BETWEEN

Exhibit 10.9(a)
---------------

POWER PURCHASE CONTRACT

BETWEEN

SOUTHERN CALIFORNIA EDISON COMPANY

AND

ZOND SYSTEMS, INC.

MONOLITH II

TABLE OF CONTENTS

SECTION TITLE PAGE
------- ----- ----

1. PROJECT SUMMARY 1

2. DEFINITIONS 5

3. TERM 10

4. GENERATING FACILITY 11

5. OPERATING OPTIONS 22

6. INTERCONNECTION FACILITIES 24

7. ELECTRIC LINES AND ASSOCIATED EASEMENTS 26

8. METERING 27

9. POWER PURCHASE PROVISIONS 29

10. PAYMENT AND BILLING PROVISIONS 40

11. TAXES 44

12. TERMINATION 44

13. LIABILITY 45

14. INSURANCE 47

15. UNCONTROLLABLE FORCES 49

16. NONDEDICATION OF FACILITIES 51

17. PRIORITY OF DOCUMENTS 51

18. NOTICES AND CORRESPONCENCE 52

19. PREVIOUS COMMUNICATIONS 52

20. XXXXXXXXX 00

00. SUCCESSORS AND ASSIGNS 53

22. EFFECT OF SECTION HEADINGS 53

23. GOVERNING LAW 54

24. MULTIPLE ORIGINALS 54

SIGNATURES 54

INTERCONNECTION FACILITIES AGREEMENT APPENDIX A

FORECAST OF ANNUAL AS-AVAILABLE
CAPACITY PAYMENT SCHEDULE APPENDIX B

FORECAST OF ANNUAL MARGINAL COST
OF ENERGY PAYMENT SCHEDULE APPENDIX C

TOU-8 RATE SCHEDULE RULE 21 APPENDIX D

1. PROJECT SUMMARY

This Contract is entered into between Southern California Edison Company
("Edison") and Zond Systems, Inc. ("Zond"), a California corporation,
acting in its own behalf and in behalf of other owners, if any, as
Project Manager, collectively referred to as ("Seller"). Seller is
willing to construct, own, and operate a Qualifying Facility and sell
electric power to Edison and Edison is willing to purchase electric
power delivered by Seller to Edison at the Point of Interconnection
pursuant to the terms and conditions set forth as follows:

1.1 All Notices shall be sent to Seller at the following address:

Zond Systems, Inc.

000 Xxxxx Xxxxx Xxxxxx

X.X. Xxx 000

Xxxxxxxxx, XX 00000

Attention: Director of Operations, and Zond Systems,
Inc.

0000 Xxxxxxx Xxxxx

Xxxxx 000

Xxxxxxx, XX 00000

Attention: General Counsel

1.2 Seller's Generating Facility:

a. Nameplate Rating: 7000 kW.

b. Location: Sections 33 and 34, Township 12 North, Range
14 West, SBB&M.

c. Type: Small Power Production Facility

d. Delivery of power to Edison at a nominal 12,000 volts.

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e. Seller shall commence construction of the Generating
Facility by January 1985.

1.3 Edison Customer Service District:

Antelope Valley

00000 00xx Xxxxxx X

Xxxxxxxxx, XX 00000.

1.4 Location of Edison Operating Switching Center:

Antelope Substation

0000 Xxxx Xxxxxx X

Xxxxxxxxx, XX 00000

1.5 Contract Capacity: 7,000 kW

1.5.1 Estimated as-available capacity: 7,000 kW.

1.5.2 Firm Capacity: 0 kW.

1.6 Expected annual production: 24,000,000 kWh.

1.7 Expected Firm Operation for each generating unit(s): 1985.

1.8 Contract Term: 30 years.

1.9 Operating Options pursuant to Section 5:

[ ] Operating Option I. Entire Generator output to be sold
to Edison. No electric service or standby service --
required.

[X] Operating Option II. Entire Generator output to be sold
to Edison with separate electric service required.

a. Electric service Tariff Schedule No. GS-1
pursuant to Section 10.2.

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b. Contract demand: N/A.

[ ] Operating Option III. Excess generator output to be sold
to Edison with Seller serving own load.

c. Electric service Tariff Schedule No. ___
pursuant to Section 10.2.

d. Contract demand ____ kW.

e. Standby Demand ____ kW pursuant to Section 10.2.

f. Maximum electrical requirements expected ____
kW.

g. Standby electric service Tariff Schedule No. ___
pursuant to Section 10.2.

h. Minimum monthly charge for standby service
_____.

1.10 Interconnection Facilities Agreement pursuant to Section 6 shall
be: Seller Owned and Operated Basis (Appendix A)

1.11 The Capacity Payment Option selected by Seller pursuant to
Section 9.1 shall be As-available capacity based upon: Forecast
of Annual As-Available Capacity Payment Schedule. The
as-available capacity price (first year):

$81 kW-yr. (Appendix B)

1.12 The Energy Payment Option selected by Seller pursuant to
Section 9.2 shall be:

[X] Option 1 - Forecast of Annual Marginal Cost of Energy in
effect at date of execution of this Contract.
(Appendix C)

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[ ] Option 2 - Levelized Forecast of Marginal Cost of Energy
in effect at date of execution of this Contract.
Levelized Forecast for expected date of Firm Operation
is 6.90/kWh. For the energy payment refund pursuant to
Section 9.5 under Option 2, Edison's Incremental Cost of
Capital is 15%. Seller may change once between Options 1
and 2, provided Seller delivers written notice of such
change at least 90 days prior to the date of Firm
Operation. For Option 1 or 2, Seller elects to receive
the following percentages in 20% increments, the total
of which shall equal 100%:

100 Percent of Forecast of Marginal Cost of Energy (Annual
or Levelized),and

0 Percent of Edison's published avoided cost of energy
based on Edison's full avoided operating costs as
updated periodically and accepted by the Commission.

1.13 Metering Location

Seller elects metering location pursuant to Section 8 as
follows: Seller's side of the Interconnection Facilities. Loss
compensation factor is equal to .5%, pursuant to Section 8.3.

2. DEFINITIONS

When used with initial capitalizations, whether in the singular or in
the plural, the following terms shall have the following meanings:

2.1 Appendix A: Interconnection Facilities Agreement - Seller Owned
and Operated Basis

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2.2 Appendix B: Forecast of Annual As Available Capacity Payment
Schedule

2.3 Appendix C: Forecast of Annual Marginal Cost of Energy

2.4 Appendix D: TOU-8 Tariff Rule; Rule 21

2.5 Capacity Payment Schedule(s): Published capacity payment
schedule(s) as authorized by the Commission for as-available or
firm capacity.

2.6 Commission: The Public Utilities Commission of the State of
California.

2.7 Contract: This document and Appendices, as amended from time to
time.

2.8 Contract Capacity: The electric power producing capability of
the Generating Facility.

2.9 Contract Term: Period in years commencing with date of Firm
Operation for the first generating unit(s) during which Edison
shall purchase electric power from Seller.

2.10 Edison: The Southern California Edison Company.

2.11 Edison Electric System Integrity: The state of operation of
Edison's electric system in a manner which is deemed to minimize
the risk of injury to persons and/or property and enables Edison
to provide adequate and reliable electric service to its
customers.

2.12 Emergency: A condition or situation which in Edison's sole
judgment affects Edison Electric System Integrity.

2.13 Energy: Kilowatthours generated by the Generating Facility which
are purchased by Edison at the Point of Interconnection.

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2.14 Firm Operation: The date upon which the Parties agree testing of
the first generating unit has been completed and the unit is
capable of commercial operation.

2.15 First Period: The period of the Contract Term specified in
Section 3.1.

2.16 Forced Outage: Any outage other than a scheduled outage of the
Generating Facility that fully or partially curtails its
electrical output.

2.17 Generating Facility: All of Seller's generators, including all
protective and other associated equipment and improvements
related thereto, necessary to produce electrical power at
Seller's Facility excluding associated land, land rights, and
interests in land.

2.18 Generator: The generator(s) and associated prime mover(s), which
are a part of the Generating Facility.

2.19 Interconnection Facilities: Those protection, metering, electric
line(s), and other facilities required in Edison's sole judgment
to permit an electrical interface between Edison's system and
the Generating Facility in accordance with Edison's Tariff Rule
No. 21 titled Cogeneration and Small Power Production
Interconnection Standards filed with the Commission and attached
hereto as Appendix D.

2.20 Interconnection Facilities Agreement: That document which is
specified in Section 1.10 and is attached hereto.

2.21 KVAR: Reactive kilovolt-ampere, a unit of measure of reactive
power.

2.22 Operate: To provide the engineering, purchasing, repair,
supervision, training, inspection, testing, protection,
operation, use, management,

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replacement, retirement, reconstruction, and maintenance of and
for the Generating Facility in accordance with applicable
California utility standards and good engineering practices.

2.23 Operating Representatives: Individual(s) appointed by each Party
for the purpose of securing effective cooperation and
interchange of information between the Parties in connection
with administration and technical matters related to this
Contract.

2.24 Parties: Edison and Seller.

2.25 Party: Edison or Seller.

2.26 Peak Months: Those months in which the Edison annual system peak
demand could occur. Currently, but subject to change with
notice, the peak months for the Edison system are June, July,
August, and September.

2.27 Point of Interconnection: The point where the transfer of
electrical energy between Edison and Seller takes place.

2.28 Project: The Generating Facility and Interconnection Facilities
required to permit operation of Seller's Generator in parallel
with Edison's electric system.

2.29 Project Manager: The entity responsible for operating and
maintaining the Project on behalf of the owner(s) thereof.

2.30 Protective Apparatus: That equipment and apparatus installed by
Seller and/or Edison pursuant to Section 4.2.

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2.31 Qualifying Facility: Small Power Production Facility which meets
the criteria as defined in Title 18, Code of Federal
Regulations, Section 292.201 through 292.207 as of the execution
date of this Contract.

2.32 Second Period: The period of the Contract Term specified in
Section 3.2.

2.33 Seller: The Party identified in Section 1.0.

2.34 Seller's Facility: The premises and equipment of Seller located
as specified in Section 1.2.

2.35 Small Power Production Facility: The facilities and equipment
which use biomass, waste, or renewable resources, including
wind, solar, geothermal, and water, to produce electrical energy
as defined in Title 18, Code of Federal Regulations, Section
292.201 through 292.207 as of the execution date of this
Contract.

2.36 Summer Period: Defined in Edison's Tariff Schedule No. TOU-8 as
now in effect or as may hereafter be authorized by the
Commission.

2.37 Tariff Schedule No. TOU-8: Edison's time-of-use energy tariff
for electric service exceeding 500 kW, as now in effect or as
may hereafter be authorized by the Commission.

2.38 Uncontrollable Forces: Any occurrence beyond the control of a
Party which causes that Party to be unable to perform its
obligations hereunder and which a Party has been unable to
overcome by the exercise of due diligence, including but not
limited to flood, drought, earthquake, storm, fire, pestilence,
lightning and other natural catastrophes, epidemic, war, riot,
civil disturbance or disobedience, strike, labor dispute, action
or

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inaction of legislative, judicial, or regulatory agencies, or
other proper authority, which may conflict with the terms of
this Contract, or failure, threat of failure or sabotage of
facilities which have been maintained in accordance with good
engineering and operating practices in California.

2.39 Winter Period: Defined in Edison's Tariff Schedule No. TOU-8 as
now in effect or as may hereafter be authorized by the
Commission.

3. TERM

This Contract shall be effective upon execution by the Parties and shall
remain effective until either Party gives 90 days prior written notice
of termination to the other Party, except that such notice of
termination shall not be effective to terminate this Contract prior to
expiration of the Contract Term specified in Section l.8.

3.1 The First Period of the Contract Term shall commence upon date
of Firm Operation but not later than 5 years from the date of
execution of this Contract and shall be for 10 years.

3.2 The Second Period of the Contract Term shall commence upon
expiration of the First Period and shall continue for the
remainder of the Contract Term.

4. GENERATING FACILITY

4.1 Ownership

The Generating Facility shall be owned by Seller.

4.1.1 If the identity of the Project Manager changes for any
reason, Edison shall have the right to approve the new
Project Manager. Such approval shall be withheld only if
the assets, financial

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condition, or operating capability of the proposed
replacement Project Manager gives Edison reasonable
cause to doubt such entity's ability to adequately
perform the duties of the Project Manager. To facilitate
such approval, Edison may request Seller to furnish any
material reasonably necessary for Edison to prudently
approve a change in Project Manager. Therefore, except
as in conflict with law, any financing documents,
partnership agreements, or management contracts which
specify the Project Manager's role shall specifically
provide for Edison's right of approval of any such
Project Manager. Such change in Project Manager and the
approval thereof by Edison shall not operate to reduce
the rights and obligations of the project owners under
the Contract.

4.1.2 The Project Manager shall have the authority to contract
for the owners of the Project on all matters pertaining
to the implementation of this Contract. The Project
Manager shall provide Edison with satisfactory evidence
of its authority to act on behalf of the owners of the
Project. Such evidence shall include, but not be limited
to, authenticated copies of any partnership
agreement(s), fictitious business name statement(s),
certificate(s) of partnership, and management
agreement(s). The Project Manager shall also provide
Edison with authenticated copies of the

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agreement(s), if any, appointing the Project Manager for
purposes of this Contract.

4.1.3 Edison's obligations to purchase capacity and Energy
shall be contingent upon the compliance by Seller with
the terms and conditions of this Section 4.1

4.2 Design

4.2.1 Seller, at no cost to Edison, shall:

a. Design the Generating Facility.

b. Acquire all permits and other approvals
necessary for the construction, operation, and
maintenance of the Generating Facility.

c. Complete all environmental impact studies
necessary for the construction, operation, and
maintenance of the Generating Facility.

d. Furnish and install the relays, meters, power
circuit breakers, synchronizer, and other
control and Protective Apparatus as shall be
agreed to by the Parties as being necessary for
proper and safe operation of the Project in
parallel with Edison's electric system.

4.2.2 Edison shall have the right to:

a. Review the design of the Generating Facility's
electrical system and the Seller's
Interconnection Facilities. Such review may
include, but not be limited to, the Generator,
governor,

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excitation system, synchronizing equipment,
protective relays, and neutral grounding. The
Seller shall be notified in writing of the
outcome of the Edison review within 30 days of
the receipt of all specifications for both the
Generating Facility and the Interconnection
Facilities. Any flaws perceived by Edison in the
design shall be described in Edison's written
notice.

b. Request modifications to the design of the
Generating Facility's electrical system and the
Seller's Interconnection Facilities. Such
modifications shall be required if necessary to
maintain Edison Electric System Integrity when
in parallel with the Edison electric system.

4.2.3 Seller shall provide individual power factor correction
capacitors for each induction-type generator. Such
capacitors shall be switched on and off simultaneously
with each of the associated induction-type generator(s)
of the Generating Facility. The KVAR rating of such
capacitors shall be the highest standard value which
will not exceed such generators no-load KVAR
requirement. Seller shall not install power factor
correction in excess of that required by this Section
unless agreed to in writing by the Parties.

4.2.4 Seller shall not locate any part of a wind-driven
generating unit of the Generating Facility within a
distance 1.25 times the height of a wind turbine
structure of an existing electric utility 33 kV, 66 kV,
or 115 kV transmission line right of way or within three
rotor blade

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diameters of an existing electric utility 220 kV or 500
kV transmission line right of way or any proposed
transmission line right of way of which Edison is
pursuing regulatory approval for construction.

4.3 Construction

Edison shall have the right to review, consult with, and make
recommendations regarding Seller's construction schedule and to
monitor the construction and start-up of the Project. Seller
shall notify Edison, at least one year prior to Firm Operation,
of changes in Seller's Construction Schedule which may affect
the date of Firm Operation.

4.4 Operation

4.4.1 The Generating Facility and Seller's Protective
Apparatus shall be operated and maintained in accordance
with applicable California utility industry standards
and good engineering practices with respect to
synchronizing, voltage and reactive power control.
Edison shall have the right to monitor operation of the
Project and may require changes in Seller's method of
operation if such changes are necessary, in Edison's
sole judgment, to maintain Edison Electric System
Integrity.

4.4.2 Seller shall notify in writing Edison's Operating
Representative at least 14 days prior to:

(a) the initial testing of Seller's Protective
Apparatus; and

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(b) the initial parallel operation of Seller's
Generators with Edison's electrical system.

Edison shall have the right to have a representative
present at each event.

4.4.3 Edison shall have the right to require Seller to
disconnect the Generator from the Edison electric system
or to reduce the electrical output from the Generator
into the Edison electric system, whenever Edison
determines, in its sole judgement, that such a
disconnection is necessary to facilitates maintenance of
Edison's facilities, or to maintain Edison Electric
System Integrity. Each Party shall endeavor to correct,
within a reasonable period, the condition on its system
which necessitates the disconnection or the reduction of
electrical output. The duration of the disconnection or
the reduction in electrical output shall be limited to
the period of time such a condition exists.

4.4.4 The Generating Facility shall be operated with all of
Seller's Protective Apparatus in service whenever the
Generator is connected to or is operated in parallel
with the Edison electric system. Any deviation for brief
periods of emergency or maintenance shall only be by
agreement of the Parties.

4.4.5 Each Party shall keep the other Party's Operating
Representative informed as to the operating schedule of
their respective facilities affecting each other's
operation hereunder, including any reduction

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in Contract Capacity availability. In addition, Seller
shall provide Edison with reasonable advance notice
regarding its scheduled outages including any reduction
in Contract Capacity availability. Reasonable advance
notice is as follows:

SCHEDULED OUTAGE ADVANCE NOTICE
EXPECTED DURATION TO EDISON
------------------------ --------------
Less than one day 24 Hours
One day or more
(except major overhauls) 1 Week
Major overhaul 6 Months

4.4.6 Notification by each Party's Operating Representative of
outage date and duration should be directed to the other
Party's Operating Representative by telephone.

4.4.7 Seller shall not schedule major overhauls during Peak
Months.

4.4.8 Seller shall maintain an operating log at Seller's
Facility with records of: real and reactive power
production; changes in operating status, outages,
Protective Apparatus operations; and any unusual
conditions found during inspections. In addition, Seller
shall maintain records applicable to the Generating
Facility, including the electrical characteristics of
the Generator and settings or adjustments of the
Generator control equipment and protective devices.
Information maintained pursuant to this Section 4.4.8
shall be provided to Edison, within 30 days of Edison's
request.

4.4.9 If, at any time, Edison doubts the integrity of any of
Seller's Protective Apparatus and believes that such
loss of integrity would impair the Edison Electric
System Integrity, Seller shall

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demonstrate, to Edison's satisfaction, the correct
calibration and operation of the equipment in question.

4.4.10 Seller shall test all protective devices specified in
Section 4.2 with qualified Edison personnel present at
intervals not to exceed four years.

4.4.11 Seller shall, to the extent possible, provide reactive
power for its own requirements, and where applicable,
the reactive power losses of interfacing transformers.
Seller shall not deliver excess reactive power to Edison
unless otherwise agreed upon between the Parties.

4.4.12 Seller warrants that, at the date of initial energy
deliveries and during the term of this Contract, its
Generating Facility shall meet the Qualifying Facility
requirements established as of the effective date of
this Contract by the Federal Energy Regulatory
Commission's rules (18 Code of Federal Regulations 292),
implementing the Public Utility Regulatory Policies Act
of 1978 (16 U.S.C.A. 796, et seq.).

4.4.13 The Seller warrants that the Generating Facility shall
at all times conform to all applicable laws and
regulations. Seller shall obtain and maintain any
governmental authorizations and permits for the
continued operation of the Generating Facility. If at
any xxxx Xxxxxx does not hold such authorizations and
permits, Seller agrees to reimburse Edison for any loss
which Edison incurs as a result of

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the Seller's failure to maintain governmental
authorization and permits.

4.4.14 At Edison's request, Seller shall make all reasonable
effort to deliver power at an average rate of delivery
at least equal to the Contract Capacity during periods
of Emergency. In the event that the Seller has
previously scheduled an outage coincident with an
Emergency, Seller shall make all reasonable efforts to
reschedule the outage. The notification periods listed
in Section 4.4.5 shall be waived by Edison if Seller
reschedules the outage.

4.5 Maintenance

4.5.1 Seller shall maintain the Generating Facility in
accordance with applicable California utility industry
standards and good engineering and operating practices.
Edison shall have the right to monitor such maintenance
of the Generating Facility. Seller shall maintain and
deliver a maintenance record of the Generating Facility
to Edison's Operating Representatives upon request.

4.5.2 Seller shall make a reasonable effort to schedule
routine maintenance during Off-Peak Months. Outages for
scheduled maintenance shall not exceed a total of 30
peak hours for the Peak Months.

4.5.3 The allowance for scheduled maintenance is as follows:

a. Outage periods for scheduled maintenance shall
not exceed 840 hours (35 days) in any 12-month
period. This allowance may

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be used in increments of an hour or longer on a
consecutive or nonconsecutive basis.

b. Seller may accumulate unused maintenance hours
on a year-to-year basis up to a maximum of 1,080
hours (45 days). This accrued time must be used
consecutively and only for major overhauls.

4.6 Any review by Edison of the design, construction, operation, or
maintenance of the Project is solely for the information of
Edison. By making such review, Edison makes no representation as
to the economic and technical feasibility, operational
capability, or reliability of the Project. Seller shall in no
way represent to any third party that any such review by Edison
of the Project, including but not limited to, any review of the
design, construction, operation, or maintenance of the Project
by Edison is a representation by Edison as to the economic and
technical feasibility, operational capability, or reliability of
said facilities. Seller is solely responsible for economic and
technical feasibility, operational capability, and reliability
thereof.

5. OPERATING OPTIONS

5.1 Seller shall elect in Section 1.9 to Operate its Generating
Facility in parallel with Edison's electric system pursuant to
one of the following options:

a. Operating Option I: Seller agrees to sell the entire
Generator output to Edison with no electrical service
required from Edison.

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b. Operating Option II: Seller agrees to sell the entire
Generator output to Edison with electrical service
required from Edison.

c. Operating Option III: Seller agrees to sell to Edison
only that portion of the Generator output in excess of
Seller's electrical service requirements. As much as
practicable, Seller intends to serve its electrical
requirements from the Generator output and will require
electrical standby from Edison as designated in
Section 1.9.

5.2 After expiration of the First Period of the Contract Term,
Seller may change the Operating Option, but not more than once
per year upon at least 90 days prior written notice to Edison.
Edison shall not be required to remove or reserve capacity of
Interconnection Facilities made idle by a change in operating
options. Edison may dedicate any such idle Interconnection
Facilities, owned by Edison, at any time to serve other
customers or to interconnect with other electric power sources.
Edison shall process requests for changes of operating option in
the chronological order received.

5.2.1 When the Seller wishes to reserve Interconnection
Facilities paid for by the Seller but idled by a change
in operation option, Edison shall impose a special
facilities charge related to the operation and
maintenance of the Interconnection Facility. When the
Seller no longer needs said facilities for which it has
paid, the Seller shall receive credit for the net
salvage value of the Interconnection

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Facilities dedicated to Edison's use. If Edison is able
to make use of these facilities to serve other
customers, the Seller shall receive the fair market
value of the facilities determined as of the date the
Seller either decides no longer to use said facilities
or fails to pay the required maintenance fee.

6. INTERCONNECTION FACILITIES

6.1 The Parties shall execute an Interconnection Facilities
Agreement selected by Seller in Section 1.10, covering the
design, installation, operation and maintenance of the
Interconnection Facilities required in Edison's sole judgment,
to permit an electrical interface between the Parties pursuant
to Edison's Tariff Rule No. 21.

6.2 The cost for the Interconnection Facilities set forth in the
appendices specified in Section 1.10, are estimates only for
Seller's information and will be adjusted to reflect recorded
costs after installation is complete; except that, upon Seller's
written request to Edison, Edison shall provide a binding
estimate which shall be the basis for the Interconnection
Facilities cost in the Interconnection Facilities Agreement
executed by the Parties.

6.3 The nature of the Interconnection Facilities and the Point of
Interconnection shall be set forth either by equipment lists or
appropriate one-line diagrams and shall be attached to the
appropriate appendix specified in Section 1.10.

6.4 The design, installation, operation, maintenance, and
modifications of the Interconnection Facilities shall be at
Seller's expense.

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6.5 Seller shall not commence parallel operation of the Generating
Facility until written approval for operation of the
Interconnection Facilities has been received from Edison. The
Seller shall notify Edison at least forty-five days prior to the
initial energizing of the Point of Interconnection. Edison shall
have the right to inspect the Interconnection Facilities within
thirty days of receipt of such notice. If the facilities do not
pass Edison's inspection, Edison shall provide in writing the
reasons for this failure within five days of the inspection.

6.6 Seller, at no cost to Edison, shall acquire all permits and
approvals and complete all environmental impact studies
necessary for the design, installation, operation, and
maintenance of the Interconnection Facilities.

7. ELECTRIC LINES AND ASSOCIATED EASEMENTS

7.1 Edison shall, as it deems necessary or desirable, build electric
lines, facilities and other equipment, both overhead and
underground, on and off Seller's Facility, for the purpose of
effecting the agreements contained in this Contract. The
physical location of such electric lines, facilities and other
equipment on Seller's Facility shall be determined by agreement
of the Parties.

7.2 Seller shall reimburse Edison for the cost of acquiring property
rights off Seller's Facility required by Edison to meet its
obligations under this Contract.

7.3 Seller shall grant to Edison, without cost to Edison, and by an
instrument of conveyance, acceptable to Edison, rights of way,
easements and other property interests necessary to construct,
reconstruct, use, maintain, alter,

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add to, enlarge, repair, replace, inspect and remove, at any
time, the electric lines, facilities or other equipment, both
overhead and underground, which are required by Edison to effect
the agreements contained in the Contract. Seller shall also
grant the rights of ingress and egress at all reasonable times
necessary for Edison to perform the activities contemplated in
the Contract.

7.4 The electric lines, facilities, or other equipment referred to
in this Section 7 installed by Edison on or off Seller's
Facility shall be and remain the property of Edison.

7.5 Edison shall have no obligation to Seller for any delay or
cancellation due to inability to acquire a satisfactory right of
way, easements, or other property interests.

8. METERING

8.1 All meters and equipment used for the measurement of electric
power for determining Edison's payments to Seller pursuant to
this Contract shall be provided, owned, and maintained by Edison
at Seller's expense in accordance with Edison's Tariff Rule No.
21.

8.2 All meters and equipment used for billing Seller for electric
service provided to Seller by Edison under Operating Options II
or III shall be provided, owned, and maintained by Edison at
Edison's expense in accordance with Edison's Tariff Rule No. 16.

8.3 The meters and equipment used for measuring the Energy sold to
Edison shall be located on the side of the Interconnection
Facilities as specified by Seller in Section 1.13. If the
metering equipment is located on the Seller's

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side of the Interconnection Facilities, then a loss compensation
factor agreed upon by the Parties shall be applied. At the
written request of the Seller, and at Seller's sole expense,
Edison shall measure actual transformer losses. If the actual
measured value differs from the agreed-upon loss compensation
factor, the actual value shall be applied prospectively. If the
meters are placed on Edison's side of the Interconnection
Facilities, service shall be provided at the available
transformer high-side voltage.

8.4 For purposes of monitoring the Generator operation and the
determination of standby charges, Edison shall have the right to
require, at Seller's expense, the installation of generation
metering. Edison may also require the installation of
telemetering equipment at Seller's expense for Generating
Facilities equal to or greater than 10 MW.

8.5 Edison's meters shall be sealed and the seals shall be broken
only when the meters are to be inspected, tested, or adjusted by
Edison. Seller shall be given reasonable notice of testing and
have the right to have its Operating Representative present on
such occasions.

8.6 Edison's meters installed pursuant to this Contract shall be
tested by Edison, at Edison's expense, at least once each year
and at any reasonable time upon request by either Party, at the
requesting Party's expense. If Seller makes such request, Seller
shall reimburse said expense to Edison within thirty days after
presentation of a xxxx therefor.

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8.7 Metering equipment found to be inaccurate shall be repaired,
adjusted, or replaced by Edison such that the metering accuracy
of said equipment shall be within two percent. If metering
equipment inaccuracy exceeds two percent, the correct amount of
Energy and Contract Capacity delivered during the period of said
inaccuracy shall be estimated by Edison and agreed upon by the
Parties.

9. POWER PURCHASE PROVISIONS

Prior to the date of Firm Operation, Seller shall be paid for Energy
only pursuant to Edison's published avoided cost of energy based on
Edison's full avoided operating cost as periodically updated and
accepted by the Commission. If at any time Energy can be delivered to
Edison and Seller is contesting the claimed jurisdiction of any entity
which has not issued a license or other approval for the Project,
Seller, in its sole discretion and risk, may deliver Energy to Edison
and, for any Energy purchased by Edison, Seller shall receive payment
from Edison for (i) Energy pursuant to this Section, and (ii)
as-available capacity based on a capacity price from the Standard Offer
No. 1 Capacity Payment Schedule as approved by the Commission. Unless
and until all required licenses and approvals have been obtained, Seller
may discontinue deliveries at any time.

9.1 Capacity Payments

Seller shall sell to Edison and Edison shall purchase from
Seller capacity pursuant to the capacity payment option selected
by Seller in Section 1.11. The Capacity Payment Schedules will
be based on Edison's full avoided operating costs as approved by
the Commission throughout the life of this

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Contract. Data used to derive Edison's full avoided costs will
be made available to the Seller, to the extent specified by
Seller upon request.

9.1.1 Capacity Payment Option A - As Available Capacity.
Seller shall be paid a monthly capacity payment
calculated pursuant to the following formula;

Monthly Capacity Payment = (A x D) + (B x D) + (C x D)

Where A = kWh purchased by Edison during on-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

B = kWh purchased by Edison during mid-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

C = kWh purchased by Edison during off-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

D = The appropriate time differentiated capacity
price from the Forecast of Annual
As-Available Capacity Payment Schedule as
specified by Seller in Section 1.11.

9.1.1.1 The formula set forth in Section 9.1.1
shall be computed as follows:

a. During the First Period of the Contract
Term D shall equal the appropriate time
differentiated capacity price from the
Forecast of Annual As-Available Capacity
Payment Schedule.

b. During the Second Period of the Contract
Term, the formula shall be computed with
D equal to the

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appropriate time differentiated capacity
price from Standard Offer No. 1 Capacity
Payment Schedule, but not less than the
greater of (i) the appropriate time
differentiated capacity price from the
Forecast of Annual As-Available Capacity
Payment Schedule for the last year of
the First Period, or (ii) the
appropriate time differentiated capacity
price from the Standard Offer No. 1
Capacity Payment Schedule for the first
year of the Second Period.

9.2 Energy Payments - First Period

During the First Period of the Contract Term, Seller shall be
paid a monthly energy payment for the Energy delivered by the
Seller to Edison at the Point of Interconnection pursuant to the
energy payment option selected by Seller in Section 1.12, as
follows. (Data used to derive Edison's Energy payments for the
First Period will be made available to the Seller, to the extent
specified by Seller, upon request.)

9.2.1 Energy Payment Option 1 - Forecast of Annual Marginal
Cost of Energy.

If Seller selects energy payment option 1, then during
the First Period of the Contract Term, Seller shall be
paid a monthly energy payment for Energy delivered by
Seller and purchased by Edison during each month in the
First Period of the Contract Term pursuant to the
following formula:

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monthly energy Payment = (A x D) + (B x D) + (C x D)

Where A = kWh purchased by Edison during on-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

B = kWh purchased by Edison during mid-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

C = kWh purchased by Edison during off-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

D = The sum of:
(i) the appropriate time differentiated
energy price from the Forecast of Annual
Marginal Cost of Energy, multiplied by the
decimal equivalent of the percentage of the
forecast specified in Section 1,12, and
(ii)the appropriate time differentiated
energy price from Edison's published avoided
cost of energy multiplied by the decimal
equivalent of the percentage of the
published energy price specified in
Section 1.12.

9.2.2 Energy Payment Option 2 - Levelized Forecast of Marginal
Cost of Energy.

If Seller selects energy payment option 2, then during
the First Period of the Contract Term, Seller shall be
paid a monthly energy payment for Energy delivered by
Seller and purchased by Edison each month during the
First Period of the Contract Term pursuant to the
following formula:

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Monthly Energy Payment = (A x D) + (B x D) + (C x D)

Where A = kWh purchased by Edison during on-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

B = kWh purchased by Edison during mid-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

C = kWh purchased by Edison during off-peak
periods defined in Edison's Tariff Schedule
No. TOU-8.

D = The sum of:

(i) the appropriate time differentiated
energy price from the Levelized Forecast of
Marginal Cost of Energy, for the First
Period of the Contract Term multiplied by
the decimal equivalent of the percentage of
the levelized forecast specified in Section
1.12, and (ii) the appropriate time
differentiated energy price from Edison's
published avoided cost of energy multiplied
by the decimal equivalent of the percentage
of the published energy price specified in
Section 1.12.

9.2.2.2 Performance Requirement for Energy Payment
Option 2

During the First Period when the annual
forecast referred to in Section 9.2.1 is
greater than the levelized forecast referred
to in Section 9.2.2, Seller shall deliver to
Edison at least 70 percent of the average
annual kWh

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delivered to Edison during those previous
periods when the levelized forecast referred
to in Section 9.2.2 is greater than the
annual forecast referred to in Section 9.2.1
as resource conditions permit for solar,
wind, and hydro Generating Facilities and
excluding uncontrollable forces. If Seller
does not meet the performance requirements
of this Section 9.2.2.1, Seller shall be
subject to Section 9.5.

9.3 Energy Payments - Second Period

During the Second Period of the Contract Term, Seller shall be
paid a monthly energy payment for Energy delivered by Seller and
purchased by Edison at a rate equal to 100% of Edison's
published avoided cost of energy based on Edison's full avoided
operating cost as updated periodically and accepted by the
Commission, pursuant to the following formula:

monthly energy payment = kWh purchased by Edison for each on-peak,
mid-peak, and off-peak time period defined
in Edison's Tariff Schedule No. TOU-8

x Edison's published avoided cost of energy
by time of delivery for each time period.

Data used to derive Edison's full avoided costs will be made
available to the Seller, to the extent specified by Seller, upon
request.

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9.4 Edison shall not be obligated to accept or pay for Energy, and
may request Seller whose Generating Facility is one (1) MW or
greater to discontinue or reduce delivery of Energy, for not
more than 300 hours annually during off-peak hours when (i)
purchases would result in costs greater than those which Edison
would incur if it did not purchase Energy from Seller but
instead utilized an equivalent amount of Energy generated from
another Edison source, or (ii) the Edison Electric System demand
would require that Edison hydro-energy be spilled to reduce
generation.

9.5 Energy Payment Refund

If Seller elects energy payment option 2, Seller shall be
subject to the following:

9.5.1 If Seller fails to perform the Contract obligations for
any reason during the First Period of the Contract Term,
or fails to meet the performance requirements set forth
in Section 9.2.2.1, and at the time of such failure to
perform, the net present value of the cumulative Energy
payments received by Seller pursuant to energy payment
option 2 exceeds the net present value of what Seller
would have been paid pursuant to energy payment option
1, Seller shall make an energy payment refund equal to
the difference in such net present values in the year in
which the refund is due. The present value calculation
shall be based upon the rate of Edison's incremental
cost of capital specified in Section 1.12.

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9.5.2 Not less than 90 days prior to the date Energy is first
delivered to the Point of Interconnection, Seller shall
provide and maintain a performance bond, surety bond,
performance insurance, corporate guarantee, or bank
letter of credit, satisfactory to Edison, which shall
insure payment to Edison of the energy payment refund at
any time during the First Period. Edison may, in its
sole discretion accept another form of security except
that in such instance a 1-1/2 percent reduction shall
then apply to the levelized forecast referred to in
Section 9.2.2 in computing payments for Energy. Edison
shall be provided with certificates evidencing Seller's
compliance with the security requirements in this
Section which shall also include the requirement that
Edison be given 90 days prior written notice of the
expiration of such security.

9.5.3 If Seller fails to provide replacement security not less
than 60 days prior to the date of expiration of existing
security, the energy payment refund provided in
Section 9.5 shall be payable forthwith. Thereafter,
payments for Energy shall be 100 percent of the monthly
energy payment provided in Section 9.2.1.

9.5.4 If Edison at any time determines the security to be
otherwise inadequate, and so notifies Seller, payments
thereafter for Energy shall be 100 percent of the
monthly energy payment provided in Section 9.2.1. If
within 30 days of the date Edison gives notice of such
inadequacies, Seller satisfies Edison's security
requirements,

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energy payment option 2 shall be reinstated. If Seller
fails to satisfy Edison's security requirements within
the 30-day period, the energy payment refund provided in
Section 9.5 shall be payable forthwith.

10. PAYMENT AND BILLING PROVISIONS

10.1 For Energy and capacity purchased by Edison:

10.1.1 Edison shall mail to Seller not later than thirty days
after the end of each monthly billing period (1) a
statement showing the Energy and Contract Capacity
delivered to Edison during the on-peak, mid-peak, and
off-peak periods, as those periods are specified in
Edison's Tariff Schedule No. TOU-8 for that monthly
billing period, (2) Edison's computation of the amount
due Seller, and (3) Edison's check in payment of said
amount.

10.1.2 If the monthly payment period involves portions of two
different published Energy payment schedule periods, the
monthly Energy payment shall be prorated on the basis of
the percentage of days at each price.

10.1.3 If the payment period is less than 27 days or greater
than 33 days, the capacity payment shall be prorated on
the basis of the average days per month per year.

10.1.4 If within thirty days of receipt of the statement Seller
does not make a report in writing to Edison of an error,
Seller shall be deemed to have waived any error in
Edison's statement,

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computation, and payment, and they shall be considered
correct and complete.

10.2 For electric service provided by Edison:

10.2.1 Under Operating Option III pursuant to Section 5.1,
standby electric service shall be provided under terms
and conditions of Edison's tariff schedule indicated
below as now in effect or as may hereafter be authorized
by the Commission to be revised. The applicable tariff
schedules are:

STANDBY TARIFF
SCHEDULE NO. ELECTRIC SERVICE TARIFF
---------------- -----------------------
SCG-1 TOU-8 or XX-0
XXX-0 TOU-8
SCG-3 TOU-8

10.2.1.1 (Applicable to SCG-1 only) The Standby
Demand for calculation of the standby charge
in SCG-1 as specified in Section 1.9. Edison
reserves the right to adjust the Standby
Demand based on recorded demand during
periods standby power is required.

10.2.1.2 (Applicable to SCG-I only) The capacity
rating for determination of standby waiver
qualifications shall be Contract Capacity
plus the maximum electric load served by the
Generating Facility during the on-peak time
period recorded during the preceding
12-month time period.

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10.2.1.3 A minimum monthly charge may be established
for standby electric service as provided in
the tariff schedule elected in Section 1.9.
Said minimum monthly charge shall be
specified in Section 1.9.

10.2.2 Under Operating Options II and III pursuant to Section
5.1, electric service shall be provided under terms,
conditions, and rates of Edison's tariff schedule
indicated below as now in effect or as may hereafter be
authorized by the Commission to be revised. The
applicable tariff schedule is:

XXX-0, XX-0 or
GS-2

The contract demand for calculation of the minimum
demand charge in the applicable tariff schedules is
specified in Section 1.9.

10.2.3 Edison shall commence billing Seller for electric
service rendered pursuant to the applicable tariff
schedule on the date that the Point of Interconnection
is energized.

10.3 Monthly charges associated with Interconnection Facilities shall
be billed pursuant to the Interconnection Facilities Agreement
contained in the Appendix specified in Section 1.10.

10.4 Energy Payment Refund

Energy payment refund is immediately due and payable upon
Seller's failure to perform the contract obligations as
specified in Section 9.5.

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11. TAXES

11.1 Seller shall pay ad valorem taxes and other taxes properly
attributable to the Project. If such taxes are assessed or
levied against Edison, Seller shall pay Edison for such
assessment or levy.

11.2 Seller shall pay ad valorem taxes and other taxes properly
attributed to land, land rights, or interest in land for the
Project. If such taxes are assessed or levied against Edison,
Seller shall pay Edison for such assessment or levy.

11.3 Edison shall pay ad valorem taxes and other taxes properly
attributed to Interconnection Facilities they own. If such taxes
are assessed or levied against Seller, Edison shall pay Seller
for such assessment or levy.

11.4 Seller or Edison shall provide information concerning the
Project to any requesting taxing authority.

12. TERMINATION

12.1 This Contract shall terminate if Firm Operation does not occur
within 5 years of the date of Contract execution.

13. LIABILITY

13.1 Each Party (First Party) releases the other Party (Second
Party), its directors, officers, employees and agents from any
loss, damage, claim, cost, charge, or expense of any kind or
nature (including any direct, indirect or consequential loss,
damage, claim, cost, charge, or expense), including attorneys'
fees and other costs of litigation, incurred by the First Party
in connection with damage to property of the First Party caused
by or arising out of the Second Party's construction,
engineering, repair,

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supervision, inspection, testing, protection, operation,
maintenance, replacement, reconstruction, use or ownership of
its facilities, to the extent that such loss, damage, claim,
cost, charge, or expense is caused by the negligence of Second
Party, its directors, officers, employees, agents, or any person
or entity whose negligence would be imputed to Second Party.

13.2 Each Party shall indemnify and hold harmless the other Party,
its directors, officers, and employees or agents from and
against any loss, damage, claim, cost, charge, or expense of any
kind or nature (including direct, indirect or consequential
loss, damage, claim, cost, charge, or expense), including
attorneys' fees and other costs of litigation, incurred by the
other Party in connection with the injury to or death of any
person or damage to property of a third party arising out of the
indemnifying Party's construction, engineering, repair,
supervision, inspection, testing, protection, operation,
maintenance, replacement, reconstruction, use, or ownership of
its facilities, to the extent that such loss, damage, claim,
cost, charge, or expense is caused by the negligence of the
indemnifying Party, its directors, officers, employees, agents,
or any person or entity whose negligence would be imputed to the
indemnifying Party; provided, however, that each Party shall be
solely responsible for and shall bear all cost of claims brought
by its contractors or its own employees and shall indemnify and
hold harmless the other Party for any such costs including costs
arising out of any workers compensation law. Seller releases and
shall defend and indemnify Edison from any claim, cost, loss,
damage, or

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liability arising from any contrary representation concerning
the effect of Edison's review of the design, construction,
operation, or maintenance of the Project.

13.3 The provisions of this Section 13 shall not be construed so as
to relieve any insurer of its obligations to pay any insurance
claims in accordance with the provisions of any valid insurance
policy.

13.4 Neither Party shall be indemnified under this Section 13 for its
liability or loss resulting from its sole negligence or willful
misconduct.

14. INSURANCE

14.1 Until Contract is terminated, Seller shall obtain and maintain
in force as hereinafter provided comprehensive general liability
insurance, including contractual liability coverage, with a
combined single limit of not less than $1,000,000 each
occurrence. The insurance carrier or carriers and form of policy
shall be subject to review and approval by Edison.

14.2 Prior to the date Seller's Generating Facility is first operated
in parallel with Edison's electric system, Seller shall (i)
furnish certificate of insurance to Edison, which certificate
shall provide that such insurance shall not be terminated nor
expire except on thirty days prior written notice to Edison,
(ii) maintain such insurance in effect for so long as Seller's
Generating Facility is operated in parallel with Edison's
electric system, and (iii) furnish to Edison an additional
insured endorsement with respect to such insurance in
substantially the following form:

"In consideration of the premium charged, Southern
California Edison Company (Edison) is named as
additional insured with

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respect to all liabilities arising out of Seller's use
and ownership of Seller's Generating Facility. "The
inclusion of more than one insured under this policy
shall not operate to impair the rights of one insured
against another insured and the coverages afforded by
this policy will apply as though separate policies had
been issued to each insured. The inclusion of more than
one insured will not, however, operate to increase the
limit of the carrier's liability. Edison will not, by
reason of its inclusion under this policy, incur
liability to the insurance carrier for payment of
premium for this policy.

"Any other insurance carried by Edison which may be
applicable shall be deemed excess insurance and Seller's
insurance primary for all purposes despite any
conflicting provisions in Seller's policy to the
contrary."

If the requirement of Section 14.2(iii) prevents Seller from
obtaining the insurance required in Section 14.1, then upon
written notification by Seller to Edison Section 14.2(iii) shall
be waived.

14.3 The requirements of this Section 14 shall not apply to Seller
who is a self-insured governmental agency with established
record of self-insurance.

14.4 If Seller fails to comply with the provisions of this Section
14, Seller shall, at its own cost, defend, indemnify, and hold
harmless Edison, its directors, officers, employees, agents,
assigns, and successors in interest from and against any and all
loss, damage, claim, cost, charge, or expense of any

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kind or nature (including direct, indirect or consequential
loss, damage, claim, cost, charge, or expense, including
attorneys' fees and other costs of litigation) resulting from
the death or injury to any person or damage to any property,
including the personnel and property of Edison, to the extent
that Edison would have been protected had Seller complied with
all of the provisions of this Section 14.

15. UNCONTROLLABLE FORCES

15.1 Neither Party shall be considered to be in default in the
performance of any of the agreements contained in this Contract,
except for obligations to pay money, when and to the extent
failure of performance shall be caused by an Uncontrollable
Force.

15.2 If either Party because of an Uncontrollable Force is rendered
wholly or partly unable to perform its obligations under this
Contract, the Party shall be excused from whatever performance
is affected by the Uncontrollable Force to the extent so
affected provided that:

(1) the nonperforming Party, within two weeks after the
occurrence of the Uncontrollable Force, gives the other
Party written notice describing the particulars of the
occurrence,

(2) the suspension of performance is of no greater scope and
of no longer duration than is required by the
Uncontrollable Force,

(3) the nonperforming Party uses its best efforts to remedy
its inability to perform (this subsection shall not
require the settlement of any strike, walkout, lockout
or other labor dispute on terms which, in the sole
judgment of the Party involved in the dispute, are
contrary

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to its interest. It is understood and agreed that the
settlement of strikes, walkouts, lockouts or other labor
disputes shall be at the sole discretion of the Party
having the difficulty.

(4) when the nonperforming Party is able to resume
performance of its obligations under this Contract, that
Party shall give the other Party written notice to that
effect.

15.3 In the event that either Party's ability to perform cannot be
corrected when the Uncontrollable Force is caused by the actions
or inactions of legislative, judicial or regulatory agencies or
other proper authority, this Contract may be amended to comply
with the legal or regulatory change which caused the
nonperformance. If a loss of Qualifying Facility status occurs
due to an Uncontrollable Force and Seller fails to make the
changes necessary to maintain its Qualifying Facility status,
the Seller shall compensate Edison for any economic detriment
incurred by Edison as a result of such failure.

16. NONDEDICATION OF FACILITIES

Neither Party, by this Contract, dedicates any part of its facilities
involved in this Project to the public or to the service provided under
the Contract, and such service shall cease upon termination of the
Contract.

17. PRIORITY OF DOCUMENTS

If there is a conflict between this document and any Appendix, the
provisions of this document shall govern.

Each Party shall notify the other immediately upon the determination of
the existence of any such conflict.

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18. NOTICES AND CORRESPONDENCE

All notices and correspondence pertaining to this Contract shall be in
writing and shall be sufficient if delivered in person or sent by
certified mail, postage prepaid, return receipt requested, to Seller as
specified in Section 1.1, or to Edison as follows:

Southern California Edison Company
Xxxx Xxxxxx Xxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Secretary

All notices sent pursuant to this Section 18 shall be effective when
received, and each Party shall be entitled to specify as its proper
address any other address in the United States upon written notice to
the other Party.

19. PREVIOUS COMMUNICATIONS

This Contract contains the entire agreement and understanding between
the Parties, their agents, and employees as to the subject matter of
this contract, and merges and supersedes all prior agreements,
commitments, representations, and discussions between the Parties. No
Party shall be bound to any prior obligations, conditions, or
representations with respect to the subject matter of this Contract.

20. NONWAIVER

None of the provisions of the Contract shall be considered waived by
either Party except when such waiver is given in writing. The failure of
either Edison or Seller to insist in any one or more instances upon
strict performance of any of the provisions of the Contract or to take
advantage of any of its rights hereunder shall not be construed as a
waiver of any such provisions or the relinquishment of any

-41-

such rights for the future, but the same shall continue to remain in
full force and effect.

21. SUCCESSORS AND ASSIGNS

Neither Party shall voluntarily assign its rights nor delegate its
duties under this Contract, or any part of such rights or duties,
without the written consent of the other Party, except in connection
with the sale or merger of a substantial portion of its properties. Any
such assignment or delegation made without such written consent shall be
null and void. Consent for assignment shall not be withheld
unreasonably. Such assignment shall include, unless otherwise specified
therein, all of Seller's rights to any refunds which might become due
under this Contract.

22. EFFECT OF SECTION HEADINGS

Section headings appearing in this Agreement are inserted for
convenience only, and shall not be construed as interpretations of text.

23. GOVERNING LAW

This Contract shall be interpreted, governed, and construed under the
laws of the State of California as if executed and to be performed
wholly within the State of California.

24. MULTIPLE ORIGINALS

This Contract is executed in two counterparts, each of which shall be
deemed an original.

SIGNATURES

IN WITNESS WHEREOF, the Parties hereto have executed this Contract this
22 of June, 1984.

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SOUTHERN CALIFORNIA EDISON COMPANY

By /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------
Xxxxxx X. Xxxxx, Xx.
Vice President

ZOND SYSTEMS, INC.

By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx
Vice President

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APPENDIX A

INTERCONNECTION FACILITIES AGREEMENT

SELLER OWNED AND OPERATED BASIS

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APPENDIX A

INTERCONNECTION FACILITIES - SELLER OWNED AND OPERATED FACILITY

A.l Seller shall design, purchase, construct, operate and maintain Seller
owned Interconnection Facilities at its sole expense. Edison shall have
the right to review the design as to the adequacy of the Protective
Apparatus provided. Any additions or modifications required by Edison
shall be incorporated by Seller.

A.2 Notwithstanding the provisions of Section 13, Seller, having elected to
own, operate, and maintain the Interconnection Facilities, shall accept
all liability and release Edison from and indemnify Edison against any
liability for faults or damage to Seller's Interconnection Facility, the
Edison electric system and the public as a result of the operation of
Seller's project, except that Edison shall not be indemnified for its
liability or loss resulting from its sole negligence or willful
misconduct.

A.3 Edison shall have the right to observe the construction of the
Interconnection Facilities, and inspect said facilities after
construction is completed at the Seller's expense.

A.4 Facilities which are deemed necessary by Edison for the proper and safe
operation of the Interconnection Facilities and which Seller desires
Edison to own and operate at Seller's expense shall be provided as
appendant facilities. Edison shall own, operate and maintain any
necessary appendant facilities which may be installed in connection with
the Interconnection Facilities at Seller's expense. Edison may, as it
deems necessary, modify the aforementioned facilities at Seller's
expense.

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A.5 Seller shall install at Seller's expense its portion of the appendant
facilities in accordance with Rule 21. Within 30 days after installation
is complete, Seller shall transfer ownership of the appendant facilities
to Edison in a manner acceptable to Edison.

A.6 Maintenance of facilities referred to in Section A.4 shall be paid by
Seller pursuant to the attached Application and Contract for
Interconnection Facilities Plus Operation and Maintenance.

A.7 To the extent that Xxxxxx xxxxx it necessary to effect the arrangements
contemplated by this Agreement, Edison may, from time to time, request
the Seller to design, install, operate, maintain, modify, replace,
repair or remove any or all of the Interconnection Facility. Such
equipment and/or Protective Apparatus shall be treated as
Interconnection Facilities and added to the Interconnection Facilities
Contract by amendment pursuant to Section A.4.

A.8 Edison shall have the right to review any changes in the design of the
Interconnection Facilities and recommend modification(s) to the design
as it deems necessary for proper and safe operation of the Project when
in parallel with the Edison electric system.

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ATTACHMENT TO APPENDIX A
------------------------

APPLICATION AND CONTRACT FOR INTERCONNECTION FACILITIES
PLUS OPERATION AND MAINTENANCE

The Seller hereby requests the Southern California Edison Company
(Edison) to provide the appendant facilities described on the last page hereof
and by this reference herein incorporated, hereinafter called "Interconnection
Facilities." Interconnection Facilities as defined and used herein are a group
of Added Facilities which have been designated as Interconnection Facilities, to
accommodate negotiation and preparation of contracts for parallel generation
projects. Interconnection Facilities, as are Added Facilities, shall be provided
in accordance with the applicable Tariff Schedules of Edison. Such
Interconnection Facilities are to be owned, operated and maintained by Edison.

In consideration of Edison's acceptance of this application, Seller
hereby agrees to the following:

1. Edison shall have the right to observe the construction of the
Interconnection Facilities and inspect and test said facilities after
construction is completed at the Seller's expense.

2. Seller shall pay a monthly charge for the Interconnection Facilities'
operation and maintenance in the amount of .9% of the added equipment
investment as determined by Edison and as entered by Edison on the last
page hereof. The monthly charge shall be adjusted periodically in
accordance with the pro-rata operation and maintenance charges for added
facilities pursuant to Rule No. 2.II 2b. The monthly charge may be based
upon estimated costs of the Interconnection Facilities and when the
recorded book cost of the Interconnection Facilities has been determined
by Edison, the charges shall be adjusted retroactively to the date when
service is first rendered by means of such

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Interconnection Facilities. Additional charges resulting from such
adjustment shall, unless other terms are mutually agreed upon, be
payable within thirty (30) days from the date of presentation of a xxxx
therefor. Any credits resulting from such adjustment will, unless other
terms are mutually agreed upon, be refunded upon demand of Seller.

3. Whenever a change is made in the Interconnection Facilities which
results in changes in the added equipment investment, the monthly charge
will be adjusted on the basis of the revised added equipment investment.
The cost of such change shall be payable by Seller within sixty (60)
days from the date of presentation of a xxxx therefor. The description
of the Interconnection Facilities will be amended by Edison on the last
page hereof to reflect any changes in equipment, installation and
removal cost, amount of added equipment investment, and monthly charge
resulting from any such change in the Interconnection Facilities or
adjustment as aforesaid.

4. The monthly charges payable hereunder shall commence upon the date when
said Interconnection Facilities are available for use but not before
service is first established and rendered through Edison's normal
facilities and shall first be payable when Edison shall submit the first
energy xxxx after such date and shall continue until the abandonment of
such Interconnection Facilities by Seller, subject to the provisions of
Paragraphs 3. and 4. hereof.

5. Seller agrees to utilize said Interconnection Facilities in accordance
with good operating practice and to reimburse Edison for damage to said
Facilities occasioned or caused by the Seller or any of his agents,
employees or licensees.

-48-

Failure so to exercise due diligence in the utilization of said
Interconnection Facilities will give Edison the right to terminate this
agreement.

6. This Application and Contract for Interconnection Facilities supplements
the appropriate application and contract(s) for electric service
presently in effect between Seller and Edison.

-49-

DATED: SELLER: Zond Systems, Inc.

WITNESS: BY: /s/ Xxxxxx X. Xxxxxxxx
--------------------- -----------------------------
Xxxxxx X. Xxxxxxxx
Vice President

Approved and Accepted for
SOUTHERN CALIFORNIA EDISON COMPANY Mail (Address) X.X. Xxx 000
Xxxxxxxx, XX 00000

By: /s/Xxxxxx X. Xxxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxx, Xx.
Vice President

-50-

SERVICE ADDRESS: Sections 33 and 34, Township 12 North, Range
14 West, SBB&M.

DATE APPLICANT DESIRES INTERCONNECTION FACILITIES

AVAILABLE: 05-01-85

DATE APPLICANT WILL BEGIN CONSTRUCTION OF THE GENERATING FACILITY:

January 1, 1985

DESCRIPTION OF INTERCONNECTION FACILITIES:

Time of use metering

TOTAL COST OF INTERCONNECTION FACILITIES*: ESTIMATED $6,100

ADDED INVESTMENT*: ESTIMATED $6,100

ADDED INVESTMENT: RECORDED BOOK COST $_______________

ESTIMATED INSTALLATION AND REMOVAL COST*: $-0-

DATE SERVICE FIRST RENDERED BY MEANS OF THE
INTERCONNECTION FACILITIES:_____________________

*Cost estimates are for information purposes only and are not binding unless
provided in writing by Edison pursuant to a written request by Seller.

-00-

XXXXXXXX X

FORECAST OF ANNUAL AS-AVAILABLE

CAPACITY PAYMENT SCHEDULE

-00-

XXXXXXXX XXXXXXXXXX EDISON COMPANY
LONG TERM STANDARD OFFER
CAPACITY PAYMENT SCHEDULE - FORECAST OF
AS AVAILABLE CAPACITY(1)

As Available Capacity(2)
Line No. Year ($/Kw-year)
---------- -------- ------------------------
1 1984 76
2 1985 81
3 1986 87
4 1987 94
5 1988 101
6 1989 109
7 1990 117
8 1991 126
9 1992 148
10 1993 158
11 1994 169

SEASONAL TIME OF DELIVERY

As Available Capacity(2)
Line No. Year Season Period ((cent)/KWh)
---------- -------- -------- ---------- -----------------------
1. 1984 Summer On-Peak 7.854
2. Mid-Peak 0.120
3. Off-Peak 0.000

4. Winter On-Peak 1.516
5. Mid-Peak 0.424
6. Off-Peak 0.022

----------

1 This forecast to be used in conjunction with Capacity Payment Option A.

2 The annual as-available capacity ($/kW-yr) will be converted to a seasonal
time-of-delivery ((cent)/kWh) value that is consistent with as-available
time-of-delivery rates currently authorized by the Commission for Avoided
As-Available Capacity.

* In subsequent years, the annual as-available capacity ($/kW-yr) will be
converted to a seasonal time-of-delivery ((cent)/kWh) value that is
consistent with as-available time-of-delivery rates currently authorized by
the Commission for Avoided As-Available Capacity.

-53-

APPENDIX C

FORECAST OF ANNUAL MARGINAL COST OF ENERGY

-54-

SOUTHERN CALIFORNIA EDISON COMPANY
LONG TERM STANDARD OFFER
ENERGY PAYMENT SCHEDULE - FORECAST OF ANNUAL MARGINAL
COST OF ENERGY(1)

Annual Marginal
Cost of Energy (2)
Line No. Year ((cent)/kWh-year)
---------- -------- -----------------------
1 1984 5.6
2 1985 5.7
3 1986 6.0
4 1987 6.4
5 1988 6.9
6 1989 7.6
7 1990 8.1
8 1991 8.6
9 1992 9.3
10 1993 10.1
11 1994 10.9

SEASONAL TIME OF DELIVERY

Annual Marginal
Cost of Energy *
Line No. Year Season Period ((cent)/kWh)
---------- -------- -------- ---------- -----------------------
1. 1984 Summer On-Peak 6.1
2. Mid-Peak 5.8
3. Off-Peak 5.5

4. Winter On-Peak 5.7
5. Mid-Peak 5.6
6. Off-Peak 5.5

7. Annual 5.6

----------

1 This forecast to be used in conjunction with Energy Payment Option 1.

2 The annual energy payments in the table will be converted to seasonal
time-of-delivery energy payment rates that are consistent with the
time-of-delivery rates currently authorized by the Commission for Avoided
Energy Cost Payments.

* In subsequent years, the annual energy payments in the table will be
converted to seasonal time-of-delivery energy payment rates that are
consistent with time-of- delivery energy payment rates currently authorized
by the Commission for Avoided Energy Cost Payments.

-55-

ZOND SYSTEMS, INC.

APPENDIX D

TARIFF RULE TOU-8

RULE 21

Schedule No. TOU-8

GENERAL SERVICE - LARGE
------- ------- -----

APPLICABILITY
-------------

Applicable to general service, including lighting and power.

This schedule is mandatory for all customers whose monthly maximum
demand exceeds 500 kW for any three months during the preceding 12 months. Any
customer whose monthly maximum demand has fallen below 450 kW for 12 consecutive
months may elect to take service on any other applicable schedule.

TERRITORY
---------

Within the entire territory served.

RATES
-----

Per Meter
Per Month
---------

Customer Charge:.............................................. $560.00

Demand Charge (to be added to Customer Charge):

All kW of on-peak billing demand, per kW.................... $5.05
Plus all kW of mid-peak billing demand, per kW.............. 0.65
Plus all kW of off-peak billing demand, per kW.............. No Charge

(Subject to Minimum Demand Charge. See Special Condition No. 6)

Energy Charge (to be added to Demand Charge):

All on-peak kWh, per kWh .................................. 7.939(cent)
Plus all mid-peak kWh, per kWh ............................ 6.617(cent)
Plus all off-peak kWh, per kWh ............................ 5.515(cent)

The above rates are subject to the Steel Surcharge Adjustment as set
forth in Special Condition No. 13.

For service on Santa Catalina Island, the above rates are subject to the
Catalina Energy Cost Balance Adjustment, as set forth in Special
Condition No. 14.

The Energy Charge includes the following Energy Charge Components.

(Continued)

Schedule No. TOU-8

GENERAL SERVICE - LARGE
------- ------- -----

(Continued)

ENERGY CHARGE COMPONENTS
------------------------
Per kWh
-------------------------------------
Base Rate: On-Peak Mid-Peak Off-Peak
------- -------- --------
All kWh ................................................... 2.327(cent) 2.327(cent) 2.327(cent)

Adjustment Rates:

Energy Cost Adjustment Billing Factor...................... 4.586(cent) 3.264(cent) 2.162(cent)
Annual Energy Rate......................................... 0.390(cent) 0.390(cent) 0.390(cent)
Conservation Load Management Adjustment Billing Factor..... 0.026(cent) 0.026(cent) 0.026(cent)
Electric Revenue Adjustment Billing Factor................. 0.040(cent) 0.040(cent) 0.040(cent)
Major Additions Adjustment Billing Factor.................. 0.492(cent) 0.492(cent) 0.492(cent)
Annual Major Additions Rate................................ 0.071(cent) 0.071(cent) 0.071(cent)
PUC Reimbursement Fee...................................... 0.007(cent) 0.007(cent) 0.007(cent)
----------- ----------- -----------

Total Adjustment Rates..................................... 5.612(cent) 4.290(cent) 3.188(cent)

The PUC Reimbursement Fee is described in Schedule No. RF-E. The Adjustment
Rates are described in Parts G, I, J, and L of the Preliminary Statement.

SPECIAL CONDITIONS
------------------

1. Time periods are defined as follows:

On-Peak: 1:00 p.m. to 7:00 p.m. summer weekdays except holidays
5:00 p.m. to 10:00 p.m. winter weekdays except holidays

Mid-Peak: 9:00 a.m. to 1:00 p.m. and 7:00 p.m. to 11:00 p.m. summer
weekdays except holidays
8:00 a.m. to 5:00 p.m. winter weekdays except holidays

Off-Peak: All other hours.

Off-peak holidays are New Year's Day,
Washington's Birthday, Memorial Day,
Independence Day, Labor Day, Veterans Day,
Thanksgiving Day, and Christmas.

When any holiday listed above falls on Sunday, the following Monday
will be recognized as an off-peak period. No change in off-peak will
be made for holidays falling on Saturday.

The summer season shall commence at 12:01 a.m. on the last Sunday in
April and continue until 12:01 a.m. of the last Sunday in October of
each year. The winter season shall commence at 12:01 a.m. on the last
Sunday in October of each year and continue until 12:01 a.m. of the
last Sunday in April of the following year.

2. Voltage: Service will be supplied at one standard voltage.

(Continued)

Schedule No. TOU-8

GENERAL SERVICE - LARGE
------- ------- -----

(Continued)

SPECIAL CONDITIONS (Continued)
------------------

3. Maximum Demand: Maximum demands shall be established for the on-peak,
mid-peak, and off-peak periods. The maximum demand for each period shall be the
measured maximum average kilowatt input indicated or recorded by instruments to
be supplied by the Company, during any 15-minute metered interval, but (except
for new customers or existing customers electing Contract Demand as defined in
these Special Conditions) not less than the diversified resistance welder load
computed in accordance with the section designated Welder Service in Rule No. 2.
Where the demand is intermittent or subject to violent fluctuations, a 5-minute
interval may be used.

4. Billing Demand: Separate billing demands for the on-peak, mid-peak, and
off-peak time periods shall be established for each monthly billing period. The
billing demand for each time period shall be the maximum demand for that time
period occurring during the respective monthly billing period. The billing
demand shall be determined to the nearest kW.

5. Contract Demand: A contract demand will be established by the Company,
based on applicant's demand requirements for any customer newly requesting
service on this schedule and for any customer of record on this schedule who
requests an increase or decrease in transformer capacity in accordance with Rule
No. 12 D. A contract demand arrangement is available upon request for all
customers of record on this schedule. The contract demand will be used only for
purposes of establishing the minimum demand charge for facilities required to
provide service under the rate and will not be otherwise used for billing
purposes. Contract demand is based upon the nominal kilovolt-ampere rating of
the Company's serving transformer(s) or the standard transformer size determined
by the Company as required to serve the customer's stated measurable kilowatt
demand, whichever is less and is expressed in kilowatts.

6. Minimum Demand Charge: Where a contract demand is established, the
monthly minimum demand charge shall be $1.00 per kilowatt of contract demand.

7. Excess Transformer Capacity: The transformer capacity in excess of a
customer's contract demand which is either required by the Company because of
the nature of the customer's load or requested by the customer. Excess
transformer capacity shall be billed at $1.00 per kVA per month.

8. Voltage Discount: The charges before adjustments will be reduced by 3%
for service delivered and metered at voltages of from 2 kV to 10 kV; by 4% for
service delivered and metered at voltages of from 11 kV to 50 kV; and by 5% for
service delivered and metered at voltages over 50 kV; except that when only one
transformation from a transmission voltage level is involved, a customer
normally entitled to a 3% discount will be entitled to a 4% discount.

(Continued)

Schedule No. TOU-8

GENERAL SERVICE - LARGE
------- ------- -----

(Continued)

SPECIAL CONDITIONS (Continued)
------------------

9. Power Factor Adjustment:
-----------------------

a. Service Delivered and Metered at 4 kV or Greater:
The charges will be adjusted each month for reactive demand. The
charges will be increased by 20 cents per kilovar of maximum
reactive demand imposed on the Company in excess of 20% of the
maximum number of kilowatts.

The maximum reactive demand shall be the highest measured maximum
average kilovar demand indicated or recorded by metering to be
supplied by the Company during any 15-minute metered interval in
the month. The kilovars shall be determined to the nearest unit.
A device will be installed on each kilovar meter to prevent
reverse operation of the meter.

b. Service Delivered and Metered at Less than 4 kV:
The charges will be adjusted each month for the power factor
as follows:

The charges will be decreased by 20 cents per kilowatt of measured
maximum demand and will be increased by 20 cents per kilovar of
reactive demand. However, in no case shall the kilovars used for
the adjustment be less than one-fifth the number of kilowatts.

The kilovars of reactive demand shall be calculated by multiplying
the kilowatts of measured maximum demand by the ratio of the
kilovar-hours to the kilowatthours. Demands in kilowatts and
kilovars shall be determined to the nearest unit. A ratchet device
will be installed on the kilovar-hour meter to prevent its reverse
operation on leading power factors.

10. Temporary Discontinuance of Service: Where the use of energy is
seasonal or intermittent, no adjustments will be made for a temporary
discontinuance of service. Any customer prior to resuming service within twelve
months after such service was discontinued will be required to pay all charges
which would have been billed if service had not been discontinued.

(Continued)

Schedule No. TOU-8

GENERAL SERVICE - LARGE
------- ------- -----

(Continued)

SPECIAL CONDITIONS (Continued)
------------------

11. Supplemental Visual Demand Meter: Subject to availability, and upon
written application by the customer, the Company will, within 180 days, supply
and install a Company-owned supplemental visual demand meter. The customer shall
provide the required space and associated wiring beyond the point of
interconnection for such installation. Said supplemental visual demand meter
shall be in parallel with the standard billing meter delineated in Special
Condition 3 above. The readings measured or recorded by the supplemental visual
demand meter are for customer information purposes only and shall not be used
for billing purposes in lieu of meter readings established by the standard
billing meter. If a meter having visual display capability is installed by
Edison as the standard billing meter, no additional metering will be installed
pursuant to this Special Condition.

One of the following types of supplemental visual demand meters will be
provided in accordance with provisions above at no additional cost to the
customer: Dial Wattmeter, Recording Wattmeter, or Paper-Tape Printing Demand
Meter.

If the customer desires a supplemental visual demand meter having
features not available in any of the above listed meters, such as an electronic
microprocessor-based meter, the Company will provide such a supplemental visual
demand meter subject to a monthly charge, if the meter and its associated
equipment have been approved for use by the Company. Upon receipt from the
customer of a written application the Company will design the installation and
will thereafter supply, install, and maintain the supplemental visual demand
meter subject to all conditions stated in the first and last paragraph of this
Special Condition. For purposes of computing the monthly charge, any such
supplemental visual demand meter and associated equipment shall be treated as
Added Facilities in accordance with Rule Xx. 0, Xxxxxxxxx X, Xxxxxxx 0 and 2 of
the tariff rules. Added investment for computing the monthly charge shall be
reduced by the Company's estimated total installed cost at the customer location
of the Paper Tape Printing Demand Meter offered otherwise herein at no
additional cost.

The Company shall have sole access for purposes of maintenance and repair
to any supplemental visual demand meter installed pursuant to this Special
Condition and shall provide all required maintenance and repair. Periodic
routine maintenance shall be provided at no additional cost to the customer.
Such routine maintenance includes changing charts, inking pens, making periodic
adjustments, lubricating moving parts and making minor repairs. Non-routine
maintenance and major repairs or replacement shall be performed on an actual
cost basis with the customer reimbursing the Company for such cost.

12. Contracts: An initial three-year facilities contract may be required
where applicant requires new or added serving capacity exceeding 2,000 kVA.

13. Steel Surcharge Adjustment: The rates above are subject to adjustment
as provided in Part K of the Preliminary Statement, at a billing factor of
0.049(cent) per kWh.

14. Catalina Energy Cost Balance Adjustment: For service on Santa Catalina
Island, the rates above are subject to adjustment as provided in Part G of the
Preliminary Statement, at a billing factor of 2.593(cent) per kWh.

Rule No. 21

COGENERATION AND SMALL POWER PRODUCTION
------------ --- ----- ----- ----------

INTERCONNECTION STANDARDS
--------------- ---------

A. General. This rule sets forth requirements and conditions for
interconnected non Company-owned generation where such generation may be
connected for (1) parallel operation with the service of the Company or (2)
isolated operation with standby or breakdown service provided by the
Company. For purposes of this rule, the interconnecting entity shall be
designated the Producer.

B. Conditions.

1. An agreement executed by the Company and the Producer shall be
required for interconnected service. Terms for the purchase of power
by the Company if applicable, shall be included therein.

2. Interconnection with the Company's system may not be made until and
unless the Company has determined that the interconnection complies
with the design and operating requirements set forth herein.

3. Where interconnection protective equipment is owned, operated and
maintained by the Producer, the Producer shall be responsible for
damages to the Company or to others arising out of the misoperation or
malfunction of the Producer-owned equipment.

4. The Producer is solely responsible for providing adequate protection
for the Producer's facilities interconnected with the Company's
system.

C. Design and Operating Requirements. Each generation facility which is or can
be connected to the Company's electric system shall be designed and
operated so as to prevent or protect against the following adverse
conditions on the Company's system. These conditions can cause electric
service degradation, equipment damage, or harm to persons:

1. Inadvertent and unwanted re-energization of a utility dead line or
bus.

2. Interconnection while out of synchronization.

3. Overcurrent.

4. Utility system load imbalance.

5. Ground faults.

6. Generated alternating current frequency outside permitted safe limits.

7. Voltage generated outside permitted limits.

8. Poor power factor.

9. Harmful wave forms.

The necessary protective equipment (relays, switchgear, transformers, etc.)
can be provided by the Producer or by the Company.

Explanatory information, operating rules and guidelines for meeting the
above requirements for small (below 100 kW), medium (100-1000 kW), and
large (above 1000 kW) facilities are contained in the Company's guidelines
for cogenerators and small power producers. Copies of said guidelines are
available from the Company.

D. Interconnection Facilities.

1. Interconnection facilities include all required means, and apparatus
installed, to interconnect the Producer's generation with the
Company's system. Where the Producer desires to sell power to the
Company, interconnection facilities include also all required means,
and apparatus installed, to enable the Company to receive power
deliveries from the Producer. Interconnection facilities may include,
but are not limited to:

(Continued)

Rule No. 21

COGENERATION AND SMALL POWER PRODUCTION
------------ --- ----- ----- ----------

INTERCONNECTION STANDARDS
--------------- ---------

(Continued)

D. Interconnection Facilities. (Continued)

a. Connection, transformation, switching, communications, control,
protective and safety equipment; and

b. Any necessary reinforcements and additions to the Company's
system by the Company.

2. Where interconnection facilities are to be installed for the
Producer's use as added facilities, the Producer shall advance to the
Company the installed cost of the added facilities. At the Producer's
option, and where such Producer's generation is a qualifying facility
and the Producer has established credit worthiness to the Company's
satisfaction, the Company shall finance those added facilities it
deems to be removable and reusable equipment. Such equipment shall
include, but not be limited to, transformation, disconnection, and
metering equipment. Added facilities provided under either of the
foregoing arrangements are subject to the monthly charge as set forth
in Section H of the Company's Rule No. 2. Description of Service, on
file with and authorized by the Commission.

3. When a Producer wishes to reserve facilities paid for by the Producer,
but idled by an energy sale conversion, the Company shall impose a
special facilities charge reimbursing the Company for costs related to
its operation and maintenance of the facility. When a Producer no
longer needs facilities for which it has paid, the Producer shall, at
a minimum, receive from the Company credit for the net salvage value
of the facilities dedicated to Company use. If the Company is able to
make use of these facilities to serve other customers, the Producer
shall receive the fair market value of the facilities determined as of
the date the Producer either decides no longer to use the facilities
or fails to pay the required maintenance fee.

4. The Producer shall be responsible for the costs of exploring the
feasibility of a project or its interconnection with the Company
system, including reasonable advance charges imposed by the Company
for feasibility studies.

5. An interconnection line study for any Producer shall take no more than
one year to complete.

6. The Producer shall be responsible for costs of telemetering and safety
checks except to the extent that, under the Company's effective
tariffs, a comparable customer would not be similarly charged.

7. The Company shall, upon request, give the Producer a binding estimate
for line extension and interconnection costs; however, such estimates
shall be in effect for a period not to exceed one year from the date
provided. A reasonable breakdown of cost estimates shall also be
provided in a form sufficiently detailed and understandable by the
Producer.

8. The Company shall have the right to inspect the Producer's
interconnection facilities prior to the commencement of parallel
operations and require modifications as necessary.

9. The site of interconnection facilities shall be accessible to Company
personnel.

E. Interconnection Reinforcement and/or Additions. The Company's effective
tariffs governing interconnection costs and added or special facilities
agreements shall be applied to line and system reinforcement and/or
additions. In addition, the following shall apply:

1. A Producer shall pay for new or additional line capacity if necessary
for the Company to receive the Producer's power.

2. The costs of any line reinforcement and/or addition undertaken at the
option of the Company to serve additional future customers or
Producers shall be borne by the Company.

(Continued)

Rule No. 21

COGENERATION AND SMALL POWER PRODUCTION
------------ --- ----- ----- ----------

INTERCONNECTION STANDARDS
--------------- ---------

(Continued)

E. Interconnection Reinforcement and/or Additions. (Continued)

3. For two or more Producers seeking to use an existing line, a first
come, first served approach shall be used. This approach shall require
that the first Producer to request an interconnection shall, pursuant
to written agreement, have the right to use the existing line and
shall incur no obligation for costs associated with future line
capacity needed to accommodate other Producers or customers. The
Company's Standard Offer and/or power purchase agreements for
cogeneration and small power production facilities shall specify the
date by which the Producer must begin construction. If that date
passes and construction has not commenced, the Producer shall be given
30 days to correct the deficiency after receiving a reminder from the
Company that the construction start-up date has passed. If
construction has not commenced after the 30-day corrective period, the
Company shall have the right to withdraw its commitment to the first
Producer and offer the right to interconnect on the existing line to
the next Producer in order. If two Producers establish the right of
first-in-time simultaneously, the two Producers shall share the costs
of any additional line capacity necessary to facilitate their
cumulative capacity requirements. Costs shall be shared based on the
relative proportion of capacity each Producer will add to the line.

4. The applicable Company tariff provisions shall be applied to a
Producer who pays for interconnection reinforcement and/or additions
that later accommodate a second Producer as those provisions which
would be applied to a comparable Company customer.

5. The Producer shall be responsible for the costs of only those future
system alterations which are necessary to maintain the California
Public Utilities Commission's adopted interconnection standards for
the Producer's particular interconnection facilities. The relevant
interconnection standards shall be those in effect at the time the
contract is signed. Should such alterations not be directly required
by, or beneficial to the Producer, the Producer shall be treated like
any other customer on the Company's system.

F. Metering.

1. If the Producer desires to sell electric power to the Company, the
Company shall provide, own and maintain at the Producer's expense all
necessary meters and associated equipment to be utilized for the
measurement of energy and capacity for determining the Company's
payment to the Producer pursuant to an applicable agreement.

2. For purposes of monitoring generator operation and determination of
standby charges, the Company shall have the right to install
generation metering at the Producer's expense. Where the Producer's
generation is 10 MW or greater, telemetering equipment may also be
required at the Producer's expense.

3. The Producer shall provide, at no expense to the Company, a suitable
location for all meters and associated equipment in accordance with
Rule No. 16.

4. Where necessary the Company and the Producer shall agree on an
appropriate compensation method for transformer losses as specified in
the agreement.

5. The Company shall install a ratchet device so as to prevent reverse
operation on the meter(s) recording power provided by the Company, and
where appropriate in each of the following cases on, (i) the meter(s)
recording reactive demand imposed on the Company's electric system,
and (ii) the meter(s) recording power purchased by the Company.

6. Provision for meter tests and adjustments of bills or payments to the
Producer for meter error shall be consistent with Rule No. 17.

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