Roseville City Council
June 4, 2025

City Council Chambers, 311 Vernon Street roseville.ca.us

The City of Roseville welcomes your participation.

Meeting Schedule: Regular meetings of the City Council are held on the first and third Wednesday of each month at 6:00 p.m.

Two Public Comment Periods for Non-Agenda Items: A total of twenty-five (25) minutes is allotted for public comments. At the beginning and end of the meeting, each speaker has three (3) minutes to address the Mayor/Chair on issues that are not listed on the agenda and are within the City’s jurisdiction. Please submit a yellow speaker card to the City Clerk before the item is heard if you wish to make a comment. You will still have an opportunity to comment if you haven’t filled out a yellow speaker card.

Brown Act: The City Council cannot discuss or act on items not listed on the agenda. Public Comment on Agenda Items: Each speaker has five (5) minutes to address items that are listed on the agenda.

Levine Act Provisions: If you’ve made a campaign contribution totaling more than $500 ($250 prior to January 1, 2025) to City Council Members in the last twelve (12) months, you must disclose it before addressing an item on the agenda. Please visit Levine Act – City of Roseville for updated forms and information.

Audio/Visual Presentations: If making a presentation regarding an agenda item, audio/visual materials must be submitted to the City Clerk for consideration at least 72 hours in advance.

Americans with Disabilities Act: If special assistance is required to participate in a meeting, including the need of auxiliary aids or services, please notify the City Clerk at least 72 hours in advance of the meeting. City Clerk 311 Vernon Street [email protected] 916-774-5263 TDD: 916-774-5220

Security Measures: All meeting attendees must successfully pass through a security metal detector. Any person with a prohibited item will not be allowed entry. Prohibited items include but are not limited to firearms (even with valid CCW), knives, pepper spray/mace, explosives of any kind/any weapons and/or dangerous devices of any kind, illegal drugs, and alcohol.

Viewing Options: The City of Roseville provides three options for viewing meetings:

Krista Bernasconi, Mayor
Karen Alvord, Vice Mayor
Bruce Houdesheldt, Councilmember
Tracy Mendonsa, Councilmember
Pauline Roccucci, Councilmember
Dominick Casey, City Manager
Michelle Sheidenberger, City Attorney
Carmen Avalos, City Clerk
AGENDA
City Council / Housing Authority Meeting
June 4, 2025
6:00 PM
City Council Chambers, 311 Vernon Street
I. CALL TO ORDER
II. ROLL CALL
III. PLEDGE OF ALLEGIANCE
IV. MEETING PROCEDURES
V. PUBLIC COMMENTS
This is the first opportunity to make a public comment on non-agenda items.

VI. CONSENT CALENDAR

1. Western System Power Pool Agreement Collateral Annex (ELECTRIC DEPARTMENT - FINANCIAL & ADMINISTRATIVE)
Summary: Staff recommends approval of the Western Systems Power Pool (WSPP) Collateral Annex, including the Cover Sheet Elections, with Altop Energy Trading LLC (“Altop”). These documents supplement the WSPP Agreement previously executed by the City and establish industry-standard credit and collateral provisions that would apply to any future wholesale physical power transactions with Altop under the WSPP framework. There is no cost associated with the execution of these documents.

CONTACT: Glenn Hoffman 916-746-1670 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-185 approving the Western Systems Power Pool Collateral Annex and Cover Sheet Elections, by and between the City of Roseville and Altop Energy Trading, LLC, and authorizing the City Manager to execute them on behalf of the City of Roseville.

2. Silver Spruce (KT-52) Park – Award of Contract and Budget Adjustment (PARKS, RECREATION,

AND LIBRARIES DEPARTMENT - PARK DEVELOPMENT)

Summary: Staff recommends approval of an agreement with TJR Resources, Inc. in the amount of $2,822,254 for the KT-52 School Park Project. Staff also recommends approval of a budget adjustment in the amount of $45,000 for the KT-52 School Park Project. Funding for this project was approved in the FY2022-23 budget (for design) and in the FY2023-24 budget (for construction) through the Neighborhood Park - Sierra Vista Fund.

CONTACT: Heather Buck 916-774-5254 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-175 approving an agreement, by and between the City of Roseville and TJR Resources, Inc., and authorizing the City Manager to execute it on behalf of the City of Roseville; and

b. Adopt Ordinance No. 6946 authorizing certain amendments to the Fiscal Year 2024-25 budget and declaring this ordinance to be immediately effective as an appropriation measure.

3. Lower Bank Park (C-63) - Award of Contract and Budget Adjustment (PARKS, RECREATION, AND

LIBRARIES DEPARTMENT - PARK DEVELOPMENT)
Summary: Staff recommends approval of an agreement with Brightview Landscape Development, Inc. in the amount of $1,190,741 for the Lower Bank Park Project. Staff also recommends approval of a budget adjustment in the amount of $350,000 from the General Fund for the Lower Bank Park Project. Funding for construction of this park was included in the FY2023-24 capital improvement project budget in the Neighborhood Park - Creekview Fund.

CONTACT: Joel De Jong 916-774-5924 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-179 approving an agreement, by and between the City of Roseville and Brightview Landscape Development, Inc., and authorizing the City Manager to execute it on behalf of the City of Roseville; and

b. Adopt Ordinance No. 6950 authorizing certain amendments to the fiscal year 2024-25 budget and declaring this ordinance to be immediately effective as an appropriation measure.

4. Winding Creek Adventure Club - Reimbursement Agreement (PARKS, RECREATION, AND

LIBRARIES DEPARTMENT - RECREATION)
Summary: Staff recommends approval of a reimbursement agreement with Roseville City School District for architectural and civil design services, DSA (Division of State Architect) permitting and construction administration services, plumbing and electrical services, and DSA inspection services to connect and install a City of Roseville purchased modular building to operate a new Adventure Club at Winding Creek Elementary School opening in fall of 2026. The reimbursement agreement should not exceed $234,508, including contingencies, and is funded by a General Fund subsidy to the Youth Development Fund.

CONTACT: Rob Nakamura 916-774-5135 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-184 approving a Reimbursement Agreement, by and between the City of Roseville and Roseville City School District, and authorizing the City Manager to execute it on behalf of the City of Roseville.

5. Roseville Aquatics Complex - Woodcreek SeaWolves Joint Use Agreement (PARKS,

RECREATION, AND LIBRARIES DEPARTMENT - RECREATION)
Summary: Staff recommends approval of an agreement with the Woodcreek SeaWolves for the purpose of joint use of the Roseville Aquatics Complex. The Woodcreek SeaWolves will pay the City an annual rental fee over the term of this agreement in addition to fees for their use in excess of the agreement. The total General Fund revenues from the agreement are expected to be $57,802.

CONTACT: Jeff Nereson 916-774-5974 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution 25-180 approving a Joint Use Agreement, by and between the Woodcreek Seawolves and the City of Roseville, and authorizing the City Manager to execute it on behalf of the City of Roseville.

6. Permit Center Renovation (RFQ 10-3406) - Spending Authority Increase (PUBLIC WORKS

DEPARTMENT - FACILITIES)
Summary: Staff recommends approval to increase the change order authority to a 20% construction contingency for the contract purchase agreement with JPB Designs Inc. The cost of the agreement is $532,000. An authorized change order authority of up to 20% ($106,400) as a construction contingency, would bring the total contract amount to $638,400. The Permit Center Remodel Project is budgeted in the General Fund.

CONTACT: Lori Crittenden 916-774-5707 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-185 approving an increase in spending authority.

7. 116 S. Grant Building Façade and Envelope Design - Professional Design Services Agreement and Budget Adjustment (PUBLIC WORKS DEPARTMENT - FACILITIES) Summary: Staff recommends approval of a professional design services agreement with Heller Manus Architects in the amount of $489,745 for the 116 S. Grant Building Facade and Envelope Project. Additionally, staff recommends approval of a budget adjustment of $565,000. The budget adjustment will appropriate available resources in the Electric Fund to the 116 S. Grant Building and Envelope Project for the design contract and staff time.

CONTACT: Lori Crittenden 916-774-5707 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-181 approving a Professional Design Services Agreement, by and between the City of Roseville and Heller Manus, Inc. dba Heller Manus Architects, and authorizing the City Manager to execute it on behalf of the City of Roseville; and

b. Adopt Ordinance No. 6951 authorizing certain amendments to the Fiscal Year 2024-25 budget and declaring this ordinance to be immediately effective as an appropriation measure.

8. Parking Garage Elevator Rehabilitation Project - 405 Vernon Street Elevator Upgrade (RFQ 10- 3394) - Notice of Completion (PUBLIC WORKS DEPARTMENT - FACILITIES) Summary: Staff recommends that the City Council accept the Parking Garage Elevator Rehabilitation Project as complete and adopt a resolution authorizing the Public Works Director to execute the Notice of Completion. The total cost of the construction contract with Specialized Elevator Services was $100,885. Funding for this project was included in the General Fund budget during the 2024-25 fiscal year.

CONTACT: Andre Baranov 916-774-5342 [email protected] The City Council will consider the recommendation to:

a. Accept the Parking Garage Elevator Rehabilitation Project as complete; and

b. Adopt Resolution No. 25-182 accepting the public work known as the Parking Garage Elevator Rehabilitation Project, approving the “Notice of Completion”, and authorizing the Public Works Director to execute said notice on behalf of the City of Roseville.

9. Edward Byrne Memorial Justice Assistance Grant Program - Approval of Non-Capital Project, Grant Award, and Budget Adjustment (POLICE DEPARTMENT)
Summary: Staff recommends that the City Council authorize a new non-capital project, accept the FY2024 Edward Byrne Memorial Justice Assistance Grant, and approve a budget adjustment to appropriate $17,653 of grant funding in the City's Grants Fund.

CONTACT: Mark Peinado 916-774-5021 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-176 accepting a Grant Award from the United States Department of Justice, Office of Justice programs, and authorizing the City Manager to execute the required documents on behalf of the City of Roseville; and

b. Adopt Ordinance No. 6947 authorizing certain amendments to the Fiscal Year 2024-25 budget and declaring this ordinance to be immediately effective as an appropriation measure.

10. Website Redesign and Content Management System (RFP 12-032) - Contract Purchase Agreement (INFORMATION TECHNOLOGY DEPARTMENT - STRATEGIC PLANNING) Summary: Staff recommends approval of a contract purchase agreement with Revize, LLC in the amount of $245,019 in the current fiscal year to provide a replacement of the Content Management System and the Website Redesign. Additionally, staff requests the City Council to authorize the City Manager or his designee to approve change orders up to an additional 10% to cover unexpected changes to the project scope or schedule. Staff requests authorization for three optional renewal years without further Council approval, pending Council’s approval of the yearly budget. Funding is included in the Citywide Content Management System Replacement Project budget in the Information Technology Replacement Fund.

CONTACT: Sydney Finch 916-774-1175 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-191 approving a contract purchase agreement, by and between the City of Roseville and Revize LLC, and authorizing the City Manager to execute it on behalf of the City of Roseville.

11. Sierra View Country Club Project - Notice of Completion (DEVELOPMENT SERVICES

DEPARTMENT - ENGINEERING DIVISION)
Summary: Staff recommends that the City Council accept the Sierra View Country Club project as complete and adopt a resolution to authorize the City Engineer to execute the Notice of Completion. This action has no impact to the City's General Fund. Construction costs were paid by the developer.

CONTACT: Daniel Jacobo 916-774-5486 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-177 accepting the public work known as Sierra View Country Club project, approving the "Notice of Completion", and authorizing and directing the City Engineer to execute said notice on behalf of the City of Roseville, therefore, and accepting all dedications offered on the recorded map of the subdivision.

12. Westbrook - WB-42 Parcel 2 - Final Map and Subdivision Agreement (DEVELOPMENT SERVICES

DEPARTMENT - ENGINEERING DIVISION)
Summary: Staff recommends approval of the Westbrook - WB-42 Parcel 2 final map and approval of a Subdivision Agreement with Taylor Morrison of California, LLC. The Engineering Department has completed its review of the final map and found that it is in compliance with the approved tentative map. This map will create 53 residential lots and 5 landscape lots. The actions requested have no fiscal impact on the City's General Fund.

CONTACT: Darren Ertis [email protected]

The City Council will consider the recommendation to:

a. Approve the final map on file with the City Clerk and accept, on behalf of the public, the public utility easements offered thereon, and accept, subject to improvement, the public rights of way and Lots A and B offered thereon, and approve the abandonment of the rights of way and easements listed thereon; and

b. Adopt Resolution 25-178 approving a Subdivision Agreement, by and between the City of Roseville and Taylor Morrison of California, LLC, and authorizing the City Manager to execute it on behalf of the City of Roseville.

13. Water Security Project – Budget Adjustment (ENVIRONMENTAL UTILITIES DEPARTMENT -

TECHNICAL SERVICES)
Summary: Staff recommends approval of a budget adjustment in the amount of $300,000 to cover the costs of the Water Security Project. Funding is available from the Water Operations Fund.

CONTACT: William Montz 916-774-5545 [email protected] The City Council will consider the recommendation to:

a. Adopt Ordinance No. 6948 authorizing certain amendments to the Fiscal Year 2024-25 budget and declaring this ordinance to be immediately effective as an appropriation measure.

14. On-Call Construction Fencing Services - Contract Purchase Agreement Amendment (ENVIRONMENTAL UTILITIES DEPARTMENT - TECHNICAL SERVICES) Summary: This item requests City Council approval to increase the On-Call Construction Fencing Contract Purchase Agreement for Crusader Fence Company for fiscal year 2024-25, from a not- to-exceed cost for the services of $350,000 per year up to $750,000 per year, for up to three years. The fencing projects may be funded by the Environmental Utilities Rehabilitation Program, operating budgets, or capital improvement projects.

CONTACT: William Montz 916-774-5545 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-189 approving amendment #1 to contract purchase agreement, by and between the City of Roseville and Crusader Fence Company, LLC, and authorizing the City Manager to execute it on behalf of the City of Roseville.

15. Church Street and Pump Station 26 Collection System Improvements Project – Increase in Spending Authority and Budget Adjustment (ENVIRONMENTAL UTILITIES DEPARTMENT -

TECHNICAL SERVICES)
Summary: Staff requests authorization for the City Manager or his designee to approve and pay for contract change orders for the Construction Agreement with Mountain Cascade, Inc. for the Church Street and Pump Station 26 Collection System Improvements Project (Project) that could

increase the original contract amount for Schedule A by no more than 17%, or $718,360. This item also requests approval of a $400,000 budget adjustment for the Project using available resources in the Wastewater Rehabilitation Fund.

CONTACT: William Montz 916-774-5545 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-188 approving an increase in spending authority; and

b. Adopt Ordinance No. 6952 authorizing certain amendments to the Fiscal Year 2024-25 budget and declaring this ordinance to be immediately effective as an appropriation measure.

16. Second Reading - Roseville Designation of Fire Hazard Severity Zone Map (FIRE DEPARTMENT) Summary: Approve an ordinance for second reading and adoption designating moderate, high and very high fire hazard severity zones within the City of Roseville as required by California Government Code section 51179.

CONTACT: Michael Bradley 916-774-5400 [email protected] The City Council will consider the recommendation to:

a. Adopt Ordinance No. 6949 designating moderate, high and very high fire hazard severity zones within the City of Roseville.

17. Second Reading - Water, Wastewater, and Waste Services - Proposed Utility Rate Adjustments and Municipal Code Revisions for Fiscal Year 2025-26 and Fiscal Year 2026-27 (ENVIRONMENTAL UTILITIES DEPARTMENT)
Summary: Approve an ordinance for second reading and adoption for proposed rate adjustments effective July 4, 2025, and July 1, 2026, for water, wastewater, and waste services utility rates and associated amendments to the Roseville Municipal Code.

CONTACT: Shane Whittington 916-774-5557 [email protected] The City Council will consider the recommendation to:

a. Adopt Ordinance No. 6953 amending Sections 9.12.030, 9.12.070, 9.12.090, 9.12.130 of Chapter 9.12 of title 9, sections 14.08.090 and 14.08.100 of Chapter 14.08, Section 14.16.200 of Chapter 14.16 and Section 14.17.080 of Chapter 14.17 of title 14 of the Roseville Municipal Code regarding Waste, Wastewater, and Waste Services rates.

18. HOUSING AUTHORITY/CITY COUNCIL – Quarterly Status Update 1st Qtr 2025 (ECONOMIC

DEVELOPMENT DEPARTMENT - HOUSING)
Summary: Staff recommends the City Council, acting as the Roseville Housing Authority Board, receive a quarterly report on the Housing Authority’s Housing Choice Voucher Program. This report is for informational purposes only and has no impact on the City's General Fund.

CONTACT: Danielle OConnell 916-774-5277 [email protected]

a. This is an informational item and requires no City Council action.

END OF CONSENT CALENDAR
VII. PRESENTATIONS/REPORTS

19. Council Discretionary Funds - Roseville Community Crime Stoppers (CITY MANAGER

DEPARTMENT - CITY MANAGER)
Summary: Staff recommends City Council consider providing sponsorship to Roseville Community Crime Stoppers for its annual Fourth of July Fun Run. The City Council has funded prior years' requests at $2,000. The balance remaining in the Council Discretionary Funds for FY2024-25 is $7,821.

CONTACT: Heather Blanco 916-746-1171 [email protected] The City Council will consider the recommendation to:

a. Consider providing sponsorship to Roseville Community Crime Stoppers for its annual Fourth of July Fun Run in the amount of $2,000.

20. Roseville Municipal Code Update - Revised Fine Schedule and Bail Schedule (CITY ATTORNEY

DEPARTMENT)
Summary: Staff recommends the City Council introduce for first reading an ordinance amending Chapters 1.20 and 2.50 of the Roseville Municipal Code regarding general penalties and administrative citations. Staff further recommends the City Council adopt a resolution, which shall be contingent upon and will only take effect if the ordinance amending Chapters 1.20 and

2.50 is fully adopted, establishing a new fine schedule and bail schedule, and repealing Resolution 24-114 and Resolution 24-159.

CONTACT: Travis Cochran 916-774-5325 [email protected] The City Council will consider the recommendation to:

a. Introduce for first reading an ordinance amending Chapters 1.20 and 2.50 of the Roseville Municipal Code regarding general penalties and administrative citations; and

b. Adopt Resolution No. 25-190 adopting a fine schedule and bail schedule for enforcement of municipal code violations and repealing resolutions 24-114 and 24-159.

VIII. PUBLIC HEARINGS
NOTICE TO THE PUBLIC: Public Hearing Process
City Council, when considering the matter, will take the following actions:

1. Open the Public Hearing

2. Presentation by staff

3. Presentation by applicant or appellant

4. Accept public testimony

5. Appellant or applicant rebuttal period

6. Close the Public Hearing

7. City Council comments and questions

8. City Council action
Any challenges in court about public hearing matters noticed on this agenda may be limited to only those issues, that were raised orally at the public hearing or in written form received by the City on or before the hearing.

Public Hearings listed for continuance will be continued and posting of this agenda will serve as notice of continuation.

21. Social Connection - 350 Conference Center Drive - Fee Deferral (ECONOMIC DEVELOPMENT

DEPARTMENT)
Summary: Staff recommends approval of a fee deferral for Social Connection, a restaurant/brewery container park with beer garden within the Roseville Junction development, in the amount of approximately $247,876, until final of building permit/building occupancy. An annual interest rate equivalent to the city's pooled interest rate, prorated based on the length of the deferral, will be charged on the monies deferred to cover the City's cost of loss of interest income on the fee deferrals and an administrative processing fee is to be charged to each building permit.

CONTACT: Gina McColl 916-774-5452 [email protected] The City Council will consider the recommendation to:

a. Adopt Resolution No. 25-183 approving a Fee Deferral for the Social Connection, 350 Conference Center Drive.

22. Roseville Municipal Code Updates - Zoning and Subdivision Ordinance (DEVELOPMENT

SERVICES - PLANNING)
Summary: Staff recommends the City Council introduce for first reading an Ordinance amending Chapters 19.08, 19.10, 19.12, 19.14, 19.22, 19.26, 19.28, 19.33, 19.60, 19.76, and 19.82 of the Roseville Municipal Code regarding Commercial, Residential, and Industrial Zones, Use Type Classifications, Accessory Uses, Parking Requirements, Density Bonus Regulations, Accessory Dwelling Units, Permit Requirements, and Major Project Permit Processing; introduce for first reading an Ordinance amending Chapter 18.05 of the Roseville Municipal Code regarding Ministerial Multifamily Maps; and adopt a resolution affirming the City's ministerial process for the approval of affordable housing projects.

CONTACT: Eric Singer 916-774-5536 [email protected] The City Council will consider the recommendation to:

a. Introduce for first reading an Ordinance amending Chapters 19.08, 19.10, 19.12, 19.14, 19.22,

19.26, 19.28, 19.33, 19.60, 19.76, and 19.82 of the Roseville Municipal Code regarding Commercial, Residential, and Industrial Zones, Use Type Classifications, Accessory Uses, Parking Requirements, Density Bonus Regulations, Accessory Dwelling Units, Permit Requirements, and Major Project Permit Processing; and

b. Introduce for first reading an Ordinance amending Chapter 18.05 of the Roseville Municipal Code regarding Ministerial Multifamily Maps; and

c. Adopt Resolution No. 25-187 of the City Council affirming the City's ministerial process for the approval of affordable housing projects.

IX. PUBLIC COMMENTS
This is the second opportunity to make a public comment on non-agenda items.

X. STAFF/COUNCIL REPORTS
XI. ADJOURNMENT

City Council
Communication
Meeting Date: 6/4/2025
Item #: VI.1
File #: 0800-03
Item ID: 2025-228

Title: Western System Power Pool Agreement Collateral Annex Contact: Glenn Hoffman 916-746-1670 [email protected]

SUMMARY
Staff recommends approval of the Western Systems Power Pool (WSPP) Collateral Annex, including the Cover Sheet Elections, with Altop Energy Trading LLC (“Altop”). These documents supplement the WSPP Agreement previously executed by the City and establish industry-standard credit and collateral provisions that would apply to any future wholesale physical power transactions with Altop under the WSPP framework. There is no cost associated with the execution of these documents.

RECOMMENDATION
Staff recommends that the City Council adopt a resolution authorizing the City Manager to execute the WSPP Collateral Annex and Cover Sheet Elections with Altop Energy Trading LLC.

BACKGROUND
Council approved updated Electric Utility Risk Management Policies in November 2024. These policies require Roseville Electric Utility to manage the financial risks associated with providing electricity by limiting cost exposure through the procurement of fixed-price electricity and natural gas over a three-year planning horizon.

Roseville Electric Utility has historically used the Western Systems Power Pool (WSPP) Agreement as its standard contractual framework for physical power transactions. The Collateral Annex and Cover Sheet Elections are standardized supplements to that agreement, used to define bilateral credit and collateral obligations with individual counterparties. These documents provide enhanced credit protections to the City by requiring the posting of collateral when exposure thresholds are exceeded or credit conditions change.

While both Roseville and Altop are WSPP signatories, they have not previously transacted under the WSPP framework. Executing the Collateral Annex and Cover Sheet Elections with Altop does not authorize any transactions but ensures credit protections are in place should Roseville elect to transact with Altop in the future.

Any such transactions will remain subject to the City’s Energy Trading Authority Policy (Resolution No. 24-367), approved by City Council on November 6, 2024.

FISCAL IMPACT
There is no fiscal impact associated with the execution of the WSPP Collateral Annex and Cover Sheet Elections with Altop Energy Trading LLC, as these documents serve as enabling agreements.

No transactions are currently pending between the parties under the WSPP framework. Any future transactions conducted under the agreement will be subject to the Roseville Electric Utility Energy Risk Management Policies and must comply with the Energy Trading Authority Policy.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Updates to the Energy Risk Policies are not considered a “project” as defined by CEQA and consequently no CEQA action is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

2. Remain fiscally responsible in a changing world

Respectfully Submitted,
Glenn Hoffman, Electric Resources Planner

Daniel Beans, Electric Utility Director

ATTACHMENTS:

1. Resolution 25-186

2. WSPP Collateral Annex with Altop Partially Executed

3. WSPP Collateral Annex Cover Sheet with Altop Partially Executed

4. WSPP Agreement

REVIEWERS:

Glenn Hoffman, Electric Department - Financial & Administrative Created/Initiated - 5/7/2025 Joanna Cucchi, Electric Department - Financial & Administrative Approved - 5/13/2025 Shawn Matchim, Electric Department - All Approved - 5/22/2025 Daniel Beans, Electric Department - All Approved - 5/22/2025 Gretchen Hakala, City Attorney Department Approved - 5/22/2025 Katrina Six, City Clerk Department Approved - 5/23/2025 Ryan DeVore, City Clerk Department Approved - 5/27/2025 Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 5/27/2025 Michelle Sheidenberger, City Attorney Department Approved - 5/27/2025 Dominick Casey, City Clerk Department Approved - 5/27/2025 Katrina Six, City Clerk Department Final Approval - 5/27/2025

RESOLUTION NO. 25-186

APPROVING THE WESTERN SYSTEMS POWER POOL COLLATERAL ANNEX AND

COVER SHEET ELECTIONS, BY AND BETWEEN THE CITY OF ROSEVILLE AND

ALTOP ENERGY TRADING, LLC, AND AUTHORIZING THE CITY MANAGER TO

EXECUTE THEM ON BEHALF OF THE CITY OF ROSEVILLE
WHEREAS, Roseville Electric Utility has historically used the Western Systems Power Pool (WSPP) Agreement as its standard contractual framework for physical power transactions; and
WHEREAS, the Collateral Annex and Cover Sheet Elections are standardized supplements to that agreement, used to define bilateral credit and collateral obligations with individual counterparties; and
WHEREAS, the Collateral Annex and Cover Sheet Elections to the WSPP Agreement, have been reviewed by the City Council.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said Western Systems Power Pool Collateral Annex and Cover Sheet Elections are hereby approved and that the City Manager is authorized to execute them on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
______________________________
MAYOR
ATTEST:
________________________
City Clerk

Revision November 30, 2009
1 COLLATERAL ANNEX
to the

WSPP AGREEMENT

This Collateral Annex to the WSPP Agreement together with the Cover Sheet Elections (collectively, the “Collateral Annex”), between City of Roseville (“Party A”) and Altop Energy Trading LLC (“Party B”) (each a “Party” and, collectively, the “Parties”), is applicable to all transactions between the Parties conducted under the WSPP Agreement, including any amendments and annexes thereto agreed between the Parties (collectively, the “WSPP Agreement”).

The Obligations of each Party to the other Party under the WSPP Agreement shall be secured in accordance with the provisions of this Collateral Annex, which sets forth the conditions under which a Party will be required to deliver Performance Assurance and the conditions under which a Party will be required to release and return Performance Assurance.

To the extent there are any inconsistencies between the terms and conditions of the WSPP Agreement and this Collateral Annex, this Collateral Annex shall prevail. To the extent there are any inconsistencies between the terms and conditions of this Collateral Annex, excluding the Cover Sheet Elections, and the Cover Sheet Elections, the Cover Sheet Elections shall prevail.

1. Definitions.

For purposes of this Collateral Annex, the following terms have the meanings set forth below or in the provisions referred to below:
“Beneficiary Party” means, at any time, the Party entitled to receive, or that has received and is the beneficiary of, Performance Assurance provided by, or on behalf of, the Posting Party.
“Business Day(s)” has the meaning stated in section 4.1b of the WSPP Agreement. “Cash” means U.S. dollars held by, or on behalf of, a Party as Performance Assurance and which shall be, for purposes of obtaining and perfecting a security interest hereunder, treated as “money” as defined in the UCC.
“Custodial Bank ” means a Qualified Institution that has executed a Deposit Account Agreement.
“Collateral Annex” has the meaning stated in the introductory paragraph of this Collateral Annex.
“Collateral Threshold” means, with respect to a Party, the collateral threshold, if any, set forth in Part I of the Cover Sheet Elections for that Party, or if no amount is set forth for such Party, such amount shall be zero (0).
“Credit Rating ” means, with respect to an entity other than a Qualified Institution, but including, as applicable, a Party or its Guarantor, as the case may be, on any date of determination: (a) the rating then assigned to such entity’s (i) unsecured debt (such debt not supported by third-party credit enhancement) or (ii) if such rating in clause (i) is unavailable, its corporate credit rating, in each case as issued by Standard & Poor’s (“S&P”), Moody’s Investors

2 Service (“Moody’s”), or Fitch, Inc. (“Fitch”) or other rating agency or agencies to which the Parties may agree in writing, or (b) other such rating to which the Parties may agree in writing, and as further defined or described by the Parties in the Cover Sheet Elections. With respect to a Qualified Institution, “Credit Rating” refers to the ratings issued to the applicable commercial bank or trust company by S&P or Moody’s. “S&P,” “Moody’s” and “Fitch” each includes its successors.
“Collateral Requirement” has the meaning stated in Section 4(c) of this Collateral Annex. “Dealer” has the meaning stated in Section 4.2b of the WSPP Agreement except that no Party or any parent, subsidiary, or other affiliate of a Party shall be a Dealer for purposes of this Collateral Annex.
“Demand Notice” has the meaning given in Section 4(a) hereof. “Deposit Account ” means a demand, time, savings, passbook or similar account maintained with a Qualified Institution and subject to a Deposit Account Agreement, which Deposit Account shall, for purposes of obtaining and perfecting a security interest hereunder, be a “deposit account” as defined in UCC § 9-102.

“Deposit Account Agreement” is an agreement, executed by the Parties and a Custodial Bank with which the Deposit Account is or will be maintained under this Agreement, that provides the Beneficiary Party with control of the Deposit Account within the meaning of UCC § 9-104.

“Defaulting Party” has the meaning stated in Section 22.1 of the WSPP Agreement.

“Downgrade Event” has the meaning stated in Section 6(a)(iv) of this Collateral Annex.

“Downgraded Party” has the meaning stated in Section 6(a)(iv) of this Collateral Annex.

“Early Termination” means a termination of one or more transactions in accordance with Section 22.2 of the WSPP Agreement due to an Event of Default.

“Eligible Beneficiary Party ” has the meaning stated in Section 6(a)(i) of this Collateral Annex.

“Event of Default ” has the meaning stated in Section 22.1 of the WSPP Agreement as modified by Section 3 of this Collateral Annex.

“Guarantor” has the meaning stated in Section 4.7e of the WSPP Agreement and is the entity, if any, identified in Part I of the Cover Sheet Elections.

“Interest Rate” has the meaning stated in Part VI of the Cover Sheet Elections.

“LC Issuer” means (a) an entity having a capital surplus of at least one billion United States dollars ($1,000,000,000.00) and having a Credit Rating of at least (i) “A -” by S&P and “A3” by Moody’s, if such entity is rated by S&P and Moody’s, or (ii) “A -” by S&P or “A3” by Moody’s, if such entity is rated by either S&P or Moody’s, but not both, or (b) any other entity to which the Parties agree in the Cover Sheet Elections or otherwise in writing, provided, that the

3 Parties may agree to another definition of LC Issuer in Part VII of the Cover Sheet Elections or otherwise in writing, which other definition shall supercede the foregoing. “Letter of Credit” means an irrevocable, non-transferable, standby letter of credit, issued by a LC Issuer in a form consistent with the Parties’ agreements stated in Part VII of the Cover Sheet Elections and which letter of credit is otherwise reasonably acceptable to the Beneficiary Party.

“Letter of Credit Default” means with respect to an outstanding Letter of Credit and prior to the time such Letter of Credit is required to be canceled or returned to a Party in accordance with the terms of this Collateral Annex, the occurrence of any of the following events: (a) the issuer of the Letter of Credit has failed to satisfy the criteria of a LC Issuer under this Collateral Annex, the Cover Sheet Elections, or other agreements of the Parties, as applicable; (b) the LC Issuer has failed to comply with or perform its obligations under such Letter of Credit, including, but not limited to a failure to comply with a request to draw thereon in accordance with its terms; (c) the LC Issuer has disaffirmed, disclaimed, repudiated or rejected, in whole or in part, or challenged the validity of, such Letter of Credit; (d) such Letter of Credit has expired or terminated, or has failed or ceased to be in full force and effect at any time during the term of any transaction under the WSPP Agreement for which Performance Assurance is required to be kept in full force and effect hereunder, in any such case without replacement within three (3) Business Days following the date such Letter of Credit expired, terminated or failed or ceased to be in full force and effect; (e) the LC Issuer has initiated or become subject to, or any other party has initiated against LC Issuer (i) a bankruptcy, reorganization, moratorium, liquidation or similar insolvency proceeding under federal or state law, (ii) a similar proceeding for relief under any federal or state bankruptcy or insolvency law affecting creditor’s rights, or (iii) a proceeding to liquidate or wind -up the business or affairs of the LC Issuer; (f) the LC Issuer makes an assignment for the benefit of creditors; or (g) the LC Issuer admits in writing its inability to pay its debts generally as they become due.

“Material Adverse Change” has the meaning stated, for the applicable Party, in Part II of the Cover Sheet Elections.

“Minimum Transfer Amount” means, with respect to a Party, the amount set forth in Part IV of the Cover Sheet Elections for such Party, or if no amount is filled in for such Party, such amount shall be zero (0).

“Non-Performing Party ” has the meaning stated in Section 21.3 of the WSPP Agreement.

“Obligations” means, with respect to a Posting Party (a) all debts, liabilities and amounts due or that may become due from the Posting Party to the Beneficiary Party pursuant to (i) the WSPP Agreement, (ii) all outstanding Confirmation Agreements between the Parties under the WSPP Agreement, (iii) this Collateral Annex, (iv) any Security Agreement and (v) any other documents, instruments or agreements executed in connection therewith; and (b) all amounts owed under any modifications, renewals or extensions of the foregoing.

“Party” and “Parties” have the respective meanings stated in the introductory paragraph of this Collateral Annex.

“Performance Assurance ” means collateral in the form of (i) Cash (whether posted directly with a Beneficiary Party or the Custodial Bank in a Deposit Account, (ii) a Letter of

4 Credit, or (iii) other security in form and subject to terms and conditions that are acceptable to the Beneficiary Party in its sole and absolute discretion. Interest payments on Cash held by a Beneficiary Party will constitute Performance Assurance in the form of Cash. Interest payments on Cash deposited into or otherwise held in a Deposit Account with a Custodial Bank will constitute a part of the Deposit Account held as Performance Assurance. For all purposes hereunder, Performance Assurance in the form of Cash is a margin payment within the meaning of the Bankruptcy Code, 11 U.S.C. § 101 et seq., including but not limited to sections 101(38), 362(b)(6), 546(e), 548(d), and 556 thereof.

“Posting Deadline” has the meaning given in Part VI of the Cover Sheet Elections. “Posting Party ” means, at any time, the Party required to post, or that has posted, Performance Assurance to, or for the benefit of, the Beneficiary Party. “Potential Event of Default” means an event which, (a) with the giving of notice required under Section 22.1 of the WSPP Agreement, if any is required, and (b) the failure to remedy or cure under Section 22.1 of the WSPP Agreement, if remedy or cure is permitted, or both (a) and (b), would be an Event of Default.
“Qualified Institution” means (a) a commercial bank or trust company organized under the laws of the United States or Canada or a political subdivision thereof having a capital surplus of at least one billion United States dollars ($1,000,000,000.00) and having a Credit Rating of at least (i) “A -” by S&P and “A3” by Moody’s, if such entity is rated by S&P and Moody’s or (ii) “A-” by S&P or “A3” by Moody’s, if such entity is rated by either S&P or Moody’s, but not both, or (b) any other commercial bank or trust company, or other entity, to which the Parties agree in writing.

“Reduction Deadline” has the meaning given in Part VI of the Cover Sheet Elections.

“Replacement Letter of Credit” has the meaning given in Section 6(c) hereof.

“Replacement Performance Assurance” has the meaning given in Section 6(c) hereof.

“Rounding Amount” means, with respect to a Party, the amount, set forth in the Cover Sheet Elections for such Party, or if no amount is filled in for such Party, such amount shall be zero (0).

“Security Agreement” means a Security Agreement, which may be in the form attached hereto, applicable to Performance Assurance in a form other than Cash or a Letter of Credit.

“Termination Date” means the date on which the Beneficiary Party shall have received full and final payment of all of the Obligations.

“Termination Payment” means, for purposes of this Collateral Annex, the Termination Payment calculated under Section 22.3 of the WSPP Agreement.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of Utah, without regard to the conflicts of laws rules thereof, except to the extent that the perfection, the effect of perfection or nonperfection and the priority of the security interest granted hereunder, or remedies hereunder, are governed by the law of any jurisdiction other

5 than the State of Utah, the term UCC shall mean the Uniform Commercial Code of such other jurisdiction as necessary to give complete effect to this Collateral Annex.

“WSPP Agreement ” has the meaning stated in the introductory paragraph of this Collateral Annex.

2. Encumbrance; Grant of Security Interest.

(a) As security for the prompt and complete payment and performance when due of a Party’s Obligations now existing or hereafter arising, each Party hereby pledges, assigns, conveys and transfers to the other Party, and hereby grants to the other Party, a present and continuing security interest in and to, and a general first lien upon and right of set off against, all Performance Assurance which has been or may in the future be transferred to, or received by, the other Party or a Custodial Bank, for the benefit of such other Party, and all interest and other proceeds from time to time received or receivable in respect of, or in exchange for, any or all of the foregoing. Each Party agrees to take such action as the other Party reasonably requests in order to create and perfect the other Party’s continuing security interest in, lien on, and right of setoff against, such Performance Assurance.

(b) The security interest created hereunder shall (i) remain in full force and effect until the security interest granted hereby is terminated in accordance with the second sentence of this Section 2(b), (ii) be binding upon the Posting Party, its successors and assigns and (iii) inure to the benefit of the Beneficiary Party and its successors, transferees and assigns. On the Termination Date, the security interest granted hereunder shall terminate and all rights to the Performance Assurance shall revert to the Posting Party. Upon such termination, the Beneficiary Party shall return all Performance Assurance in its possession or otherwise under its control to the Posting Party pursuant to Section 5(b) of this Collateral Annex and, at the Posting Party’s expense, execute and deliver to the Posting Party such documents as the Posting Party shall reasonably request to evidence termination of the security interest.

(c) The security interest created hereunder is in addition to, and not in lieu of, any and all remedies that may be available under the WSPP Agreement.

(d) In the event a Party claims in any judicial proceeding that the grant set forth in Section 2(a) of this Collateral Annex is ineffective and fails to prevail on the claim, then that Party shall pay the other Party’s reasonable attorneys fees incurred in defending against the claim.

3. Additional Events of Default.

The following event is added as an additional Event of Default under Section 22.1 of the WSPP Agreement and is incorporated therein for all purposes under this Collateral Annex:

(f) A Party fails to establish, maintain, transfer or extend Performance Assurance, or return Excess Performance Assurance, in any such case when required pursuant to the Parties’ Collateral Annex.

6 4. Collateral Requirement.

(a) From time to time, on any Business Day prior to 1 p.m. New York time (but no more than once daily), the Beneficiary Party may demand by notice (each a “Demand Notice”) that the Posting Party transfer Performance Assurance to or for the benefit of the Beneficiary Party, in an amount no less than the Collateral Requirement, provided that both conditions (i) and (ii) of this Section 4(a) are satisfied.

(i) No Event of Default has occurred and is continuing where the Beneficiary Party is the Defaulting Party and no Potential Event of Default exists where the Beneficiary Party is the potentially Defaulting Party;

(ii) No Early Termination has occurred or been designated with respect to such Beneficiary Party.

(b) After receiving a Demand Notice from the Beneficiary Party pursuant to Section 4(a) of this Collateral Annex, the Posting Party shall, by the Posting Deadline, transfer, or cause to be transferred to the Beneficiary Party or a Custodial Bank, as the case may be, Performance Assurance to, or for the benefit of, the Beneficiary Party, in an amount no less than the Collateral Requirement as defined in Section 4(c) of this Collateral Annex, provided, however, that a Posting Party shall not have an obligation to transfer Performance Assurance until the Collateral Requirement exceeds the Minimum Transfer Amount, at which time the Posting Party shall transfer the entire amount of the Collateral Requirement to the Beneficiary Party, and provided further, that if under this Collateral Annex each Party has an obligation to maintain Performance Assurance with respect to the other Party, the Parties’ obligations to transfer Performance Assurance hereunder, including obligations to return Excess Performance Assurance under Section 5 of this Collateral Annex, at any time shall be determined on a net basis, and the Party with a net positive transfer obligation shall transfer Performance Assurance under this Section 4 in such amount.

(c) The “ Collateral Requirement ” is the amount calculated, as of the date of the Demand Notice, rounded up to the nearest integral multiple of the Rounding Amount, which is equal to (x) less (y), but no less than zero, where:

(x) is

the Termination Payment, if any, that would be owed to the Beneficiary Party if the Posting Party were the Defaulting Party under Section 22.1 of the WSPP Agreement, plus

the damages, if any, solely under Section 21.3 of the WSPP Agreement that would be owed to the Beneficiary Party if the Posting Party were the Non-Performing Party, plus

any further and additional amounts due for rendered performance by the Beneficiary Party to the Posting Party under any WSPP Agreement transactions, whether or not invoiced or due, and

7 (y) is

the amount of Performance Assurance previously provided by or otherwise credited to the Posting Party for the benefit of the Beneficiary Party and not released as of the time the Beneficiary Party made the demand plus

the Collateral Threshold applicable to the Posting Party.

(d) Any Letter of Credit shall be delivered to such address as the Beneficiary Party shall specify and any such demand made by the Beneficiary Party under this Section 4 shall specify account information for the account to which Performance Assurance in the form of Cash shall be delivered.

5. Reduction, Return, and Substitution of Performance Assurance.

(a) Reduction of Performance Assurance. From time to time, on any Business Day prior to 1 p.m. New York time (but no more than weekly with respect to Letters of Credit and daily with respect to Cash or a Deposit Account with the Custodial Bank), a Posting Party may demand that the Beneficiary Party reduce Performance Assurance in an amount equal to the Excess Performance Assurance as defined in this Section, provided, that the Posting Party shall not have any right to demand such reduction if on or prior to such Business Day, an Event of Default has occurred and is continuing where the Posting Party is the Defaulting Party, a Potential Event of Default exists where the Posting Party is the potentially Defaulting Party, or an Early Termination has occurred or been designated with respect to such Posting Party for which the Posting Party has not satisfied its Obligations. The Beneficiary Party shall comply with the demand by transferring, or causing the transfer of, Cash to the Posting Party or reducing the amount(s) of outstanding Letter(s) of Credit the Posting Party previously posted, provided, however, that a Beneficiary Party shall not have an obligation to transfer or cause the transfer of Excess Performance Assurance until the Excess Performance Assurance exceeds the Minimum Transfer Amount, at which time the Posting Party shall transfer the entire amount of the Excess Performance Assurance to the Posting Party. The Posting Party shall have the right to specify such means of compliance, provided, that it may specify Cash only to the extent that Excess Performance Assurance is in the form of Cash held by the Beneficiary Party or a Custodial Bank. If Excess Performance Assurance is returned by reducing the face amount of an outstanding Letter of Credit and the LC Issuer requires that the reduction be implemented through a cancellation of the existing Letter of Credit and the issuance of a new Letter of Credit with a reduced face amount, then (1) the Posting Party shall have delivered a new Letter of Credit to the Beneficiary Party in a form reasonably acceptable to the Beneficiary Party and in an amount that, when combined with the remaining amount of the then -current Performance Assurance, is not less than the then - current Collateral Requirement, and (2) in the event that an Event of Default occurs, as to which the Posting Party is the defaulting Party, between the Reduction Deadline and the date on which the new Letter of Credit is executed and delivered to the Beneficiary Party, the Beneficiary Party shall be entitled to draw from the existing Letter of Credit only an amount up to but not exceeding

8 the then-current Collateral Requirement. The cost and expense of compliance (including, but not limited to, the reasonable costs, expenses, and attorneys’ fees of the Beneficiary Party and, if applicable, the LC Issuer or Custodial Bank) shall be the sole obligation of, and paid directly by, the Posting Party. If the Beneficiary Party pays any such cost or expense, the Posting Party shall reimburse the Beneficiary Party for each such cost and expense promptly following a demand for reimbursement. The Beneficiary Party shall comply with the demand on or before the Reduction Deadline. Any such demand made by the Posting Party under this Section 5(a) shall specify account information for the account to which Excess Performance Assurance in the form of Cash shall be delivered.

“Excess Performance Assurance” is an amount, calculated as of the date of the demand and rounded down to the nearest integral multiple of the Rounding Amount, which is equal to (x) less (y), but no less than zero, where:

(x) is

the amount of Performance Assurance previously provided by or credited to the Posting Party for the benefit of the Beneficiary Party and not released as of the time the Posting Party made the demand, plus

the Collateral Threshold applicable to the Posting Party.

(y) is

the Termination Payment, if any, that would be owed to the Beneficiary Party if the Posting Party were the Defaulting Party under Section 22.1 of the WSPP Agreement, plus

the damages, if any, solely under Section 21.3 of the WSPP Agreement that would be owed to the Beneficiary Party if the Posting Party were the Non-Performing Party, plus

any further and additional amounts due for rendered performance by the Beneficiary Party to the Posting Party under any WSPP Agreement transactions, whether or not invoiced or due.

The foregoing notwithstanding, if under this Collateral Annex each Party has an obligation to maintain Performance Assurance with respect to the other Party, the Parties’ obligations to transfer Performance Assurance hereunder, including obligations to post Performance Assurance under Section 4 of this Collateral Annex, at any time shall be determined on a net basis, and the Party with a net positive transfer obligation shall transfer Performance Assurance under this Section 5(a) in such amount.

(b) Return of All Performance Assurance. No later than one (1) Business Day after the last to occur of (i) the Termination Date, and (ii) (A) completion of all outstanding transactions between the Parties under the WSPP Agreement or (B) if all such outstanding transactions have not been completed, then payment by

9 the Posting Party of all amounts due to the Beneficiary Party under Sections 21 and 22 of the WSPP Agreement with respect to uncompleted transactions, the Beneficiary Party shall return all outstanding Performance Assurance to the Posting Party less any amounts applied to the satisfaction of any of the Posting Party’s Obligations.

(c) Substitution of Performance Assurance. Unless (i) an Event of Default has occurred and is continuing where the Posting Party is the Defaulting Party, (ii) a Potential Event of Default exists where the Posting Party is the potentially Defaulting Party, or (iii) an Early Termination has occurred or been designated with respect to the Posting Party pursuant to which the Posting Party has not satisfied all Obligations, the Posting Party may substitute Performance Assurance for existing Performance Assurance of equal value. The Posting Party must give notice of the substitution to the Beneficiary Party two (2) Business Days before the substitution is intended to occur no later than 5 p.m.

New York time. The notice must specify whether the substitute Performance Assurance is Cash or a Letter of Credit and if the latter it shall include a draft thereof. If the substitute Performance Assurance is Cash or a Letter of Credit (in form consistent with this Collateral Annex), then the Posting Party may effect the substitution no earlier than two, and no later than five (5), Business Days after giving such notice. If the substitute Performance Assurance is not Cash or a Letter of Credit (in form consistent with this Collateral Annex), the substitution shall not be made unless the Beneficiary Party consents in writing thereto. No later than one Business Day after the Beneficiary Party receives substitute Performance Assurance in accordance with this Section, the Beneficiary Party shall transfer the Performance Assurance that has been replaced to the Posting Party. Notwithstanding anything herein to the contrary, no such substitution shall be permitted unless after giving effect to such substitution, the value of such substitute Performance Assurance shall equal the greater of the Posting Party’s Collateral Requirement or the Posting Party’s Minimum Transfer Amount. The substituted Performance Assurance shall be subject to and governed by the terms and conditions of this Collateral Annex.

6. Administration of Performance Assurance.

(a) Cash held by Beneficiary Party.
(i) Conditions Under Which A Beneficiary Party Is Entitled To Hold Cash. A Beneficiary Party shall be an “ Eligible Beneficiary Party ” entitled to hold Performance Assurance in the form of Cash if, and for only so long as, all of the following conditions (w), (x), (y) and (z) are satisfied:

(w) The Parties have agreed in the Cover Sheet Elections or otherwise in writing that the Beneficiary Party may hold Performance Assurance in the form of Cash.

(x) If the Cover Sheet Elections permit the Posting Party unilaterally to rescind the Parties’ agreement that the Beneficiary Party shall be entitled to hold Performance Assurance in the form of Cash, the Posting Party has not rescinded such agreement.

10 (y) A Material Adverse Change with respect to the Beneficiary Party has not occurred.

(z) The Beneficiary Party, the Posting Party, and a Custodial Bank have executed a Deposit Account Agreement, provided, that the Beneficiary Party is not required to place any Performance Assurance in the form of Cash in the Custodial Bank under such agreement except in the event of a cessation of Eligible Beneficiary Party status under Section 6(a)(iv) of this Collateral Annex.
(ii) Eligible Beneficiary Party’s Use Of Cash. An Eligible Beneficiary Party shall be entitled to hold Performance Assurance in the form of Cash in any accounts it holds in the United States, and, notwithstanding anything to the contrary in UCC § 9-207, an Eligible Beneficiary Party shall also have the right to sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise use in its business any Cash that it holds as Performance Assurance hereunder, free from any claim or right of any nature whatsoever of the Posting Party except for the Posting Party’s rights under (A) Section 5(a), (b), and (c) of this Collateral Annex (reduction, return or substitution of Performance Assurance), (B) Section 6(a)(iv) (cessation of Eligible Beneficiary Party status), and (C) Section 8 of this Collateral Annex (Event of Default or Early Termination). (iii) Appointment of Agent. The Eligible Beneficiary Party may, but is not required, to appoint an agent to hold Performance Assurance in the form of Cash on its behalf and to receive additional Performance Assurance. In the event an Eligible Beneficiary Party makes such an appointment, it must give notice to the Posting Party including the identity and address of the agent, no later than one (1) Business Day after the deposit. Upon the receipt of such notice, the Posting Party’s obligations to make any transfer will be discharged by making the transfer to the agent. The Eligible Beneficiary Party may use Cash held by an agent in accordance with Section 6(a)(ii) of this Collateral Annex, subject to the Posting Party’s rights referred to therein.
(iv) Cessation Of Eligible Beneficiary Party Status. The Beneficiary Party shall cease to be an Eligible Beneficiary Party immediately upon the failure of any one of conditions (w), (x), (y) or (z) of Section 6(a)(i) at any time (each a “Downgrade Event”), and thereafter such Beneficiary Party shall be considered a “Downgraded Party.” Failure of (x) shall occur upon the Posting Party’s giving notice to the Beneficiary Party of its rescission of the Parties’ agreement that the Beneficiary Party shall be entitled to hold Performance Assurance in the form of Cash. A Downgraded Party shall transfer, or cause its agent to transfer, no later than the close of the next Business Day following the occurrence of the Downgrade Event, all Performance Assurance in the form of Cash to the Custodial Bank and all such Cash shall be maintained in a Deposit Account in accordance with Section 6(b) of this Collateral Annex and the terms and conditions of the Deposit Account Agreement. Upon the occurrence of a Downgrade Event, Section 6(a)(ii) concerning the Eligible Beneficiary Party’s rights to use Cash shall cease to apply. After the occurrence of a Downgrade Event, a Downgraded Party shall not become an Eligible Beneficiary Party except upon the written agreement of the Posting Party. Nothing in this Section

11 6(a) shall diminish the Posting Party’s rights under Section 8 of this Collateral Annex.
(v) Interest Payments On Cash . So long as no (i) Event of Default has occurred and is continuing where the Posting Party is the Defaulting Party or (ii) no Early Termination has occurred or been designated with respect to the Posting Party pursuant to which the Posting Party has not satisfied all of its Obligations, then, the Eligible Beneficiary Party will pay to the Posting Party, in lieu of any other amounts paid, earned, or deemed to have been paid or earned, with respect to such Cash (all of which may be retained by the Eligible Beneficiary Party), interest in amounts calculated in accordance with the Interest Rate. The Posting Party shall submit an invoice to the Beneficiary Party on the first Business Day of each month for interest due for the prior month, and shall set forth such calculation therein. The Eligible Beneficiary Party shall make payment thereof of any interest due to the Posting Party by the later of the next Business Day after submittal of the invoice. The Beneficiary Party shall determine in its sole discretion whether the method of payment shall be (a) an increase in the Performance Assurance credited to the Posting Party in an amount equal to any interest due, or (b) a transfer of funds to the Posting Party equal to any interest due.
(b) Cash Held By Custodial Bank.
(i) Conditions Under Which Cash Shall Be Held By Custodial Bank. The Custodial Bank shall hold Performance Assurance in the form of Cash if either of the following conditions is satisfied:

(x) The Parties have not agreed in the Cover Sheet Elections or otherwise in writing that the Beneficiary Party may hold Performance Assurance in the form of Cash.

(y) A Downgrade Event has occurred such that an Eligible Beneficiary Party has become a Downgraded Party.
(ii) Use Of Cash. In the event the Custodial Bank holds Performance Assurance in the form of Cash under this Section 6(b), the Beneficiary Party shall have no right to use or receive Performance Assurance in the form of Cash held by the Custodial Bank except, if an Event of Default has occurred where the Posting Party is the Defaulting Party or an Early Termination has occurred or been designated with respect to such Posting Party for which the Posting Party has not satisfied Obligations, then the Beneficiary Party shall have a right to receive Cash in payment of the Posting Party’s Obligations. The Custodial Bank shall hold and disburse Performance Assurance in the form of Cash in accordance with the terms of this Collateral Annex and for the security interest and benefit of the Beneficiary Party and, subject solely to such security interest, for the ownership of the Posting Party. Performance Assurance in the form of Cash shall be held in a Deposit Account (A) designated for the ownership of the Posting Party, (B) controlled by the Beneficiary Party in accordance with the terms of the Deposit Account Agreement, and (C) designated for the security interest and benefit of the Beneficiary Party under this Collateral Annex and the Deposit Account Agreement.

12 (iii) Interest Payments On Cash . So long as no (i) Event of Default has occurred and is continuing where the Posting Party is the Defaulting Party and (ii) no Early Termination has occurred or been designated with respect to such Posting Party for which the Posting Party has not satisfied Obligations, then, the Custodial Bank, on behalf of the Beneficiary Party will pay to the Posting Party, in lieu of any other amounts paid, earned, or deemed to have been paid or earned, with respect to such Cash, interest in amounts calculated and paid in accordance with the Deposit Account Agreement or otherwise agreed by the Custodial Bank and Parties in writing. Payment shall be made by increasing the Performance Assurance credited to the Posting Party in an amount equal to any interest due, unless the Beneficiary Party instructs the Custodial Bank to make payment by transferring funds to the Posting Party in an amount equal to any interest due. (iv) Other Conditions. All terms and conditions stated in the Deposit Account Agreement as they apply to the Parties are incorporated into this Collateral Annex.

(c) Letters of Credit . Performance Assurance provided in the form of a Letter of Credit shall be subject to the following provisions, provided, that nothing in this Section 6(c) is intended to modify any terms and conditions contained in any Letter of Credit that apply to draws thereon and it is recognized that the Parties may agree to additional terms and conditions not stated herein. (i) The Posting Party shall maintain for the benefit of the Beneficiary Party any Letter of Credit provided as Performance Assurance in accordance with Section 4 of this Collateral Annex. The Posting Party shall (a) renew or cause the renewal of each outstanding Letter of Credit not less than twenty (20) Business Days prior to its expiration in accordance with the terms contained in the applicable Letter of Credit, (b) if the LC Issuer has indicated its intent not to renew such Letter of Credit, provide either (1) a Letter of Credit issued by a Qualified Institution in the same face amount and on substantially the same terms as the outstanding Letter of Credit (each, a “Replacement Letter of Credit”) or (2) Performance Assurance in the form of Cash equal to the face amount of such outstanding Letter of Credit in a form acceptable to the Beneficiary Party (“Replacement Performance Assurance”), in each case at least twenty (20) Business Days prior to the expiration of the applicable Letter of Credit, and (c) if the LC Issuer shall fail to honor the Beneficiary Party’s request to draw on an outstanding Letter of Credit in accordance with the terms thereof, provide for the benefit of the Beneficiary Party either (1) a Replacement Letter of Credit or (2) Replacement Performance Assurance, in each case within one (1) Business Day after such refusal, provided, that, as a result of the Posting Party’s failure to perform in accordance with (a), (b), or (c) above, the Posting Party’s Collateral Requirement would be greater than zero. The foregoing notwithstanding, the Beneficiary Party may reject a Replacement Letter of Credit that conforms to the requirements of this Section if in the Beneficiary Party’s sole discretion acceptance of additional credit from the applicable LC Issuer would be an unacceptable credit risk due to other commitments it had accepted from such LC Issuer, provided, that in the event of such rejection, the Beneficiary Party shall pay any costs incurred by the Posting Party in obtaining a Replacement Letter of Credit from a different LC Issuer. Rejection of a Replacement Letter of Credit under the immediately prior sentence shall not relieve a Posting Party of its

13 obligations to maintain adequate Performance Assurance at all times under this Collateral Annex.
(ii) Upon the occurrence of a Letter of Credit Default, the Posting Party shall deliver to the Beneficiary Party either a Replacement Letter of Credit or Replacement Performance Assurance, in each case on or before the first Business Day after the occurrence thereof (or the fifth (5th) Business Day after the occurrence thereof if only clause (a) under the definition of Letter of Credit Default applies), in such amounts that on the day such Replacement Letter of Credit or Replacement Performance Assurance is provided the Collateral Requirement is zero.
(iii) Upon or at any time after the occurrence of an Event of Default that is continuing where the Posting Party is the Defaulting Party, or if an Early Termination has occurred or been designated with respect to the Posting Party pursuant to which the Posting Party has not satisfied all of its Obligations, then the Beneficiary Party may draw on the entire, undrawn portion of any outstanding Letter of Credit in accordance with its terms. Notwithstanding the Beneficiary Party’s receipt of Cash under the Letter of Credit, the Posting Party shall remain liable for any failure to transfer sufficient Performance Assurance and for any Obligations owing to the Beneficiary Party and remaining unpaid after the application of the amounts so drawn by the Beneficiary Party. (iv) In all cases, the costs and expenses (including but not limited to the reasonable costs, expenses, and attorneys’ fees of the Beneficiary Party) of establishing, renewing, substituting, reissuing, canceling, and increasing the face amount of (as the case may be) a Letter of Credit shall be paid by the Posting Party, or if paid by the Beneficiary Party, promptly reimbursed by the Posting Party following the Beneficiary Party’s demand for reimbursement.

(d) Performance Assurance in Forms Other than Cash or Letters of Credit . The Parties may agree that a Party may provide Performance Assurance in forms other than Cash or Letters of Credit, and may agree to additional terms and conditions respecting such Performance Assurance.

(e) Care of Performance Assurance . Except for duties to comply with all requirements concerning Performance Assurance stated herein, the Beneficiary Party shall have no duty as to any Performance Assurance in its possession or control or in the possession or control of any Custodial Bank or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Eligible Beneficiary Party shall not be liable or responsible for any diminution in the value of Performance Assurance by reason of the act or omission of a Custodial Bank. Unless held by a Custodial Bank and except as required under Section 6(a)(iv) of this Collateral Annex, the Beneficiary Party, or its agent appointed under Section 6(a)(iii), shall at all times retain possession or control of Performance Assurance delivered to it. To the extent if any that this Section 6(e) is inconsistent with UCC § 9-207, this Section 6(e) shall control.

7. Beneficiary Party’s Exercise of Rights Concerning Performance Assurance.

(a) In the event that (x) an Event of Default has occurred and is continuing where the

14 Posting Party is the Defaulting Party or (y) an Early Termination has occurred or been designated with respect to the Posting Party for which the Posting Party has not satisfied all of its Obligations, the Beneficiary Party may exercise any one or more of the rights and remedies provided under the WSPP Agreement, under this Collateral Annex or as otherwise may be available under applicable law.

Without limiting the foregoing, if at any time (x) or (y) has occurred, then the Beneficiary Party may, in its sole discretion, declare all Obligations immediately due and payable without presentment, demand, notice, protest or other formalities of any kind (all of which are hereby expressly waived by the Posting Party) and exercise any one or more of the following rights and remedies:
(i) All rights and remedies available to the Beneficiary Party under UCC Article 9 or the uniform commercial code of any jurisdiction in which the Performance Assurance is being held and any other applicable jurisdiction and other applicable laws with respect to the preservation of or foreclosure upon collateral.
(ii) The right to set off any Performance Assurance held by or for the benefit of the Beneficiary Party against and in satisfaction of any amount payable by the Posting Party in respect of any of its Obligations.
(iii) The right to draw the full undrawn face amount of each outstanding Letter of Credit issued for its benefit.
(iv) The right to instruct the Custodial Bank to transfer all Performance Assurance held in a Deposit Account to an account of the Beneficiary Party or otherwise to or for the benefit of the Beneficiary Party. (v) The right to liquidate any Performance Assurance held by or for the benefit of the Beneficiary Party, free from any claim or right of any nature whatsoever of the Posting Party, and to apply the proceeds received following the exercise of the rights and remedies set forth above as follows (A) first, to the payment of (1) all costs and expenses relating to the sale of any Performance Assurance and collection of amounts owing hereunder, including reasonable attorneys’ fees and disbursements and the just compensation of the Beneficiary Party for services rendered in connection therewith or in connection with any proceeding to sell if a sale is not completed, and (2) all charges, expenses and advances incurred or made by the Beneficiary Party in order to protect the lien provided under this Collateral Annex; (B) second, to the payment in full of all of the Obligations owed to the Beneficiary Party hereunder in such order as the Beneficiary Party may elect; and (C) third, the balance, if any, shall be paid to the Posting Party.

(b) The Posting Party hereby irrevocably constitutes and appoints the Beneficiary Party and any officer or agent thereof, with full power of substitution, as the Posting Party’s true and lawful attorney -in-fact (which appointment shall be coupled with an interest) with full irrevocable power and authority to act in the name, place and stead of the Posting Party or in the Beneficiary Party’s own name, from time to time in the Beneficiary Party’s discretion, solely for the purpose of taking any and all action and executing and delivering any and all

15 documents or instruments which may be necessary or desirable to accomplish the purposes of Section 7(a). Notwithstanding the foregoing, the Beneficiary Party shall not be obligated to exercise any right or duty as attorney -in-fact, and shall have no duties to the Posting party in connection therewith.

(c) The Posting Party shall in all events remain liable to the Beneficiary Party for any amount payable by the Posting Party in respect of any of its Obligations remaining unpaid after any such liquidation, application and set off and the Beneficiary Party shall have the right to proceed against the Posting Party for any such deficiency.

8. Posting Party’s Exercise of Rights Concerning Performance Assurance.

If at any time (a) an Event of Default has occurred and is continuing where the Beneficiary Party is the Defaulting Party, or (b) an Early Termination has occurred or been designated with respect to the Beneficiary Party for which the Beneficiary Party has not satisfied all of its Obligations, then:
(i) on the day of such occurrence, the Beneficiary Party will be obligated to transfer all Performance Assurance (including any Letter of Credit) and interest in amounts calculated in accordance with the Interest Rate, if any, to the Posting Party;
(ii) the Posting Party may do any one or more of the following: (a) exercise any of the rights and remedies of a pledgor with respect to the Performance Assurance, including any such rights and remedies under law then in effect; (b) to the extent that Performance Assurance is not transferred to the Posting Party as required in (i) above, setoff amounts payable to the Beneficiary Party against the Performance Assurance (other than Letters of Credit) held by the Beneficiary Party or to the extent its rights to setoff are not exercised, withhold payment of any remaining amounts payable by the Posting Party, up to the value of any Performance Assurance that has not been so transferred, until the Performance Assurance is transferred to the Posting Party; (c) exercise rights and remedies available to the Posting Party under the terms of any Letter of Credit; and (d) exercise any applicable rights and remedies available to the Posting Party under the WSPP Agreement; and
(iii) the Beneficiary Party shall be prohibited from drawing on any Letter of Credit that has been posted by the Posting Party for its benefit.

9. Disputed Calculations.

If a Party shall dispute the Collateral Requirement determined by the Beneficiary Party or the Excess Performance Assurance determined by the Posting Party and such dispute relates to the Termination Payment calculated by the other Party under Section

22.1 of the WSPP Agreement or damages calculation under Section 21.3 of the WSPP Agreement, then the Party contesting the Termination Payment calculation or damages calculation shall:
(i) notify the other Party of the existence and nature of the dispute not later than 4 p.m. New York Time on the same day a Party has demanded additional

16 Performance Assurance under Section 4 of this Collateral Annex or the return of Excess Performance Assurance under Section 5 of this Collateral Annex; (ii) if a Beneficiary Party has demanded that the Posting Party provide Performance Assurance under Section 4, the Posting Party shall provide Performance Assurance to satisfy its Collateral Requirement based upon the Beneficiary Party’s estimate, made in good faith and in a commercially reasonable manner, of the Termination Payment if the Posting Party were the Defaulting Party under Section 22.1 of the WSPP Agreement and the damages under Section 21.3 of the WSPP Agreement if the Posting Party were required to pay such damages; and
(iii) if a Posting Party has demanded that the Beneficiary Party return Excess Performance Assurance under Section 5, the Beneficiary Party shall return Excess Performance Assurance based upon the Beneficiary Party’s estimate, made in good faith and in a commercially a commercially reasonable manner, of the Termination Payment if the Posting Party were the Defaulting Party under Section 22.1 of the WSPP Agreement and the damages under Section 21.3 of the WSPP Agreement if the Posting Party were required to pay such damages.

In all such cases, the Parties thereafter shall promptly negotiate in good faith in order to reconcile the dispute or a method for resolving the dispute. If the Parties fail to resolve the dispute on or before the first Business Day following the date that the demand is made by the Party contesting the Termination Payment calculation or the damages calculation, then such Termination Payment or damages calculation shall be determined based upon quotations from Dealers in energy contracts. Each Party may obtain up to a maximum of four (4) quotations which must be provided to the other Party on the same day as the demand, if the demand is made no later than 2 p.m. New York Time, or the next Business Day, if the demand is made after 2 p.m. Eastern Time. These quotations shall reflect transacted prices in comparable contracts. The Termination Payment or damages calculation shall equal a simple average of the quotations obtained and provided by the Parties consistent with the provisions of this Section 9. Each Party providing quotations to the other Party also shall identify to the other Party the Dealer(s) who provided each of the quotations to allow verification. Performance Assurance shall thereupon be provided, or Excess Performance returned, as the case may be, on the next Business Day after provision to the Posting Party of the recalculation, in accordance with the results of such recalculation. The results of this process shall be enforceable in a court of law unless fraudulent.

10. Covenants; Representations and Warranties; Miscellaneous.

(a) The Posting Party will execute and deliver to the Beneficiary Party (and to the extent permitted by applicable law, the Posting Party hereby authorizes the Beneficiary Party to execute and deliver, in the name of the Posting Party or otherwise) such financing statements, assignments and other documents and do such other things relating to the Performance Assurance and the security interest granted under this Collateral Annex including any action the Beneficiary Party may deem necessary or appropriate to perfect or maintain perfection of its security interest in the Performance Assurance, and the Posting Party shall pay all costs relating to its delivery of Performance Assurance and the maintenance and perfection of the security interest therein.

17 (b) On each day on which Performance Assurance is held under this Collateral Annex by the Beneficiary Party and/or its agent, or by the Custodial Bank under the Deposit Account Agreement, the Posting Party hereby represents and warrants that:

(i) the Posting Party has good and marketable title to and is the sole owner of such Performance Assurance, and the execution, delivery and performance of the covenants and agreements of this Collateral Annex, do not result in the creation or imposition of any lien or security interest upon any of its assets or properties, including, without limitation, the Performance Assurance, other than the security interests and liens created under the WSPP Agreement and this Collateral Annex;

(ii) upon the transfer of Performance Assurance by the Posting Party to the Beneficiary Party, its agent, or the Custodial Bank for the benefit of the Beneficiary Party, the Beneficiary Party shall have a valid and perfected first priority continuing security interest therein, free of any liens, security interests, claims or encumbrances, except those liens, security interests, claims or encumbrances arising by operation of law that are given priority over a perfected security interest;

(iii) it is not and will not become a Party to or otherwise be bound by any agreement, other than the WSPP Agreement and this Collateral Annex, or amendments thereto, which restricts in any manner the rights of any present or future holder of any of the Performance Assurance with respect hereto; and

(iv) No approval or authorization by, and no filing with or consent of, any federal, state, local, municipal or other government agency, department or regulatory authority is required either (A) for the grant by the Posting Party of the liens granted hereby or for the execution, delivery or performance of this Collateral Annex by the Posting Party or (B) for the perfection (except for filing of any financing statements in the jurisdictions identified in writing by the Posting Party) of the liens created hereby or the exercise by the Beneficiary Party of the rights and remedies hereunder.

(c) This Collateral Annex has been and is made solely for the benefit of the Parties and their permitted successors and assigns, and no other person, partnership, association, corporation, or other entity shall acquire or have any right thereunder or by virtue of this Collateral Annex.

(d) Each Party represents and warrants to the other Party that (i) it has all requisite power and authority to execute and deliver this Collateral Annex, to consummate the transactions contemplated hereby and to perform its respective obligations hereunder; (ii) it has taken all necessary action to authorize the execution, delivery and performance of this Collateral Annex and (iii) this Collateral Annex has been duly executed and delivered and, when executed and delivered by the other Party, will constitute the legal, valid and binding obligation of such Party enforceable against it in accordance with its terms except as such enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws affecting the rights of creditors generally or by general equitable principles (regardless of

18 whether enforcement is sought in a proceeding in equity or at law). Each Party, at the time of execution, shall provide the other Party with evidence of such authority reasonably acceptable to the other Party, including, if the Collateral Annex is executed by an officer, a certificate of incumbency, and, if requested by the other Party, a written opinion of counsel (the opinion of a Party’s in -house counsel shall suffice), in such form as is reasonably acceptable to the other Party, that person who executed this Collateral Annex was duly authorized in accordance with all actions requisite to establish such authority.

(e) As of the date a Party executes this Collateral Annex, the Cover Sheet Elections, Deposit Account Agreement, or Security Agreement, or any amendment thereto, such Party is a member in good standing of WSPP, Inc.

(f) Section 34 of the WSPP Agreement is inapplicable to any disputes concerning the enforcement of this Collateral Annex or the rights and obligations set forth herein concerning Performance Assurance. In the event litigation is commenced by either Party to enforce this Collateral Annex or collect any amounts required to be paid, provided or transferred hereunder, each Party agrees to pay the other Party for all reasonable attorneys fees, disbursements, and court costs incurred by the prevailing Party in such litigation.

(g) No delay or forbearance by any Party or its agents in exercising any right, power, privilege, or remedy accruing to such Party upon the occurrence of any breach or default by the other Party under this Collateral Annex, and no course of dealing between the Parties, shall impair any such right, power or remedy of the non - defaulting Party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of a Party of any such breach or default under this Collateral Annex, or any waiver on the part of any non -defaulting Party hereto of any provision or condition of this Collateral Annex, must be in writing and shall be effective only to the extent specifically set forth in such writing. This Collateral Annex may be amended only by a document executed by the Parties.

(h) Each demand, notice, consent, agreement, approval or other communication required or permitted to be given from one Party to the other Party under this Collateral Annex shall be provided in writing (unless expressly provided otherwise) and shall be submitted by recognized overnight courier service or telefacsimile addressed to the recipient Party at its address or telefacsimile number set forth in Part VIII of the Cover Sheet Elections or as changed by notice to the other Party. All such notices, requests, demands, approvals and other communications shall be deemed to have been duly given, received and effective when: (a) received if personally delivered; (b) on the day transmitted (unless transmitted after 5:00 p.m. at the place of receipt or on a day that is not a Business Day, in which case it shall be deemed received on the next Business Day), if transmitted by facsimile transmission and the sender's facsimile machine has received the correct answerback of the addressee and confirmation of uninterrupted transmission by a transmission report or the recipient confirming by telephone to sender that he has received the facsimile message; (c) the day

19 immediately following the day it is sent, if sent for next day delivery to a domestic address by a nationally -recognized overnight courier or delivery service; (d) on the day of receipt, if sent by certified or registered mail, return receipt requested; and (e) on the date actually received, if sent or delivered by any other means; provided, that any notice, demand, request or other communication made or delivered in connection with an alleged breach or default hereunder (including an Event of Default) shall only be delivered personally or by a nationally -recognized overnight courier or delivery service. Whenever this Collateral Annex provides that a demand, notice, consent, agreement, approval or other communication shall be provided in “writing” or shall be provided in “written” form, such demand, notice, consent, agreement, approval or other communication shall only be effective hereunder if provided by a manually signed original, photocopy or telefacsimile copy from the Party or Parties to be bound thereby.

(i) The headings in this Collateral Annex are for convenience of reference only, and shall not affect the meaning or construction of any provision thereof.

(j) This Collateral Annex shall be governed by, and construed and interpreted in accordance with, the laws of the State of Utah, except to the extent that the perfection, the effect of perfection or nonperfection and the priority of the security interest granted hereunder, or remedies hereunder, are governed by provisions of the UCC, including but not limited to UCC §§ 9 -301, 9-303, 9-304, 9-305, 9- 306 and 9-307, that may call for the application of the laws of jurisdictions other than the State of Utah.

(k) This Collateral Annex may be executed in one or more counterparts, all of which, when taken together, shall constitute one and the same instrument and each of the Parties hereto may execute this Collateral Annex by signing any such counterpart.

20 IN WITNESS HEREOF, the Parties have caused this Collateral Annex to be duly executed effective as of the date first written above.

Party A Party B

City of Roseville Altop Energy Trading LLC

_______________________________ _______________________________ [Sign here] [Sign here]

_______________________________ _______________________________ [Print name] [Print name]

_______________________________ _______________________________ Title Title

Date: __________________________ Date: __________________________

Gebre-Egziabher Gebre
4/25/2025
Principal

1 COVER SHEET ELECTIONS
applicable to the

COLLATERAL ANNEX
to the

WSPP AGREEMENT

This Cover Sheet Elections applicable to the Collateral Annex to the WSPP Agreement (“Cover Sheet Elections”) between the Parties is between:

City of Roseville (“Party A”) and
Altop Energy Trading LLC (“Party B”).

This Cover Sheet Elections sets forth the Parties’ agreements to supplement the Collateral Annex and, as the Parties may determine, vary the terms and conditions of the Collateral Annex. To the extent there are any inconsistencies between the terms and conditions of the Collateral Annex, excluding the Cover Sheet Elections, and these Cover Sheet Elections, the Cover Sheet Elections shall prevail.

Terms that are capitalized for reasons other than grammatical reasons shall have the meanings assigned to them in Section 1 of the Collateral Annex.

The Collateral Threshold, Interest Rate, Minimum Transfer Amount and Rounding Amount, shall each be zero (0) unless a different amount is stated below.

I. Collateral Threshold.

Explanatory note: The Beneficiary Party’s exposure due to the other Party’s failure to perform a WSPP Agreement transaction is the sum of (a) the Termination Payment under WSPP Agreement 22, (b) damages under WSPP Agreement § 21.3, and (c) any further and additional amounts due for rendered performance by the Beneficiary Party to the Posting Party, whether or not invoiced. The Collateral Threshold is the portion, if any, of this exposure that the Parties agree in this Cover Sheet Elections will not be secured with Performance Assurance.

A. Party A Collateral Threshold.

Name of Party A Guarantor, if applicable:

Not Applicable (“Party A Guarantor”)

If a Guarantor is identified, then all references to Party A shall include Party A Guarantor unless otherwise indicated and Party A shall be deemed to have the Credit Rating of Party A Guarantor.

 The Collateral Threshold for Party A shall be $______________; provided, however, that the Collateral Threshold shall be zero in the event of a Material Adverse Change as defined in Part II hereof with respect to Party A.

 The Collateral Threshold for Party A shall be (a) the amount set forth in the chart below under the heading “Collateral Threshold” opposite the Credit Rating for Party A on the relevant date of determination, and if such Credit Ratings shall not be equivalent, the lower Credit Rating shall govern, or (b) zero if on the relevant date of determination none of the rating agencies

2 specified below has a Credit Rating in effect with respect to Party A or in the event of a Material Adverse Change as defined in Part II hereof with respect to Party A:

S&P Moody's Threshold

A- and above A3 and above $25,000,000.00
BBB+ Baa1 $15,000,000.00
BBB Baa2 $10,000,000.00
BBB- Baa3 $2,500,000.00
BBB- and below Baa3 and below $ 0 (zero)

 The Collateral Threshold for Party A shall be (a) the amount set forth in the chart above under the heading “Collateral Threshold” opposite the Credit Rating for Party A on the relevant date of determination, and if such Credit Ratings shall not be equivalent, the higher two Credit Ratings shall govern, or (b) zero if on the relevant date of determination none of the rating agencies specified below has a Credit Rating in effect with respect to Party A or in the event of a Material Adverse Change with respect to Party A.

 The Collateral Threshold for Party A shall be the amount of the Guaranty Agreement dated _______________ from Party A Guarantor, as amended from time to time, but in no event shall Party A’s Collateral Threshold be greater than $_________________.

B. Party B Collateral Threshold.

Name of Party B Guarantor, if applicable:

Not Applicable (“Party B Guarantor”)

If a Guarantor is identified, then all references to Party B shall include Party B Guarantor unless otherwise indicated and Party B shall be deemed to have the Credit Rating of Party B Guarantor.

 The Collateral Threshold for Party B shall be the greater of $0 or value of the Letter of Credit or Cash, but no greater than $10,000; provided, however, that the Collateral Threshold shall be zero in the event of a Material Adverse Change as defined in Part II hereof with respect to Party B.

 The Collateral Threshold for Party B shall be (a) the amount set forth in the chart below under the heading “Collateral Threshold” opposite the Credit Rating for Party B on the relevant date of determination, and if such Credit Ratings shall not be equivalent, the lower Credit Rating shall govern, or (b) zero if on the relevant date of determination none of the rating agencies specified below has a Credit Rating in effect with respect to Party B or in the event of a Material Adverse Change as defined in Part II hereof with respect to Party B:

 The Collateral Threshold for Party B shall be (a) the amount set forth in the chart above under the heading “Collateral Threshold” opposite the Credit Rating for Party B on the relevant date of determination, and if such Credit Ratings shall not be equivalent, the higher two Credit Ratings shall govern, or (b) zero if on the relevant date of determination none of the rating

3 agencies specified below has a Credit Rating in effect with respect to Party B or in the event of a Material Adverse Change with respect to Party B.

 The Collateral Threshold for Party B shall be the amount of the Guaranty Agreement dated _______________ from Party B Guarantor, as amended from time to time, but in no event shall Party B’s Collateral Threshold be greater than $_________________.

II. Material Adverse Change.

A. Party A

A Material Adverse Change shall occur with respect to Party A in the following circumstances:

 (i) Its Credit Rating falls below ____ by S&P or ____ by Moody’s; or (ii) it is given an “issuer rating” by S&P below _____ or by Moody’s below ____; or (iii) it has no Credit Rating by either S&P or Moody’s.

 Party A’s creditworthiness, financial responsibility, or performance viability has become unsatisfactory to Party B in Party B’s reasonably exercised discretion with regard to a transaction between the Parties conducted under the WSPP Agreement.

 An Event of Default shall have occurred and is continuing where Party A is the Defaulting Party, or a Potential Event of Default has occurred where Party A is the potentially Defaulting Party, or an Early Termination has occurred or been designated with respect to Party A for which Party A has not satisfied its Obligations.

 Other:_______________________________________________________

B. Party B

A Material Adverse Change shall occur with respect to Party B in the following circumstances:

 (i) Its Credit Rating falls below ____ by S&P or ____ by Moody’s; or (ii) it is given an “issuer rating” by S&P below _____ or by Moody’s below ____; or (iii) it has no Credit Rating by either S&P or Moody’s.

 Party B’s creditworthiness, financial responsibility, or performance viability has become unsatisfactory to Party A in Party A’s reasonably exercised discretion with regard to a transaction between the Parties conducted under the WSPP Agreement.

 An Event of Default shall have occurred and is continuing where Party B is the Defaulting Party, or a Potential Event of Default has occurred where Party B is the potentially Defaulting Party, or an Early Termination has occurred or been designated with respect to Party B for which Party B has not satisfied its Obligations.

 Other:_______________________________________________________

4 III. General Credit Assurances.

Explanatory note: If in Part II above either Party elected the second option (Material Adverse Change includes unsatisfactory creditworthiness, financial responsibility, or performance viability) (such election, a “Section 27 Inclusion”), the Parties must make the first election in this Part III. If in Part II the Parties did not elect a Section 27 Inclusion and if they do not make either election in this Part III, then the second election under this Part III shall apply by default.

 Section 27 of the WSPP Agreement applies, provided, that (a) the following phrase is added after the last word of Section 22.1(d): “or in the Collateral Annex to the WSPP Agreement between the Parties,” (b) the following phrase is deleted: “The Second Party’s obligations under this Section 27 shall be limited to a reasonable estimate of the damages to the First Party (consistent with Section 21.3 of this Agreement) if the Second Party were to fail to perform its obligations,” and (c) the phrase “within three (3) Business Days of demand therefore” is revised to state “within one (1) Business Day after receipt of demand therefor.”

 Section 27 of the WSPP Agreement does not apply; Sections 27 and Section 22.1(d) of the WSPP Agreement are inapplicable to WSPP Agreement transactions between the Parties.

IV. Minimum Transfer Amount.

A. Party A Minimum Transfer Amount: $1

B. Party B Minimum Transfer Amount: $1

V. Rounding Amount.

A. Party A Rounding Amount: $100,000

B. Party B Rounding Amount: $100,000

VI. Administration of Cash Collateral.

A. Party A Eligibility to Hold Performance Assurance in form of Cash; Interest Rate.

Note: if neither of the two options immediately below is selected, then Option A shall apply.

 Option A: Party A shall not be entitled to hold Performance Assurance in the form of Cash. Performance Assurance in the form of Cash shall be held solely by a Custodial Bank in accordance with Section 6(b) of the Collateral Annex.

 Option B: Party A shall be entitled to hold Performance Assurance in the form of Cash under Section 6(a)(i), (ii) and (iii) of the Collateral Annex, provided, that no Downgrade Event has occurred with respect to Party A. If Option B is elected, the Parties must complete the following election:

5 Right of Party B to Rescind Option B:

 Party B shall be entitled to rescind Option B unilaterally, in its sole discretion, such that upon rescission (in accordance with Section 6(a)(iv) of the Collateral Annex) Party A shall not be entitled to hold Performance Assurance in the form of Cash and Section 6(a)(iv) of the Collateral Annex shall become applicable.

 Party B shall not be entitled to rescind Option B unilaterally, in its sole discretion, provided, Party B shall lose its entitlement to hold Performance Assurance in the form of Cash upon the occurrence of any other Downgrade Event under Section 6(a)(iv) of the Collateral Annex.

To the extent Party A is entitled to hold Cash, the Interest Rate payable to Party B on Cash shall be as elected below:

Party A Interest Rate.

 Federal Funds Effective Rate - the rate for that day opposite the caption “Federal Funds (Effective)” as set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System. (If neither Interest Rate box is checked, or the “Other” box is not completed, the Federal Funds Rate specified herein shall apply.)

 Other - ____________

B. Party B Eligibility to Hold Performance Assurance in form of Cash; Interest Rate.

Note: if neither of the two options immediately below is selected, then Option A shall apply.

 Option A: Party B shall not be entitled to hold Performance Assurance in the form of Cash. Performance Assurance in the form of Cash shall be held solely by a Custodial Bank in accordance with Section 6(b) of the Collateral Annex.

 Option B: Party B shall be entitled to hold Performance Assurance in the form of Cash under Section 6(a)(i), (ii) and (iii) of the Collateral Annex, provided, that no Downgrade Event has occurred with respect to Party B.

If Option B is elected, the Parties must complete the following election:

Right of Party A to Rescind Option B:

 Party A shall be entitled to rescind Option B unilaterally, in its sole discretion, such that upon rescission (in accordance with Section 6(a)(iv) of the Collateral Annex) Party B shall not be entitled to hold Performance Assurance in the form of Cash and Section 6(a)(iv) of the Collateral Annex shall become applicable.

6  Party A shall not be entitled to rescind Option B unilaterally, in its sole discretion, provided, Party A shall lose its entitlement to hold Performance Assurance in the form of Cash upon the occurrence of any other Downgrade Event under Section 6(a)(iv) of the Collateral Annex.

To the extent Party A is entitled to hold Cash, the Interest Rate payable to Party B on Cash shall be as elected below:

Party B Interest Rate.

 Federal Funds Effective Rate - the rate for that day opposite the caption "Federal Funds (Effective)" as set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System. (If neither Interest Rate box is checked, or the “Other” box is not completed, the Federal Funds Rate specified herein shall apply.)

 Other - ____________

C. Posting Deadline for Collateral Requirement

The Posting Party shall be required to provide Performance Assurance to cover an outstanding Collateral Requirement under Section 4 of the Collateral Annex no later than 2:00 pm New York time of the Local Business Day after receipt of a Demand Notice (the “ Posting Deadline”), provided, that if the Posting Deadline is the same day as the Demand Notice is sent/received, then the Demand Notice must be received no later than 1 p.m. New York time on that day, and if the Demand Notice is sent/received after such time, then the Posting Deadline shall be 24 hours later.

D. Reduction Deadline for Transfer of Excess Performance Assurance

The Beneficiary Party shall be required to transfer Excess Performance Assurance to the Posting Party under Section 5 of the Collateral Annex no later than 2:00 pm New York time of the Local Business Day after receipt of a demand therefor (the “Reduction Deadline”), provided, that if the Reduction Deadline is the same day as the demand for return of Excess Performance Assurance is sent/received, then the demand must be received no later than 1 p.m. New York time on that day, and if the demand is sent/received after such time, then the Reduction Deadline shall be 24 hours later.

VII. Letters of Credit

A. Definition of LC Issuer:

If the Parties agree that a specific entity shall be an LC Issuer even if may not satisfy the credit rating specified in the definition of LC Issuer set forth in the Collateral Annex, identify such entity here:
_________________________________________________________________

If the Parties agree to a different definition of LC Issuer than the definition specified in the Collateral Annex, state such definition here:

7 _________________________________________________________________ _________________________________________________________________ _________________________________________________________________

B. Definition of Letter of Credit

 “Letter of Credit ” means an irrevocable, non -transferable, standby letter of credit, issued by a Qualified Institution, or other issuer to which the Parties may agree in writing, in a form consistent with the Parties’ agreements stated below and otherwise reasonably acceptable to the Beneficiary Party.

Each Letter of Credit shall contain the following terms and conditions:

 “Letter of Credit” has the following meaning:
____________________________________________________________ ____________________________________________________________

Regardless of the Parties’ election in this Part VII.B above, the Parties may specify here additional terms and conditions that a Letter of Credit shall contain:
_______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________

VIII. Notice and other Communications Under Section 10(h) of Collateral Annex

Each demand, notice, consent, agreement, approval or other communication required or permitted to be given from one Party to the other Party under the Collateral Annex shall be submitted to the recipient Party at the following address or fax number:

Party A:

Attention: Power Supply and Portfolio Administrator
Street: 116 S. Grant Street Ste. 4
City, State, Zip Code: Roseville, CA 95678
Fax No.: (916) 774-5583

Party B:

Attention: Cory Hill
Street: 440 Louisiana Street, Suite 575
City, State, Zip Code: Houston, TX 77002
Email: [email protected]

8 Execution of Cover Sheet Elections:

Party A Party B

City of Roseville Altop Energy Trading LLC
Name of Party: Name of Party

_______________________________ _______________________________ [Sign here] [Sign here]

_______________________________ _______________________________ [Print name] [Print name]

_______________________________ _______________________________ Title Title

Date: __________________________ Date: __________________________

Gebre-Egziabher Gebre
Principal
04/25/2025

WSPP Agreement
Changes Effective October 21, 2024
This version includes all revisions approved by the Federal Energy Regulatory Commission (FERC) in orders issued through December 13, 2024. The most recent revisions are to update the the List of Members within the Agreement, per the FERC’s unpublished letter order dated December 13, 2024 (Docket No. ER25-178-000). The FERC accepted the revisions effective October 21, 2024 for the metadata and, for each change in the Member List, on the applicable date of the change as stated in its order.

This version of the WSPP Agreement is prepared for the convenience of WSPP Members. The WSPP Agreement as filed with the FERC is available at www.FERC.gov and specifically http://etariff.ferc.gov/TariffList.aspx.

This explanatory page is not part of the WSPP Agreement and is not filed with the FERC.

WSPP AGREEMENT
WSPP INC.

FIRST REVISED RATE SCHEDULE FERC NO. 6
Superseding
Rate Schedule FERC No. 6
© WSPP Inc. 2003
All rights reserved

TABLE OF CONTENTS

1. PARTIES

2. RECITALS

3. AGREEMENT

4. DEFINITIONS

5. TERM, TERMINATION AND WITHDRAWAL

6. SERVICE SCHEDULES AND WSPP DEFAULT TRANSMISSION TARIFF

7. ADMINISTRATION

8. EXECUTIVE AND OPERATING COMMITTEES

9. PAYMENTS

10. UNCONTROLLABLE FORCES

11. WAIVERS

12. NOTICES

13. APPROVALS AND EFFECTIVENESS

14. TRANSFER OF INTEREST IN AGREEMENT

15. SEVERABILITY

16. MEMBERSHIP

17. RELATIONSHIP OF PARTIES

18. NO DEDICATION OF FACILITIES

19. NO RETAIL SERVICES

20. THIRD PARTY BENEFICIARIES

21. LIABILITY AND DAMAGES

22. DEFAULT OF TRANSACTIONS UNDER THIS AGREEMENT AND

CONFIRMATIONS

22A. DEFAULT IN PAYMENT OF WSPP OPERATING COSTS

23. OTHER AGREEMENTS

24. GOVERNING LAW

25. JUDGMENTS AND DETERMINATIONS

26. COMPLETE AGREEMENT

27. CREDITWORTHINESS

28. NETTING

29. TAXES

30. CONFIDENTIALITY

31. TRANSMISSION TARIFF

32. TRANSACTION SPECIFIC TERMS AND ORAL AGREEMENTS

33. PERFORMANCE, TITLE, AND WARRANTIES FOR TRANSACTIONS

UNDER SERVICE SCHEDULES

34. DISPUTE RESOLUTION

35. FORWARD CONTRACTS

36. TRADE OPTION EXEMPTION

37. ADDITIONAL REPRESENTATIONS AND WARRANTIES

38. FLOATING PRICES

39. AMENDMENT

40. EXECUTION BY COUNTERPARTS

41. WITNESS
EXHIBIT A: NETTING
EXHIBIT B: FORM OF COUNTERPARTY GUARANTEE AGREEMENT

EXHIBIT C: SAMPLE FORM FOR CONFIRMATION
EXHIBIT D: WSPP MEDIATION AND ARBITRATION PROCEDURES

SERVICE SCHEDULES
A. ECONOMY ENERGY SERVICE
B. UNIT COMMITMENT SERVICE
C. FIRM CAPACITY/ENERGY SALE OR EXCHANGE SERVICE
D. OPERATING RESERVE – SPINNING AND OPERATING RESERVE –

SUPPLEMENTAL
E. ENERGY IMBALANCE AND GENERATOR IMBALANCE POWER
R. RENEWABLE ENERGY CERTIFICATE TRANSACTIONS WITH AND

WITHOUT ENERGY
SCHEDULE Q: FERC ACCEPTED SELLER-SPECIFIC COST-BASED RATE SCHEDULES

LIST OF MEMBERS

1. PARTIES:

The Parties to this WSPP 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. An entity shall become a Party on the date specified in Section 16.6.

2. RECITALS

2.1 Through this Agreement, the WSPP administers a multi-lateral, standardized agreement applicable to capacity and/or energy transactions between members and is available to entities (which qualify for membership under Section 16) throughout the entire continental United States, Canada, and Mexico.

2.2 This Agreement serves two functions. First, it sets out the rules applicable to the operation of the WSPP. Second, it sets out the terms for the standardized agreement used for capacity and/or energy transactions between members.

2.3 This Agreement facilitates physical transactions in capacity and/or energy under a FERC accepted or approved rate schedule (this Rate Schedule FERC No. 6).

2.4 Through the standardization of terms for transactions in capacity and/or energy which facilitates such transactions, the public interest has been and will continue to be served.

3. AGREEMENT:

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

4. DEFINITIONS:

The following terms, when used herein with initial capitalization, whether in the singular or in the plural, shall have the meanings specified:

Agreement: This WSPP Agreement, including the Service Schedules and Exhibits attached hereto, as amended; provided, however, that Confirmation(s) 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. 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 Seller and the Purchaser have their principal places of business in Canada, Canadian holidays shall apply and United States 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 apply.

California ISO: The California Independent System Operator Corporation or any successor organization.

Confirmation(s): The confirmations for transactions developed and made effective in accordance with Section 32 or Electronic Platform Confirmations.

Contract Price: The price agreed to between the Seller and the Purchaser for a transaction under the Agreement and Confirmation.

Contract Quantity: The amount of capacity and/or energy to be supplied for a transaction under the Agreement.

Control Area: 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.

Costs: As defined in Section 22.3 of this Agreement.

Damages Settlement Transaction: A transaction where, after non-performance under a Confirmation, the Parties enter into a second transaction for the purpose of finally settling damages incurred by the Performing Party due to non-performance of such Confirmation.

Dealer: An entity or person that buys or sells power and takes title to the power at some point.

Demand Response: A reduction in the consumption of electric energy by customers from their expected consumption in response to an increase in the price of electric energy or to incentive payments designed to induce lower consumption of electric energy.

Demand Response Entity: An entity or lawful association which is not an Electric Utility, Qualifying Facility, or Retail Entity, which sells or otherwise provides Demand Response through wholesale transactions.

Defaulting Party: As defined in Section 22.1 of this Agreement.

Determination Period: As defined in Section 38.2 of this Agreement.

Documentary Writing: A document which is physically delivered by courier or U.S. mail, or a copy of which is transmitted by telefacsimile or other electronic means.

Economy Energy Service: Non-firm 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.

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.

Electronic Platform Confirmation: agreed terms and conditions of a transaction, which agreement (a) was made through electronic entry of information and terms on, and in a manner that complies with the procedures of, the applicable electronic trading platform or exchange, (b) includes, at a minimum, the Standard Confirmation Provisions, and (c) is available to either Party for retrieval from the applicable electronic trading platform or exchange in printable or electronic form.

Electronic Writing:
(1) Recorded oral conversation; or

(2) electronic communications, including but not limited to e-mail, if the Parties to the transaction use such method to create an electronic writing for the Confirmation for such transaction and, except with respect to e-mail, specifically agree to the method of electronic communication.

Electronic Writings shall not include the transmittal of a copy of a document by electronic means, which is considered a Documentary Writing.

ERCOT: Electric Reliability Council of Texas, Inc., and any successor organization.

Event of Default: As defined in Section 22.1 of this Agreement.

Executive Committee: The 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.

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 obligations arising under this Agreement and Confirmation. A sample form of Guarantee Agreement is provided in Exhibit B.

Guarantor: The entity providing a guarantee pursuant to a Guarantee Agreement.

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.

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.

NERC: North American Electric Reliability Council or any successor organization.

Non-Defaulting Party: As defined in Section 22.1(a) of this Agreement.

Non-Performing Party: As defined in Section 21.3(a) of this Agreement.

Non-Standard Confirmation Provisions: Provisions other than Standard Confirmation Provisions.

NYMEX: New York Mercantile Exchange and any successor organization.

Operating Agent: An agent of the WSPP as may be designated by the Executive Committee from time to time.

Operating Committee: That committee established pursuant to Section 8 of this Agreement.

Party or Parties: As defined in Section 1 of this Agreement.

Performing Party: As defined in Section 21.3(a) of this Agreement.

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; 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.

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.

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 and any applicable Confirmation.

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.

Replacement Price: The price at which the Purchaser, acting in a commercially reasonable manner, effects a purchase of substitute capacity and/or energy in place of the capacity and/or energy not delivered (for energy) or made available (for capacity

only) by the Seller or, absent such a purchase, the market price for such quantity of capacity and/or energy, as determined by the Purchaser in a commercially reasonable manner, at the delivery point specified for the transaction in the Confirmation.

Resale Price: The price at which the Seller, acting in a commercially reasonable manner, effects a resale of the capacity and/or energy not received by the Purchaser or, absent such a resale, the market price for such quantity of capacity and/or energy, as determined by the Seller in a commercially reasonable manner at the delivery point specified for the transaction in a Confirmation.

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.

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 and the applicable Confirmation.

Service Schedule: A schedule of services established pursuant to Section 6 of this Agreement on file with FERC as part of this Agreement.

Standard Confirmation Provisions: Provisions setting forth: Seller, Purchaser, period of delivery, schedule, delivery rate, delivery points, type of service (e.g. Service Schedule A, B, C or other), contract quantity, price, transmission path (if any), date, and certain additional information for physically settled options (option type, option style, exercise date or period, premium, premium payout date, and method for providing notice of exercise).

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.

Unit Commitment Service: A capacity and/or associated scheduled energy transaction or a Physically-Settled Option under which the Seller has agreed to sell and the Purchaser has agreed to buy from a specified unit(s) for a specified period, in accordance with the Agreement, including Service Schedule B, and any applicable Confirmation.

WSPP: WSPP Inc., a corporation organized in 1995 and duly existing under the Utah Revised Nonprofit Corporation Act.

WSPP Default Transmission Tariff: The transmission tariff filed on behalf of WSPP members with FERC as it may be amended from time to time.

WSPP Homepage: WSPP’s internet web site, www.wspp.org.

5. TERM, TERMINATION AND WITHDRAWAL:

5.1 This Agreement shall remain in effect until the Executive Committee, consistent with the voting provisions of Section 8.3, votes to terminate this Agreement and FERC accepts that termination, or FERC otherwise terminates the Agreement.

5.2 Any Party may withdraw its participation as a member of the WSPP and as a Party to this Agreement by providing thirty (30) days prior written notice to the Operating Agent and to the WSPP Homepage, and to all of its counterparties to outstanding transactions. As of the effective date of any withdrawal, the withdrawing Party shall have no further rights or obligations under this Agreement or as a member of the WSPP, except with respect to each outstanding Confirmation, all outstanding rights and obligations arising under any such Confirmation and this Agreement shall remain in full force and effect as if the withdrawal had not occurred. 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 shall cease, and no Party shall claim or assert any continuing right to such services thereunder. Except as provided 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. If the Parties have entered into a master confirmation agreement only for WSPP transactions as that term is defined in Section 32.10, the withdrawing Party shall have no further rights under that

master confirmation agreement except for transactions that were outstanding at the time of the withdrawal.

5.4 The Parties subject to FERC jurisdiction under the Federal Power Act shall have the right to terminate their participation as a Member of the WSPP and as Party to this Agreement and any Confirmation without the necessity of filing with or approval by FERC, provided that such Parties comply with the requirements of Section 5.2.

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 E for Economy Energy Service, Unit Commitment Service, Firm Capacity/Energy Sale or Exchange Service, Operating Reserve – Spinning and Operating Reserve – Supplemental, and Energy Imbalance and Generator Imbalance Power, and Service Schedule R for Renewable Energy Certificate Transactions With And Without Energy, are incorporated into 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 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. Additional Service Schedules or amendments to existing Service Schedules, if any, shall be adopted only by amendment of this Agreement approved by the Executive Committee pursuant to Section 8.3 and shall become effective on the effective date allowed or accepted by FERC consistent with Section

39. 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 non-Parties under this Agreement; provided, however, each Party or non-Party 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 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.

7.2 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.

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

9.

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.

7.6 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.

7.7 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.

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.

8.1.2 To establish standing or ad hoc sub-committees as it may from time to time deem necessary or appropriate and appoint or elect members thereto. Such sub-committees shall include an Administrative Committee, as a standing committee, to administer the affairs of the WSPP as the Executive Committee may direct or approve. The Administrative Committee shall be comprised of the Chairman, Vice-Chairman, Secretary and Treasurer of the WSPP and the Chairman, and Vice-Chairman, and Secretary of the Operating Committee.

8.1.3 To review at least annually the service activities hereunder to ensure that such activities are consistent with the spirit and intent of this Agreement.

8.1.4 To review any unresolved issues which may arise hereunder and endeavor to resolve the issues.

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 or otherwise as the Executive Committee deems necessary or appropriate.

8.1.6 To amend this Agreement, from time to time, provided that no such amendment or restatement shall be effective unless approved or accepted by the FERC and subject to terms and conditions of such approval or acceptance. The effectiveness of any amendment also shall be consistent with Section 39.

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.

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.

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.

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.

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 establish standing or ad hoc sub-committees and appoint or elect members of the Operating Committee thereto, provided that such sub- committees shall make recommendations to the Operating Committee and shall not be authorized to take any action or exercise any power reserved to the Operating Committee. Each sub-committee may elect a chairman, vice chairman, and secretary as it deems appropriate.

8.2.10 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.

8.3 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.

8.4 Unless otherwise agreed by all committee members of the Executive Committee or Operating Committee, as applicable, 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.

8.5 In accordance with Section 16.5.1, each Party shall give notice to the WSPP of the name of its designated representative and alternate representative (to act in the absence of the designated representative) on each of the Executive Committee and Operating Committee, and of any changes thereto, and WSPP shall publish a listing of all such representatives on the WSPP Homepage. Each Party's designated representatives shall be authorized to act on its behalf with respect to votes taken of members of each committee and other activities of the committee.

8.6 The Executive Committee shall meet no less than once annually and otherwise as determined by its Chairman in his discretion. The Operating Committee shall meet as necessary, as determined by its Chairman in his discretion. A Chairman shall call a meeting of such committee upon the written request of not less than ten (10) members of the applicable committee.

8.7 The Executive Committee shall elect a Chairman, Vice-Chairman, Secretary and 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 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 of the Executve Committee shall be the Secretary of the WSPP.

The Secretary, or his designee, shall record minutes of meetings and actions of the Executive Committee, perform the customary duties of a secretary of a non-profit corporation, and attend to the giving and serving of all notices required by law or under this Agreement as the Chairman may direct.

8.7.4 The Treasurer of the Executive Committee shall be the Treasurer of the WSPP. The Treasurer shall have custody of all funds, securities, and evidences of indebtedness of the Corporation. The Treasurer shall receive and give receipts for moneys paid in on account of the Corporation and shall pay out of the funds on hand any bills, payrolls and other just debts of the Corporation of whatever nature upon maturity. The Treasurer shall maintain full and accurate accounts of all moneys received and paid out on account of the Corporation. The Treasurer shall deposit all moneys and other valuables

in the name and to the credit of the Corporation in such depositories as may be designated by the Executive Committee. The Treasurer shall adhere to budgets determined by the Executive Committee, including the annual budget under section 8.1.4 of this Agreement, and shall perform such other duties as are customary for a treasurer of a non-profit corporation.

8.7.5. 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 as the Chairman may direct.

9. PAYMENTS:

9.1 The accounting and billing period for transactions under this Agreement shall be one (1) calendar month. 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 Payments for amounts billed under this Agreement and any Confirmation shall be received by the Party to be paid on the 20th day of the month in which the invoice was received 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. 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.

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.

9.4 In order to dispute a bill in whole or in part, a Party must provide written notice of the dispute to the other Party to the transaction. Such written notice shall specify the amount in dispute and state the basis for the dispute. 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. A Party shall have the right to dispute the accuracy of any bill or payment only for a period of two (2) years from the date on which the bill was initially delivered.

9.5 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.

9.6 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 of charges submitted hereunder for a period of two (2) years from the date the bill was delivered under this Agreement and/or Confirmation.

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 provide all reasonably requested documents and data within a reasonable time period.

10. UNCONTROLLABLE FORCES:

No Party shall be considered to be in breach of this Agreement or any applicable Confirmation to the extent that a failure to perform its obligations under this Agreement or any such Confirmation is 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, an “Uncontrollable Force” may include and is not restricted to flood, drought, earthquake, storm, fire, lightning, epidemic, war, riot, act of terrorism, 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.

The following shall not be considered “Uncontrollable Forces”: (i) Seller’s cost of obtaining capacity and/or energy; or (ii) Purchaser’s inability due to the price of the capacity and/or energy, to use or resell such capacity and/or energy. 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 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.

Where the entity providing transmission services for transactions under this Agreement and Confirmation 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 in the Confirmation (b) firm transmission involving that transmission path was obtained pursuant to a transmission tariff or contract to effectuate the transaction under this Agreement and Confirmation, and (c) the entity providing transmission service curtailed or interrupted such firm transmission pursuant to the applicable transmission tariff or contract. There shall be no due diligence obligation associated with interruptions under this subparagraph (1). (2) If the Parties did not agree on the transmission path for a transaction in the Confirmation, an interruption in transmission service shall be 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 Agreement and Confirmation, (b) the entity providing transmission service curtailed or interrupted such transmission service, 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.

11. WAIVERS:

Any waiver at any time by any Party of its rights with respect to a default under this Agreement or any Confirmation, 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.

12. 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 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, or overnight delivery (with record of receipt).

12.2 Notices and requests of a routine nature applicable to delivery or receipt of capacity and/or energy shall be given in such manner as the Parties to a transaction shall prescribe in a Confirmation or otherwise; provided, however, if the Parties have not prescribed a method of providing such routine notices, then the procedures in Section 12.1 shall apply.

13. EFFECT OF APPROVALS:

13.1 This Agreement and all Confirmations are subject to valid laws, orders, rules and regulations of duly constituted authorities having jurisdiction. Nothing contained in this Agreement or any Confirmation 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.

13.2 Nothing in this Agreement or any Confirmation is intended to restrict the authority of the Bonneville Power Administration (BPA) pursuant to applicable statutory authority to use its existing wholesale power and transmission rates or to adopt new rates, rate schedules, or general rate schedule provisions for application under this Agreement and obtain 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.

13.3 Nothing contained in this Agreement or any Confirmation 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 or any Confirmation.

14. TRANSFER OF INTEREST IN AGREEMENT:

No Party shall voluntarily transfer its membership in the WSPP 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 this Agreement and Confirmation(s), neither Party to such transactions 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(s) (where applicable) to the same extent as though such successor or assignee were the original Party under this Agreement or the Confirmation(s), and no assignment or transfer of any rights under this Agreement or any Confirmation(s) 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 conditions of this Agreement and any Confirmation(s) (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.

15. SEVERABILITY:

In the event that any of the terms, covenants or conditions of this Agreement or any Confirmation, 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 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(s).

16. MEMBERSHIP:

16.1 Any Electric Utility, Retail Entity, Qualifying Facility, or Demand Response Entity may become a Party to this Agreement. The Executive Committee shall notify such Electric Utility, Retail Entity, Qualifying Facility, or Demand Response Entity 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, 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 issue or seek to obtain the issuance of any subpoena to the WSPP or 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 or their opinions regarding the construction or interpretation of any clause of the Agreement, 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 issue or seek to obtain the issuance of any subpoena in breach of this provision shall compensate the WSPP and its officers, attorneys, and consultants, as applicable, for all out- of-pocket costs incurred.

16.6 An entity shall become a Party to this Agreement and a member of the WSPP upon satisfaction of the requirements in this Section 16 and on the date allowed by FERC

if it is a FERC public utility or upon the date of satisfaction of the requirements in this Section 16 if it is not a FERC public utility.

17. RELATIONSHIP OF PARTIES:

17.1 Nothing contained in this Agreement or in any Confirmation shall be construed to create an association, joint venture, trust, or partnership, or agency relationship between or among the Parties, or to impose a trust or partnership covenant, obligation, or liability on or with regard to any of the Parties. Each Party shall be individually responsible for its own covenants, obligations, and liabilities under this Agreement and under any applicable Confirmation.

17.2 All rights and obligations of the Parties under this Agreement are several and are not joint.

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:

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.

20. 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:

21.1 This Agreement contains express remedies and measures of damages in Sections

21.3 and 22 for non-performance or default. This Agreement also contains additional remedies to enforce payment of monies due and to enforce terms of the Agreement and applicable Confirmations in Section 21.2.

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), including any negligence arising hereunder. Any liability or damages incurred 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.

21.2 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 monies, (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.

In addition, each Party shall possess the right to seek specific performance (injunctive relief) of the non-delivery related terms of this Agreement and any

Confirmation in any forum having competent jurisdiction. In seeking to enforce the terms of this Agreement, however, consistent with Section 21.1, no Party is entitled to receive or recover monetary damages except as provided in Sections 21.3 and 22.

21.3 The following damages provision shall apply to all transactions under this Agreement. For transactions under Service Schedule A, however, this damages provision or some other damages provision will apply only if such a damages provision is agreed to through a Confirmation. The damages under this Section

21.3 apply to a Party's failure to deliver or receive (or make available in the case of capacity) capacity and/or energy in violation of the terms of the Agreement and any Confirmation. The Contract Quantity and Contract Price referred to in this Section

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 (or make available in the case of capacity), as the case may be, the quantities of capacity and/or energy due under the Agreement and any Confirmation (thereby becoming a "Non- Performing Party" for the purposes of this Section 21.3), the other party (the "Performing 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 Resale Price (Contract Price - Resale Price) and the amount by which the quantity provided to the Purchaser was less than the hourly Contract Quantity; plus (b) the amount of transmission charge(s), if any, for firm transmission service upstream of the delivery point, which the Seller incurred to achieve the Resale 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). (2) If the amount the Seller scheduled or delivered (or made available in the case of capacity) 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 provided 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).
(3) The Non-Performing Party also shall reimburse the Performing Party for any charges imposed on the Performing Party under open access transmission or FERC accepted or approved tariffs for regional organizations due to the non-performance.
(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 if the Parties agreed to revise the billing period in Section 9.
(5) In the event (a) two Parties entered into two or more Confirmations in which the same Party is the Purchaser and the other Party is the Seller, (b) deliveries under two or more of such Confirmations are to occur, in whole or in part, on the same date and hour, and at the same delivery point, and (c) as to such date, hour, and delivery point, and with respect to one or more of such Confirmations, a Party is a Non-Performing Party (for purposes of this Section 21.3(a)(5), each such instance of non-performance, a “non-performed transaction”), then, as set out in this Section 21.3(a)(5), each non-performed

transaction shall be identified to a Confirmation, and the Contract Price of the Confirmation to which the non-performed transaction is identified, and the Contract Quantity of the non-performed transaction, shall be applied to the calculation of amounts due under Section 21.3(a)(1) through (3), as applicable.

The Parties in good faith shall seek to agree to the
identification of each non-performed transaction to a Confirmation.

Each non-performed transaction not identified to a
Confirmation by agreement, and any megawatt hours that are not fully accounted for by such identification, shall be identified to Confirmation(s) as follows:
(i) The Performing Party in good faith shall determine whether each Confirmation is real-time, day-ahead, or forward; all Confirmations that are not real-time or day-ahead shall be deemed forward Confirmations.
(ii) The Performing Party in good faith shall determine whether each non-performed transaction is real-time, day-ahead, or forward; all non-performed transactions that are not real-time or day-ahead shall be deemed forward non-performed transactions.
(iii) The Performing Party shall:
(x) identify real-time non-performed transactions to
real-time Confirmations, provided, that if the megawatt hours of real-time non-performed transactions exceed the

megawatt hours of real-time Confirmations, then such excess megawatt hours shall be identified to day-ahead
Confirmations and any excess megawatt hours remaining
after such identification to day-ahead Confirmations shall be identified to forward Confirmations.
(y) identify day-ahead non-performed transactions to
day-ahead Confirmations, provided, that if the megawatt hours of day-ahead non-performed transactions exceed the megawatt hours of day-ahead Confirmations, then such
excess megawatt hours shall be identified to forward
Confirmations.
(z) identify all remaining non-performed transactions to forward Confirmations.

The Performing Party, in its billing for amounts due under Section

21.3(a)(1) through (3), shall set out a detailed explanation of each applicable determination under parts (i), (ii), and (iii) of this Section

21.3(a)(5), and state the resulting Contract Quantity and Contract Price, and any amounts associated with each such determination under Section 21.3(a)(3).
(b) 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.

(c) 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. (d) 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. (e) In the event non-performance of a transaction is accounted for by means of a Damages Settlement Transaction and the Damages Settlement Transaction is performed, then no damages shall be calculated or due under § 21.3(a) with respect to the non-performed transaction. Neither Party shall be required to enter into a Damages Settlement Transaction.

22. DEFAULT OF TRANSACTIONS UNDER THIS AGREEMENT AND
CONFIRMATIONS:

22.1 EVENTS OF DEFAULT
An "Event of Default" shall mean with respect to a Party ("Defaulting Party"):
(a) the failure by the Defaulting Party to make, when due, any payment required pursuant to this Agreement or Confirmation 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
(b) 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 (c) 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 (d) The 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 any Confirmation pursuant to

Section 27 of this Agreement or any substitute or modified provision in any Confirmation.
(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 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.

22.2 REMEDIES FOR EVENTS OF DEFAULT

22.2(a) If an Event of Default shall have occurred and be continuing, the Non- Defaulting Party, upon written notice to the Defaulting Party, shall have the right (i) to suspend performance of transactions under this Agreement; provided, however, (i) in no event shall any such suspension continue for longer than ten (10) Business Days; (ii) such suspension must include all transactions under this Agreement in effect as of the date of the suspension between the Defaulting Party and the Non-Defaulting Party; and (iii) such suspension is available only once for each default. This ten (10) day suspension period shall not affect in any way the thirty (30) day period for exercising a right of termination under Section 22.2(b). The Non- Defaulting Party shall have the unilateral right to exercise its rights under this Agreement including its termination rights at any time within the suspension period. The Defaulting Party shall have no suspension rights.

In no event shall the suspension continue beyond the cure of or waiver by the Non-Defaulting Party of the applicable Event of Default. If the Non- Defaulting Party seeks to terminate the suspension period such that the suspension shall be terminated prior to the end of the ten (10) Business Day period specified above, it may do so only by providing at least twenty-four (24) hours written notice to the Defaulting Party before the suspension may be terminated.

22.2(b) 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.

If the Non-Defaulting Party elects to terminate under this Section, it shall be required to terminate all transactions between the Parties under the Agreement at the same time. 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 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 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(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(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

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.
(b) 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 (c) 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 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.
(d) 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 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.
(e) (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 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.
(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 22.1(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.
(f) 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 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 (except if the option under 22.3(e) has been invoked in which case the payment times in that provision would apply) 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.
(g) 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 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.

22A. 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 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 and Confirmation(s) 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.
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 remaining Parties. Cost allocation adjustments shall be retroactive to the date of the default.

23. 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.

24. GOVERNING LAW:

This Agreement and any Confirmation 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.

25. 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 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.

26. COMPLETE AGREEMENT:

This Agreement and the Confirmation(s), shall constitute the full and complete agreement of the Parties with respect to a transaction, except as provided under Section

32.4.

27. 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 and any Confirmation, 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 (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 any Confirmation 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 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 that Section 22. Nothing contained in this Section 27 shall affect any credit agreement or arrangement, if any, between the Parties.

28. NETTING:

28.1 Parties shall net payments (associated with transactions under this Agreement and Confirmation(s)) in accordance with Exhibit A, if such Parties have executed the form attached as Exhibit A. The Parties’ obligations 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 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 executed Exhibit A. 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.

28.2 The Parties may by separate agreement either through a Confirmation or some other agreement set out specific terms relating to the implementation of the netting in addition to or in lieu of Exhibit A.

28.3 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.

29. TAXES:

The Contract Price for all transactions under this Agreement 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, 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 made in connection with regulatory proceedings (including proceedings relating to FERC, the United States Securities and Exchange Commission or any other 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.

31. 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 WSPP members.

32. TRANSACTION SPECIFIC TERMS AND ORAL AGREEMENTS:

32.1 General

32.1.1 A Confirmation shall include, at a minimum, the Standard Confirmation Provisions. (See Exhibit C for a sample). Subject to the limitations in Section 32.2 (Standard Confirmation Provisions) and Section 32.3 (Non- Standard Confirmation Provisions), the Confirmation shall be made in writing by a Documentary Writing or an Electronic Writing, or shall be an Electronic Platform Confirmation.

32.1.2 Pursuant to the provisions of this Section 32, the Parties to a transaction under this Agreement may agree to modify any term of this Agreement (other than provisions regarding the operation of the WSPP as an organization including Sections 7 and 8) which applies to such transaction, such agreement to be stated in a Confirmation or Confirmations.

32.1.3 Sections 32.2 and 32.3 shall not apply to an Electronic Platform Confirmation. Parties may amend an Electronic Platform Confirmation in accordance with the procedures, if any, of the applicable platform or exchange or in any other manner this Agreement permits. Each Electronic Platform Confirmation between WSPP members shall be subject to this Agreement, unless the transaction specified in the Electronic Platform Confirmation is subject to another agreement between the Parties other than a master Confirmation applicable to the Parties’ WSPP Confirmations.

32.2 Process For Confirming Standard Confirmation Provisions.

32.2.1 Confirmation of Standard Confirmation Provisions For Transactions of Less Than One Week in Duration.

Confirmation for Standard Confirmation Provisions applicable to transactions of less than one week in duration may be through:
(i) a Documentary Writing (including a Confirmation which is not executed by both Parties but which is binding under Section 32.2.3) or
(ii) an Electronic Writing.

Notwithstanding the foregoing sentence, with respect to a transaction of less than one week in duration as agreed in an Electronic Writing and that is to commence within one week of that agreement, a subsequent proposed confirming Documentary Writing under Section 32.2.3 shall not vary the terms of the Electronic Writing unless the Documentary Writing is executed by both Parties.

32.2.2 Standard Confirmation Provisions For Transactions of One Week or More in Duration.

Written confirmation shall be required for all Standard Confirmation Provisions for transactions of one week or more in duration. Such written confirmation may be made by a Documentary Writing executed by both Parties or a Documentary Writing not executed by both Parties but which is binding under Section 32.2.3.

32.2.3 Written Confirmation Process for Standard Confirmation Provisions.

The Seller shall provide a proposed Documentary Writing containing the proposed Standard Confirmation Provisions which must be received by the Purchaser within five Business Days of the date of the agreement to the transaction. The Purchaser shall have five Business Days from date of receipt to accept or propose modifications to the proposed Documentary Writing. If the Purchaser does not respond within that time period, the Seller’s proposed Documentary Writing shall be considered as accepted and shall be the final Confirmation. If the Seller fails to provide a proposed Documentary Writing within the five Business Days period, then, within the immediately subsequent five Business Days, the Purchaser may submit a proposed Documentary Writing to the Seller. The Seller shall then have five Business Days from date of receipt to accept or propose modifications to the proposed Documentary Writing. If the Seller does not respond within that time period, the Purchaser’s proposed Documentary Writing shall be considered as accepted and shall be the final Confirmation.

32.3 Process for Confirming Non-Standard Confirmation Provisions.

32.3.1 Non-Standard Confirmation Provisions for Transactions of Less Than One Week in Duration. Confirmation for Non-Standard Confirmation Provisions for a transaction of less than one week in duration only may be through: (i) an Electronic Writing; or (ii) in a Documentary Writing executed by both Parties.

32.3.2 Non-Standard Confirmation Provisions for Transactions of One Week or More in Duration. Confirmation for Non-Standard Confirmation

Provisions for transactions of one week or more only shall be through a Documentary Writing executed by both Parties.

32.3.3 WSPP Agreement is a Default Agreement.

If the Parties to a transaction (i) do not reach agreement on any proposed Non-Standard Confirmation Provision and (ii) do not confirm it under Section 32.3.1 or 32.3.2, as applicable, then the term or terms of the Agreement, which the Parties could not reach agreement to modify or change or which are not considered modified pursuant to this Section 32.3, shall apply to the transaction.

32.4 Prior Discussions And Statements

32.4.1 A Confirmation under Section 32.2 and/or 32.3, shall, together with this Agreement, be an integrated contract with respect to the transaction, shall supersede all discussions and negotiations with respect thereto, and 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 unless there is clear and convincing evidence of a mutual mistake in the Confirmation.

32.4.2 Notwithstanding any provision in this Agreement (including Sections

32.3.2 and 32.4.1), until the Confirmation has become final in accordance with Sections 32.2 and/or 32.3 for a transaction, any oral agreement or electronic communication establishing agreement of the Parties relating to such transaction shall remain valid and binding.

32.5 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, 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. 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.

32.6 In the event of a conflict between a binding and effective Confirmation and this Agreement, the Confirmation shall govern.

32.7 The Seller shall not be required to file any Confirmation with FERC except as provided in the Service Schedules.

32.8 Other Products and Service Levels: The Parties may apply this Agreement and make a Confirmation with respect to a product/service level defined under any other document or form of agreement (e.g., the California ISO tariff, the ERCOT agreement or the EEI agreement). The confirmation process set forth in Section

32.3 shall apply to any such Confirmation. Unless the Parties expressly state and agree that all the terms and conditions of such other agreement will apply to any such transaction consistent with Section 32.3, 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 ascribed to them in the different agreement or in the applicable Confirmation.

32.9 Reserved.

32.10 The Parties may agree to modify terms of this Agreement for more than one transaction pursuant to a separate written agreement (a “master confirmation agreement”), which agreement shall be considered part of each Confirmation between the Parties and shall apply to all transactions entered into between the two Parties unless the Parties specifically agree to override such changes for a particular transaction consistent with the procedure in Section 32.2 or 32.3, whichever is applicable.

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 and sell to the Purchaser in accordance with the terms of the Agreement and such Confirmation.

33.1.2 The Purchaser shall receive and purchase the Contract Quantity, as agreed to by the Parties in the applicable Confirmation, at the delivery point(s) and purchase from the Seller in accordance with the terms of the Agreement and such Confirmation.

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; provided, however, with regard to federal agencies or parts of the United States 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, 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 except for actions taken pursuant to Section 21.2. 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 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 of ten (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 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.

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(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(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 EXEMPTION
The Parties intend that any Physically Settled Option under this Agreement shall qualify under the trade option exemption, 17 C.F.R. § 32.3. Accordingly, each Party buying or selling a Physically Settled Option agrees and warrants that any such option 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 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 represents a contract. Each Party also warrants and represents to the other(s) that each of its representatives executing or agreeing through a Confirmation to a transaction under this Agreement is authorized to act on its behalf.

Each Party further warrants and represents that entering into this Agreement and any applicable Confirmation 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, 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.

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 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 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.

38.3 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 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 effective date of the amendment shall be the date on which FERC allows the amendment to become effective; provided, however, if the FERC orders a hearing on a filing under Section 205 of the Federal Power Act proposing an amendment to this Agreement, the amendment as it may be revised by the FERC shall not become effective until the FERC issues its final order (i.e. its order on rehearing before any judicial review) on the 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 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 for a transaction needs no consideration to be binding.

40. 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 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.

41. 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 of signing official:

Title:

Name of Member:

Date:

EXHIBIT A

NETTING
Each Party that executes this Exhibit A to the Agreement agrees to net payments for transactions under the WSPP Agreement and the applicable Confirmation(s) 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 and Confirmation(s), 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 Agreement and the applicable Confirmation(s) 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 Date of Execution
Representative

[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 WSPP Agreement (“WSPP Agreement”) and related Confirmation(s)1 (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 exceed the cap in Section 1(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 1

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.

3. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants that:
(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.

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:

To [Name of Guaranteed Party] ____________________________ ____________________________
____________________________
Attn: _______________________
Fax No.: (___) ________________
To Guarantor: ____________________________
____________________________
____________________________
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 supersedes 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: _______________________

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) Seller: __________________________________
(b) Purchaser: __________________________________
(c) Period of Delivery: From __\__\__ To __\__\__
(d) Schedule (Days and Hours): __________________
(e) Delivery Rate:________________________________
(f) Delivery Point(s): __________________________
(g) 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 _________________ [Describe Product] (h) Contract Quantity: ________ Total MWhrs.
(i) Contract or Strike Price: _____________________
(j) Transmission Path for the Transaction (If Applicable):
(k) Date of Agreement if different: _____________
(l) 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 ________________________ (m) Special Terms and Exceptions:

See Attachment A
[Special Terms and Exceptions shall be shown on an Attachment to this Confirmation.] ___________________________ ___________________________ Name of Trader for Purchaser Name of Trader for Seller
___________________________ ___________________________ Authorized Signature Authorized Signature
for Purchaser for Seller

___________________________ ___________________________ Date Date

EXHIBIT D

WSPP MEDIATION AND ARBITRATION PROCEDURES
I. MEDIATION
A.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.

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 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.

E.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.

F.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 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.

G.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.

H.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.

II. ARBITRATION
A.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.

B.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.

C.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 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.

D.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.

E.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 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.

F.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.

G.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.

H.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.

I.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 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 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.

III. 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.

C.Restrictions on Lawsuits. Each Party shall be subject to the restrictions provided in Section 34.2 of the WSPP Agreement.

D.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.

IV. DEFINITIONS
A.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.

B.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.

C.Business Days. Defined as in the WSPP Agreement.

D.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.

E.Parties. The WSPP members involved in the Mediation or Arbitration which have a direct interest in the dispute.

F.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.

G.WSPP Representative. The Chairman of the WSPP Operating Committee or his or her designee for the purposes of the Arbitration or Mediation.

SERVICE SCHEDULE A

ECONOMY ENERGY SERVICE
A-1 PARTIES:

This Service Schedule is agreed upon as a part of this Agreement by the Parties.

A-2 PURPOSE:

The purpose of this Service Schedule is to define additional specific procedures, terms and conditions for requesting and providing Economy Energy Service.

A-3 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 service hereunder consistent with statutory requirements and contractual commitments including the Agreement and any applicable Confirmation.

A-3.2 Scheduling of Economy Energy Service hereunder shall be a responsibility of the Parties involved.

A-3.3 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 holidays, and communicate this information to all other Parties via the Hub.

A-3.4 Purchasers shall arrange purchases directly with Sellers, and shall be responsible for transmission arrangements.

A-3.5 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.

A-3.6 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).

A-3.7 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;

33.78¢/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-3.6 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. The foregoing hourly rate caps (i) are subject to the submission of cost justification by the applicable Seller to the FERC, and acceptance by FERC thereof, under Western Systems Power Pool, 122 FERC ¶ 61,139 (2008), or (ii) are inapplicable, in the event that the Seller has filed with FERC, and FERC has accepted, a rate schedule applicable solely to such Seller, which rate schedule has been, upon the request of the applicable Seller, incorporated into this Agreement at Schedule “Q” hereof (such incorporation to occur upon Seller’s request without approval of the WSPP Executive Committee).

A-3.8 Unless otherwise agreed, the Purchaser shall be responsible for maintaining operating reserve requirements as back-up for Economy Energy Service purchased and the Seller shall not be required to maintain such operating reserve.

A-3.9 Each Party that is a FERC regulated public utility as defined in A-3.6 shall file the Confirmation 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 or similar agreements with FERC under an applicable FERC accepted market based rate schedule.

SERVICE SCHEDULE B

UNIT COMMITMENT SERVICE
B-1 PARTIES:

This Service Schedule is agreed upon as part of this Agreement by the Parties.

B-2 PURPOSE:

The purpose of this Service Schedule is to define additional specific procedures, terms, and conditions for requesting and providing Unit Commitment Service.

B-3 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. 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.

B-3.2 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-3.3 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: $7.32/kW/month; $1.68/kW/week;

33.78¢/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. 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. The foregoing hourly rate caps (i) are subject to the submission of cost justification by the applicable Seller to the FERC, and acceptance by FERC thereof, under Western Systems Power Pool, 122 FERC ¶ 61,139 (2008), or (ii) are inapplicable, in the event that the Seller has filed with FERC,

and FERC has accepted, a rate schedule applicable solely to such Seller, which rate schedule has been, upon the request of the applicable Seller, incorporated into this Agreement at Schedule “Q” hereof (such incorporation to occur upon Seller’s request without approval of the WSPP Executive Committee).

B-3.7 Start-up costs and no-load costs if included by the Seller shall be stated separately in the price.

B-3.8 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.

B-3.9 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 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 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 or similar agreements with FERC under an applicable FERC accepted market based rate schedule.

B-4 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 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.

SERVICE SCHEDULE C

FIRM CAPACITY/ENERGY SALE OR EXCHANGE SERVICE
C-1 PARTIES:

This Service Schedule is agreed upon as a part of this Agreement by the Parties.

C-2 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.

C-3 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. 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.

C-3.2 Unless otherwise agreed between the Purchaser and the Seller, all transactions shall be prescheduled, subject to any conditions agreed to by schedulers.

C-3.3 Firm capacity transactions shall include buying, selling, or exchanging capacity between Parties with or without associated energy. A firm capacity sale or exchange is a commitment, in accordance with the terms and conditions specified in the Confirmation, of capacity resources.

C-3.4 Firm energy transactions shall include buying, selling, or exchanging firm energy

between Parties in accordance with the terms and conditions specified in the Confirmation.

C-3.5 The price for Firm 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-3.6 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).

C-3.6 Except as provided for in Section C-3.5, the price shall not exceed the Seller's forecasted Incremental Cost plus up to: $7.32/kW/month; $1.68/kW/week;

33.78¢/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. 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.

The foregoing hourly rate caps (i) are subject to the submission of cost justification by the applicable Seller to the FERC, and acceptance by FERC thereof, under Western Systems Power Pool, 122 FERC ¶ 61,139 (2008), or (ii) are inapplicable, in the event that the Seller has filed with FERC, and FERC has accepted, a rate schedule applicable solely to such Seller, which rate schedule has been, upon the request of the applicable Seller, incorporated into this Agreement at Schedule “Q” hereof (such incorporation to occur upon Seller’s request without approval of the WSPP Executive Committee).

C-3.7 Firm Capacity/Energy Sale or Exchange Service shall be interruptible only if the interruption is: (a) within any recall time or allowed by other applicable provisions governing interruptions of service under this Service Schedule, as may be 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; provided, however, this paragraph (c) shall not be used to allow interruptions for reasons other than reliability of service to native load. If service under this Service Schedule is interrupted under Section C-3.7(a) or (b), neither Seller nor Purchaser shall be obligated to pay any damages under this Agreement or Confirmation. If service under

this Service Schedule is interrupted for any reason other than pursuant to Section C-

3.7(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.

C-3.8 Each Party that is a FERC regulated public utility as defined in Section C-3.5 shall file the Confirmation 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 or similar agreements with FERC under an applicable FERC accepted market based rate schedule.

C-3.9 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.

SERVICE SCHEDULE D
OPERATING RESERVE – SPINNING
AND
OPERATING RESERVE –SUPPLEMENTAL
D-1 PURPOSE
This Service Schedule specifies procedures, terms and conditions pursuant to which the Seller provides Operating Reserve – Spinning and/or Operating Reserve – Supplemental, as specified in the Confirmation, to enable the Designated Authority to meet a reserve obligation or to resell as ancillary services under an OATT.

D-2 DEFINITIONS AND RULES ABOUT THIS SERVICE SCHEDULE
D-2.1 Terms used in this Service Schedule with initial capitalization which are not defined in the Agreement or this Service Schedule shall have the meanings given to them in the NERC Glossary and Applicable Standards. In addition to the definitions specified in Section 4 of the Agreement, the following definitions apply to this Service Schedule.

D-2.1.1 “Applicable Standards” means the NERC Reliability Standards and the respective reliability standards and criteria of NERC, and of any Regional Reliability Organization, Balancing Authority, and Reserve Sharing Group applicable to the Seller’s provision and the Designated Authority’s use of Operating Reserve – Spinning or Operating Reserve – Supplemental, in force as of the date of the Confirmation.

D-2.1.2 “Demand Response Resource(s)” has the meaning given in 18 C.F.R. §35.28(b)(5).

D-2.1.3 “Designated Authority” means the Regional Reliability Organization, Balancing Authority, Reserve Sharing Group or other entity designated in the Confirmation,

which shall have a right to apply the applicable Reserve to the quantity of Reserve it is required to maintain, and to use such Reserve in accordance with the Applicable Standards. The Designated Authority and the Purchaser may be the same entity or two different entities. If the Designated Authority and the Purchaser are the same entity, then the Designated Authority shall also be the Purchaser for all purposes under the Agreement.

D-2.1.4 “Good Utility Practice” means any of the practices, methods, and acts engaged in or approved by a significant portion of the electric utility industry during the applicable time period in the applicable region, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision in question was made, could have been expected to accomplish the desired result in a manner that: (a) is consistent with the Applicable Standards; (b) gives due consideration to reliability, safety and protection of equipment and the public welfare; and (c) is consistent with good business practices, reliability, safety, and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method or act, or the exclusion of all other practices, but rather to be a range of acceptable practices, methods, or acts generally accepted in the region.

D-2.1.5 “NERC Glossary” means the NERC Glossary of Terms Used in Reliability Standards.

D-2.1.6 “Non-Performance” with respect to Seller shall have the meaning given in Section D-4.1, and with respect to Purchaser, the meaning given in Section D-4.2.

D-2.1.7 “OATT” refers to the Open Access Transmission Tariff of the Designated

Authority or, if the Designated Authority has no OATT, the pro forma Open Access Transmission Tariff of the FERC.

D-2.1.8 “OATT Schedule” refers to schedule 5 or 6 of the OATT for sale of ancillary services, or any other schedule under an OATT for sale of Operating Reserve – Spinning or Operating Reserve – Supplemental.

D-2.1.9 “Operating Reserve – Spinning” shall have the meaning given in the NERC Glossary of Terms and the Applicable Standards, and is the product transacted under schedule 5 or similar schedule under an OATT.

D-2.1.10 “Operating Reserve – Supplemental” shall have the meaning given in the NERC Glossary of Terms and the Applicable Standards, and is the product transacted under schedule 6 or similar schedule under an OATT.

D-2.2 The following rules apply to this Service Schedule.

D-2.2.1 In the event of inconsistency between the definition in the NERC Glossary of Terms and the Applicable Standards, the Applicable Standards shall control.

D-2.2.2 No product sold or transferred under this Service Schedule D shall include reactive supply and voltage control service, or Regulation and Frequency Response service.

D-2.2.3 The OATT, OATT Schedules, regulations of the FERC, the NERC Glossary, and Applicable Standards shall be applied in their forms as of the date of the Confirmation.

D-3 TERMS OF SERVICE
D-3.1 Each Confirmation entered into under this Service Schedule shall contain the following information, and may contain other terms and conditions to which the Parties agree:

(a) A prominent designation of the service, Operating Reserve – Spinning and/or Operating Reserve – Supplemental, to which the Confirmation applies; (b) Identification of the Designated Authority and if the Designated Authority is not a Regional Reliability Organization, the Regional Reliability Organization within which the Designated Authority is electrically located;
(c) The Standard Confirmation Provisions, as applicable; (d) Any additional attributes of the Operating Reserve – Spinning or Operating Reserve – Supplemental, as the Parties may agree;
(e) The means by which requests for energy required to be delivered under the Service Schedule shall be communicated; and
(f) Any conditions to the effectiveness of the Confirmation, including, for example, the completion of any arrangements or agreements between the Seller and the Designated Authority or among the Seller, Designated Authority, and Purchaser.

D-3.2 Contract Price. The Contract Price may include separately stated charges for capacity and energy, and any agreements concerning transmission arrangements and payment obligations.

D-3.3 Seller shall provide Operating Reserve – Spinning or Operating Reserve – Supplemental, as applicable, to the Designated Authority in conformity with the Applicable Standards and any additional attributes specified in the Confirmation as are consistent with the Applicable Standards. Seller shall provide such service from one or more generation resources or Demand Response Resources. Such resources must be physically and operationally available to respond within the time periods, and in conformance with other technical and operational criteria, prescribed by, the Applicable Standards for the applicable service, and

as required to conform to any additional attributes stated in the Confirmation.

D-3.4 Obligations Concerning Capacity and Requests for and Delivery of Energy D-3.4.1 Seller shall provide capacity and deliver energy associated with Operating Reserve – Spinning or Operating Reserve – Supplemental, in quantities up to the applicable capacity(ies) specified in the Confirmation for the applicable hour(s), as and when the Designated Authority requests such delivery in the manner of request specified in the Confirmation and in accordance with Section D-3.4.2.

D-3.4.2 The Designated Authority shall use the capacity and energy provided by Seller under this Service Schedule for the sole purpose of satisfying the Designated Authority’s own obligations pertaining to Operating Reserve – Spinning and Operating Reserve – Supplemental, as specified in the Applicable Standards or the Confirmation. Purchaser shall ensure that the Designated Authority shall not require Seller to deliver energy under this Service Schedule except as and when the Designated Authority determines, in its good faith discretion reasonably exercised in accordance with Good Utility Practice or such other criteria as may be stated in the Confirmation, that such energy is required to enable it to respond to a contingency or other event for which the service specified in the Confirmation is permitted to be utilized under the Applicable Standards or as otherwise stated in the Confirmation.

D-3.5 Inspection and Audit. The Purchaser and Designated Authority shall have the right, to conduct such inspections and audits of Seller’s records as are reasonable to assure that the Seller’s provision of services under this Service Schedule and Confirmation conforms to the Applicable Standards and the Confirmation. The Seller shall have the right to conduct

inspections and audits of the Designated Authority’s records as reasonably required to assure that any use by the Designated Authority of the services under this Service Schedule and Confirmation conformed to Section D-3.4.2 and the Confirmation. The Parties may state further details and conditions in the Confirmation concerning these rights, including, for example, provisions concerning confidentiality or limiting inspection to an agreed third-party auditor.

D-3.6 Regulatory Matters – Rate Caps
D-3.6.1 The price for Operating Reserve – Spinning or Operating Reserve – Supplemental shall not be subject to the rate caps specified in Section D-3.6.2 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).

D-3.6.2 Except as provided for in Section D-3.6.1, the price shall not exceed the Seller's forecasted Incremental Cost plus up to: $7.32/kW/month; $1.68/kW/week;

33.78¢/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. 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.

The foregoing hourly rate caps (i) are subject to the submission of cost justification by the applicable Seller to the FERC, and acceptance by FERC thereof, under Western Systems Power Pool, 122 FERC ¶ 61,139 (2008), or (ii) are inapplicable, in the event that the Seller has filed with FERC, and FERC has accepted, a rate schedule applicable solely to such Seller, which rate schedule has been, upon the request of the applicable Seller, incorporated into this Agreement at Schedule “Q” hereof (such incorporation to occur upon Seller’s request without approval of the WSPP Executive Committee).

D-4 NON-PERFORMANCE, DAMAGES AND TERMINATION
D-4.1 Seller Non-Performance. “Non-Performance” with respect to Seller means Seller’s failure to provide capacity or deliver energy to the Designated Authority as this Service Schedule

and the Confirmation require.

D-4.1.1 Purchaser Entitlement to Damages. In the event of Non-Performance by Seller, Seller shall pay damages to Purchaser calculated in accordance with Section 21.3 of the Agreement.

D-4.1.2 Purchaser Option to Terminate. Purchaser shall have an option to declare any instance of Seller’s Non-Performance under Section D-4.2 an Event of Default under the Agreement and the remedies for an Event of Default under Section

22.2(b) of the Agreement shall apply (excluding Section 22.2(a)), provided, that the right to terminate transactions for such Non-Performance shall be limited to transactions under this Service Schedule D. Exercise of the termination option under this Section D-4.1.2 shall not diminish the performing Party’s rights to collect damages for such Non-Performance under Section D-4.1.1, or to avail itself of remedies for other Events of Default.

D-4.2 Purchaser Non-Performance. “Non-Performance” with respect to the Purchaser means the Designated Authority’s failure to receive capacity and/or energy, or the Designated Authority’s use of capacity and/or energy under this Service Schedule which use does not conform to Section D-3.4.2 (such capacity and/or energy, the “unauthorized energy”).

D-4.2.1 Seller Entitlement to Damages. In the event of Non-Performance by Purchaser, Purchaser shall compensate Seller in an amount equal to the quantity of unauthorized energy Seller was required to deliver during each hour, multiplied by the energy charge for the applicable hour.

D-4.2.2 Seller Option to Terminate. Seller shall have an option to declare any instance of Purchaser’s Non-Performance under Section D-4.2 an Event of Default under the

Agreement and the remedies for an Event of Default under Section 22.2(b) of the Agreement shall apply (but not Section 22.2(a)), provided that the right to terminate all transactions for such Non-Performance shall be limited to transactions under this Service Schedule D. Exercise of the termination option under this Section D-4.2.2 shall not diminish the performing Party’s rights to collect damages for such Non-Performance under Section D-4.2.1, or to avail itself of remedies for other Events of Default under the Agreement.

D-4.3 Termination under Section D-4.1.2 or D-4.4.2 shall become effective immediately upon receipt by the non-performing Party of the Performing Party’s written notice thereof, which notice shall specify the Non-Performance. If the Performing Party fails to exercise its termination option arising from an instance of Non-Performance under Section D-4.1.2 or D-4.2.2 within thirty (30) days following the date the option to terminate arose, then solely with respect to that instance of Non-Performance, the termination option shall cease to be available to the Performing Party.

D-4.4 Nothing in this Service Schedule shall restrict the right of either Party to avail itself of other remedies provided in the Agreement.

SERVICE SCHEDULE E

ENERGY IMBALANCE AND GENERATOR IMBALANCE POWER
E-1 PURPOSE
This Service Schedule states procedures, terms and conditions pursuant to which the Seller provides Energy Imbalance Power and Generation Imbalance Power to the Purchaser, as specified in the Confirmation, and the Purchaser receives such service to meet a reliability obligation or to resell as ancillary services under an OATT.

E-2 DEFINITIONS AND RULES ABOUT THIS SERVICE SCHEDULE
E-2.1 In addition to the definitions specified in Section 4 of the Agreement, the following definitions apply to this Service Schedule E.

E-2.1.1 “Balancing Power” means a service or product that can be resold as Energy Imbalance Power or Generator Imbalance Power under Schedules 4 and 9, respectively, of the OATT or other schedule under an OATT for sale of imbalance power.

E-2.1.2 “Demand Response Resource(s)” has the meaning given in 18 C.F.R. §35.28(b)(5).

E-2.1.3 “Non-Performance” with respect to Seller shall have the meaning given in Section E-4.1 and with respect to Purchaser the meaning given in Section E-4.2.

E-2.1.4 “OATT” refers to the Purchaser’s Open Access Transmission Tariff approved by the FERC or, if the Purchaser has no OATT, the pro forma Open Access Transmission Tariff of the FERC.

E-2.1.5 “OATT Schedule” refers to schedule 4 or 9 of the OATT for sale of ancillary services, or any other schedule for sale of imbalance power under an OATT.

E-2.2 The following rules apply to this Service Schedule.

E-2.2.1 No product sold or transferred under this Service Schedule E shall include reactive supply and voltage control service, or Regulation and Frequency Response service.

E-2.2.2 The OATT and OATT Schedules shall be applied in their forms as of the date of the Confirmation.

E-3 TERMS OF SERVICE
E-3.1 Each Confirmation entered into under this Service Schedule shall contain the following information, and may contain other terms and conditions to which the Parties agree:
(a) A prominent designation of the service, Energy Imbalance and Generator Imbalance Power, to which the Confirmation applies;
(b) The Standard Confirmation Provisions, as applicable; (c) Any additional attributes of the Balancing Power, as the Parties may agree; (d) The means by which requests for energy required to be delivered under the Service Schedule shall be communicated; and
(e) Any conditions to the effectiveness of the Confirmation.

E-3.2 Contract Price. The Contract Price may include separately stated charges for capacity and energy, and any agreements concerning transmission arrangements and payment obligations.

E-3.3 Seller shall provide Balancing Power from one or more generation resources or Demand Response Resources. Such resources must be physically and operationally available to respond within the time periods, and in conformance with other technical and operational criteria, as may be stated in the Confirmation.

E-3.4 Obligations Concerning Capacity and Requests for and Delivery of Energy

E-3.4.1 Upon the requests of the Purchaser, Seller shall provide capacity and deliver energy associated with Balancing Power to the Purchaser at any rate of flow up to and including the applicable capacity(ies) and at such intervals as are specified in the Confirmation for the applicable hour(s).

E-3.4.2 Transmission must be available intra-hour, and may be arranged and scheduled in any manner that meets the requirements of the Parties.

E-3.5 Regulatory Matters – Rate Caps
E-3.5.1 The price for Balancing Power shall not be subject to the rate caps specified in Section E-3.5.2 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).

E-3.5.2 Except as provided for in Section E-3.5.1, the price shall not exceed the Seller's forecasted Incremental Cost plus up to: $7.32/kW/month; $1.68/kW/week;

33.78¢/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. 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.

The foregoing hourly rate caps (i) are subject to the submission of cost justification by the applicable Seller to the FERC, and acceptance by FERC thereof, under Western Systems Power Pool, 122 FERC ¶ 61,139 (2008), or (ii) are inapplicable, in the event that the Seller has filed with FERC, and FERC has accepted, a rate schedule applicable solely to such Seller, which rate schedule has been, upon the request of the applicable Seller, incorporated into this Agreement at Schedule “Q” hereof (such incorporation to occur upon Seller’s request without approval of the WSPP Executive Committee).

E-4 NON-PERFORMANCE, DAMAGES AND TERMINATION
E-4.1 Seller Non-Performance. “Non-Performance” with respect to Seller means Seller’s failure to provide capacity or deliver energy to the Purchaser as this Service Schedule and the Confirmation require.