10 Krey Boulevard  Rensselaer, NY 12144

August 7, 2015

By Electronic Delivery

Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE

Washington, DC 20426

Re: Filing of an Executed Transmission Facility Interconnection Agreement Among
New York State Electric & Gas Corporation, Trans-Allegheny Interstate Line
Company, and the New York Independent System Operator, Inc.; and Request for
Waiver of the 60-Day Notice Period; Docket No. ER15-___-000

Dear Ms. Bose:

Pursuant to Section 205 of the Federal Power Act1 and Section 35.12 of the

Commission’s regulations,2 New York State Electric & Gas Corporation (“NYSEG”), TransAllegheny Interstate Line Company (“TrAILCo”), and the New York Independent System Operator, Inc. (“NYISO”) (together, the “Joint Filing Parties”) hereby tender for filing a
transmission facility interconnection agreement (“Interconnection Agreement”) between and among NYSEG, TrAILCo, and the NYISO (collectively, the “Parties”) that was executed on August 6, 2015. The Interconnection Agreement is labelled as Service Agreement No. 2232 under the NYISO’s Open Access Transmission Tariff (“OATT”).3

As described in Part I below, the Interconnection Agreement concerns the construction
and interconnection of a substation, which will be owned by TrAILCo and under the operational
control of PJM Interconnection, L.L.C. (“PJM”), with a transmission line owned by NYSEG and
under the operational control of the NYISO. As PJM indicated that the substation is required to
be in-service within a limited timeframe to address a reliability need identified by PJM, the
Commission has granted TrAILCo a one-time waiver from the requirement that its project be
evaluated under the NYISO’s Standard Large Facility Interconnection Procedures set forth in
Attachment X (Section 30) of the OATT.4 Instead, the project was evaluated under the NYISO’s

1 16 U.S.C. § 824d (2014).

2 18 C.F.R. § 35.12 (2014).

3 The NYISO files New York Transmission Owners’ wires-to-wires interconnection agreements
with the Commission on behalf of New York Transmission Owners with a NYISO Services Agreement
number. See, e.g., New York Independent System Operator, Inc., and Consolidated Edison Company of
New York, Inc., Letter Order, Docket No. ER15-1845-000 (July 17, 2015) (accepting Transmission
Owners’ interconnection agreement filed by the NYISO with a NYISO Services Agreement number).

4 See PJM Interconnection, L.L.C and Trans-Allegheny Interstate Line Company, Order Granting Tariff Waiver Request, 144 FERC ¶ 61,060 (2013) (“TrAILCo Waiver Order”).

Honorable Kimberly D. Bose August 7, 2015

Page 2

transmission expansion process contained in Section 3 of the OATT. As a result of the waiver, TrAILCo’s project was not generally subject to the NYISO’s interconnection process
requirements, and TrAILCo and NYSEG are not required to enter into the pro forma Large Generator Interconnection Agreement (“Pro Forma LGIA”) contained in Attachment X.
However, given these unique circumstances, TrAILCo, NYSEG, and NYISO agreed that it was appropriate for the NYISO to be a party to the Interconnection Agreement.

The Joint Filing Parties respectfully request that the Commission accept the

Interconnection Agreement for filing.5 While the interconnection is not subject to terms of the Pro Forma LGIA, the Interconnection Agreement developed by the Parties is generally
consistent with the Pro Forma LGIA as described in Part II below. Further, as described in Part III of this letter, the Joint Filing Parties respectfully request a waiver of the Commission’s prior notice requirements6 to make the Interconnection Agreement effective as of August 8, 2015, which is the date following the date of filing.

I.BACKGROUND

TrAILCo is constructing a substation near the town of Mainesburg, Pennsylvania that is
required under PJM’s Regional Transmission Expansion Plan to address a reliability need
(“Mainesburg Substation”). Once constructed, the Mainesburg Substation will be under the
operational control of PJM. The New York State Transmission System operated by the NYISO
expands into Pennsylvania via a 345 kV transmission line owned by NYSEG that runs from the
Watercure Road substation in New York to the Homer City substation in Pennsylvania
(“Watercure Line”). The Mainesburg Substation will interconnect with, and electrically
bifurcate, the Watercure Line into two segments that are both owned by NYSEG and operated by
the NYISO as part of the New York State Transmission System: (i) the Watercure Road to
Mainesburg Substation segment, and (ii) the Mainesburg Substation to Homer City segment.

The NYISO’s OATT contains both a transmission expansion process in Section 3 of the
OATT and an interconnection process in Attachment X of the OATT. When the Mainesburg
Substation project was introduced, the NYISO determined that it did not fit within the definition
of projects eligible to be evaluated under the transmission expansion process. For this reason,
the NYISO determined that the project had to be evaluated pursuant to its interconnection
process in Attachment X. PJM and TrAILCo raised concerns regarding the timing to complete
the interconnection process given the short timeframe for resolving the reliability need identified
by PJM. They requested that the Commission grant a one-time, limited waiver of the NYISO
tariff requirements to permit the Mainesburg Substation to be evaluated under the transmission
expansion process.7 Due to the impending reliability need, the Commission granted the

5 TrAILCo and PJM will be separately filing the Interconnection Agreement with PJM Service Agreement No. 4239.

6 See Prior Notice and Filing Requirements Under Part II of the Federal Power Act, 64 FERC ¶ 61,139, clarified, 65 FERC ¶ 61,081 (1993).

7 TrAILCo Waiver Order at PP 2-6.

Honorable Kimberly D. Bose August 7, 2015

Page 3

requested limited, one-time waiver,8 and the NYISO performed a System Impact Study for the
project under the transmission expansion process requirements set forth in Section 3 of the
OATT.

As a result of the granted waiver, the TrAILCo project was not required to proceed

through the NYISO’s Standard Large Facility Interconnection Procedures set forth in

Attachment X. However, TrAILCo, NYSEG, and NYISO agreed that it was appropriate for the NYISO to be a party to the Interconnection Agreement because, were it not for the limited, onetime interconnection process waiver granted here, the NYISO would be required by its OATT to be a party to the Interconnection Agreement, which governs the rates, terms, and conditions
regarding the interconnection of the Mainesburg Substation to the New York State Transmission System. While the Parties were not required to enter into the Pro Forma LGIA, the
Interconnection Agreement developed by the Parties is generally consistent with the Pro Forma LGIA as described in Part II below.9

II. DESCRIPTION OF INTERCONNECTION AGREEMENT

The rates, terms, and conditions of the Interconnection Agreement were agreed to by the Parties and are generally consistent with the Pro Forma LGIA. The primary differences between the Interconnection Agreement and the Pro Forma LGIA reflect: (i) the unique circumstances of the agreement, which addresses the interconnection of transmission facilities operated by PJM with those operated by the NYISO, and (ii) the application of the agreement to transmission facilities, rather than generation facilities. Key differences include:

• The Interconnection Agreement specifies TrAILCO’s and NYSEG’s responsibilities for
the design, construction, ownership, operation and maintenance of the System Upgrade
Facilities that interconnect the Mainesburg Substation to the Watercure Line that is part
of the New York State Transmission System. For this reason, the Interconnection
Agreement does not include developer’s options for performing such work. In addition,
as the facilities to be constructed under the Interconnection Agreement are defined as
System Upgrade Facilities, references to Attachment Facilities have been removed.

• The Interconnection Agreement does not include the provisions in the Pro Forma LGIA
that are specific to the interconnection of a generating facility, as the agreement concerns
transmission facilities.

• The Interconnection Agreement enables NYSEG to direct TrAILCo, on its own or at the
NYISO’s direction, to perform certain operations at the Mainesburg Substation in the
event of an Emergency, to ensure that the NYISO and NYSEG have sufficient

8 TrAILCo Waiver Order at PP 12-17.

9 As the Parties are not subject to the terms of the Pro Forma Agreement, the Interconnection

Agreement is not subject to the Commission’s high standard for accepting variations from the Pro Forma
LGIA.

Honorable Kimberly D. Bose August 7, 2015

Page 4

operational control over the segment of the Watercure Line that is bound by the

Mainesburg and Homer City substations, which are both under the operational control of
PJM.

• The Interconnection Agreement includes metering, communication, operating, system

protection, outage, and emergency state requirements that differ in part from the Pro

Forma LGIA to address the fact that the interconnection connects transmission facilities
under the separate operational control of the NYISO and PJM, which have different
technical requirements that must be satisfied by the appropriate transmission owner.

• Unlike the Pro Forma LGIA, the Interconnection Agreement does not include references

to the NYISO’s interconnection studies in Attachment X of the OATT as the Mainesburg Substation was not evaluated under that process.

• The Interconnection Agreement includes specific requirements associated with ensuring

that the Watercure Line is placed back in-service in the event of issues with the

interconnection of the Mainesburg Substation or in response to the disconnection of the substation.

• PJM was added as a signatory to the Agreement consistent with Commission precedent to

ensure that it is kept fully apprised of the matters addressed herein, so that it may be kept aware of any reliability and planning issues that may arise.10

•Additional differences agreed upon by Parties to reflect the unique circumstance of the

interconnection.

The Joint Filing Parties respectfully request that the Commission accept the Interconnection Agreement for filing.

III. EFFECTIVE DATE AND REQUEST FOR WAIVER

The Joint Filing Parties request an effective date of August 8, 2015, for the

Interconnection Agreement, which is the day following the date of this filing. The Joint Filing
Parties respectfully request that the Commission waive its prior notice requirement to permit the
requested effective date. The Commission has previously granted waivers of its prior notice
requirements to permit the requested effective dates for executed interconnection agreements.11

10 See American Electric Power Service Corporation, 112 FERC ¶ 61,128 at P 10 (2005).

11 See, e.g., New York Independent System Operator, Inc. and New York State Electric & Gas

Corporation, Docket No. ER11-2953-000 (April 7, 2011) (accepting interconnection agreement effective as of date of execution); see also New York Independent System Operator, Inc. and Niagara Mohawk Power Corp., Letter Order, Docket No. ER08-985-000 (June 26, 2008) (same); New York Independent System Operator, Inc. and New York Power Authority, Letter Order, Docket No. ER08-861-000 (May 27, 2008) (same); New York Independent System Operator, Inc. and New York Power Authority, Letter
Order, Docket No. ER08-699-000 (May 16, 2008) (same).

Robert E. Fernandez, General Counsel
Karen Georgenson Gach, Deputy General Counsel

* Christopher R. Sharp, Compliance Attorney
New York Independent System Operator, Inc.

10 Krey Boulevard

Rensselaer, NY 12144
Tel: (518) 356-6000
Fax: (518) 356-4702

csharp@nyiso.com

*Ted J. Murphy

Hunton & Williams LLP
2200 Pennsylvania Avenue, NW Washington, D.C. 20037
Tel: (202) 955-1500

Fax: (202) 778-2201
tmurphy@hunton.com

*Michael J. Messonnier Jr. Hunton & Williams LLP 951 East Byrd Street

Richmond, VA 23219
Tel: (804) 788-8200
Fax: (804) 344-7999

mmessonnier@hunton.com

For NYSEG:

*Jeffrey A. Rosenbloom

Director, NY Legal Services

New York State Electric & Gas Corporation
c/o Rochester Gas and Electric Corporation

89 East Avenue,

Rochester, NY 14649
Tel (585) 724-8132
Fax: (585) 724-8668

jeffrey_rosenbloom@rge.com

12 The Joint Filing Parties respectfully request waiver of 18 C.F.R. § 385.203(b)(3) (2014) to permit service on counsel in multiple locations.

*P. Nikhil Rao Attorney

FirstEnergy Corp.

76 South Main Street
Akron, Ohio 44308

Phone: (330) 384-2422
pnrao@firstenergycorp.com

Counsel for the Applicants

*Designated to receive service.

V.DOCUMENTS SUBMITTED

Nicholas A. Giannasca *Carlos E. Gutierrez

Davis Wright Tremaine LLP

1251 Avenue of the Americas, 21st Floor New York, NY 10020-1104

Phone: (212) 603-6402

NicholasGiannasca@dwt.com cgutierrez@dwt.com

Counsel for the Applicants

The NYISO submits the following documents:

• this filing letter;

• a clean version of the Interconnection Agreement (Attachment I);

• a blacklined version of the Interconnection Agreement showing the differences from
the body of the Pro Forma LGIA (Attachment II); and

• the signature pages for the Interconnection Agreement (Attachment III). VI. SERVICE

The NYISO will send an electronic link to this filing to the official representative of each
of its customers, to each participant on its stakeholder committees, to the New York Public
Service Commission, and to the New Jersey Board of Public Utilities. In addition, a complete
copy of the documents included with this filing will be posted on the NYISO’s website at
www.nyiso.com.

Honorable Kimberly D. Bose August 7, 2015

Page 7

VII. CONCLUSION

Wherefore, the Joint Filing Parties respectfully request that the Commission accept the Interconnection Agreement for filing with an effective date of August 8, 2015.

Respectfully submitted,

/s/ Christopher R. Sharp

Christopher R. Sharp Counsel for the

New York Independent System Operator, Inc.

/s/ Jeffrey A. Rosenbloom

Jeffrey A. Rosenbloom Counsel for

New York State Electric & Gas Corporation

/s/ Carlos E. Gutierrez

Carlos E. Gutierrez Counsel for

Trans-Allegheny Interstate Line Company

Service Agreement No. 2232

TRANSMISSION FACILITY INTERCONNECTION AGREEMENT

by and among the

NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.,
NEW YORK STATE ELECTRIC & GAS CORPORATION,
and

TRANS-ALLEGHENY INTERSTATE LINE COMPANY

Dated as of August 6, 2015

TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS.....................................................2

ARTICLE 2. EFFECTIVE DATE, TERM AND TERMINATION.......................7

ARTICLE 3. REGULATORY FILINGS...........................................10

ARTICLE 4. SCOPE OF INTERCONNECTION SERVICE...........................10

ARTICLE 5. SYSTEM UPGRADE FACILITIES ENGINEERING, PROCUREMENT,

AND CONSTRUCTION............................................11

ARTICLE6. TESTING AND INSPECTION.......................................29

ARTICLE7. METERING......................................................31

ARTICLE8. COMMUNICATIONS..............................................33

ARTICLE9. OPERATIONS....................................................34

ARTICLE10. MAINTENANCE.................................................42

ARTICLE11. PERFORMANCE OBLIGATION....................................44

ARTICLE12. INVOICE.......................................................44

ARTICLE13. EMERGENCIES..................................................45

ARTICLE14. REGULATORY REQUIREMENTS AND GOVERNING LAW............47

ARTICLE15. NOTICES.......................................................48

ARTICLE16. FORCE MAJEURE...............................................49

ARTICLE17. DEFAULT......................................................50

ARTICLE18. INDEMNITY, LIMITATION OF LIABILITY, AND INSURANCE.........51

ARTICLE19. ASSIGNMENT...................................................57

ARTICLE20. SEVERABILITY.................................................58

ARTICLE21. COMPARABILITY...............................................58

ARTICLE22. CONFIDENTIALITY..............................................58

ARTICLE23. ENVIRONMENTAL RELEASES....................................64

ARTICLE 24. [Reserved].......................................................65

ARTICLE 25. INFORMATION ACCESS AND AUDIT RIGHTS......................65

ARTICLE 26. SUBCONTRACTORS.............................................67

ARTICLE 27. DISPUTES......................................................68

ARTICLE 28. REPRESENTATIONS, WARRANTIES AND COVENANTS.............70

ARTICLE 29. MISCELLANEOUS...............................................72

APPENDIX A - ATTACHMENT FACILITIES AND SYSTEM UPGRADE FACILITIES...78

APPENDIX B - MILESTONES..................................................84

APPENDIX C - INTERCONNECTION AND CONSTRUCTION PROVISIONS..........85

APPENDIX D - SECURITY ARRANGEMENTS DETAILS..........................90

APPENDIX E - ADDRESSES FOR DELIVERY OF NOTICES AND BILLINGS.........91

TRANSMISSION FACILITY INTERCONNECTION AGREEMENT

THIS TRANSMISSION FACILITY INTERCONNECTION AGREEMENT (“Agreement”)
is made and entered into this 6th day of August 2015, by and among New York Independent
System Operator, Inc. (“NYISO”), a not-for-profit corporation organized and existing under the
laws of the State of New York, New York State Electric & Gas Corporation (“NYSEG”), a
corporation organized and existing under the laws of the State of New York, and Trans-
Allegheny Interstate Line Company (“TrAILCo”), a corporation organized and existing under
the laws of the State of Maryland. NYSEG, NYISO or TrAILCo each may be referred to as a
“Party” or collectively referred to as the “Parties.” The terms “Party” and “Parties” as used
herein shall not include PJM Interconnection, L.L.C. (“PJM”) or any successor Regional
Transmission Organization.

RECITALS

WHEREAS, NYSEG is the owner of the Watercure Road to Homer City 345 kV transmission line (the “Watercure Line”); and

WHEREAS, the Watercure Line is operated by, and under the functional control of, the New York Independent System Operator, Inc. (“NYISO”), and the Watercure Line is considered part of the New York State Transmission System; and

WHEREAS, TrAILCo is the owner of the Mainesburg 345 kV-115 kV substation (the “Mainesburg Substation” or “Transmission Facility”); and

WHEREAS, once in service, the Mainesburg Substation will be operated by, and under the
functional control of, PJM and is considered part of the PJM Transmission System; and

WHEREAS, NYISO, NYSEG and TrAILCo have agreed to enter into this Agreement for the
purpose of interconnecting the Mainesburg Substation to the New York State Transmission
System; and

WHEREAS, the interconnection of the Mainesburg Substation will entail electrically bifurcating the Watercure Line into two segments: (a) the Watercure Road to Mainesburg Substation
segment (the “WRM Segment”); and (b) the Mainesburg Substation to Homer City segment (the “MHC Segment”); and

WHEREAS, the WRM Segment and the MHC Segment shall each be owned by NYSEG and under the functional control of the NYISO; and

WHEREAS, the interconnection of the Mainesburg Substation to the Watercure Line has been studied by TrAILCo and the results of that study are reflected in a “Facilities Study-Final” report dated June 12, 2015; and

WHEREAS, PJM is a signatory to this Agreement consistent with American Electric Power
Service Corporation, 112 FERC ¶ 61,128 at P 10 (2005), to ensure that PJM is kept fully

apprised of the matters addressed herein so that PJM may be kept aware of any reliability and planning issues that may arise.

NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein, it is agreed:

ARTICLE 1. DEFINITIONS

Whenever used in this Agreement with initial capitalization, the following terms shall have the

meanings specified in this Article 1. Terms used in this Agreement with initial capitalization that are not defined in this Article 1 shall have the meanings specified in the NYISO Open-Access Transmission Tariff (“NYISO OATT”).

Affected System shall mean an electric system other than the transmission system owned,
controlled or operated by a Party that may be affected by the proposed interconnection.

Affiliate shall mean, with respect to a person or entity, any individual, corporation, partnership, firm, joint venture, association, joint‐stock company, trust or unincorporated organization,
directly or indirectly controlling, controlled by, or under common control with, such person or entity. The term “control” shall mean the possession, directly or indirectly, of the power to direct the management or policies of a person or an entity. A voting interest of ten percent or more shall create a rebuttable presumption of control.

Applicable Laws and Regulations shall mean all duly promulgated applicable federal, state and local laws, regulations, rules, ordinances, codes, decrees, judgments, directives, or judicial or administrative orders, permits and other duly authorized actions of any Governmental Authority, including but not limited to Environmental Law.

Applicable Reliability Councils shall mean the NERC, ReliabilityFirst, PJM, the NPCC and the NYSRC.

Applicable Reliability Standards shall mean the requirements and guidelines of the Applicable
Reliability Councils, as those requirements and guidelines are amended and modified and in
effect from time to time; provided that no Party shall waive its right to challenge the applicability
or validity of any requirement or guideline as applied to it in the context of this Agreement.

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

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

Business Day shall mean Monday through Friday, excluding federal holidays.

Calendar Day shall mean any day including Saturday, Sunday or a federal holiday.

Commercial Operation shall mean the status of the interconnection of the Mainesburg

Substation to the Watercure Line at the Point(s) of Interconnection, and the energization of the Mainesburg Substation, which points and substation have commenced transmitting electricity, excluding electricity transmitted during Trial Operation.

Commercial Operation Date shall mean the date on which the Point(s) of Interconnection and
the Mainesburg Substation have achieved Commercial Operation as agreed to by the Parties.

Confidential Information shall mean any information that is defined as confidential by Article

22 of this Agreement.

Control Area shall mean an electric power system or combination of electric power systems to
which a common automatic generation control scheme is applied in order to: (1) match, at all
times, the power output of the generators within the electric power system(s) and capacity and
energy purchased from entities outside the electric power system(s), with the Load within the
electric power system(s); (2) maintain scheduled interchange with other Control Areas, within
the limits of Good Utility Practice; (3) maintain the frequency of the electric power system(s)
within reasonable limits in accordance with Good Utility Practice; and (4) provide sufficient

generating capacity to maintain Operating Reserves in accordance with Good Utility Practice. A Control Area must be certified by the NPCC or ReliabilityFirst, as applicable.

Default shall mean the failure of a Party in Breach of this Agreement to cure such Breach in accordance with Article 17 of this Agreement.

Dispute Resolution shall mean the procedure described in Article 27 of this Agreement for resolution of a dispute between the Parties.

Effective Date shall mean the date on which this Agreement becomes effective upon execution by the Parties, subject to acceptance by the Commission, or if filed unexecuted, upon the date specified by the Commission.

Emergency shall mean an any abnormal condition or situation which NYSEG or NYISO, in

their sole discretion, deems imminently likely to endanger life or property, or adversely affect or impair the New York State Transmission System, NYSEG’s electrical system, or the electrical or transmission systems of others to which they are directly or indirectly connected, which requires immediate automatic or manual action to correct. Such an abnormal system condition or
situation includes, without limitation, overloading or potential overloading (exceeding thermal
limits of pre- and post-contingency), excessive voltage drop, exceeding voltage limits as defined by the NYISO or NYSEG, load shedding, voltage reduction, operating reserve deficiencies,
frequency deviations, over-generation or other non-normal conditions. Economic hardships of
either Party will not constitute an “Emergency.”

Emergency State shall mean the condition or state that the New York State Transmission
System, or the PJM Transmission System, as applicable, is in when an abnormal condition
occurs that requires automatic or immediate manual action to prevent or limit loss of the New
York State Transmission System or the PJM Transmission System, or generators that could

adversely affect the reliability of the New York State Transmission System, or the PJM Transmission System, as applicable.

Environmental Law shall mean Applicable Laws or Regulations relating to pollution or protection of the environment or natural resources.

Federal Power Act or FPA shall mean the Federal Power Act, as amended, 16 U.S.C. §§ 791a
et seq.

FERC or Commission shall mean the Federal Energy Regulatory Commission or its successor.

Force Majeure shall mean any act of God, labor disturbance, act of the public enemy, war,
insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or
equipment, any order, regulation or restriction imposed by governmental, military or lawfully
established civilian authorities, or any other cause beyond a Party’s control. A Force Majeure
event does not include acts of negligence or intentional wrongdoing by the Party claiming Force
Majeure.

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

Governmental Authority shall mean any federal, state, local or other governmental regulatory or administrative agency, court, commission, department, board, or other governmental
subdivision, legislature, rulemaking board, tribunal, or other governmental authority having
jurisdiction over any of the Parties, their respective facilities, or the respective services they
provide, and exercising or entitled to exercise any administrative, executive, police, or taxing authority or power; provided, however, that such term does not include NYSEG, TrAILCo,
NYISO, PJM or any Affiliate thereof.

Hazardous Substances shall mean any chemicals, materials or substances defined as or

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

Initial Energization Date shall mean the date upon which the Mainesburg Substation is initially interconnected and energized with the New York State Transmission System and upon which Trial Operation begins.

IRS shall mean the Internal Revenue Service.

Loss shall mean any and all liabilities, damages, losses, claims, including claims relating to injury to or death of any person or damage to property, demands, suits, recoveries, costs and expenses, court costs, attorneys’ fees, and all other obligations by or to third parties.

Metering Equipment shall mean all metering equipment installed or to be installed pursuant to this Agreement at the Point(s) of Interconnection, including but not limited to instrument
transformers, MWh‐meters, data acquisition equipment, transducers, remote terminal unit,
communications equipment, phone lines, and fiber optics.

NERC shall mean the North American Electric Reliability Corporation or its successor organization.

New York State Transmission System shall mean the entire New York State electric

transmission system, which includes: (i) the Transmission Facilities under NYISO Operational Control; (ii) the Transmission Facilities Requiring NYISO Notification; and (iii) all remaining transmission facilities within the New York Control Area.

Notice of Dispute shall mean a written notice of a dispute or claim that arises out of or in connection with this Agreement or its performance.

NPCC shall mean the Northeast Power Coordinating Council or its successor organization.

NYISO shall mean the New York Independent System Operator, Inc. or its successor organization.

NYISO Tariff shall mean the NYISO Open Access Transmission Tariff (“NYISO OATT”), as
filed with the Commission, and as amended or supplemented from time to time, or any successor
tariff.

NYSRC shall mean the New York State Reliability Council or its successor organization.

Outage Start Date shall mean that date set forth in Appendix B to this Agreement.

Party or Parties shall mean NYSEG, NYISO, or TrAILCo, or any combination of the above. PJM shall mean the PJM Interconnection, L.L.C. or its successor organization.

PJM Tariff shall mean the PJM OATT, as filed with the Commission, as amended or supplemented from time to time, or any successor tariff.

PJM Transmission System shall mean the transmission facilities under the operational control
of PJM.

Point of Change in Ownership shall mean the point(s), as set forth in Figure 1 to Appendix A to this Agreement, where the System Upgrade Facilities owned by TrAILCo connect to the
Watercure Line.

Point of Interconnection shall mean the point(s), as set forth in Figure 1 to Appendix A to this Agreement, where the System Upgrade Facilities owned by TrAILCo connect to the New York State Transmission System.

Reasonable Efforts shall mean, with respect to an action required to be attempted or taken by a
Party under this Agreement, efforts that are timely and consistent with Good Utility Practice and
are otherwise substantially equivalent to those a Party would use to protect its own interests.

ReliabilityFirst shall mean the ReliabilityFirst Corporation or its successor organization.

Services Tariff shall mean the NYISO Market Administration and Control Area Tariff, as filed
with the Commission, and as amended or supplemented from time to time, or any successor tariff
thereto.

Stand Alone System Upgrade Facilities shall mean System Upgrade Facilities that NYSEG
may construct without affecting day-to-day operations of the New York State Transmission
System during their construction, or that TrAILCo may construct without affecting day-to-day
operations of the New York State Transmission System during their construction. The Stand
Alone System Upgrade Facilities are identified in Appendix A to this Agreement.

System Protection Facilities shall mean the equipment, including necessary protection signal
communications equipment, required to (1) protect the New York State Transmission System
from faults or other electrical disturbances occurring on the Watercure Line or the Mainesburg
Substation, (2) protect the Watercure Line from faults or other electrical system disturbances
occurring on the New York State Transmission System or on other delivery systems or other
generating systems to which the New York State Transmission System is directly connected, (3)
protect the PJM Transmission System from faults or other electrical disturbances occurring at the
Mainesburg Substation or the Watercure Line, and (4) protect the Mainesburg Substation from
faults or other electrical system disturbances occurring on the PJM Transmission System or on
other delivery systems or other generating systems to which the PJM Transmission System is
directly connected.

System Upgrade Facilities shall mean the least costly configuration of commercially available
components of electrical equipment that can be used, consistent with Good Utility Practice and
Applicable Reliability Requirements, to make the modifications or additions to the New York
State Transmission System, or the PJM Transmission System, as applicable, that are required to
maintain system reliability due to: (i) changes in the system, including such changes as load
growth and changes in load pattern, to be addressed in the form of generic generation or

transmission projects; and (ii) proposed interconnections.

TrAILCo shall have the meaning set forth in the introductory paragraph of this Agreement,
which entity owns, leases or otherwise possesses an interest in the portion of the PJM
Transmission System, namely, the Transmission Facility, at the Point(s) of Interconnection.

Transmission Facility shall mean the Mainesburg Substation.

Trial Operation shall mean the period during which TrAILCo is engaged in on‐site test operations and commissioning of the interconnection of the Transmission Facility to the Watercure Line prior to Commercial Operation.

Watercure Line shall mean NYSEG’s Watercure Road to Homer City 345 kV transmission line, which, upon the commercial operation of the Transmission Facility, shall be comprised of the WRM Segment and the MHC Segment.

ARTICLE 2. EFFECTIVE DATE, TERM AND TERMINATION

2.1Effective Date.

This Agreement shall become effective upon execution by the Parties, subject to

acceptance by FERC, or if filed unexecuted, upon the date specified by FERC. NYISO, NYSEG
and TrAILCo shall promptly file this Agreement with FERC upon execution in accordance with
Article 3.1.

2.2Term of Agreement.

Subject to the provisions of Article 2.3, this Agreement shall remain in effect for a period of twenty ( 20 ) years from the Effective Date and shall be automatically renewed for each
successive one-year period thereafter.

2.3Termination.

2.3.1Written Notice.

This Agreement may be terminated by NYSEG or TrAILCo after giving the non-

terminating Parties ninety (90) Calendar Days advance written notice, or by the Parties notifying FERC after the Mainesburg Substation permanently ceases commercial operation.

2.3.2Default.

Any Party may terminate this Agreement in accordance with Article 17.

2.3.3Compliance.

Notwithstanding Articles 2.3.1 and 2.3.2, no termination of this Agreement shall become effective until the Parties have complied with all Applicable Laws and Regulations applicable to such termination, including the filing with FERC of a notice of termination of this Agreement, which notice has been accepted for filing by FERC.

2.4Termination Costs.

If a Party elects to terminate this Agreement pursuant to Article 2.3.1 above, the

terminating Party shall pay all costs incurred (including any cancellation costs relating to orders or contracts for System Upgrade Facilities and equipment) or charges assessed by the other
Parties, as of the date of the other Parties’ receipt of such notice of termination, that are the
responsibility of the terminating Party under this Agreement. In the event of termination by a Party, all Parties shall use commercially Reasonable Efforts to mitigate the costs, damages and charges arising as a consequence of termination. Upon termination of this Agreement, unless otherwise ordered or approved by FERC:

2.4.1With respect to any portion of the System Upgrade Facilities owned by

TrAILCo that have not yet been constructed or installed, TrAILCo shall, to the extent possible, cancel any pending orders of, or return, any materials or equipment for, or contracts for
construction of, such facilities. With respect to any portion of the System Upgrade Facilities
owned by NYSEG that have not yet been constructed or installed, NYSEG shall, to the extent
possible, cancel any pending orders of, or return, any materials or equipment for, or contracts for construction of, such facilities.

2.4.2 With respect to any portion of the System Upgrade Facilities, and any

other facilities already installed or constructed pursuant to the terms of this Agreement, and

unless said termination is due to NYSEG’s Default under Article 17, TrAILCo shall be

responsible for all costs associated with the removal, relocation or other disposition or retirement of such materials, equipment, or facilities, where applicable.

2.5Disconnection.

Upon termination of this Agreement, NYSEG and TrAILCo will take all appropriate
steps to disconnect the Mainesburg Substation from the Watercure Line and to return the
Watercure Line to its configuration prior to the interconnection described herein. All costs
required to effectuate such disconnection and return of the Watercure Line shall be borne by
TrAILCo, unless such termination resulted from NYSEG’s Default of this Agreement.

2.6Survival.

This Agreement shall continue in effect after termination to the extent necessary to

was in effect; and to permit NYSEG and TrAILCo each to have access to the lands of the other pursuant to this Agreement or other applicable agreements, to disconnect, remove or salvage its own facilities and equipment.

ARTICLE 3. REGULATORY FILINGS

3.1Filing.

NYISO, TrAILCo and NYSEG shall file this Agreement (and any amendment hereto)

with the appropriate Governmental Authority, if required. Any information related to studies for interconnection asserted by NYSEG or TrAILCo to contain Confidential Information shall be treated in accordance with Article 22 of this Agreement and Attachment F to the NYISO OATT. NYSEG and TrAILCo shall reasonably cooperate with NYISO and one another with respect to such filing and shall provide any information reasonably requested by the other Party needed to comply with Applicable Laws and Regulations.

ARTICLE 4. SCOPE OF INTERCONNECTION SERVICE

4.1Provision of Service.

NYSEG shall permit TrAILCo to interconnect the Mainesburg Substation to the Watercure Line in accordance with the terms and conditions of this Agreement.

4.2 No Transmission Delivery Service.

The execution of this Agreement does not constitute a request for, nor agreement to

provide, any Transmission Service under the NYISO OATT, and does not convey any right to deliver electricity to any specific customer or Point of Delivery.

ARTICLE 5. SYSTEM UPGRADE FACILITIES ENGINEERING, PROCUREMENT, AND CONSTRUCTION

5.1 Construction Dates/Description of Facilities.

NYSEG, in consultation with TrAILCo, shall select the Outage Start Date. NYSEG and
TrAILCo shall mutually select the Initial Energization Date and the Commercial Operation Date
for completion of the System Upgrade Facilities set forth in Appendix A hereto, including Stand
Alone System Upgrade Facilities, and such dates shall be set forth in Appendix B hereto.

5.1.1Construction of System Upgrade Facilities.

TrAILCo and NYSEG shall design, procure, construct and install the System Upgrade
Facilities, using Reasonable Efforts (unless Appendix C of this Agreement requires a superior
level of effort) to complete the System Upgrade Facilities in accordance with Appendices A and C, and by the dates set forth in Appendix B hereto. Certain System Upgrade Facilities, as set
forth in Appendix A hereto, shall be constructed by TrAILCo but shall be owned, operated,
maintained, tested, repaired and replaced by NYSEG. Neither NYSEG nor TrAILCo shall be
required to undertake any action which is inconsistent with its standard safety practices, its
material and equipment specifications, its design criteria and construction procedures, its labor agreements, and Applicable Laws and Regulations. In the event either NYSEG or TrAILCo
reasonably expects that it will not be able to complete the System Upgrade Facilities by the
specified dates, that Party shall promptly provide written notice to the other Party, and to the
NYISO, and shall undertake Reasonable Efforts (unless Appendix C of this Agreement requires a superior level of effort) to meet the earliest dates thereafter.

5.2Equipment Procurement.

If responsibility for construction of the System Upgrade Facilities is to be borne by TrAILCo, then TrAILCo shall commence the design of the System Upgrade Facilities, and procure necessary equipment, as soon as practicable after all of the following conditions are satisfied, unless NYSEG and TrAILCo otherwise agree in writing:

5.2.1TrAILCo has received written authorization to proceed with design and

procurement from NYSEG by the date specified in Appendix B hereto.

5.2.2TrAILCo has provided security to NYSEG in accordance with Appendix

C hereto.

5.3Construction Commencement.

TrAILCo shall commence construction of the System Upgrade Facilities for which it is

responsible as soon as practicable after the following additional conditions are satisfied:

5.3.1Approval of the appropriate Governmental Authority has been obtained

for any facilities requiring regulatory approval;

5.3.2Necessary real property rights and rights‐of‐way have been obtained, to

the extent required for the construction of the System Upgrade Facilities;

5.3.3TrAILCo has received written authorization to proceed with construction

from NYSEG; and

5.3.4TrAILCo has provided security to NYSEG in accordance with Appendix

C hereto.

5.4Work Progress.

NYSEG and TrAILCo will keep each other, and NYISO advised periodically as to the

progress of their respective design, procurement and construction efforts. Any Party may, at any time, request a progress report from TrAILCo or NYSEG. If, at any time, NYSEG determines that the completion of the System Upgrade Facilities will not be required until after the specified Commercial Operation Date, NYSEG will provide written notice to TrAILCo of such later date upon which the completion of the System Upgrade Facilities will be required.

5.5Information Exchange.

As soon as reasonably practicable after the Effective Date, NYSEG and TrAILCo shall
exchange information, and provide NYISO the same information, regarding the design and
compatibility of their respective System Upgrade Facilities, and the compatibility of their
respective System Upgrade Facilities, with the New York State Transmission System and PJM
Transmission System, and shall work diligently and in good faith to make any necessary design
changes.

5.6System Upgrade Facilities.

TrAILCo and NYSEG shall design, procure, construct, install and own the System Upgrade Facilities in accordance with Appendix A and the following.

5.6.1Specifications For System Upgrade Facilities.

The specifications for System Upgrade Facilities, including System Protection Facilities, are set forth in Appendix A.

5.6.2No Warranty.

The review by TrAILCo of NYSEG’s final specifications for System Upgrade Facilities to be constructed or installed by NYSEG shall not be construed as confirming, endorsing, or providing a warranty as to the design, fitness, safety, durability or reliability of those System Upgrade Facilities. NYSEG shall make such changes to those System Upgrade Facilities as may reasonably be required by TrAILCo in accordance with Good Utility Practice.

The review by NYSEG of TrAILCo’s final specifications for System Upgrade Facilities to be constructed or installed by TrAILCo shall not be construed as confirming, endorsing, or providing a warranty as to the design, fitness, safety, durability or reliability of those System Upgrade Facilities. TrAILCo shall make such changes to those System Upgrade Facilities as may reasonably be required by NYSEG in accordance with Good Utility Practice.

5.6.3Design and Construction.

The System Upgrade Facilities shall be designed and constructed in accordance with
Good Utility Practice. Within one hundred twenty (120) Calendar Days after the Commercial
Operation Date, unless NYSEG and TrAILCo agree on another mutually acceptable deadline,
TrAILCo shall deliver to NYSEG “as‐built” drawings, information and documents for the
System Upgrade Facilities, such as: a one‐line diagram, a site plan showing the Watercure Line
(as segmented) and the System Upgrade Facilities, plan and elevation drawings showing the
layout of the System Upgrade Facilities, a relay functional diagram, relaying AC and DC
schematic wiring diagrams and relay settings for all facilities associated with TrAILCo’s
step‐down transformers, the facilities connecting the Watercure Line to the step‐down
transformers and the System Upgrade Facilities, and the impedances (determined by factory

tests) for the associated step‐down transformers and the Watercure Line. NYSEG shall provide to TrAILCo, and coordinate with TrAILCo, with respect to proposed specifications for the
Watercure Line control and protection settings, transformer tap settings, and communications, if applicable. NYSEG and TrAILCo shall confer with the NYISO and PJM regarding the transfer of operational control of the System Upgrade Facilities to the NYISO, or PJM, as applicable,
upon completion of such facilities.

5.7[Reserved]

5.8Access Rights.

5.8.1NYSEG’s Access. Upon reasonable notice and supervision by the

TrAILCo, TrAILCo hereby authorizes the authorized agents, representatives, contractors, and
employees of NYSEG to enter the facilities of TrAILCo at all reasonable times and subject to
any required or necessary regulatory approvals, shall furnish to NYSEG at no cost any rights of
use, licenses, rights of way and easements with respect to lands owned or controlled by TrAILCo
to the extent reasonably required for NYSEG to obtain ingress and egress at the Point of
Interconnection to operate, maintain, repair, test (or witness testing), inspect, replace or remove
facilities and equipment to: (i) interconnect the Mainesburg Substation to the Watercure Line;
(ii) operate and maintain the Watercure Line, the System Upgrade Facilities owned by NYSEG,
and the New York State Transmission System; and (iii) disconnect or remove NYSEG’s
facilities and equipment upon termination of this Agreement. TrAILCo’s obligation hereunder
shall be to provide NYSEG (and its agents, representatives, contractors and employees) adequate
and continuous access to all sites where access is authorized under this Article 5.8. NYSEG and
its authorized agents, representatives, contractors and employees, shall comply with TrAILCo’s
safety and security procedures, switching and tagging rules, and escort and other applicable
15

access requirements, including NERC CIP requirements, in connection with exercising the rights of access granted hereby. TrAILCo shall give prompt notice to NYSEG of any changes to
TrAILCo’s safety and security procedures, switching and tagging rules, and escort and other applicable access requirements.

NYSEG must, prior to any access to TrAILCo’s facilities, and during the term of this Agreement, provide and maintain insurance in the kinds and amounts referred in Article 18.

TrAILCo reserves the right to deny access to NYSEG’s authorized agents, representatives, contractors and employees, in or around TrAILCo’s facilities if, in TrAILCo’s sole judgment, such authorized agents, representatives, contractors and employees are:

(a)bringing, using, distributing, selling or

possessing illegal drugs or alcoholic beverages at the TrAILCo’s facilities;

(b)unfit for duty at any time during their

assignment and under the influence of alcohol or other drugs; or

(c)otherwise engaged in any improper or

unlawful activity.

correct such conditions or practices. In exercising its access rights under this Article 5.8.1, NYSEG shall not unreasonably disrupt or interfere with normal operation of TrAILCo’s business and shall adhere to the safety rules and procedures established in advance, as may be changed from time to time, by TrAILCo and provided to NYSEG. In accordance with Article 18, NYSEG shall indemnify TrAILCo against all claims of injury or damage from third parties resulting from the exercise of the access rights provided for herein.

5.8.2 TrAILCo’s Access. Upon reasonable notice and supervision by NYSEG,

NYSEG hereby authorizes the authorized agents, representatives, contractors, and employees of
TrAILCo to enter the facilities of NYSEG at all reasonable times and subject to any required or
necessary regulatory approvals, shall furnish to TrAILCo at no cost any rights of use, licenses,
rights of way and easements with respect to lands owned or controlled by NYSEG to the extent
reasonably required for TrAILCo to obtain ingress and egress at the Point of Interconnection to
construct, operate, maintain, repair, test (or witness testing), inspect, replace or remove facilities
and equipment to: (i) interconnect the Mainesburg Substation to the Watercure Line; (ii) operate
and maintain the Mainesburg Substation, the System Upgrade Facilities owned by TrAILCo, and
the PJM Transmission System; and (iii) disconnect or remove the TrAILCo’s facilities and

equipment upon termination of this Agreement and return the Watercure Line to its pre-

connection with exercising the rights of access granted hereby. NYSEG shall give prompt notice to TrAILCo of any changes to NYSEG’s safety and security procedures, switching and tagging rules, and escort and other applicable access requirements.

TrAILCo must, prior to any access to NYSEG’s facilities, and during the term of this
Agreement, provide and maintain insurance in the kinds and amounts referred in Article 18
hereof.

NYSEG reserves the right to deny access to TrAILCo’s authorized agents,

representatives, contractors and employees, in or around the NYSEG’s facilities if, in NYSEG’s sole judgment, such authorized agents, representatives, contractors and employees are:

(a) bringing, using, distributing, selling or possessing illegal drugs or alcoholic beverages at the NYSEG’s facilities;

(b) unfit for duty at any time during their assignment and under the influence of alcohol or other drugs; or

and shall adhere to the safety rules and procedures established in advance, as may be changed from time to time, by NYSEG and provided to TrAILCo. In accordance with Article 18, TrAILCo shall indemnify NYSEG against all claims of injury or damage from third parties resulting from the exercise of the access rights provided for herein.

5.9Lands of Other Property Owners.

If any part of the System Upgrade Facilities is to be installed on or adjacent to property

owned by persons other than NYSEG or TrAILCo, TrAILCo shall at its own expense use efforts,
similar in nature and extent to those that it typically undertakes for its own or affiliated
transmission, including use of its eminent domain authority, and to the extent consistent with
state law, to procure from such persons any rights of use, licenses, rights of way and easements
that are necessary to construct, operate, maintain, test, inspect, replace or remove the System
Upgrade Facilities upon such property. NYSEG shall cooperate with TrAILCo’s efforts under
this Article 5.9.

5.10Permits.

TrAILCo and NYSEG shall cooperate with each other in good faith in obtaining all
permits, licenses and authorizations that are necessary to accomplish the interconnection in
compliance with Applicable Laws and Regulations. With respect to this paragraph, TrAILCo
shall provide permitting assistance to NYSEG comparable to that provided to TrAILCo’s own,
or an Affiliate’s, generation or transmission facilities, if any, provided that NYSEG shall pay
TrAILCo’s costs in providing such permitting assistance. With respect to this paragraph,
NYSEG shall provide permitting assistance to TrAILCo comparable to that provided to

NYSEG’s own, or an Affiliate’s, generation or transmission facilities, if any, provided that TrAILCo shall pay NYSEG’s costs in providing such permitting assistance.

5.11Tax Status; Non‐Jurisdictional Entities.

5.11.1Tax Status.

Each Party shall cooperate with the other Parties to maintain the other Parties’ tax status.

Nothing in this Agreement is intended to adversely affect the tax status of any Party, including

the status of the NYISO.

5.12Taxes.

5.12.1TrAILCo Payments Not Taxable.

NYSEG and TrAILCo intend that all payments or property transfers made by TrAILCo to NYSEG for the procurement, construction and installation of the NYSEG System Upgrade
Facilities, shall be non‐taxable, either as contributions to capital, or as an advance, in accordance with the Internal Revenue Code and any applicable state income tax laws and shall not be taxable as contributions in aid of construction or otherwise under the Internal Revenue Code and any
applicable state income tax laws.

5.12.2Representations and Covenants.

In accordance with IRS Notice 2001-82 and IRS Notice 88-129, as applicable, TrAILCo
represents and covenants that ownership of the electricity transmitted at the Point of
Interconnection will pass to another party prior to the transmission of the electricity on the New
York State Transmission System. NYSEG represents and covenants that the cost of the NYSEG
System Upgrade Facilities, paid for by TrAILCo, will have no net effect on the base upon which
rates are determined.

5.12.3Indemnification for the Cost Consequences of Current Tax Liability

Imposed Upon NYSEG.

Notwithstanding Article 5.12.1, TrAILCo shall protect, indemnify and hold harmless

NYSEG from the cost consequences of any current tax liability imposed against NYSEG as the result of payments or property transfers made by TrAILCo to NYSEG under this Agreement, as well as any interest and penalties, other than interest and penalties attributable to any delay
caused by NYSEG.

NYSEG shall not include a gross‐up for the cost consequences of any current tax liability
in the amounts it charges TrAILCo under this Agreement unless (i) NYSEG has determined, in
good faith, that the payments or property transfers made by TrAILCo to NYSEG should be
reported as income subject to taxation or (ii) any Governmental Authority directs NYSEG to
report payments or property as income subject to taxation; provided, however, that NYSEG may
require TrAILCo to provide security, in a form reasonably acceptable to NYSEG (such as a
parental guarantee or a letter of credit), in an amount equal to the cost consequences of any
current tax liability under this Article 5.12. TrAILCo shall reimburse NYSEG for such costs on
a fully grossed‐up basis, in accordance with Article 5.12.4, within thirty (30) Calendar Days of
receiving written notification from NYSEG of the amount due, including detail about how the
amount was calculated.

This indemnification obligation shall terminate at the earlier of (1) the expiration of the ten‐year testing period and the applicable statute of limitation, as it may be extended by NYSEG upon request of the IRS, to keep these years open for audit or adjustment, or (2) the occurrence of a subsequent taxable event and the payment of any related indemnification obligations as
contemplated by this Article 5.12.

5.12.4Tax Gross‐Up Amount.

TrAILCo’s liability for the cost consequences of any current tax liability under this

Article 5.12 shall be calculated on a fully grossed‐up basis. Except as may otherwise be agreed
to by the Parties, this means that TrAILCo will pay NYSEG, in addition to the amount paid for
the NYSEG System Upgrade Facilities, an amount equal to (1) the current taxes imposed on
NYSEG (“Current Taxes”) on the excess of (a) the gross income realized by NYSEG as a result
of payments or property transfers made by TrAILCo to NYSEG under this Agreement (without
regard to any payments under this Article 5.12) (the “Gross Income Amount”) over (b) the
present value of future tax deductions for depreciation that will be available as a result of such
payments or property transfers (the “Present Value Depreciation Amount”), plus (2) an
additional amount sufficient to permit NYSEG to receive and retain, after the payment of all
Current Taxes, an amount equal to the net amount described in clause (1).

For this purpose, (i) Current Taxes shall be computed based on NYSEG’s composite

federal and state tax rates at the time the payments or property transfers are received and NYSEG
will be treated as being subject to tax at the highest marginal rates in effect at that time (the
“Current Tax Rate”), and (ii) the Present Value Depreciation Amount shall be computed by
discounting NYSEG’s anticipated tax depreciation deductions as a result of such payments or
property transfers by NYSEG’s current weighted average cost of capital. Thus, the formula for
calculating TrAILCo’s liability to NYSEG pursuant to this Article 5.12.4 can be expressed as
follows: (Current Tax Rate x (Gross Income Amount ‐ Present Value of Tax Depreciation))/(1 ‐
Current Tax Rate).

5.12.5Private Letter Ruling or Change or Clarification of Law.

At TrAILCo’s request and expense, NYSEG shall file with the IRS a request for a private
letter ruling as to whether any property transferred or sums paid, or to be paid, by TrAILCo to
NYSEG under this Agreement are subject to federal income taxation. TrAILCo will prepare the
initial draft of the request for a private letter ruling, and will certify under penalties of perjury
that all facts represented in such request are true and accurate to the best of TrAILCo’s
knowledge. NYSEG and TrAILCo shall cooperate in good faith with respect to the submission
of such request.

NYSEG shall keep TrAILCo fully informed of the status of such request for a private

letter ruling and shall execute either a privacy act waiver or a limited power of attorney, in a

form acceptable to the IRS, that authorizes TrAILCo to participate in all discussions with the IRS regarding such request for a private letter ruling. NYSEG shall allow TrAILCo to attend all
meetings with IRS officials about the request and shall permit TrAILCo to prepare the initial drafts of any follow‐up letters in connection with the request.

5.12.6Subsequent Taxable Events.

If, within 10 years from the date on which the relevant NYSEG System Upgrade

Facilities are placed in service, (i) TrAILCo Breaches the covenants contained in Article 5.12.2, or (ii) this Agreement terminates and NYSEG retains ownership of the NYSEG System Upgrade Facilities, TrAILCo shall pay a tax gross‐up for the cost consequences of any current tax liability imposed on NYSEG, calculated using the methodology described in Article 5.12.4 and in
accordance with IRS Notice 90‐60.

5.12.7Contests.

In the event any Governmental Authority determines that NYSEG’s receipt of payments
or property constitutes income that is subject to taxation, NYSEG shall notify TrAILCo, in
writing, within thirty (30) Calendar Days of receiving notification of such determination by a
Governmental Authority. Upon the timely written request by TrAILCo and at TrAILCo’s sole
expense, NYSEG may appeal, protest, seek abatement of, or otherwise oppose such
determination. Upon TrAILCo’s written request and sole expense, NYSEG may file a claim for
refund with respect to any taxes paid under this Article 5.12, whether or not it has received such
a determination. NYSEG reserves the right to make all decisions with regard to the prosecution
of such appeal, protest, abatement or other contest, including the selection of counsel and
compromise or settlement of the claim, but NYSEG shall keep TrAILCo informed, shall
consider in good faith suggestions from TrAILCo about the conduct of the contest, and shall
reasonably permit TrAILCo or an TrAILCo representative to attend contest proceedings.

TrAILCo shall pay to NYSEG on a periodic basis, as invoiced by NYSEG, NYSEG’s

documented reasonable costs of prosecuting such appeal, protest, abatement or other contest. At
any time during the contest, NYSEG may agree to a settlement either with TrAILCo’s consent or
after obtaining written advice from nationally‐recognized tax counsel, selected by NYSEG, but
reasonably acceptable to TrAILCo, that the proposed settlement represents a reasonable
settlement given the hazards of litigation. TrAILCo’s obligation shall be based on the amount of
the settlement agreed to by TrAILCo, or if a higher amount, so much of the settlement that is
supported by the written advice from nationally‐recognized tax counsel selected under the terms
of the preceding sentence. The settlement amount shall be calculated on a fully grossed‐up basis

to cover any related cost consequences of the current tax liability. Any settlement without TrAILCo’s consent or such written advice will relieve TrAILCo from any obligation to indemnify NYSEG for the tax at issue in the contest.

5.12.8Refund.

In the event that (a) a private letter ruling is issued to NYSEG which holds that any

amount paid or the value of any property transferred by TrAILCo to NYSEG under the terms of
this Agreement is not subject to federal income taxation, (b) any legislative change or
administrative announcement, notice, ruling or other determination makes it reasonably clear to
NYSEG in good faith that any amount paid or the value of any property transferred by TrAILCo
to NYSEG under the terms of this Agreement is not taxable to NYSEG, (c) any abatement,
appeal, protest, or other contest results in a determination that any payments or transfers made by
TrAILCo to NYSEG are not subject to federal income tax, or (d) if NYSEG receives a refund
from any taxing authority for any overpayment of tax attributable to any payment or property
transfer made by TrAILCo to NYSEG pursuant to this Agreement, NYSEG shall promptly
refund to TrAILCo the following:

(i) Any payment made by TrAILCo under this Article 5.12 for taxes that is
attributable to the amount determined to be non‐taxable, together with interest thereon,

(ii) Interest on any amounts paid by TrAILCo to NYSEG for such taxes which

NYSEG did not submit to the taxing authority, calculated in accordance with the methodology set forth in FERC’s regulations at 18 C.F.R. §35.19a(a)(2)(iii) from the date payment was made by TrAILCo to the date NYSEG refunds such payment to TrAILCo, and

(iii)With respect to any such taxes paid by NYSEG, any refund or credit NYSEG

receives or to which it may be entitled from any Governmental Authority, interest (or that

portion thereof attributable to the payment described in clause (i), above) owed to NYSEG for such overpayment of taxes (including any reduction in interest otherwise payable by NYSEG to any Governmental Authority resulting from an offset or credit); provided, however, that NYSEG will remit such amount promptly to TrAILCo only after and to the extent that NYSEG has
received a tax refund, credit or offset from any Governmental Authority for any applicable
overpayment of income tax related to the NYSEG System Upgrade Facilities.

The intent of this provision is to leave both TrAILCo and NYSEG, to the extent

practicable, in the event that no taxes are due with respect to any payment for NYSEG System Upgrade Facilities hereunder, in the same position they would have been in had no such tax payments been made.

5.13 Taxes Other Than Income Taxes . Upon the timely request by TrAILCo, and at
TrAILCo’s sole expense, NYSEG shall appeal, protest, seek abatement of, or otherwise contest
any tax (other than federal or state income tax) asserted or assessed against NYSEG for which
TrAILCo may be required to reimburse NYSEG under the terms of this Agreement. TrAILCo
shall pay to NYSEG on a periodic basis, as invoiced by NYSEG, NYSEG’s documented
reasonable costs of prosecuting such appeal, protest, abatement, or other contest. TrAILCo and
NYSEG shall cooperate in good faith with respect to any such contest. Unless the payment of
such taxes is a prerequisite to an appeal or abatement or cannot be deferred, no amount shall be
payable by TrAILCo to NYSEG for such taxes until they are assessed by a final, nonappealable
order by any court or agency of competent jurisdiction. In the event that a tax payment is

withheld and ultimately due and payable after appeal, TrAILCo will be responsible for all taxes, interest and penalties, other than penalties attributable to any delay caused by NYSEG.

5.14Modification.

5.14.1General.

Either NYSEG or TrAILCo may undertake modifications to its facilities covered by this
Agreement. If either NYSEG or TrAILCo plans to undertake a modification that reasonably
may be expected to affect the other Party’s facilities, that Party shall provide to the other Party,
and to NYISO sufficient information regarding such modification so that the other Party and
NYISO may evaluate the potential impact of such modification prior to commencement of the
work. Such information shall be deemed to be Confidential Information hereunder and shall

include information concerning the timing of such modifications and whether such modifications are expected to interrupt the transmission of electricity at the Point(s) of Interconnection. The Party desiring to perform such work shall provide the relevant drawings, plans, and
specifications to the other Party and NYISO at least ninety (90) Calendar Days in advance of the commencement of the work or such shorter period upon which the Parties may agree, which agreement shall not unreasonably be withheld, conditioned or delayed.

In the case of Transmission Facility modifications, the Party making such modification
shall provide reasonable prior notice of such modifications to the other Parties. For
modifications that do not require TrAILCo or NYSEG to submit an Interconnection Request, the
NYISO, in consultation with the other Parties, shall use Reasonable Efforts to provide, within
sixty (60) Calendar Days (or such other time as the Parties may agree), an estimate of any
additional modifications to the New York State Transmission System or System Upgrade

Facilities necessitated by such modification and a good faith estimate of the costs thereof.

TrAILCo shall be responsible for the cost of any such additional modifications, including the cost of studying the impact of the TrAILCo modification.

5.14.2Standards.

Except as provided in Appendix A or C, (a) any additions, modifications, or replacements made to TrAILCo’s facilities shall be designed, constructed and operated in accordance with this Agreement, applicable NYISO and PJM requirements, and Good Utility Practice, and (b) any
additions, modifications, or replacements made to NYSEG’s facilities shall be designed,
constructed and operated in accordance with this Agreement, applicable NYISO requirements,
and Good Utility Practice.

5.14.3Modification Costs.

NYSEG shall not be assigned the costs of any additions, modifications, or replacements
that TrAILCo makes to System Upgrade Facilities owned by TrAILCo, or the PJM Transmission
System to facilitate the interconnection of a third party to the System Upgrade Facilities owned
by TrAILCo, or the PJM Transmission System, or to provide Transmission Service to a third
party under the PJM OATT. NYSEG shall be responsible for the costs of any additions,
modifications, or replacements to the System Upgrade Facilities owned by NYSEG, that may be
necessary to maintain or upgrade such NYSEG System Upgrade Facilities consistent with
Applicable Laws and Regulations, Applicable Reliability Standards or Good Utility Practice
except if such additions, modifications, or replacements are required as a result of modifications
made by TrAILCo to its System Upgrade Facilities, in which case TrAILCo shall be responsible
for such costs.

TrAILCo shall not be assigned the costs of any additions, modifications, or replacements
that NYSEG makes to the System Upgrade Facilities owned by NYSEG, or the New York State
Transmission System to facilitate the interconnection of a third party to the System Upgrade
Facilities owned by NYSEG, or the New York State Transmission System, or to provide
Transmission Service to a third party under the NYISO Tariff, except in accordance with the cost
allocation procedures in Attachment S of the NYISO Tariff or as approved by the appropriate
Governmental Authority. TrAILCo shall be responsible for the costs of any additions,
modifications, or replacements to the System Upgrade Facilities owned by TrAILCo, that may
be necessary to maintain or upgrade such TrAILCo System Upgrade Facilities consistent with
Applicable Laws and Regulations, Applicable Reliability Standards or Good Utility Practice
except if such additions, modifications, or replacements are required as a result of modifications
made by NYSEG to its System Upgrade Facilities, in which case NYSEG shall be responsible
for such costs.

ARTICLE 6. TESTING AND INSPECTION

6.1 Pre‐Commercial Operation Date Testing and Modifications.

Prior to the Commercial Operation Date, TrAILCo shall test its System Upgrade

Facilities, and NYSEG shall test its System Upgrade Facilities to ensure their safe and reliable operation. Similar testing may be required after initial operation. NYSEG and TrAILCo shall each make any modifications to its facilities that are found to be necessary as a result of such testing. TrAILCo shall bear the cost of all such testing and modifications to its and NYSEG’s System Upgrade Facilities. NYSEG and TrAILCo shall transmit test energy through the Point(s) of Interconnection only if it has arranged for the transmission of such test energy in accordance with TrAILCo, PJM, NYSEG and NYISO procedures.

6.2Post‐Commercial Operation Date Testing and Modifications.

NYSEG and TrAILCo shall each at its own expense perform routine inspection and

testing of its facilities and equipment in accordance with Good Utility Practice and Applicable Reliability Standards as may be necessary to ensure the continued interconnection of the
Mainesburg Substation with the New York State Transmission System in a safe and reliable
manner. NYSEG and TrAILCo shall each have the right, upon advance written notice, to require reasonable additional testing of the other Party’s facilities, at the requesting Party’s expense, as may be in accordance with Good Utility Practice.

6.3Right to Observe Testing.

NYSEG and TrAILCo shall each notify the other Party, and the NYISO, in advance of its performance of tests of the System Upgrade Facilities. The other Party, and the NYISO, shall have the right, at its own expense, to observe such testing.

6.4Right to Inspect.

NYSEG and TrAILCo shall each have the right, but shall have no obligation to: (i)

observe the other Party’s tests and/or inspection of any of its System Protection Facilities and
other protective equipment; (ii) review the settings of the other Party’s System Protection
Facilities and other protective equipment; and (iii) review the other Party’s maintenance records
relative to the System Upgrade Facilities, the System Protection Facilities and other protective
equipment. NYISO shall have the same rights of inspection as to the facilities and equipment of
NYSEG and TrAILCo. A Party may exercise these rights from time to time as it deems
necessary upon reasonable notice to the other Party. The exercise or nonexercise by a Party of
any such rights shall not be construed as an endorsement or confirmation of any element or

condition of the System Upgrade Facilities, or the System Protection Facilities or other

protective equipment or the operation thereof, or as a warranty as to the fitness, safety,

desirability, or reliability of same. Any information that a Party obtains through the exercise of
any of its rights under this Article 6.4 shall be treated in accordance with Article 22 of this
Agreement.

ARTICLE 7. METERING

7.1General.

NYSEG and TrAILCo shall each comply with applicable requirements of the NYISO

when exercising its rights and fulfilling its responsibilities under this Article 7. Unless otherwise
agreed by TrAILCo and NYSEG, TrAILCo shall install Metering Equipment at the Point(s) of
Interconnection prior to any operation of the Transmission Facility and shall operate, test and
maintain such Metering Equipment. Net power flows including MW and MVAR, MWHR and
loss profile data to and from the Watercure Line shall be measured at the Point(s) of
Interconnection. TrAILCo shall provide metering quantities, in analog and/or digital form, as
required, to the other Parties, upon request. TrAILCo shall bear all reasonable documented costs
associated with the purchase, installation, operation, testing and maintenance of the Metering
Equipment.

7.2Check Meters.

NYSEG, at its option and expense, may install and operate, on its premises and on its

side of the Point of Interconnection, one or more check meters to check TrAILCo’s meters. Such
check meters shall be for check purposes only and shall not be used for the measurement of
power flows for purposes of this Agreement, except as provided in Article 7.4 below. The check
31

meters shall be subject at all reasonable times to inspection and examination by TrAILCo or its designee. The installation, operation and maintenance thereof shall be performed entirely by NYSEG in accordance with Good Utility Practice.

7.3Standards.

TrAILCo shall install, calibrate, and test revenue quality Metering Equipment including potential transformers and current transformers in accordance with applicable ANSI and
Governmental Authority standards, including applicable NYISO requirements.

7.4Testing of Metering Equipment.

TrAILCo shall inspect and test all of the Metering Equipment upon installation and

thereafter in accordance with applicable NYISO requirements. TrAILCo shall give reasonable
notice of the time when any inspection or test shall take place, and NYSEG may have
representatives present at the test or inspection. If at any time Metering Equipment is found to
be inaccurate or defective, it shall be adjusted, repaired or replaced at the owner’s expense, in
order to provide accurate metering, unless the inaccuracy or defect is due to TrAILCo’s failure to
maintain, then TrAILCo shall pay. If Metering Equipment fails to register, or if the
measurement made by Metering Equipment during a test varies by more than the range set forth
in the applicable NYISO or PJM standard, TrAILCo shall adjust the measurements by correcting
all measurements for the period during which Metering Equipment was in error by using the
other Party’s check meters, if installed. If no such check meters are installed or if the period
cannot be reasonably ascertained, the adjustment shall be for the period immediately preceding
the test of the Metering Equipment equal to one‐half the time from the date of the last previous
test of the Metering Equipment. NYISO reserves the right to inspect all Metering Equipment

installed on NYSEG’s or TrAILCo’s property at reasonable times and upon reasonable notice to NYSEG or TrAILCo, as applicable.

7.5Metering Data.

Subject to the provisions of Appendix C, and at TrAILCo’s expense, the metered data

shall be telemetered to one or more locations designated by TrAILCo and NYSEG. Such

telemetered data shall be used, under normal operating conditions, as the official measurement of the amount of energy delivered from the Watercure Line to the Point of Interconnection and/or from the Transmission Facility to the Point of Interconnection.

ARTICLE 8. COMMUNICATIONS

8.1TrAILCo Obligations.

In accordance with applicable NYISO requirements, and subject to Appendix C,

TrAILCo shall install and maintain satisfactory operating communications with NYSEG and
NYISO. TrAILCo shall provide the equipment, labor and contract services and dedicated data
circuit(s) necessary to provide TrAILCo data to NYSEG and NYISO in accordance with
applicable NYISO and NYSEG requirements. The data circuit(s) shall extend from the
Transmission Facility to the location(s) specified by NYSEG. Any required repair, replacement
or maintenance of such communications equipment shall be performed by TrAILCo.
Operational communications shall be activated and maintained under, but not limited to, the
following events: system paralleling or separation, scheduled and unscheduled outages,
equipment clearances, and hourly and daily load data. Prior to the Commercial Operation Date,
satisfactory communications shall be in place, in accordance with this Article 8.1 and Paragraph
B(2) of Appendix C.

8.2Remote Terminal Unit.

A Remote Terminal Unit, or equivalent data collection and transfer equipment acceptable
to the Parties, shall be installed by TrAILCo at TrAILCo’s expense, in accordance with Section
B(2) of Appendix C, to gather accumulated and instantaneous data to be telemetered to the
location(s) designated by TrAILCo. Each Party will promptly advise the appropriate 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 that other Party. The Party
owning such equipment shall correct such error or malfunction as soon as reasonably feasible.

8.3No 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 Party providing such
equipment and the Party receiving such equipment.

ARTICLE 9. OPERATIONS

9.1General.

Each Party shall comply with Applicable Laws and Regulations and Applicable

Reliability Standards. Each Party shall provide to the other Parties all information that may

reasonably be required by the other Parties to comply with Applicable Laws and Regulations and Applicable Reliability Standards.

9.2NYSEG Obligations.

NYSEG shall, at its own expense, operate, maintain and control the System Upgrade Facilities owned by NYSEG in a safe and reliable manner in accordance with this Agreement and the NYISO Tariff.

9.3TrAILCo Obligations.

TrAILCo shall, at its own expense, operate, maintain and control the System Upgrade

Facilities owned by TrAILCo, including the Transmission Facility, in a safe and reliable manner

in accordance with this Agreement and the PJM Tariff.

9.4Synchronization.

Consistent with the mutually acceptable procedures of NYSEG and TrAILCo and the

NYISO and PJM, NYSEG and TrAILCo are responsible for the proper synchronization of the

Mainesburg Substation to the New York State Transmission System.

9.5[Reserved]

9.6Outages and Interruptions.

9.6.1Outages.

9.6.1.1Outage Authority and Coordination. NYSEG may, in

accordance with applicable NYISO procedures and Good Utility Practice, and in coordination
with TrAILCo remove from service any of its respective System Upgrade Facilities that may
impact TrAILCo’s facilities as necessary to perform maintenance or testing or to install or
replace equipment. TrAILCo may, in accordance with applicable PJM procedures and Good
Utility Practice, and in coordination with NYSEG, remove from service any of its respective
System Upgrade Facilities that may impact NYSEG’s facilities as necessary to perform

maintenance or testing or to install or replace equipment. Absent an Emergency, or Emergency
State, the Party scheduling a removal of such facility(ies) from service will use Reasonable
Efforts to schedule such removal on a date and time mutually acceptable to both NYSEG and
TrAILCo. In all circumstances either Party planning to remove such facility(ies) from service
shall use Reasonable Efforts to minimize the effect on the other Party of such removal.

9.6.1.2 Outage Schedules. NYSEG shall post scheduled outages of its

transmission facilities on the NYISO OASIS, and TrAILCo shall post scheduled outages of its transmission facilities on the PJM OASIS.

9.6.1.3 Outage Restoration. If an outage on the System Upgrade

Facilities of TrAILCo or NYSEG adversely affects the other Party’s operations or facilities, the
Party that owns the facility that is out of service shall use Reasonable Efforts to promptly restore
such facility(ies) to a normal operating condition consistent with the nature of the outage. The
Party that owns the facility that is out of service shall provide the other Party, and to the NYISO,
or PJM, as applicable, to the extent such information is known, information on the nature of the
Emergency or Emergency State, an estimated time of restoration, and any corrective actions

required. Initial verbal notice shall be followed up as soon as practicable with written notice explaining the nature of the outage.

9.6.2 Interruption of Service. If required by Good Utility Practice or

Applicable Reliability Standards to do so, TrAILCo may require NYSEG to interrupt or reduce
transmission of electricity over the Watercure Line, and NYSEG may require TrAILCo to
interrupt or reduce transmission of electricity over the Transmission Facility if either TrAILCo,
NYSEG or the NYISO deems the interruption of such transmission of electricity to be necessary:

(a) for purposes of Good Utility Practice, to protect a Party’s facilities from physical damage or to prevent injury or damage to persons or property; or (b) to comply with Applicable Reliability Standards. The following provisions shall apply to any interruption or reduction permitted under this Article 9.6.2:

9.6.2.1 The interruption or reduction shall continue only for so long as

reasonably necessary to: (a) protect its facilities from physical damage or to prevent injury or damage to persons or property under Good Utility Practice; or (b) comply with Applicable Reliability Standards;

9.6.2.2 Any such interruption or reduction shall be made on an equitable,

non-discriminatory basis with respect to all transmission facilities directly connected to that part of the PJM Transmission System and New York State Transmission System owned, respectively, by TrAILCo or NYSEG;

9.6.2.3 When the interruption or reduction must be made under

circumstances which do not allow for advance notice, TrAILCo or NYSEG, as applicable, shall notify the other Party (and the NYISO) by telephone as soon as practicable of the reasons for the curtailment, interruption, or reduction, and, if known, its expected duration. Telephone notification shall be followed by written notification as soon as practicable;

9.6.2.4 Except during the existence of an Emergency or Emergency State,

when the interruption or reduction can be scheduled without advance notice, TrAILCo or
NYSEG, as applicable, shall notify the other Party (and the NYISO) in advance regarding the
timing of such scheduling and further notify the other Party (and the NYISO) of the expected
duration. TrAILCo and NYSEG, as applicable, shall coordinate with the other Party (and the

NYISO) using Good Utility Practice to schedule the interruption or reduction during periods of least impact to both NYSEG and TrAILCo, the New York State Transmission System, and the PJM Transmission System; and

9.6.2.5 The Parties shall cooperate and coordinate with each other, and the

PJM and NYISO, to the extent necessary in order to restore the Watercure Line, System Upgrade Facilities, the New York State Transmission System, and the PJM Transmission System to their normal operating state, consistent with system conditions and Good Utility Practice, and in accordance with the directives of the NYISO and PJM.

9.6.3System Protection and Other Control Requirements.

9.6.3.1System Protection Facilities. TrAILCo shall install, operate and

maintain, at its expense, any System Protection Facilities that may be required on TrAILCo’s
facilities, including its System Upgrade Facilities, as a result of the interconnection of the
Transmission Facility to the New York State Transmission System. NYSEG shall install at
TrAILCo’s expense any System Protection Facilities that may be required on the NYSEG’s
facilities, including its System Upgrade Facilities or the New York State Transmission System as
a result of the interconnection of the Transmission Facility to the New York State Transmission
System.

9.6.3.2 The protection facilities of both NYSEG and TrAILCo shall be

designed and coordinated with other systems in accordance with Good Utility Practice and Applicable Reliability Standards.

9.6.3.3NYSEG and TrAILCo shall each be responsible for protection of

its respective facilities consistent with Good Utility Practice and Applicable Reliability Standards.

9.6.3.4 The protective relay design of NYSEG and TrAILCo shall each

incorporate the necessary test switches to perform the tests required in Article 6 of this

Agreement. 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/or the tripping of NYSEG’s Watercure Line or the System Upgrade Facilities.

9.6.3.5 NYSEG and TrAILCo will each test, operate and maintain System

Protection Facilities in accordance with Good Utility Practice and applicable ReliabilityFirst and NPCC criteria.

9.6.3.6 Prior to the Commercial Operation Date, NYSEG and TrAILCo

shall each perform, or their agents shall perform, a complete calibration test and functional trip test of the System Protection Facilities. At intervals suggested by Good Utility Practice and
following any apparent malfunction of the System Protection Facilities, NYSEG and TrAILCo shall each perform both calibration and functional trip tests of the System Protection Facilities in a manner and at intervals consistent with TrAILCo’s standard practice for performing such tests. 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.

9.6.4Requirements for Protection.

In compliance with applicable ReliabilityFirst and NPCC requirements, and Good Utility
Practice, NYSEG and TrAILCo, as applicable, shall provide, install, own, and maintain relays,
circuit breakers and all other devices necessary to remove any fault contribution of the Watercure
Line or the Mainesburg Substation to any short circuit occurring on the New York State
Transmission System or the PJM Transmission System not otherwise isolated by the other
Party’s equipment, such that the removal of the fault contribution shall be coordinated with the
protective requirements of the New York State Transmission System or the PJM Transmission
System. Such protective equipment shall include, without limitation, a disconnecting device or
switch with load‐interrupting capability located between the Transmission Facility and the New
York State Transmission System at a site selected upon mutual agreement (not to be
unreasonably withheld, conditioned or delayed) of NYSEG and TrAILCo.

9.6.5Power Quality.

Neither the facilities of NYSEG nor the facilities of TrAILCo shall cause excessive

voltage flicker nor introduce excessive distortion to the sinusoidal voltage or current waves as
defined by ANSI Standard C84.1‐1989, in accordance with IEEE Standard 519, or any
applicable superseding electric industry standard. In the event of a conflict between ANSI
Standard C84.1‐1989, or any applicable superseding electric industry standard, ANSI Standard
C84.1‐1989, or the applicable superseding electric industry standard, shall control.

9.7Switching and Tagging Rules.

NYSEG and TrAILCo shall each provide the other Party a copy of its switching and

tagging rules that are applicable to the other Party’s activities. Such switching and tagging rules

shall be developed on a nondiscriminatory basis. The Parties shall comply with applicable

switching and tagging rules, as amended from time to time, in obtaining clearances for work or for switching operations on equipment.

9.8[Reserved]

9.9Disturbance Analysis Data Exchange.

The Parties will cooperate with one another and the NYISO in the analysis of

disturbances to either the Mainesburg Substation, the PJM Transmission System, the Watercure Line, or the New York State Transmission System by gathering and providing access to any information relating to any disturbance, including information from disturbance recording
equipment, protective relay targets, breaker operations and sequence of events records, and any disturbance information required by Good Utility Practice.

9.10 Emergency Operations

NYSEG shall have the right, including but not limited to after receiving a directive from the NYISO, to direct TrAILCo to take action with regard to breakers at the Mainesburg
Substation necessary to disconnect the MHC Segment in order to respond to an Emergency as set forth in Articles 9.10.1 and 9.10.2 below.

9.10.1NYSEG does not have the right nor the capability to open breakers at the

Mainesburg Substation, but rather NYSEG will have the unilateral right to direct TrAILCo to undertake that action with regard to necessary breakers at the Mainesburg Substation to
disconnect the MHC Segment based on directives from NYISO or based on conditions or circumstances requiring a response to an Emergency; and

9.10.2 TrAILCo agrees that it shall promptly take the actions specified in a

directive issued by NYSEG as indicated in Articles 9.10 and 9.10.1 above in a safe and efficient manner and consistent with Good Utility Practice.

ARTICLE 10. MAINTENANCE

10.1TrAILCo Obligations.

TrAILCo shall maintain the Mainesburg Substation and System Upgrade Facilities
owned by TrAILCo in a safe and reliable manner and in accordance with this Agreement.

10.2NYSEG Obligations.

NYSEG shall maintain the Watercure Line and System Upgrade Facilities owned by NYSEG in a safe and reliable manner and in accordance with this Agreement.

10.3Coordination.

NYSEG and TrAILCo shall confer regularly to coordinate the planning, scheduling and performance of preventive and corrective maintenance on the Mainesburg Substation, Watercure Line, and the System Upgrade Facilities. NYSEG and TrAILCo shall keep NYISO fully
informed of the preventive and corrective maintenance that is planned, and shall schedule all such maintenance in accordance with NYISO procedures.

10.4Secondary Systems.

NYSEG and TrAILCo shall each cooperate with the other in the inspection, maintenance, and testing of control or power circuits that operate below 600 volts, AC or DC, including, but
not limited to, any hardware, control or protective devices, cables, conductors, electric raceways, secondary equipment panels, transducers, batteries, chargers, and voltage and current
transformers that directly affect the operation of NYSEG or TrAILCo’s facilities and equipment which may reasonably be expected to impact the other Party. NYSEG and TrAILCo shall each
provide advance notice to the other Party, and to NYISO, before undertaking any work on such
circuits, especially on electrical circuits involving circuit breaker trip and close contacts, current transformers, or potential transformers.

10.5 Operating and Maintenance Expenses.

Subject to the provisions herein addressing the use of facilities by others, and except for operations and maintenance expenses associated with modifications made for providing
interconnection or transmission service to a third party and such third party pays for such
expenses, TrAILCo shall be responsible for all reasonable expenses including overheads,
associated with: owning, operating, maintaining, repairing, and replacing its System Upgrade Facilities. NYSEG shall be entitled to the recovery of incremental operating and maintenance expenses that it incurs associated with System Upgrade Facilities, if and to the extent provided for under Attachment S to the NYISO OATT.

ARTICLE 11. PERFORMANCE OBLIGATION

11.1 Compensation for Emergency Services.

If, during an Emergency State, NYSEG provides services at the request or direction of
TrAILCo, NYSEG will be compensated for such services. If, during an Emergency State,
TrAILCo provides services at the request or direction of NYSEG, TrAILCo will be compensated for such services.

11.2Line Outage Costs.

Notwithstanding anything in Applicable Laws and Regulations to the contrary, NYSEG may propose to recover line outage costs associated with the installation of TrAILCo System Upgrade Facilities on a case‐by‐case basis; provided, however, NYSEG shall not have the right to recover line outage costs from TrAILCo if such line outage costs are caused by NYSEG’s Default under this Agreement.

ARTICLE 12. INVOICE

12.1General.

Each Party shall each submit to another Party, on a monthly basis, invoices of amounts
due for the preceding month, as applicable. Each invoice shall state the month to which the
invoice applies and fully describe the services and equipment provided. The Parties may
discharge mutual debts and payment obligations due and owing to each other on the same date
through netting, in which case all amounts one Party owes to the other Party under this
Agreement, including interest payments or credits, shall be netted so that only the net amount
remaining due shall be paid by the owing Party. The allocation of any costs, expenses, or

charges to a Party under this Agreement shall not in any way limit the right of each Party to
collect such costs or charges in rates approved by the appropriate Governmental Authority.

12.2Payment.

Invoices shall be rendered to the paying Party at the address specified in Appendix E

hereto. The Party receiving the invoice shall pay the invoice within thirty (30) Calendar Days of
receipt. All payments shall be made in immediately available funds payable to the other Party,
or by wire transfer to a bank named and account designated by the invoicing Party. Payment of
invoices will not constitute a waiver of any rights or claims the paying Party may have under this
Agreement.

12.3Disputes.

In the event of a billing dispute between the Parties, each Party shall continue to perform
under this Agreement and such dispute shall be subject to resolution in accordance with Article

27. Within thirty (30) Calendar Days after the resolution of the dispute, the Party that owes money to the other Party shall pay the amount due with interest calculated in accord with the methodology set forth in FERC’s Regulations at 18 C.F.R. § 35.19a(a)(2)(iii).

ARTICLE 13. EMERGENCIES

13.1Obligations.

Subject to Article 9.10, NYSEG shall comply with the Emergency State procedures of
NYISO, the Applicable Reliability Councils, and Applicable Laws and Regulations, and (b)
TrAILCo shall comply with the Emergency State procedures of PJM, the applicable Reliability
Councils, and Applicable Laws and Regulations. TrAILCo and NYSEG agree to coordinate

with NYISO and PJM to develop procedures that will address the operations of the Watercure Line and the Mainesburg Substation during emergency conditions.

13.2Notice.

Each Party shall notify the other Parties promptly when it becomes aware of an

Emergency or Emergency State that affects, or may reasonably be expected to affect, the

Transmission Facility, the Watercure Line, the System Upgrade Facilities, the New York State

Transmission System, or the PJM Transmission System. To the extent information is known, the notification shall describe the Emergency or Emergency State, the extent of the damage or
deficiency, the expected effect on the operation of NYSEG’s or TrAILCo’s facilities and
operations, its anticipated duration and the corrective action taken and/or to be taken. The initial notice shall be followed as soon as practicable with written notice.

13.3Immediate Action.

Subject to Article 9.10, or unless, in NYSEG’s reasonable judgment, immediate action is
required, NYSEG shall obtain the consent of TrAILCo, such consent to not be unreasonably
withheld, or delayed, prior to performing any manual switching operations at the Watercure Line
or Systems Upgrade Facilities owned by NYSEG in response to an Emergency or Emergency
State either declared by NYISO, TrAILCo or otherwise regarding New York State Transmission
System. Unless, in TrAILCo’s reasonable judgment, immediate action is required, TrAILCo
shall obtain the consent of NYSEG, such consent not to be unreasonably withheld, prior to
performing any manual switching operations at the TrAILCo System Upgrade Facilities in
response to an Emergency or Emergency State either declared by PJM, or TrAILCo, or otherwise
regarding the PJM Transmission System.

13.4TrAILCo and NYSEGAuthority.

Subject to Article 9.10 and consistent with Good Utility Practice, TrAILCo or NYSEG,
as the case may be, may take whatever actions with regard to the New York State Transmission
System, the PJM Transmission System, and the System Upgrade Facilities owned by that Party,
as it deems necessary during an Emergency or Emergency State in order to: (i) preserve public
health and safety; (ii) preserve the reliability of the PJM Transmission System and the New York
State Transmission System, as applicable; (iii) limit or prevent damage; and (iv) expedite

restoration of service. NYSEG and TrAILCo shall use Reasonable Efforts to assist the other in such actions.

13.5Limited Liability.

No Party shall be liable to any other Party for any action it takes in responding to an

Emergency or Emergency State so long as such action is made in good faith and is consistent

with Good Utility Practice.

ARTICLE 14. REGULATORY REQUIREMENTS AND GOVERNING LAW

14.1Regulatory Requirements.

Each Party’s obligations under this Agreement shall be subject to its receipt of any

required approval or certificate from one or more Governmental Authorities in the form and

substance satisfactory to the applying Party, or the Party making any required filings with, or

providing notice to, such Governmental Authorities, and the expiration of any time period

associated therewith. Each Party shall in good faith seek and use its Reasonable Efforts to obtain
such other approvals. Nothing in this Agreement shall require TrAILCo or NYSEG to take any
action that could result in its inability to obtain, or its loss of, status or exemption under the

Federal Power Act, the Public Utility Holding Company Act of 2005 or the Public Utility Regulatory Policies Act of 1978, as amended.

14.2Governing Law.

14.2.1The validity, interpretation and performance of this Agreement and each

of its provisions shall be governed by the laws of the State of New York, without regard to its

conflicts of law principles.

14.2.2This Agreement is subject to all Applicable Laws and Regulations.

14.2.3Each Party expressly reserves the right to seek changes in, appeal, or

otherwise contest any law, orders, rules, or regulations of a Governmental Authority.

ARTICLE 15. NOTICES

15.1General.

Unless otherwise provided in this Agreement, any notice, demand or request required or permitted to be given by a Party to the other Parties and any instrument required or permitted to be tendered or delivered by a Party in writing to the other Parties shall be effective when
delivered and may be so given, tendered or delivered, by recognized national courier, or by
depositing the same with the United States Postal Service with postage prepaid, for delivery by certified or registered mail, addressed to the Party, or personally delivered to the Party, at the
address set out in Appendix E hereto.

A Party may change the notice information in this Agreement by giving five (5) Business Days written notice prior to the effective date of the change.

15.2Billings and Payments.

Billings and payments shall be sent to the addresses set out in Appendix E hereto.

15.3 Alternative Forms of Notice.

Any notice or request required or permitted to be given by a Party to the other Parties and not required by this Agreement to be given in writing may be so given by telephone, facsimile or email to the telephone numbers and email addresses set out in Appendix E hereto.

15.4 Operations and Maintenance Notice.

NYSEG and TrAILCo shall each notify the other Party, and NYISO, in writing of the identity of the person(s) that it designates as the point(s) of contact with respect to the
implementation of Articles 9 and 10 of this Agreement.

ARTICLE 16. FORCE MAJEURE

16.1Force Majeure.

16.1.1Economic hardship is not considered a Force Majeure event.

16.1.2A Party shall not be responsible or liable, or deemed, in Default with

respect to any obligation hereunder, (including obligations under Article 4 of this Agreement) ,
other than the obligation to pay money when due, to the extent the Party is 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 Parties in writing or by telephone as
soon as reasonably possible after the occurrence of the cause relied upon. Telephone notices
given pursuant to this Article 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.

ARTICLE 17. DEFAULT

17.1Default.

17.1.1General.

No Breach 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 Parties. Upon a Breach, the non‐Breaching Parties shall give written
notice of such to the Breaching Party. The Breaching Party shall have thirty (30) Calendar Days
from receipt of the Breach notice within which to cure such Breach; provided however, if such
Breach is not capable of cure within thirty (30) Calendar Days, the Breaching Party shall
commence such cure within thirty (30) Calendar Days after notice and continuously and
diligently complete such cure within ninety (90) Calendar Days from receipt of the Breach
notice; and, if cured within such time, the Breach specified in such notice shall cease to exist.

17.1.2Right to Terminate.

If a Breach is not cured as provided in this Article 17, or if a Breach is not capable of

being cured within the period provided for herein, the non‐Breaching Parties acting together shall
thereafter have the right to declare a Default and terminate this Agreement by written notice at

any time until cure occurs, and be relieved of any further obligation hereunder and, whether or not those Parties terminate this Agreement, to recover from the defaulting Party all amounts due hereunder, plus all other damages and remedies to which they are entitled at law or in equity. The provisions of this Article will survive termination of this Agreement.

ARTICLE 18. INDEMNITY, LIMITATION OF LIABILITY, AND INSURANCE

18.1Indemnity.

Except as provided in Appendix C, NYSEG or TrAILCo (the “Indemnifying Party”) shall at all times indemnify, defend, and save harmless, as applicable, the other Parties (each an
“Indemnified Party”) from, any and all Losses arising out of or resulting from (i) the
Indemnifying’s Party’s Breach, negligence, or intentional wrongdoing under this Agreement,
except in cases where the Indemnifying Party can demonstrate that the Loss of the Indemnified
Party was caused (in whole or in part) by the gross negligence or intentional wrongdoing of the
Indemnified Party or (ii) the violation by the Indemnifying Party of any Environmental Law or
the release by the Indemnifying Party of any Hazardous Substance. TrAILCo shall provide an
additional, independent indemnity to NYSEG in accordance with the provisions of Section C(10) of Appendix C, and any conflict between that provision of Appendix C and this Article 18 shall be resolved in favor of Section C(10) of Appendix C.

18.1.1Indemnified Party.

expense of the Indemnifying Party contest, settle or consent to the entry of any judgment with respect to, or pay in full, such claim.

18.1.2Indemnifying Party.

If an Indemnifying Party is obligated to indemnify and hold any Indemnified Party

harmless under this Article 18, the amount owing to the Indemnified Party shall be the amount of such Indemnified Party’s actual Loss, net of any insurance or other recovery.

18.1.3Indemnity Procedures.

Promptly after receipt by an Indemnified Party of any claim or notice of the

commencement of any action or administrative or legal proceeding or investigation as to which
the indemnity provided for in Article 18.1 may apply, the Indemnified Party shall notify the
Indemnifying Party of such fact. Any failure of or delay in such notification shall not affect a
Party’s indemnification obligation unless such failure or delay is materially prejudicial to the
Indemnifying Party.

Except as stated below, the Indemnifying Party shall have the right to assume the defense
thereof with counsel designated by such Indemnifying Party and reasonably satisfactory to the
Indemnified Party. If the defendants in any such action include one or more Indemnified Parties
and the Indemnifying Party and if the Indemnified Party reasonably concludes that there may be
legal defenses available to it and/or other Indemnified Parties which are different from or
additional to those available to the Indemnifying Party, the Indemnified Party shall have the right
to select separate counsel to assert such legal defenses and to otherwise participate in the defense
of such action on its own behalf. In such instances, the Indemnifying Party shall only be

required to pay the fees and expenses of one additional attorney to represent an Indemnified Party or Indemnified Parties having such differing or additional legal defenses.

The Indemnified Party shall be entitled, at its expense, to participate in any such action,
suit or proceeding, the defense of which has been assumed by the Indemnifying Party.
Notwithstanding the foregoing, the Indemnifying Party (i) shall not be entitled to assume and
control the defense of any such action, suit or proceedings if and to the extent that, in the opinion
of the Indemnified Party and its counsel, such action, suit or proceeding involves the potential
imposition of criminal liability on the Indemnified Party, or there exists a conflict or adversity of
interest between the Indemnified Party and the Indemnifying Party, in such event the
Indemnifying Party shall pay the reasonable expenses of the Indemnified Party, and (ii) shall not
settle or consent to the entry of any judgment in any action, suit or proceeding without the
consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or
delayed.

18.2Limitation of Liability.

18.2.1Other than the indemnity obligations set forth in Article 18.1, in no event

shall any 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 another Party under separate agreement will not be considered to
be special, indirect, incidental, or consequential damages hereunder. The Parties expressly agree

the damages that NYSEG may seek to recover pursuant to Appendix C shall not be considered

special, indirect, incidental, consequential, or punitive damages whose recovery is limited by this Article 18.2.1.

18.2.2 Nothing in this Agreement shall be construed to create or give rise to any

liability on the part of PJM, and the Parties expressly waive any claims that may arise against PJM under this Agreement.

18.2.3 The Parties acknowledge and understand that the signature of the

authorized officer of PJM on this Agreement is for the limited purpose of acknowledging that

representatives of PJM have read the terms of this Agreement. The Parties and PJM further state that they understand that FERC desires that the Parties keep PJM fully apprised of the matters addressed herein as well as any reliability and planning issues that may arise under this
Agreement, and that the signature of the PJM officer shall not in any way be deemed to imply that PJM is taking responsibility for the actions of any Party, that PJM has any affirmative duties under this Agreement or that PJM is liable in any way under this Agreement.

18.3Insurance.

NYSEG and TrAILCo shall each, at its own expense, maintain in force throughout the
period of this Agreement, and until released by the other Parties, the following minimum
insurance coverages, with insurers authorized to do business in the state of New York:

18.3.1 Employers’ Liability and Workers’ Compensation Insurance providing

statutory benefits in accordance with the laws and regulations of New York State.

18.3.2 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
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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 ($1,000,000) aggregate
combined single limit for personal injury, bodily injury, including death and property damage.

18.3.3 Comprehensive Automobile Liability Insurance for coverage of owned

and 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.

18.3.4 Excess Public Liability Insurance over and above the Employers’ 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.

18.3.5 The Commercial General Liability Insurance, Comprehensive Automobile

Insurance and Excess Public Liability Insurance policies of NYSEG and TrAILCo shall name the other Party, its parent, associated and Affiliate 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) Calendar days advance written notice to the Other Party Group prior to anniversary date of cancellation or any material change in coverage or condition.

18.3.6The 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. NYSEG and TrAILCo shall each be responsible for its respective deductibles or
retentions.

18.3.7 The Commercial General Liability Insurance, Comprehensive Automobile

Liability Insurance and Excess Public Liability Insurance policies, if written 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 NYSEG and TrAILCo.

18.3.8 The requirements contained herein as to the types and limits of all

insurance to be maintained by NYSEG and TrAILCo are not intended to and shall not in any
manner, limit or qualify the liabilities and obligations assumed by those Parties under this
Agreement.

18.3.9 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, NYSEG and TrAILCo shall provide certification of all insurance required in this Agreement, executed by each insurer or by an authorized
representative of each insurer.

18.3.10 Notwithstanding the foregoing, NYSEG and TrAILCo may each

self‐insure to meet the minimum insurance requirements of Articles 18.3.2 through 18.3.8 to the
extent it maintains a self‐insurance program; provided that, such Party’s senior debt is rated at

investment grade, or better, by Standard & Poor’s and that its self‐insurance program meets the minimum insurance requirements of Articles 18.3.2 through 18.3.8. For any period of time that a Party’s senior 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 Articles 18.3.2 through 18.3.9. In the event that a Party is permitted to self‐insure
pursuant to this Article 18.3.10, it shall notify the other Party that it meets the requirements to self‐insure and that its self‐insurance program meets the minimum insurance requirements in a manner consistent with that specified in Article 18.3.9.

18.3.11 NYSEG and TrAILCo 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 19. ASSIGNMENT

19.1Assignment.

This Agreement may be assigned by a Party only with the written consent of the other

Party; provided that a 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; provided further that a Party may assign this Agreement without the consent of the
other Party in connection with the sale, merger, restructuring, or transfer of a substantial portion
or all of its assets so long as the assignee in such a transaction directly assumes in writing all
rights, duties and obligations arising under this Agreement. Any attempted assignment that
violates this Article 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.

ARTICLE 20. SEVERABILITY

20.1Severability.

If any provision in this Agreement is finally determined to be invalid, void or

unenforceable by any court or other Governmental Authority having jurisdiction, such

determination shall not invalidate, void or make unenforceable any other provision, agreement or covenant of this Agreement.

ARTICLE 21. COMPARABILITY

21.1Comparability.

The Parties will comply with all applicable comparability and code of conduct laws, rules and regulations, as amended from time to time.

ARTICLE 22. CONFIDENTIALITY

22.1Confidentiality.

Certain information exchanged by the Parties during the term of this Agreement shall
constitute confidential information (“Confidential Information”) and shall be subject to this
Article 22.

If requested by a Party receiving information, the Party supplying the information shall
provide in writing, the basis for asserting that the information referred to in this Article warrants
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confidential treatment, and the requesting Party may disclose such writing to the appropriate

Governmental Authority. Each Party shall be responsible for the costs associated with affording confidential treatment to its information.

22.1.1Term.

During the term of this Agreement, and for a period of three (3) years after the expiration or termination of this Agreement, except as otherwise provided in this Article 22, each Party shall hold in confidence and shall not disclose to any person Confidential Information.

22.1.2Confidential Information.

The following shall constitute Confidential Information: (a) any non‐public information that is treated as confidential by the disclosing Party and which the disclosing Party identifies as Confidential Information in writing at the time, or promptly after the time, of disclosure; or (b) information designated as Confidential Information by the NYISO Code of Conduct contained in Attachment F to the NYISO OATT.

22.1.3Scope.

Confidential Information shall not include information that the receiving Party can

demonstrate: (1) is generally available to the public other than as a result of a disclosure by the
receiving Party; (2) was in the lawful possession of the receiving Party on a non‐confidential
basis before receiving it from the disclosing Party; (3) was supplied to the receiving Party
without restriction by a third party, who, to the knowledge of the receiving Party after due
inquiry, was under no obligation to the disclosing Party to keep such information confidential;

(4) was independently developed by the receiving Party without reference to Confidential

Information of the disclosing Party; (5) is, or becomes, publicly known, through no wrongful act
59

or omission of the receiving Party or Breach of this Agreement; or (6) is required in accordance
with Article 22.1.8 of this Agreement, Order of Disclosure, to be disclosed. Information
designated as Confidential Information will no longer be deemed confidential if the Party that
designated the information as confidential notifies the other Party that it no longer is
confidential.

22.1.4 Release of Confidential Information.

No Party shall release or disclose Confidential Information to any other person, except to
its Affiliates (limited by FERC Standards of Conduct requirements), subcontractors, employees,
consultants, or to parties who may be considering providing financing to or equity participation
with NYSEG, or to potential purchasers or assignees of a Party, on a need‐to‐know basis in
connection with this Agreement, unless such person has first been advised of the confidentiality
provisions of this Article 22 and has agreed to comply with such provisions. Notwithstanding
the foregoing, a Party providing Confidential Information to any person shall remain primarily
responsible for any release of Confidential Information in contravention of this Article 22.

22.1.5Rights.

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

22.1.6No Warranties.

By providing Confidential Information, no Party makes any warranties or representations
as to its accuracy or completeness. In addition, by supplying Confidential Information, no Party
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obligates itself to provide any particular information or Confidential Information to the other
Parties nor to enter into any further agreements or proceed with any other relationship or joint
venture.

22.1.7Standard of Care.

Each Party shall use at least the same standard of care to protect Confidential Information
it receives as it uses to protect its own Confidential Information from unauthorized disclosure,
publication or dissemination. Each Party may use Confidential Information solely to fulfill its
obligations to the other Party under this Agreement or its regulatory requirements, including the
NYISO OATT and NYISO Services Tariff. The NYISO shall, in all cases, treat the information
it receives in accordance with the requirements of Attachment F to the NYISO OATT.

22.1.8Order of Disclosure.

If a court or a Government Authority or entity with the right, power, and apparent

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

22.1.9Termination of Agreement.

Upon termination of this Agreement for any reason, each Party shall, within ten (10)
Calendar Days of receipt of a written request from the other Parties, use Reasonable Efforts to
destroy, erase, or delete (with such destruction, erasure, and deletion certified in writing to the
other Parties) or return to the other Parties, without retaining copies thereof, any and all written
or electronic Confidential Information received from the other Parties pursuant to this
Agreement.

22.1.10Remedies.

The Parties agree that monetary damages would be inadequate to compensate a Party for
another Party’s Breach of its obligations under this Article 22. Each Party accordingly agrees
that the other Parties shall be entitled to equitable relief, by way of injunction or otherwise, if the
first Party Breaches or threatens to Breach its obligations under this Article 22, which equitable
relief shall be granted without bond or proof of damages, and the receiving Party shall not plead
in defense that there would be an adequate remedy at law. Such remedy shall not be deemed an
exclusive remedy for the Breach of this Article 22, but shall be in addition to all other remedies
available at law or in equity. The Parties further acknowledge and agree that the covenants

contained herein are necessary for the protection of legitimate business interests and are

reasonable in scope. No Party, however, shall be liable for indirect, incidental, or consequential
or punitive damages of any nature or kind resulting from or arising in connection with this
Article 22.

22.1.11Disclosure to FERC, its Staff, or a State.

Notwithstanding anything in this Article 22 to the contrary, and pursuant to 18 C.F.R.
section 1b.20, if FERC or its staff, during the course of an investigation or otherwise, requests
information from one of the Parties that is otherwise required to be maintained in confidence
pursuant to this Agreement, or the NYISO OATT, the Party shall provide the requested
information to FERC or its staff, within the time provided for in the request for information. In
providing the information to FERC or its staff, the Party must, consistent with 18 C.F.R. section
388.112, request that the information be treated as confidential and non‐public by FERC and its
staff and that the information be withheld from public disclosure. Parties are prohibited from
notifying the other Parties to this Agreement prior to the release of the Confidential Information
to the Commission or its staff. The Party shall notify the other Parties to the Agreement when it
is notified by FERC or its staff that a request to release Confidential Information has been
received by FERC, at which time the Parties may respond before such information would be
made public, pursuant to 18 C.F.R. section 388.112. Requests from a state regulatory body
conducting a confidential investigation shall be treated in a similar manner if consistent with the
applicable state rules and regulations. A Party shall not be liable for any losses, consequential or
otherwise, resulting from that Party divulging Confidential Information pursuant to a FERC or
state regulatory body request under this paragraph.

22.1.12

Except as otherwise expressly provided herein, no Party shall disclose Confidential

Information to any person not employed or retained by the Party possessing the Confidential

Information, 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, the NYISO OATT on the NYISO Services Tariff. Prior to
any disclosures of a Party’s Confidential Information under this subparagraph, or if any third
party or Governmental Authority makes any request or demand for any of the information
described in this subparagraph, the disclosing Party 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.

ARTICLE 23. ENVIRONMENTAL RELEASES

23.1 NYSEG and TrAILCo Notice.

Subject to reporting requirements that may be imposed on NYSEG and TrAILCo under
Applicable Laws and Regulations, NYSEG and TrAILCo shall each notify the other Party, first
orally and then in writing, of the release of any Hazardous Substances, any asbestos or lead
abatement activities, or any type of remediation activities related to the Transmission Facility,
each of which may reasonably be expected to affect the other Party. Subject to reporting
requirements that may be imposed on NYSEG and TrAILCo under Applicable Laws and
Regulations, the notifying Party shall: (i) provide the notice as soon as practicable, provided
such Party makes a good faith effort to provide the notice no later than twenty‐four hours after
such Party becomes aware of the occurrence; and (ii) promptly furnish to the other Party copies

of any publicly available reports filed with any Governmental Authorities addressing such
events.

ARTICLE 24. [Reserved]

ARTICLE 25. INFORMATION ACCESS AND AUDIT RIGHTS

25.1Information Access.

Each Party (“Disclosing Party”) shall make available to another Party (“Requesting

Party”) information that is in the possession of the Disclosing Party and is necessary in order for
the Requesting Party to: (i) verify the costs incurred by the Disclosing Party for which the
Requesting Party is responsible under this Agreement; and (ii) carry out its obligations and
responsibilities under this Agreement. The Parties shall not use such information for purposes
other than those set forth in this Article 25.1 of this Agreement and to enforce their rights under
this Agreement.

25.2 Reporting of Non‐Force Majeure Events.

Each Party (the “Notifying Party”) shall notify the other Parties when the Notifying Party
becomes aware of its inability to comply with the provisions of this Agreement for a reason other
than a Force Majeure event. The Parties agree to cooperate with each other and provide
necessary information regarding such inability to comply, including the date, duration, reason for
the inability to comply, and corrective actions taken or planned to be taken with respect to such
inability to comply. Notwithstanding the foregoing, notification, cooperation or information

provided under this Article shall not entitle the Party receiving such notification to allege a cause for anticipatory breach of this Agreement.

25.3Audit Rights.

Subject to the requirements of confidentiality under Article 22 of this Agreement, each
Party shall have the right, during normal business hours, and upon prior reasonable notice to the
other Parties, to audit at its own expense the other Party’s accounts and records pertaining to the
other Party’s performance or satisfaction of its obligations under this Agreement. Such audit
rights shall include audits of the other Party’s costs, calculation of invoiced amounts, and each
Party’s actions in an Emergency or Emergency State. Any audit authorized by this Article shall
be performed at the offices where such accounts and records are maintained and shall be limited
to those portions of such accounts and records that relate to the Party’s performance and

satisfaction of obligations under this Agreement. Each Party shall keep such accounts and
records for a period equivalent to the audit rights periods described in Article 25.4 of this
Agreement.

25.4Audit Rights Periods.

25.4.1Audit Rights Period for Construction‐Related Accounts and Records.

Accounts and records related to the design, engineering, procurement, and construction of System Upgrade Facilities shall be subject to audit for a period of twenty‐four months following the Commercial Operation Date.

25.4.2 Audit Rights Period for All Other Accounts and Records.

Accounts and records related to a Party’s performance or satisfaction of its obligations
under this Agreement other than those described in Article 25.4.1 of this Agreement shall be

subject to audit as follows: (i) for an audit relating to cost obligations, the applicable audit rights period shall be twenty-four months after the auditing Party’s receipt of an invoice giving rise to such cost obligations; and (ii) for an audit relating to all other obligations, the applicable audit rights period shall be twenty‐four months after the event for which the audit is sought.

25.5Audit Results.

If an audit by a Party determines that an overpayment or an underpayment has occurred, a notice of such overpayment or underpayment shall be given to the other Party together with
those records from the audit which support such determination.

ARTICLE 26. SUBCONTRACTORS

26.1General.

Nothing in this Agreement shall prevent a Party from utilizing the services of any

subcontractor as it deems appropriate to perform its obligations under this Agreement; provided, however, that each Party shall require its subcontractors to comply with all applicable terms and conditions of this Agreement in providing such services and each Party shall remain primarily liable to the other Party for the performance of such subcontractor.

26.2 Responsibility of Principal.

5 of this Agreement. Any applicable obligation imposed by this Agreement upon the hiring Party shall be equally binding upon, and shall be construed as having application to, any subcontractor of such Party.

26.3 No Limitation by Insurance.

The obligations under this Article 26 will not be limited in any way by any limitation of subcontractor’s insurance.

ARTICLE 27. DISPUTES

27.1Submission.

In the event any Party has a dispute, or asserts a claim, that arises out of or in connection
with this Agreement or its performance (a “Dispute”), such Party shall provide the other Parties
with written notice of the Dispute (“Notice of Dispute”). Such Dispute shall be referred to a
designated senior representative of each Party for resolution on an informal basis as promptly as
practicable after receipt of the Notice of Dispute by the other Party. In the event the designated
representatives are unable to resolve the Dispute through unassisted or assisted negotiations
within thirty (30) Calendar Days of the other Parties’ receipt of the Notice of Dispute, such
Dispute may, upon mutual agreement of the Parties, be submitted to arbitration and resolved in
accordance with the arbitration procedures set forth below. In the event the Parties do not agree
to submit such Dispute to arbitration, each Party may exercise whatever rights and remedies it
may have in equity or at law consistent with the terms of this Agreement.

27.2External Arbitration Procedures.

Any arbitration initiated under this Agreement shall be conducted before a single neutral
arbitrator appointed by the Parties. If the Parties fail to agree upon a single arbitrator within ten

(10) Calendar Days of the submission of the Dispute to arbitration, each Party shall choose one
arbitrator who shall sit on a three‐member arbitration panel. In each case, the arbitrator(s) shall
be knowledgeable in electric utility matters, including electric transmission and bulk power
issues, and shall not have any current or past substantial business or financial relationships with
any party to the arbitration (except prior arbitration). The arbitrator(s) shall provide each of the
Parties an opportunity to be heard and, except as otherwise provided herein, shall conduct the
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“Arbitration Rules”) and any applicable FERC regulations or RTO rules; provided,
however, in the event of a conflict between the Arbitration Rules and the terms of this Article 27,
the terms of this Article 27 shall prevail.

27.3Arbitration Decisions.

Unless otherwise agreed by the Parties, the arbitrator(s) shall render a decision within

ninety (90) Calendar Days of appointment and shall notify the Parties in writing of such decision
and the reasons therefor. The arbitrator(s) shall be authorized only to interpret and apply the
provisions of this Agreement and shall have no power to modify or change any provision of this
Agreement in any manner. The decision of the arbitrator(s) shall be final and binding upon the
Parties, and judgment on the award may be entered in any court having jurisdiction. The
decision of the arbitrator(s) may be appealed solely on the grounds that the conduct of the
arbitrator(s), or the decision itself, violated the standards set forth in the Federal Arbitration Act
or the Administrative Dispute Resolution Act. The final decision of the arbitrator must also be
69

filed with FERC if it affects jurisdictional rates, terms and conditions of service or System Upgrade Facilities.

27.4Costs.

Each Party shall be responsible for its own costs incurred during the arbitration process
and for the following costs, if applicable: (1) the cost of the arbitrator chosen by the Party to sit
on the three member panel; or (2) one‐third the cost of the single arbitrator jointly chosen by the
Parties.

27.5Termination.

Notwithstanding the provisions of this Article 27, any Party may terminate this

Agreement in accordance with its provisions or pursuant to an action at law or equity. The issue of whether such a termination is proper shall not be considered a Dispute hereunder.

ARTICLE 28. REPRESENTATIONS, WARRANTIES AND COVENANTS

28.1General.

Each Party makes the following representations, warranties and covenants:

28.1.1Good Standing.

Such Party is duly organized, validly existing and in good standing under the laws of the
state in which it is organized, formed, or incorporated, as applicable; that it is qualified to do
business in the state or states in which the Transmission Facility and System Upgrade Facilities,
owned by such Party, as applicable, are located; and that it has the corporate power and authority
to own its properties, to carry on its business as now being conducted and to enter into this

Agreement and carry out the transactions contemplated hereby and perform and carry out all
covenants and obligations on its part to be performed under and pursuant to this Agreement.

28.1.2Authority.

Such Party has the right, power and authority to enter into this Agreement, to become a
Party hereto and to perform its obligations hereunder. This Agreement is a legal, valid and
binding obligation of such Party, enforceable against such Party in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors’ rights generally and by general equitable
principles (regardless of whether enforceability is sought in a proceeding in equity or at law).

28.1.3No Conflict.

The execution, delivery and performance of this Agreement does not violate or conflict with the organizational or formation documents, or bylaws or operating agreement, of such Party, or any judgment, license, permit, order, material agreement or instrument applicable to or binding upon such Party or any of its assets.

28.1.4Consent and Approval.

Such Party has sought or obtained, or, in accordance with this Agreement will seek or obtain, each consent, approval, authorization, order, or acceptance by any Governmental
Authority in connection with the execution, delivery and performance of this Agreement, and it will provide to any Governmental Authority notice of any actions under this Agreement that are required by Applicable Laws and Regulations.

ARTICLE 29. MISCELLANEOUS

29.1Binding Effect.

This Agreement and the rights and obligations hereof, shall be binding upon and shall inure to the benefit of the successors and permitted assigns of the Parties hereto.

29.2Conflicts.

If there is a discrepancy or conflict between or among the terms and conditions of this cover Agreement and the Appendices hereto, the terms and conditions of this cover Agreement shall be given precedence over the Appendices; provided, however that Appendix C shall control in the event of a conflict with this cover Agreement. For purposes of this Article 29.2, the term “cover Agreement” shall refer to Articles 1 through 29 of this Agreement.

29.3 Rules of Interpretation.

This Agreement, unless a clear contrary intention appears, shall be construed and

interpreted as follows: (1) the singular number includes the plural number and vice versa; (2)

reference to any person includes such person’s successors and assigns but, in the case of a Party,
only if such successors and assigns are permitted by this Agreement, and reference to a person in
a particular capacity excludes such person in any other capacity or individually; (3) reference to
any agreement (including this Agreement), document, instrument or tariff means such
agreement, document, instrument, or tariff as amended or modified and in effect from time to
time in accordance with the terms thereof and, if applicable, the terms hereof; (4) reference to
any Applicable Laws and Regulations means such Applicable Laws and Regulations as
amended, modified, codified, or reenacted, in whole or in part, and in effect from time to time,
including, if applicable, rules and regulations promulgated thereunder; (5) unless expressly stated

otherwise, reference to any Article, Section or Appendix means such Article of this Agreement
or such Appendix to this Agreement, as the case may be; (6) “hereunder”, “hereof’, “herein”,
“hereto” and words of similar import shall be deemed references to this Agreement as a whole
and not to any particular Article or other provision hereof or thereof; (7) “including” (and with
correlative meaning “include”) means including without limiting the generality of any
description preceding such term; and (8) relative to the determination of any period of time,
“from” means “from and including”, “to” means “to but excluding” and “through” means
“through and including”.

29.4Compliance.

Each Party shall perform its obligations under this Agreement in accordance with

Applicable Laws and Regulations, Applicable Reliability Standards, the NYISO OATT and Good Utility Practice. To the extent a Party is required or prevented or limited in taking any action by such regulations and standards, such Party shall not be deemed to be in Breach of this Agreement for its compliance therewith. When any Party becomes aware of such a situation, it shall notify the other Parties promptly so that the Parties can discuss the amendment to this Agreement that is appropriate under the circumstances.

29.5 Joint and Several Obligations.

Except as otherwise stated herein, the obligations of NYSEG and TrAILCo are several, and are neither joint nor joint and several.

29.6Entire Agreement.

This Agreement, including all Appendices 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 which constitute any part of the consideration for, or any condition to, either Party’s compliance with its obligations under this Agreement.

29.7 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 permitted their assigns.

29.8Waiver.

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 any

29.9Headings.

The descriptive headings of the various Articles of this Agreement have been inserted for convenience of reference only and are of no significance in the interpretation or construction of this Agreement.

29.10 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.

29.11 Amendment.

The Parties may by mutual agreement amend this Agreement, by a written instrument duly executed by all three of the Parties.

29.12 Modification by the Parties.

The Parties may by mutual agreement amend the Appendices to this Agreement, by a
written instrument duly executed by all three of the Parties. Such an amendment shall become
effective and a part of this Agreement upon satisfaction of all Applicable Laws and Regulations.

29.13 Reservation of Rights.

TrAILCo, NYISO and NYSEG each shall have the right to make unilateral filings with FERC to modify this Agreement with respect to any rates, terms and conditions, charges,
classifications of service, rule or regulation under section 205 or any other applicable provision of the Federal Power Act and FERC’s rules and regulations thereunder; provided that each Party shall have the right to protest any such filing by another Party and to participate fully in any
proceeding before FERC in which such modifications may be considered. Nothing in this
Agreement shall limit the rights of the Parties or of FERC under sections 205 or 206 of the
Federal Power Act and FERC’s rules and regulations thereunder, except to the extent that the
Parties otherwise mutually agree as provided herein.

29.14 No Partnership.

This Agreement shall not be interpreted or construed to create an association, joint

venture, agency relationship, or partnership among the Parties or to impose any partnership

obligation or partnership liability upon any Party. No 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, any other Party.

29.15 Other Transmission Rights.

Notwithstanding any other provision of this Agreement, nothing herein shall be construed as relinquishing or foreclosing any rights, including but not limited to firm transmission rights, capacity rights, or transmission congestion rights that either Party shall be entitled to, now or in the future under any other agreement or tariff as a result of, or otherwise associated with, the transmission capacity, if any, created by the System Upgrade Facilities.

29.16 Service Agreement.

Upon the date this Agreement becomes effective in accordance with Article 2.1 of this Agreement, the Services Agreement between NYSEG and FirstEnergy Service Company
(“FSC”), dated March 18, 2015 (the “Services Agreement”), shall be deemed superseded and NYSEG and FSC shall take all steps necessary to cancel the Services Agreement as a filed rate schedule at FERC. As a condition to the effectiveness of this Agreement, NYSEG and FSC shall execute a letter agreement, which shall be dated as of the Effective Date, confirming that the Services Agreement is superseded upon the effectiveness of this Agreement.

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.

New York State Electric & GasTrans-Allegheny Interstate Line Company

Corporation

By:By:

Title:Title:

Date:Date:

NYSEG Control
By:

New York Independent System Operator,
Inc.

By:

Title:

Date:

The signature below of the authorized officer of PJM Interconnection, L.L.C. is for the limited purpose of acknowledging that a representative officer of PJM has read this Agreement as of the 6th day of August, 2015.

PJM Interconnection, L.L.C.

By:

(Signature)

Name:

(Print)

Title:

APPENDIX A - ATTACHMENT FACILITIES AND SYSTEM UPGRADE FACILITIES

1.Attachment Facilities:

None.

2.System Upgrade Facilities:

(a)Stand Alone System Upgrade Facilities

A new 345/115 kV substation at the Point of Interconnection (“POI”), named Mainesburg
Substation, will be constructed and owned by TrAILCo adjacent to NYSEG’s 345 kV
transmission line between Homer City and Watercure Road substations (i.e., the
Watercure Line) at a point approximately 25.2 line miles south of Watercure Road
substation. Mainesburg Substation will include the following major equipment:

•2 - 345 kV dead-end (pull-off) structures;

•2 - 115 kV dead-end (pull-off) structures;

•3 - 345 kV, 3000 A wave traps;

•3 - 115 kV, 1200 A wave traps;

•15 - 345 kV arrestors;

•9 - 115 kV arrestors;

•6 - line tuners;

•10 - 362 kV, 3000 A, double side break manually operated disconnect switch;

•1 - 362 kV, 3000 A, double side break motor operated disconnect switch;

•7 - 145 kV, 2000A, V-type manually operated disconnect switch;

•1 - 145 kV, 3000 A, V-type motor operated disconnect switch;

•4 - 380 kV, 3000 A, 63 kA SF6 breakers;

•2 - 362 kV, 3000 A, 63 kA SF6 breakers with synchronous switching controller;

•3 - 145 kV, 3000 A, 40 kA SF6 breakers;

•1 - 345/115 kV 200/266/333 MVA autotransformer;

•6 - 345 kV coupling capacitor voltage transformers (“CCVT”);

•6 - 345 kV voltage transformers;

•9 - 115 kV CCVTs;

•345 kV bus work;

•115 kV bus work;

•345 kV structures;

•115 kV structures;

•2 - 95.33 MVAR 362 kV nameplate (86.6 MVAR 345 kV effective) shunt capacitor

banks;

•Grounding materials;

•Conduit and cable trench;

•Control cabling;

•Control building with panels for control metering, primary and backup protection,

power line carrier systems, and communication; • 1 - Station battery (125 V DC) with rack;

•1 - Station battery charger;

• AC Station Service Panels;

• DC panels;

• 1 - 66.395 kV-120/240 V station service transformer;

• Back-up station service transformer;

• Fencing;

(b)System Upgrade Facilities

All work to be performed by Pennsylvania Electric Company (“Penelec”) as described
below in this section (b) shall be performed pursuant to an Amended and Restated
Engineering and Construction Services Agreement between Penelec and TrAILCo dated
August 6, 2015.

(1)Line Loop System Upgrade Facilities from the Everts Drive -

Mansfield 115 kV Line

The 115 kV transmission line work at Mainesburg Substation shall include the poles, insulators, and related equipment necessary to route Penelec’s Everts Drive - Mansfield 115 kV line into the Mainesburg Substation. Penelec will complete this work at TrAILCo’s cost and expense. These System Upgrade Facilities shall be owned, operated and maintained by Penelec.

(2)Protection System Upgrade Facilities - Homer City 345 kV

Remote End

Due to the segmentation of the Watercure Line with the addition of the

Mainesburg Substation, dual-primary relaying will be installed at Homer City Substation. This work will be accomplished by replacing the existing backup relay with a new relay, installing a second pilot channel, and by upgrading the existing power line carrier equipment. Penelec will complete this work at
TrAILCo’s cost and expense pursuant to an appropriate agreement between NYSEG and Penelec. These System Upgrade Facilities will be jointly owned, operated and maintained by NYSEG and Penelec.

(3)Protection System Upgrade Facilities - Everts Drive 115 kV Remote

End

Due to the segmentation of Penelec’s Everts Drive - Mansfield 115 kV

transmission line with the addition of the Mainesburg Substation, relay settings at Everts Drive Substation will need to be adjusted to accommodate the new
Mainesburg Substation. Penelec will complete this work at TrAILCo’s cost and expense, and will own these protection System Upgrade Facilities.

(4) Protection SUF - Mansfield 115 kV Remote End

Due to the segmentation of Penelec’s Everts Drive - Mansfield 115 kV

transmission line with the addition of the Mainesburg Substation, relay settings at Mansfield Substation will need to be adjusted to accommodate the new

Mainesburg Substation. Penelec will complete this work at TrAILCo’s cost and expense, and will own these protection SUF.

(5)345 kV Line Loop

TrAILCo, on behalf of NYSEG, will engineer, design, procure all materials, and
construct the Homer City - Watercure Road 345 kV line modifications at the
Mainesburg Substation POI. TrAILCo will perform this System Upgrade
Facilities work, at TrAILCo’s cost and expense, through its affiliate, Penelec, who
will act as TrAILCo’s subcontractor pursuant to Article 26. This would include
obtaining any rights or way agreements, permits, and/or certifications required to
modify the line. This would also include all equipment for the 345 kV line taps
(line structures, conductor, insulators, and terminations on dead-end structures,
etc.). All work will be performed using NYSEG standards. The new line loop will
be owned and operated by NYSEG. TrAILCo will pay for the cost of NYSEG to
review and accept the engineering, design, procurement of materials, provide
standards, and attend meetings and site visits as needed. The loop is necessary to
support TrAILCo’s construction of the Mainesburg Substation. The scope of work
for the line loop is as follows:

• Install two wood H-frames(#B-343-2 and#B-344-2) outside of Mainesburg

substation.

• Install 8 steel poles (two 3-pole structures #B-343 and #B-344 and two monopoles
#B-343-1 and #B-344-1). Install all anchors guys and span guys.

• Transfer existing conductors and shield wires from existing B-343 H-frame to the
south side of new B-343 3-pole structure. Transfer existing conductor and shield
wires frame existing B-343 H-frame to the north side of new B-344 3-pole structure.
Resag and clip wires.

• Remove excess wire from the north side of B-343 and the south side of B-344.

• Remove two existing H-frames (B-343 and B-344).

• Install new conductors (2156 ACSR) and shield wires (7/16” EHS steel) from 3-pole
structures to each monopole, through the new wood H-frames, and into Mainesburg
substation.

(6)Watercure Road Relay Upgrades

The following System Upgrade Facilities shall be completed by NYSEG at TrAILCo’s cost and expense, and will be owned by NYSEG.

Phase 1

• Remove 100W PLC amplifiers on 30 line

• Attend Siemens 7SA training (3 days)

• Review Proposed Mainesburg settings

• Issue new Watercure Road 30 Line Terminal Settings

• Update Aspen and Relay databases

• Update Watercure Road operating instructions

• Install new settings

• Perform PLC level checks

• Perform End to End Tests

Phase 2

The Phase 2 protection scheme will establish a second pilot channel between

Mainesburg and Watercure Road substations. All costs associated with the Phase

2 protection scheme will be the responsibility of TrAILCo. TrAILCo will be

responsible for the engineering, design, and procurement of phase 2 project and
construction in the TrAILCo facilities. NYSEG will be responsible for the
engineering, design review and the construction in NYSEG facilities. NYSEG and
TrAILCo will work together to determine the most viable communications
requirements. The preliminary scope of work for the Phase 2 protection scheme is
as follows:

• Install a SEL-2506 fiber optic transceiver at Watercure Road adjacent to existing
Siemens 7SA relay (to convert the 7SA I/O contacts to a MB signal over fiber).

• Watercure Road MB signal to be routed via 2815 transceiver to a new JUMX at
Watercure Road then, via a new 6 mile ADSS SM fiber run, to 14th Street substation.

• At 14th Street substation, install a new JUMX to connect to the new T1 circuit from
Mainesburg substation (ordered by FE) via a Positron shelf (Positron needs to be
confirmed).

The above scope of work for Phase 2 is subject to modification based on a number of factors, including further engineering review.

3. Cost Estimates:

a. System Upgrade Facilities

(1) Mainesburg Substation

The estimated cost for engineering, procuring materials, and constructing Mainesburg Substation is $22,283,600.

(2) Line Loop System Upgrade Facilities from the Everts Drive - Mansfield 115
kV Line

The estimated cost for engineering, procuring materials, and constructing the 115 kV line loop is $541,400.

(3) Protection System Upgrade Facilities - Homer City 345 kV Remote End

The estimated cost for engineering, procuring materials, and constructing the relay upgrades at Homer City substation is $333,200.

(4) Protection System Upgrade Facilities - Everts Drive 115 kV Remote End

The estimated cost for engineering and implementing the relay setting changes at Everts Drive Substation is $46,100.

(5) Protection System Upgrade Facilities - Mansfield 115 kV Remote End

The estimated cost for engineering and implementing the relay setting changes at Mansfield Substation is $81,300.

(6) 345 kV Line Loop

The estimated cost for TrAILCo, on behalf of NYSEG, to engineer, procure

materials, and construct the 345 kV line loop is $3,055,000. The estimated cost for
NYSEG work associated with the 345 kV transmission line loop work is $50,000.

(7) Watercure Road Relay Upgrades

The estimate cost for engineering, procuring materials, and constructing the Phase 1 relay upgrades at Watercure Road substation is $101,200. The estimate cost for engineering, procuring materials, and constructing the Phase 2 relay upgrades at Watercure Road substation is $750,000.

5.Design Standard

The System Upgrade Facilities and related facilities to be constructed by TrAILCo (or by

Penelec on behalf of TrAILCo), with the exception of the 345 kV Line Loop work, will

be designed to meet the following requirements:

•FirstEnergy Transmission Planning Criteria

•FirstEnergy Requirements for Transmission Connected Facilities

•FirstEnergy Transmission System Protection Practices

•FirstEnergy Substation Design Standards Manual

•Power Circuit Breakers 23 kV through 500 kV (“FE-BKR-1”)

•Open Rack Power Capacitors (“FE-CAP-1”)

•Liquid Immersed Substation Power & GSU Transformers (“FE-TR-1”)

APPENDIX B - MILESTONES

In accordance with Article 5.1 of this Agreement, the following milestone dates shall apply to the designated performance:

1. Outage Start Date - the date that the Watercure Line outage commences which shall
be no less than fourteen (14) days from the date TrAILCo’s receives NYSEG’s
construction authorization pursuant to Section 5.3.3 of this Agreement.

2. Initial Energization Date - that date which is thirty (30) days from the Outage Start
Date.

3. Trial Period - shall be defined as the ten (10) day period from the Initial Energization
Date needed for commissioning and testing.

4. Commercial Operation Date - shall be defined as that date which is ten (10) days
after the Initial Energization Date

Additionally, the following milestone completion dates shall apply to the designated Stand Alone System Upgrade Facilities described in Appendix A:

APPENDIX C - INTERCONNECTION AND CONSTRUCTION PROVISIONS

A.Interconnection Description

The Mainesburg 345/115 kV project is a new 345 to 115 kV substation in the northeast region of
the Penelec service territory. The Project is a mandatory PJM Interconnection, L.L.C. (“PJM”)
baseline Regional Transmission Expansion Plan (“RTEP”) upgrade that was presented at the
September 7, 2011 PJM Transmission Expansion Advisory Committee (“TEAC”) meeting and
was assigned baseline RTEP upgrade ID b1608. Baseline upgrade ID b1608 includes the
construction of Mainesburg 345/115 kV substation connecting to the Homer City - Watercure
Road 345 kV and Everts Drive - Mansfield 115 kV line. PJM also identified the need to install
two (2) 345 kV capacitors at Mainesburg substation at the November 3, 2011 TEAC meeting and
assigned baseline RTEP upgrade ID b1802. The Project loops the Homer City - Watercure Road
345 kV line and the Everts Drive - Mansfield portion of the East Towanda - Farmers Valley 115
kV line into Mainesburg substation which consists of a 345/115 kV transformer and ring bus on
the 115 kV and 345 kV. The project will connect to the NYISO system on the NYSEG Homer
City - Watercure Road 345 kV line approximately 151.8 miles from Homer City substation and
approximately 25.2 miles from NYSEG’s Watercure Road substation. The point of change of
ownership and point of interconnection (as set forth in Figure 1 of Appendix A) is where the
NYSEG owned transmission line attaches to the TrAILCo owned Mainesburg substation dead-
end structure. The project will connect to the Penelec system on the Penelec Everts Drive -
Mansfield 115 kV line approximately 8.5 miles from Everts Drive substation and 5.6 miles from
Mansfield substation.

B.Interconnection Provisions

The following are additional interconnection provisions to which the Parties agree to be bound:

1. By June 1, 2016, TrAILCo shall install, at TrAILCo’s cost and expense, the

following NYISO-approved metering transformers: revenue quality PTs (.3% accuracy) to replace the current CCVTs. Said NYISO-approved metering transformers shall be owned by TrAILCo;

2. TrAILCo, at its cost and expense, shall install a GE D20MX RTU (“FE RTU”) at

the Mainesburg Substation. TrAILCo shall utilize the FE RTU to send metering
data (volts, amps, watts, vars and revenue MWh) and breaker status directly to the
NYSEG Energy Control Center. The data provided to NYSEG via the FE RTU
will be in a DNP3 protocol stream, through a 4wire audio tone, Bell 202T leased
line equivalent connection to JMUX equipment. The communication median will
be a leased T1 phone circuit from Mainesburg Substation to the NYSEG Energy
Control Center. The RTU shall be owned and operated by TrAILCo at its cost

and expense;

It is anticipated that the leased T1 phone circuit may not be available at the

Commercial Operation Date. Therefore, at the time of the Commercial Operation

Date, the data provided to NYSEG via the FE RTU, as described in the paragraph above, will be through a temporary solution consisting of a combination of
cellular modem and 4 Wire/Telco technologies, the specifics of which are to be agreed upon by NYSEG and TrAILCo;

3. Prior to Commercial Operation Date of the Mainesburg Substation, TrAILCo

shall, at its own cost and expense, establish dial-up access to all 345 kV revenue metering at Mainesburg Substation for data collection via NYSEG’s MV-90 data collection system;

4. NYISO shall, at TrAILCo’s cost and expense, provide to TrAILCo a RFL 9800

series shelf, 98 TMX cards and telemetry circuits (“NYISO Telemetry

Equipment”). The NYISO Telemetry Equipment shall be installed by TrAILCo in
existing racks at the Mainesburg Subtation. TrAILCo shall utilize the NYISO
Telemetry Equipment to provide the NYISO data in accordance with NYISO
requirements. The NYISO Telemetry Equipment will receive values from meters
at the Mainesburg Substation and create an analog signal. The NYISO Telemetry
Equipment shall be operated and maintained at TrAILCo’s cost and expense.

C.Construction Provisions

The following are additional construction provisions to which the Parties agree to be bound:

1. TrAILCo and NYSEG each have obligations under this Agreement to construct

and/or install System Upgrade Facilities. The Scope of Work for TrAILCo’s

construction and installation of System Upgrade Facilities is set forth in sections
2(a), 2(b)(1), 2(b)(2), 2(b)(3), 2(b)(4) and Phase 2 of 2(b)(6) of Appendix A. The
Scope of Work for NYSEG’s construction and installation of System Upgrade
Facilities is set forth in section 2(b)(5) and Phase 1 of section 2(b)(6) of
Appendix A. NYSEG has delegated to TrAILCo the obligation to undertake and
complete, at TrAILCo’s cost and expense, the NYSEG Scope of Work described
in section 2(b)(5) of Appendix A. For clarity, the Scope of Work described in
Phase 1 of section 2(b)(6) of Appendix A shall be performed at TrAILCo’s cost
and expense.

2. TrAILCo shall use best efforts to complete the scope of work described in section

2(b)(5) of Appendix A (the “TrAILCo Scope of Work”) during the period (the

“Work Period”) between the commencement of the scheduled outage of

Watercure Line and the Commercial Operation Date of the Transmission Facility,
which Work Period shall be forty (40) days in duration. TrAILCo acknowledges
that TIME IS OF THE ESSENCE to complete the TrAILCo Scope of Work
during the Work Period. It is acknowledged that TrAILCo’s inability to complete
all of the work set forth in the TrAILCo Scope of Work within the Work Period
may cause NYSEG to incur economic damages and losses. If the work required
by the TrAILCo Scope of Work is not completed by the expiration of the Work
Period and NYSEG has suffered economic damages or losses as a result, then

NYSEG shall provide a written notice and an invoice to TrAILCo that provides
reasonable detail as to the cause and extent of the damages and or losses and the
amount due from TrAILCo to NYSEG. Subject to TrAILCo’s rights under this
Section 2, TrAILCo shall pay the amount due within five (5) days of the date of
the invoice. TrAILCo’s obligation to pay the amount invoiced pursuant to this
provision shall be absolute and unconditional and without counterclaim or set-off
except in the event the TrAILCo Scope of Work is not complete by the expiration
of the Work Period because of an act or omission of NYSEG, an act or omission
of a third-party not under contract with or control of TrAILCo or any affiliate of
TrAILCo for purposes of the TrAILCo Scope of Work, an act or omission of the
PJM Interconnection, L.L.C. (“PJM”) and/or the New York Independent System
Operator, Inc. (“NYISO”), or an event beyond the reasonable control of TrAILCo
(e.g., force majeure).

3. NYSEG, at TrAILCo’s expense, shall provide commercially reasonable

cooperation and communication to TrAILCo and shall provide all reasonably

requested documents, information, consents, and access to facilities and property to permit TrAILCo to undertake and complete the TrAILCo Scope of Work
during the Work Period.

4. NYSEG’s agreement to permit TrAILCo to undertake the TrAILCo Scope of

Work is conditioned upon TrAILCo delivering to NYSEG, before the initiation of
the Work Period, of a surety bond (the “Surety Bond”) in the amount of FIVE
MILLION DOLLARS ($5,000,000) in favor of NYSEG issued by a provider
reasonably acceptable to TrAILCo and NYSEG (the “SB Provider”) and in form
and substance reasonably acceptable to NYSEG, pursuant to which SB Provider
guarantees the performance and financial obligations of TrAILCo pursuant to
Sections 2(b)(5) and 2(b)(6) of Appendix A and the performance and financial
obligations of TrAILCo pursuant to sections C(2), C(10) and C(11) of this
Appendix C.

5. The Parties acknowledge and understand that the compliance dates and time

periods set forth in Sections B(1), B(2) and B(3) of this Appendix C are subject to modifications due to: (a) outage scheduling procedures and restrictions; (b) acts or directives of PJM and/or NYISO; and (c) the finalization of applicable design and engineering specifications for equipment and facilities to be provided or
installed pursuant to this Agreement.

6. TrAILCo shall undertake the TrAILCo Scope of Work at its cost and expense,

and consistent with this Agreement and Good Utility Practice. The ownership of equipment and facilities installed by TrAILCo in connection with the Scope of Work shall be set forth in this Agreement.

7. NYSEG may monitor and inspect TrAILCo’s performance of the TrAILCo Scope

of Work. TrAILCo shall maintain adequate communication and coordination
between TrAILCo and NYSEG during the Work Period, and TrAILCo shall

notify NYSEG of the commencement of the TrAILCo Scope of Work and the

completion of the TrAILCo Scope of Work. For purposes of the performance of the TrAILCo Scope of Work, each Party hereby designates the following point of contact for purposes of communication during the Work Period:

For TrAILCo:Michael W. Hughes

c/o FirstEnergy Service Company 2800 Pottsville Pike

Reading, PA 19612
Office: 610-921-6587
Cell: 484-269-4903

Email: mhughes@firstenergycorp.com

For NYSEG:Raymond P. Kinney

Director - Transmission, Energy Services

New York State Electric & Gas Corporation

18 Link Drive
P.O. Box 5224

Binghamton, NY 13902-5224 Office: 607-762-4321

Cell: 607-725-7166

Email: rpkinney@nyseg.com

8. The energization of the Mainesburg Substation shall occur in accordance with the

testing and commissioning plan to be provided by TrAILCo to NYSEG, which testing and commissioning plan shall be subject to NYSEG’s reasonable
satisfaction. The Commercial Operation Date of the Mainesburg Substation shall occur only after this Agreement is deemed effective by FERC. TrAILCo shall procure and maintain insurance coverage, for itself and its subcontractors, in
accordance with the requirements set forth in Article 18 of this Agreement hereto, and incorporated herein by this reference.

9. Any Party shall report to the other Party verbally and 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.

10. TrAILCo will indemnify, defend at its expense and hold harmless NYSEG and its

Affiliates, and each of their directors, officers, employees, and agents (the

“Indemnitee”) from and against any and all liabilities, claims, demands, suits,

losses, costs, fees, damages or expenses (together, “Losses”) it may suffer, or for
which it may be held liable including, without limitation, reasonable expenses and
attorneys fees incurred in the connection therewith, by reason of: (a) any
work-related accident or injury affecting an employee, agent or subcontractor of
TrAILCo, arising in connection with work performed under the TrAILCo Scope

of Work; (b) any claim by an agency or instrumentality of the federal, state or any
local government, or by an employee, agent or subcontractor of TrAILCo alleging
that the Indemnitee is liable to any party, for any reason, due to TrAILCo’s
negligent performance of the work required by the TrAILCo Scope of Work or
omissions by an employee, agent or subcontractor of TrAILCo; (c) bodily injury,
including death, to any person or persons due to the actions or omissions of
TrAILCo or its agents or subcontractors; (d) damage to or destruction of any
property, including loss of use thereof, due to the actions or omissions of
TrAILCo, or its agents or subcontractors; provided, however, TrAILCo shall not
be required to indemnify, hold harmless and defend the Indemnitee to the extent
Losses related to matters described in sections (a), (b), (c) and (d) above arise
from the Indemnitee’s negligence or willful misconduct. Individual employees,
agents and subcontractors of TrAILCo who are performing work pursuant to the
TrAILCo Scope of Work shall be considered to be employees, agents or
subcontractors of TrAILCo for all purposes under this Agreement,
notwithstanding any judicial or administrative determination that such employees,
agents or subcontractors of the other party should be regarded as employees under
applicable law. All actions of the employees, agents and subcontractors of
TrAILCo under this Agreement shall be deemed to be actions of TrAILCo under
this Agreement. This provision shall continue and survive any expiration or
termination of this Agreement and completion of the TrAILCo Scope of Work.

11. Return of NYSEG Facilities to Status Quo Ante. It is the express intention of the

Parties that in the absence of the Mainesburg Substation, the Watercure Line and
appurtenant facilities should be restored to their prior electrical configuration.
Therefore, if the Mainesburg Substation is not in commercial operation by the
expiration of the Work Period, or if after the attempted commercial operation of
the Mainesburg Substation it becomes evident in the reasonable determination of
NYSEG, upon consultation with the NYISO, TrAILCo and PJM, that the

Mainesburg Substation will not be successfully placed in commercial operation,
then TrAILCo shall take the steps necessary to return, as soon as practicable, all
NYSEG facilities to the electrical configuration and status of such facilities prior
to the commencement of the TrAILCo Scope of Work by TrAILCo pursuant to
this Agreement; provided, however, that if the Mainesburg Substation can be
commissioned and placed in commercial operation within a reasonably short
period of time following the expiration of the Work Period, then the Parties shall
work together to accomplish such commercial operation and TrAILCo shall have
no restoration obligations, but TrAILCo shall continue to have the payment
obligations pursuant to Section C(2) above, subject to the provisions of Section
C(2) above. Such work to restore the NYSEG facilities shall be done at the cost
and expense of TrAILCo and with NYSEG’s cooperation and coordination (and
with the coordination with PJM and NYISO), and shall be completed as soon as is
practicable.

APPENDIX D - SECURITY ARRANGEMENTS DETAILS

Infrastructure security of New York State Transmission System and PJM Transmission System equipment and operations and control hardware and software is essential to ensure
day‐to‐day New York State Transmission System and PJM Transmission System reliability and operational security. The Commission will expect PJM, the NYISO, all Transmission Owners (including NYSEG and TrAILCo), and all other Market Participants to comply with the
recommendations offered by the President’s Critical Infrastructure Protection Board and,
eventually, best practice recommendations from the electric reliability authority. All public utilities will be expected to meet basic standards for system infrastructure and operational
security, including physical, operational, and cyber‐security practices.

APPENDIX E - ADDRESSES FOR DELIVERY OF NOTICES AND BILLINGS

Notices:

TrAILCo:

FirstEnergy Service Company

Attn: Manager: FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: mthorn@firstenergycorp.com

NYSEG:

New York State Electric & Gas Corporation

Attn: Transmission Services - Manager Programs/Projects PO Box 5224

Binghamton, New York 13902-5224 Phone: (607) 762-8073

Fax: (607) 762-8666

NYISO:

Before commercial operation of the Transmission Facility:

New York Independent System Operator, Inc.

Attn: Vice President, System and Resource Planning

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

After commercial operation of the Transmission Facility:

New York Independent System Operator, Inc. Attn: Vice President, Operations

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

Billings and Payments:

TrAILCo:

FirstEnergy Service Company

Attn: Manager: FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: mthorn@firstenergycorp.com

NYSEG:

New York State Electric & Gas Corporation

Attn: Energy Services - Manager, Billing & Risk Management PO Box 5224

Binghamton, New York 13902-5224

ALTERNATIVE FORMS OF DELIVERY OF NOTICES (TELEPHONE, FACSIMILE OR EMAIL):

TrAILCo:

FirstEnergy Service Company

Attn: Manager: FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: mthorn@firstenergycorp.com Phone: (330) 384-3889

FirstEnergy Service Company

Attn: Attorney for FERC & Wholesale Connection Support FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: pnrao@firstenergycorp.com Phone: (330) 384-2422

NYSEG:

New York State Electric & Gas Corporation

Attn: Transmission Services - Manager Programs/Projects PO Box 5224

Binghamton, New York 13902-5224 Phone: (607) 762-8073

Fax: (607) 762-8666

NYISO:

Before commercial operation of the Transmission Facility:

New York Independent System Operator, Inc.

Attn: Vice President, System and Resource Planning

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

After commercial operation of the Transmission Facility:

New York Independent System Operator, Inc. Attn: Vice President, Operations

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

Service Agreement No. 2232

Appendix 6 - STANDARD LARGE GENERATORTRANSMISSION FACILITY
INTERCONNECTION AGREEMENT

(Applicable to Generating Facilities that exceed 20 MW)

by and among the

NEW YORK INDEPENDENT SYSTEM OPERATOR, INC.,
NEW YORK STATE ELECTRIC & GAS CORPORATION,
and

TRANS-ALLEGHENY INTERSTATE LINE COMPANY

Dated as of August 6, 2015

TABLE OF CONTENTS

Page Number

ARTICLE 1. DEFINITIONS....................................................12

ARTICLE 2. EFFECTIVE DATE, TERM AND TERMINATION.....................107

2.1Effective Date.................................................10

2.2Term of Agreement.............................................10

2.3Termination...................................................11

2.4Termination Costs..............................................11

2.5Disconnection.................................................12

2.6Survival......................................................12

ARTICLE 3. REGULATORY FILINGS.........................................1210

3.1Filing........................................................12

ARTICLE 4. SCOPE OF INTERCONNECTION SERVICE.........................1310

4.1Provision of Service............................................13

4.2No Transmission Delivery Service.................................13

4.3No Other Services..............................................13

ARTICLE 5. INTERCONNECTION FACILITIES ENGINEERING, PROCUREMENT,

AND CONSTRUCTION 13 SYSTEM UPGRADE FACILITIES

ENGINEERING, PROCUREMENT, AND CONSTRUCTION..............11

5.1Options......................................................13

5.2General Conditions Applicable to Option to Build.....................15

5.3Liquidated Damages............................................16

5.4Power System Stabilizers........................................17

5.5Equipment Procurement.........................................18

5.6Construction Commencement.....................................18

5.7Work Progress.................................................19

5.8Information Exchange...........................................19

5.9Limited Operation..............................................19

5.10Developer’s Attachment Facilities (“DAF”)..........................19

5.11Connecting Transmission Owner’s Attachment Facilities Construction....20

5.12Access Rights.................................................21

5.13Lands of Other Property Owners..................................21

5.14Permits......................................................21

5.15Early Construction of Base Case Facilities...........................21

5.16Suspension...................................................22

5.17Taxes........................................................22

5.18Tax Status; Non-Jurisdictional Entities..............................27

5.19Modification..................................................27

ARTICLE 6. TESTING AND INSPECTION....................................2928

6.1Pre-Commercial Operation Date Testing and Modifications.............28

6.2Post-Commercial Operation Date Testing and Modifications............29

6.3Right to Observe Testing........................................29

6.4 Right to Inspect............................................................29

ARTICLE 7. METERING …………………………………………………………………. 2931

7.1General......................................................29

7.2Check Meters.................................................30

7.3Standards.....................................................30

7.4Testing of Metering Equipment...................................30

7.5Metering Data.................................................31

ARTICLE 8. COMMUNICATIONS 31............................................33

8.1Developer Obligations..........................................31

8.2Remote Terminal Unit..........................................31

8.3No Annexation................................................32

ARTICLE 9. OPERATIONS..................................................3234

9.1General......................................................32

9.2NYISO and Connecting Transmission Owner Obligations..............32

9.3Developer Obligations..........................................32

9.4Start-Up and Synchronization.....................................32

9.5Real and Reactive Power Control..................................33

9.6Outages and Interruptions........................................34

9.7Switching and Tagging Rules.....................................37

9.8Use of Attachment Facilities by Third Parties........................37

9.9Disturbance Analysis Data Exchange...............................38

ARTICLE 10. MAINTENANCE 38..............................................42

10.1Connecting Transmission Owner Obligations........................38

10.2Developer Obligations..........................................38

10.3Coordination..................................................38

10.4Secondary Systems.............................................38

10.5Operating and Maintenance Expenses..............................39

ARTICLE 11. PERFORMANCE OBLIGATION 39..................................44

11.1Developer Attachment Facilities...................................39

11.2Connecting Transmission Owner’s Attachment Facilities...............39

11.3System Upgrade Facilities and System Deliverability Upgrades..........39

11.4Special Provisions for Affected Systems............................39

11.5Provision of Security............................................39

11.6Developer Compensation for Emergency Services....................40

11.7Line Outage Costs..............................................40

ARTICLE 12. INVOICE.....................................................4044

12.1General......................................................40

12.2Final Invoice..................................................41

12.3Payment......................................................41

12.4Disputes......................................................41

ARTICLE 13. EMERGENCIES................................................4145

13.1Obligations...................................................41

13.2Notice.......................................................42

13.3Immediate Action..............................................42

13.4NYISO and Connecting Transmission Owner Authority................42

13.5Developer Authority............................................43

13.6Limited Liability...............................................43

ARTICLE 14. REGULATORY REQUIREMENTS AND GOVERNING LAW 43.........47

14.1Regulatory Requirements........................................43

14.2Governing Law................................................44

ARTICLE 15. NOTICES.....................................................4448

15.1General......................................................44

15.2Billings and Payments...........................................44

15.3Alternative Forms of Notice......................................44

15.4Operations and Maintenance Notice................................44

ARTICLE 16. FORCE MAJEURE 45.............................................49

16.1Force Majeure.................................................45

ARTICLE 17. DEFAULT....................................................4550

17.1Default.......................................................45

ARTICLE 18. INDEMNITY, CONSEQUENTIAL DAMAGES AND INSURANCE 46

INDEMNITY, LIMITATION OF LIABILITY, AND INSURANCE........51

18.1Indemnity....................................................46

18.2No Consequential Damages......................................47

18.3Insurance.....................................................47

ARTICLE 19. ASSIGNMENT.................................................4957

19.1Assignment....................................................49

ARTICLE 20. SEVERABILITY...............................................5058

20.1Severability...................................................50

ARTICLE 21. COMPARABILITY.............................................5058

21.1Comparability.................................................50

ARTICLE 22. CONFIDENTIALITY............................................5058

22.1Confidentiality................................................50

ARTICLE 23. ENVIRONMENTAL RELEASES..................................5364

23.1Developer and Connecting Transmission Owner Notice................53

ARTICLE 24. [RESERVED]INFORMATION REQUIREMENT.....................5465

24.1Information Acquisition.........................................54

iii

24.2Information Submission by Connecting Transmission Owner............54

24.3Updated Information Submission by Developer.......................54

24.4Information Supplementation.....................................55

ARTICLE 25. INFORMATION ACCESS AND AUDIT RIGHTS....................5565

25.1Information Access.............................................55

25.2Reporting of Non-Force Majeure Events............................56

25.3Audit Rights..................................................56

25.4Audit Rights Periods............................................56

25.5Audit Results..................................................57

ARTICLE 26. SUBCONTRACTORS...........................................5768

26.1 General. 57

26.2Responsibility of Principal.......................................57

26.3No Limitation by Insurance......................................57

ARTICLE 27. DISPUTES …………………………………………………………………5768

27.1Submission...................................................57

27.2External Arbitration Procedures...................................58

27.3Arbitration Decisions...........................................58

27.4Costs........................................................58

27.5Termination...................................................58

ARTICLE 28. REPRESENTATIONS, WARRANTIES AND COVENANTS 58...........70

28.1General......................................................58

ARTICLE 29. MISCELLANEOUS 59............................................72

29.1Binding Effect.................................................59

29.2Conflicts.....................................................59

29.3Rules of Interpretation..........................................60

29.4Compliance...................................................60

29.5Joint and Several Obligations.....................................60

29.6Entire Agreement..............................................60

29.7No Third Party Beneficiaries.....................................61

29.8Waiver.......................................................61

29.9Headings.....................................................61

29.10Multiple Counterparts...........................................61

29.11Amendment...................................................61

29.12Modification by the Parties.......................................61

29.13Reservation of Rights...........................................62

29.14No Partnership.................................................62

29.15Other Transmission Rights.......................................62

APPENDIX A - ATTACHMENT FACILITIES AND SYSTEM UPGRADE FACILITIES...78

AppendicesAPPENDIX B - MILESTONES........................................84

APPENDIX C - INTERCONNECTION AND CONSTRUCTION PROVISIONS..........85

APPENDIX D - SECURITY ARRANGEMENTS DETAILS..........................90

APPENDIX E - ADDRESSES FOR DELIVERY OF NOTICES AND BILLINGS.........91

STANDARD LARGE GENERATORTRANSMISSION FACILITY
INTERCONNECTION AGREEMENT

THIS STANDARD LARGE GENERATORTRANSMISSION FACILITY

INTERCONNECTION AGREEMENT (“Agreement”) is made and entered into this ____6th
day of ________ 20__August 2015, by and among _____________, a [corporate description]
organized and existing under the laws of the State/Commonwealth of__________ (“Developer”
with a Large Generating Facility), the New York Independent System Operator, Inc. (“NYISO”),
a not-for-profit corporation organized and existing under the laws of the State of New York
(“NYISO”), and _____________ a [corporate description], New York State Electric & Gas
Corporation (“NYSEG”), a corporation organized and existing under the laws of the State of
New York (“Connecting Transmission Owner”). Developer, the NYISO, or Connecting
Transmission Owner, and Trans-Allegheny Interstate Line Company (“TrAILCo”), a corporation
organized and existing under the laws of the State of Maryland. NYSEG, NYISO or TrAILCo
each may be referred to as a “Party” or collectively referred to as the “Parties.” The terms
“Party” and “Parties” as used herein shall not include PJM Interconnection, L.L.C. (“PJM”) or
any successor Regional Transmission Organization.

RECITALS

WHEREAS, NYSEG is the owner of the Watercure Road to Homer City 345 kV transmission line (the “Watercure Line”); and

WHEREAS, NYISO operates the New York State Transmission System and Connecting
Transmission Owner owns certain facilities included in the New York State Transmission
System; and

WHEREAS, TrAILCo is the owner of the Mainesburg 345 kV-115 kV substation (the “Mainesburg Substation” or “Transmission Facility”); and

WHEREAS, Developer intends to own, lease and/or control and operate the Generating Facility
identified as a Large Generating Facility in Appendix C to this Agreement; and,
WHEREAS, once in service, the Mainesburg Substation will be operated by, and under the
functional control of, PJM and is considered part of the PJM Transmission System; and

WHEREAS, Developer, NYISO, and Connecting Transmission OwnerNYSEG and TrAILCo

have agreed to enter into this Agreement for the purpose of interconnecting the Large Generating Facility withMainesburg Substation to the New York State Transmission System; and

WHEREAS, the interconnection of the Mainesburg Substation will entail electrically bifurcating the Watercure Line into two segments: (a) the Watercure Road to Mainesburg Substation

segment (the “WRM Segment”); and (b) the Mainesburg Substation to Homer City segment (the “MHC Segment”); and

WHEREAS, the WRM Segment and the MHC Segment shall each be owned by NYSEG and under the functional control of the NYISO; and

WHEREAS, PJM is a signatory to this Agreement consistent with American Electric Power Service Corporation, 112 FERC ¶ 61,128 at P 10 (2005), to ensure that PJM is kept fully apprised of the matters addressed herein so that PJM may be kept aware of any reliability and planning issues that may arise.

NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein, it is agreed:

ARTICLE 1. DEFINITIONS

Whenever used in this Agreement with initial capitalization, the following terms shall have the

meanings specified in this Article 1. Terms used in this Agreement with initial capitalization that are not defined in this Article 1 shall have the meanings specified in Section 30.1.0 of
Attachment X or Section 25.1 of Attachment S of thethe NYISO Open-Access Transmission
Tariff (“NYISO OATT”).

Affected System shall mean an electric system other than the transmission system owned,

controlled or operated by the Connecting Transmission Ownera Party that may be affected by the proposed interconnection.

Affected System Operator shall mean the entity that operates an Affected System.

Affected Transmission Owner shall mean the New York public utility or authority (or its

designated agent) other than the Connecting Transmission Owner that (i) owns facilities used for the transmission of Energy in interstate commerce and provides Transmission Service under the Tariff, and (ii) owns, leases or otherwise possesses an interest in a portion of the New York State Transmission System where System Deliverability Upgrades or System Upgrade Facilities are installed pursuant to Attachment X and Attachment S of the Tariff.

Affiliate shall mean, with respect to a person or entity, any individual, corporation, partnership,
firm, joint venture, association, joint-stock company, trust or unincorporated organization,
directly or indirectly controlling, controlled by, or under common control with, such person or
entity. The term “control” shall mean the possession, directly or indirectly, of the power to

direct the management or policies of a person or an entity. A voting interest of ten percent or more shall create a rebuttable presumption of control.

Ancillary Services shall mean those services that are necessary to support the transmission of Capacity and Energy from resources to Loads while maintaining reliable operation of the New York State Transmission System in accordance with Good Utility Practice.

Applicable Reliability Councils shall mean the NERC, ReliabilityFirst, PJM, the NPCC and the NYSRC.

Applicable Reliability Standards shall mean the requirements and guidelines of the Applicable
Reliability Councils, and the Transmission District to which the Developer’s Large Generating
Facility is directly interconnected, as those requirements and guidelines are amended and
modified and in effect from time to time; provided that no Party shall waive its right to challenge
the applicability or validity of any requirement or guideline as applied to it in the context of this
Agreement.

Attachment Facilities shall mean the Connecting Transmission Owner’s Attachment Facilities
and the Developer’s Attachment Facilities. Collectively, Attachment Facilities include all
facilities and equipment between the Large Generating Facility and the Point of Interconnection,
including any modification, additions or upgrades that are necessary to physically and
electrically interconnect the Large Generating Facility to the New York State Transmission
System. Attachment Facilities are sole use facilities and shall not include Stand Alone System
Upgrade Facilities, Distribution Upgrades, System Upgrade Facilities or System Deliverability
Upgrades.

Base Case shall mean the base case power flow, short circuit, and stability data bases used for the Interconnection Studies by NYISO, Connecting Transmission Owner or Developer;
described in Section 30.2.3 of the Large Facility Interconnection Procedures.

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

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

Business Day shall mean Monday through Friday, excluding federal holidays.

Byway shall mean all transmission facilities comprising the New York State Transmission

System that are neither Highways nor Other Interfaces. All transmission facilities in Zone J and Zone K are Byways.

Calendar Day shall mean any day including Saturday, Sunday or a federal holiday.

Capacity Region shall mean one of four subsets of the Installed Capacity statewide markets
comprised of (1) Rest of State (i.e., Load Zones A through F); (2) Lower Hudson Valley (i.e.,
Load Zones G, H and I); (3) New York City (i.e., Load Zone J); and (4) Long Island (i.e., Load
Zone K) , except for Class Year Interconnection Facility Studies conducted prior to Class Year
2012, for which “Capacity Region” shall be defined as set forth in Section 25.7.3 of Attachment
S to the NYISO OATT.

Capacity Resource Interconnection Service (“CRIS”) shall mean the service provided by

NYISO to interconnect the Developer’s Large Generating Facility to the New York State

Transmission System or to the Distribution System in accordance with the NYISO Deliverability Interconnection Standard, to enable the New York State Transmission System to deliver electric capacity from the Large Generating Facility, pursuant to the terms of the NYISO OATT.

Class Year Deliverability Study shall mean an assessment, conducted by the NYISO staff in
cooperation with Market Participants, to determine the System Deliverability Upgrades required
for each generation and merchant transmission project included in the Class Year
Interconnection Facilities Study to interconnect to the New York State Transmission System or
to the Distribution System in compliance with the NYISO Deliverability Interconnection
Standard.

Clustering shall mean the process whereby a group of Interconnection Requests is studied

together, instead of serially, for the purpose of conducting the Interconnection System Reliability Impact Study.

Commercial Operation shall mean the status of a Large Generating Facility that hasthe

interconnection of the Mainesburg Substation to the Watercure Line at the Point(s) of

Interconnection, and the energization of the Mainesburg Substation, which points and substation have commenced generatingtransmitting electricity for sale, excluding electricity
generatedtransmitted during Trial Operation.

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

Facility commencesPoint(s) of Interconnection and the Mainesburg Substation have achieved
Commercial Operation as agreed to by the Parties pursuant to Appendix E to this Agreement.

Confidential Information shall mean any information that is defined as confidential by Article

22 of this Agreement.

Connecting Transmission Owner shall mean the New York public utility or authority (or its
designated agent) that (i) owns facilities used for the transmission of Energy in interstate
commerce and provides Transmission Service under the Tariff, (ii) owns, leases or otherwise
possesses an interest in the portion of the New York State Transmission System or Distribution
System at the Point of Interconnection, and (iii) is a Party to the Standard Large Interconnection
Agreement.

Connecting Transmission Owner’s Attachment Facilities shall mean all facilities and

equipment owned, controlled or operated by the Connecting Transmission Owner from the Point of Change of Ownership to the Point of Interconnection as identified in Appendix A to the
Standard Large Generator Interconnection Agreement, including any modifications, additions or upgrades to such facilities and equipment. Connecting Transmission Owner’s Attachment
Facilities are sole use facilities and shall not include Stand Alone System Upgrade Facilities or
System Upgrade Facilities.

Control Area shall mean an electric power system or combination of electric power systems to
which a common automatic generation control scheme is applied in order to: (1) match, at all
times, the power output of the Generatorsgenerators within the electric power system(s) and
capacity and energy purchased from entities outside the electric power system(s), with the Load
within the electric power system(s); (2) maintain scheduled interchange with other Control
Areas, within the limits of Good Utility Practice; (3) maintain the frequency of the electric power
system(s) within reasonable limits in accordance with Good Utility Practice; and (4) provide
sufficient generating capacity to maintain Operating Reserves in accordance with Good Utility
Practice. A Control Area must be certified by the NPCC or ReliabilityFirst, as applicable.

Default shall mean the failure of a Party in Breach of this Agreement to cure such Breach in accordance with Article 17 of this Agreement.

Deliverability Interconnection Standard shall mean the standard that must be met by any

Large Generating Facility proposing to interconnect to the New York State Transmission System or to the Distribution System and become a qualified Installed Capacity Supplier. To meet the
NYISO Deliverability Interconnection Standard, the Developer of the proposed Large
Generating Facility must, in accordance with the rules in Attachment S to the NYISO OATT,
fund or commit to fund the System Deliverability Upgrades identified for its project in the Class Year Deliverability Study.

Developer shall mean an Eligible Customer developing a Large Generating Facility, proposing to connect to the New York State Transmission System, in compliance with the NYISO
Minimum Interconnection Standard.

Developer’s Attachment Facilities shall mean all facilities and equipment, as identified in

Appendix A of this Agreement, that are located between the Large Generating Facility and the Point of Change of Ownership, including any modification, addition, or upgrades to such
facilities and equipment necessary to physically and electrically interconnect the Large
Generating Facility to the New York State Transmission System. Developer’s Attachment
Facilities are sole use facilities.

Dispute Resolution shall mean the procedure described in Article 27 of this Agreement for resolution of a dispute between the Parties.

Distribution System shall mean the Transmission Owner’s facilities and equipment used to

distribute electricity that are subject to FERC jurisdiction, and are subject to the NYISO’s LFIP

or SGIP under FERC Order Nos. 2003 and/or 2006. The term Distribution System shall not include LIPA’s distribution facilities.

Distribution Upgrades shall mean the additions, modifications, and upgrades to the Connecting
Transmission Owner’s Distribution System at or beyond the Point of Interconnection to facilitate
interconnection of a Large Facility or Small Generating Facility and render the transmission
service necessary to affect the Developer’s wholesale sale of electricity in interstate commerce.
Distribution Upgrades do not include Interconnection Facilities, System Upgrade Facilities, or
System Deliverability Upgrades. Distribution Upgrades are sole use facilities and shall not
include Stand Alone System Upgrade Facilities, System Upgrade Facilities, or System
Deliverability Upgrades.

Emergency shall mean an any abnormal condition or situation which NYSEG or NYISO, in

Emergency State shall mean the condition or state that the New York State Power

SystemTransmission System, or the PJM Transmission System, as applicable, is in when an abnormal condition occurs that requires automatic or immediate manual action to prevent or limit loss of the New York State Transmission System or Generatorsthe PJM Transmission System, or generators that could adversely affect the reliability of the New York State Power SystemTransmission System, or the PJM Transmission System, as applicable.

Energy Resource Interconnection Service (“ERIS”) shall mean the service provided by
NYISO to interconnect the Developer’s Large Generating Facility to the New York State
Transmission System or to the Distribution System in accordance with the NYISO Minimum
Interconnection Standard, to enable the New York State Transmission System to receive Energy
and Ancillary Services from the Large Generating Facility, pursuant to the terms of the NYISO
OATT.

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

Connecting Transmission Owner to begin engineering and procurement of long lead-time items necessary for the establishment of the interconnection in order to advance the implementation of the Interconnection Request.

Environmental Law shall mean Applicable Laws or Regulations relating to pollution or protection of the environment or natural resources.

Federal Power Act or FPA shall mean the Federal Power Act, as amended, 16 U.S.C. §§ 791a

et seq.(“FPA”).

FERC or Commission shall mean the Federal Energy Regulatory Commission (“Commission”) or its successor.

Generating Facility shall mean Developer’s device for the production of electricity identified in the Interconnection Request, but shall not include the Developer’s Attachment Facilities or
Distribution Upgrades.

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

Governmental Authority shall mean any federal, state, local or other governmental regulatory
or administrative agency, court, commission, department, board, or other governmental
subdivision, legislature, rulemaking board, tribunal, or other governmental authority having
jurisdiction over any of the Parties, their respective facilities, or the respective services they
provide, and exercising or entitled to exercise any administrative, executive, police, or taxing
authority or power; provided, however, that such term does not include DeveloperNYSEG,
TrAILCo, NYISO, Affected Transmission Owner, Connecting Transmission Owner,PJM or any
Affiliate thereof.

Hazardous Substances shall mean any chemicals, materials or substances defined as or

“toxic substances,” “radioactive substances,” “contaminants,” “pollutants,” “toxic pollutants” or words of similar meaning and regulatory effect under any applicable Environmental Law, or any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any applicable Environmental Law.

Highway shall mean 115 kV and higher transmission facilities that comprise the following

NYCA interfaces: Dysinger East, West Central, Volney East, Moses South, Central East/Total
East and UPNY-ConEd, and their immediately connected, in series, Bulk Power System
facilities in New York State. Each interface shall be evaluated to determine additional “in
series” facilities, defined as any transmission facility higher than 115 kV that (a) is located in an
upstream or downstream zone adjacent to the interface and (b) has a power transfer distribution
factor (DFAX) equal to or greater than five percent when the aggregate of generation in zones or
systems adjacent to the upstream zone or zones which define the interface is shifted to the
aggregate of generation in zones or systems adjacent to the downstream zone or zones which
define the interface. In determining “in series” facilities for Dysinger East and West Central
interfaces, the 115 kV and 230 kV tie lines between NYCA and PJM located in LBMP Zones A
and B shall not participate in the transfer. Highway transmission facilities are listed in ISO
Procedures.

Initial SynchronizationEnergization Date shall mean the date upon which the Large

Generating FacilityMainesburg Substation is initially synchronizedinterconnected and energized with the New York State Transmission System and upon which Trial Operation begins.

In-Service Date shall mean the date upon which the Developer reasonably expects it will be

ready to begin use of the Connecting Transmission Owner’s Attachment Facilities to obtain back feed power.

Interconnection Facilities Study shall mean a study conducted by NYISO or a third party

consultant for the Developer to determine a list of facilities (including Connecting Transmission
Owner’s Attachment Facilities, Distribution Upgrades, System Upgrade Facilities and System
Deliverability Upgrades as identified in the Interconnection System Reliability Impact Study),
the cost of those facilities, and the time required to interconnect the Large Generating Facility
with the New York State Transmission System or with the Distribution System. The scope of
the study is defined in Section 30.8 of the Standard Large Facility Interconnection Procedures.

Interconnection Facilities Study Agreement shall mean the form of agreement contained in Appendix 4 of the Standard Large Facility Interconnection Procedures for conducting the Interconnection Facilities Study.

Interconnection Feasibility Study shall mean a preliminary evaluation of the system impact and cost of interconnecting the Large Generating Facility to the New York State Transmission System or to the Distribution System, the scope of which is described in Section 30.6 of the Standard Large Facility Interconnection Procedures.

Interconnection Feasibility Study Agreement shall mean the form of agreement contained in Appendix 2 of the Standard Large Facility Interconnection Procedures for conducting the
Interconnection Feasibility Study.

Interconnection Request shall mean a Developer’s request, in the form of Appendix 1 to the
Standard Large Facility Interconnection Procedures, in accordance with the Tariff, to
interconnect a new Large Generating Facility to the New York State Transmission System or to
the Distribution System, or to materially increase the capacity of, or make a material
modification to the operating characteristics of, an existing Large Generating Facility that is
interconnected with the New York State Transmission System or with the Distribution System.

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

Interconnection System Reliability Impact Study (“SRIS”) shall mean an engineering study,
conducted in accordance with Section 30.7 of the Large Facility Interconnection Procedures, that
evaluates the impact of the proposed Large Generating Facility on the safety and reliability of the
New York State Transmission System and, if applicable, an Affected System, to determine what
Attachment Facilities, Distribution Upgrades and System Upgrade Facilities are needed for the
proposed Large Generation Facility of the Developer to connect reliably to the New York State
Transmission System or to the Distribution System in a manner that meets the NYISO Minimum
Interconnection Standard.

Interconnection System Reliability Impact Study Agreement shall mean the form of

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

IRS shall mean the Internal Revenue Service.

Large Generating Facility shall mean a Generating Facility having a Generating Facility Capacity of more than 20 MW.

Loss shall mean any and all lossesliabilities, damages, losses, claims, including claims relating to injury to or death of any person or damage to property, demanddemands, suits, recoveries, costs and expenses, court costs, attorneyattorneys’ fees, and all other obligations by or to third parties, arising out of or resulting from the Indemnified Party’s performance or non-performance of its obligations under this Agreement on behalf of the Indemnifying Party, except in cases of gross negligence or intentional wrongdoing by the Indemnified Party..

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

Metering Equipment shall mean all metering equipment installed or to be installed at the Large
Generating Facility pursuant to this Agreement at the metering pointsPoint(s) of Interconnection,

including but not limited to instrument transformers, MWh-meters, data acquisition equipment,
transducers, remote terminal unit, communications equipment, phone lines, and fiber optics.

Minimum Interconnection Standard shall mean the reliability standard that must be met by

any Large Generating Facility proposing to connect to the New York State Transmission System or to the Distribution System. The Standard is designed to ensure reliable access by the
proposed project to the New York State Transmission System. The Standard does not impose any deliverability test or deliverability requirement on the proposed interconnection.

NERC shall mean the North American Electric Reliability CouncilCorporation or its successor organization.

New York State Transmission System shall mean the entire New York State electric

transmission system, which includes: (i) the Transmission Facilities under ISONYISO

Operational Control; (ii) the Transmission Facilities Requiring ISONYISO Notification; and (iii) all remaining transmission facilities within the New York Control Area.

Notice of Dispute shall mean a written notice of a dispute or claim that arises out of or in connection with this Agreement or its performance.

NPCC shall mean the Northeast Power Coordinating Council or its successor organization.

NYISO shall mean the New York Independent System Operator, Inc. or its successor organization.

NYISO Tariff shall mean the NYISO Open Access Transmission Tariff (“NYISO OATT”), as
filed with the Commission, and as amended or supplemented from time to time, or any successor
tariff.

NYSRC shall mean the New York State Reliability Council or its successor organization. Outage Start Date shall mean that date set forth in Appendix B to this Agreement.

Optional Interconnection Study shall mean a sensitivity analysis based on assumptions specified by the Developer in the Optional Interconnection Study Agreement.

Optional Interconnection Study Agreement shall mean the form of agreement contained in Appendix 5 of the Standard Large Facility Interconnection Procedures for conducting the Optional Interconnection Study.

Other Interfaces shall mean the following interfaces into Capacity Regions: Lower Hudson

Valley [i.e., Rest of State (Load Zones A-F) to Lower Hudson Valley (Load Zones G, H and I)];
New York City [i.e., Lower Hudson Valley (Load Zones G, H and I) to New York City (Load
Zone J)]; and Long Island [i.e., Lower Hudson Valley (Load Zones G, H and I) to Long Island
(Load Zone K)], and the following Interfaces between the NYCA and adjacent Control Areas:

PJM to NYISO, ISO-NE to NYISO, Hydro-Quebec to NYISO, and Norwalk Harbor (Connecticut) to Northport (Long Island) Cable.

Party or Parties shall mean NYSEG, NYISO, Connecting Transmission Owner, or Developeror TrAILCo, or any combination of the above.

PJM shall mean the PJM Interconnection, L.L.C. or its successor organization.

PJM Tariff shall mean the PJM OATT, as filed with the Commission, as amended or supplemented from time to time, or any successor tariff.

PJM Transmission System shall mean the transmission facilities under the operational control
of PJM.

Point of Change ofin Ownership shall mean the pointpoint(s), as set forth in Figure 1 to

Appendix A to this Agreement, where the Developer’s AttachmentSystem Upgrade Facilities owned by TrAILCo connect to the Connecting Transmission Owner’s Attachment
FacilitiesWatercure Line.

Point of Interconnection shall mean the pointpoint(s), as set forth in Figure 1 to Appendix A to this Agreement, where the AttachmentSystem Upgrade Facilities owned by TrAILCo connect to the New York State Transmission System or to the Distribution System.

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

Retired: A Generator that has permanently ceased operating on or after May 1, 2015 either: i) pursuant to applicable notice; or ii) as a result of the expiration of its Mothball Outage or its ICAP Ineligible Forced Outage.

ReliabilityFirst shall mean the ReliabilityFirst Corporation or its successor organization.

Scoping Meeting shall mean the meeting between representatives of the Developer, NYISO and
Connecting Transmission Owner conducted for the purpose of discussing alternative
interconnection options, to exchange information including any transmission data and earlier
study evaluations that would be reasonably expected to impact such interconnection options, to
analyze such information, and to determine the potential feasible Points of Interconnection.

Services Tariff shall mean the NYISO Market Administration and Control Area Tariff, as filed
with the Commission, and as amended or supplemented from time to time, or any successor tariff
thereto.

Site Control shall mean documentation reasonably demonstrating: (1) ownership of, a leasehold interest in, or a right to develop a site for the purpose of constructing the Large Generating
Facility; (2) an option to purchase or acquire a leasehold site for such purpose; or (3) an
exclusivity or other business relationship between Developer and the entity having the right to sell, lease or grant Developer the right to possess or occupy a site for such purpose.

Stand Alone System Upgrade Facilities shall mean System Upgrade Facilities that a

DeveloperNYSEG may construct without affecting day-to-day operations of the New York State
Transmission System during their construction, or that TrAILCo may construct without affecting
day-to-day operations of the New York State Transmission System during their construction.

NYISO, the Connecting Transmission Owner and the Developer must agree as to what constitutesThe Stand Alone System Upgrade Facilities and identify themare identified in Appendix A to this Agreement.

Standard Large Facility Interconnection Procedures (“LFIP”) shall mean the

interconnection procedures applicable to an Interconnection Request pertaining to a Large Generating Facility that are included in Attachment X of the NYISO OATT.

Standard Large Generator Interconnection Agreement (“LGIA”) shall mean this

Agreement, the form of interconnection agreement applicable to an Interconnection Request

pertaining to a Large Generating Facility, that is included in Attachment X of the NYISO OATT.

System Deliverability Upgrades shall mean the least costly configuration of commercially available components of electrical equipment that can be used, consistent with Good Utility Practice and Applicable Reliability Requirements, to make the modifications or additions to Byways and Highways and Other Interfaces on the existing New York State Transmission
System and Distribution System that are required for the proposed project to connect reliably to the system in a manner that meets the NYISO Deliverability Interconnection Standard at the requested level of Capacity Resource Interconnection Service.

System Protection Facilities shall mean the equipment, including necessary protection signal
communications equipment, required to (1) protect the New York State Transmission System
from faults or other electrical disturbances occurring aton the Large Generating Facility
andWatercure Line or the Mainesburg Substation, (2) protect the Large Generating
FacilityWatercure Line from faults or other electrical system disturbances occurring on the New
York State Transmission System or on other delivery systems or other generating systems to
which the New York State Transmission System is directly connected., (3) protect the PJM
Transmission System from faults or other electrical disturbances occurring at the Mainesburg
Substation or the Watercure Line, and (4) protect the Mainesburg Substation from faults or other
electrical system disturbances occurring on the PJM Transmission System or on other delivery
systems or other generating systems to which the PJM Transmission System is directly
connected.

System Upgrade Facilities shall mean the least costly configuration of commercially available
components of electrical equipment that can be used, consistent with Good Utility Practice and

Applicable Reliability Requirements, to make the modifications to the existing transmission
systemor additions to the New York State Transmission System, or the PJM Transmission
System, as applicable, that are required to maintain system reliability due to: (i) changes in the
system, including such changes as load growth and changes in load pattern, to be addressed in
the form of generic generation or transmission projects; and (ii) proposed interconnections. In
the case of proposed interconnection projects, System Upgrade Facilities are the modifications or
additions to the existing New York State Transmission System that are required for the proposed
project to connect reliably to the system in a manner that meets the NYISO Minimum
Interconnection Standard.

TariffTransmission Facility shall mean the NYISO Open Access Transmission Tariff

(“OATT”), as filed with the Commission, and as amended or supplemented from time to time, or any successor tariffMainesburg Substation.

Trial Operation shall mean the period during which DeveloperTrAILCo is engaged in onsiteon‐site test operations and commissioning of the Large Generatinginterconnection of the Transmission Facility to the Watercure Line prior to Commercial Operation.

ARTICLE 2. EFFECTIVE DATE, TERM AND TERMINATION

2.1Effective Date.

This Agreement shall become effective upon execution by the Parties, subject to

acceptance by FERC, or if filed unexecuted, upon the date specified by FERC. The NYISO and Connecting Transmission Owner, NYSEG and TrAILCo shall promptly file this Agreement with FERC upon execution in accordance with Article 3.1.

2.2Term of Agreement.

Subject to the provisions of Article 2.3, this Agreement shall remain in effect for a period of tentwenty (10 20 ) years from the Effective Date or such other longer period as the Developer may request (Term to be Specified in Individual Agreements) and shall be automatically renewed for each successive one-year period thereafter.

2.3Termination.

2.3.1Written Notice.

This Agreement may be terminated by the DeveloperNYSEG or TrAILCo after giving the NYISO and Connecting Transmission Ownernon-terminating Parties ninety (90) Calendar Days advance written notice, or by the NYISO and Connecting Transmission OwnerParties notifying FERC after the Large Generating Facility is RetiredMainesburg Substation
permanently ceases commercial operation.

2.3.2Default.

Any Party may terminate this Agreement in accordance with Article 17.

2.3.3Compliance.

2.4Termination Costs.

If a Party elects to terminate this Agreement pursuant to Article 2.3.1 above, the

terminating Party shall pay all costs incurred (including any cancellation costs relating to orders
or contracts for AttachmentSystem Upgrade Facilities and equipment) or charges assessed by the
other Parties, as of the date of the other Parties’ receipt of such notice of termination, that are the
responsibility of the terminating Party under this Agreement. In the event of termination by a
Party, all Parties shall use commercially Reasonable Efforts to mitigate the costs, damages and
charges arising as a consequence of termination. Upon termination of this Agreement, unless

otherwise ordered or approved by FERC:

2.4.1 With respect to any portion of the Connecting Transmission Owner’s

AttachmentSystem Upgrade Facilities owned by TrAILCo that have not yet been constructed or
installed, the Connecting Transmission OwnerTrAILCo shall, to the extent possible and with
Developer’s authorization, cancel any pending orders of, or return, any materials or equipment
for, or contracts for construction of, such facilities; provided that in the event Developer elects
not to authorize such cancellation, Developer shall assume all payment obligations with respect
to such materials, equipment, and contracts, and the Connecting Transmission Owner shall

deliver such material and equipment, and, if necessary, assign such contracts, to Developer as
soon as practicable, at Developer’s expense. To the extent that Developer has already paid
Connecting Transmission Owner for any or all such costs of materials or equipment not taken by
Developer, Connecting Transmission Owner shall promptly refund such amounts to Developer,
less any costs, including penalties incurred by the Connecting Transmission Owner to. With
respect to any portion of the System Upgrade Facilities owned by NYSEG that have not yet been

constructed or installed, NYSEG shall, to the extent possible, cancel any pending orders of, or
return such, any materials, or equipment for, or contracts for construction of, such facilities.

If Developer terminates this Agreement, it shall be responsible for all costs incurred in association with Developer’s interconnection, including any cancellation costs relating to orders or contracts for Attachment Facilities and equipment, and other expenses including any System Upgrade Facilities and System Deliverability Upgrades for which the Connecting Transmission Owner has incurred expenses and has not been reimbursed by the Developer.

1.1.1 Connecting Transmission Owner may, at its option, retain any portion of such

materials, equipment, or facilities that Developer chooses not to accept delivery of, in which case Connecting Transmission Owner shall be responsible for all costs associated with procuring such materials, equipment, or facilities.

2.4.2 With respect to any portion of the AttachmentSystem Upgrade Facilities,

and any other facilities already installed or constructed pursuant to the terms of this Agreement, Developerand unless said termination is due to NYSEG’s Default under Article 17, TrAILCo shall be responsible for all costs associated with the removal, relocation or other disposition or retirement of such materials, equipment, or facilities, where applicable.

2.5Disconnection.

Upon termination of this Agreement, Developer and Connecting Transmission

OwnerNYSEG and TrAILCo will take all appropriate steps to disconnect the Developer’s Large
Generating Facility from the New York State Transmission SystemMainesburg Substation from
the Watercure Line and to return the Watercure Line to its configuration prior to the
interconnection described herein. All costs required to effectuate such disconnection and return
of the Watercure Line shall be borne by the terminating PartyTrAILCo, unless such termination
resulted from the non-terminating PartyNYSEG’s Default of this Agreement or such non-
terminating Party otherwise is responsible for these costs under this Agreement.

2.6Survival.

This Agreement shall continue in effect after termination to the extent necessary to

provide for final billings and payments and for costs incurred hereunder; including billings and
payments pursuant to this Agreement; to permit the determination and enforcement of liability
and indemnification obligations arising from acts or events that occurred while this Agreement
was in effect; and to permit Developer and Connecting Transmission OwnerNYSEG and
TrAILCo each to have access to the lands of the other pursuant to this Agreement or other
applicable agreements, to disconnect, remove or salvage its own facilities and equipment.

ARTICLE 3. REGULATORY FILINGS

3.1Filing.

NYISO and Connecting Transmission Owner, TrAILCo and NYSEG shall file this

Agreement (and any amendment hereto) with the appropriate Governmental Authority, if

required. Any information related to studies for interconnection asserted by DeveloperNYSEG
or TrAILCo to contain Confidential Information shall be treated in accordance with Article 22 of
this Agreement and Attachment F to the NYISO OATT. If the Developer has executed this
Agreement, or any amendment thereto, the DeveloperNYSEG and TrAILCo shall reasonably
cooperate with NYISO and Connecting Transmission Ownerone another with respect to such
filing and toshall provide any information reasonably requested by NYISO and Connecting
Transmission Ownerthe other Party needed to comply with Applicable Laws and Regulations.

ARTICLE 4. SCOPE OF INTERCONNECTION SERVICE

4.1Provision of Service.

NYISO will provide Developer with interconnection service of the following type for the term of this Agreement.

NYSEG shall permit TrAILCo to interconnect the Mainesburg Substation to the

Watercure Line in accordance with the terms and conditions of this Agreement.

1.1.2Product.

NYISO will provide [] Interconnection Service to Developer at the

Point of Interconnection.

1.1.3 Developer is responsible for ensuring that its actual Large Generating Facility

output matches the scheduled delivery from the Large Generating Facility to the New York State Transmission System, consistent with the scheduling requirements of the NYISO’s FERC-
approved market structure, including ramping into and out of such scheduled delivery, as
measured at the Point of Interconnection, consistent with the scheduling requirements of the NYISO OATT and any applicable FERC-approved market structure.

4.2 No Transmission Delivery Service.

The execution of this Agreement does not constitute a request for, nor agreement to

provide, any Transmission Service under the NYISO OATT, and does not convey any right to deliver electricity to any specific customer or Point of Delivery. If Developer wishes to obtain Transmission Service on the New York State Transmission System, then Developer must request such Transmission Service in accordance with the provisions of the NYISO OATT.

ARTICLE 5. SYSTEM UPGRADE FACILITIES ENGINEERING, PROCUREMENT, AND CONSTRUCTION

1.2No Other Services.

The execution of this Agreement does not constitute a request for, nor agreement to

provide Energy, any Ancillary Services or Installed Capacity under the NYISO Market

Administration and Control Area Services Tariff (“Services Tariff”). If Developer wishes to

supply Energy, Installed Capacity or Ancillary Services, then Developer will make application to do so in accordance with the NYISO Services Tariff.

Article 2. INTERCONNECTION FACILITIES ENGINEERING,
PROCUREMENT, AND CONSTRUCTION

4.35.1 OptionsConstruction Dates/Description of Facilities.

Unless otherwise mutually agreed to by Developer and Connecting Transmission Owner, Developer shall select the In-Service Date, Initial Synchronization Date, and Commercial
Operation Date; and either Standard Option or Alternate Option set forth below for completion of the Connecting Transmission Owner’s Attachment Facilities and System Upgrade Facilities and System Deliverability Upgrades as set forth in Appendix A hereto, and such dates and
selected option shall be set forth in Appendix B hereto.

NYSEG, in consultation with TrAILCo, shall select the Outage Start Date. NYSEG and

TrAILCo shall mutually select the Initial Energization Date and the Commercial Operation Date
for completion of the System Upgrade Facilities set forth in Appendix A hereto, including Stand
Alone System Upgrade Facilities, and such dates shall be set forth in Appendix B hereto.

4.3.15.1.1 Standard OptionConstruction of System Upgrade Facilities.

The Connecting Transmission OwnerTrAILCo and NYSEG shall design, procure, and

construct the Connecting Transmission Owner’s Attachment Facilities andand install the System
Upgrade Facilities and System Deliverability Upgrades, using Reasonable Efforts (unless
Appendix C of this Agreement requires a superior level of effort) to complete the Connecting
Transmission Owner’s Attachment Facilities and System Upgrade Facilities and System
Deliverability Upgradesin accordance with Appendices A and C, and by the dates set forth in
Appendix B hereto. The Connecting Transmission Owner shall notCertain System Upgrade
Facilities, as set forth in Appendix A hereto, shall be constructed by TrAILCo but shall be
owned, operated, maintained, tested, repaired and replaced by NYSEG. Neither NYSEG nor
TrAILCo shall be required to undertake any action which is inconsistent with its standard safety
practices, its material and equipment specifications, its design criteria and construction
procedures, its labor agreements, and Applicable Laws and Regulations. In the event the
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Connecting Transmission Ownereither NYSEG or TrAILCo reasonably expects that it will not be able to complete the Connecting Transmission Owner’s Attachment Facilities and System Upgrade Facilities and System Deliverability Upgrades by the specified dates, the Connecting Transmission Ownerthat Party shall promptly provide written notice to the Developerother Party, and to the NYISO, and shall undertake Reasonable Efforts (unless Appendix C of this
Agreement requires a superior level of effort) to meet the earliest dates thereafter.

2.1.1Alternate Option.

If the dates designated by Developer are acceptable to Connecting Transmission Owner,
the Connecting Transmission Owner shall so notify Developer and NYISO within thirty (30)
Calendar Days, and shall assume responsibility for the design, procurement and construction of
the Connecting Transmission Owner’s Attachment Facilities by the designated dates. If
Connecting Transmission Owner subsequently fails to complete Connecting Transmission
Owner’s Attachment Facilities by the In-Service Date, to the extent necessary to provide back
feed power; or fails to complete System Upgrade Facilities or System Deliverability Upgrades by
the Initial Synchronization Date to the extent necessary to allow for Trial Operation at full power
output, unless other arrangements are made by the Developer and Connecting Transmission
Owner for such Trial Operation; or fails to complete the System Upgrade Facilities and System
Deliverability Upgrades by the Commercial Operation Date, as such dates are reflected in
Appendix B hereto; Connecting Transmission Owner shall pay Developer liquidated damages in
accordance with Article 5.3, Liquidated Damages, provided, however, the dates designated by
Developer shall be extended day for day for each day that NYISO refuses to grant clearances to
install equipment.

2.1.2Option to Build.

If the dates designated by Developer are not acceptable to Connecting Transmission
Owner, the Connecting Transmission Owner shall so notify the Developer and NYISO within
thirty (30) Calendar Days, and unless the Developer and Connecting Transmission Owner agree
otherwise, Developer shall have the option to assume responsibility for the design, procurement
and construction of Connecting Transmission Owner’s Attachment Facilities and Stand Alone
System Upgrade Facilities on the dates specified in Article 5.1.2; provided that if an Attachment
Facility or Stand Alone System Upgrade Facility is needed for more than one Developer’s
project, Developer’s option to build such Facility shall be contingent on the agreement of all
other affected Developers. NYISO, Connecting Transmission Owner and Developer must agree
as to what constitutes Stand Alone System Upgrade Facilities and identify such Stand Alone
System Upgrade Facilities in Appendix A hereto. Except for Stand Alone System Upgrade

Facilities, Developer shall have no right to construct System Upgrade Facilities under this
option.

2.1.3Negotiated Option.

If the Developer elects not to exercise its option under Article 5.1.3, Option to Build,
Developer shall so notify Connecting Transmission Owner and NYISO within thirty (30)
Calendar Days, and the Developer and Connecting Transmission Owner shall in good faith
attempt to negotiate terms and conditions (including revision of the specified dates and
liquidated damages, the provision of incentives or the procurement and construction of a portion
of the Connecting Transmission Owner’s Attachment Facilities and Stand Alone System
Upgrade Facilities by Developer) pursuant to which Connecting Transmission Owner is
responsible for the design, procurement and construction of the Connecting Transmission
Owner’s Attachment Facilities and System Upgrade Facilities and System Deliverability
Upgrades. If the two Parties are unable to reach agreement on such terms and conditions,
Connecting Transmission Owner shall assume responsibility for the design, procurement and
construction of the Connecting Transmission Owner’s Attachment Facilities and System
Upgrade Facilities and System Deliverability Upgrades pursuant to 5.1.1, Standard Option.

2.2General Conditions Applicable to Option to Build.

If Developer assumes responsibility for the design, procurement and construction of the
Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade
Facilities,

(1) Developer shall engineer, procure equipment, and construct the Connecting
Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities (or portions thereof) using Good Utility Practice and using standards and specifications provided in advance by the Connecting Transmission Owner;

(2) Developer’s engineering, procurement and construction of the Connecting

Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities shall comply with all requirements of law to which Connecting Transmission Owner would be subject in the engineering, procurement or construction of the Connecting Transmission Owner’s
Attachment Facilities and Stand Alone System Upgrade Facilities;

(3) Connecting Transmission Owner shall review and approve the engineering design, equipment acceptance tests, and the construction of the Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities;

(4) Prior to commencement of construction, Developer shall provide to Connecting
Transmission Owner and NYISO a schedule for construction of the Connecting Transmission
Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities, and shall promptly
respond to requests for information from Connecting Transmission Owner or NYISO;

(5) At any time during construction, Connecting Transmission Owner shall have the right to gain unrestricted access to the Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities and to conduct inspections of the same;

(6) At any time during construction, should any phase of the engineering, equipment
procurement, or construction of the Connecting Transmission Owner’s Attachment Facilities and
Stand Alone System Upgrade Facilities not meet the standards and specifications provided by

Connecting Transmission Owner, the Developer shall be obligated to remedy deficiencies in that portion of the Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities;

(7) Developer shall indemnify Connecting Transmission Owner and NYISO for

claims arising from the Developer’s construction of Connecting Transmission Owner’s

Attachment Facilities and Stand Alone System Upgrade Facilities under procedures applicable to Article 18.1 Indemnity;

(8) Developer shall transfer control of Connecting Transmission Owner’s Attachment
Facilities and Stand Alone System Upgrade Facilities to the Connecting Transmission Owner;

(9) Unless the Developer and Connecting Transmission Owner otherwise agree,

Developer shall transfer ownership of Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities to Connecting Transmission Owner;

(10) Connecting Transmission Owner shall approve and accept for operation and maintenance the Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities to the extent engineered, procured, and constructed in accordance with this Article 5.2; and

(11) Developer shall deliver to NYISO and Connecting Transmission Owner “as built” drawings, information, and any other documents that are reasonably required by NYISO or
Connecting Transmission Owner to assure that the Attachment Facilities and Stand Alone
System Upgrade Facilities are built to the standards and specifications required by Connecting
Transmission Owner.

2.3Liquidated Damages.

The actual damages to the Developer, in the event the Connecting Transmission Owner’s Attachment Facilities or System Upgrade Facilities or System Deliverability Upgrades are not
completed by the dates designated by the Developer and accepted by the Connecting
Transmission Owner pursuant to subparagraphs 5.1.2 or 5.1.4, above, may include Developer’s fixed operation and maintenance costs and lost opportunity costs. Such actual damages are
uncertain and impossible to determine at this time. Because of such uncertainty, any liquidated damages paid by the Connecting Transmission Owner to the Developer in the event that
Connecting Transmission Owner does not complete any portion of the Connecting Transmission Owner’s Attachment Facilities, System Upgrade Facilities or System Deliverability Upgrades by the applicable dates, shall be an amount equal to 1/2 of 1 percent per day of the actual cost of the Connecting Transmission Owner’s Attachment Facilities and System Upgrade Facilities and
System Deliverability Upgrades, in the aggregate, for which Connecting Transmission Owner
has assumed responsibility to design, procure and construct.

However, in no event shall the total liquidated damages exceed 20 percent of the actual

cost of the Connecting Transmission Owner Attachment Facilities and System Upgrade Facilities
and System Deliverability Upgrades for which the Connecting Transmission Owner has assumed
responsibility to design, procure, and construct. The foregoing payments will be made by the
Connecting Transmission Owner to the Developer as just compensation for the damages caused
to the Developer, which actual damages are uncertain and impossible to determine at this time,
and as reasonable liquidated damages, but not as a penalty or a method to secure performance of
this Agreement. Liquidated damages, when the Developer and Connecting Transmission Owner

agree to them, are the exclusive remedy for the Connecting Transmission Owner’s failure to meet its schedule.

Further, Connecting Transmission Owner shall not pay liquidated damages to Developer
if: (1) Developer is not ready to commence use of the Connecting Transmission Owner’s
Attachment Facilities or System Upgrade Facilities or System Deliverability Upgrades to take
the delivery of power for the Developer’s Large Generating Facility’s Trial Operation or to
export power from the Developer’s Large Generating Facility on the specified dates, unless the
Developer would have been able to commence use of the Connecting Transmission Owner’s
Attachment Facilities or System Upgrade Facilities or System Deliverability Upgrades to take
the delivery of power for Developer’s Large Generating Facility’s Trial Operation or to export
power from the Developer’s Large Generating Facility, but for Connecting Transmission
Owner’s delay; (2) the Connecting Transmission Owner’s failure to meet the specified dates is
the result of the action or inaction of the Developer or any other Developer who has entered into
a Standard Large Generator Interconnection Agreement with the Connecting Transmission
Owner and NYISO, or action or inaction by any other Party, or any other cause beyond
Connecting Transmission Owner’s reasonable control or reasonable ability to cure; (3) the
Developer has assumed responsibility for the design, procurement and construction of the
Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade
Facilities; or (4) the Connecting Transmission Owner and Developer have otherwise agreed. In
no event shall NYISO have any liability whatever to Developer for liquidated damages
associated with the engineering, procurement or construction of Attachment Facilities or System
Upgrade Facilities or System Deliverability Upgrades.

2.4Power System Stabilizers.

The Developer shall procure, install, maintain and operate Power System Stabilizers in
accordance with the requirements identified in the Interconnection Studies conducted for
Developer’s Large Generating Facility. NYISO and Connecting Transmission Owner reserve
the right to reasonably establish minimum acceptable settings for any installed Power System
Stabilizers, subject to the design and operating limitations of the Large Generating Facility. If
the Large Generating Facility’s Power System Stabilizers are removed from service or not
capable of automatic operation, the Developer shall immediately notify the Connecting
Transmission Owner and NYISO. The requirements of this paragraph shall not apply to wind
generators.

4.45.2 Equipment Procurement.

If responsibility for construction of the Connecting Transmission Owner’s Attachment
Facilities or System Upgrade Facilities or System Deliverability Upgrades is to be borne by the
Connecting Transmission Owner, then the Connecting Transmission OwnerTrAILCo, then
TrAILCo shall commence the design of the Connecting Transmission Owner’s Attachment
Facilities or System Upgrade Facilities or System Deliverability Upgrades, and procure
23

necessary equipment, as soon as practicable after all of the following conditions are satisfied, unless the Developer and Connecting Transmission OwnerNYSEG and TrAILCo otherwise agree in writing:

2.4.1 NYISO and Connecting Transmission Owner have completed the Interconnection Facilities Study pursuant to the Interconnection Facilities Study Agreement;

2.4.2 The NYISO has completed the required cost allocation analyses, and Developer
has accepted his share of the costs for necessary System Upgrade Facilities and System
Deliverability Upgrades in accordance with the provisions of Attachment S of the NYISO
OATT;

4.4.15.2.1 The Connecting Transmission OwnerTrAILCo has received written

authorization to proceed with design and procurement from the DeveloperNYSEG by the date specified in Appendix B hereto; and.

4.4.25.2.2 The DeveloperTrAILCo has provided security to the Connecting

Transmission OwnerNYSEG in accordance with Article 11.5 by the dates specified in Appendix BC hereto.

4.55.3 Construction Commencement.

The Connecting Transmission OwnerTrAILCo shall commence construction of the Connecting Transmission Owner’s Attachment Facilities and System Upgrade Facilities and System Deliverability Upgrades for which it is responsible as soon as practicable after the following additional conditions are satisfied:

4.5.15.3.1 Approval of the appropriate Governmental Authority has been obtained for any facilities requiring regulatory approval;

4.5.25.3.2 Necessary real property rights and rights-of-way have been obtained, to
the extent required for the construction of a discrete aspect of the Connecting Transmission

Owner’s Attachment Facilities andthe System Upgrade Facilities and System Deliverability Upgrades;

4.5.35.3.3 The Connecting Transmission OwnerTrAILCo has received written

authorization to proceed with construction from the Developer by the date specified in Appendix B heretoNYSEG; and

4.5.45.3.4 The DeveloperTrAILCo has provided security to the Connecting

Transmission OwnerNYSEG in accordance with Article 11.5 by the dates specified in Appendix BC hereto.

4.65.4 Work Progress.

The Developer and Connecting Transmission OwnerNYSEG and TrAILCo will keep

each other, and NYISO, advised periodically as to the progress of their respective design,

procurement and construction efforts. Any Party may, at any time, request a progress report

from the Developer or Connecting Transmission OwnerTrAILCo or NYSEG. If, at any time, the
DeveloperNYSEG determines that the completion of the Connecting Transmission Owner’s
AttachmentSystem Upgrade Facilities will not be required until after the specified In-
ServiceCommercial Operation Date, the DeveloperNYSEG will provide written notice to the
Connecting Transmission Owner and NYISOTrAILCo of such later date upon which the
completion of the Connecting Transmission Owner’s AttachmentSystem Upgrade Facilities will
be required.

4.75.5 Information Exchange.

As soon as reasonably practicable after the Effective Date, the Developer and Connecting
Transmission OwnerNYSEG and TrAILCo shall exchange information, and provide NYISO the

same information, regarding the design and compatibility of their respective AttachmentSystem Upgrade Facilities, and the compatibility of the Attachmenttheir respective System Upgrade Facilities, with the New York State Transmission System and PJM Transmission System, and shall work diligently and in good faith to make any necessary design changes.

4.85.6 Limited OperationSystem Upgrade Facilities.

If any of the Connecting Transmission Owner’s Attachment Facilities or System Upgrade
Facilities or System Deliverability Upgrades are not reasonably expected to be completed prior
to the Commercial Operation Date of the Developer’s Large Generating Facility, NYISO shall,
upon the request and at the expense of Developer, in conjunction with the Connecting
Transmission Owner, perform operating studies on a timely basis to determine the extent to
which the Developer’s Large Generating Facility and the Developer’s Attachment Facilities may
operate prior to the completion of the Connecting Transmission Owner’s Attachment Facilities
or System Upgrade Facilities or System Deliverability Upgrades consistent with Applicable
Laws and Regulations, Applicable Reliability Standards, Good Utility Practice, and this
Agreement. Connecting Transmission Owner and NYISO shall permit Developer to operate the
Developer’s Large Generating Facility and the Developer’s Attachment Facilities in accordance
with the results of such studies.

2.5Developer’s Attachment Facilities (“DAF”).

DeveloperTrAILCo and NYSEG shall, at its expense, design, procure, construct, own and install the DAF, as set forth inand own the System Upgrade Facilities in accordance with
Appendix A heretoand the following.

4.8.15.6.1 DAF Specifications For System Upgrade Facilities.

Developer shall submit initial specifications for the DAF, including System Protection Facilities, to Connecting Transmission Owner and NYISO at least one hundred eighty (180) Calendar Days prior to the Initial Synchronization Date; and final specifications for review and comment at least ninety (90) Calendar Days prior to the Initial Synchronization Date.
Connecting Transmission Owner and NYISO shall review such specifications to ensure that the DAF are compatible with the technical specifications, operational control, and safety
requirements of the Connecting Transmission Owner and NYISO and comment on such
specifications within thirty (30) Calendar Days of Developer’s submission. All specifications provided hereunder shall be deemed to be Confidential Information.

The specifications for System Upgrade Facilities, including System Protection Facilities, are set forth in Appendix A.

4.8.25.6.2 No Warranty.

The review by NYSEG of DeveloperTrAILCo’s final specifications by Connecting

Transmission Owner and NYISOfor System Upgrade Facilities to be constructed or installed by TrAILCo shall not be construed as confirming, endorsing, or providing a warranty as to the
design, fitness, safety, durability or reliability of the Large Generating Facility, or the DAF.
Developerthose System Upgrade Facilities. TrAILCo shall make such changes to the DAFthose System Upgrade Facilities as may reasonably be required by Connecting Transmission Owner or NYISO,NYSEG in accordance with Good Utility Practice, to ensure that the DAF are
compatible with the technical specifications, operational control, and safety requirements of the Connecting Transmission Owner and NYISO.

4.8.35.6.3 DAFDesign and Construction.

The DAFSystem Upgrade Facilities shall be designed and constructed in accordance with
Good Utility Practice. Within one hundred twenty (120) Calendar Days after the Commercial
Operation Date, unless the Developer and Connecting Transmission OwnerNYSEG and
TrAILCo agree on another mutually acceptable deadline, the Developer TrAILCo shall deliver to
the Connecting Transmission Owner and NYISO “as-builtNYSEG “as‐built” drawings,
information and documents for the DAFSystem Upgrade Facilities, such as: a one-line diagram,

a site plan showing the Large Generating Facility and the DAFWatercure Line (as segmented)
and the System Upgrade Facilities, plan and elevation drawings showing the layout of the
DAFSystem Upgrade Facilities, a relay functional diagram, relaying AC and DC schematic
wiring diagrams and relay settings for all facilities associated with the DeveloperTrAILCo’s
step-upstep‐down transformers, the facilities connecting the Large Generating FacilityWatercure
Line to the step-upstep‐down transformers and the DAFSystem Upgrade Facilities, and the
impedances (determined by factory tests) for the associated step-upstep‐down transformers and
the Large Generating Facility. The DeveloperWatercure Line. NYSEG shall provide to
TrAILCo, and coordinate with, Connecting Transmission Owner and NYISO TrAILCo, with
respect to proposed specifications for the excitation system, automatic voltage regulator, Large
Generating FacilityWatercure Line control and protection settings, transformer tap settings, and
communications, if applicable.

2.6NYSEG and TrAILCo shall confer with the NYISO and PJM regarding the

Connecting Transmission Owner’s Attachment Facilities Construction.

The Connecting Transmission Owner’s Attachment Facilities shall be designed and

constructed in accordance with Good Utility Practice. Upon request, within one hundred twenty
(120) Calendar Days after the Commercial Operation Date, unless the Connecting Transmission
Owner and Developer agree on another mutually acceptable deadline, the Connecting
Transmission Owner shall deliver to the Developer “as-built” drawings, relay diagrams,
information and documents for the Connecting Transmission Owner’s Attachment Facilities set
forth in Appendix A.

The Connecting Transmission Owner shall transfer of operational control of the

Connecting Transmission Owner’s Attachment Facilities and Stand Alone System Upgrade Facilities to the NYISO, or PJM, as applicable, upon completion of such facilities.

5.7[Reserved]

4.95.8 Access Rights.

4.9.15.8.1 NYSEG’s Access. Upon reasonable notice and supervision by the

Granting Party,TrAILCo, TrAILCo hereby authorizes the authorized agents, representatives,

contractors, and employees of NYSEG to enter the facilities of TrAILCo at all reasonable times
and subject to any required or necessary regulatory approvals, either the Connecting
Transmission Owner or Developer (“Granting Party”) shall furnish to the other of those two
Parties (“Access Party”)NYSEG at no cost any rights of use, licenses, rights of way and

easements with respect to lands owned or controlled by the Granting Party, its agents (if allowed
under the applicable agency agreement), or any Affiliate, that are necessary to enable the Access
PartyTrAILCo to the extent reasonably required for NYSEG to obtain ingress and egress at the
Point of Interconnection to construct, operate, maintain, repair, test (or witness testing), inspect,
replace or remove facilities and equipment to: (i) interconnect the Large Generating Facility
with the New York State Transmission SystemMainesburg Substation to the Watercure Line; (ii)
operate and maintain the Large Generating Facility, the AttachmentWatercure Line, the System
Upgrade Facilities owned by NYSEG, and the New York State Transmission System; and (iii)
disconnect or remove the Access PartyNYSEG’s facilities and equipment upon termination of
this Agreement. In exercising such licenses, rights of way and easements, the Access Party shall
not unreasonably disrupt or interfere with normal operation of the Granting Party’s business and
shall adhere to the safety rules and procedures established in advance, as may be changed from
time to time, by the Granting Party and provided to the Access Party. The Access Party shall
indemnify the Granting Party against all claims of injury or damage from third parties resulting
from the exercise of the access rights provided for herein.TrAILCo’s obligation hereunder shall
be to provide NYSEG (and its agents, representatives, contractors and employees) adequate and
continuous access to all sites where access is authorized under this Article 5.8. NYSEG and its
authorized agents, representatives, contractors and employees, shall comply with TrAILCo’s
safety and security procedures, switching and tagging rules, and escort and other applicable
access requirements, including NERC CIP requirements, in connection with exercising the rights
of access granted hereby. TrAILCo shall give prompt notice to NYSEG of any changes to
TrAILCo’s safety and security procedures, switching and tagging rules, and escort and other

applicable access requirements.

NYSEG must, prior to any access to TrAILCo’s facilities, and during the term of this Agreement, provide and maintain insurance in the kinds and amounts referred in Article 18.

(a)bringing, using, distributing, selling or

possessing illegal drugs or alcoholic beverages at the TrAILCo’s facilities;

(b)unfit for duty at any time during their

assignment and under the influence of alcohol or other drugs; or

(c)otherwise engaged in any improper or

unlawful activity.

Furthermore, TrAILCo shall have the authority to suspend NYSEG’s access, work or
operations (including access, work or operations of any of NYSEG’s agents, representatives,
contractors and employees) in and around such TrAILCo facilities if, in its sole judgment, at any
time hazardous conditions arise or any unsafe practices are being followed by NYSEG’s agents,
representatives, contractors and employees and NYSEG fails to take immediate measures to
correct such conditions or practices. In exercising its access rights under this Article 5.8.1,
NYSEG shall not unreasonably disrupt or interfere with normal operation of TrAILCo’s business
and shall adhere to the safety rules and procedures established in advance, as may be changed

from time to time, by TrAILCo and provided to NYSEG. In accordance with Article 18, NYSEG shall indemnify TrAILCo against all claims of injury or damage from third parties resulting from the exercise of the access rights provided for herein.

5.8.2TrAILCo’s Access. Upon reasonable notice and supervision by NYSEG,

equipment upon termination of this Agreement and return the Watercure Line to its pre-

interconnection configuration. NYSEG’s obligation hereunder shall be to provide TrAILCo (and its agents, representatives, contractors and employees) adequate and continuous access to all sites where access is authorized under this Section 5.8. TrAILCo and its authorized agents,
representatives, contractors and employees, shall comply with NYSEG’s safety and security
procedures, switching and tagging rules, and escort and other applicable access requirements in connection with exercising the rights of access granted hereby. NYSEG shall give prompt notice to TrAILCo of any changes to NYSEG’s safety and security procedures, switching and tagging rules, and escort and other applicable access requirements.

TrAILCo must, prior to any access to NYSEG’s facilities, and during the term of this
Agreement, provide and maintain insurance in the kinds and amounts referred in Article 18
hereof.

NYSEG reserves the right to deny access to TrAILCo’s authorized agents,

representatives, contractors and employees, in or around the NYSEG’s facilities if, in NYSEG’s sole judgment, such authorized agents, representatives, contractors and employees are:

(a) bringing, using, distributing, selling or possessing illegal drugs or alcoholic beverages at the NYSEG’s facilities;

(b) unfit for duty at any time during their assignment and under the influence of alcohol or other drugs; or

Furthermore, NYSEG shall have the authority to suspend TrAILCo’s access, work or operations (including access, work or operations of any of TrAILCo’s agents, representatives, contractors and employees) in and around such NYSEG facilities if, in its sole judgment, at any time hazardous conditions arise or any unsafe practices are being followed by TrAILCo’s agents, representatives, contractors and employees and TrAILCo fails to take immediate measures to correct such conditions or practices. In exercising its access rights under this Article 5.8.2, TrAILCo shall not unreasonably disrupt or interfere with normal operation of NYSEG’s business and shall adhere to the safety rules and procedures established in advance, as may be changed from time to time, by NYSEG and provided to TrAILCo. In accordance with Article 18, TrAILCo shall indemnify NYSEG against all claims of injury or damage from third parties resulting from the exercise of the access rights provided for herein.

4.105.9Lands of Other Property Owners.

If any part of the Connecting Transmission Owner’s Attachment Facilities and/or System Upgrade Facilities and/or System Deliverability Upgrades is to be installed on or adjacent to
property owned by persons other than Developer or Connecting Transmission Owner, the
Connecting Transmission Owner shall at Developer’sNYSEG or TrAILCo, TrAILCo shall at its own expense use efforts, similar in nature and extent to those that it typically undertakes for its own or affiliated generationtransmission, including use of its eminent domain authority, and to the extent consistent with state law, to procure from such persons any rights of use, licenses,
rights of way and easements that are necessary to construct, operate, maintain, test, inspect,
replace or remove the Connecting Transmission Owner’s Attachment Facilities and/or System
Upgrade Facilities and/or System Deliverability Upgrades upon such property. NYSEG shall
cooperate with TrAILCo’s efforts under this Article 5.9.

4.115.10Permits.

NYISO, Connecting Transmission Owner and the DeveloperTrAILCo and NYSEG shall
cooperate with each other in good faith in obtaining all permits, licenses and authorizations that
are necessary to accomplish the interconnection in compliance with Applicable Laws and
Regulations. With respect to this paragraph, Connecting Transmission OwnerTrAILCo shall
provide permitting assistance to the DeveloperNYSEG comparable to that provided to the
Connecting Transmission OwnerTrAILCo’s own, or an Affiliate’s, generation, if any. or
transmission facilities, if any, provided that NYSEG shall pay TrAILCo’s costs in providing
such permitting assistance. With respect to this paragraph, NYSEG shall provide permitting
assistance to TrAILCo comparable to that provided to NYSEG’s own, or an Affiliate’s,

generation or transmission facilities, if any, provided that TrAILCo shall pay NYSEG’s costs in providing such permitting assistance.

5.11Tax Status; Non‐Jurisdictional Entities.

2.7Early Construction of Base Case Facilities.

Developer may request Connecting Transmission Owner to construct, and Connecting Transmission Owner shall construct, subject to a binding cost allocation agreement reached in accordance with Attachment S to the NYISO OATT, including Section 25.8.7 thereof, using
Reasonable Efforts to accommodate Developer’s In-Service Date, all or any portion of any
System Upgrade Facilities or System Deliverability Upgrades required for Developer to be
interconnected to the New York State Transmission System which are included in the Base Case of the Class Year Interconnection Facilities Study for the Developer, and which also are required to be constructed for another Developer, but where such construction is not scheduled to be
completed in time to achieve Developer’s In-Service Date.

4.11.15.11.1SuspensionTax Status.

Developer reserves the right, upon written notice to Connecting Transmission Owner and
NYISO, to suspend at any time all work by Connecting Transmission Owner associated with the
construction and installation of Connecting Transmission Owner’s Attachment Facilities and/or
System Upgrade Facilities and/or System Deliverability Upgrades required for only that
Developer under this Agreement with the condition that the New York State Transmission
System shall be left in a safe and reliable condition in accordance with Good Utility Practice and
the safety and reliability criteria of Connecting Transmission Owner and NYISO. In such event,
Developer shall be responsible for all reasonable and necessary costs and/or obligations in
accordance with Attachment S to the NYISO OATT including those which Connecting
Transmission Owner (i) has incurred pursuant to this Agreement prior to the suspension and (ii)
incurs in suspending such work, including any costs incurred to perform such work as may be
necessary to ensure the safety of persons and property and the integrity of the New York State
Transmission System during such suspension and, if applicable, any costs incurred in connection
with the cancellation or suspension of material, equipment and labor contracts which Connecting
Transmission Owner cannot reasonably avoid; provided, however, that prior to canceling or
suspending any such material, equipment or labor contract, Connecting Transmission Owner
shall obtain Developer’s authorization to do so.

Each Party shall cooperate with the other Parties to maintain the other Parties’ tax status.

Nothing in this Agreement is intended to adversely affect the tax status of any Party, including the status of the NYISO.

Connecting Transmission Owner shall invoice Developer for such costs pursuant to

Article 12 and shall use due diligence to minimize its costs. In the event Developer suspends

work by Connecting Transmission Owner required under this Agreement pursuant to this Article

5.16, and has not requested Connecting Transmission Owner to recommence the work required under this Agreement on or before the expiration of three (3) years following commencement of such suspension, this Agreement shall be deemed terminated. The three-year period shall begin on the date the suspension is requested, or the date of the written notice to Connecting
Transmission Owner and NYISO, if no effective date is specified.

4.125.12Taxes.

4.12.15.12.1DeveloperTrAILCo Payments Not Taxable.

The Developer and Connecting Transmission OwnerNYSEG and TrAILCo intend that all payments or property transfers made by Developer to Connecting Transmission Owner for
theTrAILCo to NYSEG for the procurement, construction and installation of the Connecting Transmission Owner’s Attachment Facilities and theNYSEG System Upgrade Facilities and the System Deliverability Upgrades, shall be non-taxablenon‐taxable, either as contributions to
capital, or as an advance, in accordance with the Internal Revenue Code and any applicable state income tax laws and shall not be taxable as contributions in aid of construction or otherwise
under the Internal Revenue Code and any applicable state income tax laws.

4.12.25.12.2Representations and Covenants.

In accordance with IRS Notice 2001-82 and IRS Notice 88-129, Developeras applicable,
TrAILCo represents and covenants that (i) ownership of the electricity generated at the Large
Generating Facilitytransmitted at the Point of Interconnection will pass to another party prior to
the transmission of the electricity on the New York State Transmission System, (ii) for income
tax purposes, the amount of any payments and the cost of any property transferred to the
Connecting Transmission Owner for the Connecting Transmission Owner’s Attachment
Facilities will be capitalized by Developer as an intangible asset and recovered using the straight-
line method over a useful life of twenty (20) years, and (iii) any portion of the Connecting
Transmission Owner’s Attachment Facilities that is a “dual-use intertie,” within the meaning of
IRS Notice 88-129, is reasonably expected to carry only a de minimis amount of electricity in the
direction of the Large Generating Facility. For this purpose, “de minimis amount” means no
more than 5 percent of the total power flows in both directions, calculated in accordance with the
“5 percent test” set forth in IRS Notice 88-129. This is not intended to be an exclusive list of the
relevant conditions that must be met to conform to IRS requirements for non-taxable treatment.

. NYSEG At Connecting Transmission Owner’s request, Developer shall provide

Connecting Transmission Owner with a report from an independent engineer confirming its

representation in clause (iii), above. Connecting Transmission Owner represents and covenants
that the cost of the Connecting Transmission Owner’s AttachmentNYSEG System Upgrade
Facilities, paid for by DeveloperTrAILCo, will have no net effect on the base upon which rates
are determined.

4.12.35.12.3 Indemnification for the Cost Consequences of Current Tax

Liability Imposed Upon the Connecting Transmission OwnerNYSEG.

Notwithstanding Article 5.17.1, Developer5.12.1, TrAILCo shall protect, indemnify and
hold harmless Connecting Transmission OwnerNYSEG from the cost consequences of any
current tax liability imposed against Connecting Transmission OwnerNYSEG as the result of
payments or property transfers made by Developer to Connecting Transmission OwnerTrAILCo
to NYSEG under this Agreement, as well as any interest and penalties, other than interest and
penalties attributable to any delay caused by Connecting Transmission OwnerNYSEG.

Connecting Transmission OwnerNYSEG shall not include a gross-upgross‐up for the cost
consequences of any current tax liability in the amounts it charges DeveloperTrAILCo under this
Agreement unless (i) Connecting Transmission OwnerNYSEG has determined, in good faith,
that the payments or property transfers made by Developer to Connecting Transmission
OwnerTrAILCo to NYSEG should be reported as income subject to taxation or (ii) any
Governmental Authority directs Connecting Transmission OwnerNYSEG to report payments or
property as income subject to taxation; provided, however, that Connecting Transmission
OwnerNYSEG may require DeveloperTrAILCo to provide security, in a form reasonably

acceptable to Connecting Transmission OwnerNYSEG (such as a parental guarantee or a letter
of credit), in an amount equal to the cost consequences of any current tax liability under this
Article 5.17. Developer5.12. TrAILCo shall reimburse Connecting Transmission
OwnerNYSEG for such costs on a fully grossed-upgrossed‐up basis, in accordance with Article

5.17.45.12.4, within thirty (30) Calendar Days of receiving written notification from Connecting
Transmission OwnerNYSEG of the amount due, including detail about how the amount was
calculated.

This indemnification obligation shall terminate at the earlier of (1) the expiration of the ten-yearten‐year testing period and the applicable statute of limitation, as it may be extended by the Connecting Transmission OwnerNYSEG upon request of the IRS, to keep these years open for audit or adjustment, or (2) the occurrence of a subsequent taxable event and the payment of any related indemnification obligations as contemplated by this Article 5.175.12.

4.12.45.12.4Tax Gross-UpGross‐Up Amount.

DeveloperTrAILCo’s liability for the cost consequences of any current tax liability under
this Article 5.175.12 shall be calculated on a fully grossed-up basis. Except as may otherwise be
agreed to by the partiesParties, this means that DeveloperTrAILCo will pay Connecting
Transmission OwnerNYSEG, in addition to the amount paid for the Attachment Facilities
andNYSEG System Upgrade Facilities and System Deliverability Upgrades, an amount equal to

(1) the current taxes imposed on Connecting Transmission OwnerNYSEG (“Current Taxes”) on
the excess of (a) the gross income realized by Connecting Transmission OwnerNYSEG as a
result of payments or property transfers made by Developer to Connecting Transmission

OwnerTrAILCo to NYSEG under this Agreement (without regard to any payments under this Article 5.175.12) (the “Gross Income Amount”) over (b) the present value of future tax
deductions for depreciation that will be available as a result of such payments or property
transfers (the “Present Value Depreciation Amount”), plus (2) an additional amount sufficient to permit the Connecting Transmission OwnerNYSEG to receive and retain, after the payment of all Current Taxes, an amount equal to the net amount described in clause (1).

For this purpose, (i) Current Taxes shall be computed based on Connecting Transmission
OwnerNYSEG’s composite federal and state tax rates at the time the payments or property
transfers are received and Connecting Transmission OwnerNYSEG will be treated as being
subject to tax at the highest marginal rates in effect at that time (the “Current Tax Rate”), and (ii)
the Present Value Depreciation Amount shall be computed by discounting Connecting
Transmission OwnerNYSEG’s anticipated tax depreciation deductions as a result of such
payments or property transfers by Connecting Transmission OwnerNYSEG’s current weighted
average cost of capital. Thus, the formula for calculating DeveloperTrAILCo’s liability to
Connecting Transmission OwnerNYSEG pursuant to this Article 5.17.45.12.4 can be expressed
as follows: (Current Tax Rate x (Gross Income Amount -‐ Present Value of Tax
Depreciation))/(1 -‐ Current Tax Rate). Developer’s estimated tax liability in the event taxes are
imposed shall be stated in Appendix A, Attachment Facilities and System Upgrade Facilities and
System Deliverability Upgrades.

4.12.55.12.5 Private Letter Ruling or Change or Clarification of Law.

At DeveloperTrAILCo’s request and expense, Connecting Transmission OwnerNYSEG
shall file with the IRS a request for a private letter ruling as to whether any property transferred
39

or sums paid, or to be paid, by Developer to Connecting Transmission OwnerTrAILCo to

NYSEG under this Agreement are subject to federal income taxation. DeveloperTrAILCo will
prepare the initial draft of the request for a private letter ruling, and will certify under penalties of
perjury that all facts represented in such request are true and accurate to the best of
DeveloperTrAILCo’s knowledge. Connecting Transmission Owner and DeveloperNYSEG and
TrAILCo shall cooperate in good faith with respect to the submission of such request.

Connecting Transmission OwnerNYSEG shall keep DeveloperTrAILCo fully informed
of the status of such request for a private letter ruling and shall execute either a privacy act
waiver or a limited power of attorney, in a form acceptable to the IRS, that authorizes
DeveloperTrAILCo to participate in all discussions with the IRS regarding such request for a
private letter ruling. Connecting Transmission OwnerNYSEG shall allow DeveloperTrAILCo to
attend all meetings with IRS officials about the request and shall permit DeveloperTrAILCo to
prepare the initial drafts of any follow-upfollow‐up letters in connection with the request.

4.12.65.12.6Subsequent Taxable Events.

If, within 10 years from the date on which the relevant Connecting Transmission Owner
AttachmentNYSEG System Upgrade Facilities are placed in service, (i) DeveloperTrAILCo
Breaches the covenants contained in Article 5.17.25.12.2, or (ii) a “disqualification event” occurs
within the meaning of IRS Notice 88-129, or (iii) this Agreement terminates and Connecting
Transmission OwnerNYSEG retains ownership of the Attachment Facilities andNYSEG System
Upgrade Facilities and System Deliverability Upgrades, the Developer, TrAILCo shall pay a tax
gross-upgross‐up for the cost consequences of any current tax liability imposed on Connecting

Transmission OwnerNYSEG, calculated using the methodology described in Article

5.17.45.12.4 and in accordance with IRS Notice 90-‐60.

4.12.75.12.7Contests.

In the event any Governmental Authority determines that Connecting Transmission

OwnerNYSEG’s receipt of payments or property constitutes income that is subject to taxation,
Connecting Transmission OwnerNYSEG shall notify DeveloperTrAILCo, in writing, within
thirty (30) Calendar Days of receiving notification of such determination by a Governmental
Authority. Upon the timely written request by DeveloperTrAILCo and at DeveloperTrAILCo’s
sole expense, Connecting Transmission OwnerNYSEG may appeal, protest, seek abatement of,
or otherwise oppose such determination. Upon DeveloperTrAILCo’s written request and sole
expense, Connecting Transmission OwnerNYSEG may file a claim for refund with respect to
any taxes paid under this Article 5.175.12, whether or not it has received such a determination.
Connecting Transmission OwnerNYSEG reserves the right to make all decisions with regard to
the prosecution of such appeal, protest, abatement or other contest, including the selection of

counsel and compromise or settlement of the claim, but Connecting Transmission OwnerNYSEG shall keep DeveloperTrAILCo informed, shall consider in good faith suggestions from
DeveloperTrAILCo about the conduct of the contest, and shall reasonably permit Developer or an DeveloperTrAILCo or an TrAILCo representative to attend contest proceedings.

DeveloperTrAILCo shall pay to Connecting Transmission OwnerNYSEG on a periodic
basis, as invoiced by Connecting Transmission Owner, Connecting Transmission
OwnerNYSEG, NYSEG’s documented reasonable costs of prosecuting such appeal, protest,
abatement or other contest. At any time during the contest, Connecting Transmission
41

OwnerNYSEG may agree to a settlement either with DeveloperTrAILCo’s consent or after
obtaining written advice from nationally-recognized tax counsel, selected by Connecting
Transmission OwnerNYSEG, but reasonably acceptable to DeveloperTrAILCo, that the
proposed settlement represents a reasonable settlement given the hazards of litigation.
DeveloperTrAILCo’s obligation shall be based on the amount of the settlement agreed to by
DeveloperTrAILCo, or if a higher amount, so much of the settlement that is supported by the
written advice from nationally-recognized tax counsel selected under the terms of the preceding
sentence. The settlement amount shall be calculated on a fully grossed-upgrossed‐up basis to
cover any related cost consequences of the current tax liability. Any settlement without
DeveloperTrAILCo’s consent or such written advice will relieve DeveloperTrAILCo from any
obligation to indemnify Connecting Transmission OwnerNYSEG for the tax at issue in the
contest.

4.12.85.12.8Refund.

In the event that (a) a private letter ruling is issued to Connecting Transmission

OwnerNYSEG which holds that any amount paid or the value of any property transferred by

Developer to Connecting Transmission OwnerTrAILCo to NYSEG under the terms of this

Agreement is not subject to federal income taxation, (b) any legislative change or administrative
announcement, notice, ruling or other determination makes it reasonably clear to Connecting
Transmission OwnerNYSEG in good faith that any amount paid or the value of any property
transferred by Developer to Connecting Transmission OwnerTrAILCo to NYSEG under the
terms of this Agreement is not taxable to Connecting Transmission OwnerNYSEG, (c) any

abatement, appeal, protest, or other contest results in a determination that any payments or

transfers made by Developer to Connecting Transmission OwnerTrAILCo to NYSEG are not subject to federal income tax, or (d) if Connecting Transmission OwnerNYSEG receives a
refund from any taxing authority for any overpayment of tax attributable to any payment or
property transfer made by Developer to Connecting Transmission OwnerTrAILCo to NYSEG pursuant to this Agreement, Connecting Transmission OwnerNYSEG shall promptly refund to DeveloperTrAILCo the following:

(i) Any payment made by DeveloperTrAILCo under this Article 5.175.12 for taxes
that is attributable to the amount determined to be non-taxable, together with interest thereon,

(ii) Interest on any amounts paid by Developer to Connecting Transmission

OwnerTrAILCo to NYSEG for such taxes which Connecting Transmission OwnerNYSEG did not submit to the taxing authority, calculated in accordance with the methodology set forth in FERC’s regulations at 18 C.F.R. §35.19a(a)(2)(iii) from the date payment was made by
DeveloperTrAILCo to the date Connecting Transmission OwnerNYSEG refunds such payment to DeveloperTrAILCo, and

(iii) With respect to any such taxes paid by Connecting Transmission OwnerNYSEG,
any refund or credit Connecting Transmission OwnerNYSEG receives or to which it may be
entitled from any Governmental Authority, interest (or that portion thereof attributable to the
payment described in clause (i), above) owed to the Connecting Transmission OwnerNYSEG for
such overpayment of taxes (including any reduction in interest otherwise payable by Connecting
Transmission OwnerNYSEG to any Governmental Authority resulting from an offset or credit);

provided, however, that Connecting Transmission OwnerNYSEG will remit such amount

promptly to DeveloperTrAILCo only after and to the extent that Connecting Transmission

OwnerNYSEG has received a tax refund, credit or offset from any Governmental Authority for any applicable overpayment of income tax related to the Connecting Transmission Owner’s AttachmentNYSEG System Upgrade Facilities.

The intent of this provision is to leave both the DeveloperTrAILCo and Connecting
Transmission OwnerNYSEG, to the extent practicable, in the event that no taxes are due with respect to any payment for Attachment Facilities andNYSEG System Upgrade Facilities and
System Deliverability Upgrades hereunder, in the same position they would have been in had no such tax payments been made.

4.13Taxes Other Than Income Taxes .

Upon the timely request by DeveloperTrAILCo, and at DeveloperTrAILCo’s sole

expense, Connecting Transmission OwnerNYSEG shall appeal, protest, seek abatement of, or
otherwise contest any tax (other than federal or state income tax) asserted or assessed against
Connecting Transmission OwnerNYSEG for which DeveloperTrAILCo may be required to
reimburse Connecting Transmission OwnerNYSEG under the terms of this Agreement.
DeveloperTrAILCo shall pay to Connecting Transmission OwnerNYSEG on a periodic basis, as
invoiced by Connecting Transmission Owner, Connecting Transmission OwnerNYSEG,
NYSEG’s documented reasonable costs of prosecuting such appeal, protest, abatement, or other
contest. Developer and Connecting Transmission OwnerTrAILCo and NYSEG shall cooperate
in good faith with respect to any such contest. Unless the payment of such taxes is a prerequisite
to an appeal or abatement or cannot be deferred, no amount shall be payable by Developer to
44

Connecting Transmission OwnerTrAILCo to NYSEG for such taxes until they are assessed by a final, non-appealablenonappealable order by any court or agency of competent jurisdiction. In the event that a tax payment is withheld and ultimately due and payable after appeal,
DeveloperTrAILCo will be responsible for all taxes, interest and penalties, other than penalties attributable to any delay caused by Connecting Transmission OwnerNYSEG.

2.8Tax Status; Non-Jurisdictional Entities.

2.8.1Tax Status.

Each Party shall cooperate with the other Parties to maintain the other Parties’ tax status.
Nothing in this Agreement is intended to adversely affect the tax status of any Party including
the status of NYISO, or the status of any Connecting Transmission Owner with respect to the
issuance of bonds including, but not limited to, Local Furnishing Bonds. Notwithstanding any
other provisions of this Agreement, LIPA, NYPA and Consolidated Edison Company of New
York, Inc. shall not be required to comply with any provisions of this Agreement that would

result in the loss of tax-exempt status of any of their Tax-Exempt Bonds or impair their ability to issue future tax-exempt obligations. For purposes of this provision, Tax-Exempt Bonds shall
include the obligations of the Long Island Power Authority, NYPA and Consolidated Edison
Company of New York, Inc., the interest on which is not included in gross income under the
Internal Revenue Code.

2.8.2Non-Jurisdictional Entities.

LIPA and NYPA do not waive their exemptions, pursuant to Section 201(f) of the FPA,

from Commission jurisdiction with respect to the Commission’s exercise of the FPA’s general

ratemaking authority.

4.145.13Modification.

4.14.15.13.1General.

Either the Developer or Connecting Transmission OwnerNYSEG or TrAILCo may

undertake modifications to its facilities covered by this Agreement. If either the Developer or
Connecting Transmission OwnerNYSEG or TrAILCo plans to undertake a modification that
reasonably may be expected to affect the other Party’s facilities, that Party shall provide to the
other Party, and to NYISO, sufficient information regarding such modification so that the other

Party and NYISO may evaluate the potential impact of such modification prior to

commencement of the work. Such information shall be deemed to be Confidential Information
hereunder and shall include information concerning the timing of such modifications and
whether such modifications are expected to interrupt the flowtransmission of electricity from the
Large Generating Facilityat the Point(s) of Interconnection. The Party desiring to perform such
work shall provide the relevant drawings, plans, and specifications to the other Party and NYISO
at least ninety (90) Calendar Days in advance of the commencement of the work or such shorter
period upon which the Parties may agree, which agreement shall not unreasonably be withheld,
conditioned or delayed.

In the case of Large GeneratingTransmission Facility modifications, the Party making

such modification shall provide reasonable prior notice of such modifications to the other Parties.
For modifications that do not require DeveloperTrAILCo or NYSEG to submit an
Interconnection Request, the NYISO shall, in consultation with the other Parties, shall use
Reasonable Efforts to provide, within sixty (60) Calendar Days (or such other time as the Parties
may agree), an estimate of any additional modifications to the New York State Transmission
System, Connecting Transmission Owner’s Attachment Facilities or System Upgrade Facilities
or System Deliverability Upgrades necessitated by such Developer modification and a good faith
estimate of the costs thereof. The DeveloperTrAILCo shall be responsible for the cost of any
such additional modifications, including the cost of studying the impact of the
DeveloperTrAILCo modification.

4.14.25.13.2Standards.

Any additions, modifications, or replacements made to a Party’s facilities shall be

designed, constructed and operated in accordance with this Agreement, NYISO requirements and Good Utility Practice.

Except as provided in Appendix A or C, (a) any additions, modifications, or replacements

made to TrAILCo’s facilities shall be designed, constructed and operated in accordance with this Agreement, applicable NYISO and PJM requirements, and Good Utility Practice, and (b) any
additions, modifications, or replacements made to NYSEG’s facilities shall be designed,
constructed and operated in accordance with this Agreement, applicable NYISO requirements, and Good Utility Practice.

4.14.35.13.3Modification Costs.

DeveloperTrAILCo shall not be assigned the costs of any additions, modifications, or
replacements that Connecting Transmission OwnerNYSEG makes to the Connecting
Transmission Owner’s AttachmentSystem Upgrade Facilities owned by NYSEG, or the New
York State Transmission System to facilitate the interconnection of a third party to the
Connecting Transmission Owner’s AttachmentSystem Upgrade Facilities owned by NYSEG, or
the New York State Transmission System, or to provide Transmission Service to a third party
under the NYISO OATTTariff, except in accordance with the cost allocation procedures in
Attachment S of the NYISO OATT. DeveloperTariff or as approved by the appropriate
Governmental Authority. TrAILCo shall be responsible for the costs of any additions,
modifications, or replacements to the Developer AttachmentSystem Upgrade Facilities owned by
TrAILCo, that may be necessary to maintain or upgrade such Developer AttachmentTrAILCo
System Upgrade Facilities consistent with Applicable Laws and Regulations, Applicable
Reliability Standards or Good Utility Practice except if such additions, modifications, or
replacements are required as a result of modifications made by NYSEG to its System Upgrade
Facilities, in which case NYSEG shall be responsible for such costs.

ARTICLE 5.ARTICLE 6. TESTING AND INSPECTION

5.16.1 Pre-Commercial Operation Date Testing and Modifications.

Prior to the Commercial Operation Date, the Connecting Transmission OwnerTrAILCo
shall test the Connecting Transmission Owner’s Attachment Facilities andits System Upgrade
Facilities, and System Deliverability Upgrades and DeveloperNYSEG shall test the Large
Generating Facility and the Developer Attachmentits System Upgrade Facilities to ensure their
safe and reliable operation. Similar testing may be required after initial operation. Developer

and Connecting Transmission OwnerNYSEG and TrAILCo shall each make any modifications
to its facilities that are found to be necessary as a result of such testing. DeveloperTrAILCo shall
bear the cost of all such testing and modifications. Developer shall generate to its and NYSEG’s
System Upgrade Facilities. NYSEG and TrAILCo shall transmit test energy at the Large
Generating Facilitythrough the Point(s) of Interconnection only if it has arranged for the
injectiontransmission of such test energy in accordance with TrAILCo, PJM, NYSEG and
NYISO procedures.

5.26.2 Post-Commercial Operation Date Testing and Modifications.

Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each at its
own expense perform routine inspection and testing of its facilities and equipment in accordance
with Good Utility Practice and Applicable Reliability Standards as may be necessary to ensure
the continued interconnection of the Large Generating FacilityMainesburg Substation with the
New York State Transmission System in a safe and reliable manner. Developer and Connecting
Transmission OwnerNYSEG and TrAILCo shall each have the right, upon advance written

notice, to require reasonable additional testing of the other Party’s facilities, at the requesting Party’s expense, as may be in accordance with Good Utility Practice.

5.36.3 Right to Observe Testing.

Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each notify the other Party, and the NYISO, in advance of its performance of tests of its Attachmentthe
System Upgrade Facilities. The other Party, and the NYISO, shall each have the right, at its own expense, to observe such testing.

5.46.4 Right to Inspect.

Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each have
the right, but shall have no obligation to: (i) observe the other Party’s tests and/or inspection of
any of its System Protection Facilities and other protective equipment, including Power System
Stabilizers; (ii) review the settings of the other Party’s System Protection Facilities and other
protective equipment; and (iii) review the other Party’s maintenance records relative to the
AttachmentSystem Upgrade Facilities, the System Protection Facilities and other protective
equipment. NYISO shall have thesethe same rights of inspection as to the facilities and
equipment of Developer and Connecting Transmission OwnerNYSEG and TrAILCo. A Party
may exercise these rights from time to time as it deems necessary upon reasonable notice to the
other Party. The exercise or non-exercise by a Party of any such rights shall not be construed as
an endorsement or confirmation of any element or condition of the AttachmentSystem Upgrade
Facilities, or the System Protection Facilities or other protective equipment or the operation
thereof, or as a warranty as to the fitness, safety, desirability, or reliability of same. Any
information that a Party obtains through the exercise of any of its rights under this Article 6.4
shall be treated in accordance with Article 22 of this Agreement and Attachment F to the NYISO
OATT.

ARTICLE 6.ARTICLE 7. METERING

6.17.1 General.

Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each comply
with applicable requirements of the NYISO and the New York Public Service Commission when
exercising its rights and fulfilling its responsibilities under this Article 7. Unless otherwise

agreed by the Connecting Transmission Owner and NYISO approved meter service provider and
Developer, the Connecting Transmission OwnerTrAILCo and NYSEG, TrAILCo shall install
Metering Equipment at the PointPoint(s) of Interconnection prior to any operation of the Large
GeneratingTransmission Facility and shall own, operate, test and maintain such Metering
Equipment. Net power flows including MW and MVAR, MWHR and loss profile data to and
from the Large Generating FacilityWatercure Line shall be measured at the PointPoint(s) of
Interconnection. Connecting Transmission OwnerTrAILCo shall provide metering quantities, in
analog and/or digital form, as required, to Developer or NYISOthe other Parties, upon request.
Where the Point of Interconnection for the Large Generating Facility is other than the generator
terminal, the Developer shall also provide gross MW and MVAR quantities at the generator
terminal. DeveloperTrAILCo shall bear all reasonable documented costs associated with the
purchase, installation, operation, testing and maintenance of the Metering Equipment.

6.27.2 Check Meters.

DeveloperNYSEG, at its option and expense, may install and operate, on its premises and on its side of the Point of Interconnection, one or more check meters to check Connecting
Transmission OwnerTrAILCo’s meters. Such check meters shall be for check purposes only and shall not be used for the measurement of power flows for purposes of this Agreement, except as provided in Article 7.47.4 below. The check meters shall be subject at all reasonable times to
inspection and examination by Connecting Transmission OwnerTrAILCo or its designee. The
installation, operation and maintenance thereof shall be performed entirely by DeveloperNYSEG in accordance with Good Utility Practice.

6.37.3 Standards.

Connecting Transmission OwnerTrAILCo shall install, calibrate, and test revenue quality Metering Equipment including potential transformers and current transformers in accordance with applicable ANSI and PSCGovernmental Authority standards as detailed in the NYISO
Control Center Communications Manual and in the NYISO Revenue Metering Requirements Manual, including applicable NYISO requirements.

6.47.4 Testing of Metering Equipment.

Connecting Transmission OwnerTrAILCo shall inspect and test all of itsthe Metering
Equipment upon installation and at least once every two (2) years thereafter. If requested to do
so by NYISO or Developer, Connecting Transmission Owner shall, at Developer’s expense,
inspect or test Metering Equipment more frequently than every two (2) years. Connecting
Transmission Owner in accordance with applicable NYISO requirements. TrAILCo shall give
reasonable notice of the time when any inspection or test shall take place, and Developer and
NYISONYSEG may have representatives present at the test or inspection. If at any time
Metering Equipment is found to be inaccurate or defective, it shall be adjusted, repaired or
replaced at Developerthe owner’s expense, in order to provide accurate metering, unless the
inaccuracy or defect is due to Connecting Transmission OwnerTrAILCo’s failure to maintain,
then Connecting Transmission OwnerTrAILCo shall pay. If Metering Equipment fails to
register, or if the measurement made by Metering Equipment during a test varies by more than

two percent from the measurement made by the standard meter used in the test, Connecting

Transmission Ownerthe range set forth in the applicable NYISO or PJM standard, TrAILCo shall
adjust the measurements by correcting all measurements for the period during which Metering

Equipment was in error by using Developerthe other Party’s check meters, if installed. If no

such check meters are installed or if the period cannot be reasonably ascertained, the adjustment shall be for the period immediately preceding the test of the Metering Equipment equal to onehalf the time from the date of the last previous test of the Metering Equipment. The NYISO
shall reservereserves the right to review all associated metering equipment installation on the
Developer’s or Connecting Transmission Ownerinspect all Metering Equipment installed on
NYSEG’s or TrAILCo’s property at any timereasonable times and upon reasonable notice to
NYSEG or TrAILCo, as applicable.

6.57.5 Metering Data.

At DeveloperSubject to the provisions of Appendix C, and at TrAILCo’s expense, the

metered data shall be telemetered to one or more locations designated by Connecting

Transmission Owner, Developer and NYISOTrAILCo and NYSEG. Such telemetered data shall be used, under normal operating conditions, as the official measurement of the amount of energy delivered from the Large GeneratingWatercure Line to the Point of Interconnection and/or from the Transmission Facility to the Point of Interconnection.

ARTICLE 7.ARTICLE 8. COMMUNICATIONS

7.18.1 DeveloperTrAILCo Obligations.

In accordance with applicable NYISO requirements, Developer shalland subject to

Appendix C, TrAILCo shall install and maintain satisfactory operating communications with
Connecting Transmission OwnerNYSEG and NYISO. DeveloperTrAILCo shall provide
standard voice line, dedicated voice line and facsimile communications at its Large Generating

Facility control room or central dispatch facility through use of either the public telephone

system, or a voice communications system that does not rely on the public telephone system.
Developer shall also provide thethe equipment, labor and contract services and dedicated data
circuit(s) necessary to provide DeveloperTrAILCo data to Connecting Transmission
OwnerNYSEG and NYISO as set forth in Appendix D heretoin accordance with applicable
NYISO and NYSEG requirements. The data circuit(s) shall extend from the Large
GeneratingTransmission Facility to the location(s) specified by Connecting Transmission Owner
and NYISONYSEG. Any required repair, replacement or maintenance of such communications
equipment shall be performed by DeveloperTrAILCo. Operational communications shall be
activated and maintained under, but not be limited to, the following events: system paralleling or
separation, scheduled and unscheduled shutdownsoutages, equipment clearances, and hourly and
daily load data. Prior to the Commercial Operation Date, satisfactory communications shall be
in place, in accordance with this Article 8.1 and Paragraph B(2) of Appendix C.

7.28.2 Remote Terminal Unit.

Prior to the Initial Synchronization Date of the Large Generating Facility, aA Remote
Terminal Unit, or equivalent data collection and transfer equipment acceptable to the Parties,
shall be installed by Developer, or by Connecting Transmission Owner at DeveloperTrAILCo at
TrAILCo’s expense, in accordance with Section B(2) of Appendix C, to gather accumulated and
instantaneous data to be telemetered to the location(s) designated by Connecting Transmission
Owner and NYISO through use of a dedicated point-to-point data circuit(s) as indicated in

Article 8.1. The communication protocol for the data circuit(s) shall be specified by Connecting Transmission Owner and NYISO. Instantaneous bi-directional analog real power and reactive power flow information must be telemetered directly to the location(s) specified by Connecting Transmission Owner and NYISO.

TrAILCo. Each Party will promptly advise the appropriate 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 that other Party. The Party owning such equipment shall correct such error or malfunction as soon as reasonably feasible.

7.38.3 No Annexation.

ARTICLE 8.ARTICLE 9. OPERATIONS

8.19.1 General.

Each Party shall comply with Applicable Laws and Regulations and Applicable

Reliability Standards. Each Party shall provide to the other Parties all information that may

reasonably be required by the other Parties to comply with Applicable Laws and Regulations and Applicable Reliability Standards.

8.29.2 NYISO and Connecting Transmission OwnerNYSEG Obligations.

Connecting Transmission Owner and NYISO shall cause the New York State

Transmission System and the Connecting Transmission Owner’s Attachment Facilities to be operated, maintained and controlled in a safe and reliable manner in accordance with this
Agreement and the NYISO Tariffs. Connecting Transmission Owner and NYISO may provide operating instructions to Developer consistent with this Agreement, NYISO procedures and Connecting Transmission Owner’s operating protocols and procedures as they may change from time to time. Connecting Transmission Owner and NYISO will consider changes to their
respective operating protocols and procedures proposed by Developer.

NYSEG shall, at its own expense, operate, maintain and control the System Upgrade

Facilities owned by NYSEG in a safe and reliable manner in accordance with this Agreement and the NYISO Tariff.

8.39.3 DeveloperTrAILCo Obligations.

DeveloperTrAILCo shall, at its own expense, operate, maintain and control the Large
Generating Facility and the Developer AttachmentSystem Upgrade Facilities owned by
TrAILCo, including the Transmission Facility, in a safe and reliable manner and in accordance
with this Agreement. Developer shall operate the Large Generating Facility and the Developer
Attachment Facilities in accordance with NYISO and Connecting Transmission Owner
requirements, as such requirements are set forth or referenced in Appendix C hereto. Appendix
C will be modified to reflect changes to the requirements as they may change from time to time.
Any Party may request that the appropriate other Party or Parties provide copies of the
requirements set forth or referenced in Appendix C hereto. and the PJM Tariff.

8.49.4 Start-Up and Synchronization.

Consistent with the mutually acceptable procedures of the Developer and Connecting

Transmission Owner, the Developer isNYSEG and TrAILCo and the NYISO and PJM, NYSEG and TrAILCo are responsible for the proper synchronization of the Large Generating
FacilityMainesburg Substation to the New York State Transmission System in accordance with NYISO and Connecting Transmission Owner procedures and requirements.

2.9Real and Reactive Power Control.

2.9.1Power Factor Design Criteria.

Developer shall design the Large Generating Facility to maintain an effective power

delivery at demonstrated maximum net capability at the Point of Interconnection at a power

factor within the range established by the Connecting Transmission Owner on a comparable

basis, until NYISO has established different requirements that apply to all generators in the New York Control Area on a comparable basis.

8.59.5 [Reserved]

The Developer shall design and maintain the plant auxiliary systems to operate safely throughout the entire real and reactive power design range.

The Connecting Transmission Owner shall not unreasonably restrict or condition the reactive power production or absorption of the Large Generating Facility in accordance with Good Utility Practice.

2.9.2Voltage Schedules.

Once the Developer has synchronized the Large Generating Facility with the New York
State Transmission System, NYISO shall require Developer to operate the Large Generating
Facility to produce or absorb reactive power within the design capability of the Large Generating
Facility set forth in Article 9.5.1 (Power Factor Design Criteria). NYISO’s voltage schedules
shall treat all sources of reactive power in the New York Control Area in an equitable and not
unduly discriminatory manner. NYISO shall exercise Reasonable Efforts to provide Developer
with such schedules in accordance with NYISO procedures, and may make changes to such
schedules as necessary to maintain the reliability of the New York State Transmission System.
Developer shall operate the Large Generating Facility to maintain the specified output voltage or
power factor at the Point of Interconnection within the design capability of the Large Generating
Facility set forth in Article 9.5.1 (Power Factor Design Criteria) as directed by the Connecting
Transmission Owner’s System Operator or the NYISO. If Developer is unable to maintain the
specified voltage or power factor, it shall promptly notify NYISO.

2.9.3Payment for Reactive Power.

NYISO shall pay Developer for reactive power or voltage support service that Developer
provides from the Large Generating Facility in accordance with the provisions of Rate Schedule

2 of the NYISO Services Tariff.

2.9.4Governors and Regulators.

Whenever the Large Generating Facility is operated in parallel with the New York State
Transmission System, the turbine speed governors and automatic voltage regulators shall be in
automatic operation at all times. If the Large Generating Facility’s speed governors or automatic
voltage regulators are not capable of such automatic operation, the Developer shall immediately
notify NYISO, or its designated representative, and ensure that such Large Generating Facility’s
real and reactive power are within the design capability of the Large Generating Facility’s

generating unit(s) and steady state stability limits and NYISO system operating (thermal, voltage and transient stability) limits. Developer shall not cause its Large Generating Facility to
disconnect automatically or instantaneously from the New York State Transmission System or trip any generating unit comprising the Large Generating Facility for an under or over frequency condition unless the abnormal frequency condition persists for a time period beyond the limits set forth in ANSI/IEEE Standard C37.106, or such other standard as applied to other generators in the New York Control Area on a comparable basis.

8.69.6 Outages and Interruptions.

8.6.19.6.1 Outages.

8.6.1.1 Outage Authority and Coordination.

8.6.1.29.6.1.1 NYSEG Developer and Connecting Transmission Owner

may each, in accordance with applicable NYISO procedures and Good Utility Practice, and in
coordination with the other PartyTrAILCo remove from service any of its respective System
Upgrade Facilities that may impact TrAILCo’s facilities as necessary to perform maintenance or testing or to install or replace equipment. TrAILCo may, in accordance with applicable PJM
procedures and Good Utility Practice, and in coordination with NYSEG, remove from service
any of its respective Attachment Facilities or System Upgrade Facilities and System
Deliverability Upgrades that may impact the other PartyNYSEG’s facilities as necessary to
perform maintenance or testing or to install or replace equipment. Absent an Emergency, or
Emergency State, the Party scheduling a removal of such facility(ies) from service will use
Reasonable Efforts to schedule such removal on a date and time mutually acceptable to both the Developer and the Connecting Transmission OwnerNYSEG and TrAILCo. In all circumstances either Party planning to remove such facility(ies) from service shall use Reasonable Efforts to
minimize the effect on the other Party of such removal.

8.6.1.3 Outage Schedules.

8.6.1.49.6.1.2 NYSEG The Connecting Transmission Owner shall post

scheduled outages of its transmission facilities on the NYISO OASIS. Developer shall submit its
planned maintenance schedules for the Large Generating Facility to Connecting Transmission
Owner and NYISO for a minimum of a rolling thirty-six month period. Developer shall update
its planned maintenance schedules as necessary. NYISO may direct, or the Connecting
Transmission Owner may request, Developer to reschedule its maintenance as necessary to

maintain the reliability of the New York State Transmission System. Compensation to

Developer for any additional direct costs that the Developer incurs as a result of rescheduling

maintenance, including any additional overtime, breaking of maintenance contracts or other costs above and beyond the cost the Developer would have incurred absent the request to reschedule maintenance, shall be in accordance with the NYISO OATT. Developer will not be eligible to receive compensation, if during the twelve (12) months prior to the date of the scheduled
maintenance, the Developer had modified its schedule of maintenance activities other than at the direction of the NYISO or request of the Connecting Transmission Owner., and TrAILCo shall post scheduled outages of its transmission facilities on the PJM OASIS.

8.6.1.5 Outage Restoration.

8.6.1.69.6.1.3 If an outage on the Attachment Facilities or System

Upgrade Facilities or System Deliverability Upgrades of the Connecting Transmission Owner or
Developerof TrAILCo or NYSEG adversely affects the other Party’s operations or facilities, the
Party that owns the facility that is out of service shall use Reasonable Efforts to promptly restore
such facility(ies) to a normal operating condition consistent with the nature of the outage. The
Party that owns the facility that is out of service shall provide the other Party, and to the NYISO,
or PJM, as applicable, to the extent such information is known, information on the nature of the
Emergency or Emergency State, an estimated time of restoration, and any corrective actions

required. Initial verbal notice shall be followed up as soon as practicable with written notice explaining the nature of the outage.

8.6.29.6.2 Interruption of Service. If required by Good Utility Practice or
Applicable Reliability Standards to do so, the NYISO or Connecting Transmission

OwnerTrAILCo may require DeveloperNYSEG to interrupt or reduce productiontransmission of
electricity if such production of electricity could adversely affect the ability of NYISO and
Connecting Transmission Owner to perform such activities as are necessary to safely and
reliably operate and maintain the New York State Transmission Systemover the Watercure Line,
and NYSEG may require TrAILCo to interrupt or reduce transmission of electricity over the
Transmission Facility if either TrAILCo, NYSEG or the NYISO deems the interruption of such
transmission of electricity to be necessary: (a) for purposes of Good Utility Practice, to protect a

Party’s facilities from physical damage or to prevent injury or damage to persons or property; or

(b) to comply with Applicable Reliability Standards. The following provisions shall apply to any interruption or reduction permitted under this Article 9.6.2:

8.6.2.19.6.2.1 The interruption or reduction shall continue only for so

long as reasonably necessary to: (a) protect its facilities from physical damage or to prevent injury or damage to persons or property under Good Utility Practice; or (b) comply with Applicable Reliability Standards;

8.6.2.29.6.2.2 Any such interruption or reduction shall be made on an

equitable, non-discriminatory basis with respect to all generatingtransmission facilities directly connected to that part of the PJM Transmission System and New York State Transmission System owned, respectively, by TrAILCo or NYSEG;

8.6.2.39.6.2.3 When the interruption or reduction must be made under

circumstances which do not allow for advance notice, NYISO or Connecting Transmission
OwnerTrAILCo or NYSEG, as applicable, shall notify Developerthe other Party (and the
NYISO) by telephone as soon as practicable of the reasons for the curtailment, interruption, or

reduction, and, if known, its expected duration. Telephone notification shall be followed by written notification as soon as practicable;

8.6.2.49.6.2.4 Except during the existence of an Emergency or

Emergency State, when the interruption or reduction can be scheduled without advance notice, NYISO or Connecting Transmission OwnerTrAILCo or NYSEG, as applicable, shall notify Developerthe other Party (and the NYISO) in advance regarding the timing of such scheduling and further notify Developerthe other Party (and the NYISO) of the expected duration. NYISO or Connecting Transmission OwnerTrAILCo and NYSEG, as applicable, shall coordinate with eachthe other Party (and the DeveloperNYISO) using Good Utility Practice to schedule the interruption or reduction during periods of least impact to the Developer, the Connecting Transmission Owner and theboth NYSEG and TrAILCo, the New York State Transmission System, and the PJM Transmission System; and

8.6.2.59.6.2.5 The Parties shall cooperate and coordinate with each other,

and the PJM and NYISO, to the extent necessary in order to restore the Large Generating Facility, AttachmentWatercure Line, System Upgrade Facilities, and the New York State Transmission System, and the PJM Transmission System to their normal operating state, consistent with system conditions and Good Utility Practice, and in accordance with the directives of the NYISO and PJM.

2.9.5Under-Frequency and Over Frequency Conditions.

The New York State Transmission System is designed to automatically activate a load-
shed program as required by the NPCC in the event of an under-frequency system disturbance.
Developer shall implement under-frequency and over-frequency relay set points for the Large
Generating Facility as required by the NPCC to ensure “ride through” capability of the New
York State Transmission System. Large Generating Facility response to frequency deviations of
predetermined magnitudes, both under-frequency and over-frequency deviations, shall be studied
and coordinated with the NYISO and Connecting Transmission Owner in accordance with Good
Utility Practice. The term “ride through” as used herein shall mean the ability of a Generating
Facility to stay connected to and synchronized with the New York State Transmission System
during system disturbances within a range of under-frequency and over-frequency conditions, in
accordance with Good Utility Practice and with NPCC Regional Reliability Reference Directory
# 12.

8.6.39.6.3 System Protection and Other Control Requirements.

8.6.3.19.6.3.1 System Protection Facilities. DeveloperTrAILCo shall

install, operate and maintain, at its expense, install, operate and maintainany System Protection
Facilities as a part of the Large Generating Facility or Developer Attachment Facilities.
Connecting Transmission Ownerthat may be required on TrAILCo’s facilities, including its
System Upgrade Facilities, as a result of the interconnection of the Transmission Facility to the
New York State Transmission System. NYSEG shall install at DeveloperTrAILCo’s expense
any System Protection Facilities that may be required on the Connecting Transmission Owner
AttachmentNYSEG’s facilities, including its System Upgrade Facilities or the New York State
Transmission System as a result of the interconnection of the Large GeneratingTransmission
Facility and Developer Attachment Facilitiesto the New York State Transmission System.

8.6.3.29.6.3.2 The protection facilities of both the Developer and

Connecting Transmission OwnerNYSEG and TrAILCo shall be designed and coordinated with
other systems in accordance with Good Utility Practice and Applicable Reliability Standards.

8.6.3.39.6.3.3The Developer and Connecting Transmission

OwnerNYSEG and TrAILCo shall each be responsible for protection of its respective facilities consistent with Good Utility Practice and Applicable Reliability Standards.

8.6.3.49.6.3.4 The protective relay design of the Developer and

Connecting Transmission OwnerNYSEG and TrAILCo shall each incorporate the necessary test
switches to perform the tests required in Article 6 of this Agreement. 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/or the tripping of the
DeveloperNYSEG’s Large Generating FacilityWatercure Line or the System Upgrade Facilities.

8.6.3.59.6.3.5 The Developer and Connecting Transmission

OwnerNYSEG and TrAILCo will each test, operate and maintain System Protection Facilities in accordance with Good Utility Practice and applicable ReliabilityFirst and NPCC criteria.

8.6.3.69.6.3.6 Prior to the In-Service Date, and again prior to the

Commercial Operation Date, the Developer and Connecting Transmission OwnerNYSEG and
TrAILCo shall each perform, or their agents shall perform, a complete calibration test and
functional trip test of the System Protection Facilities. At intervals suggested by Good Utility
Practice and following any apparent malfunction of the System Protection Facilities, the
Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each perform both
calibration and functional trip tests of itsthe System Protection Facilities in a manner and at
intervals consistent with TrAILCo’s standard practice for performing such tests. 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.

8.6.49.6.4 Requirements for Protection.

In compliance with applicable ReliabilityFirst and NPCC requirements, and Good Utility
Practice, DeveloperNYSEG and TrAILCo, as applicable, shall provide, install, own, and
maintain relays, circuit breakers and all other devices necessary to remove any fault contribution
of the Large Generating FacilityWatercure Line or the Mainesburg Substation to any short circuit
occurring on the New York State Transmission System or the PJM Transmission System not
otherwise isolated by Connecting Transmission Ownerthe other Party’s equipment, such that the
removal of the fault contribution shall be coordinated with the protective requirements of the
New York State Transmission System or the PJM Transmission System. Such protective
equipment shall include, without limitation, a disconnecting device or switch with load-
interrupting capability located between the Large GeneratingTransmission Facility and the New
York State Transmission System at a site selected upon mutual agreement (not to be
unreasonably withheld, conditioned or delayed) of the Developer and Connecting Transmission
Owner. Developer shall be responsible for protection of the Large Generating Facility and
Developer’s other equipment from such conditions as negative sequence currents, over- or
under-frequency, sudden load rejection, over- or under-voltage, and generator loss-of-field.
Developer shall be solely responsible to disconnect the Large Generating Facility and
Developer’s other equipment if conditions on the New York State Transmission System could
adversely affect the Large Generating Facility.NYSEG and TrAILCo.

8.6.59.6.5 Power Quality.

Neither the facilities of DeveloperNYSEG nor the facilities of Connecting Transmission
OwnerTrAILCo shall cause excessive voltage flicker nor introduce excessive distortion to the
sinusoidal voltage or current waves as defined by ANSI Standard C84.1-1989, in accordance
with IEEE Standard 519, or any applicable superseding electric industry standard. In the event
of a conflict between ANSI Standard C84.1-1989, or any applicable superseding electric industry
standard, ANSI Standard C84.1-1989, or the applicable superseding electric industry standard,
shall control.

8.79.7 Switching and Tagging Rules.

The Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each
provide the other Party a copy of its switching and tagging rules that are applicable to the other
Party’s activities. Such switching and tagging rules shall be developed on a nondiscriminatory
basis. The Parties shall comply with applicable switching and tagging rules, as amended from
time to time, in obtaining clearances for work or for switching operations on equipment.

2.10Use of Attachment Facilities by Third Parties.

2.10.1Purpose of Attachment Facilities.

Except as may be required by Applicable Laws and Regulations, or as otherwise agreed to among the Parties, the Attachment Facilities shall be constructed for the sole purpose of interconnecting the Large Generating Facility to the New York State Transmission System and shall be used for no other purpose.

8.89.8 [Reserved]

2.10.2Third Party Users.

If required by Applicable Laws and Regulations or if the Parties mutually agree, such
agreement not to be unreasonably withheld, to allow one or more third parties to use the
Connecting Transmission Owner’s Attachment Facilities, or any part thereof, Developer will be

entitled to compensation for the capital expenses it incurred in connection with the Attachment
Facilities based upon the pro rata use of the Attachment Facilities by Connecting Transmission
Owner, all third party users, and Developer, in accordance with Applicable Laws and
Regulations or upon some other mutually-agreed upon methodology. In addition, cost
responsibility for ongoing costs, including operation and maintenance costs associated with the
Attachment Facilities, will be allocated between Developer and any third party users based upon
the pro rata use of the Attachment Facilities by Connecting Transmission Owner, all third party
users, and Developer, in accordance with Applicable Laws and Regulations or upon some other
mutually agreed upon methodology. If the issue of such compensation or allocation cannot be
resolved through such negotiations, it shall be submitted to FERC for resolution.

8.99.9 Disturbance Analysis Data Exchange.

The Parties will cooperate with one another and the NYISO in the analysis of

disturbances to either the Large Generating Facility Mainesburg Substation, the PJM

Transmission System, the Watercure Line, or the New York State Transmission System by

gathering and providing access to any information relating to any disturbance, including

information from disturbance recording equipment, protective relay targets, breaker operations
and sequence of events records, and any disturbance information required by Good Utility
Practice.

9.10 Emergency Operations

9.10.1NYSEG does not have the right nor the capability to open breakers at the

9.10.2 TrAILCo agrees that it shall promptly take the actions specified in a

directive issued by NYSEG as indicated in Articles 9.10 and 9.10.1 above in a safe and efficient manner and consistent with Good Utility Practice.

ARTICLE 9.ARTICLE 10. MAINTENANCE

9.110.1Connecting Transmission OwnerTrAILCo Obligations.

Connecting Transmission OwnerTrAILCo shall maintain its transmission facilities and Attachmentthe Mainesburg Substation and System Upgrade Facilities owned by TrAILCo in a safe and reliable manner and in accordance with this Agreement.

9.210.2DeveloperNYSEG Obligations.

DeveloperNYSEG shall maintain its Large Generating Facility and Attachmentthe

Watercure Line and System Upgrade Facilities owned by NYSEG in a safe and reliable manner and in accordance with this Agreement.

9.310.3Coordination.

The Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall confer
regularly to coordinate the planning, scheduling and performance of preventive and corrective

maintenance on the Large Generating Facility and the AttachmentMainesburg Substation,

Watercure Line, and the System Upgrade Facilities. The Developer and Connecting

Transmission OwnerNYSEG and TrAILCo shall keep NYISO fully informed of the preventive and corrective maintenance that is planned, and shall schedule all such maintenance in
accordance with NYISO procedures.

9.410.4Secondary Systems.

The Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each
cooperate with the other in the inspection, maintenance, and testing of control or power circuits
that operate below 600 volts, AC or DC, including, but not limited to, any hardware, control or
protective devices, cables, conductors, electric raceways, secondary equipment panels,
transducers, batteries, chargers, and voltage and current transformers that directly affect the
operation of Developer or Connecting Transmission OwnerNYSEG or TrAILCo’s facilities and
equipment which may reasonably be expected to impact the other Party. The Developer and
Connecting Transmission OwnerNYSEG and TrAILCo shall each provide advance notice to the
other Party, and to NYISO, before undertaking any work on such circuits, especially on electrical
circuits involving circuit breaker trip and close contacts, current transformers, or potential
transformers.

9.510.5Operating and Maintenance Expenses.

overheads, associated with: (1) owning, operating, maintaining, repairing, and replacing

Developer Attachment Facilities; and (2) operation, maintenance, repair and replacement of

Connecting Transmission Owner’s Attachmentits System Upgrade Facilities. The Connecting
Transmission OwnerNYSEG shall be entitled to the recovery of incremental operating and
maintenance expenses that it incurs associated with System Upgrade Facilities and System
Deliverability Upgrades, if and to the extent provided for under Attachment S to the NYISO
OATT.

ARTICLE 10.ARTICLE 11. PERFORMANCE OBLIGATION

2.11Developer Attachment Facilities.

Developer shall design, procure, construct, install, own and/or control the Developer Attachment Facilities described in Appendix A hereto, at its sole expense.

2.12 Connecting Transmission Owner’s Attachment Facilities.

Connecting Transmission Owner shall design, procure, construct, install, own and/or control the Connecting Transmission Owner’s Attachment Facilities described in Appendix A hereto, at the sole expense of the Developer.

2.13 System Upgrade Facilities and System Deliverability Upgrades.

Connecting Transmission Owner shall design, procure, construct, install, and own the

System Upgrade Facilities and System Deliverability Upgrades described in Appendix A hereto. The responsibility of the Developer for costs related to System Upgrade Facilities and System
Deliverability Upgrades shall be determined in accordance with the provisions of Attachment S to the NYISO OATT.

2.14Special Provisions for Affected Systems.

For the re-payment of amounts advanced to Affected System Operator for System

Upgrade Facilities or System Deliverability Upgrades, the Developer and Affected System

Operator shall enter into an agreement that provides for such re-payment, but only if

responsibility for the cost of such System Upgrade Facilities or System Deliverability Upgrades
is not to be allocated in accordance with Attachment S to the NYISO OATT. The agreement

shall specify the terms governing payments to be made by the Developer to the Affected System Operator as well as the re-payment by the Affected System Operator.

2.15Provision of Security.

At least thirty (30) Calendar Days prior to the commencement of the procurement,

installation, or construction of a discrete portion of a Connecting Transmission Owner’s

Attachment Facilities, Developer shall provide Connecting Transmission Owner, at Developer’s option, a guarantee, a surety bond, letter of credit or other form of security that is reasonably acceptable to Connecting Transmission Owner and is consistent with the Uniform Commercial Code of the jurisdiction identified in Article 14.2.1 of this Agreement. Such security for
payment shall be in an amount sufficient to cover the cost for the Developer’s share of
constructing, procuring and installing the applicable portion of Connecting Transmission
Owner’s Attachment Facilities, and shall be reduced on a dollar-for-dollar basis for payments made to Connecting Transmission Owner for these purposes.

In addition:

11.5.1 The guarantee must be made by an entity that meets the commercially

reasonable creditworthiness requirements of Connecting Transmission Owner, and contains

terms and conditions that guarantee payment of any amount that may be due from Developer, up to an agreed-to maximum amount.

11.5.2 The letter of credit must be issued by a financial institution reasonably

acceptable to Connecting Transmission Owner and must specify a reasonable expiration date.

11.5.3 The surety bond must be issued by an insurer reasonably acceptable to Connecting Transmission Owner and must specify a reasonable expiration date.

11.5.4 Attachment S to the NYISO OATT shall govern the Security that Developer provides for System Upgrade Facilities and System Deliverability Upgrades.

10.111.1 Developer Compensation for Emergency Services.

If, during an Emergency State, the DeveloperNYSEG provides services at the request or direction of the NYISO or Connecting Transmission Owner, the DeveloperTrAILCo, NYSEG will be compensated for such services in accordance with the NYISO Services Tariff. If, during an Emergency State, TrAILCo provides services at the request or direction of NYSEG, TrAILCo will be compensated for such services.

10.211.2Line Outage Costs.

Notwithstanding anything in the NYISO OATTApplicable Laws and Regulations to the
contrary, the Connecting Transmission OwnerNYSEG may propose to recover line outage costs

associated with the installation of Connecting Transmission Owner’s Attachment Facilities

orTrAILCo System Upgrade Facilities or System Deliverability Upgrades on a case-by-case

basis.on a case‐by‐case basis; provided, however, NYSEG shall not have the right to recover line
outage costs from TrAILCo if such line outage costs are caused by NYSEG’s Default under this
Agreement.

ARTICLE 11.ARTICLE 12. INVOICE

11.112.1General.

The Developer and Connecting Transmission OwnerEach Party shall each submit to the
otheranother Party, on a monthly basis, invoices of amounts due for the preceding month, as
applicable. Each invoice shall state the month to which the invoice applies and fully describe the
services and equipment provided. The Developer and Connecting Transmission OwnerParties
may discharge mutual debts and payment obligations due and owing to each other on the same
date through netting, in which case all amounts one Party owes to the other Party under this
Agreement, including interest payments or credits, shall be netted so that only the net amount
remaining due shall be paid by the owing Party. The allocation of any costs, expenses, or
charges to a Party under this Agreement shall not in any way limit the right of each Party to
collect such costs or charges in rates approved by the appropriate Governmental Authority.

2.16Final Invoice.

Within six months after completion of the construction of the Connecting Transmission
Owner’s Attachment Facilities and the System Upgrade Facilities and System Deliverability
Upgrades, Connecting Transmission Owner shall provide an invoice of the final cost of the
construction of the Connecting Transmission Owner’s Attachment Facilities and the System
Upgrade Facilities and System Deliverability Upgrades, determined in accordance with
Attachment S to the NYISO OATT, and shall set forth such costs in sufficient detail to enable

Developer to compare the actual costs with the estimates and to ascertain deviations, if any, from
the cost estimates. Connecting Transmission Owner shall refund to Developer any amount by
which the actual payment by Developer for estimated costs exceeds the actual costs of
construction within thirty (30) Calendar Days of the issuance of such final construction invoice.

11.212.2Payment.

Invoices shall be rendered to the paying Party at the address specified in Appendix FE

11.312.3Disputes.

In the event of a billing dispute between Connecting Transmission Owner and Developer,
Connecting Transmission Ownerthe Parties, each Party shall continue to perform under this
Agreement as long as Developer: (i) continues to make all payments not in dispute; and (ii) pays
to Connecting Transmission Owner or into an independent escrow account the portion of the
invoice in dispute, pending resolution of such dispute. If Developer fails to meet these two
requirements for continuation of service, then Connecting Transmission Owner may provide
notice to Developer of a Default pursuant toand such dispute shall be subject to resolution in
accordance with Article 1727. Within thirty (30) Calendar Days after the resolution of the
dispute, the Party that owes money to the other Party shall pay the amount due with interest
calculated in accord with the methodology set forth in FERC’s Regulations at 18 C.F.R. §

35.19a(a)(2)(iii).

ARTICLE 12.ARTICLE 13. EMERGENCIES

12.113.1Obligations.

Each PartySubject to Article 9.10, NYSEG shall comply with the Emergency State

procedures of NYISO, the applicableApplicable Reliability Councils, and Applicable Laws and Regulations, and any emergency procedures agreed to by the NYISO Operating Committee.(b) TrAILCo shall comply with the Emergency State procedures of PJM, the applicable Reliability Councils, and Applicable Laws and Regulations. TrAILCo and NYSEG agree to coordinate with NYISO and PJM to develop procedures that will address the operations of the Watercure Line and the Mainesburg Substation during emergency conditions.

12.213.2Notice.

NYISO or, as applicable, Connecting Transmission OwnerEach Party shall notify

Developerthe other Parties promptly when it becomes aware of an Emergency or Emergency
State that affects the Connecting Transmission Owner’s Attachment Facilities or the New York
State Transmission System that, or may reasonably be expected to affect Developer’s operation
of the Large Generating Facility or the Developer’s Attachment Facilities. Developer shall
notify NYISO and Connecting Transmission Owner promptly when it becomes aware of an
Emergency State that affects the Large Generating Facility or the Developer Attachment
Facilities that may reasonably be expected to affect, the Transmission Facility, the Watercure
Line, the System Upgrade Facilities, the New York State Transmission System, or the
ConnectingPJM Transmission Owner’s Attachment FacilitiesSystem. To the extent information
is known, the notification shall describe the Emergency or Emergency State, the extent of the
damage or deficiency, the expected effect on the operation of DeveloperNYSEG’s or Connecting

Transmission OwnerTrAILCo’s facilities and operations, its anticipated duration and the corrective action taken and/or to be taken. The initial notice shall be followed as soon as practicable with written notice.

12.313.3Immediate Action.

Unless, in Developer’s reasonable judgment, immediate action is required, Developer

shall obtain the consent of Connecting Transmission Owner, such consent to not be unreasonably
withheld, prior to performing any manual switching operations at the Large Generating Facility
or the Developer Attachment Facilities in response to an Emergency State either declared by
NYISO, Connecting Transmission Owner or otherwise regarding New York State Transmission
System.

Subject to Article 9.10, or unless, in NYSEG’s reasonable judgment, immediate action is

required, NYSEG shall obtain the consent of TrAILCo, such consent to not be unreasonably

withheld, or delayed, prior to performing any manual switching operations at the Watercure Line or Systems Upgrade Facilities owned by NYSEG in response to an Emergency or Emergency
State either declared by NYISO, TrAILCo or otherwise regarding New York State Transmission System. Unless, in TrAILCo’s reasonable judgment, immediate action is required, TrAILCo
shall obtain the consent of NYSEG, such consent not to be unreasonably withheld, prior to
performing any manual switching operations at the TrAILCo System Upgrade Facilities in
response to an Emergency or Emergency State either declared by PJM, or TrAILCo, or otherwise regarding the PJM Transmission System.

12.413.4NYISO and Connecting Transmission Owner AuthorityTrAILCo and

NYSEGAuthority.

2.16.1General.

NYISO or Connecting Transmission OwnerSubject to Article 9.10 and consistent with
Good Utility Practice, TrAILCo or NYSEG, as the case may be, may take whatever actions with

regard to the New York State Transmission System or, the ConnectingPJM Transmission

Owner’s AttachmentSystem, and the System Upgrade Facilities owned by that Party, as it deems necessary during an Emergency or Emergency State in order to: (i) preserve public health and safety,; (ii) preserve the reliability of the PJM Transmission System and the New York State Transmission System or the Connecting Transmission Owner’s Attachment Facilities,, as
applicable; (iii) limit or prevent damage,; and (iv) expedite restoration of service. NYSEG and TrAILCo shall use Reasonable Efforts to assist the other in such actions.

NYISO and Connecting Transmission Owner shall use Reasonable Efforts to minimize
the effect of such actions or inactions on the Large Generating Facility or the Developer
Attachment Facilities. NYISO or Connecting Transmission Owner may, on the basis of
technical considerations, require the Large Generating Facility to mitigate an Emergency State
by taking actions necessary and limited in scope to remedy the Emergency State, including, but
not limited to, directing Developer to shut-down, start-up, increase or decrease the real or
reactive power output of the Large Generating Facility; implementing a reduction or
disconnection pursuant to Article 13.4.2; directing the Developer to assist with blackstart (if
available) or restoration efforts; or altering the outage schedules of the Large Generating Facility and the Developer Attachment Facilities. Developer shall comply with all of the NYISO and
Connecting Transmission Owner’s operating instructions concerning Large Generating Facility
real power and reactive power output within the manufacturer’s design limitations of the Large
Generating Facility’s equipment that is in service and physically available for operation at the
time, in compliance with Applicable Laws and Regulations.

2.16.2Reduction and Disconnection.

NYISO or Connecting Transmission Owner may reduce []

Interconnection Service or disconnect the Large Generating Facility or the Developer

Attachment Facilities, when such reduction or disconnection is necessary under Good Utility
Practice due to an Emergency State. These rights are separate and distinct from any right of
Curtailment of NYISO pursuant to the NYISO OATT. When NYISO or Connecting
Transmission Owner can schedule the reduction or disconnection in advance, NYISO or
Connecting Transmission Owner shall notify Developer of the reasons, timing and expected
duration of the reduction or disconnection. NYISO or Connecting Transmission Owner shall
coordinate with the Developer using Good Utility Practice to schedule the reduction or
disconnection during periods of least impact to the Developer and the New York State
Transmission System. Any reduction or disconnection shall continue only for so long as
reasonably necessary under Good Utility Practice. The Parties shall cooperate with each other to
restore the Large Generating Facility, the Attachment Facilities, and the New York State

Transmission System to their normal operating state as soon as practicable consistent with Good Utility Practice.

2.17Developer Authority.

Consistent with Good Utility Practice and this Agreement, the Developer may take

whatever actions or inactions with regard to the Large Generating Facility or the Developer

Attachment Facilities during an Emergency State in order to (i) preserve public health and safety,
(ii) preserve the reliability of the Large Generating Facility or the Developer Attachment
Facilities, (iii) limit or prevent damage, and (iv) expedite restoration of service. Developer shall
use Reasonable Efforts to minimize the effect of such actions or inactions on the New York State
Transmission System and the Connecting Transmission Owner’s Attachment Facilities. NYISO
and Connecting Transmission Owner shall use Reasonable Efforts to assist Developer in such
actions.

12.513.5Limited Liability.

Except as otherwise provided in Article 11.6 of this Agreement, noNo Party shall be

liable to anotherany other Party for any action it takes in responding to an Emergency or

Emergency State so long as such action is made in good faith and is consistent with Good Utility Practice and the NYISO Tariffs.

ARTICLE 14. REGULATORY REQUIREMENTS AND GOVERNING LAW

12.614.1Regulatory Requirements.

Each Party’s obligations under this Agreement shall be subject to its receipt of any

required approval or certificate from one or more Governmental Authorities in the form and

substance satisfactory to the applying Party, or the Party making any required filings with, or

providing notice to, such Governmental Authorities, and the expiration of any time period

associated therewith. Each Party shall in good faith seek and use its Reasonable Efforts to obtain
such other approvals. Nothing in this Agreement shall require DeveloperTrAILCo or NYSEG to
take any action that could result in its inability to obtain, or its loss of, status or exemption under

the Federal Power Act or, the Public Utility Holding Company Act of 2005 or the Public Utility Regulatory Policies Act of 1978, as amended.

12.714.2Governing Law.

12.7.114.2.1The validity, interpretation and performance of this Agreement and

each of its provisions shall be governed by the laws of the stateState of New York, without

regard to its conflicts of law principles.

12.7.214.2.2This Agreement is subject to all Applicable Laws and Regulations.

12.7.314.2.3Each Party expressly reserves the right to seek changes in, appeal,

or otherwise contest any lawslaw, orders, rules, or regulations of a Governmental Authority.

ARTICLE 13.ARTICLE 15. NOTICES

13.115.1General.

A Party may change the notice information in this Agreement by giving five (5) Business Days written notice prior to the effective date of the change.

13.215.2Billings and Payments.

Billings and payments shall be sent to the addresses set out in Appendix FE hereto.

13.315.3Alternative Forms of Notice.

13.415.4Operations and Maintenance Notice.

Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each notify
the other Party, and NYISO, in writing of the identity of the person(s) that it designates as the
point(s) of contact with respect to the implementation of Articles 9 and 10 of this Agreement.

ARTICLE 14.ARTICLE 16. FORCE MAJEURE

14.116.1Force Majeure.

14.1.116.1.1Economic hardship is not considered a Force Majeure event.

14.1.216.1.216.1.2 A Party shall not be responsible or liable, or deemed, in

Default with respect to any obligation hereunder, (including obligations under Article 4 of this
Agreement) , other than the obligation to pay money when due, to the extent the Party is
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 Parties in
writing or by telephone as soon as reasonably possible after the occurrence of the cause relied
upon. Telephone notices given pursuant to this Article 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.

ARTICLE 15.ARTICLE 17. DEFAULT

15.117.1Default.

15.1.117.1.1General.

No Breach 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 Parties. Upon a Breach, the non-Breaching Parties shall give written
notice of such to the Breaching Party. The Breaching Party shall have thirty (30) Calendar Days
from receipt of the Breach notice within which to cure such Breach; provided however, if such
Breach is not capable of cure within thirty (30) Calendar Days, the Breaching Party shall
commence such cure within thirty (30) Calendar Days after notice and continuously and
diligently complete such cure within ninety (90) Calendar Days from receipt of the Breach
notice; and, if cured within such time, the Breach specified in such notice shall cease to exist.

15.1.217.1.2Right to Terminate.

If a Breach is not cured as provided in this Article 17, or if a Breach is not capable of

being cured within the period provided for herein, the non-Breaching Parties acting together shall
thereafter have the right to declare a Default and terminate this Agreement by written notice at

Article 3. INDEMNITY, CONSEQUENTIAL DAMAGES AND INSURANCE

ARTICLE 18. INDEMNITY, LIMITATION OF LIABILITY, AND INSURANCE

15.218.1Indemnity.

Each PartyExcept as provided in Appendix C, NYSEG or TrAILCo (the “Indemnifying
Party”) shall at all times indemnify, defend, and save harmless, as applicable, the other Parties
(each an “Indemnified Party”) from, any and all damages, losses, claims, including claims and
actions relating to injury to or death of any person or damage to property, the alleged violation of
any Environmental Law, or the release or threatened release of any Hazardous Substance,
demand, suits, recoveries, costs and expenses, court costs, attorney fees, and all other obligations
by or to third parties,Losses arising out of or resulting from (i) the IndemnifiedIndemnifying’s
Party’s performance of its obligationsBreach, negligence, or intentional wrongdoing under this
Agreement on behalf of the Indemnifying Party, except in cases where the Indemnifying Party
can demonstrate that the Loss of the Indemnified Party was caused (in whole or in part) by the
gross negligence or intentional wrongdoing of the Indemnified Party or (ii) the violation by the
Indemnifying Party of any Environmental Law or the release by the Indemnifying Party of any
Hazardous Substance. TrAILCo shall provide an additional, independent indemnity to NYSEG
in accordance with the provisions of Section C(10) of Appendix C, and any conflict between that

provision of Appendix C and this Article 18 shall be resolved in favor of Section C(10) of Appendix C.

15.2.118.1.1Indemnified Party.

If a Party is entitled to indemnification under this Article 18 as a result of a claim by a third party, and the indemnifying Party fails, after notice and reasonable opportunity to proceed under Article 18.1.3, to assume the defense of such claim, such Indemnified Party may at the expense of the Indemnifying Party contest, settle or consent to the entry of any judgment with respect to, or pay in full, such claim.

15.2.218.1.2Indemnifying Party.

If an Indemnifying Party is obligated to indemnify and hold any Indemnified Party

harmless under this Article 18, the amount owing to the Indemnified Party shall be the amount of such Indemnified Party’s actual Loss, net of any insurance or other recovery.

15.2.318.1.3Indemnity Procedures.

Promptly after receipt by an Indemnified Party of any claim or notice of the

Except as stated below, the Indemnifying Party shall have the right to assume the defense
thereof with counsel designated by such Indemnifying Party and reasonably satisfactory to the

Indemnified Party. If the defendants in any such action include one or more Indemnified Parties
and the Indemnifying Party and if the Indemnified Party reasonably concludes that there may be
legal defenses available to it and/or other Indemnified Parties which are different from or
additional to those available to the Indemnifying Party, the Indemnified Party shall have the right
to select separate counsel to assert such legal defenses and to otherwise participate in the defense
of such action on its own behalf. In such instances, the Indemnifying Party shall only be
required to pay the fees and expenses of one additional attorney to represent an Indemnified
Party or Indemnified Parties having such differing or additional legal defenses.

15.318.2No Consequential DamagesLimitation of Liability.

15.3.118.2.1Other than the Liquidated Damages heretofore described and the

indemnity obligations set forth in Article 18.118.1, in no event shall any Party be liable under
82

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
another Party under separate agreement will not be considered to be special, indirect, incidental,
or consequential damages hereunder. The Parties expressly agree the damages that NYSEG may
seek to recover pursuant to Appendix C shall not be considered special, indirect, incidental,
consequential, or punitive damages whose recovery is limited by this Article 18.2.1.

18.2.2Nothing in this Agreement shall be construed to create or give rise to any

liability on the part of PJM, and the Parties expressly waive any claims that may arise against PJM under this Agreement.

18.2.3 The Parties acknowledge and understand that the signature of the

authorized officer of PJM on this Agreement is for the limited purpose of acknowledging that

15.418.3Insurance.

Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each, at its own expense, maintain in force throughout the period of this Agreement, and until released by the other Parties, the following minimum insurance coverages, with insurers authorized to do business in the state of New York:

15.4.118.3.1 Employers’ Liability and Workers’ Compensation Insurance

providing statutory benefits in accordance with the laws and regulations of New York State.

15.4.218.3.2 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

15.4.318.3.3 Comprehensive Automobile Liability Insurance for coverage of

owned and 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.

15.4.418.3.4 Excess Public Liability Insurance over and above the Employers’

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.

15.4.518.3.5 The Commercial General Liability Insurance, Comprehensive

Automobile Insurance and Excess Public Liability Insurance policies of Developer and

Connecting Transmission OwnerNYSEG and TrAILCo shall name the other Party, its parent,
associated and Affiliate 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) Calendar days advance written
notice to the Other Party Group prior to anniversary date of cancellation or any material change
in coverage or condition.

15.4.618.3.6The 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. Developer and Connecting Transmission OwnerNYSEG and TrAILCo shall each be responsible for its respective deductibles or retentions.

15.4.718.3.7 The Commercial General Liability Insurance, Comprehensive

Automobile Liability Insurance and Excess Public Liability Insurance policies, if written 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 Developer and Connecting Transmission
OwnerNYSEG and TrAILCo.

15.4.818.3.8 The requirements contained herein as to the types and limits of all

insurance to be maintained by the Developer and Connecting Transmission OwnerNYSEG and TrAILCo are not intended to and shall not in any manner, limit or qualify the liabilities and obligations assumed by those Parties under this Agreement.

15.4.918.3.9 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, Developer and Connecting Transmission
OwnerNYSEG and TrAILCo shall provide certification of all insurance required in this

Agreement, executed by each insurer or by an authorized representative of each insurer.

15.4.1018.3.10 Notwithstanding the foregoing, Developer and Connecting

Transmission OwnerNYSEG and TrAILCo may each self-insure to meet the minimum insurance
requirements of Articles 18.3.2 through 18.3.8 to the extent it maintains a self-insurance
program; provided that, such Party’s senior debt is rated at investment grade, or better, by
Standard & Poor’s and that its self-insurance program meets the minimum insurance
requirements of Articles 18.3.2 through 18.3.8. For any period of time that a Party’s senior 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 Articles 18.3.2
through 18.3.9. In the event that a Party is permitted to self-insure pursuant to this Article

18.3.10, it shall notify the other Party that it meets the requirements to self-insure and that its

self-insurance program meets the minimum insurance requirements in a manner consistent with that specified in Article 18.3.9.

15.4.1118.3.11Developer and Connecting Transmission OwnerNYSEG

and TrAILCo 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 16.ARTICLE 19. ASSIGNMENT

16.119.1Assignment.

This Agreement may be assigned by a Party only with the written consent of the other
PartiesParty; provided that a Party may assign this Agreement without the consent of the other

PartiesParty 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; provided further that a Party may assign this Agreement without the consent of
the other PartiesParty in connection with the sale, merger, restructuring, or transfer of a
substantial portion or all of its assets, including the Attachment Facilities it owns, so long as the
assignee in such a transaction directly assumes in writing all rights, duties and obligations arising
under this Agreement; and provided further that the Developer shall have the right to assign this
Agreement, without the consent of the NYISO or Connecting Transmission Owner, for collateral
security purposes to aid in providing financing for the Large Generating Facility, provided that
the Developer will promptly notify the NYISO and Connecting Transmission Owner of any such
assignment. Any financing arrangement entered into by the Developer pursuant to this Article
will provide that prior to or upon the exercise of the secured party’s, trustee’s or mortgagee’s
assignment rights pursuant to said arrangement, the secured creditor, the trustee or mortgagee
will notify the NYISO and Connecting Transmission Owner of the date and particulars of any
such exercise of assignment right(s) and will provide the NYISO and Connecting Transmission
Owner with proof that it meets the requirements of Articles 11.5 and 18.3. Any attempted
assignment that violates this Article 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.

ARTICLE 17.ARTICLE 20. SEVERABILITY

17.120.1Severability.

If any provision in this Agreement is finally determined to be invalid, void or

unenforceable by any court or other Governmental Authority having jurisdiction, such

determination shall not invalidate, void or make unenforceable any other provision, agreement or
covenant of this Agreement; provided that if the Developer (or any third party, but only if such
third party is not acting at the direction of the Connecting Transmission Owner) seeks and
obtains such a final determination with respect to any provision of the Alternate Option (Article

5.1.2), or the Negotiated Option (Article 5.1.4), then none of these provisions shall thereafter
have any force or effect and the rights and obligations of Developer and Connecting
Transmission Owner shall be governed solely by the Standard Option (Article 5.1.1)..

ARTICLE 18.ARTICLE 21. COMPARABILITY

18.121.1Comparability.

The Parties will comply with all applicable comparability and code of conduct laws, rules and regulations, as amended from time to time.

ARTICLE 19.ARTICLE 22. CONFIDENTIALITY

19.122.1Confidentiality.

Certain information exchanged by the Parties during the term of this Agreement shall
constitute confidential information (“Confidential Information”) and shall be subject to this
Article 22.

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

19.1.122.1.1Term.

During the term of this Agreement, and for a period of three (3) years after the expiration or termination of this Agreement, except as otherwise provided in this Article 2222, each Party shall hold in confidence and shall not disclose to any person Confidential Information.

19.1.222.1.2Confidential Information.

The following shall constitute Confidential Information: (1a) any non-public information that is treated as confidential by the disclosing Party and which the disclosing Party identifies as Confidential Information in writing at the time, or promptly after the time, of disclosure; or (2b) information designated as Confidential Information by the NYISO Code of Conduct contained in Attachment F to the NYISO OATT.

19.1.322.1.3Scope.

Confidential Information shall not include information that the receiving Party can

demonstrate: (1) is generally available to the public other than as a result of a disclosure by the
receiving Party; (2) was in the lawful possession of the receiving Party on a non-confidential
basis before receiving it from the disclosing Party; (3) was supplied to the receiving Party
without restriction by a third party, who, to the knowledge of the receiving Party after due

inquiry, was under no obligation to the disclosing Party to keep such information confidential;

(4) was independently developed by the receiving Party without reference to Confidential

Information of the disclosing Party; (5) is, or becomes, publicly known, through no wrongful act
or omission of the receiving Party or Breach of this Agreement; or (6) is required, in accordance
with Article 22.1.8 of this Agreement, Order of Disclosure, to be disclosed by any Governmental
Authority or is otherwise required to be disclosed by law or subpoena, or is necessary in any
legal proceeding establishing rights and obligations under this Agreement. Information
designated as Confidential Information will no longer be deemed confidential if the Party that
designated the information as confidential notifies the other Party that it no longer is
confidential.

19.1.422.1.4Release of Confidential Information.

No Party shall release or disclose Confidential Information to any other person, except to
its Affiliates (limited by FERC Standards of Conduct requirements), subcontractors, employees,
consultants, or to parties who may be considering providing financing to or equity participation
with DeveloperNYSEG, or to potential purchasers or assignees of a Party, on a need-to-know
basis in connection with this Agreement, unless such person has first been advised of the
confidentiality provisions of this Article 22 and has agreed to comply with such provisions.
Notwithstanding the foregoing, a Party providing Confidential Information to any person shall
remain primarily responsible for any release of Confidential Information in contravention of this
Article 22.

19.1.522.1.5Rights.

19.1.622.1.6No Warranties.

By providing Confidential Information, no Party makes any warranties or representations
as to its accuracy or completeness. In addition, by supplying Confidential Information, no Party
obligates itself to provide any particular information or Confidential Information to the other
Parties nor to enter into any further agreements or proceed with any other relationship or joint
venture.

19.1.722.1.7Standard of Care.

19.1.822.1.8Order of Disclosure.

If a court or a Government Authority or entity with the right, power, and apparent

authority to do so requests or requires any Party, by subpoena, oral deposition, interrogatories,

requests for production of documents, administrative order, or otherwise, to disclose Confidential
Information, that Party shall provide the other Parties with prompt notice of such request(s) or
requirement(s) so that the other Parties may seek an appropriate protective order or waive
compliance with the terms of this Agreement. Notwithstanding the absence of a protective order
or waiver, the Party may disclose such Confidential Information which, in the opinion of its
counsel, the Party is legally compelled to disclose. Each Party will use Reasonable Efforts to
obtain reliable assurance that confidential treatment will be accorded any Confidential
Information so furnished.

19.1.922.1.9Termination of Agreement.

19.1.1022.1.10Remedies.

exclusive remedy for the Breach of this Article 22, but shall be in addition to all other remedies
available at law or in equity. The Parties further acknowledge and agree that the covenants
contained herein are necessary for the protection of legitimate business interests and are
reasonable in scope. No Party, however, shall be liable for indirect, incidental, or consequential
or punitive damages of any nature or kind resulting from or arising in connection with this
Article 22.

19.1.1122.1.11 Disclosure to FERC, its Staff, or a State.

Notwithstanding anything in this Article 22 to the contrary, and pursuant to 18 C.F.R.
section 1b.20, if FERC or its staff, during the course of an investigation or otherwise, requests
information from one of the Parties that is otherwise required to be maintained in confidence
pursuant to this Agreement, or the NYISO OATT, the Party shall provide the requested
information to FERC or its staff, within the time provided for in the request for information. In
providing the information to FERC or its staff, the Party must, consistent with 18 C.F.R. section
388.112, request that the information be treated as confidential and non-public by FERC and its
staff and that the information be withheld from public disclosure. Parties are prohibited from
notifying the other Parties to this Agreement prior to the release of the Confidential Information
to the Commission or its staff. The Party shall notify the other Parties to the Agreement when it
is notified by FERC or its staff that a request to release Confidential Information has been
received by FERC, at which time the Parties may respond before such information would be
made public, pursuant to 18 C.F.R. section 388.112. Requests from a state regulatory body
conducting a confidential investigation shall be treated in a similar manner if consistent with the
applicable state rules and regulations. A Party shall not be liable for any losses, consequential or

otherwise, resulting from that Party divulging Confidential Information pursuant to a FERC or state regulatory body request under this paragraph.

19.1.1222.1.12

Except as otherwise expressly provided herein, no Party shall disclose Confidential

Information to any person not employed or retained by the Party possessing the Confidential

Information, 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, the NYISO OATT oron the NYISO Services Tariff. Prior to
any disclosures of a Party’s Confidential Information under this subparagraph, or if any third
party or Governmental Authority makes any request or demand for any of the information
described in this subparagraph, the disclosing Party 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.

ARTICLE 20.ARTICLE 23. ENVIRONMENTAL RELEASES

20.123.1Developer and Connecting Transmission OwnerNYSEG and

TrAILCo Notice.

Developer and Connecting Transmission OwnerSubject to reporting requirements that

may be imposed on NYSEG and TrAILCo under Applicable Laws and Regulations, NYSEG and
TrAILCo shall each notify the other Party, first orally and then in writing, of the release of any
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Hazardous Substances, any asbestos or lead abatement activities, or any type of remediation

activities related to the Large GeneratingTransmission Facility or the Attachment Facilities, each
of which may reasonably be expected to affect the other Party. TheSubject to reporting
requirements that may be imposed on NYSEG and TrAILCo under Applicable Laws and
Regulations, the notifying Party shall: (i) provide the notice as soon as practicable, provided
such Party makes a good faith effort to provide the notice no later than twenty-four hours after
such Party becomes aware of the occurrence; and (ii) promptly furnish to the other Party copies
of any publicly available reports filed with any Governmental Authorities addressing such
events.

ARTICLE 21.ARTICLE 24. INFORMATION REQUIREMENT[Reserved]

3.1Information Acquisition.

Connecting Transmission Owner and Developer shall each submit specific information regarding the electrical characteristics of their respective facilities to the other, and to NYISO, as described below and in accordance with Applicable Reliability Standards.

3.2Information Submission by Connecting Transmission Owner.

The initial information submission by Connecting Transmission Owner shall occur no
later than one hundred eighty (180) Calendar Days prior to Trial Operation and shall include
New York State Transmission System information necessary to allow the Developer to select
equipment and meet any system protection and stability requirements, unless otherwise mutually
agreed to by the Developer and Connecting Transmission Owner. On a monthly basis
Connecting Transmission Owner shall provide Developer and NYISO a status report on the
construction and installation of Connecting Transmission Owner’s Attachment Facilities and
System Upgrade Facilities and System Deliverability Upgrades, including, but not limited to, the
following information: (1) progress to date; (2) a description of the activities since the last
report; (3) a description of the action items for the next period; and (4) the delivery status of
equipment ordered.

3.3Updated Information Submission by Developer.

The updated information submission by the Developer, including manufacturer

information, shall occur no later than one hundred eighty (180) Calendar Days prior to the Trial
Operation. Developer shall submit a completed copy of the Large Generating Facility data
requirements contained in Appendix 1 to the Large Facility Interconnection Procedures. It shall
also include any additional information provided to Connecting Transmission Owner for the
Interconnection Feasibility Study and Interconnection Facilities Study. Information in this
submission shall be the most current Large Generating Facility design or expected performance
data. Information submitted for stability models shall be compatible with NYISO standard
models. If there is no compatible model, the Developer will work with a consultant mutually
agreed to by the Parties to develop and supply a standard model and associated information.

If the Developer’s data is different from what was originally provided to Connecting

Transmission Owner and NYISO pursuant to an Interconnection Study Agreement among

Connecting Transmission Owner, NYISO and Developer and this difference may be reasonably
expected to affect the other Parties’ facilities or the New York State Transmission System, but
does not require the submission of a new Interconnection Request, then NYISO will conduct
appropriate studies to determine the impact on the New York State Transmission System based
on the actual data submitted pursuant to this Article 24.3. Such studies will provide an estimate
of any additional modifications to the New York State Transmission System, Connecting

Transmission Owner’s Attachment Facilities or System Upgrade Facilities or System

Deliverability Upgrades based on the actual data and a good faith estimate of the costs thereof. The Developer shall not begin Trial Operation until such studies are completed. The Developer shall be responsible for the cost of any modifications required by the actual data, including the cost of any required studies.

3.4Information Supplementation.

Prior to the Commercial Operation Date, the Developer and Connecting Transmission
Owner shall supplement their information submissions described above in this Article 24 with
any and all “as-built” Large Generating Facility information or “as-tested” performance
information that differs from the initial submissions or, alternatively, written confirmation that
no such differences exist. The Developer shall conduct tests on the Large Generating Facility as
required by Good Utility Practice such as an open circuit “step voltage” test on the Large
Generating Facility to verify proper operation of the Large Generating Facility’s automatic
voltage regulator.

ARTICLE 22.ARTICLE 25. INFORMATION ACCESS AND AUDIT RIGHTS

Unless otherwise agreed, the test conditions shall include: (1) Large Generating Facility
at synchronous speed; (2) automatic voltage regulator on and in voltage control mode; and (3) a
five percent change in Large Generating Facility terminal voltage initiated by a change in the

voltage regulators reference voltage. Developer shall provide validated test recordings showing
the responses of Large Generating Facility terminal and field voltages. In the event that direct
recordings of these voltages is impractical, recordings of other voltages or currents that mirror
the response of the Large Generating Facility’s terminal or field voltage are acceptable if
information necessary to translate these alternate quantities to actual Large Generating Facility
terminal or field voltages is provided. Large Generating Facility testing shall be conducted and
results provided to the Connecting Transmission Owner and NYISO for each individual
generating unit in a station.

Subsequent to the Commercial Operation Date, the Developer shall provide Connecting
Transmission Owner and NYISO any information changes due to equipment replacement, repair,
or adjustment. Connecting Transmission Owner shall provide the Developer and NYISO any
information changes due to equipment replacement, repair or adjustment in the directly
connected substation or any adjacent Connecting Transmission Owner substation that may affect
the Developer Attachment Facilities equipment ratings, protection or operating requirements.
The Developer and Connecting Transmission Owner shall provide such information no later than
thirty (30) Calendar Days after the date of the equipment replacement, repair or adjustment.

22.125.1Information Access.

Each Party (“Disclosing Party”) shall make available to another Party (“Requesting

22.225.2Reporting of Non-Force Majeure Events.

inability to comply. Notwithstanding the foregoing, notification, cooperation or information

provided under this Article shall not entitle the Party receiving such notification to allege a cause for anticipatory breach of this Agreement.

22.325.3Audit Rights.

Subject to the requirements of confidentiality under Article 22 of this Agreement, each
Party shall have the right, during normal business hours, and upon prior reasonable notice to
another Partythe other Parties, to audit at its own expense the other Party’s accounts and records
pertaining to the other Party’s performance or satisfaction of its obligations under this
Agreement. Such audit rights shall include audits of the other Party’s costs, calculation of
invoiced amounts, and each Party’s actions in an Emergency or Emergency State. Any audit
authorized by this Article shall be performed at the offices where such accounts and records are
maintained and shall be limited to those portions of such accounts and records that relate to the
Party’s performance and satisfaction of obligations under this Agreement. Each Party shall keep
such accounts and records for a period equivalent to the audit rights periods described in Article

25.4 of this Agreement.

22.425.4Audit Rights Periods.

22.4.125.4.1Audit Rights Period for Construction-Related Accounts and

Records.

Accounts and records related to the design, engineering, procurement, and construction of
Connecting Transmission Owner’s Attachment Facilities and System Upgrade Facilities and
System Deliverability Upgrades shall be subject to audit for a period of twenty-four months

following Connecting Transmission Owner’s issuance of a final invoice in accordance with Article 12.2 of this Agreementthe Commercial Operation Date.

22.4.225.4.2 Audit Rights Period for All Other Accounts and Records.

Accounts and records related to a Party’s performance or satisfaction of its obligations
under this Agreement other than those described in Article 25.4.1 of this Agreement shall be
subject to audit as follows: (i) for an audit relating to cost obligations, the applicable audit rights
period shall be twenty-four months after the auditing Party’s receipt of an invoice giving rise to
such cost obligations; and (ii) for an audit relating to all other obligations, the applicable audit
rights period shall be twenty-four months after the event for which the audit is sought.

22.525.5Audit Results.

ARTICLE 23.ARTICLE 26. SUBCONTRACTORS

23.126.1General.

Nothing in this Agreement shall prevent a Party from utilizing the services of any

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23.226.2Responsibility of Principal.

The creation of any subcontract relationship shall not relieve the hiring Party of any of its
obligations under this Agreement. The hiring Party shall be fully responsible to the other
PartiesParty for the acts or omissions of any subcontractor the hiring Party hires as if no
subcontract had been made; provided, however, that in no event shall theNYSEG or NYISO or
Connecting Transmission Owner be liable for the actions or inactions of the DeveloperTrAILCo
or its subcontractors with respect to obligations of the DeveloperTrAILCo under Article 5 of this
Agreement. Any applicable obligation imposed by this Agreement upon the hiring Party shall be
equally binding upon, and shall be construed as having application to, any subcontractor of such
Party.

23.326.3No Limitation by Insurance.

The obligations under this Article 26 will not be limited in any way by any limitation of subcontractor’s insurance.

ARTICLE 24.ARTICLE 27. DISPUTES

24.127.1Submission.

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negotiations within thirty (30) Calendar Days of the other Parties’ receipt of the Notice of

Dispute, such Dispute may, upon mutual agreement of the Parties, be submitted to arbitration
and resolved in accordance with the arbitration procedures set forth below. In the event the
Parties do not agree to submit such Dispute to arbitration, each Party may exercise whatever
rights and remedies it may have in equity or at law consistent with the terms of this Agreement.

24.227.2External Arbitration Procedures.

Any arbitration initiated under this Agreement shall be conducted before a single neutral
arbitrator appointed by the Parties. If the Parties fail to agree upon a single arbitrator within ten

(10) Calendar Days of the submission of the Dispute to arbitration, each Party shall choose one
arbitrator who shall sit on a three-member arbitration panel. In each case, the arbitrator(s) shall
be knowledgeable in electric utility matters, including electric transmission and bulk power
issues, and shall not have any current or past substantial business or financial relationships with
any party to the arbitration (except prior arbitration). The arbitrator(s) shall provide each of the
Parties an opportunity to be heard and, except as otherwise provided herein, shall conduct the
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“Arbitration Rules”) and any applicable FERC regulations or RTO rules; provided,
however, in the event of a conflict between the Arbitration Rules and the terms of this Article 27,
the terms of this Article 27 shall prevail.

24.327.3Arbitration Decisions.

Unless otherwise agreed by the Parties, the arbitrator(s) shall render a decision within

ninety (90) Calendar Days of appointment and shall notify the Parties in writing of such decision
and the reasons therefor. The arbitrator(s) shall be authorized only to interpret and apply the

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provisions of this Agreement and shall have no power to modify or change any provision of this Agreement in any manner. The decision of the arbitrator(s) shall be final and binding upon the Parties, and judgment on the award may be entered in any court having jurisdiction. The
decision of the arbitrator(s) may be appealed solely on the grounds that the conduct of the
arbitrator(s), or the decision itself, violated the standards set forth in the Federal Arbitration Act or the Administrative Dispute Resolution Act. The final decision of the arbitrator must also be filed with FERC if it affects jurisdictional rates, terms and conditions of service, Attachment Facilities, or System Upgrade Facilities, System Deliverability Upgrades.

24.427.4Costs.

Each Party shall be responsible for its own costs incurred during the arbitration process
and for the following costs, if applicable: (1) the cost of the arbitrator chosen by the Party to sit
on the three member panel; or (2) one-third the cost of the single arbitrator jointly chosen by the
Parties.

24.527.5Termination.

Notwithstanding the provisions of this Article 27, any Party may terminate this

Agreement in accordance with its provisions or pursuant to an action at law or equity. The issue of whether such a termination is proper shall not be considered a Dispute hereunder.

Article 4.

ARTICLE 28. REPRESENTATIONS, WARRANTIES AND COVENANTS

24.628.1General.

Each Party makes the following representations, warranties and covenants:

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24.6.128.1.1Good Standing.

Such Party is duly organized, validly existing and in good standing under the laws of the
state in which it is organized, formed, or incorporated, as applicable; that it is qualified to do
business in the state or states in which the Large GeneratingTransmission Facility, Attachment
Facilities and System Upgrade Facilities and System Deliverability Upgrades, owned by such
Party, as applicable, are located; and that it has the corporate power and authority to own its
properties, to carry on its business as now being conducted and to enter into this Agreement and
carry out the transactions contemplated hereby and perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this Agreement.

24.6.228.1.2Authority.

24.6.328.1.3No Conflict.

The execution, delivery and performance of this Agreement does not violate or conflict with the organizational or formation documents, or bylaws or operating agreement, of such
Party, or any judgment, license, permit, order, material agreement or instrument applicable to or binding upon such Party or any of its assets.

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24.6.428.1.4Consent and Approval.

ARTICLE 25.ARTICLE 29. MISCELLANEOUS

25.129.1Binding Effect.

This Agreement and the rights and obligations hereof, shall be binding upon and shall inure to the benefit of the successors and permitted assigns of the Parties hereto.

25.229.2Conflicts.

If there is a discrepancy or conflict between or among the terms and conditions of this cover agreementAgreement and the Appendices hereto, the terms and conditions of this cover agreementAgreement shall be given precedence over the Appendices, except as otherwise
expressly agreed to in writing by the Parties.; provided, however that Appendix C shall control in the event of a conflict with this cover Agreement. For purposes of this Article 29.2, the term “cover Agreement” shall refer to Articles 1 through 29 of this Agreement.

25.329.3Rules of Interpretation.

This Agreement, unless a clear contrary intention appears, shall be construed and

interpreted as follows: (1) the singular number includes the plural number and vice versa; (2)

reference to any person includes such person’s successors and assigns but, in the case of a Party,

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only if such successors and assigns are permitted by this Agreement, and reference to a person in
a particular capacity excludes such person in any other capacity or individually; (3) reference to
any agreement (including this Agreement), document, instrument or tariff means such
agreement, document, instrument, or tariff as amended or modified and in effect from time to
time in accordance with the terms thereof and, if applicable, the terms hereof; (4) reference to
any Applicable Laws and Regulations means such Applicable Laws and Regulations as
amended, modified, codified, or reenacted, in whole or in part, and in effect from time to time,
including, if applicable, rules and regulations promulgated thereunder; (5) unless expressly stated
otherwise, reference to any Article, Section or Appendix means such Article of this Agreement
or such Appendix to this Agreement, or such Section to the Large Facility Interconnection
Procedures or such Appendix to the Large Facility Interconnection Procedures, as the case may
be; (6) “hereunder”, “hereof’, “herein”, “hereto” and words of similar import shall be deemed
references to this Agreement as a whole and not to any particular Article or other provision
hereof or thereof; (7) “including” (and with correlative meaning “include”) means including
without limiting the generality of any description preceding such term; and (8) relative to the
determination of any period of time, “from” means “from and including”, “to” means “to but
excluding” and “through” means “through and including”.

25.429.4Compliance.

Each Party shall perform its obligations under this Agreement in accordance with

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Agreement for its compliance therewith. When any Party becomes aware of such a situation, it shall notify the other Parties promptly so that the Parties can discuss the amendment to this Agreement that is appropriate under the circumstances.

25.529.5Joint and Several Obligations.

Except as otherwise stated herein, the obligations of NYISO, Developer and Connecting
Transmission OwnerNYSEG and TrAILCo are several, and are neither joint nor joint and
several.

25.629.6Entire Agreement.

This Agreement, including all Appendices 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 which constitute any part of the consideration for, or
any condition to, either Party’s compliance with its obligations under this Agreement.

25.729.7No Third Party Beneficiaries.

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25.829.8Waiver.

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 any

obligation, right, or duty of, or imposed upon, such Party. Any waiver at any time by either
Party of its rights with respect to this Agreement shall not be deemed a continuing waiver or a waiver with respect to any other failure to comply with any other obligation, right, duty of this Agreement. Termination or Default of this Agreement for any reason by the Developer shall not constitute a waiver of the Developer’s legal rights to obtain Capacity Resource Interconnection Service and Energy Resource Interconnection Service from the NYISO and Connecting
Transmission Owner in accordance with the provisions of the NYISO OATT. Any waiver of this Agreement shall, if requested, be provided in writing.

25.929.9Headings.

25.1029.10 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.

25.1129.11 Amendment.

The Parties may by mutual agreement amend this Agreement, by a written instrument duly executed by all three of the Parties.

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25.1229.12 Modification by the Parties.

25.1329.13 Reservation of Rights.

TrAILCo, NYISO and Connecting Transmission OwnerNYSEG each shall have the right
to make unilateral filings with FERC to modify this Agreement with respect to any rates, terms
and conditions, charges, classifications of service, rule or regulation under section 205 or any
other applicable provision of the Federal Power Act and FERC’s rules and regulations
thereunder, and Developer shall have the right to make a unilateral filing with FERC to modify
this Agreement pursuant to section 206 or any other applicable provision of the Federal Power
Act and FERC’s rules and regulations thereunder; provided that each Party shall have the right to
protest any such filing by another Party and to participate fully in any proceeding before FERC
in which such modifications may be considered. Nothing in this Agreement shall limit the rights
of the Parties or of FERC under sections 205 or 206 of the Federal Power Act and FERC’s rules
and regulations thereunder, except to the extent that the Parties otherwise mutually agree as
provided herein.

25.1429.14 No Partnership.

This Agreement shall not be interpreted or construed to create an association, joint
venture, agency relationship, or partnership among the Parties or to impose any partnership
obligation or partnership liability upon any Party. No Party shall have any right, power or

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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, any other Party.

25.1529.15 Other Transmission Rights.

Notwithstanding any other provision of this Agreement, nothing herein shall be construed as relinquishing or foreclosing any rights, including but not limited to firm transmission rights,
capacity rights, or transmission congestion rights that the Developereither Party shall be entitled to, now or in the future under any other agreement or tariff as a result of, or otherwise associated with, the transmission capacity, if any, created by the System Upgrade Facilities and System
Deliverability Upgrades..

29.16 Service Agreement.

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IN WITNESS WHEREOF, the Parties have executed this LGIAAgreement in duplicate

originals, each of which shall constitute and be an original effective Agreement between the
Parties.

New York State Electric & GasTrans-Allegheny Interstate Line Company

Corporation

By:By:

Title:Title:

Date:Date:

NYSEG Control
By:

New York Independent System Operator,
Inc.

By:

Title:

Date:

PJM Interconnection, L.L.C.

By:

(Signature)

Name:

(Print)

Title:

111

New York Independent System Operator, Inc.

By:

Title:
Date:

[Insert Name of Connecting Transmission Owner]

By:

Title:
Date:

[Insert Name of Developer]

By:

Title:
Date:

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APPENDICES

Appendix A

Attachment Facilities and System Upgrade Facilities

Appendix B

Milestones

Appendix C

Interconnection Details

Appendix D

Security Arrangements Details

Appendix E

Commercial Operation Date

Appendix F

Addresses for Delivery of Notices and Billings

Appendix G

Interconnection Requirements for a Wind Generating Plant

APPENDIX A

- ATTACHMENT FACILITIES AND SYSTEM UPGRADE FACILITIES

1. Attachment Facilities:

None.

[insert Developer’s Attachment Facilities]:

(a) [insert Connecting Transmission Owner’s Attachment Facilities]:

2.System Upgrade Facilities:

[insert(a)Stand Alone System Upgrade Facilities]:

•2 - 345 kV dead-end (pull-off) structures;

•2 - 115 kV dead-end (pull-off) structures;

•3 - 345 kV, 3000 A wave traps;

•3 - 115 kV, 1200 A wave traps;

•15 - 345 kV arrestors;

•9 - 115 kV arrestors;

•6 - line tuners;

•10 - 362 kV, 3000 A, double side break manually operated disconnect switch;

•1 - 362 kV, 3000 A, double side break motor operated disconnect switch;

•7 - 145 kV, 2000A, V-type manually operated disconnect switch;

•1 - 145 kV, 3000 A, V-type motor operated disconnect switch;

•4 - 380 kV, 3000 A, 63 kA SF6 breakers;

•2 - 362 kV, 3000 A, 63 kA SF6 breakers with synchronous switching controller;

•3 - 145 kV, 3000 A, 40 kA SF6 breakers;

•1 - 345/115 kV 200/266/333 MVA autotransformer;

•6 - 345 kV coupling capacitor voltage transformers (“CCVT”);

•6 - 345 kV voltage transformers;

•9 - 115 kV CCVTs;

•345 kV bus work;

•115 kV bus work;

•345 kV structures;

•115 kV structures;

•2 - 95.33 MVAR 362 kV nameplate (86.6 MVAR 345 kV effective) shunt capacitor

banks;

•Grounding materials;

•Conduit and cable trench;

• Control cabling;

• Control building with panels for control metering, primary and backup protection,
power line carrier systems, and communication;

•1 - Station battery (125 V DC) with rack;

•1 - Station battery charger;

• AC Station Service Panels;

• DC panels;

• 1 - 66.395 kV-120/240 V station service transformer;

• Back-up station service transformer;

• Fencing;

(b)System Upgrade Facilities

(1)Line Loop System Upgrade Facilities from the Everts Drive -

Mansfield 115 kV Line

(2)Protection System Upgrade Facilities - Homer City 345 kV

Remote End

Due to the segmentation of the Watercure Line with the addition of the

(3)Protection System Upgrade Facilities - Everts Drive 115 kV Remote

End

Due to the segmentation of Penelec’s Everts Drive - Mansfield 115 kV

(4)Protection SUF - Mansfield 115 kV Remote End

Due to the segmentation of Penelec’s Everts Drive - Mansfield 115 kV

transmission line with the addition of the Mainesburg Substation, relay settings at Mansfield Substation will need to be adjusted to accommodate the new
Mainesburg Substation. Penelec will complete this work at TrAILCo’s cost and expense, and will own these protection SUF.

(5)345 kV Line Loop

• Install two wood H-frames(#B-343-2 and#B-344-2) outside of Mainesburg

substation.

• Install 8 steel poles (two 3-pole structures #B-343 and #B-344 and two monopoles
#B-343-1 and #B-344-1). Install all anchors guys and span guys.

• Remove excess wire from the north side of B-343 and the south side of B-344.

• Remove two existing H-frames (B-343 and B-344).

• Install new conductors (2156 ACSR) and shield wires (7/16” EHS steel) from 3-pole
structures to each monopole, through the new wood H-frames, and into Mainesburg
substation.

(6)Watercure Road Relay Upgrades

The following System Upgrade Facilities shall be completed by NYSEG at TrAILCo’s cost and expense, and will be owned by NYSEG.

Phase 1

• Remove 100W PLC amplifiers on 30 line

• Attend Siemens 7SA training (3 days)

• Review Proposed Mainesburg settings

• Issue new Watercure Road 30 Line Terminal Settings

• Update Aspen and Relay databases

• Update Watercure Road operating instructions

• Install new settings

• Perform PLC level checks

• Perform End to End Tests

Phase 2

The Phase 2 protection scheme will establish a second pilot channel between

Mainesburg and Watercure Road substations. All costs associated with the Phase

2 protection scheme will be the responsibility of TrAILCo. TrAILCo will be

• Install a SEL-2506 fiber optic transceiver at Watercure Road adjacent to existing
Siemens 7SA relay (to convert the 7SA I/O contacts to a MB signal over fiber).

• Watercure Road MB signal to be routed via 2815 transceiver to a new JUMX at
Watercure Road then, via a new 6 mile ADSS SM fiber run, to 14th Street substation.

• At 14th Street substation, install a new JUMX to connect to the new T1 circuit from
Mainesburg substation (ordered by FE) via a Positron shelf (Positron needs to be
confirmed).

The above scope of work for Phase 2 is subject to modification based on a number of factors, including further engineering review.

3. Cost Estimates:

a. [insert Other System Upgrade Facilities]:

(1) Mainesburg Substation

The estimated cost for engineering, procuring materials, and constructing Mainesburg Substation is $22,283,600.

(2) Line Loop System Upgrade Facilities from the Everts Drive - Mansfield 115
kV Line

The estimated cost for engineering, procuring materials, and constructing the 115 kV line loop is $541,400.

System Deliverability Upgrades:

(3) Protection System Upgrade Facilities - Homer City 345 kV Remote End

The estimated cost for engineering, procuring materials, and constructing the relay upgrades at Homer City substation is $333,200.

(4) Protection System Upgrade Facilities - Everts Drive 115 kV Remote End

The estimated cost for engineering and implementing the relay setting changes at Everts Drive Substation is $46,100.

(5) Protection System Upgrade Facilities - Mansfield 115 kV Remote End

The estimated cost for engineering and implementing the relay setting changes at Mansfield Substation is $81,300.

(6) 345 kV Line Loop

The estimated cost for TrAILCo, on behalf of NYSEG, to engineer, procure

materials, and construct the 345 kV line loop is $3,055,000. The estimated cost for
NYSEG work associated with the 345 kV transmission line loop work is $50,000.

(7) Watercure Road Relay Upgrades

5.Design Standard

The System Upgrade Facilities and related facilities to be constructed by TrAILCo (or by

Penelec on behalf of TrAILCo), with the exception of the 345 kV Line Loop work, will

be designed to meet the following requirements:

•FirstEnergy Transmission Planning Criteria

•FirstEnergy Requirements for Transmission Connected Facilities

•FirstEnergy Transmission System Protection Practices

•FirstEnergy Substation Design Standards Manual

•Power Circuit Breakers 23 kV through 500 kV (“FE-BKR-1”)

•Open Rack Power Capacitors (“FE-CAP-1”)

•Liquid Immersed Substation Power & GSU Transformers (“FE-TR-1”)

APPENDIX B

- MILESTONES

In accordance with Article 5.1 of this Agreement, the following milestone dates shall apply to the designated performance:

2. Initial Energization Date - that date which is thirty (30) days from the Outage Start
Date.

3. Trial Period - shall be defined as the ten (10) day period from the Initial Energization
Date needed for commissioning and testing.

4. Commercial Operation Date - shall be defined as that date which is ten (10) days
after the Initial Energization Date

Additionally, the following milestone completion dates shall apply to the designated Stand Alone System Upgrade Facilities described in Appendix A:

i.Mainesburg Substation (Appendix A, § 2(a)):Commercial Operation Date

ii.Line Loop SUF Everts Drive (Appendix A, § 2(b)(1)):In Service/Complete

iii.Protection SUF - Homer City (Appendix A, § 2(b)(2)):Commercial Operation Date

iv.Protection SUF - Everts Drive (Appendix A, § 2(b)(3)):In Service/Complete

v.Protection SUF - Mansfield (Appendix A, § 2(b)(4)):In Service/Complete

vi.345 kV Line Loop (Appendix A, § 2(b)(5)):Commercial Operation Date

vii.Watercure Road Relay Upgrades (Appendix A, § 2(b)(6)):

Phase 1: the Commercial Operation Date provided that NYSEG completes the work at the Watercure Road substation in a timely manner.

Phase 2: that date which is no later than three hundred and sixty-five (365) days after the Commercial Operation Date.

The duration of the Work Period defined in Appendix C, Section C(2), accounts for the period from the Outage Start Date to the Commercial Operation Date of the Transmission
Facility (i.e., Mainesburg Substation).

APPENDIX C - INTERCONNECTION AND CONSTRUCTION PROVISIONS

A.Interconnection Description

B.Interconnection Provisions

The following are additional interconnection provisions to which the Parties agree to be bound:

1. By June 1, 2016, TrAILCo shall install, at TrAILCo’s cost and expense, the

following NYISO-approved metering transformers: revenue quality PTs (.3% accuracy) to replace the current CCVTs. Said NYISO-approved metering transformers shall be owned by TrAILCo;

2. TrAILCo, at its cost and expense, shall install a GE D20MX RTU (“FE RTU”) at

and expense;

It is anticipated that the leased T1 phone circuit may not be available at the

Commercial Operation Date. Therefore, at the time of the Commercial Operation Date, the data provided to NYSEG via the FE RTU, as described in the paragraph above, will be through a temporary solution consisting of a combination of
cellular modem and 4 Wire/Telco technologies, the specifics of which are to be agreed upon by NYSEG and TrAILCo;

3. Prior to Commercial Operation Date of the Mainesburg Substation, TrAILCo

shall, at its own cost and expense, establish dial-up access to all 345 kV revenue metering at Mainesburg Substation for data collection via NYSEG’s MV-90 data collection system;

4. NYISO shall, at TrAILCo’s cost and expense, provide to TrAILCo a RFL 9800

series shelf, 98 TMX cards and telemetry circuits (“NYISO Telemetry

C.Construction Provisions

The following are additional construction provisions to which the Parties agree to be bound:

1. TrAILCo and NYSEG each have obligations under this Agreement to construct

and/or install System Upgrade Facilities. The Scope of Work for TrAILCo’s

2. TrAILCo shall use best efforts to complete the scope of work described in section

2(b)(5) of Appendix A (the “TrAILCo Scope of Work”) during the period (the

“Work Period”) between the commencement of the scheduled outage of

may cause NYSEG to incur economic damages and losses. If the work required
by the TrAILCo Scope of Work is not completed by the expiration of the Work
Period and NYSEG has suffered economic damages or losses as a result, then
NYSEG shall provide a written notice and an invoice to TrAILCo that provides
reasonable detail as to the cause and extent of the damages and or losses and the
amount due from TrAILCo to NYSEG. Subject to TrAILCo’s rights under this
Section 2, TrAILCo shall pay the amount due within five (5) days of the date of
the invoice. TrAILCo’s obligation to pay the amount invoiced pursuant to this

provision shall be absolute and unconditional and without counterclaim or set-off
except in the event the TrAILCo Scope of Work is not complete by the expiration
of the Work Period because of an act or omission of NYSEG, an act or omission
of a third-party not under contract with or control of TrAILCo or any affiliate of
TrAILCo for purposes of the TrAILCo Scope of Work, an act or omission of the
PJM Interconnection, L.L.C. (“PJM”) and/or the New York Independent System
Operator, Inc. (“NYISO”), or an event beyond the reasonable control of TrAILCo
(e.g., force majeure).

3. NYSEG, at TrAILCo’s expense, shall provide commercially reasonable

cooperation and communication to TrAILCo and shall provide all reasonably

requested documents, information, consents, and access to facilities and property to permit TrAILCo to undertake and complete the TrAILCo Scope of Work
during the Work Period.

4. NYSEG’s agreement to permit TrAILCo to undertake the TrAILCo Scope of

5. The Parties acknowledge and understand that the compliance dates and time

6. TrAILCo shall undertake the TrAILCo Scope of Work at its cost and expense,

and consistent with this Agreement and Good Utility Practice. The ownership of equipment and facilities installed by TrAILCo in connection with the Scope of Work shall be set forth in this Agreement.

7.NYSEG may monitor and inspect TrAILCo’s performance of the TrAILCo Scope

of Work. TrAILCo shall maintain adequate communication and coordination between TrAILCo and NYSEG during the Work Period, and TrAILCo shall
notify NYSEG of the commencement of the TrAILCo Scope of Work and the completion of the TrAILCo Scope of Work. For purposes of the performance of the TrAILCo Scope of Work, each Party hereby designates the following point of contact for purposes of communication during the Work Period:

For TrAILCo:Michael W. Hughes

c/o FirstEnergy Service Company 2800 Pottsville Pike

Reading, PA 19612
Office: 610-921-6587
Cell: 484-269-4903

Email: mhughes@firstenergycorp.com

For NYSEG:Raymond P. Kinney

Director - Transmission, Energy Services

New York State Electric & Gas Corporation

18 Link Drive
P.O. Box 5224

Binghamton, NY 13902-5224 Office: 607-762-4321

Cell: 607-725-7166

Email: rpkinney@nyseg.com

8. The energization of the Mainesburg Substation shall occur in accordance with the

9. Any Party shall report to the other Party verbally and 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.

10. TrAILCo will indemnify, defend at its expense and hold harmless NYSEG and its

Affiliates, and each of their directors, officers, employees, and agents (the

“Indemnitee”) from and against any and all liabilities, claims, demands, suits,

losses, costs, fees, damages or expenses (together, “Losses”) it may suffer, or for

which it may be held liable including, without limitation, reasonable expenses and
attorneys fees incurred in the connection therewith, by reason of: (a) any
work-related accident or injury affecting an employee, agent or subcontractor of
TrAILCo, arising in connection with work performed under the TrAILCo Scope
of Work; (b) any claim by an agency or instrumentality of the federal, state or any
local government, or by an employee, agent or subcontractor of TrAILCo alleging
that the Indemnitee is liable to any party, for any reason, due to TrAILCo’s
negligent performance of the work required by the TrAILCo Scope of Work or
omissions by an employee, agent or subcontractor of TrAILCo; (c) bodily injury,
including death, to any person or persons due to the actions or omissions of
TrAILCo or its agents or subcontractors; (d) damage to or destruction of any
property, including loss of use thereof, due to the actions or omissions of
TrAILCo, or its agents or subcontractors; provided, however, TrAILCo shall not
be required to indemnify, hold harmless and defend the Indemnitee to the extent
Losses related to matters described in sections (a), (b), (c) and (d) above arise
from the Indemnitee’s negligence or willful misconduct. Individual employees,
agents and subcontractors of TrAILCo who are performing work pursuant to the
TrAILCo Scope of Work shall be considered to be employees, agents or
subcontractors of TrAILCo for all purposes under this Agreement,
notwithstanding any judicial or administrative determination that such employees,
agents or subcontractors of the other party should be regarded as employees under
applicable law. All actions of the employees, agents and subcontractors of
TrAILCo under this Agreement shall be deemed to be actions of TrAILCo under
this Agreement. This provision shall continue and survive any expiration or
termination of this Agreement and completion of the TrAILCo Scope of Work.

11. Return of NYSEG Facilities to Status Quo Ante. It is the express intention of the

and expense of TrAILCo and with NYSEG’s cooperation and coordination (and
with the coordination with PJM and NYISO), and shall be completed as soon as is
practicable.

INTERCONNECTION DETAILS

APPENDIX D

- SECURITY ARRANGEMENTS DETAILS

Infrastructure security of New York State Transmission System and PJM Transmission
System equipment and operations and control hardware and software is essential to ensure day-
to-dayday‐to‐day New York State Transmission System and PJM Transmission System
reliability and operational security. The Commission will expect PJM, the NYISO, all
Transmission Owners, all Developers (including NYSEG and TrAILCo), and all other Market
Participants to comply with the recommendations offered by the President’s Critical
Infrastructure Protection Board and, eventually, best practice recommendations from the electric
reliability authority. All public utilities will be expected to meet basic standards for system
infrastructure and operational security, including physical, operational, and cyber-
securitycyber‐security practices.

APPENDIX E

COMMERCIAL OPERATION DATE

[Date]

[NYISO Address]

[Connecting Transmission Owner Address]

Re: _____________ Large Generating Facility

Dear __________________:

On [Date] [Developer] has completed Trial Operation of Unit No. ___. This letter confirms that [Developer] commenced Commercial Operation of Unit No. ___ at the Large Generating Facility, effective as of [Date plus one day].

Thank you.

[Signature]

[Developer Representative]

APPENDIX F

E - ADDRESSES FOR DELIVERY OF NOTICES AND BILLINGS

Notices:

TrAILCo:

FirstEnergy Service Company

Attn: Manager: FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: mthorn@firstenergycorp.com

NYSEG:

New York State Electric & Gas Corporation

Attn: Transmission Services - Manager Programs/Projects PO Box 5224

Binghamton, New York 13902-5224 Phone: (607) 762-8073

Fax: (607) 762-8666

NYISO:

[To be supplied.]

ConnectingBefore commercial operation of the Transmission OwnerFacility: [To be supplied.]

New York Independent System Operator, Inc.

Attn: Vice President, System and Resource Planning

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

Developer:

After commercial operation of the Transmission Facility:

New York Independent System Operator, Inc. Attn: Vice President, Operations

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

[To be supplied.]

Billings and Payments:

Connecting Transmission Owner: [To be supplied.]

DeveloperTrAILCo:

[To be supplied.]

FirstEnergy Service Company

Attn: Manager: FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: mthorn@firstenergycorp.com

NYSEG:

New York State Electric & Gas Corporation

Attn: Energy Services - Manager, Billing & Risk Management PO Box 5224

Binghamton, New York 13902-5224

Alternative Forms of Delivery of Notices (telephone, facsimile or emailALTERNATIVE
FORMS OF DELIVERY OF NOTICES (TELEPHONE, FACSIMILE OR EMAIL):

TrAILCo:

FirstEnergy Service Company

Attn: Manager: FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: mthorn@firstenergycorp.com Phone: (330) 384-3889

FirstEnergy Service Company

Attn: Attorney for FERC & Wholesale Connection Support FERC & Wholesale Connection Support

76 South Main St.

Akron, OH 44308

Email: pnrao@firstenergycorp.com Phone: (330) 384-2422

NYSEG:

New York State Electric & Gas Corporation

Attn: Transmission Services - Manager Programs/Projects PO Box 5224

Binghamton, New York 13902-5224 Phone: (607) 762-8073

Fax: (607) 762-8666

NYISO:

[To be supplied.]

ConnectingBefore commercial operation of the Transmission OwnerFacility: [To be supplied.]

Developer:

New York Independent System Operator, Inc.

Attn: Vice President, System and Resource Planning

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

[To be supplied.]

APPENDIX G

INTERCONNECTION REQUIREMENTS FOR A WIND GENERATING PLANT

Appendix G sets forth requirements and provisions specific to a wind generating plant.

All other requirements of this LGIA continue to apply to wind generating plant interconnections.

A.Technical Standards Applicable to a Wind Generating Plant

i.Low Voltage Ride-Through (LVRT) Capability

A wind generating plant shall be able to remain online during voltage disturbances up to the time periods and associated voltage levels set forth in the standard below. The LVRT
standard provides for a transition period standard and a post-transition period standard.

Transition Period LVRT Standard

The transition period standard applies to wind generating plants subject to FERC Order
661 that have either: (i) interconnection agreements signed and filed with the Commission, filed with the Commission in unexecuted form, finally executed as conforming agreements, or filed
with the Commission as non-conforming agreements between January 1, 2006 and December 31, 2006, with a scheduled in-service date no later than December 31, 2007, or (ii) wind
generating turbines subject to a wind turbine procurement contract executed prior to December
31, 2005, for delivery through 2007.

1. Wind generating plants are required to remain in-service during three-phase faults with

normal clearing (which is a time period of approximately 4 - 9 cycles) and single line to
ground faults with delayed clearing, and subsequent post-fault voltage recovery to
prefault voltage unless clearing the fault effectively disconnects the generator from the
system. The clearing time requirement for a three-phase fault will be specific to the wind
generating plant substation location, as determined by and documented by the Connecting
Transmission Owner for the Transmission District to which the wind generating plant
will be interconnected. The maximum clearing time the wind generating plant shall be
required to withstand for a three-phase fault shall be 9 cycles at a voltage as low as 0.15
p.u., as measured at the high side of the wind generating plant step-up transformer (i.e.
the transformer that steps the voltage up to the transmission interconnection voltage or
“GSU”), after which, if the fault remains following the location-specific normal clearing
time for three-phase faults, the wind generating plant may disconnect from the
transmission system.

2. This requirement does not apply to faults that would occur between the wind generator

terminals and the high side of the GSU or to faults that would result in a voltage lower than 0.15 per unit on the high side of the GSU serving the facility.

3.Wind generating plants may be tripped after the fault period if this action is intended as

part of a special protection system.

4. Wind generating plants may meet the LVRT requirements of this standard by the

performance of the generators or by installing additional equipment (e.g., Static VAr Compensator, etc.) within the wind generating plant or by a combination of generator performance and additional equipment.

5. Existing individual generator units that are, or have been, interconnected to the network

at the same location at the effective date of the Appendix G LVRT Standard are exempt

from meeting the Appendix G LVRT Standard for the remaining life of the existing

generation equipment. Existing individual generator units that are replaced are required to meet the Appendix G LVRT Standard.

Post-transition Period LVRT Standard

All wind generating plants subject to FERC Order No. 661 and not covered by the transition period described above must meet the following requirements:

1. Wind generating plants are required to remain in-service during three-phase faults with

normal clearing (which is a time period of approximately 4 - 9 cycles) and single line to
ground faults with delayed clearing, and subsequent post-fault voltage recovery to
prefault voltage unless clearing the fault effectively disconnects the generator from the
system. The clearing time requirement for a three-phase fault will be specific to the wind
generating plant substation location, as determined by and documented by the Connecting
Transmission Owner for the Transmission District to which the wind generating plant
will be interconnected. The maximum clearing time the wind generating plant shall be
required to withstand for a three-phase fault shall be 9 cycles after which, if the fault
remains following the location-specific normal clearing time for three-phase faults, the
wind generating plant may disconnect from the transmission system. A wind generating
plant shall remain interconnected during such a fault on the transmission system for a
voltage level as low as zero volts, as measured at the high voltage side of the wind GSU. 2. This requirement does not apply to faults that would occur between the wind generator
terminals and the high side of the GSU.

3.Wind generating plants may be tripped after the fault period if this action is intended as

part of a special protection system.

4. Wind generating plants may meet the LVRT requirements of this standard by the

performance of the generators or by installing additional equipment (e.g., Static VAr

Compensator) within the wind generating plant or by a combination of generator performance and additional equipment.

5. Existing individual generator units that are, or have been, interconnected to the network

at the same location at the effective date of the Appendix G LVRT Standard are exempt from meeting the Appendix G LVRT Standard for the remaining life of the existing
generation equipment. Existing individual generator units that are replaced are required to meet the Appendix G LVRT Standard.

After commercial operation of the Transmission Facility:

New York Independent System Operator, Inc. Attn: Vice President, Operations

10 Krey Boulevard

Rensselaer, NY 12144
Phone: (518) 356-6000
Fax: (518) 356-6118

ii. Power Factor Design Criteria (Reactive Power)

A wind generating plant shall maintain a power factor within the range of 0.95 leading to

0.95 lagging, measured at the Point of Interconnection as defined in this LGIA, if the ISO’s

System Reliability Impact Study shows that such a requirement is necessary to ensure safety or reliability.

The power factor range standard can be met using, for example without limitation, power electronics designed to supply this level of reactive capability (taking into account any
limitations due to voltage level, real power output, etc.) or fixed and switched capacitors if
agreed to by the Connecting Transmission Owner for the Transmission District to which the
wind generating plant will be interconnected, or a combination of the two. The Developer shall not disable power factor equipment while the wind plant is in operation. Wind plants shall also be able to provide sufficient dynamic voltage support in lieu of the power system stabilizer and automatic voltage regulation at the generator excitation system if the System Reliability Impact Study shows this to be required for system safety or reliability.

iii. Supervisory Control and Data Acquisition (SCADA) Capability

The wind plant shall provide SCADA capability to transmit data and receive instructions
from the ISO and/or the Connecting Transmission Owner for the Transmission District to which
the wind generating plant will be interconnected, as applicable, to protect system reliability. The
Connecting Transmission Owner for the Transmission District to which the wind generating
plant will be interconnected and the wind plant Developer shall determine what SCADA
information is essential for the proposed wind plant, taking into account the size of the plant and