Document:

FORM OF LOCK-UP AGREEMENT

May  [  ],  2006

Buyers  referred  to  below:

Re:     Securities  Purchase  Agreement  dated  May  [  ], 2006 (the "SECURITIES
PURCHASE  AGREEMENT")  by  and  among,  Sorell  Inc.,  (the  "COMPANY")  and the
investors listed on the Schedule of Buyers attached thereto (each, a "BUYEr" and
collectively,  the  "BUYERS")

Ladies  and  Gentlemen:

Defined  terms not otherwise defined herein (the "LOCK-UP AGREEMENT") shall have
the  meanings  set  forth  in  the  Securities  Purchase Agreement.  Pursuant to
Section  7(d)  of  the  Securities  Purchase  Agreement and in satisfaction of a
condition  of  the  Buyers' obligations under the Securities Purchase Agreement,
the  undersigned  irrevocably  agrees with the Buyers that, from the date hereof
until  the  six  month  anniversary  of  the  Effective  Date  (defined  in  the
Registration  Rights  Agreement)  (such  period,  the "RESTRICTION PERIOD"), the
undersigned  will not offer, sell, contract to sell, pledge or otherwise dispose
of,  (or enter into any transaction which is designed to, or might reasonably be
expected  to,  result  in  the  disposition  (whether  by  actual disposition or
effective  economic  disposition  due  to  cash  settlement or otherwise) by the
undersigned  or  any  affiliate of the undersigned or any person in privity with
the  undersigned  or  any affiliate of the undersigned), directly or indirectly,
including  the  filing  (or  participation  in  the  filing)  of  a registration
statement  with the SEC in respect of, or establish or increase a put equivalent
position  or liquidate or decrease a call equivalent position within the meaning
of  Section  16  of  the  1934  Act  and  the  rules  and regulations of the SEC
promulgated  thereunder  with  respect  to, any shares of Common Stock or Common
Stock  Equivalents  beneficially  owned,  held  or  hereafter  acquired  by  the
undersigned  (the  "SECURITIES").  Beneficial  ownership  shall be calculated in
accordance  with  Section  13(d)  of  the  1934 Act.    In order to enforce this
covenant,  the  Company  will  impose  irrevocable  stop-transfer  instructions
preventing  the Company's transfer agent from effecting any actions in violation
of  this  Lock-Up  Agreement.

The  undersigned  acknowledges  that  the execution, delivery and performance of
this  Lock-Up  Agreement  is a material inducement to the Buyers to complete the
transactions  contemplated  by  the  Securities  Purchase Agreement and that the
Buyers  (which shall be third party beneficiaries of this Lock-Up Agreement) and
the  Company  shall  be  entitled  to  specific  performance  of  my obligations
hereunder.  The undersigned hereby represents that the undersigned has the power
and  authority  to execute, deliver and perform this Lock-Up Agreement, that the
undersigned  has  received  adequate  consideration  therefor  and  that  the
undersigned  will  indirectly  benefit  from  the  closing  of  the transactions
contemplated  by  the  Securities  Purchase  Agreement.

This  Lock-Up  Agreement may not be amended or otherwise modified in any respect
without  the  written  consent  of  each  of  the  Company, the Required Holders
(defined  in  the  Notes)  and the undersigned.  This Lock-Up Agreement shall be
construed  and  enforced  in  accordance

                                        1
<PAGE>

with  the  laws  of  the  State of New York, without regard to the principles of
conflicts  of  laws. The undersigned hereby irrevocably submits to the exclusive
jurisdiction  of  the state and United States federal courts sitting in the City
of  New  York,  Borough  of  Manhattan,  for the purposes of any suit, action or
proceeding  arising  out  of  or  relating to this Lock-Up Agreement, and hereby
waives,  and  agrees  not  to assert in any such suit, action or proceeding, any
claim  that it is not personally subject to the jurisdiction of such court, that
the  suit,  action or proceeding is brought in an inconvenient forum or that the
venue  of  the  suit,  action  or proceeding is improper. The undersigned hereby
irrevocably  waives  personal  service  of process and consents to process being
served  in  any such suit, action or proceeding by receiving a copy thereof sent
to  the  Company at the address in effect for notices to it under the Securities
Purchase  Agreement  and  agrees  that  such  service  shall constitute good and
sufficient service of process and notice thereof.  The undersigned hereby waives
any right to a trial by jury.  Nothing contained herein shall be deemed to limit
in  any  way  any  right  to  serve process in any manner permitted by law.  The
undersigned  agrees  and understands that this Lock-Up Agreement does not intend
to  create  any relationship between the undersigned and the Buyers and that the
Buyers are not entitled to cast any votes on the matters herein contemplated and
that  no  issuance or sale of the Securities is created or intended by virtue of
this  Lock-Up  Agreement.

By  its  signature  below,  the Company's transfer agent hereby acknowledges and
agrees that it has placed an irrevocable stop transfer instruction on all shares
of  Common  Stock beneficially owned by the undersigned, reflecting this Lock-Up
Agreement,  until  the  end  of  the Restriction Period.  This Lock-Up Agreement
shall  be  binding  on successors and assigns of the undersigned with respect to
the  Securities  and  any  such  successor  or assign shall enter into a similar
agreement  for  the  benefit  of  the  Buyers.

                            [SIGNATURE PAGE FOLLOWS]

                                        2
<PAGE>

This Lock-Up Agreement may be executed in two or more counterparts, all of which
when  taken  together  may  be  considered  one  and  the  same  agreement.

Signature

Print  Name

Position  in  Company

Address  for  Notice:

Number  of  shares  of  Common  Stock

Number  of  shares  of  Common  Stock
underlying  subject  to  warrants,  options,
debentures  or  other  convertible  securities

By signing below, the Company agrees to enforce the restrictions on transfer set
forth  in  this  Lock-Up  Agreement.

SORELL  INC.

By:_________________________________
Name:  Bon  Kwan  Koo
Title:  Chief  Executive  Officer

Acknowledged  and  agreed  to
as  of  the  _____  day  of  May  2006

[NAME  OF  TRANSFER  AGENT]

By:
Name:
Title:Unassociated Document

    EXHIBIT
      10(b)

    

    RESTATED
      AND AMENDED

    

    OPERATING
      AGREEMENT

    

    Among

    

    Public
      Service Company of Oklahoma

    

    Southwestern
      Electric Power Company

    

    American
      Electric Power Service Corporation

    

    

    

    May
      1,
      2006

    
      
        

         

        
        

      

      
        
        

        
          

        

      

      
        
        

         

      

    

    RESTATED
      AND AMENDED

    OPERATING
      AGREEMENT

    TABLE
      OF
      CONTENTS

    

    
      	 	 	 	 
	
              ARTICLE
                I

            
	 	
              TERM
                OF AGREEMENT

            
	 	 	 	 
	
              ARTICLE
                II

            
	 	
              DEFINITIONS

            
	 	
              2.1

            	
              Agent

            
	 	
              2.2

            	
              Agreement

            
	 	
              2.3

            	
              Buyer’s
                Decremental Energy Value

            
	 	
              2.4

            	
              Capacity
                Commitment

            
	 	
              2.5

            	
              Capacity
                Commitment Charge

            
	 	
              2.6

            	
              Central
                Control Center

            
	 	
              2.7

            	
              Chief
                Executive Officer (CEO)

            
	 	
              2.8

            	
              Company

            
	 	
              2.9

            	
              Company
                Capability

            
	 	
              2.10

            	
              Company
                Demand

            
	 	
              2.11

            	
              Company
                Hourly Capability

            
	 	
              2.12

            	
              Company
                Load Responsibility

            
	 	
              2.13

            	
              Company
                Operating Capability

            
	 	
              2.14

            	
              Company
                Operating Reserve

            
	 	
              2.15

            	
              Company
                Peak Demand

            
	 	
              2.16

            	
              Day

            
	 	
              2.17

            	
              Economic
                Dispatch

            
	 	
              2.18

            	
              Energy

            
	 	
              2.19

            	
              Entitlement
                Energy

            
	 	
              2.20

            	
              Generating
                Unit

            
	 	
              2.21

            	
              Hour

            
	 	
              2.22

            	
              Internal
                Economy Energy

            
	 	
              2.23

            	
              Joint
                Resource Plan

            
	 	
              2.24

            	
              Joint
                Unit

            
	 	
              2.25

            	
              (a)

            	
              Margin
                on Sales

            
	 	 	
              (b)

            	
              Margin
                on Purchases

            
	 	 	
              (c)

            	
              Margin

            
	 	
              2.26

            	
              Month

            
	 	
              2.27

            	
              Operating
                Committee

            
	 	
              2.28

            	
              Own
                Load

            
	 	
              2.29

            	
              Parent
                Company

            
	 	
              2.30

            	
              Planning
                Reserve Level

            
	 	
              2.31

            	
              Pool
                Energy

            
	 	
              2.32

            	
              Power

            
	 	
              2.33

            	
              Prorated
                Reserve Level

            
	 	
              2.34

            	
              Reserve
                Capacity (Company or System)

            
	 	
              2.35

            	
              Seller’s
                Incremental Energy Cost

            
	 	
              2.36

            	
              System

            
	 	
              2.37

            	
              System
                Capability

            
	 	
              2.38

            	
              System
                Demand

            
	 	
              2.39

            	
              System
                Load Responsibility

            
	 	
              2.40

            	
              System
                Operating Capability

            
	 	
              2.41

            	
              System
                Operating Reserve

            
	 	
              2.42

            	
              System
                Peak Demand

            
	 	
              2.43

            	
              Variable
                Cost

            
	 	
              2.44

            	
              Year

            
	 	 	 
	
              ARTICLE
                III

            
	 	
              OBJECTIVES

            
	 	
              3.1

            	
              Purpose

            
	 	 	 
	
              ARTICLE
                IV

            
	 	
              AGENT

            
	 	
              4.1

            	
              Responsibility
                of the Agent

            
	 	
              4.2

            	
              Delegation
                and Acceptance of Authority

            
	 	
              4.3

            	
              Reporting

            
	 	 	 
	
              ARTICLE
                V

            
	 	
              OPERATING
                COMMITTEE

            
	 	
              5.1

            	
              Operating
                Committee

            
	 	
              5.2

            	
              Delegation
                of CEO Duties

            
	 	 	 
	
              ARTICLE
                VI

            
	 	
              OPERATIONS

            
	 	
              6.1

            	
              Planning
                and Authorization of Production Facilities 

            
	 	
              6.2

            	
              Planning
                Reserve Levels

            
	 	
              6.3

            	
              Provision
                to Achieve Planning Reserve Levels

            
	 	
              6.4

            	
              Capacity
                Sales and Purchases and Reserve Shortfalls

            
	 	
              6.5

            	
              Energy
                Exchanges Among the Companies

            
	 	
              6.6

            	
              Energy
                Exchange Pricing

            
	 	
              6.7

            	
              Energy
                Exchanges with non-Associated Entities

            
	 	
              6.8

            	
              Communications
                and Other Facilities

            
	 	 	 
	
              ARTICLE
                VII

            
	 	
              CENTRAL
                CONTROL CENTER

            
	 	
              7.1

            	
              Central
                Control Center

            
	 	
              7.2

            	
              Expenses

            
	 	 	 
	
              ARTICLE
                VIII

            
	 	
              GENERAL

            
	 	
              8.1

            	
              Regulatory
                Authorization

            
	 	
              8.2

            	
              Effect
                on Other Agreements

            
	 	
              8.3

            	
              Schedules

            
	 	
              8.4

            	
              Billings

            
	 	
              8.5

            	
              Waivers

            
	 	
              8.6

            	
              Successors
                and Assigns; No Third Party Beneficiary

            
	 	
              8.7

            	
              Amendment

            
	 	
              8.8

            	
              Independent
                Contractors

            
	 	
              8.9

            	
              Responsibility
                and Liability

            
	 	 	 
	
              SCHEDULE
                A

            
	 	
              JOINT
                UNIT

            
	 	
              9.1

            	
              Purpose

            
	 	
              9.2

            	
              Ownership

            
	 	
              9.3

            	
              Contracts

            
	 	 	 
	
              SCHEDULE
                B

            
	 	
              COMPANY
                UNITS THAT ARE NOT JOINT UNITS

            
	 	
              10.1

            	
              Purpose

            
	 	
              10.2

            	
              Company
                Units that Are Not Joint Units

            
	 	 	 
	
              SCHEDULE
                C

            
	 	
              CAPACITY
                COMMITMENT CHARGE

            
	 	
              11.1

            	
              Purpose

            
	 	
              11.2

            	
              Basis
                for Capacity Commitment

            
	 	
              11.3

            	
              Provisions
                for Capacity Commitment Charge

            
	 	
              11.4

            	
              Provision
                for Energy Charge

            
	 	 	 
	
              SCHEDULE
                D

            
	 	
              PAYMENTS
                AND RECEIPTS FOR POOL ENERGY EXCHANGES AMONG THE
                COMPANIES

            
	 	
              12.1

            	
              Purpose

            
	 	
              12.2

            	
              Hourly
                Calculations 

            
	 	
              12.3

            	
              Receipts
                and Payments

            
	 	 	 
	
              SCHEDULE
                E

            
	 	
              PAYMENTS
                AND RECEIPTS FOR INTERNAL ECONOMY ENERGY EXCHANGES AMONG THE
                COMPANIES

            
	 	
              13.1

            	
              Purpose

            
	 	
              13.2

            	
              Hourly
                Calculations

            
	 	
              13.3

            	
              Payments

            
	 	
              13.4

            	
              Receipts

            
	 	 	 
	
              SCHEDULE
                F

            
	 	
              DISTRIBUTION
                OF MARGIN FOR OFF-SYSTEM ENERGY PURCHASES AND SALES

            
	 	
              14.1

            	
              Purpose

            
	 	
              14.2

            	
              Distribution
                of Margin

            
	 	 	 
	
              SCHEDULE
                G

            
	 	
              DISTRIBUTION
                OF OPERATING EXPENSES OF THE CENTRAL CONTROL CENTER

            
	 	
              15.1

            	
              Purpose

            
	 	
              15.2

            	
              Costs

            
	 	
              15.3

            	
              Distribution
                of Costs

            
	 	 	 
	
              SCHEDULE
                H

            
	 	
              CAPACITY
                COMMITMENT UNITS

            
	 	
              16.1

            	
              Purpose

            
	 	
              16.2

            	
              Commitment
                Units

            
	 	 	 
	
              SCHEDULE
                I

            
	 	
              PLANNING-RESERVE
                CRITERIA

            
	 	
              17.1

            	
              Purpose

            
	 	
              17.2

            	
              Planning
                Reserve Criteria

            
	 	 	 
	
              SCHEDULE
                J

            
	 	
              STATEMENT
                OF PRACTICE REGARDING OFF-SYSTEM ENERGY SALES

            
	 	
              18.1

            	
              Purpose

            
	 	
              18.2

            	
              Determination
                of Energy Price Quotations

            

    

    
      
        

         

        
        

      

      
        
        

        
          

        

      

      
        
        

         

      

    

    RESTATED
      AND AMENDED

    

    OPERATING
      AGREEMENT

    

    Among

    

    

    Public
      Service Company of Oklahoma

    

    Southwestern
      Electric Power Company

    

    American
      Electric Power Service Corporation

    

    

    THIS
      RESTATED AND AMENDED OPERATING AGREEMENT, hereinafter called Agreement is made
      and entered into as of the 1st day of May, 2006 by and among Public Service
      Company of Oklahoma, hereinafter called PSO; Southwestern Electric Power
      Company, hereinafter called SWEPCO; and American Electric Power Service
      Corporation, hereinafter called AEPSC; all of whose common stock is wholly
      owned
      by American Electric Power Company, Inc., and supersedes the Restated and
      Amended Operating Agreement dated January 1, 1997.

    

    WHEREAS,
      PSO and SWEPCO are the owners and operators of interconnected electric
      generation, transmission, and distribution facilities with which they are
      engaged in the business of generating, transmitting, and selling electric Power
      and Energy to the general public and to other electric utilities;
      and

    

    WHEREAS,
      the Companies achieve economic benefits for their customers through operation
      as
      a single interconnected system, and through coordinated planning, construction,
      operation and maintenance of their electric supply facilities; and 

    

    WHEREAS,
      AEPSC is qualified to act as Agent for the Companies;

    NOW,
      THEREFORE, the parties hereto mutually agree as follows:

    

    

    

    ARTICLE
      I

    TERM
      OF
      AGREEMENT

    

    1.1 This
      Agreement shall become effective on such date as is established by the Federal
      Energy Regulatory Commission. This Agreement shall continue in force and effect
      for a period of five (5) Years from the effective date hereinabove described,
      and continue from Year to Year thereafter until terminated by one or more of
      the
      parties upon one (1) Year written notice to the other parties. 

    

    1.2 This
      Agreement is intended to cover only the acquisition, disposition, planning,
      design, construction, operation and maintenance of the Generating Units and is
      not to affect those matters that are the subject of orders of the United States
      Securities and Exchange Commission authorizing certain cost allocation methods
      for AEPSC billings.

    

    ARTICLE
      II

    DEFINITIONS

    

    For
      the
      purposes of this Agreement and of Schedules A through J which are attached
      hereto and made a part hereof, the following definitions shall
      apply:

     

    2.1 Agent
      for
      the
      Companies shall be AEPSC.

     

    2.2 Agreement
      shall be
      this Agreement including all attachments and schedules applying hereto and
      any
      amendments made hereafter.

    

    2.3 Buyer's
      Decremental Energy Value
      shall be
      the cost that a buying Company avoids by reducing the generation of Energy
      from
      its Company Operating Capability or by reducing its purchase of Energy from
      others.

    

    2.4 Capacity
      Commitment
      shall be
      generating capacity committed by a Company to provide capability to enable
      another Company to attain its Planning or Prorated Reserve Level, whichever
      shall be lower.

    

    2.5 Capacity
      Commitment Charge
      shall be
      the charge made by a Company supplying a Capacity Commitment to the Company
      receiving the Capacity Commitment.

    

    2.6 Central
      Control Center
      shall be
      a center operated by the Agent for the optimal utilization of System resources
      for the supply of Power and Energy.

    

    2.7 Chief
      Executive Officer (CEO)
      shall be
      the Chief Executive Officer of American Electric Power Company, Inc. or the
      CEO's designee.

    

    2.8 Company
      shall be
      any one of the American Electric Power Company, Inc. operating companies and
      Companies
      shall be
      the American Electric Power Company, Inc. operating companies
      collectively.

    

    2.9 Company
      Capability
      shall
      be:

    

    (a) The
      sum
      of the Company net plant capability in megawatts; plus

    

    (b) The
      megawatt amount of purchases and exchanges without
      reserves, under contract from other systems; less

    

    (c) The
      megawatt amount of sales and exchanges without reserves, under contract to
      other
      systems.

    

    2.10 Company
      Demand
      shall
      be:

    

    (a) The
      clock-hour demand in megawatts of a Company's system represented by the
      simultaneous hourly input in megawatt-hours from all sources into the system
      of
      a Company; less

    

    (b) The
      sum
      of the simultaneous hourly output in megawatt-hours to other systems (exclusive
      of any wholesale requirements obligations of the Company).

    

    2.11 Company
      Hourly Capability
      for a
      Company shall be:

    

    (a) The
      megawatt amount of dependable capability of the Company's generating units
      on
      line, including its shares of Joint Units and its shares of units owned jointly
      with non-associated entities, during the Hour; plus 

    

    (b) The
      megawatt amount of capability committed to the Company by other Companies or
      non-associated suppliers during the Hour; less

    

    (c) The
      megawatt amount of capability committed by the Company to other Companies or
      non-associated purchasers during the Hour; less

    

    (d)
      Any
      capability required to provide operating reserves.

    

    2.12 Company
      Load Responsibility
      shall be
      as follows:

    

    (a) Company
      Peak Demand; less

    

    (b) The
      difference between Company Peak Demand and Company Demand at the time of System
      Peak Demand; less

    

    (c) The
      megawatt-hour output of the Company served on an interruptible basis during
      the
      hour of Company Peak Demand plus;

    

    (d) The
      contractual amount of sales and exchanges with reserves during the period to
      other systems less;

    

    (e) The
      contractual amount of purchases and exchanges with reserves during the period
      from other systems.

    

    2.13 Company
      Operating Capability shall
      be
      the dependable net capability in megawatts of Generating Units of a Company
      carrying load or ready to take load.

    

    2.14 Company
      Operating Reserve
      shall be
      the excess of Company Operating Capability over Company Demand expressed in
      megawatts.

    

    2.15 Company
      Peak Demand
      for a
      period shall be the highest Company Demand for any Hour during the
      period.

    

    2.16 Day
      shall be
      a calendar Day.

    

    2.17 Economic
      Dispatch
      shall be
      the distribution of total generation requirements among alternative sources
      for
      system economy with due consideration of incremental generating costs,
      incremental transmission losses, and system security.

    

    2.18 Energy
      shall be
      work and shall be expressed in megawatt-hours (MWH).

    

    2.19 Entitlement
      Energy
      shall be
      the Energy from a Joint Unit to which a Company is entitled by reason of its
      ownership position in that unit, expressed in megawatt-hours.

    

    2.20 Generating
      Unit
      shall be
      an electric generator, together with its prime mover and all auxiliary and
      appurtenant devices and equipment designed to be operated as a unit for the
      production of electric Power and Energy. The above is to include equipment
      necessary for connection to the transmission system.

    

    2.21
      Hour
      shall be
      a clock-hour.

    

    2.22 Internal
      Economy Energy
      shall be
      Energy supplied and sold by one Company to another Company, under Economic
      Dispatch, to meet a portion of the purchasing Company's Own Load that could
      otherwise be supplied internally by the purchasing Company.

    

    

    2.23 Joint
      Resource Plan
      shall be
      the formal documented plan developed from time to time for all future Generating
      Units and other power supply and demand management resources.

    

    2.24 Joint
      Unit
      shall be
      any Generating Unit jointly owned by two or more of the Companies.

    

    2.25
      (a) Margin
      on Sales
      shall be
      the difference between: 

    (1)
      the
      revenue from off-System Energy sales made pursuant to Section 6.7 and (2) the
      Seller's Incremental Energy Cost incurred in making such sales.

    

    (b) Margin
      on Purchases
      shall be
      the difference between (1) the
      Buyer's Decremental Energy Value avoided as a result of off-System Energy
      purchases made pursuant to Section 6.7 and (2) payments for off-System
      Energy purchases made pursuant to Section 6.7.

    

    (c) Margin
      for a
      given period shall be the sum of the amounts developed in accordance with
      Sections 2.25 (a) and 2.25 (b).

    

    2.26 Month
      shall be
      a calendar Month.

    

    2.27 Operating
      Committee
      shall be
      the organization established pursuant to section 5.1 and whose duties are more
      fully set forth therein.

    

    2.28 Own
      Load
      shall be
      Energy required to meet Company Demand plus Energy associated with sales or
      exchanges with reserves less Energy associated with purchases or exchanges
      with
      reserves. 

    

    2.29 Parent
      Company
      shall be
      American Electric Power Company, Inc.

     

    2.30 Planning
      Reserve Level
      shall be
      the megawatt amount of required Reserve Capacity for a Company, expressed as
      a
      percentage of its forecasted Company Load Responsibility.

    

    2.31
      Pool
      Energy
      shall be
      the Energy supplied and sold by one Company to another Company to enable the
      purchasing Company to meet a portion of its Own Load that such other Company
      cannot or does not plan to serve with its other resources. There shall be two
      categories of Pool Energy. Emergency Pool Energy shall be the Energy required
      by
      a Company that becomes deficient because of an unplanned occurrence (such as
      a
      generator unit trip or a missed load forecast). Planned Pool Energy shall be
      the
      Energy required by a Company to meet portions of its Own Load when it determines
      that (a) it will be short of capacity when planning for future operations or
      (b)
      such Energy can be taken to economic advantage.

    

    2.32 Power
      shall be
      the rate of doing work and shall be expressed in megawatts (MW).

    

    2.33 Prorated
      Reserve Level
      shall be
      a percentage reserve level for each Company that when divided by that Company's
      Planning Reserve Level gives the same quotient as that for all other
      Companies.

    

    2.34 Reserve
      Capacity (Company or System
      shall be
      that amount in megawatts by which Company or System Capability exceeds Company
      or System Load Responsibility.

    

    2.35 Seller's
      Incremental Energy Cost
      shall be
      the Variable Cost which a selling Company incurs in order to supply energy
      for
      resale.

    

    2.36 System
      shall be
      the coordinated Generating Units of the Companies.

    

    2.37 System
      Capability
      shall be
      the arithmetical sum in megawatts of the individual Company
      Capabilities.

    

    2.38 System
      Demand
      shall be
      the arithmetical sum of the Companies' clock-hour demand in megawatts
      represented by:

    

    (a) The
      simultaneous hourly input in megawatt-hours from all sources into the System;
      less

    

    (b) The
      sum
      of the simultaneous hourly outputs in megawatt hours to other systems (exclusive
      of any wholesale requirements obligations of the Companies).

    

    2.39 System
      Load Responsibility
      shall be
      as follows:

    

    (a) System
      Peak Demand; less

    

    (b) The
      megawatt-hour output of the Companies served on an interruptible basis during
      the Hour of System Peak Demand; plus 

    

    (c) The
      arithmetic sum in megawatts of all of the Companies’
      contractual amount of sales and exchanges with reserves during the period to
      other systems less;

    

    (d) The
      arithmetic sum in megawatts of all the Companies’ contractual amount of
      purchases and exchanges with reserves during the period from other
      systems.

    

    2.40 System
      Operating Capability
      shall be
      the arithmetical sum in megawatts of the individual Company Operating
      Capabilities.

    

    2.41 System
      Operating Reserve
      shall be
      the arithmetical sum of the individual Company Operating Reserves, expressed
      in
      megawatts.

    

    2.42 System
      Peak Demand
      for a
      period shall be the highest System Demand for any hour during the
      period.

    

    2.43 Variable
      Cost
      shall be
      a Company's incremental generation cost or purchased energy cost.

    

    2.44 Year
      shall be
      a calendar Year.

    

    ARTICLE
      III

    OBJECTIVES

    

    3.1 Purpose

    

    The
      purpose of this Agreement is to provide the contractual basis for the
      coordinated planning, construction, operation and maintenance of the System
      to
      achieve optimal economies, consistent with reliable electric service, reasonable
      utilization of natural resources, and environmental requirements.

    

    ARTICLE
      IV

    AGENT

    

    4.1 Responsibility
      of the Agent

    

    The
      Companies hereby designate AEPSC as their Agent for the purpose of:

    

    (a) coordinating
      the acquisition, disposition, planning, design, construction, operation and
      maintenance of the Generating Units of the Companies, including any Joint Units;
      and

    

    (b) supervising
      the design, construction, operation and maintenance of the Central Control
      Center.

    

    4.2
      Delegation
      and Acceptance of Authority

    

    The
      Companies hereby delegate to the Agent and the Agent hereby accepts
      responsibility and authority for the duties listed in Section 4.1 and elsewhere
      in this Agreement. Except as herein expressly established otherwise, the Agent
      shall perform each of those duties in consultation with the Operating Committee.
      The Agent shall also perform each of those duties in accordance with the
      standards of conduct described in 18 C.F.R. § 37.4.

    

    4.3 Reporting

    

    The
      Agent
      shall provide periodic summary reports of its activities under this Agreement
      to
      the Companies and shall keep the Companies and the Operating Committee currently
      informed of situations or problems that may materially affect the outcome of
      these activities. Furthermore, the Agent agrees to report to the Companies
      or to
      the Operating Committee in such additional detail as is requested regarding
      specific issues or projects under its supervision as Agent.

    

    ARTICLE
      V

    OPERATING
      COMMITTEE

    

    5.1 Operating
      Committee

    

    The
      Operating Committee is the organization established to ensure the coordinated
      operation of the System by making recommendations to the CEO regarding
      operations under this Agreement, thereby providing the basis for the CEO's
      direction of the Agent in the performance of the Agent's duties under this
      Agreement and for the performance of the CEO's responsibilities described
      herein. The Operating Committee members will be designated by the CEO, and
      shall
      include a chairperson and at least one member from the Agent and from each
      Company. Operating Committee decisions shall be by a majority vote of those
      present and shall be in the form of recommendations to the CEO. However, any
      member not present may vote by proxy. In any non-unanimous decision the
      principles of the difference shall be reported to the CEO. The chairperson
      shall
      vote only in case of a tie.

    

    5.2 Delegation
      of CEO Duties

    

    The
      CEO
      may delegate to other officers or employees of the Agent or of any Company
      the
      obligation to carry out the CEO's duties hereunder, including without limitation
      approving capacity purchases and sales pursuant to Section 6.4(b).

    

    ARTICLE
      VI

    OPERATIONS

    

    6.1 Planning
      and Authorization of Production Facilities

    

    (a) Each
      Company shall forecast the amount of generating capability required to meet
      its
      Company Load Responsibility and its Planning Reserve Level in future
      years.

    

    (b) A
      current
      Joint Resource Plan will be maintained that will state the current forecasted
      System Load Responsibility including the Planning Reserve Level and the required
      resources.

    

    (c) All
      Generating Units placed in service after the date of this Agreement shall be
      in
      accordance with the then current Joint Resource Plan. Joint Units shall be
      authorized by the Board of Directors of the Parent Company prior to the
      commencement of detailed engineering of the units.

    

    (d) For
      the
      purpose of this Agreement the Generating Units listed in Schedule B are not
      Joint Units.

    

    (e) The
      organization designated by the CEO shall be responsible for the staffing,
      operation and maintenance of each authorized Joint Generating Unit.

    

    6.2 Planning
      Reserve Levels

    

    The
      Operating Committee shall periodically review the Planning Reserve Level for
      each Company and recommend any modifications of such to the CEO.

    

    6.3 Provision
      to Achieve Planning Reserve Levels

    

    (a) Each
      Company shall own, or have available to it under contract; such generating
      capability and other facilities as are necessary to supply its Company Load
      Responsibility plus its Planning Reserve Level.

    

    (b) The
      Joint
      Resource Plan shall be periodically reviewed and adjusted to provide the
      Companies their required Planning Reserve Levels. Any Company with Reserve
      Capacity in excess of its Planning Reserve Level for a future Year shall commit
      such excess capacity to Companies with insufficient Reserve Capacity to meet
      their Planning Reserve Level during that Year or any portion thereof. The
      deficit Companies shall make payments to the excess Companies in respect of
      each
      Month of the Year to which the commitment applies in the amount of the Capacity
      Commitment Charge in accordance with Schedule C. In the event that the System
      Capability, including outside capacity purchases, is insufficient to meet such
      Planning Reserve Levels the System Capability shall be allocated to provide
      each
      Company its Prorated Reserve Level.

    

    (c) The
      ownership percentages in future Joint Units are established in accordance with
      Schedule A, but may be reallocated in the Joint Resource Plan by recommendation
      of the Operating Committee and authorization by the CEO.

    

    6.4 Capacity
      Sales and Purchases and Reserve Shortfalls

    

    (a) The
      Agent
      shall coordinate and otherwise assist the Companies in making off-System
      capacity sales and purchases. 

    

    (b) All
      capacity purchases and sales effective beyond July 1, 1984 shall be coordinated
      by the Agent, recommended by the Operating Committee, and approved by the
      CEO.

    

    (c) The
      System Reserve Capacity shall be at the disposal of any Company requiring such
      capacity. Should the system be short of capacity as a result of an emergency
      and
      be unable to purchase the deficit, each Company shall take such actions as
      are
      necessary to bring System load and generation into balance.

    

    6.5 Energy
      Exchanges Among the Companies

    

    The
      Agent
      shall schedule the Energy output of System Capability to obtain the lowest
      cost
      of Energy for serving System Demand consistent with each Company's operating
      and
      security constraints, including voltage control, stability, loading of
      facilities, operating guides as recommended by the Operating Committee and
      approved by the CEO, fuel commitments, environmental requirements, and
      continuity of service to customers.

    

    6.6 Energy
      Exchange Pricing

    

    For
      the
      purpose of pricing Energy exchange among the Companies, System resources shall
      be utilized to serve System requirements in the following order:

    

    (a) Those
      Generating Units which are designated not to be operated in the order of lowest
      to highest Variable Cost due to Company operating constraints shall be allocated
      to the Company requiring the Generating Unit.

    

    (b) The
      lowest Variable Cost generation of each Company's Hourly Capability shall first
      be allocated to serve its Own Load.

    

    (c) The
      next
      lowest Variable Cost portion of each Company's remaining Hourly Capability
      shall
      be allocated to serve Pool Energy requirements of Companies under System
      Economic Dispatch. Pool Energy shall be priced in accordance with
      Schedule D.

    

    (d) The
      next
      lowest Variable Cost portion of each Company's remaining Hourly Capability
      shall
      be used to supply Internal Economy Energy to Companies under System Economic
      Dispatch. Internal Economy Energy shall be priced in accordance with Schedule
      E.

    

    6.7 Energy
      Exchanges with Non-Associated Entities

    

    The
      Agent
      shall coordinate and direct off-System purchases of Energy necessary to meet
      System requirements or improve System economy, after Internal Economy Energy
      transactions have been effected. The Agent shall coordinate and direct
      off-System sales of Energy available after meeting all of the requirements
      of
      the System including the Energy associated with contractual requirements for
      off-System capacity sales. Such off-System Energy purchases or sales shall
      be
      implemented by decremental or incremental System Economic Dispatch as
      appropriate. Any Margin on Energy purchases from off-System utilities or Margin
      on Energy sales to off-System utilities shall be distributed to the Companies
      in
      accordance with Schedule F. Price quotations for such Energy sales shall be
      determined in accordance with Schedule J.

    

    6.8 Communications
      and Other Facilities

    

    The
      Companies shall provide communications and other facilities necessary
      for:

    

    (a) The
      metering and control of the generating and transmission facilities;

    

    (b) The
      dispatch of electric Power and Energy; and 

    

    (c) For
      such
      other purposes as may be necessary for optimum operation of the
      System.

    

    ARTICLE
      VII

    CENTRAL
      CONTROL CENTER

    

    7.1 Central
      Control Center

    The
      Agent
      shall provide and operate a Central Control Center adequately equipped and
      staffed to meet the requirements of the Companies for efficient, economical
      and
      reliable operation as contemplated by this Agreement.

    

    7.2 Expenses

    

    All
      expenses for operation of the Central Control Center shall be paid by the Agent
      and billed monthly to each Company, in accordance with Schedule G.

    

    ARTICLE
      VIII

    GENERAL

    

    8.1 Regulatory
      Authorization

    

    This
      Agreement is subject to certain regulatory approvals and each Company and the
      Agent shall diligently seek all necessary regulatory authorization for this
      Agreement.

    

    8.2 Effect
      on Other Agreements

    

    This
      Agreement shall not modify the obligations of any Company under any agreement
      between that Company and others not parties to this Agreement in effect at
      the
      date of this Agreement, nor shall it modify any agreement between or among
      the
      Companies under any transmission tariff or other agreement filed with the
      Federal Energy Regulatory Commission.

    

    8.3 Schedules

    

    The
      basis
      of compensation for the use of facilities and for the Power and Energy provided
      or supplied by a Company to another Company or Companies under this Agreement
      shall be in accordance with arrangements agreed upon from time to time among
      the
      Companies. Such arrangements shall be in the form of Schedules, each of which,
      when signed by the parties thereto and approved or accepted by appropriate
      regulatory authority, shall become a part of this Agreement.

    

    8.4 Billings

    

    Bills
      for
      services rendered hereunder shall be calculated in accordance with applicable
      Schedules, and shall be issued on or before the tenth working Day of the Month
      following that in which such service was rendered and shall be payable on or
      before the twentieth Day of such Month. After the thirtieth Day, interest shall
      accrue on any balance due until paid at the latest rate approved by the United
      States Securities and Exchange Commission for loans among Companies in the
      American Electric Power System. Billings in good faith disputed and paid shall
      be deemed to have been paid under protest.

    

    8.5 Waivers

    

    Any
      waiver at any time by a Company of its rights with respect to a default by
      any
      other Company under this Agreement shall not be deemed a waiver with respect
      to
      any subsequent default of similar or different nature, nor shall it prejudice
      its right to deny waiver of similar default to a different Company.

    

    8.6 Successors
      and Assigns; No Third Party Beneficiary

    

    This
      Agreement shall inure to and be binding upon the successors and assigns of
      the
      respective parties hereto, but shall not be assignable by any party without
      the
      written consent of the other parties, except upon foreclosure of a mortgage
      or
      deed of trust. Nothing expressed or mentioned or to which reference is made
      in
      this Agreement is intended or shall be construed to give any person or
      corporation other than the parties hereto any legal or equitable right, remedy
      or claim under or in respect of this Agreement or any provision herein
      contained, expressly or by reference, or any Schedule hereto, this Agreement,
      any such Schedule and any and all conditions and provisions hereof and thereof
      being intended to be and being for the sole and exclusive benefit of the parties
      hereto, and for the benefit of no other person or corporation.

    

    8.7 Amendment

    

    It
      is
      contemplated by the parties that it may be appropriate from time to time to
      change, amend, modify or supplement this Agreement or the Schedules which are
      attached to this Agreement to reflect changes in operating practices or costs
      of
      operations or for other reasons. This Agreement may be changed, amended,
      modified or supplemented by an instrument in writing executed by all of the
      parties.

    

    

    8.8 Independent
      Contractors

    

    It
      is
      agreed among the Companies that by entering into this Agreement the Companies
      shall not become partners, but as to each other and to third persons, the
      Companies shall remain independent contractors in all matters relating to this
      Agreement.

    

    8.9 Responsibility
      and Liability

    

    The
      liability of the parties shall be several, not joint or collective. Each party
      shall be responsible only for its obligations, and shall be liable only for
      its
      proportionate share of the costs and expenses as provided in this Agreement,
      and
      any liability resulting herefrom. Each party hereto will defend, indemnify,
      and
      save harmless the other parties hereto from and against any and all liability,
      loss, costs, damages, and expenses, including reasonable attorney's fees, caused
      by or growing out of the gross negligence, willful misconduct, or breach of
      this
      Agreement by such indemnifying party.

    

    IN
      WITNESS WHEREOF, each of the Companies has caused this Agreement and the
      attached Schedules to be signed in its name and on its behalf by its President
      attested to by its Secretary, both being duly authorized, and AEPSC has caused
      this Agreement and the attached schedules to be signed in its name and on its
      behalf by its Chief Executive Officer attested by its Secretary, both being
      duly
      authorized. This Agreement and attached Schedules shall become effective on
      such
      date as is established by the Federal Energy Regulatory Commission.

    

    

    
      	 	
              PUBLIC
                SERVICE COMPANY OF OKLAHOMA

            
	
              Attest

            	 	 
	 	 	 
	
              /s/
                Thomas G. Berkemeyer

            	
              By:

            	
              /s/
                Stuart Solomon  

            
	
              Assistant
                Secretary

            	 	
              President

            
	 	 	 
	 	
              SOUTHWESTERN
                ELECTRIC POWER COMPANY

            
	
              Attest

            	 	 
	 	 	 
	
              /s/
                Thomas G. Berkemeyer

            	
              By:

            	
              /s/
                Nicholas K. Akins  

            
	
              Assistant
                Secretary

            	 	
              President

            
	 	 	 
	 	
              AMERICAN
                ELECTRIC POWER SERVICE CORPORATION

            
	
              Attest

            	 	 
	 	 	 
	
              /s/
                Thomas G. Berkemeyer

            	
              By:

            	
              /s/
                J. Craig Baker  

            
	
              Assistant
                Secretary

            	 	
              Senior
                Vice President

            
	 	 	 

    

    

    

    

    
      
        
          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      A-1
      -

    SCHEDULE
      A

    JOINT
      UNIT

    

    9.1 Purpose

    

    The
      purpose of this Schedule is to provide the basis for the Companies'
      participation in Joint Units.

    

    9.2 Ownership

    

    (a) Every
      Joint Unit shall be owned by the Companies participating in the Joint Unit
      as
      tenants in common. Ownership shares in each Joint Unit shall be allocated
      insofar as practical to achieve a Prorated Reserve Level for all Companies
      participating in the unit. The allocation shall be recommended by the Operating
      Committee and authorized by the CEO prior to the time the unit is authorized
      by
      the Board of Directors of the Parent Company. However, each Company shall own
      at
      least fifty (50) megawatts of each Joint Unit unless otherwise agreed to by
      the
      Operating Committee. Each Company shall be responsible for its pro rata
      share of the costs of construction of the unit and shall contribute such funds
      to the Agent as billed.

    

    (b) When
      a
      new Joint Unit is installed at a site already occupied by one or more existing
      Generating Units the Agent, in consultation with the Operating Committee, shall
      identify any existing facilities that will be common to the new Joint Unit
      and
      the portion of the common facilities to be allocated to the new Joint Unit.
      The
      owners of the new Joint Unit shall compensate the owners of the existing common
      facilities for the use of those common facilities.

    

    9.3 Contracts

    

    The
      Companies shall execute a joint ownership agreement for each Joint Unit, such
      agreement to set out all of the rights and obligations of the parties relating
      to the specific Joint Unit, including the allocation of fuel costs, the
      allocation of other operation costs and the allocation of maintenance costs
      among the owners.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

         

      

    

    

    -
      B-1
      -

    SCHEDULE
      B

    COMPANY
      UNITS THAT ARE NOT JOINT UNITS

    

    10.1
      Purpose

    

    The
      purpose of this Schedule is to list the Generating Units, to be placed in
      service after the date of the original Operating Agreement dated September
      28,
      1983, which are not Joint Units.

    

    10.2
      Company
      Units That Are Not Joint Units

    

    The
      Company units that are not Joint Units are as follows:

    

    Dolet
      Hills Unit Number 1 - SWEPCO

    Pirkey
      Unit Number 1 - SWEPCO

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    

    -
      C-1
      -

    SCHEDULE
      C

    CAPACITY
      COMMITMENT CHARGE

    

    11.1
      Purpose

    

    The
      purpose of this Schedule is to establish the basis for Capacity Commitments
      between the Companies and the rates for the Capacity Commitment Charge and
      associated Energy.

    

    11.2
      Basis
      for Capacity Commitment

    

    A
      committing Company shall make available to a receiving Company unit capacity
      consisting of a portion of the output of one or more specific Generating Units.
      The receiving Company shall be entitled to receive Energy from the specified
      Generating Unit(s) up to an amount equal to an annual load factor of sixty
      (60)
      percent or such other amount as is mutually agreeable. The capacity commitment
      shall be for a twelve-month period or as otherwise mutually agreed.

    

    11.3
      Provisions
      for Capacity Commitment Charge

    

    The
      monthly Capacity Commitment Charge for each specific Generating Unit(s) from
      which capacity is committed shall be determined pursuant to the following
      formula:

    

    A
      =
      (1/12) (B) (C/D) (E)

    

    Where:

    A
      =
      Monthly Capacity Commitment Charge for the specified unit to be due each month
      regardless of the availability of the specific unit.

    

    B
      =
      0.1772 (fixed charge rate for the committing Company).

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    

    -
      C-2
      -

    

    C
      =
      Committing Company's total dollar investment, at original cost, in the specific
      Generating Unit as of December 31 of the year prior to the year of the Capacity
      Commitment, certified by the Chief Financial officer of the
      Company.

    

    D
      = Rated
      net dependable capability of the specific Generating Unit in
      megawatts.

    

    E
      =
      Megawatts of capacity committed from the specified unit.

    

    11.4
      Provision
      for Energy Charge

    

    The
      rate
      for Energy received by a receiving Company from specified unit(s) shall be
      the
      Variable Cost of Energy produced from each specified unit(s) plus ten (10)
      percent of such costs or three (3) mills per kilowatt-hour, whichever is
      less.

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      D-1
      -

    

    SCHEDULE
      D

    PAYMENTS
      AND RECEIPTS FOR POOL ENERGY EXCHANGES

    AMONG
      THE
      COMPANIES

    

    12.1
      Purpose

    

    The
      purpose of this Schedule is to provide the basis for determining payments and
      receipts among the Companies for Pool Energy exchanges.

    

    12.2
      Hourly
      Calculations

    

    The
      payments and receipts of Section 12.3 are calculated Hourly, but are accumulated
      and billed Monthly among the Companies.

    

    12.3
      Receipts
      and Payments

    

    A
      selling
      Company shall receive from a purchasing Company one hundred and ten percent
      (110%) of the Seller's Incremental Energy Cost for Pool Energy sold. A
      purchasing Company shall pay for Pool Energy received one hundred and ten
      percent (110%) of its portion of the aggregate of the Seller's Incremental
      Cost
      for Pool Energy. Where Pool Energy is purchased simultaneously by more than
      one
      Company these charges shall be pro rated in proportion to the
      megawatt-hours of Pool Energy purchased by each buyer.

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      E-1
      -

    SCHEDULE
      E

    PAYMENTS
      AND RECEIPTS FOR INTERNAL

    ECONOMY
      ENERGY EXCHANGES AMONG THE COMPANIES

    

    13.1
      Purpose

    

    The
      purpose of this Schedule is to provide the basis for determining payments and
      receipts among the Companies for Internal Economy Energy exchanges.

    

    13.2
      Hourly
      Calculations

    

    The
      payments of Section 13.3 and receipts of Section 13.4 shall be calculated
      Hourly, but are accumulated and billed Monthly among the Companies.

    

    13.3
      Payments

    

    A
      purchasing Company shall pay the following amount for Internal
      Economy Energy bought:

    

    (a) The
      purchasing Company's portion of the aggregate of Sellers' Incremental Energy
      Costs for Internal Economy Energy where such charges are pro rated in proportion
      to the amount of Internal Economy Energy purchased by each Company; plus

    

    (b) One-half
      of the difference between: 

    

    (1) The
      Buyer's Decremental Energy Value for Internal Economy Energy purchased; and
      

    

    (2) The
      amount determined in Section 13.3 (a).

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      E-2
      -

    

    13.4
      Receipts

    

    A
      selling
      Company shall receive the following amount for Internal Economy Energy
      sold:

    

    (a) The
      Seller's Incremental Energy cost for Internal Economy Energy sold;
      plus

    

    (b) One-half
      of the difference between:

    

    (1) The
      selling Company's portion of the aggregate of the Buyers' Decremental Energy
      Values for Internal Economy Energy purchased where such values are prorated
      in
      proportion to the amount of Internal Economy Energy sold by each Company;
      and

    

    (2) The
      amount determined in Section 13.4 (a).

    

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      F-1
      -

    SCHEDULE
      F

    DISTRIBUTION
      OF MARGIN FOR OFF-SYSTEM

    ENERGY
      PURCHASES AND SALES

    

    14.1 Purpose

    

    The
      purpose of this Schedule is to establish the basis for distributing among the
      Companies the Margin on off-System Energy purchases and sales.

    

    14.2
      Distribution
      of Margin

    

    Any
      Margin on off-System Energy purchases and sales shall be distributed to the
      Companies in proportion to the relative magnitude of the sums for each Company
      of the Energy generated or not generated by such Company in order to participate
      in Internal Economy or off-System purchases or sales. 

    

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      G-1
      -

    SCHEDULE
      G

    DISTRIBUTION
      OF OPERATING EXPENSES

    OF
      THE
      CENTRAL CONTROL CENTER

    

    15.1 Purpose

    

    The
      purpose of this Schedule is to provide a basis for the distribution among the
      Companies of the costs incurred by the Agent in operating the Central Control
      Center.

    

    15.2 Costs

    

    Costs
      for
      the purpose of this Schedule shall include all costs incurred in maintaining
      and
      operating the Central Control Center including, among others, such items as
      salaries, wages, rentals, the cost of materials and supplies, interest, taxes,
      depreciation, transportation, travel expenses, consulting, and other
      professional services.

    

    15.3
      Distribution
      of Costs

    

    All
      costs
      shall be billed by Agent to the Companies in proportion to the average of the
      maximum Company Peak Demands experienced during the three previous calendar
      Years with the following exception. In the event the Central Control Center
      makes a study or performs a special service in which all Companies are not
      thus
      proportionately interested, any resulting cost shall be distributed to the
      interested parties in accordance with the standard procedures of Agent
      authorized by the United States Securities and Exchange Commission.

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      H-1
      -

    SCHEDULE
      H

    CAPACITY
      COMMITMENT UNITS

    

    16.1 Purpose

    

    The
      purpose of this Schedule is to identify the Generating Units of the Companies
      from which Capacity Commitments shall be made pursuant to Section 6.3 and with
      reference to which the Capacity Commitment Charge shall be determined in
      accordance with Schedule C.

    

    16.2
      Commitment
      Units

    

    Listed
      below are the Generating Units from which each of the Companies shall commit
      Capacity to other Companies pursuant to Section 6.3. Capacity Commitments shall
      be made from the first listed unit of the committing Company unless or to the
      extent that such unit is not expected to be available during the commitment
      period. In such event, Capacity Commitments shall be made from the second listed
      unit of the committing Company.

    

    
      	
              COMPANY/UNIT
                NAME

            	
              RATING

              (MW)

            	
              YEAR

              INSTALLED

            
	
              PSO

            	 	 
	
              Riverside
                #2

            	
              465

            	
              1976

            
	
              Riverside
                #1

            	
              457

            	
              1974

            
	
              SWEPCO

            	 	 
	
              Know
                Lee #5

            	
              344

            	
              1974

            
	
              Wilkes
                #3

            	
              351

            	
              1971

            
	 	 	 

    

    

    

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      I-1
      -

    SCHEDULE
      I

    PLANNING-RESERVE
      CRITERIA

    

    17.1 Purpose

    

    The
      purpose of this Schedule is to identify the criteria which shall be used by
      the
      Companies in determining their respective Planning Reserve Levels for purposes
      of determining their respective Capacity Commitment obligations under Section
      6.3.

    

    17.2
      Planning
      Reserve Criteria

    

    The
      Planning Reserve Level for each of the Companies shall be equal to 15% of
      Company Load Responsibility.

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

        

      

    

    -
      J-1
      -

    SCHEDULE
      J

    STATEMENT
      OF PRACTICE

    REGARDING
      OFF-SYSTEM ENERGY SALES

    

    18.1 Purpose

    

    The
      purpose of this Schedule is to identify the basis upon which price quotations
      for energy sales to a non-associated entity will be determined when any such
      a
      non-associated entity makes a request of a Company or the Agent to purchase
      System Energy. The prices for sales made shall be set by negotiation or in
      accordance with filed rate schedules of the Companies and may include standard
      industry adders.

    

    18.2
      Determination
      of Energy Price Quotations

    

    The
      AEP
      Central Control Center will predispatch System Energy requirements based upon
      an
      estimate of on-line System generation and such System Energy requirements.
      Any
      request for the purchase of System Energy will result in a price quotation
      based
      upon the incremental running cost of the next least costly to operate System
      Generating Unit (that will be available to make the sale requested during the
      time period that is the subject of the request by the non-associated entity)
      after System needs have been met. In determining whether a Generating Unit
      will
      be available to make a requested sale, the matters listed in Section 6.5 and
      the
      availability of adequate transmission capacity on the System and on the systems
      of other utilities shall be considered.

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