March 15, 2012 Aril
MINUTES
WEST MEMPHIS CITY COUNCIL
March 15, 2012
A regular meeting of the West Memphis City Council was held on Thursday, March 15,2012 at 1:30 p.m. in the
City Council Chambers at City Hall,205 S. Redding,West Memphis, Arkansas.
Mayor Johnson called the meeting to order at 1:30 p.m. invocation was given by John Beaumont, Director of
Young Life at First Presbyterian Church. Phillip Para, City Clerk, called the roll. Those present were: Mayor
William H. Johnson, City Attorney David Peeples, City Treasurer Frank Martin and Councilors, Lorraine Robinson,
Tracy Catt, James Pulliaum, Ramona Taylor, Marco McClendon, Willis Mondy, and James Holt. Absent were:
Councilors Phillip Carter, Herman Coleman and Taz Tyrone. Quorum being present, Mayor Johnson proceeded
with the meeting.
MINUTES
Councilwoman Taylor made a motion, seconded by Councilman Mondy,to dispense with the reading of the
Minutes of the March 1, 2012 City Council meeting and approve as submitted. Upon voice vote,the voting was
unanimous to approve.
OLD BUSINESS
NEW BUSINESS
Mayor Johnson stated there was a Utility Commission matter that needed to be added to the agenda.
Councilman Pulliaum made a motion, seconded by Councilwoman Taylor to add R-1 to the agenda. Upon voice
vote,the voting was unanimous.
Councilor Pulliaum made a motion, seconded by Councilor Taylor to suspend the rules and read the title only of
R-1. Upon voice vote,the voting was unanimous.
R-1 A Resolution to approve the Independence Steam Electric Station and White Bluff Steam Electric Station
Marketing Agreement and the MISO Integration Agreement, and for other purposes
City Attorney Peeples read the Resolution. Councilor Taylor moved, seconded by Councilor Mondy to approve
the Resolution. Todd Pederson, Engineer for West Memphis Utilities gave a brief overview of the situation and
said this Resolution comes to the City Council with a Utility Commission recommendation. He said City Attorney
Peeples and the Utility Engineers have also been very involved in this agreement. After discussion, the
Resolution was approved by unanimous vote and assigned No 2003.
PERMISSION REQUESTS
Councilman Pulliaum made a motion, seconded by Councilwoman Taylor to approve payment of$83,610.76 to
the Arkansas Municipal League for auto and truck insurance, including liability and collision insurance. Upon
voice vote,the voting was unanimous to approve.
Councilman Pulliaum made a motion, seconded by Councilwoman Taylor to distribute the funds from Southland
Gaming& Racing that are to benefit young girls and boys in the community in the amount of$80,717.84 splitting
in four equal amounts ($20,179.46 ea.)to the West Memphis Boys Club,the Wonder City Boys Club, the LR
Jackson Girls Club, and the JW Rich Girls Club. Upon voice vote,the voting was unanimous to approve.
Councilman Catt made a motion, seconded by Councilman Holt to distribute the disaster relief funds from
Southland Gaming& Racing in the amount of$8986.24 giving 70%to the Good Neighbor/Love Center($6290.37)
and 30%to the Delta Neighborhood Action Council ($2,695.87). Upon voice vote,the voting was unanimous to
approve.
COMMITTEE REPORTS
Public Works Committee—Councilwoman Taylor reported they did not have a quorum at their last meeting. She
asked that they stay for a brief meeting immediately following this City Council meeting.
Fire Commission—Councilor Catt reported there have been 2 resignations, 1 promotion to driver, and 1
promotion to Lieutenant, and no citizen's complaints. Two paramedics are attending the Firefighter Standard
School. EMS collections as of 2/27/12 were $86,564. Alderman Catt passed out information on RUOK? and
stated that he is still working with the Utility Department on this project. Chief Gately reported they were having
trouble keeping all 6 tornado sirens working and is seeking grant funds around $100,000 to replace the sirens.
State Representative Keith Ingram presented the Fire Department with grants funding to replace 6 fire nozzles.
Alderwoman Taylor announced the hospital was hosting a storm watchers training via interactive video on
Thursday, March 22.
ANNOUNCEMENTS
Mayor Johnson presented the City Council with resume's and said he would be making appointments to the Park
Commission, Auditorium Commission and the Library Board at the next City Council meeting.
"wh;nom,y
Councilwoman announced she is working along with the Public Works Department to have a city wide
clean-up day on April 7th in West Memphis in conjunction with the Great American Clean-Up and Keep Arkansas
Beautiful campaign. She encouraged everyone to get involved and help clean up West Memphis!
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Mayor Johnson announced the Eighth Street Mission for Jesus Christ banquet will be held Tuesday night.
Councilman Pulliaum announced the Governor's Conference on Tourism was a huge success with approximately
500 to 600 in attendance. He thank CEO of Southland Gaming and Racing Troy Keeping for"rolling out the red
carpet"and all his efforts in make this a wonderful time for all. Councilwoman Taylor also wanted to thank
Advertising and Promotion employees Don Christian, Sara Beth Christian and Josh Stark for all of their hard work
on this event.
CITIZENS REQUESTS
Shabaka Afrika-announced the next Crittenden County NAACP meeting will be held on Monday. Annette Hearn
with be the speaker and the topic is credit restoration and expunging criminal records. He asked why Citizen
Requests are no longer aired on the local access channel. City Attorney Peeples said that rather than the city
having the possibility of being liable of what is said and having to edit what was being broadcast,they decided it
was best not to air the citizens requests The city still allows anyone that wants to sign up for Citizens Requests a
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are allowed to address the City Council at each meeting.
Elvin Tate-Chaplin for the Veterans of Foreign Wars-requested permission to have a fundraising event to
benefit the VFW at James Hightower Park on June 9th They plan to have all kinds of booths, such as blood
pressure tests and HIV testing, entertainment including blues and gospel and food, booths, etc. The City Council
referred him to the Park Commission for approval.
Having no further business to come before the City Council, Councilor Pulliaum moved, second by Councilwoman
Taylor to adjourn. Upon voice vote,the voting was unanimous. The meeting adjourned at
1:6O p.m.
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PASSED and APPROVED thh; � � day ofAoh|. 2012.
^�-� ~�=1_-_ _^ , /m/le--L ,-y2
WILLIAM �.. JOHNSON,
ATTEST:
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^ - . (�[T�'CLERK
Minutes prepared by: Cindy Greenwood, Sr. City Clerk
EAI March 14,2012 Draft
INDEPENDENCE STEAM ELECTRIC STATION
AND
WHITE BLUFF STEAM ELECTRIC STATION
MARKETING AGREEMENT
Between
ENTERGY ARKANSAS, INC.
and
ARKANSAS ELECTRIC COOPERATIVE CORPORATION
and
CITY WATER AND LIGHT PLANT
OF THE CITY OF JONESBORO, ARKANSAS
and
CITY OF CONWAY, ARKANSAS
and
CITY OF WEST MEMPHIS, ARKANSAS
and
CITY OF OSCEOLA, ARKANSAS
and
ENTERGY MISSISSIPPI,INC.
and
ENTERGY POWER, INC.
and
EAST TEXAS ELECTRIC COOPERATIVE, INC.
Dated as of:
March , 2012
.............
EAI March 14,2012 Draft •
This Independence Steam Electric Station ("ISES") and White Bluff Steam Electric Station
("White Bluff") Marketing Agreement ("Agreement") is made as of, March 2012,
between and among Entergy Arkansas, Inc., a corporation organized and existing under the
laws of the State of Arkansas ("EAI"), Arkansas Electric Cooperative Corporation, an electric
cooperative corporation organized and operating under Act 342 of the Arkansas Acts of 1937
("AECC"), City Water and Light Plant of the City of Jonesboro, Arkansas, the City of
Conway, Arkansas, the City of West Memphis, Arkansas, the City of Osceola, Arkansas,
Entergy Mississippi, Inc., a corporation organized and existing under the laws of the State of
Mississippi, Entergy Power, Inc., a corporation organized and existing under the laws of the
State of Delaware and East Texas Electric Cooperative, Inc., a generation and transmission
cooperative organized and existing under the laws of the State of Texas (collectively, the
"Parties").
WHEREAS, the Parties to this Agreement are co-owners in White Bluff and/or ISES
(collectively, "JOUs")pursuant to the White Bluff and ISES Ownership Agreements;
WHEREAS, the Parties to this Agreement are parties to the White Bluff and ISES Operating
Agreements whereby EAI is given sole responsibility and authority for the management,
control, operation and maintenance of the plants and is authorized to act as agent in all
activities in connection with participants' interest in the JOUs on behalf of the other owners;
WHEREAS, the Parties to this Agreement anticipate participation in the Midwest
Independent Transmission System Operator, .Inc. Energy and Ancillary Services Market
("MISO Market")beginning on or near December 19, 2013;
WHEREAS, several of the Parties to this Agreement are presently parties in separate Power
Coordination and Interchange Agreements ("PCIAs") or, in the case of AECC, a Power
Coordination, Interchange and Transmission Service Agreement ("PCITSA"); and
WHEREAS, the Parties to this Agreement wish to coordinate their participation in the MISO
Market with respect to the JOUs so as to maximize the value of the JOUs and to share in the
value of these assets in proportion to their ownership share of the assets, with no preference
to any one owner;
Now, THEREFORE it is agreed as follows:
ARTICLE 1
TERM
1.1 This Agreement will be in effect from October 1, 2012 ("Effective Date") until the
first day on which all of the JOUs are retired from commercial service or such other
date as may be agreed upon by all the Parties("Term"). The portion of the Term prior
to participation in the MISO Market (or any successor market that is a part of the
MISO Market) is designated as the preparation period. The portion of the Term
beginning with entry into the MISO Market is designated as the Participation Period,
ARTICLE 2
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EAI March 14,2012 Draft
EFFECT ON OTHER AGREEMENTS
2.1 Upon commencement of the Participation Period this Agreement will supersede the
PCIAs and PCITSA to the extent the PCIAs or PCITSA are otherwise applicable to
Parties to this Agreement and to the extent consistent with other agreements between
EAI and an affected Party.
2.2 The PCIAs and PCITSA shall terminate upon commencement of the Participation
Period. The Parties agree to take all steps necessary to obtain any required approval
for the termination of the PCIAs and PCITSA by all applicable regulatory authorities.
The Parties further agree to support or not oppose any filing made by EAI to cancel
the PCIAs and PCITSA that is consistent with other agreements between EAI and an
affected Party.
2.3 Upon commencement of the Participation Period any provisions in this Agreement
that contradict, modify, or otherwise alter provisions in the White Bluff or ISES
Operating Agreements are deemed to replace or override such provisions of the White
Bluff or ISES Operating Agreements. Specifically, this Agreement is deemed to
supersede or modify the following provisions of the ISES and White Bluff Operating
Agreements, including but not limited to:
SU'',Operating .; e1 fi. 9" 3 White Bluff Operating°Agreement
2.2—Cost of Operation 1(a) — Authority for Operation and
Management
3.2-Agency 2(a)—Sharing of Costs-General
5.1 —Fuel Expenses 2(b)(v)—Fuel
8.1 —Sharing Energy 4(b)—Scheduling and Dispatching
8.2—Scheduling and Dispatching
8.4—Scheduling for Participants
2.4 If after four(4)years after the commencement of the Participation Period, in the event
that this Agreement is terminated or AECC withdraws from this Agreement, EAI
shall amend the White Bluff Operating Agreement and shall file with the Federal
Energy Regulatory Commission ("FERC") amendments to the ISES Operating
Agreement in the following respects:
White Bluff:
• Section 1(a), Authority for Operation and Management: Define agency as limited
to plant operations and maintenance.
• Section 2(a), Sharing of Costs — General: Define Operating Costs as including
costs of operation and maintenance.
• Section 2(b)(v): Price fuel cost at actual fuel costs.
• Section 4(b), Scheduling and Dispatching: Delete EAT's authority to schedule and
dispatch.
Independence:
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EAI March 14,2012 Draft
• Section 2.2, Cost of Operation: Define Cost of Operation as including costs of
operation and maintenance.
• Section 3.2, Agency: Define Agency under Operating Agreement as limited to
plant operations and maintenance.
• Section 5.1, Fuel Expenses: Price fuel cost at actual fuel.
• Section 8.2, Scheduling and Dispatching: Delete EAI's authority to schedule and
dispatch.
EAI and AECC agree that Section 6.1 of the Marketing Agreement survives in the
event this Agreement is terminated or AECC withdraws from this Agreement, and
AECC agrees to make the payments thereunder, so long as EAI is the operator of
White Bluff and ISES.
ARTICLE 3
MARKET COMMITTEE
3.1 Formation and Duties. There shall be a Market Committee composed of
representatives of the Parties to this Agreement. Subject to the limitations in this
Article 3, it shall generally be the duty of the Market Committee to review the market
results and future market plans for each of the JOUs, including the offer methodology
of the Combined Offer Approach set forth in Article 5 and Appendix A of this
Agreement, and the MISO settlements,payments,and related charges.
3.1.1 The Market Committee shall have authority to approve or direct modification
of the offer methodology prepared by EAI for the Combined Offer Approach
set forth in Article 5 and Appendix A of this Agreement, including the
determination of incremental cost for each JOU.
3.1.2 The Market Committee shall have authority to approve or direct modification
of procedures developed by EAI for unit commitment and dispatch of the
JOUs.
3.1.3 The Market Committee shall have authority to develop procedures for
establishing and modifying the offer adjustment applicable to the Combined
Offer Approach set forth in Appendix A of this Agreement.
3.1.4 The Market Committee and its members will have access to all operational,
cost and settlement data that pertains to the JOU's participation in the MISO
Market.
3.2 Restriction on Authority. The Market Committee shall have no authority to alter,
amend, or revise the express provisions of this Agreement.
3.3 Membership. The Market Committee shall be composed of one (1) representative of
each of the Parties to this Agreement. The representative of EAI to the Market
Committee shall serve as Chairman.
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EAI March 14,2012 Draft
3.3.1 Each of the Parties to this Agreement shall evidence its appointment of its
representative and an alternate representative to the Market Committee by
written notice from the chief executive of the Party to the other Parties to this
Agreement.
3.3.2 At any time that any of the Parties to this Agreement changes its
representative or designated alternate to the Market Committee, notice of such
change shall be provided to all Parties to this Agreement by written notice to
the members of the Market Committee.
3.3.3 Each of the Parties to this Agreement assumes full responsibility for the
personal expenses of its representative to the Market Committee.
3.4 Meetings. The Market Committee will schedule its meetings as it deems appropriate,
beginning with the first month following the Effective Date of this Agreement. Any
two (2) members of the Market Committee may call a special meeting of the Market
Committee by providing reasonable notice to the other Parties.
3.5 Voting. Each representative to the Market Committee of a Party that utilizes the
Combined Offer Approach, as set forth in Article 5 and Appendix A of this
Agreement, shall have one vote ("Voting Rights"). Representatives to the Market
Committee of Parties to this Agreement that utilize the Individual Approach, as
defined below in Article 5.1 and as set forth in Article 5 and Appendix B of this
Agreement, may attend the Market Committee meetings but will not possess any
Market Committee Voting Rights.
3.5.1 The Market Committee may take votes that are applicable to all of the JOUs
and votes that are specific to individual JOUs. JOU specific votes shall be
taken whenever two or more Market Committee members with an ownership
interest in the same JOU requests such a vote. In each case, a quorum of at
least 50% of the Parties to this Agreement with Voting Rights and an
ownership interest in a JOU subject to a Market Committee action to be taken
at that meeting must be represented at that Market Committee meeting in order
for the Market Committee to take any action requiring a vote. Parties to this
Agreement may be represented at a Market Committee meeting either in
person by a representative appointed pursuant to Article 3.3 of this
Agreement, by telephone, electronic interactive medium or by proxy. Parties
to this Agreement may be represented by proxy by providing written or
electronic notice to all Parties to this Agreement prior to the start of a Market
Committee meeting.
3.5.2 Unless otherwise specified herein, the Market Committee's authority to take
any action requires an affirmative vote of more than 50% of the
representatives of Parties to this Agreement that possess and may exercise
Voting Rights, provided however, that representatives of Parties to this
Agreement may exercise their Voting Rights only if the representative is
acting on behalf of a Party that has an ownership interest in the JOU subject to
the Market Committee's action.
3.5.2.1 Notwithstanding the foregoing, in any event where a Market
Committee vote results in a tie, generally applicable votes will be
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EAI March 14, 2012 Draft
weighted by the sum of each Party's ownership percentage in all four
units expressed in MW of rated capacity, divided by the sum of the
ownership percentage of all Parties to this Agreement that possess
Voting Rights, expressed in MW of rated capacity. Votes that are
applicable to specific units will be weighted by the ownership
percentage of each Party for that specific unit, expressed in MW of
rated capacity, divided by the sum of the ownership percentage of all
Parties to this Agreement that possess Voting Rights with respect to
the specific unit, expressed in MW of rated capacity.
3.5.3 In any circumstance where a super majority vote of Market Committee
members is required, the Market Committee may take action only upon the
affirmative vote of at least 75% of Market Committee members that possess
Voting Rights.
3.6 Right to Information. EAI will make available to the Market Committee all
information submitted to MISO, information necessary to perform its duties set forth
in Article 3.1, information required to verify that EAI has submitted offers in
accordance with the offer methodology adopted pursuant to Article 3.1.1, and upon
the direction of the Market Committee, any other information required to verify
settlements with the MISO Market. Notwithstanding the foregoing, other than billing
information, EAI's obligation to provide information to the Market Committee is
limited to information reasonably requested that cannot otherwise be readily obtained
in comparable form.
3.7 Relationship to Operating Committees. In complying with the terms and conditions
of this Agreement, the Market Committee shall at all times act independently of any
other committees established pursuant to any other agreements between or among any
of the Parties to this Agreement. The Operating Committees established in the ISES
and White Bluff Operating Agreements shall continue their roles and responsibilities
as defined therein.
ARTICLE 4
EAI OBLIGATIONS
4.1 Throughout the Term of this Agreement, EAI shall perform the following
responsibilities:
4.1.1 Manage this Agreement and coordinate Market Committee activities.
4.1.2 Submit offers to the MISO Market for Parties utilizing the Combined Offer
Approach.
4.1.3 Maintain systems that enable certification to make ancillary service offers and
the deployment of such ancillary services as directed by MISO for those
Parties utilizing the Combined Offer Approach.
4.1.4 Ensure that systems, processes and procedures are in place to manage the flow
of information to and from Parties that use the Individual Approach and to
accept deployment directions and determine energy allocations.
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EAI March 14,2012 Draft
4.1.5 Manage settlements with MISO for the JOUs, to the extent consistent with
Appendix A and Appendix B, including the resolution of billing disputes.
4.1.6 Respond to data requests from MISO or the MISO market monitor regarding
JOU operations.
4.1.7 Respond to inquiries of Parties.
4.1.8 Provide settlement information in a timely manner to Parties to this
Agreement.
4.1.9 Maintain proper registration of the JOUs in the MISO Market and
communications with the MISO Market.
4.1.10 Facilitate a Party's implementation of the Individual Approach, if selected.
ARTICLE 5
OFFERS OF ENERGY AND ANCILLARY SERVICES
5.1 As described more fully in this Article 5 and in Appendices A and B of this
Agreement, Parties to this Agreement may offer their respective shares of energy and
ancillary services from the JOUs into the MISO Market on either a combined basis
through EAI ("Combined Offer Approach") or on an individual basis ("Individual
Approach").
5.2 Combined Offer Approach.
5.2.1 EAI shall submit offers of energy and ancillary services from each of the
JOUs into both the day-ahead and real-time MISO Market on behalf of those
Parties to this Agreement using the Combined Offer Approach.
5.2.2 Submission of energy and ancillary services into the MISO Market pursuant to
the Combined Offer Approach shall occur pursuant to procedures and a
• documented offer methodology to approximate the incremental cost of
producing energy and ancillary services adopted by the Market Committee.
5.2.2.1 EAI shall develop an offer methodology for each of the JOUs to be
used when offering energy and ancillary services into the MISO
Market pursuant to the Combined Offer Approach. The offer
methodology developed by EAI shall adhere to the principles outlined
in Appendix A of this Agreement and shall be submitted by EAI to the
Market Committee for approval pursuant to Article 3.1.1.
5.2.2.2 EAI shall develop procedures for unit commitment and dispatch of the
JOUs applicable to the Combined Offer Approach and submit such
procedures to the Market Committee for approval pursuant to Article
3.1.2.
5.2.2.3 In the event that a Party disputes the Market Committee's disposition
of an issue that arises in connection with EAI's development or
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EAI March 14,2012 Draft
application of an offer methodology adopted by the Market
Committee, such disputes shall be resolved pursuant to Article 7.
5.2.3 EAI shall settle all charges and payments including MISO administrative
charges applicable to the JOUs. Each Party to this Agreement using the
Combined Offer Approach will receive its ownership percentage of the Net
Benefits from each JOU on a monthly basis, as described in Article 6. The fuel
related costs used to determine each Party's Net Benefits for the settlement
period, as provided for in this Article 5.2.3 and Article 6, will be based on
actual costs.
5.2.4 Any Party to this Agreement that submits energy and ancillary services offers
into the MISO Market through the Combined Offer Approach consents and
agrees that EAI shall act as agent on that Party's behalf solely for the purpose
of submitting energy and ancillary services offers into the MISO Market. Such
consent and agreement shall be documented through execution of the pro
forma agency agreement attached as Appendix C. EAI is not authorized to act
and affirmatively rejects any characterization as agent for any Party to this
Agreement in any capacity other than that specifically set forth herein and in
Appendix C.
5.2.5 Notwithstanding anything to the contrary herein, all Parties to this Agreement
shall offer their respective share of energy and ancillary services from the
JOUs into the MISO Market through the Combined Offer Approach for the
first twelve months of the Participation Period.
5.2.6 In discharging its responsibilities pursuant to this Agreement, EAI shall make
no adverse distinction between any of the JOUs or the Parties, except in the
exercise of sound business judgment in accordance with good utility practices.
5.3 Individual Approach.
5.3.1 Beginning on the first day of the month following the end of the first year of
the Participation Period, subject to the provisions of this Article 5.3, any of the
Parties to this Agreement may offer its respective share of energy and
ancillary services from the JOUs into the MISO Market through the Individual
Approach, provided however, that use of the Individual Approach by any of
the Parties to this Agreement is consistent with and otherwise compliant with
the MISO Market rules,policies, and procedures in effect at that time.
5.3.2 Any of the Parties to this Agreement that elect to use the Individual Approach
at any point during the Term of this Agreement shall:
5.3.2.1 Provide all Parties to this Agreement with six months advance written
notice of the election to use the Individual Approach.
5.3.2.2 Execute a pro forma agency agreement that reflects an election of the
Individual Approach as set forth in Appendix C.
5.3.2.3 Assume responsibility for direct, incremental costs of implementing
the Individual Approach.
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EAI March 14,2012 Draft
5.3.3 Notwithstanding Article 5.3.2, any Party that elects to use the Individual
Approach must first engage in good-faith discussions and negotiations with all
Parties to this Agreement with respect to any and all issues associated with
Combined Offer Approach that is prompting an election of the Individual
Approach.
5.3.3.1 If any dispute or controversy arises between the Parties to this
Agreement in connection with an election to use the Individual
Approach, such disputed matter shall be submitted to a committee
comprised of one designated representative in senior management of
the Party electing to use the Individual Approach and one designated
representative in senior management of EAI.
5.3.3.2 If any dispute or controversy remains between a Party electing to use
the Individual Approach and EAI following discussions pursuant to
Article 5.3.3.1, such dispute shall be resolved pursuant to Article 7.
5.3.4 Any Party to this Agreement that elects to use the Individual Approach will
remain responsible for fuel costs incurred by EAI in connection with the sale
of energy and ancillary services. The fuel related costs used to determine each
Party's Net Benefits for the settlement period, as provided for in this Article
5.3.4 and Article 6, will be based on actual costs.
5.3.5 Any Party to this Agreement that submits energy and ancillary services offers
into the MISO Market through the Individual Approach consents and agrees
that EAI shall act as agent on that Party's behalf solely in the capacity as
described in Appendix C. Such consent and agreement shall be documented
through execution of the pro forma agency agreement attached as Appendix C.
EAI is not authorized to act and affirmatively rejects any characterization as
agent for any Party to this Agreement in any capacity other than that
specifically set forth herein and in Appendix C.
5.3.6 Notwithstanding Article 5.3.2.3, in the event that a Party to this Agreement
elects to implement the Individual Approach after another Party to this
Agreement has elected to implement the Individual Approach, the succeeding
Party(or Parties) shall contribute to the costs incurred by the Party(or Parties)
previously electing to implement the Individual Approach. The Parties
employing the Individual Approach will work together to reach a mutually
agreeable solution for sharing direct costs associated with implementing the
Individual Approach.
ARTICLE 6
FEES AND PAYMENTS
6.1 Energy Adder. EAI will collect an energy adder from all Parties to this Agreement.
Costs assessed pursuant to this Article 6.1 do not include Costs of Operation or
Operating Costs, as defined in either the ISES or White Bluff Operating Agreements.
6.1.1 Beginning on the first day of the Participation Period and continuing through
December 31, 2018, each of the Parties to this Agreement shall remit to EAI
an energy adder equal to $0.18/MWh for all energy generated and allocated to
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EAI March 14,2012 Draft
each Party's benefit. Notwithstanding the foregoing, the energy adder set forth
in this Article 6.1.1 shall not exceed, in any calendar year, for any individual
Party, the product of that individual Party's ownership percentage multiplied
by$4 million.
6.1.2 Beginning January 1, 2019 and continuing through the Term of this
Agreement, each of the Parties to this Agreement shall remit to EAI an energy
adder equal to $0.12/MWh for all energy generated and allocated to each
Party's benefit, provided however, that the energy adder set forth in this
Article 6.1.2 shall be adjusted for inflation from January 1, 2019 based on the
Services Less Energy Services Consumer Price Index as maintained by the
U.S. Bureau of Labor Statistics. Each January 1 thereafter, the energy adder
shall be adjusted for inflation based on the Services Less Energy Services
Consumer Price Index as maintained by the U.S. Bureau of Labor Statistics.
Notwithstanding the foregoing, the energy adder set forth in this Article 6.1.2
shall not exceed, in any calendar year, for any individual Party, the product of
that individual Party's ownership percentage multiplied by $2.5 million,
provided however, that the maximum energy adder set forth in this Article
6.1.2 shall be escalated in proportion to any inflation-based adjustments to the
per MWh energy adder set forth in this Article 6.1.2.
6.2 Individual Approach Invoices and Payments. On a monthly basis, EAT shall provide a
consolidated invoice ("Invoice") to each of the Parties to this Agreement that uses the
Individual Approach, by the 15th business day of each calendar month (or on such
other schedule as is mutually agreed on by EAI and a Party to this Agreement). The
Invoice will include: (i)the energy generated and allocated to each Parties' benefit;
(ii) the fuel cost calculation for fuel used during the preceding month; (iii) any costs
assessed by MISO to EAI and attributable to the Party; and (iv) the total amount to be
paid by the recipient of the Invoice to EAI for the energy adder set forth in Article 6.1
applied to the energy generated and allocated to that Party in the preceding month,
fuel used during the preceding month, and MISO-related costs.
6.2.1 The Invoice received by each of the Parties to this Agreement shall be paid in
U.S. Dollars by wire transfer, check, or ACH payment delivered to EAT within
15 days of the date of the Invoice ("Due Date"). If the Due Date is a weekend
or a bank holiday, payment will be due the next following business day. Late
payments shall accrue interest at a per annum rate equal to FERC interest rate
applicable at that time.
6.2.2 Notwithstanding the above, if a good faith dispute arises between EAI and any
of the Parties over the amounts due under the Invoice, then the disputing Party
will pay the Invoice on or before the due date and both Parties will continue to
perform their obligations under this Agreement during such dispute. EAI
agrees to provide the disputing Party documentation on which EAI relied in
validating and verifying a charge assessed in the Invoice and disputed by the
disputing Party. Upon determination of the correct amount, EAI will remit any
amount due to the disputing Party promptly (but in any event, within five (5)
business days of the resolution of the dispute) after such determination with
interest calculated at the interest rate provided in Article 6.2.1 from the
payment due date to the date the payment or refund is made. For any good
faith dispute remaining after both Parties engage in the foregoing provisions of
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EAI March 14, 2012 Draft
this Article 6, resolution of any such remaining good faith dispute shall be
governed by Article 7.
6.3 Combined Offer Approach Payments. On a monthly basis, EAI shall provide
payment for Net Benefits for each JOU to each of the Parties to this Agreement that
uses the Combined Offer Approach, by the 15th business day of each calendar month
(or on such other schedule as is mutually agreed on by EAI and a Party to this
Agreement).
6.3.1 Net Benefit is defined as the net of: (i) amount of monies received
from MISO attributable to the ownership percentage for that Party for
each JOU, offset by the energy adder set forth in Article 6.1, fuel costs
set forth in Article 5.2.3, and any charges assessed by MISO. In any
circumstance where the amount of monies received from MISO
attributable to the ownership percentage for that Party for each JOU is
less than the sum of the energy adder set forth in Article 6.1, fuel costs
set forth in Article 5.2.3,and any charges assessed by MISO, EAI shall
provide an invoice to that Party setting forth the net costs due from that
Party to EAI. Such Invoice shall be paid in accordance with the
provisions of Article 6.2.1 and 6.2.2.
ARTICLE 7
DISPUTES
7.1 In the event that disputes arise under this Agreement concerning its application or
implementation, such disputes shall first be addressed through the use of non-binding
mediation, as set forth more fully herein.
7.2 Before initiating mediation, disputes shall be referred to the chief executives of the
Parties or their designated representatives. If, after thirty (30) days, the dispute is not
resolved, any Party may pursue non-binding mediation.
7.3 Any Party may initiate mediation by providing notice to another Party of a written
request for mediation, setting forth a description of the dispute and the relief
requested. Parties to the dispute are referred to as"Disputing Parties."
7.4 The Disputing Parties will cooperate with one another in selecting a mediator
("Mediator") from the panel of neutrals from any mutually acceptable Mediator
provider, and in scheduling the time and place of the mediation. Such selection and
scheduling will be completed within 30 days after notice of the request for mediation.
7.5 Unless otherwise agreed to by the Disputing Parties, the mediation shall be concluded
within 90 days from the date of notice of the request for mediation.
7.6 The Disputing Parties agree to participate in the mediation, and that they will share
equally in its costs (other than each Disputing Party's individual attorneys' fees and
costs related to the Disputing Party's participation in the mediation, which fees and
costs will be borne by such Disputing Party).
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EAI March 14, 2012 Draft
7.7 All offers, promises, conduct and statements, whether oral or written, made in
connection with or during the mediation by any of the Disputing Parties, their agents,
representatives, employees, experts and attorneys, and by the Mediator or any of the
Mediator's agents, representatives and employees, will not be subject to discovery
and will be confidential, privileged and inadmissible for any purpose, including
impeachment, in any arbitration or other proceeding between or involving the
Disputing Parties, or any of them;provided however, that evidence that is otherwise
admissible or discoverable will not be rendered inadmissible or non-discoverable as a
result of its use in the mediation.
7.8 In the event that a dispute is not resolved through the use of non-binding mediation as
set forth in this Article 7, all legal and equitable remedies, including damages
available to a Party shall be preserved.
7.9 During the pendency of a dispute, each Party shall continue to perform its obligations
under this Agreement.
ARTICLE 8
TERMINATION
8.1 Subject to the prohibition set forth in Article 8.2, any Party other than EAI may
exercise a right to withdraw from participation in this Agreement by delivering a
written notice of such withdrawal to all other Parties to this Agreement, no later than
one year prior to the effective date of such withdrawal. The notice of such withdrawal
by a Party other than EAI is not deemed to be delivered until received by EAI. A
Party's election to withdraw from this Agreement does not terminate this Agreement
with respect to any other Party and shall not affect, alter, or otherwise modify any
other Party's rights or obligations under this Agreement. EAI shall have no right to
withdraw from this Agreement.
8.2 Notwithstanding the foregoing, no Party to this Agreement may exercise any right to
withdraw from this Agreement if the exercise of such right would result in that Party's
withdrawal from this Agreement before the first day of the fourth year following the
beginning of the Participation Period.
8.3 Following the delivery of a notice of withdrawal, all Parties to this Agreement shall
undertake good-faith discussions and negotiations with all other Parties to this
Agreement to develop any and all necessary processes and procedures governing the
manner through which energy and ancillary services of the JOUs will be sold into the
MISO Market following the withdrawal. If any dispute or controversy arises between
the Parties to this Agreement in connection with the development of such processes
and procedures and the dispute or controversy is not resolved at least six months
before the date any withdrawing Party is to withdraw, the Parties shall submit to the
mediation provisions as described in Article 7.
ARTICLE 9
GENERAL PROVISIONS
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EAI March 14,2012 Draft
9.1 Relationship of the Parties. The Parties shall at all times act independently of each
other in complying with the terms and conditions of this Agreement. No partnership,
joint venture, trust or other fiduciary relationship is intended or created by this
Agreement, and no act by any of the Parties shall operate to create such a relationship.
9.2 Resource Adequacy. Notwithstanding anything to the contrary in this Agreement,
each Party to this Agreement shall retain eligibility to receive credit for its portion of
the JOUs as capacity towards meeting MISO resource adequacy requirements. Each
Party to this Agreement reserves the right to retain its own planning resource credits
or sell such credits to third parties.
9.3 Auxiliary Power. Each Party to this Agreement will be responsible for providing its
respective share of the cost of the auxiliary power needs of each JOU in which it has
an ownership interest.
9.4 Regulatory Approvals. The Parties agree that EAI will file this Agreement with
FERC pursuant to Section 205 of the Federal Power Act at least sixty days prior to the
Effective Date, and the Parties shall agree to support such filing and cooperate with
EAI with respect to such filing and provide any information reasonably required to
comply with applicable filing requirements. This Agreement shall be conditioned
upon FERC acceptance of the filing without modification, unless such modification is
agreed to by all Parties.
9.5 Section 205 and Section 206 Rights. Nothing contained in this Agreement shall
preclude EAI from exercising its rights under Section 205 of the Federal Power Act to
file for a change in any rate, term, condition or service provided under this
Agreement. Nothing contained in this Agreement shall preclude any other Party from
exercising its rights under Section 206 of the Federal Power Act to file for a change in
any rate, term, condition or service provided under this Agreement. Notwithstanding the
foregoing, any revision to Article 2.3, Article 2.4, Article 3.2, Article 4.1.10, Article
5.3, Article 8, Article 9.2, Article 9.5, Article 9.15, and Sections 7 and 8 of Appendix
B of this Agreement shall meet the public interest standard.
9.6 Liability and Indemnification. To the extent permitted by law, each Party shall
indemnify, defend, and hold harmless any other Party, and each of their respective
officers, directors, employees, agents, and legal representatives ("Indemnitee"), from
and against any and all claims, demands, suits, actions, liabilities, losses, damages,
judgments,and legal or other expenses (collectively, "Claims") that may arise directly
from or in connection with this Agreement. Notwithstanding the foregoing, the
indemnification under this Article 9.6 shall not be available with respect to any Claim
to the extent any Claim results from an uncured material breach of the subject
Indemnitee.
9.7 No Adverse Impacts. EAI shall have no liability for any loss, damage or expense
suffered by Parties caused by or resulting from or arising out of any action taken or
failed to be taken by EAI or any agent or employee of EAI pursuant to this Agreement
including, for example, failure to follow an Individual Offering Owner's ("IOO's")
(as defined in Section 2.2 of Appendix B) deployment instructions, unless such loss,
damage or expense results from willful misconduct of EAI or the failure of EAI to use
its reasonable best efforts to conform to good utility practices in discharging its
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EAI March 14,2012 Draft
obligation under this Agreement; and in no event shall EAI be liable for any loss of
anticipated profits, or any other consequential damages or losses of any nature.
Notwithstanding the foregoing, the Parties to this Agreement recognize that there are
operating conditions under which the JOUs must be operated without regard to
dispatch instructions received from MISO, and in such cases all Parties shall share
any charges or penalties in accordance with their respective shares of the affected
JOU if such charges or penalties are contemplated by this Article 9.7. Deviations from
MISO's instructions shall be limited to those circumstances necessary to protect the
JOUs from damage, when costs anticipated to be incurred by compliance with
MISO's instructions exceed those costs anticipated to be incurred by deviation from
MISO's instructions, or in other circumstances authorized by the Market Committee.
9.8 Default. An Event of Default shall have occurred, with respect to a Party (the
"Defaulting Party") upon: (i) the failure by the Defaulting Party to make, when due,
any payment required under this Agreement; or(ii) to perform any other covenant set
forth herein, if such failure is not remedied within five (5) business days after written
notice of such failure is given to the Defaulting Party. Notwithstanding the foregoing,
no Party shall be in default if the amount it owes hereunder to another Party can be
offset in whole, within 60 days after the date on which such amount became due and
payable,by sums owed to it by such other Party under this Agreement.
Notwithstanding Article 8 of this Agreement, upon the occurrence of an Event of
Default, the non-Defaulting Party, shall have (in addition to any remedies available to
it under generally applicable laws or under this Agreement) the right to (i)terminate
this Agreement as to the Defaulting Party (if not EAI), or(ii) to suspend performance
hereunder.
9.9 Limitation of Liability.
9.9.1 For breach of any provision of this Agreement for which an express remedy or
measure of damages is provided in this Agreement, the rights of the non-
Defaulting Party and the liability of the Defaulting Party shall be limited as set
forth in this Agreement, as the sole and exclusive full, agreed-upon and
liquidated damages, and not as a penalty, and all other damages or remedies
are waived.
9.9.2 If no remedy or measure of damages is expressly provided, or if a remedy or
measure of damages is expressly nonexclusive, the non-Defaulting Party shall
have the right to exercise all rights and remedies available to it at law or in
equity, provided, however, that the liability of the Defaulting Party shall be
limited to direct, actual damages only and all other damages and remedies are
waived.
9.9.3 In no event shall any Party be liable to another Party for consequential,
incidental, punitive, exemplary or indirect damages, lost profits or business
interruption damages, by statute, in tort, contract or otherwise.
9.10 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of Arkansas, excluding any conflict of laws and principles
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EAI March 14,2012 Draft
of said jurisdiction that might require the application of the laws of another
jurisdiction.
9.11 Waivers. Waiver at any time of rights with respect to a default or any other matter
arising in connection with this Agreement shall not be deemed to be a waiver with
respect to any subsequent default or matter.
9.12 Notice. Any notice or other communication required or permitted to be given or
made hereunder shall be in writing and shall be (i) mailed by certified or registered
mail, postage prepaid, return-receipt requested; (ii) delivered by nationally recognized
express or overnight courier; or(iii) sent via facsimile. Notices shall be deemed given
when actually received by a Party during normal business hours, otherwise on the
next business day. Parties shall designate the individual to receive notice and/or
communications under this Article 9.12.
9.13 Assignment. No Party to this Agreement shall assign its rights or obligations under
this Agreement without the prior written consent of the other Parties, which consent
shall not be unreasonably withheld.
9.14 The Parties anticipate that other co-owners of White Bluff or ISES may wish to
become Parties to this Agreement. Accordingly, the Parties agree that this Agreement
may be amended by adding additional signatories and with only such other
amendments as may be necessary to permit such additional signatories to execute this
Agreement lawfully.
9.15 Survivorship. Any obligation to make payments for actions or obligations already
performed hereunder prior to any termination or withdrawal pursuant to Article 8
shall survive the termination,withdrawal, or expiration of this Agreement.
9.16 Amendments. This Agreement or any Appendix hereof may be amended or
supplemented or terminated by and only by a written instrument duly executed by
each of the Parties hereto.
9.17 Entire Agreement. This Agreement, including all Appendices hereto, contains the
entire agreement and understanding between the Parties relating to the matters
covered hereby, and any representations, correspondence, or other statements made
by a Party prior to the Effective Date relating to the matters covered hereby shall be
superseded by the terms and conditions hereof.
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EAI Draft March 14,2012
IN WITNESS WHEREOF,the Parties hereto have executed this Agreement.
ARKANSAS ELECTRIC
ENTERGY ARKANSAS,INC. COOPERATIVE CORPORATION
By: By:
Name: Name:
Title: Title:
CITY WATER AND LIGHT PLANT OF
THE CITY OF JONESBORO,ARKANSAS CITY OF CONWAY,ARKANSAS
By: By:
Name: Name:
Title: Title:
CITY OF WEST MEMPHIS,ARKANSAS CITY OF OSCEOLA, ARKANSAS
By: By:
Name: Name:
Title: Title:
ENTERGY MISSISSIPPI,INC. ENTERGY POWER,INC.
By: By:
Name: Name:
Title: Title:
EAST TEXAS ELECTRIC
COOPERATIVE,INC.
By:
Name:
Title:
EAI March 14,2012 Draft
APPENDIX A
COMBINED OFFER APPROACH
1. PURPOSE. The purpose of this Appendix A is to provide detail regarding a
mechanism through which Parties to the Agreement may offer their respective shares
of energy and ancillary services from the JOUs into the MISO Market on a combined
basis through EAI (i.e., Combined Offer Approach).
2. OFFER METHODOLOGY. The methodology to be developed by EAI shall allow
for offers that approximate the incremental cost of producing energy and ancillary
services and that utilize the most current heat rate curve information for each JOU, the
best estimate for the actual incremental cost of delivered coal that would be purchased
and delivered due to incremental generation at the JOU, the current market price of
emission allowances, the best available estimate for variable operation and
maintenance expenses for each JOU, and any incremental cost associated with future
operational, legal, and regulatory requirements.
3. OFFER DATA. Offer data submitted into the MISO Market pursuant to Section
5.2.2 of the Agreement will include unit parameters, unit limits, unit status, and
production cost information for the respective JOU subject to each offer.
4. OFFER ADJUSTMENT. Offers made under the Combined Offer Approach shall
include an offer adjustment that will be applied to increase the probability that all
marginal costs are recovered in periods where the offers from the respective JOUs are
establishing the locational marginal price at that respective JOU. The offer adjustment
shall be modified as necessary by EAI, subject to approval by the Market Committee
pursuant to Article 3.1.3 of the Agreement. The offer adjustment may not be less than
2% or more than 10% of the projected unit incremental cost, unless the Market
Committee otherwise approves by a super majority vote of the Parties to this
Agreement that possess Voting Rights.
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EAI March 14,2012 Draft
APPENDIX B
INDIVIDUAL.OFFER APPROACH
1. PURPOSE. The purpose of this Appendix B is to provide a general construct for the
implementation of a JOU arrangement that would allow one or more owners of the
JOUs to make offers into the MISO Market on an individual basis (i.e., Individual
Offer Approach). The Parties to the Agreement recognize that the details of
implementing this approach are complex and dependent on the details of the MISO
Market design that are in place at the time of implementation as well as the
capabilities of the hardware and software system of the owners and their service
providers, and the capabilities of the hardware and software systems of EAI and its
service providers.
2. DEFINITIONS.
2.1 Combined Offer JOU Group ("COJG") - The group of owners, represented by
EAI, that make resource offers to the MISO Market on a combined basis as
defined in Article 5 and Appendix A of the Agreement.
2.2 Individual. Offering Owner("I00") —An owner that is not participating in the
COJG and is making offers to MISO on an individual basis.
3. GENERAL RESPONSIBILITIES.
3.1 Each I00 will be responsible for representing its share of the JOU in the
MISO Market independently of the other ownership shares. Representation
includes registration, resource plans, offers, deployment, settlement,
transmission service and any other related market activities.
3.2 EAI, as representative of the COJG, will continue to be responsible for
representing the portions of the JOU belonging to the participants in the COJG
MISO Market.
3.3 The COJG and each I00 commit to offer its share of a JOU to the MISO
Market anytime the JOU is available to generate.
3.4 The methodology to address the allocation of cost associated with the
minimum run level of a JOU when only a portion of a JOU has been selected
to operate in the MISO Market shall be developed as part of the
implementation process under Section 6 herein.
3.5 It will be each I00's responsibility to keep MISO informed of the status of its
portion of the JOU including notification of de-rates and outages.
3.6 It will be each I00's responsibility to receive deployment instructions from
the MISO Market for each market interval and deliver them to EAI on a time
frame suitable for market operation, or make other arrangements to effect the
same result such that EAT can respond to market operation.
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EAI March 14, 2012 Draft
3.7 If an 100 wishes to offer regulation reserves, spinning reserves and operating
reserves into the MISO Market, the 100 must gain certification for such
services from the MISO Market and develop the system and processes needed
to communicate ancillary serve deployment direction to EAI.
3.8 An I00 may not take any action that will prohibit the COJG from gaining
certification to offer regulation, spinning reserves and/or supplemental
reserves from the portion of the JOUs that are a part of the COJG or obstruct
in any way the COJG from making regulation, spinning reserves and/or
supplemental reserve offers into the MISO Market.
4. EAI RESPONSIBILITIES.
4.1 EAI will provide JOU-related information needed for each IOO to interface
with the MISO Market. The details of the information needed will be
developed in the detailed design phase of implementation based on current
MISO Market design.
4.2 EAI will provide each I00 full access to a JOU in which it has an ownership
interest (including, e.g., records, outage data, fuels, variable O&M/start cost
calculations) so that it can bid its share of the JOU into the MISO Market so as
to satisfy its obligations as a Market Participant under the MISO Open Access
Transmission, Energy and Operating Reserve Markets Tariff ("Tariff') and
market rules.
4.3 If not provided directly by MISO to the I00, EAI will provide an IOO data in
order for it to shadow settle its share of a JOU in real-time; this data shall
include all information provided to or made available by MISO, including all
five-minute data.
4.4 EAI will receive the deployment instructions from each I00 and will check
the deployment instructions to ensure that they are consistent with the current
physical capabilities of the JOU and the 100's share of those physical
capabilities. EAI will combine the deployment instructions with deployment
instructions for the COJG to develop a target output and dispatch the unit to
meet the target output. In the event no deployment instruction for an interval
is received from an I00 in time for inclusion in the target output calculation,
EAI will use the last received deployment instruction from that I00.
4.5 EAI will perform the allocation process for actual generation described below.
The total MW allocated will be electronically transmitted back to the IOOs
immediately after the calculations for any interval have been completed,
giving the IOOs real-time operational feedback of their asset's performance.
Each 100 will provide the same values to MISO.
4.6 If EAI submits or receives settlement information to or from MISO or the
MISO market monitor, EAI will provide each 100 with all data provided to
MISO or the MISO market monitor, and the settlement data that EAI receives
from MISO or the MISO market monitor.
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EAI March 14, 2012 Draft
5. ALLOCATION PROCESS.
5.1 For each market interval, each I00's total allocation of JOU energy will be
the sum of two components: the base allocation and the deviation allocation.
The base allocation for each TOO will equal its requested deployment level as
adjusted by EAI as described in Section 4.4, above. The deviation allocation
will be calculated per the following rules when there is a difference between
the actual output of the total JOU and the target output level:
5.1.1 The deviation MW, which may be positive or negative, will be
allocated to each 100 pro-rata to its requested deployment level as
adjusted by EAI in accordance with Section 4.4, above, for that
interval.
5.1.2 The allocation of deviation will not cause any I00's maximum or
minimum limit to be violated. Once an 100's limit is reached any
remaining deviation will be allocated to the other I00s.
6. IMPLEMENTATION PROCESS.
6.1 After notification to EAI and the other owners that one or more owners will
become an 100, EAI and the owner or owners that made such notification will
work together to develop an implementation plan in accordance with the
provisions of this Appendix B, including an implementation schedule,
operating protocols and procedures, data flow diagrams, testing procedures,
operator training procedures, settlement procedures, and plans for receiving
any and all required certifications and approvals. All Parties will use
reasonable efforts to support the implementation process. EAI will use
reasonable commercial practices to accurately record its cost to support
implementation process and will charge the 100s on a monthly basis for the
implementation cost that EAI incurred for the prior month. If the Parties
reach an impasse on any aspect of the detailed design then the Parties shall
invoke the arbitration process as described in Section 7 herein. The Parties
agree in such event, that the arbitration process will establish the
implementation process for the Individual Offer Approach.
7. IMPLEMENTATION PROCESS DISPUTES.
7.1 In the event that EAI and a Party seeking to become an 100 are unable to
agree on the implementation plan described in Section 6 above, EAT or the
Party may initiate arbitration with respect to the disputed matters by providing
a notice of a demand for binding arbitration to the other Party to the dispute.
The Parties will cooperate with one another in selecting the arbitrator within
60 days after notice of the demand for arbitration. If the Parties are unable to
agree upon a mutually acceptable arbitrator, each Party shall appoint one
arbitrator within 60 days after receipt of notice of demand. The two Party-
appointed arbitrators shall approve a third arbitrator within 30 days after their
appointment. The third arbitrator shall act as chair of the panel.
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EAI March 14,2012 Draft
7.2 Except as provided for in Section 7.3, the arbitration will be conducted by the
arbitrator(s) in accordance with the Commercial Rules of the American
Arbitration Association, as modified herein.
7.3 Any dispute concerning the implementation plan for participation in the MISO
Market as an IOO shall be subject to binding arbitration. Each Party shall
submit to the arbitrator(s) and exchange with the other, in accordance with a
procedure to be established by the arbitrator(s), its proposal for the
implementation plan to be applied. The Arbitrator shall be limited to awarding
only one or the other of the proposals submitted and may not modify the
proposals. The arbitrator's award shall be binding on the Parties to the
arbitration for a period of five (5) years, after which a Party may seek to re-
arbitrate the implementation plan methodology.
8. SUBSEQUENT ELECTION
8.1 In the event that any Party elects to establish a pseudo-tie arrangement to
move all or a portion of its ownership share outside of the MISO Market, EAI
and that Party will negotiate in good faith to reach a mutually agreeable
solution, setting forth the terms and conditions of offering energy and/or
ancillary services outside of the MISO Market. Any such solution shall be set
forth in a separate agreement. In the event the Parties are unable to reach
agreement, the Parties may pursue arbitration on the terms provided in Section
7 of this Appendix B.
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EAI March 14,2012 Draft
APPENDIX C
PRO FORMA AGENCY AGREEMENT
This AGREEMENT is executed by and between ("Co-Owner") and Entergy
Arkansas,Inc. ("EAT").
1. Co-Owner hereby appoints EAI its agent, and EAI accepts such agency, in connection
with its participation in the Midwest Independent Transmission System Operator, Inc.
Energy and Ancillary Services Market ("MISO Market") for the purpose of
implementing the approach elected herein(check one to apply).
Combined Offer Approach
Individual Approach
2. If the Co-Owner has elected"Combined Offer Approach," EAI is hereby authorized to
act on behalf of Co-Owner to take all reasonable actions which, in the discretion and
judgment of EAT, are deemed necessary or advisable to effect the offer of energy
and/or ancillary services into the MISO Market with respect to Co-Owner's ownership
percentage subject to the Agreement attached hereto.
3. If the Co-Owner has elected"Individual Approach," EAI is hereby authorized to act on
behalf of the Co-Owner to implement deployment instructions received from an
Individual Approach Co-Owner, including combining the deployment instructions with
deployment instructions for the Combined Approach Co-Owners to develop a target
output and dispatch the unit to meet the target output, and perform the allocation
process for actual generation described in Section 5 of Appendix B.
4. Co-Owner agrees that nothing contained herein shall be construed to create the
relationship of employer and employee between Co-Owner and EAI.
5. The effective date of this Agreement is
ENTERGY ARKANSAS, INC.
By: By:
Name: Name:
Title: Title:
C-1
EAI Draft
March 14,2012-Confidential
MISO INTEGRATION AGREMEENT
Between
ENTERGY ARKANSAS,INC.
CITY WATER AND LIGHT PLANT
OF THE CITY OF JONESBORO,ARKANSAS
and
CITY OF CONWAY,ARKANSAS
and
CITY OF WEST MEMPHIS,ARKANSAS
and
CITY OF OSCEOLA,ARKANSAS
and
ENTERGY MISSISSIPPI,INC.
and
ENTERGY POWER,INC.
and
EAST TEXAS ELECTRIC COOPERATIVE,INC.
Dated as of:
March ,2012
■
t
EM Draft
March 14,2012-Confidential
This MISO Integration Agreement ("MIA" or "Agreement") is made on this day, March
2012, between and among Entergy Arkansas, Inc., a corporation organized and existing
under the laws of the State of Arkansas ("EAI"), City Water and Light Plant of the City of
Jonesboro, Arkansas ("Jonesboro"), the City of Conway, Arkansas ("Conway"), the City of
West Memphis, Arkansas ("West Memphis"), the City of Osceola, Arkansas ("Osceola"),
Entergy Mississippi, Inc., a corporation organized and existing under the laws of the State
of Mississippi ("EMI"), Entergy Power, Inc., a corporation organized and existing under the
laws of the State of Delaware ("EPI") and East Texas Electric Cooperative,Inc., a generation
and transmission cooperative organized and existing under the laws of the State of Texas
("ETEC")(collectively,the"Parties").
WHEREAS, the Parties to this Agreement are co-owners in White Bluff and/or ISES
(collectively, "Jointly-Owned Units" or "JOUs") pursuant to the White Bluff and ISES
Ownership Agreements;
WHEREAS, the Parties to this Agreement are parties to the White Bluff and ISES Operating
Agreements whereby EAI is given sole responsibility and authority for the management,
control, operation and maintenance of the plants and is authorized to act as agent in all
activities in connection with participants' interest in the JOUs on behalf of the other owners;
WHEREAS, the Parties to this Agreement anticipate participation in the Midwest
Independent Transmission System Operator, Inc. Energy and Ancillary Services Market
("MISO Market")beginning on or near December 19,2013;
WHEREAS, several of the Parties to this Agreement are presently parties in separate Power
Coordination and Interchange Agreements("PCIAs");
WHEREAS, the Parties to this Agreement wish to coordinate their participation in the MISO
Market with respect to the JOUs so as to maximize the value of the JOUs and to share in the
value of these assets in proportion to their ownership share of the assets, with no preference
to any one owner;
WHEREAS, certain parties to this Agreement are interveners in APSC Docket No. 10-011-U.
WHEREAS, the Parties to this Agreement mutually desire to resolve many of the Party's
concerns regarding integration into MISO;
Now,THEREFORE it is agreed as follows:
I. Support
Parties will either present testimony or file a letter on March 16,2012,in APSC
Docket No. 10-011-U identical to the provisions included in Exhibit A hereto.
II. Revisions to the White Bluff Operating Agreement
a. The Parties agree to, and shall exert their best efforts to, amend the White
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EAI Draft
March 14,2012-Confidential
Bluff Operating Agreement among EAI,AECC and the Parties, et al.
originally dated as of June 27, 1977,as amended("White Bluff Operating
Agreement")so that the term of expiration is consistent with the term of
expiration of the Independence Steam Electric Station Operating Agreement
among EAI,AECC and the Parties,et al.,originally dated as of July 31, 1979,
as amended and restated.
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EAI Draft
March 14,2012-Confidential
III. Marketing Agreement
a. The Parties agree to enter into a White Bluff and Independence Marketing
Agreement("MA")pursuant to which co-owners of White Bluff and ISES
may offer their shares of the capabilities of the White Bluff and ISES units
and associated energy into markets administered by the MISO either jointly
with EAI and other co-owners or separately. The MA is included as Exhibit B
hereto.
b. EAI shall file the MA with FERC.
IV.EAI commitment to the continued operation of the coal units.
EAI will commit to the continued operation of the JOUs for the terms of the
Independence and White Bluff Operating Agreements unless such continued
operation would result in a violation of law that could not be avoided or
remedied by reasonable means or the APSC finds that operation of the JOUs
is not in the public interest.
V. Auction Revenue Rights Allocation
a. The parties commit to use best efforts to support receiving from MISO
an appropriate allocation of Auction Revenue Rights from the JOUs in
accordance with the MISO Tariff and then current business practices.
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EAI Draft
March 14,2012-Confidential
IN WITNESS WHEREOF,the Parties hereto have executed this Agreement.
ENTERGY ARKANSAS,INC.
By:
Name:
Title:
CITY WATER AND LIGHT PLANT OF
THE CITY OF JONESBORO,ARKANSAS CITY OF CONWAY,ARKANSAS
By: By:
Name: Name:
Title: - Title:
CITY OF WEST MEMPHIS,ARKANSAS CITY OF OSCEOLA, ARKANSAS
By: By:
Name: Name:
Title: - Title:
ENTERGY MISSISSIPPI,INC. ENTERGY POWER,INC.
By: By:
Name: Name:
Title: - Title:
EAST TEXAS ELECTRIC
COOPERATIVE,INC.
By:
Name:
Title: -
C-1
Testimony Format
Q. What is the position of[Co owner]with respect to Entergy Arkansas' application to
transfer control of its transmission assets to the Midwest Independent Transmission
System Operator?
A. [Co_owner]recognizes that its customers may benefit from[Co_owner's]participation
in a Day 2 Market administered by an independent regional transmission operator.
MISO has administered such a market since April 2005. Discussions between
[Co_owner]and Entergy Arkansas have resulted in an agreement that[Co_owner]
believes is in the best interest of its customers. As a result,[Co_owner]does not oppose
Entergy Arkansas' application in this docket to transfer control of its transmission assets
to MISO.
Q. Entergy Corporation has announced its intention to divest its transmission assets
that would result in Entergy Arkansas and the other Entergy Operating Companies
merging their transmission assets with Independent Transmission,Corp. Have you
developed a position on this proposal?
A. [Co_owner]recognizes that the transmission system serving Arkansas requires
substantial development in order to assure continued affordable and reliable electric
service for its customers. An independent transmission company has every incentive to
foster such development, so[Co_owner]believes that Entergy Corporation's transfer of
its transmission assets to ITC Holdings Corp., could hasten needed improvements.
However,[Co owner]believes that the proposed transfer to ITC Holdings Corp. is a
transaction distinct from Entergy Arkansas' proposal in this docket.
DB1/69339767.1
Letter Format
March 16, 2012
Ms. Jan Sanders, Secretary
Arkansas Public Service Commission
P. O. Box 400
Little Rock, AR 72203
Re: APSC Docket No. 10-011-U
Dear Ms. Sanders:
[Co_owner.7 requests that you file this letter in the docket referenced above.
[Co_owner]recognizes that its customers may benefit from[Co owner's]participation in
a Day 2 Market administered by an independent regional transmission operator. MISO has
administered such a market since April 2005. Discussions between[Co_owner] and Entergy
Arkansas have resulted in an agreement that[Co_owner]believes is in the best interest of its
customers. As a result,[Co owner]does not oppose Entergy Arkansas' application in this
docket to transfer control of its transmission assets to MISO.
In addition,[Co_owner]is not aware of any way in which the proposed ITC transaction would
affect Entergy Arkansas' membership in an RTO or have a bearing in this docket.
Very truly yours,
DB1/69339767.1