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HomeMy WebLinkAbout2005-15 energy purchase authorizeWHEREAS: RESOLUTION NO. 2005-15 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH APPROVING SINGLE MEMBER SERVICES AGREEMENT AND MASTER CONFIRMATION AGREEMENT, AUTHORIZING CITY MANAGER TO SIGN SAME AND AUTHORIZING CITY MANAGER/PUBLIC UTILITIES DIRECTOR TO APPROVE VARIOUS TRANSACTIONS TO PURCHASE ENERGY AS NEEDED 1. The City of Ukiah's right to purchase from the Western Area Power Administration (WAPA) a certain portion of the electricity required by its Electric Utility has terminated; and 2. The City must purchase electricity from other sources to make up for the loss of the electricity formerly purchased from WAPA; and 3. The City lacks the personnel and resources to negotiate, purchase and administer contracts for this replacement electricity; and 4. The City belongs to the Northern California Power Agency (NCPA), which is a joint exercise of powers agency that operates various electrical power generating facilities for its member agencies, including the City; and 5. NCPA has the staff and resources to negotiate, purchase and administer contracts for the purchase of electricity on the City's behalf and performs this service for other individual member agencies of NCPA; and 6. NCPA is willing to provide these services provided that it has no separate liability for these transactions and it has the same liability as would be the case, if NCPA were performing these services as employees of the City; and 7. Currently, the price for electrical energy and capacity is fluctuating significantly over very short time periods due to dramatic and frequent changes in the cost of oil and natural gas; and 8. During the next one year period, the City must make multiple purchasing decisions on a very short time frame in order to keep its electrical energy costs as Iow as possible in this volatile market; and 9. NCPA has developed modifications to the standard Master Confirmation Agreement used by sellers of electricity which it believes better protects its members in the event a seller files for bankruptcy and NCPA recommends the use of these modifications, whenever possible; and Resolution No. 2005-15 Page 1 of 2 10. The risks associated with contracting with NCPA, entering Master Confirmation Agreements, modified or unmodified, delegating authority to the City Manager/Director of Public Utilities as authorized by this Resolution, and purchasing electricity in a volatile market have been explained to and considered by the City Council; and 11. To purchase the replacement electricity required by its Electric Utility under the circumstances described in these recitals, the City Council of the City of Ukiah determines that it is in the best interest of the City and its residents to approve the Single Member Services Agreement, attached hereto as Exhibit A, the Master Confirmation Agreement (Western Systems Power Pool Agreement), attached hereto as Exhibit B, to authorize the City Manager to sign the Single Member Services Agreement, and to authorize the City Manager and the Director of Public Utilities to approve electrical purchase transactions pursuant to the agreements contained in Exhibits A, B, and C and to take any other actions and sign other documents which shall become binding on the City, as necessary, to purchase additional electricity. NOW, THEREFORE, BE IT RESOLVED as follows: 1. The agreements attached hereto as Exhibits A, B, and C are hereby approved and the City Manager is authorized to sign them on behalf of the City. 2. The City Manager and the Director of Public Utilities are hereby authorized to approve the purchase of electricity by NCPA on the City's behalf pursuant to Exhibit A and to approve Master Confirmation Agreements with counter-parties, using the Master Confirmation Agreement modifications attached hereto as Exhibit B as modified by Exhibit C, whenever possible and without said modifications, where necessary in the judgment of the City Manager and Director of Public Utilities upon the advice of NCPA. 3. The City Manager and the Director of Public Utilities are authorized to take such further action and sign such additional documents as may be necessary to consummate the purchase of electricity as provided herein and such actions shall be binding on the City without further action by the City Council. 4. The Director of Public Utilities shall provide the City Council with periodic reports, not less often than every three months, detailing the transactions undertaken pursuant to this resolution and shall agendize this resolution for periodic review by the City Council not less often than every six months. PASSED AND ADOPTED on November 3, 2004, by the following roll call vote. AYES: NOES: None ABSENT: None ABSTAIN: None Councilmembers Rodin, Smith, Baldwin, and Mayor Larson ATTEST: Marie Ulvila, City Clerk Eric Larson, Mayor Resolution No. 2005-15 Page 2 of 2 EXHIBIT A SINGLE MEMBER SERVICES AGREEMENT FOR SPECIAL TRANSACTIONS BY AND BETWEEN THE CITY OF UKIAH AND THE NORTHERN CALIFORNIA POWER AGENCY This Single Member Services Agreement for Special Transactions (the Agreement) is entered into as of the 3RD day of November, 2004 (Effective Date), by and between the Northern California Power Agency, a California joint powers and public entity having its central office at 180 Cirby Way, Roseville, California 95678 (NCPA), and the City of Ukiah, California, a general law California municipal corporation, having its central office at Ukiah Civic Center, 300 Seminary Ave., Ukiah, California 95482. NCPA and the Member are occasionally herein referred to individually as a "Party" or collectively the "Parties." This Agreement is premised on the following RECITALS: WHEREAS, NCPA provides, among other services to its membership: electric generation facility development and power resource pooling services to the majority of its member public entities and an associate nonprofit member, SMSA 10/28/03 and technical, operational, and maintenance services on behalf of the majority of member and associate member entities, for the operation and maintenance of NCPA electric generating projects in which they are invested, as well as dispatch, scheduling coordination, trading and risk management services, so that the members of NCPA on the whole, exercising their common powers pursuant to the Joint Exercise of Powers Act, may supply electrical power and energy for their residential, commercial, and industrial customers on a reliable, cost- effective, and environmentally sensitive basis, with the advantages of the economy of scale, which may, under some circumstances, benefit all of NCPA's members; and WHEREAS, the Member, as a member of NCPA, while it looks to NCPA in part for the services described above, it nevertheless wishes to request that NCPA provide special services, in the nature of an advisor or agent, by which the Member may advantage its customers by avoiding the cost of the embedded expertise that it would have to employ in the absence of NCPA, and the risks associated therewith, so that the Member may, at its sole risk, and without hazard to NCPA and its other members, deliver local benefits to the Member's customers, when other NCPA members may not share interests in this Member's particular effort; and WHEREAS, this Agreement has been drawn to first protect NCPA and its members from any exposure to liability of any kind that might result from any DWD V. I SMSA 12/3/03 act or omission in the performance of this Agreement, to the fullest extent permitted by law, due to the fact that NCPA will be acting for the Member and not for any other member in its performance of this Agreement and due to the further fact that the benefit of this Agreement to the other members is limited to the extent to which the challenges of this Agreement develop in NCPA further skill and expertise, but not to any economic or financial benefit for which those members should be liable; and WHEREAS, the Member desires to utilize the benefits of the investment in, and expertise available through the auspices of NCPA, and NCPA having weighed the consideration herein, and the protection the Member intends to provide NCPA and its other members in this Agreement, wishes to assist the Member; NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions set forth herein, the Parties have entered into this AGREEMENT: ARTICLE 1 - SCOPE OF SERVICES Upon mutual agreement, and subject to the General Conditions described below, NCPA will provide to the Member Advisory Services, Agency Services, and Pooled Subscription Services (Services), for Power Transactions (collectively Transactions). DWD V. I SMSA 12/3/03 1.1 General Conditions. NCPA shall not be obligated under this Agreement to provide any Services to, or undertake any Transactions for, the Member, notwithstanding that fact that the Member may have completely and. faithfully complied with each and every term, condition, and covenant of this Agreement. NCPA may decline to furnish any Service or Transaction requested by the Member in the sole and absolute discretion of NCPA, acting by and through its Commission without the vote of the Member, and such discretion of the Commission shall not be subject to review or to the dispute resolution provisions of this Agreement or of other agreements between the Member and NCPA; provided, however, that should NCPA have agreed in a written Confirmation to provide any Service to or undertake any Transaction for the Member; provided that the Member is then at the time of the Confirmation not in default of, and has completely and faithfully complied with each and every term, condition, and covenant of this Agreement, then NCPA shall provide such Service or undertake such Transaction. 1.2 Power Transactions. Power Transactions mean electrical power, and electrical capacity, energy, exchange, and ancillary services, or high voltage electric transmission transactions, with parties that are not members of NCPA for the purpose of serving the Member and its consumers. Power Transactions would benefit and affect the Member, and DWD V. I SMSA 12/3/03 not be of interest to, or practicably capable of execution through the NCPA Pooling Agreement or the NCPA Facilities Agreement, and are not subject to a right of refusal. 1.3 Advisory Services. Advisory Services mean technical, economic, financial, legal, risk and credit analysis, and other advice of a professional nature, related to the potential or ongoing Services that NCPA may provide the Member under this Agreement, on a flat monthly retainer basis, for the costs directly associated with this Agreement, shown initially on Attachment A to this Agreement. Advisory Services also include such services provided by NCPA on an hourly fee basis for potential and ongoing Transactions and Agency Services, that will recover for NCPA all of its costs to protect the other NCPA members. NCPA may adjust the monthly retainer and hourly fees as it determines may be required, in its sole discretion, during the preparation and adoption of the NCPA Annual Budget. 1.4 Agency Services. Agency Service mean services that NCPA may provide in the capacity of the exclusive agent of the Member, as principal, subject to the General Conditions of this Agreement, to execute and perform Transactions, on an hourly fee basis, that will recover for NCPA all of its costs to protect the other NCPA members. DWD V. I SMSA 12/3/03 1.5 Pooled Subscription Services. Pooled Subscription Services mean services that NCPA may provide the Member and other members of NCPA as an Advisory Service and an Agency Service, where the Member and at least another member of NCPA (Cooperating Member) has executed a duplicate of this Agreement. Pooled Subscription Services include Power Transactions, Gas Transactions, or Financial Transactions that would benefit and affect the Member and the Cooperating Member or Members, and not be of interest to other NCPA members, or practicably capable of execution through the NCPA Pooling Agreement or the Third Phase Agreements for other NCPA projects, and that are not subject to a right of refusal. ARTICLE 2 - REQUEST FOR SERVICES 2.1 Member Request. After the Effective Date, NCPA shall provide the Member with Advisory Services in consideration of the payment of the monthly retainer. Upon receipt of a written request for Advisory Services with respect to potential Transactions and Agency Services, NCPA will respond to the Member, subject to the General Conditions, with a proposal for fee-based Advisory Services related to the requested potential Transactions or Agency Services, including the number and identity of NCPA personnel, by job classifications, the man-hour estimates, all special programs and services, such as national price DWD V. I SMSA 12/3/03 reporting services, all materials and equipment, all other pertinent information, such as required outside support, a schedule and an estimate of costs, that would be components of the fee for the fee-based Advisory Services. 2.2 NCPA Costs of Response. Before responding, NCPA shall estimate and provide to the Member the estimate, of NCPA's expected costs for responding to the Member Request, and the Member shall advance such estimated costs, before NCPA provides its response subject to the General Conditions. NCPA will not respond if it does not receive the advance within twenty days of the date of NCPA's estimate. NCPA will not be liable to the Member if NCPA, after consuming all or a part of the advance of estimated costs, declines to respond to, or suggests alternatives to the Member Request, in NCPA's discretion, exercised under the General Conditions. 2.3 Mutual Agreement on Scope of Services. If after the payment or tender of payment for all of the actual costs to NCPA of responding to the Member Request, the Member and NCPA agree to the Services that NCPA should provide, NCPA and the Member shall execute and deliver a Confirmation of the Transactions and Services, including Advisory and DWD V. I SMSA 12/3/03 Agency Services, that NCPA will provide, if and as requested by the Member. 2.4 Authentication of Delegation. Before responding to any Member Request, and again prior to confirming any Services or Transactions, NCPA is entitled to require an authentication of the delegation of any authority of the governing body of the Member to a manager of the Member, by legal opinion, to confirm that the delegation is appropriate in all respects given the then current documents and the proposed Transactions and Services to be effected thereon. In addition, NCPA may require, as part of the General Conditions, that the Member delegate authority to NCPA before it undertakes to perform any Services or execute any Transaction on behalf of the Member, in form and substance acceptable to NCPA, in its sole discretion, as provided in the General Conditions. Any delegation of authority shall require at a minimum a resolution of the governing body of the Member acknowledging receipt and understanding of a Disclosure Statement and affirmatively delegating to the manager of the Member or to NCPA the authority required for the Transactions or Services. 2.5 Confirmations. No obligation as might be imposed by law on NCPA or its other members shall arise unless a written Confirmation accepting that obligation in respect to a Transaction or Service, described in detail in the DWD V. 1 SMSA 12/3/03 Confirmation, shall have been accepted by the Member without qualification, and approved by the NCPA Commission. A failure of a Disclosure Statement to describe a risk or effect of a Transaction or Service shall not excuse the Member from its liability therefor, given that the Member shall in all situations be wholly responsible for the Disclosure Statement. ARTICLE 3 - DUE DILIGENCE ARTICLE 4- REPRESENTATIONS AND WARRANTIES 4.1 Initial Representations and Warranties. On the Effective Date and the date of entering into each Transaction, the Member represents and warrants to NCPA that: (i) it is duly organized, validly exiting and in good standing under the laws of California and of the United States; (ii) it has all regulatory authorizations necessary for it to legally perform its obligations under this Agreement and each Transaction (including any Confirmation accepted in accordance with this Agreement); (iii) the execution, delivery and performance of this Agreement and each Transaction (including any Confirmation accepted in accordance with this Agreement) are within its powers, have been duly authorized by all necessary action and do not violate any of DWD V. 1 SMSA 12/3/03 the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it; (iv) this Agreement, each Transaction (including any Confirmation accepted in accordance with this Agreement), and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; subject to any Equitable Defenses. (v) it is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt; (vi) there is not pending or, to its knowledge, threatened against it or any legal proceedings or investigations that could materially adversely affect its ability to perform its obligations under this Agreement and each Transaction (including any Confirmation accepted in accordance with this Agreement); (vii) no Event of Default or Potential Event of Default with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its 10 DWD V. I SMSA 12/3/03 obligations under this Agreement and each Transaction (including any Confirmation accepted in accordance with this Agreement); (viii) it is acting for its own account, has made its own independent decision to enter into this Agreement and each Transaction (including any Confirmation accepted in accordance with this Agreement) and as to whether this Agreement and each such Transaction (including any Confirmation accepted in accordance with this Agreement) is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of NCPA in providing Advisory Services, and the Member is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Agreement and each Transaction (including any Confirmation accepted in accordance with this Agreement); (ix) it has entered into this Agreement and each Transaction (including any Confirmation accepted in accordance with this Agreement) in connection with the conduct of its public service utility enterprise and it has the capacity or ability to make or take delivery of all products referred to in any Transaction to which it is a party; 11 DWD V. I SMSA 12/3/03 4.2 Further Representations and Warranties. On the Effective Date and the date of entering into each Transaction, the Member further represents and warrants to NCPA that: (i) all acts necessary to the valid execution, delivery and performance of this Agreement, including without limitation, competitive bidding, public notice, election, referendum, prior appropriation or other required procedures has or will be taken and performed as required under the laws of the State of California and the charter, ordinances, bylaws or other regulations, (ii) all persons making up the governing body of the Member are the duly elected or appointed incumbents in their positions and hold such positions in good standing in accordance with the state and local, and other applicable law, (iii) entry into and performance of this Agreement and each Transaction by the Member are for a proper public purpose within the meaning of all relevant constitutional, organic or other governing documents and applicable law, and (iv) the term of this Agreement does not extend beyond any applicable limitation imposed by the relevant constitutional, organic or other governing documents and applicable law, (v) the Member's obligations to make payments hereunder are 4.3 Primacy of NCPA Projects. Notwithstanding the availability of NCPA personnel and equipment the Member acknowledges and agrees that the first priority for NCPA personnel are the other NCPA projects in which 12 DWD V. I SMSA 12/3/03 more than one member participates, and that the Services and Transactions that NCPA provides under this Agreement are subordinate to NCPA's duties to serve the other members. ARTICLE 5 - APPROVED TRANSACTIONS 5.1 Preparation of Contract Form Risk Disclosure Statements. NCPA shall prepare a Risk Disclosure Statement to inform the Member's governing body of the risks involved in Contract Forms for which the Member requests approval. 5.2 Governing Body Adoption of Contract Damages Risk Limitations. Transactions shall be entered only after the Member's governing body has approved by a particular Transaction or category or class of Transactions after presentation of the Contract Damages Risk Assessment ARTICLE 6 - PAYMENTS AND DEFAULTS 6.1 Billing and Payment. Monthly billing statements prepared by NCPA shall be sent to the Member showing the Member's unpaid balance for Transactions and Services and other expenses relating to this Agreement incurred by NCPA for the previous month. This information may be provided on monthly billing statements prepared by NCPA pursuant to other Project Agreements. NCPA will provide the monthly billing statements electronically if requested by the Member; otherwise NCPA shall mail the statements First Class, U.S. Postal Service. 13 DWD V. I SMSA 12/3/03 6.2 Late Payments. Amounts shown on each billing statement are due and payable at the time noted on the invoice, but not later than thirty (30) days after the date of the invoice, except that any amount due on a Friday, holiday or weekend may be paid on the following working day. Any amount due and not paid by the Member shall bear interest imposed on NCPA by any Couterparty from whom NCPA has performed a Transacton on behalf of Member pursuant to this Agreement. 6.3 Settlement Data. NCPA will make settlement data, including underlying data received from a Counterparty, available to the Member. 6.4 Audit Rights. The Member shall have the right to audit at its expense any data created or maintained by NCPA pursuant to this Agreement or pursuant to a Transaction on thirty (30) days written notice, unless otherwise agreed by the Member and NCPA. 6.5 6.6 6.7 6.8 Failure To Pay. If the Member fails to pay any amount due to NCPA within thirty (30) days of the date of the estimated or final invoice enumerating such amounts, the Member is in default and material breach under this Agreement. Cure Period. Upon written notice by NCPA, the Member shall cure any default within five (5) working days. Cure of Defaults. A default shall be cured by the payment of any monies due NCPA, including any late payment charges. Remedies in the Event of a Material Default. NCPA may suspend the provision of any Agency Service or Advisory Service to the Member with 14 DWD V. 1 SMSA 12/3/03 6.9 a default which has not been cured within the Cure Period, demanding further assurances, and taking any other legal or equitable action after the Cure Period to compel the correction of the default, as for example, to mandate the collection of a surcharge to produce Revenues to secure the cure of the default, (and the selection of one remedy shall not preclude the use of other remedies), on behalf of NCPA and other Members (in which event the defaulting Member shall not have the right to vote while such defaulting Member is in material default as determined by the NCPA Commission). Obligations in the Event of Default. A defaulting Member shall cooperate in good faith with NCPA and shall cure the default as rapidly as possible, on an emergency basis, taking all such action as is necessary, including, but not limited to, raising, drawing on its cash-on-hand and lines of credit, obtaining further assurances by way of credit support and letters of credit, repairing its Electric System, and taking all such other action as will cure the default quickly; and provided, however, that neither NCPA nor any other member shall be liable under this Agreement for the obligations of the defaulting Member, and the Member shall be solely responsible and liable for performance of its obligations under this Agreement and each Transaction. 7.1 ARTICLE 7- TERM OF THIS AGREEMENT Term of This Agreement. The term of this Agreement will be ten (10) years from its Effective Date. Six (6) months prior to the fifth-year anniversary date, the Parties will meet to review the Agreement. During 15 DWD V. 1 SMSA 12/3/03 the review period and following good-faith negotiations to resolve outstanding issues, either Party may terminate the Agreement. Notwithstanding the foregoing, either Party may, at any time during the term of the Agreement, terminate this Agreement on a date ninety (90) days after delivery of a written notice of termination to the other Party. No termination shall become effective until the termination of all Transactions. ARTICLE 8- NO IMMUNITY CLAIM 8.1 No Immunity Claim. The Member warrants and covenants that with respect to its contractual obligations hereunder and performance thereof, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (i) suit, (ii) jurisdiction of a court (including a court located outside the jurisdiction of its organization), (iii) relief by way of injunction, order for specific performance or recovery of property, (iv) attachment of assets, or (v) execution or enforcement of any judgment. ARTICLE 9- MEMBER COVENANTS The definitions in this Article 9 apply to the covenants in section 10.3 and elsewhere in this Agreement. 9.1 Electric System. Electric System means, with respect to the Member, all properties and assets, real and personal, tangible and intangible, of the 16 DWD V. 1 SMSA 12/3/03 Member now or hereafter existing, used or pertaining to the generation, transmission, transformation, distribution and sale of electric capacity and energy, including all additions, extensions, expansions, improvements and betterments thereto and equipment thereof; provided, however, that to the extent the Member is not the sole owner of an asset or property or to the extent that an asset or property is used in part for the above described purposes, only the Member's ownership interest in such asset or property or only the part of the asset or property used for electric purposes shall be considered to be part of its Electric System. 9.2 Revenues. Revenues means, with respect to the Member, all income, rents, rates, fees, charges, and other moneys derived by the Member from the ownership or operation of its Electric System, including, without limiting the generality of the foregoing, (i) all income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying of electric capacity and energy and other services, facilities, and commodities sold, furnished, or supplied through the facilities of its Electric System, (ii) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or pursuant to law to its Electric System, and (iii) the proceeds derived by the Member directly or indirectly from the sale, lease or other disposition of 17 DWD V. I SMSA 12/3/03 all or a part of the Electric System, but the term Revenues shall not include (a) customers' deposits or any other deposits subject to refund until such deposits have become the property of the Member or (b) contributions from customers for the payment of costs of construction of facilities to serve them. 9.3 Member Covenants. The Member covenants and agrees to (i) establish and collect rates and charges for the services and commodities provided by its Electric System sufficient to provide Revenues adequate to meet its obligations under this Agreement and all Transactions combined and to pay all other amounts payable from, and all lawful charges against or liens upon, the Revenues; (ii) make payments under this Agreement from the Revenues of, and as an operating expense of, its Electric System; (iii) make payments under this Agreement whether or not there is an interruption in, interference with, or reduction or suspension of services provided under this Agreement and any transaction (such payments are not subject to any reduction, whether by offset or otherwise, and regardless of whether any dispute exists); and (iv) operate its Electric System and the business in connection therewith in an efficient manner and at reasonable cost and to maintain its Electric System in good repair, working order, and condition. 18 DWD V. I SMSA 12/3/03 ARTICLE 10- DELEGATION OF MEMBER AUTHORITY 10.1. Delegation to Member Agent. The Member hereby designates as its authorized agent, the Member manager, to whom by resolution the Member has delegated its authority to execute on its behalf such forms of contracts as have been adopted by the Member pursuant to this Agreement for the use in Transactions subject to the Contract Damages Risk Limitation adopted by the Member's Governing Body. 10.2. Delegation to NCPA. The Member will delegate to NCPA all of the Member's governing body's authority to enter into a Transaction with the Member's resolution confirming an Agency Service for such Transaction. The Member shall not revoke such agency during the term of the Transaction. ARTICLE 11 - TRANSACTION LITIGATION 11.1 Transaction Litigation. In the event of litigation, dispute resolution, governmental inquiry, including investigations or legislative inquiries, relating to any matter involving this Agreement or any Service or Transaction, NCPA may select Counsel of its choice to advise and represent NCPA and the Member, and the Member shall pay NCPA for such expenses, as billed pursuant to this Agreement. 19 DWD V. I SMSA 12/3/03 ARTICLE 12- UNCONTROLLABLE CIRCUMSTANCES- SUSPENSION OF PERFORMANCE 12.1 Definition. In this Agreement "Uncontrollable Circumstances" shall mean acts, events or conditions not reasonably foreseeable by a Party which prevent the affected Party from performing its obligations under this Agreement, except the obligation for the payment of money, if and only if such acts, events or conditions and their effects (i) are beyond the reasonable control of such Party (or any third Party over whom such Party has control), (ii) are not reasonably avoidable, (iii) cannot be mitigated or eliminated through reasonably available alternative actions, and (iv) are not a result of the willful or negligent action or inaction of such Party or of any third Party over whom such Party has control: Examples of Uncontrollable Circumstances include, but are not limited to, the following: 12.1.1 An act of God, landslide, lightning, earthquake, fire, explosion, storm, flood, weather conditions precluding construction activity from progressing; 12.1.2 Acts of a public enemy, war, blockade, insurrection, strike, riot or civil disturbance, sabotage or similar occurrence or a mandate, directive, order, or restraint of any governmental, regulatory or judicial body or agency, or the exercise of the power of eminent 20 DWD V. I SMSA 12/3/03 domain, police power, inverse condemnation or other taking by or on behalf of any public, quasi-public or private entity; or 12.1.3 A Change in Law. In this Agreement, a Change in Law shall mean a material change in the requirements of the Scope of Services or the operation or maintenance of the Project, made by a governmental authority, that becomes effective on or after the date of this Agreement. 12.2 Suspension of Performance. The suspension of performance due to Uncontrollable Circumstances shall be no longer than reasonably required, and the Party suffering the Uncontrollable Circumstances shall use its best reasonable efforts to overcome such circumstances and partially or fully remedy its inability to perform. The Party suffering the Uncontrollable Circumstance shall give the other Party notice that is reasonable under such circumstances, including written notice as soon as practicable. ARTICLE 13- INDEMNIFICATION, DEFENSE, RELEASE, AND COVENANT NOT TO SUE 13.1 Indemnity Obligation of Member. The Member hereby assumes all responsibility and liability for the Transactions and Services provided under the Agreement as if they were performed by the Member's employees and accordingly intends to protect NCPA, its member entities, 21 DWD V. 1 SMSA 12/3/03 governing officials, officers, agents, and employees against claims or losses of any kind whatsoever resulting from Transactions and Services provided pursuant to this Agreement. The Member is willing to take on such complete responsibility as an inducement to NCPA to enter into this Agreement. NCPA would not enter into this Agreement absent such inducement for NCPA's sole source of revenue comes from its members, which cannot be exposed to the risks of loss or damage due to Transactions, Services, or this Agreement. Thus, the Member (the "Indemnifying Party") agrees to indemnify, defend and hold harmless NCPA and its members, including their respective governing officials, officers, agents, and employees ("Indemnified Party or Parties"), from and against any and all claims, suits, losses, damages, expenses and liability of any kind or nature, including, without limitation, reasonable attorneys' fees ("Claim" or collectively "Claims") to the extent caused by any breach of contract, negligence, active or passive, gross negligence or willful misconduct of the Indenmifying Party, its officers, employees, subcontractors or agents, to the maximum extent permitted by law, but only as to Claims related to this Agreement. 13.2 Notice and Defense. Promptly after receipt by an Indemnified Party of any Claim or notice of a Claim or the commencement of any action or administrative or legal proceeding or investigation as to which the 22 DWD V. I SMSA 12/3/03 indemnity provided for in section 14.1 may apply, the Indemnified Party shall notify the Indemnifying Party of such fact. The Indemnifying Party shall have the right to assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party; provided, however, that if the defendants in any such action include both the Indemnified Party and the Indemnifying Party, and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it and/or other Indenmified Parties which are different from or additional to those available to the Indemnifying Party, the Indemnified Party or Parties shall, at the expense of the Indemnifying Party, have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Party or Parties. 13.3 Failure to Assume Defense. Should any of the Indemnified Parties be entitled to indemnification under section 14.1 as a result of a Claim by a third Party, and should the Indemnifying Party fail to assume the defense of such Claim after reviewing notification thereof as provided in section 14.2, then such Indemnified Party may, at the expense of the Indemnifying Party, contest or settle such Claim. To the extent that any of the Indemnified Parties is required to initiate and prevails in legal proceedings against the Indemnifying Party to enforce rights under this 23 DWD V. 1 SMSA 12/3/03 Article, the Indemnifying Party shall pay all costs and attorneys' fees incurred by the Indemnified Party in enforcing its rights. 13.4 Release and Covenant Not to Sue. The Member hereby FOREVER RELEASES and DISCHARGES NCPA, its members, governing officials, officers, agents, employees, and subcontractors (Released Parties) from any and all liabilities, claims, demands or causes of action that the Member may hereafter have for injuries, damages, or losses of any kind whatsoever arising out of the Transactions, Services or this Agreement performed or not performed, or inadequately performed by NCPA, including, but not limited to, losses caused by the PASSIVE OR ACTIVE NEGLIGENCE of the Released Parties or hidden, latent, or obvious defects in equipment or materials used, but excluding gross negligence or willfully wrongful acts or omissions. The Member understands and acknowledges that the Project and the Services have inherent dangers that no amount of care, caution, instruction or expertise can eliminate and the Member expressly and voluntarily ASSUMES ALL RISK of death, personal injury, damages or losses of any kind whatsoever sustained in connection with the Project and the Services, including the risk of passive or active negligence of the Released Parties, or hidden, latent, or obvious defects in the materials used. 24 DWD V. I SMSA 12/3/03 The Member acknowledges the enforceability of the foregoing release under ?aralift, Inc. v. Superior Court (1993) 23 Cal. App.4th 748 (Paralift Case). The Member hereby FOREVER COVENANTS NOT TO SUE the Released Parties for any injuries, damages, or losses, or liabilities, claims, demands or causes of action related thereto, to which the foregoing release applies, even if the Paralift Case is overruled or affected by a judicial decision or legislation, state or federal, or by an international treaty. ARTICLE 14- GENERAL PROVISIONS 14.1 Independent Contractor. NCPA shall be an independent contractor with respect to the Services to be performed hereunder. Neither NCPA nor its subcontractors, nor their agents or employees, shall be deemed to be the servants, employees, or agents of the Member, notwithstanding Article 14. 14.2 Occupational Safety and Health Act. The Member shall design, equip, and maintain and operate its Election System in accordance with all applicable rules, regulations, orders, standards and interpretations promulgated under the Occupational Safety and Health Act (1970) (OSHA), as amended and in effect as of the day of execution of this Agreement or such similar act as adopted by the State of California, if applicable. 25 DWD V. 1 SMSA 12/3/03 14.3 Proprietary Information. To the extent permitted by law, in particular the California Public Records Act, the Parties shall maintain the confidentiality of proprietary information. 14.4 Patents. The Member shall defend, indemnify and hold harmless NCPA from any suit or action brought against NCPA based on a claim that any item of the Project, or materials and equipment procured therefor, or any part thereof, furnished or specified by NCPA or the Member hereunder or any use thereof for purposes of the Project, constitutes an infringement of any claim of patent, unless NCPA recommended such item, materials or equipment with prior knowledge of the patent infringement and failed to disclose such information to the Member. 14.5 Binding Effect: Successors and Assigns. 14.5.1 This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assignees. 14.5.2 Neither Party hereto shall assign or convey any of its rights, titles or interests under this Agreement without the prior written consent of the other Party hereto. 14.6 Not for Benefit of Third Parties. This Agreement and each and every provision thereof is for the exclusive benefit of the Parties hereto and not for the benefit of any other party except that the other member entities are 26 DWD V. I SMSA 12/3/03 intended to benefit from the protections provided them in this Agreement in Article 13. 14.7 Choice of Law. This Agreement is made and is to be performed in California and any dispute arising therefrom shall be governed and interpreted in accordance with California laws. 14.8 Article Headings and Subheadings. All article headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 14.9 No Waiver. No waiver by a Party of any breach or default by the other Party of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach of default in the performance by such other Party of the same or any other obligations of such other Party hereunder. The giving of a waiver by a Party in any one instance shall not limit or waive the necessity to obtain such Party's waiver in any future instance. No waiver of any rights under this Agreement shall be binding unless it is in writing signed by the Party waiving such rights. 14.10 Good Faith and Fair Dealing. The Parties agree to deal fairly and to act in good faith in the performance or enforcement of this Agreement. Wherever this Agreement requires a consent or approval of a Party hereto, such consent or approval shall not be unreasonably withheld or delayed except as otherwise specifically provided herein. 27 DWD V. I SMSA 12/3/03 ]4.]] 14.12 14.13 14.14 Severability. In the event that any of the provisions of this Agreement, or portions or applications thereof, are held to be unenforceable or invalid by any court of competent jurisdiction, the Member and NCPA shall negotiate an equitable adjustment in the provisions of this Agreement with a view toward effecting the purposes of this Agreement, and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby. Legal Capacity. Each Party represents and warrants that it has the legal capacity to enter into this Agreement and to perform all obligations undertaken herein. No Counterparts. This Agreement and any amendments will not be executed in counterparts but in one or more duplicate originals which shall constitute but one and the same instrument. Further Assurances. If either Party reasonably determines that any further instruments, representation of assurance of payment, or performance, or any other things are necessary or desirable to carry out the terms of this Agreement, the other Party will execute and deliver all such instruments and assurances and do all such things as the first Party reasonably deems necessary or desirable to carry out the terms of this Agreement. 28 DWD V. I SMSA 12/3/03 14.15 Hazardous Waste. Although it is not presently contemplated that any Service or Transaction will involve "Hazardous Waste," if on the contrary they do, then this section 15.15 shall apply. "Hazardous Waste" means (A) any product, substance, chemical, element, compound, mixture, solution, material, pollutant, contaminant or waste whose presence, nature, quantity or intensity of use, manufacture, processing, treatment, storage, disposal, transportation, spillage, release, or effect, either by itself or in combination with other materials, is regulated, monitored, or subject to reporting by any federal, state or local government entity; (B) those terms that are included within the definitions of "hazardous substances", "hazardous materials", "hazardous waste", "extremely hazardous substances", "toxic substances", or "oil and hazardous substances", as defined in one or more of the following environmental laws: the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Sec. 9601 et seq. (" CERCLA" ), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"); the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sec. 11001 et seq. ("EPCRTKA"); the Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq. ("RCRA"); the Toxic Substances Control Act, 15 U.S.C. Sec. 2601 et seq. ("TSCA"); the Federal Water Pollution Control Act, 33 U.S.C. Sec. 1251 et seq. (the "Clean Water Act"); the Clean Air Act, 42 29 DWD V. I SMSA 12/3/03 U.S.C. Sec. 7401 et seq. ("CAA"); the Hazardous Materials Transportation Act, 49 U.S.C. Sec. 5101 et seq. ("HMTA"); the Safe Drinking Water Act, 42 U.S.C. Sec. 300f et seq. ("SDWA"), or comparable state cleanup statutes, and in the regulations promulgated pursuant to said laws, all as amended from time to time; or (C) any material, pollutant, substance or waste that comprises, in whole or in part, includes, or is a by-product or constituent of (i) petroleum (including crude oil or any fraction thereof that is not specifically listed or designated as a hazardous substance, and natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel), (ii) asbestos, (iii) polychlorinated biphenyls, (iv) flammables or explosives, (v) biochemical agents, or (vi) radioactive materials. If, during the course of performing the Services or Transactions, either Party becomes aware of any Hazardous Waste that exists on or under the location of the Service or Transaction, whether or not created or brought on the location by a Party, the Party that so became aware shall report such condition to the Member in writing immediately and before disturbing (or further disturbing) the Hazardous Waste. NCPA shall not be liable for any Hazardous Waste on or under the location notwithstanding the fact that NCPA may have created, brought on, or released the Hazardous Waste into, over, on, or under the location. The 30 DWD V. 1 SMSA 12/3/03 Member shall be solely liable for any Hazardous Waste at the location because of NCPA or any of its employees or subcontractors, and the Member shall perform all cleanup, removal, remediation and disposition services with respect thereto. In the event NCPA encounters Hazardous Waste at the location, NCPA shall take reasonable actions necessary to mitigate costs to the Member or liability of the Member due to such Hazardous Waste. The cost of actions taken by NCPA pursuant to this section shall be fully reimbursed by the Member to NCPA. 14.16 Status of Parties and Regulatory Compliance. The Parties acknowledge that this Agreement is formed between two public agencies. Neither Party shall have any claim against the members, governing officials, officers, employees or agents of either Party. The Member is subject to the regulatory compliance requirements of several agencies. The Member shall be solely responsible for, and shall reimburse NCPA for any costs of compliance with any permits or license conditions, including any fines or penalties, to the maximum extent permitted by law. 14.17 NCPA's Organization. The Member is responsible for assuring for itself that NCPA's personnel are appropriately trained, educated, and skilled to competently perform the Services. The Member acknowledges 31 DWD V. 1 SMSA 12/3/03 and agrees that NCPA makes no warranties or representations regarding the qualifications of its employees, agents, and subcontractors. 14.18 Acknowledgments and Interpretation. The Parties acknowledge and agree that the terms and conditions of this Agreement have been freely and fairly negotiated. The Parties acknowledge that in executing this Agreement they rely solely on their own judgment, belief, and knowledge, and such advice as they may have received from their own counsel, and they have not been influenced by any representation or statements made by any other Party or its counsel. No provision in this Agreement is to be interpreted for or against any Party because that Party or its counsel drafted such provisions. 14.19 Default Termination. Upon the occurrence of a material default, the non- breaching Party shall notify in writing the breaching Party of its intent to terminate this Agreement if the breach is not cured within thirty (30) days. If the breaching Party does not cure the event of default within such thirty (30) day period, the non-breaching Party may immediately terminate this Agreement for Default. Written notice of termination shall be delivered to the breaching Party at the address shown on page 2 of this Agreement or as changed, as provided therein. 14.20 Default Termination Remedies. In the event of a default termination for material breach or abandonment by the Member, NCPA may by 32 DWD V. 1 SMSA 12/3/03 14.21 15.1 appropriate court action or actions, either at law or in equity, preserve its position to recover damages and expenses associated with the breach; and/or pursue, concurrently or separately, other remedies available in law, in equity or in bankruptcy in anticipation of pursuing its remedies pursuant to Article 16 of this Agreement. Survival. The terms of this Agreement shall survive any termination or cancellation hereof to the extent necessary to allow a Party to enforce any remedy granted hereunder in connection with such termination or cancellation. The terms of Article 14 of this Agreement, entitled "Indenmification, Defense, Release, and Covenant Not to Sue" shall survive any termination or cancellation, in perpetuity as to the Release, and otherwise for ten (10) years and one day after the effective date of termination or cancellation. ARTICLE 15- DISPUTE RESOLUTION Negotiations. The Parties will attempt in good faith to resolve through negotiation any dispute, arising out of or relating to this Agreement. Either Party may initiate negotiations by providing written notice in letter form to the other Party, setting forth the subject of the dispute and the relief requested. The recipient of such notice will respond in writing within five (5) days with a detailed statement of its position on, and recommended solution to, the dispute. If the dispute is not resolved by 33 DWD V. I SMSA 12/3/03 15.2 this exchange of correspondence, then representatives of each Party with full settlement authority will meet at a mutually agreeable time and place within ten (10) days of the date of the initial notice in order to exchange relevant information and perspectives, and to attempt to resolve the dispute. If the Parties are unable to resolve the dispute at the meeting by negotiations, they shall consider mediation. During any dispute and negotiation the Member shall continue to timely pay NCPA for Services rendered and Transactions for which obligations remain unsatisfied, even though such dispute may concern those Services or Transactions. NCPA agrees to continue performing the Services, provided that no payment due from the Member is overdue. Mediation. The Parties agree that any and all disputes arising out of or relating to this Agreement that are not resolved by their mutual agreement after negotiations pursuant to section 16.1, should be submitted to mediation before JAMS, or its successor or similar alternative dispute resolution (ADR) organization of respected, retired judges, or to a private judge, as the Member may determine, in its reasonable discretion, and with the written consent of NCPA, provided that the Member will be responsible for all of the expenses of mediation. Either Party may commence the mediation process called for in this Agreement by filing a written request for mediation with JAMS, its 34 DWD V. I SMSA 12/3/03 successor, or another ADR organization or private judge with a copy to the other Party. The Parties agree that they will participate in the mediation in good faith when and if the Member determines to invoke 15.3 mediation as a dispute resolution remedy, at its expense. Waiver of Certain Judicial Rights. If the Parties fail to either negotiate or mediate a mutually satisfactory resolution of any dispute, then upon written notice given twenty (20) days in advance, either Party may terminate this Agreement, subject to any unpaid or unreimbursed compensation or costs payable by the Member to NCPA, and without affecting the survival of Article 14, entitled "Indenmification, Defense, Release, and Covenant Not to Sue" for its full term, notwithstanding any default hereunder by NCPA. The Parties agree not to, and covenant not to sue, and waive their respective rights thereto. ARTICLE 16 - LIMITATION OF LIABILITY 16.1 Limitation of Liability. To the extent the law allows, NCPA, its members, governing officials, officers, employees, and agents shall have no liability to the Member under this Agreement with respect to all claims however caused, arising out of the performance or non-performance of the Services and obligations under this Agreement, whether based in contract, warranty, tort (including negligence), strict liability, or otherwise, including without limitation, liability for consequential damages pursuant 35 DWD V. I SMSA 12/3/03 17.1 to Article 17, NCPA shall not be required to carry any insurance, and even if insurance is carried by NCPA, such insurance shall not be available to the Member for any claim, death, damages, injuries, losses of any kind whatsoever, unless, and solely to the extent, that the Member procures such insurance of its own accounts, and pays, and is solely responsible for any and all premiums and costs related to such coverage. If notwithstanding the foregoing limitations of this Section 16.1, liability is imposed, then such total liability shall be limited to the net present value of the expertise NCPA gained through this Agreement that is of value to its other members. ARTICLE 17 - CONSEQUENTIAL DAMAGES Consequential Damages. NCPA, its members, governing officials, officers, employees, and agents (excluding counterparties) and Member, its officers, employees and agents (excluding counterparties and NCPA) shall not be liable to each other, for incidental, indirect, punitive, exemplary, special or consequential loss or damage arising out of or relating to this Agreement, including, but not limited to, loss of use, customer claims and damages, loss of revenue, loss of power sales, loss of electric system reliability, outages and cascading disturbances, principal office expenses, delay, loss by reason of plant shutdown or inability to operate, increased cost of operating and maintaining the Project, debt 36 DWD V. 1 SMSA 12/3/03 service, rental payments or contractual damages incurred by the Member or NCPA to others. IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement on the Effective Date, having acknowledged and accepted the terms, conditions, promises, and covenants of this Agreement, as evidenced by the following signatures of the representatives of the Parties, who are represented and warranted to be fully and lawfully authorized, by all necessary official action, to execute and deliver this Agreement. MEMBER: NCPA: CITY OF UKIAH NORTHERN CALIFORNIA POWER AGENCY By: By: Name: Candace Horsley Title: City Manger Title: 37 DWD V. 1 SMSA 12/3/03 APPROVED AS TO FORM: APPROVED AS TO FORM: DENNIS W. DE CUIR A Law Corporation By: David J. Rapport City Attorney City of Ukiah By: Dennis W. De Cuir General Counsel ATTEST: By: Clerk 38 DWD V. I SMSA 12/3/03 Western Systems Power Pool. Rate Schedule FERC No. 6 EXHIBIT B Western Systems Power Pool Agreement © Western Systems Power Pool, Inc. 2003 All rights reserved Issued by' Michael E. Small, General Counsel to Western Systems Power Pool Issued on: November 19, 2003 Effective: February 1, 2004 Westen~ Systems Power Pool Rate Schedule FERC No. 6 TABLE OF CONTENTS First Revised Sheet No. 1 Superseding Original Sheet No. 1 PAGE o . . . o . 10. 11. 12. 13. 14. 15. 16. 17. 18. PARTIES RECITALS .......................................................................................................................... 4 AGREEMENT ..................................................................................................................... 5 DEFINITIONS TERM AND TERMINATION .......................................................................................... 11 SERVICE SCHEDULES AND WSPP DEFAULT TRANSMISSION TARIFF ............. 12 ADMINISTRATION EXECUTIVE AND OPERATING COMMITTEES ......................................................... 16 PAYMENTS UNCONTROLLABLE FORCES ...................................................................................... 22 WAIVERS NOTICES APPROVALS TRANSFER OF INTEREST IN AGREEMENT .............................................................. 27 SEVERABILITY. .............................................................................................................. 28 MEMBERSHIP .................................................................................................................. 28 RELATIONSHIP OF PARTIES ..................................................................................... 29A NO DEDICATION OF FACILITIES ................................................................................ 30 Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 2 Superseding First Revised Sheet No. 2 TABLE OF CONTENTS PAGE 19. NO RETAIL SERVICES ................................................................................................... 30 20. THIRD PARTY BENEFICIARIES ................................................................................... 30 21. LIABILITY AND DAMAGES ......................................................................................... 30 22. DEFAULT OF TRANSACTIONS UNDER THIS AGREEMENT AND CONFIRMATION AGREEMENTS ................................................................................. 34 22A. DEFAULT IN PAYMENT OF WSPP OPERATING COSTS ......................................... 41 23. OTHER AGREEMENTS .................................................................................................. 43 24. GOVERNING LAW .......................................................................................................... 43 25. JUDGMENTS AND DETERMINATIONS ...................................................................... 43 26. COMPLETE AGREEMENT ............................................................................................. 44 27. CREDITWORTHINESS ................................................................................................... 44 28. NETTING .......................................................................................................................... 46 29. TAXES ............................................................................................................................ 47A 30. CONFIDENTIALITY ........................................................................................................ 48 31. TRANSMISSION TARIFF ............................................................................................... 49 32. TRANSACTION SPECIFIC TERMS AND ORAL AGREEMENTS ............................. 49 33. PERFORMANCE, TITLE, AND WARRANTIES FOR TRANSACTIONS UNDER SERVICE SCHEDULES ................................................................................. 52A 34. DISPUTE RESOLUTION ................................................................................................. 53 35. FORWARD CONTRACTS ............................................................................................... 56 Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Fourth Revised Sheet No. 3 Superseding Third Revised Sheet No. 3 TABLE OF CONTENTS PAGE 36. 37. 38. 39. 40. 41. EXHIBIT A' EXHIBIT B' EXHIBIT C' EXHIBIT D' TRADE OPTION EXCEPTION ....................................................................................... 56 ADDITIONAL REPRESENTATIONS AND WARRANTIES ........................................ 57 FLOATING PRICES ......................................................................................................... 58 AMENDMENT ............................................................................................................... 58B EXECUTION BY COUNTERPARTS ........................................................................... 58C WITNESS .......................................................................................................................... 59 NETTING FORM OF COUNTERPARTY GUARANTEE AGREEMENT SAMPLE FORM FOR CONFIRMATION WSPP MEDIATION AND ARBITRATION PROCEDURES SERVICE SCHEDULES A. ECONOMY ENERGY SERVICE B. UNIT COMMITMENT SERVICE C. FIRM CAPACITY/ENERGY SALE OR EXCHANGE SERVICE LIST OF MEMBERS Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on' August 1, 2003 Effective: October 1, 2003 \Vestern Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 4 , 1. PARTIES: The Parties to this Western Systems Power Pool Agreement (hereinafter referred to as "Agreement") are those entities that have executed this Agreement, hereinafter sometimes referred to individually as "Party" and collectively as "Parties," but excluding any such entity that withdraws its participation in the Agreement. RECITALS: 2.1 2.2 The WSPP experiment has been successfully concluded. Its main purpose was to determine the feasibility of a marketing arrangement which would increase the efficiency of interconnected power system operations above that already being accomplished with existing agreements through increased market 'knowledge and market pricing of commodities. The Parties now desire to proceed with a similar marketing arrangement on a long term basis for prescheduled and real-time coordinated power transactions, such as economy energy transactions, unit commitment service, firm system capacity/energy sales or exchanges. Accordingly, this Agreement, together with any applicable Confirmation Agreement, sets forth the terms and conditions to implement these services within any applicable rate ceilings set forth in the Service Schedules in conformance with FERC orders where applicable. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al__.:., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 o . Second Revised Sheet No. 5 Superseding First Revised Sheet No. 5 2.3 Each Party meets the membership requirements set out in Section 16. 2.4 The Parties are willing to utilize their respective electric generation and transmission systems or contractual rights thereto to the extent of their respective obligations which are set forth in this Agreement. AGREEMENT: In consideration of the mutual covenants and promises herein set forth, the Parties agree as follows: DEFINITIONS: The following terms, when used herein with initial capitalization, whether in the singular or in the plural, shall have the meanings specified: 4.1 Agreement: This Western Systems Power Pool Agreement, including the Service Schedules and Exhibits attached hereto, as amended; provided, however, that Confirmation Agreements are not included within this definition. Administrative Committee: A sub-committee of the Executive Committee in accordance with Section 8.1.2. Broker: An entity or person that arranges trades or brings together Purchasers and Sellers without taking title to the power. Business Day(s): Any day other than a Saturday or Sunday or a national (United States or Canadian, whichever is applicable) holiday. United States holidays shall be holidays observed by Federal Reserve member banks in New York City. 4. la 4.1aa 4. lb Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 5A Where both the Seller and the Purchaser have their principal place of business in the United States, Canadian holidays shall not apply. Similarly, where both the Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Third Revised Sheet No. 6 Superseding Second Revised Sheet No. 6 Seller and the Purchaser have their principal place of business in Canada, UnitedStates holidays shall not apply. In situations where one Party has its principal place of business within the United States and the other Party's principal place of business is within Canada, both United States and Canadian holidays shall be observed. 4. lc California ISO: The California Independent System Operator Corporation or any successor organization. 4.1d Confirmation Agreement(s): Any oral agreement or written documentation for transactions under the Service Schedules which sets forth terms and conditions for transactions that are in addition to, substitute, or modify those set forth in the Agreement. A sample written confirmation document is included as Exhibit C. Section 32 of this Agreement provides for such Confirmation Agreements. The Parties may agree to modify terms of this Agreement for more than one transaction pursuant to a separate written agreement. The changes to the Agreement agreed to through such written agreements shall be considered part of the Confirmation Agreement and shall apply to all transactions entered into between the two Parties under the Agreement unless the Parties specifically agree to override such changes for a particular transaction consistent with § 32 of this Agreement. 4.1e Contract Price: The price agreed to between the Seller and the Purchaser for a transaction under the Agreement and any Confirmation Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 \Vestern Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 6A Superseding First Revised Sheet No. 6A 4. If Contract Quantity: The amount of electric energy and/or capacity to be supplied for a transaction under a Service Schedule as agreed to through any Confirmation Agreement. 4.2 Control Area: Shall mean an electric system capable of regulating its generation in order to maintain its interchange schedule with other electric systems and to contribute its frequency bias obligation to the interconnection as specified in the North American Electric Reliability Council (NERC) Operating Guidelines. 4.2a Costs: As defined in Section 22.3 of this Agreement. 4.2b Dealer: An entity or person that buys or sells power and takes title to the power at some point. 4.2c Defaulting Party: As defined in Section 22.1 of this Agreement. 4.2d Determination Period: As defined in Section 38.2 of this Agreement. 4.3 Economy Energy Service: Non-finn energy transaction whereby the Seller has agreed to sell or exchange and the Purchaser has agreed to buy or exchange energy that is subject to immediate interruption upon notification, in accordance with the Agreement, including Service Schedule A, and any applicable Confirmation Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 7 Superseding First Revised Sheet No. 7 4.4 4.4a 4.4b 4.5 4.6 4.7 Electric Utility: An entity or lawful association which (i) is a public utility, Independent Power Producer, or Power Marketer regulated under applicable state law or the Federal Power Act, or (ii) is exempted from such regulation under the Federal Power Act because it is the United States, a State or any political subdivision thereof or an agency of any of the foregoing, or a Rural Utilities Service cooperative, or (iii) is a public utility, Independent Power Producer, or Power Marketer located in Canada or Mexico that is similarly regulated. ERCOT: Electric Reliability Council of Texas, Inc., the corporation that administers Texas's power grid and is a regional reliability council. Event of Default: As defined in Section 22.1 of this Agreement. Executive Committee: That committee established pursuant to Section 8 of this Agreement. FERC: The Federal Energy Regulatory Commission or its regulatory successor. Firm Capacity/Energy Sale or Exchange Service: Firm capacity and/or energy transaction whereby the Seller has agreed to sell or exchange and the Purchaser has agreed to buy or exchange for a specified period available capacity with or without associated energy which may include a Physically-Settled Option and a capacity transaction in accordance with the Agreement, including Service Schedule C, and any applicable Confirmation Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on' July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 7A 4.7a 4.7b 4.7c 4.7d 4.7e First Party: As defined in Section 27 of this Agreement. Floating Price: As defined in Section 38.1 of this Agreement. Gains: As defined in Section 22.3 of this Agreement. Guarantee Agreement: An agreement providing a guarantee issued by a parent company or another entity guaranteeing responsibility for specific obligations for transactions under this Agreement and Confirmation Agreements. A sample form of guarantee is provided in Exhibit B. Guarantor: The entity providing a guarantee pursuant to a Guarantee Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 8 Superseding First Revised Sheet No. 8 4.8 4.9 4.10 4.11 4.1la 4.1lb 4.11c Hub: An electronic communication center that functions as a central point to electronically receive and assemble data for offers to buy or sell power or transmission service from each Party and make that data electronically available concurrently to all Parties. Incremental Cost: The forecasted expense incurred by the Seller in providing an additional increment of energy or capacity during a given hour. Independent Power Producer: An entity which is a non-traditional public utility that produces and sells electricity but which does not have a retail service franchise. Interconnected Transmission System: The total of all transmission facilities owned or operated by the Parties, including transmission facilities over which Parties have scheduling rights. Letter of Credit: An irrevocable, transferable, standby letter of credit, issued by an issuer acceptable to the Party requiring the Letter of Credit. Losses: As defined in Section 22.3 of this Agreement. Market Disruption Event: As defined in Section 38.2 of this Agreement. 4.11d NERC: North American Electric Reliability Council or any successor organization. 4.11e 4.11f Non-Defaulting Party: As defined in Section 22. l(a) of this Agreement. Non-Performing Party: As defined in Section 21.3(a) of this Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 8A Superseding Original Sheet No. 8A 4.11g Non-Standard Confirmation Provisions: As defined in Section 32.5 of this Agreement. 4.11h NYMEX: New York Mercantile Exchange, the physical commodity futures exchange and a trading forum for energy and precious metals. 4.12 Operating Agent: An agent of the WSPP as may be designated to the Executive Committee from time to time. 4.13 Operating Committee: That committee established pursuant to Section 8 of this Agreement. 4.13a 4.13b Party or Parties: As defined in Section 1 of this Agreement. Performing Party: As defined in Section 21.3(a) of this Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 9 Superseding Original Sheet No. 9 4.14 4.14a Power Marketer: An entity which buys, sells, and takes title to electric energy, transmission and/or other services from traditional utilities and other suppliers. Physically-Settled Option: Includes (i) a call option which is the right, but not the obligation, to buy an underlying power product as defined under Service Schedules B or C according to the price and exercise terms set forth in the Confirmation Agreement; and (ii) a put option which is the right, but not the obligation, to sell an underlying power product as defined under Service Schedules B or C according to the price and exercise terms set forth in the Confirmation Agreement. 4.14b Premium: The amount paid by the Purchaser of a Physically-Settled Option to the Seller of such Option by the date agreed to by the Parties in the Confirmation Agreement. 4.14c 4.15 Present Value Rate: As defined in Section 22.3(b) of this Agreement. Purchaser: Any Party which agrees to buy or receive from one or more of the other Parties any service pursuant to the Agreement under any Service Schedule and any applicable Confirmation Agreement. 4.16 Qualifying Facility: A facility which is a qualifying small power production facility or a qualifying cogeneration facility as these terms are defined in Federal Power Act Sections 3(17)(A), 3(17)(C), 3(18)(A), and 3(18)(B); which meets the requirements set forth in 18 C.F.R. §§ 292.203-292.209; or a facility in Canada or Mexico that complies with similar requirements. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 10 Superseding First Revised Sheet No. 10 4.16a 4.16b 4.16c 4.16d 4.17 4.18 Replacement Price: The price at which the Purchaser, acting in a commercially reasonable manner, effects a purchase of substitute electric energy in place of the electric energy not delivered by the Seller or, absent such a purchase, the market price for such quantity of electric energy, as determined by the Purchaser in a commercially reasonable manner, at the delivery point (agreed upon by the Seller and the Purchaser for the transaction). Retail Entity: A retail aggregator or supplier or retail customer; provided, however, only those Retail Entities eligible for transmission service under the FERC's pro forma open access transmission tariff are eligible to become members of the WSPP. Sales Price: The price at which the Seller, acting in a commercially reasonable manner, effects a resale of the electric energy not received by the Purchaser or, absent such a resale, the market price for such quantity of electric energy at the delivery point (agreed upon by the Seller and the Purchaser), as determined by the Seller in a commercially reasonable manner. Second Party: As defined in Section 27 of this Agreement. Seller: Any Party which agrees to sell or provide to one or more of the other Parties any service pursuant to the Agreement under any Service Schedule and any applicable Confirmation Agreement. Service Schedule: A schedule of services established pursuant to Section 6 of this Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective- September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 10A Superseding Original Sheet No. 10A 4.18a 4.18b 4.18c 4.18d 4.19 4.20 Successor in Operation: The successor entity which takes over the wholesale electric trading operations of the first entity either through a merger or restructuring. A Successor in Operation shall not include an entity which merely acquires power sales contracts from the first entity either through a purchase or other means without taking over the wholesale electric trading operations of the first entity. Terminated Transaction: As defined in Section 22.2 of this Agreement. Termination Payment: As defined in Section 22.2 of this Agreement. Trading Day: As defined in Section 38.2 of this Agreement. Uncontrollable Forces: As defined in Section 10 of this Agreement or in a Confirmation Agreement. Unit Commitment Service: A capacity and associated scheduled energy transaction or a Physically-Settled Option which the Seller has agreed to sell and the Purchaser has agreed to buy from a specified unit(s) for a specified period, in Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 11 Superseding First Revised Sheet No. 11 . accordance with the Agreement, including Service Schedule B, and any applicable Confirmation Agreement. 4.20a WSPP: The Western Systems Power Pool, Inc. a corporation organized in 1995 and duly existing under the Utah Revised Nonprofit Corporation Act. 4.20b WSPP Default Transmission Tariff: The transmission tariff filed on behalf of WSPP Members with FERC as it may be amended from time to time. 4.20c WSPP Homepage: WSPP's internet web site, www.wspp.org. TERM AND TERMINATION: 5.1 This Agreement shall become effective as of July 27, 1991 when acceptance or approvals required under Section 13.2 of this Agreement with respect to those Parties that are subject to FERC jurisdiction have been obtained; provided, however, that this Agreement shall not become effective as to any Party in the event the pre-grant of termination requested under Section 13.3 is not allowed by FERC, absent that Party's consent; and provided, further, that this Agreement shall not become effective as to any Party if any terms, conditions or requirements imposed by FERC are found unacceptable by that Party. This Agreement shall continue in effect for a period of ten (10) years from said effective date and thereafter on a year to year basis until terminated by the Parties; provided, however, that any Party may withdraw its participation at any time after the effective date of this Agreement on thirty (30) days prior written notice to all other Parties. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 1 lA 5.2 As of the effective date of any withdrawal, the withdrawing Party shall have no further rights or obligations under this Agreement except the right to collect Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 12 Superseding Original Sheet No. 12 money or receive service owed to it for transactions under any Service Schedule and the obligation to pay such amounts due to another Party and to complete any transactions agreed to under any Service Schedule as of said date. No Party shall oppose, before any court or regulatory agencies having jurisdiction, any other Party's withdrawal as provided in this Section. 5.3 Except as provided for in Section 5.2, after termination, or withdrawal with respect to the withdrawing Party, all rights to services provided under this Agreement or any tariff or rate schedule which results from or incorporates this Agreement shall cease, and no Party shall claim or assert any continuing right to such services under this Agreement. Except as provided for in Section 5.2, no Party shall be required to provide services based in whole or in part on the existence of this Agreement or on the provision of services under this Agreement beyond the termination date, or date of withdrawal with respect to the withdrawing Party. 6. SERVICE SCHEDULES AND WSPP DEFAULT TRANSMISSION TARIFF: 6.1 The Parties contemplate that they may, from time to time, add or remove Service Schedules under this Agreement. The attached Service Schedules A through C for Economy Energy Service, Unit Commitment Service, and Firm Capacity/Energy Sale or Exchange Service are hereby approved and made a part of this Agreement. Nothing contained herein shall be construed as affecting in any way the right of the Parties to jointly make application to FERC for a change Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 13 Superseding Original Sheet No. 13 in the rates and charges, classification, service, terms, or conditions affecting WSPP transactions under Section 205 of the Federal Power Act and pursuant to FERC rules and regulations promulgated thereunder. SubJect to the provisions of Section 13, future Service Schedules, if any, shall be adopted only by amendment of this Agreement and shall be attached hereto and become a pan of this Agreement. 6.2 [RESERVED] 6.3 When the WSPP Default Transmission Tariff applies as specified in the preamble to such Default Transmission Tariff, Transmission Service under it shall be available both to Parties and nonParties under this Agreement; provided, however, each Party or nonParty must be an eligible customer under the WSPP Default Transmission Tariff in order to receive service. 7. ADMINISTRATION: 7.1 The WSPP shall perform the administrative tasks necessary and appropriate to implement this Agreement. All authority to direct, manage and administer the WSPP shall reside in the Executive Committee. All duties assigned under this Agreement, or otherwise, to the Operating Committee, sub-committees, officers, Administrative Committee, or Operating Agent, are delegated powers of the Executive Committee and are Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 13A 7.2 subject to the Executive Committee's direction and control. The WSPP may engage the services of an Operating Agent, from time to time, to perform tasks in furtherance of this Agreement. At least sixty (60) days prior to each calendar year that this Agreement is in effect, the Administrative Committee shall submit a budget for said year of operation to the Operating Committee for review. The proposed budget shall then be submitted, with the Operating Committee's recommendations, to the Executive Committee. The Executive Committee may approve the budget as submitted or with revisions. The Administrative Committee, Operating Committee, and Executive Committee shall address any appropriate revisions of the budget in the same manner. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on' August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 14 Superseding Original Sheet No. 14 7.3 The WSPP shall, as necessary, bill the Parties for costs incurred under this Agreement on an estimated basis reasonably in advance of when due, and such billings shall be paid by the Parties when due. Such billings shall be adjusted in the following month(s) to reflect recorded costs. Billing and payment of WSPP costs shall otherwise be implemented in accordance with the provisions of Section , 7.4 The WSPP shall maintain the WSPP Homepage and, as it deems appropriate, may engage a contractor for this purpose. 7.5 Each Party shall maintain a link to the WSPP Homepage and shall be responsible for expenses related thereto. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 15 Superseding Original Sheet No. 15 7.6 7.7 The WSPP, at reasonable times and places, shall make available its books of account, and records and documentation supporting expenditures under this Agreement, for the inspection of any Party for a period of time not to exceed two (2) years from the time such expenditures were incurred. A Party requesting review of the WSPP's records shall give the WSPP sufficient notice of its intent, but in no event less than thirty (30) days. The requesting Party may perform this review using personnel from its own staff or designate a certified public accounting firm for the purpose of this review. All costs incurred to perform this review shall be at the requesting Party's own expense. The Party performing the review shall not voluntarily release the WSPP's records or disclose any information contained therein to any third party unless the written consent of the WSPP and the Executive Committee has been obtained, except as required by law. Upon the termination of this Agreement, in accordance with applicable law, the WSPP shall dispose of any and all of its assets and wind up its affairs as the Executive Committee may direct. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 16 Superseding Original Sheet No. 16 8. EXECUTIVE AND OPERATING COMMITTEES: As a means of securing effective and timely cooperation within the activities hereunder and as a means of dealing on a prompt and orderly basis with various problems which may arise in connection with system coordination and operation under changing conditions, the Parties hereby establish an Executive Committee and an Operating Committee. 8.1 Executive Committee: The Executive Committee shall consist of one representative and an alternate from each Party designated pursuant to Section 8.5 herein. The responsibilities of the Executive Committee are as follows: 8.1.1 To establish and amend bylaws of the WSPP consistent with this Agreement and to serve as the Board of Directors of the WSPP in accordance with applicable law. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 16A 8.1.2 To establish sub-committees as it may from time to time deem necessary or appropriate. Such sub-committees shall include an Administrative Committee to administer the affairs of the WSPP as the Executive Committee may direct or approve, which sub-committee shall be comprised of the Chairman, Vice-Chairman, and Secretary/Treasurer of the WSPP and the Chairman and Vice-Chairman of the Operating Committee. 8.1.3 To review at least annually the service activities hereunder to ensure that 8.1.4 such activities are consistent with the spirit and intent of this Agreement. To review any unresolved issues which may arise hereunder and endeavor to resolve the issues. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 17 Superseding Original Sheet No. 17 8.1.5 To review and approve the WSPP's annual budget under this Agreement, and any revision thereto, in accordance with Section 7.2 of this Agreement 8.1.6 or otherwise as the Executive Committee deems necessary or appropriate. To amend this Agreement, from time to time, provided that no such amendment or restatement shall be effective unless approved by the FERC and subject to terms and conditions of such approval. 8.1.7 To review and act on the application of an entity to become a Party to this Agreement, or to delegate such authority as the Executive Committee deems appropriate.. 8.1.8 To do such other things and carry out such duties as specifically required or authorized by this Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 17A 8.1.9 To notify any Party of the rescission of its interest in this Agreement due to its failure to continue to meet the requirements of Section 16.1, or to delegate such authority to the Chairman of the Executive Committee, the Chairman of the Operating Committee, or the Administrative Committee. 8.1.10 To arrange for legal representation of the WSPP. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1,2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 18 Superseding Original Sheet No. 18 8.2 Operating Committee: The Operating Committee shall consist of one representative and an alternate from each Party designated pursuant to Section 8.5. The responsibilities of the Operating Committee are as follows: 8.2.1 To establish, review, approve, or modify procedures and standard practices, consistent with the provisions hereof, for the guidance of operating employees in the Parties' electric systems as to matters affecting transactions under this Agreement. 8.2.2 To submit to the Executive Committee any proposed revisions to the Service Schedules or proposed additional Service Schedules. 8.2.3 To submit to the Executive Committee proposed amendments to this Agreement, provided that the Operating Committee shall have no authority to amend this Agreement, and further provided that the Executive Committee may amend this Agreement under Section 8.1.6 without having first received recommendations from the Operating Committee. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 18A 8.2.4 To establish, review, approve, or modify any scheduling or operating procedures required in connection with transactions under this Agreement. 8.2.5 To review and make recommendations to the Executive Committee for approval of the annual budget of the WSPP under this Agreement, including any proposed revisions thereto. 8.2.6 To review and recommend as necessary the types and arrangement of equipment for intersystem communication facilities to enhance transactions and benefits under this Agreement. 8.2.7 To monitor the administration and costs of the WSPP Homepage. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 19 Superseding Original Sheet No. 19 8.3 8.4 8.2.8 If the Executive Committee so directs, to review new member applications for membership in the WSPP under this Agreement and make recommendations on said applications to the Executive Committee, or to delegate such authority as the Operating Committee deems appropriate. 8.2.9 To do such other things and carry out such duties as specifically required or authorized by this Agreement or as directed by the Executive Committee; provided, however, that the Operating Committee shall have no authority to amend this Agreement. All matters which require Operating Committee or Executive Committee approval as provided in this Agreement shall be by no less than ninety percent (90%) affirmative agreement of the committee members present or voting by proxy. Unless otherwise agreed by all committee members of the applicable committee, the Chairman of the Executive Committee and the Chairman of the Operating Committee shall cause all members of the applicable committee to receive notice of a committee meeting at least ten (10) Business Days prior to the date of the meeting. Such notice shall include an agenda of matters to be discussed and voted on at the meeting. All material issues to be submitted to a vote of the committee shall appear on the agenda. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 19A 8.5 In accordance with Section 15.5.2, each Party shall give notice to the other Parties and the WSPP of the name of its designated representative and alternate representative (to act in the absence of the designated representative) on the Executive Committee and Operating Committee, and of any changes thereto. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 20 Superseding First Revised Sheet No. 20 Each Party's designated representatives shall be authorized to act on its behalf with respect to votes taken of committee members and other activities of the committee. 8.6 The Executive Committee shall meet no less than once annually and otherwise as determined by the Chairman in his discretion. The Operating Committee shall meet as necessary, as determined by the Chairman in his discretion. The Chairman shall call a meeting of a committee upon the written request of not less than ten (10) merrt~ers of the applicable committee. 8.7 The Executive Committee shall elect a Chairman, Vice-Chairman, and Secretary/Treasurer. The Operating Committee shall elect a Chairman, Vice- Chairman, and Secretary. These officers shall serve terms of two-years duration, which terms shall commence on January 1 of the year following the election and expire on December 31 of the subsequent year, provided, that despite the expiration of an officer's term, the officer shall continue to serve until the officer's successor is elected and commences to serve, and further provided that with or without cause, the Executive Committee or Operating Committee, as applicable, may elect a substitute officer prior to the expiration of a term. 8.7.1 The Chairman of the Executive Committee shall be the Chairman of the Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 20A Superseding Original Sheet No. 20A WSPP. The Chairman shall preside over meetings of the Executive Committee and, when the Executive Committee is not in session, exercise day to day management and control of the business and affairs of the WSPP, subject at all times to this Agreement and the direction of the Executive Committee. 8.7.2 The Vice-Chairman of the Executive Committee shall be the Vice-Chairman of the WSPP. The Vice-Chairman, in the absence or disability of the Chairman, shall exercise the powers and perform the duties of the Chairman and such other duties as the Executive Committee or the Chairman may prescribe, subject at all times to this Agreement and the direction of the Executive Committee. 8.7.3 The Secretary/Treasurer shall be the Secretary/Treasurer of the WSPP. The Secretary/Treasurer, or his designee, shall record minutes of meetings and actions of the Executive Committee, perform the customary duties of a secretary and treasurer of a non-profit corporation, and attend to the giving and serving of all notices required by law or under this Agreement. 8.7.4. The Chairman of the Operating Committee shall preside over Operating Committee meetings. The Vice Chairman of the Operating Committee shall serve in the absence of the Chairman and perform such other duties as the Operating Committee may assign. The Secretary of the Operating Committee, or his designee, shall record minutes of meetings and actions of the Operating Committee, and shall give Notice of meetings. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 20B . PAYMENTS: 9.1 The accounting and billing period for transactions under this Agreement shall be one (1) calendar month, unless otherwise specified in a Confirmation Agreement. Bills sent to any Party shall be sent to the appropriate billing address as set forth on the WSPP homepage or as otherwise specified by such Party. 9.2 Unless otherwise specified, payments for amounts billed under this Agreement shall be paid so that such payments are received by the Party to be paid on the 20th day of the invoicing month or the tenth (10) day after receipt of the bill, whichever is later. Notwithstanding the foregoing, Premiums shall be paid within three (3) Business Days of receipt of the invoice therefor. Payment shall be made at the location designated by the Party to which payment is due. Payment shall be considered received when payment is received by the Party to which Payment is due at the location designated by that Party. If'the due date falls on a non- Business Day of either Party, then the payment shall be due on the next following Business Day. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 20C 9.3 Amounts not paid on or before the due date shall be payable with interest calculated daily, at a rate equal to 200 basis points above the per annum Prime Rate reported daily in the Wall Street Journal for the period beginning on the day after the due date and ending on the day of payment, provided that such interest shall not exceed the amount permitted by law. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 21 Superseding First Revised Sheet No. 21 9.4 9.5 9.6 In case any portion of any bill is in dispute, the entire bill shall be paid when due. Any excess amount of bills which, through inadvertent errors or as a result of a dispute, may have been overpaid shall be returned by the owing Party upon determination of the correct amount, with interest calculated in the manner set forth in Section 9.3. The Parties shall have no rights to dispute the accuracy of any bill or payment after a period of two (2) years from the date on which the bill was initially delivered. If a Party's records reveal that a bill was not delivered, then the Party may deliver to the appropriate Party a bill within two (2) years from the date on which the bill would have been delivered under Section 9.1 of this Agreement. The right to payment is waived with respect to any amounts not billed within such two (2) year period. Each Party, or any third party representative of a Party, shall keep complete and accurate records, and shall maintain such data as may be necessary for the purpose of ascertaining the accuracy of all relevant data, estimates, or statements Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 21A Superseding Original Sheet No. 21A of charges submitted hereunder for a period of two (2) years from the date the bill was delivered under this Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Third Revised Sheet No. 22 Superseding Second Revised Sheet No. 22 10. Within a two (2) year period from the date on which the bill was initially delivered, any Party to the applicable transaction may request in writing copies of the records of the other Party for that transaction to the extent reasonably necessary to verify the accuracy of any statement or charge. The Party from which documents or data has been requested shall cooperate in providing the documents and data within a reasonable time period. UNCONTROLLABLE FORCES: No Party shall be considered to be in breach of this Agreement or any applicable Confirmation Agreement to the extent that a failure to perform its obligations under this Agreement or any such Confirmation Agreement shall be due to an Uncontrollable Force. The term "Uncontrollable Force" means an event or circumstance which prevents one Party from performing its obligations under one or more transactions, which event or circumstance is not within the reasonable control of, or the result of the negligence of the claiming Party, and which by the exercise of due diligence, the claiming Party is unable to avoid, cause to be avoided, or overcome. So long as the requirements of the preceding sentence are met, "Uncontrollable Forces" may include and are not restricted to flood, drought, earthquake, storm, fire, lightning, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, restraint by court order or public authority, and action or nonaction by, or failure to obtain the necessary authorizations or approvals from, any governmental agency or authority. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1,2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 22A The tbllowing shall not be considered "Uncontrollable Forces": (i) the price of electricity faced by Seller; or (ii) Purchaser's inability due to price to use or resell the power purchased hereunder. No Party shall, however, be relieved of liability for failure of performance to the extent that such failure is due to causes arising out of its own negligence or due to removable or remediable causes which it fails to remove or remedy within a reasonable time period. Nothing contained herein shall be construed to require a Issued by: Michael E. Small, General Counsel to Effective: February 1, 2001 Western Systems Power Pool Issued on: December 1, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 23 Superseding Original Sheet No. 23 Party to settle any strike or labor dispute in which it may be involved. Any Party rendered unable to fulfill any of its obligations by reason of an Uncontrollable Force shall give prompt notice of such fact and shall exercise due diligence, as provided above, to remove such inability within a reasonable time period. If oral notice is provided, it shall be promptly followed by written notice. Notwithstanding the "due diligence" obligations or obligations to remove or remedy the causes set forth in the foregoing paragraph (which do not apply to this paragraph except as specified below), where the entity providing transmission services for transactions under any Service Schedule interrupts such transmission service, the interruption in transmission service shall be considered an Uncontrollable Force under this Section 10 only in the following two sets of circumstances: (1) An interruption in transmission service shall be considered an Uncontrollable Force if (a) the Parties agreed on a transmission path for that transaction at the time the transaction under this Agreement was entered into by the Parties' thereto, (b) firm transmission involving that transmission path was obtained pursuant to a transmission tariff or contract to effectuate the transaction under the applicable Service Schedule, and (c) the entity providing transmission service curtailed or interrupted such firm transmission pursuant to the applicable transmission tariff or contract; (2) if the Parties did not agree on the transmission path for a transaction at the time the transaction was entered into, an interruption in transmission service shall be Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 24 11. 12. considered an Uncontrollable Force only if (a) the Party contracting for transmission services shall have made arrangements with the entity providing transmission service for firm transmission to effectuate the transaction under the applicable Service Schedule, (b) the entity providing transmission service curtailed or interrupted such transmission service due to an event of Uncontrollable Forces or provision of like effect, and (c) the Party which contracted for such firm transmission services could not obtain alternate energy at the delivery point, alternate transmission services, or alternate means of delivering energy after exercising due diligence. No Party shall be relieved by operation of this Section 10 of any liability to pay for power delivered to the Purchaser or to make payments then due or which the Party is obligated to make with respect to performance which occurred prior to the Uncontrollable Force. WAIVERS: Any waiver at any time by any Party of its rights with respect to a default under this Agreement or any Confirmation Agreements, or any other matter under this Agreement, shall not be deemed a waiver with respect to any subsequent default of the same or any other matter. NOTICES: 12.1 Except for the oral notice provided for in Section 10 of this Agreement, any formal notice, demand or request provided for in this Agreement shall be in Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 25 Superseding Original Sheet No. 25 13. 12.2 writing and shall be deemed properly served, given or made if delivered in person, or sent by either registered or certified mail (postage prepaid), prepaid telegram, fax, overnight delivery (with record of receipt), or other means agreed to by the Parties. RESERVED 12.3 Notices and requests of a routine nature applicable to delivery or receipt of power or energy or operation of facilities shall be given in such manner as the committees from time to time or the Parties to a transaction shall prescribe. APPROVALS' 13.1 13.2 This Agreement is subject to valid laws, orders, rules and regulations of duly constituted authorities having jurisdiction. Nothing contained in this Agreement shall give FERC jurisdiction over those Parties not otherwise subject to such jurisdiction or be construed as a grant of jurisdiction over any Party by any state or federal agency not otherwise having jurisdiction by law. This Agreement, including any Service Schedule hereto, shall become effective as to any Party when it is accepted for filing by FERC, without changes or conditions unacceptable to such Party, for application to the Parties subject to FERC jurisdiction under the Federal Power Act; provided, however, that nothing in this Agreement is intended to restrict the authority of the Bonneville Power Administration (BPA) pursuant to applicable statutory authority to use its existing Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on' July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 25A wholesale power and transmission rates or to adopt new rates, rate schedules, or general rate schedule provisions for application under this Agreement and obtain Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 26 13.3 13.4 interim or final approval of those rates from FERC pursuant to Section 7 of the Pacific Northwest Electric Power Planning and Conservation Act, 16 U.S.C. Sec. 839e, provided such rates do not exceed the maximum rates in the applicable Service Schedule and are consistent with the terms and conditions of said Service Schedule. If, upon filing of this Agreement by Parties subject to FERC jurisdiction under the Federal Power Act, FERC orders a hearing to determine whether this Agreement or a Service Schedule under this Agreement is just and reasonable under the Federal Power Act, the Agreement or Service Schedule shall not become effective until the date when an order issued by FERC, determining this Agreement or the Service Schedule to be just and reasonable without changes or new conditions unacceptable to the Parties, is no longer subject to judicial review. Any changes or conditions imposed by any agency or court, including FERC ordering a hearing, shall be cause for immediate withdrawal by any nonconsenting Party. The Parties subject to FERC jurisdiction under the Federal Power Act shall have the right to terminate their participation in this Agreement, and any rate schedule or services included herein, pursuant to the terms of Section 5 of this Agreement and without the necessity of further filing with or approval by FERC. Any amendment or change in maximum rates specified in the Service Schedules shall not become effective with regard to any Party that is subject to FERC jurisdiction under the Federal Power Act until it is accepted for filing or Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with 6rder of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 27 Superseding Original Sheet No. 27 14. confirmed and approved by FERC as specified in and subject to the conditions of Section 13.2. 13.5 Nothing contained in this Agreement shall be construed to establish any precedent for any other agreement or to grant any rights to or impose any obligations on any Party beyond the scope and term of this Agreement. TRANSFER OF INTEREST IN AGREEMENT: No Party shall voluntarily transfer its membership under this Agreement without the written consent and approval of all other Parties except to a Successor in Operation of such Party. With regard to the transfer of the rights and obligations of any Party associated with transactions under the Service Schedules, neither Party may assign such rights or obligations unless (a) the other Party provides its prior written consent which shall not be unreasonably withheld; or (b) the assignment is to a Successor in Operation which provides reasonable creditworthiness assurances (.see Section 27 for examples of such assurances) if required by the non-assigning Party based upon its reasonably exercised discretion. Any successor or assignee of the rights of any Party, whether by voluntary transfer, judicial or foreclosure sale or otherwise, shall be subject to all the provisions and conditions of this Agreement and Confirmation Agreements (where applicable) to the same extent as though such successor or assignee were the original Party under this Agreement or the Confirmation Agreements, and no assignment or transfer of any rights under this Agreement or any Confirmation Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 27A Agreement shall be effective unless and until the assignee or transferee agrees in writing to assume all of the obligations of the assignor or transferor and to be bound by all of the provisions and Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective' September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 28 Superseding Original Sheet No. 28 15. 16. conditions of this Agreement and any Confirmation Agreement (where applicable). The execution of a mortgage or trust deed or a judicial or foreclosure sale made thereunder shall not be deemed a voluntary transfer within the meaning of this Section 14. SEVERABILITY: In the event that any of the terms, covenants or conditions of this Agreement or any Confirmation Agreement, or the application of any such term, covenant or condition, shall be held invalid as to any person or circumstance by any court, regulatory agency, or other regulatory body having jurisdiction, all other terms, covenants or conditions of this Agreement and the Confirmation Agreement and their application shall not be affected thereby, but shall remain in force and effect unless a court, regulatory agency, or other regulatory body holds that the provisions are not separable from all other provisions of this Agreement or such Confirmation Agreement. MEMBERSHIP: 16.1 Any Electric Utility, Retail Entity or Qualifying Facility may become a Party to this Agreement. The Executive Committee shall notify such Electric Utility, Retail Entity or Qualifying Facility of its decision within sixty (60) days of a request to become a Party to this Agreement, and any acceptable entity shall become a Party hereto by the execution of this Agreement or a counterpart hereof, payment of costs pursuant to Section 16.4, and concluding any necessary acceptance or approval referred to in Section 13. Any such Party, if it is subject to the ratemaking jurisdiction of FERC, Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: May 2, 2001 Effective: July 1, 2001 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 29 Superseding Original Sheet No. 29 shall be responsible for any FERC filing necessary for it to implement its performance under this Agreement. 16.2 Each Party shall continue to meet the requirements of Section 16.1 in order to remain a Party to this Agreement 16.3 Being a Party to this Agreement shall not serve as a substitute for contractual arrangements that may be needed between any Party which operates a Control Area and any other Party which operates within that Control Area. 16.4 Any entity that becomes a Party to this Agreement which was not a party to the experimental Western Systems Power Pool Agreement shall pay a one time fee of $25,000 under this Agreement in recognition of prior efforts and costs incurred by the parties to the experimental Western Systems Power Pool Agreement, which efforts greatly facilitated development of this Agreement. Such fee shall be credited to future costs of the WSPP incurred hereunder. 16.5 In addition to requirements set forth elsewhere in this Agreement imposed on Parties as part of their membership in the WSPP, each Party shall abide by the following requirements: 16.5.1 Each Party shall maintain updated information regarding its Executive Committee and Operating Committee representatives on the WSPP Homepage and shall submit changes within a reasonable time period. 16.5.2 With regard to disputes involving transactions under this Agreement or other agreements, no Party shall seek to conduct discovery of the WSPP or Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 29A 17. compel the testimony of WSPP officers acting in their capacities as officers of the WSPP or of the WSPP's attorneys or consultants with regard to their work for the WSPP, provided that the foregoing prohibition shall not apply in proceedings brought against the WSPP. In the event a Party seeks to compel discovery or testimony in violation of this Section, that Party shall be deemed to have consented to the quashing of the subpoena or other process providing therefor. Notwithstanding any other provision in this Agreement, a Party that seeks to conduct discovery or take testimony in breach of this provision shall compensate the WSPP and its officers, attorneys, and consultants, as applicable, for all out-of-pocket costs incurred. RELATIONSHIP OF PARTIES: 17.1 Nothing contained herein or in any Confirmation Agreement shall be construed to create an association, joint venture, trust, or partnership, or impose a trust or partnership covenant, obligation, or liability on or with regard to any one or more of the Parties. Each Party shall be individually responsible for its own covenants, obligations, and liabilities under this Agreement and under any applicable Confirmation Agreement. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 30 Superseding First Revised Sheet No. 30 17.2 All rights of the Parties are several, not joint. No Party shall be under the control of or shall be deemed to control another Party. Except as expressly provided in this Agreement, no Party shall have a right or power to bind another Party without its express written consent. 18. NO DEDICATION OF FACILITIES: Any undertaking by one Party to another Party under any provision of this Agreement shall not constitute the dedication of the electric system or any portion thereof of the undertaking Party to the public or to the other Party, and it is understood and agreed that any such undertaking under any provision of this Agreement by a Party shall cease upon the termination of such Party's obligations under this Agreement. 19. NO RETAIL SERVICES: 20. Nothing contained in this Agreement shall grant any rights to or obligate any Party to provide any services hereunder directly to or for retail customers of any Party. THIRD PARTY BENEFICIARIES: This Agreement shall not be construed to create rights, in, or to grant remedies to, any third party as a beneficiary of this Agreement or of any duty, obligation or undertaking established herein except as provided for in Section 14. 21. LIABILITY AND DAMAGES: 21.la This Agreement contains express remedies or measures of damages in Sections 21.3 and 22 for non-performance or default. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 30A Superseding Original Sheet No. 30A ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. Therefore, except as provided in Sections 21.3 and 22, no Party or its directors, members of its governing bodies, officers or employees shall be liable to any other Party or Parties for any loss or damage to property, loss of earnings, or revenues, personal injury, or any other direct, indirect, or consequential damages or injury, or punitive damages, which may occur or result from the performance or non-performance of this Agreement (including any applicable Confirmation Agreement), including any negligence arising hereunder. Any liability or damages faced by an officer or employee of a Federal agency or by that agency that would result from the operation of this provision shall not be inconsistent with Federal law. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 31 Superseding Original Sheet No. 31 21.2 21.3 Notwithstanding any other provision in this Agreement, any Party due monies under this Agreement, the amounts of which are not in dispute or if disputed have been the subject of a decision awarding such amounts, (i) shall have the right to seek payment of such monies in any forum having competent jurisdiction and (ii) shall possess the right to seek relief directly from that forum without first utilizing the mediation or arbitration provisions of this Agreement and without exercising termination and liquidation rights under Section 22. The following damages provision shall apply to transactions under Service Schedules B and C. For transactions under Service Schedule A, this damages provision or some other damages provision will apply only if such a damages provision is agreed to through a Confirmation Agreement. The damages under this Section 21.3 apply to a Party's failure to deliver or receive electric power or energy in violation of the terms of the Agreement and any Confirmation Agreement. The Contract Quantity and Contract Price referred to in this Section Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 3lA 21.3 are part of the agreement between the Parties for which damages are being calculated under this Section. (a) If either Party fails to deliver or receive, as the case may be, the quantities of electric power or energy due under the Agreement and any Confirmation Agreement (thereby becoming a "Non-Performing Party" for the purposes of this Section 21.3), the other party (the "Performing Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 32 Party") shall be entitled to receive from the Non-Performing Party an amount calculated as follows (unless performance is excused by Uncontrollable Forces as provided in Section 10, the applicable Service Schedule, or by the Performing Party): (1) If the amount the Purchaser scheduled or received in any hour is less than the applicable hourly Contract Quantity, then the Purchaser shall be liable for (a) the product of the amount (whether positive or negative), if any, by which the Contract Price differed from the Sales Price (Contract Price - Sales Price) and the amount by which the quantity received by the Purchaser was less than the hourly Contract Quantity; plus (b) the amount of transmission charge(s), if any, for finn transmission service upstream of the delivery point, which the Seller incurred to achieve the Sales Price, less the reduction, if any, in transmission charge(s) achieved as a result of the reduction in the Purchaser's schedule or receipt of electric energy (based on Seller's reasonable commercial efforts to achieve such reduction). If the total amounts for all hours calculated under this paragraph (1) are negative, then neither the Purchaser nor the Seller shall pay any amount under this Section 21.3(a)(1). Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 (2) (3) First Revised Sheet No. 33 Superseding Original Sheet No. 33 If the amount the Seller scheduled or delivered in any hour is less than the applicable hourly Contract Quantity, then the Seller shall be liable for (a) the product of the amount (whether positive or negative), if any, by which the Replacement Price differed from the Contract Price (Replacement Price - Contract Price) and the amount by which the quantity delivered by the Seller was less than the hourly Contract Quantity; plus (b) the amount of transmission charge(s), if any, for firm transmission service downstream of the delivery point, which the Purchaser incurred to achieve the Replacement Price, less the reduction, if any, in transmission charge(s) achieved as a result of the reduction in the Seller's schedule or delivery (based on Purchaser's reasonable commercial effort to achieve such reduction). If the total amounts for all hours calculated under this paragraph (2) are negative, then neither the Purchaser nor the Seller shall pay any amount under this Section 21.3(a)(2). The Non-Performing Party also shall reimburse the Performing Party for any charges imposed on the Performing Party under open access transmission tariffs due to the non-performance. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 33A Superseding Original Sheet No. 33A (4) The Non-Performing Party shall pay any amount due from it under this section within the billing period as specified in Section 9 of this Agreement or agreed to in the applicable Confirmation Agreement if the Parties agreed to revise the billing period in Section 9. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 34 22. (b) (c) (d) DEFAULT OF TRANSACTIONS CONFIRMATION AGREEMENTS: The Parties agree that the amounts recoverable under this Section 21.3 are a reasonable estimate of loss and not a penalty, and represent the sole and exclusive remedy for the Performing Party. Such amounts are payable for the loss of bargain and the loss of protection against future risks. Each Party agrees that it has a duty to mitigate damages in a commercially reasonable manner to minimize any damages it may incur as a result of the other Party's performance or non-performance of this Agreement. In the event the Non-Performing Party disputes the calculation of the damages under this Section 21.3, the Non-Performing Party shall pay the full amount of the damages as required by Section 9 of this Agreement to the Performing Party. After informal dispute resolution as required by Section 34.1, any remaining dispute involving the calculation of the damages shall be referred to binding dispute resolution as provided by Section 34.2 of' this Agreement. If resolution or agreement results in refunds or the need for refunds to the Non-Performing Party, such refunds shall be calculated in accordance with Section 9.4 of this Agreement. UNDER THIS AGREEMENT AND 22.1 EVENTS OF DEFAULT An "Event of Default" shall mean with respect to a Party ("Defaulting Party"): Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 35 Superseding Original Sheet No. 35 (a) (b) (c) (d) the failure by the Defaulting Party to make, when due, any payment required pursuant to this Agreement or Confirmation Agreement if such failure is not remedied within two (2) Business Days after written notice of such failure is given to the Defaulting Party by the other Party ("the Non-Defaulting Party"). The Non-Defaulting Party shall provide the notice by facsimile to the designated contact person for the Defaulting Party and also shall send the notice by overnight delivery to such contact person; or the failure by the Defaulting Party to provide clear and good title as required by Section 33.3, or to have made accurate representations and warranties as required by Section 37 and such failure is not cured within five (5) Business Days after written notice thereof to the Defaulting Party; or The institution, with respect to the Defaulting Party, by the Defaulting Party or by another person or entity of a bankruptcy, reorganization, moratorium, liquidation or similar insolvency proceeding or other relief under any bankruptcy or insolvency law affecting creditor's rights or a petition is presented or instituted for its winding-up or liquidation; or Th.e failure by the Defaulting Party to provide adequate assurances of its ability to perform all of its outstanding material obligations to the Non- Defaulting Party under the Agreement or Confirmation Agreement Issued by: Michael E. Small, General Counsel to Effective: February 1, 2001 Western Systems Power Pool Issued on: December 1, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 36 Superseding First Revised Sheet No. 36 pursuant to Section 27 of this Agreement or any substitute or modified provision in the Confirmation Agreement. (e) With respect to its Guarantor, if any: (i) if a material representation or warranty made by a Guarantor in connection with this Agreement, or any transaction entered into hereunder, is false or misleading in any material respect when made or when deemed made or repeated; or (ii) the failure of a Guarantor to make any payment required or to perform any other material covenant or obligation in any guarantee made in connection with this Agreement, including any transaction entered into hereunder, and such failure shall not be remedied within three (3) Business Days after written notice; or .(iii) the institution, with respect to the Guarantor, by the Guarantor or by another person or entity of a bankruptcy, reorganization, moratorium, liquidation or similar insolvency proceeding or other relief under any bankruptcy or insolvency law affecting creditor's rights or a petition is presented or instituted for its winding-up or liquidation; or (iv) the failure, without written consent of the other Party, of a Guarantor's guarantee to be in full force and effect for purposes of this Agreement (other than in accordance with its terms) prior to Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 36A Superseding First Revised Sheet No. 36A 22.2 the satisfaction of all obligations of such Party under each transaction to which such guarantee shall relate; or (v) a Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of, any guarantee. REMEDIES FOR EVENTS OF DEFAULT If an Event of Default occurs, the Non-Defaulting Party shall possess the right to terminate all transactions between the Parties under this Agreement upon written notice (by facsimile or other reasonable means) to the Defaulting Party, such notice of termination to be effective immediately upon receipt. If the Non- Defaulting Party fails to exercise this right of termination within thirty (30) days following the time when the Event of Default becomes known (or more than thirty days if the Non-Defaulting and Defaulting Parties agree to an extension), then such right of termination shall no longer be available to the Non-Defaulting Party as a remedy for the Event(s) of Default; provided, however, this thirty day requirement for exercising termination rights shall not apply to defaults pursuant to Sections 22.1(c) and 22.1(e)(iii). The Non-Defaulting Party terminating transaction(s) under this Section 22.2 may do so without making a filing at FERC. Upon termination, the Non-Defaulting Party shall liquidate all transactions as soon as practicable, provided that in no event will the Non-Defaulting Party be allowed to liquidate Service Schedule A transactions. The payment associated with termination ("Termination Payment") shall be calculated in accordance with Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 36B Superseding Original Sheet No. 36B this Section 22.2 and Section 22.3. The Termination Payment shall be the sole and exclusive remedy for the Non-Defaulting Party for each terminated transaction ("Terminated Transaction") for the time period beginning at the time notice of termination under this Section 22 is received. Prior to receipt Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 37 of such notice of termination by the Defaulting Party, the Non-Defaulting Party may exercise any remedies available to it under Section 21.3 of this Agreement or Confirmation Agreement(s), and any other remedies available to it at law or otherwise. Upon termination, the Non-Defaulting Party may withhold any payments it owes the Defaulting Party for any obligations incurred prior to termination under this Agreement or Confirmation Agreement(s) until the Defaulting Party pays the Termination Payment to the Non-Defaulting Party. The Non-Defaulting Party shall possess the right to set-off the amount due it under this Section 22 by any such payments due the Defaulting Party as provided in Section 22.3(d). 22.3 LIQUIDATION CALCULATION OPTIONS The Non-Defaulting Party shall calculate the Termination Payment as follows: (a) The Gains and Losses shall be determined by comparing the value of the remaining term, transaction quantities, and transaction prices under each Terminated Transaction had it not been terminated to the equivalent quantities and relevant market prices for the remaining term either quoted by a bona fide third-party offer or which are reasonably expected to be available in the market under a replacement contract for each Terminated Transaction. To ascertain the market prices of a replacement contract, the Non-Defaulting Party may consider, among other valuations, quotations Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 38 Superseding Original Sheet No. 38 (b) (c) from Dealers in energy contracts, any or all of the settlement prices of the NYMEX power futures contracts (or NYMEX power options contracts in the case of Physically-Settled Options) and other bona fide third party offers, all adjusted for the length of the remaining term and differences in transmission. It is expressly agreed that the Non-Defaulting Party shall not be required to enter into replacement transactions in order to determine the Termination Payment. The Gains and Losses calculated under paragraph (a) shall be discounted to present value using the Present Value Rate as of the time of termination (to take account to the period between the time notice of termination was effective and when such amount would have otherwise been due pursuant to the relevant transaction). The "Present Value Rate" shall mean the sum of 0.50% plus the yield reported on page "USD" of the Bloomberg Financial Markets Services Screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in United States government securities) at 11:00 a.m. (New York City, New York time) for the United States government securities having a maturity that matches the average remaining term of the Terminated Transactions; and The Non-Defaulting Party shall set off or aggregate, as appropriate, the Gains and Losses (as calculated in Section 22.3(a)) and Costs and notify Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 39 Superseding Original Sheet No. 39 (d) (e) the Defaulting Party. If the Non-Defaulting Party's aggregate Losses and Costs exceed its aggregate Gains, the Defaulting Party shall, within three (3) Business Days of receipt of such notice, pay the Termination Payment to the Non-Defaulting Party, which amount shall bear interest at the Present Value rate from the time notice of termination was received until paid. If the Non-Defaulting Party's aggregate Gains exceed its aggregate Losses and Costs, the Non-Defaulting Party, after any set-off as provided in paragraph (d), shall pay the remaining amount to the Defaulting Party within three (3) Business Days of the date notice of termination was received including interest at the Present Value from the time notice of termination was received until the Defaulting Party receives payment. The Non-Defaulting Party shall aggregate or set off, as appropriate, at its election, any or all other amounts owing between the Parties (discounted at the Present Value Rate) under this Agreement and any Confirmation Agreements against the Termination Payment so that all such amounts are aggregated and/or netted to a single liquidated amount. The net amount due from any such liquidation shall be paid within three (3) Business Days following the date notice of termination is received. (i) If the Non-Defaulting Party owes the Defaulting Party monies under this Section 22.3, then notwithstanding the three Business Day payment requirement detailed above, the Non-Defaulting Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 39A Superseding Original Sheet No. 39A Party may elect to pay the Defaulting Party the monies owed under this Section 22.3 over the remaining life of the contract(s) being terminated. The Non-Defaulting Party may make this election by providing written notice to the Defaulting Party within three Business Days of the notice being provided to terminate and liquidate under this Section 22.3. The Non-Defaulting Party shall provide the Defaulting Party with the details on the method for recovering the monies owed over the remaining life of the contract(s). That method shall ensure that the Defaulting Party receives a payment each month through the end of the term of each contract which allows it to receive the monies which would have been due it under Sections 22.3(c) and (d) in total (to be recovered over the term of the contract(s) to replicate as closely as possible the payment streams under such contract(s)) provided that the discounting using the Present Value Rate referenced in Section 22.3 (b) shall not be reflected in determining the amounts to be recovered under this provision. Any disputes as to the methodology shall be resolved pursuant to the dispute resolution procedures in Section 34, with binding arbitration pursuant to Section 34.2 required for disputes as to the methodology if mediation is unsuccessful. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 39B Superseding Original Sheet No. 39B (ii) This Section 22.3(e) and the rights and obligations under it shall survive termination of any applicable transactions or agreements. (iii) The Party owed monies under this Section 22.3(e) shall have the right to request credit assurances consistent with Section 27 even after termination of any contract or transaction. (iv) If the Party owing money defaults on its payment obligations consistent'with Section 22. l(a) or defaults with regard to providing credit assurances consistent with Section 22.1(d), then the other Party shall have the right (by written notice) at any time after the Party owing money defaults to require that Party to pay all monies owed under all of the contracts subject to this Section 22.3(e) within three Business Days of receipt of the written notice. The monies to be paid under this accelerated payment provision shall be the remaining amounts to be paid under the contract(s) reflecting a discount using the Present Value Rate from the date of the written notice. If the Defaulting Party disagrees with the calculation of the Termination Payment and the Parties cannot otherwise resolve their differences, the calculation issue shall be submitted to informal dispute resolution as provided in Section 34.1 Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 40 Superseding Original Sheet No. 40 of this Agreement and thereafter binding dispute resolution pursuant to Section 34.2 if the informal dispute resolution does not succeed in resolving the dispute. Pending resolution of the dispute, the Defaulting Party shall pay the full amount of the Termination Payment calculated by the Non-Defaulting Party within three (3) Business Days of receipt of notice as set forth in Sections 22.3(c) and (d) subject to the Non-Defaulting Party refunding, with interest, pursuant to Section 9.4, any amounts determined to have been overpaid. For purposes of this Section 22.3: (i) "Gains" means the economic benefit (exclusive of Costs), if any, resulting from the termination of the Terminated Transactions, determined in a commercially reasonable manner as calculated in accordance with this Section 22.3; (ii) "Losses" means the economic loss (exclusive of Costs), if any, resulting from the termination of the Terminated Transactions, determined in a commercially reasonable manner as calculated in accordance with this Section 22.3; (iii) "Costs" means brokerage fees, commissions and other similar transaction costs and expenses reasonably incurred in terminating any specifically related arrangements which replace a Terminated Transaction, transmission and ancillary service costs associated with Terminated Transactions, and reasonable attorneys' fees, if any, incurred in connection Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 41 22A. with the Non-Defaulting Party enforcing its rights with regard to the Terminated Transactions. The Non-Defaulting Party shall use reasonable efforts to mitigate or eliminate these Costs. (iv) In no event, however, shall a Party's Gains, Losses or Costs include any penalties or similar charges imposed by the Non-Defaulting Party. DEFAULT IN PAYMENT OF WSPP OPERATING COSTS: 22A. 1 A Party shall be deemed to be in default in payment of its share of WSPP operating costs pursuant to Section 7 of this Agreement, if any, when payment is not received within ten (10) days after receipt of written notice. A default by any Party in such payment obligations shall be cured by payment of all overdue amounts together with interest accrued at the rate of one percent (1%) per month, or the maximum interest rate permitted by law, if any, whichever is less, prorated by days from the due date to the date the payment curing the default is made unless and until the Executive Committee shall determine another rate. 22A.2 A defaulting Party, which is in default under Section 22.A1, shall be liable for all costs, including costs of collection and reasonable attorney fees, plus interest as provided in Section 22.A1 hereof. 22A.3 The rights under this Agreement of a Party which is in default of its obligation to pay operating costs under this Agreement for a period of three (3) months or more may be revoked by a vote of the non-defaulting Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 42 Parties' representatives on the Executive Committee consistent with Section 8.3. The defaulting Party's rights shall not be revoked, however, unless said Party has received at least thirty (30) days written notice of the non-defaulting Parties' intent to revoke such rights. Said notice shall state the date on which the revocation of rights shall become effective if the default is not cured and shall state all actions which must be taken or amounts which must be paid to cure the default. This provision allowing the non-defaulting Parties to revoke such rights is in addition to any other remedies provided in this Agreement or at law and shall in no way limit the non-defaulting Parties' ability to seek judicial enforcement of the defaulting Party's obligations to pay its share of the operating costs under this Agreement. Upon the effective date of such revocation of rights, the defaulting party shall not be allowed to enter into any new transactions under this Agreement. The defaulting party under the Agreement or any Confirmation Agreements shall be required to carry out all obligations that existed prior to the effective date of such revocation. If a defaulting Party's rights under this Agreement have been revoked, the Executive Committee may restore that Party's rights upon the defaulting Party paying all amounts due and owing under this Agreement. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 42A 22A.4 Upon revocation of the rights of a defaulting Party under this Agreement, costs of the WSPP hereunder shall be equally shared among the Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 43 Superseding Original Sheet No. 43 23. 24.¸ 25. remaining Parties. Cost allocation adjustments shall be retroactive to the date of the default. OTHER AGREEMENTS: No provision of this Agreement shall preclude any Party from entering into other agreements or conducting transactions under existing agreements with other Parties or third parties. This Agreement shall not be deemed to modify or change any rights or obligations under any prior contracts or agreements between or among any of the Parties. GOVERNING LAW: This Agreement and any Confirmation Agreement shall be governed by and construed in accordance with the laws of the State of Utah, without regard to the conflicts of laws rules thereof. The foregoing notwithstanding, (1) if both the Seller and Purchaser are organized under the laws of Canada, then the laws of the province of the Seller shall govern, or (2) if the Seller or Purchaser is an agency of or part of the United States Government, then the laws of the United States of America shall govern. JUDGMENTS AND DETERMINATIONS: Whenever it is provided in this Agreement that a Party shall be the sole judge of whether, to what extent, or under what conditions it will provide a given service, its exercise of its judgment shall be final and not subject to challenge. Whenever it is provided that (i) a service under a given transaction may be curtailed under certain conditions or circumstances, the existence of which are determined by or in the judgment of a Party, or (ii) the existence of qualifications for membership shall be determined by Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 44 Superseding Original Sheet No. 44 26. 27. the Executive Committee pursuant to Section 16, that Party's or the Executive Committee's determination or exercise of judgment shall be final and not subject to challenge if it is made in good faith and not made arbitrarily or capriciously. COMPLETE AGREEMENT: This Agreement and any subsequent amendments, including the Service Schedules and Exhibits incorporated herein, and any Confirmation Agreement, shall constitute the full and complete agreement of the Parties with respect to the subject matter hereof, and all prior or contemporaneous representations, statements, negotiations, understandings and inducements are fully merged and incorporated in this Agreement. CREDITWORTHINESS: Should a Party's creditworthiness, financial responsibility, or performance viability become unsatisfactory to the other Party in such other Party's reasonably exercised discretion with regard to any transaction pursuant to this Agreement or any Confirmation Agreement, the dissatisfied Party (the "First Party") may require the other Party (the "Second Party") to provide, at the Second Party's option (but subject to the First Party's acceptance based upon reasonably exercised discretion), either (1) the posting of a Letter of Credit, (2) a cash prepayment, (3) the posting of other acceptable collateral or security by the Second Party, (4) a Guarantee Agreement executed by a creditworthy entity; or (5) some other mutually agreeable method of satisfying the First Party. The Second Party's obligations under this Section 27 shall be limited to a reasonable estimate of the damages to the First Party Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on' August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 45 Superseding Original Sheet No. 45 (consistent with Section 22.3 of this Agreement) if the Second Party were to fail to perform its obligations. Events which may trigger the First Party questioning the Second Party's creditworthiness, financial responsibility, or performance viability include, but are not limited to, the following: (1) The First Party has knowledge that the Second Party (or its Guarantor if applicable) are failing to perform or defaulting under other contracts. (2) The Second Party has exceeded any credit or trading limit set out in the Confirmation Agreement or other agreement between the Parties. (3) The Second Party or its Guarantor has debt which is rated as investment grade and that debt falls below the investment grade rating by at least one rating agency or is below investment grade and the rating of that debt is downgraded further by at least one rating agency. (4) Other material adverse changes in the Second Party's financial condition occur. (5) Substantial changes in market prices which materially and adversely impact the Second Party's ability to perform under this Agreement or any Confirmation Agreement occur. If the Second Party fails to provide such reasonably satisfactory assurances of its ability to perform a transaction hereunder within three (3) Business Days of demand therefore, that will be considered an Event of Default under Section 22 of this Agreement and the First Party shall have the right to exercise any of the remedies provided for under Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: August 1, 2003 Effective: October 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 46 Superseding Original Sheet No. 46 28. that Section 22. Nothing contained in this Section 27 shall affect any credit agreement or arrangement, if any, between the Parties. NETTING: 28.1 If the Purchaser and the Seller are each required to pay an amount to each other in the same calendar month for transactions under this Agreement, then such amounts with respect to each Party may be aggregated and the Parties may discharge their obligations to pay through netting of the respective amounts due, in which case the Party, if any, owing the greater aggregate amount may pay to the other Party the difference between the amounts owed. Each Party reserves to itself all rights, set-offs, counterclaims, and other remedies and defenses (to the extent not expressly herein waived or denied) which such Party has or may be entitled to arising from or out of this Agreement and any applicable Confirmation Agreements. 28.2 Parties shall net payments (associated with transactions under this Agreement and Confirmation Agreement) in accordance with Exhibit A, if such Parties have executed the form attached as Exhibit A. The Parties obligation to net shall include the netting of all payments received by the Parties in the same calendar month. Parties that have executed Exhibit A shall provide a signed copy of Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 47 Superseding Original Sheet No. 47 28.3 Exhibit A to a representative of the WSPP and to any Party that requests a copy and indicate on the WSPP Homepage that they have so executed Exhibit A (once the WSPP Homepage possesses the necessary capability). If a Party indicated its election to net payments on the WSPP Homepage and that Party desires to withdraw its agreement to net, that Party shall provide at least 30 days notice on the WSPP Homepage of the change in its election to net and also shall provide, concurrent with its withdrawal notice, written notice to all Parties with which it has ongoing transactions or with which it has committed to future transactions under the Agreement at the time of the notice. Any such changes in netting status shall apply beginning at least 30 days after notice required by this Section 28.2 is provided and only shall apply to transactions agreed to beginning on or after the date the change in netting status becomes effective. The Parties may by separate agreement either through a Confirmation Agreement or some other agreement set out specific terms relating to the implementation of the netting in addition to or in lieu of Exhibit A. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 47A 29. TAXES: The Contract Price for all transactions under the Service Schedules shall include full reimbursement for, and the Seller is liable for and shall pay, or cause to be paid, or reimburse the Purchaser for if the Purchaser has paid, all taxes applicable to a transaction that arise prior to the delivery point. If the Purchaser is required to remit such tax, the amount shall be deducted from any sums due to the Seller. The Seller shall indemnify, Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 48 Superseding Original Sheet No. 48 defend, and hold harmless the Purchaser from any claims for such taxes. The Contract Price does not include reimbursement for, and the Purchaser is liable for and shall pay, cause to be paid, or reimburse the Seller for if the Seller has paid, all taxes applicable to a transaction arising at and from the delivery point, including any taxes imposed or collected by a taxing authority with jurisdiction over the Purchaser. The Purchaser shall indemnify, defend, and hold harmless the Seller from any claims for such taxes. Either Party, upon written request of the other Party, shall provide a certificate of exemption or other reasonably satisfactory evidence of exemption if either Party is exempt from taxes, and shall use reasonable efforts to obtain and cooperate with the other Party in obtaining any exemption from or reduction of any tax. Taxes are any amounts imposed by a taxing authority associated with the transaction. 30. CONFIDENTIALITY: 30.1 The terms of any transaction under this Agreement or any other information exchanged by the Purchaser and Seller relating to the transaction shall not be disclosed to any person not employed or retained by the Purchaser or the Seller or their affiliates, except to the extent disclosure is (1) required by law, (2) reasonably deemed by the disclosing Party to be required to be disclosed in connection with a dispute between or among the Parties, or the defense of any litigation or dispute, (3) otherwise permitted by consent of the other Party, which consent shall not be unreasonably withheld, (4) required to be Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: November 19, 2003 Effective: February 1, 2004 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 48A made in connection with regulatory proceedings (including proceedings relating to FERC, the United States Securities and Exchange Commission or any other Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on' November 19, 2003 Effective: February 1, 2004 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 49 Superseding Original Sheet No. 49 federal, state or provincial regulatory agency); (5) required to comply with North American Electric Reliability Organization, regional reliability council, or successor organization requirements; (6) necessary to obtain transmission service; or (7) to a developer of an index of electric power prices in accordance with Section 30.2. In the event disclosure is made pursuant to this provision, the Parties shall use reasonable efforts to minimize the scope of any disclosure and have the recipients maintain the confidentiality of any documents or confidential information covered by this provision, including, if appropriate, seeking a protective order or similar mechanism in connection with any disclosure. This provision shall not apply to any information that was or is hereafter in the public domain (except as a result of a breach of this provision). 30.2 A Party may disclose the terms of transactions under this Agreement, excluding the identities of parties, to any developer of any index of electric power prices without violation of the confidentiality obligations under Section 30.1 if: (1) the disclosing Party and the index developer have entered into a written agreement, prior to the disclosure, under which the developer has agreed to use the information solely for the development of an index of electric power prices for publication and not for any other purpose; and (2) the index with respect to which disclosure is made is an aggregation of terms of transactions and does not identify terms of single transactions or the identities of parties to transactions. Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: November 19, 2003 Effective: February 1, 2004 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 49A 31. 32. TRANSMISSION TARIFF: Pursuant to FERC Order No. 888, issued on April 24, 1996, and FERC orders where applicable, the WSPP Default Transmission Tariff has been filed and has become effective. The Parties agree to be bound by the terms of that Tariff for so long as they are Western Systems Power Pool members. TRANSACTION SPECIFIC TERMS AND ORAL AGREEMENTS: 32.1 The Parties' agreement to transaction specific terms which constitute the Confirmation Agreement shall be made by one of the following methods: (1) provision of pertinent information through written Confirmation Agreements (see Exhibit C for a sample); or (2) oral conversation, provided that such oral conversation is recorded electronically. By mutual agreement and consistent with and pursuant to the provisions of this Section 32, the Parties to a transaction under Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: November 19, 2003 Effective: February 1, 2004 Western Systems Power Pool Rate Schedule FERC No. 6 Third Revised Sheet No. 50 Superseding Second Revised Sheet No. 50 this Agreement may agree to modify any term of this Agreement which applies to such transaction (but not to provisions regarding the operation of the WSPP as an organization including Sections 7 and 8), such agreement to be reflected in a Confirmation Agreement. Written transactions of one week or more. confirmation shall be required for all Upon request of the Purchaser or at the election of the Seller, the Seller shall provide written confirmation which must be received by the Purchaser within five Business Days of the date of the agreement or request. The Purchaser shall have five Business Days from date of receipt to respond to the confirmation. If the Purchaser does not respond within that time period, the Seller's written confirmation shall be considered as accepted and final except as provided in Section 32.5. If the Seller fails to provide any required written confirmation within five Business Days, as described above, then the Purchaser may submit a written confirmation to the Seller. The Purchaser shall submit such written confirmation within five Business Days after the deadline for submitting a written confirmation applicable to the Seller as set forth above has expired. If the Seller fails to respond to Purchaser's confirmation within five Business Days, then the Purchaser's written confirmation shall be considered as accepted and final except as provided in Section 32.5. Notwithstanding the foregoing, any failure of the Seller or the Purchaser to provide written confirmation of the transaction shall not invalidate any oral agreement of the Parties except for oral agreements prohibited by Section 32.5. Nor shall any oral agreement of the Parties be considered invalidated Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 50A Superseding First Revised Sheet No. 50A before and during the time period the confirmation process is ongoing and no final Confirmation Agreement under these procedures or through mutual agreement has been reached. For transactions of less than one week in duration (as agreed in an electronically recorded conversation) and that commence within one week of that conversation, a written confirmation will have no effect unless it is signed by both parties. The foregoing sentence does not apply to Non-Standard Confirmation Provisions of such a transaction (to which Section 32.5 applies). Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: November 19, 2003 Effective: February 1, 2004 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 51 32.2 32.3 The Parties agree not to contest, or assert any defense with respect to, the validity or enforceability of any agreement to the terms concerning a specific transaction(s), on the basis that documentation of such terms fails to comply with the requirements of any statute that agreements be written or signed. Each Party consents to the recording by the other Party, without any further notice, of telephone conversations between representatives of the Parties, which contain agreements to or discussion concerning the terms of a specific transaction(s). All such recordings may be introduced and admitted into evidence for the purpose of proving agreements to terms, and any objection to such introduction or admission for such purpose is hereby expressly waived. The terms documented hereunder, whether stated in a written document or a recording, are intended by the Parties as a final expression of their agreement with respect to such terms as are included therein and may not be contradicted by evidence of any prior agreement, but may be supplemented by course of dealing, performance, usage of trade and evidence of consistent additional mutually agreed-upon terms. For individual transactions under the Service Schedules, the Agreement as it may be modified or supplemented by a Confirmation Agreement shall bind the Parties and govern the transactions; provided, however, if the Parties to a transaction do not reach agreement on such modification or change to a term of the Agreement, or the Confirmation Agreement is not considered accepted and final pursuant to Section 32.1, then the term or terms of the Agreement, which the Parties could not Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 52 Superseding First Revised Sheet No. 52 reach agreement to modify or change or which are not considered modified pursuant to Section 32.1, shall apply to that transaction. In the event of a conflict between a binding and effective Confirmation Agreement and this Agreement, the Confirmation Agreement shall govern. 32.4 The Seller shall not be required to file written confirmations with FERC except as provided in the Service Schedules. 32.5 When a Confirmation Agreement contains Non-Standard Confirmation Provisions which are provisions other than those set forth in paragraphs (a) - (1) of Exhibit C, those Non-Standard Confirmation Provisions shall not be deemed to be accepted pursuant to Section 32.1 unless agreed to: (i) orally, with that oral agreement recorded (provided that such oral agreement option only shall be available for transactions of less than one week); or (ii) in a writing executed by both Parties. 32.6 Other Products and Service Levels: The Parties may agree to use a product/service level defined by a different agreement (e.g., the California ISO tariff, the ERCOT agreement or the EEl agreement) for a particular transaction under this Agreement. Unless the Parties expressly state and agree that all the terms and conditions of such other agreement will apply to any such transaction, the transaction shall be subject to all the terms of this Agreement, except that (1) all service level/product definitions, (2) force majeure/uncontrollable force definitions, and (3) other terms as mutually agreed shall have the meaning Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: July 2, 2002 Effective: September 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 52A ascribed to them in the different agreement or in the applicable confirmation notice or agreement. 32.7 Written confirmation pursuant to this Section 32 may be provided in electronic format so long as the Parties to the affected transaction or transactions have agreed on the procedures and format for doing so. 33. PERFORMANCE, TITLE, AND WARRANTIES FOR TRANSACTIONS UNDER SERVICE SCHEDULES: 33.1 Performance 33.1.1 The Seller shall deliver to the delivery point(s) as agreed to in the applicable Confirmation Agreement and sell to the Purchaser in accordance with the terms of the Agreement and such Confirmation Agreement. 33.1.2 The Purchaser shall receive and purchase the Contract Quantity, as agreed to by the Parties in the applicable Confirmation Agreement, at the delivery point(s) and purchase from the Seller in accordance with the terms of the Agreement and such Confirmation Agreement. 33.2 Title and Risk of Loss Title to and risk of loss of the electric energy shall pass from the Seller to the Purchaser at the delivery point agreed to in the Confirmation Agreement; provided, however, with regard to federal agencies or parts of the United States Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 53 Government, title to and risk of loss shall pass to Purchaser to the extent permitted by and consistent with applicable law. 33.3 Warranties The Seller warrants that it will transfer to the Purchaser good title to the electric energy sold under the Agreement and any Confirmation Agreement, free and clear of all liens, claims, and encumbrances arising or attaching prior to the delivery point and that Seller's sale is in compliance with all applicable laws and regulations. THE SELLER HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 34. DISPUTE RESOLUTION: 34.1 INFORMAL DISPUTE RESOLUTION Before binding dispute resolution or any other form of litigation may proceed, any dispute between the Parties to a transaction under this Agreement first shall be referred to nonbinding mediation. The Parties shall attempt to agree upon a mediator from a list of ten (10) candidates provided by the Chairman of the WSPP Operating Committee or his or her designee. If the Parties are unable to agree, then the Chairman or the designee shall appoint a mediator for the dispute. Neither the mediator nor the person involved on behalf of the WSPP in developing a list of mediators for the Parties to choose from or in selecting the Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 54 mediator (if the Parties are unable to do so) shall possess a direct or indirect interest in either Party or the subject matter of the mediation. The WSPP shall establish procedures for the appointment of mediators and the conduct of mediation and those procedures shall apply to the mediation. 34.2 BINDING DISPUTE RESOLUTION The Parties to a dispute may elect binding dispute resolution using the following process unless binding arbitration of certain disputes is required under this Agreement in which event the Parties shall use the process set forth in this Section 34.2 to resolve such disputes, unless the Parties otherwise agree: (a) WSPP Dispute Resolution: A Party to a dispute (if binding dispute resolution is required) or all Parties to a dispute (if agreement of the Parties is required for binding dispute resolution) may initiate binding dispute resolution under WSPP procedures by notifying the Chairman of the WSPP Operating Committee or his or her designee. The Chairman or his or her designee shall provide the Parties with a list often (10) eligible arbitrators. Within ten (10) days of receiving the list, the Parties shall agree on a single arbitrator from the list to conduct the arbitration, or notify the Chairman of the Operating Committee or the designee of their inability to reach agreement. If notified of the Parties inability to reach agreement, then the Chairman or the designee shall choose the arbitrator from the list within five (5) days. Neither the arbitrator nor the person Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 55 involved on behalf of the WSPP in developing a list of arbitrators for the Parties to choose from or in selecting the arbitrator (if the Parties are unable to do so) shall possess a direct or indirect interest in either Party or the subject matter of the arbitration. The Procedures to be used for this arbitration shall follow the arbitration procedures which shall be developed and maintained by the WSPP and the procedures will be generally consistent with the commercial arbitration rules of the American Arbitration Association though not involving the Association. If the Parties agree to binding dispute resolution under this Section 34.2, each Party understands that it will not be able to bring a lawsuit concerning any dispute that may arise which is covered by this arbitration provision. Notwithstanding the foregoing, nothing herein is intended to waive any provision of the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or any right under state statute or common law to challenge an arbitration award or to prevent any action · to enforce any arbitration award. A Party's liability and damages under any arbitration award resulting from the process set forth in this Section 34.2 shall be limited as provided in this Agreement or in any Confirmation Agreement. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 56 34.3 COSTS Each Party shall be responsible for its own costs and those of its counsel and representatives. The Parties shall equally divide the costs of the arbitrator or mediator and the hearing. 34.4 CONFIDENTIALITY Any arbitration or mediation under this Section 34 shall be conducted on a confidential basis and not disclosed, including any documents or results which shall be considered confidential, unless the Parties otherwise agree or such disclosure is required by law. 35. FORWARD CONTRACTS: The Parties acknowledge and agree that all transactions under the Agreement and Confirmation Agreement(s) are forward contracts and that the Parties are forward contract merchants, as those terms are used in the United States Bankruptcy Code. The Parties acknowledge and agree that all of their transactions, together with this Agreement and the related Confirmation Agreement(s) form a single, integrated agreement, and agreements and transactions are entered into in reliance on the fact that the agreements and each transaction form a single agreement between the Parties. 36. TRADE OPTION EXCEPTION The Parties intend that any Physically Settled Option under this Agreement shall qualify under the trade option exception, 17 C.F.R. § 32.4. Accordingly, each Party buying or selling a Physically Settled Option agrees and warrants that any such option Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 57 shall be offered only to a provider, user, or merchant and that the entities entering into the options are doing so solely for purposes related to their business. 37. ADDITIONAL REPRESENTATIONS AND WARRANTIES: Each Party warrants and represents to the other(s) that it possesses the necessary corporate, governmental and legal authority, right and power to enter into and agree to the applicable Confirmation Agreement for a transaction or transactions and to perform each and every duty imposed, and that the Parties' agreement to buy and sell power under this Agreement and the Confirmation Agreement represents a contract. Each Party also warrants and represents to the other(s) that each of its representatives executing or agreeing through a Confirmation Agreement to a transaction under this Agreement is authorized to act on its behalf. Each Party further warrants and represents that entering into and performing this Agreement and any applicable Confirmation Agreement does not violate or conflict with its Charter, By-laws or comparable constituent document, any law applicable to it, any order or judgment of any court or other agency of government applicable to it or any agreement to which it is a party and that this Agreement and applicable Confirmation Agreement(s), constitute a legal, valid and binding obligation enforceable against such Party in accordance with the terms of such agreements. Each Party also represents that it is solvent and that on each delivery this representation shall be deemed renewed unless notice to the contrary is given in writing by the Purchaser to the Seller before delivery. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory (2ommission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 58 Superseding Original Sheet No. 58 38. FLOATING PRICES: 38.1 In the event the Parties intend that the price for a transaction is to be based on an index, exchange or any other kind of variable reference price (such price being a "Floating Price"), the Parties shall specify the "Floating Price" to be used to calculate the amounts in a Confirmation Agreement due Seller for that transaction. 38.2 Market Disruption. If a Market Disruption Event has occurred and is continuing during the Determination Period, the Floating Price for the affected Trading Day shall be determined as follows. The Parties shall negotiate in good faith to agree on a Floating Price (or a method for determining a Floating Price) for the affected Trading Day. If the Parties have not so agreed on or before the twelfth Business Day following the first Trading Day on which the Market Disruption Event occurred or existed, then the Floating Price shall be determined in good faith by the Parties based upon (1) quotes from Dealers in energy contracts; and/or (2) quotes from Brokers in energy contracts. Each Party may obtain up to a maximum of four quotes which must be provided to the other Party no later than twenty-two Business Days following the first Business Day on which the Market Disruption Event occurred or existed. These quotes shall reflect transacted prices. The Floating Price for the affected Trading Day shall equal a simple average of the quotes obtained and provided by the Parties consistent with the provisions of this Section 38. Each Party providing quote(s) to the other Party also shall Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 58A 38.3 identify to that other Party the Dealer(s) and/or the Broker(s) who provided each of the quotes to allow verification. "Determination Period" means each calendar month during the term of the relevant transaction; provided that if the term of the transaction is less than one calendar month the Determination Period shall be the term of the transaction. "Market Disruption Event" means, with respect to an index, any of the following events (the existence of which shall be determined in good faith by the Parties): (a) the failure of the index to announce or publish information necessary for determining the Floating Price; (b) the failure of trading to commence or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the exchange or market acting as the index; (c) the temporary or permanent discontinuance or unavailability of the index; (d) the temporary or permanent closing of any exchange acting as the index; or (e) a material change in the formula for or the method of determining the Floating Price. "Trading Day" means a day in respect of which the relevant price source published the relevant price or would have published the relevant price but for the Market Disruption Event. Calculation of Floating Price. For the purposes of the calculation of a Floating Price, all numbers shall be rounded to three (3) decimal places. If the fourth (4th) decimal number is five (5) or greater, then the third (3rd) decimal number shall be Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 58B Superseding Original Sheet No. 58B increased by one (1), and if the fourth (4th) decimal number is less than five (5), then the third (3rd) decimal number shall remain unchanged. 38.4 Corrections. For the purposes of determining the relevant prices for any day, if the price published or announced on a given day and used or to be used to determine the relevant price is subsequently corrected and the correction is published or announced by the person responsible for that publication or announcement, either Party may notify the other Party of (i) that correction and (ii) the amount (if any) that is payable as a result of that correction. If a Party gives notice that an amount is so payable, the Party that originally either received or retained such amount will pay such amount consistent with the provisions of this Section 38.4. The amount that is payable as a result of the correction shall be included in the billing cycle in which the notice of the correction is provided. 39. AMENDMENT: 39.1 This Agreement may be amended upon the submission to FERC and acceptance by FERC of that amendment. The Parties through the Executive Committee shall direct the filing of any amendments. The Parties to this Agreement agree to bound by this Agreement as it may be amended, provided that the Parties possess the right to challenge any amendments at FERC and to exercise any applicable withdrawal rights under this Agreement. 39.2 Unless otherwise stated in the amendment, all amendments shall apply only to new transactions entered into or agreed to on or after the effective date of the amendment. Preexisting agreements and transactions shall operate under the Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 58C 40. version of the WSPP Agreement effective at the time of the agreement for the transaction unless the Parties to a transaction or transactions mutually agree otherwise. 39.3 An agreement modifying this Agreement or a Confirmation Agreement for a transaction needs no consideration to be binding. EXECUTION BY COUNTERPARTS: This Agreement may be executed in any number of counterparts, and upon execution by all Parties, each executed counterpart shall have the same force and effect as Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 3, 2002 Effective: February 1, 2003 Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 59 Superseding Original Sheet No. 59 41. an original instrument and as if all Parties had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages. WITNESS: IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representative as of the 27th day of July, 1991 (or as of the date of execution of this Agreement by each Party's duly authorized representation, in the case of any Party that becomes a signatOry to this Agreement subsequent to July 27, 1991). By: Name: Title: wspp\WSPP Agreement June 03 Revisions to 2-1-03.doc Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 60 EXHIBIT A NETTING Each Party that executes this Exhibit A to the Agreement agrees to net payments for transactions under WSPP Service Schedule A, B, and C with any other Party or Parties which also have agreed to net payments by executing a copy of this Exhibit A. The Party executing this Exhibit A shall indicate below when it desires that its agreement to net becomes effective. A Party agreeing to net under this Exhibit A shall comply with the provisions of Section 28.2 of the Agreement. Defined terms used herein are as defined in the WSPP Agreement. Netting shall be done in accordance with the following provision: If the Purchaser and Seller are each required to pay an amount on the payment due date in the same month for transactions under the Agreement or Confirmation Agreement, then such amounts with respect to each Party will be aggregated and the Parties will discharge their obligations to pay through netting, in which case the Party owing the greater aggregate amount will pay to the other party the difference between the amounts owed consistent with the payment times in Section 9.2 of the Agreement, unless the Parties have otherwise agreed to a different payment time as allowed by the Agreement. Each Party reserves to itself all rights, set-offs, counterclaims and other remedies and/or defenses to which it is or may be entitled, arising from or out of the Agreement. All outstanding payments between the Parties which are to be netted pursuant to this Exhibit A for transactions under WSPP Service Schedule A, B, and C shall be offset against each other or set off or recouped therefrom. Name of Authorized Representative Effective Date for Netting Name of WSPP Member Signature of Authorized Representative Date of Execution Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 61 [WSPP SAMPLE FORM - PARTIES ARE FREE TO USE THIS OR DISREGARD IT.] EXHIBIT B FORM OF COUNTERPARTY GUARANTEE AGREEMENT This Guarantee Agreement (this "Guarantee"), dated, as of [. ], 199[__], is made and entered into by [ ], a [. ] corporation ("Guarantor"). WITNESSETH: WHEREAS, [ ] (the "Company") may enter into transactions involving power sales under the Western Systems Power Pool ("WSPP Agreement") and related confirmation agreementst (collectively "Agreements") with [Company Name] ("Guaranteed Party"); and WHEREAS, Guarantor will directly or indirectly benefit from the Agreements. NOW THEREFORE, in consideration of the Guaranteed Party agreeing to conduct business with Company, Guarantor hereby covenants and agrees as follows: 1. GUARANTY. Subject to the provisions hereof, Guarantor hereby irrevocably and unconditionally guarantees the timely payment when due of the obligations of Company (the "Obligations") to the Guaranteed Party in accordance with the Agreements. If Company fails to pay any Obligations, Guarantor shall promptly pay to the Guaranteed Party no later than the next Business Day (as defined in the WSPP Agreement), after notification, the amount due in the same currency and manner provided for in the Agreements. This Guarantee shall constitute a guarantee of payment and not of collection. Guarantor shall have no right of subrogation with respect to any payments it makes under this Guarantee until all of the Obligations of Company to the Guaranteed Party are paid in full. The liability of Guarantor under the Guarantee shall be subject to the following: (a) Guarantor's liability hereunder shall be and is specifically limited to payments expressly required to be made in accordance with the Agreements (even if such payments are deemed to be damages) and, except to the extent specifically provided in the Agreements, in no event shall Guarantor be subject hereunder to consequential, exemplary, equitable, loss of profits, punitive, tort, or any other even if such fees together with the payments Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 62 exceed the cap in Section l(b), damages, costs, except that Guarantor shall be required to pay reasonable attorney fees. (b) The aggregate liability of the Guarantor shall not exceed [.~] Million U.S. Dollars [ ]. 2. DEMANDS AND NOTICE. If Company fails or refuses to pay any Obligations, the Guaranteed Party may make a demand upon Guarantor (hereinafter referred to as a "Payment Demand"). A Payment Demand shall be in writing and shall reasonably and briefly specify in what manner and what amount Company has failed to pay and an explanation of why such payment is due, with a specific statement that the Guaranteed Party is calling upon Guarantor to pay under this Guarantee. A Payment Demand satisfying the foregoing requirements shall be deemed sufficient notice to Guarantor that it must pay the Obligations. A single written Payment Demand shall be effective as to any specific default during the continuance of such default, until Company or Guarantor has cured such default, and additional Payment Demands concerning such default shall not be required until such default is cured. o that: REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants (a) it is a corporation duly organized and validly existing under the laws of the State of [. ] and has the corporate power and authority to execute, deliver and carry out the terms and provisions of this Guarantee; (b) no authorization, approval, consent or order of, or registration or filing with, any court or other governmental body having jurisdiction over Guarantor is required on the part of Guarantor for the execution and delivery of this Guarantee; and (c) this Guarantee constitutes a valid and legally binding agreement of Guarantor enforceable against Guarantor in accordance with its terms, except as the enforceability of this Guarantee may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and by general principles of equity. 4. EFFECT OF BANKRUPTCY BY COMPANY. The Guarantor's obligation to pay under this Guarantee shall not be affected in any way by the institution with respect to the Company of a bankruptcy, reorganization, moratorium or similar insolvency proceeding or other relief under any bankruptcy or insolvency law affecting creditor's rights or a petition for the Company's winding-up or liquidation. 5. AMENDMENT. No term or provision of this Guarantee shall be amended, modified, altered, waived, or supplemented except in a writing signed by the Guarantor and Guaranteed Party hereto. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 63 6. WAIVERS. Guarantor hereby waives (a) notice of acceptance of this Guarantee; (b) presentment and demand concerning the liabilities of Guarantor, except as expressly hereinabove set forth; and (c) any right to require that any action or proceeding be brought against Company or any other person, or except as expressly hereinabove set forth, to require that the Guaranteed Party seek enforcement of any performance against Company or any other person, prior to any action against Guarantor under the terms hereof. Except as to applicable statutes of limitation, no delay of the Guaranteed Party in the exercise of, or failure to exercise, any rights hereunder shall operate as a waiver of such rights, a waiver of any other rights or a release of Guarantor from any obligations hereunder. Guarantor consents to the renewal, compromise, extension, acceleration or other changes in the time of payment of or other changes in the terms of the Obligations, or any part thereof or any changes or modifications to the terms of the Agreements. Guarantor may terminate this Guarantee by providing written notice of such termination to the Guaranteed Party and upon the effectiveness of such termination, Guarantor shall have no further liability hereunder, except as provided in the last sentence of this paragraph. No such termination shall be effective until fifteen (15) Business Days after receipt by the Guaranteed Party of such termination notice. No such termination shall affect Guarantor's liability with respect to any obligations arising under any transaction entered into prior to the time the termination is effective, which transaction shall remain guaranteed pursuant to the terms of this Guarantee. 7. ASSIGNMENT. The Guarantor shall not assign this Guarantee without the express written consent of the Guaranteed Party. The Guaranteed Party shall be entitled to assign its rights under this Agreement in its sole discretion. 8. NOTICE. Any Payment Demand, to the Guaranteed Party or the Guarantor notice, request, instruction, correspondence or other document to be given hereunder by any party to another (herein collectively called "Notice") shall be in writing and delivered personally or mailed by certified mail, postage prepaid and return receipt requested, or by telegram or telecopier, as follows: Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 64 To [Name of Guaranteed Party] To Guarantor: Attn: Fax No.: (__) Attn: Fax No.: (__) Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by telegram or telecopier shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All Notices by telegram or telecopier shall be confirmed promptly after transmission in writing by certified mail or personal delivery. Any party may change any address to which Notice is to be given to it by giving notice as provided above of such change of address. 8. MISCELLANEOUS. THIS GUARANTEE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF [State], WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. This Guarantee shall be binding upon Guarantor, its successors and assigns and inure to the benefit of and be enforceable by the Guaranteed Party, its successors and assigns. The Guarantee embodies the entire agreement and understanding between Guarantor and the Guaranteed Party and stipersedes all prior agreements and understandings relating to the subject matter hereof. The headings in this Guarantee are for purposes of reference only, and shall not affect the meaning hereof. This Guarantee may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. EXECUTED as of the day and year first above written. [ .] By: Name: Title: Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Second Revised Sheet No. 65 Superseding First Revised Sheet No. 65 EXHIBIT C SAMPLE FORM FOR CONFIRMATION 1. Transaction Specific Agreements The undersigned Parties agree to sell and purchase electric energy, or a Physically-Settled Option, pursuant to the WSPP Agreement as it is supplemented and modified below: (a) (b) (c) (d) (e) (g) (h) (i) 0) (k) (1) (m) Seller: Purchaser: Period of Delivery: From \ \ To \ \ Schedule (Days and Hours): Delivery Rate: Delivery Point(s): Type of Service (Check as Applicable) Service Schedule A Service Schedule B Service Schedule C Physically-Settled Option Service Schedule B Physically-Settled Option Service Schedule C Other products per Section 32.6 Contract Quantity: Total MWhrs. Contract or Strike Price: Transmission Path for the Transaction (If Applicable): Date of Agreement if different: Additional Information for Physically-Settled Options (i) Option Type: Put Call (ii) Option Style: (iii) Exercise Date or Period: (iv) Premium: (v) Premium Payment Date: (vi) Method for providing notice of exercise Special Terms and Exceptions: See Attachment A [Describe Productl [Special Terms and Exceptions shall be shown on an Attachment to this Confirmation.] Name of Trader for Purchaser Name of Trader for Seller Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 66 Authorized Signature for Purchaser Authorized Signature for Seller Date Date Issued by' Michael E. Small, General Counsel to Effective' July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 67 EXHIBIT D WSPP MEDIATION AND ARBITRATION PROCEDURES Ie MEDIATION mo Informal Mediation. WSPP members with a dispute or a potential dispute involving transactions under the WSPP Agreement may request non-binding, informal mediation by contacting the WSPP's General Counsel and by providing a brief explanation in writing of the dispute and the remedy being sought. All parties to the dispute must request this Informal Mediation for it to become effective. After this contact, a telephonic conference call will be arranged among the affected WSPP members and the WSPP's General Counsel, the Chairman of the Operating Committee, and/or some other independent and knowledgeable person requested by the Chairman of the Operating Committee to participate. The purpose of the conference call will be to discuss the issues and to have an independent person or persons state their views. Best efforts will be made to set up this conference call within five Business Days after the WSPP's General Counsel is contacted subject to accommodating the schedules of all involved. This Informal Mediation shall be considered as satisfying the Mediation requirements of Section 34.1 of the WSPP Agreement. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al_=., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 68 B. Initiating Formal Mediation. A WSPP member which believes that it possesses a claim against another WSPP member relating to a WSPP transaction, which is unable to resolve the dispute through agreement with the other member to the transaction, and which desires to pursue that claim shall initiate non-binding formal mediation pursuant to Section 34.1 of the WSPP Agreement. The member initiating such mediation shall do so by Serving written notice to the Chairman of the WSPP Operating Committee, the WSPP's General Counsel, and the other members against which the claim is directed. Such notice shall state the nature of the dispute, the remedy sought, and support the claim. C. Response to Document Initiating Formal Mediation. Within eight days, the member or members against which the claim is directed may provide a response to the notice which shall be Served on the member which initiated the Mediation, the Chairman of the WSPP's Operating Committee, and the WSPP's General Counsel. D. Choosing the Mediator. The Mediator shall be chosen in accordance with the procedures set forth in Section 34.1 of the WSPP Agreement. Each Party may suggest persons to be included on the list of Mediators to be presented to the Parties provided that these suggested persons shall be provided to the WSPP Representative together with relevant personal histories within two Business Days Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Eo Fo Original Sheet No. 69 of the date by which time the list of Mediators is to be sent out. The WSPP Representative shall allow at least one person suggested by each Party to be added to the list of Mediators. A brief personal history of each person on the list of potential mediators shall be provided to the Parties, with that history showing the person's employment over the last five years and any other relevant facts. The WSPP Representative shall provide the Parties with the list of Mediators within five days of receipt of notice of the dispute. The Parties then shall have five days in which to reach agreement on a Mediator or inform the WSPP Representative that they were unable to reach agreement in which event the WSPP Representative shall appoint the Mediator consistent with Section 34.1 of the WSPP Agreement. Upon request of the Parties for expedition, the WSPP Representative shall use best efforts to expedite this process. Location for the Formal Mediation. The Parties shall agree on a location for the Mediation. If the Parties fail to reach agreement, then the WSPP Representative shall set the location which shall be convenient for the Parties and the Mediator. Time for the Formal Mediation. The Parties shall agree on the time for the Mediation after consultation with the Mediator if one has been appointed. If the Parties fail to reach agreement, then the WSPP Representative shall set the time Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Go Original Sheet No. 70 Ho which shall not be more than twenty-one days after the notice initiating the Mediation is received after consultation with the Parties and any Mediator. Conduct of the Formal Mediation. The Mediator shall have the ability to conduct the Mediation in any manner which the Mediator believes is appropriate to facilitate resolution of the dispute. Each Party shall have at least one representative with the authority to settle the dispute present at the Mediation. The Mediation shall be private and confidential and the Mediator shall have the authority to exclude any person not directly involved unless the Parties agree otherwise in writing. At the Mediation, each Party shall have the right to make a brief presentation of its case and to question the other Party. Each Party also may be represented by counsel. Replacement of the Mediator. If the Mediator resigns, withdraws or is no longer able to serve, then the Parties shall have two Business Days in which to agree on a new Mediator. If the Parties are unable to agree within such time, the WSPP Representative shall appoint a replacement Mediator from the list used to select the first Mediator within two Business Days after being notified that the Parties are unable to agree. The dates and deadlines in this section may require modification if the mediator is replaced. Any extensions shall be as limited as possible. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 II. ARBITRATION Original Sheet No. 71 g. Co mo Initiating Arbitration. A WSPP member which initiates Arbitration pursuant to Section 34.2 of the WSPP Agreement shall do so by Serving the Chairman of the WSPP Operating Committee, the WSPP General Counsel and the members against which the claim is directed with written notice of its demand for arbitration. Such notice shall state the nature of the dispute, the remedy sought, and support the claim. Response. Within ten days of receipt of the notice, any member or members against which the claim is directed may provide a response to the notice. Such response must include any counterclaims which the member believes are appropriate. If a counterclaim is submitted, then the member which submitted the notice may respond to the counterclaim within ten days of receipt. All such responses shall be Served on the Parties, the Chairman of the WSPP Operating Committee, and the WSPP General Counsel. Choosing the Arbitrator. The Arbitrator shall be chosen in accordance with the procedures set forth in Section 34.2 of the WSPP Agreement. Each Party may suggest persons to be included on the list of Arbitrators to be presented to the Parties provided that these suggested persons are provided to the WSPP Representative together with relevant personal histories within two business days Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al__:., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 72 Do of the date by which time the list of Arbitrators is to be sent out. The WSPP Representative shall allow at least one person suggested by each Party to be added to the list of potential Arbitrators. A brief personal history of each person on the list of potential Arbitrators shall be provided to the Parties, with that history showing the person's employment over the last five years and any other relevant facts. The WSPP Representative shall provide the Parties with the list of Arbitrators within seven days of receipt of notice of the request for Arbitration. The Parties then shall 'have ten days in which to reach agreement on the Arbitrator or to inform the WSPP Representative that they were unable to reach agreement in which event the WSPP Representative shall appoint the Arbitrator consistent with Section 34.2 of the Agreement. Upon request of the Parties for expedition, the WSPP Representative shall use best efforts to cause this process to be expedited. Location for the Arbitration. The Parties shall agree on a location for the Arbitration. If the Parties fail to reach agreement, then the WSPP Representative shall set the location which shall be convenient for the Parties and the Arbitrator. Time for the Arbitration. The Parties shall agree on the time for the Arbitration and coordinate that time with the Arbitrator if one has been agreed to or appointed. If the Parties fail to reach agreement, then the WSPP Representative Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 73 Fo Go shall set the time which shall not be more than 60 days after the notice is received. The WSPP Representative shall set a time after consultation with the Parties and the Arbitrator to check their schedules. Discovery. After appointment of the Arbitrator, each Party shall be entitled to obtain relevant documents from the other Parties and to take depositions. Each Party shall respond to such a document request within seven days of receipt of the request and make its employees or consultants available for depositions to the extent that the employee or consultant possesses knowledge and information relevant to the dispute. Each Party shall disclose documents that are confidential or commercially sensitive subject to a reasonable protective order. Any disputes concerning discovery shall be promptly referred to the Arbitrator who shall have authority to resolve such disputes, including the authority to require attendance of witnesses at depositions. The Federal Rules of Civil Procedure shall apply to discovery under these procedures. Conduct of Arbitration if the Parties Agree to Waive an Oral Hearing. If the Parties agree to waive an oral hearing, then the Parties shall Serve Initial Briefs no later than 35 days after the notice is received or notify the Arbitrator that they do not wish to submit any additional documents. Parties shall Serve any Reply Briefs no later than ten days after the date for Service of Initial Briefs. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Ho Original Sheet No. 74 Conduct of the Arbitration Hearing. No later than fifteen days before any hearing, any Party may Serve an Initial Brief or notify the Arbitrator that they do not wish to submit any additional documents. A Party shall Serve any Reply Brief no later than five Business Days before any hearing. The Arbitrator shall preside over any hearing and rule on all objections including objections as to the admissibility of evidence or whether the questioning is proper. All testimony shall be submitted under oath. The Arbitrator is not bound to follow any particular rules governing the conduct of the proceeding. The Arbitrator may rely on legal advice provided through the WSPP. The Arbitrator may require any person employed by a Party to attend and testify at the hearing. Each Party shall possess the right to present evidence, including witnesses, and to cross-examine other Parties' witnesses. The Arbitration shall be private and the Arbitrator shall have the authority to exclude any person not directly involved unless the Parties otherwise agree. Each Party may be represented by counsel. A stenographic record of the Arbitration shall be kept. Decision. Within ten Business Days after the end of the Arbitration hearing, the Arbitrator shall issue his award in writing. If the Parties waived the right to an oral hearing, then the Arbitrator shall issue the award within ten Business Days of the last date Briefs were to be submitted. The Arbitrator is not limited in the Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 III. Original Sheet No. 75 remedies he may order so long as any arbitration award is consistent with the provisions and limitations of the WSPP Agreement and any applicable Confirmation Agreement with respect to the liability and damages of any Party; provided, however, upon agreement of the Parties to the dispute, the Arbitrator's choice of remedies may be limited. J. Replacement of the Arbitrator. If the Arbitrator resigns, withdraws, or is no longer able to serve then the Parties shall have two Business Days in which to agree on a new Arbitrator. If the Parties are unable to agree within such time, the WSPP Representative shall appoint a replacement Arbitrator from the list used to select the first Arbitrator within two Business Days after being notified that the Parties are unable to agree. The dates and deadlines in this section may require modification if the mediator is replaced. Any extensions shall be as limited as possible. MISCELLANEOUS A. Confidentiality. Any Arbitration or Mediation shall be confidential as provided in Section 34.4 of the WSPP Agreement. B. Costs. Costs shall be borne by Parties as provided in Section 34.3 of the WSPP Agreement. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 IV. Original Sheet No. 76 Co Do Restrictions on Lawsuits. Each Party shall be subject to the restrictions provided in Section 34.2 of the WSPP Agreement. Attorney-Client/Attorney Workproduct. The Arbitrator or Mediator shall not take any action which would result in disclosure of information in violation of the attorney-client privilege or attorney workproduct doctrine. DEFINITIONS mo Bo Co D. E, Arbitrator or Arbitration. The Arbitrator appointed pursuant to these procedures and Section 34.2 of the WSPP Agreement and the Arbitration pursuant to these procedures and the WSPP Agreement. Initial or Reply Briefs. Written documents submitted by the Parties to support their positions and respond to each others positions. Such documents shall be limited to 25 pages. Business Days. Defined as in the WSPP Agreement. Mediator or Mediation. The Mediator appointed pursuant to these procedures and Section 34.1 of the WSPP Agreement and the Mediation pursuant to these procedures and the WSPP Agreement. Parties. The WSPP members involved in the Mediation ~or Arbitration which have a direct interest in the dispute. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 F. Go Original Sheet No. 77 Service, Serving, or Served. The method of service shall be by fax, unless impracticable because of the size of the document. In all events, the document should be delivered to the Party by overnight mail. Parties also should attempt to send the document out by email if possible. Service will be accomplished to a Party if sent to the Party's contact person for the disputed transaction. If there are multiple contact persons for one Party, service to one such person shall suffice. Service shall be to those individuals or entities specified in this procedures, but must include service to the Parties, the Mediator or Arbitrator (if either has been appointed), and to the WSPP General Counsel. WSPP Representative. The Chairman of the WSPP Operating Committee or his or her designee for the purposes of the Arbitration or Mediation. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 A- 1 PARTIES: A-2 A-3 SERVICE SCHEDULE A ECONOMY ENERGY SERVICE Original Sheet No. 78 This Service Schedule is agreed upon as a part of this Agreement by the Parties. PURPOSE: The purpose of this Service Schedule is to define additional specific procedures, terms and conditions for requesting and providing Economy Energy Service. TERMS: A-3.1 A Party may schedule Economy Energy Service from another Party by mutual agreement; provided, however, that each Party shall be the sole judge as to the extent to and the conditions under which it is willing to provide or receive such A-3.2 A-3.3 service hereunder consistent with statutory requirements and contractual commitments including the Agreement and any applicable Confirmation Agreement. Scheduling of Economy Energy Service hereunder shall be a responsibility of the Parties involved. Each Seller/Purchaser may prepare a daily estimate of the amount of Economy Energy Service that it is willing and able to sell/buy each hour and the associated hourly sale/purchase price for the next Business Day, plus the weekend and Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al__:., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 A-3.4 A-3.5 A-3.6 A-3.7 Original Sheet No. 79 holidays, and communicate this information to all other Parties via the Hub. Purchasers shall arrange purchases directly with Sellers, and shall be responsible for transmission arrangements. Unless otherwise mutually agreed between the Purchaser and the Seller, all Economy Energy Service transactions shall be pre-scheduled, and billings shall be based on amounts and prices agreed to in advance by schedulers, subject to Paragraphs A-3.6 and 3.7 and subject to change by mutual agreement between dispatchers or schedulers due to system changes. The price for Economy Energy Service shall be mutually agreed to in advance between Seller and Purchaser and shall not be subject to the rate caps specified in Section A-3.7 in either of the following two circumstances: (1) where the Seller is a FERC regulated public utility and that Seller has been authorized to sell power like that provided for under this Service Schedule at market-based rates; or (2) where the Seller is not a FERC regulated public utility. A Party is a FERC regulated public utility if it is a "public utility" as defined in Section 201(e) of the Federal Power Act, 16 U.S.C. § 824(e). Except as provided for in Section A-3.6, the price shall not exceed the Seller's forecasted Incremental Cost plus up to: $7.32/kW/ month; $1.68/kW/week; Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 A-3.8 Original Sheet No. 80 33.78C/kW/day; 14.07 mills/kWh; or 21.11 mills/kWh for service of sixteen (16) hours or less per day. The hourly rate is capped at the Seller's forecasted Incremental Cost plus 33.78¢/kW/day. The total demand charge revenues in any consecutive seven-day period shall not exceed the product of the weekly rate and the highest demand experienced on any day in the seven-day period. In lieu of payment, such Parties may mutually agree to exchange economy energy at a ratio not to exceed that ratio provided for in Section C-3.7 of Service Schedule C. The Seller's forecasted Incremental Cost discussed above also may include any transmission and/or ancillary service costs associated with the sale, including the cost of any transmission and/or ancillary services that the Seller must take on its own system. Any such transmission and/or ancillary services charges shall be separately identified by the Seller to the Purchaser for transactions under this Schedule including the exchange of economy energy. The transmission and ancillary service rate ceilings shall be available through the WSPP's Hub or homepage. Any such transmission services (and ancillary service provided in conjunction with such transmission service) by Seller shall be provided pursuant to any applicable transmission tariff or agreement, and the rates therefore shall be consistent with such tariff or agreement. Unless otherwise agreed, the Purchaser shall be responsible for maintaining Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 A-3.9 Original Sheet No. 81 operating reserve requirements as back-up for Economy Energy Service purchased and the Seller shall not be required to maintain such operating reserve. Each Party that is a FERC regulated public utility as defined in A-3.6 shall file the Confirmation Agreement with FERC for each transaction under this Service Schedule with a term in excess of one year no later than 30 days after service begins if that Party would have been required to file such Confirmation Agreements or similar agreements with FERC under an applicable FERC accepted market based rate schedule. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 B-1 B-2 B-3 Original Sheet No. 82 SERVICE SCHEDULE B UNIT COMMITMENT SERVICE PARTIES: This Service Schedule is agreed upon as part of this Agreement by the Parties. PURPOSE: The purpose of this Service Schedule is to define additional specific procedures, terms, and conditions for requesting and providing Unit Commitment Service. TERMS: B-3.1 A Party may schedule Unit Commitment Service from another Party by mutual agreement; provided, however, that each Party shall be the sole judge as to the extent to and the conditions under which it is willing to provide or receive such service hereunder consistent with statutory requirements and contractual commitments including the Agreement and any applicable Confirmation Agreement. Once an agreement is reached, then the obligation for Unit Commitment Service becomes a firm commitment, for both Parties, for the agreed capacity and terms. Unless otherwise mutually agreed by the Parties involved in a Unit Commitment Service transaction, the terms set forth in this Service Schedule B shall govern such transaction. B-3.2 Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on' September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al__:., issued September 15, 2000. Western Systems Power Pool Original Sheet No. 83 Rate Schedule FERC No. 6 B-3.3 Unless otherwise agreed between the Purchaser and the Seller, all transactions shall be prescheduled, subject to any conditions agreed to by schedulers, for a specified unit for a specified period of time. B-3.4 Purchasers shall arrange purchases directly with Sellers. B-3.5 The price for Unit Commitment Service shall be mutually agreed to in advance between Seller and Purchaser and shall not be subject to the rate caps specified in Section B-3.6 in either of the following two circumstances: (1) where the Seller is a FERC regulated public utility and that Seller has been authorized to sell power like that provided for under this Service Schedule at market-based rates; or (2) where the Seller is not a FERC regulated public utility. A Party is a FERC regulated public utility if it is a "public utility" as defined in Section 201(e) of the Federal Power Act, 16 U.S.C. § 824(e). B-3.6 Except as provided for in Section B-3.5, the price shall not exceed the Seller's forecasted Incremental Cost plus up to: $?.32/kW/month; $1.68/kW/week; 33.78C/kW/day; 14.07 mills/kWh; or 21.11 mills/kWh for service of sixteen (16) hours or less per day. The hourly rate is capped at the Seller's forecasted Incremental Cost plus 33.?8C/kW/day. The total demand charge revenues in any consecutive seven-day period shall not exceed the product of the weekly rate and the Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 B-3.7 B-3.8 B-3.9 Original Sheet No. 84 highest demand experienced on any day in the seven-day period. The Seller's forecasted Incremental Cost discussed above also may include any transmission and/or ancillary service costs associated with the sale, including the cost of any transmission and/or ancillary services that the Seller must take on its own system. Any such transmission and/or ancillary service charges shall be separately identified by the Seller to the Purchaser. The transmission and ancillary service rate ceilings shall be available through the WSPP's Hub or homepage. Start-up costs and no-load costs if included by the Seller shall be stated separately in the price. Energy schedules for the Purchaser's share of a unit may be modified by the Purchaser with not less than a thirty (30) minute notice before the hour in which the change is to take place, unless otherwise mutually agreed or unforeseen system operating conditions occur. Unit Commitment Service is intended to have assured availability; however, scheduled energy deliveries may be interrupted or curtailed as follows: (a) By the Seller by giving proper recall notice to the Purchaser if the Seller and the Purchaser have mutually agreed to recall provisions, (b) By the Seller when all or a portion of the output of the unit is unavailable, by an amount in proportion to the amount of the reduction in the output of the Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 B-4 Original Sheet No. 85 unit, unless otherwise agreed by the schedulers, (c) By the Seller to prevent system separation during an emergency, provided the Seller has exercised all prudent operating alternatives prior to the interruption or curtailment, (d) Where applicable, by the Seller to meet its public utility or statutory obligations to its customers, or (e) By either the Seller or the Purchaser due to the unavailability of transmission capacity necessary for the delivery of scheduled energy. B-3.10 Each Party that is a FERC regulated public utility as defined above in B-3.5 shall file the Confirmation Agreement with FERC for each transaction under this Service Schedule with a term in excess of one year no later than 30 days after service begins if that Party would have been required to file such Confirmation Agreements or similar agreements with FERC under an applicable FERC accepted market based rate schedule. BILLING AND PAYMENT PROVISIONS: B-4.1 Except as provided in Sections B-4.2 and B-5, billing for Unit Commitment Service shall be computed based upon the agreed upon prices. B-4.2 In the event the Seller requests recall of Unit Commitment Service in a shorter time frame than was mutually agreed pursuant to Section B-3.9(a) and the Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 Original Sheet No. 86 Purchaser agrees to allow such recall, the Purchaser shall be relieved of any obligation to pay start-up costs. B-5 TERMINATION PROVISION: In the event Unit Commitment Service is curtailed or interrupted except as provided in Section B-3.9(a), the Purchaser shall have the option to cancel the Unit Commitment Service at any time by paying the Seller for (i) all energy deliveries scheduled up to the notice of termination and (ii) all separately stated start-up and no-load costs. Issued by: Michael E. Small, General Counsel to Effective: July 1, 2000 Western Systems Power Pool Issued on: September 29, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 C-1 C-2 C-3 C-3.2 First Revised Sheet No. 87 Superseding Original Sheet No. 87 SERVICE SCHEDULE C FIRM CAPACITY/ENERGY SALE OR EXCHANGE SER~CE C-3.3 Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 1, 2000 PARTIES: This Service Schedule is agreed upon as a part of this Agreement by the Parties. PURPOSE: The purpose of this Service Schedule is to define additional specific procedures, terms, and conditions for requesting and providing Firm Capacity/Energy Sale or Exchange Service. TERMS: C-3.1 A Party may schedule Firm Capacity/Energy Sale or Exchange Service from another Party by mutual agreement; provided, however, that each Party shall be the sole judge as to the extent to and the conditions under which it is willing to provide or receive such service hereunder consistent with statutory requirements and contractual commitments including the Agreement and any applicable Confirmation Agreement. Once an agreement is reached, then the obligation for Firm Capacity/Energy Sale or Exchange Service becomes a firm commitment, for both Parties, for the agreed service and terms. Unless otherwise agreed between the Purchaser and the Seller, all transactions shall be prescheduled, subject to any conditions agreed to by schedulers. Firm capacity transactions shall include buying, selling, or exchanging capacity between Parties with or without associated energy. Firm capacity is deemed a capacity sale from the Seller's resources and backed by the Seller's Effective: February 1, 2001 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 C-3.4 C-3.5 C-3.6 C-3.7 First Revised Sheet No. 88 Superseding Original Sheet No. 88 capacity reserves. Firm energy transactions shall include buying, selling, or exchanging finn energy between Parties. Subject to mutual agreement, firm energy is deemed a quantity of energy the Seller has agreed to sell and deliver and the Purchaser has agreed to buy within a specified time period. Purchaser shall arrange purchases directly with Sellers. The price for Finn Capacity/Energy Sale or Exchange Service shall be mutually agreed to in advance between Seller and Purchaser and shall not be subject to the rate caps specified in Section C-3.7 in either of the following two circumstances: (1) where the Seller is a FERC regulated public utility and that Seller has been authorized to sell power like that provided for under this Service Schedule at market-based rates; or (2) where the Seller is not a FERC regulated public utility. A Party is a FERC regulated public utility if it is a "public utility" as defined in Section 201(e) of the Federal Power Act, 16 U.S.C. § 824(e). Except as provided for in Section C-3.6, the price shall not exceed the Seller's forecasted Incremental Cost plus up to: $7.32/kW/month; $1.68/kW/week; 33.78C/kW/day; 14.07 mills/kWh; or 21.11 mills/kWh for service of sixteen (16) hours or less per day. The hourly rate is capped at the Seller's forecasted Incremental Cost plus 33.78C/kW/day. The total demand charge revenues in any consecutive seven-day period shall not exceed the product of the weekly rate and the Issued by: Michael E. Small, General Counsel to Effective: February 1, 2001 Western Systems Power Pool Issued on: December 1, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 C-3.8 First Revised Sheet No. 89 Superseding Original Sheet No. 89 highest demand experienced on any day in the seven-day period. Exchange ratios among such Parties shall be as mutually agreed between the Purchaser and the Seller, but shall not exceed the ratio of 1.5 to 1.0. The Seller's forecasted Incremental Cost discussed above also may include any transmission and/or ancillary service costs associated with the sale, including the cost of any transmission and/or ancillary services that the Seller must take on its own system. Any such transmission and/or ancillary service charges shall be separately identified by the Seller to the Purchaser for transactions under this Schedule including exchanges. The transmission and ancillary service rate ceiling shall be available through the WSPP's Hub or homepage. Any such transmission service (and ancillary services provided in conjunction with such transmission service) by Seller shall be provided pursuant to any applicable transmission tariff or agreement, and the rates therefore shall be consistent with such tariff or agreement. Firm Capacity/Energy Sale or Exchange Service shall be interruptible only if the interruption is: (a) within the recall time or allowed by other applicable provisions governing interruptions of service under this Service Schedule mutually agreed to by the Seller and the Purchaser, (b) due to an Uncontrollable Force as provided in Section 10 of this Agreement; or (c) where applicable, to meet Seller's public utility or statutory obligations to its customers. If service under this Service Schedule is interrupted under Section C-3.8(a) or (b), neither Seller nor Purchaser shall be obligated to pay any damages under this Agreement or Confirmation Agreement. If service under this Service Schedule is interrupted for any reason Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 1, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Effective: February 1, 2001 Western Systems Power Pool Original Sheet No. 89A Rate Schedule FERC No. 6 other than pursuant to Section C-3.8(a) or (b), the Non-Performing Party shall be responsible for payment of damages as provided in Section 21.3 of this Agreement or in any Confirmation. Issued by: Michael E. Small, General Counsel to Effective: February 1, 2001 Western Systems Power Pool Issued on: December 1, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 90 Superseding Original Sheet No. 90 C-3.9 Each Party that is a FERC regulated public utility as defined in Section C-3.6 shall file the Confirmation Agreement with FERC for each transaction under this Service Schedule with a term in excess of one year no later than 30 days after service begins if that Party would have been required to file such Confirmation Agreements or similar agreements with FERC under an applicable FERC accepted market based rate schedule. C~3.10 Seller shall be responsible for ensuring that Service Schedule C transactions are scheduled as firm power consistent with the most recent rules adopted by the applicable NERC regional reliability council. Wspp/Feb 04 Effective Amendments Non-Redlined Issued by: Michael E. Small, General Counsel to Effective: February 1, 2001 Western Systems Power Pool Issued on: December 1, 2000 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. ER00-3338, et al., issued September 15, 2000. Western Systems Power Pool Rate Schedule FERC No. 6 First Revised Sheet No. 91 Superseding Original Sheet No. 91 LIST OF MEMBERS ACN Power, Inc. AES NewEnergy, Inc. Allegheny Energy Supply Co., LLC Amerada Hess Corporation Ameren Energy Generating Company American Electric Power Service Corporation as agent for Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric Power Company APS Energy Services Company, Inc. Aquila Energy Marketing Corporation Arizona Electric Power Co. Arizona Public Service Co. Arkansas Electric Coop. Corp. Associated Electric Cooperative, Inc. Astra Oil Company, Inc. Avista Corporation Avista Energy, Inc. Basin Electric Power Cooperative Benton Public Utility District No. 1 of Benton County Blackhills Power & Light Company Bonneville Power Adm. BP Energy Company Burbank, City of Calif. Dept. of Water Resources Calpine Energy Services, L.P. Candela Energy Corporation Cargill-Alliant, LLC Carolina Power & Light Company Cheyenne Light, Fuel and Power Co. Cinergy Capital & Trading, Inc. Cinergy Operating Companies City of Anaheim, Public Utilities Dept. City of Azusa City of Banning City of Glendale Water & Power Dept. City of Independence City of Klamath Falls City of Palo Alto City of Riverside, California City of Santa Clara Electric Department Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 City of Sikeston, Board of Municipal Utilities City Utilities of Springfield, Missouri City Water & Light (Jonesboro, AR) Clatskanie PUD Cleco Marketing & Trading LLC Cleco Power LLC CMS Marketing, Services and Trading Company CNG Power Services Corp. Colorado River Commission of Nevada Colorado Springs Utilities Colton, City of Columbia Energy Power Marketing Columbia Power Corporation Cominco, Ltd. Commonwealth Energy Corporation ConAgra Energy Services, Inc. Conectiv Energy Supply, Inc. Conoco Gas & Power Marketing - a division of Conoco Inc. Constellation Power Source Cook Inlet Energy Supply Coral Power, L.L.C. Deseret G&T DTE Energy Trading, Inc. Duke Energy Trading & Marketing, LLC Duke Power Duke Solutions, Inc. Duke/Louis Dreyfuss, LLC Dynegy Power Marketing, Inc. Dynegy Power Services, Inc. E prime Edison Mission Marketing & Trading, Inc. Edison Source Edmonton Power Authority, Alberta E1 Paso Electric E1 Paso Merchant Energy, L.P. Empire District Electric Co. Energy Transfer Group, LLC EnerZ Corporation Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Engage Energy America LLC Engelhard Power Marketing, Inc. ENMAX Energy Corporation ENMAX Energy Marketing Inc. Enron Power Marketing, Inc. Enserco Energy Inc. Entergy Arkansas, Inc. Entergy Gulf States, Inc. Entergy Louisiana, Inc. Entergy Mississippi, Inc. Entergy New Orleans, Inc. Entergy Power, Inc. Entergy Services, Inc. as agent for the Entergy Operating Companies Entergy-Koch Trading, LP Equitable Power Services Co. Eugene Water 8,: Electric Board Exelon Generation Company, LLC Farmington, City of Federal Energy Sales, Inc. FPL Energy Power Marketing Inc. Golden Spread Electric Cooperative Grand River Dam Authority Hafslund Energy Trading, LLC Hetch-Hetchy Water & Power Hinson Power Co., LLC Howard Energy Co., Inc. IDACORP Energy L.P. Idaho Power Company IGI Resources, Inc. Illinova Energy Partners, Inc. Imperial Irrigation District Industrial Energy Applications, Inc. InterCoast Power Marketing J. Aron & Company KAMO Electric Cooperative, Inc. Kansas City Board of Public Utilities Kansas City Power & Light KN Energy Marketing Lafayette Utilities System LG&E Energy Marketing Inc. Lincoln Electric System Los Alamos County Los Angeles Dept. of Water & Power Louisiana Generating LLC Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21,2001 First Revised Sheet No. 92 Superseding Original Sheet No. 92 Louisville Gas & Electric Company Maclaren Energy Inc. Mason County PUD No. 3 McMinnville Water & Light Merchant Energy Group of the Americas, Inc. Merrill Lynch Capital Services, Inc. Metropolitan Water District MidAmerican Energy Company MidCon Power Services Corp. MIECO, Inc. Minnesota Power, Inc. Mirant Americas Energy Marketing, LP Missouri Joint Municipal Electric Utility Comm. Modesto Irrigation District Morgan Stanley Capital Group, Inc. M-S-R Public Power Agency Municipal Energy Agency of Mississippi Municipal Energy Agency of Nebraska Nebraska Public Power District Nevada Power Co. New West Energy NorthPoint Energy Solutions Inc. Northern California Power Agency Northern States Power Company NP Energy Inc. NRG Power Marketing Inc. OGE Energy Resources, Inc. Oklahoma Gas & Electric Oklahoma Municipal Power Authority Omaha Public Power District ONEOK Power Marketing Company Otter Tail Power Company Pacific Gas & Electric Co. Pacific Northwest Generating Coop. PacifiCorp PacifiCorp Power Marketing, Inc. PanCanadian Energy Services Pasadena, City of PG&E Energy Services PG&E Energy Trading - Power, L.P. PG&E Power Services Company Effective: March 1, 2002 Western Systems Power Pool Rate Schedule FERC No. 6 Phibro Inc. Pinnacle West Capital Corporation Plains Elec. Gen. & Trans. Coop. Inc. Platte River Power Authority Portland General Electric Co. Power Exchange Corporation Powerex PPL Electric Utilities Corporation PPL EnergyPlus, LLC PPL Montana, LLC Public Service Co. of NM Public Service Co. of Colorado Public Util. Dist. No. ! of Douglas Cty. Public Util. Dist. No. 1 of Franklin Cty. PUD No. 1 of Chelan County PUD No. 1 of Grays Harbor County PUD No. 1 of Snohomish County PUD No. 2 of Grant County Puget Sound Energy QST Energy Trading Inc. Questar Energy Trading Rainbow Energy Marketing Corporation Redding, City of Reliant Energy Services, Inc. Rocky Mountain Generation Coop., Inc. Roseville Electric Sacramento Municipal Utility District Salt River Project San Diego Gas & Electric Co. Seattle City Light Sempra Energy Resources Sempra Energy Solutions Sempra Energy Trading Corp. Sierra Pacific Power Co. Southern Calif. Edison Co. Southern California Water Company Southern Company Services, Inc. Southern Illinois Power Cooperative Southwest Power Administration Southwestern Public Service Split Rock Energy LLC Statoil Energy Trading, Inc. Strategic Energy LLC Sunflower Electric Power Corp. Tacoma Power Issued by: Michael E. Small, General Counsel to Western Systems Power Pool Issued on: December 21, 2001 Sixth Revised Sheet No. 93 Superseding Fifth Sheet No. 93 Tenaska Power Services Co. Tennessee Valley Authority Texaco Energy Services Texas-New Mexico Power Company The Detroit Edison Co. The Energy Authority The Montana Power Company The Power Company of America, LP Tractebel Energy Marketing, Inc. TransAlta Energy Marketing (US) Inc. TransCanada Power, div. of TransCanada Energy Ltd. Tri-State Generation and Transmission Assoc. Tucson Electric Power Turlock Irrigation District TXU Energy Trading Company Union Electric Company Utah Associated Municipal Power Systems UtiliCorp United Vastar Power Marketing, Inc. Vernon, City of VIASYN, Inc. Virginia Electric and Power Company Vitol Gas & Electric LLC WAPA-Colorado River Storage Project Management Center WAPA-Desert Southwest Region WAPA-Rocky Mountain Region WAPA-Upper Great Plains Region WAPA-Sierra Nevada Region West Kootenay Power Ltd. Western Farmers Electric Co-op Western Power Services, Inc. Western Resources, Inc. Williams Energy Marketing & Trading Co. WPS Energy Services, Inc. XCEL Energy Services, Inc. Effective: March 1, 2002 EXHIBIT C MASTER CONFIRMATION AGREEMENT UNDER THE WESTERN SYSTEMS POWER POOL AGREEMENT BETWEEN AND NORTHERN CALIFORNIA POWER AGENCY This Master Confirmation Agreement under the Western Systems Power Pool ("WSPP") Agreement (the "Master Confirmation") sets forth the agreement between ("Counterparty") and Northern California Power Agency ("NCPA") effective as of the __ day of ,2004. WHEREAS, this Master Confirmation is being provided pursuant to and in accordance with WSPP Agreement, as amended periodically with FERC approval, and as modified hereby, to which Counterparty and NCPA are Parties; NOW THEREFORE, in consideration of the mutual consents and agreements contained herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, Counterpart), and NCPA agree to the tbllowing terms and conditions. GENERAL This Master Confirmation shall govern all transactions between the Parties under the WSPP Agreement. By entering into this Master Confirmation, Counterparty and NCPA intend to have these provisions modif?, supplement and amend the WSPP Agreement and to have these provisions apply to all Confirmation Agreements and transactions between Counterparty and NCPA. The WSPP Agreement, as modified, supplemented and amended by this Master Confirmation, shall be referred to as the "Agreement". Terms used but not defined herein shall have the meanings ascribed to them in the WSPP Agreement. In the event of any conflict between the terms of this Master Confirmation and the WSPP Agreement, the terms of this Master Confirmation shall control. (a) (b) SECTION 4 DEFINITIONS Section 4.1c of the WSPP Agreement is modified by including "CAISO" as an equivalent abbreviated form of the defined term "California ISO" such that the definition now reads: "4.1c California ISO (or CAISO) ..." A new Section 4.1g shall be added in Section 4 as follows: "4.1g CAISO Firm Transaction: a transaction under Service Schedule C in which the Seller shall sell and the Purchaser shall purchase a quantity of electric energy equal to the hourly quantity, without Ancillary Services (as defined in the CAISO Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the CAISO Tariff, for which the only excuse for failure to deliver or receive is an "Uncontrollable Force" (as defined in the CAISO Tariff) called by the CAISO in accordance with the CAISO Tariff. (c) A new Section 4. Ih shall be added in Section 4 as follows: "4.1h CAISO Tariff: the FERC approved tariff of CAISO, including all CAISO protocols, as the same may be amended front time to time." SECTION 10 UNCONTROLLABLE FORCES Section 10 of the WSPP Agreement is modified by adding at the beginning of the section, the words "Except in connection with scheduling, delivery or receipt under a CAISO Firm Transaction,". (a) (b) (c) (d) SECTION 21 LIABILITY AND DAMAGES The second sentence of Section 21.1(a) of the WSPP Agreement shall be modified to read as follows: "THE LIABILITY OF THE NON-PERFORMING OR DEFAULTING PARTY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISIONS, AND ALL OTHER DAMAGES ARE HEREBY WAIVED." The third sentence of Section 21.1 of the WSPP Agreement shall be modified by adding "21.2," before the text "21.3" Section 21.3(a)(4) of the WSPP Agreement shall be modified by replacing the language beginning with "within the billing period" through the end of the sentence, with the following: "within three (3) Business Days from the date that an invoice for such amount is received. The Performing Party may invoice the Non-Performing Party at any time following the Performing Party having incurred an amount under this Section, subject to the two-year limitation as specified in Section 9.4." Section 21.3(d) of the WSPP Agreement shall be modified by deleting the phrase "as required by Section 9 of this Agreement" and by deleting the second and third sentences of the Section in their entirety and replacing them with "Upon resolution of the dispute, any excess amount of bills which may have been overpaid shall be returned by the owing Party upon determination of the correct amount, with interest accrued at the rate set forth in Section 9.4, prorated by days from the date of overpayment to the date of refund." (a) (b) SECTION 22 DEFAULT A new Section 22.1(f) is added to Section 22 of the WSPP Agreement as follows: "An Event of Default shall also include the failure by the Defaulting Party to schedule, deliver, or receive electric capacity, energy, Ancillary Services or other products sold and purchased under a specified Confirmation Agreement for three (3) consecutive calendar days and such failure is not excused pursuant to the product definition, this Agreement or under the terms of the specified Confirmation Agreement." A new Section 22.2a is added to Section 22 of the WSPP Agreement as follows: (c) (d) "22.2a Upon any Event of Default or Potential Event of Default, the Non-Defaulting Party may, in addition to any other remedies available hereunder, suspend performance under this Agreement and under any Confirmation Agreement, provided, however, in no event shall any such suspension continue for longer than ten (10) Business Days with respect to any single Confirmation Agreement unless a termination date shall have been declared and notice thereof pursuant to Section 22.2 given. "Potential Event of Default" means an event which, with notice or passage of time or both, would constitute an Event of Default, provided that the failure to comply with any requirement of this Agreement, including the requirements of Section 27, or a Confirmation Agreement, before the expiration of the time period expressly specified for such compliance in this Agreement or the Confirmation Agreement (but not including any period that is provided as a cure-period for what would otherxvise constitute an Event of Default), if any, shall not be considered a Potential Event of Default unless and until the applicable time period has expired without compliance." Section 22.3(c) of the WSPP Agreement shall be modified by deleting, in the third sentence, the language beginning with "shall pay the remaining amount" through the end of that sentence and inserting in its place the words "shall make no payment to the other Party, and notwithstanding anything in this Agreement to the contrary, the amount by which such Gain exceeds the Losses and Costs for the purpose of this Agreement shall be deemed to be zero (0)." Section 22.3(e) of the WSPP Agreement shall be modified by deleting subsections 22.3(e)(i), 22.3(e)(ii), and 22.3(e)(iii) in their entirety and by deleting the first paragraph of subsection 22.3(e)(iv) such that the subsection begins with the language: "If the Defaulting Party disagrees with the calculation .... "and ends with the language "...or similar charges imposed by the Non-Defaulting Party." SECTION 24 GOVERNING LAW Section 24 of the WSPP Agreement is deleted and replaced with the Following: "This Agreement and any Confirmation Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of laws rules thereof. EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT." NCPA and Party agree that the standard of review for any proposed changes to the rates, terms, and/or conditions of service of this Master Confirmation or any Confirmation Agreement or transaction entered into hereunder, whether proposed by a Party, a non-party or FERC acting sua spOnte, shall be the "public interest" standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Each Party hereby reserves all of its rights under the Federal Power Act and any other applicable federal or state statutory or common law to bring a complaint or other action against the other Party regarding this Master Confirmation or any Confirmation Agreement or transaction entered into thereunder on the basis of fraud or market manipulation on the part of either Party that is demonstrated to have a direct nexus to the formation and tainted such formation of the Confirmation Agreement or transaction itself. The Parties intend that any action brought pursuant to this section shall be governed by the "just and reasonable" standard specified in the Federal Power Act or such other standard of proof as may be specified by applicable federal or state law, and not the more onerous "public interest" standard specified above. SECTION 35 FORWARD CONTRACTS AND OTHER REPRESENTATIONS Section 35 of the WSPP Agreement is modified by (i) inserting, after the words "the Parties are" and before the phrase "forward contract merchants", the phrase ", or shall be deemed to be," and (ii) by inserting the following new sentences in between the first and second sentences: "The parties acknowledge and agree that each Party's ability to liquidate and accelerate payment under transactions entered into pursuant to any Confirmation Agreements hereunder (as provided in Section 22.3) as forward contract under Section 556 of the United States Bankruptcy Code is a material inducement supporting such party's entry into this Agreement and such transactions. The Parties agree further that each Party's business consists in whole or in part of entering into forward contracts as or xvith merchants in electric energy, capacity, and other related products and/or services, which is presently the subject of dealing in the forward contract trade. No Party shall assert before any court or other governmental authority that another Party is not, or shall not be treated as a forward contract merchant under the United States Bankruptcy Code. NCPA warrants and covenants that with respect to its contractual obligations hereunder and performance thereof, it ;vill not claim immunity on grounds of sovereignty or similar grounds with respect to itself or its surplus revenues from (a) suit, (b) jurisdiction of court (including a court located outside the jurisdiction of its organization, subject to the law of proper venue), (c) relief by way of injunction, order for specific performance or recover of property, or (d) execution or enforcement of any valid judgment. BILLING ADDRESSES The billing address for NCPA for the purpose of Section 9 of the WSPP Agreement shall be: Northern California Power Agency 180 Cirby Way Roseville, CA 95678 With Additional Notices to: Attn: Contract Administration Phone: (916) 781-4296 Facsimile: (916) 783-7693 Invoices/Payments/Credit 8,: Collections: Power Accounts Administrator (916) 781-4224/3636 (916 781-4255 (fax) Wire Transfer: ABA Routing: 121122676 Bank: US Bank For Deposit to: Northern California Pov'er Agency Acct No. 1-534-0216-2744 Attention: Donna Jojola U.S. Bank 680 9th Street, Suite 1100 Sacramento, CA 95814 (916) 552-1864 (916) 448-6518 (fax) Pre-scheduling: (916) 786-0123/0124 (916) 781-4239 (fax) Real-time/Dispatch: (916) 786-3518/3519 (916) 781-4226 (fax) Schedule Coordinator: (916) 781-4237 (916) 781-4226 (fax) Counterparty Info The billing address for either Party may be changed by such Party upon written notice to the other Party. Except to the extent herein provided for, no amendment or modification to the Agreement shall be enforceable unless reduced to writing and executed by both Parties. In WITNESS WHEREOF, the Parties have caused this Master Confirmation to be duly executed by its authorized officers or agents effective as of the date first above written. Counterparty Northern California Power Agency By: Name: Title: By: Name; Title: