Tennessee Valley Authority Standard Large … · Revision 4 Tennessee Valley Authority Standard Large Generator Interconnection Procedures (LGIP) (Applicable to Generat ing Facilities

Revision 4

Tennessee Valley Authority

Standard Large Generator Interconnection Procedures (LGIP)

(Applicable to Generating Facilities that exceed 20 MWs)

April 1, 2015

2 April 1, 2015 Revision 4

TABLE OF CONTENTS

Section 1. Definitions......................................................................................... 6

Section 2. Scope and Application. .................................................................. 15 2.1 Application of Standard Large Generator Interconnection

Procedures. ...................................................................................... 15 2.2 Comparability. .................................................................................. 15 2.3 Base Case Data. .............................................................................. 15 2.4 No Applicability to Transmission Service. ......................................... 15 2.5 Interpretation. ................................................................................... 15

Section 3. Interconnection Requests. ............................................................ 16 3.1 General. ........................................................................................... 16 3.2 Valid Interconnection Request. ........................................................ 16

3.2.1 Initiating an Interconnection Request. .................................. 16 3.2.2 Acknowledgment of Interconnection Request. ..................... 17 3.2.3 Deficiencies in Interconnection Request. ............................. 17 3.2.4 Scoping Meeting. ................................................................. 17

3.3 OASIS Posting. ................................................................................ 18 3.4 Coordination with Affected Systems. ................................................ 19 3.5 Withdrawal. ...................................................................................... 19

Section 4. Queue Position. .............................................................................. 21 4.1 General. ........................................................................................... 21 4.2 Clustering. ........................................................................................ 21 4.3 Transferability of Queue Position. .................................................... 22 4.4 Modifications. ................................................................................... 22

Section 5. Procedures for Interconnection Requests Submitted Prior to Effective Date of Standard Large Generator Interconnection Procedures. .............................................................................................. 25 5.1 Queue Position for Pending Requests. ............................................. 25

5.1.1 Assigned Prior to Effective Date ........................................... 25 5.1.2 Transition Period. ................................................................. 25

5.2 New Transmission Provider. ............................................................ 26

Section 6. Interconnection Feasibility Study. ................................................ 27 6.1 Interconnection Feasibility Study Agreement. ................................... 27 6.2 Scope of Interconnection Feasibility Study. ...................................... 28 6.3 Interconnection Feasibility Study Procedures. ................................. 28


6.4 Meeting with TVA. ............................................................................ 29 6.5 Re-Study. ......................................................................................... 29

Section 7. Interconnection System Impact Study. ........................................ 30 7.1 Interconnection System Impact Study Agreement. ........................... 30 7.2 Execution of Interconnection System Impact Study Agreement. ...... 30 7.3 Scope of Interconnection System Impact Study. .............................. 31 7.4 Interconnection System Impact Study Procedures. .......................... 31 7.5 Meeting with TVA. ............................................................................ 32 7.6 Re-Study. ......................................................................................... 32

Section 8. Interconnection Facilities Study. ................................................... 33 8.1 Interconnection Facilities Study Agreement. ..................................... 33 8.2 Scope of Interconnection Facilities Study. ........................................ 33 8.3 Interconnection Facilities Study Procedures. ................................... 34 8.4 Meeting with TVA. ............................................................................ 35 8.5 Re-Study. ......................................................................................... 35

Section 9. Engineering & Procurement (E&P) Agreement. ........................... 36

Section 10. Optional Interconnection Study. ................................................... 37 10.1 Optional Interconnection Study Agreement. ..................................... 37 10.2 Scope of Optional Interconnection Study. ........................................ 37 10.3 Optional Interconnection Study Procedures. .................................... 38

Section 11. Interconnection Agreement (IA). ................................................... 39 11.1 Tender. ............................................................................................. 39 11.2 Negotiation. ...................................................................................... 39 11.3 Execution. ........................................................................................ 39 11.4 Commencement of Interconnection Activities. ................................. 40

Section 12. Construction of TVA's Interconnection Facilities and Network Upgrades. .................................................................................................. 41 12.1 Schedule. ......................................................................................... 41 12.2 Construction Sequencing. ................................................................ 41

12.2.1 General ................................................................................ 41 12.2.2 Advance Construction of Network Upgrades that are an

Obligation of an Entity other than the Interconnection Customer ............................................................................. 41

12.2.3 Advancing Construction of Network Upgrades that Are Part of an Expansion Plan of TVA ................................................... 42


12.2.4 Amended Interconnection System Impact Study ................. 42

Section 13. Miscellaneous. ................................................................................ 43 13.1 Confidentiality. .................................................................................. 43

13.1.1 Scope................................................................................... 43 13.1.2 Release of Confidential Information. .................................... 44 13.1.3 Rights. .................................................................................. 44 13.1.4 No Warranties. ..................................................................... 44 13.1.5 Standard of Care. ................................................................. 44 13.1.6 Order of Disclosure. ............................................................. 45 13.1.7 Remedies. ............................................................................ 45 13.1.8 Required Disclosures. .......................................................... 46 13.1.9 Return of Information. .......................................................... 46 13.1.10 FOIA. ................................................................................... 46

13.2 Delegation of Responsibility. ............................................................ 47 13.3 Obligation for Study Costs. ............................................................... 47 13.4 Third Parties Conducting Studies. .................................................... 47 13.5 Disputes. .......................................................................................... 48

13.5.1 Submission. ......................................................................... 48 13.5.2 Arbitration Procedures. ........................................................ 49


Appendices

APPENDIX 1 INTERCONNECTION REQUEST. .......................................... 51

APPENDIX 2 INTERCONNECTION FEASIBILITY STUDY AGREEMENT. ......................................................................... 58

APPENDIX 3 INTERCONNECTION SYSTEM IMPACT STUDY AGREEMENT. ......................................................................... 66

APPENDIX 4 INTERCONNECTION FACILITIES STUDY AGREEMENT. ......................................................................... 75

APPENDIX 5 OPTIONAL INTERCONNECTION STUDY AGREEMENT. ........................................................................ 83

APPENDIX 6 INTERCONNECTION AGREEMENT. .................................... 91


Section 1. Definitions.

Adverse System Impact shall mean the negative effects due to technical or operational limits on conductors or equipment being exceeded that may compromise the safety and reliability of the electric system.

Affected System shall mean an electric system other than TVA’s

Transmission System that may be affected by the proposed interconnection. Affected System Operator shall mean the entity that operates an Affected

System. Affiliate shall mean, with respect to a corporation, partnership, or other

entity, each such other corporation, partnership, or other entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such corporation, partnership, or other entity.

Ancillary Services shall mean those services that are necessary to support

the transmission of capacity and energy from resources to loads while maintaining reliable operation of TVA's Transmission System in accordance with Good Utility Practice.

Applicable Laws and Regulations shall mean all duly promulgated

applicable federal, state, and local laws, regulations, rules, ordinances, codes, decrees, judgments, directives, or judicial or administrative orders, permits, and other duly authorized actions of any Governmental Authority.

Applicable Reliability Council shall mean the reliability council applicable

to the Transmission System to which the Generating Facility is directly interconnected.

Applicable Reliability Standards shall mean the requirements and

guidelines of NERC, the Applicable Reliability Council, and the Control Area of the Transmission System to which the Generating Facility is directly interconnected.

Base Case shall mean the base case power flow, short circuit, and stability

data bases used for the Interconnection Studies by TVA or Interconnection Customer.

Breach shall mean the failure of a Party to perform or observe any material term or condition of the Interconnection Agreement.


Breaching Party shall mean a Party that is in Breach of the Interconnection Agreement.

Business Day shall mean Monday through Friday, excluding Federal Holidays.

Calendar Day shall mean any day including Saturday, Sunday, or a Federal

Holiday. Clustering shall mean the process whereby a group of Interconnection

Requests is studied together, instead of serially, for the purpose of conducting the Interconnection System Impact Study.

Commercial Operation shall mean the status of a Generating Facility that

has commenced generating electricity for sale, excluding electricity generated during Trial Operation.

Commercial Operation Date of a unit shall mean the date on which the

Generating Facility commences Commercial Operation as agreed to by the Parties pursuant to the Interconnection Agreement.

Confidential Information shall mean any confidential, proprietary, or trade

secret information of a plan, specification, pattern, procedure, design, device, list, concept, policy, or compilation relating to the present or planned business of a Party, which is designated as confidential by the Party supplying the information, whether conveyed orally, electronically, in writing, through inspection, or otherwise.

Control Area shall mean an electrical system or systems bounded by

interconnection metering and telemetry, capable of controlling generation to maintain its interchange schedule with other Control Areas and contributing to frequency regulation of the interconnection. A Control Area must be certified by an Applicable Reliability Council.

Default shall mean the failure of a Breaching Party to cure its Breach in

accordance with the executed Interconnection Agreement.

Dispute Resolution shall mean the procedure for resolution of a dispute between the Parties in which they will first attempt to resolve the dispute on an informal basis.

Effective Date shall mean the date on which the Interconnection Agreement

becomes effective upon execution by the Parties.


Emergency Condition shall mean a condition or situation: (1) that in the judgment of the Party making the claim is imminently likely to endanger life or property; or (2) that, in the case of TVA, is imminently likely (as determined in a non-discriminatory manner) to cause a material adverse effect on the security of, or damage to TVA’s Transmission System, TVA’s Interconnection Facilities or the electric systems of others to which TVA’s Transmission System is directly connected; or (3) that, in the case of Interconnection Customer, is imminently likely (as determined in a non-discriminatory manner) to cause a material adverse effect on the security of, or damage to, the Generating Facility or Interconnection Customer’s Interconnection Facilities. System restoration and black start shall be considered Emergency Conditions; provided that Interconnection Customer is not obligated by the Interconnection Agreement to possess black start capability.

Engineering & Procurement (E&P) Agreement shall mean an agreement

that authorizes TVA to begin engineering and procurement of long lead-time items necessary for the establishment of the interconnection in order to advance the implementation of the Interconnection Request.

Environmental Law shall mean Applicable Laws or Regulations relating to

pollution or protection of the environment or natural resources. Federal Power Act shall mean the Federal Power Act, as amended, 16 U.S.C. §§ 791a et seq. FERC shall mean the Federal Energy Regulatory Commission

(Commission) or its successor. Generating Facility shall mean Interconnection Customer's device for the

production of electricity identified in the Interconnection Request, but shall not include the Interconnection Customer's Interconnection Facilities.

Generating Facility Capacity shall mean the net capacity of the

Generating Facility and the aggregate net capacity of the Generating Facility where it includes multiple energy production devices.


Good Utility Practice shall mean any of the practices, methods, and acts engaged in or approved by a significant portion of the electric industry during the relevant time period, or any of the practices, methods, and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety, and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the region.

Governmental Authority shall mean any federal, state, local, or other

governmental regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, or other governmental authority having jurisdiction over the Parties, their respective facilities, or the respective services they provide, and exercising or entitled to exercise any administrative, executive, police, or taxing authority or power; provided, however, that such term does not include Interconnection Customer or any Affiliate thereof.

Hazardous Substances shall mean any chemicals, materials or

substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “hazardous constituents,” “restricted hazardous materials,” “extremely hazardous substances,” “toxic substances,” “radioactive substances,” “contaminants,” “pollutants,” “toxic pollutants,” or words of similar meaning and regulatory effect under any applicable Environmental Law, or any other chemical, material, or substance, exposure to which is prohibited, limited, or regulated by any applicable Environmental Law.

Initial Synchronization Date shall mean the date upon which the

Generating Facility is initially synchronized and upon which Trial Operation begins. In-Service Date shall mean the date upon which the Interconnection

Customer reasonably expects it will be ready to begin use of TVA's Interconnection Facilities to obtain back-feed power.

Interconnection Agreement (IA) shall mean the form of interconnection

agreement applicable to an Interconnection Request pertaining to a Large Generating Facility.

Interconnection Customer shall mean any entity, including TVA, which proposes to interconnect its Generating Facility with TVA's Transmission System.


Interconnection Facilities shall mean all facilities and equipment between the Generating Facility and the Point of Interconnection, as well as any other modifications, additions, or upgrades that are necessary to physically and electrically interconnect the Generating Facility to TVA’s Transmission System. Interconnection Facilities are sole-use facilities and shall not include Network Upgrades.

Interconnection Facilities Study shall mean a study conducted by TVA or,

at TVA’s discretion, a third party consultant for the Interconnection Customer to determine a list of facilities (including Interconnection Facilities and Network Upgrades as identified in the Interconnection System Impact Study), the cost of those facilities, and the time required to interconnect the Generating Facility with TVA's Transmission System. The scope of the study is defined in the Standard Large Generator Interconnection Procedures.

Interconnection Facilities Study Agreement shall mean the form of

agreement contained in Appendix 4 of the Standard Large Generator Interconnection Procedures for conducting the Interconnection Facilities Study.

Interconnection Feasibility Study shall mean a preliminary evaluation of

the system impact and cost of interconnecting the Generating Facility to TVA’s Transmission System, the scope of which is described in Section 6 of the Standard Large Generator Interconnection Procedures.

Interconnection Feasibility Study Agreement shall mean the form of

agreement contained in Appendix 2 of the Standard Large Generator Interconnection Procedures for conducting the Interconnection Feasibility Study.

Interconnection Request shall mean an Interconnection Customer's

request, in the form of Appendix 1 to the Standard Large Generator Interconnection Procedures, to interconnect a new Generating Facility, or to increase the capacity of, or make a Material Modification to the operating characteristics of, an existing Generating Facility that is interconnected with TVA’s Transmission System.

Interconnection Service shall mean the service provided by TVA

associated with interconnecting the Interconnection Customer’s Generating Facility to TVA’s Transmission System and enabling it to receive electric energy and capacity from the Generating Facility at the Point of Interconnection, pursuant to the terms of the Interconnection Agreement and, if applicable, the TVA Transmission Service Guidelines.


Interconnection Study shall mean any of the following studies: the Interconnection Feasibility Study, the Interconnection System Impact Study, and the Interconnection Facilities Study described in the Standard Large Generator Interconnection Procedures.

Interconnection System Impact Study shall mean an engineering study

that evaluates the impact of the proposed interconnection on the safety and reliability of TVA’s Transmission System and, if applicable, an Affected System. The study shall identify and detail the system impacts that would result if the Generating Facility were interconnected without project modifications or system modifications, focusing on the Adverse System Impacts identified in the Interconnection Feasibility Study, or to study potential impacts, including but not limited to those identified in the Scoping Meeting as described in the Standard Large Generator Interconnection Procedures.

Interconnection System Impact Study Agreement shall mean the form of

agreement contained in Appendix 3 of the Standard Large Generator Interconnection Procedures for conducting the Interconnection System Impact Study.

Joint Operating Committee shall be a group made up of representatives

from Interconnection Customers and TVA to coordinate operating and technical considerations of Interconnection Service.

Large Generating Facility shall mean a Generating Facility having a

Generating Facility Capacity of more than 20 MW. Loss shall mean any and all losses relating to injury to or death of any

person or damage to property, demand, suits, recoveries, costs and expenses, court costs, attorney fees, and all other obligations by or to third parties, arising out of or resulting from the other Party's performance, or non-performance of its obligations under the Interconnection Agreement on behalf of the indemnifying Party, except in cases of gross negligence or intentional wrongdoing by the indemnifying Party.

Material Modification shall mean those modifications that have a material impact on the cost or timing of any Interconnection Request with a later queue priority date.


Metering Equipment shall mean all metering equipment installed or to be installed at the Generating Facility pursuant to the Interconnection Agreement at the metering points, including but not limited to instrument transformers, MWh meters, data acquisition equipment, transducers, remote terminal unit, communications equipment, phone lines, and fiber optics.

NERC shall mean the North American Electric Reliability Council or its

successor organization. Network Resource shall mean any designated generating resource owned,

purchased, or leased by a Network Customer under the Network Integration Transmission Service. Network Resources do not include any resource, or any portion thereof, that is committed for sale to third parties or otherwise cannot be called upon to meet the Network Customer’s Network Load on a non-interruptible basis.

Network Upgrades shall mean the additions, modifications, and upgrades

to TVA's Transmission System required to accommodate the interconnection of the Large Generating Facility to TVA’s Transmission System and that enhance either the capacity or the reliability of the integrated system.

Notice of Dispute shall mean a written notice of a dispute or claim that

arises out of or in connection with the executed Interconnection Agreement or its performance.

Optional Interconnection Study shall mean a sensitivity analysis based on

assumptions specified by the Interconnection Customer in the Optional Interconnection Study Agreement.

Optional Interconnection Study Agreement shall mean the form of

agreement contained in Appendix 5 of the Standard Large Generator Interconnection Procedures for conducting the Optional Interconnection Study.

Party or Parties shall mean TVA, Transmission Owner, Interconnection

Customer, or any combination of the above.

Point of Interconnection shall mean the point, as set forth in the Interconnection Agreement, where the Interconnection Facilities connect to TVA's Transmission System.


Queue Position shall mean the order of a valid Interconnection Request, relative to all other pending valid Interconnection Requests, that is established based upon the date and time of receipt of the valid Interconnection Request by TVA.

Reasonable Efforts shall mean, with respect to an action required to be

attempted or taken by a Party under the Interconnection Agreement, efforts that are timely and consistent with Good Utility Practice and are otherwise substantially equivalent to those a Party would use to protect its own interests.

Scoping Meeting shall mean the meeting between representatives of the

Interconnection Customer and TVA conducted for the purpose of discussing alternative interconnection options, to exchange information including any transmission data and earlier study evaluations that would be reasonably expected to impact such interconnection options, to analyze such information, and to determine the potential feasible Points of Interconnection.

Site Control shall mean documentation reasonably demonstrating: (1)

ownership of, a leasehold interest in, or a right to develop a site for the purpose of constructing the Generating Facility; (2) an option to purchase or acquire a leasehold site for such purpose; or (3) an exclusivity or other business relationship between Interconnection Customer and the entity having the right to sell, lease, or grant Interconnection Customer the right to possess or occupy a site for such purpose.

Small Generating Facility shall mean a Generating Facility that has a

Generating Facility Capacity of no more than 20 MW. Standard Large Generator Interconnection Procedures (LGIP) shall

mean the interconnection procedures applicable to an Interconnection Request pertaining to a Large Generating Facility.

System Protection Facilities shall mean the equipment, including

necessary protection signal communications equipment, required to protect (1) TVA's Transmission System from faults or other electrical disturbances occurring at the Generating Facility and (2) the Generating Facility from faults or other electrical system disturbances occurring on TVA's Transmission System or on other delivery systems or other generating systems to which TVA's Transmission System is directly connected.


Transmission Owner shall mean an entity that owns, leases, or otherwise possesses an interest in the portion of the Transmission System at the Point of Interconnection and may be a Party to the Interconnection Agreement to the extent necessary.

Trial Operation shall mean the period during which Interconnection

Customer is engaged in on-site test operations and commissioning of the Generating Facility prior to commercial operation.

TVA Transmission Service Guidelines shall mean the terms and

conditions through which open access transmission service is offered on the TVA Transmission System, and as amended or supplemented from time to time.

TVA Transmission System shall mean the facilities owned, controlled, or

operated by TVA that are used to provide transmission service under the TVA Transmission Service Guidelines.

Upfront Payment shall have the meaning specified in one of the following

four agreements, as applicable in the particular circumstances: - the Interconnection Feasibility Study Agreement, - the Interconnection System Impact Study Agreement, - the Interconnection Facilities Study Agreement, or - the Optional Interconnection Study Agreement. Note: The definitions used in the LGIP in no way supersede or modify an

Interconnection Agreement between TVA and an Interconnection Customer or the meaning of any terms contained therein.


Section 2. Scope and Application.

2.1 Application of Standard Large Generator Interconnection Procedures. Sections 2 through 13 apply to processing an Interconnection Request pertaining to a Large Generating Facility.

2.2 Comparability. TVA shall receive, process, and analyze all Interconnection Requests in a timely manner as set forth in this LGIP. TVA shall use the same Reasonable Efforts in processing and analyzing Interconnection Requests from all Interconnection Customers, whether the Generating Facilities are owned by TVA or others.

2.3 Base Case Data. TVA shall provide base power flow, short circuit, and stability databases, including all underlying assumptions, and contingency lists upon request subject to confidentiality provisions. Such databases and lists, hereinafter referred to as Base Cases, shall include all (i) generation projects and (ii) transmission projects, including merchant transmission projects that are proposed for the Transmission System for which a transmission expansion plan has been submitted and approved by the applicable authority.

2.4 No Applicability to Transmission Service. Nothing in this LGIP shall constitute a request for transmission service or confer upon an Interconnection Customer any right to receive transmission service.

2.5 Interpretation. In matters regarding a pending Interconnection Request, the provisions of the LGIP shall control. In matters provided for under an executed IA, the terms, including the definitions, of the IA shall control.


Section 3. Interconnection Requests.

3.1 General. An Interconnection Customer shall submit to TVA an Interconnection Request in the form of Appendix 1 to this LGIP and a refundable deposit of $10,000. TVA shall apply the deposit toward the cost of the applicable Interconnection Study. The Interconnection Customer shall submit a separate Interconnection Request for each site and may submit multiple Interconnection Requests for a single site. The Interconnection Customer must submit a deposit with each Interconnection Request even when more than one request is submitted for a single site. An Interconnection Request to evaluate one site at two different voltage levels shall be treated as two Interconnection Requests.

At Interconnection Customer's option, TVA and Interconnection Customer shall identify alternative Point(s) of Interconnection and configurations at the Scoping Meeting to evaluate in this process and attempt to eliminate alternatives in a reasonable fashion given resources and information available. Interconnection Customer shall select the definitive Point(s) of Interconnection to be studied no later than the execution of the Interconnection Feasibility Study Agreement.

3.2 Valid Interconnection Request.

3.2.1 Initiating an Interconnection Request. To initiate an Interconnection Request, Interconnection Customer must submit all of the following: (i) a $10,000 deposit, (ii) a completed application in the form of Appendix 1, and (iii) demonstration of Site Control or a posting of an additional deposit of $10,000. Such deposits shall be applied toward any Interconnection Studies pursuant to the Interconnection Request. If Interconnection Customer demonstrates Site Control within the cure period specified in Section 3.2.3 after submitting its Interconnection Request, the additional deposit shall be refundable; otherwise, all such deposit(s), additional and initial, become non-refundable.

The expected In-Service Date of the new Large Generating Facility or increase in capacity of the existing Generating Facility shall be no more than the process window for the regional expansion planning period (or in the absence of a


regional planning process, the process window for TVA's expansion planning period) not to exceed seven years from the date the Interconnection Request is received by TVA, unless the Interconnection Customer demonstrates that engineering, permitting, and construction of the new Large Generating Facility or increase in capacity of the existing Generating Facility will take longer than the regional expansion planning period. The In-Service Date may succeed the date the Interconnection Request is received by TVA by a period up to ten years or longer where the Interconnection Customer and TVA agree, such agreement not to be unreasonably withheld.

3.2.2 Acknowledgment of Interconnection Request. TVA shall acknowledge receipt of the Interconnection Request within five (5) Business Days of receipt of the request and attach a copy of the received Interconnection Request to the acknowledgement.

3.2.3 Deficiencies in Interconnection Request. An Interconnection Request is not considered to be a valid request until all items in Section 3.2.1 have been received by TVA. If an Interconnection Request fails to meet the requirements set forth in Section 3.2.1, TVA shall notify the Interconnection Customer within five (5) Business Days of receipt of the initial Interconnection Request of the reasons for such failure and that the Interconnection Request does not constitute a valid request. Interconnection Customer shall provide TVA the additional requested information needed to constitute a valid request within ten (10) Business Days after receipt of such notice. Failure by Interconnection Customer to comply with this Section 3.2.3 shall be treated in accordance with Section 3.5.

3.2.4 Scoping Meeting. Within ten (10) Business Days after receipt of a valid Interconnection Request, TVA shall establish a date agreeable to Interconnection Customer for the Scoping Meeting, and such date shall be no later than thirty (30) Calendar Days from receipt of the valid Interconnection Request, unless otherwise mutually agreed upon by the Parties.


The purpose of the Scoping Meeting shall be to discuss alternative interconnection options, to exchange information including any transmission data that would reasonably be expected to impact such interconnection options, to analyze such information, and to determine the potential feasible Points of Interconnection. TVA and Interconnection Customer shall bring to the meeting such technical data, including, but not limited to: (i) general facility loadings and ratings, (ii) general instability issues, (iii) general short circuit issues, (iv) general voltage issues, and (v) general reliability issues as may be reasonably required to accomplish the purpose of the meeting. TVA and Interconnection Customer shall also bring to the meeting personnel and other resources as may be reasonably required to accomplish the purpose of the meeting in the time allocated for the meeting. On the basis of the meeting, Interconnection Customer shall designate its Point of Interconnection, pursuant to Section 6.1, and one or more available alternative Point(s) of Interconnection. The duration of the meeting shall be sufficient to accomplish its purpose.

3.3 OASIS Posting. TVA shall maintain on its OASIS a list of all Interconnection Requests. The list shall identify, for each Interconnection Request: (i) the maximum summer and winter megawatt electrical output; (ii) the location by county and state; (iii) the projected In-Service Date; (iv) the status of the Interconnection Request, including Queue Position; (v) the date of the Interconnection Request; (vi) the type of Generating Facility to be constructed (e.g., combined cycle, base load, or combustion turbine and fuel type); and (vii) for Interconnection Requests that have not resulted in a completed interconnection, an explanation as to why it was not completed. The list shall not disclose the identity of the Interconnection Customer until the Interconnection Customer executes an IA. TVA shall post to its OASIS site any deviations from the study timelines set forth herein. TVA shall also post any known deviations in the Large Generating Facility's In-Service Date.


3.4 Coordination with Affected Systems. TVA shall coordinate the conduct of any studies required to determine the impact of the Interconnection Request on Affected Systems with Affected System Operators and, if possible, include those results in its applicable Interconnection Study within the time frame specified in this LGIP. TVA shall include such Affected System Operators, as appropriate, in meetings held with the Interconnection Customer as required by this LGIP. The Interconnection Customer shall cooperate with TVA in all matters related to the conduct of studies and the determination of modifications to Affected Systems. A transmission provider that may be an Affected System shall be asked to cooperate with TVA in all matters related to the conduct of studies and the determination of modifications to Affected Systems.

3.5 Withdrawal. The Interconnection Customer may withdraw its Interconnection Request at any time by written notice of such withdrawal to TVA. In addition, if the Interconnection Customer fails to adhere to all requirements of this LGIP, except as provided in Section 13.5 (Disputes), TVA shall deem the Interconnection Request to be withdrawn and shall provide written notice to the Interconnection Customer of the deemed withdrawal and an explanation of the reasons for such deemed withdrawal. Upon receipt of such written notice, the Interconnection Customer shall have fifteen (15) Business Days in which to either respond with information or actions that cure the deficiency or to notify TVA of its intent to pursue Dispute Resolution.

Withdrawal shall result in the loss of the Interconnection Customer’s Queue Position. If an Interconnection Customer disputes the withdrawal and loss of its Queue Position, then during Dispute Resolution, the Interconnection Customer's Interconnection Request is eliminated from the queue until such time that the outcome of Dispute Resolution would restore its Queue Position. An Interconnection Customer that withdraws or is deemed to have withdrawn its Interconnection Request shall pay to TVA all costs that TVA prudently incurs with respect to that Interconnection Request prior to TVA’s receipt of notice described above. The Interconnection Customer must pay all monies due to TVA before it is allowed to obtain any Interconnection Study data or results.


TVA shall (i) update the OASIS Queue Position posting and (ii) refund to the Interconnection Customer any portion of the Interconnection Customer's deposit or study payments that exceed the costs that TVA has incurred. In the event of such withdrawal, TVA, subject to the confidentiality provisions of Section 13.1, shall provide, at Interconnection Customer's request, all information that TVA developed for any completed study conducted up to the date of withdrawal of the Interconnection Request.


Section 4. Queue Position.

4.1 General. TVA shall assign a Queue Position based upon the date and time of receipt of the valid Interconnection Request; provided that, if the sole reason an Interconnection Request is not valid is the lack of required information on the application form, and the Interconnection Customer provides such information in accordance with Section 3.2.3, then TVA shall assign the Interconnection Customer a Queue Position based on the date the application form was originally filed. Moving a Point of Interconnection shall result in a lowering of Queue Position if it is deemed a Material Modification under Section 4.4.3.

The Queue Position of each Interconnection Request shall be used to determine the order of performing the Interconnection Studies and determination of cost responsibility for the facilities necessary to accommodate the Interconnection Request. A higher queued Interconnection Request is one that has been placed "earlier" in the queue in relation to another Interconnection Request that is lower queued.

4.2 Clustering. At TVA’s option, Interconnection Requests may be studied serially or in clusters for the purpose of the Interconnection System Impact Study.

Clustering shall be implemented on the basis of Queue Position. If TVA elects to study Interconnection Requests using Clustering, all Interconnection Requests received within a period not to exceed one hundred and eighty (180) Calendar Days, hereinafter referred to as the “Queue Cluster Window” shall be studied together. The deadline for completing all Interconnection System Impact Studies for which an Interconnection System Impact Study Agreement has been executed during a Queue Cluster Window shall be in accordance with Section 7.4 for all Interconnection Requests assigned to the same Queue Cluster Window. TVA may study an Interconnection Request separately to the extent warranted by Good Utility Practice based upon the electrical remoteness of the proposed Large Generating Facility.


Clustering Interconnection System Impact Studies shall be conducted in such a manner to ensure the efficient implementation of the applicable regional transmission expansion plan in light of the Transmission System's capabilities at the time of each study.

The Queue Cluster Window shall have a fixed time interval based on fixed annual opening and closing dates. Any changes to the established Queue Cluster Window interval and opening or closing dates shall be announced with a posting on TVA's OASIS beginning at least one hundred and eighty (180) Calendar Days in advance of the change and continuing thereafter through the end date of the first Queue Cluster Window that is to be modified.

4.3 Transferability of Queue Position. An Interconnection Customer may transfer its Queue Position to another entity only if such entity acquires the specific Generating Facility identified in the Interconnection Request and the Point of Interconnection does not change.

4.4 Modifications. The Interconnection Customer shall submit to TVA, in writing, modifications to any information provided in the Interconnection Request. The Interconnection Customer shall retain its Queue Position if the modifications are in accordance with Sections 4.4.1, 4.4.2 or 4.4.5, or are determined not to be Material Modifications pursuant to Section 4.4.3.

Notwithstanding the above, during the course of the Interconnection Studies, either the Interconnection Customer or TVA may identify changes to the planned interconnection that may improve the costs and benefits (including reliability) of the interconnection, and the ability of the proposed change to accommodate the Interconnection Request. To the extent the identified changes are acceptable to TVA and Interconnection Customer, such acceptance not to be unreasonably withheld, TVA shall modify the Point of Interconnection and/or configuration in accordance with such changes and proceed with any re-studies necessary to do so in accordance with Section 6.4, Section 7.6, and Section 8.5 as applicable and Interconnection Customer shall retain its Queue Position.


4.4.1 Prior to the return of the executed Interconnection System Impact Study Agreement to TVA, modifications permitted under this Section shall include specifically: (a) a reduction up to 60 percent of electrical output (MW) of the proposed project; (b) modifying the technical parameters associated with the Large Generating Facility technology or the Large Generating Facility step-up transformer impedance characteristics; and (c) modifying the interconnection configuration. For plant increases, the incremental increase in plant output shall go to the end of the queue for the purposes of cost allocation and study analysis.

4.4.2 Prior to the return of the executed Interconnection Facility Study Agreement to TVA, the modifications permitted under this Section shall include specifically: (a) an additional 15 percent decrease in plant size (MW), and (b) Large Generating Facility technical parameters associated with modifications to Large Generating Facility technology and transformer impedances; provided, however, the incremental costs associated with those modifications are the responsibility of the requesting Interconnection Customer.

4.4.3 Prior to making any modification other than those specifically permitted by Sections 4.4.1, 4.4.2, and 4.4.5, Interconnection Customer may first request that TVA evaluate whether such modification is a Material Modification. In response to Interconnection Customer's request, TVA shall evaluate the proposed modifications prior to making them and inform the Interconnection Customer in writing of whether the modifications would constitute a Material Modification. Any change to the Point of Interconnection, except those deemed acceptable under Sections 4.4.1, 6.1, 7.2, or so allowed elsewhere, shall constitute a Material Modification. The Interconnection Customer may then withdraw the proposed modification or proceed with a new Interconnection Request for such modification.


4.4.4 Upon receipt of Interconnection Customer's request for modification permitted under this Section 4.4, TVA shall commence and perform any necessary additional studies as soon as practicable, but in no event shall TVA commence such studies later than thirty (30) Calendar Days after receiving notice of Interconnection Customer's request. Any additional studies resulting from such modification shall be done at Interconnection Customer's cost.

4.4.5 Extensions of less than three (3) cumulative years in the Commercial Operation Date of the Large Generating Facility to which the Interconnection Request relates are not material, unless affecting lower-queued projects, and should be handled through construction sequencing.


Section 5. Procedures for Interconnection Requests Submitted Prior to Effective Date of Standard Large Generator Interconnection Procedures.

5.1 Queue Position for Pending Requests.

5.1.1 Assigned Prior to Effective Date Any Interconnection Customer assigned a Queue Position prior to the effective date of this LGIP shall retain that Queue Position.

5.1.1.1 If an Interconnection Study Agreement has not been executed as of the effective date of this LGIP, then such Interconnection Study, and any subsequent Interconnection Studies, shall be processed in accordance with this LGIP.

5.1.1.2 If an Interconnection Study Agreement has been executed prior to the effective date of this LGIP, such Interconnection Study shall be completed in accordance with the terms of such agreement. With respect to any remaining studies for which an Interconnection Customer has not signed an Interconnection Study Agreement prior to the effective date of the LGIP, TVA must offer the Interconnection Customer the option of either continuing under TVA's existing interconnection study process or going forward with the completion of the necessary Interconnection Studies (for which it does not have a signed Interconnection Studies Agreement) in accordance with this LGIP.

5.1.1.3 If an IA has been executed before the effective date of the LGIP, then the IA would be grandfathered.

5.1.2 Transition Period. To the extent necessary, TVA and Interconnection Customers with an outstanding request (i.e., an Interconnection Request for which an IA has not been executed as of the effective date of this LGIP) shall transition to this LGIP within a reasonable period of time not to exceed sixty (60) Calendar Days. The use of the term "outstanding request" herein shall mean any Interconnection Request, on the effective date of the LGIP:


(i) that has been submitted but not yet accepted by TVA; (ii) where the related interconnection agreement has not yet been executed, (iii) where the relevant Interconnection Study Agreements have not yet been executed, or (iv) where any of the relevant Interconnection Studies are in process but not yet completed. Any Interconnection Customer with an outstanding request as of the effective date of this LGIP may request a reasonable extension of any deadline, otherwise applicable, if necessary to avoid undue hardship or prejudice to its Interconnection Request. A reasonable extension shall be granted by TVA to the extent consistent with the intent and process provided for under this LGIP.

5.2 New Transmission Provider. If TVA transfers control of its Transmission System to a successor Transmission Provider during the period when an Interconnection Request is pending, TVA shall transfer to the successor Transmission Provider any amount of the deposit or payment with interest thereon that exceeds the cost that it incurred to evaluate the request for interconnection. Any difference between such net amount and the deposit or payment required by this LGIP shall be paid by or refunded to the Interconnection Customer, as appropriate. TVA shall coordinate with the successor Transmission Provider to complete any Interconnection Study, as appropriate, that TVA has begun but has not completed. If TVA has tendered a draft IA to the Interconnection Customer but the Interconnection Customer has not executed the IA, unless otherwise provided, the Interconnection Customer may elect to complete negotiations with the successor to TVA.


Section 6. Interconnection Feasibility Study.

6.1 Interconnection Feasibility Study Agreement. Simultaneously with the acknowledgement of a valid Interconnection Request TVA shall provide to Interconnection Customer the optional Interconnection Feasibility Study Agreement in the form of Appendix 2. The Interconnection Feasibility Study Agreement shall specify that Interconnection Customer is responsible for the actual cost of the Interconnection Feasibility Study. Within five (5) Business Days following the Scoping Meeting Interconnection Customer shall specify for inclusion in the attachment to the Interconnection Feasibility Study Agreement the Point(s) of Interconnection and any reasonable alternative Point(s) of Interconnection. Within five (5) Business Days following TVA’s receipt of such designation, TVA shall tender to Interconnection Customer the Interconnection Feasibility Study Agreement signed by TVA, which includes a good faith estimate of the cost for completing the Interconnection Feasibility Study. The Interconnection Customer shall execute and deliver to TVA the Interconnection Feasibility Study Agreement along with the applicable Upfront Payment specified in the Interconnection Feasibility Study Agreement no later than thirty (30) Calendar Days after its receipt.

On or before the return of the executed Interconnection Feasibility Study Agreement to TVA, the Interconnection Customer shall provide the technical data called for in Appendix 1, Attachment A.

If the Interconnection Feasibility Study uncovers any materially adverse result(s) not contemplated during the Scoping Meeting, a substitute Point of Interconnection identified by either Interconnection Customer or TVA, and acceptable to the other, such acceptance not to be unreasonably withheld, shall be substituted for the designated Point of Interconnection specified above without loss of Queue Position, and Re-studies shall be completed pursuant to Section 6.4 as applicable. For the purpose of this Section 6.1, if TVA and Interconnection Customer cannot agree on the substituted Point of Interconnection, then Interconnection Customer may direct that one of the alternatives as specified in the Interconnection Feasibility Study Agreement, as specified pursuant to Section 3.2.4, shall be the substitute.


If Interconnection Customer and TVA agree to forgo the Interconnection Feasibility Study, TVA shall initiate an Interconnection System Impact Study under Section 7 of this LGIP and apply the $10,000 deposit towards the Interconnection System Impact Study.

6.2 Scope of Interconnection Feasibility Study. The Interconnection Feasibility Study shall preliminarily evaluate the feasibility of the proposed interconnection to the Transmission System.

The Interconnection Feasibility Study shall consider the Base Case as well as all Generating Facilities (and with respect to (iii), any identified Network Upgrades) that, on the date the Interconnection Feasibility Study is commenced: (i) are directly interconnected to the Transmission System; (ii) are interconnected to Affected Systems and may have an impact on the Interconnection Request; (iii) have a pending higher queued Interconnection Request to interconnect to the Transmission System; and (iv) have no Queue Position but have executed an IA. The Interconnection Feasibility Study shall consist of a power flow and short circuit analysis. The Interconnection Feasibility Study shall provide a list of facilities and a non-binding good faith estimate of cost responsibility and a non-binding good faith estimated time to construct.

6.3 Interconnection Feasibility Study Procedures. TVA shall utilize existing studies to the extent practicable when it performs the study. TVA shall use Reasonable Efforts to complete the Interconnection Feasibility Study no later than forty-five (45) Calendar Days after TVA receives the fully executed Interconnection Feasibility Study Agreement. At the request of the Interconnection Customer or at any time TVA determines that it will not meet the required time frame for completing the Interconnection Feasibility Study, TVA shall notify the Interconnection Customer as to the schedule status of the Interconnection Feasibility Study. If TVA is unable to complete the Interconnection Feasibility Study within that time period, it shall notify the Interconnection Customer and provide an estimated completion date with an explanation of the reasons why additional time is required. Upon request, TVA shall provide the Interconnection Customer supporting documentation, work papers, and relevant power flow and short circuit databases for the Interconnection Feasibility Study, subject to confidentiality arrangements consistent with Section 13.1.


6.4 Meeting with TVA. Within ten (10) Business Days of providing an Interconnection Feasibility Study report to Interconnection Customer or at an otherwise mutually agreeable date, TVA and Interconnection Customer shall meet to discuss the results of the Interconnection Feasibility Study.

6.5 Re-Study. If Re-Study of the Interconnection Feasibility Study is required due to a higher queued project dropping out of the queue, or a modification of a higher queued project subject to Section 4.4, or re-designation of the Point of Interconnection pursuant to Section 6.1 TVA shall notify Interconnection Customer in writing. TVA shall use Reasonable Efforts to complete such Re-Study no later than forty- five (45) Calendar Days from the date of the notice. Any cost of Re- Study shall be borne by the Interconnection Customer being re- studied.


Section 7. Interconnection System Impact Study.

7.1 Interconnection System Impact Study Agreement. Unless otherwise agreed, pursuant to the Scoping Meeting provided in Section 3.2.4, simultaneously with the delivery of the Interconnection Feasibility Study to the Interconnection Customer, TVA shall provide to the Interconnection Customer an Interconnection System Impact Study Agreement in the form of Appendix 3 to this LGIP. The Interconnection System Impact Study Agreement shall provide that the Interconnection Customer shall compensate TVA for the actual cost of the Interconnection System Impact Study. Within three (3) Business Days following the Interconnection Feasibility Study results meeting, TVA shall provide to Interconnection Customer a non-binding good faith estimate of the cost and timeframe for completing the Interconnection System Impact Study.

7.2 Execution of Interconnection System Impact Study Agreement. The Interconnection Customer shall execute the Interconnection System Impact Study Agreement and deliver the executed Interconnection System Impact Study Agreement to TVA no later than thirty (30) Calendar Days after its receipt along with demonstration of Site Control, and the applicable Upfront Payment specified in the Interconnection System Impact Study Agreement.

If the Interconnection Customer does not provide all such technical data when it delivers the Interconnection System Impact Study Agreement, TVA shall notify the Interconnection Customer of the deficiency within five (5) Business Days of the receipt of the executed Interconnection System Impact Study Agreement and the Interconnection Customer shall cure the deficiency within ten (10) Business Days of receipt of the notice, provided, however, such deficiency does not include failure to deliver the executed Interconnection System Impact Study Agreement or Upfront Payment.

If the Interconnection System Impact Study uncovers any materially adverse result(s) not contemplated during the Scoping Meeting and the Interconnection Feasibility Study, a substitute Point of Interconnection identified by either Interconnection Customer or TVA, and acceptable to the other, such acceptance not to be unreasonably withheld, shall be substituted for the designated Point of Interconnection specified above without loss of Queue Position, and restudies shall be completed pursuant to Section 7.6 as applicable. For the purpose of this Section 7.2, if TVA and Interconnection


Customer cannot agree on the substituted Point of Interconnection, then Interconnection Customer may direct that one of the alternatives as specified in the Interconnection Feasibility Study Agreement, as specified pursuant to Section 3.2.4, shall be the substitute.

7.3 Scope of Interconnection System Impact Study. The Interconnection System Impact Study shall evaluate the impact of the proposed interconnection on the reliability of the Transmission System. The Interconnection System Impact Study shall consider the Base Case as well as all Generating Facilities (and with respect to (iii) below, any identified Network Upgrades associated with such higher queued interconnection) that, on the date the Interconnection System Impact Study is commenced: (i) are directly interconnected to the Transmission System; (ii) are interconnected to Affected Systems and may have an impact on the Interconnection Request; (iii) have a pending higher queued Interconnection Request to interconnect to the Transmission System; and (iv) have no Queue Position but have executed an IA.

The Interconnection System Impact Study shall consist of a short circuit analysis, a stability analysis, and a power flow analysis. The Interconnection System Impact Study shall state the assumptions upon which it is based; state the results of the analyses; and provide the requirements or potential impediments to providing the requested interconnection service, including a preliminary indication of the cost and length of time that would be necessary to correct any problems identified in those analyses and implement the interconnection. The Interconnection System Impact Study shall provide a list of facilities that are required as a result of the Interconnection Request and a non-binding good faith estimate of cost responsibility and a non- binding good faith estimated time to construct.

7.4 Interconnection System Impact Study Procedures. TVA shall coordinate the Interconnection System Impact Study with any Affected System that is affected by the Interconnection Request pursuant to Section 3.4 above. TVA shall utilize existing studies to the extent practicable when it performs the study. TVA shall use Reasonable Efforts to complete the Interconnection System Impact Study within ninety (90) Calendar Days after the receipt of the Interconnection System Impact Study Agreement or notification to proceed, study payment, and technical data. If TVA uses Clustering, TVA shall use Reasonable Efforts to deliver a completed


Interconnection System Impact Study within ninety (90) Calendar Days after the close of the Queue Cluster Window.

At the request of the Interconnection Customer or at any time TVA determines that it will not meet the required time frame for completing the Interconnection System Impact Study, TVA shall notify the Interconnection Customer as to the schedule status of the Interconnection System Impact Study. If TVA is unable to complete the Interconnection System Impact Study within the time period, it shall notify the Interconnection Customer and provide an estimated completion date with an explanation of the reasons why additional time is required. Upon request, TVA shall provide the Interconnection Customer all supporting documentation, workpapers, and relevant pre-Interconnection Request and post-Interconnection Request power flow, short circuit and stability databases for the Interconnection System Impact Study, subject to confidentiality arrangements consistent with Section 13.1.

7.5 Meeting with TVA. Within ten (10) Business Days of providing an Interconnection System Impact Study report to Interconnection Customer or at an otherwise mutually agreeable date, TVA and Interconnection Customer shall meet to discuss the results of the Interconnection System Impact Study.

7.6 Re-Study. If Re-Study of the Interconnection System Impact Study is required due to a higher queued project dropping out of the queue, or a modification of a higher queued project subject to Section 4.4, or re- designation of the Point of Interconnection pursuant to Section 7.2 TVA shall notify Interconnection Customer in writing. TVA shall use Reasonable Efforts to complete such Re-Study no later than sixty (60) Calendar Days from the date of the notice. Any cost of Re- Study shall be borne by the Interconnection Customer being re- studied.


Section 8. Interconnection Facilities Study.

8.1 Interconnection Facilities Study Agreement. Simultaneously with the delivery of the Interconnection System Impact Study to the Interconnection Customer, TVA shall provide to the Interconnection Customer an Interconnection Facilities Study Agreement in the form of Appendix 4 to this LGIP. The Interconnection Facilities Study Agreement shall provide that the Interconnection Customer shall compensate TVA for the actual cost of the Interconnection Facilities Study. Within three (3) Business Days following the Interconnection System Impact Study results meeting, TVA shall provide to Interconnection Customer a non- binding good faith estimate of the cost and timeframe for completing the Interconnection Facilities Study. The Interconnection Customer shall execute the Interconnection Facilities Study Agreement and deliver the executed Interconnection Facilities Study Agreement to TVA within thirty (30) Calendar Days of the date of the accompanying transmittal letter, together with the required technical data, and the applicable Upfront Payment specified in the Interconnection Facilities Study Agreement.

8.1.1 TVA shall invoice Interconnection Customer on a monthly basis for the work to be conducted on the Interconnection Facilities Study beginning with the first month in which total actual costs, including applicable overheads, incurred by TVA in performing the Interconnection Facilities Study exceed the Upfront Payment. Interconnection Customer shall pay invoiced amounts within thirty (30) Calendar Days of receipt of invoice. TVA shall continue to hold the amounts on deposit until settlement of the final invoice.

8.2 Scope of Interconnection Facilities Study. The Interconnection Facilities Study shall specify and estimate the cost of the equipment, engineering, procurement, and construction work needed to implement the conclusions of the Interconnection System Impact Study in accordance with Good Utility Practice to physically and electrically connect the Interconnection Facility to the Transmission System. The Interconnection Facilities Study shall also identify the electrical switching configuration of the connection equipment, including, without limitation: the transformer, switchgear, meters, and other station equipment; the nature and estimated cost of any Interconnection Facilities and Network Upgrades necessary to


accomplish the interconnection; and an estimate of the time required to complete the construction and installation of such facilities.

8.3 Interconnection Facilities Study Procedures. TVA shall coordinate the Interconnection Facilities Study with any Affected System pursuant to Section 3.4 above. TVA shall utilize existing studies to the extent practicable in performing the Interconnection Facilities Study. TVA shall endeavor to complete the Interconnection Facilities Study by the estimated date stated in the Interconnection Facilities Study Agreement. TVA shall use the same due diligence in completing the Interconnection Facilities Study for any other Interconnection Customer that it uses when conducting studies for TVA facilities.

At the request of the Interconnection Customer or at any time TVA determines that it will not meet the required time frame for completing the Interconnection Facilities Study, TVA shall notify the Interconnection Customer as to the schedule status of the Interconnection Facilities Study. If TVA is unable to complete the Interconnection Facilities Study and issue a draft Interconnection Facilities Study report within the time required, it shall notify the Interconnection Customer and provide an estimated completion date and an explanation of the reasons why additional time is required.

The Interconnection Customer may, within thirty (30) Calendar Days after receipt of the draft report, provide written comments to TVA, which TVA shall include in the final report. TVA shall issue the final Interconnection Facilities Study report within fifteen (15) Business Days of receiving the Interconnection Customer’s comments or promptly upon receiving Interconnection Customer’s statement that it will not provide comments. TVA may reasonably extend such fifteen-day period upon notice to the Interconnection Customer if the Interconnection Customer’s comments require TVA to perform additional analyses or make other significant modifications prior to the issuance of the final Interconnection Facilities Report. Upon request, TVA shall provide the Interconnection Customer supporting documentation, work papers, and databases or data developed in the preparation of the Interconnection Facilities Study, subject to confidentiality arrangements consistent with Section 13.1.


8.4 Meeting with TVA. At the Interconnection Customer’s request, within ten (10) Business Days of providing a draft Interconnection Facilities Study report to Interconnection Customer or at an otherwise mutually agreeable date, TVA and Interconnection Customer shall meet to discuss the results of the Interconnection Facilities Study.

8.5 Re-Study. If Re-Study of the Interconnection Facilities Study is required due to a higher queued project dropping out of the queue or a modification of a higher queued project pursuant to Section 4.4, TVA shall so notify Interconnection Customer in writing. TVA shall use the same due diligence in completing the Re-Study for any other Interconnection Customer that it uses when conducting studies for TVA facilities. Any cost of Re-Study shall be borne by the Interconnection Customer being re-studied.


Section 9. Engineering & Procurement (E&P) Agreement. Prior to executing an IA, an Interconnection Customer may, in order to advance the implementation of its interconnection, request and TVA shall offer to the Interconnection Customer, an E&P Agreement that authorizes TVA to begin engineering and procurement of long lead-time items necessary for the establishment of the interconnection. However, TVA shall not be obligated to offer an E&P Agreement if Interconnection Customer is in Dispute Resolution as a result of an allegation that Interconnection Customer has failed to meet any milestones or comply with any prerequisites specified in other parts of the LGIP. The E&P Agreement is an optional procedure, and it shall not alter the Interconnection Customer’s Queue Position or In-Service Date. The E&P Agreement shall provide for the Interconnection Customer to pay the cost of all activities authorized by the Interconnection Customer and to make advance payments or provide other satisfactory security for such costs.

The Interconnection Customer shall pay the cost of such authorized activities and any cancellation costs for equipment that is already ordered for its interconnection, which cannot be mitigated as hereafter described, whether or not such items or equipment later become unnecessary. If Interconnection Customer withdraws its application for interconnection or either Party terminates the E&P Agreement, to the extent the equipment ordered can be canceled under reasonable terms, Interconnection Customer shall be obligated to pay the associated cancellation costs. To the extent that the equipment cannot be reasonably canceled, TVA may elect: (i) to take title to the equipment, in which event TVA shall refund Interconnection Customer any amounts paid by Interconnection Customer for such equipment and shall pay the cost of delivery of such equipment, or (ii) to transfer title to and deliver such equipment to Interconnection Customer, in which event Interconnection Customer shall pay any unpaid balance and cost of delivery of such equipment.


Section 10. Optional Interconnection Study.

10.1 Optional Interconnection Study Agreement. On or after the date when the Interconnection Customer receives Interconnection System Impact Study results, the Interconnection Customer may request, and TVA shall perform a reasonable number of Optional Studies. The request shall describe the assumptions that the Interconnection Customer wishes TVA to study within the scope described in Section 10.2. Within five (5) Business Days after receipt of a request for an Optional Interconnection Study, TVA shall provide to the Interconnection Customer an Optional Interconnection Study Agreement in the form of Appendix 5.

The Optional Interconnection Study Agreement shall: (i) specify the technical data that the Interconnection Customer must provide for each phase of the Optional Interconnection Study, (ii) specify Interconnection Customer’s assumptions as to which Interconnection Requests with earlier queue priority dates will be excluded from the Optional Interconnection Study case, and (iii) TVA’s estimate of the cost of the Optional Interconnection Study. To the extent known by TVA, such estimate shall include any costs expected to be incurred by any Affected System whose participation is necessary to complete the Optional Interconnection Study. Notwithstanding the above, TVA shall not be required as a result of an Optional Interconnection Study request to conduct any additional Interconnection Studies with respect to any other Interconnection Request.

The Interconnection Customer shall execute the Optional Interconnection Study Agreement within ten (10) Business Days of receipt and deliver the Optional Interconnection Study Agreement, the technical data, and the applicable Upfront Payment specified in the Optional Interconnection Study Agreement to TVA.

10.2 Scope of Optional Interconnection Study. The Optional Interconnection Study shall consist of a sensitivity analysis based on the assumptions specified by the Interconnection Customer in the Optional Interconnection Study Agreement. The Optional Interconnection Study shall also identify TVA's Interconnection Facilities and the Network Upgrades, and the estimated cost thereof, which may be required to provide Interconnection Service based upon the results of the Optional Interconnection Study. The Optional Interconnection Study shall be performed solely for informational purposes. TVA shall use


Reasonable Efforts to coordinate the study with any Affected Systems that may be affected by the Interconnection being studied. TVA shall utilize existing studies to the extent practicable in conducting the Optional Interconnection Study.

10.3 Optional Interconnection Study Procedures. The executed Optional Interconnection Study Agreement, the prepayment, and technical and other data called for therein must be provided to TVA within ten (10) Business Days of Interconnection Customer receipt of the Optional Interconnection Study Agreement. TVA shall use Reasonable Efforts to complete the Optional Interconnection Study within a mutually agreed upon time period specified within the Optional Interconnection Study Agreement. If TVA is unable to complete the Optional Interconnection Study within such time period, it shall notify the Interconnection Customer and provide an estimated completion date and an explanation of the reasons why additional time is required. Any difference between the study payment and the actual cost of the study shall be paid to TVA or refunded to the Interconnection Customer, as appropriate. Upon request, TVA shall provide the Interconnection Customer supporting documentation and work papers and databases or data developed in the preparation of the Optional Interconnection Study, subject to confidentiality arrangements consistent with Section 13.1.


Section 11. Interconnection Agreement (IA).

11.1 Tender. Interconnection Customer shall tender comments on the draft Interconnection Facilities Study Report within thirty (30) Calendar Days of receipt of the report. Within thirty (30) Calendar Days after the comments are submitted, TVA shall tender a draft IA, together with draft appendices (or exhibits) completed to the extent practicable. Interconnection Customer shall execute and return the completed draft appendices (or exhibits) within thirty (30) Calendar Days.

11.2 Negotiation. Notwithstanding Section 11.1, at the request of the Interconnection Customer TVA shall begin negotiations with the Interconnection Customer concerning the appendices (or exhibits) to the IA at any time after the Interconnection Customer executes the Interconnection Facilities Study Agreement. TVA and the Interconnection Customer shall negotiate concerning any disputed provisions of the appendices (or exhibits) to the draft IA for not more than sixty (60) Calendar Days after tender of the final Interconnection Facilities Study Report. If the Interconnection Customer determines that negotiations are at an impasse, it may request termination of the negotiations at any time after tender of the draft IA pursuant to Section 11.1 and initiate Dispute Resolution procedures pursuant to Section 13.5. If the Interconnection Customer requests termination of the negotiations, but within sixty (60) Calendar Days thereafter fails to initiate Dispute Resolution, it shall be deemed to have withdrawn its Interconnection Request. Unless otherwise agreed by the Parties, if the Interconnection Customer has not executed the IA or initiated Dispute Resolution procedures pursuant to Section 13.5 within sixty (60) Calendar Days of tender of draft IA, it shall be deemed to have withdrawn its Interconnection Request. TVA shall provide to the Interconnection Customer a final IA within fifteen (15) Business Days after the completion of the negotiation process.

11.3 Execution. Within fifteen (15) Business Days after receipt of the final IA, the Interconnection Customer shall provide TVA (A) reasonable evidence of continued Site Control or (B) posting of $250,000, non- refundable additional security, which shall be applied toward future construction costs. At the same time, Interconnection Customer also shall provide reasonable evidence that one or more of the following milestones in


the development of the Large Generating Facility, at the Interconnection Customer’s election, has been achieved: (i) the execution of a contract for the supply or transportation of fuel to the Large Generating Facility; (ii) the execution of a contract for the supply of cooling water to the Large Generating Facility; (iii) execution of a contract for the engineering for, procurement of major equipment for, or construction of, the Large Generating Facility; (iv) execution of a contract for the sale of electric energy or capacity from the Large Generating Facility; or (v) application for an air, water, or land use permit.

The Interconnection Customer shall execute two originals of the tendered IA and return them to TVA.

11.4 Commencement of Interconnection Activities. If the Interconnection Customer executes the final IA, TVA and the Interconnection Customer shall perform their respective obligations in accordance with the terms of the IA.


Section 12. Construction of TVA's Interconnection Facilities and Network Upgrades.

12.1 Schedule. TVA and the Interconnection Customer shall negotiate in good faith concerning a schedule for the construction of TVA's Interconnection Facilities and the Network Upgrades.

12.2 Construction Sequencing.

12.2.1 General In general, the In-Service Date of an Interconnection Customer seeking interconnection to the Transmission System shall determine the sequence of construction of Network Upgrades.

12.2.2 Advance Construction of Network Upgrades that are an Obligation of an Entity other than the Interconnection Customer An Interconnection Customer with an IA, in order to maintain its In-Service Date, may request that TVA advance to the extent necessary the completion of Network Upgrades associated with another Interconnection Customer’s Interconnection Request that: (i) were assumed in the Interconnection Studies for the Interconnection Customer, (ii) are necessary to support the In-Service Date, and (iii) would otherwise not be completed, pursuant to a contractual obligation of an entity other than the Interconnection Customer that is seeking interconnection to the Transmission System, in time to support such In-Service Date. Upon such request, TVA shall use Reasonable Efforts to advance the construction of such Network Upgrades to accommodate such request; provided that the Interconnection Customer commits to pay TVA: (i) any associated expediting costs and (ii) the cost of such Network Upgrades.

The entity with the original contractual obligation to construct such Network Upgrades shall be obligated to pay the costs of the Network Upgrades as originally scheduled, less the costs of expediting. Payment by that entity shall be due on the date that it would have been due had there been no request for advance construction. TVA shall forward to the Interconnection Customer the amount paid by the entity


with a contractual obligation to construct the Network Upgrades as payment in full for the outstanding balance owed to the Interconnection Customer.

12.2.3 Advancing Construction of Network Upgrades that Are Part of an Expansion Plan of TVA An Interconnection Customer with an IA, in order tomaintain its In-Service Date, may request that TVA advance to the extent necessary the completion of Network Upgrades that: (i) are necessary to support such In-Service Date and (ii) would otherwise not be completed, pursuant to an expansion plan of TVA, in time to support such In-Service Date. Upon such request, TVA shall use Reasonable Efforts to advance the construction of such Network Upgrades to accommodate such request; provided that the Interconnection Customer commits to pay TVA any associated expediting costs.

12.2.4 Amended Interconnection System Impact Study An Interconnection System Impact Study shall be amended to determine the facilities necessary to support the requested In-Service Date. This amended study shall include those transmission and Large Generating Facilities that are expected to be in service on or before the requested In-Service Date.


Section 13. Miscellaneous.

13.1 Confidentiality. Confidential Information shall include, without limitation, all information relating to a Party’s technology, research and development, business affairs, and pricing, and any information supplied by either of the Parties to the other prior to the execution of an IA.

Information is Confidential Information only if it is clearly designated or marked in writing as confidential on the face of the document, or, if the information is conveyed orally or by inspection, if the Party providing the information orally informs the Party receiving the information that the information is confidential.

If requested by either Party, the other Party shall provide in writing, the basis for asserting that the information referred to in this Section warrants confidential treatment, and the requesting Party may disclose such writing to the appropriate Governmental Authority. Each Party shall be responsible for the costs associated with affording confidential treatment to its information.

13.1.1 Scope. Confidential Information shall not include information that the receiving Party can demonstrate: (1) is generally available to the public other than as a result of a disclosure by the receiving Party; (2) was in the lawful possession of the receiving Party on a non-confidential basis before receiving it from the disclosing Party; (3) was supplied to the receiving Party without restriction by a third party, who, to the knowledge of the receiving Party after due inquiry, was under no obligation to the disclosing Party to keep such information confidential; (4) was independently developed by the receiving Party without reference to Confidential Information of the disclosing Party; (5) is, or becomes, publicly known, through no wrongful act or omission of the receiving Party or Breach of the IA; or (6) is required, in accordance with §13.1.6 of the LGIP, to be disclosed by any Governmental Authority or is otherwise required to be disclosed by law or subpoena, or is necessary in any legal proceeding establishing rights and obligations under the IA. Information designated as Confidential Information shall no longer be deemed confidential if the Party that designated


the information as confidential notifies the other Party that it no longer is confidential.

13.1.2 Release of Confidential Information. Neither Party shall release or disclose Confidential Information to any other person, except to employees and consultants of the parties working on the Interconnection Request, or to parties who may be or are considering providing financing to or equity participation with Interconnection Customer, or to potential purchasers or assignees of Interconnection Customer, on a need-to-know basis in connection with these procedures, and only if such person has first been advised of the confidentiality provisions of this Section 13.1 and has agreed to comply with such provisions. Notwithstanding the foregoing, a Party having received Confidential Information that provides the information to any other person shall remain primarily responsible for any release of Confidential Information in contravention of this Section 13.1.

13.1.3 Rights. Each Party retains all rights, title, and interest in the Confidential Information that each Party discloses to the other Party. The disclosure by each Party to the other Party of Confidential Information shall not be deemed a waiver by either Party or any other person or entity of the right to protect the Confidential Information from public disclosure.

13.1.4 No Warranties. By providing Confidential Information, neither Party makes any warranties or representations as to its accuracy or completeness. In addition, by supplying Confidential Information, neither Party obligates itself to provide any particular information or Confidential Information to the other Party nor to enter into any further agreements or proceed with any other relationship or joint venture.

13.1.5 Standard of Care. Each Party shall use at least the same standard of care to protect Confidential Information it receives as it uses to protect its own Confidential Information from unauthorized disclosure, publication, or dissemination. Each Party may use Confidential Information solely to fulfill its obligations to


the other Party under these procedures or its regulatory requirements.

13.1.6 Order of Disclosure. If a court or a Governmental Authority or entity with the right, power, and apparent authority to do so requests or requires either Party, by subpoena, oral deposition, interrogatories, requests for production of documents, administrative order, or otherwise, to disclose Confidential Information, that Party shall provide the other Party with prompt notice of such request(s) or requirement(s) so that the other Party may seek an appropriate protective order or waive compliance with the terms of the IA. Notwithstanding the absence of a protective order or waiver, the Party may disclose such Confidential Information which, in the opinion of its counsel, the Party is legally compelled to disclose. Each Party shall use Reasonable Efforts to obtain reliable assurance that confidential treatment will be accorded any Confidential Information so furnished.

13.1.7 Remedies. Monetary damages would be inadequate to compensate a Party for the other Party’s Breach of its obligations under this Section 13.1. Accordingly, the non-Breaching Party shall be entitled to equitable relief, by way of injunction or otherwise, if the other Party Breaches or threatens to Breach its confidentiality obligations, which equitable relief shall be granted without bond or proof of damages, and the Breaching Party shall not plead in defense that there would be an adequate remedy at law. Such remedy shall not be deemed an exclusive remedy for the Breach of confidentiality obligations, but shall be in addition to all other remedies available at law or in equity. The covenants contained herein are necessary for the protection of legitimate business interests and are reasonable in scope. No Party, however, shall be liable for direct, indirect, incidental, consequential, or punitive damages of any nature or kind resulting from or arising in connection with this Section 13.1 other than the recovery of all gains wrongfully acquired from unauthorized disclosure of any Confidential Information.


13.1.8 Required Disclosures. Any information that a Party claims is Confidential Information shall not be disclosed by the other Party to any person not employed or retained by the other Party, except to the extent disclosure is (i) required by law; (ii) reasonably deemed by the disclosing Party to be required to be disclosed in connection with a dispute between or among the Parties, or the defense of litigation or dispute; (iii) otherwise permitted by consent of the other Party, such consent not to be unreasonably withheld; or (iv) necessary to fulfill its obligations under this LGIP or as a transmission service provider or a Control Area operator including disclosing the Confidential Information to an RTO or ISO or to a sub- regional, regional or national reliability organization or planning group. The Party asserting confidentiality shall notify the other Party in writing of the information it claims is confidential. Prior to any disclosures of the other Party’s Confidential Information under this subparagraph, or if any third party or Governmental Authority makes any request or demand for any of the information described in this subparagraph, the disclosing Party shall promptly notify the other Party in writing and shall assert confidentiality and cooperate with the other Party in seeking to protect the Confidential Information from public disclosure by confidentiality agreement, protective order, or other reasonable measures.

13.1.9 Return of Information. TVA shall, at Interconnection Customer's election, destroy, in a confidential manner, or return the Confidential Information provided at the time that Confidential Information is no longer needed.

13.1.10 FOIA. In response to any Freedom of Information Act (FOIA) request for information received from or relating to the Interconnection Customer and designated by the Interconnection Customer as proprietary or confidential, TVA shall evaluate the requested information and determine the applicability of any FOIA exemptions. TVA shall consult with and seek the views of the Interconnection Customer regarding the application of FOIA exemptions to information submitted by the Interconnection Customer, including, but


not limited to 5 U.S.C. § 552(b)(4). Pursuant to its responsibilities under the FOIA, TVA must make the final determination on whether the requested information is legally exempt from disclosure under FOIA and shall notify the Interconnection Customer accordingly in advance of release of any of the information.

13.2 Delegation of Responsibility. TVA may use the services of subcontractors as it deems appropriate to perform its obligations under the LGIP. TVA shall remain primarily liable to the Interconnection Customer for the performance of such subcontractors and compliance with its obligations of the LGIP. The subcontractor shall keep all information provided confidential and shall use such information solely for the performance of such obligation for which it was provided and no other purpose.

13.3 Obligation for Study Costs. TVA shall charge and Interconnection Customer shall pay the actual costs of the Interconnection Studies. Any difference between the study Upfront Payment and the actual cost of the applicable Interconnection Study shall be paid by or refunded, except as otherwise provided herein, to Interconnection Customer or offset against the cost of any future Interconnection Studies associated with the applicable Interconnection Request prior to beginning any such future Interconnection Studies. Any invoices for Interconnection Studies shall include a detailed and itemized accounting of the cost of each Interconnection Study. Interconnection Customer shall pay any such undisputed costs within thirty (30) Calendar Days of receipt of an invoice therefore. TVA shall not be obligated to perform or continue to perform any studies unless Interconnection Customer has paid all undisputed amounts in compliance herewith.

13.4 Third Parties Conducting Studies. If (i) at the time of the execution of an Interconnection Study Agreement there is disagreement as to the estimated time to complete an Interconnection Study, (ii) the Interconnection Customer receives notice pursuant to Sections 6.3, 7.4, or 8.3 that TVA will not complete an Interconnection Study within the applicable timeframe for such Interconnection Study, or (iii) the Interconnection Customer receives neither the Interconnection Study nor a notice under Sections 6.3, 7.4, or 8.3 within the applicable timeframe for such Interconnection Study, then the Interconnection Customer may request that TVA utilize a third party consultant reasonably


acceptable to Interconnection Customer and TVA to perform such Interconnection Study under the direction of TVA. At other times, TVA may also utilize a third party consultant to perform such Interconnection Study, either in response to a general request of the Interconnection Customer, or on its own volition.

In all cases, use of a third party consultant shall be in accord with the IA and limited to situations where TVA determines that doing so will help maintain or accelerate the study process for the Interconnection Customer's pending Interconnection Request and not interfere with TVA's progress on Interconnection Studies for other pending Interconnection Requests. In cases where the Interconnection Customer requests use of a third party consultant to perform such Interconnection Study, Interconnection Customer and TVA shall negotiate all of the pertinent terms and conditions, including reimbursement arrangements and the estimated study completion date and study review deadline. TVA shall convey all work papers, data bases, study results, and all other supporting documentation prepared to date with respect to the Interconnection Request as soon as practicable upon Interconnection Customer's request subject to the confidentiality provision in Section 13.1. In any case, such third party contract shall be entered into with TVA. In the case of (iii), the Interconnection Customer maintains its right to submit a claim to Dispute Resolution to recover the costs of such third party study. Such third party consultant shall be required to comply with this LGIP, the IA, and the TVA Transmission Service Guidelines procedures and protocols as would apply if TVA were to conduct the Interconnection Study. Such third party consultant shall use the information provided to it solely for purposes of performing such services and for no other purposes. TVA shall cooperate with such third party consultant and Interconnection Customer to complete and issue the Interconnection Study in the shortest reasonable time.

13.5 Disputes.

13.5.1 Submission. Should any question, disagreement, or need for clarification or interpretation about a pending Interconnection Request arise (Dispute), the Parties shall use their best efforts to resolve such matters informally at the lowest possible levels of management. Such matters not resolved at the working level within a sixty (60) day period shall be referred to higher levels of management of both the Interconnection Customer


and TVA for resolution, if possible. The Parties further shall develop and use consensual alternative dispute resolution processes, such as mediation and facilitation, whenever necessary and appropriate.

13.5.2 Arbitration Procedures. Disputes related to the IA shall be handled in accordance with the terms of an executed IA.


APPENDICES TO LGIP

APPENDIX 1 INTERCONNECTION REQUEST. ......................................... 51

APPENDIX 2 INTERCONNECTION FEASIBILITY STUDY AGREEMENT. ........................................................................ 58

APPENDIX 3 INTERCONNECTION SYSTEM IMPACT STUDY AGREEMENT. ........................................................................ 66

APPENDIX 4 INTERCONNECTION FACILITIES STUDY AGREEMENT. ........................................................................ 75

APPENDIX 5 OPTIONAL INTERCONNECTION STUDY AGREEMENT. ....................................................................... 83

APPENDIX 6 INTERCONNECTION AGREEMENT. .................................... 91


APPENDIX 1 to LGIP INTERCONNECTION

REQUEST

1. The undersigned Interconnection Customer submits this request to

interconnect its Large Generating Facility with TVA’s Transmission System.

2. This Interconnection Request is for (check one): A proposed new Large Generating Facility. An increase in the generating capacity or a Material Modification of an existing Generating Facility.

3. The Interconnection Customer provides the following information:

a. Address or location of the proposed new Large Generating Facility site (to the extent known) or, in the case of an existing Generating Facility, the name and specific location of the existing Generating Facility;

b. The maximum electrical output for a new Large Generating Facility for each season:

Summer (June-Sept.) MW output at °F Winter (Dec.-Feb.) MW output at °F Spring (March-May) MW output at °F Fall (Oct.-Nov.) MW output at °F;

For an existing Large Generating Facility:

MW increase in the generating capacity;

c. General description of the equipment configuration;

d. Commercial Operation Date by day, month, and year

e. Name, address, telephone number, and e-mail address of the Interconnection Customer’s contact person;

f. Approximate location of the proposed Point of Interconnection; and

g. Interconnection Customer Data (set forth in Attachment A).

4. Applicable deposit amount as specified in the LGIP.


5. Evidence of Site Control as specified in the LGIP (check one)

Is attached to this Interconnection Request Will be provided at a later date in accordance with this LGIP

6. This Interconnection Request shall be submitted to the representative indicated below:

Jason L. Adams Tennessee Valley Authority 1101 Market Street, MR 1B-C Chattanooga, TN 37402-2801 (423) 751-7274 [email protected]

7. Representative of the Interconnection Customer to

contact: [ ]

8. This Interconnection Request is submitted

by: Name of Interconnection Customer:

By (signature):

Name (type or print):

Title:

Date:


Attachment A (page 1) To Appendix

1 Interconnection Request

LARGE GENERATING FACILITY DATA UNIT RATINGS kVA °F Voltage Power Factor Speed (RPM) Connection (e.g. Wye) Short Circuit Ratio Frequency, Hertz Stator Amperes at Rated kVA Field Volts Max Turbine MW °F

COMBINED TURBINE-GENERATOR-EXCITER INERTIA DATA

Inertia Constant, H = kW sec/kVA Moment-of-Inertia, WR2 = lb. ft.2

REACTANCE DATA (PER UNIT-RATED kVA) DIRECT AXIS QUADRATURE AXIS

Synchronous – saturated Xdv Xqv

Synchronous – unsaturated Xdi Xqi

Transient – saturated X′dv X′qv

Transient – unsaturated X′di X′qi

Subtransient – saturated X″dv X″qv

Subtransient – unsaturated X″di X″qi

Negative Sequence – saturated X2v

Negative Sequence – unsaturated X2i

Zero Sequence – saturated X0v

Zero Sequence – unsaturated X0i

Leakage Reactance Xlm

FIELD TIME CONSTANT DATA (SEC)

Open Circuit T′do T′qo

Three-Phase Short Circuit Transient T′d3 T′q

Line to Line Short Circuit Transient T′d2

Line to Neutral Short Circuit Transient T′d1

Short Circuit Subtransient T″d T″q

Open Circuit Subtransient T″ do T″ qo

ARMATURE TIME CONSTANT DATA (SEC)

Three Phase Short Circuit Ta3

Line to Line Short Circuit Ta2

Line to Neutral Short Circuit Ta1

NOTE: If requested information is not applicable, indicate by marking "N / A."


2

Attachment A (page 2) To Appendix 1

Interconnection Request

MW CAPABILITY AND PLANT CONFIGURATION LARGE GENERATING FACILITY DATA

ARMATURE WINDING RESISTANCE DATA (PER UNIT) Positive R1

Negative R2

Zero R0

Rotor Short Time Thermal Capacity I 2t =

Field Current at Rated kVA, Armature Voltage and PF = amps

Field Current at Rated kVA and Armature Voltage, 0 PF = amps

Three Phase Armature Winding Capacitance = microfarad

Field Winding Resistance = ohms °C

Armature Winding Resistance (Per Phase) = ohms °C

CURVES

Provide Saturation, Vee, Reactive Capability, Capacity Temperature Correction curves. Designate normal and emergency Hydrogen Pressure operating range for multiple curves.




GENERATOR STEP-UP TRANSFORMER DATA

RATINGS Capacity Self-cooled/maximum nameplate / kVA Voltage Ratio Generator side/System side / kV Winding Connections Low V/High V (Delta or Wye) /

Fixed Taps Available

Present Tap Setting

IMPEDANCE Positive Z1 (on self-cooled kVA rating) % X/R

Zero Z0 (on self-cooled kVA rating) % X/R


EXCITATION SYSTEM DATA



Identify appropriate IEEE model block diagram of excitation system and power system stabilizer (PSS) for computer representation in power system stability simulations and the corresponding excitation system and PSS constants for use in the model.

GOVERNOR SYSTEM DATA Identify appropriate IEEE model block diagram of governor system for computer representation in power system stability simulations and the corresponding governor system constants for use in the model.

WIND GENERATORS Number of generators to be interconnected pursuant to this Interconnection Request:

Elevation: Single Phase Three Phase

Inverter manufacturer, model name, number, and version:

List of adjustable setpoints for the protective equipment or software:

Note: A completed Siemens PTI PSS®E data sheet for a standard PSS®E wind model must be supplied with the Interconnection Request. If other data sheets are more appropriate to the proposed device then they shall be provided and discussed at Scoping Meeting.


2



INDUCTION GENERATORS:

Field Volts: Field Amperes: Motoring Power (kW): Neutral Grounding Resistor (If Applicable): I 2t or K (Heating Time Constant): Rotor Resistance: Stator Resistance: Stator Reactance: Rotor Reactance: Magnetizing Reactance: Short Circuit Reactance: Exciting Current: Temperature Rise: Frame Size: Design Letter: Reactive Power Required In VARs (No Load): Reactive Power Required In VARs (Full Load): Total Rotating Inertia, H: Per Unit on kVA Base


APPENDIX 2 to LGIP

INTERCONNECTION FEASIBILITY STUDY AGREEMENT

BETWEEN

TENNESSEE VALLEY AUTHORITY

AND

[ ]

THIS AGREEMENT, made and entered into as of the day of , , by and between Tennessee Valley Authority ("TVA"), a corporation created by and existing under and by virtue of the Tennessee Valley Authority Act of 1933, as amended, and [ ], a organized under the laws of the State of (“Interconnection Customer”). TVA and Interconnection Customer are also hereinafter sometimes referred to individually as "Party" and collectively as "Parties." Capitalized terms used in this Agreement that are not defined herein shall have the meaning specified in TVA’s currently-effective Standard Large Generator Interconnection Procedures (“LGIP”).

RECITALS

WHEREAS, Interconnection Customer is proposing to develop a Large Generating Facility or generating capacity addition to an existing Generating Facility consistent with the Interconnection Request dated ; and

WHEREAS, Interconnection Customer desires to interconnect the Large Generating Facility with the TVA Transmission System; and

WHEREAS, Interconnection Customer has requested that TVA perform an Interconnection Feasibility Study (“Study”) to assess the feasibility of interconnecting the proposed Large Generating Facility to the TVA Transmission System, and of any Affected Systems;

NOW, THEREFORE, the Parties agree as follows:

1. Interconnection Customer elects and TVA shall cause to be performed a Study consistent with Section 6.0 of the LGIP.


2. The scope of the Study shall be subject to the assumptions set forth in Attachment A to this Agreement. THE STUDY SHALL EVALUATE ONLY THE IMPACTS OF INTERCONNECTING THE FACILITY TO THE TVA TRANSMISSION SYSTEM AND SHALL NOT ADDRESS THE ABILITY OF THE TVA TRANSMISSION SYSTEM TO TRANSFER POWER OR ENERGY FROM THE FACILITY TO ANY SPECIFIC LOAD EITHER ON THE TVA SYSTEM OR OFF SYSTEM. Any transmission service request must be submitted to TVA separately. The procedures and deadlines in TVA’s Transmission Service Guidelines (“Guidelines”) shall govern processing requests for transmission service. If the entity purchasing or selling the Facility electrical output requests firm transmission service, TVA will perform a transmission system impact study as provided under the Guidelines in order to determine the capability of the transmission system to deliver power from the Facility to the identified loads. The entity purchasing or selling the Facility electrical output shall arrange for and be solely responsible for any necessary transmission of the Facility electrical output to third parties, in accordance with the Guidelines.

3. The Study shall be based on the technical information provided by

Interconnection Customer in the Interconnection Request, as may be modified as the result of the Scoping Meeting. TVA reserves the right to request additional technical information from Interconnection Customer as may reasonably become necessary consistent with Good Utility Practice during the course of the Study and as designated in accordance with Section 3.2.4 of the LGIP. If, after the designation of the Point of Interconnection pursuant to Section 3.2.4 of the LGIP, Interconnection Customer modifies its Interconnection Request pursuant to Section 4.4 of the LGIP, the time to complete the Study may be extended.

4. The Study report shall provide the following information:

– preliminary identification of any circuit breaker short circuit capability limits exceeded as a result of the interconnection;

– preliminary identification of any thermal overload or voltage limit violations resulting from the interconnection; and

– preliminary description and non-bonding estimated cost of facilities required to interconnect the Large Generating Facility to the TVA


Transmission System and to address the identified short circuit and power flow issues.

5. Due to limitations on TVA’s borrowing authority under the TVA Act,

customers intending to interconnect to TVA’s transmission system must remit to TVA the full amount equal to TVA’s good faith estimate of the cost for performing the Study (hereinafter the “Upfront Payment”) before TVA will initiate the Study. TVA estimates that the cost of this Study is $ . Concurrent with its execution of this Agreement, Interconnection Customer shall remit to TVA by electronic transfer the Upfront Payment, which shall be applied (as specified in Section 6) to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study. The Upfront Payment shall be made via the Automated Clearing House (ACH) to the following account:

Cash Link-ACH Receiver 401 14th Street, S.W. Washington, D.C. 20227 Routing Transit No. 051036706 Account No. 349000, for the credit of

Tennessee Valley Authority Contact (865) 632-8125 with any questions

6. Interconnection Customer shall reimburse TVA for its actual costs, including applicable overheads, incurred in performing the Study. As a part of Interconnection Customer’s request for interconnection, Interconnection Customer submitted to TVA a deposit of $10,000 (the “Deposit”). The Deposit, if not applied previously to another study, shall be applied to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study exceed the total of any available balance of the Deposit and the Upfront Payment, TVA shall, as soon as practicable after completion of the Study, submit to Interconnection Customer a written invoice for the excess amount. Such invoice shall be due and payable thirty (30) Calendar Days after the date of the invoice. If the due date falls on a non-business day, then the payment shall be due on the next following Business Day. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study are less than the total of the Deposit and the


Upfront Payment, TVA shall refund the difference to Interconnection Customer. Any payments due under this Section 6 shall be made by electronic transfer to an appropriate account designated by the Party to whom the payment is owed.

If Interconnection Customer fails to pay the amount of TVA’s invoice when due, then Interconnection Customer shall pay interest, calculated in accordance with the methodology specified for interest on refunds in FERC's regulations at 18 CFR § 35.19a(a)(2)(iii), on the amount that is not paid from the date that such amount is due through the date on which TVA receives payment. TVA shall submit an invoice to Interconnection Customer for such added charge, which shall be due and payable upon receipt.

In case any portion of any invoice is the subject of a bona fide dispute, the undisputed amount shall be payable when due as described above. The disputed amount subsequently determined to be owed shall be paid promptly after such determination, with interest at the rate specified above from the date such amount would have been due in the absence of any dispute.

Invoices shall be mailed by TVA to Interconnection Customer at the address indicated below:

7. If, while performing the Study, TVA identifies any potential impacts on the system of either a distributor of TVA power or a directly-served customer of TVA (“TVA Customer”), TVA shall notify both the TVA Customer and Interconnection Customer that TVA has determined that the Facility has the potential to impact the TVA Customer’s system. The Parties recognize that the TVA Customer may be required to perform a system impact study to determine the impacts of the Facility on the TVA Customer’s system. In such case, TVA shall enter into a separate letter agreement with the TVA Customer which letter agreement shall include, among other things, provisions governing the TVA Customer’s invoicing TVA for the cost of performing the system impact study and TVA’s


release of confidential information to the TVA Customer. Interconnection Customer shall reimburse TVA for all payments made by TVA to the TVA Customer as compensation for the costs incurred by the TVA Customer in performing the system impact study. The provisions of Section 6 shall apply to invoices issued by TVA under this Section 7.

8. If, while performing the Study, TVA identifies any potential impacts on

the system of a neighboring utility other than a TVA Customer, TVA shall notify both said neighboring utility and Interconnection Customer that TVA has determined that the Facility has the potential to impact the system of said neighboring utility. Interconnection Customer and said neighboring utility shall enter into the contractual arrangements that said neighboring utility deems necessary for said neighboring utility to perform its own system impact study to determine the impacts of the Facility on its system.

9. The Parties agree that any data provided pursuant to this Agreement

and designated confidential by the providing Party shall be kept confidential, to the extent permitted by law, and that neither Party shall disclose such designated data, except as required by law; provided, however, that either Party may disclose such confidential designated data in any manner consistent with a written consent to such disclosure obtained from the providing Party prior to such disclosure or as provided below. Such consent shall not be unreasonably withheld. Notwithstanding the foregoing, TVA may disclose such confidential designated data on a strict need-to-know basis to third party(s) assisting TVA in performing the Study or to TVA Customer(s) as provided for in Section 7, provided, that said third party(s) and TVA Customer(s) have agreed to keep the designated data confidential. The Parties hereby consider this Agreement confidential and agree that, to the extent permitted by law, it shall also be kept confidential in accordance with this Section 9.

Data or information shall not be deemed confidential information where:

(a) it becomes public information or is otherwise generally available to the public through no action or fault of the receiving Party;

(b) it is already in the receiving Party’s possession prior to the effective date of this Agreement and was not received directly or


indirectly from the providing Party;

(c) it is lawfully received by the receiving Party from a person who did not receive the same information directly or indirectly from the providing Party; or

(d) it is at any time independently developed by employees or consultants of the receiving Party who have not had access to the confidential information in the possession of the receiving Party.

In the event that one Party is required by a State or Federal regulatory authority or court to disclose data previously provided in connection with the Study by the other Party under a confidentiality designation, the Party subject to such requirement shall exercise reasonable efforts to obtain a confidentiality agreement with or appropriate protective order from such State or Federal authority or court, as applicable, to preserve the confidentiality of the designated data to be disclosed. Further, upon receipt of such a demand for the data, the receiving Party shall promptly notify the other Party.

The Parties agree that monetary damages would be inadequate to compensate a Party for the other Party’s Breach of its obligations under this Section 9. Each Party accordingly agrees that the other Party shall be entitled to equitable relief, by way of injunction or otherwise, if the first Party Breaches or threatens to Breach its obligations under this Section 9, which equitable relief shall be granted without bond or proof of damages, and the receiving Party shall not plead in defense that there would be an adequate remedy at law. Such remedy shall not be deemed an exclusive remedy for the Breach of this Section 9, but shall be in addition to all other remedies available at law or in equity. The Parties further acknowledge and agree that the covenants contained herein are necessary for the protection of legitimate business interests and are reasonable in scope. No Party, however, shall be liable for direct, indirect, incidental, consequential, or punitive damages of any nature or kind resulting from or arising in connection with this Section 9 other than the recovery of all gains wrongfully acquired from unauthorized disclosure of any Confidential Information.

Notwithstanding the provisions of this Section 9, if TVA determines that transmission line siting is needed as result of the interconnection of the Facility to the TVA transmission system, Interconnection Customer


authorizes TVA to publicly release any information about the Facility required for any transmission line siting studies to be performed by TVA.

10. This Agreement may be amended only by a written instrument executed

by both Parties.

11. This Agreement may be executed in several counterparts, each of which shall be considered an original and all of which shall constitute but one and the same instrument.

12. This Agreement shall not be assigned without the prior written consent

of the other Party.

13. This Agreement shall be governed by Federal law.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed by their respective duly authorized representatives.

[ ]

By: Name: Title:


By: Vice President

Transmission Operations & Power Supply


Attachment A to Appendix 2

Interconnection Feasibility Study Agreement

ASSUMPTIONS USED IN CONDUCTING THE INTERCONNECTION FEASIBILITY STUDY

The Interconnection Feasibility Study shall be based upon the information set forth in the Interconnection Request and agreed upon in the Scoping Meeting held on :

Designation of Point of Interconnection and configuration to be studied.

Designation of alternative Point(s) of Interconnection and configuration.

[Above assumptions to be completed by Interconnection Customer and other assumptions to be provided by Interconnection Customer and TVA]


APPENDIX 3 TO LGIP

INTERCONNECTION SYSTEM IMPACT STUDY AGREEMENT

BETWEEN TENNESSEE VALLEY AUTHORITY

AND

[ ]

THIS AGREEMENT, made and entered into as of the day of , , by and between Tennessee Valley Authority

("TVA"), a corporation created by and existing under and by virtue of the Tennessee Valley Authority Act of 1933, as amended, and [ ], a

organized under the laws of the State of (“Interconnection Customer”). TVA and Interconnection Customer are also hereinafter sometimes referred to individually as "Party" and collectively as "Parties." Capitalized terms used in this Agreement that are not defined herein shall have the meaning specified in TVA’s currently-effective Standard Large Generator Interconnection Procedures (“LGIP”).

RECITALS

WHEREAS, Interconnection Customer is proposing to develop a -

MW Large Generating Facility to be located in , (“Facility”); and

WHEREAS, the Facility is to be located near TVA’s ; and

WHEREAS, Interconnection Customer is currently proposing to establish a -kV interconnection with the TVA transmission system at TVA’s in order to transmit power and energy from the Facility; and

WHEREAS, TVA has determined that an Interconnection System Impact

Study (“Study”) needs to be performed to determine the impact of the interconnection of the Facility to the TVA transmission system;



1. TVA shall perform a Study to identify those impacts that interconnection

of the Facility could reasonably be anticipated to have on the operation and reliability of the TVA transmission system. The Study shall include load flow studies to identify thermal overloads and reactive problems, fault analysis to identify equipment overstressed due to increased fault levels, and transient stability studies to determine if the transmission system can absorb the Facility electrical output. The report summarizing the Study results shall identify any system constraints and the need for any modifications to TVA’s transmission system (including Interconnection Facilities and Network Upgrades) that are required to connect the Facility to the TVA system. Said report shall also include preliminary cost estimates for any such modifications identified by the Study. The Study shall use good utility practice, engineering, and operating principles, and standards, guidelines, and criteria of TVA, the SERC Reliability Corporation, and the North American Electric Reliability Council. The Study shall be performed utilizing the information specified in Interconnection Customer’s request for interconnection dated . Within the framework of the scope of the Study that has been agreed upon as discussed above, TVA shall use its sole discretion as to the details and methods used to perform the Study, including the use by TVA of third party(s) to assist TVA in performing the Study. The Study shall include all transmission system additions and/or modifications, if any, that TVA plans to install whether or not Interconnection Customer constructs the Facility. The Study shall be performed jointly with other utilities where appropriate.

2. In performing the Study, TVA shall rely on existing transmission planning studies to the extent reasonably practicable. Interconnection Customer shall not be assessed a charge for such existing studies; however, Interconnection Customer shall be fully responsible for charges associated with any modifications to existing planning studies that are reasonably necessary to evaluate the impact of the Facility on the TVA transmission system. The Study shall be performed to assess the adequacy of TVA system facilities, not Interconnection Customer’s facilities. TVA shall proceed with the Study based on the technical information contained in the request for interconnection referenced in Section 1 of this Agreement. If additional information is required by TVA to perform the Study, TVA shall request the information and


Interconnection Customer shall provide it as soon as reasonably possible. If Interconnection Customer materially modifies data or other information previously provided by Interconnection Customer to TVA for the Study, which modifications will significantly prolong the time or increase the effort required by TVA to perform any ongoing or pending system impact study of a third party, TVA may, upon seven (7) Business Days’ prior written notice, terminate this Agreement and TVA shall consider the request for interconnection to be withdrawn; provided, however, Interconnection Customer shall reimburse TVA, in accordance with the provisions of Section 6, for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study through the date of termination. During such 7-Business-Day notice period, Interconnection Customer may elect to refashion such modifications in a manner that will avoid such time and effort impacts to TVA’s satisfaction, or Interconnection Customer may retract such modifications; in either such event TVA’s termination notice shall be deemed withdrawn. Any modifications suggested by TVA or requested as a result of analysis performed by TVA as part of the Study or otherwise shall not trigger TVA’s termination rights under this Section 2. Any termination and withdrawal under this Section 2 shall not affect Interconnection Customer’s ability to submit a new request for interconnection using the materially modified data or other information. Any such new request shall be treated in all respects as a new request, however, including assignment of a new interconnection priority based on the date of the new request.

3. TVA shall use due diligence to complete the Study by , but due to the complexity of the Study, TVA provides no guarantee that the Study can be completed within this time period. In the event TVA is unable to complete the Study within such time period, it shall so notify Interconnection Customer and provide an estimated completion date along with an explanation of the reasons why additional time is required to complete the Study. Upon completion of the Study, TVA shall provide a report summarizing the Study results to Interconnection Customer.

4. THE STUDY SHALL EVALUATE ONLY THE IMPACTS OF INTERCONNECTING THE FACILITY TO THE TVA TRANSMISSION SYSTEM AND SHALL NOT ADDRESS THE ABILITY OF THE TVA TRANSMISSION SYSTEM TO TRANSFER POWER OR ENERGY


FROM THE FACILITY TO ANY SPECIFIC LOAD EITHER ON THE TVA SYSTEM OR OFF SYSTEM. Any transmission service request must be submitted to TVA separately. The procedures and deadlines in TVA’s Transmission Service Guidelines (“Guidelines”) shall govern processing requests for transmission service. If the entity purchasing or selling the Facility electrical output requests firm transmission service, TVA will perform a transmission system impact study as provided under the Guidelines in order to determine the capability of the transmission system to deliver power from the Facility to the identified loads. The entity purchasing or selling the Facility electrical output shall arrange for and be solely responsible for any necessary transmission of the Facility electrical output to third parties, in accordance with the Guidelines.

5. Due to limitations on TVA’s borrowing authority under the TVA Act, customers intending to interconnect to TVA’s transmission system must remit to TVA the full amount equal to TVA’s good faith estimate of the cost for performing the Study (hereinafter the “Upfront Payment”) before TVA will initiate the Study. TVA estimates that the cost of this Study is $ . Concurrent with its execution of this Agreement, Interconnection Customer shall remit to TVA by electronic transfer the Upfront Payment, which shall be applied (as specified in Section 6) to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study. The Upfront Payment shall be made via the Automated Clearing House (ACH) to the following account:

Cash Link-ACH Receiver 401 14th Street, S.W. Washington, D.C. 20227 Routing Transit No. 051036706 Account No. 349000, for the credit of Tennessee Valley Authority Contact (865) 632-8125 with any questions

6. Interconnection Customer shall reimburse TVA for its actual costs,

including applicable overheads, incurred in performing the Study. As a part of Interconnection Customer’s request for interconnection, Interconnection Customer submitted to TVA a deposit of $10,000 (the “Deposit”). The Deposit, if not applied previously to another study, shall be applied to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in


performing the Study. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study exceed the total of any available balance of the Deposit and the Upfront Payment, TVA shall, as soon as practicable after completion of the Study, submit to Interconnection Customer a written invoice for the excess amount. Such invoice shall be due and payable thirty (30) Calendar Days after the date of the invoice. If the due date falls on a non-business day, then the payment shall be due on the next following Business Day. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study are less than the total of the Deposit and the Upfront Payment, TVA shall refund the difference to Interconnection Customer. Any payments due under this Section 6 shall be made by electronic transfer to an appropriate account designated by the Party to whom the payment is owed. If Interconnection Customer fails to pay the amount of TVA’s invoice when due, then Interconnection Customer shall pay interest, calculated in accordance with the methodology specified for interest on refunds in FERC's regulations at 18 CFR § 35.19a(a)(2)(iii), on the amount that is not paid from the date that such amount is due through the date on which TVA receives payment. TVA shall submit an invoice to Interconnection Customer for such added charge, which shall be due and payable upon receipt. In case any portion of any invoice is the subject of a bona fide dispute, the undisputed amount shall be payable when due as described above. The disputed amount subsequently determined to be owed shall be paid promptly after such determination, with interest at the rate specified above from the date such amount would have been due in the absence of any dispute. Invoices shall be mailed by TVA to Interconnection Customer at the address indicated below:

___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________


7. If, while performing the Study, TVA identifies any potential impacts on the system of either a distributor of TVA power or a directly-served customer of TVA (“TVA Customer”), TVA shall notify both the TVA Customer and Interconnection Customer that TVA has determined that the Facility has the potential to impact the TVA Customer’s system. The Parties recognize that the TVA Customer may be required to perform a system impact study to determine the impacts of the Facility on the TVA Customer’s system. In such case, TVA shall enter into a separate letter agreement with the TVA Customer which letter agreement shall include, among other things, provisions governing the TVA Customer’s invoicing TVA for the cost of performing the system impact study and TVA’s release of confidential information to the TVA Customer. Interconnection Customer shall reimburse TVA for all payments made by TVA to the TVA Customer as compensation for the costs incurred by the TVA Customer in performing the system impact study. The provisions of Section 6 shall apply to invoices issued by TVA under this Section 7.

8. If, while performing the Study, TVA identifies any potential impacts on the system of a neighboring utility other than a TVA Customer, TVA shall notify both said neighboring utility and Interconnection Customer that TVA has determined that the Facility has the potential to impact the system of said neighboring utility. Interconnection Customer and said neighboring utility shall enter into the contractual arrangements that said neighboring utility deems necessary for said neighboring utility to perform its own system impact study to determine the impacts of the Facility on its system.

9. The Parties agree that any data provided pursuant to this Agreement and designated confidential by the providing Party shall be kept confidential, to the extent permitted by law, and that neither Party shall disclose such designated data, except as required by law; provided, however, that either Party may disclose such confidential designated data in any manner consistent with a written consent to such disclosure obtained from the providing Party prior to such disclosure or as provided below. Such consent shall not be unreasonably withheld. Notwithstanding the foregoing, TVA may disclose such confidential designated data on a strict need-to-know basis to third party(s) assisting TVA in performing the Study or to TVA Customer(s) as provided for in Section 7, provided, that said third party(s) and TVA Customer(s) have agreed to keep the designated data confidential. The Parties hereby consider this Agreement confidential and agree that, to the extent


permitted by law, it shall also be kept confidential in accordance with this Section 9. Data or information shall not be deemed confidential information where:

(a) it becomes public information or is otherwise generally available to the public through no action or fault of the receiving Party; (b) it is already in the receiving Party’s possession prior to the effective date of this Agreement and was not received directly or indirectly from the providing Party; (c) it is lawfully received by the receiving Party from a person who did not receive the same information directly or indirectly from the providing Party; or (d) it is at any time independently developed by employees or consultants of the receiving Party who have not had access to the confidential information in the possession of the receiving Party.

In the event that one Party is required by a State or Federal regulatory authority or court to disclose data previously provided in connection with the Study by the other Party under a confidentiality designation, the Party subject to such requirement shall exercise reasonable efforts to obtain a confidentiality agreement with or appropriate protective order from such State or Federal authority or court, as applicable, to preserve the confidentiality of the designated data to be disclosed. Further, upon receipt of such a demand for the data, the receiving Party shall promptly notify the other Party. The Parties agree that monetary damages would be inadequate to compensate a Party for the other Party’s Breach of its obligations under this Section 9. Each Party accordingly agrees that the other Party shall be entitled to equitable relief, by way of injunction or otherwise, if the first Party Breaches or threatens to Breach its obligations under this Section 9, which equitable relief shall be granted without bond or proof of damages, and the receiving Party shall not plead in defense that there would be an adequate remedy at law. Such remedy shall not be deemed an exclusive remedy for the Breach of this Section 9, but shall be in addition to all other remedies available


at law or in equity. The Parties further acknowledge and agree that the covenants contained herein are necessary for the protection of legitimate business interests and are reasonable in scope. No Party, however, shall be liable for direct, indirect, incidental, consequential, or punitive damages of any nature or kind resulting from or arising in connection with this Section 9 other than the recovery of all gains wrongfully acquired from unauthorized disclosure of any Confidential Information. Notwithstanding the provisions of this Section 9, if TVA determines that transmission line siting is needed as result of the interconnection of the Facility to the TVA transmission system, Interconnection Customer authorizes TVA to publicly release any information about the Facility required for any transmission line siting studies to be performed by TVA.

10. This Agreement may be amended only by a written instrument executed by both Parties.


12. This Agreement shall not be assigned without the prior written consent of the other Party.



[ ]

By: Name: Title:



By: Vice President



APPENDIX 4 TO LGIP

INTERCONNECTION FACILITIES STUDY AGREEMENT

BETWEEN


AND

[ ]


RECITALS

WHEREAS, Interconnection Customer is proposing to develop a -MW

generating facility to be located in , (“Facility”); and

WHEREAS, the Facility is to be located near TVA’s

; and WHEREAS, Interconnection Customer is currently proposing to establish a

-kV interconnection with the TVA transmission system at TVA’s in order to transmit power and energy from the Facility; and

WHEREAS, TVA has completed an Interconnection System Impact Study to determine the impact of the interconnection of the Facility to the TVA transmission system; and


WHEREAS, TVA’s interconnection process requires that TVA perform an Interconnection Facilities Study (“Study”) in conjunction with the interconnection of the Facility to the TVA transmission system;

NOW, THEREFORE, the Parties agree as follows: 1. In accordance with Interconnection Customer’s interconnection request,

TVA shall perform, at Interconnection Customer’s expense, a detailed Study, which Study shall include a Project Scoping Workshop (“Workshop”) and, if necessary, transmission line siting studies. The Study to be performed by TVA is an engineering study that includes, among other things, a cost estimate for the modifications needed to interconnect the Facility with the TVA transmission system and an estimated scheduled completion date by which TVA anticipates completing the design, construction, installation, inspection, and testing of said modifications. As a part of the Study, TVA shall perform a site inspection prior to the Workshop. Upon TVA’s request, Interconnection Customer shall ensure that qualified personnel from Interconnection Customer or its contractors accompany TVA on the site inspection. Interconnection Customer shall provide free access to its property to TVA and its agents to the extent necessary for TVA to complete the site inspection. TVA may, in its sole discretion, use third party(s) to assist TVA in performing the Study. The Study shall be performed jointly with other utilities where appropriate.

2. THE STUDY SHALL EVALUATE ONLY THE IMPACTS OF INTERCONNECTING THE FACILITY TO THE TVA TRANSMISSION SYSTEM AND SHALL NOT ADDRESS THE ABILITY OF THE TVA TRANSMISSION SYSTEM TO TRANSFER POWER OR ENERGY FROM THE FACILITY TO ANY SPECIFIC LOAD EITHER ON THE TVA SYSTEM OR OFF SYSTEM. Any transmission service request must be submitted to TVA separately. The procedures and deadlines in TVA’s Transmission Service Guidelines (“Guidelines”) shall govern processing requests for transmission service. If the entity purchasing or selling the Facility electrical output requests firm transmission service, TVA will perform a transmission system impact study as provided under the Guidelines in order to determine the capability of the transmission system to deliver power from the Facility to the identified loads. The entity purchasing or selling the Facility electrical output shall arrange for and be solely responsible for any necessary transmission of the Facility electrical output to third parties, in accordance with the Guidelines.


3. An integral part of performing the Study is the Workshop. The Workshop is a joint effort between the Parties to develop a detailed scope of the work activities required for the interconnection of the Facility to the TVA transmission system, including, but not limited to, preliminary design specifications, construction schedules, and cost estimates. After consultation with Interconnection Customer, TVA shall notify Interconnection Customer of the date, time, and location of the Workshop. A checklist of activities to be completed in preparation for and during the Workshop is attached hereto as Exhibit A. To ensure the successful completion of the Workshop, it is necessary that qualified personnel from Interconnection Customer or its contractors attend the Workshop and bring to the Workshop any information, including but not limited to drawings, diagrams, and equipment specifications necessary to complete the activities referred to on Exhibit A. Such qualified personnel attending the Workshop shall have the necessary power and authority to make decisions and commitments on behalf of Interconnection Customer that are integral to satisfactorily completing the Workshop. If TVA, in its sole reasonable judgment, determines that Interconnection Customer has failed to provide the information and qualified personnel required for the Workshop as provided for under this Section 3, TVA may, upon seven (7) Business Days’ prior written notice, terminate this Agreement and Interconnection Customer’s request for interconnection shall be considered by TVA to be withdrawn; provided, however, Interconnection Customer shall reimburse TVA, in accordance with the provisions of Section 6, for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study through the date of termination. Any termination under this Section 3 shall not affect Interconnection Customer’s ability to submit a new request for interconnection. Any such new request shall be treated in all respects as a new request, however, including assignment of a new interconnection priority based on the date of the new request.

4. Following the completion of the Study, TVA shall prepare and send to Interconnection Customer a Project Scoping Package (“Package”), which constitutes the completion of the Study. The contents of a standard Package are attached hereto as Exhibit B. The Parties recognize that any costs and construction schedules provided by TVA in the Package are estimates only, and such estimates shall not be binding on TVA. TVA shall use due diligence to complete the Study by , but due to the complexity of the Study, TVA provides no guarantee that the Study can be completed within this time period. In the event TVA is unable to complete the Study within such time period, it shall so notify Interconnection Customer and provide an estimated completion date


along with an explanation of the reasons why additional time is required to complete the Study.

5. Due to limitations on TVA’s borrowing authority under the TVA Act, customers intending to interconnect to TVA’s transmission system must remit to TVA the full amount equal to TVA’s good faith estimate of the cost for performing the Study (hereinafter the “Upfront Payment”) before TVA will initiate the Study. TVA estimates that the cost of this Study is $ . Concurrent with its execution of this Agreement, Interconnection Customer shall remit to TVA by electronic transfer the Upfront Payment, which shall be applied (as specified in Section 6) to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study. The Upfront Payment shall be made via the Automated Clearing House (“ACH”) to the following account:

Cash Link-ACH Receiver 401 14th Street, S.W. Washington, D.C. 20227 Routing Transit No. 051036706 Account No. 349000, for the credit of Tennessee Valley Authority Contact (865) 632-8125 with any questions

6. Interconnection Customer shall reimburse TVA for its actual costs, including applicable overheads, incurred in performing the Study. As a part of Interconnection Customer’s request for interconnection, Interconnection Customer submitted to TVA a deposit of $10,000 (the “Deposit”). The Deposit, if not applied previously to another study, shall be applied to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study exceed the total of any available balance of the Deposit and the Upfront Payment, TVA shall, as soon as practicable after completion of the Study, submit to Interconnection Customer a written invoice for the excess amount. Such invoice shall be due and payable thirty (30) Calendar Days after the date of the invoice. If the due date falls on a non-business day, then the payment shall be due on the next following Business Day. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study are less than the total of the Deposit and the


Upfront Payment, TVA shall refund the difference to Interconnection Customer. Any payments due under this Section 6 shall be made by electronic transfer to an appropriate account designated by the Party to whom the payment is owed. If Interconnection Customer fails to pay the amount of TVA’s invoice when due, then Interconnection Customer shall pay interest, calculated in accordance with the methodology specified for interest on refunds in FERC's regulations at 18 CFR § 35.19a(a)(2)(iii), on the amount that is not paid from the date that such amount is due through the date on which TVA receives payment. TVA shall submit an invoice to Interconnection Customer for such added charge, which shall be due and payable upon receipt. In case any portion of any invoice is the subject of a bona fide dispute, the undisputed amount shall be payable when due as described above. The disputed amount subsequently determined to be owed shall be paid promptly after such determination, with interest at the rate specified above from the date such amount would have been due in the absence of any dispute. Invoices shall be mailed by TVA to Interconnection Customer at the address indicated below:

___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

7. The Parties recognize that a distributor of TVA power or a directly- served customer of TVA (“TVA Customer”) may be required to perform a facilities study as a result of the interconnection of the Facility to the TVA transmission system. In such case, TVA shall enter into a separate letter agreement with the TVA Customer which letter agreement shall include, among other things, provisions governing the TVA Customer’s invoicing TVA for the cost of performing the facilities study and TVA’s release of confidential information to the TVA Customer. Interconnection Customer shall reimburse TVA for all payments made by TVA to the TVA Customer as compensation for the costs incurred by the TVA Customer in performing the facilities study. The provisions of Section 6 shall apply to invoices issued by TVA under this Section 7.


8. If the system of a neighboring utility other than a TVA Customer is

affected by the interconnection of the Facility to the TVA transmission system, Interconnection Customer and said neighboring utility shall enter into the contractual arrangements that said neighboring utility deems necessary for said neighboring utility to perform its own facilities study.

9. The Parties agree that any data provided pursuant to this Agreement and designated confidential by the providing Party shall be kept confidential, to the extent permitted by law, and that neither Party shall disclose such designated data, except as required by law; provided, however, that either Party may disclose such confidential designated data in any manner consistent with a written consent to such disclosure obtained from the providing Party prior to such disclosure or as provided below. Such consent shall not be unreasonably withheld. Notwithstanding the foregoing, TVA may disclose such confidential designated data on a strict need-to-know basis to third party(s) assisting TVA in performing the Study or to TVA Customer(s) as provided for in Section 7, provided, that said third party(s) and TVA Customer(s) have agreed to keep the designated data confidential. The Parties hereby consider this Agreement confidential and agree that, to the extent permitted by law, it shall also be kept confidential in accordance with this Section 9. Data or information shall not be deemed confidential information where:

(a) it becomes public information or is otherwise generally available to the public through no action or fault of the receiving Party; (b) it is already in the receiving Party’s possession prior to the effective date of this Agreement and was not received directly or indirectly from the providing Party; (c) it is lawfully received by the receiving Party from a person who did not receive the same information directly or indirectly from the providing Party; or (d) it is at any time independently developed by employees or consultants of the receiving Party who have not had access to the confidential information in the possession of the receiving Party.

In the event that one Party is required by a State or Federal regulatory authority or court to disclose data previously provided in connection with


the Study by the other Party under a confidentiality designation, the Party subject to such requirement shall exercise reasonable efforts to obtain a confidentiality agreement with or appropriate protective order from such State or Federal authority or court, as applicable, to preserve the confidentiality of the designated data to be disclosed. Further, upon receipt of such a demand for the data, the receiving Party shall promptly notify the other Party. The Parties agree that monetary damages would be inadequate to compensate a Party for the other Party’s Breach of its obligations under this Section 9. Each Party accordingly agrees that the other Party shall be entitled to equitable relief, by way of injunction or otherwise, if the first Party Breaches or threatens to Breach its obligations under this Section 9, which equitable relief shall be granted without bond or proof of damages, and the receiving Party shall not plead in defense that there would be an adequate remedy at law. Such remedy shall not be deemed an exclusive remedy for the Breach of this Section 9, but shall be in addition to all other remedies available at law or in equity. The Parties further acknowledge and agree that the covenants contained herein are necessary for the protection of legitimate business interests and are reasonable in scope. No Party, however, shall be liable for direct, indirect, incidental, consequential, or punitive damages of any nature or kind resulting from or arising in connection with this Section 9 other than the recovery of all gains wrongfully acquired from unauthorized disclosure of any Confidential Information. Notwithstanding the provisions of this Section 9, if TVA determines that transmission line siting is needed as result of the interconnection of the Facility to the TVA transmission system, Interconnection Customer authorizes TVA to publicly release any information about the Facility required for any transmission line siting studies to be performed by TVA.

10. This Agreement may be amended only by a written instrument executed by both Parties.


12. This Agreement shall not be assigned without the prior written consent of the other Party.




[ ]

By: Name: Title:


By: Vice President



APPENDIX 5 to LGIP OPTIONAL INTERCONNECTION STUDY AGREEMENT

BETWEEN


AND

[ ]


RECITALS

WHEREAS, Interconnection Customer is proposing to develop a Large Generating Facility or generating capacity addition to an existing Generating Facility consistent with the Interconnection Request dated ; and

WHEREAS, Interconnection Customer desires to interconnect the Large Generating Facility with the TVA Transmission System; and

WHEREAS, on or after the date when Interconnection Customer receives the Interconnection System Impact Study results, Interconnection Customer has further requested that TVA prepare an Optional Interconnection Study (“Study”);


1. Interconnection Customer elects and TVA shall cause to be performed a Study consistent with Section 10.0 of the LGIP.

2. The scope of the Study shall be subject to the assumptions set forth in

Attachment A to this Agreement.


3. The Study shall be performed solely for informational purposes. THE STUDY SHALL EVALUATE ONLY THE IMPACTS OF INTERCONNECTING THE FACILITY TO THE TVA TRANSMISSION SYSTEM AND SHALL NOT ADDRESS THE ABILITY OF THE TVA TRANSMISSION SYSTEM TO TRANSFER POWER OR ENERGY FROM THE FACILITY TO ANY SPECIFIC LOAD EITHER ON THE TVA SYSTEM OR OFF SYSTEM. Any transmission service request must be submitted to TVA separately. The procedures and deadlines in TVA’s Transmission Service Guidelines (“Guidelines”) shall govern processing requests for transmission service. If the entity purchasing or selling the Facility electrical output requests firm transmission service, TVA will perform a transmission system impact study as provided under the Guidelines in order to determine the capability of the transmission system to deliver power from the Facility to the identified loads. The entity purchasing or selling the Facility electrical output shall arrange for and be solely responsible for any necessary transmission of the Facility electrical output to third parties, in accordance with the Guidelines.

4. The Study report shall provide a sensitivity analysis based on the

assumptions specified by Interconnection Customer in Attachment A to this Agreement. The Study shall identify TVA's Interconnection Facilities and the Network Upgrades, and the estimated cost thereof, that may be required to provide interconnection service based upon the assumptions specified by Interconnection Customer in Attachment A.

5. Due to limitations on TVA’s borrowing authority under the TVA Act,

customers intending to interconnect to TVA’s transmission system must remit to TVA the full amount equal to TVA’s good faith estimate of the cost for performing the Study (hereinafter the “Upfront Payment”) before TVA will initiate the Study. TVA estimates that the cost of this Study is $ . Concurrent with its execution of this Agreement, Interconnection Customer shall remit to TVA by electronic transfer the Upfront Payment, which shall be applied (as specified in Section 6) to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study. The Upfront Payment shall be made via the Automated Clearing House (ACH) to the following account:

Cash Link-ACH Receiver 401 14th Street, S.W.


Washington, D.C. 20227 Routing Transit No. 051036706 Account No. 349000, for the credit of

Tennessee Valley Authority Contact (865) 632-8125 with any questions

6. Interconnection Customer shall reimburse TVA for its actual costs, including applicable overheads, incurred in performing the Study. As a part of Interconnection Customer’s request for interconnection, Interconnection Customer submitted to TVA a deposit of $10,000 (the “Deposit”). The Deposit, if not applied previously to another study, shall be applied to Interconnection Customer’s reimbursement of TVA for TVA’s actual costs, including applicable overheads, incurred by TVA in performing the Study. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study exceed the total of any available balance of the Deposit and the Upfront Payment, TVA shall, as soon as practicable after completion of the Study, submit to Interconnection Customer a written invoice for the excess amount. Such invoice shall be due and payable thirty (30) Calendar Days after the date of the invoice. If the due date falls on a non-business day, then the payment shall be due on the next following Business Day. If the total actual costs, including applicable overheads, incurred by TVA in performing the Study are less than the total of the Deposit and the Upfront Payment, TVA shall refund the difference to Interconnection Customer. Any payments due under this Section 6 shall be made by electronic transfer to an appropriate account designated by the Party to whom the payment is owed.

If Interconnection Customer fails to pay the amount of TVA’s invoice when due, then Interconnection Customer shall pay interest, calculated in accordance with the methodology specified for interest on refunds in FERC's regulations at 18 CFR § 35.19a(a)(2)(iii), on the amount that is not paid from the date that such amount is due through the date on which TVA receives payment. TVA shall submit an invoice to Interconnection Customer for such added charge, which shall be due and payable upon receipt.

In case any portion of any invoice is the subject of a bona fide dispute, the undisputed amount shall be payable when due as described above. The disputed amount subsequently determined to be owed shall be paid promptly after such determination, with interest at the rate specified


above from the date such amount would have been due in the absence of any dispute.

Invoices shall be mailed by TVA to Interconnection Customer at the address indicated below:

7. If, while performing the Study, TVA identifies any potential impacts on the system of either a distributor of TVA power or a directly-served customer of TVA (“TVA Customer”), TVA shall notify both the TVA Customer and Interconnection Customer that TVA has determined that the Facility has the potential to impact the TVA Customer’s system. The Parties recognize that the TVA Customer may be required to perform a system impact study to determine the impacts of the Facility on the TVA Customer’s system. In such case, TVA shall enter into a separate letter agreement with the TVA Customer which letter agreement shall include, among other things, provisions governing the TVA Customer’s invoicing TVA for the cost of performing the system impact study and TVA’s release of confidential information to the TVA Customer. Interconnection Customer shall reimburse TVA for all payments made by TVA to the TVA Customer as compensation for the costs incurred by the TVA Customer in performing the system impact study. The provisions of Section 6 shall apply to invoices issued by TVA under this Section 7.

8. If, while performing the Study, TVA identifies any potential impacts on

the system of a neighboring utility other than a TVA Customer, TVA shall notify both said neighboring utility and Interconnection Customer that TVA has determined that the Facility has the potential to impact the system of said neighboring utility. Interconnection Customer and said neighboring utility shall enter into the contractual arrangements that said neighboring utility deems necessary for said neighboring utility to perform its own system impact study to determine the impacts of the Facility on its system.

9. The Parties agree that any data provided pursuant to this Agreement

and designated confidential by the providing Party shall be kept


confidential, to the extent permitted by law, and that neither Party shall disclose such designated data, except as required by law; provided, however, that either Party may disclose such confidential designated data in any manner consistent with a written consent to such disclosure obtained from the providing Party prior to such disclosure or as provided below. Such consent shall not be unreasonably withheld. Notwithstanding the foregoing, TVA may disclose such confidential designated data on a strict need-to-know basis to third party(s) assisting TVA in performing the Study or to TVA Customers(s) as provided in Section 7, provided, that said third party(s) and TVA Customer(s) have agreed to keep the designated data confidential. The Parties hereby consider this Agreement confidential and agree that, to the extent permitted by law, it shall also be kept confidential in accordance with this Section 9.

Data or information shall not be deemed confidential information where:

(a) it becomes public information or is otherwise generally available to the public through no action or fault of the receiving Party;

(b) it is already in the receiving Party’s possession prior to the effective date of this Agreement and was not received directly or indirectly from the providing Party;

(c) it is lawfully received by the receiving Party from a person who did not receive the same information directly or indirectly from the providing Party; or

(d) it is at any time independently developed by employees or consultants of the receiving Party who have not had access to the confidential information in the possession of the receiving Party.

In the event that one Party is required by a State or Federal regulatory authority or court to disclose data previously provided in connection with the Study by the other Party under a confidentiality designation, the Party subject to such requirement shall exercise reasonable efforts to obtain a confidentiality agreement with or appropriate protective order from such State or Federal authority or court, as applicable, to preserve the confidentiality of the designated data to be disclosed. Further, upon receipt of such a demand for the data, the receiving Party shall promptly


notify the other Party.

The Parties agree that monetary damages would be inadequate to compensate a Party for the other Party’s Breach of its obligations under this Section 9. Each Party accordingly agrees that the other Party shall be entitled to equitable relief, by way of injunction or otherwise, if the first Party Breaches or threatens to Breach its obligations under this Section 9, which equitable relief shall be granted without bond or proof of damages, and the receiving Party shall not plead in defense that there would be an adequate remedy at law. Such remedy shall not be deemed an exclusive remedy for the Breach of this Section 9, but shall be in addition to all other remedies available at law or in equity. The Parties further acknowledge and agree that the covenants contained herein are necessary for the protection of legitimate business interests and are reasonable in scope. No Party, however, shall be liable for direct, indirect, incidental, consequential, or punitive damages of any nature or kind resulting from or arising in connection with this Section 9 other than the recovery of all gains wrongfully acquired from unauthorized disclosure of any Confidential Information.

Notwithstanding the provisions of this Section 9, if TVA determines that transmission line siting is needed as result of the interconnection of the Facility to the TVA transmission system, Interconnection Customer authorizes TVA to publicly release any information about the Facility required for any transmission line siting studies to be performed by TVA.

10. This Agreement may be amended only by a written instrument executed

by both Parties.


12. This Agreement shall not be assigned without the prior written consent

of the other Party.




[ ]

By: Name: Title:


By: Vice President



Attachment A Appendix 5

Optional Interconnection Study Agreement

ASSUMPTIONS USED IN CONDUCTING THE OPTIONAL INTERCONNECTION STUDY

The Optional Interconnection Study shall be based upon the information

set forth by Interconnection Customer consistent with Section 10 of the LGIP:

Designation of Point of Interconnection and configuration to be studied.

T______ BA‐1

APPENDIX 6 to LGIP

Contract No.

INTERCONNECTION AGREEMENT

BETWEEN

TENNESSEE VALLEY

AUTHORITY AND

<<<INSERT REFERENCE TO IPP’S CONTRACTING ENTITY >>>

THIS INTERCONNECTION AGREEMENT, made and entered into as of the _____ day of _____, 20__, by and between Tennessee Valley Authority (“TVA”), a corporation created by and existing under and by virtue of the Tennessee Valley Authority Act of 1933, as amended, and <<<Insert Reference to IPP’s Contracting Entity >>> (“IPP”), a <<<limited liability>>> company organized under the laws of the <<<State/Commonwealth>>> of ____________ and having its principal place of business in ____________ County, <<<Insert State Reference>>>.

RECITALS

WHEREAS, IPP intends to construct, own, and operate a facility (“Facility”) near the transmission facilities of TVA for the generation and sale of electric capacity and associated energy, which facility is further described in Section III of Exhibit IC (Interconnection Criteria);

WHEREAS, the Parties wish to negotiate an Interconnection Agreement for connection of the

Facility to the TVA transmission system; and

NOW, THEREFORE, in consideration of the above premises and of the mutual covenants herein set forth, TVA and IPP agree as follows:

Article BA-0 Definitions

Section BA-0.1 - Meaning of Terms

Whenever the terms set forth in Exhibit DT (Definition of Terms) or in Section BA-0.3 (Special Definitions) appear in this Agreement, whether in the singular or plural form, whether in the present, future, or past tense, they shall have the meanings set forth in Exhibit DT and in Section BA-0.3.

Section BA-0.2 - Standard Definitions

Exhibit DT (Definition of Terms) contains standard definitions that are generally applicable to the interconnection of a generating facility to the TVA transmission system.

T______ BA‐2

Section BA-0.3 - Special Definitions Additional terms that specifically apply to the interconnection of this Facility are defined below.

Section BA-0.4 - Modifications or Clarifications

The following are modifications or clarifications to the standard terms and conditions. To the extent of any conflict between the modification or clarification of a term or condition as set forth in this Section BA-0.4 and the term or condition as set forth elsewhere in this Agreement, the modification or clarification set forth in this Section BA-0.4 shall control.

− <<<describe>>>

Article BA-1 Term Of Agreement

Section BA-1.1 - Term of Agreement (a) Except as provided in Section BA-1.2 (Default by IPP) and Section BA-1.3 (Default by TVA), this

Agreement shall become effective as of the date first above written and shall continue in effect for an original term ending thirty (30) years from the Commercial Operation Date.

(b) At the end of the original term of this Agreement, this Agreement shall continue in effect from year

to year unless terminated by either Party upon one year’s prior written notice. (c) IPP may at any time and for any reason terminate this Agreement upon 90 days’ written notice to

TVA. As soon as practicable following delivery of such notice, TVA shall, in consultation with IPP, discontinue any construction or related activities or operations and maintenance activities related to the Interconnection Project Facilities to the extent that the costs of such activities are for the account of IPP or to the extent that IPP has any liability therefor. In the event of such termination by IPP, IPP shall reimburse TVA for its costs (including applicable overheads) reasonably incurred in connection with such termination, including any costs under Section FP-1.9 (Facilities Retirement) and any costs reasonably necessary as a result of such termination to keep such termination from disrupting the safe, reliable and efficient operation of the TVA transmission system or otherwise adversely impacting TVA’s ability to maintain safe, adequate and continuous electric service to TVA’s customers.

Section BA-1.2 - Default by IPP

In addition to its termination rights specified in Section BA-1.1 (Term of Agreement), TVA shall have the right to terminate this Agreement (except as provided in Section BA-1.2(ii) below) upon sixty (60) Days’ written notice of Default (“Notice Period”), without any liability or responsibility hereunder, under the following conditions:

(i) in the event IPP:

(A) becomes bankrupt or insolvent (however evidenced) or otherwise makes an

assignment or any general arrangements for the benefit of creditors, or

T______ BA‐3

(B) files a petition or otherwise commences, authorizes, or acquiesces in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors, or such a petition is filed against it and such proceeding remains undismissed for sixty (60) Days; provided, however, that there shall be no termination of this Agreement under any of the foregoing conditions in this paragraph (i) if IPP cures such Default within the Notice Period or continues to perform its obligations pursuant to this Agreement and pursuant to applicable law and with any required court approval, a process to cause this Agreement to be assumed by a trustee is commenced within the Notice Period and completed within one hundred eighty (180) Days of such event described in Section BA-1.2(i)(A) or (B) or such additional period of time as is reasonable and IPP is diligently pursuing efforts to complete the process within such period of time; provided that such assumption provides for payment in full of all sums due and owing TVA, payable consistent with applicable law, and for the cure of all of IPP’s material Defaults; and provided further that TVA receives reasonable written assurance of IPP’s continued performance of its material obligations hereunder within the Notice Period; or

(ii) in the event IPP fails to pay TVA an amount that is not disputed in accordance with

Section GP-1.1(d) (Invoices and Payment), and such failure is not cured within thirty (30) Days of written notice of Default; or

(iii) in the event (A) IPP has the capability of complying with the provisions of Section BA-8.1

(Transmission of Facility Electrical Output) regarding the balancing on an hourly basis of Facility Electrical Output and the scheduling of energy to third parties, (B) such compliance is within the reasonable capabilities of the Facility, (C) TVA has provided written notice of IPP’s non-compliance with said provision, and (D) IPP has failed to cure any noncompliance with said provision within the Notice Period; provided that, there shall be no termination of this Agreement if, during the Notice Period, IPP takes all actions that are within its reasonable capability and within the reasonable capabilities of the Facility to comply with the provisions of Section BA-8.1; or

(iv) except for any noncompliance covered by items (i) through (iii) above, in the event IPP is not

in compliance with any of the material terms of this Agreement (or the Operating Procedures developed pursuant to paragraph (d) of Section BA-6.4 (Operating Committee)), and such Default is not cured within the Notice Period. If such Default is not reasonably capable of being cured within the Notice Period, then the Default shall be deemed cured if IPP commences and diligently pursues action to remedy the Default within the Notice Period and thereafter remedies such Default within a reasonable period of time after receipt of such notice.

Section BA-1.3 - Default by TVA

IPP shall have the right to terminate this Agreement following the expiration of the Notice Period, without any liability or responsibility hereunder, under the following conditions:

(i) in the event TVA fails to pay IPP an amount that is not disputed in accordance with

Section GP-1.1(d) (Invoices and Payment) and such failure is not cured within thirty (30) Days of written notice of Default; or

T______ BA‐4

(ii) except for any noncompliance covered by item (i) above, in the event TVA is not in compliance with any of the material terms of this Agreement, or the Operating Procedures developed pursuant to paragraph (d) of Section BA-6.4 (Operating Committee), and such Default is not cured within the Notice Period. If the Default is not reasonably capable of being cured within the Notice Period, then the Default shall be deemed cured if TVA commences and diligently pursues action to remedy the Default within the Notice Period and thereafter remedies such Default within a reasonable period of time after receipt of such notice.

Section BA-1.4 - Survival of Obligations

Termination of this Agreement shall not relieve the Parties of obligations that by their nature should survive such termination, including final billing, billing adjustment and payments, warranties, remedies, indemnity, and confidentiality.

Article BA-2 TVA Interconnection Facilities

The TVA Interconnection Facilities shall consist of those facilities identified as such in Exhibit FM (Facilities Matrix).

Article BA-3 IPP Interconnection Facilities

The IPP Interconnection Facilities shall consist of those facilities identified as such in Exhibit FM (Facilities Matrix).

Article BA-4 Network Upgrades

The Network Upgrades shall consist of those facilities identified as such in Exhibit FM (Facilities Matrix).

Article BA-5 Interconnection System Impact Study and Facilities Study

Section BA-5.1 - Interconnection System Impact Study and Facilities Study

TVA has conducted, at IPP’s expense, a study (“Interconnection System Impact Study”) to determine the impact on the TVA transmission system resulting from the interconnection of the Facility to the TVA transmission system. TVA has also conducted, at IPP’s expense, a detailed engineering study (“Facilities Study”) which includes a detailed cost estimate for the modifications needed to interconnect the Facility with the TVA transmission system as well as a determination of the Scheduled Completion Date. The Facilities Study included participation by representatives of TVA and IPP in working sessions (“Project Scoping Workshop”) conducted on <<<insert date or dates>>> in Chattanooga, Tennessee, as a joint effort between the Parties to develop a detailed scope of work activities under this Agreement, including preliminary design specifications, construction schedules, and budget estimates.

T______ BA‐5

Section BA-5.2 - Impacts on Neighboring Systems Due to the interconnected nature of electric power systems, the interconnection of the Facility to the TVA transmission system may, during the course of studies conducted under this Agreement, be determined to have an impact on distributors of TVA power, TVA’s directly-served customers, or other neighboring systems (“Affected Systems and Customers”). (Such studies include an Interconnection System Impact Study, Facilities Study, or other future studies conducted by TVA pursuant to Section FP-5.2 (Review, Inspection, and Approval by TVA) or other parts of this Agreement.) To the extent that such an impact is indicated by TVA’s studies, TVA may share the results of such studies with any Affected Systems and Customers. TVA shall coordinate such sharing of information with IPP so as to provide IPP an opportunity for input and/or consultation and shall endeavor to comply with IPP’s request to redact or withhold data or information that is confidential or commercially sensitive (unless TVA can reasonably demonstrate that the sharing of such data or information is necessary for the purposes set out above). IPP shall cooperate with the Affected Systems and Customers in their efforts to evaluate such impact on their systems, including entering into such arrangements as may reasonably be required by the Affected Systems and Customers. Unless precluded by law or regulation, IPP shall indemnify and hold harmless TVA from costs associated with, or resulting from, such efforts by the Affected Systems and Customers. Upon request by IPP, TVA will, consistent with the principles and objectives set forth above (including appropriate consultation with the Affected Systems and Customers), endeavor to provide IPP with data or information related to Affected Systems and Customers that may affect the electrical operations of the Facility.

Article BA-6 Preoperational Period

Section BA-6.1 - Construction of Facilities

TVA’s construction of TVA-Installed Facilities shall be consistent with the provisions of Section FP-4.2 (Design and Construction of TVA-Installed Facilities) and Section FP-6.1 (Environmental Review and Licensing).

Section BA-6.2 - Permits and Licenses

TVA and IPP shall be responsible for permits and licenses as set out under Section FP-6.1 (Environmental Review and Licensing).

Section BA-6.3 - Start-Up and Test Schedule

IPP shall submit for TVA’s review a start-up and test schedule for the Facility, and TVA may monitor the start-up and testing of the Facility, as set out under Section FP-5.2 (Review, Inspection, and Approval by TVA) and Section FP-5.3 (Inspection Right of TVA).

Section BA-6.4 - Operating Committee (a) Following the execution of this Agreement, the Parties shall each appoint two representatives and

one alternate to a committee (“Operating Committee”) that performs the functions listed in this Section BA-6.4. Each Party shall notify the other Party of its appointments in writing. Such appointments may be changed at any time by similar notice. The Operating Committee shall meet as necessary, but no less than once each calendar year, to carry out the duties set forth herein. The Operating Committee shall hold meetings at the request of either Party, at times and places agreed upon by the representatives. Each representative shall be responsible for working with the day-to-day operations of his or her respective facilities or system. The Operating Committee shall

T______ BA‐6

represent the Parties in all matters arising under this Agreement that may be delegated to it by mutual agreement of the Parties.

(b) The operating matters subject to coordination under this Section BA-6.4 include the following:

(i) The establishment and maintenance of control and operating procedures (as described below);

(ii) Scheduling maintenance of the generating and transmission facilities of the Parties;

(iii) The control of energy flow, kilovar flow, voltage, and other similar matters bearing upon the satisfactory synchronous operation of the Facility with the TVA transmission system;

(iv) Such other duties as may be conferred upon it by mutual agreement of the Parties which are

necessary in order to carry out the purposes and provisions of this Agreement. (c) The Parties shall cooperate in providing to the Operating Committee all information required in the

performance of the Operating Committee’s duties. All decisions and agreements, if any, made by the Operating Committee shall be evidenced in writing. The Operating Committee shall have no power or authority to amend the provisions of this Agreement. The Parties recognize that it may be desirable to modify from time-to-time the Operating Procedures provided for in paragraph (d) of Section BA-6.4 (Operating Committee). The Operating Committee shall meet, and have the authority, to modify such Operating Procedures as is mutually agreeable to the Parties.

(d) The Operating Committee representatives shall mutually develop written operating procedures (the

“Operating Procedures”) no later than thirty (30) Days prior to the scheduled Initial Synchronization Date as identified in Section III of Exhibit IC. The Parties shall establish the Operating Procedures by mutual agreement based on the designs of the Facility, the IPP Interconnection Facilities, the TVA Interconnection Facilities, the Network Upgrades, and other facilities located on the TVA transmission system, and facilities located on the transmission system of the Interconnected Neighboring Utility (if applicable). The Operating Procedures shall be used as a guide on how to integrate the Facility and the Facility Electrical Output into the TVA transmission system and the transmission system of the Interconnected Neighboring Utility (if applicable). Topics covered shall include methods of day-to-day communications, a key-personnel list for the Parties’ operations centers, clearance and switching practices, outage scheduling, daily estimates of capacity and energy, a unit operations log, and reactive power support.

Section BA-6.5 - Voltage Schedule

(a) TVA shall prepare and submit to IPP a written voltage schedule (which schedule shall be consistent with Good Utility Practice and with applicable laws and regulations) no later than thirty (30) Days prior to the Commercial Operation Date. The voltage schedule shall be based on and limited to the normally expected operating conditions for the Facility and the reactive power requirements of TVA’s system, as set out in paragraph (b) of Section IV.C (Voltage Rating, Regulation, and Power Factor) of Exhibit IC. TVA may change such voltage schedule upon thirty (30) Days’ prior written notice. IPP shall comply with the voltage schedule specified by TVA when the Facility is operating. Such voltage schedule shall be coordinated and be consistent with the voltage schedule provided to IPP by the Interconnected Neighboring Utility (if applicable). Such voltage schedule shall include a voltage range for each operating voltage specified. (For example, a voltage schedule might specify an operating voltage of 525 kV, plus/minus 5 kV, for June 1 through October 15, Monday through Friday, between the hours of 7 am and 9 pm, temperature of 75 degrees Fahrenheit or above.) TVA may, for day-to-day operational purposes, request IPP to comply with a specific voltage for a specific time period as long

T______ BA‐7

as such voltage is (i) within the voltage range, time period, and other criteria specified in the schedule and (ii) within an allowable tolerance to be determined by the Operating Committee based on actual operating experience and equipment capability. (For example, TVA might request IPP to comply with a voltage of 529 kV, plus/minus 2.5 kV, on June 25, between the hours of 9 am and 1 pm.) In the absence of a specific daily request from TVA, IPP shall comply with the voltage (i.e., 525 kV based on the above example) as specified in the schedule. IPP shall comply with the voltage schedule as set out above and shall be responsible for installing, operating, and maintaining the appropriate equipment necessary for such voltage compliance. To the extent consistent with the power factor and voltage range set out in paragraph (b) of Section IV.C of Exhibit IC, IPP shall operate the Facility in such a manner as to provide optimum support to the voltage level specified by TVA in the voltage schedule. Notwithstanding anything herein to the contrary, in no event shall IPP be required to operate the Facility outside the design capability of the Facility as set out in Section IV.C (Voltage Rating, Regulation, and Power Factor) of Exhibit IC. Upon request by TVA, IPP may in its sole discretion agree to operate the Facility at a power factor outside the range specified in paragraph (b) of Section IV.C of Exhibit IC, or at a voltage outside the range specified in the voltage schedule, in which case TVA and IPP shall agree in advance on the compensation to IPP for operating the Facility at such power factor or voltage. For purposes of this Agreement (including this Section BA-6.5 and the Interconnection Criteria), any provisions related to compliance with the voltage schedule and power factor requirements shall be deemed measurable and applicable at the Point of Interconnection (instead of at the generator step-up transformer bus).

(b) IPP shall reimburse TVA for costs incurred as a result of IPP’s failure to operate the Facility as

required in paragraph (a) of Section BA-6.5 (Voltage Schedule) if such failure was caused by action or inaction by IPP. Such costs may include (i) the direct cost of voltage support to compensate for such failure, (ii) installation on the TVA transmission system of power factor correction equipment, (iii) increased transmission line losses, or (iv) economic opportunity costs attributable to actions taken to mitigate adverse impacts on TVA’s system. For example, to maintain voltage stability and service reliability, it may be necessary for TVA to (1) modify its power system operations, which would likely result in increased overall operational expenses, (2) redispatch its generation sources, which would likely result in increased line losses, or (3) alter the power factor operating level of its generators to produce more reactive power for voltage support (at the expense of real power production), which may cause TVA to have to purchase additional power (to meet its power supply commitments to others) at unfavorable prices, or otherwise reduce TVA’s potential opportunity for sales at favorable prices. Any corrective or mitigating action taken by TVA under this paragraph (b) shall, to the extent permitted in TVA’s contracts with others, be consistent with the requirements applied by TVA to similar power production facilities connected to the TVA transmission system in comparable circumstances, including size, age, location, and operating characteristics. To the extent practicable, TVA shall notify IPP in writing or by telephone or otherwise in accordance with the Operating Procedures prior to taking any corrective or mitigating action for which IPP will be liable under this Section BA-6.5(b). Such notice will be given as far in advance as is Commercially Reasonable under the circumstances (recognizing that there may be circumstances where it is clearly impractical for TVA to defer the taking of such corrective or mitigating action). Prior to taking any corrective or mitigating action that requires the installation of equipment or taking other actions described in example (3) above for which IPP shall have cost liability, TVA shall provide IPP with reasonable advance notice of such action and the estimated cost of or loss resulting from taking such action and shall provide IPP a reasonable opportunity to correct the situation or otherwise comply with its obligations under Section BA-6.5(a) prior to TVA taking such corrective or mitigating action. The installation of equipment under this Section BA-6.5(b)(ii) shall be consistent with the Amendment Criteria and subject to Section GP-10.14 (Future Changes).

T______ BA‐8

Section BA-6.6 - Initial Synchronization Date For purposes of start-up and testing prior to the Commercial Operation Date, IPP shall notify TVA in writing of the planned Initial Synchronization Date no less than ten (10) Business Days prior to the first scheduled occurrence of such date. TVA shall approve or disapprove the Initial Synchronization Date, within two (2) Business Days of IPP’s written notice and shall have the right to have representatives present at the Facility for the initial synchronization to the extent necessary to determine compliance with the provisions of this Agreement. Once TVA has approved IPP’s Initial Synchronization Date (for start-up and testing purposes), IPP may request a delay in the Initial Synchronization Date to a later date to the extent that (a) such request does not impose an undue burden on TVA and (b) IPP agrees to compensate TVA for actual costs (including applicable overheads) incurred as a result of such delay, in which case, TVA shall endeavor to accommodate such request (either approving the later date requested or approving the next most practical date).

Section BA-6.7 - Change in Initial Synchronization Date

TVA reserves the right to delay the Initial Synchronization Date due to problems with the Facility that would give TVA a right to Disconnect the Facility pursuant to Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries). In such event, TVA shall give IPP notice of such problems, and IPP shall, at its expense, remedy any such problems with facilities or equipment that IPP is responsible for installing and/or maintaining.

Section BA-6.8 - Purchase of Capacity and/or Energy

The terms of any purchase of any capacity or real or reactive energy from IPP are not addressed under this Agreement.

Section BA-6.9 - Drawings and Permits

Each Party shall keep complete and accurate drawings of the facilities it provides under this Agreement, and, upon request, shall provide the other Party with a current up-to-date set of such drawings.

Section BA-6.10 - Manufacturers’ Data

As soon as practicable, but in no event later than ninety (90) Days following the Commercial Operation Date, IPP shall provide TVA with the actual manufacturers’ data, including any test reports and nameplate data, for the IPP-Installed Facilities and the Facility. The actual manufacturers’ data shall replace the estimated manufacturers’ data provided by IPP and utilized by TVA in performing the Interconnection System Impact Study. However, IPP is not required to supply TVA with manufacturers’ test data that is not relevant to the purposes of this Agreement (such as fuel consumption data).

Article BA-7

Control and Operation of the Facility

Section BA-7.1 - Communications IPP shall notify TVA of the next Day forecasted hourly generation levels of the Facility, including any anticipated outages, it being understood that all such forecasts are estimates only and actual generation levels may differ from the forecasts. Pursuant to Section BA-7.7 (Control Area Operations), in the event IPP designates a separately established Control Area (where the Facility Electrical Output shall be deemed to be generated) that includes the Facility, TVA shall endeavor to post on its Open Access Same-Time Information System the transfer capabilities of the transmission paths from the Facility to TVA’s transmission system interconnections with other Control Areas; provided that transmission service on TVA’s transmission system shall be made available only

T______ BA‐9

pursuant to separate agreements or arrangements for transmission service. Prior to the Commercial Operation Date, IPP shall provide to TVA a written maintenance schedule for the Facility and the IPP Interconnection Facilities that covers a period of time consistent with maintenance schedules provided for power production facilities owned or operated by TVA and other generators connected to the TVA transmission system. IPP shall thereafter continue to provide TVA with updates to said maintenance schedule such that TVA at all times has the most current maintenance schedule for the Facility and the IPP Interconnection Facilities, covering a period of time consistent with maintenance schedules provided for power production facilities owned or operated by TVA and other generators connected to the TVA transmission system. All communications by IPP pursuant to this Section BA-7.1 shall be made only to the transmission security coordinator for the TVA Control Area, or successor. To the extent necessary in accordance with Good Utility Practice, personnel of the transmission security coordinator for the TVA Control Area, or successor, may share with comparable personnel of other Control Areas such information provided by IPP. IPP shall notify TVA in writing and coordinate with TVA before IPP initiates any work that may directly or indirectly have a material adverse effect on the TVA transmission system or other electric systems (including the transmission system of the Interconnected Neighboring Utility, if applicable). IPP shall immediately notify TVA at the time when any unscheduled or forced outages occur to the IPP Interconnection Facilities or the Facility. IPP shall immediately notify TVA upon the occurrence of any changes to the information IPP provides to TVA under this Section BA-7.1. In the event TVA loses the telemetered load signals provided to TVA under Section FP-1.3 (Metering and Data Equipment), upon TVA’s request, IPP shall provide TVA with the metered data orally. Such data shall include periodic updates during each hour of the MW amounts and the MWh amounts at the end of the hour. It is the responsibility of the Parties to utilize reasonable efforts to restore the telemetered load signals as soon as possible consistent with Good Utility Practice.

Section BA-7.2 - Disconnection of Facility or Curtailment of Deliveries (a) Consistent with Good Utility Practice and applicable laws and regulations, TVA may require IPP

(1) to interrupt, suspend, or curtail deliveries from the Facility (“Curtailment” or “Curtail”) or (2) to disconnect (“Disconnection” or “Disconnect”) the Facility or any of the IPP Interconnection Facilities from the TVA transmission system or another transmission system as necessary or appropriate to eliminate adverse impacts attributable to operation of the Facility or the IPP Interconnection Facilities, including the following circumstances, whether such circumstances exist on the TVA transmission system or another system:

(i) if a condition exists that presents an imminent physical threat to persons or property and

Disconnection or Curtailment appears necessary to TVA to protect such persons or property; or

(ii) to overcome transmission system reliability problems caused by an Emergency; or

(iii) if such Disconnection or Curtailment is necessary to construct, install, maintain, repair,

replace, remove, investigate, inspect, or test any part of the Interconnection Project Facilities or any other affected part of the TVA transmission system; or

(iv) in the event IPP does not comply with the provisions of paragraph (b) of Section BA-8.1

(Transmission of Facility Electrical Output) regarding the balancing on an hourly basis of Facility Electrical Output and the scheduling of energy to third parties; provided that there shall be no Disconnection or Curtailment under this Section BA-7.2 if IPP takes all actions that are within its control and within the reasonable capabilities of the Facility to comply with the provisions of paragraph (b) of Section BA-8.1; or

T______ BA‐10

(v) as permitted under any other express provisions of this Agreement that provide for any such Disconnection or Curtailment.

(b) With respect to any Disconnection or Curtailment permitted under this Agreement, TVA shall make

a reasonable effort to notify and coordinate such Disconnection or Curtailment with IPP; provided, however, in the event of a Disconnection or Curtailment pursuant to clause (iii) of this Section BA-7.2, the Parties shall coordinate the timing of such Disconnection or Curtailment in order to minimize any adverse economic impact on IPP and TVA as a result of such Disconnection or Curtailment, recognizing that the safe and reliable operation of the TVA transmission system is of paramount importance when determining the timing of such Disconnection or Curtailment. Except in the case of an Emergency, TVA shall provide IPP with notice as far in advance of any such Disconnection or Curtailment as reasonably possible. Such notice may be given orally or by facsimile to the Facility in accordance with the procedure(s) developed by the Operating Committee. Any Disconnection or Curtailment required of IPP hereunder shall be implemented and completed as soon as possible consistent with Good Utility Practice. TVA will use Commercially Reasonable efforts to notify the transmission security coordinator for the TVA Control Area, or successor, if required, prior to any Disconnection or Curtailment under this Agreement. TVA shall keep IPP informed as to the anticipated duration of each Disconnection or Curtailment. TVA shall restore connection and resume acceptance of deliveries from the Facility as soon as practicable to the extent the condition resulting in the Disconnection or Curtailment has abated sufficiently to permit such resumption. TVA shall use Commercially Reasonable efforts such that the Disconnection or Curtailment shall continue only for so long as reasonably necessary under Good Utility Practice.

(c) Notwithstanding anything else contained in this Section BA-7.2, TVA shall have the right to

disconnect the Facility without notice if, in TVA’s sole judgment, a hazardous condition exists and immediate disconnection is necessary to protect persons or property from damage or interference caused by IPP’s interconnection and/or generating equipment, or lack of properly operating System Protection Facilities. Notwithstanding anything contained in this Agreement, IPP shall have the right to isolate or disconnect the Facility, in whole or in part, from the TVA transmission system with such notice to TVA as is reasonably practicable if, in IPP’s sole judgment consistent with Good Utility Practice, an emergency or hazardous condition exists and immediate isolation or disconnection is necessary to protect persons or the Facility from damage or interference caused by TVA Interconnection Facilities and/or the TVA transmission system, lack of properly operating System Protection Facilities, or due to a condition originating at the Facility.

Section BA-7.3 - IPP’s Qualified Personnel

IPP shall ensure that there are a sufficient number of qualified personnel for operating and monitoring the Facility and for coordinating operation of the Facility with the TVA transmission system when it is scheduled to operate. When the Facility is not scheduled to operate, IPP shall ensure that a qualified person is “on call” twenty-four (24) hours a Day and seven (7) Days a week; provided, however, that alternate staffing requirements may be specified by the Operating Committee.

T______ BA‐11

Section BA-7.4 - Interconnection IPP and TVA agree that the implementation of this Agreement shall, to the extent consistent with the requirements of the TVA Act, comply with the then-existing (or amended) applicable manuals or standards of the NERC and SERC. To the extent that this Agreement does not specifically address or provide the mechanisms necessary to comply with such NERC or SERC manuals or standards, each Party shall provide to the other Party, upon request, the information that may be required to comply with such manuals or standards and shall operate, or cause to be operated, their respective facilities in accordance with such manuals or standards. In the event IPP’s operations do not comply with such NERC or SERC manuals or standards, TVA shall have the right, after reasonable notice and the failure of IPP to correct such noncompliance within a reasonable time, to take any action necessary, consistent with Good Utility Practice, to correct the situation (including Disconnection or Curtailment), and IPP shall reimburse TVA for the costs TVA incurs to perform such action. IPP shall have no cost responsibility for TVA’s failure to comply with NERC or SERC manuals or standards except to the extent caused by the Facility or the IPP Interconnection Facilities and as provided for under NERC and SERC manuals or standards.

Section BA-7.5 - Failure to Comply (a) In addition to any other rights TVA or IPP may have under this Agreement, TVA and IPP shall have

full authority to inspect (upon reasonable advance notice) the Facility, the IPP Interconnection Facilities, or the TVA Interconnection Facilities, as applicable, and the records of the other Party, solely to the extent necessary to determine or maintain compliance with this Agreement. IPP and TVA shall have the right to redact information regarding costs, revenues, pricing, profit, or losses contained in those records that are commercially sensitive but only if such information is not relevant to the particular exercise of this right of inspection.

(b) TVA shall have the right to Disconnect the Facility and suspend the performance of any TVA duties

and obligations hereunder upon the occurrence of any of the following:

(i) if, after thirty (30) Days’ prior written notice of noncompliance, IPP fails to comply with any of the material terms and conditions of this Agreement, or the Operating Procedures developed pursuant to paragraph (d) of Section BA-6.4 (Operating Committee), that materially and adversely affects operation of the TVA transmission system, including the construction, installation, and maintenance of equipment or adherence to any Exhibit to this Agreement, excluding, however, matters provided for under Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries); or

(ii) IPP fails to make any required payments under this Agreement after the ten (10) Business

Day notice period required in Section GP-1.1(c) (Invoices and Payment); or

(iii) If, after thirty (30) Days’ prior written notice, IPP fails to allow TVA employees and inspectors reasonable access to inspect, test, examine, or repair, as applicable, the Facility, the IPP Interconnection Facilities, System Protection Facilities, metering, or other electrical equipment where such access is permitted under the terms of this Agreement, excluding, however, matters provided for under Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries).

(c) Once IPP has resumed meeting its obligations under this Agreement so that TVA is no longer

entitled to Disconnect the Facility under this Section BA-7.5, TVA shall, as soon as practicable, reconnect the Facility to the TVA transmission system and resume performing TVA’s duties and obligations hereunder.

T______ BA‐12

Section BA-7.6 - Limitations on Services Provided by TVA TVA shall not supply capacity or energy to IPP or others from its own resources or from its purchases from other neighboring systems in a manner inconsistent with the TVA Act, and nothing in this Agreement or in IPP’s agreements with others shall have the effect of making TVA, directly or indirectly, a source of power supply to IPP or others outside the TVA area (which is identified in subsection (a) of Section 15d of the TVA Act) in a manner inconsistent with the TVA Act, nor shall anything in this Agreement or said agreements with others be construed to require TVA to take any action that would have that effect. The statutory limitations in the first three paragraphs of subsection (a) of Section 15d of the TVA Act are incorporated herein by reference as fully as though set out herein, and this Agreement shall not be construed as permitting any transaction by TVA that would be inconsistent with those limitations.

Section BA-7.7 - Control Area Operations (a) For Control Area purposes, all of the Facility Electrical Output shall be deemed to be generated in

the TVA Control Area, or in the Control Area of the Interconnected Neighboring Utility (if applicable), or in a separately established Control Area that includes the Facility, consistent with NERC and SERC manuals or standards and any applicable legal requirements, including those of the FERC. Consistent with NERC guidelines or procedures for Control Area certification, IPP shall notify TVA in writing of (i) its initial designation of the Control Area where the Facility Electrical Output shall be deemed to be generated and (ii) subsequent changes to IPP’s Control Area designation. IPP shall reimburse TVA for all actual costs (including applicable overheads) incurred by TVA as a result of IPP’s changing its Control Area designation. TVA and IPP recognize that, regardless of the Control Area designated by IPP, if the Facility Electrical Output is creating an adverse effect on the TVA transmission system which condition is of the type, magnitude, or duration that, regardless of which Control Area the Facility Electrical Output was designated to be generated in or to which transmission system the Facility Electrical Output was being delivered, would give rise to a right of Disconnection or Curtailment pursuant to Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries), IPP shall be responsible for taking the action required to alleviate the condition on the TVA transmission system to the extent necessary to overcome the adverse effect giving rise to such right of Disconnection or Curtailment.

(b) TVA and IPP recognize that when IPP has designated the Control Area of the Interconnected

Neighboring Utility as the Control Area under paragraph (a) of Section BA-7.7 (Control Area Operations) or in a separately established Control Area that includes the Facility, unscheduled energy from the Facility may flow over the TVA transmission system as an indirect, unavoidable, and unintentional consequence of the physical and electrical characteristics of the interconnected network of transmission lines of which the TVA transmission system and the transmission system of the Interconnected Neighboring Utility are a part. TVA shall permit such flows to occur on the TVA transmission system so long as such flows do not give rise to a right of Disconnection or Curtailment pursuant to Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries). Should such flows of energy give rise to such right, TVA shall notify the subject Control Area operator, and IPP shall promptly undertake such action or actions requested by the subject Control Area operator, up to and including Curtailment, as are necessary to reduce such energy flows to the extent necessary to overcome the adverse effect giving rise to such right of Disconnection or Curtailment. Nothing in this paragraph (b) shall be construed to require IPP to take any action inconsistent with Good Utility Practice or with a more specific practice applied by the subject Control Area operator to generation in its Control Area, or inconsistent with applicable laws and regulations. IPP warrants and represents to TVA that IPP’s contractual arrangements with the Interconnected Neighboring Utility for the interconnection of the Facility to the transmission system of the Interconnected Neighboring Utility

T______ BA‐13

and, if in a separately established Control Area that includes the Facility, any operating procedures that IPP has with such Control Area operator will provide a basis for the remedial action to be taken as provided above and IPP shall not agree to any amendment to such contractual arrangements or operating procedures that would remove the provision that provides for such remedial action or has the effect of substantially reducing the Interconnected Neighboring Utility’s or subject Control Area operator’s right to take such remedial action. IPP shall provide TVA a copy of its agreement with the Interconnected Neighboring Utility and (if the Facility is in a separately established Control Area) a copy of the operating procedures of such Control Area operator and identify those specific sections that address such remedial action.

(c) TVA and IPP recognize that when IPP has designated TVA as the Control Area under paragraph (a)

of Section BA-7.7 (Control Area Operations), unscheduled energy from the Facility may flow over the transmission system of the Interconnected Neighboring Utility or other electrical systems (collectively referred to as “Other Systems”) as an indirect, unavoidable, and unintentional consequence of the physical and electrical characteristics of the interconnected network of transmission lines of which the transmission systems of TVA and the Other Systems are a part. Should the Other Systems notify TVA that such flows of energy have become of such type, magnitude, or duration as give rise to a right of Disconnection or Curtailment similar to that provided pursuant to Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries), IPP shall, upon being notified by TVA to such effect, promptly undertake such action or actions requested by TVA, up to and including Curtailment, as are necessary to reduce such energy flows to the extent necessary to overcome the adverse effect giving rise to such right of Disconnection or Curtailment. In the event that IPP, for whatever reasons, does not undertake such action or actions requested by TVA, TVA may Disconnect the Facility from the TVA transmission system.

Article BA-8 Transmission, Point of Interconnection, Conditions of Delivery

Section BA-8.1 - Transmission of Facility Electrical Output (a) This Agreement provides for only the interconnection of the Facility to the TVA transmission

system and does not in any way guarantee the ability of the transmission system to deliver, transmit, or otherwise transfer the Facility Electrical Output to any specific load either on or off the TVA transmission system. Any transmission service request shall be submitted to TVA separately from the interconnection process that resulted in this Agreement. The procedures and deadlines in TVA’s Guidelines shall govern processing requests for transmission service. IPP, or an eligible transmission customer purchasing the Facility Electrical Output, shall arrange for and be solely responsible for any necessary transmission of the Facility Electrical Output, in accordance with the Guidelines. If IPP or an eligible transmission customer purchasing the Facility Electrical Output requests firm transmission service, TVA will perform a transmission system impact study as provided under the Guidelines in order to determine the capability of the transmission system to deliver power from the Facility to the identified loads.

T______ BA‐14

(b) Any shortfall in Facility Electrical Output preventing IPP from meeting its commitments to third parties shall be the sole responsibility of IPP. Notwithstanding any other provisions of this Agreement, except as agreed to by the Parties and consistent with applicable law, TVA shall at no time be obligated to deliver energy to third parties in amounts in excess of the actual Facility Electrical Output that is scheduled and delivered to the TVA Control Area (“Designated Output”). Consistent with Good Utility Practice, IPP shall take all actions that are within its control and within the reasonable capabilities of the Facility to assure that during each hour the amount of Designated Output shall be equal to or greater than the schedule of energy (including any applicable transmission losses) delivered by TVA to said third parties. IPP shall immediately notify TVA of any circumstances that would cause the Designated Output to be less than the schedule of energy (“Difference”) and shall take immediate corrective action. In order to account for said Difference, said schedule of energy shall be appropriately reduced as soon as possible by the Parties so that over the hour, as is reasonably practicable, the Designated Output is equal to or greater than the schedule of energy (including any applicable transmission losses). In the event a Difference nevertheless occurs over an hour between the scheduled amount and the Designated Output, IPP shall pay, or cause a third party to pay, the appropriate charges applied to said Difference; provided, however, that said charges shall be consistent with the imbalance charges applied to similar power production facilities located in the TVA Control Area in comparable circumstances. TVA’s current imbalance charges are set out in Exhibit RD. TVA shall endeavor to provide IPP with notice as far in advance as is reasonably practicable of any modifications to the imbalance charges set out in Exhibit RD. Exhibit RD and Sections BA-8.1(b), BA-1.2(iii), and Section BA-7.2(a)(iv) shall not apply to IPP in the event that (i) the Facility operates in a separately established Control Area; (ii) the Facility output is dynamically scheduled out of the TVA Control Area to another Control Area and the equipment and related telemetry necessary to accomplish such dynamic scheduling are operational; or (iii) the Facility operates in an Interconnected Neighboring Utility Control Area. However, when the Facility is located in a separately established Control Area or in an Interconnected Neighboring Utility Control Area, IPP shall nevertheless be responsible for ensuring that its actual generation matches its scheduled deliveries in accordance with the subject Control Area’s requirements.

(c) No imbalance charges as set out in Exhibit RD shall apply during hours when prompt action needs to

be taken and when, at TVA’s request, IPP: (i) operates at a power factor outside the range specified in Section BA-6.5 (Voltage Schedule); (ii) starts up an idle generating unit or changes the output of an operating generating unit at the Facility in response to an Emergency not caused by IPP, and in each such case ((i) and (ii)) the Difference that occurred was due to such circumstances; or (iii) IPP is in compliance with Section BA-6.5 (Voltage Schedule) but IPP agrees to alter the MW output of any of the Facility’s generating units in order to change the voltage output or specified power factor or reactive power output.

Section BA-8.2 - Delivery of Facility Electrical Output from TVA to the Control Area of the Interconnected Neighboring Utility

If IPP elects to interconnect the Facility to the transmission systems of TVA and the Interconnected Neighboring Utility, the following will apply. If IPP designates the TVA Control Area to receive the Facility Electrical Output in accordance with Section BA-7.7 (Control Area Operations), as long as consistent with the Guidelines and applicable law at the time of execution of this Agreement, TVA shall not require IPP or purchasers of the Facility Electrical Output to pay a transmission service charge (but IPP shall be responsible for any charges or compensation provided for in Section BA-8.1(b) (Transmission of Facility Electrical Output)) for the delivery of Facility Electrical Output from the TVA Control Area to the Control Area of the Interconnected Neighboring Utility, provided that the Facility remains directly connected to the transmission system of the Interconnected Neighboring Utility and the connection is adequate to make the delivery. If the

T______ BA‐15

Facility is its own Control Area, as long as consistent with the Guidelines and applicable law at the time of execution of this Agreement, TVA shall not require IPP or its Customers to pay a transmission service charge for the delivery of the Facility Electrical Output from the IPP Control Area to the Control Area of the Interconnected Neighboring Utility, provided that the Facility remains directly connected to the transmission system of the Interconnected Neighboring Utility and the connection is adequate to make the delivery. In the event the contract path pricing and contracting methodology for transmission service provided under the Guidelines is changed by TVA to a flow-based pricing and contracting methodology, the provisions of this Section BA-8.2 shall be of no force and effect as of the effective date of such change to the Guidelines.

Section BA-8.3 - Credit for Transmission Charges

As a result of TVA’s installing the Network Upgrades at IPP’s expense, as indicated under Article FP-3 (Network Upgrades), either IPP or its designee (the “TC Recipient”) is eligible for a transmission credit to the extent reflected in column (i) of the Facilities Matrix as follows.

(a) A credit may be applied to offset charges incurred under the Guidelines for network, firm point-

to-point, or non-firm point-to-point transmission services purchased from TVA (exclusive of any charges for ancillary services under the Guidelines). Each Month in which such charges are incurred by an eligible transmission customer for transmitting Facility Electrical Output (purchased by that customer), the TC Recipient shall receive from the total amount available a corresponding credit on its monthly invoice equal to such transmission services charges (as such charges may be appropriately allocated as described in paragraph (b) below of Section BA-8.3). IPP shall notify TVA of the TC Recipient even if a parent, affiliate, or subsidiary of IPP is the eligible transmission customer. Absent a designation by IPP, the amount of the credit for such transmission service purchased from TVA shall be payable by TVA to IPP. Such notification shall be given before the end of the then-current Month in the event of changes to a TC Recipient, or addition of a new TC Recipient.

(b) It is recognized that a “network transmission service” customer might purchase power from

more than one generator source during the same Month. In that case, the charges (for network transmission service) to that customer for that Month shall be appropriately allocated for purposes of applying the transmission credit described above. Such allocation shall be based on the maximum amount of electrical output purchased by that customer from each generator source. For example, if a “network transmission service” customer were to purchase (i) a maximum of 40 MW of Facility Electrical Output from IPP and (ii) a maximum of 60 MW of generator output from another source during the same Month, the transmission credit shall be applied to offset only 40% of the charges (for network transmission service) to that customer for that Month.

(c) A credit shall be made available for amounts of Facility Electrical Output purchased by TVA (TVA Purchase Credit) based on the imputed cost of the use of TVA’s transmission system for the TVA purchase. Each Month in which TVA purchases Facility Electrical Output, the TC Recipient shall receive from the total amount available a TVA Purchase Credit. IPP shall notify TVA of the TC Recipient even if it is a parent, affiliate, or subsidiary of IPP. Absent a designation by IPP, the amount of the TVA Purchase Credit shall be payable by TVA to IPP. Such notification shall be given before the end of the then-current Month in the event of a change to a TC Recipient or an addition of a new TC Recipient.

The total amount available for the credits under Section BA-8.3(a) and Section BA-8.3(c) shall be up to the amount IPP paid to TVA for providing the Network Upgrades to the extent reflected in column (i) of the Facilities Matrix.

T______ BA‐16

Section BA-8.4 - Point of Interconnection and Conditions of Delivery

TVA shall accept Facility Electrical Output at the Point of Interconnection of the IPP Interconnection Facilities to the TVA Interconnection Facilities as indicated on Exhibit FC. The Facility Electrical Output delivered to TVA at the Point of Interconnection shall be in the form of 3-phase, alternating current at a frequency of approximately 60 hertz and a nominal voltage specified in Article BA-9 (Special Provisions or Clarifications). In addition to TVA’s right to Disconnect the Facility from the TVA transmission system as provided elsewhere in this Agreement, TVA may Disconnect the Facility from the TVA transmission system at any time that the limits on voltage and frequency provided for under this Section BA-8.4 are not maintained and IPP’s deviations from the voltage and frequency limits specified above are materially and adversely affecting TVA or a third party. Except in the case of an Emergency, TVA shall provide IPP with notice as far in advance of any such Disconnection as reasonably possible. Such notice may be given orally or by facsimile to the Facility. Once IPP has resumed meeting its obligations under this Agreement so that TVA is no longer entitled to Disconnect the Facility under this Section BA-8.4, TVA shall, as soon as practicable, reconnect the Facility to the TVA transmission system.

Section BA-8.5 - Fluctuations or Disturbances on the TVA Transmission System Facilities (a) IPP shall operate its Facility and the IPP Interconnection Facilities in such a manner that the Facility

Electrical Output delivered by IPP shall meet the requirements for voltage level, power factor, harmonics, and other electrical characteristics that TVA specifies in writing in the Interconnection Criteria and otherwise in accordance with this Agreement, consistent with Good Utility Practice and applicable laws and regulations. (In the event of conflict between the Interconnection Criteria and other provisions of this Agreement, the Interconnection Criteria shall prevail for the purposes set out in this Section BA-8.5.)

(b) IPP shall provide, at its expense, suitable equipment that meets the requirements TVA specifies pursuant to this Section BA-8.5. In the event, however, that the Facility or the IPP Interconnection Facilities fail to meet such requirements and such failure causes, or may cause, a materially adverse effect on the TVA transmission system, TVA shall notify IPP of the circumstances, and TVA shall have the right to have the Facility Disconnected from the TVA transmission system, and, if required, from the transmission system of the Interconnected Neighboring Utility (if applicable), until IPP corrects the condition causing such effect. TVA shall give IPP written notice of these circumstances in addition to the above-mentioned notice, but the requirement of providing such written notice shall not limit or delay TVA’s right to Disconnect the Facility from the TVA transmission system to the extent immediate action is necessary to protect persons or property from danger. IPP shall notify TVA when it has taken satisfactory corrective measures. If the Facility has been Disconnected, once IPP has resumed meeting its obligations under this Agreement so that TVA is no longer entitled to have the Facility Disconnected under this Section BA-8.5, TVA shall, as soon as practicable, reconnect the Facility to the TVA transmission system.

T______ BA‐17

Article BA-9 Special Provisions or Clarifications

The following provisions specifically apply to this Facility:

(a) for purposes of Section BA-8.4 (Point of Interconnection and Conditions of Delivery), the

Facility Electrical Output delivered to TVA at the Point of Interconnection shall be at a nominal voltage of <<<500,000/161,000/230,000>>> volts as defined by the then-latest revision of ANSI C84.1, “Standard for Electric Power Systems and Equipment - Voltage Ratings (60 HZ).”

(b) for purposes of Section GP-6.1 (Notices), the following addresses shall apply:

Notices to TVA Notices to IPP

Tennessee Valley Authority

1101 Market Street (MR 1B-C), Chattanooga, TN 37402-2801

(Attention: Vice President, Transmission Operations & Power Supply

Facsimile: (423) 751-4067 Facsimile:

(c) for purposes of Section GP-6.2 (Invoices), the following addresses shall apply:

Invoices to TVA Invoices to IPP

TVA Accounts Payable Department

P.O. Box 15500 Knoxville, Tennessee 37901-5500 (400 West Summit Hill Drive Knoxville, Tennessee 37902-1499)

Facsimile: 865-632-6609

T______ BA‐18

(d) for purposes of Section GP-6.3 (Payments), all payments required under this Agreement shall be made by the FedWire transfer method to TVA’s account at the U.S. Treasury in accordance with the following instructions:

Bank Name: TREAS NYC (official abbreviation)

Bank Address: New York Federal Reserve Bank, New York City

ABA Number: 021030004

Account No: 4912

OBI: Provide your organization name and invoice number or explanation of payment.

Contacts:

(e) for purposes of Section GP-10.11 (Designation of Project Administrators), the following designations shall apply:

TVA Project Administrator IPP Project Administrator Jason L. Adams (Name of Person) Interconnection Specialist (Title) Stakeholder Services & Contracts (Organization) Transmission Operations & Power Supply

Tennessee Valley Authority 1101 Market Street (MR 1B-C), Chattanooga, TN 37402-2801

(Address)

Telephone No: (423) 751-7274 Telephone No:

(f) in accordance with Article GP-9 (Security), IPP shall provide Construction Security in an amount equal to million dollars ($ million) and Continuing Security in an amount equal to million dollars ($ million).

T______ BA‐19

IN WITNESS WHEREOF, the Parties, by their respective duly authorized representatives, have executed this Agreement effective as of the date written first above.

TENNESSEE VALLEY AUTHORITY <<REFERENCE TO IPP’S ENTITY>>

By:

By:

Name: Senior Vice President Title: Transmission & Power Supply

WITNESS: WITNESS:

Name: Name:

EXHIBIT CSP CONTRACTOR SIGNATURE PAGE

CONSTRUCTION PROJECT AGREEMENT

Site or Facility Location:

Description of Work:

Contract Number:

THE PRIME CONTRACTOR AGREES TO BE BOUND BY THE PROVISIONS OF THE ABOVE LISTED PROJECT AGREEMENT BY PROVIDING THE FOLLOWING INFORMATION:

Will this project (at any one location at any given time) employ 200 or more contractor craft employees? Yes No (Art. II:N)

Signature: Date:

Title:

Company Name:

Address:

City, State, Zip Code:

Telephone Number: ( )

Contractor’s Joint Administrative Committee Member:

Fax Number: ( )

Name:

Address:

City, State, Zip Code:

Telephone Number: ( ) Fax Number: ( )

The PRIME CONTRACTOR shall immediately send this page to the Contract Agent prior to beginning work.

THE PRIME CONTRACTOR IS RESPONSIBLE TO ENSURE THAT EACH APPLICABLE SUBORDINATE CONTRACTOR AGREES TO BE BOUND BY THE PROVISIONS OF THE ABOVE LISTED PROJECT AGREEMENT AND PROVIDES THE FOLLOWING INFORMATION AND SIGNATURE OF THE SUBORDINATE CONTRACTOR:

SUBORDINATE CONTRACTOR:

Signature: Date: Title: Company Name: Address: City, State, Zip Code: Telephone Number: ( ) Fax Number: ( )

SUBORDINATE CONTRACTOR’S JOINT ADMINISTRATIVE COMMITTEE MEMBER: Name: Address: City, State, Zip Code: Telephone Number: ( ) Fax Number: ( )

The Prime Contractor is responsible for distribution of subordinate contractor’s signed project agreement to the following:

TENNESSEE VALLEY TRADES & TENNESSEE VALLEY AUTHORITY TVA CONTRACT AGENTLABOR COUNCIL MANAGER, INDUSTRIAL RELATIONS

McGHEE TYSON PLAZA, SUITE A 400 W. SUMMIT HILL DRIVE (ET 6D) 269 CUSICK ROAD KNOXVILLE, TN 37902-1499 ALCOA, TN 37701 TELEPHONE: (423) 632-7759 TELEPHONE: (423) 981-3970 FAX: (423) 632-2003 FAX: (423) 981-3958

8/26/2001 FM-1

T______ 1 Revision 4

EXHIBIT DT

DEFINITION OF TERMS Unless otherwise defined in the Agreement, the following terms (whether in the singular or plural form, whether in the present, future, or past tense) shall have the meanings set forth in this Exhibit DT, as such meanings may be modified or supplemented as provided in Article BA-0 (Definitions). – Affected Systems and Customers

has the meaning set forth in Section BA-5.2 (Impacts on Neighboring Systems). – Affiliate

means, with respect to IPP, another Person (i) which, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, (ii) which, directly or indirectly, of record or beneficially, owns or holds 10% or more of the shares of any class of capital stock or other ownership interest of such Person having voting power or (iii) of which 10% or more of the shares of any of the capital stock or other ownership interest having voting power is owned or held, directly or indirectly, of record or beneficially, by or for such Person. For purposes of this definition, “control” when used with respect to any entity means the power to direct the management and policies of such entity, 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 Interconnection Agreement (including the Base Agreement, together with Exhibit CSP, this Exhibit DT, Exhibit IC, Exhibit FA, Exhibit FC, Exhibit FM, Exhibit FP, Exhibit FPS, Exhibit GP, and Exhibit RD), as it may be modified, supplemented, or amended from time to time in accordance with its terms.

– Amendment Criteria

means the following criteria or standards that will be applicable to any proposed amendment to this Agreement. Such amendment must be:

1. Commercially Reasonable; 2. consistent with Good Utility Practice; 3. consistent with then applicable laws and regulations; 4. necessary for the safe and reliable interconnection of the Facility with the TVA transmission system; and 5. consistent with comparable interconnection agreements TVA has executed or is preparing to execute with entities with generating facilities similar to the Facility.

– Base Agreement

means Articles BA-0 (Definitions) through BA-9 (Special Provisions or Clarifications) of this Agreement (without attachments or exhibits).

– Billed Party

has the meaning set forth in Section GP-1.1 (Invoices and Payment).


– Billing Party has the meaning set forth in Section GP-1.1 (Invoices and Payment).

– Business Day

means any Day except Saturday, Sunday, or a weekday that is observed by TVA as a Federal holiday (Federal holidays currently include New Year’s Day, Martin Luther King’s Birthday, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans’ Day, Thanksgiving Day, and Christmas Day).

– CDA

has the meaning set forth in Section GP-10.12 (Agreement Administration). – Central Time

means Central Standard Time or Central Daylight Savings Time, whichever is then prevailing for the TVA transmission system.

– Change

has the meaning set forth in paragraph (d) of Section GP-10.14 (Future Changes). – Change in Legal Requirements

means one of the following:

1. A Regulatory Authority adopts, enacts, or implements a change in laws, regulations, rules, standards, or practices that: (a) applies to the interconnection arrangements under this Agreement and to interconnection

arrangements involving all other similarly situated generating facilities and is to be implemented by changes to all such existing interconnection arrangements;

(b) both Parties are legally bound to implement; and (c) materially affects or is reasonably expected to materially affect this Agreement,

2. A Regulatory Authority prevents, in whole or in part, one or both of the Parties from performing a provision of this Agreement in accordance with its terms, or

3. Any provision of this Agreement is held, to any extent, to be invalid or unenforceable by a Regulatory Authority or court of competent jurisdiction.

– Commercial Operation Date

means the Day (commencing at 00:00 Central Time), on or after Initial Synchronization Date, during which the Facility Electrical Output is first delivered into the TVA transmission system under separate arrangement with TVA other than Facility Start-Up & Test Arrangement. (This date is estimated in Section III (Specific Requirements or Clarifications) of Exhibit IC.)

– Commercially Reasonable

means, with respect to any action required to be made, attempted, or taken by a Party under this Agreement, such efforts as a reasonably prudent business would undertake for the protection of its own interests under the conditions affecting such action, including the time for notice in advance of the need to take such action, the duration and type of such action, the competitive environment in which such action occurs, and the cost and risk to the Party required to take such action. The Party carrying out such efforts or action should endeavor, to the extent practical, to (i) coordinate with the other Party in order to minimize any adverse impact on the other Party and (ii) mitigate the cost impact on the other Party, including consultation with the other Party as to reasonable alternative plans or actions for cost mitigation. As one example of Commercially Reasonable efforts, a decision by TVA whether to repair or to replace malfunctioning equipment that is reimbursable by IPP under this Agreement


should be the same as if that equipment were to be repaired or replaced at TVA’s own expense. Likewise, a decision by TVA whether to approve a request from IPP to extend a deadline (as permitted under this Agreement) should be the same as if TVA were considering a similar request from an internal generating plant or a facility from which TVA is purchasing electric energy or capacity.

– Confidential Information

has the meaning set forth in Section GP-5.2 (Confidentiality). – Construction Security

has the meaning set forth in Section GP-9.2 (Security Amount and Duration). – Construction Project Agreement

means the agreement between TVA and the Tennessee Valley Trades and Labor Council, executed by TVA on May 9, 1991, as amended and supplemented.

– Continuing Security

has the meaning set forth in Section GP-9.2 (Security Amount and Duration). – Contractor Signature Page

means Exhibit CSP to this Agreement. – Control Area

means an electric power system or combination of electric power systems to which a common automatic generation control scheme is applied in accordance with Good Utility Practice in order to (a) match, at all times, the power output of the generators within the electric power system and capacity and energy purchased from entities outside the electric power system, with the load within the electric power system; (b) maintain scheduled interchange with other Control Areas; (c) maintain the frequency of the electric power system within reasonable limits; and (d) provide sufficient generating capacity to maintain operating reserves.

– Curtail or Curtailment

has the meaning set forth in Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries). – Customer

means any entity that has a contractual arrangement to purchase Facility Electrical Output. – Day

means the period beginning at 00:00 and ending at 12:00 midnight Central Time. – Default

has the meaning set forth in Section BA-1.2 (Default by IPP) and Section BA-1.3 (Default by TVA). – Designated Output

has the meaning set forth in paragraph (b) of Section BA-8.1 (Transmission of Facility Electrical Output).


– Difference has the meaning set forth in paragraph (b) of Section BA-8.1 (Transmission of Facility Electrical Output).

– Disconnect or Disconnection

has the meaning set forth in Section BA-7.2 (Disconnection of Facility or Curtailment of Deliveries). – Disputing Party

has the meaning set forth in paragraph (b) of Section GP-10.13 (Independent Expert Process). – Emergency

means any abnormal system condition, including voltage abnormalities, associated with the transmission and distribution of electricity that, in the sole reasonable judgment of TVA, requires automatic or prompt manual action to prevent or limit damage to persons or property, loss of transmission facilities or generation supply that could adversely affect or is imminently likely to adversely affect the Facility, the IPP Interconnection Facilities, the reliability of the TVA transmission system or the systems to which the TVA transmission system is directly or indirectly connected, or TVA’s ability to maintain safe, adequate, and continuous electric service to its customers consistent with Good Utility Practice; provided, however, that if TVA declines to meet its load requirements because of market price such action shall not constitute an Emergency.

– Exhibit CSP

means Exhibit CSP to this Agreement, entitled Contractor Signature Page, Construction Project Agreement.

– Exhibit DT

means Exhibit DT to this Agreement, entitled Definition of Terms, which sets out standard term definitions that are generally applicable to any generating facility for interconnection to the TVA transmission system.

– Exhibit FA

means Exhibit FA to this Agreement, entitled Facilities Arrangements, which, including Exhibits FM, FC, FP, and FPS, sets out the arrangements for the Interconnection Project Facilities. The Parties agree that in the future mutually acceptable changes to Exhibit FA may be necessary. TVA shall provide to IPP any such additional changes to Exhibit FA that the Parties have mutually accepted, as evidenced by the Parties’ authorized representatives initialing and dating such changed Exhibit FA; such initialed, dated, changed Exhibit FA shall be attached hereto and made a part of this Agreement without further action of the Parties.

– Exhibit FC means Exhibit FC to this Agreement, entitled Facilities Configuration, as described in Section FA-1 (Reference to Additional Exhibits). – Exhibit FM

means Exhibit FM to this Agreement, entitled Facilities Matrix, which sets out in a table arrangements for the Interconnection Project Facilities. TVA may from time to time modify, change, replace, or adjust Exhibit FM to add to, delete from, or change the item descriptions therein so as to appropriately reflect changes made to the Interconnection Project Facilities in accordance with Section FP-1.7 (Changes or Additions to TVA Interconnection Facilities) or Section FP-2.4 (Changes to IPP Interconnection Facilities). Any such modified, changed, replaced, or adjusted Exhibit FM shall be


provided to IPP as soon as practicable and attached hereto and made a part of this Agreement without further action of the Parties.

– Exhibit FP

means Exhibit FP to this Agreement, entitled Facilities Provisions, which sets out standard provisions that are generally applicable to the Interconnection Project Facilities.

– Exhibit FPS

means Exhibit FPS to this Agreement, entitled Facilities Payment Schedule, as it may be replaced by TVA from time to time as provided for in Section FA-8 (Billing and Payments for Initial Installation Work).

– Exhibit GP

means Exhibit GP to this Agreement, entitled General Provisions, which includes provisions that are generally applicable to the interconnection of any generating facility to the TVA transmission system.

– Exhibit IC

means Exhibit IC to this Agreement, entitled Interconnection Criteria, as the same may be amended, supplemented, revised, altered, or changed by TVA, upon written notice delivered to IPP not less than thirty (30) Days prior to any such alteration, from time to time in TVA’s sole reasonable discretion to deal with matters involving the reliability of the TVA transmission system, Emergencies, and safety matters; provided, however, that any amendments, supplements, revisions, alterations, or changes to the Interconnection Criteria shall be consistent with the Amendment Criteria and subject to Section GP-10.14 (Future Changes).

– Exhibit RD

means Exhibit RD to this Agreement, entitled Rate for Difference Between Scheduled Amount and Generation Output, as modified, changed, replaced, or adjusted by TVA from time to time.

– Facilities Matrix

means Exhibit FM (Facilities Matrix). – Facilities Study

has the meaning set forth in Section BA-5.1 (Interconnection System Impact Study and Facilities Study).

– Facility

as referenced in the first Recital of the Base Agreement and further described in Section III (Specific Requirements or Clarifications) of Exhibit IC, and as used throughout this Agreement, means IPP’s facility for the generation and sale of electric capacity and associated energy, and includes any portion of the generation plant that may be leased to a third party and all replacements and upgrade equipment owned by IPP and installed, operated, and maintained by IPP or its agent at the Site in its sole reasonable discretion in accordance with the terms and conditions of this Agreement, consistent with Good Utility Practice.

– Facility Electrical Output

means the actual amount of net electrical power generated by the Facility.

– Facility Start-Up & Test Arrangement means the arrangement (separate from this Agreement) between TVA and IPP during the Facility’s


start-up and testing period for delivery of Facility Electrical Output into the TVA transmission system and payment by TVA for such delivery.

– FERC

means the Federal Energy Regulatory Commission or any such successor regulatory agency. – Final Adjustment

has the meaning set forth in Section FA-8 (Billing and Payments for Initial Installation Work) of Exhibit FA.

– FOIA

has the meaning set forth in Section GP-5.2 (Confidentiality). – Force Majeure

has the meaning set forth in Article GP-3 (Force Majeure). – Good 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 practices, methods, and acts that, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety, and expedition. Good Utility Practice is not intended to be limited to any particular set of optimum practices, methods, or acts to the exclusion of all others, but rather is intended to include a spectrum of acceptable practices, methods, and acts generally accepted in the region in which the Facility is located (such as those generally engaged in or approved by electric utilities operating within the SERC region or by regional transmission organizations or similar transmission entities established in the southeast region of the United States).

– Guidelines

means TVA’s Transmission Service Guidelines, as such Guidelines now exist or may hereafter be modified, or any replacement document providing for transmission service over the TVA transmission system.

– Imaged Agreement

has the meaning set forth in Section GP-5.1 (Imaged Agreement). – Indemnitee

has the meaning set forth in Section GP-8.4 (Control of Indemnification). – Independent Expert

means an entity with demonstrated expertise and experience in the matter of the Technical Dispute, including demonstrated expertise and experience with respect to the Amendment Criteria (other than number 5 thereof). No Independent Expert shall be an agent, employee, contractor, or former agent, employer, or contractor of either Party without the consent of the other Party in its sole discretion.

– Initial Back Feed Date

means the first Day (on or after Interconnection Facilities Completion Date) during which the TVA Interconnection Facilities and IPP Interconnection Facilities are energized for the supply of back feed power to IPP (typically for equipment testing purposes) prior to Initial Synchronization Date. (This date is estimated in Section III (Specific Requirements or Clarifications) of Exhibit IC.) If Initial Back Feed Date and Interconnection Facilities Completion Date are to occur on the same date, then energization may not


occur until after satisfactory inspection and approval of the facilities, as indicated in the definition of Interconnection Facilities Completion Date. Also, in the event of delay in Interconnection Facilities Completion Date due to certain components (of TVA Interconnection Facilities and IPP Interconnection Facilities) that remain to be completed and inspected, the Operating Committee might approve an Initial Back Feed Date prior to Interconnection Facilities Completion Date if the Operating Committee determines (based on Good Utilities Practice) that such components have no impact on the safety and reliability of any electrical operation related to the supply and utilization of back feed power from the TVA transmission system. Such approval might be given orally as permitted in accordance with paragraph (e) of Section FP-5.2 ( Review, Inspection, and Approval by TVA).

– Initial Synchronization Date

means the first Day (on or after Initial Back Feed Date and Interconnection Facilities Completion Date) during which the Facility has been approved by TVA as safe and reliable for parallel electrical operation with the TVA system (including TVA’s generation facilities). (This date is estimated in Section III (Specific Requirements or Clarifications) of Exhibit IC.) In the event IPP elects to synchronize to an Interconnected Neighboring Utility system prior to the establishment of the Initial Synchronization Date to the TVA transmission system, IPP shall provide TVA with at least ten (10) Business Days prior written notice of the date such synchronization to the Interconnected Neighboring Utility system is scheduled to occur.

– Interconnected Neighboring Utility

means a neighboring utility of TVA (including its parent company or any subsidiary or affiliate) whose transmission system is interconnected with the Facility (whether initially or at some point in the future during the term of this Agreement) during the periods such interconnection is in effect. (For example, if the Facility is interconnected with the transmission system of Alabama Power Company, the term “Interconnected Neighboring Utility” shall mean Alabama Power Company, Southern Company Services, the Southern Company, or any other subsidiary or affiliate of the Southern Company.) During the term of this Agreement, if no such interconnection ever exists between the Facility and the transmission system of a neighboring utility, then the provisions in paragraphs (b) and (c) of Section BA-7.7 (Control Area Operations), the provisions in Section BA-8.2 (Delivery of Facility Electrical Output from TVA to the Control Area of the Interconnected Neighboring Utility), and all other references in the Agreement to the term “Interconnected Neighboring Utility” shall not apply.

– Interconnection Criteria

means TVA’s criteria for interconnecting the IPP Interconnection Facilities to the TVA transmission system, as described in Exhibit IC.

– Interconnection Facilities Completion Date

means the first Day during which all TVA Interconnection Facilities and IPP Interconnection Facilities have been inspected and approved by TVA as safe and reliable for electrical operation consistent with Good Utilities Practice and Article FP-5 (Review, Inspection, and Approval of Facilities).

– Interconnection Project Facilities means all facilities installed (as indicated on Exhibits FA, FM, FC and elsewhere in this Agreement) in order to interconnect the Facility to the TVA transmission system, including the TVA Interconnection Facilities, IPP Interconnection Facilities, Network Upgrades, and metering, communication, relaying, protection, and safety equipment.


– Interconnection Project Facilities Completion Date means the first Day during which all Interconnection Project Facilities (including Network Upgrades) have been inspected and approved by TVA as safe and reliable for electrical operation consistent with Good Utilities Practice and Article FP-5 (Review, Inspection, and Approval of Facilities). If this date is to occur after Initial Synchronization Date, then delivery of Facility Electrical Output will be subject to certain limitations as set out under Section FP-3.6 (Synchronization Before Completion of Interconnection Project Facilities).

– Interconnection System Impact Study

has the meaning set forth in Section BA-5.1 (Interconnection System Impact Study and Facilities Study).

– IPP

has the meaning set forth in the first paragraph of the Base Agreement. – IPP-Owned Facilities

has the meaning set forth in Exhibit FA (Facilities Arrangements). – IPP-Installed Facilities

has the meaning set forth in Exhibit FA (Facilities Arrangements). – IPP Interconnection Facilities

means the Interconnection Project Facilities that are IPP-Owned Facilities as identified in column (k) of the Facilities Matrix and in Article FP-2 (IPP Interconnection Facilities).

– Labor Relations Supplements

means supplements to TVA’s Construction Project Agreement that have been developed since the execution of the Construction Project Agreement in 1991. These documents are collected by TVA’s Labor Relations staff and distributed to contractors for the purpose of notifying them of the revisions and agreements affecting the Construction Project Agreement since 1991.

– Legal Authority

means an entity having jurisdiction over the subject matter of this Agreement, which may include the government of the United States or any state or territory thereof; any political subdivision, agency, commission, body or instrumentality thereof (other than TVA); or a Regulatory Authority.

– Month

means the period beginning at 00:00 Central Time on the first Day of a given calendar month and ending at 12:00 midnight Central Time on the last Day of the same calendar month.

– NERC

Refers to the North American Electric Reliability Council or any successor organization assuming or charged with similar responsibilities related to the operation and reliability of the North American electric interconnected transmission grid.

– Network Upgrades means the Interconnection Project Facilities that are TVA-Owned Facilities as identified in column (j), under the “Network Upgrades” category, of the Facilities Matrix and in Article FP-3 (Network Upgrades).


– Non-Performing Party has the meaning set forth in Section GP-3.1 (Force Majeure Excuse).

– Notice Period

has the meaning set forth in Section BA-1.2 (Default by IPP). – O&M

has the meaning set forth in Exhibit FA (Facilities Arrangements), with the O&M work and costs being described in Section FA-9 (Billing and Payments for O&M Work).

– Operating Committee

has the meaning set forth in Section BA-6.4 (Operating Committee). – Operating Procedures

has the meaning set forth in paragraph (d) of Section BA-6.4 (Operating Committee). – Other Systems

has the meaning set forth in paragraph (c) of Section BA-7.7 (Control Area Operations). – Other Users

has the meaning set forth in paragraph (a) of Section FP-1.6 (Service to Others). – Party

means TVA or IPP as the context in this Agreement so requires. – Person

means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, trustee(s) of a trust, unincorporated organization.

– Persons Indemnified

means, when used with respect to a Party, collectively or individually (as the context might indicate), the Party and the Party’s Affiliates, as well as the directors, officers, representatives, agents, contractors, and employees of each of them. With respect to TVA, Persons Indemnified includes the United States of America.

– Point of Interconnection

means the point, shown in Exhibit FC, where the TVA Interconnection Facilities connect to the IPP Interconnection Facilities.

– Project Administrators

means the persons designated as TVA Project Administrator and IPP Project Administrator in accordance with Section GP-10.11 (Designation of Project Administrators).

– Project Scoping Workshop

has the meaning set forth in Article BA-5 (Interconnection System Impact Study and Facilities Study) and is considered part of the Facilities Study.

– Records

has the meaning set forth in Section GP-5.3 (Records Generally).


– Referenced Project Documentation has the meaning set forth in Section FA-10 (Referenced Project Documentation).

– Regulatory Authority

means a local, state, federal or regional regulatory body or similar authority having jurisdiction over the subject matter of this Agreement, which may include an RTO, an independent system operator (ISO), a regional electric reliability authority, FERC, or other entity with authority to establish electric system reliability or operations standards generally applicable in a region; provided, however, that for the purposes of any Change in Legal Requirements, “Regulatory Authority” does not include TVA; and for purposes of Section GP-10.14 (Future Changes), “Regulatory Authority” includes only a local, state, federal or regional regulatory body or similar authority having jurisdiction over the proposed amendment to this Agreement.

– RTO

means any regional transmission organization to which TVA transfers operational control of its transmission facilities, or a portion thereof, in accordance with applicable laws and regulations.

– RTUs

has the meaning set forth in paragraph (a) of Section FP-1.3 (Metering and Data Equipment). – Scheduled Completion Date

means the estimated date (as TVA determines as part of the completion of the Facilities Study) by which all TVA-Installed Facilities (including Network Upgrades) are scheduled to be completed and approved by TVA as safe and reliable for electrical operation consistent with Good Utility Practice and Article FP-5 (Review, Inspection, and Approval of Facilities). TVA may revise the Scheduled Completion Date in accordance with the provisions of Section FP-4.2 (Design and Construction of TVA-Installed Facilities). (This date is specified in Section III (Specific Requirements or Clarifications) of Exhibit IC.)

– Security

has the meaning set forth in Section GP-9.1 (Agreement Security). – SERC

refers to the Southeastern Electric Reliability Council or any successor organization assuming or charged with similar responsibilities related to the operation and reliability of the regional electric interconnected transmission grid.

– Site

means the real property on which the Facility is located as indicated in Section III (Specific Requirements or Clarifications) of Exhibit IC.

– System Protection Facilities

means those IPP Interconnection Facilities (including relays and their associated settings, monitoring and control equipment, switching devices, and power circuit breakers) installed and maintained by IPP, at its expense, that are required under the Agreement to protect (1) the TVA transmission system from faults occurring at the Facility and IPP Interconnection Facilities and (2) the Facility and IPP Interconnection Facilities from faults occurring on the TVA transmission system or the systems of others to which the TVA transmission system is directly or indirectly connected.

– TC Recipient

has the meaning set forth in paragraph (a) of Section BA-8.3 (Credit for Transmission Charges).


− Technical Dispute

means a dispute by a Party of a technical (e.g., factual or engineering) matter resulting from a proposed amendment as provided in Section GP-10.14 (Future Change) in connection with a modification, addition, or other change to the TVA Interconnection Facilities, IPP Interconnection Facilities, the Interconnection Criteria, or to the obligations of a Party under this Agreement, including those in the definition of “Exhibit IC” and Sections BA-6.5(b)(ii) (Voltage Schedule), FP-1.7 (Changes or Additions to TVA Interconnection Facilities), FP-2.4 (Changes to IPP Interconnection Facilities), and GP-7.1(b) (Insurance Requirements), each as specified in this Agreement as of the date of this Agreement; however, ordinary and routine operation and maintenance and damage repairs and replacements of the Interconnection Facilities specified in this Agreement as of the date of this Agreement are not subject to the dispute resolution procedures set forth in Section GP-10.13 (Independent Expert Process) or GP-10.14 (Future Changes) of this Agreement.

– TVA Act

means the Tennessee Valley Authority Act of 1933, as amended (16 U.S.C. §§ 831-831ee). – TVA-Installed Facilities

has the meaning set forth in Exhibit FA (Facilities Arrangements). – TVA-Owned Facilities

has the meaning set forth in Exhibit FA (Facilities Arrangements). – TVA Interconnection Facilities

means the Interconnection Project Facilities that are TVA-Owned Facilities as identified in column (j), under the “TVA Interconnection Facilities” category, of the Facilities Matrix and in Article FP-1 (TVA Interconnection Facilities).

– United States of America

means the federal government of the United States and its departments, agencies, and instrumentalities.

T______ FA‐1 Revision 4

EXHIBIT FA

FACILITIES ARRANGEMENTS

Section FA-1 - Reference to Additional Exhibits

This Exhibit FA references the table (“Facilities Matrix”) set out in Exhibit FM. The Facilities Matrix identifies (a) the TVA Interconnection Facilities, IPP Interconnection Facilities, and Network Upgrades (as such terms are defined in the Agreement), (b) the major facilities or equipment to be installed and work activities to be performed by the Parties under the Agreement, and (c) the responsibilities of each Party (where an “X” or a percentage is shown in the matrix columns) with respect to (i) initial installation of the facilities (or the performance of work), (ii) ownership of the facilities, (iii) operation and maintenance (abbreviated as “O&M” on the Facilities Matrix and further described elsewhere (including this Exhibit FA and Section FP-1.5 of Exhibit FP) in the Agreement) of the facilities during the term of the Agreement, (iv) cost reimbursement to TVA for initial installation or other work, (v) estimated cost of such reimbursement, (vi) whether or not the reimbursed amount (or a percentage thereof) will be eligible (as indicated in column (i) of the Facilities Matrix) for the transmission credit as provided under Section BA-8.3 (Credit for Transmission Charges), and (vii) cost reimbursement to TVA for O&M work. This Exhibit FA also references Exhibit FC and Exhibit FP. Exhibit FC is a facilities configuration sketch which depicts, at a very high level, the physical connection of certain major facilities of the Parties and identifies the Point of Interconnection between the TVA Interconnection Facilities and the IPP Interconnection Facilities. Exhibit FP, entitled “Facilities Provisions,” contains standard provisions that are generally applicable to the facilities provided and installed under this Exhibit FA.

Section FA-2 - Detailed Description of Work Scope Activities

It is recognized that the Facilities Matrix represents only a high-level summary of the facilities and work scope involved. Accordingly, appropriate drawings, contract exhibits, and project scoping materials should be consulted for more detailed description of the work scope activities and facilities involved. Such documents include, but are not limited to, the Specification Diagram, Communication Specification Diagram, and various work orders referenced in the Facilities Matrix.

Section FA-3 - Facilities Installed by IPP

The facilities to be installed (or the work to be performed) by IPP are referenced herein as “IPP- Installed Facilities” and are identified by an “X” in column (f) of the Facilities Matrix, together with an “X” in column (b), (c), or (d) to indicate the phase of the installation work, where the heading “E” in column (b) means “engineering,” “P” in column (c) means “procurement,” and “C” in column (d) means “construction.” Where IPP and TVA are responsible for different phases of the initial installation of the same facilities, the term “IPP-Installed Facilities” shall be deemed to apply only to that particular phase (or phases) of the work for which IPP is responsible. TVA shall have the right to review and coordinate the design and installation of IPP-Installed Facilities (and any future modification thereto) as set out in Article FP-5 (Review, Inspection, and Approval of Facilities) of Exhibit FP.


Section FA-4 - Facilities Installed by TVA The facilities to be installed (or the work to be performed) by TVA are referenced herein as “TVA- Installed Facilities” and are identified by an “X” in column (e) of the Facilities Matrix, together with an “X” in column (b), (c), or (d) to indicate the phase of the installation work, where the heading “E” in column (b) means “engineering,” “P” in column (c) means “procurement,” and “C” in column (d) means “construction.” Where TVA and IPP are responsible for different phases of the initial installation of the same facilities, the term “TVA-Installed Facilities” shall be deemed to apply only to that particular phase (or phases) of the work for which TVA is responsible. IPP shall have the right to review and coordinate the design and installation of TVA-Installed Facilities (and any future modification thereto) as set out in Article FP-5 (Review, Inspection, and Approval of Facilities) of Exhibit FP.

Section FA-5 - Facilities Owned by IPP

The facilities to be owned by IPP are referenced herein as “IPP-Owned Facilities” and are identified by an “X” in column (k) of the Facilities Matrix.

Section FA-6 - Facilities Owned by TVA

The facilities to be owned by TVA are referenced herein as “TVA-Owned Facilities” and are identified by an “X” in column (j) of the Facilities Matrix.

Section FA-7 - O&M of Facilities

TVA shall be responsible for the O&M of the facilities identified by an “X” in column (m) of the Facilities Matrix. IPP shall be responsible for the O&M of the facilities identified by an “X” in column (n) of the Facilities Matrix.

Section FA-8 - Billing and Payments for Initial Installation Work

Consistent with the applicable provisions of Article GP-1 (Billing and Payment) and Article GP-6 (Notices, Invoices, Payments) of the Agreement, IPP shall reimburse TVA for the actual costs (including applicable overheads) incurred for the initial installation work as identified by an “X” or a percentage in column (g) of the Facilities Matrix. Such costs shall include the costs of any necessary environmental reviews and the costs of acquiring all necessary land rights, including easements, rights of way, and rights of ingress and egress in, on, over, and across property owned or controlled by IPP and/or its affiliates. Such costs shall also include (a) the costs of removing or retiring existing facilities of TVA to accommodate the construction of Interconnection Project Facilities and (b) the costs for reviews, tests, and inspections performed by TVA associated with the Interconnection Project Facilities. These costs shall be offset by (i) the remaining book value of reusable materials and equipment and (ii) the salvage value of materials and equipment determined to be non-reusable by TVA.

TVA’s current estimated total reimbursable costs are indicated in column (h) toward the bottom of the Facilities Matrix. Exhibit FPS sets forth a schedule of monthly payments to be made by IPP to TVA based on this estimate. The monthly payments are determined from (i) the estimated costs, including applicable overheads, to be incurred by TVA, and (ii) the time periods during which TVA estimates that said costs will be incurred by TVA. TVA may, upon 30 Days advance written notice to IPP, issue a new Exhibit FPS as appropriate to reflect TVA's revised cash-flow projection or to adjust for budget discrepancies (due to previous overpayments or underpayments), in which case, the new Exhibit FPS shall become a part of this Agreement (as replacement for any earlier dated Exhibit FPS) at the end of the 30 Days’ notice period. On or before the first Business Day that occurs on or after the due date specified for each month in Exhibit FPS, IPP shall remit to TVA, by electronic transfer to an appropriate account designated by TVA, the monthly payment


for said month as shown on Exhibit FPS. In the event that TVA does not receive from IPP a monthly payment by the first Business Day of the Month on which such payment is due, TVA may, in its sole discretion, upon ten (10) Business Days prior written notice to IPP, stop performing any of the work reimbursable under this Section FA-8 (but only to the extent that such work is not covered by payments previously received from IPP) until payment is received by TVA or TVA is able to draw on the letter of credit or other such security as provided in Article GP-1 (Billing and Payment). Such nonpayment by IPP shall also be considered a Default by IPP in accordance with the provisions of paragraph (ii) of Section BA-1.2 (Default by IPP) at the expiration of the Notice Period therefor as set forth therein. Any stoppage of work by TVA shall also change the Scheduled Completion Date.

Upon completion of all work reimbursable under this Section FA-8, the Parties shall make a final adjustment (“Final Adjustment”) to correct for any overpayment or underpayment resulting from any difference between the actual payments and the actual costs, including applicable overheads, associated with all items identified in column (g) of the Facilities Matrix. The Final Adjustment shall also include all costs incurred by TVA and all payments made by IPP under any contractual arrangements (typically in the form of an interim agreement) the Parties may have entered into prior to execution of this Agreement to provide for TVA, at IPP’s expense, to proceed with certain work activities on behalf of IPP to expedite the work on the Interconnection Project Facilities. For the purposes of making the Final Adjustment, TVA shall endeavor to issue a final cost report within ninety (90) Days of the Interconnection Project Facilities Completion Date setting forth in reasonable detail TVA’s costs, IPP’s payments, and any difference between them referenced in this Section FA-8. If a correction is needed for underpayment, TVA shall invoice IPP in accordance with Section GP-1.1 (Invoices and Payment). If a correction is needed for overpayment, TVA shall issue a refund to IPP within twenty (20) Days of the issuance of the final cost report, with interest on the overpayment calculated at the rate specified in FERC's regulations at 18 CFR § 35.19a(a)(2)(iii) from the Interconnection Project Facilities Completion Date to the date the refund is issued.

Section FA-9 - Billing and Payments for O&M Work

Consistent with the applicable provisions of Article GP-1 (Billing and Payment), Article GP-6 (Notices, Invoices, Payments), and Section FP-1.6 (Service to Others), and except as otherwise provided below, IPP shall reimburse TVA for the actual costs (including applicable overheads) incurred for the O&M work as identified by an “X” or a percentage in column (o) of the Facilities Matrix. Such costs shall include the costs (including applicable overheads) of (a) routine and ordinary operation and maintenance (including ordinary repairs and/or replacements), (b) major repairs and/or replacements due to equipment failure or catastrophic damage (such as caused by a tornado or an ice storm), and (c) equipment replacements due to normal wear and tear. With respect to the major O&M work or costs associated with item (b), the costs shall be limited to the extent not covered by insurance, Federal or State emergency disaster relief measures, or equipment manufacturer warranty. Also, with respect to such major O&M work or costs, TVA shall exercise Commercially Reasonable efforts to (i) provide IPP an opportunity for input and/or consultation, including entertaining offers from IPP to undertake responsibility for the repair or replacement, and (ii) mitigate the costs by pursuing and exercising (at IPP’s expense) warranty rights (if any) from equipment manufacturers.

Notwithstanding anything in the above paragraph to the contrary, the Parties hereby agree to a “fixed fee” compensation to TVA for routine and ordinary O&M work for an initial period as follows: On or before the first Business Day of each month following the Initial Back Feed Date and continuing until the month of <<<month year>>>, IPP shall remit to TVA, by electronic transfer to an appropriate account designated by TVA, a monthly O&M payment in the amount of


$ as “fixed fee” compensation to TVA for the costs of routine and ordinary O&M work for that month. (For example, a “fixed fee” payment on July 1 (or June 30), 2002, would cover TVA’s routine and ordinary O&M work for the month of July 2002.)

After the “fixed fee” compensation (described above) has been discontinued following the month of <<<month year>>>, and without affecting the above-stated obligation of IPP to reimburse TVA for all actual O&M costs, including applicable overheads, the Parties agree to an estimated monthly payment method as set out below. On or before the first Business Day of each month starting with <<<month year>>>, IPP shall remit to TVA, by electronic transfer to an appropriate account designated by TVA, an estimated monthly O&M payment in an amount to be determined at that time to reasonably reflect TVA’s estimated costs of routine and ordinary O&M work (including applicable overheads). After the end of each TVA fiscal year (which currently starts with October 1 of a year and ends on September 30 of the following year), TVA shall make an annual true-up adjustment to correct for any overpayment or underpayment resulting from any difference between the actual payments and the actual costs, including applicable overheads, associated with all items identified in column (o) of the Facilities Matrix. (Depending upon the result of the true-up adjustment, TVA shall either invoice IPP for the net amount of underpayment or issue a refund for the net amount of overpayment.) IPP may request and TVA may from time to time, by written notice of at least 30 Days in advance, revise the estimated monthly O&M payment amount as appropriate to better reflect the actual costs (including applicable overheads) incurred for routine and ordinary O&M work.

TVA shall invoice IPP separately for the costs (including applicable overheads) of major repairs and/or replacements (such as due to equipment failure or catastrophic damage) as such costs are incurred.

Section FA-10 - Referenced Project Documentation

As indicated in Section FA-2 (Detailed Description of Work Scope Activities), detailed description of work scope activities and facilities is covered by various project scoping materials jointly developed by TVA and IPP as a result of the Facilities Study (including the Project Scoping Workshop), including work orders, Specification Diagram, Communication Specification Diagram, and other drawings or sketches. Such project scoping materials (“Referenced Project Documentation”) are to be held in the custody of TVA and IPP as indicated below and may be provided by one Party to the other (upon request) in hard copy format or computer electronic format. Each Party may, by written notice to the other Party, inform the other Party of a change in the custody of the Referenced Project Documentation.


TVA CUSTODY IPP CUSTODY (Name of Person)

Manager, Project Development (Title) Transmission (Organization) Transmission Engineering

Tennessee Valley Authority 1101 Market Street, Chattanooga, TN 37402-2801

(Address)

Telephone No: (423) 751- Telephone No:

The Parties agree that in order for project materials (including drawings or sketches) to be considered a part of the Referenced Project Documentation, such materials as prepared by one Party must (a) be submitted to the other Party for review, coordination, and approval consistent with Article FP-5 (Review, Inspection, and Approval of Facilities) of Exhibit FP and (b) be supported by documentation evidencing the consent between the Parties, preferably in the form of written communications between the Project Administrators as designated under Article BA-9 (Special Provisions or Clarifications). The Parties also recognize that in the future mutually acceptable changes to the Referenced Project Documentation may be necessary. To the extent that such changes are consistent with the scope and objective of the Facilities Study, such changes may be agreed upon between the Project Administrators and must be supported by documentation evidencing the consent of the Project Administrators to such changes.

Section FA-11, FA-12, etc. - XXX 161-kV Switching Station, YYY Transmission Line, etc

<<<add new sections and language as necessary or appropriate to address specific facilities arrangements between TVA & IPP. Examples: IPP to design, construct, and transfer to TVA a switching station or transmission line, IPP to reimburse TVA for costs of relocating a TVA line to accommodate IPP’s plant construction, or IPP to design and procure certain equipment (such as power circuit breakers) and furnish such equipment to TVA for installation and ownership as part of TVA Interconnection Facilities.>>>

Facilities Configuration (Ref IPP’s Contracting Entity))

Exhibit FC

to ??? (new 161-kV TL)

B A Point of

Interconnection &

D C Ownership Division at TVA’s Interchange

Meters G F E

Generating Units (3)

IMs IMs

to ??? (new 161-kV TL No. 2)

IPP’s ???

Switching Station

TVA ??? Switching Station

to ???

(new 161-kV TL No. 1) to ???

(new 161-kV TL)

Prepared by Dennis To, 9-14-01

Revision 4

Facilities Matrix EXHIBIT FM !!!Example Only!!! (Reference IPP Project)

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o)

Initial Installation O&M

Item Description of Major Facilities Phases Performed by Reimb. Est Cost Eligible Owned by Performed by Reimb. No. (see note at bottom re misc facilities and abbreviations) Ev E P C TVA IPP to TVA x $1,000 for TC TVA IPP TVA IPP to TVA Note/Comment

(Reimb)

TVA Interconnection Facilities - Project No. ??? (Ref Spec Diagram ???, Comm Spec Diagram ???)

A1 Design & Construct ??? 500-kV Switching Station X X X X X X X X

A2 TVA Switchhouse X X X X X X X X

A3 500-kV interchange metering installation X X X X X X X X

A4 Construct ??? Loop Line from ??? 500-kV TL (WO ???)

X X X X X X X

X X

A5 Protection & Controls Equipment at ??? 500-kV SS (WO ???) X X X X X X X X X

A6 Telecom Equipment at ??? 500-kV Switching Station (WO ???)

X X X X X X X

X X

A7 Telecom Equipment at System Operations Center (WO ???) X X X X X X X X X

A8 Telecom Equipment at Power System Control Center (WO ???) X X X X X X X X X

A9 Telecom Equipment at ??? MW Repeater Station (WO ???) X X X X X X X X X Install single-channel radio

A10 Other work activities (engr & procurement support) (WO ???) X X X X

IPP Interconnection Facilities (Ref Spec Diagram ???)

B1 ??? 500-kV Substation, including two 500-kV Circuit Breakers and extension bus

X X X X X X

X Substation is connected to TVA's ??? 500-kV Switching Station via IPP's extension bus.

B2

IPP Switchhouse

X X X X X X

X IPP to provide space, without cost to TVA, in switchhouse for installation and maintenance of TVA's facilities

B3 AC station service facilities (for TVA's and IPP's use) X X X X X X X to be provided at IPP‘s expense

B4 Station Service Metering Installations (two sets) X X X X X X X X Includes meters, meter cabinet, CT's, VT's

B5 Other communications equipment at IPP plant site (voice telephone extension, PBX equipment, facsimiles equipment)

X X X X X X X IPP also provides, without cost to TVA, telephone circuit for TVA's remote dial-up metering access

Network Upgrades - Project No. ???

C1 Uprate Terminal Equipment at ??? 500-kV Switchyard (WO ???)

X X X X X X X X

X

C2

Uprate Terminal Equipment at ??? 500-kV Switchyard (WO ???)

X X X X X X X X

X

C3

Install 300 MVAR of 161-kV Capacitors (WO ???)

X X X X X X X X

X

Estimated Total Reimbursable Costs: Notes : Each line item listed above as "Major Facilities" also includes various miscellaneous facilities and equipment (such as relays, switches, wiring, bus work, etc.) that are normally considered

an integral or incidental part of the installation. Also, appropriate drawings, contract exhibits, and project scoping materials should be referenced for detailed description of the work involved.

IPP = Independent Power Producer (i.e., ???, LLC), TC = Transmission Credit, Ev = environmental, E = engineering, P = procurement, C = construction, O&M = operation and maintenance

8/29/2001

Revision 4

T_____ FP‐1 Revision 4

EXHIBIT FP

2.6 FACILITIES PROVISIONS

Article FP-1 TVA Interconnection Facilities

Section FP-1.1 - Interconnection Point

Upon completion, testing, and acceptance of the Interconnection Project Facilities pursuant to this Agreement and subject to the other terms and conditions of this Agreement, TVA shall operate and maintain the TVA Interconnection Facilities in accordance with Good Utility Practice and shall accept electrical energy from the Facility at the Point of Interconnection up to the Facility Electrical Output for delivery to the TVA transmission system only (a) under the Facility Start-Up & Test Arrangement or (b) to the extent IPP or its Customer has obtained transmission service on the TVA transmission system consistent with Section BA-8.1 (Transmission of Facility Electrical Output). Upon its completion as provided in this Agreement, an interconnection point shall be established between TVA and IPP at the Point of Interconnection of the TVA Interconnection Facilities and IPP Interconnection Facilities as indicated on Exhibit FC.

Section FP-1.2 - TVA Interconnection Facilities

The TVA Interconnection Facilities and related work scope are identified in the Facilities Matrix, Exhibit FA (Facilities Arrangements), and other parts of this Agreement. As identified in the Facilities Matrix, Exhibit FA, and the Communication Specification Diagram mentioned in Section FA-2 (Detailed Description of Work Scope Activities), the TVA Interconnection Facilities include certain communication facilities at various locations on the TVA transmission system necessary for the interconnection of the Facility to the TVA transmission system.

Section FP-1.3 - Metering and Data Equipment (a) As provided in Exhibit FA (Facilities Arrangements) and the Facilities Matrix, TVA and IPP shall

provide data acquisition equipment, including meters and remote terminal units (“RTUs”), necessary to establish the Point of Interconnection and to measure the Facility Electrical Output. All such equipment shall be provided in conformity with Good Utility Practice and the standards and practices of TVA’s Control Area and in compliance with the applicable provisions of TVA’s “Revenue Metering Guide for Customer-Owned Substations.” IPP and TVA shall review the proposed arrangements and connections for the metering and other equipment to be installed pursuant to this Section FP-1.3 prior to installation to ensure conformity with such standards or practices. Upon request from IPP, TVA will allow IPP remote access to TVA's metering data through the use of the dial-up telephone circuit to the extent consistent with TVA’s standard policy. Such use of the telephone circuit and access to TVA's metering data must be coordinated with TVA to ensure unrestricted telephone access by TVA for data retrieval purposes during such periods as specified by TVA. In addition, if the TVA-Owned Facilities (as indicated by column (j) of the Facilities Matrix) include RTUs located at or adjacent to the Site, TVA shall, to the extent of equipment capability, make available to IPP meter data (including MW, MWh, MVAR, MVARh, breaker status, and volts) from ports on such RTUs. TVA makes no statement, representation, claim, guarantee, assurance, or warranty of any kind whatsoever, including representations or warranties, express or implied, (i) as to the accuracy or completeness of the metering data or as to such metering data’s fitness for any purposes for which IPP uses or will use it, or (ii) as to quantity, kind, character, quality, capacity, design, performance, compliance with specifications, conditions, size, description of any property, merchantability, or fitness for any use or purpose of any facilities through which the metering data is supplied. IPP waives, and releases the United States of America, TVA, and their agents and employees, from any and all claims, demands, or causes of action, including those for consequential damages, arising out of or in any way connected with IPP’s use of the metering data.


(b) Real-time telemetry shall be used to provide data to be received by TVA and IPP from the data acquisition equipment referred to above.

(c) The Parties agree that under normal circumstances the telemetered values received by TVA shall be

used for billing purposes. At any time the telemetering equipment is not functioning properly, the revenue meters shall be used for billing purposes.

(d) Each Party shall, at IPP’s expense, test its respective metering equipment provided under this

Section FP-1.3, including the meters and the RTUs, at least once a year. Representatives of TVA and IPP (and the Interconnected Neighboring Utility, if applicable) shall be afforded an opportunity to witness such test. The Party initiating such test shall provide at least ten (10) Days’ prior written notice of such test to the other Party. The results of such test shall be available to a requesting Party within fifteen (15) Days of a request for the same.

(e) Either Party shall, upon request of the other Party, make additional tests of any of the metering

equipment provided under this Section FP-1.3 to the extent practicable within three (3) Business Days of such request. Representatives of the requesting Party (and the Interconnected Neighboring Utility, if applicable) shall be afforded an opportunity to observe such tests. The cost of making such additional tests shall be paid by the requesting Party if such additional tests show that the measurements made with this metering equipment are accurate within one (1) percent (positive or negative).

(f) In the event any metering equipment used in the measurement of capacity and energy fails to register

or is found to be inaccurate by more than one (1) percent in the aggregate for all metering components, appropriate billing adjustments shall be made based on the best information available. If testing shows that the measurements made with any metering equipment are accurate within one (1) percent in the aggregate for all metering components (positive or negative), there shall be no correction of billing. If testing shows that the measurements made with any metering equipment are not accurate within one (1) percent in the aggregate for all metering components (positive or negative), any necessary corrective actions (including adjustments, repairs, or replacements) shall be made to the metering equipment at IPP’s expense as soon as practicable, unless such inaccuracy is solely due to TVA’s negligence or failure to properly maintain such metering equipment, in which case the necessary corrective actions shall be at TVA’s expense. TVA shall endeavor to coordinate such corrective actions with IPP so as to provide IPP an opportunity for input and/or consultation; however, failure by TVA to do so shall not relieve IPP of the payment obligation set out in the preceding sentence. Measurements previously taken shall be corrected for accounting and billing purposes according to the percentage of inaccuracy so found for any known or agreed upon period of inaccuracy; in the absence of any such knowledge or agreement, the adjustment shall be limited to one-half the period of time from the date of the last previous test of the meter and the most recent test but in no event shall the period covered by the correction exceed one hundred eighty (180) Days.

(g) Either Party, at its expense, shall have the right to install and maintain suitable metering equipment

for the purpose of checking the metering equipment operated and maintained by TVA hereunder.

Section FP-1.4 - Initial Installation of TVA Interconnection Facilities TVA shall perform the initial installation work identified in column (e) of the Facilities Matrix. Consistent with the applicable provisions of Article GP-1 (Billing and Payment) and Article GP-6 (Notices, Invoices, Payments), IPP shall reimburse TVA for all actual costs, including applicable overheads, that TVA incurs for the initial installation work identified in column (g) of the Facilities Matrix as provided in Section FA-8 (Billing and Payments for Initial Installation Work).


Section FP-1.5 - Operation and Maintenance of TVA Interconnection Facilities TVA shall perform the O&M work identified in column (m) of the Facilities Matrix. Consistent with the applicable provisions of Article GP-1 (Billing and Payment), Article GP-6 (Notices, Invoices, Payments), and Section FP-1.6 (Service to Others), IPP shall compensate TVA for the costs of O&M work identified in column (o) of the Facilities Matrix as provided in Section FA-9 (Billing and Payments for O&M Work).

Section FP-1.6 - Service to Others (a) Regardless of anything in this Agreement that might be construed to the contrary, TVA may use any

component of the TVA-Owned Facilities that are part of the TVA Interconnection Facilities for TVA’s own purposes (such as to serve TVA’s loads) or enable a third-party entity or entities (“Other Users”) to interconnect with the TVA transmission system, provided that such use does not unreasonably interfere with the use of such facilities component by IPP pursuant to this Agreement. To the extent that TVA or Other Users directly utilize such a facilities component (due to a specific need for new or additional capacity) to accomplish such purposes, IPP’s cost responsibilities shall be reduced as described in this Section FP-1.6 to the extent permitted by or not inconsistent with applicable laws, regulations, or final FERC orders. (TVA shall notify IPP and provide IPP an opportunity for input and consultation regarding such direct utilization.) For any month during which TVA or Other Users directly utilize such a facilities component, IPP’s cost responsibilities associated with that facilities component shall be reduced by a proportionate share so as to equitably reflect the degree of usage allocation to TVA or the Other Users. For O&M costs that do not involve replacement of an existing facilities component with a new facilities component, such cost reduction shall be based on (1) the depreciation on that facilities component for that month as determined based on TVA’s accounting records (which are maintained consistent with the FERC Uniform System of Accounts set out in 18 C.F.R. part 101) and (2) the O&M costs attributable to that facilities component for that month to the extent that such O&M costs are reimbursable by IPP under Section FP-1.5 (Operation and Maintenance of TVA Interconnection Facilities). For O&M costs that involve replacement of an existing facilities component with a new facilities component, such cost reduction to IPP shall not be based on the costs of the new facilities component but on (1) the remaining unamortized (or undepreciated) value of the existing facilities component that is equal to its remaining book value as determined at the time of removal based on TVA’s accounting records and (2) the costs of removal and disposal of the existing facilities component, as may be offset by (i) the remaining book value of reusable materials and equipment and (ii) the salvage value of materials and equipment determined to be non-reusable by TVA. Following such replacement, the cost of new facilities component shall be used as the basis for determining monthly depreciation referred to above. The following two examples illustrate the cost reduction concept described in this paragraph:

Example #1 - existing facilities component is not replaced

⇒ facilities component: power transformer & power circuit breakers ⇒ cost base: $2 million ⇒ annual depreciation: 2.4% of cost base, or $48,000 per year ⇒ monthly depreciation: $4,000 ⇒ monthly O&M expenditures: $3,000 ⇒ total monthly costs (depreciation plus O&M): $7,000 ⇒ directly utilized capacity allocation: IPP (50%), TVA (20%), Other Users (30%) ⇒ monthly cost reduction to IPP: $1,400 from TVA, $2,100 from Other Users

Example #2 - existing facilities component is replaced with new facilities component

⇒ facilities component: power circuit breaker ⇒ remaining unamortized value: $100,000 ⇒ removal & disposal costs: $40,000


⇒ credit allowance for reusable materials and equipment: $10,000 ⇒ credit allowance for salvage value: $2,000 ⇒ basis for replacement cost reduction: $100,000 + $40,000 - $10,000 - $2,000 =

$128,000 ⇒ directly utilized capacity allocation: IPP (50%), TVA (20%), Other Users (30%) ⇒ replacement cost reduction to IPP: $25,600 from TVA, $38,400 from Other Users

(b) The adjustments provided for in this Section FP-1.6 shall reduce IPP’s cost responsibilities. In no

event shall the adjustments referred to in this Section FP-1.6 result in any increase to IPP’s cost responsibilities except to the extent required by applicable laws, regulations, or final FERC orders.

Section FP-1.7 - Changes or Additions to TVA Interconnection Facilities

The Parties hereby recognize that during the term of this Agreement, circumstances may require changes or additions to the TVA Interconnection Facilities provided under this Article FP-1 (TVA Interconnection Facilities) to ensure the protection and continued safe and reliable operation of the TVA transmission system. When, in TVA’s reasonable judgment, changes or additions to the TVA Interconnection Facilities become necessary, or when IPP requests changes or additions that are determined to be acceptable to TVA, such changes or additions shall be made by TVA at the expense of IPP, Other Users, or any other generator or customer pursuant to Section FP-1.6; provided, however, such changes or additions shall be consistent with the Amendment Criteria and subject to Section GP-10.14 (Future Changes). Subject to the need to maintain safe and reliable operation of the TVA transmission system, which is of paramount importance, TVA shall give to IPP in writing not less than sixty (60) Days’ notice in advance and shall coordinate the timing of making such changes or additions with IPP in order to minimize any adverse impact on IPP as a result of such changes or additions. TVA shall invoice IPP on a monthly basis for the actual costs, including applicable overheads, that TVA incurs under this Section FP-1.7. The provisions of Article GP-1 (Billing and Payment) and Article GP-6 (Notices, Invoices, Payments) shall apply to invoices issued by TVA under this Section FP-1.7.

Section FP-1.8 - Standards

TVA shall cause the construction, operation, and maintenance of the TVA Interconnection Facilities to be consistent with the procedures, practices, and standards routinely employed by TVA with respect to the construction, operation, and maintenance of its own similar facilities, consistent with Good Utility Practice.

Section FP-1.9 - Facilities Retirement

If this Agreement terminates, other than by TVA’s Default, TVA may elect either (a) to maintain in place any component of the TVA Interconnection Facilities for which TVA is reimbursed by IPP pursuant to Section FP-1.4 (Initial Installation of TVA Interconnection Facilities) or IPP-Installed Facilities conveyed to TVA as TVA-Owned Facilities for the purposes set out under Section FP-1.6 (Service to Others) or (b) to retire such facilities component from service. If TVA elects to maintain such a facilities component in place, TVA shall pay IPP, or cause the entity or entities directly utilizing that facilities component (as set out under Section FP-1.6) to pay IPP, the residual value of that facilities component, which is equal to its remaining book value as determined at the time of termination based on TVA’s accounting records. It is understood that in no event shall the total payments to IPP for a facilities component under the preceding sentence and under Section FP-1.6 (Service to Others) exceed (a) the total reimbursable costs paid by IPP under Section FP-1.4 (Initial Installation of TVA Interconnection Facilities) for that facilities component if that component is part of TVA-Installed Facilities or (b) the total costs incurred by IPP for providing that facilities component if that component is part of IPP-Installed Facilities conveyed to TVA as TVA-Owned Facilities. If TVA elects to retire such a facilities component from service, IPP shall reimburse TVA for the costs, including applicable overheads, of retiring that facilities component. These costs


include the costs of removal, disposal, reconfiguring the TVA transmission system, and the applicable costs of abandoning associated land rights. These costs may be offset by (i) the remaining book value of reusable materials and equipment and (ii) the salvage value of materials and equipment determined to be non-reusable by TVA. TVA shall use Commercially Reasonable efforts to minimize cost to IPP. The obligations of the Parties under this paragraph shall survive any such termination until they are discharged. The examples below are illustrations of the concepts described in this paragraph:

Example #1 - Maintain Facilities in Place

⇒ facilities component: power transformer & power circuit breakers ⇒ cost base: $2 million ⇒ residual value (book value): $1.5 million ⇒ directly utilized capacity allocation: TVA (20%), entity #1 (30%), entity #2 (50%) ⇒ one-time payment to IPP: $300,000 from TVA, $450,000 from entity #1, $750,000

from entity #2

Example #2 - Retire Facilities from Service ⇒ facilities component: sections of 161-kV transmission line ⇒ removal & disposal costs: $300,000 ⇒ reconfiguration costs: $200,000 ⇒ land rights abandonment: $50,000 ⇒ credit allowance for reusable materials and equipment: $100,000 ⇒ credit allowance for salvage value: $20,000 ⇒ IPP’s reimbursement to TVA: $300,000 + $200,000 + $50,000 - $100,000 -

$20,000 = $430,000

Article FP-2 IPP Interconnection Facilities

Section FP-2.1 - IPP Interconnection Facilities

Upon completion, testing, and acceptance of the Interconnection Project Facilities pursuant to this Agreement and subject to the other terms and conditions of this Agreement, IPP shall operate and maintain the IPP Interconnection Facilities in accordance with Good Utility Practice so as to be able to deliver electrical energy from the Facility at the Point of Interconnection. Except as otherwise provided in this Agreement, IPP, at its expense, shall be responsible for designing, installing, owning, operating, and maintaining the IPP Interconnection Facilities.

Section FP-2.2 - Description of IPP Interconnection Facilities

The IPP Interconnection Facilities and related work scope are primarily identified in Exhibit FM (Facilities Matrix) and Exhibit FA (Facilities Arrangements). As part of the IPP Interconnection Facilities listed on the Facilities Matrix, IPP, at its expense, shall design, install, own, operate, and maintain equipment to provide to TVA the status of equipment (including any power circuit breakers, motor-operated disconnect switches, and breaker failure trip and lock-out relays) for the safe and reliable operation of the interconnection necessary under this Agreement.

Section FP-2.3 - Standards and Review (a) The IPP Interconnection Facilities shall meet standards of Good Utility Practice, shall be capable of

providing for the Facility’s continuous parallel operation with the TVA transmission system, and shall include one or more switching devices capable of disconnecting the Facility from the TVA transmission system as required under this Agreement. Said switching devices shall be capable of being operated manually, shall be lockable, and shall provide visual indication of an open circuit when so operated. The IPP Interconnection Facilities shall be capable of satisfactory coordination with any protective, monitoring, and control equipment installed by TVA, shall be consistent with the


Interconnection Criteria, and shall be reviewed and, if appropriate, accepted by TVA pursuant to Section FP-5.2 (Review, Inspection, and Approval by TVA).

(b) IPP shall obtain TVA’s review and approval of the technical specifications and design drawings for

the System Protection Facilities as set out under Section FP-5.2 (Review, Inspection, and Approval by TVA).

Section FP-2.4 - Changes to IPP Interconnection Facilities

During the term of this Agreement, IPP shall make or perform changes in or additions to the IPP Interconnection Facilities that TVA may from time to time determine to be reasonably necessary in light of changing conditions and requirements on the TVA transmission system and for the continued safe and reliable connection and operation of the Facility in parallel with the TVA transmission system. Any such changes or additions shall be limited to those changes or additions that are consistent with the Amendment Criteria and subject to Section GP-10.14 (Future Changes). IPP shall be given reasonable notice and adequate time to make any modifications or changes to its facilities and operations necessary to maintain compliance with such electric system safety and reliability requirements.

Section FP-2.5 - TVA’s Inspection and Acceptance

IPP shall obtain TVA’s inspection and acceptance of the IPP Interconnection Facilities as set out under Section FP-5.2 (Review, Inspection, and Approval by TVA).

Section FP-2.6 - Energizing IPP Interconnection Facilities

The IPP Interconnection Facilities shall not be energized until after compliance with the provisions of paragraph (c) of Section FP-5.2 (Review, Inspection, and Approval by TVA).

Section FP-2.7 - Operation and Maintenance

IPP shall operate and maintain the Facility and the IPP Interconnection Facilities, including the System Protection Facilities, in accordance with Good Utility Practice and the other provisions of this Agreement. Notwithstanding any other provision of this Agreement, the Parties recognize that IPP may contract with other entities for the operation and maintenance of the Facility and the IPP Interconnection Facilities. No such contract shall relieve IPP of its obligations under this Agreement. In the event of an Emergency, notwithstanding any other provision in this Agreement that may be construed to the contrary, IPP shall operate the Facility and the IPP Interconnection Facilities in a manner that TVA reasonably requests; provided, however, IPP shall not be obligated under this Section FP-2.7 to respond to a TVA request to start up an idle generating unit or increase the output of an operating generating unit at the Facility unless, prior to generating the energy, IPP and TVA agree on the compensation IPP is to receive from TVA for the energy to be generated by IPP at TVA’s request.

Article FP-3

Network Upgrades

Section FP-3.1 - Network Upgrades It is recognized that TVA shall perform work on the TVA transmission system to upgrade certain facilities owned by TVA or to install additional TVA facilities in conjunction with the establishment of the Point of Interconnection. The Network Upgrades and related work scope are primarily identified in Exhibit FM (Facilities Matrix) and Exhibit FA (Facilities Arrangements).


Section FP-3.2 - Cost of Network Upgrades TVA shall, at IPP’s expense, perform or cause to be performed the Network Upgrades as set out in Exhibit FA (Facilities Arrangements) and the Facilities Matrix. IPP shall pay TVA for all actual costs, including applicable overheads, incurred by TVA in connection with all phases of TVA’s design, construction, and installation of the Network Upgrades. Such costs include the costs of any necessary environmental reviews and the costs of acquiring all necessary land rights including easements, rights-of-way, and rights of ingress and egress in, on, over, and across property in the event the existing rights-of-way and land rights are not adequate for the upgrade. Such costs shall also include applicable retirement costs and costs for reviews, tests, and inspections performed by TVA associated with the Network Upgrades. Payments by IPP to TVA for costs incurred by TVA under this Section FP-3.2 shall be made in accordance with the provisions of Section FP-1.4 (Initial Installation of TVA Interconnection Facilities), with credits bestowed for all such costs in accordance with Section BA-8.3 (Credit for Transmission Charges).

Section FP-3.3 - Operation and Maintenance of the Network Upgrades

TVA shall, at its expense, operate and maintain the Network Upgrades as an integrated part of the TVA transmission system.

Section FP-3.4 - Service to Others

Regardless of anything in this Agreement that might be construed to the contrary, the Network Upgrades are considered to be a part of the integrated TVA transmission system and may therefore be used by TVA for serving TVA transmission customers as provided for in the Guidelines and by TVA for serving its wholesale and retail customers.

Section FP-3.5 - Standards

TVA shall cause the construction, operation, and maintenance of the Network Upgrades to be consistent with the procedures, practices, and standards routinely employed by TVA with respect to the construction, operation, and maintenance of its own similar facilities.

Section FP-3.6 - Synchronization Before Completion of Interconnection Project Facilities

If Initial Synchronization Date is to occur before Interconnection Project Facilities Completion Date, then during the period between Initial Synchronization Date and Interconnection Project Facilities Completion Date, the Facility Electrical Output can be safely and reliably delivered into the TVA transmission system only to the extent the TVA transmission system can accept such delivery and only (a) under the Facility Start-Up & Test Arrangement or (b) to the extent IPP or its Customer has obtained transmission service on the TVA transmission system consistent with Section BA-8.1 (Transmission of Facility Electrical Output).

Article FP-4

Design and Construction of Facilities

Section FP-4.1 - Design and Construction of IPP-Installed Facilities To the extent consistent with the objectives set out under Section FP-5.1 (Cooperation and Coordination), IPP-Installed Facilities shall be designed and constructed in accordance with Good Utility Practice and reviewed and approved by TVA in accordance with Section FP-5.2 (Review, Inspection, and Approval by TVA).


Section FP-4.2 - Design and Construction of TVA-Installed Facilities To the extent consistent with the objectives set out under Section FP-5.1 (Cooperation and Coordination), and subject to TVA’s right to suspend performance pursuant to Section FA-8 (Billing and Payments for Initial Installation Work) and Section GP-1.1 (Invoices and Payment), TVA- Installed Facilities shall be designed and constructed in accordance with Good Utility Practice and plans and specifications reviewed and coordinated with IPP. TVA shall notify IPP of any changes to the Scheduled Completion Date and shall provide IPP with a revised Scheduled Completion Date promptly upon TVA’s learning of any changes in the Scheduled Completion Date.

Section FP-4.3 - Compliance with TVA Wage Rate Provisions

If there are any IPP-Installed Facilities that are TVA-Owned Facilities as indicated on the Facilities Matrix, the following shall apply. The wage rates of laborers and mechanics employed by IPP and its contractors in constructing such facilities shall not be less than the prevailing rate of wages for work of a similar nature in the vicinity. IPP shall construct such facilities only through the employment of one or more contractors and shall cause the contractor(s) constructing such facilities, to the extent that TVA has so committed in the Construction Project Agreement, to become a signatory to the Construction Project Agreement (by executing the Contractor Signature Page) in constructing such facilities, including a pre-job meeting with the Tennessee Valley Trades and Labor Council as provided in the Construction Project Agreement. It is understood that by virtue of becoming a signatory to the Construction Project Agreement as provided above, such contractor(s) shall agree to abide by the terms and conditions of the Construction Project Agreement and applicable LRSs (Labor Relations Supplements), copies of which will be provided to said contractor(s), only insofar as such terms and conditions apply to the construction of such facilities. If IPP or its contractor(s) award a subcontract of less than one-hundred-thousand dollars ($100,000) or for specialty work, such subcontractor shall not be required to become a signatory to the Construction Project Agreement, but shall be required to comply with the terms and provisions of form TVA 1851 and its Exhibit A. The prevailing rates of wages provided in the Construction Project Agreement and form TVA 1851 Exhibit A will be amended from time to time.

Article FP-5

Review, Inspection, and Approval of Facilities

Section FP-5.1 - Cooperation and Coordination TVA and IPP shall cooperate with each other and coordinate completion of their respective work as required by this Agreement to support the scheduled startup, testing, completion, and readiness of the Facility as well as the O&M of TVA-Owned Facilities and IPP-Owned Facilities. The Parties acknowledge that the primary objectives of their coordination of efforts under this Agreement are to ensure (a) the timely and efficient completion of TVA-Installed Facilities and IPP-Installed Facilities that are part of the interface between the TVA Interconnection Facilities and the IPP Interconnection Facilities, (b) the safe, reliable, and efficient interfacing and operation of each Party’s facilities, (c) prevention of any undue hazards caused by one Party to the other Party’s facilities and operations or any adverse material impact on TVA’s ability to accept, and IPP’s ability to deliver, the output from the Facility, (d) prevention of any undue burden caused by one Party to the other Party’s budget planning for expenditures under this Agreement, and (e) prevention of delays caused by one Party to the other Party’s completion of work activities. Each Party will use reasonable diligence in carrying out its responsibilities regarding such coordination under this Agreement. Except as may otherwise be provided in this Agreement, neither Party shall be required to seek review and approval of the other Party on work activities or procedures (such as design, construction, planning, budgeting, testing and operating procedures) unless failure to do so would materially conflict with or jeopardize the objectives set out in (a) through (e) above. Each Party shall give reasonable notice regarding its schedule for construction of Interconnection Project Facilities (as indicated in the Facilities Matrix) to the other Party and shall notify the other Party promptly in the event that the schedule changes or deviates from the schedule set forth in the Facilities Study.


Section FP-5.2 - Review, Inspection, and Approval by TVA (a) To the extent consistent with the objectives set out under Section FP-5.1 (Cooperation and

Coordination), IPP shall provide to TVA, for TVA’s review, inspection, and acceptance, the technical specifications and design drawings for the IPP-Installed Facilities (including System Protection Facilities as part of IPP Interconnection Facilities) as are reasonably required to enable TVA to accommodate the electrical interconnection of such facilities to the TVA transmission system in accordance with Good Utility Practice and consistent with the Interconnection Criteria. IPP shall also submit, for TVA’s review and acceptance, a start-up and test schedule for the Facility at least thirty (30) Days prior to start-up and testing of the Facility and any TVA-Owned Facilities that are also IPP-Installed Facilities. All information and data must (i) be submitted in a manner reasonably acceptable to TVA consistent with Good Utility Practice and (ii) be completely submitted by IPP to TVA in a timeframe consistent with the schedule approved by the Parties at the Project Scoping Workshop or as mutually agreed by the Parties. (If TVA finds the materials to be incomplete, TVA shall notify and give IPP ten (10) Business Days to supply complete materials.) TVA shall inform IPP, in writing, whether said technical specifications and design drawings for such facilities are in accordance with Good Utility Practice and otherwise satisfy the requirements for interconnection specified in this Agreement within fifteen (15) Business Days of receiving such complete material. Any notice of disapproval shall contain an explanation of the reason for disapproval and a description of the modifications that would render the disapproved technical specifications or design drawings acceptable. If TVA determines that said technical specifications and design drawings do not satisfy such requirements, IPP shall make such corrections as necessary to meet TVA’s requirements. It is understood that TVA has the right to review the settings of IPP’s System Protection Facilities and require IPP to make changes to such settings consistent with Good Utility Practice.

(b) In the event of modifications proposed by IPP during the term of this Agreement to any IPP

Interconnection Facilities (including System Protection Facilities), or to any Facility equipment or specifications previously reviewed by TVA pursuant to the Interconnection System Impact Study, IPP shall supply to TVA, for review and written acceptance in advance of a modification, proposed technical specifications and design drawings for such modification. No modification shall be made prior to TVA’s acceptance. TVA shall make reasonable efforts to provide notice of acceptance or disapproval within sixty (60) Days of complete submittal by IPP, provided, however, if, in TVA’s sole judgment consistent with Good Utility Practice, a new interconnection system impact study is required as a result of the proposed modification by IPP or due to the complexity of a proposed modification (that may involve additional coordination with the Interconnected Neighboring Utility, if applicable), TVA may require additional time to provide its acceptance or disapproval. The technical specifications and design drawings shall be consistent with good engineering practice and shall specify the equipment to be used as to manufacturer, model, type, technical specifications, and other pertinent information. Otherwise, the review process shall be as provided in paragraph (a) above.

(c) As soon as reasonably practicable, but in no event more than twenty (20) Business Days after

notification from IPP that the IPP-Installed Facilities are installed and operational, TVA shall inspect the IPP-Installed Facilities to evaluate compliance with the provisions of this Agreement and for the protection and safety of TVA’s system and employees and TVA shall provide written acceptance or notice of defects. If a notice of defects is given, TVA, consistent with IPP’s request, shall reinspect the IPP-Installed Facilities as soon as reasonably practicable, but in no event more than twenty (20) Business Days after notification from IPP that the defects have been corrected, and provide written acceptance or another notice of defects. Such facilities shall not be energized until: (i) the written acceptance by TVA has been given, or (ii) IPP has corrected the material defects specified by TVA and TVA has inspected and given its written acceptance of the corrections, in either case as described in this paragraph.


(d) TVA’s review, inspection, and acceptance as provided above are provided only insofar as required for the safety and efficiency of TVA’s system and employees and shall not constitute a guarantee or warranty of (a) the IPP Interconnection Facilities (including System Protection Facilities) and subsequent modifications, or (b) the safety or adequacy of the IPP Interconnection Facilities and subsequent modifications for IPP’s purposes. TVA shall have no responsibility to IPP for damages, liabilities, costs, and expenses caused by IPP’s failure to install and maintain equipment to protect the Facility and IPP Interconnection Facilities from electrical faults and other electrical conditions on either side of the Point of Interconnection. IPP is responsible for designing and installing all equipment necessary to protect the Facility and the IPP Interconnection Facilities from electrical faults and other electrical conditions; provided, however, that if TVA fails to fulfill an obligation stated in another Section of this Agreement, this paragraph shall not limit IPP’s rights under Article GP-8 (Liability), or if TVA breaches another applicable legal obligation, IPP shall have such remedies as are available under applicable law. IPP, at its expense, may install such additional equipment as it deems necessary for the protection of its own property and operations.

(e) All work performed by TVA under this Article FP-5 shall be performed by TVA at IPP’s expense

(except as provided in Section FP-5.3 (Inspection Right of TVA) below). Any notice by TVA of acceptance of facilities and equipment (as safe and reliable for electrical operation) under this Section FP-5.2 may be given orally by the TVA Project Administrator designated in Article BA-9 (Special Provisions or Clarifications) but shall be confirmed in writing by the TVA Project Administrator within twenty (20) days after such oral notice is given to IPP.

Section FP-5.3 - Inspection Right of TVA

To the extent consistent with the objectives set out under Section FP-5.1 (Cooperation and Coordination), TVA shall have the right, but shall have no obligation or responsibility, to (i) monitor the start-up and testing of the Facility and any TVA-Owned Facilities that are also IPP-Installed Facilities, (ii) observe IPP's construction and installation of the Facility or any IPP-Installed Facilities to evaluate compliance with the provisions of this Agreement, (iii) observe IPP's tests and/or inspections of the Facility or any IPP-Installed Facilities; and (iv) review IPP's maintenance records relative to the Facility or any IPP-Installed Facilities. TVA may exercise its rights under this Section FP-5.3 from time to time (upon reasonable notice to IPP) as TVA deems necessary to assure compliance with the provisions of this Agreement. However, TVA’s exercise or non-exercise of any of these rights of observation, review, and inspection (including technical review and inspection of the Facility during the start-up and testing phase) shall be construed neither as an endorsement or confirmation of any aspect, feature, element, or condition of the Facility or any IPP-Installed Facilities or the operation thereof, nor as a warranty as to fitness, safety, desirability, or reliability of same. TVA shall also have the right to inspect, test, and monitor the operation of the Facility and the IPP Interconnection Facilities to establish whether the delivery of the Facility Electrical Output from IPP meets the requirements of Section BA-8.5 (Fluctuations or Disturbances on the TVA Transmission System Facilities); provided, however, that if such inspections, tests, and monitoring establish that the Facility and the IPP Interconnection Facilities are in compliance with such requirements, then such inspections, tests, and monitoring shall be at TVA’s expense. Except in an Emergency affecting the TVA transmission system, TVA shall endeavor (i) to conduct all tests and inspections of the Facility and the IPP Interconnection Facilities during mutually agreeable periods and (ii) unless otherwise agreed by the Parties, to notify IPP in writing at least ten (10) Business Days in advance of any proposed test or inspection. TVA shall use its best efforts to minimize disruption of IPP’s operations that might result from any such tests or inspections.


Section FP-5.4 - Inspection Right of IPP To the extent consistent with the objectives set out under Section FP-5.1 (Cooperation and Coordination), IPP shall have the right, but shall have no obligation or responsibility, to (i) observe TVA's construction and installation of the TVA-Installed Facilities to evaluate compliance with the provisions of this Agreement, (ii) observe TVA's tests and/or inspections of the TVA-Installed Facilities; and (iii) review TVA's maintenance records relative to the TVA-Installed Facilities. IPP may exercise its rights under this Section FP-5.4 from time to time (upon reasonable notice to TVA) as IPP deems necessary to assure compliance with the provisions of this Agreement. However, IPP’s exercise or non-exercise of any of these rights of observation, review, and inspection shall be construed neither as an endorsement or confirmation of any aspect, feature, element, or condition of the TVA-Installed Facilities or the operation thereof, nor as a warranty as to fitness, safety, desirability, or reliability of same. IPP is responsible for conducting whatever tests and inspections it deems appropriate for its own purposes.

Article FP-6

Property Rights and Licensing

Section FP-6.1 - Environmental Review and Licensing IPP shall, at its expense, be responsible for obtaining and maintaining all Federal, state, and local permits, licenses, and approvals that are necessary to construct, operate, maintain, and modify the Facility and the IPP-Installed Facilities (except as indicated below for IPP-Installed Facilities that are TVA-Owned Facilities). IPP shall also be responsible for the cost of completing all environmental reviews, analyses, and studies and any associated public review processes that are necessary for the permitting, licensing, and approval of the Facility and any IPP-Installed Facilities for which an “X” is indicated in column (a) of the Facilities Matrix. Likewise, TVA shall be responsible for all environmental reviews, analyses, and studies and any associated public review processes that are necessary for the permitting, licensing, and approval of any TVA-Installed Facilities for which an “X” is indicated in column (a) of the Facilities Matrix. For any IPP-Installed Facilities that are TVA- Owned Facilities (as indicated on the Facilities Matrix), (a) TVA shall endeavor to assist IPP in carrying out IPP’s obligations as set out in the first sentence above, and (b) upon IPP’s transfer of ownership to TVA, TVA shall, at IPP’s expense, be responsible for maintaining all Federal, state, and local permits, licenses, and approvals that are necessary for TVA to operate, maintain, and modify such transferred facilities. The Facility, IPP-Owned Facilities, and TVA-Owned Facilities shall meet all requirements of applicable safety and/or engineering codes, and further, shall meet all applicable legal requirements, including those of any duly constituted regulatory authority having jurisdiction over such facilities. TVA shall not have any responsibility whatsoever for obtaining any permits, licenses, or approvals necessary to construct, operate, alter, or maintain the Facility or any IPP- Owned Facilities, except that TVA shall make available, at IPP’s expense, necessary existing data requested by IPP to prepare applications for such permits, licenses, and approvals. All work performed by TVA under this Section FP-6.1 shall be at IPP’s expense.

Section FP-6.2 - Access to IPP’s Property

IPP shall provide TVA and its agents with free access to IPP’s property as TVA determines necessary and reasonable for TVA’s purposes under this Agreement, such as to operate, maintain, test, or repair TVA-Owned Facilities located on IPP’s property, or to monitor and conduct tests and inspections. All of TVA’s representatives entering upon IPP’s property shall at all times comply with IPP’s applicable safety and security procedures and drug and alcohol use and/or possession policies (to the extent that such procedures and policies have been communicated to TVA and do not violate procedures and policies applicable to TVA as a Federal agency). TVA shall use its best efforts to minimize disruption of IPP’s operations which might result from the presence of TVA’s employees on IPP’s property.


Section FP-6.3 - Access to TVA’s Property TVA shall provide IPP and its agents with free access to TVA’s property as IPP determines necessary and reasonable for IPP’s purposes under this Agreement, such as to operate, maintain, test, or repair IPP-Owned Facilities located on TVA’s property, or to monitor and conduct tests and inspections. All of IPP’s representatives entering upon TVA’s property shall at all times comply with TVA’s applicable safety and security procedures and drug and alcohol use and/or possession policies (to the extent that such procedures and policies have been communicated to IPP). IPP shall use its best efforts to minimize disruption of TVA’s operations which might result from the presence of IPP’s employees on TVA’s property.

Section FP-6.4 - Land Rights for TVA’s Facilities on IPP’s Property

If the TVA-Owned Facilities include substation, switching station, transmission line, or other facilities for which TVA needs additional land rights, for the purpose of providing land rights for the use, construction, operation, and maintenance of such facilities that extend over, into, or across the Site, IPP shall convey, or cause to be conveyed, to the United States of America, without cost to TVA or the United States of America, good and marketable title to such land rights as TVA deems necessary, together with such additional easements and rights-of-way, including rights of ingress and egress in, on, over, and across IPP’s property as TVA deems necessary or desirable, to permit the construction, operation, maintenance, and replacement of such facilities. All such land rights, easements, rights-of-way, and rights of ingress and egress shall be in a form acceptable to counsel for TVA and all shall be at mutually satisfactory locations on IPP’s property. TVA may at IPP’s expense obtain such additional land rights for these purposes as TVA deems necessary.

Section FP-6.5 - Land Rights for TVA’s Facilities Outside IPP’s Property

The TVA-Owned Facilities may include substation, switching station, transmission line, or other facilities for which TVA needs land rights in addition to those TVA has or will acquire at IPP’s expense as indicated elsewhere in this Agreement, including Exhibit FA (Facilities Arrangements), Section FP-6.4 of this Exhibit FP, and the Facilities Matrix. For the purpose of providing land rights for the use, construction, operation, and maintenance of such facilities, IPP shall convey, or cause to be conveyed, to the United States of America, without cost to TVA or the United States of America, good and marketable title to such land rights (in addition to those TVA has or will acquire at IPP’s expense) as TVA deems necessary, together with such additional easements and rights-of-way, including rights of ingress and egress, as TVA deems necessary or desirable, to permit the construction, operation, maintenance, and replacement of such facilities. All such land rights, easements, rights-of-way, and rights of ingress and egress shall be in a form acceptable to counsel for TVA and all shall be at mutually satisfactory locations. TVA may at IPP’s expense obtain such additional land rights for these purposes as TVA deems necessary.

Section FP-6.6 - Ownership Transfer to TVA of IPP-Installed Facilities

Except as may be expressly provided for otherwise in Exhibit FA (Facilities Arrangements), any IPP- Installed Facilities that are also TVA-Owned Facilities (as indicated on the Facilities Matrix) shall become TVA’s property upon written notice from TVA to IPP that such facilities have been inspected and approved by TVA as safe and reliable for electrical operation consistent with Good Utility Practice and Article FP-5 (Review, Inspection, and Approval of Facilities). If such facilities have defects that are unrelated to safe and reliable electrical operation, the notice of acceptance from TVA shall identify those defects (typically in the form of outstanding “punch list” items), and IPP shall correct them as soon as Commercially Reasonable after receipt of the notice. IPP shall assign to TVA all rights and warranties from the manufacturers, vendors, suppliers, or contractors for such facilities and for work or services associated with such facilities.

!!!Example Only!!!

Facilities Payment Schedule (Reference IPP Project)

(Effective October 2008)

EXHIBIT FPS

Contract Reference: Exhibit FM (Facilities Matrix) Section FA-8 (Billing and Payments for Initial Installation Work), Exhibit FA (Facilities Arrangements)

Payment to be made via electronic fund transfer by due date (i.e., no monthly invoices issued for estimated payments)

If due date is not a Business Day, payment will be due on the 1st Business Day following due date

Payment for Estimated Project Expenditures

Payment No. Due Date Project

Project Monthly Payment

Cumulative Payments

1 10/01/08 $500,000 $100,000 $600,000 $600,000

2 11/01/08 $300,000 $150,000 $450,000 $1,050,000

3 12/01/08 $500,000 $100,000 $600,000 $1,650,000

4 01/01/09 $250,000 $100,000 $350,000 $2,000,000

5 02/01/09 $500,000 $150,000 $650,000 $2,650,000

6 03/01/09 $700,000 $150,000 $850,000 $3,500,000

7 04/01/09 $500,000 $200,000 $700,000 $4,200,000

8 05/01/09 $400,000 $100,000 $500,000 $4,700,000

9 06/01/09 $500,000 $200,000 $700,000 $5,400,000

10 07/01/09 $500,000 $200,000 $700,000 $6,100,000

11 08/01/09 $700,000 $100,000 $800,000 $6,900,000

12 09/01/09 $700,000 $100,000 $800,000 $7,700,000

13 10/01/09 $250,000 $50,000 $300,000 $8,000,000

14 11/01/09 $250,000 $70,000 $320,000 $8,320,000

15 12/01/09 $350,000 $30,000 $380,000 $8,700,000

$6,900,000 $1,800,000 $8,700,000

Revision 4

T_____ GP‐1 Revision 4

EXHIBIT GP

GENERAL PROVISIONS

Article GP-1 Billing and Payment

Section GP-1.1 - Invoices and Payment (a) Except as otherwise provided herein, the Party owed any amount due under this Agreement

(the “Billing Party”) shall submit to the other Party (the “Billed Party”) an invoice, in writing, as soon as practicable after the end of each Month for amounts owed by the Billed Party to the Billing Party, including without limitation all O&M costs that are paid pursuant to Section FA-9 of Exhibit FA, whether by estimated monthly payment or otherwise (except as indicated in paragraph (e) of this Section). Upon request by the Billed Party, the Billing Party shall promptly provide reasonable supporting documentation for charges contained in an invoice. Subject to the remaining provisions of this Section GP-1.1, the Billed Party shall pay the invoice on or before the twentieth (20th) Day after the date of the invoice. If the due date falls on other than a Business Day, the payment shall be due on the next following Business Day. Such invoices and the corresponding payments shall contain the contract number that TVA assigns to this Agreement.

(b) If the Billed Party fails to pay the amount of the Billing Party’s invoice when due, the Billed

Party shall pay interest on the unpaid amount calculated at the rate specified in FERC's regulations at 18 CFR § 35.19a(a)(2)(iii). Interest shall be calculated from the date that the amount was due to the date on which the Billing Party receives payment. The Billing Party shall submit an invoice to the Billed Party for such added charge, which shall be due and payable upon receipt.

(c) Unless disputed in accordance with Section GP-1.1(d), and, if disputed, upon resolution of

the dispute, if the Billed Party fails to pay the amount due by the due date, the Billing Party shall have the right to delay or suspend the work or services being performed until after such payment failure has been satisfactorily resolved, provided that TVA shall notify IPP in writing at least ten (10) Business Days prior to delaying or suspending the work or services being performed by TVA under this Agreement (which notice must be sent via facsimile to the address specified in Article BA-9 (Special Provisions or Clarifications); provided, however, after such ten (10) Business Days’ notice period, TVA is authorized to draw on the letter of credit or other security provided in accordance with Article GP-9 (Security), and TVA shall not delay or suspend the work or services being performed, nor Curtail or Disconnect the Facility for non-payment, nor declare a Default to the extent it is able to draw on the letter of credit or other such security in an amount sufficient to cover the amount due. Nothing herein contained shall be construed as relieving the Billed Party of the obligation to pay the Billing Party for the work or services completed as of the date such work or services are delayed or suspended.

(d) The Billed Party must notify the Billing Party in writing of any portion of the invoice that the Billed Party disputes on or before twelve (12) months following the date of the invoice. The Billed Party shall advise the Billing Party in writing of the reasons for disputing all or a portion on the invoiced amount. In case any portion of any invoice is the subject of a bona fide dispute, the undisputed amount shall be payable when due as described in Section GP-1.1(a), and any disputed amount subsequently determined to be owed shall be paid


promptly after such determination, with interest at the rate specified in Section GP-1.1(b) from the date such amount would have been due in the absence of any dispute. Notwithstanding any other provision of this Agreement, neither Party shall have the right to delay or suspend the work or services being performed, nor Curtail or Disconnect the Facility for non-payment, nor declare a Default, as a result of a bona fide billing dispute which has been submitted for resolution under Section GP-10.14 (Future Changes), if applicable, or court of competent jurisdiction, or other dispute resolution mechanism in accordance with Section GP-10.12 (Agreement Administration).

(e) Notwithstanding the above paragraphs in this Article to the contrary, it is understood that

with respect to the estimated payments or “fixed fee” payments (if any) indicated in Exhibit FPS (Facilities Payment Schedule), Section FA-8 (Billing and Payments for Initial Installation Work), and Section FA-9 (Billing and Payments for O&M Work), (a) such payments shall be electronically remitted to TVA (without a need for TVA to issue invoices) by due dates specified in Exhibit FPS, Section FA-8, and Section FA-9, (b) TVA is authorized to draw on the letter of credit or other such security in accordance with Section 1.1(c) above for IPP’s failure to make such payments and (c) the “fixed fee” payments (if any) shall not be subject to Section 1.1(d) above.

Section GP-1.2 - Offset

Each Party reserves to itself all rights, set-offs, counterclaims, and other remedies and defenses (to the extent not expressly waived or denied in this Agreement) that it has or to which it may be entitled arising from or out of this Agreement. All obligations to pay in connection with or under this Agreement may be offset against each other, set-off, or recouped from other payments for amounts determined to be due and owing under this Agreement.

Section GP-1.3 – Audit Rights

Within twelve (12) months of receipt of an invoice or the Final Adjustment, in accordance with Section GP-5.3 (Records Generally), either Party shall have the right, at its expense, during normal business hours and upon prior reasonable notice to the other Party, to audit each other’s accounts and records pertaining to either Party’s performance and/or satisfaction of obligations arising under this Agreement with access to records of TVA’s contractors as provided in Section GP-5.3 (Records Generally). In the event an audit reveals an improper assignment or allocation of costs or an error in billing, the Parties will make appropriate adjustments (either offsets, refunds or additional payments) within thirty (30) Days, with interest at the rate specified in Section GP-1.1(b); provided, however, these audit rights shall not be used to challenge an agreed-upon “fixed fee” payment pursuant to Section FA-9 (Billing and Payments For O&M Work).

Section GP-1.4 – Payment Not A Waiver

Payment of invoices by a Party will not constitute a waiver of any rights or claims a Party may have to dispute an invoice or payment pursuant to the terms of this Agreement.


Article GP-2 Assignment

Section GP-2.1 - Assignment (a) This Agreement shall be binding upon and shall inure to the benefit of, and may be

performed by, the successors and assigns of the Parties, except that, no assignment, pledge, or other transfer of this Agreement by either Party shall operate to release the assignor, pledgor, or transferor from any of its obligations under this Agreement unless: (i) the other Party consents in writing to such assignment, pledge, or other transfer, and releases, in writing, the assignor, pledgor, or transferor from any of its obligations under this Agreement, which consent and release shall not be unreasonably withheld or delayed; (ii) the assignment, pledge, or other transfer is to an affiliate of the assignor, pledgor, or transferor and the assignee, pledgee, or transferee has assumed, in writing, all of the obligations of the assignor, pledgor, or transferor under this Agreement; or (iii) such assignment, pledge, or transfer is incident to a merger or consolidation with, or assignment, pledge, or transfer of all, or substantially all, of the assets of the assignor, pledgor, or transferor to another person, entity, political subdivision, or public corporation, including but not limited to an RTO, that will, as part of such succession, assume all of the obligations of the assignor, pledgor, or transferor under this Agreement. Any assignee, pledgee, or transferee of IPP under clauses (i), (ii), or (iii) of this Section GP-2.1 must demonstrate to TVA both financial capacity and operational and other technical capability at least equal to that of the assignor, pledgor, or transferor. Upon such a demonstration and upon IPP’s request, TVA shall promptly execute and deliver such instrument in a form reasonably acceptable to TVA evidencing TVA’s acknowledgment that the assignee, pledgee, or transferee has demonstrated such financial capacity and operational and other technical capability. IPP, without the need for consent from TVA, may also assign, pledge, or transfer its rights under this Agreement as security for the financing of the Facility; provided, however, that IPP’s rights and obligations (financial and otherwise) under this Agreement shall continue in their entirety in full force and effect as the rights and obligations of a principal and not as a surety. At IPP’s request TVA shall execute and deliver such consent to assignment and opinion of counsel as reasonably acceptable to TVA and as may be reasonably necessary to effect an assignment as security for the financing of the Facility; provided that no such assignment shall modify or amend, in any respect, any provision of this Agreement without the express written agreement of TVA. Except as provided above, neither Party may assign, pledge, or otherwise transfer its rights or obligations under this Agreement to any other entity without the consent of the other Party.

(b) Consistent with applicable laws, regulations of a Legal Authority, or final FERC orders,

TVA, without the need for consent from IPP, may also assign, pledge, or transfer to an RTO (or a similar organization) such of TVA’s rights under this Agreement as TVA finds necessary or desirable; provided that no such assignment shall modify or amend, in any respect, any provision of this Agreement (other than as provided in Section GP-10.14 (Future Changes)) without the express written agreement of IPP. Nothing herein shall be construed as limiting any rights a Party may have to oppose any such assignment, pledge, or transfer of assets or facilities before any Regulatory Authority having jurisdiction.


Article GP-3 Force Majeure

Section GP-3.1 - Force Majeure Excuse

Neither Party shall be responsible for, liable for, or deemed in Default of this Agreement for any delay or failure in the performance of its obligations under this Agreement (except for obligations to pay money, which shall not be excused due to Force Majeure) to the extent such delay or failure is due solely to circumstances beyond the reasonable control of the Party experiencing such delay or failure (such Party referred to herein as the “Non- Performing Party”), including acts of God; labor disturbance; extraordinarily severe weather conditions; war; riots; requirements, actions, or failures to act on the part of governmental authorities (not including TVA’s acting in its proprietary or commercial capacity) preventing or delaying performance; fire; damage to or breakdown of necessary facilities (such causes hereinafter called “Force Majeure”); provided that:

(i) The Non-Performing Party gives the other Party prompt notice as soon as

Commercially Reasonable of the Force Majeure event impacting performance, with written notice and reasonable details to be supplied within ten (10) Days further describing the particulars of the event; and

(ii) The suspension of performance is of no greater scope and of no longer duration than

is attributable to the Force Majeure; and

(iii) The Non-Performing Party uses all reasonable efforts to remedy its inability to perform; and

(iv) When the Non-Performing Party is able to resume performance of its obligations

under this Agreement, that Party shall give the other Party written notice to that effect; and

(v) The Force Majeure was not caused by or connected with the Non-Performing

Party’s negligent or intentional acts, errors, or omissions, or its failure to comply with any law, rule, regulation, order, or ordinance, or for its Default of this Agreement.

Section GP-3.2 - Records

Each Party shall retain for a period of five (5) years adequate records of events it claims under Section GP-3.1 as Force Majeure and of its efforts to remedy the effects of the Force Majeure and, on request, shall make those records available to the other Party, but may redact confidential information regarding costs, revenues, pricing, profit, or losses contained in those records that the disclosing Party can demonstrate is commercially sensitive and not relevant to the particular exercise of this right to the records.


Article GP-4 Governmental Jurisdiction and Authorization

Section GP-4.1 - Laws, Regulations, Orders, Approvals, and Permits

This Agreement is made subject to present and future applicable local, state, and Federal laws and to the regulations or orders of any Regulatory Authority having jurisdiction over the matters set forth herein. Performance under this Agreement is conditioned upon securing and retaining such local, state, or Federal approvals, grants, or permits and upon the satisfactory performance of all necessary environmental reviews as may from time to time be necessary with respect to such performance. Each Party shall use due diligence and good faith efforts to secure and retain all such approvals, grants, and permits within such time as shall permit it to perform all of its obligations under this Agreement.


Article GP-5 Records, Record Retention, And Confidentiality

Section GP-5.1 - Imaged Agreement

An original executed version of this Agreement or a notice or other communication given under this Agreement may be photocopied or stored electronically on computer-based media (the “Imaged Agreement”); provided a copy of the Imaged Agreement in the same medium is made available to the other Party. The Parties agree that the Imaged Agreement, if introduced as evidence on paper in any judicial, arbitration, mediation, dispute resolution, or administrative proceedings, shall be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in printed documentary form. Neither Party shall contest the admissibility of the Imaged Agreement under either the business records exception to the hearsay rule or the best evidence rule on the basis that the Imaged Agreement was not originated or maintained in printed documentary form; provided that the Party against whom the Imaged Agreement would be admitted has a reasonable opportunity to confirm that such Imaged Agreement accurately reflects the terms of this Agreement then in effect.

Section GP-5.2 - Confidentiality

A Party shall not disclose to any third party any information designated as proprietary or confidential that it receives from the other Party under the provisions of this Agreement (“Confidential Information”) except to comply with any applicable law, order, or regulation; provided, however, each Party shall notify the other Party in writing of any request or proceeding of which it is aware that may result in disclosure of Confidential Information. Each Party shall use reasonable efforts to prevent or limit the disclosure of Confidential Information consistent with its obligations with respect to such required disclosure. In response to any Freedom of Information Act (“FOIA”) request for information received from or relating to IPP and designated by IPP as proprietary or confidential, TVA will evaluate the requested information and determine the applicability of any FOIA exemptions. TVA further agrees to consult with and seek the views of IPP regarding the application of FOIA exemptions to information submitted by IPP, including, but not limited to, 5 U.S.C. § 552(b)(4). Pursuant to its responsibilities under the FOIA, TVA must make the final determination on whether the requested information is legally exempt from disclosure under the FOIA and will notify IPP accordingly in advance of release of any of the information. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation; provided, however, that all monetary damages shall be limited to actual direct damages. Notwithstanding the foregoing, a Party may disclose Confidential Information on a strict need-to-know basis to (a) the Party’s officers, directors, employees, affiliates, investors, consultants, lenders, counsel, or accountants, (b) the Site owner, (c) prospective buyers of the Facility Electrical Output, or (d) assignees permitted pursuant to Article GP-2 (Assignment) (but only as to the consideration of an assignment) who have agreed in writing to keep the Confidential Information confidential. The foregoing obligations of the receiving Party shall terminate if and when, but only to the extent that, the Confidential Information (i) is or shall become publicly known through no fault of the receiving Party, (ii) is in the receiving Party’s possession as supported by written records prior to receipt of the Confidential Information from the disclosing Party, or (iii) is disclosed to the receiving Party by a third party who is legally free to disclose the Confidential Information.


Section GP-5.3 - Records Generally Each Party shall keep complete and accurate records and all other data required for the proper administration of this Agreement (“Records”).

(a) All Records shall be maintained for a minimum of five (5) years, or as such time

period may be modified by the Operating Committee consistent with applicable laws and regulations, after their creation and for any additional period of time required of a Party by a Regulatory Authority.

(b) IPP shall maintain among its Records an accurate and up-to-date operating log at

the Facility of (i) real and reactive power production for each clock hour, (ii) changes in operating status, scheduled maintenance, and other outages of the Facility, and (iii) any unusual conditions found during inspections.

(c) Either Party, consistent with the other provisions of this Agreement, shall have the

right, at its own expense, to examine and inspect all Records insofar as may be necessary for the purpose of ascertaining the reasonableness and accuracy of all relevant data, estimates, statements, or charges submitted to it hereunder. Records that are Confidential Information shall be made available to the Party requesting the examination consistent with Section GP-5.2 (Confidentiality). Additionally, to the extent that TVA’s Records are insufficient, upon request by and at the expense of IPP, TVA will (in accord with TVA’s rights to audit its contractors) audit records of its contractors pertinent to this Agreement and allow IPP to accompany TVA on such requested audits. (TVA will attempt to schedule such audits to allow IPP payments to be rectified within a payment period for IPP.)


Article GP-6 Notices, Invoices, Payments

Section GP-6.1 - Notices

Except as otherwise expressly provided in other sections of this Agreement, any notice provided for in this Agreement must be in writing and is effective on the Business Day following the Day on which it is actually received in person by U.S. Mail, or by other nationally recognized delivery service, or by hand-delivery, or by facsimile transmission (unless it confirms a prior oral communication, in which case it shall be deemed effective on the Day received). Notices shall be sent to the addresses specified in Article BA-9 (Special Provisions or Clarifications).

Section GP-6.2 - Invoices

Unless the Parties agree in writing to other billing procedures, the Billing Party shall mail invoices to the Billed Party at the address specified in Article BA-9 (Special Provisions or Clarifications). (For accounting reference purposes, the invoices shall also reference the contract number assigned to this Agreement.)

Section GP-6.3 - Payments

Unless an alternate payment method has been agreed to by the Parties, (a) all payments to IPP as required under this Agreement shall be made by Automated Clearing House to an appropriate account designated by IPP, and (b) all payments to TVA as required under this Agreement shall be made by the FedWire transfer method to an appropriate account designated by TVA in accordance with the FedWire instructions specified in Article BA-9 (Special Provisions or Clarifications), with the amounts deemed received as of the date the electronic fund transfer to the recipient’s account is deemed effective.

Section GP-6.4 - Change

A Party may change the addresses for its notices or invoices, or its method for receiving payments by written notice to the other Party, which change shall be binding on the other Party no earlier than the third Business Day following the receipt of such notice of change.


Article GP-7 Insurance

Section GP-7.1 - Insurance Requirements (a) Without limiting any obligations or liabilities under this Agreement, IPP shall, at its expense,

provide and maintain or cause to be maintained in effect throughout the term of this Agreement the following policies of insurance:

(i) Workers Compensation insurance that complies with applicable laws;

(ii) Employers’ Liability Insurance with limits of at least one-hundred thousand dollars

($100,000); and

(iii) Commercial General Liability insurance with bodily injury and property damage combined single limits of at least five-million dollars ($5,000,000) per occurrence/annual aggregate. Such insurance shall include broad form property damage liability, personal injury liability, explosion and collapse hazard coverage, products/completed operations liability, contractual liability, and, where applicable, water-craft liability; and

(iv) Comprehensive Automobile Liability insurance with bodily injury and property

damage combined single limits of at least five-million dollars ($5,000,000) per occurrence covering vehicles owned, hired, or non-owned; and

(v) Umbrella Liability Insurance with a single limit of at least five-million dollars

($5,000,000) per occurrence/annual aggregate in excess of the limits of insurance provided in subsections (ii), (iii), and (iv) above.

(b) The insurance to be provided hereunder shall be written by reputable insurance companies

approved to do business in the State in which the Facility is located, and reasonably acceptable to TVA or rated A or better by A.M. Best Company or a mutually acceptable substitute rating agency. All policies of insurance shall provide TVA with thirty (30) Days’ prior written notice of cancellation or material adverse modification (except that notice of cancellation for nonpayment of premiums shall be ten (10) Days). Consistent with the Amendment Criteria and subject to Section GP-10.14, TVA may require IPP at any time to obtain and maintain increased minimum amounts of insurance coverage to the extent TVA reasonably believes such increased minimum amounts of insurance coverage are necessary in accordance with standard insurance industry practice to cover changes caused by inflation.


Section GP-7.2 - Umbrella Liability Policy, Change to Requirements The amounts of insurance required in Section GP-7.1 above may provide for Commercially Reasonable deductible amounts or self-retentions and may be satisfied by IPP purchasing or causing to be purchased primary coverage in the amounts specified or by buying a separate Umbrella Liability policy together with lower limit primary underlying coverage. The structure of the coverage is at IPP’s option, so long as the total amount of insurance meets TVA’s requirements. In the event that any insurance required under Section GP-7.1, or any insurance in a form required under Section GP-7.3 (Occurrence Form Policies) or Section GP-7.4 (Implementing Insurance Requirements), becomes unavailable on Commercially Reasonable terms and conditions, IPP may request and TVA shall consider a revision in such requirements as necessary to accommodate such change.

Section GP-7.3 - Occurrence Form Policies

The coverage requested in Section GP-7.1(a)(iii) above and any Umbrella coverage may be “occurrence” form policies or the AEGIS “claims-made” form coverage. In the event IPP has any other “claims-made” form coverage, any such “claims-made” insurance shall provide for a retroactive date and continuing “tail” coverage commencing not later than the effective date of this Agreement and such insurance shall be maintained by IPP, with a retroactive date not later than the retroactive date required above, for a minimum of three (3) years after the term of this Agreement.

Section GP-7.4 - Implementing Insurance Requirements

For all of the work under this Agreement related to the IPP Interconnection Facilities and the Facility, effective upon the execution of this Agreement, IPP’s Commercial General Liability, Automobile Liability, and Umbrella Liability policies shall provide that items (a) through (d) apply and IPP’s Employers’ Liability policy shall provide that item (d) applies.

(a) TVA, its directors, officers, and employees are additional Insureds as their interests

may appear.

(b) This insurance is primary to any other insurance.

(c) Cross liability coverage is provided through a Separation of Insureds clause, such that, except with respect to the Limits of Insurance, and any rights and duties specifically assigned in the Commercial General Liability Conditions of the policy to the first Named Insured, the insurance applies as if each Named Insured were the only Named Insured and separately to each insured against whom claims are made or suit is brought.

(d) Insurer waives all rights of subrogation against TVA, the United States of America

and their officers, directors, agents, and employees.

Section GP-7.5 - Evidence of Insurance IPP shall cause its insurers or agents to provide TVA with annual certificates of insurance evidencing the policies and endorsements listed above. Failure of TVA to receive certificates of insurance does not relieve IPP of the insurance requirements set forth herein. Failure to obtain the insurance coverage required by this Article GP-7 shall in no way relieve or limit IPP’s obligations and liabilities under other provisions of this Agreement.


Article GP-8 Liability

Section GP-8.1 - Indemnification

IPP agrees to fully indemnify and hold TVA and its Persons Indemnified harmless from and against any and all claims, demands, liability, losses, damages (including direct, indirect, incidental, consequential, exemplary, special, statutory, or punitive damages), costs, or expenses (including attorney’s fees and other costs of defense), of any nature or kind whatsoever, asserted by third parties, arising out of or otherwise resulting from the use, ownership, maintenance, or operation of the Facility or the IPP-Owned Facilities, including claims, demands, and liability for personal injury to (including death of) any person whomsoever (including payments and awards made to IPP’s employees or others under any worker’s compensation law or under any plan for employees’ disability and death benefits) and for damage to any property whatsoever (including the Facility, the Interconnection Project Facilities, and TVA’s system) regardless of whether such claims, demands, or liability are alleged to have been contributed to or caused in part by the negligence of TVA, its directors, officers, agents, contractors, or employees or to have arisen out of TVA’s status as the owner or operator of its facilities; provided, however, that the provisions of this Section GP-8.1 shall not apply to the extent any such personal injury or property damage is caused by the sole negligence or willful misconduct of TVA or its Persons Indemnified.

Section GP-8.2 - Damages

Each Party shall be liable to the other Party for all direct or compensatory damages arising from the Party’s breach of an obligation imposed upon it by this Agreement. Except for the lost opportunity costs expressly provided for in Section BA-6.5(b) of this Agreement, and notwithstanding anything in this Agreement that may be construed to the contrary, neither Party shall be liable in contract, in warranty (express or implied), in tort (including negligence and strict liability), under any statute, or otherwise to the other Party or Persons Indemnified for any indirect, incidental, consequential, exemplary, special, statutory, penal, or punitive damages resulting from either Party’s performance or non-performance of an obligation imposed on it by this Agreement.

Section GP-8.3 - Consent

TVA and its Persons Indemnified shall not consent to entry of any judgment, agree to any settlement, nor make any admission of liability, relating to any claim, demand, liability, loss, damage, cost, or expenses upon which any assertion for indemnification is based without the consent of IPP.


Section GP-8.4 - Control of Indemnification If any third party shall notify TVA or any of its Persons Indemnified (the “Indemnitee”) of a claim with respect to any matter which may give rise to a claim for indemnification against IPP under this Article, then the Indemnitee shall notify IPP thereof promptly (and in any event within ten (10) Business Days after receiving any written notice of such a claim from a third party). IPP’s liability hereunder to the Indemnitee shall be reduced to the extent IPP is materially adversely prejudiced by the failure of the Indemnitee to provide timely notice hereunder. In the event IPP notifies the Indemnitee that IPP is assuming the defense thereof, IPP shall have the right to specify in this notice (i) that IPP will defend the Indemnitee against the matter with counsel of its choice, reasonably satisfactory to the Indemnitee, (ii) the Indemnitee may retain separate co-counsel at its sole cost and expense, (iii) the Indemnitee will not consent to the entry of any judgment or enter into any settlement with respect to the matter without the written consent of IPP (which shall not be unreasonably withheld or delayed), and (iv) IPP will not consent to the entry of any judgment with respect to the matter, or enter into any settlement which does not include a provision whereby the plaintiff or claimant in the matter releases the Indemnitee from all liability with respect thereto, without the written consent of the Indemnitee (which shall not be unreasonably withheld or delayed). In the event IPP does not notify the Indemnitee within ten (10) Business Days after the Indemnitee has given notice of the matter that IPP is assuming the defense thereof, however, the Indemnitee may defend against the matter in any manner it may deem appropriate.


Article GP-9 Security

Section GP-9.1 - Agreement Security

IPP shall provide to TVA security as specified below for compliance with the provisions of this Agreement in the form of an unconditional and irrevocable direct pay letter of credit (“Security”) issued by a financial institution reasonably acceptable to TVA and substantially in the form of Attachment 1 (Form of Letter of Credit) to this Exhibit GP or otherwise in form and substance reasonably acceptable to TVA.

Section GP-9.2 - Security Amount and Duration

No later than the date of this Agreement, IPP shall provide TVA Security (“Construction Security”) in the amount specified in Article BA-9 (Special Provisions or Clarifications), and IPP shall maintain the Construction Security in its entirety until the Interconnection Project Facilities Completion Date. At the Interconnection Project Facilities Completion Date, TVA shall release IPP from its Construction Security obligation, and IPP shall provide TVA Security (“Continuing Security”) in the amount specified in Article BA-9 (Special Provisions or Clarifications). IPP shall maintain the Continuing Security in its entirety until IPP has fulfilled all its obligations under this Agreement (e.g., until such time as the Facility is decommissioned, the TVA transmission system is returned to an operating configuration acceptable to TVA, and IPP has paid TVA for all outstanding amounts due TVA). Upon any draw of the Continuing Security, unless otherwise agreed to by TVA, IPP shall replenish the amount of such draw within twenty (20) Days. Consistent with the Amendment Criteria and subject to Section GP-10.14, TVA may require IPP at any time to increase the amount of Security specified in Article BA-9 (Special Provisions or Clarifications) to the extent TVA reasonably believes such increased amount of Security is necessary in accordance with standard practice to cover changes, including those caused by inflation. If any Security provided has an expiration date that may occur prior to the date for release of the Security, IPP shall provide TVA, at least thirty (30) Days prior to such expiration date, either (i) a replacement Security meeting the requirements of this Article GP-9 for a period of no less than one (1) year, or (ii) an amendment to such Security extending the term thereof for a minimum of one (1) year. In the event IPP fails to provide such substitute or amendment at least ten (10) Days prior to such expiration date, TVA shall be entitled to draw upon the Security in full and hold the cash balance thereof as cash security. TVA may draw on the Security provided by IPP under this Article GP-9 to offset costs TVA incurs as a result of IPP’s failure to perform its obligations under this Agreement.

Section GP-9.3 - Acceptable Financial Institution

A financial institution acceptable to TVA must:

(a) have a long-term debt rating by Standard and Poor’s of A- or better or by Moody’s Investors Service of A3 or better and

(b) be domiciled in the United States.


Article GP-10 Miscellaneous

Section GP-10.1 - Entirety

This Agreement, including the Exhibits attached hereto which are incorporated by reference as if fully set forth herein, constitute the entire agreement between the Parties relating to the subject matter contemplated by this Agreement. There are no prior or contemporaneous agreements or representations (whether oral or written) affecting said subject matter other than those herein expressed. Except as provided in Section GP-10.14, an amendment or modification to this Agreement shall be enforceable only if reduced to writing and executed by both Parties; provided, however, that in no event may the operating arrangements, including the Operating Procedures developed pursuant to Section BA-6.4 (Operating Committee), amend this Agreement. In the event of any conflict between the operating arrangements, including the Operating Procedures, and this Agreement, this Agreement shall control.

Section GP-10.2 - Interpretation

Unless otherwise expressly stated herein, references in this Agreement to “Articles” and “Sections” are to Articles and Sections of this Agreement, and references to “Exhibits” are to the Exhibits attached to this Agreement. All references to “Sections” in the Exhibits to this Agreement are to the Section in the Exhibit in which they appear unless otherwise noted. Headings as found in this Agreement are used solely for convenience in locating particular provisions and do not constitute a part of this Agreement, nor should they be used to aid in any manner in the construction of the Agreement. Words defined in the singular have the corresponding meaning in the plural and vice versa. Use of “including” means including without limitation. Use of “dollars” or the symbol “$” means U.S. dollars. References to one gender include all others. Any capitalized terms used in the Exhibits to this Agreement that are not specifically defined in such Exhibits shall have the meanings ascribed to them in this Agreement. Such Exhibits shall constitute a material part of this Agreement and the provisions of such Exhibits shall be interpreted and enforced as if such provisions were directly set forth in this Agreement.

Section GP-10.3 - Governing Law and Choice of Forum

This Agreement and the rights and duties of the Parties relating to this Agreement shall be governed by and construed in accordance with the Federal laws of the United States of America, without regard to the laws requiring the application of the laws of another jurisdiction. Except with respect to matters that may be brought before a regulatory agency having jurisdiction thereof, any action arising out of this Agreement or the Parties’ rights and duties under it shall be brought only in the United States District Court for the Eastern District of Tennessee at Knoxville if said court has jurisdiction of the subject matter. Each Party submits itself to the personal jurisdiction of said court. To the extent that the United States District Court for the Eastern District of Tennessee at Knoxville does not have jurisdiction of the subject matter, then the matter may be brought in any court of competent jurisdiction. The Parties agree that in any such action each will waive any right it may have to a trial by jury.


Section GP-10.4 - Creates No Special Relationship This Agreement shall not be construed to create an association, joint venture, partnership, or other legal entity between the Parties or to impose any partnership obligation or partnership liability upon either Party. Neither Party shall have any right, power, or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or representative of the other Party.

Section GP-10.5 - Joint Preparation of Agreement

This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission, or other event of negotiation, drafting, or execution hereof.

Section GP-10.6 - Non-Waiver

A waiver by either Party of any one or more Defaults or other noncompliance with this Agreement by the other Party in the course of performance of any of the provisions of this Agreement shall not be construed as a waiver of any other Default or other noncompliance with this Agreement, whether of a like kind or different nature.

Section GP-10.7 - Counterparts

This Agreement may be executed in several counterparts, each of which shall be considered an original and all of which shall constitute but one and the same instrument.

Section GP-10.8 - Standards (a) Unless expressly provided otherwise in the specific provisions of this Agreement, TVA and

IPP shall exercise all rights and discharge all obligations under this Agreement in good faith, in a prudent and Commercially Reasonable manner and in accordance with Good Utility Practice and applicable laws and regulations.

(b) In exercising its rights and discharging its obligations under this Agreement, TVA shall not

unfairly discriminate against IPP and shall treat IPP in a manner comparable to TVA’s treatment of TVA’s own generating facilities in all aspects of providing interconnection service; TVA (1) shall treat IPP no less favorably than TVA treats similarly situated power generators and generating facilities that are interconnected to the TVA transmission system and (2) shall impose on IPP no obligations or conditions that TVA does not also impose on other similarly situated power generators and generating facilities interconnected to the TVA transmission system.

(c) Any exercise by either Party of any right of approval, inspection, or review or other

provisions requiring consent, or mutual agreement under this Agreement shall not be unreasonably withheld or delayed and the exercise by either Party of sole judgment or discretion under this Agreement shall not be arbitrary, capricious, unreasonably discriminatory, or unreasonably delayed.

Section GP-10.9 - No Third Party Benefits

(a) Nothing in this Agreement, express or implied, shall be construed to create rights in, or to grant remedies to, or delegate any duty, obligation, or undertaking established herein to any third party as a beneficiary to this Agreement.

(b) Notwithstanding the foregoing, however, this Section GP-10.9 shall not limit IPP’s ability under Section GP-2.1 to assign, pledge, or transfer its rights under this Agreement as security for the financing of the Facility.


Section GP-10.10 - Power and Authority

Each Party represents and warrants that (i) it has the necessary power and authority to execute this Agreement; (ii) it has the power and authority to enter into and perform its obligations under this Agreement; (iii) the signatory to this Agreement has been duly authorized to execute this Agreement; and (iv) entering into and performing this Agreement does not violate or conflict with its charter, bylaws, other governing documents, licenses, consents, regulatory approvals, any applicable law, any applicable order or judgment of any court or other agency of government, or any agreement to which it is a party.

Section GP-10.11 - Designation of Project Administrators

The Project Administrators for this Agreement are designated in Article BA-9 (Special Provisions or Clarifications). Each Party may, by written notice to the other Party in accordance with Section GP-6.1 (Notices), at any time designate a new Project Administrator to act on its behalf under this Agreement. Subject to the provisions of this Agreement and any applicable law, the Project Administrators shall be authorized to coordinate all work activities (including work plan, design changes, procedures, or processes) for this Agreement as well as to agree upon such incidental administrative arrangements as are appropriate for the efficient and expeditious implementation of this Agreement.

Section GP-10.12 - Agreement Administration

Should any question, disagreement, or need for clarification or interpretation about this Agreement arise, the Parties agree to use their best efforts to resolve such matters informally at the lowest possible levels of decision making. Such matters not resolved at the working level within a 60-day period shall be referred to higher levels of management of both IPP and TVA for consideration, as necessary. The Parties further agree to develop and use consensual alternative dispute resolution processes, such as mediation and facilitation, whenever necessary and appropriate. This Section GP-10.12 is not a “Disputes” clause within the meaning of the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613 (“CDA”), and this Agreement is not subject to the provisions of the CDA.

Section GP-10.13 - Independent Expert Process (a) If the Parties are unable to resolve a Technical Dispute by discussion, then the Parties shall

refer such Technical Dispute to an Independent Expert for final resolution of the Technical Dispute under the Amendment Criteria, or the Parties shall waive in writing use of this Independent Expert process. If the Independent Expert is a Regulatory Authority the Parties shall use the Regulatory Authority procedures for resolving the Technical Dispute in place of the Independent Expert process that follows in this Section GP-10.13.

(b) The Party raising the Technical Dispute (the Disputing Party) shall initiate submission of a Technical Dispute to an Independent Expert by providing the other Party with written notice and nominating a person to serve as the Independent Expert. The other Party shall respond within 15 Business Days of such notice, notifying the Disputing Party whether such person is acceptable. If the other Party does not agree to the proposed Independent Expert, the Parties shall meet to try to identify an Independent Expert acceptable to each Party within a further 10 Business Days. If the Parties are unable to agree, then the other Party shall nominate a person to serve as an Independent Expert, and the two nominated experts shall meet and agree upon a third person, who shall be the Independent Expert.


(c) Within five Business Days of the final selection of the Independent Expert, the Disputing Party shall submit to the Independent Expert and to the other Party written materials including a description of the Technical Dispute and the basis therefor, a statement of the Disputing Party’s position and any documentation or other materials in support of such position. Within a further five Business Days of such submission by the Disputing Party, the other Party may submit to the Independent Expert and to the Disputing Party a description of the Technical Dispute, a statement of the other Party’s position with regard to the Technical Dispute and any documentation or other materials in support of such position. Each Party shall designate a representative to be available to the Independent Expert to answer questions and provide further information requested by the Independent Expert.

(d) The Independent Expert shall be authorized only to interpret and apply the provisions of this Agreement to the Technical Dispute and in providing its decision shall have no power to modify or change this Agreement in any manner or apply standards not provided for in this Agreement.

(e) The Independent Expert shall be requested to provide a decision on the Technical Dispute within 30 days after submission of materials by the other Party in accordance with Section GP-10.13(c), unless the Independent Expert determines that additional time is required in order to give adequate consideration to the Technical Dispute, which additional time shall in no event be more than a further 30 days.

(f) Other than to the extent provided in Section GP-10.14(a), unless the Parties otherwise agree in writing, the decision by the Independent Expert with regard to the Technical Dispute shall be final and binding on the Parties. The Parties shall each pay half of the cost of such Independent Expert resolution.

Section GP 10.14 – Future Changes

(a) Either Party may propose one or more amendments to this Agreement consistent with the Amendment Criteria to address (i) a change specifically provided for under this Agreement or (ii) a material adverse effect on the continued safe and reliable interconnection of the Facility to the TVA transmission system arising out of the then current provisions of this Agreement. Any such amendment shall be treated under the laws and regulations of Legal Authorities applicable at the time it is proposed, including the cost responsibility of the Parties imposed by the amendment. If, despite the Parties’ good faith negotiations, the Parties have not executed such an amendment within sixty (60) days after the proposing Party first provides a copy of the proposed amendment in writing to the other Party, then, after the expiration of said sixty (60) day period, the Parties shall use or shall waive in writing use of the dispute resolution procedures in Section GP-10.12. If the Parties have not agreed upon the amendment within thirty (30) days of referral to higher management under Section GP-10.12, and if the amendment proposed has resulted in a Technical Dispute, then either Party may initiate use of the Independent Expert process in accordance with Section GP-10.13. If a dispute over an amendment is not resolved by mutual agreement of the Parties, use of the dispute resolution procedures set out in Section GP-10.12 or the final decision of the Independent Expert pursuant to Section GP-10.13, then either Party shall have the right to file suit with respect to such dispute in the United States District Court for the Eastern District of Tennessee in Knoxville; provided, however, that the Parties agree that in the event that a Regulatory Authority (including FERC) clearly has jurisdiction over the matter involved in the amendment, either Party may petition or appeal to such Regulatory Authority, and the Parties agree to support and advocate implementation of an expedited process (including an alternative dispute resolution or similar process) on a schedule that would produce a determination by the Regulatory Authority within six (6) months; and provided further that the decision of the Independent Expert pursuant to Section GP-10.13


shall be final and binding on the Parties and such decision on the Technical Dispute matter shall not be subject to petition or appeal to a court or Regulatory Authority, except where the decision of the Independent Expert is materially inconsistent with Section GP-10.13. (For example, if the Independent Expert decides that three new circuit breakers are needed, the need for these breakers is not appealable to the Regulatory Authority, but the Parties’ cost responsibility for these breakers is appealable.) If a Party exercises its rights pursuant to this Section GP-10.14, the proposed amendment will not go into effect until a final, non- appealable ruling by the court or Regulatory Authority as provided in this Section GP-10.14. (It is recognized that there may be cases where a Change might result only in a dispute regarding assignment of cost responsibilities, but not a Technical Dispute (that necessitates use of the Independent Expert process as indicated above). In such cases, either Party may exercise its right to petition or appeal to a court or Regulatory Authority (as set out above) without a need to go through the Independent Expert process. It is further recognized that there may be cases where a Change might result in both a Technical Dispute as to the degree or scope (but not the necessity) of the Change and a dispute regarding assignment of cost responsibilities. In such cases, either Party may elect to pursue the dispute resolution for either matter (Technical Dispute or cost assignment) separately from and independent of each other. For the avoidance of doubt, the Parties agree that it is not necessary for a final decision of the Independent Expert to have been rendered prior to a Party initiating a proceeding under this Section 10.14(a).)

(b) The Parties have agreed upon the terms of this Agreement, and neither Party shall file a request seeking unilateral modification of the terms and conditions of this Agreement with a Regulatory Authority having jurisdiction in the matter, other than as provided in Section GP-10.14(a), unless there has been a Change in Legal Requirements. If a Change in Legal Requirements takes place, the Parties shall meet as soon as practicable to meet the implementation schedule for and amend this Agreement to reflect such Change in Legal Requirements, but in no event later than sixty (60) days after one Party notifies the other of the Change in Legal Requirements. The Parties will negotiate in good faith such amendments to this Agreement or such other appropriate actions as are necessary to implement the Change in Legal Requirements and to put the Parties in as nearly the same position as they would have been under this Agreement had the Change in Legal Requirements not occurred.

(c) If, within one hundred twenty (120) Days after this notification of a Change in Legal Requirements, the Parties (i) are unable to reach agreement on the amendments (if any) to this Agreement necessary to implement the Change in Legal Requirements and (ii) fail to take other appropriate actions so as to put the Parties in as nearly the same position as they would have been under this Agreement had the Change in Legal Requirements not occurred, then (A) the Parties shall continue to perform under this Agreement to the maximum extent possible, taking all reasonable steps to mitigate any adverse effect on each other resulting from the Change in Legal Requirements and (B) nothing in this Agreement shall restrict the rights of either Party to file a request for an order or other relief from a Regulatory Authority having clear jurisdiction of the matter related to the Change in Legal Requirements or the United States District Court for the Eastern District of Tennessee in Knoxville if there is no such Regulatory Authority with jurisdiction. Notwithstanding this provision, neither Party is waiving the right to challenge the authority of any Regulatory Authority to which any such request for order or relief is made.


(d) Notwithstanding that a Change in Legal Requirements or any other change pursuant to an amendment under this Section GP-10.14 (either a “Change”) may require a change, addition, or modification to the Interconnection Project Facilities or might require the assignment of cost responsibilities to the Parties different than reflected in the Agreement, a Change shall not: (a) change the cost responsibilities for such facilities initially installed under this Agreement as reflected in Exhibit FM prior to the date that this Agreement is modified to reflect the Change; (b) require the repayment of funds by one Party to another that have been previously made in accordance with Exhibit FM prior to the date that this Agreement is modified to reflect the Change; or (c) otherwise change any of the other rights and responsibilities of the Parties under the Agreement prior to the date that this Agreement is modified to reflect the Change. In recognition of the need for certainty by the Parties regarding the Interconnection Project Facilities and for other good and valuable consideration, the Parties agree that this paragraph shall be unaffected by any Change to the extent that the law permits such agreement by the Parties to be enforced.

Section GP-10.15 - Subcontractors Nothing in this Agreement shall be construed as preventing either Party from utilizing the services of subcontractors as it deems appropriate; provided, however, that the Party utilizing such subcontractors shall be responsible for such subcontractors’ compliance with the applicable terms and conditions of this Agreement. The creation of any subcontract relationship shall not relieve the Party retaining the subcontractor of any of that party’s obligations under this Agreement.

Section GP-10.16 – No Actions Necessary to Affect EWG or QF Status

Nothing in this Agreement shall require IPP to take any action that could result in its inability to obtain, or its loss of, status as an Exempt Wholesale Generator or a Qualifying Facility, as applicable, within the meaning of the Public Utility Holding Company Act of 1935, as amended, or the Public Utility Regulatory Policies Act of 1978, as amended and, if IPP is a Qualifying Facility, IPP does not waive or relinquish any right it may have to sell power to TVA in accordance with the terms and conditions of 18 C.F.R Part 292 (Subpart C).

Revision 4

Attachment 1 [to Exhibit GP]

FORM OF LETTER OF CREDIT

[LETTERHEAD] [DATE]

Irrevocable standby Letter of Credit No.

Beneficiary: Account Party:

Tennessee Valley Authority 400 West Summit Hill Drive, WT 5D Knoxville, TN 37902-1401

Dear Madam or Sir:

We hereby establish for the account of ( IPP name) , (a <State> limited liability company) (“IPP” or “Account Party”), our irrevocable standby Letter of Credit in your favor for an amount of United States $ ( Dollars United States currency). Account Party has advised us that this Letter of Credit is issued in connection with the Interconnection Agreement dated as of , 20 , between Account Party and Beneficiary (as may be amended, supplemented, or otherwise modified, the “Interconnection Agreement”). This Letter of Credit (i) shall become effective immediately for the term of one (1) year and shall expire at our counters in (State) on 20 (the “Expiration Date”), and (ii) is subject to the following:

1. Funds under this Letter of Credit shall be made available to Beneficiary against its draft

drawn on us in the form of Annex 1 hereto, dated the date of presentation, accompanied by (a) a certificate in the form of Annex 2 hereto, appropriately completed and purporting to be signed by an authorized officer of Beneficiary, and (b) the original of the Letter of Credit (the “Accompanying Documents”) and presented at our office located at , Attention: (or at any other office which may be designated by us by written notice delivered to you). A presentation under this Letter of Credit may be made only on a day, and during hours, in which such office is open for business (a “Business Day”). If we receive your draft and the Accompanying Documents at such office on any Business Day, all in strict conformity with the terms and conditions of this Letter of Credit, we will honor the same by making payment in accordance with your payment instructions on [the third succeeding Business Day after] presentation. If the amount of the drawing, together with all previous drawings pursuant to this Letter of Credit, is less than the aggregate amount of this Letter of Credit, we will return this Letter of Credit to you with a notation of the remaining amount available hereunder.

2. It is a condition of the Letter of Credit that it shall be deemed to be automatically

extended without amendment for periods of one (1) year from its present expiry date, or any future expiration date, unless at least thirty (30) days prior to any expiration date we send you notice by registered mail, return receipt requested, or courier service or hand delivery at your above address that we elect not to consider this Letter of Credit renewed for any such additional period.

3. This Letter of Credit terminates upon the earliest to occur of (i) our receipt of a notice in

the form of Annex 3 hereto purporting to be signed by an authorized officer of Beneficiary, accompanied by this Letter of Credit for cancellation, (ii) our honoring of one or more drafts presented hereunder in an aggregate amount equal to the amount of this Letter of Credit, or (iii) our close of business at our aforesaid office on the expiration date, or if the expiration date is not a Business Day, then on the preceding Business Day, this Letter of Credit shall be surrendered to us by you upon the earlier of presentation or expiration.

Revision 4

4. This Letter of Credit is not transferable and is subject to the Uniform Customs and Practice for Documentary Credits (1993 revision), International Chamber of Commerce Publication No. 500.

5. This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in

any way be modified, amended, amplified, or limited by reference to any document, instrument, or agreement referred to herein, except for Annexes 1, 2, and 3 hereto and the notices referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument, or agreement except as provided in this paragraph 5.

6. Communications with respect to this Letter of Credit shall be in writing and shall be

addressed to us at the address referred to in paragraph 1 above, and shall specifically refer to this Letter of Credit No. .

Very truly yours,

[LOC Issuer]

Authorized signature

Revision 4

ANNEX 1 TO LETTER OF CREDIT NO.

Draft under (Issuer Name) Letter of Credit No.

[ Month, Day , Year ]

On [third business day next succeeding date of presentation]

Pay to Tennessee Valley Authority US $ [not to exceed amount available to be drawn] 400 West Summit Hill Drive, WT 5D Knoxville, TN 37902-1401

[insert any wire instructions]

For value received and charge to account of Letter of Credit No. of

By:

Title:

Revision 4


Drawing under (Issuer Name) Letter of Credit No.

The undersigned, a duly authorized officer of the Tennessee Valley Authority, a corporate instrumentality and agency of the United States of America (“Beneficiary”), hereby certifies on behalf of Beneficiary to with reference to Letter of Credit No. (the “Letter of Credit”) issued for the account of (IPP Name) , (“IPP”), that:

1) pursuant to Article GP-9 (Security) of the Interconnection Agreement between Beneficiary and IPP, as of the date hereof Beneficiary is entitled to draw under the Letter of Credit;

2) by presenting this certificate and the accompanying sight draft, Beneficiary is requesting that payment

in the amount of US $ , as specified on said draft, be made under the Letter of Credit by wire transfer or deposit of funds into the account specified on said draft;

3) the amount specified on the sight draft accompanying this certificate does not exceed the amount to

which Beneficiary is entitled to draft under said Article GP-9 (Security) of the Interconnection Agreement;

4) Beneficiary, on or prior to the date hereof, has transmitted by facsimile (with receipt confirmed) a

copy of this certificate to IPP, to the attention of at facsimile number or such number as has been designated by IPP in a written notice delivered to us, and has deposited, postage-prepaid, another copy hereof with a reputable overnight delivery courier service for delivery overnight to IPP at the following address:

Or at such other address as has been designated by IPP in a written notice delivered to us.

In witness whereof, Beneficiary has caused this certificate to be duly executed and delivered by its duly authorized officer as of the date and year written below.

Date:

By: Title:

Revision 4


Notice of surrender of (Issuer Name) Letter of Credit No.

Date:

Attention: Letter of Credit Department

Re: Letter of Credit No. issued for the account of (IPP Name)

Ladies and Gentlemen:

We refer to your above-mentioned irrevocable standby Letter of Credit (the “Letter of Credit”). The undersigned hereby surrenders the Letter of Credit to you for cancellation as of the date hereof. No payment is demanded of you under this Letter of Credit in connection with this surrender.

Very truly yours,

By:

Title:

T_______ IC‐1 Revision 4

EXHIBIT IC

INTERCONNECTION CRITERIA

for Connection of Facility of <<<Insert Reference to IPP’s Contracting Entity, e.g., Decatur Energy Center, LLC>>>

to TVA Transmission System

I. INTRODUCTION These Interconnection Criteria are requirements for interconnecting the Facility to the TVA transmission system. The purpose of these criteria is to ensure the safe operation, integrity, and reliability of the TVA transmission system and of the facilities to which it is connected.

These Interconnection Criteria are not intended as a design specification. More specific project scope, available short circuits, and relay and protection schemes are reflected on the Specification Diagram and Communication Specification Diagram referenced in the Facilities Matrix. References to the Agreement appear throughout this Exhibit IC.

As also set forth in paragraph (d) of Section BA-6.4 (Operating Committee), written Operating Procedures shall be mutually developed that will further address the information provided by this Exhibit IC.

II. GENERAL REQUIREMENTS A. Applicable Codes, Standards, Criteria, and Regulations

Ref. Appendix of Exhibit IC

B. Delivery Point Ref. Section BA-8.4 (Point of Interconnection and Conditions of Delivery)

C. Safety and Operation

Ref. Section FP-2.4 (Changes to IPP Interconnection Facilities) Section BA-6.4 (Operating Committee), paragraph (d) Section BA-7.4 (Interconnection)

D. Inspection, Test, Calibration, and Maintenance

Ref. Section FA-7 (O&M of Facilities) Section FA-9 (Billing and Payments for O&M Work) Article FP-5 (Review, Inspection, and Approval of Facilities) Section BA-6.3 (Start-Up and Test Schedule)

E. Metering and Telemetering

Ref. Section FP-1.3 (Metering and Data Equipment)

T IC-1


The above-referenced requirements are illustrative, but not necessarily exhaustive, of the relevant provisions in the Agreement addressing these general requirements. All provisions of the Agreement still apply with full force and effect according to their terms, without regard to whether a particular provision is identified above.

III. SPECIFIC REQUIREMENTS OR CLARIFICATIONS This Exhibit IC (including the Appendix) contains TVA’s standard requirements or criteria that are generally applicable to any generating facility for interconnection to the TVA transmission system. Criteria that specifically apply to this Facility are identified below in this section III. (If there is a specific and justifiable need to clarify or change the standard requirements for this particular Facility, such clarifications or changes are also identified below.)

(a) The Facility is to be located near the transmission facilities of TVA (as shown in Exhibit FC) in the <<<City/County>>> of , <<<Insert State Reference>>>.

(b) The Facility’s output capacity is nominally rated at MW (summer) and studied and planned for by TVA reflecting said nominal rating. As ambient temperature decreases, the Facility’s

output capacity can increase to approximately MW at 20 degrees Fahrenheit.

(c) The Facility includes combustion turbine units rated at MW (maximum output rating per unit) and steam turbine units rated at MW (maximum output rating per unit).

(d) The Initial Back Feed Date for the Facility has been scheduled to be (insert date).

(e) The Initial Synchronization Date for the Facility has been scheduled to be (insert date).

(f) The Commercial Operation Date for the Facility has been scheduled to be (insert date).

(g) The Scheduled Completion Date has been determined, as part of the completion of the Facilities Study, to be (insert date).

(h) <<<add new items as needed for clarification or supplemental purposes>>>

T IC-2


IV. PERFORMANCE REQUIREMENTS A. IPP shall comply with the following requirements:

Ref. Section BA-8.5 (Fluctuations or Disturbances on the TVA Transmission System Facilities)

1. Electrical Disturbances IPP shall avoid producing or causing effects such as:

a. An abnormal flow of power including unusual fluctuations of power output

and motoring of the generator.

b. Over/undervoltage and over/underfrequency.

c. Degraded reliability of the interconnected electric system.

2. Voltage Flicker IPP shall limit to acceptable levels the Facility’s production of voltage fluctuations (flicker) at the Delivery Point, consistent with the IEEE’s “Recommended Practices and Requirements for Harmonic Control in Electrical Power Systems” (IEEE Standard 519, or its successor).

3. Harmonic Current Injection

IPP shall limit the Facility’s production of total harmonic current distortion (THCD) and individual harmonic current distortion injected into the TVA transmission system to the levels specified in IEEE Standard 519, or its successor. (Exceptions to these harmonic requirements may be considered by TVA on an individual basis.)

4. Phase Imbalance

The Facility shall not cause phase current imbalance greater than 10 percent.

B. Grounding IPP shall provide a ground source to the TVA transmission system. The Facility shall be effectively grounded (X0/X1≤3 and R0/X1≤1) up to the Delivery Point. This may be accomplished using a generator step-up transformer with the high voltage (TVA) side in a grounded wye and the low voltage (IPP) side in a closed delta or a closed delta tertiary configuration. IPP’s grounding requirements for the Facility shall be in compliance with the National Electric Safety Code, ANSI/IEEE Std. 665 - “Guide for Generator Station Grounding,” ANSI/IEEE Std. 80 - “Guide for Safety in AC Substation Grounding,” or their successors, and any applicable state and local codes.

C. Voltage Rating, Regulation, and Power Factor

(a) In order to minimize possible adverse impacts to the operation of the Facility (that might occur as a result of TVA’s power system operating under extreme voltage conditions), the Facility should be designed to operate within a voltage range set out as follows: If the Point of Interconnection is established under Section BA-8.4 (Point of Interconnection and Conditions of Delivery) at a nominal voltage of 161,000 volts, the Facility should be designed to operate within a voltage range of 156 kV to 172

T IC-3


kV as determined at the Point of Interconnection. If the Point of Interconnection is established under Section BA-8.4 (Point of Interconnection and Conditions of Delivery) at a nominal voltage of 500,000 volts, the Facility should be designed to operate within a voltage range of 490 kV to 540 kV as determined at the Point of Interconnection. If the Point of Interconnection is established under Section BA-8.4 (Point of Interconnection and Conditions of Delivery) at a nominal voltage of 230,000 volts, the Facility should be designed to operate within a voltage range of 224 kV to 246 kV as determined at the Point of Interconnection. The Facility’s generator continuous capability curve, including over/underexcited operation, shall not be restricted by limitations including auxiliary voltage levels, main or auxiliary transformer tap settings, control, and protection.

(b) The Facility shall be operated at a power factor within the range of 0.95 lagging to

0.95 leading at the Point of Interconnection to provide optimum support to the voltage level specified by TVA in the voltage schedules [ref. Section BA-6.5 (Voltage Schedule)] and shall be operated within the continuous reactive capability of the generator. This may require the generator to produce or absorb reactive power as appropriate to comply with such operating requirements. The normal operating voltage range for the Facility is set out as follows: If the Point of Interconnection is established under Section BA-8.4 (Point of Interconnection and Conditions of Delivery) at a nominal voltage of 161,000 volts, the normal operating voltage range for the Facility is expected to be approximately 164 kV to 170 kV as determined at the Point of Interconnection, with 168 kV being the expected optimal operating voltage. If the Point of Interconnection is established under Section BA-8.4 (Point of Interconnection and Conditions of Delivery) at a nominal voltage of 500,000 volts, the normal operating voltage range for the Facility is expected to be approximately 520 kV to 530 kV as determined at the Point of Interconnection, with 525 kV being the expected optimal operating voltage. If the Point of Interconnection is established under Section BA-8.4 (Point of Interconnection and Conditions of Delivery) at a nominal voltage of 230,000 volts, the normal operating voltage range for the Facility is expected to be approximately 230 kV to 238 kV as determined at the Point of Interconnection, with 236 kV being the expected optimal operating voltage. As provided elsewhere in the Agreement, such as Section BA-6.5 (Voltage Schedule), TVA and IPP may agree upon compensation to IPP for operating the Facility at a power factor outside the range specified above.

(c) The Facility shall have an exciter ceiling voltage that is not less than 1.5 times the

rated output field voltage.

(d) IPP shall notify the TVA dispatchers when the Facility’s generator will not be operated in automatic voltage control.

(e) IPP shall test and document the reactive capability of the Facility’s generators with

the cooperation of the TVA dispatchers, in accordance with NERC guidelines.


D. Governor Speed/Frequency Control A speed governor system is required, except as noted, with the following capabilities:

(a) The governor shall be set to provide a four-to-six percent (4-6%) droop characteristic (a 5% change in the generator speed will cause the generator load to change by 100% of its rating).

(b) The overspeed control shall be capable of arresting the speed rise following a full

load rejection to a value below the unit trip setting. The unit shall return to synchronous speed in preparation for resynchronization with the TVA transmission system. If such capability cannot be provided, then IPP shall discuss and provide technical information to TVA that supports such limited capabilities. TVA may then agree to other requirements.

(c) The nominal system frequency is 60 hertz.

E. Special Generator Disturbance Studies

It is recognized that once the Facility has been connected to the TVA transmission system and gone into operation, the possibility exists that the Facility might experience operational problems (such as online tripping of the generators) which were unanticipated when the Interconnection System Impact Study and Facilities Study were conducted. In such event, at IPP’s request, TVA shall, on a cost reimbursable basis, conduct studies for root cause analysis and make recommendations to IPP for appropriate corrective actions.

F. Excitation System

IPP shall provide a modern, solid-state, high-speed excitation system (such as a brushless excitation system) with automatic voltage regulation which includes power system stabilizers. IPP shall provide equipment (such as line drop compensator) necessary to enable the Facility to operate in compliance with the voltage and power factor requirements set out in sub-section C (Voltage Rating, Regulation, and Power Factor) above.

V. RELAY AND PROTECTION REQUIREMENTS

(1) The primary protection and synchronizing of the IPP generators shall be provided by IPP’s generator breakers as indicated on the Specification Diagram and Communication Specification Diagram referenced in the Facilities Matrix (or other drawings included as part of the Referenced Project Documentation).

(2) The primary IPP generator step-up transformer protection shall be provided by IPP’s power

circuit breaker, and failure of this breaker to trip shall be backed up via tripping to the appropriate TVA and/or IPP power circuit breakers.

(3) IPP station service supply shall be connected as indicated on the Specification Diagram and

Communication Specification Diagram referenced in the Facilities Matrix (or other drawings included as part of the Referenced Project Documentation). Switching and primary protective devices shall be provided for station service and other auxiliary feeds as required or recommended in accordance with the applicable ANSI/IEEE standards (or their successors).


(4) Relays protecting the IPP generator and generator step-up transformer shall be utility grade, conforming to ANSI/IEEE C37.90, C37.90.1, and C37.90.2, or their successors, and both the relays and relay settings shall be coordinated with TVA. TVA may at its option duplicate some relays or relay functions provided for generator or generator step-up protection by IPP.

(5) The following relays or relay and protection functions are among those required; however,

TVA does not intend this to be a comprehensive list:

A. Isolating and Synchronizing (i) A manual switch shall be provided that physically and visibly opens the

interconnecting circuit to the Facility [ref. Section FP-2.3 (Standards and Review)].

(ii) IPP shall not energize any de-energized TVA Interconnection Facilities unless such energizing is specifically approved by the TVA dispatcher.

(iii) IPP shall synchronize its generator to the TVA transmission system only when

supervised by a synchronizing relay. IPP shall not connect the Facility to the TVA transmission system in an out-of-synchronization condition.

(iv) The TVA phase sequence is A-B-C, rotating counter-clockwise.

B. Generator Step-Up Transformer Protection

IPP shall provide complete protection of the generator step-up transformer. Such protection shall be as required or recommended in accordance with the applicable ANSI/IEEE standards (or their successors), including relay protective schemes such as bank phase and ground differential, overcurrent, hot spot, sudden pressure, including providing backup ground relaying on the neutral (coordinated with primary TVA ground relaying), and providing neutral current for transmission line relay polarizing.

C. Over/Underfrequency, Over/Undervoltage Relays

(i) IPP shall provide over/underfrequency and over/undervoltage relays to protect the generator from severe system frequency or voltage disturbances. The relay setting used for these relays shall not disconnect the generator from the system for the occasional small dynamic (transient) oscillations on the power system, which are stable and damped. The objective is to protect the generators while at the same time utilizing the total machine capability to support the system and prevent unnecessary loss of load.

(ii) The last step of TVA's system-wide underfrequency load-shedding scheme trips load

at a frequency of 58.7 hertz after a time delay of 30 cycles. To prevent a generator trip before TVA's load-shedding scheme is completed, the IPP underfrequency relay shall be capable of both lower and slower settings. The overfrequency relay shall be capable of mirroring the underfrequency settings. These settings are required to protect the generator during system abnormal frequency as described in ANSI/IEEE C37.106 IEEE, “Guide for Abnormal Frequency Protection for Power Generating Plants,” or its successor.


D. Breaker Failure and Backup Protection (i) IPP shall provide appropriate breaker-failure relays to ensure that, if the IPP high

voltage power circuit breakers fail to trip, the appropriate IPP and/or TVA power circuit breakers will trip.

(ii) TVA shall provide appropriate breaker-failure relays to ensure that, if the TVA high

voltage power circuit breakers fail to trip, the appropriate TVA and/or IPP power circuit breakers will trip.

(iii) IPP shall provide appropriate breaker failure and backup relays to ensure that a

failure to trip by the IPP low voltage equipment/feed protection will be transferred to the next level of protection.

E. Reverse Power

Reverse power relay protection for the generator’s prime mover (as backup to mechanical protection systems) shall be installed and implemented in accordance with IEEE Standard 242, section 11.4.4, or its successor.

F. Relay Settings

Ref. Section FP-2.3 (Standards and Review)

G. Exchange of Secondary Circuits for Protection and Control IPP shall provide to TVA secondary circuits (including currents, voltages, direct current trips, breaker position indication, etc.) for equipment status monitoring and TVA’s protection and control schemes.

H. Machine and Transformer Modeling Data

To replace or supplement the estimated data (for machine and transformer modeling) provided to TVA earlier for the Interconnection System Impact Study, IPP shall provide to TVA a copy of the manufacturer’s generator test report containing all machine parameters required to model the generator. IPP shall also provide to TVA a copy of the manufacturer’s transformer test report (including zero sequence impedance data for three- phase banks with earthed neutral) for each transformer installed by the IPP (generator step-up, station service, etc.). It is understood that IPP is not required to supply TVA with manufacturer’s test data that are not relevant to the purposes of the Agreement (such as generator’s fuel consumption data).


APPENDIX Applicable Codes, Standards, Criteria, and Regulations

In the initial design and construction of the Facility and future modifications to the Facility, IPP shall consider the following:

NERC Planning Standards The NERC Planning Standards apply as set out in Section BA-7.4 (Interconnection). Although all of the standards apply, the following sections of the NERC Planning Standards are particularly important:

I. System Adequacy and Security

A. Transmission Systems D. Voltage Support and Reactive Power

II. System Modeling Data Requirements A. System Data B. Generation Equipment

III. System Protection and Control C. Generation Control and Protection D. Underfrequency Load Shedding E. Undervoltage Load Shedding

ANSI and IEEE Standards

ANSI/NFPA 70 National Electric Code ANSI/IEEE C2 National Electrical Safety Code IEEE 32 Standard Requirements, Terminology, and Test Procedures for Neutral

Grounding Devices IEEE 80 Guide for Safety in AC Substation Grounding IEEE 519 Recommended Practices and Requirements for Harmonics Control in

Electric Power Systems IEEE 665 Guide for Generating Station Grounding IEEE 693 Recommended Practices for Seismic Design of Substations IEEE 979 Guide for Substation Fire Protection IEEE 980 Guide for Containment and Control of Oil Spills in Substations IEEE 1001 Guide for Interfacing Dispersed Storage and Generation Facilities with

Electric Utility Systems IEEE 1109 Guide for the Interconnection of User-Owned Substations to Electric

Utilities IEEE C37.04 Rating Structure for AC High-Voltage Circuit Breakers Rated on a

Symmetrical Current Basis ANSI C37.06 Preferred Ratings and Related Required Capabilities for AC High-

Voltage Circuit Breakers IEEE C37.013 Standard for AC High-Voltage Generator Circuit Breakers Rated on a

Symmetrical Current Basis

ANSI C37.16 Preferred Ratings, Related Requirements, and Application Recommendations for Low-Voltage Power Circuit Breakers

IEEE C37.30 Standard Requirements for High-Voltage Air Switches


ANSI C37.32 High-Voltage Air Switches, Bus Supports, and Switch Accessories- Schedules of Preferred Ratings, Manufacturing Specifications, and Application Guide

IEEE C37.48 Guide for Application, Operation, and Maintenance of High-Voltage Fuses, Distribution Enclosed Single-Pole Air Switches, Fuse Disconnecting Switches, and Accessories

IEEE C37.90 Standard for Relays and Relay System Associated with Electric Power Apparatus

IEEE C37.91 Guide for Protective Relay Applications to Power Transformers IEEE C37.95 Guide for Protective Relaying of Utility-Consumer Interconnections IEEE C37.97 Guide for Protective Relay Applications to Power System Buses IEEE C37.102 Guide for AC Generator Protection IEEE C57.12.00 Standard General Requirements for Liquid-Immersed Distribution,

Power, and Regulating Transformers IEEE C57.12.01 Standard General Requirements for Dry-Type Distribution and Power

Transformers IEEE C57.13 Standard Requirements for Instrument Transformers IEEE C57.13.3 Guide for the Grounding of Instrument Transformer Secondary Circuits

and Cases IEEE C57.116 Guide for Transformers Directly Connected to Generators IEEE C62.11 Standard for Metal-Oxide Surge Arresters for AC Power Circuits IEEE C62.22 Guide for the Application of Metal Oxide Surge Arresters IEEE C62.92.1 Guide for the Application of Neutral Grounding in Electric Utility

Systems, Part I - Introduction IEEE C62.92.2 Guide for the Application of Neutral Grounding in Electric Utility

Systems, Part II - Grounding of Synchronous Generator Systems IEEE C62.92.5 Guide for the Application of Neutral Grounding in Electrical Utility

Systems, Part V - Transmission Systems and Subtransmission Systems ANSI C84.1 Voltage Ratings for Electric Power Systems and Equipment ANSI C93.1 Power Line Carrier Coupling Capacitors and Coupling Capacitor Voltage

Transformers IEEE 1313 Standard for Power Systems - Insulation Coordination

Uniform Building Code: OSHA

T_______ RD‐10 Revision 4

EXHIBIT RD

Rate for Difference Between Scheduled Amount and Generation Output

I. Description: The rate described below is required under the interconnection agreement between TVA and the owner and operator of a generating facility located in TVA’s Control Area and interconnected to the TVA system (Generator) when a difference occurs between the scheduled amount(s) of energy plus losses* and the actual generation output (rounded to the nearest whole megawatt hour) of the Generator delivered to TVA within TVA’s Control Area over a single hour (Difference). Scheduled amount(s) of energy shall include all schedules for delivery to any party, including TVA, at the point of connection to the TVA transmission system and for delivery outside the TVA Control Area. Where there is the potential during any hour for TVA charging a Transmission Customer for energy imbalance under Schedule 4 of TVA’s Transmission Service Guidelines (Guidelines) or charging the Generator for a Difference under this Exhibit RD, TVA may either charge the Transmission Customer for energy imbalance under the Schedule 4 or the Generator for a Difference under this Exhibit RD, but not both, unless application of both charges is needed to compensate TVA for the imbalance. The terms and charges set forth below will apply to the Difference.

In determining the appropriate charges for the Difference, TVA will apply a three band pricing structure as described in Sections II, III, and IV below. The appropriate charges will be determined by either the Generator’s percentage deviation from the scheduled amount(s) of energy plus losses or the megawatt hour deviation. If the Difference exceeds either the percentage limits or the megawatt hour limits for a deviation band, the charges for the Difference will be based on higher band charges.

II. Treatment of the Difference Within Deviation Band I: If the Difference is less than or equal to +/-

one and five-tenths percent (1.5%) of the scheduled energy plus losses and the deviation is 2 MWh or less, the Generator will be subject to the charges for the Difference set for below:

A. If the output of the generation integrated over a clock hour is greater than the scheduled energy

plus losses over a clock hour, TVA will pay the Generator 100 percent of TVA’s decremental cost for the clock hour applied to the Difference. .

B. If the scheduled energy plus losses is greater than the output of the generation integrated over a

clock hour, the Generator will pay TVA 100 percent of TVA’s incremental costs for the clock hour applied to the Difference.

Differences that are within one and five-tenths percent (1.5%) of the scheduled energy plus losses but that exceed 2 MWh will fall into Band II if the deviation is greater than 2 MWh and less than or equal to 10 MWh or into Band III if the deviation is greater than 10 MWh. Likewise, Differences that are less than or equal to 2 MWh but greater than one and five-tenths percent (1.5%) of the scheduled energy plus losses will fall into Band II if the deviation is greater than 1.5% and less than or equal to 7.5% of the scheduled energy or into Band III if the deviation is greater than 7.5% of the scheduled energy plus losses.

III. Treatment of the Difference Within Deviation Band II: If the Difference is greater than +/- one

and five-tenths percent (1.5%) and less than or equal to seven and five-tenths percent (7.5%) of the scheduled energy plus losses, or if the Difference is greater than 2 MWh and less than or equal to 10 MWh, the Generator will be subject to the charges for the Difference set forth below:

A. If the output of the generation integrated over a clock hour is greater than the scheduled energy plus losses over a clock hour, TVA will pay the Generator 90 percent of TVA’s decremental cost for the clock hour applied to the Difference. The Generator is also responsible for any additional

T_______ RD‐11 Revision 4

costs directly attributable to its generation output that exceeds the scheduled amount plus losses by an excess 1.5% (e.g., if this occurs during a load turndown period where units are at minimum generation, units may have to be taken off line, there may be forced pumping out of economic order at TVA’s pumped storage facility to increase the load, interchange power may be sold at less than marginal cost to supply, etc.).

B. If the scheduled energy plus losses is greater than the output of the generation integrated over a

clock hour, the Generator will pay TVA 110 percent of TVA’s incremental cost in the hour applied to the Difference.

Differences that are less than or equal to seven and five-tenths percent (7.5%) of the scheduled energy plus losses but greater than 10 MWh will fall into Band III. Likewise, Differences that are less than or equal to 10 MWh but greater than 7.5% of the scheduled energy plus losses will fall into Band III.

IV. Treatment of the Difference Within Deviation Band III: If the Difference is greater than +/- seven

and five-tenths percent (7.5%) of the scheduled energy plus losses or if the Difference is greater than 10 MWh, the Transmission Customer will be subject to the charges for the Difference set forth below:

A. If the scheduled energy plus losses is greater than the load integrated over a clock hour,

TVA will pay the Generator 75 percent of TVA’s decremental cost for the clock hour applied to the Difference. The Generator is also responsible for any additional costs directly attributable to a schedule that exceeds the load by an excess of 1.5% (e.g., if this occurs during a load turndown period where units are at minimum generation, units may have to be taken off line, there may be forced pumping out of economic order at TVA’s pumped storage facility to increase the load, interchange power may be sold at less than marginal cost, etc.).

B. If the load integrated over a clock hour is greater than the scheduled amount, the Generator

will pay TVA 125 percent of TVA’s incremental cost for the clock hour applied to the Difference.

V. Incremental and Decremental Cost: For purposes of this Schedule, incremental cost and

decremental cost represent TVA’s actual hourly cost of the last 20 MW dispatched to meet total demand on the system for any purpose including to supply TVA’s Native Load Customers (as that term is defined in the Guidelines), correct imbalances, or make off-system sales, based on the replacement cost of fuel, unit heat rates, start-up costs (including any commitment and redispatch costs), incremental operation and maintenance costs, and purchased and interchange power costs, as applicable.

VI. Billing and Payment: Any billing and payment required herein shall be in accordance with the billing

and payment provisions of the interconnection agreement. Additionally any payments due from TVA herein shall be rendered within 30 days following the end of the month in which the Difference occurred, provided however that if the amount of the payment by TVA is in dispute, the disputed amount shall not be due until resolution of the dispute.

VII. Modification of Rate: This rate is subject to modification, as determined by TVA.

*The amount of losses to be applied are those provided for in the Guidelines.