03-1086 Electric Utility Franchise Agreement - Progress Energy

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estimate of any stranded costs to which Grantee will claim entitlement if Grantor purchases the facilities. (C) Demand for Arbitration. If the parties do not agree on a purchase price, including any stranded costs, within 180 days after the date of the notice in subparagraph (A), either party may demand that the purchase price be established in arbitration pursuant to the Florida Arbitration Code, presently Chapter 682, Florida Statutes, or such other similar law as may exist at the time of arbitration. (D) Selection of Arbitrators. The arbitration shall be conducted before three (3) arbitrators mutually agreed to by the parties. If the parties cannot agree on three arbitrators, but have agreed on two, the two arbitrators shall mutually select the third arbitrator. If the parties cannot agree on at least two arbitrators, or if the two arbitrators cannot agree on a third arbitrator, either party may apply to a court of competent jurisdiction to appoint the arbitrator( s) necessary to constitute the three arbitrator paneL Each party may suggest candidate arbitrators to the Court. Absent the parties' agreement, the Court may not appoint an arbitrator who is a resident of the City of Casselberry or who is an owner or manager of a business located within the City of Casselberry. (E) Arbitration Rules and Discovery. The arbitration shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association (AAA), or such similar rules of the AAA as may exist at the time of the arbitration. The parties may mutually modify or waive any such AAA rules at any time and substitute additional or new rules of procedure. The parties shall not be required to utilize the services of the AAA. (F) Scope of Arbitration, and Governing Methodology For Setting Purchase Price. The arbitration submission shall be limited to (a) establishing the purchase price of the facilities subject to purchase and the reasonable costs to Grantee of separating and reintegrating Grantee's distribution system located outside Grantor's municipal boundaries; (b) establishing a method for adjusting that price for post-arbitration changes to the facilities. Valuation shall be accomplished consistent with Florida law. The arbitrators may consider and apply any valuation methodology that is consistent with Florida Law including, without limitation, the comparable sales approach and the income approach to valuation. The award shall establish a methodology consistent with the above methodology for increasing the amount of the award for additional improvements or additions made to the system between the date of the award and the date of any actual purchase pursuant to these provisions. (G) Stranded Costs. Stranded costs shall be subject to the arbitration. Nothing in this franchise shall be construed as a waiver of either: (1) Grantee's right (if any) to seek a stranded cost award in the appropriate agency including, without limitation, the Florida Public Service Commission or the United States Federal Energy 8