NYISO Agreements --> SGIA No. 1677 Among NYISO, NYSEG, and AES ES Westover

AMENDED AND RESTATED STANDARD SMALL GENERATOR INTERCONNECTION AGREEMENT

This Amended and Restated Interconnection Agreement (“Agreement”) is made and entered into this 26th day of December, 2012, by and among the New York Independent System Operator, Inc., a not-for-profit corporation organized and existing under the laws of the State of New York (“NYISO”), New York State Electric & Gas Corporation, a corporation organized and existing under the laws of the State of New York (“Connecting Transmission Owner”), and AES ES Westover, LLC, a limited liability corporation organized and existing under the laws of the State of Delaware (“Interconnection Customer”); each hereinafter sometimes referred to individually as “Party” or referred to collectively as the “Parties.”

NYISO Information

New York Independent System Operator

Attention: Henry Chao; Vice President, System and Resource Planning

Address: 10 Krey Boulevard

City: RensselaerState: NY Zip: 12144

Phone: (518) 356-6000Fax: (518) 356-6118

Connecting Transmission Owner Information

Connecting Transmission Owner: New York State Electric & Gas Corporation

Attention: Manager Programs/Projects; Electric Transmission Services

Address: 18 Link Drive

City: Binghamton State: NY Zip: 13902-5224

Phone: (607) 762 8073Fax: (607) 762 8666

Interconnection Customer Information

Interconnection Customer: AES ES Westover, LLC

Attention: John Zahurancik; Vice President

Address: 4300 Wilson Blvd, Suite 1100

City: ArlingtonState: VA Zip: 22203

Phone: (703) 522-1315 Fax: (703) 528-4510

Interconnection Customer Application No: N/A

In consideration of the mutual covenants set forth herein, the Parties agree as follows:

Article 1Scope and Limitations of Agreement

1.1Applicability

This Small Generator Interconnection Agreement (“SGIA”) shall be used for all Interconnection Requests submitted under the Small Generator Interconnection Procedures (SGIP) except for those submitted under the 10 kW Inverter Process contained in SGIP Attachment 5.

1.2Purpose

This Agreement governs the terms and conditions under which the Interconnection Customer’s Small Generating Facility will interconnect with, and operate in parallel with, the New York State Transmission System or the Distribution System.

1.3Scope of Interconnection Service

1.3.1NYISO will provide Energy Resource Interconnection Service to Interconnection Customer at the Point of Interconnection.

1.3.2This Agreement does not constitute an agreement to purchase or deliver the Interconnection Customer’s power. The purchase or delivery of power and other services that the Interconnection Customer may require will be covered under separate agreements, if any, or applicable provisions of NYISO’s or Connecting Transmission Owner’s tariffs. The Interconnection Customer will be responsible for separately making all necessary arrangements (including scheduling) for delivery of electricity in accordance with the applicable provisions of the NYISO OATT and Connecting Transmission Owner’s tariff. 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 Services Tariff or any Connecting Transmission Owner’s tariff. If Interconnection Customer wishes to supply or purchase energy, Installed Capacity or Ancillary Services, then Interconnection Customer will make application to do so in accordance with the NYISO Services Tariff or Connecting Transmission Owner’s tariff.

1.4Limitations

Nothing in this Agreement is intended to affect any other agreement by and among the NYISO, Connecting Transmission Owner and the Interconnection Customer, except as otherwise expressly provided herein.

1.5Responsibilities of the Parties

1.5.1The Parties shall perform all obligations of this Agreement in accordance with all Applicable Laws and Regulations, Operating Requirements, and Good Utility Practice.

1.5.2The Interconnection Customer shall construct, interconnect, operate and maintain its Small Generating Facility and construct, operate, and maintain its Interconnection Facilities in accordance with the applicable manufacturer’s recommended maintenance schedule, and in accordance with this Agreement, and with Good Utility Practice.

1.5.3The Connecting Transmission Owner shall construct, operate, and maintain its Interconnection Facilities and Upgrades covered by this Agreement in accordance with this Agreement, and with Good Utility Practice.

1.5.4The Interconnection Customer agrees to construct its facilities or systems in accordance with applicable specifications that meet or exceed those provided by the National Electrical Safety Code, the American National Standards Institute, IEEE, Underwriter’s Laboratory, and Operating Requirements in effect at the time of construction and other applicable national and state codes and standards. The Interconnection Customer agrees to design, install, maintain, and operate its Small Generating Facility so as to reasonably minimize the likelihood of a disturbance adversely affecting or impairing the system or equipment of the Connecting Transmission Owner or Affected Systems.

1.5.5The Connecting Transmission Owner and Interconnection Customer shall operate, maintain, repair, and inspect, and shall be fully responsible for the facilities that it now or subsequently may own unless otherwise specified in the Attachments to this Agreement. Each of those Parties shall be responsible for the safe installation, maintenance, repair and condition of their respective lines and appurtenances on their respective sides of the point of change of ownership. The Connecting Transmission Owner and the Interconnection Customer, as appropriate, shall provide Interconnection Facilities that adequately protect the Connecting Transmission Owner’s electric system, personnel, and other persons from damage and injury. The allocation of responsibility for the design, installation, operation, maintenance and ownership of Interconnection Facilities shall be delineated in the Attachments to this Agreement.

1.5.6The NYISO shall coordinate with all Affected Systems to support the interconnection. The Connecting Transmission Owner shall cooperate with the NYISO in these efforts.

1.6Parallel Operation Obligations

Once the Small Generating Facility has been authorized to commence parallel operation, the Interconnection Customer shall abide by all rules and procedures pertaining to the parallel operation of the Small Generating Facility in the applicable control area, including, but not limited to; (1) the rules and procedures concerning the operation of generation set forth in the NYISO tariffs or ISO Procedures or the Connecting Transmission Owner’s tariff; (2) any requirements consistent with Good Utility Practice or that are necessary to ensure the safe and reliable operation of the Transmission System or Distribution System; and (3) the Operating Requirements set forth in Attachment 5 of this Agreement.

1.7Metering

The Interconnection Customer shall be responsible for the Connecting Transmission Owner’s reasonable and necessary cost for the purchase, installation, operation, maintenance, testing, repair, and replacement of metering and data acquisition equipment specified in Attachments 2 and 3 of this Agreement. The Interconnection Customer’s metering (and data acquisition, as required) equipment shall conform to applicable industry rules and Operating Requirements.

1.8Reactive Power

1.8.1The Interconnection Customer shall design its Small Generating Facility to maintain a composite power delivery at continuous rated power output 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 similarly situated generators in the New York Control Area on a comparable basis.

1.8.2The NYISO is required to pay the Interconnection Customer for reactive power, or voltage support service, that the Interconnection Customer provides from the Small Generating Facility in accordance with Rate Schedule 2 of the NYISO Services Tariff.

1.9Capitalized Terms

Capitalized terms used herein shall have the meanings specified in the Glossary of Terms in Attachment 1 or the body of this Agreement. Capitalized terms used herein that are not so defined shall have the meanings specified in Section 32.1.0 or Attachment S or Attachment X of the NYISO OATT.

Article 2.Inspection, Testing, Authorization, and Right of Access

2.1Equipment Testing and Inspection

2.1.1The Interconnection Customer shall test and inspect its Small Generating Facility and Interconnection Facilities prior to interconnection. The Interconnection Customer shall notify the NYISO and the Connecting Transmission Owner of such activities no fewer than five Business Days (or as may be agreed to by the Parties) prior to such testing and inspection. Testing and inspection shall occur on a Business Day. The Connecting Transmission Owner may, at its own expense, send qualified personnel to the Small Generating Facility site to inspect the interconnection and observe the testing. The Interconnection Customer shall provide the NYISO and Connecting Transmission Owner a written test report when such testing and inspection is completed. The Small Generating Facility may not commence parallel operations if the NYISO, in consultation with the Connecting Transmission Owner, finds that the Small Generating Facility has not been installed as agreed upon or may not be operated in a safe and reliable manner.

2.1.2The NYISO and Connecting Transmission Owner shall each provide the Interconnection Customer written acknowledgment that it has received the Interconnection Customer’s written test report. Such written acknowledgment shall not be deemed to be or construed as any representation, assurance, guarantee, or warranty by the NYISO or Connecting Transmission Owner of the safety, durability, suitability, or reliability of the Small Generating Facility or any associated control, protective, and safety devices owned or controlled by the Interconnection Customer or the quality of power produced by the Small Generating Facility.

2.2Authorization Required Prior to Parallel Operation

2.2.1The NYISO, in consultation with the Connecting Transmission Owner, shall use Reasonable Efforts to list applicable parallel Operating Requirements in Attachment 5 of this Agreement. Additionally, the NYISO, in consultation with the Connecting Transmission Owner, shall notify the Interconnection Customer of any changes to these requirements as soon as they are known. The NYISO and Connecting Transmission Owner shall make Reasonable Efforts to cooperate with the Interconnection Customer in meeting requirements necessary for the Interconnection Customer to commence parallel operations by the in-service date.

2.2.2The Interconnection Customer shall not operate its Small Generating Facility in parallel with the New York State Transmission System or the Distribution System without prior written authorization of the NYISO. The NYISO, in consultation with the Connecting Transmission Owner, will provide such authorization once the NYISO receives notification that the Interconnection Customer has complied with all applicable parallel Operating Requirements. Such authorization shall not be unreasonably withheld, conditioned, or delayed.

2.3Right of Access

2.3.1Upon reasonable notice, the NYISO and/or Connecting Transmission Owner may send a qualified person to the premises of the Interconnection Customer at or immediately before the time the Small Generating Facility first produces energy to inspect the interconnection, and observe the commissioning of the Small Generating Facility (including any required testing), startup, and operation for a period of up to three Business Days after initial start-up of the unit. In addition, the Interconnection Customer shall notify the NYISO and Connecting Transmission Owner at least five Business Days prior to conducting any on-site verification testing of the Small Generating Facility.

2.3.2Following the initial inspection process described above, at reasonable hours, and upon reasonable notice, or at any time without notice in the event of an emergency or hazardous condition, the NYISO and Connecting Transmission Owner each shall have access to the Interconnection Customer’s premises for any reasonable purpose in connection with the performance of the obligations imposed on them by this Agreement or if necessary to meet their legal obligation to provide service to their customers.

2.3.3Each Party shall be responsible for its own costs associated with following this article.

Article 3Effective Date, Term, Termination, and Disconnection

3.1Effective Date

This Agreement shall become effective upon execution by the Parties subject to acceptance by FERC (if applicable), or if filed unexecuted, upon the date specified by the FERC. The NYISO and Connecting Transmission Owner shall promptly file, or cause to be filed, this Agreement with FERC upon execution, if required. If the Agreement is disputed and the Interconnection Customer requests that it be filed with FERC in an unexecuted form, the NYISO shall file, or cause to be filed, this Agreement and the NYISO shall identify the disputed language.

3.2Term of Agreement

This Agreement shall become effective on the Effective Date and shall remain in effect for a period of twenty (20) years from the Effective Date or such other longer period as the Interconnection Customer may request and shall be automatically renewed for each successive one-year period thereafter, unless terminated earlier in accordance with article 3.3 of this Agreement.

3.3Termination

No termination 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 (if required), which notice has been accepted for filing by FERC.

3.3.1The Interconnection Customer may terminate this Agreement at any time by giving the NYISO and Connecting Transmission Owner 20 Business Days written notice.

3.3.2Any Party may terminate this Agreement after Default pursuant to article 7.6.

3.3.3Upon termination of this Agreement, the Small Generating Facility will be disconnected from the New York State Transmission System or the Distribution System, as applicable. All costs required to effectuate such disconnection shall be borne by the terminating Party, unless such termination resulted from the non-terminating Party’s Default of this SGIA or such non-terminating Party otherwise is responsible for these costs under this SGIA.

3.3.4The termination of this Agreement shall not relieve any Party of its liabilities and obligations, owed or continuing at the time of the termination. The Interconnection Customer shall pay all amounts in excess of any deposit or other security without interest within 30 calendar days after receipt of the invoice for such amounts. If the deposit or other security exceeds the invoice, the Connecting Transmission Owner shall refund such excess within 30 calendar days of the invoice without interest. If the Interconnection Customer disputes an amount to be paid the Interconnection Customer shall pay the disputed amount to the Connecting Transmission Owner or into an interest bearing escrow account, pending resolution of the dispute in accordance with Article 10 of this Agreement. To the extent the dispute is resolved in the Interconnection Customer’s favor, that portion of the disputed amount will be returned to the Interconnection Customer with interest at rates applicable to refunds under the Commission’s regulations. To the extent the dispute is resolved in the Connecting Transmission Owner’s favor, that portion of any escrowed funds and interest will be released to the Connecting Transmission Owner.

3.3.5The limitations of liability, indemnification and confidentiality provisions of this Agreement shall survive termination or expiration of this Agreement.

3.4Temporary Disconnection

Temporary disconnection shall continue only for so long as reasonably necessary under Good Utility Practice.

3.4.1Emergency Conditions

“Emergency Condition” shall mean a condition or situation: (1) that in the judgment of the Party making the claim is imminently likely to endanger life or property; or (2) that, in the case of the NYISO or Connecting Transmission Owner, is imminently likely (as determined in a non-discriminatory manner) to cause a material adverse effect on the security of, or damage to the New York State Transmission System or Distribution System, the Connecting Transmission Owner’s Interconnection Facilities or the electric systems of others to which the New York State Transmission System or Distribution System is directly connected; or (3) that, in the case of the Interconnection Customer, is imminently likely (as determined in a non-discriminatory manner) to cause a material adverse effect on the security of, or damage to, the Small Generating Facility or the Interconnection Customer’s Interconnection Facilities. Under Emergency Conditions, the NYISO or Connecting Transmission Owner may immediately suspend interconnection service and temporarily disconnect the Small Generating Facility. The NYISO or Connecting Transmission Owner shall notify the Interconnection Customer promptly when it becomes aware of an Emergency Condition that may reasonably be expected to affect the Interconnection Customer’s operation of the Small Generating Facility. The Interconnection Customer shall notify the NYISO and Connecting Transmission Owner promptly when it becomes aware of an Emergency Condition that may reasonably be expected to affect the New York State Transmission System or Distribution System or any Affected Systems. To the extent information is known, the notification shall describe the Emergency Condition, the extent of the damage or deficiency, the expected effect on the operation of each Party’s facilities and operations, its anticipated duration, and the necessary corrective action.

3.4.2 Routine Maintenance, Construction, and Repair

The NYISO or Connecting Transmission Owner may interrupt interconnection service or curtail the output of the Small Generating Facility and temporarily disconnect the Small Generating Facility from the New York State Transmission System or Distribution System when necessary for routine maintenance, construction, and repairs on the New York State Transmission System or Distribution System. NYISO or the Connecting Transmission Owner shall provide the Interconnection Customer with five Business Days notice prior to such interruption. The NYISO and Connecting Transmission Owner shall use Reasonable Efforts to coordinate such reduction or temporary disconnection with the Interconnection Customer.

3.4.3Forced Outages

During any forced outage, the NYISO or Connecting Transmission Owner may suspend interconnection service to the Interconnection Customer to effect immediate repairs on the New York State Transmission System or the Distribution System. The NYISO shall use Reasonable Efforts to provide the Interconnection Customer with prior notice. If prior notice is not given, the NYISO shall, upon request, provide the Interconnection Customer written documentation after the fact explaining the circumstances of the disconnection.

3.4.4 Adverse Operating Effects

The NYISO or Connecting Transmission Owner shall notify the Interconnection Customer as soon as practicable if, based on Good Utility Practice, operation of the Small Generating Facility may cause disruption or deterioration of service to other customers served from the same electric system, or if operating the Small Generating Facility could cause damage to the New York State Transmission System, the Distribution System or Affected Systems, or if disconnection is otherwise required under Applicable Reliability Standards or the NYISO OATT. Supporting documentation used to reach the decision to disconnect shall be provided to the Interconnection Customer upon request. If, after notice, the Interconnection Customer fails to remedy the adverse operating effect within a reasonable time, the NYISO or Connecting Transmission Owner may disconnect the Small Generating Facility. The NYISO or Connecting Transmission Owner shall provide the Interconnection Customer with five Business Day notice of such disconnection, unless the provisions of article 3.4.1 apply.

3.4.5 Modification of the Small Generating Facility

The Interconnection Customer must receive written authorization from the NYISO and Connecting Transmission Owner before making any change to the Small Generating Facility that may have a material impact on the safety or reliability of the New York State Transmission System or the Distribution System. Such authorization shall not be unreasonably withheld. Modifications shall be done in accordance with Good Utility Practice. If the Interconnection Customer makes such modification without the prior written authorization of the NYISO and Connecting Transmission Owner, the Connecting Transmission Owner shall have the right to temporarily disconnect the Small Generating Facility. If disconnected, the Small Generating Facility will not be reconnected until the unauthorized modifications are authorized or removed.

3.4.6 Reconnection

The Parties shall cooperate with each other to restore the Small Generating Facility, Interconnection Facilities, and the New York State Transmission System and Distribution System to their normal operating state as soon as reasonably practicable following a temporary disconnection.

Article 4.Cost Responsibility for Interconnection Facilities and Distribution Upgrades

4.1Interconnection Facilities

4.1.1The Interconnection Customer shall pay for the cost of the Interconnection Facilities itemized in Attachment 2 of this Agreement. The NYISO, in consultation with the Connecting Transmission Owner, shall provide a best estimate cost, including overheads, for the purchase and construction of its Interconnection Facilities and provide a detailed itemization of such costs. Costs associated with Interconnection Facilities may be shared with other entities that may benefit from such facilities by agreement of the Interconnection Customer, such other entities, the NYISO, and the Connecting Transmission Owner.

4.1.2The Interconnection Customer shall be responsible for its share of all reasonable expenses, including overheads, associated with (1) owning, operating, maintaining, repairing, and replacing its own Interconnection Facilities, and (2) operating, maintaining, repairing, and replacing the Connecting Transmission Owner’s Interconnection Facilities, as set forth in Attachment 2 to this Agreement.

4.2Distribution Upgrades

The Connecting Transmission Owner shall design, procure, construct, install, and own the Distribution Upgrades described in Attachment 6 of this Agreement. If the Connecting Transmission Owner and the Interconnection Customer agree, the Interconnection Customer may construct Distribution Upgrades that are located on land owned by the Interconnection Customer. The actual cost of the Distribution Upgrades, including overheads, shall be directly assigned to the Interconnection Customer. The Interconnection Customer shall be responsible for its share of all reasonable expenses, including overheads, associated with owning, operating, maintaining, repairing, and replacing the Distribution Upgrades, as set forth in Attachment 6 to this Agreement.

Article 5.Cost Responsibility for System Upgrade Facilities and System Deliverability Upgrades

5.1Applicability

No portion of this article 5 shall apply unless the interconnection of the Small Generating Facility requires System Upgrade Facilities or System Deliverability Upgrades.

5.2System Upgrades

The Connecting Transmission Owner shall procure, construct, install, and own the System Upgrade Facilities and System Deliverability Upgrades described in Attachment 6 of this Agreement. To the extent that design work is necessary in addition to that already accomplished in the Class Year facilities study for the Interconnection Customer, the Connecting Transmission Owner shall perform or cause to be performed such work. If all the Parties agree, the Interconnection Customer may construct System Upgrade Facilities and System Deliverability Upgrades that are located on land owned by the Interconnection Customer.

5.2.1As described in Section 32.3.5.3 of the SGIP in Attachment Z of the NYISO OATT, the responsibility of the Interconnection Customer for the cost of the System Upgrade Facilities and System Deliverability Upgrades described in Attachment 6 of this Agreement shall be determined in accordance with Attachment S of the NYISO OATT as required by Section 32.3.5.3.2 of Attachment Z. The Interconnection Customer shall be responsible for all System Upgrade Facility costs as required by Section 32.3.5.3.2 of Attachment Z or its share of any System Upgrade Facilities and System Delivery Upgrades costs resulting from the final Attachment S process, as applicable, and Attachment 6 to this Agreement shall be revised accordingly.

5.2.2Pending the outcome of the Attachment S cost allocation process, if applicable, the Interconnection Customer may elect to proceed with the interconnection of its Small Generating Facility in accordance with Section 32.3.5.3 of the SGIP.

5.3Special Provisions for Affected Systems

For the repayment of amounts advanced to Affected System Operator for System Upgrade Facilities or System Deliverability Upgrades, the Interconnection Customer and Affected System Operator shall enter into an agreement that provides for such repayment, but only if responsibility for the cost of such System Upgrade Facilities is not to be allocated in accordance with Attachment S of the NYISO OATT. The agreement shall specify the terms governing payments to be made by the Interconnection Customer to Affected System operator as well as the repayment by Affected System Operator.

Article 6.Billing, Payment, Milestones, and Financial Security

6.1Billing and Payment Procedures and Final Accounting

6.1.1The Connecting Transmission Owner shall bill the Interconnection Customer for the design, engineering, construction, and procurement costs of Interconnection Facilities and Upgrades contemplated by this Agreement on a monthly basis, or as otherwise agreed by those Parties. The Interconnection Customer shall pay all invoice amounts within 30 calendar days after receipt of the invoice.

6.1.2Within three months of completing the construction and installation of the Connecting Transmission Owner’s Interconnection Facilities and/or Upgrades described in the Attachments to this Agreement, the Connecting Transmission Owner shall provide the Interconnection Customer with a final accounting report of any difference between (1) the Interconnection Customer’s cost responsibility for the actual cost of such facilities or Upgrades, and (2) the Interconnection Customer’s previous aggregate payments to the Connecting Transmission Owner for such facilities or Upgrades. If the Interconnection Customer’s cost responsibility exceeds its previous aggregate payments, the Connecting Transmission Owner shall invoice the Interconnection Customer for the amount due and the Interconnection Customer shall make payment to the Connecting Transmission Owner within 30 calendar days. If the Interconnection Customer’s previous aggregate payments exceed its cost responsibility under this Agreement, the Connecting Transmission Owner shall refund to the Interconnection Customer an amount equal to the difference within 30 calendar days of the final accounting report.

6.1.3If the Interconnection Customer disputes an amount to be paid, the Interconnection Customer shall pay the disputed amount to the Connecting Transmission Owner or into an interest bearing escrow account, pending resolution of the dispute in accordance with Article 10 of this Agreement. To the extent the dispute is resolved in the Interconnection Customer’s favor, that portion of the disputed amount will be credited or returned to the Interconnection Customer with interest at rates applicable to refunds under the Commission’s regulations. To the extent the dispute is resolved in the Connecting Transmission Owner’s favor, that portion of any escrowed funds and interest will be released to the Connecting Transmission Owner.

6.2Milestones

Subject to the provisions of the SGIP, the Parties shall agree on milestones for which each Party is responsible and list them in Attachment 4 of this Agreement. A Party’s obligations under this provision may be extended by agreement. If a Party anticipates that it will be unable to meet a milestone for any reason other than a Force Majeure event, it shall immediately notify the other Parties of the reason(s) for not meeting the milestone and (1) propose the earliest reasonable alternate date by which it can attain this and future milestones, and (2) requesting appropriate amendments to Attachment 4. The Party affected by the failure to meet a milestone shall not unreasonably withhold agreement to such an amendment unless it will suffer significant uncompensated economic or operational harm from the delay, (1) attainment of the same milestone has previously been delayed, or (2) it has reason to believe that the delay in meeting the milestone is intentional or unwarranted notwithstanding the circumstances explained by the Party proposing the amendment.

6.3Financial Security Arrangements

At least 20 Business Days prior to the commencement of the design, procurement, installation, or construction of a discrete portion of the Connecting Transmission Owner’s Interconnection Facilities and Upgrades, the Interconnection Customer shall provide the Connecting Transmission Owner, at the Interconnection Customer’s option, a guarantee, a surety bond, letter of credit or other form of security that is reasonably acceptable to the Connecting Transmission Owner and is consistent with the Uniform Commercial Code of the jurisdiction where the Point of Interconnection is located. Such security for payment shall be in an amount sufficient to cover the costs for constructing, designing, procuring, and installing the applicable portion of the Connecting Transmission Owner’s Interconnection Facilities and Upgrades and shall be reduced on a dollar-for-dollar basis for payments made to the Connecting Transmission Owner under this Agreement during its term. The Connecting Transmission Owner may draw on any such security to the extent that the Interconnection Customer fails to make any payments due under this Agreement. In addition:

6.3.1The guarantee must be made by an entity that meets the creditworthiness requirements of the Connecting Transmission Owner, and contain terms and conditions that guarantee payment of any amount that may be due from the Interconnection Customer, up to an agreed-to maximum amount.

6.3.2The letter of credit or surety bond must be issued by a financial institution or insurer reasonably acceptable to the Connecting Transmission Owner and must specify a reasonable expiration date.

6.3.3Notwithstanding the above, Security posted for System Upgrade Facilities for a Small Generating Facility required to enter the Class Year process, or cash or Security provided for System Deliverability Upgrades, shall meet the requirements for Security contained in Attachment S to the NYISO OATT.

Article 7.Assignment, Liability, Indemnity, Force Majeure, Consequential Damages, and Default

7.1Assignment

This Agreement, and each and every term and condition hereof, shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. This Agreement may be assigned by any Party upon 15 Business Days prior written notice and opportunity to object by the other Parties; provided that:

7.1.1A Party may assign this Agreement without the consent of the other Parties 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 that the Interconnection Customer promptly notifies the NYISO and the Connecting Transmission Owner of any such assignment. A Party may assign this Agreement without the consent of the other Parties in connection with the sale, merger, restructuring, or transfer of a substantial portion of all of its assets, including the Interconnection Facilities it owns, so long as the assignee in such a transaction directly assumes all rights, duties and obligation arising under this Agreement.

7.1.2The Interconnection Customer 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 Small Generating Facility.

7.1.3Any attempted assignment that violates this article is void and ineffective. Assignment shall not relieve a Party of its obligations, nor shall a Party’s obligations be enlarged, in whole or in part, by reason thereof. An assignee is responsible for meeting the same financial, credit, and insurance obligations as the Interconnection Customer. Where required, consent to assignment will not be unreasonably withheld, conditioned or delayed.

7.2Limitation of Liability

Each Party’s liability to the other Parties for any loss, cost, claim, injury, liability, or expense, including reasonable attorney’s fees, relating to or arising from any act or omission in its performance of this Agreement, shall be limited to the amount of direct damage actually incurred. In no event shall any Party be liable to the other Parties for any indirect, special, consequential, or punitive damages.

7.3Indemnity

7.3.1This provision protects each Party from liability incurred to third parties as a result of carrying out the provisions of this Agreement. ; provided, however, that any liability associated with the line relocation work described in Section F of Attachment 2 of this Agreement shall be addressed through the indemnity and release provisions set forth in Section F of Attachment 2 of this Agreement. Liability under this provision is exempt from the general limitations on liability found in article 7.2.

7.3.2Each Party (the “Indemnifying Party”) shall at all times indemnify, defend, and hold harmless 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 (any and all of these a “Loss”), arising out of or resulting from (i) the Indemnified Party’s performance 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 by the gross negligence or intentional wrongdoing by the Indemnified Party or (ii) the violation by the Indemnifying Party of any Environmental Law or the release by the Indemnifying Party of a Hazardous Substance.

7.3.3If a Party is entitled to indemnification under this article as a result of a claim by a third party, and the Indemnifying Party fails, after notice and reasonable opportunity to proceed under this article, 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.

7.3.4If an Indemnifying Party is obligated to indemnify and hold any Indemnified Party harmless under this article, 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.

7.3.5Promptly 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 this article 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.

7.4Consequential Damages

Other than as expressly provided for in this Agreement, no Party shall 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 another agreement will not be considered to be special, indirect, incidental, or consequential damages hereunder.

7.5Force Majeure

7.5.1As used in this article, a Force Majeure Event 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 an act of negligence or intentional wrongdoing.” For the purposes of this article, this definition of Force Majeure shall supersede the definitions of Force Majeure set out in Section 32.10.1 of the NYISO OATT.

7.5.2If an event of Force Majeure prevents a Party from fulfilling any obligations under this Agreement, the Party affected by the Force Majeure event (Affected Party) shall promptly notify the other Parties, either in writing or via the telephone, of the existence of the Force Majeure event. The notification must specify in reasonable detail the circumstances of the Force Majeure event, its expected duration, and the steps that the Affected Party is taking to mitigate the effects of the event on its performance. The Affected Party shall keep the other Parties informed on a continuing basis of developments relating to the Force Majeure event until the event ends. The Affected Party will be entitled to suspend or modify its performance of obligations under this Agreement (other than the obligation to make payments) only to the extent that the effect of the Force Majeure event cannot be mitigated by the use of Reasonable Efforts. The Affected Party will use Reasonable Efforts to resume its performance as soon as possible.

7.6Breach and Default

7.6.1No Breach of this Agreement shall exist where such failure to discharge an obligation (other than the payment of money) is the result of a Force Majeure event or the result of an act or omission of the other Parties. Upon a Breach, the non-breaching Party shall give written notice of such Breach to the Breaching Party. Except as provided in article 7.6.2, the Breaching Party shall have 60 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 60 calendar days, the Breaching Party shall commence such cure within 20 calendar days after notice and continuously and diligently complete such cure within six months from receipt of the Breach notice; and, if cured within such time, the Breach specified in such notice shall cease to exist.

7.6.2If a Breach is not cured as provided in this article, or if a Breach is not capable of being cured within the period provided for herein, a Default shall exist and the non-defaulting Parties acting together shall thereafter have the right to terminate this Agreement, in accordance with article 3.3 hereof, by written notice to the Defaulting Party 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 shall survive termination of this Agreement.

7.6.3In cases where the Interconnection Customer has elected to proceed under Section 32.3.5.3 of the SGIP, if the Interconnection Request is withdrawn or deemed withdrawn pursuant to the SGIP during the term of this Agreement, this Agreement shall terminate.

Article 8.Insurance

8.1The Interconnection Customer shall, at its own expense, maintain in force general liability insurance without any exclusion for liabilities related to the interconnection undertaken pursuant to this Agreement. The amount of such insurance shall be sufficient to insure against all reasonably foreseeable direct liabilities given the size and nature of the generating equipment being interconnected, the interconnection itself, and the characteristics of the system to which the interconnection is made. Such insurance coverage is specified in Attachment 7 to this Agreement. The Interconnection Customer shall obtain additional insurance only if necessary as a function of owning and operating a generating facility. Such insurance shall be obtained from an insurance provider authorized to do business in New York State where the interconnection is located. Certification that such insurance is in effect shall be provided upon request of the Connecting Transmission Owner, except that the Interconnection Customer shall show proof of insurance to the Connecting Transmission Owner no later than ten Business Days prior to the anticipated commercial operation date. An Interconnection Customer of sufficient creditworthiness may propose to self-insure for such liabilities, and such a proposal shall not be unreasonably rejected.

8.2The NYISO and Connecting Transmission Owner agree to maintain general liability insurance or self-insurance consistent with the existing commercial practice. Such insurance or self-insurance shall not exclude the liabilities undertaken pursuant to this Agreement.

8.3The Parties further agree to notify one another whenever an accident or incident occurs resulting in any injuries or damages that are included within the scope of coverage of such insurance, whether or not such coverage is sought.

Article 9.Confidentiality

9.1Confidential Information shall mean any confidential and/or proprietary information provided by one Party to the other Party that is clearly marked or otherwise designated “Confidential.” For purposes of this Agreement all design, operating specifications, and metering data provided by the Interconnection Customer shall be deemed Confidential Information regardless of whether it is clearly marked or otherwise designated as such. Confidential Information shall include, without limitation, information designated as such by the NYISO Code of Conduct contained in Attachment F to the NYISO OATT.

9.2Confidential Information does not include information previously in the public domain, required to be publicly submitted or divulged by Governmental Authorities (after notice to the other Party and after exhausting any opportunity to oppose such publication or release), or necessary to be divulged in an action to enforce this Agreement. Each Party receiving Confidential Information shall hold such information in confidence and shall not disclose it to any third party nor to the public without the prior written authorization from the Party providing that information, except to fulfill obligations under this Agreement, or to fulfill legal or regulatory requirements.

9.2.1Each Party shall employ at least the same standard of care to protect Confidential Information obtained from the other Parties as it employs to protect its own Confidential Information.

9.2.2Each Party is entitled to equitable relief, by injunction or otherwise, to enforce its rights under this provision to prevent the release of Confidential Information without bond or proof of damages, and may seek other remedies available at law or in equity for breach of this provision.

9.3Notwithstanding anything in this article to the contrary, and pursuant to 18 CFR § lb.20, if FERC, 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, the Party shall provide the requested information to FERC, within the time provided for in the request for information. In providing the information to FERC, the Party may, consistent with 18 CFR § 388.112, request that the information be treated as confidential and non-public by FERC and that the information be withheld from public disclosure. Each Party is prohibited from notifying the other Parties to this Agreement prior to the release of the Confidential Information to FERC. The Party shall notify the other Parties to this Agreement when it is notified by FERC that a request to release Confidential Information has been received by FERC, at which time either of the Parties may respond before such information would be made public, pursuant to 18 CFR § 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.

9.4Consistent with the provisions of this article 9, the Parties to this Agreement will cooperate in good faith to provide each other, Affected Systems, Affected System Operators, and state and federal regulators the information necessary to carry out the terms of the SGIP and this Agreement.

Article 10. Disputes

10.1The NYISO, Connecting Transmission Owner and Interconnection Customer agree to attempt to resolve all disputes arising out of the interconnection process according to the provisions of this article.

10.2In the event of a dispute, the Parties will first attempt to promptly resolve it on an informal basis. The NYISO will be available to the Interconnection Customer and Connecting Transmission Owner to help resolve any dispute that arises with respect to performance under this Agreement. If the Parties cannot promptly resolve the dispute on an informal basis, then any Party shall provide the other Parties with a written Notice of Dispute. Such Notice shall describe in detail the nature of the dispute.

10.3If the dispute has not been resolved within two Business Days after receipt of the Notice, any Party may contact FERC’s Dispute Resolution Service (DRS) for assistance in resolving the dispute.

10.4The DRS will assist the Parties in either resolving their dispute or in selecting an appropriate dispute resolution venue (e.g., mediation, settlement judge, early neutral evaluation, or technical expert) to assist the Parties in resolving their dispute. The result of this dispute resolution process will be binding only if the Parties agree in advance. DRS can be reached at 1-877-337-2237 or via the internet at http://www.ferc.gov/legal/adr.asp.

10.5Each Party agrees to conduct all negotiations in good faith and will be responsible for one-third of any costs paid to neutral third-parties.

10.6If any Party elects to seek assistance from the DRS, or if the attempted dispute resolution fails, then any Party may exercise whatever rights and remedies it may have in equity or law consistent with the terms of this Agreement.

Article 11. Taxes

11.1The Parties agree to follow all applicable tax laws and regulations, consistent with FERC policy and Internal Revenue Service requirements.

11.2Each 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.

11.3LIPA 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.

11.4Any payments due to the Connecting Transmission Owner under this Agreement shall be adjusted to include any tax liability incurred by the Connecting Transmission Owner with respect to the interconnection request which is the subject of this Agreement. Such adjustments shall be made in accordance with the provisions of Article 5.17 of the LGIA in Attachment X of the NYISO OATT. Except where otherwise noted, all costs, deposits, financial obligations and the like specified in this Agreement shall be assumed not to reflect the impact of applicable taxes.

Article 12. Miscellaneous

12.1Governing Law, Regulatory Authority, and Rules

The validity, interpretation and enforcement 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. This Agreement is subject to all Applicable Laws and Regulations. Each Party expressly reserves the right to seek changes in, appeal, or otherwise contest any laws, orders, or regulations of a Governmental Authority.

12.2Amendment

The Parties may amend this Agreement by a written instrument duly executed by the Parties, or under article 12.12 of this Agreement.

12.3No Third-Party Beneficiaries

This Agreement is not intended to and does not create rights, remedies, or benefits of any character whatsoever in favor of any persons, corporations, associations, or entities other than the Parties, and the obligations herein assumed are solely for the use and benefit of the Parties, their successors in interest and where permitted, their assigns. Notwithstanding the foregoing, any subcontractor of the Connecting Transmission Owner or NYISO assisting either of those Parties with the Interconnection Request covered by this Agreement shall be entitled to the benefits of indemnification provided for under Article 7.3 of this Agreement and the limitation of liability provided for in Article 7.2 of this Agreement.

12.4Waiver

12.4.1The 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.

12.4.2Any waiver at any time by a 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 Interconnection Customer shall not constitute a waiver of the Interconnection Customer’s legal rights to obtain an interconnection from the NYISO. Any waiver of this Agreement shall, if requested, be provided in writing.

12.5Entire Agreement

This Agreement, including all Attachments, 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, any Party’s compliance with its obligations under this Agreement.

12.6Multiple 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.

12.7No Partnership

This Agreement shall not be interpreted or construed to create an association, joint venture, agency relationship, or partnership between the Parties or to impose any partnership obligation or 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, another Party.

12.8Severability

If any provision or portion of this Agreement shall for any reason be held or adjudged to be invalid or illegal or unenforceable by any court of competent jurisdiction or other Governmental Authority, (1) such portion or provision shall be deemed separate and independent, (2) the Parties shall negotiate in good faith to restore insofar as practicable the benefits to each Party that were affected by such ruling, and (3) the remainder of this Agreement shall remain in full force and effect.

12.9Security Arrangements

Infrastructure security of electric system equipment and operations and control hardware and software is essential to ensure day-to-day reliability and operational security. FERC expects the NYISO, the Connecting Transmission Owner, Market Participants, and Interconnection Customers interconnected to electric systems 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 are expected to meet basic standards for system infrastructure and operational security, including physical, operational, and cyber-security practices.

12.10Environmental Releases

Each Party shall notify the other Parties, 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 Small Generating Facility or the Interconnection Facilities, each of which may reasonably be expected to affect the other Parties. The notifying Party shall (1) provide the notice as soon as practicable, provided such Party makes a good faith effort to provide the notice no later than 24 hours after such Party becomes aware of the occurrence, and (2) promptly furnish to the other Parties copies of any publicly available reports filed with any governmental authorities addressing such events.

12.11Subcontractors

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 Parties for the performance of such subcontractor.

12.11.1 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 Parties to the extent provided for in Sections 32.7.2 and 32.7.3 above 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 the NYISO or Connecting Transmission Owner be liable for the actions or inactions of the Interconnection Customer or its subcontractors with respect to obligations of the Interconnection Customer under 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.

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

12.12Reservation of Rights

Nothing in this Agreement shall alter the right of the NYISO or Connecting Transmission Owner 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 which rights are expressly reserved herein, and the existing rights of the Interconnection Customer to make a unilateral filing with FERC to modify this Agreement under any applicable provision of the Federal Power Act and FERC’s rules and regulations are also expressly reserved herein; 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, except to the extent that the Parties otherwise agree as provided herein.

Article 13. Notices

13.1General

Unless otherwise provided in this Agreement, any written notice, demand, or request required or authorized in connection with this Agreement (“Notice”) shall be deemed properly given if delivered in person, delivered by recognized national currier service, or sent by first class mail, postage prepaid, to the person specified below:

If to the Interconnection Customer:

Interconnection Customer: AES ES Westover, LLC

Attention: John Zahurancik, Vice President

Address: 4300 Wilson Blvd, Suite 1100

City: Arlington State: VA Zip: 22203

Phone: (703) 522-1315Fax: 703-528-4510

If to the Connecting Transmission Owner:

Connecting Transmission Owner: New York State Electric & Gas Corporation

Attention: Manager Programs/Projects; Electric Transmission Services

Address: 18 Link Drive

City: Binghamton State: NY Zip: 13902-5224

Phone: (607) 762-8073Fax: (607) 762-8666

If to the NYISO:

Before Commercial Operation of the Small Generating Facility

Attention: Vice President, System and Resource Planning

Address: 10 Krey Boulevard

City: Rensselaer State: NY Zip: 12144

Phone: (518) 356-6000 Fax: (518) 356-6118

After Commercial Operation

Attention: Vice President, Operations

Address: 3890 Carman Road

City: SchenectadyState: NYZip: 12303

Phone: (518) 356-6000Fax: (518) 356-6118

13.2Billing and Payment

Billings and payments shall be sent to the addresses set out below:

Interconnection Customer: AES ES Westover, LLC

Attention: John Zahurancik, Vice President

Address: 4300 Wilson Blvd, Suite 1100

City: Arlington State: VA Zip: 22203

Phone: (703) 522-1315Fax: (703) 528-4510

Connecting Transmission Owner: New York State Electric & Gas Corporation

Attention: Manager, Programs/Projects; Electric Transmission Services

Address: 18 Link Drive

City: Binghamton State: NY Zip: 13902-5224

Phone: (607) 762-8073Fax: (607) 762-8666

13.3Alternative Forms of Notice

Any notice or request required or permitted to be given by either Party to the other and not required by this Agreement to be given in writing may be so given by telephone, facsimile or e-mail to the telephone numbers and e-mail addresses set out below:

If to the Interconnection Customer:

Interconnection Customer: AES ES Westover, LLC

Attention: John Zahurancik, Vice President

Address: 4300 Wilson Blvd, Suite 1100

City: Arlington State: VA Zip: 22203

Phone: (703) 522-1315Fax: (703) 528-4510

If to the Connecting Transmission Owner:

Connecting Transmission Owner: New York State Electric & Gas Corporation

Attention: Manager Programs/Projects; Electric Transmission Systems

Address: 18 Link Drive

City: Binghamton State: NY Zip: 13902-5224

Phone: (607) 762-7606 Fax: (607) 762-8666

If to the NYISO:

Attention: Vice President, Operations

Address: 3890 Carman Rd

City: Schenectady State: NY Zip: 12303

Phone: (518) 356-6000Fax: (518) 356-6118

13.4Designated Operating Representative

The Parties may also designate operating representatives to conduct the communications which may be necessary or convenient for the administration of this Agreement. This person will also serve as the point of contact with respect to operations and maintenance of the Party’s facilities.

Interconnection Customer’s Operating Representative: Customized Energy Solutions, LTD

Attention: Erik Paulson, Vice-President, Wholesale Market Services

Address: 1528 Walnut St, 22nd Floor

City: Philadelphia State: PA Zip: 19102

Phone: 215-875-9440 Fax: 215 875 9490

Transmission Provider’s Operating Representative:

Transmission Provider: New York State Electric & Gas Corporation

Attention: Manager Programs/Projects; Electric Transmission Services

Address: 18 Link Drive

City: Binghamton State: NY Zip: 13902-5224

Phone: (607) 762-8073Fax: (607) 762-8666

NYISO’s Operating Representative:

Attention: Vice President, Operations

Address: 3890 Carman Rd

City: Schenectady State: NY Zip: 12303

Phone: (518) 356-6000Fax: (518) 356-6118

13.5Changes to the Notice Information

Either Party may change this information by giving five Business Days written notice prior to the effective date of the change.

Article 14. Signatures

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

For the NYISO

Name:/s/ Henry Chao

Title: Vice President, System & Resource Planning

Date:12/26/2012

For the Connecting Transmission Owner: New York Electric & Gas Corporation

Name:/s/ David Kimiecik

Title: Vice President – Energy Services

Date:12/26/2012

For the Interconnection Customer: AES ES Westover, LLC

Name:/s/ Dauren Kilish

Title: Vice President

Date:12/26/2012

Effective Date: 12/26/2012 - Docket #: ER13-789-000 - Page 1

NYISO Agreements --> SGIA No. 1677 Among NYISO, NYSEG, and AES ES Westover

Attachment 2

Detailed Scope of Work, Including Description and Costs of the Small Generating Facility, Interconnection Facilities, and Metering Equipment

Equipment, including the Small Generating Facility, Interconnection Facilities, and metering equipment shall be itemized and identified as being owned by the Interconnection Customer, or the Connecting Transmission Owner. The NYISO, in consultation with the Connecting Transmission Owner, will provide a best estimate itemized cost, including overheads, of its Interconnection Facilities and metering equipment, and a best estimate itemized cost of the annual operation and maintenance expenses associated with its Interconnection Facilities and metering equipment.

A. PROJECT DESCRIPTION

Plant

Address: AES ES WESTOVER, LLC

720 Riverside Dr.

Johnson City, NY 13790

The Interconnection Customer is developing a Small Generating Facility, which is a Grid Stability and Efficiency system (“GSE”) to be rated at 20 MW, at the site of the retired AES Westover generating station located in the Town of Union in Broome County, New York (“Westover Generating Station”). The GSE system is based on an advanced energy storage system, capable of providing 20 MW of regulation service. The 20 MW system will consist of ten 2 MW battery/inverter containers (units). Each unit consists of two 1 MW Parker SSD Drives, AC890PX AFE (Active Front End) inverter sections supplying a lithium Ion Nano-phosphate battery manufactured by A123 Systems. Two 2 MW units form the basis of a 4 MW module. As of the date of this Amended and Restated Agreement, the project consists of two 4 MW modules (8 MW total), and will be expanded with three additional modules (Phase II 12 MW) at the time of commercial operation for Phase II by the Interconnection Customer. The Phase II proposed commercial operation date will be reviewed by the NYISO as applicable.

The Small Generating Facility connects to Connecting Transmission Owner’s 115 kV & 34.5 kV electric systems via the existing group operated air break switch 7B-35, and the existing three winding, 3-16,667 kVA, 13.8-34.5-114.3 kV Transformer Bank 7 (three single phase transformers) located in the NYSEG 115kV Goudey Substation. The Small Generating Facility connects at 13.8 kV to the existing Westover Generating Station Unit 7 13.8 kV Switchgear, via switchgear breaker 7B-31. Each 4 MW module is stepped up to 13.8 kV through a 3 phase, 480V-13.8kV, 4 MVA, delta-delta transformer. The Small Generating Facility will be stepped up to 115 kV and 34.5 kV through Transformer Bank 7.

The Interconnection Facilities required for the Small Generating Facility are comprised of existing equipment, listed below in Section B and Section C of this Attachment 2.

The Point of Change of Ownership for the Interconnection Facilities for the Small Generating Facility is the Interconnection Customer’s side of Switch 7B-35, owned by the Connecting Transmission Owner as shown on the one-line diagram provided in Attachment 3 to this Agreement. The Point of Interconnection for the Small Generating Facility will be the 115 kV bus tap in the NYSEG 115 kV Goudey Substation and the 34.5 kV bus tap in the NYSEG 34.5 kV Goudey Substation as shown on the one-line diagram provided in Attachment 3 to this Agreement.

It is anticipated that the Westover Generating Station will be sold and dismantled in 2013. The 07-31 breaker and the Unit 7 13.8 kV Switchgear lineup are Interconnection Customer’s Interconnection Facilities and were used to service the recently retired Unit 7 generator that was located at the Westover Generating Station and are currently located on the turbine floor inside the Westover Generating Station. Pursuant to the Stipulation Among Debtors, Purchaser and AES ES Westover, LLC, dated October 9, 2012, Interconnection Customer is obligated, at its sole cost and expense, to remove the 07-31 breaker and the Unit 7 13.8 kV Switchgear lineup, along with certain other equipment, from the Westover Generating Station to a new building to be constructed by the Interconnection Customer on property that it owns by the later of February 28, 2013 or 60 days after the closing of the sale of the Westover Generating Station. The Interconnection Customer will perform certain work related to the relocation of these facilities as described below in Section G of this Attachment 2.

B. INTERCONNECTION CUSTOMER’S INTERCONNECTION FACILITIES

As depicted in Attachment 3, the Interconnection Customer’s Interconnection Facilities are all existing equipment located in NYSEG’s 115 kV and 34.5 kV Goudey Substations and in the AES Westover Generating Station consisting of:

One (1) 15 kV, 3000 A, 38 kA oil/air circuit breaker;
One (1) 15 kV, 1200 A, 38 kA oil/air circuit breaker;
One (1) 15 kV, 3000 A, 37 kA vacuum circuit breaker;
Two (2) 15 kV, 3000 A Group operated indoors air break switches;
Two (2) 15 kV, 1200 A Group operated indoors air break switches;
One (1) three phase, two winding, 13.8 – 2.4 kV delta-delta station service transformer rated 4500/6750 kVA (AA/FA).with 6.5% @ 4500 kVA;
Three (3) 14,400 – 120 V Voltage Transformers for relaying;
Two (2) 13,800 – 115 V Voltage Transformers for relaying;

C.CONNECTING TRANSMISSION OWNER’S INTERCONNECTION FACILITIES

As depicted in Attachment 3, the Connecting Transmission Owner’s Interconnection Facilities are all existing equipment located in NYSEG’s 115 kV and 34.5 kV Goudey Substations and in the AES Westover Generating Station consisting of:

Three (3) single phase, three winding, 13.8-34.5-114.3 kV delta-delta-wye, step-up transformer rated 16,667/22,222 kVA (OA/FA), with 11% impedance @ 22,222 kVA;
One (1) 69 kV, 600 A Manual air break switch;
One (1) 15 kV, 3000 A Group operated air break switch;
One (1) 123 kV, 2000 A, 550 kVBIL, 40 kA SF6 circuit breaker;
One (1) 38 kV, 1200 A, 200 kVBIL, 40 kA vacuum circuit breaker;
One (1) 34.5 kV, 1200 A Group operated air break switch;
One (1) 69 kV-69/115 V sensing voltage transformer; and
One (1) 34.5 kV-69/115 V sensing voltage transformer.
One (1) 115 kV, 600 A Group operated air break switch;
Two (2) Transdata Mark V revenue meters;
One (1) QEI Remote Terminal Unit;
Two (2) SCADA Transducers Watt/Var;
Two (2) Sets Instrument Transformers (VTs & CTs) associated with metering; and
Lot-Metering equipment (AOC modules, Junction boxes).

D.SCOPE OF WORK AND RESPONSIBILITIES

i. Interconnection Customer’s Scope of Work and Responsibilities

The Interconnection Customer is responsible for relocation of the07-31 breaker and the Unit 7 13.8 kV Switchgear lineup.

ii. Connecting Transmission Owner’s Scope of Work and Responsibilities

The Connecting Transmission Owner will upgrade the existing Remote Terminal Unit (“RTU”) that is located in the AES Westover Generating Station switchyard control room. The Connecting Transmission Owner will develop and implement the NYSEG’s Energy Control Center (“ECS”) to incorporate the new ECS display’s and the required data transfers to and from the NYISO. This work includes engineering, design, field labor and updating drawings.

iii. Commissioning Tests

The Connecting Transmission Owner will witness the final commissioning tests. The Interconnection Customer will provide test reports for each relay, test reports for each current transformer, and a completed Checkout Form, stamped and signed by a New York State Professional Engineer. The Connecting Transmission Owner will verify that the proper relay settings are loaded into each relay, determine that the RTU is fully operational, and determine that metering is functional.

E.ESTIMATED COSTS OF INTERCONNECTION FACILITIES

Description	Estimated Costs
Upgrade existing RTU located at AES Westover Generating Station.	$11,100
Develop and implement NYSEG’s ECS modeling and display. Engineer and implement data transfers to and from Interconnection Customer, Connecting Transmission Owner, and NYISO.	$50,000
Total Upgrade Costs	$61,100

LINE Relocation WORK

In addition to the work on the Interconnection Facilities required for the electrical interconnection of the Small Generating Facility, the Connecting Transmission Owner will relocate the 34.5 kV transmission line 356 and distribution circuits as required to establish the required right of way distance from the Small Generating Facility (“Relocation Work”). Relocation Work includes relocating two structures and adding one new structure near the Small Generating Facility. Relocation Work also includes relocating 445 feet of 15 kV OH distribution underbuild L763. The Relocation Work involves:

installing 445 feet of 3-477 PAAC primary,
framing of four structures,
replacing two anchor / guys,
installing one additional 35ft distribution pole / anchor for guying,
relocating/replacing an existing pole-mounted transformer, and
removal of existing facilities.

Until such time as the Relocation Work is completed, the Interconnection Customer shall indemnify, defend and hold harmless the NYISO and the Connecting Transmission Owner as well as their officers, directors, owners, employees, agents, successors and assigns and all other related persons or entities (the “Indemnified Parties”) from and against any and all claims, suits, actions, debts, damages, costs (including court costs), charges and expenses (including reasonable attorneys’ fees), and against all other liabilities, losses and damages of any nature whatsoever incurred by the Indemnified Parties which arise in any way, directly or indirectly, out of the Interconnection Customer’s presence, by encroachment or otherwise, on the easements associated with the 34.5 kV transmission line 356 and distribution circuits.

Interconnection Customer acknowledges that should the Connecting Transmission Owner’s transmission and distribution facilities, which, until the Relocation Work is completed, are in proximity to the Interconnection Customer’s facilities as a result of Interconnection Customer’s encroachment, experience a fault or failure or should they come down for any reason, Interconnection Customer’s facilities may be severely damaged or completely destroyed. In such event Interconnection Customer hereby forever releases the Indemnified Parties from any liability therefrom and covenants not to seek any recovery from the Indemnified Parties, whether at law or in equity.

ESTIMATED COSTS OF LINE RELOCATION WORK

Description	Estimated Costs
Survey/Design	$6,000
Clearing & Chemical Treatment	$4,000
Relocate 445 ft of 15KV Distribution Underbuild L763	$21,148
Construction on Wood Poles	$61,000
Conductor and Static Wire	$4,000
Subtotal: Capital Costs	$96,148
Removal	$5,000
TOTAL PROJECT (Capital & Non-Capital):	$101,148

The Interconnection Customer shall be responsible for the actual cost of the Relocation Work. The Connecting Transmission Owner will invoice the Interconnection Customer for the Relocation Work on a monthly basis in accordance with Section 6.1 of this Agreement.

G. Relocation of Breaker 07-31 AND THE UNIT 7 13.8 kV SWITCHGEAR LINEUP

As part of the relocation of Breaker 07-31, the Connecting Transmission Owner will, at Interconnection Customer’s expense, undertake such work as is required to connect Breaker 07-31 at its new location (“Relocation Work”).

The Interconnection Customer shall be responsible for the actual cost of the Relocation Work.

H. O&M EXPENSES FOR CONNECTING TRANSMISSION OWNER’S INTERCONNECTION FACILITIES

In accordance with Article 4.1.2 of this SGIA, the Interconnection Customer shall

be responsible for all reasonable expenses (“O&M Expenses”) associated with the

operation, maintenance, repair and replacement of the Connecting Transmission Owner’s

Interconnection Facilities listed at Section C of this Attachment.

Commencing on the effective date of this Amended and Restated SGIA, the Interconnection Customer shall pay Connecting Transmission Owner for all actual O&M Expenses incurred by the Connecting Transmission Owner, which expenses shall be billed by the Connecting Transmission Owner quarterly as accumulated during the quarter for which they were incurred. Connecting Transmission Owner shall promptly, but no later than March 31, 2013, provide the Interconnection Customer with a statement of the Cost of Connecting Transmission Owner Interconnection Facilities for inclusion the table set forth in Attachment 2, Section E. The Interconnection Customer shall have seven days following the receipt of such statement of the Cost of Connecting Transmission Owner Interconnection Facilities to notify Connecting Transmission Owner of its election to pay such O&M Expenses either under the procedure described in Option 1 or Option 2 below.

Option 1:

The Interconnection Customer shall pay to Connecting Transmission Owner for O&M Expenses each month during the term of this Agreement an amount equal to 1/12 of the product of 9% and the total cost of such Connecting Transmission Owner Interconnection Facilities as listed at Section D of this Attachment.

Estimated Monthly O&M calculation = 1/12 x 0.09 x $[to be provided]

Estimated Monthly O&M payment = $ [to be calculated]

The Connecting Transmission Owner will invoice the Interconnection Customer for all O&M payments due to be made by the Interconnection Customer on a monthly basis in accordance with Section 6.1 of this Agreement.

Option 2:

The Interconnection Customer shall pay for all actual O&M Expenses incurred by the Connecting Transmission Owner, which expenses shall be billed by the Connecting Transmission Owner quarterly as accumulated during the quarter for which they were incurred.

Effective Date: 12/26/2012 - Docket #: ER13-789-000 - Page 1

	Milestone	Date	Responsible Party
(1)	Complete Engineering Design	Completed	Connecting Transmission Owner
(2)	Place Equipment Orders	Completed	Connecting Transmission Owner
(3)	Commence Small Generating Facility construction	Completed	Interconnection Customer
(4)	Complete Interconnection Customer’s Interconnection Facilities (SRS Substation)	Completed	Interconnection Customer
(5)	Complete Connecting Transmission Owner RTU upgrades	Completed	Connecting Transmission Owner
(6)	Complete Connecting Transmission Owner Energy Control Center Modeling	Completed	Connecting Transmission Owner
(7)	Testing and commissioning, Phase I – 8 MW	Completed	Interconnection Customer/Connecting Transmission Owner
(8)	In-Service Date, Phase I (8 MW)	Completed	Interconnection Customer
(9)	Line Relocation Work	Completed	Connecting Transmission Owner
(10)	Breaker Relocation Work	Later of Feb 28, 2013 or 60 days following the close of sale of Westover Generating Station	Inteconnection Customer
(11)	Testing and commissioning, Phase II – 12 MW	TBD subject to review as applicable.	Interconnection Customer
(12)	In-Service Date Phase II (12 MW)	Under Consideration, subject to review as applicable	Interconnection Customer