Text

Texas Genco, LP Decommissioning Master Trust Agreement
	ML050670060
Person / Time
Site:	South Texas
Issue date:	03/01/2005
From:	Sheppard J; South Texas
To:	Dyer J; Office of Nuclear Reactor Regulation
References
	NOC-AE-05001857, TAC MC4732, TAC MC4733, TAC MC4917, TAC MC4918
	Download: ML050670060 (104)
	v • d • e

-Au mu Nuclear Operating Company A_ __ _

South Thtas PJ*c Electki GerirtlnStabLlo PO. Box 2829 MTwdsrh. Tew 774&1 A March 1, 2005 NOC-AE-05001857 10 CFR 50.80 10 CFR 50.90 U. S. Nuclear Regulatory Commission Attention: James E. Dyer Director, Office of Nuclear Reactor Regulation One White Flint North 11555 Rockville Pike Rockville, MD 20852 South Texas Project Units I and 2 Docket Nos. STN 50-498 and STN 50-499

- Texas Genco, LP Decommissioning Master Trust Agreement (TAC Nos. MC4917. MC4918. MC4732. MC4733)

Texas Genco, LP (Texas Genco) has prepared the attached Texas Genco, LP Decommissioning Master Trust Agreement No. 2 for the South Texas Project (Trust Agreement No. 2) to provide for the terms governing the portion of its ownership interest in the South Texas Project being acquired from AEP Texas Central Company (TCC). Trust Agreement No. 2 is substantially based upon the terms of Texas Genco's existing master trust agreement for its decommissioning funds, and deviations from that existing agreement are reflected in the attached black-line comparison between Trust Agreement No. 2 and the existing agreement. As such, both agreements are in compliance with the trust agreement conditions in Section 2.C.(8) of the Unit 1 operating license and Section 2.C.(6) of the Unit 2 operating license.

Trust Agreement No. 2 includes additional terms relating to the TCC share being acquired that have been incorporated in order to comply with requirements of the Public Utility Commission of Texas (PUCT). This agreement has been submitted to the PUCT for review.

There are no commitments in this letter.

If there are any questions regarding the Decommnissioning Master Trust Agreement No. 2, please contact John Conly at (361) 972-7336 or me at (361) 972-8757. Service of any related filings should be made to: John E.

Matthews at Morgan, Lewis and Bockius LLP, 1111 Pennsylvania Ave. N.W., Washington, DC 20004 (jmatthews@morganlewis.com) (tel: 202-739-5524) on behalf of STP Nuclear Operating Company; Stan Blanton, Balch & Bingham LLP, 1710 Sixth Avenue North, Birmingham, AL (sblanton@balch.com) (tel. 205-226-3417) on behalf of Texas Genco LLC; and Gerry Garfield, Day, Berry & Howard LLP, CityPlace I, 185 Asylum Street, Hartford, CT 06103, (ggarfield@dbh.com) (tel. 860-275-0182) for Texas Genco and CenterPoint Energy.

J. Seppa President and CEO _ 0 jtc Attachments: Texas Genco, LP Decommissioning Master Trust Agreement No. 2 for the South Texas Project Texas Genco, LP Decommissioning Master Trust Agreement No. 2 for the South Texas Project (black-line comparison to existing

.; 3 agreement)

STI: 31847395

NOC-AE-05001857 Page 2 of 3 cc:

(paper copy) (electronic copy)

Regional Administrator, Region IV A. H. Gutterman U.S. Nuclear Regulatory Commission J. E. Matthews 611 Ryan Plaza Drive, Suite 400 Morgan, Lewis & Bockius LLP Arlington, TX 76011-8064 James J. Nesrsta U. S. Nuclear Regulatory Commission Robert K. Temple Attention: Document Control Desk E. Alarcon One White Flint North City Public Service 11555 Rockville Pike Rockville, MD 20852 R. L. Balcom Texas Genco, LP Steven R. Hom C. A. Johnson Alex McKeigney AEP Texas Central Company U. S. Nuclear Regulatory Commission One White Flint North Jon C. Wood 11555 Rockville Pike Cox Smith Matthews Rockville, MD 20852 Chris Kirksey City of Austin Jeffrey Cruz U. S. Nuclear Regulatory Commission Jay E. Silberg P. 0. Box 289, Mail Code: MN1 16 Matias F. Travieso-Diaz Wadsworth, TX 77483 Shaw Pittman LLP Richard A. Ratliff David H. Jaffe Bureau of Radiation Control U. S. Nuclear Regulatory Commission Texas Department of State Health Services 1100 West 49th Street Rocky Miracle Austin, TX 78756-3189 AEP C. M. Canady Stan Blanton City of Austin Balch & Bingham Electric Utility Department 721 Barton Springs Road Rufus Scott Austin, TX 78704 Texas Genco, LP Gerry Garfield Day, Berry & Howard LLP Michael Gibbs Jones Day

NOC-AE-05001857 Page 3 of 3 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

STP Nuclear Operating Company ) Dock-et Nos. 50-498

) 50499 South Texas Project Units 1 and2 )

AFFIRMATION 1,Jerome D. Svatek, being duly sworn, hereby depose and state that I am Vice President, Asset Management for Texas Genco GP, LLC, which is the General Partner of Texas Genco, LP (Texas Genco), and as such exercises control over Texas Genco; that I am familiar with the content of the attached Decommissioning Master Trust Agreement No. 2; and that the matters set forth therein with regard to Texas Genco and its affiliates are true and correct to the best of my knowledge and belief.

J ome D. Svatek Vice President, Asset Management STATE OF TEXAS )

)

COUNTY OF HARRIS )

Subscribed and sworn to before me, a Notary Public in and for the State of Texas, this 1. day of jJ)JQk,0 , , 2005.

C, JOYCE WEST Waly PNkrSle oJtexas 7). o MyExpbn Cmri' 52IrM

TEXAS GENCO, LP DECOMMISSIONING MASTER TRUST AGREEMENT NO. 2 FOR THE SOUTH TEXAS PROJECT

, 2005 NYI-2l6S8Olvl4

TABLE OF CONTENTS Page ARTICLE I DEFINITIONS, PURPOSE AND NAME .................................................. 3 1.01. Definitions ................................................. 3 1.02. Authorization........................................................................................................ 10 1.03. Master Trust Purpose ......... 0 0............................

1.04. Establishment of Master Trust ................................................. 10 1.05. Company to Be Beneficiary ................................................. 11 1.06. Name of Master Trust ................................................. 1I ARTICLE II DISPOSITIVE PROVISIONS ................................................. 11 2.01. Additions to Master Trust ................................................. 11 2.02. Adjustments for Excess Contributions ................................................. 11 2.03. Authorized Representatives ................................................. 12 2.04. Disbursements from the Funds ................................................. 12 2.05. No Commingling; Transfers Between Funds ................................................. 15 2.06. Designation of Funds ................................................. 16 2.07. No Transferability of Interest in Master Trust; Exception ................................... 16 2.08. Termination of Master Trust ................................................. 16 2.09. Termination of Funds of Master Trust ....................... .......................... 17 ARTICLE III MASTER TRUST MANAGEMENT AND ADMINISTRATION ............... 18 3.01. Duties of Management ................................................. 18 3.02. Duties of Administration ................................................. 18 3.03. Limitations on Actions ................................................. 19 3.04. Texas Trust Code Controls ................................................. 19 ARTICLE IV ACCOUNTS AND REPORTS ................................................. 19 4.01. Establish Fund Accounts ................................................. 19 4.02. Accounts; Quarterly and Annual Reports ................................................. 19 4.03. Tax Returns and Monthly Reports ................. ................................ 20 ARTICLE V INVESTMENTS ................................................. 22 5.01. Investments in Eligible Investments .................... ............................. 22 5.02. Investment Authority; Investment Managers ................................................. 22 5.03. Limitations on Investment Transactions ............................ ..................... 25 5.04. Disposition of Investments ................................................. 26 5.05. Allocation of Income ................................................. 26 5.06. Settlement of Transactions ................................................. 27 5.07. Reimbursement..................................................................................................... 27 ARTICLE VI THE TRUSTEE ................................................. 28 6.01. General Powers ................................................. 28 6.02. Designation and Qualification of Successor Trustee(s) ............................. .......... 31 6.03. Resignation............................................................................................................

l 32 NYI- 2165801v14

TABLE OF CONTENTS (continued)

Page 6.04. Compensation .......................................................... 32 6.05. Liability .......................................................... 33 6.06. Indemnity of Trustee .......................................................... 34 ARTICLE VII THE FUND ADMINISTRATOR .......................................................... 34 7.01. General Powers .......................................................... 34 7.02. Designation and Qualification of Successor Fund Administrator(s) ................... 35 7.03. Compensation .......................................................... 36 7.04. Liability .......................................................... 36 7.05. Indemnity of Fund Administrator .......................................................... 37 7.06. Schedule of Fund Administrator's Affiliates ....................................................... 37 ARTICLE VIII MISCELLANEOUS .......................................................... 37 8.01. Schedule of Company Affiliates .......................................................... 37 8.02. Alterations and Amendments .......................................................... 37 8.03. Headings .......................................................... 38 8.04. Particular Words .......................................................... 38 8.05. Parties Interested Herein .......................................................... 38 8.06. Severability of Provisions .......................................................... 39 8.07. Form and Content of Communications .......................................................... 39 8.08. Delivery of Notices Under Agreement .......................................................... 39 8.09. Successors and Assigns .......................................................... 40 8.10. Governing Jurisdiction .......................................................... 40 8.11. Counterparts .......................................................... 40 8.12. Compliance with Laws, Rules and Regulations ................................................... 41 8.13. Force Majeure .......................................................... 41 EXHIBITS Exhibit A Disbursement Certificate Exhibit B Schedule of Fund Administrator and Company Affiliates Exhibit C Investment Guidelines Exhibit D Portfolio Review Actions of Trustee for Funds Managed by Investment Manager NYI- 2165801v14 -ii-

DECOMMISSIONING MASTER TRUST AGREEMENT NO. 2 FOR THE SOUTH TEXAS PROJECT THIS TRUST AGREEMENT made as of , 2005 by and among AEP Texas Central Company, a Texas corporation ("TCC", or, in its capacity as initial Fund Administrator under this Agreement, the "Fund Administrator"), Texas Genco, LP, a Texas limited partnership (the "Company"), and Mellon Bank, N.A., a national banking association having trust powers (the "Trustee").

WHEREAS, the Company is the owner of: (1) a - percent undivided interest in Unit No. One of the South Texas Project Electric Generating Station (the "STP Unit No. 1 Additional Interest"); (2) a - percent undivided interest in Unit No. Two of the South Texas Project Electric Generating Station (the "STP Unit No. 2 Additional Interest"); and (3) a - percent undivided interest in certain facilities serving both STP Unit No. I and STP Unit No. 2 (the "Common Facilities Additional Interest"); all acquired from AEP Texas Central Company pursuant to that certain Purchase and Sale Agreement by and between AEP Texas Central Company, City of San Antonio, acting by and through the City Public Service Board of San Antonio ("CPS") and the Company dated as of September 3, 2004 (the "PSA"); and WHEREAS, the Company for purposes of this Trust is subject to regulation by the Public Utility Commission of Texas (the "PUC"), an agency of the State of Texas, and by the Nuclear Regulatory Commission (the "NRC"), an agency of the United States government; and WHEREAS, the NRC has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations, Part 50, requiring the Company, as a holder of a license issued pursuant to 10 C.F.R., Part 50, to provide assurance that funds will be available when needed for required decommissioning activities; and NYI-2165801v14

WHEREAS, the PUC has adopted PUC Substantive Rule § 25.303, which, jilter alia, prescribes TCC's continuing responsibility for collecting decommissioning funds through its rates pursuant to Public Utility Regulatory Act ("PURA") § 39.205; and WHEREAS, pursuant to PUC Substantive Rule § 25.303 and the PSA, TCC and the Company have entered into a Decommissioning Funds Collection Agreement of even date herewith (the "DFCA"); and WHEREAS, pursuant to Section 468A of the Internal Revenue Code of 1986, certain Federal income tax benefits are available to the Company by creating and funding qualified decommissioning funds associated with the South Texas Project Electric Generating Station; and WHEREAS, the PUC has authorized TCC, pursuant to PURA § 39.205, to include in its cost of service for ratemaking purposes certain amounts to be collected as nonbypassable charges from retail customers and to be contributed by TCC to decommissioning funds in order to provide monies for the decommissioning costs with respect to the STP Unit No. 1 Additional Interest, the STP Unit No. 2 Additional Interest and the Common Facilities Additional Interest; and WHEREAS, the Company wishes to maintain a qualified trust fund with respect to each of the STP Unit No. 1 Additional Interest and the STP Unit No 2 Additional Interest, and one or more non-qualified trust funds with respect to the STP Unit No. 1 Additional Interest and the STP Unit No. 2 Additional Interest to accumulate monies with which to pay the Company's share of decommissioning costs for the STP Unit No. I Additional Interest, the STP Unit No. 2 Additional Interest and the Common Facilities Additional Interest; NOW, THEREFORE, in consideration of the mutual promises herein contained, and TCC's agreement pursuant to the DFCA to deliver or have delivered to the Trustee Contributions NYI-2165801v14

of monies, the Trustee hereby agrees to continue to receive the Contributions of monies to the Master Trust; TO HAVE AND TO HOLD such monies and such additional monies as may from time to time be added thereto as provided herein, together with the proceeds and reinvestments thereof (hereinafter collectively called the "Master Trust");

IN TRUST NEVERTHELESS, for the uses and purposes and upon the terms and conditions hereinafter set forth:

ARTICLE I DEFINITIONS, PURPOSE AND NAME 1.01. Definitions. As used in this Agreement, the following terms shall have the following meanings:

(a) "Accounting Period" shall mean a tax year, as interpreted in accordance with the Code; Accounting Periods shall end on December 31 of each year.

(b) "Administrative Costs" shall mean all ordinary and necessary expenses and other incidental costs incurred in connection with the operation of the Funds, including, but not limited to, taxes, Trustee fees, Investment Manager fees, fees and expenses of the Fund Administrator, and fees and expenses of TCC for acting as the collection agent with respect to the nonbypassable nuclear decommissioning charges to the extent authorized by applicable laws, including rules and orders of the PUC, and the fees and/or compensation of any professional advisors, legal counsel or, administrative support hired by the Company or the Fund Administrator as provided in Section 3.01 or incurred in the discharge of the Trustee's fiduciary obligations under this Agreement.

(c) "Agreement" shall mean and include this Decommissioning Master Trust Agreement as the same may from time to time be amended, modified or supplemented.

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(d) "Authorized Representative" shall mean, with respect to the Company, the Chief Executive Officer, President, any Vice President or the Treasurer of the Company's general partner, Texas Genco GP, LLC; and with respect to the Fund Administrator the persons designated by the Fund Administrator pursuant to Section 2.03.

(e) "Certificate" shall mean a written certificate signed by the Company.

(f) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

(g) "Common Facilities" shall mean facilities at the South Texas Project Electric Generating Station designed to serve both STP Unit No. 1 and STP Unit No. 2.

(h) "Common Facilities Additional Interest" shall have the meaning set forth in the preamble hereto.

(i) "Company" shall have the meaning set forth in the preamble hereto and shall include any successor thereto. The actions of the Company may be performed by an Authorized Representative as provided in Sections 1.01(d) and 2.03 hereof.

(j) "Contributions" shall mean all Non-Qualified Contributions and all Qualified Contributions.

(k) "CPS" shall have the meaning set forth in the preamble hereto.

(l) "Decommissioning Costs" shall mean all costs incurred in connection with the entombment, decontamination, dismantlement, removal and disposal of the structures, systems and components of a Unit or Common Facilities, including all costs incurred in connection with the preparation for decommissioning, such as engineering and other planning expenses, and all expenses incurred with respect to the Unit or Common NYI-2165801v14

Facilities after actual decommissioning occurs, such as physical security and radiation monitoring expenses.

(m) "DFCA" shall have the meaning set forth in the preamble hereto.

(n) "Disbursement Certificate" shall mean a document properly completed and executed by the Company or the Fund Administrator, as the case may be, substantially in the form of Exhibit A hereto.

(o) "Eligible Investments" shall mean such securities, bank deposits, collective, commingled or mutual funds or other investments that are permitted to be purchased and held for the account of the Fund in which the investment is proposed to be acquired under (1) applicable federal, state and other governmental laws, rules and regulations, including without limitation PUC Substantive Rule 25.303, and (2) the Investment Guidelines then in effect with respect to the Fund for which the investment is proposed to be acquired. Except for investments in funds tied to market indices or other non-nuclear sector collective, commingled or mutual funds, the assets of the Funds shall not be invested in the securities or other obligations of (i) the Fund Administrator, the Company or affiliates of any thereof, or their successors or assigns, or (ii) any entity owning or operating one or more nuclear power plants or any affiliates, subsidiaries, successors or assigns of any such entity. Notwithstanding anything contained in this Agreement to the contrary, the term "Eligible Investments" when used in reference to the Investment Manager shall mean investments permitted by the applicable Investment Manager Agreement and Investment Guidelines.

(p) "Excess Contribution" shall have the meaning set forth in Section 2.02 hereof.

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(q) "Fund Administrator" shall have the meaning set forth in the preamble hereto and shall include any successor thereto. The actions of the Fund Administrator may be performed by an Authorized Representative pursuant to Sections 1.01(d) and 2.03 hereof.

(r) "Funds" shall mean the Qualified Funds and the Non-Qualified Funds.

(s) "Investment Guidelines" shall mean any written statement or statements, attached hereto as Exhibit C, of the Fund Administrator in effect at a given time that incorporates the investment requirements and restrictions of PUC Substantive Rule

§ 25.303 and details any other applicable investment criteria and standards which shall be consistent with the investment requirements and restrictions of PUC Substantive Rule

§ 25.303, with respect to one or more Funds or portions thereof. The Fund Administrator may at any time, or from time to time, adopt new or additional Investment Guidelines, or amend, supersede, or terminate effective Investment Guidelines by delivering a copy of the new or additional Investment Guidelines or notice of amendment, supersession or termination to the Trustee, the Company, and any affected Investment Manager, provided that any such new, amended or additional Investment Guidelines shall incorporate (or be consistent with) the investment requirements and restrictions of PUC Substantive Rule

§ 25.303.

(t) "Investment Manager" shall mean a fiduciary specified in an Investment Manager Agreement:

(i) which has been retained by the Fund Administrator to manage, acquire or dispose of any asset belonging to the Master Trust; and (ii) which is:

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(A) registered as an investment adviser under the Investment Advisers Act of 1940, or (B) a bank as defined in that Act, or (C) an insurance company qualified to perform services described in subsection (i) above, under the laws of more than one state, and (iii) which has acknowledged, in writing, that it is a fiduciary with respect to the Master Trust, that it is qualified to act under subsection (ii) above, and has agreed to be bound by all of the terms, provisions and covenants of this Agreement applicable to it.

(u) "Investment Manager Agreement" shall mean an agreement between the Fund Administrator, the Company and an Investment Manager selected by the Fund Administrator, which agreement governs the management of all or a portion of the assets of the Master Trust.

(v) "Master Trust" shall consist of all contributions to any Fund together with investments and reinvestments thereof and any income earnings and appreciation thereon.

(w) "Non-Qualified Contributions" shall mean all amounts contributed to the Non-Qualified Funds.

(x) "Non-Qualified Funds" shall mean the Fund or Funds, as determined by the Trustee and the Company, established and maintained under the Master Trust for decommissioning STP Unit No. 1, STP Unit No. 2, and the Common Facilities to which monies are contributed, which Funds are not subject to the conditions and limitations of Section 468A.

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(y) "NRC" shall mean the Nuclear Regulatory Commission, an agency of the United States of America, or its successor.

(z) "PSA" shall have the meaning set forth in the preamble hereto.

(aa) "PUC" shall mean the Public Utility Commission of Texas, as authorized pursuant to the PURA, or its successor.

(bb) "PUC Substantive Rule 25.303" shall mean the rules and regulations adopted by the PUC, effective October 26, 2004, published in the Texas Register as Tex.

Public Utility Comm'n, _ Tex. Reg. _ et seq. (2004) and codified at 16 Tex.

Admin. Code § 25.303, as such section may be amended, and any successors thereto.

(cc) "PURA" shall mean the Public Utility Regulatory Act, Texas Utilities Code, Title 2 (1997), as amended from time to time.

(dd) "Qualified Contributions" shall mean all amounts collected by TCC in cost of service rates approved by the PUC and contributed to the Qualified Funds for Decommissioning Costs and Administrative Costs of the Units pursuant to the DFCA.

(ee) "Qualified Funds" shall mean the STP Unit No. 1 Qualified Fund or the STP Unit No. 2 Qualified Fund.

(ff) "Schedule of Ruling Amounts" shall mean a schedule requested and received in a ruling from the Service in accordance with Section 468A(d)(1) of ruling amounts as defined in Section 468A(d)(2).

(gg) "Section 468A" shall mean Section 468A of the Code, and any regulations and rulings of the Service thereunder, as such section and regulations may be amended, and any successors thereto.

(hh) "Service" shall mean the Internal Revenue Service.

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(ii) "STP Unit No. 1" shall mean Unit No. One of the South Texas Project Electric Generating Station.

(jj) "STP Unit No. 1 Additional Interest" shall have the meaning set forth in the preamble hereto.

(kk) "STP Unit No. 1 Qualified Fund" shall mean the Fund established and maintained under the Master Trust for decommissioning STP Unit No. 1 and Common Facilities to which monies are contributed subject to the conditions and limitations of Section 468A.

(11) "STP Unit No. 2" shall mean Unit No. Two of the South Texas Project Electric Generating Station.

(mm) "STP Unit No. 2 Additional Interest" shall have the meaning set forth in the preamble hereto.

(nn) "STP Unit No. 2 Qualified Fund" shall mean the Fund established and maintained under the Master Trust for decommissioning STP Unit No. 2 and Common Facilities to which monies are contributed subject to the conditions and limitations of Section 468A.

(oo) "TCC" means AEP Texas Central Company, a Texas corporation, in its capacity as collection agent under and pursuant to the DFCA, and shall include its successors and assigns, in such capacity.

(pp) "Trustee" shall mean Mellon Bank, N.A., or its successors.

(qq) "Units" shall mean STP Unit No. 1, STP Unit No. 2 and the Common Facilities, collectively.

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1.02. Authorization. Each of the Fund Administrator, the Trustee and the Company hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Agreement, and has taken all action necessary to authorize the execution of this Agreement by the officers and persons signing it.

1.03. Master Trust Purpose. The exclusive purpose of this Master Trust is to provide funds for the decommissioning of the Units, and in that regard this Master Trust shall accumulate, invest, reinvest and hold monies for the decommissioning of the Units, and to disburse monies for that purpose. The Qualified Funds shall constitute qualified nuclear decommissioning funds for the Units within the meaning of Section 468A. The assets of the Qualified Funds must be used as authorized by Section 468A. It is not contemplated that the Non-Qualified Funds shall constitute qualified nuclear decommissioning funds for the Units within the meaning of Section 468A.

1.04. Establishment of Master Trust. By execution of this Agreement:

(a) the Company and the Fund Administrator irrevocably establish the Master Trust, which shall consist of all Contributions as may now or hereafter be delivered by or on behalf of the Company to the Trustee, investments and reinvestments thereof, and earnings and appreciation thereon; (b) the Company and the Fund Administrator establish the Funds, each of which shall constitute a trust consisting of all Contributions as may now or hereafter be delivered to the Trustee by or on behalf of the Company and designated for such Fund, together with investments and reinvestments thereof and earnings and appreciation thereon; and NYI-2165801 v14

(c) the Fund Administrator appoints Mellon Bank, N.A. as Trustee of the Master Trust and each of the Funds.

It is the intention of the Fund Administrator, the Company and the Trustee that this Agreement create an express trust under the laws of the State of Texas.

1.05. Company to Be Beneficiar . The beneficial ownership of the Funds, subject to the purpose of the Master Trust, shall be at all times in the Company.

1.06. Name of Master Trust. The Master Trust created by this Agreement shall be known as the 'Texas Genco Decommissioning Master Trust No. 2 for the South Texas Project."

ARTICLE II DISPOSITIVE PROVISIONS 2.01.. Additions to Master Trust. From time to time after the initial Contribution.,

to the Master Trustj additional Contributions may be made by TCC pursuant to the DFCA or-by or on behalf of the Company and the Trustee shall accept additional Contributions. After the initial Contribution, the Trustee shall not accept any additional Contributions for a Qualified Fund other than cash payments with respect to which the Company is allowed a deduction under section 468A of the Code and Treas. Reg. § 1.468A-2(a) or any corresponding future Treasury Regulations. The Company hereby represents that all additional Contributions (or deemed contributions) designated by the Company pursuant to section 2.06 hereof to be credited to a Qualified Fund shall be deductible under section 468A of the Code and Treas. Reg. § 1.468A-2(a) or any corresponding future Treasury Regulation or shall be withdrawn pursuant to Section 2.02 hereof.

2.02. Adjustments for Excess Contributions. The Trustee and the Company understand and agree that the Contributions made by or on behalf of the Company to any of the NYI-2165801v14

Qualified Funds from time to time may exceed the amount permitted to be paid into such Fund(s) pursuant to Section 468A based upon changes in estimates, subsequent developments or any other event or occurrence which could not reasonably have been foreseen by the Company at the time such Contribution was made (an "Excess Contribution"). Upon certification of the Company, setting forth the amount of the Excess Contribution, the Trustee shall transfer to a Non-Qualified Fund, the amount of any Excess Contribution (together with any income accrued thereon) as specified by the Company in such Certificate.

2.03. Authorized Representatives. The Fund Administrator and the Company shall each provide the Trustee with a written statement setting forth the names and specimen signatures of its Authorized Representatives. The Authorized Representatives shall provide the Trustee with a written statement setting forth the names and specimen signatures of any delegate of the Authorized Representatives. Each of the Authorized Representatives of the Company and the Fund Administrator is authorized and empowered to perform the acts authorized in this Agreement to be performed by the Company and the Fund Administrator, respectively. Each of the Authorized Representatives is authorized and empowered to perform all acts (including the negotiation, execution and delivery of agreements, instruments, certificates and amendments to the Master Trust Agreement and other documents and the delegation of any duties as evidenced in writing) as the Authorized Representative in his sole discretion may deem necessary or appropriate in connection with the activities of the Master Trust.

2.04. Disbursements from the Funds. The Trustee shall make payments from the Funds in accordance with the following procedures:

(a) Use of Assets. Except for Administrative Costs, the assets in the decommissioning trust funds, in the first instance, shall be used to pay the expenses NYI-2165801v14

related to decommissioning the Units as defined by the NRC in its regulations and issuances, and as provided in the South Texas Project Electric Generating Station licenses and any amendments thereto.

(b) Disbursement Certificates. Requests for payments of Decommissioning Costs actually incurred and paid or payable by the Company for goods provided or labor or other services rendered in connection with the decommissioning of the Units or for Administrative Costs constituting taxes shall be submitted to the Trustee on a Disbursement Certificate executed by the Company. Requests for payments of Administrative Costs (including the fees and expenses of the Trustee, but excluding taxes) actually incurred and paid or payable for the administration of this Master Trust shall be submitted to the Trustee on a Disbursement Certificate executed by the Fund Administrator.

(c) Payment of Costs. Subject to the requirements of Section 2.04(d) below, the Trustee shall pay Decommissioning Costs or Administrative Costs when a Disbursement Certificate is filed with the Trustee. The Disbursement Certificate shall include the following:

(i) the amount of money to be paid; (ii) the Fund or Funds from which payment is to be made; (iii) the purpose for which the obligation to be paid or reimbursed was incurred and whether the payment is of Decommissioning Costs or Administrative Costs; and (iv) the party to which the payment shall be made.

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(d) Notice to NRC. Except for disbursements for Administrative Costs, no disbursements or payments from the Funds shall be made by the Trustee unless the Trustee has first provided thirty days prior notice of such disbursement or payment to the NRC and the Trustee has not received written notice of an objection from the NRC Director, Office of Nuclear Reactor Regulation, by the later of (1) the date that is thirty days after the giving of such notice, or (2) the date of disbursement.

(e) Payment of Taxes. To the extent one or more Funds file separate tax returns, the Trustee shall pay income and other taxes with respect to the Funds to the Service or other appropriate governmental authority. If income from one or more Funds is includable in the consolidated assets, revenues or income of the Company for tax purposes, the Trustee shall pay the Company the amount of tax on such assets, revenue or income allocable to such Funds when a Disbursement Certificate is filed with the Trustee directing payment from one or more Funds. All of such taxes, whether paid directly or indirectly, shall constitute Administrative Costs.

(f) Distribution of Master Trust Upon Termination. Upon complete or partial termination of this Master Trust or of any one or more of the Fund(s) pursuant to Section 2.08 or 2.09 hereof, the Trustee shall assist in liquidating the assets of the Master Trust, or Fund(s), and distributing the then-existing assets of the Master Trust, or Fund(s)

(including accrued, accumulated and undistributed net income) to the Company; provided, however, if a Qualified Fund is terminated in whole or in part pursuant to Section 2.09(a) because of the Qualified Fund's disqualification from the applicability of Section 468A, the funds or securities withdrawn from the Qualified Fund shall be transferred to one or more of the Non-Qualified Funds. Upon completion of the NYI-2165801v14

decommissioning of a Unit and the related Common Facilities, payment of all Decommissioning Costs and Administrative Costs, and issuance of a final order by the PUC in the final reconciliation proceeding provided for in PUC Substantive Rule 25.303(f)(5), the Company shall submit to the Trustee a Disbursement Certificate requesting payment of any remaining moneys held in the Funds established for such Unit to TCC for refund to TCC customers in accordance with PUC Substantive Rule

§25.303(f)(5).

(g) Insufficiency of Funds. Notwithstanding the foregoing, the Trustee shall take no action that would cause a Qualified Fund to become disqualified from the application of Section 468A. If the Assets of any Fund are insufficient to permit the payment in full of amounts to be paid pursuant to this Section, the Trustee, in the absence of liability for such deficiency pursuant to the other provisions of this Agreement, shall have no liability with respect to such insufficiency and no obligation to use its own funds to pay the same. The Trustee shall, however, give the Company immediate notice of any such insufficiency.

2.05. No Commingling; Transfers Between Funds. Except to the extent permitted by PUC Substantive Rule §25.303(e)(3)(C)(iii), all Contributions and the earnings thereon shall be maintained separate and distinct from, and there shall be no commingling with, the nuclear decommissioning funds (or any other funds) received by the Trustee from any other source, including, without limitation, directly or indirectly from any ratepayers other than TCC ratepayers. The Trustee and the Company further understand and agree that it is of the essence that no transfer of monies is to occur between Funds except when such transfer is not contrary to 15-NYI-21658O1vI4

the requirements of Section 468A and is either (a) in accordance with Section 2.02 hereof or (b) pursuant to the direct instructions contained in a Certificate of the Company.

2.06. Designation of Funds. Upon: (a) any remittance of Contributions to the Master Trust, (b) any disbursement from the Master Trust; or (c) any adjustment to the Funds pursuant to Section 2.02 or Section 2.05, the Company or the Fund Administrator, as the case may be, shall designate, by Certificate, the appropriate Fund(s) which are to be credited or debited by such Contribution, disbursement or adjustment. The Trustee shall credit or debit the appropriate Fund(s) in accordance with such designation. The Company shall provide the Trustee with a Schedule of Ruling Amounts for the STP Unit No. 1 Additional Interest and the STP Unit No. 2 Additional Interest and a remittance schedule of Decommissioning Collections (as defined in the DFCA) authorized by final order of the PUC in respect of the STP Unit No. 1 Additional Interest and the STP Unit No. .2 Additional Interest.

2.07. No Transferability of-Interest in Master Trust: Exception. The interest of the Company in the Master Trust is not transferable by the Company, whether voluntarily or involuntarily, nor subject to the claims of creditors of the Company. Notwithstanding the foregoing, however, if the Company sells or transfers all or part of its ownership interest in any Unit or Units, including without limitation a sale or transfer to an affiliate of the Company, the Company may transfer a proportionate part of its interest in the Master Trust or any Fund.

2.08. Termination of Master Trust. Subject to the right of the parties to amend this Agreement as provided in Section 7.01, this Master Trust shall be irrevocable and will terminate upon the earliest of:

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(a) receipt by the Trustee of a Certificate from the Company stating that the NRC has terminated the licenses of both Units pursuant to 10 C.F.R. § 50.82(f), or any successor regulation; (b) except for any sale or transfer permitted under Section 2.07, receipt by the Trustee of a Certificate from the Company stating that the Company has sold, transferred or otherwise disposed of all of its ownership interest in both Units; or (c) the twentieth anniversary of the date of the death of the survivor from among a class consisting of all of the descendants of John D. Rockefeller, late of New York, New York, born on or prior to January 1, 2005.

2.09. Termination of Funds of Master Trust. Subject to the right of the parties to amend this Agreement as provided in Section 7.01 hereof, one or more of the Funds (in whole or in part) shall terminate upon the earliest of:

(a) with respect to a Qualified Fund only, the Fund's disqualification from the application of Section 468A, whether pursuant to an administrative action on the part of the Service or the decision of any court of competent jurisdiction, but in no event earlier than the date on which all available appeals have been either prosecuted or abandoned and the period of time for making any further appeals has elapsed; (b) with respect to a Qualified Fund only, the sale, transfer or other disposition by the Company of any interest in the related Unit, to the extent provided by Section 468A; or (c) with respect to a Non-Qualified Fund only, the disposition by the Company of any interest in the related Unit, in the same proportion of the Non-Qualified Fund as the Contributions to such Fund are to be used to decommission such Unit.

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ARTICLE HI MASTER TRUST MANAGEMENT AND ADMINISTRATION 3.01. Duties of Management. Subject (a) to the performance by the Fund Administrator of its duties as herein specified, and (b) to the terms and provisions of this Agreement, the Trustee shall manage the Master Trust and perform all duties attendant thereto, including the execution of whatever contracts, agreements or other documents necessary to manage and invest such assets. In performing its duties under this agreement, the Trustee shall exercise the same care and diligence that it would devote to its own property in like circumstances. The Trustee is authorized to purchase, enter, sell, hold, and generally deal in any manner in and with contracts for the immediate or future delivery of financial instruments and foreign exchange or foreign exchange contracts; to grant, purchase, sell, exercise, permit to expire, permit to be held in escrow, and otherwise to acquire, dispose of, hold and generally deal iin any manner with-and in all forms of options in any combinations. The Trustee, with the; consent of the Fund Administrator, or the Fund Administrator may retain the services of such professional advisors, legal counsel and administrative support as may be necessary to administer the Master Trust. The reasonable fees and/or compensation of any party so retained shall, to the extent not already included in the Trustee's compensation, be regarded as appropriate Administrative Costs payable in accordance with Section 2.04 hereof.

3.02. Duties of Administration. The Fund Administrator shall administer the Master Trust in accordance with PUC Substantive Rule § 25.303 and the terms and provisions of this Agreement and perform all duties therein and herein specified. The Fund Administrator will not challenge the authority of the PUC to enforce its rules that shall be adopted from time to time with respect to the collection, investment and use of the funds provided by TCC customers for

- 18 -

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decommissioning of the STP Unit No. 1 Additional Interest, the STP Unit No. 2 Additional Interest, or the Common Facilities Additional Interest.

3.03. Limitations on Actions. Neither the Trustee, the Company, nor the Fund Administrator shall take any action or participate in any transaction which would violate the terms and conditions of this Agreement. Further, the Trustee shall not take any action or participate in any transaction inconsistent with any instructions provided in a Certificate of the Company so long as the terms and conditions of the Certificate are consistent with this Agreement.

3.04. Texas Trust Code Controls. To the extent specified by PUC Substantive Rule § 25.303, the Texas Trust Code shall control the administration and management of the Master Trust.

ARTICLE IV ACCOUNTS AND REPORTS 4.01. Establish Fund Accounts. In accordance with the provisions of Section 2.06 hereof, the Trustee shall maintain separate accounts for each Fund established by this Agreement to account for Contributions made to each Fund, and all income and other increments to each Fund and disbursements from each Fund.

4.02. Accounts; Quarterly and Annual Reports. The Trustee shall keep accurate and detailed accounts of all Contributions, investments, receipts and disbursements, Administrative Costs and other transactions hereunder, and all accounts, books and records relating thereto shall be open at all reasonable times to inspection by the Fund Administrator and the Company or by any other person designated by the Fund Administrator or the Company and may be audited not more frequently than once in each fiscal year by an independent certified public accountant engaged by the Company, with the consent of the Fund Administrator. Such NYI-2165801v14

accounts shall be maintained on an accrual basis and in such a manner as to enable the Trustee to furnish separate accounts and reports for each Fund. Within forty-five days following the close of each fiscal quarter or year, the Trustee shall prepare and furnish to the Fund Administrator and the Company a written report setting forth with respect to each Fund all Contributions, investments, receipts and disbursements and other transactions effected by it during the preceding fiscal quarter, or year with respect to year-end statements, including a description of all securities and investments purchased and sold, with the cost and net proceeds of such purchases or sales, showing all cash, securities and other property held by each Fund at the end of such fiscal quarter or year and providing a valuation of the cash, securities and other property held by each Fund at the end of such fiscal quarter or year. Within ninety days following the removal or resignation of the Trustee as provided in Article VI hereof, the Trustee shall prepare and furnish to the Fund Administrator and the Company and to any Successor Trustee a written report containing all of the information required for fiscal year-end statements .pursuant to this Section with respect to the period from the close of the previous fiscal year to the date of such removal or resignation. The Trustee shall also provide a valuation of the cash, securities and other property held by each Fund on such other dates as may be specified by the Fund Administrator or the Company. Copies of all records relating to the Master Trust and each of the Funds shall be maintained by the Trustee until the termination of the Master Trust and distribution of all of the assets of the Master Trust. Before destruction of any such records, the Trustee shall offer them to the Company. Such copies may be maintained on microfilm or microfiche.

4.03. Tax Returns and Monthly Reports.

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(a) Tax Returns. The Trustee and the Company shall cooperate in the preparation of income or franchise tax returns or other reports as may be required from time to time. If deemed necessary or appropriate, the Trustee, with the Company's prior written consent, or the Company may employ independent certified public accountants or other tax counsel to prepare or review such returns and reports. The Trustee agrees to sign all tax returns or other reports where required by law to do so or arising out of the Trustee's responsibilities hereunder. The Trustee shall prepare and submit to the Company in a timely manner all information requested by the Company regarding the Funds required to be included in the Company's federal, state and local income tax returns or other reports. Any interest or penalty charges assessed against the Master Trust or any Fund pursuant to Chapters 67 or 68 of the Code or pursuant to any similar state or local tax provisions shall be an Administrative Cost unless caused by the Trustee's negligence or willful misconduct, in which case such interest or penalty charges shall be borne by the Trustee and not the Master Trust. The Trustee agrees to notify the Company immediately of the commencement of the audit of any Fund's federal, state or local tax return, and to participate with the Company on behalf of the Fund in such audits and related inquiries. The Trustee shall provide the Company with any additional information in its possession regarding the Funds which may be required by the Company to be furnished in an audit of the Company's federal, state or local tax returns.

(b) Monthly Investment Activity Reports. The Trustee shall present to the Fund Administrator and the Company on a monthly basis a report setting forth all investments purchased and sold by the Investment Manager(s) or by the Trustee during the previous month.

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ARTICLE V INVESTMENTS 5.01. Investments in Eligible Investments. The Funds shall be invested solely in Eligible Investments, regardless of whether the Trustee or an Investment Manager is making the investment decision. The Trustee shall have a continuing duty to review the trust portfolio and to inform the Fund Administrator, the Company and any Investment Manager if, in the Trustee's opinion, any investment is not an Eligible Investment or is not in compliance with the Investment Guidelines. The Fund Administrator acknowledges that, with respect to Funds or portions thereof managed by an Investment Manager, the Trustee intends to discharge its continuing duty to review the trust portfolio under the preceding sentence by performing certain portfolio review actions as specified in Exhibit D hereto. The Trustee, Investment Manager, or anyone else directing the investments made in the trust shall adhere to the Investment Guidelines provided by the Fund Administrator.

5.02. Investment Authority: Investment Managers.

(a) Trustee, Investment Manager(s) or Both to Manage Investments. The Fund Administrator shall from time to time specify by Certificate to the Trustee whether the investment of the Funds shall be managed solely by the Trustee, or shall be directed by one or more Investment Managers appointed by the Fund Administrator, or whether both the Trustee and one or more Investment Managers are to participate in investment management and if so how the investment responsibility is to be divided with respect to assets, classes of assets, separate Funds or sub-funds specified and defined in such Certificate. In the event that the Fund Administrator shall fail to specify pursuant to this Section the person or persons who are to manage the investment of the Funds or any portion thereof, the Trustee shall promptly give notice of this fact to the Fund NYI-2165801v14

Administrator. The Fund Administrator may designate the Trustee as Investment Manager of that portion of the Funds. If the Fund Administrator does not designate an Investment Manager and the Trustee is unable to serve as Investment Manager, the Fund Administrator shall be Investment Manager of that portion of the Funds. If the Trustee is managing the investment of the Funds or any portion thereof, it shall follow any instructions issued by the Fund Administrator in a Certificate unless those instructions are contrary to the Trustee's fiduciary duties under this Agreement. If investment of all or a portion of any Fund is to be directed in whole or in part by an Investment Manager, the Trustee shall be given written notification of the appointment of the Investment Manager and his acceptance of such appointment and acknowledgment that it is a fiduciary of this Master Trust. The Investment Manager shall also provide the Trustee a certificate

,-identifying, with specimen signatures, the persons authorized to give instructions or directions to the Trustee on its behalf. The Trustee may continue to rely upon such

'instruments and certificates until otherwise notified in writing by the Fund Administrator or the Investment Manager.

(b) Trustee to Follow Investment Manager Directions: Exceptions. The Trustee shall follow the directions of the Investment Manager regarding the investment and reinvestment of the portion of the Funds as shall be under management by the Investment Manager. Except as stated in this Article, the Trustee shall be under no duty or obligation, with respect to Funds or portions thereof managed by an Investment Manager, to (i) review any investment to be acquired, held or disposed of pursuant to directions from an Investment Manager or (ii) make any recommendations with respect to the disposition or continued retention of any such investment. The Trustee, if it is NYI-2165801v14

managing any investments for any of the Funds or portions thereof, and each Investment Manager, if any, shall have a continuing duty to review the Funds under its management to determine the appropriateness of such assets, investments and funds. With respect to Funds or portions thereof managed by an Investment Manager, the Trustee shall have no liability or responsibility for acting without question on the direction of, or failing to act in the absence of any direction from, the Investment Manager, unless (i) such action or inaction would be contrary to the provisions of this Section 5.02(b); (ii) the Trustee has actual knowledge that by such action or failure to act it will be participating in a breach of fiduciary duty by the Investment Manager; or (iii) such action or inaction would result in a violation of the Trustee's fiduciary duties under the terms of this Agreement.

(c) Trades by Investment Manager. An Investment Manager at any time and from time to time may issue orders for the purchase or sale of Eligible Investments directly to a broker, and in order to facilitate such transaction the Trustee upon request from an Investment Manager shall execute and deliver appropriate trading authorizations.

Notifications, in a format agreed to by the Investment Manager and the Trustee, of the issuance of each such order shall be given promptly to the Trustee by the Investment Manager, and the execution of each such order shall be confirmed by the Trustee. Such notification shall be authority for the Trustee to pay for Eligible Investments purchased against receipt thereof and to deliver securities sold against payment therefor, as the case may be. All notifications concerning investments made by the Investment Manager shall be authorized by such person or persons, acting on behalf of the Investment Manager as may be duly authorized in writing. The Trustee shall be entitled to rely upon such directions which it receives by any means if so authorized by the Investment Manager NYI-2165801v14

and shall in no way be responsible for the consequences of any unauthorized use of any device which was not, in fact, known by the Trustee at the time to be unauthorized. The Trustee shall, as promptly as possible, comply with any written directions given by the Investment Manager hereunder, and, where such directions are given electronically, if agreed to by the Trustee, or by photostatic teletransmission with facsimile signature or signatures, the Trustee shall be entitled to presume that any directions so given are fully authorized.

(d) Removal of Investment Manager. The Fund Administrator shall have the right, with or without cause, to remove any Investment Manager. In the event that an Investment Manager should resign or be removed by the Fund Administrator, the Fund Administrator shall appoint another Investment Manager (including the Trustee) for the 1portion of the Funds under management by such Investment Manager at the time of its resignation or removal. If:the Fund Administrator does not designate another Investment Manager, and the Trustee is unable to serve as Investment Manager for that portion of the Funds, the Fund Administrator shall be Investment Manager for that portion of the Funds.

5.03. Limitations on Investment Transactions. Notwithstanding anything contained in this Agreement to the contrary, the Trustee may not authorize or carry out any purchase, sale, exchange or other transaction which would constitute an act of "self-dealing" within the meaning of Section 4951 of the Code. The Trustee shall not (x) lend monies or securities from any of the Funds to itself, its officers or directors or (y) invest or reinvest monies from the Funds directly in securities issued by the Trustee, except for time deposits, demand deposits or money market accounts of the Trustee. Notwithstanding the foregoing (assuming applicable laws so permit), monies from the Funds may be invested in mutual funds or common NYI-2165801v14

trust funds that contain securities issued by the Trustee if the securities of the Trustee constitute no more than five percent of the fair market value of the assets of such mutual funds at the time of the investment; provided, however, that the Trustee shall have no duties under Section 5.02 with respect to the investment in such mutual fund or common trust fund made at the direction of an investment manager or the Fund Administrator.

5.04. Disposition of Investments. When required to make any payments under Section 2.04 hereof, the Trustee shall sell investments at the best price reasonably obtainable, or present investments for prepayment, and follow directions from the Fund Administrator or an Investment Manager if such directions are provided. The proceeds of any such sale or liquidation shall be credited pro rata to the Fund or Funds to which such investments were credited prior to such sale or liquidation. The Trustee shall have no liability, except for its own negligence or willful misconduct, with respect to any sale or prepayment of an investment directed by the Fund Administrator or an Investment Manager or made by an Investment Manager through a broker-dealer.

5.05. Allocation of Income.

(a) Generally. The Trustee shall not be precluded from pooling amounts in the Funds for investment purposes, provided that all investments are to be made only in Eligible Investments. To the extent amounts in more than one Fund are pooled, the Trustee shall allocate the earnings and losses in a manner permitted by Section 468A (if a Qualified Fund is involved) and, if so permitted, may treat each Fund participating in such investment as having received or accrued a ratable portion of the income from such investment for any period.

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(b) Principal and Income. All questions relating to the ascertainment of income and principal and the allocation of receipts and disbursements between income and principal shall be resolved by the Trustee in accordance with the terms of Section 113.102 of the Texas Trust Code. For accounting purposes, as of the end of each Accounting Period of the Master Trust, the income of the Master Trust shall, for purposes of all subsequent Accounting Periods, be treated as Master Trust principal. The Trustee and any Investment a Manager shall have the same duties with regard to Master Trust income as to Master Trust principal.

5.06. Settlement of Transactions. Settlements of transactions may be effected in trading and processing practices customary in the jurisdiction or market where the transaction occurs. The Company and the Fund Administrator each acknowledge that this may, in certain circumstances, require the delivery of cash or securities (or other property) without the concurrent receipt of securities (or other property) or cash and, in such circumstances, the-Trustee shall have no responsibility for nonreceipt of payment (or late payment) by the counterparty.

5.07. Reimbursement. If the Trustee advances cash or securities to facilitate the settlement of a transaction or in the event that the Trustee or the Fund Administrator shall incur or be assessed taxes, interest, charges, expenses, or assessments in connection with the performance of this Agreement, except such as may arise from its own negligent action, negligent failure to act or willful misconduct, any property at any time held for the Fund or under this Agreement shall be security therefor and the Trustee or the Fund Administrator shall be entitled upon reasonable notice to the Company to collect from the Fund sufficient cash for reimbursement, and if such cash is insufficient, dispose of the assets of the Company held under NYI-2165801v14

this Agreement to the extent necessary to obtain reimbursement. Upon receipt of a Disbursement Certificate executed by the Fund Administrator, the Trustee shall pay the Fund Administrator from the Fund for reimbursements pursuant to the preceding sentence. To the extent the Trustee advances funds to the Fund for disbursements or to effect the settlement of purchase transactions, the Trustee shall be entitled to collect from the Fund an amount equal to either (i) with respect to domestic assets, an amount equal to what would have been earned on the sums advanced (an amount approximating the "federal funds" interest rate) or (ii) with respect to nondomestic assets, the rate applicable to the appropriate foreign market.

ARTICLE VI THE TRUSTEE 6.01. General Powers. Except to the extent greater than the powers of trustees

.under the Texas Trust Code or inconsistent with PUC Substantive Rule § 29.303 or:the terms of this.Agreement, the Trustee shall have, with respect to the Master Trust, the following fiduciary

.powers to be exercised in the best interests of the Master Trust, and which are to be exercised as the Trustee, acting in such fiduciary capacity, in its discretion, shall determine, namely:

(a) Registration of Securities. To cause any investment, either in whole or in part, in the Fund to be registered in, or transferred into, the Trustee's name or the names of a nominee or nominees, including but not limited to that of the Trustee or an affiliate of the Trustee, a clearing corporation, or a depository, or in book entry form, or to retain any such investment unregistered or in a form permitting transfer by delivery, provided that the books and records of the Trustee shall at all times show that such investments are a part of the Fund; and to cause any such investment, or the evidence thereof, to be held by the Trustee, in a depository, in a clearing corporation, in book entry form, or by any other entity or in any other manner permitted by law; provided that the Trustee shall not NYI-2165801v14

be responsible for any losses resulting from the deposit or maintenance of securities or other property (in accordance with market practice, custom, or regulation) with any recognized foreign or domestic clearing facility, book-entry system, centralized custodial depository, or similar organization.

(b) Receipt of Money. To collect and receive any and all money and other property due to the Funds and to give full discharge therefor.

(c) Resolution of Claims. To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Master Trust; to commence or defend suits or legal proceedings to protect any interest of the Master Trust; and to represent the Master Trust in all suits or legal proceedings in any court or before any other body or tribunal.

(d) Voting of Securities. In its discretion, to exercise all voting rights with

.7respect to any investment held in the Funds and to grant proxies, discretionary or otherwise, with respect thereto, except that, at any time when an Investment Manager shall be acting as provided in Section 5.02, the Trustee shall not exercise its discretion with respect to voting any such securities under management of such Investment Manager but shall vote such securities only upon and in accordance with the direction of the Investment Manager or shall send such Investment Manager all proxies and proxy materials relating to such securities, signed by the Trustee without indication of voting preference, and the Investment Manager shall exercise all voting rights with respect thereto.

(e) Location of Assets. To keep the domicile of the Master Trust in the United States.

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(f) Retention of Professional Services. To execute any of the powers hereof and perform the duties required of it hereunder by or through its employees, agents, attorneys or receivers.

(g) Designation of Ministerial Powers. To delegate to other persons such ministerial powers and duties as the Trustee may deem to be advisable.

(h) Texas Trust Code. To exercise all rights, powers, options and privileges now or hereafter granted to, provided for or vested in, trustees under the Texas Trust Code, except to the extent inconsistent with the terms of this Agreement, PUC Substantive Rule § 25.303 or other applicable law.

(i) Powers of Trustee to Continue Until Final Distribution. To exercise any of such powers after the date on which the principal and income of the Master Trust shall i>have become distributable and until such time as the entire principal of, and income from, the Master Trust shall have been actually distributed by the Trustee. It is intended that distribution of the Master Trust will occur as soon as possible upon termination of the Master Trust, subject, however, to Sections 2.04(d), 2.08 and 2.09.

(i) Discretion in Exercise of Powers. To do any and all other acts, not inconsistent with the Texas Trust Code, which the Trustee shall deem proper to effectuate the powers specifically conferred upon it by this Agreement.

Notwithstanding the foregoing, however, (i) the restrictions in subparagraphs (A)(i)-(v) of PUC Substantive Rule § 29.303(e)(2) shall apply and (ii) the Trustee may not do any act or knowingly engage in any transaction which would:

(x) Disqualify either of the Qualified Funds from the application of Section 468A; NYI-2165801v14

(y) Violate the Trustee's fiduciary duties under this Agreement; or (z) Violate the terms and conditions of any instructions provided by Certificate by the Company or the Fund Administrator to the extent such instructions are consistent with the Trustee's fiduciary duties under this Agreement.

6.02. Designation and Qualification of Successor Trustee(s). The Fund Administrator by this Agreement has appointed the corporate fiduciary named herein having all requisite corporate power and authority to act as the sole original Trustee. The Trustee shall act in accordance with the directions provided to it by the Fund Administrator or the Company under the terms of this Agreement. At any time during the term of this Master Trust, the Fund Administrator shall have the right, with or without cause, to remove the Trustee acting hereunder and appoint another qualified corporation as a Successor Trustee upon thirty days' notice in writing to the Trustee, or upon such shorter notice as may be acceptable to the Trustee. In the event that the Trustee or any Successor Trustee shall: (a) become insolvent or admit in writing its insolvency; (b) be unable or admit in writing its inability to pay its debts as such debts mature; (c) make a general assignment for the benefit of creditors; (d) have an involuntary petition in bankruptcy filed against it; (e) commence a case under or otherwise seek to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law, statute or proceeding; or (f) resign, the Trustee or Successor Trustee shall cease to act as a fiduciary of this Master Trust and the Fund Administrator shall appoint a Successor Trustee.

Any Successor Trustee shall be a bank or trust company incorporated and doing business within the United States of America and having a combined capital and surplus of at least $50,000,000, if there be such an institution willing, able and legally qualified to perform the duties of Trustee hereunder upon reasonable or customary terms. Any Successor Trustee shall accept its NYI-2165801 v14

appointment to serve by a duly acknowledged acceptance of this Master Trust, delivered to the Fund Administrator, the Company and the Trustee then serving. The acceptance shall specify the date on which it will assume its duties as Successor Trustee, which date shall be at least ten days after delivery of the acceptance to the Fund Administrator, the Company and the Trustee then serving unless all such parties agree to an earlier date. Upon acceptance of such appointment by the Successor Trustee, the Trustee shall assign, transfer and pay over to such Successor Trustee the monies and properties then constituting the Master Trust. Any Successor Trustee shall have all the rights, powers, duties and obligations herein granted to the original Trustee.

If for any reason the Fund Administrator cannot or does not act in the event of the resignation or removal of the Trustee, as provided above, the Trustee may apply to the United States District Court for the Southern District of Texas, Houston Division, for the appointment of a Successor Trustee. Any expenses incurred by the Trustee in connection therewith shall be deemed to be an Administrative Cost.

6.03. Resignation. The Trustee or any Successor Trustee hereof may resign and be relieved as Trustee at any time by a duly acknowledged instrument, which shall be delivered to the Fund Administrator and the Company by the Trustee not less than sixty days prior to the effective date of the Trustee's resignation or upon such shorter notice as may be acceptable to the Fund Administrator. No such resignation shall take effect until a successor Trustee shall have been appointed and shall have accepted such appointment.

6.04. Compensation. The Trustee shall be entitled to compensation as may be agreed to from time to time by the Fund Administrator and the Trustee. Such compensation shall NYI-2165801v14

be payable by the Company, shall constitute an Administrative Cost and shall be payable from or reimbursable by the Master Trust.

6.05. Liability. The Trustee shall be liable for the acts, omissions and defaults of its own officers, employees and agents. Except where the Trustee exercises its investment discretion as provided in this Agreement, the Trustee shall not be liable for the acts or omissions of any Investment Manager(s) acting hereunder. The Trustee shall not be responsible or liable for any losses or damages suffered by the Fund arising as a result of the insolvency of any custodian, subtrustee or subcustodian, except to the extent the Trustee was negligent in its selection or continued retention of such entity, and shall not be liable for any indirect, consequential, or special damages with respect to its role as Trustee.

Notwithstanding the foregoing, the Trustee (and not the Master Trust) shall be liable for (a) any direct damages arising from the. failure of the Trustee to comply with the applicable provisions of Section 5.01; (b) anyktax imposed pursuant to Section 4951 of the Code (or any applicable successor provision) as such section is made applicable to the Master Trustee or the Trustee; and/or (c) any consequences flowing from violation of the restrictions on the investment of Qualified Fund assets outlined in Section 468A or applicable successor Code sections.

The Trustee is prohibited from doing any act or knowingly engaging in any transaction that would violate the terms and conditions of any instructions provided by written Certificate of the Fund Administrator or the Company to the extent that such instructions are consistent with the Trustee's fiduciary duties under this Agreement. Upon receipt of a Certificate of the Company or the Fund Administrator giving the Trustee notice of either (a) instructions of the Fund Administrator or the Company to the Trustee, or (b) acts or transactions the Fund Administrator or the Company believes constitute a violation by the Trustee of the provisions of NYI-2165801v14

this Agreement, the Trustee shall follow the instructions of the Fund Administrator or the Company to the extent that such instructions are consistent with the Trustee's fiduciary duties under this Agreement, and/or cease and desist from the acts identified in the Certificate as violating the provisions of this Agreement. To the extent the Trustee fails to follow the instructions of the Fund Administrator or the Company that are consistent with the Trustee's fiduciary duties under this Agreement, or continues with any act identified in the Certificate as violating the provisions of this Agreement, from the date of receipt of the Certificate providing the instructions and/or notice of violation of the provisions of this Agreement, the Trustee (and not the Master Trust) shall be liable for all direct damages arising from its failure to follow such instructions, and/or arising from a breach by the Trustee of this Agreement. Notwithstanding the foregoing, the Trustee (and not the Master Trust) shall be liable for direct damages arising from any breach by the Trustee of this Agreement, regardless of whether notice thereof was provided by the, Fund Administrator or the Company.

6.06. Indemnity of Trustee. The Company shall indemnify and hold harmless the Trustee from all claims, liabilities, losses, damages and expenses, including reasonable attorneys' fees and expenses, incurred by the Trustee in connection with this Agreement, except as a result of the Trustee's own gross negligence or willful misconduct. This indemnification shall survive the termination of this Agreement.

ARTICLE VII THE FUND ADMINISTRATOR 7.01. General Powers. The Fund Administrator shall have, with respect to the Master Trust, the following powers and duties, which are to be exercised as the Fund Administrator, in its discretion, shall determine, namely:

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(a) In General. To perform the duties of Fund Administrator set forth in this Master Agreement and PUC Substantive Rule § 25.303, and, notwithstanding any provisions of this Master Agreement to the contrary, the powers and duties of the Fund Administrator are exclusively granted and reserved to the Fund Administrator, and neither the Trustee, nor any Investment Manager nor the Company shall have any powers inconsistent with such exclusive grant and reservation.

(b) Retention of Professional Services. To execute any of the powers hereof and perform the duties required of it hereunder by or through its employees, agents, attorneys or receivers.

(c) Designation of Ministerial Powers. To delegate to other persons such ministerial powers and duties as the Fund Administrator may deem to be advisable.

(d) Powers of Fund Administrator to Continue Until Final Distribution. To

exercise any such powers after the date on which the principal and income of the Master Trust shall have become distributable and until such time as the entire principal of, and income from, the Master Trust shall have been actually distributed by the Trustee. It is intended that distribution of the Master Trust will occur as soon as possible upon termination of the Master Trust, subject, however, to Sections 2.04(d), 2.08 and 2.09.

(e) Discretion in Exercise of Powers. To do any and all other acts, not inconsistent with PUC Substantive Rule § 25.303, which the Fund Administrator shall deem proper to effectuate the powers specifically conferred upon it by this Agreement.

7.02. Designation and Qualification of Successor Fund Administrator(s). At any time during the term of this Master Trust, the initial Fund Administrator or the Company may request from the PUC, in accordance with PUC Substantive Rule § 25.303, an order NYI-2165801v14

0 approving the Company as successor Fund Administrator. In the event that the Fund Administrator or any Successor Fund Administrator shall: (a) become insolvent or admit in writing its insolvency; (b) be unable to admit in writing its inability to pay its debts as such debts mature; (c) make a general assignment for the benefit of creditors; (d) have an involuntary petition in bankruptcy filed against it; or (e) commence a cause under or otherwise seek to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law, statute or proceeding, the Company shall request from the PUC, in accordance with PUC Substantive Rule § 25.303, an order approving a Fund Administrator. Any Successor Fund Administrator shall accept its appointment to serve by a duly acknowledged acceptance of this Master Trust, delivered to the Company, the Trustee and the Fund Administrator then serving. The acceptance shall specify the date on which it will assume its duties as Successor Fund Administrator, which date shall be at least ten days after delivery of the acceptance to the Company, the Trustee and the Fund Administrator then serving, unless all such parties agree to an earlier date. Any Successor Fund Administrator shall have all the rights, powers, duties and obligations herein granted to the original Fund Administrator.

7.03. Compensation. The Fund Administrator shall be entitled to compensation as may be agreed to from time to time by the Company and the Fund Administrator. Such compensation shall constitute an Administrative Cost and shall be payable from the Master Trust.

7.04. Liability. The Fund Administrator shall be liable for the acts, omissions and defaults of its own officers, employees and agents. The Fund Administrator shall not be liable for the acts or omissions of any Investment Manager(s) acting hereunder. The Fund Administrator shall not be responsible or liable for any losses or damages suffered by the Fund NYI-2165801v14

arising as a result of the insolvency of any custodian, subtrustee or subcustodian, except to the extent the Fund Administrator was negligent in its selection or continued retention of such entity, and shall not be liable for any indirect, consequential, or special damages with respect to its role as Fund Administrator.

7.05. Indemnity of Fund Administrator. The Company shall indemnify and hold harmless the Fund Administrator from all claims, liabilities, losses, damages and expenses, including reasonable attorneys' fees and expenses, incurred by the Fund Administrator in connection with this Agreement, except as a result of the Fund Administrator's own gross negligence or willful misconduct; provided, that this Section 7.05 shall not apply to any obligation of TCC under Section 2 of the DFCA (whether in respect of collection, remittance or notification) or to any claims, liabilities, losses, damages or expenses incurred in connection with any such obligation. This indemnification shall survive the termination of this Agreement.

7.06. Schedule of Fund Administrator's Affiliates. 'The Fund Administrator shall amend Exhibit B from time to time so that it contains a true, complete and correct listing of all affiliates of the Fund Administrator.

ARTICLE vm MISCELLANEOUS 8.01. Schedule of Company Affiliates. The Company shall amend Exhibit B from time to time so that it contains a true, complete and correct listing of all affiliates of the Company.

8.02. Alterations and Amendments. The Trustee and the Company understand and agree that modifications or amendments may be required to this Agreement from time to time to effectuate the purposes of this Master Trust. This Agreement may be amended by an instrument in writing executed by the Fund Administrator, the Company and the Trustee. Copies NYI-2165801v14

of all such amendments shall be provided to the PUC at its address in Austin, Texas. This Agreement may not be amended so as to violate Section 468A with respect to the Qualified Funds or PUC Substantive Rule § 25.303. Notwithstanding any provision herein to the contrary, (i) the Fund Administrator or the Company may from time to time, revise Exhibit B hereto, and the Fund Administrator may from time to time revise Exhibits C and D hereto, and (ii) this Agreement cannot be modified in any material respect without first providing thirty days' prior written notice to the NRC Director, Office of Nuclear Reactor Regulation.

8.03. Headings. The section headings set forth in this Agreement and the Table of Contents are inserted for convenience of reference only and shall be disregarded in the construction or interpretation of any of the provisions of this Agreement.

8.04. Particular Words. Any word contained in the text of this Agreement shall be read as the singular or plural and as the masculine, feminine or neuter as may be applicable or permissible in the particular context. Unless otherwise specifically stated, the word "person" shall be taken to mean and include an individual, partnership, association, trust, company or corporation.

8.05. Parties Interested Herein. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon, or to give to any person, other than the Company, the Fund Administrator, TCC and the Trustee, any right, remedy or claim under or by reason of this Agreement, or any covenant, condition or stipulation contained herein. The Company shall be entitled to receive payments for Decommissioning Costs and Administrative Costs which the Company may incur, and the Fund Administrator and TCC shall be entitled to receive payments for Administrative Costs which the Fund Administrator or TCC may incur.

NYI-2165801v14

TCC shall be an express third-party beneficiary of this Trust Agreement and shall be entitled to enforce the terms and conditions thereof.

8.06. Severability of Provisions. If any provision of this Agreement or its application to any person or entity or in any circumstances shall be invalid and unenforceable, the application of such provision to persons and in circumstances other than those as to which it is invalid or unenforceable and the other provisions of this Agreement shall not be affected by such invalidity or unenforceability.

8.07. Form and Content of Communications. The names of any person authorized to act on behalf of the Company or the Fund Administrator shall be certified, with the specimen signature of such person, to the Trustee by the Company or the Fund Administrator, respectively. Until appropriate written evidence to the contrary is received by the Trustee, it shall be fully protected in relying upon or acting in accordance with any written notice, instruction, direction, certificate, resolution or other communication believed by it to be genuine and toube signed and/or certified by any proper person, and the Trustee shall be under no duty to make any investigation or inquiry as to the truth or accuracy of any statement contained therein.

Until notified in writing to the contrary, the Trustee shall have the right to assume that there has been no change in the identity or authority of any person previously certified to it hereunder.

8.08. Delivery of Notices Under Agreement. Any notice required by this Agreement to be given to the Company or the Trustee shall be deemed to have been properly given when delivered, or when mailed, postage prepaid, by registered or certified mail, to the person to be notified as set forth below:

NYI-2165801v14

If to the Company:

Texas Genco, LP c/o Texas Genco GP, LLC 1111 Louisiana Street Houston, Texas 77002 Attention: Treasurer If to the Fund Administrator:

AEP Texas Central Company 1 Riverside Plaza Columbus, Ohio 43215 Attention: Secretary If to the Trustee:

Mellon Bank, N.A.

One Mellon Bank Center Pittsburgh, Pennsylvania 15258 Attention: Glen Metzger, Trust Officer The Company, the Fund Administrator or the Trustee may change its respective address by delivering notice thereof in writing to the other party.

8.09. Successors and Assigns. Subject to the provisions of Section 2.07 and 6.02 this Agreement shall he binding upon and inure to the benefit of the Company, the Fund Administrator the Trustee and their respective successors and assigns.

8.10. Governing Jurisdiction. This Master Trust is a Texas trust, and all questions pertaining to its validity, construction and administration shall be determined in accordance with the laws of the State of Texas, including the Texas Trust Code, as if executed in and to be wholly performed within the State of Texas; provided, however, that the Trustee need not be qualified to exercise trust powers in the State of Texas.

8.11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

NYI-2165801v14

8.12. Compliance with Laws, Rules and Regulations. The Company, the Fund Administrator and the Trustee intend that this Agreement, all investments made for the Funds and all action taken hereunder shall comply in all respects with federal, state and other laws, rules and regulations applicable to the Funds and this Agreement, including without limitation, rules and regulations promulgated by the NRC and the PUC. Therefore, each of the Trustee, the Fund Administrator, the Company and any Investment Manager shall each comply with all federal, state and other laws, rules and regulations that may be applicable to it in connection with the performance of its duties under this Agreement.

8.13. Force Maieure. Notwithstanding anything in this Agreement to the contrary, the Trustee shall not be responsible or liable for its failure to perform under this Agreement or for any losses to the Fund resulting from any event beyond the reasonable control of the Trustee, its agents or subcustodians, including but not limited to nationalization, strikes, expropriation, devaluation, seizure, or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions, exchange controls, levies or other charges affecting the Fund's property; or the breakdown, failure or malfunction of any utilities or telecommunications systems; or any order or regulation of any banking or securities industry including changes in market rules and market conditions affecting the execution or settlement of transactions; or acts of war, terrorism, insurrection or revolution; or acts of God; or any other similar event. This Section shall survive the termination of this Agreement.

NYI-2165801v14

IN WITNESS WHEREOF, the Company and the Trustee have set their hands and seals to this Agreement as of the day and year first above written.

TEXAS GENCO, LP By: Texas Genco GP, LLC, Its General Partner By

Title:

MELLON BANK, N.A.

By

Title:

Vice President AEP TEXAS CENTRAL COMPANY By

Title:

NYI-2165801v14

Exhibit A DISBURSEMENT CERTIFICATE The undersigned, being an Authorized Representative of [Texas Genco, LP (the "Company")IAEP Texas Central Company, a Texas corporation,] a Texas limited partnership, and, in such capacity, being authorized and empowered to execute and deliver this certificate, hereby certify to the Trustee of the Texas Genco Decommissioning Master Trust for the South Texas Project, pursuant to Section 2.04 of that Decommissioning Master Trust Agreement, dated as of , 2005, between the Trustee, the Fund Administrator and Company as follows:

(1) the [Company/Fund Administrator] has incurred Decommissioning Costs in connection with the decommissioning of STP Unit No. [1] [2] or Administrative Costs relating to the Master Trust in the amounts and for the purposes provided on the schedule attached hereto; and (2) all such amounts constitute Decommissioning Costs or Administrative Costs.

Accordingly, you are hereby authorized to withdraw $ from the [STP Unit No. [1] [2] [Non-]Qualified Fund of the Master Trust and to pay such amount to the Company for such purpose. You are further authorized to disburse such sum, once withdrawn, directly to such Payees in the following manner: [Describe: CHECK, WIRE TRANSFER, ETC.] on or before . ,

Executed this day of ,

By Authorized Representative NYI-2165801v14

Exhibit B SCHEDULE OF FUND ADMINISTRATOR AND COMPANY AFFILIATES

[TO COME]

NYI-2165801v14

Exhibit C INVESTMENT GUIDELINES

[TO COME]

NYI-2165801v14

Exhibit D PORTFOLIO REVIEW ACTIONS OF TRUSTEE FOR FUNDS MANAGED BY INVESTMENT MANAGER

[TO COME]

NYI-2165801v14

TEXAS GENCO. LP SECOND AMNE N ETT DECOMMISSIONING MASTER TRUST AGREEMENT NO. 2 FOR THE SOUTH TEXAS PROJECT August-.44,002

.2005 NYI-2165801v014

TABLE OF CONTENTS Page ARTICLE I DEFINITIONS, PURPOSE AND NAME ....................................................... 3 1.01. Definitions ............................................................. 3 1.02. Authorization......................................................................................................10 1.03. Master Trust Purpose ............................................................ 810 1.04. Establishment of Master Trust ............................. 10............................

1.05. Company to Be Beneficiary ............................................................ 9 11 1.06. Name of Master Trust ............................................................ 911 ARTICLE II DISPOSITIVE PROVISIONS ............................................................ 911 2.01. Additions to Master Trust ............................................................. 911 2.02. Adjustments for Excess Contributions...............................................................9 11 2.03. Authorized Representatives..............................................................................012 2.04. Disbursements from the Funds.........................................................................4012 2.05. No Commingling.Transfers Between Funds................................................... __5 2.06. Designation of Funds ............................................................. 4216 2.07. No Transferability of Interest in Master Trust; Exception ............................... -316 2.08. Termination of Master Trust............................................................................416 2.09. Termination of Funds of Master Trust ............................................................ 4-17 ARTICLE III MASTER TRUST MANAGEMENT AND ADMINISTRATION ........... 4418 3.01. Duties of Management ............................................................ 4418 3.02. Duties of Administration .......................................... l 8 3.03. Limitations on T-pastee-Actions........................................................................4 19 3.04. Texas Tnist Code Controls .......................................... 19 ARTICLE IV ACCOUNTS AND REPORTS..................................................................4-1 4.01. Establish Fund Accounts..................................................................................4-5 4.02. Accounts; Quarterly and Annual Reports ........................................... 519 4.03. Tax Returns and Monthly Reports .4......................................... 620 ARTICLE V INVESTMENTS ............................................ 4-722 5.01. Investments in Eligible Investments .4-2......................................... 2 5.02. Investment Authority; Investment Managers...................................................4-822 5.03. Limitations on Investment Transactions .. ........................................... 5 5.04. Disposition of Investments...............................................................................2226 5.05. Allocation of Income........................................................................................2226 5.06. Settlement of Transactions ......................................... 232' 5.07. Reimbursement ......................................... 2321 ARTICLE VI THE TRUSTEE.........................................................................................2428 6.01. General Powers .......................................... 2428 6.02. Designation and Qualification of Successor Trustee(s) ................................... 73 6.03. Resignation.......................................................................................................232 NY1- 2165801v-L4 -i-

TABLE OF CONTENTS (continued)

Page 6.04. Compensation...................................................................................................2832 6.05. Liability............................................................................................................2g33 6.06. Indemnity of Trustee ....................................................... 3034 ARTICLE VII THE FUND ADMINISTRATOR ....................................... 34 7.01. General Powers ...................................... 34

2. Designa lifcation of Successor Fund Administrator(s) ............ ..35 7.03. Comp tnskipon.. ........................ ................................................................ L36 7.04. Liability ............................ .36 7.05. Indemnity of Fund Administrator ............................ 37 7.06. Schedule of Fund Adminisrator's Affiliates .......... .................................. 37 ARTICLE VIII MISCELLANEOUS...................................................................................337 8.01. Schedule of Company Affiliates ........................................... 37 7.01-.8,02._Alterations and Amendments.....................................................................3037 7.0".8.03._Headings......................................................................................................38

.03-804Particular Words.........................................................................................3-38

'7.04.-8.05.Parties Interested Herein ........................................... 438 7.05-8.06._Severability of Provisions .33........................................... . 9

,7.06. 8.07. Form and Content of Communications......................................................3-1-9 7-.07- ................................................................. Delivery of Notices Under Agreement

'7 .08-.. 09...... Successors and Assigns 7..09.8.10..... Governing Jurisdiction 7.40.8.11 ..... Counterparts 3344

.8.'12. .............. Compliance with Laws, Rules and Regulations

.31.............. 41 7.12. Fo eure ........ .. . 33 8.13. Force Maieure ................ , ,, ,41 SECOND AsrE nDED AND RESTATED EXHIBITS Exhibit A Disbursement Certificate Exhibit B Schedile of Fund Administrator and Company Affiliates Exhibit C Investment Guidelines Exhibit D Portfolio Review Actions of Trustee for Funds ManagLdbvy Investment Manager NY1- 21658014 -14 . .-

DECOMMISSIONING MASTER TRUST AGREEMENT NO. 2 FOR THE SOUTH TEXAS PROJECT THIS TRUST AGREEMENT originally made July 2, 1990, amended and restated as of the 1' day of October, 1991-,and further amended byAthe First Amendment dated as of December 30, 1996. is further amended and restated as of August 31, 2002 by and4bet-eenas of 2005 by and among AEP Texas Centrul CompmaLn1exas rp rationTC or. in its capacity as initial Fund Administrator under this Agreement the "Fund Administrator")

Texas Genco, LP, a Texas limited partnership (the "Company"), and Mellon Bank, N.A., a national banking association having trust powers (the "Trustee")-,

WHEREAS, the Trust .aso ally estabih ed by Hoaston Lighting;& Power Cempany, assumed by Reliant Energy, Incorqorated ("Relian! Ene-y") and later assigned-to the Cempany;

-\WHEREAS, the Company is the owner of: (1) a 30"_ percent undivided interest in Unit No. One of the South Texas Project Electric Generating Station (thqe"STP Unit No. 1 Additional Interest"); (2) a 308_ percent undivided interest in Unit No. Two of the South Texas Project Electric Generating Station Qthe"STP Unit No. 2 Additional Interest"); and (3) a 30~._ percent undivided interest in certain facilities serving both STP Unit No. I and STP Unit No. 2 (the "Common Facilities Additional Inte est"); aiLacquired from AEP Texas Central Company pursuant to that certain Purchase and Sale Agreement by and between AEP Texas Central CompanyCity of San Anton io acting b through the ityPubfic Service Board of San Antonio ("CPS") and the Company dated as of September 3, 9004 (the "PSA"); and WHEREAS, the Company for purposes of this Trust is subject to regulation by the Public Utility Commission of Texas (the "PUC"), an agency of the State of Texas, and by the Nuclear Regulatory Commission (the "NRC"), an agency of the United States government; and NYI-2165801v14

WHEREAS, the NRC has promulgated regulations in Title 10, Chapter 1 of the Code of Federal Regulations, Part 50, requiring the Company, as a holder of a license issued pursuant to 10 C.F.R., Part 50, to provide assurance that funds will be available when needed for required decommissioning activities; and WHEREAS the PUC has adoptd PUC Substantive Rae 25.5303,which.icnter Oia, nrescribes TCC's continuing onsibility for collecting decommissionin-g funds through its ratejsprsuLant toQublic Utility Regulatory Act ("PURAD§3-9-20.5jand WHEREAS, tursuant to PUC Substantive Rule § 25.303 and the PSA, TCC and the Company JwvQ nterei into a Decommissioning Funds Collection Agree ent ofeven date herewith (the "DFCA"): and WHEREAS, pursuant to Section 468A of the Internal Revenue Code of 1986, certain Federal income tax benefits are available to the Company by creating and funding qualified decommissioning funds associated with the South Texas Project Electric Generating Station; and WHEREAS, the PUC has permitted CenterPointEner'gy -ouston Eleetrie. LLC, a Texas limited liability company ("AWiresCo'), on behalf of the GempanyAuthouized mruuano TCC, PURA § 39.205. to include in its cost of service for ratemaking purposes certain amounts to be collected as nonbypassaWe chages from retai customers and to be contributed by the Company or-by WiresGe on-behalfof the CompanyTCC to decommissioning funds in order to provide monies for the Company's share-ef-decommissioning costs with respect to the South-Texas ThojeetSTP Unit No. 1 Additional Interest, the STP Unit No. 2 Additional Interest and.the Common Facilities Additional Interest; and WHEREAS, the Company wishes to maintain the= qualified trust fund erigUinally established with respect to each of the STP Unit No. I Additional Interest and the_STP Unit

-2_

NYI-2165801v14

No-",_2 Additional Interest, and one or more non-qualified trust funds with respect to the STP Unit No. 1 Additional Interest and the STP Unit No. 2 Additional Interest to accumulate monies with which to pay the Company's share of decommissioning costs for sueh Unitsthe STP Unit No. I Additional Interest, the STP Unit No. 9 Additiona Interest and the Common Facilities Additionall Interest; NOW, THEREFORE, in consideration of the mutual promises herein contained, the cempany hereby agreesand TCC's agreement-pursuant to the DFCA to deliver or have delivered to the Trustee Contributions of monies,-and the Trustee hereby agrees to continue to receive; the Contributions of monies to the Master Trust made byeoroen behalf of the CoMzany; TO HAVE AND TO HOLD such monies and such additional monies as may from time to time be added thereto as provided herein, together with the proceeds and reinvestments thereof

.(hereinafter collectively called the "Master Trust");

.IN TRUST NEVERTHELESS, for the. uses and purposes and upon the terms and conditions hereinafter set forth:

ARTICLE I DEFINITIONS, PURPOSE AND NAME.

1.01. Definitions. As used in this Agreement, the following terms shall have the following meanings:

(a) "Accounting Period" shall mean a tax year, as interpreted in accordance with the Code; Accounting Periods shall end on December 31 of each year.

(b) "Administrative Costs" shall mean all ordinary and necessary expenses and other incidental costs incurred in connection with the operation of the Funds, including, but not limited to, taxes, Trustee fees, Investment Manager fees,,,snd exxpenSQS of the Fund Administrator, and fees and expenses of TCC for actineas the NYI-2165801v14

collection agent with-resect to the nonbypassable nucl ear decommissioiincharges to the extent authorized by applicable laws, includin rules and orders of the PUC. and the fees and/or compensation of any professional advisors, legal counsel or, administrative support hired by the Company or the Fund Administrator as provided in Section 3.01 or incurred in the discharge of the Trustee's fiduciary obligations under this Agreement.

(c) "Agreement" shall mean and include this Decommissioning Master Trust Agreement as the same may from time to time be amended, modified or supplemented.

(d) "Authorized Representative" shall mean, with respect to the Company. the Chief Executive Officer, the-President, any Vice President or the Treasurer of the Company .grartner. Texas Genco GP. LLC: and with respect to the Fund Administrator theprersons designa by the Fund Administrato Puant to Section rs (e) "Certificate" shall mean a written certificate signed by the Company.

(f) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

(g) "Common Facilities" shall mean facilities at the South Texas Project Electric Generating Station designed to serve both STP Unit No. 1 and STP Unit No. 2.

(h) "Common Facilities Additional Interest" shall have the meaning set forth in thep_eaq le hehet Oi h)Company" shall have the meaning set forth in the preamble hereto and shall include any successor thereto. The actions of the Company may be performed by an Authorized Representative as provided in Sections 1.01(d) and 2.03 hereof.

NYI-2165801v14

() (}Contributions" shall mean all Non-Qualified Contributions and all Qualified Contributions.

(k) "CPS" shall have the meaning set forth in the p eamble hereto.

01) j}"Decommissioning Costs" shall mean all costs incurred in connection with the entombment, decontamination, dismantlement, removal and disposal of the structures, systems and components of a Unit or Common Facilities, including all costs incurred in connection with the preparation for decommissioning, such as engineering and other planning expenses, and all expenses incurred with respect to the Unit or Common Facilities after actual decommissioning occurs, such as physical security and radiation monitoring expenses.

(m) "DFCA" shall have the meaning-st forth in tbeprearp b eret.

On (k'Disbursement Certificate" shall mean a document properly completed and executed by the Company andor the-Fund Administratorpj-as the case mazb, substantially in the form of Exhibit A hereto.

Xo) -"EligibleInvestments" shall mean such securities, bank deposits, collective, commingled or mutual funds or other investments that are permitted to be purchased and held for the account of the Fund in which the investment is proposed to be acquired under (1) applicable federal, state and other governmental laws, rules and regulations, including without limitation PUC Substantive Rule 25.301,9-23 , and (2) the Investment Guidelines then in effect with respect to the Fund for which the investment is proposed to be acquired. Except for investments in funds tied to market indices or other non-nuclear sector collective, commingled or mutual funds, the assets of the Funds shall not be invested in the securities or other obligations of Reliant Eneigy, NYI-2165801v14

Wir)esek)the Find Administrator, the Company or affiliates of any thereof, or their successors or assigns, or i-n_UH any entity owning or opin e or more nuclear power plants or any affiliates. subsidiaries. successors or assigns of anymsch entity.

Notwithstandina anything contained in this Agreement to the contrathe term "Eligible Investments" when used in reference to the Iestment Manager shall mean investments peritted by the applicable Investment Manaper Agreement and Investment Guidelines.

Mp (n)-"Excess Contribution" shall have the meaning set forth in Section 2.02 hereof.

fq) "und Administrator" shall have the meaiijnet forth in the iweamble hereto and shall include any successor thereto. The actions of the Fund Administrator maeperformedby an Authorized Representati cypursant to Secti WdLand dnsl 2 03 hereof.

fO ()"Funds" shall mean the Qualified Funds and the Non-Qualified Funds.

W (e)-"Investment Guidelines" shall mean any written statement or statements.attached hereto as Exhibit C, of the Ge wyFund Administrator in effect at a given time that detaikincorporates the investment requirements and restrictions of PUC Substantive RLe 25.30 and details ny otheir applicable investment criteria and standards which shall be consistent with the investment requirements and restrictions of PUC Substantive Rm e § 25303, with respect to one or more Funds or portions thereof.

The CempanyFund Administrator may at any time, or from time to time, adopt new or additional Investment Guidelines, or amend, supersede, or terminate effective Investment Guidelines by delivering a copy of the new or additional Investment Guidelines or notice of amendment, supersession or termination to the TrusteeJ theACompany. and any affected NYI-G165801v4

Investment Manager-,.provided that anyjatch new. amended or additional Investment Guidelines shall incorporate (or be consistent with) the investment requirements and restrictions of PUC Substantive Rue.§ 25.303.

X fp)-"Investment Manager" shall mean a fiduciary specified in an Investment Manager Agreement:

(i) which has been retained by the C-empaf*yEund Administrator to manage, acquire or dispose of any asset belonging to the Master Trust; and (ii) which is:

(A) registered as an investment adviser under the Investment Advisers Act of 1940, or (B) a bank as defined in that Act, or (C) an insurance company qualified to perform services

.described in subsection (i) above, under the laws of more than one state, and (iii) which has acknowledged, in writing, that it is a fiduciary with respect to the Master Trust, that it is qualified to act under subsection (ii) above, and has agreed to be bound by all of the terms, provisions and covenants of this Agreement applicable to it.

X) W"Investment Manager Agreement" shall mean an agreement between the Fund Administrator. the Company and an Investment Manager selected by the CempanyELuncdAdrministrator, which agreement governs the management of all or a portion of the assets of the Master Trust.

NYI-2165801v14

aV W"Master Trust" shall consist of all contributions to any Fund together with investments and reinvestments thereof and any income earnings and appreciation thereon.

Xw) ()"Non-Qualified Contributions" shall mean all amounts contributed to the Non-;Qualified Funds.

x (t)-"Non-Qualified Funds" shall mean the Fund or Funds, as determined by the Trustee and the Company, established and maintained under the Master Trust for decommissioning STP Unit No. 1, STP Unit No. 2, and the Common Facilities to which monies are contributed, which Funds are not subject to the conditions and limitations of Section 468A.

W (t+"NRC" shall mean the Nuclear Regulatory Commission, an agency of

-the United States of America, or its successor.

-17! "PSA" shall have the meaninOset forth in the parnhie hereto.

Cap) v)-"PUC" shall mean the Public Utility Commission of Texas, as authorized pursuant to the PURA, or its successor.

i (-"PUC Substantive Rule 253025.303" shall mean the rules and regulations adopted by the PUC, effective June 1S. 1998,Qtober26,2004, published in the Texas Register as Tex. Public Utility Comm'n, 23 Tex. Reg. _222et seq.

(19982004) and codified at 16 Tex. Admin. Code § 25.2301,25.303 as such section may be amended, and any successors thereto.

f (4.)"PURA" shall mean the Public Utility Regulatory Act, Texas Utilities Code, Title 2 (1997), as amended from time to time.

NYI-21658O1v14

M) (*"Qualified Contributions" shall mean all amounts collected b TCC in cost of service rates approved by the PUC and contributed to the Qualified Funds for Decommissioning Costs and Administrative Costs of the Units collected by WiresCo as pai4 of the -Gmpany's cost ef service as approved by the PU pursuant to the DFCA.

Bee) "QualfiedFuds" shall mean the STP Unit No. 1 qualified Fund or the STP Unit No. 2Q-1!alified Fund.

S(f) "Schedule of Rulinc Amounts" shall mean a schedule requested and received accordance with Section 468A(d)(1) of ruling amounts as defined in Section 468Ad) (2).

Jgg) (*-"Section 468A" shall mean Section 468A of the Code, and any regulations and rulings of the Service thereunder, as such section and regulations may be amended, and any successors thereto.

fh) (*)"Service" shall mean the Internal Revenue Service.

(iil (bb)-"STP Unit No. 1" shall mean Unit No. One of the South Texas Project Electric Generating Station.

(j) "STP Unit No. I Additional Interest" shall have the meaning set forth in the er top.le Lkk- (eW)-"STP Unit No. 1 Qualified Fund" shall mean the Fund established and maintained under the Master Trust for decommissioning STP Unit No. I and Common Facilities to which monies are contributed subject to the conditions and limitations of Section 468A.

fl)) (d"STP Unit No. 2" shall mean Unit No. Two of the South Texas Project Electric Generating Station.

9 NYI-2165801v'1

Lm-m "STP Unit No. 2 Additional Interest" shall have the meaning set forth in the preamble hereto.

n (ee)W"STP Unit No. 2 Qualified Fund" shall mean the Fund established and maintained under the Master Trust for decommissioning STP Unit No. 2 and Common Facilities to which monies are contributed subject to the conditions and limitations of Section 468A.

(oo) "TCC" means AEP Texas Central Company IacporatLonjnis onpacitv as collection agent under and pursuant to the DFCA, and shall includeits successors and assigns, in such capacity,

( F +'Trustee" shall mean Mellon Bank, N.A., or its successors.

Lqq) (gg)"Units" shall mean STP Unit No. 1, STP Unit No. 2 and the Common Facilities, collectively.

(hh) "WiresCo" shall have the mealing set forth in the-preamble hereto and shall include its successors and assigns.

1.02. Authorization. Each of the Fund Administrator, the-Trustee and the Company hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Agreement, and has taken all action necessary to authorize the execution of this Agreement by the officers and persons signing it.

1.03. Master Trust Purpose. The exclusive purpose of this Master Trust is to provide funds for the decommissioning of the Units, and in that regard this Master Trust shall accumulate, invest, reinvest and hold monies for the decommissioning of the Units, and to disburse monies for that purpose. The Qualified Funds shall constitute qualified nuclear decommissioning funds for the Units within the meaning of Section 468A. The assets of the NYI-2165801v14

Qualified Funds must be used as authorized by Section 468A. It is not contemplated that the Non-:Qualified Funds shall constitute qualified nuclear decommissioning funds for the Units within the meaning of Section 468A.

1.04. Establishment of Master Trust. By execution of this Agreement-,the Company irrevocably:

(a) estab!she§1heCompany and the Fund Administrator irrevocably establish the Master Trust, which shall consist of all Contributions as may now or hereafter be delivered by or on behalf of the Company to the Trustee, investments and reinvestments thereof, and earnings and appreciation thereon; (b) estbhe Company and the Fund Administrator establish the Funds, each of which shall constitute a trust consisting of all Contributions as may now or hereafter be delivered to the Trustee by or on behalf of the Company and designated for such Fund, together with investments and .reinvestments thereof and earnings and appreciation thereon; and (c) the Fund Administrator-appoints Mellon Bank, N.A. as Trustee of the Master Trust and each of the Funds.

It is the intention of the Fund Administrator, theCompany and the Trustee that this Agreement create an express trust under the laws of the State of Texas.

1.05. Company to Be Beneficiary. The beneficial ownership of the Funds, subject to the purpose of the Master Trust, shall be at all times in the Company.

1.06. Name of Master Trust. The Master Trust created by this Agreement shall be known as the "Texas Genco Decommissioning Master TrustjNo..2 for the South Texas Project."

-N11 -

NY1-2 165801 v14

ARTICLE 11 DISPOSITIVE PROVISIONS 2.01. Additions to Master Trust. From time to time after the initial Contribution to the Master Trust, additional Contributions may be made by TCC pursuant to tDFCApo y or on behalf of the Company and the Trustee shall accept additional Contributions.After the initial Contribution the Truee shall not accepj anyjdditional Contributions for a ialified Fund other than cash payments with respect to which the Company is allowed a deduction under section 468A of the Code and Treas.Re. R .468A-2Pt) or any corresponding Utre Treasuwy Regglations. The Company hereby represents that-all additional Contributions (or deemed contributions) designa ld b the Company ursuant to section 2.06 hereof to be credited to a Qualified Fund shall be deductible under section 468A of the Code and Treas. Reg. §l.468A-2(a)-or ansys rrespondinutiitre Treasury Regulation or shahl be withdrawn pursuant to Section 2.02 hereof.

2.02. Adjustments for Excess Contributions. The Trustee and the Company understand and agree that the Contributions made by or on behalf of the Company to any of the Qualified Funds from time to time may exceed the amount permitted to be paid into such Fund(s) pursuant to Section 468A based upon changes in estimates, subsequent developments or any other event or occurrence which could not reasonably have been foreseen by the Company at the time such Contribution was made (an "Excess Contribution"). Upon certification of the Company, setting forth the amount of the Excess Contribution, the Trustee shall transfer to a Non-Qualified Fund, the amount of any Excess Contribution (together with any income accrued thereon) as specified by the Company in such Certificate.

2.03. Authorized Representatives. The Fund Administrator and the Company shall each Lovide the Trustee with a written statement settincyforth the names andspecimen NYI-2165801v14

signatures of its Authorized Rep esentatives. The Authorized Repr esentatives shall provide the Trustee with a written statement setting forth the names andspecimen signatures of any delegate of the Authorized Rep resentatives. Each of the Authorized Rep esentatives of the Companyand the Fund Administrator is authorized andcsmpowered to perform the acts authorized in this Agreement to bpeirformed by theCompan and the Fund Administrt,or specii ipEach of the Authorized Representatives is authorized and empowered to perform all acts (including the negotiation, execution and delivery of agreements, instruments, certificates and amendments to the Master Trust Agreement and other documents and the delegation of any duties as evidenced in writing) as the Authorized Representative in his sole discretion may deem necessary or appropriate in connection with the activities of the Master Trust.

2.04. Disbursements from the Funds. The Trustee shall make payments from the Funds in accordance with the following procedures:

(a) Use of Assets. Except for Administrative Costs, the assets in the decommissioning trust funds, in the first instance, shall be used to pay the expenses related to decommissioning the Units as defined by the NRC in its regulations and issuances, and as provided in the South Texas Project Electric Generating Station licenses and any amendments thereto.

(b) Disbursement Certificates. Requests for payments of Decommissioning Costs AdministrieCesis (ieludi g-thefe'es:-and epenses-eof th ao ally Tuske)-actu e

incurred and paid or payable by the Company for goods provided or labor or other services rendered in connection with the decommissioning of the Units or for Administrative Costs constituting taxes shall be submitted to the Trustee on a Tisbursement Certificate executed by the Compn. Requests for pruients of NYI-2165801vl4

Administrative Costs (inclicjingthe fees and expenses of fhe Trusteebupt excluding taxes) actually incurred and pid or payable for the administration of this Master Trust shall be submitted to the Trustee on a Disbursement Certificate executed by the Gem hanyFund Administrator.

(c) Payment of Costs. Subject to the requirements of Section 2.04(d) below, the Trustee shall pay Decommissioning Costs or Administrative Costs when a Disbursement Certificate is filed with the Trustee. The Disbursement Certificate shall include the following:

(i) the amount of money to be paid; (ii) the Fund or Funds from which payment is to be made; (iii) the purpose for which the obligation to be paid or reimbursed was incurred and whether the payment is of Decommissioning Costs or Administrative Costs; and (iv) the party to which the payment shall be made.

(d) Notice to NRC. Except for disbursements for Administrative Costs, no disbursements or payments from the Funds shall be made by the Trustee unless the Trustee has first provided thirty days prior notice of such disbursement or payment to the NRC and the Trustee has not received written notice of an objection from the NRC Director, Office of Nuclear Reactor Regulation, by the later of (I) the date that is thirty days after the giving of such notice, or (2) the date of disbursement.

(e) Payment of Taxes. To the extent one or more Funds file separate tax returns, the Trustee shall pay income and other taxes with respect to the Funds to the Service or other appropriate governmental authority. If income from one or more Funds NYI-2165801v14

is includable in the consolidated assets, revenues or income of the Company for tax purposes, the Trustee shall pay the Company the amount of tax on such assets, revenue or income allocable to such Funds when a Disbursement Certificate is filed with the Trustee directing payment from one or more Funds. All of such taxes, whether paid directly or indirectly, shall constitute Administrative Costs.

(f) Distribution of Master Trust Upon Termination. Upon complete or partial termination of this Master Trust or of any one or more of the Fund(s) pursuant to Section 2.08 or 2.09 hereof, the Trustee shall assist in liquidating the assets of the Master Trust, or Fund(s), and distributing the then-existing assets of the Master Trust, or Fund(s)

(including accrued, accumulated and undistributed net income) to the Company; provided, however, if a Qualified Fund is terminated in whole or in part pursuant to Section 2.09(a) because of the Qualified Fund's disqualification from the applicability of Section 468A, -the funds or securities withdrawn from the Qualified Fund shall be transferred to one or more of the Non-Qualified Funds, Upon completion of the decommissioning of a Unit and the related Common Faciliti enjpyment of all Decommissioning Costs and Administrative Costs. and issuance of a final order by the PUC in the final reconciliation proceejdn.gprovidedfor in PUC Substantive Rule 25.303(f)(5), the Company shall submit to the Trustee a Disbursement Certificate requeastingpayment of any remainin moeys held in the Funds established or such Unit to TCC for refund to TCC customers in accordance with PUC Substantive Rule

§25.3O3(f)(5).

(g) Insufficiency of Funds. Notwithstanding the foregoing, the Trustee shall take no action that would cause a Qualified Fund to become disqualified from the NYI-2165801v14

application of Section 468A. If the Assets of any Fund are insufficient to permit the payment in full of amounts to be paid pursuant to this Section, the Trustee, in the absence of liability for such deficiency pursuant to the other provisions of this Agreement, shall have no liability with respect to such insufficiency and no obligation to use its own funds to pay the same. The Trustee shall, however, give the Company immediate notice of any such insufficiency.

2.05. No Commingling; Transfers Between Funds. Excepto tfte extent permitted by PUC Substantive Rule §25.303(e)(3)(C)(iii). all Contribuions nd the earnings thereon shall be maintained separate and distinct from. and there shall beo comminj nith the nuclear decommissioning funds (or any other funds) received by the Trustee from any other source. incLudinng lithotimitation, dizetly or indirectly from any ratepa qrs other than TCC iptepayers The Trustee and the Company further understand and agree that it is of the essence that no transfer of monies is to occur between Funds except when such transfer is not contrary to the requirements of Section 468A and is either (a) in accordance with Section 2.02 hereof or (b) pursuant to the direct instructions contained in a Certificate of the Company.

2.06. Designation of Funds. Upon: (a) any-remittance of Contributions to the Master Trust,] (b) any disbursement from the Master Trust; or (c) any adjustment to the Funds pursuant to Section 2.02 or Section 2.05, the Company or the Fund Administrator. as the case ma be,-shall designate, by Certificate, the appropriate Fund(s) which are to be credited or debited by such Contribution, disbursement or adjustment-an~dhe. The Trustee shall credit or debit the appropriate Fund(s) in accordance with such designation. The Company-shallprvide the Tnistee with a Schedule of Ruling Amounts for the STP Unit No. I Additional Interest and the STP Uni N.2 Additional Interest and a remittance schedule of Decommission NYI-2165801v4

Collections (as defined in the DFQA~ authorizeihyjfnal order of the PUC inres} ct of the STP Unit No. I Additional Interest and the STP Unit No. 2 Additional Interest.

2.07. No Transferability of Interest in Master Trust: Exception. The interest of the Company in the Master Trust is not transferable by the Company, whether voluntarily or involuntarily, nor subject to the claims of creditors of the Company. Notwithstanding the foregoing, however, if the Company sells or transfers all or part of its ownership interest in any Unit or Units, including without limitation a sale or triansfer to an affiliate of the Company, the Company may transfer a proportionate part of its interest in the Master Trust or any Fund.

2.08. Termination of Master Trust. Subject to the right of the parties to amend this Agreement as provided in Section 7.01, this Master Trust shall be irrevocable and will terminate upon the earliest of:

(a) receipt by the Trustee of a Certificate from the Company stating that the NRC has terminated the licenses of both Units pursuant to 10 C.F.R. § 50.82(f), or any successor regulation; (b) except for any sale or transfer permitted under Section 2.07, receipt by the Trustee of a Certificate from the Company stating that the Company has sold, transferred or otherwise disposed of all of its ownership interest in both Units; or (c) the twentieth anniversary of the date of the death of the survivor from among a class consisting of all of the descendants of John D. Rockefeller, late of New York, New York, born on or prior to January 1, -9902005.

2.09. Termination of Funds of Master Trust. Subject to the right of the parties to amend this Agreement as provided in Section 7.01 hereof, one or more of the Funds (in whole or in part) shall terminate upon the earliest of:

NYI-2165801vl4

(a) with respect to a Qualified Fund only, the Fund's disqualification from the application of Section 468A, whether pursuant to an administrative action on the part of the Service or the decision of any court of competent jurisdiction, but in no event earlier than the date on which all available appeals have been either prosecuted or abandoned and the period of time for making any further appeals has elapsed; (b) with respect to a Qualified Fund only, the sale, transfer or other disposition by the Company of any interest in the related Unit, to the extent provided by Section 468A; or (c) with respect to a Non-Qualified Fund only, the disposition by the Company of any interest in the related Unit, in the same proportion of the Non-Qualified Fund as the Contributions to such Fund are to be used to decommission such Unit.

ARTICLE III MASTER TRUST MANAGEMENT AND ADMINISTRATION 3.01. Duties of Management. TheSubicOa) to e performanceby th&e-Lnd Administrator of its duties as herein specified. nd (b) to the terms and provisions of this Agrecwtun the Trustee shall manage the Master Trust and perform all duties attendant thereto, including the execution of whatever contracts, agreements or other documents necessary to manage and invest such assetssubjeete-tofhe mnd sioeth e t. In performing its duties under this agreement, the Trustee shall exercise the same care and diligence that it would devote to its own property in like circumstances. The Trustee is authorized to purchase, enter, sell, hold, and generally deal in any manner in and with contracts for the immediate or future delivery of financial instruments and foreign exchange or foreign exchange contracts; to grant, purchase, sell, exercise, permit to expire, permit to be held in escrow, and otherwise to acquire, dispose of, hold and generally deal in any manner with and in all forms of NYI-2165801 "14

options in any combinations. The Trustee, with the consent of the GompanyFund Ad ator, or the GempanyFund Administrator may retain the services of such professional advisors, legal counsel and administrative support as may be necessary to administer the Master Trust. The reasonable fees and/or compensation of any party so retained shall, to the extent not already included in the Trustee's compensation, be regarded as appropriate Administrative Costs payable in accordance with Section 2.04 hereof.

3.02. Duties of Administration. The Fund Administrator shall administer the Master Trust in accordance with PUC Substantive Rule § 25.303 and the terms and provisions of this Agreement and perform all duties therein and herein secifre*I. TheFu d Administrator will not challenge the authority of the PUC to enforce its rules that shall be adopted from time to time ithrespect to the collection investment andue f thefnds provided by TCC customers for decommissioning of the STP Unit No. 1 Additional Interest. the STP Unit No. 2 Additional interest or the CommoFacilities Additional Interest.

3.03.. 302.-Limitations on Thisee-Actions. TheNeither the Trustees the Compiny,.nor the Fund Administrator shall-net take any action or participate in any transaction which would violate the terms and conditions of this Agreement. Further, the Trustee shall not take any action or participate in any transaction inconsistent with any instructions provided in a Certificate of the Company so long as the terms and conditions of the Certificate are consistent with this Agreement.

3.04. Texas Trust Code Controls. To the extent specified by PUC Substantive Rule § 25.303, the Texas Trust Code shall control the administration and management of the Master Trust.

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ARTICLE IV ACCOUNTS AND REPORTS 4.01. Establish Fund Accounts. In accordance with the provisions of Section 2.06 hereof, the Trustee shall maintain separate accounts for each Fund established by this Agreement to account for Contributions made to each Fund, and all income and other increments to each Fund and disbursements from each Fund.

4.02. Accounts: Quarterly and Annual Reports. The Trustee shall keep accurate and detailed accounts of all Contributions, investments, receipts and disbursements, Administrative Costs and other transactions hereunder, and all accounts, books and records relating thereto shall be open at all reasonable times to inspection by the Fund Administrator and the Company or by any other person designated by the Fund Administrator or the Company and may be audited not more frequently than once in each fiscal year by temoan) OF an independent certified public accountant engaged by the Company wvith the consent of the Fund Administrator. Such accounts shall be maintained on an accrual basis and in such a manner as to enable the Trustee to furnish separate accounts and reports for each Fund. Within forty-;five days following the close of each fiscal quarter or year, the Trustee shall prepare and furnish to the Fund Administrator and the Company a written report setting forth with respect to each Fund all Contributions, investments, receipts and disbursements and other transactions effected by it during the preceding fiscal quarter, or year with respect to year-end statements, including a description of all securities and investments purchased and sold, with the cost and net proceeds of such purchases or sales, showing all cash, securities and other property held by each Fund at the end of such fiscal quarter or year and providing a valuation of the cash, securities and other property held by each Fund at the end of such fiscal quarter or year. Within ninety days following the removal or resignation of the Trustee as provided in Article VI hereof, the Trustee

- 20 NYI-2165801vI4

shall prepare and furnish to the Fund Administrator and the Company and to any Successor Trustee a written report containing all of the information required for fiscal year-end statements pursuant to this Section with respect to the period from the close of the previous fiscal year to the date of such removal or resignation. The Trustee shall also provide a valuation of the cash, securities and other property held by each Fund on such other dates as may be specified by he Fund Administrator or the Company. Copies of all records relating to the Master Trust and each of the Funds shall be maintained by the Trustee until the termination of the Master Trust and distribution of all of the assets of the Master Trust. Before destruction of any such records, the Trustee shall offer them to the Company. Such copies may be maintained on microfilm or microfiche.

4.03. Tax Returns and Monthly Reports.

(a) Tax Returns. The Trustee and the Company shall cooperate in the preparation of income or franchise tax returns or other reports as may be required from time to time. If deemed necessary or appropriate, the Trustee, with the Company's prior written consent, or the Company may employ independent certified public accountants or other tax counsel to prepare or review such returns and reports. The Trustee agrees to sign all tax returns or other reports where required by law to do so or arising out of the Trustee's responsibilities hereunder. The Trustee shall prepare and submit to the Company in a timely manner all information requested by the Company regarding the Funds required to be included in the Company's federal, state and local income tax returns or other reports. Any interest or penalty charges assessed against the Master Trust or any Fund pursuant to Chapters 67 or 68 of the Code or pursuant to any similar state or local tax provisions shall be an Administrative Cost unless caused by the

- 21 NYI-2165801v14

Trustee's negligence or willful misconduct, in which case such interest or penalty charges shall be borne by the Trustee and not the Master Trust. The Trustee agrees to notify the Company immediately of the commencement of the audit of any Fund's federal, state or local tax return, and to participate with the Company on behalf of the Fund in such audits and related inquiries. The Trustee shall provide the Company with any additional information in its possession regarding the Funds which may be required by the Company to be furnished in an audit of the Company's federal, state or local tax returns.

(b) Monthly Investment Activity Reports. The Trustee shall present to the Fund Administrator and the Company on a monthly basis a report setting forth all investments purchased and sold by the Investment Manager(s) or by the Trustee during the previous month.

ARTICLE V INVESTMENTS 5.01. Investments in Eligible Investments. The Funds shall be invested solely in Eligible Investments, regardless of whether the Trustee-,_r an Investment Manager-er-the Cempany is making the investment decision. The Trustee shall have thea continuing duty to review 4l-proposed investmrntethe trusaLportfolio and to inform the Fund Administraor,the Company and any Investment Manager if, in the Trustee's opinion,4he proeposed investmen!

fals within the psaraeters Set forth en Exhibit B {ohieh has beer

<AA1 y .ed to theTuteban approved by the Company) attaehedlnny investment is not an Efigfie Investment or is not in compliance with the Investment Guidelines. The Fund Administrator acknowledges that, with respect to Funds or porions thereof manaed by an Investment Manerhe Trustee intends to dischar c its continuing duty to review the trust portfolio under the prleding Sentey performinwPseiairn portfolio reviwactions as specfed in Exhibit D hereto. The Trustee, NYI-2165801vI4

Investment Manager, or anyone else directing the investments made in the trust shall adhere to the investment guidelines provided by the Gempan inc arinra talndrsfru investments as set ferth in PUC Substantive Rule 2-5.301 (16T .- MAdfmin.

Code 25.301), as

_ e.Investment Guidelines provided by the FundAdministrator.

5.02. Investment Authority: Investment Managers.

(a) Trustee. Investment Manager(s) or Both to Manage Investments. The GemphiyFund Administrator shall from time to time specify by Certificate to the Trustee whether the investment of the Funds shall be managed solely by the Trustee, or shall be directed by one or more Investment Managers appointed by the GemfpanyEund Administrator or whether both the Trustee and one or more Investment Managers are to

participate in investment management and if so how the investment responsibility is to be

divided with respect to assets, classes of assets, separate Funds or sub--funds specified and defined in such Certificate. In the event that the CempanyFund Adminis rator shall fail to specify pursuant to this Section the person or persons who are to manage the investment of the Funds or any portion thereof, the Trustee shall promptly give notice of this fact to the Cempany. With the consent-f the Trustee, the Gompa"yFtnd Administrator. The Fund Administrator may designate the Trustee as Investment Manager of that portion of the Funds. If the GempanyFund Administrator does not designate an Investment Manager and the Trustee is unable or unwilling to serve as Investment Manager, the GempftyEiind Administgra shall be Investment Manager of that portion of the Funds. If the Trustee is managing the investment of the Funds or any portion thereof, it shall follow any instructions issued by the GempanyEun NYI-2165801v14

Administrator in a Certificate unless those instructions are contrary to the Trustee's fiduciary duties under this Agreement. If investment of all or a portion of any Fund is to be directed in whole or in part by an Investment Manager, the Trustee shall be given written notification of the appointment of the Investment Manager and his acceptance of such appointment and acknowledgment that heit is a fiduciary of this Master Trust. The Investment Manager shall also provide the Trustee a certificate identifying, with specimen signatures, the persons authorized to give instructions or directions to the Trustee on its behalf. The Trustee may continue to rely upon such instruments and certificates until otherwise notified in writing by the GempanyEgtnd Administrator or the Investment Manager.

(b) Trustee to Follow Investment Manager Directions; Exceptions. The Trustee shall follow the directions of the Investment Manager regarding the investment and reinvestment of the portion of the Funds as shall be under management by the Investment Manager-,pros ided that the Trustce shall net follow sueh-dirctions if to dese would result in a violation of Section 5.03.. Except as stated in the foregoing senteneeethis Article, the Trustee shall be under no duty or obligation, with respect to Funds or portions thereof managed by an Investment Manager, to (i) review any investment to be acquired, held or disposed of pursuant to directions from an Investment Manager or (ii) make any recommendations with respect to the disposition or continued retention of any such investment. The Trustee, if it is managing any investments for any of the Funds or portions thereof, and each Investment Manager, if any, shall have a continuing duty to review the Funds under its management to determine the appropriateness of such assets, investments and funds. With respect to Funds or portions NYI-2165801vP4

thereof managed by an Investment Manager, the Trustee shall have no liability or responsibility for acting without question on the direction of, or failing to act in the absence of any direction from, the Investment Manager, unless (i) such action or inaction would be contrary to the provisions of this Section 5.02(b); (ii) the Trustee has actual knowledge that by such action or failure to act it will be participating in a breach of fiduciary duty by the Investment Manager; or (iii) such action or inaction would result in a violation of the Trustee's fiduciary duties under the terms of this Agreement.

(c) Trades by Investment Manager. An Investment Manager at any time and from time to time may issue orders for the purchase or sale of Eligible Investments directly to a broker, and in order to facilitate such transaction the Trustee upon request from an-Investment Manager shall execute and deliver appropriate trading authorizations.

WdRen-notifleatieneNo ificati n i a rmat reed to the Investmen Manager and Therustee, of the issuance of each such order shall be given promptly to the Trustee by the Investment Manager, and the execution of each such order shall be confirmed tehy the Trustee by the brekef. Such notification shall be authority for the Trustee to pay for Eligible Investments purchased against receipt thereof and to deliver securities sold against payment therefor, as the case may be. All notifications concerning investments made by the Investment Manager shall be signed uthorized by such person or persons, acting on behalf of the Investment Manager as may be duly authorized in writingit provided, ho -ver, that the transmission to the Trustee of such-notietations by ieleeepy with dupieate-er facsimile signature or signatures shall be considered a deliver) in wiveint of the afaersaid nt t iftienuseof uh e Titee is notified in leriting bythe Investment Mana-ger- that the use of such deviees w^ith duFplicatc or facsimile signatuer-N'YI-21658Oiv14

ne loanger authoeize. The Trustee shall be entitled to rely upon such directions which it receives by st"hanv means if so authorized by the Investment Manager and shall in no way be responsible for the consequences of any unauthorized use of suehany device which was not, in fact, known by the Trustee at the time to be unauthorized. The Trustee shall, as promptly as possible, comply with any written directions given by the Investment Manager hereunder, and, where such directions are given electronically, if Here d to by thejr stee, or by photostatic teletransmission with facsimile signature or signatures, the Trustee shall be entitled to presume that any directions so given are fully authorized.

(d) Removal of Investment Manager. The GempanyFund Administrator shall have the right, with or without cause. to remove any Investment Manager. In the event that an Investment Manager should resign* or be removed by the CempanyFund Administrator, the Cempanyund Administrator shall appoint another Investment Manager (including with the consent of the Trustee-,the Trustee) for the portion of the Funds under management by such Investment Manager at the time of its resignation or removal. If the CmnyFund Administrator does not designate another Investment Manager, and the Trustee is unable eor-wuwi11ing-to serve as Investment Manager for that portion of the Funds, the CompanyFund Administrator shall be Investment Manager for that portion of the Funds.

5.03. Limitations on Investment Transactions. Notwithstanding anything contained in this Agreement to the contrary, the Trustee may not authorize or carry out (Z)-any purchase, sale, exchange or other transaction which would constitute an act of "self-dealing" within the meaning of Section 4951 of the Code, as such section is made appliablcto the Fundls

-Y26 NYI-2165801v4

by Seetiou 168A(c)(5) of the Code or- (b) any- investment which could result in a Fund's equisition of an investmcnt that falls within the param rs se-tfbfh on Exhibit B hereto. The Trustee shall not (x) lend monies or securities from any of the Funds to itself, its officers or directors or (y) invest or reinvest monies from the Funds directly in securities issued by the Trustee, except for time deposits, demand deposits or money market accounts of the Trustee.

Notwithstanding the foregoing (assuming applicable laws so permit), monies from the Funds may be invested in mutual funds or common trust funds that contain securities issued by the Trustee if the securities of the Trustee constitute no more than five percent of the fair market value of the assets of such mutual funds at the time of the investment; provided, however, that the Trustee shall have no duties under Section 5.02 with respect to the investment in such mutual fund or common trust fund made at the direction of an investment manager or the GempanyEund Adnministoratr.

5.04. Disposition of Investments. When required to make any payments under Section 2.04 hereof, the Trustee shall sell investments at the best price reasonably obtainable, or present investments for prepayment, and follow directions from the Cempany~und Administrator or an Investment Manager if such directions are provided. The proceeds of any such sale or liquidation shall be credited pro rata to the Fund or Funds to which such investments were credited prior to such sale or liquidation. The Trustee shall have no liability, except for its own negligence or willful misconduct, with respect to any sale or prepayment of an investment directed by the GempanyFund Administrator or an Investment Manager or made by an Investment Manager through a broker-dealer.

NY1 2165801v14l

5.05. Allocation of Income.

(a) Generally. The Trustee shall not be precluded from pooling amounts in the Funds for investment purposes, provided that all investments are to be made only in Eligible Investments. To the extent amounts in more than one Fund are pooled, the Trustee shall allocate the earnings and losses in a manner permitted by Section 468A (if a Qualified Fund is involved) and, if so permitted, may treat each Fund participating in such investment as having received or accrued a ratable portion of the income from such investment for any period.

(b) Principal and Income. All questions relating to the ascertainment of income and principal and the allocation of receipts and disbursements between income and principal shall be resolved by the Trustee in accordance with the terms of Section 113.102 of the Texas Trust Code.,; For accounting purposes, as of the end of each Accounting Period of the Master.Trust, the income of the Master Trust shall, for purposes of all subsequent Accounting Periods, be treated as Master Trust principal. The Trustee and any Investment a Manager shall have the same duties with regard to Master Trust income as to Master Trust principal.

5.06. Settlement of Transactions. Settlements of transactions may be effected in trading and processing practices customary in the jurisdiction or market where the transaction occurs. The Company tieknewled.sesand the Fund Administrator each acknowledge that this may, in certain circumstances, require the delivery of cash or securities (or other property) without the concurrent receipt of securities (or other property) or cash and, in such circumstances, the Trustee shall have no responsibility for nonreceipt of payment (or late payment) by the counterparty.

NYI-2165801v14

5.07. Reimbursement. If the Trustee advances cash or securities to facilitate the settlement of a transaction or in the event that the Trustee or the Fund Administrator shall incur or be assessed taxes, interest, charges, expenses, or assessments in connection with the performance of this Agreement, except such as may arise from its own negligent action, negligent failure to act or willful misconduct, any property at any time held for the Fund or under this Agreement shall be security therefor and the Trustee or the Fund Administrator shall be entitled upon reasonable notice to the Company to collect from the Fund sufficient cash for reimbursement, and if such cash is insufficient, dispose of the assets of the Company held under this Agreement to the extent necessary to obtain reimbursement. Uponp receipt of a Disbursement Certificate executed by the Fund Administrator, the Trustee shall pay the Fund Administrator from the Fund for reimbursements pursuant to thep ce i enteane. To the extent the Trustee advances funds to the' Fund for disbursements or to effect the settlement of purchase transactions, the Trustee shall be entitled to collect from the Fund an amount equal to either (i) with respect to domestic assets, an amount equal to what would have been earned on the sums advanced (an amount approximating the "federal funds" interest rate) or (ii) with respect to nondomestic assets, the rate applicable to the appropriate foreign market.

ARTICLE VI THE TRUSTEE 6.01. General Powers.he Except to the extent mrnater thanthe powers of tustees under the Texas Trust Code or inconsistent with PUC SubstantIve Rule_§_29.303 or the terms of this Agrcement. the Trustee shall have, with respect to the Master Trust, the following fiduciary powers to be exercised in the best interests of the Master Trust, and which are to be exercised as the Trustee, acting in such fiduciary capacity, in its discretion, shall determine-and,

- 29 0 NYI-2165801v14

exeept as otherwise provided, which are intended in no wa) to limit the powers of the office, namely:

(a) Registration of Securities. To cause any investment, either in whole or in part, in the Fund to be registered in, or transferred into, the Trustee's name or the names of a nominee or nominees, including but not limited to that of the Trustee or an affiliate of the Trustee, a clearing corporation, or a depository, or in book entry form, or to retain any such investment unregistered or in a form permitting transfer by delivery, provided that the books and records of the Trustee shall at all times show that such investments are a part of the Fund; and to cause any such investment, or the evidence thereof, to be held by the Trustee, in a depository, in a clearing corporation, in book entry form, or by any other entity or in any other manner permitted by law; provided that the Trustee shall not be responsible for any losses resulting from the deposit or maintenance of securities or -

other property (in' accordance with market practice, custom, or regulation) with any recognized foreign or domestic clearing facility, book-entry system, centralized custodial depository, or similar organization.

(b) Receipt of Money. To collect and receive any and all money and other property due to the Funds and to give full discharge therefor.

(c) Resolution of Claims. To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Master Trust; to commence or defend suits or legal proceedings to protect any interest of the Master Trust; and to represent the Master Trust in all suits or legal proceedings in any court or before any other body or tribunal.

NYI-2165801v14

(d) Voting of Securities. In its discretion, to exercise all voting rights with respect to any investment held in the Funds and to grant proxies, discretionary or otherwise, with respect thereto, except that, at any time when an Investment Manager shall be acting as provided in Section 5.02, the Trustee shall not exercise its discretion with respect to voting any such securities under management of such Investment Manager but shall vote such securities only upon and in accordance with the direction of the Investment Manager or shall send such Investment Manager all proxies and proxy materials relating to such securities, signed by the Trustee without indication of voting preference, and the Investment Manager shall exercise all voting rights with respect thereto.

(e) Location of Assets. To keep the domicile of the Master Trust domiciled in Athe United States.

..(f) Retention of Professional Services. To execute any of the powers hereof and perform the duties required of it hereunder by or through its employees, agents, attorneys or receivers.

(g) Designation of Ministerial Powers. To delegate to other persons such ministerial powers and duties as the Trustee may deem to be advisable.

(h) Texas Trust Code. To exercise all rights, powers, options and privileges now or hereafter granted to, provided for or vested in, trustees under the Texas Trust Code, except sluh as conflicito the extent inconsistent with the terms of this Agreement er, PC Substantaie Rule 25.303 or other applicable law.

(i) Powers of Trustee to Continue Until Final Distribution. To exercise any of such powers after the date on which the principal and income of the Master Trust shall NYI-216501v14

have become distributable and until such time as the entire principal of, and income from, the Master Trust shall have been actually distributed by the Trustee. It is intended that distribution of the Master Trust will occur as soon as possible upon termination of the Master Trust, subject, however, to Sections 2.04(d), 2.08 and 2.09.

(j) Discretion in Exercise of Powers. To do any and all other acts, not inconsistent with the Texas Trust Code, which the Trustee shall deem proper to effectuate the powers specifically conferred upon it by this Agreement.

Notwithstanding the foregoing, however, (i)the restrictions in subparagraphs (A)(i)-(v) of PUC Substantive Rue §29.303(eM2) shaiapply and the Trustee may not do any act or knowingly engage in any transaction which would:

(x) Disqualify either of the Qualified Funds from the application of Section

.468A; (y) Violate the Trustee's fiduciary duties under this Agreement; or (z) Violate the terms and conditions of any instructions provided by Certificate by the Company or the Fund Administrator to the extent such instructions are consistent with the Trustee's fiduciary duties under this Agreement.

6.02. Designation and Qualification of Successor Trustee(s). The Comp m"Fund Administrator by this Agreement has appointed the corporate fiduciary named herein having all requisite corporate power and authority to act as the sole original Trustee. The Trustee shall act in accordance with the directions provided to it by the Fund Administrator or theCompany under the terms of this Agreement. At any time during the term of this Master Trust, the GmFpanyund Administrator shall have the rightwith or without cause. to remove the Trustee acting hereunder and appoint another qualified corporation as a Successor Trustee upon NYI-2165801v14

thirty days' notice in writing to the Trustee, or upon such shorter notice as may be acceptable to the Trustee. In the event that th6 Trustee or any Successor Trustee shall: (a) become insolvent or admit in writing its insolvency; (b) be unable or admit in writing its inability to pay its debts as such debts mature; (c) make a general assignment for the benefit of creditors; (d) have an involuntary petition in bankruptcy filed against it; (e) commence a case under or otherwise seek to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law, statute or proceeding; or (f) resign, the Trustee or Successor Trustee shall cease to act as a fiduciary of this Master Trust and the GeympayEund Administrator shall appoint a Successor Trustee. Any Successor Trustee shall be a bank or trust company incorporated and doing business within the United States of America and having a combined capital and surplus of at least $50,000,000, if there be such an institution willing, able and legally qualified to perform the duties of Trustee hereunder upon reasonable or customary terms. . Any Successor Trustee shall accept its appointment to serve by a duly acknowledged acceptance of this Master Trust, delivered to the Fund Administrator. he Company and the Trustee then serving. The acceptance shall specify the date on which it will assume its duties as Successor Trustee, which date shall be at least ten days after delivery of the acceptance to the Fund Administratorj the=-Company and the Trustee then serving unless bothall such parties agree to an earlier date. Upon acceptance of such appointment by the Successor Trustee, the Trustee shall assign, transfer and pay over to such Successor Trustee the monies and properties then constituting the Master Trust. Any Successor Trustee shall have all the rights, powers, duties and obligations herein granted to the original Trustee.

If for any reason the empaund Administrator cannot or does not act in the event of the resignation or removal of the Trustee, as provided above, the Trustee may apply to the United NYI-2165801v]4

States District Court for the Southern District of Texas, Houston Division, for the appointment of a Successor Trustee. Any expenses incurred by the Trustee in connection therewith shall be deemed to be an Administrative Cost.

6.03. Resignation. The Trustee or any Successor Trustee hereof may resign and be relieved as Trustee at any time by a duly acknowledged instrument, which shall be delivered to the Fund Administrator and the Company by the Trustee not less than sixty days prior to the effective date of the Trustee's resignation or upon such shorter notice as may be acceptable to the Gem hv~yyund Administrator. No such resignation shall take effect until a successor Trustee shall have been appointed and shall have accepted such appointment.

6.04. Compensation. The Trustee shall be entitled to compensation as may be agreed to from time to time by the Cempanyyund Administrator and the Trustee. Such compensation shall be payable by the Company, shall constitute an Administrative Cost and shall be payable from or reimbursable by the Master Trust.

6.05. Liability. The Trustee shall be liable for the acts, omissions and defaults of its own officers, employees and agents. Except where the Trustee exercises its investment discretion as provided in this Agreement, the Trustee shall not be liable for the acts or omissions of any Investment Manager(s) acting hereunder. The Trustee shall not be responsible or liable for any losses or damages suffered by the Fund arising as a result of the insolvency of any custodian, subtrustee or subcustodian, except to the extent the Trustee was negligent in its selection or continued retention of such entity, and shall not be liable for any indirect, consequential, or special damages with respect to its role as Trustee.

Notwithstanding the foregoing, the Trustee (and not the Master Trust) shall be liable for (a) any direct damages arising from the failure of the Trustee to comply with the applicable NYI-2165801v4

provisions of Section 5.01; (b) any tax imposed pursuant to Section 4951 of the Code (or any applicable successor provision) as such section is made applicable to the Master Trustee or the Trustee; and/or (c) any consequences flowing from violation of the restrictions on the investment of Qualified Fund assets outlined in Section 468A or applicable successor Code sections.

The Trustee is prohibited from doing any act or knowingly engaging in any transaction that would violate the terms and conditions of any instructions provided by written Certificate of the Fund Administrator or the Company to the extent that such instructions are consistent with the Trustee's fiduciary duties under this Agreement. Upon receipt of a Certificate of the Company or the Fund Administrator giving the Trustee notice of either (a) instructions of the Fund Administrator or the Company to the Trustee, or (b) acts or transactions the Fund Administrator or the Company believes constitute a violation by the Trustee of the provisions of this Agreement, the Trustee shall follow the instructions, of the Fund Administrator or the Company to the extent that such instructions are consistent with the Trustee's fiduciary duties under this Agreement, and/or cease and desist from the acts identified in the Certificate as violating the provisions of this Agreement. To the extent the Trustee fails to follow the instructions of the Eund Administrator or the Company that are consistent with the Trustee's fiduciary duties under this Agreement, or continues with any act identified in the Certificate as violating the provisions of this Agreement, from the date of receipt of the Certificate providing the instructions and/or notice of violation of the provisions of this Agreement, the Trustee (and not the Master Trust) shall be liable for all direct damages arising from its failure to follow such instructions, and/or arising from a breach by the Trustee of this Agreement. Notwithstanding the foregoing, the Trustee (and not the Master Trust) shall be liable for direct damages arising from NYI-2165801v]4

any breach by the Trustee of this Agreement, regardless of whether notice thereof was provided by the Fund Administrator or the Company.

6.06. Indemnity of Trustee. The Company shall indemnify and hold harmless the Trustee from all claims, liabilities, losses, damages and expenses, including reasonable attorneys' fees and expenses, incurred by the Trustee in connection with this Agreement, except as a result of the Trustee's own gross negligence or willful misconduct. This indemnification shall survive the termination of this Agreement.

ARTICLE VII THE FUND ADMINISTRATOR 7.01. General Powers. The Fund Administrator shall have withrespect to the Master Trust. the followin powers and duties. which are to be exercised as the Fund Adm nistrator. in is-discreionsall- deine. nameiv:

(a) In General. To perform the duties of Fund Administrator set forth in this Master Agreement and PUC Sbstantive Ru e.§25.303. andnotwi thstandingjiin provisions of this Master Agreement to the contrary. the powers and duties of the Fund Administrator are exclusively ranted and reserved to the Fund Administraand neither the Trustee, nor any Investment Manager nor the Company shall have any..powers inconsistent with such exclusiyerant and reservation, (b) Retention of Professional Servicesi. Toexecute any of the powers hereof an dperform the duties requied of it hereunder by or through its emplovees. agents attorneys or receivers.

(c) Desi ation of Ministerial Powers. To dekgare to otie persons such ministerial powers and duties as the Fund Administrator may dcemtobbe advisable NYI-2165801v24

fd) Powers ofPund Administrator to Continue Until Final Distribution. To exercise anysuh powers after the date on which the principal and income of the Master Trust shall have become distributable and until such time as the entire prmnipnc of and income from. the Master Trust shall have been actually distributed by the Trustee. It is intended that distribution of the Master Trust will occur as soon a possible upon termination of the Master Trust, subiect, however, to Sections 204(d). 08 and 209.

Le) Discretion in Exercise of Powers. To doainyjand all other acts, not inconsistent with PUC Substantive Rule § 25.303, which the Fund Administrator shall deem proper to effoctiateihepowers spei nerred fal upon it by his Agreement 7.2. Designation and Qualification of Successor Fund Administrator(s). At

my Aime-duLinn the term of thiasMaer Trusthe initial Fund Administrator or the Company mavrequest from the PUC. in accordance with PUC Substantive Rule § 25.303. an order pproving the Company as successor-Fund Administrator. In the event that the Fund Administrator or any Successor Fund Administrator shall: (a) become insolvent or admit in writin its insolvency;ib) be Lunable to admit in writingits-inability to pay its debts as such debts mature; (c) makea eneral assignment for the benefit of creditors: (d) have an involuntary petition in bankruptcy filed aipst it;ode commence a cause under or otherwise seek to take a a a anvbankruptcyr , i nl custment of debt, dissolution or liquidation lawstature r ocedingsompany -equest from thPU.P in ag ordiance with PUC Substantive Rule § 25.303,m order npproving> Fundministrator. Any Successor Fund Administrator shall accept its appo ntm nto seL e by a duly acknowleged eacceptance of this Master Trust. delivered to the Company. the Trustee and the Fund Administrator then serving. The acceptance shall specify the date on which it will assume its duties as Successor NYI-216580v14

Fund Administrator, which daite shall be at least ten daysfifter deliveryvof the acceptance to the Company, the Trustee and the Fund Administrator then serving. unless all such parties agree to an earlier date. Any Successor Fund Adminis rator shall have all theights, powers.duties and lios ein rted to the oricinal Fund Administrator.

7.03. Compensation. The Fund Administrator shall be entitled to compensation as mav be agreed to from time to time by theCompimy nd the Fund Administrator, Such gompensation shall constitute an Administative Cost and shall benpayable from the Master T~rust.

7.04. Liab lityvEhe Fund Administrator shall be liable for the acts, nissions and daefults of its own officers.employees and agents. The Fund Adtinistrator shall not be liable for the acts or omissions of any Investment Manaiger(s) actingjeret der. The Fund Administrator shall not be responsible or liable for any losses or dciages suffered by the Fund pris~nmgs a result of theinsoency of any custodian, subtrustee or subcustodian.except to the extent the Fund Administrator was n ligent in its selection or continued retention of such entity.

and shall not be liabc for any indirect, conseugential iors-Pecial damages with respect to its role as Fund Administrator.

7.05. Indemnity of Fund AdministratorThe Comppqy shall indemniNand hkld harmless the Fund Administrator from all claims. liabilities, losses. damages and expgnses includingjeasonable attorneys' fees and expenses incug d the Fund Administrator in connection with this Agreement. except as a result of the Fund Administrator's own gross negligence or wvillfuL isconduct provided, that this Section 7.05 shall not apply to any obligation of TCC under Section 2 of the DFCA (whether in respect of collection, remittance or NYI-216580OvI4

notificationLorto any clairnsliabilities, lossesdamags or exrpenses inculrredin connection With any such obligation. This indemnification shall survive the termination of this Abaement.

7.06. Schedule of Fund Administrator's Affiliates. The Fund Administrator shall admenExhibit B from time to time so that it contains a true, complete and correct listing of all affiliates of the Fund Administrator.

ARTICLE VIARTICLE-VI!

MISCELLANEOUS MISCELLANEOUS 8.01. Schedule of Company Affiliates. The Company shall amend Exhibit B from time to time so that it contains a trtnie-mplete and correct listn-ofl affiliates of the Compan.

.12, 77.01. Alterations and Amendments. The Trustee and the Company understand and agree that modifications or amendments may be required to this Agreement from time to time to effectuate the purposes of this Master Trust. This Agreement may be amended by an instrument in writing executed by the Fund Administrator, the Company and the Trustee.

Copies of all such amendments shall be provided to the PUC at its address in Austin, Texas.

This Agreement may not be amended so as to violate Section 468A with respect to the Qualified Funds- or PUC Substantive Rule §25.303. Notwithstanding any provision herein to the contrary, (i) the Fund Administrator or the Company andthe ist, by mtitualaeementav from time to time, revise Exhibit B hereto.and Lhe F nd Administrator may from time to time revise Exhibits C and D hereto, and (ii) this Agreement cannot be modified in any material respect without first providing thirty days' prior written notice to the NRC Director, Office of Nuclear Reactor Regulation.

NYI-2165801v14

8.03. I-. 2-Headings. The section headings set forth in this Agreement and the Table of Contents are inserted for convenience of reference only and shall be disregarded in the construction or interpretation of any of the provisions of this Agreement.

8.04. 7A03. Particular Words. Any word contained in the text of this Agreement shall be read as the singular or plural and as the masculine, feminine or neuter as may be applicable or permissible in the particular context. Unless otherwise specifically stated, the word "person" shall be taken to mean and include an individual, partnership, association, trust, company or corporation.

8.5. 7-04-.Parties Interested Herein. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon, or to give to any person, other than the Companythe Fund Administratori TCC and the Trustee, any right, remedy or claim under or by reason of this Agreement, or any covenant, condition or stipulation contained-herein. The Company shall be entitled to receive payments for Decommissioning Costs and Administrative Costs which the Company may incur.!and the Fund Administrator and TCC shall be entitled to receive payments for Administrative Costs which the Fund Administrator or TCC may incur.

TCC shallbe an express third-party beneficiary of this Trust Agreement and shall be entitled to enforce the terms and conditions thereof.

8.06. 7.05. Severability of Provisions. If any provision of this Agreement or its application to any person or entity or in any circumstances shall be invalid and unenforceable, the application of such provision to persons and in circumstances other than those as to which it is invalid or unenforceable and the other provisions of this Agreement shall not be affected by such invalidity or unenforceability.

NYI-2165801vP4

8.07. 7.06-Form and Content of Communications. The names of any person authorized to act on behalf of the Company or the Fund Administrator shall be certified, with the specimen signature of such person, to the Trustee by the Company or the Fund Administrato, respectively. Until appropriate written evidence to the contrary is received by the Trustee, it shall be fully protected in relying upon or acting in accordance with any written notice, instruction, direction, certificate, resolution or other communication believed by it to be genuine and to be signed and/or certified by any proper person, and the Trustee shall be under no duty to make any investigation or inquiry as to the truth or accuracy of any statement contained therein.

Until notified in writing to the contrary, the Trustee shall have the right to assume that there has been no change in the identity or authority of any person previously certified to it hereunder.

8.08. 7-.07-.Delivery of Notices Under Agreement. Any notice required by this Agreement to be given to the Company or the Trustee shall be deemed'.to'have been properly

-giventwhen delivered, or when mailed, postage prepaid, by registered or certified mail, to the person to be notified as set forth below:

If to the Company:

Texas Genco, LP c/o Texas Genco GP. LLC 1111 Louisiana Street Houston, Texas 77002 Attention: Treasurer If to the Fund Administrator:

AEP Texas Central Company I Riverside Plaza Columbus. Ohio 43215 Attention: Secretary NYI-2165801 XM4

If to the Trustee:

Mellon Bank, N.A.

One Mellon Bank Center Pittsburgh, Pennsylvania 15258 Attention: Glen Metzger, Trust Officer The Company, the Fund Administrator or the Trustee may change its respective address by delivering notice thereof in writing to the other party.

8.09. 7.08. Successors and Assigns. Subject to the provisions of Section 2.07 and 6.02 this Agreement shall he binding upon and inure to the benefit of the Company, the FRund Administrator the Trustee and their respective successors and assigns.

8.10 7.09. Governing Jurisdiction. This Master Trust is a Texas trust, and all questions pertaining to its validity, construction and administration shall be determined in accordance with the laws of the State of Texas, including the Texas Trust Code, as if executed in and to be wholly performed within the State of Texas; provided, however, that the Trustee need not be qualified to exercise trust powers in the State of Texas.

8.11. 70. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

8.12. 7-1-1.-Compliance with Laws, Rules and Regulations. The CompanyQ Fund Administrator and the Trustee intend that this Agreement, all investments made for the Funds and all action taken hereunder shall comply in all respects with federal, state and other laws, rules and regulations applicable to the Funds and this Agreement, including without limitation, rules and regulations promulgated by the NRC and the PUC. Therefore, each of the Trustee, the Fund Administrator, the Company and any Investment Manager shall each comply NYI-2165801v14

with all federal, state and other laws, rules and regulations that may be applicable to it in connection with the performance of its duties under this Agreement.

8.13 74.2-'.Force Maieure. Notwithstanding anything in this Agreement to the contrary, the Trustee shall not be responsible or liable for its failure to perform under this Agreement or for any losses to the Fund resulting from any event beyond the reasonable control of the Trustee, its agents or subcustodians, including but not limited to nationalization, strikes, expropriation, devaluation, seizure, or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions, exchange controls, levies or other charges affecting the Fund's property; or the breakdown, failure or malfunction of any utilities or telecommunications systems; or any order or regulation of any banking or securities industry including changes in market rules and market conditions affecting the execution or settlement of transactions; or acts of war, terrorism, insurrection or revolution; or acts of God; or any other similar event. This Section shall survive the termination of this Agreement.

NYI-2165801v4

NYI-2165801v1

IN WITNESS WHEREOF, the Company and the Trustee have set their hands and seals to this Agreement as of the day and year first above written.

TEXAS GENCO, LP y:LTexas Ge nco GP, LC, Its General Partner By

Title:

MELLON BANK, N.A.

By

Title:

Vice President

.s - I as ofI this ACkznewled~ged ____ dlay Of ______, 4UUIZ~.

AEP TEXAS CENTRAL COMPANY

Title:

E NT ENERqGY, 1as su&o to Hoiso Ligtin &Powcr\s*- ':

' D OUSTONO-G- - LT , ;l.

'Title: 'Vice Chairm'n, President Q Title Chaian NYI-216580N1v

nIAWHbEOFLGONTLLNTS aentsnted)

Page Exhibit A DISBURSEMENT CERTIFICATE The undersigned, being an Authorized Representative of ITexas Genco, LP (the "Company"),/AEP Texas Central Company, a Texas co oration.] a Texas limited partnership, and, in such capacity, being authorized and empowered to execute and deliver this certificate, hereby certify to the Trustee of the Texas Genco Decommissioning Master Trust for the South Texas Project, pursuant to Section 2.04 of that eertain Second Amendedd nd-Restated Decommissioning Master Trust Agreement, dated as of August 31, 2002, . 2005.

between the Trustee, the Fund Administrator and Company as follows:

(1) the ICompanylfund Administro has incurred Decommissioning Costs in connection with the decommissioning of STP Unit No. [1] [2] or Administrative Costs relating to the Master Trust in the amounts and for the purposes provided on the schedule attached hereto; and (2) all such amounts constitute Decommissioning Costs or Administrative Costs.

Accordingly, you are hereby authorized to withdraw $ from the [STP Unit No. [1] [2] [Non-]Qualified Fund of the Master Trust and to pay such amount to the Company for such purpose. You are further authorized to disburse such sum, once withdrawn, directly to such Payees in the following manner: [Describe: CHECK, WIRE TRANSFER, ETC.] on or before ,

Executed this day of ,_i.

By Authorized Representative N7-7 I!2iG-77777' Nfl772177 7777.71

Exhibit B SCEDALEQF FUND ADMINISTRATOR AND COMPANY AFFILIATES ITO CO-MEII NYI-21658Ovl4

Exhibit C INVESTMENT GUIDELINES ILQCOME NYI-2165801v14

Exhibit D PORTFOLIO REVIEW ACTIONS OF TRUSTEE FOR FUNDS MANAGED BY INVESTMENT MANAGER

[TO COMEl NYI-21658Ovl4

v t e Letter Sequence Other
TAC:MC4732, (Approved, Closed) TAC:MC4733, (Approved, Closed) TAC:MC4917, Increase Flexibility in Mode Restraints (Approved, Closed) TAC:MC4918, Increase Flexibility in Mode Restraints (Approved, Closed)
Initiation Request Acceptance... Administration Withholding Request Acceptance Questions Answers Results Approval Other: ML042950615, ML043520018, ML050590047, ML050800505, NOC-AE-04001831, Additional Information Regarding the Sale of Ownership Interests in the South Texas Project, NOC-AE-05001850, Submittal of Erratum for Letter, E. D. Halpin to J. E. Dyer, Additional Information Regarding the Sale of Ownership Interests in the South Texas Project, NOC-AE-05001857, Texas Genco, LP Decommissioning Master Trust Agreement, NOC-AE-05001875, Support Agreement for Texas Genco, LP
MONTHYEAR2005-04-04 [Table View]

NOC-AE-05001857, Texas Genco, LP Decommissioning Master Trust Agreement

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