Common use of BAT Settlement Payment Clause in Contracts

BAT Settlement Payment. (i) Effective as of July 6, 2001 and continuing through the Amended Term, APS will calculate its BAT Settlement Payment amount using the following formula: BAT Settlement Payment = [ (R * AI * Net KWhrs) less (Deductions) less (10% Standard Deduction) ] * 5% Where R = $.0256 / KWhr. Where Net KWhrs = APS’ share of actual net kilowatt hours generated from the Plant during the quarterly period. (1) Salaries and/or other compensation paid to members of the Navajo Nation; (2) Purchases of Navajo goods and services; and (3) Any payment made to the government of the Navajo Nation, except for the BAT Settlement Payment paid pursuant to this Restated Agreement and any penalties or fines. Where Standard Deduction = an amount equal to the greater of ten percent of (R * AI * Net KWhrs) or $125,000.00. As set forth on Exhibit C, APS will include in its Operating Report provided to the ONTC a statement of actual net generation for each quarter. Where AI = an adjustment calculated in the 3rd Quarter of each year based upon a 5-year rolling average of Producer Price Index data published by the Bureau of Labor Statistics. Annual adjustments shall be cumulative, i.e., the total current year adjustment shall be equal to the incremental current year adjustment multiplied by the previous year’s adjustment. The incremental adjustment shall be calculated utilizing the following methodology: AI = (75% * Cost Index) plus (25% * Revenue Index). Where Cost Index = 42.3% * Bituminous Coal and Lignite: West (BLS Series PCU1211#214) plus 0.9% * Natural Gas(BLS Series PCU1331#A2) plus 7.6% * Other Heavy Construction (BLS Series PCUBHVY#) plus 49.2% * Unit Labor Costs: Non-Farm Business (BLS Series PRS85006112) Where Revenue Index =

BAT Settlement Payment. (i) Effective as of July 6, 2001 and continuing through the Amended Term, APS will calculate its BAT Settlement Payment amount using the following formula: BAT Settlement Payment = [ (R * AI * Net KWhrs) less (Deductions) less (10% Standard Deduction) ] * 5% Where R = $.0256 / KWhr. Where Net KWhrs = APS’ share of actual net kilowatt hours generated from the Plant during the quarterly period. (1) Salaries and/or other compensation paid to members of the Navajo Nation; (2) Purchases of Navajo goods and services; and (3) Any payment made to the government of the Navajo Nation, except for the BAT Settlement Payment paid pursuant to this Restated Agreement and any penalties or fines. Where Standard Deduction = an amount equal to the greater of ten percent of (R * AI * Net KWhrs) or $125,000.00. As set forth on Exhibit C, APS will include in its Operating Report provided to the ONTC a statement of actual net generation for each quarter. Where AI = an adjustment calculated in the 3rd Quarter of each year based upon a 5-year rolling average of Producer Price Index data published by the Bureau of Labor Statistics. Annual adjustments shall be cumulative, i.e., the total current year adjustment shall be equal to the incremental current year adjustment multiplied by the previous year’s adjustment. The incremental adjustment shall be calculated utilizing the following methodology: AI = (75% * Cost Index) plus (25% * Revenue Index). Where Cost Index = 42.3% * Bituminous Coal and Lignite: West (BLS Series PCU1211#214) plus 0.9% * Natural Gas(BLS Gas (BLS Series PCU1331#A2) plus 7.6% * Other Heavy Construction (BLS Series PCUBHVY#) plus 49.2% * Unit Labor Costs: Non-Farm Business (BLS Series PRS85006112) Where Revenue Index == 65.2% * Electric Power and Natural Gas Utilities, Other, Mountain (BLS Series PCU4981#148) plus 34.8% * Electric Power and Natural Gas Utilities, Other, Pacific (BLS Series PCU4981#149) If any of the BLS indices used in this calculation are discontinued, the Parties shall mutually agree upon an equivalent substitute BLS index. The Parties agree that, beginning January 1, 2002, the Bituminous Coal and Lignite: Surface Mining (BLS Series PCU1211#1) will be substituted into the calculation in place of Bituminous Coal and Lignite: West (BLS Series PCU1211#214). A calculation of AI for the 3rd Quarter 2001 through the 2nd Quarter 2002 BAT Settlement Payments is attached as Exhibit B. The 5-year average of index data for 1996 through 2000 is used to develop this initial adjustment. Each subsequent annual adjustment will be made for the 3rd Quarter BAT Settlement Payment using the 5-year rolling average of index data through the end of the previous year. A sample calculation of AI for the 3rd Quarter 2002 through 2nd Quarter 2003 BAT Settlement Payments using estimated data is included in Exhibit B. Calculations in subsequent years will follow this same formula. (ii) APS will make its BAT Settlement Payments on a quarterly basis, with payments due 45 days after the end of each calendar quarter. APS will, at the time of making such payments, provide to the ONTC an Operating Report containing the following information used to calculate APS’ BAT Settlement Payment: (a) APS revenue requirement, as adjusted by AI; (b) Net KWhrs for the quarter; (c) Deductions as defined above; and

BAT Settlement Payment. (i) Effective as of July 6, 2001 and continuing through the Amended Term, APS will calculate its BAT Settlement Payment amount using the following formula: BAT Settlement Payment = [ (R * AI * Net KWhrs) less (Deductions) less (10% Standard Deduction) ] * 5% Where R = $.0256 / KWhr. Where Net KWhrs = APS’ share of actual net kilowatt hours generated from the Plant during the quarterly period. (1) Salaries and/or other compensation paid to members of the Navajo Nation; (2) Purchases of Navajo goods and services; and (3) Any payment made to the government of the Navajo Nation, except for the BAT Settlement Payment paid pursuant to this Restated Agreement and any penalties or fines. Where Standard Deduction = an amount equal to the greater of ten percent of (R * AI * Net KWhrs) or $125,000.00. As set forth on Exhibit C, APS will include in its Operating Report provided to the ONTC a statement of actual net generation for each quarter. Where AI = an adjustment calculated in the 3rd Quarter of each year based upon a 5-year rolling average of Producer Price Index data published by the Bureau of Labor Statistics. Annual adjustments shall be cumulative, i.e., the total current year adjustment shall be equal to the incremental current year adjustment multiplied by the previous year’s adjustment. The incremental adjustment shall be calculated utilizing the following methodology: AI = (75% * Cost Index) plus (25% * Revenue Index). Where Cost Index = 42.3% * Bituminous Coal and Lignite: West (BLS Series PCU1211#214) plus 0.9% * Natural Gas(BLS Gas (BLS Series PCU1331#A2) plus 7.6% * Other Heavy Construction (BLS Series PCUBHVY#) plus 49.2% * Unit Labor Costs: Non-Farm Business (BLS Series PRS85006112) Where Revenue Index =

BAT Settlement Payment. (i) Effective as of July 6, 2001 and continuing through the Amended Term, APS will calculate its BAT Settlement Payment amount using the following formula: BAT Settlement Payment = Payment= [ (R * AI * Net KWhrs) less (Deductions) less (10% Standard Deduction) ] * 5% Where R = $.0256 / I KWhr. Where Net KWhrs = APS’ ' share of actual net kilowatt hours generated from the Plant during the quarterly period. (1) Salaries and/or other compensation paid to members of the Navajo Nation; (2) Purchases of Navajo goods and services; and (3) Any payment made to the government of the Navajo Nation, except for the BAT Settlement Payment paid pursuant to this Restated Agreement and any penalties or fines. Where Standard Deduction = an amount equal to the greater of ten percent of (R * AI *AI* Net KWhrs) or $125,000.00. As set forth on Exhibit C, APS will include in its Operating Report provided to the ONTC a statement of actual net generation for each quarter. Where AI = an adjustment calculated in the 3rd Quarter of each year based upon a 5-year rolling average of Producer Price Index data published by the Bureau of Labor Statistics. Annual adjustments shall be cumulative, i.e., the total current year adjustment shall be equal to the incremental current year adjustment multiplied by the previous year’s 's adjustment. The incremental adjustment shall be calculated utilizing the following methodology: AI = AI= (75% * Cost Index) plus (25% * Revenue Index). Where Cost Index = 42.3% * Bituminous Coal and Lignite: West (BLS Series PCU1211#214) plus 0.9% * Natural Gas(BLS Gas (BLS Series PCU1331#A2) plus 7.6% * Other Heavy Construction (BLS Series PCUBHVY#) plus 49.2% * Unit Labor Costs: Non-Farm Business (BLS Series PRS85006112) Where Revenue Index == 65.2% * Electric Power and Natural Gas Utilities, Other, Mountain (BLS Series PCU4981#148) plus 34.8% * Electric Power and Natural Gas Utilities, Other, Pacific (BLS Series PCU4981#149) If any of the BLS indices used in this calculation are discontinued, the Parties shall mutually agree upon an equivalent substitute BLS index. The Parties agree that, beginning January 1, 2002, the Bituminous Coal and Lignite: Surface Mining (BLS Series PCU1211#1) will be substituted into the calculation in place of Bituminous Coal and Lignite: West (BLS Series PCU1211#214). A calculation of AI for the 3rd Quarter 2001 through the 2nd Quarter 2002 BAT Settlement Payments is attached as Exhibit B. The 5-year average of index data for 1996 through 2000 is used to develop this initial adjustment. Each subsequent annual adjustment will be made for the 3rd Quarter BAT Settlement Payment using the 5-year rolling average of index data through the end of the previous year. A sample calculation of AI for the 3rd Quarter 2002 through 2nd Quarter 2003 BAT Settlement Payments using estimated data is included in Exhibit B. Calculations in subsequent years will follow this same formula. (ii) APS will make its BAT Settlement Payments on a quarterly basis, with payments due 45 days after the end of each calendar quarter. APS will, at the time of making such payments, provide to the ONTC an Operating Report containing the following information used to calculate APS' BAT Settlement Payment: (a) APS revenue requirement, as adjusted by AI; (b) Net KWhrs for the quarter; (c) Deductions as defined above; and

BAT Settlement Payment. (i) Effective as of July 6, 2001 and continuing through the Amended Term, APS will calculate its BAT Settlement Payment amount using the following formula: BAT Settlement Payment = [ (R * AI * Net KWhrs) less (Deductions) less (10% Standard Deduction) ] * 5% Where R = $.0256 / I KWhr. Where Net KWhrs = APS’ ' share of actual net kilowatt hours generated from the Plant during the quarterly period. (1) Salaries and/or other compensation paid to members of the Navajo Nation; (2) Purchases of Navajo goods and services; and (3) Any payment made to the government of the Navajo Nation, except for the BAT Settlement Payment paid pursuant to this Restated Agreement and any penalties or fines. Where Standard Deduction = an amount equal to the greater of ten percent of (R * AI * Net KWhrs) or $125,000.00. As set forth on Exhibit C, APS C,·APS will include in its Operating Report provided to the ONTC a statement of actual net generation for each quarter. Where AI = an adjustment calculated in the 3rd Quarter of each year based upon a 5-year rolling average of Producer Price Index data published by the Bureau of Labor Statistics. Annual adjustments shall be cumulative, i.e., the total current year adjustment shall be equal to the incremental current year adjustment multiplied by the previous year’s 's adjustment. The incremental adjustment shall be calculated utilizing the following methodology: AI = (75% * Cost Index) plus (25% * Revenue Index). Where Cost Index = 42.3% * Bituminous Coal and Lignite: West (BLS Series PCU1211#214) plus 0.9% * Natural Gas(BLS Gas (BLS Series PCU1331#A2) plus 7.6% * Other Heavy Construction (BLS Series PCUBHVY#) plus 49.2% * Unit Labor Costs: Non-Farm NonFarm Business (BLS Series PRS85006112) Where Revenue Index == 65.2% * Electric Power and Natural Gas Utilities, Other, Mountain (BLS Series PCU4981#148) plus 34.8% * Electric Power and Natural Gas Utilities, Other, Pacific (BLS Series PCU4981#149) If any of the BLS indices used in this calculation are discontinued, the Parties shall mutually agree upon an equivalent substitute BLS index. The Parties agree that, beginning January 1, 2002, the Bituminous Coal and Lignite: Surface Mining (BLS Series PCU1211#1) will be substituted into the calculation in place of Bituminous Coal and Lignite: West (BLS Series PCU1211#214). A calculation of AI for the 3rd Quarter 2001 through the 2nd Quarter 2002 BAT Settlement Payments is attached as Exhibit B. The 5-year average of index data for 1996 through 2000 is used to develop this initial adjustment. Each subsequent annual adjustment will be made for the 3rd Quarter BAT Settlement Payment using the 5-year rolling average of index data through the end of the previous year. A sample calculation of AI for the 3rd Quarter 2002 through 2nd Quarter 2003 BAT Settlement Payments using estimated data is included in Exhibit B. Calculations in subsequent years will follow this same formula. (ii) APS will make its BAT Settlement Payments on a quarterly basis, with payments due 45 days after the end of each calendar quarter. APS will, at the time of making such payments, provide to the ONTC an Operating Report containing the following information used to calculate APS' BAT Settlement Payment: (a) APS revenue requirement, as adjusted by AI; (b) Net KWhrs for the quarter; (c) Deductions as defined above; and