Federal Energy Regulatory Commission€¦ · Federal Energy Regulatory Commission 888 First Street ... (“Amended IFA”) ... The Sierra Power Terra Bella generating facility is

Regulation

P.O. Box 800 2244 Walnut Grove Ave. Rosemead, CA 91770

Director FERC Rates & Regulation

July 24, 2012

Ms. Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, DC 20426

Dear Ms. Bose:

Pursuant to Section 35.13 of the Federal Energy Regulatory Commission’s

(“Commission” or “FERC”) regulations under the Federal Power Act (18 C.F.R. §

35.13), Southern California Edison Company (“SCE”) tenders for filing an amended

Interconnection Facilities Agreement (“Amended IFA”) and an amended Service

Agreement for Wholesale Distribution Service (“Amended Service Agreement”) between

SCE and Sierra Power Corporation (“Sierra Power”) (collectively “Parties”), Service

Agreement Nos. 68 and 69, respectively, under SCE’s Wholesale Distribution Access

Tariff (“WDAT”), FERC Electric Tariff, Volume No. 5.

The documents submitted with this filing consist of this letter of transmittal and

all attachments hereto, and the Amended IFA and the Amended Service Agreement in

both clean and redline formats.

Background

On July 31, 2002, SCE filed an unexecuted Interconnection Facilities Agreement

(“IFA”) and WDAT Service Agreement (together, the “Agreements”) with the

Commission. The Service Agreement provides for Distribution Service1 for Sierra

Power’s Terra Bella generating facility, located in Terra Bella, California, for the

delivery of energy to the California Independent System Operator Corporation’s 1 All capitalized terms used herein, and not otherwise defined, shall have the meanings ascribed to such terms in the Amended IFA.

Ms. Kimberly D. Bose, Secretary Federal Energy Regulatory Commission Page 2 July 24, 2012 (“CAISO”) grid at SCE’s Vestal Substation (“Project”). The IFA provides the terms and

conditions for SCE to provide interconnection; for SCE to own, operate and maintain the

Interconnection Facilities; for SCE to engineer, design, construct, install, own, operate

and maintain any Capital Additions thereto; and for Sierra Power to pay for such service,

Interconnection Facilities and Capital Additions.

The Agreements were accepted for filing by the Commission by a letter order

dated September 27, 2002, rendered in Docket No. ER02-2391-000. SCE began

providing interconnection and Distribution Service to the Project effective July 26, 2002.

The Agreements are scheduled to terminate on July 26, 2012. On July 14, 2011,

Sierra Power requested to extend the life of the Agreements by an additional five years.

Amended Agreements

The Amended IFA reflects: (i) updated recitals to specify the reasons for

amending the IFA; (ii) updates to the definition of Applicable Reliability Council,

Applicable Reliability Standards, and North American Electric Reliability Corporation;

(iii) addition of terms including Balancing Authority, Balancing Authority Area, Point of

Change of Ownership, and Point of Interconnection; and (iii) updated one line diagram to

reflect the Point of Change of Ownership and Point of Interconnection. The Amended

Service Agreement reflects: (i) the current WDAT Service Agreement now in effect as

filed at FERC; (ii) the amended termination date; and (iii) updated contact information.

A copy of the letter agreement memorializing the Parties agreement to the

Amended Agreements is provided as Attachment A to this filing letter.

Ms. Kimberly D. Bose, Secretary Federal Energy Regulatory Commission Page 3 July 24, 2012 eTariff Filing Changes

As a result of converting from the paper, sheet-based document to a whole

document format in the eTariff submission process, SCE made certain formatting

changes to the Amended IFA and Amended Service Agreement as described below.

Item Description of Change

1 Order No. 614 headers and footers have been removed from all pages of the

Amended Agreements.

2 The requirements on page 7 of the Implementation Guide have been added to the

title pages.

3 Page numbers in the Table of Contents have been updated in the Amended IFA.

Waiver

SCE respectfully requests, pursuant to Section 35.11 (18 C.F.R. § 35.11) of the

Commission’s regulations, waiver of the 60-day prior notice requirements specified in

Section 35.3 (18 C.F.R. § 35.3), and requests the Commission to assign an effective date

of July 26, 2012, to the Amended IFA and Amended Service Agreement. Such waiver

would be consistent with the Commission’s policy set forth in Central Hudson Gas &

Electric Corp. et al., 60 FERC ¶ 61,106 (1992), reh’g denied, 61 FERC ¶ 61,089 (1992),

that waiver of the 60-day prior notice requirement will generally be granted when the

filing has no rate impact. In order to ensure continuity of service, the Amended IFA and

Amended Service Agreement should be made effective on July 26, 2012, which is the

day that the IFA is scheduled to terminate. The granting of this waiver will not have any

impact on SCE’s other rate schedules.

Other Filing Requirements

No expenses or costs included in the rates tendered herein have been alleged or

judged in any administrative or judicial proceeding to be illegal, duplicative, or

FEDERAL ENERGY REGULATORY COMMISSION

Mailing List

NAME ADDRESS Public Utilities Commission Frank Lindh, General Counsel Harvey Y. Morris, General Counsel State of California Legal Division [email protected] [email protected]

State Building 505 Van Ness Avenue San Francisco, California 94102

Sierra Power Corporation Attn: Kent Duysen [email protected]

9000 Road 234 Terra Bella, California 93270

ATTACHMENT A

Letter Agreement

Title Page

Southern California Edison Company FERC FPA Electric Tariff Tariff Title: Wholesale Distribution Access Tariff Tariff Record Title: First Revised Service Agreement No. 68

INTERCONNECTION FACILITIES AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA EDISON COMPANY

AND

SIERRA POWER CORPORATION

Contract Effective Date: 07/26/2002 Tariff Record Proposed Effective Date: 7/26/2012 905.68.5 Version Number: 0.0.0 WDT118 Option Code: A

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INTERCONNECTION FACILITIES AGREEMENT BETWEEN SOUTHERN CALIFORNIA EDISON COMPANY

AND SIERRA POWER CORPORATION

TABLE OF CONTENTS

1. Parties .............................................................................................................................................2 2. Recitals ...........................................................................................................................................2 3. Agreement ......................................................................................................................................3 4. Definitions .....................................................................................................................................3 5. Effective Date and Term ................................................................................................................5 6. Agreement Pursuant to the WDAT ................................................................................................5 7. Creditworthiness ............................................................................................................................5 9. Capital Additions To Interconnection Facilities ............................................................................6 10. Removal Of Interconnection Facilities ......................................................................................7 11. Charges ......................................................................................................................................7 12. Billing and Payment ...................................................................................................................7 13. Billing and Payment Notification ..............................................................................................8 14. Disputes .....................................................................................................................................9 15. Audits .........................................................................................................................................9 16. Operating Representatives .........................................................................................................9 17. Regulatory Authority .................................................................................................................9 18. No Dedication Of Facilities .....................................................................................................10 19. No Third Party Rights ..............................................................................................................10 20. Relationship Of Parties ............................................................................................................10 21. Waivers ....................................................................................................................................10 22. Governing Law ........................................................................................................................10 23. Notices .....................................................................................................................................10 24. Severability ..............................................................................................................................10 25. Entire Agreement .....................................................................................................................11 26. Ambiguities ..............................................................................................................................11 27. Signature Clause ......................................................................................................................12 Exhibit B ..............................................................................................................................................15 Exhibit C ..............................................................................................................................................16

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1. Parties:

The Parties to this Southern California Edison Company – Sierra Power Corporation Interconnection Facilities Agreement are Southern California Edison Company (“SCE”), a California corporation, and Sierra Power Corporation (“Sierra Power”), a California corporation, hereinafter sometimes referred to individually as “Party” and collectively as “Parties.”

2. Recitals:

This Agreement is made with reference to the following facts, among others: 2.1. SCE is a California public utility engaged in the business of generating and transmitting

electric energy in the States of Arizona, California, Nevada, and New Mexico. SCE is further engaged in the business of distributing such energy in the State of California.

2.2. Sierra Power is a California Corporation that owns the Terra Bella generating facility, which generates electricity from biomass.

2.3. The Sierra Power Terra Bella generating facility is a qualifying facility for the purposes of the Public Utility Regulatory Policies Act of 1978, as amended, and is self certified as a Qualifying Facility.

2.4. Sierra Power and SCE executed a CPUC-jurisdictional Power Purchase Contract on December 18, 1984. The Power Purchase Contract as amended obligated SCE to purchase up to 7.5 MW of firm capacity, 1.875 MW of as-available capacity and energy generated from a nominal 9.375 MVA nameplate generator for the 30-year term of the Power Purchase Contract. In 1994, the Parties entered into an agreement to terminate the Power Purchase Contract.

2.5. SCE's and Sierra Power's electrical systems are interconnected via the 12 kV Zion circuit out of SCE's Terra Bella Substation. Interconnection facilities were constructed by SCE to interconnect Sierra Power's Terra Bella generating facility with SCE's Distribution System. Such interconnection facilities are owned, operated and maintained by SCE.

2.6. Sierra Power paid the annual costs of SCE's ownership, operation, and maintenance of those facilities constructed by SCE to accommodate its generating facility under the Power Purchase Contract and associated interconnection facilities agreement. The charge for such facilities was based on SCE's rate most recently adopted by the CPUC for application to retail customers for SCE-financed added facilities. This added facilities rate is based on an average, levelized cost recovery methodology adopted by the CPUC.

2.7. Pursuant to SCE’s WDAT, Sierra Power submitted an application to SCE for 9.0 MW of wholesale Distribution Service from Sierra Power's Terra Bella generating facility to the ISO Grid at SCE’s Vestal Substation for a period of one (1) year.

2.8. Sierra Power and SCE executed an interconnection facilities agreement and a WDAT service agreement on March 1, 2001. The interconnection facilities agreement specified the terms for SCE to own, operate and maintain the Interconnection Facilities and for Sierra Power to pay SCE for such Interconnection Facilities. The service agreement specified the terms for SCE to provide and for Sierra Power to receive Distribution Service from the Point of Interconnection to the ISO Grid. On March 6, 2002, the interconnection facilities agreement and service agreement terminated.

2.9. Pursuant to SCE’s WDAT, Sierra Power submitted a new application to SCE for 9.0 MW of wholesale Distribution Service from Sierra Power's Terra Bella generating facility to the ISO

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Grid at SCE’s Vestal Substation for a period of ten (10) years. 2.10. The Parties entered into this Agreement on July 26, 2002 to specify the terms for SCE to own,

operate and maintain the Interconnection Facilities and engineer, design, construct, install, own, operate and maintain any Capital Additions thereto required for SCE to provide Distribution Service to Sierra Power, and payment by Sierra Power to SCE for said Interconnection Facilities and Capital Additions.

2.11. This Agreement implements wholesale Distribution Service under SCE's WDAT in connection and concurrent with that certain Service Agreement for Wholesale Distribution Service between the Parties.

2.12. On March 14, 2003 the Pad Mounted Auto Re-closure equipment (“A/R Equipment”) failed. SCE replaced the damaged equipment and placed it into service on June 1, 2003.

2.13. In November, 2006 the A/R Equipment failed again. SCE replaced the damaged equipment on November 14, 2006.

2.14. On January 27, 2009, the Parties entered into a letter agreement to 1) amend this Agreement to show the actual recorded costs for the facilities described in Section 2.12 and 2.13; 2) provide for SCE financing for such facilities; and 3) allow for the inclusion of NERC reliability requirements for connected generators.

2.15. On August 31, 2009, the Parties entered into a letter agreement to 1) amend the definition of Capital Additions Charge to reinstate use of Customer-Financed Monthly Rate, 2) amend this Agreement to restore the Customer-Financed Monthly Rate for future Capital Additions, and 3) make certain other minor modifications to clarify the terms for future Capital Additions.

2.16. Following the execution of this Agreement, this Agreement was amended to incorporate the appropriate NERC compliance language to ensure that the Parties understand their respective obligations under the NERC compliance standards currently in effect. Such language is incorporated into this Agreement.

3. Agreement:

In consideration of the premises and the mutual covenants and agreements contained herein, the Parties agree as follows:

4. Definitions:

All terms with initial capitalization not otherwise defined herein shall have the meanings assigned to them in SCE’s WDAT as that Tariff may be amended from time to time. The following terms, when used herein with initial capitalization, whether in the singular or the plural, shall have the meanings specified: 4.1. Accounting Practice: Generally accepted accounting principles and practices applicable to

electric utility operations. 4.2. Agreement: This Interconnection Facilities Agreement between Southern California Edison

Company and Sierra Power Corporation. 4.3. Applicable Laws and Regulations: All duly promulgated applicable federal, state and local

laws, regulations, rules, ordinances, codes, decrees, judgments, directives, or judicial or administrative orders, permits and other duly authorized actions of any Governmental Authority.

4.4. Applicable Reliability Council: The Western Electricity Coordinating Council (“WECC”), or its successor organization.

4.5. Applicable Reliability Standards: The requirements and guidelines of NERC, the Applicable Reliability Council, and the Balancing Authority Area of SCE’s Distribution System to which

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the Sierra Power Facilities are directly interconnected, including requirements adopted pursuant to Section 215 of the Federal Power Act.

4.6. Balancing Authority: The responsible entity that integrates resource plans ahead of time, maintains load-interchange-generation balance within a Balancing Authority Area, and supports interconnection frequency in real time.

4.7. Balancing Authority Area: The collection of generation, transmission, and loads within the metered boundaries of the Balancing Authority. The Balancing Authority maintains load-resource balance within this area.

4.8. Capital Additions: Any Units of Property which are added to the Interconnection Facilities; the enlargement, modification or betterment of any Units of Property constituting a part of the Interconnection Facilities; and the replacement of any Units of Property constituting a part of the Interconnection Facilities, irrespective of whether such replacement constitutes an enlargement, modification or betterment of that which it replaces, the costs of which additions, betterments, modifications, enlargements, and replacements in accordance with Accounting Practice would be capitalized and have not previously been included in the Interconnection Facilities Cost. The Capital Additions are specified in Exhibit C.

4.9. Capital Additions Cost: All costs, excluding ITCC and One-Time Costs, determined by SCE to be associated with the design, engineering, procurement, construction and installation of Capital Additions. The Capital Additions Cost is provided in Exhibit C.

4.10. CPUC: The California Public Utilities Commission, or its regulatory successor. 4.11. Capital Additions Charge: The monthly charge to Sierra Power to recover the revenue

requirements for Capital Additions, calculated as the product of the Customer-Financed Monthly Rate and the Capital Additions Cost. The Capital Additions Charge is provided in Exhibit C.

4.12. Customer-Financed Monthly Rate: The rate most recently adopted by the CPUC for application to SCE’s retail electric customers for customer financed added facilities, which does not compensate SCE for replacement of added facilities. The currently-effective Customer-Financed Monthly Rate is stated in Exhibit C.

4.13. FERC: Federal Energy Regulatory Commission, or its regulatory successor. 4.14. Interconnection Facilities: Facilities, as specified in Exhibit A and as shown in Exhibit B,

constructed by SCE to interconnect the Sierra Power Facilities to the Distribution System. 4.15. Governmental Authority: Any federal, state, local or other governmental regulatory or

administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, or other governmental authority having jurisdiction over the Parties, their respective facilities, or the respective services they provide, and exercising or entitled to exercise any administrative, executive, police, or taxing authority or power; provided, however, that such term does not include Sierra Power, SCE, or any affiliate thereof.

4.16. Interconnection Facilities Charge: The monthly charge to Sierra Power to recover the revenue requirements for Interconnection Facilities, calculated as the product of the SCE-Financed Monthly Rate and the Interconnection Facilities Cost. The Interconnection Facilities Charge is provided in Exhibit A.

4.17. Interconnection Facilities Cost: All costs determined by SCE to be associated with the design, engineering, procurement, construction and installation of the Interconnection Facilities, as may be adjusted pursuant to Section 12.1.4.3. The Interconnection Facilities Cost is provided in Exhibit A.

4.18. ITCC: The Income Tax Component of Contribution specified in the Preliminary Statement, Part M of SCE’s tariff on file with the CPUC, as applicable to the Capital Additions Cost.

4.19. NERC: North American Electric Reliability Corporation, or its successor organization. 4.20. One-Time Costs: All costs determined by SCE to be associated with the installation of Capital

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Additions which are not capitalized in accordance with Accounting Practice. 4.21. Point of Change of Ownership: The point, as set forth in Exhibit B to this Agreement, where

SCE’s Interconnection Facilities connect to the Sierra Power Facilities. 4.22. Point of Interconnection: The point, as set forth in Exhibit B to this Agreement, where the

Interconnection Facilities connect to SCE’s Distribution System. 4.23. SCE-Financed Monthly Rate: The rate most recently adopted by the CPUC for application to

SCE’s retail electric customers for added facilities, which does not compensate SCE for replacement of added facilities. The currently-effective SCE-Financed Monthly Rate is stated in Exhibit A.

4.24. Service Agreement: The Service Agreement For Wholesale Distribution Service between the Parties executed concurrently herewith.

4.25. Sierra Power Facilities: All equipment and facilities comprising the Sierra Power Terra Bella generating facility, as provided by Sierra Power in its WDAT application, including but not limited to one 9,375 kVA synchronous generator, one 10,000 kVA autotransformer, meters and metering equipment and appurtenant equipment.

4.26. Units of Property: As described in FERC's “List of Units of Property for Use in Connection with Uniform System of Accounts Prescribed for Public Utilities and Licensees” in effect as of the date of this Agreement, and as such list may be amended from time to time.

4.27. Vestal Substation: SCE’s 220/66 kV substation located at Famosa-Porterville Hwy., in Richgrove, California.

4.28. WDAT: SCE's Wholesale Distribution Access Tariff. 4.29. WECC: The Western Electricity Coordinating Council or its successor.

5. Effective Date and Term:

5.1. This Agreement shall be effective upon the later of (i) date of execution, or (ii) upon acceptance for filing by FERC without suspension; provided however, that if upon such filing the FERC enters into a hearing to determine whether this Agreement is just and reasonable, this Agreement shall not become effective until the date when an order no longer subject to judicial review has been issued by FERC determining this Agreement to be just and reasonable without changes or new conditions unacceptable to either Party.

5.2. This Agreement shall terminate on the earlier of (i) the termination date of the Service Agreement, or (ii) the date specified by Sierra Power upon 180 days advance written notice to SCE.

5.3. Any obligations of one Party to the other, including payment obligations, as a result of this Agreement, which accrued prior to or as a result of termination of this Agreement, shall survive termination.

5.4. If Sierra Power has given notice of termination and a filing with FERC is required to terminate this Agreement, Sierra Power shall support such filing before the FERC if requested by SCE.

6. Agreement Pursuant to the WDAT:

This Agreement provides terms regarding Interconnection Facilities associated with wholesale Distribution Service pursuant to the WDAT. Accordingly, the Interconnection Facilities associated with the wholesale Distribution Service provided to Sierra Power, and Sierra Power's use of and payment for said Interconnection Facilities, are subject to the provisions of the WDAT and the Service Agreement, as those provisions may from time to time be modified.

7. Creditworthiness:

SCE may require Sierra Power to provide and maintain in effect during the term of this Agreement,

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an unconditional and irrevocable letter of credit in a form reasonably acceptable to SCE as security to meet its responsibilities and obligations under the WDAT, or an alternative form of security proposed by Sierra Power and acceptable to SCE, and consistent with commercial practices established by the Uniform Commercial Code, that protects SCE against the risk of non-payment.

8. Interconnection Facilities:

8.1. The maximum capacity of the Interconnection Facilities made available by SCE to Sierra Power for the purpose of interconnecting to SCE's electrical system and delivering energy and other services to the ISO under this Agreement shall be 9.0 MW. Sierra Power acknowledges that if Sierra Power wishes to increase the amount of interconnection capacity provided pursuant to this Agreement, Sierra Power shall be required to submit a new Application for Interconnection in accordance with the terms and conditions of the WDAT.

8.2. The costs associated with any mitigation measures required to third party transmission systems resulting from the interconnection of the Sierra Power Facilities to SCE’s electrical system are not reflected in this Agreement. Such costs, if any, shall be the sole responsibility of Sierra Power.

8.3. Each Party shall comply with Applicable Reliability Standards and the Applicable Reliability Council requirements. Each Party shall provide to the other Party all information that may reasonably be required by the other Party to comply with Applicable Laws and Regulations and Applicable Reliability Standards.

8.4. Neither Party’s facilities shall cause excessive voltage flicker or introduce excessive distortion to the sinusoidal voltage or current waves as defined by ANSI Standard C84.1-1989, in accordance with IEEE Standard 519, or any applicable superseding electric industry standard or any alternative Applicable Reliability Standard or Applicable Reliability Council standard. In the event of a conflict among ANSI Standard C84.1-1989, or any applicable superseding electric industry standard, or any alternative Applicable Reliability Standard or Applicable Reliability Council standard, the alternative Applicable Reliability Standard or Applicable Reliability Council standard shall control.

8.5. Sierra Power shall comply with all Applicable Reliability Standards for the Sierra Power Facilities. SCE will not assume any responsibility for complying with mandatory reliability standards for such facilities and offers no opinion whether Sierra Power must register with NERC. Such determination is the responsibility of Sierra Power. If required to register with NERC, Sierra Power shall be responsible for complying with all Applicable Reliability Standards for the Sierra Power Facilities up to the Point of Change of Ownership as described in Exhibit B of this IFA.

8.6. Sierra Power shall cause the Sierra Power Facilities to participate in ISO congestion management. SCE is aware that the Sierra Power Facilities will compete with other market generation for available transmission capacity in accordance with ISO protocols.

9. Capital Additions To Interconnection Facilities:

9.1. SCE shall engineer, design, construct, install, own, operate and maintain all Capital Additions. 9.2. Except as otherwise provided in Section 9.3, whenever Capital Additions to the

Interconnection Facilities are required by SCE pursuant to Good Utility Practice (which may include compliance with system or regulatory requirements), Sierra Power shall bear the cost responsibility for such Capital Additions. SCE shall bill Sierra Power for the estimated Capital Additions Cost, including ITCC, and any associated One-Time Costs in accordance with Section 12. SCE shall not be required to commence any work on any Capital Additions until such bill is paid by Sierra Power in accordance with Section 12.

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9.3. In the event that Capital Additions are required to the Interconnection Facilities in order to benefit SCE, or because of damage caused by negligence or willful misconduct of SCE, Sierra Power shall not bear cost responsibility for such Capital Additions; no adjustment will be made to the Interconnection Facilities Cost and no One-Time Costs will be charged to Sierra Power for such Capital Additions.

10. Removal Of Interconnection Facilities:

Upon termination of this Agreement for any reason whatsoever, SCE will remove the Interconnection Facilities from service to Sierra Power.

11. Charges:

11.1. Sierra Power shall pay to SCE, in accordance with Section 12, the following charges with respect to the Interconnection Facilities, Capital Additions and this Agreement: (a) Interconnection Facilities Charges; (b) One-Time Costs; (c) Capital Additions Cost pursuant to Section 9; (d) ITCC; (e) Capital Additions Charge; and (f) any reimbursable FERC fees pursuant to Section 17.3.

11.2. The Interconnection Facilities Cost, One-Time Costs, ITCC and Capital Additions Cost shall be compiled in accordance with established Accounting Practice.

11.3. If, during the term of this Agreement, the Interconnection Facilities and Capital Additions are utilized to provide service to another customer, the charges due hereunder shall be adjusted to appropriately reflect such service based on SCE's costs allocation principles in effect at such time and shall be subject to FERC approval.

12. Billing and Payment:

12.1. Billing Procedure. 12.1.1. Except as otherwise specifically provided herein, commencing on or following the

effective date of this Agreement, SCE will render bills to Sierra Power for charges under this Agreement, and Sierra Power shall pay such bills, in accordance with the Billing and Payment provisions of the WDAT.

12.1.2. Commencing on or following the effective date of this Agreement, SCE will render bills to Sierra Power for the Interconnection Facilities Charge.

12.1.3. The Interconnection Facilities Charge for the first and last month of service hereunder shall be pro-rated based on the number of days in which service was provided during said months.

12.1.4. Prior to commencing any work on any Capital Additions in accordance with Section 9, SCE will bill Sierra Power for the Capital Additions Cost, associated ITCC, and associated One-Time Costs. Such billing shall initially be based on SCE's cost estimates and shall be subject to later adjustment pursuant to Sections 12.1.4.1 and 12.1.4.2. 12.1.4.1. If the amount paid for the estimated Capital Additions Cost, associated

ITCC and associated One-Time Costs is less than the actual recorded Capital Additions Cost, associated ITCC and associated One-Time Costs, SCE will bill Sierra Power for the difference between the amount previously paid by Sierra Power and the actual recorded costs, without interest, on the next regular billing.

12.1.4.2. If the amount paid for the estimated Capital Additions Cost, associated ITCC and associated One-Time Costs, is greater than the actual

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recorded Capital Additions Cost, associated ITCC and associated One-Time Costs, SCE will refund to Sierra Power the difference between the amount previously paid by Sierra Power and actual recorded costs, without interest, on the next regular billing.

12.1.4.3. If certain Interconnection Facilities are removed to accommodate such Capital Additions and such removal results in a change in the Interconnection Facilities Cost, the Interconnection Facilities Charge shall be adjusted as of the in-service date of such Capital Additions to reflect the change in the Interconnection Facilities investment.

12.1.4.4. If the amounts paid for the Capital Additions Charge are less than the amounts due for the Capital Additions Charge as determined from the actual recorded Capital Additions cost, SCE will bill Sierra Power for the difference between the amounts previously paid by Sierra Power and the amounts which would have been paid based on actual recorded costs, without interest, on the next regular billing.

12.1.4.5. If the amounts paid for the Capital Additions Charge are greater than the amounts due for the Capital Additions Charge as determined from the actual recorded Capital Additions Cost, SCE will credit Sierra Power the difference between the amounts previously paid by Sierra Power and the amounts which would have been paid based on actual recorded costs, without interest, on the next regular billing.

12.1.5. Commencing on or following the in-service date of the Capital Additions, SCE will render bills to Sierra Power for the Capital Additions Charge.

12.1.6. SCE will render bills to Sierra Power for any reimbursable FERC fees in accordance with Section 17.3. Such charges shall be for any reimbursable FERC fees or costs incurred since the preceding billing.

12.2. Interest on Unpaid Balances.

Interest on any unpaid amounts shall be calculated in accordance with the methodology specified in the Interest on Unpaid Balances provision of the WDAT.

12.3. Default and Billing Dispute.

Any default or billing dispute shall be handled in accordance with the methodology specified in the Customer Default provision of the WDAT.

13. Billing and Payment Notification:

13.1. All payments to be made by Sierra Power to SCE shall be sent to: Southern California Edison Company Accounts Receivable Box 600 Rosemead, California 91770-0600

SCE may, at any time, by written notice to Sierra Power pursuant to Section 6 of the Service Agreement for Wholesale Distribution Service, change the address to which payments will be sent.

13.2. All billings to be presented by SCE to Sierra Power shall be sent to:

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Sierra Power Corporation P.O. Box 10060 9000 Road 234 Terra Bella, California 93270-0060 Fax: (559) 535-4515

Sierra Power may, at any time, by written notice to SCE pursuant to Section 6 of the Service Agreement for Wholesale Distribution Service, change the address to which billings will be sent.

14. Disputes:

With the exception of any billing dispute as provided pursuant to Section 12.3 herein, or as otherwise limited by law, the Dispute Resolution Procedures set forth in the WDAT shall apply to all disputes between Sierra Power and SCE which arise under this Agreement; provided, however, that the Dispute Resolution Procedures set forth in the WDAT shall not apply as to disputes regarding whether rates and charges set forth in this Agreement are just and reasonable under the Federal Power Act.

15. Audits:

SCE will maintain records and accounts of all costs incurred in sufficient detail to allow verification of all costs incurred, including, but not limited to, labor and associated labor costs, material and supplies, outside services, and administrative and general expenses. For two years following the effective date of this Agreement, or with respect to any Capital Additions made pursuant to Section 9, for two years following the in-service date of such Capital Additions, Sierra Power will have the right, upon reasonable notice, at a reasonable time and place, and at its own expense, to audit SCE’s records as necessary and as appropriate in order to verify costs incurred by SCE.

16. Operating Representatives:

The responsibilities assigned to the Operating Representatives appointed pursuant to Section 13.4 of the Specifications for Wholesale Distribution Service attached to and incorporated within the Service Agreement shall extend to the activities required under this Agreement.

17. Regulatory Authority:

17.1. No later than thirty (30) days following the execution of this Agreement, SCE shall tender this Agreement for filing with FERC with a request that it be made effective upon acceptance without suspension, and Sierra Power shall support SCE in obtaining all necessary authorizations and approvals for this Agreement.

17.2. Nothing contained herein shall be construed as affecting in any way: (i) the right of SCE to unilaterally make application to the FERC for a change in rates, charges, classification, or service, or any rule, regulation, or contract relating thereto, under Section 205 of the Federal Power Act and pursuant to the Rules and Regulations promulgated by FERC thereunder; (ii) the right of Sierra Power to oppose such changes under Section 205 of the Federal Power Act; (iii) the right of Sierra Power to file a complaint requesting a change in rates, charges, classification, or service, or any rule, regulation or contract relating thereto, or rate methodology or design relating to services provided hereunder, under Section 206 of the Federal Power Act and pursuant to the rules and regulations promulgated by the FERC

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thereunder; or (iv) the right of SCE to oppose such complaint by Sierra Power under Section 206 of the Federal Power Act. Any change shall become effective pursuant to Section 205 of the Federal Power Act.

17.3. Sierra Power shall reimburse SCE for all fees and charges imposed on SCE by the FERC attributable to the service provided under this Agreement, or any amendments thereto.

18. No Dedication Of Facilities:

Any undertaking by one Party to the other Party under this Agreement shall not constitute the dedication of the electrical system or any portion thereof of the undertaking Party to the public or to the other Party, and it is understood and agreed that any such undertaking by a Party shall cease upon the termination of its obligations hereunder.

19. No Third Party Rights:

Unless otherwise specifically provided in this Agreement, the Parties do not intend to create rights in or grant remedies to any third party as a beneficiary of this Agreement or of any duty, covenant, obligation, or undertaking established hereunder.

20. Relationship Of Parties:

The covenants, obligations, and liabilities of the Parties are intended to be several and not joint or collective, and nothing contained in this Agreement shall ever be construed to create an association, joint venture, trust, or partnership, or to impose a trust or partnership covenant, obligation, or liability on or with regard to either Party. Each Party shall be individually responsible for its own covenants, obligations, and liabilities as provided in this Agreement. Neither Party shall be under the control of or shall be deemed to control the other Party. Neither Party shall be the agent of or have a right or power to bind the other Party without such other Party's express written consent.

21. Waivers:

Any waiver at any time by either Party of its rights with respect to a default under this Agreement, or with respect to any other matter arising in connection with this Agreement, shall not be deemed a waiver with respect to any other or subsequent default or other matter arising in connection therewith. Any delay, short of any statutory period of limitation, in asserting or enforcing any right, shall not be deemed a waiver of such right.

22. Governing Law:

Except as otherwise provided by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the state of California.

23. Notices:

Any notice, demand, or request provided in this Agreement, or served, given, or made in connection with it, shall be made in accordance with Section 6 of the Service Agreement.

24. Severability:

In the event that any term, provision, covenant, or condition of this Agreement or the application of

Page 11

any such term, covenant, or condition shall be held invalid as to any person, entity, or circumstance by any court, arbitration, or regulatory authority having jurisdiction, the invalidity of such term, covenant or condition shall not affect the validity of any other term, provision, condition or covenant and such term, provision, covenant or condition shall remain in force and effect as applied to this Agreement to the maximum extent permitted by law. The Parties hereto further agree to negotiate in good faith to establish new and valid terms, conditions and covenants to replace any found invalid so as to place each Party as nearly as possible in the position contemplated by this Agreement.

25. Entire Agreement:

This Agreement constitutes the complete and final expression of the agreement between the Parties and is intended as a complete and exclusive statement of the terms of their agreement which supersedes all prior and contemporaneous offers, promises, representations, negotiations, discussions, communications, and other agreements which may have been made in connection with the subject matter of this Agreement.

26. Ambiguities:

Ambiguities or uncertainties in the wording of this Agreement shall not be construed for or against any Party, but will be construed in the manner that most accurately reflects the Parties’ intent as of the date they executed this Agreement.

Page 12

27. Signature Clause:

The signatories hereto represent that they are authorized to enter into this Agreement on behalf of the Party for whom they sign. This Agreement is hereby executed as of the 26th day of ___July____, 2002.

SOUTHERN CALIFORNIA EDISON COMPANY By: ____/s/ A. Larry Grant_____ Name: A. Larry Grant Title: Vice President SIERRA POWER CORPORATION By: ___/s/ Kent Duysen________ Name: Kent Duysen Title: President

Page 13

Exhibit A Interconnection Facilities

Description and Cost

1. SCE-Financed Interconnection Facilities Actual Costs (“Original Facilities”):

Description Amount 1. 1,700 ft. 12 kV line $37,312.24 2. 12 kV recloser equipment and padmounted relay protection package $125,092.40 3. Metering Equipment $4,425.22 4. 1500 kVA, 12000-277/480 V pad-mounted transformer and 75 feet of 3-1/C 1/0 primary cable $22,337.14 Original Facilities Total: $189.167.00 2. SCE-Financed Interconnection Facilities Actual Costs 2003 Replacement (“Additional Facilities 1”): 1. Installation of one Pad Mount Auto Re-closure, one

Controller and miscellaneous materials and supplies $82,612.71 2. Removed one Load Interrupter, type C, 3-Phase, 14.4 kV ($15,175.56)** Additional Facilities 1 Total: $67,437.15 **This amount excludes the Sierra Power Corporation Payment of $6,452.26 on April 22, 2004 for removal cost. 3. SCE-Financed Interconnection Facilities Actual Costs 2006 Replacement “Additional Facilities 2”): 1. Installation of one Pad Mounted Auto Re-closure $51,778.64 2. Original installed cost of Pad Mounted Auto Re-Closure ($36,149.38) installed June 1, 2003. Additional Facilities 2 Total: $15,629.26

Page 14

Exhibit A

Interconnection Facilities Description and Cost

(Cont.) 4. Total Interconnection Facilities Cost In-Service Date:

Facilities Interconnection Facilities Cost

Total Interconnection Facilities Cost

07/26/02 Original Facilities

$189,167.00 $189,167.00

6/1/03 Additional Facilities 1

$67,437,15 $256,604.15


$15,629.26 $272,233.41

5. Interconnection Facilities Charge Effective Date SCE-Financed Monthly

Rate Interconnection Facilities Cost

Interconnection Facilities Charge

07/26/02 to 05/31/03 1.31% $189,167.00 $2,478.09 06/1/03 to 07/17/04 1.31% $256,604.15 $3,361.51 07/18/04 to 05/31/06 1.35% $256,604.15 $3,464.16 06/01/06 to 11/13/06 1.33% $256,604.15 $3,412.84 11/14/06 to 04/03/09 1.33% $272,233.41 $3,620.70 04/4/09 to present 1.34% $272,233.41 $3,647.93

Page 15

Exhibit B One-Line Diagram

Page 16

Exhibit C

Capital Additions Description and Cost

1. Capital Additions: (None at this time) 2. Cost: Estimated Cost In-Service Date:

Description of

Modification

Capital Additions

Cost

One-Time Cost

ITCC Total Cost

Actual Cost In-Service Date:

Description of

Modification

Capital Additions

Cost

One-Time Cost

ITCC Total Cost

3. Capital Additions Charge: Effective Date

Customer-Financed

Monthly Rate

Estimated Capital Additions Cost

Capital Additions Charge based on Estimated Capital

Additions Cost

Actual Capital Additions

Cost

Capital Additions

Charge based on Actual

Capital Additions

Cost In-Service Date of Capital Addition

0.38%

Title Page


SERVICE AGREEMENT FOR WHOLESALE DISTRIBUTION SERVICE

BETWEEN


AND




1. This Service Agreement, dated as of the date executed by the Distribution Customer

under Section 7 of this Service Agreement, is entered into, by and between Southern

California Edison Company (“Distribution Provider”), and Sierra Power Corporation

(“Distribution Customer”).

2. The Distribution Customer has been determined by the Distribution Provider to have

a Completed Application for Distribution Service under the Tariff.

3. The Distribution Customer has provided to the Distribution Provider an Application

deposit in the amount of waived, in accordance with the provisions of Section 6.2 of the

Tariff.

4. Service under this Service Agreement shall commence on the later of (1) date of

execution, or (2) the date on which construction of any Direct Assignment Facilities and/or

Distribution System Upgrades specified in Section 8.0 and 9.0 of the attached Specification

For Wholesale Distribution Service is completed and all additional requirements are met

pursuant to Section 7.4 of the Tariff, or (3) such other date as it is permitted to become

effective by the Commission. Service under this Service Agreement shall terminate on the

earliest of (1) July 26, 2017, or (2) the termination date of the Interconnection Facilities

Agreement between Distribution Provider and Distribution Customer, or (3) Distribution

Provider’s option, upon failure by Distribution Customer to provide advance notice to

Distribution Provider of changes (other than maintenance which is addressed in Section

13.3.2.4 of the attached Specifications For Wholesale Distribution Service) made to

Distribution Customer’s generation or power transformation facilities which are connected to

Distribution Provider’s electrical system pursuant to this Service Agreement. Distribution

Customer shall provide advance notice to Distribution Provider when such changes are

contemplated so that the Distribution Provider can evaluate any potential system impacts

which may occur as a result of the change or whether a new Application under the Tariff

needs to be submitted.

5. The Distribution Provider agrees to provide and the Distribution Customer agrees to

take and pay for Distribution Service in accordance with the provisions of the Tariff and this

Service Agreement.

6. Any notice or request made to or by either Party regarding this Service Agreement

shall be made to the representative of the other Party as indicated below.

Distribution Provider:

Southern California Edison Company Manager, Grid Contract Management P.O. Box 800 2244 Walnut Grove Avenue Rosemead, California 91770 Telefax No. (626) 302-1152 Telephone No. (626) 302-9640

Distribution Customer:

Sierra Power Corporation 9000 Road 234 Terra Bella, CA 93270 Telefax No. (550) 535-4515 Telephone No. (559) 535-4893

7. The Tariff and attached Specifications For Wholesale Distribution Service are

incorporated herein and made a part hereof.

IN WITNESS WHEREOF, the Parties have caused this Service Agreement to be executed by

their respective authorized officials.


By: /s/ A. Larry Grant V.P. 7-24-02

Name Title Date


By: /s/ Kent Duysen President 7-26-02

Name Title Date

SPECIFICATIONS FOR WHOLESALE DISTRIBUTION SERVICE

1. Term of Transaction: See Section 4 of the Service Agreement

Service Commencement Date: See Section 4 of the Service Agreement

Termination Date: See Section 4 of the Service Agreement

2. Description of capacity and energy to be transmitted by Distribution Provider

including the electric Control Area in which the transaction originates and, for a Resource

connected to the Distribution Provider’s Distribution System, a five year forecast of monthly

Generation. Up to 9 MW from Distribution Customer’s Terra Bella Generating Facility.

3. Point of Receipt: The generator side of the pad mounted disconnect switch tie to the

12.4 kV Zion circuit connected to Distribution Provider’s Terra Bella Substation, as shown in

Exhibit B of the Interconnection Facilities Agreement between Distribution Provider and

Distribution Customer.

Point of Delivery: The ISO Controlled Grid at the Distribution Provider’s Vestal

Substation

Receiving Party: The California Independent System Operator Corporation.

4. Description of Wholesale Distribution Load at the Point of Delivery (including a five

year forecast of monthly load requirements): Not Applicable

5. Interruptible Load amount (summer and winter), location and conditions/limitations

(five year forecast): Not Applicable

6. Maximum amount of capacity and energy to be transmitted: 9.0 MW operating within

the power factor range of 0.95 leading and 0.95 lagging. The ISO metering facilities shall be,

notwithstanding Section 13.1 of this Service Agreement, owned by the Distribution

Customer and located on the Distribution Customer’s side of the Point of Receipt.

Distribution Customer shall be responsible for the installation, maintenance, testing, and

certification of the ISO metering facilities in accordance with applicable ISO Tariff

provisions and Metering Protocol. Distribution Customer shall be responsible for all costs

associated with the testing and certification of ISO metering facilities.

7. Designation of party(ies) subject to reciprocal service obligation: Waived.

8. Direct Assignment Facilities: Provided for in the Interconnection Facilities

Agreement between Distribution Provider and Distribution Customer executed concurrently

herewith.

9. Distribution System Upgrades required prior to the commencement of service: None

10. Real Power Loss Factors: 3.73% Credit to Distribution Customer

11. Distribution Service under this Agreement will be subject to the charges detailed

below.

11.1 Customer Charge: None

11.2 Demand Charge: None, pursuant to Section 10.2.2 of the Tariff

11.3 Facilities Charge: The applicable monthly charges under the

Interconnection Facilities Agreement between Distribution Provider and Distribution

Customer.

11.4 System Impact and/or Facilities Study Charge(s): None

11.5 Failure to respond to load shedding and curtailment procedures charge:

If the Distribution Customer fails to curtail its transactions or shed load in

accordance with this Service Agreement and Tariff, then the Distribution

Customer shall pay the Distribution Provider one hundred mills per

kilowatt-hour for each kilowatt-hour of Generation or Wholesale

Distribution Load it failed to curtail or shed

12. Letter of credit or alternative form of security to be provided and maintained by

Distribution Customer pursuant to Sections 7.4 and 15 of the Tariff: Provided for in

the Interconnection Facilities Agreement between Distribution Provider and

Distribution Customer executed concurrently herewith.

Title Page


INTERCONNECTION FACILITIES AGREEMENT

BETWEEN


AND



Page 1

INTERCONNECTION FACILITIES AGREEMENT BETWEEN

SOUTHERN CALIFORNIA EDISON COMPANY AND


TABLE OF CONTENTS 1. Parties: ......................................................................................................................................................... 2 2. Recitals: ....................................................................................................................................................... 2 3. Agreement: .................................................................................................................................................. 3 4. Definitions: .................................................................................................................................................. 3 5. Effective Date and Term: ............................................................................................................................ 5 6. Agreement Pursuant to the WDAT: ............................................................................................................ 5 7. Creditworthiness: ........................................................................................................................................ 5 8. Interconnection Facilities: ........................................................................................................................... 6 9. Capital Additions To Interconnection Facilities: ........................................................................................ 6 10. Removal Of Interconnection Facilities: .................................................................................................. 6 11. Charges: .................................................................................................................................................. 6 12. Billing and Payment: .............................................................................................................................. 7 13. Billing and Payment Notification: .......................................................................................................... 8 14. Disputes: ................................................................................................................................................. 9 15. Audits: ..................................................................................................................................................... 9 16. Operating Representatives: ..................................................................................................................... 9 17. Regulatory Authority: ............................................................................................................................. 9 18. No Dedication Of Facilities: ................................................................................................................. 10 19. No Third Party Rights: .......................................................................................................................... 10 20. Relationship Of Parties: ........................................................................................................................ 10 21. Waivers: ................................................................................................................................................ 10 22. Governing Law: .................................................................................................................................... 10 23. Notices: ................................................................................................................................................. 11 24. Severability: .......................................................................................................................................... 11 25. Entire Agreement: ................................................................................................................................. 11 26. Ambiguities: .......................................................................................................................................... 11 27. Signature Clause: .................................................................................................................................. 12 Exhibit A ............................................................................................................................................................ 13 Exhibit B ............................................................................................................................................................ 14 Exhibit C ............................................................................................................................................................ 15

1. Parties ...........................................................................................................................................32 2. Recitals .........................................................................................................................................32 3. Agreement ....................................................................................................................................43 4. Definitions ...................................................................................................................................43 5. Effective Date and Term ..............................................................................................................65 6. Agreement Pursuant to the WDAT ..............................................................................................65 7. Creditworthiness ............................................................................................................................6 9. Capital Additions To Interconnection Facilities ..........................................................................76 10. Removal Of Interconnection Facilities ....................................................................................87 11. Charges ....................................................................................................................................87

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12. Billing and Payment .................................................................................................................87 13. Billing and Payment Notification ............................................................................................98 14. Disputes .................................................................................................................................109 15. Audits .....................................................................................................................................109 16. Operating Representatives .....................................................................................................109 17. Regulatory Authority .............................................................................................................109 18. No Dedication Of Facilities .................................................................................................1110 19. No Third Party Rights ..........................................................................................................1110 20. Relationship Of Parties ........................................................................................................1110 21. Waivers ................................................................................................................................1110 22. Governing Law ....................................................................................................................1110 23. Notices .................................................................................................................................1110 24. Severability ..............................................................................................................................11 25. Entire Agreement .................................................................................................................1211 26. Ambiguities ..........................................................................................................................1211 27. Signature Clause ..................................................................................................................1312 Exhibit B ..........................................................................................................................................1715 Exhibit C ..........................................................................................................................................1916

Page 3



1. Parties:

The Parties to this Southern California Edison Company – Sierra Power Corporation Interconnection Facilities Agreement are Southern California Edison Company (“SCE”), a California corporation, and Sierra Power Corporation (“Sierra Power”), a California corporation, hereinafter sometimes referred to individually as “Party” and collectively as “Parties.”

2. Recitals:

This Agreement is made with reference to the following facts, among others: 2.1. SCE is a California public utility engaged in the business of generating and transmitting

electric energy in the States of Arizona, California, Nevada, and New Mexico. SCE is further engaged in the business of distributing such energy in the State of California.

2.2. Sierra Power is a California Corporation that owns the Terra Bella generating facility, which generates electricity from biomass.

2.3. The Sierra Power Terra Bella generating facility is a qualifying facility for the purposes of the Public Utility Regulatory Policies Act of 1978, as amended, and is self certified as a Qualifying Facility.

2.4. Sierra Power and SCE executed a CPUC-jurisdictional Power Purchase Contract on December 18, 1984. The Power Purchase Contract as amended obligated SCE to purchase up to 7.5 MW of firm capacity, 1.875 MW of as-available capacity and energy generated from a nominal 9.375 MVA nameplate generator for the 30-year term of the Power Purchase Contract. In 1994, the Parties entered into an agreement to terminate the Power Purchase Contract.

2.5. SCE's and Sierra Power's electrical systems are interconnected via the 12 kV Zion circuit out of SCE's Terra Bella Substation. Interconnection facilities were constructed by SCE to interconnect Sierra Power's Terra Bella generating facility with SCE's distribution Distribution systemSystem. Such interconnection facilities are owned, operated and maintained by SCE.

2.6. Sierra Power paid the annual costs of SCE's ownership, operation, and maintenance of those facilities constructed by SCE to accommodate its generating facility under the Power Purchase Contract and associated interconnection facilities agreement. The charge for such facilities was based on SCE's rate most recently adopted by the CPUC for application to retail customers for SCE-financed added facilities. This added facilities rate is based on an average, levelized cost recovery methodology adopted by the CPUC.

2.7. Pursuant to SCE’s WDAT, Sierra Power submitted an application to SCE for 9.0 MW of wholesale Distribution Service from Sierra Power's Terra Bella generating facility to the ISO Grid at SCE’s Vestal Substation for a period of one (1) year.

2.8. Sierra Power and SCE executed an interconnection facilities agreement and a WDAT service agreement on March 1, 2001. The interconnection facilities agreement specified the terms for SCE to own, operate and maintain the Interconnection Facilities and for Sierra Power to pay SCE for such Interconnection Facilities. The service agreement specified the terms for SCE to provide and for Sierra Power to receive Distribution Service from the Point of Interconnection to the ISO Grid. On March 6, 2002, the interconnection facilities agreement and service agreement terminated.

2.9. Pursuant to SCE’s WDAT, Sierra Power submitted a new application to SCE for 9.0 MW of wholesale Distribution Service from Sierra Power's Terra Bella generating facility to the ISO

Page 4

Grid at SCE’s Vestal Substation for a period of ten (10) years. 2.10. The Parties entered into this Agreement on July 26, 2002 to specify the terms for SCE to own,

operate and maintain the Interconnection Facilities and engineer, design, construct, install, own, operate and maintain any Capital Additions thereto required for SCE to provide Distribution Service to Sierra Power, and payment by Sierra Power to SCE for said Interconnection Facilities and Capital Additions.

2.11. This Agreement implements wholesale Distribution Service under SCE's WDAT in connection and concurrent with that certain Service Agreement for Wholesale Distribution Service between the Parties.

2.12. On March 14, 2003 the Pad Mounted Auto Re-closure equipment (“A/R Equipment”) failed. SCE replaced the damaged equipment and placed it into service on June 1, 2003.

2.13. In November, 2006 the A/R Equipment failed again. SCE replaced the damaged equipment on November 14, 2006.

2.14. On January 27, 2009, the Parties entered into a letter agreement to 1) amend this Agreement to show the actual recorded costs for the facilities described in Section 2.12 and 2.13; 2) provide for SCE financing for such facilities; and 3) allow for the inclusion of NERC reliability requirements for connected generators.

2.15. On August 31, 2009, the Parties entered into a letter agreement to 1) amend the definition of Capital Additions Charge to reinstate use of Customer-Financed Monthly Rate, 2) amend this Agreement to restore the Customer-Financed Monthly Rate for future Capital Additions, and 3) make certain other minor modifications to clarify the terms for future Capital Additions.

2.16. Following the execution of this Agreement, this Agreement was amended to incorporate the appropriate NERC compliance language to ensure that the Parties understand their respective obligations under the NERC compliance standards currently in effect. Such language is incorporated into this Agreement.

3. Agreement:

In consideration of the premises and the mutual covenants and agreements contained herein, the Parties agree as follows:

4. Definitions:

All terms with initial capitalization not otherwise defined herein shall have the meanings assigned to them in SCE’s WDAT as that Tariff may be amended from time to time. The following terms, when used herein with initial capitalization, whether in the singular or the plural, shall have the meanings specified: 4.1. Accounting Practice: Generally accepted accounting principles and practices applicable to

electric utility operations. 4.2. Agreement: This Interconnection Facilities Agreement between Southern California Edison

Company and Sierra Power Corporation. 4.3. Applicable Laws and Regulations: All duly promulgated applicable federal, state and local

laws, regulations, rules, ordinances, codes, decrees, judgments, directives, or judicial or administrative orders, permits and other duly authorized actions of any Governmental Authority.

4.4. Applicable Reliability Council: The Western Electricity Coordinating Council (“WECC”), or its successor organization.

4.5. Applicable Reliability Standards: The requirements and guidelines of NERC, the Applicable Reliability Council, and the control areaBalancing Authority Area of the electric systemSCE’s

Page 5

Distribution System to which the Sierra Power Facilities are directly interconnected, including the requirements adopted pursuant to Section 215 of the Federal Power Act.

4.6. Balancing Authority: The responsible entity that integrates resource plans ahead of time, maintains load-interchange-generation balance within a Balancing Authority Area, and supports interconnection frequency in real time.

4.7. Balancing Authority Area: The collection of generation, transmission, and loads within the metered boundaries of the Balancing Authority. The Balancing Authority maintains load-resource balance within this area.

4.8. Capital Additions: Any Units of Property which are added to the Interconnection Facilities; the enlargement, modification or betterment of any Units of Property constituting a part of the Interconnection Facilities; and the replacement of any Units of Property constituting a part of the Interconnection Facilities, irrespective of whether such replacement constitutes an enlargement, modification or betterment of that which it replaces, the costs of which additions, betterments, modifications, enlargements, and replacements in accordance with Accounting Practice would be capitalized and have not previously been included in the Interconnection Facilities Cost. The Capital Additions are specified in Exhibit C.

4.9. Capital Additions Cost: All costs, excluding ITCC and One-Time Costs, determined by SCE to be associated with the design, engineering, procurement, construction and installation of Capital Additions. The Capital Additions Cost is provided in Exhibit C.

4.10. CPUC: The California Public Utilities Commission, or its regulatory successor. 4.11. Capital Additions Charge: The monthly charge to Sierra Power to recover the revenue

requirements for Capital Additions, calculated as the product of the Customer-Financed Monthly Rate and the Capital Additions Cost. The Capital Additions Charge is provided in Exhibit C.

4.12. Customer-Financed Monthly Rate: The rate most recently adopted by the CPUC for application to SCE’s retail electric customers for customer financed added facilities, which does not compensate SCE for replacement of added facilities. The currently-effective Customer-Financed Monthly Rate is stated in Exhibit C.

4.13. FERC: Federal Energy Regulatory Commission, or its regulatory successor. 4.14. Interconnection Facilities: Facilities, as specified in Exhibit A and as shown in Exhibit B,

constructed by SCE to interconnect the Sierra Power Facilities to the Distribution System. 4.15. Governmental Authority: Any federal, state, local or other governmental regulatory or

administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, or other governmental authority having jurisdiction over the Parties, their respective facilities, or the respective services they provide, and exercising or entitled to exercise any administrative, executive, police, or taxing authority or power; provided, however, that such term does not include Sierra Power, SCE, or any affiliate thereof.

4.16. Interconnection Facilities Charge: The monthly charge to Sierra Power to recover the revenue requirements for Interconnection Facilities, calculated as the product of the SCE-Financed Monthly Rate and the Interconnection Facilities Cost. The Interconnection Facilities Charge is provided in Exhibit A.

4.17. Interconnection Facilities Cost: All costs determined by SCE to be associated with the design, engineering, procurement, construction and installation of the Interconnection Facilities, as may be adjusted pursuant to Section 12.1.4.3. The Interconnection Facilities Cost is provided in Exhibit A.

4.18. ITCC: The Income Tax Component of Contribution specified in the Preliminary Statement, Part M of SCE’s tariff on file with the CPUC, as applicable to the Capital Additions Cost.

4.19. NERC: North American Electric Reliability Corporation, or its successor organization. 4.20. One-Time Costs: All costs determined by SCE to be associated with the installation of Capital

Page 6

Additions which are not capitalized in accordance with Accounting Practice. 4.21. Point of Change of Ownership: The point, as set forth in Exhibit B to this Agreement, where

SCE’s Interconnection Facilities connect to the Sierra Power Facilities. 4.20.4.22. Point of Interconnection: The point, as set forth in Exhibit B to this Agreement, where

the Interconnection Facilities connect to SCE’s Distribution System. 4.21.4.23. SCE-Financed Monthly Rate: The rate most recently adopted by the CPUC for

application to SCE’s retail electric customers for added facilities, which does not compensate SCE for replacement of added facilities. The currently-effective SCE-Financed Monthly Rate is stated in Exhibit A.

4.22.4.24. Service Agreement: The Service Agreement For Wholesale Distribution Service between the Parties executed concurrently herewith.

4.23.4.25. Sierra Power Facilities: All equipment and facilities comprising the Sierra Power Terra Bella generating facility, as provided by Sierra Power in its WDAT application, including but not limited to one 9,375 kVA synchronous generator, one 10,000 kVA autotransformer, meters and metering equipment and appurtenant equipment.

4.24.4.26. Units of Property: As described in FERC's “List of Units of Property for Use in Connection with Uniform System of Accounts Prescribed for Public Utilities and Licensees” in effect as of the date of this Agreement, and as such list may be amended from time to time.

4.25.4.27. Vestal Substation: SCE’s 220/66 kV substation located at Famosa-Porterville Hwy., in Richgrove, California.

4.26.4.28. WDAT: SCE's Wholesale Distribution Access Tariff. 4.27.4.29. WECC: The Western Electricity Coordinating Council or its successor.

5. Effective Date and Term:

5.1. This Agreement shall be effective upon the later of (i) date of execution, or (ii) upon acceptance for filing by FERC without suspension; provided however, that if upon such filing the FERC enters into a hearing to determine whether this Agreement is just and reasonable, this Agreement shall not become effective until the date when an order no longer subject to judicial review has been issued by FERC determining this Agreement to be just and reasonable without changes or new conditions unacceptable to either Party.

5.2. This Agreement shall terminate on the earlier of (i) the termination date of the Service Agreement, or (ii) the date specified by Sierra Power upon 180 days advance written notice to SCE.

5.3. Any obligations of one Party to the other, including payment obligations, as a result of this Agreement, which accrued prior to or as a result of termination of this Agreement, shall survive termination.

5.4. If Sierra Power has given notice of termination and a filing with FERC is required to terminate this Agreement, Sierra Power shall support such filing before the FERC if requested by SCE.

6. Agreement Pursuant to the WDAT:

This Agreement provides terms regarding Interconnection Facilities associated with wholesale Distribution Service pursuant to the WDAT. Accordingly, the Interconnection Facilities associated with the wholesale Distribution Service provided to Sierra Power, and Sierra Power's use of and payment for said Interconnection Facilities, are subject to the provisions of the WDAT and the Service Agreement, as those provisions may from time to time be modified.

7. Creditworthiness:

SCE may require Sierra Power to provide and maintain in effect during the term of this Agreement,

Page 7

an unconditional and irrevocable letter of credit in a form reasonably acceptable to SCE as security to meet its responsibilities and obligations under the WDAT, or an alternative form of security proposed by Sierra Power and acceptable to SCE, and consistent with commercial practices established by the Uniform Commercial Code, that protects SCE against the risk of non-payment.

8. Interconnection Facilities:

8.1. The maximum capacity of the Interconnection Facilities made available by SCE to Sierra Power for the purpose of interconnecting to SCE's electrical system and delivering energy and other services to the ISO under this Agreement shall be 9.0 MW. Sierra Power acknowledges that if Sierra Power wishes to increase the amount of interconnection capacity provided pursuant to this Agreement, Sierra Power shall be required to submit a new Application for Interconnection in accordance with the terms and conditions of the WDAT.

8.2. The costs associated with any mitigation measures required to third party transmission systems resulting from the interconnection of the Sierra Power Facilities to SCE’s electrical system are not reflected in this Agreement. Such costs, if any, shall be the sole responsibility of Sierra Power.

8.3. Each Party shall comply with Applicable Reliability Standards and the Applicable Reliability Council requirements. Each Party shall provide to the other Party all information that may reasonably be required by the other Party to comply with Applicable Laws and Regulations and Applicable Reliability Standards.

8.4. Neither Party’s facilities shall cause excessive voltage flicker or introduce excessive distortion to the sinusoidal voltage or current waves as defined by ANSI Standard C84.1-1989, in accordance with IEEE Standard 519, or any applicable superseding electric industry standard or any alternative Applicable Reliability Standard or Applicable Reliability Council standard. In the event of a conflict among ANSI Standard C84.1-1989, or any applicable superseding electric industry standard, or any alternative Applicable Reliability Standard or Applicable Reliability Council standard, the alternative Applicable Reliability Standard or Applicable Reliability Council standard shall control.

8.5. Sierra Power shall comply with all Applicable Reliability Standards for the Sierra Power Facilities. SCE will not assume any responsibility for complying with mandatory reliability standards for such facilities and offers no opinion whether Sierra Power must register with NERC pursuant to Section 215 of the Federal Power Act. Such determination is the responsibility of Sierra Power. If required to register with NERC, Sierra Power shall be responsible for complying with all Applicable Reliability Standards for the Sierra Power Facilities up to the Ppoint of Cchange of oOwnership as described in Exhibit B of this IFA.

8.6. Sierra Power shall cause the Sierra Power Facilities to participate in ISO congestion management. SCE is aware that the Sierra Power Facilities will compete with other market generation for available transmission capacity in accordance with ISO protocols.

9. Capital Additions To Interconnection Facilities:

9.1. SCE shall engineer, design, construct, install, own, operate and maintain all Capital Additions. 9.2. Except as otherwise provided in Section 9.3, whenever Capital Additions to the

Interconnection Facilities are required by SCE pursuant to Good Utility Practice (which may include compliance with system or regulatory requirements), Sierra Power shall bear the cost responsibility for such Capital Additions. SCE shall bill Sierra Power for the estimated Capital Additions Cost, including ITCC, and any associated One-Time Costs in accordance with Section 12. SCE shall not be required to commence any work on any Capital Additions until such bill is paid by Sierra Power in accordance with Section 12.

Page 8

9.3. In the event that Capital Additions are required to the Interconnection Facilities in order to benefit SCE, or because of damage caused by negligence or willful misconduct of SCE, Sierra Power shall not bear cost responsibility for such Capital Additions; no adjustment will be made to the Interconnection Facilities Cost and no One-Time Costs will be charged to Sierra Power for such Capital Additions.

10. Removal Of Interconnection Facilities:

Upon termination of this Agreement for any reason whatsoever, SCE will remove the Interconnection Facilities from service to Sierra Power.

11. Charges:

11.1. Sierra Power shall pay to SCE, in accordance with Section 12, the following charges with respect to the Interconnection Facilities, Capital Additions and this Agreement: (a) Interconnection Facilities Charges; (b) One-Time Costs; (c) Capital Additions Cost pursuant to Section 9; (d) ITCC; (e) Capital Additions Charge; and (f) any reimbursable FERC fees pursuant to Section 17.3.

11.2. The Interconnection Facilities Cost, One-Time Costs, ITCC and Capital Additions Cost shall be compiled in accordance with established Accounting Practice.

11.3. If, during the term of this Agreement, the Interconnection Facilities and Capital Additions are utilized to provide service to another customer, the charges due hereunder shall be adjusted to appropriately reflect such service based on SCE's costs allocation principles in effect at such time and shall be subject to FERC approval.

12. Billing and Payment:

12.1. Billing Procedure. 12.1.1. Except as otherwise specifically provided herein, commencing on or following the

effective date of this Agreement, SCE will render bills to Sierra Power for charges under this Agreement, and Sierra Power shall pay such bills, in accordance with the Billing and Payment provisions of the WDAT.

12.1.2. Commencing on or following the effective date of this Agreement, SCE will render bills to Sierra Power for the Interconnection Facilities Charge.

12.1.3. The Interconnection Facilities Charge for the first and last month of service hereunder shall be pro-rated based on the number of days in which service was provided during said months.

12.1.4. Prior to commencing any work on any Capital Additions in accordance with Section 9, SCE will bill Sierra Power for the Capital Additions Cost, associated ITCC, and associated One-Time Costs. Such billing shall initially be based on SCE's cost estimates and shall be subject to later adjustment pursuant to Sections 12.1.4.1 and 12.1.4.2. 12.1.4.1. If the amount paid for the estimated Capital Additions Cost, associated

ITCC and associated One-Time Costs is less than the actual recorded Capital Additions Cost, associated ITCC and associated One-Time Costs, SCE will bill Sierra Power for the difference between the amount previously paid by Sierra Power and the actual recorded costs, without interest, on the next regular billing.

12.1.4.2. If the amount paid for the estimated Capital Additions Cost, associated ITCC and associated One-Time Costs, is greater than the actual

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recorded Capital Additions Cost, associated ITCC and associated One-Time Costs, SCE will refund to Sierra Power the difference between the amount previously paid by Sierra Power and actual recorded costs, without interest, on the next regular billing.

12.1.4.3. If certain Interconnection Facilities are removed to accommodate such Capital Additions and such removal results in a change in the Interconnection Facilities Cost, the Interconnection Facilities Charge shall be adjusted as of the in-service date of such Capital Additions to reflect the change in the Interconnection Facilities investment.

12.1.4.4. If the amounts paid for the Capital Additions Charge are less than the amounts due for the Capital Additions Charge as determined from the actual recorded Capital Additions cost, SCE will bill Sierra Power for the difference between the amounts previously paid by Sierra Power and the amounts which would have been paid based on actual recorded costs, without interest, on the next regular billing.

12.1.4.5. If the amounts paid for the Capital Additions Charge are greater than the amounts due for the Capital Additions Charge as determined from the actual recorded Capital Additions Cost, SCE will credit Sierra Power the difference between the amounts previously paid by Sierra Power and the amounts which would have been paid based on actual recorded costs, without interest, on the next regular billing.

12.1.5. Commencing on or following the in-service date of the Capital Additions, SCE will render bills to Sierra Power for the Capital Additions Charge.

12.1.6. SCE will render bills to Sierra Power for any reimbursable FERC fees in accordance with Section 17.3. Such charges shall be for any reimbursable FERC fees or costs incurred since the preceding billing.

12.2. Interest on Unpaid Balances.

Interest on any unpaid amounts shall be calculated in accordance with the methodology specified in the Interest on Unpaid Balances provision of the WDAT.

12.3. Default and Billing Dispute.

Any default or billing dispute shall be handled in accordance with the methodology specified in the Customer Default provision of the WDAT.

13. Billing and Payment Notification:

13.1. All payments to be made by Sierra Power to SCE shall be sent to: Southern California Edison Company Accounts Receivable Box 600 Rosemead, California 91770-0600

SCE may, at any time, by written notice to Sierra Power pursuant to Section 6 of the Service Agreement for Wholesale Distribution Service, change the address to which payments will be sent.

13.2. All billings to be presented by SCE to Sierra Power shall be sent to:

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Sierra Power Corporation P.O. Box 10060 9000 Road 234 Terra Bella, California 93270-0060 Fax: (559) 535-4515

Sierra Power may, at any time, by written notice to SCE pursuant to Section 6 of the Service Agreement for Wholesale Distribution Service, change the address to which billings will be sent.

14. Disputes:

With the exception of any billing dispute as provided pursuant to Section 12.3 herein, or as otherwise limited by law, the Dispute Resolution Procedures set forth in the WDAT shall apply to all disputes between Sierra Power and SCE which arise under this Agreement; provided, however, that the Dispute Resolution Procedures set forth in the WDAT shall not apply as to disputes regarding whether rates and charges set forth in this Agreement are just and reasonable under the Federal Power Act.

15. Audits:

SCE will maintain records and accounts of all costs incurred in sufficient detail to allow verification of all costs incurred, including, but not limited to, labor and associated labor costs, material and supplies, outside services, and administrative and general expenses. For two years following the effective date of this Agreement, or with respect to any Capital Additions made pursuant to Section 9, for two years following the in-service date of such Capital Additions, Sierra Power will have the right, upon reasonable notice, at a reasonable time and place, and at its own expense, to audit SCE’s records as necessary and as appropriate in order to verify costs incurred by SCE.

16. Operating Representatives:

The responsibilities assigned to the Operating Representatives appointed pursuant to Section 13.4 of the Specifications for Wholesale Distribution Service attached to and incorporated within the Service Agreement shall extend to the activities required under this Agreement.

17. Regulatory Authority:

17.1. No later than thirty (30) days following the execution of this Agreement, SCE shall tender this Agreement for filing with FERC with a request that it be made effective upon acceptance without suspension, and Sierra Power shall support SCE in obtaining all necessary authorizations and approvals for this Agreement.

17.2. Nothing contained herein shall be construed as affecting in any way: (i) the right of SCE to unilaterally make application to the FERC for a change in rates, charges, classification, or service, or any rule, regulation, or contract relating thereto, under Section 205 of the Federal Power Act and pursuant to the Rules and Regulations promulgated by FERC thereunder; (ii) the right of Sierra Power to oppose such changes under Section 205 of the Federal Power Act; (iii) the right of Sierra Power to file a complaint requesting a change in rates, charges, classification, or service, or any rule, regulation or contract relating thereto, or rate methodology or design relating to services provided hereunder, under Section 206 of the Federal Power Act and pursuant to the rules and regulations promulgated by the FERC

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thereunder; or (iv) the right of SCE to oppose such complaint by Sierra Power under Section 206 of the Federal Power Act. Any change shall become effective pursuant to Section 205 of the Federal Power Act.

17.3. Sierra Power shall reimburse SCE for all fees and charges imposed on SCE by the FERC attributable to the service provided under this Agreement, or any amendments thereto.

18. No Dedication Of Facilities:

Any undertaking by one Party to the other Party under this Agreement shall not constitute the dedication of the electrical system or any portion thereof of the undertaking Party to the public or to the other Party, and it is understood and agreed that any such undertaking by a Party shall cease upon the termination of its obligations hereunder.

19. No Third Party Rights:

Unless otherwise specifically provided in this Agreement, the Parties do not intend to create rights in or grant remedies to any third party as a beneficiary of this Agreement or of any duty, covenant, obligation, or undertaking established hereunder.

20. Relationship Of Parties:

The covenants, obligations, and liabilities of the Parties are intended to be several and not joint or collective, and nothing contained in this Agreement shall ever be construed to create an association, joint venture, trust, or partnership, or to impose a trust or partnership covenant, obligation, or liability on or with regard to either Party. Each Party shall be individually responsible for its own covenants, obligations, and liabilities as provided in this Agreement. Neither Party shall be under the control of or shall be deemed to control the other Party. Neither Party shall be the agent of or have a right or power to bind the other Party without such other Party's express written consent.

21. Waivers:

Any waiver at any time by either Party of its rights with respect to a default under this Agreement, or with respect to any other matter arising in connection with this Agreement, shall not be deemed a waiver with respect to any other or subsequent default or other matter arising in connection therewith. Any delay, short of any statutory period of limitation, in asserting or enforcing any right, shall not be deemed a waiver of such right.

22. Governing Law:

Except as otherwise provided by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the state of California.

23. Notices:

Any notice, demand, or request provided in this Agreement, or served, given, or made in connection with it, shall be made in accordance with Section 6 of the Service Agreement.

24. Severability:

In the event that any term, provision, covenant, or condition of this Agreement or the application of

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any such term, covenant, or condition shall be held invalid as to any person, entity, or circumstance by any court, arbitration, or regulatory authority having jurisdiction, the invalidity of such term, covenant or condition shall not affect the validity of any other term, provision, condition or covenant and such term, provision, covenant or condition shall remain in force and effect as applied to this Agreement to the maximum extent permitted by law. The Parties hereto further agree to negotiate in good faith to establish new and valid terms, conditions and covenants to replace any found invalid so as to place each Party as nearly as possible in the position contemplated by this Agreement.

25. Entire Agreement:

This Agreement constitutes the complete and final expression of the agreement between the Parties and is intended as a complete and exclusive statement of the terms of their agreement which supersedes all prior and contemporaneous offers, promises, representations, negotiations, discussions, communications, and other agreements which may have been made in connection with the subject matter of this Agreement.

26. Ambiguities:

Ambiguities or uncertainties in the wording of this Agreement shall not be construed for or against any Party, but will be construed in the manner that most accurately reflects the Parties’ intent as of the date they executed this Agreement.

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27. Signature Clause:

The signatories hereto represent that they are authorized to enter into this Agreement on behalf of the Party for whom they sign. This Agreement is hereby executed as of the 26th day of ___July____, 2002.

SOUTHERN CALIFORNIA EDISON COMPANY By: ____/s/ A. Larry Grant_____ Name: A. Larry Grant Title: Vice President SIERRA POWER CORPORATION By: ___/s/ Kent DuysanDuysen________ Name: Kent DuysanDuysen Title: President

Formatted: Font: Bold

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Reserved for future use Formatted: Header, Centered

Page 15

Exhibit A Interconnection Facilities

Description and Cost

1. SCE-Financed Interconnection Facilities Actual Costs (“Original Facilities”):

Description Amount 1. 1,700 ft. 12 kV line $37,312.24 2. 12 kV recloser equipment and padmounted relay protection package $125,092.40 3. Metering Equipment $4,425.22 4. 1500 kVA, 12000-277/480 V pad-mounted transformer and 75 feet of 3-1/C 1/0 primary cable $22,337.14 Original Facilities Total: $189.167.00 2. SCE-Financed Interconnection Facilities Actual Costs 2003 Replacement (“Additional Facilities 1”): 1. Installation of one Pad Mount Auto Re-closure, one

Controller and miscellaneous materials and supplies $82,612.71 2. Removed one Load Interrupter, type C, 3-Phase, 14.4 kV ($15,175.56)** Additional Facilities 1 Total: $67,437.15 **This amount excludes the Sierra Power Corporation Payment of $6,452.26 on April 22, 2004 for removal cost. 3. SCE-Financed Interconnection Facilities Actual Costs 2006 Replacement “Additional Facilities 2”): 1. Installation of one Pad Mounted Auto Re-closure $51,778.64 2. Original installed cost of Pad Mounted Auto Re-Closure ($36,149.38) installed June 1, 2003. Additional Facilities 2 Total: $15,629.26

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Exhibit A

Interconnection Facilities Description and Cost

(Cont.) 4. Total Interconnection Facilities Cost In-Service Date:

Facilities Interconnection Facilities Cost

Total Interconnection Facilities Cost

07/26/02 Original Facilities

$189,167.00 $189,167.00


$67,437,15 $256,604.15


$15,629.26 $272,233.41

5. Interconnection Facilities Charge Effective Date SCE-Financed Monthly

Rate Interconnection Facilities Cost

Interconnection Facilities Charge

07/26/02 to 05/31/03 1.31% $189,167.00 $2,478.0906/1/03 to 07/17/04 1.31% $256,604.15 $3,361.5107/18/04 to 05/31/06 1.35% $256,604.15 $3,464.1606/01/06 to 11/13/06 1.33% $256,604.15 $3,412.8411/14/06 to 04/03/09 1.33% $272,233.41 $3,620.7004/4/09 to present 1.34% $272,233.41 $3,647.93

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Exhibit B

One-Line Diagram

Page 18

Page 19

Exhibit C

Capital Additions Description and Cost

1. Capital Additions: (None at this time) 2. Cost: Estimated Cost In-Service Date:

Description of

Modification

Capital Additions

Cost

One-Time Cost

ITCC Total Cost

Actual Cost In-Service Date:

Description of

Modification

Capital Additions

Cost

One-Time Cost

ITCC Total Cost

3. Capital Additions Charge: Effective Date

Customer-Financed

Monthly Rate

Estimated Capital Additions Cost

Capital Additions Charge based on Estimated Capital

Additions Cost

Actual Capital Additions

Cost

Capital Additions

Charge based on Actual

Capital Additions

CostIn-Service Date of Capital Addition

0.38%

Title Page



BETWEEN


AND




1. This Service Agreement, dated as of the date executed by the Distribution Customer

under Section 7 of this Service Agreement, is entered into, by and between Southern

California Edison Company (“Distribution Provider”), and Sierra Power Corporation

(“Distribution Customer”).

2. The Distribution Customer has been determined by the Distribution Provider to have

a Completed Application for Distribution Service under the Tariff.

3. The Distribution Customer has provided to the Distribution Provider an Application

deposit in the amount of waived, in accordance with the provisions of Section 6.2 of the

Tariff.

4. Service under this Service Agreement shall commence on the later of (1) date of

execution, or (2) the date on which construction of any Direct Assignment Facilities and/or

Distribution System Upgrades specified in Section 8.0 and 9.0 of the attached Specification

For Wholesale Distribution Service is completed and all additional requirements are met

pursuant to Section 7.4 of the Tariff, or (3) such other date as it is permitted to become

effective by the Commission. Service under this Service Agreement shall terminate on the

earliest of (1) ten (10) years from the commencement date of Distribution Service under this

Service AgreementJuly 26, 2017, or (2) the termination date of the Interconnection Facilities

Agreement between Distribution Provider and Distribution Customer, or (3) Distribution

Provider’s option, upon failure by Distribution Customer to provide advance notice to

Distribution Provider of changes (other than maintenance which is addressed in Section

13.3.2.4 of the attached Specifications For Wholesale Distribution Service) made to

Distribution Customer’s generation or power transformation facilities which are connected to

Distribution Provider’s electrical system pursuant to this Service Agreement. Distribution

Customer shall provide advance notice to Distribution Provider when such changes are

contemplated so that the Distribution Provider can evaluate any potential system impacts

which may occur as a result of the change or whether a new Application under the Tariff

needs to be submitted.

5. The Distribution Provider agrees to provide and the Distribution Customer agrees to

take and pay for Distribution Service in accordance with the provisions of the Tariff and this

Service Agreement.

6. Any notice or request made to or by either Party regarding this Service Agreement

shall be made to the representative of the other Party as indicated below.


Southern California Edison Company Manager, Grid Contract Managements and Business Development P.O. Box 800 2244 Walnut Grove Avenue Rosemead, California 91770 Telefax No. (626) 302-92921152 Telephone No. (626) 302-96401771


Sierra Power Corporation 9000 Road 234 Terra Bella, CA 93270 Telefax No. (550) 535-4515 Telephone No. (559) 535-4893

7. The Tariff and attached Specifications For Wholesale Distribution Service are

incorporated herein and made a part hereof.

IN WITNESS WHEREOF, the Parties have caused this Service Agreement to be executed by

their respective authorized officials.


By: /s/ A. Larry Grant V.P. 7-24-02

Name Title Date


By: /s/ Kent Duysen President 7-26-02

Name Title Date

SPECIFICATIONS FOR WHOLESALE DISTRIBUTION SERVICE

1. Term of Transaction: See Section 4 of the Service Agreement

Service Commencement Date: See Section 4 of the Service Agreement

Termination Date: See Section 4 of the Service Agreement

2. Description of capacity and energy to be transmitted by Distribution Provider

including the electric Control Area in which the transaction originates and, for a Resource

connected to the Distribution Provider’s Distribution System, a five year forecast of monthly

Generation. Up to 9 MW from Distribution Customer’s Terra Bella Generating Facility.

3. Point of Receipt: The generator side of the pad mounted disconnect switch tie to the

12.4 kV Zion circuit connected to Distribution Provider’s Terra Bella Substation, as shown in

Exhibit B of the Interconnection Facilities Agreement between Distribution Provider and

Distribution Customer.

Point of Delivery: The ISO Controlled Grid at the Distribution Provider’s Vestal

Substation

Receiving Party: The California Independent System Operator Corporation.

4. Description of Wholesale Distribution Load at the Point of Delivery (including a five

year forecast of monthly load requirements): Not Applicable

5. Interruptible Load amount (summer and winter), location and conditions/limitations

(five year forecast): Not Applicable

6. Maximum amount of capacity and energy to be transmitted: 9.0 MW operating within

the power factor range of 0.95 leading and 0.95 lagging. The ISO metering facilities shall be,

notwithstanding Section 13.1 of this Service Agreement, owned by the Distribution

Customer and located on the Distribution Customer’s side of the Point of Receipt.

Distribution Customer shall be responsible for the installation, maintenance, testing, and

certification of the ISO metering facilities in accordance with applicable ISO Tariff

provisions and Metering Protocol. Distribution Customer shall be responsible for all costs

associated with the testing and certification of ISO metering facilities.

7. Designation of party(ies) subject to reciprocal service obligation: Waived.

8. Direct Assignment Facilities: Provided for in the Interconnection Facilities

Agreement between Distribution Provider and Distribution Customer executed concurrently

herewith.

9. Distribution System Upgrades required prior to the commencement of service: None

10. Real Power Loss Factors: 3.73% Credit to Distribution Customer

11. Distribution Service under this Agreement will be subject to the charges detailed

below.

11.1 Customer Charge: None

11.2 Demand Charge: None, pursuant to Section 10.2.2 of the Tariff

11.3 Facilities Charge: The applicable monthly charges under the

Interconnection Facilities Agreement between Distribution Provider and Distribution

Customer.

11.4 System Impact and/or Facilities Study Charge(s): None

11.5 Failure to respond to load shedding and curtailment procedures charge:

If the Distribution Customer fails to curtail its transactions or shed load in

accordance with this Service Agreement and Tariff, then the Distribution

Customer shall pay the Distribution Provider one hundred mills per

kilowatt-hour for each kilowatt-hour of Generation or Wholesale

Distribution Load it failed to curtail or shed

12. Letter of credit or alternative form of security to be provided and maintained by

Distribution Customer pursuant to Sections 7.4 and 15 of the Tariff: Provided for in

the Interconnection Facilities Agreement between Distribution Provider and

Distribution Customer executed concurrently herewith.

13. Technical and Operational Implementation of Tariff:

13.1 Metering And Communications Equipment

13.1.1 Distribution Provider shall install, own, and maintain revenue quality meters at the

point of interconnection between the Distribution Provider’s Distribution System and

the Distribution Customer’s Resource or Wholesale Distribution Load. If feasible,

such meters shall be installed at the high voltage bus at each such point of

interconnection. The meters shall measure and record real power (watts) and reactive

power (vars) flow, if applicable, in both directions and shall meet the requirements of

the ISO. Meters not installed at the high voltage bus or at the point of interconnection

shall be compensated for line losses and transformation losses to the point of

interconnection, if applicable.

13.1.1.1 Distribution Provider shall read or retrieve meter data on the first normal business day

after the end of each billing cycle or such other date as may be required to carry out

the provisions of the Tariff. Distribution Provider shall use the meter data for

determining accounting and billing information and shall report the data to the ISO,

Formatted: Indent: Left: 0.75"

Distribution Customer’s scheduling coordinator and Distribution Provider’s

scheduling coordinator, as applicable.

13.1.1.2 The revenue meters shall be tested by the Distribution Provider at least once a year

and within ten normal business days after a request by the Distribution Customer.

The Distribution Customer shall pay for the cost of the requested test if the meter has

been tested within the previous twelve months. The Distribution Customer will be

afforded the opportunity to be present during any meter test. The Distribution

Provider shall immediately repair, adjust, or replace any meter or associated

equipment found to be defective or inaccurate.

13.1.1.3 The Distribution Provider shall adjust the recorded data to compensate for the effect

of an inaccurate meter. Such adjustment shall be made for a maximum period of

thirty days prior to the date of the test or for the period during which such inaccuracy

may be determined to have existed, whichever period is shorter. No adjustment prior

to the beginning of the next preceding month shall be made except by agreement of

the parties. Should any meter fail to register, the Distribution Provider shall estimate,

from the best information available, the demand created, energy flow, and var flows

during the period of the failure. The Distribution Provider shall, as soon as possible,

correct the bills rendered to the Distribution Customer by the Distribution Provider

which are affected by the inaccurate meter. That correction, when made, shall

constitute full adjustment of any claim arising out of the inaccurate meter for the

period of the correction.

13.1.2 The Distribution Customer and the Distribution Provider shall install communications

facilities, equipment, and software to schedule and monitor the Distribution

Customer’s Resource or Wholesale Distribution Load connected to the Distribution

Provider’s Distribution System, to exchange data, and for any other purpose as

reasonably required to implement this Service Agreement and the Tariff in

accordance with Good Utility Practice.

13.1.3 All metering, communications, and data exchanges required to implement this

Service Agreement and the Tariff shall be automated to the greatest extent practical.

The Operating Representatives shall coordinate standards and specifications for

metering and communications equipment as well as any related hardware and

software required to implement this Service Agreement and the Tariff, provided such

metering and communications equipment and any related hardware and software

shall, if possible, be compatible with the Distribution Provider’s existing or planned

facilities or software, meet all applicable ISO, Western Systems Coordinating Council

(“WSCC”) and North American Electric Reliability Council (“NERC”) requirements,

and be consistent with Good Utility Practice.

13.1.4 The Distribution Customer shall procure, install and maintain, at its sole expense,

communications equipment, and any related hardware and software required to be

installed on its system in accordance with Section 13.1. The Distribution Customer

shall reimburse the Distribution Provider for all expenses incurred by the Distribution

Provider for any metering and communications equipment, and related hardware and

software, including any modifications to existing facilities or software required for

the Distribution Provider to provide service in accordance with this Service

Agreement and the Tariff.

13.2 Interconnection of Distribution Customer’s Wholesale Distribution

Load:

13.2.1 Facilities for the interconnection of the Distribution Customer’s Wholesale

Distribution Load to the Distribution Provider’s Distribution System shall be

installed, operated and maintained in accordance with Good Utility Practice.

13.2.2 The Distribution Customer shall specify: (i) the voltage level of service desired,

provided such voltage shall be compatible with standard voltages used on the

Distribution Provider’s system, and (ii) any applicable service criteria of the

Distribution Customer, including, but not limited to, any redundancy desired in

elements available to service Wholesale Distribution Load from Distribution

Provider’s Distribution System. If technically feasible, the Distribution Provider shall

provide service at such voltage and in accordance with such criteria, conditioned on

the Distribution Provider obtaining any necessary regulatory permits and complying

with any other federal, state, or local requirements for the construction of any such

facilities.

13.2.3 The Distribution Customer shall keep the Distribution Provider informed on a timely

basis of changes in Wholesale Distribution Load and cooperate in planning any

addition to or upgrade of interconnection facilities to accommodate load growth or

additions. The Distribution Customer shall provide to the Distribution Provider by

September 1 of each year an update of the information set forth in Sections 4 and 5

for the following five calendar years.

13.2.4 The Distribution Provider shall own, operate, and maintain all interconnection

facilities on the Distribution Provider’s side of the Point of Delivery. The

Distribution Customer shall pay all costs and expenses for such interconnection

facilities that are used exclusively to provide Distribution Service to the Distribution

Customer including, but not limited to, the costs of permitting, planning, procuring,

constructing, owning, maintaining, and operating any such facilities.

13.2.5 The Distribution Customer shall provide and maintain, at its sole expense, facilities

on its side of the Point of Delivery in accordance with Good Utility Practice. The

Distribution Customer shall install protective equipment on its system and take any

other reasonable measures to protect the safe and reliable operation of the

Distribution Provider’s system from disturbances on the Distribution Customer’s

system in accordance with Good Utility Practice.

13.2.6 If the Distribution Customer does not maintain its power factor pursuant to Section

8.3 of the Tariff, then the Distribution Provider may, at its option, install the

necessary distribution capacitors or other power factor correction devices at the

Distribution Customer’s expense, including installation and on-going costs of

ownership.

13.2.6 7 The Distribution Customer shall provide the Distribution Provider access to the

Distribution Customer’s interconnection facilities to the extent necessary for the

Distribution Provider to construct, operate, or maintain interconnection facilities. The

Distribution Customer agrees to grant the Distribution Provider all necessary

easements and rights of way, including adequate and continuing access rights, on the

property of the Distribution Customer to transport, install, operate, maintain, replace,

and remove the interconnection facilities, and any equipment or line extension that

may be provided, owned, operated and maintained by the Distribution Provider on the

property of the Distribution Customer. The Distribution Customer agrees to grant

such easements and rights of way to the Distribution Provider at no cost and in a form

satisfactory to the Distribution Provider and capable of being recorded in the office of

the county recorder.

13.2.8 The Parties shall cooperate with one another in scheduling maintenance to any

interconnection facility or in taking any interconnection facility out of service,

provided that in an emergency the Distribution Provider may take facilities out of

service if necessary to protect the Distribution Provider’s system.

13.3 Interconnection of Distribution Customer’s Resource:

13.3.1 The Distribution Customer shall interconnect its Resource with the Distribution

Provider’s Distribution System in accordance with all applicable ISO, WSCC and

NERC criteria, and Good Utility Practice.

13.3.2 The Distribution Customer, at its sole expense, shall design, own, procure, install,

operate and maintain all equipment and facilities, including the Resource, on its side

of the Point of Receipt (Distribution Customer’s Facilities). The Distribution

Provider shall design, own, install, and maintain all facilities necessary to

interconnect the Distribution Customer’s Resource on the Distribution Provider’s side

of the Point of Receipt (Distribution Provider’s Facilities) at the Distribution

Customer’s sole expense to the extent permitted by Commission policies. Such

facilities shall include any equipment necessary to protect the Distribution Provider’s

electric system, employees, and customers from damage or injury arising out of or

connected with the operation of the Distribution Customer’s Facilities, including, but

not limited to, short circuit protection, breaker closing/reclosing control, unit tripping,

loss of synchronism, overcurrent/under current devices such as relays, remote

terminal units, circuit breakers, and meters. The Distribution Customer’s Facilities,

and their operation and maintenance, shall meet the Distribution Provider’s

specifications and shall be subject to inspection and testing by the Distribution

Provider. The Distribution Customer’s Facilities shall be designed, constructed,

operated and maintained as follows:

13.3.2.1 Design

(a) The Distribution Customer, at Distribution Customer’s sole expense, shall:

(1) Design Distribution Customer’s Facilities;

(2) Acquire all permits and other approvals necessary for the construction, operation, and

maintenance of Distribution Customer’s Facilities; and

(3) Complete all environmental impact studies necessary for the construction, operation,

and maintenance of Distribution Customer’s Facilities.

(b) At the Distribution Provider’s request, the Distribution Customer shall provide to the

Distribution Provider the Distribution Customer’s electrical specifications and design

drawings pertaining to Distribution Customer’s Facilities for the Distribution

Provider’s review prior to finalizing the design of Distribution Customer’s Facilities

and before beginning construction work based on such specifications and drawings.

The Distribution Customer shall provide to the Distribution Provider reasonable

advance written notice of any changes in Distribution Customer’s Facilities and

provide to the Distribution Provider specifications and design drawings of any such

changes for the Distribution Provider’s review and approval. The Distribution

Provider may require modifications to such specifications and designs as it deems

necessary to allow the Distribution Provider to operate the Distribution Provider’s

electric system in accordance with Good Utility Practice.

(c) The total installed capacity (net of Station Use) of the Distribution Customer’s

Resources shall not exceed the Nameplate Rating of 9.375 MVA.

13.3.2.2 Construction

(a) The Distribution Customer, at the Distribution Customer’s sole expense, shall

construct Distribution Customer’s Facilities.

(b) The Distribution Provider shall have the right to review and consult with the

Distribution Customer regarding the Distribution Customer’s construction schedule.

(c) The Distribution Provider shall have the right to periodically inspect the Distribution

Customer’s Facilities prior to initial operation upon advance notice to the Distribution

Customer. The Distribution Customer, at its option, may be present at such

inspection.

13.3.2.3 Operation

(a) The Distribution Customer shall operate Distribution Customer’s Facilities in

accordance with any applicable ISO, NERC or WSCC criteria and Good Utility

Practice, including, but not limited to, following voltage schedules, free governor

response, meeting power factor requirements at the Point of Receipt, equipment

maintenance coordination, and communication of necessary data, information, or

reports.

(b) The Distribution Customer shall operate its Resource to generate such reactive power

factor correction as necessary to maintain voltage levels and reactive power support

as may be required by the Distribution Provider. The Distribution Customer shall not

deliver excess reactive power to the Distribution Provider unless otherwise agreed

upon between the Parties. If the Distribution Customer fails to provide reactive

power support, the Distribution Provider may do so at the Distribution Customer’s

expense.

(c) The Distribution Customer’s Resource shall be designed and operated so as to prevent

or protect against the following adverse conditions on the Distribution Provider’s

electric system: inadvertent and unwanted re-energization of a utility dead line or

bus; interconnection while out of synchronization, overcurrent, voltage imbalance;

ground faults; generated alternating current frequency outside permitted safe limits,

poor power factor or reactive power outside permitted limits; and abnormal

waveforms.

(d) Distribution Customer’s Facilities shall be operated with all of the Distribution

Customer’s protective apparatus in service whenever its Resource is connected to, or

is operated in parallel with, the Distribution Provider’s electric system. Any

deviation for brief periods of emergency or maintenance shall only be by agreement

of the Parties.

(e) The Distribution Customer shall maintain operating communications with the

Distribution Provider’s designated switching center. The operating communications

shall include, but not be limited to, system parallel operation or separation, scheduled

and unscheduled outages, equipment clearances, protective relay operations, and

levels of operating voltage and reactive power.

(f) The Distribution Provider may require the Distribution Customer, at the Distribution

Customer’s expense, to demonstrate to the Distribution Provider’s satisfaction the

correct calibration and operation of the Distribution Customer’s protective apparatus

at any time the Distribution Provider has reason to believe that said protective

apparatus may impair the Distribution Provider’s electric system integrity.

13.3.2.4 Maintenance

(a) The Distribution Customer shall maintain Distribution Customer’s Facilities in

accordance with Good Utility Practice.

(b) The Parties shall cooperate with one another in scheduling maintenance to any

interconnection facility or in taking any interconnection facility out of service,

provided that in an emergency the Distribution Provider may take facilities out of

service if necessary to protect the Distribution Provider’s system.

(c) The Distribution Customer shall notify the Distribution Provider by January 1, May 1,

and September 1 of each year, of the estimated scheduled maintenance for the

succeeding four months.

13.3.2.5 The Distribution Customer shall not commence parallel operation of Distribution

Customer’s Facilities with the Distribution Provider’s electric system until written

approval for operation of the interconnection facilities has been given by the

Distribution Provider. Such approval shall not be unreasonably withheld. The

Distribution Customer shall notify the Distribution Provider of the Distribution

Customer’s intent to energize the interconnection facilities not less than forty-five

(45) calendar days prior to such energizing. The Distribution Provider shall have the

right to inspect Distribution Customer’s Facilities within thirty (30) calendar days of

receipt of such notice. If the Distribution Customer’s Facilities are not approved by

the Distribution Provider, the Distribution Provider shall provide written notice to the

Distribution Customer stating the reasons for the Distribution Provider’s disapproval

within five (5) calendar days of inspection.

13.3.2.6 The Distribution Customer shall provide written notice to the Distribution Provider at

least fourteen (14) calendar days prior to the initial and subsequent testing of the

Distribution Customer’s protective apparatus. The Distribution Customer’s

protective apparatus shall be tested thereafter at intervals not to exceed four (4) years

for system voltages less than 66kV, two (2) years for system voltages of 66kV to

200kV, and one (1) year for system voltages of 200kV and above. All such tests shall

be performed using qualified personnel. The Distribution Provider shall have the

right to have a representative present at the initial and subsequent testing of the

Distribution Customer’s protective apparatus and to receive copies of the test results.

13.3.2.7 The Distribution Provider shall not assume any responsibility for protection of

Distribution Customer’s Facilities. The Distribution Customer shall be fully

responsible for protecting Distribution Customer’s Facilities in such a manner that

faults or other disturbances on the Distribution Provider’s electric system do not

cause damage to Distribution Customer’s Facilities.

13.3.2.8 Review by the Distribution Provider of the design, construction, operation, or

maintenance of Distribution Customer’s Facilities shall not constitute any

representation as to the economic or technical feasibility, operational capability, or

reliability of such facilities. The Distribution Customer shall in no way represent to

any third party that any such review by the Distribution Provider of such facilities

including, but not limited to, any review of the design, construction, operation or

maintenance of such facilities by the Distribution Provider is a representation by the

Distribution Provider as to the economic or technical feasibility, operational

capability, or reliability of such facilities. The Distribution Customer is solely

responsible for economic and technical feasibility, operational capability, and

reliability of Distribution Customer’s Facilities.

13.3.2.9 The Distribution Customer agrees to grant the Distribution Provider all necessary

easements and rights of way, including adequate and continuing access rights, on

property of the Distribution Customer to transport, install, operate, maintain, replace,

and remove the Distribution Provider’s interconnection facilities, and any equipment

or line extension that may be provided, owned, operated and maintained by the

Distribution Provider on the property of the Distribution Customer. The Distribution

Customer agrees to grant such easements and rights of way to the Distribution

Provider at no cost and in a form satisfactory to the Distribution Provider and capable

of being recorded in the office of the county recorder.

13.3.3 The Distribution Customer shall keep the Distribution Provider informed on a timely

basis of changes in Generation and cooperate in planning any addition to or upgrade

of interconnection facilities to accommodate additions to Generation. The

Distribution Customer shall provide to the Distribution Provider by September 1 of

each year an update of thee information set forth in Section 2 for the following five

calendar years.

13.4 Each party shall appoint an Operating Representative for the purpose of facilitating

communication between the parties, exchanging data on forecasted Wholesale

Distribution Load or Generation necessary for long-term planning, coordinating

operating criteria and activities, developing detailed operating procedures as

necessary, and addressing other technical and operational considerations required for

implementation of this Service Agreement and Tariff. The Operating Representatives

shall not have any authority to modify, amend, terminate, or supersede any provision

of this Service Agreement or Tariff; or to require any expansion of or addition to the

Distribution Provider’s Distribution System. The Distribution Provider shall have the

authority to adopt rules or procedures for the implementation of the Service

Agreement and the Tariff that are consistent with such Service Agreement and Tariff,

provided that the Distribution Customer shall not be deemed to have waived any right

it may have to contest such rules or be deemed to have waived any right it may have

to contest such rules or procedures before the Commission or any other forum having

jurisdiction over the Service Agreement.

13.5 The Distribution Customer shall, upon request, provide the Distribution Provider with

such reports and information concerning its operation as are reasonably necessary to

enable the Distribution Provider to operate the Distribution System safely and

efficiently.

14. Load Shedding and Curtailment Procedures:

14.1 If a system contingency requires Curtailment of ISO schedules, the Distribution

Customer shall curtail its ISO schedules as requested by the Distribution Provider.

Such ISO schedule Curtailments shall be implemented only to the extent that they

effectively relieve the constraint or that they are directed by the ISO, and to the extent

practical, shall be made on a pro-rate basis, based on the share of the total load served

from the constrained facility, with all other distribution service users of the affected

path, including the Distribution Provider.

14.2 The Parties shall implement Load Shedding programs to maintain the reliability and

integrity of the electric system, as provided in Section 9 of the Tariff.

14.2.1 Load Shedding shall include any combination of the following: (i) automatic Load

Shedding; (ii) manual Load Shedding; and (iii) rotating interruption of customer load.

The Distribution Provider will order Load Shedding to maintain the relative sizes of

load served within the area requiring Load Shedding to the extent practicable, unless

otherwise required by circumstances beyond the control of the Distribution Provider

or the Distribution Customer or unless otherwise directed by the ISO.

14.2.2. Automatic load shedding devices will operate without notice. When manual load

shedding or rotating interruptions are necessary, the Distribution Provider shall notify

the Distribution Customer’s dispatchers or schedulers of the required action and the

Distribution Customer shall comply as directed by the Distribution Provider.

14.2.3 The Distribution Customer shall, at its own expense, provide, operate, and maintain in

service high-speed, digital under-frequency load-shedding equipment. The

Distribution Customer’s equipment shall be: (i) compatible and coordinate with the

Distribution Provider’s load shedding equipment, and (ii) set for the amount of load

to be shed, with frequency trips and tripping time as determined by the Distribution

Provider. In the event the Distribution Provider modifies the load-shedding system,

the Distribution Customer shall, at its own expense, make changes to the equipment

and setting of such equipment, as required. The Distribution Customer shall test and

inspect the load-shedding equipment within ninety days of taking Distribution Service

under the Tariff and at least once every two years thereafter and promptly provide a

written report to the Distribution Provider of the results of such test. The Distribution

Provider may request a test of the load-shedding equipment with reasonable notice.

Documents

Federal Energy Regulatory Commission€¦ · Federal Energy Regulatory Commission 888 First Street ... (“Amended IFA”) ... The Sierra Power Terra Bella generating facility is