alston bird - pjm interconnection · march 1, 2017 ... planning and operation of their respective...

ALSTON&BIRD LLPThe Atlantic Building

950 F Street, NW Washington, DC 20004-1404

202-239-3300 Fax:202-239-3333 www.alston.com

March 1, 2017

The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, DC 20426

Re: Mid-Atlantic Interstate Transmission, LLC Operating and Interconnection Agreement With Metropolitan Edison Company Docket No. ER17-1072-000

Pursuant to Section 205 of the Federal Power Act,1 Mid-Atlantic Interstate Transmission, LLC (“MAIT”) submits for filing an Operating and Interconnection Agreement between MAIT and Metropolitan Edison Company (“MetEd”). The parties have entered into the agreement in connection with the integration of MAIT into PJM and MAIT’s acquisition of the transmission assets previously owned by MetEd and Pennsylvania Electric Company (“Penelec”).2

I. Background

MAIT is a newly-formed Delaware limited liability company. It is a stand-alone transmission company and a wholly-owned subsidiary of FirstEnergy Transmission, LLC (“FET”).3 MAIT owns no generation and provides no retail utility service. On January 31, 2017, MAIT acquired the transmission assets previously owned and operated by MetEd and Penelec in PJM.

MetEd is a Pennsylvania corporation, owning and operating electric facilities for the distribution of electric power and energy in Pennsylvania.

1 16 U.S.C. § 824d (2006). 2 Pursuant to Order No. 714, this filing is submitted by PJM Interconnection, L.L.C. (“PJM”) on behalf of MAIT, as part of an XML filing package that conforms with the Commission’s regulations. PJM has agreed to make all filings on behalf of the PJM Transmission Owners in order to retain administrative control over the PJM Tariff. Thus, MAIT has requested that PJM submit this agreement in the eTariff system as part of PJM’s electronic Service Agreements Tariff. 3 FET, formerly known as Allegheny Energy Transmission, LLC, is a direct, wholly-owned subsidiary of FirstEnergy. FET is the parent company of two stand-alone transmission subsidiaries, American Transmission Systems, Incorporated and Trans-Allegheny Interstate Line Company, and has an ownership interest in Potomac-Appalachian Transmission Highline, LLC.

The Honorable Kimberly D. Bose March 1, 2017

II. Description of Filing

A. The Operating and Interconnection Agreement

The electric systems of the parties are interconnected at multiple points of interconnection. Thus, they have entered into the agreement to establish the terms and conditions governing the interconnection, planning and operation of their respective systems, in coordination with PJM, and to define the continuing responsibilities and obligations of the parties with respect thereto. The interconnection points are specified and described in Appendix B to the agreement. The parties may add new interconnection points or discontinue or modify existing interconnection points. The agreement includes an Agency Agreement, which authorizes MAIT to act as MetEd’s agent with regard to the use of MetEd’s distribution facilities for transmission service to certain MetEd wholesale customers and for certain other purposes. The agreement does not impose any charge on either party for the mutual interconnection, planning and operation services provided under the agreement.

Pursuant to Commission precedent, PJM is a signatory to the agreement for the limited purpose of ensuring that PJM is kept fully apprised of the matters addressed herein and so that PJM may be kept aware of any reliability and planning issues that may arise.4

The Interconnection Agreement has been designated as Service Agreement No.

4577 under the PJM Open Access Transmission Tariff (“PJM Tariff”). III. Additional Information

A. Proposed Effective Date and Request for Waiver MAIT requests an effective date of February 1, 2017 for the Interconnection Agreement. As noted above, the agreement is designated as a service agreement under the PJM Open Access Transmission Tariff. Pursuant to Rule 35.3(a)(2) of the Commission’s rules, applicants are permitted to submit service agreements up to 30 days after commencement of service.5 The proposed effective date of February 1, 2017 is well within this permitted window.

4 American Electric Power Service Corporation, 110 FERC ¶ 61,276 at P 8, order on reh'g, 112 FERC ¶ 61,128 at PP 10-14 (2005). 5 18 CFR § 35.3(a)(2) (“Service agreements. Service agreements that are required to be filed and posted authorizing a customer to take electric service under the terms of a tariff, or any part thereof, shall be tendered for filing with the Commission and posted not more than 30 days after electric service has commenced or such other date as may be specified by the Commission.”)


B. Communications Please place the names of the following persons on the official service list established by the Secretary in this proceeding:

Stacey Burbure* Morgan Parke* Attorney Assistant General Counsel FirstEnergy Service Company FirstEnergy Service Company 801 Pennsylvania Ave, NW 76 South Main Street Suite 310 Akron, Ohio 44308 Washington, DC 20004 [email protected] [email protected]

Kenneth G. Jaffe Richard P. Sparling* Alston & Bird, LLP 950 F Street, NW Washington, DC 20004 (202) 239-3300 [email protected] [email protected] * Designated to receive service. Pursuant to 18 C.F.R. § 385.2010, MAIT respectfully requests waiver to permit more than two individuals to receive service in this proceeding.

C. List of Documents Submitted With Filing

Together with this filing letter, MAIT submits the following attachments to ensure that the agreement is properly recorded in the eTariff database.

Attachment A: Service Agreement No. 4577; and

Attachment B: Signature pages in pdf format.

D. Additional 35.13 Filing Requirements

Information Required Under 18 CFR § 35.13 and Requests for Waiver Because, as demonstrated herein, this filing will not result in a rate increase, the filing requirements of 18 CFR §§ 35.13(b) and 35.13(c) apply. See 18 CFR § 35.13(a)(2)(iii).


18 CFR § 35.13(b) Requirements 1. A list of documents submitted with the filing: See Section III.C.

2. The date on which the utility proposes to make the rate change effective: February 1, 2017.

3. The names and addresses of persons to whom a copy of the rate change

has been posted: Copies of this filing, including all attachments, have been served on State regulators in Pennsylvania.

4. A brief description of the rate change: See Section II. 5. A statement of the reasons for the rate change: See Sections I and II. 6. A showing that all requisite agreement to the rate change, or to the filing

of the rate change, including any agreement required by contract, has in fact been obtained: No agreement to the rate change, or to the filing of the rate change, is required.

7. A statement showing any expenses or costs that have been alleged or

judged in any administrative or judicial proceeding to be illegal, duplicative, or unnecessary costs that are demonstrably the product of discriminatory employment practices: No such expenses or costs exist.

18 CFR § 35.13(c) Requirements

1. A table or statement comparing sales and services and revenues: Not applicable. This filing will not result in any change in sales, services or revenues.

2. A comparison of the rate change and the utility's other rates for similar wholesale for resale and transmission services: Not applicable. This filing will not result in any change in rates.

3. If any specifically assignable facilities have been or will be installed or modified in order to supply service under the rate change, an appropriate map or sketch and single line diagram showing the additions or changes to be made: Not applicable. No assignable facilities have been or will be installed or modified in order to supply service under this filing.

Finally, the information submitted with this filing substantially complies with the requirements of Part 35 of the Commission’s rules and regulations applicable to filings of this type. MAIT requests a waiver of any applicable requirement of Part 35 for which a


waiver is not specifically requested, if necessary, in order to permit this filing to become effective as proposed.

E. Service

Copies of this filing, including all attachments, have been served on State

regulators in Pennsylvania. Please contact the undersigned if you have any questions.

Respectfully submitted, Morgan Parke Assistant General Counsel FirstEnergy Service Company 76 South Main Street Akron, Ohio 44308 [email protected]

/s/ Kenneth G. Jaffe Kenneth G. Jaffe Richard P. Sparling Alston & Bird, LLP 950 F Street, NW Washington, DC 20004

Stacey Burbure Attorney FirstEnergy Service Company 801 Pennsylvania Ave, NW Suite 310 Washington, DC 20004 [email protected]

Attorneys for the Mid-Atlantic Interstate Transmission, LLC

OPERATING AND INTERCONNECTION AGREEMENT

Between

Mid-Atlantic Interstate Transmission, LLC

And

Metropolitan Edison Company

Tariff Submitter: PJM Interconnection, L.L.C. Proposed Effective Date: February 1, 2017FERC Tariff Program: FERC FPA Electric TariffTariff Title: PJM Service Agreements TariffTariff Record Title: PJM SA No. 4577 between MAIT and MetEdOption Code A

Original Service Agreement No. 4577Effective Date: February 1, 2017


Between


And

Metropolitan Edison Company


Between Mid-Atlantic Interstate Transmission, LLCand Metropolitan Edison Company

THIS OPERATING AND INTERCONNECTION AGREEMENT, including allappendices attached hereto (hereinafter “Agreement”) is entered into by Mid-Atlantic InterstateTransmission, LLC (“MAIT”) and Metropolitan Edison Company (“Met-Ed”) (individually a“Party” and collectively the “Parties”). The terms “Party” and “Parties” as used herein shall notinclude PJM Interconnection, L.L.C. (“PJM”).

RECITALS

WHEREAS, MAIT is a Delaware limited liability company formed to plan, construct, own,operate, upgrade and maintain new transmission facilities and existing Transmission Facilitiescontributed by the FirstEnergy East Operating Companies;

WHEREAS Met-Ed is a Pennsylvania corporation, owning and operating electric facilities forthe distribution of electric power and energy in Pennsylvania;

WHEREAS, on January 31, 2017, Met-Ed and its affiliate Pennsylvania Electric Company(collectively, the “FirstEnergy East Operating Companies”) delivered a Capital ContributionAgreement conveying ownership of the Transmission Facilities to MAIT;

WHEREAS, Met-Ed has entered into a Ground Lease which provides for the non-exclusive use ofMet-Ed transmission rights-of-way by MAIT;

WHEREAS, PJM is a Regional Transmission Organization providing transmission servicewithin the PJM region;

WHEREAS, PJM has, and shall continue to have, operational control over the TransmissionSystem, which encompasses the service territories of the FirstEnergy East Operating Companies;

WHEREAS, the electric systems of the Parties are or may be interconnected at one or morepoints of interconnection, each herein called an “Interconnection Point”;

WHEREAS, Met-Ed and MAIT desire to enter into this Agreement to provide for theinterconnection, planning and operation of their respective systems, in coordination with PJM;and

WHEREAS, the Federal Energy Regulatory Commission (“FERC”) requires the Parties toinclude PJM as a signatory to this Agreement to ensure that PJM is kept fully apprised of thematters addressed herein and so that PJM may be kept aware of any reliability and planningissues that may arise.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein set forth, theParties hereto agree as follows:

ARTICLE IDEFINITIONS

1.1 In General.

Unless the context otherwise specifies or requires, the following terms used in this Agreementor in any appendix to this Agreement shall have the meanings set forth below. Additionalterms are defined in other provisions of this Agreement as needed.

1.2 Agency Agreement. The agreement appended hereto as Appendix A, which allowsMAIT to act as agent for Met-Ed to the extent necessary to provide transmission service towholesale customers in Pennsylvania served over Distribution Facilities under the PJM Tariff.

1.3 Distribution Facilities. All electric delivery facilities that are owned or operated byMet-Ed. Distribution Facilities shall include the final circuit with MAIT facilities into distributionsubstations providing transformation or connection to any wholesale or retail customer, regardlessof the nominal voltage level. Distribution Facilities include all metering and related facilitiesnecessary to serve such customers, including customer owned Distribution Facilities operatedby Met-Ed. Distribution Facilities also include any other facilities built, purchased, leased, orotherwise acquired by Met-Ed in furtherance of its obligations under this Agreement.

1.4 Effective Date. The Effective Date of this Agreement is February 1, 2017.

1.5 FERC. The Federal Energy Regulatory Commission, or any successor agency.

1.6 Good Utility Practice. Any of the practices, methods, and acts engaged in or approvedby a significant portion of the electric utility industry during the relevant time period, or any ofthe practices, methods, and acts which, in the exercise of reasonable judgment in light of thefacts known at the time the decision was made, could have been expected to accomplish thedesired result at reasonable cost consistent with good business practices, reliability, safety, andexpedition. 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 be a range of acceptable practices, methods, oract generally accepted in the region, including those practices required by Federal Power ActSection 215(a)(4).

1.7 PJM Tariff. The PJM Open Access Transmission Tariff on file with FERC, as it may beamended and accepted by FERC from time to time.

1.8 Regulatory Authority(ies). Any federal, state, local or other governmental, regulatoryor administrative agency having jurisdiction over the subject matter of this Agreement.

1.9 Transmission Facilities. Electric delivery facilities formerly owned by Met-Ed thatwere contributed to, and are now owned by MAIT. Transmission Facilities also include any

other facilities built, purchased, leased, or otherwise acquired by MAIT in furtherance of itsobligations under this Agreement, including any new metering necessary between MAIT and theDistribution Facilities.

1.10 Transmission Provider. PJM or its successor organization.

1.11 Transmission System. The new transmission facilities and the existing TransmissionFacilities owned, planned, and operated by MAIT that are used to provide service under the PJMTariff, including the transmission facilities contributed by Met-Ed to MAIT.

ARTICLE IIRIGHTS, POWERS, AND OBLIGATIONS OF MAIT

2.1 Planning and Operations.

2.1.1 Planning Activities. MAIT shall plan the Transmission System in order to provide alltransmission customers with efficient, reliable, and nondiscriminatory transmission serviceunder the PJM Tariff. MAIT may employ persons and enter into agreements as necessary toperform these services. Such planning shall conform to applicable reliability requirements of theNorth American Electric Reliability Corporation (“NERC”), applicable regional reliabilitycouncils, PJM, and all applicable requirements of federal or state laws or RegulatoryAuthorities and any reliability procedures or guidelines adopted by MAIT. Such planningshall seek to minimize costs for both MAIT and transmission customers, consistent with GoodUtility Practice and the reliability and other requirements set forth in this Agreement, but shallalso include consideration of economic Transmission System expansion, whether byconstruction or acquisition of new Transmission Facilities.

2.1.2 Operational Control. MAIT shall operate the Transmission System and shallcoordinate with Met-Ed to operate the high side devices of the Distribution Facilities as necessaryto provide all transmission customers with efficient, reliable, and non-discriminatorytransmission service under the PJM Tariff. Such operation shall be exercised in accordance withGood Utility Practice and shall conform to applicable reliability requirements of NERC,applicable regional reliability councils, or any successor organizations, and all applicablerequirements of federal or state laws or Regulatory Authorities. MAIT, in conjunction with PJMand NERC, shall establish reliability guidelines or procedures necessary to implement andcomply with applicable reliability requirements.

2.1.3 Performance of Regulatory Obligations. MAIT shall become a party to PJM’sConsolidated Transmission Owners Agreement (“CTOA”) and shall succeed to, and complywith, Met-Ed’s transmission operation and planning obligations of Met-Ed in connection withthe Transmission System imposed by the PJM Tariff, PJM CTOA, and all relevant federal orstate laws or Regulatory Authorities.

ARTICLE IIIINTERCONNECTED OPERATION

3.1 Interconnection Points. The Parties’ systems shall be interconnected at InterconnectionPoints to be specified and described in Appendix B. The Parties by amendment to this Agreementmay add, discontinue or modify the Interconnection Points and such additional, discontinuedor modified Interconnection Points shall be reflected in a revised Appendix B. The Parties shall,during the term of this Agreement, continue in service the existing transmission lines andequipment necessary to maintain the Interconnection Points specified and described in AppendixB.

3.2 Adjustments of Existing Facilities. The Parties acknowledge that existing facilities maybe relocated, removed, discontinued, or modified in connection with each Interconnection Pointset forth in Appendix B, or any new Interconnection Point established under this Agreement. TheParties shall work in good faith to arrange for the adjustment of existing facilities.

3.3 Interruption of Service. The interconnection service provided under this Agreementmay be interrupted or reduced upon such notice as is reasonable under the circumstances (a) byoperation of automatic equipment installed for power system protection; (b) at PJM’s direction;(c) after consultation with the other Party if practicable, when a Party deems it desirable forinstallation, maintenance, inspection, repair or replacement of equipment; or (d) at any time thatin the sole judgment of the interrupting Party such action is necessary to preserve the integrity of,or to prevent or limit any instability on, or to avoid or mitigate a burden on, the interruptingParty’s system. Any interruption and resumption of service under this Section 3.3 shall beconducted in accordance with Good Utility Practice.

3.4 Energy Losses. The energy losses on the interconnected facilities shall be assigned tothe appropriate Party based on the metering points of the facilities or according to proceduresdeveloped by the Operating Committee, and subject to any requirements of PJM.

ARTICLE IVOPERATIONAL RIGHTS, POWERS, AND OBLIGATIONS OF THE PARTIES

4.1 Construction and Operation of the Parties’Facilities.

4.1.1 Avoidance of Unauthorized Use and Control of System Disturbance. Each Partyshall have facilities or contractual arrangements adequate to serve its own load and shall exercisereasonable care to design, construct, maintain, and operate its facilities, in accordance withGood Utility Practice, and in such manner as to avoid the unauthorized utilization of thetransmission or distribution facilities by any other person (hereinafter referred to as “UnauthorizedUse”). Any Party may install and operate on its system such relays, disconnecting devices,and other equipment, as it may be deemed appropriate for the protection of its system orprevention of Unauthorized Use. The Parties shall maintain and operate their respective systemsso as to minimize, in accordance with Good Utility Practice, the likelihood of a disturbanceoriginating in either system, which might cause impairment to the service of the other Party orof any system interconnected with the system of the other Party.

4.1.2 Distribution Facilities Used For Wholesale Services. Pursuant to the AgencyAgreement, MAIT will act as agent for Met-Ed with respect to transmission service over the

Distribution Facilities under the PJM Tariff at FERC-approved rates as set forth in the PJMTariff.

4.1.3 Maintenance and Operation Services. Each Party shall maintain its equipment in amanner consistent with Good Utility Practice in order to permit the Parties to operate theirrespective facilities as required by this Agreement. Operating arrangements for facilitymaintenance shall be coordinated between operating personnel of the Parties in accordance withSection 4.1.6 of this Agreement. Except as may be necessary and appropriate in an emergency,all operating arrangements shall be coordinated with, and consistent with, the practices of PJM.

4.1.4 Providing Information. The Parties shall provide such information to each other as isnecessary for them to perform their obligations under this Agreement, the PJM Tariff and anyservice agreements thereunder, or to comply with requirements of Regulatory Authorities.Information identified as confidential shall be treated as confidential to the extent permitted bylaw.

4.1.5 Facilities Access. The Parties shall allow each other (their directors, officers,employees, or agents) such access to their property, structures or facilities as is necessary for theParties to perform their obligations under this Agreement, the PJM Tariff, and any serviceagreements thereunder, or to comply with the requirements of Regulatory Authorities. Suchaccess shall be in accordance with the operating procedures, rules and regulations of the Partywho owns or controls such property, structures or facilities.

4.1.6 Force Majeure. No Party shall be in default in respect to any obligation hereunderbecause of Force Majeure. Force Majeure shall mean any event that creates an inability to fulfillan obligation under this Agreement that could not be prevented or overcome by the due diligenceof the Party claiming Force Majeure. Such events include, but are not defined by or limited to,acts of God, strikes, lockouts, labor disputes, acts of a public enemy, acts of sabotage, acts ofterrorism, wars, blockades, insurrections, riots, epidemics, landslides, earthquakes, fires,hurricanes, storms, tornadoes, floods, washouts, civil disturbances, explosions, accidents, or thebinding order of any court, legislative body, or governmental authority which has been resistedin good faith by all reasonable legal means. Failure to prevent or settle any strike or strikes shallnot be considered to be a matter within the control of the Party claiming suspension. A Partyunable to fulfill any obligation by reason of any Force Majeure event shall use diligence toremove such disability with appropriate dispatch. Each Party shall(a) provide prompt written notice of such Force Majeure event to the other Party, which noticeshall include an estimate of the expected duration of such event and, (b) attempt to exercise allreasonable efforts to continue to perform its obligations under this Agreement.

4.1.7 Inspection and Auditing Procedures. The Parties shall grant FERC, each other (theirdirectors, officers, employees, and agents) and each state Regulatory Authority havingjurisdiction, such access to books and records as is necessary for each Party to perform itsobligations under this Agreement, the PJM Tariff, and any service agreements thereunder, tocomply with the requirements of Regulatory Authorities, and to audit and verify transactionsunder this Agreement. Such access shall be at reasonable times and under reasonable conditions.Each Party shall comply with the reporting requirements of Regulatory Authorities having

jurisdiction over the Party with respect to the business aspects of their operations, and shallmaintain such accounting records and metering data as is necessary to perform its obligationsunder this Agreement.

4.2 Operating Committee.

4.2.1 An Operating Committee shall administer the interconnected operation of the Parties’systems as provided for in this Agreement. The Parties shall each appoint one member and onealternate to the Operating Committee and designate, in writing, said appointments to the otherParty. Such representatives and alternates shall be persons familiar with the TransmissionFacilities and Distribution Facilities of the Parties they represent and shall be fully authorized toperform the principal duties listed below.

4.2.2 Duties of the Operating Committee. The principal duties of the Operating Committeeshall be as follows:

a. to establish operating and control procedures;b. to establish accounting and billing procedures;c. to coordinate maintenance schedules to an extent agreed by the Parties; andd. to perform those duties, which this Agreement requires to be done by the OperatingCommittee, and such other duties as may be required for the proper performance of thisAgreement.

4.2.3 Limitations on Operating Committee Duties. The Operating Committee shall notamend or modify any of the terms or conditions of this Agreement.

4.2.4 Operating Committee. If the Operating Committee is unable to agree on any mattercoming under its jurisdiction, that matter shall be submitted for resolution under the arbitrationprocedures specified in Article VIII of this Agreement.

ARTICLE VTERM AND TERMINATION

5.1 This Agreement shall be effective as of the date of execution by both Parties and PJM’sacknowledgement or such later date as FERC may authorize, and shall remain in effect for aterm of ten (10) years thereafter. Following the initial ten (10) year term, this Agreement shallremain in place from year-to-year unless terminated by either Party upon not less than one (1)year’s prior written notice. Either Party may provide notice of termination after the conclusionof the ninth (9th) year of this Agreement.

5.2 The Parties’ obligation to make any payments owing or due under this Agreement or tocomplete the construction of specific facilities agreed to prior to termination of this Agreementshall survive the termination of this Agreement.

ARTICLE VIREGULATORY APPROVALS

6.1 Regulatory Authorities. This Agreement is subject to acceptance or approval by FERCand may be subject to the actions of Regulatory Authorities to which the Parties may be subjectand which may affect the ability of the Parties to participate in this Agreement.

6.2 Renegotiation. If any provision of this Agreement, or the application thereof to anyperson, entity, or circumstance, is held by a Regulatory Authority or court of competentjurisdiction to be invalid, void, or unenforceable, then the Parties shall endeavor in good faith tonegotiate such amendment or amendments to this Agreement as will restore the relative benefitsand obligations of the Parties under this Agreement immediately prior to such holding.

ARTICLE VIIINDEMNITY

To the extent permitted by law, each Party shall indemnify, save harmless, and defend the otherParty from and against any losses, damages, liabilities, costs, expenses, suits, actions, claims, andall other obligations arising out of injuries or death to persons or damage to property caused byor in any way attributable to the ownership or operation of the facilities of the owning Party(individually, a “Loss”), except that the indemnifying Party’s obligation to indemnify the otherParty shall not apply to the extent of any liabilities arising from such other Party’s negligence.Further, to the extent that a Party’s immunity as a complying employer, under the worker’scompensation and occupational disease laws, might serve to bar or affect recovery under orenforcement of the indemnification otherwise granted herein, each Party agrees to waive itsimmunity. For the purposes of this Article VII only, the term “Party” shall include the directors,officers, employees, affiliates and agents of a Party eligible for indemnification under this ArticleVII.

ARTICLE VIIIARBITRATION

8.1 Submission to Arbitration. In the event of disagreement between the Parties withrespect to (1) any matter herein specifically made subject to arbitration, (2) any question ofoperating practice involved in performance of this Agreement, (3) any question of fact involvedin the application of provisions of this Agreement, or (4) the interpretation of any provision ofthis Agreement, the matter involved in the disagreement shall, upon request of either Party, besubmitted to arbitration in the manner hereinafter provided.

8.2 Appointment of Arbitrators. The Party requesting arbitration shall serve notice inwriting upon the other Party, setting forth in detail the subject or subjects to be arbitrated, and theParties thereupon shall endeavor to agree upon and appoint one person to act as sole arbitrator.If the Parties fail to agree within a period of fifteen (15) days from the receipt of the originalnotice, the Party requesting the arbitration shall, by written notice to the other Party, request theappointment of a board of arbitrators skilled with respect to matters of the character involved inthe disagreement, naming one arbitrator in such notice. The other Party shall, within ten (10)days after the receipt of such notice, appoint a second arbitrator, and the two so appointed shallchoose and appoint a third. In case such other Party fails to appoint an arbitrator within said ten

(10) days, or in case the two so appointed fail for ten (10) days to agree upon and appoint a third,the Party requesting the arbitration, upon five (5) days’ written notice delivered to the otherParty, shall apply to the person who at the time shall be the most senior Judge of the UnitedStates District Court having jurisdiction in Ohio for appointment of the second or third arbitrator,as the case may be.

8.3 Arbitration. The sole arbitrator, or the board of arbitrators, shall afford adequateopportunity to the Parties to present information with respect to the question or questionssubmitted for arbitration and may request further information from either or both Parties. Thefindings and award of the sole arbitrator or of a majority of the board of arbitrators shall be finaland conclusive with respect to the question or questions submitted for arbitration and shall bebinding upon the Parties, provided that such findings and award shall not in any way vary theexpressed terms of this Agreement or in any way extend the expressed scope and intent hereof.Each Party shall pay for the services and expenses of the arbitrator appointed on their behalf. Ifthere is a board of arbitrators, all costs incurred in connection with the arbitration shall be paid inequal parts by the Parties hereto, unless the award shall specify a different division of the costs.

ARTICLE IXMISCELLANEOUS PROVISIONS

9.1 Descriptive Headings. The descriptive headings of Articles, Sections, Paragraphs,Subparagraphs, and other provisions of this Agreement have been inserted for convenience ofreference only and shall not define, modify, restrict, construe, or otherwise affect theconstruction or interpretation of any of the provisions of this Agreement.

9.2 Governing Law. This Agreement shall be interpreted, construed, and governed by thelaws of the State of Ohio, except to the extent preempted by the laws of the United States ofAmerica.

9.3 Counterparts. This Agreement may be executed in any number of counterparts, each ofwhich shall be deemed to be an original, but all of which together shall constitute one and thesame instrument, binding upon the Parties.

9.4 Waiver.

9.4.1 Waiver. Any waiver at any time by either Party of its rights with respect to defaultunder this Agreement, or with respect to any other matter arising in connection with thisAgreement, shall not be deemed a waiver with respect to any subsequent default or matter. Anydelay, short of the statutory period of limitation, in asserting or enforcing any right under thisAgreement, shall not be deemed a waiver of such right.

9.4.2 No Implied Waiver. The failure of a Party to insist upon or enforce strict performance ofany of the specific provisions of this Agreement at any time shall not be construed as a waiveror relinquishment to any extent of such Party’s right to assert or rely upon any such provisions,rights, or remedies in that or any other instance, or as a waiver to any extent of any specificprovision of this Agreement; rather the same shall be and remain in full force and effect.

9.5 Further Assurances. Each Party agrees that it shall hereafter execute and deliver suchfurther instruments, provide all information, and take or forbear such further acts and things asmay be reasonably required or useful to carry out the intent and purpose of this Agreement andas are not inconsistent with the provisions of this Agreement.

9.6 Delivery of Notices. Except as otherwise expressly provided herein, notices requiredunder this Agreement shall be in writing and shall be sent to the Parties by U.S. mail, overnightcourier, hand delivery, facsimile, or other reliable electronic means. Any notice required underthis Agreement shall be deemed to have been given either upon delivery, if by U.S. mail,overnight courier, or hand delivery, or upon confirmation, if given by facsimile or other reliableelectronic means.

9.7 Entire Agreement. This Agreement, including the appendices attached hereto, theAgency Agreement, the Capital Contribution Agreement, Ground Lease, and other agreementsreferenced herein constitute the entire agreement among the Parties with respect to the subjectmatter of this Agreement, and no previous or contemporary oral or written representations,agreements, or understandings made by any director, officer, agent, or employee of the Partiesshall be binding on the other unless contained in this Agreement, including the appendicesattached hereto, the Transmission Tariff, service agreements thereunder, the Agency Agreement,the Bill of Sale, Ground Lease, or other agreements referenced herein. No amendment,modification or change in this Agreement shall be valid and enforceable unless reduced inwriting and executed by the Parties.

9.8 Good Faith Efforts. Each Party agrees that it shall in good faith take all reasonableactions necessary to fulfill its obligations under this Agreement. Where the consent, agreement,or approval of any Party must be obtained hereunder, such consent, agreement, or approval shallnot be unreasonably withheld, conditioned, or delayed. Where any Party is required or permittedto act, or omit to act, based on its opinion or judgment, such opinion or judgment shall not beunreasonably exercised. To the extent that the jurisdiction of any Regulatory Authorities appliesto any part of this Agreement or the transactions or actions covered by this Agreement, eachParty shall cooperate to secure any necessary or desirable approval or acceptance of suchRegulatory Authorities of such part of this Agreement or such transactions or actions.

9.9 Third-Party Agreements. This Agreement, including the appendices to this Agreement,the PJM Tariff, the service agreements thereunder, the Agency Agreement, Capital ContributionAgreement, and the Ground Lease, and other agreements referenced herein, shall not beconstrued, interpreted or applied in such a manner as to cause a Party to be in material breach,anticipatory or otherwise, of any agreement between the Party and one or more third parties whoare not Parties to this Agreement for the joint ownership, operation, or maintenance of anyelectrical facilities covered by this Agreement, the Transmission Tariff, or the AgencyAgreement. A Party that has such a third-party joint agreement shall discuss with the otherParties any material conflict between such third-party joint agreement and this Agreement, thePJM Tariff, or the Agency Agreement raised by a third party to such joint agreement, and shallact in good faith to resolve such conflict in accordance with Good Utility Practice.

9.10 Liability.

9.10.1 Nothing in this Agreement shall be construed to create or give rise to any liability on thepart of PJM and each Party expressly waives any claims that may arise against PJM under thisAgreement.

9.10.2 The Parties acknowledge and understand that the signature of the authorizedrepresentative of PJM on this Agreement is for the limited purpose of acknowledging thatrepresentatives of PJM have read the terms of this Agreement. The Parties and PJM further statethat they understand that FERC desires that the Parties keep PJM fully apprised of the mattersaddressed herein as well as any reliability and planning issues that may arise under thisAgreement, and that the signature of the PJM officer shall not in any way be deemed to implythat (a) PJM is taking responsibility for the actions of any Party, (b) PJM has any affirmativeduties under this Agreement, or (c) PJM is liable in any way under this Agreement.

9.11 Assignment. This Agreement shall inure to the benefit of and be binding upon thesuccessors and assigns of the Parties. Successors and assigns of PJM shall become signatories tothis Agreement for the limited purpose described herein applicable to PJM. This Agreementshall not be assigned by either Party without the written consent of the other Party, whichconsent shall not be reasonably withheld, except to a successor to which substantially all of thebusiness and assets of such Party shall be transferred or to an affiliate of the assigning Party forthe purposes of a corporate restructuring.

9.12 Written Notices. Notices and communication made pursuant to this Agreement shall bedeemed to be properly given if delivered in writing, postage paid to the following:

If to MAIT:Manager, Agreements SupportFirstEnergy Service Company

76 S. Main Street – 10th FloorAkron, OH 44308

Legal DepartmentFirstEnergy Service Company76 S. Main StreetAkron, OH 44308

If to Met-Ed:Manager, Agreements SupportFirstEnergy Service Company

76 S. Main Street – 10th FloorAkron, OH44308

Legal DepartmentFirstEnergy Service Company76 S. Main StreetAkron, OH 44308

If to PJM:Vice President-Government PolicyPJM Interconnection, L.L.C.1200 G Street, NW, Suite 600Washington, DC 20005

General CounselPJM Interconnection, L.L.C.2750 Monroe Blvd.Audubon, PA 19403

The above listed titles and addresses for a Party or PJM may be changed by written notice to all

other Parties and PJM.

9.13 Rights under Sections 205 and 206. Nothing contained in this Agreement shall beconstrued as affecting in any way, the right of a Party furnishing service under this Agreement tounilaterally make application to FERC for a change in the rates and charges or other terms andconditions of this Agreement under Section 205 of the Federal Power Act and pursuant to theFERC’s Rules and Regulations promulgated thereunder or any Party receiving service to file acomplaint seeking changes in rates and charges or other terms and conditions of this Agreementunder Section 206 of the Federal Power Act.

IN WITNESS WHEREOF, the Parties have caused their duly authorized representativesto execute and attest this Agreement, on their respective behalf, as of this 1st day ofFebruary, 2017.

/s/ Richard A. Ziegler /s/ Robert R. Mattiuz, Jr.Signature Signature

Director, FERC & RTO Tech Support Director, FERC ComplianceTitle of Authorized Signatory Title of Authorized SignatoryMID-ATLANTIC INTERSTATE METROPOLITAN EDISON COMPANYTRANSMISSION, LLCBy: FirstEnergy Transmission, LLC

its sole member

Service Agreement No. 4577

The signature below of the authorized representative of PJM Interconnection, L.L.C. is for thelimited purpose of acknowledging that a representative of PJM has read this Agreement as of Feb 21,2017.

PJM INTERCONNECTION, L.L.C.

By: /s/ Steven Herling(Signature)

Name: Steven Herling(Print)

Title: V.P., Planning

APPENDIX A

AGENCY AGREEMENT

Through this Agency Agreement, Metropolitan Edison Company (“Met-Ed”) authorizes Mid-Atlantic Interstate Transmission, LLC (“MAIT”) to provide transmission service over certainfacilities as detailed below.

The definitions specified in the Operating and Interconnection Agreement (“Agreement”) areincorporated herein by reference.

RECITALS

A. WHEREAS, MAIT owns and operates the Transmission Facilities, which werepreviously owned by Met-Ed. PJM has functional control over the Transmission Facilitiesprovides open access transmission service across the Transmission Facilities in accordance withthe PJM Tariff filed with FERC.

B. WHEREAS, Met-Ed will retain ownership of Distribution Facilities that may be usedin part to provide transmission service under the PJM Tariff to certain Met-Ed wholesalecustomers.

C. WHEREAS, in order for MAIT to offer transmission service to these customers underthe PJM Tariff, it is necessary that the MAIT be authorized by Met-Ed to act as its agent.

D. WHEREAS, Met-Ed wishes to enter into this Agency Agreement to authorize MAITto act as its agent with regard to the use of the Distribution Facilities for transmission serviceto certain Met-Ed wholesale customers and for other purposes as specified herein and in theAgreement.

TERMS OF AGREEMENT

1. Rates for Transmission Service over the Distribution Facilities

The rates for transmission service over the Distribution Facilities are as provided in the PJMTariff. In the event of any conflict between any provision of this Agency Agreement and thePJM Tariff, the PJM Tariff shall control.

2. Appointment of MAIT as Agent

Met-Ed appoints MAIT as its agent to provide transmission service on behalf of Met-Ed towholesale customers using Distribution Facilities to connect to the MAIT TransmissionSystem.

Met-Ed will cooperate with MAIT in developing the rates charged for use of its DistributionFacilities (“Distribution Adder”). MAIT will arrange for rate filings with FERC under Section

205 of the Federal Power Act to establish or modify the Distribution Adder. Met-Ed will providethe necessary support for any filing under Section 205 of the Federal Power Act to establish theDistribution Adder.

Met-Ed will commit, where necessary, Distribution Facilities used to provide transmissionservice to wholesale customers as required for the performance of service agreements underthe PJM Tariff.

3. Performance by Met-Ed

Met-Ed will provide all services necessary or appropriate for performance under the PJM Tariff,and service agreements thereunder, for wholesale transmission service using its DistributionFacilities. Upon MAIT’s request, Met-Ed will provide MAIT with all information necessary topermit MAIT to perform its administration functions under the PJM Tariff.

4. Payment to Met-Ed

MAIT, in coordination with PJM, will make appropriate arrangements for (a) billing and collectionof any Distribution Adder, and (b) the distribution to Met-Ed of all revenues collected fromthe Distribution Adder.

5. Effectiveness, Duration of Agency Agreement and Withdrawal Rights

The Agency Agreement is effective on the Effective Date as defined in the Agreement. TheAgency Agreement will terminate upon mutual agreement of MAIT and Met- Ed.

6. Integration and Amendment

This is an integrated agreement which contains all terms and conditions of agreement amongthe Parties concerning the subject matter. Any prior or oral agreements concerning thesubject matter not stated herein are superseded by this Agency Agreement. This AgencyAgreement may be amended only by a writing executed by both Parties.

7. Authority

The Parties represent that the person executing this agreement on their behalf is authorized toexecute this agreement and bind the Parties to its terms, and that such authorization has beenmade in compliance with all applicable laws, articles of incorporation, bylaws, and resolutionsand in a manner that the authorization is binding upon Met-Ed and MAIT.

/s/ Richard A. Ziegler /s/ Robert R. Mattiuz, Jr.Signature Signature

Director, FERC & RTO Tech Support Director, FERC ComplianceTitle of Authorized Signatory Title of Authorized SignatoryMID-ATLANTIC INTERSTATE METROPOLITAN EDISON COMPANYTRANSMISSION, LLCBy: FirstEnergy Transmission, LLC

its sole member

APPENDIX B

INTERCONNECTION POINTS

The Parties shall describe the Points of Interconnection in this Appendix B once the contributionconveying ownership of the Transmission Facilities to MAIT has been authorized by all applicableRegulatory Authorities.

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APPENDIX C

DAS EQUIPMENT: OWNERSHIP, INSTALLATION AND MAINTENANCE

Any real-time data requirements defined in the PJM manuals, including PJM Manual 01 - ControlCenter and Data Exchange Requirements, and PJM Manual 03 - Transmission Operations, shallbe provided to PJM to allow PJM to comply with its roles as reliability coordinator, balancingauthority, and transmission operator.

ATTACHMENT B Signature Pages in PDF Format


Metropolitan Edison Company OPERATING AND INTERCONNECTION AGREEMENT

March 1, 2017