule 1 Demand during
2012	  	1-18-12	  	6:00-7:00 a.m.	  	16,375
	 27.
	  	27th highest Hourly Duke Schedule 1 Demand during
2012	  	1-18-12	  	11:00 a.m.-12:00 p.m.	  	16,350
	 28.
	  	28th highest Hourly Duke Schedule 1 Demand during
2012	  	1-17-12	  	8:00-9:00 a.m.	  	16,325
	 29.
	  	29th highest Hourly Duke Schedule 1 Demand during
2012	  	1-17-12	  	9:00-10:00 a.m.	  	16,300
	 30.
	  	30th highest Hourly Duke Schedule 1 Demand during
2012	  	1-17-12	  	10:00-11:00 a.m.	  	16,325
	 31.
	  	Highest Hourly Duke Schedule 1 Demand during 2011	  	1-23-11	  	7:00-8:00 a.m.	  	17,000

  

 - 4 - 









									
	 	  	 	  	 Day
	  	 Hour
	  	 Load
 (MW)

	 32.
	  	2nd highest Hourly Duke Schedule 1 Demand during
2011	  	1-23-11	  	8:00-9:00 a.m.	  	16,975
	 33.
	  	3rd highest Hourly Duke Schedule 1 Demand during
2011	  	1-23-11	  	9:00-10:00 a.m.	  	16,950
	 34.
	  	4th highest Hourly Duke Schedule 1 Demand during
2011	  	1-23-11	  	10:00-11:00 a.m.	  	16,925
	 35.
	  	5th highest Hourly Duke Schedule 1 Demand during
2011	  	1-18-11	  	7:00-8:00 a.m.	  	16,900
	 36.
	  	6th highest Hourly Duke Schedule 1 Demand during
2011	  	1-18-11	  	8:00-9:00 a.m.	  	16,875
	 37.
	  	7th highest Hourly Duke Schedule 1 Demand during
2011	  	1-18-11	  	9:00-10:00 a.m.	  	16,850
	 38.
	  	8th highest Hourly Duke Schedule 1 Demand during
2011	  	1-18-11	  	10:00-11:00 a.m.	  	16,825
	 39.
	  	9th highest Hourly Duke Schedule 1 Demand during
2011	  	2-4-11	  	7:00-8:00 a.m.	  	16,800
	 40.
	  	10th highest Hourly Duke Schedule 1 Demand during
2011	  	2-4-11	  	8:00-9:00 a.m.	  	16,775
	 41.
	  	11th highest Hourly Duke Schedule 1 Demand during
2011	  	2-4-11	  	9:00-10:00 a.m.	  	16,750
	 42.
	  	12th highest Hourly Duke Schedule 1 Demand during
2011	  	2-4-11	  	10:00-11:00 a.m.	  	16,725
	 43.
	  	13th highest Hourly Duke Schedule 1 Demand during
2011	  	1-28-11	  	8:00-9:00 a.m.	  	16,700
	 44.
	  	14th highest Hourly Duke Schedule 1 Demand during
2011	  	1-28-11	  	9:00-10:00 a.m.	  	16,675
	 45.
	  	15th highest Hourly Duke Schedule 1 Demand during
2011	  	12-15-11	  	9:00-10:00 a.m.	  	16,650
	 46.
	  	16th highest Hourly Duke Schedule 1 Demand during
2011	  	12-16-11	  	9:00-10:00 a.m.	  	16,625
	 47.
	  	17th highest Hourly Duke Schedule 1 Demand during
2011	  	12-15-11	  	10:00-11:00 a.m.	  	16,600
	 48.
	  	18th highest Hourly Duke Schedule 1 Demand during
2011	  	7-18-11	  	5:00-6:00 p.m.	  	16,575
	 49.
	  	19th highest Hourly Duke Schedule 1 Demand during
2011	  	7-18-11	  	6:00-7:00 p.m.	  	16,550
	 50.
	  	20th highest Hourly Duke Schedule 1 Demand during
2011	  	7-18-11	  	4:00-5:00 p.m.	  	16,525
	 51.
	  	21st highest Hourly Duke Schedule 1 Demand during
2011	  	7-18-11	  	3:00-4:00 p.m.	  	16,500
	 52.
	  	22nd highest Hourly Duke Schedule 1 Demand during
2011	  	1-18-11	  	11:00 a.m.-12:00 p.m.	  	16,475
	 53.
	  	23rd highest Hourly Duke Schedule 1 Demand during
2011	  	1-18-11	  	6:00-7:00 a.m.	  	16,450
	 54.
	  	24th highest Hourly Duke Schedule 1 Demand during
2011	  	2-5-11	  	8:00-9:00 a.m.	  	16,425
	 55.
	  	25th highest Hourly Duke Schedule 1 Demand during
2011	  	2-5-11	  	9:00-10:00 a.m.	  	16,400
	 56.
	  	26th highest Hourly Duke Schedule 1 Demand during
2011	  	1-20-11	  	8:00-9:00 a.m.	  	16,375
	 57.
	  	27th highest Hourly Duke Schedule 1 Demand during
2011	  	1-20-11	  	9:00-10:00 a.m.	  	16,350
	 58.
	  	28th highest Hourly Duke Schedule 1 Demand during
2011	  	1-21-11	  	7:00-8:00 a.m.	  	16,325
	 59.
	  	29th highest Hourly Duke Schedule 1 Demand during
2011	  	1-21-11	  	8:00-9:00 a.m.	  	16,300
	 60.
	  	30th highest Hourly Duke Schedule 1 Demand during
2011	  	1-21-11	  	9:00-10:00 a.m.	  	16,325

  

 - 5 - 








 Annual Planning Period is October through April 
 The twenty (20) highest load hours during the Winter Period are hours 1-12 and 18-22 in 2012 and hours 45-47 in 2011. 
 II. Calculation of Monthly Billing Demand for 2012: 
  

											
	 No. from
 Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements
 Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
 Resources
 (kW)

	 1.
	 	1-25-12	 	7:00-8:00 a.m.	 	120,000	 	100,000	 	20,000
	 2.
	 	1-25-12	 	8:00-9:00 a.m.	 	120,000	 	100,000	 	20,000
	 3.
	 	1-25-12	 	9:00-10:00 a.m.	 	120,000	 	100,000	 	20,000
	 4.
	 	1-25-12	 	10:00-11:00 a.m.	 	120,000	 	100,000	 	20,000
	 5.
	 	1-24-12	 	7:00-8:00 a.m.	 	115,000	 	100,000	 	15,000
	 6.
	 	1-24-12	 	8:00-9:00 a.m.	 	115,000	 	100,000	 	15,000
	 7.
	 	1-24-12	 	9:00-10:00 a.m.	 	115,000	 	100,000	 	15,000
	 8.
	 	1-24-12	 	10:00-11:00 a.m.	 	115,000	 	100,000	 	15,000
	 9.
	 	2-1-12	 	7:00-8:00 a.m.	 	110,000	 	100,000	 	10,000
	 10.
	 	2-1-12	 	8:00-9:00 a.m.	 	110,000	 	100,000	 	10,000
	 11.
	 	2-1-12	 	9:00-10:00 a.m.	 	110,000	 	100,000	 	10,000
	 12.
	 	2-1-12	 	10:00-11:00 a.m.	 	110,000	 	100,000	 	10,000
	 45.
	 	12-15-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 46.
	 	12-16-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 47.
	 	12-15-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 18.
	 	2-2-12	 	7:00-8:00 a.m.	 	105,000	 	100,000	 	5,000
	 19.
	 	2-2-12	 	8:00-9:00 a.m.	 	100,000	 	100,000	 	0
	 20.
	 	2-2-12	 	9:00-10:00 a.m.	 	100,000	 	100,000	 	0
	 21.
	 	2-2-12	 	10:00-11:00 a.m.	 	95,000	 	100,000	 	0
	 22.
	 	1-18-12	 	9:00-10:00 a.m.	 	95,000	 	100,000	 	0
		 		 		 		 		 	 
		 	TOTAL	 		 		 		 	200,000
		 		 		 		 		 	 
		 	AVERAGE	 		 		 		 	10,00083
		 		 		 		 		 	 



	83	Monthly Billing Demand for each Month during 2012. 

  

 - 6 - 








 ATTACHMENT 7-9 
 Demand Rate Adjustment Percentage and Annual Percentage 
 This attachment provides the formulas to be used for calculating
the Demand Rate Adjustment Percentage and Annual Percentage for each calendar year beginning January 1, 2011. 
 The Demand Rate Adjustment Percentage
shall equal the Production Capacity Revenue Requirement Adjustment divided by the Original Production Capacity Revenue Requirement, but not less than zero. 
 Where 
 Production Capacity Revenue
Requirement Adjustment = (Annual Percentage – 4%) * (Original Production Capacity Revenue Requirement + Original Energy Revenue Requirement) 
 And 
 Annual Percentage shall equal the product of the System Gross Plant Difference and the Fixed Charge Rate,
divided by the sum of Original Production Capacity Revenue Requirement and Original Energy Revenue Requirement. For purposes of calculating the Production Capacity Revenue Requirement Adjustment, the Annual Percentage shall be a maximum of 10%.

 System Gross Plant Difference shall equal EMC Plant in Service less NC Retail Plant in Service. (May be positive or negative.) System Gross Plant
Difference shall be decreased as necessary to eliminate differences between EMC Plant in Service and NC Retail Plant in Service related to timing or method of recovery of plant costs (e.g., plant differences due to recovery of construction period
financing costs through inclusion of construction work in progress in rate base). 
 Fixed Charge Rate shall equal
10%. 
 EMC Plant in Service shall equal the average of the total ending balance of Production Plant, General Plant and Intangible Plant according to
Schedule 1 of this Agreement, for the calendar year for which the Production Capacity Revenue Requirement calculation is prepared and total ending balance of Production Plant, General Plant and Intangible Plant according to Schedule 1 of this
Agreement for the previous calendar year calculation of the Production Capacity Revenue Requirement. 
 NC Retail Plant in Service shall equal the sum
of Duke Power Retail Plant in Service and Nantahala Retail Plant in Service, which shall be determined from Company records supporting the total Electric Plant in Service amount on Schedule 3 of NCUC Form E.S.-1 for the 12 month calendar period
corresponding to the Production Capacity Revenue Requirement calculation used for calculating the EMC Plant in Service. 







 Duke Power Retail Plant in Service shall equal the average of the two December balances for the total of
Production, General and Intangible plant amounts included in the total Electric Plant in Service monthly amounts shown on Schedule 3 of NCUC Form E.S.-1 for Duke Power. 
 Nantahala Retail Plant in Service shall equal the average of the two December balances for the total of Production, General and Intangible plant amounts included in the total Electric Plant in Service monthly
amounts shown on Schedule 3 of NCUC Form E.S.-1 for Nantahala Power & Light. 
 Original Production Capacity Revenue Requirement shall equal
the Production Capacity Revenue Requirement before consideration of any adjustments pursuant to Section 7.3.2.3 of the Agreement. 
 Original Energy
Revenue Requirement shall equal the sum of F for purposes of calculating the Fuel Rate in Schedule 1 and Variable Non-Fuel Production Operation and Maintenance Expense for purposes of calculating the Variable O&M Rate in Schedule 1.

  

 - 2 - 








 Attachment 7-10 
 Example of Demand Rate Adjustment Percentage and Annual Percentage 
 Note: EMC and NC Retail Plant in Service
values are actuals for 2004. 
 CASE WITH NO ADJUSTMENT WARRANTED— 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant (“timing” adjusted)	  	$	11,509,514	  	$	11,509,514	 	 	NC Retail = Attachment 7-10, Page 4, Line 10
	 5
	  	System Gross Plant Difference	  			  	$	—  	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	—  	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	0.00	%	 	 (Line 7 / Line 3)
 No adjustment occurs since below 4%
impact


 Note: EMC Plant in Service values are actuals for 2004, but NC Retail Plant in Service values have been reduced
for purpose of demonstration. 
 CASE WITH NO ADJUSTMENT WARRANTED— 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant (“timing” adjusted)	  	$	10,618,079	  	$	11,509,514	 	 	NC Retail = Attachment 7-10, Page 4, Line 10
	 5
	  	System Gross Plant Difference	  			  	$	891,435	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	89,143	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	2.96	%	 	 (Line 7 / Line 3)
 No adjustment occurs since below 4%
impact









 ADJUSTMENT WARRANTED 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant	  	$	9,729,655	  	$	11,509,514	 	 	
	 5
	  	System Gross Plant Difference	  			  	$	1,779,859	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	177,986	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	5.91	%	 	 (Line 7 / Line 3)
 Since Annual Percentage is in excess
of 4%,
 adjustment to Demand Rate is needed.

	 9
	  	Demand Rate Adjustment Percentage	  			  	 	3.24	%	 	[(Line 8 - 4%) x Line 3] / Line 1
	 10
	  	Demand Rate per Section 7.3.2.1	  			  	$	117.53	 	 	
	 11
	  	Demand Rate as adjusted per Section 7.3.2.3	  			  	$	113.72	 	 	Line 10 x (100% - Line 9)

  

 - 2 - 








 ADJUSTMENT WARRANTED (but limited) 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant	  	$	8,368,409	  	$	11,509,514	 	 	
	 5
	  	System Gross Plant Difference	  			  	$	3,141,105	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	314,110	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	10.44	%	 	 (Line 7 / Line 3)
 Since Annual Percentage is in excess
of 4%,
 adjustment to Demand Rate is needed, but is
 limited to
maximum of 6% of total unadjusted
 revenue requirements.

	 9
	  	Demand Rate Adjustment Percentage	  			  	 	10.18	%	 	[(Line 8* - 4%) x Line 3] / Line 1
	 10
	  	Demand Rate per Section 7.3.2.1	  			  	$	117.53	 	 	
	 11
	  	Demand Rate as adjusted per Section 7.3.2.3	  			  	$	105.57	 	 	Line 10 x (100% - Line 9)



	*	maximum of 10% 

  

 - 3 - 








 (Amounts from Quarterly NCUC Form E.S.-1, Schedule 3, for 12ME 2004) 
  

																	
	 	  	 (Dollars in thousands)
	 	System Gross Electric Plant in Service for Determination of NC Retail Plant in Service
	 	  	 	 	Duke Power	 	Nantahala	 	Total NC Retail
	 	  	 	 	Beginning	 	Ending	 	Beginning	 	Ending	 	Beginning	 	Ending	 	Average
	 1
	  	Plant in Service	 	18,980,402	 	19,683,592	 	324,710	 	334,880	 	19,305,112	 	20,018,472	 	19,661,792
		  	Components (data from Company records):	 		 		 		 		 		 		 	
	 2
	  	Production Plant	 	9,257,448	 	9,666,832	 	39,399	 	39,263	 	9,296,847	 	9,706,095	 	9,501,471
	 3
	  	Nuclear Fuel (gross)	 	816,874	 	769,178	 		 		 	816,874	 	769,178	 	793,026
	 4
	  	Total Production Plant	 	10,074,322	 	10,436,010	 	39,399	 	39,263	 	10,113,721	 	10,475,273	 	10,294,497
	 5
	  	Transmission Plant	 	1,745,408	 	1,819,243	 	92,489	 	91,335	 	1,837,897	 	1,910,578	 	1,874,238
	 6
	  	Distribution Plant	 	5,978,416	 	6,312,889	 	168,040	 	181,129	 	6,146,456	 	6,494,018	 	6,320,237
	 7
	  	General Plant	 	973,070	 	902,246	 	20,232	 	18,603	 	993,302	 	920,849	 	957,076
	 8
	  	Intangible Plant	 	209,186	 	213,204	 	4,550	 	4,550	 	213,736	 	217,754	 	215,745
	 9
	  	Total (ties to Line 1)	 	18,980,402	 	19,683,592	 	324,710	 	334,880	 	19,305,112	 	20,018,472	 	19,661,792
		  		 		 		 		 		 	 	 	 	 	 
	 10
	  	 Total of Production/General/Intangible Plant for use in Annual Percentage calculation
	 		 		 		 		 	11,320,759	 	11,613,876	 	11,467,318
		  		 		 		 		 		 	 	 	 	 	 

  

																			
	  	  	 (Dollars in thousands)
	 	NC Retail
Plant in
Service	 	EMC Plant in Service - Amounts from
Schedule 1 for 2004	 	EMC Plant
in Service	 	System
Gross Plant
Difference	 	Adjustment
for Timing
Difference	 	Adjusted
System
Gross Plant
Difference
	 	  	 	 	 	 	Beginning	 	Ending	 	Average	 	 	 	 	 	 	 	 
	 1
	  	Plant in Service	 		 		 		 		 		 		 		 	
		  	 Components (data from Company records):
	 		 		 		 		 		 		 		 	
	 2
	  	Production Plant	 	9,501,471	 	9,339,044	 	9,748,291	 	9,543,668	 	9,543,668	 	42,197	 	42,197	 	—  
	 3
	  	Nuclear Fuel (gross)	 	793,026	 	816,874	 	769,178	 	793,026	 	793,026	 	—  	 		 	—  
	 4
	  	Total Production Plant	 	10,294,497	 	10,155,918	 	10,517,469	 	10,336,694	 	10,336,694	 	42,197	 	42,197	 	—  
	 5
	  	Transmission Plant	 		 		 		 		 		 		 		 	
	 6
	  	Distribution Plant	 		 		 		 		 		 		 		 	
	 7
	  	General Plant	 	957,076	 	993,303	 	920,849	 	957,076	 	957,076	 	—  	 		 	—  
	 8
	  	Intangible Plant	 	215,745	 	213,736	 	217,753	 	215,745	 	215,745	 	—  	 		 	—  
	 9
	  	Total (ties to Line 1)	 		 		 		 		 		 		 		 	
	 10
	  	 Total of Production/General/Intangible Plant for use in Annual Percentage calculation
	 	11,467,318	 	11,362,957	 	11,656,071	 	11,509,517	 	11,509,515	 	42,197	 	42,197	 	

  

 - 4 - 








 Attachment 8-1 
 (Part I of II) 
 TERMS AND CONDITIONS 
 FOR THE SCHEDULING OF POWER 
 SUPPLIED BY NORTH CAROLINA 
 ELECTRIC MEMBERSHIP CORPORATION 
 TO
ITS INDEPENDENT MEMBERS 







 All NCEMC Committed Resources associated with the Wholesale Power Supply Agreement between the Seller and
the Buyer are governed by and subject to all of the terms and conditions in this Exhibit, unless a specific Resource Summary Attachment explicitly provides otherwise. Unless defined in this Exhibit, all capitalized terms used herein shall have the
respective meanings set forth as Article One of the Wholesale Power Supply Agreement. 
 General Principles 
  

	1.	Buyer is responsible for planning the way it chooses to use any Capacity or Energy delivered pursuant to one of the Resource Summary Attachments governed by this Exhibit. As a part
of the Wholesale Power Supply Agreement, the Parties have agreed to a set of Resource Summary Attachments that collectively are intended to represent a financial approximation of an allocation of the NCEMC Committed Resources on the Effective Date.


  

	2.	For any hour of delivery, Seller will optimize resources around final dispatch for the combined load of all of Seller’s Participating Members, plus the schedules of the Buyer
and other Independent Members. 

  

	3.	Buyer will pay Seller charges for Energy and the delivery of Energy to the Interface Point under terms specified in Resource Summary Attachments and terms specified elsewhere in
this Agreement including but not limited to Sections 2.4, 2.12 and Article Five. 

 Delivery of Allocated Resources 
  

	4.	Energy Scheduled from Buyer’s Independent Member Allocation is delivered to the Interface Point. The cost and expense of all transmission services, including ancillary services
and losses, from the Interface Point are the sole responsibility of Buyer. 

  

	5.	Seller will be deemed the provider of the resources needed for the purposes of tagging and for the designation of resources under the applicable tariffs of the Transmission
Provider(s) selected by Buyer. 

 Scheduling by Buyer 
  

	6.	All Schedules from Buyer for each Independent Member Allocation will be in whole MWs and may not exceed the IM Allocation MW detailed on the Resource Summary Attachment.


  

	7.	Buyer will submit a separate Schedule in conformance with this Exhibit S by System by resource up to the Maximum Scheduling Limit by System, as further described in Paragraph 23 of
this Exhibit S. 

  

	8.	Buyer will be responsible for scheduling and arranging for the delivery of its SEPA allocation. 

  

 - 2 - 









	9.	For any Independent Member Allocation that is designated as producing Must-Take Energy, Buyer is required to Schedule for every hour of every day of the Delivery Period its full
Must-Take Energy obligation from such a resource, and may not amend or reduce its Schedule for that Energy: provided, however, that to the extent that Seller’s obligation to purchase Must-Take Energy from a resource designated as producing
Must-Take Energy is reduced in any hour, Buyer’s hourly Must-Take Energy obligation shall be adjusted by the ratio of Seller’s hourly Must-Take Energy obligation to the Resource Capacity, rounded to whole MWs. The Buyer shall not be
entitled to Schedule Must-Take Energy in an hour in amounts, which exceed the Buyer’s adjusted Must-Take Energy obligation for that hour. 

  

	10.	Buyer is obligated to Schedule resources in accordance with the terms and conditions provided in the Resource Summary Attachments consistent with the minimum run times in the
contracts pertaining to Seller’s purchased and/or owned resources, and Seller will use its good faith efforts to accommodate Buyer’s Schedules that do not meet the minimum run time requirements, but only so long as meeting such
non-conforming Schedules would not likely result in additional costs to Seller or any of its Participating Members. 

  

	11.	Except with respect to Buyer’s Independent Member Allocations that supply Must-Take Energy, Buyer is not obligated to Schedule its Independent Member Allocations consistent
with the minimum volumes in the power supply contracts of Seller that are in force on the Independent Member Effective Date. 

  

	12.	By 7:00 a.m. EPT each day Buyer must provide Seller with an hourly forecast of its load by System for the following day. 

  

	13.	The Buyer may Schedule its resources consistent with the table below. Day-ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intra-day Schedules are
those that are requested after the 8:00 a.m. EPT deadline above. All Schedule changes must occur at the top of the hour. Intra-day Schedule changes require two (2) hours advance notice. 

  

			
	 Scheduling
Changes

	 Day Ahead
	 	 Intra-Day

		
	Unlimited changes up to the IM Allocation MW identified in the Resource Summary Attachment for each resource in whole MWs.	 	Up to two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative maximum of 10% each hour. Additional
changes will be accommodated on a best efforts basis.

  

 - 3 - 








 Scheduling by Seller 
  

	14.	Seller is not obligated to meet Buyer’s final Schedule using the NCEMC Committed Resources associated with the Independent Member Allocations Scheduled by Buyer.


  

	15.	Seller will accept the risk and/or benefit resulting from differences in the cost of resources used to provide Buyer Energy in accordance with its Schedule(s), and the costs Seller
would have incurred had it used NCEMC Committed Resources to meet Buyer’s Schedule of the Scheduled resource(s). 

  

	16.	Should Seller acquire an alternate resource, rather than use an NCEMC Committed Resource to serve Buyer’s Schedule, and that alternate resource is curtailed, Buyer’s
Schedule will be maintained and any penalty, benefit or curtailment will be borne by Seller. 

  

	17.	Should all or any portion of NCEMC Committed Resources that have been Scheduled by Seller and Buyer to meet Buyer’s Schedule in any given hour be interrupted, then Seller shall
try to identify available alternate resources which Seller, in its sole discretion, determines are reasonably priced and suitable to meet Seller’s needs. If Seller determines that such alternate resources are available, Seller may maintain the
Scheduled deliveries to Buyer but at a price to be determined by Seller and communicated to Buyer. If no alternate resources are available to Seller, Buyer’s Schedule will be curtailed. All damages recovered by Seller from the Person
responsible for the interruption in service will be shared with Buyer and every other Member similarly affected by such interruption in service. 

 Operations and Planning 
  

	18.	Buyer will provide Seller with a real time telemetered signal of Buyer’s load for Seller’s use, for purposes of determining when to start and stop the dynamic schedule,
and to Schedule certain Must-Take Energy requirements of NCEMC Committed Resources. 

  

	19.	Seller shall provide and inform the Buyer on each Thursday by 1:00 p.m. EPT of the projected amount of Energy available hourly by Independent Member Allocation by System for
Scheduling by Buyer for the following Saturday through Friday period, including the amount of Must-Take Energy that will be delivered and must be taken hourly. 

  

	20.	By 8:00 a.m. EPT each day, Buyer shall provide an hourly forecast of its Native Load by System for the next seven (7) days. For purposes of this Exhibit S, “Native
Load” shall mean only the load of Buyer’s members. This load forecast will be used by Seller to calculate the hourly Energy available from the Independent Member Allocations that are available to be Scheduled for a given interval of time.


  

	21.	Buyer shall provide Seller on each Thursday by 4:00 p.m. EPT, a projected hourly Schedule of all the Independent Member Allocations governed by this Agreement for the following
Saturday through Friday period. 

  

 - 4 - 









	22.	Seller and Buyer agree on the following checkout and verification process: 

 As soon as practical after midnight, confirm hourly Schedules, energy flows and energy charges by resource and daily totals; 
 Provide a contact person each Business Day for the following: 
 Resolve issues that remain unresolved;

 Perform month-to-date confirmations of hourly Schedules, energy flows and energy charges by resource and daily totals; 
 Finalize monthly checkouts by the second Business Day of the following month; and Coordinate any true-ups that may be required. 
  

	23.	For Buyers having loads in more than one System, Buyer will provide at the Independent Member Election Date and on July 1of each subsequent year, a forecast of the percentage
of its retail load in each System. (The sum of the percentages must equal 100%). The Maximum Scheduling Limit by System for the following calendar year will be calculated by multiplying the percentage of Buyer’s retail load in each System times
the total of Buyer’s Independent Member Allocations for the following calendar year. 

  

 - 5 - 








 Attachment 8-1 
 (Part II of II) 
 TERMS AND CONDITIONS 
 FOR OBTAINING TRANSMISSION 
 SERVICES ADEQUATE TO DELIVER 
 FROM THE INTERFACE POINTS 
 ESTABLISHED UNDER THE 
 WHOLESALE POWER SUPPLY AGREEMENT 
 OF NCEMC FOR SALES TO 
 ITS INDEPENDENT MEMBERS 
  

 - 6 - 








 General Principles and Responsibilities for Transmission: All Resource Summary Attachments associated with
the Wholesale Power Supply Agreement between Seller and Buyer are governed by and subject to the terms and conditions in this Exhibit unless a specific Resource Summary Attachment explicitly provides otherwise. For purposes of this Exhibit, the
Wholesale Power Supply Agreement and each Resource Summary Attachment governed by this Exhibit, the term “Acceptable Transmission Service” means the level of service available at any point in time that is equal to or better than that level
of service currently defined as “Network Integration Transmission Service” under the Open Access Transmission Tariff of the System to which Buyer’s distribution system is physically interconnected, and if connected to more than one
System, then Buyer must have Acceptable Transmission Service for each Interface Point. 
 The following terms for transmission service apply to each Resource
Summary Attachment included as a part of this Agreement. All of these terms assume that the current Open Access Transmission Tariff environment in force on the Effective Date remains in force, without modification or amendment. The Parties hereto
agree that any amendment, modification or change to that tariff or the regulatory environment for the wholesale electric industry, whether by regulation, regulatory action, statute, judicial action, executive decision or order, or otherwise, may
require modification of this Exhibit to restore to Buyer and Seller the benefits that each intended. Such amendments, modifications or changes would include, without limitation, any changes or modifications of the wholesale electric industry
environment based on the Standard Market Design, or the restructuring of the transmission systems or the regulatory oversight of same. If the Parties fail to reach agreement on modifications of this Exhibit, the dispute shall be subject to
arbitration under the Wholesale Power Supply Agreement. 
 Buyer is responsible for planning for and scheduling the receipt of capacity and energy to be
delivered to Buyer. Buyer will be responsible for negotiating, making and keeping in force one or more transmission agreements with the Transmission Provider(s) necessary to perform its obligations under the Wholesale Power Supply Agreement. At a
minimum, Buyer will negotiate, make and keep in force its own Network Integration Service Agreement (“NITSA”) and its own Network Operating Agreement (“NOA”). 
 Subject to and contingent upon the concurrence and agreement of each affected Transmission Provider, the RUS, and the Federal Energy Regulatory Commission (“FERC”), the Parties further agree: 
  

	1.	Buyer is responsible for serving its own load. It will do so through contracts with Seller, along with other resources Buyer will acquire. 

  

	2.	Buyer will have its own transmission agreement(s) with each and any Transmission Provider(s) whose services are needed to move capacity or energy from any Interface Point of the
System(s) to which Buyer’s distribution system is physically interconnected. 

  

	3.	Buyer will negotiate its own NITSA and NOA. Seller will provide assistance with these negotiations as requested. The cost for this assistance will be charged to Buyer separately
from charges for Capacity and Energy billed under Article 5.1 of this Agreement. 

  

 - 7 - 









	4.	Seller will transfer the direct-assigned facilities used for that Buyer, if any, to Buyer’s NITSA once the same has become effective. 

  

	5.	Seller will provide Buyer with contractual rights that financially approximate the hypothetical assignment of a total amount of Seller’s owned and/or purchased resources,
calculated in accordance with the NCEMC Member Power Supply Resource Policy, for purposes of Buyer’s NITSA and NOA designations for energy delivered to the System served by the Transmission Provider with which Buyer has entered its NITSA and
NOA. 

  

	6.	If any need exists or arises to designate, in addition to the contracts with Seller, any other network resources in order to meet Buyer’s load in accordance with the tariffs or
other requirements of the Transmission Provider(s), Buyer has the responsibility to locate, identify and designate such other network resources. 

  

	7.	Buyer will have the obligation to satisfy the requirements of the applicable OATT, and purchase or self-supply, as applicable, any ancillary or other services needed or required to
serve its load. 

  

	8.	Buyer will coordinate with Seller or its scheduling agent under Exhibit S to this Wholesale Power Supply Agreement to assure that the proper schedule is in place each day for
Buyer’s scheduled amount of Energy related to each of Buyer’s Resource Summary Attachments that are governed by this Exhibit. 

  

	9.	In addition to the other responsibilities arising under this Exhibit, Buyer shall be solely liable for any energy imbalance settlement and any other settlements or liabilities to
which a Transmission Customer is exposed at and from the Interface Point(s). If Buyer causes Seller to incur energy imbalance charges, Buyer will reimburse Seller for any charges that Seller incurs. 

  

 - 8 - 








 PARTIAL REQUIREMENTS SERVICE AGREEMENT 
 BETWEEN 
 DUKE POWER COMPANY LLC 
 d/b/a DUKE ENERGY CAROLINAS, LLC 
 AND 
 RUTHERFORD ELECTRIC MEMBERSHIP CORPORATION 
 DATED AS OF MAY 12, 2006 







 TABLE OF CONTENTS 
  


					
	 	  	 	  	Page
	 Article 1 Definitions
	  	2
			
	       1.1
	  	 Definitions.
	  	2
			
	   1.2
	  	 Interpretation.
	  	20
			
	   1.3
	  	 Construction.
	  	20
		
	 Article 2 Term
	  	21
			
	   2.1
	  	 Effectiveness.
	  	21
			
	   2.2
	  	 Term.
	  	21
			
	   2.3
	  	 Termination.
	  	22
			
	   2.4
	  	 Absolute Nature of Termination.
	  	27
		
	 Article 3 Conditions Precedent to the Commencement Date
	  	27
			
	   3.1
	  	 Conditions Precedent to Duke’s Obligations.
	  	27
			
	   3.2
	  	 Conditions Precedent to EMC’s Obligations.
	  	28
			
	   3.3
	  	 Notice of Satisfaction of Conditions Precedent.
	  	29
			
	   3.4
	  	 Waiver of Condition Precedent.
	  	29
			
	   3.5
	  	 Commencement of Service; Failure of Condition Precedent.
	  	30
		
	 Article 4 Sale of Electric Capacity and Energy
	  	34
			
	   4.1
	  	 Classification of Services Provided.
	  	34
			
	   4.2
	  	 FFR Supplemental Service.
	  	34
			
	   4.3
	  	 Partial Requirements Service.
	  	37
			
	   4.4
	  	 Excepted Load.
	  	38
			
	   4.5
	  	 Good Title.
	  	38
			
	   4.6
	  	 Power Quality.
	  	38
		
	 Article 5 EMC Resources
	  	39
			
	   5.1
	  	 EMC Contract Resources (Commencement Date - December 31, 2010).
	  	39
			
	   5.2
	  	 EMC Contract Resources (January 1, 2011 - Termination of Agreement).
	  	40
			
	   5.3
	  	 No Duke Obligation for Customer Resources.
	  	43
			
	   5.4
	  	 New Customer Resources.
	  	43
		
	 Article 6 Priority of Service
	  	44









					
	       6.1
	  	 Interruption of FFR Supplemental Service and Partial Requirements Service.
	  	44
			
	   6.2
	  	 Curtailments of Load.
	  	44
			
	   6.3
	  	 Emergency Load Curtailment Program.
	  	44
			
	   6.4
	  	 Substitute Energy.
	  	45
			
	   6.5
	  	 Substitute Energy Costs.
	  	45
		
	 Article 7 Capacity and Energy Charges
	  	45
			
	   7.1
	  	 Charges During Commencement Date - December 31, 2006.
	  	45
			
	   7.2
	  	 Charges During January 1, 2007 – December 31, 2010.
	  	50
			
	   7.3
	  	 Charges Commencing January 1, 2011.
	  	51
			
	   7.4
	  	 Monthly Reserve Capacity Charges.
	  	53
			
	   7.5
	  	 Payment.
	  	54
			
	   7.6
	  	 Determination of EMC Capacity and Energy Demands.
	  	54
		
	 Article 8 Scheduling Agent Services
	  	55
			
	   8.1
	  	 Appointment of Duke as Scheduling Agent.
	  	55
			
	   8.2
	  	 Scheduling Policies.
	  	55
			
	   8.3
	  	 Protocols.
	  	55
			
	   8.4
	  	 Scheduling Agent Services (Commencement Date through December 31, 2010).
	  	55
			
	   8.5
	  	 Scheduling Agent Services (January 1, 2011 through Termination).
	  	56
			
	   8.6
	  	 New EMC Resources.
	  	57
			
	   8.7
	  	 Errors in Schedules
	  	57
			
	   8.8
	  	 EMC Responsibilities
	  	57
			
	   8.9
	  	 Duke’s Liability
	  	58
			
	   8.10
	  	 Termination Assistance Service
	  	58
		
	 Article 9 Transmission and Ancillary Services
	  	58
			
	   9.1
	  	 Delivery Obligations
	  	58
			
	   9.2
	  	 Transmission Arrangements
	  	58
			
	   9.3
	  	 Ancillary Services
	  	58
			
	   9.4
	  	 Regional Transmission Organization
	  	59
		
	 Article 10 Operating Committee
	  	60
			
	   10.1
	  	 Operating Committee
	  	60
			
	   10.2
	  	 Duties of the Operating Committee
	  	60









					
	 Article 11 Demand Side Management
	  	60
			
	       11.1
	  	 Availability of Demand Side Management Resource Programs
	  	60
			
	   11.2
	  	 Changes to Demand Side Management Resource Programs
	  	60
			
	   11.3
	  	 Credits
	  	61
			
	   11.4
	  	 Necessary Arrangements
	  	61
			
	   11.5
	  	 Start-Up Conditions
	  	61
			
	   11.6
	  	 Periodic Testing
	  	61
			
	   11.7
	  	 EMC Demand Side Management
	  	62
		
	 Article 12 Modification of This Agreement
	  	63
			
	   12.1
	  	 Unilateral Modification
	  	63
			
	   12.2
	  	 Mobile-Sierra Public Interest Standard
	  	63
			
	   12.3
	  	 Changes To Certain Charge Components
	  	63
			
	   12.4
	  	 Standard of Review for Permitted Changes
	  	64
			
	   12.5
	  	 Scope of Waiver
	  	64
		
	 Article 13 Billing and Payment
	  	64
			
	   13.1
	  	 Billing Period
	  	64
			
	   13.2
	  	 Billing Statements.
	  	64
			
	   13.3
	  	 Timeliness of Payment
	  	65
			
	   13.4
	  	 Netting of Payments
	  	65
			
	   13.5
	  	 Disputes and Adjustments of Statements
	  	65
			
	   13.6
	  	 Records and Audits
	  	66
		
	 Article 14 Dispute Resolution
	  	68
			
	   14.1
	  	 Arbitration
	  	68
			
	   14.2
	  	 Negotiation and Notice of Arbitration
	  	68
			
	   14.3
	  	 Individual, Joint or Consolidated Arbitration
	  	68
			
	   14.4
	  	 Selection of Arbitration Process
	  	69
			
	   14.5
	  	 Initiation of Arbitration.
	  	70
			
	   14.6
	  	 Arbitration Processes.
	  	70
			
	   14.7
	  	 Decision
	  	73
			
	     14.8
	  	 Expenses
	  	74
			
	   14.9
	  	 Effect of Dispute Resolution Procedures
	  	74









					
	       14.10
	  	 Confidentiality
	  	74
		
	 Article 15 Credit and Collateral Requirements
	  	74
			
	   15.1
	  	 Posting of Collateral
	  	74
			
	   15.2
	  	 Material Adverse Changes
	  	74
			
	   15.3
	  	 Continuing Nature of Collateral Requirement.
	  	75
			
	   15.4
	  	 Interest on Cash Used as Collateral
	  	75
			
	   15.5
	  	 Grant of Security Interest/Remedies
	  	75
			
	     15.6
	  	 Notice, Information
	  	76
			
	   15.7
	  	 Definitions.
	  	76
		
	 Article 16 Additional Terms
	  	78
			
	   16.1
	  	 Representations Warranties and Covenants.
	  	78
			
	   16.2
	  	 Assignment.
	  	81
			
	   16.3
	  	 Liability and Indemnification.
	  	82
			
	   16.4
	  	 Force Majeure
	  	83
			
	   16.5
	  	 Events of Default and Remedies.
	  	84
			
	   16.6
	  	 Confidential Information.
	  	86
			
	   16.7
	  	 Governmental Liabilities.
	  	87
			
	   16.8
	  	 Choice of Law
	  	88
			
	   16.9
	  	 Survival of Obligations
	  	88
			
	   16.10
	  	 Entire Agreement
	  	88
			
	   16.11
	  	 Cost Projections
	  	88
			
	   16.12
	  	 Unique Agreement
	  	89
			
	   16.13
	  	 No Transfer of Rights
	  	89
			
	   16.14
	  	 No Partnership
	  	89
			
	   16.15
	  	 Third Parties
	  	89
			
	   16.16
	  	 Waiver
	  	89
			
	   16.17
	  	 Time of Essence
	  	89
			
	   16.18
	  	 Headings
	  	90
			
	   16.19
	  	 Severability
	  	90
			
	   16.20
	  	 Counterparts
	  	90
			
	     16.21
	  	 No Public Announcement
	  	90









					
	       16.22
	  	 Notices
	  	90
			
	   16.23
	  	 No Dedication of the System
	  	91
			
	   16.24
	  	 Stranded Costs
	  	91
			
	   16.25
	  	 Electric Peak Load and Energy Information to be provided by EMC
	  	92
			
	   16.26
	  	 Demand and Energy Charge and Rate Information to be Provided by Duke
	  	92
			
	   16.27
	  	 Further Assurances
	  	92
			
	   16.28
	  	 Applicable Laws and Regulations
	  	92
			
	   16.29
	  	 Equitable Relief
	  	92
			
	   16.30
	  	 PURPA Assistance
	  	92
			
	   16.31
	  	 SERC and NERC Data Reporting and Compliance Assistance
	  	92

  

			
		  	 SCHEDULES

		
	1   	  	Annual Production Capacity and Energy Rates
		
		  	 ATTACHMENTS

		
	3-1	  	Calculation of the Excess Annual Capacity Charges in the Duke-Blue Ridge Agreement, Duke-Piedmont Agreement and Duke-Rutherford Agreement
		
	4-1	  	EMC’s Base Obligation and Fixed Forward Resource
		
	4-2	  	Calculation of Reduction to EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods
		
	4-3	  	Partial Reqirements Resources
		
	7-2	  	Calculation of the Monthly Demand Charges in the Duke-Blue Ridge Agreement, Duke-Piedmont Agreement and Duke-Rutherford Agreement
		
	7-3	  	Calculation of Rutherford Allocated Share of Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit
		
	7-4	  	Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy
Credit
		
	7-5	  	Example showing Calculations of Rutherford Energy Purchase Amounts and Rutherford Energy Credit Amount









			
	7-6	  	Example showing Calculations of EMC Group Energy Purchase Amounts and EMC Group Energy Credit Amount
		
	7-7	  	Example showing the calculation of Monthly Billing Demand under Section 7.2.2.2
		
	7-8	  	Examples showing the calculation of Monthly Billing Demand under Section 7.3.2.2
		
	7-9	  	Demand Rate Adjustment Percentage and Annual Percentage
		
	7-10	  	Example of Demand Rate Adjustment Percentage and Annual Percentage
		
	8-1I	  	Terms and Conditions for the Scheduling of Power Supplied by North Carolina Electric Membership Corporation to its Independent Members
		
	8-1II	  	Terms and Conditions for Obtaining Transmission Services Adequate to Deliver from the Interface Points Established under the Wholesale Power Supply Agreement of NCEMC for Sales to its
Independent Members
		
	8-2	  	SEPA Policies








 PARTIAL REQUIREMENTS SERVICE AGREEMENT 
 BETWEEN 
 DUKE POWER COMPANY LLC 
 d/b/a DUKE ENERGY CAROLINAS, LLC 
 AND 
 RUTHERFORD ELECTRIC MEMBERSHIP CORPORATION 
 THIS PARTIAL REQUIREMENTS SERVICE AGREEMENT, dated as of May 12, 2006, is entered into by and between Rutherford Electric Membership Corporation, a
corporation organized and existing under Article 2 of Chapter 117 of the General Statutes of North Carolina, together with any permitted successor or assignee (“EMC” or “Rutherford”), and Duke Power Company LLC, d/b/a Duke Energy
Carolinas, LLC, a limited liability company organized and existing under the laws of North Carolina, together with any permitted successor or assignee (“Duke”). Hereinafter, Duke and EMC are sometimes also referred to individually as a
“Party” or collectively as the “Parties.” 
 W I T N E S S E T H 
 WHEREAS, Duke is engaged in the business of generating, transmitting, and distributing electric capacity and energy in portions of the States of North
Carolina and South Carolina, and provides electric service to retail and wholesale customers; and 
 WHEREAS, EMC is an electric membership
corporation that provides retail electric service to its members in the State of North Carolina, and is authorized to purchase electric energy at wholesale for resale; and 
 WHEREAS, EMC is a member of North Carolina Electric Membership Corporation (“NCEMC”) and is a party to the WPSA; and 
 WHEREAS, EMC is a party to the SEPA Contract; and 
 WHEREAS, EMC is a party to the PPA; and 
 WHEREAS, EMC has elected to arrange independently from NCEMC for its future requirements
for electric capacity and energy in addition to those to which EMC has entitlements under existing contractual arrangements; and 
 WHEREAS,
EMC has reviewed its future needs for electric capacity and energy and Scheduling Agent Services and has determined that in order for EMC to provide for a portion of EMC’s Native Load, EMC is willing to purchase electric capacity and energy
from Duke and is also willing to purchase Scheduling Agent Services from Duke for the duration of, and subject to the terms of, this Agreement; and 







 WHEREAS, Duke is willing to plan and provide for the electric capacity and energy requirements needed to
meet a portion of EMC’s Native Load and to provide Scheduling Agent Services for the duration of, and subject to the terms of, this Agreement; and 
 WHEREAS, Duke and EMC have agreed to the terms and conditions upon which the sale of electric capacity and energy and provision of Scheduling Agent Services may be conducted between the Parties. 
 NOW THEREFORE, in consideration of the premises and the mutual representations, warranties and covenants set forth in this Agreement, and for other good
and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties, each intending to be legally bound, hereby agree as follows: 
 Article 1  
 Definitions 
 1.1 Definitions. 
 Defined terms in this Agreement are capitalized. The defined terms used in this
Agreement have the following meanings: 
 “Accounting Requirements” shall have the meaning specified in Section 15.7.

 “Administrator” shall mean the RUS Administrator. 
 “Adverse Ruling” shall have the meaning specified in Section 3.1(c). 
 “Affiliate”
means, with respect to any person, any other person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such person. For purposes of this definition, “control” when used with respect to any
person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing. 
 “Agreement” means this Partial Requirements Service Agreement, together with each
Schedule and Attachment, each as amended from time to time. 
 “Ancillary Services” means any and all ancillary services provided
by the Transmission Provider in connection with any Transmission Service arranged by EMC for the delivery of electric energy provided under this Agreement from the Delivery Point. 
 “Annual Capacity Factor” shall have the meaning specified in Section 4.3.3.1. 
 “Annual Capacity Price” shall have the meaning specified in Section 3.5.2.3.1, 3.5.2.3.2 or 3.5.2.3.3, as applicable. 
  

 2 








 “Annual Capacity Quantity” shall have the meaning specified in Sections 3.5.2.3.1, 3.5.2.3.2 or
3.5.2.3.3, as applicable. 
 “Annual Percentage” shall be calculated as shown on Attachment 7-9. 
 “Annual Planning Period” means, the period (as of the Commencement Date either May through September or October through April) designated in
the then most recent Duke Annual Plan (or the successor thereto) that Duke files with the NCUC as the period during which Duke’s annual peak load is projected to occur; provided, that in the event that NCUC ceases to require Duke to file or
filing becomes voluntary and Duke ceases to file the Duke Annual Plan (or a successor thereto) with the NCUC, “Annual Planning Period” shall mean the period (either May through September or October through April) in which Duke’s
annual peak load is projected to occur under the generation planning criteria for Duke’s Generation System used by Duke to meet Duke’s Native Load. 
 “Assignment for Security” shall have the meaning specified in Section 16.2.2. 
 “Bankrupt” means that the Defaulting Party or any guarantor of such Party: 
 (i) is dissolved (other than
pursuant to a consolidation, amalgamation or merger); 
 (ii) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become due; 
 (iii) makes a general assignment,
arrangement or composition with or for the benefit of its creditors; 
 (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditor’s rights, or a petition is presented for its winding-up or liquidation; 
 (v) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); 
 (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or substantially all of its assets; 
 (vii) has a secured party
take possession of all or substantially all of its assets, or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all of its assets; 
 (viii) causes or is subject to any event with respect to it which, under the applicable Laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (i) to (vii) inclusive; or 
  

 3 








 (ix) takes any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts. 
 “Bankruptcy Code” means Title 11 of the United States Code or any successor
thereto. 
 “Base Annual Capacity Charge” means the charge set forth in Section 3.5.2.3.4. 
 “Baseload Resources” means the Partial Requirements Resources identified as Baseload Resources in Attachment 4-3. 
 “Billing Dispute Notice” shall have the meaning specified in Section 13.5. 
 “Billing Period” means the period beginning on the Commencement Date and ending on the last Day of the Month in which the Commencement Date
occurred, and each succeeding Month thereafter. 
 “Blue Ridge” means Blue Ridge Electric Membership Corporation. 
 “Blue Ridge Energy Credit Amount” means the Blue Ridge Energy Credit Amount as determined in Section 7.1.5.9 of the Duke-Blue Ridge
Agreement. 
 “Blue Ridge Energy Purchase Amount” means the Blue Ridge Energy Purchase Amount as determined in Section 7.1.5.9
of the Duke-Blue Ridge Agreement. 
 “Business Day” means any Day other than Saturday, Sunday, or any Day on which the Federal
Reserve member banks are not open for business. 
 “Catawba Nuclear Station” means that certain nuclear power plant located near
Rock Hill in York County, South Carolina. 
 “CFC” shall have the meaning specified in Section 15.7. 
 “Claiming Party” shall have the meaning specified in Section 16.4. 
 “Claims” means all third party claims or actions, threatened or filed, and whether groundless, false, or fraudulent, that directly or
indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys’ fees, and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed
prior to or after the termination of this Agreement. 
 “CoBank” shall have the meaning specified in Section 15.7. 

“Combined Cycle Resources” means the Partial Requirements Resources identified as Combined Cycle Resources in Attachment 4-3.

 “Commencement Date” shall have the meaning specified in Section 2.1.1. 
 “Commercially Reasonable Efforts” means efforts which are reasonably within the contemplation of the Parties at the Effective Date; which
require the performing Party that is 
  

 4 








 acting in good faith to take action or expend funds reasonably in relation to the benefit to be obtained by the other
Party; and that require a level of effort which would be devoted by an independent entity reasonably in the electric utility industry in light of all of the relevant circumstances. 
 “Confidential Information” means any documents, analyses, compilations, studies, or other materials prepared by a Party or its Representatives
that contain or reflect either (a) any costs of Duke’s Generation System, including system average costs, System Incremental Costs, Territorial Incremental Costs, and Territorial Decremental Costs, or (b) written or oral data or
information that is privileged, confidential, or proprietary and is marked as “Confidential.” “Confidential Information” shall also mean all subsequently prepared documents, analyses, compilations, studies, or other materials by
a Party or its Representative that are derived from previously marked “Confidential” data or information. Notwithstanding the foregoing, information shall not be deemed Confidential Information if it: 
 (i) is a matter of public knowledge at the time of its disclosure or is thereafter published in or otherwise ascertainable from any source
available to the public without breach of this Agreement, 
 (ii) constitutes information which is obtained from a third party
(who or which is not an Affiliate of one of the Parties) other than by or as a result of unauthorized disclosure, or 
 (iii)
prior to the time of disclosure had been independently developed by the receiving Party or its Affiliates not utilizing improper means. 
 “Control Area” means an electric power system or combination of electric power systems to which a common automatic generation control scheme is applied in order to match the power output of the generators within the electric power
system and electric energy imported into the electric power system, with the load located within the electric power system. 
 “Cover
Costs” shall have the meaning specified in Section 6.4. 
 “CP&L” means Carolina Power & Light Company
(d/b/a Progress Energy Carolinas, Inc.). 
 “CPR” shall have the meaning specified in Section 14.1. 
 “Day” means a day, commencing at 00:00:00 Eastern Time of such calendar day and ending 23:59:59 Eastern Time of the same calendar day.

 “Debt Service Coverage Ratio” shall have the meaning specified in Section 15.7. 
 “Defaulting Party” shall have the meaning specified in Section 16.5.1. 
 “Delivery Points” means any available points on the Transmission System where electric energy is delivered for Transmission Service.

  

 5 








 “Demand Rate Adjustment Percentage” shall be calculated as shown on Attachment 7-9.

 “Demand Side Management Resource Programs” means the demand side management resource programs that Duke makes available to
Duke’s Native Load retail customers within the State of North Carolina under riders approved and on file with the NCUC, as such riders may be amended from time to time. 
 “Depreciation and Amortization Expense” shall have the meaning specified in Section 15.7. 
 “Dispatched Baseload Resources” means the Baseload Resources that Duke dispatches pursuant to Section 4.3.4. 
 “Dispatched Combined Cycle Resources” means the Combined Cycle Resources that Duke dispatches pursuant to Section 4.3.3. 
 “Disputed Amount” shall have the meaning specified in Section 13.5. 
 “Duke” shall have the meaning specified in the first paragraph hereof, provided that for purposes of this Agreement “Duke” shall not
include Duke Transmission and provided further, Duke intends to effectuate a name change to Duke Energy Carolinas, LLC and upon the effectiveness of such name change, references to “Duke” shall mean Duke Energy Carolinas, LLC. 

“Duke Annual Plan” means the Annual Report Duke is required to file with the NCUC in accordance with NCUC Rule R8-60 or successor
thereto. In the event Duke is no longer required to file the Annual Report with the NCUC or filing becomes voluntary, “Duke Annual Plan” shall mean the generation planning criteria for Duke’s Generation System used by Duke to meet
Duke’s Native Load. 
 “Duke-Blue Ridge Agreement” means the Partial Requirements Service Agreement between Duke and Blue
Ridge Electric Membership Corporation, dated as of May 12, 2006. 
 “Duke Hourly Energy Charge” shall have the meaning
specified in Section 7.1.5.1. 
 “Duke Hourly Reconciliation Charge” shall have the meaning specified in
Section 7.1.5.11. 
 “Duke Monthly Energy Charge” means, with respect to the period beginning on the Commencement Date and
continuing through December 31, 2006, the charge set forth in Section 7.1.5.1; with respect to the period January 1, 2007, through December 31, 2010, the charge set forth in Section 7.2.3; and with respect to the period
beginning January 1, 2011, and continuing through the termination of this Agreement, the charge set forth in Section 7.3.3. 
 “Duke Monthly Reconciliation Charge” shall have the meaning specified in Section 7.1.5.11. 
  

 6 








 “Duke Native Load” or “Duke’s Native Load” means the electric capacity and
energy demands imposed on Duke by its retail customers located within Duke’s Service Area, as such Service Area may be amended from time to time in accordance with Laws or pursuant to the requisite approvals of the Governmental Authorities that
have jurisdiction to regulate retail electric service within such Service Area, including by merger or acquisition, plus the demands of Duke’s wholesale power sales customers served under contracts with a firmness of supply equal to such retail
customers. 
 “Duke-Piedmont Agreement” means the Partial Requirements Service Agreement between Duke and Piedmont Electric
Membership Corporation, dated as of May 12, 2006. 
 “Duke-Rutherford Agreement” means this Agreement. 
 “Duke Reconciliation Amount” shall have the meaning specified in Section 7.1.5.11. 
 “Duke’s Generation Planning Practices” means the then-current generation planning practices of Duke that are reflected in the Duke Annual
Plan. 
 “Duke’s Generation System” means Duke’s owned or leased electric generating facilities and purchased power
resources the output of which are used to serve Duke’s Native Load located within the State of North Carolina, as such system may be amended from time to time by any means including by merger or acquisition. 
 “Duke Schedule 1 Demands” shall have the meaning specified in Schedule 1, Section I.B. 
 “Duke Total Hourly Energy Charge” shall have the meaning specified in Section 7.1.5.2. 
 “Duke Transmission” means Duke Electric Transmission, a division of Duke, or any successor thereto. 
 “Eastern Time” means the time in effect in Charlotte, North Carolina, whether Eastern Standard Time or Eastern Daylight Saving Time.

 “Effective Date” shall have the meaning specified in Section 2.1.1. 
 “EMC” or “Rutherford” shall have the meaning specified in the first paragraph of this Agreement. 
 “EMC Call Signal” shall have the meaning specified in Section 7.1.5.9. 
 “EMC Coincident Peak Demand” shall have the meaning specified in Section 3.5.2.3.5.1. 
 “EMC Contract Resources”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2010, shall
have the meaning specified in Section 5.1.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 5.2.1. 
  

 7 








 “EMC Demand Side Management Resource Programs” means the demand side management resource
programs that EMC makes available to EMC’s Native Load customers. 
 “EMC Excess Annual Capacity Quantity” shall have the
meaning specified in Section 3.5.2.3.5.1. 
 “EMC Group” means collectively Piedmont, Blue Ridge, and Rutherford. 

“EMC Group Annual Capacity Quantity” means the sum of: (i) the Annual Capacity Quantity set forth in Section 3.5.2.3 of this
Agreement; (ii) the Annual Capacity Quantity set forth in Section 3.5.2.3 of the Duke-Blue Ridge Agreement; and (iii) the Annual Capacity Quantity set forth in Section 3.5.2.3 of the Duke-Piedmont Agreement. 
 “EMC Group Call Signal” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Coincident Peak Demand” shall have the meaning specified in Section 3.5.2.3.5.3. 
 “EMC Group Combined Energy Credit Amount” means the sum of (i) the Blue Ridge Energy Credit Amount, (ii) the Piedmont Energy Credit
Amount, and (iii) the Rutherford Energy Credit Amount. 
 “EMC Group Combined Energy Purchase Amount” means the sum of
(i) the Blue Ridge Energy Purchase Amount, (ii) the Piedmont Energy Purchase Amount, and (iii) the Rutherford Energy Purchase Amount. 
 “EMC Group Combined Excess Annual Capacity Quantity” shall have the meaning specified in Section 3.5.2.3.5.2. 
 “EMC Group Combined Monthly Demand Quantity” shall have the meaning specified in Section 7.1.4.2. 
 “EMC Group Energy Credit Amount” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Energy
Purchase Amount” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Excess Annual Capacity Quantity”
shall have the meaning specified in Section 3.5.2.3.5.3. 
 “EMC Group Monthly Demand Quantity” shall have the meaning
specified in Section 7.1.4.3. 
 “EMC Group Native Load” means the sum of (i) the EMC Native Load under this Agreement,
(ii) the EMC Native Load under the Duke-Blue Ridge Agreement, and (iii) the EMC Native Load under the Duke-Piedmont Agreement. 
  

 8 








 “EMC Group Put Signal” shall have the meaning specified in Section 7.1.5.10. 

“EMC Group Reconciliation Amount” shall have the meaning specified in Section 7.1.5.12. 
 “EMC Group Total Hourly Energy Credit” shall have the meaning specified in Section 7.1.5.6. 
 “EMC Group’s Base Obligation” means the sum of (i) EMC’s Base Obligation under Section 4.2.2 of this Agreement,
(ii) EMC’s Base Obligation under Section 4.2.2 of the Duke-Blue Ridge Agreement, and (iii) EMC’s Base Obligation under Section 4.2.2 of the Duke-Piedmont Agreement. 
 “EMC Hourly Demand” shall have the meaning specified in Section 3.5.2.3.5.1. 
 “EMC Hourly Energy Credit” shall have the meaning specified in Section 7.1.5.5. 
 “EMC Monthly Demand Quantity” shall have the meaning specified in Section 7.1.4.1 
 “EMC Monthly Energy Credit” means, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006,
the credit set forth in Section 7.1.5.5. 
 “EMC Native Load” or “EMC’s Native Load” means the electric
capacity and energy demands imposed on EMC by its retail customers located within EMC’s Service Area, excluding any such demands that constitute Non-Duke Control Area Load or Excepted Load. 
 “EMC Peak Hour Billing Demand”, with respect to the period January 1, 2007 through December 31, 2010, shall have the meaning
specified in Section 7.2.2.2, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.2.2. 
 “EMC Put Signal” shall have the meaning specified in Section 7.1.5.9. 
 “EMC Scheduled Amount” shall have the meaning specified in Section 4.2.3. 
 “EMC’s Base Obligation” shall have the meaning specified in Section 4.2.2. 
 “Energy Cost” shall have the meaning specified in Section 4.3.3.3. 
 “Energy Imbalance Service” means the service provided under Schedule 4 of the Transmission Provider’s OATT. 
 “Equitable Defenses” means, with respect to a proceeding involving this Agreement, the discretion of a Governmental Authority to make or enter
an order of bankruptcy, insolvency, reorganization, or other ruling affecting creditors’ rights generally, or exercising other discretion committed to the court’s or agency’s equitable powers. 
 “Equity” shall have the meaning specified in Section 15.7. 
  

 9 








 “Event of Default” shall have the meaning specified in Section 16.5.1. 
 “Excepted Load” shall have the meaning specified in Section 4.4. 
 “Excess Annual Amount” means the quantity specified in Section 3.5.2.3.5. 
 “Excess Annual Capacity Charge” means the charge specified in Section 3.5.2.3.5. 
 “Excess Annual Capacity Price” shall have the meaning specified in Section 3.5.2.3.1, 3.5.2.3.2 or 3.5.2.3.3, as applicable. 

“Extension Term” shall have the meaning specified in Section 2.2.2. 
 “Federal Power Act” means the Federal Power Act, 16 U.S.C. §§791a-828c, as amended from time to time. 
 “FERC” means the Federal Energy Regulatory Commission or any successor agency that administers the Federal Power Act. 
 “FFR Supplemental Service” shall have the meaning specified in Sections 4.1 and 4.2. 
 “Firm Energy” means: electric energy which meets the Transmission Provider’s (or successor Transmission Provider’s) standards related
to character of service and firmness of supply, including standards that may require the designation of specific capacity sources, as such standards exist on the Effective Date or as they may be amended from time-to-time, such that EMC may:
(i) designate the PPA as a Network Resource or successor service designation under its Network Integration Transmission Service Agreement with Transmission Provider, or successor Transmission Provider; and (ii) satisfy applicable
requirements such that the Network Integration Transmission Service or successor service designation can be used to accept and deliver the electric energy pursuant to the highest firm transmission priority of such Transmission Provider; or
(iii) satisfy the standards of any successor Transmission Provider that might have the right to determine the standards for character of service and firmness of supply, including standards that may require the designation of specific capacity
sources, under which EMC may designate the PPA, such that the requirements of the highest firm transmission priority are met under its Network Integration Transmission Service Agreement (or as the nearest equivalent thereto remains available to EMC
under the successor Transmission Provider’s requirements). 
 “Firm Sales” means wholesale electric sales other than Non-Firm
Sales. 
 “Fitch Rating” means Fitch, Inc., a unit of Fimalac, S.A. 
 “Fixed Forward Resource” or “FFR Resource” means EMC’s contractual entitlements to electric capacity and energy under the PPA.

 “Force Majeure” shall have the meaning specified in Section 16.4. 
  

 10 








 “Fuel Rate”, with respect to the period January 1, 2007, through December 31, 2010,
shall have the meaning specified in Section 7.2.3.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.3.1. 

“Government” means the United States government. 
 “Governmental Authority” means any federal, state, local or other governmental, regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature,
rulemaking board, court, tribunal, arbitrating body, government-owned corporation or other governmental authority or department thereof. 
 “Governmental Charges” means all taxes, fees, assessments and other charges imposed by any Governmental Authority. 
 “Hour” means one of the twenty-four (24) clock hours in a Day. 
 “Hourly Fuel Charge”, with respect to the
period January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.3.1, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the
meaning specified in Section 7.3.3.1. 
 “Hourly Inter-EMC Transfer Reconciliation Charge” shall have the meaning specified in
Section 7.1.5.13. 
 “Hourly Variable O&M Charge”, with respect to the period January 1, 2007, through
December 31, 2010, shall have the meaning specified in Section 7.2.3.2, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the meaning specified in
Section 7.3.3.2. 
 “Initial Term” shall have the meaning specified in Section 2.2.1. 
 “Impasse Notice” shall have the meaning specified in Section 14.2. 
 “Interest Expense” shall have the meaning specified in Section 15.7. 
 “Interest Rate” means either (i) the Prime Rate plus two (2%) percent, or (ii) the maximum lawful rate permitted by applicable
Law, whichever is less. 
 “Interval” shall have the meaning specified in Sections 7.1.5.9 and 7.1.5.10, as applicable. 

“ITC” means an independent transmission company. 
 “ISO” means an independent system operator. 
 “kWh” means kilowatt-hour, a unit of
electric energy. 
 “kW” mean kilowatt. 
  

 11 








 “Law” means any law, rule, regulation, order, writ, judgment, decree, or other legal or
regulatory determination by a court, regulatory agency, or other Governmental Authority of competent jurisdiction. 
 “Legal
Proceeding” means any suit, hearing, or proceeding by or before any court or any Governmental Authority. 
 “Light Load
Periods” means any Hour during which EMC’s Base Obligation is reduced because certain of its entitlements to electric capacity and energy under the WPSA are reduced as a result of NCEMC’s Native Load in either of the CP&L east or
west Control Areas or Duke Control Area being insufficient to permit NCEMC to have access to its full contractual entitlement to electric capacity and energy from certain generation or purchased power resources. 
 (i) For each Hour beginning with the Commencement Date and continuing through December 31, 2010, or any portion thereof in which this
Agreement is in effect, Light Load Periods in the CP&L east and west Control Areas, only occur when NCEMC’s Native Load in such CP&L east and west Control Area is less than the contractual amount specified in the Service Obligation
Resources (“SORs”). The amount of any reduction in NCEMC’s entitlement to electric capacity and energy under the SORs is allocated to EMC in accordance with the WPSA. In the Duke Control Area, Light Load Periods only occur when a
generating unit at either the Catawba Nuclear Station or the McGuire Nuclear Station is off-line or de-rated and NCEMC’s Native Load in the Duke Control Area is less than 623.5 MWs. The amount of any reduction in NCEMC’s entitlement to
electric capacity and energy is allocated to EMC in accordance with the WPSA. 
 (ii) For each Hour beginning January 1,
2011, and continuing through the termination of this Agreement, Light Load Periods only occur when a generating unit at either the Catawba Nuclear Station or the McGuire Nuclear Station is off-line or de-rated and NCEMC’s Native Load in the
Duke Control Area is less than 623.5 MWs. The amount of any reduction in NCEMC’s entitlement to electric capacity and energy is allocated to EMC in accordance with the WPSA. 
 “Material Adverse Change” or “MAC” shall have the meaning specified in Section 15.2. 
 “Material Adverse Ruling” shall have the meaning specified in Section 2.3.2.2(c). 
 “Material Adverse Ruling Termination Date” shall have the meaning specified in Section 2.3.2.2. 
 “Maximum Demand Hour” shall have the meaning specified in Section 7.1.4.3. 
 “McGuire Nuclear Station” means that certain nuclear plant located in Huntersville, North Carolina. 
 “Month” means a calendar month, commencing at one (1) minute prior to 12:01 a.m. Eastern Time on one of January 1, February 1,
March 1, April 1, May 1, June 1, July 1, 
  

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 August 1, September 1, October 1, November 1 or December 1 and ending at one (1) minute
after 11:59 p.m. Eastern Time of the succeeding January 31, February 28 or 29 (during a leap year), March 31, April 30, May 31, June 30, July 31, August 31, September 30, October 31, November 30
or December 31. 
 “Monthly” shall have a meaning correlative to that of Month. 
 “Monthly Billing Demand”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning specified in
Section 7.2.2.2, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.2.2. 
 “Monthly Demand Amount” means the quantity specified in Section 7.1.4. 
 “Monthly Demand Charge” means, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006, the
charge set forth in Section 7.1.4; with respect to the period January 1, 2007, through December 31, 2010, the charge set forth in Section 7.2.2; and with respect to the period beginning January 1, 2011, and continuing
through the termination of this Agreement, the charge set forth in Section 7.3.2. 
 “Monthly Demand Rate”, with respect to
the period beginning on the Commencement Date and continuing through December 31, 2006, shall have the meaning specified in Section 7.1.4; with respect to the period January 1, 2007 through August 31, 2008, shall have the meaning
specified in Section 7.2.2.1, except as provided in Sections 3.5.2.3.1, 3.5.2.3.2 and 3.5.2.3.3; with respect to the period September 1, 2008, through December 31, 2010, shall have the meaning specified in Section 7.2.2.1; and
with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.2.1. 
 “Monthly Fuel Charge”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning specified in
Section 7.2.3.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.3.1. 
 “Monthly Inter-EMC Energy Transfer Reconciliation Charge” shall have the meaning specified in Section 7.1.5.13. 
 “Monthly Replacement Energy Charge” shall have the meaning specified in Section 4.2.4. 
 “Monthly Reserve Capacity Charge” shall have the meaning specified in Section 7.4. 
 “Monthly Scheduling Agent Service Charge” shall have the meaning specified in Section 7.1.6. 
 “Monthly Variable O&M Charge”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning
specified in Section 7.2.3.2, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the meaning specified in Section 7.3.3.2. 
  

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 “Moody’s” means Moody’s Investors Services, Inc. 
 “MSCG” means Morgan Stanley Capital Group Inc. 
 “MWh” means megawatt-hour, a unit of electric energy. 
 “MW” means megawatt. 

“NCEMC” shall have the meaning specified in the Recitals of this Agreement. 
 “NCEMC Native Load” means the electric and energy demands imposed on NCEMC by its members for resale to such members’ retail customers,
and shall include wholesale sales of electric capacity and energy by Blue Ridge to New River except wholesale sales of electric capacity and energy made in accordance with Section 4.4.1 of the Duke-Blue Ridge Agreement. 
 “NCEMC Policies” shall have the meaning specified in Section 8.2. 
 “NCUC” means the North Carolina Utilities Commission or any successor agency with jurisdiction to regulate retail electric service in the State
of North Carolina. 
 “Negotiation Period” shall have the meaning specified in Section 14.2. 
 “NERC” means the North American Electric Reliability Council. 
 “Network Integration Transmission Service” means Network Integration Transmission Service provided under the OATT. 
 “Network Integration Transmission Service Agreement” or “NITSA” means that certain agreement for Network Integration Transmission Service, as amended from time to time, executed by EMC and
Transmission Provider. 
 “Network Operating Agreement” or “NOA” means that certain agreement, as amended from time to
time, executed by EMC and Transmission Provider in conjunction with the Network Integration Transmission Service Agreement. 
 “Network
Resource” shall have the meaning specified in the OATT. 
 “Neutral Auditors” shall have the meaning specified in
Section 2.3.2.2.2. 
 “New River” means Appalachian State University d/b/a New River Light & Power Company or any
successor thereto. 
 “Nomination” means the notification provided by MSCG to the Scheduling Agent of the sources and specific
amounts of electric energy under the WPSA and SEPA Contract that MSCG desires EMC to make available in accordance with the terms and conditions of the PPA. 
  

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 “Non-Claiming Party” shall have the meaning specified in Section 16.4. 
 “Non-Conforming Load” shall have the meaning specified in Section 4.4. 
 “Non-Defaulting Party” shall have the meaning specified in Section 16.5.1. 
 “Non-Duke Control Area Load” means load that is located in a Control Area other than the Duke Control Area, including load that is physically
located in the Duke Control Area but telemetered for Control Area purposes to another Control Area. 
 “Non-Firm Sales” means
wholesale electric sales for which the delivery of electric energy may be interrupted, curtailed or terminated for any reason without any liability to Duke (other than charges imposed for changes to schedules for the sale of electric energy).

 “Notice of Termination” means a written notice to terminate this Agreement under Sections 2.2 or 2.3 that conforms
to the requirements set forth in Section 2.3.3. 
 “OATT” means the Open Access Transmission Tariff of the Transmission
Provider on file with FERC, or the successor transmission tariff (including the Open Access Transmission Tariff of an RTO, ITC or ISO that is applicable to the Transmission System), as either may be amended from time to time. 
 “Operating Committee” shall have the meaning specified in Section 10.1. 
 “Option Notice” shall have the meaning specified in Section 3.5.2.3. 
 “Option Period” shall have the meaning specified in Section 3.5.2.3. 
 “Original Notice” shall have the meaning specified in Section 14.2. 
 “Partial Requirements Agreements” means the Duke-Rutherford Agreement, the Duke-Blue Ridge Agreement, and the Duke-Piedmont Agreement.

 “Partial Requirements Resources” means EMC’s contractual entitlements to electric capacity and energy used to serve
EMC’s Native Load during the period commencing January 1, 2011, and continuing through the termination of this Agreement, as specified in Section 5.2. 
 “Partial Requirements Service” shall have the meaning specified in Section 4.3. 
 “Party” and “Parties” shall have the meanings specified in the preamble of this Agreement. 
 “Patronage
Capital or Margins” shall have the meaning specified in Section 15.7. 
 “Piedmont” means Piedmont Electric Membership
Corporation. 
 “Piedmont Energy Credit Amount” means the Piedmont Energy Credit Amount as determined in Section 7.1.5.9 of
the Duke-Piedmont Agreement. 
  

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 “Piedmont Energy Purchase Amount” means the Piedmont Energy Purchase Amount as determined in
Section 7.1.5.9 of the Duke-Piedmont Agreement. 
 “Point of Interconnection” means the point of interconnection between the
Transmission Provider’s transmission and distribution facilities and EMC’s system. 
 “PPA” means that certain Power
Purchase Agreement by and between EMC and Morgan Stanley Capital Group Inc. dated as of December 11, 2003, as amended from time to time. 
 “Prime Rate” means, for any date, the per annum rate of interest announced from time to time by Citibank, N.A. (or a suitable replacement agreed upon by the Parties) as its “prime” rate for commercial loans, effective on
the date payment is due as established from time to time by such bank. 
 “Principal and Interest Expense” shall have the meaning
specified in Section 15.7. 
 “Prudent Utility Practice” means any of the practices, methods, and acts engaged in or approved
by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods, and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could
have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety, and expedition. Prudent Utility Practice is not intended to be limited to the optimum practice, method, or act to
the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the electric utility industry. 
 “PSCSC” means the Public Service Commission of South Carolina, or any successor agency with jurisdiction to regulate retail electric service within the State of South Carolina. 
 “Purchasing - Selling Entity” means that entity designated to the Transmission Provider by EMC who, upon the effectiveness of such designation,
is eligible to purchase and sell energy and/or capacity and reserve transmission services on behalf of EMC. 
 “PURPA” means the
Public Utilities Regulatory Policies Act, 16 U.S.C. §2601 et seq. (2005), as amended, including amendments included in the Energy Policy Act of 2005. 
 “PURPA Resource” shall have the meaning specified in Section 5.4.1. 
 “Qualifying
Facility” means a facility that meets the standards under 18 C.F.R. Part 292, Subpart B, as amended from time to time. 
 “Reconciliation Allocation Factor” shall be equal to the Reconciliation Allocation Number divided by the sum of the Reconciliation Allocation Numbers as set forth in this Agreement and in the Duke-Blue Ridge Agreement, and
Duke-Piedmont Agreement. 
 “Reconciliation Allocation Number” shall be equal to 42.60. 
 “Replacement Energy” shall have the meaning specified in Section 4.2.4. 
  

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 “Representatives” means, with respect to a Party, such Party’s officers, directors,
employees, advisors, and representatives and such Party’s Affiliates and their respective officers, directors, employees, advisors, and representatives. 
 “Resolution Period” shall have the meaning specified in Section 2.3.2.2.2. 
 “Restricted
Rentals” shall have the meaning specified in Section 15.7. 
 “RTO” means a regional transmission organization as that
term is defined by FERC. 
 “RUS” means the Rural Utilities Service of the United States Department of Agriculture or any agency
succeeding to the functions of RUS. 
 “Rutherford” shall have the meaning specified in the first paragraph of this Agreement.

 “Rutherford Allocated Share of Duke Total Hourly Energy Charge” shall be as calculated in Attachment 7-3. 
 “Rutherford Allocated Share of EMC Group Total Hourly Energy Credit” shall be as calculated in Attachment 7-3. 
 “Rutherford Allocated Share of Inter-EMC Energy Charge” shall be as calculated in Attachment 7-3. 
 “Rutherford Allocated Share of Inter-EMC Energy Credit” shall be as calculated in Attachment 7-3. 
 “Rutherford Energy Credit Amount” means the Rutherford Energy Credit Amount as determined in Section 7.1.5.9. 
 “Rutherford Energy Purchase Amount” means the Rutherford Energy Purchase Amount as determined in Section 7.1.5.9. 
 “Rutherford Hourly Reconciliation Credit” shall have the meaning specified in Section 7.1.5.12. 
 “Rutherford Monthly Reconciliation Credit” shall have the meaning specified in Section 7.1.5.12. 
 “Scheduling Agent” means Duke acting as agent on behalf of EMC to perform Scheduling Agent Services. 
 “Scheduling Agent Services” shall have the meaning specified in Article 8. 
 “Scheduling Services Agreement” means that certain Scheduling Services Agreement by and between EMC and MSCG dated as of December 11,
2003, as amended. 
 “Scheduling Shortfall” shall have the meaning specified in Section 4.2.4. 
  

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 “Scheduling Shortfall Amount” shall have the meaning specified in Section 4.2.4.

 “Selection Date” shall have the meaning specified in Section 14.5. 
 “SEPA” means the Southeastern Power Administration. 
 “SEPA Contract” means the Contract Executed by Rutherford and the United States of America acting by and through the Southeastern Power Administration dated as of May 2, 1997, as amended from time to
time. The Parties agree that, for the purposes of this Agreement, the SEPA Contract as in effect on the date hereof is attached to a letter from EMC to Duke dated May 12, 2006. 
 “SEPA Entitlement” shall mean EMC’s entitlement to electric capacity and energy under the SEPA Contract. 
 “SEPA Policies” shall have the meaning specified in Section 8.2. 
 “SERC” means the Southeastern Reliability Council. 
 “Service Area” means the area within a state or states within which an electric utility provides retail electric service as determined under the applicable Laws of such state or states. 
 “Service Obligation Resources” or “SORs” means those generation and purchased capacity resources used by NCEMC to serve NCEMC’s
members for resale to such members’ retail customers, as such resources are specified in the Power Sales Agreement Between Carolina Power & Light Company and North Carolina Electric Membership Corporation dated as of November 2,
1998, as amended. 
 “Short Term Interest Expense” shall have the meaning specified in Section 15.7. 
 “S&P” or “Standard & Poor’s” means Standard & Poor’s Rating Group, a division of McGraw Hill, Inc.

 “Standard Arbitration Process” shall mean the arbitration process described in Section 14.6.1. 
 “Streamlined Arbitration Process” shall mean the arbitration process described in Section 14.6.2. 
 “Submission” or “Submissions” shall have the meaning specified in Section 14.6.1(5). 
 “Substitute Energy” shall have the meaning specified in Section 6.4. 
 “Substitute Energy Costs” shall have the meaning specified in Section 6.5. 
 “Summer Period” means the period (as of the Commencement Date May 1 – September 30) designated as the summer period in the then
most recent Duke Annual Plan. 
  

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 “System Incremental Cost” means the incremental expense, measured in dollars per megawatt hour
($/MWh), incurred by Duke to supply the next megawatt-hour (MWh) of electric energy, after serving Duke’s Native Load customers’ requirements, and all other opportunity sales, during any Hour in which electric energy is purchased by EMC.
System Incremental Cost shall include the replacement cost of fuel, fuel handling expense, variable operating and maintenance expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating
any generating units (including costs incurred due to minimum runtimes or loading levels), and other appropriate electric energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit
commitment costs, if any, all as determined prior to the Hour. 
 “Term” means the term of this Agreement determined in accordance
with Section 2.2.3. 
 “Termination Assistance Service” shall have the meaning specified in Section 8.10. 
 “Territorial Decremental Cost” means the decrease in Duke’s expenses, measured in dollars per megawatt hour ($/MWh), in supplying
Duke’s Native Load customers’ requirements due to Duke’s purchase of electric energy supplied by EMC. Territorial Decremental Cost shall include the reduction in fuel expense, fuel handling expense, variable operating and maintenance
expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs incurred due to minimum runtimes or loading levels), and other appropriate
energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined prior to the Hour. 
 “Territorial Incremental Cost” means the incremental expense, measured in dollars per megawatt hour ($/MWh), incurred by Duke to supply the
next megawatt-hour (MWh) of electric energy after serving Duke’s Native Load customers’ requirements, during any Hour in which electric energy is purchased by EMC. Territorial Incremental Cost shall include the replacement cost of fuel,
fuel handling expense, variable operating and maintenance expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs incurred due to minimum
runtimes or loading levels), and other appropriate electric energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined prior to the Hour.

 “Times Interest Earned Ratio” or “TIER” shall have the meaning specified in Section 15.7. 
 “Transmission Provider” means any entity transmitting electric energy provided by Duke under this Agreement to the EMC distribution system, and
shall include any ISO, RTO, ITC, or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider. 
 “Transmission Service” means the service provided by a Transmission Provider to EMC pursuant to which electric energy provided under this Agreement is delivered from the Delivery Point to EMC’s
distribution system. 
  

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 “Transmission System” means the electric transmission system owned or leased and operated by
Duke Transmission. 
 “Variable O&M Rate”, with respect to the period January 1, 2007, through December 31, 2010,
shall have the meaning specified in Section 7.2.3.2, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.3.2. 

“Weekday” means Monday, Tuesday, Wednesday, Thursday or Friday, excluding days recognized as holidays by NERC. 
 “Weekend Day” means Saturday or Sunday, and all days recognized as holidays by NERC. 
 “Winter Period” means the period (as of the Commencement Date October 1 – April 30) designated as the winter period in the then
most recent Duke Power Annual Plan. 
 “WPSA” means the Wholesale Power Supply Agreement by and between North Carolina Electric
Membership Corporation and EMC dated as of January 1, 2004, as amended from time to time. The Parties agree that, for the purposes of this Agreement, the WPSA as in effect on the date hereof is attached to a letter from EMC to Duke dated
May 12, 2006. 
 “Year” means a calendar year. 
 1.2 Interpretation. In this Agreement, unless the context otherwise requires, the singular shall include the plural and any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement shall, unless otherwise expressly specified, refer to this Agreement as a whole and not to any
particular provision of this Agreement. Whenever the terms “include,” “includes,” or “including” are used herein in connection with a listing of items included within a prior reference, such listing shall be interpreted
to be illustrative only, and shall not be interpreted as a limitation on or exclusive listing of the items included within the prior reference. Any reference in this Agreement to “Section,” “Article,” “Schedule,” or
“Attachment” shall be references to this Agreement unless otherwise stated, and all such Sections, Articles, Schedules, and Attachments shall be incorporated in this Agreement by reference. In the event that any index or publication
referenced in this Agreement ceases to be published, each such reference shall be deemed a reference to a successor or alternate index or publication reasonably agreed to by the Parties. Unless specified otherwise, a reference to a given agreement
or instrument, and all schedules and attachments thereto, shall be a reference to that agreement or instrument as modified, amended, supplemented and restated, and in effect from time to time. Unless otherwise stated, any reference in this Agreement
to any entity shall include its permitted successors and assignees, and in the case of any Governmental Authority, any person succeeding to its functions and capacities. All dollar amounts referred to in this Agreement shall be in U.S. currency.

 1.3 Construction. The Parties acknowledge that each was actively involved in the negotiation and drafting of this Agreement and that no Law or rule
of construction shall be raised or used in which the provisions of this Agreement shall be construed in favor of or against either Party because one is deemed to be the author thereof. 
  

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 Article 2 
 Term 
 2.1 Effectiveness. 
 2.1.1 Effectiveness of this Agreement. This Agreement shall become effective upon execution and delivery by the Parties (“Effective Date”) provided that obligations of the Parties to purchase and sell
electric capacity and energy and to provide Scheduling Agent Services shall commence, on the later to occur of (a) September 1, 2006 or (b) the date upon which service commences in accordance with Section 3.5.1.2 or
Section 3.5.2.1 (the “Commencement Date”), provided that the Commencement Date shall be the first Day of the Month. 
 2.1.2
Governmental Approval. 
 2.1.2.1 Duke shall take appropriate steps within five (5) Business Days from the Effective Date to file
this Agreement, together with supporting documents, with FERC pursuant to the requirements of the Federal Power Act. Thereafter, Duke shall diligently pursue acceptance of this Agreement as a rate schedule by FERC and shall keep EMC informed of the
progress in such regard. If requested by Duke, EMC shall undertake Commercially Reasonable Efforts to cooperate with and assist Duke in Duke’s efforts to make this Agreement effective and, upon Duke’s request, shall make a timely submittal
at FERC affirmatively supporting the acceptance or approval of this Agreement by FERC without modification, suspension, investigation, or other condition. 
 2.1.2.2 EMC shall take appropriate steps within five (5) Business Days from the Effective Date to submit this Agreement, together with supporting documents, to the RUS. Thereafter, EMC shall diligently pursue
approval of this Agreement by the RUS and shall keep Duke informed of the progress in such regard. If requested by EMC, Duke shall undertake Commercially Reasonable Efforts to cooperate with and assist EMC in EMC’s efforts to obtain RUS
approval of this Agreement and, upon EMC’s request, shall make a timely submittal at RUS affirmatively supporting the approval of this Agreement without modification or condition. 
 2.2 Term. 
 2.2.1 Initial Term. The initial term of this Agreement shall commence on the
Effective Date and shall continue through 23:59:59, Eastern Time, on December 31, 2021 (“Initial Term”) unless this Agreement is terminated prior to December 31, 2021, in accordance with Sections 2.3.2, 3.5.2.2 or 3.5.3.

 2.2.2 Extension. Unless terminated in accordance with Sections 2.3, 3.5.2.2 or 3.5.3, the Term of this Agreement shall
automatically renew and extend for an additional term of ten (10) Years (each such extension being an “Extension Term”), so that unless either Party gives Notice of Termination in accordance with Section 2.3, the Term of this
Agreement shall extend 
  

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 through 23:59:59 Eastern Time on December 31, 2031. Likewise, unless either Party gives Notice of Termination in
accordance with Section 2.3, the Term of this Agreement shall extend through 23:59:59 Eastern Time on December 31, 2041; and so forth thereafter in ten (10) Year increments. 
 2.2.3 Term. The Initial Term of this Agreement together with each Extension Term, if any, shall constitute the “Term” of this Agreement
during which Duke shall provide either FFR Supplemental Service or Partial Requirements Service, as applicable, and Scheduling Agent Services to EMC. 
 2.3
Termination. 
 2.3.1 Termination of the Initial or an Extension Term. Either Party may terminate this Agreement at the end of
the Initial Term by giving Notice of Termination to the other Party as specified in Section 2.3.3 at least three (3) Years prior to the end of the Initial Term, so that such notice is given no later than December 31, 2018. If the Term
is extended beyond the Initial Term pursuant to Section 2.2.2, either Party may terminate this Agreement at the end of the then-current Extension Term by providing Notice of Termination to the other Party as specified in Section 2.3.3 at
least three (3) Years prior to the end of such Extension Term, so that such notice is given no later than December 31, 2028, for the Extension Term ending December 31, 2031, and so forth thereafter. 
 2.3.2 Early Termination. Notwithstanding the provisions of Section 2.3.1, early termination of this Agreement, including any Extension Term,
shall only be permitted in the six (6) circumstances set out in Sections 2.3.2.1, 2.3.2.2, 2.3.2.3, 2.3.2.4, 2.3.2.5 and 2.3.2.6. 
 2.3.2.1 Early Termination for an Event of Default. In the event that an Event of Default occurs, and the Defaulting Party fails to cure such Event of Default within the time period(s) specified in Section 16.5.3, the
Non-Defaulting Party may terminate this Agreement upon giving thirty (30) Days’ Notice of Termination, provided that the termination date shall be the last Day of a Month. 
 2.3.2.2 Early Termination for a Material Adverse Ruling. In the event that a Material Adverse Ruling occurs, the Party affected by such Material
Adverse Ruling may, within twenty (20) Days after such Material Adverse Ruling occurs, give the other Party Notice of Termination, in accordance with Section 2.3.3, of its intent to terminate this Agreement effective on 23:59:59 of the
last Day of the Month that is twenty-four (24) Months after the Month in which the Notice of Termination is given. Such termination date shall be referred to herein as the “Material Adverse Ruling Termination Date.” If a Party fails
to give Notice of Termination within twenty (20) Days after a Material Adverse Ruling occurs, it shall have permanently waived its right to terminate this Agreement due to such Material Adverse Ruling pursuant to this Section 2.3.2.2.
Termination pursuant to this Section 2.3.2.2 shall be subject to the following procedures: 
 (a) During the ninety
(90) Days immediately following the giving of the Notice of Termination, the Parties shall attempt to negotiate amendments to this Agreement that would permit the Parties to restore the equivalent value of the economic 
  

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 bargain contemplated by this Agreement absent the Material Adverse Ruling. If the Parties reach
agreement, such amendments will not become effective unless, within one hundred eighty (180) Days of the date that the Notice of Termination is given, the Parties have obtained the necessary approvals of Governmental Authorities to enable the
amendments to become effective without change, condition or modification. In the event that the Parties fail (i) to reach agreement on such amendments, or (ii) to obtain the necessary approvals of Governmental Authorities, this Agreement
shall terminate on the Material Adverse Ruling Termination Date, subject to the provisions of Section 2.3.2.2(b) and 2.3.2.2.2. 
 (b) In the event that the Parties are unable to reach agreement on the amendments provided in Section 2.3.2.2(a), either Party may, no later than ninety (90) Days after the date that the Notice of Termination is given (or, if
earlier, the date that the Parties mutually agree that they are unable to reach agreement on such amendments), give notice to the other Party of its desire to extend this Agreement for a period of up to twelve (12) Months beyond the Material
Adverse Ruling Termination Date. Such extension will be subject to the Parties (i) having first reached agreement upon the rates, terms and conditions of service for such twelve (12) Month period within one hundred twenty (120) Days
of the date that the Notice of Termination is given and executing such agreement within such one hundred twenty (120) Day period, and (ii) having received from Governmental Authorities the necessary approvals for such rates, terms and
conditions without change, condition or modification within one hundred eighty (180) Days of the date that the Notice of Termination is given. 
 (c) A “Material Adverse Ruling” is an order or action by a Governmental Authority or a change in Law that (i) either (A) modifies the rates, terms, or conditions of this Agreement,
(B) disallows the recovery from EMC of costs that are included in this Agreement, (C) for retail ratemaking or regulatory accounting and reporting purposes, disallows costs related to this Agreement, including any disallowance of
Duke’s costs related to investments in generating facilities or binding contracts to purchase electric capacity and energy to provide service to EMC under this Agreement, or (D) for retail ratemaking or regulatory accounting and reporting
purposes, assigns, allocates or makes pro forma adjustments with respect to the revenues or costs related to this Agreement, and (ii) adversely affects the relative economic position of either Party in a material way. For purposes of this
definition only, 
 (1) “material” for Duke means that the effect of the order or action by the Governmental
Authority or change in Law is reasonably projected to decrease Duke’s net revenues under this Agreement, or, in the case of a disallowance, assignment, allocation, or pro forma adjustment of revenues or costs for retail ratemaking or regulatory
accounting or reporting purposes, either (i) decrease Duke’s net costs or increase Duke’s net revenues assigned or allocated to Duke’s retail customer classes, or (ii) increase Duke’s net costs or decrease Duke’s
net revenues assigned or allocated to Duke’s wholesale customer class, by an aggregate amount equal to five percent (5%) or more of the total revenues to be paid by EMC to Duke under this Agreement over the then-remaining Term; 

 

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 (2) “material” for EMC means that the effect of the order or action by the
Governmental Authority or change in Law is reasonably projected to increase EMC’s net costs under this Agreement by an amount equal to five percent (5%) or more of the total revenues to be paid by EMC to Duke under this Agreement over the
then-remaining Term; 
 (3) an increase in a Party’s net costs is the increase in the Party’s costs as a result of
the order or action by the Governmental Authority or change in Law, less the increase (if any) in the Party’s revenues as a result of the Material Adverse Ruling; and 
 (4) a decrease in a Party’s net revenues is the decrease in the Party’s revenues as a result of the order or action by the
Governmental Authority or change in Law, less the decrease (if any) in the Party’s costs as a result of the Material Adverse Ruling. 
 (d) The foregoing amounts shall be calculated on a nominal rather than an inflation adjusted or present value basis. Without limitation of the foregoing, EMC acknowledges that, for retail ratemaking and regulatory
accounting and reporting purposes, Duke shall calculate the costs of the electric capacity and energy used to serve EMC under this Agreement on a system average cost basis beginning January 1, 2007. EMC agrees that if the amount of costs that
the NCUC or the PSCSC in effect assigns or allocates to, or requires Duke to assign or allocate to, this Agreement for ratemaking or regulatory accounting and reporting purposes exceeds Duke’s system average costs, such action shall constitute
a Material Adverse Ruling if the five percent (5%) materiality standard set forth above is met. 
 2.3.2.2.1 A change in Duke’s
net revenues or EMC’s net costs that results from a change in this Agreement that is permitted under Section 12.3, shall not constitute a Material Adverse Ruling regardless of the impact of such change on either Party’s net costs or
net revenues. 
 2.3.2.2.2 In the event that either Party believes that a Material Adverse Ruling has occurred, the Party affected by such
Material Adverse Ruling shall provide the other Party a good faith calculation together with information supporting the calculation of the projected effect of the Material Adverse Ruling and include such calculation and the cost information
supporting the calculation with the Notice of Termination. If the non-terminating Party notifies the other Party, within twenty (20) Days following the date that such Notice of Termination is given, of its good faith objection to the
calculation or the cost information supporting the calculation of the projected effect of the Material Adverse Ruling, then the Parties shall, within thirty (30) Days following the date that such Notice of Termination is given (the
“Resolution Period”), attempt to resolve their differences with respect to the calculation or the cost information supporting such calculation. If, at the conclusion of the Resolution Period, the Parties are not in agreement with respect
to the calculation or cost information supporting the calculation, then PriceWaterhouseCoopers, or such other nationally recognized accounting firm that is not then the independent auditor for either Party or any of its Affiliates or predecessors
and is selected by mutual agreement of the Parties (the “Neutral Auditors”), shall be engaged 
  

 24 








 within ten (10) Days after the expiration of the Resolution Period to review the calculation and the cost
information supporting the calculation and to make an independent determination as to whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable. If the Neutral Auditors
require any additional information, records, or internal analysis to make a determination as to whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, the Party in
possession of such information, records or internal analysis will provide it to the Neutral Auditors. Each Party agrees to execute, if requested by the Neutral Auditors, a reasonable engagement letter, including customary indemnities. All fees and
expenses relating to the work to be performed by the Neutral Auditors shall be borne one-half (1/2) by the terminating Party and one-half (1/2) by the non-terminating Party. The Neutral Auditors shall act as an arbitrator to determine,
based upon its independent review, whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable. The Neutral Auditors’ determination shall be made within thirty
(30) Days of their selection, shall be set forth in a written statement delivered to both Parties and shall be final, binding and conclusive. If the Neutral Auditors’ determine the materiality standard set forth in
Section 2.3.2.2(c)(1) or (c)(2), as applicable, is not met, the Notice of Termination shall be null and void. If the Neutral Auditors’ determine the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, is
met, the Notice of Termination shall be effective in accordance with its terms. The initiation of the dispute resolution process described in this Section 2.3.2.2.2, shall not toll or otherwise delay running of the twenty-four (24) Month
time period set forth in the Notice of Termination, unless the Neutral Auditors’ find that the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, is not met. The procedure set forth in this
Section 2.3.2.2.2 shall be the exclusive means for the Parties to resolve any dispute as to whether a Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2). If a Party gives a Notice of
Termination based on its good faith contention of the occurrence of a Material Adverse Ruling that meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, and the Neutral Auditors subsequently determine that
such materiality standard has not been met, such Party shall not be in default under this Agreement solely because it gave such Notice of Termination. 
 2.3.2.3 Early Termination for Failure of Condition Precedent. This Agreement may be terminated for failure of a condition precedent in accordance with Section 3.5.2.2 or Section 3.5.3. 
 2.3.2.4 Early Termination Due to Implementation of Retail Competition. Upon the date of enactment of a Law providing for implementation of retail
electric service competition on a comprehensive basis in the State of North Carolina, the Parties shall enter into negotiations with the goal of reaching agreement on amendments to this Agreement to provide for the continuation of the purchase and
sale of electric capacity and energy and the provision of Scheduling Agent Services provided for in this Agreement after the commencement of such retail electric service competition. If the Parties are not able to reach agreement by the latter to
occur of (i) the date that is ninety (90) Days after the date of enactment of such Law or (ii) the date that is twenty-four (24) Months prior to the commencement of such retail electric service competition in the State of North
Carolina, then this Agreement shall terminate automatically on the date such retail electric service competition commences in the State of North Carolina without the need for either Party to give notice. 
  

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 2.3.2.5 Early Termination Due to Plant Calculation. In the event that the Annual Percentage
calculated in Attachment 7-9 is positive for two (2) consecutive Years, and the absolute value of such percentage is greater than ten percent (10%) then EMC may, within twenty (20) Days after the date in such second
(2nd) consecutive Year that Duke provides the calculation of the Annual Percentage pursuant to Section 7.3.2.4, give Duke Notice of Termination to terminate this Agreement effective on 23:59:59 of the last Day of Month that is twenty-four
(24) Months after the Month in which the Notice of Termination is given. In the event that the Annual Percentage calculated in Attachment 7-9 is negative for two (2) consecutive Years, and the absolute value of such percentage is
greater than ten percent (10%) for any two (2) consecutive Years, then Duke may, within twenty (20) Days after the date in such second (2nd) consecutive Year that Duke provides the calculation of the Annual Percentage pursuant to
Section 7.3.2.4, give EMC Notice of Termination to terminate this Agreement effective on 23:59:59 of the last Day of Month that is twenty-four (24) Months after the Month in which the Notice of Termination is given. If a Party fails to
give Notice of Termination within twenty (20) Days after Duke provides the calculation of the Annual Percentage pursuant to Section 7.3.2.4 for such second (2nd) consecutive Year, it shall have permanently waived its right to
terminate this Agreement under this Section based on the Annual Percentage for such two (2) consecutive Years; provided, that nothing in this Section 2.3.2.5 shall affect any Party’s termination rights under Sections 2.3.2.1,
2.3.2.2, 2.3.2.3, 2.3.2.4 or 2.3.2.6. 
 2.3.2.6 Early Termination Due to Extended Force Majeure. If, as a result of an event of Force
Majeure, a Party is unable to meet a material obligation hereunder for a period greater than ninety (90) Days, then the Non-Claiming Party shall have the right to terminate this Agreement upon giving a Notice of Termination within thirty
(30) Days of the expiration of such ninety (90) Day period; provided, however, if the Claiming Party has used and continues to use all Commercially Reasonable Efforts to remedy, cure or mitigate the event of Force Majeure, then the
Non-Claiming Party’s right to give Notice of Termination shall be suspended for so long as the Claiming Party continues to use Commercially Reasonable Efforts to remedy, cure or mitigate the event of Force Majeure. 
 2.3.3 Form of Notice of Termination. Notice of Termination made pursuant to Sections 2.2 or 2.3 shall be given in accordance with
Section 16.22 and shall state (i) the date of termination being effectuated, and (ii) the provision of this Agreement under which termination is being effectuated and the basis for the termination. Except as otherwise provided in this
Section 2.3.3, the Notice of Termination is effective when it is deemed given in accordance with Section 16.22. Once the Notice of Termination is given to a Party, it shall not be deemed amended, modified, or otherwise revoked for any
reason (other than a determination by the Neutral Auditors pursuant to Section 2.3.2.2.2 that the materiality standard is not met) unless such amendment, modification, or revocation is mutually agreed to by both Parties in writing or unless the
Parties reach agreement in accordance with Section 2.3.2.2(a). Upon receipt of the Notice of Termination, the non-terminating Party shall acknowledge receipt in writing sent in accordance with Section 16.22 within five (5) Business
Days of the receipt of the Notice of Termination. Acknowledgment of a Notice of Termination is a courtesy and shall not influence the effectiveness of the termination. Failure to utilize a method specified in Section 16.22 shall not influence
the effectiveness of the termination if the Notice of Termination is actually received by the General Manager of the non-terminating Party within thirty (30) Days of the date 
  

 26 








 of the Notice of Termination, in which case the Notice of Termination shall be effective on the date that the Notice of
Termination is actually received by the General Manager of the non-terminating Party. 
 2.4 Absolute Nature of Termination. Both Parties hereby
acknowledge, warrant, and agree that TERMINATION OF THIS AGREEMENT FOR ANY REASON PROVIDED FOR AND PERMITTED UNDER THIS AGREEMENT IS ABSOLUTE AND FOREVER EXTINGUISHES ANY AND ALL OBLIGATIONS EXISTING UNDER THIS AGREEMENT FOR (A) DUKE TO PLAN OR
PROCURE RESOURCES TO SERVE EMC, OR TO PROVIDE ANY SERVICE OR PRODUCT TO EMC, (B) EMC TO PURCHASE FROM AND PAY DUKE FOR ANY SERVICES OR PRODUCTS, (C) EMC TO PLAN OR PROCURE RESOURCES TO SERVE DUKE, OR TO PROVIDE ANY SERVICE OR PRODUCT TO
DUKE, AND (D) DUKE TO PURCHASE FROM AND PAY EMC FOR ANY SERVICES OR PRODUCTS. Upon termination of this Agreement in accordance with Section 2.2, 2.3, 3.5.2.2, or 3.5.3, each and every obligation of Duke to provide electric energy and
capacity and Scheduling Agent Services to EMC, and each and every right of EMC to purchase electric energy and capacity and Scheduling Agent Services from Duke shall cease as a matter of contract and neither Party shall claim or assert any
continuing right to continued performance, whether by “rollover,” as an “evergreen” service, or in any other fashion based on this Agreement. By entering into this Agreement, Duke does not commit, and shall not be deemed to have
committed, to plan its system to be able to provide any service to EMC beyond the Term, and EMC agrees that it has no claim to any service beyond the Term. EMC shall not at any time oppose any filing by Duke to cancel this Agreement as a rate
schedule under the Federal Power Act concurrently with, or subsequently to, the termination of this Agreement as a contract in accordance with Section 2.2, 2.3, 3.5.2.2, or 3.5.3. The Parties acknowledge, warrant, and agree that it is the
express intention of the Parties that no action by any Governmental Authority may override the terms of this Section 2.4 of this Agreement, and that should any Governmental Authority take any action purporting to, or that might be claimed to,
override the terms of this Section 2.4, either directly or indirectly, EMC shall not make any claim or assert any right based on or relying on such Governmental Authority action in any manner that conflicts with or frustrates the terms of
Section 2.4 of this Agreement. 
 Article 3 
 Conditions Precedent to the Commencement Date 
 3.1 Conditions Precedent to Duke’s Obligations. The
obligation of Duke to commence sales of electric energy and capacity and purchases of electric energy and to provide Scheduling Agent Services under this Agreement is subject to the satisfaction or waiver at least thirty (30) Days prior to the
Commencement Date (except that Duke may undertake certain preliminary activities in advance of the Commencement Date) of the following conditions: 
 (a) The representations and warranties of EMC set forth in Sections 16.1.1 and the covenants of EMC set forth in Section 16.1.2 shall be true and correct. 
 (b) FERC shall have issued an order accepting or approving this Agreement for filing and permitting it to become effective as filed
without modification, suspension, investigation or other condition (including setting this Agreement, or part thereof, for hearing) unacceptable to Duke. 
  

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 (c) Neither the NCUC nor the PSCSC shall have issued an Adverse Ruling. For purposes of
this Section 3.1(c) only, “Adverse Ruling” means an order or ruling issued by the NCUC or PSCSC (i) which disapproves or rejects this Agreement, or (ii) generally applicable to electric utilities subject to the
jurisdiction of the NCUC or PSCSC, as applicable, in which the NCUC or PSCSC disapproves or rejects the use of system average cost accounting for wholesale contracts. 
 (d) SEPA shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent. 
 (e) NCEMC shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent. 
 (f) EMC shall have given notice to MSCG terminating the Scheduling Services Agreement. 
 (g) The systems and operational equipment required for Duke to provide and receive service under this Agreement have been installed or
otherwise put in place, tested satisfactorily, and are fully functional. 
 (h) Transmission Provider shall have received
notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent and Purchasing - Selling Entity. 
 (i)
MSCG shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent and Purchasing - Selling Entity. 
 (j) The Parties shall have agreed upon procedures so that Duke may test whether the EMC Demand Side Management Resource Programs meet the standards and requirements specified for such programs under the rate schedule
provisions or riders for Duke’s Demand Side Resource Management Programs then-currently approved and on file with the NCUC. 
 3.2 Conditions
Precedent to EMC’s Obligations. The obligation of EMC to commence purchases of electric energy and capacity and Scheduling Agent Services and sales of electric energy under this Agreement is subject to the satisfaction or waiver at least
thirty (30) Days prior to the Commencement Date (except that EMC may undertake certain preliminary activities in advance of the Commencement Date) of the following conditions: 
 (a) The representations and warranties of Duke set forth in Section 16.1.1 and the covenants of Duke set forth in Section 16.1.2
shall be true and correct. 
 (b) The RUS shall have approved this Agreement without modification, suspension, investigation
or other condition unacceptable to EMC. 
  

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 (c) SEPA shall have received notice and acknowledged EMC’s designation of Duke as
EMC’s Scheduling Agent. 
 (d) NCEMC shall have received notice and acknowledged EMC’s designation of Duke as
EMC’s Scheduling Agent. 
 (e) The Transmission Provider shall have qualified this Agreement as a Network Resource.

 (f) The systems and operational equipment required for EMC to provide and receive service under this Agreement have been
installed or otherwise put in place, tested satisfactorily, and are fully functional. 
 (g) Transmission Provider shall have
received and acknowledged EMC’s designation of Duke as Scheduling Agent and Purchasing - Selling Entity. 
 (h) MSCG
shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent and Purchasing - Selling Entity. 
 (i) The Parties shall have agreed upon procedures so that Duke may test whether the EMC Demand Side Management Resource Programs meet the standards and requirements specified for such programs under the rate schedule
provisions or riders for Duke’s Demand Side Resource Management Programs then-currently approved and on file with the NCUC. 
 3.3 Notice of
Satisfaction of Conditions Precedent. Each Party shall use Commercially Reasonable Efforts to satisfy its conditions precedent (as described in Section 3.1 for Duke and Section 3.2 for EMC) on or before July 31, 2006, or as soon
as reasonably practicable thereafter. EMC shall provide Duke with written notice promptly following the satisfaction or waiver of all of the conditions precedent to EMC’s obligations as described in Section 3.2. Duke shall provide EMC with
written notice promptly following the satisfaction or waiver of all of the conditions precedent to Duke’s obligations as described in Section 3.1, other than the condition precedent specified in Section 3.1(f). In order for the
condition precedent specified in Section 3.1(f) to be satisfied, subsequent to the later of the date of EMC’s receipt of Duke’s notice or the date of Duke’s receipt of EMC’s notice, EMC shall, no later than thirty
(30) Days prior to the Commencement Date, give notice to MSCG that the Scheduling Services Agreement shall be terminated on the Commencement Date. A condition precedent shall not be deemed to have been satisfied or waived prior to the date that
the notice provided for in this Section 3.3 is received by the other Party. 
 3.4 Waiver of Condition Precedent. 
 3.4.1 Waiver by Duke. In the event that any of the foregoing conditions to the obligations of Duke contained in Section 3.1 shall fail to be
satisfied, Duke may elect, in its sole discretion, to consummate this Agreement despite such failure, in which event Duke shall be deemed to have waived any claim for damages, losses or other relief arising from or in connection with such failure,
unless otherwise agreed in writing and executed by the Parties. Duke may not waive the condition of approvals set forth in Section 3.1(b). 
  

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 3.4.2 Waiver by EMC. In the event that any of the foregoing conditions to the obligations of EMC
contained in Section 3.2 shall fail to be satisfied, EMC may elect, in its sole discretion, to consummate this Agreement despite such failure, in which event EMC shall be deemed to have waived any claim for damages, losses or other relief
arising from or in connection with such failure, unless otherwise agreed in writing and executed by the Parties. EMC may not waive the condition of approvals set forth in Section 3.2(b). 
 3.4.3 Waiver by other Party. Any waiver by a Party of the other Party’s conditions precedent shall be in writing, and shall identify the
condition precedent that such Party is waiving. 
 3.5 Commencement of Service; Failure of Condition Precedent. 
 3.5.1 Commencement of Service. 
 3.5.1.1 If all of the conditions precedent specified in Sections 3.1 and 3.2 have been satisfied or waived on or before July 31, 2006, then the Commencement Date shall occur on September 1, 2006, without the need for either
Party to provide notice. 
 3.5.1.2 If all of the conditions precedent specified in Sections 3.1 and 3.2 are satisfied or waived during
the period between August 1, 2006, and November 30, 2006, and service under this Agreement has not commenced pursuant to Section 3.5.2.1, then service under this Agreement shall commence upon the next first Day of a Month which is at
least thirty (30) Days after all such conditions have been satisfied. 
 3.5.2 EMC Options. 
 3.5.2.1 If all of the conditions precedent specified in Sections 3.1 and 3.2, with the exception of the conditions precedent specified in
Section 3.1(b) and/or Section 3.2(b), have been satisfied or waived, then EMC may designate September 1, 2006, October 1, 2006, or November 1, 2006 as the Commencement Date by giving at least thirty (30) Days’
prior written notice to Duke. 
 3.5.2.2 If service has commenced pursuant to Section 3.5.2.1 prior to November 30, 2006, and the
condition precedent specified in Section 3.1(b) and/or Section 3.2(b) has not been satisfied on or before November 30, 2006, then except as provided in Section 3.5.2.3 this Agreement will terminate automatically on
December 31, 2006, without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the other arising hereunder under any claim or theory whatsoever. 
 3.5.2.3 If service has commenced pursuant to Section 3.5.2.1 prior to November 30, 2006, and the condition precedent specified in
Section 3.1(b) and/or Section 3.2(b) has not been satisfied on or before November 30, 2006, then EMC shall have the option of continuing to receive service hereunder beyond December 31, 2006 until either August 31,
2007, February 28, 2008, or August 31, 2008. EMC may exercise such option by giving notice to Duke of its exercise of such option no later than December 1, 2006. Such notice shall be referred to herein as the “Option
Notice”. EMC’s Option Notice shall specify 
  

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 whether EMC elects to receive service hereunder until August 31, 2007, February 28, 2008, or
August 31, 2008. The period of such service that EMC elects pursuant to such option (whether January 1, 2007—August 31, 2007; January 1, 2007 – February 28, 2008; or January 1, 2007—August 31, 2008) shall
be referred to herein as the “Option Period”. In the event that EMC exercises its option under this Section 3.5.2.3, then during the Option Period EMC shall be subject to the charges and credits set forth in Sections 3.5.2.3.1,
3.5.2.3.2, 3.5.2.3.3, 3.5.2.3.4, and 3.5.2.3.5, as applicable, and in Section 7.1 in lieu of the charges set forth in Section 7.2; provided, that during the Option Period the demand charges set forth in Section 7.1.4 shall be modified
as set forth in Sections 3.5.2.3.1, 3.5.2.3.2, or 3.5.2.3.3, as applicable, depending upon the Option Period selected by EMC. In the event that EMC exercises its option under this Section 3.5.2.3, then notwithstanding the provisions of
Section 3.5.2.2, this Agreement will terminate automatically on the last day of the Option Period, without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the
other arising hereunder under any claim or theory whatsoever for service beyond such date. EMC’s exercise of such option shall not serve to modify any other provision of the Agreement. 
 3.5.2.3.1 In the event that EMC exercises its option pursuant to Section 3.5.2.3, and the Option Period is January 1, 2007 –
August 31, 2007, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4 and the Excess Annual Capacity Charge set forth in Section 3.5.2.3.5.
In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under Section 3.5.2.3.5 during the Option Period shall be as follows: 
  

				
	 Annual Capacity Price
	  	$	38.00/kW-Year
	 Annual Capacity Quantity
	  	 	83,000 kW
	 Excess Annual Capacity Price
	  	$	45.60/kW-Year

 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month,
rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13) during the Option Period shall be as set forth
in Section 7.1.5. 
 3.5.2.3.2 In the event that EMC exercises its option pursuant to Section 3.5.2.3, and the Option Period is
January 1, 2007 – February 28, 2008, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4 and the Excess Annual Capacity Charge set
forth in Section 3.5.2.3.5. In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under Section 3.5.2.3.5 during the Option Period
shall be as follows: 
  

				
	 January 1, 2007 - December 31, 2007:
	  		
		
	 Annual Capacity Price
	  	$	38.00/kW-Year
	 Annual Capacity Quantity
	  	 	83,000 kW
	 Excess Annual Capacity Price
	  	$	45.60/kW-Year
		
	 January 1, 2008 – February 28, 2008:
	  		
		
	 Annual Capacity Price
	  	 	0
	 Annual Capacity Quantity
	  	 	0
	 Excess Annual Capacity Price
	  	 	0

  

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 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month during
2007 and $5.75/kW-Month during 2008, rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13) during
the Option Period shall be as set forth in Section 7.1.5. 
 3.5.2.3.3 In the event that EMC exercises its option pursuant to
Section 3.5.2.3, and the Option Period is January 1, 2007 – August 31, 2008, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4
and the Excess Annual Capacity Charge set forth in Section 3.5.2.3.5. In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under 3.5.2.3.5
during the Option Period shall be as follows: 
  

			
	 January 1, 2007 - December 31, 2007:
	  	
		
	 Annual Capacity Price
	  	$38.00/kW-Year
	 Annual Capacity Quantity
	  	83,000 kW
	 Excess Annual Capacity Price
	  	$45.60/kW-Year
		
	 January 1, 2008 – August 31, 2008:
	  	
		
	 Annual Capacity Price
	  	$40.00/kW-Year
	 Annual Capacity Quantity
	  	86,000 kW
	 Excess Annual Capacity Price
	  	$48.00/kW-Year

 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month
during 2007 and $5.75/kW-Month during 2008, rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13)
during the Option Period shall be as set forth in Section 7.1.5. 
  

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 3.5.2.3.4 Base Annual Capacity Charge. The Base Annual Capacity Charge for a Year shall be equal
to the product of (i) the Annual Capacity Price for the Year ($/kW-Year) and (ii) the Annual Capacity Quantity for the Year (kW). The Base Annual Capacity Charge for the Option Period shall be billed in accordance with Article 13 in the
July 2007 statement and the July 2008 statement, if applicable. 
 3.5.2.3.5 Excess Annual Capacity Charge. The Excess Annual
Capacity Charge for a Year shall be equal to the product of (i) the Excess Annual Capacity Price for the Year ($/kW-Year) and (ii) the Excess Annual Amount for the Year (kW). The Excess Annual Amount for a Year shall be equal to the
product of (i) the EMC Excess Annual Capacity Quantity for the Year divided by the EMC Group Combined Excess Annual Capacity Quantity for the Year and (ii) the EMC Group Excess Annual Capacity Quantity for the Year. The Excess Annual
Capacity Charge for the Option Period shall be billed in accordance with Article 13 in the September 2007 and the September 2008 statement, if applicable, based on the actual Duke billing data during July and August 2007 and July and August 2008,
respectively. A sample calculation is provided in Attachment 3-1. 
 3.5.2.3.5.1 EMC Excess Annual Capacity Quantity. The EMC Excess
Annual Capacity Quantity for a Year shall be equal to the EMC Coincident Peak Demand for the Year minus EMC’s Base Obligation for the Hour in such Year in which the EMC Coincident Peak Demand occurs, minus the Annual Capacity Quantity for the
Year. In no event shall the EMC Excess Annual Capacity Quantity be less than zero. The EMC Coincident Peak Demand for a Year shall be equal to the EMC Hourly Demand that is coincident with the maximum integrated sixty (60) minute Duke Schedule
1 Demands during July and August of the Year. The EMC Hourly Demand for an Hour shall be equal to the integrated sixty (60) minute demand of EMC’s Native Load during the Hour. 
 3.5.2.3.5.2. EMC Group Combined Excess Annual Capacity Quantity. The EMC Group Combined Excess Annual Capacity Quantity for a Year shall be equal
to the sum of (i) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of this Agreement, (ii) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of the
Duke-Blue Ridge Agreement, and (iii) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of the Duke-Piedmont Agreement. 
 3.5.2.3.5.3 EMC Group Excess Annual Capacity Quantity. The EMC Group Excess Annual Capacity Quantity for a Year shall be equal to the EMC Group Coincident Peak Demand for the Year, minus the EMC Group’s
Base Obligation for the Hour in such Year in which the EMC Group Coincident Peak Demand occurs, minus the EMC Group Annual Capacity Quantity; but in no event shall the EMC Group Excess Annual Capacity Quantity be less than zero. The EMC Group
Coincident Peak Demand shall for a Year be equal to the sum of (i) the EMC Coincident Peak Demand for the Year as determined in Section 3.5.2.3.5.1 of this Agreement, (ii) the EMC Coincident Peak Demand for the Year as determined in
Section 3.5.2.3.5.1 of the Duke-Blue Ridge Agreement, and (iii) the EMC Coincident Peak Demand for the Year as determined in Section 3.5.2.3.5.1 of the Duke-Piedmont Agreement. 
  

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 3.5.2.4 Any Option Notice given by EMC pursuant to Section 3.5.2.3 shall be given in accordance with
Section 16.22 and shall state the Option Period elected. The Option Notice is effective when it is deemed given in accordance with Section 16.22. Once the Option Notice is given to Duke, it shall not be deemed amended, modified, or
otherwise revoked for any reason unless such amendment, modification, or revocation is mutually agreed to by both Parties in writing. 
 3.5.3 Termination for Failure of Condition Precedent. 
 3.5.3.1 Subject to the options granted to EMC under
Section 3.5.2.1 and 3.5.2.3, in the event that any of the conditions precedent set out in Sections 3.1(a) through (j) and Sections 3.2(a) through (i) are not satisfied or waived on or before November 30, 2006, then this Agreement
will terminate automatically on December 31, 2006, without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the other arising hereunder under any claim or theory
whatsoever. 
 Article 4 
 Sale of Electric Capacity and Energy 
 4.1 Classification of Services Provided. During the period beginning on the Commencement Date,
and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, Duke shall provide to EMC “FFR Supplemental Service”, as described in Section 4.2. Beginning January 1, 2011, throughout the
remainder of the Term of this Agreement, Duke shall provide to EMC “Partial Requirements Service”, as described in Section 4.3. 
 4.2 FFR
Supplemental Service. 
 4.2.1 Character of FFR Supplemental Service. For each Hour during the period beginning on the Commencement
Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, Duke shall sell and deliver, and EMC shall purchase and receive, all of the electric capacity and energy that EMC requires to serve
EMC’s Native Load in excess of EMC’s Base Obligation for such Hour. For example, if EMC’s Native Load during an Hour is 800 MWs, and EMC’s Base Obligation for such Hour is 600 MWs, Duke shall supply and deliver, and EMC shall
purchase and receive, 200 MWs of FFR Supplemental Service for such Hour. Duke shall supply and deliver FFR Supplemental Service in a manner that is as firm as, and otherwise comparable with, the manner in which Duke supplies Duke’s Native Load.
Duke shall be responsible for maintaining the generation reserves needed to meet its FFR Supplemental Service obligation. Notwithstanding anything in this Agreement to the contrary, Duke shall have no obligation to sell and deliver any electric
capacity or energy to EMC that is not required to serve EMC’s Native Load. 
 4.2.2 Amount of EMC’s Base Obligation.
EMC’s Base Obligation for each Hour beginning on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, shall be as set forth in Attachment 4-1. Notwithstanding the
preceding sentence, EMC’s Base Obligation shall be subject to modification (a) during Light Load Periods in accordance with the provisions of Attachment 4-2 or (b) in accordance with the provisions of Section 5.1.4 and
5.1.5. The amounts set forth on Attachment 4-1 reflect MWs delivered at a Delivery Point. 
  

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 4.2.3 Scheduling To Meet EMC’s Base Obligation. In order to meet EMC’s Base Obligation,
(a) MSCG shall be responsible for scheduling to the Transmission Provider electric energy under the PPA to serve EMC’s Native Load and (b) Duke, acting as Scheduling Agent, shall be responsible for scheduling to the Transmission
Provider, in accordance with the provisions of Article 8, electric energy to serve EMC’s Native Load from EMC’s entitlements to the resources described in Section 5.1.3, 5.1.4 or 5.1.5. The total amount of electric energy so scheduled
to the Transmission Provider in any Hour to serve EMC’s Native Load beginning on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, shall be the EMC Scheduled Amount;
provided that the EMC Scheduled Amount shall not exceed EMC’s Base Obligation for any such Hour. 
 4.2.4 Scheduling Shortfall.
For each Hour beginning on the Commencement Date, and continuing through December 31, 2010, or any portion thereof in which this Agreement is in effect, if, for any reason, including a Force Majeure as that term is defined herein or a
“force majeure”, “uncontrollable force” or a similar term defined in a third-party agreement, but not including Duke’s unexcused failure to comply with the provisions of Article 8, the EMC Scheduled Amount is less than
EMC’s Base Obligation for any Hour, there shall be a “Scheduling Shortfall” in the amount equal to the difference between EMC’s Base Obligation and the EMC Scheduled Amount in such Hour (“Scheduling Shortfall Amount”).
For any Hour that Duke receives information or a notice pursuant to Section 8.4.8 that there will be or has been a Scheduling Shortfall, Duke shall use Commercially Reasonable Efforts to procure and supply electric energy in a quantity
sufficient to supply the Scheduling Shortfall Amount for such Hour (“Replacement Energy”). In the event that, through the exercise of Commercially Reasonable Efforts, Duke procures Replacement Energy from a third party for resale to EMC,
EMC shall pay Duke for the total cost incurred by Duke to purchase and deliver the Replacement Energy. Duke’s curtailment of a Non-Firm Sale shall constitute a procurement of Replacement Energy from a third party and the total cost incurred by
Duke shall be (i) the foregone sales price for the Non-Firm Sale curtailed and (ii) if applicable, any charges imposed for changes to schedules for the sale of electric energy. In the event that Duke supplies Replacement Energy from its
own resources, EMC shall pay Duke for such Replacement Energy an amount equal to one hundred ten percent (110%) of Duke’s System Incremental Cost in supplying such Replacement Energy. The total charges for Replacement Energy for a Month,
as determined by this Section 4.2.4, shall constitute the Monthly Replacement Energy Charge. 
 4.2.4.1 It is expressly understood that
Section 4.2.4 shall not be construed or interpreted to (i) require Duke to curtail any Firm Sales in order to supply Replacement Energy to EMC, (ii) to curtail any Non-Firm Sales except as set forth in Section 4.2.6 in order to
supply such Replacement Energy to EMC, (iii) impose upon Duke any responsibility for providing Replacement Energy for a Scheduling Shortfall that occurs after the Transmission Provider’s deadline for scheduling transmission service
required for the delivery of such Replacement Energy, or (iv) affect in any way EMC’s rights and obligations under its Network Integration Transmission Service Agreement. 
  

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 4.2.4.2 In the event that there is or is expected to be a Scheduling Shortfall in connection with
(a) EMC or its Scheduling Agent having received notice (and in the event EMC receives notice providing Duke with evidence of such notice) of, or (b) pursuant to Section 8.4.8 Scheduling Agent having received notice of either
(i) the occurrence of a “force majeure” event under the PPA, as defined in Section 4.2.4.3, or (ii) the temporary impairment of generating resources underlying the WPSA, the SEPA Contract, or other resources to which EMC may
have an entitlement pursuant to Section 5.1.3, 5.1.4 or 5.1.5, such that all or a portion of EMC’s entitlements to electric energy under such agreements are or will be temporarily unavailable to EMC, then EMC may request Duke to sell
electric capacity and energy to EMC for the expected duration of such Scheduling Shortfall. In the event that EMC makes such a request, Duke shall exercise Commercially Reasonable Efforts to offer to supply electric capacity and energy to EMC under
rates, terms, and conditions that Duke determines to be commercially reasonable. If the Parties reach agreement on such a sale, then Duke shall sell and deliver and EMC shall purchase and receive the electric energy and such electric energy shall be
included in EMC Scheduled Amount. 
 4.2.4.3 For purposes of Section 4.2.4.2, the term “force majeure” means an event or
circumstance that: (i) prevents the party claiming to be affected by it from performing its obligations in whole or in part; (ii) is not within the reasonable control of the claiming party, or the result of the negligence of the claiming
party, and (iii) by the exercise of due diligence, the claiming party is unable to overcome in a commercially reasonable manner, and, without limiting the scope of the definition, includes acts of God, or the public enemy, or insurrection,
riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court order or governmental authority or arbitration award (so long as the claiming party has
not sought or has opposed, to the extent reasonable, such actions or restraints). It is expressly acknowledged that transmission service interruptions or curtailments imposed by a transmission provider in response to transmission capacity or
availability shortages shall not be “force majeure” events or circumstances for purposes of this Section 4.2.4.3. 
 4.2.5
EMC PPA Obligation. EMC shall retain all of its rights and obligations under the PPA, including the obligation to pay all costs incurred under the PPA. 
 4.2.6 EMC Obligation to Curtail Load. During any Hour in which there is a Scheduling Shortfall, and either (i) Duke does not replace such electric energy in accordance with Section 4.2.4 or
(ii) EMC has not made, or does not have in place, arrangements to replace such electric energy, EMC shall curtail an amount of EMC’s Native Load equal to the Scheduling Shortfall Amount; provided, however, Duke shall exercise Commercially
Reasonable Efforts within the time constraints that exist to first call upon any available EMC Demand Side Management Resource Program that would not otherwise be called upon absent the Scheduling Shortfall and then if necessary curtail Non-Firm
Sales to the extent of the Scheduling Shortfall before requiring EMC to curtail EMC’s Native Load pursuant to this Section 4.2.6. Any such EMC Native Load that has been curtailed shall be restored when the Scheduling Shortfall is no longer
occurring or when the Scheduling Shortfall has been replaced either by electric energy supplied (a) by Duke in accordance with Section 4.2.4 or this Section 4.2.6 or (b) under arrangements made by EMC with third parties.

  

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 4.3 Partial Requirements Service. 
 4.3.1 Character of Partial Requirements Service. For each Hour during the period beginning on January 1, 2011, and continuing through the termination of this Agreement, Duke shall sell and deliver, and EMC
shall purchase and receive, all of the electric capacity and energy that EMC requires to serve EMC’s Native Load in excess of the EMC Contract Resources. Duke shall be responsible for maintaining the generation reserves necessary to meet this
obligation. Duke shall supply Partial Requirements Service in a manner that is as firm as, and otherwise comparable with, the manner in which Duke supplies Duke’s Native Load. Notwithstanding anything in this Agreement to the contrary, Duke
shall have no obligation to sell and deliver any electric capacity or energy to EMC that is not required to serve EMC’s Native Load. 
 4.3.2 Scheduling of EMC Contract Resources To Serve EMC Native Load. For each Hour beginning on January 1, 2011, and continuing through the Term of this Agreement, EMC’s contractual entitlement to electric energy from the
Dispatched Combined Cycle Resources and from the Baseload Resources shall be scheduled in accordance with the provisions of Sections 4.3.3 and 4.3.4, respectively. 
 4.3.3 Scheduling of the Combined Cycle Resources. Duke may schedule, in accordance with Attachment 4-3 and Article 8, each of the Combined Cycle Resources pursuant to Duke’s economic dispatch as
necessary to serve Duke’s total electric energy obligations. Duke shall make no adverse distinction against the Combined Cycle Resources in determining the dispatch order of Duke’s Generation System and the Combined Cycle Resources. The
Combined Cycle Resources that Duke schedules pursuant to economic dispatch shall be referred to as the “Dispatched Combined Cycle Resources”. Except as provided in Section 4.3.3.1 and Section 4.3.3.2, EMC shall be solely
responsible for all costs associated with the Combined Cycle Resources. 
 4.3.3.1 Duke shall not be obligated to pay for any costs that EMC
incurs as a result of Duke’s dispatch of the Combined Cycle Resources to the extent that Duke’s dispatch of such Combined Cycle Resources is for the purpose of serving Duke’s Native Load and, during any Year, Duke’s dispatch of a
Combined Cycle Resource for that purpose does not exceed an Annual Capacity Factor of twenty percent (20%). In the event and at such time during a Year that Duke’s dispatch of a Combined Cycle Resource to serve Duke’s Native Load exceeds
an Annual Capacity Factor of twenty percent (20%), Duke shall pay EMC, in the manner and time provided for in Article 13, the additional Energy Cost that EMC incurs as a result of Duke’s dispatch of such Combined Cycle Resource for the
remainder of the Year. For example, if a Dispatched Combined Cycle Resource has a generating capacity of one hundred (100) MWs during a Year and, as of 11:59:59 p.m. on November 30 of such Year, Duke has dispatched such resource for
175,200 MWhs for the purpose of serving Duke’s Native Load, Duke shall reimburse EMC for the Energy Costs that EMC incurs in December of such Year as a result of Duke’s dispatch of such Dispatched Combined Cycle Resource. For the purpose
of this Section 4.3.3.1, “Annual Capacity Factor” means the total amount of electric energy generated by a Dispatched Combined Cycle Resource for the purpose of serving Duke’s Native Load during a Year divided by the product of
(a) the total generating capacity of such Dispatched Combined Cycle Resource and (b) 8,784 (during a leap year) or 8,760 (during a Year other than a leap year), multiplied by one hundred percent (100%). 
  

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 4.3.3.2 In the event that Duke’s dispatch of one or more of the Combined Cycle Resources is for any
purpose other than to serve Duke’s Native Load, Duke shall pay EMC, in the manner and time provided for in Article 13, the additional Energy Cost that EMC incurs as a result of Duke’s dispatch of such Combined Cycle Resource(s).

 4.3.3.3 For purposes of Sections 4.3.3.1 and 4.3.3.2, “Energy Cost” means, with respect to any Dispatched Combined Cycle
Resource, all variable costs incurred by EMC that are associated with the production of electric energy under the WPSA, including the cost of fuel, start charges, and any other variable charges incurred by EMC under the WPSA in connection with the
electric energy dispatched by Duke from such Combined Cycle Resource regardless of NCEMC’s actual generating cost or NCEMC’s contractual source of the electric energy. 
 4.3.4 Scheduling of Baseload Resources. Duke shall schedule, in accordance with Article 8, all of the Baseload Resources to the full extent
that EMC’s entitlement to such resources are available to EMC and such electric energy shall be used to serve EMC’s Native Load. EMC shall be solely responsible for all costs associated with the Baseload Resources. The Baseload Resources
that Duke schedules pursuant to this Section 4.3.4 shall be referred to as “Dispatched Baseload Resources”. 
 4.4 Excepted Load.
Notwithstanding anything to the contrary herein, Duke shall have no obligation to supply electric capacity or energy required by EMC to serve Excepted Load. Excepted Load shall consist of EMC load that is either (a) Non-Conforming Load or
(b) Non-Duke Control Area Load. Non-Conforming Load shall consist of (i) EMC load resulting from the merger of EMC with another electric membership corporation or other entity (except to the extent such load was, at the time of the merger,
already being served by Duke under an agreement substantially similar to this Agreement), and (ii) EMC wholesale load. Non-Conforming Load shall also consist of discrete EMC load (a) to which electric service from EMC shall have commenced
after the Effective Date, (b) that has a projected peak demand in excess of twenty-five (25) MW for the Year in which electric service from the EMC commences, and (c) which is projected to change within a one-minute period by a
significant quantity on a recurring basis due to the nature of the retail customer’s operations (e.g., without limitation, an arc furnace). 
 4.5 Good Title. Electric energy that is delivered by Duke to EMC shall be free and clear of all liens, Claims, and encumbrances at the Delivery Points, where title to electric energy provided by Duke hereunder shall transfer to EMC.
Electric energy that is delivered by EMC to Duke shall be free and clear of all liens, Claims, and encumbrances at the point where title to the electric energy is transferred to Duke. 
 4.6 Power Quality. All electric energy provided hereunder at the point of delivery shall be three (3) phase, sixty (60) hertz, and at system nominal voltages. 
  

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 Article 5 
 EMC Resources 
 5.1 EMC Contract Resources (Commencement Date - December 31, 2010). 
 5.1.1 Identification of Resources. Except as provided in Section 5.4.1, EMC’s Contract Resources during the period commencing on the
Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, shall consist of EMC’s entitlement to electric capacity and energy under the PPA and such additional generation or
purchased power resources or entitlements as EMC may acquire pursuant to Sections 5.1.3, 5.1.4 and 5.1.5. The FFR Resource is listed in Attachment 4-1. Except as provided in this Section 5.1.1, EMC shall not, without first
obtaining Duke’s prior written consent, enter into any other contracts for, or acquire any ownership interest in or contractual entitlement to, any additional electric generating resources or electric capacity or energy under which electric
capacity and energy would be used to serve EMC’s Native Load during the Term. 
 5.1.2 Changes to FFR Resources. During the
period commencing on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, EMC shall not: (a) take any action that would materially affect the quantity or quality of
MSCG’s service obligations under the PPA without first obtaining Duke’s prior written consent, or (b) agree to any modification to provisions of the PPA, the WPSA, or the SEPA Contract that would increase or decrease EMC’s
entitlement to electric capacity or energy under such agreements and for which EMC’s consent is required (except as provided in Section 5.1.4) without first obtaining Duke’s consent to such modification. 
 5.1.3 Resource Impairment. In the event that all or a portion of the FFR Resource, or any other EMC Contract Resource, is terminated or becomes
permanently impaired, EMC shall acquire, at EMC’s expense, a substitute resource (backed by reserves in an amount equal to that required under Duke’s Generation Planning Practices) that is of substantially equivalent size and comparable
reliability to the EMC Contract Resource, or portion thereof, that such substitute is replacing. 
 5.1.4 New Catawba Resource. In the
event that NCEMC acquires all or part of Saluda River Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station, and sells, allocates or transfers a percentage of that entitlement with such entitlement being made
available throughout the Year to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Base Obligation shall be increased by an amount equal to the amount of the entitlement so acquired by EMC. Upon Duke’s request,
EMC shall provide evidence reasonably satisfactory to Duke demonstrating that such entitlement in the Catawba Nuclear Station is backed by sufficient and reliable electric system generating reserves. Duke shall limit such requests to one
(1) request per Year; provided, that if Duke reasonably believes that the sufficiency or reliability of the electric system generating reserves backing EMC’s entitlement in the Catawba Nuclear Station may have changed since Duke’s
last such request, this limitation shall not apply. In the event that EMC fails to demonstrate that its entitlement in the Catawba Nuclear Station is backed by sufficient and reliable generating reserves, Duke shall supply, and EMC shall purchase,
such reserves in an amount equal to that required under Duke’s Generation 
  

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 Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as
determined under the prior sentence) supplied by Duke to EMC at the then-applicable Monthly Demand Charge. Duke’s provision and EMC’s purchase of such reserves shall not affect the determination of EMC’s Base Obligation. This Monthly
charge shall be billed by Duke in accordance with the provisions of Article 13. 
 5.1.4.1 In the event that NCEMC purchases electric
capacity and energy from Duke in lieu of NCEMC’s acquisition of all or a part of Saluda River Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station as provided in Section 5.1.4, and NCEMC sells, allocates
or transfers a portion of such electric capacity and energy to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Base Obligation shall be increased by an amount equal to the amount of the electric capacity and energy
so acquired by EMC. 
 5.1.5 Non-Consent Modification of EMC’s Contract Resources. In the event that EMC’s entitlements to
electric capacity and energy are reduced in accordance with Section 2.9(b) or Section 2.9(c) of the WPSA or Sections 2.2, 2.3 and 2.4 of the SEPA Contract, the amount of the EMC’s Base Obligation shall not be affected and the
provisions of Section 4.2.4.2 shall apply, except that if the Parties are unable to reach agreement as to the rates, terms and conditions under which Duke would sell electric capacity and energy to EMC, the provisions of Section 5.1.3
shall apply. EMC shall provide written notice to Duke as soon as reasonably practicable after EMC becomes aware of any modificaton to EMC’s entitlement to electric capacity and energy under the WPSA or SEPA Contract pursuant to this
Section 5.1.5. In the event that EMC’s entitlements to electric capacity and energy are increased in accordance with Section 2.9(b) or Section 2.9(c) of the WPSA or Sections 2.2, 2.3, 2.4 and 2.8 of the SEPA Contract, then,
prior to the effective date of such increase, EMC may elect either to (a) increase EMC’s Base Obligation by the same amount and to the same extent as EMC’s entitlements to electric capacity and energy are increased, or (b) make
arrangements for the sale of EMC’s entitlements to such electric capacity and energy to a third party or to Duke. If EMC fails to complete the arrangements described in (b) of the preceding sentence by the effective date of the increase in
entitlements, then, as of the effective date of the increase in entitlements, the EMC’s Base Obligation automatically will be increased as described in (a) of the preceding sentence. 
 5.2 EMC Contract Resources (January 1, 2011 - Termination of Agreement). 
 5.2.1 Identification of Contract Resources. Except as provided in Section 5.4.1, EMC’s Contract Resources during the period January 1, 2011, through the termination of this Agreement shall
consist of EMC’s entitlements to electric capacity and energy under the contracts listed in Attachment 4-3 and such additional generation or purchased power resources or entitlements as EMC may acquire pursuant to Sections 5.2.3,
5.2.4, and 5.2.5. EMC’s entitlements under the contracts that are listed in Attachment 4-3 shall be referred to as the Partial Requirements Resources. Partial Requirements Resources consist of two (2) categories of entitlements:
Baseload Resources and Combined Cycle Resources. The amount and the material cost and operational terms and conditions of the Baseload Resources and Combined Cycle Resources shall be as set forth in Attachment 4-3, subject to modification in
accordance with Sections 5.2.3 and 5.2.4. Except as provided in this Section 5.2.1, EMC shall not, without first obtaining Duke’s prior written consent, enter into any other contracts for, or acquire any ownership interest 

 

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 in or contractual entitlement to, any additional electric generating resources or electric capacity or energy under which
electric capacity and energy would be used to serve EMC’s Native Load during the Term. 
 5.2.1.1 Extension of WPSA and SEPA
Contract. Consistent with the provisions of Section 5.2.2, EMC shall have the right, without the prior consent of Duke, to extend the term of the WPSA or the SEPA Contract under substantially the same terms and conditions as exist at the
time that EMC seeks to extend the term of the WPSA or the SEPA Contract. If EMC extends the term of the WPSA or the SEPA Contract in accordance with this Section 5.2.1.1, the EMC Contract Resources listed in Attachment 4-3 shall be
deemed to be changed accordingly. 
 5.2.2 Changes To Partial Requirements Resources. Commencing January 1, 2011, through the
termination of this Agreement, EMC shall not (a) take any action that would materially affect the quantity or quality of EMC’s entitlement to electric capacity and energy from the Partial Requirements Resources without first obtaining
Duke’s prior written consent, or (b) agree to any modification to provisions of the WPSA or the SEPA Contract that would increase or decrease EMC’s entitlement to electric capacity or energy under such agreements and for which
EMC’s consent is required (except as provided in Section 5.2.4) without first obtaining Duke’s consent to such modification. 
 5.2.2.1 Modifications Effective After Termination. Notwithstanding the provisions of Section 5.2.2, EMC shall be permitted to agree to any resource modification under the WPSA or the SEPA Contract without obtaining Duke’s
consent to the extent that such resource modification will become effective after the Term; provided, that if such resource modification will become effective prior to the end of the Term, EMC’s Partial Requirements Resources and Duke’s
obligation to provide Partial Requirements Service shall not be modified prior to the date that this Agreement is terminated unless Duke consents to such modification. 
 5.2.2.2 Sufficiency of Reserves. Upon Duke’s request, EMC shall provide evidence reasonably satisfactory to Duke demonstrating that each of EMC’s Partial Requirements Resources is backed by sufficient
and reliable electric system generating reserves. Duke shall limit such requests to one (1) request per Year with respect to any Partial Requirements Resource; provided, that if Duke reasonably believes that the sufficiency or reliability of
the electric system reserves backing any Partial Requirements Resource may have changed since Duke’s last such request, this limitation shall not apply with respect to that Partial Requirements Resource. In the event that EMC fails to
demonstrate that its entitlement in a Partial Requirements Resource is backed by sufficient and reliable generating reserves, Duke shall supply, and EMC shall purchase, such reserves in an amount equal to that required under Duke’s Generation
Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as determined under the prior sentence) supplied by Duke to EMC and the then applicable Monthly Demand Charge. This Monthly charge
shall be billed by Duke in accordance with the provisions of Article 13. Duke’s provision and EMC’s purchase of such reserves shall not affect the determination of the amount of Partial Requirements Resources, Baseload Resources or
Combined Cycle Resources. EMC shall provide written notice to Duke as soon as reasonably practicable after EMC becomes aware of a material change to the seller’s service obligations under the contracts listed in Attachment 4-3; provided,
that such notice shall be for information purposes only, and shall not affect any other obligations of either Party under this Agreement. 
  

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 5.2.3 Non-Consent Partial Requirements Resource Modifications. In the event that EMC’s
entitlements are modified pursuant to Section 2.9(b) or Section 2.9(c) of the WPSA or Sections 2.2, 2.3, 2.4 and 2.8 of the SEPA Contract, EMC’s Partial Requirements Resources shall be modified in the same amount and to the same
extent. To the extent that a Partial Requirements Resource is modified pursuant to this Section 5.2.3, and the modification changes EMC’s entitlement in a resource listed as a Baseload Resource in Attachment 4-3, the amount of such
Baseload Resource, as listed in Attachment 4-3, shall be deemed to be changed accordingly. EMC shall provide written notice to Duke as soon as reasonably practicable after EMC becomes aware of any modification to EMC’s entitlement to
electric capacity and energy under the WPSA or SEPA Contract pursuant to this Section 5.2.3. To the extent that a Partial Requirements Resource is modified pursuant to this Section 5.2.3, and the modification changes EMC’s entitlement
in a resource listed as a Combined Cycle Resource in Attachment 4-3, the amount of such Combined Cycle Resource, as listed in Attachment 4-3, shall be deemed to be changed accordingly. 
 5.2.4 New Catawba Resource. In the event that NCEMC acquires all or part of Saluda River Electric Cooperative’s existing ownership interest
in the Catawba Nuclear Station, and sells, allocates or transfers a percentage of that entitlement with such entitlement being made available throughout the Year to EMC (through modification of the WPSA or pursuant to a new contract), the
entitlement or resource so acquired by EMC shall constitute an additional Partial Requirements Resource, and shall be deemed to be an additional Baseload Resource. Upon Duke’s request, EMC shall provide evidence reasonably satisfactory to Duke
demonstrating that such entitlement in the Catawba Nuclear Station is backed by sufficient and reliable electric system generating reserves. Duke shall limit such requests to one (1) request per year; provided, that if Duke reasonably believes
that the sufficiency or reliability of the electric system generating reserves backing EMC’s entitlement in the Catawba Nuclear Station may have changed since Duke’s last such request, this limitation shall not apply. In the event that EMC
fails to demonstrate that its entitlement in the Catawba Nuclear Station is backed by sufficient and reliable generating reserves, Duke shall supply, and EMC shall purchase, such reserves in an amount equal to that required under Duke’s
Generation Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as determined under the prior sentence) supplied by Duke to EMC and the then-applicable Monthly Demand Charge. This Monthly
charge shall be billed by Duke in accordance with the provisions of Article 13. Duke’s provision and EMC’s purchase of such reserves shall not affect the determination of the amount of Partial Requirements Resources, Baseload
Resources or Combined Cycle Resources. 
 5.2.4.1 In the event that NCEMC purchases electric capacity and energy from Duke in lieu of
NCEMC’s acquisition of all or a part of Saluda River Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station as provided in Section 5.2.4, and NCEMC sells, allocates or transfers a portion of such capacity
and energy to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Baseload Resources shall be increased by an amount equal to the amount of the electric capacity and energy so acquired by EMC. 
  

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 5.2.5 Resource Impairment. In the event that all or a portion of an EMC Contract Resource is
terminated or becomes permanently impaired, EMC shall acquire, at EMC’s cost, a substitute resource (backed by reserves in an amount equal to that required under Duke’s Generation Planning Practices) that is of substantially equivalent
size and comparable reliability to the EMC Contract Resource, or portion thereof, that such substitute resource is replacing, and that Duke reasonably agrees is sufficiently reliable. EMC’s acquisition of such substitute resource shall not
affect the determination of the amount of Partial Requirements Resources, Baseload Resources or Combined Cycle Resources. 
 5.3 No Duke Obligation for
Customer Resources. Unless otherwise explicitly provided in this Agreement, nothing herein shall be interpreted or construed as imposing upon Duke any obligations or liabilities, or for transferring to Duke any EMC obligations or liabilities,
under or otherwise pertaining to any EMC Contract Resource, nor shall anything in this Agreement be interpreted or construed as creating or implying any contractual or other relationship between Duke and any other party as to a EMC Contract
Resource. 
 5.4 New Customer Resources. Except as provided in Section 5.4.1, Duke shall have no obligation to amend this Agreement and EMC shall
not make an application to FERC requesting that FERC require that any amendment be made to this Agreement, to accommodate any contractual entitlement to and/or ownership interest in or pertaining to any new electric capacity and/or energy resource
that EMC may obtain after the Effective Date. 
 5.4.1 PURPA Resources. Nothing herein shall limit EMC’s right to purchase
electric capacity and energy from a Qualifying Facility or other renewable resources pursuant to PURPA (“PURPA Resource”). If, during the Term, EMC purchases electric capacity and energy from a PURPA Resource with a nameplate capacity
equal to or greater than one (1) MW, then, for each Month during the period of such purchase: (i) the average hourly integrated electric energy delivered to EMC by such PURPA Resource during the Hours used for determination of the EMC
Monthly Demand Quantity determined in accordance with Section 7.1.4.1 or used for determination of the Monthly Billing Demand determined in accordance with Section 7.2.2.2 or Section 7.3.2.2, increased for losses between the point of
measurement of EMC’s Native Load and the Duke generation level, shall be added to the EMC Monthly Demand Quantity determined in accordance with Section 7.1.4.1 or to the Monthly Billing Demand determined in accordance with
Section 7.2.2.2 or Section 7.3.2.2 for such Month, as applicable; (ii) for purposes of calculating the electric energy charges under Sections 7.1.5, 7.2.3 and 7.3.3, as applicable, the amount of electric energy provided to EMC by such
PURPA Resource during an Hour, increased for losses between the point of measurement of EMC’s Native Load and the Duke generation level, shall be added to EMC’s Native Load and to the EMC Group Native Load for such Hour; and
(iii) Duke shall credit EMC, on a Monthly basis, an amount equal to the electric capacity and energy credits to which EMC would be entitled as set forth in Duke’s NCUC retail electric tariff Schedule PP-H or Schedule PP-N (as applicable),
Interconnected to Distribution System or Transmission System (as applicable), or its successor tariff, if the electric capacity and electric energy provided to EMC by such PURPA Resource were provided to Duke pursuant to and in accordance with such
schedules. The interconnection to Duke’s (rather than the EMC’s) Distribution System or Transmission System, as those terms are defined in the schedules, will determine whether the Distribution System or Transmission System rates apply.
EMC will coordinate with Duke to determine the proper application of these schedules. If Schedule PP-H 
  

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 or Schedule PP-N do not apply to the PURPA Resource, then Duke shall credit EMC, on a Monthly basis, an amount equal to
the electric capacity and energy credits to which EMC would be entitled under PURPA if the electric capacity and electric energy provided to EMC by such PURPA Resource were provided to Duke pursuant to PURPA. EMC’s purchase of the electric
capacity and energy from a PURPA Resource shall not affect the determination of the Annual Capacity Quantity determined in accordance with Sections 3.5.2.3.1, 3.5.2.3.2 or 3.5.2.3.3, as applicable. 
 Article 6 
 Priority of Service

 6.1 Interruption of FFR Supplemental Service and Partial Requirements Service. FFR Supplemental Service and Partial Requirements Service shall
have an interruption priority equivalent to Duke’s Native Load. It is expressly understood and agreed that, except for Duke’s failure to comply with Section 6.2 or as provided in Section 6.4, Duke shall not be liable to EMC for
damages resulting from any such interruptions or impairment of FFR Supplemental Service or Partial Requirements Service. Duke shall use Commercially Reasonable Efforts to notify EMC by telephone of any scheduled interruption or scheduled impairment
of service hereunder and shall use Commercially Reasonable Efforts to confirm such notice by facsimile, electronic mail, or letter on the same date such notice was given. Duke shall notify EMC by telephone of any unscheduled interruption or
impairment of service hereunder as soon as reasonably practicable under the circumstances resulting in such unscheduled interruption or impairment of service. Duke shall use Commercially Reasonable Efforts to remove all causes of such interrupted or
impaired service hereunder. 
 6.2 Curtailments of Load. Except as provided in Section 4.2.6, EMC’s Native Load shall be subject to
curtailment only in accordance with this Section 6.2. In the event that Duke curtails Duke Native Load for any reason, including Force Majeure, EMC shall curtail its load as directed by Duke. Except as provided in Section 4.2.6, Duke shall
not adversely distinguish against EMC’s Native Load in curtailing Duke’s Native Load and directing EMC to curtail EMC’s Native Load; provided, however, that Duke has sole responsibility to design all curtailments, and may order any
manner of curtailment that Duke believes is appropriate so long as EMC’s Native Load and Duke’s Native Load present in the electrical area being curtailed are curtailed on a non-discriminatory basis. In permitting EMC to restore EMC’s
Native Load and restoring Duke’s Native Load that was curtailed, Duke shall not adversely distinguish against EMC’s Native Load, except as provided in Section 4.2.6. The load curtailment and restoration provisions set forth in this
Section 6.2 are in addition to, and without limitation of, the load curtailment and restoration provisions set forth in Section 4.2.6. 
 6.3
Emergency Load Curtailment Program. EMC agrees to implement an emergency load curtailment program for the curtailment of EMC’s Native Load in the event a load curtailment order is made by Duke. EMC shall comply with its obligation to
implement and maintain an emergency load curtailment program and to curtail EMC’s Native Load in the manner specified by Section 6.2. 
  

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 6.4 Substitute Energy. In the event that Duke fails to deliver a sufficient quantity of electric energy to meet
its obligations to provide FFR Supplemental Service or Partial Requirements Service, as the case may be, and Duke’s failure to deliver such electric energy is not pursuant to a curtailment permitted under Section 4.2.6 or 6.2 of this
Agreement, or is otherwise excused under this Agreement, Duke shall pay to EMC an amount equal to EMC’s Cover Costs, if any, incurred for the electric energy that EMC obtained to replace such electric energy (“Substitute Energy”) Duke
failed to supply. EMC’s Cover Costs shall be equal to Substitute Energy Costs incurred by EMC for the Substitute Energy minus the costs that EMC would have incurred had Duke supplied the electric energy to EMC. EMC shall bill its Cover Costs to
Duke in accordance with the provisions of Article 13. In the event that EMC incurs Cover Costs for Substitute Energy over a period that extends past the Month in which Duke’s failure to deliver electric energy occurs, then Duke shall pay
the Cover Costs incurred in the following Month(s) in accordance with the billing and payment provisions of Article 13. 
 6.5 Substitute Energy
Costs. Substitute Energy Costs shall be equal to (i) in the case in which EMC contracts with an energy supplier to provide Substitute Energy to EMC, the cost that EMC, acting in a commercially reasonable manner, incurs to purchase such
Substitute Energy, or (ii) in the case in which Substitute Energy is provided to EMC by the Control Area operator, system operator, or similar entity providing such service on behalf of load (or load serving entities), the cost to EMC imposed
on EMC by such Control Area operator, system operator, or other entity providing such Substitute Energy. In either case, Substitute Energy Costs shall include ancillary services charges, if any, reasonably incurred by EMC to the point where electric
energy is delivered to the Transmission System or imposed to the point where electric energy is delivered to the Transmission System by the Control Area operator, system operator, or other entity providing Substitute Energy, including congestion
charges, energy imbalance charges, backup capacity charges, replacement capacity charges, deficient capacity charges, commitment fees, ratcheted demand and similar charges incurred by EMC in obtaining such Substitute Energy. 
 Article 7 
 Capacity and Energy
Charges 
 7.1 Charges During Commencement Date - December 31, 2006. 
 7.1.1 General. For FFR Supplemental Service provided during the period beginning on the Commencement Date, and continuing through December 31, 2006, EMC shall pay to Duke the Monthly Demand Charge set
forth in Section 7.1.4, the Duke Monthly Energy Charge set forth in Section 7.1.5.1, if applicable, the Monthly Scheduling Agent Service Charge set forth in Section 7.1.6 and, if applicable, the Monthly Reserve Capacity Charge set
forth in Section 7.4, minus the EMC Monthly Energy Credit set forth in Section 7.1.5.5. In addition, the Duke Monthly Reconciliation Charge, Rutherford Monthly Reconciliation Credit, and the Monthly Inter-EMC Energy Transfer Reconciliation
Charge shall be billed or credited as provided in Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13. The charges set forth in this Section 7.1 are in addition to the other charges set forth in other sections of this Agreement. 
 7.1.2 [intentionally omitted]. 
  

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 7.1.3 [intentionally omitted]. 
 7.1.4 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to the product of (i) the Monthly Demand Rate for the Year
($/kW-Month) and (ii) the Monthly Demand Amount for the Month (kW). The Monthly Demand Rate for 2006 shall be $0.75/kW-Month. The Monthly Demand Amount for a Month shall be equal to the product of (i) the EMC Monthly Demand Quantity for
the Month divided by the EMC Group Combined Monthly Demand Quantity for the Month and (ii) the EMC Group Monthly Demand Quantity for the Month. In no event shall the Monthly Demand Quantity be less than zero. A sample calculation is provided in
Attachment 7-2. 
 7.1.4.1 EMC Monthly Demand Quantity. The EMC Monthly Demand Quantity for a Month shall be equal to the EMC
Hourly Demand at the time of the Maximum Demand Hour for the Month minus EMC’s Base Obligation at the time of the Maximum Demand Hour. In no event shall the EMC Monthly Demand Quantity be less than zero. 
 7.1.4.2 EMC Group Combined Monthly Demand Quantity. The EMC Group Combined Monthly Demand Quantity for a Month shall be equal to the sum of
(i) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of this Agreement, (ii) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of the Duke-Blue Ridge Agreement, and (iii) the
EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of the Duke-Piedmont Agreement. 
 7.1.4.3 EMC Group Monthly
Demand Quantity. The EMC Group Monthly Demand Quantity for a Month shall be equal to the difference between the EMC Group Hourly Demand and the EMC Group’s Base Obligation during the Maximum Demand Hour of the Month, but in no event shall
the EMC Group Monthly Demand Quantity for a Month be less than zero. The EMC Group Hourly Demand for an Hour shall be equal to the integrated sixty (60) minute demand of the EMC Group Native Load during the Hour. The Maximum Demand Hour of a
Month shall be the Hour in which the positive difference between the EMC Group Native Load and the EMC Group’s Base Obligation is the greatest (as determined by subtracting the EMC Group’s Base Obligation from the EMC Group Native Load in
every Hour of the Month, to determine the Hour in which such maximum difference for the Month occurs). 
 7.1.5 Monthly Energy
Charges. 
 7.1.5.1 Duke Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the sum of the Duke
Hourly Energy Charges for the Month. The Duke Hourly Energy Charge for an Hour shall be equal to the sum of the Rutherford Allocated Share of the Duke Total Hourly Energy Charge for the Hour plus the Rutherford Allocated Share of the Inter-EMC
Energy Charge for the Hour. 
 7.1.5.2 Duke Total Hourly Energy Charge. The Duke Total Hourly Energy Charge for an Hour shall be equal
to the product of (i) one hundred thirteen percent (113%) of Duke’s Territorial Incremental Cost for the Hour and (ii) the EMC Group Energy Purchase Amount for the Hour. The amount of electric energy delivered by Duke to the EMC
Group during any Hour shall be calculated as set forth in Section 7.1.5.10. 
  

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 7.1.5.3 Rutherford Allocated Share of Duke Total Hourly Energy Charge. The Rutherford Allocated
Share of the Duke Total Hourly Energy Charge for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Rutherford Allocated Share of the Duke Total Hourly Energy Charge for an Hour is shown in
Attachment 7-4. 
 7.1.5.4 Rutherford Allocated Share of Inter-EMC Energy Charge. The Rutherford Allocated Share of the
Inter-EMC Energy Charge for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Rutherford Allocated Share of the Inter-EMC Energy Charge for an Hour is shown in
Attachment 7-4. 
 7.1.5.5 EMC Monthly Energy Credit. The EMC Monthly Energy Credit for a Month shall be equal to the sum
of the EMC Hourly Energy Credits for the Month. The EMC Hourly Energy Credit for an Hour shall be equal to the sum of the Rutherford Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour plus the Rutherford Allocated Share of the
Inter-EMC Energy Credit for the Hour. 
 7.1.5.6 EMC Group Total Hourly Energy Credit. The EMC Group Total Hourly Energy Credit for an
Hour shall be equal to the product of (i) ninety percent (90%) of Duke’s Territorial Decremental Cost for the Hour and (ii) the EMC Group Energy Credit Amount for the Hour. The amount of electric energy delivered by the EMC Group
to Duke during any Hour shall be calculated as set forth in Section 7.1.5.10. 
 7.1.5.7 Rutherford Allocated Share of EMC Group
Total Hourly Energy Credit. The Rutherford Allocated Share of the EMC Group Total Hourly Energy Credit for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Rutherford Allocated Share of
the EMC Group Total Hourly Energy Credit for an Hour is shown in Attachment 7-4. 
 7.1.5.8 Rutherford Allocated Share of Inter-EMC
Energy Credit. The Rutherford Allocated Share of the Inter-EMC Energy Credit for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Rutherford Allocated Share of the Inter-EMC Energy
Credit for an Hour is shown in Attachment 7-4. 
 7.1.5.9 Calculation of Rutherford Hourly Energy Amounts. The amount of
electric energy delivered by Duke to Rutherford, and by Rutherford to Duke for an Hour, shall be calculated as follows: electric energy scheduled under this Agreement shall be scheduled using two (2) dynamic (instantaneous) signals representing
the difference between EMC’s Native Load and EMC’s Base Obligation. At the time of this Agreement, these signals are sampled once every four (4) seconds; the time period between each sample as defined herein shall be referred to as an
“Interval”. The time duration of the Intervals shall be subject to change based on Duke’s standard operating practices. A signal during an Interval in which EMC’s Native Load exceeds EMC’s Base Obligation shall be referred
to herein as an EMC Call Signal, indicating electric energy supplied by Duke to Rutherford. A signal during an Interval in which EMC’s Base Obligation exceeds EMC’s Native Load shall be referred to herein as an EMC Put Signal, indicating
electric energy being supplied by Rutherford to Duke. The integrated value of the EMC Call Signals (separate from and not combined with the EMC Put 
  

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 Signals) summed across all Intervals during the Hour shall be used as the amount of electric energy supplied by Duke to
Rutherford for the Hour, and the integrated value of the EMC Put Signals (separate from and not combined with the EMC Call Signals) summed across all Intervals during the Hour shall be used as the amount of electric energy supplied by Rutherford to
Duke for the Hour. The amount of electric energy supplied by Duke to Rutherford for the Hour, as calculated in this Section 7.1.5.9, shall be referred to herein as the Rutherford Energy Purchase Amount for the Hour. The amount of electric
energy supplied by Rutherford to Duke for the Hour, as determined in this Section 7.1.5.9, shall be referred to herein as the Rutherford Energy Credit Amount for the Hour. An example showing the calculation of such amounts is shown in
Attachment 7-5. 
 7.1.5.10 Calculation of EMC Group Energy Amounts. The amount of electric energy delivered by Duke to the EMC
Group, and by the EMC Group to Duke, for the Hour shall be calculated as follows: Electric energy scheduled under the Partial Requirements Agreements shall be scheduled using two (2) dynamic (instantaneous) signals representing the differences
between the EMC Group Native Load and the EMC Group’s Base Obligation. At the time of this Agreement, these signals are sampled once every four (4) seconds; the time period between each sample as defined herein shall be referred to as an
“Interval”. The time duration of the Intervals shall be subject to change based on Duke’s standard operating practices. A signal during an Interval in which EMC Group’s Native Load exceeds EMC Group’s Base Obligation shall
be referred to herein as an EMC Group Call Signal, indicating electric energy supplied by Duke to the EMC Group. A signal during an Interval in which EMC Group’s Base Obligation exceeds EMC Group’s Native Load shall be referred to herein
as an EMC Group Put Signal, indicating electric energy being supplied by EMC Group to Duke. The integrated value of the EMC Group Call Signals (separate from and not combined with the EMC Group Put Signals) summed across all Intervals during the
Hour shall be used as the amount of electric energy supplied by Duke to the EMC Group for the Hour, and the integrated value of the EMC Group Put Signals (separate from and not combined with the EMC Group Call Signals) summed across all Intervals
during the Hour shall be used as the amount of electric energy supplied by the EMC Group to Duke for the Hour. The amount of electric energy supplied by Duke to EMC Group for the Hour, as calculated in this Section 7.1.5.10, shall be referred
to herein as EMC Group Energy Purchase Amount for the Hour. The amount of electric energy supplied by the EMC Group to Duke for the Hour, as determined in this Section 7.1.5.10, shall be referred to herein as the EMC Group Energy Credit Amount
for the Hour. An example showing the calculation of such amounts is shown in Attachment 7-6. 
 7.1.5.11 Duke Monthly
Reconciliation Charge. The Duke Monthly Reconciliation Charge for a Month shall be equal to the sum of the Duke Hourly Reconciliation Charges for the Month. The Duke Hourly Reconciliation Charge for an Hour shall be equal to the product of
(a) the Duke Total Hourly Energy Charge for the Hour minus the Duke Reconciliation Amount for the Hour and (b) the Reconciliation Allocation Factor. The Duke Reconciliation Amount for an Hour shall be equal to the sum of (i) the
Rutherford Allocated Share of the Duke Total Hourly Energy Charge for the Hour as set forth in Section 7.1.5.3 of this Agreement, (ii) the Piedmont Allocated Share of the Duke Total Hourly Energy Charge for the Hour as set forth in
Section 7.1.5.3 of the Duke-Piedmont Agreement, and (iii) the Blue Ridge Allocated Share of the Duke Total Hourly Energy Charge for the Hour as set forth in Section 7.1.5.3 of the Duke-Blue Ridge Agreement. If the Duke Monthly
Reconciliation Charge is positive, EMC shall pay such amount to Duke; if the Duke Monthly Reconciliation Charge is negative, such amount shall be credited to EMC. 
  

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 7.1.5.12 Rutherford Monthly Reconciliation Credit. The Rutherford Monthly Reconciliation Credit
for a Month shall be equal to the sum of the Rutherford Hourly Reconciliation Credits for the Month. The Rutherford Hourly Reconciliation Credit for an Hour shall be equal to the product of (a) the EMC Group Total Hourly Energy Credit for the
Hour minus the EMC Group Reconciliation Amount for the Hour and (b) the Reconciliation Allocation Factor. The EMC Group Reconciliation Amount for an Hour shall be equal to the sum of (i) the Rutherford Allocated Share of the EMC Group
Total Hourly Energy Credit for the Hour as set forth in Section 7.1.5.7 of this Agreement, (ii) the Piedmont Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour as set forth in Section 7.1.5.7 of the Duke-Piedmont
Agreement, and (iii) the Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour as set forth in Section 7.1.5.7 of the Duke-Blue Ridge Agreement. If the Rutherford Monthly Reconciliation Credit is negative, EMC
shall pay such amount to Duke; if the Rutherford Monthly Reconciliation Credit is positive, such amount shall be credited to EMC. 
 7.1.5.13
Inter-EMC Energy Transfer Reconciliation Charge. The Monthly Inter-EMC Energy Transfer Reconciliation Charge for a Month shall be equal to the sum of the Hourly Inter-EMC Transfer Reconciliation Charges for the Month. The Hourly Inter-EMC
Transfer Reconciliation Charge for an Hour shall be equal to the product of (a) the Reconciliation Allocation Factor and (b) (i) the sum of the Rutherford Allocated Share of the Inter-EMC Energy Charge for the Hour as set forth in
Section 7.1.5.4 of this Agreement, the Piedmont Allocated Share of the Inter-EMC Energy Charge for the Hour as set forth in Section 7.1.5.4 of the Duke-Piedmont Agreement, and the Blue Ridge Allocated Share of the Inter-EMC Energy Charge
for the Hour as set forth in Section 7.1.5.4 of the Duke-Blue Ridge Agreement, minus (ii) the sum of the Rutherford Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in Section 7.1.5.8 of this Agreement, the
Piedmont Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in Section 7.1.5.8 of the Duke-Piedmont Agreement, and the Blue Ridge Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in
Section 7.1.5.8 of the Duke-Blue Ridge Agreement. If the Monthly Inter-EMC Energy Transfer Reconciliation Charge is negative, EMC shall pay such amount to Duke. If the Monthly Inter-EMC Energy Transfer Reconciliation Charge is positive, such
amount shall be credited to EMC. 
 7.1.6 Scheduling Agent Service Charge. In the event that this Agreement is terminated in
accordance with the provisions of Section 3.5.2.2, EMC shall pay to Duke the Monthly Scheduling Agent Service Charge commencing on the date that Scheduling Agent Services commence. The Monthly Scheduling Agent Service Charge for a Month shall
be equal to two thousand five hundred dollars ($2,500) per Month. 
 7.1.7 References to Other Agreements. For purposes of calculating
the charges and credits under Sections 3.5.2.3 and 7.1 (including charges and credits calculated pursuant to Section 7.1 in the event that EMC exercises its option pursuant to Section 3.5.2.3), (i) all references in this Agreement to
quantities under or as determined or set forth in the Duke-Blue Ridge Agreement shall be deemed to refer to such quantities during the period in which the 
  

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 Duke-Blue Ridge Agreement is in effect, before which time and after which time such quantities shall be deemed to be
equal to zero; and (ii) all references in this Agreement to quantities under or as determined or set forth in the Duke-Piedmont Agreement shall be deemed to refer to such quantities during the period in which the Duke-Piedmont Agreement is in
effect, before which time and after which time such quantities shall be deemed to be equal to zero. For example, if this Agreement and the Duke-Blue Ridge Agreement terminate August 31, 2008, and the Duke- Piedmont Agreement terminates
August 31, 2007, then during the period through August 31, 2007, EMC Group Native Load shall mean the sum of (i) the EMC Native Load under this Agreement, (ii) the EMC Native Load under the Duke-Blue Ridge Agreement, and
(iii) the EMC Native Load under the Duke-Piedmont Agreement, and during the period September 1, 2007 through August 31, 2008, EMC Group Native Load shall mean the sum of (i) the EMC Native Load under this Agreement and
(ii) the EMC Native Load under the Duke-Blue Ridge Agreement. In addition, for purposes of calculating the charges under Sections 3.5.2.3 and 7.1 (including charges and credits calculated pursuant to Section 7.1 in the event that EMC
exercises its option pursuant to Section 3.5.2.3), all references to “EMC Group” shall refer collectively to the members of such group that are served under those of the above-referenced Agreements that are then in effect
(e.g., in the above example, “EMC Group” would no longer include Piedmont effective September 1, 2007). 
 7.2 Charges During
January 1, 2007 – December 31, 2010. 
 7.2.1 General. For service provided during the period January 1, 2007
– December 31, 2010, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.2.2, the Duke Monthly Energy Charge set forth in Section 7.2.3 and, if applicable, the Monthly Reserve Capacity Charge set forth in
Section 7.4. The charges set forth in this Section 7.2 are in addition to the other charges set forth in other sections of this Agreement. 
 7.2.2 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to the product of (i) the Monthly Billing Demand for the Month (kW) and (ii) the Monthly Demand Rate for the Year
($/kW-Month). 
 7.2.2.1 Monthly Demand Rate. The Monthly Demand Rate for each Year shall be calculated in accordance with the formula
rate set forth in Schedule 1. The Monthly Demand Rate initially shall be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30
following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.2.2.2 Monthly Billing Demand. The Monthly Billing Demand for each Month of the Year shall be equal to the average of the twenty (20) EMC
Peak Hour Billing Demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during July and August of such Year. The EMC Peak Hour Billing Demand for an Hour shall be equal to the integrated sixty
(60) minute EMC Native Load demand (kW) for the Hour minus EMC’s Base Obligation (kW) for such Hour, but in no event shall the EMC Peak Hour billing Demand for an Hour (or the Monthly Billing Demand) be less than zero. The Monthly Billing
Demand initially shall be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided 
  

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 to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any
refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. An example showing the calculation of this billing demand is shown in Attachment 7-7. 
 7.2.3 Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the sum of the Monthly Fuel Charge and Monthly Variable
O&M Charge for the Month. If the Duke Monthly Energy Charge is positive, EMC shall pay such amount to Duke. If the Duke Monthly Energy Charge is negative, Duke shall credit such amount to EMC. 
 7.2.3.1 Monthly Fuel Charge. The Monthly Fuel Charge for a Month shall be equal to the sum of the Hourly Fuel Charges for the Month. The Hourly
Fuel Charge for an Hour shall be equal to the product (i) EMC’s Native Load demands during the Hour (kW) minus EMC’s Base Obligation for the Hour (kW) and (ii) the Fuel Rate for the Year ($/kWh). The Fuel Rate for each Year shall
be calculated in accordance with the formula rate set forth in Schedule 1. The Fuel Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided
to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. Duke will keep EMC informed of
the true-up subtotal on a semi-annual basis during a Year. 
 7.2.3.2 Monthly Variable O&M Charge. The Monthly Variable O&M
Charge for a Month shall be equal to the sum of the Hourly Variable O&M Charges for the Month. The Hourly Variable O&M Charges for an Hour shall be equal to the product of (i) EMC’s Native Load demands during the Hour (kW) minus
EMC’s Base Obligation for the Hour (kW), and (ii) the Variable O&M Rate for the Year ($/kWh). The Variable O&M Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Variable
O&M Rate initially shall be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided,
and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.3 Charges
Commencing January 1, 2011. 
 7.3.1 General. For service provided commencing January 1, 2011 through the termination of
this Agreement, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.3.2 and the Duke Monthly Energy Charge set forth in Section 7.3.3. The charges set forth in this Section 7.3 are in addition to the other charges
set forth in other sections of this Agreement. 
 7.3.2 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to
the product of (i) the Monthly Billing Demand for the Month (kW) and (ii) the Monthly Demand Rate for the Year ($/kW-Month). 
 7.3.2.1 Monthly Demand Rate. The Monthly Demand Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Monthly 
  

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 Demand Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data
become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of
FERC’s regulations. 
 7.3.2.2 Monthly Billing Demand. The Monthly Billing Demand for each month of a Year shall be equal to the
average of the twenty (20) EMC Peak Hour Billing Demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the Annual Planning Period for such Year (as determined in
Section 7.3.2.3). The EMC Peak Hour Billing Demand for an Hour shall be equal to the integrated sixty (60) minute EMC Native Load demand (kW) for the Hour minus the Partial Requirements Resources (kW) for such Hour, but in no event shall
the EMC Peak Hour Billing Demand (or the Monthly Billing Demand) be less than zero. The Monthly Billing Demand shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up
shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. Examples
showing the calculation of the Monthly Billing Demand are shown in Attachment 7-8. 
 7.3.2.3 Determination of Annual Planning
Period. If the then-effective Annual Planning Period is the Summer Period, the Annual Planning Period for purposes of determining the Monthly Billing Demand for the Year under Section 7.3.2.2 shall be the Summer Period that occurs within
such Year (for example, if the Annual Planning Period in 2012 is the Summer Period, and the Summer Period is May - September, the Annual Planning Period for purposes of determining the Monthly Billing Demand for 2012 under Section 7.3.2.2 is
May 2012 - September 2012). If the then-effective Annual Planning Period is the Winter Period, the Annual Planning Period for purposes of determining the Monthly Billing Demand for the Year under Section 7.3.2.2 shall be the Winter Period that
ends in such Year (for example, if the Annual Planning Period in 2012 is the Winter Period, and the Winter Period is October - April, the Annual Planning Period for purposes of determining the Monthly Billing Demand for 2012 under
Section 7.3.2.2 is October 2011 - April 2012). 
 7.3.2.4 Annual Percentage. No later than June 30, 2012, and each
June 30 thereafter during the Term, Duke shall calculate the Annual Percentage for the immediately preceding Year using the formula set forth in Attachment 7-9, and shall provide such calculation to EMC, together with supporting
information. The Annual Percentage may be a positive or negative value. In the event that the Annual Percentage for such Year is greater than positive four percent (4%), the Monthly Demand Rate for such Year calculated pursuant to
Section 7.3.2.1 shall be reduced by the percentage equal to the Demand Rate Adjustment Percentage. This reduction shall only apply to the Year for which it is calculated. This reduction shall be reflected in the true-up provided to EMC pursuant
to Section 7.3.2.1. In the event that the Annual Percentage for such Year is a positive four percent (4%) or less, or is negative, there shall be no adjustments to the Monthly Demand Rate under this Section 7.3.2.4 for such Year.
Illustrative examples showing the calculation of the Annual Percentage and Demand Rate Adjustment Percentage and the resulting reduction, if any, to the Monthly Demand Rate are set forth in Attachment 7-10. 
  

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 7.3.3 Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the sum
of the Monthly Fuel Charge and Monthly Variable O&M Charge for the Month. 
 7.3.3.1 Monthly Fuel Charge. The Monthly Fuel Charge
for a Month shall be equal to the sum of the Hourly Fuel Charges for the Month. The Hourly Fuel Charge for an Hour shall be equal to the product (i) EMC’s Native Load demand during the Hour (kW) minus the sum of (a) EMC’s
Dispatched Baseload Resources for the Hour (kW) and (b) EMC’s Dispatched Combined Cycle Resources for the Hour for which EMC bears the Energy Cost pursuant to Section 4.3.3.1 (kW), and (ii) the Fuel Rate for the Year ($/kWh). The
Fuel Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Fuel Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available.
The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations.
Duke will keep EMC informed of the true-up subtotal on a semi-annual basis during a Year. 
 7.3.3.2 Monthly Variable O&M Charge.
The Monthly Variable O&M Charge for a Month shall be equal to the sum of the Hourly Variable O&M Charges for the Month. The Hourly Variable O&M Charge for an Hour shall be equal to the product of (i) EMC’s Native Load demands
during the Hour (kW) minus the sum of (a) EMC’s Dispatched Baseload Resources for the Hour (kW) and (b) EMC’s Dispatched Combined Cycle Resources for the Hour for which EMC bears the Energy Cost pursuant to Section 4.3.3.1
(kW) and (ii) the Variable O&M Rate for the Year ($/kWh). The Variable O&M Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Variable O&M Rate shall initially be
calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on
any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.4 Monthly Reserve Capacity Charges. In
the event that Duke provides Replacement Energy to EMC pursuant to Section 4.2.4 in an amount of five thousand (5,000) kW or greater during any Hour of a Year, EMC shall pay a Monthly Reserve Capacity Charge equal to the product of
(i) the Monthly Demand Rate as calculated in Section 7.3.2.1 and (ii) the amount (in kW) of reserves that would be required under Duke’s Generation Planning Practices for a generating resource of a size equivalent to the amount
of Replacement Energy provided to EMC (the “Reserve Capacity Amount”). This charge shall commence on the Day following the Day on which Duke provided Replacement Energy to EMC, and shall terminate on December 31 of that Year. For
example, if Duke provides a maximum amount of 100,000 kWh of Replacement Energy to EMC in any given Hour on July 15, 2007, and the reserves that would be required for a 100,000 kW generating resource under Duke’s Generation Planning
Practices is 17,000 kW, EMC shall be responsible for a Monthly Reserve Capacity Charge for 17,000 kW from July 16, 2007, through December 31, 2007, subject to increase as provided in the next sentence. In the event that Duke provides
Replacement Energy to EMC for any additional Hours during such Year, and the amount of Replacement Energy provided during any such Hours is greater than that previously provided during the Year, then the Reserve Capacity Amount shall be increased to
reflect such greater amount of Replacement Energy, effective the Day after the Replacement Energy is provided. In the event that Duke provides Replacement Energy to EMC in a 
  

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 subsequent Year, the foregoing provisions shall apply, and EMC shall pay Monthly Reserve Capacity Charges with respect to
such Replacement Energy as provided above. Notwithstanding anything in this Section 7.4 to the contrary, the Monthly Reserve Capacity Charges shall terminate no later than December 31, 2010. Any Monthly Reserve Capacity Charge, or increase
in such charge, that begins on a Day other than the first Day of the Month shall be adjusted pro rata for that Month to reflect the number of Days during the Month in which the charge or charge increase was in effect. 
 7.4.1 Force Majeure Events. Notwithstanding the provisions of Section 7.4, in the event that Duke provides Replacement Energy to EMC due to
the occurrence of a force majeure event, EMC shall not incur a Monthly Reserve Capacity Charge due to Duke’s provision of Replacement Energy for the first twenty-four (24) Hours following such occurrence. For purposes of this
Section 7.4.1, the term “force majeure” means an event or circumstance that: (i) prevents the party claiming to be affected by it from performing its obligations in whole or in part; (ii) is not within the reasonable control
of the claiming party, or the result of the negligence of the claiming party, and (iii) by the exercise of due diligence, the claiming party is unable to overcome in a commercially reasonable manner, and, without limiting the scope of the
definition, includes acts of God, or the public enemy, or insurrection, riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court order or
governmental authority or arbitration award (so long as the claiming party has not sought or has opposed, to the extent reasonable, such actions or restraints). It is expressly acknowledged that transmission service interruptions or curtailments
imposed by a transmission provider in response to transmission capacity or availability shortages shall not be “force majeure” events or circumstances for purposes of this Section 7.4.1. 
 7.5 Payment. All charges or payments contemplated by this Article 7 shall be made in accordance with provisions of Article 13. 
 7.6 Determination of EMC Capacity and Energy Demands. For purposes of determining the electric capacity and energy charges under this Agreement, EMC’s Native
Load demands shall be as determined under the NOA (which demands shall include the adjustments under the NOA for losses between the point of delivery under the NITSA and the point of measurement, and the corrections under the NOA for any metering
failures or inaccuracies), and shall be increased by (1 / (1 - TLF ), in order to reflect such demands at the generation level (i.e., at the point at which power is available for transmission). Metered receipts used in billings and accounting
hereunder will in all cases include adjustments for such losses. TLF shall be equal to the transmission loss factor set forth in the Transmission Provider’s OATT, and shall be expressed as a decimal. For example, if the transmission loss factor
in the Transmission Provider’s OATT is three percent (3%), then ( 1 / (1 - TLF )) shall be equal to ( 1 / (1 -.03)), or ( 1 / .97 ). In the event that the NOA is terminated, or the electric capacity and energy demands measured under the NOA no
longer include an adjustment for losses between the point of delivery under the NITSA and the point of measurement or provisions for correcting such demands for metering failures or inaccuracies, then, for purposes of determining the capacity and
energy charges under this Agreement, EMC’s metered electric capacity and energy demands shall be adjusted for losses between the point of delivery under the NITSA and point of measurement and further increased by ( 1 / (1-TLF)), in order
to reflect such demands at the generation level (i.e., at the point at which power is available for transmission), and suitable arrangements shall be made by the Parties for correcting such demands due to metering failures or inaccuracies.

  

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 Article 8 
 Scheduling Agent Services 
 8.1 Appointment of Duke as Scheduling Agent. EMC hereby appoints Duke as
Scheduling Agent, effective on the Effective Date (or such earlier date as is required so that Scheduling Agent may begin rendering Scheduling Agent Services by the Commencement Date), as agent for EMC for the Term, for the limited purposes set
forth in this Agreement, with full power and authority to render the Scheduling Agent Services, and Duke accepts such appointment. 
 8.1.1
Costs. The Parties acknowledge and agree that all costs and expenses incurred by Duke to provide Scheduling Agent Services are included in the charges set forth in Article 7 and, except as provided for in Section 7.1.6, EMC shall not be
charged any additional rates, charges or fees in connection with Duke’s provision of Scheduling Agent Services. 
 8.2 Scheduling Policies. In
providing Scheduling Agent Services hereunder, Duke shall comply with (i) the NCEMC policies set forth in Attachment 8-1 (“NCEMC Policies”), (ii) the SEPA policies set forth in Attachment 8-2 (“SEPA
Policies”) and (iii) the Transmission Provider’s OATT. 
 8.3 Protocols. In advance of the Commencement Date, and from time to time
thereafter as the Operating Committee may determine appropriate, the Operating Committee shall meet and make reasonable efforts to establish written protocols and procedures to implement the Scheduling Agent Services provided for hereunder, which
shall be reviewed and agreed to by the Parties; provided however, that the Operating Committee’s failure to agree upon such protocols and procedures shall not affect in any way the Parties’ respective rights and obligations under this
Article 8. 
 8.4 Scheduling Agent Services (Commencement Date through December 31, 2010). Beginning on the Commencement Date and
continuing through December 31, 2010, Duke shall provide the following Scheduling Agent Services: 
 8.4.1 Duke shall develop next-Day
and multi-Day forecasts of EMC’s Native Load. 
 8.4.2 Duke shall provide NCEMC with seven-Day and next-Day forecasts of EMC’s
Native Load. 
 8.4.3 Duke shall receive each Day the Nominations from MSCG, and confirm such Nominations with MSCG in writing, facsimile,
e-mail, or any other agreed-upon form of communication. 
 8.4.4 Duke shall provide to NCEMC the Nominations that Duke receives pursuant to
Section 8.4.3. 
  

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 8.4.5 Duke shall provide operational forecasts of EMC Native Load as may be requested by the Transmission
Provider from time to time. 
 8.4.6 Duke shall receive weekly availability schedules from SEPA. 
 8.4.7 Duke shall provide to SEPA week-ahead schedules and real-time adjustments to the week-ahead schedules of EMC’s SEPA Entitlement. 

8.4.8 Duke shall receive any information or notices from NCEMC, MSCG, or SEPA relating to any changes in the schedules of electric energy to be
delivered to serve EMC’s Native Load. 
 8.4.9 Duke shall provide daily and Monthly reconciliation and checkout services to EMC with
respect to each of NCEMC, SEPA, the Transmission Provider, and MSCG in connection with services provided by such entities to serve EMC’s Native Load. 
 8.4.10 Duke shall reasonably cooperate with EMC to enable EMC to address issues that may arise in connection with invoices or bills rendered to EMC by the Transmission Provider in connection with the delivery of
electric energy under the PPA, the WPSA, or EMC Contract Resources described in Sections 5.1.3, 5.1.4 and 5.1.5, the SEPA Contract to serve EMC’s Native Load. Such cooperation shall include providing EMC with data, records, and other
information available to Duke and related to the invoices or bills at issue. 
 8.4.11 If Duke has information that MSCG was not informed of
any transmission constraints or other impediments to deliveries under the PPA to the delivery points designated by MSCG, Duke shall, as promptly as reasonably practical, inform MSCG of any transmission constraints or other impediments to deliveries
under the PPA to the delivery points designated by MSCG. 
 8.4.12 Duke shall serve as EMC’s Purchasing – Selling Entity.

 8.4.13 Duke shall schedule to the Transmission Provider electric energy to be delivered from the EMC Contract Resources described in
Sections 5.1.3, 5.1.4 and 5.1.5. 
 8.5 Scheduling Agent Services (January 1, 2011 through Termination). Beginning on
January 1, 2011, and continuing through the date of termination of this Agreement, Duke shall provide the following Scheduling Agent Services: 
 8.5.1 Duke shall develop next-Day and multi-Day forecasts of EMC’s Native Load. 
 8.5.2 Duke shall provide NCEMC with
seven-Day and next-Day forecasts of EMC’s Native Load. 
 8.5.3 Duke shall provide to NCEMC with the daily schedule of electric energy
to be made available each Hour to serve EMC’s Native Load under the WPSA. 
 8.5.4 Duke shall receive weekly availability schedules from
SEPA. 
  

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 8.5.5 Duke shall provide to SEPA week-ahead schedules and real-time adjustments to the week-ahead
schedules of EMC’s SEPA Entitlement. 
 8.5.6 Duke shall provide operational forecasts of EMC Native Load as may be requested by the
Transmission Provider from time to time. 
 8.5.7 Duke shall receive any information or notices from NCEMC or SEPA relating to any changes in
the schedules of electric energy to be delivered to serve EMC’s Native Load. 
 8.5.8 Duke shall provide daily and Monthly
reconciliation and checkout services to EMC with respect to NCEMC, SEPA, and the Transmission Provider in connection with services provided by those entities to serve EMC’s Native Load. 
 8.5.9 Duke shall reasonably cooperate with EMC to enable EMC to address issues that may arise in connection with invoices or bills rendered to EMC by the
Transmission Provider in connection with the delivery of electric energy under the WPSA, EMC Contract Resources described in Section 5.2, or the SEPA Contract to serve EMC’s Native Load. Such cooperation shall include, but is not limited
to, providing EMC with data, records and other information available to Duke and related to the invoices or bills at issue. 
 8.5.10 Duke
shall serve as EMC’s Purchasing – Selling Entity. 
 8.5.11 Duke shall schedule to the Transmission Provider electric energy to be
delivered from the EMC Contract Resources described in Section 5.2. 
 8.6 New EMC Resources. If EMC obtains one or more new EMC Contract
Resources in accordance with the provisions of Article 5 of this Agreement, the Parties shall negotiate appropriate revisions to this Agreement or the protocols and procedures developed under Section 8.3 as necessary for Duke to provide
Scheduling Agent Services hereunder in connection with such new EMC Contract Resources; provided however, the failure of the Parties to agree on revisions to this Agreement or the protocols and procedures developed under Section 8.3 shall not
relieve Duke of its obligation to schedule such new EMC Contract Resources. 
 8.7 Errors in Schedules. If Duke is notified by the Transmission
Provider, NCEMC, SEPA or a third party with respect to EMC Contract Resources described in Sections 5.1.3, 5.1.4, 5.1.5 or 5.2, that any schedule provided by Duke as Scheduling Agent has been rejected, Duke shall provide to the Transmission
Provider, NCEMC, SEPA or third party, as applicable, a substitute schedule for the Day in question taking into account the information provided by the Transmission Provider, NCEMC, SEPA or third party, as applicable, in connection with such
rejection. 
 8.8 EMC Responsibilities. In connection with Duke’s undertaking Scheduling Agent Services, EMC shall have the following
obligations: 
 8.8.1 EMC shall provide Duke, as Scheduling Agent, with: (a) meter data such that Duke may calculate aggregate load in
discrete locations or in aggregate load areas as determined by Transmission Provider; (b) five (5) years of the most recent historical load data; and (c) the Power Requirements Study (or such successor document) that EMC submits
annually to the RUS. 
  

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 8.8.2 EMC shall make arrangements with NCEMC, SEPA, the Transmission Provider, and any third party
responsible for providing for deliveries of new EMC Resources as provided for in Section 8.6, as are necessary for those parties to communicate with, and accept or receive schedules or other information submitted by or to Duke as Scheduling
Agent. 
 8.8.3 During the period from the Commencement Date through December 31, 2010, EMC shall direct MSCG to communicate with, and
provide Nominations to Duke as Scheduling Agent. 
 8.8.4 EMC shall reasonably cooperate with Duke as necessary for Duke to assist EMC in
addressing issues that may arise in connection with invoices or bills rendered to EMC by the Transmission Provider, as provided for in Sections 8.4.10 and 8.5.9. 
 8.9 Duke’s Liability. Duke shall be liable for any damages arising from Duke’s unexcused failure to comply with the provisions of this Article 8. 
 8.10 Termination Assistance Service. Commencing six (6) Months prior to the scheduled termination of this Agreement and continuing through the termination
date of this Agreement (the “Termination Assistance Period”), Duke shall provide to EMC, or at EMC’s request to EMC’s designee, such reasonable cooperation, assistance and service to cause the orderly and timely transition and
migration of Scheduling Agent Services provided under this Agreement to EMC’s new energy supplier and/or scheduling agent without interruption or adverse effect (“Termination Assistance Service”). EMC may shorten or terminate the
Termination Assistance Period by providing written notice to Duke. 
 Article 9 
 Transmission and Ancillary Services 
 9.1 Delivery
Obligations. Duke shall be responsible for making all arrangements necessary and paying for all costs incurred under contractual arrangements necessary to deliver the electric energy provided hereunder to the Delivery Points. EMC shall be
responsible for making and paying for all contractual arrangements necessary for the delivery of the electric energy provided hereunder from the Delivery Points. 
 9.2 Transmission Arrangements. This Agreement does not obligate Duke to provide any Transmission Service or Ancillary Services, and does not confer upon EMC any rights to service over the Transmission System. EMC shall be responsible
for making separate contractual arrangements with the Transmission Provider for all Transmission Service and Ancillary Services to be provided to EMC. 
 9.3
Ancillary Services. Duke shall make Commercially Reasonable Efforts to assist in any effort by EMC to have the Transmission Provider recognize that the electric capacity and energy provided hereunder satisfies one or more of such Transmission
Provider’s Ancillary Services requirements; provided, however, that nothing in this Section 9.3 shall in any way obligate Duke to provide, make arrangements for, or pay for any Ancillary Services except as expressly provided for in
Section 9.3.1. 
  

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 9.3.1 Energy Imbalance Responsibility. Duke shall reimburse EMC in accordance with the provisions
of Article 13 for any Hour in which, as a result of Duke’s unexcused failure to comply with the provisions of Article 8, Energy Imbalance Service charges are incurred by EMC in accordance with the Transmission Provider’s OATT. EMC shall
reimburse Duke in accordance with the provisions of Article 13 for any Hour in which, as a result of Duke’s unexcused failure to comply with the provisions of Article 8, Energy Imbalance Service compensation is provided to EMC in accordance
with the Transmission Provider’s OATT. 
 9.4 Regional Transmission Organization. If an ISO, RTO, ITC or other future organization, agency or
authority that has been approved by FERC to serve as the Transmission Provider, then Duke and EMC will reasonably cooperate to make or enter into arrangements with such entity to assist such entity with the implementation of this Agreement. It is
expressly understood that neither the implementation of an ISO, RTO, ITC or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider nor the failure of the Parties to enter into the
arrangements contemplated under this Section 9.4 shall relieve either Party of any obligations under this Agreement. 
 9.4.1 Cost
Responsibility. Except as provided in Section 9.3.1, it is expressly understood that nothing herein shall be construed to in any way relieve EMC of, or impose upon Duke, the responsibility for any fees, costs, or charges (including but not
limited to congestion costs, transmission losses, or the costs or charges to secure financial transmission rights or the equivalent thereof) that may be imposed on EMC by an ISO, RTO, ITC or other future organization, agency or authority that has
been approved by FERC to serve as the Transmission Provider in connection with the provision of Transmission Service or Ancillary Services. It is further expressly understood that Duke shall have no right or interest in any financial transmission
rights or the equivalent thereof that are allocated, assigned, transferred or acquired by EMC. 
 9.4.2 Congestion Costs. In the event
that the Transmission Provider implements a pricing methodology that allocates congestion costs on a locational basis, in determining the dispatch order of Duke’s Generation System, Duke shall make no adverse distinction between Duke’s
Native Load and Duke’s obligations to supply FFR Supplemental Service or Partial Requirements Service, as applicable under this Agreement. Duke further agrees that, in the event it designates Delivery Points for Duke’s Generation System,
Duke shall make no adverse distinction between Duke’s Native Load and Duke’s obligations to supply FFR Supplemental Service or Partial Requirements Service, as applicable under this Agreement. The Parties shall reasonably cooperate with
each other in an effort to develop and implement congestion management strategies designed to minimize the incurrence of congestions costs associated with the delivery of electric energy under this Agreement. Duke will provide EMC with recommended
strategies to manage such congestion costs, under terms that would not subject Duke’s Native Load to any costs that Duke would not otherwise incur, and if EMC agrees with such recommendation, Duke will use Commercially Reasonable Efforts to
implement the recommended congestion management strategies. Duke shall also use Commercially Reasonable Efforts to comply with the congestion management rules that may be adopted by the Transmission Provider. 
  

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 Article 10 
 Operating Committee 
 10.1 Operating Committee. The Parties shall establish an Operating Committee consisting
of one (1) Representative each. The Operating Committee shall act only by unanimous agreement or consent. Duke and EMC shall designate their respective Representatives to the Operating Committee, plus any alternate, by written notice delivered
in accordance with Section 16.22 within thirty (30) Days after the Effective Date. Each Party’s Representative on the Operating Committee is authorized to act on behalf of such Party with respect to any matter arising under this
Agreement. 
 10.2 Duties of the Operating Committee. The Operating Committee shall facilitate the coordination and interaction between the Parties
with respect to the performance of the duties and obligations imposed on the Parties hereunder, including development or revision of appropriate protocols and procedures therefor. The Operating Committee shall not, however, have any authority to
modify or otherwise alter the Parties’ rights and obligations under this Agreement. 
 Article 11 
 Demand Side Management 
 11.1 Availability of Demand
Side Management Resource Programs. EMC may make available to EMC’s Native Load customers EMC Demand Side Management Resource Programs to the same extent and under comparable terms and conditions as Duke’s Demand Side Management
Resource Programs; provided, however, that EMC may not make available to EMC’s Native Load customers any demand side management resource programs or similar programs other than such EMC Demand Side Management Resource Programs unless EMC is
otherwise required by RUS or by applicable Law to make other demand management side resource programs available to EMC’s Native Load customers or is otherwise permitted under Section 11.7. Except as set forth in Section 4.2.6, the
terms and conditions of EMC Demand Side Management Resource Programs shall be applied to EMC’s Native Load customers and enforced by Duke in the same or comparable manner as they are applied to Duke’s Native Load retail customers and
enforced by Duke. Except as set forth in Section 4.2.6, in implementing and operating such EMC Demand Side Management Resource Programs, Duke shall make no adverse distinction with respect to EMC’s Native Load. 
 11.2 Changes to Demand Side Management Resource Programs. Upon ninety (90) Days prior written notice, Duke shall advise EMC of any modifications, additions,
or deletions that have been or will be made to the Demand Side Management Resource Programs, and the EMC Demand Side Management Resource Programs available hereunder to EMC’s Native Load customers shall be deemed to have been revised to reflect
such modifications, additions, or deletions without any further action required by either Party. 
  

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 11.3 Credits. Except for any EMC Demand Side Management Resource Program implemented pursuant to Section 11.7
of this Agreement, for each EMC Native Load customer that implements an EMC Demand Side Management Resource Program, EMC shall be entitled to a billing credit. Such billing credit shall be calculated in accordance with the credit applicable for the
Demand Side Management Resource Program, as specified in the rider approved and on file with NCUC for such Demand Side Management Resource Program. Each Month, Duke shall aggregate the total billing credits to which EMC is entitled pursuant to this
Section 11.3, and provide EMC a credit on the Monthly statement delivered in accordance with Section 13.2 equal to the total billing credits for such Month. 
 11.4 Necessary Arrangements. To the extent that an EMC Native Load customer agrees to implement an EMC Demand Side Management Resource Program, the Parties shall cooperate in preparing any detailed
implementation procedures and arrangements required to implement such program, provided that, except for any EMC Demand Side Management Resource Program implemented pursuant to Section 11.7 of this Agreement, Duke shall retain sole operational
control over such EMC Demand Side Management Resource Program implemented. The failure of the Parties to agree on detailed implementation procedures and obligations shall not affect Duke’s obligation to provide EMC with credits as determined by
Section 11.3. 
 11.4.1 Audits. For each EMC Demand Side Management Resource Program whose credit depends upon the number of EMC
Native Load customers, EMC shall be required to provide Duke written notice, by no later than January 31 of each Year, of the number of EMC Native Load customers with whom EMC has entered into arrangements pursuant to this Section 11.4 for
such EMC Demand Side Management Resource Program. Duke shall have the right periodically to perform audits, in accordance with the terms of Section 13.6, to verify the accuracy of the notices concerning the number of EMC Native Load customers
with whom EMC has entered into arrangements for each EMC Demand Side Management Resource Program. Based on the results of such audits, Duke shall be entitled, in accordance with the terms of Section 13.2.2, to revise or adjust the level of
credits that Duke previously had provided EMC. 
 11.5 Start-Up Conditions. No later than sixty (60) Days after the Effective Date, Duke shall
conduct a system-wide test of each EMC Demand Side Management Resource Program to determine its capability. Duke shall provide EMC with the results of such test no later than five (5) Business Days after the completion of the system-wide test.
Duke shall not be required to provide credits for EMC Demand Side Management Resource Programs unless the applicable standards and requirements specified for Duke’s Demand Side Resource Management Programs under the riders approved and on file
with the NCUC shall have been met, and the testing provided for in this Section 11.5 shall have been accomplished. 
 11.6 Periodic Testing. Duke
shall have the right periodically, but no less than once per Year, to conduct a system-wide test of each EMC Demand Side Management Resource Program to determine whether the tested EMC Demand Side Management Resource Program is capable of providing
a level of demand reduction equal to the level of the credit that EMC is, at the time of such system-wide test, receiving for such EMC Demand Side Management Resource Program. Subject to Section 11.6.1, if, at the time of such system-wide test,
one or more EMC Demand Side Management Resource Program(s) do not provide the level of demand reduction equal to the level of the credit that EMC is receiving for such EMC Demand Side Management Resource 
  

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 Program(s), Duke shall have the right to (i) reduce the credit provided to EMC to the actual level of demand
reduction provided at the time of the system-wide test and, in accordance with the terms of Section 13.2.2, to revise or adjust the level of credits that Duke previously had provided EMC, and (ii) provide written notice within ninety
(90) Days of the system-wide test, to cancel such EMC Demand Side Management Resource Program(s). 
 11.6.1 Retesting. Within
sixty (60) Days of any failure of a system-wide test for an EMC Demand Side Management Resource Program, EMC shall have the right to have Duke conduct a retest in order to demonstrate that such EMC Demand Side Management Resource Program is
capable of providing the level of demand reduction equal to the level of the credit that EMC previously was receiving for such EMC Demand Side Management Resource Program. To the extent that any such system-wide retest demonstrates that the EMC
Demand Side Management Resource Program is capable of providing demand reduction, the credit provided to EMC shall be restored to the prior level or such lesser level as demonstrated by the result of such rescheduled test and, to the extent
applicable, Duke shall, in accordance with the terms of Section 13.2.2, revise or adjust the level of credits that Duke previously had provided EMC and any notice to terminate rendered by Duke pursuant to 11.6 shall be null and void.

 11.7 EMC Demand Side Management. If Duke’s Annual Planning Period shifts from the Summer Period to the Winter Period, then EMC shall have the
authority to implement and call upon EMC Demand Side Management Resource Programs to control EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the Winter
Period to the level equal to but not below the average of (i) the average of EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the immediately preceding
Summer Period and (ii) the average of EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the second preceding Summer Period. For example, if (i) the
Annual Planning Period during May 2012 - April 2013 is the Summer Period (May 2012 - September 2012), and the average of EMC’s integrated sixty (60) minute EMC Native Load demands coincident with the twenty (20) highest Hourly Duke
Schedule 1 Demands during such period is 100 MWs; and (ii) the Annual Planning Period during May 2013 - April 2014 is the Winter Period (October 2013 - April 2014), and the average of EMC’s integrated sixty (60) minute EMC Native Load
demands coincident with the twenty (20) highest Hourly Duke Schedule 1 Demands during the Summer Period immediately preceding such Winter Period (i.e., May 2013 - September 2013) is 102 MWs; then EMC may call upon EMC Demand Side Management
Resource Programs to control EMC’s integrated sixty (60) minute EMC Native Loads demands coincident with the twenty (20) highest Hourly Duke Schedule 1 Demands during October 2013 - April 2014 to the level equal to but not below
101 MWs. It is expressly acknowledged that (a) Duke shall also have the right to call upon any available EMC Demand Side Management Resource Program implemented pursuant to this Section 11.7, and (b) EMC shall not be entitled to a
billing credit under Section 11.3 (or any other provision of this Agreement) in connection with any EMC Demand Side Management Resource Program implemented pursuant to this Section 11.7. 
  

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 Article 12 
 Modification of This Agreement 
 12.1 Unilateral Modification. Except as provided in Section 12.3:

 No unilateral modification, amendment or other change to the terms of this Agreement shall be permitted or deemed effective for any reason,
and the rates, terms and conditions specified herein shall not be subject to change through application to FERC pursuant to the provisions of Sections 205 or 206 of the Federal Power Act absent the written agreement of both Parties. Any
amendment or modification to this Agreement shall be deemed enforceable if and only if such amendment or modification (a) has been reduced to writing, (b) has been agreed to and duly executed by both Parties in writing, and (c) has
received all requisite approvals of Governmental Authorities necessary for the effectiveness thereof. Each Party hereby irrevocably waives its rights, including any rights under Sections 205 and/or 206 of the Federal Power Act, to file a
complaint, request an investigation, or make any unilateral rate-change request seeking: (a) an order from FERC finding that any rate or provision in this Agreement is unjust or unreasonable; (b) any refund with respect to this
Agreement’s rates; or (c) any other unilateral modification to this Agreement. Each Party agrees not to make any such unilateral filing or request, and agrees and warrants that these covenants and waivers shall be binding notwithstanding
any regulatory, market, or other change that may occur at any time during the Term. 
 12.2 Mobile-Sierra Public Interest Standard. Except as
provided in Section 12.3, to the extent this Agreement is challenged by any person or its terms are subjected to review under the Federal Power Act or other Laws, the “just and reasonable” standard shall not apply. Instead, absent the
agreement of both Parties to the proposed change, and except as provided in Section 12.3, the standard of review for changes to this Agreement proposed by a Party, a non-party, or FERC acting sua sponte shall be the “public
interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956); Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). 
 12.3 Changes To Certain Charge Components. Notwithstanding anything else herein to the contrary, nothing contained herein shall be construed as affecting in any
way the right of either Party to unilaterally make application to FERC under Sections 205 or 206 of the Federal Power Act (i) to change the depreciation rates and nuclear decommissioning accrual used in Schedule 1, (ii) to
include additional cost items that are incurred in providing FFR Supplemental Service or Partial Requirements Service, as applicable, to EMC that are not included in Schedule 1, (iii) to exclude from Schedule 1 cost items
that are no longer incurred in providing FFR Supplemental Service or Partial Requirements Service, as applicable to EMC, or (iv) to change Schedule 1 to reflect changes in Duke’s accounting consistent with the Accounting
Requirements (including the addition of new accounts and the removal of obsolete accounts). In addition, in the event that (a) EMC implements new time-of-use rates or materially modifies its existing time-of-use rates, for some or all of
EMC’s Native Load customers, (b) such rates result in a reduction of EMC’s Monthly Billing Demand under Sections 7.2.2.2 or 7.3.2.2, and (c) such Monthly Billing Demand reduction does not result in a commensurate reduction
in the EMC demands that Duke utilizes in Duke’s Generation Planning Practices, Duke may make unilateral application to FERC 
  

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 under Section 205 of the Federal Power Act to change the calculation of the Monthly Billing Demand set forth in
Sections 7.2.2.2 or 7.3.2.2 to more appropriately reflect the costs that Duke incurs in providing service under this Agreement. In the event that Duke makes such a filing with FERC, EMC may oppose such filing, and, in addition, shall be free to
propose any other method for calculating the Monthly Billing Demands set forth in Sections 7.2.2.2 or 7.3.2.2 to more appropriately reflect the costs that Duke incurs in providing service under this Agreement. 
 12.4 Standard of Review for Permitted Changes. The Parties acknowledge that, as of the Effective Date, FERC has issued a proposed rule that, if adopted, would
specify the language for parties to include in future agreements where the parties intend that the “just and reasonable” standard of review apply to amendments to the agreements. Notwithstanding the language that ultimately may be adopted
by FERC, it is the intent of the Parties that the standard of review that FERC shall apply when acting on proposed modifications to this Agreement that are permitted under Section 12.3, either on FERC’s own motion or on behalf of a
signatory or non-signatory, shall be the “just and reasonable” standard of review rather than the “public interest” standard of review. 
 12.5 Scope of Waiver. Nothing in this Article 12 shall be construed to modify or limit any Party’s right to enforce the express terms of this Agreement as they are written in this Agreement. 
 Article 13 
 Billing and
Payment 
 13.1 Billing Period. Unless otherwise specifically agreed upon by the Parties in the terms of this Agreement or otherwise in writing,
the Month shall be the standard period for determining all billings and payments under this Agreement. 
 13.2 Billing Statements. 
 13.2.1 Initial Statements. After the end of each Billing Period, Duke shall deliver to EMC a statement setting forth for the Billing Period
(i) the sum of the electric energy delivered and/or received for all Hours during that Billing Period, and (ii) Duke’s calculation of any amounts due from EMC under this Agreement for the Billing Period. In addition, in the event that
there are amounts due from Duke to EMC under this Agreement for a Billing Period, EMC shall deliver to Duke, after the end of such Billing Period, a statement setting forth for the Billing Period EMC’s calculation of any amounts due from Duke
under this Agreement for the Billing Period. Notwithstanding the foregoing, a Party’s failure to render a statement as set forth above shall not relieve the other Party from its obligation to make payment to the billing Party when such
statement is rendered, provided such statement is rendered within one (1) year after the end of the Billing Period. 
 13.2.2
Subsequent Payment Adjustments. The Parties understand that in certain cases Monthly billings will need to be made on an estimated basis. In addition, the Parties understand that after-the-fact adjustments to amounts owed or revenues received
may be made in order to reflect correctly the amounts payable by one Party to the other under this Agreement. Each Party 
  

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 shall cooperate in good faith with the other Party to obtain the requisite information and perform the necessary
computations so as to true-up or otherwise adjust any estimated or adjusted billings promptly. 
 13.3 Timeliness of Payment. Unless otherwise agreed
by the Parties, all statements rendered under this Agreement, whether by Duke or EMC, shall be due and payable in accordance with each Party’s statement instructions on or before the later of the twentieth (20th) Day of each Month, or the tenth (10th) Day after receipt of the statement or; if such Day is not a Business Day, then on the next Business Day. Each Party shall make payments in immediately available funds by electronic funds
transfer, or by other mutually agreeable method, to the account designated in writing by the other Party. Any non-disputed amounts (other than amounts for which payment may be withheld pursuant to Section 13.5) not paid by the due date shall be
deemed delinquent and shall accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full. 
 13.4 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date
through netting, in which case all amounts owed by each Party to the other Party under this Agreement during the Billing Period, including any related interest, payments, and credits, shall be netted so that only the excess amount remaining shall be
paid by the Party who owes it. If no mutual debts or payment obligations exist and only one Party owes a debt or obligation to the other Party during the Monthly Billing Period, including but not limited to any interest, payments, or credits, that
Party shall pay such sum in full when due. 
 13.5 Disputes and Adjustments of Statements. A Party may, in good faith, dispute the correctness of any
statement or any adjustment to a statement, rendered under this Agreement or adjust any statement for any arithmetic or computational error within twenty-four (24) Months of the date the statement, or adjustment to a statement, was rendered. If
a statement or portion thereof, or any other claim or adjustment arising under this Agreement is disputed, the disputing Party shall provide written notice to the other Party (the “Billing Dispute Notice”) which (a) states the good
faith basis for the dispute, (b) specifies the amount in dispute (the “Disputed Amount”), if any, and (c) provides documentation reasonably supporting the determination of the Disputed Amount. The disputing Party shall, at its
option, (a) make payment to the other Party of the Disputed Amount under protest and thereafter shall be reimbursed by the other Party for any amount determined to be refundable after the resolution of such dispute or (b) withhold one half
(1/2) of the Disputed Amount and make payment to the other Party of the other one half (1/2) of the Disputed Amount. Payment to the other Party of one half (1/2) of the Disputed Amount shall not relieve the disputing Party of the
obligation to pay interest accrued at the Interest Rate from and including the date such payment was due to but excluding the date of such payment of any portion of such Disputed Amount withheld and determined to be due and payable after the
resolution of such dispute. Likewise, the other Party shall not be relieved of the obligation to pay interest accrued at the Interest Rate from and including the date such payment was made to but excluding the date of reimbursement of any portion of
such Disputed Amount paid and determined to be refundable after the resolution of such dispute. 
 In the event that a Party, by timely
notice to the other Party, disputes the correctness of a statement or portion thereof or any other claim or adjustment arising under this Agreement, the 
  

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 other Party shall promptly review the disputed statement or adjustment and shall notify the disputing Party, within
forty-five (45) Days following receipt of the Billing Dispute Notice, of the amount of any error or the amount of any payment or reimbursement that the disputing Party is required to make or is entitled to receive. Payments determined to be due
by the disputing Party shall be included on the next Monthly statement, and shall include interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Reimbursements determined to be due from the other Party
shall be included on the next Monthly statement, and shall include interest accrued at the Interest Rate from and including the due date to but excluding the date reimbursed. If the disputing Party disagrees with the other Party’s resolution of
any dispute, then the Parties shall submit the dispute for resolution in accordance with Article 14. 
 Inadvertent overpayments shall
be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the
Party receiving such overpayment. Any dispute with respect to a statement is waived unless the other Party is notified in accordance with this Section 13.5 within twenty-four (24) Months after the statement is rendered or any adjustment to
the statement is made. Neither Party shall have the right to challenge any statement, to invoke arbitration of the same or to bring any court or administrative action of any kind questioning the propriety or any other aspect of such statement after
a period of twenty-four (24) Months from the date the statement was rendered; provided, however, that in the case of a statement containing estimates, such twenty-four (24) Month period shall run from the date the statement is adjusted to
reflect the actual amounts due. 
 13.6 Records and Audits. Each Party shall keep such records and documents as may be needed to afford a clear and
complete history of all transactions under this Agreement, and the cost information used to calculate the charges for such transactions, for twenty-four (24) Months following the Month in which such transaction occurs. In addition, during such
twenty-four (24) Month period, EMC shall have the right to audit all records, including phone and computer records, related to Duke’s performance of its obligation not to adversely distinguish against EMC’s Native Load under
Section 4.3.3, Section 6.2, and Section 9.4.2 of this Agreement. If a Party initiates an audit through a notice to the other Party within the time period provided herein, the records and documents related to such audit are required to
be maintained under this Section 13.6, then the other Party will retain such records and documents until such audit is complete. If a Party issues an Original Notice pursuant to Article 14, then the Parties will retain the records and documents
relating to such dispute until the resolution of such dispute. In maintaining such records and documents, EMC and Duke may rely upon the logs and other meter information routinely recorded by Transmission Providers or utilities responsible for
coordination of the purchases and sales. During such twenty-four (24) Month period, either Party, or any Representatives of such Party, shall have the right, at its sole expense and during normal working Hours, to examine the records of the
other Party, including documents and records held by third parties, to the extent reasonably necessary to verify the accuracy of any statement, charge, or computation made pursuant to this Agreement. The Party requesting the audit shall pay the
costs associated with any independent auditor. Upon the request of the auditing Party, the document custodian of the other Party shall certify to the auditing Party that, to the best of such person’s knowledge after reasonable investigation,
the documents and records supplied are true and complete and, in the case of copies, are true, complete and correct copies of the original documents requested by the auditing Party. 
  

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 13.6.1 Procedures. EMC may make a written request for Duke to provide access to documents and
records to verify the accuracy of any statement, charge or computation made pursuant to this Agreement. Within ten (10) Business Days of the receipt of a written request from EMC, Duke shall either provide EMC, or its Representative, with
access to the documents and records which are the subject of the written request or provide EMC with copies of the original documents and records. If Duke elects to provide EMC, or its Representative, with access to the documents and records
requested by EMC, EMC or its Representative shall be permitted to make, at its own expense, copies of the documents and records to which it or its Representative has been provided access. Any copies made by EMC or its Representative shall be subject
to the confidentiality provisions set forth in Section 16.6. If Duke is unable to provide EMC with access or copies within ten (10) Business Days of the receipt of EMC’s written request because it is unable to locate or gain access to
such documents and records after reasonable investigation, Duke shall, within ten (10) Business Days of the receipt of such written request, provide EMC with notice describing the reasons for its failure to provide access to or copies of the
documents and records, its efforts to obtain such documents and records, and its best estimate of the time in which EMC will be permitted access to or provided copies of such documents and records. The twenty-four (24) Month period provided for
in Section 13.5 shall be tolled from the date Duke gives notice describing the reasons for its failure to provide access to or copies of the documents and records until Duke shall have (i) provided EMC with copies or access to all
documents and records specified in EMC’s written request or (ii) Duke’s document custodian shall have certified, that to the best of his knowledge after reasonable investigation that such document does not exist or Duke cannot locate
or produce such document or records. 
 13.6.2 Adjustments Resulting from Audits. If any audit or examination under this
Section 13.6 reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof shall be made promptly and shall accrue interest at the Interest Rate from the date the overpayment or underpayment was
made until paid; provided, however, that no adjustment for any statement or payment shall be made unless objection to the accuracy thereof was made prior to the lapse of twenty-four (24) Months from the rendition thereof, and thereafter any
objection shall be deemed waived. 
 13.6.3 Confidentiality. The auditing Party shall keep confidential any information obtained in
the audit. If requested, a Party shall provide to the other Party statements evidencing the quantity of electric energy provided under this Agreement for up to the prior twenty-four (24) Months. If an audit is requested with respect to any
records held by the a Party or a third party and those records cannot be disclosed to the requesting Party as a result of a confidentiality obligation, then to the extent legally permissible, the auditing Party shall select an independent auditor to
perform the audit consistent with the Parties’ rights under this Agreement and with such confidentiality arrangements as may be required by the confidentiality obligation in question. 
  

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 Article 14 
 Dispute Resolution 
 14.1 Arbitration. Except as otherwise provided below, any dispute arising out of or in
connection with this Agreement or its performance that cannot be resolved after good faith discussions and negotiations between the Parties as set forth in Section 14.2 shall be submitted to binding arbitration. A dispute with respect to
whether a Material Adverse Ruling meets the materiality standard specified in Section 2.3.2.2(c)(1) or (c)(2) shall be subject to dispute resolution pursuant to Section 2.3.2.2.2. A dispute with respect to an invoice shall first be subject
to the procedures set forth in Section 13.5, and if such dispute is not resolved in accordance with such procedures, then such dispute shall be submitted to binding arbitration in accordance with this Article 14. Any arbitration commenced
under this Article 14 shall be conducted in accordance with the North Carolina Arbitration Act, N.C.G.S. Section 1-567 et seq., and the non-administered arbitration rules and procedures of the CPR Institute for Dispute Resolution
(“CPR”) in effect at the time arbitration is commenced, except where specifically modified by this Agreement. 
 14.2 Negotiation and Notice of
Arbitration. Prior to initiating arbitration hereunder, a Party shall provide the other Party with written notice of the dispute, a proposed means for resolving the same, and support for the Party’s position (“Original Notice”).
Thereafter, Representatives of the Parties shall meet in person to discuss the matter and attempt in good faith to reach a negotiated resolution of the dispute. The Parties agree to provide and exchange supporting facts, records and information
regarding the dispute (including calculation and bases) as part of the good faith negotiations. If the Parties have not agreed upon a resolution of the dispute within thirty (30) Days after the provision of the Original Notice or such other
time period as the Parties may agree in writing to allow for discussions and negotiation (“Negotiation Period”), then at any time after the end of the Negotiation Period, a Party may provide written notice to the other declaring an impasse
(“Impasse Notice”) and initiating binding arbitration in accordance with the further provisions of this Article 14. A Party providing an Impasse Notice shall also contemporaneously notify all entities within the EMC Group of the
provision of its Impasse Notice. 
 14.3 Individual, Joint or Consolidated Arbitration. If, within thirty (30) Business Days of EMC’s
provision of an Impasse Notice, Blue Ridge and/or Piedmont also provides an Impasse Notice relating to substantially the same issue as raised by EMC’s Impasse Notice, or if Duke contemporaneously provides each of EMC, Blue Ridge and/or Piedmont
an Impasse Notice relating to substantially the same issue, then each entity within the EMC Group shall have ten (10) Business Days following the expiration of such thirty (30) Business Day period to provide written notification to Duke
stating whether or not such entity will voluntarily proceed in a joint or combined arbitration. 
 If EMC and one or more of the entities
within the EMC Group that have provided or received Impasse Notices within the specified time period relating to substantially the same issue elect to proceed individually or in more than one arbitration proceeding, Duke shall have the right to file
a motion to consolidate such Impasse Notices with EMC’s Impasse Notice in a single proceeding. The motion to consolidate such Impasse Notices shall be served within ten (10)
  

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 Business Days of the date when each entity within the EMC Group has provided notice as to whether or not it will
voluntarily proceed in a consolidated arbitration. Duke’s motion to consolidate shall be decided in the first commenced arbitration by one arbitrator (if the Streamlined Arbitration Process is used) or one (1) arbitration panel (if the
Standard Arbitration Process is used), provided that the arbitrator(s) shall satisfy the qualifications required pursuant to the third sentence of Section 14.6.1(1) or Section 14.6.2(2), as applicable, with respect to all entities in the
arbitration proceedings that are the subject of the motion to consolidate. If Impasse Notices are simultaneously given by EMC and one or more other entities within the EMC Group, then Duke shall have sole discretion to designate which of the Impasse
Notices shall be treated as the first given for purposes of determining which arbitrator(s) shall decide the motion to consolidate, and shall provide written notice of such designation in the motion to consolidate arbitrations. The procedures set
forth in Sections 14.6.1 and 14.6.2 for each arbitration proceeding in which the motion to consolidate was not filed shall be held in abeyance pending the decision on the motion to consolidate by the arbitrator(s) in the arbitration proceeding in
which the motion to consolidate was filed. 
 In determining whether consolidation of one or all is appropriate, the arbitrator(s) shall
consider whether the same or substantially similar issue or issues will be subject to the arbitration(s); EMC’s reasons for opposing consolidation and Duke’s reasons for seeking consolidation; and the fundamental fairness and efficiency in
proceeding individually, jointly or consolidated. The arbitrator(s) decision on the motion to consolidate shall be binding on the Parties and not subject to appeal. 
 In the event the motion to consolidate is denied (unless otherwise agreed by the Parties and the other entities of the EMC Group that have provided or received such Impasse Notices), the arbitrations shall each
proceed, subject to resolution of scheduling issues, with no arbitration being stayed as a result of the denial of the motion. In the event the motion to consolidate is granted, each entity within the EMC Group, other than the entity which is a
party to the proceeding in which the motion to consolidate was filed, shall move for dismissal of the respective arbitration actions in which it is a party. 
 14.3.1 Individual Treatment of EMC in Joint or Consolidated Arbitration. For purposes of joint or combined arbitration, all of the entities within the EMC Group participating in the proceeding shall be treated
as one (1) Party for purposes of Article 14, with the following exceptions. First, EMC shall be treated as a separate Party for purposes of Selection of Arbitration Process set forth in Section 14.4. Second, EMC may reach its own
independent, voluntary resolution with Duke and may pursue its own strategy and prosecute its case with its own legal counsel in the joint or combined arbitration. Third, EMC will be treated as a separate Party for purposes of discovery in
Section 14.6.1(4) or 14.6.2(4). Fourth, EMC will be treated as a separate Party for purposes of a Submission and for the adoption of the resolution and the associated monetary amount with respect to the ultimate decision of the arbitrator(s).
Fifth, EMC will be treated as a separate Party for purposes of the third sentence of Section 14.6.1(1) and Section 14.6.2(2). 
 14.4 Selection
of Arbitration Process. No later than thirty (30) Days following receipt of the Impasse Notice, or any longer time period as agreed to by the Parties, the Parties shall agree on which arbitration process specified herein to use: either the
Standard Arbitration Process or the 
  

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 Streamlined Arbitration Process. Should the Parties fail to agree on the arbitration process within thirty (30) Days
following receipt of the Impasse Notice, then the Standard Arbitration Process shall be used; provided however, that the Streamlined Arbitration Process shall be used for any dispute where the damages in dispute or other monetary value at stake is
alleged to be two hundred fifty thousand dollars ($250,000) or less for EMC or Duke, or in a joint or combined proceeding two hundred and fifty thousand dollars ($250,000) or less for each entity within the EMC Group that is participating in the
proceeding. If the damages in dispute or other monetary value at stake in a combined proceeding is alleged to be two hundred fifty thousand dollars ($250,000) or less for EMC and at least one (1) other of the entities within the EMC Group
participating in a joint or combined proceeding, the Streamlined Arbitration Process shall be used upon the request of either Party (or any of the other entities within the EMC Group participating in the proceeding) made within thirty (30) Days
following the receipt of the Impasse Notices. 
 14.5 Initiation of Arbitration. Unless otherwise agreed by the Parties and except as provided for in
Section 14.3, arbitration shall be deemed to be initiated when the arbitration process is agreed upon or otherwise determined pursuant to Section 14.4 (“Selection Date”). 
 14.6 Arbitration Processes. 
 14.6.1 Standard
Arbitration Process. The following shall be the process that is used, in accordance with this Article 14, as the Standard Arbitration Process under this Agreement. By mutual agreement, the Parties may in any given arbitration and for the
purposes of that arbitration alone modify or forego any procedural requirement or rule specified hereunder as part of the Standard Arbitration Process: 
 (1) Selection of Arbitrators. The Party initiating arbitration shall nominate one (1) arbitrator no later than fifteen (15) Days following the Selection Date. The other Party shall nominate one
(1) arbitrator no later than thirty (30) Days after the Selection Date. Each of the two Party-nominated arbitrators shall be unaffiliated with any of the Parties or their predecessors or Affiliates; shall not be current or former employees
of the nominating Party or its predecessors or Affiliates and shall be without material financial alliance with the nominating Party or its predecessors or Affiliates such that said arbitrator is able to participate in the arbitration without
evident partiality or actual bias in favor of the nominating Party; unless such pecuniary interest or affiliation is expressly acknowledged and waived by all Parties. The two (2) arbitrators shall jointly appoint a third (3rd), neutral arbitrator within thirty (30) Days after the
nomination of the second (2nd) arbitrator. The neutral arbitrator shall be the chairperson of the tribunal.
This thirty (30) Day period may be extended to sixty (60) Days by agreement of both Parties. If the two (2) arbitrators are unable to agree on a third (3rd) arbitrator within the specified time period, then a third
(3rd) arbitrator shall be selected by the CPR with due regard given to the selection criteria herein and in the subsequent subsections of Article 14 and input from the Parties and other arbitrators. The Parties shall request CPR to
complete selection of the third (3rd) arbitrator no later than thirty (30) Days following their request
for selection of the arbitrator. Costs charged by CPR for this service shall be borne one-half (1/2) by Duke and one-half (1/2) by EMC; provided that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3,
the costs charged by CPR shall be 
  

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 borne one-half (1/2) by Duke and one-half (1/2) by the entities within the EMC Group that
participate in such consolidated arbitration. In the event CPR should fail to select the third (3rd) arbitrator
within thirty (30) Days following the Parties’ request for selection of the arbitrator, then any Party may petition a court of competent jurisdiction in the State of North Carolina to select the third (3rd) arbitrator. Due regard shall be given to the selection criteria and input from the Parties and other arbitrators. Each of the arbitrators shall
take an oath of neutrality. 
 (2) Additional Qualifications of Arbitrators. Unless otherwise agreed to by the Parties,
each of the arbitrators shall be competent and experienced in matters involving the electricity business in the United States. Such experience shall be conclusively demonstrated by ten (10) years or more of electric industry experience as a
practicing attorney or other experience or expertise as agreed to by the Parties. 
 (3) Replacement of Arbitrators. If
prior to the conclusion of the arbitration any arbitrator becomes incapacitated or otherwise unable to serve, then a replacement arbitrator with the qualifications specified herein shall be appointed in the manner and timeframe (such timeframe
starting anew following the unavailability of the arbitrator to be replaced) described in Section 14.6.1(1) above. 
 (4)
Discovery. Discovery and other pre-hearing procedures shall be conducted as set forth herein, as otherwise agreed by the Parties, or if they cannot agree, as determined by a majority of the arbitrators. Each Party shall have the right to
propound up to ten (10) interrogatories, the right to request relevant documents and records, conduct depositions (including depositions of experts), designate experts, and obtain the opinion of opposing experts. 
 (5) Hearing. Within fifteen (15) Days after completion of discovery, each Party shall contemporaneously submit by overnight
delivery and electronic mail to the arbitrators a precise statement of the dispute, a proposed resolution of the dispute, including a monetary amount and the supporting calculations if applicable, and the factual and/or legal support therefor (the
“Submission”). The next Business Day the Parties shall exchange complete Submissions by overnight delivery and electronic mail. Within fifteen (15) Days after receiving the other Party’s Submission, each Party may submit by
overnight delivery and electronic mail to the other Party and the arbitrators a reply statement to the other Party’s Submission. The Parties shall conduct a hearing in Charlotte, North Carolina no later than the later of (i) sixty
(60) Days following selection of the third (3rd) arbitrator, (ii) forty-five (45) Days after all pre-hearing discovery has been completed, or (iii) forty-five (45) Days after the issuance of the arbitrators’ decision denying a motion to consolidate
pursuant to Section 14.3, at which the Parties shall present such evidence, argument, and witnesses as they may choose. Prior to the beginning of the hearing, the Parties may submit a joint statement of undisputed facts and/or issues to be
resolved, if the Parties so agree to submit such statement or if the arbitrators order submission of the statement. If the Parties agree, or if allowed by a majority of the arbitrators, the Parties each may submit a post-hearing brief to the
arbitrators within ten (10) Business Days of completion of the hearing. No reply briefs shall be allowed unless otherwise permitted by a majority of the arbitrators. 
  

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 14.6.2 Streamlined Arbitration Process. The following shall be the process that is used, in
accordance with this Article, as the Streamlined Arbitration Process under this Agreement. By mutual agreement, the Parties may in any given arbitration and for the purposes of that arbitration alone modify or forego any procedural requirement or
rule specified hereunder as part of the Streamlined Arbitration Process: 
 (1) Selection of Arbitrator. No later than
thirty (30) Days following the Selection Date, the Parties shall agree upon a single arbitrator to conduct the arbitration. If the Parties are unable to agree on an arbitrator, then the arbitrator shall be selected by the CPR with due regard
given to input from the Parties and in conformity with the qualifications specified herein. The Parties shall request CPR to complete selection of the arbitrator no later than thirty (30) Days following their request for selection of an
arbitrator. Costs charged by CPR for this service shall be borne one-half (1/2) by Duke and one-half (1/2) by EMC; provided that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3, the costs charged by
CPR shall be borne one-half (1/2) by Duke and one-half (1/2) by the entities within the EMC Group that participate in such consolidated arbitration. In the event CPR should fail to select the arbitrator within seventy-five (75) Days
after the Selection Date, then any Party may petition a court of competent jurisdiction in the State of North Carolina to select the arbitrator. Due regard shall be given to the selection criteria and input from the Parties. The arbitrator shall
take an oath of neutrality. 
 (2) Qualification of the Arbitrator. The arbitrator shall be unaffiliated with any of
the Parties or their predecessors or Affiliates, such that the arbitrator: 
 (a) Shall not be a current or former employee,
advisor, attorney or consultant; 
 (b) Shall be without material financial alliance, such that said arbitrator is able to
participate in the arbitration without evident partiality or bias, unless such pecuniary interest or affiliation is expressly acknowledged and waived by all Parties; 
 (c) Shall be competent in matters involving the electricity business in the United States and shall have ten (10) years or more of
electric industry experience as a practicing attorney or such other experience or expertise as agreed by the Parties; and 
 (d) Shall take an oath of neutrality. 
 (3) Replacement of Arbitrator. If prior to the conclusion of the
arbitration the arbitrator becomes incapacitated or otherwise unable to serve, then a replacement arbitrator with the qualifications specified herein, shall be appointed in the manner and timeframe (such timeframe starting anew following the
unavailability of the arbitrator to be replaced) described in Section 14.6.2(1) above. 
 (4) Discovery. Discovery
and other pre-hearing procedures shall be conducted as set forth herein, as otherwise agreed by the Parties, or if they cannot agree, 
  

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 as determined by the arbitrator. Each Party shall have the right to propound up to ten
(10) interrogatories, the right to request relevant documents and records, conduct at least three (3) depositions, in addition to obtaining discovery of the opinions of any experts and the right to depose any experts (which are not
included in the three (3) depositions above). Additional discovery may be conducted only as allowed by the arbitrator or agreed by the Parties. 
 (5) Hearing. Within fifteen (15) Days after completion of discovery, each Party shall contemporaneously submit a Submission by overnight delivery and electronic mail to the arbitrator. The next Business Day, the
Parties shall exchange complete Submissions by overnight delivery and electronic mail. Within fifteen (15) Days after receiving the other Party’s Submission, each Party may submit by overnight delivery and electronic mail to the other
Party and the arbitrator a reply statement to the other Party’s Submission. The Parties shall conduct a hearing in Charlotte, North Carolina no later than the later of (i) forty-five (45) Days following selection of the arbitrator,
(ii) forty-five (45) Days after all pre-hearing discovery has been completed, or (iii) forty-five (45) days after the issuance of the arbitrator(s)’ decision denying a motion to consolidate pursuant to Section 14.3, at
which the Parties shall present such evidence, witnesses, and argument as they may choose. Unless otherwise ordered by the arbitrator, at least two (2) Days prior to the beginning of the hearing, the Parties may submit a joint statement of
undisputed facts and/or issues to be resolved if the Parties so agree to submit such statement or if the arbitrator orders submission of the statement. If the Parties agree, or if allowed by the arbitrator, the Parties may each submit a post-hearing
brief to the arbitrator within ten (10) Business Days of completion of the hearing. No reply briefs shall be allowed unless otherwise permitted by the arbitrator. 
 14.7 Decision. The arbitrator (if the Streamlined Arbitration Process is used) or a majority of the arbitrators (if the Standard Arbitration Process is used) shall render his or their decision in favor of one
Party or the other by adopting the resolution and the associated monetary amount requested by the prevailing Party in its Submission. The arbitrator(s) must determine the prevailing Party by interpreting the meaning and intent of the language of
this Agreement, applying the applicable Law to the relevant facts and selecting the arbitration ruling proposed by the Parties that most closely correlated to their decision based upon this Agreement, the applicable Law and the relevant facts. In
rendering the decision, the arbitrator(s) shall interpret and apply the terms and conditions of this Agreement, and consider any relevant evidence and testimony, but shall not have the power to add to or modify any provision of this Agreement or to
recommend any additions or modifications or to render a decision that does not adopt the resolution and the associated monetary amount requested by the prevailing Party in its Submission. The arbitrator(s) shall render a decision within thirty
(30) Days following the later of the conclusion of the hearing or the submission of post-hearing briefs. The decision shall be rendered in writing and shall be final and binding upon the Parties. The decision may be filed in a court of
competent jurisdiction, confirmed and may be enforced by any Party as a final judgment in such court, but shall have no precedential effect on future arbitrations under or arising out of this Agreement except for purposes of enforcement in a court
of competent jurisdiction or for the assertion of collateral estoppel/issue preclusion or res judicata/claim preclusion in another proceeding. The Parties expressly acknowledge that no appeal of the arbitrator’s (or arbitrators’)
decision shall be allowed. Except as provided in Section 16.6.4 of this Agreement, the arbitrator(s) shall have no authority to award special, exemplary, punitive, or consequential damages. 
  

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 14.8 Expenses. The compensation and expenses of the arbitrator(s) shall be chargeable to and borne one-half
(1/2) by Duke and one-half (1/2) by EMC; provided, that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3, the costs charged by CPR shall be borne one-half (1/2) by Duke and one-half (1/2) by
the entities within the EMC Group that participate in such consolidated arbitration; provided, however, that each Party shall bear the compensation and expenses of its own counsel and any retained or expert witnesses. Any costs incurred by a Party
in seeking judicial enforcement of any final decision rendered by arbitration conducted under this Article 14 shall be chargeable to and borne exclusively by the Party against whom such court order is obtained. It is expressly acknowledged that the
failure of the entities within the EMC Group that participate in a consolidated arbitration to reach agreement on the allocation of costs among such entities shall not increase Duke’s share of the costs incurred under this Section 14.8 or
Sections 14.6.1(1) or 14.6.2(1) above one-half (1/2) of the total costs at issue. 
 14.9 Effect of Dispute Resolution Procedures. The initiation
of the dispute resolution procedures under this Article 14 shall not affect the Parties’ respective obligations and rights under this Agreement during the pendency of any such procedures. 
 14.10 Confidentiality. The existence, contents, or results of any arbitration proceeding under this Article 14 shall be deemed to be Confidential Information and
shall be subject to the confidentiality provisions set forth in Section 16.6. 
 Article 15 
 Credit and Collateral Requirements 
 15.1 Posting of
Collateral. To protect either Party against potential default of payment or performance, any Party that experiences a Material Adverse Change (“MAC”) shall post as collateral an amount equal to the two (2) highest Months of
Duke’s billings to EMC for the previous twelve (12) Months. Such collateral shall be provided by the Party experiencing the MAC in cash, depository agreements, or letters of credit from a financial institution reasonably acceptable to the
Party not experiencing the MAC within three (3) Business Days after the date on which the MAC occurs. Any such depository agreement or letter of credit shall be in a form satisfactory to the Party not experiencing the MAC in its reasonable
discretion. A financing institution participating in a depository agreement or providing a letter of credit entered into for purposes of this Section 15.1 shall be deemed reasonably acceptable by the Party not experiencing the MAC if it has and
maintains a minimum long term credit rating of A- or better from S&P, A3 or better from Moody’s or A- or better from Fitch Ratings, or is with or from CFC and/or CoBank. 
 15.2 Material Adverse Change. Duke shall be deemed to have experienced a MAC if its unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated below BBB- by S &
P and below Baa3 by Moody’s. EMC shall be deemed to have experienced a MAC (a) if it fails to meet the then-current Debt Service Coverage Ratio required 
  

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 of EMC by RUS, as determined by averaging the two (2) highest annual ratios during the most recent three
(3) Years, and (b) the then-current Times Interest Earned Ratio required of EMC by RUS, as determined by averaging the two (2) highest annual ratios during the most recent three (3) Years. The failure by either Party to timely
fulfill a payment or reimbursement obligation, including, in the case of Duke a failure to pay Cover Costs, under this Agreement also shall constitute a MAC by that Party. 
 15.3 Continuing Nature of Collateral Requirement. The Party experiencing the MAC must continue to post the collateral until the MAC is cured. The Party not experiencing the MAC shall have the right to draw
upon, use, and dispose of all collateral that is posted under Section 15.1, if the Party experiencing the MAC fails to fulfill any of its payment or reimbursement obligations, including, in the case of Duke a failure to pay Cover Costs, under
this Agreement, and such failure constitutes an Event of Default. In the event any collateral is drawn upon by the Party not experiencing the MAC in accordance with the provisions of Section 15.5, the Party experiencing the MAC shall within
three (3) Business Days fully replenish the collateral to the monetary amount required by Section 15.1. 
 15.4 Interest on Cash Used as
Collateral. Any interest earned on collateral held under a depository agreement with a financial institution shall be paid to the Party posting the collateral in accordance with the terms of the depository agreement. If cash collateral is
posted, the Party holding the cash collateral shall pay interest to the Party posting the cash collateral at the Federal Funds Effective Rate. The Federal Funds Effective Rate is the rate for that Day opposite the caption “Federal Funds
(Effective)” as set forth in the weekly statistical release designated as H.15(519), or any successor publication published by the Board of Governors of the Federal Reserve System. The Party posting the cash collateral shall invoice the Party
holding the cash collateral for interest accrued during the previous Month and the Party holding the cash collateral shall pay such amount within ten (10) Days of receipt of such invoice. 
 15.5 Grant of Security Interest/Remedies. To secure their obligations under this Agreement, any Party posting collateral under Section 15.1 hereby grants to
the Party not experiencing the MAC a present and continuing security interest in, and lien on (and right of setoff against), and assignment of, all cash collateral, cash equivalents collateral and any and all proceeds resulting therefrom or the
liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of, that Party, and the posting Party agrees to take such action as the non-posting Party reasonably requires in order to perfect the non-posting Party’s
first-priority security interest in, and lien on (and right of setoff against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence or deemed occurrence and during the
continuation of an Event of Default, the Non-Defaulting Party may do any one or more of the following: (i) exercise any of the rights and remedies of a secured party with respect to all collateral, including any such rights and remedies under
Law then in effect; (ii) exercise its rights of setoff against any and all property of the Defaulting Party in the possession of the Non-Defaulting Party or its agent; (iii) draw on any outstanding letter of credit issued for its benefit;
and (iv) liquidate all collateral then held by or for the benefit of the Non-Defaulting Party free from any claim or right of any nature whatsoever of the Defaulting Party, including any equity or right of purchase or redemption by the
Defaulting Party. The Party drawing upon the collateral shall apply the collateral drawn upon or otherwise realized upon the exercise of any rights or remedies granted under this Section 15.5, to reduce the obligations of 
  

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 the Party posting the collateral under this Agreement (the posting Party remaining liable for any amounts owing after
such application), and to return any surplus collateral or proceeds remaining after the posting Party’s obligations are satisfied in full. 
 15.6
Notice, Information. Each Party shall provide the other Party written notice within two (2) Business Days of the occurrence of an MAC affecting the notifying Party or of the occurrence of any event that may reasonably cause a MAC. Duke
shall provide EMC a copy of Duke’s annual report, and any amendments thereto, within thirty (30) Days after the issuance/filing with the Securities and Exchange Commission of such report or amendment. EMC shall provide Duke with (a) a
copy of EMC’s RUS Form 7 each Year, and any amendments to such Form 7, within thirty (30) Days after the filing of such report or amendment with RUS, and (b) the annual Debt Service Coverage Ratio and Times Interest Earned Ratio
required of EMC by RUS for the Year in which the Effective Date occurs and for the two (2) immediately preceding Years. 
  

	15.7	Definitions. 

 “Accounting
Requirements” means any system of accounts prescribed by a federal regulatory authority having jurisdiction over the applicable Party or, in the absence thereof, the requirements of generally accepted accounting principles applicable to
businesses similar to that of the applicable Party; and provided, further, that EMC may use a uniform system of accounts prescribed from time-to-time by the RUS. 
 “CFC” means the National Rural Utilities Cooperative Finance Corporation. 
 “CoBank” means CoBank, ACB. 
 “Depreciation and Amortization Expense” shall mean an amount constituting the depreciation and amortization of EMC computed pursuant to Accounting Requirements. As used in the calculation of the Debt Service
Coverage Ratio, Depreciation and Amortization Expense shall mean the amount reported on the RUS Form 7, Part A, Line 12(b), its successor, or the equivalent. 
 “Debt Service Coverage Ratio” means the ratio determined as follows: for any Year add (i) Patronage Capital or Margins (RUS
Form 7, Part A, Line 28(b), or its successor), plus (ii) Interest Expense (RUS Form 7, Part A, Lines 15(b) and 16(b), or its successor), plus (iii) Depreciation and Amortization Expense for such year (RUS Form 7, Part A, Line 12(b), or its
successor), plus (iv) Short Term Interest Expense; and divide such total by the sum of all payments of Principal and Interest Expense during such year (RUS Form 7, Part N, Line 12(d), or its successor) plus Short Term Interest Expense; provided
however, that in the event that any long-term debt has been refinanced during such Year the payments of Principal and Interest Expense required to be made during such Year on account of such long-term debt shall be based (in lieu of actual payments
required to be made on such refinanced long-term debt) upon the larger of (a) an annualization of the payments required to be made with respect to the refinanced debt during the portion of such Year such refinancing debt is outstanding or
(b) the payment of Principal and Interest Expense required to be made during the following Year on account of such refinancing debt. 
  

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 “Equity” shall mean EMC’s equities (RUS Form 7, Part C, Line 35, its
successor, or the equivalent) computed pursuant to the Accounting Requirements. 
 “Interest Expense” as used in the
calculation of the Debt Service Coverage Ratio, Interest Expense shall mean the amount reported on the RUS Form 7, Part A, Lines 15(b) and 16(b), its successor, or the equivalent. 
 “Material Adverse Change” or “MAC” shall have the meaning specified in Section 15.2. 
 “Patronage Capital or Margins” as used in the calculation of the Debt Service Coverage Ratio or TIER, shall mean the amount
currently reported in the RUS Form 7, Part A, Line 28(b), its successor, or the equivalent. 
 “Principal and Interest
Expense” shall mean that amount of principal billed on account of total long-term debt of EMC as computed pursuant to the Accounting Requirements. As used in the calculation of the Debt Service Coverage Ratio, Principal and Interest Expense
shall mean the amount currently reported on RUS Form 7, Part N, Line 12(d), or its equivalent. 
 “Restricted
Rentals” shall mean all rentals required to be paid under finance leases and charged to income, exclusive of any amounts paid under such lease (whether or not designated therein as rental or additional rental) for maintenance or repairs,
insurance, taxes, assessments, water rates or similar charges. For the purpose of this definition the term “finance lease” shall mean any lease having a rental term (including the term for which such lease may be renewed or extended at the
option of the lessee) in excess of three (3) years and covering property having an initial cost in excess of two hundred fifty thousand dollars ($250,000) other than automobiles, trucks, trailers, other vehicles (including aircraft and ships),
office, garage and warehouse space and office equipment (including computers). 
 “Short Term Interest Expense”
shall mean an amount constituting the interest expense with respect to the total short-term debt of EMC, computed pursuant to Accounting Requirements, provided that all short-term debt obtained from either CFC or CoBank shall be excluded.

 “Times Interest Earned Ratio” or “TIER” shall mean the ratio determined as follows for each year: add
(i) Patronage Capital or Margins of EMC and (ii) Interest Expense of EMC, and divide the total so obtained by Interest Expense of EMC. 
  

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 Article 16 
 Additional Terms 
 16.1 Representations Warranties and Covenants. 
 16.1.1 Representations and Warranties. 
 16.1.1.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party on the Effective Date, the Commencement Date and the first Day of any Extension Term that: 
 (1) There is not pending or, to its knowledge, threatened against it or any of its Affiliates any Legal Proceeding that could materially
adversely affect its ability to perform its obligations under this Agreement; 
 (2) No event with respect to it has occurred
or is continuing that would constitute an Event of Default, and no such event would occur as a result of its entering into or performing its obligations or circumstances under this Agreement; 
 (3) It is acting as principal for its own account and has made its own independent decision to enter into this Agreement; 
 (4) It has knowledge and experience in financial matters and in the electric industry that enables it to evaluate the merits and risks of
this Agreement, and it is capable of assuming such risks. It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate and proper for it based on its own
judgment, is not relying upon the advice or recommendations of the other Party in doing so, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions, and risks of this Agreement; 
 (5) It has entered into this Agreement in connection with the conduct of its business, and it has the capacity or ability to make or take
delivery of all products or services referred to in this Agreement; 
 (6) The other Party is not acting as a fiduciary or an
advisor with respect to this Agreement; 
 (7) It is not Bankrupt and there are no proceedings pending or being contemplated
by it or, to its knowledge, threatened against it that could result in it being or becoming Bankrupt; and 
 (8) It is an
entity subject to the procedures and substantive provisions of the United States Bankruptcy Code applicable to U.S. corporations generally. 
  

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 16.1.1.2 Continuing Mutual Representations. Each Party represents, and warrants that on each of
the Effective Date, the Commencement Date and throughout the Term, it will cause the following to be materially true and correct: 
 (1) It is duly organized, validly existing and in good standing under the Laws of the state of its incorporation; 
 (2) It has all requisite corporate power to own, operate and lease its properties and carry on its business as contemplated by this Agreement; 
 (3) Subject to the conditions provided for in Article 3, it has all lender authorizations and authorizations from Governmental Authorities necessary for it to legally perform its obligations under this Agreement;

 (4) The execution, delivery and performance of this Agreement and any other documentation it is required to deliver under
this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms or conditions in its governing documents, any contract or other agreement to which it is a party or any Law applicable to it;

 (5) The individual(s) executing and delivering this Agreement and any other documentation required to be delivered under
this Agreement are duly empowered and authorized to do so at the time of such execution and delivery; and 
 (6) This
Agreement has been duly and validly executed and delivered by such Party and constitutes such Party’s legally valid and binding obligation enforceable against it in accordance with the terms thereof, subject to any Equitable Defenses.

 16.1.1.3 Additional Representations and Warranties of Duke. Duke further represents and warrants that: 
 (1) Subject to the conditions provided for in Article 3, Duke is fully authorized to sell the electric capacity and energy and Scheduling
Agent Services it is obligated to provide under this Agreement at the rates and terms contemplated by this Agreement; 
 (2)
Nothing in Duke’s contracts with other parties prevents Duke from fully performing its obligations under this Agreement; and 
 (3)(a)
As of the Effective Date, Duke is a wholly owned direct subsidiary of Duke Energy Corporation, a Delaware corporation; and 
 (b) The
provisions of the NCUC Order dated March 24, 2006, issued in Docket No. E-7, Sub. 795, the merger between Duke Energy Corporation, a North Carolina corporation, and Cinergy Corp., which closed on April 3, 2006, and the conversion of Duke
Energy Corporation, 
  

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 a North Carolina corporation, to Duke on April 3, 2006, did not adversely affect (1) the
franchise granted to Duke by the NCUC to provide NCUC regulated electric power generation, transmission, distribution, delivery, or sales and other related services to the Duke Native Load customers located within the State of North Carolina,
(2) the assets constituting Duke’s Generation System, or (3) Duke’s ability to perform its obligations under this Agreement. 
 16.1.1.4 Additional Representations and Warranties of EMC. EMC further represents and warrants that: 
 (1)
Subject to the conditions provided for in Article 3, EMC is fully authorized to purchase the electric energy and capacity, and Scheduling Agent Services provided under this Agreement at the rates and terms contemplated by this Agreement; and

 (2) Nothing in EMC’s contracts with other parties prevents EMC from fully performing its obligations under this
Agreement. 
 16.1.2 Covenants. 
 16.1.2.1 Duke. Duke covenants that: (i) neither Duke nor any of its Affiliates or subsidiaries shall, during the Term, take any action that could reasonably be anticipated to cause Duke to lose its authority to make wholesale
sales of power as contemplated under this Agreement; (ii) Duke shall not take any action during the Term that could reasonably be anticipated to cause EMC to lose its authority to purchase electric capacity and energy and Scheduling Agent
Services, as contemplated by this Agreement and, as a result, EMC loses its authority to purchase electric capacity and energy and Scheduling Agent Services; and (iii) Duke shall perform its obligations under this Agreement in accordance with
Prudent Utility Practice, including applicable NERC and SERC guidelines, and the Transmission Provider’s OATT. 
 16.1.2.2 EMC.
EMC covenants that: (i) it shall not, during the Term, take any action that could reasonably be anticipated to cause it to lose its authority to purchase, or Duke to lose its authority to provide, the electric capacity and energy and Scheduling
Agent Services as contemplated by this Agreement and, as a result, EMC loses its authority to purchase or Duke loses its authority to provide electric capacity and energy and Scheduling Agent Services; (ii) it shall, in the event one of the
sellers under a contract pursuant to which EMC has acquired an EMC Contract Resource breaches the terms of the contract in a manner that materially affects the quality or quantity of deliveries under such contract, use Commercially Reasonable
Efforts to pursue the enforcement of EMC’s contract rights; (iii) electric energy delivered by MSCG under the PPA qualifies as Firm Energy; and (iv) EMC shall perform its obligations under this Agreement in accordance with Prudent
Utility Practice, including applicable NERC and SERC guidelines, and the Transmission Provider’s OATT. 
  

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 16.2 Assignment. 
 16.2.1 General. 
 16.2.1.1 Duke shall not assign this Agreement or its rights hereunder without the
prior written consent of EMC, which consent shall not be unreasonably withheld; provided, however, that Duke may, without the consent of EMC, (a) transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds
hereof in connection with any financing or other financial arrangements (without relieving itself from liability hereunder), or (b) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of Duke’s
Generation System, and whose unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated BBB- or higher by S&P or Baa3 or higher by Moody’s (or, in the alternative, whose obligations under this
Agreement are guaranteed by a guarantor that meets the foregoing credit standards, provided that the form of the guaranty shall be reasonably satisfactory to EMC). Duke shall be relieved of all liability under this Agreement arising on and after the
effective date of an assignment that satisfies the requirements of subpart (b) above. 
 16.2.1.2 EMC shall not assign this Agreement or
its rights hereunder without the prior written consent of Duke, which consent shall not be unreasonably withheld; provided, however, that EMC may, without the consent of Duke, (a) transfer, sell, pledge, encumber or assign this Agreement or the
accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements (without relieving itself from liability hereunder), or (b) transfer or assign this Agreement to any person or entity (A) succeeding to
substantially the same Service Area and retail load as the EMC Native Load and to EMC’s rights under the EMC Contract Resources, and (B): 
 (i) if the transferee or assignee is an electric membership corporation organized under Article 2 Chapter 117 of the North Carolina General Statutes, it meets both the then-current Debt Service Coverage Ratio required of EMC by
RUS, as determined by averaging the two (2) highest annual ratios during the most recent three (3) years, and the then-current Times Interest Earned Ratio required of EMC by RUS, as determined by averaging the two (2) highest annual
ratios during the most recent three (3) years, or 
 (ii) if the transferee or assignee is not an electric membership corporation
organized under Article 2 Chapter 117 of the North Carolina General Statutes, then its unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated BBB- or higher by S&P or Baa3 or higher by
Moody’s (or, in the alternative, whose obligations under this Agreement are guaranteed by a guarantor that meets the foregoing credit standards, provided that the form of the guaranty shall be reasonably satisfactory to Duke). EMC shall be
relieved of all liability under this Agreement arising on and after the effective date of an assignment that satisfies the requirements of this subpart (B)(ii). 
 16.2.1.3 This Agreement shall be binding upon and inure to the benefit of the permitted successors and permitted assigns of the Parties. Any assignment made without a consent required hereunder shall be void and of no
force or effect as against the non-consenting Party. No sale, assignment, transfer, or other disposition permitted by this Agreement shall affect, release, or discharge any Party from its rights or obligations under this Agreement, except as may be
expressly provided by this Agreement or by written agreement of the Parties. 
  

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 16.2.2 Assignment For Security. Notwithstanding any other provision of this Agreement, a Party,
without the other Party’s consent but, if such assigning Party is then a borrower of the RUS, only with the consent of the Administrator, may assign, transfer, mortgage or pledge its interest in this Agreement as security (an “Assignment
for Security”) for any obligation secured by any indenture, mortgage, or similar lien on its system assets without limitation on the right of the secured party to further assign this Agreement, including the assignment to create a security
interest for the benefit of the Government, acting through the Administrator, or for the benefit of any third party. 
 16.2.3 Assignment
By Administrator. After any Assignment for Security to the Administrator or other secured party (including any indenture trustee under any indenture securing the obligations of the Party), the Administrator or other secured party, without the
approval of the other Party, may (i) cause the interest in this Agreement of the Party who made the Assignment for Security to be sold, assigned, transferred or otherwise disposed of to a third party pursuant to the terms governing such
Assignment for Security, or (ii) if the Administrator or other secured party first acquires this Agreement, sell, assign, transfer or otherwise dispose of this Agreement to a third party; provided, however, that in either case the Party who
made the Assignment for Security is in default of its obligations to the Administrator or other secured party that are secured by such security interest. 
 16.3 Liability and Indemnification. 
 16.3.1 Indemnity. Each Party shall indemnify, defend, and hold harmless the
other Party from and against: 
 (1) Any Claims arising from or out of any event, circumstance, act, or incident first
occurring or existing during the period when control and title to any electric energy is vested in such Party as provided in Section 4.5, and 
 (2) Any Governmental Charges for which such Party is responsible under Section 16.7.2. 
 Notwithstanding the foregoing, no Party will be required to indemnify, defend, or hold harmless any other Party from any losses or Claims under this Section 16.3.1 to the extent that such loss or Claim was caused by the other
Party’s gross negligence or willful misconduct. 
 16.3.2 Liability Limitations. 
 16.3.2.1 Limitation of Remedies. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE
ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE RESPONSIBLE PARTY’S LIABILITY SHALL BE
LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR 
  

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 DAMAGES AT LAW OR IN EQUITY ARE WAIVED REGARDLESS OF THE FAULT, NEGLIGENCE, OR STRICT LIABILITY OF THE PARTY WHOSE
LIABILITY IS RELEASED OR LIMITED THEREBY. 
 IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, AND EXCEPT AS OTHERWISE
EXPLICITLY PROVIDED IN SECTION 16.6.4, THE RESPONSIBLE PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES (INCLUDING INTEREST AS PERMITTED BY APPLICABLE LAW) ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY
AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED (EXCEPT AS PROVIDED IN SECTION 16.29). 
 UNLESS EXPRESSLY HEREIN
PROVIDED, (INCLUDING AS PROVIDED IN SECTION 16.6.4) NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, MULTIPLE, EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS, OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR IN
CONTRACT UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY
PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE. 
 16.3.2.2 Disclaimer. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, EACH PARTY, WITH RESPECT TO THE SUPPLY OF ELECTRIC ENERGY AND CAPACITY TO THE OTHER, EXPRESSLY NEGATES ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO CONFORMITY TO MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE. 
 16.3.2.3 Duty to Mitigate. Each Party agrees that is has a duty to mitigate damages, and each covenants that it shall use commercially reasonable efforts to minimize any damages it may incur as a result of the other Party’s
performance or nonperformance of this Agreement. 
 16.4 Force Majeure. Unless otherwise provided by this Agreement, the term “Force
Majeure” means an event or circumstance that: (i) prevents the Party claiming to be affected by it (the “Claiming Party”) from performing its obligations in whole or in part under this Agreement; (ii) is not within the
reasonable control of the Claiming Party, or the result of the negligence of the Claiming Party, and (iii) by the exercise of due diligence, the Claiming Party is unable to overcome in a commercially reasonable manner, and, without limiting the
scope of the definition, includes acts of God, or the public enemy, or insurrection, riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court
order or Governmental Authority or arbitration award (so long as the Claiming Party has not sought or has opposed, to the extent reasonable, such actions or restraints). To the extent that the Claiming Party is prevented by Force Majeure from
carrying 
  

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 out, in whole or part, its obligations hereunder and such Party gives notice and details of the Force Majeure to the
other Party (the “Non-Claiming Party”) as soon as practicable, then the Claiming Party shall be excused from the performance of its obligations other than the obligation to make payments then due or becoming due in respect to performance
prior to the Force Majeure, except as otherwise explicitly provided in this Agreement. The Claiming Party shall remedy the Force Majeure event with all reasonable dispatch. The Non-Claiming Party shall not be required to perform or resume
performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure during the period that such Force Majeure remains in effect. Duke shall not adversely distinguish between EMC’s
Native Load and Duke’s Native Load in claiming an event of Force Majeure. 
 16.5 Events of Default and Remedies. 
 16.5.1 Events of Default. For the purposes of this Agreement, an “Event of Default” means, with respect to a Party (a “Defaulting
Party”), the occurrence of any of the following: 
 (1) The failure to make, when due, any payment or reimbursement
required by this Agreement (including any amounts to be credited by one Party to the other Party) or to post or maintain collateral required by this Agreement, if such failure is not remedied within three (3) Business Days after receipt of
written notice of such failure is given to the Defaulting Party by the other Party (“Non-Defaulting Party”). For the purposes of this Section 16.5.1(1), withholding one half (1/2) of a Disputed Amount in accordance with
Section 13.5 shall not constitute failure to make, when due, a payment; 
 (2) Any representation or warranty made by
such Party herein is false or misleading in any material respect when made or when deemed made or repeated; 
 (3) The failure
to perform any material covenant or material obligation set forth in this Agreement (except to the extent constituting a separate Event of Default under this Section 16.5), if such failure is not remedied within three (3) Business Days
after receipt of written notice thereof to the Defaulting Party, provided, that a Party’s failure to perform its obligations under Section 16.1.2.1(iii) or Section 16.1.2.2(iv) shall not in and of itself constitute a material failure
to perform a material covenant or material obligation unless such failure, in the case of Duke, results in a substantial and continuing degradation in reliability of service hereunder or, in the case of EMC, results in a substantial and continuing
degradation in performance hereunder; 
 (4) Such Party becomes Bankrupt; 
 (5) The loss of any authorization from Governmental Authorities necessary to perform its obligations hereunder in accordance with the
terms of this Agreement; 
 (6) Such Party consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all of its assets to, another entity and, at the 
  

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 time of such consolidation, amalgamation, merger, or transfer, the resulting, surviving, or transferee
entity fails to assume all of the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party; 
 (7) The occurrence and continuation of a default, event of default, or other similar condition or event that under one or more agreements
or instruments, individually or collectively, relating to indebtedness for borrowed money in an aggregate amount of not less than twelve million dollars ($12,000,000) in the case of EMC or one hundred fifty million dollars ($150,000,000) in the case
of Duke, that results in the Party’s indebtedness under such agreements or instruments to become immediately due and payable; and 
 (8) With respect to such Party’s guarantor, if any: 
  

	 	(a)	if any representation or warranty made by a guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated;


  

	 	(b)	the failure of a guarantor to make any payment required or to perform any other material covenant or obligation in any guaranty made in connection with this Agreement and such
failure shall not be remedied within three (3) Business Days after written notice; 

  

	 	(c)	a guarantor becomes Bankrupt; 

  

	 	(d)	the failure of a guarantor’s guaranty to be in full force and effect for purposes of this Agreement (other than in accordance with its terms); or 

  

	 	(e)	a guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any guaranty. 

 16.5.2 Notice of Event of Default. In the event a Party becomes aware of any event or circumstance that constitutes an Event of Default, such
Party shall promptly notify the other Party in writing and by telephone. 
 16.5.3 Effect of Event of Default. If at any time an Event
of Default with respect to a Defaulting Party has occurred and is continuing, the other Party (the “Non-Defaulting Party”) may do one or more of the following: 
 (1) If an Event of Default under Section 16.5.1(1) persists for ten (10) Days or longer, terminate this Agreement in accordance
with the notification required pursuant to Sections 2.3.2.1 and 2.3.3 of this Agreement; or 
  

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 (2) If an Event of Default (other than an Event of Default under Section 16.5.1(1))
persists for sixty (60) Days or longer, terminate this Agreement in accordance with Sections 2.3.2.1 and 2.3.3 of this Agreement, provided, however, that if the Defaulting Party is diligently pursuing cure, but such Event of Default is not
capable of being cured within sixty (60) Days, then the period for the Defaulting Party to cure such Event of Default shall be extended from sixty (60) Days to one hundred eighty (180) Days before the Non-Defaulting Party may exercise
its right to terminate this Agreement pursuant to this Section 16.5.3(2). 
 16.5.4 Enforcement of Remedies. The Non-Defaulting
Party may exercise any rights or remedies available at law or equity, subject to the provisions of Article 14 and Sections 15.5 and 16.3 of this Agreement. No delay or failure on the part of a Non-Defaulting Party to exercise any right or
remedy to which it may become entitled on account of an Event of Default shall constitute an abandonment of any such right, and the Non-Defaulting Party shall be entitled to exercise such right or remedy at any time during the continuance of an
Event of Default notwithstanding any delay in enforcing such right. No waiver of any Event of Default shall constitute a waiver of any later Event of Default; all such waivers shall be in writing and shall in no circumstance be deemed effective
unless such waiver is made in writing. All of the remedies and other provisions of this Section 16.5 shall be without prejudice and in addition to any right of setoff, recoupment, combination of accounts, lien, or other right to which any Party
or any of its Affiliates is at any time otherwise entitled, whether by operation of law or in equity, under contract, or otherwise. 
 16.6 Confidential
Information. 
 16.6.1 Prior Confidentiality Agreements Unaffected. Any preexisting confidentiality agreements entered into by the
Parties pertaining to the negotiation and development of this Agreement shall survive by their terms and shall not be considered modified by this Agreement. 
 16.6.2 Authorized Disclosure. Each Party agrees to preserve, to the maximum extent permitted by Law, the confidentiality of Confidential Information supplied to it by the other Party either during the
negotiations leading to this Agreement or during the course of implementing, performing or winding up this Agreement. A Party may disclose Confidential Information received from the other Party to the receiving Party’s Affiliates, auditors,
attorneys, consultants, advisors, persons providing financing to the receiving Party, other entities in the EMC Group that have entered into substantially similar agreements, and to other third parties as may be necessary for the receiving Party to
perform its obligations under this Agreement, provided that any such persons agree in writing to be bound by the confidentiality provisions of this Agreement. Notwithstanding anything contained in this Section 16.6, Confidential Information may
be disclosed to any Governmental Authority requiring such Confidential Information, provided that: (i) such Confidential Information is submitted under applicable provisions, if any, for confidential treatment by such Governmental Authority;
(ii) prior to such disclosure, the Party who supplied the information is given notice of the disclosure requirement (if time permits and the other Party’s counsel determines that such notice is permitted by Law) so that it may take at its
own risk and expense whatever action it deems appropriate, including intervention in any proceeding and the seeking of an injunction to prohibit such disclosure; and (iii) the Party subject to the Governmental Authority endeavors to protect the
confidentiality of 
  

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 any Confidential Information to the extent reasonable under the circumstances and to use its good faith efforts to
prevent the further disclosure of any Confidential Information provided to any Governmental Authority. The Parties recognize that Duke is required to file periodic reports with FERC that disclose certain price, quantity, and related data, and such
filings shall not be deemed a violation of this section. 
 16.6.3 Survival of Confidentiality Obligations. Confidential Information
received from the other Party shall be kept confidential in accordance with the terms of this Agreement for at least five (5) Years after the termination of this Agreement. 
 16.6.4 Right to Remedies. In the event of an unauthorized disclosure to a third party, the limitations on remedies contained in
Section 16.3.2.1 shall not apply, and, in the event of a breach, Parties shall not have an adequate remedy at law and accordingly shall, in addition to any other available legal or equitable remedies, be entitled to an injunction against such
breach without any requirement to post a bond as a condition of such relief. 
 16.7 Governmental Liabilities. 
 16.7.1 Minimization of Tax Liability. Each Party shall use reasonable efforts to implement the provisions of and to administer this Agreement in
accordance with the intent of the Parties to minimize all taxes, so long as neither Party is materially adversely affected by such efforts. 
 16.7.2 Governmental Charges. 
 16.7.2.1 With respect to sales of electric energy made by Duke to EMC, Duke shall pay or cause
to be paid all Governmental Charges imposed by any Government Authority on or with respect to such sales of electric energy to the extent such Governmental Charges arise prior to the Delivery Point. EMC shall pay or cause to be paid all Governmental
Charges on or with respect to such sale of electric energy to the extent such Governmental Charges arise after the Delivery Point (other than ad valorem, franchise, or income taxes that are related to the sale of such product and are, therefore, the
responsibility of Duke). 
 16.7.2.2 With respect to sales of electric energy by EMC to Duke, EMC shall pay or cause to be paid all
Governmental Charges on or with respect to the sale of the electric energy to Duke. 
 16.7.2.3 In the event a Party is required by Law to
remit or pay Governmental Charges that are the other Party’s responsibility hereunder, the Party ultimately liable for the Governmental Charge shall promptly reimburse the remitting Party for such Governmental Charges; provided further that tax
liabilities may be netted pursuant to Section 13.4 of this Agreement. Nothing will obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the Law. 
 16.7.3 Records. If with respect to either Party, any purchase or sale of electric energy is exempt from Governmental Charges it shall, upon
written request of the other Party, provide a certificate of exemption or other reasonably satisfactory evidence of exemption, and shall use reasonable efforts to obtain and cooperate with obtaining any exemption from or reduction of any
Governmental Charges. 
  

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 16.7.4 Cost of Obtaining FERC Approval. The Parties agree that all fees assessed by FERC, or
expenses incurred in obtaining the approval of FERC for this Agreement, shall be the sole responsibility of Duke. 
 16.7.5 Cost of
Obtaining RUS Approval. The Parties agree that all fees assessed by the RUS, or expenses incurred in obtaining the approval of RUS for this Agreement, shall be the sole responsibility of EMC. 
 16.8 Choice of Law. The validity, interpretation and performance of this Agreement and the rights and duties of the Parties arising out of this Agreement
shall be governed by and construed, enforced, and performed in accordance with the Laws of the State of North Carolina. No principle, doctrine, or rule of conflicts of law shall modify or alter the applicability of the Laws of the State of North
Carolina to this Agreement. 
 16.9 Survival of Obligations. Upon the termination of the Parties’ delivery, sale, purchase, and related service
obligations under this Agreement, any monies, penalties or other charges due and owing under this Agreement shall be paid, any corrections or adjustments to payments previously made shall be determined, and any refunds due shall be made, as soon as
practicable but no later than sixty (60) Days after such termination. All indemnity and confidentiality obligations and audit rights shall survive the termination of this Agreement in accordance with their respective terms. Upon the effective
date of any termination of this Agreement, each Party’s obligations provided for in this Agreement will survive termination and remain in effect solely for the purpose of complying with the provisions of this Section 16.9; OTHERWISE, AS
PROVIDED IN ARTICLE 2, TERMINATION OF THIS AGREEMENT IS ABSOLUTE, AND NO OTHER OBLIGATIONS, DUTIES, OR RIGHTS WHATSOEVER ARISING UNDER THIS AGREEMENT SHALL REMAIN IN EFFECT FOLLOWING THE TERMINATION OF THIS AGREEMENT. 
 16.10 Entire Agreement. This Agreement, and the Schedules and Attachments attached hereto, constitute the entire and integrated agreement between the Parties
relating to the rates, terms, and conditions set out in this Agreement as of the Effective Date. This Agreement supersedes all prior agreements (other than the Confidentiality Agreement which became fully executed on November 22, 2004) whether
oral or written, related to the subject matter of this Agreement. The terms of this Agreement, including any Schedules and Attachments attached hereto, are controlling, and no parol or extrinsic evidence, including but not limited prior drafts or
projections of future costs or rates, shall be used to vary, contradict, or interpret the express rates, terms, and conditions of this Agreement or as a basis for challenging the justness and reasonableness of any rate, term, or condition of this
Agreement. 
 16.11 Cost Projections. 
 16.11.1 Duke Cost Projections. Duke makes no warranties or representations whatsoever concerning any cost or rate projections that it provided in connection with the negotiations leading up to the execution of this Agreement and any
such projections provided by 
  

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 Duke under Section 16.26 of this Agreement. EMC assumes the risk of reliance on any projected costs or rates
provided by Duke in connection with the negotiations leading up to the execution of this Agreement or any projections provided by Duke under Section 16.26. Any differences between projected costs or rates provided by Duke and actual costs or
rates will not limit or in any way affect the rates, terms, or conditions of this Agreement or any of the Parties’ rights and obligations hereunder. 
 16.11.2 EMC Cost Projections. EMC makes no warranties or representations whatsoever concerning any cost or rate projections that it provided in connection with the negotiations leading up to the execution of
this Agreement and any such projections provided by EMC during the Term. Duke assumes the risk of reliance on any projected costs or rates provided by EMC in connection with the negotiations leading up to the execution of this Agreement or any
projections provided by EMC during the Term. Any differences between projected costs or rates provided by EMC and actual costs or rates will not limit or in any way affect the rates, terms, or conditions of this Agreement or any of the Parties’
rights and obligations hereunder. 
 16.12 Unique Agreement. This Agreement shall not establish any precedent for any other services, or be relied
upon by either Party for any purpose other than for the services and payments provided herein. 
 16.13 No Transfer of Rights. Except as explicitly
provided herein, nothing in this Agreement shall be construed to transfer any rights or obligations that either Party has under any other agreement to the other Party. 
 16.14 No Partnership. The Parties are independent contractors. Nothing in this Agreement shall ever be deemed to create or constitute a partnership, joint venture, or association between the Parties, or to
impose a trust or partnership duty, obligation, or liability on or with regard to either of the Parties. 
 16.15 Third Parties. The provisions of
this Agreement shall not impart rights enforceable by any person or entity not a Party or not a permitted successor or assignee of a Party bound by this Agreement. This Agreement shall not be construed to create any third party beneficiary rights of
any sort. 
 16.16 Waiver. No waiver of all or any part of this Agreement shall be valid unless it (a) is reduced to writing, (b) expressly
states that the Parties agree to such waiver, and (c) is signed by the Parties. Except as specifically set forth herein, neither Duke’s nor EMC’s failure to enforce any provision or provisions of this Agreement shall in any way be
construed as a waiver of any such provision or provisions as to any future violation thereof, nor prevent it from enforcing each and every provision of this Agreement at such time or at any time thereafter. The waiver by either Duke or EMC of any
right or remedy shall not constitute a waiver of its right to assert said right or remedy, at any time thereafter, or any other rights or remedies available to it at the time of or any time after such waiver. 
 16.17 Time of Essence. Time is of the essence for, in, and throughout this Agreement. 
  

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 16.18 Headings. The descriptive headings of the various Articles and Sections of this Agreement (or any
Schedules and Attachments attached hereto) have been inserted for convenience of reference only and in no way shall be deemed to modify or restrict any of the terms or provisions hereof. 
 16.19 Severability. Wherever possible, each provision of this Agreement (including any Schedules or Attachments attached hereto) shall be interpreted in a manner as to be effective and valid under applicable
Law, but if any provision contained herein shall be found or ruled to be invalid, illegal, or unenforceable in any respect and for any reason, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality,
or unenforceable without invalidating the remainder of the provision or any provision of this Agreement, and in such event, the Parties shall attempt to negotiate amendments to this Agreement that would permit each Party to realize the equivalent
value of the economic bargain contemplated by this Agreement absent such finding or ruling. 
 16.20 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. 
 16.21 No Public
Announcement. The Parties agree that no press release or public announcement concerning the transaction contemplated by this Agreement will be made unless mutually agreed to by the Parties in writing; provided, however, such mutual agreement
will not be required if: 
 (a) The disclosing Party determines that disclosure is reasonably necessary to (i) comply
with applicable Laws of a Governmental Authority having jurisdiction; or (ii) obtain financing for the transaction contemplated by this Agreement; or 
 (b) the disclosure is limited to the following information: (i) the names of the Parties; (ii) the type of service being provided; (iii) the Term; and (iv) the total load being served. 

The disclosing Party shall provide the other Party with written notice of such disclosure at least five (5) Business Days prior to such
disclosure. 
 16.22 Notices. Unless otherwise provided in this Agreement, any notice, consent, or other communication required to be made under this
Agreement shall be in writing and shall be delivered in person, by certified mail (postage prepaid, return receipt requested), or by nationally recognized overnight courier (charges prepaid), in each case properly addressed to such Party as shown
below. Any Party may from time to time change its address, designee or contact information for the purposes of notices, consents, or other communications to that Party by a similar notice specifying a new address, but no such change shall become
effective until it is actually received by the Party to be charged with its contents. All notices, consents, or other communications required or permitted under this Agreement that are addressed as provided in this Section 16.22 shall be deemed
to have been given upon delivery if delivered in person, or upon deposit if delivered by overnight courier or certified mail. 
  

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 Duke: 
 Duke Power Company LLC 
 526 South Church Street 
 Charlotte, N.C. 28202 
 Attn: VP – Business Development and Origination 
 Phone: (704) 382-3114 
 Fax: (704) 382-4014 
 With a copy to: 
 Duke Power Company LLC 
 526 South Church Street 
 Charlotte, N.C. 28202 
 Attn: General Counsel 
 EMC: 
 Rutherford Electric Membership Corporation 
 Post Office Box 1569 
 186 Hudlow Road 
 Forest City, NC 28043 
 Attn: Joseph Joplin, General Manager 
 Phone: (828) 245-1621 
 Fax: (828) 248-2319 
 The Parties may agree on alternative methods of giving operational and scheduling notices, consistent with the requirements of the applicable
Transmission Providers and/or generation scheduling providers. 
 16.23 No Dedication of the System. No undertaking by either Party to the other Party
under any provision of this Agreement shall constitute the dedication of the system, or any portion thereof, of either Party to the public or to the other Party, and it is understood and agreed that any such undertaking by either of the Parties
shall cease after the termination date of this Agreement. The sale by Duke to EMC of electric capacity and energy under this Agreement does not constitute a sale, lease, transfer, or conveyance of any kind of ownership interest in or to any of
Duke’s facilities of any kind. 
 16.24 Stranded Costs. 
 16.24.1 If a Party or any of its Affiliates becomes entitled to receive compensation associated with stranded generation, transmission, distribution or other assets or costs, the other Party shall have no claim or
entitlement to any such compensation. 
 16.24.2 Neither EMC nor Duke shall have the obligation or liability to the other Party for the
payment of any amounts authorized by statute or ordered or approved by a Governmental Authority and that are attributable to or in any way arising from stranded 
  


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 generation, transmission, distribution, or other assets or costs or any liability associated therewith, whether such
amounts are characterized as competitive transition charges, wire charges, or other costs or charges, provided that nothing herein shall limit the damages that may otherwise be recovered for an Event of Default. An order on stranded costs shall not
be deemed a Material Adverse Ruling. 
 16.25 Electric Peak Load and Energy Information to be provided by EMC. Prior to October 1, 2006, and each
October 1 thereafter during the Term, EMC shall provide Duke with forecast projections of (a) EMC’s Monthly electric peak load and electric energy requirements for the following Year and (b) EMC’s annual electric peak load
and electric energy requirements for the following ten (10) years, to the extent EMC has such information available, except that, after a Notice of Termination has been given, EMC shall not be obligated to provide such information for the
period after the termination date. To the extent such information is provided in a report to the RUS that is publicly available, EMC may satisfy this requirement by providing a copy of such report to Duke. 
 16.26 Demand and Energy Charge and Rate Information to be Provided by Duke. Prior to December 1, 2006, and each December 1 thereafter during the Term,
Duke shall provide EMC with forecast projections of (a) the annual electric capacity and energy rates under Sections 7.2 or Section 7.3 (as applicable) for the following year, (b) Monthly demand and electric energy charges under
Section 7.2 or Section 7.3 (as applicable) for the following year, and (c) annual demand and electric energy charges under Sections 7.2 or Section 7.3 (as applicable) for the lesser of the remainder of the Term or the following
ten (10) Years, except that, after a Notice of Termination has been given, Duke shall not be obligated to provide such information for the period after the termination date. 
 16.27 Further Assurances. If either Party determines in its reasonable discretion that any further instruments, assurances, or other things are necessary or desirable to carry out the terms of this Agreement,
the other Party shall execute and deliver all such instruments or assurances, and do all things reasonably necessary or desirable to carry out the terms of this Agreement. 
 16.28 Applicable Laws and Regulations. This Agreement is made subject to all existing and future applicable Laws and to all existing and future promulgated orders or other duly authorized actions of
Governmental Authorities having jurisdiction over the matters set forth in this Agreement. 
 16.29 Equitable Relief. Nothing in this Agreement shall
be construed to limit the injunctive or equitable powers of a court of competent jurisdiction. 
 16.30 PURPA Assistance. Duke shall provide
assistance to EMC, as EMC reasonably requests, to support EMC’s compliance with the generation efficiency and fuel diversity standards under PURPA. 
 16.31 SERC and NERC Data Reporting and Compliance Assistance. Duke shall report EMC’s actual load, forecasted load (as provided by EMC to Duke), and resource information to SERC and NERC and their successors, in a manner similar
to the manner in which Duke reports such information for other wholesale full or partial requirements customers with service as firm as Duke’s Native Load. In addition, Duke shall provide assistance and consultation to EMC, to the extent agreed
to by the Parties, to support EMC’s compliance with such organizations’ data reporting requirements. 
  

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 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized
officers and copies delivered to each Party. 
 RUTHERFORD ELECTRIC MEMBERSHIP CORPORATION 
  

			
	 By:
	 	  

	Name:	 	Joseph Joplin
	Title:	 	General Manager
	
	 DUKE POWER COMPANY LLC
 d/b/a Duke Energy
Carolinas, LLC

		
	By:	 	  

	Name:	 	Ellen T. Ruff
	Title:	 	President








 Schedule 1 
 Annual Production Capacity and Energy Rates 
 Schedule 1 Methodology: 
 This formula sets forth the method that Duke will use to determine its annual Demand Rates, Fuel Rates, and Variable O&M Rates (collectively, “Rates”). The
Rates will be annual formula rate calculations. The Rates shall initially be estimated for the period January 1, 2007 - December 31, 2007, and shall be estimated continuing thereafter for successive twelve month periods (e.g., January 1,
2008 - December 31, 2008, etc.). Beginning July 1, 2008, and each July 1 thereafter, the Rates will be trued-up based on actual costs and loads for the most recent calendar year, using the formula rates set forth below. The calculations
will be based on Duke’s FERC Form 1 data and Duke’s company records. The true-up will include interest on any refunds or surcharges calculated in accordance with the methodology set forth in 18 C.F.R. § 35.19a or its successor. The
formulas for the Rates were designed to include all costs incurred by Duke to own, operate and maintain Duke’s Generation System. The formulas for the Rates may only be amended by the mutual agreement of the Parties or pursuant to
Section 12.3 of the Agreement. Disallowance or any other treatment of any such costs by the NCUC or any other Governmental Authority other than FERC will not have any effect on the inclusion of such costs in the formulas for the Rates as set
forth below. 
  

	I.	Definitions 

 Capitalized terms not otherwise defined in the Agreement and
as used in this formula have the following definitions: 
  

	 	A.	Allocation Factors 

  

	 	1.	Production Wages and Salaries Allocation Factor shall equal the ratio of Duke’s production-related direct wages and salaries to Duke’s total direct wages and
salaries excluding administrative and general wages and salaries. 

  

	 	2.	Production Plant Allocation Factor shall equal the ratio of the sum of Duke’s investments in Production Plant plus Production Related General Plant plus Production
Related Intangible Plant to investment in Total Plant in Service. 

  

	 	B.	Terms 

 Accumulated Deferred Income Taxes shall
equal the net of Duke’s electric deferred tax balances as recorded in FERC Account Nos. 281-283 and Duke’s electric deferred tax balance as recorded in FERC Account No. 190. 







 Administrative and General Expense shall equal Duke’s expenses as recorded in FERC Account
Nos. 920-935 excluding FERC Account Nos. 924, 928 and 930.1, and less EPRI dues as recorded in FERC Account No. 930.2. 
 Contra
AFUDC shall equal the reduction in amount of AFUDC recorded in FERC Account No. 107 due to recovery of construction period financing costs from customers resulting from inclusion of construction work in progress in rate base in any of Duke
Power’s retail or wholesale rate jurisdictions. 
 Demand Rate means the Demand Rate calculated in Part II below. 
 Depreciation Expense for Production Plant shall equal Duke’s production expense as recorded in FERC Account No. 403 plus an adjustment
to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to production plant construction work in progress included in rate base. 
 Duke’s Average Peak Hour Load for a year, with respect to the period January 1, 2007, through December 31, 2010, shall equal the
average of the twenty highest hourly (integrated sixty minute) Duke Schedule 1 Demands during July and August of the year; and with respect to the period beginning January 1, 2011, and continuing through the termination of the Agreement,
shall equal the average of the twenty highest hourly (integrated sixty minute) Duke Schedule 1 Demands during the Annual Planning Period of the year. 
 Duke Schedule 1 Demands means Duke’s Native Load demands: (i) compensated for losses to the point at which power is available for transmission, (ii) excluding (a) non-requirements wholesale
sales, as listed in Duke’s FERC Form 1, and (b) wholesale sales with a duration of one year or less, (iii) served by Duke’s Generation System the cost of which is included in Schedule 1. 
 FAS 109 Regulatory Assets and Liabilities shall equal the net of Duke’s FAS 109 balance as recorded in FERC Account No. 182.3 and any
Duke FAS 109 balance as recorded in FERC Account No. 254. 
 FAS 106 Regulatory Assets and Liabilities shall equal the net of
Duke’s FAS 106 balance as recorded in FERC Account No. 182.3 and any Duke FAS 106 balance as recorded in FERC Account No. 254. 
  

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 General Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet
Account No. 101, FERC Electric Plant Account Nos. 389-399, and amounts in FERC Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 389-399, plus an adjustment to add Contra AFUDC related to general
plant construction work in progress included in rate base. 
 General Plant Depreciation Expense shall equal Duke’s general plant
expenses as recorded in FERC Account No. 403 plus an adjustment to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to general plant construction work in progress included in rate base.

 General Plant Depreciation Reserve shall equal Duke’s general plant reserve balance as recorded in FERC Account No. 108
plus an adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to production plant construction work in progress included in rate base. 
 General Tax Expense shall equal Duke’s expenses as recorded in FERC Account No. 408.1. 
 Intangible Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet Account No.101, FERC Electric Plant Account Nos.
301-303, and amounts in FERC Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 301-303, plus an adjustment to add Contra AFUDC related to intangible plant construction work in progress included in rate
base. 
 Intangible Plant Amortization Expense shall equal Duke’s intangible plant expenses as recorded in FERC Account
No. 404 plus an adjustment to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to intangible plant construction work in progress included in rate base. 
 Intangible Plant Amortization Reserve shall equal Duke’s intangible plant reserve balance as recorded in FERC Account No. 111 plus an
adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to intangible plant construction work in progress in rate base. 
  

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 Net Asset Retirement Cost shall equal Duke’s asset retirement costs recorded in FERC Account
No. 101, less the associated accumulated depreciation included in FERC Account No. 108. 
 Other Amortization shall equal
Duke’s amortization expense recorded in FERC Account Nos. 406 and 407 that is related to production plant. 
 Other Regulatory
Assets/Liabilities shall equal the net of Duke’s regulatory assets and liabilities in FERC Account Nos. 182, 228 and 254, excluding FAS 109 Regulatory Assets and FAS 106 Regulatory Assets, that are production related. 
 Payroll Taxes shall equal those payroll tax expenses as recorded in Duke Power’s FERC Account No. 408.1. 
 Plant Held for Future Use shall equal Duke’s balance in FERC Account No. 105. 
 Prepayments shall equal Duke’s prepayment balance as recorded in FERC Account No. 165. 
 Property Insurance shall equal Duke’s expenses as recorded in FERC Account No. 924. 
 Production Related Amortization of Investment Tax Credits shall equal Duke’s credits as recorded in FERC Account No. 411.4 multiplied by
the Production Plant Allocation Factor. 
 Production Depreciation Reserve shall equal Duke’s production reserve balance as
recorded in FERC Account No. 108 plus an adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to production plant construction work in progress included in rate
base. 
 Production Operation and Maintenance (O&M) Expense shall equal Duke’s expenses as recorded in FERC Account Nos.
500-557. 
 Production Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet Account No. 101, FERC
Electric Plant Account Nos. 310-347 and Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 310-347, plus an adjustment to add Contra AFUDC related to production plant construction work in progress in
included in rate base. 
  

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 Production Plant Materials and Supplies shall equal Duke’s balance as assigned to production
as recorded in FERC Account No. 154. 
 Revenue Tax Rate shall equal 1.0 minus the applicable revenue or gross receipts tax
rate(s) to which Duke is subject for the revenues or gross receipts that Duke receives under this Agreement 
 Tax Deduction for
Manufacturing Activities shall equal Duke’s annual amount of tax deduction under Section 102 of the American Jobs Creation Act of 2004. 
 Total Plant in Service shall equal Duke’s total gross plant balance as recorded in FERC Balance Sheet Account No. 101, Electric Plant Account Nos. 301-399, and amounts in FERC Balance Sheet Account
Nos. 102 and 106, plus an adjustment to add Contra AFUDC related to construction work in progress included in rate base. 
 Unamortized
Loss on Reacquired Debt shall equal Duke’s expenses as recorded in FERC Account No. 189. 
 Unamortized Gain on Reacquired
Debt shall equal Duke’s amounts included in FERC Account No. 257. 
 Variable Non-Fuel Production Operation and Maintenance
Expense shall equal Duke’s expenses as recorded in FERC Account Nos. 510, 512, 513, 528, 530, 531, and 544. 
  

	II.	Demand Rate 

 The Demand Rate shall be the Production
Capacity Revenue Requirement as determined in Part III below, divided by Duke’s Average Peak Hour Load, and further divided by the Revenue Tax Rate. The Monthly Demand Rate shall be equal to the Demand Rate divided by twelve (12). 

 

	III.	Production Capacity Revenue Requirement 

 The Production
Capacity Revenue Requirement shall equal the sum of Duke’s (A) Return and Associated Income Taxes, (B) Production Depreciation Expense, (C) Decommissioning Expense, (D) Production Related General Taxes, (E) Fixed
Production Operation and Maintenance Expense, (F) Purchased Power Capacity Expenses, (G) Production Related Administrative and General Expense, (H) Production Related Other Amortization Expense and (I) Capacity Credit for Revenue
from Non-Associated Utility Sales. 

 5 









	A.	Return and Associated Income Taxes shall equal the product of the Production Investment Base and the Cost of Capital Rate. 

  

	 	1.	Production Investment Base 

  

	 	    	The Production Investment Base shall equal the average of the beginning and end-of-year balances of (a) Production Plant, plus (b) Production Related General and
Intangible Plant, plus (c) Production Plant Held for Future Use, less (d) Production Related Depreciation Reserve, less (e) Production Related Net Asset Retirement Costs, plus (f) Nuclear Fuel Inventory, plus (g) Fossil Fuel
Inventory, less (h) Production Related Accumulated Deferred Income Taxes, plus (i) Production Related Loss on Reacquired Debt, (j) less Production Related Gain on Reacquired Debt, plus (k) FAS 106 and FAS 109 Regulatory
Assets/Liabilities, plus (l) Other Regulatory Assets/Liabilities, plus (m) Production Prepayments, plus (n) Production Materials and Supplies, plus (o) Production Related Cash Working Capital. 

  

	 	(a)	Production Plant shall equal Production Plant as defined above. 

  

	 	(b)	Production Related General and Intangible Plant shall equal the sum of General Plant plus Intangible Plant multiplied by the Production Wages and Salaries Allocation Factor.


  

	 	(c)	Production Plant Held for Future Use shall equal Plant Held for Future Use multiplied by the Production Plant Allocation Factor. 

  

	 	(d)	Production Related Depreciation Reserve shall equal Production Depreciation Reserve plus Production Related General and Intangible Plant Depreciation Reserve; where
Production Related General and Intangible Plant Depreciation Reserve shall equal the sum of General Plant Depreciation Reserve plus Intangible Plant Amortization Reserve, multiplied by the Production Wages and Salaries Allocation Factor.


  

	 	(e)	Production Related Net Asset Retirement Costs shall equal Duke’s asset retirement cost balance as recorded in FERC Account No. 101 for Production Plant less the
associated accumulated depreciation balance as recorded in FERC Account No. 108. 

  

 6 









	 	(f)	Nuclear Fuel Inventory shall equal Duke’s balance of investment in nuclear fuel as recorded in FERC Account Nos. 120.1 – 120.6. 

  

	 	(g)	Fossil Fuel Inventory shall equal Duke’s balance of investment in fossil fuel as recorded in FERC Account No. 151. 

  

	 	(h)	Production Related Accumulated Deferred Income Taxes shall equal Total Accumulated Deferred Income Taxes multiplied by the Production Plant Allocation Factor.


  

	 	(i)	Production Related Loss on Reacquired Debt shall equal Unamortized Loss on Reacquired Debt multiplied by the Production Plant Allocation Factor. 

  

	 	(j)	Production Related Gain on Reacquired Debt shall equal Unamortized Gain on Reacquired Debt multiplied by the Production Plant Allocation Factor. 

  

	 	(k)	FAS 106 and FAS 109 Regulatory Assets/Liabilities shall equal Duke’s balance of FAS 106 related costs as recorded in FERC Account Nos. 182.3 and 254 multiplied by the
Production Wages and Salaries Allocation Factor, plus Duke’s balance of FAS 109 related costs as recorded in FERC Account Nos. 182.3 and 254 multiplied by the Production Plant Allocation Factor. 

  

	 	(l)	Other Regulatory Assets/Liabilities shall equal Duke’s balance of Other Regulatory Assets/Liabilities as appropriate; provided, that in order to include any amounts in
this item, Duke shall make a filing with FERC under Section 205 of the Federal Power Act. 

  

	 	(m)	Production Prepayments shall equal Duke’s Prepayments in FERC Account 165 multiplied by the Production Wages and Salaries Allocation Factor. 

  

	 	(n)	Production Materials and Supplies shall equal Production Plant Materials and Supplies as defined above. 

  

	 	(o)	Production Related Cash Working Capital shall be a 12.5% allowance (45 days/360 days) of Fixed Production Operation and Maintenance Expense, Variable Production Non-Fuel
Operation and Maintenance Expenses and Production Related Administrative and General Expense. 

  

 7 









	2.	Cost of Capital Rate 

 The Cost of Capital Rate will equal
(a) Duke’s Weighted Cost of Capital, plus (b) Federal Income Tax plus (c) State Income Tax. 
 (a) The Weighted Cost of
Capital shall be calculated based upon a proxy capital structure of 45% long term debt and 55% common equity and shall equal the sum of: 
  

	 	(i)	the long term debt component, which shall equal the product of 45% and Duke’s long term debt expenses recorded in FERC Account Nos. 427, 428, 428.1, 429, 429.1, and 430
divided by Duke’s long-term debt balance as recorded in FERC Account Nos. 221 through 227, and 

  

	 	(ii)	the return on equity component, which shall equal the product of 55% and Duke’s return on equity (ROE) of 11.0%. 

  

	 	(b)	Federal Income Tax shall equal 

 [A+(B+C+D)/E] x (FT) / (1-FT) 
  

	 	 	where FT is the Federal Income Tax Rate and A is the return on equity component, as determined in Sections III.A.2.(a)(ii) above, B is Production Related Amortization of Investment
Tax Credits, , C is Duke’s annual amount of Tax Deduction for Manufacturing Activities, D is the Equity AFUDC component of Production Depreciation Expense as defined in Section III.B below, and E is Production Investment Base as Determined
in III.A.1 above. 

  

	 	(c)	State Income Tax shall equal 

  

	 	 	[A+(B+C+ D)/E + Federal Income Tax]x(ST)/ (l -ST) 

  

	 	 	where ST is the State Income Tax Rate. A is the return on equity component determined in Sections lll.A.2.(a)(ii) above, B is the Amortization of Investment Tax Credits, C is
Duke’s 

  

 8 








 annual amount of Tax Deduction for Manufacturing Activities, D is the equity AFUDC component of
Production Depreciation Expense as defined in Section III.B. below, E is the Production Investment Base as determined in III.A.l above and Federal Income Tax is the rate determined in Section III.A.2.(b) above. 
  

	 	B.	Production Depreciation Expense shall equal the sum of Depreciation Expense for Production Plant, plus an allocation of General and Intangible Plant Deprecation Expense
calculated by multiplying the sum of General Plant Depreciation Expense and Intangible Plant Amortization Expense by the Production Wages and Salaries Allocation Factor, less Decommissioning Expense as defined in III.C. below.


  

	 	C.	Decommissioning Expense shall equal $48,304,000 per year. 

  

	 	D.	Production Related General Taxes shall equal the sum of General Tax Expense less revenue related taxes and Payroll Taxes, multiplied by the Production Plant Allocation
Factor, and Payroll Taxes multiplied by the Production Wages and Salaries Allocation Factor. 

  

	 	E.	Fixed Production Operation and Maintenance Expense shall equal Duke’s expenses as recorded in FERC Account Nos. 500, 502, 505-507, 511, 514, 517, 519, 520, 523-525, 529,
532, 535-543, 545, 546, 548-554, 556, and 557. 

  

	 	F.	Purchased Power Expenses shall equal Duke’s expenses for purchased power recorded in FERC Account No. 555 less purchased power fuel costs included in the Fuel Rate
determined in Section IV below. 

  

	 	G.	Production Related Administrative and General Expenses shall equal the sum of (1) Administrative and General Expense multiplied by the Production Wages and Salaries
Allocation Factor, (2) Property Insurance multiplied by the Production Plant Allocation Factor, (3) Expenses included in FERC Account 928 related to FERC Assessments multiplied by the Production Plant Allocation Factor, and (4) any
other Production related expenses or assessments in FERC Account Nos. 928 or 930.1. 

  

	 	H.	Production Related Other Amortization Expense shall equal Duke’s amortization expense recorded in FERC Account Nos. 406 and 407 either directly assigned to production or
allocated to production using the Production Plant Allocation Factor or the Production Wages and Salaries Allocation Factor. 

  

 9 









	 	I.	Credit for Revenue from Non-Associated Utility Sales shall equal Duke’s revenues from inter-system sales from Duke’s Generation System recorded in FERC Account 447
to the extent such sales are not included in the determination of Duke’s Average Peak Hour Load, less fuel recovered from such sales as determined in the Fuel Rate below, multiplied by 2/3. 

  

	 	IV.	Fuel Rate 

 The Fuel Rate shall equal F/S, and further
divided by the Revenue Tax Rate, where: 
 F is the expense of fossil and nuclear fuel and purchased economic power, as defined in 18 C.F.R.
§ 35.14(a)(2) (2005), for the calendar year period; provided that for purposes of this calculation described in 18 C.F.R. § 35.14(a)(2) (2005) the cost of fossil fuel shall include, in addition to those items set forth in 18
C.F.R. § 35.14(a)(6), expenses recorded in Account No. 509 for the calendar year period. 
 S is all kWh sold (compensated for
losses to the point at which power is available for transmission ), excluding inter-system sales, for the calendar year period. 
  

	 	V.	Variable O&M Rate 

 The Variable O&M rate shall
equal Variable Non-Fuel Production Operation and Maintenance Expense divided by S as determined in Section IV above, and further divided by the Revenue Tax Rate. 
  

 10 








 Attachment 3-1 
 Example showing the calculation of the Excess Annual Capacity Charges in the 
 Duke-Blue Ridge
Agreement, Duke-Piedmont Agreement 
 and Duke-Rutherford Agreement 
 The purpose of this attachment is to provide an example showing the calculation of the Excess Annual Capacity Charges provided in Section 3.5.2.3.5
of the above-identified agreements. Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R, respectively, and collectively as the EMC Group. 
 Assumptions: 
 Hour of maximum integrated
sixty minute Duke Schedule 1 Demands during July and August 2007: 4:00-5:00 pm, July 14, 2007. 
  

							
	 	  	 BR
 (kW)
	  	 P
 (kW)
	  	 R
 (kW)

	 EMC Coincident Peak Demand (7-14-07 4-5 pm)
	  	225,000	  	150,000	  	425,000
	 EMC Base Obligation (7-14-07 4-5pm)
	  	125,000	  	175,000	  	300,000

 EMC Group Coincident Peak Demand (7-14-07, 4-5 pm): 800,000 kW 
 EMC Group Base Obligation (7-14-07, 4-5 pm): 600,000 kW 
 Annual Capacity Quantity = 148,000 kW 
 Step 1 
 Calculate EMC Group Excess Annual Capacity Quantity per Section 3.5.2.3.5. 
  

					
	 EMC Group Coincident Peak Demand (7-14-07 4-5 pm)
	  	800,000 kW	  	
	 minus EMC Group Base Obligation (7-14-07 4-5 pm)
	  	- 600,000 kW	  	
	 minus Annual Capacity Quantity
	  	- 148,000 kW	  	
	 EMC Group Excess Annual Capacity Quantity
	  	52,000 kW	  	








 Step 2 
 Calculate EMC Excess Annual Capacity Quantity per Section 3.5.2.3.5.1 
  

									
	 	 	 A
 EMC Coincident Peak
 Demand (7-14-07 4-5pm)
 (kW)
	 	 B
 minus EMC Base Obligation
 (7-14-07 4-5 pm)
 (kW)
	 	 C
 minus EMC Annual
 Capacity Quantity
 (kW)
	 	 D
 EMC Excess Annual
Capacity Quantity1
 (kW)

	 BR
	 	225,000	 	125,000	 	42,000	 	58,000
	 P
	 	150,000	 	175,000	 	23,000	 	0
	 R
	 	425,000	 	300,000	 	83,000	 	42,000

 Step 3 
 Calculate EMC Group Combined Excess Annual Capacity Quantity per Section 3.5.2.3.5.2. 
  

					
	 BR Excess Annual Capacity Quantity
	  	58,000 kW	  	
	 P Excess Annual Capacity Quantity
	  	0 kW	  	
	 R Excess Annual Capacity Quantity
	  	42,000 kW	  	
	 EMC Group Combined Excess Annual Capacity Quantity
	  	100,000 kW	  	



	1	Cannot be less than zero. 

  

 2 








 Step 4 
 Calculate Excess Annual Amount per Section 3.5.2.3.5. 
  

									
	 	 	 A
 EMC Excess Annual
Capacity Quantity
 (kW)
	 	 B
 EMC Group Combined
Excess Annual Capacity
Quantity (kW)
	 	 C
 EMC Group Excess Capacity
Quantity
 (kW)
	 	 D
 EMC Excess Annual
 Amount
 ( ( A / B) * C)
 (kW)

	 BR
	 	58,000	 	100,000	 	52,000	 	30,160
	 P
	 	0	 	100,000	 	52,000	 	0
	 R
	 	42,000	 	100,000	 	52,000	 	21,840

 Step 5 
 Calculate Excess Annual Capacity Charge per Section 3.5.2.3.5. 
  

								
	 	  	 A
 EMC Excess Annual
 Amount
 (kW)
	  	 B
 Annual Capacity Price
 ($/kW-year)
	  	 C
 Excess Annual Capacity
 Charge

	 BR
	  	30,160	  	45.60	  	$	1,375,296
	 P
	  	0	  	45.60	  	$	0
	 R
	  	21,840	  	45.60	  	$	995,904

  

 3 








 Attachment 4-1 
 Rutherford 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined in Section 5.1.1) 
  

																																																	
	 	  	Weekday
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Sep-06
	  	87	  	77	  	70	  	68	  	72	  	93	  	126	  	124	  	114	  	116	  	124	  	135	  	144	  	154	  	160	  	168	  	182	  	191	  	189	  	184	  	190	  	172	  	140	  	108
	 Oct-06
	  	72	  	65	  	63	  	65	  	78	  	116	  	166	  	162	  	137	  	124	  	115	  	111	  	107	  	108	  	108	  	113	  	127	  	142	  	153	  	171	  	171	  	154	  	124	  	92
	 Nov-06
	  	106	  	103	  	103	  	108	  	122	  	157	  	197	  	187	  	165	  	148	  	131	  	119	  	107	  	102	  	97	  	101	  	119	  	154	  	178	  	179	  	177	  	166	  	144	  	122
	 Dec-06
	  	131	  	127	  	128	  	133	  	146	  	177	  	213	  	212	  	196	  	178	  	158	  	142	  	128	  	120	  	114	  	117	  	136	  	176	  	199	  	201	  	202	  	194	  	174	  	151
	 Jan-07
	  	143	  	137	  	137	  	140	  	147	  	160	  	175	  	197	  	222	  	217	  	191	  	165	  	140	  	120	  	109	  	110	  	131	  	170	  	191	  	189	  	186	  	179	  	166	  	148
	 Feb-07
	  	128	  	127	  	129	  	133	  	146	  	175	  	206	  	199	  	177	  	155	  	137	  	123	  	112	  	105	  	98	  	101	  	117	  	143	  	174	  	183	  	182	  	172	  	151	  	131
	 Mar-07
	  	85	  	83	  	85	  	89	  	101	  	132	  	166	  	154	  	129	  	115	  	105	  	97	  	90	  	86	  	82	  	83	  	94	  	108	  	126	  	144	  	144	  	136	  	116	  	96
	 Apr-07
	  	62	  	57	  	56	  	58	  	67	  	93	  	124	  	121	  	104	  	96	  	91	  	88	  	85	  	84	  	82	  	84	  	94	  	103	  	108	  	111	  	126	  	124	  	102	  	77
	 May-07
	  	58	  	48	  	43	  	42	  	48	  	71	  	101	  	103	  	90	  	89	  	94	  	100	  	104	  	110	  	113	  	121	  	133	  	144	  	144	  	138	  	142	  	144	  	115	  	83
	 Jun-07
	  	80	  	69	  	62	  	59	  	61	  	73	  	86	  	93	  	96	  	105	  	117	  	130	  	139	  	146	  	150	  	155	  	163	  	168	  	168	  	160	  	152	  	154	  	133	  	104
	 Jul-07
	  	94	  	82	  	75	  	70	  	71	  	81	  	91	  	99	  	106	  	120	  	138	  	157	  	170	  	175	  	181	  	189	  	197	  	207	  	214	  	206	  	191	  	188	  	161	  	130
	 Aug-07
	  	96	  	84	  	77	  	73	  	74	  	87	  	108	  	106	  	103	  	112	  	129	  	146	  	161	  	175	  	182	  	189	  	202	  	211	  	213	  	199	  	194	  	183	  	151	  	119
	 Sep-07
	  	69	  	61	  	56	  	54	  	57	  	74	  	100	  	98	  	90	  	93	  	99	  	108	  	115	  	122	  	127	  	134	  	144	  	151	  	151	  	147	  	151	  	137	  	111	  	86
	 Oct-07
	  	57	  	51	  	50	  	51	  	62	  	92	  	132	  	129	  	109	  	98	  	91	  	88	  	85	  	87	  	86	  	90	  	101	  	113	  	122	  	136	  	137	  	122	  	98	  	73
	 Nov-07
	  	84	  	82	  	83	  	86	  	97	  	125	  	157	  	148	  	131	  	117	  	104	  	94	  	85	  	81	  	77	  	80	  	94	  	122	  	141	  	142	  	140	  	133	  	115	  	97
	 Dec-07
	  	104	  	101	  	102	  	106	  	116	  	140	  	169	  	168	  	155	  	141	  	126	  	113	  	102	  	95	  	90	  	93	  	108	  	140	  	158	  	160	  	161	  	154	  	138	  	120
	 Jan-08
	  	146	  	140	  	140	  	143	  	150	  	163	  	179	  	201	  	225	  	222	  	195	  	168	  	144	  	122	  	112	  	112	  	133	  	173	  	195	  	193	  	190	  	183	  	170	  	151
	 Feb-08
	  	130	  	129	  	131	  	136	  	148	  	179	  	210	  	204	  	181	  	158	  	140	  	126	  	114	  	108	  	101	  	104	  	119	  	146	  	178	  	186	  	186	  	176	  	154	  	134
	 Mar-08
	  	87	  	85	  	87	  	90	  	103	  	135	  	169	  	157	  	132	  	118	  	107	  	99	  	91	  	87	  	83	  	85	  	96	  	111	  	129	  	147	  	147	  	138	  	118	  	98
	 Apr-08
	  	63	  	58	  	57	  	59	  	69	  	94	  	126	  	123	  	106	  	98	  	93	  	90	  	87	  	86	  	83	  	86	  	95	  	105	  	110	  	113	  	128	  	126	  	105	  	79
	 May-08
	  	59	  	48	  	44	  	43	  	48	  	72	  	104	  	105	  	92	  	91	  	95	  	101	  	106	  	112	  	115	  	123	  	136	  	147	  	147	  	141	  	144	  	147	  	118	  	84
	 Jun-08
	  	82	  	70	  	63	  	60	  	62	  	75	  	87	  	94	  	98	  	107	  	119	  	133	  	141	  	148	  	153	  	158	  	166	  	172	  	172	  	163	  	155	  	157	  	135	  	106
	 Jul-08
	  	95	  	83	  	76	  	72	  	73	  	83	  	94	  	101	  	108	  	122	  	141	  	160	  	173	  	179	  	184	  	193	  	201	  	211	  	218	  	211	  	195	  	192	  	165	  	133
	 Aug-08
	  	98	  	86	  	79	  	74	  	75	  	88	  	110	  	108	  	105	  	115	  	131	  	149	  	165	  	178	  	186	  	193	  	206	  	215	  	218	  	203	  	198	  	186	  	154	  	122
	 Sep-08
	  	71	  	62	  	57	  	55	  	59	  	76	  	102	  	101	  	93	  	94	  	101	  	110	  	116	  	125	  	129	  	137	  	147	  	154	  	154	  	150	  	154	  	140	  	113	  	87
	 Oct-08
	  	59	  	52	  	51	  	53	  	63	  	94	  	134	  	132	  	112	  	101	  	93	  	90	  	87	  	88	  	87	  	91	  	103	  	115	  	125	  	139	  	139	  	126	  	101	  	75
	 Nov-08
	  	86	  	83	  	84	  	87	  	99	  	127	  	160	  	151	  	134	  	119	  	106	  	96	  	87	  	83	  	79	  	82	  	96	  	125	  	144	  	145	  	144	  	135	  	117	  	99
	 Dec-08
	  	106	  	103	  	104	  	108	  	119	  	144	  	172	  	172	  	158	  	144	  	128	  	115	  	104	  	98	  	93	  	95	  	111	  	143	  	161	  	163	  	164	  	157	  	141	  	122

 Note: Hour 1 refers to 12:00 a.m. - 12:59:59 a.m. Eastern Time, Hour 2 refers to 1:00 a.m. - 1:59:59 a.m. Eastern
Time, etc. 
 Attachment 4-1 to Duke-Rutherford Agreement 







 Rutherford 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	Weekday
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Jan-09
	  	148	  	143	  	143	  	145	  	153	  	166	  	182	  	206	  	230	  	225	  	199	  	171	  	147	  	125	  	114	  	114	  	137	  	176	  	199	  	197	  	193	  	186	  	173	  	154
	 Feb-09
	  	133	  	132	  	133	  	139	  	151	  	182	  	214	  	207	  	184	  	161	  	142	  	128	  	116	  	110	  	102	  	106	  	122	  	149	  	181	  	190	  	190	  	179	  	158	  	137
	 Mar-09
	  	88	  	87	  	88	  	93	  	105	  	137	  	172	  	160	  	135	  	120	  	108	  	101	  	93	  	90	  	85	  	87	  	98	  	113	  	131	  	149	  	151	  	141	  	120	  	100
	 Apr-09
	  	65	  	59	  	58	  	60	  	69	  	97	  	129	  	126	  	108	  	100	  	95	  	92	  	88	  	87	  	86	  	88	  	98	  	108	  	112	  	115	  	130	  	129	  	106	  	80
	 May-09
	  	60	  	49	  	44	  	44	  	49	  	73	  	105	  	107	  	94	  	93	  	98	  	104	  	108	  	115	  	118	  	126	  	139	  	149	  	150	  	144	  	147	  	150	  	120	  	86
	 Jun-09
	  	83	  	72	  	65	  	62	  	63	  	76	  	89	  	97	  	100	  	109	  	122	  	135	  	144	  	151	  	156	  	161	  	169	  	176	  	176	  	166	  	158	  	160	  	138	  	108
	 Jul-09
	  	97	  	85	  	78	  	73	  	74	  	85	  	95	  	103	  	111	  	125	  	144	  	164	  	177	  	182	  	188	  	197	  	205	  	215	  	222	  	215	  	199	  	196	  	168	  	135
	 Aug-09
	  	100	  	87	  	80	  	76	  	76	  	90	  	112	  	110	  	107	  	117	  	133	  	152	  	168	  	182	  	190	  	197	  	210	  	218	  	222	  	207	  	202	  	190	  	156	  	124
	 Sep-09
	  	73	  	63	  	59	  	56	  	59	  	77	  	104	  	102	  	94	  	96	  	103	  	112	  	119	  	127	  	132	  	140	  	151	  	158	  	157	  	153	  	158	  	142	  	115	  	89
	 Oct-09
	  	59	  	53	  	51	  	54	  	64	  	96	  	137	  	134	  	113	  	102	  	95	  	91	  	88	  	90	  	89	  	94	  	105	  	118	  	127	  	141	  	142	  	128	  	102	  	76
	 Nov-09
	  	87	  	85	  	86	  	90	  	101	  	129	  	163	  	154	  	137	  	122	  	108	  	98	  	89	  	84	  	80	  	83	  	98	  	127	  	147	  	148	  	146	  	138	  	119	  	101
	 Dec-09
	  	108	  	105	  	106	  	110	  	121	  	147	  	176	  	176	  	161	  	147	  	131	  	118	  	106	  	99	  	94	  	97	  	112	  	146	  	165	  	166	  	167	  	160	  	144	  	125
	 Jan-10
	  	151	  	146	  	146	  	148	  	156	  	170	  	186	  	210	  	235	  	230	  	203	  	174	  	149	  	128	  	116	  	116	  	139	  	180	  	203	  	200	  	197	  	190	  	176	  	158
	 Feb-10
	  	136	  	135	  	137	  	142	  	154	  	186	  	218	  	211	  	188	  	165	  	145	  	131	  	119	  	112	  	105	  	108	  	125	  	151	  	185	  	193	  	193	  	183	  	161	  	140
	 Mar-10
	  	90	  	88	  	90	  	94	  	108	  	140	  	176	  	163	  	137	  	122	  	111	  	103	  	95	  	91	  	87	  	89	  	100	  	115	  	134	  	152	  	153	  	144	  	123	  	102
	 Apr-10
	  	66	  	60	  	59	  	62	  	71	  	98	  	132	  	129	  	111	  	102	  	97	  	94	  	90	  	89	  	87	  	90	  	99	  	109	  	114	  	118	  	133	  	132	  	108	  	82
	 May-10
	  	61	  	51	  	45	  	44	  	51	  	75	  	108	  	109	  	96	  	94	  	99	  	105	  	110	  	117	  	120	  	128	  	141	  	152	  	153	  	147	  	151	  	153	  	123	  	87
	 Jun-10
	  	85	  	73	  	66	  	62	  	65	  	78	  	90	  	98	  	102	  	111	  	125	  	138	  	147	  	154	  	159	  	165	  	172	  	179	  	179	  	170	  	161	  	163	  	140	  	110
	 Jul-10
	  	99	  	87	  	80	  	75	  	76	  	87	  	97	  	105	  	113	  	127	  	147	  	167	  	180	  	186	  	192	  	200	  	209	  	219	  	227	  	219	  	203	  	200	  	172	  	138
	 Aug-10
	  	102	  	90	  	82	  	77	  	78	  	92	  	114	  	112	  	109	  	119	  	137	  	155	  	171	  	186	  	193	  	200	  	215	  	223	  	226	  	211	  	206	  	194	  	159	  	126
	 Sep-10
	  	74	  	65	  	59	  	58	  	61	  	78	  	106	  	105	  	96	  	98	  	105	  	114	  	121	  	129	  	135	  	142	  	154	  	161	  	160	  	156	  	161	  	145	  	118	  	91
	 Oct-10
	  	61	  	55	  	53	  	55	  	66	  	98	  	140	  	137	  	115	  	105	  	97	  	94	  	90	  	91	  	90	  	95	  	107	  	120	  	129	  	144	  	144	  	130	  	105	  	78
	 Nov-10
	  	89	  	87	  	87	  	91	  	103	  	133	  	166	  	158	  	140	  	125	  	110	  	100	  	90	  	86	  	82	  	85	  	100	  	129	  	151	  	151	  	149	  	140	  	122	  	103
	 Dec-10
	  	111	  	107	  	108	  	112	  	123	  	149	  	179	  	179	  	165	  	150	  	133	  	120	  	108	  	101	  	96	  	99	  	115	  	149	  	168	  	169	  	170	  	163	  	147	  	127

 Attachment 4-1 to Duke-Rutherford Agreement 
  

 2 








 Rutherford 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	  	  	Weekend
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Sep-06
	  	81	  	68	  	61	  	57	  	57	  	61	  	68	  	81	  	108	  	123	  	129	  	137	  	149	  	158	  	163	  	168	  	174	  	177	  	171	  	165	  	169	  	153	  	127	  	101
	 Oct-06
	  	69	  	58	  	54	  	54	  	58	  	69	  	86	  	111	  	143	  	146	  	130	  	120	  	117	  	113	  	109	  	109	  	116	  	123	  	128	  	147	  	148	  	134	  	111	  	87
	 Nov-06
	  	96	  	92	  	91	  	92	  	98	  	109	  	126	  	152	  	171	  	161	  	138	  	124	  	117	  	109	  	101	  	100	  	109	  	134	  	151	  	151	  	149	  	141	  	124	  	107
	 Dec-06
	  	138	  	132	  	131	  	133	  	139	  	150	  	166	  	190	  	214	  	204	  	176	  	153	  	140	  	127	  	117	  	116	  	128	  	159	  	178	  	181	  	184	  	180	  	166	  	148
	 Jan-07
	  	133	  	126	  	124	  	126	  	130	  	139	  	152	  	175	  	205	  	197	  	162	  	139	  	128	  	111	  	98	  	94	  	108	  	145	  	163	  	160	  	154	  	144	  	135	  	127
	 Feb-07
	  	122	  	120	  	122	  	127	  	134	  	144	  	159	  	183	  	200	  	182	  	150	  	129	  	119	  	106	  	91	  	84	  	89	  	103	  	134	  	154	  	161	  	155	  	140	  	126
	 Mar-07
	  	78	  	74	  	74	  	77	  	83	  	93	  	106	  	125	  	137	  	130	  	114	  	102	  	96	  	88	  	80	  	77	  	82	  	89	  	103	  	119	  	121	  	114	  	100	  	85
	 Apr-07
	  	58	  	50	  	47	  	47	  	50	  	58	  	68	  	83	  	101	  	105	  	97	  	91	  	90	  	87	  	83	  	83	  	87	  	91	  	92	  	95	  	110	  	108	  	91	  	71
	 May-07
	  	59	  	46	  	39	  	37	  	37	  	43	  	50	  	68	  	90	  	101	  	103	  	107	  	112	  	115	  	117	  	121	  	126	  	129	  	126	  	119	  	121	  	124	  	102	  	76
	 Jun-07
	  	79	  	66	  	58	  	53	  	51	  	53	  	55	  	69	  	91	  	109	  	119	  	130	  	141	  	147	  	151	  	154	  	159	  	160	  	155	  	145	  	138	  	139	  	122	  	97
	 Jul-07
	  	98	  	84	  	75	  	69	  	66	  	67	  	69	  	77	  	96	  	116	  	135	  	151	  	162	  	169	  	176	  	181	  	186	  	189	  	184	  	172	  	161	  	158	  	140	  	117
	 Aug-07
	  	94	  	81	  	73	  	68	  	66	  	67	  	71	  	78	  	98	  	119	  	139	  	156	  	170	  	180	  	186	  	191	  	194	  	193	  	183	  	165	  	161	  	155	  	136	  	113
	 Sep-07
	  	65	  	55	  	48	  	45	  	45	  	48	  	55	  	65	  	86	  	98	  	102	  	109	  	119	  	126	  	129	  	133	  	139	  	140	  	136	  	132	  	135	  	122	  	101	  	81
	 Oct-07
	  	55	  	46	  	43	  	43	  	46	  	55	  	68	  	88	  	114	  	116	  	104	  	96	  	94	  	90	  	87	  	87	  	92	  	98	  	102	  	117	  	118	  	107	  	88	  	69
	 Nov-07
	  	76	  	73	  	73	  	73	  	78	  	87	  	101	  	121	  	137	  	128	  	110	  	98	  	93	  	87	  	80	  	80	  	87	  	106	  	120	  	121	  	119	  	112	  	99	  	85
	 Dec-07
	  	110	  	105	  	104	  	106	  	111	  	119	  	133	  	151	  	170	  	162	  	140	  	122	  	112	  	101	  	93	  	92	  	101	  	127	  	141	  	144	  	147	  	144	  	132	  	118
	 Jan-08
	  	136	  	128	  	126	  	128	  	133	  	142	  	155	  	179	  	209	  	200	  	165	  	141	  	130	  	113	  	100	  	97	  	111	  	148	  	166	  	163	  	157	  	147	  	137	  	130
	 Feb-08
	  	125	  	122	  	125	  	130	  	137	  	147	  	162	  	186	  	204	  	186	  	153	  	132	  	122	  	108	  	94	  	86	  	90	  	105	  	137	  	157	  	165	  	158	  	143	  	128
	 Mar-08
	  	80	  	76	  	76	  	79	  	84	  	94	  	108	  	127	  	140	  	133	  	116	  	105	  	98	  	90	  	82	  	79	  	83	  	90	  	105	  	122	  	123	  	116	  	102	  	87
	 Apr-08
	  	59	  	51	  	48	  	48	  	51	  	59	  	69	  	85	  	104	  	107	  	98	  	93	  	93	  	89	  	85	  	85	  	88	  	93	  	94	  	98	  	112	  	111	  	93	  	73
	 May-08
	  	59	  	47	  	40	  	37	  	38	  	44	  	51	  	69	  	92	  	104	  	105	  	109	  	115	  	118	  	119	  	123	  	129	  	131	  	129	  	121	  	123	  	126	  	105	  	77
	 Jun-08
	  	80	  	67	  	59	  	55	  	52	  	55	  	56	  	70	  	94	  	112	  	122	  	133	  	144	  	151	  	154	  	158	  	162	  	163	  	158	  	148	  	141	  	142	  	124	  	99
	 Jul-08
	  	101	  	86	  	76	  	70	  	68	  	69	  	70	  	79	  	98	  	119	  	137	  	154	  	165	  	173	  	179	  	185	  	190	  	193	  	188	  	176	  	164	  	161	  	144	  	119
	 Aug-08
	  	96	  	83	  	74	  	69	  	67	  	69	  	72	  	80	  	99	  	121	  	142	  	159	  	173	  	183	  	190	  	195	  	198	  	197	  	186	  	168	  	165	  	158	  	138	  	115
	 Sep-08
	  	66	  	55	  	49	  	46	  	46	  	49	  	55	  	66	  	87	  	100	  	105	  	112	  	121	  	128	  	132	  	137	  	141	  	144	  	138	  	134	  	137	  	124	  	103	  	83
	 Oct-08
	  	56	  	47	  	44	  	44	  	48	  	56	  	69	  	90	  	116	  	119	  	106	  	98	  	95	  	92	  	88	  	88	  	94	  	100	  	104	  	119	  	120	  	109	  	90	  	70
	 Nov-08
	  	78	  	74	  	74	  	74	  	79	  	89	  	103	  	123	  	139	  	130	  	112	  	101	  	94	  	88	  	82	  	81	  	88	  	108	  	122	  	123	  	121	  	114	  	101	  	87
	 Dec-08
	  	112	  	107	  	106	  	108	  	113	  	122	  	135	  	154	  	174	  	165	  	143	  	124	  	114	  	103	  	95	  	94	  	104	  	129	  	144	  	147	  	150	  	146	  	135	  	120

 Attachment 4-1 to Duke-Rutherford Agreement 
  

 3 








 Rutherford 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	Weekend
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Jan-09
	  	138	  	131	  	129	  	130	  	136	  	144	  	158	  	182	  	214	  	204	  	168	  	144	  	133	  	115	  	101	  	98	  	113	  	151	  	170	  	166	  	160	  	150	  	140	  	133
	 Feb-09
	  	127	  	125	  	127	  	133	  	140	  	150	  	165	  	190	  	208	  	190	  	155	  	134	  	124	  	110	  	95	  	87	  	92	  	107	  	140	  	160	  	168	  	161	  	146	  	130
	 Mar-09
	  	81	  	77	  	77	  	80	  	86	  	97	  	110	  	130	  	143	  	136	  	119	  	107	  	100	  	91	  	83	  	80	  	85	  	93	  	107	  	124	  	126	  	119	  	104	  	89
	 Apr-09
	  	60	  	51	  	49	  	48	  	51	  	60	  	70	  	87	  	106	  	109	  	101	  	95	  	94	  	90	  	87	  	87	  	90	  	94	  	96	  	99	  	114	  	113	  	95	  	73
	 May-09
	  	61	  	48	  	41	  	38	  	39	  	44	  	52	  	71	  	94	  	105	  	108	  	111	  	117	  	120	  	122	  	126	  	131	  	134	  	131	  	123	  	126	  	129	  	106	  	79
	 Jun-09
	  	82	  	69	  	60	  	55	  	54	  	55	  	58	  	72	  	95	  	113	  	124	  	135	  	147	  	154	  	157	  	161	  	165	  	167	  	161	  	151	  	144	  	145	  	126	  	101
	 Jul-09
	  	102	  	87	  	78	  	72	  	69	  	70	  	72	  	80	  	100	  	121	  	140	  	157	  	168	  	176	  	183	  	188	  	194	  	197	  	192	  	179	  	167	  	165	  	146	  	122
	 Aug-09
	  	98	  	84	  	76	  	70	  	69	  	69	  	73	  	81	  	101	  	123	  	144	  	162	  	176	  	187	  	194	  	199	  	202	  	200	  	190	  	172	  	168	  	161	  	141	  	118
	 Sep-09
	  	67	  	56	  	51	  	48	  	47	  	50	  	56	  	67	  	90	  	102	  	107	  	114	  	123	  	130	  	135	  	139	  	144	  	147	  	141	  	137	  	140	  	126	  	105	  	84
	 Oct-09
	  	57	  	48	  	44	  	44	  	48	  	57	  	71	  	92	  	119	  	121	  	108	  	100	  	97	  	94	  	90	  	90	  	96	  	102	  	106	  	122	  	122	  	111	  	92	  	72
	 Nov-09
	  	80	  	76	  	75	  	76	  	81	  	90	  	105	  	126	  	142	  	133	  	115	  	102	  	97	  	90	  	83	  	83	  	90	  	111	  	126	  	126	  	123	  	116	  	103	  	88
	 Dec-09
	  	114	  	109	  	108	  	110	  	115	  	124	  	137	  	158	  	177	  	168	  	145	  	126	  	116	  	105	  	97	  	96	  	105	  	132	  	147	  	150	  	152	  	149	  	137	  	122
	 Jan-10
	  	141	  	133	  	132	  	133	  	138	  	147	  	161	  	186	  	218	  	208	  	172	  	147	  	136	  	117	  	104	  	100	  	115	  	154	  	173	  	170	  	163	  	153	  	143	  	135
	 Feb-10
	  	130	  	127	  	129	  	135	  	143	  	153	  	168	  	194	  	213	  	193	  	158	  	137	  	126	  	112	  	97	  	89	  	94	  	109	  	143	  	163	  	171	  	165	  	149	  	133
	 Mar-10
	  	83	  	79	  	79	  	82	  	88	  	98	  	112	  	133	  	146	  	138	  	121	  	108	  	102	  	94	  	85	  	83	  	87	  	94	  	109	  	127	  	128	  	121	  	106	  	90
	 Apr-10
	  	61	  	53	  	50	  	49	  	52	  	61	  	72	  	88	  	108	  	111	  	102	  	97	  	96	  	93	  	89	  	88	  	92	  	97	  	98	  	101	  	116	  	115	  	97	  	75
	 May-10
	  	62	  	48	  	41	  	39	  	40	  	45	  	53	  	72	  	96	  	108	  	109	  	113	  	119	  	122	  	124	  	128	  	134	  	137	  	133	  	126	  	128	  	131	  	108	  	80
	 Jun-10
	  	83	  	69	  	62	  	56	  	55	  	56	  	59	  	73	  	97	  	115	  	126	  	138	  	150	  	157	  	160	  	165	  	169	  	170	  	165	  	154	  	147	  	147	  	129	  	103
	 Jul-10
	  	105	  	89	  	80	  	73	  	70	  	71	  	73	  	82	  	102	  	123	  	144	  	160	  	172	  	180	  	186	  	192	  	198	  	200	  	196	  	183	  	170	  	168	  	149	  	124
	 Aug-10
	  	100	  	86	  	77	  	72	  	69	  	71	  	75	  	83	  	103	  	126	  	147	  	165	  	180	  	191	  	198	  	203	  	206	  	204	  	193	  	175	  	172	  	165	  	144	  	120
	 Sep-10
	  	69	  	58	  	51	  	48	  	48	  	51	  	58	  	69	  	91	  	105	  	108	  	116	  	126	  	133	  	137	  	142	  	147	  	149	  	144	  	140	  	143	  	129	  	108	  	86
	 Oct-10
	  	58	  	49	  	45	  	45	  	49	  	59	  	73	  	94	  	121	  	123	  	110	  	101	  	99	  	95	  	91	  	92	  	98	  	104	  	108	  	124	  	125	  	113	  	94	  	73
	 Nov-10
	  	81	  	77	  	76	  	77	  	83	  	92	  	107	  	128	  	144	  	136	  	117	  	105	  	98	  	91	  	86	  	84	  	92	  	112	  	128	  	128	  	126	  	119	  	105	  	90
	 Dec-10
	  	116	  	111	  	110	  	112	  	118	  	126	  	140	  	161	  	181	  	172	  	148	  	129	  	119	  	108	  	99	  	98	  	108	  	134	  	151	  	153	  	155	  	152	  	140	  	125

 Attachment 4-1 to Duke-Rutherford Agreement 
  

 4 








 Attachment 4-2 
 Calculation of Reduction to EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods 
 I.
Definitions 
 1. The “Carolina Power & Light Service Obligation Resources” or “SORs” means those
generation and purchased capacity resources provided to NCEMC by CP&L and used by NCEMC to serve NCEMC load pursuant to the Power Supply Agreement. 
 2. The “Power Supply Agreement” means the Power Supply Agreement Dated November 2, 1998 Between North Carolina Electric Membership Corporation and Carolina Power & Light Company, d/b/a Progress
Energy Carolinas, Inc., as amended, filed at FERC in Docket No. ER05-722-000 on June 30, 2005. 
 3. The “1996 SO” means the
Service Obligation assumed by NCEMC on January 1, 1996 in the amount of 204.3 MW including losses. 
 4. “SOR A” means the 225
MW of electric capacity and energy that CP&L provides to NCEMC pursuant through December 31, 2015 pursuant to Section 2.1(a)(1) of the Power Supply Agreement. 
 5. “SOR E” means the 225 MW of electric capacity and energy that CP&L provides to NCEMC pursuant through December 31, 2013 pursuant to
Section 2.1(a)(4) of the Power Supply Agreement. 







 6. “NCEMC Catawba Resource Entitlement” or “CRE” means NCEMC’s 623.5 MW
ownership interest in the Catawba Nuclear Station. 
 7. “NCEMC’s CP&L Native Load” or “NCNL” means the electric
capacity and energy demands (kW) imposed on NCEMC by its member cooperatives in CP&L’s existing Control Areas, and which are served by CP&L under the Power Supply Agreement (excluding the 1996 SO). 
 8. “NCEMC’s Duke Native Load” or “NDNL” means the electric capacity and energy demands (kW) imposed on NCEMC by its member
cooperatives in Duke’s Control Area. 
  

 2 








 II. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During
Light Load Periods (through December 31, 2008) 
 EMC’s Base Obligation and EMC Group’s Base Obligation during an Hour
shall be subject to reduction during the period commencing on the Commencement Date and continuing through December 31, 2008 in accordance with the following: 
 A. NCEMC’s contractual right to SO 1996, SOR A and SOR E (654.3 MW rounded to 655 MW) is subject to reduction based on a comparison between 655 MW and NCEMC’s CP&L Native Load (NCNL). 
 B. In the event that NCEMC’s CP&L Native Load during the Hour is less than 655 MW, EMC’s Base Obligation and EMC Group’s Base
Obligation for the Hour shall be reduced as follows: 
 C. If 655 MW minus NCNL is equal to or less than 225 MW, the reduction in EMC’s
Base Obligation shall be equal to the amount set forth in Equation 1 below: 
 Equation 1: ( ( 655 MW - NCNL ) / 225 ) * 17 
 D. If 655 MW minus NCNL is greater than 225 MW, the reduction in EMC’s Base Obligation shall be equal to 17 MW plus the amount set forth in Equation
2 below: 
 Equation 2: ( ( 430 MW - NCNL ) / 225 ) * 17 
  

 3 








 E. If 655 MW minus NCNL is equal to or less than 225 MW, the reduction in EMC Group’s Base
Obligation shall be equal to the amount set forth in Equation 3 below: 
 Equation 3: ( ( 655 MW - NCNL ) / 225 ) * 33 
 F. If 655 MW minus NCNL is greater than 225 MW, the reduction in EMC Group’s Base Obligation shall be equal to 33 MW plus the amount set forth in
Equation 4 below: 
 Equation 4: ( ( 430 MW - NCNL ) / 225 ) * 33 
 G. Example: If NCNL is equal to 565 MW during an Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( ( 655 MW – 565
MW ) / 225 ) * 17 or 6.8 MW, and the reduction in EMC Group’s Base Obligation for the Hour shall be equal to ( (655 MW - 565 MW) / 225 ) * 33, or 13.2 MW. 
 III. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods (January 1, 2009 through December 31, 2010) 
 EMC’s Base Obligation and EMC Group’s Base Obligation during an Hour shall be subject to reduction during the period commencing on
January 1, 2009 and continuing through December 31, 2010 in accordance with the following: 
  

 4 








 A. NCEMC’s contractual right to SO 1996 and SOR A (429.3 MW rounded to 430 MW) is subject to
reduction based on a comparison between 430 MW and NCEMC’s CP&L Native Load (NCNL). 
 B. In the event that NCEMC’s CP&L
Native Load during the Hour is less than 430 MW, EMC’s Base Obligation for the Hour shall be reduced as follows: 
 Equation 5: ( (430
MW - NCNL ) / 225 ) * 17 
 C. In the event that NCEMC’s CP&L Native Load during the Hour is less than 430 MW, EMC Group’s Base
Obligation for the Hour shall be reduced as follows: 
 Equation 6: ( ( 430 MW - NCNL ) / 225 ) * 33 
 D. Example: If NCNL is equal to 340 MW during an Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( ( 430 MW – 340
MW ) / 225 ) * 17 MW, or 6.8 MW, and the reduction in EMC Group’s Base Obligation for the Hour shall be equal to ( ( 430 MW – 340 MW ) / 225 ) * 33, or 13.2 MW. 
 IV. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods for the Catawba Resource Entitlement 
 In addition to the reductions to EMC’s Base Obligation and EMC Group’s Base Obligation set forth under Sections II and III above, EMC’s
Base Obligation and EMC Group’s Base Obligation shall be subject to reduction as set forth in this Section IV. 
  

 5 








 A. In the event that NCEMC’s Duke Native Load during an Hour is less than 623.5 MW and a
nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the Hour, EMC’s Base Obligation for the Hour shall be reduced as follows: 
 Equation 7: (1 - ( NDNL / 623.5 MW) ) * 47 MW 
 B. In the event that NCEMC’s Duke Native Load during an Hour is less than 623.5 MW and a nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the Hour, EMC Group’s Base Obligation
for the Hour shall be reduced as follows: 
 Equation 8: (1 - ( NDNL / 623.5 MW ) ) * 95 MW 
 C. Example: If NDNL is equal to 561.15 MW during an Hour, and a nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the
Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( 1 - ( 561.15 MW / 623.5 MW) ) * 47 MW, which equals ( .1 ) * ( 47 MW ), or 4.7 MW, and the reduction in EMC Group’s
Base Obligation for the Hour shall be equal to ( 1 - ( 561.15 MW / 623.5 MW ) ) * 95 MW, which equals ( .1 ) * ( 95 MW ), or 9.5 MW. 
  

 6 








 Attachment 4-3 
 Partial Requirements Resources 
 Resource Name: AEP Baseload 
 Type of Resources: Baseload Resource 
 Delivery period: January 1, 2011 through December 31, 2012 
 Resource Capacity MW: 10 
 Must take resource: Yes, in the amount of MWs that NCEMC indicates is available in each hour. 
 Scheduling: A schedule must be submitted for each hour by Duke in the amount of MWs that NCEMC indicates is available. 
 Energy Pricing: NA 
 Force
Majeure: “Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed
to, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not
be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss of failure of Seller’s supply; or (iv) Seller’s ability to sell
the Product at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a
Transmission Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission
Provider’s tariff, provided however, that existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has
occurred. 
 Attachment 4-3 to Duke-Rutherford Agreement 







 Attachment 4-3 
 Partial Requirements Resources 
 (Page 2 of 7) 
 Resource Name: Catawba 
 Type of Resource: Baseload Resource 
 Delivery period: January 1, 2011
through December 31, 2021 
 Resource Capacity MW: 47 
 Must take resource: Yes, in the amount of MWs that NCEMC indicates is available in each hour. 
 Scheduling: A schedule must be submitted for each hour by Duke in the amount of MWs that NCEMC indicates is available.

 Energy Pricing: NA 
 Force Majeure: The term “Force Majeure” as used herein shall mean any cause beyond the control of the party affected and which by reasonable efforts the party affected is unable to overcome, including without limitation the
following: Acts of God: fire, flood, landslide, lightning, earthquake, hurricane, tornado, storm, freeze, or drought; blight, famine, epidemic, or quarantine; strike, lockout or other labor difficulty; act or failure to act of any party (and such
party so acting or failing to act shall not used such act or failure to act to excuse any other obligation which it has under this Agreement); act or failure to act of any regulatory agency or other governmental authority; changes in the work or
delays caused by public bidding requirements; theft; casualty; accident; equipment breakdown, failure or shortage of, or inability to obtain from usual sources, goods, labor, equipment, information or drawings, machinery, supplies, energy, fuel or
materials; embargo; injunction; litigation or arbitration with suppliers or vendors; shortage of rolling stock; arrest; war; civil disturbance; explosion; acts of public enemies; sabotage; or breach of contract by any supplier, contractor,
sub-contractor, laborer or materialman. Any party rendered unable to fulfill any obligation under this Agreement by reason of Force Majeure shall make reasonable efforts to remove such inability within a reasonable time. 
 Attachment 4-3 to Duke-Rutherford Agreement 
  

 2 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 3 of 7) 
 Resource Name: Dominion PPA 
 Type of Resource: Combined Cycle Resource 
 Delivery period: January 1,
2011 through December 31, 2014 
 Resource Capacity MW: 10 
 Must take resource: No 
 Resource
Availability: Duke has the right but not the obligation to schedule the amount of MWs that NCEMC has indicated is available from this resource. 
 Min run time (Hours): 8 
 Scheduling: 

	 	•	 	Day ahead schedule to be submitted, with intraday changes allowed 

  

	 	•	 	Nominations must be made in whole MWs 

  

	 	•	 	Day ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intraday Schedules are those that are requested after the 8:00 a.m. EPT deadline above. All
Schedule changes must occur at the top of the hour. Intraday Schedule changes require 2 hours advance notice. 

  

	 	•	 	Day ahead scheduling: Unlimited changes up to the allocation MWs 

  

	 	•	 	Intraday scheduling: Limit of two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative
maximum of 10% each hour. Additional changes will be accommodated on a best efforts basis. 

 Energy Pricing: For each month of the
Delivery Period, the price for energy will equal the sum of Day-Ahead Energy Charge, the Intra-day Energy Charge, the Incremental Variable Charge and the Variable O&M Charge: 
  

	 	•	 	Day-ahead Energy Charge = the sum of each day in the month’s Day-Ahead Energy Price x energy scheduled Day-Ahead 

  

	 	•	 	Day-Ahead Energy Price = (Day-Ahead Fuel Index + Fuel Adder) x Heat Rate 

  

	 	•	 	Day-Ahead Fuel Index: Gas Daily: Daily Price Survey, Midpoint of the Daily Ranges, Appalachia, Dominion South Point. Gas Index for each Sat. and Sun. shall be the price
specified for the Mon. immediately following such Sat. and Sun. In the event that Gas Daily no longer publishes this index, NCEMC and Dominion will agree upon a replacement index which will be passed through to the IM.


  

	 	•	 	Intra-Day Energy Charge = the sum of each day in the month’s Intra-Day Energy Price x energy scheduled Intra-Day 

  

	 	•	 	Intra-Day Energy Price = (Intra-Day Fuel Index + Fuel Adder) x Heat Rate 

 Attachment 4-3 to Duke-Rutherford Agreement 
  

 3 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 4 of 7) 
  

	 	•	 	Intra-Day Fuel Index: The higher of the price in $/MMBtu for such calendar day or the next calendar day of Gas Daily: Daily Price Survey, Absolute of the Daily Ranges,
Appalachia, Dominion South Point. Gas Index for each Sat and Sun shall be the price specified for the higher of the Monday or Tuesday immediately following such Saturday and Sunday. 

  

	 	•	 	Fuel Adder: $0.25/MMBtu 

  

	 	•	 	Heat Rate: 

  

	 	•	 	2006 heat rate: 7.730 MMBtu/MWh 

  

	 	•	 	Heat Rate Adjustment: The heat rate will be recalculated annually to reflect the actual energy costs from the previous year. The new heat rate will go into effect on February 1
of each year. 

  

	 	•	 	Incremental Variable Charge: There may be additional charges due to making Intra-day schedule changes. 

  

	 	•	 	Variable O&M Charge: 

  

	
	 2011 = $3.81/MWh

	 2012 = $3.91/MWh

	 2013 = $4.01/MWh

	 2014 = $4.11/MWh


 Force Majeure: “Force Majeure” means an event or circumstance which prevents one Party from
performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Claiming
Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability
economically to use or resell the Product purchased hereunder; (iii) the loss or failure of Seller’s supply; or (iv) Seller’s ability to sell the Product at a price greater than the Contract Price. Neither Party may raise a claim
of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the Delivery Point
and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of a Force Majeure absent a showing
of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred.  
 Attachment 4-3 to Duke-Rutherford Agreement 
  

 4 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 5 of 7) 
 Resource Name: SCEG 
 Type of Resource: Combined Cycle Resource 
 Delivery period: January 1,
2011 through December 31, 2012 
 Resource Capacity MW: 17 
 Must take resource: No 
 Resource
Availability: Duke has the right but not the obligation to schedule the amount of MWs that NCEMC has indicated is available from this resource. 
 Min run time (Hours): 4 
 Firm Gas Transportation: Firm gas transportation has been procured for up to 16
hours a day. Therefore, operation of this resource is limited to no more than 16 hours a day. 
 Scheduling:

  

	 	•	 	Day ahead schedule to be submitted, with intraday changes allowed 

  

	 	•	 	Nominations must be made in whole MWs 

  

	 	•	 	Day ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intraday Schedules are those that are requested after the 8:00 a.m. EPT deadline above. All
Schedule changes must occur at the top of the hour. Intraday Schedule changes require 2 hours advance notice. 

  

	 	•	 	Day ahead scheduling: Unlimited changes up to the allocation MWs 

  

	 	•	 	Intraday scheduling: Limit of two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative
maximum of 10% each hour. Additional changes will be accommodated on a best efforts basis. 

 Energy Pricing: For each month of the
Delivery Period, the price for energy will equal the sum of Day-Ahead Energy Charge, the Intra-day Energy Charge and the Variable O&M Charge: 
  

	 	•	 	Day-ahead Energy Charge = the sum of each day in the month’s Day-Ahead Energy Price x energy scheduled Day-Ahead: 

  

	 	•	 	Day-Ahead Energy Price = (Day-Ahead Fuel Index + Fuel Adder) x Heat Rate 

  

	 	•	 	Day-Ahead Fuel Index: 102.6% of SONAT Mid-Point price as published in Gas Daily for Louisiana-OnShore South for gas to flow on such day 

  

	 	•	 	Intra-Day Energy Charge = the sum of each day in the month’s Intra-Day Energy Price x energy scheduled Intra-Day 

  

	 	•	 	Intra-Day Energy Price = (Intra-Day Fuel Index + Fuel Adder) x Heat Rate 

 Attachment 4-3 to Duke-Rutherford Agreement 
  

 5 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 6 of 7) 
  

	 	•	 	Intra-Day Fuel Index: 102.6% of the higher of the Gas Daily daily Mid-Point price for SONAT under the table for Louisiana-OnShore South for gas to flow such day or the Gas
Daily daily Mid-Point price for SONAT under the table for Louisiana-OnShore South for gas to flow on the next trading day 

  

	 	•	 	Fuel Adder: $0.1/MMBtu 

  

	 	•	 	Heat Rate: 7.350 MMBtu/MWh 

  

	 	•	 	Variable O&M Charge: 

  

	
	 2011 = $2.70/MWh

	 2012 = $2.76/MWh


 Force Majeure: “Force Majeure” means an event or circumstance which prevents one Party from
performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Claiming
Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability
economically to use or resell the Product purchased hereunder; (iii) the loss of failure of Seller’s supply; or (iv) Seller’s ability to sell the Product at a price greater than the Contract Price. Neither Party may raise a claim
of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the Delivery Point
and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of a Force Majeure absent a showing
of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. 
 Attachment 4-3 to Duke-Rutherford Agreement 
  

 6 








 Attachment 4-3 
 Partial Requirements Resources 
 (Page 7 of 7) 
 Resource Name: SEPA 
 Type of Resource: Baseload Resource 
 Delivery period: January 1, 2011
through December 31, 2021 
 Resource Capacity MW: 24 
 Must take resource: Duke must schedule the amount of energy that SEPA indicates is available. 
 Resource Availability: SEPA will send the “Energy for Scheduling” declaration to Duke on Thursday of each week. The declaration shows the minimum energy
and excess energy available for scheduling. 
 Scheduling: 
  

	 	•	 	Duke to schedule with SEPA. 

  

	 	•	 	All scheduling nominations must be made in whole megawatts (MW) only. 

  

	 	•	 	If the SEPA declaration shows excess energy is available, that energy must be scheduled – it is not optional. 

  

	 	•	 	After receiving the energy declaration from SEPA, Duke is to fax or email back their proposed schedule for the coming week (7 days). The seven day week shall commence at the
beginning of Saturday and extend to the end of Friday. 

  

	 	•	 	Schedules may be revised on a day-ahead basis only if received by 8 AM. 

 Energy Pricing: NA 
 Force Majeure: Neither the Government nor Purchaser shall be considered to be in
default in respect of any obligation hereunder, if prevented from fulfilling such obligation by reason of uncontrollable forces, including but not limited to failure of facilities, flood, earthquake, storm, lightning, fire, epidemic, war, riot,
civil disturbance, labor disturbance, materials or equipment shortages, or restraint by court or public authority, which by exercise of reasonable diligence and foresight could not have been avoided, but excluding drought. Either party rendered
unable to fulfill any obligation by reason of an uncontrollable force shall remove such inability with all reasonable dispatch. 
 Attachment 4-3 to
Duke-Rutherford Agreement 
  

 7 








 Attachment 7-2 
 Example showing the calculation of the Monthly Demand Charges in the 
 Duke-Blue Ridge Agreement,
Duke-Piedmont Agreement 
 and Duke-Rutherford Agreement 
 The purpose of this attachment is to provide an example showing the calculation of the Monthly Demand Charge provided in Section 7.1.4 of the
above-identified agreements. Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R, respectively, and collectively as the EMC Group. 
 Assumptions: 
 Hour in October in which the
positive difference between the EMC Group Native Load and EMC Group’s Base Obligation is the greatest: 4:00-5:00 pm, October 14, 2006. 
  

							
	 	  	 BR
 (kW)
	  	 P
 (kW)
	  	 R
 (kW)

	 EMC Hourly Demand (10-14-06 4-5 pm)
	  	75,000	  	275,000	  	375,000
	 EMC Base Obligation (10-14-06 4-5pm)
	  	100,000	  	200,000	  	250,000

  

	
	 EMC Group Hourly Demand (10-14-06, 4-5 pm): 725,000 kW

	 EMC Group Base Obligation (10-14-06, 4-5 pm): 550,000 kW


 Step 1 
 Calculate EMC Group Monthly Demand Quantity per Section 7.1.4.3. 
  
  

			
	EMC Group Hourly Demand	  	725,000 kW
	minus EMC Group Base Obligation	  	- 550,000 kW
		  	 
	EMC Group Monthly Demand Quantity	  	175,000 kW








 Step 2 
 Calculate EMC Monthly Demand Quantity per Section 7.1.4.1. 
  

							
	 	  	 A
 EMC Hourly Demand
 (10-14-06 4-5pm) (kW)
	  	 B
 minus EMC Base Obligation
 (10-14-06 4-5 pm)
 (kW)
	  	 C
 EMC Monthly Demand
Quantity2
 (kW)

	 BR
	  	75,000	  	100,000	  	0
	 P
	  	275,000	  	200,000	  	75,000
	 R
	  	375,000	  	250,000	  	125,000

 Step 3 
 Calculate EMC Group Combined Monthly Demand Quantity per Section 7.1.4.2. 
  

			
	 BR Monthly Demand Quantity
	  	0 kW
	 P Monthly Demand Quantity
	  	75,000 kW
	 R Monthly Demand Quantity
	  	125,000 kW
	 EMC Group Combined Monthly Demand Quantity
	  	200,000 kW
		  	 

 Step 4 
 Calculate Monthly Demand Amount per Section 7.1.4. 
  

									
	 	  	 A
 EMC Monthly Demand
Quantity
 (kW)
	  	 B
 EMC Group Combined
Monthly Demand Quantity
(kW)
	  	 C
 EMC Group Monthly
Demand Quantity
 (kW)
	  	 D
 EMC Monthly
Demand Amount
 ( ( A /B) * C) (kW)

	 BR
	  	0	  	200,000	  	175,000	  	0
	 P
	  	75,000	  	200,000	  	175,000	  	65,625
	 R
	  	125,000	  	200,000	  	175,000	  	109,375



	2	Cannot be less than zero. 

  

 2 








 Step 5 
 Calculate Monthly Demand Charge per Section 7.1.4. 
  

								
	 	  	 A
 EMC Monthly Demand
Amount (kW)
	  	 B
 Monthly Demand
Rate ($/kW-year)
	  	 C
 Monthly Demand Charge

	 BR
	  	0	  	0.75	  	 	0
	 P
	  	65,625	  	0.75	  	$	49,218.75
	 R
	  	109,375	  	0.75	  	$	82,031.25

  

 3 








 Attachment 7-3 
 Calculation of Rutherford Allocated Share of 
 Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy
Credit, 
 Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 I. Definitions 
 1. The Inter-EMC Transfer Price for an Hour shall be equal to the simple average of the Duke
Territorial Incremental Cost for the Hour and the Duke Territorial Decremental Cost for the Hour; provided, that for any Hour for which the EMC Group Energy Credit Amount is zero, the Inter-EMC Transfer Price for the Hour shall be equal to 101.5% of
the Duke Territorial Incremental Cost for the Hour, and that for any Hour for which the EMC Group Energy Purchase Amount is zero, the EMC Transfer Price for the Hour shall be equal to 101.5% of the Duke Territorial Decremental Cost for the Hour.

 2. All other capitalized terms shall have the meaning set forth in Section 1.1 of this Agreement. 
 II. Rutherford Allocated Share of the Duke Total Hourly Energy Charge 
 The Rutherford Allocated Share of the Duke Total Hourly Energy Charge for an Hour shall be equal to: 
 ( C2
/ A ) * D 
 Where: 
 A = EMC Group Combined Energy Purchase
Amount 
 C2 = Rutherford Energy Purchase Amount 
 D = Duke
Total Hourly Energy Charge 
  

	III.	Rutherford Allocated Share of the Inter-EMC Energy Charge 

 The Rutherford Allocated Share of the Inter-EMC Energy Charge for an Hour shall be equal to: 
 ( C2 / A ) * ( A—B ) * P

 Where: 
 A = EMC Group Combined Energy Purchase Amount

 B = EMC Group Energy Purchase Amount 
 C2 = Rutherford Energy
Purchase Amount 
 P = Inter-EMC Transfer Price 







 IV. Rutherford Allocated Share of the EMC Group Total Hourly Energy Credit  
 The Rutherford Allocated Share of the EMC Group Total Hourly Energy Credit for an Hour shall be equal to: 
 ( G2 / E ) * H 
 Where: 
 E = EMC Group Combined Energy Credit Amount 
 G2 = Rutherford Energy Credit
Amount 
 H = EMC Group Total Hourly Energy Credit 
  

	V.	Rutherford Allocated Share of the Inter-EMC Energy Credit 

 The Rutherford Allocated Share of the Inter-EMC Energy Credit for an Hour shall be equal to: 
 ( G2 / E ) * ( E – F ) * P

 Where: 
 E = EMC Group Combined Energy Credit Amount

 F = EMC Group Energy Credit Amount 
 G2 = Rutherford Energy
Credit Amount 
 P = Inter-EMC Transfer Price 
  

 - 2 - 








 Attachment 7-4 
 Example 1 
 Showing the Calculation of Blue Ridge, Piedmont and 
 Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, 
 EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 The
purpose of this attachment is to provide an example showing the calculation of the charges and credits identified above for one Hour. For purposes of this example, Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R,
respectively, and collectively as the EMC Group. 
 I. ASSUMPTIONS: 
 A. Call and Put Signals during the Hour 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Intervals 1-2253 - Call Signal during each Interval (kW):
	  	6,000	  	0	  	10,000	  	6,000
	 Intervals 1-225 - Put Signal during each Interval (kW)
	  	0	  	10,000	  	0	  	0
	 Intervals 226-450 - Call Signal during each Interval (kW)
	  	6,000	  	0	  	10,000	  	6,000
	 Intervals 226-450 - Put Signal during each Interval (kW)
	  	0	  	10,000	  	0	  	0
	 Intervals 451-675 - Call Signal during each Interval (kW)
	  	0	  	4,000	  	0	  	0
	 Intervals 451-675 - Put Signal during each Interval (kW)
	  	9,000	  	0	  	9,000	  	14,000
	 Intervals 676-900 - Call Signal during each Interval (kW)
	  	0	  	4,000	  	0	  	0
	 Intervals 676-900 - Put Signal during each Interval (kW)
	  	9,000	  	0	  	9,000	  	14,000

  


	3	Interval numbers refer to the Intervals during the Hour (e.g., Interval 1 is the first four seconds of the Hour, Interval 2 is the next four seconds, etc.). The Call
and Put Signals are shown as the same in each of the first 225 Intervals of the Hour, and then again as the same in the next 225 Intervals and so on. This is a simplifying assumption, to make this example less cumbersome. In actual operation, the
Parties anticipate that these positions would change frequently within the Hour. 








 B. Energy deliveries during the Hour4 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Hourly Energy Amount delivered from Duke - Intervals 1-225
	  	1,500	  	0	  	2,500	  	1,500
	 Hourly Energy Amount delivered to Duke - Intervals 1-225
	  	0	  	2,500	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 226-450
	  	1,500	  	0	  	2,500	  	1,500
	 Hourly Energy Amount delivered to Duke - Intervals 226-450
	  	0	  	2,500	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 451-675
	  	0	  	1,000	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 451-675
	  	2,250	  	0	  	2,250	  	3,500
	 Hourly Energy Amount delivered from Duke - Intervals 676-900
	  	0	  	1,000	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 676-900
	  	2,250	  	0	  	2,250	  	3,500

 C. Incremental/Decremental Costs 
  

	
	 Duke Territorial Incremental Cost: $0.10/kWh

	 Duke Territorial Decremental Cost: $0.10/kWh


  


	4	These numbers sum the four-second Call and Put Signals from Part I.A. For example, 6,000 kW delivered by Duke in each of the 225 four-second Intervals (15 minutes)
equal 1,500 kWh (6,000 KW * 225 Intervals / 900 Intervals / Hour = 1500 kWh). 

  

 - 2 - 








 II. CALCULATIONS 
 A. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge 
 Step 1 
 Sum the energy deliveries by Duke to BR for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns
2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by Duke to the EMC Group for all Intervals over the entire Hour (column 5). 
  

											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR5	  	P6	  	R7	  	Sum8	  	Aggregate
EMC
Group9
	 Energy delivered by Duke (kW)
	  	3,000	  	2,000	  	5,000	  	10,000	  	3,000

 Step 2 
 Calculate the percentage that each Customer contributed to the energy deliveries by Duke (Customer Buy / Sum of Customer Buys) 
  

													
	 	  	BR10	 	 	P11	 	 	R12	 	 	Sum	 
	 Energy delivered by Duke
	  	30.00	%	 	20.00	%	 	50.00	%	 	100.00	%

  


	5	Blue Ridge Energy Purchase Amount 


	6	Piedmont Energy Purchase Amount 


	7	Rutherford Energy Purchase Amount 


	8	EMC Group Combined Energy Purchase Amount 


	9	EMC Group Energy Purchase Amount 


	10	Blue Ridge Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	11	Piedmont Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	12	Rutherford Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 

  

 - 3 - 








 Step 3 
 Calculate
Duke Total Hourly Energy Charge = 113% of Duke Territorial Incremental Cost for electric energy delivered by Duke to the EMC Group for the Hour (3,000 kW * $0.10/kWh * 113% = $339.00) 
 Step 4 
 Calculate the individual EMC’s Allocated Share of the Duke Total Hourly
Energy Charge. 
 Apply the percentages derived in Step 2 to the Duke Total Hourly Energy Charge. 
  

													
	 	  	BR13	  	P14	  	R15	  	Sum16
	 $ for energy delivered by Duke
	  	$	101.70	  	$	67.80	  	$	169.50	  	$	339.00

 These amounts are included in the Duke Hourly Energy Charge. 
  


	13	Blue Ridge Allocated Share of Duke Total Hourly Energy Charge. 


	14	Piedmont Allocated Share of Duke Total Hourly Energy Charge 


	15	Rutherford Allocated Share of Duke Total Hourly Energy Charge 


	16	Duke Total Hourly Energy Charge 

  

 - 4 - 








 B. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the EMC Group Total
Hourly Energy Credit 
 Step 5 
 Sum the energy
deliveries by BR to Duke for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by EMC Group to Duke for all Intervals over the entire Hour (column 5).

  

											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR17	  	P18	  	R19	  	Sum20	  	EMC
Group21
	 Energy delivered by Customer (kW)
	  	4,500	  	5,000	  	4,500	  	14,000	  	7,000

 Step 6 
 Calculate the percentage that each Customer contributed to the energy deliveries by Customers (Customer delivery / Sum of Customer deliveries) 
  

													
	 	  	BR22	 	 	P23	 	 	R24	 	 	Sum	 
	 Energy delivered by Customer
	  	32.14	%	 	35.71	%	 	32.14	%	 	100.00	%

  


	17	Blue Ridge Energy Credit Amount 


	18	Piedmont Energy Credit Amount 


	19	Rutherford Energy Credit Amount 


	20	EMC Group Combined Energy Credit Amount 


	21	EMC Group Energy Credit Amount 


	22	Blue Ridge Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	23	Piedmont Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	24	Rutherford Energy Credit Amount / EMC Group Combined Energy Credit Amount. 

  

 - 5 - 








 Step 7 
 Calculate the
EMC Group Total Hourly Energy Credit = 90% of Duke Territorial Decremental Cost for electric energy delivered by the EMC Group to Duke for the Hour (7,000 kW * $0.10/kWh * 90% = $630) 
 Step 8 
 Calculate the EMC Allocated Share of the EMC Group Total Hourly Energy Credit 
 Apply the percentages derived in Step 6 to the EMC Group Total Hourly Energy Credit. 
  

													
	 	  	BR25	  	P26	  	R27	  	Sum28
	 $ for energy delivered by Customers
	  	$	202.50	  	$	225.00	  	$	202.50	  	$	630.00

  


	25	Blue Ridge Allocated Share of EMC Group Total Hourly Energy Credit. 


	26	Piedmont Allocated Share of EMC Group Total Hourly Energy Credit 


	27	Rutherford Allocated Share of EMC Group Total Hourly Energy Credit 


	28	EMC Group Total Hourly Energy Credit 

  

 - 6 - 








 C. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy Charge

 Step 9 
 Calculate the difference between the EMC
Group Combined Energy Purchase Amount (sum determined in Step 1, column 4) and the EMC Group Energy Purchase Amount (aggregate calculated in Step 1, column 5). 
  

					
	Step 5, column 429	  	10,000	  	
	Step 5, column 530	  	-3,000	  	
	Difference	  	7,000	  	

 Step 10 
 Apply the percentages derived in Step 2 to the difference derived in Step 9. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Duke
	  	2,100	  	1,400	  	3,500	  	7,000

 Step 11 
 Calculate Inter-EMC Transfer Price: Average of 113% of Duke Territorial Incremental Cost and 90% of Duke Territorial Decremental Cost, unless EMC Group Energy Purchase Amount or EMC Group Energy Credit Amount is zero. If EMC Group Energy
Purchase Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Decremental Cost. If EMC Group Energy Credit Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Incremental Cost. In this example, Inter-EMC
Transfer Price is average of $0.113/kWh and $0.09/kWh, or $0.1015/kWh. 
  


	29	EMC Group Combined Energy Purchase Amount 


	30	EMC Group Energy Purchase Amount 

  

 - 7 - 








 Step 12 
 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 10. 
  

													
	 	  	BR31	  	P32	  	R33	  	Sum
	 $ for Inter-EMC Charge
	  	$	213.15	  	$	142.10	  	$	355.25	  	$	710.50

 These amounts are included in the Duke Hourly Energy Charge 
 D. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy Credit 
 Step 13 
 Calculate the EMC Group Combined Energy Credit Amount
(difference between the sum determined in Step 5, column 4) and the EMC Group Credit Amount (aggregate calculated in Step 5, column 5). 
  

					
	 Step 5, column 434
	  	14,000	  	
	 Step 5, column 535
	  	-7,000	  	
		  	 	  	
	 Difference
	  	7,000	  	

  


	31	Blue Ridge Allocated Share of Inter-EMC Energy Charge 


	32	Piedmont Allocated Share of Inter-EMC Energy Charge 


	33	Rutherford Allocated Share of Inter-EMC Energy Charge 


	34	EMC Group Combined Energy Credit Amount 


	35	EMC Group Energy Credit Amount 

  

 - 8 - 








 Step 14 
 Apply the percentages derived in Step 6 to the difference derived in Step 13. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Customer
	  	2,250	  	2,500	  	2,250	  	7,000

 Step 15 
 Muliply the Inter-EMC Transfer Price times the amounts derived in Step 14 
  

													
	 	  	BR36	  	P37	  	R38	  	Sum
	 $ for Inter-EMC Credit
	  	$	228.38	  	$	253.75	  	$	228.38	  	$	710.50

 III. CHARGE/CREDIT SUMMATION FOR THE HOUR 
  

																		
	 	  	 	  	BR	 	 	P	 	 	R	  	Total	 
	 1.
	  	Allocated Share of Duke Total Hourly Energy Ch. (Step 4)	  	$	101.70	 	 	$	67.80	 	 	$	169.50	  	$	339.00	 
	 2.
	  	Allocated Share of Inter-EMC Energy Charge (Step 12)	  	$	213.15	 	 	$	142.10	 	 	$	355.25	  	$	710.50	 
		  		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 3.
	  	Subtotal (row 1 + row 2)	  	$	314.85	 	 	$	209.90	 	 	$	524.75	  	$	1,049.50	 
		  		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 4.
	  	Allocated Share of EMC Group Ttl Hourly En. Cr. (Step 8)	  	$	202.50	 	 	$	225.00	 	 	$	202.50	  	$	630.00	 
	 5.
	  	Allocated Share of Inter-EMC Energy Credit (Step 15)	  	$	228.38	 	 	$	253.75	 	 	$	228.38	  	$	710.50	 
		  		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 6.
	  	Subtotal (row 4 + row 5)	  	$	430.88	 	 	$	478.75	 	 	$	430.88	  	$	1,340.50	 
		  		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 
	 7.
	  	Total charge (credit) (row 3 – row 6)	  	$	(116.03	)	 	$	(268.85	)	 	$	93.88	  	$	(291.00	)
		  		  	 	 	 	 	 	 	 	 	 	 	  	 	 	 



	36	Blue Ridge Allocated Share of Inter-EMC Energy Credit 


	37	Piedmont Allocated Share of Inter-EMC Energy Credit 


	38	Rutherford Allocated Share of Inter-EMC Energy Credit 

  

 - 9 - 








 Attachment 7-4 
 Example 2 
 Showing the Calculation of Blue Ridge, Piedmont and 
 Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, 
 EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 The
purpose of this attachment is to provide an example showing the calculation of the charges and credits identified above for one Hour. For purposes of this example, Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R,
respectively, and collectively as the EMC Group. 
 I. ASSUMPTIONS: 
 A. Call and Put Signals during the Hour 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Intervals 1-22539 - Call Signal during each Interval (kW):
	  	0	  	3,000	  	3,000	  	2,000
	 Intervals 1-225 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	0
	 Intervals 226-450 - Call Signal during each Interval (kW)
	  	0	  	5,000	  	3,000	  	4,000
	 Intervals 226-450 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	0
	 Intervals 451-675 - Call Signal during each Interval (kW)
	  	0	  	2,000	  	0	  	0
	 Intervals 451-675 - Put Signal during each Interval (kW)
	  	2,000	  	0	  	0	  	0
	 Intervals 676-900 - Call Signal during each Interval (kW)
	  	0	  	1,000	  	1,000	  	0
	 Intervals 676-900 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	2,000



	39	Interval numbers refer to the Intervals during the Hour (e.g., Interval 1 is the first four seconds of the Hour, Interval 2 is the next four seconds, etc.). The Call
and Put Signals are shown as the same in each of the first 225 Intervals of the Hour, and then again as the same in the next 225 Intervals and so on. This is a simplifying assumption, to make this example less cumbersome. In actual operation, the
Parties anticipate that these positions would change frequently within the Hour. 

  

 - 10 - 








 B. Energy deliveries during the Hour40 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Hourly Energy Amount delivered from Duke - Intervals 1-225
	  	0	  	750	  	750	  	500
	 Hourly Energy Amount delivered to Duke - Intervals 1-225
	  	1,000	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 226-450
	  	0	  	1,250	  	750	  	1,000
	 Hourly Energy Amount delivered to Duke - Intervals 226-450
	  	1,000	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 451-675
	  	0	  	500	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 451-675
	  	500	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 676-900
	  	0	  	250	  	250	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 676-900
	  	1,000	  	0	  	0	  	500

 C. Incremental/Decremental Costs 
 Duke Territorial Incremental Cost: $0.10/kWh 
 Duke Territorial Decremental Cost: $0.10/kWh 
 II. CALCULATIONS 
 A. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge 
 Step 1 
 Sum the energy deliveries by Duke to BR for all Intervals over
the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by Duke to the EMC Group for all Intervals over the entire Hour (column 5). 
  


	40	These numbers sum the four-second Call and Put Signals from Part I.A. For example, 3,000 kW delivered by Duke in each of the 225 four-second Intervals (15 minutes)
equal 750 kWh (2,000 KW * 225 Intervals / 900 Intervals / Hour = 750 kWh). 

  

 - 11 - 









											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR41	  	P42	  	R43	  	Sum44	  	Aggregate
EMC
Group45
	 Energy delivered by Duke (kW)
	  	0	  	2,750	  	1,750	  	4,500	  	1,500

 Step 2 
 Calculate the percentage that each Customer contributed to the energy deliveries by Duke (Customer Buy / Sum of Customer Buys) 
  

													
	 	  	BR46	 	 	P47	 	 	R48	 	 	Sum	 
	 Energy delivered by Duke
	  	0.00	%	 	61.11	%	 	38.89	%	 	100.00	%

  


	41	Blue Ridge Energy Purchase Amount 


	42	Piedmont Energy Purchase Amount 


	43	Rutherford Energy Purchase Amount 


	44	EMC Group Combined Energy Purchase Amount 


	45	EMC Group Energy Purchase Amount 


	46	Blue Ridge Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	47	Piedmont Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	48	Rutherford Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 

  

 - 12 - 








 Step 3 
 Calculate
Duke Total Hourly Energy Charge = 113% of Duke Territorial Incremental Cost for electric energy delivered by Duke to the EMC Group for the Hour (1,500 kW * $0.10/kWh * 113% = $169.50) 
 Step 4 
 Calculate the individual EMC’s Allocated Share of the Duke Total Hourly
Energy Charge. 
 Apply the percentages derived in Step 2 to the Duke Total Hourly Energy Charge. 
  

													
	 	  	BR49	  	P50	  	R51	  	Sum52
	 $ for energy delivered by Duke
	  	$	0.00	  	$	103.58	  	$	65.92	  	$	169.50

 These amounts are included in the Duke Hourly Energy Charge. 
 B. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the EMC Group Total Hourly Energy Credit 
  


	49	Blue Ridge Allocated Share of Duke Total Hourly Energy Charge. 


	50	Piedmont Allocated Share of Duke Total Hourly Energy Charge 


	51	Rutherford Allocated Share of Duke Total Hourly Energy Charge 


	52	Duke Total Hourly Energy Charge 

  

 - 13 - 








 Step 5 
 Sum the
energy deliveries by BR to Duke for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by EMC Group to Duke for all Intervals over the entire Hour
(column 5). 
  

											
	 Column number
	  	1	  	3	  	4	  	5	  	6
	 	  	BR53	  	P54	  	R55	  	Sum56	  	EMC
Group57
	 Energy delivered by Customer (kW)
	  	3,500	  	0	  	0	  	3,500	  	500

 Step 6 
 Calculate the percentage that each Customer contributed to the energy deliveries by Customers (Customer delivery / Sum of Customer deliveries) 
  

													
	 	  	BR58	 	 	P59	 	 	R60	 	 	Sum	 
	 Energy delivered by Customer
	  	100.00	%	 	0.00	%	 	0.00	%	 	100.00	%



	53	Blue Ridge Energy Credit Amount 


	54	Piedmont Energy Credit Amount 


	55	Rutherford Energy Credit Amount 


	56	EMC Group Combined Energy Credit Amount 


	57	EMC Group Energy Credit Amount 


	58	Blue Ridge Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	59	Piedmont Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	60	Rutherford Energy Credit Amount / EMC Group Combined Energy Credit Amount. 

  

 - 14 - 








 Step 7 
 Calculate the
EMC Group Total Hourly Energy Credit = 90% of Duke Territorial Decremental Cost for electric energy delivered by the EMC Group to Duke for the Hour (500 kW * $0.10/kWh * 90% = $45) 
 Step 8 
 Calculate the EMC Allocated Share of the EMC Group Total Hourly Energy
Credit 
 Apply the percentages derived in Step 6 to the EMC Group Total Hourly Energy Credit. 
  

													
	 	  	BR61	  	P62	  	R63	  	Sum64
	 $ for energy delivered by Customers
	  	$	45.00	  	$	–  	  	$	–  	  	$	45.00



	61	Blue Ridge Allocated Share of EMC Group Total Hourly Energy Credit. 


	62	Piedmont Allocated Share of EMC Group Total Hourly Energy Credit 


	63	Rutherford Allocated Share of EMC Group Total Hourly Energy Credit 


	64	EMC Group Total Hourly Energy Credit 

  

 - 15 - 








 C. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy
Charge 
 Step 9 
 Calculate the difference between
the EMC Group Combined Energy Purchase Amount (sum determined in Step 1, column 4) and the EMC Group Energy Purchase Amount (aggregate calculated in Step 1, column 5). 
  


					
	 Step 1, column 465
	  	4,500	  	
	 Step 1, column 566
	  	-1,500	  	
		  	 	  	
	 Difference
	  	3,000	  	

 Step 10 
 Apply the percentages derived in Step 2 to the difference derived in Step 9. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Duke
	  	0	  	1,833	  	1,167	  	3,000

 Step 11 
 Calculate Inter-EMC Transfer Price: Average of 113% of Duke Territorial Incremental Cost and 90% of Duke Territorial Decremental Cost, unless EMC Group Energy Purchase Amount or EMC Group Energy Credit Amount is zero. If EMC Group Energy
Purchase Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Decremental Cost. If EMC Group Energy 
  


	65	EMC Group Combined Energy Purchase Amount 


	66	EMC Group Energy Purchase Amount 

  

 - 16 - 








 Credit Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Incremental Cost. In this example,
Inter-EMC Transfer Price is average of $0.113/kWh and $0.09/kWh, or $0.1015/kWh. 
 Step 12 
 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 10. 
  

													
	 	  	BR67	  	P68	  	R69	  	Sum
	 $ for Inter-EMC Charge
	  	$	0.00	  	$	186.08	  	$	118.42	  	$	304.50

 D. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC
Energy Credit 
 Step 13 
 Calculate the EMC Group
Combined Energy Credit Amount (difference between the sum determined in Step 5, column 4) and the EMC Group Credit Amount (aggregate calculated in Step 5, column 5). 
  

					
	 Step 5, column 470
	  	3,500	  	
	 Step 5, column 571
	  	- 500	  	
	 Difference
	  	3,000	  	



	67	Blue Ridge Allocated Share of Inter-EMC Energy Charge 


	68	Piedmont Allocated Share of Inter-EMC Energy Charge 


	69	Rutherford Allocated Share of Inter-EMC Energy Charge 


	70	EMC Group Combined Credit Amount 


	71	EMC Group Energy credit Amount 

  

 - 17 - 








 Step 14 
 Apply the percentages derived in Step 6 to the difference derived in Step 13. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Customer
	  	3,000	  	0	  	0	  	3,000

 Step 15 
 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 14 
  

													
	 	  	BR72	  	P73	  	R74	  	Sum
	 $ for Inter-EMC Credit
	  	$	304.50	  	$	0.00	  	$	0.00	  	$	304.50



	72	Blue Ridge Allocated Share of Inter-EMC Energy Credit 


	73	Piedmont Allocated Share of Inter-EMC Energy Credit 


	74	Rutherford Allocated Share of Inter-EMC Energy Credit 

  

 - 18 - 








 III. CHARGE/CREDIT SUMMATION FOR THE HOUR 
  

																
	 	  	 	  	BR	 	 	P	  	R	  	Total
	 1.
	  	Allocated Share of Duke Total Hourly Energy Ch. (Step 4)	  	$	0.00	 	 	$	103.58	  	$	65.92	  	$	169.50
	 2.
	  	Allocated Share of Inter-EMC Energy Charge (Step 12)	  	$	0.00	 	 	$	186.08	  	$	118.42	  	$	304.50
	 3.
	  	Subtotal (row 1 + row 2)	  	$	0.00	 	 	$	289.67	  	$	184.33	  	$	474.00
	 4.
	  	Allocated Share of EMC Group Ttl Hourly En. Cr. (Step 8)	  	$	45.00	 	 	$	0.00	  	$	0.00	  	$	45.00
	 5.
	  	Allocated Share of Inter-EMC Energy Credit (Step 15)	  	$	304.50	 	 	$	0.00	  	$	0.00	  	$	304.50
	 6.
	  	Subtotal (row 4 + row 5)	  	$	349.50	 	 	$	0.00	  	$	0.00	  	$	349.50
	 7.
	  	Total charge (credit) (row 3 – row 6)	  	$	(349.50	)	 	$	289.67	  	$	184.33	  	$	124.50

  

 - 19 - 








 Attachment 7-5 
 Example showing Calculations of 
 Rutherford Energy Purchase Amounts 
 and Rutherford Energy Credit Amount 
 This attachment provides an example showing the calculation of the Rutherford Energy Purchase Amount and Rutherford Energy Credit Amount for one Hour. 
  

													
	 Four-
 second
 Interval
 Number*
	 	 A
 EMC’s
 Base
 Obligation
 (kW)
	 	 B
 EMC’s
 Native
 Load
 (kW)
	 	 C
 Call
 Signal
 (B-A
 where
 B>A)
 (kW)
	 	 D
 Call
 energy
 (C/900)
 (kWhs)
	 	 E
 Put
 Signal
 (A-B
 where
 A>B)
 (kW)
	 	 F
 Put
 energy
 (E/900)
 (kWhs)

	 1
	 	100,000	 	102,000	 	2,000	 	2.2	 	—  	 	—  
	 2
	 	100,000	 	101,000	 	1,000	 	1.1	 	—  	 	—  
	 3
	 	100,000	 	100,000	 	—  	 	—  	 	—  	 	—  
	 4
	 	100,000	 	99,000	 	—  	 	—  	 	1,000	 	1.1
	 5
	 	100,000	 	98,000	 	—  	 	—  	 	2,000	 	2.2
	 6
	 	100,000	 	97,000	 	—  	 	—  	 	3,000	 	3.3
	 7-89575
	 	100,000	 	100,000	 	—  	 	—  	 	—  	 	—  
	 896
	 	100,000	 	98,000	 	—  	 	—  	 	2,000	 	2.2
	 897
	 	100,000	 	99,000	 	—  	 	—  	 	1,000	 	1.1
	 898
	 	100,000	 	100,000	 	—  	 	—  	 	—  	 	—  
	 899
	 	100,000	 	101,000	 	1,000	 	1.1	 	—  	 	—  
	 900
	 	100,000	 	102,000	 	2,000	 	2.2	 	—  	 	—  
		 		 		 		 	 	 		 	 
	 Total
	 		 		 		 	6.676	 		 	9.977
		 		 		 		 	 	 		 	 

  


	*	Interval numbers refer to the Intervals during the hour (e.g., Interval 1 is the first four seconds of the hour, Interval 2 is the next four seconds, etc.) 



	75	To simplify this example, EMC’s Base Obligation and EMC’s Native Load are assumed to be equal during Intervals 6-895. In actual operation, the parties
anticipate that these amounts will differ throughout the Hour. 


	76	Rutherford Energy Purchase Amount 


	77	Rutherford Energy Credit Amount 








 Attachment 7-6 
 Example showing Calculations of EMC Group Energy Purchase Amounts 
 and EMC Group Energy Credit
Amount 
 This attachment provides an example showing the calculation of the EMC Group Energy Purchase Amount and EMC Group Energy Credit
Amount for one Hour. 
  

													
	 Four-
 second
 Interval
 Number*
	 	 A
 EMC
 Group
 Base
 Obligation
 (kW)
	 	 B
 EMC
 Group
 Native
 Load
 (kW)
	 	 C
 Call
 Signal
 (B-A
 where
 B>A)
 (kW)
	 	 D
 Call
 energy
 (C/900)
 (kWhs)
	 	 E
 Put
 Signal
 (A-B
 where
 A>B)
 (kW)
	 	 F
 Put
 energy
 (E/900)
 (kWhs)

	 1
	 	400,000	 	408,000	 	8,000	 	8.8	 	—  	 	—  
	 2
	 	400,000	 	404,000	 	4,000	 	4.4	 	—  	 	—  
	 3
	 	400,000	 	400,000	 	—  	 	—  	 	—  	 	—  
	 4
	 	400,000	 	396,000	 	—  	 	—  	 	4,000	 	4.4
	 5
	 	400,000	 	392,000	 	—  	 	—  	 	8,000	 	8.8
	 6
	 	400,000	 	388,000	 	—  	 	—  	 	12,000	 	13.2
	 7-89578
	 	400,000	 	400,000	 	—  	 	—  	 	—  	 	—  
	 896
	 	400,000	 	392,000	 	—  	 	—  	 	8,000	 	8.8
	 897
	 	400,000	 	396,000	 	—  	 	—  	 	4,000	 	4.4
	 898
	 	400,000	 	400,000	 	—  	 	—  	 	—  	 	—  
	 899
	 	400,000	 	404,000	 	4,000	 	4.4	 	—  	 	—  
	 900
	 	400,000	 	408,000	 	8,000	 	8.8	 	—  	 	—  
		 		 		 		 	 	 		 	 
	 Total
	 		 		 		 	26.479	 		 	39.680
		 		 		 		 	 	 		 	 

  


	*	Interval numbers refer to the Intervals during the hour (e.g., Interval 1 is the first four seconds of the hour, Interval 2 is the next four seconds, etc.) 



	78	To simplify this example, the EMC Group’s Base Obligation and the EMC Group’s Native Load are assumed to be equal during Intervals 6-895. In actual
operation, the Parties anticipate that these amounts will differ throughout the Hour. 


	79	EMC Group Energy Purchase Amount 


	80	EMC Group Energy Credit Amount 








 Attachment 7-7 
 Example showing the calculation of 
 Monthly Billing Demand under Section 7.2.2.2

 The purpose of this attachment is to provide an example showing the calculation of the Monthly Billing Demand under
Section 7.2.2.2 of the Agreement. 
  

	 	I.	Assumptions: 

  

									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 1.
	  	 Highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	5:00-6:00 p.m.	  	17,000
	 2.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	6:00-7:00 p.m.	  	16,975
	 3.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	4:00-5:00 p.m.	  	16,950
	 4.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	3:00-4:00 p.m.	  	16,925
	 5.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	5:00-6:00 p.m.	  	16,900
	 6.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	6:00-7:00 p.m.	  	16,875
	 7.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	4:00-5:00 p.m.	  	16,850
	 8.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	3:00-4:00 p.m.	  	16,825
	 9.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	5:00-6:00 p.m.	  	16,800
	 10.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	6:00-7:00 p.m.	  	16,775
	 11.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	4:00-5:00 p.m.	  	16,750
	 12.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	3:00-4:00 p.m.	  	16,725
	 13.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	5:00-6:00 p.m.	  	16,700
	 14.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	6:00-7:00 p.m.	  	16,675
	 15.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2007
	  	6-26-07	  	4:00-5:00 p.m.	  	16,650
	 16.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2007
	  	1-18-07	  	9:00-10:00 a.m.	  	16,575
	 19.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2007
	  	1-18-07	  	10:00-11:00 a.m.	  	16,550
	 20.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	4:00-5:00 p.m.	  	16,525









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	3:00-4:00 p.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	5:00-6:00 p.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	6:00-7:00 p.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	3:00-4:00 p.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	4:00-5:00 p.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	2:00-3:00 p.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	1:00-2:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	5:00-6:00 p.m.	  	16,325
	 29.
	  	 29th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	6:00-7:00 p.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	4:00-5:00 p.m.	  	16,325

  

	 	II.	Calculation of Monthly Billing Demand for 2007: 

 The twenty (20) highest load hours during July-August are hours 1-14, 16-17 and 20-23. 
  

											
	 No. from Part I
	  	 Day
	  	 Hour
	  	 EMC Native Load
 (kW)
	  	 EMC Base Obligation
(kW)
	  	 EMC Native Load
minus EMC Base
Obligation
(kW)

	 1.
	  	7-25-07	  	5:00-6:00 p.m.	  	100,000	  	80,000	  	20,000
	 2.
	  	7-25-07	  	6:00-7:00 p.m.	  	102,000	  	80,000	  	22,000
	 3.
	  	7-25-07	  	4:00-5:00 p.m.	  	104,000	  	80,000	  	24,000
	 4.
	  	7-25-07	  	3:00-4:00 p.m.	  	106,000	  	80,000	  	26,000
	 5.
	  	7-24-07	  	5:00-6:00 p.m.	  	104,000	  	80,000	  	24,000
	 6.
	  	7-24-07	  	6:00-7:00 p.m.	  	102,000	  	79,000	  	23,000
	 7.
	  	7-24-07	  	4:00-5:00 p.m.	  	100,000	  	79,000	  	21,000
	 8.
	  	7-24-07	  	3:00-4:00 p.m.	  	100,000	  	79,000	  	21,000
	 9.
	  	8-1-07	  	5:00-6:00 p.m.	  	100,000	  	79,000	  	21,000
	 10.
	  	8-1-07	  	6:00-7:00 p.m.	  	100,000	  	78,000	  	22,000
	 11.
	  	8-1-07	  	4:00-5:00 p.m.	  	99,000	  	78,000	  	21,000

  

 -2- 









											
	 No.
 from
 Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Base Obligation
(kW)
	 	 EMC Native Load
minus EMC Base
Obligation
(kW)

	 12.
	 	8-1-07	 	3:00-4:00 p.m.	 	99,000	 	78,000	 	21,000
	 13.
	 	7-26-07	 	5:00-6:00 p.m.	 	99,000	 	100,000	 	0
	 14.
	 	7-26-07	 	6:00-7:00 p.m.	 	99,000	 	100,000	 	0
	 16.
	 	7-26-07	 	4:00-5:00 p.m.	 	98,000	 	100,000	 	0
	 17.
	 	7-24-07	 	3:00-4:00 p.m.	 	98,000	 	100,000	 	0
	 20.
	 	8-2-07	 	4:00-5:00 p.m.	 	98,000	 	100,000	 	0
	 21.
	 	8-2-07	 	3:00-4:00 p.m.	 	98,000	 	100,000	 	0
	 22.
	 	8-2-07	 	5:00-6:00 p.m.	 	98,000	 	100,000	 	0
	 23.
	 	8-2-07	 	6:00-7:00 p.m.	 	98,000	 	100,000	 	0
		 		 		 		 		 	 
		 	 TOTAL
	 		 		 		 	266,000
		 		 		 		 		 	 
		 	 AVERAGE
	 		 		 		 	13,30081
		 		 		 		 		 	 

  


	81	Monthly Billing Demand for each Month during 2007. 

  

 -3- 








 Attachment 7-8 
 Examples showing the calculation of 
 Monthly Billing Demand under Section 7.3.2.2

 The purpose of this attachment is to provide examples showing the calculation of the Monthly Billing Demand under Section 7.3.2.2
of the Agreement. 
 Example A 
  

	 	I.	Assumptions: 

  

									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 1.
	  	 Highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	5:00-6:00 p.m.	  	17,000
	 2.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	6:00-7:00 p.m.	  	16,975
	 3.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	4:00-5:00 p.m.	  	16,950
	 4.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	3:00-4:00 p.m.	  	16,925
	 5.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	5:00-6:00 p.m.	  	16,900
	 6.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	6:00-7:00 p.m.	  	16,875
	 7.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	4:00-5:00 p.m.	  	16,850
	 8.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,825
	 9.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	5:00-6:00 p.m.	  	16,800
	 10.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	6:00-7:00 p.m.	  	16,775
	 11.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	4:00-5:00 p.m.	  	16,750
	 12.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	3:00-4:00 p.m.	  	16,725
	 13.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	5:00-6:00 p.m.	  	16,700
	 14.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	6:00-7:00 p.m.	  	16,675
	 15.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2012
	  	6-26-12	  	4:00-5:00 p.m.	  	16,650
	 16.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	9:00-10:00 a.m.	  	16,575
	 19.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	10:00-11:00 a.m.	  	16,550









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 20.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	4:00-5:00 p.m.	  	16,525
	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	3:00-4:00 p.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	5:00-6:00 p.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	6:00-7:00 p.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	3:00-4:00 p.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	4:00-5:00 p.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	2:00-3:00 p.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	1:00-2:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	5:00-6:00 p.m.	  	16,325
	 29.
	  	 29th highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	6:00-7:00 p.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	4:00-5:00 p.m.	  	16,325

 Annual Planning Period is May through September 
  

	 	II.	Calculation of Monthly Billing Demand for 2012: 

 The
twenty (20) highest load hours during the Summer Period are hours 1-17 and 20-22 
  

											
	 No. from Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements
 Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
 Resources
 (kW)

	 1.
	 	7-25-12	 	5:00-6:00 p.m.	 	120,000	 	100,000	 	20,000
	 2.
	 	7-25-12	 	6:00-7:00 p.m.	 	120,000	 	100,000	 	20,000
	 3.
	 	7-25-12	 	4:00-5:00 p.m.	 	120,000	 	100,000	 	20,000
	 4.
	 	7-25-12	 	3:00-4:00 p.m.	 	120,000	 	100,000	 	20,000
	 5.
	 	7-24-12	 	5:00-6:00 p.m.	 	115,000	 	100,000	 	15,000
	 6.
	 	7-24-12	 	6:00-7:00 p.m.	 	115,000	 	100,000	 	15,000
	 7.
	 	7-24-12	 	4:00-5:00 p.m.	 	115,000	 	100,000	 	15,000

  

 -2- 









											
	 No. from Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
Resources
 (kW)

	 8.
	 	7-24-12	 	3:00-4:00 p.m.	 	115,000	 	100,000	 	15,000
	 9.
	 	8-1-12	 	5:00-6:00 p.m.	 	110,000	 	100,000	 	10,000
	 10.
	 	8-1-12	 	6:00-7:00 p.m.	 	110,000	 	100,000	 	10,000
	 11.
	 	8-1-12	 	4:00-5:00 p.m.	 	110,000	 	100,000	 	10,000
	 12.
	 	8-1-12	 	3:00-4:00 p.m.	 	110,000	 	100,000	 	10,000
	 13.
	 	7-26-12	 	5:00-6:00 p.m.	 	105,000	 	100,000	 	5,000
	 14.
	 	7-26-12	 	6:00-7:00 p.m.	 	105,000	 	100,000	 	5,000
	 15.
	 	6-26-12	 	4:00-5:00 p.m.	 	105,000	 	100,000	 	5,000
	 16.
	 	7-26-12	 	4:00-5:00 p.m.	 	105,000	 	100,000	 	5,000
	 17.
	 	7-24-12	 	3:00-4:00 p.m.	 	100,000	 	100,000	 	0
	 20.
	 	8-2-12	 	4:00-5:00 p.m.	 	100,000	 	100,000	 	0
	 21.
	 	8-2-12	 	3:00-4:00 p.m.	 	95,000	 	100,000	 	0
	 22.
	 	8-2-12	 	5:00-6:00 p.m.	 	95,000	 	100,000	 	0
		 		 		 		 		 	 
		 	 TOTAL
	 		 		 		 	200,000
		 		 		 		 		 	 
		 	 AVERAGE
	 		 		 		 	10,00082
		 		 		 		 		 	 

 Example B 
  

	 	I.	Assumptions: 

  

									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 1.
	  	 Highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	7:00-8:00 a.m.	  	17,000
	 2.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	8:00-9:00 a.m.	  	16,975



	82	Monthly Billing Demand for each Month during 2012. 

  

 -3- 









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 3.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	9:00-10:00 a.m.	  	16,950
	 4.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	10:00-11:00 a.m.	  	16,925
	 5.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	7:00-8:00 a.m.	  	16,900
	 6.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	8:00-9:00 a.m.	  	16,875
	 7.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	9:00-10:00 a.m.	  	16,850
	 8.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	10:00-11:00 a.m.	  	16,825
	 9.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	7:00-8:00 a.m.	  	16,800
	 10.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	8:00-9:00 a.m.	  	16,775
	 11.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	9:00-10:00 a.m.	  	16,750
	 12.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	10:00-11:00 a.m.	  	16,725
	 13.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2012
	  	12-21-12	  	8:00-9:00 a.m.	  	16,700
	 14.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2012
	  	12-21-12	  	9:00-10:00 a.m.	  	16,675
	 15.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2012
	  	12-21-12	  	10:00-11:00 a.m.	  	16,650
	 16.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	7:00-8:00 a.m.	  	16,575
	 19.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	8:00-9:00 a.m.	  	16,550
	 20.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	9:00-10:00 a.m.	  	16,525
	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	10:00-11:00 a.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	9:00-10:00 a.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	10:00-11:00 a.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	7:00-8:00 a.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	8:00-9:00 a.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	6:00-7:00 a.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	11:00 a.m.-12:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-17-12	  	8:00-9:00 a.m.	  	16,325
	 29.
	  	 29th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-17-12	  	9:00-10:00 a.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-17-12	  	10:00-11:00 a.m.	  	16,325
	 31.
	  	 Highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	7:00-8:00 a.m.	  	17,000

  

 -4- 









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 32.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	8:00-9:00 a.m.	  	16,975
	 33.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	9:00-10:00 a.m.	  	16,950
	 34.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	10:00-11:00 a.m.	  	16,925
	 35.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	7:00-8:00 a.m.	  	16,900
	 36.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	8:00-9:00 a.m.	  	16,875
	 37.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	9:00-10:00 a.m.	  	16,850
	 38.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	10:00-11:00 a.m.	  	16,825
	 39.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	7:00-8:00 a.m.	  	16,800
	 40.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	8:00-9:00 a.m.	  	16,775
	 41.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	9:00-10:00 a.m.	  	16,750
	 42.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	10:00-11:00 a.m.	  	16,725
	 43.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-28-11	  	8:00-9:00 a.m.	  	16,700
	 44.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-28-11	  	9:00-10:00 a.m.	  	16,675
	 45.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2011
	  	12-15-11	  	9:00-10:00 a.m.	  	16,650
	 46.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2011
	  	12-16-11	  	9:00-10:00 a.m.	  	16,625
	 47.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2011
	  	12-15-11	  	10:00-11:00 a.m.	  	16,600
	 48.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	5:00-6:00 p.m.	  	16,575
	 49.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	6:00-7:00 p.m.	  	16,550
	 50.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	4:00-5:00 p.m.	  	16,525
	 51.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	3:00-4:00 p.m.	  	16,500
	 52.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	11:00 a.m.-12:00 p.m.	  	16,475
	 53.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	6:00-7:00 a.m.	  	16,450
	 54.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-5-11	  	8:00-9:00 a.m.	  	16,425
	 55.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-5-11	  	9:00-10:00 a.m.	  	16,400
	 56.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-20-11	  	8:00-9:00 a.m.	  	16,375
	 57.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-20-11	  	9:00-10:00 a.m.	  	16,350
	 58.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-21-11	  	7:00-8:00 a.m.	  	16,325
	 59.
	  	 29th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-21-11	  	8:00-9:00 a.m.	  	16,300
	 60.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-21-11	  	9:00-10:00 a.m.	  	16,325

  

 -5- 








 Annual Planning Period is October through April 
 The twenty (20) highest load hours during the Winter Period are hours 1-12 and 18-22 in 2012 and hours 45-47 in 2011. 
  

	 	II.	Calculation of Monthly Billing Demand for 2012: 

  

											
	 No. from Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements
 Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
 Resources
 (kW)

	 1.
	 	1-25-12	 	7:00-8:00 a.m.	 	120,000	 	100,000	 	20,000
	 2.
	 	1-25-12	 	8:00-9:00 a.m.	 	120,000	 	100,000	 	20,000
	 3.
	 	1-25-12	 	9:00-10:00 a.m.	 	120,000	 	100,000	 	20,000
	 4.
	 	1-25-12	 	10:00-11:00 a.m.	 	120,000	 	100,000	 	20,000
	 5.
	 	1-24-12	 	7:00-8:00 a.m.	 	115,000	 	100,000	 	15,000
	 6.
	 	1-24-12	 	8:00-9:00 a.m.	 	115,000	 	100,000	 	15,000
	 7.
	 	1-24-12	 	9:00-10:00 a.m.	 	115,000	 	100,000	 	15,000
	 8.
	 	1-24-12	 	10:00-11:00 a.m.	 	115,000	 	100,000	 	15,000
	 9.
	 	2-1-12	 	7:00-8:00 a.m.	 	110,000	 	100,000	 	10,000
	 10.
	 	2-1-12	 	8:00-9:00 a.m.	 	110,000	 	100,000	 	10,000
	 11.
	 	2-1-12	 	9:00-10:00 a.m.	 	110,000	 	100,000	 	10,000
	 12.
	 	2-1-12	 	10:00-11:00 a.m.	 	110,000	 	100,000	 	10,000
	 45.
	 	12-15-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 46.
	 	12-16-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 47.
	 	12-15-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 18.
	 	2-2-12	 	7:00-8:00 a.m.	 	105,000	 	100,000	 	5,000
	 19.
	 	2-2-12	 	8:00-9:00 a.m.	 	100,000	 	100,000	 	0
	 20.
	 	2-2-12	 	9:00-10:00 a.m.	 	100,000	 	100,000	 	0
	 21.
	 	2-2-12	 	10:00-11:00 a.m.	 	95,000	 	100,000	 	0
	 22.
	 	1-18-12	 	9:00-10:00 a.m.	 	95,000	 	100,000	 	0
		 		 		 		 		 	 
		 	 TOTAL
	 		 		 		 	200,000
		 		 		 		 		 	 
		 	 AVERAGE
	 		 		 		 	10,00083
		 		 		 		 		 	 

  


	83	Monthly Billing Demand for each Month during 2012. 

  

 -6- 








 ATTACHMENT 7-9 
 Demand Rate Adjustment Percentage and Annual Percentage 
 This attachment provides the formulas to be used for calculating
the Demand Rate Adjustment Percentage and Annual Percentage for each calendar year beginning January 1, 2011. 
 The Demand Rate Adjustment Percentage
shall equal the Production Capacity Revenue Requirement Adjustment divided by the Original Production Capacity Revenue Requirement, but not less than zero. 
 Where 
 Production Capacity Revenue
Requirement Adjustment = (Annual Percentage – 4%) * (Original Production Capacity Revenue Requirement + Original Energy Revenue Requirement) 
 And 
 Annual Percentage shall equal the product of the System Gross Plant Difference and the Fixed Charge Rate,
divided by the sum of Original Production Capacity Revenue Requirement and Original Energy Revenue Requirement. For purposes of calculating the Production Capacity Revenue Requirement Adjustment, the Annual Percentage shall be a maximum of 10%.

 System Gross Plant Difference shall equal EMC Plant in Service less NC Retail Plant in Service. (May be positive or negative.) System Gross Plant
Difference shall be decreased as necessary to eliminate differences between EMC Plant in Service and NC Retail Plant in Service related to timing or method of recovery of plant costs (e.g., plant differences due to recovery of construction period
financing costs through inclusion of construction work in progress in rate base). 
 Fixed Charge Rate shall equal
10%. 
 EMC Plant in Service shall equal the average of the total ending balance of Production Plant, General Plant and Intangible Plant according to
Schedule 1 of this Agreement, for the calendar year for which the Production Capacity Revenue Requirement calculation is prepared and total ending balance of Production Plant, General Plant and Intangible Plant according to Schedule 1 of this
Agreement for the previous calendar year calculation of the Production Capacity Revenue Requirement. 
 NC Retail Plant in Service shall equal the sum
of Duke Power Retail Plant in Service and Nantahala Retail Plant in Service, which shall be determined from Company records supporting the total Electric Plant in Service amount on Schedule 3 of NCUC Form E.S.-1 for the 12 month calendar period
corresponding to the Production Capacity Revenue Requirement calculation used for calculating the EMC Plant in Service. 







 Duke Power Retail Plant in Service shall equal the average of the two December balances for the total of
Production, General and Intangible plant amounts included in the total Electric Plant in Service monthly amounts shown on Schedule 3 of NCUC Form E.S.-1 for Duke Power. 
 Nantahala Retail Plant in Service shall equal the average of the two December balances for the total of Production, General and Intangible plant amounts included in the total Electric Plant in Service monthly
amounts shown on Schedule 3 of NCUC Form E.S.-1 for Nantahala Power & Light. 
 Original Production Capacity Revenue Requirement shall equal
the Production Capacity Revenue Requirement before consideration of any adjustments pursuant to Section 7.3.2.3 of the Agreement. 
 Original Energy
Revenue Requirement shall equal the sum of F for purposes of calculating the Fuel Rate in Schedule 1 and Variable Non-Fuel Production Operation and Maintenance Expense for purposes of calculating the Variable O&M Rate in Schedule 1.

  

 - 2 - 








 Attachment 7-10 
 Example of Demand Rate Adjustment Percentage and Annual Percentage 
 Note: EMC and NC Retail Plant in Service
values are actuals for 2004. 
 CASE WITH NO ADJUSTMENT WARRANTED–– 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant (“timing” adjusted)	  	$	11,509,514	  	$	11,509,514	 	 	NC Retail = Attachment 7-10, Page 4, Line 10
	 5
	  	System Gross Plant Difference	  			  	$	—  	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	—  	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	0.00	%	 	 (Line 7 / Line 3)
 No adjustment occurs since below 4%
impact


 Note: EMC Plant in Service values are actuals for 2004, but NC Retail Plant in Service values have been reduced
for purpose of demonstration. 
 CASE WITH NO ADJUSTMENT WARRANTED— 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant (“timing” adjusted)	  	$	10,618,079	  	$	11,509,514	 	 	NC Retail = Attachment 7-10, Page 4, Line 10
	 5
	  	System Gross Plant Difference	  			  	$	891,435	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	89,143	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	2.96	%	 	 (Line 7 / Line 3)
 No adjustment occurs since below 4%
impact









 ADJUSTMENT WARRANTED 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant	  	$	9,729,655	  	$	11,509,514	 	 	
	 5
	  	System Gross Plant Difference	  			  	$	1,779,859	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	177,986	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	5.91	%	 	 (Line 7 / Line 3)
 Since Annual Percentage is in excess
of 4%,
 adjustment to Demand Rate is needed.

	 9
	  	Demand Rate Adjustment Percentage	  			  	 	3.24	%	 	[(Line 8 - 4%) x Line 3] / Line 1
	 10
	  	Demand Rate per Section 7.3.2.1	  			  	$	117.53	 	 	
	 11
	  	Demand Rate as adjusted per Section 7.3.2.3	  			  	$	113.72	 	 	Line 10 x (100% - Line 9)

  

 - 2 - 








 ADJUSTMENT WARRANTED (but limited) 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant	  	$	8,368,409	  	$	11,509,514	 	 	
	 5
	  	System Gross Plant Difference	  			  	$	3,141,105	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	314,110	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	10.44	%	 	 (Line 7 / Line 3)
 Since Annual Percentage is in excess
of 4%,
 adjustment to Demand Rate is needed, but is
 limited to
maximum of 6% of total unadjusted
 revenue requirements.

	 9
	  	Demand Rate Adjustment Percentage	  			  	 	10.18	%	 	[(Line 8* - 4%) x Line 3] / Line 1
	 10
	  	Demand Rate per Section 7.3.2.1	  			  	$	117.53	 	 	
	 11
	  	Demand Rate as adjusted per Section 7.3.2.3	  			  	$	105.57	 	 	Line 10 x (100% - Line 9)



	*	maximum of 10% 

  

 - 3 - 








 (Amounts from Quarterly NCUC Form E.S.-1, Schedule 3, for 12ME 2004) 
  

																	
	 	  	 (Dollars in thousands)
	  	System Gross Electric Plant in Service for Determination of NC Retail Plant in Service
	 	  	 	  	Duke Power	  	Nantahala	  	Total NC Retail
	 	  	 	  	Beginning	  	Ending	  	Beginning	  	Ending	  	Beginning	  	Ending	  	Average
	 1
	  	 Plant in Service
	  	18,980,402	  	19,683,592	  	324,710	  	334,880	  	19,305,112	  	20,018,472	  	19,661,792
		  	 Components (data from Company records):
	  		  		  		  		  		  		  	
	 2
	  	 Production Plant
	  	9,257,448	  	9,666,832	  	39,399	  	39,263	  	9,296,847	  	9,706,095	  	9,501,471
	 3
	  	 Nuclear Fuel (gross)
	  	816,874	  	769,178	  		  		  	816,874	  	769,178	  	793,026
	 4
	  	 Total Production Plant
	  	10,074,322	  	10,436,010	  	39,399	  	39,263	  	10,113,721	  	10,475,273	  	10,294,497
	 5
	  	 Transmission Plant
	  	1,745,408	  	1,819,243	  	92,489	  	91,335	  	1,837,897	  	1,910,578	  	1,874,238
	 6
	  	 Distribution Plant
	  	5,978,416	  	6,312,889	  	168,040	  	181,129	  	6,146,456	  	6,494,018	  	6,320,237
	 7
	  	 General Plant
	  	973,070	  	902,246	  	20,232	  	18,603	  	993,302	  	920,849	  	957,076
	 8
	  	 Intangible Plant
	  	209,186	  	213,204	  	4,550	  	4,550	  	213,736	  	217,754	  	215,745
	 9
	  	 Total (ties to Line 1)
	  	18,980,402	  	19,683,592	  	324,710	  	334,880	  	19,305,112	  	20,018,472	  	19,661,792
	 10
	  	 Total of Production/General/Intangible Plant for use in Annual Percentage calculation
	  		  		  		  		  	11,320,759	  	11,613,876	  	11,467,318

  

																			
	 	  	 (Dollars in thousands)
	  	NC Retail
Plant in
Service	  	 EMC Plant in Service - Amounts from
 Schedule 1 for 2004
	  	EMC Plant
in Service	  	System
Gross Plant
Difference	  	Adjustment
for Timing
Difference	  	Adjusted
System
Gross Plant
Difference
	 	  	 	  	 	  	Beginning	  	Ending	  	Average	  	 	  	 	  	 	  	 
	 1
	  	 Plant in Service
	  		  		  		  		  		  		  		  	
		  	 Components (data from Company records):
	  		  		  		  		  		  		  		  	
	 2
	  	 Production Plant
	  	9,501,471	  	9,339,044	  	9,748,291	  	9,543,668	  	9,543,668	  	42,197	  	42,197	  	—  
	 3
	  	 Nuclear Fuel (gross)
	  	793,026	  	816,874	  	769,178	  	793,026	  	793,026	  	—  	  		  	—  
	 4
	  	 Total Production Plant
	  	10,294,497	  	10,155,918	  	10,517,469	  	10,336,694	  	10,336,694	  	42,197	  	42,197	  	—  
	 5
	  	 Transmission Plant
	  		  		  		  		  		  		  		  	
	 6
	  	 Distribution Plant
	  		  		  		  		  		  		  		  	
	 7
	  	 General Plant
	  	957,076	  	993,303	  	920,849	  	957,076	  	957,076	  	—  	  		  	—  
	 8
	  	 Intangible Plant
	  	215,745	  	213,736	  	217,753	  	215,745	  	215,745	  	—  	  		  	—  
	 9
	  	 Total (ties to Line 1)
	  		  		  		  		  		  		  		  	
		  		  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	
	 10
	  	 Total of Production/General/Intangible Plant for use in Annual Percentage calculation
	  	11,467,318	  	11,362,957	  	11,656,071	  	11,509,517	  	11,509,515	  	42,197	  	42,197	  	
		  		  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	

  

 - 4 - 








 Attachment 8-1 
 (Part I of II) 
 TERMS AND CONDITIONS 
 FOR THE SCHEDULING OF POWER 
 SUPPLIED BY NORTH CAROLINA 
 ELECTRIC MEMBERSHIP CORPORATION 
 TO
ITS INDEPENDENT MEMBERS 







 All NCEMC Committed Resources associated with the Wholesale Power Supply Agreement between the Seller and
the Buyer are governed by and subject to all of the terms and conditions in this Exhibit, unless a specific Resource Summary Attachment explicitly provides otherwise. Unless defined in this Exhibit, all capitalized terms used herein shall have the
respective meanings set forth as Article One of the Wholesale Power Supply Agreement. 
 General Principles 
  

	1.	Buyer is responsible for planning the way it chooses to use any Capacity or Energy delivered pursuant to one of the Resource Summary Attachments governed by this Exhibit. As a part
of the Wholesale Power Supply Agreement, the Parties have agreed to a set of Resource Summary Attachments that collectively are intended to represent a financial approximation of an allocation of the NCEMC Committed Resources on the Effective Date.


  

	2.	For any hour of delivery, Seller will optimize resources around final dispatch for the combined load of all of Seller’s Participating Members, plus the schedules of the Buyer
and other Independent Members. 

  

	3.	Buyer will pay Seller charges for Energy and the delivery of Energy to the Interface Point under terms specified in Resource Summary Attachments and terms specified elsewhere in
this Agreement including but not limited to Sections 2.4, 2.12 and Article Five. 

 Delivery of Allocated Resources 
  

	4.	Energy Scheduled from Buyer’s Independent Member Allocation is delivered to the Interface Point. The cost and expense of all transmission services, including ancillary services
and losses, from the Interface Point are the sole responsibility of Buyer. 

  

	5.	Seller will be deemed the provider of the resources needed for the purposes of tagging and for the designation of resources under the applicable tariffs of the Transmission
Provider(s) selected by Buyer. 

 Scheduling by Buyer 
  

	6.	All Schedules from Buyer for each Independent Member Allocation will be in whole MWs and may not exceed the IM Allocation MW detailed on the Resource Summary Attachment.


  

	7.	Buyer will submit a separate Schedule in conformance with this Exhibit S by System by resource up to the Maximum Scheduling Limit by System, as further described in Paragraph 23 of
this Exhibit S. 

  

	8.	Buyer will be responsible for scheduling and arranging for the delivery of its SEPA allocation. 

  

 -2- 









	9.	For any Independent Member Allocation that is designated as producing Must-Take Energy, Buyer is required to Schedule for every hour of every day of the Delivery Period its full
Must-Take Energy obligation from such a resource, and may not amend or reduce its Schedule for that Energy: provided, however, that to the extent that Seller’s obligation to purchase Must-Take Energy from a resource designated as producing
Must-Take Energy is reduced in any hour, Buyer’s hourly Must-Take Energy obligation shall be adjusted by the ratio of Seller’s hourly Must-Take Energy obligation to the Resource Capacity, rounded to whole MWs. The Buyer shall not be
entitled to Schedule Must-Take Energy in an hour in amounts, which exceed the Buyer’s adjusted Must-Take Energy obligation for that hour. 

  

	10.	Buyer is obligated to Schedule resources in accordance with the terms and conditions provided in the Resource Summary Attachments consistent with the minimum run times in the
contracts pertaining to Seller’s purchased and/or owned resources, and Seller will use its good faith efforts to accommodate Buyer’s Schedules that do not meet the minimum run time requirements, but only so long as meeting such
non-conforming Schedules would not likely result in additional costs to Seller or any of its Participating Members. 

  

	11.	Except with respect to Buyer’s Independent Member Allocations that supply Must-Take Energy, Buyer is not obligated to Schedule its Independent Member Allocations consistent
with the minimum volumes in the power supply contracts of Seller that are in force on the Independent Member Effective Date. 

  

	12.	By 7:00 a.m. EPT each day Buyer must provide Seller with an hourly forecast of its load by System for the following day. 

  

	13.	The Buyer may Schedule its resources consistent with the table below. Day-ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intra-day Schedules are
those that are requested after the 8:00 a.m. EPT deadline above. All Schedule changes must occur at the top of the hour. Intra-day Schedule changes require two (2) hours advance notice. 

  

			
	 Scheduling
Changes

	 Day Ahead
	 	 Intra-Day

		
	Unlimited changes up to the IM Allocation MW identified in the Resource Summary Attachment for each resource in whole MWs.	 	Up to two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative maximum of 10% each hour. Additional
changes will be accommodated on a best efforts basis.

  

 -3- 








 Scheduling by Seller 
  

	14.	Seller is not obligated to meet Buyer’s final Schedule using the NCEMC Committed Resources associated with the Independent Member Allocations Scheduled by Buyer.


  

	15.	Seller will accept the risk and/or benefit resulting from differences in the cost of resources used to provide Buyer Energy in accordance with its Schedule(s), and the costs Seller
would have incurred had it used NCEMC Committed Resources to meet Buyer’s Schedule of the Scheduled resource(s). 

  

	16.	Should Seller acquire an alternate resource, rather than use an NCEMC Committed Resource to serve Buyer’s Schedule, and that alternate resource is curtailed, Buyer’s
Schedule will be maintained and any penalty, benefit or curtailment will be borne by Seller. 

  

	17.	Should all or any portion of NCEMC Committed Resources that have been Scheduled by Seller and Buyer to meet Buyer’s Schedule in any given hour be interrupted, then Seller shall
try to identify available alternate resources which Seller, in its sole discretion, determines are reasonably priced and suitable to meet Seller’s needs. If Seller determines that such alternate resources are available, Seller may maintain the
Scheduled deliveries to Buyer but at a price to be determined by Seller and communicated to Buyer. If no alternate resources are available to Seller, Buyer’s Schedule will be curtailed. All damages recovered by Seller from the Person
responsible for the interruption in service will be shared with Buyer and every other Member similarly affected by such interruption in service. 

 Operations and Planning 
  

	18.	Buyer will provide Seller with a real time telemetered signal of Buyer’s load for Seller’s use, for purposes of determining when to start and stop the dynamic schedule,
and to Schedule certain Must-Take Energy requirements of NCEMC Committed Resources. 

  

	19.	Seller shall provide and inform the Buyer on each Thursday by 1:00 p.m. EPT of the projected amount of Energy available hourly by Independent Member Allocation by System for
Scheduling by Buyer for the following Saturday through Friday period, including the amount of Must-Take Energy that will be delivered and must be taken hourly. 

  

	20.	By 8:00 a.m. EPT each day, Buyer shall provide an hourly forecast of its Native Load by System for the next seven (7) days. For purposes of this Exhibit S, “Native
Load” shall mean only the load of Buyer’s members. This load forecast will be used by Seller to calculate the hourly Energy available from the Independent Member Allocations that are available to be Scheduled for a given interval of time.


  

	21.	Buyer shall provide Seller on each Thursday by 4:00 p.m. EPT, a projected hourly Schedule of all the Independent Member Allocations governed by this Agreement for the following
Saturday through Friday period. 

  

 -4- 









	22.	Seller and Buyer agree on the following checkout and verification process: 

  

	    	As soon as practical after midnight, confirm hourly Schedules, energy flows and energy charges by resource and daily totals; 

  

	    	Provide a contact person each Business Day for the following: 

  

	    	Resolve issues that remain unresolved; 

  

	    	Perform month-to-date confirmations of hourly Schedules, energy flows and energy charges by resource and daily totals; 

  

	    	Finalize monthly checkouts by the second Business Day of the following month; and Coordinate any true-ups that may be required. 

  

	23.	For Buyers having loads in more than one System, Buyer will provide at the Independent Member Election Date and on July 1 of each subsequent year, a forecast of the percentage
of its retail load in each System. (The sum of the percentages must equal 100%). The Maximum Scheduling Limit by System for the following calendar year will be calculated by multiplying the percentage of Buyer’s retail load in each System times
the total of Buyer’s Independent Member Allocations for the following calendar year. 

  

 -5- 








 Attachment 8-1 
 (Part II of II) 
 TERMS AND CONDITIONS 
 FOR OBTAINING TRANSMISSION 
 SERVICES ADEQUATE TO DELIVER 
 FROM THE INTERFACE POINTS 
 ESTABLISHED UNDER THE 
 WHOLESALE POWER SUPPLY AGREEMENT 
 OF NCEMC FOR SALES TO 
 ITS INDEPENDENT MEMBERS 
  

 -6- 








 General Principles and Responsibilities for Transmission: All Resource Summary Attachments associated with
the Wholesale Power Supply Agreement between Seller and Buyer are governed by and subject to the terms and conditions in this Exhibit unless a specific Resource Summary Attachment explicitly provides otherwise. For purposes of this Exhibit, the
Wholesale Power Supply Agreement and each Resource Summary Attachment governed by this Exhibit, the term “Acceptable Transmission Service” means the level of service available at any point in time that is equal to or better than that level
of service currently defined as “Network Integration Transmission Service” under the Open Access Transmission Tariff of the System to which Buyer’s distribution system is physically interconnected, and if connected to more than one
System, then Buyer must have Acceptable Transmission Service for each Interface Point. 
 The following terms for transmission service apply to each Resource
Summary Attachment included as a part of this Agreement. All of these terms assume that the current Open Access Transmission Tariff environment in force on the Effective Date remains in force, without modification or amendment. The Parties hereto
agree that any amendment, modification or change to that tariff or the regulatory environment for the wholesale electric industry, whether by regulation, regulatory action, statute, judicial action, executive decision or order, or otherwise, may
require modification of this Exhibit to restore to Buyer and Seller the benefits that each intended. Such amendments, modifications or changes would include, without limitation, any changes or modifications of the wholesale electric industry
environment based on the Standard Market Design, or the restructuring of the transmission systems or the regulatory oversight of same. If the Parties fail to reach agreement on modifications of this Exhibit, the dispute shall be subject to
arbitration under the Wholesale Power Supply Agreement. 
 Buyer is responsible for planning for and scheduling the receipt of capacity and energy to be
delivered to Buyer. Buyer will be responsible for negotiating, making and keeping in force one or more transmission agreements with the Transmission Provider(s) necessary to perform its obligations under the Wholesale Power Supply Agreement. At a
minimum, Buyer will negotiate, make and keep in force its own Network Integration Service Agreement (“NITSA”) and its own Network Operating Agreement (“NOA”). 
 Subject to and contingent upon the concurrence and agreement of each affected Transmission Provider, the RUS, and the Federal Energy Regulatory Commission (“FERC”), the Parties further agree: 
  

	1.	Buyer is responsible for serving its own load. It will do so through contracts with Seller, along with other resources Buyer will acquire. 

  

	2.	Buyer will have its own transmission agreement(s) with each and any Transmission Provider(s) whose services are needed to move capacity or energy from any Interface Point of the
System(s) to which Buyer’s distribution system is physically interconnected. 

  

	3.	Buyer will negotiate its own NITSA and NOA. Seller will provide assistance with these negotiations as requested. The cost for this assistance will be charged to Buyer separately
from charges for Capacity and Energy billed under Article 5.1 of this Agreement. 

  

 -7- 









	4.	Seller will transfer the direct-assigned facilities used for that Buyer, if any, to Buyer’s NITSA once the same has become effective. 

  

	5.	Seller will provide Buyer with contractual rights that financially approximate the hypothetical assignment of a total amount of Seller’s owned and/or purchased resources,
calculated in accordance with the NCEMC Member Power Supply Resource Policy, for purposes of Buyer’s NITSA and NOA designations for energy delivered to the System served by the Transmission Provider with which Buyer has entered its NITSA and
NOA. 

  

	6.	If any need exists or arises to designate, in addition to the contracts with Seller, any other network resources in order to meet Buyer’s load in accordance with the tariffs or
other requirements of the Transmission Provider(s), Buyer has the responsibility to locate, identify and designate such other network resources. 

  

	7.	Buyer will have the obligation to satisfy the requirements of the applicable OATT, and purchase or self-supply, as applicable, any ancillary or other services needed or required to
serve its load. 

  

	8.	Buyer will coordinate with Seller or its scheduling agent under Exhibit S to this Wholesale Power Supply Agreement to assure that the proper schedule is in place each day for
Buyer’s scheduled amount of Energy related to each of Buyer’s Resource Summary Attachments that are governed by this Exhibit. 

  

	9.	In addition to the other responsibilities arising under this Exhibit, Buyer shall be solely liable for any energy imbalance settlement and any other settlements or liabilities to
which a Transmission Customer is exposed at and from the Interface Point(s). If Buyer causes Seller to incur energy imbalance charges, Buyer will reimburse Seller for any charges that Seller incurs. 

  

 -8- 








 Attachment 8-2 
 SEPA Policies 
 Duke Control Area 
  

	 	•	 	SEPA will send the “Energy for Scheduling” declaration to Duke on Thursday of each week. The declaration shows the minimum energy and excess energy available for
scheduling. 

  

	 	•	 	A single declaration will be sent for the Duke Control Area allocation for all EMCs under a Partial Requirements Service Agreement with Duke. 

 Commencement Date through December 31, 2010 
  


	 	•	 	After receiving the energy declaration from SEPA, Duke will fax or e-mail the declaration directly to Morgan Stanley Capital Group (MSCG). 

  

	 	•	 	MSCG will then fax or e-mail their proposed schedule for the coming week (7 days) to Duke. The seven day week shall commence at the beginning of Saturday and extend to the end of
Friday. 

  

	 	•	 	All scheduling nominations must be made in whole megawatts (MW) only. 

  

	 	•	 	Schedules may be revised on a day-ahead basis only if received by 8 AM. 

  

	 	•	 	If the SEPA declaration shows Excess Energy is available, that energy must be scheduled also – it is not optional. SEPA will notify Duke (as Scheduling Agent) and Duke will in
turn notify MSCG of such available energy. 

  

	 	•	 	After receiving the nominations from MSCG via Duke, SEPA will tag the energy. Both MSCG and Duke should be on the tag. MSCG will appear as the owner of the power and Duke will be
identified as the PSE for the load (sink). 

  

	 	•	 	Duke shall receive any information or notices from SEPA relating to any changes in the schedules to serve EMC’s Native Load. Duke shall ensure that MSCG is aware of such
notices. 

  

	 	•	 	If Duke is notified by the Transmission Provider that a SEPA schedule has been rejected, Duke shall work with SEPA to have a substitute schedule generated for the Day in question
taking into account the information provided by the Transmission Provider in connection with such rejection. 

  

	 	•	 	Duke will provide daily and Monthly reconciliation and checkout services to EMC with respect to SEPA in connection with services and schedules of energy provided by SEPA and MSCG to
serve EMC’s Native Load. 








 January 1, 2011 through December 31, 2021 
  

	 	•	 	Duke is to schedule directly with SEPA on the portion of EMC’s SEPA allocation that lies within the Duke Control Area. 

  

	 	•	 	Duke will receive the energy declaration from SEPA. 

  

	 	•	 	Duke will then fax or e-mail their proposed schedule for the coming week (7 days) to SEPA. The seven day week shall commence at the beginning of Saturday and extend to the end of
Friday. 

  

	 	•	 	All scheduling nominations must be made in whole megawatts (MW) only. 

  

	 	•	 	Schedules may be revised on a day-ahead basis only if received by 8 AM. 

  

	 	•	 	If the SEPA declaration shows Excess Energy is available, that energy must be scheduled also – it is not optional. SEPA will notify Duke (as Scheduling Agent) of such available
energy. 

  

	 	•	 	After receiving the nominations from Duke, SEPA will tag the energy. Duke will be on the tag and will be identified as the PSE for the load (sink). 

  

	 	•	 	Duke shall receive any information or notices from SEPA relating to any changes in the schedules to serve EMC’s Native Load. 

  

	 	•	 	If Duke is notified by the Transmission Provider that a SEPA schedule has been rejected, Duke shall work with SEPA to have a substitute schedule generated for the Day in question
taking into account the information provided by the Transmission Provider in connection with such rejection. 

 Duke will provide daily and
Monthly reconciliation and checkout services to EMC with respect to SEPA in connection with services and schedules of energy provided by SEPA to serve EMC’s Native Load. 
  

 -2- 








 PARTIAL REQUIREMENTS SERVICE AGREEMENT 
 BETWEEN 
 DUKE POWER COMPANY LLC 
 d/b/a DUKE ENERGY CAROLINAS, LLC 
 AND 
 BLUE RIDGE ELECTRIC MEMBERSHIP CORPORATION 
 DATED AS OF MAY 12, 2006 







 TABLE OF CONTENTS 
  


					
	 	  	 	  	Page
	 Article 1 Definitions
	  	2
			
	   1.1
	  	 Definitions.
	  	2
			
	   1.2
	  	 Interpretation
	  	20
			
	   1.3
	  	 Construction
	  	20
		
	 Article 2 Term
	  	21
			
	   2.1
	  	 Effectiveness.
	  	21
			
	   2.2
	  	 Term.
	  	21
			
	   2.3
	  	 Termination.
	  	22
			
	   2.4
	  	 Absolute Nature of Termination
	  	27
		
	 Article 3 Conditions Precedent to the Commencement Date
	  	27
			
	   3.1
	  	 Conditions Precedent to Duke’s Obligations
	  	27
			
	   3.2
	  	 Conditions Precedent to EMC’s Obligations
	  	28
			
	   3.3
	  	 Notice of Satisfaction of Conditions Precedent
	  	29
			
	   3.4
	  	 Waiver of Condition Precedent
	  	29
			
	   3.5
	  	 Commencement of Service; Failure of Condition Precedent.
	  	30
		
	 Article 4 Sale of Electric Capacity and Energy
	  	34
			
	   4.1
	  	 Classification of Services Provided
	  	34
			
	   4.2
	  	 FFR Supplemental Service
	  	34
			
	   4.3
	  	 Partial Requirements Service
	  	37
			
	   4.4
	  	 Excepted Load
	  	38
			
	     4.5
	  	 Good Title
	  	38
			
	   4.6
	  	 Power Quality
	  	39
		
	 Article 5 EMC Resources
	  	39
			
	   5.1
	  	 EMC Contract Resources (Commencement Date - December 31, 2010).
	  	39
			
	   5.2
	  	 EMC Contract Resources (January 1, 2011 - Termination of Agreement).
	  	40
			
	   5.3
	  	 No Duke Obligation for Customer Resources
	  	43
			
	   5.4
	  	 New Customer Resources
	  	43
		
	 Article 6 Priority of Service
	  	44
			
	   6.1
	  	 Interruption of FFR Supplemental Service and Partial Requirements Service
	  	44









					
	   6.2
	  	 Curtailments of Load
	  	44
			
	   6.3
	  	 Emergency Load Curtailment Program
	  	45
			
	   6.4
	  	 Substitute Energy
	  	45
			
	   6.5
	  	 Substitute Energy Costs
	  	45
		
	 Article 7 Capacity and Energy Charges
	  	45
			
	   7.1
	  	 Charges During Commencement Date - December 31, 2006.
	  	45
			
	   7.2
	  	 Charges During January 1, 2007 – December 31, 2010.
	  	50
			
	   7.3
	  	 Charges Commencing January 1, 2011.
	  	51
			
	   7.4
	  	 Monthly Reserve Capacity Charges
	  	53
			
	   7.5
	  	 Payment
	  	54
			
	   7.6
	  	 Determination of EMC Capacity and Energy Demands
	  	54
		
	 Article 8 Scheduling Agent Services
	  	55
			
	   8.1
	  	 Appointment of Duke as Scheduling Agent
	  	55
			
	   8.2
	  	 Scheduling Policies
	  	55
			
	   8.3
	  	 Protocols
	  	55
			
	   8.4
	  	 Scheduling Agent Services (Commencement Date through December 31, 2010)
	  	55
			
	   8.5
	  	 Scheduling Agent Services (January 1, 2011 through Termination)
	  	56
			
	   8.6
	  	 New EMC Resources
	  	57
			
	   8.7
	  	 Errors in Schedules
	  	57
			
	   8.8
	  	 EMC Responsibilities
	  	57
			
	   8.9
	  	 Duke’s Liability.
	  	58
			
	   8.10
	  	 Termination Assistance Service
	  	58
		
	 Article 9 Transmission and Ancillary Services
	  	58
			
	   9.1
	  	 Delivery Obligations
	  	58
			
	   9.2
	  	 Transmission Arrangements
	  	58
			
	   9.3
	  	 Ancillary Services
	  	58
			
	   9.4
	  	 Regional Transmission Organization
	  	59
		
	 Article 10 Operating Committee
	  	60
			
	   10.1
	  	 Operating Committee
	  	60
			
	   10.2
	  	 Duties of the Operating Committee
	  	60
		
	 Article 11 Demand Side Management
	  	60









					
	   11.1
	  	 Availability of Demand Side Management Resource Programs
	  	60
			
	   11.2
	  	 Changes to Demand Side Management Resource Programs
	  	60
			
	   11.3
	  	 Credits
	  	61
			
	   11.4
	  	 Necessary Arrangements
	  	61
			
	   11.5
	  	 Start-Up Conditions
	  	61
			
	   11.6
	  	 Periodic Testing
	  	61
			
	   11.7
	  	 EMC Demand Side Management
	  	62
		
	 Article 12 Modification of This Agreement
	  	63
			
	   12.1
	  	 Unilateral Modification
	  	63
			
	   12.2
	  	 Mobile-Sierra Public Interest Standard
	  	63
			
	   12.3
	  	 Changes To Certain Charge Components
	  	63
			
	   12.4
	  	 Standard of Review for Permitted Changes
	  	64
			
	   12.5
	  	 Scope of Waiver
	  	64
		
	 Article 13 Billing and Payment
	  	64
			
	   13.1
	  	 Billing Period
	  	64
			
	   13.2
	  	 Billing Statements.
	  	64
			
	   13.3
	  	 Timeliness of Payment
	  	65
			
	   13.4
	  	 Netting of Payments
	  	65
			
	   13.5
	  	 Disputes and Adjustments of Statements
	  	65
			
	   13.6
	  	 Records and Audits
	  	66
		
	 Article 14 Dispute Resolution
	  	68
			
	   14.1
	  	 Arbitration
	  	68
			
	   14.2
	  	 Negotiation and Notice of Arbitration
	  	68
			
	   14.3
	  	 Individual, Joint or Consolidated Arbitration
	  	68
			
	   14.4
	  	 Selection of Arbitration Process
	  	69
			
	   14.5
	  	 Initiation of Arbitration
	  	70
			
	   14.6
	  	 Arbitration Processes.
	  	70
			
	   14.7
	  	 Decision
	  	73
			
	   14.8
	  	 Expenses
	  	74
			
	   14.9
	  	 Effect of Dispute Resolution Procedures
	  	74
			
	   14.10
	  	 Confidentiality
	  	74









					
	 Article 15 Credit and Collateral Requirements
	  	74
			
	   15.1
	  	 Posting of Collateral
	  	74
			
	   15.2
	  	 Material Adverse Changes
	  	74
			
	   15.3
	  	 Continuing Nature of Collateral Requirement
	  	75
			
	   15.4
	  	 Interest on Cash Used as Collateral
	  	75
			
	   15.5
	  	 Grant of Security Interest/Remedies
	  	75
			
	   15.6
	  	 Notice, Information
	  	76
			
	   15.7
	  	 Definitions.
	  	76
		
	 Article 16 Additional Terms
	  	78
			
	   16.1
	  	 Representations Warranties and Covenants.
	  	78
			
	   16.2
	  	 Assignment.
	  	81
			
	   16.3
	  	 Liability and Indemnification.
	  	82
			
	   16.4
	  	 Force Majeure
	  	83
			
	   16.5
	  	 Events of Default and Remedies.
	  	84
			
	   16.6
	  	 Confidential Information.
	  	86
			
	   16.7
	  	 Governmental Liabilities.
	  	87
			
	   16.8
	  	 Choice of Law
	  	88
			
	   16.9
	  	 Survival of Obligations
	  	88
			
	   16.10
	  	 Entire Agreement
	  	88
			
	   16.11
	  	 Cost Projections
	  	88
			
	   16.12
	  	 Unique Agreement
	  	89
			
	   16.13
	  	 No Transfer of Rights
	  	89
			
	   16.14
	  	 No Partnership
	  	89
			
	   16.15
	  	 Third Parties
	  	89
			
	   16.16
	  	 Waiver
	  	89
			
	   16.17
	  	 Time of Essence
	  	89
			
	   16.18
	  	 Headings
	  	90
			
	   16.19
	  	 Severability
	  	90
			
	   16.20
	  	 Counterparts
	  	90
			
	   16.21
	  	 No Public Announcement
	  	90
			
	   16.22
	  	 Notices
	  	90









					
	   16.23
	  	 No Dedication of the System
	  	91
			
	   16.24
	  	 Stranded Costs.
	  	91
			
	   16.25
	  	 Electric Peak Load and Energy Information to be provided by EMC
	  	92
			
	   16.26
	  	 Demand and Energy Charge and Rate Information to be Provided by Duke
	  	92
			
	   16.27
	  	 Further Assurances
	  	92
			
	   16.28
	  	 Applicable Laws and Regulations
	  	92
			
	     16.29
	  	 Equitable Relief
	  	92
			
	   16.30
	  	 PURPA Assistance
	  	92
			
	   16.31
	  	 SERC and NERC Data Reporting and Compliance Assistance
	  	92

  

			
		  	SCHEDULES
		
	1	  	Annual Production Capacity and Energy Rates
		
		  	ATTACHMENTS
		
	3-1	  	Calculation of the Excess Annual Capacity Charges in the Duke-Blue Ridge Agreement, Duke-Piedmont Agreement and Duke-Rutherford Agreement
		
	4-1	  	EMC’s Base Obligation and Fixed Forward Resource
		
	4-2	  	Calculation of Reduction to EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods
		
	4-3	  	Partial Requirements Resources
		
	7-2	  	Calculation of the Monthly Demand Charges in the Duke-Blue Ridge Agreement, Duke-Piedmont Agreement and Duke-Rutherford Agreement
		
	7-3	  	Calculation of Blue Ridge Allocated Share of Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit
		
	7-4	  	Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy
Credit
		
	7-5	  	Example showing Calculations of Blue Ridge Energy Purchase Amounts and Blue Ridge Energy Credit Amount









			
	7-6	  	Example showing Calculations of EMC Group Energy Purchase Amounts and EMC Group Energy Credit Amount
		
	7-7	  	Example showing the calculation of Monthly Billing Demand under Section 7.2.2.2
		
	7-8	  	Examples showing the calculation of Monthly Billing Demand under Section 7.3.2.2
		
	7-9	  	Demand Rate Adjustment Percentage and Annual Percentage
		
	7-10	  	Example of Demand Rate Adjustment Percentage and Annual Percentage
		
	8-1 I	  	Terms and Conditions for the Scheduling of Power Supplied by North Carolina Electric Membership Corporation to its Independent Members
		
	8-1 II	  	Terms and Conditions for Obtaining Transmission Services Adequate to Deliver from the Interface Points Established under the Wholesale Power Supply Agreement of NCEMC for Sales to its
Independent Members
		
	8-2	  	SEPA Policies








 PARTIAL REQUIREMENTS SERVICE AGREEMENT 
 BETWEEN 
 DUKE POWER COMPANY LLC 
 d/b/a DUKE ENERGY CAROLINAS, LLC 
 AND 
 BLUE RIDGE ELECTRIC MEMBERSHIP CORPORATION 
 THIS PARTIAL REQUIREMENTS SERVICE AGREEMENT, dated as of May 12, 2006, is entered into by and between Blue Ridge Electric Membership Corporation, a
corporation organized and existing under Article 2 of Chapter 117 of the General Statutes of North Carolina, together with any permitted successor or assignee (“EMC” or “Blue Ridge”), and Duke Power Company LLC, d/b/a Duke Energy
Carolinas, LLC, a limited liability company organized and existing under the laws of North Carolina, together with any permitted successor or assignee (“Duke”). Hereinafter, Duke and EMC are sometimes also referred to individually as a
“Party” or collectively as the “Parties.” 
 W  I  T  N  E  S  S  E  T  H 
 WHEREAS, Duke is engaged in the business of generating, transmitting, and distributing electric capacity and energy in portions of the States of North Carolina and South Carolina, and provides electric service to retail and wholesale
customers; and 
 WHEREAS, EMC is an electric membership corporation that provides retail electric service to its members in the State of
North Carolina, and is authorized to purchase electric energy at wholesale for resale; and 
 WHEREAS, EMC is a member of North Carolina
Electric Membership Corporation (“NCEMC”) and is a party to the WPSA; and 
 WHEREAS, EMC is a party to the SEPA Contract; and

 WHEREAS, EMC is a party to the PPA; and 
 WHEREAS, EMC has elected to arrange independently from NCEMC for its future requirements for electric capacity and energy in addition to those to which EMC has entitlements under existing contractual arrangements; and

 WHEREAS, EMC has reviewed its future needs for electric capacity and energy and Scheduling Agent Services and has determined that in order
for EMC to provide for a portion of EMC’s Native Load, EMC is willing to purchase electric capacity and energy from Duke and is also willing to purchase Scheduling Agent Services from Duke for the duration of, and subject to the terms of, this
Agreement; and 







 WHEREAS, Duke is willing to plan and provide for the electric capacity and energy requirements needed to
meet a portion of EMC’s Native Load and to provide Scheduling Agent Services for the duration of, and subject to the terms of, this Agreement; and 
 WHEREAS, Duke and EMC have agreed to the terms and conditions upon which the sale of electric capacity and energy and provision of Scheduling Agent Services may be conducted between the Parties. 
 NOW THEREFORE, in consideration of the premises and the mutual representations, warranties and covenants set forth in this Agreement, and for other good
and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties, each intending to be legally bound, hereby agree as follows: 
 Article 1 
 Definitions 
 1.1 Definitions. 
 Defined terms in this Agreement are capitalized. The defined terms used in this
Agreement have the following meanings: 
 “Accounting Requirements” shall have the meaning specified in Section 15.7.

 “Administrator” shall mean the RUS Administrator. 
 “Adverse Ruling” shall have the meaning specified in Section 3.1(c). 
 “Affiliate”
means, with respect to any person, any other person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such person. For purposes of this definition, “control” when used with respect to any
person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing. 
 “Agreement” means this Partial Requirements Service Agreement, together with each
Schedule and Attachment, each as amended from time to time. 
 “Ancillary Services” means any and all ancillary services provided
by the Transmission Provider in connection with any Transmission Service arranged by EMC for the delivery of electric energy provided under this Agreement from the Delivery Point. 
 “Annual Capacity Factor” shall have the meaning specified in Section 4.3.3.1. 
 “Annual Capacity Price” shall have the meaning specified in Section 3.5.2.3.1, 3.5.2.3.2 or 3.5.2.3.3, as applicable. 
  

 2 








 “Annual Capacity Quantity” shall have the meaning specified in Sections 3.5.2.3.1, 3.5.2.3.2 or
3.5.2.3.3, as applicable. 
 “Annual Percentage” shall be calculated as shown on Attachment 7-9. 
 “Annual Planning Period” means, the period (as of the Commencement Date either May through September or October through April) designated in
the then most recent Duke Annual Plan (or the successor thereto) that Duke files with the NCUC as the period during which Duke’s annual peak load is projected to occur; provided, that in the event that NCUC ceases to require Duke to file or
filing becomes voluntary and Duke ceases to file the Duke Annual Plan (or a successor thereto) with the NCUC, “Annual Planning Period” shall mean the period (either May through September or October through April) in which Duke’s
annual peak load is projected to occur under the generation planning criteria for Duke’s Generation System used by Duke to meet Duke’s Native Load. 
 “Assignment for Security” shall have the meaning specified in Section 16.2.2. 
 “Bankrupt” means that the Defaulting Party or any guarantor of such Party: 
 (i) is dissolved (other than
pursuant to a consolidation, amalgamation or merger); 
 (ii) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become due; 
 (iii) makes a general assignment,
arrangement or composition with or for the benefit of its creditors; 
 (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditor’s rights, or a petition is presented for its winding-up or liquidation; 
 (v) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); 
 (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or substantially all of its assets; 
 (vii) has a secured party
take possession of all or substantially all of its assets, or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all of its assets; 
 (viii) causes or is subject to any event with respect to it which, under the applicable Laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (i) to (vii) inclusive; or 
  

 3 








 (ix) takes any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts. 
 “Bankruptcy Code” means Title 11 of the United States Code or any successor
thereto. 
 “Base Annual Capacity Charge” means the charge set forth in Section 3.5.2.3.4. 
 “Baseload Resources” means the Partial Requirements Resources identified as Baseload Resources in Attachment 4-3. 
 “Billing Dispute Notice” shall have the meaning specified in Section 13.5. 
 “Billing Period” means the period beginning on the Commencement Date and ending on the last Day of the Month in which the Commencement Date
occurred, and each succeeding Month thereafter. 
 “Blue Ridge” shall have the meaning specified in the first paragraph of this
Agreement. 
 “Blue Ridge Allocated Share of Duke Total Hourly Energy Charge” shall be as calculated in Attachment 7-3.

 “Blue Ridge Allocated Share of EMC Group Total Hourly Energy Credit” shall be as calculated in Attachment 7-3.

 “Blue Ridge Allocated Share of Inter-EMC Energy Charge” shall be as calculated in Attachment 7-3. 
 “Blue Ridge Allocated Share of Inter-EMC Energy Credit” shall be as calculated in Attachment 7-3. 
 “Blue Ridge Energy Credit Amount” means the Blue Ridge Energy Credit Amount as determined in Section 7.1.5.9. 
 “Blue Ridge Energy Purchase Amount” means the Blue Ridge Energy Purchase Amount as determined in Section 7.1.5.9. 
 “Blue Ridge Hourly Reconciliation Credit” shall have the meaning specified in Section 7.1.5.12. 
 “Blue Ridge Monthly Reconciliation Credit” shall have the meaning specified in Section 7.1.5.12. 
 “Business Day” means any Day other than Saturday, Sunday, or any Day on which the Federal Reserve member banks are not open for business.

 “Catawba Nuclear Station” means that certain nuclear power plant located near Rock Hill in York County, South Carolina.

 “CFC” shall have the meaning specified in Section 15.7. 
  

 4 








 “Claiming Party” shall have the meaning specified in Section 16.4. 
 “Claims” means all third party claims or actions, threatened or filed, and whether groundless, false, or fraudulent, that directly or
indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys’ fees, and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed
prior to or after the termination of this Agreement. 
 “CoBank” shall have the meaning specified in Section 15.7. 

“Combined Cycle Resources” means the Partial Requirements Resources identified as Combined Cycle Resources in Attachment 4-3.

 “Commencement Date” shall have the meaning specified in Section 2.1.1. 
 “Commercially Reasonable Efforts” means efforts which are reasonably within the contemplation of the Parties at the Effective Date; which
require the performing Party that is acting in good faith to take action or expend funds reasonably in relation to the benefit to be obtained by the other Party; and that require a level of effort which would be devoted by an independent entity
reasonably in the electric utility industry in light of all of the relevant circumstances. 
 “Confidential Information” means any
documents, analyses, compilations, studies, or other materials prepared by a Party or its Representatives that contain or reflect either (a) any costs of Duke’s Generation System, including system average costs, System Incremental Costs,
Territorial Incremental Costs, and Territorial Decremental Costs, or (b) written or oral data or information that is privileged, confidential, or proprietary and is marked as “Confidential.” “Confidential Information” shall
also mean all subsequently prepared documents, analyses, compilations, studies, or other materials by a Party or its Representative that are derived from previously marked “Confidential” data or information. Notwithstanding the foregoing,
information shall not be deemed Confidential Information if it: 
 (i) is a matter of public knowledge at the time of its
disclosure or is thereafter published in or otherwise ascertainable from any source available to the public without breach of this Agreement, 
 (ii) constitutes information which is obtained from a third party (who or which is not an Affiliate of one of the Parties) other than by or as a result of unauthorized disclosure, or 
 (iii) prior to the time of disclosure had been independently developed by the receiving Party or its Affiliates not utilizing improper
means. 
 “Control Area” means an electric power system or combination of electric power systems to which a common automatic
generation control scheme is applied in order to match the power output of the generators within the electric power system and electric energy imported into the electric power system, with the load located within the electric power system.

  

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 “Cover Costs” shall have the meaning specified in Section 6.4. 
 “CP&L” means Carolina Power & Light Company (d/b/a Progress Energy Carolinas, Inc.). 
 “CPR” shall have the meaning specified in Section 14.1. 
 “Day” means a day, commencing at 00:00:00 Eastern Time of such calendar day and ending 23:59:59 Eastern Time of the same calendar day. 
 “Debt Service Coverage Ratio” shall have the meaning specified in Section 15.7. 
 “Defaulting Party” shall have the meaning specified in Section 16.5.1. 
 “Delivery Points” means any available points on the Transmission System where electric energy is delivered for Transmission Service.

 “Demand Rate Adjustment Percentage” shall be calculated as shown on Attachment 7-9. 
 “Demand Side Management Resource Programs” means the demand side management resource programs that Duke makes available to Duke’s Native
Load retail customers within the State of North Carolina under riders approved and on file with the NCUC, as such riders may be amended from time to time. 
 “Depreciation and Amortization Expense” shall have the meaning specified in Section 15.7. 
 “Dispatched Baseload Resources” means the Baseload Resources that Duke dispatches pursuant to Section 4.3.4. 
 “Dispatched Combined Cycle Resources” means the Combined Cycle Resources that Duke dispatches pursuant to Section 4.3.3. 
 “Disputed Amount” shall have the meaning specified in Section 13.5. 
 “Duke” shall have the meaning
specified in the first paragraph hereof, provided that for purposes of this Agreement “Duke” shall not include Duke Transmission and provided further, Duke intends to effectuate a name change to Duke Energy Carolinas, LLC and upon the
effectiveness of such name change, references to “Duke” shall mean Duke Energy Carolinas, LLC. 
 “Duke Annual Plan”
means the Annual Report Duke is required to file with the NCUC in accordance with NCUC Rule R8-60 or successor thereto. In the event Duke is no longer required to file the Annual Report with the NCUC or filing becomes voluntary, “Duke
Annual Plan” shall mean the generation planning criteria for Duke’s Generation System used by Duke to meet Duke’s Native Load. 
 “Duke-Blue Ridge Agreement” means this Agreement. 
  

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 “Duke Hourly Energy Charge” shall have the meaning specified in Section 7.1.5.1.

 “Duke Hourly Reconciliation Charge” shall have the meaning specified in Section 7.1.5.11. 
 “Duke Monthly Energy Charge” means, with respect to the period beginning on the Commencement Date and continuing through December 31,
2006, the charge set forth in Section 7.1.5.1; with respect to the period January 1, 2007, through December 31, 2010, the charge set forth in Section 7.2.3; and with respect to the period beginning January 1, 2011, and
continuing through the termination of this Agreement, the charge set forth in Section 7.3.3. 
 “Duke Monthly Reconciliation
Charge” shall have the meaning specified in Section 7.1.5.11. 
 “Duke Native Load” or “Duke’s Native
Load” means the electric capacity and energy demands imposed on Duke by its retail customers located within Duke’s Service Area, as such Service Area may be amended from time to time in accordance with Laws or pursuant to the requisite
approvals of the Governmental Authorities that have jurisdiction to regulate retail electric service within such Service Area, including by merger or acquisition, plus the demands of Duke’s wholesale power sales customers served under contracts
with a firmness of supply equal to such retail customers. 
 “Duke-Piedmont Agreement” means the Partial Requirements Service
Agreement between Duke and Piedmont Electric Membership Corporation dated as of May 12, 2006. 
 “Duke-Rutherford Agreement”
means the Partial Requirements Service Agreement between Duke and Rutherford Electric Membership Corporation, dated as of May 12, 2006. 
 “Duke Reconciliation Amount” shall have the meaning specified in Section 7.1.5.11. 
 “Duke’s Generation
Planning Practices” means the then-current generation planning practices of Duke that are reflected in the Duke Annual Plan. 
 “Duke’s Generation System” means Duke’s owned or leased electric generating facilities and purchased power resources the output of which are used to serve Duke’s Native Load located within the State of North
Carolina, as such system may be amended from time to time by any means including by merger or acquisition. 
 “Duke Schedule 1
Demands” shall have the meaning specified in Schedule 1, Section I.B. 
 “Duke Total Hourly Energy Charge” shall have the
meaning specified in Section 7.1.5.2. 
 “Duke Transmission” means Duke Electric Transmission, a division of Duke, or any
successor thereto. 
 “Eastern Time” means the time in effect in Charlotte, North Carolina, whether Eastern Standard Time or
Eastern Daylight Saving Time. 
  

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 “Effective Date” shall have the meaning specified in Section 2.1.1. 
 “EMC” or “Blue Ridge” shall have the meaning specified in the first paragraph of this Agreement. 
 “EMC Call Signal” shall have the meaning specified in Section 7.1.5.9. 
 “EMC Coincident Peak Demand” shall have the meaning specified in Section 3.5.2.3.5.1. 
 “EMC Contract Resources”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2010, shall
have the meaning specified in Section 5.1.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 5.2.1. 
 “EMC Demand Side Management Resource Programs” means the demand side management resource programs that EMC makes available to EMC’s Native
Load customers. 
 “EMC Excess Annual Capacity Quantity” shall have the meaning specified in Section 3.5.2.3.5.1. 

“EMC Group” means collectively Piedmont, Blue Ridge, and Rutherford. 
 “EMC Group Annual Capacity Quantity” means the sum of: (i) the Annual Capacity Quantity set forth in Section 3.5.2.3 of this
Agreement; (ii) the Annual Capacity Quantity set forth in Section 3.5.2.3 of the Duke-Piedmont Agreement; and (iii) the Annual Capacity Quantity set forth in Section 3.5.2.3 of the Duke-Rutherford Agreement. 
 “EMC Group Call Signal” shall have the meaning specified in Section 7.1.5.10. 
 “EMC Group Coincident Peak Demand” shall have the meaning specified in Section 3.5.2.3.5.3. 
 “EMC Group Combined Energy Credit Amount” means the sum of (i) the Blue Ridge Energy Credit Amount, (ii) the Piedmont Energy Credit
Amount, and (iii) the Rutherford Energy Credit Amount. 
 “EMC Group Combined Energy Purchase Amount” means the sum of
(i) the Blue Ridge Energy Purchase Amount, (ii) the Piedmont Energy Purchase Amount, and (iii) the Rutherford Energy Purchase Amount. 
 “EMC Group Combined Excess Annual Capacity Quantity” shall have the meaning specified in Section 3.5.2.3.5.2. 
 “EMC Group Combined Monthly Demand Quantity” shall have the meaning specified in Section 7.1.4.2. 
 “EMC Group Energy Credit Amount” shall have the meaning specified in Section 7.1.5.10. 
  

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 “EMC Group Energy Purchase Amount” shall have the meaning specified in Section 7.1.5.10.

 “EMC Group Excess Annual Capacity Quantity” shall have the meaning specified in Section 3.5.2.3.5.3. 
 “EMC Group Monthly Demand Quantity” shall have the meaning specified in Section 7.1.4.3. 
 “EMC Group Native Load” means the sum of (i) the EMC Native Load under this Agreement, (ii) the EMC Native Load under the
Duke-Piedmont Agreement, and (iii) the EMC Native Load under the Duke-Rutherford Agreement. 
 “EMC Group Put Signal” shall
have the meaning specified in Section 7.1.5.10. 
 “EMC Group Reconciliation Amount” shall have the meaning specified in
Section 7.1.5.12. 
 “EMC Group Total Hourly Energy Credit” shall have the meaning specified in Section 7.1.5.6.

 “EMC Group’s Base Obligation” means the sum of (i) EMC’s Base Obligation under Section 4.2.2 of this
Agreement, (ii) EMC’s Base Obligation under Section 4.2.2 of the Duke-Piedmont Agreement, and (iii) EMC’s Base Obligation under Section 4.2.2 of the Duke-Rutherford Agreement. 
 “EMC Hourly Demand” shall have the meaning specified in Section 3.5.2.3.5.1. 
 “EMC Hourly Energy Credit” shall have the meaning specified in Section 7.1.5.5. 
 “EMC Monthly Demand Quantity” shall have the meaning specified in Section 7.1.4.1 
 “EMC Monthly Energy Credit” means, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006,
the credit set forth in Section 7.1.5.5. 
 “EMC Native Load” or “EMC’s Native Load” means the electric
capacity and energy demands imposed on EMC by its retail customers located within EMC’s Service Area, excluding any such demands that constitute Non-Duke Control Area Load or Excepted Load, plus the electric capacity and energy demands, if any,
included as EMC Native Load in accordance with Section 4.4.1. 
 “EMC Peak Hour Billing Demand”, with respect to the period
January 1, 2007 through December 31, 2010, shall have the meaning specified in Section 7.2.2.2, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the
meaning specified in Section 7.3.2.2. 
 “EMC Put Signal” shall have the meaning specified in Section 7.1.5.9.

  

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 “EMC Scheduled Amount” shall have the meaning specified in Section 4.2.3. 
 “EMC’s Base Obligation” shall have the meaning specified in Section 4.2.2. 
 “Energy Cost” shall have the meaning specified in Section 4.3.3.3. 
 “Energy Imbalance Service” means the service provided under Schedule 4 of the Transmission Provider’s OATT. 
 “Equitable Defenses” means, with respect to a proceeding involving this Agreement, the discretion of a Governmental Authority to make or enter
an order of bankruptcy, insolvency, reorganization, or other ruling affecting creditors’ rights generally, or exercising other discretion committed to the court’s or agency’s equitable powers. 
 “Equity” shall have the meaning specified in Section 15.7. 
 “Event of Default” shall have the meaning specified in Section 16.5.1. 
 “Excepted
Load” shall have the meaning specified in Section 4.4. 
 “Excess Annual Amount” means the quantity specified in
Section 3.5.2.3.5. 
 “Excess Annual Capacity Charge” means the charge specified in Section 3.5.2.3.5. 
 “Excess Annual Capacity Price” shall have the meaning specified in Section 3.5.2.3.1, 3.5.2.3.2 or 3.5.2.3.3, as applicable. 

“Extension Term” shall have the meaning specified in Section 2.2.2. 
 “Federal Power Act” means the Federal Power Act, 16 U.S.C. §§791a-828c, as amended from time to time. 
 “FERC” means the Federal Energy Regulatory Commission or any successor agency that administers the Federal Power Act. 
 “FFR Supplemental Service” shall have the meaning specified in Sections 4.1 and 4.2. 
 “Firm Energy” means: electric energy which meets the Transmission Provider’s (or successor Transmission Provider’s) standards related
to character of service and firmness of supply, including standards that may require the designation of specific capacity sources, as such standards exist on the Effective Date or as they may be amended from time-to-time, such that EMC may:
(i) designate the PPA as a Network Resource or successor service designation under its Network Integration Transmission Service Agreement with Transmission Provider, or successor Transmission Provider; and (ii) satisfy applicable
requirements such that the Network Integration Transmission Service or successor service designation can be used to accept and deliver the electric energy pursuant to the highest firm transmission priority of such Transmission Provider; or
(iii) satisfy the standards of any successor Transmission Provider that might have the right to determine the standards for character of service and firmness of supply, 
  

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 including standards that may require the designation of specific capacity sources, under which EMC may designate the PPA,
such that the requirements of the highest firm transmission priority are met under its Network Integration Transmission Service Agreement (or as the nearest equivalent thereto remains available to EMC under the successor Transmission Provider’s
requirements). 
 “Firm Sales” means wholesale electric sales other than Non-Firm Sales. 
 “Fitch Rating” means Fitch, Inc., a unit of Fimalac, S.A. 
 “Fixed Forward Resource” or “FFR Resource” means EMC’s contractual entitlements to electric capacity and energy under the PPA. 
 “Force Majeure” shall have the meaning specified in Section 16.4. 
 “Fuel Rate”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning specified in
Section 7.2.3.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.3.1. 
 “Government” means the United States government. 
 “Governmental Authority” means any federal, state, local or other governmental, regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature,
rulemaking board, court, tribunal, arbitrating body, government-owned corporation or other governmental authority or department thereof. 
 “Governmental Charges” means all taxes, fees, assessments and other charges imposed by any Governmental Authority. 
 “Hour” means one of the twenty-four (24) clock hours in a Day. 
 “Hourly Fuel Charge”, with respect to the
period January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.3.1, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the
meaning specified in Section 7.3.3.1. 
 “Hourly Inter-EMC Transfer Reconciliation Charge” shall have the meaning specified in
Section 7.1.5.13. 
 “Hourly Variable O&M Charge”, with respect to the period January 1, 2007, through
December 31, 2010, shall have the meaning specified in Section 7.2.3.2, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the meaning specified in
Section 7.3.3.2. 
 “Initial Term” shall have the meaning specified in Section 2.2.1. 
 “Impasse Notice” shall have the meaning specified in Section 14.2. 
  

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 “Interest Expense” shall have the meaning specified in Section 15.7. 
 “Interest Rate” means either (i) the Prime Rate plus two (2%) percent, or (ii) the maximum lawful rate permitted by applicable
Law, whichever is less. 
 “Interval” shall have the meaning specified in Sections 7.1.5.9 and 7.1.5.10, as applicable. 

“ITC” means an independent transmission company. 
 “ISO” means an independent system operator. 
 “kWh” means kilowatt-hour, a unit of
electric energy. 
 “kW” means kilowatt. 
 “Law” means any law, rule, regulation, order, writ, judgment, decree, or other legal or regulatory determination by a court, regulatory agency, or other Governmental Authority of competent jurisdiction.

 “Legal Proceeding” means any suit, hearing, or proceeding by or before any court or any Governmental Authority. 
 “Light Load Periods” means any Hour during which EMC’s Base Obligation is reduced because certain of its entitlements to electric capacity
and energy under the WPSA are reduced as a result of NCEMC’s Native Load in either of the CP&L east or west Control Areas or Duke Control Area being insufficient to permit NCEMC to have access to its full contractual entitlement to electric
capacity and energy from certain generation or purchased power resources. 
 (i) For each Hour beginning with the Commencement
Date and continuing through December 31, 2010, or any portion thereof in which this Agreement is in effect, Light Load Periods in the CP&L east and west Control Areas, only occur when NCEMC’s Native Load in such CP&L east and west
Control Area is less than the contractual amount specified in the Service Obligation Resources (“SORs”). The amount of any reduction in NCEMC’s entitlement to electric capacity and energy under the SORs is allocated to EMC in
accordance with the WPSA. In the Duke Control Area, Light Load Periods only occur when a generating unit at either the Catawba Nuclear Station or the McGuire Nuclear Station is off-line or de-rated and NCEMC’s Native Load in the Duke Control
Area is less than 623.5 MWs. The amount of any reduction in NCEMC’s entitlement to electric capacity and energy is allocated to EMC in accordance with the WPSA. 
 (ii) For each Hour beginning January 1, 2011, and continuing through the termination of this Agreement, Light Load Periods only occur
when a generating unit at either the Catawba Nuclear Station or the McGuire Nuclear Station is off-line or de-rated and NCEMC’s Native Load in the Duke Control Area is less than 623.5 MWs. The amount of any reduction in NCEMC’s entitlement
to electric capacity and energy is allocated to EMC in accordance with the WPSA. 
  

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 “Material Adverse Change” or “MAC” shall have the meaning specified in
Section 15.2. 
 “Material Adverse Ruling” shall have the meaning specified in Section 2.3.2.2(c). 
 “Material Adverse Ruling Termination Date” shall have the meaning specified in Section 2.3.2.2. 
 “Maximum Demand Hour” shall have the meaning specified in Section 7.1.4.3. 
 “McGuire Nuclear Station” means that certain nuclear plant located in Huntersville, North Carolina. 
 “Month” means a calendar month, commencing at one (1) minute prior to 12:01 a.m. Eastern Time on one of January 1, February 1,
March 1, April 1, May 1, June 1, July 1, August 1, September 1, October 1, November 1 or December 1 and ending at one (1) minute after 11:59 Eastern Time of the succeeding January 31,
February 28 or 29 (during a leap year), March 31, April 30, May 31, June 30, July 31, August 31, September 30, October 31, November 30 or December 31. 
 “Monthly” shall have a meaning correlative to that of Month. 
 “Monthly Billing Demand”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.2.2, and with respect to the period beginning
January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in Section 7.3.2.2. 
 “Monthly Demand Amount” means the quantity specified in Section 7.1.4. 
 “Monthly Demand Charge” means,
with respect to the period beginning on the Commencement Date and continuing through December 31, 2006, the charge set forth in Section 7.1.4; with respect to the period January 1, 2007, through December 31, 2010, the charge set
forth in Section 7.2.2; and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, the charge set forth in Section 7.3.2. 
 “Monthly Demand Rate”, with respect to the period beginning on the Commencement Date and continuing through December 31, 2006, shall have
the meaning specified in Section 7.1.4; with respect to the period January 1, 2007 through August 31, 2008, shall have the meaning specified in Section 7.2.2.1, except as provided in Sections 3.5.2.3.1, 3.5.2.3.2 and 3.5.2.3.3;
with respect to the period September 1, 2008, through December 31, 2010, shall have the meaning specified in Section 7.2.2.1; and with respect to the period beginning January 1, 2011, and continuing through the termination of
this Agreement, shall have the meaning specified in Section 7.3.2.1. 
 “Monthly Fuel Charge”, with respect to the period
January 1, 2007, through December 31, 2010, shall have the meaning specified in Section 7.2.3.1, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the
meaning specified in Section 7.3.3.1. 
  

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 “Monthly Inter-EMC Energy Transfer Reconciliation Charge” shall have the meaning specified in
Section 7.1.5.13. 
 “Monthly Replacement Energy Charge” shall have the meaning specified in Section 4.2.4. 

“Monthly Reserve Capacity Charge” shall have the meaning specified in Section 7.4. 
 “Monthly Scheduling Agent Service Charge” shall have the meaning specified in Section 7.1.6. 
 “Monthly Variable O&M Charge”, with respect to the period January 1, 2007, through December 31, 2010, shall have the meaning
specified in Section 7.2.3.2, and with respect to the period beginning January 1, 2011, and ending on the termination of this Agreement, shall have the meaning specified in Section 7.3.3.2. 
 “Moody’s” means Moody’s Investors Services, Inc. 
 “MSCG” means Morgan Stanley Capital Group Inc. 
 “MWh” means megawatt-hour, a unit of
electric energy. 
 “MW” means megawatt. 
 “NCEMC” shall have the meaning specified in the Recitals of this Agreement. 
 “NCEMC Native
Load” means the electric and energy demands imposed on NCEMC by its members for resale to such members’ retail customers, and shall include wholesale sales of electric capacity and energy by Blue Ridge to New River except wholesale sales
of electric capacity and energy made in accordance with Section 4.4.1 of this Agreement. 
 “NCEMC Policies” shall have the
meaning specified in Section 8.2. 
 “NCUC” means the North Carolina Utilities Commission or any successor agency with
jurisdiction to regulate retail electric service in the State of North Carolina. 
 “Negotiation Period” shall have the meaning
specified in Section 14.2. 
 “NERC” means the North American Electric Reliability Council. 
 “Network Integration Transmission Service” means Network Integration Transmission Service provided under the OATT. 
 “Network Integration Transmission Service Agreement” or “NITSA” means that certain agreement for Network Integration Transmission
Service, as amended from time to time, executed by EMC and Transmission Provider. 
  

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 “Network Operating Agreement” or “NOA” means that certain agreement, as amended from
time to time, executed by EMC and Transmission Provider in conjunction with the Network Integration Transmission Service Agreement. 
 “Network Resource” shall have the meaning specified in the OATT. 
 “Neutral Auditors” shall have the meaning
specified in Section 2.3.2.2.2. 
 “New River” means Appalachian State University d/b/a New River Light & Power
Company or any successor thereto. 
 “Nomination” means the notification provided by MSCG to the Scheduling Agent of the sources
and specific amounts of electric energy under the WPSA and SEPA Contract that MSCG desires EMC to make available in accordance with the terms and conditions of the PPA. 
 “Non-Claiming Party” shall have the meaning specified in Section 16.4. 
 “Non-Conforming
Load” shall have the meaning specified in Section 4.4. 
 “Non-Defaulting Party” shall have the meaning specified in
Section 16.5.1. 
 “Non-Duke Control Area Load” means load that is located in a Control Area other than the Duke Control Area,
including load that is physically located in the Duke Control Area but telemetered for Control Area purposes to another Control Area. 
 “Non-Firm Sales” means wholesale electric sales for which the delivery of electric energy may be interrupted, curtailed or terminated for any reason without any liability to Duke (other than charges imposed for changes to
schedules for the sale of electric energy). 
 “Notice of Termination” means a written notice to terminate this Agreement under
Sections 2.2 or 2.3 that conforms to the requirements set forth in Section 2.3.3. 
 “OATT” means the Open Access
Transmission Tariff of the Transmission Provider on file with FERC, or the successor transmission tariff (including the Open Access Transmission Tariff of an RTO, ITC or ISO that is applicable to the Transmission System), as either may be amended
from time to time. 
 “Operating Committee” shall have the meaning specified in Section 10.1. 
 “Option Notice” shall have the meaning specified in Section 3.5.2.3. 
 “Option Period” shall have the meaning specified in Section 3.5.2.3. 
 “Original Notice” shall have the meaning specified in Section 14.2. 
 “Partial Requirements Agreements” means the Duke-Rutherford Agreement, the Duke-Blue Ridge Agreement, and the Duke-Piedmont Agreement.

  

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 “Partial Requirements Resources” means EMC’s contractual entitlements to electric capacity
and energy used to serve EMC’s Native Load during the period commencing January 1, 2011, and continuing through the termination of this Agreement, as specified in Section 5.2. 
 “Partial Requirements Service” shall have the meaning specified in Section 4.3. 
 “Party” and “Parties” shall have the meanings specified in the preamble of this Agreement. 
 “Patronage Capital or Margins” shall have the meaning specified in Section 15.7. 
 “Piedmont” means Piedmont Electric Membership Corporation. 
 “Piedmont Energy Credit Amount” means the Piedmont Energy Credit Amount as determined in Section 7.1.5.9 of the Duke-Piedmont Agreement. 
 “Piedmont Energy Purchase Amount” means the Piedmont Energy Purchase Amount as determined in Section 7.1.5.9 of the Duke-Piedmont
Agreement. 
 “Point of Interconnection” means the point of interconnection between the Transmission Provider’s transmission
and distribution facilities and EMC’s system. 
 “PPA” means that certain Power Purchase Agreement by and between EMC and
Morgan Stanley Capital Group Inc. dated as of December 11, 2003, as amended from time to time. 
 “Prime Rate” means, for any
date, the per annum rate of interest announced from time to time by Citibank, N.A. (or a suitable replacement agreed upon by the Parties) as its “prime” rate for commercial loans, effective on the date payment is due as established from
time to time by such bank. 
 “Principal and Interest Expense” shall have the meaning specified in Section 15.7. 

“Prudent Utility Practice” means any of the practices, methods, and acts engaged in or approved by a significant portion of the electric
utility industry during the relevant time period, or any of the practices, methods, and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business practices, reliability, safety, and expedition. Prudent Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but
rather to be acceptable practices, methods, or acts generally accepted in the electric utility industry. 
 “PSCSC” means the
Public Service Commission of South Carolina, or any successor agency with jurisdiction to regulate retail electric service within the State of South Carolina. 
 “Purchasing - Selling Entity” means that entity designated to the Transmission Provider by EMC who, upon the effectiveness of such designation, is eligible to purchase and sell energy and/or capacity and
reserve transmission services on behalf of EMC. 
  

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 “PURPA” means the Public Utilities Regulatory Policies Act, 16 U.S.C. §2601 et seq.
(2005), as amended, including amendments included in the Energy Policy Act of 2005. 
 “PURPA Resource” shall have the meaning
specified in Section 5.4.1. 
 “Qualifying Facility” means a facility that meets the standards under 18 C.F.R. Part 292,
Subpart B, as amended from time to time. 
 “Reconciliation Allocation Factor” shall be equal to the Reconciliation Allocation
Number divided by the sum of the Reconciliation Allocation Numbers as set forth in this Agreement and in the Duke-Piedmont Agreement, and Duke-Rutherford Agreement. 
 “Reconciliation Allocation Number” shall be equal to 39.85. 
 “Replacement Energy” shall
have the meaning specified in Section 4.2.4. 
 “Representatives” means, with respect to a Party, such Party’s officers,
directors, employees, advisors, and representatives and such Party’s Affiliates and their respective officers, directors, employees, advisors, and representatives. 
 “Resolution Period” shall have the meaning specified in Section 2.3.2.2.2. 
 “Restricted
Rentals” shall have the meaning specified in Section 15.7. 
 “RTO” means a regional transmission organization as that
term is defined by FERC. 
 “RUS” means the Rural Utilities Service of the United States Department of Agriculture or any agency
succeeding to the functions of RUS. 
 “Rutherford” means Rutherford Electric Membership Corporation. 
 “Rutherford Energy Credit Amount” means the Rutherford Energy Credit Amount as determined in Section 7.1.5.9 of the Duke-Rutherford
Agreement. 
 “Rutherford Energy Purchase Amount” means the Rutherford Energy Purchase Amount as determined in Section 7.1.5.9
of the Duke-Rutherford Agreement. 
 “Scheduling Agent” means Duke acting as agent on behalf of EMC to perform Scheduling Agent
Services. 
 “Scheduling Agent Services” shall have the meaning specified in Article 8. 
 “Scheduling Services Agreement” means that certain Scheduling Services Agreement by and between EMC and MSCG dated as of December 11,
2003, as amended. 
 “Scheduling Shortfall” shall have the meaning specified in Section 4.2.4. 
 “Scheduling Shortfall Amount” shall have the meaning specified in Section 4.2.4. 
  

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 “Selection Date” shall have the meaning specified in Section 14.5. 
 “SEPA” means the Southeastern Power Administration. 
 “SEPA Contract” means the Contract Executed by Blue Ridge and the United States of America acting by and through the Southeastern Power Administration dated as of May 2, 1997, as amended from time to
time. The Parties agree that, for the purposes of this Agreement, the SEPA Contract as in effect on the date hereof is attached to a letter from EMC to Duke dated May 12, 2006. 
 “SEPA Entitlement” shall mean EMC’s entitlement to electric capacity and energy under the SEPA Contract. 
 “SEPA Policies” shall have the meaning specified in Section 8.2. 
 “SERC” means the Southeastern Reliability Council. 
 “Service Area” means the area within a state or states within which an electric utility provides retail electric service as determined under the applicable Laws of such state or states. 
 “Service Obligation Resources” or “SORs” means those generation and purchased capacity resources used by NCEMC to serve NCEMC’s
members for resale to such members’ retail customers, as such resources are specified in the Power Sales Agreement Between Carolina Power & Light Company and North Carolina Electric Membership Corporation dated as of November 2,
1998, as amended. 
 “Short Term Interest Expense” shall have the meaning specified in Section 15.7. 
 “S&P” or “Standard & Poor’s” means Standard & Poor’s Rating Group, a division of McGraw Hill, Inc.

 “Standard Arbitration Process” shall mean the arbitration process described in Section 14.6.1. 
 “Streamlined Arbitration Process” shall mean the arbitration process described in Section 14.6.2. 
 “Submission” or “Submissions” shall have the meaning specified in Section 14.6.1(5). 
 “Substitute Energy” shall have the meaning specified in Section 6.4. 
 “Substitute Energy Costs” shall have the meaning specified in Section 6.5. 
 “Summer Period” means the period (as of the Commencement Date May 1 – September 30) designated as the summer period in the then
most recent Duke Annual Plan. 
 “System Incremental Cost” means the incremental expense, measured in dollars per megawatt hour
($/MWh), incurred by Duke to supply the next megawatt-hour (MWh) of electric energy, after serving Duke’s Native Load customers’ requirements, and all other opportunity 
  

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 sales, during any Hour in which electric energy is purchased by EMC. System Incremental Cost shall include the
replacement cost of fuel, fuel handling expense, variable operating and maintenance expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs
incurred due to minimum runtimes or loading levels), and other appropriate electric energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined
prior to the Hour. 
 “Term” means the term of this Agreement determined in accordance with Section 2.2.3. 
 “Termination Assistance Service” shall have the meaning specified in Section 8.10. 
 “Territorial Decremental Cost” means the decrease in Duke’s expenses, measured in dollars per megawatt hour ($/MWh), in supplying
Duke’s Native Load customers’ requirements due to Duke’s purchase of electric energy supplied by EMC. Territorial Decremental Cost shall include the reduction in fuel expense, fuel handling expense, variable operating and maintenance
expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs incurred due to minimum runtimes or loading levels), and other appropriate
energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined prior to the Hour. 
 “Territorial Incremental Cost” means the incremental expense, measured in dollars per megawatt hour ($/MWh), incurred by Duke to supply the
next megawatt-hour (MWh) of electric energy after serving Duke’s Native Load customers’ requirements, during any Hour in which electric energy is purchased by EMC. Territorial Incremental Cost shall include the replacement cost of fuel,
fuel handling expense, variable operating and maintenance expense, emissions allowance replacement costs and other environmental compliance costs, the cost of starting and operating any generating units (including costs incurred due to minimum
runtimes or loading levels), and other appropriate electric energy-related costs, including electric energy purchases from others, interchange power costs, and allocations of unit commitment costs, if any, all as determined prior to the Hour.

 “Times Interest Earned Ratio” or “TIER” shall have the meaning specified in Section 15.7. 
 “Transmission Provider” means any entity transmitting electric energy provided by Duke under this Agreement to the EMC distribution system, and
shall include any ISO, RTO, ITC, or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider. 
 “Transmission Service” means the service provided by a Transmission Provider to EMC pursuant to which electric energy provided under this Agreement is delivered from the Delivery Point to EMC’s
distribution system. 
 “Transmission System” means the electric transmission system owned or leased and operated by Duke
Transmission. 
  

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 “Variable O&M Rate”, with respect to the period January 1, 2007, through
December 31, 2010, shall have the meaning specified in Section 7.2.3.2, and with respect to the period beginning January 1, 2011, and continuing through the termination of this Agreement, shall have the meaning specified in
Section 7.3.3.2. 
 “Weekday” means Monday, Tuesday, Wednesday, Thursday or Friday, excluding days recognized as holidays by
NERC. 
 “Weekend Day” means Saturday or Sunday, and all days recognized as holidays by NERC. 
 “Winter Period” means the period (as of the Commencement Date October 1 – April 30) designated as the winter period in the then
most recent Duke Power Annual Plan. 
 “WPSA” means the Wholesale Power Supply Agreement by and between North Carolina Electric
Membership Corporation and EMC dated as of January 1, 2004, as amended from time to time. The Parties agree that, for the purposes of this Agreement, the WPSA as in effect on the date hereof is attached to a letter from EMC to Duke dated
May 12, 2006. 
 “Year” means a calendar year. 
 1.2 Interpretation. In this Agreement, unless the context otherwise requires, the singular shall include the plural and any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement shall, unless otherwise expressly specified, refer to this Agreement as a whole and not to any
particular provision of this Agreement. Whenever the terms “include,” “includes,” or “including” are used herein in connection with a listing of items included within a prior reference, such listing shall be interpreted
to be illustrative only, and shall not be interpreted as a limitation on or exclusive listing of the items included within the prior reference. Any reference in this Agreement to “Section,” “Article,” “Schedule,” or
“Attachment” shall be references to this Agreement unless otherwise stated, and all such Sections, Articles, Schedules, and Attachments shall be incorporated in this Agreement by reference. In the event that any index or publication
referenced in this Agreement ceases to be published, each such reference shall be deemed a reference to a successor or alternate index or publication reasonably agreed to by the Parties. Unless specified otherwise, a reference to a given agreement
or instrument, and all schedules and attachments thereto, shall be a reference to that agreement or instrument as modified, amended, supplemented and restated, and in effect from time to time. Unless otherwise stated, any reference in this Agreement
to any entity shall include its permitted successors and assignees, and in the case of any Governmental Authority, any person succeeding to its functions and capacities. All dollar amounts referred to in this Agreement shall be in U.S. currency.

 1.3 Construction. The Parties acknowledge that each was actively involved in the negotiation and drafting of this Agreement and that no Law or rule
of construction shall be raised or used in which the provisions of this Agreement shall be construed in favor of or against either Party because one is deemed to be the author thereof. 
  

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 Article 2 
 Term 
  

	2.1	Effectiveness. 

 2.1.1 Effectiveness of this
Agreement. This Agreement shall become effective upon execution and delivery by the Parties (“Effective Date”) provided that obligations of the Parties to purchase and sell electric capacity and energy and to provide Scheduling Agent
Services shall commence, on the later to occur of (a) September 1, 2006 or (b) the date upon which service commences in accordance with Section 3.5.1.2 or Section 3.5.2.1 (the “Commencement Date”), provided that
the Commencement Date shall be the first Day of the Month. 
 2.1.2 Governmental Approval. 
 2.1.2.1 Duke shall take appropriate steps within five (5) Business Days from the Effective Date to file this Agreement, together with supporting
documents, with FERC pursuant to the requirements of the Federal Power Act. Thereafter, Duke shall diligently pursue acceptance of this Agreement as a rate schedule by FERC and shall keep EMC informed of the progress in such regard. If requested by
Duke, EMC shall undertake Commercially Reasonable Efforts to cooperate with and assist Duke in Duke’s efforts to make this Agreement effective and, upon Duke’s request, shall make a timely submittal at FERC affirmatively supporting the
acceptance or approval of this Agreement by FERC without modification, suspension, investigation, or other condition. 
 2.1.2.2 EMC shall
take appropriate steps within five (5) Business Days from the Effective Date to submit this Agreement, together with supporting documents, to the RUS. Thereafter, EMC shall diligently pursue approval of this Agreement by the RUS and shall keep
Duke informed of the progress in such regard. If requested by EMC, Duke shall undertake Commercially Reasonable Efforts to cooperate with and assist EMC in EMC’s efforts to obtain RUS approval of this Agreement and, upon EMC’s request,
shall make a timely submittal at RUS affirmatively supporting the approval of this Agreement without modification or condition. 
  

	2.2	Term. 

 2.2.1 Initial Term. The initial term
of this Agreement shall commence on the Effective Date and shall continue through 23:59:59, Eastern Time, on December 31, 2021 (“Initial Term”) unless this Agreement is terminated prior to December 31, 2021, in accordance with
Sections 2.3.2, 3.5.2.2 or 3.5.3. 
 2.2.2 Extension. Unless terminated in accordance with Sections 2.3, 3.5.2.2 or 3.5.3,
the Term of this Agreement shall automatically renew and extend for an additional term of ten (10) Years (each such extension being an “Extension Term”), so that unless either Party gives Notice of Termination in accordance with
Section 2.3, the Term of this Agreement shall extend through 23:59:59, Eastern Time, on December 31, 2031. Likewise, unless either Party gives Notice of Termination in accordance with Section 2.3, the Term of this Agreement shall
extend through 23:59:59 Eastern Time on December 31, 2041; and so forth thereafter in ten (10) Year increments. 
  

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 2.2.3 Term. The Initial Term of this Agreement together with each Extension Term, if any, shall
constitute the “Term” of this Agreement during which Duke shall provide either FFR Supplemental Service or Partial Requirements Service, as applicable, and Scheduling Agent Services to EMC. 
  

	2.3	Termination. 

 2.3.1 Termination of the Initial
or an Extension Term. Either Party may terminate this Agreement at the end of the Initial Term by giving Notice of Termination to the other Party as specified in Section 2.3.3 at least three (3) Years prior to the end of the Initial
Term, so that such notice is given no later than December 31, 2018. If the Term is extended beyond the Initial Term pursuant to Section 2.2.2, either Party may terminate this Agreement at the end of the then-current Extension Term by
providing Notice of Termination to the other Party as specified in Section 2.3.3 at least three (3) Years prior to the end of such Extension Term, so that such notice is given no later than December 31, 2028, for the Extension Term
ending December 31, 2031, and so forth thereafter. 
 2.3.2 Early Termination. Notwithstanding the provisions of
Section 2.3.1, early termination of this Agreement, including any Extension Term, shall only be permitted in the six (6) circumstances set out in Sections 2.3.2.1, 2.3.2.2, 2.3.2.3, 2.3.2.4, 2.3.2.5 and 2.3.2.6. 
 2.3.2.1 Early Termination for an Event of Default. In the event that an Event of Default occurs, and the Defaulting Party fails to cure such Event
of Default within the time period(s) specified in Section 16.5.3, the Non-Defaulting Party may terminate this Agreement upon giving thirty (30) Days’ Notice of Termination, provided that the termination date shall be the last Day of a
Month. 
 2.3.2.2 Early Termination for a Material Adverse Ruling. In the event that a Material Adverse Ruling occurs, the Party
affected by such Material Adverse Ruling may, within twenty (20) Days after such Material Adverse Ruling occurs, give the other Party Notice of Termination, in accordance with Section 2.3.3, of its intent to terminate this Agreement
effective on 23:59:59 of the last Day of the Month that is twenty-four (24) Months after the Month in which the Notice of Termination is given. Such termination date shall be referred to herein as the “Material Adverse Ruling Termination
Date.” If a Party fails to give Notice of Termination within twenty (20) Days after a Material Adverse Ruling occurs, it shall have permanently waived its right to terminate this Agreement due to such Material Adverse Ruling pursuant to
this Section 2.3.2.2. Termination pursuant to this Section 2.3.2.2 shall be subject to the following procedures: 
 (a) During the ninety (90) Days immediately following the giving of the Notice of Termination, the Parties shall attempt to negotiate amendments to this Agreement that would permit the Parties to restore the equivalent value of the
economic bargain contemplated by this Agreement absent the Material Adverse Ruling. If the Parties reach agreement, such amendments will not become effective unless, within one 
  

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 hundred eighty (180) Days of the date that the Notice of Termination is given, the Parties have
obtained the necessary approvals of Governmental Authorities to enable the amendments to become effective without change, condition or modification. In the event that the Parties fail (i) to reach agreement on such amendments, or (ii) to
obtain the necessary approvals of Governmental Authorities, this Agreement shall terminate on the Material Adverse Ruling Termination Date, subject to the provisions of Section 2.3.2.2(b) and 2.3.2.2.2. 
 (b) In the event that the Parties are unable to reach agreement on the amendments provided in Section 2.3.2.2(a), either Party may,
no later than ninety (90) Days after the date that the Notice of Termination is given (or, if earlier, the date that the Parties mutually agree that they are unable to reach agreement on such amendments), give notice to the other Party of its
desire to extend this Agreement for a period of up to twelve (12) Months beyond the Material Adverse Ruling Termination Date. Such extension will be subject to the Parties (i) having first reached agreement upon the rates, terms and
conditions of service for such twelve (12) Month period within one hundred twenty (120) Days of the date that the Notice of Termination is given and executing such agreement within such one hundred twenty (120) Day period, and
(ii) having received from Governmental Authorities the necessary approvals for such rates, terms and conditions without change, condition or modification within one hundred eighty (180) Days of the date that the Notice of Termination is
given. 
 (c) A “Material Adverse Ruling” is an order or action by a Governmental Authority or a change in Law that
(i) either (A) modifies the rates, terms, or conditions of this Agreement, (B) disallows the recovery from EMC of costs that are included in this Agreement, (C) for retail ratemaking or regulatory accounting and reporting
purposes, disallows costs related to this Agreement, including any disallowance of Duke’s costs related to investments in generating facilities or binding contracts to purchase electric capacity and energy to provide service to EMC under this
Agreement, or (D) for retail ratemaking or regulatory accounting and reporting purposes, assigns, allocates or makes pro forma adjustments with respect to the revenues or costs related to this Agreement, and (ii) adversely affects the
relative economic position of either Party in a material way. For purposes of this definition only, 
 (1)
“material” for Duke means that the effect of the order or action by the Governmental Authority or change in Law is reasonably projected to decrease Duke’s net revenues under this Agreement, or, in the case of a disallowance,
assignment, allocation, or pro forma adjustment of revenues or costs for retail ratemaking or regulatory accounting or reporting purposes, either (i) decrease Duke’s net costs or increase Duke’s net revenues assigned or allocated to
Duke’s retail customer classes, or (ii) increase Duke’s net costs or decrease Duke’s net revenues assigned or allocated to Duke’s wholesale customer class, by an aggregate amount equal to five percent (5%) or more of
the total revenues to be paid by EMC to Duke under this Agreement over the then-remaining Term; 
 (2) “material”
for EMC means that the effect of the order or action by the Governmental Authority or change in Law is reasonably projected to increase 
  

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 EMC’s net costs under this Agreement by an amount equal to five percent (5%) or more of the
total revenues to be paid by EMC to Duke under this Agreement over the then-remaining Term; 
 (3) an increase in a
Party’s net costs is the increase in the Party’s costs as a result of the order or action by the Governmental Authority or change in Law, less the increase (if any) in the Party’s revenues as a result of the Material Adverse Ruling;
and 
 (4) a decrease in a Party’s net revenues is the decrease in the Party’s revenues as a result of the order or
action by the Governmental Authority or change in Law, less the decrease (if any) in the Party’s costs as a result of the Material Adverse Ruling. 
 (d) The foregoing amounts shall be calculated on a nominal rather than an inflation adjusted or present value basis. Without limitation of the foregoing, EMC acknowledges that, for retail ratemaking and regulatory
accounting and reporting purposes, Duke shall calculate the costs of the electric capacity and energy used to serve EMC under this Agreement on a system average cost basis beginning January 1, 2007. EMC agrees that if the amount of costs that
the NCUC or the PSCSC in effect assigns or allocates to, or requires Duke to assign or allocate to, this Agreement for ratemaking or regulatory accounting and reporting purposes exceeds Duke’s system average costs, such action shall constitute
a Material Adverse Ruling if the five percent (5%) materiality standard set forth above is met. 
 2.3.2.2.1 A change in Duke’s
net revenues or EMC’s net costs that results from a change in this Agreement that is permitted under Section 12.3, shall not constitute a Material Adverse Ruling regardless of the impact of such change on either Party’s net costs or net
revenues. 
 2.3.2.2.2 In the event that either Party believes that a Material Adverse Ruling has occurred, the Party affected by such
Material Adverse Ruling shall provide the other Party a good faith calculation together with information supporting the calculation of the projected effect of the Material Adverse Ruling and include such calculation and the cost information
supporting the calculation with the Notice of Termination. If the non-terminating Party notifies the other Party, within twenty (20) Days following the date that such Notice of Termination is given, of its good faith objection to the
calculation or the cost information supporting the calculation of the projected effect of the Material Adverse Ruling, then the Parties shall, within thirty (30) Days following the date that such Notice of Termination is given (the
“Resolution Period”), attempt to resolve their differences with respect to the calculation or the cost information supporting such calculation. If, at the conclusion of the Resolution Period, the Parties are not in agreement with respect
to the calculation or cost information supporting the calculation, then PriceWaterhouseCoopers, or such other nationally recognized accounting firm that is not then the independent auditor for either Party or any of its Affiliates or predecessors
and is selected by mutual agreement of the Parties (the “Neutral Auditors”), shall be engaged within ten (10) Days after the expiration of the Resolution Period to review the calculation and the cost information supporting the
calculation and to make an independent determination as to 
  

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 whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as
applicable. If the Neutral Auditors require any additional information, records, or internal analysis to make a determination as to whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2),
as applicable, the Party in possession of such information, records or internal analysis will provide it to the Neutral Auditors. Each Party agrees to execute, if requested by the Neutral Auditors, a reasonable engagement letter, including customary
indemnities. All fees and expenses relating to the work to be performed by the Neutral Auditors shall be borne one-half (1/2) by the terminating Party and one-half (1/2) by the non-terminating Party. The Neutral Auditors shall act as an
arbitrator to determine, based upon its independent review, whether the Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable. The Neutral Auditors’ determination shall be made
within thirty (30) Days of their selection, shall be set forth in a written statement delivered to both Parties and shall be final, binding and conclusive. If the Neutral Auditors’ determine the materiality standard set forth in
Section 2.3.2.2(c)(1) or (c)(2), as applicable, is not met, the Notice of Termination shall be null and void. If the Neutral Auditors’ determine the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, is
met, the Notice of Termination shall be effective in accordance with its terms. The initiation of the dispute resolution process described in this Section 2.3.2.2.2, shall not toll or otherwise delay running of the twenty-four (24) Month
time period set forth in the Notice of Termination, unless the Neutral Auditors’ find that the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, is not met. The procedure set forth in this
Section 2.3.2.2.2 shall be the exclusive means for the Parties to resolve any dispute as to whether a Material Adverse Ruling meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2). If a Party gives a Notice of
Termination based on its good faith contention of the occurrence of a Material Adverse Ruling that meets the materiality standard set forth in Section 2.3.2.2(c)(1) or (c)(2), as applicable, and the Neutral Auditors subsequently determine that
such materiality standard has not been met, such Party shall not be in default under this Agreement solely because it gave such Notice of Termination. 
 2.3.2.3 Early Termination for Failure of Condition Precedent. This Agreement may be terminated for failure of a condition precedent in accordance with Section 3.5.2.2 or Section 3.5.3. 
 2.3.2.4 Early Termination Due to Implementation of Retail Competition. Upon the date of enactment of a Law providing for implementation of retail
electric service competition on a comprehensive basis in the State of North Carolina, the Parties shall enter into negotiations with the goal of reaching agreement on amendments to this Agreement to provide for the continuation of the purchase and
sale of electric capacity and energy and the provision of Scheduling Agent Services provided for in this Agreement after the commencement of such retail electric service competition. If the Parties are not able to reach agreement by the latter to
occur of (i) the date that is ninety (90) Days after the date of enactment of such Law or (ii) the date that is twenty-four (24) Months prior to the commencement of such retail electric service competition in the State of North
Carolina, then this Agreement shall terminate automatically on the date such retail electric service competition commences in the State of North Carolina without the need for either Party to give notice. 
  

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 2.3.2.5 Early Termination Due to Plant Calculation. In the event that the Annual Percentage
calculated in Attachment 7-9 is positive for two (2) consecutive Years, and the absolute value of such percentage is greater than ten percent (10%) then EMC may, within twenty (20) Days after the date in such second
(2nd) consecutive Year that Duke provides the calculation of the Annual Percentage pursuant to Section 7.3.2.4, give Duke Notice of Termination to terminate this Agreement effective on 23:59:59 of the last Day of Month that is twenty-four
(24) Months after the Month in which the Notice of Termination is given. In the event that the Annual Percentage calculated in Attachment 7-9 is negative for two (2) consecutive Years, and the absolute value of such percentage is
greater than ten percent (10%) for any two (2) consecutive Years, then Duke may, within twenty (20) Days after the date in such second (2nd) consecutive Year that Duke provides the calculation of the Annual Percentage pursuant to
Section 7.3.2.4, give EMC Notice of Termination to terminate this Agreement effective on 23:59:59 of the last Day of Month that is twenty-four (24) Months after the Month in which the Notice of Termination is given. If a Party fails to
give Notice of Termination within twenty (20) Days after Duke provides the calculation of the Annual Percentage pursuant to Section 7.3.2.4 for such second (2nd) consecutive Year, it shall have permanently waived its right to
terminate this Agreement under this Section based on the Annual Percentage for such two (2) consecutive Years; provided, that nothing in this Section 2.3.2.5 shall affect any Party’s termination rights under Sections 2.3.2.1,
2.3.2.2, 2.3.2.3, 2.3.2.4 or 2.3.2.6. 
 2.3.2.6 Early Termination Due to Extended Force Majeure. If, as a result of an event of Force
Majeure, a Party is unable to meet a material obligation hereunder for a period greater than ninety (90) Days, then the Non-Claiming Party shall have the right to terminate this Agreement upon giving a Notice of Termination within thirty
(30) Days of the expiration of such ninety (90) Day period; provided, however, if the Claiming Party has used and continues to use all Commercially Reasonable Efforts to remedy, cure or mitigate the event of Force Majeure, then the
Non-Claiming Party’s right to give Notice of Termination shall be suspended for so long as the Claiming Party continues to use Commercially Reasonable Efforts to remedy, cure or mitigate the event of Force Majeure. 
 2.3.3 Form of Notice of Termination. Notice of Termination made pursuant to Sections 2.2 or 2.3 shall be given in accordance with
Section 16.22 and shall state (i) the date of termination being effectuated, and (ii) the provision of this Agreement under which termination is being effectuated and the basis for the termination. Except as otherwise provided in this
Section 2.3.3, the Notice of Termination is effective when it is deemed given in accordance with Section 16.22. Once the Notice of Termination is given to a Party, it shall not be deemed amended, modified, or otherwise revoked for any
reason (other than a determination by the Neutral Auditors pursuant to Section 2.3.2.2.2 that the materiality standard is not met) unless such amendment, modification, or revocation is mutually agreed to by both Parties in writing or unless the
Parties reach agreement in accordance with Section 2.3.2.2(a). Upon receipt of the Notice of Termination, the non-terminating Party shall acknowledge receipt in writing sent in accordance with Section 16.22 within five (5) Business
Days of the receipt of the Notice of Termination. Acknowledgment of a Notice of Termination is a courtesy and shall not influence the effectiveness of the termination. Failure to utilize a method specified in Section 16.22 shall not influence
the effectiveness of the termination if the Notice of Termination is actually received by the Chief Executive Officer of the non-terminating Party within thirty (30) Days of 
  

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 the date of the Notice of Termination, in which case the Notice of Termination shall be effective on the date that the
Notice of Termination is actually received by the Chief Executive Officer of the non-terminating Party. 
 2.4 Absolute Nature of Termination. Both
Parties hereby acknowledge, warrant, and agree that TERMINATION OF THIS AGREEMENT FOR ANY REASON PROVIDED FOR AND PERMITTED UNDER THIS AGREEMENT IS ABSOLUTE AND FOREVER EXTINGUISHES ANY AND ALL OBLIGATIONS EXISTING UNDER THIS AGREEMENT FOR
(A) DUKE TO PLAN OR PROCURE RESOURCES TO SERVE EMC, OR TO PROVIDE ANY SERVICE OR PRODUCT TO EMC, (B) EMC TO PURCHASE FROM AND PAY DUKE FOR ANY SERVICES OR PRODUCTS, (C) EMC TO PLAN OR PROCURE RESOURCES TO SERVE DUKE, OR TO PROVIDE ANY
SERVICE OR PRODUCT TO DUKE, AND (D) DUKE TO PURCHASE FROM AND PAY EMC FOR ANY SERVICES OR PRODUCTS. Upon termination of this Agreement in accordance with Section 2.2, 2.3, 3.5.2.2, or 3.5.3, each and every obligation of Duke to provide
electric energy and capacity and Scheduling Agent Services to EMC, and each and every right of EMC to purchase electric energy and capacity and Scheduling Agent Services from Duke shall cease as a matter of contract and neither Party shall claim or
assert any continuing right to continued performance, whether by “rollover,” as an “evergreen” service, or in any other fashion based on this Agreement. By entering into this Agreement, Duke does not commit, and shall not be
deemed to have committed, to plan its system to be able to provide any service to EMC beyond the Term, and EMC agrees that it has no claim to any service beyond the Term. EMC shall not at any time oppose any filing by Duke to cancel this Agreement
as a rate schedule under the Federal Power Act concurrently with, or subsequently to, the termination of this Agreement as a contract in accordance with Section 2.2, 2.3, 3.5.2.2, or 3.5.3. The Parties acknowledge, warrant, and agree that it is
the express intention of the Parties that no action by any Governmental Authority may override the terms of this Section 2.4 of this Agreement, and that should any Governmental Authority take any action purporting to, or that might be claimed
to, override the terms of this Section 2.4, either directly or indirectly, EMC shall not make any claim or assert any right based on or relying on such Governmental Authority action in any manner that conflicts with or frustrates the terms of
Section 2.4 of this Agreement. 
 Article 3  
 Conditions Precedent to the Commencement Date 
 3.1 Conditions Precedent to Duke’s Obligations. The
obligation of Duke to commence sales of electric energy and capacity and purchases of electric energy and to provide Scheduling Agent Services under this Agreement is subject to the satisfaction or waiver at least thirty (30) Days prior to the
Commencement Date (except that Duke may undertake certain preliminary activities in advance of the Commencement Date) of the following conditions: 
 (a) The representations and warranties of EMC set forth in Sections 16.1.1 and the covenants of EMC set forth in Section 16.1.2 shall be true and correct. 
 (b) FERC shall have issued an order accepting or approving this Agreement for filing and permitting it to become effective as filed
without modification, suspension, investigation or other condition (including setting this Agreement, or part thereof, for hearing) unacceptable to Duke. 
  

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 (c) Neither the NCUC nor the PSCSC shall have issued an Adverse Ruling. For purposes of
this Section 3.1(c) only, “Adverse Ruling” means an order or ruling issued by the NCUC or PSCSC (i) which disapproves or rejects this Agreement, or (ii) generally applicable to electric utilities subject to the jurisdiction
of the NCUC or PSCSC, as applicable, in which the NCUC or PSCSC disapproves or rejects the use of system average cost accounting for wholesale contracts. 
 (d) SEPA shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent. 
 (e) NCEMC shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent. 
 (f) EMC shall have given notice to MSCG terminating the Scheduling Services Agreement. 
 (g)
The systems and operational equipment required for Duke to provide and receive service under this Agreement have been installed or otherwise put in place, tested satisfactorily, and are fully functional. 
 (h) Transmission Provider shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent and
Purchasing - Selling Entity. 
 (i) MSCG shall have received notice and acknowledged EMC’s designation of Duke as
EMC’s Scheduling Agent and Purchasing - Selling Entity. 
 (j) The Parties shall have agreed upon procedures so that Duke
may test whether the EMC Demand Side Management Resource Programs meet the standards and requirements specified for such programs under the rate schedule provisions or riders for Duke’s Demand Side Resource Management Programs then-currently
approved and on file with the NCUC. 
 3.2 Conditions Precedent to EMC’s Obligations. The obligation of EMC to commence purchases of electric
energy and capacity and Scheduling Agent Services and sales of electric energy under this Agreement is subject to the satisfaction or waiver at least thirty (30) Days prior to the Commencement Date (except that EMC may undertake certain
preliminary activities in advance of the Commencement Date) of the following conditions: 
 (a) The representations and
warranties of Duke set forth in Section 16.1.1 and the covenants of Duke set forth in Section 16.1.2 shall be true and correct. 
 (b) The RUS shall have approved this Agreement without modification, suspension, investigation or other condition unacceptable to EMC. 
  

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 (c) SEPA shall have received notice and acknowledged EMC’s designation of Duke as
EMC’s Scheduling Agent. 
 (d) NCEMC shall have received notice and acknowledged EMC’s designation of Duke as
EMC’s Scheduling Agent. 
 (e) The Transmission Provider shall have qualified this Agreement as a Network Resource.

 (f) The systems and operational equipment required for EMC to provide and receive service under this Agreement have been
installed or otherwise put in place, tested satisfactorily, and are fully functional. 
 (g) Transmission Provider shall have
received and acknowledged EMC’s designation of Duke as Scheduling Agent and Purchasing - Selling Entity. 
 (h) MSCG
shall have received notice and acknowledged EMC’s designation of Duke as EMC’s Scheduling Agent and Purchasing - Selling Entity. 
 (i) The Parties shall have agreed upon procedures so that Duke may test whether the EMC Demand Side Management Resource Programs meet the standards and requirements specified for such programs under the rate schedule
provisions or riders for Duke’s Demand Side Resource Management Programs then-currently approved and on file with the NCUC. 
 3.3 Notice of
Satisfaction of Conditions Precedent. Each Party shall use Commercially Reasonable Efforts to satisfy its conditions precedent (as described in Section 3.1 for Duke and Section 3.2 for EMC) on or before July 31, 2006, or as soon
as reasonably practicable thereafter. EMC shall provide Duke with written notice promptly following the satisfaction or waiver of all of the conditions precedent to EMC’s obligations as described in Section 3.2. Duke shall provide EMC with
written notice promptly following the satisfaction or waiver of all of the conditions precedent to Duke’s obligations as described in Section 3.1, other than the condition precedent specified in Section 3.1(f). In order for the
condition precedent specified in Section 3.1(f) to be satisfied, subsequent to the later of the date of EMC’s receipt of Duke’s notice or the date of Duke’s receipt of EMC’s notice, EMC shall, no later than thirty
(30) Days prior to the Commencement Date, give notice to MSCG that the Scheduling Services Agreement shall be terminated on the Commencement Date. A condition precedent shall not be deemed to have been satisfied or waived prior to the date that
the notice provided for in this Section 3.3 is received by the other Party. 
  

	3.4	Waiver of Condition Precedent. 

 3.4.1 Waiver by
Duke. In the event that any of the foregoing conditions to the obligations of Duke contained in Section 3.1 shall fail to be satisfied, Duke may elect, in its sole discretion, to consummate this Agreement despite such failure, in which
event Duke shall be deemed to have waived any claim for damages, losses or other relief arising from or in connection with such failure, unless otherwise agreed in writing and executed by the Parties. Duke may not waive the condition of approvals
set forth in Section 3.1(b). 
  

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 3.4.2 Waiver by EMC. In the event that any of the foregoing conditions to the obligations of EMC
contained in Section 3.2 shall fail to be satisfied, EMC may elect, in its sole discretion, to consummate this Agreement despite such failure, in which event EMC shall be deemed to have waived any claim for damages, losses or other relief
arising from or in connection with such failure, unless otherwise agreed in writing and executed by the Parties. EMC may not waive the condition of approvals set forth in Section 3.2(b). 
 3.4.3 Waiver by other Party. Any waiver by a Party of the other Party’s conditions precedent shall be in writing, and shall identify the
condition precedent that such Party is waiving. 
 3.5 Commencement of Service; Failure of Condition Precedent. 
 3.5.1 Commencement of Service. 
 3.5.1.1 If all of the conditions precedent specified in Sections 3.1 and 3.2 have been satisfied or waived on or before July 31, 2006, then the Commencement Date shall occur on September 1, 2006, without the need for either
Party to provide notice. 
 3.5.1.2 If all of the conditions precedent specified in Sections 3.1 and 3.2 are satisfied or waived during
the period between August 1, 2006, and November 30, 2006, and service under this Agreement has not commenced pursuant to Section 3.5.2.1, then service under this Agreement shall commence upon the next first Day of a Month which is at
least thirty (30) Days after all such conditions have been satisfied. 
 3.5.2 EMC Options. 
 3.5.2.1 If all of the conditions precedent specified in Sections 3.1 and 3.2, with the exception of the conditions precedent specified in
Section 3.1(b) and/or Section 3.2(b), have been satisfied or waived, then EMC may designate September 1, 2006, October 1, 2006, or November 1, 2006 as the Commencement Date by giving at least thirty (30) Days’
prior written notice to Duke. 
 3.5.2.2 If service has commenced pursuant to Section 3.5.2.1 prior to November 30, 2006, and the
condition precedent specified in Section 3.1(b) and/or Section 3.2(b) has not been satisfied on or before November 30, 2006, then except as provided in Section 3.5.2.3 this Agreement will terminate automatically on
December 31, 2006, without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the other arising hereunder under any claim or theory whatsoever. 
 3.5.2.3 If service has commenced pursuant to Section 3.5.2.1 prior to November 30, 2006, and the condition precedent specified in
Section 3.1(b) and/or Section 3.2(b) has not been satisfied on or before November 30, 2006, then EMC shall have the option of continuing to receive service hereunder beyond December 31, 2006 until either August 31,
2007, February 28, 2008, or August 31, 2008. EMC may exercise such option by giving notice to Duke of its exercise of such option no later than December 1, 2006. Such notice shall be referred to herein as the “Option
Notice”. EMC’s Option Notice shall specify 
  

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 whether EMC elects to receive service hereunder until August 31, 2007, February 28, 2008, or
August 31, 2008. The period of such service that EMC elects pursuant to such option (whether January 1, 2007—August 31, 2007; January 1, 2007 – February 28, 2008; or January 1, 2007—August 31, 2008) shall
be referred to herein as the “Option Period”. In the event that EMC exercises its option under this Section 3.5.2.3, then during the Option Period EMC shall be subject to the charges and credits set forth in Sections 3.5.2.3.1,
3.5.2.3.2, 3.5.2.3.3, 3.5.2.3.4, and 3.5.2.3.5, as applicable, and in Section 7.1 in lieu of the charges set forth in Section 7.2; provided, that during the Option Period the demand charges set forth in Section 7.1.4 shall be modified
as set forth in Sections 3.5.2.3.1, 3.5.2.3.2, or 3.5.2.3.3, as applicable, depending upon the Option Period selected by EMC. In the event that EMC exercises its option under this Section 3.5.2.3, then notwithstanding the provisions of
Section 3.5.2.2, this Agreement will terminate automatically on the last day of the Option Period, without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the
other arising hereunder under any claim or theory whatsoever for service beyond such date. EMC’s exercise of such option shall not serve to modify any other provision of the Agreement. 
 3.5.2.3.1 In the event that EMC exercises its option pursuant to Section 3.5.2.3, and the Option Period is January 1, 2007 –
August 31, 2007, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4 and the Excess Annual Capacity Charge set forth in Section 3.5.2.3.5.
In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under Section 3.5.2.3.5 during the Option Period shall be as follows: 
  

				
	 Annual Capacity Price
	  	$	38.00/kW-Year
	 Annual Capacity Quantity
	  	 	42,000 kW
	 Excess Annual Capacity Price
	  	$	45.60/kW-Year

 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month,
rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Section 7.1.5.11, 7.1.5.12, and 7.1.5.13) during the Option Period shall be as set
forth in Section 7.1.5. 
 3.5.2.3.2 In the event that EMC exercises its option pursuant to Section 3.5.2.3, and the Option Period
is January 1, 2007 – February 28, 2008, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4 and the Excess Annual Capacity Charge set
forth in Section 3.5.2.3.5. In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under Section 3.5.2.3.5 during the Option Period
shall be as follows: 
  

				
	 January 1, 2007 - December 31, 2007:
	  		
		
	 Annual Capacity Price
	  	$	38.00/kW-Year
	 Annual Capacity Quantity
	  	 	42,000 kW
	 Excess Annual Capacity Price
	  	$	45.60/kW-Year
		
	 January 1, 2008 – February 28, 2008:
	  		
		
	 Annual Capacity Price
	  	 	0
	 Annual Capacity Quantity
	  	 	0
	 Excess Annual Capacity Price
	  	 	0

  

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 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month during
2007 and $5.75/kW-Month during 2008, rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Section 7.1.5.11, 7.1.5.12, and 7.1.5.13)
during the Option Period shall be as set forth in Section 7.1.5. 
 3.5.2.3.3 In the event that EMC exercises its option pursuant to
Section 3.5.2.3, and the Option Period is January 1, 2007 – August 31, 2008, EMC shall pay to Duke, in addition to the other charges set forth in this Agreement, the Base Annual Capacity Charge set forth in Section 3.5.2.3.4
and the Excess Annual Capacity Charge set forth in Section 3.5.2.3.5. In such event, the Annual Capacity Price under Section 3.5.2.3.4, Annual Capacity Quantity under Section 3.5.2.3.4, and Excess Annual Capacity Price under 3.5.2.3.5
during the Option Period shall be as follows: 
  

			
	 January 1, 2007 - December 31, 2007:
	  	
	 Annual Capacity Price
	  	$38.00/kW-Year
	 Annual Capacity Quantity
	  	42,000 kW
	 Excess Annual Capacity Price
	  	$45.60/kW-Year
		
	 January 1, 2008 – August 31, 2008:
	  	
		
	 Annual Capacity Price
	  	$40.00/kW-Year
	 Annual Capacity Quantity
	  	43,000 kW
	 Excess Annual Capacity Price
	  	$48.00/kW-Year

 In addition, the Monthly Demand Rate under Section 7.1.4 during the Option Period shall be $5.45/kW-Month
during 2007 and $5.75/kW-Month during 2008, rather than the rate specified in Section 7.1.4, and the Duke Monthly Energy Charge and the EMC Monthly Energy Credit (and other charges and credits under Section 7.1.5.11, 7.1.5.12, and
7.1.5.13) during the Option Period shall be as set forth in Section 7.1.5. 
  

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 3.5.2.3.4 Base Annual Capacity Charge. The Base Annual Capacity Charge for a Year shall be equal
to the product of (i) the Annual Capacity Price for the Year ($/kW-Year) and (ii) the Annual Capacity Quantity for the Year (kW). The Base Annual Capacity Charge for the Option Period shall be billed in accordance with Article 13 in the
July 2007 statement and the July 2008 statement, if applicable. 
 3.5.2.3.5 Excess Annual Capacity Charge. The Excess Annual
Capacity Charge for a Year shall be equal to the product of (i) the Excess Annual Capacity Price for the Year ($/kW-Year) and (ii) the Excess Annual Amount for the Year (kW). The Excess Annual Amount for a Year shall be equal to the
product of (i) the EMC Excess Annual Capacity Quantity for the Year divided by the EMC Group Combined Excess Annual Capacity Quantity for the Year and (ii) the EMC Group Excess Annual Capacity Quantity for the Year. The Excess Annual
Capacity Charge for the Option Period shall be billed in accordance with Article 13 in the September 2007 and the September 2008 statement, if applicable, based on the actual Duke billing data during July and August 2007 and July and August 2008,
respectively. A sample calculation is provided in Attachment 3-1. 
 3.5.2.3.5.1 EMC Excess Annual Capacity Quantity. The EMC Excess
Annual Capacity Quantity for a Year shall be equal to the EMC Coincident Peak Demand for the Year minus EMC’s Base Obligation for the Hour in such Year in which the EMC Coincident Peak Demand occurs, minus the Annual Capacity Quantity for the
Year. In no event shall the EMC Excess Annual Capacity Quantity be less than zero. The EMC Coincident Peak Demand for a Year shall be equal to the EMC Hourly Demand that is coincident with the maximum integrated sixty (60) minute Duke Schedule
1 Demands during July and August of the Year. The EMC Hourly Demand for an Hour shall be equal to the integrated sixty (60) minute demand of EMC’s Native Load during the Hour. 
 3.5.2.3.5.2. EMC Group Combined Excess Annual Capacity Quantity. The EMC Group Combined Excess Annual Capacity Quantity for a Year shall be equal
to the sum of (i) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of this Agreement, (ii) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of the
Duke-Piedmont Agreement, and (iii) the EMC Excess Annual Capacity Quantity for the Year as determined in Section 3.5.2.3.5.1 of the Duke-Rutherford Agreement. 
 3.5.2.3.5.3 EMC Group Excess Annual Capacity Quantity. The EMC Group Excess Annual Capacity Quantity for a Year shall be equal to the EMC Group Coincident Peak Demand for the Year, minus the EMC Group’s
Base Obligation for the Hour in such Year in which the EMC Group Coincident Peak Demand occurs, minus the EMC Group Annual Capacity Quantity; but in no event shall the EMC Group Excess Annual Capacity Quantity be less than zero. The EMC Group
Coincident Peak Demand shall for a Year be equal to the sum of (i) the EMC Coincident Peak Demand for the Year as determined in Section 3.5.2.3.5.1 of this Agreement, (ii) the EMC Coincident Peak Demand for the Year as determined in
Section 3.5.2.3.5.1 of the Duke-Piedmont Agreement, and (iii) the EMC Coincident Peak Demand for the Year as determined in Section 3.5.2.3.5.1 of the Duke-Rutherford Agreement. 
  

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 3.5.2.4 Any Option Notice given by EMC pursuant to Section 3.5.2.3 shall be given in accordance with
Section 16.22 and shall state the Option Period elected. The Option Notice is effective when it is deemed given in accordance with Section 16.22. Once the Option Notice is given to Duke, it shall not be deemed amended, modified, or
otherwise revoked for any reason unless such amendment, modification, or revocation is mutually agreed to by both Parties in writing. 
 3.5.3 Termination for Failure of Condition Precedent. 
 3.5.3.1 Subject to the options granted to EMC under
Section 3.5.2.1 and 3.5.2.3, in the event that any of the conditions precedent set out in Sections 3.1(a) through (j) and Sections 3.2(a) through (i) are not satisfied or waived on or before November 30, 2006, then this Agreement
will terminate automatically on December 31, 2006, without the need for either Party to give Notice of Termination and neither Duke nor EMC shall have any obligation, duty or liability to the other arising hereunder under any claim or theory
whatsoever. 
 Article 4 
 Sale of Electric Capacity and Energy 
 4.1 Classification of Services Provided. During the period beginning on the Commencement Date,
and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, Duke shall provide to EMC “FFR Supplemental Service”, as described in Section 4.2. Beginning January 1, 2011, throughout the
remainder of the Term of this Agreement, Duke shall provide to EMC “Partial Requirements Service”, as described in Section 4.3. 
  

	4.2	FFR Supplemental Service. 

 4.2.1 Character of
FFR Supplemental Service. For each Hour during the period beginning on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, Duke shall sell and deliver, and EMC shall
purchase and receive, all of the electric capacity and energy that EMC requires to serve EMC’s Native Load in excess of EMC’s Base Obligation for such Hour. For example, if EMC’s Native Load during an Hour is 800 MWs, and EMC’s
Base Obligation for such Hour is 600 MWs, Duke shall supply and deliver, and EMC shall purchase and receive, 200 MWs of FFR Supplemental Service for such Hour. Duke shall supply and deliver FFR Supplemental Service in a manner that is as firm as,
and otherwise comparable with, the manner in which Duke supplies Duke’s Native Load. Duke shall be responsible for maintaining the generation reserves needed to meet its FFR Supplemental Service obligation. Notwithstanding anything in this
Agreement to the contrary, Duke shall have no obligation to sell and deliver any electric capacity or energy to EMC that is not required to serve EMC’s Native Load. 
 4.2.2 Amount of EMC’s Base Obligation. EMC’s Base Obligation for each Hour beginning on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is
in effect, shall be as set forth in Attachment 4-1. 
  

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 Notwithstanding the preceding sentence, EMC’s Base Obligation shall be subject to modification (a) during Light
Load Periods in accordance with the provisions of Attachment 4-2 or (b) in accordance with the provisions of Section 5.1.4 and 5.1.5. The amounts set forth on Attachment 4-1 reflect MWs delivered at a Delivery Point.

 4.2.3 Scheduling To Meet EMC’s Base Obligation. In order to meet EMC’s Base Obligation, (a) MSCG shall be
responsible for scheduling to the Transmission Provider electric energy under the PPA to serve EMC’s Native Load and (b) Duke, acting as Scheduling Agent, shall be responsible for scheduling to the Transmission Provider, in accordance with
the provisions of Article 8, electric energy to serve EMC’s Native Load from EMC’s entitlements to the resources described in Section 5.1.3, 5.1.4 or 5.1.5. The total amount of electric energy so scheduled to the Transmission Provider
in any Hour to serve EMC’s Native Load beginning on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, shall be the EMC Scheduled Amount; provided that the EMC
Scheduled Amount shall not exceed EMC’s Base Obligation for any such Hour. 
 4.2.4 Scheduling Shortfall. For each Hour beginning
on the Commencement Date, and continuing through December 31, 2010, or any portion thereof in which this Agreement is in effect, if, for any reason, including a Force Majeure as that term is defined herein or a “force majeure”,
“uncontrollable force” or a similar term defined in a third-party agreement, but not including Duke’s unexcused failure to comply with the provisions of Article 8, the EMC Scheduled Amount is less than EMC’s Base Obligation for
any Hour, there shall be a “Scheduling Shortfall” in the amount equal to the difference between EMC’s Base Obligation and the EMC Scheduled Amount in such Hour (“Scheduling Shortfall Amount”). For any Hour that Duke receives
information or a notice pursuant to Section 8.4.8 that there will be or has been a Scheduling Shortfall, Duke shall use Commercially Reasonable Efforts to procure and supply electric energy in a quantity sufficient to supply the Scheduling
Shortfall Amount for such Hour (“Replacement Energy”). In the event that, through the exercise of Commercially Reasonable Efforts, Duke procures Replacement Energy from a third party for resale to EMC, EMC shall pay Duke for the total cost
incurred by Duke to purchase and deliver the Replacement Energy. Duke’s curtailment of a Non-Firm Sale shall constitute a procurement of Replacement Energy from a third party and the total cost incurred by Duke shall be (i) the foregone
sales price for the Non-Firm Sale curtailed and (ii) if applicable, any charges imposed for changes to schedules for the sale of electric energy. In the event that Duke supplies Replacement Energy from its own resources, EMC shall pay Duke for
such Replacement Energy an amount equal to one hundred ten percent (110%) of Duke’s System Incremental Cost in supplying such Replacement Energy. The total charges for Replacement Energy for a Month, as determined by this
Section 4.2.4, shall constitute the Monthly Replacement Energy Charge. 
 4.2.4.1 It is expressly understood that Section 4.2.4
shall not be construed or interpreted to (i) require Duke to curtail any Firm Sales in order to supply Replacement Energy to EMC, (ii) to curtail any Non-Firm Sales except as set forth in Section 4.2.6 in order to supply such
Replacement Energy to EMC, (iii) impose upon Duke any responsibility for providing Replacement Energy for a Scheduling Shortfall that occurs after the Transmission Provider’s deadline for scheduling transmission service required for the
delivery of such Replacement Energy, or (iv) affect in any way EMC’s rights and obligations under its Network Integration Transmission Service Agreement. 
  

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 4.2.4.2 In the event that there is or is expected to be a Scheduling Shortfall in connection with
(a) EMC or its Scheduling Agent having received notice (and in the event EMC receives notice providing Duke with evidence of such notice) of, or (b) pursuant to Section 8.4.8 Scheduling Agent having received notice of either
(i) the occurrence of a “force majeure” event under the PPA, as defined in Section 4.2.4.3, or (ii) the temporary impairment of generating resources underlying the WPSA, the SEPA Contract, or other resources to which EMC may
have an entitlement pursuant to Section 5.1.3, 5.1.4 or 5.1.5, such that all or a portion of EMC’s entitlements to electric energy under such agreements are or will be temporarily unavailable to EMC, then EMC may request Duke to sell
electric capacity and energy to EMC for the expected duration of such Scheduling Shortfall. In the event that EMC makes such a request, Duke shall exercise Commercially Reasonable Efforts to offer to supply electric capacity and energy to EMC under
rates, terms, and conditions that Duke determines to be commercially reasonable. If the Parties reach agreement on such a sale, then Duke shall sell and deliver and EMC shall purchase and receive the electric energy and such electric energy shall be
included in EMC Scheduled Amount. 
 4.2.4.3 For purposes of Section 4.2.4.2, the term “force majeure” means an event or
circumstance that: (i) prevents the party claiming to be affected by it from performing its obligations in whole or in part; (ii) is not within the reasonable control of the claiming party, or the result of the negligence of the claiming
party, and (iii) by the exercise of due diligence, the claiming party is unable to overcome in a commercially reasonable manner, and, without limiting the scope of the definition, includes acts of God, or the public enemy, or insurrection,
riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court order or governmental authority or arbitration award (so long as the claiming party has
not sought or has opposed, to the extent reasonable, such actions or restraints). It is expressly acknowledged that transmission service interruptions or curtailments imposed by a transmission provider in response to transmission capacity or
availability shortages shall not be “force majeure” events or circumstances for purposes of this Section 4.2.4.3. 
 4.2.5
EMC PPA Obligation. EMC shall retain all of its rights and obligations under the PPA, including the obligation to pay all costs incurred under the PPA. 
 4.2.6 EMC Obligation to Curtail Load. During any Hour in which there is a Scheduling Shortfall, and either (i) Duke does not replace such electric energy in accordance with Section 4.2.4 or
(ii) EMC has not made, or does not have in place, arrangements to replace such electric energy, EMC shall curtail an amount of EMC’s Native Load equal to the Scheduling Shortfall Amount; provided, however, Duke shall exercise Commercially
Reasonable Efforts within the time constraints that exist to first call upon any available EMC Demand Side Management Resource Program that would not otherwise be called upon absent the Scheduling Shortfall and then if necessary curtail Non-Firm
Sales to the extent of the Scheduling Shortfall before requiring EMC to curtail EMC’s Native Load pursuant to this Section 4.2.6. Any such EMC Native Load that has been curtailed shall be restored when the Scheduling Shortfall is no longer
occurring or when the Scheduling Shortfall has been replaced either by electric energy supplied (a) by Duke in accordance with Section 4.2.4 or this Section 4.2.6 or (b) under arrangements made by EMC with third parties.

  

 36 









	4.3	Partial Requirements Service. 

 4.3.1 Character
of Partial Requirements Service. For each Hour during the period beginning on January 1, 2011, and continuing through the termination of this Agreement, Duke shall sell and deliver, and EMC shall purchase and receive, all of the electric
capacity and energy that EMC requires to serve EMC’s Native Load in excess of the EMC Contract Resources. Duke shall be responsible for maintaining the generation reserves necessary to meet this obligation. Duke shall supply Partial
Requirements Service in a manner that is as firm as, and otherwise comparable with, the manner in which Duke supplies Duke’s Native Load. Notwithstanding anything in this Agreement to the contrary, Duke shall have no obligation to sell and
deliver any electric capacity or energy to EMC that is not required to serve EMC’s Native Load. 
 4.3.2 Scheduling of EMC Contract
Resources To Serve EMC Native Load. For each Hour beginning on January 1, 2011, and continuing through the Term of this Agreement, EMC’s contractual entitlement to electric energy from the Dispatched Combined Cycle Resources and from
the Baseload Resources shall be scheduled in accordance with the provisions of Sections 4.3.3 and 4.3.4, respectively. 
 4.3.3
Scheduling of the Combined Cycle Resources. Duke may schedule, in accordance with Attachment 4-3 and Article 8, each of the Combined Cycle Resources pursuant to Duke’s economic dispatch as necessary to serve Duke’s total
electric energy obligations. Duke shall make no adverse distinction against the Combined Cycle Resources in determining the dispatch order of Duke’s Generation System and the Combined Cycle Resources. The Combined Cycle Resources that Duke
schedules pursuant to economic dispatch shall be referred to as the “Dispatched Combined Cycle Resources”. Except as provided in Section 4.3.3.1 and Section 4.3.3.2, EMC shall be solely responsible for all costs associated with
the Combined Cycle Resources. 
 4.3.3.1 Duke shall not be obligated to pay for any costs that EMC incurs as a result of Duke’s dispatch
of the Combined Cycle Resources to the extent that Duke’s dispatch of such Combined Cycle Resources is for the purpose of serving Duke’s Native Load and, during any Year, Duke’s dispatch of a Combined Cycle Resource for that purpose
does not exceed an Annual Capacity Factor of twenty percent (20%). In the event and at such time during a Year that Duke’s dispatch of a Combined Cycle Resource to serve Duke’s Native Load exceeds an Annual Capacity Factor of twenty
percent (20%), Duke shall pay EMC, in the manner and time provided for in Article 13, the additional Energy Cost that EMC incurs as a result of Duke’s dispatch of such Combined Cycle Resource for the remainder of the Year. For example, if
a Dispatched Combined Cycle Resource has a generating capacity of one hundred (100) MWs during a Year and, as of 11:59:59 on November 30 of such Year, Duke has dispatched such resource for 175,200 MWhs for the purpose of serving
Duke’s Native Load, Duke shall reimburse EMC for the Energy Costs that EMC incurs in December of such Year as a result of Duke’s dispatch of such Dispatched Combined Cycle Resource. For the purpose of this Section 4.3.3.1,
“Annual Capacity Factor” means the total amount of electric energy generated by a Dispatched Combined Cycle Resource for the purpose of serving Duke’s Native Load during a Year divided by the product of (a) the total generating
capacity of such Dispatched Combined Cycle Resource and (b) 8,784 (during a leap year) or 8,760 (during a Year other than a leap year), multiplied by one hundred percent (100%). 
  

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 4.3.3.2 In the event that Duke’s dispatch of one or more of the Combined Cycle Resources is for any
purpose other than to serve Duke’s Native Load, Duke shall pay EMC, in the manner and time provided for in Article 13, the additional Energy Cost that EMC incurs as a result of Duke’s dispatch of such Combined Cycle Resource(s).

 4.3.3.3 For purposes of Sections 4.3.3.1 and 4.3.3.2, “Energy Cost” means, with respect to any Dispatched Combined Cycle
Resource, all variable costs incurred by EMC that are associated with the production of electric energy under the WPSA, including the cost of fuel, start charges, and any other variable charges incurred by EMC under the WPSA in connection with the
electric energy dispatched by Duke from such Combined Cycle Resource regardless of NCEMC’s actual generating cost or NCEMC’s contractual source of the electric energy. 
 4.3.4 Scheduling of Baseload Resources. Duke shall schedule, in accordance with Article 8, all of the Baseload Resources to the full extent
that EMC’s entitlement to such resources are available to EMC and such electric energy shall be used to serve EMC’s Native Load. EMC shall be solely responsible for all costs associated with the Baseload Resources. The Baseload Resources
that Duke schedules pursuant to this Section 4.3.4 shall be referred to as “Dispatched Baseload Resources”. 
 4.4 Excepted Load.
Notwithstanding anything to the contrary herein, Duke shall have no obligation to supply electric capacity or energy required by EMC to serve Excepted Load. Excepted Load shall consist of EMC load that is either (a) Non-Conforming Load or
(b) Non-Duke Control Area Load. Non-Conforming Load shall consist of (i) EMC load resulting from the merger of EMC with another electric membership corporation or other entity (except to the extent such load was, at the time of the merger,
already being served by Duke under an agreement substantially similar to this Agreement), and (ii) EMC wholesale load (except as provided in Section 4.4.1). Non-Conforming Load shall also consist of discrete EMC load (a) to which
electric service from EMC shall have commenced after the Effective Date, (b) that has a projected peak demand in excess of twenty-five (25) MW for the Year in which electric service from the EMC commences, and (c) which is projected
to change within a one-minute period by a significant quantity on a recurring basis due to the nature of the retail customer’s operations (e.g., without limitation, an arc furnace). 
 4.4.1 New River Load. If, on or before December 31, 2010, EMC notifies Duke that it desires to include New River as a part of EMC’s
Native Load under this Agreement, the New River load shall not be a Non-Conforming Load and shall be EMC’s Native Load for purposes of this Agreement; provided that New River’s load shall be included as EMC’s Native Load for a period
of not less than five (5) Years. It is expressly understood that New River shall not be included as a part of EMC’s Native Load beyond the Term. It is further expressly understood that nothing contained in this Section 4.4.1 shall
restrict Duke’s right or ability to make an offer to meet New River’s electric energy requirements under separate arrangements that may be agreed to by Duke and New River. 
 4.5 Good Title. Electric energy that is delivered by Duke to EMC shall be free and clear of all liens, Claims, and encumbrances at the Delivery Points, where title to electric energy provided by Duke hereunder
shall transfer to EMC. Electric energy that is delivered by EMC to Duke shall be free and clear of all liens, Claims, and encumbrances at the point where title to the electric energy is transferred to Duke. 
  

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 4.6 Power Quality. All electric energy provided hereunder at the point of delivery shall be three (3) phase,
sixty (60) hertz, and at system nominal voltages. 
 Article 5 
 EMC Resources 
 5.1 EMC Contract Resources (Commencement Date—December 31, 2010).

 5.1.1 Identification of Resources. Except as provided in Section 5.4.1, EMC’s Contract Resources during the period
commencing on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, shall consist of EMC’s entitlement to electric capacity and energy under the PPA and such additional
generation or purchased power resources or entitlements as EMC may acquire pursuant to Sections 5.1.3, 5.1.4 and 5.1.5. The FFR Resource is listed in Attachment 4-1. Except as provided in this Section 5.1.1, EMC shall not,
without first obtaining Duke’s prior written consent, enter into any other contracts for, or acquire any ownership interest in or contractual entitlement to, any additional electric generating resources or electric capacity or energy under
which electric capacity and energy would be used to serve EMC’s Native Load during the Term. 
 5.1.2 Changes to FFR Resources.
During the period commencing on the Commencement Date, and continuing through December 31, 2010, or any part thereof in which this Agreement is in effect, EMC shall not: (a) take any action that would materially affect the quantity or
quality of MSCG’s service obligations under the PPA without first obtaining Duke’s prior written consent, or (b) agree to any modification to provisions of the PPA, the WPSA, or the SEPA Contract that would increase or decrease
EMC’s entitlement to electric capacity or energy under such agreements and for which EMC’s consent is required (except as provided in Section 5.1.4) without first obtaining Duke’s consent to such modification. 
 5.1.3 Resource Impairment. In the event that all or a portion of the FFR Resource, or any other EMC Contract Resource, is terminated or becomes
permanently impaired, EMC shall acquire, at EMC’s expense, a substitute resource (backed by reserves in an amount equal to that required under Duke’s Generation Planning Practices) that is of substantially equivalent size and comparable
reliability to the EMC Contract Resource, or portion thereof, that such substitute is replacing. 
 5.1.4 New Catawba Resource. In the
event that NCEMC acquires all or part of Saluda River Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station, and sells, allocates or transfers a percentage of that entitlement with such entitlement being made
available throughout the Year to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Base Obligation shall be increased by an amount equal to the amount of the entitlement so acquired by EMC. Upon Duke’s request,
EMC shall provide evidence reasonably satisfactory to Duke demonstrating that such entitlement in the Catawba Nuclear Station is backed by sufficient and reliable electric system generating reserves. Duke shall limit 
  

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 such requests to one (1) request per Year; provided, that if Duke reasonably believes that the sufficiency or
reliability of the electric system generating reserves backing EMC’s entitlement in the Catawba Nuclear Station may have changed since Duke’s last such request, this limitation shall not apply. In the event that EMC fails to demonstrate
that its entitlement in the Catawba Nuclear Station is backed by sufficient and reliable generating reserves, Duke shall supply, and EMC shall purchase, such reserves in an amount equal to that required under Duke’s Generation Planning
Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as determined under the prior sentence) supplied by Duke to EMC at the then-applicable Monthly Demand Charge. Duke’s provision and
EMC’s purchase of such reserves shall not affect the determination of EMC’s Base Obligation. This Monthly charge shall be billed by Duke in accordance with the provisions of Article 13. 
 5.1.4.1 In the event that NCEMC purchases electric capacity and energy from Duke in lieu of NCEMC’s acquisition of all or a part of Saluda River
Electric Cooperative’s existing ownership interest in the Catawba Nuclear Station as provided in Section 5.1.4, and NCEMC sells, allocates or transfers a portion of such electric capacity and energy to EMC (through a modification of the
WPSA or pursuant to a new contract), EMC’s Base Obligation shall be increased by an amount equal to the amount of the electric capacity and energy so acquired by EMC. 
 5.1.5 Non-Consent Modification of EMC’s Contract Resources. In the event that EMC’s entitlements to electric capacity and energy
are reduced in accordance with Section 2.9(b) or Section 2.9(c) of the WPSA or Sections 2.2, 2.3, and 2.4 of the SEPA Contract, the amount of the EMC’s Base Obligation shall not be affected and the provisions of
Section 4.2.4.2 shall apply, except that if the Parties are unable to reach agreement as to the rates, terms and conditions under which Duke would sell electric capacity and energy to EMC, the provisions of Section 5.1.3 shall apply. EMC
shall provide written notice to Duke as soon as reasonably practicable after EMC becomes aware of any modification to EMC’s entitlement to electric capacity and energy under the WPSA or SEPA Contract pursuant to this Section 5.1.5. In the
event that EMC’s entitlements to electric capacity and energy are increased in accordance with Section 2.9(b) or Section 2.9(c) of the WPSA or Sections 2.2, 2.3, 2.4 and 2.8 of the SEPA Contract, then, prior to the effective date
of such increase, EMC may elect either to (a) increase EMC’s Base Obligation by the same amount and to the same extent as EMC’s entitlements to electric capacity and energy are increased, or (b) make arrangements for the sale of
EMC’s entitlements to such electric capacity and energy to a third party or to Duke. If EMC fails to complete the arrangements described in (b) of the preceding sentence by the effective date of the increase in entitlements, then, as of
the effective date of the increase in entitlements, the EMC’s Base Obligation automatically will be increased as described in (a) of the preceding sentence. 
 5.2 EMC Contract Resources (January 1, 2011 - Termination of Agreement). 
 5.2.1 Identification of
Contract Resources. Except as provided in Section 5.4.1, EMC’s Contract Resources during the period January 1, 2011, through the termination of this Agreement shall consist of EMC’s entitlements to electric capacity and
energy under the contracts listed in Attachment 4-3 and such additional generation or purchased power resources or entitlements as EMC may acquire pursuant to Sections 5.2.3, 5.2.4, and 5.2.5. EMC’s entitlements under the contracts
that are listed in Attachment 4-3 shall be referred to as the Partial Requirements 
  

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 Resources. Partial Requirements Resources consist of two (2) categories of entitlements: Baseload Resources and
Combined Cycle Resources. The amount and the material cost and operational terms and conditions of the Baseload Resources and Combined Cycle Resources shall be as set forth in Attachment 4-3, subject to modification in accordance with
Sections 5.2.3 and 5.2.4. Except as provided in this Section 5.2.1, EMC shall not, without first obtaining Duke’s prior written consent, enter into any other contracts for, or acquire any ownership interest in or contractual
entitlement to, any additional electric generating resources or electric capacity or energy under which electric capacity and energy would be used to serve EMC’s Native Load during the Term. 
 5.2.1.1 Extension of WPSA and SEPA Contract. Consistent with the provisions of Section 5.2.2, EMC shall have the right, without the prior
consent of Duke, to extend the term of the WPSA or the SEPA Contract under substantially the same terms and conditions as exist at the time that EMC seeks to extend the term of the WPSA or the SEPA Contract. If EMC extends the term of the WPSA or
the SEPA Contract in accordance with this Section 5.2.1.1, the EMC Contract Resources listed in Attachment 4-3 shall be deemed to be changed accordingly. 
 5.2.2 Changes To Partial Requirements Resources. Commencing January 1, 2011, through the termination of this Agreement, EMC shall not (a) take any action that would materially affect the quantity or
quality of EMC’s entitlement to electric capacity and energy from the Partial Requirements Resources without first obtaining Duke’s prior written consent, or (b) agree to any modification to provisions of the WPSA or the SEPA Contract
that would increase or decrease EMC’s entitlement to electric capacity or energy under such agreements and for which EMC’s consent is required (except as provided in Section 5.2.4) without first obtaining Duke’s consent to such
modification. 
 5.2.2.1 Modifications Effective After Termination. Notwithstanding the provisions of Section 5.2.2, EMC shall be
permitted to agree to any resource modification under the WPSA or the SEPA Contract without obtaining Duke’s consent to the extent that such resource modification will become effective after the Term; provided, that if such resource
modification will become effective prior to the end of the Term, EMC’s Partial Requirements Resources and Duke’s obligation to provide Partial Requirements Service shall not be modified prior to the date that this Agreement is terminated
unless Duke consents to such modification. 
 5.2.2.2 Sufficiency of Reserves. Upon Duke’s request, EMC shall provide evidence
reasonably satisfactory to Duke demonstrating that each of EMC’s Partial Requirements Resources is backed by sufficient and reliable electric system generating reserves. Duke shall limit such requests to one (1) request per Year with
respect to any Partial Requirements Resource; provided, that if Duke reasonably believes that the sufficiency or reliability of the electric system reserves backing any Partial Requirements Resource may have changed since Duke’s last such
request, this limitation shall not apply with respect to that Partial Requirements Resource. In the event that EMC fails to demonstrate that its entitlement in a Partial Requirements Resource is backed by sufficient and reliable generating reserves,
Duke shall supply, and EMC shall purchase, such reserves in an amount equal to that required under Duke’s Generation Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as determined
under the prior sentence) supplied by 
  

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 Duke to EMC and the then applicable Monthly Demand Charge. This Monthly charge shall be billed by Duke in accordance with
the provisions of Article 13. Duke’s provision and EMC’s purchase of such reserves shall not affect the determination of the amount of Partial Requirements Resources, Baseload Resources or Combined Cycle Resources. EMC shall provide
written notice to Duke as soon as reasonably practicable after EMC becomes aware of a material change to the seller’s service obligations under the contracts listed in Attachment 4-3; provided, that such notice shall be for information
purposes only, and shall not affect any other obligations of either Party under this Agreement. 
 5.2.3 Non-Consent Partial Requirements
Resource Modifications. In the event that EMC’s entitlements are modified pursuant to Section 2.9(b) or Section 2.9(c) of the WPSA or Sections 2.2, 2.3, 2.4 and 2.8 of the SEPA Contract, EMC’s Partial Requirements
Resources shall be modified in the same amount and to the same extent. To the extent that a Partial Requirements Resource is modified pursuant to this Section 5.2.3, and the modification changes EMC’s entitlement in a resource listed as a
Baseload Resource in Attachment 4-3, the amount of such Baseload Resource, as listed in Attachment 4-3, shall be deemed to be changed accordingly. EMC shall provide written notice to Duke as soon as reasonably practicable after EMC
becomes aware of any modification to EMC’s entitlement to electric capacity and energy under the WPSA or SEPA Contract pursuant to this Section 5.2.3. To the extent that a Partial Requirements Resource is modified pursuant to this
Section 5.2.3, and the modification changes EMC’s entitlement in a resource listed as a Combined Cycle Resource in Attachment 4-3, the amount of such Combined Cycle Resource, as listed in Attachment 4-3, shall be deemed to be
changed accordingly. 
 5.2.4 New Catawba Resource. In the event that NCEMC acquires all or part of Saluda River Electric
Cooperative’s existing ownership interest in the Catawba Nuclear Station, and sells, allocates or transfers a percentage of that entitlement with such entitlement being made available throughout the Year to EMC (through modification of the WPSA
or pursuant to a new contract), the entitlement or resource so acquired by EMC shall constitute an additional Partial Requirements Resource, and shall be deemed to be an additional Baseload Resource. Upon Duke’s request, EMC shall provide
evidence reasonably satisfactory to Duke demonstrating that such entitlement in the Catawba Nuclear Station is backed by sufficient and reliable electric system generating reserves. Duke shall limit such requests to one (1) request per year;
provided, that if Duke reasonably believes that the sufficiency or reliability of the electric system generating reserves backing EMC’s entitlement in the Catawba Nuclear Station may have changed since Duke’s last such request, this
limitation shall not apply. In the event that EMC fails to demonstrate that its entitlement in the Catawba Nuclear Station is backed by sufficient and reliable generating reserves, Duke shall supply, and EMC shall purchase, such reserves in an
amount equal to that required under Duke’s Generation Planning Practices. The Monthly charge for such reserves shall be equal to the product of the amount of reserves (as determined under the prior sentence) supplied by Duke to EMC and the
then-applicable Monthly Demand Charge. This Monthly charge shall be billed by Duke in accordance with the provisions of Article 13. Duke’s provision and EMC’s purchase of such reserves shall not affect the determination of the amount
of Partial Requirements Resources, Baseload Resources or Combined Cycle Resources. 
 5.2.4.1 In the event that NCEMC purchases electric
capacity and energy from Duke in lieu of NCEMC’s acquisition of all or a part of Saluda River Electric Cooperative’s 
  

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 existing ownership interest in the Catawba Nuclear Station as provided in Section 5.2.4, and NCEMC sells, allocates
or transfers a portion of such capacity and energy to EMC (through a modification of the WPSA or pursuant to a new contract), EMC’s Baseload Resources shall be increased by an amount equal to the amount of the electric capacity and energy so
acquired by EMC. 
 5.2.5 Resource Impairment. In the event that all or a portion of an EMC Contract Resource is terminated or becomes
permanently impaired, EMC shall acquire, at EMC’s cost, a substitute resource (backed by reserves in an amount equal to that required under Duke’s Generation Planning Practices) that is of substantially equivalent size and comparable
reliability to the EMC Contract Resource, or portion thereof, that such substitute resource is replacing, and that Duke reasonably agrees is sufficiently reliable. EMC’s acquisition of such substitute resource shall not affect the determination
of the amount of Partial Requirements Resources, Baseload Resources or Combined Cycle Resources. 
 5.3 No Duke Obligation for Customer Resources.
Unless otherwise explicitly provided in this Agreement, nothing herein shall be interpreted or construed as imposing upon Duke any obligations or liabilities, or for transferring to Duke any EMC obligations or liabilities, under or otherwise
pertaining to any EMC Contract Resource, nor shall anything in this Agreement be interpreted or construed as creating or implying any contractual or other relationship between Duke and any other party as to a EMC Contract Resource. 
 5.4 New Customer Resources. Except as provided in Section 5.4.1, Duke shall have no obligation to amend this Agreement and EMC shall not make an application
to FERC requesting that FERC require that any amendment be made to this Agreement, to accommodate any contractual entitlement to and/or ownership interest in or pertaining to any new electric capacity and/or energy resource that EMC may obtain after
the Effective Date. 
 5.4.1 PURPA Resources. Nothing herein shall limit EMC’s right to purchase electric capacity and energy
from a Qualifying Facility or other renewable resources pursuant to PURPA (“PURPA Resource”). If, during the Term, EMC purchases electric capacity and energy from a PURPA Resource with a nameplate capacity equal to or greater than one
(1) MW, then, for each Month during the period of such purchase: (i) the average hourly integrated electric energy delivered to EMC by such PURPA Resource during the Hours used for determination of the EMC Monthly Demand Quantity
determined in accordance with Section 7.1.4.1 or used for determination of the Monthly Billing Demand determined in accordance with Section 7.2.2.2 or Section 7.3.2.2, increased for losses between the point of measurement of
EMC’s Native Load and the Duke generation level, shall be added to the EMC Monthly Demand Quantity determined in accordance with Section 7.1.4.1 or to the Monthly Billing Demand determined in accordance with Section 7.2.2.2 or
Section 7.3.2.2 for such Month, as applicable; (ii) for purposes of calculating the electric energy charges under Sections 7.1.5, 7.2.3 and 7.3.3, as applicable, the amount of electric energy provided to EMC by such PURPA Resource during
an Hour, increased for losses between the point of measurement of EMC’s Native Load and the Duke generation level, shall be added to EMC’s Native Load and to the EMC Group Native Load for such Hour; and (iii) Duke shall credit EMC, on
a Monthly basis, an amount equal to the electric capacity and energy credits to which EMC would be entitled as set forth in Duke’s NCUC retail electric tariff Schedule PP-H or Schedule PP-N (as applicable), Interconnected to Distribution System
or 
  

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 Transmission System (as applicable), or its successor tariff, if the electric capacity and electric energy provided to
EMC by such PURPA Resource were provided to Duke pursuant to and in accordance with such schedules. The interconnection to Duke’s (rather than the EMC’s) Distribution System or Transmission System, as those terms are defined in the
schedules, will determine whether the Distribution System or Transmission System rates apply. EMC will coordinate with Duke to determine the proper application of these schedules. If Schedule PP-H or Schedule PP-N do not apply to the PURPA Resource,
then Duke shall credit EMC, on a Monthly basis, an amount equal to the electric capacity and energy credits to which EMC would be entitled under PURPA if the electric capacity and electric energy provided to EMC by such PURPA Resource were provided
to Duke pursuant to PURPA. EMC’s purchase of the electric capacity and energy from a PURPA Resource shall not affect the determination of the Annual Capacity Quantity determined in accordance with Sections 3.5.2.3.1, 3.5.2.3.2 or
3.5.2.3.3, as applicable. 
 Article 6 
 Priority of Service 
 6.1 Interruption of FFR Supplemental Service and Partial Requirements Service. FFR
Supplemental Service and Partial Requirements Service shall have an interruption priority equivalent to Duke’s Native Load. It is expressly understood and agreed that, except for Duke’s failure to comply with Section 6.2 or as
provided in Section 6.4, Duke shall not be liable to EMC for damages resulting from any such interruptions or impairment of FFR Supplemental Service or Partial Requirements Service. Duke shall use Commercially Reasonable Efforts to notify EMC
by telephone of any scheduled interruption or scheduled impairment of service hereunder and shall use Commercially Reasonable Efforts to confirm such notice by facsimile, electronic mail, or letter on the same date such notice was given. Duke shall
notify EMC by telephone of any unscheduled interruption or impairment of service hereunder as soon as reasonably practicable under the circumstances resulting in such unscheduled interruption or impairment of service. Duke shall use Commercially
Reasonable Efforts to remove all causes of such interrupted or impaired service hereunder. 
 6.2 Curtailments of Load. Except as provided in
Section 4.2.6, EMC’s Native Load shall be subject to curtailment only in accordance with this Section 6.2. In the event that Duke curtails Duke Native Load for any reason, including Force Majeure, EMC shall curtail its load as
directed by Duke. Except as provided in Section 4.2.6, Duke shall not adversely distinguish against EMC’s Native Load in curtailing Duke’s Native Load and directing EMC to curtail EMC’s Native Load; provided, however, that Duke
has sole responsibility to design all curtailments, and may order any manner of curtailment that Duke believes is appropriate so long as EMC’s Native Load and Duke’s Native Load present in the electrical area being curtailed are curtailed
on a non-discriminatory basis. In permitting EMC to restore EMC’s Native Load and restoring Duke’s Native Load that was curtailed, Duke shall not adversely distinguish against EMC’s Native Load, except as provided in
Section 4.2.6. The load curtailment and restoration provisions set forth in this Section 6.2 are in addition to, and without limitation of, the load curtailment and restoration provisions set forth in Section 4.2.6. 
  

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 6.3 Emergency Load Curtailment Program. EMC agrees to implement an emergency load curtailment program for the
curtailment of EMC’s Native Load in the event a load curtailment order is made by Duke. EMC shall comply with its obligation to implement and maintain an emergency load curtailment program and to curtail EMC’s Native Load in the manner
specified by Section 6.2. 
 6.4 Substitute Energy. In the event that Duke fails to deliver a sufficient quantity of electric energy to meet its
obligations to provide FFR Supplemental Service or Partial Requirements Service, as the case may be, and Duke’s failure to deliver such electric energy is not pursuant to a curtailment permitted under Section 4.2.6 or 6.2 of this
Agreement, or is otherwise excused under this Agreement, Duke shall pay to EMC an amount equal to EMC’s Cover Costs, if any, incurred for the electric energy that EMC obtained to replace such electric energy (“Substitute Energy”) Duke
failed to supply. EMC’s Cover Costs shall be equal to Substitute Energy Costs incurred by EMC for the Substitute Energy minus the costs that EMC would have incurred had Duke supplied the electric energy to EMC. EMC shall bill its Cover Costs to
Duke in accordance with the provisions of Article 13. In the event that EMC incurs Cover Costs for Substitute Energy over a period that extends past the Month in which Duke’s failure to deliver electric energy occurs, then Duke shall pay
the Cover Costs incurred in the following Month(s) in accordance with the billing and payment provisions of Article 13. 
 6.5 Substitute Energy
Costs. Substitute Energy Costs shall be equal to (i) in the case in which EMC contracts with an energy supplier to provide Substitute Energy to EMC, the cost that EMC, acting in a commercially reasonable manner, incurs to purchase such
Substitute Energy, or (ii) in the case in which Substitute Energy is provided to EMC by the Control Area operator, system operator, or similar entity providing such service on behalf of load (or load serving entities), the cost to EMC imposed
on EMC by such Control Area operator, system operator, or other entity providing such Substitute Energy. In either case, Substitute Energy Costs shall include ancillary services charges, if any, reasonably incurred by EMC to the point where electric
energy is delivered to the Transmission System or imposed to the point where electric energy is delivered to the Transmission System by the Control Area operator, system operator, or other entity providing Substitute Energy, including congestion
charges, energy imbalance charges, backup capacity charges, replacement capacity charges, deficient capacity charges, commitment fees, ratcheted demand and similar charges incurred by EMC in obtaining such Substitute Energy. 
 Article 7 
 Capacity and
Energy Charges 
 7.1 Charges During Commencement Date - December 31, 2006. 
 7.1.1 General. For FFR Supplemental Service provided during the period beginning on the Commencement Date, and continuing through December 31,
2006, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.1.4, the Duke Monthly Energy Charge set forth in Section 7.1.5.1, if applicable, the Monthly Scheduling Agent Service Charge set forth in Section 7.1.6 and,
if applicable, the Monthly Reserve Capacity Charge set forth in Section 7.4, minus the EMC Monthly Energy Credit set forth in Section 7.1.5.5. In addition, the Duke 
  

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 Monthly Reconciliation Charge, Blue Ridge Monthly Reconciliation Credit, and the Monthly Inter-EMC Energy Transfer
Reconciliation Charge shall be billed or credited as provided in Sections 7.1.5.11, 7.1.5.12, and 7.1.5.13. The charges set forth in this Section 7.1 are in addition to the other charges set forth in other sections of this Agreement.

 7.1.2 [intentionally omitted]. 
 7.1.3 [intentionally omitted]. 
 7.1.4 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to
the product of (i) the Monthly Demand Rate for the Year ($/kW-Month) and (ii) the Monthly Demand Amount for the Month (kW). The Monthly Demand Rate for 2006 shall be $0.75/kW-Month. The Monthly Demand Amount for a Month shall be equal to
the product of (i) the EMC Monthly Demand Quantity for the Month divided by the EMC Group Combined Monthly Demand Quantity for the Month and (ii) the EMC Group Monthly Demand Quantity for the Month. In no event shall the Monthly Demand
Quantity be less than zero. A sample calculation is provided in Attachment 7-2. 
 7.1.4.1 EMC Monthly Demand Quantity. The EMC
Monthly Demand Quantity for a Month shall be equal to the EMC Hourly Demand at the time of the Maximum Demand Hour for the Month minus EMC’s Base Obligation at the time of the Maximum Demand Hour. In no event shall the EMC Monthly Demand
Quantity be less than zero. 
 7.1.4.2 EMC Group Combined Monthly Demand Quantity. The EMC Group Combined Monthly Demand Quantity for
a Month shall be equal to the sum of (i) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of this Agreement, (ii) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of the
Duke-Piedmont Agreement, and (iii) the EMC Monthly Demand Quantity for the Month as determined in Section 7.1.4.1 of the Duke-Rutherford Agreement. 
 7.1.4.3 EMC Group Monthly Demand Quantity. The EMC Group Monthly Demand Quantity for a Month shall be equal to the difference between the EMC Group Hourly Demand and the EMC Group’s Base Obligation during
the Maximum Demand Hour of the Month, but in no event shall the EMC Group Monthly Demand Quantity for a Month be less than zero. The EMC Group Hourly Demand for an Hour shall be equal to the integrated sixty (60) minute demand of the EMC Group
Native Load during the Hour. The Maximum Demand Hour of a Month shall be the Hour in which the positive difference between the EMC Group Native Load and the EMC Group’s Base Obligation is the greatest (as determined by subtracting the EMC
Group’s Base Obligation from the EMC Group Native Load in every Hour of the Month, to determine the Hour in which such maximum difference for the Month occurs). 
 7.1.5 Monthly Energy Charges. 
 7.1.5.1 Duke Monthly Energy Charge. The Duke Monthly Energy
Charge for a Month shall be equal to the sum of the Duke Hourly Energy Charges for the Month. The Duke Hourly Energy Charge for an Hour shall be equal to the sum of the Blue Ridge Allocated Share of the Duke Total Hourly Energy Charge for the Hour
plus the Blue Ridge Allocated Share of the Inter-EMC Energy Charge for the Hour. 
  

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 7.1.5.2 Duke Total Hourly Energy Charge. The Duke Total Hourly Energy Charge for an Hour shall be
equal to the product of (i) one hundred thirteen percent (113%) of Duke’s Territorial Incremental Cost for the Hour and (ii) the EMC Group Energy Purchase Amount for the Hour. The amount of electric energy delivered by Duke to
the EMC Group during any Hour shall be calculated as set forth in Section 7.1.5.10. 
 7.1.5.3 Blue Ridge Allocated Share of Duke
Total Hourly Energy Charge. The Blue Ridge Allocated Share of the Duke Total Hourly Energy Charge for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Blue Ridge Allocated Share of the
Duke Total Hourly Energy Charge for an Hour is shown in Attachment 7-4. 
 7.1.5.4 Blue Ridge Allocated Share of Inter-EMC
Energy Charge. The Blue Ridge Allocated Share of the Inter-EMC Energy Charge for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Blue Ridge Allocated Share of the Inter-EMC Energy
Charge for an Hour is shown in Attachment 7-4. 
 7.1.5.5 EMC Monthly Energy Credit. The EMC Monthly Energy Credit for a
Month shall be equal to the sum of the EMC Hourly Energy Credits for the Month. The EMC Hourly Energy Credit for an Hour shall be equal to the sum of the Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour plus the
Blue Ridge Allocated Share of the Inter-EMC Energy Credit for the Hour. 
 7.1.5.6 EMC Group Total Hourly Energy Credit. The EMC Group
Total Hourly Energy Credit for an Hour shall be equal to the product of (i) ninety percent (90%) of Duke’s Territorial Decremental Cost for the Hour and (ii) the EMC Group Energy Credit Amount for the Hour. The amount of electric
energy delivered by the EMC Group to Duke during any Hour shall be calculated as set forth in Section 7.1.5.10. 
 7.1.5.7 Blue Ridge
Allocated Share of EMC Group Total Hourly Energy Credit. The Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the
Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit for an Hour is shown in Attachment 7-4. 
 7.1.5.8 Blue
Ridge Allocated Share of Inter-EMC Energy Credit. The Blue Ridge Allocated Share of the Inter-EMC Energy Credit for an Hour shall be calculated as set forth in Attachment 7-3. An example showing the calculation of the Blue Ridge Allocated
Share of the Inter-EMC Energy Credit for an Hour is shown in Attachment 7-4. 
 7.1.5.9 Calculation of Blue Ridge Hourly Energy
Amounts. The amount of electric energy delivered by Duke to Blue Ridge, and by Blue Ridge to Duke for an Hour, shall be calculated as follows: electric energy scheduled under this Agreement shall be scheduled using two (2) dynamic
(instantaneous) signals representing the difference between EMC’s Native Load and EMC’s Base Obligation. At the time of this Agreement, these signals are sampled once every four (4) seconds; the time period between each sample as
defined herein shall be referred to as an “Interval”. The time duration of the Intervals shall be subject to 
  

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 change based on Duke’s standard operating practices. A signal during an Interval in which EMC’s Native Load
exceeds EMC’s Base Obligation shall be referred to herein as an EMC Call Signal, indicating electric energy supplied by Duke to Blue Ridge. A signal during an Interval in which EMC’s Base Obligation exceeds EMC’s Native Load shall be
referred to herein as an EMC Put Signal, indicating electric energy being supplied by Blue Ridge to Duke. The integrated value of the EMC Call Signals (separate from and not combined with the EMC Put Signals) summed across all Intervals during the
Hour shall be used as the amount of electric energy supplied by Duke to Blue Ridge for the Hour, and the integrated value of the EMC Put Signals (separate from and not combined with the EMC Call Signals) summed across all Intervals during the Hour
shall be used as the amount of electric energy supplied by Blue Ridge to Duke for the Hour. The amount of electric energy supplied by Duke to Blue Ridge for the Hour, as calculated in this Section 7.1.5.9, shall be referred to herein as the
Blue Ridge Energy Purchase Amount for the Hour. The amount of electric energy supplied by Blue Ridge to Duke for the Hour, as determined in this Section 7.1.5.9, shall be referred to herein as the Blue Ridge Energy Credit Amount for the Hour.
An example showing the calculation of such amounts is shown in Attachment 7-5. 
 7.1.5.10 Calculation of EMC Group Energy
Amounts. The amount of electric energy delivered by Duke to the EMC Group, and by the EMC Group to Duke, for the Hour shall be calculated as follows: Electric energy scheduled under the Partial Requirements Agreements shall be scheduled using
two (2) dynamic (instantaneous) signals representing the differences between the EMC Group Native Load and the EMC Group’s Base Obligation. At the time of this Agreement, these signals are sampled once every four (4) seconds; the time
period between each sample as defined herein shall be referred to as an “Interval”. The time duration of the Intervals shall be subject to change based on Duke’s standard operating practices. A signal during an Interval in which EMC
Group’s Native Load exceeds EMC Group’s Base Obligation shall be referred to herein as an EMC Group Call Signal, indicating electric energy supplied by Duke to the EMC Group. A signal during an Interval in which EMC Group’s Base
Obligation exceeds EMC Group’s Native Load shall be referred to herein as an EMC Group Put Signal, indicating electric energy being supplied by EMC Group to Duke. The integrated value of the EMC Group Call Signals (separate from and not
combined with the EMC Group Put Signals) summed across all Intervals during the Hour shall be used as the amount of electric energy supplied by Duke to the EMC Group for the Hour, and the integrated value of the EMC Group Put Signals (separate from
and not combined with the EMC Group Call Signals) summed across all Intervals during the Hour shall be used as the amount of electric energy supplied by the EMC Group to Duke for the Hour. The amount of electric energy supplied by Duke to EMC Group
for the Hour, as calculated in this Section 7.1.5.10, shall be referred to herein as EMC Group Energy Purchase Amount for the Hour. The amount of electric energy supplied by the EMC Group to Duke for the Hour, as determined in this
Section 7.1.5.10, shall be referred to herein as the EMC Group Energy Credit Amount for the Hour. An example showing the calculation of such amounts is shown in Attachment 7-6. 
 7.1.5.11 Duke Monthly Reconciliation Charge. The Duke Monthly Reconciliation Charge for a Month shall be equal to the sum of the Duke Hourly
Reconciliation Charges for the Month. The Duke Hourly Reconciliation Charge for an Hour shall be equal to the product of (a) the Duke Total Hourly Energy Charge for the Hour minus the Duke Reconciliation Amount for the Hour and (b) the
Reconciliation Allocation Factor. The Duke 
  

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 Reconciliation Amount for an Hour shall be equal to the sum of (i) the Blue Ridge Allocated Share of the Duke Total
Hourly Energy Charge for the Hour as set forth in Section 7.1.5.3 of this Agreement, (ii) the Rutherford Allocated Share of the Duke Total Hourly Energy Charge for the Hour as set forth in Section 7.1.5.3 of the Duke-Rutherford
Agreement, and (iii) the Piedmont Allocated Share of the Duke Total Hourly Energy Charge for the Hour as set forth in Section 7.1.5.3 of the Duke-Piedmont Agreement. If the Duke Monthly Reconciliation Charge is positive, EMC shall pay such
amount to Duke. If the Duke Monthly Reconciliation Charge is negative, such amount shall be credited to EMC. 
 7.1.5.12 Blue Ridge
Monthly Reconciliation Credit. The Blue Ridge Monthly Reconciliation Credit for a Month shall be equal to the sum of the Blue Ridge Hourly Reconciliation Credits for the Month. The Blue Ridge Hourly Reconciliation Credit for an Hour shall be
equal to the product of (a) the EMC Group Total Hourly Energy Credit for the Hour minus the EMC Group Reconciliation Amount for the Hour and (b) the Reconciliation Allocation Factor. The EMC Group Reconciliation Amount for an Hour shall be
equal to the sum of (i) the Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour as set forth in Section 7.1.5.7 of this Agreement, (ii) the Rutherford Allocated Share of the EMC Group Total Hourly
Energy Credit for the Hour as set forth in Section 7.1.5.7 of the Duke-Rutherford Agreement, and (iii) the Piedmont Allocated Share of the EMC Group Total Hourly Energy Credit for the Hour as set forth in Section 7.1.5.7 of the
Duke-Piedmont Agreement. If the Blue Ridge Monthly Reconciliation Credit is negative, EMC shall pay such amount to Duke; if the Blue Ridge Monthly Reconciliation Credit is positive, such amount shall be credited to EMC. 
 7.1.5.13 Inter-EMC Energy Transfer Reconciliation Charge. The Monthly Inter-EMC Energy Transfer Reconciliation Charge for a Month shall be equal
to the sum of the Hourly Inter-EMC Transfer Reconciliation Charges for the Month. The Hourly Inter-EMC Transfer Reconciliation Charge for an Hour shall be equal to the product of (a) the Reconciliation Allocation Factor and
(b) (i) the sum of the Blue Ridge Allocated Share of the Inter-EMC Energy Charge for the Hour as set forth in Section 7.1.5.4 of this Agreement, the Rutherford Allocated Share of the Inter-EMC Energy Charge for the Hour as set forth
in Section 7.1.5.4 of the Duke-Rutherford Agreement, and the Piedmont Allocated Share of the Inter-EMC Energy Charge for the Hour as set forth in Section 7.1.5.4 of the Duke-Piedmont Agreement, minus (ii) the sum of the Blue Ridge
Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in Section 7.1.5.8 of this Agreement, the Rutherford Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in Section 7.1.5.8 of the
Duke-Rutherford Agreement, and the Piedmont Allocated Share of the Inter-EMC Energy Credit for the Hour as set forth in Section 7.1.5.8 of the Duke-Piedmont Agreement. If the Monthly Inter-EMC Energy Transfer Reconciliation Charge is negative,
EMC shall pay such amount to Duke. If the Monthly Inter-EMC Energy Transfer Reconciliation Charge is positive, such amount shall be credited to EMC. 
 7.1.6 Scheduling Agent Service Charge. In the event that this Agreement is terminated in accordance with the provisions of Section 3.5.2.2, EMC shall pay to Duke the Monthly Scheduling Agent Service Charge
commencing on the date that Scheduling Agent Services commence. The Monthly Scheduling Agent Service Charge for a Month shall be equal to two thousand five hundred dollars ($2,500) per Month. 
  

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 7.1.7 References to Other Agreements. For purposes of calculating the charges and credits under
Sections 3.5.2.3 and 7.1 (including charges and credits calculated pursuant to Section 7.1 in the event that EMC exercises its option pursuant to Section 3.5.2.3), (i) all references in this Agreement to quantities under or as
determined or set forth in the Duke-Piedmont Agreement shall be deemed to refer to such quantities during the period in which the Duke-Piedmont Agreement is in effect, before which time and after which time such quantities shall be deemed to be
equal to zero; and (ii) all references in this Agreement to quantities under or as determined or set forth in the Duke-Rutherford Agreement shall be deemed to refer to such quantities during the period in which the Duke-Rutherford Agreement is
in effect, before which time and after which time such quantities shall be deemed to be equal to zero. For example, if this Agreement and the Duke-Piedmont Agreement terminate August 31, 2008, and the Duke-Rutherford Agreement terminates
August 31, 2007, then during the period through August 31, 2007, EMC Group Native Load shall mean the sum of (i) the EMC Native Load under this Agreement, (ii) the EMC Native Load under the Duke-Piedmont Agreement, and
(iii) the EMC Native Load under the Duke-Rutherford Agreement, and during the period September 1, 2007 through August 31, 2008, EMC Group Native Load shall mean the sum of (i) the EMC Native Load under this Agreement and
(ii) the EMC Native Load under the Duke-Piedmont Agreement. In addition, for purposes of calculating the charges under Sections 3.5.2.3 and 7.1 (including charges and credits calculated pursuant to Section 7.1 in the event that EMC
exercises its option pursuant to Section 3.5.2.3), all references to “EMC Group” shall refer collectively to the members of such group that are served under those of the above-referenced Agreements that are then in effect
(e.g., in the above example, “EMC Group” would no longer include Rutherford effective September 1, 2007). 
  

	7.2	Charges During January 1, 2007 – December 31, 2010. 

 7.2.1 General. For service provided during the period January 1, 2007 – December 31, 2010, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.2.2, the Duke Monthly Energy
Charge set forth in Section 7.2.3 and, if applicable, the Monthly Reserve Capacity Charge set forth in Section 7.4. The charges set forth in this Section 7.2 are in addition to the other charges set forth in other sections of this
Agreement. 
 7.2.2 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to the product of (i) the Monthly
Billing Demand for the Month (kW) and (ii) the Monthly Demand Rate for the Year ($/kW-Month). 
 7.2.2.1 Monthly Demand Rate. The
Monthly Demand Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Monthly Demand Rate initially shall be calculated based on estimated data, and shall be subject to true-up after actual
data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of
FERC’s regulations. 
 7.2.2.2 Monthly Billing Demand. The Monthly Billing Demand for each Month of the Year shall be equal to
the average of the twenty (20) EMC Peak Hour Billing Demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during July and August of such Year. The EMC Peak Hour Billing 
  

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 Demand for an Hour shall be equal to the integrated sixty (60) minute EMC Native Load demand (kW) for the Hour minus
EMC’s Base Obligation (kW) for such Hour, but in no event shall the EMC Peak Hour billing Demand for an Hour (or the Monthly Billing Demand) be less than zero. The Monthly Billing Demand initially shall be calculated based on estimated data,
and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated
in accordance with Section 35.19a of FERC’s regulations. An example showing the calculation of this billing demand is shown in Attachment 7-7. 
 7.2.3 Monthly Energy Charge. The Duke Monthly Energy Charge for a Month shall be equal to the sum of the Monthly Fuel Charge and Monthly Variable O&M Charge for the Month. If the Duke Monthly Energy Charge
is positive, EMC shall pay such amount to Duke. If the Duke Monthly Energy Charge is negative, Duke shall credit such amount to EMC. 
 7.2.3.1 Monthly Fuel Charge. The Monthly Fuel Charge for a Month shall be equal to the sum of the Hourly Fuel Charges for the Month. The Hourly Fuel Charge for an Hour shall be equal to the product (i) EMC’s Native Load
demands during the Hour (kW) minus EMC’s Base Obligation for the Hour (kW) and (ii) the Fuel Rate for the Year ($/kWh). The Fuel Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The
Fuel Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided,
and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. Duke will keep EMC informed of the true-up subtotal on a semi-annual basis during a Year. 
 7.2.3.2 Monthly Variable O&M Charge. The Monthly Variable O&M Charge for a Month shall be equal to the sum of the Hourly Variable O&M
Charges for the Month. The Hourly Variable O&M Charges for an Hour shall be equal to the product of (i) EMC’s Native Load demands during the Hour (kW) minus EMC’s Base Obligation for the Hour (kW), and (ii) the Variable
O&M Rate for the Year ($/kWh). The Variable O&M Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Variable O&M Rate initially shall be calculated based on estimated data, and
shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in
accordance with Section 35.19a of FERC’s regulations. 
  

	7.3	Charges Commencing January 1, 2011. 

 7.3.1
General. For service provided commencing January 1, 2011 through the termination of this Agreement, EMC shall pay to Duke the Monthly Demand Charge set forth in Section 7.3.2 and the Duke Monthly Energy Charge set forth in
Section 7.3.3. The charges set forth in this Section 7.3 are in addition to the other charges set forth in other sections of this Agreement. 
  

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 7.3.2 Monthly Demand Charge. The Monthly Demand Charge for a Month shall be equal to the product
of (i) the Monthly Billing Demand for the Month (kW) and (ii) the Monthly Demand Rate for the Year ($/kW-Month). 
 7.3.2.1
Monthly Demand Rate. The Monthly Demand Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Monthly Demand Rate shall initially be calculated based on estimated data, and shall be
subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance
with Section 35.19a of FERC’s regulations. 
 7.3.2.2 Monthly Billing Demand. The Monthly Billing Demand for each month of a
Year shall be equal to the average of the twenty (20) EMC Peak Hour Billing Demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the Annual Planning Period for such Year (as
determined in Section 7.3.2.3). The EMC Peak Hour Billing Demand for an Hour shall be equal to the integrated sixty (60) minute EMC Native Load demand (kW) for the Hour minus the Partial Requirements Resources (kW) for such Hour, but in no
event shall the EMC Peak Hour Billing Demand (or the Monthly Billing Demand) be less than zero. The Monthly Billing Demand shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The
true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations.
Examples showing the calculation of the Monthly Billing Demand are shown in Attachment 7-8. 
 7.3.2.3 Determination of Annual
Planning Period. If the then-effective Annual Planning Period is the Summer Period, the Annual Planning Period for purposes of determining the Monthly Billing Demand for the Year under Section 7.3.2.2 shall be the Summer Period that occurs
within such Year (for example, if the Annual Planning Period in 2012 is the Summer Period, and the Summer Period is May - September, the Annual Planning Period for purposes of determining the Monthly Billing Demand for 2012 under
Section 7.3.2.2 is May 2012 - September 2012). If the then-effective Annual Planning Period is the Winter Period, the Annual Planning Period for purposes of determining the Monthly Billing Demand for the Year under Section 7.3.2.2 shall be
the Winter Period that ends in such Year (for example, if the Annual Planning Period in 2012 is the Winter Period, and the Winter Period is October - April, the Annual Planning Period for purposes of determining the Monthly Billing Demand for 2012
under Section 7.3.2.2 is October 2011 - April 2012). 
 7.3.2.4 Annual Percentage. No later than June 30, 2012, and each
June 30 thereafter during the Term, Duke shall calculate the Annual Percentage for the immediately preceding Year using the formula set forth in Attachment 7-9, and shall provide such calculation to EMC, together with supporting
information. The Annual Percentage may be a positive or negative value. In the event that the Annual Percentage for such Year is greater than positive four percent (4%), the Monthly Demand Rate for such Year calculated pursuant to
Section 7.3.2.1 shall be reduced by the percentage equal to the Demand Rate Adjustment Percentage. This reduction shall only apply to the Year for which it is calculated. This reduction shall be reflected in the true-up provided to EMC pursuant
to Section 7.3.2.1. In the 
  

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 event that the Annual Percentage for such Year is a positive four percent (4%) or less, or is negative, there shall
be no adjustments to the Monthly Demand Rate under this Section 7.3.2.4 for such Year. Illustrative examples showing the calculation of the Annual Percentage and Demand Rate Adjustment Percentage and the resulting reduction, if any, to the
Monthly Demand Rate are set forth in Attachment 7-10. 
 7.3.3 Monthly Energy Charge. The Duke Monthly Energy Charge for a
Month shall be equal to the sum of the Monthly Fuel Charge and Monthly Variable O&M Charge for the Month. 
 7.3.3.1 Monthly Fuel
Charge. The Monthly Fuel Charge for a Month shall be equal to the sum of the Hourly Fuel Charges for the Month. The Hourly Fuel Charge for an Hour shall be equal to the product (i) EMC’s Native Load demand during the Hour (kW) minus
the sum of (a) EMC’s Dispatched Baseload Resources for the Hour (kW) and (b) EMC’s Dispatched Combined Cycle Resources for the Hour for which EMC bears the Energy Cost pursuant to Section 4.3.3.1 (kW), and (ii) the Fuel
Rate for the Year ($/kWh). The Fuel Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Fuel Rate shall initially be calculated based on estimated data, and shall be subject to true-up after
actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided, and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a
of FERC’s regulations. Duke will keep EMC informed of the true-up subtotal on a semi-annual basis during a Year. 
 7.3.3.2 Monthly
Variable O&M Charge. The Monthly Variable O&M Charge for a Month shall be equal to the sum of the Hourly Variable O&M Charges for the Month. The Hourly Variable O&M Charge for an Hour shall be equal to the product of
(i) EMC’s Native Load demands during the Hour (kW) minus the sum of (a) EMC’s Dispatched Baseload Resources for the Hour (kW) and (b) EMC’s Dispatched Combined Cycle Resources for the Hour for which EMC bears the Energy
Cost pursuant to Section 4.3.3.1 (kW) and (ii) the Variable O&M Rate for the Year ($/kWh). The Variable O&M Rate for each Year shall be calculated in accordance with the formula rate set forth in Schedule 1. The Variable
O&M Rate shall initially be calculated based on estimated data, and shall be subject to true-up after actual data become available. The true-up shall be provided to EMC no later than June 30 following the Year in which service was provided,
and shall include interest on any refunds or surcharges calculated in accordance with Section 35.19a of FERC’s regulations. 
 7.4 Monthly
Reserve Capacity Charges. In the event that Duke provides Replacement Energy to EMC pursuant to Section 4.2.4 in an amount of five thousand (5,000) kW or greater during any Hour of a Year, EMC shall pay a Monthly Reserve Capacity
Charge equal to the product of (i) the Monthly Demand Rate as calculated in Section 7.3.2.1 and (ii) the amount (in kW) of reserves that would be required under Duke’s Generation Planning Practices for a generating resource of a
size equivalent to the amount of Replacement Energy provided to EMC (the “Reserve Capacity Amount”). This charge shall commence on the Day following the Day on which Duke provided Replacement Energy to EMC, and shall terminate on
December 31 of that Year. For example, if Duke provides a maximum amount of 100,000 kWh of Replacement Energy to EMC in any given Hour on July 15, 2007, and the reserves that would be required for a 100,000 kW generating resource under
Duke’s Generation Planning Practices is 17,000 kW, EMC shall be responsible for a Monthly Reserve Capacity Charge for 17,000 kW from July 16, 
  

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 2007, through December 31, 2007, subject to increase as provided in the next sentence. In the event that Duke
provides Replacement Energy to EMC for any additional Hours during such Year, and the amount of Replacement Energy provided during any such Hours is greater than that previously provided during the Year, then the Reserve Capacity Amount shall be
increased to reflect such greater amount of Replacement Energy, effective the Day after the Replacement Energy is provided. In the event that Duke provides Replacement Energy to EMC in a subsequent Year, the foregoing provisions shall apply, and EMC
shall pay Monthly Reserve Capacity Charges with respect to such Replacement Energy as provided above. Notwithstanding anything in this Section 7.4 to the contrary, the Monthly Reserve Capacity Charges shall terminate no later than
December 31, 2010. Any Monthly Reserve Capacity Charge, or increase in such charge, that begins on a Day other than the first Day of the Month shall be adjusted pro rata for that Month to reflect the number of Days during the Month in which the
charge or charge increase was in effect. 
 7.4.1 Force Majeure Events. Notwithstanding the provisions of Section 7.4, in the
event that Duke provides Replacement Energy to EMC due to the occurrence of a force majeure event, EMC shall not incur a Monthly Reserve Capacity Charge due to Duke’s provision of Replacement Energy for the first twenty-four (24) Hours
following such occurrence. For purposes of this Section 7.4.1, the term “force majeure” means an event or circumstance that: (i) prevents the party claiming to be affected by it from performing its obligations in whole or in
part; (ii) is not within the reasonable control of the claiming party, or the result of the negligence of the claiming party, and (iii) by the exercise of due diligence, the claiming party is unable to overcome in a commercially reasonable
manner, and, without limiting the scope of the definition, includes acts of God, or the public enemy, or insurrection, riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or
actions or restraints by court order or governmental authority or arbitration award (so long as the claiming party has not sought or has opposed, to the extent reasonable, such actions or restraints). It is expressly acknowledged that transmission
service interruptions or curtailments imposed by a transmission provider in response to transmission capacity or availability shortages shall not be “force majeure” events or circumstances for purposes of this Section 7.4.1.

 7.5 Payment. All charges or payments contemplated by this Article 7 shall be made in accordance with provisions of Article 13.

 7.6 Determination of EMC Capacity and Energy Demands. For purposes of determining the electric capacity and energy charges under this Agreement,
EMC’s Native Load demands shall be as determined under the NOA (which demands shall include the adjustments under the NOA for losses between the point of delivery under the NITSA and the point of measurement, and the corrections under the NOA
for any metering failures or inaccuracies), and shall be increased by ( 1 / (1 - TLF ), in order to reflect such demands at the generation level (i.e., at the point at which power is available for transmission). Metered receipts used in
billings and accounting hereunder will in all cases include adjustments for such losses. TLF shall be equal to the transmission loss factor set forth in the Transmission Provider’s OATT, and shall be expressed as a decimal. For example, if the
transmission loss factor in the Transmission Provider’s OATT is three percent (3%), then ( 1 / (1 - TLF )) shall be equal to ( 1 / (1 -.03)), or ( 1 / .97 ). In the event that the NOA is terminated, or the electric capacity and energy demands
measured under the NOA no longer include an adjustment for losses between the point of delivery under the NITSA and the 
  

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 point of measurement or provisions for correcting such demands for metering failures or inaccuracies, then, for purposes
of determining the capacity and energy charges under this Agreement, EMC’s metered electric capacity and energy demands shall be adjusted for losses between the point of delivery under the NITSA and point of measurement and further increased by
( 1 / (1-TLF)), in order to reflect such demands at the generation level (i.e., at the point at which power is available for transmission), and suitable arrangements shall be made by the Parties for correcting such demands due to
metering failures or inaccuracies. 
 Article 8 
 Scheduling Agent Services 
 8.1 Appointment of Duke as Scheduling Agent. EMC hereby appoints Duke as
Scheduling Agent, effective on the Effective Date (or such earlier date as is required so that Scheduling Agent may begin rendering Scheduling Agent Services by the Commencement Date), as agent for EMC for the Term, for the limited purposes set
forth in this Agreement, with full power and authority to render the Scheduling Agent Services, and Duke accepts such appointment. 
 8.1.1
Costs. The Parties acknowledge and agree that all costs and expenses incurred by Duke to provide Scheduling Agent Services are included in the charges set forth in Article 7 and, except as provided for in Section 7.1.6, EMC shall not be
charged any additional rates, charges or fees in connection with Duke’s provision of Scheduling Agent Services. 
 8.2 Scheduling Policies. In
providing Scheduling Agent Services hereunder, Duke shall comply with (i) the NCEMC policies set forth in Attachment 8-1 (“NCEMC Policies”), (ii) the SEPA policies set forth in Attachment 8-2 (“SEPA Policies”) and
(iii) the Transmission Provider’s OATT. 
 8.3 Protocols. In advance of the Commencement Date, and from time to time thereafter as the
Operating Committee may determine appropriate, the Operating Committee shall meet and make reasonable efforts to establish written protocols and procedures to implement the Scheduling Agent Services provided for hereunder, which shall be reviewed
and agreed to by the Parties; provided however, that the Operating Committee’s failure to agree upon such protocols and procedures shall not affect in any way the Parties’ respective rights and obligations under this Article 8. 

8.4 Scheduling Agent Services (Commencement Date through December 31, 2010). Beginning on the Commencement Date and continuing through
December 31, 2010, Duke shall provide the following Scheduling Agent Services: 
 8.4.1 Duke shall develop next-Day and multi-Day
forecasts of EMC’s Native Load. 
 8.4.2 Duke shall provide NCEMC with seven-Day and next-Day forecasts of EMC’s Native Load.

 8.4.3 Duke shall receive each Day the Nominations from MSCG, and confirm such Nominations with MSCG in writing, facsimile, e-mail, or any
other agreed-upon form of communication. 
  

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 8.4.4 Duke shall provide to NCEMC the Nominations that Duke receives pursuant to Section 8.4.3.

 8.4.5 Duke shall provide operational forecasts of EMC Native Load as may be requested by the Transmission Provider from time to time.

 8.4.6 Duke shall receive weekly availability schedules from SEPA. 
 8.4.7 Duke shall provide to SEPA week-ahead schedules and real-time adjustments to the week-ahead schedules of EMC’s SEPA Entitlement. 

8.4.8 Duke shall receive any information or notices from NCEMC, MSCG, or SEPA relating to any changes in the schedules of electric energy to be
delivered to serve EMC’s Native Load. 
 8.4.9 Duke shall provide daily and Monthly reconciliation and checkout services to EMC with
respect to each of NCEMC, SEPA, the Transmission Provider, and MSCG in connection with services provided by such entities to serve EMC’s Native Load. 
 8.4.10 Duke shall reasonably cooperate with EMC to enable EMC to address issues that may arise in connection with invoices or bills rendered to EMC by the Transmission Provider in connection with the delivery of
electric energy under the PPA, the WPSA, or EMC Contract Resources described in Sections 5.1.3, 5.1.4 and 5.1.5, the SEPA Contract to serve EMC’s Native Load. Such cooperation shall include providing EMC with data, records, and other
information available to Duke and related to the invoices or bills at issue. 
 8.4.11 If Duke has information that MSCG was not informed of
any transmission constraints or other impediments to deliveries under the PPA to the delivery points designated by MSCG, Duke shall, as promptly as reasonably practical, inform MSCG of any transmission constraints or other impediments to deliveries
under the PPA to the delivery points designated by MSCG. 
 8.4.12 Duke shall serve as EMC’s Purchasing – Selling Entity.

 8.4.13 Duke shall schedule to the Transmission Provider electric energy to be delivered from the EMC Contract Resources described in
Sections 5.1.3, 5.1.4 and 5.1.5. 
 8.5 Scheduling Agent Services (January 1, 2011 through Termination). Beginning on January 1, 2011, and
continuing through the date of termination of this Agreement, Duke shall provide the following Scheduling Agent Services: 
 8.5.1 Duke shall
develop next-Day and multi-Day forecasts of EMC’s Native Load. 
 8.5.2 Duke shall provide NCEMC with seven-Day and next-Day forecasts
of EMC’s Native Load. 
 8.5.3 Duke shall provide to NCEMC with the daily schedule of electric energy to be made available each Hour to
serve EMC’s Native Load under the WPSA. 
  

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 8.5.4 Duke shall receive weekly availability schedules from SEPA. 
 8.5.5 Duke shall provide to SEPA week-ahead schedules and real-time adjustments to the week-ahead schedules of EMC’s SEPA Entitlement. 

8.5.6 Duke shall provide operational forecasts of EMC Native Load as may be requested by the Transmission Provider from time to time. 
 8.5.7 Duke shall receive any information or notices from NCEMC or SEPA relating to any changes in the schedules of electric energy to be delivered to
serve EMC’s Native Load. 
 8.5.8 Duke shall provide daily and Monthly reconciliation and checkout services to EMC with respect to
NCEMC, SEPA, and the Transmission Provider in connection with services provided by those entities to serve EMC’s Native Load. 
 8.5.9
Duke shall reasonably cooperate with EMC to enable EMC to address issues that may arise in connection with invoices or bills rendered to EMC by the Transmission Provider in connection with the delivery of electric energy under the WPSA, EMC Contract
Resources described in Section 5.2, or the SEPA Contract to serve EMC’s Native Load. Such cooperation shall include, but is not limited to, providing EMC with data, records and other information available to Duke and related to the
invoices or bills at issue. 
 8.5.10 Duke shall serve as EMC’s Purchasing – Selling Entity. 
 8.5.11 Duke shall schedule to the Transmission Provider electric energy to be delivered from the EMC Contract Resources described in Section 5.2.

 8.6 New EMC Resources. If EMC obtains one or more new EMC Contract Resources in accordance with the provisions of Article 5 of this Agreement, the
Parties shall negotiate appropriate revisions to this Agreement or the protocols and procedures developed under Section 8.3 as necessary for Duke to provide Scheduling Agent Services hereunder in connection with such new EMC Contract Resources;
provided however, the failure of the Parties to agree on revisions to this Agreement or the protocols and procedures developed under Section 8.3 shall not relieve Duke of its obligation to schedule such new EMC Contract Resources. 

8.7 Errors in Schedules. If Duke is notified by the Transmission Provider, NCEMC, SEPA or a third party with respect to EMC Contract Resources described in
Sections 5.1.3, 5.1.4, 5.1.5 or 5.2, that any schedule provided by Duke as Scheduling Agent has been rejected, Duke shall provide to the Transmission Provider, NCEMC, SEPA or third party, as applicable, a substitute schedule for the Day in question
taking into account the information provided by the Transmission Provider, NCEMC, SEPA or third party, as applicable, in connection with such rejection. 
 8.8 EMC Responsibilities. In connection with Duke’s undertaking Scheduling Agent Services, EMC shall have the following obligations: 
 8.8.1 EMC shall provide Duke, as Scheduling Agent, with: (a) meter data such that Duke may calculate aggregate load in discrete locations or in aggregate load areas as determined 
  

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 by Transmission Provider; (b) five (5) years of the most recent historical load data; and (c) the Power
Requirements Study (or such successor document) that EMC submits annually to the RUS. 
 8.8.2 EMC shall make arrangements with NCEMC, SEPA,
the Transmission Provider, and any third party responsible for providing for deliveries of new EMC Resources as provided for in Section 8.6, as are necessary for those parties to communicate with, and accept or receive schedules or other
information submitted by or to Duke as Scheduling Agent. 
 8.8.3 During the period from the Commencement Date through December 31,
2010, EMC shall direct MSCG to communicate with, and provide Nominations to Duke as Scheduling Agent. 
 8.8.4 EMC shall reasonably cooperate
with Duke as necessary for Duke to assist EMC in addressing issues that may arise in connection with invoices or bills rendered to EMC by the Transmission Provider, as provided for in Sections 8.4.10 and 8.5.9. 
 8.9 Duke’s Liability. Duke shall be liable for any damages arising from Duke’s unexcused failure to comply with the provisions of this Article 8.

 8.10 Termination Assistance Service. Commencing six (6) Months prior to the scheduled termination of this Agreement and continuing through the
termination date of this Agreement (the “Termination Assistance Period”), Duke shall provide to EMC, or at EMC’s request to EMC’s designee, such reasonable cooperation, assistance and service to cause the orderly and timely
transition and migration of Scheduling Agent Services provided under this Agreement to EMC’s new energy supplier and/or scheduling agent without interruption or adverse effect (“Termination Assistance Service”). EMC may shorten or
terminate the Termination Assistance Period by providing written notice to Duke. 
 Article 9 
 Transmission and Ancillary Services 
 9.1 Delivery
Obligations. Duke shall be responsible for making all arrangements necessary and paying for all costs incurred under contractual arrangements necessary to deliver the electric energy provided hereunder to the Delivery Points. EMC shall be
responsible for making and paying for all contractual arrangements necessary for the delivery of the electric energy provided hereunder from the Delivery Points. 
 9.2 Transmission Arrangements. This Agreement does not obligate Duke to provide any Transmission Service or Ancillary Services, and does not confer upon EMC any rights to service over the Transmission System. EMC shall be responsible
for making separate contractual arrangements with the Transmission Provider for all Transmission Service and Ancillary Services to be provided to EMC. 
 9.3
Ancillary Services. Duke shall make Commercially Reasonable Efforts to assist in any effort by EMC to have the Transmission Provider recognize that the electric capacity and energy provided hereunder satisfies one or more of such Transmission
Provider’s Ancillary Services 
  

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 requirements; provided, however, that nothing in this Section 9.3 shall in any way obligate Duke to provide, make
arrangements for, or pay for any Ancillary Services except as expressly provided for in Section 9.3.1. 
 9.3.1 Energy Imbalance
Responsibility. Duke shall reimburse EMC in accordance with the provisions of Article 13 for any Hour in which, as a result of Duke’s unexcused failure to comply with the provisions of Article 8, Energy Imbalance Service charges are
incurred by EMC in accordance with the Transmission Provider’s OATT. EMC shall reimburse Duke in accordance with the provisions of Article 13 for any Hour in which, as a result of Duke’s unexcused failure to comply with the provisions of
Article 8, Energy Imbalance Service compensation is provided to EMC in accordance with the Transmission Provider’s OATT. 
 9.4 Regional Transmission
Organization. If an ISO, RTO, ITC or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider, then Duke and EMC will reasonably cooperate to make or enter into arrangements with
such entity to assist such entity with the implementation of this Agreement. It is expressly understood that neither the implementation of an ISO, RTO, ITC or other future organization, agency or authority that has been approved by FERC to serve as
the Transmission Provider nor the failure of the Parties to enter into the arrangements contemplated under this Section 9.4 shall relieve either Party of any obligations under this Agreement. 
 9.4.1 Cost Responsibility. Except as provided in Section 9.3.1, it is expressly understood that nothing herein shall be construed to in any
way relieve EMC of, or impose upon Duke, the responsibility for any fees, costs, or charges (including but not limited to congestion costs, transmission losses, or the costs or charges to secure financial transmission rights or the equivalent
thereof) that may be imposed on EMC by an ISO, RTO, ITC or other future organization, agency or authority that has been approved by FERC to serve as the Transmission Provider in connection with the provision of Transmission Service or Ancillary
Services. It is further expressly understood that Duke shall have no right or interest in any financial transmission rights or the equivalent thereof that are allocated, assigned, transferred or acquired by EMC. 
 9.4.2 Congestion Costs. In the event that the Transmission Provider implements a pricing methodology that allocates congestion costs on a
locational basis, in determining the dispatch order of Duke’s Generation System, Duke shall make no adverse distinction between Duke’s Native Load and Duke’s obligations to supply FFR Supplemental Service or Partial Requirements
Service, as applicable under this Agreement. Duke further agrees that, in the event it designates Delivery Points for Duke’s Generation System, Duke shall make no adverse distinction between Duke’s Native Load and Duke’s obligations
to supply FFR Supplemental Service or Partial Requirements Service, as applicable under this Agreement. The Parties shall reasonably cooperate with each other in an effort to develop and implement congestion management strategies designed to
minimize the incurrence of congestions costs associated with the delivery of electric energy under this Agreement. Duke will provide EMC with recommended strategies to manage such congestion costs, under terms that would not subject Duke’s
Native Load to any costs that Duke would not otherwise incur, and if EMC agrees with such recommendation, Duke will use Commercially Reasonable Efforts to implement the recommended congestion management strategies. Duke shall also use Commercially
Reasonable Efforts to comply with the congestion management rules that may be adopted by the Transmission Provider. 
  

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 Article 10 
 Operating Committee 
 10.1 Operating Committee. The Parties shall establish an Operating Committee consisting
of one (1) Representative each. The Operating Committee shall act only by unanimous agreement or consent. Duke and EMC shall designate their respective Representatives to the Operating Committee, plus any alternate, by written notice delivered
in accordance with Section 16.22 within thirty (30) Days after the Effective Date. Each Party’s Representative on the Operating Committee is authorized to act on behalf of such Party with respect to any matter arising under this
Agreement. 
 10.2 Duties of the Operating Committee. The Operating Committee shall facilitate the coordination and interaction between the Parties
with respect to the performance of the duties and obligations imposed on the Parties hereunder, including development or revision of appropriate protocols and procedures therefor. The Operating Committee shall not, however, have any authority to
modify or otherwise alter the Parties’ rights and obligations under this Agreement. 
 Article 11 
 Demand Side Management 
 11.1 Availability of Demand
Side Management Resource Programs. EMC may make available to EMC’s Native Load customers EMC Demand Side Management Resource Programs to the same extent and under comparable terms and conditions as Duke’s Demand Side Management
Resource Programs; provided, however, that EMC may not make available to EMC’s Native Load customers any demand side management resource programs or similar programs other than such EMC Demand Side Management Resource Programs unless EMC is
otherwise required by RUS or by applicable Law to make other demand management side resource programs available to EMC’s Native Load customers or is otherwise permitted under Section 11.7. Except as set forth in Section 4.2.6, the
terms and conditions of EMC Demand Side Management Resource Programs shall be applied to EMC’s Native Load customers and enforced by Duke in the same or comparable manner as they are applied to Duke’s Native Load retail customers and
enforced by Duke. Except as set forth in Section 4.2.6, in implementing and operating such EMC Demand Side Management Resource Programs, Duke shall make no adverse distinction with respect to EMC’s Native Load. 
 11.2 Changes to Demand Side Management Resource Programs. Upon ninety (90) Days prior written notice, Duke shall advise EMC of any modifications, additions,
or deletions that have been or will be made to the Demand Side Management Resource Programs, and the EMC Demand Side Management Resource Programs available hereunder to EMC’s Native Load customers shall be deemed to have been revised to reflect
such modifications, additions, or deletions without any further action required by either Party. 
  

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 11.3 Credits. Except for any EMC Demand Side Management Resource Program implemented pursuant to Section 11.7
of this Agreement, for each EMC Native Load customer that implements an EMC Demand Side Management Resource Program, EMC shall be entitled to a billing credit. Such billing credit shall be calculated in accordance with the credit applicable for the
Demand Side Management Resource Program, as specified in the rider approved and on file with NCUC for such Demand Side Management Resource Program. Each Month, Duke shall aggregate the total billing credits to which EMC is entitled pursuant to this
Section 11.3, and provide EMC a credit on the Monthly statement delivered in accordance with Section 13.2 equal to the total billing credits for such Month. 
 11.4 Necessary Arrangements. To the extent that an EMC Native Load customer agrees to implement an EMC Demand Side Management Resource Program, the Parties shall cooperate in preparing any detailed
implementation procedures and arrangements required to implement such program, provided that, except for any EMC Demand Side Management Resource Program implemented pursuant to Section 11.7 of this Agreement, Duke shall retain sole operational
control over such EMC Demand Side Management Resource Program implemented. The failure of the Parties to agree on detailed implementation procedures and obligations shall not affect Duke’s obligation to provide EMC with credits as determined by
Section 11.3. 
 11.4.1 Audits. For each EMC Demand Side Management Resource Program whose credit depends upon the number of EMC
Native Load customers, EMC shall be required to provide Duke written notice, by no later than January 31 of each Year, of the number of EMC Native Load customers with whom EMC has entered into arrangements pursuant to this Section 11.4 for
such EMC Demand Side Management Resource Program. Duke shall have the right periodically to perform audits, in accordance with the terms of Section 13.6 to verify the accuracy of the notices concerning the number of EMC Native Load customers
with whom EMC has entered into arrangements for each EMC Demand Side Management Resource Program. Based on the results of such audits, Duke shall be entitled, in accordance with the terms of Section 13.2.2 to revise or adjust the level of
credits that Duke previously had provided EMC. 
 11.5 Start-Up Conditions. No later than sixty (60) Days after the Effective Date, Duke shall
conduct a system-wide test of each EMC Demand Side Management Resource Program to determine its capability. Duke shall provide EMC with the results of such test no later than five (5) Business Days after the completion of the system-wide test.
Duke shall not be required to provide credits for EMC Demand Side Management Resource Programs unless the applicable standards and requirements specified for Duke’s Demand Side Resource Management Programs under the riders approved and on file
with the NCUC shall have been met, and the testing provided for in this Section 11.5 shall have been accomplished. 
 11.6 Periodic Testing. Duke
shall have the right periodically, but no less than once per Year, to conduct a system-wide test of each EMC Demand Side Management Resource Program to determine whether the tested EMC Demand Side Management Resource Program is capable of providing
a level of demand reduction equal to the level of the credit that EMC is, at the time of such system-wide test, receiving for such EMC Demand Side Management Resource Program. Subject to Section 11.6.1, if, at the time of such system-wide test,
one or more EMC Demand Side Management Resource Program(s) do not provide the level of demand reduction equal to the level of the credit that EMC is receiving for such EMC Demand Side Management Resource 
  

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 Program(s), Duke shall have the right to (i) reduce the credit provided to EMC to the actual level of demand
reduction provided at the time of the system-wide test and, in accordance with the terms of Section 13.2.2, to revise or adjust the level of credits that Duke previously had provided EMC, and (ii) provide written notice within ninety
(90) Days of the system-wide test, to cancel such EMC Demand Side Management Resource Program(s). 
 11.6.1 Retesting. Within
sixty (60) Days of any failure of a system-wide test for an EMC Demand Side Management Resource Program, EMC shall have the right to have Duke conduct a retest in order to demonstrate that such EMC Demand Side Management Resource Program is
capable of providing the level of demand reduction equal to the level of the credit that EMC previously was receiving for such EMC Demand Side Management Resource Program. To the extent that any such system-wide retest demonstrates that the EMC
Demand Side Management Resource Program is capable of providing demand reduction, the credit provided to EMC shall be restored to the prior level or such lesser level as demonstrated by the result of such rescheduled test and, to the extent
applicable, Duke shall, in accordance with the terms of Section 13.2.2, revise or adjust the level of credits that Duke previously had provided EMC and any notice to terminate rendered by Duke pursuant to 11.6 shall be null and void.

 11.7 EMC Demand Side Management. If Duke’s Annual Planning Period shifts from the Summer Period to the Winter Period, then EMC shall have the
authority to implement and call upon EMC Demand Side Management Resource Programs to control EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the Winter
Period to the level equal to but not below the average of (i) the average of EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the immediately preceding
Summer Period and (ii) the average of EMC’s Native Load demands coincident with the twenty (20) highest Hourly (integrated sixty-minute) Duke Schedule 1 Demands during the second preceding Summer Period. For example, if (i) the
Annual Planning Period during May 2012 - April 2013 is the Summer Period (May 2012 - September 2012), and the average of EMC’s integrated sixty (60) minute EMC Native Load demands coincident with the twenty (20) highest Hourly Duke
Schedule 1 Demands during such period is 100 MWs; and (ii) the Annual Planning Period during May 2013 - April 2014 is the Winter Period (October 2013 - April 2014), and the average of EMC’s integrated sixty (60) minute EMC Native Load
demands coincident with the twenty (20) highest Hourly Duke Schedule 1 Demands during the Summer Period immediately preceding such Winter Period (i.e., May 2013 - September 2013) is 102 MWs; then EMC may call upon EMC Demand Side Management
Resource Programs to control EMC’s integrated sixty (60) minute EMC Native Loads demands coincident with the twenty (20) highest Hourly Duke Schedule 1 Demands during October 2013 - April 2014 to the level equal to but not below
101 MWs. It is expressly acknowledged that (a) Duke shall also have the right to call upon any available EMC Demand Side Management Resource Program implemented pursuant to this Section 11.7, and (b) EMC shall not be entitled to a
billing credit under Section 11.3 (or any other provision of this Agreement) in connection with any EMC Demand Side Management Resource Program implemented pursuant to this Section 11.7. 
  

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 Article 12 
 Modification of This Agreement 
 12.1 Unilateral Modification. Except as provided in Section 12.3:

 No unilateral modification, amendment or other change to the terms of this Agreement shall be permitted or deemed effective for any reason,
and the rates, terms and conditions specified herein shall not be subject to change through application to FERC pursuant to the provisions of Sections 205 or 206 of the Federal Power Act absent the written agreement of both Parties. Any
amendment or modification to this Agreement shall be deemed enforceable if and only if such amendment or modification (a) has been reduced to writing, (b) has been agreed to and duly executed by both Parties in writing, and (c) has
received all requisite approvals of Governmental Authorities necessary for the effectiveness thereof. Each Party hereby irrevocably waives its rights, including any rights under Sections 205 and/or 206 of the Federal Power Act, to file a
complaint, request an investigation, or make any unilateral rate-change request seeking: (a) an order from FERC finding that any rate or provision in this Agreement is unjust or unreasonable; (b) any refund with respect to this
Agreement’s rates; or (c) any other unilateral modification to this Agreement. Each Party agrees not to make any such unilateral filing or request, and agrees and warrants that these covenants and waivers shall be binding notwithstanding
any regulatory, market, or other change that may occur at any time during the Term. 
 12.2 Mobile-Sierra Public Interest Standard. Except as
provided in Section 12.3, to the extent this Agreement is challenged by any person or its terms are subjected to review under the Federal Power Act or other Laws, the “just and reasonable” standard shall not apply. Instead, absent the
agreement of both Parties to the proposed change, and except as provided in Section 12.3, the standard of review for changes to this Agreement proposed by a Party, a non-party, or FERC acting sua sponte shall be the “public
interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956); Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). 
 12.3 Changes To Certain Charge Components. Notwithstanding anything else herein to the contrary, nothing contained herein shall be construed as affecting in any
way the right of either Party to unilaterally make application to FERC under Sections 205 or 206 of the Federal Power Act (i) to change the depreciation rates and nuclear decommissioning accrual used in Schedule 1, (ii) to
include additional cost items that are incurred in providing FFR Supplemental Service or Partial Requirements Service, as applicable, to EMC that are not included in Schedule 1, (iii) to exclude from Schedule 1 cost items
that are no longer incurred in providing FFR Supplemental Service or Partial Requirements Service, as applicable to EMC, or (iv) to change Schedule 1 to reflect changes in Duke’s accounting consistent with the Accounting
Requirements (including the addition of new accounts and the removal of obsolete accounts). In addition, in the event that (a) EMC implements new time-of-use rates or materially modifies its existing time-of-use rates, for some or all of
EMC’s Native Load customers, (b) such rates result in a reduction of EMC’s Monthly Billing Demand under Sections 7.2.2.2 or 7.3.2.2, and (c) such Monthly Billing Demand reduction does not result in a commensurate reduction
in the EMC demands that Duke utilizes in Duke’s Generation Planning Practices, Duke may make unilateral application to FERC 
  

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 under Section 205 of the Federal Power Act to change the calculation of the Monthly Billing Demand set forth in
Sections 7.2.2.2 or 7.3.2.2 to more appropriately reflect the costs that Duke incurs in providing service under this Agreement. In the event that Duke makes such a filing with FERC, EMC may oppose such filing, and, in addition, shall be free to
propose any other method for calculating the Monthly Billing Demands set forth in Sections 7.2.2.2 or 7.3.2.2 to more appropriately reflect the costs that Duke incurs in providing service under this Agreement. 
 12.4 Standard of Review for Permitted Changes. The Parties acknowledge that, as of the Effective Date, FERC has issued a proposed rule that, if adopted, would
specify the language for parties to include in future agreements where the parties intend that the “just and reasonable” standard of review apply to amendments to the agreements. Notwithstanding the language that ultimately may be adopted
by FERC, it is the intent of the Parties that the standard of review that FERC shall apply when acting on proposed modifications to this Agreement that are permitted under Section 12.3, either on FERC’s own motion or on behalf of a
signatory or non-signatory, shall be the “just and reasonable” standard of review rather than the “public interest” standard of review. 
 12.5 Scope of Waiver. Nothing in this Article 12 shall be construed to modify or limit any Party’s right to enforce the express terms of this Agreement as they are written in this Agreement. 
 Article 13  
 Billing and
Payment 
 13.1 Billing Period. Unless otherwise specifically agreed upon by the Parties in the terms of this Agreement or otherwise in writing,
the Month shall be the standard period for determining all billings and payments under this Agreement. 
  

	13.2	Billing Statements. 

 13.2.1 Initial
Statements. After the end of each Billing Period, Duke shall deliver to EMC a statement setting forth for the Billing Period (i) the sum of the electric energy delivered and/or received for all Hours during that Billing Period, and
(ii) Duke’s calculation of any amounts due from EMC under this Agreement for the Billing Period. In addition, in the event that there are amounts due from Duke to EMC under this Agreement for a Billing Period, EMC shall deliver to Duke,
after the end of such Billing Period, a statement setting forth for the Billing Period EMC’s calculation of any amounts due from Duke under this Agreement for the Billing Period. Notwithstanding the foregoing, a Party’s failure to render a
statement as set forth above shall not relieve the other Party from its obligation to make payment to the billing Party when such statement is rendered, provided such statement is rendered within one (1) year after the end of the Billing
Period. 
 13.2.2 Subsequent Payment Adjustments. The Parties understand that in certain cases Monthly billings will need to be made
on an estimated basis. In addition, the Parties understand that after-the-fact adjustments to amounts owed or revenues received may be made in order to reflect correctly the amounts payable by one Party to the other under this Agreement. Each Party

  

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 shall cooperate in good faith with the other Party to obtain the requisite information and perform the necessary
computations so as to true-up or otherwise adjust any estimated or adjusted billings promptly. 
 13.3 Timeliness of Payment. Unless otherwise agreed
by the Parties, all statements rendered under this Agreement, whether by Duke or EMC, shall be due and payable in accordance with each Party’s statement instructions on or before the later of the twentieth (20th) Day of each Month, or the tenth (10th) Day after receipt of the statement or; if such Day is not a Business Day, then on the next Business Day. Each Party shall make payments in immediately available funds by electronic funds
transfer, or by other mutually agreeable method, to the account designated in writing by the other Party. Any non-disputed amounts (other than amounts for which payment may be withheld pursuant to Section 13.5) not paid by the due date shall be
deemed delinquent and shall accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full. 
 13.4 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date
through netting, in which case all amounts owed by each Party to the other Party under this Agreement during the Billing Period, including any related interest, payments, and credits, shall be netted so that only the excess amount remaining shall be
paid by the Party who owes it. If no mutual debts or payment obligations exist and only one Party owes a debt or obligation to the other Party during the Monthly Billing Period, including but not limited to any interest, payments, or credits, that
Party shall pay such sum in full when due. 
 13.5 Disputes and Adjustments of Statements. A Party may, in good faith, dispute the correctness of any
statement or any adjustment to a statement, rendered under this Agreement or adjust any statement for any arithmetic or computational error within twenty-four (24) Months of the date the statement, or adjustment to a statement, was rendered. If
a statement or portion thereof, or any other claim or adjustment arising under this Agreement is disputed, the disputing Party shall provide written notice to the other Party (the “Billing Dispute Notice”) which (a) states the good
faith basis for the dispute, (b) specifies the amount in dispute (the “Disputed Amount”), if any, and (c) provides documentation reasonably supporting the determination of the Disputed Amount. The disputing Party shall, at its
option, (a) make payment to the other Party of the Disputed Amount under protest and thereafter shall be reimbursed by the other Party for any amount determined to be refundable after the resolution of such dispute or (b) withhold one half
(1/2) of the Disputed Amount and make payment to the other Party of the other one half (1/2) of the Disputed Amount. Payment to the other Party of one half (1/2) of the Disputed Amount shall not relieve the disputing Party of the
obligation to pay interest accrued at the Interest Rate from and including the date such payment was due to but excluding the date of such payment of any portion of such Disputed Amount withheld and determined to be due and payable after the
resolution of such dispute. Likewise, the other Party shall not be relieved of the obligation to pay interest accrued at the Interest Rate from and including the date such payment was made to but excluding the date of reimbursement of any portion of
such Disputed Amount paid and determined to be refundable after the resolution of such dispute. 
 In the event that a Party, by timely
notice to the other Party, disputes the correctness of a statement or portion thereof or any other claim or adjustment arising under this Agreement, the 
  

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 other Party shall promptly review the disputed statement or adjustment and shall notify the disputing Party, within
forty-five (45) Days following receipt of the Billing Dispute Notice, of the amount of any error or the amount of any payment or reimbursement that the disputing Party is required to make or is entitled to receive. Payments determined to be due
by the disputing Party shall be included on the next Monthly statement, and shall include interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Reimbursements determined to be due from the other Party
shall be included on the next Monthly statement, and shall include interest accrued at the Interest Rate from and including the due date to but excluding the date reimbursed. If the disputing Party disagrees with the other Party’s resolution of
any dispute, then the Parties shall submit the dispute for resolution in accordance with Article 14. 
 Inadvertent overpayments shall
be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the
Party receiving such overpayment. Any dispute with respect to a statement is waived unless the other Party is notified in accordance with this Section 13.5 within twenty-four (24) Months after the statement is rendered or any adjustment to
the statement is made. Neither Party shall have the right to challenge any statement, to invoke arbitration of the same or to bring any court or administrative action of any kind questioning the propriety or any other aspect of such statement after
a period of twenty-four (24) Months from the date the statement was rendered; provided, however, that in the case of a statement containing estimates, such twenty-four (24) Month period shall run from the date the statement is adjusted to
reflect the actual amounts due. 
 13.6 Records and Audits. Each Party shall keep such records and documents as may be needed to afford a clear and
complete history of all transactions under this Agreement, and the cost information used to calculate the charges for such transactions, for twenty-four (24) Months following the Month in which such transaction occurs. In addition, during such
twenty-four (24) Month period, EMC shall have the right to audit all records, including phone and computer records, related to Duke’s performance of its obligation not to adversely distinguish against EMC’s Native Load under
Section 4.3.3, Section 6.2, and Section 9.4.2 of this Agreement. If a Party initiates an audit through a notice to the other Party within the time period provided herein, the records and documents related to such audit are required to
be maintained under this Section 13.6, then the other Party will retain such records and documents until such audit is complete. If a Party issues an Original Notice pursuant to Article 14, then the Parties will retain the records and documents
relating to such dispute until the resolution of such dispute. In maintaining such records and documents, EMC and Duke may rely upon the logs and other meter information routinely recorded by Transmission Providers or utilities responsible for
coordination of the purchases and sales. During such twenty-four (24) Month period, either Party, or any third party Representatives of such Party, shall have the right, at its sole expense and during normal working Hours, to examine the
records of the other Party, including documents and records held by third parties, to the extent reasonably necessary to verify the accuracy of any statement, charge, or computation made pursuant to this Agreement. The Party requesting the audit
shall pay the costs associated with any independent auditor. Upon the request of the auditing Party, the document custodian of the other Party shall certify to the auditing Party that, to the best of such person’s knowledge after reasonable
investigation, the documents and records supplied are true and complete and, in the case of copies, are true, complete and correct copies of the original documents requested by the auditing Party. 
  

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 13.6.1 Procedures. EMC may make a written request for Duke to provide access to documents and
records to verify the accuracy of any statement, charge or computation made pursuant to this Agreement. Within ten (10) Business Days of the receipt of a written request from EMC, Duke shall either provide EMC, or its Representative, with
access to the documents and records which are the subject of the written request or provide EMC with copies of the original documents and records. If Duke elects to provide EMC, or its Representative, with access to the documents and records
requested by EMC, EMC or its Representative shall be permitted to make, at its own expense, copies of the documents and records to which it or its’ Representative has been provided access. Any copies made by EMC or its Representative shall be
subject to the confidentiality provisions set forth in Section 16.6. If Duke is unable to provide EMC with access or copies within ten (10) Business Days of the receipt of EMC’s written request because it is unable to locate or gain
access to such documents and records after reasonable investigation, Duke shall, within ten (10) Business Days of the receipt of such written request, provide EMC with notice describing the reasons for its failure to provide access to or copies
of the documents and records, its efforts to obtain such documents and records, and its best estimate of the time in which EMC will be permitted access to or provided copies of such documents and records. The twenty-four (24) Month period
provided for in Section 13.5 shall be tolled from the date Duke gives notice describing the reasons for its failure to provide access to or copies of the documents and records until Duke shall have (i) provided EMC with copies or access to
all documents and records specified in EMC’s written request or (ii) Duke’s document custodian shall have certified, that to the best of his knowledge after reasonable investigation that such document does not exist or Duke cannot
locate or produce such document or records. 
 13.6.2 Adjustments Resulting from Audits. If any audit or examination under this
Section 13.6 reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof shall be made promptly and shall accrue interest at the Interest Rate from the date the overpayment or underpayment was
made until paid; provided, however, that no adjustment for any statement or payment shall be made unless objection to the accuracy thereof was made prior to the lapse of twenty-four (24) Months from the rendition thereof, and thereafter any
objection shall be deemed waived. 
 13.6.3 Confidentiality. The auditing Party shall keep confidential any information obtained in
the audit. If requested, a Party shall provide to the other Party statements evidencing the quantity of electric energy provided under this Agreement for up to the prior twenty-four (24) Months. If an audit is requested with respect to any
records held by the a Party or a third party and those records cannot be disclosed to the requesting Party as a result of a confidentiality obligation, then to the extent legally permissible, the auditing Party shall select an independent auditor to
perform the audit consistent with the Parties’ rights under this Agreement and with such confidentiality arrangements as may be required by the confidentiality obligation in question. 
  

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 Article 14  
 Dispute Resolution 
 14.1 Arbitration. Except as otherwise provided below, any dispute arising out of or in
connection with this Agreement or its performance that cannot be resolved after good faith discussions and negotiations between the Parties as set forth in Section 14.2 shall be submitted to binding arbitration. A dispute with respect to
whether a Material Adverse Ruling meets the materiality standard specified in Section 2.3.2.2(c)(1) or (c)(2) shall be subject to dispute resolution pursuant to Section 2.3.2.2.2. A dispute with respect to an invoice shall first be subject
to the procedures set forth in Section 13.5, and if such dispute is not resolved in accordance with such procedures, then such dispute shall be submitted to binding arbitration in accordance with this Article 14. Any arbitration commenced
under this Article 14 shall be conducted in accordance with the North Carolina Arbitration Act, N.C.G.S. Section 1-567 et seq., and the non-administered arbitration rules and procedures of the CPR Institute for Dispute Resolution
(“CPR”) in effect at the time arbitration is commenced, except where specifically modified by this Agreement. 
 14.2 Negotiation and Notice of
Arbitration. Prior to initiating arbitration hereunder, a Party shall provide the other Party with written notice of the dispute, a proposed means for resolving the same, and support for the Party’s position (“Original Notice”).
Thereafter, Representatives of the Parties shall meet in person to discuss the matter and attempt in good faith to reach a negotiated resolution of the dispute. The Parties agree to provide and exchange supporting facts, records and information
regarding the dispute (including calculation and bases) as part of the good faith negotiations. If the Parties have not agreed upon a resolution of the dispute within thirty (30) Days after the provision of the Original Notice or such other
time period as the Parties may agree in writing to allow for discussions and negotiation (“Negotiation Period”), then at any time after the end of the Negotiation Period, a Party may provide written notice to the other declaring an impasse
(“Impasse Notice”) and initiating binding arbitration in accordance with the further provisions of this Article 14. A Party providing an Impasse Notice shall also contemporaneously notify all entities within the EMC Group of the
provision of its Impasse Notice. 
 14.3 Individual, Joint or Consolidated Arbitration. If, within thirty (30) Business Days of EMC’s
provision of an Impasse Notice, Piedmont and/or Rutherford also provides an Impasse Notice relating to substantially the same issue as raised by EMC’s Impasse Notice, or if Duke contemporaneously provides each of EMC, Piedmont and/or Rutherford
an Impasse Notice relating to substantially the same issue, then each entity within the EMC Group shall have ten (10) Business Days following the expiration of such thirty (30) Business Day period to provide written notification to Duke
stating whether or not such entity will voluntarily proceed in a joint or combined arbitration. 
 If EMC and one or more of the entities
within the EMC Group that have provided or received Impasse Notices within the specified time period relating to substantially the same issue elect to proceed individually or in more than one arbitration proceeding, Duke shall have the right to file
a motion to consolidate such Impasse Notices with EMC’s Impasse Notice in a single proceeding. The motion to consolidate such Impasse Notices shall be served within ten (10)
  

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 Business Days of the date when each entity within the EMC Group has provided notice as to whether or not it will
voluntarily proceed in a consolidated arbitration. Duke’s motion to consolidate shall be decided in the first commenced arbitration by one arbitrator (if the Streamlined Arbitration Process is used) or one (1) arbitration panel (if the
Standard Arbitration Process is used), provided that the arbitrator(s) shall satisfy the qualifications required pursuant to the third sentence of Section 14.6.1(1) or Section 14.6.2(2), as applicable, with respect to all entities in the
arbitration proceedings that are the subject of the motion to consolidate. If Impasse Notices are simultaneously given by EMC and one or more other entities within the EMC Group, then Duke shall have sole discretion to designate which of the Impasse
Notices shall be treated as the first given for purposes of determining which arbitrator(s) shall decide the motion to consolidate, and shall provide written notice of such designation in the motion to consolidate arbitrations. The procedures set
forth in Sections 14.6.1 and 14.6.2 for each arbitration proceeding in which the motion to consolidate was not filed shall be held in abeyance pending the decision on the motion to consolidate by the arbitrator(s) in the arbitration proceeding in
which the motion to consolidate was filed. 
 In determining whether consolidation of one or all is appropriate, the arbitrator(s) shall
consider whether the same or substantially similar issue or issues will be subject to the arbitration(s); EMC’s reasons for opposing consolidation and Duke’s reasons for seeking consolidation; and the fundamental fairness and efficiency in
proceeding individually, jointly or consolidated. The arbitrator(s) decision on the motion to consolidate shall be binding on the Parties and not subject to appeal. 
 In the event the motion to consolidate is denied (unless otherwise agreed by the Parties and the other entities of the EMC Group that have provided or received such Impasse Notices), the arbitrations shall each
proceed, subject to resolution of scheduling issues, with no arbitration being stayed as a result of the denial of the motion. In the event the motion to consolidate is granted, each entity within the EMC Group, other than the entity which is a
party to the proceeding in which the motion to consolidate was filed, shall move for dismissal of the respective arbitration actions in which it is a party. 
 14.3.1 Individual Treatment of EMC in Joint or Consolidated Arbitration. For purposes of joint or combined arbitration, all of the entities within the EMC Group participating in the proceeding shall be treated
as one (1) Party for purposes of Article 14, with the following exceptions. First, EMC shall be treated as a separate Party for purposes of Selection of Arbitration Process set forth in Section 14.4. Second, EMC may reach its own
independent, voluntary resolution with Duke and may pursue its own strategy and prosecute its case with its own legal counsel in the joint or combined arbitration. Third, EMC will be treated as a separate Party for purposes of discovery in
Section 14.6.1(4) or 14.6.2(4). Fourth, EMC will be treated as a separate Party for purposes of a Submission and for the adoption of the resolution and the associated monetary amount with respect to the ultimate decision of the arbitrator(s).
Fifth, EMC will be treated as a separate Party for purposes of the third sentence of Section 14.6.1(1) and Section 14.6.2(2). 
 14.4 Selection
of Arbitration Process. No later than thirty (30) Days following receipt of the Impasse Notice, or any longer time period as agreed to by the Parties, the Parties shall agree on which arbitration process specified herein to use: either the
Standard Arbitration Process or the 
  

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 Streamlined Arbitration Process. Should the Parties fail to agree on the arbitration process within thirty (30) Days
following receipt of the Impasse Notice, then the Standard Arbitration Process shall be used; provided however, that the Streamlined Arbitration Process shall be used for any dispute where the damages in dispute or other monetary value at stake is
alleged to be two hundred fifty thousand dollars ($250,000) or less for EMC or Duke, or in a joint or combined proceeding two hundred and fifty thousand dollars ($250,000) or less for each entity within the EMC Group that is participating in the
proceeding. If the damages in dispute or other monetary value at stake in a combined proceeding is alleged to be two hundred fifty thousand dollars ($250,000) or less for EMC and at least one (1) other of the entities within the EMC Group
participating in a joint or combined proceeding, the Streamlined Arbitration Process shall be used upon the request of either Party (or any of the other entities within the EMC Group participating in the proceeding) made within thirty (30) Days
following the receipt of the Impasse Notices. 
 14.5 Initiation of Arbitration. Unless otherwise agreed by the Parties and except as provided for in
Section 14.3, arbitration shall be deemed to be initiated when the arbitration process is agreed upon or otherwise determined pursuant to Section 14.4 (“Selection Date”). 
  

	14.6	Arbitration Processes. 

 14.6.1 Standard
Arbitration Process. The following shall be the process that is used, in accordance with this Article 14, as the Standard Arbitration Process under this Agreement. By mutual agreement, the Parties may in any given arbitration and for the
purposes of that arbitration alone modify or forego any procedural requirement or rule specified hereunder as part of the Standard Arbitration Process: 
 (1) Selection of Arbitrators. The Party initiating arbitration shall nominate one (1) arbitrator no later than fifteen (15) Days following the Selection Date. The other Party shall nominate one
(1) arbitrator no later than thirty (30) Days after the Selection Date. Each of the two Party-nominated arbitrators shall be unaffiliated with any of the Parties or their predecessors or Affiliates; shall not be current or former employees
of the nominating Party or its predecessors or Affiliates and shall be without material financial alliance with the nominating Party or its predecessors or Affiliates such that said arbitrator is able to participate in the arbitration without
evident partiality or actual bias in favor of the nominating Party; unless such pecuniary interest or affiliation is expressly acknowledged and waived by all Parties. The two (2) arbitrators shall jointly appoint a third (3rd), neutral arbitrator within thirty (30) Days after the nomination of the second (2nd) arbitrator. The neutral arbitrator shall be the chairperson of the tribunal. This thirty (30) Day period may be extended to sixty
(60) Days by agreement of both Parties. If the two (2) arbitrators are unable to agree on a third (3rd) arbitrator within the specified time period, then a third (3rd) arbitrator shall be selected by the CPR with due regard given
to the selection criteria herein and in the subsequent subsections of Article 14 and input from the Parties and other arbitrators. The Parties shall request CPR to complete selection of the third (3rd) arbitrator no later than thirty (30) Days following their request for selection of the arbitrator. Costs charged by CPR for this service shall be
borne one-half (1/2) by Duke and one-half (1/2) by EMC; provided that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3, the costs charged by CPR shall be 
  

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 borne one-half (1/2) by Duke and one-half (1/2) by the entities within the EMC Group that
participate in such consolidated arbitration. In the event CPR should fail to select the third (3rd) arbitrator
within thirty (30) Days following the Parties’ request for selection of the arbitrator, then any Party may petition a court of competent jurisdiction in the State of North Carolina to select the third (3rd) arbitrator. Due regard shall be given to the selection criteria and input from the Parties and other arbitrators. Each of the arbitrators shall
take an oath of neutrality. 
 (2) Additional Qualifications of Arbitrators. Unless otherwise agreed to by the Parties,
each of the arbitrators shall be competent and experienced in matters involving the electricity business in the United States. Such experience shall be conclusively demonstrated by ten (10) years or more of electric industry experience as a
practicing attorney or other experience or expertise as agreed to by the Parties. 
 (3) Replacement of Arbitrators. If
prior to the conclusion of the arbitration any arbitrator becomes incapacitated or otherwise unable to serve, then a replacement arbitrator with the qualifications specified herein shall be appointed in the manner and timeframe (such timeframe
starting anew following the unavailability of the arbitrator to be replaced) described in Section 14.6.1(1) above. 
 (4)
Discovery. Discovery and other pre-hearing procedures shall be conducted as set forth herein, as otherwise agreed by the Parties, or if they cannot agree, as determined by a majority of the arbitrators. Each Party shall have the right to
propound up to ten (10) interrogatories, the right to request relevant documents and records, conduct depositions (including depositions of experts), designate experts, and obtain the opinion of opposing experts. 
 (5) Hearing. Within fifteen (15) Days after completion of discovery, each Party shall contemporaneously submit by overnight
delivery and electronic mail to the arbitrators a precise statement of the dispute, a proposed resolution of the dispute, including a monetary amount and the supporting calculations if applicable, and the factual and/or legal support therefor (the
“Submission”). The next Business Day the Parties shall exchange complete Submissions by overnight delivery and electronic mail. Within fifteen (15) Days after receiving the other Party’s Submission, each Party may submit by
overnight delivery and electronic mail to the other Party and the arbitrators a reply statement to the other Party’s Submission. The Parties shall conduct a hearing in Charlotte, North Carolina no later than the later of (i) sixty
(60) Days following selection of the third (3rd) arbitrator, (ii) forty-five (45) Days after all
pre hearing discovery has been completed, or (iii) forty-five (45) Days after the issuance of the arbitrators’ decision denying a motion to consolidate pursuant to Section 14.3, at which the Parties shall present such evidence,
argument, and witnesses as they may choose. Prior to the beginning of the hearing, the Parties may submit a joint statement of undisputed facts and/or issues to be resolved, if the Parties so agree to submit such statement or if the arbitrators
order submission of the statement. If the Parties agree, or if allowed by a majority of the arbitrators, the Parties each may submit a post-hearing brief to the arbitrators within ten (10) Business Days of completion of the hearing. No reply
briefs shall be allowed unless otherwise permitted by a majority of the arbitrators. 
  

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 14.6.2 Streamlined Arbitration Process. The following shall be the process that is used, in
accordance with this Article, as the Streamlined Arbitration Process under this Agreement. By mutual agreement, the Parties may in any given arbitration and for the purposes of that arbitration alone modify or forego any procedural requirement or
rule specified hereunder as part of the Streamlined Arbitration Process: 
 (1) Selection of Arbitrator. No later than
thirty (30) Days following the Selection Date, the Parties shall agree upon a single arbitrator to conduct the arbitration. If the Parties are unable to agree on an arbitrator, then the arbitrator shall be selected by the CPR with due regard
given to input from the Parties and in conformity with the qualifications specified herein. The Parties shall request CPR to complete selection of the arbitrator no later than thirty (30) Days following their request for selection of an
arbitrator. Costs charged by CPR for this service shall be borne one-half (1/2) by Duke and one-half (1/2) by EMC; provided that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3, the costs charged by
CPR shall be borne one-half (1/2) by Duke and one-half (1/2) by the entities within the EMC Group that participate in such consolidated arbitration. In the event CPR should fail to select the arbitrator within seventy-five (75) Days
after the Selection Date, then any Party may petition a court of competent jurisdiction in the State of North Carolina to select the arbitrator. Due regard shall be given to the selection criteria and input from the Parties. The arbitrator shall
take an oath of neutrality. 
 (2) Qualification of the Arbitrator. The arbitrator shall be unaffiliated with any of
the Parties or their predecessors or Affiliates, such that the arbitrator: 
 (a) Shall not be a current or former employee,
advisor, attorney or consultant; 
 (b) Shall be without material financial alliance, such that said arbitrator is able to
participate in the arbitration without evident partiality or bias, unless such pecuniary interest or affiliation is expressly acknowledged and waived by all Parties; 
 (c) Shall be competent in matters involving the electricity business in the United States and shall have ten (10) years or more of
electric industry experience as a practicing attorney or such other experience or expertise as agreed by the Parties; and 
 (d) Shall take an oath of neutrality. 
 (3) Replacement of Arbitrator. If prior to the conclusion of the
arbitration the arbitrator becomes incapacitated or otherwise unable to serve, then a replacement arbitrator with the qualifications specified herein, shall be appointed in the manner and timeframe (such timeframe starting anew following the
unavailability of the arbitrator to be replaced) described in Section 14.6.2(1) above. 
 (4) Discovery. Discovery
and other pre-hearing procedures shall be conducted as set forth herein, as otherwise agreed by the Parties, or if they cannot agree, 
  

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 as determined by the arbitrator. Each Party shall have the right to propound up to ten
(10) interrogatories, the right to request relevant documents and records, conduct at least three (3) depositions, in addition to obtaining discovery of the opinions of any experts and the right to depose any experts (which are not
included in the three (3) depositions above). Additional discovery may be conducted only as allowed by the arbitrator or agreed by the Parties. 
 (5) Hearing. Within fifteen (15) Days after completion of discovery, each Party shall contemporaneously submit a Submission by overnight delivery and electronic mail to the arbitrator. The next Business
Day, the Parties shall exchange complete Submissions by overnight delivery and electronic mail. Within fifteen (15) Days after receiving the other Party’s Submission, each Party may submit by overnight delivery and electronic mail to the
other Party and the arbitrator a reply statement to the other Party’s Submission. The Parties shall conduct a hearing in Charlotte, North Carolina no later than the later of (i) forty-five (45) Days following selection of the
arbitrator, (ii) forty-five (45) Days after all pre-hearing discovery has been completed, or (iii) forty-five (45) days after the issuance of the arbitrator(s)’ decision denying a motion to consolidate pursuant to
Section 14.3, at which the Parties shall present such evidence, witnesses, and argument as they may choose. Unless otherwise ordered by the arbitrator, at least two (2) Days prior to the beginning of the hearing, the Parties may submit a
joint statement of undisputed facts and/or issues to be resolved if the Parties so agree to submit such statement or if the arbitrator orders submission of the statement. If the Parties agree, or if allowed by the arbitrator, the Parties may each
submit a post-hearing brief to the arbitrator within ten (10) Business Days of completion of the hearing. No reply briefs shall be allowed unless otherwise permitted by the arbitrator. 
 14.7 Decision. The arbitrator (if the Streamlined Arbitration Process is used) or a majority of the arbitrators (if the Standard Arbitration Process is used)
shall render his or their decision in favor of one Party or the other by adopting the resolution and the associated monetary amount requested by the prevailing Party in its Submission. The arbitrator(s) must determine the prevailing Party by
interpreting the meaning and intent of the language of this Agreement, applying the applicable Law to the relevant facts and selecting the arbitration ruling proposed by the Parties that most closely correlated to their decision based upon this
Agreement, the applicable Law and the relevant facts. In rendering the decision, the arbitrator(s) shall interpret and apply the terms and conditions of this Agreement, and consider any relevant evidence and testimony, but shall not have the power
to add to or modify any provision of this Agreement or to recommend any additions or modifications or to render a decision that does not adopt the resolution and the associated monetary amount requested by the prevailing Party in its Submission. The
arbitrator(s) shall render a decision within thirty (30) Days following the later of the conclusion of the hearing or the submission of post-hearing briefs. The decision shall be rendered in writing and shall be final and binding upon the
Parties. The decision may be filed in a court of competent jurisdiction, confirmed and may be enforced by any Party as a final judgment in such court, but shall have no precedential effect on future arbitrations under or arising out of this
Agreement except for purposes of enforcement in a court of competent jurisdiction or for the assertion of collateral estoppel/issue preclusion or res judicata/claim preclusion in another proceeding. The Parties expressly acknowledge that no
appeal of the arbitrator’s (or arbitrators’) decision shall be allowed. Except as provided in Section 16.6.4 of this Agreement, the arbitrator(s) shall have no authority to award special, exemplary, punitive, or consequential damages.

  

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 14.8 Expenses. The compensation and expenses of the arbitrator(s) shall be chargeable to and borne one-half
(1/2) by Duke and one-half (1/2) by EMC; provided, that if the arbitration proceeds as a consolidated proceeding pursuant to Section 14.3, the costs charged by CPR shall be borne one-half (1/2) by Duke and one-half (1/2) by
the entities within the EMC Group that participate in such consolidated arbitration; provided, however, that each Party shall bear the compensation and expenses of its own counsel and any retained or expert witnesses. Any costs incurred by a Party
in seeking judicial enforcement of any final decision rendered by arbitration conducted under this Article 14 shall be chargeable to and borne exclusively by the Party against whom such court order is obtained. It is expressly acknowledged that the
failure of the entities within the EMC Group that participate in a consolidated arbitration to reach agreement on the allocation of costs among such entities shall not increase Duke’s share of the costs incurred under this Section 14.8 or
Sections 14.6.1(1) or 14.6.2(1) above one-half (1/2) of the total costs at issue. 
 14.9 Effect of Dispute Resolution Procedures. The initiation
of the dispute resolution procedures under this Article 14 shall not affect the Parties’ respective obligations and rights under this Agreement during the pendency of any such procedures. 
 14.10 Confidentiality. The existence, contents, or results of any arbitration proceeding under this Article 14 shall be deemed to be Confidential Information and
shall be subject to the confidentiality provisions set forth in Section 16.6. 
 Article 15  
 Credit and Collateral Requirements 
 15.1 Posting
of Collateral. To protect either Party against potential default of payment or performance, any Party that experiences a Material Adverse Change (“MAC”) shall post as collateral an amount equal to the two (2) highest Months of
Duke’s billings to EMC for the previous twelve (12) Months. Such collateral shall be provided by the Party experiencing the MAC in cash, depository agreements, or letters of credit from a financial institution reasonably acceptable to the
Party not experiencing the MAC within three (3) Business Days after the date on which the MAC occurs. Any such depository agreement or letter of credit shall be in a form satisfactory to the Party not experiencing the MAC in its reasonable
discretion. A financing institution participating in a depository agreement or providing a letter of credit entered into for purposes of this Section 15.1 shall be deemed reasonably acceptable by the Party not experiencing the MAC if it has and
maintains a minimum long term credit rating of A- or better from S&P, A3 or better from Moody’s or A- or better from Fitch Ratings, or is with or from CFC and/or CoBank. 
 15.2 Material Adverse Change. Duke shall be deemed to have experienced a MAC if its unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated below BBB- by S &
P and below Baa3 by Moody’s. EMC shall be deemed to have experienced a MAC (a) if it fails to meet the then-current Debt Service Coverage Ratio required 
  

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 of EMC by RUS, as determined by averaging the two (2) highest annual ratios during the most recent three
(3) Years, and (b) the then-current Times Interest Earned Ratio required of EMC by RUS, as determined by averaging the two (2) highest annual ratios during the most recent three (3) Years. The failure by either Party to timely
fulfill a payment or reimbursement obligation, including, in the case of Duke a failure to pay Cover Costs, under this Agreement also shall constitute a MAC by that Party. 
 15.3 Continuing Nature of Collateral Requirement. The Party experiencing the MAC must continue to post the collateral until the MAC is cured. The Party not experiencing the MAC shall have the right to draw
upon, use, and dispose of all collateral that is posted under Section 15.1, if the Party experiencing the MAC fails to fulfill any of its payment or reimbursement obligations, including, in the case of Duke a failure to pay Cover Costs, under
this Agreement, and such failure constitutes an Event of Default. In the event any collateral is drawn upon by the Party not experiencing the MAC in accordance with the provisions of Section 15.5, the Party experiencing the MAC shall within
three (3) Business Days fully replenish the collateral to the monetary amount required by Section 15.1. 
 15.4 Interest on Cash Used as
Collateral. Any interest earned on collateral held under a depository agreement with a financial institution shall be paid to the Party posting the collateral in accordance with the terms of the depository agreement. If cash collateral is
posted, the Party holding the cash collateral shall pay interest to the Party posting the cash collateral at the Federal Funds Effective Rate. The Federal Funds Effective Rate is the rate for that Day opposite the caption “Federal Funds
(Effective)” as set forth in the weekly statistical release designated as H.15(519), or any successor publication published by the Board of Governors of the Federal Reserve System. The Party posting the cash collateral shall invoice the Party
holding the cash collateral for interest accrued during the previous Month and the Party holding the cash collateral shall pay such amount within ten (10) Days of receipt of such invoice. 
 15.5 Grant of Security Interest/Remedies. To secure their obligations under this Agreement, any Party posting collateral under Section 15.1 hereby grants to
the Party not experiencing the MAC a present and continuing security interest in, and lien on (and right of setoff against), and assignment of, all cash collateral, cash equivalents collateral and any and all proceeds resulting therefrom or the
liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of, that Party, and the posting Party agrees to take such action as the non-posting Party reasonably requires in order to perfect the non-posting Party’s
first-priority security interest in, and lien on (and right of setoff against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence or deemed occurrence and during the
continuation of an Event of Default, the Non-Defaulting Party may do any one or more of the following: (i) exercise any of the rights and remedies of a secured party with respect to all collateral, including any such rights and remedies under
Law then in effect; (ii) exercise its rights of setoff against any and all property of the Defaulting Party in the possession of the Non-Defaulting Party or its agent; (iii) draw on any outstanding letter of credit issued for its benefit;
and (iv) liquidate all collateral then held by or for the benefit of the Non-Defaulting Party free from any claim or right of any nature whatsoever of the Defaulting Party, including any equity or right of purchase or redemption by the
Defaulting Party. The Party drawing upon the collateral shall apply the collateral drawn upon or otherwise realized upon the exercise of any rights or remedies granted under this Section 15.5, to reduce the obligations of 
  

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 the Party posting the collateral under this Agreement (the posting Party remaining liable for any amounts owing after
such application), and to return any surplus collateral or proceeds remaining after the posting Party’s obligations are satisfied in full. 
 15.6
Notice, Information. Each Party shall provide the other Party written notice within two (2) Business Days of the occurrence of an MAC affecting the notifying Party or of the occurrence of any event that may reasonably cause a MAC. Duke
shall provide EMC a copy of Duke’s annual report, and any amendments thereto, within thirty (30) Days after the issuance/filing with the Securities and Exchange Commission of such report or amendment. EMC shall provide Duke with (a) a
copy of EMC’s RUS Form 7 each Year, and any amendments to such Form 7, within thirty (30) Days after the filing of such report or amendment with RUS, and (b) the annual Debt Service Coverage Ratio and Times Interest Earned Ratio
required of EMC by RUS for the Year in which the Effective Date occurs and for the two (2) immediately preceding Years. 
  

	15.7	Definitions. 

 “Accounting
Requirements” means any system of accounts prescribed by a federal regulatory authority having jurisdiction over the applicable Party or, in the absence thereof, the requirements of generally accepted accounting principles applicable to
businesses similar to that of the applicable Party; and provided, further, that EMC may use a uniform system of accounts prescribed from time-to-time by the RUS. 
 “CFC” means the National Rural Utilities Cooperative Finance Corporation. 
 “CoBank” means CoBank, ACB. 
 “Depreciation and Amortization Expense” shall mean an amount constituting the depreciation and amortization of EMC computed pursuant to Accounting Requirements. As used in the calculation of the Debt Service
Coverage Ratio, Depreciation and Amortization Expense shall mean the amount reported on the RUS Form 7, Part A, Line 12(b), its successor, or the equivalent. 
 “Debt Service Coverage Ratio” means the ratio determined as follows: for any Year add (i) Patronage Capital or Margins (RUS
Form 7, Part A, Line 28(b), or its successor), plus (ii) Interest Expense (RUS Form 7, Part A, Lines 15(b) and 16(b), or its successor), plus (iii) Depreciation and Amortization Expense for such year (RUS Form 7, Part A, Line 12(b), or its
successor), plus (iv) Short Term Interest Expense; and divide such total by the sum of all payments of Principal and Interest Expense during such year (RUS Form 7, Part N, Line 12(d), or its successor) plus Short Term Interest Expense; provided
however, that in the event that any long-term debt has been refinanced during such Year the payments of Principal and Interest Expense required to be made during such Year on account of such long-term debt shall be based (in lieu of actual payments
required to be made on such refinanced long-term debt) upon the larger of (a) an annualization of the payments required to be made with respect to the refinanced debt during the portion of such Year such refinancing debt is outstanding or
(b) the payment of Principal and Interest Expense required to be made during the following Year on account of such refinancing debt. 
  

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 “Equity” shall mean EMC’s equities (RUS Form 7, Part C, Line 35, its
successor, or the equivalent) computed pursuant to the Accounting Requirements. 
 “Interest Expense” as used in the
calculation of the Debt Service Coverage Ratio, Interest Expense shall mean the amount reported on the RUS Form 7, Part A, Lines 15(b) and 16(b), its successor, or the equivalent. 
 “Material Adverse Change” or “MAC” shall have the meaning specified in Section 15.2. 
 “Patronage Capital or Margins” as used in the calculation of the Debt Service Coverage Ratio or TIER, shall mean the amount
currently reported in the RUS Form 7, Part A, Line 28(b), its successor, or the equivalent. 
 “Principal and Interest
Expense” shall mean that amount of principal billed on account of total long-term debt of EMC as computed pursuant to the Accounting Requirements. As used in the calculation of the Debt Service Coverage Ratio, Principal and Interest Expense
shall mean the amount currently reported on RUS Form 7, Part N, Line 12(d), or its equivalent. 
 “Restricted
Rentals” shall mean all rentals required to be paid under finance leases and charged to income, exclusive of any amounts paid under such lease (whether or not designated therein as rental or additional rental) for maintenance or repairs,
insurance, taxes, assessments, water rates or similar charges. For the purpose of this definition the term “finance lease” shall mean any lease having a rental term (including the term for which such lease may be renewed or extended at the
option of the lessee) in excess of three (3) years and covering property having an initial cost in excess of two hundred fifty thousand dollars ($250,000) other than automobiles, trucks, trailers, other vehicles (including aircraft and ships),
office, garage and warehouse space and office equipment (including computers). 
 “Short Term Interest Expense”
shall mean an amount constituting the interest expense with respect to the total short-term debt of EMC, computed pursuant to Accounting Requirements, provided that all short-term debt obtained from either CFC or CoBank shall be excluded.

 “Times Interest Earned Ratio” or “TIER” shall mean the ratio determined as follows for each year: add
(i) Patronage Capital or Margins of EMC and (ii) Interest Expense of EMC, and divide the total so obtained by Interest Expense of EMC. 
  

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 Article 16  
 Additional Terms 
 16.1 Representations Warranties and Covenants. 
 16.1.1 Representations and Warranties. 
 16.1.1.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party on the Effective Date, the Commencement Date and the first Day of any Extension Term that: 
 (1) There is not pending or, to its knowledge, threatened against it or any of its Affiliates any Legal Proceeding that could materially
adversely affect its ability to perform its obligations under this Agreement; 
 (2) No event with respect to it has occurred
or is continuing that would constitute an Event of Default, and no such event would occur as a result of its entering into or performing its obligations or circumstances under this Agreement; 
 (3) It is acting as principal for its own account and has made its own independent decision to enter into this Agreement; 
 (4) It has knowledge and experience in financial matters and in the electric industry that enables it to evaluate the merits and risks of
this Agreement, and it is capable of assuming such risks. It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate and proper for it based on its own
judgment, is not relying upon the advice or recommendations of the other Party in doing so, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions, and risks of this Agreement; 
 (5) It has entered into this Agreement in connection with the conduct of its business, and it has the capacity or ability to make or take
delivery of all products or services referred to in this Agreement; 
 (6) The other Party is not acting as a fiduciary or an
advisor with respect to this Agreement; 
 (7) It is not Bankrupt and there are no proceedings pending or being contemplated
by it or, to its knowledge, threatened against it that could result in it being or becoming Bankrupt; and 
 (8) It is an
entity subject to the procedures and substantive provisions of the United States Bankruptcy Code applicable to U.S. corporations generally. 
  

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 16.1.1.2 Continuing Mutual Representations. Each Party represents, and warrants that on each of
the Effective Date, the Commencement Date and throughout the Term, it will cause the following to be materially true and correct: 
 (1) It is duly organized, validly existing and in good standing under the Laws of the state of its incorporation; 
 (2) It has all requisite corporate power to own, operate and lease its properties and carry on its business as contemplated by this Agreement; 
 (3) Subject to the conditions provided for in Article 3, it has all lender authorizations and authorizations from Governmental Authorities necessary for it to legally perform its obligations under this Agreement;

 (4) The execution, delivery and performance of this Agreement and any other documentation it is required to deliver under
this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms or conditions in its governing documents, any contract or other agreement to which it is a party or any Law applicable to it;

 (5) The individual(s) executing and delivering this Agreement and any other documentation required to be delivered under
this Agreement are duly empowered and authorized to do so at the time of such execution and delivery; and 
 (6) This
Agreement has been duly and validly executed and delivered by such Party and constitutes such Party’s legally valid and binding obligation enforceable against it in accordance with the terms thereof, subject to any Equitable Defenses.

 16.1.1.3 Additional Representations and Warranties of Duke. Duke further represents and warrants that: 
 (1) Subject to the conditions provided for in Article 3, Duke is fully authorized to sell the electric capacity and energy and Scheduling
Agent Services it is obligated to provide under this Agreement at the rates and terms contemplated by this Agreement; 
 (2)
Nothing in Duke’s contracts with other parties prevents Duke from fully performing its obligations under this Agreement; and 
 (3)(a) As of the Effective Date, Duke is a wholly owned direct subsidiary of Duke Energy Corporation, a Delaware corporation; and 
 (b) The provisions of the NCUC Order dated March 24, 2006, issued in Docket No. E-7, Sub. 795, the merger between Duke Energy Corporation, a North Carolina corporation, and Cinergy Corp., which closed on
April 3, 2006, and the conversion of Duke Energy Corporation, 
  

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 a North Carolina corporation, to Duke on April 3, 2006, did not adversely affect (1) the
franchise granted to Duke by the NCUC to provide NCUC regulated electric power generation, transmission, distribution, delivery, or sales and other related services to the Duke Native Load customers located within the State of North Carolina,
(2) the assets constituting Duke’s Generation System, or (3) Duke’s ability to perform its obligations under this Agreement. 
 16.1.1.4 Additional Representations and Warranties of EMC. EMC further represents and warrants that: 
 (1)
Subject to the conditions provided for in Article 3, EMC is fully authorized to purchase the electric energy and capacity, and Scheduling Agent Services provided under this Agreement at the rates and terms contemplated by this Agreement; and

 (2) Nothing in EMC’s contracts with other parties prevents EMC from fully performing its obligations under this
Agreement. 
 16.1.2 Covenants. 
 16.1.2.1 Duke. Duke covenants that: (i) neither Duke nor any of its Affiliates or subsidiaries shall, during the Term, take any action that could reasonably be anticipated to cause Duke to lose its authority to make wholesale
sales of power as contemplated under this Agreement; (ii) Duke shall not take any action during the Term that could reasonably be anticipated to cause EMC to lose its authority to purchase electric capacity and energy and Scheduling Agent
Services, as contemplated by this Agreement and, as a result, EMC loses its authority to purchase electric capacity and energy and Scheduling Agent Services; and (iii) Duke shall perform its obligations under this Agreement in accordance with
Prudent Utility Practice, including applicable NERC and SERC guidelines, and the Transmission Provider’s OATT. 
 16.1.2.2 EMC.
EMC covenants that: (i) it shall not, during the Term, take any action that could reasonably be anticipated to cause it to lose its authority to purchase, or Duke to lose its authority to provide, the electric capacity and energy and Scheduling
Agent Services as contemplated by this Agreement and, as a result, EMC loses its authority to purchase or Duke loses its authority to provide electric capacity and energy and Scheduling Agent Services; (ii) it shall, in the event one of the
sellers under a contract pursuant to which EMC has acquired an EMC Contract Resource breaches the terms of the contract in a manner that materially affects the quality or quantity of deliveries under such contract, use Commercially Reasonable
Efforts to pursue the enforcement of EMC’s contract rights; (iii) electric energy delivered by MSCG under the PPA qualifies as Firm Energy; and (iv) EMC shall perform its obligations under this Agreement in accordance with Prudent
Utility Practice, including applicable NERC and SERC guidelines, and the Transmission Provider’s OATT. 
  

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 16.2 Assignment. 
 16.2.1 General. 
 16.2.1.1 Duke shall not assign this Agreement or its rights hereunder without the
prior written consent of EMC, which consent shall not be unreasonably withheld; provided, however, that Duke may, without the consent of EMC, (a) transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds
hereof in connection with any financing or other financial arrangements (without relieving itself from liability hereunder), or (b) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of Duke’s
Generation System, and whose unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated BBB- or higher by S&P or Baa3 or higher by Moody’s (or, in the alternative, whose obligations under this
Agreement are guaranteed by a guarantor that meets the foregoing credit standards, provided that the form of the guaranty shall be reasonably satisfactory to EMC). Duke shall be relieved of all liability under this Agreement arising on and after the
effective date of an assignment that satisfies the requirements of subpart (b) above. 
 16.2.1.2 EMC shall not assign this Agreement or
its rights hereunder without the prior written consent of Duke, which consent shall not be unreasonably withheld; provided, however, that EMC may, without the consent of Duke, (a) transfer, sell, pledge, encumber or assign this Agreement or the
accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements (without relieving itself from liability hereunder), or (b) transfer or assign this Agreement to any person or entity (A) succeeding to
substantially the same Service Area and retail load as the EMC Native Load and to EMC’s rights under the EMC Contract Resources, and (B): 
 (i) if the transferee or assignee is an electric membership corporation organized under Article 2 Chapter 117 of the North Carolina General Statutes, it meets both the then-current Debt Service Coverage Ratio required of EMC by
RUS, as determined by averaging the two (2) highest annual ratios during the most recent three (3) years, and the then-current Times Interest Earned Ratio required of EMC by RUS, as determined by averaging the two (2) highest annual
ratios during the most recent three (3) years, or 
 (ii) if the transferee or assignee is not an electric membership corporation
organized under Article 2 Chapter 117 of the North Carolina General Statutes, then its unsecured, senior long-term debt obligations not supported by third party credit enhancements are rated BBB- or higher by S&P or Baa3 or higher by
Moody’s (or, in the alternative, whose obligations under this Agreement are guaranteed by a guarantor that meets the foregoing credit standards, provided that the form of the guaranty shall be reasonably satisfactory to Duke). EMC shall be
relieved of all liability under this Agreement arising on and after the effective date of an assignment that satisfies the requirements of this subpart (B)(ii). 
 16.2.1.3 This Agreement shall be binding upon and inure to the benefit of the permitted successors and permitted assigns of the Parties. Any assignment made without a consent required hereunder shall be void and of no
force or effect as against the non-consenting Party. No sale, assignment, transfer, or other disposition permitted by this Agreement shall affect, release, or discharge any Party from its rights or obligations under this Agreement, except as may be
expressly provided by this Agreement or by written agreement of the Parties. 
  

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 16.2.2 Assignment For Security. Notwithstanding any other provision of this Agreement, a Party,
without the other Party’s consent but, if such assigning Party is then a borrower of the RUS, only with the consent of the Administrator, may assign, transfer, mortgage or pledge its interest in this Agreement as security (an “Assignment
for Security”) for any obligation secured by any indenture, mortgage, or similar lien on its system assets without limitation on the right of the secured party to further assign this Agreement, including the assignment to create a security
interest for the benefit of the Government, acting through the Administrator, or for the benefit of any third party. 
 16.2.3 Assignment
By Administrator. After any Assignment for Security to the Administrator or other secured party (including any indenture trustee under any indenture securing the obligations of the Party), the Administrator or other secured party, without the
approval of the other Party, may (i) cause the interest in this Agreement of the Party who made the Assignment for Security to be sold, assigned, transferred or otherwise disposed of to a third party pursuant to the terms governing such
Assignment for Security, or (ii) if the Administrator or other secured party first acquires this Agreement, sell, assign, transfer or otherwise dispose of this Agreement to a third party; provided, however, that in either case the Party who
made the Assignment for Security is in default of its obligations to the Administrator or other secured party that are secured by such security interest. 
 16.3 Liability and Indemnification. 
 16.3.1 Indemnity. Each Party shall indemnify, defend, and hold harmless the
other Party from and against: 
 (1) Any Claims arising from or out of any event, circumstance, act, or incident first
occurring or existing during the period when control and title to any electric energy is vested in such Party as provided in Section 4.5, and 
 (2) Any Governmental Charges for which such Party is responsible under Section 16.7.2. 
 Notwithstanding the foregoing, no Party will be required to indemnify, defend, or hold harmless any other Party from any losses or Claims under this Section 16.3.1 to the extent that such loss or Claim was caused by the other
Party’s gross negligence or willful misconduct. 
 16.3.2 Liability Limitations. 
 16.3.2.1 Limitation of Remedies. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE
ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE RESPONSIBLE PARTY’S LIABILITY SHALL BE
LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR 
  

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 DAMAGES AT LAW OR IN EQUITY ARE WAIVED REGARDLESS OF THE FAULT, NEGLIGENCE, OR STRICT LIABILITY OF THE PARTY WHOSE
LIABILITY IS RELEASED OR LIMITED THEREBY. 
 IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, AND EXCEPT AS OTHERWISE
EXPLICITLY PROVIDED IN SECTION 16.6.4, THE RESPONSIBLE PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES (INCLUDING INTEREST AS PERMITTED BY APPLICABLE LAW) ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY
AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED (EXCEPT AS PROVIDED IN SECTION 16.29). 
 UNLESS EXPRESSLY HEREIN
PROVIDED, (INCLUDING AS PROVIDED IN SECTION 16.6.4) NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, MULTIPLE, EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS, OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR IN
CONTRACT UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY
PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE. 
 16.3.2.2 Disclaimer. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, EACH PARTY, WITH RESPECT TO THE SUPPLY OF ELECTRIC ENERGY AND CAPACITY TO THE OTHER, EXPRESSLY NEGATES ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO CONFORMITY TO MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE. 
 16.3.2.3 Duty to Mitigate. Each Party agrees that is has a duty to mitigate damages, and each covenants that it shall use commercially reasonable efforts to minimize any damages it may incur as a result of the other Party’s
performance or nonperformance of this Agreement. 
 16.4 Force Majeure. Unless otherwise provided by this Agreement, the term “Force
Majeure” means an event or circumstance that: (i) prevents the Party claiming to be affected by it (the “Claiming Party”) from performing its obligations in whole or in part under this Agreement; (ii) is not within the
reasonable control of the Claiming Party, or the result of the negligence of the Claiming Party, and (iii) by the exercise of due diligence, the Claiming Party is unable to overcome in a commercially reasonable manner, and, without limiting the
scope of the definition, includes acts of God, or the public enemy, or insurrection, riot, acts of terrorism, civil disturbance or disorder, strikes, fire, earthquakes, floods, storms or other natural disasters, or actions or restraints by court
order or Governmental Authority or arbitration award (so long as the Claiming Party has not sought or has opposed, to the extent reasonable, such actions or restraints). To the extent that the Claiming Party is prevented by Force Majeure from
carrying 
  

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 out, in whole or part, its obligations hereunder and such Party gives notice and details of the Force Majeure to the
other Party (the “Non-Claiming Party”) as soon as practicable, then the Claiming Party shall be excused from the performance of its obligations other than the obligation to make payments then due or becoming due in respect to performance
prior to the Force Majeure, except as otherwise explicitly provided in this Agreement. The Claiming Party shall remedy the Force Majeure event with all reasonable dispatch. The Non-Claiming Party shall not be required to perform or resume
performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure during the period that such Force Majeure remains in effect. Duke shall not adversely distinguish between EMC’s
Native Load and Duke’s Native Load in claiming an event of Force Majeure. 
 16.5 Events of Default and Remedies. 
 16.5.1 Events of Default. For the purposes of this Agreement, an “Event of Default” means, with respect to a Party (a “Defaulting
Party”), the occurrence of any of the following: 
 (1) The failure to make, when due, any payment or reimbursement
required by this Agreement (including any amounts to be credited by one Party to the other Party) or to post or maintain collateral required by this Agreement, if such failure is not remedied within three (3) Business Days after receipt of
written notice of such failure is given to the Defaulting Party by the other Party (“Non-Defaulting Party”). For the purposes of this Section 16.5.1(1), withholding one half (1/2) of a Disputed Amount in accordance with
Section 13.5 shall not constitute failure to make, when due, a payment; 
 (2) Any representation or warranty made by
such Party herein is false or misleading in any material respect when made or when deemed made or repeated; 
 (3) The failure
to perform any material covenant or material obligation set forth in this Agreement (except to the extent constituting a separate Event of Default under this Section 16.5), if such failure is not remedied within three (3) Business Days
after receipt of written notice thereof to the Defaulting Party, provided, that a Party’s failure to perform its obligations under Section 16.1.2.1(iii) or Section 16.1.2.2(iv) shall not in and of itself constitute a material failure
to perform a material covenant or material obligation unless such failure, in the case of Duke, results in a substantial and continuing degradation in reliability of service hereunder or, in the case of EMC, results in a substantial and continuing
degradation in performance hereunder; 
 (4) Such Party becomes Bankrupt; 
 (5) The loss of any authorization from Governmental Authorities necessary to perform its obligations hereunder in accordance with the
terms of this Agreement; 
 (6) Such Party consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all of its assets to, another entity and, at the 
  

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 time of such consolidation, amalgamation, merger, or transfer, the resulting, surviving, or transferee
entity fails to assume all of the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party; 
 (7) The occurrence and continuation of a default, event of default, or other similar condition or event that under one or more agreements
or instruments, individually or collectively, relating to indebtedness for borrowed money in an aggregate amount of not less than twelve million dollars ($12,000,000) in the case of EMC or one hundred fifty million dollars ($150,000,000) in the case
of Duke, that results in the Party’s indebtedness under such agreements or instruments to become immediately due and payable; and 
 (8) With respect to such Party’s guarantor, if any: 
  

	 	(a)	if any representation or warranty made by a guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated;


  

	 	(b)	the failure of a guarantor to make any payment required or to perform any other material covenant or obligation in any guaranty made in connection with this Agreement and such
failure shall not be remedied within three (3) Business Days after written notice; 

  

	 	(c)	a guarantor becomes Bankrupt; 

  

	 	(d)	the failure of a guarantor’s guaranty to be in full force and effect for purposes of this Agreement (other than in accordance with its terms); or 

  

	 	(e)	a guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any guaranty. 

 16.5.2 Notice of Event of Default. In the event a Party becomes aware of any event or circumstance that constitutes an Event of Default, such
Party shall promptly notify the other Party in writing and by telephone. 
 16.5.3 Effect of Event of Default. If at any time an Event
of Default with respect to a Defaulting Party has occurred and is continuing, the other Party (the “Non-Defaulting Party”) may do one or more of the following: 
 (1) If an Event of Default under Section 16.5.1(1) persists for ten (10) Days or longer, terminate this Agreement in accordance
with the notification required pursuant to Sections 2.3.2.1 and 2.3.3 of this Agreement; or 
  

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 (2) If an Event of Default (other than an Event of Default under Section 16.5.1(1))
persists for sixty (60) Days or longer, terminate this Agreement in accordance with Sections 2.3.2.1 and 2.3.3 of this Agreement, provided, however, that if the Defaulting Party is diligently pursuing cure, but such Event of Default is not
capable of being cured within sixty (60) Days, then the period for the Defaulting Party to cure such Event of Default shall be extended from sixty (60) Days to one hundred eighty (180) Days before the Non-Defaulting Party may exercise
its right to terminate this Agreement pursuant to this Section 16.5.3(2). 
 16.5.4 Enforcement of Remedies. The Non-Defaulting
Party may exercise any rights or remedies available at law or equity, subject to the provisions of Article 14 and Sections 15.5 and 16.3 of this Agreement. No delay or failure on the part of a Non-Defaulting Party to exercise any right or
remedy to which it may become entitled on account of an Event of Default shall constitute an abandonment of any such right, and the Non-Defaulting Party shall be entitled to exercise such right or remedy at any time during the continuance of an
Event of Default notwithstanding any delay in enforcing such right. No waiver of any Event of Default shall constitute a waiver of any later Event of Default; all such waivers shall be in writing and shall in no circumstance be deemed effective
unless such waiver is made in writing. All of the remedies and other provisions of this Section 16.5 shall be without prejudice and in addition to any right of setoff, recoupment, combination of accounts, lien, or other right to which any Party
or any of its Affiliates is at any time otherwise entitled, whether by operation of law or in equity, under contract, or otherwise. 
 16.6 Confidential
Information. 
 16.6.1 Prior Confidentiality Agreements Unaffected. Any preexisting confidentiality agreements entered into by the
Parties pertaining to the negotiation and development of this Agreement shall survive by their terms and shall not be considered modified by this Agreement. 
 16.6.2 Authorized Disclosure. Each Party agrees to preserve, to the maximum extent permitted by Law, the confidentiality of Confidential Information supplied to it by the other Party either during the
negotiations leading to this Agreement or during the course of implementing, performing or winding up this Agreement. A Party may disclose Confidential Information received from the other Party to the receiving Party’s Affiliates, auditors,
attorneys, consultants, advisors, persons providing financing to the receiving Party, other entities in the EMC Group that have entered into substantially similar agreements, and to other third parties as may be necessary for the receiving Party to
perform its obligations under this Agreement, provided that any such persons agree in writing to be bound by the confidentiality provisions of this Agreement. Notwithstanding anything contained in this Section 16.6, Confidential Information may
be disclosed to any Governmental Authority requiring such Confidential Information, provided that: (i) such Confidential Information is submitted under applicable provisions, if any, for confidential treatment by such Governmental Authority;
(ii) prior to such disclosure, the Party who supplied the information is given notice of the disclosure requirement (if time permits and the other Party’s counsel determines that such notice is permitted by Law) so that it may take at its
own risk and expense whatever action it deems appropriate, including intervention in any proceeding and the seeking of an injunction to prohibit such disclosure; and (iii) the Party subject to the Governmental Authority endeavors to protect the
confidentiality of 
  

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 any Confidential Information to the extent reasonable under the circumstances and to use its good faith efforts to
prevent the further disclosure of any Confidential Information provided to any Governmental Authority. The Parties recognize that Duke is required to file periodic reports with FERC that disclose certain price, quantity, and related data, and such
filings shall not be deemed a violation of this section. 
 16.6.3 Survival of Confidentiality Obligations. Confidential Information
received from the other Party shall be kept confidential in accordance with the terms of this Agreement for at least five (5) Years after the termination of this Agreement. 
 16.6.4 Right to Remedies. In the event of an unauthorized disclosure to a third party, the limitations on remedies contained in
Section 16.3.2.1 shall not apply, and, in the event of a breach, Parties shall not have an adequate remedy at law and accordingly shall, in addition to any other available legal or equitable remedies, be entitled to an injunction against such
breach without any requirement to post a bond as a condition of such relief. 
 16.7 Governmental Liabilities. 
 16.7.1 Minimization of Tax Liability. Each Party shall use reasonable efforts to implement the provisions of and to administer this Agreement in
accordance with the intent of the Parties to minimize all taxes, so long as neither Party is materially adversely affected by such efforts. 
 16.7.2 Governmental Charges. 
 16.7.2.1 With respect to sales of electric energy made by Duke to EMC, Duke shall pay or cause
to be paid all Governmental Charges imposed by any Government Authority on or with respect to such sales of electric energy to the extent such Governmental Charges arise prior to the Delivery Point. EMC shall pay or cause to be paid all Governmental
Charges on or with respect to such sale of electric energy to the extent such Governmental Charges arise after the Delivery Point (other than ad valorem, franchise, or income taxes that are related to the sale of such product and are, therefore, the
responsibility of Duke). 
 16.7.2.2 With respect to sales of electric energy by EMC to Duke, EMC shall pay or cause to be paid all
Governmental Charges on or with respect to the sale of the electric energy to Duke. 
 16.7.2.3 In the event a Party is required by Law to
remit or pay Governmental Charges that are the other Party’s responsibility hereunder, the Party ultimately liable for the Governmental Charge shall promptly reimburse the remitting Party for such Governmental Charges; provided further that tax
liabilities may be netted pursuant to Section 13.4 of this Agreement. Nothing will obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the Law. 
 16.7.3 Records. If with respect to either Party, any purchase or sale of electric energy is exempt from Governmental Charges it shall, upon
written request of the other Party, provide a certificate of exemption or other reasonably satisfactory evidence of exemption, and shall use reasonable efforts to obtain and cooperate with obtaining any exemption from or reduction of any
Governmental Charges. 
  

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 16.7.4 Cost of Obtaining FERC Approval. The Parties agree that all fees assessed by FERC, or
expenses incurred in obtaining the approval of FERC for this Agreement, shall be the sole responsibility of Duke. 
 16.7.5 Cost of
Obtaining RUS Approval. The Parties agree that all fees assessed by the RUS, or expenses incurred in obtaining the approval of RUS for this Agreement, shall be the sole responsibility of EMC. 
 16.8 Choice of Law. The validity, interpretation and performance of this Agreement and the rights and duties of the Parties arising out of this Agreement
shall be governed by and construed, enforced, and performed in accordance with the Laws of the State of North Carolina. No principle, doctrine, or rule of conflicts of law shall modify or alter the applicability of the Laws of the State of North
Carolina to this Agreement. 
 16.9 Survival of Obligations. Upon the termination of the Parties’ delivery, sale, purchase, and related service
obligations under this Agreement, any monies, penalties or other charges due and owing under this Agreement shall be paid, any corrections or adjustments to payments previously made shall be determined, and any refunds due shall be made, as soon as
practicable but no later than sixty (60) Days after such termination. All indemnity and confidentiality obligations and audit rights shall survive the termination of this Agreement in accordance with their respective terms. Upon the effective
date of any termination of this Agreement, each Party’s obligations provided for in this Agreement will survive termination and remain in effect solely for the purpose of complying with the provisions of this Section 16.9; OTHERWISE, AS
PROVIDED IN ARTICLE 2, TERMINATION OF THIS AGREEMENT IS ABSOLUTE, AND NO OTHER OBLIGATIONS, DUTIES, OR RIGHTS WHATSOEVER ARISING UNDER THIS AGREEMENT SHALL REMAIN IN EFFECT FOLLOWING THE TERMINATION OF THIS AGREEMENT. 
 16.10 Entire Agreement. This Agreement, and the Schedules and Attachments attached hereto, constitute the entire and integrated agreement between the Parties
relating to the rates, terms, and conditions set out in this Agreement as of the Effective Date. This Agreement supersedes all prior agreements (other than the Confidentiality Agreement which became fully executed on November 22, 2004) whether
oral or written, related to the subject matter of this Agreement. The terms of this Agreement, including any Schedules and Attachments attached hereto, are controlling, and no parol or extrinsic evidence, including but not limited prior drafts or
projections of future costs or rates, shall be used to vary, contradict, or interpret the express rates, terms, and conditions of this Agreement or as a basis for challenging the justness and reasonableness of any rate, term, or condition of this
Agreement. 
  

	16.11	Cost Projections. 

 16.11.1 Duke Cost
Projections. Duke makes no warranties or representations whatsoever concerning any cost or rate projections that it provided in connection with the negotiations leading up to the execution of this Agreement and any such projections provided by

  

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 Duke under Section 16.26 of this Agreement. EMC assumes the risk of reliance on any projected costs or rates
provided by Duke in connection with the negotiations leading up to the execution of this Agreement or any projections provided by Duke under Section 16.26. Any differences between projected costs or rates provided by Duke and actual costs or
rates will not limit or in any way affect the rates, terms, or conditions of this Agreement or any of the Parties’ rights and obligations hereunder. 
 16.11.2 EMC Cost Projections. EMC makes no warranties or representations whatsoever concerning any cost or rate projections that it provided in connection with the negotiations leading up to the execution of
this Agreement and any such projections provided by EMC during the Term. Duke assumes the risk of reliance on any projected costs or rates provided by EMC in connection with the negotiations leading up to the execution of this Agreement or any
projections provided by EMC during the Term. Any differences between projected costs or rates provided by EMC and actual costs or rates will not limit or in any way affect the rates, terms, or conditions of this Agreement or any of the Parties’
rights and obligations hereunder. 
 16.12 Unique Agreement. This Agreement shall not establish any precedent for any other services, or be relied
upon by either Party for any purpose other than for the services and payments provided herein. 
 16.13 No Transfer of Rights. Except as explicitly
provided herein, nothing in this Agreement shall be construed to transfer any rights or obligations that either Party has under any other agreement to the other Party. 
 16.14 No Partnership. The Parties are independent contractors. Nothing in this Agreement shall ever be deemed to create or constitute a partnership, joint venture, or association between the Parties, or to
impose a trust or partnership duty, obligation, or liability on or with regard to either of the Parties. 
 16.15 Third Parties. The provisions of
this Agreement shall not impart rights enforceable by any person or entity not a Party or not a permitted successor or assignee of a Party bound by this Agreement. This Agreement shall not be construed to create any third party beneficiary rights of
any sort. 
 16.16 Waiver. No waiver of all or any part of this Agreement shall be valid unless it (a) is reduced to writing, (b) expressly
states that the Parties agree to such waiver, and (c) is signed by the Parties. Except as specifically set forth herein, neither Duke’s nor EMC’s failure to enforce any provision or provisions of this Agreement shall in any way be
construed as a waiver of any such provision or provisions as to any future violation thereof, nor prevent it from enforcing each and every provision of this Agreement at such time or at any time thereafter. The waiver by either Duke or EMC of any
right or remedy shall not constitute a waiver of its right to assert said right or remedy, at any time thereafter, or any other rights or remedies available to it at the time of or any time after such waiver. 
  

	16.17	Time of Essence. Time is of the essence for, in, and throughout this Agreement. 

  

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 16.18 Headings. The descriptive headings of the various Articles and Sections of this Agreement (or any
Schedules and Attachments attached hereto) have been inserted for convenience of reference only and in no way shall be deemed to modify or restrict any of the terms or provisions hereof. 
 16.19 Severability. Wherever possible, each provision of this Agreement (including any Schedules or Attachments attached hereto) shall be interpreted in a manner as to be effective and valid under applicable
Law, but if any provision contained herein shall be found or ruled to be invalid, illegal, or unenforceable in any respect and for any reason, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality,
or unenforceable without invalidating the remainder of the provision or any provision of this Agreement, and in such event, the Parties shall attempt to negotiate amendments to this Agreement that would permit each Party to realize the equivalent
value of the economic bargain contemplated by this Agreement absent such finding or ruling. 
 16.20 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. 
 16.21 No Public
Announcement. The Parties agree that no press release or public announcement concerning the transaction contemplated by this Agreement will be made unless mutually agreed to by the Parties in writing; provided, however, such mutual agreement
will not be required if: 
 (a) The disclosing Party determines that disclosure is reasonably necessary to (i) comply
with applicable Laws of a Governmental Authority having jurisdiction; or (ii) obtain financing for the transaction contemplated by this Agreement; or 
 (b) the disclosure is limited to the following information: (i) the names of the Parties; (ii) the type of service being provided; (iii) the Term; and (iv) the total load being served. 

The disclosing Party shall provide the other Party with written notice of such disclosure at least five (5) Business Days prior to such
disclosure. 
 16.22 Notices. Unless otherwise provided in this Agreement, any notice, consent, or other communication required to be made under this
Agreement shall be in writing and shall be delivered in person, by certified mail (postage prepaid, return receipt requested), or by nationally recognized overnight courier (charges prepaid), in each case properly addressed to such Party as shown
below. Any Party may from time to time change its address, designee or contact information for the purposes of notices, consents, or other communications to that Party by a similar notice specifying a new address, but no such change shall become
effective until it is actually received by the Party to be charged with its contents. All notices, consents, or other communications required or permitted under this Agreement that are addressed as provided in this Section 16.22 shall be deemed
to have been given upon delivery if delivered in person, or upon deposit if delivered by overnight courier or certified mail. 
  

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 Duke: 
 Duke Power Company LLC 
 526 South Church Street 
 Charlotte, N.C. 28202 
 Attn: VP – Business Development and Origination 
 Phone: (704) 382-3114 
 Fax: (704) 382-4014 
 With a copy to: 
 Duke Power Company LLC 
 526 South Church Street 
 Charlotte, N.C. 28202 
 Attn: General Counsel 
 EMC: 
 Blue Ridge Electric Membership Corporation 
 1216 Blowing Rock Blvd., NE 
 P.O. Box 112 
 Lenoir, NC 28645-0112 
 Attn: Douglas W. Johnson, Executive Vice President and Chief Executive Officer 
 Phone: (828) 758-2383 
 Fax: (828) 754-9671 
 The Parties may agree on alternative methods of giving operational and scheduling
notices, consistent with the requirements of the applicable Transmission Providers and/or generation scheduling providers. 
 16.23 No Dedication of the
System. No undertaking by either Party to the other Party under any provision of this Agreement shall constitute the dedication of the system, or any portion thereof, of either Party to the public or to the other Party, and it is understood and
agreed that any such undertaking by either of the Parties shall cease after the termination date of this Agreement. The sale by Duke to EMC of electric capacity and energy under this Agreement does not constitute a sale, lease, transfer, or
conveyance of any kind of ownership interest in or to any of Duke’s facilities of any kind. 
 16.24 Stranded Costs. 
 16.24.1 If a Party or any of its Affiliates becomes entitled to receive compensation associated with stranded generation, transmission, distribution or
other assets or costs, the other Party shall have no claim or entitlement to any such compensation. 
 16.24.2 Neither EMC nor Duke shall
have the obligation or liability to the other Party for the payment of any amounts authorized by statute or ordered or approved by a Governmental Authority and that are attributable to or in any way arising from stranded 
  

 91 








 generation, transmission, distribution, or other assets or costs or any liability associated therewith, whether such
amounts are characterized as competitive transition charges, wire charges, or other costs or charges, provided that nothing herein shall limit the damages that may otherwise be recovered for an Event of Default. An order on stranded costs shall not
be deemed a Material Adverse Ruling. 
 16.25 Electric Peak Load and Energy Information to be provided by EMC. Prior to October 1, 2006, and each
October 1 thereafter during the Term, EMC shall provide Duke with forecast projections of (a) EMC’s Monthly electric peak load and electric energy requirements for the following Year and (b) EMC’s annual electric peak load
and electric energy requirements for the following ten (10) years, to the extent EMC has such information available, except that, after a Notice of Termination has been given, EMC shall not be obligated to provide such information for the
period after the termination date. To the extent such information is provided in a report to the RUS that is publicly available, EMC may satisfy this requirement by providing a copy of such report to Duke. 
 16.26 Demand and Energy Charge and Rate Information to be Provided by Duke. Prior to December 1, 2006, and each December 1 thereafter during the Term,
Duke shall provide EMC with forecast projections of (a) the annual electric capacity and energy rates under Sections 7.2 or Section 7.3 (as applicable) for the following year, (b) Monthly demand and electric energy charges under
Section 7.2 or Section 7.3 (as applicable) for the following year, and (c) annual demand and electric energy charges under Sections 7.2 or Section 7.3 (as applicable) for the lesser of the remainder of the Term or the following
ten (10) Years, except that, after a Notice of Termination has been given, Duke shall not be obligated to provide such information for the period after the termination date. 
 16.27 Further Assurances. If either Party determines in its reasonable discretion that any further instruments, assurances, or other things are necessary or desirable to carry out the terms of this Agreement,
the other Party shall execute and deliver all such instruments or assurances, and do all things reasonably necessary or desirable to carry out the terms of this Agreement. 
 16.28 Applicable Laws and Regulations. This Agreement is made subject to all existing and future applicable Laws and to all existing and future promulgated orders or other duly authorized actions of
Governmental Authorities having jurisdiction over the matters set forth in this Agreement. 
 16.29 Equitable Relief. Nothing in this Agreement shall
be construed to limit the injunctive or equitable powers of a court of competent jurisdiction. 
 16.30 PURPA Assistance. Duke shall provide
assistance to EMC, as EMC reasonably requests, to support EMC’s compliance with the generation efficiency and fuel diversity standards under PURPA. 
 16.31 SERC and NERC Data Reporting and Compliance Assistance. Duke shall report EMC’s actual load, forecasted load (as provided by EMC to Duke), and resource information to SERC and NERC and their successors, in a manner similar
to the manner in which Duke reports such information for other wholesale full or partial requirements customers with service as firm as Duke’s Native Load. In addition, Duke shall provide assistance and consultation to EMC, to the extent agreed
to by the Parties, to support EMC’s compliance with such organizations’ data reporting requirements. 
  

 92 








 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized
officers and copies delivered to each Party. 
  

			
	BLUE RIDGE ELECTRIC MEMBERSHIP CORPORATION
		
	By:	 	  

	Name:	 	Douglas W. Johnson
	Title:	 	Executive Vice President and Chief Executive Officer
	
	 DUKE POWER COMPANY LL
 Cd/b/a Duke
Energy Carolinas, LLC

		
	By:	 	  

	Name:	 	Ellen T. Ruff
	Title:	 	President

  

 93 








 Schedule 1 
 Annual Production Capacity and Energy Rates 
 Schedule 1 Methodology: 
 This formula sets forth the method that Duke will use to determine its annual Demand Rates, Fuel Rates, and Variable O&M Rates (collectively, “Rates”). The
Rates will be annual formula rate calculations. The Rates shall initially be estimated for the period January 1, 2007 - December 31, 2007, and shall be estimated continuing thereafter for successive twelve month periods (e.g., January 1,
2008 - December 31, 2008, etc.). Beginning July 1, 2008, and each July 1 thereafter, the Rates will be trued-up based on actual costs and loads for the most recent calendar year, using the formula rates set forth below. The calculations
will be based on Duke’s FERC Form 1 data and Duke’s company records. The true-up will include interest on any refunds or surcharges calculated in accordance with the methodology set forth in 18 C.F.R. § 35.19a or its successor. The
formulas for the Rates were designed to include all costs incurred by Duke to own, operate and maintain Duke’s Generation System. The formulas for the Rates may only be amended by the mutual agreement of the Parties or pursuant to
Section 12.3 of the Agreement. Disallowance or any other treatment of any such costs by the NCUC or any other Governmental Authority other than FERC will not have any effect on the inclusion of such costs in the formulas for the Rates as set
forth below. 
  

	I.	Definitions 

 Capitalized terms not otherwise defined in the Agreement and
as used in this formula have the following definitions: 
  

	 	A.	Allocation Factors 

  

	 	1.	Production Wages and Salaries Allocation Factor shall equal the ratio of Duke’s production-related direct wages and salaries to Duke’s total direct wages and
salaries excluding administrative and general wages and salaries. 

  

	 	2.	Production Plant Allocation Factor shall equal the ratio of the sum of Duke’s investments in Production Plant plus Production Related General Plant plus Production
Related Intangible Plant to investment in Total Plant in Service. 

  

	 	B.	Terms 

 Accumulated Deferred Income Taxes shall
equal the net of Duke’s electric deferred tax balances as recorded in FERC Account Nos. 281-283 and Duke’s electric deferred tax balance as recorded in FERC Account No. 190. 







 Administrative and General Expense shall equal Duke’s expenses as recorded in FERC Account
Nos. 920-935 excluding FERC Account Nos. 924, 928 and 930.1, and less EPRI dues as recorded in FERC Account No. 930.2. 
 Contra
AFUDC shall equal the reduction in amount of AFUDC recorded in FERC Account No. 107 due to recovery of construction period financing costs from customers resulting from inclusion of construction work in progress in rate base in any of Duke
Power’s retail or wholesale rate jurisdictions. 
 Demand Rate means the Demand Rate calculated in Part II below. 
 Depreciation Expense for Production Plant shall equal Duke’s production expense as recorded in FERC Account No. 403 plus an adjustment
to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to production plant construction work in progress included in rate base. 
 Duke’s Average Peak Hour Load for a year, with respect to the period January 1, 2007, through December 31, 2010, shall equal the
average of the twenty highest hourly (integrated sixty minute) Duke Schedule 1 Demands during July and August of the year; and with respect to the period beginning January 1, 2011, and continuing through the termination of the Agreement,
shall equal the average of the twenty highest hourly (integrated sixty minute) Duke Schedule 1 Demands during the Annual Planning Period of the year. 
 Duke Schedule 1 Demands means Duke’s Native Load demands: (i) compensated for losses to the point at which power is available for transmission, (ii) excluding (a) non-requirements wholesale
sales, as listed in Duke’s FERC Form 1, and (b) wholesale sales with a duration of one year or less, (iii) served by Duke’s Generation System the cost of which is included in Schedule 1. 
 FAS 109 Regulatory Assets and Liabilities shall equal the net of Duke’s FAS 109 balance as recorded in FERC Account No. 182.3 and any
Duke FAS 109 balance as recorded in FERC Account No. 254. 
 FAS 106 Regulatory Assets and Liabilities shall equal the net of
Duke’s FAS 106 balance as recorded in FERC Account No. 182.3 and any Duke FAS 106 balance as recorded in FERC Account No. 254. 
  

 2 








 General Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet
Account No. 101, FERC Electric Plant Account Nos. 389-399, and amounts in FERC Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 389-399, plus an adjustment to add Contra AFUDC related to general
plant construction work in progress included in rate base. 
 General Plant Depreciation Expense shall equal Duke’s general plant
expenses as recorded in FERC Account No. 403 plus an adjustment to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to general plant construction work in progress included in rate base.

 General Plant Depreciation Reserve shall equal Duke’s general plant reserve balance as recorded in FERC Account No. 108
plus an adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to production plant construction work in progress included in rate base. 
 General Tax Expense shall equal Duke’s expenses as recorded in FERC Account No. 408.1. 
 Intangible Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet Account No.101, FERC Electric Plant Account Nos.
301-303, and amounts in FERC Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 301-303, plus an adjustment to add Contra AFUDC related to intangible plant construction work in progress included in rate
base. 
 Intangible Plant Amortization Expense shall equal Duke’s intangible plant expenses as recorded in FERC Account
No. 404 plus an adjustment to increase depreciation expense to eliminate any reduction in depreciable base for Contra AFUDC related to intangible plant construction work in progress included in rate base. 
 Intangible Plant Amortization Reserve shall equal Duke’s intangible plant reserve balance as recorded in FERC Account No. 111 plus an
adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to intangible plant construction work in progress in rate base. 
  

 3 








 Net Asset Retirement Cost shall equal Duke’s asset retirement costs recorded in FERC Account
No. 101, less the associated accumulated depreciation included in FERC Account No. 108. 
 Other Amortization shall equal
Duke’s amortization expense recorded in FERC Account Nos. 406 and 407 that is related to production plant. 
 Other Regulatory
Assets/Liabilities shall equal the net of Duke’s regulatory assets and liabilities in FERC Account Nos. 182, 228 and 254, excluding FAS 109 Regulatory Assets and FAS 106 Regulatory Assets, that are production related. 
 Payroll Taxes shall equal those payroll tax expenses as recorded in Duke Power’s FERC Account No. 408.1. 
 Plant Held for Future Use shall equal Duke’s balance in FERC Account No. 105. 
 Prepayments shall equal Duke’s prepayment balance as recorded in FERC Account No. 165. 
 Property Insurance shall equal Duke’s expenses as recorded in FERC Account No. 924. 
 Production Related Amortization of Investment Tax Credits shall equal Duke’s credits as recorded in FERC Account No. 411.4 multiplied by
the Production Plant Allocation Factor. 
 Production Depreciation Reserve shall equal Duke’s production reserve balance as
recorded in FERC Account No. 108 plus an adjustment to increase the reserve to equal accumulated depreciation for depreciable base without reduction for Contra AFUDC related to production plant construction work in progress included in rate
base. 
 Production Operation and Maintenance (O&M) Expense shall equal Duke’s expenses as recorded in FERC Account Nos.
500-557. 
 Production Plant shall equal Duke’s gross plant balance as recorded in FERC Balance Sheet Account No. 101, FERC
Electric Plant Account Nos. 310-347 and Balance Sheet Account Nos. 102 and 106 tentatively classified to FERC Electric Plant Account Nos. 310-347, plus an adjustment to add Contra AFUDC related to production plant construction work in progress in
included in rate base. 
  

 4 








 Production Plant Materials and Supplies shall equal Duke’s balance as assigned to production
as recorded in FERC Account No. 154. 
 Revenue Tax Rate shall equal 1.0 minus the applicable revenue or gross receipts tax
rate(s) to which Duke is subject for the revenues or gross receipts that Duke receives under this Agreement 
 Tax Deduction for
Manufacturing Activities shall equal Duke’s annual amount of tax deduction under Section 102 of the American Jobs Creation Act of 2004. 
 Total Plant in Service shall equal Duke’s total gross plant balance as recorded in FERC Balance Sheet Account No. 101, Electric Plant Account Nos. 301-399, and amounts in FERC Balance Sheet Account
Nos. 102 and 106, plus an adjustment to add Contra AFUDC related to construction work in progress included in rate base. 
 Unamortized
Loss on Reacquired Debt shall equal Duke’s expenses as recorded in FERC Account No. 189. 
 Unamortized Gain on Reacquired
Debt shall equal Duke’s amounts included in FERC Account No. 257. 
 Variable Non-Fuel Production Operation and Maintenance
Expense shall equal Duke’s expenses as recorded in FERC Account Nos. 510, 512, 513, 528, 530, 531, and 544. 
  

	II.	Demand Rate 

 The Demand Rate shall be the Production
Capacity Revenue Requirement as determined in Part III below, divided by Duke’s Average Peak Hour Load, and further divided by the Revenue Tax Rate. The Monthly Demand Rate shall be equal to the Demand Rate divided by twelve (12). 

 

	III.	Production Capacity Revenue Requirement 

 The Production
Capacity Revenue Requirement shall equal the sum of Duke’s (A) Return and Associated Income Taxes, (B) Production Depreciation Expense, (C) Decommissioning Expense, (D) Production Related General Taxes, (E) Fixed
Production Operation and Maintenance Expense, (F) Purchased Power Capacity Expenses, (G) Production Related Administrative and General Expense, (H) Production Related Other Amortization Expense and (I) Capacity Credit for Revenue
from Non-Associated Utility Sales. 
  

 5 









	A.	Return and Associated Income Taxes shall equal the product of the Production Investment Base and the Cost of Capital Rate. 

  

	 	1.	Production Investment Base 

 The Production
Investment Base shall equal the average of the beginning and end-of-year balances of (a) Production Plant, plus (b) Production Related General and Intangible Plant, plus (c) Production Plant Held for Future Use, less
(d) Production Related Depreciation Reserve, less (e) Production Related Net Asset Retirement Costs, plus (f) Nuclear Fuel Inventory, plus (g) Fossil Fuel Inventory, less (h) Production Related Accumulated Deferred Income
Taxes, plus (i) Production Related Loss on Reacquired Debt, (j) less Production Related Gain on Reacquired Debt, plus (k) FAS 106 and FAS 109 Regulatory Assets/Liabilities, plus (l) Other Regulatory Assets/Liabilities, plus
(m) Production Prepayments, plus (n) Production Materials and Supplies, plus (o) Production Related Cash Working Capital. 
  

	 	(a)	Production Plant shall equal Production Plant as defined above. 

  

	 	(b)	Production Related General and Intangible Plant shall equal the sum of General Plant plus Intangible Plant multiplied by the Production Wages and Salaries Allocation Factor.


  

	 	(c)	Production Plant Held for Future Use shall equal Plant Held for Future Use multiplied by the Production Plant Allocation Factor. 

  

	 	(d)	Production Related Depreciation Reserve shall equal Production Depreciation Reserve plus Production Related General and Intangible Plant Depreciation Reserve; where
Production Related General and Intangible Plant Depreciation Reserve shall equal the sum of General Plant Depreciation Reserve plus Intangible Plant Amortization Reserve, multiplied by the Production Wages and Salaries Allocation Factor.


  

	 	(e)	Production Related Net Asset Retirement Costs shall equal Duke’s asset retirement cost balance as recorded in FERC Account No. 101 for Production Plant less the
associated accumulated depreciation balance as recorded in FERC Account No. 108. 

  

 6 









	 	(f)	Nuclear Fuel Inventory shall equal Duke’s balance of investment in nuclear fuel as recorded in FERC Account Nos. 120.1 – 120.6. 

  

	 	(g)	Fossil Fuel Inventory shall equal Duke’s balance of investment in fossil fuel as recorded in FERC Account No. 151. 

  

	 	(h)	Production Related Accumulated Deferred Income Taxes shall equal Total Accumulated Deferred Income Taxes multiplied by the Production Plant Allocation Factor.


  

	 	(i)	Production Related Loss on Reacquired Debt shall equal Unamortized Loss on Reacquired Debt multiplied by the Production Plant Allocation Factor. 

  

	 	(j)	Production Related Gain on Reacquired Debt shall equal Unamortized Gain on Reacquired Debt multiplied by the Production Plant Allocation Factor. 

  

	 	(k)	FAS 106 and FAS 109 Regulatory Assets/Liabilities shall equal Duke’s balance of FAS 106 related costs as recorded in FERC Account Nos. 182.3 and 254 multiplied by the
Production Wages and Salaries Allocation Factor, plus Duke’s balance of FAS 109 related costs as recorded in FERC Account Nos. 182.3 and 254 multiplied by the Production Plant Allocation Factor. 

  

	 	(l)	Other Regulatory Assets/Liabilities shall equal Duke’s balance of Other Regulatory Assets/Liabilities as appropriate; provided, that in order to include any amounts in
this item, Duke shall make a filing with FERC under Section 205 of the Federal Power Act. 

  

	 	(m)	Production Prepayments shall equal Duke’s Prepayments in FERC Account 165 multiplied by the Production Wages and Salaries Allocation Factor. 

  

	 	(n)	Production Materials and Supplies shall equal Production Plant Materials and Supplies as defined above. 

  

	 	(o)	Production Related Cash Working Capital shall be a 12.5% allowance (45 days/360 days) of Fixed Production Operation and Maintenance Expense, 

  

 7 








 Variable Production Non-Fuel Operation and Maintenance Expenses and Production Related Administrative and
General Expense. 
  

	 	2.	Cost of Capital Rate 

 The Cost of Capital Rate will equal
(a) Duke’s Weighted Cost of Capital, plus (b) Federal Income Tax plus (c) State Income Tax. 
 (a) The Weighted Cost of
Capital shall be calculated based upon a proxy capital structure of 45% long term debt and 55% common equity and shall equal the sum of: 
  

	 	(i)	the long term debt component, which shall equal the product of 45% and Duke’s long term debt expenses recorded in FERC Account Nos. 427, 428, 428.1, 429, 429.1, and 430
divided by Duke’s long-term debt balance as recorded in FERC Account Nos. 221 through 227, and 

  

	 	(ii)	the return on equity component, which shall equal the product of 55% and Duke’s return on equity (ROE) of 11.0%. 

  

	 	(b)	Federal Income Tax shall equal 

 [A+(B+C+D)/E] x (FT) /
(1-FT) 
 where FT is the Federal Income Tax Rate and A is the return on equity component, as determined in Sections III.A.2.(a)(ii) above, B
is Production Related Amortization of Investment Tax Credits, , C is Duke’s annual amount of Tax Deduction for Manufacturing Activities, D is the Equity AFUDC component of Production Depreciation Expense as defined in Section III.B below,
and E is Production Investment Base as Determined in III.A.1 above. 
  

	 	(c)	State Income Tax shall equal 

 [A+(B+C+ D)/E + Federal
Income Tax]x(ST)/ (l -ST) 
 where ST is the State Income Tax Rate. A is the return on equity component determined in Sections
lll.A.2.(a)(ii) above, B is the Amortization of Investment Tax Credits, C is Duke’s 
  

 8 








 annual amount of Tax Deduction for Manufacturing Activities, D is the equity AFUDC component of
Production Depreciation Expense as defined in Section III.B. below, E is the Production Investment Base as determined in III.A.l above and Federal Income Tax is the rate determined in Section III.A.2.(b) above. 
  

	 	B.	Production Depreciation Expense shall equal the sum of Depreciation Expense for Production Plant, plus an allocation of General and Intangible Plant Deprecation Expense
calculated by multiplying the sum of General Plant Depreciation Expense and Intangible Plant Amortization Expense by the Production Wages and Salaries Allocation Factor, less Decommissioning Expense as defined in III.C. below.


  

	 	C.	Decommissioning Expense shall equal $48,304,000 per year. 

  

	 	D.	Production Related General Taxes shall equal the sum of General Tax Expense less revenue related taxes and Payroll Taxes, multiplied by the Production Plant Allocation
Factor, and Payroll Taxes multiplied by the Production Wages and Salaries Allocation Factor. 

  

	 	E.	Fixed Production Operation and Maintenance Expense shall equal Duke’s expenses as recorded in FERC Account Nos. 500, 502, 505-507, 511, 514, 517, 519, 520, 523-525, 529,
532, 535-543, 545, 546, 548-554, 556, and 557. 

  

	 	F.	Purchased Power Expenses shall equal Duke’s expenses for purchased power recorded in FERC Account No. 555 less purchased power fuel costs included in the Fuel Rate
determined in Section IV below. 

  

	 	G.	Production Related Administrative and General Expenses shall equal the sum of (1) Administrative and General Expense multiplied by the Production Wages and Salaries
Allocation Factor, (2) Property Insurance multiplied by the Production Plant Allocation Factor, (3) Expenses included in FERC Account 928 related to FERC Assessments multiplied by the Production Plant Allocation Factor, and (4) any
other Production related expenses or assessments in FERC Account Nos. 928 or 930.1. 

  

	 	H.	Production Related Other Amortization Expense shall equal Duke’s amortization expense recorded in FERC Account Nos. 406 and 407 either directly assigned to production or
allocated to production using the Production Plant Allocation Factor or the Production Wages and Salaries Allocation Factor. 

  

 9 









	 	I.	Credit for Revenue from Non-Associated Utility Sales shall equal Duke’s revenues from inter-system sales from Duke’s Generation System recorded in FERC Account 447
to the extent such sales are not included in the determination of Duke’s Average Peak Hour Load, less fuel recovered from such sales as determined in the Fuel Rate below, multiplied by 2/3. 

  

	 	IV.	Fuel Rate 

 The Fuel Rate shall equal F/S, and further
divided by the Revenue Tax Rate, where: 
 F is the expense of fossil and nuclear fuel and purchased economic power, as defined in 18 C.F.R.
§ 35.14(a)(2) (2005), for the calendar year period; provided that for purposes of this calculation described in 18 C.F.R. § 35.14(a)(2) (2005) the cost of fossil fuel shall include, in addition to those items set forth in 18
C.F.R. § 35.14(a)(6), expenses recorded in Account No. 509 for the calendar year period. 
 S is all kWh sold (compensated for
losses to the point at which power is available for transmission ), excluding inter-system sales, for the calendar year period. 
  

	 	V.	Variable O&M Rate 

 The Variable O&M rate shall
equal Variable Non-Fuel Production Operation and Maintenance Expense divided by S as determined in Section IV above, and further divided by the Revenue Tax Rate. 
  

 10 








 Attachment 3-1 
 Example showing the calculation of the Excess Annual Capacity Charges in the 
 Duke-Blue Ridge
Agreement, Duke-Piedmont Agreement 
 and Duke-Rutherford Agreement 
 The purpose of this attachment is to provide an example showing the calculation of the Excess Annual Capacity Charges provided in Section 3.5.2.3.5
of the above-identified agreements. Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R, respectively, and collectively as the EMC Group. 
 Assumptions: 
 Hour of maximum integrated
sixty minute Duke Schedule 1 Demands during July and August 2007: 4:00-5:00 pm, July 14, 2007. 
  

							
	 	  	 BR
 (kW)
	  	 P
 (kW)
	  	 R
 (kW)

	 EMC Coincident Peak Demand (7-14-07 4-5 pm)
	  	225,000	  	150,000	  	425,000
	 EMC Base Obligation (7-14-07 4-5pm)
	  	125,000	  	175,000	  	300,000

 EMC Group Coincident Peak Demand (7-14-07, 4-5 pm): 800,000 kW 
 EMC Group Base Obligation (7-14-07, 4-5 pm): 600,000 kW 
 Annual Capacity
Quantity = 148,000 kW 
 Step 1 
 Calculate
EMC Group Excess Annual Capacity Quantity per Section 3.5.2.3.5. 
  

			
	 EMC Group Coincident Peak Demand (7-14-07 4-5 pm)
	  	800,000 kW
	 minus EMC Group Base Obligation (7-14-07 4-5 pm)
	  	-600,000 kW
	 minus Annual Capacity Quantity
	  	-148,000 kW
		  	 
	 EMC Group Excess Annual Capacity Quantity
	  	52,000 kW








 Step 2 
 Calculate EMC Excess Annual Capacity Quantity per Section 3.5.2.3.5.1 
  

									
	 	 	 A
 EMC Coincident Peak
Demand (7-14-07 4-5pm)
 (kW)
	 	 B
 minus EMC Base Obligation
 (7-14-07 4-5 pm)
 (kW)
	 	 C
 minus EMC Annual
 Capacity Quantity
 (kW)
	 	 D
 EMC Excess Annual
Capacity Quantity1
 (kW)

	 BR
	 	225,000	 	125,000	 	42,000	 	58,000
	 P   
	 	150,000	 	175,000	 	23,000	 	0
	 R   
	 	425,000	 	300,000	 	83,000	 	42,000

 Step 3 
 Calculate EMC Group Combined Excess Annual Capacity Quantity per Section 3.5.2.3.5.2. 
  

			
	 BR Excess Annual Capacity Quantity
	  	58,000 kW
	 P Excess Annual Capacity Quantity
	  	0 kW
	 R Excess Annual Capacity Quantity
	  	42,000 kW
		  	 
	 EMC Group Combined Excess Annual Capacity Quantity
	  	100,000kW



	1	Cannot be less than zero. 

  

 2 








 Step 4 
 Calculate Excess Annual Amount per Section 3.5.2.3.5. 
  

									
	 	 	 A
 EMC Excess Annual
Capacity Quantity
 (kW)
	 	 B
 EMC Group Combined
Excess Annual Capacity
Quantity (kW)
	 	 C
 EMC Group Excess
 Capacity Quantity
 (kW)
	 	 D
 EMC Excess Annual
 Amount
 ( ( A / B) * C) (kW)

	 BR
	 	58,000	 	100,000	 	52,000	 	30,160
	 P   
	 	0	 	100,000	 	52,000	 	0
	 R   
	 	42,000	 	100,000	 	52,000	 	21,840

 Step 5 
 Calculate Excess Annual Capacity Charge per Section 3.5.2.3.5. 
  

							
	 	 	 A
 EMC Excess Annual
 Amount
 (kW)
	 	 B
 Annual Capacity Price
 ($/kW-year)
	 	 C
 Excess Annual Capacity
 Charge

	 BR
	 	30,160	 	45.60	 	$1,375,296
	 P   
	 	0	 	45.60	 	$0
	 R   
	 	21,840	 	45.60	 	$995,904

  

 3 








 Attachment 4-1 
 Blue Ridge 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined in Section 5.1.1) 
  

																																																	
	 	  	Weekday
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Sep-06
	  	96	  	89	  	85	  	84	  	86	  	95	  	115	  	130	  	132	  	133	  	134	  	134	  	134	  	134	  	133	  	133	  	134	  	137	  	139	  	140	  	145	  	140	  	126	  	109
	 Oct-06
	  	87	  	79	  	77	  	77	  	83	  	99	  	131	  	155	  	156	  	151	  	145	  	138	  	130	  	126	  	122	  	120	  	121	  	125	  	135	  	147	  	151	  	142	  	124	  	103
	 Nov-06
	  	100	  	93	  	92	  	93	  	101	  	120	  	154	  	171	  	173	  	167	  	157	  	148	  	139	  	132	  	128	  	126	  	131	  	149	  	169	  	173	  	168	  	157	  	139	  	119
	 Dec-06
	  	128	  	120	  	119	  	120	  	126	  	143	  	172	  	190	  	192	  	182	  	173	  	163	  	152	  	144	  	139	  	139	  	148	  	170	  	188	  	191	  	189	  	183	  	166	  	146
	 Jan-07
	  	117	  	114	  	113	  	113	  	115	  	122	  	129	  	141	  	156	  	165	  	166	  	161	  	153	  	151	  	148	  	149	  	157	  	172	  	180	  	179	  	177	  	171	  	164	  	153
	 Feb-07
	  	102	  	97	  	96	  	98	  	101	  	115	  	129	  	146	  	151	  	148	  	143	  	151	  	147	  	138	  	133	  	131	  	137	  	98	  	159	  	163	  	158	  	149	  	136	  	122
	 Mar-07
	  	79	  	74	  	73	  	75	  	81	  	96	  	122	  	134	  	131	  	125	  	119	  	112	  	106	  	101	  	97	  	94	  	95	  	101	  	112	  	122	  	125	  	118	  	105	  	89
	 Apr-07
	  	64	  	57	  	55	  	54	  	57	  	68	  	90	  	105	  	107	  	104	  	101	  	99	  	96	  	93	  	90	  	89	  	90	  	93	  	97	  	99	  	105	  	107	  	96	  	79
	 May-07
	  	64	  	57	  	55	  	54	  	56	  	65	  	82	  	95	  	96	  	94	  	94	  	94	  	94	  	93	  	92	  	92	  	94	  	96	  	96	  	95	  	98	  	100	  	91	  	76
	 Jun-07
	  	73	  	66	  	62	  	61	  	62	  	68	  	80	  	92	  	98	  	102	  	105	  	108	  	108	  	108	  	109	  	109	  	111	  	112	  	113	  	111	  	109	  	111	  	103	  	88
	 Jul-07
	  	73	  	66	  	63	  	62	  	62	  	68	  	78	  	103	  	112	  	119	  	124	  	128	  	129	  	128	  	129	  	129	  	133	  	135	  	121	  	124	  	118	  	119	  	111	  	94
	 Aug-07
	  	80	  	73	  	69	  	66	  	67	  	72	  	81	  	91	  	101	  	130	  	137	  	141	  	140	  	144	  	147	  	138	  	117	  	116	  	117	  	114	  	112	  	113	  	109	  	94
	 Sep-07
	  	69	  	64	  	62	  	60	  	62	  	69	  	84	  	97	  	98	  	98	  	100	  	100	  	99	  	99	  	99	  	98	  	100	  	102	  	104	  	104	  	108	  	105	  	93	  	80
	 Oct-07
	  	64	  	58	  	56	  	56	  	60	  	73	  	99	  	118	  	118	  	114	  	109	  	104	  	98	  	95	  	92	  	90	  	90	  	94	  	101	  	111	  	115	  	107	  	93	  	76
	 Nov-07
	  	74	  	69	  	68	  	69	  	75	  	90	  	117	  	130	  	133	  	127	  	119	  	112	  	105	  	100	  	96	  	94	  	99	  	113	  	129	  	132	  	129	  	120	  	105	  	89
	 Dec-07
	  	97	  	91	  	90	  	90	  	96	  	109	  	132	  	146	  	147	  	140	  	133	  	124	  	116	  	110	  	106	  	105	  	112	  	129	  	144	  	147	  	145	  	140	  	126	  	111
	 Jan-08
	  	119	  	116	  	115	  	115	  	118	  	124	  	133	  	144	  	160	  	168	  	169	  	164	  	157	  	154	  	151	  	152	  	160	  	176	  	184	  	183	  	181	  	174	  	167	  	156
	 Feb-08
	  	104	  	99	  	98	  	99	  	104	  	117	  	132	  	149	  	155	  	151	  	146	  	154	  	150	  	141	  	137	  	133	  	140	  	99	  	162	  	166	  	162	  	152	  	138	  	124
	 Mar-08
	  	80	  	76	  	75	  	76	  	83	  	98	  	124	  	137	  	133	  	128	  	122	  	115	  	108	  	104	  	99	  	96	  	98	  	104	  	114	  	126	  	128	  	121	  	107	  	90
	 Apr-08
	  	66	  	59	  	55	  	55	  	58	  	69	  	92	  	108	  	109	  	106	  	104	  	101	  	98	  	95	  	93	  	90	  	92	  	95	  	99	  	101	  	108	  	109	  	98	  	80
	 May-08
	  	65	  	59	  	55	  	55	  	57	  	66	  	83	  	97	  	98	  	97	  	97	  	96	  	95	  	95	  	94	  	94	  	95	  	98	  	98	  	98	  	100	  	102	  	93	  	78
	 Jun-08
	  	75	  	68	  	64	  	62	  	63	  	69	  	82	  	94	  	101	  	104	  	108	  	110	  	111	  	111	  	111	  	112	  	113	  	115	  	115	  	113	  	112	  	113	  	105	  	90
	 Jul-08
	  	76	  	68	  	64	  	62	  	63	  	69	  	80	  	105	  	115	  	121	  	127	  	130	  	131	  	131	  	132	  	133	  	136	  	138	  	123	  	126	  	120	  	121	  	113	  	97
	 Aug-08
	  	81	  	74	  	70	  	68	  	68	  	73	  	83	  	94	  	102	  	133	  	140	  	144	  	142	  	147	  	150	  	141	  	119	  	119	  	119	  	116	  	115	  	115	  	112	  	96
	 Sep-08
	  	71	  	66	  	62	  	62	  	63	  	70	  	87	  	98	  	101	  	101	  	101	  	102	  	101	  	101	  	101	  	101	  	102	  	105	  	105	  	106	  	110	  	107	  	95	  	82
	 Oct-08
	  	65	  	59	  	57	  	57	  	62	  	75	  	101	  	120	  	120	  	116	  	112	  	106	  	101	  	97	  	94	  	91	  	93	  	96	  	104	  	113	  	117	  	109	  	95	  	78
	 Nov-08
	  	76	  	70	  	69	  	70	  	76	  	92	  	119	  	133	  	135	  	129	  	122	  	115	  	107	  	102	  	98	  	97	  	101	  	115	  	132	  	135	  	131	  	122	  	108	  	91
	 Dec-08
	  	99	  	93	  	92	  	93	  	98	  	112	  	134	  	149	  	151	  	143	  	135	  	127	  	119	  	112	  	108	  	108	  	115	  	133	  	147	  	150	  	148	  	143	  	129	  	113

 Note: Hour 1 refers to 12:00 a.m. - 12:59:59 a.m. Eastern Time, Hour 2 refers to 1:00 a.m. - 1:59:59 a.m. Eastern
Time, etc. 
 Attachment 4-1 to Duke-Blue Ridge Agreement 







 Blue Ridge 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	Weekday
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Jan-09
	  	122	  	119	  	118	  	118	  	120	  	126	  	136	  	147	  	163	  	172	  	173	  	168	  	160	  	158	  	155	  	155	  	163	  	179	  	188	  	187	  	184	  	178	  	171	  	159
	 Feb-09
	  	106	  	101	  	100	  	101	  	106	  	119	  	134	  	152	  	158	  	154	  	149	  	158	  	153	  	144	  	139	  	137	  	143	  	101	  	166	  	170	  	165	  	156	  	141	  	127
	 Mar-09
	  	82	  	77	  	76	  	78	  	84	  	101	  	127	  	140	  	137	  	130	  	124	  	117	  	111	  	106	  	101	  	98	  	99	  	105	  	116	  	128	  	130	  	123	  	108	  	93
	 Apr-09
	  	67	  	59	  	57	  	56	  	59	  	71	  	94	  	110	  	112	  	108	  	105	  	104	  	100	  	98	  	94	  	93	  	94	  	98	  	101	  	104	  	110	  	112	  	100	  	82
	 May-09
	  	66	  	60	  	57	  	56	  	59	  	67	  	86	  	99	  	100	  	98	  	98	  	98	  	98	  	97	  	96	  	96	  	98	  	100	  	100	  	99	  	102	  	105	  	95	  	80
	 Jun-09
	  	77	  	69	  	65	  	63	  	64	  	71	  	83	  	96	  	103	  	106	  	110	  	112	  	113	  	113	  	114	  	114	  	115	  	117	  	118	  	115	  	114	  	115	  	107	  	92
	 Jul-09
	  	77	  	69	  	66	  	64	  	65	  	71	  	81	  	108	  	117	  	124	  	129	  	133	  	134	  	133	  	134	  	136	  	139	  	141	  	126	  	129	  	122	  	124	  	115	  	98
	 Aug-09
	  	83	  	76	  	72	  	69	  	69	  	75	  	85	  	95	  	105	  	136	  	143	  	147	  	145	  	150	  	153	  	144	  	122	  	121	  	122	  	119	  	118	  	118	  	114	  	98
	 Sep-09
	  	73	  	67	  	64	  	63	  	65	  	72	  	88	  	101	  	102	  	103	  	104	  	105	  	104	  	104	  	103	  	103	  	105	  	107	  	108	  	108	  	112	  	109	  	97	  	83
	 Oct-09
	  	66	  	60	  	59	  	59	  	62	  	76	  	103	  	122	  	122	  	119	  	114	  	108	  	102	  	99	  	96	  	94	  	94	  	98	  	106	  	115	  	119	  	112	  	97	  	80
	 Nov-09
	  	77	  	72	  	70	  	72	  	78	  	94	  	122	  	136	  	138	  	133	  	125	  	117	  	109	  	104	  	101	  	99	  	103	  	118	  	134	  	137	  	134	  	125	  	110	  	93
	 Dec-09
	  	101	  	95	  	94	  	94	  	100	  	114	  	137	  	152	  	154	  	146	  	138	  	129	  	121	  	115	  	111	  	110	  	117	  	135	  	151	  	153	  	151	  	146	  	132	  	115
	 Jan-10
	  	125	  	121	  	120	  	120	  	122	  	129	  	138	  	151	  	167	  	176	  	177	  	171	  	163	  	161	  	158	  	158	  	167	  	183	  	192	  	191	  	189	  	182	  	174	  	162
	 Feb-10
	  	108	  	104	  	102	  	104	  	108	  	122	  	137	  	156	  	161	  	158	  	152	  	161	  	156	  	147	  	142	  	140	  	146	  	104	  	169	  	174	  	169	  	159	  	144	  	129
	 Mar-10
	  	83	  	79	  	79	  	80	  	87	  	103	  	129	  	144	  	140	  	133	  	126	  	120	  	113	  	108	  	103	  	100	  	101	  	108	  	119	  	131	  	133	  	126	  	111	  	94
	 Apr-10
	  	69	  	61	  	58	  	57	  	61	  	73	  	96	  	112	  	114	  	111	  	108	  	105	  	102	  	99	  	97	  	94	  	96	  	99	  	103	  	106	  	112	  	114	  	102	  	83
	 May-10
	  	68	  	61	  	58	  	58	  	60	  	69	  	87	  	101	  	102	  	101	  	101	  	101	  	99	  	99	  	98	  	98	  	99	  	102	  	102	  	101	  	105	  	107	  	97	  	82
	 Jun-10
	  	79	  	70	  	66	  	65	  	66	  	73	  	85	  	98	  	105	  	108	  	112	  	115	  	115	  	116	  	116	  	116	  	119	  	120	  	120	  	118	  	116	  	118	  	109	  	94
	 Jul-10
	  	79	  	71	  	67	  	66	  	66	  	73	  	83	  	110	  	120	  	126	  	133	  	136	  	137	  	137	  	137	  	138	  	142	  	144	  	129	  	132	  	126	  	126	  	118	  	101
	 Aug-10
	  	84	  	77	  	73	  	71	  	71	  	76	  	87	  	98	  	107	  	138	  	146	  	151	  	148	  	154	  	156	  	147	  	125	  	124	  	125	  	122	  	120	  	120	  	116	  	101
	 Sep-10
	  	74	  	68	  	66	  	65	  	66	  	73	  	90	  	103	  	105	  	105	  	106	  	107	  	106	  	106	  	105	  	105	  	106	  	109	  	110	  	111	  	115	  	112	  	99	  	85
	 Oct-10
	  	68	  	62	  	59	  	60	  	64	  	78	  	105	  	125	  	126	  	122	  	116	  	110	  	105	  	101	  	98	  	95	  	97	  	100	  	108	  	119	  	122	  	114	  	99	  	82
	 Nov-10
	  	80	  	73	  	72	  	73	  	80	  	96	  	125	  	139	  	141	  	136	  	127	  	119	  	112	  	106	  	102	  	101	  	105	  	120	  	137	  	140	  	137	  	128	  	112	  	95
	 Dec-10
	  	103	  	97	  	96	  	97	  	101	  	116	  	140	  	155	  	158	  	149	  	141	  	133	  	123	  	117	  	113	  	112	  	119	  	138	  	154	  	157	  	154	  	149	  	135	  	118

 Attachment 4-1 to Duke-Blue Ridge Agreement 
  

 2 








 Blue Ridge 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	Weekend
	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Sep-06
	  	97	  	90	  	85	  	83	  	83	  	85	  	92	  	103	  	119	  	129	  	130	  	128	  	127	  	126	  	124	  	124	  	126	  	129	  	129	  	131	  	136	  	133	  	121	  	108
	 Oct-06
	  	93	  	83	  	79	  	78	  	80	  	85	  	95	  	114	  	140	  	153	  	149	  	139	  	130	  	123	  	118	  	115	  	117	  	122	  	128	  	141	  	146	  	138	  	123	  	106
	 Nov-06
	  	97	  	93	  	90	  	84	  	87	  	94	  	107	  	129	  	152	  	160	  	152	  	140	  	131	  	125	  	118	  	115	  	121	  	136	  	151	  	153	  	149	  	139	  	124	  	107
	 Dec-06
	  	128	  	119	  	115	  	115	  	117	  	123	  	134	  	153	  	175	  	182	  	174	  	159	  	148	  	138	  	131	  	129	  	136	  	156	  	172	  	175	  	175	  	169	  	157	  	140
	 Jan-07
	  	101	  	97	  	96	  	96	  	97	  	98	  	103	  	113	  	128	  	134	  	127	  	118	  	112	  	107	  	99	  	96	  	98	  	104	  	112	  	115	  	115	  	110	  	103	  	93
	 Feb-07
	  	119	  	113	  	112	  	112	  	114	  	119	  	126	  	139	  	157	  	162	  	151	  	135	  	125	  	117	  	108	  	103	  	104	  	108	  	122	  	132	  	135	  	131	  	122	  	110
	 Mar-07
	  	73	  	66	  	65	  	66	  	68	  	73	  	82	  	98	  	114	  	119	  	114	  	105	  	99	  	94	  	87	  	84	  	86	  	91	  	100	  	108	  	111	  	105	  	95	  	83
	 Apr-07
	  	64	  	55	  	51	  	51	  	51	  	55	  	62	  	74	  	88	  	98	  	97	  	91	  	88	  	84	  	80	  	79	  	80	  	83	  	85	  	87	  	95	  	98	  	89	  	74
	 May-07
	  	66	  	59	  	55	  	54	  	55	  	57	  	62	  	72	  	84	  	91	  	91	  	89	  	87	  	86	  	85	  	84	  	86	  	87	  	89	  	87	  	90	  	94	  	87	  	75
	 Jun-07
	  	75	  	66	  	62	  	59	  	59	  	60	  	64	  	73	  	86	  	96	  	99	  	99	  	100	  	101	  	100	  	100	  	101	  	104	  	104	  	102	  	101	  	104	  	98	  	85
	 Jul-07
	  	81	  	73	  	69	  	66	  	66	  	67	  	72	  	80	  	91	  	102	  	110	  	112	  	112	  	108	  	106	  	105	  	105	  	105	  	105	  	101	  	100	  	101	  	96	  	85
	 Aug-07
	  	81	  	73	  	69	  	66	  	66	  	67	  	70	  	77	  	87	  	98	  	105	  	109	  	111	  	112	  	112	  	111	  	113	  	115	  	114	  	108	  	107	  	107	  	100	  	90
	 Sep-07
	  	70	  	64	  	61	  	60	  	59	  	62	  	66	  	75	  	87	  	96	  	97	  	94	  	94	  	93	  	92	  	92	  	94	  	95	  	96	  	97	  	101	  	98	  	90	  	79
	 Oct-07
	  	69	  	61	  	58	  	57	  	58	  	62	  	70	  	85	  	105	  	115	  	112	  	104	  	98	  	93	  	89	  	86	  	87	  	92	  	97	  	106	  	110	  	104	  	93	  	80
	 Nov-07
	  	72	  	69	  	66	  	62	  	63	  	69	  	80	  	98	  	115	  	122	  	115	  	106	  	99	  	94	  	89	  	87	  	90	  	102	  	115	  	116	  	113	  	105	  	94	  	80
	 Dec-07
	  	98	  	90	  	87	  	87	  	89	  	94	  	102	  	117	  	134	  	140	  	133	  	121	  	112	  	105	  	100	  	98	  	104	  	119	  	131	  	134	  	133	  	129	  	119	  	107
	 Jan-08
	  	104	  	99	  	98	  	98	  	99	  	101	  	105	  	115	  	130	  	137	  	130	  	120	  	115	  	109	  	101	  	98	  	100	  	106	  	114	  	117	  	117	  	112	  	105	  	9 5
	 Feb-08
	  	121	  	115	  	114	  	115	  	116	  	121	  	128	  	142	  	160	  	165	  	154	  	138	  	127	  	119	  	111	  	105	  	106	  	111	  	125	  	135	  	138	  	134	  	125	  	112
	 Mar-08
	  	74	  	68	  	66	  	67	  	69	  	74	  	83	  	99	  	116	  	122	  	116	  	108	  	101	  	95	  	89	  	86	  	87	  	93	  	101	  	111	  	113	  	108	  	98	  	86
	 Apr-08
	  	65	  	57	  	53	  	51	  	52	  	56	  	64	  	76	  	90	  	99	  	98	  	93	  	90	  	87	  	83	  	80	  	82	  	85	  	87	  	88	  	97	  	100	  	90	  	76
	 May-08
	  	68	  	60	  	57	  	55	  	55	  	58	  	63	  	73	  	86	  	93	  	93	  	91	  	90	  	88	  	87	  	87	  	87	  	90	  	90	  	90	  	93	  	95	  	88	  	76
	 Jun-08
	  	76	  	68	  	63	  	61	  	60	  	62	  	65	  	74	  	87	  	98	  	101	  	101	  	102	  	102	  	102	  	102	  	104	  	106	  	106	  	105	  	104	  	106	  	100	  	87
	 Jul-08
	  	83	  	75	  	70	  	68	  	67	  	69	  	73	  	81	  	94	  	104	  	112	  	115	  	114	  	111	  	108	  	107	  	108	  	108	  	107	  	103	  	102	  	104	  	98	  	87
	 Aug-08
	  	83	  	74	  	70	  	68	  	66	  	68	  	72	  	79	  	90	  	100	  	107	  	112	  	113	  	114	  	115	  	114	  	116	  	118	  	116	  	111	  	109	  	109	  	102	  	91
	 Sep-08
	  	72	  	66	  	62	  	61	  	61	  	63	  	68	  	76	  	89	  	98	  	98	  	97	  	96	  	95	  	94	  	94	  	95	  	98	  	98	  	99	  	103	  	101	  	91	  	80
	 Oct-08
	  	70	  	62	  	59	  	58	  	59	  	63	  	72	  	87	  	108	  	118	  	115	  	106	  	100	  	95	  	90	  	88	  	90	  	94	  	99	  	108	  	112	  	106	  	94	  	81
	 Nov-08
	  	73	  	69	  	67	  	62	  	65	  	71	  	82	  	100	  	118	  	125	  	118	  	108	  	101	  	96	  	90	  	88	  	93	  	105	  	117	  	119	  	115	  	108	  	95	  	81
	 Dec-08
	  	99	  	92	  	89	  	89	  	90	  	96	  	105	  	119	  	137	  	143	  	136	  	124	  	115	  	108	  	102	  	100	  	106	  	122	  	134	  	137	  	137	  	132	  	122	  	109

 Attachment 4-1 to Duke-Blue Ridge Agreement 
  

 3 








 Blue Ridge 
 EMC’s Base Obligation (MW) (as defined in Section 4.2.2) 
 Fixed Forward Resource (MW) (as defined
in Section 5.1.1) 
  

																																																	
	 	  	 Weekend

	 Hour
	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	13	  	14	  	15	  	16	  	17	  	18	  	19	  	20	  	21	  	22	  	23	  	24
	 Jan-09
	  	105	  	101	  	101	  	101	  	101	  	103	  	108	  	118	  	133	  	140	  	133	  	122	  	117	  	112	  	104	  	100	  	101	  	108	  	116	  	119	  	119	  	115	  	107	  	98
	 Feb-09
	  	123	  	118	  	116	  	117	  	119	  	123	  	131	  	145	  	163	  	169	  	157	  	141	  	130	  	122	  	113	  	107	  	108	  	113	  	127	  	137	  	141	  	137	  	128	  	115
	 Mar-09
	  	76	  	69	  	68	  	69	  	71	  	76	  	85	  	101	  	119	  	125	  	119	  	110	  	103	  	98	  	91	  	88	  	90	  	95	  	104	  	113	  	115	  	110	  	100	  	87
	 Apr-09
	  	66	  	58	  	54	  	53	  	54	  	58	  	65	  	77	  	92	  	101	  	101	  	95	  	92	  	88	  	84	  	82	  	83	  	87	  	88	  	90	  	99	  	102	  	93	  	77
	 May-09
	  	69	  	62	  	58	  	56	  	57	  	59	  	65	  	75	  	88	  	95	  	95	  	93	  	91	  	90	  	88	  	88	  	90	  	91	  	93	  	91	  	94	  	98	  	90	  	78
	 Jun-09
	  	78	  	69	  	65	  	62	  	61	  	62	  	66	  	76	  	90	  	100	  	103	  	104	  	105	  	105	  	105	  	105	  	106	  	108	  	108	  	106	  	106	  	108	  	102	  	89
	 Jul-09
	  	85	  	76	  	72	  	69	  	69	  	70	  	75	  	83	  	95	  	106	  	115	  	117	  	117	  	113	  	111	  	109	  	110	  	110	  	109	  	105	  	105	  	106	  	100	  	89
	 Aug-09
	  	84	  	76	  	72	  	69	  	68	  	69	  	73	  	80	  	91	  	102	  	109	  	114	  	115	  	116	  	117	  	116	  	119	  	120	  	119	  	113	  	112	  	112	  	105	  	94
	 Sep-09
	  	73	  	67	  	64	  	62	  	62	  	64	  	69	  	78	  	91	  	100	  	101	  	98	  	98	  	97	  	96	  	96	  	98	  	100	  	100	  	101	  	105	  	103	  	94	  	82
	 Oct-09
	  	72	  	63	  	60	  	59	  	60	  	65	  	73	  	89	  	110	  	121	  	117	  	108	  	102	  	97	  	92	  	90	  	91	  	96	  	101	  	111	  	115	  	108	  	97	  	83
	 Nov-09
	  	75	  	71	  	69	  	64	  	66	  	73	  	83	  	101	  	121	  	127	  	120	  	110	  	104	  	98	  	93	  	90	  	94	  	107	  	119	  	122	  	118	  	110	  	98	  	83
	 Dec-09
	  	101	  	94	  	91	  	90	  	93	  	98	  	106	  	122	  	140	  	146	  	139	  	126	  	117	  	110	  	105	  	102	  	108	  	124	  	137	  	140	  	139	  	135	  	125	  	112
	 Jan-10
	  	108	  	103	  	102	  	102	  	103	  	105	  	110	  	120	  	136	  	143	  	136	  	126	  	119	  	114	  	106	  	102	  	104	  	111	  	119	  	122	  	122	  	117	  	109	  	99
	 Feb-10
	  	126	  	121	  	119	  	119	  	122	  	126	  	134	  	148	  	167	  	172	  	160	  	144	  	133	  	125	  	115	  	109	  	111	  	116	  	130	  	140	  	144	  	140	  	130	  	117
	 Mar-10
	  	77	  	71	  	69	  	69	  	73	  	78	  	87	  	104	  	121	  	127	  	121	  	112	  	105	  	100	  	93	  	90	  	91	  	97	  	106	  	115	  	118	  	112	  	101	  	89
	 Apr-10
	  	68	  	59	  	55	  	54	  	55	  	59	  	66	  	79	  	94	  	104	  	103	  	98	  	94	  	90	  	86	  	83	  	85	  	88	  	90	  	92	  	101	  	104	  	94	  	80
	 May-10
	  	71	  	63	  	59	  	58	  	58	  	61	  	66	  	76	  	90	  	97	  	98	  	95	  	94	  	92	  	90	  	90	  	91	  	93	  	94	  	94	  	97	  	100	  	92	  	80
	 Jun-10
	  	80	  	71	  	66	  	63	  	62	  	64	  	68	  	77	  	91	  	102	  	105	  	106	  	106	  	107	  	106	  	106	  	108	  	111	  	111	  	108	  	108	  	111	  	105	  	90
	 Jul-10
	  	87	  	78	  	73	  	71	  	70	  	72	  	76	  	85	  	98	  	108	  	117	  	119	  	119	  	115	  	113	  	112	  	112	  	112	  	112	  	108	  	107	  	108	  	102	  	90
	 Aug-10
	  	86	  	77	  	73	  	70	  	69	  	71	  	75	  	82	  	94	  	105	  	112	  	116	  	118	  	119	  	119	  	119	  	121	  	123	  	121	  	115	  	114	  	114	  	107	  	95
	 Sep-10
	  	75	  	69	  	65	  	64	  	63	  	66	  	70	  	80	  	93	  	101	  	103	  	101	  	100	  	99	  	98	  	98	  	99	  	101	  	102	  	103	  	108	  	105	  	95	  	83
	 Oct-10
	  	73	  	65	  	61	  	60	  	62	  	66	  	75	  	90	  	112	  	123	  	119	  	111	  	105	  	99	  	94	  	92	  	94	  	98	  	103	  	113	  	117	  	111	  	99	  	84
	 Nov-10
	  	76	  	73	  	70	  	66	  	68	  	74	  	85	  	104	  	123	  	130	  	123	  	112	  	105	  	100	  	94	  	92	  	97	  	109	  	122	  	124	  	120	  	112	  	100	  	85
	 Dec-10
	  	104	  	96	  	93	  	93	  	94	  	100	  	108	  	124	  	143	  	149	  	142	  	129	  	119	  	112	  	106	  	105	  	111	  	127	  	140	  	143	  	142	  	137	  	127	  	114

 Attachment 4-1 to Duke-Blue Ridge Agreement 
  

 4 








 Attachment 4-2 
 Calculation of Reduction to EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods 
  

	 	I.	Definitions 

 1. The “Carolina Power &
Light Service Obligation Resources” or “SORs” means those generation and purchased capacity resources provided to NCEMC by CP&L and used by NCEMC to serve NCEMC load pursuant to the Power Supply Agreement. 
 2. The “Power Supply Agreement” means the Power Supply Agreement Dated November 2, 1998 Between North Carolina Electric Membership
Corporation and Carolina Power & Light Company, d/b/a Progress Energy Carolinas, Inc., as amended, filed at FERC in Docket No. ER05-722-000 on June 30, 2005. 
 3. The “1996 SO” means the Service Obligation assumed by NCEMC on January 1, 1996 in the amount of 204.3 MW including losses. 

4. “SOR A” means the 225 MW of electric capacity and energy that CP&L provides to NCEMC pursuant through December 31, 2015 pursuant
to Section 2.1(a)(1) of the Power Supply Agreement. 
 5. “SOR E” means the 225 MW of electric capacity and energy that
CP&L provides to NCEMC pursuant through December 31, 2013 pursuant to Section 2.1(a)(4) of the Power Supply Agreement. 







 6. “NCEMC Catawba Resource Entitlement” or “CRE” means NCEMC’s 623.5 MW
ownership interest in the Catawba Nuclear Station. 
 7. “NCEMC’s CP&L Native Load” or “NCNL” means the electric
capacity and energy demands (kW) imposed on NCEMC by its member cooperatives in CP&L’s existing Control Areas, and which are served by CP&L under the Power Supply Agreement (excluding the 1996 SO). 
 8. “NCEMC’s Duke Native Load” or “NDNL” means the electric capacity and energy demands (kW) imposed on NCEMC by its member
cooperatives in Duke’s Control Area. 
  

 2 








 II. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During
Light Load Periods (through December 31, 2008) 
 EMC’s Base Obligation and EMC Group’s Base Obligation during an Hour
shall be subject to reduction during the period commencing on the Commencement Date and continuing through December 31, 2008 in accordance with the following: 
 A. NCEMC’s contractual right to SO 1996, SOR A and SOR E (654.3 MW rounded to 655 MW) is subject to reduction based on a comparison between 655 MW and NCEMC’s CP&L Native Load (NCNL). 
 B. In the event that NCEMC’s CP&L Native Load during the Hour is less than 655 MW, EMC’s Base Obligation and EMC Group’s Base
Obligation for the Hour shall be reduced as follows: 
 C. If 655 MW minus NCNL is equal to or less than 225 MW, the reduction in EMC’s
Base Obligation shall be equal to the amount set forth in Equation 1 below: 
 Equation 1: ( ( 655 MW - NCNL ) / 225 ) * 11 
 D. If 655 MW minus NCNL is greater than 225 MW, the reduction in EMC’s Base Obligation shall be equal to 11 MW plus the amount set forth in Equation
2 below: 
 Equation 2: ( ( 430 MW - NCNL ) / 225 ) * 11 
  

 3 








 E. If 655 MW minus NCNL is equal to or less than 225 MW, the reduction in EMC Group’s Base
Obligation shall be equal to the amount set forth in Equation 3 below: 
 Equation 3: ( ( 655 MW - NCNL ) / 225 ) * 33 
 F. If 655 MW minus NCNL is greater than 225 MW, the reduction in EMC Group’s Base Obligation shall be equal to 33 MW plus the amount set forth in
Equation 4 below: 
 Equation 4: ( ( 430 MW - NCNL ) / 225 ) * 33 
 G. Example: If NCNL is equal to 565 MW during an Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( ( 655 MW – 565
MW ) / 225 ) * 11 or 4.4 MW, and the reduction in EMC Group’s Base Obligation for the Hour shall be equal to ( (655 MW - 565 MW) / 225 ) * 33, or 13.2 MW. 
 III. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods (January 1, 2009 through December 31, 2010) 
 EMC’s Base Obligation and EMC Group’s Base Obligation during an Hour shall be subject to reduction during the period commencing on
January 1, 2009 and continuing through December 31, 2010 in accordance with the following: 
  

 4 








 A. NCEMC’s contractual right to SO 1996 and SOR A (429.3 MW rounded to 430 MW) is subject to
reduction based on a comparison between 430 MW and NCEMC’s CP&L Native Load (NCNL). 
 B. In the event that NCEMC’s CP&L
Native Load during the Hour is less than 430 MW, EMC’s Base Obligation for the Hour shall be reduced as follows: 
 Equation 5: ( (430 MW
- NCNL ) / 225 ) * 11 
 C. In the event that NCEMC’s CP&L Native Load during the Hour is less than 430 MW, EMC Group’s Base
Obligation for the Hour shall be reduced as follows: 
 Equation 6: ( ( 430 MW - NCNL ) / 225 ) * 33 
 D. Example: If NCNL is equal to 340 MW during an Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( ( 430 MW – 340
MW ) / 225 ) * 11 MW, or 4.4 MW, and the reduction in EMC Group’s Base Obligation for the Hour shall be equal to ( ( 430 MW – 340 MW ) / 225 ) * 33, or 13.2 MW. 
 IV. Calculation of Reduction in EMC’s Base Obligation and EMC Group’s Base Obligation During Light Load Periods for the Catawba Resource Entitlement 
 In addition to the reductions to EMC’s Base Obligation and EMC Group’s Base Obligation set forth under Sections II and III above, EMC’s
Base Obligation and EMC Group’s Base Obligation shall be subject to reduction as set forth in this Section IV. 
  

 5 








 A. In the event that NCEMC’s Duke Native Load during an Hour is less than 623.5 MW and a
nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the Hour, EMC’s Base Obligation for the Hour shall be reduced as follows: 
 Equation 7: (1 - ( NDNL / 623.5 MW) ) * 32 MW 
 B. In the event that NCEMC’s Duke Native Load during an Hour is less than 623.5 MW and a nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the Hour, EMC Group’s Base Obligation
for the Hour shall be reduced as follows: 
 Equation 8: (1 - ( NDNL / 623.5 MW ) ) * 95 MW 
 C. Example: If NDNL is equal to 561.15 MW during an Hour, and a nuclear unit at Catawba Nuclear Station or McGuire Nuclear Station is off-line or derated during the
Hour, the reduction in EMC’s Base Obligation for the Hour shall be equal to ( 1 - (561.15 MW / 623.5 MW) ) * 32 MW, which equals ( .1 ) * ( 32 MW ), or 3.2 MW, and the reduction in EMC Group’s Base
Obligation for the Hour shall be equal to ( 1 - (561.15 MW / 623.5 MW ) ) * 95 MW, which equals ( .1 ) * ( 95 MW ), or 9.5 MW. 
  

 6 








 Attachment 4-3 
 EMC Partial Requirements Resources 
 (Page 1 of 7) 
 Resource Name: AEP Baseload 
 Type of Resource: Baseload
Resource 
 Delivery period: January 1, 2011 through December 31, 2012 
 Resource Capacity MW: 7 
 Must take resource: Yes, in the amount of MWs that NCEMC indicates is available in
each hour. 
 Scheduling: A schedule must be submitted for each hour by Duke in the amount of MWs that NCEMC indicates is available. 
 Energy Pricing: NA 
 Force
Majeure: “Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed
to, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not
be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss of failure of Seller’s supply; or (iv) Seller’s ability to sell
the Product at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a
Transmission Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission
Provider’s tariff, provided however, that existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has
occurred. 
 Attachment 4-3 to Duke-Blue Ridge Agreement 







 Attachment 4-3 
 EMC Partial Requirements Resources 
 (Page 2 of 7) 
 Resource Name: Catawba 
 Type of Resource: Baseload Resource

 Delivery period: January 1, 2011 through December 31, 2021 
 Resource Capacity MW: 32 
 Must take resource: Yes, in the amount of MWs that NCEMC indicates is available in
each hour. 
 Scheduling: A schedule must be submitted for each hour by Duke in the amount of MWs that NCEMC indicates is available. 
 Energy Pricing: NA 
 Force Majeure: The term “Force
Majeure” as used herein shall mean any cause beyond the control of the party affected and which by reasonable efforts the party affected is unable to overcome, including without limitation the following: Acts of God: fire, flood, landslide,
lightning, earthquake, hurricane, tornado, storm, freeze, or drought; blight, famine, epidemic, or quarantine; strike, lockout or other labor difficulty; act or failure to act of any party (and such party so acting or failing to act shall not used
such act or failure to act to excuse any other obligation which it has under this Agreement); act or failure to act of any regulatory agency or other governmental authority; changes in the work or delays caused by public bidding requirements; theft;
casualty; accident; equipment breakdown, failure or shortage of, or inability to obtain from usual sources, goods, labor, equipment, information or drawings, machinery, supplies, energy, fuel or materials; embargo; injunction; litigation or
arbitration with suppliers or vendors; shortage of rolling stock; arrest; war; civil disturbance; explosion; acts of public enemies; sabotage; or breach of contract by any supplier, contractor, sub-contractor, laborer or materialman. Any party
rendered unable to fulfill any obligation under this Agreement by reason of Force Majeure shall make reasonable efforts to remove such inability within a reasonable time. 
 Attachment 4-3 to Duke-Blue Ridge Agreement 
  

 2 








 Attachment 4-3 
 EMC Partial Requirements Resources 
 (Page 3 of 7) 
 Resource Name: Dominion PPA 
 Type of Resource: Combined Cycle
Resource 
 Delivery period: January 1, 2011 through December 31, 2014 
 Resource Capacity MW: 7 
 Must take resource: No 
 Resource Availability: Duke has the right but not the obligation to schedule the amount of MWs that NCEMC has indicated is available from this resource.

 Min run time (Hours): 8 
 Scheduling: 
  

	 	•	 	Day ahead schedule to be submitted, with intraday changes allowed 

  

	 	•	 	Nominations must be made in whole MWs 

  

	 	•	 	Day ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intraday Schedules are those that are requested after the 8:00 a.m. EPT deadline above. All
Schedule changes must occur at the top of the hour. Intraday Schedule changes require 2 hours advance notice. 

  

	 	•	 	Day ahead scheduling: Unlimited changes up to the allocation MWs 

  

	 	•	 	Intraday scheduling: Limit of two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative
maximum of 10% each hour. Additional changes will be accommodated on a best efforts basis. 

 Energy Pricing: For each month of the
Delivery Period, the price for energy will equal the sum of Day-Ahead Energy Charge, the Intra-day Energy Charge, the Incremental Variable Charge and the Variable O&M Charge: 
  

	 	•	 	Day-ahead Energy Charge = the sum of each day in the month’s Day-Ahead Energy Price x energy scheduled Day-Ahead 

  

	 	•	 	Day-Ahead Energy Price = (Day-Ahead Fuel Index + Fuel Adder) x Heat Rate 

  

	 	•	 	Day-Ahead Fuel Index: Gas Daily: Daily Price Survey, Midpoint of the Daily Ranges, Appalachia, Dominion South Point. Gas Index for each Sat. and Sun. shall be the price
specified for the Mon. immediately following such Sat. and Sun. In the event that Gas Daily no longer publishes this index, NCEMC and Dominion will agree upon a replacement index which will be passed through to the IM.


  

	 	•	 	Intra-Day Energy Charge = the sum of each day in the month’s Intra-Day Energy Price x energy scheduled Intra-Day 

  

	 	•	 	Intra-Day Energy Price = (Intra-Day Fuel Index + Fuel Adder) x Heat Rate 

 Attachment 4-3 to Duke-Blue Ridge Agreement 
  

 3 








 Attachment 4-3 
 EMC Partial Requirements Resources 
 (Page 4 of 7) 
  

	 	•	 	Intra-Day Fuel Index: The higher of the price in $/MMBtu for such calendar day or the next calendar day of Gas Daily: Daily Price Survey, Absolute of the Daily Ranges,
Appalachia, Dominion South Point. Gas Index for each Sat and Sun shall be the price specified for the higher of the Monday or Tuesday immediately following such Saturday and Sunday. 

  

	 	•	 	Fuel Adder: $0.25/MMBtu 

  

	 	•	 	Heat Rate: 

  

	 	•	 	2006 heat rate: 7.730 MMBtu/MWh 

  

	 	•	 	Heat Rate Adjustment: The heat rate will be recalculated annually to reflect the actual energy costs from the previous year. The new heat rate will go into effect on February 1
of each year. 

  

	 	•	 	Incremental Variable Charge: There may be additional charges due to making Intra-day schedule changes. 

  

	 	•	 	Variable O&M Charge: 

 2011 =
$3.81/MWh 
 2012 = $3.91/MWh 
 2013 = $4.01/MWh 
 2014 = $4.11/MWh 
 Force Majeure: “Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions,
which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the
Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder;
(iii) the loss or failure of Seller’s supply; or (iv) Seller’s ability to sell the Product at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a
Transmission Provider unless (i) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force
majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of a Force Majeure absent a showing of other facts and circumstances which in the
aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred.  
 Attachment 4-3 to Duke-Blue Ridge
Agreement 
  

 4 








 Attachment 4-3 
 EMC Partial Requirements Resources 
 (Page 5 of 7) 
 Resource Name: SCEG 
 Type of Resource: Combined Cycle Resource

 Delivery period: January 1, 2011 through December 31, 2012 
 Resource Capacity MW: 12 
 Must take resource: No 
 Resource Availability: Duke has the right but not the obligation to schedule the amount of MWs that NCEMC has indicated is available from this resource.

 Min run time (Hours): 4 
 Firm Gas Transportation:
Firm gas transportation has been procured for up to 16 hours a day. Therefore, operation of this resource is limited to no more than 16 hours a day. 
 Scheduling: 
  

	 	•	 	Day ahead schedule to be submitted, with intraday changes allowed 

  

	 	•	 	Nominations must be made in whole MWs 

  

	 	•	 	Day ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intraday Schedules are those that are requested after the 8:00 a.m. EPT deadline above. All
Schedule changes must occur at the top of the hour. Intraday Schedule changes require 2 hours advance notice. 

  

	 	•	 	Day ahead scheduling: Unlimited changes up to the allocation MWs 

  

	 	•	 	Intraday scheduling: Limit of two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative
maximum of 10% each hour. Additional changes will be accommodated on a best efforts basis. 

 Energy Pricing: For each month of the
Delivery Period, the price for energy will equal the sum of Day-Ahead Energy Charge, the Intra-day Energy Charge and the Variable O&M Charge: 
  

	 	•	 	Day-ahead Energy Charge = the sum of each day in the month’s Day-Ahead Energy Price x energy scheduled Day-Ahead: 

  

	 	•	 	Day-Ahead Energy Price = (Day-Ahead Fuel Index + Fuel Adder) x Heat Rate 

  

	 	•	 	Day-Ahead Fuel Index: 102.6% of SONAT Mid-Point price as published in Gas Daily for Louisiana-OnShore South for gas to flow on such day 

  

	 	•	 	Intra-Day Energy Charge = the sum of each day in the month’s Intra-Day Energy Price x energy scheduled Intra-Day 

  

	 	•	 	Intra-Day Energy Price = (Intra-Day Fuel Index + Fuel Adder) x Heat Rate 

 Attachment 4-3 to Duke-Blue Ridge Agreement 
  

 5 








 Attachment 4-3 
 EMC Partial Requirements Resources 
 (Page 6 of 7) 
  

	 	•	 	Intra-Day Fuel Index: 102.6% of the higher of the Gas Daily daily Mid-Point price for SONAT under the table for Louisiana-OnShore South for gas to flow such day or the Gas
Daily daily Mid-Point price for SONAT under the table for Louisiana-OnShore South for gas to flow on the next trading day 

  

	 	•	 	Fuel Adder: $0.1/MMBtu 

  

	 	•	 	Heat Rate: 7.350 MMBtu/MWh 

  

	 	•	 	Variable O&M Charge: 

 2011 =
$2.70/MWh 
 2012 = $2.76/MWh 
 Force Majeure: “Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the
Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided.
Force Majeure shall not be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss of failure of Seller’s supply; or
(iv) Seller’s ability to sell the Product at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has
contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar
term as defined under the Transmission Provider’s tariff; provided, however, that existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined
in the first sentence hereof has occurred. 
 Attachment 4-3 to Duke-Blue Ridge Agreement 
  

 6 








 Attachment 4-3 
 EMC Partial Requirements Resources 
 (Page 7 of 7) 
 Resource Name: SEPA 
 Type of Resource: Baseload Resource

 Delivery period: January 1, 2011 through December 31, 2021 
 Resource Capacity MW: 7 
 Must take resource: Duke must schedule the amount of energy that SEPA indicates is
available. 
 Resource Availability: SEPA will send the “Energy for Scheduling” declaration to Duke on Thursday of each week. The
declaration shows the minimum energy and excess energy available for scheduling. 
 Scheduling: 
  

	 	•	 	Duke to schedule with SEPA. 

  

	 	•	 	All scheduling nominations must be made in whole megawatts (MW) only. 

  

	 	•	 	If the SEPA declaration shows excess energy is available, that energy must be scheduled – it is not optional. 

  

	 	•	 	After receiving the energy declaration from SEPA, Duke is to fax or email back their proposed schedule for the coming week (7 days). The seven day week shall commence at the
beginning of Saturday and extend to the end of Friday. 

  

	 	•	 	Schedules may be revised on a day-ahead basis only if received by 8 AM. 

 Energy Pricing: NA 
 Force Majeure: Neither the Government nor Purchaser shall be considered to be in default in respect of
any obligation hereunder, if prevented from fulfilling such obligation by reason of uncontrollable forces, including but not limited to failure of facilities, flood, earthquake, storm, lightning, fire, epidemic, war, riot, civil disturbance, labor
disturbance, materials or equipment shortages, or restraint by court or public authority, which by exercise of reasonable diligence and foresight could not have been avoided, but excluding drought. Either party rendered unable to fulfill any
obligation by reason of an uncontrollable force shall remove such inability with all reasonable dispatch. 
 Attachment 4-3 to Duke-Blue Ridge Agreement

  

 7 








 Attachment 7-2 
 Example showing the calculation of the Monthly Demand Charges in the 
 Duke-Blue Ridge Agreement,
Duke-Piedmont Agreement 
 and Duke-Rutherford Agreement 
 The purpose of this attachment is to provide an example showing the calculation of the Monthly Demand Charge provided in Section 7.1.4 of the
above-identified agreements. Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R, respectively, and collectively as the EMC Group. 
 Assumptions: 
 Hour in October in which the
positive difference between the EMC Group Native Load and EMC Group’s Base Obligation is the greatest: 4:00-5:00 pm, October 14, 2006. 
  

							
	 	  	 BR
 (kW)
	  	 P
 (kW)
	  	 R
 (kW)

	 EMC Hourly Demand (10-14-06 4-5 pm)
	  	75,000	  	275,000	  	375,000
	 EMC Base Obligation (10-14-06 4-5pm)
	  	100,000	  	200,000	  	250,000

 EMC Group Hourly Demand (10-14-06, 4-5 pm): 725,000 kW 
 EMC Group Base Obligation (10-14-06, 4-5 pm): 550,000 kW 
 Step 1 
 Calculate EMC Group Monthly Demand Quantity per Section 7.1.4.3. 
  

			
	 EMC Group Hourly Demand
	  	725,000 kW
	 minus EMC Group Base Obligation
	  	-550,000 kW
		  	 
	 EMC Group Monthly Demand Quantity
	  	175,000 kW








 Step 2 
 Calculate EMC Monthly Demand Quantity per Section 7.1.4.1. 
  

							
	 	 	 A
 EMC Hourly Demand
 (10-14-06 4-5pm) (kW)
	 	 B
 minus EMC Base Obligation
 (10-14-06 4-5 pm)
 (kW)
	 	 C
 EMC Monthly Demand
 Quantity2
 (kW)

	 BR
	 	75,000	 	100,000	 	0
	 P
	 	275,000	 	200,000	 	75,000
	 R
	 	375,000	 	250,000	 	125,000

 Step 3 
 Calculate EMC Group Combined Monthly Demand Quantity per Section 7.1.4.2. 
  

			
	 BR Monthly Demand Quantity
	  	0 kW
	 P Monthly Demand Quantity
	  	75,000 kW
	 R Monthly Demand Quantity
	  	125,000 kW
		  	 
	 EMC Group Combined Monthly Demand Quantity
	  	200,000 kW



	2	Cannot be less than zero. 

  

 2 








 Step 4 
 Calculate Monthly Demand Amount per Section 7.1.4. 
  

									
	 	 	 A
 EMC Monthly Demand
Quantity
 (kW)
	 	 B
 EMC Group Combined
Monthly Demand Quantity
(kW)
	 	 C
 EMC Group Monthly
Demand Quantity
 (kW)
	 	 D
 EMC Monthly
 Demand Amount
 ( ( A / B) * C) (kW)

	 BR
	 	0	 	200,000	 	175,000	 	0
	 P
	 	75,000	 	200,000	 	175,000	 	65,625
	 R
	 	125,000	 	200,000	 	175,000	 	109,375

 Step 5 
 Calculate Monthly Demand Charge per Section 7.1.4. 
  

							
	 	 	 A
 EMC Monthly Demand
 Amount (kW)
	 	 B
 Monthly Demand Rate ($/kW-year)
	 	 C
 Monthly Demand Charge

	 BR
	 	0	 	0.75	 	0
	 P
	 	65,625	 	0.75	 	$49,218.75
	 R
	 	109,375	 	0.75	 	$82,031.25

  

 3 








 Attachment 7-3 
 Calculation of Blue Ridge Allocated Share of 
 Duke Total Hourly Energy Charge, EMC Group Total Hourly Energy
Credit, 
 Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 I. Definitions 
 1. The Inter-EMC
Transfer Price for an Hour shall be equal to the simple average of the Duke Territorial Incremental Cost for the Hour and the Duke Territorial Decremental Cost for the Hour; provided, that for any Hour for which the EMC Group Energy Credit Amount is
zero, the Inter-EMC Transfer Price for the Hour shall be equal to 101.5% of the Duke Territorial Incremental Cost for the Hour, and that for any Hour for which the EMC Group Energy Purchase Amount is zero, the EMC Transfer Price for the Hour shall
be equal to 101.5% of the Duke Territorial Decremental Cost for the Hour. 
 2. All other capitalized terms shall have the meaning set forth in
Section 1.1 of this Agreement. 
 II. Blue Ridge Allocated Share of the Duke Total Hourly Energy Charge

 The Blue Ridge Allocated Share of the Duke Total Hourly Energy Charge for an Hour shall be equal to: 
 ( C3 / A ) * D 
 Where: 
 A = EMC Group Combined Energy Purchase Amount 
 C3 = Blue Ridge Energy
Purchase Amount 
 D = Duke Total Hourly Energy Charge 
 III.
Blue Ridge Allocated Share of the Inter-EMC Energy Charge 
 The Blue Ridge Allocated Share of the Inter-EMC Energy Charge for an Hour
shall be equal to: 
 ( C3 / A ) * ( A - B ) * P 
 Where: 
 A = EMC Group Combined Energy
Purchase Amount 
 B = EMC Group Energy Purchase Amount 
 C3 =
Blue Ridge Energy Purchase Amount 
 P = Inter-EMC Transfer Price 








	IV.	Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit  

 The Blue Ridge Allocated Share of the EMC Group Total Hourly Energy Credit for an Hour shall be equal to: 
 (
G3 / E ) * H 
 Where: 
 E = EMC Group Combined Energy Credit Amount 
 G3 = Blue Ridge Energy Credit Amount

 H = EMC Group Total Hourly Energy Credit 
  


	V.	Blue Ridge Allocated Share of the Inter-EMC Energy Credit 

 The Blue Ridge Allocated Share of the Inter-EMC Energy Credit for an Hour shall be equal to: 
 ( G3 / E ) * ( E – F ) * P

 Where: 
 E = EMC Group Combined Energy Credit Amount 
 F = EMC Group Energy Credit Amount 

G3 = Blue Ridge Energy Credit Amount 
 P = Inter-EMC Transfer Price 
  

 -2- 








 Attachment 7-4 
 Example 1 
 Showing the Calculation of Blue Ridge, Piedmont and 
 Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, 
 EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 The
purpose of this attachment is to provide an example showing the calculation of the charges and credits identified above for one Hour. For purposes of this example, Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R,
respectively, and collectively as the EMC Group. 
 I. ASSUMPTIONS: 
 A. Call and Put Signals during the Hour 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Intervals 1-2253 - Call Signal during each Interval (kW):
	  	6,000	  	0	  	10,000	  	6,000
	 Intervals 1-225 - Put Signal during each Interval (kW)
	  	0	  	10,000	  	0	  	0
	 Intervals 226-450 - Call Signal during each Interval (kW)
	  	6,000	  	0	  	10,000	  	6,000
	 Intervals 226-450 - Put Signal during each Interval (kW)
	  	0	  	10,000	  	0	  	0
	 Intervals 451-675 - Call Signal during each Interval (kW)
	  	0	  	4,000	  	0	  	0
	 Intervals 451-675 - Put Signal during each Interval (kW)
	  	9,000	  	0	  	9,000	  	14,000
	 Intervals 676-900 - Call Signal during each Interval (kW)
	  	0	  	4,000	  	0	  	0
	 Intervals 676-900 - Put Signal during each Interval (kW)
	  	9,000	  	0	  	9,000	  	14,000



	3	Interval numbers refer to the Intervals during the Hour (e.g., Interval 1 is the first four seconds of the Hour, Interval 2 is the next four seconds, etc.). The Call
and Put Signals are shown as the same in each of the first 225 Intervals of the Hour, and then again as the same in the next 225 Intervals and so on. This is a simplifying assumption, to make this example less cumbersome. In actual operation, the
Parties anticipate that these positions would change frequently within the Hour. 








 B. Energy deliveries during the Hour4 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Hourly Energy Amount delivered from Duke - Intervals 1-225
	  	1,500	  	0	  	2,500	  	1,500
	 Hourly Energy Amount delivered to Duke - Intervals 1-225
	  	0	  	2,500	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 226-450
	  	1,500	  	0	  	2,500	  	1,500
	 Hourly Energy Amount delivered to Duke - Intervals 226-450
	  	0	  	2,500	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 451-675
	  	0	  	1,000	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 451-675
	  	2,250	  	0	  	2,250	  	3,500
	 Hourly Energy Amount delivered from Duke - Intervals 676-900
	  	0	  	1,000	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 676-900
	  	2,250	  	0	  	2,250	  	3,500



	4	These numbers sum the four-second Call and Put Signals from Part I.A. For example, 6,000 kW delivered by Duke in each of the 225 four-second Intervals (15 minutes)
equal 1,500 kWh (6,000 KW * 225 Intervals / 900 Intervals / Hour = 1500 kWh). 

  

 - 2 - 








 C. Incremental/Decremental Costs 
 Duke Territorial Incremental Cost: $0.10/kWh 
 Duke Territorial Decremental Cost: $0.10/kWh 
 II. CALCULATIONS 
 A. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge 
 Step 1 
 Sum the energy deliveries by Duke to BR for all Intervals
over the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by Duke to the EMC Group for all Intervals over the entire Hour (column 5). 
  

											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR5	  	P6	  	R7	  	Sum8	  	Aggregate
EMC
Group9
	 Energy delivered by Duke (kW)
	  	3,000	  	2,000	  	5,000	  	10,000	  	3,000

 Step 2 
 Calculate the percentage that each Customer contributed to the energy deliveries by Duke (Customer Buy / Sum of Customer Buys) 
  

													
	 	  	BR10	 	 	P11	 	 	R12	 	 	Sum	 
	 Energy delivered by Duke
	  	30.00	%	 	20.00	%	 	50.00	%	 	100.00	%



	5	Blue Ridge Energy Purchase Amount 


	6	Piedmont Energy Purchase Amount 


	7	Rutherford Energy Purchase Amount 


	8	EMC Group Combined Energy Purchase Amount 


	9	EMC Group Energy Purchase Amount 


	10	Blue Ridge Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	11	Piedmont Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	12	Rutherford Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 

  

 - 3 - 








 Step 3 
 Calculate
Duke Total Hourly Energy Charge = 113% of Duke Territorial Incremental Cost for electric energy delivered by Duke to the EMC Group for the Hour (3,000 kW * $0.10/kWh * 113% = $339.00) 
 Step 4 
 Calculate the individual EMC’s Allocated Share of the Duke Total Hourly
Energy Charge. 
 Apply the percentages derived in Step 2 to the Duke Total Hourly Energy Charge. 
  

													
	 	  	BR13	  	P14	  	R15	  	Sum16
	 $ for energy delivered by Duke
	  	$	101.70	  	$	67.80	  	$	169.50	  	$	339.00

 These amounts are included in the Duke Hourly Energy Charge. 
  


	13	Blue Ridge Allocated Share of Duke Total Hourly Energy Charge. 


	14	Piedmont Allocated Share of Duke Total Hourly Energy Charge 


	15	Rutherford Allocated Share of Duke Total Hourly Energy Charge 


	16	Duke Total Hourly Energy Charge 

  

 - 4 - 








 B. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the EMC Group Total
Hourly Energy Credit 
 Step 5 
 Sum the energy
deliveries by BR to Duke for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by EMC Group to Duke for all Intervals over the entire Hour (column 5).

  

											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR17	  	P18	  	R19	  	Sum20	  	EMC
Group21
	 Energy delivered by Customer (kW)
	  	4,500	  	5,000	  	4,500	  	14,000	  	7,000

 Step 6 
 Calculate the percentage that each Customer contributed to the energy deliveries by Customers (Customer delivery / Sum of Customer deliveries) 
  

													
	 	  	BR22	 	 	P23	 	 	R24	 	 	Sum	 
	 Energy delivered by Customer
	  	32.14	%	 	35.71	%	 	32.14	%	 	100.00	%



	17	Blue Ridge Energy Credit Amount 


	18	Piedmont Energy Credit Amount 


	19	Rutherford Energy Credit Amount 


	20	EMC Group Combined Energy Credit Amount 


	21	EMC Group Energy Credit Amount 


	22	Blue Ridge Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	23	Piedmont Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	24	Rutherford Energy Credit Amount / EMC Group Combined Energy Credit Amount. 

  

 - 5 - 








 Step 7 
 Calculate the
EMC Group Total Hourly Energy Credit = 90% of Duke Territorial Decremental Cost for electric energy delivered by the EMC Group to Duke for the Hour (7,000 kW * $0.10/kWh * 90% = $630) 
 Step 8 
 Calculate the EMC Allocated Share of the EMC Group Total Hourly Energy
Credit 
 Apply the percentages derived in Step 6 to the EMC Group Total Hourly Energy Credit. 
  

													
	 	  	BR25	  	P26	  	R27	  	Sum28
	 $ for energy delivered by Customers
	  	$	202.50	  	$	225.00	  	$	202.50	  	$	630.00



	25	Blue Ridge Allocated Share of EMC Group Total Hourly Energy Credit. 


	26	Piedmont Allocated Share of EMC Group Total Hourly Energy Credit 


	27	Rutherford Allocated Share of EMC Group Total Hourly Energy Credit 


	28	EMC Group Total Hourly Energy Credit 

  

 - 6 - 








 C. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy
Charge 
 Step 9 
 Calculate the difference between
the EMC Group Combined Energy Purchase Amount (sum determined in Step 1, column 4) and the EMC Group Energy Purchase Amount (aggregate calculated in Step 1, column 5). 
  


					
	 Step 5, column 429
	  	10,000	  	
	 Step 5, column 530
	  	-3,000	  	
		  	 	  	
	 Difference
	  	7,000	  	

 Step 10 
 Apply the percentages derived in Step 2 to the difference derived in Step 9. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Duke
	  	2,100	  	1,400	  	3,500	  	7,000

 Step 11 
 Calculate Inter-EMC Transfer Price: Average of 113% of Duke Territorial Incremental Cost and 90% of Duke Territorial Decremental Cost, unless EMC Group Energy Purchase Amount or EMC Group Energy Credit Amount is zero. If EMC Group Energy
Purchase Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Decremental Cost. If EMC Group Energy Credit Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Incremental Cost. In this example, Inter-EMC
Transfer Price is average of $0.113/kWh and $0.09/kWh, or $0.1015/kWh. 
  


	29	EMC Group Combined Energy Purchase Amount 


	30	EMS Group Energy Purchase Amount 

  

 - 7 - 








 Step 12 
 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 10. 
  

													
	 	  	BR31	  	P32	  	R33	  	Sum
	 $ for Inter-EMC Charge
	  	$	213.15	  	$	142.10	  	$	355.25	  	$	710.50

 These amounts are included in the Duke Hourly Energy Charge 
 D. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC Energy Credit 
 Step 13 
 Calculate the EMC Group Combined Energy Credit Amount
(difference between the sum determined in Step 5, column 4) and the EMC Group Credit Amount (aggregate calculated in Step 5, column 5). 
  

					
	 Step 5, column 434
	  	14,000	  	
	 Step 5, column 535
	  	-7,000	  	
		  	 	  	
	 Difference
	  	7,000	  	

  


	31	Blue Ridge Allocated Share of Inter-EMC Energy Charge 


	32	Piedmont Allocated Share of Inter-EMC Energy Charge 


	33	Rutherford Allocated Share of Inter-EMC Energy Charge 


	34	EMC Group Combined Energy Credit Amount 


	35	EMC Group Energy Credit Amount 

  

 - 8 - 








 Step 14 
 Apply the percentages derived in Step 6 to the difference derived in Step 13. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Customer
	  	2,250	  	2,500	  	2,250	  	7,000

 Step 15 
 Muliply the Inter-EMC Transfer Price times the amounts derived in Step 14 
  

													
	 	  	BR36	  	P37	  	R38	  	Sum
	 $ for Inter-EMC Credit
	  	$	228.38	  	$	253.75	  	$	228.38	  	$	710.50

 III. CHARGE/CREDIT SUMMATION FOR THE HOUR 
  

																		
	 	  	 	  	BR	 	 	P	 	 	R	  	Total	 
	 1.
	  	Allocated Share of Duke Total Hourly Energy Ch. (Step 4)	  	$	101.70	 	 	$	67.80	 	 	$	169.50	  	$	339.00	 
	 2.
	  	Allocated Share of Inter-EMC Energy Charge (Step 12)	  	$	213.15	 	 	$	142.10	 	 	$	355.25	  	$	710.50	 
	 3.
	  	Subtotal (row 1 + row 2)	  	$	314.85	 	 	$	209.90	 	 	$	524.75	  	$	1,049.50	 
	 4.
	  	Allocated Share of EMC Group Ttl Hourly En. Cr. (Step 8)	  	$	202.50	 	 	$	225.00	 	 	$	202.50	  	$	630.00	 
	 5.
	  	Allocated Share of Inter-EMC Energy Credit (Step 15)	  	$	228.38	 	 	$	253.75	 	 	$	228.38	  	$	710.50	 
	 6.
	  	Subtotal (row 4 + row 5)	  	$	430.88	 	 	$	478.75	 	 	$	430.88	  	$	1,340.50	 
	 7.
	  	Total charge (credit) (row 3 – row 6)	  	$	(116.03	)	 	$	(268.85	)	 	$	93.88	  	$	(291.00	)

  


	36	Blue Ridge Allocated Share of Inter-EMC Energy Credit 


	37	Piedmont Allocated Share of Inter-EMC Energy Credit 


	38	Rutherford Allocated Share of Inter-EMC Energy Credit 

  

 - 9 - 








 Attachment 7-4 
 Example 2 
 Showing the Calculation of Blue Ridge, Piedmont and 
 Rutherford Allocated Shares of the Duke Total Hourly Energy Charge, 
 EMC Group Total Hourly Energy Credit, Inter-EMC Energy Charge and Inter-EMC Energy Credit 
 The
purpose of this attachment is to provide an example showing the calculation of the charges and credits identified above for one Hour. For purposes of this example, Blue Ridge, Piedmont and Rutherford are referred to individually as BR, P and R,
respectively, and collectively as the EMC Group. 
 I. ASSUMPTIONS: 
 A. Call and Put Signals during the Hour 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Intervals 1-22539 - Call Signal during each Interval (kW):
	  	0	  	3,000	  	3,000	  	2,000
	 Intervals 1-225 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	0
	 Intervals 226-450 - Call Signal during each Interval (kW)
	  	0	  	5,000	  	3,000	  	4,000
	 Intervals 226-450 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	0
	 Intervals 451-675 - Call Signal during each Interval (kW)
	  	0	  	2,000	  	0	  	0
	 Intervals 451-675 - Put Signal during each Interval (kW)
	  	2,000	  	0	  	0	  	0
	 Intervals 676-900 - Call Signal during each Interval (kW)
	  	0	  	1,000	  	1,000	  	0
	 Intervals 676-900 - Put Signal during each Interval (kW)
	  	4,000	  	0	  	0	  	2,000



	39	Interval numbers refer to the Intervals during the Hour (e.g., Interval 1 is the first four seconds of the Hour, Interval 2 is the next four seconds, etc.). The Call
and Put Signals are shown as the same in each of the first 225 Intervals of the Hour, and then again as the same in the next 225 Intervals and so on. This is a simplifying assumption, to make this example less cumbersome. In actual operation, the
Parties anticipate that these positions would change frequently within the Hour. 

  

 - 10 - 








 B. Energy deliveries during the Hour40 
  

									
	 	  	BR	  	P	  	R	  	EMC
Group
	 Hourly Energy Amount delivered from Duke - Intervals 1-225
	  	0	  	750	  	750	  	500
	 Hourly Energy Amount delivered to Duke - Intervals 1-225
	  	1,000	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 226-450
	  	0	  	1,250	  	750	  	1,000
	 Hourly Energy Amount delivered to Duke - Intervals 226-450
	  	1,000	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 451-675
	  	0	  	500	  	0	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 451-675
	  	500	  	0	  	0	  	0
	 Hourly Energy Amount delivered from Duke - Intervals 676-900
	  	0	  	250	  	250	  	0
	 Hourly Energy Amount delivered to Duke - Intervals 676-900
	  	1,000	  	0	  	0	  	500

 C. Incremental/Decremental Costs 
  

	
	 Duke Territorial Incremental Cost: $0.10/kWh

	 Duke Territorial Decremental Cost: $0.10/kWh


 II. CALCULATIONS 
 A. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Duke Total Hourly Energy Charge 
 Step 1 
 Sum the energy deliveries by Duke to BR for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns
2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by Duke to the EMC Group for all Intervals over the entire Hour (column 5). 
  


	40	These numbers sum the four-second Call and Put Signals from Part I.A. For example, 3,000 kW delivered by Duke in each of the 225 four-second Intervals (15 minutes)
equal 750 kWh (2,000 KW * 225 Intervals / 900 Intervals / Hour = 750 kWh). 

  

 - 11 - 









											
	 Column number
	  	1	  	2	  	3	  	4	  	5
	 	  	BR41	  	P42	  	R43	  	Sum44	  	Aggregate
EMC
Group45
	 Energy delivered by Duke (kW)
	  	0	  	2,750	  	1,750	  	4,500	  	1,500

 Step 2 
 Calculate the percentage that each Customer contributed to the energy deliveries by Duke (Customer Buy / Sum of Customer Buys) 
  

													
	 	  	BR46	 	 	P47	 	 	R48	 	 	Sum	 
	 Energy delivered by Duke
	  	0.00	%	 	61.11	%	 	38.89	%	 	100.00	%

  


	41	Blue Ridge Energy Purchase Amount 


	42	Piedmont Energy Purchase Amount 


	43	Rutherford Energy Purchase Amount 


	44	EMC Group Combined Energy Purchase Amount 


	45	EMC Group Energy Purchase Amount 


	46	Blue Ridge Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	47	Piedmont Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 


	48	Rutherford Energy Purchase Amount / EMC Group Combined Energy Purchase Amount. 

  

 - 12 - 








 Step 3 
 Calculate
Duke Total Hourly Energy Charge = 113% of Duke Territorial Incremental Cost for electric energy delivered by Duke to the EMC Group for the Hour (1,500 kW * $0.10/kWh * 113% = $169.50) 
 Step 4 
 Calculate the individual EMC’s Allocated Share of the Duke Total Hourly
Energy Charge. 
 Apply the percentages derived in Step 2 to the Duke Total Hourly Energy Charge. 
  

													
	 	  	BR49	  	P50	  	R51	  	Sum52
	 $ for energy delivered by Duke
	  	$	0.00	  	$	103.58	  	$	65.92	  	$	169.50

 These amounts are included in the Duke Hourly Energy Charge. 
  


	49	Blue Ridge Allocated Share of Duke Total Hourly Energy Charge. 


	50	Piedmont Allocated Share of Duke Total Hourly Energy Charge 


	51	Rutherford Allocated Share of Duke Total Hourly Energy Charge 


	52	Duke Total Hourly Energy Charge 

  

 - 13 - 








 B. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the EMC Group Total
Hourly Energy Credit 
 Step 5 
 Sum the energy
deliveries by BR to Duke for all Intervals over the entire Hour (column 1). Repeat calculation for P and R (columns 2-3). Sum columns 1-3 (column 4). Sum the energy deliveries by EMC Group to Duke for all Intervals over the entire Hour (column 5).

  

											
	 Column number
	  	1	  	3	  	4	  	5	  	6
	  	  	BR53	  	P54	  	R55	  	Sum56	  	EMC
Group57
	 Energy delivered by Customer (kW)
	  	3,500	  	0	  	0	  	3,500	  	500



	53	Blue Ridge Energy Credit Amount 


	54	Piedmont Energy Credit Amount 


	55	Rutherford Energy Credit Amount 


	56	EMC Group Combined Energy Credit Amount 


	57	EMC Group Energy Credit Amount 

  

 -14- 








 Step 6 
 Calculate the
percentage that each Customer contributed to the energy deliveries by Customers (Customer delivery / Sum of Customer deliveries) 
  

													
	 	  	BR58	 	 	P59	 	 	R60	 	 	Sum	 
	 Energy delivered by Customer
	  	100.00	%	 	0.00	%	 	0.00	%	 	100.00	%

 Step 7 
 Calculate the EMC Group Total Hourly Energy Credit = 90% of Duke Territorial Decremental Cost for electric energy delivered by the EMC Group to Duke for the Hour (500 kW * $0.10/kWh * 90% = $45) 
 Step 8 
 Calculate the EMC Allocated
Share of the EMC Group Total Hourly Energy Credit 
 Apply the percentages derived in Step 6 to the EMC Group Total Hourly
Energy Credit. 
  


	58	Blue Ridge Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	59	Piedmont Energy Credit Amount / EMC Group Combined Energy Credit Amount. 


	60	Rutherford Energy Credit Amount / EMC Group Combined Energy Credit Amount. 

  

 - 15 - 









													
	 	  	BR61	  	P62	  	R63	  	Sum64
	 $ for energy delivered by Customers
	  	$	45.00	  	$	—  	  	$	—  	  	$	45.00

 C. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC
Energy Charge 
 Step 9 
 Calculate the difference
between the EMC Group Combined Energy Purchase Amount (sum determined in Step 1, column 4) and the EMC Group Energy Purchase Amount (aggregate calculated in Step 1, column 5). 
  

					
	 Step 1, column 465
	  	4,500	  	
	 Step 1, column 566
	  	-1,500	  	
		  	 	  	
	 Difference
	  	3,000	  	

  


	61	Blue Ridge Allocated Share of EMC Group Total Hourly Energy Credit. 


	62	Piedmont Allocated Share of EMC Group Total Hourly Energy Credit 


	63	Rutherford Allocated Share of EMC Group Total Hourly Energy Credit 


	64	EMC Group Total Hourly Energy Credit 


	65	EMC Group Combined Energy Purchase Amount 


	66	EMC Group Energy Purchase Amount 

  

 - 16 - 








 Step 10 
 Apply the percentages derived in Step 2 to the difference derived in Step 9. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Duke
	  	0	  	1,833	  	1,167	  	3,000

 Step 11 
 Calculate Inter-EMC Transfer Price: Average of 113% of Duke Territorial Incremental Cost and 90% of Duke Territorial Decremental Cost, unless EMC Group Energy Purchase Amount or EMC Group Energy Credit Amount is zero. If EMC Group Energy
Purchase Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Decremental Cost. If EMC Group Energy Credit Amount is zero, Inter-EMC Transfer Price is 101.50% of Duke Territorial Incremental Cost. In this example, Inter-EMC
Transfer Price is average of $0.113/kWh and $0.09/kWh, or $0.1015/kWh. 
 Step 12 
 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 10. 
  

													
	 	  	BR67	  	P68	  	R69	  	Sum
	 $ for Inter-EMC Charge
	  	$	0.00	  	$	186.08	  	$	118.42	  	$	304.50

 D. Calculation of Blue Ridge, Piedmont and Rutherford Allocated Shares of the Inter-EMC
Energy Credit 
  


	67	Blue Ridge Allocated Share of Inter-EMC Energy Charge 


	68	Piedmont Allocated Share of Inter-EMC Energy Charge 


	69	Rutherford Allocated Share of Inter-EMC Energy Charge 

  

 -17- 








 Step 13 
 Calculate
the EMC Group Combined Energy Credit Amount (difference between the sum determined in Step 5, column 4) and the EMC Group Credit Amount (aggregate calculated in Step 5, column 5). 
  

					
	 Step 5, column 470
	  	3,500	  	
	 Step 5, column 571
	  	- 500	  	
		  	 	  	
	 Difference
	  	3,000	  	

 Step 14 
 Apply the percentages derived in Step 6 to the difference derived in Step 13. 
  

									
	 	  	BR	  	P	  	R	  	Sum
	 Energy delivered by Customer
	  	3,000	  	0	  	0	  	3,000

 Step 15 
 Multiply the Inter-EMC Transfer Price times the amounts derived in Step 14 
  

													
	 	  	BR72	  	P73	  	R74	  	Sum
	 $ for Inter-EMC Credit
	  	$	304.50	  	$	0.00	  	$	0.00	  	$	304.50

  


	70	EMC Group Combined Energy Credit Amount 


	71	EMC Group Energy Credit Amount 


	72	Blue Ridge Allocated Share of Inter-EMC Energy Credit 


	73	Piedmont Allocated Share of Inter-EMC Energy Credit 


	74	Rutherford Allocated Share of Inter-EMC Energy Credit 

  

 - 18 - 








 III. CHARGE/CREDIT SUMMATION FOR THE HOUR 
  

																
	 	  	 	  	BR	 	 	P	  	R	  	Total
	 1.
	  	Allocated Share of Duke Total Hourly Energy Ch. (Step 4)	  	$	0.00	 	 	$	103.58	  	$	65.92	  	$	169.50
	 2.
	  	Allocated Share of Inter-EMC Energy Charge (Step 12)	  	$	0.00	 	 	$	186.08	  	$	118.42	  	$	304.50
	 3.
	  	Subtotal (row 1 + row 2)	  	$	0.00	 	 	$	289.67	  	$	184.33	  	$	474.00
	 4.
	  	Allocated Share of EMC Group Ttl Hourly En. Cr. (Step 8)	  	$	45.00	 	 	$	0.00	  	$	0.00	  	$	45.00
	 5.
	  	Allocated Share of Inter-EMC Energy Credit (Step 15)	  	$	304.50	 	 	$	0.00	  	$	0.00	  	$	304.50
	 6.
	  	Subtotal (row 4 + row 5)	  	$	349.50	 	 	$	0.00	  	$	0.00	  	$	349.50
	 7.
	  	Total charge (credit) (row 3 – row 6)	  	$	(349.50	)	 	$	289.67	  	$	184.33	  	$	124.50

  

 - 19 - 








 Attachment 7-5 
 Example showing Calculations of 
 Blue Ridge Energy Purchase Amounts 
 and Blue Ridge Energy Credit Amount 
 This attachment provides an example showing the calculation of the Blue Ridge Energy Purchase Amount and Blue Ridge Energy Credit Amount for one Hour. 
  

													
	 Four- second Interval Number*
	  	 A
 EMC’s
 Base
 Obligation
(kW)
	  	 B
 EMC’s
 Native
 Load
 (kW)
	  	 C
 Call
 Signal
 (B-A
 where
 B>A)
 (kW)
	  	 D
 Call
 energy
 (C/900)
 (kWhs)
	 	 E
 Put
 Signal
 (A-B
 where
 A>B)
 (kW)
	  	 F
 Put
 energy
 (E/900)
 (kWhs)

	 1
	  	100,000	  	102,000	  	2,000	  	2.2	 	—  	  	—  
	 2
	  	100,000	  	101,000	  	1,000	  	1.1	 	—  	  	—  
	 3
	  	100,000	  	100,000	  	—  	  	—  	 	—  	  	—  
	 4
	  	100,000	  	99,000	  	—  	  	—  	 	1,000	  	1.1
	 5
	  	100,000	  	98,000	  	—  	  	—  	 	2,000	  	2.2
	 6
	  	100,000	  	97,000	  	—  	  	—  	 	3,000	  	3.3
	 7-89575
	  	100,000	  	100,000	  	—  	  	—  	 	—  	  	—  
	 896
	  	100,000	  	98,000	  	—  	  	—  	 	2,000	  	2.2
	 897
	  	100,000	  	99,000	  	—  	  	—  	 	1,000	  	1.1
	 898
	  	100,000	  	100,000	  	—  	  	—  	 	—  	  	—  
	 899
	  	100,000	  	101,000	  	1,000	  	1.1	 	—  	  	—  
	 900
	  	100,000	  	102,000	  	2,000	  	2.2	 	—  	  	—  
		  		  		  		  	 	 	 	  	 
	 Total
	  		  		  		  	6.676	 		  	9.977
		  		  		  		  	 	 	 	  	 

  


	*	Interval numbers refer to the Intervals during the hour (e.g., Interval 1 is the first four seconds of the hour, Interval 2 is the next four seconds, etc.) 



	75	To simplify this example, EMC’s Base Obligation and EMC’s Native Load are assumed
to be equal during Intervals 6-895. In actual operation, the parties anticipate that these amounts will differ throughout the Hour. 


	76	Blue Ridge Energy Purchase Amount 


	77	Blue Ridge Energy Credit Amount 








 Attachment 7-6 
 Example showing Calculations of EMC Group Energy Purchase Amounts 
 and EMC Group Energy Credit
Amount 
 This attachment provides an example showing the calculation of the EMC Group Energy Purchase Amount and EMC Group Energy Credit
Amount for one Hour. 
  

													
	 Four-second Interval Number*
	  	 A
 EMC
 Group
 Base
 Obligation
(kW)
	  	 B
 EMC
 Group
 Native
 Load
 (kW)
	  	 C
 Call
 Signal
 (B-A
 where
 B>A)
 (kW)
	  	 D
 Call
 energy
 (C/900)
 (kWhs)
	 	 E
 Put
 Signal
 (A-B
 where
 A>B)
 (kW)
	  	 F
 Put
 energy
 (E/900)
 (kWhs)

	 1
	  	400,000	  	408,000	  	8,000	  	8.8	 	—  	  	—  
	 2
	  	400,000	  	404,000	  	4,000	  	4.4	 	—  	  	—  
	 3
	  	400,000	  	400,000	  	—  	  	—  	 	—  	  	—  
	 4
	  	400,000	  	396,000	  	—  	  	—  	 	4,000	  	4.4
	 5
	  	400,000	  	392,000	  	—  	  	—  	 	8,000	  	8.8
	 6
	  	400,000	  	388,000	  	—  	  	—  	 	12,000	  	13.2
	 7-89578
	  	400,000	  	400,000	  	—  	  	—  	 	—  	  	—  
	 896
	  	400,000	  	392,000	  	—  	  	—  	 	8,000	  	8.8
	 897
	  	400,000	  	396,000	  	—  	  	—  	 	4,000	  	4.4
	 898
	  	400,000	  	400,000	  	—  	  	—  	 	—  	  	—  
	 899
	  	400,000	  	404,000	  	4,000	  	4.4	 	—  	  	—  
	 900
	  	400,000	  	408,000	  	8,000	  	8.8	 	—  	  	—  
		  		  		  		  	 	 		  	 
	 Total
	  		  		  		  	26.479	 		  	39.680
		  		  		  		  	 	 		  	 

  


	*	Interval numbers refer to the Intervals during the hour (e.g., Interval 1 is the first four seconds of the hour, Interval 2 is the next four seconds, etc.) 



	78	To simplify this example, the EMC Group’s Base Obligation and the EMC Group’s
Native Load are assumed to be equal during Intervals 6-895. In actual operation, the Parties anticipate that these amounts will differ throughout the Hour. 


	79	EMC Group Energy Purchase Amount 


	80	EMC Group Energy Credit Amount 








 Attachment 7-7 
 Example showing the calculation of 
 Monthly Billing Demand under Section 7.2.2.2

 The purpose of this attachment is to provide an example showing the calculation of the Monthly Billing Demand under
Section 7.2.2.2 of the Agreement. 
  

	 	I.	Assumptions: 

  

									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 1.
	  	 Highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	5:00-6:00 p.m.	  	17,000
	 2.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	6:00-7:00 p.m.	  	16,975
	 3.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	4:00-5:00 p.m.	  	16,950
	 4.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-25-07	  	3:00-4:00 p.m.	  	16,925
	 5.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	5:00-6:00 p.m.	  	16,900
	 6.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	6:00-7:00 p.m.	  	16,875
	 7.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	4:00-5:00 p.m.	  	16,850
	 8.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	3:00-4:00 p.m.	  	16,825
	 9.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	5:00-6:00 p.m.	  	16,800
	 10.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	6:00-7:00 p.m.	  	16,775
	 11.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	4:00-5:00 p.m.	  	16,750
	 12.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-1-07	  	3:00-4:00 p.m.	  	16,725
	 13.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	5:00-6:00 p.m.	  	16,700
	 14.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	6:00-7:00 p.m.	  	16,675
	 15.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2007
	  	6-26-07	  	4:00-5:00 p.m.	  	16,650
	 16.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-26-07	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-24-07	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2007
	  	1-18-07	  	9:00-10:00 a.m.	  	16,575
	 19.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2007
	  	1-18-07	  	10:00-11:00 a.m.	  	16,550
	 20.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	4:00-5:00 p.m.	  	16,525









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	3:00-4:00 p.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	5:00-6:00 p.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2007
	  	8-2-07	  	6:00-7:00 p.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	3:00-4:00 p.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	4:00-5:00 p.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	2:00-3:00 p.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-18-07	  	1:00-2:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	5:00-6:00 p.m.	  	16,325
	 29.
	  	 29th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	6:00-7:00 p.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2007
	  	7-17-07	  	4:00-5:00 p.m.	  	16,325

  

	 	II.	Calculation of Monthly Billing Demand for 2007: 

 The
twenty (20) highest load hours during July-August are hours 1-14, 16-17 and 20-23. 
  

											
	 No.
 from
 Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Base Obligation
(kW)
	 	 EMC Native Load
minus EMC Base
Obligation
(kW)

	 1.
	 	7-25-07	 	5:00-6:00 p.m.	 	100,000	 	80,000	 	20,000
	 2.
	 	7-25-07	 	6:00-7:00 p.m.	 	102,000	 	80,000	 	22,000
	 3.
	 	7-25-07	 	4:00-5:00 p.m.	 	104,000	 	80,000	 	24,000
	 4.
	 	7-25-07	 	3:00-4:00 p.m.	 	106,000	 	80,000	 	26,000
	 5.
	 	7-24-07	 	5:00-6:00 p.m.	 	104,000	 	80,000	 	24,000
	 6.
	 	7-24-07	 	6:00-7:00 p.m.	 	102,000	 	79,000	 	23,000
	 7.
	 	7-24-07	 	4:00-5:00 p.m.	 	100,000	 	79,000	 	21,000
	 8.
	 	7-24-07	 	3:00-4:00 p.m.	 	100,000	 	79,000	 	21,000
	 9.
	 	8-1-07	 	5:00-6:00 p.m.	 	100,000	 	79,000	 	21,000
	 10.
	 	8-1-07	 	6:00-7:00 p.m.	 	100,000	 	78,000	 	22,000
	 11.
	 	8-1-07	 	4:00-5:00 p.m.	 	99,000	 	78,000	 	21,000

  

 - 2 - 









											
	 No.
 from
 Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Base Obligation
(kW)
	 	 EMC Native Load
minus EMC Base
Obligation
(kW)

	 12.
	 	8-1-07	 	3:00-4:00 p.m.	 	99,000	 	78,000	 	21,000
	 13.
	 	7-26-07	 	5:00-6:00 p.m.	 	99,000	 	100,000	 	0
	 14.
	 	7-26-07	 	6:00-7:00 p.m.	 	99,000	 	100,000	 	0
	 16.
	 	7-26-07	 	4:00-5:00 p.m.	 	98,000	 	100,000	 	0
	 17.
	 	7-24-07	 	3:00-4:00 p.m.	 	98,000	 	100,000	 	0
	 20.
	 	8-2-07	 	4:00-5:00 p.m.	 	98,000	 	100,000	 	0
	 21.
	 	8-2-07	 	3:00-4:00 p.m.	 	98,000	 	100,000	 	0
	 22.
	 	8-2-07	 	5:00-6:00 p.m.	 	98,000	 	100,000	 	0
	 23.
	 	8-2-07	 	6:00-7:00 p.m.	 	98,000	 	100,000	 	0
		 		 		 		 		 	 
		 	 TOTAL
	 		 		 		 	266,000
		 		 		 		 		 	 
		 	 AVERAGE
	 		 		 		 	13,30081
		 		 		 		 		 	 



	81	Monthly Billing Demand for each Month during 2007. 

  

 - 3 - 








 Attachment 7-8 
 Examples showing the calculation of 
 Monthly Billing Demand under Section 7.3.2.2

 The purpose of this attachment is to provide examples showing the calculation of the Monthly Billing Demand under Section 7.3.2.2
of the Agreement. 
 Example A 
  

	 	I.	Assumptions: 

  

									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 1.
	  	 Highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	5:00-6:00 p.m.	  	17,000
	 2.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	6:00-7:00 p.m.	  	16,975
	 3.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	4:00-5:00 p.m.	  	16,950
	 4.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-25-12	  	3:00-4:00 p.m.	  	16,925
	 5.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	5:00-6:00 p.m.	  	16,900
	 6.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	6:00-7:00 p.m.	  	16,875
	 7.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	4:00-5:00 p.m.	  	16,850
	 8.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,825
	 9.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	5:00-6:00 p.m.	  	16,800
	 10.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	6:00-7:00 p.m.	  	16,775
	 11.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	4:00-5:00 p.m.	  	16,750
	 12.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-1-12	  	3:00-4:00 p.m.	  	16,725
	 13.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	5:00-6:00 p.m.	  	16,700
	 14.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	6:00-7:00 p.m.	  	16,675
	 15.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2012
	  	6-26-12	  	4:00-5:00 p.m.	  	16,650
	 16.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	9:00-10:00 a.m.	  	16,575
	 19.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	10:00-11:00 a.m.	  	16,550









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 20.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	4:00-5:00 p.m.	  	16,525
	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	3:00-4:00 p.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	5:00-6:00 p.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	8-2-12	  	6:00-7:00 p.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	3:00-4:00 p.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	4:00-5:00 p.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	2:00-3:00 p.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-18-12	  	1:00-2:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	5:00-6:00 p.m.	  	16,325
	 29.
	  	 29th highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	6:00-7:00 p.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-17-12	  	4:00-5:00 p.m.	  	16,325

 Annual Planning Period is May through September 
  

	 	II.	Calculation of Monthly Billing Demand for 2012: 

 The
twenty (20) highest load hours during the Summer Period are hours 1-17 and 20-22 
  

											
	 No.
 from
 Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements
 Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
 Resources
 (kW)

	 1.
	 	7-25-12	 	5:00-6:00 p.m.	 	120,000	 	100,000	 	20,000
	 2.
	 	7-25-12	 	6:00-7:00 p.m.	 	120,000	 	100,000	 	20,000
	 3.
	 	7-25-12	 	4:00-5:00 p.m.	 	120,000	 	100,000	 	20,000
	 4.
	 	7-25-12	 	3:00-4:00 p.m.	 	120,000	 	100,000	 	20,000
	 5.
	 	7-24-12	 	5:00-6:00 p.m.	 	115,000	 	100,000	 	15,000
	 6.
	 	7-24-12	 	6:00-7:00 p.m.	 	115,000	 	100,000	 	15,000
	 7.
	 	7-24-12	 	4:00-5:00 p.m.	 	115,000	 	100,000	 	15,000

  

 - 2 - 









											
	 No.
 from
 Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements
 Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
 Resources
 (kW)

	 8.
	 	7-24-12	 	3:00-4:00 p.m.	 	115,000	 	100,000	 	15,000
	 9.
	 	8-1-12	 	5:00-6:00 p.m.	 	110,000	 	100,000	 	10,000
	 10.
	 	8-1-12	 	6:00-7:00 p.m.	 	110,000	 	100,000	 	10,000
	 11.
	 	8-1-12	 	4:00-5:00 p.m.	 	110,000	 	100,000	 	10,000
	 12.
	 	8-1-12	 	3:00-4:00 p.m.	 	110,000	 	100,000	 	10,000
	 13.
	 	7-26-12	 	5:00-6:00 p.m.	 	105,000	 	100,000	 	5,000
	 14.
	 	7-26-12	 	6:00-7:00 p.m.	 	105,000	 	100,000	 	5,000
	 15.
	 	6-26-12	 	4:00-5:00 p.m.	 	105,000	 	100,000	 	5,000
	 16.
	 	7-26-12	 	4:00-5:00 p.m.	 	105,000	 	100,000	 	5,000
	 17.
	 	7-24-12	 	3:00-4:00 p.m.	 	100,000	 	100,000	 	0
	 20.
	 	8-2-12	 	4:00-5:00 p.m.	 	100,000	 	100,000	 	0
	 21.
	 	8-2-12	 	3:00-4:00 p.m.	 	95,000	 	100,000	 	0
	 22.
	 	8-2-12	 	5:00-6:00 p.m.	 	95,000	 	100,000	 	0
		 	 TOTAL
	 		 		 		 	200,000
		 		 		 		 		 	 
		 	 AVERAGE
	 		 		 		 	10,00082
		 		 		 		 		 	 

 Example B 
  

	 	I.	Assumptions: 

  

									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 1.
	  	 Highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	7:00-8:00 a.m.	  	17,000
	 2.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	8:00-9:00 a.m.	  	16,975



	82	Monthly Billing Demand for each Month during 2012. 

  

 - 3 - 









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 3.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	9:00-10:00 a.m.	  	16,950
	 4.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-25-12	  	10:00-11:00 a.m.	  	16,925
	 5.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	7:00-8:00 a.m.	  	16,900
	 6.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	8:00-9:00 a.m.	  	16,875
	 7.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	9:00-10:00 a.m.	  	16,850
	 8.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-24-12	  	10:00-11:00 a.m.	  	16,825
	 9.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	7:00-8:00 a.m.	  	16,800
	 10.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	8:00-9:00 a.m.	  	16,775
	 11.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	9:00-10:00 a.m.	  	16,750
	 12.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-1-12	  	10:00-11:00 a.m.	  	16,725
	 13.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2012
	  	12-21-12	  	8:00-9:00 a.m.	  	16,700
	 14.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2012
	  	12-21-12	  	9:00-10:00 a.m.	  	16,675
	 15.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2012
	  	12-21-12	  	10:00-11:00 a.m.	  	16,650
	 16.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-26-12	  	4:00-5:00 p.m.	  	16,625
	 17.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2012
	  	7-24-12	  	3:00-4:00 p.m.	  	16,600
	 18.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	7:00-8:00 a.m.	  	16,575
	 19.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	8:00-9:00 a.m.	  	16,550
	 20.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	9:00-10:00 a.m.	  	16,525
	 21.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2012
	  	2-2-12	  	10:00-11:00 a.m.	  	16,500
	 22.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	9:00-10:00 a.m.	  	16,475
	 23.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	10:00-11:00 a.m.	  	16,450
	 24.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	7:00-8:00 a.m.	  	16,425
	 25.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	8:00-9:00 a.m.	  	16,400
	 26.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	6:00-7:00 a.m.	  	16,375
	 27.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-18-12	  	11:00 a.m.-12:00 p.m.	  	16,350
	 28.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-17-12	  	8:00-9:00 a.m.	  	16,325
	 29.
	  	 29th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-17-12	  	9:00-10:00 a.m.	  	16,300
	 30.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2012
	  	1-17-12	  	10:00-11:00 a.m.	  	16,325
	 31.
	  	 Highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	7:00-8:00 a.m.	  	17,000

  

 - 4 - 









									
	 	  	 	  	Day	  	Hour	  	 Load
 (MW)

	 32.
	  	 2nd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	8:00-9:00 a.m.	  	16,975
	 33.
	  	 3rd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	9:00-10:00 a.m.	  	16,950
	 34.
	  	 4th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-23-11	  	10:00-11:00 a.m.	  	16,925
	 35.
	  	 5th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	7:00-8:00 a.m.	  	16,900
	 36.
	  	 6th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	8:00-9:00 a.m.	  	16,875
	 37.
	  	 7th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	9:00-10:00 a.m.	  	16,850
	 38.
	  	 8th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	10:00-11:00 a.m.	  	16,825
	 39.
	  	 9th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	7:00-8:00 a.m.	  	16,800
	 40.
	  	 10th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	8:00-9:00 a.m.	  	16,775
	 41.
	  	 11th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	9:00-10:00 a.m.	  	16,750
	 42.
	  	 12th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-4-11	  	10:00-11:00 a.m.	  	16,725
	 43.
	  	 13th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-28-11	  	8:00-9:00 a.m.	  	16,700
	 44.
	  	 14th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-28-11	  	9:00-10:00 a.m.	  	16,675
	 45.
	  	 15th
highest Hourly Duke Schedule 1 Demand during 2011
	  	12-15-11	  	9:00-10:00 a.m.	  	16,650
	 46.
	  	 16th
highest Hourly Duke Schedule 1 Demand during 2011
	  	12-16-11	  	9:00-10:00 a.m.	  	16,625
	 47.
	  	 17th
highest Hourly Duke Schedule 1 Demand during 2011
	  	12-15-11	  	10:00-11:00 a.m.	  	16,600
	 48.
	  	 18th
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	5:00-6:00 p.m.	  	16,575
	 49.
	  	 19th
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	6:00-7:00 p.m.	  	16,550
	 50.
	  	 20th
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	4:00-5:00 p.m.	  	16,525
	 51.
	  	 21st
highest Hourly Duke Schedule 1 Demand during 2011
	  	7-18-11	  	3:00-4:00 p.m.	  	16,500
	 52.
	  	 22nd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	11:00 a.m.-12:00 p.m.	  	16,475
	 53.
	  	 23rd
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-18-11	  	6:00-7:00 a.m.	  	16,450
	 54.
	  	 24th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-5-11	  	8:00-9:00 a.m.	  	16,425
	 55.
	  	 25th
highest Hourly Duke Schedule 1 Demand during 2011
	  	2-5-11	  	9:00-10:00 a.m.	  	16,400
	 56.
	  	 26th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-20-11	  	8:00-9:00 a.m.	  	16,375
	 57.
	  	 27th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-20-11	  	9:00-10:00 a.m.	  	16,350
	 58.
	  	 28th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-21-11	  	7:00-8:00 a.m.	  	16,325
	 59.
	  	 29th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-21-11	  	8:00-9:00 a.m.	  	16,300
	 60.
	  	 30th
highest Hourly Duke Schedule 1 Demand during 2011
	  	1-21-11	  	9:00-10:00 a.m.	  	16,325

  

 - 5 - 








 Annual Planning Period is October through April 
 The twenty (20) highest load hours during the Winter Period are hours 1-12 and 18-22 in 2012 and hours 45-47 in 2011. 
  

	 	II.	Calculation of Monthly Billing Demand for 2012: 

  

											
	 No. from
 Part I
	 	 Day
	 	 Hour
	 	 EMC Native Load
 (kW)
	 	 EMC Partial
Requirements Resources
 (kW)
	 	 EMC Native Load
minus EMC Partial
Requirements
Resources
 (kW)

	 1.
	 	1-25-12	 	7:00-8:00 a.m.	 	120,000	 	100,000	 	20,000
	 2.
	 	1-25-12	 	8:00-9:00 a.m.	 	120,000	 	100,000	 	20,000
	 3.
	 	1-25-12	 	9:00-10:00 a.m.	 	120,000	 	100,000	 	20,000
	 4.
	 	1-25-12	 	10:00-11:00 a.m.	 	120,000	 	100,000	 	20,000
	 5.
	 	1-24-12	 	7:00-8:00 a.m.	 	115,000	 	100,000	 	15,000
	 6.
	 	1-24-12	 	8:00-9:00 a.m.	 	115,000	 	100,000	 	15,000
	 7.
	 	1-24-12	 	9:00-10:00 a.m.	 	115,000	 	100,000	 	15,000
	 8.
	 	1-24-12	 	10:00-11:00 a.m.	 	115,000	 	100,000	 	15,000
	 9.
	 	2-1-12	 	7:00-8:00 a.m.	 	110,000	 	100,000	 	10,000
	 10.
	 	2-1-12	 	8:00-9:00 a.m.	 	110,000	 	100,000	 	10,000
	 11.
	 	2-1-12	 	9:00-10:00 a.m.	 	110,000	 	100,000	 	10,000
	 12.
	 	2-1-12	 	10:00-11:00 a.m.	 	110,000	 	100,000	 	10,000
	 45.
	 	12-15-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 46.
	 	12-16-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 47.
	 	12-15-11	 	9:00-10:00 a.m.	 	105,000	 	100,000	 	5,000
	 18.
	 	2-2-12	 	7:00-8:00 a.m.	 	105,000	 	100,000	 	5,000
	 19.
	 	2-2-12	 	8:00-9:00 a.m.	 	100,000	 	100,000	 	0
	 20.
	 	2-2-12	 	9:00-10:00 a.m.	 	100,000	 	100,000	 	0
	 21.
	 	2-2-12	 	10:00-11:00 a.m.	 	95,000	 	100,000	 	0
	 22.
	 	1-18-12	 	9:00-10:00 a.m.	 	95,000	 	100,000	 	0
		 		 		 		 		 	 
		 	 TOTAL
	 		 		 		 	200,000
		 		 		 		 		 	 
		 	 AVERAGE
	 		 		 		 	10,00083
		 		 		 		 		 	 

  


	83	Monthly Billing Demand for each Month during 2012. 

  

 - 6 - 








 ATTACHMENT 7-9 
 Demand Rate Adjustment Percentage and Annual Percentage 
 This attachment provides the formulas to be used for calculating
the Demand Rate Adjustment Percentage and Annual Percentage for each calendar year beginning January 1, 2011. 
 The Demand Rate Adjustment Percentage
shall equal the Production Capacity Revenue Requirement Adjustment divided by the Original Production Capacity Revenue Requirement, but not less than zero. 
 Where 
 Production Capacity Revenue
Requirement Adjustment = (Annual Percentage – 4%) * (Original Production Capacity Revenue Requirement + Original Energy Revenue Requirement) 
 And 
 Annual Percentage shall equal the product of the System Gross Plant Difference and the Fixed Charge Rate,
divided by the sum of Original Production Capacity Revenue Requirement and Original Energy Revenue Requirement. For purposes of calculating the Production Capacity Revenue Requirement Adjustment, the Annual Percentage shall be a maximum of 10%.

 System Gross Plant Difference shall equal EMC Plant in Service less NC Retail Plant in Service. (May be positive or negative.) System Gross Plant
Difference shall be decreased as necessary to eliminate differences between EMC Plant in Service and NC Retail Plant in Service related to timing or method of recovery of plant costs (e.g., plant differences due to recovery of construction period
financing costs through inclusion of construction work in progress in rate base). 
 Fixed Charge Rate shall equal
10%. 
 EMC Plant in Service shall equal the average of the total ending balance of Production Plant, General Plant and Intangible Plant according to
Schedule 1 of this Agreement, for the calendar year for which the Production Capacity Revenue Requirement calculation is prepared and total ending balance of Production Plant, General Plant and Intangible Plant according to Schedule 1 of this
Agreement for the previous calendar year calculation of the Production Capacity Revenue Requirement. 
 NC Retail Plant in Service shall equal the sum
of Duke Power Retail Plant in Service and Nantahala Retail Plant in Service, which shall be determined from Company records supporting the total Electric Plant in Service amount on Schedule 3 of NCUC Form E.S.-1 for the 12 month calendar period
corresponding to the Production Capacity Revenue Requirement calculation used for calculating the EMC Plant in Service. 







 Duke Power Retail Plant in Service shall equal the average of the two December balances for the total of
Production, General and Intangible plant amounts included in the total Electric Plant in Service monthly amounts shown on Schedule 3 of NCUC Form E.S.-1 for Duke Power. 
 Nantahala Retail Plant in Service shall equal the average of the two December balances for the total of Production, General and Intangible plant amounts included in the total Electric Plant in Service monthly
amounts shown on Schedule 3 of NCUC Form E.S.-1 for Nantahala Power & Light. 
 Original Production Capacity Revenue Requirement shall equal
the Production Capacity Revenue Requirement before consideration of any adjustments pursuant to Section 7.3.2.3 of the Agreement. 
 Original Energy
Revenue Requirement shall equal the sum of F for purposes of calculating the Fuel Rate in Schedule 1 and Variable Non-Fuel Production Operation and Maintenance Expense for purposes of calculating the Variable O&M Rate in Schedule 1.

  

 - 2 - 








 Attachment 7-10 
 Example of Demand Rate Adjustment Percentage and Annual Percentage 
 Note: EMC and NC Retail Plant in Service
values are actuals for 2004. 
 CASE WITH NO ADJUSTMENT WARRANTED–– 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	 Demand Rev Req Unadjusted
	  			  	$	1,774,603	 	 	
	 2
	  	 Energy Rev Req
	  			  	$	1,235,341	 	 	
	 3
	  	 Total Unadjusted Rev Req for EMC Rate Calcs
	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	 Actual Gross Plant (“timing” adjusted)
	  	$	11,509,514	  	$	11,509,514	 	 	NC Retail = Attachment 7-10, Page 4, Line 10
	 5
	  	 System Gross Plant Difference
	  			  	$	—  	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	 Levelized FCR
	  			  	 	0.100	 	 	
	 7
	  	 Estimated Impact on Demand Rev Req
	  			  	$	—  	 	 	(Line 6 x Line 5)
	 8
	  	 Annual Percentage
	  			  	 	0.00	%	 	(Line 7 / Line 3) No adjustment occurs since below 4% impact

 Note: EMC Plant in Service values are actuals for 2004, but NC Retail Plant in Service values have been reduced
for purpose of demonstration. 
 CASE WITH NO ADJUSTMENT WARRANTED–– 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	 Demand Rev Req Unadjusted
	  			  	$	1,774,603	 	 	
	 2
	  	 Energy Rev Req
	  			  	$	1,235,341	 	 	
	 3
	  	 Total Unadjusted Rev Req for EMC Rate Calcs
	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	 Actual Gross Plant (“timing” adjusted)
	  	$	10,618,079	  	$	11,509,514	 	 	NC Retail = Attachment 7-10, Page 4, Line 10
	 5
	  	 System Gross Plant Difference
	  			  	$	891,435	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	 Levelized FCR
	  			  	 	0.100	 	 	
	 7
	  	 Estimated Impact on Demand Rev Req
	  			  	$	89,143	 	 	(Line 6 x Line 5)
	 8
	  	 Annual Percentage
	  			  	 	2.96	%	 	(Line 7 /Line 3) No adjustment occurs since below 4% impact








 ADJUSTMENT WARRANTED 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	Demand Rev Req Unadjusted	  			  	$	1,774,603	 	 	
	 2
	  	Energy Rev Req	  			  	$	1,235,341	 	 	
	 3
	  	Total Unadjusted Rev Req for EMC Rate Calcs	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
	 4
	  	Actual Gross Plant	  	$	9,729,655	  	$	11,509,514	 	 	
	 5
	  	System Gross Plant Difference	  			  	$	1,779,859	 	 	(EMC Line 4 - NC Line 4)
	 6
	  	Levelized FCR	  			  	 	0.100	 	 	
	 7
	  	Estimated Impact on Demand Rev Req	  			  	$	177,986	 	 	(Line 6 x Line 5)
	 8
	  	Annual Percentage	  			  	 	5.91	%	 	 (Line 7 / Line 3)
 Since Annual Percentage is in excess
of 4%, adjustment to Demand Rate is needed.

	 9
	  	Demand Rate Adjustment Percentage	  			  	 	3.24	%	 	[(Line 8 - 4%) x Line 3] / Line 1
	 10
	  	Demand Rate per Section 7.3.2.1	  			  	$	117.53	 	 	
	 11
	  	Demand Rate as adjusted per Section 7.3.2.3	  			  	$	113.72	 	 	Line 10 x (100% - Line 9)

  

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 ADJUSTMENT WARRANTED (but limited) 
  

												
	 	  	 	  	NC Retail	  	EMC	 	 	 
	 1
	  	 Demand Rev Req Unadjusted
	  			  	$	1,774,603	 	 	
	 2
	  	 Energy Rev Req
	  			  	$	1,235,341	 	 	
	 3
	  	 Total Unadjusted Rev Req for EMC Rate Calcs
	  			  	$	3,009,944	 	 	(Line 1 + Line 2)
					
	 4
	  	 Actual Gross Plant
	  	$	8,368,409	  	$	11,509,514	 	 	
	 5
	  	 System Gross Plant Difference
	  			  	$	3,141,105	 	 	(EMC Line 4 -NC Line 4)
	 6
	  	 Levelized FCR
	  			  	 	0.100	 	 	
	 7
	  	 Estimated Impact on Demand Rev Req
	  			  	$	314,110	 	 	(Line 6 x Line 5)
	 8
	  	 Annual Percentage
	  			  	 	10.44	%	 	 (Line 7 /Line 3)
 Since Annual Percentage is in excess of 4%, adjustment to Demand Rate is needed, but is limited to maximum of 6% of total unadjusted revenue requirements.

	 9
	  	 Demand Rate Adjustment Percentage
	  			  	 	10.18	%	 	[(Line 8* - 4%) x Line 3] / Line 1
	 10
	  	 Demand Rate per Section 7.3.2.1
	  			  	$	117.53	 	 	
	 11
	  	 Demand Rate as adjusted per Section 7.3.2.3
	  	$	105.57	 	 	Line 10 x (100% - Line 9)



	*	maximum of 10% 

  

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 (Amounts from Quarterly NCUC Form E.S.-1, Schedule 3, for 12ME 2004) 
  

																	
	  	  	 (Dollars in thousands)
	  	System Gross Electric Plant in Service for Determination of NC Retail Plant in Service
	 	  	 	  	Duke Power	  	Nantahala	  	Total NC Retail
	 	  	 	  	Beginning	  	Ending	  	Beginning	  	Ending	  	Beginning	  	Ending	  	 Average

	 1
	  	 Plant in Service
	  	18,980,402	  	19,683,592	  	324,710	  	334,880	  	19,305,112	  	20,018,472	  	19,661,792
									
		  	 Components (data from Company records):
	  		  		  		  		  		  		  	
	 2
	  	 Production Plant
	  	9,257,448	  	9,666,832	  	39,399	  	39,263	  	9,296,847	  	9,706,095	  	9,501,471
	 3
	  	 Nuclear Fuel (gross)
	  	816,874	  	769,178	  		  		  	816,874	  	769,178	  	793,026
	 4
	  	 Total Production Plant
	  	10,074,322	  	10,436,010	  	39,399	  	39,263	  	10,113,721	  	10,475,273	  	10,294,497
	 5
	  	 Transmission Plant
	  	1,745,408	  	1,819,243	  	92,489	  	91,335	  	1,837,897	  	1,910,578	  	1,874,238
	 6
	  	 Distribution Plant
	  	5,978,416	  	6,312,889	  	168,040	  	181,129	  	6,146,456	  	6,494,018	  	6,320,237
	 7
	  	 General Plant
	  	973,070	  	902,246	  	20,232	  	18,603	  	993,302	  	920,849	  	957,076
	 8
	  	 Intangible Plant
	  	209,186	  	213,204	  	4,550	  	4,550	  	213,736	  	217,754	  	215,745
	 9
	  	 Total (ties to Line 1)
	  	18,980,402	  	19,683,592	  	324,710	  	334,880	  	19,305,112	  	20,018,472	  	19,661,792
		  		  		  		  		  		  	 	  	 	  	 
	 10
	  	 Total of Production/General/Intangible Plant for use in Annual Percentage calculation
	  		  		  		  		  	11,320,759	  	11,613,876	  	11,467,318
		  		  		  		  		  		  	 	  	 	  	 

  

																			
	  	  	 (Dollars in thousands)
	  	 NC Retail
 Plant in
Service
	  	 EMC Plant in Service - Amounts
from

Schedule 1 for 2004
	  	EMC
Plant in
Service	  	System
Gross Plant
Difference	  	Adjustment
for Timing
Difference	  	Adjusted
System
Gross Plant
Difference
	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	Beginning	  	Ending	  	Average	  	 	  	 	  	 	  	 
	 1
	  	 Plant in Service
	  		  		  		  		  		  		  		  	
										
		  	 Components (data from Company records):
	  		  		  		  		  		  		  		  	
	 2
	  	 Production Plant
	  	9,501,471	  	9,339,044	  	9,748,291	  	9,543,668	  	9,543,668	  	42,197	  	42,197	  	—  
	 3
	  	 Nuclear Fuel (gross)
	  	793,026	  	816,874	  	769,178	  	793,026	  	793,026	  	—  	  		  	—  
	 4
	  	 Total Production Plant
	  	10,294,497	  	10,155,918	  	10,517,469	  	10,336,694	  	10,336,694	  	42,197	  	42,197	  	—  
	 5
	  	 Transmission Plant
	  		  		  		  		  		  		  		  	
	 6
	  	 Distribution Plant
	  		  		  		  		  		  		  		  	
	 7
	  	 General Plant
	  	957,076	  	993,303	  	920,849	  	957,076	  	957,076	  	—  	  		  	—  
	 8
	  	 Intangible Plant
	  	215,745	  	213,736	  	217,753	  	215,745	  	215,745	  	—  	  		  	—  
	 9
	  	 Total (ties to Line 1)
	  		  		  		  		  		  		  		  	
		  		  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	
	 10
	  	 Total of Production/General/Intangible Plant for use in Annual Percentage calculation
	  	11,467,318	  	11,362,957	  	11,656,071	  	11,509,517	  	11,509,515	  	42,197	  	42,197	  	
		  		  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	

  

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 Attachment 8-1 
 (Part I of II) 
 TERMS AND CONDITIONS 
 FOR THE SCHEDULING OF POWER 
 SUPPLIED BY NORTH CAROLINA 
 ELECTRIC MEMBERSHIP CORPORATION 
 TO
ITS INDEPENDENT MEMBERS 







 All NCEMC Committed Resources associated with the Wholesale Power Supply Agreement between the Seller and
the Buyer are governed by and subject to all of the terms and conditions in this Exhibit, unless a specific Resource Summary Attachment explicitly provides otherwise. Unless defined in this Exhibit, all capitalized terms used herein shall have the
respective meanings set forth as Article One of the Wholesale Power Supply Agreement. 
 General Principles 
  

	1.	Buyer is responsible for planning the way it chooses to use any Capacity or Energy delivered pursuant to one of the Resource Summary Attachments governed by this Exhibit. As a part
of the Wholesale Power Supply Agreement, the Parties have agreed to a set of Resource Summary Attachments that collectively are intended to represent a financial approximation of an allocation of the NCEMC Committed Resources on the Effective Date.


  

	2.	For any hour of delivery, Seller will optimize resources around final dispatch for the combined load of all of Seller’s Participating Members, plus the schedules of the Buyer
and other Independent Members. 

  

	3.	Buyer will pay Seller charges for Energy and the delivery of Energy to the Interface Point under terms specified in Resource Summary Attachments and terms specified elsewhere in
this Agreement including but not limited to Sections 2.4, 2.12 and Article Five. 

 Delivery of Allocated Resources 
  

	4.	Energy Scheduled from Buyer’s Independent Member Allocation is delivered to the Interface Point. The cost and expense of all transmission services, including ancillary services
and losses, from the Interface Point are the sole responsibility of Buyer. 

  

	5.	Seller will be deemed the provider of the resources needed for the purposes of tagging and for the designation of resources under the applicable tariffs of the Transmission
Provider(s) selected by Buyer. 

 Scheduling by Buyer 
  

	6.	All Schedules from Buyer for each Independent Member Allocation will be in whole MWs and may not exceed the IM Allocation MW detailed on the Resource Summary Attachment.


  

	7.	Buyer will submit a separate Schedule in conformance with this Exhibit S by System by resource up to the Maximum Scheduling Limit by System, as further described in Paragraph 23 of
this Exhibit S. 

  

	8.	Buyer will be responsible for scheduling and arranging for the delivery of its SEPA allocation. 

  

 - 2 - 









	9.	For any Independent Member Allocation that is designated as producing Must-Take Energy, Buyer is required to Schedule for every hour of every day of the Delivery Period its full
Must-Take Energy obligation from such a resource, and may not amend or reduce its Schedule for that Energy: provided, however, that to the extent that Seller’s obligation to purchase Must-Take Energy from a resource designated as producing
Must-Take Energy is reduced in any hour, Buyer’s hourly Must-Take Energy obligation shall be adjusted by the ratio of Seller’s hourly Must-Take Energy obligation to the Resource Capacity, rounded to whole MWs. The Buyer shall not be
entitled to Schedule Must-Take Energy in an hour in amounts, which exceed the Buyer’s adjusted Must-Take Energy obligation for that hour. 

  

	10.	Buyer is obligated to Schedule resources in accordance with the terms and conditions provided in the Resource Summary Attachments consistent with the minimum run times in the
contracts pertaining to Seller’s purchased and/or owned resources, and Seller will use its good faith efforts to accommodate Buyer’s Schedules that do not meet the minimum run time requirements, but only so long as meeting such
non-conforming Schedules would not likely result in additional costs to Seller or any of its Participating Members. 

  

	11.	Except with respect to Buyer’s Independent Member Allocations that supply Must-Take Energy, Buyer is not obligated to Schedule its Independent Member Allocations consistent
with the minimum volumes in the power supply contracts of Seller that are in force on the Independent Member Effective Date. 

  

	12.	By 7:00 a.m. EPT each day Buyer must provide Seller with an hourly forecast of its load by System for the following day. 

  

	13.	The Buyer may Schedule its resources consistent with the table below. Day-ahead Schedules are those submitted before 8:00 a.m. EPT the day prior to flow. Intra-day Schedules are
those that are requested after the 8:00 a.m. EPT deadline above. All Schedule changes must occur at the top of the hour. Intra-day Schedule changes require two (2) hours advance notice. 

  

			
	 Scheduling
Changes

	 Day Ahead
	 	 Intra-Day

	Unlimited changes up to the IM Allocation MW identified in the Resource Summary Attachment for each resource in whole MWs.	 	Up to two changes to the hourly Schedule for the remainder of the day. Each change to the hourly Schedule shall be no greater than 5%, for a cumulative maximum of 10% each hour. Additional
changes will be accommodated on a best efforts basis.

 Scheduling by Seller 
  

 - 3 - 









	14.	Seller is not obligated to meet Buyer’s final Schedule using the NCEMC Committed Resources associated with the Independent Member Allocations Scheduled by Buyer.


  

	15.	Seller will accept the risk and/or benefit resulting from differences in the cost of resources used to provide Buyer Energy in accordance with its Schedule(s), and the costs Seller
would have incurred had it used NCEMC Committed Resources to meet Buyer’s Schedule of the Scheduled resource(s). 

  

	16.	Should Seller acquire an alternate resource, rather than use an NCEMC Committed Resource to serve Buyer’s Schedule, and that alternate resource is curtailed, Buyer’s
Schedule will be maintained and any penalty, benefit or curtailment will be borne by Seller. 

  

	17.	Should all or any portion of NCEMC Committed Resources that have been Scheduled by Seller and Buyer to meet Buyer’s Schedule in any given hour be interrupted, then Seller shall
try to identify available alternate resources which Seller, in its sole discretion, determines are reasonably priced and suitable to meet Seller’s needs. If Seller determines that such alternate resources are available, Seller may maintain the
Scheduled deliveries to Buyer but at a price to be determined by Seller and communicated to Buyer. If no alternate resources are available to Seller, Buyer’s Schedule will be curtailed. All damages recovered by Seller from the Person
responsible for the interruption in service will be shared with Buyer and every other Member similarly affected by such interruption in service. 

 Operations and Planning 
  

	18.	Buyer will provide Seller with a real time telemetered signal of Buyer’s load for Seller’s use, for purposes of determining when to start and stop the dynamic schedule,
and to Schedule certain Must-Take Energy requirements of NCEMC Committed Resources. 

  

	19.	Seller shall provide and inform the Buyer on each Thursday by 1:00 p.m. EPT of the projected amount of Energy available hourly by Independent Member Allocation by System for
Scheduling by Buyer for the following Saturday through Friday period, including the amount of Must-Take Energy that will be delivered and must be taken hourly. 

  

	20.	By 8:00 a.m. EPT each day, Buyer shall provide an hourly forecast of its Native Load by System for the next seven (7) days. For purposes of this Exhibit S, “Native
Load” shall mean only the load of Buyer’s members. This load forecast will be used by Seller to calculate the hourly Energy available from the Independent Member Allocations that are available to be Scheduled for a given interval of time.


  

	21.	Buyer shall provide Seller on each Thursday by 4:00 p.m. EPT, a projected hourly Schedule of all the Independent Member Allocations governed by this Agreement for the following
Saturday through Friday period. 

  

 - 4 - 









	22.	Seller and Buyer agree on the following checkout and verification process: 

 As soon as practical after midnight, confirm hourly Schedules, energy flows and energy charges by resource and daily totals; 
 Provide a contact person each Business Day for the following: 
 Resolve issues that remain unresolved;

 Perform month-to-date confirmations of hourly Schedules, energy flows and energy charges by resource and daily totals; 
 Finalize monthly checkouts by the second Business Day of the following month; and 
 Coordinate any true-ups that may be required. 
  

	23.	For Buyers having loads in more than one System, Buyer will provide at the Independent Member Election Date and on July 1of each subsequent year, a forecast of the percentage
of its retail load in each System. (The sum of the percentages must equal 100%). The Maximum Scheduling Limit by System for the following calendar year will be calculated by multiplying the percentage of Buyer’s retail load in each System times
the total of Buyer’s Independent Member Allocations for the following calendar year. 

  

 - 5 - 








 Attachment 8-1 
 (Part II of II) 
 TERMS AND CONDITIONS 
 FOR OBTAINING TRANSMISSION 
 SERVICES ADEQUATE TO DELIVER 
 FROM THE INTERFACE POINTS 
 ESTABLISHED UNDER THE 
 WHOLESALE POWER SUPPLY AGREEMENT 
 OF NCEMC FOR SALES TO 
 ITS INDEPENDENT MEMBERS 
  

 - 6 - 








 General Principles and Responsibilities for Transmission: All Resource Summary Attachments associated with
the Wholesale Power Supply Agreement between Seller and Buyer are governed by and subject to the terms and conditions in this Exhibit unless a specific Resource Summary Attachment explicitly provides otherwise. For purposes of this Exhibit, the
Wholesale Power Supply Agreement and each Resource Summary Attachment governed by this Exhibit, the term “Acceptable Transmission Service” means the level of service available at any point in time that is equal to or better than that level
of service currently defined as “Network Integration Transmission Service” under the Open Access Transmission Tariff of the System to which Buyer’s distribution system is physically interconnected, and if connected to more than one
System, then Buyer must have Acceptable Transmission Service for each Interface Point. 
 The following terms for transmission service apply to each Resource
Summary Attachment included as a part of this Agreement. All of these terms assume that the current Open Access Transmission Tariff environment in force on the Effective Date remains in force, without modification or amendment. The Parties hereto
agree that any amendment, modification or change to that tariff or the regulatory environment for the wholesale electric industry, whether by regulation, regulatory action, statute, judicial action, executive decision or order, or otherwise, may
require modification of this Exhibit to restore to Buyer and Seller the benefits that each intended. Such amendments, modifications or changes would include, without limitation, any changes or modifications of the wholesale electric industry
environment based on the Standard Market Design, or the restructuring of the transmission systems or the regulatory oversight of same. If the Parties fail to reach agreement on modifications of this Exhibit, the dispute shall be subject to
arbitration under the Wholesale Power Supply Agreement. 
 Buyer is responsible for planning for and scheduling the receipt of capacity and energy to be
delivered to Buyer. Buyer will be responsible for negotiating, making and keeping in force one or more transmission agreements with the Transmission Provider(s) necessary to perform its obligations under the Wholesale Power Supply Agreement. At a
minimum, Buyer will negotiate, make and keep in force its own Network Integration Service Agreement (“NITSA”) and its own Network Operating Agreement (“NOA”). 
 Subject to and contingent upon the concurrence and agreement of each affected Transmission Provider, the RUS, and the Federal Energy Regulatory Commission (“FERC”), the Parties further agree: 
  

	1.	Buyer is responsible for serving its own load. It will do so through contracts with Seller, along with other resources Buyer will acquire. 

  

	2.	Buyer will have its own transmission agreement(s) with each and any Transmission Provider(s) whose services are needed to move capacity or energy from any Interface Point of the
System(s) to which Buyer’s distribution system is physically interconnected. 

  

	3.	Buyer will negotiate its own NITSA and NOA. Seller will provide assistance with these negotiations as requested. The cost for this assistance will be charged to Buyer separately
from charges for Capacity and Energy billed under Article 5.1 of this Agreement. 

  

 - 7 - 









	4.	Seller will transfer the direct-assigned facilities used for that Buyer, if any, to Buyer’s NITSA once the same has become effective. 

  

	5.	Seller will provide Buyer with contractual rights that financially approximate the hypothetical assignment of a total amount of Seller’s owned and/or purchased resources,
calculated in accordance with the NCEMC Member Power Supply Resource Policy, for purposes of Buyer’s NITSA and NOA designations for energy delivered to the System served by the Transmission Provider with which Buyer has entered its NITSA and
NOA. 

  

	6.	If any need exists or arises to designate, in addition to the contracts with Seller, any other network resources in order to meet Buyer’s load in accordance with the tariffs or
other requirements of the Transmission Provider(s), Buyer has the responsibility to locate, identify and designate such other network resources. 

  

	7.	Buyer will have the obligation to satisfy the requirements of the applicable OATT, and purchase or self-supply, as applicable, any ancillary or other services needed or required to
serve its load. 

  

	8.	Buyer will coordinate with Seller or its scheduling agent under Exhibit S to this Wholesale Power Supply Agreement to assure that the proper schedule is in place each day for
Buyer’s scheduled amount of Energy related to each of Buyer’s Resource Summary Attachments that are governed by this Exhibit. 

  

	9.	In addition to the other responsibilities arising under this Exhibit, Buyer shall be solely liable for any energy imbalance settlement and any other settlements or liabilities to
which a Transmission Customer is exposed at and from the Interface Point(s). If Buyer causes Seller to incur energy imbalance charges, Buyer will reimburse Seller for any charges that Seller incurs. 

  

 - 8 - 








 Attachment 8-2 
 SEPA Policies 
 Duke Control Area 
  

	 	•	 	SEPA will send the “Energy for Scheduling” declaration to Duke on Thursday of each week. The declaration shows the minimum energy and excess energy available for
scheduling. 

  

	 	•	 	A single declaration will be sent for the Duke Control Area allocation for all EMCs under a Partial Requirements Service Agreement with Duke. 

 Commencement Date through December 31, 2010 
  


	 	•	 	After receiving the energy declaration from SEPA, Duke will fax or e-mail the declaration directly to Morgan Stanley Capital Group (MSCG). 

  

	 	•	 	MSCG will then fax or e-mail their proposed schedule for the coming week (7 days) to Duke. The seven day week shall commence at the beginning of Saturday and extend to the end of
Friday. 

  

	 	•	 	All scheduling nominations must be made in whole megawatts (MW) only. 

  

	 	•	 	Schedules may be revised on a day-ahead basis only if received by 8 AM. 

  

	 	•	 	If the SEPA declaration shows Excess Energy is available, that energy must be scheduled also – it is not optional. SEPA will notify Duke (as Scheduling Agent) and Duke will in
turn notify MSCG of such available energy. 

  

	 	•	 	After receiving the nominations from MSCG via Duke, SEPA will tag the energy. Both MSCG and Duke should be on the tag. MSCG will appear as the owner of the power and Duke will be
identified as the PSE for the load (sink). 

  

	 	•	 	Duke shall receive any information or notices from SEPA relating to any changes in the schedules to serve EMC’s Native Load. Duke shall ensure that MSCG is aware of such
notices. 

  

	 	•	 	If Duke is notified by the Transmission Provider that a SEPA schedule has been rejected, Duke shall work with SEPA to have a substitute schedule generated for the Day in question
taking into account the information provided by the Transmission Provider in connection with such rejection. 

  

	 	•	 	Duke will provide daily and Monthly reconciliation and checkout services to EMC with respect to SEPA in connection with services and schedules of energy provided by SEPA and MSCG to
serve EMC’s Native Load. 








 January 1, 2011 through December 31, 2021 
  

	 	•	 	Duke is to schedule directly with SEPA on the portion of EMC’s SEPA allocation that lies within the Duke Control Area. 

  

	 	•	 	Duke will receive the energy declaration from SEPA. 

  

	 	•	 	Duke will then fax or e-mail their proposed schedule for the coming week (7 days) to SEPA. The seven day week shall commence at the beginning of Saturday and extend to the end of
Friday. 

  

	 	•	 	All scheduling nominations must be made in whole megawatts (MW) only. 

  

	 	•	 	Schedules may be revised on a day-ahead basis only if received by 8 AM. 

  

	 	•	 	If the SEPA declaration shows Excess Energy is available, that energy must be scheduled also – it is not optional. SEPA will notify Duke (as Scheduling Agent) of such available
energy. 

  

	 	•	 	After receiving the nominations from Duke, SEPA will tag the energy. Duke will be on the tag and will be identified as the PSE for the load (sink). 

  

	 	•	 	Duke shall receive any information or notices from SEPA relating to any changes in the schedules to serve EMC’s Native Load. 

  

	 	•	 	If Duke is notified by the Transmission Provider that a SEPA schedule has been rejected, Duke shall work with SEPA to have a substitute schedule generated for the Day in question
taking into account the information provided by the Transmission Provider in connection with such rejection. 

 Duke will provide daily and
Monthly reconciliation and checkout services to EMC with respect to SEPA in connection with services and schedules of energy provided by SEPA to serve EMC’s Native Load. 
  

 - 2 -