EX-10 18 ex10d.txt EX. 10(D) - GENERATION INTERCONNECTION AGREEMENT Exhibit 10(d) GENERATION INTERCONNECTION AGREEMENT 1 TABLE OF CONTENTS ERCOT STANDARD GENERATION INTERCONNECTION AGREEMENT........................3 Exhibit "A" Terms and Conditions of the ERCOT Standard Generation Interconnection Agreement..............................5 ARTICLE 1. DEFINITIONS..................................................5 ARTICLE 2. TERMINATION...................................................6 ARTICLE 3. REGULATORY FILINGS...........................................7 ARTICLE 4. FACILITIES AND EQUIPMENT.....................................7 ARTICLE 5 OPERATION AND MAINTENANCE....................................10 ARTICLE 6. DATA REQUIREMENTS...........................................12 ARTICLE 7. INSURANCE...................................................13 ARTICLE 8. MISCELLANEOUS...............................................15 Exhibit "B" System Protection Requirements................................20 Exhibit "C" Notice and EFT Information of the Generation Interconnection Agreement......................................24 Exhibit "D" Supplemental Terms and Conditions...........................22 Facility Schedule No. 1 - Big Brown Facility Schedule No. 2 - Collin Facility Schedule No. 3 - DeCordova Facility Schedule No. 4 - Eagle Mountain Facility Schedule No. 5 - Graham Facility Schedule No. 6 - Lake Creek Facility Schedule No. 7 - Lake Hubbard Facility Schedule No. 8 - Martin Lake Facility Schedule No. 9 - Monticello Facility Schedule No.10 - Morgan Creek Facility Schedule No.11 - North Lake Facility Schedule No.12 - North Main Facility Schedule No.13 - Parkdale Facility Schedule No.14 - Permian Basin Facility Schedule No.15 - Rivercrest Facility Schedule No.16 - Stryker Creek Facility Schedule No.17 - Tradinghouse Facility Schedule No.18 - Trinidad Facility Schedule No.19 - Valley Facility Schedule No. 20 - Handley Facility Schedule No. 21 - Mountain Creek 2 GENERATION INTERCONNECTION AGREEMENT This Generation Interconnection Agreement is made and entered into this 14th day of December, 2001, between TXU Electric Delivery Company, a Texas corporation ("Transmission Service Provider") and TXU Generation Company LP, a Texas limited partnership, for itself and as agent for TXU Big Brown Company LP, TXU Mountain Creek Company LP, TXU Handley Company LP, TXU Tradinghouse Company LP, and TXU DeCordova Company LP, each a Texas limited partnership (collectively the "Generator"), hereinafter individually referred to as "Party," and collectively referred to as "Parties." In consideration of the mutual covenants and agreements herein contained, the Parties hereto agree as follows: Transmission Service Provider represents that it is a public utility that owns and operates facilities for the transmission and distribution of electricity. Generator represents that it will own and operate the Plants. Pursuant to the terms and conditions of this Agreement, Transmission Service Provider shall maintain an interconnection between Generator's Plants and Transmission Service Provider's System. This Agreement applies only to the Plants and the Parties' interconnection facilities as identified in the Facility Schedules attached hereto ("Facility Schedules"). This Agreement shall become effective on January 1, 2002 and shall continue in full force and effect until terminated in accordance with Exhibit "A." This Agreement will be subject to the following, all of which are incorporated herein: A. The "Terms and Conditions of the Generation Interconnection Agreement" attached hereto as Exhibit "A"; B. The ERCOT Requirements (unless expressly stated herein, where the ERCOT Requirements are in conflict with this Agreement, the ERCOT Requirements shall prevail); C. The PUCT Rules (where the PUCT Rules are in conflict with this Agreement, the PUCT Rules shall prevail); D. The "System Protection Requirements" attached hereto as Exhibit "B"; E. The "Notice and EFT Information of the Generation Interconnection Agreement" attached hereto as Exhibit "C"; F. The "Supplemental Terms and Conditions Specific to TSP-Owned Support Facilities, Generator-Owned Support Facilities, TSP Support Services, and Areas of Common Switchyards" attached hereto as Exhibit "D"; and G. The "Interconnection Details" attached hereto as Facility Schedules. 3 IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals, each of which shall constitute and be an original effective Agreement between the Parties. TXU ELECTRIC DELIVERY COMPANY By: /s/ Thomas L. Baker ------------------------------ Name: Thomas L. Baker ------------------------------ Title: President ------------------------------ Date: 12/14/01 ------------------------------ TXU GENERATION COMPANY LP for Itself and as Agent for TXU Big Brown Company LP, TXU Mountain Creek Company LP, TXU Handley Company LP, TXU Tradinghouse Company LP, and TXU DeCordova Company LP By: TXU Generation Management Company LLC Its General Partner By: /s/ W.M. Taylor ------------------------------- Name: W. M. Taylor ------------------------------- Title: President ------------------------------- Date: 12/14/01 ------------------------------- 4 EXHIBIT "A" TERMS AND CONDITIONS OF THE GENERATION INTERCONNECTION AGREEMENT ARTICLE 1. DEFINITIONS Capitalized terms shall have the meanings as set forth below, except as otherwise specified in the Agreement: 1.1 "Common Switchyard" shall mean a switchyard in which both GIF and TIF facilities are located within a Generator-owned geographical area, which may or may not be enclosed by a common fence. 1.2 "ERCOT" shall mean the Electric Reliability Council of Texas, Inc. 1.3 "ERCOT Requirements" means the ERCOT Operating Guides, ERCOT Generation Interconnection Procedures as well as any other documents adopted by ERCOT relating to the interconnection and operation of generators and transmission systems in ERCOT as amended from time to time, and any successors thereto. Any requirement in the foregoing documents imposed upon generation entities or generation facilities shall become the responsibility of the Generator, and any requirements imposed on transmission providers or transmission facilities shall become the responsibility of the TSP. 1.4 "Generator-Owned Support Facilities" shall mean those Generator-owned facilities located within the Plant and/or GIF which provide essential support to the TSP for the operation of the TIF. These facilities are more specifically described in Exhibit "D" and the Facility Schedules. 1.5 "GIF" shall mean the Generator's interconnection facilities as described in the Facility Schedules. 1.6 "Good Utility Practice" shall have the meaning described in PUCT Rule 25.5(23) or its successor. 1.7 "Governmental Authority(ies)" shall mean any federal, state, local, or municipal body having jurisdiction over a Party. 5 1.8 "Plant" shall mean the individual electric generation facility(ies) owned and operated by the Generator, as specified in the Facility Schedules. 1.9 "Point of Interconnection" shall mean the location(s) where the GIF connects to the TIF as negotiated and defined by the Parties and as shown in the Facility Schedules. 1.10 "PUCT" shall mean the Public Utility Commission of Texas. 1.11 "PUCT Rules" shall mean the Substantive Rules of the PUCT. 1.12 "System Protection Equipment" shall mean those facilities located within the TIF and the GIF as described in Section 4.5 and Exhibit "B". 1.13 "TIF" shall mean the TSP's interconnection facilities as described in the Facility Schedules. 1.14 "TSP" shall mean the Transmission Service Provider. 1.15 "TSP-Owned Support Facilities" shall mean those TSP-owned facilities located within the Plant and/or GIF that provide essential support to the TSP for the operation of the TIF and those TSP-owned facilities located within the TIF that provide essential support to the Generator for the operation of the GIF and/or Plant. These facilities are more specifically described in Exhibit "D" and the Facility Schedules. 1.16 "TSP Support Services" shall mean those services provided by the Generator to the TSP to support the operation of the TIF. Such services are described in Exhibit "D" and the applicable Facility Schedules. 1.17 "TSP System" shall mean the electric transmission facilities, including the TIF, and all associated equipment and facilities owned and/or operated by the TSP. ARTICLE 2. TERMINATION 2.1 Termination Procedures. This Agreement may be terminated in its entirety, or with respect to an individual Facility Schedule, if one of the following provisions are met: A. the Generator provides the TSP with twenty-four (24) months advance written notice; B. this Agreement has been superseded by a comparable new Generation Interconnection Agreement; 6 C. all of the necessary facilities are in place, in the sole discretion of the TSP, for the TSP to operate the TSP System without the TSP-owned Support Facilities and Generator-Owned Support Facilities upon disconnection of the GIF from the TIF and the Generator has provided the TSP with at least thirty (30) days advance written notice of termination (which notice may be the notice provided for in Part A above); D. mutually agreed to by the Parties; or E. terminated in accordance with Section 8.6. 2.2 Disconnection. Upon termination of this Agreement, or an individual Facility Schedule, the Parties will disconnect the relevant GIF from the TIF. ARTICLE 3. REGULATORY FILINGS 3.1 Filing. The TSP shall file this executed Agreement with the appropriate Governmental Authority, if required. Any portions of this Agreement asserted by the Generator to contain competitively sensitive commercial or financial information shall be filed by the TSP identified as "confidential" under seal stating, for the TSP's showing of good cause, that the Generator asserts such information is confidential information and has requested such filing under seal. If requested by the TSP, the Generator shall provide the TSP, in writing, with the Generator's basis for asserting that the information referred to in this Section 3.1 is competitively sensitive information, and the TSP may disclose such writing to the appropriate Governmental Authority. 3.2 Regulatory Approvals. Unless exempt, the TSP shall timely request ERCOT and all regulatory approvals necessary for it to carry out its responsibilities under this Agreement. ARTICLE 4. FACILITIES AND EQUIPMENT 4.1 Ownership of Facilities. The ownership of facilities by each respective Party shall be as provided in the Facility Schedules attached to this Agreement. Such Facility Schedules shall also define the Points of Interconnection at which the facilities of the Parties interconnect. 7 4.2 Information Exchange. The Parties shall exchange information and mutually agree upon the design and compatibility of the Parties' interconnection facilities. The Parties shall work diligently and in good faith to make any necessary design changes to ensure compatibility of the GIF to the TSP System. 4.3 Equipment Changes. For facilities not described in the Facility Schedules, if either Party makes equipment changes to the Plant, the GIF, the TIF or the TSP System that it knows will affect the operation or performance of the other Party's interconnection facilities, the Parties agree to notify the other Party, in writing, of such changes. Such changes shall be made in accordance with ERCOT Requirements and coordinated between the Parties. 4.4 Metering, Telemetry, and Communications Requirements. A. Metering and telemetry of data will be accomplished in accordance with ERCOT Requirements. The specific metering, telemetry, and communications equipment and data to be telemetered are described in the Facility Schedules. B. The TSP shall, at its own cost and expense, and in accordance with ERCOT Requirements, furnish, own, operate, inspect, test, and maintain metering and telemetry equipment at the Point of Interconnection, unless otherwise specified in the applicable Facility Schedule. However, the TSP shall provide the Generator with metering and telemetry values in accordance with ERCOT Requirements. C. The Generator shall, at its own cost and expense, and in accordance with ERCOT Requirements, furnish, own, operate, inspect, test, and maintain equipment necessary to supply the TSP with the data specified in each Facility Schedule. A minimum set of inputs to the telemetry equipment are specified in the Facility Schedules. Additional sets of inputs may be subsequently mutually agreed upon. D. The TSP will notify the Generator at least five (5) working days in advance of any planned maintenance, inspection, testing, or calibration of the metering equipment, unless otherwise agreed to in writing. The Generator, or its designated representative, shall have the right to be present for these activities and to receive copies of any documents related to the procedures and results. 8 E. The Parties shall ensure the proper functioning of all metering, telemetry, and communications equipment associated with the Point of Interconnection and both Parties' interconnection facilities, and verify the accuracy of data being received by the TSP and the Generator. All tests will be performed consistent with ERCOT Requirements. F. The TSP shall, in accordance with Good Utility Practice and ERCOT Requirements, specify communications facilities, including those necessary to transmit data from the metering equipment to the TSP, that are necessary for the effective operation of the Plant and the GIF with the TSP System. Such communication facilities shall be included in the Facility Schedules. The Generator shall make arrangements to procure and bear the cost of such facilities, unless otherwise specified in the applicable Facility Schedule. G. Any changes to the meters, telemetry equipment, voltage transformers, current transformers, and associated panels, hardware, conduit, and cable, which will affect the data being received by the other Party must be mutually agreed to by the Parties. H. Each Party will promptly advise the other Party if it detects or otherwise learns of any metering, telemetry or communications equipment errors or malfunctions that require the attention and/or correction by the other Party. The Party owning such equipment shall correct such error or malfunction as soon as reasonably feasible in accordance with ERCOT Requirements. 4.5 System Protection and Other Controls Requirements. ------------------------------------------------- A. Each Party's facilities shall isolate any fault, or correct or isolate any abnormality, which would negatively affect the other Party's system or other entities connected to the TSP System. B. The Generator shall be responsible for protection of its facilities consistent with ERCOT Requirements. C. Each Party's protective relay design shall incorporate the necessary test switches to perform the tests required in Section 4.5 F. The required test switches will be placed such that they allow operation of lockout relays while preventing breaker failure schemes from operating and causing unnecessary breaker operations and tripping the Generator's units. 9 D. Recording equipment shall be installed to analyze all system disturbances in accordance with ERCOT Requirements. E. Each Party will test, operate, and maintain System Protection Equipment in accordance with ERCOT Requirements and Exhibit "B". Each Party will provide reasonable notice to the other Party of any testing of its System Protection Equipment allowing such other Party the opportunity to have representatives present during testing of its System Protection Equipment. F. At intervals suggested by Good Utility Practice or at intervals described in the ERCOT Requirements if so defined therein, and following any apparent malfunction of the System Protection Equipment, each Party shall perform both calibration and functional trip tests of its System Protection Equipment. These tests do not require the tripping of any in-service generation unit. These tests do, however, require that all protective relays and lockout contacts be activated. 4.6 No Annexation. Any and all equipment placed on the premises of a Party shall be and remain the property of the Party providing such equipment regardless of the mode and manner of annexation or attachment to real property, unless otherwise mutually agreed by the Parties. ARTICLE 5. OPERATION AND MAINTENANCE 5.1 Operation and Maintenance of Interconnection Facilities. The Parties agree to operate and maintain their systems in accordance with Good Utility Practice, the National Electrical Safety Code, the ERCOT Requirements, the PUCT Rules, and all applicable laws and regulations. Subject to any necessary ERCOT approval, each Party shall provide necessary equipment outages to allow the other Party to perform periodic maintenance, repair, or replacement of its facilities. Such outages shall be scheduled at mutually agreeable times, unless conditions exist which a Party believes, in accordance with Good Utility Practice, may endanger persons or property. No changes will be made in the normal operation of the Point of Interconnection without the mutual agreement of the Parties except as otherwise provided herein. All testing of the Plant, the GIF, or the TIF that affects the operation of the Point of Interconnection shall be coordinated between the TSP and the Generator and will be conducted in accordance with ERCOT Requirements. 10 5.2 Land Rights and Easements. Terms and conditions addressing the rights of the TSP and the Generator regarding any facilities located on the other Party's property shall be addressed in a separate, duly executed and recorded easement agreement between the Parties. The Parties will mutually agree upon procedures to govern access to each other's property as necessary for the Parties to fulfill their obligations hereunder. 5.3 Service Interruption. The Parties recognize that the interruption of service provisions of the PUCT Rules give the TSP the right to disconnect the TSP System from a Plant under the conditions specified therein. The Generator will promptly disconnect a Plant from the TSP System when required by and in accordance with the PUCT Rules and ERCOT Requirements. 5.4 Switching and Clearance. A. Any switching or clearances needed on the TIF or the GIF will be done in accordance with ERCOT Requirements. B. Any switching and clearance procedure necessary to comply with Good Utility Practice or ERCOT Requirements that may have specific application to a Plant shall be addressed in the applicable Facility Schedule. 5.5 Start-Up and Synchronization. Consistent with ERCOT Requirements and the Parties' mutually acceptable procedure, the Generator is responsible for the proper synchronization of each Plant to the TSP System. 5.6 Routine Operational Communications. On a timely basis, the Parties shall exchange all information necessary to comply with ERCOT Requirements. 5.7 Blackstart Operations. If a Plant is capable of blackstart operations, the Generator will coordinate individual Plant start-up procedures consistent with ERCOT Requirements. Any blackstart operations shall be conducted in accordance with the blackstart criteria included in the ERCOT Requirements and the TSP Blackstart Plan on file withERCOT. Notwithstanding this section, the Generator is not required to have blackstart capability by virtue of this Agreement. If the Generator will have blackstart capability, then the Generator shall provide 11 and maintain an emergency communication system that will interface with the TSP during a blackstart condition. 5.8 Power System Stabilizers. The Generator shall procure, install, maintain, and operate power system stabilizers if required to meet ERCOT Requirements and as described in the Facility Schedules. ARTICLE 6. DATA REQUIREMENTS 6.1 Data Acquisition. The acquisition of data to realistically simulate the electrical behavior of system components is a fundamental requirement for the development of a reliable interconnected transmission system. Therefore, the TSP and the Generator shall be required to submit specific information regarding the electrical characteristics of their respective facilities to each other as described below in accordance with ERCOT Requirements. 6.2 Data Submission by TSP. Upon request, the TSP shall provide transmission system data necessary to allow the Generator to meet any system protection and stability requirements within a reasonable period of time. 6.3 Data Submission by Generator. Upon request, the Generator shall provide Plant data to the TSP within a reasonable period of time, including a completed copy of the following forms contained in ERCOT's Generation Interconnection Procedure: (1) Plant Description/Data and (2) Generation Stability Data. Upon the Generator's request, the TSP shall supply the Generator with any data for the Generator's Plant(s) in the possession of the TSP, and the Generator shall review, revise, and supplement such data as necessary to accurately model the Generator's Plant(s) in electrical studies, and shall provide such revisions and supplements to the TSP and ERCOT. Data submissions shall be "as-built" data or "as-tested" performance data. Data submitted for stability models shall be compatible with the ERCOT standard models. If there is no compatible model, the Generator will work with an ERCOT designated consultant to develop and supply a standard model and associated data. Data submissions by the Generator shall be made to both the TSP and ERCOT. 6.4 Data Supplementation. The Generator shall provide the TSP and ERCOT any data changes due to equipment replacement, repair, or adjustment. The TSP shall 12 provide the Generator any data changes due to equipment replacement, repair, or adjustment in the directly connected substation or any adjacent TSP-owned substation that may affect the GIF equipment ratings, protection, or operating requirements. The Parties shall provide such data no later than thirty (30) days after the date of the actual change in equipment characteristics. Also, the Parties shall provide to each other a copy of any additional data later required by ERCOT concerning these facilities. 6.5 Data Exchange. Each Party shall furnish to the other Party real-time and forecasted data as required by ERCOT Requirements. The Parties will cooperate with one another in the analysis of disturbances to either the Plant or the TSP System by gathering and providing access to any information relating to any disturbance, including information from oscillography, protective relay targets, breaker operations, and sequence of events records. ARTICLE 7. INSURANCE 7.1 Each Party shall, at its own expense, maintain in force throughout the period of this Agreement and until released by the other Party the following minimum insurance coverages, with insurers authorized to do business in Texas: A. Employers Liability and Worker's Compensation Insurance providing statutory benefits in accordance with the laws and regulations of the State of Texas. The minimum limits for the Employer's Liability insurance shall be One Million Dollars ($1,000,000) each accident bodily injury by accident, One Million Dollars ($1,000,000) each employee bodily injury by disease, and One Million Dollars ($1,000,000) policy limit bodily injury by disease. B. Commercial General Liability Insurance including premises and operations, personal injury, broad form property damage, broad form blanket contractual liability coverage (including coverage for the contractual indemnification) products and completed operations coverage, coverage for explosion, collapse and underground hazards, independent contractors coverage, coverage for pollution to the extent normally available and punitive damages to the extent normally available, and a cross liability endorsement, with minimum limits of One Million Dollars ($1,000,000) per occurrence/One Million Dollars 13 ($1,000,000) aggregate combined single limit for personal injury, bodily injury, including death and property damage. C. Comprehensive Automobile Liability Insurance for coverage of owned, non-owned, and hired vehicles, trailers or semi-trailers designed for travel on public roads, with a minimum combined single limit of One Million Dollars ($1,000,000) per occurrence for bodily injury, including death, and property damage. D. Excess Public Liability Insurance over and above the Employer's Liability, Commercial General Liability, and Comprehensive Automobile Liability Insurance coverage, with a minimum combined single limit of Twenty Million Dollars ($20,000,000) per occurrence/Twenty Million Dollars ($20,000,000) aggregate. E. The Commercial General Liability Insurance, Comprehensive Automobile Liability Insurance, and Excess Public Liability Insurance polices shall name the other Party, its parent, associated and affiliated companies, and their respective directors, officers, agents, servants, and employees ("Other Party Group") as additional insured. All policies shall contain provisions whereby the insurers waive all rights of subrogation in accordance with the provisions of this Agreement against the Other Party Group and provide thirty (30) days advance written notice to Other Party Group prior to anniversary date of cancellation or any material change in coverage or condition. F. The Commercial General Liability Insurance, Comprehensive Automobile Liability Insurance, and Excess Public Liability Insurance policies shall contain provisions that specify that the policies are primary and shall apply to such extent without consideration for other policies separately carried and shall state that each insured is provided coverage as though a separate policy had been issued to each, except the insurer's liability shall not be increased beyond the amount for which the insurer would have been liable had only one insured been covered. Each Party shall be responsible for its respective deductibles or retentions. G. The Commercial General Liability Insurance, Comprehensive Automobile Liability Insurance, and Excess Public Liability Insurance policies, if written 14 on a Claims First Made basis, shall be maintained in full force and effect for two (2) years after termination of this Agreement, which coverage may be in the form of tail coverage or extended reporting period coverage if agreed by the Parties. H. The requirements contained herein as to the types and limits of all insurance to be maintained by the Parties are not intended to and shall not in any manner, limit or qualify the liabilities and obligations assumed by the Parties under this Agreement. I. Within ten (10) days following execution of this Agreement, and as soon as practicable after the end of each fiscal year or at the renewal of the insurance policy and in any event within ninety (90) days thereafter, each Party shall provide certification of all insurance required in this Agreement, executed by each insurer or by an authorized representative of each insurer. J. Notwithstanding the foregoing, each Party may self-insure to the extent it maintains a self-insurance program; provided that, such Party's senior secured debt is rated at investment grade, or better, by Standard & Poor's. For any period of time that a Party's senior secured debt is unrated by Standard & Poor's or is rated at less than investment grade by Standard & Poor's, such Party shall comply with the insurance requirements applicable to it under Sections 7.1.A through 7.1.I. In the event that a Party is permitted to self-insure pursuant to this Section 7.1.J, it shall not be required to comply with the insurance requirements applicable to it under Sections 7.1.A through 7.1.I. K. The Parties agree to report to each other in writing as soon as practical all accidents or occurrences resulting in injuries to any person, including death, and any property damage arising out of this Agreement. ARTICLE 8. MISCELLANEOUS 8.1 Governing Law and Applicable Tariffs. A. THIS AGREEMENT FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, EXCLUDING CONFLICTS OF LAW PRINCIPLES THAT WOULD REFER TO THE LAWS OF ANOTHER 15 JURISDICTION. THE PARTIES SUBMIT TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS IN THE STATE OF TEXAS. B. This Agreement is subject to all valid, applicable rules, regulations, and orders of, and tariffs approved by, duly constituted Governmental Authorities. C. Each Party expressly reserves the right to seek changes in, appeal, or otherwise contest any laws, orders, rules, or regulations of a Governmental Authority. 8.2 No Other Services. This Agreement is applicable only to the interconnection of the Plant to the TSP System at the Point of Interconnection and does not obligate either Party to provide, or entitle either Party to receive, any service not expressly provided for herein. Each Party is responsible for making the arrangements necessary for it to receive any other service that it may desire from the other Party or any third party. This Agreement does not address the sale or purchase of any electric energy, transmission service, or ancillary services by either Party. 8.3 Entire Agreement. This Agreement, including all Exhibits, Attachments, and Schedules attached hereto, constitutes the entire agreement between the Parties with reference to the subject matter hereof, and supersedes all prior and contemporaneous understandings or agreements, oral or written, between the Parties with respect to the subject matter of this Agreement. There are no other agreements, representations, warranties, or covenants that constitute any part of the consideration for, or any condition to, either Party's compliance with its obligations under this Agreement. 8.4 Notices. Except as otherwise provided in Exhibit "C", any formal notice, demand or request provided for in this Agreement shall be in writing and shall be deemed properly served, given or made if delivered in person, or sent by either registered or certified mail, postage prepaid, overnight mail or fax to the address or number identified on Exhibit "C" attached to this Agreement. Either Party may change the notice information on Exhibit "C" by giving five (5) business days written notice prior to the effective date of the change. 16 8.5 Force Majeure. A. The term "Force Majeure" as used herein shall mean any cause beyond the reasonable control of the Party claiming Force Majeure, and without the fault or negligence of such Party, which materially prevents or impairs the performance of such Party's obligations hereunder, including but not limited to, storm, flood, lightning, earthquake, fire, explosion, failure or imminent threat of failure of facilities, civil disturbance, strike or other labor disturbance, sabotage, war, national emergency, or restraint by any Governmental Authority. B. Neither Party shall be considered to be in Default (as hereinafter defined) with respect to any obligation hereunder other than the obligation to pay money when due, if prevented from fulfilling such obligation by Force Majeure. A Party unable to fulfill any obligation hereunder (other than an obligation to pay money when due) by reason of Force Majeure shall give notice and the full particulars of such Force Majeure to the other Party in writing or by telephone as soon as reasonably possible after the occurrence of the cause relied upon. Telephone notices given pursuant to this Section shall be confirmed in writing as soon as reasonably possible and shall specifically state full particulars of the Force Majeure, the time and date when the Force Majeure occurred and when the Force Majeure is reasonably expected to cease. The Party affected shall exercise due diligence to remove such disability with reasonable dispatch, but shall not be required to accede or agree to any provision not satisfactory to it in order to settle and terminate a strike or other labor disturbance. 8.6 Default. A. The term "Default" shall mean the failure of either Party to perform any obligation in the time or manner provided in this Agreement. No Default shall exist where such failure to discharge an obligation (other than the payment of money) is the result of Force Majeure as defined in this Agreement or the result of an act or omission of the other Party. Upon a Default, the non-defaulting Party shall give written notice of such Default to the defaulting Party. Except as provided in Section 8.6 B, the defaulting Party shall have thirty (30) days from receipt of the Default notice within which to cure such Default; provided however, if such Default is not capable of cure within thirty (30) days, the defaulting Party shall commence such cure within thirty (30) days after notice and continuously and diligently complete such cure within ninety (90) days from 17 receipt of the Default notice; and, if cured within such time, the Default specified in such notice shall cease to exist. B. If a Default is not cured as provided in this Section, or if a Default is not capable of being cured within the period provided for herein, the non-defaulting Party shall have the right to terminate this Agreement by written notice at any time until cure occurs, and be relieved of any further obligation hereunder and, whether or not that Party terminates this Agreement, to recover from the defaulting Party all amounts due hereunder, plus all other damages and remedies to which it is entitled at law or in equity. The provisions of this Section will survive termination of this Agreement. 8.7 Intrastate Operation. The operation of the Plant by Generator shall not cause there to be a synchronous or an asynchronous interconnection between ERCOT and any other transmission facilities operated outside of ERCOT unless ordered by the Federal Energy Regulatory Commission under Section 210 of the Federal Power Act. The Parties recognize and agree that any such interconnection will constitute an adverse condition giving the TSP the right to immediately disconnect the TIF from the GIF, until such interconnection has been disconnected. The Generator will not be prohibited by this Section from interconnecting the Plant with facilities operated by the Comision Federal de Electricidad of Mexico, unless such interconnection would cause ERCOT utilities that are not "public utilities" under the Federal Power Act to become subject to the plenary jurisdiction of the Federal Energy Regulatory Commission. 8.8 No Third Party Beneficiaries. This Agreement is not intended to and does not create rights, remedies, or benefits of any character whatsoever in favor of any persons, corporations, associations, or entities other than the Parties, and the obligations herein assumed are solely for the use and benefit of the Parties, their successors in interest and, where permitted, their assigns. 8.9 No Waiver. The failure of a Party to this Agreement to insist, on any occasion, upon strict performance of any provision of this Agreement will not be considered a waiver of obligations, rights, or duties imposed upon the Parties. Termination or Default of this Agreement for any reason by the Generator shall 18 not constitute a waiver of the Generator's legal rights to obtain an interconnection from the TSP under a new interconnection agreement. 8.10 Headings. The descriptive headings of the various articles and sections of this Agreement have been inserted for convenience of reference only and are of no significance in the interpretation or construction of this Agreement. 8.11 Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which is deemed an original but all constitute one and the same instrument. 8.12 Amendment. This Agreement may be amended only upon mutual agreement of the Parties, which amendment will not be effective until reduced to writing and executed by the Parties. 8.13 No Partnership. This Agreement shall not be interpreted or construed to create an association, joint venture, agency relationship, or partnership between the Parties or to impose any partnership obligation or 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, or to otherwise bind, the other Party. 8.14 Further Assurances. The Parties agree to (i) furnish upon request to each other such further information, (ii) execute and deliver to each other such other documents, and (iii) do such other acts and things, all as the other Party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. Without limiting the generality of the foregoing, the TSP shall, at the Generator's expense, when reasonably requested to do so by the Generator at any time after the execution of this Agreement, prepare and provide such information in connection with this Agreement (including, if available, resolutions, certificates, opinions of counsel or other documents relating to the TSP's corporate authorization to enter into this Agreement and to undertake the obligations set out herein) as may be reasonably required by any potential lender to the Generator under a proposed loan agreement. The TSP will use commercially reasonable efforts to obtain any opinion of counsel reasonably requested by Generator, but the TSP shall not be in Default of any obligation under this Agreement if the TSP is unable to provide an opinion of counsel that will satisfy any potential lender 19 to the Generator. Specifically, upon the written request of one Party, the other Party shall provide the requesting Party with a letter stating whether or not, up to the date of the letter, that Party is satisfied with the performance of the requesting Party under this Agreement. 8.15 Indemnification and Liability. The indemnification and liability provisions of the PUCT Rule 25.202(b)(2) or its successor shall govern this Agreement. 8.16 Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER ANY PROVISION OF THIS AGREEMENT FOR ANY LOSSES, DAMAGES, COSTS OR EXPENSES FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFIT OR REVENUE, LOSS OF THE USE OF EQUIPMENT, COST OF CAPITAL, COST OF TEMPORARY EQUIPMENT OR SERVICES, WHETHER BASED IN WHOLE OR IN PART IN CONTRACT, IN TORT, INCLUDING NEGLIGENCE, STRICT LIABILITY, OR ANY OTHER THEORY OF LIABILITY; PROVIDED, HOWEVER, THAT DAMAGES FOR WHICH A PARTY MAY BE LIABLE TO THE OTHER PARTY UNDER ANOTHER AGREEMENT WILL NOT BE CONSIDERED TO BE SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES HEREUNDER. 8.17 Assignment. This Agreement may be assigned by either Party only with the written consent of the other; provided that either Party may assign this Agreement without the consent of the other Party to any affiliate of the assigning Party with an equal or greater credit rating and with the legal authority and operational ability to satisfy the obligations of the assigning Party under this Agreement. Any attempted assignment that violates this Section is void and ineffective. Any assignment under this Agreement shall not relieve a Party of its obligations, nor shall a Party's obligations be enlarged, in whole or in part, by reason thereof. Where required, consent to assignment will not be unreasonably withheld, conditioned, or delayed. 8.18 Severability. If any provision in this Agreement is finally determined to be invalid, void, or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Agreement. 20 8.19 Comparability. The Parties will comply with all applicable comparability and code of conduct laws, rules, and regulations, as amended from time to time. 8.20 Invoicing and Payment. Unless the Parties otherwise agree, invoicing and payment rights and obligations under this Agreement shall be governed by PUCT Rules or applicable Governmental Authority. Invoices shall be rendered to the paying Party at the address specified on, and payments shall be made in accordance with the requirements of, Exhibit "C". 8.21 Confidentiality. A. Subject to the exception in Section 8.21.B, any information that a Party claims is competitively sensitive, commercial or financial information under this Agreement ("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 Agreement or as a transmission service provider including disclosing the Confidential Information to ERCOT. 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 subsection, or if any third party or Governmental Authority makes any request or demand for any of the information described in this subsection, the disclosing Party agrees to promptly notify the other Party in writing and agrees to 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. B. This provision shall not apply to any information that was or is hereafter in the public domain (except as a result of a breach of this provision). 21 EXHIBIT "B" SYSTEM PROTECTION REQUIREMENTS System Protection Equipment shall consist of such control and protective devices installed, tested, and maintained by the Parties in accordance with the applicable ERCOT Requirements, NERC standards, and regulations of a Governmental Authority, including but not limited to, protective relaying systems and circuit breakers, as are necessary to protect personnel and equipment and to minimize deleterious effects to the GIF, the TSP System, and other entities connected to the TSP System. The TSP shall determine any changes to requirements for protection of the Point of Interconnection and the zone of protection around the Point of Interconnection and shall specify and implement the System Protection Equipment necessary to meet such requirements. The Generator shall have the right to review and comment on the necessary protection requirements and the TSP shall consider the Generator's comments when determining such requirements. Upon the TSP's determination of such requirements, the Generator shall, at its expense, provide corrections or additions to its System Protection Equipment in accordance with such determination. Prior to the Generator modifying any System Protection Equipment involving the Point of Interconnection, the Generator shall submit the proposed changes to the TSP for review and approval. The TSP's review and approval shall be for the limited purpose of determining whether such proposed changes are compatible with the TSP System. The TSP shall coordinate the relay system protection between the GIF and the TSP System. If the GIF operate to facilitate the interconnection of any of the Plant facilities to the Southwest Power Pool (or any other regional transmission organization other than ERCOT), the Generator will utilize open circuit breakers and air-break switches (which provide visible open indication) as a means of isolating such Plant facilities from ERCOT. The Generator will design, construct, and operate its electrical facilities such that all Plant auxiliary power sources for each generating unit will come from the same regional transmission organization as the generating unit's output is connected. 22 Plant specific system protection requirements are set forth in the individual Facility Schedules where appropriate. 23 EXHIBIT "C" NOTICE AND EFT INFORMATION OF THE GENERATION INTERCONNECTION AGREEMENT (a) All notices of an operational nature shall be in writing and/or may be sent between the Parties via electronic means including facsimile as follows:
If to Transmission Service Provider: If to Generator: TXU Electric Delivery Company TXU Generation Company Attn: Transmission Grid Shift Supervisor Attn: Generation Controller 2233 B Mountain Creek Parkway 1717 N. Main St., Suite 19-181 Operational/Confirmation Fax: Operational/Confirmation Fax: (214) 875-9069 (214) 273-6884 24 Hour Telephone: (214) 743-6897 24 Hour Telephone: (214) 875-9779 E-mail: N/A E-mail: psogen@txu.com (b) Notices of an administrative nature: If to Transmission Service Provider: If to Generator: TXU Electric Delivery Company TXU Generation Company Attn: Jeff Herring Attn: Greg Karlik 1601 Bryan Street 1601 Bryan Street Dallas, Texas 75201-3411 Dallas, Texas 75201-3411 Fax: (214) 812-2788 Fax: (214) 812-8820 Phone: 214-812-8613 Phone: (214) 812-8586 E-mail: jherring@txu.com E-mail: greg.karlik@txu.com (c) Notice for statement and billing purposes: If to Transmission Service Provider: If to Generator: TXU Electric Delivery Company TXU Generation Company Attn: Jeff Herring Attn: Greg Karlik 1601 Bryan Street 1601 Bryan Street Dallas, Texas 75201-3411 Dallas, Texas 75201-3411 Phone: 214-812-8613 Phone: (214) 812-8586 E-mail: jherring@txu.com E-mail: greg.karlik@txu.com (d) Information concerning Electronic Funds Transfers: If to Transmission Service Provider: If to Generator: Bank Name: N/A Bank Name: N/A Address: N/A Address: N/A ABA No. N/A ABA No. N/A For credit to: N/A For credit to: N/A Account No. N/A Account No. N/A
24 EXHIBIT "D" SUPPLEMENTAL TERMS AND CONDITIONS SPECIFIC TO TSP-OWNED SUPPORT FACILITIES, GENERATOR-OWNED SUPPORT FACILITIES, TSP SUPPORT SERVICES, AND AREAS OF COMMON SWITCHYARDS A. OWNERSHIP 1. Ownership and change of ownership of facilities at points where Generator-Owned Support Facilities interconnect with TSP-Owned Support Facilities shall be in accordance with the provisions of this Section A, unless otherwise specified in the Facility Schedules. 2. AC and DC Power Supply Equipment (i) AC and DC Power Supply from Generator-Owned Support Facilities to the TSP - The Generator owns the AC and DC distribution circuit breaker panels (including all AC and DC circuit breakers) as well as all wiring and facilities on the source side of the Generator's AC and DC distribution circuit breaker panels for AC and DC power supplied by the Generator to the TSP System, as specified in the Facility Schedules. The TSP owns all wiring and facilities on the load side of the Generator-owned AC and DC distribution circuit breaker panels up to the point where the TSP's wiring connects with the Generator-owned AC and DC circuit breakers described herein, as specified in the Facility Schedules. (ii) AC and DC Power Supply from TSP-Owned Support Facilities to the Generator - The TSP owns the AC and DC distribution circuit breaker panels (including all AC and DC circuit breakers) as well as all wiring and facilities on the source side of the TSP's AC and DC distribution circuit breaker panels for AC and DC power supplied by the TSP to the Generator facilities, as specified in the Facility Schedules. The Generator owns all wiring and facilities on the load side of the TSP-owned AC and DC distribution circuit breaker panels up to the point where the Generator's wiring connects with the TSP-owned AC and DC circuit breakers described herein, as specified in the Facility Schedules. 3. Control/Relaying Panels - Ownership changes where one Party's wires connect to a control/relaying panel owned by the other Party or where one Party's equipment mounts on a control/relaying panel owned by the other Party. 4. Annunciator Panels - Unless otherwise specified in a Facility Schedule, the following will govern with respect to Annunciator Panels: (i) The Generator owns annunciator panels located within the confines of the Plant control room/building. The TSP owns the wiring connecting Generator-owned annunciator panels to the TSP System. (ii) The TSP owns annunciator panels located within the confines of the Common Switchyard control house. The Generator owns the wiring connecting TSP-owned annunciator panels to Generator-owned equipment. 5. Remote Terminal Units ("RTU") (i) For all connections made between a Generator-owned RTU and the TSP System, the TSP owns the wiring from the TSP System to the point where it connects to the Generator-owned RTU. 25 (ii) For all connections made between a TSP-owned RTU and Generator-owned equipment, the Generator owns the wiring from the Generator-owned equipment to the point where it connects to the TSP-owned RTU. 6. ERCOT Polled Settlement Metering Equipment ("EPS Metering Equipment") - The TSP owns all EPS Metering Equipment, unless otherwise specified in the Facility Schedules. The Generator owns any wiring connecting Generator-owned equipment to the EPS Metering Equipment. 7. Digital Fault Recorders ("DFR") (i) For all connections made between a Generator-owned DFR and TSP System, the TSP owns the wiring from the TSP System to the point where it connects to the Generator-owned DFR. (ii) For all connections made between a TSP-owned DFR and Generator-owned equipment, the Generator owns the wiring from the Generator-owned equipment to the point where it connects to the TSP-owned DFR. B. COMMON SWITCHYARDS 1. Grounds - The TSP will maintain all Common Switchyard grounds in neat condition, including gravel, and pest and weed control. 2. Grounding Grid - The integrity of all connections to the ground grid from all Generator-owned equipment located in Common Switchyards will be the responsibility of the Generator. If the Generator proposes to make grounding design changes or additions, the Generator shall provide written documentation and design drawings to the TSP for approval. The TSP shall review the Generator's documentation and (i) approve the proposed changes or (ii) provide comments to the Generator on such changes within thirty (30) days of receipt. For work activities in Common Switchyards that will require digging in areas in which the ground grid exists and which is utilized by both Parties, the Party responsible for the work activity will be responsible for maintaining the integrity of the ground grid. For any major additions, the Party responsible for the addition will ensure that the design requirements of the ground grid are met. 3. Drawing Updates - Each Party shall maintain up-to-date drawings of its Common Switchyard facilities. Copies of such drawings shall be made available when requested by the other Party. 4. Breakers - The Generator shall notify the TSP in advance of any testing, maintenance, or repair of Common Switchyard breakers and will allow the TSP to be present during such event. If possible, such advance notice shall be at least five (5) days in advance of any testing, maintenance, or repair. The Generator shall document all testing, maintenance, and repair and provide the TSP a copy of such documentation within a reasonable period of time after such event. C. TSP-OWNED SUPPORT FACILITIES 1. The TSP's Rights of Access and Use - Subject to, but to the fullest extent permitted under the applicable easements, the TSP shall have the right, through its authorized agents and employees, to enter into areas of the Plant and the GIF, for purposes of operating, maintaining, repairing, modifying, replacing, removing, inspecting, or obtaining measurements or recordings from the TSP-Owned Support Facilities. The Parties acknowledge and agree that such rights include the use of ancillary facilities and resources, including 26 reasonable use of parking space, bathrooms, and water, as may be necessary or desirable in furtherance of the TSP's authorized use of the TSP-Owned Support Facilities. 2. Notification of TSP Access and Use - Prior to TSP personnel, or its contractors, entering a Plant, a Plant control room, or a Common Switchyard, such personnel shall verbally communicate to the Plant control room personnel (i) their intent to enter the Plant, Plant Control Room, or Common Switchyard, and (ii) the scope of activities they plan to perform in such Plant, Plant control room, or Common Switchyard. 3. Non-Interference By the TSP - In connection with the TSP's use of the TSP-Owned Support Facilities in the manner described in subsection 1 above, (i) TSP shall make reasonable efforts to minimize interference with the Generator's operation of the Plant facilities and the TSP shall not use the Plant facilities or undertake any activities on or pertaining to or which may otherwise impact, the Plant facilities, which may materially impair, or otherwise interfere with, the Generator's use of the Plant facilities, as more fully described in subsection 1 above, and (ii) the TSP shall not permit any third parties (including its contractors or agents) to use the Plant facilities, or undertake any activities on or pertaining to the Plant facilities, without the prior consent of the Generator. Except to the limited extent expressly permitted in this Agreement, the TSP shall not deny Generator personnel, or its contractors, access to the Plant facilities. 4. Non-Interference by the Generator - The Generator shall not use the TSP-Owned Support Facilities or undertake any activities on or pertaining to or which may otherwise impact, the TSP-Owned Support Facilities, which may materially impair, or otherwise interfere with, the TSP's use of the TSP-Owned Support Facilities, as more fully described in subsection 1 above. The Generator shall not permit any third parties (including its contractors or agents) to use the TSP-Owned Support Facilities, or undertake any activities on or pertaining to the TSP-Owned Support Facilities, without the prior consent of the TSP. Except to the limited extent expressly permitted in this Agreement, the Generator shall not deny TSP personnel, or its contractors, access to the TSP-Owned Support Facilities. 5. Costs and Expenses - The Generator hereby agrees that the TSP shall not be obligated to pay Generator any fees or charges, and Generator shall not impose or attempt to seek payment of any fees or charges, for or relating to the TSP's use of the TSP-Owned Support Facilities. 6. Construction Activities - Approval of Construction Plan - The TSP may, at any time and at its sole cost and expense, prepare a construction plan describing and addressing the proposed alteration, removal, or relocation of TSP-Owned Support Facilities (hereinafter "Construction Plan"). Unless different timeframes are agreed to between the TSP and the Generator, the TSP shall submit the Construction Plan to Generator at least sixty (60) days prior to the date on which the TSP proposes to commence the construction activities described in the Construction Plan. Within thirty (30) days following its receipt of that Construction Plan, the Generator shall either approve or disapprove, in writing, the proposed Construction Plan; provided, however, that the Generator shall not withhold its approval of the Construction Plan, unless the Generator reasonably determines that the Construction Plan would, if implemented in the specific manner proposed, substantially impair or interfere with the Generator's use of the Plant and/or GIF, for purposes of generating electricity, and proposes a commercially reasonable alternative construction plan. 7. Construction and Relocation Activities - Performance of Work - Upon approval of the Construction Plan, as provided for in subsection 6 above, the TSP shall proceed to perform the construction activities and related work (hereinafter "Work") described or provided for in such Construction Plan. All Work will be performed at the TSP's sole cost and expense. The TSP may, in its discretion, use third party contractors and subcontractors to perform all or 27 part of the Work. The Work shall be performed and completed in substantial compliance with the approved Construction Plan pertaining to that Work. In addition, the TSP will, in performing such Work, substantially comply with such work site practices or procedures as the Generator may propose and provide to the TSP, provided that such practices and procedures are no more stringent than those commonly imposed, consistent with established construction industry standards on contractors performing similar types of construction activities and work. The Generator shall reasonably cooperate with and support the TSP in its completion of Work, in accordance with subsection 4 above. Subject to and contingent upon obtaining such cooperation from the Generator, the TSP shall use reasonable efforts to complete the Work in accordance with any construction schedule or milestone dates, designated as part of, or in connection with, the approved Construction Plan, for or pertaining to the Work. 8. Identification of Certain Specified Facilities - The TSP may, upon reasonable notice to the Generator, and in a manner reasonably acceptable to the Generator, mark or label certain of the TSP-Owned Support Facilities. Such marking efforts may include, without limitation, painting such TSP-Owned Support Facilities, or portions thereof, a distinctive color. D. TSP SUPPORT SERVICES 1. Provision and Cost - During the term of this Agreement, the Generator shall, at no cost to the TSP, provide the following TSP Support Services: (i) The Generator will, upon request of the TSP, operate TIF breakers via control handles located in the Plant control room, to the extent on-site, adequately trained, Generator personnel are available. (ii) The Generator will use reasonable efforts to observe all TSP-Owned Support Facilities and Generator-Owned Support Facilities in the control room that provide indication, status, or alarms regarding TIF facilities and will use reasonable efforts to notify the TSP, as soon as reasonably possible, of any abnormal condition of any TIF detected by such an observation. (iii) The Generator will notify the TSP, as soon as reasonably possible, of any abnormal condition of any TIF or any abnormal situation affecting any TIF which it detects during its normal patrol of the GIF in the Common Switchyard or which it otherwise becomes aware of. 2. Default - If, after giving the requisite advance written notice, but prior to the effective date of termination of the Agreement or a Facility Schedule (as the case may be), the Generator fails to perform its obligation to provide TSP Support Services, in addition to, and notwithstanding any contrary provisions in Section 8.6 of Exhibit A, the TSP shall have the right to immediately perform the TSP Support Services, as necessary, without any prior written notification to the Generator. 3. Termination / Addition of TSP Support Services - The TSP may terminate, in whole or in part, any TSP Support Services at any time by providing written notice of such termination to the Generator. The notice of termination will specify the effective date of any such termination, and the TSP Support Service(s) or any part thereof to be terminated. New TSP Support Services may be added to this Agreement by mutual agreement of the Parties. E. GENERATOR-OWNED SUPPORT FACILITIES 1. Provision - The Generator will furnish electricity to the TSP at no cost for use by the TSP as specified in the Facility Schedules, in connection 28 with its activities on the land or within those facilities included within the easements executed between the TSP and the Generator in connection with the Plants. The Parties further acknowledge and agree that: (i) such electricity will be furnished to the TSP solely in its capacity as a tenant of the Generator as an incident of tenancy; and (ii) the TSP will not knowingly permit such electricity to be resold to or used by others. 2. Default - Notwithstanding any contrary provisions in Section 8.6 of Exhibit A, if the Generator fails to maintain the Generator-Owned Support Facilities in proper working order so as to create a serious threat to the reliability of the TSP System, TSP shall have the right to take any action the TSP reasonably deems necessary to restore the reliability of the TSP System, including, but not limited to, repair or replacement of the Generator-Owned Support Facilities. The TSP shall be responsible for all costs incurred by the TSP in connection with the TSP's actions under this Section. 3. Modification - The Generator will notify the TSP immediately in writing if the Generator obtains information that gives it good cause to believe that any provision of Section E of Exhibit "D" will materially adversely affect the Generator's (i) ability to retain its Exempt Wholesale Generator status; or (ii) compliance with any Texas or federal statutory or regulatory requirements governing the Generator. The Generator's notice will include a detailed explanation of the reasons for the Generator's concerns. The Parties agree to take such actions as may reasonably be required of each of them to avoid such a result, while at the same time retaining for each Party to the fullest extent possible, the benefits of its rights under this Agreement. F. CONDEMNATION Should any portions of the Generator's real property that include any TSP-Owned Support Facilities and/or Generator-Owned Support Facilities be appropriated or acquired by any governmental agency or other party having the power of eminent domain for public purpose or use, then those TSP-Owned Support Facilities and/or Generator-Owned Support Facilities not condemned, appropriated, or acquired by such agency or other party shall, at the TSP's option, be removed from the condemned or appropriated portion of the Plant and GIF, at the TSP's cost, unless the TSP negotiates a separate arrangement with the appropriate agency or other party. The Generator shall not interfere with the TSP's right to negotiate with the condemning authority or government agency or other party. Further, to the extent that all or any portion of the Generator's real property that contain any TSP-Owned Support Facilities and/or Generator-Owned Support Facilities become the subject of a condemnation proceeding, the Parties shall, at the TSP's request, pursue their best efforts to sever the TSP's interest in the TSP-Owned Support Facilities and Generator-Owned Support Facilities, and to have any condemnation awards specifically allocated between the respective rights and interest of the TSP and the Generator. The Generator shall immediately notify the TSP of any condemnation action or proceeding which may be filed pertaining to the Plant and/or GIF. The Generator shall also notify the TSP of any such threatened condemnation and agrees not to sell the Plant or GIF, or any portions thereof, to such acquiring agency or other party, in lieu of condemnation, without providing written notice to the TSP, at least ninety (90) days prior to the proposed sale. G. ABANDONMENT 1. Notice - In the event the Generator proposes to abandon all or a portion of any of the Plant and/or GIF containing any TSP-Owned Support Facilities and/or Generator-Owned Support Facilities, the Generator shall give the TSP prior written notice, at least ninety (90) days before such proposed abandonment, and provide the TSP an opportunity to purchase such abandoned facilities or portions thereof (subject to any applicable statutory or regulatory priorities) upon or within which such TSP-Owned Support Facilities and/or Generator-Owned Support Facilities are located, such purchase to be at and for a price and upon terms as may be then agreed to between the Parties, 29 provided, however, neither such notice nor such abandonment will relieve Generator of its obligations under this Agreement should TSP elect not to purchase such facilities. The TSP shall have a period of thirty (30) days from the date of delivery of such notice within which to notify the Generator that it intends to negotiate with the Generator in respect of its rights to purchase such portions of the Plant and/or GIF. In the event that the TSP gives such notice, the Parties shall promptly proceed to negotiate in good faith with respect to TSP's prospective purchase of such portions of the Plant and/or GIF. The Generator shall not proceed with or consummate its proposed abandonment for a period of sixty (60) days from its receipt of that notice, unless the TSP gives the Generator written notice indicating that the TSP no longer wishes to negotiate for the purpose of purchasing such portions of the Plant and/or GIF. 2. Rights of the TSP - In the event of any sale of all or a portion of the Plant and/or GIF to another entity, such sale shall be subject to the rights of the TSP under this Agreement, with regard to access to and use of the TSP-Owned Support Facilities and Generator-Owned Support Facilities. Any deed or other instrument of conveyance pertaining to TSP-Owned Support Facilities and/or Generator-Owned Support Facilities from the Generator to another purchasing entity must reference the TSP's rights under this Agreement, and its related rights pursuant to the applicable easement agreements, and clearly indicate that the TSP's easement rights, as provided for in the applicable easement agreements, run with the transferred portion of the Plant and/or GIF, and all related improvements or real property. H. LIENS 1. Discharge and Release - In the event that any portion of the TSP-Owned Support Facilities and/or Generator-Owned Support Facilities becomes subject to any mechanics', artisans' or materialmen's lien, or other encumbrance chargeable to or through the Generator, the Generator shall promptly cause such lien or encumbrance to be discharged and released of record, without cost to the TSP, and shall indemnify the TSP against all costs and expenses (including reasonable attorney's fees) reasonably incurred in discharging and releasing such lien or encumbrance; provided, that if any such lien or encumbrance is not so discharged and released after prior written notice by the TSP to the Generator, and the Generator fails to reasonably obtain such release or discharge, then the TSP may pay for or secure the release or discharge thereof at the expense of the Generator. 2. Exclusion of TSP Support Facilities - In the event the Generator grants a lien on the Plant and/or GIF, the Generator agrees that such lien shall not include the TSP-Owned Support Facilities or Generator-Owned Support Facilities or, in the event that any mortgage granted by the Generator must grant a lien on the TSP-Owned Support Facilities and/or Generator-Owned Support Facilities under law in order to grant a lien on the Plant and/or GIF, the Generator agrees that prior to execution of any such mortgage the Generator shall cause the Generator's mortgagee(s) to execute and deliver an agreement with the TSP to reconvey the TSP-Owned Support Facilities to the TSP and to subordinate its lien or encumbrance on the TSP-Owned Support Facilities and Generator-Owned Support Facilities to the rights of the TSP. All rights of the TSP to use the TSP-Owned Support Facilities and Generator-Owned Support Facilities as described in this Agreement shall be senior to any lien or encumbrance created by the Generator. I. DISCONTINUED USE The TSP may upon reasonable notice to the Generator, and in the TSP's sole discretion, discontinue the TSP's use of any designated TSP-Owned Support Facilities or Generator-Owned Support Facilities. Upon giving such notice, the TSP shall reasonably cooperate with the Generator for purposes of implementing any measures that may be necessary to prevent the discontinued use of such TSP-Owned Support Facilities or Generator-Owned Support Facilities from becoming a safety hazard to the Generator's personnel working at the Plant and GIF. In the event the TSP desires to install its own facilities to deliver AC or DC 30 power to the TSP Support Facilities, which previously derived AC or DC power from Generator-Owned Support Facilities, the Generator will allow the TSP to install such facilities in accordance with the easement agreements referenced in Section 5.2 of "Exhibit A" of this Agreement. The TSP shall have no other obligation with respect to the discontinued use of such facilities, including, without limitation, as pertains to their maintenance, repair, appearance, removal, or alteration. J. LABOR AGREEMENTS The TSP and the Generator shall cooperate and coordinate their activities in an effort to ensure that activities performed by either of the Parties pursuant to this Exhibit "D" do not conflict with, and are not inconsistent with, the duties and obligations of the Generator under the Generator's present or future labor agreements. In the event, however, that any such activities are alleged or found to constitute a breach of such labor agreements, the TSP shall not be liable for any such breach. K. ENVIRONMENTAL ISSUES With respect to those activities, which are to take place within a Plant, a Plant control room, or a Common Switchyard, the Party performing the work or otherwise managing the asset or operations therein shall be responsible for (i) ensuring that its activities are performed in compliance with all applicable environmental regulations, (ii) remediating any spills or environmental contamination or concerns resulting from or occurring in connection with its activities as required by and in accordance with applicable regulations, and (iii) removing and properly disposing of all waste materials. The Party performing the work or other activities shall, prior to commencement thereof, communicate to the other Party the job scope and needs so that both Parties are fully aware of their respective environmental responsibilities. In the event of a spill or the discovery of environmental contamination that potentially may impact the other Party's property or operations, both Parties shall work together to establish a coordinated plan of action for responding to the spill or contamination. L. INCIDENT REPORTING AND INVESTIGATION If one Party becomes aware of the occurrence of an incident in a Plant, a Plant control room, or a Common Switchyard that affects or is capable of affecting the TSP System, GIF, or Plant reliability, safety, environmental compliance, or equipment failure, such Party shall promptly report the incident to the other Party. This will be a brief but informative report that includes background, description of the incident, conclusion, corrective action, and person(s) responsible for corrective action. If the seriousness of the incident warrants, both Parties shall participate in a joint investigation and produce a formal report of the incident. Both Parties shall have the right to declare the incident serious enough to warrant a joint investigation. M. SAFETY PROCEDURES AND POLICIES 1. Interlock Defeated or Temporary Changes to Equipment - Prior to either Party making any temporary changes to the TIF, GIF or Plant equipment, or bypassing or defeating of controls, trip, alarms or other interlock devices associated with the TIF or GIF, the Party making such changes shall inform the other Party of the changes that may affect the operation of the other Party. This includes software interlocks such as those found in programmable controllers (PLC), computers or other programmable devices, as well as hard wired or mechanical interlocks. 2. Job Briefings - OSHA regulations require job briefings (tailboard conferences) to be conducted when more than one employee is to be involved in a job. The job plan must be communicated to all affected personnel. The briefing may include at least one Generator representative and shall cover such topics as 31 hazards associated with the job, work procedures involved, special precautions, energy source controls and/or isolation and personal protective equipment. The TSP will contact the Plant production supervisor to make arrangements for a Generator employee to be briefed during the tailboard conference. 3. Safety - It is understood that, while employees or contractors of either the TSP or the Generator are within a Common Switchyard, the safety policies, procedures and practices adopted by each Party individually will be adhered to by all personnel. Each Party shall provide the other Party copies of its safety policies, procedures, and practices and shall provide the other Party any revisions in a timely manner. All involved parties will be made familiar with specific safety policies for their area of work. While employees or contractors of TSP are within the control room, or any other portion of the generating plant structure, they will abide by the following safety provisions: (i) TSP agrees that any safety-related assistance or initiatives undertaken by Generator will not relieve TSP from responsibility for the implementation of, and compliance with, safe working practices, as developed from their own experience, or as imposed by law or regulation, and will not in any way, affect the responsibilities resting with TSP under the provisions of this Agreement and to meet all safety requirements as specified by the Occupational Safety & Health Administration (OSHA) and any other applicable state or federal safety and health laws or regulations. (ii) In the event that a material safety data sheet (hereinafter "MSDS"), warning label, or other documentation concerning the use of hazardous chemicals at the work site, applies to any materials or equipment utilized by TSP as an aspect of the work, such documentation will be provided by TSP to Generator prior to the commencement of any such work. (iii) TSP will provide information to Generator regarding hazardous chemicals and/or consumable products that contain constituents listed in 40 CFR '372.65 used at Generator work site. TSP will report the amount of such material carried on and off the site, the amount actually used and the manner of use. (iv) TSP will provide for the duration of this Agreement, at its sole expense, adequate first-aid facilities for employees of TSP and its contractors. (v) TSP acknowledges and agrees that all employees of TSP and its contractors performing work at the work site are required to view Generator's "Contractor/Visitor Safety Orientation" video, when applicable, and to read and adhere to Generator's "Contractor/Visitor Safety Booklet" prior to performing any work on the work Site. (vi) Appropriate protective equipment will be worn by employees of TSP and its contractors while on the work site. In addition, when any employee of TSP and its contractors are performing work which may expose that person to potential hazards, TSP acknowledges and agrees that such person will wear appropriate clothing specific to and adequate for that exposure. (vii) TSP will take all reasonable precautions to prevent any accident in connection with the performance of work, including, but not limited to, putting up and maintaining sufficient barriers and lights, if appropriate.