Jnofflclal
FERC-Generated
PDF of 20070830-0010
Received
by FERC OSEC
08/29/2007 in D o c k e t # : E R 0 7 - I 1 4 7 - 0 0 1
First Revised Sheet No. 1 PJM Interconnection, LLC FERC Electric Tariff Sixth Revised Volume No. 1 First Revised Service Agreement No. 1604
Midwest ISO FERC Electric Tariff Third Revised Volume No. I First Revised Service Agreement No. 1827
Letter Agreement No.2 Between American Electric Power Service Corporation and Michigan Electric Transmission Company, LLC
Issued By: J. Craig Baker, Scnio~ Vice President Regulatory Services Issued On: August 28, 2007
Effective Date: July I, 2007
Letter Agreement No.2 This Letter Agreement is ente~edinto this 2 ~ day . 2007, by and between Michigan Electric Transmission Company, LLC ("METC"), a subsidiary of ITC Holdings Corp., and American Electric Power Service Corporation ("AEPSC"), as agent for Indiana and Michigan Power Company ('"I&M") d/b/a American Electric Power ("AEP"), a wholly owned subsidiary of American Electric Power, Company, Inc., being sometimes herein referred to collectively as the "Parties" or singularly as a "Party".
WITNESSETH: The purpose of' this Letter Agreement No.2 ("LA2'3 is to provide for the performance of' certain engineering, design, equipment p~ocurement, right of' way acquisition and construction activities by AEP, and the payment for' such activities by METC related to the proposed phase The existing transposition on the AEP-METC Cook-Palisades 345 kV interconnection. Interconnection line between AEP's Cook Substation and METC's Palisades Substation consists of a 345 kV double circuit transmission line, with ownership divided between AEP and METC. The proposed phase transposition is being implemented to reduce negative sequence component currents on the hansmission network near the Palisades Substation at the request of' METC.. In the First Letter Agreement between the Parties dated January 2, 2007, filed with FERC under. the PJM and Midwest IS0 tariffs as Original Service Agreement No 1604 and 1827, respectively, METC requested from AEP, and AEP agreed, to perfoform the preliminary engineering, design, and right of'way acquisition study for the proposed phase transposition project. The results of' the preliminary study determined that the pr,oposedphase transposition can be accomplished six miles outside AEP's Cook Substation.. However, AEP also agreed to examine the feasibility of' accomplishing the phase t~mposition,if possible, within AEP's Cook Substation. AEP has now determined that phase tr~anspositioncan be accomplished within AEP's Cook Substation. As mutualIy agreed between the Parties, the proposed phase transposition work will be performed at METC expense To accomplish the proposed phase transposition work, AEP will pe~formthe following:
1 , hrange f o an ~ October outage du~ingthe week of' October 29th through November' 5, 2007 (requires outage for both Palisades circuits) 2 Cooldinate Octobe~outage with METC . 3 . Complete construction by November 5,2007, The cost fox the proposed phase transposition has been estimated at $389,300
AEP agrees pursuant to this Agr,eement to commence engineering, design, equipment procurement and construction activities for phase tmnsposition project at the Cook 345 kV Substation upon the execution of'this LA2 This Agreement shall be subject to the terms and conditions set forth below, and subject to METC agreeing to make a Contribution In Aid of' Construction ("CIAC") p a p e n t to cover the k l l cost of' the facilities described in this Agreement, including income tax consequences, if any, resulting fiom such CIAC payment
Parties hereby mutually agree as follows: 1. Nothing in this Agxeement shall obligate either Party to perform the phase transposition work within the Cook 345 kV Substation, or to perform any obligation covered by the fbfme composite Interconnection Agreement being reviewed by the Parties, to be signed by the Parties, nor shall this Agreement establish any rights related to the proposed phase transposition within the Cook 345 kV Substation; provided, however., that to the extent obligations required by the Interconnection Agreement, have already been performed under. this Agreement, such obligations shall be deemed satisfied.
2 . METC hereby authotizes AEP to proceed with the initial design, engineering, sight of way acquisition, equipment p1,ocwement and construction of' facilities necessary to p~ovidethe proposed phase transposition within the Cook 345 kV Substation.. 3.. Upon signing and execution of'this LA2, AEP will promptly proceed with the work described
herein. AEP shall not proceed with any design, engineering and right of'way acquisition, nor shall AEP proceed with any procurement (including bid awmds, pu~chaseorders or any buying commitments) or construction activities, before the required execution of' this Agreement, and METC pr'ovidingthe required initial payment made pursuant to Attachment 1 of this LA2 4 . H'METC cancels the proposed project for any reason, AEP shall promptly invoice METC (or
refund) the difference between the actual costs, as of the cancellation date, incurred by AEP and any amount paid by METC 5.. The effective date ofthis Agr,eementshall commence on the date this Agreement is executed.. 6 , AEP shall keep METC informed as to the progress of the engineering, desigh, procurement and consttuction activities performed under,this Agreement.
7, Notices given pursuant to this Letter Agreement shall be given in writing as follows:
8
If to the AEP:
American Electric Power Service Corporation Mohan K..Sachdeva, Manager, Transmission and Interconnection Services 1 Riverside Plaza Columbus, Ohio 432 15-2373
If'to Customer.:
Michigan Electric Transmission Company, LLC Attn: Contract Supervisor 39500 Otchard Hill Place - Ste. 200 Novi, MI 483 75
The above names and addresses of' any Pax@ may be changed at any time by notice to the other Party..
9. AEP shall keep METC informed, via monthly reports sent to METC's designated representative identified below, regarding the progress of' engineering, design, equipment procurement, right of' way acquisition and constxuction activities perfo~medunder this Agreement Michigan Electric Tr~ansmissionCompany, LLC 39500 Orchard Hill Place - Ste 200 Novi, MI 48375 Attention: David G..Doubley, Senior Staff'Engineer 10 The costs paid by METC to AEP for work to be done by AEP pursuant to this LA2 shall be considered non-taxable contribution to capital. However, if' CIAC is later determined to be taxable, METC agrees to reirnbuise such taxes, including penalty or interest payments, if any, imposed by the IRS . 11..This Letter Agreement shall be governed by and consbued in accordance with the laws of'the State of'Michigan, 12, The Parties shaIl exercise their best efforts to resolve any dispute that may aise between them in relation to this Letter Agreement though amicable discussions between their respective
representatives,
IN WITNESS WHEREOF, each of' the Parties has caused this Agreement to be duly executed, effective as of the date first written above..
Michigan Electric Transmission Company, LLC
American Electric Power Service Corporation
As agent for' Indiana Michigan Power Co. By:
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1itle: Date:
Date:
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ATTACHMENT I Payment Schedule METC agr,ees to pay AEP for the phase transposition within the Cook 345 kV station in accordance with the following payment schedule:
Payment First payment Second payment Third and final payment Total Estimated Cost
*
Due Date
Amount
July 1,2007
$50,000
September 1,2007
$200,000
Within 30 days of receipt of final invoice for actual costs.
$139,300"
$3 89,3 00
The third and final payment at completion of' all work authorized by this Agreement will be based on an invoice for actual costs, including AEP overheads.,
Scope of Work To complete the 345 kV phase transposition, aluminum tubing bus, jumpers, and post insulators will be added on new steel adapter plates. The existing lightning protection (arc gap arrbester,~) must be I-emovedon the Palisades #1 and #2 lines and station class lightning arresters with foundations will need to be installed to protect the breakers on these two lines. The phase transposition will be done on the existing structure which is 100 feet off'the ground. Expensive equipment, including cranes and man lifts need to be rented to complete this project. This is a labor intensive project,,
