ML17297B280

Salt River Project - Authority,Palo Verde Nuclear Generating Station Assignment Agreement Between Salt River Project Agricultural Improvement & Power District & Southern CA Public Power Authority.

ML17297B280
Person / Time
Site:	Palo Verde
Issue date:	08/14/1981
From:	ABEL K F, ROSS P C SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT & POWER, SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
To:
Shared Package
ML17297B279	List: ML17297B278 ML17297B280
References
NUDOCS 8202160416
Download: ML17297B280 (140)

Text

tEXSCUTZON COPY]SALT RIVER PROJECT-AUTHORITY PALO VERDE NUCLEAR GENERATING STATION ASSIGNMENT AGREEMENT SALT RIVER PROJECT AGRICULTURAL INPROVEKWZ AND POWER DISTRICT AND SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY 0 82021b041b 82PP10'PDR ADOCK 050ppggg.PDR J I'J/Q~

~y g7 li e 2.3~6.7~TABLE OF CONTENTS PART I ES o~~~>>~~~,~~~~~~~RECITALS:...~DEFINITIONS:

~.~AGREEMENT:

..~'..,~EFFECTIVE DATE AND.TERM: ASSIGNMENT AND TRANSFER OF INTERESTS:

~~~o-~~~~~~~~FINANCIAL CONSIDERATION:

'~4>2~~~2~,~,4 i~=~~6~~~6~~~6~-~~8 8.REGULATORY AND OTHER APPROVALS:

...'10 9.TRANSMISSION ARRANGEMENTS:

..~.~~oil10.12.ACCESS TO INFORMATION:

~.~~~~-~~~~1'6 CONDITIONS PRECEDENT TO,SALT RIVER PROJECT OBLIGATION HEREUNDER:

~....17 GENERAL PROVISZONS:

....~~...11 13.14.16.17.18.19.20.CONDITIONS PRECEDENT TO OBLIGATION HEREUNDER:

BINDING OBLIGATION:

WAIVERS: SURVIVAL: NOTICE: JOINT PLANNING: GOVERNING LAW: EXECUTION:

ACKNOWLEDGMENTS EXHIBITS 1-4.ANNEX A AUTHORITY.18~~o 19~~~19~~~~~19.19~~~20.20.20~~~I~.~.~~~I~~~A l II SALT.RIVER'PRO JECT-AUTHORITY PALO VERDE NUCLEAR GENERATING STATION ASSIGNMENT AGREEMENT 1.PARTIES: The parties to this-Salt River Project-Auth'ority, Palo Verde Nuclear Generating Station Assignment Agreement (hereinafter referred to as"this Assignment Agreement").are:.SALT RIVER-PROJECT AGRICULTURAL ZMPROV12Kh&

AND POWER.DISTRICT, an agricultural improve-ment district organized and existing under and by virtue of the laws of the State of Arizona, hereinafter referred to as"Salt River Project", and SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, a public entity organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as".Authority" (such parties being, sometimes referred.to individually as"Party" and col-lectively as"Parties").2~RECITALS: 2.1,.2.2.Salt River Project, subject-to the transaction described, in Section 2.2 hereof, owns,(i),a

.29.1%Generation Entitlement.Share and a'29.;1%undivided ownership interest as a'tenant in common in the Palo Verde Nuclear Generating Station, the'Project Agreements and certain other property and rights provided for, contemplated by or resulting from'he Project Agreements, all collectively hereinafter referred to as"Salt River Project's ANPP Interest", (ii)a 29.1%partnership interest in PVUV (hereinafter referred to as"Salt River Project's PVUV Interest")and (iii)a,29.1%undi-vided ownership interest in that portion of the ANPP High Voltage Switchyard described in Section I.2.1 of.Appendix I of the ANPP Participation Agreement (hereinafter referred to as"Salt River Project's Switchyard Interest").

Salt River Project and the.Department of Water and Power of The City of Los Angeles, hereinafter referred to as"Los Angeles", have entered into an agreement which provides, among other matters, that contingent upon (i)receipt of the required approv-als of the United States Nuclear Regulatory Commission

("NRC")and (ii)the date of firm operation of the first generating unit of the Palo Verde Nuclear Generating Station having occurred, I.g4 2.3.Salt River Project w'ill transfer a 3.7%Generation Entitlement Share and undivided, ownership interest in Palo Verde Nuclear Generating Station, a 5.7%undivided ownership interest in that portion of, the ANPP High Voltage Switchyaro described in Section I.2.3.of Appendix I of, the ANPP Participation Agreement, and a:5 7%partnership interest in PVUV, respectively..

Salt River Project desires to transfer and,assign to Authority a portion of Salt:River.Project's ANPP Interest, Salt River Project's>VUV interest and Salt River Project's Switchyard Interest.in the amounts and on Me terms and conditions.hereinafter stated.2.4.2.5.2.6.The ANPP Participation Agreement provides that Salt River Project may assign all or.a portion of Salt River Project's ANPP Interest and Salt River Project's Switchyard

'Interest'without the prior written consent of any other Participant, to any person, partnership, corporation,.or.government corporation or agency engaged in.the generation, transmission or distribution of.electric energy;and the PVUV Agreement provides that.Salt River Project may assign.all or a portion of.Salt Mver Project's PVUV Interest without<he prior written consent of any other member, to.any~rson, part-nership, corporation or governmental corporation or agency who is or becomes,a'Participant.

Authority is a public entity of the State of California, created as of November 1, 1980, pursu-ant to the California Joint Exercise of Powers Act and the Joint Powers Agreement among the members of Authority, and is authorized to engage in the gen-eration and/or transmission of electric energy.Authority desires to a'cquire a.portion of Salt River Project's ANPP Interest, Salt River',Project's PVUV Interest and Salt River Project's Switchyard Interest in the amounts and on the terms,and condi-tions hereinafter stated.2.7.Neither Authority nor Salt River Project will be required to construct any new transmission or interconnections in order to effect the transfer of the interest or rights contemplated by this Assignment Agreement or.to accommodate the transmission of electric power and energy 0

contemplated by.this Assignment Agreement or the Transmission Agreement.

3.DEFINITIONS:

In addition to the other terms defined herein,'he follow-ing terms, whether.in the singular or in the plural, when used herein and initially capitalized, shall have the meanings specified:

3.1.The following terms used herein shall have the meanings given thereto in'the ANPP Participation Agreement:

ANPP, ANPP High Voltage Switchyardf Generation Entitlement Share, Operating.Agent, Palo Verde Nuclear Generating Station, Participant and Project Agreements.

3.2.Agency Agreement means the.Palo Verde Nuclear Generating Station Agency Agreement between Los Angeles and Authority.

3.3.Agent means Los Angeles as agent for Authority pur-suant to the Agency Agreement.

,3..4.ANPP Participation Agreement means the.Arizona ,Nuclear Power, Project Participation Agreement, dated August 23,.1973, as heretofore.

amended by the Amendment Nos.1 through 5 and as hereafter amended from time to time.3.5.3.6.ANPP Transmission System shall have the.meaning set forth in the Transmission Agreement.

Closing Date means the business day designated by Authority in writing to Salt River Project upon which the transfers and assignments contemplated.by Section 6.1 hereof and the payment contemplated by Section 7.3 hereof are to be made, which day shall be no later than the date which.is the first busi-ness day following the expiration of 90 days after the date on which the written statement provided for by Section 7.2 hereof is received.Upon either Party's request made in writing-to Me other Party at any time prior to the expiration of the 90-day period referred to in this Section 3.6, said 90&ay period shall be extended to 270 days (without fur-ther action by either Party).Notwithstanding the foregoing, the Parties may at any time agree in writing to a different Closing Date.

3.7.3.8.3.9.3.10.3.11.Cost means, with respect to the property and interests to.be transferred or assigned pursuant to this Assignment Agreement and as of any date of determination, the sum of (i), the actual recorded cost, (including AFUDC)of such property and inter-ests on the accounting records of Salt River Project on such date, (ii)a one-time administra-tive charge of$8,367,539 and (iii)a carrying cost for each month after ltay 1981,and prior to the date of determination equal to (a)the portion of.the actual cost.referred to in clause (i)above paid by Salt River Project during, such month, multiplied by (b)one-twelfth of 60%, of the announced annual Prime interest Rate of Bank of America National Trust and Savings Association in effect on the last day of such month.Member shall have the meaning given thereto in the PVUV Agreement.

Project Manager means the Project Manager under the Participation Agreement, the project manager under Section l.3.1.of Appendix.I to such Agreement or the Managing Member under the PVUV Agreement, as the case may be.PVUV means the Palo Verde Uranium Venture, a part-nership consisting of the'Participants.

or their respective subsidiary companies, organized and established by the PVUV Agreement.

PVUV Agreement means the Palo Verde Uranium Venture Agreement dated as of January 7, 1977, as hereto-fore"amended by Amendment No.1 and as hereafter amended from time to time.3.12.Termination Date means the date one year following the later of (i)the effective date of this Assignment Agreement, or (ii)the date on which the initial filing is made with the NRC with respect to the approval of the NRC contemplated by Section 8.1 hereof;, ," that the Texmination Date may, by written agreement between Salt River Project and Authority, be extended at any time and from time to time.3.13.Transmission Agreement means the transmission agreement, substantially in the form included herein as, Exhibit 2, to be executed and delivered by the Par ties.

3.14.Uniform System of Accounts means the"Uniform System of Accounts prescribed for Class.A and.B Public Utilities and Licensees" as prescribed,and, from time to time,.as amended or modified by<he Feder al Ener gy Regulatory Commission or.its successor.

4~AGREEMENT:

'I In consideration of the premises.and,the mutual covenants contained.herein, the Parties agree as'follows: 5.EFFECTIVE DATE AND TERM: This Assignment Agreement shall become effective on the date set forth in Section 20 hereof and shall continue, in.full force and effect thereafter, except as terminated pursuant to Section 8.3 hereof., 6 ASSIGNMENT.AND'TRANSFER OP INTERESTS:

6.1.Subject, to the terms and conditions of-this Assignment Agreement, on the Closing.'Date.Salt River Project shall deliver.to Authority:

6.1.1.An instrument, in a form recordable under Arizona law, which, subject to the provisions of Section 15.5 of the ANPP Participation Agreement, has the effect of making Authority a Participant and conveys to Authority as a tenant in common portions of Salt River Project's ANPP Interest and Salt River Project's Switchyard.Interest, each in an-amount equal to (i).a 5.91%Generation Entitlement, Share and undivided owner-ship interest in Palo'Verde'Nuclear Generating Station, the Pro'ject Agreements and the other property and rights provided for, contemplated by or resulting from the Project Agreements, and (ii)a 5.91%undivided ownership interest in that portion of the ANPP High Voltage Switchyard described in Section I.2.1 of Appendix I of the ANPP Par ticipation Agreement.

6.1.2.6.1.3.An instrument which, subject to the provisions of Section 11.4 of the PVUV Agreement, has the effect of making Authority a>lember and conveys to Authority a portion of Salt River Project's PVUV Interest,.in an.amount equal to a 5.91%interest in PVUV.Each of the instruments, referred to in this Section 6.1 shall convey to Author i ty all of Salt River Pro j ect'.s right<title and interest in the por-tions of Salt River Project's ANPP Interest, Salt River Project'Switchyard Interest and Salt River Project's PVUV Interest so to be transferred.

Each such instrument shall contain a covenant by Salt River Project to indemnify and hold harmless Authority against all liens, charges and encum-br anc'es (" Liens")relating.to<he.inter-ests.so to be transferred arising by, through or as a result of (i)any inden-ture, resolution, or other debt-instru-ment, to which Salt.River Project is a party or to which any of its properties is subject, or (ii)any agreement or other instrument assigning, transferring or encumbering, in whole.or in part, any of the interests so to be transferred, except f or the assignment and transf er contemplated hereby, and except and to the extent of the transaction described in Section 2.2 hereof.Notwithstanding the foregoing, such covenant shall not indemnify and hold harmless Authority against any Liens created.by, thro'ugh or as a result of the ANPP Participation Agreement, the PVUV Agreement or any other Project Agreement.

6.2.6.3.Notwithstanding any other provision of this Assignment Agreement<

the ANPP Transmission System shall be excluded from the interests transferred and assigned pursuant to this Section 6.Subject to the terms and conditions of this Assignment Agreement, on the Closing Date Authority shall accept the transfer and.assignment made pursuant to Section 6.1 hereof and on and after the Closing Date shall be entitled>>to all rights and 0

benefits, and shall assume and agree to perform and discharge all of the obligations, of a Participant with a 5.91%Generation.Entitlement Share under the ANPP Participation Agreement and of a'Member with a 5.91%partnership interest.under the PVUV Agreement,-to the same extent (and with respect to the interests so transferred and assigned)as i.f it had been a Participant, Member or joint owner in Palo Verde Nuclear Generating Station and PVUV since their respective inceptions.

6.4.Prom time to time as either Party may reasonably request in writing, the Parties, shall execute,and deliver such documents as may be appropriate to implement this Assignment Agreement, to.comply.with the ANPP Participation Agreement or the PVUV Agreement, or to satisfy requirements established by law or by any mortgage, trust indenture or other financing or security arrangements of either Party.7~PINAHCIAI, CONSIDERATION:

7.1.7.2..Based on currently.available information, Salt River Project's best estimates of the Cost of the interests to be assigned and transferred pursuant to Section 6 hereof, as of various assumed Closing Dates, are set forth in Exhibit 1 hereto.On or about the last day of March, June, September and December of each year, until the Closing Date, Salt River Project will provide to Authority a revised Exhibit 1, setting forth its then best estimates of such Cost, based on then available information, assuming Closing Dates on the last day of each of the seven consecutive calendar months beginning with the calendar month ended most recently, before the providing of said revised Exhibit l.Not more than fifteen business days after the approvals contemplated by Section 8.1 hereof have been issued and become final and non-appealable, Salt River Project shall provide'Authority with a written statement of Salt River Project's then best estimate of the Cost of the interests to be assigned and transf erred pursuant to Section 6 hereof, brok'en down into major categories and cal-culated as of the then anticipated Closing Date.7.3.Subject to adjustment pursuant to Sections 7.4, 7.5 and 7.6 hereof, as full compensation, satisfaction

and payment for the assignment and transfer contemplated by Section 6 hereof,.Authority:agrees to pay and Salt River Project agrees to accept, the amount specified in Salt River Project's written statement provided pursuant to Section 7.2 hereof, said amount to be payable in full on the Closing Date.7.4.Not more than.20 days following the end of the cal-endar month in which the Closing.Date occurs,,Salt River Project shall, furnish Authority;and Agent a written statement showing Salt River'Project's Cost for the interests assigned and transferred on the Closing Date, to the Closing.Date, broken down into major categories, and such statement shall also include a certificate of the Treasurer of.Salt River Project stating that such cost has been com-puted in accordance with the definition of Cost set forth in Section.3.'7 hereof and that Salt River Pioject keeps its books generally as.provided for in the Uniform System of.Accounts.

7.5.As pr omptly,as practicable af ter,-receipt by Authority and Agent of, such.statement,'Agent shall review such statement in detail with Salt River Project.For-purposes of such;review,'Salt'River Project shall provide Agent-wi4h access'to'Salt River Project's accounting records relevant to such statement, at such reasonable 4imes as Agent, shall request.For purposes of such review, it shall be conclusively assumed that all costs shown in such accounting records which agree with the billings (and adjustments thereto)under the Participation Agreement and PVOV Agreement provided to Salt River Project from time to time by the Project Nanager are true and correct.If, upon completion of such review, Agent shall disagree with any item set forth in such statement, it shall notify Salt'River Project of such disagreement and Salt River Project and Agent shall proceed to resolve, as promptly as practicable, such disagreement, making such adjust-ments to such statement as shall.be appropriate to accurately reflect the Cost, of the interests assigned and transferred on the Closing Date pursu-ant to Section 6 hereof.It is understood that the portion of the Cost which reflects the administra-tive charge specifie5 in Section 3.7 (ii)hereof is not subject to review or adjustment.

7.6.As promptly as practicable after completion of the procedures described in Section 7.5 hereof, if

(i)such statement (adjusted, as appropriate)

, specifies a Cost in excess of the amount paid by Authority on the Closing Date, Authority shall pay the amount of such excess to Salt River Project or (ii)such statement (ad justed, as appropriate) specifies a Cost less than the amount paid.by Authority on the Closing Date, Salt River Project shall pay the amount of the, difference to Authority.

and the authorization of the Contracting Officer of the Department of Znergv with respect to certain uranium enrichnent contracts and the agreement for delivery of uranium hexafluoride,'.REGULATORY AND OTHER APPRKQLLS=

8.1.the authorization of Authority to.conduct affairs as a foreign corporation in the State of Arizona under Title 10.of the Arizona Revised ues, Consummation of the transfers and assignments con-templated by this Assignment Agreement is subject to receipt of (i)in the case of both Parties, the approval, authorization or consent of the NRC,'nd any other governmental.body whose approval may be required as a result of legislation enacted after the effective date of this Assignment Agreement and (ii)in the case of'uthority,I the authorization by each member of the Authority of the issuance of indebtedness by the Authority contemplated by Section 10.8 hereof and the approval.by the govern-ing body of each member purchasing output of the Authority's interest in Palo Verde Nuclear Generating Station of the contract with the Authority under which such purchase will be made.Salt River Project and Authority each represent and warrant to the other that, as of the effective date of this Assignment Agreement, no approval, authori-zation or consent of any entity not identified in Section 8.1 hereof is required with respect to it for it to perform its o'bligations under this Assi gnmen t Ag r cement or the Transmission Agreement.

8.3.~~In the event either (i)the regulatory and other approvals contemplated by Section 8.1 hereof have~not been received and become final ano 4!non-appealable by the Termination Date or (ii)the transfers and assignments contemplated by Sect>on 6.1 hereof and the payment contemplateo by Section 7.3 hereof has not occurred by the latest Closing Date permitted under Section 3.6.hereof, then this Assignment Agreement shall terminate and be of no further force or effect.Authority and Salt River Project also agree that, in the e~nt authoriza-to conduct irs in Arizona as contemplated by Section 8.1 ii is-1 0-().denied to Authority, Authority and Salt River Project will use their best ef-forts to arrange an alternate structure for the accomplishment of the trans-actions contemplated hereby which provides to Authority and Salt River Project>>respectively,.the originally

-contem'plated benefits of such transactions.

8.4..Each Party agrees it shall use its best ef f orts to assure that all filing and data collection require-ments that are necessary to obtain.the approvals contemplated by Section.8.1.hereof and that are within the control of such Party shall be completed in an expedient manner as soon as possible so as not to impede the normal processes involved in obtaining such regulatory approvals.

9.TRANSMISSION 2QGVLNGEMENTS:

On or prior to the Closing Date, the Parties will execute ano deliver the Transmission Agreement.

10'ENERAL PROVISIONS:

10.1.Salt River Project.hereby represents and-warrants to Authority that as of, the date hereof: 10.1.1.Salt River'Prospect is an agricultural improvement district duly organized and validly existing under the.laws of the State of Arizona, and has the power and authority to own Salt River.Project's ANPP Interest,.Salt River Project's Switchyard.Interest and.Salt River Project's PVUV Interest and.to perform its obligations unoer the ANPP Participation Agreement, the Project Agreements and the PVUV Agreement.

10.1.2.The ANPP Participation Agreement, the Pr o j ect Agr eements and the PVUV Agreement have.been duly authorized, executed and delivered by Salt River Project, and are legal, valid and bind-ing agreements.

10.1.3.Salt River Project is not'in any materi-ally adverse respect in breach of, or default under, any of the terms of the ANPP Participation Agreement, the Project Agreements, or the PVUV Agreement and to the best of Salt River Project's knowledge no event has occurred and is continuing which with the passage of time or giving of notice, or both, would result in Salt River Pr o j ect being in any materially adverse

respect in such breach or default.Salt River Project has not received notice (i)that any other Participant is in breach of, or default under, any of such Agreements or (ii)that any event has occurred and is continuing which with the passage of time or the giving of notice, or both, would result in any such Participant being in such breach or default.10.1.4.Except for the assignment and transfer to Authority contemplated hereby and except and to the extent of the transac-tion described in Section 2..2 hereof, Salt River Project has not assigned, transferred, or encumbered or agreed to assign, transf er or encumber, in whole or in part, any of the interests.

to be transferred and assigned hereunder.

10.1.5.The execution, delivery and performance of this Assignment Agreement and the Transmission Agreement by Salt River Project have been duly and effectively authorized by all requisite action of the Board of Directors of.Salt River Project.Authority hereby represents and warrants to Salt R~ver Project that as of the date hereof: 10.2 Authority is a legal entity duly orga-nized and validly existing under ihe laws of the State of California, and has the power and authority to (i)subject to the receipt of the approvals contem-plated by Section 8.1 hereof, own the po r ti ons of Salt River Pro j ect'ANPP Interest.<Salt River Project'Switchyard Interest, and Salt River Project's PVUV Interest, respectively, contemplated to be trans erred and assigned pursuant to this Assignment Agreement and to perform its obligations under the ANPP Participat'on Agreement, the'PVUV Agreement and the Transmission Agreement and (ii)sell the output of the Palo Verde Nuclear Generating Station so acqu'ed to members of Autbori-'v.

C 10.2.2.The execution and delivery of this Assignment Agreement and the Transmission Agreement by Authority have been duly and effectively

'authorized by all requisite action of the Board of Directors of Authority.

10.2.3.Pursuant to the Agency Agreement, Authority has,authorized the Agent to perform the functions, duties and obli-gations to be performed, by the, Agent under this Assignment Agreement and the'ransmission Agreement and the Agency Agreement is a legal, valid and binding agreement of Authority.

10.2.4.It is not necessary to seek a judicial determination of legislative or'onsti-tutional authority of Authority to con-summate the transfer,.and assignment con-templated in Section 6 hereof or the financing thereof by Authority.

Salt River Project has.not made, and does not hereby make, and Authority has not relied, and does not rely, upon any representations or warranties, other than those set forth in.Sections,8.2,,10.1, 10.6 and 13 hereof and other than the covenant con-tained in each of the instruments delivered pursu-ant to Section 6.1 hereof, respecting this transac-tion, the value of any interest to be transferred and assigned hereunder either at the effective date of this Assignment Agreement or at the Closing Date, the validity or enforceability of any Project Agreement, the title, right or interest to any property comprising the Palo Verde Nuclear Generating Station, PVUV, or the ANPP High Voltage Switchyard, the status of any of such project or the existence or absence of any.claims by any ven-dors, contractors or subcontractors providing equipment o services for the construction or oper-ation of the Palo Verde Nuclear Generating Station or for the business of PVUV or for the construction of ANPP High Voltage Switchyard.

It is the intent of the Parties that Authority shall assume its pro rata share of all risks associated with the Palo Verde Nuclear Generating Station, PVUV and the ANPP High Voltage Switchyard from and after the Closing Date.

I 4~~1 Until the Closing Date, Salt River Project shall consult with Authority as to.all matters which,.in Salt River Project's judgment, have a significant impact on the costs of and/or schedule for.Palo Verde Nuclear Generating Station." Salt River Project shall have the right and duty to perform the obligations set forth in the ANPP.Participation Agreement and the Project.'Agreements with respect to its total ownership and.membership interest and shall treat the interest to be assigned and trans-ferred to Authority in the same manner as it.treats its interest not so assigned and transferred to Authority.

Subject.to.the foregoing, Salt:River Project shall have-the right to execute and deliver (a)new Project Agreements and (b)amendments to the ANPP Participation Agreement and any Project Agreements.

Nothing herein shall be construed to require Salt River Project to obtain the consent of Authority to any action required to be taken by Salt River Project under either the ANPP Participation Agreement or the Project Agreements.

Authority has been advised that the Participants, as of the e f f ective date of this Assignment Agreement, are contemplating.execution, of an Amendment No.6 to the ANPP Partici*pation Agreement, a copy of which is attached hereto as Annex A.Nothing herein shall preclude Salt River Projec't from executing said Amendment No.6, in substantially the form attached as Annex A,,and Authority expressly recognizes Salt River Project may execute Amendment No..6 prior to the Closing Date.10.5.10.6.Agreement No.13904-Option and Purchase of Effluent, dated April 23, 1973, is a Project Agreement.

However, nothing in this Assignme..t Agreement shall give Authority any right or inter-est in such agreement or in any other agreement which may be entered into by Salt River Project for the purchase'f effluent, or in any effluent as may become available for purchase thereunder in excess of that required for operation of the Palo Verde Nuclear Generating Station.'t the effective date of this Assignment Agreement, each Party shall f urnish to the other Party an opinion of counsel satisfactory to the other Party which states that the furnishing Party has the authority to enter into this Assignment Agreement and the Transmission Agreement, that each is fully enf orceable against the urnishing Party in 1't' accordance with its terms (except as'the provisions of this Assignment.Agreement and the Transmission Agreement may be limited by usury,.bankruptcy, insolvency, reorganization or other laws relating to or affecting.the enforcement of creditors'ights and other laws of general application affecting the rights and remedies of creditors, and except that the availability of the remedy of spe-cif ic enf orcement or of in junctive:relief is subject to the discretion of the court.before which any proceeding therefor may be brought)and that the representations and warranties of the furnish-ing Party contained in this Assignment Agreement are, as to matters of.law, true and correct.At the Closing, Date, Authority, pursuant to%his Assignment Agreement, shall be assigned a 5.91%interest in PVUV..In the event the Operating Agent advises in writing, pursuant to Section 8.1 of the PVUV Agreement, that all, or any part, of the ores or concentrates produced from the joint venture established by said PVUV Agreement are:not required for the Palo Verde Nuclear Generating Station, and the manageme'nt committee established.under said PVUV Agreement shall have determined that disposi-tion of such ores or concentrates shall be by sale by any or all of, the Members, then,.subject to Section 8.2 of the PVUV Agreemenk, Salt River Project shall have the preferential right and option to purchase all or a part of said ores or concentrates from Authority in the manner proviaed as follows: If Authority receives a bona fiae offer which it is willing to accept for the purchase of any part or all of the ore or concentrates referred to above from a third party, ready, willing and able to purchase the same, Authority shall immediately give written notice thereof to Salt River Project.The notice shall include the name and address of the offeror, the price offered and all other pertinent terms and conditions of the offer and be accompaniea by a copy of the offer if available.

Such offer must not be tied in with, enhanced, or otherwise encumberea by any trade or transaction that could not be equally fulfilled by Salt River Project.Salt River Project shall then have an optional prior right, for a period of sixty (60)days after receipt of the notice, to

10.8.elect'by written notice duly served to purchase.said ore or concentrates on the same terms and conditions of said offer..If.Salt Fiver'Project exercises.its option to pur-chase, the sale shall be consummated in accordance with said terms and conditions.

If Salt River Project shal'1 not exercise its option, then Authority may accept said offer in accordance with said terms and conditions after the expiration of the sixty,(60) day period.Authority agrees to use its best efforts to issue, at public or private sale,.its revenue bonds or notes or any combination thereof, in an aggregate principal amount at least sufficient to make avail-able to it on or before the Closing Date the amount of the payment to be made on the Closing Date pur-suant to Section 7.3 hereof and to use.its best efforts to take, in each case on a timely basis, all steps necessary to the accomplishment of such financing.

ll ACCESS TO INFORMATION:

11.1.Salt River Project has provided to Authority copies of the ANPP;Participation.Agreement.and the PVUV Agreement.

On and after the effective date of this Assignment Agreement, Salt River Project will pro-vide to Authority and Agent, and their representa-tives and consultants, access at all reasonable times requested by Authority or Agent to (i)each of the other Project, Agreements in the possession of Salt River Project, (ii)all written information in the possession of Salt River Project relating to licensing, engineering, acquisition, construction, operation or maintenance of the Palo Verde Nuclear Generating Station and (iii)all other Project Agreements and information of the character described in (i)or (ii)not in the possession of Salt River Project but in the possession of the Project Manager to which Salt River Project has a right to access under the Participation Agreement, the PVUV Agreement or any other Project Agreement or arrangement.

Salt River Project will provide to Authority and Agent, and their representatives and consultants, the opportunity, at all reasonable times requested by Authority or Agent, to discuss with representatives of Salt River Project familiar

'

11.2.with, and to.make extracts and duplicates of, any of the foregoing Agreements and information.

Authority agrees to treat the Agreements and infor-mation provided pursuant to Section 11.1 hereof as proprietary and not disclose such Agreements and information without, the prior consent of Salt River Project, except (i)as required by law or (ii)in the reasonable judgment of Authority as is neces-sary or advisable in connection with the issuance of Authority's securities.

In either-such case Authority shall notify Salt River Project in advance of any such disclosure.

12 CONDITIONS PRECEDENT TO SALT RIVER PROJECT OBLIGATION.

HEREUNDER:

The obligation of Salt River Project under this Assignment Agreement, to make the transfers and assignments on the Closing Date, as contemplated by Section 6 hereof, is subject to the fulfil'lment, prior to or on the Closing Date, of each of the conditions that: (i)Authority's representations and warranties contained in this Assignment Agreement shall be deemed to have been made again, at and as of the time of the Closing Date and shall then be true i.n all material respects;(ii)Authority shall have performed and complied with all agreements, covenants and conditions required by'his As'signment Agreement to be performed or complied with by xt prior to or concurrent with the Closing.Date;(iii).Salt River Project shall have been furnished with a certificate of the President of Authority, dated the Closing Date, certifying in such detail as Salt River Project may reasonably request to the fulfillment of the foregoing conditions and to the further effect that (a)there are no actions, suits or proceedings pending or, to such officer's knowledge, threat-ened against or affecting Authority before any court or administra-tive body or agency which could, if adversely determined, materially adversely affect the transfers and assignments contemplated by this Assignment Agreement, (b)the performance of this Assignment Agreement and the Transmission Agreement by Authority have been duly and effectively authorized by all requisite action of the Board of Directors of Authority and (c)Authority has legal power and author-ity to perform its obligations under the Project Agreements;(iv)Salt River Project shall have been furnished with an opinion of coun-sel to Authority substantially in the form of Exhibit 3 hereto, dated the Closing Date;(v)Authority shall execute and deliver to Salt River Project the instruments contemplated by Section 15.5 of the ANPP Participation Agreement and by Section ll;4 of the PVUV Agreement; and (vi)all regulatory approvals contemplated by Section S.l(i)hereof shall have been received and shall have become final and non-appealable.

13 CONDITIONS PRECEDENT TO AUTHORITY, OBLIGATION HEREUNDER:

The obligation of Authority under this.Assignment Agreement to pay the purchase price on the Closing Date, as contemplated by Section 7.1 hereof, is subject to the fulfillment, prior to or on the Closing Date, of each of the following conditions:

13.1.Salt River Project's representations and warranties contained in this Assignment Agreement shall be deemed to have, been made again at, and as of the time of the Closing Date and shal'1 then'be true in all material respects;Salt River Project shall have performed and complied with all,agreements., covenants and conditions required by this'Assignment Agreement to be performed or complied with by it prior to or concurrent, with the Closing Date;and Authority shall have been furnished.with a certificate of the President of Salt River Project, dated the Closing Date, certifying.in such detail as Authority may reasonably request to the fulfillment of the foregoing conditions

-.and to the further effect that (i)since.the effective date of this Assignment Agreement there has been no adverse change in the condition or status of the Palo Verde Nuclear Generating Station (or if there shall have been such a change such certificate.shall describe such change in detail satisfactory to Authority) end (ii)there are no actions, suits or.proceedings pending or, to such officer's knowledge, threatened against or affecting'Salt River.Project.before any court or administrative body or agency which could, if adversely determined, materially adversely affect the transfers and assignments contemplated by this Assignment Agreement.

13.2.Authority shall have been furnished with an opinion of counsel to-Salt River Project substantially in the form of Exhibit 4 hereto, dated the Closing Date.13.3.All regulatory and other approvals contemplated by Section 8.1 hereof shall have been received and shall have become final and non-appealable.

13.4.Authority shall have issued and sold its revenue bonds or its notes, or any combination thereof, in an aggregate principal amount at least sufficient to make, available to it the amount of the payment to be made on the Closing Date pursuant to Section 7.3 hereof.

14 BINDING OBLIGATION:

This Assignment Agreement and the terms and conditions con-tained herein shall bind and inure to the benefit of the respective successors, assigns, trustees and/or representatives of the Parties hereto.15~WAIVERS: Any waiver by a Party of'its rights with respect'to a default under this Assignment Agreement or with.respect to any other matter arising in connection with this Assignment Agreement-shall not be deemed a waiver with respect to any subsequent default or matter.No delay, short of the.statutory period of.limitations, in asserting or enforcing any right hereunder, shall be deemed a waiver of, such right..16 SURVIVAL: The representations and warranties of the Parties contained herein shall survive the consummation of the assignment,and transfer contemplated hereby..17'OTICE: Any notice, demand or request provided for in this Assignment Agreement shall be in writing and.shall be deemed properly served,,given or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below: ll I Salt River Project Agricultural Improvement and Power District c/o Secretary P.O.Box 1980=Phoenix, Arizona 85001 Southern California Public Power Authority c/o Executive Director Room 1149 Los Angeles Department of Water and Power ill North Hope Street Los Angeles, California 90012 Los Angeles Department of Water and Power, as Agent P.O.Box 111 Los Angeles, California 90051 Attn: Chief Electrical Engineer and Assistant hanager

~0 Either Party or the Agent may, at any time, by written notice to the other Party and/or the Agent, as the case may be, des-ignate different or additional persons or different addresses for, giving of notices hereunder.

1 8 JOINT PLANNI?G: The Parties agree to engage, Crom time to time, in joint planning and study projects w'ith a view toward the evaluation of and.f uture construction of jointly owned transmission or generation facilities.

19~GOVERNING LAÃ:/This Assignment Agreement shall be governed and construed and enforceable in accordance with the laws of the State of Arizona.;20 EXECUTION:

IN WITNESS WHEREOF, Salt River Project and Authority have cuted.and delivered this Assignment Agreement as of I c 1981~Q'ALT REER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT By Its President ATTEST C NT RS N: AP'"-:t'!:=D AS TO FORM Salt River Protect aw De artrnent Secre'tap Date JJ f (l8

~~~~~C SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY By Zts: P.~S'/~rf/ATTEST Its Secretar

~~STATE OF CALIFORNIA

)County of Riverside)On this 21st day of>ui 1981, before me, the undersigned Notary Public, personally appeared Everett C.Ross 45N who acknowledged, himself.,=

to be the President Egg of SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, a legal entity formed under the laws of California, and that they as such officers, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY by.himself...-,-.

as:such Pxesident seal.IN WITNESS WHEREOF, I hereunto set my hand and official My Commission Expires: STATE OF ARIZONA)eSS OFFICIAL SEAL MARGARET I.ALLEN NOTARY PUBLIC RIVERSIDE CO., CALIF.My commission expires 4-29 83 County of undersign , IN WITNESS WHEREOF, I hereunto set my hand and official seal.)On this~++day of'~>-, 1981, before me, the ed Notary Public, persona@yap'peared Raan P ASE" and P~UL D.RICE.who acknowledged themselves to,be the H'Ei>><>>and of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement

.-district organized under the laws of Arizona, and that they as such officers, being authorized so to do, executed the foregoing instrument for the pur-poses therein contained by signing the name of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT ANp POWER DISTRICT by themselves as such P:esidsnt.and beCI'eLaty My Commission Expires My Commission Expires Viar.15, 1983 Notary Public

STATE OF CALIFORNIA

)W County of Los Qg~eleg)On this 43 day of r 1981 r bef ore me, the undersigned Notary Public, perso all appeared Daniel W.Waters, Jr., who acknowledged hi~self to be'the Secretar of SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, a legal entity formed under the laws of California, and that he as such officer being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY by.himself, as such Executive Diiector..

IN WITNESS WHEREOF, I hereunto set my hand and official seal.Ny Commission Expires: Notar Public County of STATE OF ARI20NA)ss,)OFcICIAL SEAL LINDA L.NEIVMAN NOTARY PUSLIC CALIFORNIA PRINCIPAl OFFICE IN"LOS AN'-ELES COONTY My Commission Expires May 27, 1985 On this day of 1981, before me, the undersigned Notary Public, personally appeared and who acknowledged themselves to be the and of SALT RIVER PROJECT AGRICULTURAL IHPROVEijENT AND POWER DI STRI CT r an a gr i cu 1 tu r a 1 impr ovement district organized under the laws of Arizona, and that they as such officers, being authorized so to do, executed the foregoing instrument for the pur-poses therein contained by signing the naine of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT by themselves as such and seal.IN WITNESS WHEREOF, I hereunto set my hano and of f icial lly'Commission Expires Notary Public

EXHIBIT 1 TO ASSIGNMENT AGREEMENT ESTIMATED COST AT CLOSING DATE OF INTERESTS TO BE ASSIGNED AND TRANSFERRED (ESTIMATED AS ZF CTOSING DATE WILL OCCUR ON MAY 31, 1981)Salt River Project's Estimated Sunk Cost plus AFUDC from Project Inception through 5/31/81.......................,..

$162,893,778 Administrative Charge{Actual)...-......

8,367,539 Carrying Cost.......................... Estimated Total Cost...................

$171,261,317 ESTIMATED COST AT CLOSING.DATE OF INTERESTS'TO BE ASSIGNED AND TRANSFERRED

{ESTIMATED AS IF CLOSING DATE WILL OCCUR ON VARIOUS DATES AFTER MAY 3lg 1981)Closin Date 5/31/81 6/3 0/81 7/31/81 8/31/81 9/30/81 1 0/31/81 11/30/81 12/31/81 1/31/82 2/2 8/82 3/31/81 4/3 0/82 Estimated Additional Sunk Cost (including AFUDC)for Month not applicable 4,430~000 4,643i0004I159~000 4i420i000 4 i 297 F000 4i270,000 8 i174,000 6g463 F000 5r103 F000 5,484,000 4,403,000.Estimated Carrying Cost for Month(a)not applicable 42,085 44il08 39,511 41,990 40,821 40,565 77,653 61,399 48,478 52,098 41,829 Estimated Total Cost$171 i 261,317 175g733,402 180,420,510 184~619g021 189,081,011 193 i 418 i 832 197,729,397 205,981,050 212,505,449

,217 i 656,927 223,193,025 227 i 637 i 854 (a)Assumes a Bank of America National Trust and Savings Association announced Prime Tnterest Rate of 19$per annum.

EXHIBIT 2 TO ASSIGNMENT AGREEMENT N EME This Transmission Agreement is agreed upon as a part of the Salt River Project-Authority Palo Verde Nuclear Generating Station Assignment Agreement (" Assignment Agreement")between SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT (".Salt River Project")and SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (" Authority"), hereinafter referred to collectively as"Parties"-and individually as"Party." 1.PURPOSE: The purpose of this Transmission Agreement is to pro-vide the terms and conditions whereby Salt, River Project shall pro-vide transmission service for Authority's ANPP Generation Entitlement Share.2~~RECITALS: 2.1.Pursuant to Section 9 of the Assignment Agreement, Salt River Project will provide transmission ser-vice to Agent on behalf of Authority, in order that Authority'may take delivery of its ANPP Generation

&Entitlement Share assigned and transferred to Authority pursuant to the Assignment Agreement.

2-1

2.2.The Authority, Salt River'Project and Western Area Power Administration are now engaged in discussing principles for a direct-current, transmission line between the Phoenix area.and:Mead Substation near'Boulder City, Nevada.This proposed.facility is not required for transmission of the.Authority's ANPP Generation Entitlement Share and is subject to studies of its environmental impact and economic feasibility.

The transmission line would allow the proposed participants to operate their electric systems more efficiently and would allow the Authority to transmit its.ANPP Entitlement over.the new facility.It is.in the interest of Salt River Project and the Authority..that such facility, be constructed and the Authority has indicated that-,it is the Authority's present intention to use its 2.3.best efforts to participate in the proposed head-Phoenix transmission line, or some equivalent alternative transmission facility.Under the Agency Agreement, Authority has autho-rized Agent to,administer, on behalf of Authority, certain activities under this Transmission Agreement.

Pursuant to the Agency Agreement, Agent will perform certain services for Authority under this Transmission Agreement, including receipt of the power and energy delivered by Salt River 2-2 I~

Project at the points of delivery specified herein, receipt of all bills rendered by Salt River'Project pursuant hereto, processing and transmitting of such bills to Authority for payment,.and otherwise coordinating with.Salt River Project in performance of this Transmission Agreement..

3.AGREEMENT:

Zn consideration of the premises and the mutual cove-nants contained herein, the Parties agree as follows: 4~EFFECTIVE DATE AND'TERMINATION OF OBLIGATION:

4.1.4.2.Upon execution by the Parties hereto, this Transmission Agreement shall become effective as of the Closing Date.The obligation of Salt River Project to make avail-able Authority's ANPP Generation Entitlement Share to Agent, pursuant to the terms and conditions of this Transmission Agreement, shall continue throughout Phase One and Phase Two.'Phase One shall begin on the Date of Firm Operation of the first generating unit of the Palo Verde Nuclear Gener'ating Station and shall terminate (i)on the in-service date of either the Mead-Phoenix Transmission Line or participation in other 2-3

\~appropriate transmission facilities obtained by Authority and available to.replace in full the transmission service provided for in-this Transmission Agreement (other.than transmission service to be provided on the ANPP Transmission System), (ii)upon the expiration of one year after date of written notice of termination by Authority to Salt River Project, or (iii)upon termination of 4.3.the ANPP Participation Agreement, whichever occurs first.Phase Two shall begin upon termination of Phase One and shall terminate (i)on the expiration of one year after date of written notice of termination by Authority to Salt River Project, or (ii)upon ter-mination of the ANPP Participation Agreement, whichever occurs first.5.DEFINITIONS:

5.1.The following terms used herein shall have the meanings given thereto in the ANPP Participation l Agr cement: ANPP, ANPP High Voltage Switchyard, Date of.Firm Operation, Generation Entitlement Share, Palo Verde Nuclear Generating Station, Operat'ing Work, Participant (s), Net Energy Generation and Star't-Up Period.

l J 5~2.5~3.5.4.Agent means Los Angeles as agent for Authority pursuant, to the Palo Verde Nuclear Generating Station Agency Agreement, (" Agency Agreement'")

between Los Angeles and Authority.

ANPP Participation Agreement means the Arizona Nuclear Power Project Participation Agreement, dated August 23, 1973, as heretofore amended by Amendments Nos.1 through 5 and as hereafter amended from time to time.ANPP Transmission System means the transmission system installed for the transfer of ANPP Generation Entitlement Shares, consisting of: Palo Verde-Westwing 500 kV Transmission Line, Palo Verde-Kyrene 500 kV.Transmission Line, Palo Verde-East 500 kV Transmission Line, Westwing 500 kV Switchyard as expanded, East 500 kV Switchyard as 5.5.5.6.constructed or expanded, the Kyrene 230 kV Switchyard as expanded and the Kyrene 500/230 kV Switchyard.

Closing Date means the date as determined in accor-dance with the provisions of the Assignment Agreement.

Eldorado System means the transmission system con-sistinging of the Nohave-Eldorado 500 kV Transmission Line, two (2)Eldorado-head 220 kV Transmission Lines and the Eldorado 500 kV Substation.

2-5

5.7.Mead-Phoenix Transmission Line means a high voltage transmission line currently under, study to be con-5.8.structed from the Mead,230 kV.Switchyard.to a.ter-mination point in the"Phoenix'area with an antici-pated in-service date of 1987.Palo Verde-East 500 kV Transmission.Line means a.500 kV transmission line currently under study by certain of the ANPP Participants, to be constructed from the ANPP High Voltage Switchyard to a termina-tion point (referred to herein as, the East 500 kV 5.9.Switchyard or East Switchyard) east of the ANPP High Voltage Switchyard.

Phase One means that period as described in Section 4.2 hereof and during which Salt River Project is to provide to Authority transmission services pursuant to Section 6 hereof.5 10.Phase Two means that period as described in Section 4.3 hereof and during which Salt Rive Project is to provide to Authority transmission services pursuant to Section 7 hereof,.5.11.Point(s)of Interconnection means mutually agreed upon point(s)of interconnection between the elec-trical transmission systems of the Salt River Project and either the Authority or the Agent which ar e ei ther physical inter connections or interconnections which exist, or will exist, by 2-6

virtue of agreement between the Parties.and third parties.6 PHASE ONE TRANSMISSION 2QQQLNGEMENTS:

F 6.1.Throughout Phase One the transmission arrangements 6.2.provided for in this Section 6 shall be.in effect.Salt River Project shall receive a portion of the power and energy associated with Authority'.s 5.91%Generation Entitlement Share, assigned and trans-ferred under the Assignment Agreement, at the 500 kV bus of the ANPP,.High Voltage Switchyard and shall make an equivalent amount of power and.energy available to Agent at the 500 kV bus of the Navajo Switchyard.

6.3.Salt River Project, in addition to the provisions of Section 6.2 hereof, shall receive a separate and additional portion of the power and energy associ-ated with the Authority's 5.91%Generation Entitlement Share, assigned and transferred under the Assignment Agreement, at the 500 kV bus of the ANPP High Voltage Switchyard and shall make an equivalent amount of power and energy available to Agent at the 500 kV bus of the Mohave Generating Station.2-7

6.4.6.5.The sum of the portions of power and energy referred to in Sections 6.2 and 6,.3 hereof shall.in.no case exceed the total power and energy associ-ated with Authority's 5.91%Generation

'Entitlement Share.Salt River Project shall.schedule, the portion of the power and energy described i.n Section 6.3 hereof, for delivery to Agent on behalf of Authority at the 500 kV bus of the Eldorado Substation or the 230 kV bus of the Mead P Substation.

Energy associated with transmission 6.6.6.7.losses shall be returned by the Agent.and shall be scheduled to Salt River Project at mutually agree-able times.The amount of such losses shall be deemed to be three.tenths percent (0.3%).The portion of power and energy to be wheeled over the Eldorado System pursuant to this Transmission Agreement shall in no case exceed the amounts of power and energy available from time to time to Salt River Project at the 500 kV bus of the Mohave Generating Station.Subject to Section 6.11 hereof and the transmission service available to Salt River Project pursuant to Section 6.12 hereof, the portion of Authority's 5.91%Generation Ent'lement Share delivered to the navajo Switchyard p'us the portion of such 2-8

Generation Entitlement Share delivered to the Eldorado Substation plus the portion-of such Generation Entitlement Share delivered to the Mead Substation shall be equal to the total power and energy associated with Authority's 5.91%Generation Entitlement Share.6.8.Authority shall cause the Agent to accept delivery of power and energy associated with Authority's 5.91%Generation Entitlement Share at the points of delivery referred to in this Transmission 6.9.Agreement.

As compensation for the right to use, until termi-nation of this Transmission Agreement, the ANPP Transmission System for the delivery by Salt River Project of power and energy associated with Author ity'5.91%Generation Entitlement Share, Authority shall be obligated to pay and Agent shall be obligated to, in accordance with Section 8.3 hereof, cause payments to be made by Authority to Salt River Project.Such payments shall be deter-mined as follows: 6.9.1.On the Closing Date, seven percent (7%)of the total installed actual recorded cost (including AF~JDC)on the accounting records of Salt'River Project as oz the Closing Date of the ANPP Transmiss'on 2-9 a

System and that portion of the ANPP High Voltage Switchyard described in.Section I.2.2 of Appendix.I of t,he ANPP Participation Agreement, plus,a one-time administrative charge-of'$378,533 (it is understood,and agreed that"the.adminis-trative charge is not subject'to review or audit).The basis of calculation of the seven percent (7%)referred to in this Section 6.9.1 is the.same as that ,for the seven percent (7%)referred to in Section 6.9.2 hereof.6.9.2.Monthly Chaxge;-A x (B+g+++E a Where:=0.07, calculated 1 NW-MW on the basis of the ANPP Participants utilizing.

the ANPP Transmission System for the transfer of their ANPP Generation Entitlement Shares B=Actual monthly construction costs (including AFUDC)and/or Capital Improvement costs (including AFUDC)af ter the Closing Date, associated with the development and construction o the 2-10 l

, ANPP Transmission System arid that portion of the ANPP High Voltage Switchyard described in.Section I.2.2 of the ANPP Participation Agreement.

C=Annual.property taxes and insurance<or the ANPP Transmission System and that portion of%he.ANPP.High Voltage Switchyard described in Section,Z 2.2 of.the ANPP Participation Agreement.

D=:Annual expenses associated with Ope.rating Work for the ANPP Transmission.System and Chat~rtion of the ANPP High Voltage Switchyard described in,Section I.2.2 of the ANPP Participation Agreement.

E=A scheduling and dispatching charge of S2,300 which will be applied starting with the month in which.power and energy is first delivered pursuant to this Transmission Agreement.

The amount of such charge may be reviewed at two (2)year intervals and may be revised, if necessary, as determined by Salt River Project.6.10.As compensation for the delivery over the Eldorado System by Salt River Pioject of that portion oz 2-11

power and energy associated with Authority's 5.91%Generation Entitlement Share referenced xn:Section 6.3 hereof,'Authority shall, be obligated to pay and Agent shall be obligated to, in accordance.with ,Section 8.3 hereof, cause monthly, payments to be made by Authority to.Salt River Project.Such pay-ments shall be determined as follows: 6.10.1 Monthly Charge=1/12 x$1,.59/kW-yr.

x A x P Where: A=The maximum hourly.amount of power.and energy associated with Authority',s Generation Entitlement Share wheeled over the Eldorado System.as determined in Section 6.5 hereof (in kilowatts) during the month to which the charge is applicable B=The most recent Handy Whitman Index of Public Utility Construction, Total Transmission Plant Index for the Plateau Region C=The Handy Whitman Index of Public Utility Construction, Total Transmission Plant Index for the 2-12 1

Pleateau Region f or the month of July 1981 6.10.2'In the event the ratio P is determined to be numerically less than one (1.0), then for the ,purpose of Section 6.10,.1 hereof<the ratio ,shall be set equal to one (1.0)..Salt River Project'.s obligation hereunder to deliver or make available to'Agent<he power and energy referred to in Sections 6,.2 and 6.3 hereof shall be firm, except for: 6.11.1.Interruptions or reductions, at the ANPP Transmission System,'ANPP High Voltage.Switchyar d, Eldorado System, Navaj o Generating Station and/or Mohave Generating Station due to uncontrollable ,forces, as defined in Section 10.1 hereof.6.11.2.Temporary interruptions or reductions at the ANPP Transmission System, ANPP High Voltage Switchyard, Eldorado System, Navajo Generating Station and/or Mohave Generating Station which are necessary or desirable in sole judgment of Salt River Project for the purposes of main-tenancee, r epa i r s, r epl ac ements, installations, investigations and 2-13

inspections of equipment and facilities.

6.11.3.Salt River.Project, except, in cases of emergencies, shall give Agent advance noti'ce of temporary interruptions or reductions.

6.12.Except for interrupt'ions or reductions at the ANPP Transmission System and/or High Voltage Switchyard, during occasions of interruptions or reductions as specified in Sections 6.11.1 and 6.11.2 hereof>Salt River Project, upon request of Agent, shall provide back-up service pursuant to which Salt River Project shall receive a portion of the power and energy associated with the Authority's 5.91%Generation Entitlement Share, assigned and.trans-ferred hereunder, up to the transmission quantities determined to, be available by Salt River Project, at the 500 kV bus of the ANPP High Voltage Switchyard and shall make such power and energy available to Agent at the 230 kV bus of the Mead Substation.

Energy associated with transmission losses shall be returned by the Agent and shall be scheduled to Salt River Project at mutually agree-able times.The amount of such losses for energy made available to Authority under the provisions of this Sect'n 6.12 shal'e deemed to be five tenths 2-14

percent{0.5%).for the ANPP Transmission System plus other applicable losses deemed<o be three and eight-tenths percent{3.8%).6.13.Salt River Project shall be the sole judge regard-ing its ability to provide the back-up service.referred to in Section 6.12 hereof without impair-ing reliability of'service or hindering ability to e fulfill its obligations to its firm.customers.

6.14.As compensation to Salt River Project for providing back-up service referred to in Section 6.12 hereof, Authority shall be obligated to pay and Agent shall be obligated to, in accordance with.Section 8.3 hereof, cause payments to be made by Authority to Salt River, Project.Such payments.shall be deter-mined as follows: 6.14.l.Daily Charge=~x 66.46/kW yr-x A.x+.Where: A=The maximum hourly amount of power and.energy associated with Authority's Generation Entitlement Share made available.to Agent at the 230 kU bus of the Mead Substation pursuant to Section 6.12 hereof{in kilowatts) during the day to which the charge is applicable (Q

B=The most recent Handy whitman Index of Public Utility Construction, Total Transmission Plant Index for the Plateau Region C=The Handy Nhi<man Index of Public Utility Construction, Total Transmiss ion Plant Index f or the Plateau Region for the month of July 1981 6.14.2 In the event the ratio+.is determined to be numerically less than (1.0), then for the purpose of Section 6.14.1 hereof<the ratio shall be set equal to one (1.0).6.14e3 If back-up transmission service is provided pursuant to Section 6.12 hereof during any fractional part, of a day, the full daily charge referred to in Section 6.14.1 hereof shall apply.6.15.The losses referred to in this Section 6 shall be reviewed at one (1)year intervals by the Operating Representatives commencing one year after the Date of Firm Operation of the first generating unit of the Palo Verde Nuclear Generating Station and shall be revised, if necessary, as determined by Salt River Project.2-16 1

6.16.'Notwithstanding other provisions of this Transmission Agreement, Salt River Project.shall provide transmission, service, as specified in this Section 6 to make available on a non-firm basis Authority's Generation.Entitlement Share of Net Energy Generation during any.Start-.Up Period.The charges and billings for such transmission service shall be on a basis as applicable pursuant to the terms and conditions contained in Sections 6.9<6.10 and 6.14 and in Section 8 hereof.7~PHASE THO TRANSMISSION 2QGUQiGEMENTS:

7.1.Throughout.Phase Two'the transmission arrangements 7~2.provided for in this Section 7 shall be in effect.4 Salt River Project shall receive the power and energy associated with Authority's 5.91%Generation

'Entitlement Share at the 500 kV bus of the ANPP High Voltage Switchyard and shall transmit said power and energy over the ANPP Transmission System and shall wheel over Salt River.'Project's 230 kV tr ansmiss ion system, if necessary, f or delivery to Agent at Point(s)of Interconnection..Energy asso-ciated with transmission losses shall be returned by the Agent and shall be scheduled to Salt River Project at mutuallv agreeable times.The amount of 2-17

7.3.7.4.such losses shall be determined by Salt.River project.Authority shall cause the Agent.to accept delivery of power and energy.associated with Authority's

~5.91%Generation Entitlement Share at the'Point(s)of Interconnection.

As compensation;for the delivery by Salt River Project of power and energy referred to in Section 7.2 hereof, Authority shall be obligated to pay and Agent shall be obligated to, in accordance with Section 8.3 hereof, cause monthly payments to be made by Authority to Salt River Project.Such payments shall include: 7.4.1.Charges Determined in accordance with Section 6.9.2 hereof, plus 7.4.2.A charge, if applicable, for the 230 kV portion of the Salt River Project system based on Salt River Project's charges for such service being offered or avail-able to other new like customers at that time.7.5.The losses referred to in this Section 7 shall be reviewed at one (1)year intervals by the Operating Representatives commencing one year after the , termination of Phase One and shall be revised, if necessary, as determined by Salt River Project.2-18

~~8.BILLIM'*: 8.1.Except f or the payments to be.made pursuant to Section 6.9 hereof, the first.payment pursuant to Sections 6 or 7 hereof shall be due and payable in r the month following the.month in which power and energy is.f irst delivered pursuant to this Transmission Agreement.

For a fractional part of the month, if any, at the beginning or end of the term of Phase One or Phase'Two hereunder, the 8.2.monthly payment shall be proportionately adjusted.In the event (as permitted, by Section 6.11.1 hereof)Salt River Project does not transmit power and energy, corresponding pro rata.reductions in payments for charges pursuant to Section 6.10 hereof shall be made.8.3.All bills for payments by Authority pursuant to this Transmission"Agreement shall be.submitted to Agent.Bills for payment submitted to Agent pursu-ant to this Transmission Agreement shall be rendered in such detail as may'be reasonably required by Agent on or before the-tenth (10th)day of the month following each billing period.Agent will process each such bill for payment by Authority on a prompt basis.Bills shall be due and payable twenty (20)days'mmediately after the date of mailing of the bill.2-19 r ll 8.4.In the event the Salt River Project shall, become liable for any tax,'ariff, duty, toll, fee, impost, charge or, other exaction or*the amount equivalent thereto and any increase thereof is imposed, levied.or assessed by any governmental authority upon, measured, by,,incident

'to or as.a result of the transaction herein provided for, such amounts shall be submitted to Agent on behalf of 8.5.8.6.Authority for payment pursuant to,Section 8.3 hereof.Bills submitted to Agent and not paid on or before the due date specified.in Section 8.3 hereof.shall bear a charge of one and one-half percent (1.5%)per month, or the maximum legal rate, whichever is less, on the unpaid principal prorated by days until payment is received.Such charge shall also apply to any unpaid bill or portion thereof which is disputed and thereaf ter determined to be proper.In the event any portion of any bill is disputed on behalf of Authority<

the disputed amount shall be paid by Authority under protest when due and.shall be accompanied by a written statement indicating the basis for the protest.If the protested portion of the payment is found to be incorrect, Agent, on benalf of Authority<

shall be re unded 2-20 I

any over-payment plus interest, accrued at one and one-half percent (1.5%)per month<or the maximum legal rate, whichever is less,:prorated by days from date of payment to the date the refund check is mailed.9..OPERATING REPRESENTATIVES:

9.1.9.2.As a means'of establishing operating procedures and of dealing in a prompt and orderly manner with var-ious technical and operating problems which may arise in connection with this Transmission Agreement, Salt River Project and Agent shall des-ignate"Operating Representatives" to act on their behalf with respect.to those matters herein provided.The functions and responsibilities of the Operating Representatives shall be to establish operating procedures and standard practices, consistent with the provisions herein, for the guidance of operat-ing employees of Salt River Project and Agent as to matters which affect operations of Salt River Project and Agent pursuant to this Transmission 9.3.Agreement.

The Operating Representatives shall have the authority t'o develop a mutually agreeo upon 2-21

compo'site rate for the billing of all charges under this Transmission Agreement.,Such composite rate shall be for convenience in billing and shall be based on the charges defined herein and shall not be intended to increase or decrease charges other-wise due hereunder.

9.4.Except as specifically provided herein,<he Operating, Representatives shall have no authority l..to modify=any of the provisions of this Transmission Agreement.

10~UNCONTROLLABLE FORCES: 10.1.No Party shall be considered to be in default in the performance of any of its obligations under this Transmission Agreement (other than obligations of the Parties to make payment of costs and expenses)if failure of performance shall be due to an uncontrollable force.The term"uncontrollable force" shall mean any cause beyond the control of the Party affected, including.but not limited to, failure of or threat of failure of facilities, flood, earthquake, tornado, volcanic eruption, storm, f ir e, lightning, epidemic, war, riot, civil disturbance or disobedience, strike, labor dispute, labor or material shortage, sabotage, restraint by 2-22

court order or public authority and action or nonaction by or failure to obtain authorizations or approvals from any governmental agency or authori-ty, which by exercise of due diligence and foresight such Party could not reasonably.have been expected to avoid, and which by exercise of due diligence it has.been unable to overcome.Nothing contained herein shall be construed so as to I require a Party to settle any strike or labor dis-pute in which it may be involved.Any Party~rendered unabl'e, to fulfill any obligation under this Transmission Agreement by, reason of an uncon-trollable force shall give prompt notice of such fact to the other Party and.shall exercise due dil-igence to remove such inability with.all reasonable dispatch.10.2.For the purposes of this Section 10, the term Party shall include the Agent acting in its capacity as such.ll LIABILITY'OVEHMT NOT TO EXECOTE: 11.1.Except for any judgment debt for damage resulting from Willful Action and.except to the extent any judgment debt is collectible from valid insurance of the other Party, each Party hereby extends to 2-23

the other Party, and'their respective directors, officers, agents and employees its covenant not:to execute on any judgment obtained against the other Party for direct,.indirect.or consequentia'1.loss, damage, cost, charge or expense, whether or not resulting from the negligence of either'Party,its directors, officers, agents, employees or any other person or entity whose-negligence would be imputed to such Party, arising from.physical damage to its property resulting from performance or nonperform-ance of the obligations of another Party under this Transmission Agreement.

11.2.In the event any insurer providing insurance to a Party refuses to pay any judgment obtained.by a Party, or any of its directors, officers or employ-ees, on account of liability referred to in Section 11.1 hereof, the Party or any of its direc-tors<officers or employees against whom the judg-ment is obtained shall execute, at the request of the Party obtaining the judgment and in considera-tion of the covenant given in Section 11.1 hereof, such documents as may be necessary to effect an, assignment of its or their contractual rights against the nonpaying insurer.11.3.Each Party shall be responsible for any direct<indirect or consequential damage, loss, claim, 2-24 l I i cost, charge, or expense that is not covered by any insurance and results from its own Willful Action as defined in Section 11.,7.2 hereof and shall indemnify and hold harmless the other Party, their directors or members of its governing body, offi-cers and employees,'from any such damage<loss, claim, cost, charge or expense.Except as provided in Section 11..3 hereof, no Party shall be obligated to discharge any.liability to any other Party in excess of$500,000 per occur-rence for any uninsured, indirect or consequential damage, loss, claim, cost, charge or expense resulting from Willful Action.Each Party releases each other Party, Ms directors and other..governing body., officers, and employees from any such liabil-ity in excess of S500,000 per occurrence.

Except for liability resulting from Willful Action, any Party whose electric customer shall make a claim or bring an action against it or the other Party for any death, injury, loss or damage arising out of or in connection with the delivery of, interruptions to or curtailment of electric service to such customer shall indemnify and hold harmless such other Party, its directors, officers, agents and employees, from and against any liability for such death, injury, loss or damage.2-25 l'

11.6.The provisions of this Transmission Agreement shall not be construed so as to relieve any insurer of its obligation to pay any insurance proceeds, in accordance with the terms and conditions of valid and collectible insurance policies of either 11.7.Party.The term"Willful Action" as used in this Transmission Agreement is defined as follows: 11.7.1,.Action taken or not taken by a Party at the direction of,its directors, off i-cers, agents or employees having manage-ment or administrative responsibility affecting.its performance under this Transmission Agreement, which action is knowingly or intentionally taken or not taken with conscious indifference to the injurious consequences thereof, or with intent that injury or damage would result or would probably result therefrom.

Willful Action does not include any act or failure-to act which is merely involuntary, accidental or negligent.

11.7.2.Action taken or not taken by'Party at the direction of its directors, officers, agents or emoloyees having U 2-26 0

management or administrative responsibility affecting its per f ormance under<his Transmission Agreement, which action has been determined by arbitra-,tion.award, or final judgment.or judicial decree to be a material default under this Transmission Agreement.and which occurs or continues beyond the time specified in such arbitration award or judgment or judicial decree for curing such default, or,.if no<ime to cure is specified therein, occurs or continues thereafter beyond a reasonable time to cure such default.11.7.3.Action taken or not taken by a Party at the direction of its directors, offi-cers, agents, or employees having man-/agement or administrative responsibility affecting its performance under this Transmission Agreement, which action is knowingly or intentionally taken or not taken with the knowledge that such action taken or not taken is a material def ault under this Transmission Agreement.

2-27

11.7.4.The phrase"employees having management or administrative, r esponsibility",as used in this Section 11..7 means employ-ees of a Party who are responsible for one or more of the-executive functions 11.8.of planning, organizing, coordinating, directing, controlling and supervising such Party's performance under this Transmission Agreement.

For the purposes of this Section.11, the term Party shall include the Agent acting in.its capacity as such.12." SIGNIPICMT CHMGE IN CIRCUMSTMCES:

If at any time a Party believes that, due to any significant change in circumstances, com-pliance with this Transmission Agreement by such Party would produce a gross inequity resulting in financial hardship of extraordinary magnitude, such Party may by written notice call on the other Party to review and discuss the effects of such change of circumstances.

Within 30 days of such notice the Parties shall meet to consider how to deal with such inequity or hardship in a manner which is equitable to both Parties in view of all changes and.surrounding circumstances, and shall attempt to eliminate promptly any such inequity or hardship through good faith negotiations.

If the-Parties agree on a method to eliminate such inequity or hardship then this Transmission Agreement 2-28 shall be amended, as appropriate.

In the event the Parties are unable to agree on such method, this Transmission.Agreement shall 1 remain in full force and effect pursuant,to its"terms.13.ASSIGNMENT OF AGREEMENT:

Nei ther Par ty.shall voluntarily assign this Transmission.Agreement or any'part thereof without the prior written consent of the other Party, which consent will not,be unreasonably withheld, except that this Transmission Agreement may.be assigned without such prior written consent.by either Party in con-nection with the sale or merger of all or substantially all of such Party's properties.

4 ll 14." OTHER AGREEMENTS:

Notwithstanding the provisions of Section 13 hereof, the Authority may use and employ all or any portion of its rights to transmission service hereunder to deliver capacity and energy of its ANPP Generation Entitlement Share to members of Authority contracting with Authority, and to other entities contract-ing with Authority pursuant to Section 14.2 of the Power Sales II Contracts entered into by Authority as of July 1<1981I to purchase an entitlement to capacity and energy of Authority's ANPP Generation Entitlement Share.I 2-29 l

15.NONDEDICATION OF FACILITIES:

No undertaking by one Party to another under any provision of this Transmission Agreement shall con-stitute the dedication of the system or any portion thereof of either Party to the public or to the other Party, and it is understood and agreed that any such undertaking by either Party shall cease upon the termination by such Party of its obligations hereunder.

16 NOTICE: 16.1.All notices, demands or requests required or autho-rized by this Transmission Agreement shall be in writing and made or sent by either Party to the other.Such notices shall be deemed to have been fully given, made or sent when made and deposited in the United States mail, by register'ed or certi-fied mail', postage prepaid, and addressed as follows: Southern California Public Power Authority c/o Executive Director Room 1149 Department of Water and Power ill N.Hope Street Los Angeles, CA 90012 To SALT RIVER PROJECT: S a 1 t R i v e r P r o j e c t Ag r i c ul tur al Impr o vement and Power District c/o The Secretary P.O.Box 13180 Phoenix, Arizona 85001 To AGENT: Department of Water and Power of the City of Los Ange'es 2-30 l

I c/o Chief Electrical Engineer and Assistant General Manager P.O.Box ill Los,Angeles, CA 90051~~16.1.1.The designation of any person specified in Section 16.1 hereof or<he address of any such person may be changed at any time by ten (10)days'otice given in the same manner as provided, in Section 16.1 hereof for other notices.17.WAIVER: The waiver by either Party of any breach of any term<covenant or condition herein contained shall not be deemed a waiver of any other term, covenant or condition, or any subsequent breach of the same or any other term, covenant or condition herein contained.

18.GOVERNIHG LAN: This Transmission Agreement shall be governed by and construed and enforceable in accordance with the laws of the State of Arizona.2-31 I I 0 19.REGULATORY AUTHORITY:

This Transmission Agreement shall be subject to filing with, and to changes or modifications as may from time to time be directed by competent regulatory authority in the exercise of its jurisdiction.

IN WITNESS WHEREOF<the Parties hereto have caused this I Transmission Agreement to be executed as of the day u 1981.SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND, POWER DISTRICT ATTEST A COU RS I Secretary SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ATTEST: By 2-32

EXHIBIT 3 TO ASSIGNfIENT AGREEMENT Salt River Project Agricultural Improvement and Power District (Address]

Dear'Sirs:

We have acted as counsel for Southern Cal'ifornia

'Public Power Authority (" Authority")in connection.with the execution and delivery by Authority of the Salt River Project-Authority Palo Verde.Nuclear Generating Station Assignment Agreement (the"Assignment Agreement")between Authority and Salt River, Project Agricultural Improvement and Power District (".Salt River Project"), and the related Tran'smission Agreement (the"Transmission Agreement")between Salt River Project and Authority.

Except as otherwise defined herein, the terms used herein shall have-the meanings set forth in the Assignment Agreement.

In this connection, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such docu-ments, records and other instruments, and have.made such examination of law, as we have deemed necessary or advisable for the'urposes of rendering this opinion.Based on the foregoing, we are of the opinion that: 1.Authority is a legal entity duly organized and validly existing under the laws of the State of California, and has the power and authority to (i)own the-por-tions of Salt River Project's ANPP Interest, Salt River Project's Switchyard Interest, and Salt River Project'PVUV Interest, respectively, contemplated to be transferred and assigned pursuant to the Assignment Agreement and to perform its obligations under the ANPP Participation Agreement, the Project Agreements, the PVUV Agreement and the Transmission Agreement and (ii)sell the output of the Palo Verde Nuclear.Generating Station so acquired to members of Authority.

2.The execution, delivery and performance of the Assignment Agreement and the Transmission Agreement by Authority have been duly and effectively authorized by all requisite official action of Authority and each such Agreement is a legal, valid and binding agreement of, and (except as the provisions of the Assignment 3-1 I

Agreement and the Transmission Agreement may be limited by usury>bankruptcy, insolvency, reorganiza-tion or other laws relating.to or affecting the enforcement of creditors'ights and,other laws of general application affecting the rights and other remedies of creditors, and except that'the availabil-ity of the remedy of specific enforcement or of injunctive relief is subject to the discretion of the court before which any.proceeding therefor may be brought)enforceable in accordance with its-terms against<Authority.

Very truly yours,.Rourke&Noodruff By 3-2 l

EXHIBIT 4 TO ASSIGNMENT AGREEMENT Southern California Public Power Authority[Address]

Dear Sirs:

I am Director, Law and Land, and the Chief Legal Executive of Salt River Project Agricultural Improvement and Power District (" Salt River Project")in connection with the execution and delivery by Salt River Project of the Salt River Project-Authority Palo Verde Nuclear Generating Station Assignment Agreement, (the"Assignment Agreement.")

between Salt River Project and Southern California Public Power Authority (" Authority"), and the related Transmission Agreement{the"Transmission Agreement")between Salt River Project and Authority.

I have examined originals or copies, certified or otherwise identified to my satisfaction, of such docu-ments, records and other instruments; certificates of certain offi-cers and management of Salt River Project as to certain factual mat-ters pertaining to indentures, agreements, resolutions or instruments under which Salt River Project is a party or is obligated; the legal opinions of Messrs.Mudge Rose Guthrie&Alexander pertaining to con-formity of the Assignment Agreement with certain resolutions of the Board of Directors of Salt River Project;and have made such examina-tion of laws of the State of Arizona as I have deemed necessary or advisable for the purposes of rendering this opinion.Except as oth-erwise defined herein, the terms used herein shall have the meanings set forth in the Assignment Agreement.

Based on the foregoing, I am of the opinion that: 1.Salt River Project is an agricultural improvement dis-trict duly organized and validly existing under the laws of the State of Arizona, and has the power and authority to own Salt River Project's ANPP Interest, Salt River Project's Switchyard Interest and Salt River Project's PVUV Interest and to perform its obli-gations under the ANPP Participation Agreement, the Project Agreements and the PVUV Agreement.

2.The ANPP Participation Agreement, the Project Agreements and the PVUV Agreement have been duly authorized, executed and delivered by Salt River Project and, assuming due authorization, execution and delivery by the other parties thereto, are legal, valid and binding agreements of, and enforceable

'n 4-1

\I 3~4~accordance with their terms against, Salt.River Project.The execution and delivery of the Assignment Agreement and the Transmission Agreement and compliance.with the provisions thereof by Salt River Project will not con-stitute a material breach of or material default under any indenture, agreement, resolution, or other instru-ment to which Salt River Project is a party or by which Salt River, Project is bound<nor will.such exe-cution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of:any nature whatsoever upon any of the property or interests assigned or trans-ferred to Authority under the Assignment Agreement.

The execution, delivery and performance of the Assignment Agreement and the Transmission Agreement by Salt River Project have'een duly and effectively authorized by all requisite official action of Salt River Project, each such.Agreement.is a legal, valid and binding agreement of, and (except as-the provi-sions of the Assignment Agreement and the Transmission.

Agreement may be limited by usury, bankruptcy,.insol-vency, reorganization or other laws relating to or affecting the enforcement of creditors'ights and others laws of general application affecting the rights and remedies of creditors, and except Mat the availability of the remedy of specific.enforcement or of injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought)enforceable in accordance with its terms against, Salt River Project.5.With regard to the[Section 6.1.1.instrument], (i)Salt River Project has taken the actions required of it, subject to actions required of Authority, to place said instrument in a form recordable under Arizona law, (ii)Salt River Project has taken the actions required of it, subject to actions required of Authority pursuant to the provisions of Section 15.5 of the ANPP Participation Agreement, to make Authority a Participant and (iii)Salt River Project conveys, assigns and transfers to Authority as a tenant in common all of Salt River Project's right, title and interest ih (a)a 5.91%Generation Entitlement Share and undivided ownership interest in Palo Verde Nuclear Generating Station, the Project Agreements and the other property and rights provided for, contemplated by or resulting from the Project Agreements, and (b)a 5.91$undivided ownership interest in that portion of 4-2

'l the ANPP High Voltage Switchyard described in Section I.2.1 of the Appendix I of the ANPP Participation Agreement.

6.With regard to the (Section 6,.1.2.instrument](i)Salt River Project has taken the actions;required of it<subject to actions required of Authority pursuant to the provisions of Section 11.4 of the PVUV Agreement<

to make Authority a Nember and (ii)Salt River Project conveys, assigns and transfers to Authority all of Salt River Project's right<title and interest in.a 5.91%interest in PVUV.The opinions herein expressed are limited in all respects to the laws of the State of Arizona as in effect as of the date hereof, and the undersigned undertakes no responsiblity to advise you of any change in such laws occurring after the date hereof.Very truly'yours, 4-3 l.I A<<END<<NT NO 6 TO"TK ARXZQNA NUCLEAR POLER PROJ CT 10 MTXCX'?ATXON AGR:-"<<K NT DAT D 17 13 APS Con race, No: 4172-419.00 15 16 17 70 22 23 24 1st Drat" P~y 13, 1961 26 L I A."END?~%i

'NO.6 TO'ir'" ARIZONA NUCLEAR'il:-R PROJECT PARTICIPATION AGREE?ZK'T 1~PARIES: The Part'es to this Amendment No.6,are: ARIZONA'PUBLIC SERVICE CO?PALY, a corporation organized.and existing under and b>virtue 10 12 13 14 of the, laws of the State or" Arizona, hereinafter referred to.as"Arizona", SALT RIVER.PROJECT AGRI CLLTURAL IMPROVc..Z'..

A?2)POtvr R DIST~Ži, an agr'cultural iaproveaent district organ'zed and existing under and by virtue of the laws of the State o Arizona, hereinafter refe.red to as"Salt'River Project", SOUTH:-R?l CALIFOR'i~A,ED SON CO!O'ANY, a corporation organized and existing under and by virtue of the laws of the State of California, here-inafter referred to as"Edison", PUSLIC SERVICE COMPANY OF NEU 15 MEXICO, a corporation organized and existing under and bv virtue of the'aws of the State of New Mexico, hereinafter referred to as"PN'.f" and EL PASO ELECTRIC COMPA?K, a corporation o"ganized 18 19 20 and existing under and by virtue of the laws of the State of Texas, hereinafter referred to as"El Paso." 2.EFFECTIVE DATE: July 1, 1981 3.RECITALS: 22~r3 3.1 Arizona, Salt River Project, Edison, PN?1, and'El Paso are parties to a certain agreeaent entitled Arizona Nuclear Power P oject Participation Agreement, dated as o August 23, 1973, as a ended by Amendment No.1, dated as of 26'znuary','97~, Pmendnent No.2, dated as of August 8>

l I 0 3 1975, Amendment No.3, dated as of July 22, 1976, Amendment No.4, da ed as of December" 15, 1977, and Amendmen No.5, dated as of December 5, 1979, (hereinafter as so amended"Participation Agreement").3.2 Because of recent experiences and developments in the electric power industry, the Participan s desire to 1 mit liabi'ity due to willful Action, whether or no-it results from or arises out of a nuclear incident.4~AGiKZ~NT: 10 12 The Parties agree that the Participation Agreement be and is hereby amended as fol,lows: 4.1 Section 3.56.4 shall be deleted in its entirety and a new 13 Section 3.56.4 shall be added to read as follows: 15 16 17 3.56.4 The phrase"employees having management or administrative responsibility" as used in this Section 3.56 means any employee of a Participant, including without limitation the Project Manager r and Operating Agent, who is responsible 10 21 22 fo" one or more, of the functions of planning, organizing, coordinating, directing, controlling and supe~ising such Partic pant's performance under any of the Project Agreements; pro-vided, however, that with respec to 26 employees o=the Operat.'ng Agent, such

'J phrase shall refer only to (i)any.employee of'the Operating Agent desig-nated as the'PVNGS station superinten-dent (or such other title designation.as the Operating.Agent shall deter-.mine),,and during his absence, the Operating Agent's employee who has been 10 designated to act and is acting for said station superintendent, and (ii)anyone in the organizational structure of the Operating Agent between such.station superintendent and an officer.13 14 15 16 4.2 Section 21.LIABILITY, composed of subsections 21.1 through 21.6 inclusive, shall be deleted in its entirety and a new Section 2)shall be added to ead as follows: 21.LIABILITY 17 1S 19)0 21 22 23 21.1 Except for liabilitv resulting from Willful Action, and subject to the provisions of Sections 21.4, 21.5, and 21.6 hereof, no Par-ticipant, its directors or other governing body,'fficers or employees shall be liable to any other Pa tic'pant for any uninsured loss, damage, claim, cost, charge or expense of any kind o" nature incurred by the other Partici-75 26 pan s (nclud'ng d rect, indirect or conse-cuential loss, damage, cl.aim, cos, charge or

expense;and wnether or not resulting from the negligence of a Participant, its directors or other govern'ng body, o ficers, employees,, or 7 any person or entity whose negligence would be imputed to such Participant fzom (i)Construc-tion Work, Operating Work and the making, operat'n,and maintenance of Capital Improve-ments, use or ownership of A)6'P or (ii)the performance or non-performance of the obliga<<10 tions of'a Participant

'under the Project Agree-ments other-than.-the obligation to pay sums 12 which have become due, and eacn Participant 13 releases each other Participant, its directors 14 oz other governing body, officers and em-15 16 17 ployees, from any such liability.

21.2, Except as provided in Sections 2l.4, 21.5, and 21.6 hereof, the costs and expenses of discharging all 18 Work Liability imposed upon'one or more of the 19 Participants for which payment is not made by Projec" 20 Insurance, shall be shared among and paid by all 21 22 23 Participants in proportion to their respective Gene-ration Entitlement Shares.21.3 In the event the public liability, as defined in the Atomic Energy Act of 1954 as amended, arising fro" l5 any nuclear'ncident, as defined in said act, 26 involving Al~P exceeds'n the aggregate the tota'4-C 3 amount of protection provided or is not covered by the insurance and any indemnity agreement;reouired by Sec ion 19.3 hereof, then anv such excess or un-covered public liability assessed and collectible against any Participant:and,all costs and expenses incurred by such'Participant in the investigation, settlement,and defense of claims arising.from such nuclear incident and not recovered under such insurance or indemnity agreement'shall be shared by 10 all Participants in ac'cordance.with, their respective Generation Entitlement Shares.12 21.4 Each Participant shall be responsible for any direct, 13 14.indirect or consequential damage, loss, claim, cost, charge or expense that is not covered by Project 15 Insurance and results from its own Vill ul Action as 16 defined in Section 3.56.of the Pa.ticipation Agree-19 ment and shall indemnify and hold harmless the other Participants, their directors o.members of its governing body, officers and employees from any such 20 21 damage,,loss, claim, cost, charge or expense.i 21.5 Except as provided in Section 21.4 hereof, the aggre-22 23~l4 gate liability of any Participant to all other Par-ticipants for all uninsured, damages, losses, cia ms, costs, charges o" expenses, whether ind'rect or con-75 sequential, result.ng from Willf 1 Action of such 26 Part'cipant and not arising out of o" in connection V

with a nuclear inciden" as defined in the Atomic Energy Ac of 1954 as amended, shall not exceed'510,000,000 per occurrence.

Each Participant releases each other Participant, its directors or other governing body, officers and emplovees from any such aggregate liability in excess of.410,000,000 per occurrence.

21.6 Except as provided in Section 21.4 hereof, the 10 12 13 aggregate liability of any Participant to all other Participants for,all uninsured damages, losses, claims, costs, charges or expenses, whether direct, indirect or consequential,.resulting from Willful Action of such Participant'nd arising, out of or in 14 connection with a nuclear incident as defined in the 15 Atomic Energy Act of l954 as amended, sha1,1 not 16 exceed 42,000,000 per occurrence.

Each Participant 17 18 20 21 22 releases each other Participant, its directors or other governing body, officers and employees from any such aggregate liability in excess of 52,000,000 per occurrence.

,21.7 Except for liability resulting from Willful Action, and subjec" to the provisions of Sections 21.5 and 21.6 hereof, any Participan"..

whose electric custome" 24 shall have a claim or bring an action against any'75 othe".Part'cipant for any death, injury, loss or 26 damage arising out of or in connection>>"'th

'nterrup-X2 040e 9 f~

.tions to or curtailment of electric service to such customer caused by the-operation or failure of operation of ANPP or any portion thereof shall indemnify and hold harmless'such other Participant, its directors, officers.and employees from and against any liability'for such death, injury, loss or damage.10 21.8 The provisions of this Section 21 shall not be construed so as to relieve any insurer of its obli-gation to pay any insurance proceeds in accordance with the terms and conditions of valid and collect-ible Project.Insurance policies.13 4.3 Except as provided herein, the Participation Agreement, as 15 amended by this Amendment No.6, shall remain in full force and effect.16 5~EXECUTION:

17 18 The parties have executed this Amendment No.6 as of the date first set forth above.19 20 ARIZONA PUBLIC SERVICE COMPANY 21 By"'" 23 Its 26 I (p I ATTEST A?iD COJi.iERSIGN:

SALT RIVER PROJEC AGRICULTUF~

I~sPROVEaE'.iT AND 701ii:-R DISTRiCT 3 Its By Its SOUW"RN Cc'FOP'ZA'EDISON CO."PALY 10 Its 12 13 14 15 ATTEST: Its PUBLIC SERVICE COY Ah~O." hEh MEXICO t By Its 16 17 18 ATTES EL PASO ELECTRIC CO)PAPZ By 20 Its Its 21 22 23 24 25 26 I h